野村不動産ホールディングス（3231） – Items Disclosed on the Internet in relation to the Notice of Convocation of the 18th Ordinary General Meeting of Shareholders

Items Disclosed on the Internet in relation to the Notice of Convocation of the 18th Ordinary General Meeting of Shareholders Business Report Current status of the Group Principal businesses Principal business offices of major subsidiaries Share acquisition rights, etc. Status of share acquisition rights Status of share acquisition rights held by the officers of the Company Status of share acquisition rights delivered to employees, etc., during the fiscal year under review Other important matters relating to share acquisition rights, etc. System to ensure the appropriateness of operations and the operational status of that system Consolidated Financial Statements Consolidated Statement of Changes in Shareholders’ Equity Notes to Consolidated Financial Statements Non-Consolidated Financial Statements Non-Consolidated Statement of Changes in Shareholders’ Equity Notes to Non-Consolidated Financial Statements The above information is provided to shareholders by means of disclosure through the Internet (on the website of Nomura Real Estate Holdings, Inc. (the “Company”) at https://www.nomura-re-hd.co.jp/english/ir/) pursuant to the provisions of laws and regulations and Article 14 of the Company’s Articles of Incorporation. Nomura Real Estate Holdings, Inc. Please note that the following is an unofficial English translation of Japanese original text of the Items Disclosed on the Internet in relation to the Notice of Convocation of the 18th Ordinary General Meeting of Shareholders of Nomura Real Estate Holdings, Inc. The Company provides this translation for reference and convenience purposes only and without any warranty as to its accuracy or otherwise. In the event of any discrepancy between this translation and the Japanese original, the latter shall prevail. Business Report Current status of the Group Principal businesses (as of March 31, 2022) A brief description of the businesses of the Nomura Real Estate Group (the “Group”) is as follows: Unit Principal businesses Residential Development Business Unit Commercial Real Estate Business Unit Investment Management Business Unit Property Brokerage & CRE Business Unit Property & Facility Management Business Unit Overseas/Other Development and sale of condominiums and detached housing, development and sale of rental condominiums, development and operation of housing for the elderly, internet ad agency business, development and sale of systems related to real estate, and businesses aimed at providing assistance to customers concerning their homes arrangements, etc. Development, lease, sale and entrusted management of office buildings, logistics facilities and retail facilities, planning, lease and operation of hotels, operation of fitness clubs, planning and management of construction work, etc. Investment management business including REIT, privately placed real estate funds, and real estate securitization products Real estate brokerage and consulting, consignment sales for condominiums and detached housing, and insurance agency businesses Operation, management and construction of condominiums and office buildings, remodeling construction business, operation of local cooling and heat supply business, entrusted management of cleaning of office buildings, etc. Development and sale of condominiums and development and lease of office buildings outside Japan, and purchase and sale and lease of land and buildings in Japan that do not belong to the above business units 1 Principal business offices of major subsidiaries (as of March 31, 2022) Company name Name Location Nomura Real Estate Development Co., Ltd. Head office Shinjuku-ku, Tokyo Nomura Real Estate Asset Management Co., Ltd. Head office Shinjuku-ku, Tokyo Nomura Real Estate Solutions Co., Ltd. Head office Shinjuku-ku, Tokyo Nomura Real Estate Partners Co., Ltd. Head office Shinjuku-ku, Tokyo Nomura Real Estate Building Co., Ltd. Head office Minato-ku, Tokyo Nomura Real Estate Life & Sports Co., Ltd. Head office Nomura Real Estate Heating and Cooling Supply Co., Ltd. Head office Nomura Real Estate Retail Properties Co., Ltd. Head office Nakano-ku, Tokyo Hodogaya-ku, Yokohama-shi, Kanagawa Shinjuku-ku, Tokyo Nomura Real Estate Wellness Co., Ltd. Head office Shinjuku-ku, Tokyo Nomura Real Estate Hotels Co., Ltd. Head office Shinjuku-ku, Tokyo UHM Co., Ltd. Head office Chiyoda-ku, Tokyo Nomura Real Estate Amenity Service Co., Ltd. Head office Shinjuku-ku, Tokyo PRIME X. Co., Ltd. Musashi Co., Ltd. First Living Assistance Co., Ltd. Lothbury Investment Management Limited ZEN PLAZA CO., LTD Head office Shinjuku-ku, Tokyo Head office Minato-ku, Tokyo Head office Shinjuku-ku, Tokyo Head office Head office London, England Ho Chi Minh City, Vietnam 2 The 1st share acquisition rights in FY2015 The 2nd share acquisition rights in FY2015 The 3rd share acquisition rights in FY2015 The 5th share acquisition rights in FY2015 The 1st share acquisition rights in FY2016 The 2nd share acquisition rights in FY2016 The 3rd share acquisition rights in FY2016 The 1st share acquisition rights in FY2017 The 2nd share acquisition rights in FY2017 The 3rd share acquisition rights in FY2017 The 1st share acquisition rights in FY2018 The 2nd share acquisition rights in FY2018 Share acquisition rights, etc. Status of share acquisition rights (as of March 31, 2022) Name of share acquisition rights Date of resolution on issuance Number of share acquisition rights Number of common shares subject to share acquisition rights Exercise period of share acquisition rights Exercise price of share acquisition rights per share (Yen) June 26, 2015 87 8,700 From July 23, 2018 to July 22, 2023 June 26, 2015 403 40,300 June 26, 2015 2,765 276,500 September 17, 2015 June 29, 2016 June 29, 2016 June 29, 2017 June 29, 2017 172 302 864 337 872 From July 23, 2018 to July 22, 2023 From July 23, 2018 to July 22, 2023 17,200 From October 14, 2018 to October 13, 2023 30,200 From July 22, 2019 to July 21, 2024 86,400 From July 22, 2019 to July 21, 2024 33,700 From July 21, 2020 to July 20, 2025 87,200 From July 21, 2020 to July 20, 2025 June 29, 2016 1,803 180,300 From July 22, 2019 to July 21, 2024 1,927 June 29, 2017 3,089 308,900 From July 21, 2020 to July 20, 2025 2,400 June 26, 2018 89 June 26, 2018 235 23,500 8,900 From July 19, 2021 to July 18, 2026 From July 19, 2021 to July 18, 2026 Notes: 1. The number of the shares subject to a share acquisition right is 100. 2. In principle, a person who has received the allotment of the share acquisition rights must be in a position of Director, Audit & Supervisory Board Member, Executive Officer, Senior Advisor, Advisor, Special Officer, Special Advisor or employee of the Company or any of its subsidiaries, or in an equivalent position thereto until the time of exercise of the share acquisition rights on a continuing basis. 3. The number of share acquisition rights and the number of common shares subject to share acquisition rights are the numbers as of March 31, 2022. 