Advicenne : September 28, 2020 - Financial Annual Report 2019

Limited company (société anonyme) with a Board of Directors

with share capital of €1,682,728.80

Registered office: 2, rue Briçonnet, 30000 Nîmes

Nimes Trade and Companies Register No. 497 587 089

Annual financial report

Management report of the Board of Directors

Corporate governance report

For the year ended 31 December 2019

CONTENTS

INTRODUCTION___________________________________________________________________________ 4

CERTIFICATION __________________________________________________________________________ 4

I - MANAGEMENT REPORT OF THE BOARD OF DIRECTORS

1. Statement of the Company's position for the past financial year - Review of financial statements and income1
2. Foreseeable changes in the Company's position _________________________________________________ 9
3. Significant events between the financial year-end and the date of the management report _____________ 10
4. Business activity and results of subsidiaries and controlled companies by business line _________________ 10
5. Purchases of shareholdings and takeovers _____________________________________________________ 10
6. Branch offices____________________________________________________________________________ 10
7. Objective and comprehensive analysis of business developments - Key financial and non-financial performance indicators - Description of key risks and uncertainties - Statement on the use of financial instruments
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8. 1. Analysis of business developments ______________________________________________________ 10
   2. Key performance indicators____________________________________________________________ 11
   3. Description of key risks and uncertainties ________________________________________________ 11
   4. Statement on the use of financial instruments_____________________________________________ 13
9. Internal control and risk management procedures put in place by the Company relating to the preparation and processing of accounting and financial information _______________________________________________ 13
10. Adjustments for the issuance of securities giving access to the share capital__________________________ 14
11. Share disposals (reciprocal shareholdings) _____________________________________________________ 14
12. Bonus share allocations ____________________________________________________________________ 14
13. Stock option allocations____________________________________________________________________ 14
14. Treasury shares __________________________________________________________________________ 14
15. Changes during the year in the composition of share capital ______________________________________ 15
16. Holders of share capital or voting rights _______________________________________________________ 17
17. Share buyback programme _________________________________________________________________ 17
18. Transactions on securities carried out by executives _____________________________________________ 18
19. Proposed appropriation of results - Dividends __________________________________________________ 18
20. Non-deductibletax expenses and expenses reinstated following a tax adjustment _____________________ 19
21. Opinion of the Economic and Social Committee on changes to the economic or legal structure ___________ 19
22. Employee ownership of the Company's share capital ____________________________________________ 19
23. Anti-competitivepractices__________________________________________________________________ 19
24. Table of financial results of the Company for each of the past five financial years _____________________ 19
25. Customer and supplier payment terms ________________________________________________________ 19

This is a free translation into English of the 2019 Financial Annual Report issued in the French language and is provided solely for the convenience of English-speaking readers. In case of discrepancy, the French version prevails.

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25 Amount of inter-company loans granted under Article L. 511-6 3 bis of the French Monetary and Financial Code_______________________________________________________________________________________19

Information on financial risks related to the effects of climate change and presentation of the measures taken to reduce them through implementation of a low-carbon strategy (Article L. 225-100-1 4 of the French Commercial Code)_______________________________________________________________________________________19

27 Statement of non-financial performance ______________________________________________________ 20

1. - REPORT ON CORPORATE GOVERNANCE

1 Composition and functioning of management bodies - Ways in which executive management is carried out - Application of the principle of balanced gender representation on the board ______________________________ 21

1.1. Executive management of the Company _________________________________________________ 21

1.2 Members of the Board of Directors _____________________________________________________ 23

1. Other corporate positions _____________________________________________________________ 25
2. Application of the principle of balanced gender representation on the Board____________________ 28

1.5 Missions of the Board of Directors ______________________________________________________ 28

1. 1. Independence of members of the Board of Directors _______________________________________ 28
   2. Terms of office ______________________________________________________________________ 28
   3. Rules of ethics_______________________________________________________________________ 29
   4. Appointment of new members ________________________________________________________ 29
2. Conditions for the preparation and organisation of the Board's work _______________________________ 29
3. 1. Rules of procedure ___________________________________________________________________ 29
   2. Information received by members of the Board ___________________________________________ 29
   3. Assessment of the Board's work ________________________________________________________ 29
   4. Meetings of the Board of Directors during the financial year _________________________________ 30
   5. Specialised committees _______________________________________________________________ 30
   1. Audit Committee __________________________________________________________________ 30
   1. Composition ____________________________________________________________________ 30
   2. Competences ___________________________________________________________________ 31
   3. Operating procedures _____________________________________________________________ 31
   4. Reports ________________________________________________________________________ 32
   1. Appointments and Compensation Committee __________________________________________ 32 2.5.2.1 Composition _______________________________________________________________________ 33 2.5.2.2 Competences ______________________________________________________________________ 33 2.5.2.3 Operating procedures _______________________________________________________________ 34 2.5.2.4 Reports ___________________________________________________________________________ 35
4. Information relating to corporate officers: Compensation and benefits in kind ____ Erreur ! Signet non défini.
5. Components of compensation due or allocated for the 2019 financial year to the Chairman, Chief Executive Officer and Deputy Chief Executive Officers (ex-post vote) _____________________________________________ 52
6. Corporate officer compensation policy for the 2020 financial year __________________________________ 52

1. Agreements referred to in Article L. 225-37-4 of the French Commercial Code concluded between an executive or a significant shareholder of the Company and a subsidiary __________________________________________ 60
2. Agreements referred to in Article L. 225-39 of the French Commercial Code __________________________ 61

This is a free translation into English of the 2019 Financial Annual Report issued in the French language and is provided solely for the convenience of English-speaking readers. In case of discrepancy, the French version prevails.

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1. Terms of participation of shareholders at the Meeting (Article 19 of the Articles of Association) __________ 61
2. Elements likely to have an influence in the event of a takeover or exchange offer______________________ 62
3. Summary table of the status of the valid delegations of authority and powers granted by the General Meeting of Shareholders to the Board of Directors with regard to the increase of the share capital and the use made of such delegations during the past financial year __________________________________________________________ 63
4. 1. - APPENDICES

This is a free translation into English of the 2019 Financial Annual Report issued in the French language and is provided solely for the convenience of English-speaking readers. In case of discrepancy, the French version prevails.

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