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, 2011
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, 2011, 3,600,886,932 shares of Common Stock were outstanding, including 45,807,732 shares represented by
45,807,732 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 Advisers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2Item 2.

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

2Item 3.

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

2Item 4.

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

16

Item 4A.

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

28

Item 5.

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

28

Item 6.

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

64

Item 7.

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

81

Item 8.

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

83

Item 9.

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

86

Item 10.

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

87

Item 11.

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

103

Item 12.

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

113

PART II
Item 13.

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

115

Item 14.

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

115

Item 15.

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

115

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

115

Item 16B.

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

115

Item 16C.

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

116

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

117

Item 16E.

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

117

Item 16F.

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

118

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

118

PART III
Item 17.

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

120

Item 18.

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

120

Item 19.

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

121Index 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 (“U.S.”).
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 Advisers
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, 2007,2008, 2009, 2010 and 2011 which is derived from our consolidated financial statements included in this annual
report. These financial statements are prepared in accordance with accounting principles generally accepted in
the U.S. (“U.S. GAAP”). Certain reclassifications of previously reported amounts have been made to conform tothe 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
2008
2009
2010
2011
(in millions, except per share data and percentages)

2007Statement of operations data:
Revenue . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . .
Net revenue . . . . . . . . . . . . . . . . . . .
Non-interest expenses . . . . . . . . . . .
Income (loss) before income
taxes . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense (benefit) . . . . . .
Net income (loss)(1) . . . . . . . . . . . . .
Less: Net income (loss) attributable
to noncontrolling interests(1) . . . .
Net income (loss) attributable to
Nomura Holdings, Inc. (“NHI”)
shareholders(1) . . . . . . . . . . . . . . .
Balance sheet data (period end):
Total assets(2) . . . . . . . . . . . . . . . . . .
Total NHI shareholders’ equity(1) . .
Total equity(1) . . . . . . . . . . . . . . . . . .
Common stock . . . . . . . . . . . . . . . . .
Per share data:
Net income (loss) attributable to
NHI shareholders—basic . . . . . . .
Net income (loss) attributable to
NHI shareholders—diluted . . . . .
Total NHI shareholders’ equity(3) . .
Cash dividends(3) . . . . . . . . . . . . . . .
Cash dividends in USD(4) . . . . . . . .
Weighted average number of shares
outstanding (in thousands)(5) . . . .
Return on equity(6): . . . . . . . . . . . .

¥ 2,049,101
958,000
1,091,101
772,599¥

318,502145,930
172,572¥ 1,593,722
806,465
787,257
852,167¥(3,256)¥

175,828¥

664,511351,884
312,627
1,092,892¥ 1,356,751
205,929
1,150,822
1,045,575¥ 1,385,492
254,794
1,130,698
1,037,443$ 16,741
3,079
13,662
12,535(64,910)(780,265)
3,259(70,854)(68,169) ¥ (709,411)

105,247
37,161
68,086

93,25561,33031,925

1,127
741
$
386

3,264

40

(322)

¥

(67,847) ¥ (708,192)¥25,236,054
1,988,124
2,001,102
182,800

¥

92.25

¥

(35.55) ¥(364.69)$

92.00
1,146.23
44.00
0.37

$

(35.57)
1,042.60
34.00
0.34 $(366.16)590.99
25.50
0.26

8.3%

¥

(1,219)¥35,577,511
2,185,919
2,222,959
182,800

1,906,012

2011(7)¥24,837,848
1,539,396
1,551,546
321,765

1,908,399(3.3)%

1,941,907(40.2)%¥

288¥

67,798¥28,661$

346¥32,230,428
2,126,929
2,133,014
594,493¥36,692,990
2,082,754
2,091,636
594,493$443,366
25,16625,274
7,183

¥

21.68

¥

7.90

$

$

21.59
579.70
8.00
0.09

$

7.86
578.408.00
0.10

3,126,790
3.7%

0.10
0.09
6.99

3,627,799
1.4%

Notes:(1) On April 1, 2009, we adopted new guidance for the accounting and reporting for noncontrolling interests. In the abovetable, this guidance has been retrospectively applied to the amounts as of and for the years ended March 31, 2007, 2008
and 2009.
(2) On April 1, 2008, we adopted new guidance for the offsetting of cash collateral against net derivative balances. See
Note 1, “Summary of accounting policies” in our consolidated financial statements included in this annual report. In theabove table, total assets as of March 31, 2007 and 2008 have been adjusted to retrospectively apply this guidance.
(3) Calculated using the number of shares outstanding at period end.
(4) Calculated using the yen-dollar exchange rate of the respective fiscal year end date, the noon buying rate in New York
City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York.
(5) The number shown is used to calculate basic earnings per share.
(6) Calculated as Net income (loss) attributable to NHI shareholders divided by average Total NHI shareholders’ equity.
(7) Calculated using the yen-dollar exchange rate of $1.00 = ¥82.76, the noon buying rate in New York City for cable transfers
in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York on March 31, 2011.

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 ¥82.76 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, 2011. 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(1)Year end

2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

121.81124.09110.48100.7194.68

110.07
96.88
87.80
86.12
78.74

116.55113.61100.8592.49
85.00

117.56
99.85
99.15
93.40
82.76

Calendar year 2011

High

Low

January . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
April . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
June (through June 24) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

83.36
83.79
82.98
85.26
82.12
80.98

81.56
81.48
78.74
81.31
80.12
79.87

(1) Average rate represents the average of rates available on the last business day of each month during theperiod.
The noon buying rate for Japanese yen on June 24, 2011 was $1.00 = ¥80.32
B. Capitalization and Indebtedness.
Not applicable.
C. Reasons for the Offer and Use of Proceeds.
Not applicable.

4

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.
Our business may be materially affected by financial markets and economic conditions and market
fluctuations in Japan and elsewhere around the world
In the past several years, financial markets and economic conditions in Japan and elsewhere around theworld have changed rapidly and, for a period of time, very negatively. In particular, in 2008 and through to early
2009, the financial services industry, global securities markets and real economies, especially in developed
countries, were materially and adversely affected by a world-wide market crisis and dislocation. While the world
economy grew in 2010 due to stimuli from expansive monetary and fiscal policies, the global markets face newchallenges arising out of concerns over economic and structural issues in the peripheral countries of the Eurozone
as well as political instability in certain regions such as the Middle East, and the economic outlook in the medium
to long term remains uncertain.
In addition, not only purely economic factors but also future war, acts of terrorism, economic or politicalsanctions, disease pandemics, geopolitical risks and events, natural disasters or other similar events could have amaterial adverse effect on economic and financial market conditions. For example, with respect to our homemarket of Japan, the economic downturn has prolonged and may worsen in the future due to the economic
consequences resulting from direct and indirect negative effects of the East Japan Earthquake in March 2011,
including damages to nuclear power plant and resulting power shortages, and supply line disruptions. A sustained
market/economic downturn can adversely affect our business and can result in substantial losses. Even in theabsence of a prolonged market/economic downturn, we may incur substantial losses due to market volatility.
Also, governmental fiscal and monetary policy changes in Japan and other jurisdictions where we conductbusiness and other business environmental changes may adversely affect our business, financial condition andresults of operations. The following are certain risks related to the financial markets and economic conditions on
our specific businesses.
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 clients. 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 may increase theamount of withdrawals or reduce the amount of new investments in these portfolios, and would reduce therevenue we receive from our asset management businesses.
Our investment banking revenues may decline
Changes in financial or economic conditions would likely to affect 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 are financial and market changes
unfavorable to our investment banking business and our clients.

5

We may incur significant losses from our trading and investment activities
We maintain large trading and investment positions in fixed income, equity and other markets, both for ourown account and for the purpose of facilitating our clients’ trades. Our positions consist of various types ofassets, including financial derivatives transactions in equity, interest rate, currency, credit, commodity and othermarkets, as well as in loans and real estate. Fluctuations in the markets where these assets are traded canadversely 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 significant losses. Although we have worked to mitigate these position risks with a variety of hedging
techniques, these market movements could result in losses. We can incur losses if the financial system is overly
stressed and the markets move in a way we have not anticipated, as a result of specific events such as the global
financial and credit crisis in the autumn of 2008.
Our businesses have been and may continue to be affected by changes in market volatility levels. Certain of
our trading businesses depend on market volatility to provide trading and arbitrage opportunities, and decreases
in volatility may reduce these opportunities and adversely affect the results of these businesses. On the other
hand, increased volatility, while it can increase trading volumes and spreads, also increases risk as measured by
Value-at-Risk (“VaR”) and may expose us to increased risks in connection with our market-making andproprietary businesses or cause us to reduce the outstanding position or 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 set up and support financial investment products. We may incur
significant losses from these positions in the event of significant market fluctuations.
In addition, if we are the party providing collateral in a transaction, significant declines in the value of thecollateral can increase our costs and reduce our profitability; and if we are the party receiving collateral, suchdeclines can reduce our profitability by reducing the level of business done 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 of securities concentrated in specific assets can increase our risks and expose us tolarge losses in our businesses such as market-making, block trading, underwriting, asset securitization andacquiring newly-issued convertible bonds through third-party allotment. We have committed substantial amountsof capital to these businesses. This often requires us to take large positions in the securities of a particular issuer
or issuers in a particular industry, country or region. In addition, we may incur substantial losses due to market
fluctuations on asset-backed securities such as commercial mortgage-backed securities.
Extended market declines can reduce liquidity and lead to material losses
Extended market declines can reduce the level of market activity and the liquidity of the assets traded in themarket for our business, which may make it difficult to sell, hedge or value such assets. If we cannot properly
close out or hedge our associated positions in a timely manner or in full, particularly with respect toover-the-counter derivatives, we may incur substantial losses. Further, the inability or difficulty of monitoring
prices in a less liquid market could lead to unanticipated losses.
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
6

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 the 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.
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 developed throughfinancial 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 market perception of our credit risk.
Furthermore, in a market downturn, our clients and counterparties could incur substantial losses of their own,
thereby weakening their financial condition and, as a result, increasing our credit risk exposure to them.
We may have to recognize impairment charges with regard to the amount of goodwill and tangible andintangible 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 by allocating their acquisition costs to the assets acquired and liabilities assumed andrecording the remaining amount as goodwill.
We may have to record impairment charges with regard to the amount of goodwill and tangible andintangible assets. Any impairment charges for goodwill or tangible or intangible assets we recognize, if recorded,
may adversely affect our results of operations and financial condition.

7

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 secure ample liquidity through repurchase and securities lending transactions,access to long-term debt, issuance of mid/long-term bonds, diversification of our short-term funding sources suchas commercial paper, and by holding a portfolio of highly liquid assets. We bear the risk that we may loseliquidity 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.
We may be unable to access the short-term debt markets
We issue commercial paper and short-term bank loans as a source of unsecured short-term funding of ouroperations. Our liquidity depends largely on our ability to refinance these borrowings 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 be unable to obtain short-term
financing from banks to make up any shortfall.
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 our liquidity, or we may have to sell assets at
depressed prices, which could adversely affect our results of operations and financial condition. Our ability tosell our assets may be impaired by other market participants seeking to sell similar assets into the market at thesame time.
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.
Further, other factors which are not specific to us may increase our funding cost, such as negative market
perception of Japanese fiscal soundness.
8

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 commonly significant events such as the terrorist
attacks in the U.S. on September 11, 2001, U.S. subprime issues since 2007, the global financial and credit crisisin the autumn of 2008 and the East Japan Earthquake in March 2011, but also more specifically the following
types of events that could cause losses on our trading and investment assets:•

sudden and significant reductions in credit ratings with regard to our trading and investment assets bymajor rating agencies,•

sudden changes in trading, tax, accounting, laws and other related rules which may make our trading
strategy obsolete, less competitive or not workable, or•an unexpected failure in a corporate transaction in which we participate resulting in our not receiving
the consideration we should have received, as well as bankruptcy, deliberate acts of fraud, andadministrative penalty with respect to the issuers of our trading and investment assets.

We may be exposed to losses when third parties that are indebted to us do not perform their obligations
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.
Credit risk may also arise from:•holding securities issued by third parties, or•the execution of securities, futures, currency or derivative trades that fail to settle at the required time
due to nondelivery by the counterparty, such as monoline insurers (financial guarantors) which arecounterparties in credit default swap contracts, or systems failure by clearing agents, exchanges,
clearing houses or other financial infrastructure.

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 clients or counterparties and to specific countries andregions that we believe may present credit concerns. Default risk, however, may arise from events orcircumstances that are difficult to detect, such as account-rigging and fraud. We may also fail to receive full9

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 inmarket values reduce the value of our collateral, we may become undersecured.
Our clients and counterparties may be unable to perform their obligations to us as a result of political or
economic conditions
Country, regional and political risks are components of credit risk, as well as market risk. Political or
economic pressures in a country or region, including those arising from local market disruptions or currency
crises, may adversely affect the ability of clients or counterparties located in 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, investment banking andother businesses.
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. In accordancewith the amendments to the Securities and Exchange Law (which has been renamed as the Financial Instruments
and Exchange Act (the “FIEA”) since September 30, 2007), effective from December 1, 2004, banks and certain
other financial institutions became able to enter into the securities brokerage business. In addition, in accordancewith the amendments to the FIEA effective from June 1, 2009, firewalls between commercial banks andsecurities firms were deregulated. Therefore, as our competitors will be able to cooperate more closely with theiraffiliated commercial banks, banks and other types of financial services firms can compete with us to a greater
degree than they could before deregulation in the areas of financing and investment trusts. Among others,
securities subsidiaries of commercial banks and non-Japanese firms have been affecting our market shares in thesales and trading, investment banking and retail businesses.
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 consolidated with other financial
institutions in Japan and overseas. Through such business alliances and consolidations, these other securities
companies and commercial banks have the ability to offer a wide range of products, including loans, deposittaking, insurance, brokerage, asset management and investment banking services within their group. This
diversity of services offered may enhance their competitive position compared with us. They also have the ability
to supplement their investment banking and brokerage businesses with commercial banking, insurance and otherfinancial services revenues in an effort to gain market share. Our policy to remain independent from commercial
banks may result in a loss of market share as these large, consolidated firms expand their businesses.
Our ability to expand internationally will depend on our ability to compete successfully with financial services
firms 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 services firms based inimportant non-Japanese markets, including the U.S., Europe and Asia. Some of these financial services firms arelarger, better capitalized and have a stronger local presence and a longer operating history in these markets. As a10

means to bolster our international operations, we acquired certain Lehman operations in Europe, the Middle East
and Asia in 2008 and we have been rebuilding and expanding our operations in these regions and the U.S. We
believe that expansion and strengthening of our international business will be important to our global success,and failure to expand and strengthen our international operations may materially and adversely affect our global
strategy.
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 execute, confirm or settle securities transactions,•failure by officers or employees to perform proper administrative activities prescribed in our regularprocedures, such as placing erroneous orders to securities exchanges,•

suspension or malfunction of internal or third party systems, or unauthorized access, misuse andcomputer viruses affecting such systems,•

the destruction of our facilities or systems or impairment of our ability to do business arising from theimpacts of disasters or acts of terrorism, which are beyond anticipation and may not be covered by ourcontingency plan or•

the disruption of our business due to pandemic diseases or illnesses, such as avian and swine flu.

Our business is subject to substantial legal, regulatory and reputational risks
Substantial legal liability or a significant regulatory action against us could have a material financial effecton us or cause reputational harm to us, which in turn could seriously damage our business prospects and resultsof operations. Also, material changes in regulations applicable to us or to our market could adversely affect ourbusiness.
Our exposure to legal liability is significant
We face significant legal risks in our businesses. These risks include liability under securities or other laws
in connection with securities underwriting and offering transactions, liability arising from the purchase or sale ofany securities or other products, disputes over the terms and conditions of complex trading arrangements or thevalidity of contracts for our transactions and legal claims concerning our financial advisory and merchantbanking businesses.
During a prolonged market downturn or upon the occurrence of an event that adversely affects the market,
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, evenlegal transactions might be subject to social criticism according to the particular details of such transactions.
These risks may be difficult to assess or quantify and their existence and magnitude may remain unknown for
substantial periods of time.
Extensive regulation of our businesses limits our activities and may subject us to significant penalties andlosses
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, and such governmental and regulatory scrutiny may increase as our operations expand. These11regulations are broadly designed to ensure the stability of financial system and the integrity of the financial
markets and financial institutions, and to protect clients and other third parties who deal with us, and often limit
our activities, through net capital, client protection and market conduct requirements. Although we have policies
in place to prevent violations of such laws and regulations, we may not always be able to prevent violations, andwe could be fined, prohibited from engaging in some of our business activities, ordered to improve our internal
governance procedures, or be subject to revocation of our license to conduct business. Our reputation could also
suffer from the adverse publicity that any administrative or judicial sanction against us may create. As a result of
any such sanction, we may lose business opportunities for a period of time, even after the sanction is lifted, if andto the extent that our clients, especially public institutions, decide not to engage us for their financial transactions.
Tightening of regulations applicable to the financial system and financial industry could adversely affect ourbusiness, financial condition and operating results.
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, to improve the stability andtransparency of Japan’s financial system and to ensure the protection of investors, a bill to amend the FIEA waspassed by the Diet, which became effective on April 1, 2011, excluding certain sections. The amendment
strengthened supervision through introducing corporate group regulations, which we are subject to, such as
consolidated capital adequacy regulations on financial instruments business operators the size of which exceeds
specified parameters and on certain parent companies, and by requiring reports on the financial status of suchcompanies. In addition, the Financial Services Agency (the “FSA”) amended the “Comprehensive Guidelines forSupervision of Financial Instruments Business Operators, etc.” which became effective on April 1, 2011. Suchamendment includes, among others, restrictions on the compensation systems of corporate groups of specified
parent company, including Nomura Group, which are designed to reduce excessive risk taking by their
executives and employees. For more information about such amendments, see “Regulation—Japan” under
Item 4.B. of this annual report.
In addition, in response to the financial markets crisis in the autumn of 2008, various reforms to thefinancial regulatory framework at a national level and by international agreements, such as the agreements
reached at the Group of Twenty (G-20) Summit, are undergoing to restore financial stability and to enhancefinancial industry’s resilience against future crises. Such proposals for reform include the Dodd-Frank WallStreet Reform and Consumer Protection Act (the “Dodd-Frank Act”) in the U.S. and various proposals tostrengthen financial regulation in the European Union and the United Kingdom (“U.K.”). The impact of these
proposals (including bank levy) on us and our industry may be significant. However, policy responses to suchproposals and amendment of existing systems are still ongoing and are difficult to precisely predict at this point.
For more information about such regulations, see “Regulation—Overseas” under Item 4.B. of this annual report.
The changes in regulations on accounting standards, consolidated regulatory capital adequacy rules andliquidity ratio could also have a material adverse affect on our business, financial condition, and results ofoperations. For example, we currently calculate our consolidated regulatory capital adequacy ratio in accordancewith the FSA’s notice on Basel II based consolidated capital adequacy rules applicable to the Ultimate
Designated Parent Company as defined in “Regulation-Japan” under Item 4.B. below. Although specific rules toimplement the Basel III measures announced by the Basel Committee on Banking Supervision (the “BaselCommittee”) are yet to be finalized in Japan by the FSA, the implementation of those new measures may cause
our capital adequacy ratio to decrease or may require us to liquidate assets, raise additional capital or otherwise
restrict our business activities in a manner that could adversely increase our funding costs or could otherwise
adversely affect our operating or financing activities or the interests of our shareholders. In addition to theBasel III, the Financial Stability Board and the Basel Committee are considering proposals to impose additional
regulatory capital requirements to global systemically important financial institutions (“G-SIFIs”), identified byfinancial regulators. The costs and its impact upon us as described above may further increase if we are identified
as the G-SIFIs. For more information about such measures, see “Consolidated Regulatory Requirements” under
Item 5.B. of this annual report.
12Deferred tax assets may be reviewed due to a change in laws and regulations, resulting in an adverse affect on
our operating results and financial condition.
We recognize deferred tax assets on the consolidated balance sheets as a possible benefit of tax relief in the
future. If there is a tax reform such as a reduction of corporate tax rate or a change in accounting standards in the
future, we may reduce the deferred tax assets in our consolidated balance sheets. As a result, it could adversely
affect our operating results and financial condition.
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. Although we haveprecautions in place to detect and prevent any such misconduct, it may not be effective in all cases, and we may
not always be able to detect or deter misconduct by an employee, director or officer. If any administrative or
judicial sanction is issued against us as a result of such misconduct, we may lose business opportunities for aperiod of time, even after the sanction is lifted, if and to the extent that our clients, especially public institutions,decide not to engage us for their financial transactions.
Third parties may also engage in fraudulent activities, including devising a fraudulent scheme to induce ourinvestment, loans, guarantee or any other form of financial commitment, both direct and indirect. Because of thebroad range of businesses that we engage in and the large number of third parties with whom we deal in our
day-to-day business operations, such fraud or any other misconduct may be difficult to prevent or detect. We
may not be able to recover the financial losses caused by such activities and our reputation may also be damagedby such activities.
Unauthorized disclosure of personal information held by us may adversely affect our businessWe keep and manage personal information obtained from clients in connection with our business. In recent
years, there have been many reported cases of personal information and records in the possession of corporations
and institutions being improperly accessed or disclosed.
Although we exercise care in protecting the confidentiality of personal information and take steps tosafeguard such information in compliance with the Act on the Protection of Personal Information and rules,
regulations and guidelines relating thereto, if any material unauthorized disclosure of personal information does
occur, our business could be adversely affected in a number of ways. For example, we could be subject tocomplaints and lawsuits for damages from clients if they are adversely affected as a result of the release of theirpersonal 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 inconnection with public relations campaigns designed to prevent or mitigate damage to our corporate or brandimage or reputation. Any damage to our reputation caused by such unauthorized disclosure could lead to a
decline in new clients and/or a loss of existing clients, as well as to increased costs and expenses in dealing withany such problems.
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
13

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 engage in private equity businesses in and outside of Japan through fully owned subsidiaries and otherconsolidated entities which have third party pooling of funds. Decline of fair values of our investment positions,which could arise from deteriorating business performance of investee companies or any deterioration in themarket conditions of these sectors, may cause material losses to us. Further, our inability to dispose of our private
equity investments at the level and time we may wish could have a material impact on our operating results andfinancial condition.
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, as quickly as we may wish or at the desired values.
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 that the decline isother-than-temporary, then we record an impairment loss for the applicable fiscal period.
We may face an outflow of clients’ assets due to losses of cash reserve funds or bonds we offered
We offer many types of products to meet various needs of our clients with different risk profiles. Cashreserve funds, such as money management funds and money reserve funds are categorized as low-risk products.
Such cash reserve funds may fall below par value as a result of losses caused by the rise of interest rates or thewithdrawals 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 client confidence and lead to an outflow of client 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 our common stock at a particular price on any particular trading day, or 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
14

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 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 (“Companies Act”), relating to joint stock corporations and certain
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 than awhole unit. Holders of shares constituting less than one unit do not have the right to vote or any other rights
relating to voting. Under the unit share system, any holders of shares constituting less than a unit have 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. Sharesconstituting less than a unit are transferable under the Companies Act, but may not be traded on any Japanesestock exchange.
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 other jurisdictions
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 to a
non-Japanese company. Shareholders’ rights under Japanese law may not be as extensive as shareholders’ rights
under the laws of other jurisdictions, including jurisdictions within the U.S. You may have more difficulty inasserting your rights as a shareholder than you would as a shareholder of a corporation organized in anotherjurisdiction.
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 ultimately determine the actual dividend payment amount to our shareholders of record as of arecord date, including whether we will make any dividend payment to such shareholders at all, only after suchrecord date. For the foregoing reasons, our shareholders of record on a record date may not receive the dividends
they anticipate. Furthermore, we do not announce any dividend forecast.

15

It may not be possible for investors to effect service of process within the U.S. upon us or our directors or
executive officers, or to enforce against us or those persons judgments obtained in U.S. courts predicatedupon the civil liability provisions of the federal securities laws of the U.S.
We are a limited liability, joint-stock corporation incorporated under the laws of Japan. Most of ourdirectors and executive officers reside in Japan. Many of our assets and the assets of these persons are located inJapan and elsewhere outside the U.S. It may not be possible, therefore, for U.S. investors to effect service ofprocess within the U.S. upon us or these persons or to enforce against us or these persons judgments obtained in
U.S. courts predicated upon the civil liability provisions of the federal securities laws of the U.S. We believe that
there is doubt as to the enforceability in Japan, in original actions or in actions for enforcement of judgment of
U.S. courts, of liabilities predicated solely upon the federal securities laws of U.S.
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.
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. In Japan, we broadened thescope of our business when we began trading in equity securities in 1938 and when we organized the firstinvestment 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 U.S. in 1969 as a broker dealer and Nomura International Limited, now
Nomura International plc, in the U.K. in 1981, which acts as an underwriter and a broker, as well as otheroverseas affiliates, branches and representative offices.
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
16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 listed our shares (in the form of American Depositary Shares evidenced by American
Depositary Receipts) on the New York Stock Exchange.
We have also enhanced our asset management business through the acquisition of a majority interest in
Nomura Asset Management Co., Ltd. (“NAM”) in March 2000. NAM became a wholly-owned subsidiary of
Nomura in December 2001.
In June 2003, we adopted a committee-based corporate governance system under which we established theNomination Committee, the Audit Committee and the Compensation Committee. See Item 6.C of this annual
report.
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, 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, 2011, we operated offices in over 30 countries and regions including Japan, the U.S., the U.K.,
Singapore and Hong Kong Special Administrative Region (“Hong Kong SAR”) through our subsidiaries.
Our clients include individuals, corporations, financial institutions, governments and governmental
agencies.
Our business consists of the following three divisions, each followed by its principal business:•

Retail—investment consultation services•

Asset Management—development and management of investment trusts, and investment advisory
services•

Wholesale—serving corporations and institutional investors with a broad range of products and services•

Global Markets—fixed income and equity trading businesses•

Investment Banking—underwriting, financial advisory and solutions services and private equity

In April 2010, we established the Wholesale Division, encompassing the operations previously conductedby the Global Markets Division, the Investment Banking Division and the Merchant Banking Division.
Our Business Strategy
Our Corporate Goals and Principles
Our management vision is to establish ourselves as a globally competitive financial services group. We havealso set a management target of maintaining an average consolidated return on equity (“ROE”) of 10% to 15%
over the medium to long term, subject to change depending on capital regulation developments.
17

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 financial and capital markets. We aim to go beyond the boundaries of the
traditional securities business and take the lead in expanding into new business areas, thereby constructing new
growth models. In addition, we will promote compliance with applicable laws and regulations as well as engage
in ethical corporate behavior.
Our Business Divisions
RetailIn Retail, we conduct business activities mainly for individuals and corporations in Japan primarily througha network of nationwide branches of Nomura Securities Co., Ltd. (“NSC”). The total number of its head officeand local branches was 174 as of the end of March 2011. We offer investment consultation services to meet themedium to long term needs of our clients. The aggregate market value of our retail client assets dropped to ¥70.6
trillion as of the end of March 2011 from ¥73.5 trillion a year ago. We discuss retail client assets in “Retail Client
Assets” 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 clients. These include face-to-face meetings with our Financial Advisors,
either in our branch offices or through client visits, communications through Nomura Home Trade, an internetbased trading service, or through our call centers.
We capitalize on the linkages between the Retail, the Asset Management and the Wholesale Divisions tooffer various financial instruments such as stocks, debt securities, investment trusts and variable annuity
insurance products, for the short, medium, and long term, with different risk levels. We seek to provide
proprietary Nomura expertise to clients through various media such as our investor reports and Nomura Home
Trade.
Asset Management
We conduct our asset management business, which consists of the development and management ofinvestment trusts and investment advisory services, primarily through NAM. NAM is the largest asset
management company in Japan in terms of assets under management in investment trusts as of March 31, 2011.
In Japan, our challenge is to shift individual financial assets from saving products into investment products tocreate business opportunities. In order to make these opportunities available, NAM 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 to investors through NSC as well as throughfinancial institutions such as securities companies (including those outside our group), banks and Japan Post
Bank Co., Ltd. Investment trusts are also offered 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.
Wholesale
Our Wholesale Division consists of Global Markets, Investment Banking and certain other non-Retail
operations. We formed this new division in April 2010 to promote seamless coordination between the underlying
businesses and to provide our clients with timely, high value-added services tailored to their needs.
Global Markets
Global Markets consists of two businesses: Fixed Income and Equities.
•

Fixed Income handles mainly debt securities, and foreign currencies as well as related derivatives.

•

Equities focuses on equity securities and equity-linked derivatives.
18

We have full-service offerings in Fixed Income and Equities, with a proven track record of selling andtrading debt securities, 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 our clients, 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 Management
clients. In addition, we offer execution services based on cutting-edge technologies such as algorithmic trading
and transaction cost analysis. We seek to maximize the synergies and cross-selling opportunities across ourrecently expanded global operations.
We have established extensive ties with institutional investors in Japan and international markets; wealthy
and affluent investors, public-sector agencies and regional financial institutions in Japan as well as government
agencies, financial institutions and corporations around the world. These strong relationships enable us tounderstand specific client requirements and to 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.
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, U.S. and othermajor financial markets. We also arrange private placements and engage in other capital raising activities. We are
one of the leading equity and fixed income securities underwriters in Japan.
Financial Advisory & Solutions Services. We provide financial advisory services on business transactions
including mergers and acquisitions, divestitures, spin-offs, capital structuring, corporate defense activities,
leveraged buyouts and risk solutions. Our involvement in initial public offerings (“IPOs”), reorganizations andother corporate restructurings related to industry consolidation enhance our opportunities to offer clients otheradvisory and investment banking services. We are one of the leading financial advisors in Asia.
Private Equity. We operate private equity investment business mainly in Japan and Europe. For a further
description of our private equity business, see Item 5.A “Private Equity Business ” of this annual report.
Our Research Activities
Nomura is recognized as a leading content provider with an integrated global approach to providing capital
markets research. Our Japan Equity Research team continues to top the Institutional Investor and Nikkei Veritas
research polls. We launched our U.S. Equity Research platform in October 2010, assembling one of the best
Financial Institutions Group, Telecom/Media and Consumer teams in the industry. Our Fixed Income Researchteams around the globe have gained top tier positions in external surveys and with clients; notably, in theEuromoney FX poll, we are positioned as the number one Japanese foreign exchange house. In the weeks
following the East Japan Earthquake in March 2011, our research teams made a collaborative effort worldwide
and continued to deliver a wide range of research products, ensuring that our research flow remained
uninterrupted.
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.
19For example, for our retail clients, 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 and investment information, including our research reports through the internet or mobile
phones.
On the wholesale side, we have enhanced our technology platforms to provide better risk management andalso to increase trading capabilities through platforms allowing Direct Market Access and Algorithmic trading.
We also plan to further leverage our service entities in India to support our wholesale operations.
Competition
The financial services industry is intensely competitive and we expect it to continue remain so. We compete
globally with other brokers and dealers, investment banking firms, commercial banks, investment advisors andother financial services firms. We also face competition on regional, product and niche bases from local andspecialist 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.

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

the monetary and fiscal policies of national governments and international economic organizations, and•economic developments both within and between Japan, the U.S., Europe and other major industrialized
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 the 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, mergers and acquisitions (“M&A”) advisory) and secondary securities sales and trading.
There has also been substantial consolidation and convergence among financial institutions, both within
Japan and globally and this trend accelerated further in recent years as the credit crisis caused mergers andacquisitions and asset acquisitions in the industry. The growing presence and scale of financial groups which
encompass commercial banking, securities brokerage, investment banking and other financial services has led toincreased competition. Through their broadened offerings, these firms are able to create good client relationships
and leverage their existing client base in the 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
share 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. We have also competed, and expect to compete, with other financial institutions which commit
capital to businesses or transactions for market share in investment banking activities. In particular, corporateclients may seek loans or commitments in connection with investment banking mandates and other assignments.
20Moreover, the trend toward consolidation and convergence has significantly increased the capital base andgeographic 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.
Regulation
Japan
Regulation of the Securities Industry and Securities Companies. Pursuant to the FIEA, the Prime Minister ofJapan has the authority to supervise and regulate the securities industry and securities companies, and delegates
its authority to the Commissioner of the FSA. Nomura, as a holding company of a securities company, as well as
its subsidiaries including NSC are subject to such supervision and regulation by the FSA. The Commissioner of
the FSA delegates certain authority to the Director General of Local Finance Bureaus to inspect local securities
companies and branches. Furthermore, the Securities and Exchange Surveillance Commission, an external
agency of the FSA which is independent from the Agency’s other bureaus, is vested with authority to conduct
day-to-day monitoring of the securities markets and to investigate irregular activities that hinder the fair tradingof securities, including inspection of securities companies. Securities companies are also subject to the rules andregulations of the Japanese stock exchanges and the Japan Securities Dealers Association, a self-regulatoryorganization of the securities industry.
To enhance investor protection, each Japanese securities company is required to segregate client assets andto 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 asecurities company that is a member of the fund, the Investor Protection Fund provides protection of up to¥10 million per client. The Investor Protection Fund covers claims related to securities deposited by clients withthe failed securities company and certain other client 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. As a result, NSC is prohibited from conducting banking andother financial services, and another subsidiary of Nomura, The Nomura Trust & Banking Co., Ltd., engages inbanking and certain financial services.
Financial Instruments and Exchange Act. The FIEA, which came into effect on September 30, 2007 toamend and replace the former Securities and Exchange Law, widely regulates financial products and services inJapan under the defined terms “financial instruments” and “financial instruments trading business”. It regulates
most aspects of securities transactions and the securities industry, 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. In addition, to enhance fairness and transparency in the financial markets and to protect investors, the
FIEA provides for, among other things, penalties for misrepresentations in disclosure documents and unfair
trading, strict reporting obligations for large shareholders and corporate information disclosure systems,
including annual and quarterly report systems, submission of confirmation certificates concerning thedescriptions in securities reports, internal controls over financial reporting, and corporate group regulations
which was introduced recently as described in “Recent Regulatory Amendments” below. A violation of applicablelaws and regulations may result in various administrative sanctions, including the revocation of registration or
license, the suspension of business or an order to discharge any director or executive officer who has failed tocomply with applicable laws and regulations.
Recent Regulatory Amendments. To improve the stability and transparency of Japan’s financial system andto ensure the protection of investors, a bill to amend the FIEA was passed by the Diet on May 12, 2010. A certain
21

part of the amendment, which became effective on April 1, 2011, is intended to strengthen supervision throughintroducing corporate group regulations, such as consolidated capital adequacy regulations on securities
companies the size of which exceeds specified parameters (tokubetsu kinyu shouhin torihiki gyosha, a “Special
Financial Instruments Firm”) and on certain parent companies designated by the Prime Minister (shitei
oyagaisha, “Designated Parent Companies”), by requiring reports to the FSA on the financial status of suchcompanies. The ultimate parent company of Designated Parent Companies within a corporate group (saishu
shitei oyagaisha, an “Ultimate Designated Parent Company”), is also required to file reports on its businesses andcapital adequacy ratio on a consolidated basis with the FSA and to make such reports available for public
inspection at all business offices of the Special Financial Instruments Firm. As shall be discussed in further detailbelow, we have been designated as an Ultimate Designated Parent Company and are subject to theserequirements. Another part of the amendment, which is scheduled to become effective within two and a halfyears from its promulgation on May 19, 2010, is intended to improve the stability and transparency of thesettlement of over-the-counter (“OTC”) derivative transactions by requiring the use of central counterparties forclearing certain OTC derivative transactions and by establishing a system for data storage and reporting of trade
information for financial instruments business operators and clearing organizations.
The FSA amended the “Comprehensive Guidelines for Supervision of the Financial Instruments Business
Operators, etc.” (the “Financial Instruments Business Operators Guideline”), and a certain part of which became
effective on April 1, 2011 imposes various regulations on the group of a designated parent company, which
includes the Designated Parent Company and its subsidiaries (the “Designated Parent Company Group”), in linewith the amendments to FIEA as stated above. This amendment requires the Designated Parent Company Groupto strengthen the group’s business management system, compliance system and risk management system as wellas public disclosure of detailed information, including the capital adequacy ratio. It also includes restrictions on
the compensation system, which are designed to reduce excessive risk taking by their executives and employees
within the Designated Parent Company Group.
Overseas
Our overseas offices and subsidiaries are also subject to various laws, rules and regulations applicable in the
countries where they carry on their operations, including, but not limited to, those promulgated and 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 doing business in the U.S., which wasestablished in July 2007 through the consolidation of the National Association of Securities Dealers, Inc. and themember regulation, enforcement and arbitration functions of the New York Stock Exchange) in the U.S. and by
the Financial Services Authority and the London Stock Exchange plc in the U.K. We are also subject toregulations in various countries regarding international money laundering and related issues. For example, theUSA Patriot Act of 2011 contains measures to prevent, detect and prosecute terrorism and international money
laundering by imposing significant compliance and due diligence obligations, creating crimes and penalties, andwith an expansive extraterritorial application of U.S. jurisdiction. Failure to comply with such laws, rules orregulations could result in fines, suspension or expulsion, which could have a material adverse effect upon us.
Regulatory Changes. In response to the financial markets crisis, governments and regulatory authorities invarious jurisdictions have made and continue to make numerous proposals to reform the regulatory framework
for, or impose a tax or levy upon, the financial services industry to enhance its resilience against future crises,
contribute to the relevant economy generally or for other purposes. In the U.S., the Dodd-Frank Act was enacted
in July 2010, which includes provisions that, among many others, (i) restrict the ability of deposit-taking banks toengage in proprietary trading as well as make investments in hedge funds and private equity funds (the so-called“Volcker Rule”); (ii) empower regulators to liquidate failing financial companies that are systemically important;(iii) provide for new systemic risk oversight, (iv) provide for a broader regulatory oversight of hedge funds, andnew regulations regarding the role of credit rating agencies, investment advisors and others; (v) create a tighter
regulatory framework for OTC derivatives, and (vi) provide for new consumer and investor protection. Under the
Dodd-Frank Act, the Financial Stability Oversight Council was established to provide comprehensive monitoringof financial institutions in the U.S. The exact details of the implementation of the Dodd-Frank Act and its impact
22

on Nomura’s operations will depend on the final regulations as they become ultimately adopted by various
governmental agencies and oversight boards.
In the U.K., the Chancellor of the Exchequer announced in December 2010 to introduce a levy on the total
liabilities of U.K. banks, which would include the U.K. entities of non-U.K. banks and banking groups. This is inline with initiatives on national bank levies recently taken by the Council of European Union and relates more
broadly to a proposal regarding new taxes on financial institutions submitted to the governments of G-20 by theInternational Monetary Fund.
Regulatory Capital Rules
Japan
The FIEA requires that all Financial Instruments Firms (Category I) (“Financial Instruments Firms I”),
a category that includes NSC, ensure that their capital adequacy ratios do not fall below 120% on a
non-consolidated basis. The FIEA also requires Financial Instruments Firms I to file month-end reports regarding
their capital adequacy ratios with the Commissioner of the FSA or the Director-General of the appropriate Local
Finance Bureau, and also to disclose their capital adequacy ratios to the public on a quarterly basis. In addition, if
the capital adequacy ratio of a Financial Instruments Firm I falls below 140%, it must file a daily report with theauthorities. The FIEA provides for actions which the Prime Minister, through the Commissioner of the FSA or
the Director-General of the appropriate Local Finance Bureau, may take if any Financial Instruments Firm I fails
to meet the capital adequacy requirement. More specifically, if the capital adequacy ratio of any Financial
Instruments Firms I falls below 120%, the Commissioner of the FSA or the Director-General of the appropriate
Local Finance Bureau may order the Financial Instruments Firm I to change its business conduct, to deposit its
property in trust, or may issue any other supervisory order that such authorities deem necessary and appropriate
to protect the interests of the general public or investors. If the capital adequacy ratio of a Financial Instruments
Firm I falls below 100%, the authorities may take further action, including the issuance of orders to temporarilysuspend its business and the revocation of its registration as a Financial Instruments Firm I under the FIEA.
Under the FIEA and regulations thereunder, the “capital adequacy ratio” means the ratio of adjusted capital
to a quantified total of business risks. Adjusted capital is defined as net worth less illiquid assets. Net worth
mainly consists of stated capital, additional paid-in capital, retained earnings, reserves for securities transactions,certain allowances for doubtful current accounts, net unrealized gains/losses in the market value of investment
securities, and subordinated debt. Illiquid assets generally include non-current assets, certain deposits andadvances and prepaid expenses. The business risks are divided into three categories: (i) market risks (i.e., risks ofasset value changes due to decline in market values and other reasons), (ii) counterparty risks (i.e., risks ofdelinquency of counterparties and other reasons) and (iii) basic risks (i.e., risks in carrying out daily businessactivities, such as administrative problems with securities transactions and clerical mistakes), each quantified in
the manner specified in a rule promulgated under the FIEA.
We closely monitor the capital adequacy ratio of NSC on a continuous basis. Since the introduction of thecapital adequacy requirement in Japan in 1989, we have at all times been in compliance with these requirements.
We believe that we will continue to be in compliance with all applicable capital adequacy requirements in theforeseeable future.
Under the “Guideline for Financial Conglomerates Supervision”, established by the FSA in June 2005, a“financial conglomerate” is defined as a corporate group, including two or more different types of financial
institutions, such as a securities company and a bank. Nomura is classified as a financial conglomerate. Similar to
Financial Instruments Firms I, financial conglomerates are required to maintain 100% capital adequacy ratio on aconsolidated basis, unless otherwise specified by other law or notice. The Financial Instruments Business
Operators Guidelines, when established by the FSA in July 2007, required corporate groups of financial
instruments firms engaging in international operations to report their consolidated capital adequacy ratios to theCommissioner of the FSA semi-annually and additionally if the ratio falls below 120%.
23

The Financial Instruments Business Operators Guidelines, allowed corporate groups of financial instruments
firms engaging in international operations to elect to calculate their capital adequacy ratios in accordance withthe “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” (the “Bank Holding
Companies Notice”), instead of calculating these ratios in accordance with the guideline applicable to financial
conglomerates. The Bank Holding Companies Notice on capital adequacy for Japanese bank holding companies
closely follows the risk-weighted approach introduced by the Basel Committee, commonly referred to as BaselII. The capital adequacy ratio (the ratio of adjusted capital to quantified total risk-weighted assets) required to be
maintained by bank holding companies with international operations under the Bank Holding Companies Noticeis 8.0% on a consolidated basis. We elected to calculate our capital adequacy ratio in accordance with the Bank
Holding Companies Notice beginning on March 31, 2009.
As discussed above, the FSA amended the FIEA and introduced new rules on consolidated regulation andsupervision of securities companies on consolidated basis on April 1, 2011 to improve the stability andtransparency of Japan’s financial system and ensure the protection of investors. The FSA also amended the FIEA
to include reporting on consolidated regulatory capital for the Ultimate Designated Parent Companies. On the
introduction of these rules, NSC was designated as a Special Financial Instruments Firm, following which wehave been designated as an Ultimate Designated Parent Company. As such, we are required to calculate
consolidated regulatory capital adequacy ratio according to the FSA’s “Criteria for Ultimate Designated Parent
Companies to judge whether their capital adequacy status is appropriate in light of their own and theirsubsidiaries’ asset holdings” (hereinafter referred to as the “Upstream Consolidated Regulatory Capital Notice”).
Accordingly, since our designation as an Ultimate Designated Parent Company in April 2011, we now calculate
our Basel II-based consolidated regulatory capital adequacy ratio according to the Upstream Consolidated
Regulatory Capital Notice.
The FSA also amended the FIEA to include reporting on consolidated regulatory capital for the Ultimate
Designated Parent Companies, effective April 1, 2011. We are subject to this reporting requirements as well as
the capital adequacy requirements described above.
If our capital ratios fall to the minimum level required by the FSA, our business activities may be impacted.
However, these ratios are currently at well capitalized levels. We have met all capital adequacy requirements towhich we are subject and have consistently operated in excess of the FSA’s capital adequacy requirements.
Subject to future developments in regulatory capital regulations and standards, there has been no significant
change in our capital ratios which the management believes would have material impact on our operations.
The Basel Committee has issued a series of announcements regarding a broader program to strengthen theregulatory capital framework in light of weaknesses revealed by the financial crises, as described in“Consolidated Regulatory Requirements” under Item 5.B of this annual report. The Upstream Consolidated
Regulatory Capital Notice is expected to incorporate the series of rules and standards in line with the schedule
proposed by the Basel Committee.
Overseas
In the U.S., Nomura Securities International, Inc. (“NSI”) is a registered broker-dealer and registered futurescommission merchant. As such, NSI is subject to the minimum net capital requirements of the U.S. Securities
and Exchange Commission and the Commodity Futures Trading Commission. NSI is regulated by self-regulatoryorganizations, such as the Financial Industry Regulatory Authority and the Chicago Mercantile Exchange Groupexchanges. These requirements specify minimum levels of capital that U.S. broker-dealers are required tomaintain and limit the amount of leverage that such broker-dealers may use in their businesses. As a primary
dealer of U.S. government securities, NSI is also subject to the capital adequacy requirements under theGovernment Securities Act of 1986.

24

In Europe, the Nomura Europe Holdings plc group is regulated under consolidated supervision by the
Financial Services Authority in the U.K. Various banking and broker/dealer subsidiaries of the group are
regulated on a stand alone basis by their appropriate local regulators.
In addition, certain of our other subsidiaries are subject to various securities and banking regulations, andthe capital adequacy requirements established by the regulatory and exchange authorities of the countries inwhich those subsidiaries operate. We believe that each such subsidiary is, and will in the foreseeable future be, incompliance with these requirements in all material respects.
Management Challenges and Strategies
Although the global economy was moving gradually toward normality supported by emerging markets, it isfacing uncertainty due to the unstable political situation in the Middle East, sovereign crisis in Europe and theEast Japan Earthquake in March. In this environment, we plan to address the needs of our clients globally bytaking advantage of our strengthened business platform and to grow our client base and improve our market
share. We will continue to strategically allocate management resources towards social responsibility to contributeto a stable forum for providing steady liquidity through properly functioning markets.
In addition, we will continue to proceed with our plans to reduce costs by reengineering businesses to fit themarket environment and increase operational efficiency.
To achieve our strategic goals, we will implement the following initiatives:•

Retail Division
In the Retail Division, we will continue to enhance our products and service offerings, which areprovided through Financial Advisors, online or via call centers to accommodate increasingly
sophisticated and diverse client needs. We aim to enhance investment consultation services and tocontinue being a trusted partner to our clients by providing world-class products and services that meettheir individual needs.

•

Asset Management Division
In our investment trust business, we aim to provide individual clients with a diverse range of investment
opportunities to meet investors’ needs and in investment advisory business, we aim to provide
institutional clients globally with value-added investment service. Together, we intend to increase assets
under management and expand our client base.
We aim to increase our world-class competitive advantage in Japan and the rest of Asia by making
continuous efforts to improve investment performance and to gain trust from investors worldwide.

•

Wholesale Division
Global Markets will enhance our product development expertise to continue acting as our productsupply hub and also work to expand profitability. We will focus on delivering high value-added
products and solutions to our clients by leveraging our global trading infrastructure and making full use
of our strengthened business franchise. In Fixed Income, we will strengthen not only our global
marketing structure but also our trading and product development capabilities. In Equities, we willcontinue to act as a world-class liquidity provider. Through even closer co-operation between Fixed
Income and Equities we will aim for synergies in structuring, research, distribution, and risk
management.
In Investment Banking, we are expanding our M&A advisory and corporate finance businesses todiversify sources of profit by providing high value-added solutions to meet the individual needs of eachclient. We aim to enhance our presence as a global investment bank headquartered in Asia that provides
world-class services, while continuing to build our business in Japan.
25

In implementing the initiatives outlined above, we will enhance collaboration between divisions. We aim tobring together the collective strengths of our domestic and international operations to realize our management
objectives and to maximize shareholder value by enhancing profitability across our businesses, while helping tostrengthen the global financial and capital markets.
In addition, we are working to further enhance our management system to support continued growth.
With respect to regulatory tightening, we will continue to closely monitor global regulatory trends, namely
with respect to regulatory capital and move forward with measures for preparedness. We have been closely
monitoring developments concerning Basel III regulations since it was first announced at the end of 2010.
We understand that it is necessary to further strengthen our global risk management system. By adopting aproactive risk management approach, senior management has directly engaged in risk management-related
decision making. We will continue to strengthen this system.
The East Japan Earthquake heightened our awareness of the importance of a crisis management structure
and business continuity plans. We will work to further enhance our existing crisis management scheme including
our system infrastructure and business recovery system.
As our business becomes increasingly international, we recognize the growing importance of compliance. In
addition to complying with laws and regulations, we view compliance in a wider context. We will further
enhance Nomura Group’s overall compliance system.
We view talented personnel as key assets. In line with our basic client-oriented business approach, we haveestablished globally-uniform personnel policies firmly rooted in the belief that employees should be rewarded fortheir overall performance. We will continue to build a professional organization capable of delivering acomprehensive range of services that satisfy our clients.

26

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 Financial Partners 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 . . . . . . . . . . . . . . . . . . . . . .
Nomura Healthcare Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Private Equity Funds Research and Investments Co., Ltd. . . . . . . . . . . . . .
Nomura Agri Planning & Advisory 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 Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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. (c) . . . . . . . . . . . .
Nomura Funding Facility Corporation Limited . . . . . . . . . . . . . . . . . . . . . .
Nomura Global Funding plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Europe Finance N.V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Principal Investment plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Capital Markets plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura European Investment Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 Asia Investment (India Powai) Pte. Ltd. . . . . . . . . . . . . . . . . . . . .
Nomura Services India Private Limited . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Financial Advisory and Securities (India) Private Limited . . . . . .
Nomura Asia Investment (Fixed Income) Pte. Ltd. . . . . . . . . . . . . . . . . . . .

Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.K.
U.K.
U.K.
FranceLuxemburg
Germany
Switzerland
Italy
BahrainIrelandU.K.
The Netherlands
U.K.
U.K.
U.K.
The Netherlands
Hong Kong SAR
Singapore
Malaysia
Australia
Indonesia
Singapore
India
India
Singapore

—
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
100
100
96
100
100
100
100

27

D. Property, Plants and Equipment.
Our Properties
As of March 31, 2011, our principal head office is located in Tokyo, Japan and occupies 1,075,424 square
feet of office space. Our other major offices in Japan are our Osaka branch office, which occupies 125,299 square
feet, our Nagoya branch office, which occupies 82,918 square feet, and the head office of NAM in Tokyo, which
occupies 166,765 square feet. We lease certain other office space in Japan. Nomura Land and Building Co., Ltd.
(“NLB”), which was accounted for under the equity method of accounting in our consolidated financial
statements as of March 31, 2011, is the lessor of certain office space in Japan, including part of our Tokyo
headquarters.
As of March 31, 2011, our major offices outside Japan are the offices of Nomura International plc (“NIP”)
located in London, which occupy 867,923 square feet, the New York head office of Nomura Securities
International, Inc., which occupies 204,669 square feet, and offices of Nomura International (Hong Kong)
Limited located in the Hong Kong Special Administrative Region, which occupy 201,038 square feet. We own
the buildings and we either own or lease the land for the offices in London. We lease most of our other overseas
office space.
As of March 31, 2011, the major office of Nomura Services India Private Limited, our specialized service
company in India, occupies 476,269 square feet.
As of March 31, 2011, the aggregate book value of the land and buildings we owned, including capitalleases was ¥180 billion, and the aggregate book value of equipment we owned, including communications anddata processing facilities, was ¥80 billion.
In August 2009 a Nomura consolidated subsidiary, Nomura Properties plc (“NPP”) entered into a 20 year
lease as tenant of a 525,000-square-foot development at 1 Angel Lane in London in the U.K. Construction wascompleted in December 2010 and the building is now used as our European headquarters.
On May 24, 2011, Nomura acquired additional shares of common stock issued by one of its relatedcompanies, NLB, converting NLB into a consolidated subsidiary of Nomura. As a result, Nomura consolidated
the properties of NLB and its subsidiaries. See Note 10, “Business combinations” for more information.
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, 2011 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.
28

Business EnvironmentJapan
The Japanese economy entered a recovery phase in the fiscal year ended March 31, 2010 supported bystimulus measures taken by the Japanese government and rebounding exports amid robust growth in emerging
economies and a recovery in Europe and the U.S. These conditions continued through the first half of the fiscal
year ended March 31, 2011, but the recovery lost momentum in the second half with benefits from government
policy measures fading and growth in overseas economies slowing as Europe’s sovereign debt problems spread.
In addition, the East Japan Earthquake hit before the end of the fiscal year, leading to rapid deterioration in
operations and distribution, particularly in the manufacturing industry. Against this backdrop, real gross domestic
product (“GDP”) in the fiscal year ended March 31, 2011 showed the first positive growth in three years, of
2.3%, after having fallen 2.4% in the prior fiscal year. Meanwhile until the East Japan Earthquake, theemployment environment steadily improved supported by the economic recovery through the first half of the
fiscal year.
Amid ongoing and widespread cost-cutting efforts, corporate earnings continued to expand in the fiscal year
ended March 31, 2011 on a recovery in sales from the second half of the prior fiscal year underpinned bydomestic and overseas economies. We estimate that recurring profits at major companies (NOMURA 400
companies) rose by around 50% in the fiscal year ended March 31, 2011 supported by strong profit growth in thefirst half of the fiscal year, despite the effects of the East Japan Earthquake late in the fiscal year. The overall
improvement in earnings was driven by the manufacturing industry, which benefited from firm exports.
The stock market declined after maintaining a rising trend through April 2010, with stock prices falling overthe fiscal year as a whole. Economic stimulus measures taken by many countries from 2008 supported stock
price gains, but global stock markets turned down from April 2010 as risk aversion gained momentum around theworld amid spreading concerns over sovereign debt prompted by deteriorating public finances in Europe.
Thereafter, stock markets rallied in response to stepped-up monetary easing in the U.S., though Japanese stocks
fell at the end of the fiscal year in the wake of the East Japan Earthquake. The Tokyo Stock Price Index (TOPIX),
after reaching its high for the fiscal year in April 2010, declined through November, then rose through February
2011, before falling back to its low for the year immediately after the East Japan Earthquake. The TOPIX had
advanced from 773.66 points at the end of March 2009 to 978.81 points at the end of March 2010, an increase of
26.5% over the fiscal year, then declined to 869.38 points at the end of March 2011, a fall of 11.2%. The Nikkei
Stock Average also declined over the fiscal year as a whole, by 12.0%, from ¥11,089.94 at the end of March2010 to ¥9,755.10 at the end of March 2011.
Yields on newly issued 10-year Japanese government bonds were at the 1.3% level in early April 2010, thepoint at which share prices turned up, but fell to the 0.8% level in October 2010 against a backdrop of ongoingstock price declines. Thereafter, yields rose to around 1.3% in February 2011 in tandem with the stock market
rally, ending March at around that level. Despite concerns over Japan’s expanding sovereign debt, interest rates
stayed low amid expectations of further monetary easing by the Bank of Japan and other factors.
On the foreign exchange markets, the yen was influenced by changes in U.S. monetary policy and concerns
over the euro currency system. At the end of March 2010, the yen was trading at the ¥93 level against the U.S.
dollar and the ¥125 level against the euro. From July 2010, the U.S. dollar weakened against the yen as the view
spread that concerns over sovereign debt in Europe would adversely affect the U.S. economy, with the yen at one
stage reaching around ¥80 against the dollar at the end of October 2010. Thereafter, yen appreciation halted as
the Bank of Japan took additional monetary easing steps, and although it rose to the ¥76 level against the U.S.
dollar at one point following the East Japan Earthquake, it ended March 2011 at the ¥83 level. Against the euro,
the yen appreciated as the Greek sovereign debt crisis worsened and concerns surfaced over the euro currency
system and European economies. The yen then depreciated over January–March 2011 reflecting expectations ofinterest rates being raised on inflationary concerns, moving from around ¥110 against the euro in January 2011 toaround ¥117 at the end of March 2011.
29

Overseas
The economies of the leading industrialized nations have been continuing to recover, but whereas in the
U.S. additional monetary easing provided ongoing economic support, in Europe concerns have surfaced ofinflation triggered by rising commodity prices, while fears have emerged of sovereign debt problems as a side
effect of economic stimulus measures. In international commodity markets, too, prices have continued to rise
supported by U.S. monetary easing and expectations of strong, sustained recoveries in emerging economies. In
emerging economies, meanwhile, growing numbers of countries have been implementing monetary tightening
prompted by inflationary concerns, while in China curbing rises in real estate prices and prices generally has
become an issue as aggressive fiscal policy measures are maintained.
U.S. real GDP contracted by 2.6% year-on-year in 2009 then recovered to expand by 2.9% in 2010.
Corporate earnings improved, underpinned by buoyant emerging-market economies and policy support measures,with increasingly buoyant corporate activity providing a following wind for recovery. Monetary policy tools
continued to underpin the economy owing to delayed recovery in real estate markets and employment conditions.
The Federal Reserve Board (“FRB”) sought to shift gradually to a neutral policy stance, but found itself
having again to take easing measures to provide further support. The FRB held the federal funds rate target at
0–0.25%, effectively maintaining a zero interest rate policy. Faced with widening concerns that European
sovereign debts could derail financial markets and that this could adversely affect the real economy throughweakness in real estate markets and a delayed recovery in the employment environment, the FRB strengthened its
quantitative easing from November 2010, increasing the supply of funds through purchases of U.S. Treasuries inthe bond market. The U.S. stock market declined in tandem with the spread of Europe’s sovereign debt problems,
but then saw a clear rise as the FRB stepped up its monetary easing. The Dow Jones Industrial Average stood at$10,856.63 at the end of March 2010 but rallied to $12,319.73 at the end of March 2011. The yield on 10-year
U.S. Treasuries was at the 3.9% level in March 2010, fell to around 2.4% in October 2010 as the stock market
declined and in expectation of FRB policy measures, then rose to around 3.5% in March 2011 amid the stock
market rally and spreading concerns over a widening fiscal deficit.
European economies saw a mixed environment, with concerns over economic recovery, sovereign debt
problems, and inflation. In the Eurozone, real GDP expanded 1.8% year-on-year in 2010 after contracting 4.1%
in 2009. The European Central Bank (“ECB”)’s monetary easing aided export recovery via depreciation of theeuro, and fiscal stimulus measures by various countries’ governments contributed to gradual economic recovery.
Concerns over sovereign debt problems as a side effect of fiscal stimulus disrupted financial markets, and werehighlighted as having an adverse economic impact. Concerns over inflation also grew amid rising crude oil
prices, and the view gained ground that the ECB would raise its policy rate. Stock prices rallied in parallel withadvances in U.S. stock markets, with the benchmark German stock index (“DAX”) rising approximately 14%
during the fiscal year ended March 31, 2011.
Asia ex-Japan economies also saw growing inflationary concerns as recovery continued. Real GDP growthin China in 2010 was 10.3%, versus 8.7% in 2009. Domestic demand continues to expand centering on
investment, sustaining a strong recovery, but with consumer prices rising faster than the Chinese government’s
target, monetary policy has been tightened in phases along with measures to restrain increases in real estate
prices. The key question is whether the government can follow a path of sustainable economic management that
achieves a balance between economic growth and inflation curbs.
Executive Summary
In the beginning of the fiscal year ended March 31, 2011, emerging countries drove economic activity inJapan and throughout the world. In April 2010, the TOPIX hit 998 points, the highest level of the period, while
the S&P500 Index topped 1,200 points. In May 2010, bond markets became unstable in the face of sovereign
debt problems in Greece and other countries in Europe. This resulted in a significant decline in liquidity, creating30

an adverse business environment. In the second half of the year, the market settled down and client-flowbusinesses recovered. In the U.S., the FRB continued its quantitative easing measures and otherwise tried to spurthe economy in response to the delay in recovery of the employment situation and continued weakness in the
housing market. The economy responded by showing signs of recovery, which helped the S&P500 Index
rebound from a low of 1,022 points in July 2010 to 1,325 points at the end of March 2011. During this time,
China and other emerging countries continued to enjoy strong economic growth on the back of robust domestic
demand and enhanced economic partnerships within Asia. A few countries, including India and China, shifted toa monetary tightening policy upon sensing some economic overheating. Meanwhile, sovereign debt problems
continued to be a cause of concern in certain European countries. The East Japan Earthquake in March 2011
negatively impacted business sentiment in Japan. The TOPIX temporarily dropped below 800 points, but
subsequently rebounded to the end of the fiscal year at 869 points. The yen-dollar exchange rate also fell to a
post-war high in the ¥76 range at one point, but then closed the fiscal year in the ¥83 range. Concerning financial
regulations, the outline for Basel III (new capital requirement regulations for financial institutions) has become
clearer as regulations on and oversight of financial institutions is becoming more stringent. Going forward, wemust continue to carefully address related developments. Amid this environment, in line with our client-focusedbusiness strategy, the Retail division promoted consulting services and diversified its product offering, while theAsset Management division made efforts to expand assets under management and enhance investment
performance, both in Japan and overseas. In the Wholesale division, created in April 2010, collaboration between
businesses was bolstered, while initiatives were undertaken to increase revenues from client-flow businesses aswell as to diversify the products and solutions offered. Investments aimed at building up the business platform,
along with initiatives to manage costs, allowed us to post an overall profit for the eighth consecutive quarter, as
well as to record profits in all three segments. We posted net revenue of ¥1,130.7 billion for the fiscal year ended
March 31, 2011, a 2% decline from the previous year. Non-interest expenses decreased 1% from the previous
year to ¥1,037.4 billion, income before income taxes was ¥93.3 billion, and net income attributable to theshareholders of Nomura was ¥28.7 billion. Consequently, ROE for the full fiscal year was 1.4%.
In Retail, net revenue for the year ended March 31, 2011 increased by 1% from the previous year to¥392.4 billion, and income before income taxes decreased by 11% from the previous year to ¥101.2 billion. We
continued to focus on providing clients consulting services to accommodate client needs. Consulting services
resulted in balanced business growth, centered on equities, bonds, investment trusts and insurance products.
There was a ¥3.9 trillion net inflow in retail client assets during the fiscal year. Due to the impact of the East
Japan Earthquake on the stock market, total retail client assets dropped to ¥70.6 trillion at the end of the fiscal
year, from ¥73.5 trillion at the end of the previous fiscal year. However, the number of client accounts increased
by 50,000 to the end of the fiscal year at 4.94 million accounts, indicating steady growth in the business base.
In Asset Management, net revenue for the year ended March 31, 2011 increased by 15% from the previous
year to ¥80.7 billion, due primarily to growth of assets under management. Non-interest expenses increased by
8% from the previous year to ¥55.7 billion and income before income taxes increased by 35% from previous yearto ¥25.1 billion. Asset under management increased by ¥1.3 trillion from the end of March 2010 to ¥24.7 trillion
at the end of March 2011. In the investment trust business, we saw an inflow of money, particularly from multicurrency funds. In the investment advisory business, there was an increase in mandates mainly from overseas
clients.
In Wholesale, net revenue for the year ended March 31, 2011 decreased by 20% from the previous year to¥630.5 billion. Our performance was most challenged in the first quarter, due primarily to the financial market
turmoil related to Greece and the European sovereign crisis. As we shifted our strategy, our performancestabilized and improved from the second quarter to the fourth quarter, demonstrating good business momentum.
Non-interest expenses increased by 2% to ¥623.8 billion, mostly as a result of international business expansion in
the first half of the fiscal year. As a result, income before income taxes was ¥6.7 billion. The formal
establishment of the Wholesale Division from April 2010 led to closer collaboration between business lines andas a result, we executed a number of cross-divisional transactions between Global Markets and Investment
Banking.
31

Results of Operations
Overview
The following table provides selected consolidated statements of operations information for the years
indicated.
2009

Non-interest revenues:
Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 306,803
Fees from investment banking . . . . . . . . . . . . . .
54,953
Asset management and portfolio service fees . .
140,166
Net gain (loss) on trading . . . . . . . . . . . . . . . . . .
(128,339)
Gain (loss) on private equity investments . . . . .
(54,791)
Gain (loss) on investments in equity
securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(25,500)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39,863

Year Ended March 31
2010
2011
(in millions, except percentages)¥ 395,083
121,254
132,249
417,424
11,906¥ 405,463
107,005
143,939
336,503
19,292$ 4,899
1,293
1,739
4,066
233

6,042
37,483(16,677)
43,864(202)
531

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

333,155(20,528)

1,121,441
29,381

1,039,389
91,30912,559
1,103

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

312,627
1,092,892

1,150,822
1,045,575

1,130,698
1,037,443

13,662
12,535

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

(780,265)(70,854)

105,247
37,161

93,25561,3301,127741

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Net income (loss) attributable tononcontrolling interests . . . . . . . . . . . . . . . . . . . . .