4. The Company abolished the existing stock option with issuance of share acquisition rights using stock option as of the fiscal year ended March 31, 2018, and no share acquisition rights using stock option have been issued since then. 2,741 2,355 1 1 1 1 1 1 1 1 3 Status of share acquisition rights held by the officers of the Company (as of March 31, 2022) Directors (excluding Audit & Supervisory Committee Members and External Directors) Directors (Audit & Supervisory Committee Members) Number of share acquisition rights Number of holders Number of holders Number of share acquisition rights Name of share acquisition rights The 1st share acquisition rights in FY2015 The 2nd share acquisition rights in FY2015 The 3rd share acquisition rights in FY2015 The 1st share acquisition rights in FY2016 The 2nd share acquisition rights in FY2016 The 3rd share acquisition rights in FY2016 The 1st share acquisition rights in FY2017 The 2nd share acquisition rights in FY2017 The 3rd share acquisition rights in FY2017 The 1st share acquisition rights in FY2018 The 2nd share acquisition rights in FY2018 38 42 124 113 130 104 139 51 137 43 30 1 1 4 1 2 3 2 1 4 2 2 49 – 33 76 – – 61 – 33 18 – 1 – 1 1 – – 1 – 1 1 – Note: Share acquisition rights held by Directors (Audit & Supervisory Committee Members) were delivered to them before they assumed the office of Director (Audit & Supervisory Committee Member). Status of share acquisition rights delivered to employees, etc., during the fiscal year under review Not applicable. Not applicable. Other important matters relating to share acquisition rights, etc. 4 System to ensure the appropriateness of operations and the operational status of that system The Company has passed the following resolutions at meetings of the Board of Directors regarding systems to ensure that Directors’ execution of their duties is in compliance with laws and regulations and the Articles of Incorporation and other systems to ensure the appropriateness of operations. 1) System to ensure that the execution of duties of the Directors and Executive Officers complies with laws and regulations and the Articles of Incorporation 2) System for the retention and management of information relating to the execution of duties of the Directors and Executive Officers 3) Rules and other systems for management of risk of loss a. Aiming to be a trusted corporate group that prospers together with its customers and society, the Board of Directors has formulated the Nomura Real Estate Group Code of Action which sets forth the behavior that all officers and employees should strive to exemplify. Directors and Executive Officers shall lead by example and comply with this Code of Action. b. The Company has formulated the Board of Directors Regulations and the Organization and Resolutions Rules, which form the basis for referring matters to, and reporting to, the Board of Directors. Directors and Executive Officers shall execute their duties in accordance with these Regulations and Rules. c. The execution of the duties by Directors and Executive Officers shall be audited by the Audit & Supervisory Committee. The Company has formulated the Information Security Provisions, which stipulate the basic matters concerning the information management system and the handling of information, to ensure that minutes of General Meetings of Shareholders, minutes of the Board of Directors meetings, and other documents containing information related to the execution of duties by Directors (excluding Directors as Audit & Supervisory Committee Members) and Executive Officers are stored in an appropriate place and saved for the stipulated period of time, so that they can be quickly accessed upon request by Directors or Executive Officers at any time. a. The Board of Directors shall exercise overall control of risk management in accordance with the Risk Management Regulations, develop a system to ensure effective mutual check functions, assign personnel appropriately, provide education for the development of human resources, fully disseminate the importance of risk management to all Officers and employees, and formulate appropriate measures to prevent accidents. b. To deliberate business risks, the Company has established a Risk Management Committee comprising Directors, Executive Officers, etc. of the Company and Group companies designated by the Board of Directors as a subordinate body to the Executive Committee, with the Executive Committee set as the core of total risk management, to periodically monitor, assess, and analyze risks, and deliberate basic principles for measures to prevent risks that may occur during corporate management and business development, to respond when risks arise, and to prevent recurrence, in accordance with the Risk Management Regulations and the Meeting Bodies Rules. In addition, the Company has established a Group Risk Meeting comprising Directors, Executive Officers, etc. of Group companies designated by the chairman of the Risk Management Committee to share risk information and response policies within the Group. The Risk Management Committee and Group Risk Meeting shall in principle meet bimonthly or when necessary, respectively, and shall report the content of deliberations to the Board of Directors at least once every three months. c. When a risk requiring immediate action arises, in accordance with the Risk Management Regulations, the chairman of the Risk Management Committee and Executive Officers and general managers of departments and branch offices in charge of Group risk management, PR, management of affiliated companies, corporate administration, and finance stipulated by the Risk Management Regulations shall discuss and determine the basic policy for measures to address the risk. The Company and Group companies shall respond in accordance with this basic policy. a. To facilitate flexible decision-making concerning the execution of business, certain matters determined by resolution of the Board of Directors among the matters concerning the execution of business at all Group companies shall be decided through the Executive Committee or through an internal approval system. b. The Company has introduced an Executive Officer system aiming to strengthen Group management by separating management oversight and decision-making function from business execution function, thereby enhancing the execution function. c. The Board of Directors shall, by resolution, appoint Executive Officers in charge of the execution of business, stipulate their business, and delegate the 4) System to ensure the efficient execution of duties of the Directors and Executive Officers 5 business operations of the Company. Individual Executive Officers shall execute business based on the administrative authorities delegated in accordance with internal regulations, etc. and based on Company policies determined by the Board of Directors, decisions regarding business execution made by the Executive Committee, and the directions of the Chief Executive Officer. d. The Board of Directors shall create annual budgets and mid-term business plans, and manage progress on a monthly basis. The results of monthly progress management shall be reflected into the execution of duties. As a holding company, the Company established the following compliance system covering not just the Company itself but the entire corporate group. a. Aiming to be a trusted corporate group that prospers together with its customers and society, the Company has established the Nomura Real Estate Group Code of Action which sets forth the behavior that all Officers and employees should strive to exemplify, and ensures that all Officers and employees comply with the Code of Action. b. The Company has established the Risk Management Committee and Group Legal & Compliance Department, and promotes continual education and enlightenment activities for Officers and employees to increase awareness of compliance. c. The Company has established the Nomura Real Estate Group Help Line as an internal whistleblowing system for shared use by all Group companies. Reports and questions can be directed to internal parties (the chairman of the Risk Management Committee and the Group Legal & Compliance Department) and external parties (attorneys at law and contractors). Such reports remain strictly confidential to prevent informants from receiving adverse treatment based on having