Porsche 2009 Annual Report Download - page 90

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Valuation risk
In addition, Porsche SE is exposed to poten-
tial risks from the recoverability of its investments in
Volkswagen AG and Porsche Zwischenholding GmbH.
In order to ascertain any need to record an impair-
ment, the company’s own evaluations are prepared
regularly and the assessments made by analysts are
monitored with regard to the investment in Volks-
wagen AG.
Risk arising from the use of
financial instruments
In its business activities Porsche SE is ex-
posed to risks arising from the primary or derivative
financial instruments used.
The principles and responsibilities for manag-
ing and controlling these risks are defined by the ex-
ecutive board and monitored by the supervisory board.
The risk controlling processes implemented in particu-
lar govern the ongoing monitoring of the liquidity
situation in the Porsche SE group, the status of the
remaining cash-settled options relating to Volkswagen
AG shares, the development of interest
levels on the capital markets and the monitoring of
the financial covenants. The risks are identified, ana-
lyzed and monitored using suitable information sys-
tems. Moreover, transactions may only be concluded
in permitted financial instruments, only with approved
counterparties and on the admissible scale. Derivative
financial instruments used by Porsche SE and its re-
maining subsidiaries are entered into mainly to man-
age interest rate and stock price risks as well as in
relation to the sale of the remaining shares in Porsche
Zwischenholding GmbH. Any default on Porsche SE’s
receivables, most of which are due to companies of
the Porsche Zwischenholding GmbH group, could have
a negative impact on Porsche SE’s liquidity situation.
In addition, the investment of cash also gives rise to
counterparty risks. Regarding the term and call money
investments at Porsche SE, however, they are hedged
using hedging systems customary in the banking busi-
ness. Cash investments are also exposed to interest
rate risks.
If the financial position and results of opera-
tions of the Porsche Zwischenholding GmbH group
and the Volkswagen group were to deteriorate mate-
rially, this could also lead to an impairment loss rec-
90 Group management report