Chrysler 2008 Annual Report Download - page 293

general meeting of shareholders is also required to adopt suitable measures when share capital decreases by more than one third
as the result of ascertained losses and to reduce share capital if by the end of the following year such losses have not fallen to less
than one third. If as the consequence of a loss of more than one third of capital this then drops below the legal minimum,
shareholders in general meeting are required to approve a decrease and simultaneous increase of capital to an amount not less than
this minimum or must change a company’s legal form.
As discussed previously the share in profits due to each class of shares is determined by a company’s By-laws.
An additional paid-in capital reserve is established if a company issues shares at a price exceeding their nominal value. This
reserve may not be distributed until the legal reserve has reached one fifth of share capital.
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 shareholders in general meeting and in no case
may the nominal value of the shares acquired exceed one tenth of share capital.
The following matters are 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 for a capital increase reserved for employees of the company and/or its subsidiaries up to a
maximum of 1% of that stock, i.e. €50,000,000, by issuance of 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 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, Fiat has had 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 ( €0.31 per share for 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 Fiat 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 Fiat 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.
Fiat 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 Fiat 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 capital stock or, where the law permits, to distribute reserves. In this
Fiat S.p.A. Statutory Financial Statements at 31 December 2008292