AL ESTILO ICHIMAY WAR
4.2. ECONOMÍA: LA ASOCIACIÓN Y SUS PROPIAS REGLAS DE JUEGO
Members of the Supervisory Board
The Supervisory Board – detailed information about its members in section 4.1.2 - currently has fi ve members who are all independent members at the time of drafting this report:
Yann Duchesne, Chairman;
Jean-Marc Daillance, Vice-Chairman;
Charlotte Garnier-Peugeot, Bruno Angles and Ghislain
Lescuyer, Board members.
The criteria, applied by the Supervisory Board to assess the independence of its members, are those set out in the Afep- Medef Code of Corporate Governance. These criteria are listed in section 4.1 of this annual report and are reviewed on a yearly basis by the Remuneration and Appointments Committee to assess the independence of the members of the Supervisory Board.
The Supervisory Board is composed of one woman out of fi ve members, which results in having 20% of women in total. Saft Group corporate governance is compliant with the law no. 2011-103 dated 27 January 2011 relating to the balanced representation of men and women in Supervisory Boards and to the professional equality as well as with the Code Afep- Medef.
The Supervisory Board Members are all French nationality but many of them have a wide international experience as managers of foreign companies or having an international business activity.
Supervisory Board bylaws and Ethic Code
Supervisory Board bylaws were introduced in 2005. It has been updated on the 25th of October 2011. The Supervisory Board’s bylaws are available on the Group’s website (www.saftbatteries.com). The main provisions of the bylaws are set out in section 4.5 of this annual report. As annex to the bylaw, the Ethic Code details all the obligations to which the members of the Supervisory Board have signed up.
Role and responsibilities of the Supervisory Board
Within the scope of its role as defi ned by the law, the Company article of association and also in the Supervisory Board bylaws, the Supervisory Board oversees the work of the Management Board on an ongoing basis. In this role, it may perform the checks and controls that it deems appropriate at any time of the year, and may request that the Management Board provide any documents that it considers useful for carrying out its duties. The Management Board presents to the Supervisory Board with the report on the Company’s and the Group’s management at least once a quarter. In addition, the Company’s articles of association stipulate that certain decisions taken by the Management Board are subject to a prior approval of the Supervisory Board as follows.
Method of functioning of the Supervisory Board
The Board meets at least once per quarter and, prior to meetings, all the documentation and information required to carry out its duties, is sent to the Board. During the 2013 fi nancial year, the Supervisory Board met nine times. The average rate of attendance of members of the Supervisory Board at meetings was 96% in 2013.
During the 2013 fi nancial year, the Supervisory Board reviewed and addressed the following subjects:
Closing of the fi nancial statements:
the Supervisory Board reviewed the Consolidated and
parent company Financial Statements for the 2012 fi nancial year as well as the 2012 annual fi nancial report, the half- year fi nancial statements on 30 June 2013 and the related fi nancial report;
it approved the reports and resolutions submitted to the
Combined Ordinary and Extraordinary General Meeting held on 7 May 2013;
it approved the Statutory Auditors’ fees for the 2013
fi nancial year.
Business reviews:
the Supervisory Board reviewed the budget forecasts for
2013;
the Strategic Plan 2013-2015 has been also reviewed
during a meeting where the Directors of the IBG and SBG divisions, the Lithium-ion Operations Manager as well as the Group Technology Director have been interviewed;
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Report of the Chairman of the Supervisory Board
it reviewed periodically the progress of the disposal of SNB
business (small nickel batteries), and its closing during the fi nancial year;
it examined and approved the setting up of a subsidiary in
Russia in order to develop its sales activity and carry out battery assembly activities as a second step;
it examined the quarterly business reports of the
Management Board;
it presented its annual report for 2011 to the French
Government Commissioner, in accordance with the agreement of 4 May 2005, signed by Saft and the French Government (see section 8.4.5 of this annual report);
it authorised the Management Board to grant various
sureties, endorsements and guarantees issued within an agreed limit.
