Financial Reporting - Rexel
Financial Reporting - Rexel
Financial Reporting - Rexel
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23. | RELATED PARTY TRANSACTIONS<br />
Executive compensation<br />
Expenses relating to compensation of the executive committee members of the Group are as follows:<br />
For the year ended December 31,<br />
(in millions of euros) 2011 2010<br />
Salaries and other short-term benefits …………………………. 12.4 11.1<br />
Post-employment benefits (service costs) …………………….…… 0.9 2.4<br />
Indemnities at termination of contract …………………………….… - 0.6<br />
Free shares and stocks options (1) …………………………………… 3.8 2.2<br />
(1)<br />
Share-based payment expense is detailed in Note 15.1 – Free shares schemes<br />
Salaries and other short-term benefits comprise the social security contributions and payroll taxes paid by<br />
the Group.<br />
In the event of a breach of employment contract, the Group could have to compensate the executive<br />
committee members a total amount of €13.4 million.<br />
24. | LITIGATION<br />
24.1 | Litigation<br />
The <strong>Rexel</strong> Group is subject to legal, administrative and regulatory proceedings in the normal course of its<br />
business. A provision is recognized in the balance sheet when it is probable that an outflow of economic<br />
benefits from <strong>Rexel</strong> or one of its subsidiaries will be required to settle the obligation and when the amount<br />
can be estimated reliably.<br />
The principal proceedings are set out below.<br />
Litigation relating to Elettroveneta<br />
During 2007, <strong>Rexel</strong> Italia, an indirect subsidiary of <strong>Rexel</strong>, considered the acquisition of Elettroveneta, an<br />
Italian corporation operating mainly in the region of Veneto. In 2007, further to a disagreement on the price,<br />
the signature of the agreement was cancelled. On July 31, 2008, the shareholders of Elettroveneta filed a<br />
claim with the court of Monza against <strong>Rexel</strong> Italia, <strong>Rexel</strong> SA and its manager based on the allegation that an<br />
agreement on the price had been reached and that an agreement therefore existed between the parties<br />
despite the lack of signature.<br />
Elettroveneta’s shareholders have filed a claim with the Court of Monza to be indemnified for the losses<br />
suffered, for a minimum amount of €24.8 million excluding interest. The Court of Monza recognized that it<br />
was not competent to rule on the matter and dismissed itself. The proceedings were reinstated soon<br />
thereafter by Elettroveneta before the Court of Milano. On November 15, 2011, the Court of Milano ruled in<br />
favor of <strong>Rexel</strong>.<br />
On January 31, 2012, the parties entered into a transaction to settle any claim in connection with the<br />
possible acquisition of Elettroveneta by <strong>Rexel</strong> Italia and to the case filed before the Court of Milano. As part<br />
of this settlement <strong>Rexel</strong> Italia paid €160,000 to Elettroveneta’s shareholders.<br />
Asbestos litigation<br />
The Group is party to several proceedings relating to exposure to asbestos-containing materials in the United<br />
States. The Group believes that the risk of it being ordered to pay significant amounts in connection with<br />
these proceedings is limited, and that these lawsuits will not therefore have, individually or as a whole, a<br />
material adverse effect on its financial condition or results of operations, since the claims may be rejected or<br />
settled for amounts partially or fully covered by <strong>Rexel</strong>’s insurance policies. Considering the wide range of<br />
these claims, the different stages in the proceedings, the number of defendants and the absence of any<br />
individual claim against the Group, the Group cannot give any assurances in this respect, nor can it predict<br />
with certainty what the outcome of these lawsuits will be. Based on the current situation, the Group is<br />
therefore unable to predict the financial consequences that may result from these proceedings.<br />
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