Financial Reporting - Rexel

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