Read the Registration Document - Guerbet

3) Report of the Chairman of the Board of Directors on corporate governanceand internal control and the principles for setting the compensation ofcorporate officersIn accordance with article L 225-37 subsection 6 of the French commercial code, we are pleased to reportto you notably on the composition of the Board, procedures for preparing and organising its work as well asthe procedures and rules established by it to determine compensation and benefits of any nature granted tocorporate officers, as well as the internal control and risk management procedures implemented by yourcompany. This report was approved by your Board of Directors on 5 March 2013.Guerbet adheres to the AFEP/MEDEF corporate governance code. The exceptions to the standard withrespect to the composition of the Board of Directors and Committees are mentioned in the table summarypresented at the end of this report. This code can be consulted at the website: www.code-afep-medef.com.I - Corporate governanceYour Board of Directors had seven members at 31 December 2012, three of whom are considered asindependent directors. These are Messrs. Jean-Jacques Bertrand, Jacques Biot and Ms. Marie-ClaireJanailhac-Fritsch. Jean-Jacques Bertrand is the Chairman of the Board of Directors. In 2012, the Board ofDirectors met eight times with an attendance rate of 96%.Independent directors meet the criteria set by the APFEF/MEDEF Code:- they are not a member of the Guerbet family;- they have no relationship of any kind with the Company or one of its subsidiaries;- they exercise no function within the Company's management;- they do not possess a significant number of shares of the Company;- they are not bound by any employment contract with the Company or one of its subsidiaries;- they have exercised their functions on the Board of Directors for less than twelve years.Dr. Michel Guerbet is Honorary Chairman of the Company.In accordance with the provisions of the law and the Company's Articles of Association, members of theBoard of Directors are appointed for terms of office of six years. It is noted that the recommendations of theAFEP-MEDEF Code providing for a four-year term of office for directorships not been applied. TheCompany undertakes, whenever compatible with its organisation and operating procedures, to fulfil thecriteria of the AFEP-MEDEF Code as best as possible. However, in light of the size of his company, itsequity profile and the aim of ensuring that the Board of Directors operates based on a long-termperspective, the Board has decided in consequence to provide for an exception waving the application ofthis recommendation.The Board of Directors adopted its charter (rules or procedures) on 21 May 2010. This charter sets forthand completes the rules governing the functioning of the Board provided for by the Company's Articles ofAssociation and the law.The Executive Management of Guerbet is entirely separate from the Chairmanship of the Board ofDirectors. On 17 October 2011, the Board of Directors appointed Yves L’Epine as the Chief ExecutiveOfficer with a term of office commencing on 23 November 2011.Since the beginning of 2013, the Board of Directors met twice, including once to review the annual financialstatements for fiscal 2012.30