AGM 2020

Jul 8, 2020

Slides

Welcome to this combined ordinary and extraordinary general meeting of shareholders of Alstom. The floor is at Henri Poupees Lafarge. Thank you. Good afternoon, ladies and gentlemen. I hereby declare the combined ordinary and extraordinary general meeting of shareholders open. The emergency measures related to the COVID-nineteen pandemic adopted by the French government have led us exceptionally to hold this meeting behind closed doors at our headquarters. I would like, therefore, to thank all the shareholders who have been kind enough to log on to attend this meeting remotely. I am joined by Mrs. Emmanuel Petrovic, General Counsel and Laurent Martinez, Chief Financial Officer. In accordance with the law, I am now responsible for setting up the committee. In view of the closed session imposed by the health crisis linked to COVID-nineteen, I call on Mrs. Emmanuel Petrovic and Mr. Laurent Martinez, members of the assembly present who have accepted this position to act as scrutineers. I propose to appoint Mrs. Emmanuel Petrovic as secretary to the Bureau of the Assembly. Also participating in our meeting but remotely are the statutory auditors of our company, Jean Luc Bartlet, the firm Mazars and Edouard Demarc representing the firm PricewaterhouseCoopers Audit. I'm now going to give the floor to Emmanuel Petrovic. Thank you, Chairman. The agenda of the combined Annual General Meeting appears on Page 3 of the notice of meeting published on our website. It is also included in the notices of accordance with the law. The meeting will take place as follows: the Chairman will present the highlights of the 2019 2020 financial year review we'll review then the 1st year of deployment of Alstom in Motion strategy. Therefore, our Chairman will outline the impact and adaptation measures have been taken in response to the COVID-nineteen crisis. He will also present the rail market. Finally, our President will provide an update on the ongoing acquisition of Bombardier Transport. Laure Martinez will comment on the group's results for the financial year. Henri Poupart Lafarge will report on the conversation of the Board of Directors following this meeting. Jan de Labrieres, Independent Lead Director, will present the activity of the Appointments and Remuneration Committee of which he is Chairman as well as the overall report on the remuneration, the elements of remunerations of Henri Poupe Lafarge for the past financial year and the remuneration policy for corporate officers. Ms. Sylvie Ricard and Cande de Beaupre will present the work of the council committees they chair. The statutory auditors will present their reports. In view of the closed session, there will be no debate or questions. We will conclude with the results on the vote and resolution set out in the notice of meeting on Pages 44 to 59. The report of the Board of Directors on the resolution is included in the same document. The statutory auditors report have been made available to you. You have the folder here on the desk, and the list will be included in the minutes of this meeting. All these documents have been made available to shareholders at the registered office. On the registration date of the shares to which at least one voting right is attached, the share capital is composed of 226,000,000 exclusively remotely. Shareholders could vote until yesterday. Exclusively remotely. Shareholders could vote until yesterday at 3 pm. On this date, shareholders voted remotely had 163,000,000,46,300 shares with voting rights, 71.87 percent of shares with voting rights. The quorum required for this general meeting is 20% for the ordinary part and 25% for the extraordinary part. The meeting may act validly. And the report is in the notice Page 8, 228. In order to not lengthen the duration of this general meeting, I'm not going to read out this report. Thank you. Thank you very much. I am going to move on to the general presentation. We are going to start with the highlights of the year 2019, 2020. We are going to detail them. Four highlights. 1st, it's the 1st year of Alstom in Motion. Then we were impacted by the COVID 19 crisis, and we took the appropriate measures to cope with it. Then this rail market was impacted, extremely robust. And finally, we continued our acquisition project of Bombardier Transportation. First of all, the year 2019 2020, 1st year of our strategy has some in motion. As you remember, we announced this strategy last June. Let me recall the main pillars of this strategic plan. After 10 years of globalization of the company throughout the world on all continents, we wanted to refocus our company on solutions which are greener and smarter. Three pillars for this strategic plan. We want to continue to grow, as we did in the last 10 years, in growing more rapidly than the market. And we're going to grow by offering new solutions to our customers, solution with greater value to our customers, not necessarily new customers in new geographies. We