Director’s Report

Salini S.p.A.

Corporate activities are centralised within the parent, Impregilo S.p.A., and relate to the following:

  • coordination, control and strategic planning of the group’s activities;
  • centralised planning and management of human and financial resources;
  • management of administrative, tax, legal/corporate and institutional communications requirements;
  • administrative, tax and management support to group companies.

The net cost of corporate activities amounted to € 44.7 million, unchanged compared with the previous year (€ 44.7 million).

During 2013, the central structures of the Parent Company were significantly affected by development of the "National Champion" project by the shareholder Salini S.p.A.. In this context, and in line with the strategic objectives characterising it, a takeover bid for all the ordinary shares of Impregilo S.p.A. was launched by Salini S.p.A., as a result of which it obtained control of the Impregilo Group in April 2013; in addition, the boards of directors of Impregilo and Salini approved the merger plan, which was also approved by the respective extraordinary general meetings of shareholders held during September 2013. As part of this process, a concrete start was made to the series of activities aimed at effectively integrating the two groups, including their operations. These activities, however, are still developing and it is reasonable to assume that they will occupy the corporate structures for much of 2014.

The merger will take full effect under civil and fiscal law on 1 January 2014. For more exhaustive information in relation to this operation, please refer to the disclosure documents made available to the public in accordance with the laws and regulations in force, prior to the preparation date of this Report.

Risk areas

Tax litigation

With regard to the dispute with the Revenue Agency, this is still pending in the Court of Cassation, following an appeal by the Agency; the dispute concerns the notice of assessment challenging the tax treatment of impairment losses and capital losses recorded by the company during financial year 2003. In particular, the main irregularity concerning the sale - by Impregilo S.p.A. to Impregilo International NV - of the shareholding in the Chilean concessionary company Costanera Norte SA, has been rejected by the Regional Tax Tribunal of Milan.

There are also two disputes pending at first instance relating to financial year 2005 mainly concerning  (i)  the  costs  relating  to  a  joint  venture  set  up  in  Venezuela  and  (ii)  the technicalities employed in the so-called realignment of the value of the shareholdings referred to in art. 128 of Presidential Decree 917/86. A further dispute for financial year 2006 concerning (a) the costs relating to a joint venture set up in place in Venezuela, (b) a capital loss made on equity investments and (c) costs for services not relating to the year, was reduced to approximately 20% of the initial claim by the Provincial Tax Tribunal of Milan and is still pending its decision at second instance. The company, supported by its legal advisers, believes that its actions were proper and has consistently regarded the risk of losing in these cases as improbable, although not impossible.

Other litigation

The corporate structure is not currently involved in any major litigation. Except as more fully described in the context of the Campania USW Projects, it is simply stated that, starting in 2009, following the transfer of the registered office of the Parent Company from the municipality of Sesto San Giovanni (in the province of Milan) to the municipality of Milan, a dispute arose with the lessor of the building in which the former head office was located. The dispute was settled by arbitration in December 2012, the decision upholding the claims made by the lessor, and ordering the Parent Company to pay the remaining lease instalments for the entire duration of the lease, expiring in July 2012. The decision was promptly challenged in the Milan Court of Appeal where the proceedings are still pending. The Parent Company, however, pending the terms of the appeal, had already reflected the effects of the arbitration award in its balance sheet for 2012. Pending appeal of the award, the Parent Company was obliged to pay, subject to the right to claim repayment, the amount of the award to the lessor.

It should be noted that, in relation to the dispute, Impregilo S.p.A., pursuant to the provisions of the contracts entered into with Immobiliare Lombarda S.p.A., the original lessor of the present registered office, is entitled to be held harmless in relation to claims made by the previous lessor for amounts exceeding € 8 million, such entitlement already being exercised by application for a court order. The order was issued by the Court of Milan, and was challenged by Immobiliare Lombarda. Pending the proceedings, however, Impregilo paid the required amount under the contested decision for which no stay was granted.