7.1.9. Financial year (Article 14 of the Articles of Association)
“Each fiscal year shall have a duration of twelve (12) months, to begin on January 1st and to end on December 31st of each year.”
7.1.10. Statutory distribution of profits (Article 15 of the Articles of Association)
A. “From the distributable profits, the following amounts shall be withheld, in the following order:
- The amount required to pay the “primary dividend” to the shareholders equal to five percent (5%) of the amounts paid up on the unredeemed securities in accordance with calls for funds, provided however that (where the profits for a given year do not allow such dividend to be paid) the shareholders shall not be entitled to claim such dividend from out of the profits of subsequent years.
- From the available remainder, the Ordinary General Meeting, upon a proposal by the Board of Directors, shall have the authority to resolve to withhold the amounts that it deems appropriate (and even the entire amount of such available remainder), either to be carried forward to the next fiscal year, or to be paid into a “prudential fund” or into one or more ordinary, extraordinary or special reserve funds. Such reserve fund(s), which shall not bear any interest, may be distributed to the shareholders, or allocated to complete the 5% primary dividend for the shareholders, in the event of insufficient results during one or more fiscal years, or to acquire and to cancel shares in the Company, or to redeem in whole or in part such shares.
- The remaining balance (if any) shall be divided up among all the shareholders, without any discrimination, and each share shall entitle its holder to receive the same income.
However, any shareholder who can prove at the end of a financial year, that shares have been registered in his name for at least two years and that they continue to be registered in his name at the date of payment of the dividend paid for such financial year, will be entitled to a preferential dividend on the shares that are thus registered, equal to 10% of the dividend (initial dividend and additional dividend) paid on the other shares, including in the event of payment of the dividend in new shares, the preferential dividend thus paid being rounded down to the nearest lower cent, if necessary.
Similarly, any shareholder who can prove, at the end of a financial year, that shares have been registered in his name for at least two years and that they continue to be registered in his name at the date of completion of an increase in capital carried out through capitalisation of reserves, profits or share premiums by the distribution of bonus shares, shall be entitled to an increase in the number of bonus shares to be distributed to him, equal to 10%; this number being rounded down to the nearest lower unit in the event of fractional share rights.
The new shares created in this manner will be identical, for the purposes of calculating the rights to the preferential dividend and to the increased share allocations, to the old shares from which they result.
- The number of shares eligible for these preferential dividends may not exceed 0.5% of the share capital at the closing date of the past fiscal year, for the same shareholder.
B. The losses (if any) shall be charged to the retained earnings from preceding financial years or to the reserve funds, and the balance shall be booked into a special ‘carry forward’ account.” ”
7.1.11. Annual General Meeting
Annual General Meetings are governed by all the legal provisions and regulations laid down in this connection. It is specified that, in accordance with Article 12 of the Company’s Articles of Association, if the Board of Directors so decides when the General Meeting is called, any shareholder may take part in the meeting by videoconference or by any other telecommunication or remote transmission means including the Internet, under the conditions stipulated by the applicable regulations at the time it is used. If this decision is taken, it is communicated in the meeting notice published in the Bulletin des Annonces Légales Obligatoires (B.A.L.O).
Since the Annual General Meeting of 29 April 2004, double voting rights have been eliminated. Applying the provisions of French law No. 2014-384 of 29 March 2014, the Annual General Meeting of 22 April 2015 confirmed that each share entitles the holder to only one vote at General Meetings.
In the exceptional context related to the Covid-19 health crisis, L’Oréal’s Ordinary and Extraordinary General Meeting was held on 20 April 2021 behind closed doors, i.e. without the physical presence of shareholders and persons entitled to attend, at the Company’s administrative headquarters, within the framework of the regulations then in force(1). Shareholders were convened and informed of the specific procedures for holding the Annual General Meeting specifically via the notice of meeting published in the Bulletin des Annonces Légales Obligatoires on 15 March 2021 and a press release issued on 16 March 2021. This press release also specified the identity of two companies as scrutineers (Téthys and Nestlé S.A.), which are the two shareholders holding the largest number of votes and having accepted this duty, as they would have been under ordinary law(2). In this context, shareholders were invited to vote by correspondence using the voting form or via the Internet on the Votaccess secure voting platform, or to give a proxy to the Chairman of the Annual General Meeting or to any other individual or legal entity of their choice.
(1) In the absence of an express provision in the Articles of Association, the role of General Management may not be performed on or after the age of 65.
