Daiwa Securities Group Annual Report 2012 “New” Daiwa Securities and  “New” Medium-Term Management Plan On April 1, 2012, Daiwa Securities Co. Ltd. merged with Daiwa Securities Capital Markets  Co. Ltd., opening a new chapter in the Daiwa Securities Group’s history. This merger will  reunite the Retail operations of Daiwa Securities with the Wholesale activities of Daiwa  Securities Capital Markets for the first time since 1999, when the Group adopted a holding  company structure. We have concluded that this re-unification is an essential step in our  effort to “establish a robust business structure.” Indeed, we see it as one of the most  important decisions in the 110-year history of the Daiwa Securities Group. Preparatory work  to merge the two companies and a project to revise the Group’s organizational structure  has been under way since early 2011. The consolidation and streamlining project aims to  eliminate all the inefficiency and duplication that developed over the 13 years during which  operations were managed separately, while aggressively cutting costs, especially in the  Wholesale business, to address today’s highly competitive business environment. These  efforts have already lowered break-even levels dramatically. In this way, we are laying a firm  foundation on which the Daiwa Securities Group can write a new chapter in its history. As  the “new” Daiwa Securities begins operations, we will strive to create the efficient manage- ment structure and powerful sales capabilities needed to succeed as a comprehensive,  full-service securities company. In the year since I was appointed CEO, I have been constantly impressed by the vast  management resources possessed by the Daiwa Securities Group. In the past, the qualities  that have allowed the Group to thrive were not ambitious M&A-based strategies but, rather,  the importance that Daiwa places on developing a corporate culture committed to excellence.  The unity and reliability of this organization are the Group’s most valuable assets. Even when considering the broad sweep of its 110-year history, I believe that FY2012  will go down as a historic year for the Daiwa Securities Group. To guide the “new” Daiwa  Securities as it enters the next phase of its evolution, we have formulated a “new” Medium- Term Management Plan—“Passion for the Best” 2014. This plan, which commenced in  April 2012, contains the Group’s roadmap for the next three years. I take pride in having the  opportunity to contribute to this important transition and I would like to thank all Daiwa  Securities Group stakeholders for their support as we strive to build a sustainable corporate  structure and pursue a new phase of growth. July 2012 11 Takashi Hibino President and CEO Daiwa Securities Group Inc.