Chrysler 2005 Annual Report Download - page 49

48 Reporton Operations Transactions among Group Companies and with Related Parties
01 Report on Operations
Transactions among Group
Companies and with Related Parties
Transactions among Group companies, whether they are made to
support vertical manufacturing integration or to provide services, are
carried out at terms that, considering the quality of the goods or
services involved, are competitive with those available in the
marketplace.
The main transactions that took place during 2005 between the
Parent Company, Fiat S.p.A., and its subsidiaries and associated
companies are summarized below:
Subscription to capital increases of subsidiaries as described
in the Notes to the financial statements of Fiat S.p.A.;
Licensing of the right to use the Fiat trademark, for a consideration
based on a percentage of sales, to Fiat Auto S.p.A.;
Contributions provided to Group companies for initiatives
to enhance the Group’s image;
Services provided byFiat S.p.A. managersto Fiat Auto S.p.A., Iveco
S.p.A.,Teksid S.p.A., Magneti Marelli Holding S.p.A., Comau S.p.A.,
Business Solutions S.p.A., Itedi S.p.A. and other minor Group
companies;
Grant of suretyships and guarantees in connection with the
issuance of bonds (essentially Fiat Finance and Trade Ltd.), loans
provided by banks (Fiat Finance S.p.A. - formerly Fiat Ge.Va. S.p.A.,
FMA - Fabbrica MotoriAutomobilistici S.r.l., Banco CNH Capital
S.A., CNH America LLC, Fiat Automoveis S.A. and other minor
companies), the issuance of “billets de tresorerie” (Fiat Finance and
Trade Ltd.), credit lines (CNH Global N.V., CNH Capital America
LLC, CNH Capital Canada Ltd., NH Credit CompanyLLC and
other minor companies) and payment obligations under building
rental contracts (Fiat Auto S.p.A. and its subsidiaries). In addition,
a $1 billion direct credit line is in place between Fiat S.p.A. and
CNH Global N.V.;
Rental of buildings to Ingest Facility S.p.A.;
Current accounts and short-term financings management (Fiat
Finance S.p.A.), purchase of administrative, fiscal, corporate affairs
and consulting services (Fiat Gesco S.p.A.), payroll and other
general services (Fiat Servizi per l’Industria S.c.p.A.);
Purchase of inspection and internal auditing services from
Fiat-Revisione Interna S.c.r.l.;
Purchase of information technology services provided by PDL
Service S.r.l. and eSPIN S.p.A.;
Purchase of external relations services provided by Fiat
Information & Communication Services società consortile per
azioni;
Office space and real property maintenance services provided
by Ingest Facility S.p.A.;
Security services and other services provided by Consorzio
Orione and Sirio S.c.p.A.;
Purchase of automobiles from Fiat Auto S.p.A.
Fiat S.p.A., as consolidating company, and almost all its Italian
subsidiaries decided to comply with the national tax consolidation
program according to articles 177/129 of T.U.I.R. (Consolidated
Law on Income Tax).
Relationships with related parties, whose definition was extended in
accordance with IAS 24, include not only normal business relationships
with listed groups or other major groups in which the directors of the
Companyor its parent companies hold a significant position, but also
purchases of Group products at normal market prices or, in the case
of individuals, the prices that are usually charged to employees.
Transactions with related parties to be mentioned include professional
services rendered by Mr. Franzo Grande Stevens (consultancies and
activities performed in his capacity as secretary of the Board of
Directors) to Fiat S.p.A. for a total of 940 thousand euros.
Based on the information received from the various Group companies,
there were no atypical or unusual transactions during the year.
Extraordinary transactions among Group companies or with related
parties that occurred during the year are as follows:
Ferrari S.p.A.: an entity comprising the group of companies that
manufacture and sell Maserati cars was transferred to a company
that simultaneously assumed the name Maserati S.p.A. and was
sold to Fiat Partecipazioni S.p.A;
Within the framework of the reorganization of central activities
in France, aimed at transferring the role of national company to
the main operating company, Fiat France S.A. was merged into
Fiat Auto France S.A. which took its name. Before the merger,
Fiat France S.A. had been sold byFiat Partecipazioni S.p.A. to
Fiat Finance Netherlands B.V.; concurrently, Fiat France S.A. sold
its 100% interest in La Stampa Europe SAS to Itedi S.p.A.