Daiwa Securities Group Annual Report 2012 Corporate Summary Executive Messages Business Strategy Management Systems & CSR Financial Section Other Information 3. Capital Adequacy Capital requirements for credit risk (Note 4) Credit risk exposures are being calculated in the Standardized Approach, hence there is no applicable credit risk exposure in which calculated under IRB approach. 100 (Unit: 100 Million Yen) Capital requirements On-balance transactions 1,050 1. Cash – 2. Japanese government and central bank – 3. Non-Japanese sovereign and central bank 6 4. Bank for International Settlement (BIS) – 5. Japanese local public authorities – 6. Non-Japanese public sector entities (excluding sovereign) 1 7. Multilateral development banks (MDBs) – 8. Japan Finance Organization for Municipalities (JFM) 0 9. Japanese government sponsored entities 17 10. Three major local public corporations of Japan 0 11. Financial institutions and securities firms 114 12. Corporates 238 13. SMEs and individuals – 14. Residential mortgage loans – 15. Projects including acquisition of real estate properties 5 16. Past due exposures for three months or more 1 17. Cash items in process of collection – 18. Exposures secured by Credit Guarantee Association in Japan – 19. Exposures secured by Enterprise Turnaround Initiative Corporation of Japan – 20. Equities 152 21. Others 405 22. Securitizations (as an originator) – 23. Securitizations (not as an originator) 6 24. Funds 105 Off-balance transactions 383 1. Unconditionally or automatically cancellable commitments – 2. Commitments with an original maturity up to one year – 3. Short-term self-liquidating trade letters of credit arising from the movement of goods – 4. Certain transaction-related contingent items – 5. Note issuance facilities (NIFs) and revolving underwriting facilities (RUFs) – 6. Commitments with an original maturity over one year – 7. Commitments related IRB Approach – 8. Direct credit substitutes and acceptances 4 9. Sale and repurchase agreements and asset sales with recourse – 10. Forward asset purchases, forward forward deposits and partly-paid shares and securities – 11. Lending or posting of securities as collateral 122 12. Derivative transactions 255 13. Long settlement transactions 1 14. Unsettled transactions 1 15. Securitization exposure qualifies as an ‘eligible liquidity facility’ or an ‘eligible servicer cash advance facility’ – 16. Others (Securitization off-balance transactions) – Total capital requirements for credit risk 1,433