Chrysler 2006 Annual Report Download - page 144

Fiat S.p.A. Financial Statements at December 31, 2006 - Notes to the Financial Statements 285Fiat S.p.A. Financial Statements at December 31, 2006 - Notes to the Financial Statements284
At December 31, 2006, payables to Group companies in connection with the IRES tax consolidation amounted to 154,910 thousand
euros (97,926 thousand euros at December 31, 2005) and represent the remuneration due for the tax losses contributed by the
Italian subsidiaries to the national tax consolidation for 2006 and for the IRES tax credits of the Italian subsidiaries transferred
to Fiat S.p.A. as part of the tax consolidation procedure.
Tax payables and other payables are all due within one year and their carrying amount is deemed to approximate their fair value.
28. Guarantees granted, commitments and contingent liabilities
Guarantees granted
This item is made up as follows:
(in thousands of euros) 2006 2005 Change
Guarantees granted
Sureties
-on behalf of Group companies 569,288 797,457 (228,169)
-on behalf of third parties 96,011 460,303 (364,292)
Total sureties 665,299 1,257,760 (592,461)
Other personal guarantees
-on behalf of Group companies 6,748,140 7,059,768 (311,628)
-on behalf of third parties 152,404 160,937 (8,533)
Total other personal guarantees 6,900,544 7,220,705 (320,161)
Total Guarantees granted 7,565,843 8,478,465 (912,622)
Sureties
At December 31, 2006, sureties amount to 665,299 thousand euros, a decrease of 592,461 thousand euros over December 31, 2005.
This balance mostly relates to sureties granted on behalf of Group companies on Billets de Trésorerie issued (Fiat Finance
and Trade Ltd. 165,115 thousand euros), medium- to long-term loans granted by banks (214,580 thousand euros) and the rental
payments relating to buildings included in the property securitisation transactions carried out in previous years (189,593 thousand
euros). Sureties granted on behalf of third parties mainly relate to the Sava savings bonds still outstanding (46,011 thousand
euros, a decrease of 364,292 thousand euros over December 31, 2005).
Other personal guarantees
At December 31, 2006, other personal guarantees amount to 6,900,544 thousand euros, a decrease of 320,161 thousand euros
over December 31, 2005.
Net advances relating to work completed may be analysed as follows:
Advances received from customers Advances paid to suppliers Net advances for work completed
At At At At At At
(in thousands of euros) December 31, 2006 December 31, 2005 December 31, 2006 December 31, 2005 December 31, 2006 December 31,2005
Florence-Bologna line 3,774,803 3,398,254 3,642,387 3,273,419 132,416 124,835
Turin-Novara line 4,552,834 4,267,724 4,372,832 4,098,522 180,002 169,202
Novara-Milan line 1,218,035 664,444 1,172,562 639,092 45,473 25,352
Progress payments for work completed 9,545,672 8,330,422 9,187,781 8,011,033 357,891 319,389
Advances relate to amounts received as down payments from the customer T.A.V. S.p.A. at the commencement of the contracts,
which are then recovered as the work progresses. The balance may be analysed as follows:
Contractual advances Contractual advances
received from customers paid to suppliers Net contractual advances
At At At At At At
(in thousands of euros) December 31, 2006 December 31, 2005 December 31, 2006 December 31, 2005 December 31, 2006 December 31, 2005
Florence-Bologna line 70,871 88,672 68,146 85,262 2,725 3,410
Turin-Novara line 3,486 36,320 3,358 36,440 128 (120)
Novara-Milan line 135,034 201,248 129,981 193,470 5,053 7,778
Contractual advances 209,391 326,240 201,485 315,172 7,906 11,068
The company provided T.A.V. S.p.A. with bank sureties to secure these advances and for the proper performance of the work for
a total of 1,877,521 thousand euros at December 31, 2006 (of which 695,243 thousand euros relating to the Bologna Florence line,
742,882 thousand euros to the Turin-Novara sub-line and 439,396 thousand euros to the Novara-Milan sub-line). On the other hand,
as contractually provided for,CAV.E.T.provided Fiat S.p.A. with bank sureties totalling 669,582 thousand euros, while CAV.TO.MI
provided bank sureties of 714,754 thousand euros for the Turin-Novara sub-line and 422,895 thousand euros for the Novara-Milan
sub-line.
No retentions were made in relation to the amounts due from T.A.V. S.p.A. since they have been replaced with a portion
of the bank sureties mentioned above.
Lastly, in line with the contractual terms and with the prior approval of the testing commission given to RFI – Rete Ferroviaria
Italiana S.p.A., the Turin-Novara high speed line was opened to the public in February 2006. Moreover, the company signed an
agreement with T.A.V. S.p.A. in December 2006 for the acknowledgment of the substantial completion of the work on the line.
However, since all contractually required checks for the formal approval of the work were still underway at December 31, 2006
and, therefore, the bank sureties had not yet been released, this line has not been closed from an accounting standpoint.
Tax payables and other payables
The main components of these items are as follows.
At December 31, 2006, intercompany payables for consolidated VAT of 160,957 thousand euros (117,028 thousand euros at
December 31, 2005) relate to the VAT credits of Italian subsidiaries transferred to Fiat S.p.A. as part of the consolidated VAT
procedure.