In accordance with article L. 22-10-29 of the French Commercial Code, the Supervisory Board meeting of September 11, 2019 established, on the proposal of the Audit Committee, a procedure for assessing ordinary ongoing arm’s length agreements.
The procedure for checking the classification and evaluation applies to all new agreements as well as any subsequent amendments (in particular renewal, extension) or when there are certain indications that an agreement or a certain type of agreement no longer fully qualifies as ordinary agreements.
The Legal Department is informed of agreements typically classified as related-party agreements or ordinary agreements at Publicis Groupe SA by the person directly or indirectly concerned who is aware of a draft agreement and, more broadly, by any Groupe body that is aware of a draft agreement.
The ordinary nature and arm’s length terms and conditions of agreements are considered on a case-by-case basis by the Legal Department with the support of the Finance, Accounting, Real Estate and Internal Control Departments with reference to the study published by Compagnie Nationale des Commissaires aux Comptes in February 2014 on related-party and ordinary agreements. If, following analysis, it appears that the agreement cannot be classified as an ordinary arm’s length agreement, it will be subject to the procedure for assessing related-party agreements.
Any person directly or indirectly concerned with an ordinary agreement is not involved in its evaluation.
The Audit Committee looks at existing agreements as well as the criteria allowing the classification of ordinary arm’s length agreements. It informs the Supervisory Board of the follow-up and outcomes of this procedure in the meeting on the annual review of the agreements entered into and approved in prior financial years that are still in effect.
The Supervisory Board expresses a view on changes to the procedure it feels are necessary and, on the exclusion, or inclusion of certain agreements in the category of ordinary arm’s length agreements.
Related-party agreements
Pursuant to article L. 225-86 of the French Commercial Code, any agreement entered into directly or through an intermediary between the Company and:
must be subject to the prior authorization of the Supervisory Board.
These provisions are applicable to agreements in which one of these persons is indirectly interested.
Agreements between the Company and a company are also subject to prior authorization if one of the members of the Management Board or Supervisory Board is the owner, a partner with unlimited liability, a manager, a director, a member of the Supervisory Board or, in general, an executive officer of that company.
Under the terms of article L. 225-88 of the French Commercial Code, the person directly or indirectly interested in the agreement is required to inform the Board as soon as he/she is aware of an agreement to which article L. 225-86 is applicable. If he/she sits on the Board, he/she may not take part in the discussions or vote on the authorization requested.
The foregoing provisions are not applicable either to agreements relating to day-to-day operations and entered into under normal conditions, or to agreements entered into between two companies, one of which holds, directly or indirectly, all of the share capital of the other, as the case may be, less the minimum number of shares required by law.
In accordance with the provisions of article L. 225-86 of the French Commercial Code, the Supervisory Board’s authorization decisions since August 1, 2014 are all justified.
No agreements were entered into or continued in application of the provisions applicable to related-party agreements during the 2022 financial year.
The Management Board presented its management report at the Supervisory Board Meeting of February 1, 2023, as well as the annual and consolidated financial statements for 2022. The Supervisory Board examined them, took note of the opinion of the Audit Committee on the closing of the accounts, and had a discussion with the statutory auditors. After having received all the relevant and necessary information, the Supervisory Board had no comments to make.
The Specialized Committees set up within the Supervisory Board are as follows:
