SFIL Annual financial report 2018

6 I General information 144 SFIL Annual Financial Report 2018 Fiscal year (article 33 of the by-laws) The Company’s fiscal year begins in January 1 and ends in December 31 of each year. Exceptional events and legal proceedings Please refer to the text pertaining to legal and tax risks on pages 30 and 31 of this Annual Financial Report. Statutory distribution of profits (article 35 of the by-laws) 1 –  Each year, amounts to be transferred to reserves as provided by law shall be deducted from the profit for the year, less prior-year losses if applicable. Thus, 5% shall be deducted to constitute the legal reserve fund; this deduction ceases to be mandatory when this fund reaches one-tenth of the share capital; it resumes when, for any reason, the legal reserve has fallen below this fraction. Distributable profit consists of the profit for the year, less prior-year losses, and amounts transferred to reserves in accord- ance with law or the by-laws, plus any retained earnings carried forward from previous years. 2 – Distributable profit is allocated as follows: –– The Preferred Dividend (as defined below) shall be paid first to the Preferred Shareholders under the conditions and limits set forth below; –– The balance of the distributable profit shall be distributed among the holders of Common Shares after deducting any amounts deemed by the general meeting to be transferred of any reserve funds or to the retained earnings account; no dividend may be paid to the holders of Common Shares if the Preferred Dividend relating to the considered financial year, plus any Preferred Dividend relating to a prior but undistributed financial year has not been distributed and paid in full. The Preferred Dividend due for each fiscal year to the Preferred Shares shall be equal to a total amount of 20 euro cents for all the Preferred Shares outstanding. The Preferred Dividend shall be allocated among the Preferred Shareholders pro rata to the Preferred Shares held by them. In the event the distributable profit of a financial year (within the meaning of article L.232-11 of the Code of Commerce) is not sufficient to allow the distribution of the total amount of the Preferred Dividend for the relevant financial year, this Pre- ferred Dividend or, if applicable, the portion of this Preferred Dividend that has not been distributed, shall be carried over to future years without limitation of duration and shall be paid to Preferred Shareholders as soon as the distributable profit of the Company will be sufficient. As an exception to the above provisions, the Preferred Dividend payable for the current fiscal year, in which a Preferred Share is issued, shall be equal to the proceeds of the Preferred Dividend as determined above and the number of days between the issue date of the relevant Preferred Share and December 31 of the relevant fiscal year in relation to a 365-day basis, or 366 days for leap years. The Preferred Dividend shall be paid to the holders of Preferred Shares on the date of payment of the dividend to the Com- mon Shareholders for the same financial year or, in the absence of a dividend allocated to the Common Shareholders, on the tenth (10th) business day following the date of the Annual General Meeting (the « Payment Date »). General Shareholders’ Meetings Calling of meetings (article 24 of the by-laws) General Shareholders’ Meetings shall be convened either by the Board of Directors or otherwise by the statutory auditor(s) or by a representative appointed by the President of the Commercial Court ruling in summary proceedings upon the request of one or more shareholders representing at least 5% of the share capital. During the liquidation period, the meetings shall be convened by the liquidator(s). General meetings shall be held at the registered office or at any other location indicated in the notice of meeting. The convening notice shall be given fifteen days before the date of the meeting, either by a simple or registered letter addressed to each shareholder, or by electronic mail sent to each shareholder, and in this case subject to the implemen- tation of the provisions of the article R.225-63 of the Code of Commerce( 1 ), or by a notice published in a Journal of Legal Notices at the headquarters. In the latter case, each shareholder must also be convened by simple letter or, at his or her request and at his or her own expense, by registered letter. In the event of recourse to video-conferencing or telecommunication, the notice shall specify the means used. If a meeting has not been able to meet and deliberate without due quorum, the second meeting and, if necessary, the sec- ond continuing meeting, shall be convened in the same form as the first one and the notice of meeting shall recall the date of the first one and reproduces its agenda. Right to attend General Shareholders’ Meetings (article 26 of the by-laws) Each shareholder has the right to participate in general meetings and deliberations personally or by proxy, irrespective of the number of his shares, on simple proof of his or her identity, provided that these shares have been fully paid up and recorded in the financial statements on his or her name on the day of the general meeting. Any shareholder may vote by correspondence by means of a form, which he or she may receive under the conditions spec- ified in the notice of meeting. (1) The recourse to electronic telecommunication for the convening of shareholders assumes that the Company has submitted to them a proposal to this effect, and has obtained their agreement.