want to continue innovating, of course, but we are going to focus our innovation towards green mobility, smart mobility, digital mobility in order to improve our efficiency, our environmental efficiency and cope with climate change. We have a very robust order book, over €40,000,000 We have to deliver efficiently, and it should be satisfactory for our customers. So we insist on the Alacom teams, and we want this team to be agile, inclusive and responsible, which is in line with the businesses we are in, business in favor of environment and for public transportation, for early transportation of citizens. And therefore, we have to be inclusive and responsible. If we have a look at the results of this fiscal year 2019, 2020, they are in line with the expectations we had as we launched as some in motion. We knew that we had a 1st year for which the growth of the revenues will be rather limited. It is 1%. It was impacted by COVID-nineteen. So the revenues are €8,200,000,000 slightly up versus last year. It is supported by an order taking €9,900,000,000 that is a book to bill between a book to bill above 1, which is the sign for future growth, slightly smaller than last year. But last year, we had exceptional orders in France with the TGV of the future or in well, outside of France. The margin will keep on increasing 7.7 percent versus 7.5 percent, thanks to our efforts in terms of project implementation and competitiveness and the deployment of our new platforms and standards of new metros, regional trains, tramways and very high speed trains. Free cash flow, plus €206,000,000 so major increase versus last year, reflecting the efforts deployed by the company to control the capital working capital requirement and to speed up the delivery of the products. Net income plus 3%, euros 446,000,000 euros Let me come back to those different points rapidly. 1st of all, in line with the growth of the group, we had significant orders booked in, in on various continents, €9,900,000,000 As you can see here on the slide, you see the photographs of some of the orders in Australia, in Perth or Sydney, in the United Kingdom for maintenance activities. In Europe, many regional trains. The market of regional trains in Europe is extremely good and continues to be good, but also in Spain, metro or in Marseille in France, metros as well. So an order book which is diversified from a geographic point of view and from a product point of view. We insist in our new strategy on digitization, be it within the group but also for products. And we are quite satisfied. We have a 1st year, which is successful as to our strategy implementation for signaling. As you see, plus 14% for orders and for sales, plus 13%. You have a few examples of orders in Marseille, an order like regarding the Metro Sydney, where the RTMS of the line of Paris Lyon, this line is saturated. And instead of 13 trains per hour, we'll have 16 trains per hour, thanks to this new signaling system. And by the way, if you take into account the new very high speed trains with 20% with the capacity greater by 20%. And this investment is modest compared to the cost of new lines. We increased the capacity of Paris Lyon by 40% while combining the signaling system and new trains. Innovation. Innovation is at the heart of the strategy of Alstom. This is part of the DNA, and we refocus this innovation on clean technologies. Of course, we have to take into account the fact that a quarter of the fleet of regional trains is still made up of diesel trains and all operators including us, would like to reduce this fleet. And by 2,040, we are going to exit this fleet from our operations. We developed alternatives. Our hydrogen train, quite successful, be it in Germany, but tests were passed in the Netherlands. And we recently signed an agreement in Italy. We continue our efforts in France to launch the hydrogen train in France, and the year was marked by an acceleration of the hydrogen test and test in Germany as well for hydrogen. And for shorter distance as well, we are developing a battery train. We had a first order in Germany for train with battery with an autonomy of 80 to 100 kilometers. It's shorter than hydrogen going up to 1,000 kilometers. But according to the usage, it might be an extremely good solution. So therefore, we have a complete range of trains which are autonomous in terms of energy. In the delivery of our order book, one train, which is the most technologically advanced, is our very high speed train in the U. S. It is extremely advanced from a technological point of view, combining the very high speed, which is a first breakthrough in the U. S. It doesn't exist in the U. S. And it combines the tilting process as well. So the pendular tilting trains in like in Italy going quicker in the curves. So it combines both technologies, which makes this train extremely complex. We are testing this train. I can tell you that the tests are going very well. And this is an anecdote, but reflecting the