THE FIAT GROUP IN - Fiat SpA

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Report of the Board of Statutory Auditors Pursuant to Article 41 of Legislative Decree No. 127/1991 Dear Stockholders: The consolidated financial statements of the Fiat S.p.A. Group at December 31, 2001, including the balance sheet, statement of operations and respective notes, which are being submitted for your consideration, show net loss of 445 million euros. They were communicated to us within the statutory deadlines, together with the Report on Operations, and were prepared in accordance with the method of presentation required under Legislative Decree No. 127 of April 9, 1991. The tests carried out by Arthur Andersen S.p.A., which is responsible for the audit, have shown that the amounts included in the financial statements are consistent with the Parent Company’s accounting records, the statutory and consolidated financial statements of its subsidiaries and the official information provided by said subsidiaries. The financial statements communicated by the subsidiaries to the Parent Company for the purpose of compiling the consolidated financial statements were prepared by the respective management entities, reviewed by the entities and/or individuals responsible for monitoring each individual company, as required under the pertinent legal systems, and audited by independent accountants, in accordance with the procedure required for certification of the consolidated financial statements. Consequently, the Board of Statutory Auditors did not review these financial statements. The determination of the scope of consolidation, the selection of the principles used to consolidate investments in subsidiaries and associated companies and the procedures used for that purpose comply with the requirements of Legislative Decree No. 127 of April 9, 1991. Therefore, the structure of the consolidated financial statements is technically correct and consistent overall with the pertinent legislation. In particular, it also provides the information required by the Consob with registered letter DAC/RM/97002477 of March 14, 1997 concerning companies whose securities are listed both in Italy and in regulated markets in North America. The Report on Operations presents fairly the results and financial position, as well as the operations in 2001 and the events that have occurred since the end of the fiscal year, for the complex of companies subject of the consolidation process. Based on our examination, this report is consistent with the consolidated financial statements. Turin, April 18, 2002 The Statutory Auditors Cesare Ferrero Giorgio Ferrino Lamberto Jona Celesia 125 125
126 126 Report of the Board of Statutory Auditors Pursuant to Article 153 of Legislative Decree No. 58/1998, and Article 2429, Section 3, of the Italian Civil Code Dear Stockholders: Article 153 of Legislative Decree No. 58 of February 24, 1998 requires that the Board of Statutory Auditors report to the Stockholders’ Meeting the results of its oversight activity, indicating any omissions or improper transactions it discovered, and empowers it to put forth motions regarding the financial statements, their approval and other matters under its jurisdiction. This Report is provided in accordance with the abovementioned provision. During the fiscal year just ended, we performed the duties incumbent upon us under Article 149 of Legislative Decree No. 58 of February 24, 1998, and are able to report specific information on the subjects listed below. We attended the meetings of the Board of Directors, where we received detailed information on the Company’s operations and on the main operating, financial and asset transactions carried out by the Company and/or its subsidiaries. In this area, we determined and ascertained that all pending or completed transactions comply with all pertinent provisions of the law or the Articles of Association, are not in conflict with any resolution adopted by the Stockholders’ Meeting or produce no potential conflicts of interest, and are consistent with the principles of good management. The Company’s organization is adequate, based on the size of the Company. As part of our work, we met with the Company officials who oversee its organization and with representatives of the Independent Auditors, from whom we obtained comprehensive information indicating that the Company was complying with the principles of fair and efficient administration. The Board of Directors created an Audit Committee and a Compensation Committee. In addition, a system of internal control has been established at the Group level and is operational at Fiat S.p.A. and its subsidiaries. We express a favorable opinion on the Company’s system of internal control, and on its ability to check the proper implementation of the internal operating and administrative procedures adopted to ensure that the Company is managed properly and efficiently, while at the same time identifying, preventing or minimizing financial and operating risks and the danger of fraud. Based on our determinations and on the information garnered in previous fiscal years, we further believe that the Company’s administrative and accounting system is adequate for the purpose of presenting fairly the results of operations. The guidelines provided by Fiat S.p.A. to its subsidiaries pursuant to Article 114, Section 2, of Legislative Decree No. 58/98 also appear to be adequate. The Board of Directors provided us with the Report on Operations for the first half of 2001 within the statutory deadline and published it within the deadlines and in accordance with the formalities required by the Consob. It also complied with statutory requirements concerning the publication of quarterly reports. With