Porsche 2012 Annual Report Download - page 118

operations of the Porsche SE group since the date
of the contribution. Correspondingly, risks that have
hitherto existed from these options, which both com-
panies granted each other, no longer exist. The reten-
tion mechanism agreed with Volkswagen AG within
the scope of the option agreement has expired.
Following receipt of the consideration of 4.5 bil-
lion euro from Volkswagen AG and the repayment in
full of the drawn syndicated loan, Porsche SE in-
tends to use the major portion of the liquidity re-
maining to acquire strategic investments focusing
along the automotive value chain. Due to the in-
vestment of this cash in the interim, there are coun-
terparty risks in terms of credit risks and interest
rate risks, similar to the risks pertaining to other
cash and cash equivalents. To mitigate the risk,
Porsche SE monitors the creditworthiness of the
counterparties. Moreover, the cash is invested with
different counterparties in order to spread risk.
The use of fixed-interest financial liabilities re-
sults in the risk of the fair value of these liabilities
changing due to changes in market interest rates.
There is also the risk of the fair value changing due
to changes in market interest rates with regard to
cash and cash equivalents invested by Porsche SE
at a fixed interest rate, although the risk is already
considerably mitigated by the short-term nature of
the investment. In both cases, there are no effects
on the results of operations, net assets and financial
position.
For the risks from financial covenant rules re-
garding the syndicated loan concluded in October
2011, please refer to “Risks originating from finan-
cial covenants” in this section of the management
report.
Porsche SE’s executive board now expects the
risks arising from the use of financial instruments to
be low overall.
For further information on financial risk man-
agement, and on the financial instruments used,
please also refer to note [21] of the consolidated
financial statements of Porsche SE as of 31 De-
cember 2012.
Further risks in connection with the creation of
the integrated automobile group
As part of the basic agreement and the associated
agreements implementing it, Porsche SE entered
into a number of agreements with Volkswagen AG
and entities of the Porsche Holding Stuttgart GmbH
group. The rules of the basic agreement were up-
dated in the course of the contribution of the hold-
ing business operations of Porsche SE to
Volkswagen AG and in some cases supplemented.
For further details, we refer to our disclosures on
related parties in note [26] of the consolidated fi-
nancial statements of Porsche SE as of 31 Decem-
ber 2012. The company’s executive board considers
the risk that the agreements made could have a
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Group management report
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