Financial communication:
The Supervisory Board reviewed all the press releases with regard to revenue and the Group’s annual and half-year results. It also examined the documents presenting these results to fi nancial analysts and investors.
Remuneration:
the Supervisory Board set and allocated attendance fees
among its members for the year 2013;
based on the recommendations of the Remuneration and
Appointments Committee, the Supervisory Board:
reviewed the performance levels reached by the Group
in fi nancial year 2012 with respect to the objectives that had been set for the determination of the variable remuneration of the members of the Management Board and the Saft Management Committee (SMC). It also validated the variable remuneration proposed by the Remuneration and Appointments Committee paid to these persons,
validated the objectives and the procedures for
calculating the variable remuneration of the members of the Management Board and the members of the SMC for fi nancial year 2013.
Internal audit:
The Supervisory Board reviewed the work and assignments of the Group’s Internal Control and Audit Department in 2013, and approved the internal audit action plan for the 2014 fi nancial year.
Corporate governance:
the Supervisory Board renewed the mandate of the Board
Members which ended on 14 of May 2013 for a new two years period as of 7 May 2013 and confi rmed Mr John Searle as Chairman of the Management Board;
it approved the Chairman’s report on the preparation and
organisation of the Board’s work during the 2012 fi nancial year, Internal Control and risk management procedures and the principles and rules for setting the remuneration of corporate offi cers;
it carried out an annual review of its operations the
conclusions of which are presented below in the section “Assessment and functioning of the Supervisory Board”;
it carried out a review of Saft Group’s shareholders based
on a study conducted during the month of January 2013. Within the scope of the regular review of the governance, the Supervisory Board has approved the Management Board proposition to submit to the shareholders General Meeting scheduled on May 12, 2014, some amendments to the Articles of Association of the company by increasing the number of the members of the Management Board up to seven as the law allows and updating the Articles of Association of the company.
Board Committees
The Supervisory Board has three permanent Board Committees, which prepare the topics and make proposals, within their specifi c fi eld of competences, to facilitate the decision-making process of the Supervisory Board.
Audit Committee
The Group’s Audit Committee is composed of three members, all of whom are independent members, appointed on an individual basis and that may not be represented.
Chairman: Jean-Marc Daillance,
Members: Bruno Angles and Yann Duchesne.
As a result of their current and/or past professional experiences (described in section 4.1, entitled “Management and Supervisory Boards”), the three Audit Committee members are, individually or collectively, competent in accounting, audit and fi nancial matters, in particular with regard to the Group’s activities.
In accordance with legal and regulatory provisions, the Audit Committee is responsible for monitoring:
the process of preparation of fi nancial information; the eff ectiveness of internal control and risk management
systems;
the statutory audit of the annual fi nancial statements and
the consolidated fi nancial statements by the Statutory Auditors;
the independence of the Statutory Auditors.
The Audit Committee regularly reports to the Supervisory Board regarding the work it has carried out.
The role of the Audit Committee is detailed in the bylaws of the Supervisory Board which takes into account the conclusions of the report of July 2010 created by the working group established by the AMF on the Audit Committee.
The Audit Committee met six times over the past fi nancial year.
The attendance rate of members of the Audit Committee at meetings was 100% in 2013.