commitment of our teams, they took place during the lockdown period. And our experts, as you see here on the photograph or on the slide, could remotely control the test of the train, which was in Colorado in Pueblo in the U. S. So to say that we continue delivering our order book in spite of the COVID-nineteen crisis. The operational efficiency now increased in margin by 4% from 7.5% to 7.7%. We focus on the project management efficiency. We take into account our globalization, and we benefit from it with a specific effort on India. This is a footprint and a base for further developments throughout the world and digitization of our processes internally, management processes with a unique system covering over 80% of the turnover managed in one IT system only, which is very useful in our businesses. A train or the production of a train relies upon at least 10 different sites worldwide, and therefore, it is necessary to coordinate all those sites. The fact that it is covered by only one system, that's key. We also have robotization. As you may see here on the small photograph, one problem with the robotization of our business is the size of our product, the size of trains. We need to have welding robots, which are extremely robust. And we have the highest capacity welding robots in the rail market. And we start the robotization of our trains. It is not easy to do. We are having this highest capacity welding robot. Now another important factor that's in the forefront of our strategy and in our DNA is indeed our social and environmental responsibility. We do want to be a socially responsible and environmentally responsible company. And in terms of the environment, we do have objectives regarding the products that we deliver. The ones we deliver must of course be energy sober and be eco designed that is be totally recyclable. But as well as that we want to be sober ourselves in the way in which we produce these different pieces of equipment. So here are some of the objectives that we set ourselves. Energy reduction objectives, the fact that our electricity comes from renewables. We've got projects to do with solar panels and wind farms in our different sites. And also, as I said, the fact that our solutions will be eco designed. That's for the purely environmental side of it. And also what is close to our heart is the safety of our employees. We brought down the accident frequency rate for the last 10 years now. We're very proud of that. We are also improving our diversity picture, perhaps too slowly. 4% of women in operational management positions. We want to bring it up to 20%. We're an engineering company, and we're trying to have more women on board in those posts. And we are very proud that we were accredited as top employer for the first time in Europe. And we want to have that ranking in other countries in the world too. That's our intent. So we have the Alstom Foundation, of course, that is growing in size. We are aiming at 100,000 beneficiaries from local actions for this foundation. And also we abide by CSR and ethics and compliance criteria when it comes to total purchasing volume. That's evaluated as per those criteria. So as such, obviously, these objectives cannot but be beneficial for the environment and for society at large. And that's our aim. So regarding the stock price, you see there were periods when we outperformed the SPS 120 Index. It's a combination of the business performance we had and also the fact that our business activity is going the way history is bringing us, be sparing of our natural resources, take care of the planet and be sustainable. Now the more recent past was marked particularly by the COVID-nineteen crisis, of course, even though from a strict perspective the crisis impacted us at the start of this financial year now because as you know we closed our financial year on the 31st March. So we didn't have a huge impact in the last financial year due to this crisis. But it's absolutely essential to talk about these things. And I'll tell you how we've been reacting to that crisis. So our immediate obvious reaction was to make sure that we vouchsafed health and safety of our employees at all times. So we had to mobilize people all around the world. Crisis units were set up so as to come into line with the new standards and requirements in respect of this. So sometimes we have to pause and mark time and set up the requisite measures to enable people to do their job normally again. So here you see a picture from India in Madapura in India where we're checking temperatures at the site entrance. So that kind of activity that took place in our different sites around the world. So people who could, of course, obviously started working remotely, that was 24,000 employees out of the 40,000. So when the health crisis was at its peak, we had 24,000 people out of the 40,000 working for us working remotely and 8,000 working out on sites. There were operatives. Obviously, transportation was an essential. So 8,000 therefore