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.
Where applicable, it is also our responsibility to provide shareholders with the information required by article R. 226-2 of the French Commercial Code in relation to the implementation during the year of agreements and commitments already 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 (Compagnie 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 2020
We hereby inform you that we have not been notified of any agreements authorised during the year ended 31 December 2020 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 AUTHORISED SINCE 31 DECEMBER 2020
We have been notified of the following agreement, which has been authorised since 31 December 2020 and has been previously approved by your Supervisory Board.
AGREEMENT BETWEEN LAGARDÈRE SCA (“THE COMPANY”) AND AMBER CAPITAL UK LLP AND AMBER CAPITAL ITALIA SCG SPA ACTING ON BEHALF OF VARIOUS COMPANIES THEY ARE MANAGING (“AMBER CAPITAL”)
People involved
Amber Capital UK LLP and Amber Capital Italia SGR SpA, acting on behalf of the various funds they manage (“Amber Capital”), together owning more than 10% of the voting rights of the Company.
Terms, nature and purpose
On 27 April 2021, the Supervisory Board approved the signing of a settlement agreement between Amber Capital and your Company (the “Settlement Agreement”), the purpose of which is to terminate all legal disputes between them and to commit to engaging mutually and without disparagement in constructive dialogue.
This Settlement Agreement was concluded for a twenty-year period. The signing of the Settlement Agreement gives rise to no financial obligations for the Company.
Premise
The Supervisory Board considered that this Settlement Agreement promotes composed dialogue between the Company and its shareholders, and that this is aligned with its corporate interests.
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 2020.
AGREEMENTS WITH LAGARDÈRE MANAGEMENT (FORMERLY LAGARDÈRE CAPITAL & MANAGEMENT)
People involved
Arnaud Lagardère and Pierre Leroy, respectively Managing Partner and co-Managing Partner of Lagardère S.C.A. and Chairman and Chief Executive Officer of Lagardère Management.
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.
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 2020, the amount of this margin is €1 million.
On 31 August 2020, under the terms of a partial asset contribution transaction involving the transfer of all the assets and liabilities of the contributed business segment, Lagardère Management automatically replaced Lagardère Capital & Management (now Lagardère Capital) in the performance of the assistance agreement. For accounting and tax purposes, the transaction took effect retroactively from 1 July 2020.
Following the various reorganisations that have taken place since 1988, this agreement is now between Lagardère Management and Lagardère Ressources.
For 2020, the remuneration of Lagardère Capital & Management and Lagardère Management under this agreement already approved by the General Meeting amounts to €16.7 million, compared to €19.2 million in 2019.
French original signed in Courbevoie and Paris La Défense, on 28 April 2021.
The Statutory Auditors
MAZARS
Simon Beillevaire
ERNST & YOUNG et Autres
Bruno BIZET
Items appearing in the Annual Financial Report are cross-referenced with the following symbol AFR