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## Risk Management Measures and Actions 

## 1. Risks Related to Financial Market 

## 1) Liquidity 

## Automotive 

The automotive business must have adequate liquidity to provide for the working capital needs of day-to- day normal operations, capital investment needs for future expansion and repayment of maturing debt. Liquidity can be secured through internal cash and cash equivalents or external borrowings. As of the end of fiscal year 2011 (March 31, 2012), Nissan’s automotive business had 781 billion yen of cash and cash equivalents (compared with 1,133 billion yen as of March 31, 2011). Cash and cash equivalents balance was exceptionally high as of the end of fiscal year 2010, as Nissan raised cash following the Great East Japan Earthquake as a countermeasure against an uncertain environment. In addition to cash, Nissan had approximately 469 billion yen of committed lines available for drawing as of March 31, 2012. 

As for external borrowings, Nissan raises financing through several sources, including bonds issuance in capital markets, long and short-term loans from banks, commercial paper issuance and committed credit lines from banks. Nissan has a liquidity risk management policy which is intended to ensure adequate liquidity for the business while at the same time ensuring we mitigate liquidity risks, such as unmanageable bunched maturities of debt. 

Target liquidity is defined objectively considering several factors, including debt maturity, upcoming mandatory payments (such as dividends, investments, taxes) and peak operating cash needs. We also benchmark our liquidity targets with other major Japanese corporations and global auto companies to ensure we are reasonable in our assumptions. 

## Sales finance 

Nissan operates captive sales finance companies in Japan, the United States, Canada, Mexico, China, Australia and Thailand. In these countries, banks and other financial institutions are also involved in providing financing solutions to Nissan’s customers and dealers. Additionally, in Europe and other regions, RCI Banque and several other banks / financial institutions are providing financing to Nissan’s customers and dealers. 

We monitor the liquidity of sales finance companies on an ongoing basis to ensure we have adequate liquidity to meet maturing debt and continue operations. As a policy, we target to match the maturity of liabilities with the maturity of assets wherever possible. In some of the countries where we operate, long-term capital markets are not developed, and thus it is not always possible to be perfectly match-funded. Match funding policy allows us to meet maturing debt obligations even in an environment in which we cannot raise additional debt due to the state of capital markets. 

In addition to match funding, we manage liquidity risk at sales financing through several measures, including keeping adequate liquidity in the form of cash and unutilized committed lines, unencumbered assets (mainly vehicle loans and leases), liquidity support from auto operations to the extent we have excess cash in auto operations, diversified funding sources and geographical diversification of capital markets’ access. As of March 31, 2012, sales finance companies’ liquidity 

(cash and unutilized committed lines) was approximately 860 billion yen. Additionally, we have a healthy mix of secured (24.7%) and unsecured and other (75.3%) funding sources which ensure a stronger balance sheet and incremental liquidity through utilization of unencumbered assets. 

The pie chart below describes our diversified funding sources in the sales finance business. During fiscal year 2011, we were able to raise new financings through bank loans, asset- backed securities, asset-backed commercial paper, commercial paper and bonds reflecting our diversified access to financing instruments. 

## SALES FINANCE BUSINESS FUNDING SOURCES 

<img src='content_image/142625.jpg'>

(As of March, 2012) 