a letter dated June 25, 2001, the stockholder who had written the two memoranda discussed in our Report on the financial statements at December 31, 2000 indicated that he was not satisfied with the written explanations that, as the Chairman had promised, were provided to him in response to the questions and doubts he had raised at the Stockholders’ Meeting of May 14, 2001. Subsequently, with a summons served on September 27, 2001, the same stockholder contested the approval of the financial statements at December 31, 2000. Fiat S.p.A. instituted the requisite legal action, which is currently pending before the Courts. With regard to the Consob Communications of February 20, 1997, March 2, 1998 and April 6, 2001, insofar as they apply to our task, we can confirm the following: ❚ The information provided by the Board of Directors in its Report on Operations is exhaustive and complete. ❚ As required by the Consolidated Law on Financial Intermediation (Legislative Decree No. 58-98), the Board of Statutory Auditors has been regularly informed on matters falling under its jurisdiction. ❚ The regular checks and audits of the Company conducted by us reveal no atypical or unusual transactions. ❚ With regard to intra-Group transactions, the Board of Directors mentions in its Report on Operations that numerous transactions involving the delivery of goods and the provision of services took place among the Company, the Group companies and/or related parties on standard market terms, and explains these transactions. ❚ The Auditors’ report contains no objections or added disclosures, nor does it set forth qualifications or suggestions. ❚ As already mentioned above, the relevant components of the Company’s organization are adequate for their purpose and its administrative and accounting system is reliable in providing a fair presentation of the results from operations. ❚ The system of internal control is adequate and effective and, as explained in the Report on Operations, is carefully monitored by the Audit Committee. ❚ During 2001, the Board of Directors met nine times. We were present at all of these meetings. The Board of
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THE FIAT GROUP IN 2001 Consolidated
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Financial Highlights of the Fiat Gr
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2 2 Consolidated Balance Sheet ❚
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8 8 Consolidated Statement of Opera
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10 10 the subsidiaries operating in
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12 12 the exchange rate in effect a
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14 14 the Government or the EU are
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16 16 In particular, with respect t
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18 18 Unconsolidated subsidiaries a
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20 20 Receivables At 12/31/2001 At
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22 22 5 Receivables An analysis of
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24 24 Financial receivables amount
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26 26 Retained earnings and Other r
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28 28 Other reserves Restructuring
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30 30 Less From 5% From 7.5% From 1
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32 32 Commitments (in millions of e
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34 34 15 Value of production Revenu
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36 36 Other operating costs (in mil
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38 38 The balance of Interest incom
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40 40 20 Income taxes Income taxes
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42 42 Research and development expe
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44 44 Reconciliation of Net Income
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46 46 23 Translation of foreign fin
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48 48 Balance Sheet ❚ ASSETS Dece
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50 50 Balance Sheet ❚ MEMORANDUM
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52 52 Statement of Operations ADJUS
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54 54 Receivables and payables deno
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56 56 Depreciation taken in 2001 wa
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58 58 Decreases include: (in thousa
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60 60 The latter advance was paid p
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62 62 8 Accrued income and prepaid
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64 64 The table below shows the cha
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66 66 12 Payables Borrowings from b
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68 68 14 Memorandum accounts Unsecu
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70 70 16 Costs of production Raw ma
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72 72 This item amounted to 1,278 t
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Page 79 and 80: 76 76 Art. 10, Law No. 72 of March
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Page 85 and 86: 82 82 Treasury stock at December 31
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Page 91 and 92: 88 88 The Companies of the Fiat Gro
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THE FIAT GROUP IN - Fiat SpA

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