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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 

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(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. 

## 20. Investment and rental properties 

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. 

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(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. 

## 21. Capital adequacy requirements 

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). 

## 22. Segment information 

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. 

