2023 UNIVERSAL REGISTRATION DOCUMENT

General and financial elements

1.1.2 Acquisition and disposal of companies
Risk identification Risk management procedures
Risk identification

The Group’s growth has long been based on a proactive acquisition policy, focusing on companies of all sizes, in all its business lines.

Risks related to these acquisitions:

  • Reliability of the financial information provided and the business plan drawn up by the sellers
  • Corporate governance continuity and integration of newly acquired companies
  • Potential hidden disputes
  • Corporate culture compatibility between buyer and seller
  • Damage to the Group’s reputation
  • Compliance issues
Possible consequences:
  • Impairment of acquired assets
  • Loss-making disposals
 Risk management procedures

Proposed acquisitions and disposals are submitted to the VINCI Investment Committee for approval. The largest projects are also submitted to the Strategy and CSR Committee of the Board of Directors (see paragraph 3.4.2 of chapter C, “Report on corporate governance”, beginning on page 150) and in some cases to VINCI’s Board of Directors (see section 2 of chapter C, “Report on corporate governance”, beginning on page 134). A procedure for the acquisition and sale of financial assets and a risk analysis based on specific criteria are applied to these projects.

VINCI’s external growth policy is to:

  • create value for VINCI investors;
  • target companies with which synergies can be created due to their expertise, their market positioning or their geographic location;
  • generally, take a majority interest in the share capital of target companies in order to limit risks associated with their integration and to be able to quickly apply the Group’s management principles;
  • seek out corporate culture compatibility in order to facilitate the integration of new acquisitions into the Group;
  • integrate newly acquired companies in the Group’s accounting systems and management procedures at the appropriate pace.
1.2 Legal risks
1.2.1 Contractual relationships

As a general rule, the Group’s contracts are subject to the laws of the countries in which the projects are executed, supplemented where possible by the arbitration clause of the International Chamber of Commerce, in particular for countries where the legal system might not offer sufficient protection.

As mentioned above in paragraph 1.1, “Operational risks” (see page 175), disputes may arise during the performance of said contracts. Detailed information on the principal disputes and arbitration proceedings in which the Group is involved can be found in Note M to the consolidated financial statements, pages 376 to 377. These disputes are examined on the date the financial statements are approved and, if necessary, provisions are constituted to cover the estimated risks.

Risk identification Risk management procedures
Risk identification
  • Different interpretations of new items arising during the performance of the contract
  • Change in the contracting authority’s governance
  • New jurisprudence
  • Misinterpretation of contractual clauses
  • Legislative developments and/or changes
  • Breach of contract
 Risk management procedures

The Group’s policy is to limit its risk during the proposal phase by seeking to negotiate terms with contracting authorities that:

  • pass onto the customer the extra costs and/or additional time stemming from changes implemented at the customer’s request after the contract is signed;
  • halt construction in the event of non-payment;
  • exclude indirect damages;
  • exclude or limit liability relating to existing pollution;
  • limit its contractual responsibility for the total project to a reasonable percentage of the contract amount;
  • cap delay and performance penalties at an acceptable percentage of the contract amount;
  • stipulate contractual provisions allowing for adjustments (price and time schedule) to account for legal, tax or regulatory changes;
  • obtain protection via a force majeure clause (against political risk, a unilateral decision of the customer or concession-granting authority, economic upheaval, poor weather conditions) or for early contract termination;
  • obtain an international arbitration clause;
  • keep an eye on the activation of insurance cover;
  • legal action or arbitration.
1.2.2 Legal and regulatory compliance

Given the diversity of their activities and geographical locations, the Group’s companies operate within specific legal and regulatory environments that vary depending on the place where the service is provided and on the sector involved. Laws in effect in some countries may have an extraterritorial scope that could apply to the Group’s companies. In particular, Group companies must comply with rules relating to:

  • the terms of agreement and performance of public and private sector contracts and orders;
  • laws governing construction activities and in particular the applicable technical rules governing the delivery of services, supplies and works;
  • environmental law, commercial law, labour law, competition law, and financial and securities law;
  • personal data protection;
  • duty of vigilance and accident prevention (in France, particularly Law 2016-1691 of 9 December 2016 relating to transparency, anti-corruption measures and the modernisation of economic life, known as the Sapin 2 law, and Law 2017-399 of 27 March 2017 on the duty of vigilance of parent companies and subcontracting companies);
  • international sanctions in force, in particular by way of specific due diligence and an active regulatory watch on the regulations involved.