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RISK FACTORS
5
LEGAL, REGULATORY AND TAX RISKS
5.6
LEGAL, REGULATORY AND TAX RISKS
Type
Impact
Risk reduction measures
Risk of lack of control over the legal
and tax aspects of the Group’s
business and operations in a
context of globalisation, and lack
of regulatory compliance.
Negative impact
on the Group’s
image and operating
profit.
The contract acceptance process systematically includes a legal and tax review. These reviews
are used to ensure, in particular, that there are no conditions that are unacceptable for the
Group. The definition and formal classification of these conditions are notified to all line
managers. The Group has also introduced quarterly risk reports for France that are submitted
to the finance, legal/insurance, accounting/tax and Management Control Departments.
Risk that changes to French or foreign
tax regulations, or their interpretation
by the relevant authorities, may be
contrary to the Group’s interests or
may restrict the Group’s ability to
organise or develop its business.
Negative impact
on operating profit
and/or consolidated
profit.
The Group’s Tax Department, in conjunction with operations staff, carries out ongoing
monitoring of changes to tax regulations of relevance to the Group and their corresponding
interpretations. Where necessary, it suggests ways of adapting the Group’s organisation
and its business in order to mitigate the impacts of such changes.
Legal dispute with ASG
In 2015, in the legal dispute between the ASG company and the
Acergy (now Subsea 7) and Iska Marine companies, due to an incident
occurring in January 2010 (fire outbreak on board a vessel, the Acergy
Falcon, placed in dry dock in Brest for maintenance operations), a
development occurred in 2015 with the submission by the judicial expert
of the definitive judicial expert report. To date and as for the previous
years, notwithstanding the judicial expert’s submitted report indicating
that mistakes may have been made by the ASG company, consequently
holding ASG co-liable without quantification for the occurrence and
extent of the incident, Assystem considers that no concrete element is
able to establish the notion that the ASG company may have made any
mistake, or that its liability could necessarily be engaged, either totally
or partially. In addition, the Group confirms, as in previous years, that
in the event liability is proven, this incident would be covered by the
Group’s third party liability insurance policies.
Tax inspection
FRANCE
At the end of 2014, Assystem France received notification of a
€13.5 million tax reassessment relating to research tax credit amounts.
This reassessment is based on a general position taken by the French
tax authorities which is applicable to all of the French companies
concerned. Assystem entirely disputes the validity of the reassessment,
based notably on expert opinions expressed at the end of 2014 and
repeated at the end of 2015. Nevertheless the Group has decided to
make provision in its 2015 accounts for 50% of the disputed amount
(
i.e.
€ 6.8 million) in view of the changes in jurisprudence in 2015
concerning subjects of a similar nature. In addition, the Group made
provision in its 2014 accounts for €2.0 million for procedural costs to
be paid with respect to this dispute. The estimate of these costs was
revised in 2015 at €0.5 million and the corresponding provision was
consequently revised to stand at €1.5 million.
NIGERIA
A tax assessment conducted by the Federal administration was completed
in February 2015 at MPH Nigeria. The adjustment notification has not
yet been received, but the potential adjustment amounts are covered
by the provisions recorded in the MPH Nigeria balance sheet at the
time Assystem acquired it in 2012. At this stage, the Group considers
that no additional provision is necessary.
At the date of this Registration Document, the Group is not aware of
any other governmental, judicial or arbitration proceedings, including
any pending or potential proceedings, that could have or have had
in the last 12 months, a significant impact on the financial situation or
profitability of the Company and/or the Group.
68
ASSYSTEM
FINANCIAL REPORT
2015