provided information. The corporate group comprising the Company and its subsidiaries forms the Nomura Real Estate Group centered on the Company as the holding company. The Nomura Real Estate Group has established the following systems to ensure appropriate operations. a. Aiming to be a trusted corporate group that prospers together with its customers and society, the Company has established the Nomura Real Estate Group Code of Action which sets forth the behavior that all Officers and employees should strive to exemplify, and ensures that all Officers and employees comply with the Code of Action. b. The Executive Committee has been established in the Company to discuss important matters related to Group management, overall Group company business execution, and risks pertaining to Group management, and to determine certain matters related to overall Group company business execution. In addition, the Executive Committee ensures the common purpose of Group management through these activities. c. The Risk Management Committee has been established in the Company to discuss matters concerning disaster risks for the entire Group as well as matters related to internal risks, and to promote the sharing of information. d. The Company has established the Group Organizational Management Regulations that require Group companies to discuss with or report to the Company in advance when determining important matters. e. The Company has established the Group Internal Audit Department, which reviews internal audits performed by Group companies in accordance with the Group Internal Audit Regulations, thereby maintaining and improving the quality of audits throughout the entire Group. f. The Company has established the Sustainability Committee and Sustainability Management Department, and promotes continual education and enlightenment activities to increase CSR and ESG awareness throughout the entire Group. g. The Company has established the Nomura Real Estate Group Help Line as an internal whistleblowing system for shared use by all Group companies. Reports and questions can be directed to internal parties (the chairman of the Risk Management Committee and the Group Legal & Compliance Department) and external parties (attorneys at law and contractors). Such reports remain strictly confidential to prevent informants from receiving adverse treatment based on having provided information. The Company has established the Internal Control Regulations for Financial Reporting for the Group in accordance with the Financial Instruments and Exchange Act and other related laws to ensure the reliability of the Nomura Real Estate Group’s financial reporting. Based on the Regulations, the Company develops and operates the internal controls related to financial reporting and evaluates their effectiveness. 6 5) System to ensure that the execution of duties of the employees complies with laws and regulations and the Articles of Incorporation 6) System to ensure the appropriateness of operations in the corporate group consisting of the Company, its parent company and subsidiaries 7) System to ensure the reliability of financial reporting 8) Items related to the Directors and employees aiding the duties of the Audit & Supervisory Committee, items related to the independence of these Directors and employees from other Directors (excluding Directors as Audit & Supervisory Committee Members), and items related to ensuring the effectiveness of the instructions from the Audit & Supervisory Committee to these Directors and employees 9) System for the Directors, Executive Officers and employees to report to the Audit & Supervisory Committee, system for Directors, Audit & Supervisory Board Members, Executive Officers, and employees of subsidiaries, and persons receiving reports from them to report to the Audit & Supervisory Committee, and system to ensure that these people conducting the reporting shall not be subjected to adverse treatment due to such reporting 10) Items related to the policies on procedures for the prepayment or reimbursement of expenses arising from the execution of duties of the Audit & Supervisory Committee Members, and the handling of other expenses or obligations arising from the execution of these duties 11) Other systems to ensure the audits of the Audit & Supervisory Committee are implemented effectively The Company has established the Audit & Supervisory Committee Department to assist duties of the Audit & Supervisory Committee, and dedicated staffs assigned to this department perform duties in accordance with the directions and orders issued by Audit & Supervisory Committee Members. Directors shall obtain the consent of the Audit & Supervisory Committee Members designated by the Audit & Supervisory Committee with respect to personnel matters concerning dedicated staff of the Audit & Supervisory Committee Department. a. When matters arise that may result in significant damage to the Company or Group companies or violate laws and regulations or the Articles of Incorporation, Directors, Executive Officers, and employees of the Company and Group companies, and Audit & Supervisory Board Members of Group companies shall immediately report such matters to the Audit & Supervisory Committee. b. The Group Internal Audit Department shall report to the Audit & Supervisory Committee the results of internal audits, the status of improvements, and the status of evaluations of internal controls related to financial reporting. c. Upon a request from Audit & Supervisory Committee Members designated by the Audit & Supervisory Committee, Directors, Executive Officers, and employees of the Company and Group companies shall report the status of business execution at their respective companies. d. The chairman of the Risk Management Committee shall report the content of reports submitted to the Nomura Real Estate Group Help Line to the Audit & Supervisory Committee Members designated by the Audit & Supervisory Committee. e. Informants in all of the above items shall be protected against receiving adverse treatment based on having reported information. The Company shall bear the expenses deemed necessary for the execution of duties by Audit & Supervisory Committee Members. The Audit & Supervisory Committee may retain attorneys at law, certified public accountants, consultants, or other external advisors as necessary to perform audits. a. The Audit & Supervisory Committee shall periodically exchange opinions with the President. b. Audit & Supervisory Committee Members shall attend meetings of the Executive Committee and other important meeting bodies of the Company, to gather information and express their opinions on the execution of business. c. Audit & Supervisory Committee Members designated by the Audit & Supervisory Committee may ask the Company and Group companies for explanations and reports about the execution of business, and investigate the state of business and finances when necessary. d. The Audit & Supervisory Committee shall closely cooperate with the Accounting Auditor and the Group Internal Audit Department. This cooperation shall include the periodic exchange of opinions and information concerning audits. e. The Group Internal Audit Department shall obtain the consent of the Audit & Supervisory Committee regarding the establishment of internal audit plans. In addition, the Audit & Supervisory Committee may provide the Group Internal Audit Department recommendations and instructions on changes in internal audit plans, additional audits, necessary investigations, etc., when necessary. 