¥ (709,411)

Net income (loss) attributable to NHI
shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(1,219)¥ (708,192)

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

(40.2)%

68,086¥288¥

67,798
3.7%

31,925$

3,264¥

28,661

386
40

$

346

1.4%

Net revenue decreased by 2% from ¥1,150,822 million for the year ended March 31, 2010 to ¥1,130,698
million for the year ended March 31, 2011. Commissions increased by 3%, due primarily to an increase incommissions for the distribution of investment trusts. As there were a number of large equity finance transactions
with Japanese clients in the previous year compared with this year, fees from investment banking decreased by
12% for the year ended March 31, 2011. Asset management and portfolio service fees increased by 9%, due
primarily to an increase in assets under management mainly driven by continuing cash inflows. Net gain on
trading fell to ¥336,503 million for the year ended March 31, 2011, due primarily to a decrease in equity trading.
Gain on private equity investments was ¥19,292 million for the year ended March 31, 2011 due primarily torealized gains on disposal of certain investments and unrealized gains on equity securities of certain investee
companies.
Net revenue increased by 268% from ¥312,627 million for the year ended March 31, 2009 to¥1,150,822 million for the year ended March 31, 2010. Commissions increased by 29%, due primarily to anincrease in commissions for the distribution of investment trusts, reflecting the recovery from the overall market
slump triggered by the turmoil in the global financial markets. Fees from investment banking increased by 121%,
due primarily to an increase in transaction volume in equity finance for Japanese companies. Net gain on tradingwas ¥417,424 million for the year ended March 31, 2010, due primarily to the recovery from the turmoil in the
global financial markets. Gain on private equity investments was ¥11,906 million for the year ended March 31,
2010 due primarily to realized and unrealized gains on equity securities of certain investee companies.
32

Net interest revenue was negative ¥20,528 million for the year ended March 31, 2009, ¥29,381 million forthe year ended March 31, 2010 and ¥91,309 million for the year ended March 31, 2011. Net interest revenue is afunction of the level and mix of total assets and liabilities, which includes trading assets and financing andlending transactions, and the level, term structure and volatility of interest rates. Net interest revenue is an
integral component of trading activity. In assessing the profitability of our overall business and of our Global
Markets business in particular, we view net interest revenue and non-interest revenues in aggregate. For the year
ended March 31, 2011, interest revenue increased by 47% due mainly to expansion of securitized product tradingin our U.S. region and interest expense increased 24% due mainly to an increase in repo transaction. As a result,net interest revenue for the year ended March 31, 2011 increased by ¥61,928 million from the year ended March
31, 2010. For the year ended March 31, 2010, interest revenue and interest expense decreased 29% and 41%,
respectively, due primarily to decline of short-term interest rates of repurchase and reverse repurchasetransactions. As a result, net interest revenue for the year ended March 31, 2010 increased by ¥49,909 million
from the year ended March 31, 2009.
In our consolidated statements of operations, we include gains and losses on investments in equity securities
within revenue. We recorded gains and losses on such investments in the amount of negative ¥25,500 million forthe year ended March 31, 2009, ¥6,042 million for the year ended March 31, 2010 and negative ¥16,677 million
for the year ended March 31, 2011. This line item includes both realized and unrealized gains and losses oninvestments 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.
Non-interest expenses decreased by 1% from ¥1,045,575 million for the year ended March 31, 2010 to¥1,037,443 million for the year ended March 31, 2011. The decrease in non-interest expenses was caused by thedecrease in other expenses by 12% from ¥142,494 million for the year ended March 31, 2010 to¥125,448 million for the year ended March 31, 2011, due to, among other factors, impairment losses against
affiliated companies were lower for the year ended March 31, 2011. The decrease in non-interest expenses wasoffset by a 7% increase in commissions and floor brokerage from ¥86,129 million for the year ended March 31,
2010 to ¥92,088 million for the year ended March 31, 2011.
Non-interest expenses decreased by 4% from ¥1,092,892 million for the year ended March 31, 2009 to¥1,045,575 million for the year ended March 31, 2010. The decrease in non-interest expenses was caused by adecrease in other expenses by 46% from ¥262,558 million for the year ended March 31, 2009 to¥142,494 million for the year ended March 31, 2010, primarily because impairment losses against affiliatedcompanies were lower for the year ended March 31, 2010. The decrease in non-interest expenses was offset by
the full-year recognition of compensation and benefits, information processing and communications, andoccupancy and depreciation related to the acquisition of Lehman in October 2008 for the year ended March 31,
2010, while such expenses were recognized for a six month period in the year ended March 31, 2009.
Loss before income taxes was ¥780,265 million for the year ended March 31, 2009, and income before
income taxes was ¥105,247 million for the year ended March 31, 2010 and ¥93,255 million for the year ended
March 31, 2011.
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 only imposes a national tax. Since April 1, 2004,
our domestic statutory tax rate has been approximately 41%. Our foreign subsidiaries are subject to the income
tax rates of the countries in which they operate, which are generally lower than those in Japan. Our effective tax
rate in any one year is therefore dependent on our geographic mix of profits and losses and also on the specifictax treatment applicable in each location.
Income tax expense for the year ended March 31, 2011 was ¥61,330 million, representing an effective tax
rate of 65.8%. The significant factor causing the difference between the effective tax rate of 65.8% and the33statutory tax rate of 41% were different tax rates applicable for foreign subsidiaries which increased the effective
tax rate by 10.8%, taxable items to be added to financial profit and non-deductible expenses which increased theeffective tax rate by 5.3% and 16.6%, respectively for the year ended March 31, 2011. The significant factor
reducing the effective tax rate was non-taxable revenue which decreased the effective tax rate by 8.4%.
Income tax expense for the year ended March 31, 2010 was ¥37,161 million, representing an effective tax
rate of 35.3%. The significant factor causing the difference between the effective tax rate of 35.3% and thestatutory tax rate of 41% was due to different tax rates applicable for foreign subsidiaries which decreased theeffective tax rate by 26.9%. Other significant factors causing the difference were taxable items to be added tofinancial profit and non-deductible expenses which increased the effective tax rate by 10.8% and 10.5%,
respectively for the year ended March 31, 2010.
Income tax benefit for the year ended March 31, 2009 was ¥70,854 million, representing an effective tax
rate of 9.1% which was significantly below the statutory tax rate of 41%. The most significant factor causing thedifference 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 theeffect of increasing the effective tax rate, this had the effect of decreasing the rate by approximately 27.6% due tolosses from continuing operations. Other significant factors included tax benefits recognized on the devaluationof investments in foreign subsidiaries which increased the effective tax rate by approximately 7.5% and also thedifferent tax rates applicable for foreign subsidiaries which decreased the effective tax rate by 9.9% for the year
ended March 31, 2009.
Net loss attributable to NHI shareholders was ¥708,192 million for the year ended March 31, 2009, and net
income attributable to NHI shareholders was ¥67,798 million for the year ended March 31, 2010 and¥28,661 million for the year ended March 31, 2011. Our return on equity was negative 40.2% for the year ended
March 31, 2009, 3.7% for the year ended March 31, 2010, and 1.4% for the year ended March 31, 2011.
Results by Business Segment
In April 2010, we established the Wholesale Division, encompassing the operations previously conductedby the Global Markets, the Investment Banking, and the Merchant Banking divisions. Also we realigned ourreportable segments to reflect how we operate and manage our business. Accordingly, our operating management
and management reporting are prepared based on the Retail, the Asset Management and the Wholesale segments.
We disclose business segment information in accordance with this structure from the first quarter commencing
on April 1, 2010. Gain (loss) on investments in equity securities, our share of equity in the earnings (losses) ofaffiliates, impairment losses on long-lived assets, corporate items and other financial adjustments are included as“Other” operating results outside of business segments in our segment information. Unrealized gain (loss) on
investments in equity securities held for operating purposes is classified as reconciling items outside of oursegment information. The following segment information should be read in conjunction with Item 4.B “Business
Overview” of this annual report and Note 21 “Segment and geographic information” to our consolidated financial
statements included in this annual report. The reconciliation of our segment results of operations andconsolidated financial statements is set forth in Note 21 “Segment and geographic information”.
RetailIn Retail, we receive commissions and fees from investment consultation services which we provide mainly
to individual clients 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.

34

Operating Results of Retail2009

Year Ended March 31
2010
2011
(in millions)Non-interest revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net interest revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥287,750
4,107¥384,816
3,456¥389,404
3,029$4,70537

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

291,857
273,620

388,272
274,915

392,433
291,245

4,742
3,519

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

¥ 18,237¥113,357¥101,188$1,223

Net revenue for the year ended March 31, 2011 was ¥392,433 million, increasing 1% from ¥388,272 million
for the year ended March 31, 2010, due primarily to increasing revenues from bond related products andcommissions for distribution of investment trusts.
Net revenue for the year ended March 31, 2010 was ¥388,272 million, increasing 33% from¥291,857 million for the year ended March 31, 2009, due primarily to increasing commissions for distribution of
investment trusts.
Non-interest expenses for the year ended March 31, 2011 were ¥291,245 million, increasing 6% from¥274,915 million for the year ended March 31, 2010, due primarily to an increase in compensation and benefits.
Non-interest expenses for the year ended March 31, 2010 were ¥274,915 million, at a consistent level with
¥273,620 million for the year ended March 31, 2009.
Income before income taxes was ¥18,237 million for the year ended March 31, 2009, ¥113,357 million forthe year ended March 31, 2010, and ¥101,188 million for the year ended March 31, 2011.

35

The graph below shows the revenue composition by instrument in terms of Retail non-interest revenues forthe years ended March 31, 2009, 2010, and 2011.
3%

1%

1%

12%

13%

46%

46%

26%

22%

15%

18%

2010

2011

100%
17%
80%

30%
60%

40%

26%

20%
24%
0%
2009
Bonds

Equities

Investment trusts

Asset Management

Variable annuity insurance

As described above, revenue composition of investment trusts and asset management was 59% for the year
ended March 31, 2011, at a consistent level with the previous year. Revenue composition of equities decreased
from 26% for the year ended March 31, 2010 to 22% for the year ended March 31, 2011. Revenue compositionof bonds increased from 15% for the year ended March 31, 2010 to 18% for the year ended March 31, 2011, due
primarily to an increase in revenue reflecting the increase in the sales of bonds. Revenue composition of variableannuity insurance unchanged from the previous year at 1%.

36

Retail Client Assets
The following graph shows amounts and details regarding the composition of retail client assets at
March 31, 2009, 2010, and 2011. Retail client assets consist of clients’ assets held in our custody and assets
relating to variable annuity insurance products.
Retail Client Assets(trillion yen)
80.0
2.2
70.0

1.6

2.3

4.0

1.5

4.1
60.0

7.3
1.9

8.3

1.4

4.0
50.0

5.0

19.1
18.6

40.0

18.5

30.0

20.0

39.2

35.8

28.6
10.0

0.0
3/31/2009

3/31/2010

3/31/2011

Equities

Bonds

Stock investment trusts

Bond investment trusts

Overseas mutual funds

Other

Retail client assets decreased from ¥73.5 trillion as of March 31, 2010 to ¥70.6 trillion as of March 31,
2011, due to the impact of the East Japan Earthquake on the stock market. The balance of our clients’ investment
trusts increased by 8% from ¥12.9 trillion as of March 31, 2010 to ¥13.9 trillion as of March 31, 2011, reflecting
net cash inflows by clients of ¥1.4 trillion and market depreciation of ¥0.4 trillion.
Retail client assets increased by ¥14.2 trillion from ¥59.3 trillion as of March 31, 2009 to ¥73.5 trillion as ofMarch 31, 2010, due primarily to market appreciation of equity securities. The balance of our clients’ investment
trusts increased by 25% from ¥10.4 trillion as of March 31, 2009 to ¥12.9 trillion as of March 31, 2010,reflecting net cash inflows by clients of ¥0.8 trillion and market appreciation of ¥1.7 trillion.
Asset Management
We earn portfolio management fees through the development and management of investment trusts, which
are distributed by NSC, other brokers, banks, Japan Post Bank Co., Ltd. and Japan Post Network Co., Ltd. We
also provide investment advisory services for pension funds and other institutional clients. Net revenues basicallyconsist of asset management and portfolio services fees that are attributable to Asset Management.
37

Operating Results of Asset Management
Year Ended March 31
2010
2011
(in millions)2009

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

¥56,463
3,326¥68,280
2,085¥76,269
4,475

$922
54

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

59,78952,40970,365
51,77180,74455,691

976
673

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

¥ 7,380¥18,594¥25,053$303

Net revenue increased by 15% from ¥70,365 million for the year ended March 31, 2010 to ¥80,744 million
for the year ended March 31, 2011, due primarily to the increase in assets under management mainly driven bycontinuing cash inflows.
Net revenue increased by 18% from ¥59,789 million for the year ended March 31, 2009 to ¥70,365 million
for the year ended March 31, 2010, due primarily to the increase in assets under management mainly driven by
the stock market appreciation.
Non-interest expenses increased by 8% from ¥51,771 million for the year ended March 31, 2010 to¥55,691 million for the year ended March 31, 2011.
Non-interest expenses decreased by 1% from ¥52,409 million for the year ended March 31, 2009 to¥51,771 million for the year ended March 31, 2010.
Income before income taxes was ¥7,380 million for the year ended March 31, 2009, ¥18,594 million for theyear ended March 31, 2010 and ¥25,053 million for the year ended March 31, 2011.
The following table sets forth assets under management of each principal Nomura entity within AssetManagement as of the dates indicated.
2009

March 312010
(in billions)2011

Nomura Asset Management Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥19,993 ¥23,292 ¥27,034
Nomura Funds Research and Technologies Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . .
1,634
1,525
2,824
Nomura Corporate Research and Asset Management Inc. . . . . . . . . . . . . . . . . . . .
1,049
1,107
1,841
Private Equity Funds Research and Investments Co., Ltd. . . . . . . . . . . . . . . . . . . .
600
578
538
Nomura Funds Research and Technologies America, Inc. . . . . . . . . . . . . . . . . . . .
216
240
196
Nomura Asset Management Deutschland KAG mbH. . . . . . . . . . . . . . . . . . . . . . .
172
220
294
Combined total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥23,663 ¥26,962 ¥32,727
Overlapping asset accounts among group companies . . . . . . . . . . . . . . . . . . . . . . .
(3,432) (3,518) (8,014)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥20,231¥23,444¥24,713

Assets under management were ¥24.7 trillion as of March 31, 2011, a ¥4.5 trillion increase from March 31,
2009, and a ¥1.3 trillion increase from March 31, 2010.
In our investment trust business, we have continuing cash inflows mainly from currency selection typefunds. In the investment advisory business, there was an increase in mandates mainly from overseas clients.
Investment trust assets included in assets under management by NAM were ¥15.9 trillion as of March 31, 2011,up ¥1.3 trillion, or 9%, from the previous year, reflecting net cash inflows by clients of ¥1.7 trillion and market
38

depreciation of ¥0.5 trillion. The balance of investment trusts such as Nomura Global High Yield Bond Fund
(Basket Currency Selection Type), Nomura US High Yield Bond Fund (Currency Selection Type) and Nomura
Japan Brand Stock Investment Fund (Currency Selection Type) increased. For the year ended March 31, 2010,
the balance of investment trusts managed by NAM were ¥14.7 trillion as of March 31, 2010, up ¥1.7 trillion, or13%, from the previous year, reflecting net cash outflows by clients of ¥0.4 trillion and market appreciation of¥2.1 trillion.
The following table shows NAM’s share, in terms of net asset value, in the Japanese asset management
market as of the dates indicated.
NAM’s share of the fund market in Japan
As of March 31
2009
2010
2011

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

22% 20% 22%
16% 15% 17%
44% 43% 43%

Wholesale
The formal establishment of the Wholesale Division from April 2010 led to closer collaboration between
business lines and as a result we executed a number of cross-divisional transactions between Global Markets andInvestment Banking.
Operating Results of Wholesale
2009

Year Ended March 31
2010
2011
(in millions)Non-interest revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥(146,522) ¥763,567 ¥534,094 $6,454
Net interest revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(17,108)
25,96496,442
1,165
Net revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(163,630)
553,695

789,531614,349

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

¥(717,325) ¥175,182

630,536
623,819

7,619
7,538

¥

$

6,717

81

Net revenue decreased by 20% from ¥789,531 million for the year ended March 31, 2010 to¥630,536 million for the year ended March 31, 2011, due primarily to the financial market turmoil related to
Greece and the European sovereign crisis.
Non-interest expenses increased by 2% from ¥614,349 million for the year ended March 31, 2010 to¥623,819 million for the year ended March 31, 2011 as a result of international business expansion in the firsthalf of the fiscal year, while controlling compensation and benefits based on performance.
Loss before income taxes was ¥717,325 million for the year ended March 31, 2009 and income before
income taxes was ¥175,182 million for the year ended March 31, 2010 and ¥6,717 million for the year ended
March 31, 2011.
Global Markets
We have a proven track record in sales and trading of bonds, stocks, and foreign exchange, as well asderivatives based on these financial instruments, mainly to domestic and overseas institutional investors. In
response to the increasingly diverse and complex needs of our clients, we are building up our trading and productorigination capabilities to offer superior products not only to domestic and overseas institutional investors but
39also to the Retail and the Asset Management. This cross-divisional approach also extends to the Investment
Banking, where close collaboration leads to high value-added solutions for our clients.
We continue to develop extensive ties with institutional investors in Japan and international markets;
wealthy and affluent investors, public-sector agencies, and regional financial institutions in Japan; andgovernment agencies, financial institutions, and corporations around the world. These ties enable us to identify
the types of products of interest to investors and then to develop and deliver products that meet their needs.
2009Year Ended March 31
2010
2011
(in millions)

Net revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥(157,254) ¥658,441
Non-interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
417,387
486,433¥518,788
499,300$6,268
6,033

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

¥ 19,488$ 235¥(574,641) ¥172,008

Net revenue decreased from ¥658,441 million for the year ended March 31, 2010 to ¥518,788 million forthe year ended March 31, 2011. In Fixed Income, net revenue decreased from ¥308.0 billion for the year ended
March 31, 2010 to ¥259.8 billion for the year ended March 31, 2011. In Equities, net revenue decreased from¥352.8 billion for the year ended March 31, 2010 to ¥227.3 billion for the year ended March 31, 2011. Despite
the overall drop in revenues amid difficult market conditions, client revenues increased as our investments in ourclient franchise and a broader product offering continued to produce results. In Fixed Income, we successfully
diversified our revenue mix between products and regions. From a regional point of view, we saw a big jump incontribution from the Americas (in our first full year of operation), and Asia revenues also rose year on year. In
terms of products, securitized products showed the largest revenue increase with foreign exchange products also
reflecting an increase in revenue, while rates and credit performed relatively well. In Equities, we continued toround out our research and execution platforms overseas, and execution services again provided the largest
revenue contribution. We also responded effectively to client needs and provided substantial liquidity to clients
after the East Japan Earthquake, thus capturing a higher market share in Japan.
Net revenue increased from negative ¥157,254 million for the year ended March 31, 2009 to¥658,441 million for the year ended March 31, 2010. In Fixed Income, net revenue increased from negative¥217.2 billion for the year ended March 31, 2009 to ¥308.0 billion for the year ended March 31, 2010. In
Equities, net revenue increased from ¥98.9 billion for the year ended March 31, 2009 to ¥352.8 billion for theyear ended March 31, 2010. Over the past year we have seen positive results from our expanded businessplatform following the acquisition of certain Lehman Brothers operations in October 2008. In addition to growth
in client equity and fixed income trading in Japan, we also saw an increase in such businesses in both Europe andAsia. In Equities, we expanded our client franchise by enhancing services related to European and Asian equities
in addition to our existing Japanese equity-related business and by serving clients with our advanced
technologies. In Fixed Income, we became a Primary Dealer in the U.S. as we continued our platform build out
aimed at delivering world-class products and services. In Global Markets, we are working to build a regionallybalanced earnings structure with a focus on client trades.
Non-interest expenses increased by 3% from ¥486,433 million for the year ended March 31, 2010 to¥499,300 million for the year ended March 31, 2011, due primarily to increases in infrastructure cost for businessexpansion.
Non-interest expenses increased by 17% from ¥417,387 million for the year ended March 31, 2009 to¥486,433 million for the year ended March 31, 2010, due primarily to increases in commissions, floor brokerageand compensation and benefits.
Loss before income taxes was ¥574,641 million for the year ended March 31, 2009 and income before
income taxes was ¥172,008 million for the year ended March 31, 2010 and ¥19,488 million for the year ended
March 31, 2011.
40

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 deals both across andwithin regions. We develop and forge solid relationships with these clients on a long-term basis by providing
extensive resources in a seamless fashion to facilitate bespoke solutions.
2009

Investment Banking (Gross) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allocation to Other divisions . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year Ended March 31
2010
2011
(in millions)¥ 87,559 ¥196,076 ¥185,011 $2,236(24,060) (77,154) (82,623)(998)

Investment Banking (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

63,499(69,875)

118,922
12,168102,388
9,360

1,238
113

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

(6,376)
136,308

131,090
127,916

111,748
124,519

1,351
1,505

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

¥(142,684) ¥3,174¥ (12,771) $ (154)

Net revenue decreased from ¥131,090 million for the year ended March 31, 2010 to ¥111,748 million forthe year ended March 31, 2011. Net revenue of investment banking (net) decreased from ¥118,922 million forthe year ended March 31, 2010 to ¥102,388 million for the year ended March 31, 2011. Net revenue of otherdecreased from ¥12,168 million for the year ended March 31, 2010 to ¥9,360 million for the year ended
March 31, 2011. In the year ended March 31, 2011, realized gains from investments in Japan were ¥11.1 billion.
Realized losses from the Terra Firma Investments were ¥3.4 billion and unrealized gains from the Terra Firma
Investments were ¥14.6 billion. Realized and unrealized gains arose primarily on residential real estate, leisureand utilities sectors while realized losses are related to the exit of a media business.
Net revenue increased from negative ¥6,376 million for the year ended March 31, 2009 to ¥131,090 million
for the year ended March 31, 2010. Net revenue of investment banking (net) increased from ¥63,499 million forthe year ended March 31, 2009 to ¥118,922 million for the year ended March 31, 2010, due primarily toincreased transaction volume in equity finance by major Japanese financial institutions and corporations. Net
revenue of other increased from negative ¥69,875 million for the year ended March 31, 2009 to ¥12,168 million
for the year ended March 31, 2010, due primarily to realized and unrealized gains on equity securities of certain
investee companies. In the year ended March 31, 2010, unrealized gains from investments in Japan were ¥4.8
billion. Realized gains from the Terra Firma Investments were ¥0.6 billion and unrealized gains from the Terra
Firma Investments were ¥8.4 billion. Realized and unrealized gains arose from improving markets, primarily inresidential real estate, renewable energy and utilities sectors. 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 from the exit of certain retail and service industry
investments. Unrealized losses resulted from underperformance of investments in the media, aircraft leasing,waste management and renewable energy sectors.
Non-interest expenses decreased by 3% from ¥127,916 million for the year ended March 31, 2010 to¥124,519 million for the year ended March 31, 2011 as a result of our controlling compensation and benefits
based on performance.
Non-interest expenses decreased by 6% from ¥136,308 million for the year ended March 31, 2009 to¥127,916 million for the year ended March 31, 2010, due primarily to a decrease of professional fees.
41Loss before income taxes was ¥142,684 million for the year ended March 31, 2009, income before income
taxes was ¥3,174 million for the year ended March 31, 2010 and loss before income taxes was ¥12,771 million
for the year ended March 31, 2011.
Other Operating Results
Other operating results include net gain (loss) related to economic hedging transactions, realized gain (loss)
on investments in equity securities held for operating purposes, equity in earnings of affiliates, corporate items,
and other financial adjustments. Please refer to Note 21 “Segment and geographic information” to ourconsolidated financial statements included in this annual report.
Loss before income taxes in other operating results was ¥65,420 million for the year ended March 31, 2009,¥211,293 million for the year ended March 31, 2010 and ¥22,807 million for the year ended March 31, 2011.
Other operating results for the year ended March 31, 2011 include the gains from changes in the fair valueof the financial liabilities, for which the fair value option was elected, attributable to the change in ourcreditworthiness of ¥9.3 billion ($0.11 billion), the negative impact of our own creditworthiness on derivative
liabilities which resulted in gains of ¥20.5 billion ($0.25 billion) and the losses from changes in counterparty
credit spreads of ¥6.6 billion ($0.08 billion).
Summary of Regional Contribution
For a summary of our net revenue, income (loss) before income taxes and long-lived assets by geographic
region, see Note 21 “Segment and geographic information” to our consolidated financial statements included inthis annual report.
Regulatory Capital Requirements
Many of our business activities are subject to statutory capital requirements, including those of Japan, theU.S., the U.K. and certain other countries in which we operate.
Translation Exposure
A significant portion of our business is conducted in currencies other than yen—most significantly, U.S.
dollars, British pounds and Euros. 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 consolidated statements of operations unlessand until we dispose of, or liquidate, the relevant foreign subsidiary, which historically has not occurred, andwhich we do not expect to occur frequently.
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 doubtful accounts, the realization of deferred tax assets and othermatters that affect the reported amounts of assets and liabilities as well as the disclosures in these consolidated
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 possible that such adjustments could occur in the near term.
42

Fair value for financial instruments
A significant amount of our financial assets and financial liabilities are carried at fair value, with changes infair value recognized through the consolidated statements of operations on a recurring basis. Use of fair value iseither specifically required under U.S. GAAP or we make an election to use fair value for certain eligible items
under the fair value option.
Other financial assets and financial liabilities are carried at fair value on a nonrecurring basis, where theprimary measurement basis is not fair value. Fair value is only used in specific circumstances such as to measure
impairment.
In accordance with Accounting Standard Codification (“ASC”) 820 “Fair Value Measurements andDisclosures”, all financial instruments measured at fair value have been categorized into a three-level hierarchy
based on the transparency of inputs used to establish fair value.
Level 1:
Unadjusted quoted prices in active markets for identical assets or liabilities accessible by us at themeasurement date.
Level 2:
Quoted prices in inactive markets or prices containing other 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 independent market sources at themeasurement date.
Level 3:
Unobservable inputs that are significant to the fair value measurement of the financial instrument. Valuation
techniques using unobservable inputs reflect management’s assumptions about the estimates used by othermarket participants in valuing similar financial instruments. These valuation techniques are developed based on
the best available information at the measurement date.
Financial instruments are classified in their entirety based on the lowest level of input that is significant to
the fair value measurement of the instruments. A derivative valued using a combination of Level 1, 2 and3 inputs would be classified as Level 3, where the Level 3 inputs are significant in its measurement.
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, the specific financial instrument istraded in an inactive market. Common characteristics of an inactive market include a low number of transactionsof the financial instrument; stale or non-current price quotations; price quotations that vary substantially either
over time or among market makers; or little publicly released information. Unobservable parameters include
volatility risk and correlation risk for derivative instruments; refinancing periods and recovery rates for creditrelated products and loans; and macroeconomic factors affecting the value of collateral for asset-backed
securitization products.
If corroborative evidence is not available to value Level 3 financial instruments, fair value may beestablished using other equivalent products in the market. The 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 information such asconsensus pricing data among certain market participants, historical trends, extrapolation from observable market
data and other information we would expect market participants to use in valuing similar instruments.
43

Level 3 financial assets excluding derivatives as a proportion of total financial assets excluding derivatives,
carried at fair value on a recurring basis was 5% as of March 31, 2011 as listed below:

Financial assets measured at fair value(Excluding derivative assets) . . . . . . . . . . . . .
Derivative assets . . . . . . . . . . . . . . . . . . . . . . . .
Derivative liabilities . . . . . . . . . . . . . . . . . . . . .

Level 1

Level 2

Billions of yen
March 31, 2011
Counterparty
and CashCollateral
Level 3
Netting

7,715
698
757

7,509
15,664
15,903

723
557
573

—
(15,428)(15,577)

Total

15,947
1,491
1,656

The proportionof Level 3

5%

Please refer to Item 5. Financial Information, 1. Consolidated Financial Statements, Note 3. “Fair value offinancial instruments” for further information.
Private equity businessAll private equity investments made by investment company subsidiaries pursuant to the provisions of ASC
946 “Financial Services—Investment Companies” (“ASC 946”) are accounted for at fair value, with changes infair value recognized through the consolidated statement of operation.
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 is different from the carrying value. In reachingthat 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 valuations such as EV/EBITDA (Enterprise Value/EBITDA), PE Ratio (Price/Earnings
Ratio), Price/Embedded Value Ratio and other multiples based on relationships between numbers reported in thefinancial statements and the price of comparable companies. Where possible these valuations are compared withthe 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, fortrading and non-trading purposes. All derivatives are carried at fair value, with changes in fair value recognizedeither through the consolidated statements of operations or the consolidated statements of comprehensive income
depending on the purpose for which the derivatives are used.
Fair value amounts recognized for derivative instruments entered into under a legally enforceable masternetting agreement are offset in the consolidated balance sheets and fair value amounts recognized for the right toreclaim 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.

44

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, 2011
AssetsLiabilities
AssetsLiabilities

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

¥ 224
1,267

¥ 334
1,322

$ 3
15

$ 4
16

¥1,491¥1,656$18$20

Billions of yen
March 31, 2010
AssetsLiabilities

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

¥ 901
1,135

¥ 990
1,170

¥2,036¥2,160The fair value of OTC derivative assets and liabilities as of March 31, 2010 and 2011 by remaining
contractual maturity are shown below:

Less than
1 year

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

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

¥512
713

Billions of yen
March 31, 2011
Years to Maturity
1 to 3 3 to 5 5 to 7 More thanyears years years
7 years

¥598
768

¥717
612

¥575
681

¥1,424
1,369

Less than
1 yearBillions of yen
March 31, 2010
Years to Maturity
1 to 3 3 to 5 5 to 7 More thanyears years years
7 years

¥ 720
1,157

¥621 ¥727 ¥428
689
733
505

¥1,426
1,250

Cross-maturity
netting(1)Totalfair value¥(2,559)(2,821)¥1,267
1,322

Cross-maturity
netting(1)Totalfair value¥(2,787)(3,164)¥1,1351,170(1) This column shows the impact of netting derivative assets with derivative liabilities for the same
counterparty across maturity band categories. Derivative assets and derivative liabilities with the same
counterparty in the same maturity category are netted within the maturity category. This column also
includes cash collateral netting with the same counterparty.
The fair value of derivative contracts includes adjustments for credit risk, both with regards to counterparty
credit risk on positions held and our own creditworthiness on positions issued.
We realize gains or losses relating to changes in credit risk on our derivative contracts together with the
movements of trading positions, which include derivatives, that are expected to mitigate the above mentioned
impact of changes in credit risk. We have various derivative contracts with exposure to credit risk including thosewith monoline insurers (financial guarantors). See “Monoline insurers (financial guarantors)” below for further
information.
45

The impact of changes in our own creditworthiness on derivative liabilities was a gain of ¥20 billion($0.25 billion) for the year ended March 31, 2011.
Goodwill
Under U.S. GAAP, goodwill must be allocated to reporting units and tested for impairment at least annually.
The assumptions used in the valuations of the reporting units include estimates of future cash flows and the costof equity used to discount those cash flows to a present value.
Goodwill impairment testing is performed at a level below the business segments.
In the global capital markets there exist uncertainties due to, but not limited to, economic and market
conditions. Deterioration in economic and market conditions may result in declines in business performance.
Such declines in business performance, or increase in the estimated cost of equity, could cause the estimated fairvalues of the reporting units or associated goodwill to decline, which could result in an impairment charge toearnings in a future period related to some portion of the associated goodwill.
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 products andleveraged finance to which we have certain exposures. We also have exposures to Special Purpose Entities(“SPEs”) and monoline insurers (financial guarantors).
Securitization Products
Our exposure to securitization products consists of commercial mortgage-backed securities (“CMBS”),
residential mortgage-backed securities (“RMBS”), commercial real estate-backed securities and othersecuritization products. 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 the underlying collateral as of March 31, 2011.
Japan

Asia

March 31, 2011
EuropeAmericas(in millions)

Commercial mortgage-backed securities(2) . . . . . . . . . . . . . .
Residential mortgage-backed securities(3) . . . . . . . . . . . . . . .
Commercial real estate-backed securities . . . . . . . . . . . . . . .
Other securitization products(4) . . . . . . . . . . . . . . . . . . . . . . .

¥ 11,437
12,41927,66588,507¥———315¥13,474
20,854—
7,180¥ 82,438
329,479—
92,011¥107,349
362,752
27,665
188,013

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

¥140,028¥315¥41,508¥503,928¥685,779

Total(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 ASC 860, “Transfers andServicing” (“ASC 860”), and in which we have no continuing economic exposures.
(2) We have ¥26,753 million exposure, as whole loans and commitments, to U.S. CMBS-related business as ofMarch 31, 2011.
(3) The RMBS balance for Americas excludes mortgage pass-through securities and U.S. government
guaranteed collateralized mortgage obligations (CMO) because their credit risks are considered minimal.
(4) Other securitization products mainly include collateralized loan obligations (CLO), collateralized debt
obligations (CDO) and asset-backed securities (ABS) (eg. credit card loans, auto loans, student loans and etc.)

46

The following table provides our exposure to CMBS by geographical region and the external credit ratingsof the underlying collateral as of March 31, 2011.
March 31, 2011
(in millions)
BBB
BB

AAA

AA

A

Japan . . . . . . . . . . . . .
Europe . . . . . . . . . . .
Americas . . . . . . . . . .

¥ 5,332
1,165
12,270¥1,610
680
1,411

¥

—
3,366
16,469

¥

580
2,173
18,861

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

¥18,767¥3,701¥19,835¥21,614B

Not rated

GSE(1)

Total¥ 1,271
1,484
12,356

¥ —
2,967
4,775

¥ 2,644
1,639
16,256¥——40¥ 11,437
13,47482,438¥15,111¥7,742¥20,539¥ 40¥107,349(1) GSE (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, 2011.
Monoline Insurers (financial guarantors)
The following table sets forth our notional amounts, gross exposure, counterparty risk reserves and otheradjustments, net exposure, and credit default swap (“CDS”) protection to monoline insurers (financial
guarantors) by credit rating in structured credit trading business of Global Markets in Europe. The table does notinclude fully reserved or hedged exposures.
March 31, 2011
Counterparty
Risk Reserves
and OtherNet
Adjustments
Exposure(in millions)Monoline Insurers by Credit Rating(1)Notional(2)GrossExposure(3)CDS
Protection(4)(5)

Non-investment grade . . . . . . . . . . . . . . . . . . . . .

$5,192$1,116

$850

$266

$167

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

$5,192$1,116

$850

$266

$167

(1) Rating based on the lower of either Standard & Poor’s or Moody’s Investors Service as of March 31, 2011.
Unrated monoline exposures are included in non-investment grade.
(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 Counterparty Risk Reserves and Other
Adjustments.
(4) Notional of CDS protection less estimated fair value of CDS protection acquired against the monoline
insurers.
(5) Other than above, we also sell protection primarily to facilitate transactions for our clients referencing abasket of names including monoline insures. As of March 31, 2011, our exposure arising from such trades
was $34 million.
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.

47

The following table sets forth our exposure to leveraged finance by geographic location of the target
company as of March 31, 2011.
March 31, 2011

FundedMillions of yen
Unfunded

Total

Translation into
millions of
U.S. dollars
Total

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 3,276
62,208
—

¥ —
6,008
1,220

¥ 3,276
68,216
1,220

$ 40
824
15

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

¥65,484¥7,228¥72,712$879

Special Purpose Entities
Our involvement with these entities includes structuring, underwriting, as well as, subject to prevailingmarket conditions, distributing and selling debt instruments and beneficial interests issued by these entities. In
the normal course of securitization and equity derivative activities business, we also act as a transferor of
financial assets to, and underwriter, distributor and seller of repackaged financial instruments issued by these
entities. We retain, purchase and sell variable interests in SPEs in connection with our market-making, investingand structuring activities. Our other types of involvement with SPEs include guarantee agreements and derivative
contracts.
For further discussion on Nomura’s involvement with Variable Interest Entities (“VIEs”), see Note 8,“Securitization and Variable Interest Entities ” in our consolidated financial statements.
Accounting Developments
See Note 1, “Summary of accounting policies: New accounting pronouncements adopted during the current
year”, in our consolidated financial statements included in this annual report.
Private Equity BusinessWe make private equity investments primarily in Japan and Europe.
Private equity investments made by certain entities which we consolidate under either a voting interest or
variable interest model which are investment companies pursuant to the provisions of ASC 946 (“investmentcompany subsidiaries”) are accounted for at fair value, with changes in fair value recognized through theconsolidated statements of operations. 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 us. In accordance with our investment policies, non-investmentcompanies within the group may not make investments in entities engaged in non-core businesses if suchinvestments would result in consolidation or application of the equity method of accounting. Such investments
may generally only be made by investment company subsidiaries. Non-core businesses are defined as thoseengaged in activities other than our business segments.
We also have a subsidiary which is not an investment company but which makes investments in entities
engaged in our core businesses. These investments are made for capital appreciation or current income purposesor both and are also carried at fair value, either because fair value is carried by election of the fair value option orother U.S. GAAP requirements.
48

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 2000, NPF has made investments in 21 entities and exited from 19 of theseinvestments. The fair value of its investment portfolio is ¥104,962 million and ¥77,793 million ($940 million) as
of March 31, 2010 and 2011, respectively.
NPF is an investment company subsidiary pursuant to the provisions of ASC 946 and therefore carries all of
its investments at fair value, with changes in fair value recognized through the consolidated statements ofoperations.
We also make private equity investments through another wholly-owned subsidiary, Nomura Financial
Partners Co., Ltd. (“NFP”). NFP is not an investment company subsidiary as it invests in the entities engaged inour core business. We elected the fair value option to account for its 45.5% investment in the common stock ofAshikaga Holdings.
Private equity business in Europe
In Europe, our 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 for 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, the general partner of TFCP I, which is independent of us, assumed the management and control ofthese 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
those investments at fair value in accordance with ASC 946.
The Terra Firma Investments are held by entities which are investment company subsidiaries and therefore
we continue to account for these investments at fair value, with changes in fair value recognized through theconsolidated statements of operations.
The fair value of the Terra Firma Investments was ¥98,683 million and ¥100,395 million ($1,213 million) as
of March 31, 2010 and 2011, respectively.
Other Terra Firma Funds
In addition to the Terra Firma Investments, we are a 10% investor in a ¥228 billion ($2.76 billion) private
equity fund (“TFCP II”) and a 2% investor in a ¥608 billion ($7.34 billion) private equity fund (“TFCP III”), also
raised and managed by Terra Firma Capital Partners Limited.
Our total commitment for TFCP II was originally ¥22,802 million ($276 million) and reduced to¥4,351 million ($53 million) as a result of adjustments for recyclable distributions. As of March 31, 2011,¥4,172 million ($50 million) had been drawn down for investments.
49

For TFCP III, our total commitment is ¥11,510 million ($139 million) and ¥8,194 million ($99 million) had
been drawn down for investments as of March 31, 2011.
The investments in TFCP II and TFCP III are carried at fair value, with changes in fair value recognizedthrough the consolidated statements of operations.
Other Investments
We also make private equity investments in Europe through wholly-owned subsidiaries and otherconsolidated entities which have third party pooling of funds. Certain of these entities are investment company
subsidiaries and therefore all of their investments are carried at fair value, with changes in fair value recognizedthrough the consolidated statements of operations.
B. Liquidity and Capital Resources.
Liquidity
Overview
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 withminimal 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.
Liquidity risk management policy is based on liquidity risk appetite which the Group Integrated Risk
Management Committee formulates upon delegation by the Executive Management Board (“EMB”). Our
primary objective for liquidity risk management is to ensure continuous liquidity across market cycles andperiods of market 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 assets.
We have in place a number of Liquidity Risk Management frameworks that enable us to achieve ourprimary liquidity objective. These frameworks include (1) Centralized Control of Residual Cash; (2) Appropriate
Funding and Diversification of Funding Sources and Maturities Commensurate with the Composition of Assets;(3) Management of Credit Lines to Nomura Group Entities; (4) Implementation of Liquidity Stress Tests; (5)Contingency Funding Plan (“CFP”).
Our EMB has the authority to make decisions concerning the group liquidity management. The Chief
Financial Officer (“CFO”) has the operational authority and responsibility over our liquidity management basedon decisions made by the EMB.
1. Centralized Control of Residual Cash. We control centrally residual cash held at Nomura Group entities
for effective utilization purposes. As for the usage of funds, we manage the overall level of unsecured funding
and set internal limits on the additional amount of unsecured funding available across Nomura Group. The limit
for unsecured funding is set by the EMB and monitored closely by Global Treasury.
In order to enable us to transfer funds smoothly among the group entities, we limit issuance of securities byregulated broker-dealers or banking entities. We actively seek to concentrate issuance of all long-term unsecured,
non-deposit funding instruments at either Nomura 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 Nomura Group.
2. Appropriate Funding and Diversification of Funding Sources and Maturities Commensurate with theComposition of Assets. We seek to maintain a surplus of long term debt and equity above the cash capital50

requirements of our assets. This enables us 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 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.
Collateral requirements to support potential increased intraday collateral requirements from ourclearers and settlement agents arising as a result of a two-notch downgrade in our credit rating.
In addition, other unencumbered assets held at exchanges for chaining requirements are also fundedwith 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 takes into account legal, regulatory and tax restrictions that may impact the ability tofreely transfer of liquidity across the entities within the group.
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 plain vanilla instruments greater than or equal to three years. The average maturity (for debt
securities and borrowings with maturities longer than one year) was 4.32 years as of March 31, 2011.
Approximately 80% of our medium-term notes are structured and linked to interest or equity, indices, currencies
or commodities. Conditions for calls by indices are individually set. These maturities are evaluated based on ourinternal model and monitored by Global Treasury. Maturities for plain vanilla debt securities and borrowings areevaluated based on contractual maturities. Where there is a possibility that notes may be called prior to theirscheduled maturity date, maturities are based on our internal stress option adjusted model. This model values theembedded optionality under stress market conditions in order to determine when the note is likely to be called.

51

On this basis, the average maturity of structured notes (notes with maturities longer than one year) was
10.92 years as of March 31, 2011. The average maturity of our entire long term debt portfolio, including plain
vanilla debt securities and borrowings, was 7.03 years as of March 31, 2011. The graph below shows the
distribution of maturities of our outstanding long-term debt securities and borrowings.
Long-Term debt maturities profile
As of March 31, 2011

JPY in Billion

3,000.02,500.0
2,000.0
1,500.0
1,000.0
500.0

Later than Apr 2016

Jan-Mar 2016

Oct-Dec 2015

Jul-Sep 2015

Apr-Jun 2015

Jan-Mar 2015

Oct-Dec 2014

Jul-Sep 2014

Apr-Jun 2014

Jan-Mar 2014

Oct-Dec 2013

Jul-Sep 2013

Apr-Jun 2013

Jan-Mar 2013

Oct-Dec 2012

Jul-Sep 2012

Apr-Jun 2012

Jan-Mar 2012

Oct-Dec 2011

Jul-Sep 2011

Apr-Jun 2011

0.0

(1) Redemption schedule is individually estimated by considering of probability of redemption. Due to structure bias, we use probability
adjusted by a certain stress factor.

We typically fund our trading activities on a secured basis through secured borrowings and repurchaseagreements. We believe these funding activities in the secured markets are more cost-efficient and lesscredit-rating sensitive than financing in the unsecured market. Also, repurchase agreements tend to be short-term,
often overnight. We manage the liquidity risks arising from secured funding by transacting with a diverse groupof global counterparties, providing with a various range and types of securities collateral and actively seeking toterm out the tenor of certain transactions.
We seek to reduce refinancing risk through diversification of our funding sources. We diversify funding byproduct, investor and market in order to reduce our reliance on any one funding source. We benefit bydistributing a significant portion of our debt through our retail and institutional sales 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
increased to 28.5% of total term debt outstanding as of March 31, 2011 from 22.0% as of March 31, 2010.

52

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 3120102011
(in billions, except percentages)

Short-Term Unsecured Debt Total(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-Term Bank Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial Paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deposit at Banking Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certificates of Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bonds and Notes maturing within one year . . . . . . . . . . . . . . . . . . .
Long-Term Unsecured Debt Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-Term Deposit at Banking Entities . . . . . . . . . . . . . . . . . . . . . .
Long-Term Bank Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bonds and Notes(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NHI Shareholders’ Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2,153.5
704.2
128.6
484.6
354.9
64.4
416.8
6,024.6
29.3
1,995.8
162.8
3,836.7
2,126.9

20.9%

58.5%

20.6%

¥2,634.3
884.3
84.8
379.5
573.1
184.0
528.6
6,466.9
55.5
1,999.6
188.8
4,223.0
2,082.8

23.6%

57.8%

18.6%

(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 (VIEs) under ASC 810, “Consolidation” and secured financing transactions recognizedwithin long-term borrowings as a result of transfers of financial assets that are accounted for as financings
rather than sales in accordance with ASC 860.
In terms of funding, Nomura Holdings, Inc., NSC, Nomura Europe Finance N.V. and Nomura BankInternational plc are main entities for external borrowings, issuances and others. Having raised the funds tomatch the currencies and liquidities of assets, we pursue to optimize our funding structures.
For this fiscal year ended March 31, 2011, we issued ¥180 billion senior unsecured bonds in the domestic
market and $1.25 billion in the U.S. market in January 2011. In addition, in November and December 2010, we also
issued ¥153.2 billion subordinated unsecured bonds in the domestic market. Nomura Europe Finance N.V. issued$760 million senior unsecured bonds and AUD 1,707 million in the domestic market in September 2010 and March
2011.
3. Management of Credit Lines to Nomura Group entities. We maintain committed facility agreementswith financial institutions for Nomura Group entities in order to provide contingent financing sources. Total ofunused committed facilities was ¥124.4 billion as of March 31, 2011. 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 on them. We occasionally test the effectiveness of our drawdown procedures.
4. Implementation of Liquidity Stress Tests. We maintain our liquidity portfolio and monitor our
sufficiency of liquidity based on an internal model which simulates changes in cash outflow under specified
stress scenarios to comply with our above mentioned liquidity management policy.
We assess the firm’s liquidity requirements under various stress scenarios with differing levels of severity
over multiple time horizons. We evaluate these requirements under company-specific and broad market wide
events, including potential credit rating downgrades at the parent company and subsidiary levels that may impact53

us by loss of access to unsecured capital markets, additional collateral posting requirements, limited or no accessto secured funding markets and other events. We call this risk analysis our “Maximum Cumulative Outflow”
framework.
To ensure a readily available source for a potential liquidity requirement, we maintain a liquidity portfolio
in the form of cash and highly liquid, unencumbered securities that may be sold or pledged to provide liquidity.
As of March 31, 2011, our liquidity portfolio was ¥5,819.1 billion which generated a liquidity surplus taking into
account a stress scenario as defined in our liquidity risk policy. We recognize that the liquidity standards forfinancial institutions continue to be the subject of further discussion among the relevant supervisory bodies
including the Basel Committee. The existing model and simulations upon which we currently rely may need tobe reviewed depending on any new development in this area. Our liquidity portfolio is composed of following
highly liquid products.
March 3120102011
(in billions)

Liquidity Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥5,149.9 ¥5,819.1
Cash, Cash Equivalent and Time Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,217.5
1,959.7
Overnight Call Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23.6
8.3
Government Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,908.8
3,851.1
In addition to the liquidity portfolio, we have ¥1,806.9 billion of other unencumbered assets comprising
mainly unpledged trading assets that can be used as an additional source of secured funding. The aggregate valueof our liquidity portfolios and other unencumbered assets as of March 31, 2011 was ¥7,626.0 billion—thisrepresented 289.5% of our total unsecured debt maturing within one year.
March 3120102011
(in billions)

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

¥1,249.9
5,149.9¥1,806.9
5,819.1

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

¥6,399.8¥7,626.0

In the stress test, we assume the cash outflow as shown below and also consider the assumption that incertain instances, legal and regulatory requirements can restrict the flow of funds between entities in ourconsolidated group, and funds or securities may not freely move among us.
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(iv) Fluctuation of funding needs under normal business circumstances(v) Cash and collateral outflows in a stress event.
We constantly evaluate and modify our liquidity risk assumptions based on regulatory and market changes.
The model we use in order to simulate the impact of stress scenarios assumes no liquidation of assets, no ability
to issue additional unsecured funding, a widening of haircuts on outstanding repo funding, collateralization ofclearing banks and depositories, drawdowns on loan commitments and loss of liquidity from market losses oninventory.
54

5. Contingency Funding Plan (“CFP”). We have developed a detailed contingency funding plan tointegrate liquidity risk control into our comprehensive risk management strategy and to enhance the quantitative
aspects of our liquidity risk control procedures. As a part of the CFP, we have developed an approach foranalyzing and specifying the extent of any liquidity crisis. This allows us to estimate the likely impact of both a
Nomura-specific and market-wide crises; and specifies the immediate action to be taken to mitigate any risk. The
CFP lists details of key internal and external parties to be contacted and the processes by which information is tobe disseminated. This has been developed 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 thesubsidiary level due to regulatory, legal or tax constraints. We periodically test the effectiveness of our fundingplans for different Nomura-specific and market-wide events. We also have access to operations at central banks
such as the Bank of Japan and the 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 tool in mitigating
contingent risk from market disruptions.
Cash Flow
Cash and cash equivalents as of March 31, 2011, increased by ¥599.7 billion compared with March 31,
2010. Cash flows from operating activities for the year ended March 31, 2011 were outflows of ¥235.1 billion
due to the increase in Trading assets. Cash flows from investing activities for the year ended March 31, 2011were outflows of ¥423.2 billion due mainly to an increase in Non-trading debt securities, net. Cash flows fromfinancing activities for the year ended March 31, 2011 were inflows of ¥1,284.2 billion due primarily to anincrease in Long-term borrowings.
Balance Sheet and Financial Leverage
Total assets as of March 31, 2011, were ¥36,693.0 billion, an increase of ¥4,462.6 billion compared with
¥32,230.4 billion as of March 31, 2010, reflecting increases in Securities purchased under agreements to resell,
Cash and cash equivalents and Trading assets. Total liabilities as of March 31, 2011, were ¥34,601.4 billion, an
increase of ¥4,504.0 billion compared with ¥30,097.4 billion as of March 31, 2010, reflecting increases in
Securities sold under agreements to repurchase and Long-term borrowings. NHI shareholders’ equity as ofMarch 31, 2011, was ¥2,082.8 billion, a decrease of ¥44.1 billion compared with ¥2,126.9 billion as of March 31,
2010, due to increases in Common stock held in treasury and Accumulated other comprehensive loss.
We seek to maintain sufficient capital at all times to withstand losses due to extreme market movements.
The EMB is responsible for implementing and enforcing capital policies. This includes the determination of ourbalance sheet size and required capital levels. We continuously review our equity capital base to ensure that it
can support the economic risk inherent in our business. There are also regulatory requirements for minimum
capital of entities that operate in regulated securities or banking businesses.
As leverage ratios are commonly used by other financial institutions similar to us, we voluntarily provide a
Leverage ratio and Adjusted leverage ratio primarily for benchmarking purposes so that users of our annual
report can compare our leverage against other financial institutions. There are currently no regulatory or statutory
reporting requirements which require us to disclose leverage ratios.
The following table sets forth NHI shareholders’ equity, total assets, adjusted assets and leverage ratios:
March 3120102011
(in billions, except ratios)

NHI Shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted assets(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leverage ratio(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted leverage ratio(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
55¥ 2,126.9
32,230.4
19,763.2
15.2x
9.3x

¥ 2,082.8
36,693.0
21,536.7
17.6x
10.3x

(1) Reconciles to the total assets amount disclosed on the face of our consolidated balance sheets and therefore
excludes the fair value of securities transferred to counterparties under repo-to-maturity and certain
Japanese securities lending transactions which are accounted for as sales rather than collateralized financing
arrangements. The fair value of securities derecognized under these agreements has not had a significant
impact on our reported Leverage and Adjusted leverage ratios as of March 2010 and 2011.
(2) Represents total assets less securities purchased under agreements to resell and securities borrowed
transactions.
(3) Equals total assets divided by NHI shareholders’ equity.
(4) Equals adjusted assets divided by NHI shareholders’ equity.
Total assets increased significantly by 13.8% reflecting primarily an increase in Securities purchased underagreements to resell. On the other hand, NHI Shareholders’ equity decreased by 2.1%. As a result, our leverage
ratio went up from 15.2 times as of March 31, 2010 to 17.6 times as of March 31, 2011.
Adjusted assets increased significantly due to an increases in Cash and cash equivalents and Trading assets.
As a result, our adjusted leverage ratio went up from 9.3 times as of March 31, 2010 to 10.3 times as ofMarch 31, 2011.
Capital Management
Capital Management Policy
We seek to enhance shareholder value and to capture growing business opportunities by maintaining
sufficient levels of capital. We review levels of capital as appropriate, taking into consideration the economic
risks inherent to operating our businesses, the regulatory requirements, and maintaining our ratings necessary tooperate businesses globally.
Dividends
Nomura believes that pursuing sustainable increase in shareholder value and paying dividends are essential
to generating returns to our shareholders. Nomura will strive to pay stable dividends using a consolidated payout
ratio of 30 percent as a key indicator.
Dividend payments will be determined taking into account a comprehensive range of factors such as thetightening of Basel regulations and other changes to the regulatory environment, as well as the company’s
consolidated financial performance.
Nomura paid dividend of ¥4.0 per share for the first half and dividend of ¥4.0 per share for the second halfin line with its dividend policy for the fiscal year ended March 31, 2011.
With respect to the retained earnings, in order to implement measures to adapt to regulatory changes and toincrease shareholder value, we seek to efficiently invest in business areas where high profitability and growth
may reasonably be expected, including the development and expansion of infrastructure.
The following table sets forth the amounts of dividends per share paid by us in respect of the periods
indicated:
Fiscal year ended or ending March 31,

2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Total

—
¥8.00
8.50
8.50
—
—

¥12.00
8.00
8.50
8.50
4.00
4.00

—
¥8.00
8.50
8.50
—
—

¥36.00
20.00
8.50
—
4.00
4.00

¥48.00
44.00
34.00
25.50
8.00
8.00

56

Stock Repurchases
We consider repurchase of treasury stock as an option in our financial strategy to respond quickly tochanges in the business environment. We make announcements immediately after any decision to set up a sharebuyback program and conduct such programs in accordance with internal guidelines.
On July 30, 2010, we announced a resolution of the Board of Directors to establish a share buyback programin accordance with Article 459-1 of the Companies Act. The period of repurchase under the program was from
August 9 to September 17, 2010. As part of this program, we repurchased 75,000,000 shares from August 9,
2010 to August 31, 2010 and the aggregate amount paid was ¥37,361,694,700.
Preferred Stock
Effective June 28, 2011, in order to respond to Basel III capital adequacy requirements, we have amended
our Articles of Incorporation to enable issuance of each class of preferred stock with a provision for redemption
upon the occurrence of certain events. (Please see “Preferred Stock” under Item 10.B. of this annual report for
further details.) We do not have plans to issue preferred stocks as of June 29, 2011. The amendment did not resultin any change to the total number of shares authorized to be issued.
Consolidated Regulatory Requirements
As discussed in Item 4.B. (Regulatory Capital Rules), the FSA established the “Guideline for Financial
Conglomerate Supervision” (hereinafter referred to as the “Financial Conglomerate Guideline”) in June 2005 andset out the rules on consolidated regulatory capital. We started monitoring our consolidated capital adequacy
ratio in accordance with the Financial Conglomerate Guideline from April 2005.
Beginning from the end of March, 2009, we elected to calculate the consolidated capital adequacy ratio
according to the Bank Holding Companies Notice as permitted under the Financial Instruments Business
Operators Guidelines, 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 with 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. Since electing to calculate our consolidated capital adequacy ratio according to the Bank
Holding Companies Notice, we convert each risk by multiplying the amount by 12.5; therefore we examine
whether we comply by this requirement by confirming that the capital/risk-weighted asset ratio is higher than8%. As of March 31, 2011, we were in compliance with this requirement, with a ratio of total capital to riskweighted assets of 22.2%.

