Chrysler 2010 Annual Report Download - page 339

FIAT S.P.A.
STATUTORY
FINANCIAL
STATEMENTS AT
31 DECEMBER
2010
NOTES
338
Even though the buy-back program is on hold, to maintain the necessary operating flexibility over an adequate time period, Shareholders in the General
Meeting of 26 March 2010 renewed their authorization for the purchase and disposal of own shares for an 18-month period, including transactions carried
out through subsidiary companies, at the same time revoking their authorization given in the General Meeting of 27 March 2009 to the extent not exercised.
The renewed authorization was for the purchase of a maximum number of shares, for all three classes combined, not to exceed 10% of share capital or a
purchase value of €1.8 billion, inclusive of the €656.6 million in Fiat shares already held by the Company.
On 16 September 2010, the shareholders of Fiat S.p.A. – in view of the proposed reduction in par value from €5.00 to €3.50 per share resulting from the
Demerger – approved a reduction in the authorization for the purchase of own shares to a maximum value of €1.2 billion. The condition that the total number
of shares, in all three classes, may not exceed 10% of share capital and all other provisions approved by Shareholders on 26 March 2010 shall continue
to apply.
At 31 December 2010, the reserve available for the purchase of own shares totaled €543,447 thousand, a decrease of €599,293 thousand over
31 December 2009, as a result of:
the resolution passed by Shareholders on 26 March 2010, which, as mentioned above, revoked the existing authorization for share buy-backs to the
extent not already exercised and, at the same time, renewed the authorization for share buy-backs for a maximum of €1.8 billion, including the existing
reserve of €656.6 million for own shares held at that date, resulting in an available reserve of €1,142,740 thousand, which already existed at 31 December
2009 and has remained unchanged;
the resolution passed by Shareholders on 16 September 2010, which approved a reduction in the authorization for the purchase of own shares to a
maximum value of €1.2 billion, resulting in a €599,293 thousand decrease in the reserve available for the purchase of own shares and the transfer of the
same amount to the retained profit/(loss) reserve.
Although the share buy-back program has been placed on hold, the Board of Directors, in consideration of the fact that the current authorization expires on
26 September 2011 and to maintain the necessary operating flexibility for an adequate period, will propose to Shareholders at the Annual General Meeting
that the authorization be renewed for a period of 18 months and for a maximum number of shares (for all three classes) not to exceed the percentage of share
capital established by law or a total value of €1.2 billion, including the reserve for own shares that, after adjusting for the effects of the demerger, totaled
€289 million. Should the proposal be approved, the Company would, however, have no obligation to buy back shares.
At 18 February 2011, the total number of ordinary shares purchased from the beginning of the Program was 37.27 million, for a total invested amount
of €665 million.
Reserve for own shares
This reserve amounted to €656,553 thousand at 31 December 2010, unchanged from 31 December 2009.
This reserve is subject to certain restrictions imposed by law (Article 2357-ter of the Civil Code). Changes in the reserve represent increases – through
transfers from the reserve available for the purchase of own shares – for own shares purchased and decreases for own shares sold.
Retained profit/(loss)
At 31 December 2010, retained profit totaled €2,884,134 thousand, an increase of €685,140 thousand over 31 December 2009, as a result of:
the allocation of €85,847 thousand from the prior year’s profit to retained profit/(loss), as approved by Shareholders on 26 March 2010, following
allocations to the Legal reserve and distributions to Shareholders;
the transfer of €599,293 thousand from the reserve available for the purchase of own shares, following the reduction in the amount authorized for the
purchase of own shares, approved by Shareholders on 16 September, already referred to above.
Gains/(losses) recognized directly in equity
This reserve includes gains and losses recognized directly in equity and in particular those arising from fair value adjustments on investments in other
companies, as described previously (see Note 11).