Discusi´on y conclusiones

Directors must strive to avoid any confl ict of interest between their personal and material interests and those of the Company.

A confl ict of interests arises in particular where a director or a member of their family could benefi t on a personal basis from the conduct of the Company’s business or could have a relationship or link of any kind with the Company, its subsidiaries or its management that could compromise the free exercise of the director’s judgement.

Directors must inform the Board of Directors of any situation involving a real or potential confl ict of interest with the Company or the Group’s companies as soon as they become aware of such a situation and must refrain from participating in discussions and voting relating to the respective proceedings. The Chairman may ask the director not to attend such proceedings.

Directors must therefore inform the Chairman without delay of any agreement reached between themselves, or a company of which they are a director, or in which they hold a signifi cant stake either directly or indirectly, or in which they have a direct interest, and the Company or one of its subsidiaries, or which has been reached through an intermediary.

The Chairman of the Board may ask the directors at any time to sign a statement certifying that they do not have a confl ict of interest.

Assessment

The Board of Directors conducts regular assessments of its operations and ability to carry out its missions. Accordingly, it reviews its operating procedures and the quality of the information published and of its decision-making and discussions, as well as each person’s actual contribution to the work of the Board of Directors and the committees.

As a result, the Board of Directors is obliged to include a discussion on its operation as an agenda item once a year.

A formal assessment of the Board of Directors was carried out during the fi scal year with the help of the Appointments Committee and an external consultant. The aim of this assessment was to ensure observance of the Board of Directors’ operating principles and compliance with the governance rules, and to identify proposals aimed at improving its operations and effectiveness

3.2.3 THE BOARD OF DIRECTORS’ COMMITTEES

The Board of Directors has decided on the creation of specialist committees responsible for examining questions submitted to them for their opinion by the Board or the Chairman.

To take into account the nature and specifi c characteristics of the Company’s activities, the Board of Directors’ Committees are as follows:

W the Accounts Committee;

W the Remuneration Committee;

W the Appointments Committee.

The specialist committees are made up of directors appointed by the Board of Directors for the period of their term of offi ce.

These committees report on their work to the Board of Directors on a regular basis and share with it their observations, opinions, proposals and recommendations.

The committee Chairmen (or, if they are unavailable, another member of the same committee) present oral summaries of their work to the Board of Directors at its next meeting.

The terms of reference of these committees may not delegate powers to them that are assigned to the Board of Directors in law or under the articles of association. The committees have consultative power and conduct their activities under the responsibility of the Board of Directors, which alone has statutory decision-making power and remains collectively responsible for the fulfi lment of its missions.

The Chairman of the Board of Directors is responsible for ensuring that the

Each committee is chaired by an independent director drawn from its members.

The secretary of each committee is an individual selected by the Chairman of each committee.

These committees meet, as necessary, on the invitation of their Chairman, or at the request of one-half of their members. They may call upon outside experts as necessary. The committee Chairman may ask the Chairman of the Board of Directors to interview any Group executive regarding issues that fall within the committee’s purview, as defi ned by these by-laws.

3.2.3.1

The Accounts Committee

This committee meets at least four times per year.

Composition

At least two-thirds of the committee members must be independent, as defi ned by the Board of Directors in accordance with the AFEP-MEDEF Code to which it refers. At least one member of the committee must have special expertise in fi nancial or accounting matters.

T he composition of the committee is as follows:

W Chairman: Georges Ralli (independent director)

W Members: Mathilde Lemoine (independent director), René Brillet (independent director), Nicolas Bazire.

Duties

The main duties of the committee are:

(i) In respect of the fi nancial statements:

W to carry out a prior examination and offer an opinion on the annual and half-yearly Company and Consolidated Financial Statements before they are presented to the Board of Directors,

W to examine the relevance and permanence of the accounting principles and rules used in drawing up the Company and Consolidated Financial Statements and to warn of any deviation from these rules,

W to examine the drafts of the annual report and fi nancial statements prior to publication,

W more generally, to review all issues relating to fi nancial statements and other documents, including the selection of accounting standards, provisions, management accounting data, capital suffi ciency requirements, profi tability indicators and any accounting issues that raise methodological concerns or give rise to potential risk;

(ii) I n respect of internal control:

W to assess the effectiveness and quality of the Group’s internal control systems and procedures, to interview the internal audit manager, to give an opinion on the organisation of the department and to be informed of its programme of work,

W to examine, in conjunction with internal control managers, the objectives and intervention and action plans in the area of internal audit, the conclusions of such interventions and the actions, recommendations and follow-up arising from them,

W to examine the methods and results of the internal audit and check that the procedures used help the fi nancial statements to refl ect a true and accurate picture of the business in accordance with accounting rules,

W to assess the reliability of the systems and procedures used to produce the fi nancial statements and the validity of the positions taken in respect of presenting signifi cant transactions, W to examine the methods used to report and present accounting and

fi nancial information from the subsidiaries and/or operational units, W to examine the draft report on internal control procedures.

Relations with the Statutory Auditors

The committee oversees the process of selecting Statutory Auditors, formulates an opinion on the appropriate fee levels for legal work pertaining to internal control and submits the results of this selection to the Board.

It also ensures the Statutory Auditors’ independence. It issues a recommendation on the Statutory Auditors whose appointment is proposed by the Shareholders’ Meeting.

It reviews the Statutory Auditors’ audit plan, their recommendations and the implementation of these recommendations.

It is annually notifi ed of the amount and breakdown of fees paid by the Group to the Statutory Auditors and the networks to which they belong, calculated according to a model approved by the committee.

