Daiwa Securities Group Inc
31 May 2006
May 31, 2006
Press Release
Company Name: Daiwa Securities Group Inc.
Representative: Shigeharu Suzuki, President
Contact: Mikita Komatsu, General Manager, Finance Dept.
2-6-4, Otemachi, Chiyoda-ku, Tokyo, 100-8101, Japan
Phone: +813-3243-2100
URL: Http://www.daiwa.jp/ir/english/
Additional information on financial summary
for fiscal year ended March 31, 2006
The Company announces additional information to Consolidated financial summary
and Non-consolidated financial summary for fiscal year ended March 31, 2006
disclosed on April 26, 2006.
(Consolidated financial summary for fiscal year ended March 31, 2006)
(Transactions with related parties)
For Fiscal 2005 (from April 1, 2005 to March 31, 2006)
Not applicable.
(Deferred income tax assets/liabilities)
1. Details of deferred income tax assets and liabilities at March 31, 2006 are
as follows:
Deferred income tax assets Millions of yen
Net operating losses carry-forward 25,656
Write-down of investment securities 10,636
Employee retirement benefits 8,026
Employee compensation and bonuses 15,278
Provision for doubtful accounts 2,422
Loss on impairment of fixed assets 7,247
Enterprise tax payable 8,337
Allowance for possible investment losses 5,425
Other 10,308
Gross deferred income tax assets 93,339
Less: Valuation allowance -51,823
Total deferred income tax assets 41,516
Deferred income tax liabilities
Net unrealized gain on securities 51,926
Other 2,008
Total deferred income tax liabilities 53,935
Net deferred tax liabilities 12,419
2. A reconciliation of difference between the statutory income tax rate and the
effective income tax rate for the year ended March 31, 2006 is as follows:
Statutory income tax rate 40.69%
(Reconciliation)
Valuation allowance -8.98%
Permanent difference (Non-taxable) -0.28%
Permanent difference (Non-deductible) 0.29%
Lower tax rate applicable to income of foreign -0.60%
subsidiaries
Adjustment of unrealized gain 0.58%
Other -1.48%
Effective income tax rate 30.22%
(Securities)
1. Securities held for trading purpose
Trading securities
(Millions of yen)
Type of securities Fiscal 2005 Fiscal 2004
Mar. 31, 2006 Mar. 31, 2005
Assets Liabilities Assets Liabilities
Equities 371,947 99,551 332,397 98,689
Bonds 4,005,131 3,216,833 4,187,216 3,094,627
Commercial paper and certificates 8,032 - 38,283 -
of deposits
Beneficiary certificates 95,498 5,471 130,574 3,315
Other 10,602 - 2,076 -
Changes in the market values -14,343 39,560 24,210 -24,824
reflected in the income statements
for the relevant fiscal year
2. Securities held for non-trading purpose
(1) Trading securities
(Millions of yen)
Category Fiscal 2005 Fiscal 2004
Mar. 31, 2006 Mar. 31, 2005
Carrying Amount 3,542 -
Changes in the market values 336 -
reflected in the income
statements for the relevant fiscal
year
(2) Held-to-maturity debt securities for which market value is available
(Millions of yen)
Type of securities Fiscal 2005 Fiscal 2004
Mar. 31, 2006 Mar. 31, 2005
Carrying Market value Difference Carrying Market value Difference
Amount Amount
Securities with market value 2,509 2,501 -7 2,125 2,118 -7
not greater than carrying
amount
Government bonds, local 2,509 2,501 -7 2,125 2,118 -7
government bonds, etc.
Corporate Bonds - - - - - -
Other - - - - - -
(3) Other securities for which market value is available
(Millions of yen)
Type of securities Fiscal 2005 Fiscal 2004
Mar. 31, 2006 Mar. 31, 2005
Cost Carrying Difference Cost Carrying Difference
Amount Amount
Securities with carrying 91,726 214,385 122,658 78,307 142,904 64,596
amount greater than cost
Equities 81,355 202,067 120,712 70,942 134,810 63,868
Bonds 150 158 8 150 152 2
Government bonds, local - - - - - -
government bonds, etc.
