Chrysler 2005 Annual Report Download - page 140

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Fiat Group Consolidated Financial Statements at December 31, 2005 - N otes to the Consolidated Financial Statements
liabilities primarily relate to potential liabilities arising from contingent liabilities in existence at the time of the sale, as well as breach of
representations and warranties provided in the contracts and, in certain instances, environmental or tax matters, generally for a limited period
of time. At D ecember 31, 2005, potential obligations with respect to these indemnities are approximately 750 million euros, unchanged from
the level at December 31, 2004.The Group have provided certain other indemnifications that do not limit potential payment; it is not possible
to estimate a maximum amount of potential future payments that could result from claims made under these indemnities.
Fiat has recently received a subpoena from the SEC Division of Enforcement regarding a formal investigation entitled “In the Matter of Certain
Participants in the O il-for-Food Program”. Under this subpoena, the Group is required to provide the SEC with documents relating to certain
Fiat-related entities, including certain CN H subsidiaries and Iveco, regarding matters relating to the United N ations O il-for-Food Program.
A substantial number of companies was mentioned in the “Report of the Independent Inquiry Committee into the United N ations O il-for-
Food Programme” issued in O ctober 2005, which alleged that these companies engaged in transactions under this programme that involved
inappropriate payments. Management is currently unable to predict what actions, if any, may result from the SEC investigation.
33. Segment reporting
Information by business and geographical area is disclosed in accordance with IAS 14 - Segment reporting, and is prepared in conformity with
the accounting policies adopted for preparing and presenting the consolidated financial statements of the Group.
The primary reporting format is by business segment, while geographical segments represent the secondary reporting format.
This decision is based on the identification of the source and nature of the Group’s risks and returns, which determine how the Group is
organised and define its management structure and its internal financial reporting system.
Business segment information
The internal organisation and management structure of the Fiat Group throughout the world are based on the business segment to which
entities and divisions belong. In addition, the Group has investments in holding entities and service providers whose activity is different from
those of the industrial businesses.The following descriptions provide additional detail of this.
The Fiat Auto Sector operates internationally with three major brands Fiat, Lancia and Alfa Romeo and manufactures and markets automobiles
and commercial vehicles.
The Maserati Sector produces and markets luxury sports cars with the brand Maserati.
The Ferrari Sector consists of the manufacturing and marketing of luxury sports cars with the brand Ferrari and the management of the
Formula O ne racing cars.
The Fiat Powertrain Technologies (FPT) Sector manufactures car engines and transmissions (these businesses were managed by the Fiat-GM
Powertrain joint venture until April 2005). Starting from 2006 the Sector will also include Iveco, C .R.F. and the Elasis business which
manufactures engines and gear boxes.
The Agricultural and Industrial Equipment (CN H) Sector manufactures and sells tractors and agricultural equipment under the Case IH and the
N ew Holland brands and construction equipment under the Case, N ew Holland and Kobelco brands.
The Iveco Sector produce and sells commercial vehicles, mainly in Europe, (under the Iveco brand), buses (under the Iveco and Irisbus brands)
and special vehicles (under the Iveco, Magirus and Astra brands).
The Components Sector (Magneti Marelli) produces and sells components for lighting systems, engine control units, suspension systems,
electronic systems and exhaust systems.
The Production System Sector (Comau) designs and produces industrial automation systems and related products for the automotive industry.
The Metallurgical Products Sector (Teksid) produces components for engines, cast-iron transmissions, and magnesium bodywork components.