FINANCIAL AND ACCOUNTING INFORMATION the number of defendants and the absence of any the reassessment decision for years 2008-2012, individual claim, the Group cannot precisely assess resulting in an amount of tax payable of €11.3 million the financial consequences that may result from for fiscal years 2008-2012. The branch lodged an these proceedings. appeal in 2015 before the Board of Adjustments. In December 2015, reassessments for fiscal years 2013 ACCC (Australia) and 2014 were issued, resulting in additional amount On December 3, 2014, the Australian Competition of tax of €1.5 mil lion, which the branch contested and Consumer Commission (ACCC) commenced also. In April 2017, the Board of Adjustments rejected civil proceedings in the Federal Court of Australia the branch’s claim. In July 2017, the Group referred against several parties, including the Austral ian the case before the court. Rexel considers that it is affil iate of the Group (Rexel Electrical Suppl ies more likely than not that the matter will be resolved PTY Ltd). The proceedings had been filed against favorably in its interest and has therefore not five companies, six individuals and an industry recorded a provision. association for al leged cartel and exclusionary To the best of Rexel’s knowledge, over the last conduct in the supply and acquisition of electrical financial year there were no other legal or arbitration cable in Australia. The last hearing took place on proceedings that might have or recently had February 12, 2016. The judgement was issued on a material impact on the financial March 9, 2017 and dismissed both claims brought situation or by the ACCC. Further to this decision, the ACCC profitability of Rexel. sent a letter dated March 2017, according to which it informed Rexel that it would not file any appeal. This 28.2 Other contingent liabilities case is now closed. The Group has granted the fol lowing warranties The principal tax proceedings involving Group to purchasers in connection with the disposal of companies as of December 31, 2017 are described certain assets. below: Latin America Rexel With respect to the divestment of Latin America Fol lowing a tax audit, Rexel received in operations, the Group committed to indemnify December 2011 a proposed tax reassessment in for any damage incurred by the purchaser up to which the French tax authorities al lege that Rexel US$9 mil lion. In 2016, Rexel received a notice of did not demonstrate that its borrowings from Ray claims for €1.3 million, settled for €0.4 million in 2017. Finance LP (subsidiary of Ray Investment SARL) Slovakia, Poland and the Baltics amounting to €952 mil lion were real transactions; they also al leged that Ray Finance LP enjoyed a The agreements entered into with Würth group in privileged tax regime and accordingly, rejected the connection with the disposal of operations in Slovakia, deduction of €91 million of interest expense related Poland and the Baltics provide for indemnification of to the 2005 to 2007 tax years. Rexel disputes the any damage and liability incurred by the purchaser. tax authority’s position entirely and referred the The aggregate liability for indemnification shall not case to the Administrative Court in April 2014. A exceed €8 million. This warranty had not been called provision amounting to €32 mil lion was recorded as of the balance sheet date. by writing down deferred tax assets on tax losses carried forward. The Administrative Court decided Environmental warranty in March 2016 that Rexel’s position was correct. Tax Under an agreement signed on February 28, 2003 authorities lodged an appeal against that judgment with Ashtenne, a real estate company, concerning a in July 2016. The provision was maintained. sale and leaseback transaction relating to 45 sites in Europe, the Group agreed to indemnify the purchaser Hagemeyer Finance BV Finnish branch for any environmental liabilities with respect to third In a report in May 2014, Finnish tax authorities party claims and governmental injunctions. This asserted that the interest on the financing used warranty covers a maximum of €4 mil lion free of to acquire Elektroskandia Oÿ in 2008 should be VAT for all of the properties sold, with a minimum al located to the Dutch head office of Hagemeyer threshold of €30,000. This commitment expires five Finance BV, rather than to the Finnish branch. On that years after the expiration of the leases. This warranty ground, tax authorities issued, in December 2014, had not been called as of the balance sheet date. REXEL 2017 – REGISTRATION DOCUMENT 266