Porsche 2012 Annual Report Download - page 117

If the financial position and results of opera-
tions of the Volkswagen group were to deteriorate
materially, this could lead to an impairment loss
being recorded on the significant investment in
Volkswagen AG recognized in Porsche SE’s con-
solidated financial statements and could reduce
the profit or loss reported by the Porsche SE
group. In order to ascertain any need to record an
impairment, the company prepares its own evalu-
ations regularly and the assessments made by
analysts are additionally monitored. Moreover,
Porsche SE would carry out further impairment
testing if there were an indication that this asset
may be impaired. Porsche SE’s valuations are
based on a discounted cash flow method and
take into consideration the most recent plans
approved by the management of Volkswagen AG.
Cash flows are discounted using a weighted cost
of capital derived from a peer group. There were
no indications of a need to record an impairment
loss as of 31 December 2012.
Risk arising from the use of financial
instruments
In its business activities Porsche SE is exposed
to risks arising from the financial instruments
used.
The principles and responsibilities for managing
and controlling these risks are defined by the ex-
ecutive board and monitored by the supervisory
board. The risk controlling processes implemented
in particular govern the ongoing monitoring of the
liquidity situation in the Porsche SE group, the
development of interest levels on the capital mar-
kets and monitoring of the financial covenants.
Porsche SE’s risk controlling ensures that risks are
identified, analyzed and monitored using suitable
information systems. Transactions may only be
concluded in permitted financial instruments and
only with approved counterparties.
Derivative financial instruments used by
Porsche SE related to the sale of the remaining
shares in Porsche Holding Stuttgart GmbH.
Up to the contribution of Porsche SE’s holding
business operations to Volkswagen AG, most of the
Porsche SE group’s receivables were due from
companies in the Porsche Holding Stuttgart GmbH
group. As part of the contribution, these receivables
were transferred directly or indirectly to Volkswagen
AG. As a result, there will be no direct default risk
for Porsche SE in the future.
In addition to the share in Porsche’s business
operations, and thus in the Porsche Holding
Stuttgart GmbH group, the put and call options
relating to the shares in Porsche Holding Stuttgart
GmbH previously remaining at Porsche SE were a
particular part of the contribution of the holding
business operations of Porsche SE to Volkswagen
AG. The put and call options terminated with the
execution of the transaction. These therefore have
no further effects on the net assets and results of
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