Chrysler 2010 Annual Report Download - page 331

FIAT S.P.A.
STATUTORY
FINANCIAL
STATEMENTS AT
31 DECEMBER
2010
NOTES
330
Significant changes to investments in subsidiaries during the year were as follows:
Certain subsidiaries were recapitalized during the year in order to strengthen their capital structure. Investments made were as follows: Fiat Group
Automobiles S.p.A. (€1,050 million); Fiat Netherlands Holding N.V. (€750 million) Comau S.p.A. (€40 million) and Teksid Aluminum S.r.l. (€12.5 million).
Transactions preliminary to the Demerger included the incorporation of Fiat Industrial S.p.A. (with share capital of €120,000 and subsequent capital
contributions of €6.1 million to ensure the funds necessary to cover start-up costs) and Fiat Industrial Finance S.p.A. (with share capital of €100 million),
as well as the purchase from Fiat Partecipazioni S.p.A. and subsequent capital increases of Nuove Iniziative Finanziarie Cinque S.p.A. (later renamed Iveco
S.p.A.) and Nuova Immobiliare Nove S.p.A. (later renamed FPT Industrial S.p.A.) in the amount of €200 million and €100 million, respectively. These two
subsidiaries were involved in the reorganization, preliminary to the Demerger, of the legal structure of activities under the former Iveco S.p.A. (now Fiat
Gestione Partecipazioni S.p.A.), which sold (with effect from 1 December 2010 and on the basis of a valuation performed by an independent expert) its
trucks and commercial vehicles and “Industrial & Marine” powertrain activities to Nuove Iniziative Finanziarie Cinque S.p.A. and Nuova Immobiliare Nove
S.p.A., respectively.
The shareholdings to be transferred from Fiat S.p.A. to Fiat Industrial S.p.A. under the Demerger (Fiat Netherlands Holding N.V., new Iveco S.p.A., FPT
Industrial S.p.A. and Fiat Industrial Finance S.p.A.), with a total book value of €4,977,346 thousand, were reclassified under “Assets to be demerged”
(see Note 18).
Impairment (losses)/reversals includes impairment losses and reversals arising from application of the cost method, as described in Note 2 above.
A breakdown of investments in associates and changes during the year is as follows:
Impairment
% (losses)/
(€ thousand) interest 31 December 2009 Additions Decreases reversals 31 December 2010
RCS MediaGroup S.p.A. 10.09 131,785 - - - 131,785
Total investments in associates 131,785 - - - 131,785
The carrying value of the interest in RCS MediaGroup S.p.A. (a listed company) was €53 million higher than the corresponding stock market value at the
balance sheet date (€34 million higher at year-end 2009), a value which continues to reflect a discount to the book value of equity. Therefore, given the
relative carrying value of the investment in the Group’s accounts, where it is recognized under the equity method, as well as the relative stake held, for which
the current stock market price (which continues to be influenced by weak economic conditions in Italy) is not representative, it was deemed reasonable that
the recoverable value of the investment is at least equivalent to the current carrying amount.
A breakdown of investments in other companies and changes during the year is provided below:
% Fair value
(€ thousand) interest 31 December 2009 Additions Decreases adjustments 31 December 2010
Fin.Priv. S.r.l. 14.28 17,943 - - (3,603) 14,340
Assicurazioni Generali S.p.A. 0.01 3,533 - - (865) 2,668
Total investments in other companies 21,476 - - (4,468) 17,008
As they are non-current financial assets and not held for trading, investments in other companies are recognized at fair value which, for listed companies,
corresponds to their market value at the balance sheet date. Similarly, the Company’s investment in Fin.Priv. S.r.l. (a holding company whose assets
are principally listed securities) was measured at fair value based on the market price of its portfolio. This led to a total decrease of €4,468 thousand in
investments in other companies for 2010, which was recognized directly in equity (see Note 19).