Porsche 2010 Annual Report Download - page 87

The data reports are processed in a consoli-
dation system, which is based on standard software
and to which access and rights are restricted by the
existing authorization and access rules. The clear
delineation of areas of responsibility and the applica-
tion of the dual control principle during preparation of
the financial statements is ensured by means of un-
ambiguous rules.
Testing for reasonableness, the clear delinea-
tion of areas of responsibility and the application of
the dual control principle are control mechanisms
applied during the preparation of the financial state-
ments of Porsche SE. At Porsche SE, provisions and
accruals and deferrals are set up, and the recoverabil-
ity of the company’s equity investments included in
the balance sheet are checked in cooperation with the
departments and are recognized only after they have
been approved internally. The accounting processes
implemented at Porsche SE ensure that matters
arising from agreements that are relevant in terms of
accounting and subject to disclosure requirements
are identified in full and presented appropriately in the
financial statements. There are authorization and
access rules for the IT systems of relevance for the
financial reporting process.
The internal control system relevant for the
financial reporting process and the guidelines for
Porsche SE and its remaining subsidiaries were im-
plemented with the involvement of Porsche SE’s inter-
nal audit function. The control system and the guide-
lines are subject to appropriateness reviews and are
updated on an ongoing basis.
Risk management and early risk warning
According to Sec. 91 (2) German Stock Cor-
poration Act (AktG), Porsche SE is required to operate
a risk management and early warning system which
allows the company to identify any risks to the ability
of the company to continue as a going concern at an
early stage. The risk management system of the
Porsche SE group was set up to identify at an early
stage any potential risks to the ability of the group to
continue as a going concern as well as any risks that
could significantly and negatively impact the net
assets, financial position and results of operations of
the group and to avoid these by means of suitable
countermeasures that allow the group to rule out any
risks to its ability to continue as a going concern.
Since deconsolidation of the Volkswagen
group and the Porsche Zwischenholding GmbH group
on 3 December 2009 and 7 December 2009, respec-
tively, for group accounting purposes in accordance
with IFRSs, Porsche SE now acts as a holding com-
pany for its investments in the operating companies
Porsche Zwischenholding GmbH and Volkswagen AG.
The income of Porsche SE consists mainly of the
dividend payments of these two equity investments.
The risks from investments now only have an indirect
effect on Porsche SE in the form of valuation, con-
solidation, dividend and liability risks. In addition,
there are risks from the basic agreement and the
associated corporate restructuring as well as from
the investment held by Volkswagen AG in Porsche
Zwischenholding GmbH.
These structural changes are also considered
in the Porsche SE group’s risk management, which
consists of three autonomous, but nevertheless inte-
grated risk management subsystems. Two of these
subsystems are located at the level of Porsche
Zwischenholding GmbH and Volkswagen AG respec-
tively (we refer to the section “Opportunities and risks
of significant investments”). The risks of relevance at
the level of Porsche Zwischenholding GmbH are cov-
ered by Porsche AG’s early risk warning system which
is required by Sec. 91 (2) German Stock Corpora-
tions Act (AktG) to establish for the Porsche AG
group. The subsystems are intended to identify,
manage and monitor the risks resulting from the
operating activities of the two investments that could
jeopardize the investment’s ability to continue as a
going concern. The two investments are themselves
responsible for their local risk management, but are
required at the same time to inform Porsche SE as
the holding company at an early stage of any risks
jeopardizing the investment’s ability to continue as a
going concern.
The third subsystem, the risk management
system at the level of Porsche SE, monitors the direct
risks of Porsche SE as a single entity, the risks at the
85