availed of short time working arrangements or took holiday, took leave and so on. And others then stayed on the job because they were an essential service. So it was a very, I would say, disrupted month of April, but in May people started to go back to work again. And when lockdown measures were eased up and throughout June and then coming into July, in nearly all of our sites, we got back to more or less normal activity apart from some parts of the world where there was a huge impact still felt like in Brazil and in India and Kazakhstan where the health crisis is indeed very much present. So apart from the purely health related aspects, we also had to come to terms with a drop in traffic, therefore a drop in maintenance activity for us, drop in production too and a drop in inflows of monies into the company. So we had to make cost savings efforts. And those savings were to be seen in the light of a very full backlog. We didn't want to stop our working tools. We wanted to speed up insofar as we could the delivery of our orders. And we think that the market is resilient and that the future of the railway market is indeed very positive. So we don't want to trim our sales renting, just come into line with current requirements and enacting furlough or holiday measures, ask people to take their annual leave, part time working, that kind of measures taken during the containment period. So we therefore suggest that we should not pay out a dividend this year. So everybody shares in this general effort within the company. And in that context, we've proposed that we should not pay out a dividend in respect of the last financial year. That will be put to the vote later on. So obviously, everything in the future will depend on the innovation we do now. So we've got to pick up challenges, indeed new challenges in the light of this health crisis. We've got to work side by side with our clients, with operators so as to suggest to them how they might mitigate the effects of this crisis by social distancing measures, for example, to know where are the coaches or the wagons that are full, where are the ones that are rather empty, plus the occupancy rate. So we have an IT based system to tell passengers where they should board a train, for example, so as to have more social distancing possible and also disinfection, simple cleaning and cleansing measures and also the antibacterial anchor bars that we've made available. In the very short term, we made such solutions available. And in the more medium term, we think we should take care of how we can upgrade the conditions in which people will travel going forward. So we are a stakeholder in our collective efforts to come to terms with this crisis. So to that end, we have donated masks, 200,000 masks and protective materials and equipment donated in all countries around the world that were present in to hospital people, hospital staff. Also we helped to purchase masks for the railway segment in France. And we helped the French value chain in the railway industry to come to terms with this also. We increased the budget of our foundation from €1,500,000 up to €1,900,000 worth. So we increased the budget for the foundation, partially funded by the reduction of the Q1 compensation of the CEO and the members of the executive committee in Alto. And also we may develop to hospital administrations, different tools like 3 d printing equipment to produce facial shields and ventilator valves in Spain, Argentina, France and the U. S. A. For example. So we are putting in our best efforts to overcome this health crisis. It's not over yet. But within Alstom, we have got back to a more business as usual context relatively speaking. Now we've got to look at the status of the market and see the impact of this crisis on our market and on the fundamentals of this market. So there are 2 effects that are not contradictory, but that are fairly different, let's say, that we see on the market. Firstly, the first impact is the sudden drop in rail traffic, which entailed a strong dip in income for our clients, of course. And this is behind us at this point. Traffic is picking up more or less normally, and it's resuming at a more or less normal pace. And of course, the rolling stock is resuming service faster than passengers are getting on board. So the occupancy is not, of course, 100%. But I think if you look at the figures here, 100% of trains are off and running in many places Shanghai, Janssen and so on in Europe as well. But the trains are there, but the passengers are there isn't a full occupancy. There are fewer passengers using these services in the MEN. So our clients have lost 1 or 2 months' worth of ridership and that makes a dent in their books. In certain regions of the world, we've got to be more attentive to what's going on, especially in the Mideast because of the oil price plummeting. And that, of course, has nefarious impacts in the medium and longer term in that region of the world. So there are immediate