Corporate Bonds - - - - - -
Other 150 158 8 150 152 2
Other 10,220 12,159 1,938 7,215 7,940 724
Securities with carrying 4,635 4,373 -261 9,933 9,103 -830
amount not greater than cost
Equities 1,137 1,059 -77 3,451 2,933 -518
Bonds - - - - - -
Government bonds, local - - - - - -
government bonds, etc.
Corporate Bonds - - - - - -
Other - - - - - -
Other 3,498 3,314 -183 6,482 6,170 -311
(Note) The difference between market value and the carrying amount is recognized
as loss in the period of the decline. (2 million yen for Fiscal 2004 and 42
million yen for Fiscal 2005)
If the market value of securities declines significantly (by more than 50% of
its cost), the loss is recognized for the difference between its market value
and the carrying amount. If the market value of securities declines by between
30% to 50% of its cost, the possibility of recovery of market value is tested
based on factors including the movements of share prices for the past 2 years
and financial conditions of the issuer, and the loss is recognized in case it is
deemed that the possibility of recovery of market value is remote.
(4) Other securities sold during Fiscal 2004 and Fiscal 2005
(Millions of yen)
Category Fiscal 2005 Fiscal 2004
Apr. 1, 2005-Mar. 31, 2006 Apr. 1, 2004-Mar. 31, 2005
Sales amount 30,237 61,218
Total gain on sale 14,472 10,207
Total loss on sale 1,608 1,834
(5) Securities that do not have market value and their carrying amount
(Millions of yen)
Type of securities Fiscal 2005 Fiscal 2004
Mar. 31, 2006 Mar. 31, 2005
Carrying Amount Carrying Amount
Other securities 409,626 164,450
Equities 253,178 60,020
Bonds 659 741
Limited partnership and 133,157 84,621
similar partnership
Other 22,630 19,066
(6) Maturity profile of other securities with maturities and held-to-maturity
debt securities
(Millions of yen)
Type of securities Fiscal 2005 Fiscal 2004
Mar. 31, 2006 Mar. 31, 2005
Less than 1 to 5 5 to 10 Greater Less than 1 to 5 5 to 10 Greater
years years than 10 years years than 10
1 year years 1 year years
Bonds
Government 2,509 - - - 2,125 - - -
bonds,
Local government
bonds, etc.
Corporate bonds 155 313 - - 112 239 - -
Other - 158 - - - 152 - -
Other - 799 - - - 542 - -
Total 2,664 1,270 - - 2,238 934 - -
(Non-consolidated financial summary for fiscal year ended March 31, 2006)
(Deferred income tax assets/liabilities)
1. Details of deferred income tax assets and liabilities at March 31, 2006 are
as follows:
Deferred income tax assets Millions of yen
Write-down of investment in subsidiaries 73,353
Write-down of investment securities 9,196
Provision for doubtful accounts 3,805
Net operating losses carry-forward 3,270
Other 2,523
Gross deferred income tax assets 92,149
Less: Valuation allowance -91,584
Total deferred income tax assets 564
Deferred income tax liabilities
Net unrealized gain on securities 38,739
Total deferred income tax liabilities 38,739
Net deferred tax liabilities 38,174
2. A reconciliation of difference between the statutory income tax rate and the
effective income tax rate for the year ended March 31, 2006 is as follows:
Statutory income tax rate 40.69%
(Reconciliation)
Valuation allowance -76.88%
Permanent difference (Non-taxable) -27.64%
Permanent difference (Non-deductible) 1.17%
Inhabitant tax on per capita basis 0.03%
Effective income tax rate -62.62%
This information is provided by RNS
The company news service from the London Stock Exchange