57

The following table presents the Company’s consolidated capital adequacy ratio as of March 31, 2010 andMarch 31, 2011:
March 3120102011
(in billions, except ratios)

Qualifying Capital
Tier 1 capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 2,000.0 ¥ 1,915.0
Tier 2 capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
560.0
651.5
Tier 3 capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
306.1
139.6
Deductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
60.2
121.8
Total qualifying capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,805.9
2,584.3
Risk-Weighted Assets
Credit risk-weighted assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,657.9
7,468.4
Market risk equivalent assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,461.2
2,442.3
Operational risk equivalent assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,406.7
1,718.8
Total risk-weighted assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,525.7
11,629.5
Consolidated Capital Adequacy Ratios
Consolidated capital adequacy ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24.3%
22.2%
Tier 1 capital ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17.3%
16.4%
Total qualifying capital is comprised of Tier 1, Tier 2 and Tier 3 capital. Our Tier 1 capital mainly consistsof NHI shareholders’ equity and noncontrolling interests less goodwill, certain intangible fixed assets.
Tier 2 and Tier 3 capital consist of subordinated debt classified to Tier 2 and Tier 3 by original maturity andother conditions set out by the Bank Holding Companies Notice.
Market risk is calculated using the Company’s VaR model as permitted under the Financial Instruments
Business Operators Guidelines. On March 31, 2011, we started calculating credit risk assets and operational risk
using foundation internal ratings-based approach and the Standardized Approach respectively, upon obtaining
approval from the FSA. Prior to that, we calculated these risks applying the Standardized Approach and the Basic
Indicator Approach respectively.
Certain risks such as investment securities are reclassified to credit risk from market risk. The decrease inmarket risk through this reclassification has resulted in limiting the Tier 3 capital to ¥139.6 billion as only certain
ratio of the market risk requirement can be counted as Tier 3.
We provide Tier 1 capital ratio and consolidated capital adequacy ratio not only to demonstrate that we arein compliance with regulatory requirements set out by the FSA but also for benchmarking purposes so that usersof our report can compare our capital position against those of other financial groups under same Basel II
framework. Management receives and reviews these Capital ratios on a regular basis.
The Basel Committee has issued a series of announcements regarding a broader program designed tostrengthen the regulatory capital framework in light of weaknesses revealed by the financial crises. The following
is a summary of the proposals which are most relevant to us.
On March 12, 2009, the Basel Committee, recognizing the need to strengthen the level of capital in thebanking system, announced that the regulatory minimum level of capital would be reviewed in 2010. On July 13,
2009, the Basel Committee announced its approval of a package of measures designed to strengthen its rules
governing trading book capital and to enhance the three pillars of the Basel II framework. This announcement
states that the Basel Committee’s trading book rules, effective at the end of 2011, will introduce higher capitalrequirements to capture the credit risk of complex trading activities. Such trading rules also include a stressed58

VaR requirement, which the Basel Committee believes will help dampen the cyclicality of the minimum
regulatory capital framework. On September 7, 2009, the Group of Central Bank Governors and Heads ofSupervision, the oversight body of the Basel Committee, reached agreement on certain key measures designed tostrengthen regulation of the banking sector, including an increase in the quality, consistency and transparency of
the Tier 1 capital base. In particular, it was agreed that the predominant form of Tier 1 capital should be common
stock and retained earnings, narrowing the scope of current Tier 1.
On December 17, 2009, in an effort to promote a more resilient banking sector, the Basel Committee
approved for consultation a package of proposals to strengthen global capital and liquidity regulations. The
proposals include raising the quality, consistency and transparency of the capital base (including, in particular,
deductions of goodwill and other intangibles and net deferred tax assets from the predominant form of Tier 1
capital, and expanding the limitation on the double counting of capital to cover the wider financial system);strengthening the risk coverage of the capital framework (in addition to the higher capital requirements for
trading book exposures announced in July 2009); introducing a leverage ratio requirement as a supplemental
measure to the risk-based framework; and introducing a series of measures to address concerns over the“procyclicality” of the current framework. The proposals also introduce a minimum liquidity standard including
a 30-day liquidity coverage ratio as well as a longer-term structural liquidity ratio. Additional capital, liquidity orother supervisory measures to reduce the externalities created by systemically important institutions are also
under review. On December 16, 2010, the Committee issued the Basel III rules text “International framework forliquidity risk measurement, standards and monitoring” and “A global regulatory framework for more resilientbanks and banking systems” together with the results of the comprehensive quantitative impact study it had
conducted in 2010, setting out the standards which will be phased in gradually from 2013.
The FSA introduced the notices on consolidated regulation and supervision of securities companies on
consolidated basis on April 1, 2011 to improve the stability and transparency of Japan’s financial system andensure the protection of investors.
We have been assigned as Ultimate Designated Parent Company who must calculate consolidated regulatory
capital adequacy ratio according to the Upstream Consolidated Regulatory Capital Notice in April 2011. Since
then we calculate our Basel II-based consolidated regulatory capital adequacy ratio according to the Upstream
Consolidated Regulatory Capital Notice. The Upstream Consolidated Regulatory Capital Notice is expected toincorporate the series of rules and standards described above in line with the schedule proposed by the BaselCommittee.
Credit Ratings
The cost and availability of unsecured funding generally are dependent on credit ratings. Our long-term andshort-term debt is rated by several recognized credit rating agencies. We believe that our credit ratings include
the credit ratings agencies’ assessment of the general operating environment, our positions in the markets inwhich we operate, reputation, earnings structure, trend and volatility of our earnings, risk management
framework, liquidity and capital management. An adverse change in any of these factors could result in adowngrade of our credit ratings, and that could, in turn, increase our borrowing costs and limit our access to thecapital markets or require us to post additional collateral and permit counterparties to terminate transactions
pursuant to certain contractual obligations. In addition, our credit ratings can have a significant impact on certainof our trading revenues, particularly in those businesses where longer term counterparty performance is critical,
such as OTC derivative transactions.

59As of May 31, 2011, the credit ratings of Nomura Holdings, Inc. and NSC were as follows:
Nomura Holdings, Inc.

Short-term Debt

Long-term Debt

A-2
—
a-1
—

BBB+
Baa2
A+
AA-

Short-Term Debt

Long-term Debt

A-2
P-2
a-1
—

ABaa1
A+
AA-

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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Both 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 InvestorsService, for unsecured funding and other financing purposes and also for our trading and other businessactivities. Within the rating classification system of Rating and Investment Information, Inc., “a-1” is the highestof five categories for short-term debt and indicates “a strong degree of certainty regarding the debt repayment”;
and “A” is the 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 (-) signadded to a rating in that category to indicate its relative standing within that category. Within the ratingclassification system of Japan Credit Rating Agency, Ltd., “AA” is the second highest of ten categories for longterm debt and indicates “a very high level of capacity to honor the financial commitment on the obligation”, witha plus (+) or minus (-) sign added to a rating in that category to indicate its relative standing within that category.
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.
Off-balance sheet entities
In the normal course of business, we engage in a variety of off-balance sheet arrangements with off-balance
sheet entities which may have an impact on Nomura’s future financial position and performance.
Off-balance sheet arrangements with off-balance sheet entities include 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;•

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

any obligation, including a contingent obligation, arising out of a variable interest in an off-balance
sheet entity that is held by, and material to, us, where such entity provides financing, liquidity, market
risk or credit risk support to, or engages in leasing, hedging or research and development services with,us.
60

Off-balance sheet entities may take the form of a corporation, partnership, fund, trust or other legal vehicle
which is designed to fulfill a limited, specific purpose by its sponsor. We both create or sponsor these entities andalso enter into arrangements with entities created or sponsored by others.
Our involvement with these entities includes structuring, underwriting, distributing and selling debt
instruments and beneficial interests issued by these entities, subject to prevailing market conditions. In thenormal course of business, we also act as a transferor of financial assets to these entities, as well as, andunderwriter, distributor and seller of asset-repackaged financial instruments issued by these entities, inconnection with our securitization and equity derivative activities. We retain, purchase and sell variable interests
in Special Purpose Entities (“SPEs”) in connection with our market-making, investing and structuring activities.
Our other types of off-balance sheet arrangements include guarantee agreements and derivative contracts.
Significant involvement is assessed based on all of our arrangements with these entities, even if the probability ofloss, as assessed at the balance sheet date, is remote.
For further information about transactions with VIEs, see Note 8, “Securitization and Variable Interest
Entities” in our consolidated financial statements.
Repurchase and securities lending transactions accounted for as sales
We enter into certain types of repurchase transactions and securities lending transactions which we accountfor as sales rather than collateralized financings where the criteria for derecognition of the securities transferredunder ASC 860 are met. These consist of Repo-to-maturity transactions, certain Japanese securities lendingtransactions and to a lesser extent, Japanese Gensaki transactions.
We enter into repo-to-maturity transactions to take advantage of arbitrage opportunities between the cash
security and repo markets. These transactions involve the sourcing of specific securities in the market andcontemporaneously entering into repurchase agreements with different counterparties where the maturity of theagreement matches the maturity of the security transferred as collateral. We account for these transactions as
sales rather than collateralized financings where the criteria for derecognition of the securities transferred under
ASC 860 are met. The amounts of securities derecognized from our consolidated balance sheets under open repoto-maturity transactions as of March 31, 2010 and 2011 were ¥185,047 million and ¥169,766 million($2,051 million), respectively.
We engage in certain Japanese securities lending transactions for funding purposes under which we transfer
long securities (such as Japanese listed equities). The agreements supporting these transactions include varying
margining requirements, but the amount of cash we borrow from our counterparties is typically significantly lessthan the fair value of securities we lend. We account for these transactions as sales in our consolidated financial
statements where the criteria for derecognition of the transferred financial assets under ASC 860 are met. In
particular, we do not maintain effective control over the transferred financial assets as we are not able to be
returned the transferred financial assets on substantially agreed terms, even in the event of default by thetransferee. The amounts of securities derecognized from our consolidated balance sheets under open securities
lending transactions as of March 31, 2010 and 2011 were ¥153,808 million and ¥291,870 million($3,527 million), respectively.
We also have historically engaged in traditional Japanese repurchase agreements called “Gensaki”
transactions. We account for Gensaki transactions as sales in our consolidated financial statements where thecriteria for derecognition of the transferred financial assets under ASC 860 have been met. The transactions are
now less commonplace in Japan and have largely been replaced with Gensaki Repo transactions which wereintroduced in Japan in 2001 and which are similar to other international repurchase agreements used in the U.S.,
U.K. and other jurisdictions. These transactions contain margin requirements, rights of security substitution, or
certain restrictions on the customer’s right to sell or repledge the transferred securities. We therefore account for
Gensaki repo agreements as collateralized financings in our balance sheet. The amounts of securities
derecognized from our consolidated balance sheets under Gensaki Transactions as of March 31, 2010 and 2011were not significant.
61

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.

Purchase obligations:•

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

Commitments to extend credit:•

In connection with our banking and financing activities, we enter into contractual commitments toextend credit, which generally have a fixed expiration dates;•

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

Commitments to invest in partnerships:•

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 tothose partnerships.

Commitments to purchase aircraft:•

In accordance with our adoption of ASC810 amended by ASU 2009-17, we began consolidating certain
VIEs which have commitments to purchase aircraft.

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 other commitments, contingencies and guarantees.
62

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 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 these commitments
varies depending on the clients’ creditworthiness and the value of collateral held. We evaluate each client’s
creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by us upon
extension of credit, is based on management’s credit evaluation of the counterparty.
The following table shows our contractual obligations and contingent commitments as well as theirmaturities as of March 31, 2011:
Total
contractual
amountStandby letters of credit and otherguarantees . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term borrowings(1) . . . . . . . . . . . . . . . .
Operating lease commitments . . . . . . . . . . . .
Capital lease commitments(2) . . . . . . . . . . . .
Purchase obligations(3) . . . . . . . . . . . . . . . . . .
Commitments to extend credit . . . . . . . . . . .
Commitments to invest in partnerships . . . . .
Commitments to purchase aircraft . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Less than
1 year¥8,512
8,172,752
88,21549,97739,543
264,736
38,00877,928¥205
892,016
15,034386
28,55370,621274
24,905¥8,739,671¥1,031,994

Years to Maturity
1 to 33 to 5years
years(in millions)¥

9
1,917,525
25,414239
10,99064,28923,88645,066¥¥2,087,418¥2,252,652

More than
5 years

190 ¥
8,108
2,095,880
3,267,331
17,57830,1892,660
46,692——
128,105
1,721
282
13,566
7,957—¥3,367,607(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 ASC 860. 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 the total minimum lease payments before
deducting interest.
(3) 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 ourconsolidated balance sheets 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 under resale and repurchase agreements
including amounts in connection with collateralized agreements, collateralized financing and Gensaki
transactions. These commitments amount to ¥1,337 billion for resale agreements and ¥1,605 billion for
repurchase agreements as of March 31, 2011. These amounts include certain types of repurchase transactions andsecurities lending transactions which we account for as sales rather than collateralized financings in accordancewith ASC 860.

63

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, 2011. 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 Nomura and Other Companies

Brief Personal History

Nobuyuki Koga
(Aug. 22, 1950)

Director
Chairman of the Board
Chairman of the Nomination Committee
Chairman of the Compensation
Committee
Director and Chairman of the Board ofNomura Securities Co., Ltd.
President of Kanagawa Kaihatsu Kanko
Co., Ltd.

Apr. 1974 Joined Nomura
Jun. 1995 Director
Apr. 1999 Managing Director
Jun. 2000 Deputy President
Apr. 2003 Director and President
Jun. 2003 Director, President & CEO
Apr. 2008 Director and Representative
Executive Officer
Director and Chairman of
Nomura Securities Co., Ltd.
Jun. 2008 Resigned as Director andRepresentative Executive
OfficerJun. 2011 Director and Chairman of the
Board
Director and Chairman of theBoard of Nomura Securities
Co., Ltd.
President of Kanagawa Kaihatsu
Kanko Co., Ltd.

Kenichi Watanabe(Oct. 28, 1952)

Director, Representative Executive
Managing Director and Group CEO
Director and President & CEO of Nomura
Securities Co., Ltd.

Apr. 1975 Joined Nomura
Jun. 1998 Director
Jun. 2000 Managing Director
Oct. 2001 Director
Managing Director of Nomura
Securities Co., Ltd.
Apr. 2002 Executive Managing Director of
Nomura Securities Co., Ltd.
Jun. 2003 Senior Managing Director
Director and Executive Vice
President of Nomura Securities
Co., Ltd.
Apr. 2004 Executive Vice President of
Nomura Securities Co., Ltd.
Apr. 2006 Deputy President of Nomura
Securities Co., Ltd.
Apr. 2008 President & CEO
Director and President & CEO
of Nomura Securities Co., Ltd.
Jun. 2008 Director and President & CEO
Jun. 2011 Director, Representative
Executive Managing Director
and Group CEO

64

Name
(Date of Birth)

Responsibilities and Status
in Nomura and Other Companies

Brief Personal History

Takumi Shibata(Jan. 8, 1953)

Director, Representative Executive
Managing Director and Group COO
Chairman of Wholesale
Director and Deputy President & COO of
Nomura Securities Co., Ltd.

Apr. 1976 Joined Nomura
Jun. 1998 Director
Jun. 2000 Managing Director
Oct. 2001 Managing Director of Nomura
Securities Co., Ltd.
Apr. 2003 Executive Managing Director of
Nomura Securities Co., Ltd.
Jun. 2003 Senior Managing Director
Executive Vice President of
Nomura Securities Co., Ltd.
Apr. 2004 Director and Executive Vice
President of Nomura Securities
Co., Ltd.
Apr. 2005 Director and President & CEO
of Nomura Asset Management
Co., Ltd.
Apr. 2008 Deputy President & COO
Director and Deputy Presidentof Nomura Securities Co., Ltd.
Jun. 2008 Director and Deputy President& COO
Director and Deputy President& COO of Nomura Securities
Co., Ltd.
Apr. 2010 Chairman and CEO of theWholesale Division
Apr. 2011 Chairman of the Wholesale
Division
Jun. 2011 Director, Representative
Executive Managing Director
and Group COO

Masanori Itatani(Oct. 13, 1953)

Director
Member of the Audit Committee
Director of Nomura Securities Co., Ltd.

Apr. 1976 Joined Nomura
Jun. 1998 Director, responsible for
Corporate Communications andInvestor Relations
Jun. 2000 Director, responsible for
Corporate Planning andCommunications
Oct. 2001 Director, responsible forGeneral Affairs
Jun. 2003 Senior Managing Director,
responsible for Global
Corporate Communications,
General Affairs and Secretariat
Apr. 2004 Senior Managing Director,
responsible for Internal Audit
Apr. 2006 Executive Managing Director,
responsible for Internal Audit
Jun. 2007 Director
Director of Nomura Securities
Co., Ltd.

65

Name
(Date of Birth)

Responsibilities and Status
in Nomura and Other Companies

Masanori Nishimatsu(Feb. 3, 1958)

Director

Haruo Tsuji(Dec. 6, 1932)

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

Tsuguoki Fujinuma(Nov. 21, 1944)

Outside Director
Member of the Audit Committee
Outside Director of Nomura Securities
Co., Ltd.
Advisor of The Japanese Institute ofCertified Public Accountants
Outside Director of Tokyo Stock
Exchange Group, Inc.
Governor of Tokyo Stock Exchange
Regulation
Specially-appointed Professor of Chuo
Graduate School of Strategic
Management
Outside Statutory Auditor of Sumitomo
Corporation
Outside Statutory Auditor of Takeda
Pharmaceutical Company Limited
Outside Director of Sumitomo Life
Insurance Company
66

Brief Personal History

Apr. 1980 Joined Nomura
Apr. 2003 Director of Nomura Securities
Co., Ltd., responsible for retailbranch supervision, Tokyo
suburbs
Jun. 2003 Senior Managing Director of
Nomura Securities Co., Ltd.,
responsible for retail branch
supervision, Tokyo suburbs
Apr. 2006 Senior Managing Director of
Nomura Securities Co., Ltd.,
responsible for retail branch
supervision, Tokyo
Apr. 2007 Executive Managing Director of
Nomura Securities Co., Ltd.,
responsible for retail branch
supervision, Tokyo
Apr. 2008 Executive Managing Director of
Nomura Securities Co., Ltd.,
NagoyaOct. 2008 Senior Corporate Managing
Director of Nomura Securities
Co., Ltd., Nagoya
Apr. 2010 Advisor
Jun. 2010 Director
Mar. 1955 Joined Hayakawa ElectricIndustry Co., Ltd. (currently,
Sharp Corporation)
Jun. 1986 President, Sharp Corporation
Jun. 1998 Corporate Advisor, Sharp
Corporation
Jun. 2001 Outside Statutory Auditor
Jun. 2003 Outside Director
Outside Director of Nomura
Securities Co., Ltd.
Jun. 2008 Outside Director of Kobayashi
Pharmaceutical Co., Ltd.
Jun. 2010 Outside Director of SEIREN
CO., LTD.
Apr. 1969 Joined Horie Morita Accounting
Firm
Jun. 1970 Joined Arthur & Young
Accounting Firm
Nov. 1974 Registered as a certified public
accountant
May 1991 Managing Partner of Asahi
Shinwa Accounting Firm
Jun. 1993 Managing Partner of Ota Showa& Co. (Ernst & Young
ShinNihon (currently, Ernst &Young ShinNihon LLC))
May 2000 President of the International
Federation of Accountants
Jul. 2004 Chairman and President of theJapanese Institute of Certified
Public Accountants

Name(Date of Birth)

Responsibilities and Status
in Nomura and Other Companies

Brief Personal History

Outside Statutory Auditor of Seven & i
Holdings Co., Ltd.

Jun. 2007

Retired from Ernst & Young
ShinNihon
Jul. 2007 Advisor of the Japanese Instituteof Certified Public Accountants
Aug. 2007 Outside 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 Outside Statutory Auditor of
Sumitomo Corporation
Outside Statutory Auditor of
Takeda Pharmaceutical
Company Limited
Outside Director
Outside Director of Nomura
Securities Co., Ltd.
Jul. 2008 Outside Director of Sumitomo
Life Insurance Company
May 2010 Outside Statutory Auditor of
Seven & i Holdings Co., Ltd.

Masahiro Sakane(Jan 7, 1941)

Outside Director
Member of the Nomination Committee
Member of the Compensation Committee
Outside Director of Nomura Securities
Co., Ltd.
Chairman of Komatsu Ltd.
Outside Director of Tokyo Electron
LimitedDirector and Chairman of Komatsu Ltd.
Outside Director of ASAHI GLASS Co.,Ltd.

Apr. 1963 Joined Komatsu Ltd.
Jun. 2001 President of Komatsu Ltd.
Jun. 2003 President & CEO of Komatsu
Ltd.
Jun. 2007 Representative Director andChairman of Komatsu Ltd.
Jun. 2008 Outside Director of Tokyo
Electron Limited
Outside Director
Outside Director of Nomura
Securities Co., Ltd.
Jun. 2010 Director and Chairman of
Komatsu Ltd.
Mar. 2011 Outside Director of ASAHIGLASS Co., Ltd.

Lord Colin Marshall(Nov. 16, 1933)

Outside Director
Feb. 1983
Chairman of Pirelli UK Limited
Chairman of Nomura International plc
Jan. 1993
Chairman of Nomura Europe Holdings plc
Feb. 1993
Nov. 1995
May 1996

Chief Executive of British
Airways plc
Non-Executive Director of
HSBC Holdings plc
Chairman of British Airways plc
Chairman of Inchcape plc
President of CBI (Confederationof British Industry)Jan. 1998 Chairman of Invensys plc
Sep. 2003 Chairman of Pirelli UK plc(currently, Pirelli UK Limited)
Oct. 2004 Chairman of Nomura
International plc
May 2009 Chairman of Nomura Europe
Holdings plc
Jun. 2010 Outside Director

67

Name
(Date of Birth)

Responsibilities and Status
in Nomura and Other Companies

Brief Personal History

Dame Clara Furse(Sept. 16, 1957)

Outside Director
Non-Executive Director of Legal &General Group plc
Non-Executive Director of Nomura
International plc
Non-Executive Director of Nomura
Europe Holdings plc
Non-Executive Director of Amadeus IT
Holding SA

Feb. 1983
Jun. 1990

Joined Phillips & Drew/UBS
Non-Executive Director of
LIFFE (London International
Financial Futures Exchange)
Jun. 1997 Deputy Chairman of LIFFE
May 1998 Group Chief Executive of Credit
Lyonnais Rouse
Jan. 2001 Chief Executive of London
Stock Exchange Group
Jun. 2009 Non-Executive Director of
Legal & General Group plc
Dec. 2009 Non-Executive Director of
Nomura International plc
Non-Executive Director of
Nomura Europe Holdings plc
Apr. 2010 Non-Executive Director of
Amadeus IT Holding SA
Jun. 2010 Outside Director

David Benson(Feb. 9, 1951)

Director

Feb. 1997
Jul. 1999
Mar. 2005
Aug. 2007
Nov. 2008
Jan. 2011
Apr. 2011
Jun. 2011

Takao Kusakari(Mar. 13, 1940)

Outside Director
Apr. 1964
Outside Director of Nomura Securities
Co., Ltd.
Aug. 1999
Outside Statutory Auditor of Nippon Steel Apr. 2002
Corporation
Corporate Advisor of NYK Line
Apr. 2004

Joined Nomura International plc
Head of Risk Management,
Nomura International plc
COO, Nomura International plc
Resigned from Nomura
International plc
Senior Managing Director,
Chief Risk Officer
Vice Chairman, Risk andRegulatory Affairs
Senior Managing Director, Vice
Chairman
Director

Joined Nippon Yusen Kabushiki
Kaisha (NYK Line)
President of NYK Line
President, President Corporate
Officer of NYK Line
Chairman, Chairman Corporate
Officer of NYK Line
Apr. 2006 Chairman, Chairman Corporate
Officer of NYK Line
Apr. 2009 Director and Corporate Advisorof NYK Line
Jun. 2009 Outside Statutory Auditor of
Nippon Steel Corporation
Jun. 2010 Corporate Advisor of NYK Line
Jun. 2011 Outside Director
Outside Director of Nomura
Securities Co., Ltd.

68

Name
(Date of Birth)

Responsibilities and Status
in Nomura and Other Companies

Toshinori Kanemoto(Aug. 24, 1945)

Outside Director
Member of the Nomination Committee
Member of the Compensation Committee
Outside Director of Nomura Securities
Co., Ltd.
Of-Counsel of City-Yuwa Partners
Outside Statutory Auditor of Kameda
Seika Co., Ltd.

Michael Lim Choo
San
(Sept. 10, 1946)

Outside Director
Aug. 1972
Member of The Singapore Public Service
Commission
Jan. 1992
Chairman of the Land Transport Authorityof Singapore
Oct. 1998
Non-Executive Chairman of Nomura
Singapore Ltd.
Jul. 1999
Member of the Legal Service
Commission, Singapore
Non-Executive Director of Nomura Asia Sep. 2002
Holding N.V.
Jul. 2006

Brief Personal History

Apr. 1968
Apr. 1992

Joined National Police Agency
Kumamoto Prefecture Police
Headquarters, Director-General
Aug. 1995 Director General of theInternational Affairs
Department, National Police
AgencyOct. 1996 President of ICPO-INTERPOL
Aug. 2000 President, National Police
AcademyApr. 2001 Director of Cabinet Intelligence,
Cabinet Secretariat, Governmentof JapanJan. 2007 Registered as Attorney-at-Law(Dai-ichi Tokyo Bar
Association)
Sep. 2007 Of-Counsel of City-Yuwa
Partners
Jun. 2008 Outside Statutory Auditor ofKameda Seika Co., Ltd.
Jun. 2011 Outside Director
Outside Director of Nomura
Securities Co., Ltd.
Joined Price Waterhouse,
Singapore
Managing Partner of Price
Waterhouse, Singapore
Member of The Singapore
Public Service Commission
Executive Chairman ofPricewaterhouseCoopers,
Singapore
Chairman of the Land Transport
Authority of Singapore
Non-Executive Chairman of
Nomura Singapore Ltd.
Nov. 2007 Member of the Legal Service
Commission, Singapore
Feb. 2009 Non-Executive Director of
Nomura Asia Holding N.V.
Jun. 2011 Outside Director

Among the above listed Directors, Haruo Tsuji, Tsuguoki Fujinuma, Masahiro Sakane, Lord ColinMarshall, Dame Clara Furse, Takao Kusakari, Toshinori Kanemoto and Michael Lim Choo San satisfy therequirements for an “outside director” under the Companies Act. The Companies Act defines an outside directorof a company as a non-executive director (i) who has never assumed the position of executive director, executive
officer, manager or employee of the company or its subsidiaries and (ii) who does not currently assume theposition 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, 2011. 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 Nomura and Other Companies

Kenichi Watanabe(Oct. 28, 1952)
Takumi Shibata(Jan. 8, 1953)

See “Directors” under this Item 6.A.

See “Directors” under this Item 6.A.

See “Directors” under this Item 6.A.

See “Directors” under this Item 6.A.

Hitoshi Tada
(Jun. 29, 1955)

Executive Managing Director
Retail CEO
Deputy President & Co-COO 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.
Apr. 2003 Managing Director of Nomura
Securities Co., Ltd.
Jun. 2003 Senior Managing Director
Executive Managing Directorof Nomura Securities Co., Ltd.
Apr. 2006 Executive Vice President of
Nomura Securities Co., Ltd.
Apr. 2008 Nomura Group Domestic
Retail CEO
Oct. 2008 Executive Managing Director
and Domestic Retail CEO(currently, Retail CEO)
Representative Executive
Officer and Executive Vice
President of Nomura
Securities Co., Ltd.
Apr. 2009 Deputy President of Nomura
Securities Co., Ltd.
Apr. 2011 Deputy President & Co-COO
of Nomura Securities Co., Ltd.

Toshihiro Iwasaki(May 10, 1957)

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

Apr. 1981 Joined Nomura
Apr. 2004 Executive Managing Directorof Nomura Securities Co., Ltd.
Apr. 2008 President & CEO of The
Nomura Trust and Banking
Co., Ltd.
Apr. 2011 Deputy President of Nomura
Asset Management Co., Ltd.
Jun. 2011 Executive Managing Directorand Asset Management CEO
Director and Chairman &CEO of Nomura AssetManagement Co., Ltd.

70

Brief Personal History

Name(Date of Birth)

Responsibilities and Status
in Nomura and Other Companies

Junko Nakagawa(Jul. 26, 1965)

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

Brief Personal History

Apr. 1988 Joined Nomura
Mar. 2004 Resigned
Jan. 2008 Senior Advisor of Nomura
Healthcare Co., Ltd.
Apr. 2008 Director and President of
Nomura Healthcare Co., Ltd.
Jun. 2010 Co-deputy CFO
Director of Nomura
Healthcare Co., Ltd.
Apr. 2011 Executive Managing Director,
Chief Financial Officer
Executive Managing Director,
Financial Officer of Nomura
Securities Co., Ltd.

B. Compensation.
The overview of Nomura Group’s compensation framework is as follows:(1) Compensation policy
We have developed our compensation policy for both executives and employees of Nomura Group to ensure
we attract, retain, motivate and develop talent that enable us to achieve sustainable growth, realize a long-term
increase in shareholder value, deliver client excellence, compete in a global market and enhance our reputation.
Our compensation policy is based around the following six key themes. It aims to:1.

align with Nomura values and strategies;2.

reflect firm, division and individual performance;3.

establish appropriate performance measurement with a focus on risk;

4.

align employee and shareholder interests;

5.

establish appropriate compensation structures; and6.

ensure robust governance and control processes.

(2) Compensation governance
The Compensation Committee of Nomura, which is a statutory committee, is responsible for approving ouroverall compensation policy and for ensuring that Nomura Group’s compensation framework supports ourbusiness strategy.
The Company has delegated authority to the Human Resources Committee (“HRC”) to develop and to
implement Nomura Group’s compensation policy. The HRC’s responsibilities include:•

approving the compensation framework, assuring that it is in line with global compensation strategy,
while taking into account necessary factors to ensure that all staff, including members of executive
management, are provided with appropriate incentives to enhance their performance and are rewarded
for their individual contributions to the success of our business globally,•

approving the total bonus pool and its allocation to each business,71•reviewing the performance measures of senior executives to ensure that benefits, including rights toperformance-related compensation, reflect the performance of both individuals and our businessglobally,•

continually reviewing the appropriateness and relevance of the compensation policy and•approving any major changes in employee benefits structures globally.

The term of the office of each HRC member is unlimited, and changes to its members must be approved by the
Chairman. Current members include the Group CEO (as Chairman of the Committee), Group COO, CEO of theWholesale Division, CEO of the Retail Division, CFO, head of the CEO/COO Office, heads of Human Resources anda Director of Nomura.
(3) Regulatory developments and review of our compensation plans
The recent global financial crisis has resulted in enhanced regulatory requirements and oversight in many ofour key operating regions. During the fiscal year ended March 31, 2010, we completed a comprehensive review
of our compensation programs and practices, with assistance from an independent compensation consulting firm,in light of changes to our business, the regulatory environment and the broader competitive landscape.
Based on above mentioned reviews, the new compensation programs have been developed to support ourbusiness strategy and growth, to better respond to the expectations of key stakeholders in the business including
employees. These programs are aligned with the frameworks created by the Financial Stability Board, a forum of
global financial regulators, as well as by regulators in key jurisdictions in which we operate.
We will continue to review our program and will adapt to changes as appropriate based on regulatory input
and guidance and our ever-changing competitive environment.
(4) Nomura compensation framework
Annual Total Compensation is used to compare our compensation with that of the market standard, which
includes the following components:
Compensation
Components

Base Salary

Purposes•

Rewards individuals for their knowledge, skills,
competencies and experiences•

Reflects local labor market standards•

Reflects sufficient levels to absorb changes in
the amount of bonuses
Reflects practices of local labor markets todeliver allowances as a part of fixedcompensation to individuals
Rewards team and individual performances, andtheir contribution to results as well as strategic
and future value

Fixed Allowances•

Variable Compensation••

Reflects broad view on compensation, including
individual performances, approaches to risk,
compliance and cross divisional cooperation•

Reflects appropriate internal and market-based
comparisons•Considers the stages of business development

Specific Elements•

Base pay••

Housing allowances
Overtime pay•

Cash bonuses•

Deferredcompensation

Note: Benefits are driven by local market regulations and practices, and are not included in the definition of Total
Compensation72

For the fiscal year ended March 31, 2010, we reassessed the balance of variable compensation and the fixedcompensation to reflect changes in both regulatory framework designed to mitigate risk-taking as well as market
practices.
This reassessment is intended to keep Total Compensation at the current level while shifting the balance
towards fixed compensation rather than variable compensation.
Variable compensation is used to reward both firm-wide and individual performances. Its level is based on
financial and non-financial elements.
Guarantees on compensation are used in limited circumstances; we give such guarantees only when they are
deemed essential based on commercial justification.
(5) Variable compensation
Our variable compensation programs are a core part of our Total Compensation. They are intended to alignemployee interests with the long-term interests of shareholders.
Funding framework
A key aspect of our comprehensive review of compensation programs and practices was the reassessment of
our approaches to determining the total amount of variable compensation as a component of Total Compensation.
To ensure adequate returns to shareholders, determining the amount of Total Compensation based on riskadjusted profits may become the industry standard, which is consistent with regulatory requirements. We havetherefore emphasized on determining the compensation as a percentage of risk-adjusted profits (before deductionof tax and personnel expenses).
Decisions are made with reference to payout ratios applicable to companies selected for the purpose ofcomparing. Such ratios differ among each business division. The companies for the comparison are determinedon the basis of similarity in terms of its businesses, size and scope, as well as geographical distribution. We
compete against these companies to attract and retain the best talent for the development and growth of ourbusiness. In addition, determination of compensation for control functions is made independently of that forbusiness divisions.
During the investment phase of any business we seek to develop, the actual funding level of compensation
will be affected by budget targets, franchise building, capital usage, incentive guarantees and market conditions.
It is likely to decrease over time as the business matures and will trend to a sustainable longer-term level.
Types of variable compensation plans
The core elements of variable compensation in the Nomura group are delivered in the following ways:
1. Cash bonuses
A proportion of the variable compensation is delivered in the form of a cash payment made to individuals
following the end of the fiscal year. The proportion of cash bonuses decreases from all cash at the lowest level ofcompensation so that individuals with higher levels of compensation receive a lower proportion in cash. This is
in line with regulatory guidance, and while the policy is global in application, specific local regulatory
requirements will be adhered to when deciding on proportions of cash bonuses.

73

2. Deferred compensation
Certain senior management and employees whose compensation is above a certain amount receive a portionof their variable compensation in the form of deferred compensation vehicles. By linking the economic value to
Nomura’s stock price or imposing certain vesting periods in place, such plans will:•align employee interest with that of shareholders;•increase employee retention through providing individual wealth creation potential over certain period
form the grant to vesting; and•encourage cross-divisional and cross-regional collaboration by focusing individuals on a common goalof the long-term increase in corporate value.

With these benefits, deferred compensation plans are also recommended by regulators of key jurisdictions inwhich we operate.
For certain deferred compensation plans for the fiscal year ended March 31, 2011, we have changed thedeferral periods so that they are in line with the “Principles for Sound Compensation Practices” issued by the
FSB, which recommends, among others, a deferral period of three or more years.
Our deferred compensation plans have the following variations:
1. Core deferral plans(a) Stock Acquisition Right (“SAR”) Plan
Nomura has issued the following two types of SARs to certain employees as well as senior management.
•

SAR Plan A
Options are awarded with an exercise price higher than the Nomura stock price on the date of grant.
There is a certain period set between the date of grant and the date of vesting. They are qualified as
SARs under Japanese taxation laws and therefore have been issued mainly to employees in Japan.

•

SAR Plan B
This plan is intended to offer a similar economic effect as restricted stock, as commonly used in the U.S.
and Europe. Options are granted with an exercise price of ¥1 per share. There is a certain period set
between the date of grant and the date of vesting.

(b) Notional Stock Unit (“NSU”) Plan
This is a cash-settled plan that has been designed to replicate the key features of the SAR Plan B describedabove. This allows equity-linked awards to be made in countries where SARs are less favorably treated from tax
or other perspectives. We have expanded this plan globally since the fiscal year ended March 31, 2010.
2. Supplemental deferral plans
We also introduced the following deferral plans for the fiscal year ended March 31, 2011. These plans were
offered to certain senior management and employees in addition to the Core deferral plans. The plans reinforce
our goals of retaining and motivating our key talent in the competitive market place.
(a) Collared Notional Stock Unit (“CSU”) Plan
This plan is linked to the value of the Nomura’s stock price with exposure of the employee subject to a cap
and floor.
74

(b) Notional Index Unit (“NIU”) Plan
This plan is linked to a world stock index quoted by Morgan Stanley Capital International. Other material
terms, including deferral period and vesting conditions, are the same as those for CSUs.
(6) Compensation for Directors and Executive Officers
In accordance with the fundamental approach and framework of compensation as described above, theCompensation Committee of Nomura, which adopts the committee system corporate form under the Companies
Act, determines compensation for its Directors and Executive Officers in line with the compensation policy
specifically applicable to them. The Compensation Committee is a highly independent organization, which iscomprised of a Director of the Board who is not an executive officer (as Chairman of the Committee) and amajority of outside directors.
1

Aggregate compensation
Year Ended March 31, 2011
Number of
Directors(Millions of Yen)or
Executive
Base
Cash
Officers
Salary SARs Bonus

Category

Total

Directors (Excluding Outside Directors) . . . . . . . . . . . . . . . . . . . . . . .
Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outside Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5
10
8

¥184
563
233

¥ 89
331
11

¥

2
36
—

¥ 275
930
244

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

23

¥980

¥431

¥ 38

¥1,449Includes compensations from consolidated subsidiaries.
2

Individual compensation of Directors and Executive Officers receiving 100 million yen or moreYear Ended March 31, 2011

Category

Base
Salary(Millions of Yen)
Cash
SARs Bonus

Name

Company

Junichi Ujiie . . . . . . . . . . .

NomuraChairman of the Board of Directors

¥ 95

¥65

¥—

¥160

Kenichi Watanabe . . . . . . .

NomuraDirector and President & CEO

108

63

1

172

Takumi Shibata . . . . . . . . .

NomuraDirector and Deputy President & COO

96

56

3

155

Hitoshi Tada . . . . . . . . . . .

NomuraExecutive Managing Director

70

84

22

176

Atsushi Yoshikawa . . . . . .

NomuraExecutive Managing Director

60

32

9

101

75

Total

Stock Acquisition Rights (“SARs”)

Series of SARs

Allotment Date

Number of
Shares under
SARs

SARs No.3

June 4, 2004

79,000

SARs No.4

August 16, 2004

1,224,000

SARs No.5

April 25, 2005

6,000

SARs No.6

June 3, 2005

172,000

SARs No.8

July 25, 2005

1,488,800

SARs No.9

April 24, 2006

135,700

SARs No.10

June 12, 2006

342,700

SARs No.11

July 14, 2006

1,760,000

SARs No.12

October 10, 2006

4,700

SARs No.13

April 25, 2007

617,200

SARs No.14

June 21, 2007

553,600

SARs No.15

August 1, 2007

113,000

SARs No.16

August 1, 2007

1,835,000

SARs No.17

August 1, 2007

400,200

SARs No.18

October 19, 2007

21,800

SARs No.19

April 23, 2008

1,225,100

SARs No.20

June 23, 2008

122,700

SARs No.21

June 23, 2008

453,600

SARs No.22

August 5, 2008

110,000

SARs No.23

August 5, 2008

1,916,000

SARs No.24

August 5, 2008

3,000

SARs No.26

November 10, 2008

15,600

SARs No.27

November 10, 2008

59,40076

Exercise Period of SARs

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 November 11, 2010
to November 10, 2015
From November 11, 2010
to November 10, 2015(as of March 31, 2011)
Exercise
Price perPaid-in
Share under Amount for
SARs
SARs

1

0

1,311

0

1

0

1

0

1,152

0

1

0

1

0

1,793

0

1

0

1

0

1

0

1,940

0

1,940

0

1

0

1

0

1

0

1

0

1

0

1,333

0

1,333

0

1

0

1

0

1

0

Series of SARs

Allotment Date

Number of
Shares under
SARs

SARs No.28

April 30, 2009

7,607,400

SARs No.29
SARs No.30
SARs No.31
SARs No.32
SARs No.33
SARs No.34
SARs No.35
SARs No.36
SARs No.37
SARs No.38
SARs No.39
1:
2:

Exercise Period of SARs

From May 1, 2011
to April 30, 2016
June 16, 2009
481,100
From June 17, 2011
to June 16, 2016
June 16, 2009
1,067,400
From June 17, 2011
to June 16, 2016
August 5, 2009
176,000
From August 6, 2011
to August 5, 2016
August 5, 2009
2,340,000
From August 6,
2011 to August 5, 2016
November 25, 2009 578,100 From November 26, 2011
to November 25, 2016
May 18, 2010
2,208,600
From May 19, 2012
to May 18, 2017
May 18, 2010
7,830,400
From May 19, 2012
to May 18, 2017
May 18, 2010
2,211,800
From May 19, 2013
to May 18, 2017
July 28, 2010
32,900,000
From April 30, 2012
to April 29, 2017
July 28, 2010
10,689,900
From April 30, 2013
to April 29, 2018
November 6, 2010 2,855,000 From November 16, 2012
to November 15, 2017(as of March 31, 2011)
Exercise
Price perPaid-in
Share under Amount for
SARs
SARs

1

0

1

0

1

0

757

0

757

0

1

0

1

0

1

0

1

0

1

0

1

0

487

0

SARs (including those granted to Directors and Executive Officers of Nomura which are stated in the tablebelow) are issued in conjunction with deferred compensation plan.
The number of shares issuable under SARs is subject to adjustments under certain circumstances including
stock split.

77

SARs Held by Directors and Executive Officers of Nomura

Series of SARs

Number of
Shares under
SARs

SARs No.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SARs No.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SARs No.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SARs No.8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SARs No.10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SARs No.11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SARs No.14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SARs No.15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SARs No.16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SARs No.20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SARs No.21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SARs No.22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SARs No.23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SARs No.24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SARs No.29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SARs No.30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SARs No.31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SARs No.32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SARs No.34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SARs No.35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,000
107,000
13,00093,00062,10074,00065,90027,00045,00057,40026,70051,00032,0003,000
234,400
21,00078,0005,000
1,442,900
23,500(as of March 31, 2011)
Numbers of Holders
Directors andExecutive Officers(excluding
Outside Directors) Outside Directors

—
9
1
9
4
10
5
4
6
5
3
6
4
—
9
1
9
1
9
1

1
2
1
2
1
2
2
2
—
2
—
4
1
1
4
1
5
—
—
—

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 a board of directors and board of statutory auditors. A
company which chooses the Committee System must establish three committees: a nomination committee, anaudit committee and a compensation committee. The members of each committee are chosen from thecompany’s directors and a majority of each committee must be outside directors. The company must then appoint
executive officers and representative executive officers by a resolution of the board of directors. Under theCommittee System, the executive officers manage the business affairs of a company. While the board of directors
is entitled to establish the basic management policy for the company and has decision-making authority overcertain prescribed matters, all other decisions related to business 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, the Nomination Committee, the Audit Committee and the 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
78

Board of Directors has the authority to determine our basic management policy and supervise the execution by
the Directors and Executive 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 business.
Our Articles of Incorporation provide that the number of Directors shall not be 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 fiscal year ended March 31, 2011. As a group, our Directors
attended approximately 96% of the total number of meetings of our Board of Directors during the year.
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. Our Compensation Committee met three times during the fiscal year
ended March 31, 2011. As a group, the member Directors attended approximately 100% of the total number of
meetings of our Compensation Committee during the year. The committee’s current members are Nobuyuki
Koga (as of June 28, 2011), Masahiro Sakane and Toshinori Kanemoto (as of June 28, 2011). Nobuyuki Koga is
the Chairman of this committee.
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. Our
Nomination Committee met four times during the fiscal year ended March 31, 2011. As a group, the member
Directors attended approximately 100% of the total number of meetings of our Nomination Committee during
the year. The committee’s current members are Nobuyuki Koga (as of June 28, 2011), Masahiro Sakane andToshinori Kanemoto (as of June 28, 2011). Nobuyuki Koga is the Chairman of this committee.
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 andtheir 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.
Our Audit Committee met 23 times during the fiscal year ended March 31, 2011. As a group, the member
Directors attended approximately 97% of the total number of meetings of our Audit Committee during the year.
The committee is currently composed of Haruo Tsuji, Tsuguoki Fujinuma and Masanori Itatani (as of June 28,2011). Haruo Tsuji is the Chairman of this committee.

79

Limitation of Liabilities of Outside Directors
We have entered into agreements with our Outside Directors, Haruo Tsuji, Masahiro Sakane, Tsuguoki
Fujinuma, Lord Colin Marshall, Dame Clara Furse, Takao Kusakari, Toshinori Kanemoto and Michael Lim
Choo San that limit their liabilities to us for damages suffered by us due to their acts taken in good faith andwithout gross negligence, up to the higher of (a) ¥20 million or (b) the amount prescribed by laws andordinances.
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 todetermine the matters delegated by the resolutions of our Board of Directors and to execute our businessactivities.
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. For fees and charges that a holder of
Nomura’s ADSs may have to pay, see “Description of Securities Other Than Equity Securities” under Item 12 ofthis annual report.
D. Employees
The following table shows the number of our employees as of the dates indicated:2009

As of March 31,
2010
2011

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,320 15,053 14,918
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,294
4,369
4,353
Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,079
1,781
2,348
Asia Pacific (excluding Japan), India and Oceania . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,933
5,171
5,252
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25,626

26,374

26,871

As of March 31, 2011, we had 14,918 employees in Japan, including 9,433 of Retail Division, 1,908 of
Wholesale Division and 842 of Asset Management Division. Overseas, we had 11,953 employees, of which
4,353 were located in Europe, 2,348 in the Americas, and 5,252 in Asia Pacific (excluding Japan), India andOceania.
As of March 31, 2011, 7,897 of NSC’s employees in Japan were members of Nomura Employees’ Union,
with which we have a labor contract. Between the company and the labor union, we had been holding constantdiscussions to make solutions on labor related matters.
We have not experienced any strikes or other labor disputes in Japan as well as overseas and consider our
employee relations to be excellent.

80

E. Share Ownership.
The following table shows the number of shares owned by our Directors and Executive Officers as ofJune 30, 2011. 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

Kenichi Watanabe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Takumi Shibata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Masanori Itatani . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Masanori Nishimatsu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Haruo Tsuji . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tsuguoki Fujinuma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Masahiro Sakane . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lord Colin Marshall . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dame Clara Furse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nobuyuki Koga . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
David Benson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Takao Kusakari . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toshinori Kanemoto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Michael Lim Choo San . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

62,299140,614111,173
68,80014,00011,5586,400
0
0121,3620000Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

536,206

Executive Officers
Name

Number of
Shareholdings

Kenichi Watanabe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Takumi Shibata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hitoshi Tada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toshihiro Iwasaki . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Junko Nakagawa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

See above
See above
85,224
16,0450Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

101,269

For information regarding stock options granted to our Directors and Executive Officers, see “Equity-linked
compensation plan” 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 shareholder who is the beneficial owner holding more than 5% of ouroutstanding common stock as of March 31, 2011.
Number of Shares Owned andPercentage of Voting Right(in thousand shares)(%)

Names of Shareholders

Japan Trustee Services Bank, Ltd. (Trust Account) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

81

188,035

5.22

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, 2011, there
were 233 record shareholders of Nomura with addresses in the U.S., and those U.S. holders held 481,602,476
shares of Nomura’s common stock, representing 12.9% of Nomura’s then outstanding common stock. As of
March 31, 2011, there were 45,807,732 ADSs outstanding, representing 45,807,732 shares of Nomura’s common
stock or 1.2% 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 38.5% of NLB’s outstanding share capital as of March 31, 2011.
Other major shareholders of NLB were Nomura Research Institute, Ltd. (“NRI”), holding 19.2%, and
JAFCO Co., Ltd., holding 19.2% as of March 31, 2011.
For the year ended March 31, 2011, we paid ¥4,358 million in rent to NLB. As of March 31, 2011, we had¥4,229 million in lease deposits with NLB.
Subsequent events relating to NLB
Since May 24, 2011, NLB has become a consolidated subsidiary of Nomura. See Note 10, “Businesscombinations” for more information.
Nomura Research Institute, Ltd.
NRI develops and manages computer systems and provides research services and management consulting
services. We are one of the major clients of NRI.
We held 38.5% of NRI’s outstanding share capital as of March 31, 2011.
For the year ended March 31, 2011, we purchased ¥20,945 million worth of software and computerequipment, and paid NRI ¥52,187 million for other services.
Directors
Fumihide Nomura, who resigned his post as our director on June 25, 2010, was also serving as President of
Nomura Shokusan Co., Ltd. (“Shokusan”) incorporated in Japan, which is principally engaged in real-estateleasing. Shokusan leases commercial properties to our subsidiary, Nomura Facilities, Inc.. During the period
from April 1, 2010 to June 25, 2010, Nomura Facilities, Inc. had paid ¥104 million for the rent to Shokusan. Thistransaction was in the ordinary course of business and on substantially the same terms as those prevailing at thetime for comparable transactions with unrelated third parties. We held approximately 0.9% of Shokusan’s
outstanding stocks as of March 31, 2011.
C. Interests of Experts and Counsel.
Not applicable.

82

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
In the normal course of business as a global financial services entity, we are involved in investigations,lawsuits and other legal proceedings and, as a result, may suffer economic loss from any fines, penalties ordamages awarded against us, any settlements we choose to make to resolve a matter, and legal and other advisory
costs incurred to support and formulate a defense.
In accordance with ASC 450 “Contingencies”, we recognize a liability for this risk of loss arising on eachindividual matter when an estimated economic loss is probable and the amount of such loss can be reasonably
estimated. The amount recognized as a liability is reviewed at least quarterly and is revised when further
information becomes available.
The ability to predict the outcome of these actions and proceedings is inherently difficult, particularly whereclaimants are seeking substantial or indeterminate damages, where investigations and legal proceedings are at an
early stage, where the matters present novel legal theories or involve a large number of parties, or which takeplace in foreign jurisdictions with complex or unclear laws. We cannot therefore estimate with confidence losses
or ranges of losses for actions and proceedings where there is only a reasonably possible risk of loss.
We believe that, based on current information available as of the date of these consolidated financial
statements, the ultimate resolution of these actions and proceedings will not be material to our financial
condition. However, an adverse outcome in certain of these matters could have a material adverse effect on ourconsolidated results of operations or cash flows in a particular quarter or annual period.
The most significant actions and proceedings against us are summarized below. Where possible, the amountof the claim of the counterparty is disclosed which provides an indication of the maximum loss we may incur.
In January 2008, NIP was served with a tax notice issued by the tax authorities in Pescara, Italy alleging
breaches by NIP of the U.K.-Italy Double Taxation Treaty of 1998 (the “Tax Notice”). The alleged breaches
relate to payments to NIP of tax credits on dividends on Italian shares. The Tax Notice not only denies certain
payments to which NIP claims to be entitled but is also seeking reimbursement of EUR 33.8 million, includinginterest, already refunded. In March 2008, NIP lodged an appeal against the Tax Notice rejecting the Italian tax
authorities’ demands for reimbursement and in November 2009, a decision was issued by the Pescara Tax Courtin favor of the Italian Tax Authorities. NIP is vigorously challenging this decision.
In April 2010, Lehman Brothers Holdings Inc. and Lehman Brothers Special Financing Inc. (collectively,“Lehman Inc.”) commenced proceedings in the U.S. Bankruptcy Court in New York objecting to the proofs ofclaims filed by Nomura’s subsidiaries, NSC, NIP and Nomura Global Financial Products Inc. in respect of swaps
and other derivative transactions in the total amount of approximately $1 billion; and in the case of NSC and
NIP, Lehman Inc. is seeking to recover damages.
Fairfield Sentry Ltd. and Fairfield Sigma Ltd. (collectively, the “Fairfield Funds”), which are now inliquidation and were feeder funds to Bernard L. Madoff Investment Securities LLC (under the liquidation with its
trustee’s on-going recovery procedure pursuant to the Securities Investor Protection Act in the U.S. since83December 2008), have filed lawsuits in the Supreme Court of the State of New York and U.S. Bankruptcy Court
against a number of investors, including NIP, seeking to recover redemption payments that the Fairfield Funds
allege, inter alia, were mistakenly made. In a complaint dated October 5, 2010, the amount claimed against NIP
was approximately $34 million plus interest. The claim against NIP is proceeding in the U.S. Bankruptcy Court.
On November 11, 2010, the High Court in London ruled in favor of NIP and Nomura Bank International Plc(“NBI”) dismissing claims made by WestLB AG (“WestLB”) against them. WestLB first served the proceedings
on NIP and NBI in April 2009, claiming that under the terms of a note issued by NBI and which matured in
October 2008, WestLB was entitled to receive approximately $22 million, which it claimed to be the value of afund of shares referable to the NBI note. WestLB sought permission to appeal and this was granted by the Courtof Appeal on March 7, 2011.
On March 1, 2011, PT Bank Mutiara Tbk. (“Bank Mutiara”) commenced proceedings in the Commercial
Court of the Canton of Zurich against a special purpose company (“SPC”) established at the request of NIP.
These are proceedings to challenge the SPC’s rights over approximately $156 million in an account held in
Switzerland. The SPC has a security interest over the money pursuant to a loan facility with a third party. The
SPC does not believe that Bank Mutiara has any enforceable security interest over the funds and is seeking
release of the monies.
Subsequent eventsIn April 2011, the Federal Home Loan Bank of Boston (“FHLB-Boston”) commenced proceedings in the
Superior Court of Massachusetts against numerous sponsors, issuers and underwriters of residential mortgagebacked securities (“MBS”), and their controlling persons, including certain of Nomura’s U.S. subsidiaries. The
action alleges that FHLB-Boston purchased residential MBS issued by a Nomura subsidiary for which theoffering materials contained untrue statements or omitted material facts concerning the underwriting standards
used by the original lenders and the characteristics of the loans underlying the securities. FHLB-Boston seeks
rescission of its purchases or compensatory damages pursuant to state law. FHLB-Boston alleges that itpurchased certificates in four offerings issued by a Nomura subsidiary but does not specify the amount of its
purchases or the amount of any alleged losses. Due to the lack of information at this stage of the litigation and theuncertainties involved, we cannot provide any meaningful estimate of its exposure to loss related to this matter atthis time.
We support the position of Nomura’s subsidiaries in each of these claims.
Certain Mortgage-Related Contingencies in the U.S.
Certain of Nomura’s subsidiaries in the U.S. securitized mortgage loans in the form of MBS. Thesesubsidiaries did not generally originate mortgage loans, but purchased mortgage loans from third-party loan
originators (the “originators”). In connection with such purchases, these subsidiaries received loan level
representations from the originators. Certain of the MBS issued by the subsidiaries were structured with credit
protection provided to specified classes of certificates by monoline insurers. In connection with thesecuritizations, the relevant subsidiaries provided loan level representations and warranties of the type generally
described below, which mirror the representations the subsidiaries received from the originators.
The loan level representations made in connection with the securitization of mortgage loans were generally
detailed representations applicable to each loan and addressed characteristics of the borrowers and properties.
The representations included, but were not limited to, information concerning the borrower’s credit status, theloan-to-value ratio, the owner occupancy status of the property, the lien position, the fact that the loan was
originated in accordance with the originator’s guidelines, and the fact that the loan was originated in compliancewith applicable laws.

84

The relevant subsidiaries have received claims demanding the repurchase of certain loans from trustees ofvarious securitization trusts, which the subsidiaries believe were made at the instance of one or more investors,
and from certificate insurers. Each claim received has been reviewed, and the subsidiaries have contested thoseclaims believed to be without merit or have agreed to repurchase certain loans (or to otherwise compensate theissuing trust) for those claims that the subsidiaries have determined to have merit.
In light of economic conditions and continuing defaults in residential mortgages, it is anticipated that therelevant subsidiaries may receive additional repurchase claims. Nomura’s exposure with respect to such claims
will be influenced by the following factors, among others: the number of loans in which there are provablebreaches of representations or warranties and fluctuations in unemployment and values in the residential realestate markets which affect the frequency of defaults and the loss severity for defaulting loans. This exposure
may be mitigated to the extent that the subsidiaries are able to pursue and collect from the originators for thoseloans in which there are provable breaches. As of May 31, 2011, the subsidiaries have received loan repurchaseclaims of $796 million that are unresolved. In light of the uncertainties involved, Nomura cannot provide any
meaningful estimate of its exposure to the existing unresolved demands or any additional breach of
representation claims at this time.
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, 2010.

85

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 lows2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Quarterly highs and lows2010
First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011
First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Monthly highs and lows2011 (calendar year)
January . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
April . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
June (through June 29) . . . . . . . . . . . . . . . . . . . . . . . . . .

New York Stock Exchange
Price Per Share of ADS
High
Low

2,870
2,580
1,918
934
717

1,843
1,395
403
498
361

24.30
21.05
17.89
9.50
7.67

15.63
13.08
3.96
5.35
4.75

934
850
717
783

498
522
515
631

9.50
9.01
8.02
8.58

5.03
5.79
5.80
6.97

717
522
536
557

482
403
395
361

7.67
6.07
6.43
6.75

5.43
4.75
4.77
4.84

556
557
526
436
422
410

493
495
361
401
376
368

6.75
6.68
6.37
5.15
5.21
5.02

6.00
6.08
4.84
4.75
4.64
4.61

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

86

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.
As a company organized under the Committee System of governance, the compensation of our Directors
and Executive Officers is determined by the Compensation Committee (see Item 6.C. above). The Compensation
Committee establishes the policy with respect to the determination of the individual compensation (including
variable compensation) of each of our Directors and Executive Officers and makes determinations in accordancewith that compensation policy.
With respect to borrowing powers, these as well as other powers relating to the management of the business(with the exception of certain exclusions specified under the Companies Act) have been delegated to the
Executive Officers by the Board of Directors also in accordance with our organization under the Committee
System.
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 a resolution of our Board of
Directors, release the liabilities of any Directors or Executive Officers to us for damages suffered by us due totheir 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
Outside Directors” under Item 6.C above.
87

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, no limitations on the rights of non-residents or foreign shareholders to hold or exercise voting
rights on our shares are imposed by law, our Articles of Incorporation or our other constituent documents.
Common Stock
The following describes material features of the shares of our common stock, and includes a brief overview
of the material provisions of our Articles of Incorporation and Share Handling Regulations, as currently in effect,
and of the Companies Act and related legislation. In this “Common Stock” section, unless the context otherwise
requires, “shares” means shares of our common stock and “shareholders” means holders of shares of ourcommon stock.
GeneralUnder our Articles of Incorporation, the authorized share capital is 6,000,000,000 shares, of which
3,719,133,241 shares were issued as of March 31, 2011. All issued shares are fully-paid and non-assessable.
On January 5, 2009, a new central clearing system for shares of Japanese listed companies was establishedpursuant to the Act on Book-Entry Transfer of Company Bonds, Shares, Etc. (including regulations promulgatedthereunder; 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 sharecertificates 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, they must have an account at an account managing institution unless such person has anaccount at 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 Book-Entry Law, and only those financial institutions that meet further stringent requirementsof the Book-Entry Law can open accounts directly at JASDEC. For purposes of the description under this“Common Stock” section, 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 in the transferee’s
account by 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 generally 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.
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.
88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.” As a company meeting the necessary requirements, the Companies Act allows for our Articles ofIncorporation to authorize our Board of Directors to make decisions regarding distributions of Surplus (with the
exceptions of certain exclusions specified under the Companies Act).
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 (but are not obligated to) make further distributions of Surplus by a resolution of our
Board of Directors. However, we equally may decide not to pay dividends for any given period, regardless of theamount of 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 to our shareholders the right 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 a 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 in accordance with an
ordinance of the Ministry of Justice.
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 sheets as of the end of the last fiscal year;“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);89

“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 goodwill 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-consolidated balance
sheets as of the end of the last fiscal year) all or certain part of such excess 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 sheets 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 sheets as of the end of the last fiscal year.
If we have prepared non-consolidated interim financial statements as described below, and if such interim
financial statements have been approved by the Board of Directors or (if so required by the Companies Act) by aresolution of a meeting of shareholders, the Distributable Amount must be adjusted to take into account theamount of profit or loss, and the amount of consideration for our treasury stock disposed of by us, during theperiod in respect of which such interim 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 endof the last fiscal year and an income statement for the period from the first day of the current fiscal year to thedate 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.
Stock Splits
We may at any time split the issued shares into a greater number of shares by a resolution of our Board of
Directors, and in accordance with the Companies Act, our Board of Directors has by a resolution delegatedpowers to make such stock splits to our EMB.
In accordance with the Companies Act, our Board of Directors has by a resolution delegated to our EMB,
powers to increase the number of authorized shares permitted to be issued up to the number reflecting the rate of90

stock splits and amend our Articles of Incorporation to this effect without approval by a resolution of a meetingof shareholders. For example, if each share became three shares by way of a stock split, we may increaseauthorized shares from the 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 a resolution of our Board of Directors, to reduce the number of shares which constitutes one unit or abolishthe unit share system, and amend our Articles of Incorporation to this effect without approval by a resolution of ameeting of shareholders.
Transferability of Shares Constituting 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 Constituting Less Than One Unit to Require Us to Purchase Its Shares.
A holder of shares constituting less than one unit may at any time request us to purchase its shares. Under the
new clearing system, such request must be made through the relevant account managing institution. These shares
will be purchased at (a) the closing price of our shares reported by the Tokyo Stock Exchange on the day when
the request to purchase is received by our share registrar or (b) if no sale takes 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. An amount equal to the applicable handling fee will be deducted from the price so determined
pursuant to our Share Handling Regulations.
Right of a Holder of Shares Constituting 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 constituting less than one unit may request us
to sell any shares we may have to such holder so that the holder can raise its fractional ownership up to a wholeunit. Under the new clearing system, such request must be made through the relevant account managing
institution. These shares will be sold at (a) the closing price of our shares reported by the Tokyo Stock Exchangeon the day when the request to sell is received by our share registrar or (b) if no sale has taken place on theTokyo Stock Exchange on that day, then the price at which sale of shares is effected on such stock exchange
immediately thereafter. An amount equal to the applicable handling fee will be added to the price so determined
pursuant to our Share Handling Regulations.
Voting Rights of a Holder of Shares Constituting Less Than One Unit. A holder of shares constituting 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 constituting less than one unit will be excluded from the numberof outstanding shares. A holder of shares representing one or more whole units will have one vote for each wholeunit represented.
A holder of shares constituting less than one unit does not have any rights related to voting, such as the rightto 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.
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 which includes 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,91

•

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 of each 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. A corporate shareholder having one-quarter or more of the total voting rights of which are directly or
indirectly held by us does not have voting rights. The Companies Act and our Articles of Incorporation require aquorum 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 voting in the election of Directors. Shareholders may exercise theirvoting 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” of ameeting 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,•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.
92

Subscription Rights
Holders of shares have no preemptive rights under our Articles of Incorporation when we issue new shares.
Under the Companies Act, our EMB, which has been delegated by our Board of Directors with the authority toissue new shares, may, however, determine that shareholders be given subscription rights in connection with aparticular issue of new shares. In this case, such rights must be given on uniform terms to all shareholders as of a
specified record date with 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 EMB, which has been delegated by our Board of Directors with the authority to issue stockacquisition rights, unless it is made under “specially favorable” conditions in which case a special resolution of
meeting of shareholders is required. In issuing stock acquisition 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 give such notice if we make relevant securities filing or reporting under the FIEA at least two
weeks prior to the date for allotment, subject to the requirements provided by the ordinance of the Ministry ofJustice.
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 (“Mitsubishi UFJ Trust”) is the share registrar for ourshares. 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 names and addresses of ourshareholders and other relevant information in our register of shareholders upon notice thereof from JASDEC, as
described in “Record Date” below.
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 fiscal 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.
93

The shares are generally traded ex-dividend or ex-rights in the Japanese stock exchanges on the second
business day prior to the record date (or if the record date is not a business day, the third 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 us that such other shareholder
be included as a seller in the proposed purchase, provided that no such right will be available if the purchaseprice or any other consideration to be received by the relevant specific shareholder will not exceed the higher of(x) the last trading price of the shares on the relevant stock exchange on the day immediately preceding the dateon 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 suchstock exchange thereafter) and (y) if the shares are subject to a tender offer on the day immediately preceding thedate on which the resolution mentioned in (ii) above was adopted, the price of the shares under the agreementwith respect to such tender offer on such day. This acquisition is subject to the condition that the aggregate
amount of the purchase price must 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 less than
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 description of material features of our preferred stock. The basic characteristics of ourpreferred stock are set forth in our Articles of Incorporation, and detailed terms and conditions of our preferredstock are to be determined prior to the issuance thereof by a resolution of our Board of Directors or by Executive
Officer(s) under authorities delegated by a resolution of our Board of Directors.
GeneralOur Articles of Incorporation include the possibility of issuing preferred stock. We have not yet issued, andcurrently have no specific plan to issue, any preferred stock; however we provide as follows some information on
the characteristics of the types of preferred stock set forth in our Articles of Incorporation.
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. Of these, Class 3 and Class 4 preferred stock are convertible into
common stock, while Class 1 and Class 2 preferred stock are not convertible into common stock. See “Right of
Shareholders of Preferred Stock to Demand Acquisition thereof (Conversion)” below.
Preferred Dividends
Under our Articles of Incorporation, preferred dividends may be paid to shareholders of preferred stock onrecord as of March 31 every year. In addition, interim preferred dividends may be paid to shareholders of ourpreferred stock on record as of June 30, September 30 or December 31 of any year. Dividends on preferred stock94

are to be paid always in priority to dividends on common stock. The detailed terms and conditions of each classof preferred stock, including the amount of preferred dividends or preferred interim dividends, are to be
determined by a resolution of our Board of Directors or by Executive Officer(s) under authorities delegated by aresolution of our Board of Directors prior to the time of issuance thereof, provided that the annual dividend rateapplicable to Class 1 and Class 2 preferred stock may not exceed 15%, and the annual dividend rate applicable toClass 3 and Class 4 preferred stock may not exceed 10%.
Notwithstanding the provisions of our Articles of Incorporation, no payment of any dividend on preferredstock may be made unless we have sufficient Surplus to pay such dividend, and each payment of a dividend on apreferred stock must be approved by our Board of Directors.
Dividends on our preferred stock are non-cumulative. In the event that preferred dividends were paid, andthe amount actually paid by us in respect of any fiscal year was less than the amount thereof payable in respect ofsuch fiscal year, preferred shareholders would have no right to seek payment of the deficient amount as acumulative preferred dividend in any subsequent fiscal year.
Shareholders of our preferred stock will not be entitled to any further dividends or other participation in or
distribution of Surplus.
Voting Rights
Any voting rights attached to our preferred stock are limited to the extent specifically provided under theCompanies Act, any other applicable laws and our Articles of Incorporation. Subject to the conditions statedtherein, the voting rights of our preferred stock as provided in our Articles of Incorporation are as follows:•

If no resolution to pay a preferred dividend has been passed by our Board of Directors prior to thedispatch of the convocation notice of the annual meeting of shareholders in respect of any fiscal year,
and if no proposal to pay such preferred dividend was submitted to the relevant annual meeting ofshareholders, then the shareholders of the relevant preferred stock will be entitled to vote at suchmeeting and all subsequent meetings of shareholders up to the time when our Board of Directors or
meeting of shareholders passes a resolution to pay such preferred dividend; and•If a resolution to pay a preferred dividend has not been adopted at any annual meeting of shareholders,
the shareholders of the relevant preferred stock will be entitled to vote at all subsequent meetings ofshareholders up to the time when our Board of Directors or meeting of shareholders passes a resolution
to pay such preferred dividend.

