The Daiwa Securities Group is committed to establishing sound work-life balance by creating a workplace where executives and employees feel that their work is fulfilling and that sustains their high motivation.

  In its company invigoration program of July 2006 and March 2007, the Daiwa Securities Group set the target of becoming the leading securities group in Japan, where employees are enthusiastic and consider their work worthwhile. We have implemented various measures to give executives and employees confidence in the company; help them understand the role and significance of the company and give them pride in their work; and help them share a sense of solidarity with the company and their colleagues. In April 2008, we also created the Work-life Balance Promotion Committee and the Work-life Balance Promotion Department, to support our initiatives for making Daiwa a company that is fulfilling to working for.

  The Daiwa Securities Group believes that long-term employment is essential for fostering confidence, pride in the company and a sense of solidarity. Toward this end, we are focusing on establishing a system, predicated on long-term employment, for expanding the number of employees who can share these ideas.
  In April 2007, we hired 1,282 new graduates. We believe it is vital for prospective employees to understand our ideas, and therefore we expanded communication in our hiring process by holding seminars and small meetings throughout Japan for student job-seekers. In fiscal 2007, we communicated with 33,400 students. These activities helped many students understand our message, and our efforts also improved our ranking on the list of companies that students most want to work for.

■Number of New Graduates Hired by the Daiwa Securities Group (Consolidated) (persons)

■Employees at the Daiwa Securities Group (Consolidated)

  In fiscal 2006 we inaugurated a new program that offers temporary employees who have worked for three years or more the opportunity to become full-time employees, to increase the number of employees sharing the company's ideas and foster solidarity. In fiscal 2006, more than 100 employees became full-time employees, and over 70 did so in fiscal 2007.

  We implemented our Professional Return Plan (rehiring of sales staff) in fiscal 2005. Under this system, sales staff who retired from the Daiwa Securities Group due to marriage, having children or other reasons and who wish to return to work, can be re-hired as full-time employees. In fiscal 2007, three people were re-hired as full-time employees under this plan.

  We actively employ veteran employees under the Daiwa Elder System, which re-hires employees who left the company after reaching mandatory retirement age, and the Daiwa Master System, which offers extended employment to age 65 to employees reaching the mandatory retirement age of 60 who meet certain criteria and wish to continue working. We are taking steps to employ highly motivated and experienced older people.

■Reemployment under the Daiwa Elder System and the Daiwa Master System
(Daiwa Securities Group Inc., Daiwa Securities Co. Ltd. and Daiwa Securities SMBC Co. Ltd.) (persons)

As of March 31, 2008, persons with disabilities accounted for 1.87 percent of our workforce, averaged across nine Group companies. To improve retention of employees with disabilities, in fiscal 2007 we implemented a system enabling contract employees to acquire full-time employee status, and 10 persons became full-time employees. In fiscal 2008, we began hiring new graduates with disabilities as full-time sales staff; seven persons were hired by Group companies in April 2008.

■Employment Rate for Persons with Disabilities (Average across the Nine Principal Group Companies, as of Each Fiscal Year-end)

  With the goal of making Daiwa the number one professional team in the industry, we focus on human resources development. In particular, we see the first three years of employment as the optimum period for acquiring knowledge and skills and we offer a broad range of training programs to employees at this stage of their careers. We created a new Education and Training Department in 2007. Reflecting the increase in the number of new graduates we have hired, we have expanded our training system for young sales staff. In fiscal 2007 we also introduced coaching training and other initiatives aimed at improving the abilities of intermediate-level staff to direct younger employees in the field. For employees in their fourth year of employment, we conduct group training aimed at reinforcing awareness that they are working for the Daiwa Securities Group and fostering solidarity among colleagues.
  To strengthen employees' motivation to study, we adopted a system requiring a certain number of points, based on qualifications obtained, for promotions and advancement. In 2007, we revised the point system in order to expand the staff resources suitable for contributing to our globalization strategy and reinforcement of our internal control system.

  The Daiwa Securities Group's internal (intra-Group) job posting system has been in place since fiscal 2000. This facilitates personnel transfers across Group companies and gives employees the opportunity to explore different career options and apply their capabilities to the fullest. In spring 2007, three out of 29 applicants were successful, as were eight out of 43 applicants in fall 2007. There have been a total of 691 applicants since 2000, and a total of 131 successful transfers. The Group also offers new career path examinations for those in non-career-track jobs to move into career-track and regional career-track jobs.

■Successful Applicants in the Internal Recruiting System (Unit:persons)

Figures as of: March 31, 2008

To make its evaluation system fair and acceptable to employees, the Daiwa Securities Groups implements a two-way evaluation system in which superiors and subordinates evaluate each other, and a multi-directional evaluation system in which evaluations are received from collaborating departments. Multi-faceted evaluations are carried out that also take compliance-related performance into account.

