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PRYSMIAN GROUP | DIRECTORS’ REPORT
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Risks relating to legal and tax proceedings
Prysmian S.p.A. and some Prysmian Group companies are currently involved in tax and legal proceedings in
connection with their business, involving civil and administrative actions. In some of these cases, the
company might not be able to accurately quantify the potential losses or penalties associated with such
proceedings. In the event of an adverse outcome to such proceedings, the Group cannot rule out an impact,
even for a material amount, on its business, results of operations and financial condition, as well as
reputational damages that are hard to estimate.
During 2015 the state of Sao Paulo (Brazil) placed 12 tax inspectors under investigation. The public
prosecutor considers them guilty of the crime of extortion and believes one of our Brazilian subsidiaries to be
a victim of this crime.
The conclusions of the public prosecutor are currently being evaluated by the competent judge whose
decision is reasonably expected midway through the current year.
Based on the information currently available, the directors are of the opinion that this investigation cannot
give rise to significant liabilities for the Group.
In addition, during August 2015, two employees of a foreign subsidiary were the subject of court orders by
the local authorities as part of an investigation into alleged misappropriation at the subsidiary's expense.
Following this notification, the Group instructed its advisors to review and assess a number of areas of
potential risk and issues arising from possible breaches of internal procedures.
Although it is not possible to accurately quantify the risks, the results of this work to date lead to the Directors
to believe that any liabilities triggered by such issues would nevertheless not be material for the Group.
Risks of non-compliance with Antitrust law
Its strong international presence in more than 50 countries means the Group is subject to antitrust law in
Europe and every other country in the world in which it operates, each with more or less strict rules on the
civil, administrative and criminal liability of the perpetrators of anti-competitive practices. In the last decade,
local Antitrust Authorities have shown increasing attention to commercial activities by market players, also
involving a tendency for international collaboration between authorities themselves.
The geographical dispersion of its employees, the lack of knowledge at times of local regulations as well as
market dynamics, make it difficult to monitor anti-competitive conduct by third parties like suppliers and
competitors, exposing the Group to the risk of incurring economic sanctions with extremely high negative
repercussions for the reputation and credibility of the Group's system of governance.
In line with the priorities identified by the ERM process, the Legal Department has taken steps, with the
support of Group Compliance, to raise awareness of the issues at stake through the adoption of an Antitrust
Code of Conduct that all Group employees, directors and managers are required to know and observe in the
conduct of their duties and in their dealings with third parties. These activities represent a first step in
establishing an "antitrust culture" within the Group by stimulating pro-competitive conduct and by heightening
individual accountability for professional conduct.
More specifically, the European Commission, the US Department of Justice and the Japanese antitrust
authority started investigations in late January 2009 into several European and Asian electrical cable
manufacturers to verify the existence of alleged anti-competitive practices in the high voltage underground