Chrysler 2014 Annual Report Download - page 241

2014 | ANNUAL REPORT 239
Bonds that are traded in active markets for which close or last trade pricing is available are classified within Level 1 of
the fair value hierarchy. Bonds for which such prices are not available (valued at the last available price or based on
quotes received from independent pricing services or from dealers who trade in such securities), which are primarily
the FCA US Secured Senior Notes (i.e. the 2019 Notes and 2021 Notes), are categorized as Level 2. At December 31,
2014, €13,433 million and €5,361 million of Bonds were classified within Level 1 and Level 2, respectively.
The fair value of Other debt included in Level 2 of the fair value hierarchy has been estimated using discounted
cash flow models. The main inputs used are year-end market interest rates, adjusted for market expectations of the
Group’s non-performance risk implied in quoted prices of traded securities issued by the Group and existing credit
derivatives on Group liabilities. The fair value of the debt that requires significant adjustments using unobservable
inputs is categorized in Level 3 of the fair value hierarchy. At December 31, 2014, €13,144 million and €2,541 million
of Other Debt were classified within Level 2 and Level 3, respectively.
31. Related party transactions
Pursuant to IAS 24 - Related Party Disclosures, the related parties of the Group are entities and individuals capable
of exercising control, joint control or significant influence over the Group and its subsidiaries. Related parties include
companies belonging to the Exor group (the largest shareholder of FCA through its 29.25 percent common shares
shareholding interest and 44.37% voting power at December 31, 2014) who also purchased U.S.$886 million (€730
million) in aggregate notional amount of mandatory convertible securities that were issued in December 2014 (Note
23). Related parties also include CNHI and other unconsolidated subsidiaries, associates or joint ventures of the
Group. In addition, at December 31, 2014, members of the FCA Board of Directors, Board of Statutory Auditors and
executives with strategic responsibilities and their families are also considered related parties.
The Group carries out transactions with unconsolidated subsidiaries, joint ventures, associates and other related
parties, on commercial terms that are normal in the respective markets, considering the characteristics of the goods or
services involved. Transactions carried out by the Group with unconsolidated subsidiaries, joint ventures, associates
and other related parties are primarily of those a commercial nature, which have had an effect on revenues, cost of
sales, and trade receivables and payables; these transactions primarily relate to:
the sale of motor vehicles to the joint ventures Tofas and FCA Bank leasing and renting subsidiaries;
the sale of engines, other components and production systems and the purchase of commercial vehicles with the
joint operation Sevel S.p.A. Amounts reflected in the tables below represents amounts for FCA’s 50.0 percent
interest in 2012 and in 2013 when the interest in Sevel was accounted for as a joint operation;
the sale of engines, other components and production systems to companies of CNHI;
the provision of services and the sale of goods with the joint operation Fiat India Automobiles Limited. Amounts
reflected in the tables below represents amounts for FCA’s 50.0 percent interest from 2012 when the entity became
a joint operation;
the provision of services and the sale of goods to the joint venture GAC Fiat Chrysler Automobiles Co. Ltd;
the provision of services (accounting, payroll, tax administration, information technology, purchasing and security) to
the companies of the CNHI;
the purchase of commercial vehicles from the joint venture Tofas;
the purchase of engines from the VM Motori group in 2012 and in the first half of 2013;
the purchase of commercial vehicles under contract manufacturing agreement from CNHI.