Porsche 2006 Annual Report Download - page 23

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Porsche China Hongkong Limited was also founded
in August 2007. In July, the purchase agreement for
Jebsen and Company Limited had been signed which
will commence import operations as Porsche China.
Porsche China Hongkong will work as importer from
January 2008.
As of September 1, 2007, Porsche Deutschland
also acquired the two Berlin car dealerships of the
Eduard-Winter group; the group will withdraw from
the automotive business. The newly founded Porsche
Niederlassung Berlin GmbH and Porsche Nieder-
lassung Berlin-Potsdam GmbH took over the 80
employees of the car dealerships. In September,
Porsche also opened the new headquarters of
the Russian subsidiary in Moscow and also a new
Porsche center. 90 employees work in the building
that covers an area of 7,300 m2. Capital expendi-
tures in the flagship operation came to around
17 million Euro.
Thanks to Employees, Business Associates
and Shareholders
Once again, the reporting year called for exceptional
commitment on the part of Porsche’s employees in
all divisions, in Germany and abroad. The large number
of vehicles produced, the preparation of the new models
and the worldwide presentation of the new Cayenne,
the 911Targa and the Turbo Cabriolet to journalists,
dealers and customers posed special challenges. The
same holds true of other selling tasks and develop-
ment work, for instance for the Gran Turismo Panamera.
The Executive Board would like to thank all those
involved for their dedication. As a token of apprecia-
tion, as in previous years, all those staff members
who are covered by collective bargaining agreements
and have been with the company for at least a year
will share in the good operating result.
We would also like to thank our shareholders, who
have once again displayed their trust in the com-
pany’s excellent prospects, the employees’ elected
representatives, who worked together with the man-
agement on far-reaching strategic decisions, as well
as our suppliers and business associates in the sales
organizations. Without their support it would not have
been possible for Porsche to achieve its ambitious
goals, let alone to far outperform these goals.
Opportunities and Risks to Future Development
According to § 91 Paragraph 2 German Stock
Corporation Act (AktG), Porsche is required to oper-
ate a risk management and early warning system.
The German Commercial Code also calls for reports
to be issued on future developments and the oppor-
tunities and risks associated with them. Annual plan-
ning meetings are held to examine and evaluate the
opportunities and risks associated with all business
activities. The degree to which the objectives from
the planning rounds are fulfilled is monitored during
the year by the reporting system. If any changes
to or deviations from the market or competitive
situation develop, the monitoring system records
and analyzes them immediately, supplying details
without delay to the company’s decision-makers.
This procedure allows negative trends to be identi-
fied without loss of time and immediate counter-
measures to be taken. In addition to the regular
reporting process, internal ad-hoc reporting takes
place if unexpected risks occur. The risk manage-
ment and internal audit functions monitor the pro-
cesses at Porsche for risks and opportunities. The
adequacy and efficiency of the risk management
and early warning systems is constantly monitored
and documented. Where potential for improvement
is detected, action is coordinated with the Executive
Board and implemented.
Continuous Monitoring of Business Processes
The auditors have confirmed that the Porsche risk
early warning system is in line with the legal require-
ments of § 91 Paragragh 2 AktG and that the system
has not indicated the presence of any occurrences at
Porsche that could have a significant and lasting
effect on the company’s net assets, financial posi-
tion and results of operations. Risks can never be
completely eliminated. Natural catastrophes or an
escalation of terrorist activities, potential pandemics
or legislative changes for taxes and customs in indi-
vidual export markets could affect sales of Porsche
vehicles. Another risk that could negatively impact
04 ⁄ 05 05 ⁄ 06 06 ⁄ 07
9,000
7,500
6,000
4,500
3,000
1,500
3,420 5,338 9,481
Equity
in million Euro