2008 Registration Document - Rexel

14.5 DIVIDEND POLICYRexel has distributed the following dividends during the lastthree financial years:Year Total dividend Dividend per share2006 – –2007 €94,717,715.99 €0.372008 –* –** Amount to be submitted to the approval of the shareholders’meeting of May 20, 2009.After the prior authorization of the Supervisory Board, theManagement Board may propose a dividend distribution tothe general shareholders’ meeting.Dividends that have not been claimed within five yearsafter they have been declared are transferred to the FrenchState.14.6 LEGAL PROCEEDINGS AND ARBITRATIONThe Rexel Group may be subject to legal, administrative orregulatory proceedings in the normal course of its business.When there is a sufficient probability that litigation will resultin costs to Rexel or to one of its subsidiaries, the RexelGroup establishes a provision for it in its accounts.14.6.1 Tax litigationAs at the date of this Document de Référence, to theknowledge of the Rexel Group, the principal tax proceedingsinvolving the Rexel Group companies are described below.Rexel Développement manages certain of the taxproceedings mentioned below pursuant to the liabilitywarranty granted by the PPR group in the scope of thetransfer agreements of Rexel Distribution entered into in2005 between the investment consortium holding interestsin Rexel and the PPR group. This indemnity is capped at€50 million. In accordance with this indemnity, tax auditnotices and proposed responses to the tax authorities aretransmitted to the PPR group for its information and, whereapplicable, its prior approval.Rexel Développement and the PPR group signed anadditional agreement on October 12, 2006, aiming atspecifying that the liability warranty applies to the litigationsreferred to below involving Rexel Distribution and RexelDéveloppment. As at 2008 year-end, the PPR Group hadpaid a total amount of €5.0 million in relation to settledclaims in the scope of this warranty.14.6.1.1 Litigation covered by the liability warrantygranted by the PPR groupRexel DistributionAdditional tax in the amount of €3.5 million had been subjectto a collection notice, further to a tax audit in relation to the2002 to 2004 financial years, out of which the company hadaccepted €0.2 million.The €3.3 million balance relates to a provision that wasestablished in 2002 with respect to 524,000 treasury sharesin order to take into account the drop in the share price atthat time. Rexel Distribution cancelled the net book value ofthese shares without eliminating the related provision. Thetax authorities have objected to the tax treatment of thisprovision. Rexel Distribution has filed a proceeding beforethe French administrative court.Rexel Développement SARL (mergedwith Rexel Développement on January 1, 2008)Rexel Développement SARL was the subject of a taxreassessment following an accounting audit relating to the2002 through 2004 fiscal years. This reassessment mainlyrelates to services provided to Rexel Distribution and certainother Group subsidiaries for insufficient remuneration.Rexel Développement SARL entered into a settlementwith the tax authorities for approximately €3.3 millionon December 4, 2006. This amount was reduced to€3.2 million on February 13, 2007. Despite this settlement,Rexel Développement SARL was subject to an additional€1.8 tax reassessment, which has been challenged byRexel Développement SARL. Without answering, the taxauthorities requested payment of this amount based onthe allegation that the company had not complied with itspayment obligations under the general settlement, whichwas challenged by the company.Rexel, Inc. Group (United States)In 2007, the Group was subject to tax reassessmentsconcerning sales taxes for the 2001 to 2005 financial yearsand resulting in $23 million in additional tax payments.These disputes were settled in 2008 for a tax amount of$0.9 million.SRP Sud-EstSRP Sud-Est, a company that was absorbed by Rexel FranceS.A.S. in April 2006, was subject to a tax reassessmentfollowing an accounting audit relating to the 2002 through2004 fiscal years. This reassessment principally relatesto provisions established for restructuring and chargesrelating to prior financial years. The company appealed this€0.8 million tax reassessment and has brought a claimREXEL 2008 | PAGE 233