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Report of the Chairman of the Supervisory BoardIn the course of its meetings, the Audit Committee examined, in accordance with the work program that it had set at the beginning of the year, the following subjects and matters before they were sent to the Supervisory Board:
Preparation of the fi nancial information:
as of the closing of the annual fi nancial statements for 2012
and of the 2013 half-year statements, the Audit Committee verifi ed the organisation of the account closing, reviewed the fi nancial statements and other related fi nancial information (and in particular any proposal to change the accounting standards or principles), held discussions with the Group Chief Financial offi cer and the Statutory Auditors, and reviewed their reports;
it noted the main changes and projects for IFRS accounting
standards, the main tax changes and any implication for the Group, regarding the fi nancial statements as well as the organisation and the internal procedures for the management of the Group;
it examined the various press releases on quarterly revenue,
and the annual and half-year results as well as the various documents presenting these results to fi nancial analysts;
it reviewed the annual budget for 2013 as well as the
Management Board’s quarterly business reports;
as part of the preparation of the 2013 annual report, it
reviewed the Group’s situation with respect to the latest AMF recommendations on fi nancial communication;
it examined the procedures for the Group’s implementation,
for its second fi nancial year, of the provisions of the “Grenelle II” law and in particular the actions undertaken by the Group in order to enlarge the base of indicators audited and to increase the level of assurance for a certain number of these indicators. The results of the implementation of the provisions of this law are presented in chapter 3, “Sustainable Development”, of this annual report.
Business review:
it examined the proposal to set the dividend as well as the
option of payment of a stock dividend that was off ered to the shareholders at the Annual General Meeting of 7th of May 2013.
Statutory Auditor activity:
it examined the audit plan of the Statutory Auditors for the
2013 fi nancial year and reviewed the conclusions of the interim work on internal control. This review allowed the Audit Committee to verify the consistency of the results of the internal control review performed by the external auditors with the results of the self-assessment process implemented by the Group’s Internal Control Department during the 2012 and 2013 fi nancial years;
it reviewed the amount of fees paid to the Statutory Auditors
for the 2012 fi nancial year.
Internal control, risk management and governance:
it held discussions with the Group’s head of internal audit
and reviewed its annual business report and the various work carried out, and in particular:
the presentation of the fi ndings of the audits carried out
in 2012,
the follow-up in 2012 of issues identifi ed during site
and/or thematic audits carried out in 2011,
the implementation of various procedures to improve
internal control,
the results of internal control self-assessments
of several procedures performed during the 2012 fi nancial year,
the audit and Internal Control action plans for the 2013
fi nancial year;
it reviewed the management of risks identifi ed during the
risk mapping of the Group conducted in 2012 ;
it examined the Chairman’s report on the preparation and
organisation of the Board’s work in 2012, Internal Control and risk management procedures and the principles and rules for setting the remuneration of corporate offi cers.
Remuneration and Appointments Committee
The Remuneration and Appointments Committee is composed of three members, all of whom are independent members, appointed on an individual basis and may not be represented. Chairman: Yann Duchesne,
Members: Charlotte Garnier-Peugeot and Bruno Angles. The main role of the Remuneration and Appointments Committee is to examine and make recommendations to the Supervisory Board on the following issues:
On remunerations:
the amount of attendance fees awarded to Supervisory
Board members, and how they are distributed;
remuneration and benefi ts for members of the Management
Board and members of the Saft Management Committee (SMC);
the possible stock option plans and bonus shares.
On appointments:
the appointment and re-appointment of Management and
Supervisory Board members;
the structure and composition of the Supervisory Board and
its committees;
the review of forecast changes to management resources
of the Saft Management Committee (SMC), the succession and/or re-appointment of its members;
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Report of the Chairman of the Supervisory Board
the review of the independence of Supervisory Board
members, in accordance with the criteria set out in the Afep-Medef Code.
In the course of its work, the Remuneration and Appointments Committee may rely on external studies and reports.
The Remuneration and Appointments Committee met four times over the past fi nancial year.
The attendance rate of the members of the Remuneration and Appointments Committee at meetings was 100% in 2012. In the course of its meetings, the Remuneration and Appointments Committee considered, inter alia, the following matters:
the independence of its members, as defi ned in the rules
set out in the Afep-Medef Code of Corporate Governance;
the methods for calculating and setting the variable
portion of 2012 remuneration for the members of the Saft Management Committee and the Management Board;
setting the Group’s quantitative performance objectives to
be used as a basis for calculating the variable portion of 2013 remuneration for members of the Saft Management Committee (“SMC”);
the setting of the amount of attendance fees allocated to
members of the Supervisory Board;
the Human Resources Strategy of the Company. Strategy and Technology Committee
The Strategy and Technology Committee is composed of three members, all of whom are independent members, appointed on an individual basis and may not be represented at meetings by another person.
