The following are the results of various initiatives taken by the Daiwa Securities Group in fiscal 2005 towards building a sustainable society. The targets for fiscal 2006 are also presented here.

		Issues and targets for fiscal 2005	Progress	Issues and targets for fiscal 2006
Corporate governance		Introduce the stock options (at an exercise price of ¥1) for executive compensation, replacing the system to acquire stock.		Document internal standards relating to financial reporting and establish evaluation methods for the entire group.
		Continue to study ways of linking executive compensation with stock price.		Prepare systems for each group company in compliance with upcoming changes in Japanese commercial law.
		Strengthen the systems auditing at principal group companies.		Improve group management structures by investigating performance evaluation methods and promoting business continuity plans (BCP).
		Perform categorized audits, such as on compliance with the Personal Information Protection Law.
CSR management		Conduct training in compliance, corporate ethics, and CSR at all Daiwa Securities Co. Ltd. branches, to be completed by the end of fiscal 2007.		Focus more on economics and finance education.
		Promote group employees' understanding of CSR.		Promote the widespread practice of socially responsible investment (SRI).
Compliance	Entire Group	Strengthen cooperation between the legal compliance department in Daiwa Securities Group Inc. and its counterparts in each group company.		Arrange activities to raise awareness of the Corporate Ethics Hotline among group companies.
		Raise level of internal understanding of Corporate Ethics Hotline and periodically survey awareness.		Strengthen measures against anti-social influences.
		Examine establishment of Voluntary Action Standards.
	Daiwa Securities	Enforce management practices incorporating the perspectives of legal compliance and customer protection.		Practice proposal sales in order to support the asset formation that clients truly want.
		Further improve the compliance framework and eliminate violations of rules.		Streamline the way consultations are conducted between customers and senior branch officers.
		Reinforce management of complaints and claims.		Improve quality of performance in order to eliminate complaints and claims.
		Comply with new Personal Information Protection Law.		Keep rigorous guard against anti-social influences and unfair trading practices.
		Upgrade Compliance Division.
	Daiwa Securities SMBC	Expand the online training program so that each office can find needed subjects.		Implement training that includes current issues, and enrich e-learning content.
		Inspect the extent to which measures have been established to address risks identified in previous internal audits.		Take steps to prevent any leakage of personal data during the implementation of measures.
		Expand intra-departmental inspection lists to include personal information protection and new areas of business resulting from regulatory reform.		Build an inspection system to watch for conflicts of interest.
				Create a framework to comply with the Comprehensive Supervisory Guidelines for Securities Companies established by the Financial Services Agency.
				Set up a trading management system according to the new rules of the Japan Securities Dealers Association.
Information disclosure		Encourage active disclosure of information to attract new individual shareholders.		Encourage a better understanding of disclosure-related regulations within the Group.
				Expand IR programs to suit more types of investors.
Customer satisfaction		Actively pursue post-sales follow up.		Actively pursue post-sales follow up.
		Enhance the convenience of offices through utilization of IT.		Create office atmospheres that are appealing to a broad clientele.
		Create office atmospheres that are welcoming to a broad clientele.		Implement education programs to improve manners and knowledge of younger sales staff.
Communication with shareholders		Hold shareholder forums and other events.		Improve investor relations activities for individual investors.
Human values and human resource utilization		Review job descriptions and improve workplace environments to ease employment of the disabled.		Strengthen initiatives for job creation.
		Enhance training programs.		Enhance education and training programs to increase the number of qualified analysts and certified financial planners (CFPs).
		Develop workplace environments where women can fully demonstrate their abilities.		Continue workplace initiatives in support of female employees.
Corporate citizenship		Enhance volunteer programs so that as many group employees as possible can participate.		Strengthen initiatives that address social issues.
				Promote volunteer programs that enable the participation of larger numbers of employees.
Working for the environment		Improve precision of Daiwa's independent environmental management systems.		Expand the environmental management systems to consolidated subsidiaries in Japan.
		Promote environmental communication.		Reduce environmental impact through the computerization of documents and the reduction of office paper usage.
		Establish a basic policy on green procurement.		Establish guidelines on procurement.

Progress

: Implemented and good results achieved : Implemented and fair results achieved : Implemented, further work necessary :Not yet implemented

In fiscal 2005, in addition to ongoing initiatives, the Daiwa Securities Group focused on further strengthening its compliance framework and creating a workplace environment that better supports its female employees.
　 Female employees have greater and greater opportunities in the Group. The Group will continue promoting the support of women in the workplace and encourage female employees to utilize the programs available to them.
　 In the area of compliance, the Daiwa Securities Group strengthened workplace training in compliance awareness and conducted checks of the effectiveness of management and monitoring.

In fiscal 2006, the Daiwa Securities Group set targets based on the initial year of the action plan designed to achieve the new Medium-term Management Plan "Passion for the Best" 2008 announced in May 2006. The fiscal 2006 targets for each division correspond to this medium-term management strategy. The pursuit of these targets is intended to help maximize corporate value for all stakeholders.