Fiat S.p.A. is not subject to the direction and coordination of any other company or entity and has full independence to define its strategic and operating guidelines. Fiat’s direct and indirect subsidiaries in Italy have, with a few specific exceptions, named Fiat 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 and risk management system, corporate governance model and corporate structure, establishment of a group-wide Code of Conduct, in addition to definition of policies for the management of personnel and financial resources, and for the procurement of production materials, and marketing and communications services. Coordination of the Group also encompasses centralized cash management, corporate and accounting, and internal audit services, including 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.
Subsidiaries headquartered outside Italy generally benefit from those activities. However, Chrysler, which has a board of directors composed of a majority of members not affiliated with Fiat S.p.A., relies directly on capital markets funding for its operations and for those of its subsidiaries and manages its financial resources independently. The board of directors of Chrysler Group LLC, in addition to ensuring maintenance of Chrysler Group’s standalone financial integrity, has oversight responsibilities for Chrysler Group operations, including approval of capital expenditures above certain levels and, during 2013, the review and approval of non-Alliance transactions above de minimis levels between Fiat and Chrysler Group LLC. On 21 January 2014, Fiat S.p.A., through its wholly owned subsidiary Fiat North America LLC, completed the acquisition of all of the VEBA Trust’s membership interests in Chrysler Group LLC. Chrysler Group subsequently became an indirect wholly-owned subsidiary of Fiat (see “Subsequent Events” for further details).