Corporate
The activities included in this category, which are centrally operated by the Salini Impregilo S.p.A., the Group’s Parent Company, include the following:
- coordination, control and strategic planning of the Group’s activities;
- centralized planning and management of human and financial resources;
- compliance with administrative, tax, legal/corporate and corporate communication requirements;
- administrative, tax and managerial support for Group companies.
Share buy-back
The Ordinary Shareholders’ Meeting of Salini Impregilo S.p.A., held on September 19, 2014 resolved to authorize the Board of Directors for the purchase and disposal of ordinary treasury shares - pursuant to articles 2357 and 2357-ter of the Italian Civil Code, Article 132 of Legislative Decree no. 58 of February 24, 1998 ("Consolidated Finance Act") and article 144-bis of the Issuers’ Regulation adopted by Consob through Resolution no. 11971 of May 14, 1999, as amended ("Issuers’ Regulation") - in accordance with the procedures and terms contained in the proposal made by the Board on August 12, 2014, in order to provide the Company an instrument that is widely used by listed companies, to take up investment opportunities for all purposes permitted by the applicable provisions, including the purposes contemplated in the "market practices" permitted by Consob pursuant to Article 180.1c of the Consolidated Finance Act through Resolution no. 16839 of March 19, 2009, and in EC Regulation no. 2273/2003 of December 22, 2003.
The authorization for the purchase and disposal of ordinary treasury shares has been issued for the purposes of:
- buying ordinary treasury shares with a view to medium and long term investment;
- establishing a portfolio of ordinary treasury shares to be used for extraordinary financing transactions and/or for other uses considered of financial, operational and/or strategic interest to the Company;
- establishing a portfolio of treasury shares to service the remuneration and retention plans for management and personnel;
- operating on the market, in compliance with the laws and regulations in force and through intermediaries, to support the liquidity of the Company’s shares and for the purpose of stabilizing their price.
The authorization for the purchase and disposal of ordinary treasury shares has been granted:
- up to a maximum number of ordinary treasury shares that does not exceed 10% of the total number of shares outstanding at the time of the transaction (or, if less, up to the maximum limit set from time to time by the legal and regulatory provisions), also considering any ordinary treasury shares held by the Company at that date either directly or indirectly through its subsidiaries;
- for a period of 18 months from the date of the authorizing shareholders’ meeting resolution;
- at a unit price that cannot differ in any event, either upwards or downwards, by more than 20% with respect to the price recorded for the share in the stock exchange trading session prior to each individual transaction, subject to obtaining adequate financial cover compatible with the Company’s investment programs and plans, in accordance with the operational conditions established for the "market practices" permitted by Consob.
The authorization for the disposal of the ordinary treasury shares has been granted at the price or, in any event, according to the criteria and conditions to be determined, on each occasion, by the Board of Directors, taking into account the transaction methods used, the performance of the ordinary share prices during the period prior to the transactions, and the Company’s best interest.
The Ordinary Shareholders Meeting also authorized the Board of Directors to carry out transactions for the purchase and, without time limits, for the disposal of ordinary treasury shares in accordance with any of the methods permitted by the current regulations (also through subsidiaries) that are appropriate to meet the objectives sought, to be selected, on each occasion, at the discretion of the Board.
The share buy-back program was launched on October 6, 2014. At the date of preparation of this Annual Report, a total of 3,104,377 shares have been purchased, worth a total of €7,676,914.46.
Risk areas
Tax litigation
Regarding the dispute with the Italian tax authorities opened by the Company (then Impregilo), it is noted that:
- it is still pending before the Court of Cassation due to the appeal filed by the opposing party, concerning the notice of assessment challenging the tax treatment of impairment losses and capital losses recorded by the company during financial year 2003. As previously reported, the main observation concerning the sale – made by Impregilo S.p.A. to Impregilo International NV – of the investment held in the Chilean company Costanera Norte SA was dismissed by the Milan Regional Tax Commission on September 11, 2009;
- a first instance ruling is still pending for a dispute related to 2005, concerning the technical instrument for the so-called realignment of equity investments referred to in Article 128 of Presidential Decree No. 917/86;
- a further dispute is pending relating to the same tax period referred to in the previous point and concerning the costs incurred by a participatory association established in Venezuela. The company lost the case at first instance and has submitted an appeal;
- an additional charge was identified by the Italian tax authorities for the year 2006 concerning (a) the costs incurred by a participatory association established in Venezuela, (b) a loss realized on an equity investment, and (c) costs for services not attributable to the year. In the ruling at second instance, the Milan Regional Tax Commission – with decision on May 28, 2014 – cancelled almost all of the tax claim. The Italian tax authorities did not challenge the ruling, which therefore became definitive.
Regarding the pending disputes, the Company – comforted by the option of its tax counsel – believes that its actions were proper and, consequently, treated the associated risk as improbable, but not impossible.
In addition, the Italian Finance Police – Milan Tax Police Unit have begun a tax audit of the company regarding IRES tax, IRAP tax and VAT for the years 2011 and 2012. While in progress, the audit was extended to the year 2010.
Other litigation
The Corporate functions are not currently involved in any major litigation. Except for that disclosed in greater detail later in this report with regard to the SUW Campania Projects, the only other litigation arose in 2009 with the lessor of the building where the old head office was located, in connection with the relocation of the Parent Company’s head office from Sesto San Giovanni (Milan) to Milan. The dispute was decided in December 2012 by an arbitration award that upheld the lessor’s claims, ordering the Parent Company to pay rent for the entire duration of the lease expiring in July 2012. This award was promptly challenged before the relevant Milan Court of Appeals, before which the proceedings are currently pending. However, in 2012, before the expiration of the appeal deadline, the Parent Company had already recognized the impact of the arbitration award on its statement of financial position. Moreover, while the appellate proceedings were pending, the Parent Company was forced to pay the amount awarded to the lessor, reserving the right to a refund.
With regard to this dispute, Salini Impregilo S.p.A. (formerly Impregilo S.p.A.), by virtue of the provisions of the contract executed with Immobiliare Lombarda S.p.A., in its capacity as the original lessor of the premises where the head office is currently located, holds the right to be held harmless from claims made by the previous lessor in excess of €8 million, which it exercised by means of a payment injunction. The payment injunction was issued by the Court of Milan and challenged by Immobiliare Lombarda. However, while the proceedings are in progress, the opposing party paid the full amount of the claim, as the court refused to stay the enforcement of the payment injunction.