in the First Half of 2003 98th Fiscal Year - FIAT SpA

The capital stock fully paid in at June 30, 2003 is 3,082 million euros, equal to 616,425,600 shares. It is composed of the following:
❚ 433,220,490 ordinary shares
❚ 103,292,310 preference shares
❚ 79,912,800 savings shares
all with a par value of 5 euros each.
It should be noted that the Stockholders’ Meeting of September 12, 2002 authorized the Board of Directors, by September 11, 2007,
to increase the capital stock, in a single transaction, or repeatedly, up to a maximum of 8 billion euros, and to issue bonds or
convertible bonds up to the same amount, but without exceeding in any one transaction the limits set forth by law.
With reference to the Mandatory Convertible facility, described in Note 10 hereunder, the same Stockholders’ Meeting established that
the Directors, by virtue of the aforesaid mandate and the particular conditions and terms established therein, must resolve, in the event
the facility is not repaid at an earlier date, the capital stock increase and reserve it, in accordance with paragraph 7 of Article 2441 of the
Italian Civil Code, for the banks identified in the aforementioned resolution, with subscription and payment of the newly issued ordinary
shares to be carried out exclusively by compensating the Banks’ receivables for principal up to a maximum total of 3 billion euros, and
subsequently a rights offering to stockholders. The issue price of these shares will be equal to the average of 14.4409 euros and the
average value of stock market quotations during the preceding months.
Furthermore, on June 26, 2003 the Board of Directors passed a resolution pursuant to the aforesaid mandate for a capital increase
that was concluded in August for an aggregate par value of approximately 1,836 million euros, upon subscription of the 367,197,108
ordinary shares reserved for the rights offering, in the ratio of three new ordinary shares at the price of 5 euros each for every five
shares owned, regardless of the class of stock.
9 Reserves for risks and charges
(in millions of euros) At 6/30/2003 At 12/31/2002 Change
Income tax reserves:
42 Fiat Group Consolidated Financial Statements and Notes at June 30, 2003
Current income tax reserve 108 199 (91)
Deferred income tax reserve 981 1,236 (255)
Total Income tax reserves 1,089 1,435 (346)
Warranty reserve 828 841 (13)
Various liabilities and risk reserves and Reserve for pensions 4,435 4,745 (310)
Insurance policy liabilities and accruals 94 9,605 (9,511)
Insurance policy liabilities and accruals where the investment
risk is borne by policyholders, and those related to pension plan management – 7,000 (7,000)
Total Reserves for risks and charges 6,446 23,626 (17,180)
The decrease of Reserves for risks and charges of 17,180 million euros is mainly due to the decrease of insurance policy liabilities and
accruals and of Insurance policy liabilities and accruals where the investment risk is borne by policyholders, and those related to
pension plans (16,511 million euros), upon sale of the Toro Assicurazioni Group. The decrease in the Other liabilities and risk reserves
and Reserve for pensions of -310 million euros is due to the Change in the scope of consolidation for -89 million euros, negative
Foreign exchange effects for -111 million euros, and changes for -110 million euros.
The Deferred income tax reserve at June 30, 2003 includes deferred tax liabilities, net of deferred tax assets, that have been offset
where possible by the individual companies. The net balance of the Deferred income tax reserve and Deferred tax assets posted
under other receivables is broken down as follows:
(in millions of euros) At 6/30/2003 At 12/31/2002 Change
Deferred income tax reserve 981 1,236 (255)
Deferred tax assets (3,063) (3,499) 436
Total (2,082) (2,263) 181
The net change with respect to December 31, 2002 shows net assets that are lower by 181 million euros. This change derives from
use of previously allocated deferred tax assets and new provisions for 81 million euros, the foreign exchange effect for 42 million