Audi 2008 Annual Report Download - page 221

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The share capital of AUDI AG is EUR 110,080,000.00. One share grants an arithmetical share of
EUR 2.56 in the company’s capital. This capital is divided into 43,000,000 no-par bearer shares.
The capital reserves contain premiums paid in connection with the issuance of shares of the
Company. In the year under review, capital reserves rose to EUR 1,617 million as a result of a
contribution in the amount of EUR 706 million by Volkswagen AG (Wolfsburg) to the capital
reserve of AUDI AG.
The opportunities and risks under foreign exchange contracts, currency option transactions and
commodity price hedging transactions serving as hedges for future cash flows are deferred in
the reserve for cash flow hedges with no effect on the Income Statement. When the cash flow
hedges become due, the results from the settlement of the exchange-rate hedging contracts are
reported under other operating income or expenses.
Unrealized gains and losses from the measurement at fair value of financial assets available for
sale are recognized in the reserve for the market-price measurement of securities. Upon dis-
posal of the securities, share price gains and losses realized are reported under the financial
result.
Adjustments to actuarial assumptions on retirement benefit obligations, with no effect on
income, are recognized in the provisions for pensions and similar obligations.
Pursuant to IAS 28.39, foreign currency translation differences that do not affect income from
the accounting of FAW-Volkswagen Automotive Company, Ltd. (Changchun, China) using the
equity method were included in the reserve for investments accounted for using the equity
method.
The shares held by minority interests in the equity capital can be broken down as follows, with
each shareholder holding 100 percent of the shares in the listed companies and to whom the
result achieved by the company is attributable:
Fully consolidated group company Minority interests
AUDI BRUSSELS S.A./N.V., Brussels (Belgium) Volkswagen AG, Wolfsburg
Audi of America, LLC, Herndon (USA) VOLKSWAGEN GROUP OF AMERICA, INC., Herndon (USA)
Audi Canada Inc., Ajax (Canada) Volkswagen Group Canada, Inc., Ajax (Canada)
The balance of EUR 948 (242) million remaining after the transfer of profit to Volkswagen AG is
allocated to the other retained earnings.
Stock option plan
Under the stock option plan of Volkswagen AG (Wolfsburg), the members of the Board of Man-
agement and selected senior managers of the Audi Group were granted the right to acquire
stock options for shares of Volkswagen AG by subscribing convertible bonds.
In the 1999 to 2006 fiscal years, a total of eight tranches of the stock option plan were issued.
The stock option plan was not extended for the period beyond 2006.
Each convertible bond may be converted into ten ordinary shares. Conversion may take place for
the first time after a qualifying period of 24 months and then until a period of five years from
the date of issuance of the convertible bond has elapsed. For details relating to the terms of
subscription and exercise, please refer to the notes on equity in the Annual Report of Volks-
wagen AG.
The convertible bonds are measured at fair value at the time of issue; in accordance with the
transitional provisions of IFRS 2, only convertible bonds granted after publication of the draft
standard on November 7, 2002, are affected. The fair value of the convertible bonds is deter-
mined using a binomial option pricing model, and reported as personnel costs on a pro rata
basis over the 24-month qualifying period and under other changes in equity for AUDI AG. In
conjunction with the eighth and final tranche of the stock option plan, expenses of EUR 0.2
million were incurred for the last time in 2008. The corresponding expense for the previous
fiscal year was EUR 0.5 million.