Daiwa Securities Group Inc. / Performance, Issues, and Targets

This section reports the fiscal 2006 results, and fiscal 2007 targets, for the wide range of initiatives conducted by the Daiwa Securities Group for the achievement of a sustainable society.

		Issues and targets for fiscal 2006	Rating of initiatives	Issues and targets for fiscal 2007
Adding a Social Perspective to Investment				Promote the widespread practice of SRI (continued).
Adding a Social Perspective to Investment				Provide more information on socially responsible investment.
Commitment to the Development of a Sound Securities Market				See "Compliance."
Contribution to Global Environment				Consider the development of financial products that enable investors to help resolve environmental issues.
				Expand environmental management systems to major overseas offices.
				Reduce environmental impact by such means as appropriate adjustment of air conditioning and using electronic statements.
				Achieve zero waste on move of headquarters building.
Publishing Information for a Sustainable Society				Enhance activities to raise awareness of sustainability.
Publishing Information for a Sustainable Society				Promote economic and financial literacy initiatives for junior and senior high-school students.
Corporate Governance		Document internal standards relating to financial reporting and establish evaluation methods for the entire group.	G	Perform documentation and validation in anticipation of fiscal 2008 (first year that internal control system goes into effect).
		Prepare systems for each group company in compliance with upcoming changes in Japanese commercial law.	VG	Create systems for new businesses.
		Improve group management structures by investigating performance evaluation methods and promoting business continuity plans (BCP).	G	Further promote BCP.
CSR Management		Focus more on economic and financial education.	G	See "Adding a Social Perspective to Investment" and "Publishing Information for a Sustainable Society."
CSR Management		Promote the widespread practice of SRI.	G
Compliance	Entire Group	Arrange activities to raise awareness of the Corporate Ethics Hotline among group companies.	VG	Raise awareness of corporate ethics and compliance at group companies (continued).
	Entire Group	Strengthen measures against anti-social influences.	G	Strengthen measures against anti-social forces (continued).
	Daiwa Securities	Practice proposal sales in order to support the asset formation that clients truly want.	VG	Enhance systems compliant with such revised laws as the Financial Instruments and Exchange Law and Financial Products Sales Law.
		Streamline the way consultations are conducted between customers and senior branch officers.	G	Revise internal rules, including simplification and streamlining.
		Improve quality of performance in order to eliminate complaints and claims.	G	Enhance customer and sales-force management systems.
		Keep rigorous guard against anti-social influences and unfair trading practices.	G
	Daiwa Securities SMBC	Implement training that includes current issues, and enrich e-learning content.	VG	Enhance systems compliant with such revised laws as the Financial Instruments and Exchange Law and Financial Products Sales Law.
		ake steps to prevent any leakage of personal data during the implementation of measures.	VG	Manage information more strictly, and in particular establish systems to prevent the leakage of personal information.
		Build an inspection system to watch for conflicts of interest.	VG	Enhance compliance regimes relating to laws and regulations concerning foreign exchange.
		Create a framework to comply with the Comprehensive Supervisory Guidelines for Securities Companies established by the Financial Services Agency.	VG	Support greater sophistication in risk-management systems.
		Set up a trading management system according to the new rules of the Japan Securities Dealers Association.	VG
Information Disclosure		Expand IR programs to suit more types of investors.	VG	Enhance disclosure of non-financial information.
		Improve investor relations activities for individual investors.	G	Further expand and enhance investor relations (IR) targeting individual investors.
		Encourage a better understanding of disclosure-related regulations within the Group.	G
Customer Satisfaction		Actively pursue post-sales follow up.	G	Actively pursue post-sales follow up (continued).
		Create office atmospheres that are appealing to a broad clientele.	G	Improve skills of junior salespeople.
		Implement education programs to improve manners and knowledge of younger sales staff.	G	Improve customer-interface skills of branch employees who interact with customers.
Human Values and Human Resource Utilization		Strengthen initiatives for job creation.	VG	Further promote company-vitalization measures.
		Enhance education and training programs to increase the number of qualified analysts and certified financial planners (CFPs).	G	Enhance education and training programs to increase number of certified analysts and CFPs (continued).
		Continue workplace initiatives in support of female employees.	G	Develop workplace environments where women can fully demonstrate their abilities (continued).
Corporate Citizenship		Strengthen initiatives that address social issues.	G	Contribute to social welfare through the utilization of grant programs and the like.
Corporate Citizenship		Promote volunteer programs that enable the participation of larger numbers of employees.	F	Promote volunteer programs to enable more employees to participate (continued).
The Environmental Impact of the Daiwa Securities Group		Expand the environmental management systems to consolidated subsidiaries in Japan.	F	See "Contribution to Global Environment."
		Reduce environmental impact through the computerization of documents and the reduction of office paper usage.	VG
		Establish guidelines on procurement.	NI

Rating of initiatives

VG : Very good results toward achieving vision and medium-term goals
G : Good results toward achieving vision and medium-term goals
F : Fair; further implementation and results needed
NI : Not implemented

The results of initiatives in fiscal 2006, and plans for fiscal 2007, are listed as the issues and targets of each division. Each initiative is rated based on its results in achieving its vision and medium-term goals*1.

Targets for fiscal 2007 relating to the material issues identified in this report are categorized as "targets for material issues."
Additionally, the CSR targets of each division for fiscal 2007 are in accordance with the Group's Medium-term Management Plan*2, and the practice of CSR targets leads to the maximization of the value of each stakeholder group.

*1 In the following pages, "vision and medium-term goals" are indicated as the vision of each division to achieve through its initiative.
*2 The Group's Medium-term Management Plan: A three-year plan from fiscal 2006 to fiscal 2008. See page 14 of the Daiwa Securities Group Inc. Financial Report for the period ended March 2007 for details. (In Japanese only)
http://www.daiwa-grp.jp/ir/financial/report.cfm