353
The year under review also saw a number of significant
transactions and events that warrant specific mention in this
report, for memorandum purposes only in specific relation to
our supervisory duties. The Board of Directors has provided
adequate disclosure about such transactions and events in its
report, to which reference should be made for more details.
Such transactions and events included:
• the consolidation of the Company’s leading position in
power transmission cables; Prysmian is present in the
world’s largest underground and submarine connection
projects; among others, during 2012 Prysmian secured a
contract worth approximately Euro 800 million for the
Western HVDC Link project, the new submarine power line
between England and Scotland being built by National
Grid Electricity Transmission, the British grid operator, and
Scottish Power Transmission, the Scottish grid operator,
as well as a contract worth around Euro 400 million for the
MON.ITA project, a new submarine power line between
Montenegro and Italy being built by Terna Rete Italia S.p.A.;
• the repayment of the remaining Euro 670 million under
the Credit Agreement entered in April 2007, after securing
refinancing for Euro 1,070 million under the Forward Start
Credit Agreement signed in January 2010;
• the acquisition in November 2012 of 100% of Global
Marine Systems Energy Ltd (GME) for a purchase price of
approximately Euro 53 million; this is a British company
active in the installation of submarine cables, whose
strategic assets include a cable ship that is already at work
on projects in the North Sea;
• the Group’s capital expenditure in 2012 of approximately
Euro 152 million (Euro 159 million in 2011), of which 58%
for selective increases in production capacity, 14% for
structural maintenance work and 16% for research and
development; and lastly, 12% for product design, aimed at
reducing fixed and variable production costs;
• the continuation of the project to standardise and roll out
the SAP-based financial and management accounting
system; the project was revised in 2011 to take account
of Draka’s integration into the Prysmian Group and will
continue until 2015;
• developments in the antitrust investigation; at the
beginning of 2009, antitrust authorities in Europe, the USA
and Japan started investigations into several European
and Asian cable manufacturers to verify the existence of
alleged anti-competitive agreements in the high voltage
underground and submarine cables markets; subsequently,
the Australian and New Zealand authorities also started
similar investigations. During 2011, the Canadian and
Brazilian antitrust authorities also initiated investigations.
The investigations in Japan and New Zealand have ended
without any sanctions for the Company, while the other
investigations are still in progress and the Group is fully
collaborating with the relevant authorities. In Australia,
the competent authority has filed a case against Prysmian
Cavi e Sistemi S.r.l. and two other cable manufacturers for
alleged violations of antitrust rules in connection with one
particular high voltage underground cable project awarded
in 2003. Prysmian Cavi e Sistemi S.r.l. has duly filed its
defence. In July 2011, Prysmian received a statement of
objection from the European Commission in relation to
the antitrust investigation started by the same European
Commission in January 2009; this document, which does
not prejudge any decision by the authority, contains
the Commission’s preliminary position on alleged anti-
competitive practices. Prysmian has submitted its defence
during a hearing before the European Commission held in
June 2012.
In view of the various investigations in progress in the
various jurisdictions except for Brazil, the Prysmian Group
already recognised in 2011 a provision for risks and charges
totalling Euro 207 million, stating nonetheless that
“it is
not… possible to exclude that the Group could be required to
meet liabilities not covered by the provisions for risks should
these cases have an adverse outcome, with a consequently
negative, even material, impact on its activities...”.
With reference to the above points and company performance
in general, as stated above, we always received prompt
information during the year about the progress of the above
events and of others discussed in the Directors’ Report.
The Board of Statutory Auditors is of the opinion that the
above company transactions comply with the law and the
Company’s By-laws, are in the Company’s interests, are
not manifestly imprudent or risky, do not conflict with any
resolutions adopted by shareholders and are not such as to
compromise the integrity of the Company’s net assets.
2 Atypical or unusual transactions
There were none.
2.1 Atypical or unusual transactions with related parties
There were none.
2.2 Atypical or unusual transactions with third parties
or intragroup companies
There were none.
2.3 Ordinary intragroup transactions with related parties
In compliance with the Related Parties Regulation 17221,
adopted by Consob on 13 March 2010, as later amended, since
2010 the Company has adopted a set of procedures for the
management, examination, approval and market disclosure
of related party transactions.
The Directors have provided disclosures about ordinary
intragroup transactions and related party transactions in
their report accompanying both the consolidated financial
statements (see Explanatory Note 33) and the Parent
Company’s separate financial statements (see Explanatory
Note 23). These mainly relate to trade transactions involving
intragroup purchases and sales of raw materials and
finished goods, of technical, organisational and general
services provided by the Parent Company, financial services
