Annual Report on Corporate Governance (February ... - FIAT Industrial

INDEPENDENT
AUDITS
DIRECTION AND
COORDINATION
SHARE CAPITAL
class; establishment of a dedicated fund to meet expenditures necessary for the safeguarding of the common interests of
those shareholders; management of legal disputes with the company, and other areas of common interest.
On 22 February 2011, the Board of Directors of Fiat Industrial approved – confirming the resolution passed on
27 October 2011 – a proposal for conversion of the Company’s preference and savings shares into Fiat Industrial ordinary
shares at a ratio of 0.700 ordinary shares per preference share and 0.725 ordinary shares per savings share.
In relation to the 2011 financial year, economic rights attached to preference shares and savings shares will remain
unchanged. Should the proposal be approved, ordinary shares issued in relation to the conversion will be eligible for
dividends declared subsequent to 1 January 2012.
The motions formulated by the Board of Directors will be submitted to Shareholders for approval at the General Meeting
(extraordinary session) called for approval of the 2011 financial statements. Furthermore, the motions will be submitted
to holders of preference and savings shares for approval at special meetings called specifically to vote on the proposal.
If the proposed conversions are approved by Shareholders in the extraordinary session of the <strong>Annual</strong> General Meeting
and the respective Special Meetings, any holders of preference and savings shares who were absent or did not vote in favor
will have the right to redeem their shares for a period of fifteen days from the date that the resolutions are filed with the
Companies Register. The redemption value will be determined and announced in accordance with the legal requirements.
As required by law, accounting audits are performed by independent auditors duly registered in the official register. Based
on the recommendation of the Board of Statutory Auditors, on 13 October 2010 the general shareholders’ meeting
appointed Reconta Ernst & Young S.p.A. as the Company’s independent auditors for the nine-year period 2011–2019,
with effect from the date of the Demerger.
Fiat Industrial is not subject to the direction and coordination of any other company or entity and has full independence
to define its strategic and operational guidelines. Fiat Industrial’s direct and indirect subsidiaries in Italy have, with a few
specific exceptions, identified Fiat Industrial as the entity which, pursuant to Article 2497-bis of the Civil Code, exercises
direction and coordination over them. That activity consists in: setting general strategic and operating guidelines for
the Group through definition and updating of the internal control system, corporate governance model and corporate
structure: establishment of a group-wide Code of Conduct, definition of the policies for the management of personnel,
financial resources and external communications. Coordination of the Group also encompasses group control, internal
audit and legal services, as well as centralized cash management, through specialized companies.
Direction and coordination undertaken at group level enables subsidiaries, which retain full management and operating
autonomy, to realize economies of scale by availing themselves of professional and specialized services with improving
levels of quality and to concentrate their resources on management of their core business.
SECTION II – CAPITAL STRUCTURE AND SHAREHOLDERS
As a result of the Demerger, which took effect on 1 January 2011, the share capital of Fiat Industrial is €1,913,298,892.50
and consisted of: 1.092.327.485 ordinary shares (85.64% of share capital), 103,292,310 preference shares (8.10% of share
capital), and 79,912,800 savings shares (6.26% of share capital).
No authorizations to increase share capital pursuant to Article 2443 of the Civil Code have been granted.
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