It ensures that the amount or share of the Statutory Auditors’ revenues represented by the Group is not likely to compromise the Statutory Auditors’ independence.

It gives its prior consent for any undertaking whose fees (excluding tax) exceed 1 million euros. The committee approves other undertakings after the fact, based on submissions from the Group Finance department. Each year, the committee receives a report from the Group Finance department on all assignments other than auditing carried out by networks to which the Group’s Statutory Auditors belong.

The committee ensures that the signatories of the fi nancial statements rotate and that the expiry dates of the terms of offi ce of the Statutory Auditors are staggered.

It ensures that neither the fi rm(s) responsible for statutory auditing of the accounts nor the network to which it belongs provide any kind of consultancy services to the Group.

The Statutory Auditors each provide an annual presentation to the committee on the procedures within their internal-control system for ensuring independence, and annually certify in writing their independence in fulfi lling their audit responsibilities.

At least twice per year, the committee devotes part of its meeting to a discussion with the Statutory Auditors’ teams without the presence of the Company’s general management, after fi rst informing the Chairman of the Board of Directors.

The committee meets in the presence of the Statutory Auditors’ teams to review the half-yearly and annual fi nancial statements.

However, the Statutory Auditors do not attend any or all of the meeting dealing with their fees and renewal of their terms of offi ce.

The Statutory Auditors do not attend any or all of the meeting at which the committee deals with specifi c issues relating to any of them.

Where questions of interpretation of accounting standards arise in connection with the half-yearly and annual results, involving choices that have a material impact, the Statutory Auditors and the Group Finance department present a memorandum to the committee analysing the nature and signifi cance of the issue, presenting the pros and cons of various possible solutions and explaining the reasons for the choice made.

Report by the Chairman

The committee reviews the draft report by the Chairman on internal-control procedures relating to the preparation and processing of accounting and fi nancial information.

Interviews

On all issues within its purview, the committee may – as it sees fi t and outside the presence of any other general management members, if it deems this appropriate – interview the Group’s fi nancial and accounting managers as well as the audit and internal-control manager. The Chairman of the Board of Directors must be informed of this in advance.

The committee may call on outside experts as necessary.

3

3.2.3.2

The Remuneration Committee

The committee meets as often as necessary.

Composition

A majority of the members of the Remuneration Committee members must be independent directors as defi ned by the Board of Directors in accordance with the AFEP-MEDEF Code to which it refers.

T he composition of the committee is as follows:

W Chairman: Thierry Breton (independent director);

W Members: René Brillet (independent director), Charles Edelstenne (independent director).

Sébastien Bazin’s term of offi ce as member of the Remunation Committee e nded on January 15, 2014.

Duties

The committee is responsible for formulating proposals on the various elements of compensation paid to members of the Board and the Chairman and Chief Executive Offi cer.

It is responsible for reviewing all issues relating to the personal status of corporate offi cers, including remuneration, pension and welfare benefi ts, benefi ts in kind and provisions governing the cessation of their term of offi ce.

Its main responsibility is to formulate proposals for decisions on granting subscription and/or purchase options for shares in the Company to the benefi t of corporate offi cers and all or some of the salaried staff of the Company and subsidiaries in accordance with the authoriz ations granted by the Shareholders’ Meeting. It examines the conditions under which options are granted and proposes a list of benefi ciaries of options and the number of options allocated to each of them. It formulates any proposals determining the characteristics of options and in particular, the subscription and/or purchase price of shares, their duration, any conditions to which exercising them may be subject and the terms under which they may be taken up.

It is also responsible for formulating proposals in respect of the free allocation of existing shares or shares to be issued in accordance with the authorisations granted by the Shareholders’ Meeting. It proposes the names of benefi ciaries of share allocations and any conditions, particularly in respect of the length of acquisition and retention periods and criteria for share allocations.

It is informed of the remuneration policy for top executives who are not corporate offi cers.

3.2.3.3

The Appointments Committee

The committee meets as often as necessary.

Composition

A majority of the members of the Nominations Committee must be independent directors as defi ned by the Board of Directors in accordance with the AFEP-MEDEF Code to which it refers.

T he composition of the committee is as follows:

W Chairman: Bertrand de Montesquiou (independent director) W Members: Anne-Claire Taittinger (independent director), Diane

Labruyère (independent director), Nicolas Bazire.

Duties

The committee examines and formulates an opinion on any application for nomination to the post of director or a role as a corporate offi cer, taking particular account of a desirable balance in the composition of the Board. It assesses the appropriateness of the renewal of terms of offi ce.

It organises a procedure for the purpose of selecting future independent directors.

The classifi cation of independent director is discussed by the committee and reviewed each year by the Board prior to the publication of the annual report.

It makes recommendations to the Board of Directors on the appointment of members of the specialist committees when they are due for renewal.

It is also charged with assessing directors’ independence and reporting its fi ndings to the Board of Directors. If necessary, the committee reviews situations that result from a director’s repeated absence.

It also assists the Board of Directors in adapting the Company’s corporate governance practices and assessing their operation.

It examines the Chairman’s draft report on corporate governance and any other document required by law or regulations.

Mr Georges Plassat has been the Company’s Chairman and Chief Executive Offi cer since May 23, 2012.

By its decision of June 21, 2011, the Board of Directors consolidated the duties of Chairman and Chief Executive Offi cer. The Board’s decision to consolidate the duties of Chairman of the Board of Directors and Chief Executive Offi cer is designed to simplify the decision-making process and enhance the effi ciency and responsiveness of the Company’s governance.

Chairman and Chief Executive Officer