Daiwa Securities Group Annual Report 2012 Approximate amounts of impact on the consolidated statements  of income for fiscal 2011 by supposing that the business combi- nation had been completed on the beginning date of fiscal 2011 Some subsidiaries own office buildings (including land) for rent in  Tokyo and other areas. The book value, net changes in the book value and the fair value of  the investment and rental properties are as follows. (Note 1) The book value represents the acquisition cost less accumulated depreciation. (Note 2) For the year ended March 31, 2012, the major reason of increase is the  acquisition of the subsidiary holding rental properties.  (Note 3) The fair value as of March 31, 2012 represents the sum of values estimated  by external real estate appraisers. In Japan, a securities company is subject to risk-based capital ade- quacy rules established and administered by the Financial Services  Agency. Securities subsidiaries report their capital adequacy ratio as  defined pursuant to these rules. The authorities will take certain  administrative measures if such ratio declines below 140%. The  capital adequacy ratios of Daiwa Securities were 404.0% (unaudited)  and 405.3% (unaudited) for March 31, 2012 and 2011, respectively,  and those of Daiwa Securities CM were 408.5% (unaudited) and  289.5% (unaudited) for March 31, 2012 and 2011, respectively.  Daiwa also announced that Daiwa has calculated the consolidated  capital adequacy ratio as of March 31, 2012 in accordance with the  principal stipulated in the Notification 130 Pursuant to the Article  57-17-1 of the Financial Instruments and Exchange Act issued by the  Japanese Financial Service Agency (i.e. in Basel II method). The  consolidated capital adequacy ratio as of March 31, 2012 was  27.4% (unaudited). Daiwa’s reportable segments are defined as a group of operating  segments for which discrete financial information is available and  reviewed by the Company’s management regularly in order to make  decisions about resources to be allocated to the segments and  assess their performance. Focusing on securities-related business,  Daiwa offers overall investment and financial service in coordination  with group’s support business, and the Company decides the   comprehensive strategies by each organization in management   corresponding to business market and business category domesti- cally and internationally and conducts business activities. Therefore,  Daiwa decides operating segments by business market and business  category based on the organization structure, and aggregates to five  reporting segments: “Retail,” “Global markets,” “Global investment  banking,” “Asset management” and “Investment” by similarity of  economic character. 87 22. Segment information 21. Capital adequacy requirements 20. Investment and rental properties Millions of yen Thousands of  U.S. dollars Net Operating Revenue ¥7,732 $94,293 Ordinary Income 2,365 28,841 Net Income 1,604 19,561 Millions of yen Book value Fair value As of March 31,  2011 Change during  the period As of March 31,  2012 As of March 31,  2012 ¥– ¥269,320 ¥269,320 ¥269,320 Millions of yen Book value Fair value As of March 31,  2010 Change during  the period As of March 31,  2011 As of March 31,  2011 ¥– ¥– ¥– ¥– Thousands of  U.S. dollars Book value Fair value As of March 31,  2011 Change during  the period As of March 31,  2012 As of March 31,  2012 $– $3,284,390 $3,284,390 $3,284,390 (Calculation method of approximate amounts) The amounts indicated as the estimated impact of the combination  are the differences between the amount of net operating revenue and  income calculated by considering adjustments such as the elimination  of intercompany transactions and the gain or loss under the equity  method with the assumption that the business combination was  concluded on April 1, 2011 and the amount of those in the consoli- dated statements of operating of the Company. The estimated  amounts of the impact of the combination have not been audited.