41 Related party disclosures in accordance with IAS 24


Related parties as defined by IAS 24 are natural persons and entities that Volkswagen AG has the ability to control or on which it can exercise significant influence, or natural persons and entities that have the ability to control or exercise significant influence on Volkswagen AG, or are influenced by another related party of Volkswagen AG.

At the beginning of fiscal year 2009, the interest held by Porsche Automobil Holding SE, Stuttgart, in Volkswagen AG’s ordinary shares exceeded the 50% threshold. From this date, Porsche Automobil Holding SE held the majority of the voting rights of 50.76%.

The creation of rights of appointment for the State of Lower Saxony was resolved at the Extraordinary General Meeting of Volkswagen AG on December 3, 2009. As a result, Porsche Automobil Holding SE can no longer appoint the majority of the members of Volkswagen AG’s Supervisory Board for as long as the State of Lower Saxony holds at least 15% of Volkswagen AG’s ordinary shares. The resolutions have not yet been entered in the commercial register. However, Porsche Automobil Holding SE also has the power to participate in the operating policy decisions of the Volkswagen Group. Prior to this, the Supervisory Board of Volkswagen approved the Comprehensive Agreement between Volkswagen AG, Porsche Automobil Holding SE, Porsche Holding Gesellschaft m.b. H., Salzburg, and Porsche GmbH, Salzburg, Porsche Zwischenholding GmbH, Stuttgart, the ordinary shareholders of Porsche Automobil Holding SE and the employee representatives of Volkswagen AG, Porsche Automobil Holding SE and Dr. Ing. h.c. F. Porsche AG, Stuttgart, to create an integrated automotive group led by Volkswagen.

In the course of the performance of these agreements, on December 7, 2009 Volkswagen acquired an equity interest of 49.9% in Porsche Zwischenholding GmbH, which is the parent and holds 100% of the shares of Dr. Ing. h.c. F. Porsche AG. On the basis of agreements under company law, Volkswagen shares the management of Porsche Zwischenholding GmbH with Porsche Automobil Holding SE. Porsche Automobil Holding SE indemnifies Volkswagen AG and Porsche Zwischenholding GmbH against obligations arising from certain legal disputes, from tax claims and from certain substantial losses that arose before the agreement between Porsche Automobil Holding SE and Volkswagen AG on the investment by Volkswagen AG in Dr. Ing. h.c. F. Porsche AG entered into as part of the implementation of the Comprehensive Agreement was signed. Porsche Automobil Holding SE has also granted guarantees to Volkswagen AG in respect of Porsche Zwischenholding GmbH and Dr. Ing. h.c. F. Porsche AG. In return, Volkswagen AG has indemnified Porsche Automobil Holding SE internally from claims by the Einlagensicherungsfonds (German deposit protection fund) after Porsche Automobil Holding SE submitted an indemnification agreement required by the Bundesverband Deutscher Banken (Association of German Banks) to the Einlagensicherungsfonds in August 2009. Volkswagen AG has undertaken to indemnify the Einlagensicherungsfonds from any losses caused by measures taken in favor of a bank in which Volkswagen AG holds a majority interest.

Furthermore, in the event that the merger of Porsche Automobil Holding SE with Volkswagen AG that is planned under the Comprehensive Agreement does not take place, Volkswagen AG and Porsche Automobil Holding SE have agreed mutually exercisable call and put options in respect of the remaining interest in Porsche Zwischenholding GmbH. The put option is exercisable from November 15, 2012 to January 14, 2013 inclusive and again from December 1, 2014 to January 31, 2015 inclusive; the call option may be exercised from March 1, 2013 to April 30, 2013 inclusive and again from August 1, 2014 to September 30, 2014 inclusive.

In addition, Volkswagen has granted a put option to Porsche Holding Gesellschaft m. b. H., a company owned by the Porsche and Piëch families, relating to the operating sales business of the company. In return, Volkswagen was granted rights of involvement in the management of the company during the term of the option.

All transactions with Porsche Automobil Holding SE, Porsche Zwischenholding GmbH, and Porsche Holding Gesellschaft m. b. H., as well as with all companies affiliated with these, are conducted on an arm’s length basis.

