Chrysler 2013 Annual Report Download - page 323

322 Fiat S.p.A.
Statutory Financial
Statements
at 31 December 2013
Notes
Teksid
Fiat S.p.A. is subject to a put option held by Renault (with reference to the original 33.5% investment in Teksid, now 15.2%).
In particular, Renault has the right to sell its interest in Teksid to Fiat in the event of:
a breach in application of the protocol agreement and admission to receivership or other administrative proceeding
Renault’s investment in Teksid falling below 15% or Teksid deciding to make a significant strategic investment outside the foundry sector
control of Fiat being acquired by another automaker
The exercise price of the option is established as follows:
for the original 6.5% of the share capital of Teksid, the initial investment price increased by a given interest rate
for the remaining amount of share capital of Teksid, the share of the accounting net equity at the exercise date
Contingent liabilities
In connection with significant asset divestitures carried out in prior years, Fiat S.p.A. directly or indirectly through its subsidiaries provided
indemnities to purchasers with the maximum amount of potential liability under these contracts generally capped at a percentage of the
purchase price. These liabilities primarily relate to liabilities potentially arising from a breach of representations and warranties under these
contracts and, in certain instances, environmental or tax matters, generally for a limited period of time. At 31 December 2013, potential
obligations relating to these indemnities were approximately €178 million (approximately €368 million at 31 December 2012), net of provisions
set aside by individual companies. Certain other indemnities have been provided that do not limit potential payment and, as such, it is not
possible to estimate the maximum potential future payments that could result from claims made under these indemnities.
Certain claims for damages are still pending against Fiat S.p.A. Given this fact and the specific conditions of the related proceedings, the
possible outcome of this situation cannot be reasonably estimated and, therefore, the likelihood of any costs to be borne by the Company
cannot be determined.
27. Information on financial risks
Fiat S.p.A. measures and manages financial risks in accordance with Group policy.
The major categories of risk to which the Company is exposed are set out below.
Credit risk
At 31 December 2013, Fiat S.p.A.’s maximum nominal credit exposure consisted of the carrying amounts of financial assets and the par value
of guarantees issues (as discussed in Note 26).
Amounts receivable at the balance sheet date are essentially due from Group companies and related parties, from the tax authorities and from
Rete Ferroviaria Italiana S.p.A. The risk on receivables from the latter company is limited to the margin earned by Fiat S.p.A. (of approximately
3.5%), since a condition for the settlement of payables to consortium companies is the receipt of the amounts due from Rete Ferroviaria Italiana
S.p.A.
Guarantees issued were almost exclusively on behalf of Group companies.
At 31 December 2013, there were no material amounts past due.