7 f. Directors shall consult with the Audit & Supervisory Committee in advance with respect to appointments of responsible personnel in the Group Internal Audit Department. Note: Following a resolution at the Board of Directors meeting held on March 17, 2022, effective April 1, 2022, some changes were made to the details of 3) Rules and other systems for management of risk of loss. The changes are as follows. 3) Rules and other systems for management of risk of loss b. To deliberate business risks, the Company has established a Risk Management Committee comprising Directors, Executive Officers, etc. of the Company and Group companies designated by the Board of Directors as a subordinate body to the Executive Committee, with the Executive Committee set as the core of total risk management, to periodically monitor, assess, and analyze risks, and deliberate basic principles for measures to prevent risks that may occur during corporate management and business development, to respond when risks arise, and to prevent recurrence, in accordance with the Risk Management Regulations and the Meeting Bodies Rules. In addition, the Company has established a Group Risk Meeting comprising Directors, Executive Officers, etc. of Group companies designated by the chairman of the Risk Management Committee to share risk information and response policies within the Group. The Risk Management Committee and Group Risk Meeting shall in principle meet bimonthly or when necessary, respectively, and shall report the content of deliberations to the Board of Directors at least once every six months. The outline of the operational status of the system to ensure the appropriateness of operations in the fiscal year under review is as follows. 1) Compliance 2) Risk management The Group regards compliance, including the observance of laws and regulations and corporate ethics, as one of the most important management issues. As a set of relevant guidelines, the Company has formulated the Nomura Real Estate Group Code of Action. Moreover, the Company has established the Risk Management Committee and Group Legal & Compliance Department in the Company to promote continual education and enlightenment activities for the officers and employees of the entire Group, and to provide support, guidance and monitoring to Group companies. In the fiscal year under review, online compliance training (via live streaming or pre-recorded videos) for officers and employees was held 19 times, in addition to training and enlightenment activities such as e-learning for all officers and employees and the regular distribution of topics, etc. related to compliance. The Group regards risk management as a “business management methodology that aims to improve corporate value by managing all risks related to the attainment of corporate group organizational and business objectives in an integrated and unified manner while controlling risk within the Company’s risk tolerance limits.” With the aim of ensuring the soundness of business management through proper management and operation of risks, the Group has formulated the Risk Management Regulations. Furthermore, to discuss various risks related to group management, the Company set the Executive Committee as the core of total risk management to periodically monitor, evaluate, and analyze the status of major risks, and provide necessary guidance and advice to each business unit and Group company while periodically reporting details to the Board of Directors. Monitoring of “A: Investment risk” and “B: External risk” within the risk categories prescribed in the Risk Management Regulations is carried out by the Executive Committee, which is the core of total risk management. The Risk Management Committee, which was established as a subordinate body of the Executive Committee, periodically monitors, evaluates and analyzes “C: Disaster risk” and “D: Internal risk,” and discusses the basic policy for countermeasures with regard to prevention before occurrence, response in the event of occurrence, prevention of recurrence, etc. In addition, the Company has established a Group Risk Meeting comprising Directors, Executive Officers, etc. of Group companies designated by the chairman of the Risk Management Committee to share risk information and response policies within the Group. During the fiscal year under review, the Risk Management Committee and the Group Risk Meeting held 13 meetings in total. 8 3) Internal audits 4) Sustainability 5) Execution of duties of the Directors The Company has established the Group Internal Audit Department, which works to oversee, monitor and evaluate the internal audit function of the entire Group, as well as perform audits of each department within the Company. Also, results of audits are reported to the Board of Directors, and a system is in place to report results to the Audit & Supervisory Committee, aimed at collaboration with the Accounting Auditor. During the fiscal year under review, audit results were reported to the Board of Directors four times, and reported to the Audit & Supervisory Committee 11 times, thereby sharing both the problems identified through internal audits as well as improvement measures. Furthermore, the Company held 11 meetings with the audit departments of each Group company and carried out joint training sessions twice in order to improve the quality of audits throughout the entire Group and share information. The Company also exchanged information with these departments individually. The Group recognizes that it must fulfill its responsibility to future generations by solving various social issues for the realization of a sustainable society, and promotes sustainability initiatives in the environment and society as a member of society. The Group has established a Sustainability Committee consists of Directors and Executive Officers of the Company (chaired by the President and Representative Director of the Company) which carries out discussions regarding sustainability-related policies, action plans, etc. In the fiscal year under review, the Sustainability Committee meeting was held five times and discussed matters including the formulation of the Sustainability Policy, which clearly verbalized the Group’s vision for 2050. Furthermore, details of the matters discussed were reported to the Board of Directors three times in total, and the Board of Directors made a decision on the “Nomura Real Estate Group Human Rights Policy.” The Board of Directors, in principle, holds its meeting on a monthly basis, decides important corporate matters, such as basic management policies, and supervises the execution of duties by Directors and business operations by Executive Officers. In order to strengthen the supervisory function of the Board of Directors and realize highly fair and transparent management, five out of the 12 Directors are Independent External Directors. The Company has introduced an Executive Officer system aiming to strengthen Group management by separating management oversight and decision-making function from business execution function, both of which have traditionally been the responsibility of Directors, to enhance the execution function. Individual Executive Officers appointed by the Board of Directors execute business based on the administrative authorities delegated in accordance with internal regulations, etc. and based on Company policies determined by the Board of Directors and the directions of the Chief Executive Officer. The Company’s Executive Committee comprises the Chief Executive Officer and Executive Officers nominated by the Board of Directors. The Executive Committee meets once a week in principle, and determines certain matters regarding overall Group company business execution. During the fiscal year under review, the Board of Directors meeting was held 21 times. At these meetings, in addition to deliberating and making decisions about important matters concerning