  The Daiwa Securities Group believes that companies in the future will need to enable everyone working for them to have satisfying private and professional lives. In April 2008, we established a Work-life Balance Promotion Committee, with Daiwa Securities Group Inc. President and CEO Shigeharu Suzuki as chief work-life balance officer (CWO) and executives from the principal Daiwa Group companies in charge of human resources as members. A Work-life Balance Promotion Department was also created at Daiwa Securities Group Inc. This is a Group-wide undertaking aimed at balancing work and private life in order to improve motivation among all executives and employees.
  One specific initiative is Daiwa Securities Group Inc.'s participation in a model work-life balance project promoted by the Ministry of Health, Labour and Welfare. We contribute to society through this project by implementing enhanced measures for work-life balance and by also communicating information outside the company about the measures we are taking.
  Our practice of encouraging employees to leave work before 7 p.m. begun in July 2007 has become well-established at all Daiwa securities sales branches and has greatly changed how employees work. We also amended our childcare leave system in 2008 to make it easier for male executives and employees to take childcare leave. To help establish practical systems, we will be monitoring and analyzing the extent to which various leave programs are being used and how this relates to productivity.

  The Daiwa Securities Group actively supports its female employees, introducing a wide range of opportunities and programs to enable women to make the most of their capabilities in the workplace. For example, we were the first in the industry to promote women to sales branch manager positions. As of April 30, 2008, nine out of Daiwa Securities' 117 sales branches throughout Japan are headed by women. In February 2005, Daiwa Securities Group Inc. started up a Women's Support Action Team, which has introduced programs in Group companies to help women balance work and family life, such as leave of absence for childbirth or child care, exemption from overtime work and so on. In fiscal 2007, materials describing the various programs were distributed to executives and managers of Group companies. We also established a system whereby when a staff member is eligible for the above programs, the Personnel Department notifies the individual's superior, who encourages her to make use of the programs. These measures have helped executives and employees understand the programs better and created a workplace atmosphere more supportive of those using the programs.
  The Women's Career Design Seminar and Career Design Training programs are also offered at Group companies to enable female employees to take the initiative to map out their careers. In addition, mainly the members of the Women's Support Action Team seek out female employees to discuss various issues.

■Main Initiatives of the Female Employee Support Plan (as of March 2008)

  In August 2006, Daiwa Securities Group Inc. created a new Mental Health Support Promotion Department to ensure that personnel can work in the best of physical and mental health. This department provides counseling for Group executives and employees and their families. In April 2008, the support system was expanded by increasing the number of certified clinical psychologists on call from one to two, who were also made available for consultations daily, up from three times weekly. We also have arrangements with outside specialists so that Group personnel and their families can receive prompt attention anywhere in Japan. Further, to spread awareness of mental health and promote prevention and early detection of mental health issues, the Mental Health Support Promotion Department's certified clinical psychologists give lectures at our departments and branches.

  The Daiwa Securities Group has been a member of the Industrial Federation for Human Rights, Tokyo since 1998. Daiwa Securities Group Inc. established a Human Rights Awareness Promotion Committee which is headed by the Daiwa Securities Group Inc. director in charge of personnel management. All heads of Group departments and branches are members of the committee, which meets regularly and conducts activities to enhance awareness of human rights, such as training for executives and employees and canvassing for slogans. The Daiwa Securities Group will continue its human rights awareness initiatives to ensure fair, discrimination-free hiring and create a gender-equal society.

  In December 2007, Daiwa Securities Group Inc. and the head offices of Daiwa Securities and Daiwa Securities SMBC relocated to Gran Tokyo North Tower. Prior to this, all Daiwa Securities sales branches were renovated to provide more spacious surroundings for customers and make the workplace more pleasant for employees.

■Working Hours and Paid Vacation Usage Rate (Daiwa Securities Group Inc., Daiwa Securities Co. Ltd., Daiwa Securities SMBC Co. Ltd.)

■Daiwa Securities Group's Female Employee and Manager* Ratios in Japan

■Employee Welfare System Usage (Nine Principal Group Companies*1) (persons)

  The Daiwa Securities Group believes that communication with executives and employees is vital. Communication takes place through interviews with the Personnel Department and a semi-annual self-assessment questionnaire giving personnel an opportunity to voice comments or wishes. We endeavor to reflect spring labor negotiations with the Employees' Union and findings from union member questionnaires conducted by the union in a variety of policies and initiatives. Other communication activities include our "Salon de Woman," a forum for communicating with young female sales staff and female sales staff with children, and Personnel Department staff participation in events organized by the Employees' Union. These activities give us opportunities to hear directly from executives and employees and reflect what we learn through such contacts in various policies and programs.

■Number of Employees' Union Members (Seven Principal Group Companies,* as of the End of Each Fiscal Year) (persons)

  The Daiwa Securities Group undertakes various activities to help executives' and employees' families become more familiar with the company. In November 2007, the company organized a festival open to the families of all Group personnel. We invite the families of prizewinners to the Daiwa Securities President's Awards ceremonies held twice a year, and all families receive flowers for Christmas. We have introduced a "family days off" holiday to make it easier to take yearly vacation time, and our mental health support program also makes care available to families.
  In December 2007, we introduced a system providing a two million yen benefit for employees' third or subsequent children, to offset the financial burden of child-rearing. In fiscal 2008, we are planning to designate a day when employees can invite family members to their workplaces.

We are expanding and improving our systems and initiatives intended to make the workplace fulfilling, but ongoing checks are needed to find out what executives and employees think of them and to verify their effectiveness in order to make improvements. Comments from users of the main systems are presented here.