Nissan 2009 Annual Report Download - page 56

Download and view the complete annual report

Please find page 56 of the 2009 Nissan annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 87

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87

Prior fiscal year Current fiscal year
From April 1, 2007 From April 1, 2008
[
To March 31, 2008
][
To March 31, 2009
]
(4) Risk management for derivative transactions
All risk hedge operations of the Group are carried out
pursuant to the Rule which stipulates the Group’s basic
policies for derivative transactions, management policies,
management items, procedures, criteria for the selection of
counterparties, and the reporting system, and so forth. The
Rule prescribes that the Group’s financial market risk is to
be controlled by the Company in a centralized manner, and
that no individual subsidiary is permitted to initiate a hedging
operation without the prior approval of, and regular reporting
back to the Company.
The basic hedge policy is subject to the approval of the
Monthly Hedge Policy Meeting attended by the Chief
Financial Officer. Execution and management of all deals
are to be conducted pursuant to the Rule. Derivative
transactions are conducted by a special section of the
Finance Department and monitoring of the balance of all
open positions and confirming balances are the
responsibility of the Accounting Section and the Risk
Management Section. Commodity futures contracts are to
be handled by Finance Department under guidelines which
are to be drawn up by the RMC (Raw Material Committee).
The RMC is chaired by the corporate officer in charge of the
Purchasing Department and the Chief Financial Officer and
it will meet approximately once every six months.
The status of derivative transactions is reported on a daily
basis to the Chief Financial Officer and on an annual basis
to the Board of Directors.
Credit risk is monitored quantitatively using RF’s rating
system based principally on the counterparties’ long-term
credit ratings and on their shareholders’ equity. The Finance
Department sets a maximum upper limit on positions with
each of the counterparties for the Group and monitors the
balances of open positions every day.
(5) Supplemental explanation on quantitative information
1) The fair value and unrealized gain or loss on derivative
transactions are estimates which are considered
appropriate based on the market at the balance sheet
date and, thus, fair value is not necessarily indicative of
the actual amounts which may be realized or settled in
the future.
2) The notional amounts of the swaps are not a direct
measure of the Company’s risk exposure in connection
with its swap transactions.
(4) Risk management for derivative transactions
Same as the prior fiscal year.
(5) Supplemental explanation on quantitative information
1) Same as the prior fiscal year.
2) Same as the prior fiscal year.
54 Nissan Annual Report 2009