company management, the Board of Directors regularly received reports from Directors and Executive Officers, allowing the Board of Directors to oversee the execution of duties and business. The Executive Committee meeting was held 50 times, and certain matters related to business execution by the Company and Group companies were deliberated and decided upon. The Audit & Supervisory Committee receives regular reports from the internal audit department on the implementation status and results of internal audits. When necessary, the Audit & Supervisory Committee may request a report to Directors, Executive Officers, or business execution departments of the Company or Group companies. The Audit & Supervisory Committee also audits and supervises the execution of duties by Directors and business operations by Executive Officers while cooperating with the Accounting Auditor as needed. Audit & Supervisory Committee Members attend the Board of Directors meetings and other important meetings and request reports from business execution departments as necessary to collect information on the Company’s execution of business operations. The Company has established the Audit & Supervisory Committee Department in order to assist the duties of the Audit & Supervisory Committee and assigns dedicated staff to implement measures for increasing the effectiveness of audit 6) Execution of duties of the Audit & Supervisory Committee 9 operations. During the fiscal year under review, the Audit & Supervisory Committee meeting was held 12 times. 10 Consolidated Financial Statements Consolidated Statement of Changes in Shareholders’ Equity for the year ended March 31, 2022 Share Capital Capital Surplus Treasury Shares Shareholders’ Equity Retained Earnings 118,043 114,433 369,597 (30,125) 571,948 Balance at April 1, 2021 Changes during Period Issuance of New Shares Dividends of Surplus Profit Attributable to Owners of Parent Purchase of Treasury Shares Disposal of Treasury Shares Transfer from Retained Earnings to Capital Surplus Cancellation of Treasury Shares Reversal of Revaluation Reserve for Land Net Changes in Items Other Than Shareholders’ Equity 560 560 27,004 (27,004) (Millions of yen) Total Shareholders’ Equity (8,957) 214 27,004 1,120 (15,515) 55,312 (8,957) 214 – – (7) Total Changes during Period Balance at March 31, 2022 560 118,604 560 114,993 18,260 (11,864) 32,167 604,115 Accumulated Other Comprehensive Income Valuation Difference on Available-for-sale Securities Deferred Gains or Losses on Hedges Revaluation Reserve for Land Foreign Currency Translation Adjustment Remeasure-ments of Defined Benefit Plans Total Accumulated Other Comprehen-sive Income Share Acquisition Rights Non-controlling Interests Total Net Assets 7,827 (1,342) 7,869 (995) (1,979) 11,379 1,406 1,616 586,350 Balance at April 1, 2021 Changes during Period Issuance of New Shares Dividends of Surplus Profit Attributable to Owners of Parent Purchase of Treasury Shares Disposal of Treasury Shares Transfer from Retained Earnings to Capital Surplus Cancellation of Treasury Shares Reversal of Revaluation Reserve for Land Net Changes in Items Other Than Shareholders’ Equity Total Changes during Period Balance at March 31, 2022 1,120 (15,515) 55,312 (8,957) 214 – – (7) (489) (489) 1,009 1,009 (0) (0) 498 498 3,267 3,267 92 92 2,880 35,047 7,337 (332) 7,868 (1,481) 14,646 1,708 621,398 2,249 2,249 1,254 (478) (478) 927 Note: The figures are denoted by rounding fractions down to the unit indicated. (15,515) 55,312 (27,004) (7) 12,785 382,382 11 1. Notes to Significant Matters for the Basis for the Preparation of Consolidated Financial Statements Notes to Consolidated Financial Statements (1) Scope of Consolidation 1) Consolidated subsidiaries Number of consolidated subsidiaries: 42 Names of principal consolidated subsidiaries: The names of principal consolidated subsidiaries are listed in “1. Current status of the Group (3) Status of parent company and major subsidiaries 2) Major subsidiaries” of the Business Report. Nomura Real Estate Consulting (Shanghai) is included in the scope of consolidation because it was newly established in the fiscal year under review, and Musashi Co., Ltd. is included in the scope of consolidation because the Company newly acquired its shares in the fiscal year under review. Nomura Real Estate Consulting (Beijing) Co., Ltd. is excluded from the scope of consolidation due to the completion of liquidation in the fiscal year under review. Nomura Real Estate Urban Net Co., Ltd. changed its corporate name to Nomura Real Estate Solutions Co., Ltd. 2) Unconsolidated subsidiaries Name of principal unconsolidated subsidiary: Reason for the exclusion from the scope of consolidation: Minami Azabu Kaihatsu Co., Ltd. Unconsolidated subsidiaries are excluded from the scope of consolidation because they are all small companies and the Company’s interests in their respective total assets, operating revenue and profit and loss (the amount equivalent to equity shareholdings) as well as retained earnings (the amount equivalent to equity shareholdings) do not significantly affect the consolidated financial statements of the Nomura Real Estate Group (the “Group”). (2) Application of Equity Method 1) Unconsolidated subsidiaries accounted for using the equity method Number of unconsolidated subsidiaries accounted for using the equity method: 2 Name of principal unconsolidated subsidiary: Minami Azabu Kaihatsu Co., Ltd. 2) Affiliated companies accounted for using the equity method Number of affiliated companies accounted for using the equity method: 35 Name of principal affiliated company: Ginza Parking Center Co., Ltd. TOKYO GAS Nomura Real Estate Energy Co., Ltd. is included under affiliated companies accounted for using the equity method because it was newly established in the fiscal year under review. ORIGIN SUKHUMVIT SAILUAT COMPANY LIMITED, ORIGIN RAMINTRA COMPANY LIMITED, PARK RATCHADA COMPANY LIMITED, ORIGIN RAMKHAMHAENG INTERCHANGE COMPANY LIMITED, KNIGHTSBRIDGE KASET INTERCHANGE COMPANY LIMITED, SO ORIGIN PHAHOL 69 STATION COMPANY LIMITED and ORIGIN PLUG&PLAY SAMUTPRAKAN COMPANY LIMITED are included under affiliated companies accounted for using the equity method because the Company newly acquired equity interests in these companies in the fiscal year under review. In addition, ORIGIN SPHERE COMPANY LIMITED and ORIGIN RAMKHAMHAENG COMPANY LIMITED are excluded from the scope of affiliated companies accounted for using the equity method because the Company sold its equity interests in these companies in the fiscal year under review. MCNR SY III Limited is excluded from the scope of affiliated companies accounted for using the equity method due to the completion of liquidation in the fiscal year under review. 