5.8 Statutory Auditors’ special report on related-party agreements
To the General Meeting of Lagardère SCA,
In our capacity as Statutory Auditors of your Company, we hereby present to you our report on related-party agreements. We are required to inform you, on the basis of the information provided to us, of the terms and conditions of those agreement disclosed to us, or that we may have identified in the performance of our engagement, as well as the reasons justifying why they benefit the Company. We are not required to give our opinion as to whether they are beneficial or appropriate or to ascertain the existence of other agreements. It is your responsibility, in accordance with article R. 226-2 of the French Commercial Code (Code de commerce), to assess the relevance of these agreements prior to their approval. We are also required, where applicable, to inform you in accordance with article R. 226-2 of the French Commercial Code (Code de commerce) of the implementation during the year ended 31 December 2019 of agreements previously approved by the General Meeting.
We performed those procedures which we deemed necessary in compliance with professional guidance issued by the French Institute of Statutory Auditors (Companie nationale des commissaires aux comptes) related to this type of engagement. These procedures consisted in verifying that the information provided to us is consistent with the relevant source documents.
AGREEMENTS SUBMITTED FOR APPROVAL TO THE GENERAL MEETING
AGREEMENTS AUTHORISED DURING THE YEAR ENDED 31 DECEMBER 2019
We hereby inform you that we have not been notified of any agreements authorised during the year ended 31 December 2019 to be submitted to the General Meeting for approval in accordance with article L. 226‑10 of the French Commercial Code (Code de commerce).
AGREEMENTS PREVIOUSLY APPROVED BY THE GENERAL MEETING
In application of article R. 226‑2 of the French Commercial Code, we were informed that the following agreements, approved by the General Meeting in previous years, remained in force during the year ended 31 December 2019.
AGREEMENTS WITH LAGARDÈRE CAPITAL & MANAGEMENT, SHAREHOLDER OF THE COMPANY
Service Agreement
Under an agreement signed in 1988 by Lagardère Capital & Management with Matra and Hachette, Lagardère Capital & Management provides a range of resources and skills specific to general strategy, international development, company operations, and management of financing, human potential and corporate image. All senior executives working at Lagardère Capital & Management are members of the executive bodies of the Group and of its principal subsidiaries.
Following the various reorganisations that have taken place since 1988, this agreement is now between Lagardère Capital & Management and Lagardère Ressources.
The remuneration of Lagardère Capital & Management was modified with effect from 1 July 1999 by an amendment approved in principle by the Supervisory Board on 22 September 1999 and in its final version on 22 March 2000. It was again modified by an amendment approved by the Supervisory Board on 12 March 2004, with retroactive effect from 1 January 2004.
Starting from that date, the remuneration payable by Lagardère Ressources to Lagardère Capital & Management for any given year is equal to the total expenses incurred by Lagardère Capital & Management during that year in execution of the services rendered under the Service Agreement, plus a 10% margin subject to an absolute upper limit of €1 million. For 2019, this margin amounted to €1 million.
Supplementary pension plan for certain Lagardère Capital & Management employees who are members of the Lagardère group’s Executive Committee
At its meeting of 14 September 2005, your Supervisory Board approved the introduction of a supplementary pension plan by Lagardère Capital & Management to complement the basic pension system for certain employees who are members of the Executive Committee. The maximum benefit entitlement under this plan is a supplementary pension upon retirement at the age of 65 equal to 35% of a benchmark remuneration, which may not exceed 50 times the annual limit defined by the French social security system. The beneficiaries under of this plan are Lagardère Capital & Management employees who are members of the Executive Committee.
The plan came into effect at 1 July 2005, and benefits vest at the rate of 1.75% of the benchmark remuneration per year of seniority in the Executive Committee, up to a limit of 20 years’ seniority. The pension earned under this plan is payable on condition the beneficiary is still with the Company at retirement or on early retirement. It also remains payable in the event of termination after the age of 55 or invalidity. For 2019, the amount billed by Lagardère Capital & Management in accordance with those agreements amounted to €19.2 million, compared to €21 million in 2018.
French original signed at Paris-La Défense and Courbevoie, on 17 March 2020
The Statutory Auditors
Ernst & Young et Autres
Bruno BIZET
Mazars
Thierry BLANCHETIER
Items appearing in the Annual Financial Report are cross‑referenced with the following symbol AFR