Chrysler 2008 Annual Report Download - page 166

a company may not purchase treasury shares for an amount exceeding the distributable profits and available reserves stated
in its most recently approved financial statements. Any purchase must be approved by Shareholders in General Meeting and in no
case may the nominal value of the shares acquired exceed one tenth of share capital.
The following matter is also relevant to the share capital of Fiat S.p.A.: in a meeting held on 3 November 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 share capital
reserved for employees of the company and/or its subsidiaries up to a maximum of 1% of those shares, being €50,000,000,
by taking a decision to issue a maximum of 10,000,000 ordinary shares each of nominal value €5, corresponding to 0.78% of share
capital and 0.92% of ordinary share capital, at a price of €13.37 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.
In addition, in respect of dividends, the Group has in force since 2006 a policy under which it intends to distribute a total dividend
to its shareholders amounting to 25% of consolidated profits earned up to 2010. However, despite the fact that the Group earned
Consolidated profit of €1,721 million in 2008 and that the net profit of Fiat S.p.A. is such to enable a dividend to be distributed
in conformity with the policy, the Board of Directors will be proposing to shareholders at their Annual General Meeting that the
distribution of dividends should be limited to savings shares alone (a total of €24.8 million, as established by the Company’s
bylaws), with the aim of strengthening the Group’s capital structure and preserving its liquidity.
The objectives identified by the Group for managing capital are to create value for shareholders 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 shareholders 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 Shareholders in General Meeting to reduce or increase share capital or, where the law permits, to distribute reserves. In this
context, the Group also makes purchases of treasury shares, without exceeding the limits authorised by Shareholders 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 Fiat S.p.A. by its shareholders for employment in the management of the
Group (share capital plus the additional paid-in capital reserve less treasury shares, equal to €7,261 million at 31 December 2008
and €7,499 million at 31 December 2007), 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 net profit or loss for the year, to €3,802 million at
31 December 2008 and €2,726 million at 31 December 2007, excluding gains and losses recognised directly in equity and minority
interests).
Fiat Group Consolidated Financial Statements at 31 December 2008 165