ANNUAL REPORT 2012 - TiGenix

which have taken place in breach of these
provisions if the counterparty to the decision
or the transaction was, or should have been,
aware of such breach.
The procedure does not apply to decisions
or transactions in the ordinary course of
business at customary market conditions.
It also does not apply to transactions or
decisions between companies of which
one holds (directly or indirectly) at least
95 % of the voting financial instruments of
the other, and transactions or decisions
between companies whereby at least 95 %
of the voting financial instruments of both
companies are (directly or indirectly) held by
another company.
Article 524ter of the Companies Code
provides for a similar procedure in the event
of conflicts of interest of executive committee
members. In the event of such conflict, only
the Board of Directors will be authorized
to take the decision that has led to the
conflict of interest. The Company’s executive
management team does not qualify as an
executive committee in the sense of Article
524bis of the Companies Code.
Currently, the directors do not have a conflict
of interest within the meaning of Article 523
of the Companies Code that has not been
disclosed to the Board of Directors.
7.9.3. Related party transactions
Article 524 of the Companies Code provides
for a special procedure that applies to
intra-group or related party transactions
with affiliates. The procedure applies to
decisions or transactions between the
Company and affiliates of the Company
that are not a subsidiary of the Company.
It also applies to decisions or transactions
between any of the Company’s subsidiaries
and such subsidiaries’ affiliates that are not
a subsidiary of the Company. Prior to any
such decision or transaction, the Board of
Directors must appoint a special committee
consisting of three independent directors,
assisted by one or more independent
experts. This committee must assess the
business advantages and disadvantages
of the decision or transaction for the
Company. It must quantify the financial
consequences thereof and must determine
whether or not the decision or transaction
causes a disadvantage to the Company
that is manifestly illegitimate in view of
the Company’s policy. If the committee
determines that the decision or transaction
is not manifestly illegitimate, but is of the
opinion that it will prejudice the Company,
it must clarify which advantages are taken
into account in the decision or transaction
to compensate the disadvantages. All these
elements must be set out in the committee’s
advice. The Board of Directors must then take
a decision, taking into account the opinion
of the committee.
Any deviation from the committee’s advice
must be motivated. Directors who have
a conflict of interest are not entitled to
participate in the deliberation and vote
(as set out in section 7.9.2 above). The
committee’s advice and the decision of
the Board of Directors must be notified to
the Company’s statutory auditor, who must
render a separate opinion. The conclusion of
the committee, an excerpt from the minutes
of the Board of Directors and the opinion
by the statutory auditor must be included in
the (statutory) annual report of the Board of
Directors.
The procedure does not apply to decisions
or transactions in the ordinary course of
100 TiGenix I annual report 2012