12 (3) Fiscal Year, Etc. of the Consolidated Subsidiaries Among consolidated subsidiaries, the account closing date of UNJ Properties, LLC is December 31. The company’s financial statements as of the consolidated account closing date, prepared on a basis similar to that for the year-end closing, are used in the preparation of consolidated financial statements. Among consolidated subsidiaries, the account closing date of NOMURA REAL ESTATE ASIA PTE. LTD., NOMURA REAL ESTATE HONG KONG LIMITED, HCMC office investment Limited, LIM HOLDINGS LTD, Lothbury Investment Management Group Limited and other 12 companies, Zen Plaza Investment Limited, ZEN PLAZA CO., LTD, NOMURA REAL ESTATE VIETNAM CO., LTD, NOMURA REAL ESTATE (THAILAND) CO., LTD, NOMURA REAL ESTATE UK LIMITED, 127 Charing Cross Road Limited and Nomura Real Estate Consulting (Shanghai) is December 31. The account closing date of Midosuji Mirai Development, LLC is February 28. Financial statements for these companies as of that date are used in the preparation of consolidated financial statements. In the case of significant transactions that took place between the account closing date of the consolidated subsidiaries and the consolidated account closing date, necessary adjustments are made for consolidation purposes. (4) Accounting Standards and Methods 1) Valuation standards and methods for principal assets A. Securities Held-to-maturity debt securities: Available-for-sale securities: Securities, other than shares, etc. without a market price Shares, etc. without a market price B. Derivatives C. Inventories 2) Depreciation and amortization method for significant depreciable assets A. Property, plant and equipment (except for leased assets) B. Intangible assets (except for leased assets) C. Leased assets Held-to-maturity debt securities are stated at amortized cost (by the straight-line method). Securities, other than shares, etc. without a market price, are stated at fair market value. (Unrealized gains and losses are reported, net of the applicable taxes, as a separate component of net assets. Cost of securities sold is determined by the moving-average method.) Shares, etc. without a market price are stated at cost by the moving-average method. Derivatives are stated using the market value method. Inventories are mainly stated at cost, determined by the specific identification cost method (the amounts of inventories in the Balance Sheet are determined by the write-down method reflecting decreased profitability). Property, plant and equipment are depreciated mainly by the straight-line method. Useful lives are generally as follows: Buildings and structures 2 to 65 years Intangible assets are amortized by the straight-line method. Costs of software for internal use are amortized based on the useable period within the Company (5 years). Leased assets are depreciated using the straight-line method, assuming the lease period to be the useful life and the residual value to be zero. Of finance lease transactions not involving transfer of ownership, lease transactions which started on or before March 31, 2008 are accounted for in accordance with the method applicable to ordinary lease transactions. 13 3) Standards for the provision of significant allowances A. Allowance for doubtful accounts B. Provision for bonuses C. Provision for bonuses for directors (and other officers) D. Provision for loss on business liquidation E. Provision for share awards 4) Other significant matters for the preparation of consolidated financial statements A. Standards for the recording of retirement benefit liability Method for attributing estimated retirement benefits to periods: Method for amortization of actuarial gains and losses and prior service costs: In order to prepare for possible bad debt losses on notes and accounts receivable – trade, loans and others, allowance for doubtful accounts is provided at an amount calculated on the basis of a historical bad debt ratio for normal claims, and at an estimated uncollectible amount determined on the basis of individual assessments of collectability for specific claims with potential losses. To prepare for the payment of employee bonuses, an estimated amount corresponding to the portion of the bonus payments in the fiscal year under review is reserved. To prepare for the payment of bonuses for directors (and other officers), an estimated amount corresponding to the portion of the bonus payments in the fiscal year under review is reserved. An estimated amount of losses arising in connection with the withdrawal from businesses is reserved. To prepare for the delivery of the Company’s shares to officers and employees pursuant to the share delivery regulation, an estimated cost as of the end of the fiscal year under review is reserved. To calculate retirement benefit liabilities, the estimated amount of retirement benefits is attributed to the period up to the end of the fiscal year under review based on a benefit formula basis. Prior service costs are amortized by the straight-line method over a certain number of years (10 years) within the average number of remaining service years of the eligible employees at the time of accrual. Actuarial gains and losses are amortized by the straight-line method over a certain number of years (mostly 10 years) within the average number of remaining service years of the eligible employees at the time of accrual in each fiscal year, and allocated proportionately from the fiscal year following the respective fiscal year of accrual. Details of the main performance obligations in the principal businesses related to the Group’s revenues from contracts with customers and the usual time at which the performance obligations are satisfied (the usual time at which revenues are recognized) are as follows. In addition, the amount of consideration does not include any significant financial component. i Residential Development Business The residential development business is mainly engaged in the development and sale of condominiums and detached housing (housing sales business) and the development and sale of rental condominiums (sales of property development). For the housing sales business and sales of 14 B. Standards for the provision of significant revenues and expenses Accounting standard for revenue recognition property development, the Company is obligated to hand over the subject property based on the real estate sales contract with the customer, and recognizes revenue at the time the customer obtains control of the property upon handover. In the housing sales business, the Company generally receives a deposit when the contract is concluded and receives payment of the balance at the time of handover, and in the sales of property development, the Company generally receives payment of the purchase price at the time of handover. ii Commercial Real Estate Business The commercial real estate business is mainly engaged in the development, lease and sale of office buildings, retail facilities, logistics facilities and other properties (sales of property development). For the sales of property development, the Company is obligated to hand over the subject property based on the real estate sales contract with the customer, recognizes revenue at the time the customer obtains control of the property upon handover and generally receives payment of the purchase price at the time of handover. Real estate lease revenue is accounted for in accordance with Accounting Standard for Lease Transactions (ASBJ Statement No. 13), and revenue is recognized over the lease term. iii Investment Management Business The investment management business is mainly engaged in providing investment management services including REITs, privately placed real estate funds and real estate securitization. For this business, the Company is obligated to carry out fund management, etc. based on the asset management agreement, etc. with the customer, and revenue is recognized over a certain period of time because control is conveyed to the customer as the service is provided. The revenue is calculated by multiplying the total assets, etc. of the managed fund by the commission rate stipulated in the agreement, and payment is received within approximately three months from the time when the performance obligations are satisfied. iv Property Brokerage & CRE Business The property brokerage & CRE business is mainly engaged in the real estate brokerage business. For this business, the Company is obligated to carry out a series of operations based on the brokerage agreement with the customer, such as the performance procedures from the work for concluding the real estate sales contract to the handover of the subject property, and recognizes revenue at the time of