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LISI 2011 —
112
— financial report
Documents specific to the Ordinary General Meeting
.1
Report by the Chairman of the Board of Directors
Financial Security Law (Art. L.225-37 of the French Commercial Code)
In accordance with the provisions of article L.225-37 of the French
Commercial Code on Financial Security, and the recommendations of
the French financial markets authority (AMF), this report sets out the
conditions governing the preparation and organization of the Board
of Directors’ work, limitations to the Chief Executive Officer’s power,
the principles and rules governing the determining of the allowances
in kind granted to the corporate officers as well as internal control
procedures implemented within the Group.
This report was submitted to the Board of Directors on February 15,
2012.
1.1
Preparation and organization of
the tasks of the Board of Directors
1.1.1 Organization
The Board meets whenever it is in the interests of the company to do
so. Directors may be invited to Board meetings by the Chairman using
any means available and even verbally. If the Board has not met for
more than twomonths, directors representing at least one third of the
members of the Board can request that the Chairman call a meeting
on a particular agenda.
Decisions are made based on a quorum and a majority vote, as
provided for by the Law; in the event that votes are split, the
Chairman’s vote will be the casting vote. However, a majority of three
quarters of the votes of the members who are present or represented
is required when decisions relating to the following issues are to be
taken:
– The calculation of amortization and depreciation expenses and of
provisions,
– Proposals to be made to the Shareholder’s Ordinary Meeting for the
allocation of profits for the financial year just ended,
– Resolutions to be submitted to a Shareholder’s Extraordinary
Meeting,
– The replacement of a director who has resigned or is deceased.
Copies or extracts of the deliberations of the Board of Directors are
certified as valid by the Chairman of the Board of Directors, a Chief
Executive Officer, a director who has been temporarily vested with
the Chairman’s powers or a representative authorized to this effect.
The Board of Directors sets out the company’s business policies and
ensures that they are followed. The Board of Directors carries out any
controls or checks that it deems necessary.
1.1.2 Operating procedures
The Board meets upon invitation by the Chairman a minimum of
5 times per financial year and whenever an important decision is to
be made. Each member participates in the tasks supervised by the
Chairman and decisions are made on a majority vote of the members
who are present or represented.
Debates are recorded in a report that is submitted for approval by the
members within a month of the meeting and signed at the following
meeting. The Board submits legal resolutions for approval by the
Shareholders’ Meeting.
1.1.3 Preparation of tasks
– Prior to each Board meeting, participants receive a file that has
– as far as possible – been duly documented so that they may
adequately prepare for the meeting.
– Meetings that require the approval of annual and half-yearly
financial statements are accompanied by a presentation by the
Audit Committee, which will have met prior to the meeting.
– Meetings on the subject of compensation are accompanied by a
presentation by the Compensation Committee, whichwill havemet
prior to the meeting.
– Meetings dealing with strategic issues are accompanied by a
presentation by the Strategic Committee, which will have met prior
to the meeting.
1.1.4 Decision-making process
All major decisions are subjected to the Board’s ratification, in
accordance with the operating procedures described in paragraph 1.2.
Important decisions include: approval of financial statements,
acquisitions, disposals, forecasting elements, the compensation of
directors, the nomination of directors, or any other element which
may have a significant influence on the financial statements.
1.2
Limitation of powers
The Chief Executive Officer and Chairman of the Board is assisted by
the Executive Vice President for the day-to-day management of the
group. Their power is limited by the Board of Directors’ authority to
rule on all decisions relating to the structure of the group, such as
described in paragraph 1.1.
Present on the Board of Directors are 4 independent directors, in
compliance with the AFEP/MEDEF Code. There are also 3 specific
committees in existence: the Compensation Committee, the
Audit Committee and the Strategic Committee, both of which are
responsible for supervising the work of General Management in these
3 fields. Each committee will submit a report on their work to the
Board of Directors.
1.3
Management structure
The Chairman/Chief Executive Officer and the Vice President work
with an Executive Committee of 14 people, drawing together
divisional managers and internal control management. This Executive
Committee meets every quarter for briefing meetings on the Group’s
latest progress in each area.