Chrysler 2010 Annual Report Download - page 214

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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 fifth of share capital.
Additionally, in respect of the share capital of Fiat S.p.A., in a meeting on 3 November 2006 the Company’s Board of Directors exercised its delegated
powers pursuant to article 2443 of the Italian Civil Code to carry out an increase in share capital reserved for employees of the Company and/or its
subsidiaries up to a maximum of 1% of share capital, being €50 million, by taking a decision to issue up to 10 million 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 subject to the requirement that the conditions of the plan are met. Following
the Demerger and the corresponding reduction in the nominal value of each Fiat S.p.A. share from €5 to €3.5, share capital may in future increase by up
to a maximum of €35 million.
During 2010, the Group reconfirmed the policy under which it intends to distribute 25% consolidated net profit calculated on a 3-year rolling basis, with a
minimum annual payout of €150 million. With the Demerger completed, on 27 January 2011, the Group confirmed that for the 2011 financial year, a year of
transition, it is intended that the dividend policy will remain unchanged, with an expected distribution of 25% of consolidated profit for Fiat Post-Demerger
and for Fiat Industrial, with a minimum payout of €50 million and €100 million, respectively. The Board of Directors of each group will formulate a dividend
policy for subsequent financial periods by the end of 2011.
For 2010, the Board of Directors is proposing to Shareholders at their annual general meeting to pay a total dividend of €155.1 million (€151.6 million
excluding the treasury shares owned by the Group at the date of publication of these consolidated financial statements). The dividend proposal may be
summarised as follows:
€0.09 per ordinary share;
€0.31 per preference share;
€0.31 per savings share.
The objectives identified by the Group for managing capital are to create value for shareholders as a whole, 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 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, in general,
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 permitted by law, 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 the value brought into Fiat S.p.A. by its shareholders (share capital plus the additional paid-in capital reserve less treasury
shares, equal to €7,261 million at 31 December 2010, unchanged compared to 31 December 2009) 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 result for the year, to €3,287 million at 31 December 2010 and
€2,945 million at 31 December 2009, excluding gains and losses recognised directly in equity and non-controlling interests).
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