Liquidation Rights
In the event of our voluntary or involuntary liquidation, shareholders of our preferred stock would beentitled, in preference over shareholders of common stock, to receive such amounts of our residual assets as may
be determined by a resolution of our Board of Directors or by Executive Officer(s) under authorities delegated bya resolution of the Board of Directors taking into consideration the amounts of subscription moneys paid for therespective preferred stock.
Except as described above, shareholders of our preferred stock would not be entitled to receive distributionof residual assets upon our liquidation.
Right of Shareholders of Preferred Stock to Demand Acquisition thereof (Conversion)
Class 3 preferred stock and Class 4 preferred stock are attached with the right to demand that we acquire
such shares of preferred stock during a certain period. In the event of the exercise of such right, we shall be
required to deliver to the relevant shareholder a certain number of shares of our common stock in exchange for95the shares of the preferred stock acquired by us from such shareholder. Specific terms of such right, including theperiod during which the preferred stock would be acquired (a “conversion period”) and the initial acquisition
price (a “conversion price”), would be determined by a resolution of our Board of Directors or by Executive
Officer(s) under authorities delegated by a resolution of the Board of Directors.
Our Right and Obligation to Acquire Preferred Stock
Upon the occurrence of such event or on such date as may be determined by a resolution of our Board of
Directors or by Executive Officer(s) under authorities delegated by a resolution of the Board of Directors prior to
the issuance of any of Class 1 preferred stock, Class 2 preferred stock and/or Class 4 preferred stock, we shallhave the right to acquire all or any part of the relevant shares of preferred stock. In the event we exercised suchright, we would deliver to the relevant shareholder a certain amount of cash in exchange for the shares of thepreferred stock acquired by us from such shareholder. The initial acquisition price at which the relevant preferredstock would be acquired by us would be determined prior to the time of issuance thereof by a resolution of our
Board of Directors or by Executive Officer(s) under authorities delegated by a resolution of the Board of
Directors taking into consideration the amount of subscription moneys paid for the relevant preferred stock.
With respect to Class 3 preferred stock and Class 4 preferred stock, we shall have the obligation to acquire
all shares of such preferred stock outstanding on the day immediately following the last day of the relevant
conversion period. In such event, we would deliver to the relevant shareholders a certain number of shares of ourcommon stock in exchange for the shares of the preferred stock acquired by us from them. The number of sharesof our common stock so to be delivered to a shareholder of the relevant preferred stock would be calculated bymultiplying the number of shares of the preferred stock held by such shareholder by the amount of thesubscription moneys per share paid for such preferred stock and dividing the resultant amount by the market
price of a share of our common stock at the time.
Pursuant to amendments to our Articles of Incorporation approved at our annual meeting of shareholders on
June 28, 2011 the following feature has been added to the preferred stock described in our Articles ofIncorporation. We shall have the obligation to acquire all or any part of shares of Class 1 preferred stock, Class 2
preferred stock, Class 3 preferred stock and/or Class 4 preferred stock upon the occurrence of certain events
determined by a resolution of our Board of Directors or by Executive Officer(s) under authorities delegated by aresolution of the Board of Directors (including the event that the Company’s capital adequacy ratio or othermeasure of regulatory capital falls below a pre-determined threshold, and/or the event that a supervisory agency(or an equivalent body) determines that a write-down, capital injection by a public institution or other equivalentaction is necessary for the Company) prior to the time of issuance of the relevant preferred stock. In such event,
we would deliver to the relevant shareholders a certain number of shares of our common stock in exchange forthe shares of the preferred stock acquired by us from them. The number of our common stock so to be delivered
to a shareholder of the relevant preferred stock would be determined prior to the issuance of such preferredshares by a resolution of our Board of Directors or by Executive Officer(s) considering the subscription price ofthe preferred shares, the market value of the Company’s common stock and market conditions. An upper limit
for the common stock to be delivered in exchange for the relevant preferred shares may also be set pursuant tosuch resolution or determination
Order of Priority
Class 1 through Class 4 preferred stock shall have 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 will be in priority to our common stock in respect of the payments of dividends and interim
dividends and the distribution of residual assets.
Report of Substantial Shareholdings
The FIEA 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
96

Finance Bureau, within five business days, a report concerning those shareholdings. With certain exceptions, asimilar report must also be filed to reflect any change of 1% or more in the above shareholding or any change inmaterial matters set out in any previous filed reports. Copies of any reports must also be furnished to thecompany. For this purpose, shares issuable to a person upon exercise of stock acquisition rights are taken into
account in determining both the number of shares held by that holder and the company’s total issued sharecapital.
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.
On June 29, 2011, the closing price of our shares on the Tokyo Stock Exchange was ¥397 per share. The
following table shows the daily price limit for a stock on the Tokyo Stock Exchange with a closing price ofbetween ¥200 and ¥499 per share, as well as the daily price limit if our per share price were to rise to between¥500 and ¥699, ¥700 and ¥999, and ¥1,000 and ¥1,499, or fall to between ¥100 and ¥199. 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 thanEqual to or greater thanEqual to or greater than

¥ 100
200
500
700
1,000

Less thanLess thanLess thanLess thanLess thanMaximum Daily Price Movement

¥ 200
500
700
1,000
1,500

¥ 50
80
100
150
300

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.

97

D. Exchange Controls.
Acquisition of Shares
The Foreign Exchange and Foreign Trade Law of Japan (“Foreign Exchange Law”) governs certain aspects
relating to the acquisition and holding of securities by “non-residents of Japan” and “foreign investors”, asdefined 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 a resultof this acquisition directly or indirectly holds 10% or more of the issued shares of such company, together with its
existing holdings and those of other parties who have a special relationship with that foreign investor, the foreign
investor is, in general, required to report the acquisition to the Minister of Finance and any other competent
ministers via the Bank of Japan on or prior to the 15th day of the immediately following month in which the date ofacquisition falls. 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 as (i) individuals who are not resident in Japan, (ii) corporations
which are organized under the laws of foreign countries or whose principal offices are located outside Japan, and(iii) corporations of which (a) 50% or more of the voting rights are held directly or indirectly by (i) and/or(ii) above, (b) a majority of officers consists of non-residents of Japan or (c) a majority of officers having the powerof representation consists of non-residents of Japan.
Dividends and Proceeds of Sale
Under the Foreign Exchange Law, dividends paid on, and the proceeds of sales in Japan of, shares held by
non-residents of Japan may in general be converted into any foreign currency and repatriated abroad. Under theterms 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 U.S.,
to convert all cash dividends that it receives in respect of deposited shares into dollars and to distribute the amountreceived (after deduction of applicable withholding taxes) to the holders of ADSs.
E. Taxation.
U.S. Federal Income Taxation
This section describes the material U.S. 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 an offeringand you hold your shares or ADSs as capital assets for tax purposes. This section does not apply to you if you area 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,98•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 U.S. and Japan (the “Japan-U.S. Tax Treaty”). These laws are subject to change,
possibly on a retroactive basis. In addition, this section is based in part upon the representations of The Bank of
New York Mellon and the assumption that each obligation in the deposit agreement and any related agreement
will be performed in accordance with its terms.
If a partnership holds the shares or ADSs, the U.S. federal income tax treatment of a partner will generally
depend on the status of the partner and the tax treatment of the partnership. A partner in a partnership holding theshares or ADSs should consult its tax advisor with regard to the U.S. federal income tax treatment of aninvestment in the shares or ADSs.
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 U.S.,•a corporation created or organized in or under the laws of the U.S. or any political subdivision thereof,•an estate whose income is subject to U.S. federal income tax regardless of its source, or•a trust if a U.S. court can exercise primary supervision over the trust’s administration and one or more
U.S. persons are authorized to control all substantial decisions of the trust.

You should consult your own tax advisor regarding the U.S. federal, state, local and other tax consequences ofowning and disposing of shares and ADSs in your particular circumstances.
This discussion addresses only U.S. federal income taxation.
In general, and taking into account the earlier assumptions, for U.S. 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 ofshares for ADRs, and ADRs for shares, generally will not be subject to U.S. federal income tax.
Taxation of Dividends
Under the U.S. 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 andprofits (as determined for U.S. federal income tax purposes) is subject to U.S. federal income taxation. If you area noncorporate U.S. holder, dividends paid to you in taxable years beginning before January 1, 2013 that
constitute qualified dividend income will be taxable to you at a maximum tax rate of 15% provided that you holdthe shares or ADSs for more than 60 days during the 121-day period beginning 60 days before the ex-dividend
date and meet other holding period requirements. Dividends we pay with respect to the shares or ADSs generally
will be qualified dividend income. You must include any Japanese tax withheld from the dividend payment inthis 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 U.S. corporations in respect of dividends received from other U.S. corporations. The amount99

of the dividend distribution that you must include in your income as a U.S. holder will be the U.S. dollar value of
the Japanese yen payments made, determined at the spot Japanese yen/U.S. dollar rate on 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 the period from the date you
include the dividend payment in income to the date you convert the payment into U.S. dollars will be treated asordinary income or loss and will not be eligible for the special tax rate applicable to qualified dividend income.
The gain or loss generally will be income or loss from sources within the U.S. for foreign tax credit limitation
purposes. Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal
income tax purposes, will be treated as a non-taxable return of capital 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 Japan-U.S. Tax Treaty andpaid over to Japan will be creditable against your U.S. 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 Japan-U.S. Tax Treaty, theamount of tax withheld that is refundable will not be eligible for credit against your U.S. federal income tax
liability.
For foreign tax credit purposes, dividends will generally be income from sources outside the U.S., and,depending on your circumstances, will generally be “passive income” or “general income” for purposes ofcomputing the foreign tax credit allowable to you.
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 U.S. 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 is generally taxed at preferential rates
where the property is held for more than one year. The gain or loss will generally be income or loss from sources
within the U.S. for foreign tax credit limitation purposes.
PFIC Rules
We do not expect our shares and ADSs to be treated as stock of a PFIC for U.S. federal income tax
purposes, but this conclusion is a factual determination that is made annually and thus may be subject to change.
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, and100•

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 will betaxed as ordinary income,•the amount allocated to each previous year, with certain exceptions, will be taxed at the highest tax ratein effect 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.
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.
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 a PFIC. For purposes of this rule, if you make amark-to-market election with respect to your shares or ADSs, you will be treated as having a new holding period
in your shares or ADSs beginning on the first day of the first taxable year beginning after the last taxable year forwhich the mark-to-market election applies.
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. Dividends that you 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 U.S. 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 with respect to you, 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 (“non-resident shareholder”) without a permanent101

establishment in Japan to which the relevant 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 specific investors 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.
Conversion of retained earnings or legal reserve (but other than additional paid-in capital, in general) into statedcapital on a non-consolidated basis is not characterized as a deemed dividend for Japanese tax purposes, andtherefore such a conversion does not trigger Japanese withholding taxation (Article 2(16) of the JapaneseCorporation Tax Law and Article 8(1)(xiii) of the Japanese Corporation Tax Law Enforcement Order).
Unless an applicable tax treaty, convention or agreement reducing the maximum rate of withholding tax
applies, the rate of Japanese withholding tax applicable to dividends on listed shares such as those paid by us to
non-resident shareholders is currently 7%. This rate is applicable for dividends due and payable on or before
December 31, 2011, and after December 31, 2011, a 15% rate will apply, except for dividends paid to any
individual shareholder who holds 5% or more of the issued shares for which the applicable rate is 20% (please refer
to Article 182(2) of the Japanese Income Tax Law and Article 9-3(1)(i) of the Japanese Special Tax Measures Law
including its relevant temporary provision for these withholding rates). However, the foregoing will change if the2011 tax reform proposal, which was released by the Japanese government on December 16, 2010, comes into
effect (“the 2011 Tax Reform Proposal”). Under the 2011 Tax Reform Proposal, an extension of the current 7% rateuntil December 31, 2013 is proposed, and 15% rate will apply from January 1, 2014, except for dividends paid to
any individual shareholders who holds 3% or more of the issued shares for which the applicable rate is 20% (thelowering of threshold is intended to be effective on or after October 1, 2011). However, the legislation of such 2011
Tax Reform has been delayed and the provisions of the reform may further be changed.
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, Belgium, Canada, Denmark,Finland, Germany, Ireland, Italy, Luxembourg, the Netherlands, New Zealand, Norway, Singapore, Spain,
Sweden and Switzerland. Under the Japan-U.S. Tax Treaty, the withholding tax rate on dividends is 10% forportfolio investors, provided that they do not have a permanent establishment in Japan, or if there is a permanentestablishment, the shares with respect to which such dividends are paid are not effectively connected with suchpermanent establishment, and that they are qualified U.S. residents eligible to enjoy treaty benefits. It shall be
noted that, under the Japan-U.S. Tax Treaty, withholding tax on dividends to be paid is exempt from Japanesetaxation by way of withholding or otherwise for pension funds which are qualified U.S. residents eligible toenjoy treaty benefits unless such dividends are derived from the carrying on of a business, directly or indirectly,
by such pension funds (please refer to Article 10(3)(b) of the Japan-U.S. Tax Treaty). In addition to the JapanU.S. Tax Treaty, Japan currently has income tax treaties, whereby the withholding tax rate on dividends is also
reduced from 15% to 10% for portfolio investors, with, among others, the U.K., France and Australia due to thetreaty renewals. Furthermore, renewal of tax treaties (among others, the one between the Netherlands and Japanand the one between Switzerland and Japan) is currently scheduled under which the standard treaty withholding
rate for portfolio investors on dividends will 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
102

regarding Relief from Japanese Income Tax on Dividends in advance through us, which is the case for ADS
holders, or (in cases where the relevant withholding taxpayer for the dividend payment is not us but a financial
institution in Japan) through the financial institution, to the relevant tax authority before payment of dividends.
Non-resident shareholders who do not submit an application in advance will be entitled to claim the refund ofwithholding 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 Tax 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 the domestic tax rate is still applicable. Consequently, if the domestic tax rate still applies, notreaty application is required to be filed.
Gains derived from the sale of shares outside Japan by a non-resident shareholder without a permanentestablishment in Japan 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.
You should consult your own tax advisors regarding the Japanese tax consequences of the acquisition,
ownership and disposition of the shares and ADSs in your particular circumstances.
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 U.S. at 1-800-SEC-0330. You can also access to the documents filed via theElectronic 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
The business activities of Nomura are exposed to various risks such as market risk, credit risk, operationalrisk and other risks caused by external factors. We have established a risk management framework to provide
comprehensive controls, monitoring and reporting of these risks in order to maintain financial soundness and our
corporate values.
103

Global Risk Management Structure
Governance
The Board of Directors has established the “Structure for Ensuring Appropriate Business of Nomura
Holdings, Inc.” defining basic principles and establishing framework for the management of risk of loss. In
addition, they are continuously making efforts to improve, strengthen and develop our risk management
capabilities under this framework. The Group Integrated Risk Management Committee (“GIRMC”), upondelegation of the EMB, has established the “Integrated Risk Management Policy”, describing our overall risk
management framework including the fundamental principles concerning risk management and organization andthis is under continuous improvement.
Basic Principles of Risk Management
We define risks as (i) the potential erosion of Nomura Group’s capital base due to unexpected losses frombusiness operations, (ii) the potential lack of access to funds due to deterioration of the Nomura Group’s
creditworthiness or deterioration in market conditions, and (iii) the potential failure of revenues to cover
expenses due to the deterioration of the earnings environment or deterioration of efficiency or effectiveness ofbusiness operations.
It is a fundamental principle that all Directors, Executive Managing Directors, Senior Managing Directors,
Corporate Auditors and employees of Nomura regard themselves as principals of risk management andappropriately manage risks arising in the course of day-to-day business operations. At the same time, we practiceprudent risk management at an individual entity level within the group and also identifies, evaluates andappropriately manages risks within each of the business departments, risk management departments and internal
audit departments, each and all.
Fundamental Policy of Risk Management
Our fundamental policy concerning risk management is to control risks arising in the course of business
operations to the confines of the company’s risk appetite, which is clearly established based on risk tolerance inline with group-wide business strategy, business targets, management strength and financial base. We endeavor
to impregnate this appetite into actual business operations.
Our risk appetite consists of quantitative and qualitative factors. Targets are set for such quantitative factors
as capital adequacy, liquidity and profitability. Targets also set for such qualitative factors as Zero Tolerance
Risk, which are risk that Nomura shall tolerate to no extent whatsoever, and for Minimum Tolerance Risk, which
is a risk that we may tolerate to a limited extent in consideration of profit potential, risk mitigation methods,
monitoring capability and other factors, respectively.
We endeavor to measure risks using quantitative methods to the greatest extent possible and to continually
improve its risk measurement methods. We use economic capital, for the risks measured by quantitative methods
collectively and uses this as the principal reference for assessment of capital adequacy, capital allocation and risk
management. When evaluating risks by quantitative methods, we conduct stress testing as a complementarymeasure to analyze and evaluate the potential impact of each type of risk on our capital base.

104

Risk Management Organizations
The organizational structure and core bodies tasked with risk management in Nomura are shown in thefollowing chart.

Executive Management Board
The EMB deliberates on and determines our management strategy, allocation of management resources andimportant management matters of Nomura by promoting the effective use of management resources andexecution of business with the unified objective to contribute to increasing of shareholder value.
Group Integrated Risk Management Committee
The GIRMC deliberates on and determines important matters concerning integrated risk management of
Nomura upon delegation by the EMB for contributing to the sound and effective management of the business.
The GIRMC is a core organization for group-wide risk management and establishes our risk appetite and theframework of integrated risk management in accordance with the risk appetite.
Chief Risk Officer
The Chief Risk Officer (“CRO”) is responsible for supervising the Risk Management Department andmaintaining the effectiveness of the risk management framework independently from the business units within
Nomura. The CRO not only regularly reports on the status of our risk management to the GIRMC, but also
reports to and seeks the approval of the GIRMC on measures required for risk management.
Chief Financial Officer
The CFO has the operational authority and responsibility over our liquidity management. Liquidity risk
management policy is based on risk appetite which the GIRMC formulates. Our primary objective for liquidity
risk management 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.
105

Risk Management Unit
The Risk Management Unit is defined as collectively the Group Risk Management Department anddepartments or units in charge of risk management established independently from the business units of Nomura
entities. The Risk Management Department is responsible for establishing and operating risk management
processes, establishing and enforcing risk management policies and regulations, verifying the effectiveness ofrisk management methods, gathering reports from Nomura entities, reporting to Executive/Senior Managing
Directors and the GIRMC and others and also reporting to regulatory bodies and handling of regulatory
applications concerning risk management methods and other items.
Classification and Definition of Risk
We classify and define risks as follows and have established departments or units to manage each risk type.
Risk Category

Summary Description

Market Risk

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

Credit Risk

Risk of losses arising from decrease or disappearance of asset values (including
off-balance sheet items) due to deteriorations in creditworthiness or default of an obligor
or counterparty.

Country Risk

Risk caused about by a country’s political, economic, legal, conventional, religious orother characteristics inherent to the country or risk of losses arising from changes in acountry’s situation due to a change of regime, decrease in predictability and stability ofpolitical measures, economic downturn or social turmoil.

Operational Risk

Risk of loss associated with inadequate or failed internal processes, people and systems
or from external events.

System Risk

Within Operational Risk, risk of losses due to system defects including, but not limited
to computer crash or malfunction, or risk of losses due to unauthorized use ofcomputers.

Liquidity Risk

Risk of losses arising from difficulty in securing necessary funding or from asignificantly higher cost of funding than normal levels due to deterioration of ourcreditworthiness or deterioration in market conditions.

Business Risk

Risk of failure of revenues to cover costs due to deterioration in the earnings
environment or deteriorations in the efficiency or effectiveness of business operations.

Market Risk
We define market risk as potential loss in the value of an asset resulting from changes in market prices,rates, indices, volatilities, correlations or other market factors. This type of risk primarily impacts our trading
activities. Effective management of this risk requires the ability to analyze a complex and constantly changing
global market environment, identify problematic trends and ensure that appropriate action is taken in a timely
manner. Our principle statistical measurement tool to assess and limit market risk on an ongoing basis is
Value-at-Risk (“VaR”). Limits on VaR are set in line with the firm’s risk appetite as expressed through economic
capital. In addition to VaR, we use stress testing and scenario analysis to measure and analyze our market risk.
Market risk is monitored against a set of approved limits, with daily reports delivered to senior management.

106

Value-at-Risk
VaR is the potential loss in the value of our trading positions due to adverse movements in markets over adefined 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 in the VaR model include
equity prices, interest rates, foreign exchange rates, and associated volatilities and correlations. The historical
data to calculate volatilities and correlations is weighted to give greater importance to more recent observations.
VaR Methodology, Assumptions and Limitations. We make a number of assumptions and approximations inrelation to 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 tables show our VaR as of each of the dates indicated for substantially all of our trading
positions:
As ofMar. 31, Apr. 30, May 31, Jun. 30, Jul. 30, Aug. 31, Sep. 30, Oct. 29, Nov. 30, Dec. 31, Jan. 31, Feb. 28, Mar. 31,
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2011
2011
2011
(in 100 millions of Yen)

Equity . . . . . . . . . . . . . . . . . . . . . ¥ 26.2 ¥ 30.3 ¥ 24.6 ¥ 19.8 ¥ 18.5 ¥ 20.1 ¥ 21.7 ¥ 16.8 ¥ 16.5 ¥ 20.9 ¥ 24.8 ¥ 23.2 ¥ 17.8
Interest Rate . . . . . . . . . . . . . . . .
43.6
47.8
35.8
41.9 45.0
45.4
45.8
46.7
44.3
43.5
40.0
39.7
40.8
Foreign Exchange . . . . . . . . . . . . 105.4
95.4
81.3
76.2 73.9
65.7
66.7
67.2
59.2
50.8
48.1
45.8
45.3
Sub-total . . . . . . . . . . . . . . . . . . .
Less:Diversification Benefit . . . .

175.3

173.5

141.7

137.9 137.4

131.1

134.1

130.7

120.0

115.2

112.9

108.7

104.0

(49.7)(49.5) (38.6) (43.6) (42.1) (45.0) (39.8) (42.6) (41.5) (40.6) (46.3) (44.1)(41.2)

VaR . . . . . . . . . . . . . . . . . . ¥125.5 ¥123.9 ¥103.1 ¥ 94.3 ¥ 95.4 ¥ 86.1 ¥ 94.3 ¥ 88.1 ¥ 78.5 ¥ 74.6 ¥ 66.7 ¥ 64.6 ¥ 62.8
VaR
(maximum)(average)(minimum)¥136.2 : April 16, 2010
91.4 : Average for the period from April 1, 2010 to March 31, 2011
60.0 : March 11, 2011
As ofMar. 31, Apr. 30, May 30, Jun. 30, Jul. 31, Aug. 31, Sep. 30, Oct. 30, Nov. 30, Dec. 31, Jan. 29, Feb. 26, Mar. 31,
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2010
2010
2010
(in 100 millions of Yen)

Equity . . . . . . . . . . . . . . . . . . . . . ¥ 37.9 ¥ 29.0 ¥ 23.1 ¥ 44.3 ¥ 26.1 ¥ 39.0 ¥ 26.4 ¥ 22.0 ¥ 25.6 ¥ 28.5 ¥ 25.8 ¥ 20.6 ¥ 26.2
Interest Rate . . . . . . . . . . . . . . . .
67.0
36.7
52.2
39.9 47.7
40.1
34.2
54.5
40.1
62.6
41.6
41.1
43.6
Foreign Exchange . . . . . . . . . . . .
86.6
95.2 116.8 120.9 117.6 111.5 109.2 126.8 112.2 112.3 109.3 106.8 105.4
Sub-total . . . . . . . . . . . . . . . . . . .
Less:Diversification Benefit . . . .

191.5

160.8

192.1

205.1 191.4

190.6

169.9

203.3

177.9

203.5

176.7

168.5

175.3

(74.8)(54.9) (66.3) (71.4) (61.0) (70.7) (51.7) (57.4) (53.7) (66.3) (49.1) (45.1)(49.7)

VaR . . . . . . . . . . . . . . . . . . ¥116.6 ¥106.0 ¥125.8 ¥133.7 ¥130.4 ¥119.9 ¥118.2 ¥145.9 ¥124.2 ¥137.2 ¥127.7 ¥123.4 ¥125.5
VaR(maximum)(average)(minimum)¥151.6 : October 16, 2009127.1 : Average for the period from April 1, 2009 to March 31, 201098.8 : April 28, 2009

Overall VaR has decreased since March 31, 2010. VaR relating to equity risk decreased from ¥2.62 billion
at the end of March 2010 to ¥1.78 billion at the end of March 2011 mainly due to a reduction in equity related
volatility. VaR relating to interest rate risk decreased from ¥4.36 billion at the end of March 2010 to ¥4.08 billion
at the end of March 2011 mainly due to a reduction in interest rate related positions. VaR relating to foreignexchange risk decreased from ¥10.54 billion at the end of March 2010 to ¥4.53 billion at the end of March 2011
mainly due to a reduction in foreign exchange volatility.
107

In the preceding year, VaR relating to equity risk decreased from ¥3.79 billion at the end of March 2009 to¥2.62 billion at the end of March 2010 mainly due to a reduction in equity related volatility. VaR relating tointerest rate risk decreased from ¥6.70 billion at the end of March 2009 to ¥4.36 billion at the end of March 2010
mainly due to a reduction in interest rate related positions. VaR relating to foreign exchange risk increased from¥8.66 billion at the end of March 2009 to ¥10.54 billion at the end of March 2010 mainly due to a rise in foreignexchange volatility.
Back-Testing
We compare VaR values with the actual profits 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 implement any necessary adjustments to the VaR
methodology.
Other Measures
In some business lines or portfolios we use additional measures to control or limit risk taking activity. These
measures include sensitivity analysis which show the potential changes to a portfolio due to standard moves inmarket risk factors. Metrics and limits of this type are typically specific to asset types, businesses or strategies
and are used to complement VaR and economic capital measures.
Stress Testing
Stress testing represents the potential loss on a portfolio due to the impact of applying a severe yet feasible
scenario. We have a comprehensive program of stress testing in place ranging from global cross risk classscenarios, such as the ‘Severe Market and Economic Downturn’ and ‘Severe Rates Rise’ used to limit risks
against risk appetite at the overall group level, to desk level scenarios/grids designed to limit risks within
individual business lines. Stress results are compared and used in conjunction with our economic capital
measures. We continue to invest in the development of analysis tools, systems and global team of Risk and Risk
IT professionals dedicated to stress testing.
Model Review
Pricing models are used to generate trade valuations and the risk measurement metrics for the managementof positions. The Global Model Validation Group validates the appropriateness and consistency of these models,
independent of those who design and build the models. As part of this process, the Global Model Validation
Group analyzes a number of factors to assess the model’s suitability for the valuation and risk management of aparticular 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 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 ¥13,196 million as of March 31, 2010 and ¥14,051 million as of108

March 31, 2011. The TOPIX closed at 978.81 points as of March 31, 2010 and at 869.38 points as of March 31,
2011. 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 pricefluctuations of individual equities.
Credit Risk
Nomura defines credit risk as risk of losses arising from decrease or disappearance of asset values(including off-balance sheet items) due to deterioration in creditworthiness or default of an obligor.
For controlling credit risk appropriately, we have established basic principles in our Credit Risk
Management Policy, a basic policy concerning credit risk management, which are important to meet the various
needs of our clients whilst taking appropriate risks and ensuring sufficient returns to increase our corporate
values. Under these basic principles, we have established a robust and comprehensive credit risk management
framework.
We have been applying the Foundation Internal Rating-Based Approach in calculating credit risk weighted
assets for regulatory capital calculations since the end of March 2011. However, the Standardized Approach isstill applied to certain business units or asset types, which are considered immaterial to the calculation of credit
risk weighted assets.
Credit Risk Management Framework
Under the credit risk management framework, the GIRMC, upon delegation by the EMB, deliberates on anddetermines important matters concerning integrated risk management of Nomura and accordingly has established
important principles concerning credit risk management as described in the Credit Risk Management Policy andother documents. The Global Risk Management Committee, upon delegation by the GIRMC, deliberates on anddetermines important matters concerning our credit risk management based on strategic risk allocation and risk
appetite as determined by the GIRMC.
We have established an organizational structure with an appropriate mutual supervision system ofcheck-and-balances under the CRO. The Credit Department, which is independent from the business units,
conducts credit analysis, internal rating assignment, monitoring of credit risk profiles including credit
concentration risk and others. Also, the Credit Risk Control Unit (the “CRCU”), also independent from thebusiness units and Credit Department, establishes and maintains procedures and standards, monitoring
operations, validation and others items for the Internal Rating System.
The Internal Audit Department, independently from these departments, audits the adequacy of credit risk
management.
Method of Credit Risk Management
Internal Rating System
We have established an Internal Rating System to be a unified, exhaustive and objective framework toreasonably evaluate credit risk. Internal ratings consist of obligor ratings, which represent an assessment of an
obligor’s creditworthiness and facility ratings, which represent an assessment of potential unrecoverable loss fora facility in default. Internal ratings are classified into 20 grades, which consist of 17 non-default grades and 3
default grades based on creditworthiness.
Obligor ratings are assigned in principle to obligors who fall into the scope of the credit risk weighted assets
calculation. In order to appropriately reflect the creditworthiness of obligors, obligor ratings are not only109

reviewed periodically at least once a year, but also are reviewed as soon as a significant change in thecreditworthiness of the obligor is identified. The Credit Department, functionally independent from the business
units, is responsible for assigning internal ratings in order to ensure the sound process of rating assignment. The
CRCU functionally independent from business units and the Credit Department, is responsible for validating theappropriateness of Internal Rating System at least once a year. In addition, the Internal Audit Department,
independent from all other divisions is responsible for auditing the appropriateness of the overall Internal Rating
System, as part of Internal Audit’s review of credit risk management.
Management of individual credit exposures
Our main type of credit risk assets are counterparties faced through derivatives transactions or securities
financing transactions (“derivatives in this section.”).
Credit exposures against counterparties are managed by means of setting credit limits, basing upon credit
analysis of individual obligors. For risk monitoring after transactions, credit limits are managed through the daily
calculation of potential credit exposures up to maturity, as well as monitoring the actual creditworthiness of
obligors with adequate frequency, based upon which obligor ratings and credit limits are updated.
Credit Risk Mitigation Techniques
We enter into International Swap and Derivatives Association, Inc. (“ISDA”) master agreements orequivalent agreements (called “Master Netting Agreements”) with many of its derivatives counterparties. Master
Netting Agreements provide protection to reduce losses potentially incurred by a counterparty default.
In addition, to reduce losses potentially incurred by a counterparty default, Nomura requires collateral tomitigate exposure, principally cash or highly liquid bonds, including U.S. and Japanese government securities,
when necessary.
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 of 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.
110

As we mentioned previously, we enter into Master Netting Agreements with many of our derivative
counterparties. Master Netting Agreements provide protection to reduce our risks of counterparty default and, insome cases, offset our consolidated balance sheet exposure with the same counterparty and provide a moremeaningful presentation of 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 whennecessary.
The credit exposures in our trading-related derivatives as of March 31, 2011 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.

Credit Rating

Less than
1 YearYears to Maturity
1 to 3 3 to 5 5 to 7
Years Years Years

More than
7 Years

Cross-Maturity
Netting(1)Total
Fair Value(a)

CollateralObtained(b)

Replacement
Cost(a)-(b)(in billions of Yen)

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

¥

2
133
189
63
13
112

¥ 14
214
285
44
14
27

¥ 30
252
308
72
13
42

¥ 14
177
245
89
18
32

¥

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

512
367

598
216

717
45

575
5

Total . . . . . . . . .

¥879

¥814

¥762

¥580

79
409
580
175
112
69

¥

(67)
(894)
(1,197)
(194)
(16)
(191)

¥

1,424
1

(2,559)(410)¥1,425¥(2,969)

72
291
410
249
154
91

¥

0
30
125
11
23
65

¥

72
261
285
238
131
26

1,267
224

254
—

1,013
224

¥1,491¥254¥1,237(1) This item represents netting of payable balances with receivable balances for the same counterparty acrossmaturity 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 inaccordance with ASC 210-20 “Balance Sheet—Offsetting” are included.
(2) “Other” does not necessarily indicate that the counterparties’ credit is below investment grade.
Operational Risk
Overview of Operational Risk Management
Nomura defines operational risk as the risk of loss associated with inadequate or failed internal processes,
people, and systems or from external events. This is an industry standard definition based on the BaselCommittee on Banking Supervision definition of operational risk.
The GIRMC has approved the Nomura Global Operational Risk Management Policy, which defines thefundamental policy and framework for operational risk management across Nomura Group in order to meetbusiness and regulatory needs. This Policy is supported by further minimum standards and procedures to clearly
set out a consistent framework for the management of operational risk.
Operational Risk Principles
We adopt the industry standard “Three Lines of Defence” for the management of operational risk,
comprising the following elements:
1)

1st Line of Defense: The business which owns and manages its risks

2)

2nd Line of Defense: The Operational Risk Management (“ORM”) function, which defines andco-ordinates the operational risk strategy and framework
111

3)

3rd Line of Defense: Internal and External Audit, who provide independent assurance

4)

The Governing Body: The GIRMC, with delegated authority from the EMB, which provides formal
oversight

This ensures appropriate oversight and independent review and challenge of operational risk management
throughout the company.
Operational Risk Management Framework
We have established an operational risk management framework comprising certain key products, services
and processes. This framework is shown below:
Infrastructure of the framework•

Policy framework: Sets minimum standards for operational risk and details how to monitor adherence tothese standards•

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

Products and Services•

Scenario analysis: Process to identify high impact, low probability ‘tail events’•Event reporting: Process to obtain information on and learn from actual events impacting on thecompany and relevant external events•

Key Risk Indicators (“KRI”): Metrics which allow monitoring of certain key operational risks•

Risk and Control Self Assessment (“RCSA”): Process to identify key risks, controls and action plans

Outputs•

Analysis and reporting: Key aspect of ORM role to analyze and report on ORM information and workwith business to develop actions•

Operational risk capital calculation: Calculate operational risk capital under Basel II provisions

Operational Risk Classification
We use the standard Basel II event type as operational risk classifications (namely, Internal Fraud, External
Fraud, Employee Practices and Workplace Safety, Clients, Products & Business Practices, Damage to Physical
Assets, Business Disruption and System Failures and Execution, Delivery & Process Management).
Basel II regulatory capital calculation for operational risk
We use The Standardized Approach (“TSA”) for calculating regulatory capital for operational risk. This
involves using the three years average of gross income, allocated to business lines and multiplied by a fixed
percentage determined by the FSA, to establish the amount of required operational risk capital.

112

We use consolidated net revenue as gross income. Gross income allocation is performed by mapping the net
revenue of each given segment from management accounting data to each business line in accordance with thecategories:
Business Line

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

Description

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

Beta
Factor

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

•

Nomura then calculates capital for every business line by multiplying respectively allocated annual
gross income by the corresponding factors set out above. Any unallocable gross income is multiplied bya fixed percentage of 18%.

•

The total Operational Risk capital is calculated as the three-year average of the simple summation of theamounts across each of the business lines and unallocable value in each year. However, where theaggregated amount within a given year is negative, then the input to the numerator for that year shall be
zero.

•

In any given year, negative numbers in any business line shall offset positive numbers in other businesslines. However, negative numbers in unallocable value shall not offset positive numbers in otherbusiness lines and shall be treated as zero.

Item 12. Description of Securities Other Than Equity Securities
A. Debt Securities
Not applicable.
B. Warrants and Rights
Not applicable.
C. Other Securities
Not applicable.

113

D. American Depositary Shares
Fees payable by ADR Holders
The following table shows the fees and charges that a holder of our ADR may have to pay, either directly or
indirectly:
Type of Services:

Amount of Fee (U.S. Dollars)

Taxes and other governmental charges

As applicable. The depositary may offset any
taxes or governmental charges it is obligated towithhold, if applicable, against the proceedsfrom sale of the property received.

Transfers of NHI shares to or from the name of the depositary(or its nominee) or the Custodian (or its nominee) inconnection with deposits or withdrawals

Such registration fees as may be in effect for
the registration of transfers of the NHI shares
on NHI’s share register (or any entity that
presently carries out the duties of registrar)

Cable, telex and facsimile transmission expenses

As applicable

Expenses incurred by the depositary in the conversion offoreign currency

As applicable

Execution and delivery of Receipts in connection with deposit,
stock split, exercise of subscription rights$5.00 or less per 100 ADSs (or portion thereof)

Surrender of Receipts in connection with withdrawal or
termination of the Deposit Agreement$5.00 or less per 100 ADSs (or portion thereof)

Any cash distribution pursuant to the Deposit Agreement,
including, but not limited to, cash distribution(s) made inconnection with: cash dividend; distributions in securities,
property or subscription rights; and stock split.

$.02 or less per ADS (or portion thereof). Only
the cash amounts net of this fee, if applicable,
are distributed

Distribution by the depositary of securities (other than commonshares of NHI) that accrued on the underlying shares toowners of the Receipts

Treating for the purpose of this fee all suchsecurities as if they were common shares of
NHI, $5.00 or less per 100 ADSs (or portion
thereof)

General depositary services$.02 or less per ADS (or portion thereof),
accruing on the last day of each calendar year,
except where the fee for cash distribution
described above was assessed during thatcalendar year

Any other charge payable by the depositary, any of thedepositary’s agents, including the Custodian, or the agents ofthe depositary’s agents in connection with the servicing of
the NHI shares or other deposited securities

As applicable

Fees paid to Nomura by the depositary
The Bank of New York Mellon, as depositary, has agreed to pay all its standard out-of-pocket
administration and maintenance expenses for providing services to the registered shareholders and up to 100,000
non-registered shareholders of ADRs. From April 1, 2010 to March 31, 2011, the Bank of New York Mellon has
waived a total of $238,277.55 in fees (including $98,118.01 in connection with the above-mentioned
administration and maintenance expenses) associated with the administration of the ADR program andadministrative fees for routine corporate actions and for providing investor relations information services.
114

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
Disclosure Controls and Procedures.
Our Disclosure Committee is responsible for establishment and maintenance of our disclosure controls andprocedures. As of March 31, 2011, an evaluation was carried out under the supervision and with the participationof our management, including our Group 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, our Group Chief Executive
Officer and Chief Financial Officer concluded that, as of March 31, 2011, our disclosure controls and procedures
were effective.
Management’s Annual Report on Internal Control Over Financial Reporting.
Our management is responsible for establishing and maintaining adequate internal control over financial
reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934). Our
management, with the participation of our Group Chief Executive Officer and Chief Financial Officer, evaluatedthe effectiveness of our internal control over financial reporting using the criteria set forth in the 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, 2011. 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, which appears on page F-3 of this Form 20-F.
Changes in Internal Control Over Financial Reporting.
Our management also carried out an evaluation, with the participation of our Group Chief Executive Officer
and Chief Financial Officer, of changes in our internal control over financial reporting during the year ended
March 31, 2011. Based upon that evaluation, there was no change in our internal control over financial reporting
during the year ended March 31, 2011 that has materially affected, or is reasonably likely to affect, our internal
control over financial 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.
115

Item 16C. Principal Accountant Fees and Services
Ernst & Young ShinNihon LLC has been our principal accountants for SEC reporting purposes for the lastnine 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
2010
2011
2011
(in millions)Audit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit-Related Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2,84870
145
45¥2,690
113
116
175

$33
1
1
2

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

¥3,108¥3,094$37

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 CFO in conjunction with our principal
accountants must make a proposal to our Audit Committee for the types of services and estimated fee levels ofeach category of services to be generally pre-approved. Such proposal must be made no less frequently thanannually. The Audit Committee will discuss the proposal and if necessary consult with outside professionals as towhether the proposed services would impair the independence of our principal accountants. If such proposal isaccepted, our Audit Committee will inform our CFO and principal accountants of the services that have generally
been pre-approved and included in a “General Pre-Approved List.” Our Audit Committee is informed of eachsuch 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.
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.
116

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
During the fiscal year ended March 31, 2011, we acquired 30,934 shares of our common stock by means ofrepurchase of shares constituting less than one unit upon the request of the holders of those shares. For an
explanation of the right of our shareholders to demand such repurchases by us, see “Common Stock” under
Item 10.B of this annual report. As of March 31, 2011, we had 3,600,886,932 outstanding shares excluding
118,246,309 shares as treasury stock. During the fiscal year ended March 31, 2011, no affiliated purchaser of
Nomura purchased shares of our common stock.
We established a share buyback program during the year ended March 31, 2011.
On July 30, 2010, we announced a resolution of the Board of Directors to establish a share buyback programin accordance with Article 459-1 of the Companies Act. The period of repurchase under the program was from
August 9, 2010 to September 17, 2010, and we were authorized to purchase up to 75,000,000 shares of ourcommon stock or to a maximum of ¥50,000 million. On August 31, 2010, we announced that the aggregate
number of shares repurchased through this buyback program was 75,000,000 shares and the aggregate value ofshares repurchased was ¥37,361,694,700.
The following table sets forth certain information with respect to our purchases of shares of our common
stock during the fiscal year ended March 31, 2011.

Month

Total
Number of
SharesPurchased

Average Price
Paid perShare(in JPY)

Total
Number of
SharesPurchased
as Part of
Publicly
Announced
ProgramApril 1 to 30, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May 1 to 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
June 1 to 30, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
July 1 to 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
August 1 to 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September 1 to 30, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
October 1 to 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
November 1 to 30, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 1 to 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
January 1 to 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February 1 to 28, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 1 to 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,189
1,107
1,362
2,141
1,715
1,338
1,084
2,940
11,358
3,005
1,595
1,100

691
610
541
481
501
454
428
457
514
532
529
493

—
—
—
—
75,000,000
—
—
—
—
—
—
—

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

30,934519

75,000,000

Maximum
Number of
Shares thatMay Yet Be
Purchased
Under
the Program

—
—
—
—
0
—
—
—
—
—
—
—
0

Nomura recognizes the need to set out flexible financial strategies that allow the Board of Directors to
respond quickly to any changes in the business environment and is looking into implementing further sharebuybacks. Details will be announced when finalized.
As of May 31, 2011, 3,604,431,021 shares of Nomura Holdings were outstanding, excluding 114,702,220
shares held as treasury stock.
117

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
fourteen Directors, eight of whom are outside
directors. An outside director of a corporation isdefined under the Companies Act as a non-executive
director (i) who has never assumed 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.

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 that satisfies the requirements 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 be composed entirely of independent directors andhave at least three members.

Nomura has an Audit Committee consisting of three
Directors, 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.

118

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. The nominating/corporate governancecommittee 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 a compensationcommittee with responsibilities described under Section
303A of the NYSE Listed Company Manual. The
compensation committee must be composed 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 options are
deemed to be compensation for the services
performed by our Directors and Executive Officers.

119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.

120

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) (incorporated by reference to theRegistration Statement on Form S-8 (File No. 333-165925) filed on April 7, 2010)

1.3

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

1.4

Regulations of the Nomination Committee (English translation) (incorporated by reference to theAnnual Report on Form 20-F (File No. 001-15270) filed on June 30, 2009)

1.5

Regulations of the Audit Committee (English translation) (incorporated by reference to the Annual
Report on Form 20-F (File No. 001-15270) filed on June 30, 2009)

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 Mellon 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. 333-166346) filed on April 28, 2010)

4.1

Limitation of Liability Agreement (English translation)*1

4.2

Limitation of Liability Agreement*2

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*1*2

Nomura and each of Haruo Tsuji, Masahiro Sakane, Tsuguoki Fujinuma, Takao Kusakari and Toshinori
Kanemoto entered into a Limitation of Liability Agreement, substantially in the form of this exhibit.
Nomura and each of Lord Colin Marshall, Dame Clara Furse and Michael Lim Choo San entered into a
Limitation of Liability Agreement substantially in the form of this exhibit.

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

121

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, 2010 and 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-4

Consolidated Statements of Operations for the Years Ended March 31, 2009, 2010 and 2011 . . . . . . .

F-6

Consolidated Statements of Changes in Equity for the Years Ended March 31, 2009, 2010 and2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-7

Consolidated Statements of Comprehensive Income for the Years Ended March 31, 2009, 2010 and2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-9Consolidated Statements of Cash Flows for the Years Ended March 31, 2009, 2010 and 2011 . . . . . .

F-10

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

F-12

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, 2010 and 2011, and the related consolidated statements of operations, changes in equity,
comprehensive income, and cash flows for each of the three years in the period ended March 31, 2011. 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, 2010 and 2011, and the consolidated
results of its operations and its cash flows for each of the three years in the period ended March 31, 2011, inconformity 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, 2011, 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 30, 2011 expressed an unqualified opinion
thereon.
/s/ Ernst & Young ShinNihon LLC
Tokyo, Japan
June 30, 2011

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, 2011,
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, 2011, 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, 2010 and 2011, andthe related consolidated statements of operations, changes in equity, comprehensive income, and cash flows foreach of the three years in the period ended March 31, 2011 and our report dated June 30, 2011 expressed an
unqualified opinion thereon.
/s/ Ernst & Young ShinNihon LLC
Tokyo, Japan
June 30, 2011

F-3

NOMURA HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETSMillions of yen
March 312010
2011

Translation
intomillions of
U.S. dollars
2011

ASSETSCash and cash deposits:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 1,020,647 ¥ 1,620,340 $ 19,579
Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
196,909339,419
4,101
Deposits with stock exchanges and other segregated cash . . . . . . .
134,688
190,694
2,304
Cash and cash deposits, Total . . . . . . . . . . . . . . . . . . . . . . . . .
1,352,244
2,150,453
25,984Loans and receivables:
Loans receivable (including ¥692,232 million and¥554,180 million ($6,696 million) measured at fair value by
applying the fair value option in 2010 and 2011,
respectively) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,310,375
1,271,284
15,361
Receivables from customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
59,141
32,772
396
Receivables from other than customers . . . . . . . . . . . . . . . . . . . . .
707,623
928,626
11,221
Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . .
(5,425)(4,860)(59)
Loans and receivables, Total . . . . . . . . . . . . . . . . . . . . . . . . .
2,071,714
2,227,822
26,919Collateralized agreements:
Securities purchased under agreements to resell (including¥904,126 million ($10,925 million) measured at fair value by
applying the fair value option in 2011) . . . . . . . . . . . . . . . . . . .
7,073,926
9,558,617
115,498
Securities borrowed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,393,287
5,597,701
67,638Collateralized agreements, Total . . . . . . . . . . . . . . . . . . . . . .
12,467,213
15,156,318
183,136
Trading assets and private equity investments:
Trading assets (including securities pledged as collateral of¥3,921,863 million and ¥4,621,042 million ($55,837 million)
in 2010 and 2011, respectively; including ¥18,546 million and¥15,444 million ($187 million) measured at fair value by
applying the fair value option in 2010 and 2011,
respectively) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,374,028
14,952,511
180,673
Private equity investments (including ¥61,918 million and¥62,553 million ($756 million) measured at fair value by
applying the fair value option in 2010 and 2011,
respectively) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
326,254289,420
3,497
Trading assets and private equity investments, Total . . . . . . .
14,700,282
15,241,931
184,170
Other assets:
Office buildings, land, equipment and facilities (net ofaccumulated depreciation and amortization of¥273,616 million in 2010 and ¥300,075 million($3,626 million) in 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
357,194
392,036
4,737
Non-trading debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
308,814591,797
7,151
Investments in equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . .
122,948
91,0351,100
Investments in and advances to affiliated companies . . . . . . . . . .
251,273
273,105
3,300
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
598,746
568,493
6,869
Other assets, Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,638,975
1,916,466
23,157
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥32,230,428 ¥36,692,990 $443,366
The accompanying notes are an integral part of these consolidated financial statements.
F-4

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

Millions of yen
March 312010
2011

Translation
intomillions of
U.S. dollars
2011

LIABILITIES AND EQUITY
Short-term borrowings (including ¥103,975 million and¥183,524 million ($2,218 million) measured at fair value by
applying the fair value option in 2010 and 2011, respectively) . . . . . ¥ 1,301,664 ¥ 1,167,077 $ 14,102
Payables and deposits:
Payables to customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
705,302880,429
10,638
Payables to other than customers . . . . . . . . . . . . . . . . . . . . . . . . . .
374,522410,679
4,962
Deposits received at banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
448,595
812,500
9,818
Payables and deposits, Total . . . . . . . . . . . . . . . . . . . . . . . . . .
1,528,419
2,103,608
25,418Collateralized financing:
Securities sold under agreements to repurchase (including¥332,337 million ($4,016 million) measured at fair value by
applying the fair value option in 2011) . . . . . . . . . . . . . . . . . . .
8,078,020
10,813,797
130,665
Securities loaned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,815,981
1,710,191
20,664
Other secured borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,322,480
1,162,450
14,046
Collateralized financing, Total . . . . . . . . . . . . . . . . . . . . . . . .
11,216,481
13,686,438
165,375
Trading liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,356,806
8,688,998
104,990
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
494,983
552,316
6,673
Long-term borrowings (including ¥1,839,251 million and¥2,300,606 million ($27,799 million) measured at fair value by
applying the fair value option in 2010 and 2011, respectively) . . . . .
7,199,061
8,402,917
101,534
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30,097,414
34,601,354
418,092
Commitments and contingencies (Note 20)
NHI Shareholders’ equity:
Common stock
No par value share;
Authorized—6,000,000,000 shares in 2010 and 2011
Issued—3,719,133,241 shares in 2010 and 2011
Outstanding—3,669,044,614 shares in 2010 and 3,600,886,932
shares in 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
594,493594,493
7,183
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
635,828
646,315
7,810
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,074,213
1,069,334
12,921
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . .
(109,132)(129,696)(1,567)
Total NHI shareholder’s equity before treasury stock . . . . . .
2,195,402
2,180,446
26,347
Common stock held in treasury, at cost—50,088,627 shares in 2010
and 118,246,309 shares in 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(68,473)(97,692)(1,181)
Total NHI shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,126,929
2,082,754
25,166
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,085
8,882
108
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,133,014
2,091,636
25,274
Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥32,230,428 ¥36,692,990 $443,366

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

NOMURA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

2009

Millions of yen
Year ended March 31
2010
2011

Revenue:Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 306,803 ¥Fees from investment banking . . . . . . . . . . . . . . . . . . .
54,953
Asset management and portfolio service fees . . . . . . .
140,166
Net gain (loss) on trading . . . . . . . . . . . . . . . . . . . . . . .
(128,339)
Gain (loss) on private equity investments . . . . . . . . . .
(54,791)
Interest and dividends . . . . . . . . . . . . . . . . . . . . . . . . . .
331,356
Gain (loss) on investments in equity securities . . . . . .
(25,500)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39,863395,083 ¥ 405,463
121,254
107,005
132,249
143,939
417,424
336,503
11,906
19,292
235,310346,103
6,042(16,677)
37,48343,864

Translation
intomillions of
U.S. dollars
2011$ 4,899
1,293
1,739
4,066
233
4,182
(202)
531

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

664,511351,884

1,356,751
205,929

1,385,492
254,794

16,741
3,079

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

312,627

1,150,822

1,130,698

13,662

Non-interest expenses:
Compensation and benefits . . . . . . . . . . . . . . . . . . . . . .
Commissions and floor brokerage . . . . . . . . . . . . . . . .
Information processing and communications . . . . . . . .
Occupancy and related depreciation . . . . . . . . . . . . . . .
Business development expenses . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

491,555
73,681
154,980
78,48031,638262,558

526,238
86,129175,575
87,80627,333
142,494

518,993
92,088
182,918
87,84330,153
125,448

6,271
1,113
2,210
1,061
364
1,516

Non-interest expenses, Total . . . . . . . . . . . . . . . .

1,092,892

1,045,575

1,037,443

12,535

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

(780,265)

105,247

93,255

1,127

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

(70,854)

37,161

61,330741

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

¥ (709,411) ¥68,086

Less: Net income (loss) attributable to noncontrollinginterests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,219)288

Net income (loss) attributable to NHI shareholders . . . . . . .

¥ (708,192) ¥67,798¥31,925$

3,264¥

28,661

386
40

$

346

Translation
into
U.S. dollars

Yen

Per share of common stock:
Basic—Net income (loss) attributable to NHI shareholders per
share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (364.69) ¥

21.68

¥

7.90

$

0.10

Diluted—
Net income (loss) attributable to NHI shareholders per
share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (366.16) ¥

21.59

¥

7.86

$

0.09

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

NOMURA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Translation
intomillions of
U.S. dollars

Millions of yen
Year ended March 31
2010
2011

2009

2011

Common stock
Balance at beginning of year . . . . . . . . . . . . . . . . . . . .
Issuance of common stock . . . . . . . . . . . . . . . . . . . . . .
Conversion of convertible bonds . . . . . . . . . . . . . . . . .

¥ 182,800
138,965—¥ 321,765
217,728
55,000¥ 594,493——$ 7,183——

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

321,765

594,493594,493

7,183

177,227

374,413635,828

7,683—
143,482
—
2,755
9,954

(26,923)
228,934
55,000
5,702(4,242)

—
—
—
3,191
7,296

—
—
—
39
88

40,995

2,959

—

—

—
—

561
(576)

—
—

—
—

374,413635,828

646,315

7,810

1,779,783

1,038,557

1,074,213

12,98015,641(708,192)(48,675)(6,339)67,798(25,803)(4,734)
28,661(28,806)

(57)
346
(348)

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

1,038,557

1,074,213

1,069,334

12,921

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

(28,416)(45,053)(73,469)(861)(74,330)(23,096)

(898)
(279)

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

(73,469)(74,330)(97,426)(1,177)

Additional paid-in capital
Balance at beginning of year . . . . . . . . . . . . . . . . . . . .
Cumulative effect of change in accounting
principle(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of common stock . . . . . . . . . . . . . . . . . . . . . .
Conversion of convertible bonds . . . . . . . . . . . . . . . . .
Gain on sales of treasury stock . . . . . . . . . . . . . . . . . . .
Issuance and exercise of common stock options . . . . .
Beneficial conversion feature relating to convertible
bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sale of subsidiary shares to noncontrollinginterests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other net change in additional paid-in capital . . . . . . .
Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings
Balance at beginning of year . . . . . . . . . . . . . . . . . . . .
Cumulative effect of change in accounting
principle(1)(2)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) attributable to NHI shareholders . . .
Cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-7

NOMURA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

2009

Millions of yen
Year ended March 31
2010
2011

Translation
intomillions of
U.S. dollars
2011

Defined benefit pension plans
Balance at beginning of year . . . . . . . . . . . . . . . . . . . .
Pension liability adjustment . . . . . . . . . . . . . . . . . . . . .

(42,695)(2,273)(44,968)
10,166(34,802)
2,532

(421)
31

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

(44,968)(34,802)(32,270)(390)

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

(118,437)(109,132)(129,696)(1,567)

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

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

(76,902)
(18)
13
8,275
159

(68,473)(37,378)
4
8,155
—

(827)
(452)
0
98
—

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

(76,902)(68,473)(97,692)(1,181)

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

1,539,396

2,126,929

2,082,754

25,166

12,978(131)

12,150
(103)

6,085
(100)

74
(1)

(1,219)

288

3,264

40

(1,572)(196)(1,055)

(13)

3,071
(977)

(2,004)(4,050)

0
688

0
8

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

12,150

6,085

8,882

108

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

¥1,551,546¥2,133,014¥2,091,636$25,274

Noncontrolling interests
Balance at beginning of year . . . . . . . . . . . . . . . . . . . .
Cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) attributable to noncontrollinginterests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss attributable to:
Cumulative translation adjustments . . . . . . . . . . . . .
Purchase / Sale (Disposition) of subsidiary shares,
etc., net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other net change in noncontrolling interests . . . . . . . .

(1) Cumulative effect of change in accounting principle for the year ended March 31, 2010 was previously
reported as Adjustments to initially apply “Contracts in entity’s own equity”.
(2) Cumulative effect of change in accounting principle for the year ended March 31, 2009 was previously
reported as ¥10,383 million for Adjustments to initially apply “Fair value measurements” and as¥5,258 million for Adjustments to initially apply “The fair value option”.
(3) Cumulative effect of change in accounting principle for the year ended March 31, 2011 is an adjustment toinitially apply Accounting Standards Update (“ASU”) No. 2009-17, “Consolidation (Topic 810):
Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities” (“ASU 200917”).

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

NOMURA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

2009

Millions of yen
Year Ended March 31
2010
2011

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥(709,411) ¥68,086 ¥ 31,925
Other comprehensive income (loss):
Change in cumulative translation adjustments, net of tax . . .
(46,625) (1,057) (24,151)
Defined benefit pension plans:
Pension liability adjustment . . . . . . . . . . . . . . . . . . . . . .
(5,861) 18,339
4,074
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . .
3,588(8,173)(1,542)

Translation
intomillions of
U.S. dollars
2011

$ 386
(292)
50
(19)

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

(2,273)

10,1662,532

31

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

(48,898)

9,109(21,619)(261)

Comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Comprehensive income (loss) attributable to noncontrollinginterests in subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(758,309)

77,195

10,306125(2,791)

92

2,209

27

Comprehensive income (loss) attributable to NHI shareholders . .

¥(755,518) ¥77,103¥ 8,097$ 98

The accompanying notes are an integral part of these consolidated financial statements.
F-9

NOMURA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS2009
Cash flows from operating activities:
Net income (loss)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income (loss) to net cash used in operating
activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Gain) loss on investments in equity securities . . . . . . . . . . . . . . . . . . . . . . .
Equity in (earnings) loss 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 sold underagreements to repurchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities borrowed, net of securities loaned . . . . . . . . . . . . . . . . . . . . . . . . .
Other secured borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans and receivables, net of allowance for doubtful accounts . . . . . . . . . . .
Payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bonus accrual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued income taxes, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Millions of yen
Year ended March 31
2010
2011
¥

31,925

Translation
intomillions of
U.S. dollars
2011¥ (709,411) ¥68,086$386

75,78016,47625,50012,842
6,107(83,631)73,081
9,737(6,042)(8,097)
2,446
19,57475,587
18,638
16,677(6,800)6,348
55,199

913
225
202
(82)
77
667

72,670(153,059)(3,153,499)
1,323,314

348,003
142,416(3,123,679)
3,737,079(155,251)(67,738)(1,481,908)
1,206,394(1,876)(819)(17,906)
14,577

1,490,423(278,318)
425,886(1,336,288)
994,150
73,368(72,209)557,270(1,437,635)(69,472)(1,591,535)(248,175)
139,919
30,78465,718347,022327,668(446,152)(160,031)(354,691)
319,506(8,802)(26,174)
414,515

3,959(5,391)(1,934)(4,286)
3,861
(106)
(316)
5,008

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

(712,629)(1,500,770)(235,090)(2,841)

Cash flows from investing activities:
Payments for purchases of office buildings, land, equipment and facilities . . .
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 in non-trading debt securities, net . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Business combinations or disposals, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in investments in affiliated companies, net . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(95,978)
38,799(6,236)
2,065
28,096(19,415)(39,421)(5,965)(850)(83,079)
2,909(2,318)
1,272(105,800)(64,586)(9,865)(13)(8,163)(186,350)
109,888(221)
3,247(60,350)(286,013)
5,570(8,936)(49)(2,252)
1,328
(2)
39
(729)
(3,456)
67
(108)
(1)

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

(98,905)(269,643)(423,214)(5,114)

Cash flows from financing activities:
Increase in long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease in long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in short-term borrowings, net . . . . . . . . . . . . . . . . . . . . . . .
Increase 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 subsidiaries . . . . . . . . . . . . . . . . . . . . . . .

