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The Daiwa Securities Group has established a framework of liquidity management that conforms to the standards set by the Basel Committee on Banking Supervision. Specifically, the Group conducts various stress scenarios that consider the repayment periods of existing unsecured debt and the possible market and environmental stresses that might coincide with repayment dates. It then establishes a portfolio which is capable of providing enough liquidity to withstand the events anticipated in the stress scenarios. This portfolio is reviewed on a daily basis, and the liquidity manage- ment framework is designed to ensure that the Daiwa Securities Group would be able to maintain stable operations even in the event that no new unsecured funding could be procured for the space of a full year. As of the end of FY2011, the Daiwa Securities Group’s liquidity portfolio and balance of short-term unsecured debt was as follows: 

## Unsecured Capital Procurement Conditions and Liquidity Portfolio at the Group (As of March 31, 2012) 

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Note: The above does not include assets and liabilities in the banking business. 

As of the end of FY2011, the Daiwa Securities Group’s liquidity portfolio had a balance of ¥1,304.6 billion, and the supplementary liquidity portfolio increases this to ¥2,243.8 billion. This provided a coverage ratio equal to 206.2% of total unsecured short-term debt. 

## Credit Ratings by Major Credit Ratings Agencies 

Daiwa Securities Group Inc. and Daiwa Securities Co. Ltd. have been assigned long-term and short-term credit ratings by major credit ratings agencies. These ratings take into account the impact of multiple factors on the Group’s creditworthiness. Factors consid- ered by the ratings agencies include current macroeconomic condi- tions, the business environment and condition of the securities markets, management strategy, Group management structure, the competitive position of Group companies in their respective mar- kets, profitability, profit volatility, cost structure elasticity, risk man- agement structure, liquidity conditions, capital policy, adequacy of capital, corporate governance, and other issues. 

The securities issued by Daiwa Securities Group Inc. and Daiwa Securities Co. Ltd. in order to obtain funds have also been assigned credit ratings by leading agencies. As of June 30, 2012, the credit ratings assigned were as follows: 

## Daiwa Securities Group Inc. 

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## Daiwa Securities 

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