Audi 2013 Annual Report Download - page 274

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
ADDITIONAL DISCLOSURES
CONSOLIDATED FINANCIAL STATEMENTS
271
B
Hedging relates principally to significant quantities of the com-
modities aluminum and copper. Contracts are concluded exclu-
sively with first-rate national and international banks whose
creditworthiness is regularly examined by leading rating agen-
cies and Central Risk Management at Volkswagen AG.
Commodity price risks are also calculated using sensitivity
analyses. Hypothetical changes in listed prices are used to
quantify the impact of changes in value of the hedging trans-
actions on equity and on profit after income tax.
// INTEREST RATE RISKS
Interest rate risks stem from changes in market rates, above all
for medium and long-term variable interest rate assets and
liabilities.
The Audi Group limits interest rate risks, particularly with regard
to the granting of loans and credit, by agreeing fixed interest
rates and also through interest rate swaps.
The risks associated with changing interest rates are presented
pursuant to IFRS 7 using sensitivity analyses. These involve
presenting the effects of hypothetical changes in market inter-
est rates as of the balance sheet date on interest payments,
interest income and expenses, and, where applicable, equity
and profit after tax.
// RESIDUAL VALUE RISKS
Residual value risks arise from hedging arrangements with the
retail trade or partner companies according to which, in the con-
text of buy-back obligations resulting from concluded lease
agreements, effects on profit caused by market-related fluctu-
ations in residual values are partly borne by the Audi Group.
The hedging arrangements are based on residual value recom-
mendations, as published by the residual value committee at
the time of the contract being concluded, and on current dealer
purchase values on the market at the time of the residual value
hedging being settled. The residual value recommendations
are based on the forecasts provided by various independent
institutions using transaction prices.
Residual value risks are also calculated using sensitivity ana-
lyses. Hypothetical changes in the market prices of used cars
as of the balance sheet date are used to quantify the impact
on profit after tax.
// QUANTIFYING CURRENCY RISKS BY MEANS OF
SENSITIVITY ANALYSES
If the functional currencies had in each case increased or
decreased in value by 10 percent compared with the other
currencies as of the balance sheet date, the following major
effects on the hedging provision in equity and on profit would
have resulted with regard to the currency relations from hedg-
ing activities referred to below.
EUR million Dec. 31, 2013 Dec. 31, 2012
+10% –10% +10% –10%
EUR/JPY
Hedging reserve 79 –79 165 –165
Profit after tax –2 2 –1 1
EUR/USD
Hedging reserve 587 –559 761 –761
Profit after tax –66 79 –69 69
EUR/GBP
Hedging reserve 307 –307 403 –403
Profit after tax 0 0 0 0
EUR/CNY
Hedging reserve 245 –245 276 –276
Profit after tax –61 61 –17 17