Porsche 2009 Annual Report Download - page 222

222 Financials
[31] Financial risk management and financial instruments
Because they were deconsolidated in the reporting period, the Porsche Zwischenholding
GmbH group and the Volkswagen group are presented as discontinued operations. For this reason,
the disclosures and explanations on financial risk management and financial instruments distinguish
between information on discontinued operations – for the comparative period and the past fiscal
year until their respective date of deconsolidation – and information on Porsche SE and its remain-
ing subsidiaries. An additional disclosure “thereof continuing operations” has been added to the
disclosures on amounts held at the end of the comparative period. The amounts stated there are
the amounts that were attributable to Porsche SE and its remaining subsidiaries as of 31 July 2009.
The disclosures and explanations of market price risk in section 4 below are made separately for
the risks of Porsche SE and its remaining subsidiaries and those of the former Porsche and Volks-
wagen subgroups faced by the Porsche SE group in the comparative period and until their respec-
tive date of deconsolidation.
1 Hedging guidelines and financial risk management principles
The principles and responsibilities for managing and controlling the risks that could arise
from financial instruments are defined by the executive board and monitored by the supervisory
board. The risk management processes are clearly defined in the Porsche SE group. Since decon-
solidation of the discontinued operations, the processes implemented govern the ongoing monitor-
ing of the liquidity situation in the Porsche SE group, the status of the remaining cash-settled op-
tions relating to Volkswagen AG shares, the monitoring of the enterprise value of Porsche Zwischen-
holding GmbH, the development of interest levels on the capital markets and monitoring of the
financial covenants. In the prior year and until the date of deconsolidation of the discontinued op-
erations, the other main topics regulated were the use of financial instruments or derivatives and
the requisite control procedures, such as a clear segregation of functions between trade and set-
tlement. The processes are based on the statutory requirements as well as the minimum standards
for risk management at banks. The risks are identified, analyzed and monitored using suitable in-
formation systems. Moreover, transactions may only be concluded in permitted financial instru-
ments, only with approved counterparties and on the admissible extent.
The guidelines and the supporting systems are checked regularly and brought into line with
current market and product development. The Porsche SE group manages and monitors these risks
primarily via its business operations and financing activities and, where necessary, by using deriva-
tive financial instruments. Derivative financial instruments used in continuing operations are entered
into mainly to manage interest rate and stock price risks as well as for the sale of the remaining
shares in Porsche Zwischenholding GmbH. In the discontinued operations, derivative financial in-
struments are also used for the management of currency, commodity and fund price risks. Without
using such instruments, the group would be exposed to higher financial risks.
For further explanations, please refer to the risk report section of the group management
report of Porsche SE.
Other notes