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

3,059,225(1,470,978)137,076
13,279446,66210(18)(11,130)
2,404

2,267,658(1,188,034)(97,282)
368,354—8(37,378)(29,083)—

27,400(14,355)(1,175)
4,451
—
0
(452)
(351)
—
15,518Net cash provided by financing activities . . . . . . . . . . . . . . . . . . . . . . .

999,760

2,176,530

1,284,243

Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . . .

(81,896)964(26,246)(317)

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

106,330
507,236

407,081613,566

599,6931,020,647

7,246
12,333¥ 1,020,647¥ 1,620,340$ 19,579

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

¥613,566

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

¥416,124¥

210,742¥

259,679$ 3,138

Income tax payments (refunds), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥84,986¥(62,994) ¥32,305

$

F-10

390

NOMURA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS—(Continued)
Non cash activities—
Business combinations:
Assets acquired, excluding cash and cash equivalents, and debt assumed were ¥56,168 million and ¥28,849 million, respectively, for theyear ended March 31, 2009.
Assets acquired, excluding cash and cash equivalents, and debt assumed were ¥45,981 million and ¥27,663 million, respectively, for theyear ended March 31, 2010.
Capital lease assets:
The increase in Office buildings, land, equipment and facilities in the consolidated balance sheets includes newly recognized capitalleases in the amount of ¥26,572 million during the year ended March 31, 2010.
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.
Conversion of convertible bonds:
During the year ended March 31, 2010, convertible bonds were exercised at the amount of ¥110,000 million. Accordingly, Common
Stock increased by ¥55,000 million and Additional paid-in capital increased by ¥55,000 million.
Other:
During the year ended March 31, 2011, as a result of adoption for ASU 2009-17, assets excluding cash and cash equivalent increased by¥275,464 million ($3,328 million) and liabilities increased by ¥289,757 million ($3,501 million).
Notes:(1) Net income (loss) is net income (loss) before subtracting Net income (loss) attributable to noncontrolling interests.
(2) Certain reclassifications of previously reported amounts have been made to conform to the current year presentation.

The accompanying notes are an integral part of these consolidated financial statements.
F-11

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 clientson a global basis. The Company and other entities in which it has a controlling financial interest are collectively
referred to as “Nomura.”
Nomura operates its business through various divisions based upon the nature of specific products andservices, its main client base and its management structure. In April 2010, Nomura established a Wholesale
Division, encompassing the former Global Markets, Investment Banking and Merchant Banking Divisions. Also,
Nomura realigned its reportable segments to reflect how it operates and manages its business. Accordingly,
Nomura’s management structure and management reporting is now based on the Retail, Asset Management, andWholesale segments.
In its Retail business, Nomura provides investment consultation services mainly to individual clients inJapan. In its Asset Management business, Nomura develops and manages investment trusts, and provides
investment advisory services. In its Wholesale business, Nomura is engaged in the sales and trading of debt andequity securities and currencies on a global basis to various institutions, provides investment banking services
such as the underwriting of bonds and equities as well as mergers and acquisitions and financial advice andinvests in private equity businesses and seeks to maximize returns on the investments by increasing the corporate
value of investee companies.
Basis of presentation—
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. Effective July 1, 2009, Nomura
adopted the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification™
(“Codification”) as required by Accounting Standard Codification Topic (“ASC”) 105 “Generally Accepted
Accounting Principles” and Accounting Standards Update (“ASU”) No. 2009-01 “Topic 105—Generally
Accepted Accounting Principles.” The primary objective of the Codification is to simplify access to all
authoritative literature related to a particular topic in one place by replacing former authoritative guidance
provided from different sources in various pronouncements such as Statement of Financial AccountingStandards, Emerging Issue Task Force Abstracts, FASB Interpretations, FASB Staff Positions, AICPAStatements of Position and Industry Guides. Further, effective July 1, 2009, any changes to the Codification arecommunicated by the FASB through an ASU.
As the Codification is not intended to change U.S. GAAP but rather consolidates it into a single set of rules,
adoption of the Codification by the Company has not had a material financial impact on these consolidated
financial statements. All technical references to U.S. GAAP pronouncements within these consolidated financial
statements have been replaced with the relevant Codification topic or sub-topic references.
These consolidated financial statements include the accounts of the Company and other entities in which it
has a controlling financial interest. The Company initially determines whether it has a controlling financial
interest in an entity by evaluating whether the entity is a variable interest entity (“VIE”) under ASC 810,
“Consolidation” (“ASC 810”). VIEs are entities in which equity investors do not have the characteristics of acontrolling 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, which is where Nomura holds variable interests that provide power over the most significant
F-12

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
activities of the VIE and the right to receive benefits or the obligation to absorb losses meeting a significancetest, provided that Nomura is not acting as a fiduciary for other interest holders. For certain VIE entities that
qualify as investment companies under ASC 946 “Financial Services—Investment Companies” (“ASC 946”) or
for which it is industry practice to apply guidance consistent with the measurement principles in ASC 946,
Nomura is the primary beneficiary when it holds interests that will absorb a majority of the expected losses or 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 interests.
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 percent of alimited partnership) are accounted for under the equity method of accounting (“equity method investments”) andreported in Other assets—Investments in and advances to affiliated companies or at fair value by electing the fairvalue option permitted by ASC 825 “Financial Instruments” (“ASC 825”) and reported within Trading assets orPrivate equity investments. Investments undertaken by Nomura’s merchant banking business are reported within
Private equity investments. Other investments are reported within Trading assets. Equity investments in which
Nomura has neither control nor significant influence are carried at fair value, with changes in fair value
recognized through the consolidated statements of operations.
Certain entities in which the Company has a financial interest are investment companies under ASC 946.
These entities, including subsidiaries such as Nomura Principal Finance Co., Ltd. (“NPF”), carry all of theirinvestments at fair value, with changes in fair value recognized through the consolidated statements ofoperations.
The Company’s principal subsidiaries include Nomura Securities Co., Ltd. (“NSC”), Nomura Securities
International, Inc. and Nomura International plc (“NIP”).
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 these consolidated financial statements, management makes estimates regarding the valuationof certain financial instruments and investments, the outcome of litigation and tax examinations, the recovery of
the carrying value of goodwill, the allowance for doubtful accounts, the realization of deferred tax assets andother matters that affect the reported amounts of assets and liabilities as well as the disclosures in these
consolidated 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—
A significant amount of Nomura’s financial assets and financial liabilities are carried at fair value, withchanges in fair value recognized through the consolidated statements of operations. Use of fair value is either
specifically required under U.S. GAAP or Nomura makes an election to use fair value for certain eligible items
under the fair value option.
Other financial assets and financial liabilities are carried at fair value on a nonrecurring basis, where theprimary measurement basis is not fair value. Fair value is only used in specific circumstances such as to measure
impairment.
F-13

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In all cases, fair value is determined in accordance with ASC 820, “Fair Value Measurements andDisclosures” (“ASC 820”) which defines fair value as the amount that would be exchanged to sell a financial
asset or transfer a financial liability in an orderly transaction between market participants at the measurement
date. It assumes that the transaction occurs in Nomura’s principal market, or in the absence of a principal market,
the most advantageous market for the relevant financial asset or financial liability. See Note 3, “Fair value offinancial instruments” below for more information regarding how Nomura estimates fair value for specific typesof financial instruments used in the ordinary course of business.
Private equity business—
Private equity investments are generally carried at fair value, with changes in fair value recognized throughthe consolidated statements of operations. See Note 5, “Private equity business” for more information.
Transfers of financial assets—
Nomura accounts for the transfer of a financial asset as a sale when Nomura relinquishes control over theasset by meeting the following conditions: (a) the asset has been isolated from the transferor (even in bankruptcy
or other receivership), (b) the transferee has the right to pledge or exchange the asset received, or if the transferee
is an entity whose sole purpose is to engage in securitization or asset-backed financing activities, if, the holdersof its beneficial interests have the right to pledge or exchange the beneficial interests held and (c) the transferor
has not maintained effective control over the transferred asset.
In connection with its securitization activities, Nomura utilizes special purpose entities (“SPEs”) tosecuritize commercial and residential mortgage loans, government and corporate securities and other types offinancial assets. Nomura’s involvement with SPEs includes structuring and underwriting, distributing and sellingdebt instruments and beneficial interests issued by SPEs to investors. Nomura derecognizes financial assets
transferred in securitizations provided that Nomura has relinquished control over such assets and does notconsolidate the SPE. Nomura may obtain or retain an interest in the financial assets, including residual interestsin the SPEs dependent upon prevailing market conditions. Any such interests are accounted for at fair value andincluded in Trading assets within the consolidated balance sheets with the change in fair value included within
Revenue—Net gain (loss) on trading in the consolidated statements of operations.
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 ofsubsidiaries 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 through NHI
shareholders’ equity within Accumulated other comprehensive loss.
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 the consolidated statements of operations.
Fee revenue—
Revenue—Commissions includes amounts charged for executing brokerage transactions accrued on a tradedate basis and are included in current period earnings. Revenue—Fees from investment banking includes
securities underwriting fees and other corporate financing services fees. Underwriting fees are recorded when
F-14

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
services for underwriting are completed. All other fees are recognized when related services are performed.
Revenue—Asset management and portfolio service fees are accrued over the period that the related services areprovided or when specified performance requirements are met.
Trading assets and trading liabilities—
Trading assets and Trading liabilities primarily comprise debt and equity securities, derivatives, and loans.
Trading assets and Trading liabilities, including contractual commitments arising pursuant to derivativetransactions, are recognized on the consolidated balance sheets on a trade date basis and carried at fair value withchanges in fair value reported within Revenue—Net gain (loss) on trading in the consolidated statements ofoperations.
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 clients to resell or repurchase thesesecurities to or from those clients. Nomura monitors the value of the underlying securities on a daily basis
relative to the related receivables and payables, including accrued interest, and requests or returns additional
collateral when appropriate. Repo transactions are generally accounted for as collateralized agreements orcollateralized financing transactions and are recorded on the consolidated balance sheets at the amount at which
the securities were originally acquired or sold with applicable accrued interest, as appropriate. Certain repo
transactions are carried at fair value through election of the fair value option. No allowance for credit losses isgenerally recorded on repurchase agreements due to the strict collateralization requirements.
Repo transactions where the maturity of the security transferred as collateral matches the maturity of therepo transaction (“repo-to-maturity transactions”) are accounted for as sales rather than collateralized financings
where the criteria for derecognition of the securities transferred under ASC 860 “Transfers and Servicing”(“ASC 860”) are met. The amounts of securities derecognized from the consolidated balance sheets under repoto-maturity transactions as of March 31, 2010 and March 31, 2011 was ¥185,047 million and ¥169,766 million,($2,051 million), respectively.
Japanese “Gensaki” transactions which have no margin requirements nor substitution rights have also been
historically accounted for as sales where the criteria for derecognition of the transferred financial assets under
ASC 860 are met. The amounts of securities derecognized from the consolidated balance sheets under Gensaki
transactions as of March 31, 2010 and 2011 were not significant. These transactions have largely been replacedwith “Gensaki Repo transactions” which have been more common in Japanese financial markets since 2001.
Unlike Gensaki transactions, Gensaki Repo transactions contain margin requirements, rights of security
substitution, and certain restrictions on the client’s right to sell or repledge the transferred securities.
Accordingly, Gensaki Repo transactions are accounted for as collateralized agreements or collateralized
financing transactions and are recorded on the consolidated balance sheets at the amount that the securities wereoriginally acquired or sold with applicable accrued interest, as appropriate.
Repo transactions (including Gensaki Repo transactions) are presented in the consolidated balance sheets
net-by-counterparty, where offsetting is consistent with ASC 210-20 “Balance Sheet—Offsetting”(“ASC 210-20”). See Note 7 “Collateralized transactions” for more information on netting.
Securities borrowed and securities loaned are generally accounted for as collateralized agreements andcollateralized financing transactions, respectively. Securities borrowed and securities loaned are generally cash
F-15

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
collateralized and are recorded on the consolidated balance sheets at the amount of cash collateral advanced or
received. Securities borrowed transactions generally require Nomura to provide the counterparty with collateralin 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 value of the securities borrowed or loaned andrequires additional cash or securities, as necessary, to ensure that such transactions are adequately collateralized.
No allowance for credit losses is generally recorded on securities borrowing transactions due to the strict
collateralization requirements.
Certain Japanese securities lending transactions are accounted for as sales where the criteria forderecognition of the transferred financial assets under ASC 860 are met. The amounts of securities derecognizedfrom the consolidated balance sheets under these transactions as of March 31, 2010 and March 31, 2011 was¥153,808 million and ¥291,870 million, ($3,527 million) respectively.
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.
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 and are included in the consolidated balance
sheets in Long-term borrowings. The fair value option is generally elected for these transactions, which arecarried at fair value on a recurring basis. See Note 8, “Securitization and Variable Interest Entities (VIEs)” andNote 12, “Borrowings” for further information regarding these transactions.
On the consolidated balance sheets, 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 as Securities pledged as collateral.
Derivatives—
Nomura uses a variety of derivative financial instruments, including futures, forwards, swaps and options,for both trading and non-trading purposes. All freestanding derivatives are carried at fair value in the
consolidated balance sheets and reported within Trading assets or Trading liabilities depending on whether fairvalue is positive or negative, respectively. Changes in fair value are recognized either through the consolidated
statements of operations or the consolidated statements of comprehensive income depending on the purpose forwhich the derivatives are used.
Derivative assets and liabilities are presented in the consolidated balance sheets on a net-by-counterparty
basis where offsetting is consistent with ASC 210-20. In addition, fair value amounts recognized for the right toreclaim 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.
Certain derivatives embedded in hybrid financial instruments such as structured notes and certificates ofdeposit are bifurcated from the host contract and are carried at fair value. Embedded derivatives bifurcated froman underlying host debt instrument are reported in Short-term borrowings or Long-term borrowings dependingon the maturity of the underlying host contract.
Trading
Derivative financial instruments used for trading purposes, including bifurcated embedded derivatives, arecarried at fair value with changes in fair value reported in the consolidated statement of operations within
Revenue—Net gain (loss) on trading.
F-16

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Non-trading
In addition to its trading activities, Nomura uses derivative financial instruments for other than trading
purposes such as to manage risk exposures arising from recognized assets and liabilities, forecasted transactions
and firm commitments. Certain derivatives used for non-trading purposes are formally designated as fair value
and net investment accounting hedges under ASC 815 “Derivatives and Hedging” (“ASC 815”).
Nomura designates derivative financial instruments as fair value hedges of interest rate risk arising from
specific financial liabilities. These derivatives are effective in reducing the risk associated with the exposure
being hedged and they are highly correlated with changes in the fair value of the underlying hedged item, both atinception and throughout the life of the hedge contract. Changes in fair value of the hedging derivatives arereported together with those of the hedged liabilities through the consolidated statements of operations withinInterest expense.
Derivative financial instruments designated as hedges of the net investment in foreign operations are linked
to specific subsidiaries with non-Japanese yen functional currencies. When determining the effectiveness of net
investment hedges, the effective portion of the change in fair value of the hedging derivative is determined bychanges in spot exchange rates and is reported through NHI shareholders’ equity within Accumulated othercomprehensive loss. Change in fair value of the hedging derivatives attributable to changes in the difference
between the forward rate and spot rate is excluded from the measure of hedge effectiveness and is reported in the
consolidated statements of operations within Revenue—Other.
See Note 4 “Derivative Instruments and Hedging Activities” for more information.
Loans receivable—
Loans receivable are loans which management intends to hold for the foreseeable future. Loans receivable
are either carried at fair value or at amortized cost. Interest earned on Loans receivable is generally reported in
the consolidated statements of operations within Revenue—Interest and dividends.
Loans receivable carried at fair value
Certain loans which are risk managed on a fair value basis are carried at fair value through election of thefair value option. Nomura makes this election to mitigate volatility in the consolidated statement of operations
caused by the difference in measurement basis that would otherwise exist between the loans and the derivatives
used to risk manage those loans. Changes in the fair value of loans receivable accounted for at fair value arereported in the consolidated statements of operations within Revenue—Net gain (loss) on trading.
Loans receivable carried at amortized cost
Loans receivable which are not accounted for at fair value are carried at amortized cost. Amortized cost
represents cost adjusted for deferred fees or costs, unamortized premiums or discounts on purchased loans andafter deducting applicable allowance for loan losses.

F-17

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Loan origination fees, net of direct origination costs, are amortized to Revenue—Interest and dividends as an
adjustment to yield over the life of the loan. Net unamortized deferred fees and costs were ¥525 million and¥483 million ($6 million) as of March 31, 2010 and March 31, 2011, respectively.
See Note 9 “Financing receivables” for more information.
Other receivables—
Receivables from customers include amounts receivable on client securities transactions and Receivablesfrom other than customers include amounts receivable for securities not delivered to a purchaser by thesettlement date, margin deposits, commissions, and net receivables arising from unsettled securities transactions.
The net receivable arising from unsettled securities transactions reported within Receivables from other thancustomers was ¥95,954 million and nil as of March 31, 2010 and March 31, 2011, respectively.
These amounts are carried at contractual amounts due less any applicable allowance for credit losses whichreflects management’s best estimate of probable losses incurred within receivables which have been specifically
identified as impaired. The allowance for credit losses is reported in the consolidated balance sheets within the
Allowance for doubtful accounts.
Loan commitments—
Unfunded loan commitments are accounted for as either off-balance sheet instruments, or are carried at fairvalue on a recurring basis either as trading instruments or through election of the fair value option.
Loan commitments are generally accounted for in a manner consistent with the accounting for the loan
receivable upon funding. Where the loan receivable will be classified as a trading asset or will be elected for thefair value option, the loan commitment is also generally held at fair value, with changes in fair value reported in
the consolidated statement of operations within Revenue—Net gain (loss) on trading. Loan commitment fees arerecognized as part of the fair value of the commitment when earned.
For loan commitments where the loan will be held for the foreseeable future, Nomura recognizes anallowance for credit losses which is reported within Other liabilities—other in the consolidated balance sheets
which reflects management’s best estimate of probable losses incurred which have been specifically identified as
impaired. Loan commitment fees are generally deferred and recognized over the term of the arrangement as an
adjustment to yield.
Payables and deposits—
Payables to customers include amounts payable on client securities transactions and are generally measured
at contractual amounts due.
Payables to other than customers include payables to brokers and dealers for securities not received from aseller by the settlement date and net payables arising from unsettled securities transactions. Amounts aremeasured at contractual amounts due. The net payable arising from unsettled securities transactions reported
within Payables to other than customers was nil and ¥60,771 million ($734 million) as of March 31, 2010 andMarch 31, 2011, respectively.
Deposits received at banks represent amounts held on deposit within Nomura’s banking subsidiaries and aremeasured at contractual amounts due.
F-18

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Office buildings, land, equipment and facilities—
Office buildings, land, equipment and facilities, held for use by Nomura are stated at cost, net ofaccumulated depreciation and amortization, except for land, which is stated at cost. Significant renewals andadditions are capitalized at cost. Maintenance, repairs and minor renewals are expensed as incurred in the
consolidated statements of operations.
Depreciation and amortization charges are generally computed using the straight-line method and at rates
based on estimated useful lives of each asset according to general class, type of construction and use. The
estimated useful lives for significant asset classes are as follows:
Office buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equipment and facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5 to 50 years
3 to 35 years
Up to 5 years

Depreciation and amortization is included in Non-interest expenses—Information processing andcommunications in the amount of ¥56,429 million, ¥51,924 million, ¥52,455 million ($633 million), and in
Non-interest expenses—Occupancy and related depreciation in the amount of ¥19,351 million, and¥21,157 million, and ¥23,132 million ($280 million) for the years ended March 31, 2009, 2010 and 2011,
respectively.
Leases that involve real estate are classified as either operating or capital leases in accordance with ASC
840 “Leases” (“ASC 840”). Rent expense relating to operating leases is recognized over the lease term on astraight-line basis. If the lease is classified as a capital lease, Nomura records the real estate on the consolidatedbalance sheets and a liability for minimum lease payments. The real estate is initially recognized at fair value as
determined in accordance with ASC 820, and subsequently depreciated over its useful life on straight-line basis.
Where Nomura has certain involvement in the construction of real estate subject to a lease, Nomura is deemedthe owner of the construction project and records the real estate on the consolidated balance sheet until
construction is completed. At the end of the construction period the real estate is either derecognized or continues
to be recognized on Nomura’s balance sheet in accordance with ASC 840, depending on the extent of Nomura’s
continued involvement with the real estate.
Long-lived assets, excluding goodwill and indefinite-lived intangible assets, are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If theestimated future undiscounted cash flow generated by the asset is less than the carrying amount of the asset, aloss is recognized to the extent that the carrying value exceeds its fair value.
Nomura recorded non-cash impairment charges of ¥2,656 million, and ¥194 million, and ¥1,532 million($19 million) substantially related to write-downs of software, office buildings, land, equipment, facilities, andother assets for the years ended March 31, 2009, 2010 and 2011, respectively. These losses are included in the
consolidated statements of operations in Non-interest expenses—Other. The revised carrying values of theseassets were based on the estimated fair value of the assets.
Investments in equity 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 shareholder relationships.
F-19

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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 sheets, with changes in fairvalue reported within Revenue—Gain (loss) on investments in equity securities in the consolidated statements ofoperations. These investments comprise listed and unlisted equity securities in the amounts of ¥89,045 millionand ¥33,903 million, respectively, as of March 31, 2010 and ¥66,792 million ($807 million) and ¥24,243 million($293 million), respectively, as of March 31, 2011.
Non-trading debt securities—
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 reported within Revenue—Other in the
consolidated statements of operations.
Short-term and long-term borrowings—
Short-term borrowings are defined as borrowings which are due on demand, which have a contractual
maturity of one year or less at issuance date, or which have a longer contractual maturity but which containfeatures outside of Nomura’s control that allows the investor to demand redemption within one year fromoriginal issuance date.
Short-term and long-term borrowings primarily consist of commercial paper, bank borrowings, structured
notes issued by Nomura and SPEs consolidated by Nomura, and financial liabilities recognized in transfers offinancial assets which are accounted for as financings rather than sales under ASC 860 (“secured financing
transactions”). Of these financial liabilities, certain structured notes and secured financing transactions areaccounted for at fair value on a recurring basis through election of the fair value option. Other short and longterm borrowings are primarily carried at amortized cost.
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 simply receiving a fixed or floating rate ofinterest to a return that depends upon some other variable(s) such as an equity or equity index, commodity price,foreign exchange rate, credit rating of a third party or more complex interest rate calculation.
All structured notes issued by Nomura on or after April 1, 2008 are carried at fair value on a recurring basis
through election of the fair value option. This blanket election for structured notes is made primarily to mitigate
the volatility in the consolidated statements of operations caused by differences in the measurement basis forstructured notes and the derivatives used to risk manage those positions and to generally simplify the accounting
Nomura applies to these financial instruments.
Certain structured notes outstanding as of March 31, 2008 were already measured at fair value but others
continue to be accounted for by Nomura by bifurcating the embedded derivative from the associated debt hostcontract. The embedded derivative is accounted for at fair value and the debt host contract is accounted for atamortized cost.
Changes in the fair value of structured notes elected for the fair value option and bifurcated embedded
derivatives are reported within Revenue—Net gain (loss) on trading in the consolidated statements of operations.

F-20

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Income taxes—
Deferred tax assets and liabilities are recorded 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 tax rates. Nomura recognizes deferred tax assets to the extent it believes that it
is more likely than not that a benefit will be realized. A valuation allowance is 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 based on Nomura’s estimate of the likelihood,based on the technical merits, that tax positions will be sustained upon examination based on the facts andcircumstances 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 reassessmentof unrecognized tax benefits could have a material impact on Nomura’s effective tax rate in the period in which it
occurs.
Stock-based compensation—
Stock-based awards issued by Nomura are classified as either equity or liability awards depending on theterms of the award.
Stock-based awards which will be settled by the delivery of Nomura shares are classified as equity awards.
For these awards, total compensation cost is generally fixed at the grant date and measured using the grant-datefair value of the award, net of any amount the employee is obligated to pay and estimated forfeitures.
Stock-based awards such as Notional Stock Unit (“NSU”) which will be settled in cash are classified asliability awards. These are remeasured to fair value at each balance sheet date, net of estimated forfeitures withthe final measurement of cumulative compensation cost equal to the settlement amount.
For both equity and liability awards, fair value is determined either by using option pricing models or basedon the market price of the Company’s shares. Compensation cost is recognized in the consolidated statements ofoperations over the requisite service period, which generally is equal to the vesting period.
See Note 15. “Stock-based compensation plans” for further information regarding stock-based
compensation.
Earnings per share—
The computation of basic earnings per share is based on the average number of shares outstanding during
the year. Diluted earnings per share reflects the assumed conversion of all dilutive securities based on the mostadvantageous conversion rate or exercise price available to the investors, 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—
Goodwill and intangible assets not subject to amortization are reviewed annually, or more frequently incertain circumstances, for impairment. Goodwill is the cost of acquired companies in excess of the fair value of
F-21

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
identifiable net assets at acquisition date. Nomura periodically assesses the recoverability of goodwill bycomparing the fair value of each reporting unit to which goodwill relates to the carrying amount of the reporting
unit including goodwill. If such assessment 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 overtheir expected useful lives.
Nomura’s equity method investments are tested in their entirety for other-than-temporary impairment when
there is an indication of impairment. The underlying assets associated with the equity method investments,
including goodwill, are not tested separately for impairment.
Restructuring costs—
Costs associated with an exit activity are recognized at fair value in the period in which the liability is
incurred. Such costs include one-time termination benefits provided to employees, costs to terminate certain
contracts and costs to relocate employees. Termination benefits provided to employees as part of ongoing benefit
arrangements are recognized as liabilities during the period in which it is probable that Nomura has incurred a
liability and the amount of the liability can be reasonably estimated.
Restructuring costs of a plan to either exit an activity of a company acquired by Nomura or involuntarily
terminate or relocate employees of an acquired company are recognized as liabilities assumed in a businesscombination only if an obligation to incur the costs associated with these activities existed at the acquisition date.
New accounting pronouncements adopted during the current year—
The following new accounting pronouncements relevant to Nomura have been adopted during the year
ended March 31, 2011:
Transfers of financial assets and consolidation of variable interest entities
In December 2009, the FASB issued ASU No. 2009-16 “Transfers and Servicing (Topic 860): Accounting
for Transfers of Financial Assets” (“ASU 2009-16”) which incorporated new guidance for the accounting fortransfers of financial assets into ASC 860. ASU 2009-16 changed the requirements for derecognizing financial
assets, eliminated the concept of a qualified special purpose entity (“QSPE”), and requires additional disclosuresabout transfers of financial assets and a transferor’s continuing involvement with transfers accounted for as sales.
The requirements for derecognizing financial assets include new restrictions regarding when a portion of afinancial asset may be accounted for as a sale, as well as a clarification of the criteria required for legal isolationof the transferred assets. Entities previously considered as QSPEs are now evaluated for consolidation under therevised guidance provided by ASC 810 as amended by ASU 2009-17, as described below, provided Nomura hadvariable interests in those entities at the adoption date.
Nomura prospectively adopted the amendments to ASC 860 from ASU 2009-16 as of April 1, 2010. The
adoption did not have a material impact on these financial statements.
In December 2009, the FASB issued ASU No. 2009-17 “Consolidations (Topic 810): Improvements to
Financial Reporting by Enterprises Involved with Variable Interest Entities” (“ASU 2009-17”) which
incorporated new guidance for the consolidation of VIE into ASC 810.
ASU 2009-17 amended the rules defining VIEs and requires a company to perform a qualitative analysis todetermine if a VIE should be consolidated. If a company has variable interests that provide it with power over the
F-22

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
most significant activities of the VIE and the right to receive benefits or the obligation to absorb losses meeting asignificance test, the company consolidates the entity, provided that the company is not acting as a fiduciary forother interest holders. Under the new qualitative approach, a quantitative analysis of exposure to expected benefit
and loss is no longer determinative in isolation. ASU 2009-17 also requires the consolidation or deconsolidationof VIEs to be evaluated on an ongoing basis, which differs from previous guidance that required evaluation when
Nomura first became involved with a VIE and only upon occurrence of certain triggering events.
ASU 2009-17 contains special transition provisions governing whether the assets, liabilities, andnoncontrolling interests resulting from consolidation of entities at the date of adoption should occur at theircarrying amounts (as if such entities had been consolidated under the revised guidance prior to the adoptiondate), fair value, or at unpaid principal balances. At adoption, differences between the net amount added to thebalance sheet upon consolidation and the amount previously recognized on an unconsolidated basis arerecognized as a cumulative adjustment to the beginning balance of retained earnings.
In February 2010, the FASB issued ASU No. 2010-10 “Consolidation (Topic 810): Amendments for Certain
Investment Funds” (“ASU 2010-10”) which indefinitely deferred the amendments to ASC 810 introduced by
ASU 2009-17 for certain entities that qualify as investment companies under ASC 946 or for which it is industry
practice to apply guidance consistent with the measurement principles in ASC 946, as long as Nomura has no
explicit or implicit obligation to fund losses of the entity that could potentially be significant to the entity (except
for certain qualifying money market funds). The ASU did not defer the revised disclosures requirements of
ASU 2009-17 for entities determined to be VIEs under guidance existing prior to ASU 2009-17.
Nomura adopted the revised guidance in ASC 810 introduced by ASU 2009-17 and ASU 2010-10 on
April 1, 2010 and analyzed the impact on all QSPEs, SPEs, funds and similar entities with which it is involved.
Entities qualifying for the deferral under ASU 2010-10 continue to be assessed for consolidation under theguidance included in ASC 810 prior to amendment thereof by ASU 2009-17.
Based on the results of this analysis, Nomura consolidated certain securitization vehicles, which increased
total assets by ¥292 billion, total liabilities by ¥297 billion, and decreased total shareholders’ equity by ¥5 billion
upon adoption as of April 1, 2010. The increase in total assets also did not have a significant effect on Nomura’s
calculation of risk-weighted assets and therefore did not have a significant effect on Nomura’s capital ratios.
Enhanced disclosures about the credit quality of financing receivables and the allowance for loan losses
In July 2010, the FASB issued amendments to ASC 310 “Receivables” (“ASC 310”) through issuance ofASU 2010-20 “Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables and theAllowance for Credit Losses” (“ASU 2010-20”). ASU 2010-20 requires greater transparency of a reporting
entity’s exposure to credit losses from lending arrangements and significantly expands disclosures by requiring
more robust and disaggregated disclosures for the following:•

Nonaccrual and past due financing receivables;•

The allowance for credit losses related to financing receivables;•

Impaired loans (individually evaluated for impairment);•

Credit quality information; and•Modifications (e.g. troubled debt restructurings).

For public entities such as Nomura, the new and amended disclosures that relate to information as of the endof a reporting period (i.e. balance sheet disclosures) were generally effective for the first interim or annual
F-23

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
reporting period ending on or after December 15, 2010. New disclosures under ASU 2010-20 that relate toactivity that occurs during a reporting period are generally effective for the first interim or annual periods
beginning on or after December 15, 2010.
See Note 9 “Financing receivables” in these consolidated financial statements where the new disclosures
have been provided.
In January 2011, the FASB issued ASU 2011-01, “Receivables (Topic 310): Deferral of the Effective Dateof Disclosures about Troubled Debt Restructurings in Update No. 2010-20” which deferred the disclosuresrelated to troubled debt restructurings originally required by ASU 2010-20 until related revised accounting
guidance on troubled debt restructurings was issued. Following issuance of ASU 2011-02 “Receivables(Topic 310): A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring” (“ASU2011-02”) in April 2011 and described further below, these disclosures will now be effective for interim andannual periods beginning on or after June 15, 2011.
As ASU 2010-20 only introduces new disclosures and does not impact how Nomura accounts for financing
receivables, adoption of ASU 2010-20 has not had, and is not expected to have, a material impact on these
consolidated financial statements.
Future accounting developments—
The following new accounting pronouncements relevant to Nomura will be adopted in future periods:
Presentation of comprehensive income
In June 2011, the FASB issued amendments to ASC 220 “Comprehensive Income” (“ASC 220”) throughissuance of ASU 2011-05 “Comprehensive Income (Topic 220): Presentation of Comprehensive Income” (“ASU2011-05”) which revises the manner in which reporting entities present comprehensive income in their financial
statements. The amendments remove certain presentation options in ASC 220 and require reporting entities toreport components of comprehensive income in either a continuous statement of comprehensive income or two
separate but consecutive statements.
ASU 2011-05 is effective for fiscal years, and interim periods within those years, beginning after
December 15, 2011. Early adoption is permitted. Nomura currently expects to adopt the new requirements from
April 1, 2012. Because the new requirements only change how comprehensive income is presented within these
consolidated financial statements rather than changing when an item must be reported in other comprehensive
income or when an item of other comprehensive income is reclassified to earnings, the new requirements are notexpected to have a material impact on these consolidated financial statements.
Fair value measurement and disclosures
In May 2011, the FASB issued amendments to ASC 820 through issuance of ASU 2011-04 “Amendments toAchieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs” (“ASU2011-04”), which amends the descriptions for measuring fair value and existing fair value measurement
disclosures and in particular:•

Prohibits application of block discounts for all fair value measurements, regardless of classification in
the fair value hierarchy and clarifies how other premiums or discounts should be applied in a fair value
measurement;•

Allows the fair value of certain financial instruments held in a portfolio to be measured on the basis of
the net position being managed if certain criteria are met;
F-24

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

Clarifies that the concepts of highest and best use and valuation premise in a fair value measurement are
not relevant for most financial assets and financial liabilities;•

Clarifies that the fair value of own equity instrument classified in shareholders’ equity and certain
liabilities should be measured from the perspective of a market participant that holds the instrument as
an asset;•

Clarifies that the principal market should be determined based on the market with greatest volume andlevel that a reporting entity can access, which is usually the market in which the reporting entity usuallytransacts;•

Requires additional qualitative and quantitative disclosures around fair value measurements, including
more information around Level 3 inputs.

ASU 2011-04 is effective prospectively during interim and annual periods beginning after December 15,
2011. Early adoption is not permitted.
Nomura will adopt ASU 2011-04 from January 1, 2012 and is currently evaluating its impact on these
consolidated financial statements.
Accounting for troubled debt restructurings
In April 2011, the FASB issued amendments to ASC 310 through issuance of ASU 2011-02 “Receivables(Topic 310): A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring” (“ASU2011-02”) which provides additional guidance and clarification to creditors in determining whether a debt
restructuring constitutes a troubled debt restructuring.
ASU 2011-02 is effective for interim or annual periods beginning on or after June 15, 2011 and should beapplied retrospectively to the beginning of the annual period of adoption.
As a result of issuance of ASU 2011-02, new disclosures around troubled debt restructuring required by
ASU 2010-20 described above will also be effective for interim or annual periods beginning on or after June 15,
2011.
Nomura will adopt the new requirements from July 1, 2011 and does not expect these to have a material
impact on these consolidated financial statements.
Accounting for repurchase agreements and similar transactions
In April 2011, the FASB issued amendments to ASC 860 through issuance of ASU 2011-03“Reconsideration of Effective Control for Repurchase Agreements” (“ASU 2011-03”) which modifies theeffective control criterion for when repurchase agreements and similar transactions are accounted for as secured
financing transactions or sales. Currently, when assessing effective control, one of the conditions a transferor has
to meet is the ability to repurchase or redeem the financial assets even in the event of default of the transferee.
This ability is demonstrated through obtaining cash or other collateral sufficient to fund substantially all of thecost to purchase replacement assets should the transferee fail to return the transferred asset. The newrequirements remove this condition and consequently, the level of cash collateral, haircuts and ongoingmargining received by the transferor in a repurchase agreement or other similar agreement is now irrelevant indetermining if it should be accounted for as a sale.
ASU 2011-03 is effective prospectively for new transactions and modifications of existing transactions that
occur on or after the first interim or annual period after December 15, 2011. Early adoption is prohibited.
F-25

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Nomura will therefore adopt the new requirements from January 1, 2012 and does not expect these to have amaterial impact on these consolidated financial statements. Certain Japanese securities lending transactions
undertaken after adoption date will be accounted for as secured borrowings rather than sales in these consolidated
financial statements as the criteria for derecognition of the transferred financial assets under ASC 860 will nolonger be met. The amounts of securities derecognized from the consolidated balance sheets under open
securities lending transactions as of March 31, 2010 and 2011 were ¥153,808 million and ¥291,870 million($3,527 million), respectively.
Disclosure of supplementary pro forma information for business combinations
In December 2010, the FASB issued amendments to ASC 805 “Business Combinations” (“ASC 805”)
through issuance of ASU 2010-29 “Disclosures of Supplementary Pro Forma Information for Business
Combinations” (“ASU 2010-29”), which addresses diversity in practice about the interpretation of the pro forma
revenue and earnings disclosure requirements for business combinations. When a business combination has
occurred, ASU 2010-29 requires a public entity that presents comparative financial statements to disclose
revenue and earnings of the combined entity as though the business combination that occurred during the current
year had occurred as of the beginning of the comparable prior annual reporting period. ASU 2010-29 also
expands the supplemental pro forma disclosures under ASC 805 to include a description of the nature andamount of material, nonrecurring pro forma adjustments directly attributable to the business combination
included in the reported pro forma revenue and earnings.
ASU 2010-29 is effective prospectively for business combinations occurring in fiscal years beginning on orafter December 15, 2010 with early adoption permitted.
Nomura will adopt the new requirements for future business combinations occurring on or after April 1,
2011. Because the new requirements only provide clarification on disclosure requirements, these are not expected
to have a material impact on these consolidated financial statements.
Impairment testing of goodwill and other intangibles
In December 2010, the FASB issued amendments to ASC 350 “Intangibles—Goodwill and Other” (“ASC350”) through issuance of ASU 2010-28 “When to Perform Step 2 of the Goodwill Impairment Test for
Reporting Units with Zero or Negative Carrying Amounts” (“ASU 2010-28”), which addresses questions about
determination of the impairment of goodwill in certain narrow circumstances. Under ASC 350, testing for
goodwill impairment is a two-step test conducted at the “reporting unit” level. When a goodwill impairment test
is performed, an entity must assess whether the carrying amount of a reporting unit exceeds its fair value(Step 1). If it does, an entity must perform an additional test to determine whether goodwill has been impaired
and to calculate the amount of that impairment (Step 2). ASU 2010-28 modifies Step 1 of the goodwill
impairment test for reporting units with zero or negative carrying amounts by requiring performance of Step 2 of
the test if it is more likely than not that a goodwill impairment exists. Upon adoption of the ASU, an entity with areporting unit that has a carrying amounts that is zero or negative is required to assess whether it is more likely
than not that the reporting unit’s goodwill is impaired.
ASU 2010-28 is effective prospectively for fiscal years, and interim periods within those years, beginning
after December 15, 2010.
Nomura will adopt the new requirements from April 1, 2011 and they will not have a material impact onthese consolidated financial statements in the quarter of adoption.
F-26

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Fair value measurement disclosures
In January 2010, the FASB issued amendments to ASC 820 through issuance of ASU 2010-06 “Improving
Disclosures about Fair Value Measurements” (“ASU 2010-06”) which expands fair value disclosure
requirements, including a requirement that information about purchases, sales, issuances and settlements ofLevel 3 instruments be provided on a gross basis.
The majority of the disclosure requirements of ASU 2010-06 were effective for interim or annual periods
beginning after December 15, 2009, which for Nomura was the fourth quarter commencing on January 1, 2010.
Gross information on purchases, sales, issuances and settlements is required in fiscal years beginning after
December 15, 2010 which for Nomura will be within the fiscal year commencing on April 1, 2011 and interim
periods within that fiscal year.
Because the new requirements only introduce new disclosures and do not impact upon how Nomura
measures fair value, they are not expected to have a material impact on these consolidated financial statements.
Revenue recognition of multiple-deliverable revenue arrangements
In October 2009, the FASB issued amendments to ASC 605 “Revenue Recognition” through issuance ofASU 2009-13 “Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements-a consensus of
the FASB Emerging Issues Task Force” (“ASU 2009-13”), which amends the accounting for multipledeliverable arrangements to enable vendors to account for products or services separately rather than as a
combined unit.
ASU 2009-13 is effective prospectively from fiscal years beginning on or after June 15, 2010 with early
adoption permitted.
Nomura will adopt ASU 2009-13 from April 1, 2011 and it will not have a material impact on these
consolidated financial statements.
Other accounting developments—
Offsetting of financial instruments
In January 2011, as part of the ongoing plan to converge International Financial Reporting Standards andU.S. GAAP, the International Accounting Standards Board and the FASB issued an exposure draft significantly
restricting the rules for when financial instruments such as repurchase agreements and derivatives can be offset in
the balance sheet. In particular:•

Netting would be required (rather than permitted) only if Nomura has an unconditional and legally
enforceable right to set off financial instruments and intends either to settle the eligible asset and eligible
liability on a net basis or simultaneously (i.e. at the same moment);•

Netting collateral amounts against recognized financial assets and liabilities would not be permitted; and•Netting currently permitted under industry-specific accounting guidance, including guidance for brokerdealers such as Nomura, would be eliminated.

The exposure draft also introduces significant new disclosure requirements around netting and related
arrangements (such as collateral agreements) and the effect of those arrangements on net exposures.
Nomura is currently evaluating the requirements of the exposure draft, but expects adoption of the new
guidance, if it is issued as currently drafted, to result in a material increase in the size of Nomura’s consolidatedbalance sheet.
F-27

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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 ¥82.76 = U.S. $1.00, the noon buying rate in New York City for cable transfers in foreign currencies
as certified for customs purposes by the Federal Reserve Bank of New York on March 31, 2011. 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 fair value of financial instruments
A significant amount of Nomura’s financial instruments are carried at fair value or at amounts thatapproximate fair value. Financial assets carried at fair value on a recurring basis are reported in the consolidatedbalance sheets within Trading assets and private equity investments, Loans and receivables, Collateralized
agreements and Other assets. Financial liabilities carried at fair value on a recurring basis are reported within
Trading liabilities, Short-term borrowings, Payables and deposits, Collateralized financing, Long-termborrowings 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 but where fair value is used in specific circumstances, such as tomeasure impairment.
In all cases, fair value is determined in accordance with ASC 820 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 assets orfinancial liabilities.
Financial assets carried at fair value also include investments in certain funds for which Nomura applies
ASC 820 where, as a practical expedient, fair value is determined on the basis of net asset value per share (“NAV
per share”) if the NAV per share is calculated in accordance with certain industry standard principles.
Increases and decreases in the fair value of assets and liabilities will significantly impact Nomura’s position,
performance, liquidity and capital resources. As explained below, valuation techniques applied contain inherent
uncertainties and Nomura is unable to predict the accurate impact of future developments in the market. Where
appropriate, Nomura uses economic hedging strategies to mitigate its risk, although these hedges are also subject
to unpredictable movements in the market.
Valuation methodology for financial instruments carried at fair value on a recurring basis
The fair value of financial instruments is based on quoted market prices including market indices, broker ordealer quotations or an estimation by management of the expected exit price under current market conditions.
Various financial instruments, including cash instruments and over-the-counter (“OTC”) contracts, have bid andoffer prices that are observable in the market. These are measured at the point within the bid-offer range which
best represents Nomura’s estimate of fair value. Where quoted market prices or broker or dealer quotations are
not available, prices for similar instruments or valuation pricing models are considered in the determination offair value.

F-28

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 the valuation
technique or model selected, the quantitative assumptions used within the valuation model, the inputs into themodel, as well as other factors. Valuation adjustments are used to reflect the assessment of this uncertainty.
Common valuation adjustments include model reserves, credit adjustments, close-out adjustments, and otherappropriate instrument-specific adjustments, such as those to reflect transfer or sale 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 tomeasure counterparty credit risk on Nomura’s assets.
Such valuation pricing models are calibrated to the market on a regular basis and inputs used are adjusted
for current market conditions and risks. The global risk management unit reviews pricing models and assessesmodel appropriateness and consistency independently of the front office. The model reviews consider a numberof factors about a model’s suitability for valuation and sensitivity of a particular product. Valuation models arecalibrated to the market on a periodic basis by comparison to observable market pricing, comparison withalternative models, and analysis of risk profiles.
As explained above, any changes in fixed income, equity, foreign exchange and commodity markets canimpact Nomura’s estimates of fair value in the future, potentially affecting trading gains and losses. Where
financial contracts have longer maturity dates, Nomura’s estimates of fair value may involve greater subjectivity
due to the lack of transparent market data available upon which include base assumptions underlying valuation
pricing models.
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 has credit risk
concentrations on bonds issued by the Japanese Government, U.S. Government, Governments within theEuropean Union (“EU”), their states and municipalities, and their agencies. These concentrations generally arise
from taking trading securities positions and are reported within Trading assets in the consolidated balance sheets.
Government, state, municipal, and government agency securities, including Securities pledged as collateral,
represented 21% of total assets as of March 31, 2010 and 19% as of March 31, 2011. The following tables
F-29

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
present geographic allocations of Nomura’s trading assets related to government, state, municipal, andgovernment agency securities. See Note 4. “Derivative instruments and hedging activities” about theconcentration of credit risk for derivatives.
Billions of yen
March 31, 2010
U.S.
EU
Other

Japan

Governments, states, municipalities and their agencies . . . . . . . . . . .

¥2,756¥1,635Japan

Governments, states, municipalities and their agencies . . . . . . . . . . .

¥2,822¥232¥6,893

Billions of yen
March 31, 2011
U.S.
EU
Other

Total(1)¥1,184¥2,270Total(1)¥2,640¥370¥7,016

Translation into billions of U.S. dollars
March 31, 2011
Japan
U.S.
EU
Other Total(1)Governments, states, municipalities and their agencies . . . . . . . . . . .

$

34

$

14

$

32

$

5

$

85

(1) Other than above, there were ¥187 billion of government, state, municipal and agency securities in Other
assets—Non-trading debt securities as of March 31, 2010 and ¥410 billion ($4.95 billion) as of March 31,
2011. The vast majority of these securities are Japanese government, states, municipalities and agency
securities.
Fair value hierarchy
All financial instruments measured at fair value, including those carried at fair value using the fair value
option, have been categorized into a three-level hierarchy (“the fair value hierarchy”) based on the transparency
of inputs used by Nomura to estimate fair value. A financial instrument is classified in the fair value hierarchy
based on the lowest level of input that is significant to the fair value measurement of the instrument. The threelevels of the fair value hierarchy are defined as follows, with Level 1 representing the most transparent inputs
and Level 3 representing the least transparent inputs:
Level 1:
Unadjusted quoted prices in active markets for identical assets or liabilities accessible by Nomura at themeasurement date.
Level 2:
Quoted prices in inactive markets or prices containing other 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 independent market sources at themeasurement date.
Level 3:
Unobservable inputs that are significant to the fair value measurement of the financial instrument. Valuation
techniques using unobservable inputs reflect management’s assumptions about the estimates used by othermarket participants in valuing similar financial instruments. These valuation techniques are developed based on
the best available information at the measurement date.
F-30

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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 for customized products, how established the product is in the market, for example, whether it is a new
product or is relatively mature, and the reliability of information provided in the market which would depend, forexample, on the frequency and volume of current data. A period of significant change in the market may reduce
the availability of observable data. Under such circumstances, financial instruments may be reclassified into alower level in the fair value hierarchy.
Significant judgments used in determining the classification of financial instruments include the nature of
the market in which the product would be traded, the underlying risks, the type and liquidity of market data
inputs and the nature of observed transactions for similar instruments.
Where valuation models include the use of parameters which are less observable or unobservable in themarket, significant management judgment is used in establishing fair value. The valuations for Level 3 financial
instruments, therefore, involve a greater degree of judgment than those valuations for Level 1 or Level 2
financial instruments.
Certain criteria management use to determine whether a market is active or inactive include the number oftransactions, the frequency that pricing is updated by other market participants, the variability of price quotes
among market participants, and the amount of publicly available information.

F-31

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following tables present information about Nomura’s financial assets and financial liabilities measured
at fair value on a recurring basis as of March 31, 2010 and 2011, respectively within the fair value hierarchy.

Level 1

Level 2

Billions of yen
March 31, 2010
Counterparty
andCash Collateral
Level 3
Netting(1)

¥ 830
1
2,650
104
3,075

¥ 1,068
0
—
2
1,040

¥ 164
325
—
0
22

165
—
0
—
1
29

1,599
110
1,015
47
32
53

Total cash instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,855

Derivatives(4):Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Netting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

851
3
0
—
6
—

Assets:Trading assets and private equity investments(2)Equities(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Private equity(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese government securities . . . . . . . . . . . . . . . . . . . . . . . .
Japanese agency and municipal securities . . . . . . . . . . . . . . . .
Foreign government, agency and municipal securities . . . . . . .
Bank and corporate debt securities and loans for trading
purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial mortgage-backed securities (“CMBS”) . . . . . . . .
Residential mortgage-backed securities (“RMBS”) . . . . . . . . .
Mortgage and other mortgage-backed securities . . . . . . . . . . .
Collateralized debt obligations (“CDO”) . . . . . . . . . . . . . . . . .
Investment trust funds and other . . . . . . . . . . . . . . . . . . . . . . . .

¥Balance as ofMarch 31, 2010

—
—
—
—
—

¥ 2,062
326
2,650
106
4,137

131
27
4
117
43
10

—
—
—
—
—
—

1,895
137
1,019
164
76
92

4,966

843

—

12,664650
11,849
1,751
701
24
—

61
172
302
14
2
—

—
—
—
—
—
(14,350)

1,562
12,024
2,053
715
32(14,350)

Total derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

860

14,975551(14,350)

2,036

Sub Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥7,715¥19,941¥1,394¥(14,350)¥ 14,700

Loans and receivables(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8
383

674
26

10
38

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

¥8,106¥20,641¥1,442¥(14,350)¥ 15,839

Liabilities:
Trading liabilities
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese government securities . . . . . . . . . . . . . . . . . . . . . . . .
Foreign government, agency and municipal securities . . . . . . .
Bank and corporate debt securities . . . . . . . . . . . . . . . . . . . . . .
Residential mortgage-backed securities (“RMBS”) . . . . . . . . .

¥1,366
1,616
2,334
—
—

¥

¥

¥

—
—
—
—
—

¥ 1,562
1,616
2,760
257
2

Total cash instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,316

881

0

—

6,197

Derivatives(4):Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Netting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

941
3
0
—
5
—

790
11,742
1,660
765
25
—

29
163
360
16
2
—

—
—
—
—
—
(14,341)

1,760
11,9082,020
781
32(14,341)

196
—
426
257
2

0
—
—
0
—

—
—

692
447

Total derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

949

14,982570(14,341)

2,160

Sub Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥6,265¥15,863¥ 570¥(14,341)¥ 8,357

Short-term borrowings(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables and deposits(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term borrowings(7)(9)(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
—
91
3

101
0
1,521
3

9
(0)
(127)
—

—
—
—
—

110
0
1,485
6

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

¥6,359¥17,488¥ 452¥(14,341)¥ 9,958

F-32

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

Level 1

Level 2

Billions of yen
March 31, 2011
Counterparty
andCash Collateral
Level 3
Netting(1)

¥ 951
—
2,663
—
3,382

¥ 1,230
—
—
159
789

¥ 121
289
—
—
23

—
—
—
—
—
85

1,568
171
1,963
2
72
29

Total cash instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,081

Derivatives(4):Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Netting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

653
16
—
0
29
—

Assets:Trading assets and private equity investments(2)Equities(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Private equity(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese government securities . . . . . . . . . . . . . . . . . . . . . . . .
Japanese agency and municipal securities . . . . . . . . . . . . . . . .
Foreign government, agency and municipal securities . . . . . . .
Bank and corporate debt securities and loans for trading
purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial mortgage-backed securities (“CMBS”) . . . . . . . .
Residential mortgage-backed securities (“RMBS”) . . . . . . . . .
Mortgage and other mortgage-backed securities . . . . . . . . . . .
Collateralized debt obligations (“CDO”) . . . . . . . . . . . . . . . . .
Investment trust funds and other . . . . . . . . . . . . . . . . . . . . . . . .

¥Balance as ofMarch 31, 2011

—
—
—
—
—

¥ 2,302
289
2,663
159
4,194

51
28
3
128
34
10

—
—
—
—
—
—

1,619
199
1,966
130
106
124

5,983

687

—

13,751721
11,750
1,863
1,266
64
—

98
203
203
49
4
—

—
—
—
—
—
(15,428)

1,472
11,969
2,066
1,315
97
(15,428)

Total derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

698

15,664557(15,428)

1,491

Sub Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥7,779¥21,647¥1,244¥(15,428)¥ 15,242

Loans and receivables(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collateralized agreements(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
—
634

543
904
79

11
—
25

—
—
—

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

¥8,413¥23,173¥1,280¥(15,428)¥ 17,438

Liabilities:
Trading liabilities
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese government securities . . . . . . . . . . . . . . . . . . . . . . . .
Japanese agency and municipal securities . . . . . . . . . . . . . . . .
Foreign government, agency and municipal securities . . . . . . .
Bank and corporate debt securities . . . . . . . . . . . . . . . . . . . . . .
Commercial mortgage-backed securities (“CMBS”) . . . . . . . .
Residential mortgage-backed securities (“RMBS”) . . . . . . . . .
Collateralized debt obligations (“CDO”) . . . . . . . . . . . . . . . . .
Investment trust funds and other . . . . . . . . . . . . . . . . . . . . . . . .

¥1,444
1,588
—
3,018
—
—
—
—
64

¥

91
—
2
509
316
1
0
0
—

¥ —
—
—
—
—
—
—
—
—

¥

—
—
—
—
—
—
—
—
—

¥ 1,535
1,588
2
3,527
316
1
0
0
64

Total cash instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,114

919

—

—

7,033

Derivatives(4):Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Netting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

723
15
—
0
19
—

784
11,861
1,835
1,341
82
—

70
192
258
47
6
—

—
—
—
—
—
(15,577)

1,577
12,068
2,093
1,388
107
(15,577)

Total derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

757

15,903573(15,577)

1,656

Sub Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥6,871¥16,822¥ 573¥(15,577)¥ 8,689

Short-term borrowings(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables and deposits(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collateralized financing(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term borrowings(7)(9)(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
—
—
126
44

182
0
332
1,663
—

1
1
—
144
—

—
—
—
—
—

183
1
332
1,933
44

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

¥7,041¥18,999¥ 719¥(15,577)¥ 11,182

F-33

554
904
738

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

Level 1

Translation into billions of U.S. dollars
March 31, 2011
Counterparty
andCash Collateral
Balance as ofLevel 2 Level 3
Netting(1)March 31, 2011

Assets:Trading assets and private equity investments(2)Equities(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11.50 $ 14.87——
Private equity(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese government securities . . . . . . . . . . . . . . . . . . . . . . . .
32.18—
Japanese agency and municipal securities . . . . . . . . . . . . . . . .
—1.92
Foreign government, agency and municipal securities . . . . . .
40.87
9.53
Bank and corporate debt securities and loans for trading
purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—18.94
Commercial mortgage-backed securities (“CMBS”) . . . . . . . .
—2.06
Residential mortgage-backed securities (“RMBS”) . . . . . . . . .
—23.72
Mortgage and other mortgage-backed securities . . . . . . . . . . .
—0.02
Collateralized debt obligations (“CDO”) . . . . . . . . . . . . . . . . .
—0.87
Investment trust funds and other . . . . . . . . . . . . . . . . . . . . . . .
1.03
0.35

$ 1.46
3.50
—
—
0.28

$

—
—
—
—
—

$ 27.83
3.50
32.18
1.92
50.68

0.61
0.34
0.04
1.55
0.41
0.12

—
—
—
—
—
—

19.55
2.40
23.76
1.57
1.28
1.50

Total cash instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

85.58

72.28

8.31

—

166.17

Derivatives(4):Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Netting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.89
0.19
—
0.00
0.35
—

8.71
141.98
22.51
15.30
0.77
—

1.18
2.45
2.45
0.59
0.05
—

—
—
—
—
—
(186.42)17.78
144.62
24.96
15.89
1.17
(186.42)

Total derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8.43

189.27

6.72(186.42)

18.00

Sub Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 94.01$261.55$15.03$(186.42)$ 184.17

Loans and receivables(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collateralized agreements(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
—
7.66

6.56
10.92
0.96

0.14
—
0.30

—
—
—

6.70
10.92
8.92

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

$101.67$279.99$15.47$(186.42)$ 210.71

1.10
—
0.02
6.16
3.82
0.01
0.00
0.00
—

$ —
—
—
—
—
—
—
—
—

$

—
—
—
—
—
—
—
—
—

$ 18.55
19.19
0.02
42.62
3.82
0.01
0.00
0.00
0.77

Liabilities:
Trading liabilities
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 17.45 $Japanese government securities . . . . . . . . . . . . . . . . . . . . . . . .
19.19
Japanese agency and municipal securities . . . . . . . . . . . . . . . .
—Foreign government, agency and municipal securities . . . . . .
36.46
Bank and corporate debt securities . . . . . . . . . . . . . . . . . . . . . .
—Commercial mortgage-backed securities (“CMBS”) . . . . . . . .
—Residential mortgage-backed securities (“RMBS”) . . . . . . . . .
—Collateralized debt obligations (“CDO”) . . . . . . . . . . . . . . . . .
—Investment trust funds and other . . . . . . . . . . . . . . . . . . . . . . .
0.77
Total cash instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

73.87

11.11

—

—

84.98

Derivatives(4):Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Netting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8.74
0.18
—
0.00
0.23
—

9.47
143.32
22.17
16.20
0.99
—

0.85
2.32
3.12
0.57
0.07
—

—
—
—
—
—
(188.22)19.06
145.82
25.29
16.77
1.29
(188.22)

Total derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.15

192.15

6.93(188.22)

20.01

Sub Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 83.02$203.26$ 6.93$(188.22)$ 104.99

Short-term borrowings(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables and deposits(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collateralized financing(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term borrowings(7)(9)(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
—
—
1.52
0.53

2.21
0.00
4.01
20.09
—

0.01
0.01
—
1.74
—

—
—
—
—
—

2.22
0.01
4.01
23.35
0.53

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

$ 85.07$229.57$ 8.69$(188.22)$ 135.11

F-34

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(1) Represents the amount offset under counterparty netting of derivative assets and liabilities as well as cash collateral netting against net
derivatives.
(2) Includes investments in certain funds measured at fair value on the basis of NAV per share as a practical expedient.
(3) Includes equity investments that would have been accounted for under the equity method had Nomura not chosen to elect the fair value
option.
(4) Each derivative classification includes derivatives referencing multiple risk components. For example, interest rates contracts include
complex derivatives referencing interest rate risk as well as foreign exchange risk or other factors such as prepayment speeds. Credit
contracts include credit default swaps as well as derivatives referencing corporate and government bonds. Derivatives previouslyclassified under “Other contracts” have been reclassified based on the above methodology. Previously reported amounts have been
reclassified to conform to the current period presentation.
(5) Includes loans elected for the fair value option.
(6) Includes collateralized agreements or collateralized financing elected for the fair value option.
(7) Includes structured notes elected for the fair value option.
(8) Includes embedded derivatives bifurcated from deposits received at banks. If unrealized gains are greater than unrealized losses, deposits
are reduced by the excess amount.
(9) Includes embedded derivatives bifurcated from issued structured notes. If unrealized gains are greater than unrealized losses, borrowings
are reduced by the excess amount.
(10) Includes liabilities recognized from secured financing transactions that are accounted for as financings rather than sales. Nomura elected
the fair value option for these liabilities.

