Porsche 2004 Annual Report Download - page 19

15
Thanks to Employees, Business Associates
and Stockholders
In the 2004/05 fiscal year, exceptional demands were once again
made of Porsche employees in all operating areas both at home
and abroad. A further increase in sports car production volume, pre-
parations for new model versions and the worldwide presentation of
the new Boxster and the all-wheel-drive versions of the 911 to journa-
lists, dealers and customers all represented special challenges. A
similar situation applied to additional sales and development work.
The Executive Board wishes to thank all those concerned for their
exceptional dedication to the tasks entrusted to them. As a token of
our appreciation, as in previous years, all employees paid accord-
ing to negotiated rates who have been with the company for at least
one year will receive a bonus payment to enable them to participate
in the company’s good results.
We also wish to thank the stockholders, who have yet again shown
their confidence in the company’s promising future prospects, the
employees’ elected representatives, who have reached agreement
with company management on far-reaching strategic decisions,
especially those concerning location assurance and model policy,
our suppliers and our business associates in the sales organizations.
It is only with their energetic support that Porsche has been able to
achieve its ambitious targets.
Future Development Risks
According to § 91 Paragraph 2 German Stock Corporation Act (AktG),
Porsche is required to operate a risk management and early warning
system. Trade law also calls for reports to be issued on future de-
velopments and the opportunities and risks associated with them.
Annual planning meetings are therefore held to examine and evaluate
the chances and risks associated with all business activities. Objec-
tives are then drawn up and the degree to which they are fulfilled is
monitored during the year by the Group-wide controlling and report-
ing system. If any changes to or deviations from the market or com-
petitive situation develop, this monitoring system records and ana-
lyzes them immediately, as well as supplying details without delay
to the company’s decision-takers. This procedure allows negative
trends to be identified 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 company’s Risk Management and Internal Auditing business
areas monitor the applicability and efficiency of the entire risk mana-
gement system centrally. If scope for improvement is detected,
details are supplied without delay to the Executive Board and the
improvements then implemented. This monitoring process also
includes the continuous documentation of all risk management and
early warning activities and examination of their suitability and
practicability.
Continuous Monitoring of Business Processes
The auditors of the financial statements have, as in previous fiscal
years, evaluated the early warning system as implemented in the
reporting year, and confirmed that it complies with legal require-
ments 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 assets or its financial and earnings situation.
Risks can never be completely eliminated. Natural catastrophes or
an escalation of terrorist activities could affect sales of Porsche
vehicles. Recessionary changes to the economic environment also
influence the demand for consumer durables and thus the sales of
our products: the North American and German markets, as the
largest sales regions, are particularly critical for Porsche. By means
of continuous, intensive market observation, however, and the early
warning indicators that it has installed, Porsche is able to identify
any incipient drop in sales without undue delay, and modify its pro-
duction plans or divert sales flows as a means of limiting the negative
effects with which the company would otherwise be confronted.
In the financial area, Porsche’s strategy is to hedge in the medium
term against movements of the most important foreign currencies
and to ensure a stable basis for its planning, taking the Group’s
medium- and long-term sales targets for vehicles, Tequipment, spare
parts and Selection articles into account. To protect itself against
Percentage return on sales before tax
00 ⁄ 01 01 ⁄ 02 02 ⁄ 03 03 ⁄ 04* 04 ⁄ 05*
20
15
10
5
Equity in million Euro
00 ⁄ 01 01 ⁄ 02 02 ⁄ 03 03 ⁄ 04* 04 ⁄ 05*
3,600
2,700
1,800
9,00
*Now calculated according to IFRS *Now calculated according to IFRS