impacts. Very shortly after that, we saw another impact going in the opposite direction, I would say, which is the stimulus packages set up by the different states. Now the different states have enacted measures very quickly very early on in the United States, in the HEROES Act, CARES Act and so on, a lot of money being earmarked for public transportation, for mass transit in the U. K, a lot of support supplied to franchisees. And the idea is that systems should be supported in the different parts of the world. The states have enacted measures accordingly. Now in some cases, the stimulus packages have been postponed a little bit, but a lot have been confirmed, the very high speed rail link in the U. K, for example. And if you look at Spain as well, Renfe restarting tenders and rolling stock. And then stimulus packages in favor of sustainable mobility here in Europe or in other countries outside of Europe. These plans take longer to shape up. They're not immediate support measures, but they will indeed generate additional incremental demand later on. For example, the fact of not having airplanes supplying a service when there can be a train connection in less than 2.5 hours, possible ban on airplane connections. In the U. S. As well, there's been a debate on the setting up of a very high speed network that didn't exist in the past. And in Germany, Germany, they're doing a lot actually in favor of the climate, €130,000,000,000 worth of a stimulus package for Climate Friendly Industries. Among in that figure €9,000,000,000 on the hydrogen plan, that's very important for us of course. And these are fine initiatives being taken in Germany and other places in favor of sustainable mobility. So a couple of words about the acquisition plan for Bombardier Transportation. Firstly, obviously, transportation rail transportation has as a major player Bombardier as well as Altium. So they cover a whole gamut of products and services. They've got decades of experience and they're a global player too. Bombardier Transportation, they have a footprint in all of the continents. And this Canadian company grew by acquisition a lot. So basically, the center of Grand Fethi is mainly in Germany and the U. K. Now just as well as in Canada. So why then do we wish to make this acquisition? Firstly, 1st and foremost, because we feel that the market is a buoyant market. Green mobility, the ecological transition will push people to use trains in the future more than anything else. And if we can bolster our presence in that industry, it's very good. Also, Bombardier is really a good fit with Alstom. Geographically speaking, because of their origins, Bombardier is very much present in Northern Europe, for example, in the U. K. They had made the acquisition of a long standing player. Germany, they're present in, as I said. We are more present in Western Europe, in France and Spain, in Italy, for example, in LatAm. So a good fit geographical complementarity in Europe. If you look at the Americas, we're present in Mexico, Brazil, Russia and China and India, and they are a good fit with us. And quite naturally then, there is a good fit in terms of products because very often the products are made for a certain geography. And if you look at singletrack people movers like you see in the picture in Bangkok, Bombardier produces such people mover vehicles that we don't. So a very good fit there too. We know that Bombardier faces operational difficulties. And one axis of this acquisition is precisely to restore the Bombardier's margins. And we believe that we can do it because of the structural proximity. We do understand them well. We do understand their challenges and difficulties. And we have positive experience as to the margin recovery, and we do not underestimate the challenge ahead of us, but we think that it is possible really to take up this challenge. Finally, Bombardier fits into our strategy as some in motion through signaling. We should not neglect the fact that Bombardier has a signaling expertise, especially in on key markets, especially in Germany. We are not that present in the German signaling on the ground, and Bombardier has this technology. And for services, Bombardier has a fleet of trains, which is quite large. So the combination of 2 installed bases will allow us to put forward new and more efficient solutions. Altogether, we believe that this acquisition will create value for our shareholders. It's a long term acquisition, a strategic one, strengthening our operating profile. We'll be more competitive. We will provide even more innovative solutions for our customers. The operators will restore the margins and the synergies are assessed at €400,000,000 It will take 4 to 5 years post closing. So it will take some time to get all these synergies. But of course, we do these acquisition in the long term perspective. The impact on our shareholding structure. As you may know, the CDPQ, Maquis de depot de Quebec, has a major portion of the Bombardier Transpo