handover of the property in the real estate sales contract concluded through brokerage. The Company generally receives payment of half of the remuneration amount at the conclusion of the real estate sales contract concluded through brokerage, and receives payment of the balance at the handover of the subject property. v Property & Facility Management Business The property & facility management business is mainly engaged in the operation and management of condominiums and office buildings, as well as contracting 15 Basis for the recording of advertising expenses C. Standards for the translation of important foreign currency-based assets or liabilities into Japanese yen for repair and tenant works associated with management. For this business, the Company is obligated to carry out facility management and cleaning, building maintenance and repairs, etc. based on the real estate property management agreement, construction contract, etc. with the customer, and revenue is recognized over a certain period of time because control is conveyed to the customer as the service is provided. However, for construction contracts for which the period from the commencement date of the transaction in the contract to the date the performance obligation is expected to be fully satisfied is very short, revenue is not recognized over a certain period of time. Instead, the Company judges that its performance obligation is satisfied at the time of handover and recognizes revenue at that time. For operation and management, payment is generally received within approximately one month from the time when the performance obligations are satisfied, and for contracting, payment is generally received within approximately three months from the time of handover. In the housing sales business, in order to appropriately reflect revenues and any related expenses, advertising expenses as selling expenses, incurred before the handover of property to customers are recognized as prepaid expenses and collectively expensed upon handover. All foreign currency-based monetary receivables and payables are translated into Japanese yen at the spot exchange rates in effect at the consolidated account closing date. Differences arising from such translation are recognized as gain or loss. The asset and liability accounts of the overseas subsidiaries and others are translated into Japanese yen at the spot exchange rates prevailing at the respective account closing dates of the subsidiaries and others and the revenue and expense accounts are translated into Japanese yen at the average rates of exchange for the year. Differences arising from such translation are presented as “Foreign currency translation adjustment” in Net Assets. Hedging transactions are accounted for using deferral hedge accounting, which requires the unrealized gains or losses to be deferred as assets or liabilities until the losses or gains on the underlying hedged items are recognized. For interest rate swaps that meet certain hedging criteria, the Group applies exceptional treatment and for currency swaps that meet certain hedging criteria, the transactions are accounted for by the furiate (allocation) method. Interest rate swap contracts Currency swaps and foreign exchange forward contracts Borrowings Securities denominated in foreign currencies In accordance with internal rules, interest rate fluctuation and foreign exchange fluctuation risks are hedged. D. Significant hedge accounting method Hedge accounting method: Hedging instruments and hedged items: Hedge policy: 16 Method for assessing the effectiveness of hedges: E. Amortization method and period of goodwill F. Accounting for non-deductible consumption taxes The Group evaluates hedge effectiveness based on the ratio of changes determined by comparing the cumulative changes in cash flows or cumulative market fluctuations of the hedged items to the cumulative changes in cash flows or cumulative market fluctuations of the hedging instrument. However, the Group omits the assessment of hedge effectiveness in the case of interest rate swaps for which the Group applies the exceptional treatment. Goodwill is amortized using the straight-line method over a period of 5 to 20 years. Non-deductible consumption taxes on assets are included in the acquisition costs, and other non-deductible consumption taxes are expensed as incurred. 2. Notes on Changes in Accounting Policies (1) Application of the Accounting Standard for Revenue Recognition The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020), from the beginning of the fiscal year under review. It recognizes revenues for goods or services based on the amount estimated to be received in exchange for such goods or services at the point when control of the promised goods or services is conveyed to the customer. The Company has applied the Accounting Standard for Revenue Recognition transitionally, in accordance with the proviso in paragraph 84 of the standard. The cumulative effect amount, applying with the new accounting policy retrospectively prior to the beginning of the fiscal year under review, was adjusted to retained earnings at the beginning of the fiscal year under review, and the Company has applied the new policy to the balance at the beginning of the fiscal year. As a result, the impact of application of the Accounting Standard for Revenue Recognition on consolidated financial statements for the fiscal year under review is immaterial. Due to the application of Accounting Standard for Revenue Recognition, “Notes and accounts receivable – trade” which were included in “Current assets” in the consolidated balance sheets for the previous fiscal year, are included in “Notes and accounts receivable – trade, and contract assets” from the fiscal year under review. (2) Application of the Accounting Standard for Fair Value Measurement The Company has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019), from the beginning of the fiscal year under review. It has prospectively applied new accounting policies based on the Accounting Standard for Fair Value Measurement, in accordance with the transitional measurement in paragraph 19 of Accounting Standard for Fair Value Measurement and paragraph 44-2 of “Accounting Standard for Financial Instruments,” (ASBJ Statement No. 10, July 4, 2019). The impact of application of the Accounting Standard for Revenue Recognition on consolidated financial statements for the fiscal year under review is immaterial. 17 3. Notes on Accounting Estimates (1) Valuation of Inventories held for sale. Inventories held by the Group mainly consist of property held for housing sale and rental housing 1) Amount recorded in the consolidated financial statements for the fiscal year under review Loss on valuation of inventories: ¥3,022 million 2) Information that contributes to understanding the content of accounting estimates A. Property held for housing sale i Calculation method For property held for housing sale, the net selling value is compared to the book value to calculate a loss on valuation. The net selling value is based on the selling price set in each business plan that is developed at the time of land acquisition, construction order placement, and the start of sales, as well as the cost, and other variables. In addition to the above timings, the net selling value may be changed depending on the business progress or the selling situation. ii Main assumptions The main assumptions used to determine the net selling value are the selling price and the cost. The Company estimates them on the basis of the location, scale, and salability of a property, surrounding cases, market outlook, amount expected from past experience, and other information. The Company assumes that the novel coronavirus disease (“COVID-19”) will pass and not last for a long time and that the effects of the spread of the COVID-19 on housing market conditions will be limited. iii Effects on consolidated financial statements for the next fiscal year Estimation of selling prices and costs, which are the main assumptions, involves uncertainty. The estimates of selling prices may differ from the future results for reasons including any change in housing market conditions, and estimates of costs may differ from the future results for reasons including any change in construction market conditions, additional construction work, or delays in construction. B. Rental housing held for sale i Calculation method For rental housing held for sale, the net selling value is compared to the book value to calculate a loss on valuation. The net selling value is based on the expected selling price set at the time of land acquisition, construction order placement, the start of leasing (recruiting of tenants), and decision of selling, as well as the cost, and other variables. For rental housing held for sale for which there is concern about declining profitability given the progress of tenant leasing, the appraisal value by a real estate appraiser is used as the expected selling price. ii Main assumptions The main assumptions used to determine the net selling value are the expected selling price and the cost. The Company estimates them on the basis of the location, scale, and salability of a property, surrounding cases, market outlook, and rents, occupancy rates, and capitalization rates from past experience, and other information. The Company assumes that the COVID-19 will pass and not last for a long time and that the effects of the spread of the COVID-19 on real estate leasing market conditions and real estate investment market conditions will be limited. iii Effects on consolidated financial statements for the next fiscal year Estimation of expected selling prices and costs, which are the main assumptions, involves uncertainty. The estimates of expected selling prices may differ from the future results for reasons including any change in the market conditions of real estate leasing or investment, and estimates of costs may differ from the future results for reasons including any change in construction market conditions, additional construction work, or delays in construction. 18 (2) Impairment of Non-Current Assets Non-current assets held by the Group mainly consist of office buildings, retail facilities, logistics facilities, hotels and other real estate (“leasable real estate, etc.”) in Japan. 1) Amount recorded in the consolidated financial statements for the fiscal year under review 2) Information that contributes to understanding the content of accounting estimates Impairment losses: ¥568 million i Calculation method If there is an indication that the book value of leasable real estate, etc. may not be recoverable, a determination is made regarding whether or not the property is impaired, and if it is, impairment losses are calculated. (Indication of impairment) estate, etc. is expected to occur significantly The Group considers the following events as indications of an impairment of leasable real Property that reports or is expected to report an operating loss for a second consecutive term Property in which any change that decreases its recoverable amount materially has occurred or Property whose business environment has deteriorated or is expected to deteriorate Property whose market price has significantly declined (around 50% or more) (Recognition and measurement of impairment losses) If the Group determines that there is an indication that a property may be impaired, the Group compares its book value to the total amount of undiscounted future cash flows and deems it necessary to recognize impairment losses if the book value is larger. The Group measures impairment losses for such property as the difference between the book value and the recoverable amount. The recoverable amount of a property is its net selling value or its value in use. Appraisal value by a real estate appraiser or other value is used as the net selling value, and the value in use is calculated by discounting future cash flows. ii Main assumptions The main assumptions used to determine undiscounted future cash flows and the value in use are lease revenue, cost of lease revenue, etc. and discount rates. The Group estimates them on the basis of the location and scale of a property, surrounding leasing cases and market outlook; rents, guest room rates, occupancy rates and capitalization rates from past results; and other information. The Group assumes that the COVID-19 will pass and not last for a long time and that effects of the spread of the COVID-19 on leasable real estate, etc. will be limited. iii Effects on consolidated financial statements for the next fiscal year Estimation of lease revenue, cost of lease revenue, etc. which are the main assumptions, involves uncertainty, and the estimates may differ from the future results for reasons including any change in the market conditions related to leasable real estate, etc. 4. Notes to Consolidated Balance Sheet (1) Pledged Assets and Secured Liabilities Investment securities in the amount of ¥220 million are pledged as collateral for a portion of liabilities of investee companies. (2) Accumulated Depreciation of Property, Plant and Equipment (3) Contingent Liabilities ¥188,192 million 1) Guaranteed Obligations The following are customers for which bank loans, etc. have been guaranteed. The Company and its business partners are under an obligation to guarantee debts of two companies, Origin One Sukhumvit 24 Company Limited and Origin One Phrom Phong Company Limited, according to their capital contribution ratio, and the figures in parentheses below represent the amounts guaranteed by the Company according to its capital contribution ratio. 19 2) Additional Capital Contribution Obligations, etc. The Company has additional capital contribution obligations, etc. to the following subsidiaries and associates according to the capital contribution ratio with business partners in relation to loans received from financial institutions by the companies. The outstanding loans payable by the subsidiaries and associates are as follows, and the figures in parentheses indicate the amount based on the Company’s capital contribution ratio to the companies. Customers using housing loans Joint operators of EBS buildings Haneda Mirai Special Purpose Company Origin One Sukhumvit 24 Company Limited Origin One Phrom Phong Company Limited Total ORIGIN PARK T1 COMPANY LIMITED Origin One Thonglor Co., Ltd. PARK ORIGIN RATCHATHEWI COMPANY LIMITED PARK ORIGIN PRARAM 4 COMPANY LIMITED ORIGIN SUKHUMVIT SAILUAT COMPANY LIMITED ORIGIN RAMINTRA COMPANY LIMITED PARK RATCHADA COMPANY LIMITED ORIGIN RAMKHAMHAENG INTERCHANGE COMPANY LIMITED Total ¥90,456 million ¥166 million ¥65 million ¥866 million (¥424 million) ¥570 million (¥279 million) ¥92,124 million (¥91,391 million) ¥12,740 million (¥6,242 million) ¥2,127 million (¥1,042 million) ¥2,110 million (¥1,034 million) ¥3,693 million (¥1,809 million) ¥553 million (¥271 million) ¥722 million (¥354 million) ¥1,207 million (¥591 million) ¥514 million (¥252 million) ¥23,669 million (¥11,598 million) (4) Revaluation of Land Under the “Act on Revaluation of Land” (Act No. 34 of March 31, 1998), the Company revalued its land held for business use. The tax amount for the valuation difference is accounted for as “Deferred tax liabilities for land revaluation” in Liabilities and the difference net of such tax amount is recorded as “Revaluation reserve for land” in Net Assets. ∙ Method of revaluation: The value of land is determined based on a reasonabl