Chrysler 2009 Annual Report Download - page 155

154 FIAT GROUP
CONSOLIDATED
FINANCIAL
STATEMENTS
AT 31 DECEMBER
2009
NOTES
The Group utilises derivative financial instruments designated as fair value hedges, mainly to hedge:
the currency risk on financial instruments denominated in foreign currency;
the interest rate risk on fixed rate loans and borrowings.
The instruments used for these hedges are mainly currency swaps, forward contracts, interest rate swaps and combined
interest rate and currency financial instruments.
The Group uses derivative financial instruments as cash flow hedges for the purpose of pre-determining:
the exchange rate at which forecasted transactions denominated in foreign currencies will be accounted for;
the interest paid on borrowings, both to match the fixed interest received on loans (customer financing activity), and to
achieve a pre-defined mix of floating versus fixed rate funding structured loans.
The exchange rate exposure on forecasted commercial flows is hedged by currency swaps, forward contracts and currency
options. Interest rate exposures are usually hedged by interest rate swaps and, in limited cases, by forward rate agreements.
Counterparties to these agreements are major and diverse financial institutions.
Information on the fair value of derivative financial instruments held at the balance sheet date is provided in Note 21.
Additional qualitative information on the financial risks to which the Group is exposed is provided in Note 33.
SCOPE OF CONSOLIDATION
The consolidated financial statements of the Group as of 31 December 2009 include Fiat S.p.A. and 417 consolidated
subsidiaries in which Fiat S.p.A., directly or indirectly, has a majority of the voting rights, over which it exercises control, or from
which it is able to derive benefit by virtue of its power to govern corporate financial and operating policies. 11 fewer subsidiaries
were consolidated at 31 December 2009 compared to 31 December 2008.
Excluded from consolidation are 77 subsidiaries that are either dormant or generate a negligible volume of business: their
proportion of the Group’s assets, liabilities, financial position and earnings is immaterial. In particular, 51 of such subsidiaries
are accounted for using the cost method, and represent in aggregate 0 percent of Group revenues, 0 percent of equity and
0.2 percent of total assets.
Interests in jointly controlled entities (65 companies, including 28 entities of the FGA Capital group, are accounted for using the
equity method, except for Fiat-GM Powertrain Polska S.p z o.o., accounted for using proportionate consolidation. Condensed
financial information relating to the Group’s pro-rata interest in the above entity is as follows:
(€ million) At 31 December 2009 At 31 December 2008
Non-current assets 104 106
Current assets 157 67
TOTAL ASSETS 261 173
Debt - 1
Other liabilities 100 59
(€ million) 2009 2008
Net revenues 121 220
Profit/(loss) 12 35