Chrysler 2010 Annual Report Download - page 338

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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 will propose to Shareholders at the Annual General Meeting that they approve payment of a total dividend of €155.1 million
(€151.6 million excluding own shares held by Fiat S.p.A. at the date of publication of these financial statements). The dividend proposal is as follows:
€0.09 per ordinary share;
€0.31 per preference share;
€0.31 per savings share.
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 endeavors 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 access to affordable external sources of funds, including through the achievement of 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, as a general rule 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 the law permits, to distribute reserves. In this context, Fiat S.p.A. also makes purchases of own shares, without exceeding
the limits authorized 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.
Capital includes both the value brought to a company by its shareholders (share capital and share premium less own shares held, for a total value of
€7,261,595 thousand at 31 December 2010, unchanged over 2009), and the value generated by Fiat S.p.A. in terms of the results achieved (retained
profit and other reserves, before allocation of profit for the year, equal in total to €5,444,893 thousand at 31 December 2010 and €5,222,812 thousand at
31 December 2009, excluding gains and losses recognized directly in equity).
Share premium reserve
At 31 December 2010, this reserve totaled €1,540,885 thousand and was unchanged from 31 December 2009.
Legal reserve
At 31 December 2010, this reserve totaled €716,458 thousand, an increase of €16,998 thousand over 31 December 2009 following allocation of profits
from the previous year as approved by Shareholders on 26 March 2010.
Reserve available for the purchase of own shares
This reserve was created through a transfer from the retained profit/(loss) reserve, following Shareholders approval for share repurchases. In particular, the
share buy-backs were made under a program (the “Program”) approved by Shareholders at the General Meeting held on 5 April 2007 and subsequently
renewed on 31 March 2008 and 27 March 2009. Under the Program, purchases were to be carried out on regulated markets in accordance with the
following conditions:
the Program would end on 27 September 2010 or, in any event, once the maximum amount of €1.8 billion (including Fiat S.p.A. shares already held by
the Company) or a number of shares equivalent to 10% of share capital was reached;
the maximum purchase price could not exceed the reference price reported by the Stock Exchange on the day before the purchase is made by more
than 10%;
for each share class, the maximum number of shares purchased daily could not exceed 20% of the total daily trading volume.