According to a notification dated January 15, 2010, the State of Lower Saxony and Hannoversche Beteiligungsgesellschaft mbH, Hanover, held 20.01% of the voting rights of Volkswagen AG on December 31, 2009. As mentioned above, the General Meeting of Volkswagen AG on December 3, 2009 also resolved that the State of Lower Saxony may appoint two members of the Supervisory Board (right of appointment). Transactions with private companies owned by the State of Lower Saxony are conducted on an arm’s length basis.

All transactions with unconsolidated dated subsidiaries, joint ventures, associates and other related parties are conducted on an arm’s length basis.

Members of the Board of Management and Supervisory Board of Volkswagen AG are members of supervisory and management boards or shareholders of other companies with which Volkswagen AG has relations in the normal course of business. All transactions with these companies are conducted on an arm’s length basis.

The amounts of the supplies and services transacted, as well as outstanding receivables and liabilities, between consolidated companies of the Volkswagen Group and related parties (unconsolidated subsidiaries, joint ventures, associates, Porsche Automobile Holding SE, Stuttgart, Porsche Zwischenholding GmbH, Stuttgart, Porsche Holding Gesellschaft m.b.H., Salzburg/Austria and their affiliated companies as well as other related parties) are presented in the following tables:

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RELATED PARTIES

 

 

 

 

Supplies and services rendered

 

Supplies and services received

€ million

 

2009

 

2008

 

2009

 

2008

1

Including Porsche Zwischenholding GmbH, Stuttgart, and its subsidiaries from December 7, 2009.

2

Includes in particular Porsche Holding Gesellschaft m. b. H., Salzburg/Austria, and its subsidiaries as well as Porsche Zwischenholding GmbH, Stuttgart, and its subsidiaries up to December 6, 2009.

Porsche Automobil Holding SE

 

0

 

 

392

 

Supervisory Board members

 

0

 

0

 

0

 

0

Group Board of Management

 

0

 

0

 

0

 

1

Unconsolidated subsidiaries

 

1,744

 

1,583

 

828

 

739

Joint ventures¹

 

3,612

 

3,213

 

464

 

492

Associates

 

1,368

 

30

 

191

 

201

Pension plans

 

1

 

0

 

1

 

3

Other related parties

 

1

 

6

 

31

 

41

Porsche²

 

4,165

 

6,317

 

250

 

389

State of Lower Saxony and majority interests

 

11

 

6

 

0

 

1

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Receivables from

 

Payables to

€ million

 

Dec. 31, 2009

 

Dec. 31, 2008

 

Dec. 31, 2009

 

Dec. 31, 2008

Porsche Automobil Holding SE

 

 

 

 

Supervisory Board members

 

0

 

0

 

5

 

5

Group Board of Management

 

0

 

0

 

14

 

14

Unconsolidated subsidiaries

 

653

 

324

 

303

 

339

Joint ventures

 

2,395

 

3,843

 

309

 

46

Associates

 

24

 

33

 

16

 

14

Pension plans

 

1

 

0

 

0

 

0

Other related parties

 

0

 

0

 

2

 

1

Porsche

 

155

 

185

 

10

 

10

State of Lower Saxony and majority interests

 

1

 

0

 

0

 

Volkswagen AG made a cash contribution of €3.9 billion to acquire the interest in Porsche Zwischenholding GmbH.

The Company extended financing of €0.7 billion to Porsche at arm’s length conditions and collateral requirements; €0.2 billion of this amount was still outstanding from factoring at the reporting date.

In fiscal year 2009, Porsche Corporate Finance GmbH Zurich branch, Salzburg, Austria, subscribed for three commercial paper issues by Volkswagen International Finance N.V., Amsterdam, the Netherlands, with a total volume of €0.1 billion, which are guaranteed by Volkswagen AG.

Loans to joint ventures were repaid in the amount of €1.8 billion.

The Board of Management and Supervisory Board of the Volkswagen Group are related parties within the meaning of IAS 24.The following benefits and remuneration were recorded for these persons:

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2009

 

2008

Short-term benefits

 

22,588,862

 

22,508,592

Post-employment benefits

 

3,025,899

 

3,237,434

Share-based payment

 

 

39,000

 

 

25,614,761

 

25,785,026

There are outstanding balances for bonuses of the Board of Management members in the amount of €13,100,000 at the end of the fiscal year (previous year: €12,500,000). The post-employment benefits relate to additions to pension provisions for current members of the Board of Management. The expenses shown above do not correspond to the definition of remuneration of members of the Board of Management and the Supervisory Board in accordance with the German Corporate Governance Code.

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