Chrysler 2008 Annual Report Download - page 312

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 received from customers Contractual advances paid to suppliers Net contractual advances
(€ thousands) At 31 December 2008 At 31 December 2007 At 31 December 2008 At 31 December 2007 At 31 December 2008 At 31 December 2007
Florence-Bologna line 19,092 43,225 18,358 41,563 734 1,662
Turin-Novara line –1,101 –1,065 –36
Novara-Milan line 42,311 71,193 40,792 68,573 1,519 2,620
Contractual advances 61,403 115,519 59,150 111,201 2,253 4,318
Bank and insurance sureties amounting to a total of €1,169,112 thousand have been granted by Fiat S.p.A. to T.A.V. S.p.A. as
security against the contractual advances received, the performance of the work and the restriction represented by the guarantee
amounts withheld on progress payments. In accordance with the agreements reached with the consortia mentioned and the banks
issuing such guarantees, €1,126,765 thousand out of this total represents the risk towards the issuing banks and insurance
companies borne by the consortia themselves, with Fiat S.p.A. not having joint responsibility.
More specifically, the guarantees provided by Fiat S.p.A. to T.A.V. S.p.A. relate for €521,426 thousand to the Bologna-Florence line,
for €252,241 thousand to the Turin-Novara sub-line and for €395,445 thousand to the Novara-Milan sub-line.
In this respect the indemnities assumed directly by the consortium CAV.E.T. amounted to €502,971 thousand, while for the
consortium CAV.TO.MI. these amount to €242,802 thousand for the Turin-Novara sub-line and €380,992 thousand for the Novara-
Milan sub-line.
Finally, 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 and in December 2006 the company
signed an agreement with T.A.V. S.p.A. for the acknowledgment of the substantial completion of the work on the line. The
performance of the contractual requirements agreed between the parties to arrive at the final approval of the work continued in
2007 and 2008, leading to the release of bank guarantees amounting to a total of €657,124 thousand relating to the work to be
subject to the Principal Final Test (around 94% of the total). Since, however, the steps for the final approval of the remaining works
are still in progress, which when given would lead to the release of the residual bank guarantees, the contract had not yet been
closed from an accounting standpoint at 31 December 2008.
Tax payables and other payables
The main components of these items are as follows.
At 31 December 2008, intercompany payables for consolidated VAT of €229,084 thousand (€195,886 thousand at 31 December 2007)
relate to the VAT credits of Italian subsidiaries transferred to Fiat S.p.A. as part of the consolidated VAT procedure.
At 31 December 2008, payables to Group companies in connection with the IRES tax consolidation amounted to €316,607 thousand
(€345,460 thousand at 31 December 2007) and represent the remuneration due for the tax losses contributed by the Italian
subsidiaries to the domestic tax consolidation for 2008, payables relating to the domestic tax consolidation for 2007 still to be
settled and the IRES tax credits of the Italian subsidiaries transferred to Fiat S.p.A. as part of the tax consolidation procedure.
At 31 December 2008, Income tax payable of €18,330 thousand relates to current IRAP payable for the year.
Tax payables and other payables are all due within one year and their carrying amount is deemed to approximate their fair value.
Fiat S.p.A. Statutory Financial Statements at 31 December 2008 311