Chrysler 2007 Annual Report Download - page 277

The following changes took place during the year in the Company’s investments in subsidiaries:
■In February 2007 Fiat S.p.A. made a capital contribution of the investments it held in Magneti Marelli Holding S.p.A. (99.99%) and
Teksid S.p.A. (84.79%) to the subsidiary Fiat Partecipazioni S.p.A. This transaction forms part of the programme for the
rationalisation and simplification of the corporate structure of the Fiat Group, under which Fiat Partecipazioni S.p.A. is assigned the
role as sub-holding of the main Italian industrial sectors. Since the transaction was finalized with a direct subsidiary of Fiat S.p.A.,
the principal of the continuity of carrying values has been applied from an accounting point of view and as a result the increase in
the Company’s investment in Fiat Partecipazioni S.p.A. following the above-mentioned capital increase, amounted in total to
887,004 thousand euros, which corresponds to the sum of the carrying amounts of the investments involved (respectively 811,153
thousand euros for the investment in Magneti Marelli Holding S.p.A. and 75,851 thousand euros for the investment in Teksid S.p.A.,
in the latter case net of the allowance against the investment, which was also transferred).
■Given the losses incurred by the subsidiary Comau S.p.A. during the year and the consequent need to restore the company’s
financial position and to provide an adequate capital structure, stock capital contributions were made amounting to 120,000
thousand euros.
■As regards the other increases in the investments, totalling 21,879 thousand euros, as previously discussed in Note 5 the
compensation component of the stock option plans based on Fiat S.p.A. shares relating to managers employed by other Group
companies is treated as a capital contribution to the subsidiaries and consequently as an increase in the value of the investee
company by which the managers beneficiaries of the stock option plan are directly or indirectly employed. This increase is
accounted for as a change in the respective equity reserve (see Note 18).
■The following repayments of capital were made in 2007 as part of an overall objective of re-balancing the financial positions
within the Group also taking into account the planned operating cash flow and capital expenditure needs:
– the subsidiary Fiat Partecipazioni S.p.A. made a distribution of 2,050,000 thousand euros to its sole stockholder Fiat S.p.A. from
its free and available “Capital contribution” reserve;
– the subsidiary Iveco S.p.A. reduced its capital stock and made a repayment of 272,545 thousand euros to Fiat S.p.A. based on its
holding.
Impairment losses and the reversals of impairment losses arise from the application of the cost method (see Note 2).
With regard to Fiat Partecipazioni S.p.A., the accumulated impairment losses at December 31, 2007 amounting to 2,759,986
thousand euros included 52,986 thousand euros related to Teksid S.p.A. while 2,707,000 thousand euros related to the residual part
of accumulated impairment losses recognised in previous years as discussed in Note 2.
A full list of investments with the additional disclosures required by Consob in its communication no. DEM/6064293 of July 28,
2006 is attached.
Fiat S.p.A. Financial Statements at December 31, 2007 - Notes to the Financial Statements276