Porsche 2008 Annual Report Download - page 219

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(prior year: €8 million higher). If market interest rate had been valued 100 base points lower as of
31 July 2009, the profit would have been €60 million higher (prior year: €6 million lower).
4.2.1.3 Stock price risk
Stock price derivatives were entered into at the Porsche subgroup in connection with the originally
planned step-up of the share in Volkswagen AG. These are stock options (prior year: to a lesser
extent also equity forward contracts). Based on a historical simulation of the last 360 days and a
retention period of 10 days and confidence level of 95% and based on fair values, the value at risk
for stock price derivatives amounted to €1,237 million (prior year: €1,834 million).
As of the balance sheet date, Porsche SE was in the latter stage of negotiations about the sale of
significant volumes of stock options. The sale shortly after the balance sheet date led to a signifi-
cant decrease in the value at risk from stock price hedging. Taking into account the sale that took
place after the balance sheet date, it amounts to €180 million.
4.2.1.4 Investment risk from asset management
Porsche has invested part of its liquid assets in special securities funds. Here too, Porsche’s
investment policy complies with the basic principle that investment security takes clear prece-
dence over any attempt to secure an unusually high return on investment. With a retention period
of 30 days and a confidence level of 95%, the value at risk for the investment risk came to €1
million (prior year: €6 million).
4.2.2 Market risk in the financial services division
In the financial services division, the interest risk is minimized by using suitable business models or
interest swaps to offset the burdens of financing and refinancing as far as possible. In this seg-
ment, there is therefore no material risk due to interest rate fluctuations. The business activity of
the financial service companies takes place in the local currency area, which is why the currency
risk is not material.
4.3 Volkswagen subgroup
4.3.1 Market risk in the automotive division
4.3.1.1 Foreign currency risk
Currency risks from current receivables and liabilities as well as from highly probable forecast
transactions are hedged with forward exchange contracts, currency options, currency swaps and
cross-currency swaps where this makes economic sense. These transactions relate to the ex-
change rate hedging of all payments covering general business activities that are not made in the
functional currency of the respective group companies. The principle of matching currencies applies
to the group’s financing activities. Hedges for value fluctuations in future cash flows from highly
probable forecast transactions mainly relate to planned revenues in foreign currency. As of 31 July
2009, currency hedges are in place in particular for the major currencies US dollar, pound sterling,
Mexican peso, Russian rouble, Swedish krone, Czech koruna, Swiss franc and Japanese yen.