Porsche 2007 Annual Report Download - page 22

Opportunities and risks of future development
According to Sec. 91 (2) AktG [“Aktiengesetz”:
German Stock Corporation Act], Porsche is requir-
ed to operate a risk management and early warning
system. The German Commercial Code also calls
for reports to be issued on future developments
and the opportunities and risks associated with
them. Annual planning meetings are held to examine
and evaluate the opportunities and risks associat-
ed with all business activities. The degree to which
the objectives from the planning rounds are fulfill-
ed is monitored during the year by the reporting
system. If any changes to or deviations from the
market or competitive situation develop, the moni-
toring system records and analyzes them imme-
diately, supplying details without delay to the Com-
pany’s decision-makers.This procedure allows
negative trends to be identified without loss of time
and immediate countermeasures to be taken.
The main risks faced by Porsche Automobil Hold-
ing SE are associated with its equity investments
in Volkswagen AG and Dr. Ing. h.c. F. Porsche AG.
Analyst estimates and other opinions are regularly
monitored in order to gain an impression of the
development of VW’s shares.
All shares in Porsche AG are held by Porsche SE.
A domination and profit and loss transfer agree-
ment is in place between the companies that re-
quires Porsche SE as the controlling company to
absorb any loss. This is why risks of Porsche AG
can also constitute risks for Porsche SE. The risks
and risk early warning system of Porsche AG are
therefore described in more detail.
At Porsche AG, the group’s opportunities and
risks are evaluated in the context of the annual
planning process. Constant monitoring is provided
throughout the year by means of the reporting
system. Deviations are analyzed, recorded and
countermeasures introduced in the event of nega-
tive developments. In addition, the “Risk Manage-
ment” and “Internal Audit” departments monitor and
document the risks and early warning systems. If
new or changed risks are discovered, these depart-
ments report immediately to the Executive Board
and propose solutions.
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 Sec. 91 (2) AktG and that the system
has not indicated the presence of any occurrences
at Porsche AG that could have a significant and
lasting effect on the Company’s net assets, finan-
cial position and results of operations.
Risks can never be completely eliminated. Incidents
such as fires or explosions can severely disrupt
operating processes. Regular safety checks and
protective measures integrated into buildings and
processes offer preventive protection. Moreover,
business interruptions and damage to property are
covered by insurance. Natural disasters, terrorist
activities, pandemics and changes in the law are
risks that can be difficult to predict but have a size-
able economic impact if they come to pass. The
current debate over CO2levels and public pressure
to minimize fuel consumption could impact sales.
Porsche AG has responded to these challenges by
19
2005 ⁄ 06 2006 ⁄ 07 2007 ⁄ 08
18,000
15,000
12,000
9,000
6,000
3,000
2004 ⁄ 05
Equity
in million Euro
16,8469,4815,3383,420