Valuation methodology by major class of financial asset and financial liability
The valuation methodology used by Nomura to estimate fair value for major classes of financial assets andfinancial liabilities, together with the significant inputs which determine classification in the fair value hierarchy,
is as follows:
Equities—Equities include direct holdings of both listed and unlisted equity securities, and fundinvestments. Listed equity securities are valued using quoted prices for identical securities from active markets
where available. These valuations should be in line with market practice and therefore can be based on bid/offer
prices as applicable or mid-market prices. Nomura determines whether the market is active depending on thesufficiency and frequency of trading activity. Where these securities are classified in Level 1 of the fair value
hierarchy, no valuation adjustments are made to fair value, even if Nomura has a large “block” holding and theblock could not be disposed of in its entirety at the quoted price. Listed equities traded in inactive markets arevalued using the exchange price as adjusted to reflect liquidity and bid offer spreads and are classified in Level 2.
Unlisted equity securities are valued using the same methodology as private equity investments described below
and are usually classified as Level 3 because of the management judgment involved. As a practical expedient,
fund investments are generally valued using NAV per share where available. Publicly traded mutual funds which
are valued using a daily NAV per share are classified as Level 1. Investments in funds where Nomura has theability to redeem its investment with the investee at NAV per share as of the balance sheet date or within the nearterm are classified as Level 2. Investments in funds where Nomura does not have the ability to redeem in the nearterm or does not know when it can redeem are classified as Level 3.
Private equity—The valuation of unlisted private equity investments 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 madeif there is third-party evidence of a change in value. Adjustments are also made, in the absence of third-party
transactions, if it is determined that the expected exit price of the investment is different from the carrying value.
In reaching that determination, Nomura primarily uses either its own internal valuation models based on
estimated future cash flows to be generated from the underlying investment, discounted at a weighted average
cost of capital or comparable market multiple valuations such as EV/EBITDA (Enterprise Value/EBITDA), PE
Ratio (Price/Earnings Ratio), Price/Embedded Value Ratio and other multiples based on relationships between
numbers reported in the financial statements and the price of comparable companies. Where possible thesevaluations are compared with the operating cash flows and financial performance of the companies or properties
F-35

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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 andliquidation preferences. Private equity investments are generally classified as Level 3.
Government, state, municipal and agency securities—Japanese and other G7 government securities arevalued using quoted market prices, broker or dealer quotations, or alternative pricing sources. These securities
are traded in active markets and therefore are classified within Level 1 of the fair value hierarchy. Non-G7
government securities, agency securities and municipal securities are valued using similar pricing sources but are
generally classified as Level 2 as they are traded in markets that are not considered to be active. Certain non-G7
securities may be classified as Level 1 because they trade in active markets. Certain securities may be classified
as Level 3 because they trade infrequently and there is not sufficient information from comparable securities toclassify them as Level 2.
Corporate debt securities—The valuation of corporate debt securities is primarily performed using internal
models and market inputs such as price quotes and recent market transactions of identical or similar debt, yield
curves, asset swap spreads and credit default spreads. Most corporate debt securities are classified in Level 2
because the modeling inputs are usually observable. Certain corporate debt securities may be classified as
Level 1 because they trade in active markets where there is sufficient information from a liquid exchange or
multiple sources and they are valued using an unadjusted quote for an identical instrument. Certain securities
may be classified as Level 3 because they trade infrequently and there is insufficient information fromcomparable securities to classify them as Level 2.
Commercial mortgage-backed securities (“CMBS”) and Residential mortgage-backed securities(“RMBS”)—The fair value of CMBS and RMBS is estimated using quoted market prices, recent market
transactions or by reference to a comparable market index. CMBS and RMBS securities are classified primarily
as Level 2 if all significant inputs are observable. For certain asset classes, no direct pricing sources orcomparable indices are available and valuation is based on a combination of indices. These securities areclassified as Level 3.
Mortgage and other mortgage-backed securities—The fair value of other mortgage backed securities is
estimated using quoted market prices, recent market transactions or by reference to a comparable market index.
Where all significant inputs are observable, the securities will be classified as Level 2. For certain securities, nodirect pricing sources or comparable securities or indices may be available. These securities are classified as
Level 3.
Collateralized debt obligations (“CDO”)—CDOs are valued using internal models where quoted market
prices do not exist. Key inputs used by the model include market spread data for each credit rating, prepayment
speeds, recovery rates and default probabilities. Since some of these inputs are unobservable, certain CDOs areclassified as Level 3 where the unobservable inputs are significant.
Investment trust funds and other—Investment trust funds are generally valued using NAV per share.
Publicly traded funds which are valued using a daily NAV per share are classified as Level 1. For funds that are
not publicly traded but Nomura has the ability to redeem its investment with the investee at NAV per share on
the balance sheet date or within the near term, the investments are classified as Level 2. Investments where
Nomura does not have the ability to redeem in the near term or does not know when it can redeem are classified
as Level 3.

F-36

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Derivatives—Exchange-traded derivatives are usually valued using unadjusted quoted market prices and are
therefore classified as Level 1. Where exchange-traded derivatives are not valued at the exchange price due totiming differences, these are classified as Level 2. OTC derivatives are valued by internal models using market
transactions and other market evidence whenever possible, including market-based inputs to models, model
calibration to market clearing transactions, broker or dealer quotations, or alternative pricing sources withreasonable levels of price transparency. Valuation techniques include simple discounted expected cash flow
techniques and Black-Scholes and Monte Carlo simulations. For OTC derivatives that trade in liquid markets,
such as plain vanilla forwards, swaps and options, model inputs can generally be verified and model selection
does not involve significant management judgment. OTC derivatives are classified within Level 2 of the fairvalue hierarchy when all of the significant inputs can be corroborated to market evidence. Derivatives that arevalued using models with significant unobservable inputs such as correlation, long-dated volatility, credit curves
or other unobservable inputs are classified within Level 3. Examples of derivatives classified as Level 3 byNomura include exotic interest rate derivatives, exotic foreign exchange derivatives, exotic equity derivatives,
exotic derivatives including a combination of interest rate, foreign exchange and equity risks and certain othertransactions including long-dated or exotic credit derivatives. Valuation adjustments are recorded to model
valuations which do not calibrate to market and consider all factors that would impact fair value including bid
offer, liquidity and credit risk; both with regards to counterparty credit risk on derivative assets and Nomura’s
own creditworthiness on derivative liabilities.
Loans—Loans carried at fair value either as trading assets or through election of the fair value option arevalued primarily through internal models using similar inputs to corporate debt securities as quoted prices areusually not available. Where there are no significant inputs which are unobservable, loans are classified as
Level 2. Certain loans, however, may be classified as Level 3 because they are traded infrequently and there isnot sufficient information from comparable securities to classify them as Level 2.
Collateralized agreements and Collateralized financing—Resale and repurchase agreements carried at fairvalue through election of the fair value option are valued using discounted cash flow models. Key inputs include
expected future cash flows, interest rates and collateral funding spreads such as general collateral or special rates.
Resale and repurchase agreements are generally classified in Level 2 of the fair value hierarchy as unobservable
inputs are not significant. Where the unobservable inputs are significant, they will be classified in Level 3.
Short-term and long-term borrowings (“Structured notes”)—Structured notes are debt securities issued by
Nomura which contain embedded features that alter the return to the investor from simply receiving a fixed or
floating rate of interest to a return that depends upon some other variables, such as an equity or equity index,
commodity price, foreign exchange rate, credit rating of a third party or a more complex interest rate. The fairvalue of structured notes is estimated using a quoted price in an active market for the identical liability if
available, and where not available, using a mixture of valuation techniques that use the quoted price of theidentical liability when traded as an asset, quoted prices for similar liabilities, similar liabilities when traded asassets, and also the amount at the measurement date that Nomura would pay to transfer the identical liability or
would receive if the identical liability is entered at the measurement date. The fair value of structured notes
includes an adjustment to reflect Nomura’s own creditworthiness. This adjustment can differ depending on themarket in which the structured note is issued and traded. Structured notes are generally classified in Level 2 ofthe fair value hierarchy as unobservable inputs are not significant. Where the unobservable inputs are significant,they will be classified in Level 3.
Long-term borrowings (“Secured financing transactions”)—Secured financing transactions are liabilities
recognized when a transfer of a financial asset does not meet the criteria for sales accounting under ASC 860 andtherefore the transaction is accounted for as a secured borrowing. This liability is valued using the same
methodology that is applied to the transferred financial assets which remain on the consolidated balance sheets
F-37

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
and is therefore classified in the same level in the fair value hierarchy as the transferred financial assets. Theseliabilities do not provide general recourse to Nomura and therefore no adjustment is made to reflect Nomura’s
own creditworthiness.
Level 3 financial assets and financial liabilities
Level 3 financial assets and financial liabilities consist of instruments whose valuations are significantly
dependent on inputs which are unobservable in the market.
Financial instruments classified as Level 3 are often hedged with instruments within Level 1 or Level 2 ofthe fair value hierarchy. The gains or losses presented 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. Fairvalue changes presented below, therefore, reflect realized and unrealized gains and losses resulting frommovements in both observable and unobservable parameters.

F-38

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following tables present the gains and losses as well as increases and decreases of assets and liabilities
measured at fair value on a recurring basis which Nomura classified as Level 3 for year ended March 31, 2010
and 2011, respectively.
Billions of yen
Year ended March 31, 2010
Unrealized and realized gains/losses included in revenue

Purchases
Gain (loss) on(issuances) /Balanceinvestments Gain (loss) Interest and
Total
sales
Net
Balance
as of Net gainin equity
on private dividends /unrealized (redemption), transfers
as ofApril 1, (loss) on
securities
equityInterest
and realized
andin / (out of) March 31,
2009 trading and other(1) investments expense gains / (losses) settlement(2) Level 3(4)2010

Assets:Trading assets and private
equity investments
Equities . . . . . . . . . . . . . . . . ¥Private equity . . . . . . . . . . . .
Japanese agency andmunicipal securities . . . . .
Foreign government, agency
and municipal
securities . . . . . . . . . . . . .
Bank and corporate debt
securities and loans for
trading purposes . . . . . . .
Commercial mortgagebacked securities(“CMBS”) . . . . . . . . . . . .
Residential mortgagebacked securities(“RMBS”) . . . . . . . . . . . .
Mortgage and othermortgage-backed
securities . . . . . . . . . . . . .
Collateralized debt
obligations (“CDO”) . . . .
Investment trust funds andother . . . . . . . . . . . . . . . . .

284
322

¥ (13)
—

¥—
—

¥—
10

¥ (1)
—

¥ (14)
10¥ (31)
(7)

0

0

—

—

—

0

0

34

3

—

—

—

3

485

0

—

—

0

12

(13)

—

—

12

(0)

—

234

9

17

2

¥ (75)
—

¥ 164
325

—

0

(11)

(4)

22

0

(176)

(178)

131

—

(13)

83

(55)

27

—

—

(0)

(10)

2

4

—

—

—

9

(126)

0

117

—

—

—

2

24

(0)

43

5

0

—

—

—

0

4

1

10

1,405

(12)

—

10

(1)

(3)

(250)

(309)

843

0
63
196

9
(36)
(140)

—
—
—

—
—
—

—
—
—

9
(36)
(140)

25
(9)
(66)

(2)
(9)
(48)

32
9
(58)

(2)
10

2
(5)

—
—

—
—

—
—

2
(5)

(4)
(6)

2
1

(2)
(0)

Total cash instruments . . . . .
Derivatives, net(5)Equity contract . . . . . . . .
Interest rate contracts . . .
Credit contracts . . . . . . . .
Foreign exchange
contracts . . . . . . . . . . .
Commodity contracts . . .

267

(170)

—

—

—

(170)

(60)

(56)

(19)

Sub Total . . . . . . . . . . . . . . . . . . . ¥1,672

Total derivatives, net . . . . . .

¥(182)

¥—

¥ 10

¥ (1)

¥(173)¥(310)¥(365)

¥ 824

1
(2)

(0)
(10)

5
(0)

10
38

Loans and receivables . . . . .
Other assets . . . . . . . . . . . . .

4
50

1
(1)

—
(1)

—
—

—
—

Total . . . . . . . . . . . . . . . . . . . . . . ¥1,726¥(182)

¥ (1)

¥ 10

¥ (1)

¥(174)¥(320)¥(360)¥ 872

Liabilities:
Trading liabilities
Equities . . . . . . . . . . . . . . . . ¥Bank and corporate debt
securities . . . . . . . . . . . . .

¥

¥—

¥—

¥—

¥

¥

(0)

¥

(1)

¥

0

(0)

Sub Total . . . . . . . . . . . . . . . . . . . ¥

1

¥

(0)

¥

(1)

¥

0

Short-term borrowings . . . . . .
Payables and deposits . . . . . . .
Long-term borrowings . . . . . . .

8
(1)
(81)

1

0

0

(0)

—

—

—

0

¥—

¥—

¥—

7
(1)
52

—
—
—

—
—
—

—
—
—

7
(1)
52

11
(0)
149

(3)
(0)
(143)

9
(0)
(127)

Total . . . . . . . . . . . . . . . . . . . . . . ¥ (73) ¥ 58

¥—

¥—

¥—

¥ 58

¥ 160

¥(147)¥(118)

¥

F-39

(0)
¥

0

(0)

(0)

0

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Billions of yen
Year ended March 31, 2011
Unrealized and realized gains/losses included in revenue

Purchases
Gain (loss) on(issuances) /Balanceinvestments Gain (loss) Interest and
Total
sales
Net
Balance
as of Net gainin equity
on private dividends /unrealized (redemption), transfers
as ofApril 1, (loss) on
securities
equityInterest
and realized
andin / (out of) March 31,(1)(2)(3)(4)2010 trading and otherinvestments expense gains / (losses) settlement
Level 3
2011

Assets:Trading assets and private
equity investments
Equities . . . . . . . . . . . . . . . . ¥ 164
Private equity . . . . . . . . . . .
325
Japanese agency andmunicipal securities . . . . .
0Foreign government, agency
and municipal
securities . . . . . . . . . . . . .
22Bank and corporate debt
securities and loans for
trading purposes . . . . . . .
131
Commercial mortgagebacked securities(“CMBS”) . . . . . . . . . . . .
27
Residential mortgagebacked securities(“RMBS”) . . . . . . . . . . . .
4Mortgage and othermortgage-backed
securities . . . . . . . . . . . . .
117
Collateralized debt
obligations (“CDO”) . . . .
43Investment trust funds andother . . . . . . . . . . . . . . . .
10
Total cash instruments . . . . .
Derivatives, net(5)Equity contract . . . . . . . .
Interest rate contracts . . .
Credit contracts . . . . . . . .
Foreign exchange
contracts . . . . . . . . . . .
Commodity contracts . . .
Total derivatives, net . . . . . .

¥ (1)
—

¥—
—

¥—
19

¥ (1)
0

¥ (2)
19

¥ (33)
(55)

¥ (8)
—

¥121
289

0

—

—

—

0

3

(3)

—

6

—

—

—

6

5

(10)

23

8

—

—

0

8

(37)

(51)

51

6

—

—

—

6

5

(10)

28

1

—

—

—

1

(2)

0

3

0

—

—

—

0

9

2

128

1

—

—

—

1

(10)

0

34

0

—

—

—

0

(0)

—

10

843

21

—

19

(1)

39

(115)

(80)

687

32
9
(58)

30
80
(51)

—
—
—

—
—
—

—
—
—

30
80
(51)

(39)
(71)
50

5
(7)
4

28
11
(55)

(2)
(0)

(2)
(6)

—
—

—
—

—
—

(2)
(6)

(1)
3

7
1

2
(2)

(19)

51

—

—

—

51

(58)

10

(16)

Sub Total . . . . . . . . . . . . . . . . . . . ¥ 824

¥ 72

¥—

¥ 19

¥ (1)

¥ 90

¥(173)¥ (70)

¥671

10
38

0
(0)

—
1

—
—

—
—

0
1

7
(1)

(6)
(13)

11
25

Total . . . . . . . . . . . . . . . . . . . . . . ¥ 872

¥ 72

¥

¥ 19

¥ (1)

¥ 91

¥(167)¥ (89)

¥707

¥ (0)

¥—

¥—

¥—

¥ (0)

¥

0

¥ (0)

¥—

0

—

—

—

0

0

(0)

—

Loans and receivables . . . . .
Other assets . . . . . . . . . . . . .

Liabilities:
Trading liabilities
Equities . . . . . . . . . . . . . . . . ¥ 0
Foreign government, agency
and municipal
securities . . . . . . . . . . . . .
—Bank and corporate debt
securities . . . . . . . . . . . . .
0

1

0

—

—

—

0

0

¥—

¥—

¥—

¥ 0

9
(0)
(127)

1
0
49

—
—
—

—
—
—

—
—
—

Total . . . . . . . . . . . . . . . . . . . . . . ¥(118)

¥ 50

¥—

¥—

¥—

Sub Total . . . . . . . . . . . . . . . . . . . ¥Short-term borrowings . . . . . .
Payables and deposits . . . . . . .
Long-term borrowings . . . . . .

0

¥

F-40

(0)

(0)

—

(0)

¥ (0)

¥—

1
0
49

(6)
1
295

(1)
(0)
25

1
1
144

¥ 50

¥ 290

¥ 24

¥146

¥

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Translation into billions of U.S. dollars
Year ended March 31, 2011
Unrealized and realized gains/losses included in revenue
Purchases
Gain (loss) on(issuances) /investments Gain (loss) Interest and
Total
sales
Balance Net gain
Net
Balancein equity
on private dividends /unrealized (redemption), transfers
as of
as of
(loss)
onsecurities
equityInterest
andrealizedandApril 1,in /(out of) March 31,
2010
trading and other(1) investments
expensegains /(losses) settlement(2)(3) Level 3(4)2011

Assets:Trading assets and private
equity investments
Equities . . . . . . . . . . . . . . . . $ 1.98 $(0.01)
Private equity . . . . . . . . . . . .
3.93—Japanese agency andmunicipal securities . . . . .
0.00
0.00
Foreign government, agency
and municipal
securities . . . . . . . . . . . . .
0.27
0.07
Bank and corporate debt
securities and loans for
trading purposes . . . . . . . .
1.58
0.10
Commercial mortgagebacked securities(“CMBS”) . . . . . . . . . . . .
0.33
0.07
Residential mortgage-backed
securities (“RMBS”) . . . .
0.05
0.01
Mortgage and othermortgage-backed
securities . . . . . . . . . . . . .
1.41
0.00
Collateralized debt
obligations (“CDO”) . . . .
0.52
0.01
Investment trust funds andother . . . . . . . . . . . . . . . . .
0.12
0.00
Total cash instruments . . . . .

$—
—

$—
0.23

$(0.01)0.00$(0.02)0.23$(0.40)(0.66)$(0.10)—$ 1.46
3.50

—

—

—

0.00

0.04

(0.04)

—

—

—

—

0.07

0.06

(0.12)

0.28

—

—

0.00

0.10

(0.45)(0.62)

0.61

—

—

—

0.07

0.06

(0.12)

0.34

—

—

—

0.01

(0.02)

0.00

0.04

—

—

—

0.00

0.12

0.02

1.55

—

—

—

0.01

(0.12)

0.00

0.41

—

—

—

0.00

(0.00)

—

0.12

10.19

0.25

—

0.23

(0.01)

0.47(1.37)(0.98)

8.31

Derivatives, net(5)Equity contract . . . . . . . . .
Interest rate contracts . . . .
Credit contracts . . . . . . . .
Foreign exchange
contracts . . . . . . . . . . . .
Commodity contracts . . . .

0.39
0.11
(0.70)

0.36
0.97(0.62)

—
—
—

—
—
—

—
—
—

0.36
0.97
(0.62)(0.48)(0.87)
0.60

0.06(0.08)
0.05

0.33
0.13
(0.67)(0.02)(0.00)(0.02)(0.07)

—
—

—
—

—
—

(0.02)(0.07)(0.01)
0.04

0.07
0.01

0.02
(0.02)

Total derivatives, net . . . . . .

(0.22)

0.62

—

—

—

0.62

(0.72)

0.11(0.21)

Sub Total . . . . . . . . . . . . . . . . . . . $ 9.97 $ 0.87

$—

$0.23

$(0.01)$ 1.09$(2.09)$(0.87)$ 8.100.00(0.00)

—
0.01

—
—

—
—

0.00
0.01

0.08
(0.01)(0.06)(0.16)

0.14
0.30

Total . . . . . . . . . . . . . . . . . . . . . . . $10.55 $ 0.87

$0.01

$0.23

$(0.01)$ 1.10$(2.02)$(1.09)$ 8.54—$—$ —$(0.00)$ 0.00$(0.00)

$ —

—

—

—

0.00

0.00

(0.00)

—

—

—

—

0.00

(0.00)(0.00)—

Loans and receivables . . . . .
Other assets . . . . . . . . . . . . .

0.12
0.46

Liabilities:
Trading liabilities
Equities . . . . . . . . . . . . . . . . $ 0.00 $(0.00)
Foreign government, agency
and municipal
securities . . . . . . . . . . . . .
—0.00Bank and corporate debt
securities . . . . . . . . . . . . .
0.00
0.00
Sub Total . . . . . . . . . . . . . . . . . . . $ 0.00 $ 0.00

$—

$—

$ —

$ 0.00$(0.00)$(0.00)

$ —

0.01
0.00
0.59

—
—
—

—
—
—

—
—
—

0.01
0.00
0.59

(0.07)
0.01
3.56(0.01)(0.00)
0.30

0.01
0.01
1.74

Total . . . . . . . . . . . . . . . . . . . . . . . $ (1.43) $ 0.60

$—

$—

$ —

$ 0.60$ 3.50$ 0.29$ 1.76

Short-term borrowings . . . . . . .
Payables and deposits . . . . . . .
Long-term borrowings . . . . . . .

0.10(0.00)(1.53)F-41

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(1)
(2)
(3)
(4)

Includes gains and losses reported within Revenue—Other and Non-interest expenses—Other in the consolidated statements of operations.
Includes the effect of foreign exchange movements.
Includes the effect from the application of ASC 810 which has been amended in accordance with ASU 2009-16 and ASU 2009-17.
If assets and liabilities move from Level 3 to another Level or move from another Level to Level 3, the amount reported in Net transfers
in / (out of) Level 3 is the fair value as of the beginning of the quarter during which the movement occurs. Therefore if assets andliabilities move from another Level to Level 3 all gains/(losses) during the quarter are included in the table and if assets and liabilities
move from Level 3 to another Level all gains/(losses) during the quarter are excluded from the table.
(5) Each derivative classification includes derivatives referencing multiple risk components. For example, interest rate contracts include
complex derivatives referencing interest rate risk as well as foreign exchange risk or other factors such as prepayments speeds. Credit
contracts include credit default swaps as well as derivatives referencing corporate and government bonds. Derivatives previouslyclassified under “Other contracts” have been reclassified based on the above methodology. Previously reported amounts have been
reclassified to conform to the current period presentation.

Significant transfers between levels during the year
Nomura assumes that transfer of the assets and liabilities from one Level to another Level occurs at the
beginning of each quarter. Classification of derivatives includes derivatives referencing multiple risk
components. For example, interest rate contracts include complex derivatives referencing interest rate risk as well
as foreign exchange risk or other factors such as prepayments speeds. Credit contracts include credit default
swaps as well as derivatives referencing corporate and government bonds. Derivatives previously classified
under “Other contracts” have been reclassified based on the above methodology. Previously reported amounts
have been reclassified to conform to the current period presentation.
Transfers between Level 1 and Level 2
There were no significant transfers between Level 1 and Level 2 for the years ended March 31, 2010 and 2011.
Transfers between Level 1 or Level 2 and Level 3
Trading assets and private equity investments—Equities For the year ended March 31, 2010,
approximately ¥61 billion were transferred from Level 3 to Level 2 due to the amendments to ASC 820 requiredby ASU 2009-12. For the year ended March 31, 2011, there were no significant transfers between Level 1 orLevel 2 and Level 3.
Trading assets and private equity investments—Bank and corporate debt securities and loans for trading
purposes For the year ended March 31, 2010, approximately ¥82 billion was transferred from Level 3 toLevel 2 due to the amendment of ASC 820 required by ASU 2009-12 and approximately ¥55 billion wastransferred from Level 3 to Level 2 as certain market parameters became observable. For the year ended
March 31, 2011, approximately ¥43 billion ($0.52 billion) was transferred from Level 3 to Level 2 as certain
market parameters became observable.
Trading assets and private equity investments—Commercial mortgage-backed securities For the year
ended March 31, 2010, approximately ¥54 billion was transferred from Level 3 to Level 2 as external prices
became observable. For the year ended March 31, 2011, there were no significant transfers between Level 1orLevel 2 and Level 3.
Derivatives, net For the year ended March 31, 2010, interest rate contracts of approximately ¥63 billion
were transferred from Level 3 to Level 2 due to the lowest level of significant inputs to value these derivatives
moving from Level 3 to Level 2. Credit contracts of approximately ¥42 billion were transferred from Level 3 toLevel 2 as underlying credit inputs became more transparent. Interest rate contracts of approximately ¥54 billion
were transferred from Level 2 to Level 3 due to the lowest level of significant inputs to value these derivatives
F-42

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
moving from Level 2 to Level 3. Losses on interest rate contracts from the transfer from Level 2 to Level 3 were
¥5 billion which were recognized in the quarter when the transfer from Level 2 to Level 3 occurred. For the year
ended March 31, 2011, there were no significant transfers between Level 1 or Level 2 and Level 3.
Long-term borrowings For the year ended March 31, 2010, structured notes of approximately ¥154 billion
were transferred from Level 3 to Level 2 as the underlying reference assets of the notes became observable. For
the year ended March 31, 2011, there were no significant transfers between Level 1or Level 2 and Level 3.
The following table presents the amounts of unrealized gains (losses) for the year ended March 31, 2010 and2011 respectively, relating to those financial instruments which Nomura classified as Level 3 within the fairvalue hierarchy and that were still held by Nomura at the balance sheet date:Billions of yen
Year ended March 31, 2010
Gain (loss) on
Net gain investments in Gain (loss) on
Interest andTotal(loss) on equity securities private equity
dividends /unrealized(1)
trading
investments Interest expense gains /(losses)
and other

Assets:Trading assets and private equity investments
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Private equity . . . . . . . . . . . . . . . . . . . . . . . .
Japanese agency and municipal securities . .
Foreign government, agency and municipal
securities . . . . . . . . . . . . . . . . . . . . . . . . . .
Bank and corporate debt securities and loans
for trading purposes . . . . . . . . . . . . . . . . .
Commercial mortgage-backed securities(“CMBS”) . . . . . . . . . . . . . . . . . . . . . . . . .
Residential mortgage-backed securities(“RMBS”) . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgage and other mortgage-backed
securities . . . . . . . . . . . . . . . . . . . . . . . . . .
Collateralized debt obligations (“CDO”) . . .
Investment trust funds and other . . . . . . . . . .
Total cash instruments . . . . . . . . . . . . . . . . . . . . .
Derivatives, net(2):Equity contracts . . . . . . . . . . . . . . . . . . . . . . .
Interest rate contracts . . . . . . . . . . . . . . . . . .
Credit contracts . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . .
Total derivatives, net . . . . . . . . . . . . . . . . . . . . . . .
Sub Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans and receivables . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities:
Trading liabilities
Bank and corporate debt
securities . . . . . . . . . . . . . . . . . . . . . . . . . .
Sub Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term borrowings . . . . . . . . . . . . . . . . . . . . .
Payables and deposits . . . . . . . . . . . . . . . . . . . . . .
Long-term borrowings . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 2
—
0

¥—
—
—

¥—
4
—

¥ (1)
—
—

¥ 1
4
0

(2)

—

—

—

(2)

37

—

—

—

37

2

—

—

—

2

(0)

—

—

—

(0)

(7)
3
1
36

—
—
—
—

—
—
—
4

—
—
—
(1)

(7)
3
1
39

40
32
(98)
0
0
(26)
¥ 10
(1)
—
¥ 9

—
—
—
—
—
—
¥—
—
(1)
¥ (1)

—
—
—
—
—
—
¥ 4
—
—
¥ 4

—
—
—
—
—
—
¥ (1)
—
—
¥ (1)

40
32
(98)
0
0
(26)
¥ 13
(1)
(1)
¥ 11

¥ (0)
¥ (0)
6
(1)
(66)
¥ (61)

¥—
¥—
—
—
—
¥—

¥—
¥—
—
—
—
¥—

¥—
¥—
—
—
—
¥—

¥ (0)
¥ (0)
6
(1)
(66)
¥(61)

F-43

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Billions of yen
Year ended March 31, 2011
Net gain(loss) on
tradingGain (loss) on
investments inequity securities
and other(1)

¥ (7)
—

Gain (loss) on
private equity
investments

Interest anddividends /Interest expense

Total
unrealized
gains / (losses)

¥—
—

¥—

¥ (1)
—

¥ (8)
8

1

—

—

—

1

(1)

—

—

—

(1)

9

—

—

—

9

0

—

—

—

0

(5)

—

—

—

(5)

(0)

—

—

—

(0)

0

—

—

—

0

(3)

—

8

(1)

4

Equity contracts . . . . . . . . . . .
Interest rate contracts . . . . . . .
Credit contracts . . . . . . . . . . . .
Foreign exchange contracts . .
Commodity contracts . . . . . . .

23
91
(28)
(1)
(4)

—
—
—
—
—

—
—
—
—
—

—
—
—
—
—

23
91
(28)
(1)
(4)

Total derivatives, net . . . . . . . . . . .

81

—

—

—

81

Sub Total . . . . . . . . . . . . . . . . . . . . . . . .

¥ 78

¥—

¥

¥ (1)

¥ 85

Loans and receivables . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . .

0
(0)

—

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

¥ 78

Liabilities:
Short-term borrowings . . . . . . . . . .
Payables and deposits . . . . . . . . . . .
Long-term borrowings . . . . . . . . . .

0
0
12

—
—
—

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

¥ 12

¥—

Assets:Trading assets and private equity
investments
Equities . . . . . . . . . . . . . . . . . .
Private equity . . . . . . . . . . . . .
Foreign government, agency
and municipal securities . . .
Bank and corporate debt
securities and loans for
trading purposes . . . . . . . . .
Commercial mortgage-backed
securities (“CMBS”) . . . . . .
Residential mortgage-backed
securities (“RMBS”) . . . . . .
Mortgage and other mortgagebacked securities . . . . . . . . .
Collateralized debt obligations(“CDO”) . . . . . . . . . . . . . . .
Investment trust funds andother . . . . . . . . . . . . . . . . . .
Total cash instruments . . . . . . . . . .

8Derivatives, net(2):

2

—
—

—
—

0
2

2

¥

¥ (1)

¥ 87

—
—
—

—
—
—

0
0
12

¥—

¥—

¥ 12

¥

F-44

8

8

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

Net gain(loss) on
trading

Assets:Trading assets and private equity
investments
Equities . . . . . . . . . . . . . . . . . .
Private equity . . . . . . . . . . . . .
Foreign government, agency
and municipal securities . . .
Bank and corporate debt
securities and loans for
trading purposes . . . . . . . . .
Commercial mortgage-backed
securities (“CMBS”) . . . . . .
Residential mortgage-backed
securities (“RMBS”) . . . . . .
Mortgage and other mortgagebacked securities . . . . . . . . .
Collateralized debt obligations(“CDO”) . . . . . . . . . . . . . . .
Investment trust funds andother . . . . . . . . . . . . . . . . . .
Total cash instruments . . . . . . . . . .
Derivatives, net(2):Equity contracts . . . . . . . . . . .
Interest rate contracts . . . . . . .
Credit contracts . . . . . . . . . . . .
Foreign exchange contracts . .
Commodity contracts . . . . . . .
Total derivatives, net . . . . . . . . . . .
Sub Total . . . . . . . . . . . . . . . . . . . . . . . .
Loans and receivables . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities:
Short-term borrowings . . . . . . . . . .
Payables and deposits . . . . . . . . . . .
Long-term borrowings . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Translation into billions of dollars
Year ended March 31, 2011
Gain (loss) on
investments in
Gain (loss) on
Interest andequity securities private equity
dividends /(1)
and otherinvestments
Interest expense

Total
unrealized
gains / (losses)$(0.08)
—

$—
—

$—
0.10

$(0.01)—$(0.09)
0.10

0.01

—

—

—

0.01

(0.01)———(0.01)

0.11

—

—

—

0.11

0.00

—

—

—

0.00

(0.06)———(0.06)(0.00)———(0.00)

0.00(0.03)

—
—

—
0.10

—
(0.01)

0.00
0.06

0.28
1.10
(0.34)(0.01)(0.05)
0.98$ 0.950.00(0.00)$ 0.95

—
—
—
—
—
—
$—
—
0.02
$0.02

—
—
—
—
—
—
$0.10
—
—
$0.10

—
—
—
—
—
—
$(0.01)——$(0.01)0.28
1.10(0.34)(0.01)(0.05)
0.98$ 1.040.00
0.02$ 1.06

0.00
0.00
0.14
$ 0.14

—
—
—
$—

—
—
—
$—

—
—
—
$ —

0.00
0.00
0.14
$ 0.14(1) Includes gains and losses reported within Revenue—Other and Non-interest expenses—Other in the
consolidated statements of operations.
(2) Each derivative classification includes derivatives referencing multiple risk components. For example,
interest rate contracts include complex derivatives referencing interest rate risk as well as foreign exchange
risk or other factors such as prepayment speeds. Credit contracts include credit default swaps as well asderivatives referencing corporate and government bonds. Derivatives previously classified under “Other
contracts” have been reclassified based on the above methodology. Previously reported amounts have been
reclassified to conform to the current period presentation.
F-45

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
During the year ended March 31, 2011, a lack of liquidity persists in certain asset classes which has
impacted the observability of certain inputs which are significant to Nomura’s financial instrument valuations.
These inputs include certain foreign currency exchange volatilities, certain interest rate volatilities and certain
credit spreads.
As described above, the valuation of Level 3 financial assets and liabilities is dependent on certain
significant inputs which cannot be observed in the market. Common characteristics of an inactive market include
a low number of transactions of the financial instrument, stale or non-current price quotes, price quotes that vary
substantially either over time or among market makers, or little publicly released information. Unobservable
inputs include volatility risk 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 assetbacked securitization products.
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 as an unobservable parameter. Other
techniques for determining an appropriate value for unobservable parameters may consider information such asconsensus pricing data among certain market participants, historical trends, extrapolation from observable market
data and other information Nomura would expect market participants to use in valuing similar instruments.
There is a range of fair values for Level 3 financial instruments as a result of the uncertainties describedabove. The specific valuation for each instrument is based on management’s judgment of prevailing market
conditions, in accordance with Nomura’s established valuation policies and procedures. Using reasonably
possible alternative assumptions to value Level 3 financial instruments will significantly influence fair values.
As described earlier, Level 3 financial instruments are often hedged by instruments in Level 1 or Level 2 ofthe fair value hierarchy. For the year ended March 31, 2011, gains and losses related to Level 3 assets did nothave a material impact on Nomura’s liquidity and capital resources management.
As the valuation of these instruments fluctuates in response to a variety of factors, including, but not limited
to, general market sentiment, credit, interest rate, foreign exchange and correlation risk, current values may
decrease if market conditions deteriorate. Conversely, should conditions improve, an increase in value of theLevel 3 portfolio would be expected.
Investments in investment funds that calculate NAV per share
In the normal course of business, Nomura invests in non-consolidated funds which meet the definition of
investment companies or are similar in nature and which do not have readily determinable fair values. For certainof these investments, Nomura uses NAV per share as the basis for valuation as a practical expedient. Some ofthese investments are redeemable at different amounts from NAV per share.

F-46

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table provides information on these investments where NAV per share is calculated ordisclosed as of March 31, 2010 and March 31, 2011. Investments are presented by major category relevant to thenature of Nomura’s business and risks.

Fair Value(1)Billions of yen
March 31, 2010
Unfunded
Redemption Frequency
Commitments(2)(if currently eligible)(3)Hedge funds . . . . . . . . . . . . . . . . . . . . . . .
Venture capital funds . . . . . . . . . . . . . . . .
Private equity funds . . . . . . . . . . . . . . . . .
Real estate funds . . . . . . . . . . . . . . . . . . . .

¥156
2
59
12

¥ 1
0
24
14

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

¥229

¥39

Billions of yen
Fair
Unfunded
Value(1) Commitments(2)Weekly/Monthly—
Quarterly—

Redemption Notice
Period(4)1-90 days—
30 days—Translation into
billions of U.S. dollars
March 31, 2011
Fair
Unfunded
Redemption Frequency Redemption Notice
Value(1) Commitments(2) (if currently eligible)(3)Period(4)Hedge funds . . . . . . . . . . . ¥ 91
Venture capital funds . . . .
2Private equity funds . . . . .
64
Real estate funds . . . . . . . .
8

¥ 0
0
23
15

$1.10
0.02
0.77
0.10

$0.00
0.00
0.28
0.18

Total . . . . . . . . . . . . . . . . . ¥165

¥38

$1.99

$0.46

Weekly/Monthly—
Quarterly—

Same day-95 days—
30 days—(1) Fair value generally determined using NAV per share as a practical expedient.
(2) The contractual amount of any unfunded commitments Nomura is required to make to the entities in which
the investment is held.
(3) The range in frequency with which Nomura can redeem investments.
(4) The notice period required to be provided before redemption is possible.
Hedge funds:
These investments include funds of funds that invest in multiple asset classes. Nomura has developed thebusiness of issuing structured notes linked to hedge funds. As a result most of the risks are transferred aspass-through. The fair values of these investments are estimated using the NAV per share of the investments.
Although most of these funds can be redeemed within six months, certain funds cannot be redeemed within
six months due to contractual, liquidity or gating issues. The redemption period cannot be estimated for certain
suspended or liquidating funds. Some of these investments contain restrictions against transfers of theinvestments to third parties.
Venture capital funds:
These investments include primarily start-up funds. The fair values of the investments in this category are
estimated using the NAV per share of the investments. Most of these funds cannot be redeemed within six
months. The redemption period cannot be estimated for certain suspended or liquidating funds. These
investments contain restrictions against transfers of the investments to third parties.
F-47

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Private equity funds:
These investments are made mainly in various sectors in Europe, United States and Japan. The fair values ofcertain investments in this category are estimated using the NAV per share. Redemption is restricted for most ofthese investments. Some of these investments contain restrictions against transfers of the investments to third
parties.
Real estate funds:
These are investments in commercial and other types of real estate. The fair values of the investments in thiscategory are estimated using the NAV per share of the investments. Redemption is restricted for most of theseinvestments. These investments contain restrictions against transfers of the investments to third parties.
Fair value option for financial assets and financial liabilities
Nomura carries certain eligible financial assets and liabilities at fair value through the election of the fairvalue option permitted by ASC 815 and ASC 825. When Nomura elects the fair value option for an eligible item,changes in that item’s fair value are recognized in the consolidated statements of operations. Election of the fairvalue option is generally irrevocable unless an event that gives rise to a new basis of accounting for that
instrument occurs.
The financial assets and financial liabilities primarily elected for the fair value option by Nomura, and thereasons for the 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 consolidated statements of operations caused by the difference in measurement basisthat otherwise would arise between loans and the derivatives used to risk manage those instruments.

•

Equity method investments held for capital appreciation or current income purposes, which Nomura
generally has an intention to exit rather than hold indefinitely. Nomura elects the fair value option tomore appropriately represent the purpose of these investments in these consolidated financial
statements.

•

Resale and repurchase agreements which are risk managed on a fair value basis. Nomura elects the fairvalue option to mitigate volatility in the consolidated statements of operations caused by the difference
in measurement basis that otherwise would arise between the resale and repurchase agreements and thederivatives used to risk manage those instruments.

•

Financial liabilities recognized in transactions which are accounted for as secured financing transactions
under ASC 860. Nomura elects the fair value option for these financial liabilities to mitigate volatility inthe consolidated statements of operations that otherwise would arise had this election not been made.
Even though Nomura usually has little or no continuing economic exposure to the transferred financial
assets, they remain on the consolidated balance sheets and continue to be carried at fair value, withchanges in fair value recognized through the consolidated statements of operations; and•All structured notes issued on or after April 1, 2008. Nomura elects the fair value option for thosestructured notes primarily to mitigate the volatility in the consolidated statements of operations causedby differences in the measurement basis for structured notes and the derivatives Nomura uses to risk
manage those positions. Nomura also elects the fair value option for certain notes issued by consolidated
variable interest entities for the same purpose and for certain structured notes issued prior to April 1,
2008.
F-48

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Interest and dividends arising from financial instruments for which the fair value option has been elected arerecognized within Interest revenue or Interest expense or Revenue—Net gain (loss) on trading.
The following table presents gains (losses) due to changes in fair value for financial instruments measured atfair value using the fair value option for the years ended March 31, 2010 and 2011, respectively.
Translation
intobillions ofBillions of yen
U.S. dollars
Year ended March 31
2010
2011
2011
Net gain (loss) on trading

Assets:Trading assets and private equity investments(1)Trading assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ (1) ¥ (4)Private equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0)0Collateralized agreements(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—6Loans and receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
88$(0.04)
0.00
0.07
0.09

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

¥ 10$ 0.12¥(3) ¥ (7)—(0)(147) (37)$(0.08)(0.00)(0.45)¥(150) ¥(44)$(0.53)Liabilities:
Short-term borrowings(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collateralized financing(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term borrowings(3)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥7(1) Includes equity investments that would have been accounted for under the equity method had Nomura notchosen to elect the fair value option.
(2) Includes resale and repurchase agreements elected for the fair value option.
(3) Includes structured notes and other financial liabilities elected for the fair value option.
(4) Includes liabilities recognized from secured financing transactions arising from transfers of financial assets
which did not meet the criteria for sales accounting.
Nomura elected to apply the fair value option for its 45.5% investment in the common stock of Ashikaga
Holdings Co., Ltd. (“Ashikaga Holdings”). This investment is reported within Trading assets and private equity
investments—Private equity investments in the consolidated balance sheets.
Ashikaga Holdings recognized total revenue of ¥118 billion, total expense of ¥93 billion and a net gain of¥25 billion for the year ended March 31, 2010. As of March 31, 2010, its total assets and total liabilities were
¥4,990 billion and ¥4,755 billion, respectively, determined in accordance with accounting principles generally
accepted in Japan. Ashikaga Holdings recognized total revenue of ¥106 billion ($1.28 billion), total expense of¥90 billion ($1.09 billion) and a net gain of ¥16 billion ($0.19 billion) for the year ended March 31, 2011. As of
March 31, 2011, its total assets and total liabilities were ¥5,219 billion ($63.06 billion) and ¥4,979 billion($60.16 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. Losses from changes in the fair value of the financial liabilities for which the fairvalue option was elected, attributable to the change in Nomura’s creditworthiness were ¥64 billion for the year
ended March 31, 2010, mainly due to the tightening of Nomura’s credit spread. Gains from changes in the fair
F-49

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
value of the financial liabilities for which the fair value option was elected, attributable to the change in
Nomura’s creditworthiness, were ¥9 billion ($0.11 billion) for the year ended March 31, 2011, 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 instrument-specific credit risk.
As of March 31, 2010, the fair value of the aggregate unpaid principal balance (which is contractuallyprincipally protected) of loans and receivables for which the fair value option was elected was ¥1 billion morethan the principal balance of such loans and receivables. The fair value of the aggregate unpaid principal balance(which is contractually principally protected) of long-term borrowings for which the fair value option was electedwas ¥6 billion less than the principal balance of such long-term borrowings. There were no loans and receivables
for which the fair value option was elected that were 90 days or more past due.
As of March 31, 2011, there were no significant differences between the fair value of the aggregate unpaid
principal balance (which is contractually principally protected) of loans and receivables for which the fair value
option was elected and the principal balance of such loans and receivables. The fair value of the aggregate unpaid
principal balance (which is contractually principally protected) of long-term borrowings for which the fair value
option was elected was ¥50 billion ($0.60 billion) less than the principal balance of such long-term borrowings.
There were no loans and receivables for which the fair value option was elected that were 90 days or more pastdue.
Assets and liabilities carried at fair value on a nonrecurring basis—
In addition to the financial instruments carried at fair value on a recurring basis, Nomura also carries otherassets and liabilities at fair value on a nonrecurring basis, where the primary measurement basis is not fair value.
Fair value is only used in specific circumstances such as to measure impairment.
For the year ended March 31, 2010, Nomura recognized impairment losses of ¥3 billion within Non-interest
expenses—Other in the consolidated statements of operations against certain listed equity method investees as theimpairment was recognized due to an other-than-temporary decline in value. The carrying amount of theseinvestments, which is included within Other assets—Investments in and advances to affiliated companies in the
consolidated balance sheets, was written down to their fair value of ¥2 billion. Fair value was determined inaccordance with ASC 820 using unadjusted quoted market prices. Consequently, these nonrecurring fair value
measurements have been determined using inputs which would be classified as Level 1 in the fair value
hierarchy. There were no significant impairments recognized for the year ended March 31, 2011.
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 exchanges and other segregated cash, Receivables from
customers, Receivables from other than customers, Securities purchased under agreements to resell, andSecurities borrowed. 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 rates.
Loans receivable
Loans receivable are carried at cost adjusted for deferred fees or costs on originated loans, unamortizedpremiums or discounts on purchased loans less applicable allowances for loan losses, unless the fair value option
is elected and they are 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 are utilized to estimate fair value.
F-50

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 loan losses.

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

Translation
intobillions of
U.S. dollars

Billions of yen
March 312010
2011
Carrying
Fair
Carrying
Fair
value
value
value
value

2011
Carrying
Fair
value
value

¥1,306$15.32¥1,299¥1,268¥1,265$15.29Long-term borrowings
For long-term borrowings, certain hybrid financial instruments including structured notes are carried at fairvalue under the fair value option. Except for those instruments, long-term borrowings are carried at historicalamounts unless such borrowings are designated as the hedged item in a fair value hedge. The fair value of longterm borrowings 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 312010
2011
Carrying
Fair
Carrying
Fair
value
value
value
value

2011
Carrying
Fair
value
value

¥7,199$101.53¥6,984¥8,403¥8,179$98.83

4. Derivative instruments and hedging activities:
Nomura uses a variety of derivative financial instruments, including futures, forwards, options and swaps,
for both trading and non-trading purposes.
Derivatives used for trading purposes
In the normal course of business, Nomura enters into transactions involving derivative financial instruments
to meet clients needs, for its trading activities, and to reduce its own exposure to loss due to adverse fluctuationsin interest rates, currency exchange rates and market prices of securities. These financial instruments include
contractual agreements such as commitments to swap interest payment streams, exchange currencies or purchaseor 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,
option and swap contracts involving securities, foreign currency, interest rate and other capital market
instruments as part of its normal trading activities and for market risk management of certain non-trading assets
and liabilities.

F-51

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Nomura maintains active trading positions in a variety of derivative financial instruments. Most of
Nomura’s trading activities are client oriented. Nomura utilizes a variety of derivative financial instruments as ameans of bridging clients’ specific financial needs and investors’ demands in the securities markets. Nomura also
actively trades securities and various derivatives to assist its clients in adjusting their risk profiles as marketschange. 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 other market makers. These
activities are essential to provide clients with securities and other capital markets products at competitive prices.
Futures and forwards contracts are commitments to either purchase or sell securities, foreign currency orother capital market instruments at a specific future date for a specified price and may be settled in cash or
through delivery. Foreign exchange contracts include spot and forward contracts and involve the exchange of twocurrencies at a rate agreed by the contracting parties. Risks arise from the possible inability of counterparties tomeet the terms of their contracts and from movements in market prices. Futures contracts are executed throughregulated 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 losses in the event of
the counterparties’ default.
To the extent these derivative financial instruments are economically hedging financial instruments or
securities positions of Nomura, the overall risk of loss may be fully or partly mitigated by the hedged 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 a right of offset in the event of bankruptcy
and mitigate the credit risk exposure from these transactions. In some cases, they enable unrealized gains andlosses 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 ASC 210-20.
Nomura offset ¥640 billion of cash collateral receivables against net derivative liabilities and ¥649 billion of
cash collateral payables against net derivative assets as of March 31, 2010. Nomura offset ¥605 billion ($7.31
billion) of cash collateral receivables against net derivative liabilities and ¥456 billion ($5.51 billion) of cash
collateral payables against net derivative assets as of March 31, 2011.
F-52

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Derivatives used for non-trading purposes
Nomura’s principal objectives in using derivatives for non-trading purposes are to manage interest rate risk,
to modify the interest rate characteristics of certain financial liabilities, to manage net investment exposure tofluctuations in foreign exchange rates arising from certain foreign operations and to mitigate equity price risk
arising from certain stock-based compensation awards given to employees.
Credit risk associated with derivatives utilized for non-trading purposes is controlled and managed in thesame way as credit risk associated with derivatives utilized for trading purposes.
Concentrations of credit risk for derivatives
The following table presents Nomura’s significant concentration of exposures to credit risk in OTC
derivatives with financial institutions. The gross fair value of derivative assets represents the maximum amountof loss due to credit risk that Nomura would incur if the counterparties of Nomura failed to perform inaccordance with the terms of the instruments and any collateral or other security Nomura held in relation to those
instruments proved to be of no value.

Gross Fair Value ofderivative assets

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

¥ 12,340

Gross Fair Value ofderivative assets

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

¥ 12,733

Billions of yen
March 31, 2010
Impact of
Master Netting
Impact of
Arrangements
Collateral¥(11,353)¥ (594)

Billions of yen
March 31, 2011
Impact of
Master Netting
Impact of
Arrangements
Collateral¥(11,611)¥ (442)Net Exposure to
Credit Risk

¥ 393

Net Exposure to
Credit Risk

¥ 680

Translation into billions of U.S. dollars
March 31, 2011
Impact ofGross Fair Value of Master Netting
Impact of Net Exposure toderivative assets
Arrangements
Collateral
Credit Risk

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

$ 153.85

F-53$(140.30)$(5.34)$8.21

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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, 2010
Derivative Assets
Derivative Liabilities
Notional
Fair Value Notional(1) Fair Value(1)Derivatives used for trading purposes(2):Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 19,070
368,01433,611
65,428387¥ 1,562
11,997
2,053
715
32

¥ 18,391
359,576
36,10363,090338¥ 1,681
11,616
2,020
780
32

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

¥486,510¥16,359¥477,498¥16,129

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

¥

1,030

¥

27

¥

472

¥

3

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

¥

1,030

¥

27

¥

472

¥

3

Total derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥487,540¥16,386¥477,970¥16,132

Billions of yen
March 31, 2011
Derivative Assets
Derivative Liabilities
Notional
Fair Value Notional(1) Fair Value(1)Derivatives used for trading purposes(2)(3):
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 16,229
652,220
37,07552,150753¥ 1,472
11,937
2,066
1,315
97

¥ 16,257
689,543
38,432
61,310555¥ 1,511
11,759
2,093
1,384
107

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

¥758,427¥16,887¥806,097¥16,854

Derivatives designated as hedging instruments:
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

1,531
20

¥

32
0

¥

535
116

¥

4
2

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

¥

1,551

¥

32

¥

651

¥

6

Total derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥759,978F-54¥16,919¥806,748¥16,860

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Translation into billions of U.S. dollars
March 31, 2011
Derivative Assets
Derivative Liabilities
Notional
Fair Value
Notional(1)Fair Value(1)Derivatives used for trading purposes(2)(3):
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 196.10
7,880.85
447.98630.149.10$ 17.78144.23
24.96
15.89
1.17

$ 196.44
8,331.83
464.38740.82
6.71$ 18.26
142.09
25.29
16.72
1.29

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

$9,164.17$204.03$9,740.18$203.65

Derivatives designated as hedging instruments:
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . .

$

18.50
0.24

$

0.39
0.00

$

6.47
1.40

$

0.05
0.02

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

$

18.74

$

0.39

$

7.87

$

0.07

Total derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$9,182.91$204.42$9,748.05$203.72(1) Includes the amount of embedded derivatives bifurcated in accordance with ASC 815.
(2) Each derivative classification includes derivatives referencing multiple risk components. For example,
interest rates contracts include complex derivatives referencing interest rate risk as well as foreign exchange
risk or other factors such as prepayment speeds. Credit contracts include credit default swaps as well asderivatives referencing corporate and government bonds. Derivatives previously classified under “Other
contracts” have been reclassified based on the above methodology. Previously reported amounts have been
reclassified to conform to the current period presentation.
(3) Includes derivatives used for non-trading purposes which are not designated as accounting hedges.
Changes in fair value are recognized either through the consolidated statements of operations or othercomprehensive income depending on the purpose for which the derivatives are used.
Derivatives used for trading purposes
Derivative financial instruments used for trading purposes, including bifurcated embedded derivatives, arecarried at fair value with changes in fair value recognized through the consolidated statement of operations
within Revenue—Net gain (loss) on trading.

F-55

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents amounts included in the consolidated statements of operations related toderivatives used for trading purposes by type of underlying derivative contract.
Translation
intobillions ofBillions of yen
U.S. dollars
Year ended March 31
2010
2011
2011

Derivatives used for trading purposes(1)(2):
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 326 ¥ 206
248
132
(284)
88
124 (171)(1)(10)$ 2.491.59
1.06(2.07)(0.12)

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

¥ 413$ 2.95¥ 245(1) Each derivative classification includes derivatives referencing multiple risk components. For example,
interest rates contracts include complex derivatives referencing interest rate risk as well as foreign exchange
risk or other factors such as prepayment speeds. Credit contracts include credit default swaps as well asderivatives referencing corporate and government bonds. Derivatives previously classified under “Other
contracts” have been reclassified based on the above methodology. Previously reported amounts have been
reclassified to conform to the current period presentation.
(2) Includes net gain (loss) on derivatives used for non-trading purposes which are not designated as accounting
hedges.
Fair value hedges
Nomura issues Japanese yen and foreign currency denominated debt with both fixed and floating interest
rates. Nomura generally enters into swap agreements to convert fixed rate interest payments on its debt
obligations to a floating rate and applies hedge accounting to these instruments. Derivative financial instruments
designated as fair value hedges are carried at fair value. Changes in fair value of the hedging derivatives arerecognized together with those of the hedged liabilities in the consolidated statements of operations withinInterest expense.
The following table presents amounts included in the consolidated statements of operations related toderivatives designated as fair value hedges by type of underlying derivative contract and the nature of the hedged
item.
Translation
intobillions ofBillions of yen U.S. dollars
Year ended March 31
2010
2011
2011

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

¥ 14

¥ 22

$ 0.27

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

¥ 14

¥ 22

$ 0.27

Hedged items:
Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(14) ¥(22)$(0.27)

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

¥(14) ¥(22)$(0.27)

F-56

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Net investment hedges
Effective from April 2010, Nomura designates foreign currency forwards and foreign currency denominatedlong-term debt as hedges of certain subsidiaries with significant foreign exchange risks and applies hedge
accounting to these instruments. Accordingly, the effective hedging portion of the foreign exchange gains(losses) arising from the derivative contracts and non-derivative financial products designated as hedges isrecognized through the consolidated statements of comprehensive income within Other comprehensive income(loss)—Change in cumulative translation adjustments, net of tax. This is offset by the foreign exchange
adjustments arising from consolidation of the relevant foreign subsidiaries.
The following table presents gains (losses) from derivatives and non-derivatives designated as net
investment hedges included in the consolidated statements of comprehensive income.
Translation
intobillions ofBillions of yen U.S. dollars
Year ended March 31
2010
2011
2011

Hedging instruments:
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥—
—

¥ 0
17

$0.00
0.21

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

¥—

¥17

$0.21

(1) The portion of the gains (losses) representing the amount of hedge ineffectiveness and the amount excluded
from the assessment of hedge effectiveness are recognized within Revenue—Other in the consolidated
statements of operations. There were no material gains (losses) during the year ended March 31, 2011.
Derivatives containing credit risk related contingent features
Nomura enters into certain OTC derivatives and other agreements containing credit-risk-related contingent
features. These features would require Nomura to post additional collateral or settle the instrument uponoccurrence of a credit event, the most common of which would be a downgrade in the Company’s long-term
credit rating.
The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are ina liability position as of March 31, 2010, was ¥1,559 billion with related collateral pledged of ¥848 billion. In theevent of a one-notch downgrade to Nomura’s long-term credit rating, the aggregate fair value of assets thatwould have been required to be posted as additional collateral or that would have been needed to settle theinstruments immediately was ¥29 billion. The aggregate fair value of all derivative instruments with credit-riskrelated contingent features that are in a liability position as of March 31, 2011, was ¥1,779 billion ($21.50
billion) with related collateral pledged of ¥958 billion ($11.58 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 asadditional collateral or that would have been needed to settle the instruments immediately was ¥18 billion ($0.22
billion).
Credit derivatives
Credit derivatives are derivative instruments in which one or more of their underlyings are related to the credit
risk of a specified entity (or group of entities) or an index based on the credit risk of a group of entities that expose
the seller of the credit derivatives to potential loss from credit risk related events specified in the contract.
F-57

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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 an 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 derivatives used by Nomura are single-name credit default swaps wheresettlement of the derivative is based on the credit risk of a single third party. Nomura also writes credit
derivatives linked to the performance of credit default indices and issues other credit risk related portfolio
products.
Nomura would have to perform under a credit derivative contract if a credit event as defined in therespective contract occurs. Typical credit events include bankruptcy, failure to pay and restructuring of
obligations of the referenced security.
Credit derivative contracts written by Nomura are either cash or physically settled. In cash-settled
instruments, once payment is made upon an event of a default, the contract usually terminates with no further
payments due. Nomura generally has no right to assume the reference assets of the counterparty in exchange forpayment, nor does Nomura usually have any direct recourse to the actual issuers of the reference assets torecover the amount paid. In physically-settled contracts, upon a default event, Nomura takes delivery of thereference asset in return for payment of the full notional amount of the contract.
Nomura actively monitors and manages its credit derivative exposures. Where protection is sold, risks may
be mitigated by purchasing credit protection from other third parties either on identical underlying reference
assets or on underlying reference assets with the same issuer which would be expected to behave in a correlated
fashion. The most common form of recourse provision to enable Nomura to recover from third parties any
amounts paid under a written credit derivative is therefore not through the derivative itself but rather through theseparate purchase of credit derivatives with identical or correlated underlyings.
Nomura quantifies the value of these purchased contracts in the following tables in the column titled“Purchased Credit Protection”. These amounts represent purchased credit protection with identical underlyings to
the written credit derivative contracts which act as a hedge against Nomura’s exposure. To the extent Nomura isrequired to pay out under the written credit derivative, a similar amount would generally become due to Nomura
under the purchased hedge.
Credit derivatives have a stated notional amount which represents the maximum payment Nomura may berequired to make under the contract. However, this is generally not a true representation of the amount Nomura
will actually pay as in addition to purchased credit protection, other risk mitigating factors reduce the likelihood
and amount of any payment, including:
The probability of default: Nomura values credit derivatives taking into account the probability that theunderlying reference asset will default and that Nomura will be required to make payments under the contract.
Based on historical experience and Nomura’s assessment of the market, Nomura believes that the probability that
all reference assets on which Nomura provides protection will default in a single period is remote. The disclosed
notional amount, therefore, significantly overstates Nomura’s true exposure on these contracts.
The recovery value on the underlying asset: In the case of a default, Nomura’s liability on a contract islimited to the difference between the notional amount and the recovery value of the underlying reference asset.
While the recovery value on a defaulted asset may be minimal, this does reduce amounts paid on these contracts.
F-58

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Nomura holds assets as collateral in relation to written credit derivatives. However, these amounts do notenable Nomura to recover any amounts paid under the credit derivative but rather mitigate the risk of economic
loss arising from a counterparty defaulting against amounts due to Nomura under the contract. Collateralrequirements are determined on a counterparty level rather than individual contract, and also generally cover all
types of derivative contracts rather than just credit derivatives.
The following tables present information about Nomura’s written credit derivatives and purchased credit
protection with identical underlyings as of March 31, 2010 and March 31, 2011, respectively.

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

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

Billions of yen
March 31, 2010
Maximum Potential Payout/NotionalYears to Maturity
Less than
1 to 33 to 5More than
1 yearyears
years
5 years

Notional
Purchased
CreditProtection

Carrying value(Asset) / liability(1)Total¥(377)
174¥14,659
13,319¥104
51¥3,2491,801¥ 5,741
4,693¥ 5,5656,774¥12,988
11,837

135

3,874

—

566

1,856

1,452

2,208

0

7

—

5

—

2

5

¥ (68)¥31,859¥155¥5,621¥12,290¥13,793¥27,038

Billions of yen
March 31, 2011
Maximum Potential Payout/NotionalYears to Maturity
Less than
1 to 33 to 5More than
1 yearyears
years
5 years

Notional
Purchased
CreditProtection

Carrying value(Asset) / liability(1)

Total

¥ 56
117

¥18,933
12,666¥2,082806¥ 8,416
4,372¥ 6,953
6,275¥1,482
1,213¥17,020
10,956

19

3,552

247

2,421

696

188

2,143

0

212

4

—

208

—

121

¥192

¥35,363¥3,139¥15,209¥14,132¥2,883¥30,240

F-59

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

Carrying value(Asset) / liability(1)Single-name credit default
swaps . . . . . . . . . . . . . . . .
Credit default indices . . . . . .
Other credit risk related
portfolio products . . . . . . .
Credit risk related options
and swaptions . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . .

Translation into billions of U.S. dollars
March 31, 2011
Maximum Potential Payout/NotionalYears to Maturity
Less than
1 to 33 to 5More thanTotal
1 yearyears
years
5 years

Notional
Purchased
CreditProtection

$0.68
1.41

$228.77
153.05$25.16
9.74$101.6952.83$ 84.01
75.82$17.9114.66$205.66132.38

0.23

42.92

2.98

29.25

8.42

2.27

25.89

0.00

2.56

0.05

—

2.51

—

1.46

$2.32

$427.30$37.93$183.77$170.76$34.84$365.39(1) Carrying value amounts are shown on a gross basis prior to cash collateral or counterparty netting.
The following tables present information about Nomura’s written credit derivatives by external credit ratingof the underlying asset. Ratings are based on Standard & Poor’s (“S&P”), or if not rated by S&P, based on
Moody’s Investors Service. If ratings from either of these agencies are not available, the ratings are based on
Fitch Ratings Ltd. or Japan Credit Rating Agency, Ltd. 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.

