we set after benchmarking others with A+ ratings. This is also the reason we changed our ROIC formula. Previously, cash on hand was one of the denominators in our formula, which meant that higher cash on hand led to lower ROIC. We do not want to penalize liquidity improvements. Obviously, cash is a funding source that enables us to invest in opportunities such as R&D in a flexible way. Liquidity can also have a significant impact on our  sales financing business, which requires large amounts of cash to operate. There has been a high degree of inter- company loans to the sales finance companies, but that strategy will change after our rating improves. With a higher rating we can develop diversified sources of funding. We will strive to achieve a healthy balance between the diversification of funds and cost efficiencies by utilizing sound financial management. In terms of the commitment under NISSAN Value-Up, we must maintain a 20 percent ROIC on average over the course of the plan. I believe that Treasury can continue to play a key role in managing working capital. What we did especially well under NISSAN 180 was to improve our supply chain management. With the information from the new supply chain management system, we succeeded in converting our working capital into cash much faster  than before.  However, our inventory increased in fiscal 2004. There are two reasons for this. First, we increased our inventory to prepare for the spring season. As evidenced by the strong sales volume so far in fiscal 2005, it appears that our decision was correct. The second reason was the consolidation of new companies, whose operations are not yet as efficient as Nissan’s. I believe, though, that we can apply our methodology to these newly consolidated companies. We will focus on reducing working capital on  a consolidated basis. We will not change our commitment to the NISSAN Value-Up dividend plan. Our dividend policy is transparent because we have already announced our dividends for the next three years. I believe that this benefits our Consolidated automotive working capital/consolidated automotive turnover * Same scope pf consolidation as P&L, excluding change of cash compared  to fiscal year 2003 shareholders in forecasting the return for Nissan’s shares. We want to encourage more long-term investors, and dividends are the way to do that. Concurrently, we have also been repurchasing stock from the market, primarily  for stock option purposes. We will continue this to some extent, because we may have M&A and other opportunities. With global expansion, we must extend financing to new areas. This means that we have to move to a second phase in the development of our Global Treasury Center. For example, the use of leading competitive countries will create a more complex cash flow due to foreign exchange exposure. We’ve opened an office in Singapore as a  first step. In our drive to become a world-class Treasury function, we evaluate our performance in comparison to worldwide best practices. This provides an objective assessment of our operation. Investors also provide us with objective evaluations. To receive feedback from the latter, we must be transparent, and also pay attention to the signals from the capital market. I believe that is the most effective way to enhance shareholders’ value.” Working Capital Management 10 8 (%) 6 4 2 0 ’00 ’01 ’02 ’03 ’04 NISSAN Company A Company B 9.0 7.6 5.8 4.0 3.6 3.1* Nissan Annual Report 2004 55