Chairman: Ghislain Lescuyer,
Members: Jean-Marc Daillance and Yann Duchesne.
The main role of the Strategy and Technology Committee is to assist the Supervisory Board in assessing the Group’s
overall strategic and technological objectives proposed by the Management Board. To this end, it regularly reviews the Company’s strategic objectives and those of its main subsidiaries and assesses the soundness of the key strategic decisions recommended by the Management Board together with their consequences.
The role of the Strategy and Technology Committee is described in detail in the Supervisory Board bylaws.
The Strategy and Technology Committee met once over the past fi nancial year to review the 2013-2015 Strategic Plan of the Company. The attendance rate at meetings was 100%.
Assessment of the functioning of the Supervisory Board
In February 2013, and as recommended in the Afep-Medef Code, the Supervisory Board conducted the formal annual assessment of its operations, which covered the following themes:
composition and balance of the Supervisory Board;
missions of the Supervisory Board and the Board
Committees.
At the end of the self-assessment, the Board set a number of objectives for itself, including the following:
to prepare the entry into force of the corporate law called
“Zimmerman-Copé” as well as the new Code Afep-Medef provisions on governance and their consequences on future Supervisory Board composition;
to enhance its knowledge of the Group Human resources
policy as well as the assessment and the management of the senior executives and to design a plan for replacement of executive directors;
to organize a meeting with the Divisions managers and the
key executives of the Company including the manager of the lithium division.
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Report of the Chairman of the Supervisory BoardCompliance by the Company with the recommendations of the June 2013 Afep-Medef Code of Corporate Governance for listed companies
The Company complies with the recommendations of the Afep-Medef Code of Corporate Governance except as follows:
Recommendation of the Afep-Medef Code SAFT practice
Ending of employment contracts for corporate offi ce holders The Afep-Medef recommends that, when a manager becomes a corporate offi cer, the employment contract linking him/her to the Company or to a company of the Group should be terminated, either by traditional severance or by resignation.
This recommendation applies to John Searle, as Chairman of the Management Board of the Saft Group.
The Supervisory Board considers that, while the recommendation of the Afep-Medef Code is understandable for a manager who has recently joined a company, it cannot be justifi ed for a manager who has had a long and successful career in the Group, and in particular as an employee not holding any corporate offi ce. The Supervisory Board consequently decided in 2009 to authorise the continuation of the employment contract between Saft Acquisition SAS and John Searle alongside his term of offi ce as Chairman of the Company’s Management Board. This decision is motivated by the desire to maintain the pension rights of this executive offi cer, taking into account his seniority within the Group (John Searle joined Saft Group in 1990) and services rendered to the company. John Searle benefi ts from the same defi ned contribution supplementary pension as all Group executives in France.
Stock options policy
The Afep-Medef recommends making allocations in the same
calendar periods, which would eliminate the windfall eff ect. No specifi of implementation of stock option plans. The Group considers c rule sets the frequency and/or regularity that it would be appropriate to maintain a certain degree of fl exibility in this area, given that any stock option plan must receive the prior authorisation of shareholders at an Annual General Meeting and of the Supervisory Board, which enables to avoid any windfall.
Remuneration of the members of the Supervisory Board The Afep-Medef recommends that the remuneration of the members of the Supervisory Board should take into consideration their attendance to the Board and its Committees. Therefore, their remuneration should include a variable portion. The Afep-Medef considers it “natural” to encourage the participation of the members in Board Committees by an additional amount of attendance fees.
Considering the current number of members on the Supervisory Board and the overall equivalent involvement