EXEL industries - 2019 Universal Registration Document

Report on Corporate Governance 6

Information that could be of signi fi cance in the event of c a c takeover bid

Information that could be of signi fi cance in the event of Ƥ a Ƥ takeover bid

6.8

Nomination and replacement of members of the Board of Directors In accordancewith the provisions ofArticles c 13, 14 and 15 of theArticles of Association, the Company is managed by a Board comprising at least three and at most 18 members who are appointed by the Annual General Meeting. The director(s) representing employees are appointed by the Group Works Committee. Each director must own at least one share, except for the director representing employees. Legal entities may be on the Board of Directors. Theymust designate a permanent representative who is subject to the same conditions and obligations as a director acting in their own name. Directors are appointed for a period of six years and three years for the director representing employees. Directors are appointed to or renewed in their roles in accordance with the conditions and arrangements provided in the laws and regulations in force. A director appointed to replace another director only remains in o ffi ce for the remaining period of their predecessor’s term of o ffi ce. Amendment of the Articles of Association: the Articles of Association may only be amended, unless otherwise required by law, by a decision taken by an Extraordinary General Meeting. „ Agreements concluded by the Company that are amended or terminated in the event of a change of control The Board of Directors is not aware of any signi fi cant agreement that would be amended or that would be terminated in the event of change of control. „ Agreements providing for severance payments tomembers of the Board of Directors or employees, if they resign or are dismissed without genuine and serious cause, or if their employment is terminated by reason of a takeover bid or exchange o ff er The Board of Directors is not aware of any agreement providing severance payments to members of the Board of Directors or employees, if they resign or are dismissed without genuine and serious cause, or if their employment is terminated by reason of a takeover bid or exchange o ff er.

„ Shéare capital structure The share capital structure is as described in section c 3.9.1 of the management report. „ Restrictions in theArticles of Association on the exercise of voting rights and transfer of shares and any provisions or agreements brought to the attention of the Companypursuant toArticle c L.233- 11 of the French Commercial Code The Board of Directors is not aware of any restrictions on exercising voting rights and transferring shares during the fi scal year. „ Equity interests, whether direct or indirect, in the Company’s capital and of which it is aware pursuant to Articles c L.233-7 and L.233-12 of the French Commercial Code EXEL SAS holds 70.60% of the voting rights and 62.81% of the capital of EXEL Industries. In addition, Patrick BALLU holds, directly and indirectly, 48.90% of the capital and 70.60% of the voting rights of EXEL Industries. „ List of the holders of any security conferring special rights of control In accordance with the provisions of Article c 12 “RIGHTS AND OBLIGATIONS ATTACHED TO THE SHARES” of the Articles of Association, shares that are fully paid up and which have been held in registered form in the name of the same shareholder for at least four years, carry a double voting right. „ Control mechanisms provided in any employee shareholding scheme The Board of Directors is not aware of any control mechanism in relation to the employee shareholding scheme. „ Shareholder agreements that may involve restrictions on the transfer of shares and the exercise of voting rights The Board of Directors is not aware of any agreement between shareholders that could involve restrictions on the transfer of shares and the exercising of voting rights. „ Rules applying to the appointment and replacement of members of the Board of Directors and to the amendment of the Articles of Association

Internal control and risk management procedures

6.9

De fi nition and objectives Internal control covers all control systems adopted by Executive Management for the purpose of providing reasonable assurance with respect to: „ the e ff ectiveness and e ffi ciency of operations; „ the reliability of the reporting system; „ compliance with laws and regulations in force; „ the preservation of assets; „ risk management in all areas.

One of the purposes of the internal control and risk management system is to prevent and e ff ectively manage risks associated with the business operations of the Group and its subsidiaries. Risk management covers not only fi nancial risks (related notably to exchange rates, etc.) but also operational risks (IT, fraud, environmental, employee-related, legal, “online reputational risks”). As with all systems of control, it cannot however provide an absolute guarantee that such risks will be fully eliminated.

EXEL Industries Group I 2019 Universal Registration Document

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