Audi 2013 Annual Report Download - page 262

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
ADDITIONAL DISCLOSURES
CONSOLIDATED FINANCIAL STATEMENTS
259
B
ADDITIONAL DISCLOSURES
35 / CAPITAL MANAGEMENT
The primary goal of capital management within the Audi Group
is to assure financial flexibility in order to achieve business and
growth targets, and to enable continuous, steady growth in the
value of the Company. In particular, management is focused
on achieving the minimum return demanded by the capital
market on the invested assets. The capital structure is steered
specifically with this in mind, and the economic environment is
kept under constant observation. The targets, methods and
procedures for optimizing capital management remained
unchanged at December 31, 2013. For this purpose, the devel-
opment of key cost and value factors are analyzed regularly;
appropriate optimization measures are then defined and their
implementation is monitored on an ongoing basis. To ensure
that resources are deployed as efficiently as possible, and to
measure success in this regard, the Audi Group has been using
the return on investment as an indicator based on capital
expenditure for several years now.
// DEVELOPMENT OF CAPITAL
EUR million Dec. 31, 2013 Dec. 31, 2012 1)
Equity 18,565 15,092
as % of total capital 41.1 37.4
Financial liabilities from profit transfer 4,595 5,103
of which current financial liabilities 1,228 1,168
of which non-current financial liabilities 186 145
of which liabilities from the transfer of profit 3,182 3,790
as % of total capital 10.2 12.6
Balance sheet total 45,156 40,401
1) Figures have been adjusted to reflect the revised IAS 19.
Around 99.55 percent of the subscribed capital is held by
Volkswagen AG, with which a control and profit transfer
agreement exists.
In the 2013 fiscal year, equity rose by 23.0 percent compared
to the prior year. This is primarily due to the allocation to the
retained earnings and a cash injection to the capital reserve by
Volkswagen AG.
36 / ADDITIONAL DISCLOSURES ON FINANCIAL
INSTRUMENTS IN THE BALANCE SHEET
36.1 / FINANCIAL INSTRUMENTS MEASURED
AT FAIR VALUE
Measurement of financial instruments at fair value is based on
a three-level hierarchy and on the proximity of the measurement
factors used to an active market. An active market is one in
which homogeneous products are traded, where willing buyers
and sellers can be found for them at all times, and where their
prices are publicly available.
Level 1 involves the measurement of financial instruments,
such as securities, listed on active markets.
Level 2 involves the measurement of financial instruments such
as derivatives based on market-related, acknowledged financial
valuation models, where the measurement factors, such as
exchange rates or interest rates, can be observed directly or
indirectly on active markets.
In the Audi Group, level 3 mainly covers residual value hedging
arrangements with the retail trade. The input factors for mea-
suring the future development of used car prices cannot be
observed on active markets; they are forecast by various inde-
pendent institutions. The residual value hedging model is
explained in Note 37.4, “Market risks.”
Furthermore, non-current commodity futures are also measured
according to level 3, as the key parameters for their measure-
ment cannot be observed on active markets owing to the long-
term nature of the contracts, but are extrapolated. During the
previous year, rights to acquire shares in companies were also
assigned to fair value level 3, at which input factors that are
not derived from active markets can be used for measurement.