Chrysler 2007 Annual Report Download - page 154

153Fiat Group Consolidated Financial Statements at December 31, 2007 - Notes
■a company may not purchase treasury stock for an amount exceeding the distributable profits and available reserves stated in its
most recently approved financial statements. Any purchase must be approved by stockholders in General meeting and in no case
may the nominal value of the shares acquired exceed one tenth of capital stock.
The following matters are also relevant to the capital stock of Fiat S.p.A.:
■Pursuant to the resolution approved by the Extraordinary Stockholders’ Meeting on September 12, 2002, the Board of Directors
had the right to increase the capital one or more times by September 11, 2007, up to a maximum of 8 billion euros.
■In a meeting held on November 3, 2006, the Board of Directors of Fiat S.p.A. exercised its delegated powers pursuant to article
2443 of the Italian Civil Code to increase capital stock reserved for employees of the company and/or its subsidiaries up to a
maximum of 1% of that stock, being 50,000,000 euros, by taking a decision to issue a maximum of 10,000,000 ordinary shares each
of nominal value 5 euros, corresponding to 0.78% of capital stock and 0.92% of ordinary capital stock, at a price of 13.37 euros
each, to service the new employee stock option plan described in the following paragraph. The execution of this increase in capital
is dependant on the conditions of the plan being satisfied.
It is recalled that the Group has a dividend policy by which it intends to distribute a total dividend to its stockholders of 25% of
consolidated profits until 2010. On the basis of the Group’s 2007 consolidated results and in line with the above policy, the Board of
Directors proposed to the shareholders at the Annual Stockholders’ Meeting an aggregate dividend payout of €522 million (€509
million excluding the treasury shares owned by the Group up to the date of the publication of these consolidated financial
statements). The dividend distribution will be proposed as follows:
■0.40 euros per ordinary and preference share;
■0.555 euros per savings share.
The objectives identified by the Group for managing capital are to create value for stockholders as a whole, to safeguard business
continuity and support the growth of the Group. As a result the Group endeavours to maintain an adequate level of capital that at
the same time enables it to obtain a satisfactory economic return for its stockholders and guarantee economic access to external
sources of funds, including in this by means of achieving an adequate rating.
The Group constantly monitors the evolution of the ratio between debt and equity and in particular the level of net debt and the
generation of cash from its industrial activities.
In order to reach these objectives the Group aims at a continuous improvement in the profitability of the business in which it
operates. Further, it may sell part of its assets to reduce the level of its debt, while the Board of Directors may make proposals to
Stockholders in General Meeting to reduce or increase capital stock or, where the law permits, to distribute reserves. In this
context, the Group also makes purchases of treasury stock, without exceeding the limits authorized by Stockholders in General
Meeting, under the same logic of creating value, compatible with the objectives of achieving financial equilibrium and an
improvement in its rating.
In this respect capital means both the value brought into a company by its stockholders for employment in the management of the
Group (capital stock plus the additional paid-in capital reserve less treasury stock, equal to 7,499 million euros), and the value
generated by the Group in terms of the results achieved in operations (retained earnings and other reserves, equal in total, before
the allocation of the net profits for the year, to 2,726 million euros, excluding gains and losses recognised directly in equity and
minority interest).