Vilmorin & Cie - Annual report 2017-2018

3 Management REPORT Report of the Board of Directors to the Joint Annual General Meeting (Ordinary and Extraordinary) of December 7, 2018 ANNUAL REPORT Vilmorin & Cie 100 2017-2018 Issue of shares and other securities providing access immediately and/or when due to the capital stock by private placement under article L.411-2, II of the French Monetary and Financial Code We also request that full powers be granted to your Board of Directors to proceed, at its discretion, in one or several operations, with the issue of ordinary shares or securities providing access immediately and/or when due to the Company’s capital stock as governed by articles L.228-91 et seq. of the French Commercial Code, without preemptive subscription rights, by private placement under article L.411-2, II of the French Monetary and Financial Code. Such issues are subject, in particular, to the following modalities and conditions: The maximum nominal amount for the capital stock increases that may be effected immediately, or when due, is 20% of the capital stock on the day of the decision by the Board of Directors. This amount will be deducted from the total ceiling submitted to your Board of Directors in its sixteenth resolution or, where relevant, from the total amount of ceilings provided for in resolutions of the same nature which might possibly follow these resolutions during the validity of the present delegation. The nominal amount of shares that are liable to be issued in the case of new financial operations will be added to these ceilings, to preserve the rights of bearers of securities that provide access to the capital stock. In all cases, issues of securities by virtue of the present delegation are legally limited to 20% of the capital stock every year. The price for the subscription of shares and/or securities issued will be determined in compliance with the provisions of articles L.225-136 and R.225-119 of the French Commercial Code. Moreover, in cases where one of the companies in which your company holds, whether directly or indirectly, more than half the capital stock, issues securities providing access to your company’s capital stock, the Board of Directors may exercise the authorizations granted to proceed with the issue of these securities. All the conditions of these delegations are set out in the ordinary and extraordinary draft resolutions (eighth resolution and thirteenth thru sixteenth resolutions) submitted for your approval, and also in the Statutory Auditors’ special report. Capital stock increase reserved for employees We wish to inform you, in compliance with article L.225-129-6 of the French Commercial Code, that when any decision is made to increase the capital stock, we are obliged to present you with a draft resolution to proceed with a capital stock increase reserved for employees as part of a company or group savings scheme. This project is the subject of the seventeenth resolution as submitted for your vote. Since the provisions laid down by this legislation do not, in our opinion, appear to be suited to the specific situation of our Company and our Group, on this particular occasion your Board of Directors will not be making any voting recommendations, and each shareholder will freely assess its relevance. Authorization to increase the capital stock through the incorporation of issue premiums, reserves, profits or any other items with a view to allocating free shares to shareholders In order to reinforce its shareholding policy and encourage the liquidity of its shares, we propose that you delegate once again to your Board of Directors, for the duration of 26 months, the necessary powers to proceed with one or several increases in capital stock through the incorporation of issue premiums, reserves, profits or any other items, with a view to allocating free shares to the shareholders. All the provisions of this delegation are developed in the draft eighteenth resolution. General provisions The rules adopted to establish these documents respect legislation in force, and take into account the provisions resulting from the IFRS accounting and evaluation principles for consolidated financial statements as they were applied by the European Union on June 30, 2018. In their reports your Statutory Auditors confirm that they have accomplished their mission. With the exception of the seventeenth resolution, your Board of Directors invites you to adopt the ordinary and extraordinary resolutions which it is submitting for your approval.