Annual Report 2010 - Enel.com

the power for local Land Registry Offices to modify,
without a time limit, the imputed property incomes
proposed by Enel.
The ruling also affirmed that “… the principle that the
determination of imputed property income shall include
all the elements constituting a plant … even if not physically
connected to the land, holds for all of the buildings
referred to in Article 10 of Royal Decree Law 652 of 1939”
and not only power plants.
We also note that to date no valuation criterion has been
introduced for the movable assets considered relevant for
the determination of land registry values either with regard
to the valuation method or the effective identification
of the object of the valuation, and the above ruling
does not appear to provide any guidance on this issue.
Accordingly, with regard to pending litigation, Enel Produzione
and Enel Green Power will continue to pursue
the case to request a substantial reduction of the values
originally assigned by the Land Registry Offices to these
parts of the plant. They have, however, allocated an adequate
amount to the “Provisions for risks and charges” to
cover fully the potential charges that would result from
an unfavorable outcome, including the information that
has emerged from new assessments. At the same time,
they do not feel that further provisions are necessary to
take into account possible retroactive application of the
rule on imputed rent proposals, which to date have not
been the subject of comments by the Land Registry Offices
and, in any event, primarily concern small plants.
Spain
In March 2009, Josel SL sued Endesa Distribución Eléctrica
SL to withdraw from the contract for the sale of several
buildings due to changes in their zoning status, requesting
the restitution of about €85 million plus interest.
Endesa Distribución Eléctrica SL opposed the request for
withdrawal. The final hearing was held on July 13, 2010
and a ruling is pending.
On May 19, 2009, the town of Granadilla de Abona fined
Endesa €72 million for the construction of the Centrale
Generadora de Ciclo Combinato 2 power plant. On July
13, 2009, Endesa lodged an appeal with the administrative
courts against the fine. On September 18, 2009, a
precautionary suspension of payment of the fine was ob-
tained. Hearing of the case began on September 1, 2010.
As regard property tax issues, the Spanish tax authorities
undertook a new appraisal of “Bienes Inmuebles de Características
Especiales” (real estate with special features).
The new appraisals took effect as from 2008 for ports,
hydroelectric plants, conventional thermal plants and nuclear
power plants and as from 2009 for wind farms and
photovoltaic plants. The appraisals were appealed by the
corresponding companies of the Endesa Group. For 2008
and 2009, the liability deriving from the new land registry
values amounts to €67 million, although the amount challenged
by Endesa comes to €31 million.
Brazil
In 2005, the Brazilian tax authorities notified Ampla of
an assessment that was subsequently appealed. The tax
authorities argued for the non-applicability of the tax exemption
for interest received by subscribers of a fixed-rate
note issued by Ampla in 1998. On December 6, 2007, Ampla
was successful in the second level of the administrative
appeals, but the Brazilian authorities appealed the ruling
to the Superior Council for Tax Appeals. The amount involved
in the dispute is about €335 million.
In 2002 the State of Rio de Janeiro ruled that the ICMS (Impuesto
a la Circulación de Mercaderías y Servicios) should
be calculated and paid on the 10th, 20th and 30th of the
same month in which the tax accrues. Nevertheless, Ampla
continued to pay the tax in compliance with the previous
system (up to the 5th day of the subsequent month).
Despite an informal agreement with the State of Rio de Janeiro
and two tax amnesties, in October 2004 Ampla was
fined for late payment of the ICMS, which the company
appealed. The ruling at first instance was in favor of the
State of Rio de Janeiro and Ampla appealed but the appeal
was denied on August 26, 2010. Ampla then filed a
further appeal with the “Consejo Pleno de Contribuyentes”
of the State of Rio de Janeiro, which is still pending. The
amount involved in the dispute is about €76 million.
A Brazilian construction company held a contract for civil
works with the Brazilian company CELF (owned by the
State of Rio de Janeiro), which withdrew from the contract.
As a consequence of the transfer of assets from CELF
to Ampla Energia e Serviços, the Brazilian construction
company complained that the transfer had infringed its
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