AAA

AA

Billions of yen
March 31, 2010
Maximum Potential Payout/Notional
A
BBB
BB
Other(1)Total

Single-name credit default swaps . . . . . . . . . . ¥ 668 ¥ 922
Credit default indices . . . . . . . . . . . . . . . . . . .
967
351
Other credit risk related portfolio products . .
23—
Credit risk related options and swaptions . . .
——¥ 4,469
5,998——¥4,912 ¥2,201
3,987
350
—
—
2
—

¥1,487 ¥14,659
1,666
13,319
3,851
3,874
5
7

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

¥10,467¥8,901¥7,009¥1,658¥1,273AAAAA¥2,551

Billions of yen
March 31, 2011
Maximum Potential Payout/Notional
A
BBB
BB
Other(1)¥31,859

Total

Single-name credit default swaps . . . . . . . . . . ¥2,200 ¥1,182
Credit default indices . . . . . . . . . . . . . . . . . . .
1,228
375
Other credit risk related portfolio products . .
22—Credit risk related options and swaptions . . .
25—¥ 5,789 ¥5,722 ¥2,586 ¥1,454 ¥18,933
5,592
3,202
577
1,692
12,666
—
0
—
3,530
3,552
29
154
4
—
212

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

¥11,410¥3,475¥1,557F-60¥9,078¥3,167¥6,676¥35,363

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

AAA

AA

Translation into billions of U.S. dollars
March 31, 2011
Maximum Potential Payout/Notional
A
BBB
BB
Other(1)Total

Single-name credit default swaps . . . . . . . . . $26.58 $14.28
Credit default indices . . . . . . . . . . . . . . . . . .
14.84
4.53
Other credit-risk related portfolio
products . . . . . . . . . . . . . . . . . . . . . . . . . .
0.27—
Credit-risk related options and swaptions . .
0.30—$ 69.95
67.57$ 69.1438.69$31.25
6.97$17.5720.45$228.77
153.05

—
0.35

0.00
1.86

—
0.05

42.65
—

42.92
2.56

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

$137.87$109.69$38.27$80.67$427.30$41.99$18.81(1) “Other” includes credit derivatives where the credit rating of the underlying reference asset is below
investment grade or where a rating is unavailable.
5. Private equity business:
Nomura makes private equity investments primarily in Japan and Europe.
Private equity investments made by certain entities which Nomura consolidates under either a votinginterest or variable interest model which are investment companies pursuant to the provisions of ASC 946(“investment company subsidiaries”) are accounted for at fair value, with changes in fair value recognizedthrough the consolidated statements of operations. Investment company accounting applied by each of theseinvestment 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 Nomura. In accordance with Nomura 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 of accounting.
Such investments may generally only be made by investment company subsidiaries. Non-core businesses aredefined as those engaged in activities other than Nomura’s business segments.
Nomura also has a subsidiary which is not an investment company but which makes investments in entities
engaged in Nomura’s core businesses. These investments are made for capital appreciation or current income
purposes or both and are also carried at fair value, either because fair value is carried by election of the fair value
option or other U.S. GAAP requirements.
Private equity business in Japan
Nomura has an established private equity business in Japan, which is operated primarily through a whollyowned subsidiary, NPF.
Since its inception in 2000, NPF has made investments in 21 entities and exited from 19 of theseinvestments. The fair value of its investment portfolio is ¥104,962 million and ¥77,793 million ($940 million) as
of March 31, 2010 and 2011, respectively.
NPF is an investment company subsidiary pursuant to the provisions of ASC 946 and therefore carries all of
its investments at fair value, with changes in fair value recognized through the consolidated statements ofoperations.
F-61

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Nomura also makes private equity investments through another wholly-owned subsidiary, Nomura Financial
Partners Co., Ltd. (“NFP”). NFP is not an investment company subsidiary as it invests in the entities engaged in
Nomura’s core business. Nomura elected the fair value option to account for its 45.5% investment in thecommon stock of Ashikaga Holdings.
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 for 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, the general partner of TFCP I, which is independent of Nomura, assumed the management andcontrol of these investments, together with one other PFG investment, Annington Holdings plc, which due tocontractual restrictions was not transferred to the partnership.
With effect from March 27, 2002, Nomura ceased consolidating the Terra Firma Investments and accounted
for those investments at fair value in accordance with ASC 946.
The Terra Firma Investments are held by entities which are investment company subsidiaries and therefore
Nomura continues to account for these investments at fair value, with changes in fair value recognized throughthe consolidated statements of operations.
The fair value of the Terra Firma Investments was ¥98,683 million and ¥100,395 million ($1,213 million) as
of March 31, 2010 and 2011, respectively.
Other Terra Firma Funds
In addition to the Terra Firma Investments, Nomura is a 10% investor in a ¥228 billion ($2.76 billion)
private equity fund (“TFCP II”) and a 2% investor in a ¥608 billion ($7.34 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 ¥22,802 million ($276 million) and reduced to¥4,351 million ($53 million) as a result of adjustments for recyclable distributions. As of March 31, 2011,¥4,172 million ($50 million) had been drawn down for investments.
For TFCP III, Nomura’s total commitment is ¥11,510 million ($139 million) and ¥8,194 million($99 million) had been drawn down for investments as of March 31, 2011.
The investments in TFCP II and TFCP III are carried at fair value, with changes in fair value recognizedthrough the consolidated statements of operations.
F-62

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Other Investments
Nomura also makes private equity investments in Europe through wholly-owned subsidiaries and otherconsolidated entities which have third party pooling of funds. Certain of these entities are investment company
subsidiaries and therefore all of their investments are carried at fair value, with changes in fair value recognizedthrough the consolidated statements of operations.
6. Investment company accounting
Certain entities, including NPF, are investment companies and therefore carry all of their investments at fairvalue, with changes in fair value recognized through the consolidated statements of operations.
The following table summarizes the aggregate fair value and the cost of investments held by all investmentcompany subsidiaries within Nomura and for which investment company accounting has been retained in these
consolidated financial statements.

Millions of yen
March 312010
2011

Closing cost(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥249,609 ¥148,358
Gross unrealized appreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
104,056
104,807
Gross unrealized depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(86,497) (44,411)
Closing fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥267,168 ¥208,754

Translation
intomillions of
U.S. dollars
2011$1,793
1,266(537)$2,522(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 performance of the investments held by investment company subsidiaries
during the period:

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 theperiod(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Closing fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 306,354
36,41449,493

Millions of yen
March 312010
2011

Translation
intomillions of
U.S. dollars
2011¥253,693 ¥267,168(5,004) (70,292)(2,212)
10,070$3,228(850)
122(138,568)
20,691
1,808¥ 253,693 ¥267,168 ¥208,754

22$2,522(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.
(3) Includes the effect of foreign exchange movements.
F-63

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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 clients’ needs, finance trading
inventory positions and obtain securities for settlements. Under these transactions, Nomura either receives orprovides collateral, including Japanese and non-Japanese government, agency, mortgage-backed, bank andcorporate debt securities and equities. In many cases, Nomura is permitted to use the securities received to secure
repurchase agreements, enter into securities lending transactions or to cover 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 312010
2011

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 (reported within Trading liabilities
on the consolidated balance sheets) or repledged . . . . . . . . . . . . . . . . . . . . . . .

Translation
intobillions of
U.S. dollars
2011¥22,378¥28,262$341

19,64022,576273

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, arereported in parentheses as Securities pledged as collateral within Trading assets on the consolidated balance
sheets as of March 31, 2010 and 2011. 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 tables below:

Millions of yen
March 312010
2011

Trading assets:
Equities and convertible securities . . . . . . . . . . . . . . . . . . . . . . . . . . .
Government and government agency securities . . . . . . . . . . . . . . . . .
Bank and corporate debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial mortgage-backed securities (“CMBS”) . . . . . . . . . . . . .
Residential mortgage-backed securities (“RMBS”) . . . . . . . . . . . . . .
Mortgage and mortgage-backed securities . . . . . . . . . . . . . . . . . . . . .
Collateralized debt obligations (“CDO”) . . . . . . . . . . . . . . . . . . . . . .
Investment trust funds and other . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

7,623
2,144,648
169,251
26,072704,016
32,74016,522
6,048¥3,106,920

Non-trading debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥Investments in and advance to affiliated companies . . . . . . . . . . . . . . . . . ¥F-64

98,86035,933¥

Translation
intomillions of
U.S. dollars
2011

29,935977,291
93,25054,725
1,572,177—
64,2479,652¥2,801,277$¥¥$ 1,042$ 443

86,234
36,639362
11,8091,127
661
18,997—776
116$33,848

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 312010
2011

Loans and receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Office buildings, land, equipment and facilities . . . . . . . . . . . . . . . . . . . . .
Non-trading debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Translation
intomillions of
U.S. dollars
2011

¥
389
2,275,746
24,947143,029
12,738¥27,6352,010,605
20,815278,261—$334
24,294252
3,362—¥2,456,849¥2,337,316$28,242

Assets in the above table were primarily pledged for secured borrowings, including other secured
borrowings, collateralized bonds of consolidated VIEs and trading balances of secured borrowings, andderivative transactions. See Note 12, “Borrowings”, for further information regarding trading balances of
secured borrowings.
8. Securitization and Variable Interest Entities:
Securitizations
Nomura utilizes SPEs to securitize commercial and residential mortgage loans, government, agency andcorporate bonds and other types of financial assets. Those SPEs are incorporated as stock companies, 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 ASC 860. This statement
requires that Nomura accounts for the transfer of financial assets as a sale when Nomura relinquishes control
over the assets. ASC 860 deems control to be relinquished when the following conditions are met: (a) the assets
have been isolated from the transferor (even in bankruptcy or other receivership), (b) the transferee has the rightto pledge or exchange the assets received, or if the transferee is an entity whose sole purpose is to engage insecuritization or asset-backed financing activities, and that entity is constrained from pledging or exchanging theassets it receives, 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
retain an interest in the financial assets, including residual interests in the SPEs. Any such interests are accounted
for at fair value and reported within Trading assets in Nomura’s consolidated balance sheet, with the change infair value reported within Revenue-Net gain (loss) on trading. Fair value for retained interests in securitizedfinancial assets is determined by using 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 discount rates commensurate with the risks involved. Nomura may also enter into
derivative transactions in relation to the assets transferred to an SPE.
As noted above, Nomura may have continuing involvement with SPEs to which Nomura transferred assets.
During the years ended March 31, 2009 and 2010, Nomura received cash proceeds from SPEs of ¥137 billion and¥210 billion and recognized associated gains (losses) on sale of ¥203 million and (¥22 million), respectively.
During the year ended March 31, 2011, Nomura received cash proceeds from SPEs in new securitizations of
F-65

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)¥481 billion ($5.81 billion) and debt securities issued by these SPEs with an initial fair value of ¥2,271 billion($27.43 billion). During the year ended March 31, 2011, cash inflows from third parties on the sale of those debt
securities were ¥1,472 billion ($17.79 billion), and recognized profit on sale in new securitizations was¥0.2 million ($0.00 million). The cumulative balance of financial assets transferred to SPEs with which Nomura
has continuing involvement was ¥1,657 billion and ¥3,141 billion ($37.96 billion) as of March 31, 2010 and2011, respectively. Nomura’s retained interests were ¥134 billion and ¥199 billion ($2.40 billion) as ofMarch 31, 2010 and 2011, respectively. For the year ended March 31, 2010 and 2011, Nomura received cash
flows of ¥5 billion and ¥26 billion ($0.31 billion), respectively, from the SPEs on the retained interests held in
SPEs. Nomura had outstanding collateral service agreements or written credit default swap agreements in theamount of ¥30 billion and ¥28 billion ($0.34 billion) as of March 31, 2010 and 2011. Nomura does not provide
financial support to SPEs beyond its contractual obligations.
The following table presents the fair value of retained interests which Nomura has continuing involvementin SPEs and their classification in the fair value hierarchy, categorized by the type of transferred assets.
Billions of yen
March 31, 2011
Level 1

Level 2

Level 3

Total

Investment
grade

Government and government agency bonds . . . . . . . . .
Bank & corporate debt securities . . . . . . . . . . . . . . . . . .
Mortgage and mortgage-backed securities . . . . . . . . . . .

¥—
—
—

¥197
—
—

¥—
0
2

¥197
0
2

¥194
—
2

¥

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

¥—

¥197

¥

¥199

¥196

¥

2

Other

3
0
—
3

Level 1

Translation into billions of U.S. dollars
March 31, 2011
Investment
Level 2 Level 3
Total
grade

Other

Government and government agency bonds . . . . . . . .
Bank & corporate debt securities . . . . . . . . . . . . . . . . .
Mortgage and mortgage-backed securities . . . . . . . . .

$—
—
—

$2.38
—
—

$—
0.00
0.02

$2.38
0.00
0.02

$2.35
—
0.02

$0.03
0.00
—

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

$—

$2.38

$0.02

$2.40

$2.37

$0.03

F-66

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents the key economic assumptions used to determine the fair value of retainedinterests and the sensitivity of this fair value to immediate adverse changes of 10% and 20% in thoseassumptions.
Translation
intobillions ofBillions of yen
U.S. dollars
Material retained interest held(1)as of March 31
2010
2011
2011

Fair value of retained interests(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted-average life (Years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Constant prepayment rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impact of 10% adverse change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impact of 20% adverse change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impact of 10% adverse change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impact of 20% adverse change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥133
4.7
8.6%
(0.6)
(1.0)
4.5%
(2.1)
(4.1)

¥192
6.3
7.1%
(0.5)
(1.0)
4.7%
(4.3)
(7.4)

$ 2.32(0.01)(0.01)(0.05)(0.09)(1) The sensitivity analysis covers the material retained interests held of ¥133 billion out of ¥134 billion as ofMarch 31, 2010 and also ¥192 billion ($2.32 billion) out of ¥199 billion ($2.40 billion) as of March 31,
2011. Nomura considers the amount or the probability of anticipated credit loss from the retained interests
which Nomura continuously holds would be minimal.
Changes in fair value based on 10% or 20% adverse changes generally cannot be extrapolated since therelationship of the change in assumption to the change in fair value may not be linear. The impact of a change ina particular assumption is calculated holding all other assumptions constant. For this reason, concurrent changes
in assumptions may magnify or counteract the sensitivities disclosed above. The sensitivity analyses arehypothetical and do not reflect Nomura’s risk management practices that may be undertaken under those stressscenarios.

F-67

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents the type and carrying value of financial assets included within Trading assets
which have been transferred to SPEs but which do not meet the criteria for derecognition under ASC 860. Thesetransfers are accounted for as secured financing transactions within Long-term borrowings. The assets arepledged as collateral of the associated liabilities and cannot be removed unilaterally by Nomura. Also theseliabilities are non-recourse to Nomura.
Translation
intobillions ofBillions of yen U.S. dollars
March 31
2010
2011
2011

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

¥538
205
127
29

¥ 89
110
35
22

$1.08
1.33
0.42
0.27

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

¥899

¥256

$3.10

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

¥758

¥230

$2.78

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, mortgages and mortgage-backed securities. Nomura also consolidates certain
investment funds, which are VIEs, and for which Nomura is the primary beneficiary. Due to the adoption of
ASC 810, as amended by ASU 2009-17 on April 1, 2010, Nomura has additionally consolidated certain SPEs
which invest in the business of purchasing aircraft and operating leases of the aircraft and other SPEs engaged invarious businesses.

F-68

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents the classification of consolidated VIEs’ assets and liabilities. The assets of aconsolidated VIE may only be used to settle obligations of that VIE. Creditors do not have any recourse to
Nomura beyond the assets held in the VIEs.
Translation
intobillions ofBillions of yen
U.S. dollars
March 312010(3)2011
2011

Consolidated VIE assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading assets
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgage and mortgage-backed securities . . . . . . . . . . . . . . . . . . . . . . . . .
Investment trust fund and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Private equity investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities purchased under agreements to resell . . . . . . . . . . . . . . . . . . . . . . . .
Office buildings, land, equipment and facilities . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated VIE liabilities
Trading liabilities
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities sold under agreements to repurchase . . . . . . . . . . . . . . . . . . . . . . . . .
Borrowings
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 36

¥

222
49
46
0
1
1
13
24
55

92

$ 1.11

785
239
67
8
10
1
6
42(1)
84(2)

9.48
2.88
0.81
0.09
0.13
0.01
0.07
0.51
1.03

¥447

¥1,334$16.12

¥ 12
1
13

¥

6
32
2

$ 0.07
0.38
0.03

2
138
5

2
1,030
5

0.03
12.44
0.06

¥171

¥1,077$13.01(1) Includes aircraft of ¥30 billion ($0.36 billion) held by SPEs newly consolidated due to the adoption of ASC
810 as amended by ASU 2009-17. Certain of these SPEs are mainly engaged in aircraft leasing business.
(2) Includes aircraft purchase deposits of ¥15 billion ($0.18 billion). In relation to these aircraft purchasedeposits, certain of these SPEs have commitments to purchase aircrafts. Please refer to Note 20,“Commitments, contingencies and guarantees” for details.
(3) Previously reported amounts have been reclassified to conform to the current period presentation.
Nomura also holds variable interests in VIEs where Nomura is not the primary beneficiary. Nomura’s
variable interests in such VIEs include senior and subordinated debt, residual interests, and equity interests
associated with commercial and residential mortgage-backed and other asset-backed securitizations andstructured financings, equity interests in VIEs which were formed primarily to acquire high yield leveraged loans
and other lower investment grade debt obligations, residual interests in operating leases for aircraft held by VIEs,
and loans and investments in VIEs that acquire operating businesses.

F-69

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following tables present the carrying amount of variable interests of unconsolidated VIEs andmaximum 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 the amount recorded in the consolidated balance sheet, the amount of commitments and financial
guarantees, and the notional of the derivative instruments up to VIEs’ gross assets. Nomura believes the notionalamount of derivative instruments generally exceeds the amount of actual risk.
Billions of yen
March 31, 2010(1)exposure
Carrying amount of variable interests Maximum
to loss toAssetsLiabilities
unconsolidated VIEs

Trading assets
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgage and mortgage-backed securities . . . . . . . . . . . .
Investment trust fund and other . . . . . . . . . . . . . . . . . . . . .
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Private equity investments . . . . . . . . . . . . . . . . . . . . . . . . .
LoansShort-term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments to extend credit and other guarantees . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 98
27
54
3
2
—

¥—
—
—
—
10
—

¥ 98
27
54
3
34
—

31
74
0
—

—
—
—
—

31
74
0
8

¥289

¥ 10

¥329

Billions of yen
March 31, 2011
exposure
Carrying amount of variable interests Maximum
to loss toAssetsLiabilities
unconsolidated VIEs

Trading assets
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgage and mortgage-backed securities . . . . . . . . . . . .
Investment trust fund and other . . . . . . . . . . . . . . . . . . . . .
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Private equity investments . . . . . . . . . . . . . . . . . . . . . . . . .
LoansShort-term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments to extend credit and other guarantees . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-70

¥

80
164
2,070
80
1
24

¥—
—
—
—
—

80
164
2,070
80
17
24

3
31
4
—

—
—
—
—

3
31
4
17

¥2,457¥8¥

8¥2,490NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Translation into billions of U.S dollars
March 31, 2011
exposure
Carrying amount of variable interests Maximum
to loss toAssetsLiabilities
unconsolidated VIEs

Trading assets
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgage and mortgage-backed securities . . . . . . .
Investment trust fund and other . . . . . . . . . . . . . . .
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Private equity investments . . . . . . . . . . . . . . . . . . .
LoansShort-term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments to extend credit and other guarantees . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 0.97
1.98
25.01
0.97
0.01
0.29

$—
—
—
—
0.10
—

$ 0.97
1.98
25.01
0.97
0.21
0.29

0.03
0.38
0.05
—

—
—
—
—

0.03
0.38
0.05
0.19

$29.69$0.10$30.08(1) The amounts as of March 31, 2010 represent only significant positions or the positions of VIEs which
Nomura sponsored.
9. Financing receivables
Loans receivable
The key types of loans receivable recognized by Nomura are loans at banks, short-term secured marginloans, inter-bank money market loans and corporate loans.
Loans at banks are secured and unsecured loans extended by licensed banks within Nomura. For those loans
secured by real estate or securities, Nomura is exposed to the risk of a decline in the value of the underlying
collateral. For unsecured loans provided to investment banking clients, Nomura is exposed to risk of default of
the counterparty, although these counterparties usually have high credit ratings. Where loans are secured byguarantees, Nomura is also exposed to the risk of default by the guarantor.
Short-term secured margin loans are loans provided to clients in connection with stock brokerage activities.
These loans provide funding for clients in order to purchase securities. Nomura requests initial margin in theform of acceptable collateral securities or deposits against these loans and holds the purchased securities as
collateral through the life of the loans. If the value of the securities declines by more than specified amounts,
Nomura can make additional margin calls in order to maintain a specified ratio of loan-to-value (“LTV”) ratio.
For these reasons, the risk to Nomura of providing these loans is limited.
Inter-bank money market loans are loans to financial institutions in the inter-bank money market, where
overnight and intra-day financings are traded through money market dealers. The risk to Nomura of making theseloans is not significant as only qualified financial institutions can participate in these markets and these loans areusually overnight or short-term in nature.
Corporate loans are primarily loans provided to corporate clients. Corporate loans include loans secured byreal estate or securities, as well as unsecured loans which Nomura provides to investment banking clients. The
risk to Nomura of making these loans is similar to those risks arising from loans at banks.
F-71

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In addition to the loans above, Nomura has advances to affiliated companies which are loans provided torelated parties of Nomura. As these loans are generally not secured, Nomura is exposed to the risk of default of
the counterparty.
The following table presents a summary of the loans receivable reported within Loans receivable or
Investments in and advances to affiliated companies in the consolidated balance sheets by portfolio segment.
Certain reclassifications of previously reported amounts have been made to conform to the current year
presentation as a result of adoption of ASU 2010-20 during the year.

Millions of yen
March 312010
2011

Translation
intomillions of
U.S. dollars
2011

Loans at banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term secured margin loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inter-bank money market loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 264,058
169,706
23,638852,973¥ 320,296
206,910
8,281
735,797$ 3,870
2,500
100
8,891

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

¥1,310,375¥1,271,284$15,361of which:
Loans receivable carried at fair value(1) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans receivable carried at amortized cost . . . . . . . . . . . . . . . . . . . . . . . .

¥ 692,232
618,143¥ 554,180
717,104$ 6,696
8,665

Advances to affiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,632

12,766

154(1) Accounted for at fair value through election of the fair value option
There were no significant purchases or sales of Loans receivable and no reclassification of Loans receivable
to Trading assets during the year ending March 31, 2011.
Allowance for loan losses
Management establishes an allowance for loan losses for loans carried at amortized cost which reflects
management’s best estimate of probable losses incurred. The allowance for loan losses which is reported in the
consolidated balance sheets within Allowance for doubtful accounts comprises two components:•

A specific component for loans which have been individually evaluated for impairment; and•A general component for loans which, while not individually evaluated for impairment, have beencollectively evaluated for impairment based on historical loss experience

The specific component of the allowance for loan losses reflects probable losses incurred within loans whichhave been individually evaluated for impairment. 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 fairvalue of any underlying collateral. Loans that experience insignificant payment delays or insignificant payment
F-72

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
shortfalls are not classified as impaired. The impairment is measured on a loan by loan basis by adjusting thecarrying value of the loan to either the present value of expected future cash flows discounted at 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 is for loans not individually evaluated for
impairment and includes judgment about collectability based on available information at the balance sheet date
and the uncertainties inherent in those underlying assumptions. The allowance is based on 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 original assumptions.
Loans are charged-off when Nomura determines that the loans are uncollectible. This determination is basedon factors such as the occurrence of significant changes in the borrower’s financial position such that the borrower
can no longer pay the obligation or that the proceeds from collateral will not be sufficient to pay the loans.
The following table presents movements in the total allowance for doubtful accounts for the year ending
March 31, 2009, 2010 and 2011.

2009

Millions of yen
Year ended March 31
2010
2011

Translation
intomillions of
U.S. dollars
2011

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,399 ¥ 3,765 ¥5,425
3,089
2,214
(690)
(318) (1,637)
(91)
(405)
1,083
216

$66
(8)
(1)
2

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

¥3,765$59¥ 5,425(1) Includes gains and losses resulting from foreign currency translation adjustments.

F-73¥4,860NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Changes in the allowance for losses by portfolio segment are presented below:
Millions of yen
Year ended March 31, 2011
Allowance
ShortTotal
for
Total
term
Advancesallowance receivables allowance
secured Inter-banktofor doubtful other than for loan
Loans margin
money
Corporate affiliatedaccounts
loans
lossesat banks loans market loans
loanscompanies

Balance at beginning of year . . .
Provision for losses . . . . . .
Charge-offs . . . . . . . . . . . .
Other(1) . . . . . . . . . . . . . . . .

¥5,425
(690)
(91)
216

¥1,036 ¥4,389 ¥ 783 ¥ 25
143(833) (253)
13
(59)
(32)
(32) —
(69)
285
(159)
(1)

¥

5
(5)
—
—

¥3,576
(599)
—
445

¥—
11
—
—

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

¥4,860¥1,051¥—¥3,422¥ 11¥3,809

¥ 339

¥ 37

Translation into millions of U.S. dollars
Year ended March 31, 2011
Total
Allowance
allowancefor
Total
Short-term Inter-bank
Advancesforreceivables allowance Loans secured
moneytodoubtful other than for loanatmarginmarket Corporate affiliatedaccounts
loans
losses
banks
loans
loans
loans
companies

Balance at beginning of year . . . . .
Provision for losses . . . . . . . .
Charge-offs . . . . . . . . . . . . . . .
Other(1) . . . . . . . . . . . . . . . . . .

$66
(8)
(1)
2

$13
2
(1)
(1)

$ 53
(10)
(0)
3

$9
(3)
(0)
(2)

$

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

$59

$13

$ 46

$4

0
0

$

—
(0)

0
(0)
—
—

$ 44
(7)
—
5

$—
0
—
—

$

$—

$ 42

$

0

0

(1) Includes gains and losses resulting from foreign currency translation adjustments.
The following tables present the allowance for loan losses and loans by impairment methodology and typeof loans as of March 31, 2011.
Millions of yen
March 31, 2011

Loans atbanks

Advances
Short-term
Inter-banktosecured margin
money
Corporate affiliatedloansmarket loans
loanscompanies

Total

Allowance by impairment methodology
Evaluated individually . . . . . . . . . . . . . . ¥Evaluated collectively . . . . . . . . . . . . . .

7
332

¥

—
37

¥ —
—

¥ 3,272 ¥
150

— ¥
11

3,279
530

Total allowance for loan losses . . . . . . . . . . . ¥

339

¥

37

¥ —

¥ 3,422 ¥

11 ¥

3,809

Loans by impairment methodology
Evaluated individually . . . . . . . . . . . . . . ¥7
Evaluated collectively . . . . . . . . . . . . . . 257,270¥—
206,910¥8,281—¥228,776 ¥ 483 ¥237,547
15,860 12,283 492,323

Total loans . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥257,277¥206,910¥8,281¥244,636 ¥12,766 ¥729,870

F-74

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

Loans atbanks

Allowance by impairment methodology
Evaluated individually . . . . . . . . . . . . . . .
Evaluated collectively . . . . . . . . . . . . . . . .

$Total allowance for loan losses . . . . . . . . . . . . .

$Translation into millions of U.S. dollars
March 31, 2011
Inter-bank
Advances
Short-termmoney
tosecured margin market
Corporate affiliated
loans
loans
loans
companies

0
4

$ —

$—
—

$

0

4

$

0

$—

$

Loans by impairment methodology
Evaluated individually . . . . . . . . . . . . . . . $0Evaluated collectively . . . . . . . . . . . . . . . .
3,109

$ —
2,500

Total loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$2,500$3,109

Total

40
2

$—

$

40
6

42

$

0

$

46

$100
—

$2,764
192

$

6
148

$2,8705,949$100$2,956$154$8,8190

Nonaccrual and past due loans
Loans which are individually evaluated as impaired are assessed for a nonaccrual status in accordance with
Nomura’s policy. When it is determined to suspend interest accrual as a result of an assessment, any accrued but
unpaid interest is reversed. Loans are generally only returned to an accrual status if the loan is brought
contractually current, i.e. all overdue principal and interest amounts are paid. In limited circumstances, a loan
which has not been brought contractually current will also be returned to an accrual status if all principal andinterest amounts contractually due are reasonably assured of repayment within a reasonable period of time orthere has been a sustained period of repayment performance by the borrower.
There are no significant loans which are on a nonaccrual status or 90 days past due and still accruing as ofMarch 31, 2011.
Credit quality indicators
Nomura is exposed to credit risks deriving from a decline in the value of loans or a default caused bydeterioration of creditworthiness or bankruptcy of the borrower. Nomura’s risk management framework for suchcredit risks is based on a risk assessment through an internal credit rating process, in depth pre-financing credit
analysis of each individual loan and continuous post-financing monitoring of borrower’s creditworthiness. Loansconsidered as collateralized transactions are not subject to an internal credit rating process as Nomura monitors
the value of posted collateral closely and understands means to prevent potential losses.

F-75

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following tables present an analysis of each class of loans not carried at fair value using Nomura’sinternal ratings or equivalent credit quality indicators applied by subsidiaries as of March 31, 2011.

AAA-BBB

Millions of yen
March 31, 2011
BB-CCC
CC-D
Others(1)Secured loans at banks . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unsecured loans at banks . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term secured margin loans . . . . . . . . . . . . . . . . . . . .
Secured inter-bank money market loans . . . . . . . . . . . . . .
Secured corporate loans . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unsecured corporate loans . . . . . . . . . . . . . . . . . . . . . . . . .
Advances to affiliated companies . . . . . . . . . . . . . . . . . . .

¥111,841
102,636—
8,281
30,56730,30912,283¥17,449———
5,170
52,445—¥ —Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥295,917¥75,064

Total

—
—
2,000
1,395
—

¥ 25,344—
206,910—
122,750—483¥154,634
102,643
206,910
8,281
160,487
84,14912,766¥3,402¥355,487¥729,870

7Translation into millions of U.S. dollars
March 31, 2011
AAA-BBB BB-CCC
CC-D
Others(1)Total

Secured loans at banks . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unsecured loans at banks . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term secured margin loans . . . . . . . . . . . . . . . . . . . .
Secured inter-bank money market loans . . . . . . . . . . . . . .
Secured corporate loans . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unsecured corporate loans . . . . . . . . . . . . . . . . . . . . . . . . .
Advances to affiliated companies . . . . . . . . . . . . . . . . . . .

$1,353
1,240
—
100
369
366
148

$211
—
—
—
62
634
—

$—
—
—
24
17
—

$ 305
—
2,500
—
1,484
—
6

$1,869
1,240
2,500
100
1,939
1,017
154

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

$3,576$907$ 41$4,295$8,8190(1) Relate to collateral exposures where a specified ratio of LTV is maintained.
Nomura reviews internal counterparty credit ratings at least once a year by using available borrower’s credit
information including financial statements and other information. Internal counterparty credit ratings are also
reviewed more frequently for high-risk borrowers or problematic exposures and any significant credit event of acounterparty will trigger on immediate credit review process.
10. Business combinations:
During the year ended March 31, 2011, there were no significant business combinations.
In October 2008, Nomura acquired the majority of Lehman Brothers’ (“Lehman”) Asia Pacific operations,
its equities and investment banking operations in Europe and the Middle East, and hired certain of its fixedincome personnel in Europe. The acquisition agreements generally provided for the transfer of certain
employees, the purchase of certain assets and the assumption of certain liabilities for those operations. Financial
assets and financial liabilities were generally not acquired. The acquisitions have strengthened Nomura’s
wholesale and investment banking businesses and expanded its global capabilities.
Nomura also acquired Lehman’s specialized service companies in India by purchasing the shares of Lehman
Brothers Services India Private Ltd., Lehman Brothers Financial Services (India) Private Ltd. and Lehman
F-76

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Brothers Structured Finance Services Private Ltd. These three companies functioned as a shared-services
platform for Lehman’s businesses in Europe and Asia-Pacific by supporting IT operations, financial control andglobal risk management.
Nomura accounted for these acquisitions as a business combination and therefore the operating results of theacquired businesses have been included in Nomura’s consolidated statements of operations from October 2008.
The purchase price allocation of the total acquisition cost to the acquired assets and the assumed liabilities wascompleted within one year from the acquisition date. The recognized goodwill amount was ¥23,224 million as of
September 30, 2009. Nomura incurred costs of ¥48,159 million for these acquisitions from the acquisition datethrough to September 30, 2009. The assumed liabilities related to this acquisition were ¥26,241 million,
primarily due to costs of relocating and terminating certain employees of the acquired businesses.
The following table provides a summary of the fair value of the assets acquired, including goodwill, and theliabilities assumed, as of the acquisition date, which were completed by September 30, 2009:
Millions of yen

Assets:Cash and cash deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans and receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Office buildings, land, equipment and facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities:
Payables and deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition costs(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 7,815
1,419
23,016
26,4206,130
64,80011,08028,78539,86524,935
48,159¥23,224(1) Intangible assets primarily comprise the fair value of client relationships and favorable lease agreements,
which will be amortized based on a weighted-average amortization period of 10 years with no residual
value.
(2) Acquisition costs primarily comprise the fair value of consideration given and direct acquisition costs
incurred.
(3) Goodwill represents the value expected from benefits created from strengthening Nomura’s wholesale andinvestment banking businesses and expanding its global operations by integrating Lehman’s client base.
Among this amount, ¥15 billion has been allocated to Nomura’s Global Markets and the remaining ¥8billion to its Investment Banking of Wholesale Division at the acquisition date. ¥8 billion of goodwill isdeductible for Japan tax purposes.
In addition, to restructuring of the acquired businesses, management also initiated a restructuring of
Nomura’s existing activities of at the end of 2008. For the years ended March 31, 2009 and 2010, total
restructuring costs of ¥7 billion and ¥2 billion respectively have been recognized in the consolidated statementsof operations.

F-77

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, 2008.
Millions of yen,
except per share amounts
Year ended March 31, 2009

Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) attributable to NHI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 679,920(794,081)(408.92)(410.55)

The unaudited condensed combined pro forma financial information is presented for illustrative purposes
only and is not indicative of the actual consolidated financial results that would have been reported had theacquisitions actually taken place as of April 1, 2008. It also is not indicative of the results of operations in future
periods.
Subsequent events
For the purpose of streamlining Nomura Group’s management structure for faster decision making relating
to reorganization, on May 13, 2011, Nomura entered into an agreement with one of its related companies,
Nomura Land and Building Co., Ltd. (“NLB”) to implement a stock for stock exchange (“Stock Exchange
Agreement”). Based on the Stock Exchange Agreement, NLB will become a wholly owned subsidiary of
Nomura effective from July 1, 2011 (“effective date”). Also, in advance of the effective date, Nomura acquired
additional NLB shares (“Share Purchases”) as of May 24, 2011. As a result of the Share Purchases, NLB became
a consolidated subsidiary of Nomura.
Nomura will account for the Share Purchases as a business combination in these consolidated financial
statements in future periods. As the Share Purchases were recently completed, Nomura is in the process ofvaluing the assets, liabilities, noncontrolling interests, and any gain or loss arising from the Share Purchases.
Nomura paid approximately ¥38 billion in relation to the Share Purchases.
11. Other assets—Other / Other liabilities:
The following table presents Other assets-Other and Other liabilities in the consolidated balance sheets by type.

Millions of yen
March 31
2010
2011

Other assets—Other:
Securities received as collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill and other intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments in equity securities for other than operating purposes(1) . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities:
Obligation to return securities received as collateral . . . . . . . . . . . . . . . . . . . .
Accrued income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accrued expenses and provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-78

Translation
intomillions of
U.S. dollars
2011

¥

5,503
134,015
308,679
9,636
140,913¥598,746¥ 43,624
116,834
241,911
11,915
154,209¥568,493

$ 527
1,412
2,923
144
1,863
$6,869¥¥ 43,624
10,123404,048
94,521¥552,316

$ 527
122
4,882
1,142
$6,673

5,503
28,015411,327
50,138¥494,983

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(1) 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 ¥5,236 million and ¥4,400 million, respectively as of March 31, 2010, and¥6,496 million ($79 million) and ¥5,419 million ($65 million) respectively, as of March 31, 2011. These
securities are carried at fair value, with changes in fair value reported within Revenue—Other in the
consolidated statements of operations.
Goodwill is recognized upon completion of a business combination as the difference between the purchaseprice and the fair value of the net assets acquired. Subsequent to initial recognition, goodwill is not amortized but
is tested for impairment during the fourth quarter of each fiscal year, or more often if events or circumstances,such as adverse changes in the business climate, indicate there may be impairment.
Changes in goodwill, which are reported in the consolidated balance sheets within Other assets-Other, areas follows.
Translation
intomillions ofMillions of yen
U.S. dollars
Year ended March 31
2010
2011
2011

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increases due to business combinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥70,459 ¥79,818$ 965
13,003(1)——(3,644)(2) (9,595)(3) (116)

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

¥79,818¥70,223(4)$ 849(1) ¥10,206 million ($109 million) is related to Lehman and ¥1,193 million ($13 million) is related to Torc
Investments & Research, which is a consolidated subsidiary of Instinet, Inc. In addition, ¥902 million($10 million) is related to NikkoCiti Trust and Banking Corporation, which is a consolidated subsidiary of
The Nomura Trust & Banking Co., Ltd. and changed its name to NCT Trust and Banking Corporation on
March 1, 2010. In addition, ¥702 million ($8 million) relates to the acquisition in March 2010, of Nexen
Energy Marketing London (which became a subsidiary of Nomura European Investment Limited).
(2) Decrease of ¥3,560 million ($38 million) relates to currency translation adjustments.
(3) Decrease of ¥7,276 million ($88 million) relates to currency translation adjustments.
(4) ¥69,800 million ($843 million) is attributed to Nomura’s Wholesale segment.
Impairment testing
The goodwill impairment test is performed in two steps. In the first step, the current fair value of eachreporting unit is compared with its carrying value, including goodwill. If the fair value is less than the carrying
value, then a second step is performed. In the second step, the implied current fair value of the reporting unit’s
goodwill is determined by comparing the fair value of the reporting unit to the fair value of the net assets of thereporting unit, as if the reporting unit were being acquired in a business combination. The impairment isrecognized if the carrying value of goodwill exceeds its implied current fair value. Goodwill impairment testingis performed at a level below Nomura’s business segments.
The primary method the Company uses to estimates fair value of its reporting unit is the income approach.
The assumptions used in the valuations of the reporting units include estimates of future cash flows and the costof equity used to discount those cash flows to a present value. The valuation of the reporting units is dependent
F-79

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
upon economic conditions. Deterioration in these assumptions as well as in market conditions could cause theestimated fair values of these reporting units and their associated goodwill to decline, which may result in an
impairment charge to earnings in a future period related to some portion of the associated goodwill.
The gross carrying amounts of other intangible assets subject to amortization were ¥59,513 million and¥56,023 million ($677 million) as of March 31, 2010 and 2011, respectively. These amounts primarily compriseclient relationships related to the acquisitions of Instinet and Lehman, which will be amortized based on aweighted-average amortization period of 15 years and 10 years, respectively. The gross carrying amounts ofother intangible assets not subject to amortization were ¥8,015 million and ¥8,231 million ($99 million) as ofMarch 31, 2010 and 2011, respectively. Accumulated amortization of other intangible assets amounted to¥13,331 million and ¥17,643 million ($213 million) as of March 31, 2010 and 2011, respectively.
12. Borrowings:
Short-term and long-term borrowings of Nomura as of March 31, 2010 and 2011 are shown below:

Millions of yen
March 312010
2011

Translation
intomillions of
U.S. dollars
2011

Short-term borrowings(1):Commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bank borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 484,614
631,879
185,171¥1,301,664

Long-term borrowings:
Long-term borrowings from banks and other financial
institutions(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥2,235,948
Bonds and notes issued(3):Fixed-rate obligations:Japanese yen denominated . . . . . . . . . . . . . . . . . . . . . . . . .
1,157,449
Non-Japanese yen denominated . . . . . . . . . . . . . . . . . . . . .
534,494
Floating-rate obligations:Japanese yen denominated . . . . . . . . . . . . . . . . . . . . . . . . .
139,824
Non-Japanese yen denominated . . . . . . . . . . . . . . . . . . . . .
194,427
Index / Equity-linked obligations:Japanese yen denominated . . . . . . . . . . . . . . . . . . . . . . . . .
1,434,094
Non-Japanese yen denominated . . . . . . . . . . . . . . . . . . . . .
744,428
4,204,716
Sub-Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,440,664
Trading balances of secured borrowings . . . . . . . . . . . . . . . . . . . . . .
758,397
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥7,199,061¥ 379,500
563,748
223,829¥1,167,077

$

4,586
6,812
2,704
$ 14,102¥2,559,325$ 30,925

1,365,805
748,626

16,503
9,046

897,147
364,796

10,8404,408

1,251,330
985,723
5,613,427
8,172,752
230,165¥8,402,917

15,12011,911
67,82898,753
2,781$101,534(1) Includes secured borrowings of ¥25,411 million as of March 31, 2010 and ¥44,159 million ($534 million) as ofMarch 31, 2011.
(2) Includes secured borrowings of ¥30,879 million as of March 31, 2010 and ¥6,093 million ($74 million) as of March 31,
2011.
(3) Includes secured borrowings of ¥66,078 million as of March 31, 2010 and ¥1,000,856 million ($12,093 million) as ofMarch 31, 2011.

F-80

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Trading balances of secured borrowings
These are liabilities recognized when a transfer of a financial asset does not meet the criteria for sales
accounting under ASC 860 and therefore the transaction is accounted for as a secured borrowing. Theseborrowings are part of Nomura’s trading activities intended to generate profits from the distribution of financial
products secured by those financial assets.
Long-term borrowings consisted of the following:

Millions of yen
March 31
2010
2011

Debt issued by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥2,674,768
Debt issued by subsidiaries—guaranteed by the Company . . . . . . . . . . . .
2,145,020
Debt issued by subsidiaries—not guaranteed by the Company(1) . . . . . . .
2,379,273
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥7,199,061

Translation
intomillions of
U.S. dollars
2011¥3,205,519
2,270,308
2,927,090$ 38,733
27,43235,369¥8,402,917$101,534(1) Includes trading balances of secured borrowings.
As of March 31, 2010, fixed-rate long-term borrowings are due between 2010 and 2056 at interest rates
ranging from 0.10% to 7.00%. Floating-rate obligations, which are generally based on LIBOR, are due between
2010 and 2052 at interest rates ranging from 0.04% to 3.95%. Index / Equity-linked obligations are due between
2010 and 2042 at interest rates ranging from 0.00% to 23.95%.
As of March 31, 2011, fixed-rate long-term borrowings are due between 2011 and 2035 at interest rates
ranging from 0.00% to 10.01%. Floating-rate obligations, which are generally based on LIBOR, are due between
2011 and 2038 at interest rates ranging from 0.10% to 8.30%. Index / Equity-linked obligations are due between
2011 and 2042 at interest rates ranging from 0.00% to 32.50%.
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 other indexlinked instruments.
Nomura enters into swap agreements to manage its exposure to interest rates and foreign exchange rates.
Principally, bonds and notes issued are effectively converted to LIBOR-based floating rate obligations throughsuch 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, including the effect of fair value hedges, wereas follows:
March 3120102011

Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed-rate obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating-rate obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Index / Equity-linked obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-81

0.94%
1.60%
2.03%
1.14%
1.62%

0.63%
1.48%
2.30%
0.99%
1.20%

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Maturities 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, 2010 consist of the following:
Year ending March 31

Millions of yen

2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 477,200
742,663885,951
418,999866,280
3,049,571

Sub-Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,440,664

Trading balances of secured borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

758,397

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

¥7,199,061

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, 2011 consist of the following:

Year ending March 31

Millions of yen

Translation
intomillions of
U.S. dollars

2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 892,016
980,689
936,836
1,239,348
856,532
3,267,331$ 10,778
11,85011,32014,975
10,35039,480Sub-Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,172,752

98,753

Trading balances of secured borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

230,165

2,781¥8,402,917$101,534

Borrowing facilities
As of March 31, 2010 and 2011, Nomura had unutilized borrowing facilities of ¥172,309 million and¥124,380 million ($1,503 million), respectively.
Subordinated borrowings
As of March 31, 2010 and 2011, subordinated borrowings were ¥908,755 million and ¥1,059,261 million($12,799 million), respectively.

F-82

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
13. Earnings per share:
Basic and diluted earnings per share (“EPS”) are presented on the face of the consolidated statements ofoperations. Basic EPS is calculated by dividing net income attributable to NHI by the weighted average numberof common shares outstanding during the year. The calculation of diluted EPS is similar to basic EPS, except thatthe 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 attributable to NHI is adjusted for any
change in income or loss that would result from the assumed conversion of dilutive instruments issued byaffiliates.
A reconciliation of the amounts and the numbers used in the calculation of net income (loss) attributable to
NHI common shareholders per share (basic and diluted) is as follows:
Translation into
millions of
U.S. dollars except
per share data
presented in
U.S. dollars

Yen amounts in millions
except per share data presented in yen
Year ended March 31
2009
2010
2011

Basic—Net income (loss) attributable to
NHI shareholders . . . . . . . . . . . .

¥(708,192) ¥67,798¥2011

28,661$ 346

Weighted average number of shares
outstanding . . . . . . . . . . . . . . . . .

1,941,906,637

Net income (loss) attributable to
NHI shareholders per share . . . . .

¥(364.69) ¥

21.68

¥

7.90

$0.10

Diluted—
Net income (loss) attributable to
NHI shareholders . . . . . . . . . . . .

¥(708,207) ¥67,784¥28,642$ 346

Weighted average number of shares
outstanding . . . . . . . . . . . . . . . . .

1,934,159,290

Net income (loss) attributable to
NHI shareholders per share . . . . .

¥(366.16) ¥3,126,790,289

3,627,798,587

3,139,394,052
21.59

3,642,689,381
¥

7.86

$0.09

For the year ended March 31, 2010, in determining diluted EPS, net income attributable to NHI shareholders
was adjusted to reflect the decline in Nomura’s income arising from convertible bonds issued by the Company.
The decline of net income arising from convertible bonds was caused by presuming lump-sum expensing of thedifference between the bond’s carrying amount and the bond’s redemption amount, which is accumulated overthe life of the bond. Net income (loss) attributable to NHI shareholders was adjusted to reflect the decline in
Nomura’s equity share of earnings of affiliates for the years ended March 31, 2009, 2010, and 2011 arising from
options to purchase common shares issued by affiliates.
The weighted average number of shares used in the calculation of diluted EPS reflects the decrease inpotential issuance of common shares arising from stock-based compensation plans by the Company, which
F-83

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
would reduce EPS for the year ended March 31, 2009. The weighted average number of shares used in thecalculation of diluted EPS reflects the increase in potential issuance of common shares arising from convertible
bonds and stock-based compensation plans by the Company, which would reduce EPS for the year ended March
31, 2010. The weighted average number of shares used in the calculation of diluted EPS reflects the increase inpotential issuance of common shares arising from stock-based compensation plans by the Company, which
would have minimal impact on EPS for the year ended March 31, 2011.
Antidilutive stock option and convertible bonds to purchase or convert to 266,942,428 common shares as ofMarch 31, 2009, were not included in the computation of diluted EPS. Antidilutive stock options to purchase
12,436,800 and 59,670,700 common shares were not included in the computation of diluted EPS for the year
ended March 31, 2010 and 2011, respectively.
The convertible bonds of ¥110,000 million were converted to 258,040,481 common shares for the year
ended March 31, 2010. All of the convertible bonds were exercised for the year ended March 31, 2010, andtherefore, the balance of outstanding convertible bonds as of March 31, 2011 was nil.
Nomura issued 766,000,000 shares and 34,000,000 shares by way of public offering with a total amount tobe paid of ¥416,949 million on the payment date of October 13, 2009 and third-party allotment with a total
amount to be paid of ¥18,507 million on the payment date of October 27, 2009.
Nomura conducted a share buyback of 75,000,000 common shares which amounted to ¥37,362 million from
August 9, 2010 to August 31, 2010.
14. Employee benefit plans:
Nomura provides various pension plans and other post-employment benefits 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 eligible employees. 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 of service, age at retirement andemployee’s choice. The benefits under the plans are calculated based upon position, years of service and reason
for retirement. In addition to the plans described above, certain Japanese entities also have unfunded lump-sum
payment plans. Under these plans, employees with at least two years of service are generally entitled to
lump-sum payments upon termination of employment. The benefits under the plans are calculated based upon
position, years of service and the reason for retirement. Nomura’s funding policy is to contribute annually theamount necessary to satisfy local funding standards. In December 2008, certain contributory funded benefit
pension plans and unfunded lump-sum payment plans were amended and “cash balance pension plans” wereintroduced. Participants receive an annual benefit in their cash balance pension plan account, which is computed
based on compensation of the participants, adjusted for changes in Japanese government bond rates. This planamendment contributed to a reduction in the benefit obligations of the subsidiaries.
Some overseas subsidiaries have various local defined benefit plans covering certain employees. Nomura
recognized an asset for pension benefits for these plans amounting to ¥4,862 million and ¥5,787 million ($70
million) as of March 31, 2010, and 2011, respectively.
F-84

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Net Periodic Benefit Cost
The net periodic benefit cost of the defined benefit plans includes the following components. Nomura’s
measurement date is March 31 for its defined benefit plans for Japanese entities.
Japanese entities’ plans—2009

Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of net actuarial losses . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net periodic benefit cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Millions of yen
Year ended March 31
2010
2011

¥ 9,706 ¥ 8,719 ¥ 9,328
5,058
4,307
4,480
(3,543) (3,023) (3,182)
3,260
4,735
3,088
(202) (1,148) (1,148)¥14,279 ¥13,590 ¥12,566

Translation
intomillions of
U.S. dollars
2011

$113
54
(38)
37
(14)
$152

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.

F-85

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Benefit Obligations and Funded Status
The following table presents a reconciliation of the changes in projected benefit obligation (“PBO”) and thefair value of plan assets, as well as 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
2010
2011
2011

Change in projected benefit obligation:
Projected benefit obligation at beginning of year . . . . . . . . . . . . . . . . . . .
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Projected benefit obligation at end of year . . . . . . . . . . . . . . . . . . . . . . . .
Change in plan assets:
Fair value of plan assets at beginning of year . . . . . . . . . . . . . . . . . . . . .
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employer contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of plan assets at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . .
Funded status at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amounts recognized in the consolidated balance sheets . . . . . . . . . . . . . . . . .

¥229,881 ¥215,761
8,719
9,328
4,307
4,480
(13,218)(647)(14,423) (15,406)
495
137¥215,761 ¥213,653$ 2,607
113
54
(8)
(186)
2
$ 2,582¥116,484 ¥122,632
12,927
1,865
993
4,407
(7,772)(8,177)¥122,632 ¥120,727(93,129) (92,926)¥ (93,129) ¥ (92,926)$ 1,48223
53(99)$ 1,459(1,123)$(1,123)

The accumulated benefit obligation (“ABO”) was ¥212,183 million and ¥211,425 million ($2,555 million)
as of March 31, 2010 and 2011, respectively.

F-86

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
PBO, ABO, and fair value of plan assets for pension plans with ABO and PBO in excess of plan assets as ofMarch 31, 2010 and 2011 are set forth in the tables below.
Japanese entities’ plans—Millions of yen
March 312010
2011

Plans with ABO in excess of plan assets:
PBO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥215,761 ¥213,653
ABO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
212,183
211,425
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
122,632
120,727
Plans with PBO in excess of plan assets:
PBO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥215,761 ¥213,653
ABO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212,183
211,425
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
122,632
120,727

Translation
intomillions of
U.S. dollars
2011$2,582
2,555
1,459$2,582
2,555
1,459

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
2011
2011

Net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 68,227(14,094)

$ 824
(170)

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

¥ 54,133$ 654

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
2012
2012

Net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 3,088(1,148)$ 37(14)

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

¥ 1,940

$ 23

F-87

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Assumptions
The following table presents the weighted-average assumptions used to determine projected benefit
obligations at year end:
Japanese entities’ plans—
March 312010 2011

Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rate of increase in compensation levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.2% 2.1%
2.5% 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
2009
2010
2011

Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rate of increase in compensation levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected long-term rate of return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.0% 2.2% 2.1%
2.5% 2.5% 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.
Plan Assets
The Nomura’s plan assets are managed with an objective to secure necessary plan assets in the long term toenable future pension payouts. While targeting to achieve the long-term rate of return on plan assets, Nomura
aims to minimize short-term volatility by managing the portfolio through diversifying risk. Based on thisportfolio policy, the plan assets are invested diversely.
The plan assets of domestic plans target to invest 23% in equities (includes private equity), 50% in debt
securities, 15% in life insurance company general accounts and 12% in other. Investment allocations are
generally reviewed and revised at the time of the actual revaluation that takes place every five years or when
there is a significant change in prerequisites for the portfolio.

F-88

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following tables present information about the plan assets at fair value as of March 31, 2010 andMarch 31 2011 within the fair value hierarchy. For details of the levels of inputs used to measure the fair value,
see Note 3, “Fair value of financial instruments.”
Japanese entities’ plans—Millions of yen
March 31, 2010
Balance as ofMarch 31, 2010

Level 1

Level 2

Level 3Pension plan assets:
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Private equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese government securities . . . . . . . . . . . . . . . . . . . . . . .
Japanese agency and municipal securities . . . . . . . . . . . . . . .
Foreign government securities . . . . . . . . . . . . . . . . . . . . . . . .
Bank and corporate debt securities . . . . . . . . . . . . . . . . . . . . .
Investment trust funds and other(1) . . . . . . . . . . . . . . . . . . . . .
Life insurance company general accounts . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥28,803—48,365
275
3,751
—
—
—
—

¥

—
—
—
—
—
520
11,23018,204
1,221

¥

—
892
—
—
—
—
9,371
—
—

¥ 28,803
892
48,365
275
3,751
520
20,601
18,204
1,221

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

¥81,194¥31,175¥10,263¥122,632

Millions of yen
March 31, 2011
Balance as ofMarch 31, 2011

Level 1

Level 2

Level 3Pension plan assets:
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Private equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese government securities . . . . . . . . . . . . . . . . . . . . . . .
Japanese agency and municipal securities . . . . . . . . . . . . . . .
Foreign government securities . . . . . . . . . . . . . . . . . . . . . . . .
Bank and corporate debt securities . . . . . . . . . . . . . . . . . . . . .
Investment trust funds and other(1) . . . . . . . . . . . . . . . . . . . . .
Life insurance company general accounts . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥23,121—47,099
—
—
—
—
—
—

¥

—
—
—
—
—
—
18,29019,344
3,228

¥

—
838
—
—
—
—
8,807
—
—

¥ 23,121
838
47,099———27,097
19,344
3,228

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

¥70,220¥40,862¥ 9,645¥120,727

F-89

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Translation into millions of U.S. dollars
March 31, 2011
Balance as ofLevel 1
Level 2
Level 3
March 31, 2011

Pension plan assets:
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Private equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese government securities . . . . . . . . . . . . . . . . . . . . . . .
Japanese agency and municipal securities . . . . . . . . . . . . . . .
Foreign government securities . . . . . . . . . . . . . . . . . . . . . . . .
Bank and corporate debt securities . . . . . . . . . . . . . . . . . . . . .
Investment trust funds and other(1) . . . . . . . . . . . . . . . . . . . . .
Life insurance company general accounts . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$279
—
569
—
—
—
—
—
—

$—
—
—
—
—
—
221
234
39

$—
10
—
—
—
—
107
—
—

$ 279
10
569
—
—
—
328
234
39

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

$848

$494

$117

$1,459(1) Includes hedge funds and real estate funds.
The fair value of the non-Japan plan assets as of March 31, 2010 was ¥2,945 million, ¥18,350 million and¥1,658 million for Level 1, Level 2 and Level 3, respectively. The fair value of the non-Japan plan assets as ofMarch 31, 2011 was ¥3,055 million ($37 million), ¥18,584 million ($225 million) and ¥1,692 million ($20
million) for Level 1, Level 2 and Level 3, respectively.
Level 1 includes principally equity securities and government securities. Unadjusted quoted prices in active
markets for identical assets that Nomura has the ability to access at the measurement date are classified as
Level 1. Level 2 includes principally investment trust funds, corporate debt securities and investments in life
insurance company’s general accounts. Investment trust funds are valued at their net asset values as calculated by
the sponsor of the funds. Investments in life insurance company’s general accounts are valued at conversion
value.
The following tables present information about the plan assets for which Nomura has utilized Level 3 inputs
to determine fair value.
Japanese entities’ plans—

Balance
as ofApril 1,
2009

Private equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 980
Investment trust funds and other . . . . . . . . . . . . . .
1,411
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2,391F-90

Millions of yen
Year ended March 31, 2010
Purchases /Net
Unrealized
sales and transfers in /and realizedother(out of)gains / loss
settlement
Level 3

Balance
as ofMarch 31,
2010

¥(12)
4

¥ (76)
7,956

¥—
—

¥

892
9,371

¥ (8)

¥7,880¥—¥10,263

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

Balance
as ofApril 1,
2010

Private equity . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment trust funds and other . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

892
9,371

¥10,263

Balance
as ofApril 1,
2010

Millions of yen
Year ended March 31, 2011
Purchases /Net
Unrealized
sales and transfers in /and realizedother(out of)gains / loss
settlement
Level 3¥

Balance
as ofMarch 31,
2011

5
(376)

¥ (59)
(188)

¥—
—

¥ 838
8,807

¥(371)¥(247)¥—¥9,645

Translation into millions of U.S. dollars
Year ended March 31, 2011
Purchases /Net
Unrealized
sales and transfers in /and realizedother(out of)gains / loss
settlement
Level 3

Balance
as ofMarch 31,2011

Private equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment trust funds and other . . . . . . . . . . . . . .

$ 11
113

$0
(5)

$(1)
(1)

$—
—

$ 10
107

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

$124

$(5)

$(2)

$—

$117

For plan assets, Nomura adopted ASU 2009-12 as of April 1, 2009.
The fair value of Level 3 non-Japan plans assets, consisting of real estate funds, was ¥1,658 million and¥1,692 million ($20 million) as of March 31, 2010 and March 31, 2011, respectively. The amount of gains andloss, purchases and sales, transfers between Level 1 or Level 2 and Level 3 relating to these assets during theyears ended March 31, 2010 and 2011 were not significant.
Cash Flows
Nomura expects to contribute approximately ¥31,344 million ($379 million) to Japanese entities’ plans in
the year ending March 31, 2012 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

2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017-2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Millions of yen

Translation
intomillions of
U.S. dollars¥ 9,091
8,413
8,650
9,346
9,961
51,484

$110
102
105
113
120
622

Defined contribution pension plans—
In addition to defined benefit pension plans, the Company, NSC and other Japanese and non-Japanesesubsidiaries have defined contribution pension plans.
F-91

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Nomura contributed ¥1,415 million, ¥3,021 million and ¥3,233 million ($39 million) to the defined
contribution pension plans for Japanese entities’ plans for the years ended March 31, 2009, 2010 and 2011,
respectively.
The contributions to overseas defined contribution pension plans were ¥4,711 million, ¥5,712 million and¥6,903 million ($83 million) for the years ended March 31, 2009, 2010 and 2011, respectively.
Health care benefits—
The Company and certain subsidiaries provide certain health care benefits to both active and retired
employees through NSHIS. The Company and certain subsidiaries also sponsor certain health care benefits toretired employees (“Special Plan”) and these retirees 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 post-retirement plan because it is jointly administered by NSHIS and thenational government, and the funded status of it is not computed separately. Therefore, although the Company
and certain subsidiaries contribute some portion of the cost of retiree health care benefits not covered throughretiree contributions, the Company and certain subsidiaries do not reserve for the future cost. The health carebenefit costs, which are equivalent to the required contribution, amounted to ¥6,200 million, ¥5,820 million and¥6,760 million ($82 million) for the years ended March 31, 2009, 2010 and 2011, 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 Stock Acquisition
Right (“SAR”) Plan A, SAR Plan B and NSU Plan. The SAR Plan A generally consists of stock option plans.
The SAR Plan B consists of stock unit plans.
SAR Plan A—
The Company has issued SARs 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-averageamounts on the grant date fair value of options granted during the years ended March 31, 2009, 2010 and 2011were ¥281, ¥173 and ¥127 ($2) per share, respectively. The weighted-average assumptions used for the years are
as follows:Year ended March 31
2009
2010
2011

Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.73%
Expected dividends yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.28%
Expected lives (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.43%
F-92

40.06%
3.25%
6
1.01%

40.51%
1.73%
6
0.76%

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents activity relating to SAR Plan A for the years ending March 31, 2009, 2010 and2011:
Weighted-averageremaining life
(years)Outstanding(number of shares)

Weighted-average
exercise price

Outstanding as of March 31, 2008 . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,000,800
2,088,000(21,500)—(6,000)—¥1,891
1,460
1,336
—
2,045
—

4.1

Outstanding as of March 31, 2009 . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11,061,300
2,585,000——(43,500)(1,166,000)

1,645
767
—
—
1,457
1,600

3.7

Outstanding as of March 31, 2010 . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,436,800
2,870,000——(262,000)(1,227,000)

1,371
487
—
—
1,290
1,332

3.8

Outstanding as of March 31, 2011 . . . . . . . . . . . . . . . . . . . .

13,817,800¥1,176

3.9

The total intrinsic value of options exercised during the year ended March 31, 2009 was ¥5 million.
No options were exercised during the years ended March 31, 2010 and 2011. The aggregate intrinsic valueof options outstanding as of March 31, 2010 and 2011 were ¥nil.
The following table presents the distribution of the options as of March 31, 2011:

Exercise prices

Stock options outstanding
Stock options
Weighted-average
outstanding
Weighted-averageremaining life
(number of shares)
exercise price(years)Stock options exercisable
Stock options
exercisable
Weighted-average(number of shares)
exercise price¥1,940 . . . . . . . . . . . .
¥1,793 . . . . . . . . . . . .
¥1,333 . . . . . . . . . . . .
¥1,311 . . . . . . . . . . . .
¥1,152 . . . . . . . . . . . .
¥ 757 . . . . . . . . . . . . .
¥ 487 . . . . . . . . . . . . .

