Chrysler 2003 Annual Report Download - page 117

116 Fiat Group Consolidated Financial Statements at December 31, 2003
Notes to the Consolidated Financial Statements
Research and development expenses
Each year significant expenditures are borne by the Group for research and development programs that generally cover a period
of several years and which are charged to income in the year incurred.
In 2003 and 2002 direct research and development expenses were 1,747 million euros and 1,748 million euros, respectively. For the
most important projects, the Group has applied for financing to the Italian government and the European Community under related
legislation.
At the end of 2003, there were multiyear research and innovation projects that are being examined or for which incentives are being
paid, by the above authorities, which show estimated expenditures in the relative applications amounting to approximately 898
million euros (an amount which also comprises projects on which the balance of the incentives was received in the same year). The
Group filed/received low-rate loans for 142 million euros and grants for 394 million euros in respect of these projects which could also
give rise to receipts for incentives in future years. The amounts received during 2003, referring to the aforementioned expenditures,
totaled 27 million euros in low-rate loans and 54 million euros in grants, for a cumulative total at December 31, 2003 of 45 million
euros in low-rate loans and 132 million euros in grants.
The average interest rate on financing received for research and innovation at December 31, 2003 was 2,27% (2,49% for outstanding
financing at December 31, 2002).
Maintenance costs
Maintenance costs charged to income in 2003 and 2002 amounted to 435 million euros and 556 million euros, respectively.
Advertising costs
Advertising costs charged to income in 2003 and 2002 amounted to 921 million euros and 1,106 million euros, respectively.
22 Statement of cash flows
Beginning last year the Statement of cash flows is included, and commented on, in the Report on Operations – Analysis of
the Financial Position and Operating Results of the Fiat Group and Fiat S.p.A.
A reconciliation between cash and the Group net financial position is also reported in the Report on Operations – Analysis of
the Financial Position and Operating Results of the Fiat Group and Fiat S.p.A.
23 Translation of foreign financial statements
The principal exchange rates used in 2003 and 2002 to translate the foreign currency financial statements into euros were:
Average At Average At
2003 12/31/2003 2002 12/31/2002
U.S. dollar 1.131 1.263 0.944 1.049
British sterling 0.692 0.705 0.628 0.651
Swiss franc 1.521 1.558 1.467 1.452
Polish zloty 4.398 4.717 3.854 4.020
Brazilian real 3.474 3.649 2.765 3.705
Argentine peso 3.335 3.713 2.957 3.534