1,948,000
1,760,000
2,026,000
1,224,000
1,488,800
2,516,000
2,855,000¥1,940¥1,793¥1,333¥1,311¥1,152
¥ 757
¥ 487

3.3
2.3
4.4
0.2
1.3
5.4
6.6

1,948,000
1,760,000
2,026,000
1,224,000
1,488,800——¥1,940¥1,793¥1,333¥1,311¥1,152¥ —¥ —Total . . . . . . . . . . . . .

13,817,800¥1,1763.9

8,446,800¥1,534As of March 31, 2009, 2010 and 2011, the number of outstanding options exercisable were 6,972,300,
7,783,300 and 8,446,800, respectively.
F-93

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
SAR Plan B—
The Company has issued SARs 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 or three years after the grant date, and expire approximately seven or eight years after the grant date. The
exercise price is a nominal ¥1 per share.
The following table presents activity relating to SAR Plan B for the years ending March 31, 2009, 2010 and2011.
Outstanding(number of shares)

Weighted-average
grant date fair value
per share

Outstanding as of 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 as of March 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,547,100
12,524,300(6,122,900)—(2,333,400)
—

1,944
618
2,283
—
726
—

Outstanding as of March 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21,615,100
59,187,700(6,870,600)—(4,145,200)
—

1,211
638
1,651
—
634
—

Outstanding as of March 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

69,787,000¥ 716

As of March 31, 2011, there was ¥20,807 million ($251 million) of total unrecognized compensation cost
related to SAR Plan B. Such cost is expected to be recognized over a weighted-average period of 1.5 years. The
total fair value of shares vested during the years ended March 31, 2009, 2010 and 2011 was ¥5,778 million,¥5,593 million and ¥4,909 million ($59 million), respectively.
Total stock-based compensation expense included in income before income taxes for the years ended
March 31, 2009, 2010 and 2011 was ¥16,476 million, ¥9,737 million and ¥18,638 million ($225 million),
respectively. Total related tax benefits recognized in earnings for stock-based compensation expense for theyears ended March 31, 2009, 2010 and 2011 was ¥1,045 million, ¥291 million and ¥546 million ($7 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
compensation plans during the year ended March 31, 2011 was ¥7 million ($0.1 million) and the tax benefit
realized from exercise of the stock options was ¥535 million ($6 million).

F-94

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
NSU Plan—
The Company has awarded to the employees (directors, executive officers and certain employees) acompensation plan linked to the Company’s stock price. The employees covered by the NSU Plan must provide
service as the employees of Nomura for a specified service period in order to receive payments under this plan
and also are subject to forfeitures due to termination of employment under certain conditions. The period to thepayment date is primarily two to three years. Nomura will pay either in cash or an equivalent amount of assets
with the value linked to the Company’s average stock price for a certain period immediately preceding theapplicable future payment date.
In April 2010, the Company authorized to make the compensation payment under the NSU Plan to
Nomura’s directors and certain employees. For the year ended March 31, 2011, the total recognizedcompensation cost relating to the NSU Plan and the total fair value of NSU Plan exercised were ¥13,708 million($166 million) and ¥2,194 million ($27 million), respectively. As of March 31, 2011, there was ¥6,717 million($81 million) of total unrecognized compensation cost. Such cost is expected to be recognized over a period of
approximately one year.
Subsequent events
On May 19, 2011, the Company adopted a resolution to issue SARs No. 40, No. 41 and No. 42 of common
stock pursuant to the SAR Plan B for directors and certain employees of the Company and subsidiaries and has
issued SARs on June 7, 2011. The total number of SARs to be issued is 620,863 for the acquisition of 62,086,300
shares. The exercise price is a nominal ¥1 per share. The SARs No. 40, No. 41 and No. 42 vest and are
exercisable one, two and three years after the grant date, respectively, and expire seven years after the grant date.
In May 2011, the Company authorized to make compensation payments primarily based on the Company’s
stock price to Nomura’s directors and certain employees in the amount of approximately ¥58.7 billion($0.7 billion) in the future. (The compensation amounts are estimated based on the fair value of plans as of
May 2011. These awards generally vest for periods up to three years.) Nomura will pay either in cash or anequivalent amount of assets with a value linked primarily to the Company’s average stock price for a certain
period immediately preceding the applicable future payment date.
16. Income taxes:
The components of income tax expense reflected in the consolidated statements of operations are as follows:2009

Current:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sub Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sub Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-95

Millions of yen
Year ended March 31
2010
2011

¥ 7,635
5,142
12,777¥12,988
4,599
17,587

¥

175
5,956
6,131

(84,072) 28,207
56,194441(8,633)(995)(83,631) 19,574
55,199¥(70,854) ¥37,161 ¥61,330

Translation
intomillions of
U.S. dollars
2011

$

2
72
74

679
(12)
667
$741

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The income tax benefit recognized from net operating losses for the years ended March 31, 2009, 2010 and2011 totaled ¥69,205 million, ¥10,374 million and ¥4,645 million ($56 million), respectively.
The Company and its wholly-owned domestic subsidiaries have adopted the consolidation tax system
permitted under Japanese tax law. The consolidation tax system only imposes a national tax. Since April 1, 2004,
Nomura’s domestic effective statutory tax rate has been 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 (loss) is affected by a number of items, including
various tax credits, certain expenses not allowable for income tax purposes and different tax rates applicable toforeign subsidiaries.
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
2009
2010
2011

Normal effective statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impact of:
Change in deferred tax valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxable items to be added on financial profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-deductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-taxable revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends from foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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% 41.0% 41.0%(27.6)
6.7
1.6(0.1) 10.8
5.3(3.8) 10.5 16.6
2.9 (7.8) (8.4)
—
1.0
0.0
(0.7)
0.1 (0.0)(9.9) (26.9) 10.8
7.5
—
(1.3)
(0.2) (0.1) 0.2

Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.1% 35.3% 65.8%

The net deferred tax assets of ¥308,679 million and ¥241,911 million ($2,923 million) reported within Other
assets—Other in the consolidated balance sheets as of March 31, 2010 and 2011, respectively, represent tax
effects of the total of the temporary differences and tax loss carryforwards in components of those tax
jurisdictions with net deductible amounts in future years. The net deferred tax liabilities of ¥15,667 million and¥12,180 million ($147 million) reported within Other liabilities in the consolidated balance sheets as ofMarch 31, 2010 and 2011, respectively, represent the total of the temporary differences in components of thosetax jurisdictions with net taxable amounts in future years.

F-96

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Details of deferred tax assets and liabilities are as follows:

Millions of yen
March 312010
2011

Translation
intomillions of
U.S. dollars
2011

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 11,175
174,529
268,588
47,786
81,375351,101
5,160¥ 10,243
171,520
214,706
41,402
77,649317,519
5,215$

Gross deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less—Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

939,714(501,554)

838,254(461,966)

10,129(5,582)

Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

438,160

376,288

4,547

Deferred tax liabilities
Investments in subsidiaries and affiliates . . . . . . . . . . . . . . . . . . . . . . .
Valuation of financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Undistributed earnings of foreign subsidiaries . . . . . . . . . . . . . . . . . . .
Valuation of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

66,21846,865
5,258
19,196
7,611

69,36347,694
4,409
19,355
5,736

838
577
53
234
69

Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

145,148

146,557

1,771

Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 293,012¥ 229,731$ 2,776

124
2,072
2,595
500
938
3,837
63

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 Nomura believes that it is more likely than not that the related deferred tax assets will not berealized. The allowances against deferred tax assets are determined based on a review of future realizable value.
Changes in the valuation allowance for deferred tax assets are shown below:

2009

Millions of yen
Year ended March 31
2010
2011

Translation
intomillions of
U.S. dollars
2011

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥326,634 ¥493,906 ¥501,554$6,060167,272(1)7,648(2) (39,588)(3)(478)(3)Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥493,906¥501,554¥461,966$5,582(1) Includes ¥121,273 million related to foreign subsidiaries which is mainly due to an increase in
non-recoverability of losses in certain U.S. subsidiaries and in certain European subsidiaries,¥25,817 million related to subsidiaries in Japan and ¥20,182 million related to the Company, which is due tothe allowance for the non-recoverability of future realizable losses on local taxes.
F-97

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(2) Includes ¥8,313 million and ¥2,667 million related to subsidiaries which is mainly due to an increase in
non-recoverability of losses in certain foreign subsidiaries and in certain subsidiaries in Japan, negative¥3,332 million related the Company which is due to the decrease of allowance for the deferred tax assets
previously recorded. In total, ¥7,648 million of allowances increased for the year ended March 31, 2010.
(3) Includes negative ¥33,523 million ($405 million) related to foreign subsidiaries which is mainly due to aneffect of utilized loss carryforwards in certain U.S. subsidiaries, negative ¥2,657 million ($32 million) andnegative ¥3,408 million ($41 million) related to Japanese subsidiaries and the Company, respectively, whichis due mainly to a result of a review of future realizable value for the deferred tax assets previously
recorded. In total, ¥39,588 million ($478 million) of allowances decreased for the year ended March 31,
2011.
As of March 31, 2011, no deferred income taxes have been provided on undistributed earnings of foreignsubsidiaries not expected to be remitted in the foreseeable future totaling ¥2,440 million ($29 million). It is notpracticable to determine the amount of income taxes payable in the event all such foreign earnings are
repatriated.
As of March 31, 2011, Nomura has net operating loss carryforwards, for income tax purposes, of¥1,124,673 million ($13,590 million) resulting from certain U.S. and European subsidiaries. These losses, except
for ¥496,892 million ($6,004 million), which can be carried forward indefinitely, expire as follows: 2011 through2018—¥337,628 million ($4,080 million), 2019 and thereafter—¥290,153 million ($3,506 million). Nomura
believes that it is more likely than not that these loss carryforwards, less valuation allowance, will be realized.
The total amount of unrecognized tax benefits were ¥nil as of March 31, 2009 and 2010. Also there were no
movements of the gross amounts in unrealized tax benefits and the amount of interest and penalties recognized
due to the unrealized tax benefits during the year ended March 31, 2009 and 2010.
The total amount of unrecognized tax benefits as of March 31, 2011 was not significant. Also there were no
significant movements of the gross amounts in unrealized tax benefits and the amount of interest and penalties
recognized due to the unrealized tax benefits during the year ended March 31, 2011. Nomura recognises theaccrual of interest related to unrecognized tax benefits and penalties related to unrecognized tax benefits in
Income tax expense in the consolidated statements 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 (“U.K.”) and U.S. 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 are recorded in the amount that is sufficient to coverpotential exposure for an additional tax assessment depending on likelihood. It is reasonably possible that there
may be a significant increase in unrecognized tax benefits within 12 months of March 31, 2011. Quantification ofan 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 unrecognized tax benefits would have a material
effect on its financial condition.

F-98

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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 Nomura remains subject to examination. Under Hong Kong SAR tax law, the time bar does
not apply if the entity records a tax loss, thus not stated in below table.
Jurisdiction

Year

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2006(1)2009
2007(1) For transfer pricing, the earliest year in which Nomura remains subject to examinations is 2005.
17. Shareholders’ equity:
Changes in shares of common stock outstanding are shown below:

2009

SharesYear ended March 31,
2010

2011

Number of shares outstanding at beginning of year . . . . . . . . . .
New issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Conversion of convertible bonds . . . . . . . . . . . . . . . . . . . . . . . .

1,906,885,059
695,172,900—

2,604,779,843
800,000,000
258,040,481

3,669,044,614——

Common stock held in treasury:
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . .
Sales of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock issued to employees . . . . . . . . . . . . . . . . .
Other net change in treasury stock . . . . . . . . . . . . . . . . . . .

(74,263)
32,1622,801,200(37,215)(26,857)
6,328
6,122,900
121,919(75,030,934)
2,409
6,870,600
243

Number of shares outstanding at end of year . . . . . . . . . . . . . . .

2,604,779,843

3,669,044,614

3,600,886,932

The amount available for dividends and acquisition of treasury stock is subject to the restrictions under theCompanies Act 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. As of March 31, 2009, 2010 and2011, the amounts available for distributions were ¥537,260 million, ¥546,483 million and ¥480,471 million($5,806 million), respectively. These amounts are based on the amounts recorded in the Company’s
unconsolidated financial statements maintained in accordance with accounting principles and practices prevailingin Japan. U.S. GAAP adjustments incorporated in the accompanying consolidated financial statements but notrecorded in the Company’s unconsolidated financial statements have no effect on the determination of theamounts available for distributions under the Companies Act of Japan.
Retained earnings include Nomura’s share of investee undistributed earnings which have been accounted forbased on the equity method, and those Nomura’s share of investee undistributed earnings amounted to¥66,916 million, ¥72,405 million and ¥77,145 million ($932 million) as of March 31, 2009, 2010 and 2011,
respectively.
Dividends on common stock per share were ¥25.5 for the year ended March 31, 2009, ¥8 for the year ended
March 31, 2010 and ¥8 ($0.10) for the year ended March 31, 2011.
On July 30, 2010, the board of directors approved a repurchase program of Nomura Holdings common stockin accordance with Article 459-1 of the Companies Act of Japan as follows: (a) total number of shares authorized
F-99

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
for repurchase is up to 75,000,000 shares, (b) total value of shares authorized for repurchase is up to ¥50 billionand (c) the share buyback will run from August 9, 2010 to September 17, 2010. Under this repurchase program,the Company repurchased 75,000,000 shares of common stock at a cost of ¥37,362 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, as of March 31, 2009, 2010, and 2011, 1,185,072 shares, or ¥2,348
million, 1,063,153 shares, or ¥2,189 million, and 1,062,910 shares, or ¥2,189 million ($26 million), held byaffiliated companies, respectively.
Nomura issued 661,572,900 shares and 33,600,000 shares through a public offering and third-party
allotment, respectively in March, 2009. In addition, Nomura issued 766,000,000 shares and 34,000,000 sharesthrough a public offering and third-party allotment, respectively in October, 2009.
18. Regulatory requirements:
The Financial Services Agency (the “FSA”) requires financial conglomerates to maintain net capital not lessthan the required capital on a consolidated basis under the “Guideline for Financial Conglomerate Supervision”,
unless otherwise specified by other law a notice. The Company calculates its 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” (the “Bank Holding Companies Notice”), as permitted under the provision in the “Comprehensive
Guidelines for Supervision of Financial Instruments Business Operators, etc.” from the end of March, 2009. As
Nomura calculates its consolidated capital adequacy ratio according to the Bank Holding Companies Notice,
Nomura converts each risk by multiplying the amount by 12.5; therefore Nomura examines whether it abides by
this requirement by confirming that the capital/risk-weighted asset ratio is higher than 8%. As of March 31, 2010
and 2011, the Company was in compliance with the minimum capital requirement.
Under the Financial Instruments and Exchange Act (the “FIEA”) NSC is subject to the capital adequacy
rules of the FSA. This rule requires the maintenance of a capital adequacy ratio, which is defined as the ratio ofadjusted 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 andsubordinated 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 thecompanies provided that the resulting net capital adequacy ratio exceeds 120%. As of March 31, 2010 and 2011,
the capital adequacy ratio of NSC exceeded 120%.
Financial Instruments Firms in Japan are required to segregate cash deposited by clients on securities
transactions under the FIEA. As of March 31, 2010 and 2011, NSC segregated bonds with a market value of¥305,017 million and ¥394,863 million ($4,771 million) which were either included in Trading assets on theaccompanying 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 commission merchant with the Commodity Futures Trading
Commission (“CFTC”). NSI is also regulated by self-regulatory organizations, such as the Financial Industry
Regulatory Authority and the Chicago Mercantile Exchange Group as its designated self regulatory organization.
F-100

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
NSI is subject to the Securities and Exchange Commission’s Uniform Net Capital Rule (“Rule 15c3-1”) andother related rules, which require net capital, as defined under the alternative method, of not less than the greaterof $1,000,000 or 2% of aggregate debit items arising from client 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 client accounts and nonclient accounts or $1,000,000, whichever is greater.
The subsidiary is required to maintain net capital in accordance with the SEC, CFTC, or other various exchange
requirements, whichever is greater. As of March 31, 2010 and 2011, 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 U.K., which imposes minimum capital adequacy requirements to the NEHS
group. Nomura International plc (“NIP”), the most significant of NEHS’ subsidiaries, acts as a securities
brokerage and dealing business. NIP is regulated and has minimum capital adequacy requirements imposed on it
on a standalone basis by the Financial Services Authority in the U.K.. Nomura Bank International plc (“NBI”),
another subsidiary of NEHS, is also regulated by the Financial Services Authority in the U.K. on a standalone
basis. As of March 31, 2010 and 2011, the NEHS group, NIP and NBI were in compliance with all relevant
regulatory capital related requirements.
In Asia, Nomura International (Hong Kong) Limited (“NIHK”) and Nomura Singapore Ltd (“NSL”) areregulated by the respective authorities. NIHK is licensed by the Securities and Futures Commission in
Hong Kong to carry out regulated activities including the provision of securities brokerage and dealing,underwriting, investment advisory and securities margin financing services for its clients. NIHK has a branchlocated in Taiwan which is regulated by its local regulators under its respective jurisdictions. Activities of NIHK
including its branches are subject to the Securities and Futures (Financial Resources) Rules which requires it, at
all times, to maintain its liquid capital at a level not less than its required liquid capital. Liquid capital means anamount by which its liquid assets exceed its ranking liabilities. Required liquid capital is calculated in accordancewith the provisions laid down in the Securities and Futures (Financial Resources) Rules. NSL is a merchant bankwith Asian Currency Unit (“ACU”) license governed by the Monetary Authority of Singapore (“MAS”). NSL
carries out its ACU regulated activities including, among others, securities brokerage and dealing business. The
regulations require NSL to maintain a minimum capital of SGD3 million. Currently, NSL is observing relevant
financial ratios which fulfill the requirement from MAS. As of March 31, 2010 and 2011, NIHK and NSL werein 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.
(“JAFCO”), Nomura Research Institute, Ltd. (“NRI”), Nomura Land and Building Co., Ltd. (“NLB”), Fortress
Investment Group LLC (“Fortress”) and Chi-X Europe Limited (“Chi-X Europe”).
JAFCO Co., Ltd.—JAFCO, which is a listed company in Japan, manages various venture capital funds and provides private
equity-related investment services to portfolio companies.
Nomura recognized impairment losses of ¥13,618 million against its investment in JAFCO for the year
ended March 31, 2009. The share price of JAFCO declined significantly during 2009 as the Japanese stock
market slowed down and this decline was determined to be other-than-temporary in nature. The loss wasclassified within Non-interest expenses—Other in the consolidated statements of operations.
As of March 31, 2011, Nomura’s ownership of JAFCO was 24.1% and there was no remaining equity
method goodwill included in the carrying amount of the investment.
F-101

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Nomura Research Institute, Ltd.—NRI develops and manages computer systems and provides research services and management consulting
services. One of the major clients of NRI is Nomura.
For the year ended March 31, 2009, Nomura sold ¥38,419 million worth of software and computerequipment to NRI.
As of March 31, 2011, Nomura’s ownership of NRI was 38.5% and the remaining balance of equity method
goodwill included in the carrying value of the investment was ¥56,934 million ($688 million).
Nomura Land and Building Co., Ltd.—NLB owns certain of Nomura’s leased office space in Japan. The lease transactions with Nomura aredisclosed in Note 20 “Commitments, contingencies and guarantees”.
Nomura Real Estate Holdings, Inc. which is a subsidiary of NLB, is a listed company in the First Section of
the Tokyo Stock Exchange.
As of March 31, 2011, Nomura’s ownership of NLB was 38.5% and the remaining balance of equity method
goodwill included in the carrying amount of the investment was ¥1,485 million ($18 million).
NLB became a consolidated subsidiary of Nomura on May 24, 2011. See Note 10, “Business combinations”
for more information.
Fortress Investment Group LLC—
Fortress is a global investment management firm. Fortress raises, invests and manages private equity funds,
hedge funds and publicly traded alternative investment vehicles. The investment in Fortress is treated as aninvestment in a limited partnership and is accounted for by the equity method of accounting.
For the year ended March 31, 2009, Nomura recognized an impairment loss of ¥81,248 million against its
investment in Fortress. The share price of Fortress had declined significantly during 2008 as the U.S. stock
market slowed down and this decline was determined to be other-than-temporary in nature. The loss wasclassified within Non-interest expenses—Other in the consolidated statements of operations.
In May 2009, Fortress sold 46,000,000 Class A shares in a public offering and Nomura purchased 5,400,000of these shares, at the public offering price.
As of March 31, 2011, Nomura’s ownership of Fortress was 11.5% and there was no remaining equity
method goodwill included in the carrying value of the investment.
Chi-X Europe Limited—
Chi-X Europe was a consolidated subsidiary of Nomura until December 31, 2009. On December 31, 2009,
nonvoting shares issued by Chi-X Europe to third parties were converted into voting shares. As a result,
Nomura’s voting interest fell to 34% and Nomura ceased to have a controlling financial interest in Chi-X Europe,
which was subsequently deconsolidated and accounted for under the equity method from December 31, 2009.
F-102

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As part of the deconsolidation process, a gain of ¥3,074 million was recognized which is reported in the
consolidated statements of operations within Revenue – Other. The gain resulted from a difference between thebook value of the net assets of Chi-X Europe and the fair value of the retained investment in the company.
The fair value of the retained investment in Chi-X Europe was estimated using a combination of market andincome approaches. The market approach was based on the “Guideline Public Company Method” whereby
market multiples are derived from quoted market prices of publicly traded companies engaged in the same orsimilar line of business to Chi-X Europe. Under the income approach, a discounted cash flow method was used.
On February 18, 2011, BATS Global Markets, Inc. (“BATS”) entered into a definitive agreement to acquirea 100% of the outstanding stock of Chi-X Europe. The transaction is subject to regulatory approval, and uponclosing Nomura will exchange its shares in Chi-X Europe for approximately 7% (fully diluted) of the outstanding
stock of BATS.
Summary financial information—
A summary of financial information for JAFCO, NRI and NLB is as follows:

Millions of yen
March 312010
2011

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2,020,517
1,474,284

2009

Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to the companies . . . . . . . . . . . . . . . . . . .

¥530,181
498,104
2,598¥2,096,554
1,521,653

Millions of yen
Year ended March 31
2010
2011

¥526,350
482,573
22,779¥590,985
535,564
29,392

Translation
intomillions of
U.S. dollars
2011$25,333
18,386
Translation
intomillions of
U.S. dollars
2011$7,141
6,471
355

A summary of financial information for Fortress is as follows:

Millions of yen
March 312010(1)
2011(1)

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-103¥154,471 ¥172,677
98,711
95,396

Translation
intomillions of
U.S. dollars
2011$2,086$1,153

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

2009(1)

Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) attributable to the company . . . . . . . . . . . . . . .

Millions of yen
Year ended March 31
2010(1)
2011(1)¥ 38,702 ¥ 57,602 ¥ 89,710
150,079
144,868
154,161(32,458) (23,651) (24,400)

Translation
intomillions of
U.S. dollars
2011$1,084
1,863(295)(1) Financial information for Fortress is as of its fiscal years ended December 31, 2008, 2009 and 2010,
respectively. Nomura records its share of Fortress’s earnings on a three-month lag.
A summary of balances and transactions with affiliated companies and other equity-method investees,
except for lease transactions with NLB, which are disclosed in Note 20, “Commitments, contingencies andguarantees”, is presented below:

Millions of yen
March 312010
2011

Investments in affiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥247,641 ¥260,339
Advances to affiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,632
12,7662009

Millions of yen
Year ended March 31
2010
2011

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of software and tangible assets . . . . . . . . . . . . . . . . . . . . . . .

¥ 865
43,75044,602¥ 362
58,21925,954¥ 3,056
52,796
20,945

Translation
intomillions of
U.S. dollars
2011$3,146
154
Translation
intomillions of
U.S. dollars
2011

$ 37
638
253

In addition to the above, the sale of tangible fixed assets to affiliates companies for the year ended
March 31, 2009 was ¥38,420 million.
The aggregate carrying amount and fair 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 312010
2011

Carrying amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥176,351 ¥182,109
216,932
198,439

Translation
intomillions of
U.S. dollars
2011$2,2002,398

Equity in earnings of equity-method investees, including those above, was a loss of ¥5,534 million, gain of¥12,924 million and gain of ¥11,602 million ($140 million) for the years ended March 31, 2009, 2010 and 2011,
respectively. Equity in earnings of equity-method investees are included within Revenue—Other in the
F-104

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
consolidated statements of operations. Dividends from equity-method investees for the years ended March 31,
2009, 2010 and 2011 were ¥7,308 million, ¥4,827 million and ¥4,802 million ($58 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
into agreements with clients under which Nomura commits to underwrite notes that may be issued by the clients.
The outstanding commitments under these agreements are included below in commitments to extend credit.
Nomura has commitments to invest in various partnerships and other entities, primarily in connection withits merchant banking activities, and also has commitments to provide financing for investments related to thesepartnerships. The outstanding commitments under these agreements are included in commitments to invest in
partnerships.
Nomura began consolidating, in accordance with its adoption of ASC 810 as amended by ASU 2009-17,
certain VIEs which are engaged in the aircraft leasing business. Certain of these VIEs also have commitments topurchase aircraft. The outstanding commitments under these agreements are included in commitments topurchase aircraft.
These commitments outstanding were as follows:

Millions of yen
March 312010
2011

Commitments to extend credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥228,439 ¥264,736
Commitments to invest in partnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40,20338,008Commitments to purchase aircraft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—77,928Translation
intomillions of
U.S. dollars
2011$3,199459
942

As of March 31, 2011, these commitments had the following maturities:

Commitments to extend credit . . . . . . . . . . . . . . . . . . . .
Commitments to invest in partnerships . . . . . . . . . . . . . .
Commitments to purchase aircraft . . . . . . . . . . . . . . . . .

Totalcontractual
amountMillions of yen
Years to Maturity
Less than
1 to 33 to 5
1 yearyears
years

More than
5 years¥264,736
38,00877,928¥70,621274
24,905¥ 1,721
13,566—¥64,289
23,88645,066¥128,105282
7,957

Translation into millions of U.S. dollars
Years to Maturity
Total
contractual Less than
1 to 33 to 5More thanamount1 yearyears
years
5 years

Commitments to extend credit . . . . . . . . . . . . . . . . . . . .
Commitments to invest in partnerships . . . . . . . . . . . . . .
Commitments to purchase aircraft . . . . . . . . . . . . . . . . .

$ 3,199
459
942

F-105

$

853
3
301

$

777 $
289
545

1,548
3
96

$

21
164
—

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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 clients’ creditworthiness and the value of collateral held. Nomura
evaluates each client’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemednecessary by Nomura upon extension of credit, is based on credit evaluation of the counterparty.
Other commitments
Purchase obligations for goods or services that include payments for construction-related, advertising, andcomputer and telecommunications maintenance agreements amounted to ¥50,690 million as of March 31, 2010and ¥39,543 million ($478 million) as of March 31, 2011.
Nomura has commitments under resale and repurchase agreements including amounts in connection withcollateralized agreements, collateralized financing and Gensaki transactions. These commitments amounted to¥2,306 billion for resale agreements and ¥1,072 billion for repurchase agreements as of March 31, 2010 and¥1,337 billion ($16.16 billion) for resale agreements and ¥1,605 billion ($19.39 billion) for repurchaseagreements as of March 31, 2011. These amounts include certain types of repurchase transactions and securities
transactions which Nomura accounts for as sales rather than collateralized financings in accordance with
ASC 860.
In Japan, there is a market in which participants lend and borrow debt and equity securities without
collateral to and from financial institutions. Under these arrangements, Nomura had obligations to return debt
and equity securities borrowed without collateral of ¥188 billion and ¥300 billion ($3.62 billion) as of March 31,
2010 and 2011, 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, 2009, 2010 and 2011 were ¥46,467 million, ¥49,374 million and ¥48,957 million($592 million), respectively. A portion of such rentals is paid to NLB, an affiliated company. See Note 19“Affiliated companies and other equity-method investees” for more information on NLB.
Lease deposits and rent paid to NLB were as follows:

Millions of yen
March 31
2009
2010
2011

Lease deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rent paid during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-106¥9,175
5,432¥6,541
4,531¥4,2294,358Translation
intomillions of
U.S. dollars
2011

$51
53

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In August 2009 a Nomura consolidated subsidiary, Nomura Properties plc (“NPP”) entered into a 20 year
lease as tenant of a 525,000 square foot development at 1 Angel Lane in London in the U.K. Construction wascompleted in December 2010 and the building is now used as Nomura’s European headquarters. NPP wasinvolved in the construction of the building and therefore was deemed the owner of the construction project froman accounting perspective in accordance with ASC 840. The building has been recognized on Nomura’s
consolidated balance sheets from the start of the lease term in 2009. The building remains on Nomura’s
consolidated balance sheets after completion of construction due to the NPP’s continuing involvement with theproperty and is depreciated over its useful life similar to the treatment of a capital lease.
The following table presents a schedule of future minimum lease payments under capital leases as ofMarch 31, 2011:
Translation
intomillions ofMillions of yen U.S. dollars
March 312011
2011

Total minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Amount representing interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 49,977(26,680)

$ 604
(322)

Present value of net lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 23,297$ 282

Minimum lease payments . . . . . . . . . . . . . . . . .

More than
5 years¥153¥2,612¥46,692

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

Total

Less than
1 year¥49,977

¥386

Total

Minimum lease payments . . . . . . . . . . . . . . . . .

Millions of yen
Years of payment
1 to 2
2 to 33 to 44 to 5
Years
Years
Years
Years

$

604

$

5

$

2

¥86

$ 1

¥48

$ 1

$

31

$

564

Office buildings, land, equipment and facilities on the consolidated balance sheets includes capital leaseassets at the amount of ¥26,099 million and ¥24,855 million ($300 million) as of March 31, 2010 and 2011,
respectively.
The following table presents a schedule of future minimum rental payments under non-cancelable operatingleases with remaining terms exceeding one year as of March 31, 2011:
Translation
intomillions ofMillions of yen U.S. dollars
March 312011
2011

Total minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Sublease rental income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 88,215(11,412)$1,066(138)

Net lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 76,803

$ 928

F-107

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

Minimum lease payments . . . . . . . . . . . .

Total

Less than
1 year¥88,215¥15,034

Total

Minimum lease payments . . . . . . . . . . . .

$ 1,066

Millions of yen
Years of payment
1 to 2
2 to 33 to 4
Years
Years
Years

4 to 5Years

More than
5 years¥8,296¥30,189

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$$

182¥14,146$171¥11,268$

136¥9,282

$ 112

$ 100

365

Certain leases contain renewal options or escalation clauses providing for increased rental payments based
upon maintenance, utilities, and tax increases.
Contingencies—
Investigations, lawsuits and other legal proceedings
In the normal course of business as a global financial services entity, Nomura is involved in investigations,lawsuits and other legal proceedings and, as a result, may suffer economic loss from any fines, penalties ordamages awarded against Nomura, any settlements Nomura chooses to make to resolve a matter, and legal andother advisory costs incurred to support and formulate a defense.
In accordance with ASC 450 “Contingencies”, Nomura recognizes a liability for this risk of loss arising oneach individual matter when an estimated economic loss is probable and the amount of such loss can bereasonably estimated. The amount recognized as a liability is reviewed at least quarterly and is revised whenfurther information becomes available.
The ability to predict the outcome of these actions and proceedings is inherently difficult, particularly whereclaimants are seeking substantial or indeterminate damages, where investigations and legal proceedings are at an
early stage, where the matters present novel legal theories or involve a large number of parties, or which takeplace in foreign jurisdictions with complex or unclear laws. Nomura cannot therefore estimate with confidence
losses or ranges of losses for actions and proceedings where there is only a reasonably possible risk of loss.
Nomura believes that, based on current information available as of the date of these consolidated financial
statements, the ultimate resolution of these actions and proceedings will not be material to Nomura’s financial
condition. However, an adverse outcome in certain of these matters could have a material adverse effect on the
consolidated results of operations or cash flows in a particular quarter or annual period.
The most significant actions and proceedings against Nomura are summarized below. Where possible, theamount of the claim of the counterparty is disclosed which provides an indication of the maximum loss Nomura
may incur.
In January 2008, NIP was served with a tax notice issued by the tax authorities in Pescara, Italy alleging
breaches by NIP of the U.K.-Italy Double Taxation Treaty of 1998 (the “Tax Notice”). The alleged breaches
relate to payments to NIP of tax credits on dividends on Italian shares. The Tax Notice not only denies certain
payments to which NIP claims to be entitled but is also seeking reimbursement of EUR 33.8 million, includinginterest, already refunded. In March 2008, NIP lodged an appeal against the Tax Notice rejecting the Italian tax
authorities’ demands for reimbursement and in November 2009, a decision was issued by the Pescara Tax Courtin favor of the Italian Tax Authorities. NIP is vigorously challenging this decision.
F-108

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In April 2010, Lehman Brothers Holdings Inc. and Lehman Brothers Special Financing Inc. (collectively,“Lehman Inc.”) commenced proceedings in the U.S. Bankruptcy Court in New York objecting to the proofs ofclaims filed by the Company’s subsidiaries, NSC, NIP and Nomura Global Financial Products Inc. in respect ofswaps and other derivative transactions in the total amount of approximately $1 billion; and in the case of NSC
and NIP, Lehman Inc. is seeking to recover damages.
Fairfield Sentry Ltd. and Fairfield Sigma Ltd. (collectively, the “Fairfield Funds”), which are now inliquidation and were feeder funds to Bernard L. Madoff Investment Securities LLC (under the liquidation with its
trustee’s on-going recovery procedure pursuant to the Securities Investor Protection Act in the U.S. since
December 2008), have filed lawsuits in the Supreme Court of the State of New York and U.S. Bankruptcy Court
against a number of investors, including NIP, seeking to recover redemption payments that the Fairfield Funds
allege, inter alia, were mistakenly made. In a complaint dated October 5, 2010, the amount claimed against NIP
was approximately $34 million plus interest. The claim against NIP is proceeding in the U.S. Bankruptcy Court.
On November 11, 2010, the High Court in London ruled in favor of NIP and Nomura Bank International Plc(“NBI”) dismissing claims made by WestLB AG (“WestLB”) against them. WestLB first served the proceedings
on NIP and NBI in April 2009, claiming that under the terms of a note issued by NBI and which matured in
October 2008, WestLB was entitled to receive approximately $22 million, which it claimed to be the value of afund of shares referable to the NBI note. WestLB sought permission to appeal and this was granted by the Courtof Appeal on March 7, 2011.
On March 1, 2011, PT Bank Mutiara Tbk. (“Bank Mutiara”) commenced proceedings in the Commercial
Court of the Canton of Zurich against a special purpose company (“SPC”) established at the request of NIP.
These are proceedings to challenge the SPC’s rights over approximately $156 million in an account held in
Switzerland. The SPC has a security interest over the money pursuant to a loan facility with a third party. The
SPC does not believe that Bank Mutiara has any enforceable security interest over the funds and is seeking
release of the monies.
Subsequent eventsIn April 2011, the Federal Home Loan Bank of Boston (“FHLB-Boston”) commenced proceedings in the
Superior Court of Massachusetts against numerous sponsors, issuers and underwriters of residential mortgagebacked securities (“MBS”), and their controlling persons, including certain of the Company’s U.S. subsidiaries.
The action alleges that FHLB-Boston purchased residential MBS issued by a Company’s subsidiary for which
the offering materials contained untrue statements or omitted material facts concerning the underwriting
standards used by the original lenders and the characteristics of the loans underlying the securities. FHLB-Boston
seeks rescission of its purchases or compensatory damages pursuant to state law. FHLB-Boston alleges that itpurchased certificates in four offerings issued by a Company’s subsidiary but does not specify the amount of its
purchases or the amount of any alleged losses. Due to the lack of information at this stage of the litigation and theuncertainties involved, Nomura cannot provide any meaningful estimate of its exposure to loss related to thismatter at this time.
Nomura supports the position of the Company’s subsidiaries in each of these claims.
Certain Mortgage-Related Contingencies in the U.S.
Certain of the Company’s subsidiaries in the U.S. securitized mortgage loans in the form of MBS. Thesesubsidiaries did not generally originate mortgage loans, but purchased mortgage loans from third-party loan
originators (the “originators”). In connection with such purchases, these subsidiaries received loan level
representations from the originators. Certain of the MBS issued by the subsidiaries were structured with credit
F-109

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
protection provided to specified classes of certificates by monoline insurers. In connection with thesecuritizations, the relevant subsidiaries provided loan level representations and warranties of the type generally
described below, which mirror the representations the subsidiaries received from the originators.
The loan level representations made in connection with the securitization of mortgage loans were generally
detailed representations applicable to each loan and addressed characteristics of the borrowers and properties.
The representations included, but were not limited to, information concerning the borrower’s credit status, theloan-to-value ratio, the owner occupancy status of the property, the lien position, the fact that the loan was
originated in accordance with the originator’s guidelines, and the fact that the loan was originated in compliancewith applicable laws.
The relevant subsidiaries have received claims demanding the repurchase of certain loans from trustees ofvarious securitization trusts, which the subsidiaries believe were made at the insistence of one or more investors
and from certificate insurers. Each claim received has been reviewed, and the subsidiaries have contested thoseclaims believed to be without merit or have agreed to repurchase certain loans (or to otherwise compensate theissuing trust) for those claims that the subsidiaries have determined to have merit.
In light of economic conditions and continuing defaults in residential mortgages, it is anticipated that therelevant subsidiaries may receive additional repurchase claims. Nomura’s exposure with respect to such claims
will be influenced by the following factors, among others: the number of loans in which there are provablebreaches of representations or warranties and fluctuations in unemployment and values in the residential realestate markets which affect the frequency of defaults and the loss severity for defaulting loans. This exposure
may be mitigated to the extent that the subsidiaries are able to pursue and collect from the originators for thoseloans in which there are provable breaches. As of May 31, 2011, the subsidiaries have received loan repurchaseclaims of $796 million that are unresolved. In light of the uncertainties involved, Nomura cannot provide any
meaningful estimate of its exposure to the existing unresolved demands or any additional breach of
representation claims at this time.
Guarantees—
ASC 460 “Guarantees” specifies the disclosures to be made in regards to obligations under certain issued
guarantees and requires a liability to be recognized for the fair value of a guarantee obligation at inception.
In the normal course of business, Nomura enters into various guarantee arrangements with counterparties in
the form of standby letters of credit and other guarantees, which generally have a fixed expiration date.
In addition, Nomura enters into certain derivative contracts that meet the accounting definition of aguarantee, namely derivative contracts that contingently require a guarantor to make payment to a guaranteed
party based on changes in an underlying that relate to an asset, liability or equity security held by a guaranteed
party. Since Nomura does not track whether its clients enter into these derivative contracts for speculative or
hedging purposes, Nomura has disclosed below information about derivative contracts that could meet theaccounting definition of guarantees.
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 theoretically unlimited.
Nomura records all derivative contracts at fair value on its consolidated balance sheets. Nomura believes thenotional amounts generally overstate its risk exposure. Since the derivative contracts are accounted for at fairvalue, carrying value is considered the best indication of payment and performance risk for individual contracts.
F-110

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents information on Nomura’s derivative contracts that could meet the accounting
definition of a guarantee and certain other guarantees:
Translation
intomillions of
U.S. dollars

Millions of yen
March 312010

Derivative contracts(1) . . . . . .
Standby letters of credit andother guarantees(2) . . . . . . . .

2011
Maximum
Potential
Payout /Notional
Total

Carryingvalue

Maximum
Potential
Payout /Notional
Total¥3,539,472¥101,555,634$42,768$1,227,110

267

8,512

3

103

Carryingvalue

Maximum
Potential
Payout /Notional
Total

Carrying
value¥2,604,545¥72,650,089

340

10,146(1) Credit derivatives are disclosed in Note 4, “Derivative instruments and hedging activities” and are excluded
from “Derivative Contracts”.
(2) Collateral held in connection with standby letters of credit and other guarantees as of March 31, 2010 is¥8,089 million and as of March 31, 2011 is ¥6,761 million ($82 million).
The following table presents maturity information on Nomura’s derivative contracts that could meet theaccounting definition of a guarantee and certain other guarantees as of March 31, 2011:

Derivative contracts . . .
Standby letters ofcredit and otherguarantees . . . . . . . .

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

Carrying
value

Total

¥3,539,472¥101,555,634¥37,985,935¥18,909,144¥10,705,026¥33,955,529

267

8,512

205

9

190

8,108

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

Carrying
value

Derivative contracts . . . . . . . . . . . . . . . . .
Standby letters of credit and otherguarantees . . . . . . . . . . . . . . . . . . . . . . .

More than
5 years$42,768$1,227,110$458,989$228,482$129,350$410,289

3

103

2

1

2

98

21. Segment and geographic information:
Operating segments—
In April 2010, Nomura established a Wholesale Division, encompassing the operations previously
conducted by the Global Markets, the Investment Banking and the Merchant Banking divisions. Also Nomura
realigned its reportable segments to reflect how it operates and manages its business. Accordingly, Nomura’s
F-111

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
operating management and management reporting are prepared based on the Retail, the Asset Management, and
the Wholesale segments. Nomura structures its business segments based upon the nature of its main products andservices, its client base and its management structure.
The accounting policies for segment information materially follow U.S. GAAP, except for the impact of
unrealized gains/losses on long-term investments in equity securities held for operating purposes, which under
U.S. GAAP are included in income (loss) before income taxes, is excluded from segment information.
Revenues and expenses directly associated with each business segment are included in the operating resultsof each respective segment. Revenues and expenses that are not directly attributable to a particular segment areallocated to each respective business segment or included in “Other”, based upon Nomura’s allocation
methodologies as used by management to assess each segment’s performance.
Business segments’ results are shown in the following tables. Net interest revenue is disclosed because
management 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, in accordance with the realignment in April 2010.
Millions of yen
RetailAsset
Management

Wholesale

Other(Incl. elimination)

Total

Year ended March 31, 2009
Non-interest revenue . . . . . . . . . . . . . . . . . . . . . . . .
Net interest revenue . . . . . . . . . . . . . . . . . . . . . . . . .

¥287,750
4,107¥56,4633,326¥(146,522)(17,108)¥ 158,601(10,853)¥ 356,292(20,528)

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

291,857
273,620

59,78952,409(163,630)
553,695

147,748
213,168

335,764
1,092,892

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

¥ 18,237¥ 7,380¥(717,325)¥ (65,420)¥ (757,128)

Year ended March 31, 2010
Non-interest revenue . . . . . . . . . . . . . . . . . . . . . . . .
Net interest revenue . . . . . . . . . . . . . . . . . . . . . . . . .

¥384,816
3,456¥68,280
2,085¥ 763,567
25,964¥(104,629)(2,124)¥1,112,034
29,381

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

388,272
274,91570,365
51,771

789,531614,349(106,753)
104,540

1,141,415
1,045,575

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

¥113,357¥18,594¥ 175,182¥(211,293)¥

Year ended March 31, 2011
Non-interest revenue . . . . . . . . . . . . . . . . . . . . . . . .
Net interest revenue . . . . . . . . . . . . . . . . . . . . . . . . .

¥389,404
3,029¥76,269
4,475¥ 534,094
96,442¥ 56,518(12,637)¥1,056,285
91,309Net revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest expenses . . . . . . . . . . . . . . . . . . . . . . .

392,433
291,245

80,74455,691

630,536
623,819

43,881
66,6881,147,594
1,037,443

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

¥101,188¥25,053

6,717¥ (22,807)¥ 110,151¥

95,840Translation into millions of U.S. dollars

Year ended March 31, 2011
Non-interest revenue . . . . . . . . . . . . . . . . . . . . . . . .
Net interest revenue . . . . . . . . . . . . . . . . . . . . . . . . .

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

4,705
37

$

4,742
3,519
$

1,223

F-112

922
54

$

976
673
$

303

6,454
1,165

$

7,619
7,538
$

81

682
(153)

$

529
805
$

(276)

12,763
1,103
13,866
12,535$

1,331

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Transactions between operating segments are recorded within segment results on commercial terms andconditions and are eliminated in the “Other” column.
The following table presents the major components of income (loss) before income taxes in “Other.”

Millions of yen
Year ended March 31
2010
2011

2009

Translation
intomillions of
U.S. dollars
2011

Net gain related to economic hedging transactions . . . . . . . . . . . . ¥ 28,032 ¥ 3,323 ¥ 2,290
Realized gain (loss) on investments in equity securities held for
operating purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2,363)(3,365)219
Equity in earnings (loss) of affiliates . . . . . . . . . . . . . . . . . . . . . .
(718)
7,765
8,996
Corporate items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(70,533)(83,291) (33,327)
Other(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(19,838) (135,725)
(985)

$ 28

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

$(276)¥(65,420) ¥(211,293) ¥(22,807)

2
109
(403)
(12)

(1) Includes the impairment losses of affiliated companies and other equity-method investees which do notbelong to the business segments of ¥ 97,880 million for the year ended March 2009, and ¥2,974 million forthe year ended March 2010, and the impact of Nomura’s own creditworthiness in certain financial liabilities
for which the fair value option has been elected in accordance with ASC 825, and the impact of its own
creditworthiness on derivative liabilities.
The table below presents a 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.

2009

Millions of yen
Year ended March 31
2010
2011

Translation
intomillions of
U.S. dollars
2011

Net revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrealized gain(loss) on investments in equity securities
held for operating purposes . . . . . . . . . . . . . . . . . . . . . . .

¥ 335,764¥1,141,415¥1,147,594$13,866(23,137)

9,407(16,896)(204)

Consolidated net revenue . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 312,627¥1,150,822¥1,130,698$13,662

Non-interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,092,892
Unrealized gain (loss) on investments in equity securities
held for operating purposes . . . . . . . . . . . . . . . . . . . . . . .
—¥1,045,575¥1,037,443$12,535———

Consolidated non-interest expenses . . . . . . . . . . . . . . . . . . .

¥1,045,575¥1,037,443$12,535

95,840¥ 110,151$ 1,331

9,407(16,896)(204)

93,255$ 1,127¥1,092,892

Income (loss) before income taxes . . . . . . . . . . . . . . . . . . . . ¥ (757,128) ¥Unrealized gain (loss) on investments in equity securities
held for operating purposes . . . . . . . . . . . . . . . . . . . . . . .
(23,137)
Consolidated income (loss) before income taxes . . . . . . . . .
F-113¥ (780,265) ¥ 105,247¥

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

Geographic information—
Nomura’s identifiable assets, revenues and expenses are generally 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 global nature of Nomura’s activities and services, it is not always possible to
make a precise separation by location. As a result, various assumptions, which are consistent among years, 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 U.S. and the U.K., respectively. Net
revenue and long-lived assets have been allocated on a revenues and expenses from external clients basis. Income(loss) before income taxes have been allocated on an including intersegment revenues and expenses basis.

2009

Millions of yen
Year ended March 31
2010
2011

Translation
intomillions of
U.S. dollars
2011

Net revenue(1):Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia and Oceania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 17,748 ¥ 131,512 ¥ 168,889(170,718)
348,829
257,135
18,781
63,74844,474Sub-total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(134,189)
446,816

Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 312,627

Income (loss) before income taxes:
Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia and Oceania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(165,647) ¥(412,222)(81,243)3,557 ¥
4,410 $
53
18,995(43,627)(527)
13,036(16,296)(197)

Sub-total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(659,112)(121,153)

35,58869,659Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(780,265) ¥ 105,247 ¥

544,089
606,733$ 2,041
3,107
537

470,498
660,200

5,685
7,977

¥1,150,822 ¥1,130,698$13,662(55,513)
148,768

(671)
1,798

93,255$ 1,127

March 312009

Long-lived assets:
Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia and Oceania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 100,241
62,69030,804Sub-total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

193,735
312,893

Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 506,628

2010¥

94,508 ¥ 91,295
98,223
115,352
32,871
31,642
225,602269,4492011$ 1,103
1,394
382

238,289
270,945

2,879
3,274

¥ 495,051 ¥ 509,234$ 6,153(1) There is no revenue derived from transactions with a single major external client.
F-114

2011

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
22. Supplementary subsidiary guarantee information required under SEC rules:
The Company provides several guarantees of borrowings of its subsidiaries. The Company has fully andunconditionally guaranteed the securities issued or to be issued by Nomura America Finance LLC, which is anindirect, wholly owned finance subsidiary of the Company.

F-115

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, 2011

/s/ KENICHI WATANABE
Name: Kenichi Watanabe
Title: Group 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) (incorporated by reference to theRegistration Statement on Form S-8 (File No. 333-165925) filed on April 7, 2010)

1.3

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

1.4

Regulations of the Nomination Committee (English translation) (incorporated by reference to theAnnual Report on Form 20-F (File No. 001-15270) filed on June 30, 2009)

1.5

Regulations of the Audit Committee (English translation) (incorporated by reference to the Annual
Report on Form 20-F (File No. 001-15270) filed on June 30, 2009)

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 Mellon 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. 333-166346) filed on April 28, 2010)

4.1

Limitation of Liability Agreement (English translation)*1

4.2

Limitation of Liability Agreement*2

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*1*2

Nomura and each of Haruo Tsuji, Masahiro Sakane, Tsuguoki Fujinuma, Takao Kusakari and
Toshinori Kanemoto entered into a Limitation of Liability Agreement, substantially in the form of thisexhibit.
Nomura and each of Lord Colin Marshall, Dame Clara Furse and Michael Lim Choo San entered into a
Limitation of Liability Agreement substantially in the form of this exhibit.

Nomura have not included as exhibits certain instruments with respect to our long-term debt. The amount ofdebt authorized under each such debt instrument does not exceed 10% or our total assets. We will furnish a copyof 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.
(4) Other than as prescribed in the Items above, any other business ancillary or related to survey andresearch in connection with the economy, financial or capital markets, or infrastructure or undertaking
the outsourcing thereof.
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 of Lessthan-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.
2

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;3

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 the4Company’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. (Conditions 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.
3. With respect to Class 1 preferred stock, Class 2 preferred stock, Class 3 preferred stock or Class 4
preferred stock, upon the occurrence of certain events 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(including the event that the Company’s capital adequacy ratio or other measure of regulatory capital falls below
a pre-determined threshold, and/or the event that a supervisory agency (or an equivalent body) determines that awrite-down, capital injection by a public institution or other equivalent action is necessary for the Company)prior to the issuance of the relevant class of preferred stock, the Company shall redeem in whole or in part any
such preferred shares issued with such conditions. In such event, the Company shall deliver common shares of
the Company to each relevant Preferred Shareholder in exchange for such preferred shares, in a number
determined prior to the issuance of the such preferred shares by a resolution of the board of directors or adetermination by executive officer(s) under authorities delegated by a resolution of the board of directors,
considering the subscription price of the preferred shares, the market value of the Company’s common stock andmarket conditions. An upper limit for the common stock to be delivered in exchange for the relevant preferredshares may also be set pursuant to such resolution or determination. In the event that the number of commonshares to be delivered in exchange for the Company’s redemption of such preferred shares includes a fraction ofless than one (1) share, that fraction shall be handled pursuant to Article 234 of the Companies Act.
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.
5

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)
A director or executive officer designated in advance by the board of directors shall act as chairman of ameeting of shareholders; provided, however, that when the relevant director or executive officer is unable so toact, another person shall take his/her place in accordance with the order of priority predetermined by a resolutionof 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 22 through 25 herein shall apply mutatis mutandis
to the meetings of class shareholders.
6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.
7

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.
82. The Company may, by a resolution of the board of directors, appoint one (1) President, one (1) Chairman
and one (1) or more Vice Chairmen, Deputy Presidents, or alternatively titled officers from among its executive
officers.
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).

9

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

January 6, 2010

May 26, 1949

December 17, 1976

June 28, 2011

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

10

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 (the“Regulations”) shall provide 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)
Meetings of the Board of Directors 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. A Director designated by the Board of Directors shall convene a meeting of the Board of Directors unlessotherwise provided for by laws or ordinances. However, when such Director is unable so to act, one of the other
Directors shall take his place in accordance with the order of priority predetermined by a resolution of the Boardof 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 who is a member of 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)
A Director designated by the Board of Directors shall act as chairman of meetings of the Board of Directors.
However, when such Director is unable so to act, one of the other Directors shall take his place in accordancewith 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 Group CEO, Group COO, Co-Group COO and theChief 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;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.
2(3) Matters concerning Nomura Group:a.

Planning of the fundamental management policy of Nomura Group;b.

Appointment of Division CEOsc.

Appointment of Business Division CEOs, Business Line Heads, Business Infrastructure Division
Heads, Regional CEOs, and Internal Audit Head, however, if a person other than Executive
Officer is appointed; the foregoing shall not be applied.

(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.
3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 a 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
June 28, 2011

April 1, 2003
April 1, 2004
October 1, 2005
June 28, 2006
April 1, 2008
June 25,20094

June 26, 2003
April 28, 2004
April 1, 2006
April 1, 2007
October 1, 2008
April 1, 2010

Exhibit 4.1(Translation)
LIMITATION OF LIABILITY AGREEMENTNOMURA HOLDINGS, INC. (hereinafter, the “Company”) and(hereinafter, the “Outside Director”)
hereby agree to enter into this agreement as provided for under Article 33 Paragraph 2 of the Articles ofIncorporation of the Company (hereinafter, the “Agreement”) in accordance with that Article.
Article 1
On or after the execution of this Agreement, in the event that the Outside Director, in good faith and withoutgross negligence in performing his or her duties, incurs liability to compensate the Company under Article 423
Paragraph 1 of the Companies Act (hereinafter, the “Relevant Liability”), the Company shall limit the Outside
Director’s Relevant Liability to the higher of 20 million yen or the sum of the following items:(1) the total amount of remuneration, bonus or other consideration received, or economic benefit accrued by,
the Outside Director while in office as an outside director of the Company (hereinafter, “Shagaitorishimariyaku”) for the performance of his or her duties as a Shagai-torishimariyaku, in the fiscal year inwhich the facts causing the Relevant Liability arose; or in any prior fiscal year, whichever is the highest
amount, multiplied by two (2); and(2) the total amount of retirement bonus or other economic benefit of a similar nature received by the Outside
Director from the Company divided by: the number of years served by the Outside Director as a Shagaitorishimariyaku (hereinafter, “Years of Service”), or two (2) where the Years of Service is less than two(2) years.
(3) the amount determined according to the following categories as set forth in items (a) and (b) below:(a) In the event that, following his or her appointment to office, the Outside Director exercises Company
stock acquisition rights (excluding those which may have been received by the Outside Director fromthe Company as compensation for the execution of duty) if any (hereinafter, the “Relevant Stock
Acquisition Rights”): the amount calculated by the multiplying the current price of the Relevant Stock
Acquisition Rights per relevant share at the time of exercise thereof, less the total of the amount asprovided for in Article 236 Paragraph 1, Item 2 of the Companies Act and the paid-in price as provided
for in Article 238, Paragraph 1, Item 3 of the Companies Act, per share, which shall be issued upon
exercise of the Relevant Stock Acquisition Rights (if the amount so calculated is zero or less, thenzero), multiplied by the number of shares of the Company delivered to the Outside Director on exercise
thereof; or(b) In the event that, following his or her appointment to office, the Outside Director transfers Relevant
Stock Acquisition Rights: the amount calculated by multiplying the transfer price of Relevant Stock
Acquisition Rights less the paid-in price as provided for in Article 238, Paragraph 1, Item 3 of theCompanies Act, by the number of the Relevant Stock Acquisition Rights.
Article 2
The Company may request the Outside Director to provide any information necessary for determining whether or
not a Relevant Liability exists and the amount up to which any such Relevant Liability may be limited.
Article 3
1. In the event that a limitation of the Outside Director’s Relevant Liability is applied pursuant to Article 1 ofthis Agreement, the Outside Director shall not receive any amount of retirement bonus or other economic benefitof a similar nature from the Company, or exercise or transfer Company stock acquisition rights without approval
at a meeting of the shareholders of the Company.

2. In the event that an Outside Director possesses a certificate of stock acquisition rights representing Company
stock acquisition rights where a limitation of the Outside Director’s Relevant Liability has been applied pursuant
to Article 1 of this Agreement, the Outside Director shall be required to deposit such certificate of stockacquisition rights with the Company without delay and shall not be permitted to demand the return of the suchcertificate without approval at a meeting of the shareholders for such transfer.
Article 4
In the event that the Outside Director becomes an executive director, executive officer or manager or any other
employee of the Company or any subsidiary of the Company, this Agreement shall be of no effect from suchtime onwards.
Article 5
Any matters not covered under this Agreement shall be resolved through mutual consultation between the
Company and the Outside Director.
IN WITNESS WHEREOF, this Agreement shall be executed as of the date below by the parties hereto in
duplicate, with each party retaining a counterpart hereof.
[Date]NOMURA HOLDINGS, INC.

OUTSIDE DIRECTOR

2

Exhibit 4.2
LIMITATION OF LIABILITY AGREEMENTNOMURA HOLDINGS, INC. (hereinafter, the “Company”) and(hereinafter, the “Outside Director”)
hereby agree to enter into this agreement as provided for under Article 33 Paragraph 2 of the Articles ofIncorporation of the Company (hereinafter, the “Agreement”) in accordance with that Article.
Article 1
On or after the execution of this Agreement, in the event that the Outside Director, in good faith and withoutgross negligence in performing his or her duties, incurs liability to compensate the Company under Article 423
Paragraph 1 of the Companies Act (hereinafter, the “Relevant Liability”), the Company shall limit the Outside
Director’s Relevant Liability to the higher of 20 million yen or the sum of the following items:(1) the total amount of remuneration, bonus or other consideration received, or economic benefit accrued by,
the Outside Director while in office as an outside director of the Company (hereinafter, “Shagaitorishimariyaku”) for the performance of his or her duties as a Shagai-torishimariyaku, in the fiscal year inwhich the facts causing the Relevant Liability arose; or in any prior fiscal year, whichever is the highest
amount, multiplied by two (2); and(2) the total amount of retirement bonus or other economic benefit of a similar nature received by the Outside
Director from the Company divided by: the number of years served by the Outside Director as a Shagaitorishimariyaku (hereinafter, “Years of Service”), or two (2) where the Years of Service is less than two(2) years.
(3) the amount determined according to the following categories as set forth in items (a) and (b) below:(a) In the event that, following his or her appointment to office, the Outside Director exercises Company
stock acquisition rights (excluding those which may have been received by the Outside Director fromthe Company as compensation for the execution of duty) if any (hereinafter, the “Relevant Stock
Acquisition Rights”): the amount calculated by the multiplying the current price of the Relevant Stock
Acquisition Rights per relevant share at the time of exercise thereof, less the total of the amount asprovided for in Article 236 Paragraph 1, Item 2 of the Companies Act and the paid-in price as provided
for in Article 238, Paragraph 1, Item 3 of the Companies Act, per share, which shall be issued upon
exercise of the Relevant Stock Acquisition Rights (if the amount so calculated is zero or less, thenzero), multiplied by the number of shares of the Company delivered to the Outside Director on exercise
thereof; or(b) In the event that, following his or her appointment to office, the Outside Director transfers Relevant
Stock Acquisition Rights: the amount calculated by multiplying the transfer price of Relevant Stock
Acquisition Rights less the paid-in price as provided for in Article 238, Paragraph 1, Item 3 of theCompanies Act, by the number of the Relevant Stock Acquisition Rights.
Article 2
The Company may request the Outside Director to provide any information necessary for determining whether or
not a Relevant Liability exists and the amount up to which any such Relevant Liability may be limited.
Article 3
1. In the event that a limitation of the Outside Director’s Relevant Liability is applied pursuant to Article 1 ofthis Agreement, the Outside Director shall not receive any amount of retirement bonus or other economic benefitof a similar nature from the Company, or exercise or transfer Company stock acquisition rights without approval
at a meeting of the shareholders of the Company.

2. In the event that an Outside Director possesses a certificate of stock acquisition rights representing Company
stock acquisition rights where a limitation of the Outside Director’s Relevant Liability has been applied pursuant
to Article 1 of this Agreement, the Outside Director shall be required to deposit such certificate of stockacquisition rights with the Company without delay and shall not be permitted to demand the return of the suchcertificate without approval at a meeting of the shareholders for such transfer.
Article 4
In the event that the Outside Director becomes an executive director, executive officer or manager or any other
employee of the Company or any subsidiary of the Company, this Agreement shall be of no effect from suchtime onwards.
Article 5
Any matters not covered under this Agreement shall be resolved through mutual consultation between the
Company and the Outside Director.
IN WITNESS WHEREOF, this Agreement shall be executed as of the date below by the parties hereto in
duplicate, with each party retaining a counterpart hereof.
[Date]NOMURA HOLDINGS, INC.

OUTSIDE DIRECTOR

2

Exhibit 11.1
(Translation)
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, etc.
(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.
2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, the Chief Risk Officer and a chairman of the Disclosure Committee of
the Company and all Division CEOs, all Business Division CEOs, all Business Line Heads, all Business
Infrastructure Division Heads and Regional CEOs 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: April 1, 20113

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, 2011
/s/ KENICHI WATANABE
Kenichi WatanabeGroup Chief Executive Officer

Exhibit 12.2
Certification
I, Junko Nakagawa, 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, 2011/s/ JUNKO NAKAGAWA
Junko Nakagawa
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, 2011 (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, 2011
/s/ KENICHI WATANABE
Kenichi WatanabeGroup 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, 2011 (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, 2011/s/ JUNKO NAKAGAWA
Junko Nakagawa
Chief Financial Officer

Exhibit 15.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statements (Form F-3 No. 333-165049 andNo.333-169682 and Form S-8 No. 333-134590, No. 333-135430, No. 333-141988, No. 333-144112,
No. 333-150267, No. 333-158344 No. 333-165925 and No. 333-173244) and related Prospectus of Nomura
Holdings, Inc. of our reports dated June 30, 2011, 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 this Annual Report (Form 20-F) for the year ended March 31, 2011.
/s/ Ernst & Young ShinNihon LLC
Tokyo, Japan
June 30, 2011