Shareholding, and they bring this portion to Alstom. They will be then the 1st shareholder of Alstom, accounting for about 18%. And Bouygues will be mechanically diluted by the rights issue related to this acquisition, and we will be at about 10%. The acquisition is structured in such a way as to have a very strong balance sheet for us, I mean, rooms for maneuver. So we are in a long term approach. We have to invest in long term projects. We need to have a solid balance sheet, and everything is done to keep this strong balance sheet. Where do we stand in terms of the acquisition itself? We secured the funding. We are discussing with all regulatory authorities worldwide to see and with our competitors, sorry, to see whether there are objections. And this process takes place very well. And we notified Europe on the 11th June and the dialogue with the European Commission is quite fluid. Of course, we have to ask for the opinion of the staff representative, and they said that they were going to express their opinion during the summer of 2020. So this is the time line. The signature of the contract itself of the deal will take place after the intention of this opinion. So it will be during the second half year of twenty twenty. There will be probably a general meeting to approve this deal at the latest end of October 2020. And we confirm our expectation, I think, that the closing of this deal should take place during the first half year of twenty twenty one. This is it. In a few years, this fiscal year, I'm going to give the floor to Laurent Martinez, our CFO, to detail the income statements. Thank you, Henri. So this year, we achieved for 2019, 2020, a turnover of €8,200,000,000 up 2% compared to last year, despite, as Henri said, an impact of approximately €100,000,000 on our turnover in March and it's related to the COVID-nineteen. The adjusted operating income reached €630,000,000 7.7 percent of operating margin and compared to 7.5% in the previous year. This improvement in operating performance was driven by an increase in sales combined with industrial efficiency, greater industrial efficiency. And we are benefiting from the implementation of our strategy Alstom in Motion. Below the adjusted operating margin, the restructuring charges, €18,000,000 in particular in Latin America and in Germany. Also included are additional and nonproductive costs related to COVID-nineteen, €24,000,000 for example, cost linked to the management of the crisis like purchasing sanitizers, masks and so on. €43,000,000 of other expenses include €38,000,000 of mechanical reversal in EBIT of the Casco contribution, which is recognized in our adjusted operating income. On this basis, our EBIT increased by 34% to 6.6% of sales. And our financial result of minus €76,000,000 was mainly due to borrowing costs and the net cost of foreign exchange hedges. Our income tax expense amounted to €118,000,000 That is an effective tax rate of 25% compared to 22% of the previous year. The share of net income from equity affiliates amounted to €102,000,000 comes from our investments in the Russian company, TMH, as well as the Casco signaling joint venture in China. Last year, we had an exceptional contribution of €195,000,000 including €106,000,000 related to the joint venture transaction with GE. And net income from continuing operations after deduction of minority interest amounted to €446,000,000 compared to €433,000,000 in the previous year. So as far as the balance sheet and the liquidity, we generated €206,000,000 of free cash flow compared to €153,000,000 last year. Positive performance in that we have been progressively increasing our share in our main rolling stock contracts. We have strongly credit resources, €2,175,000,000 of available cash and €400,000,000 of €1,000,000 of unused credit lines and an additional credit line, €1750,000,000 obtained in April 2020 in the context of COVID-nineteen. Our shareholder equity amounted to €3,300,000,000 compared to a dividend payment of €1234,000,000 last year. So all in all, Alstom has solid balance sheet credited and confirmed with BAA2 rating by Moody's. Thank you. Thank you, Laurent. We're going to move on to governance. First of all, for Resolutions 56, the renewal of the mandate of Jan Dela Prieres, who is the Lead Independent Director and Chair of the Nominations and Remuneration Committee as well as the appointment of Frank Mastio, who is an independent board member who has just arrived. And I'm going to give the floor to Frank Mastio so that he can introduce himself. Thank you, Henri. Ladies and gentlemen, I was born in Essen in Germany. My name is Frank Macchio. I am 56 years old. I have 4 children. I'm happy to be here with you and to introduce myself to you. After having studied chemistry, I started my professional career in the oil and gas industry. I occupied various positions for several years, among which BP in London. In 2007, I decided to turn to the natural gas and electricity industry. I started with A. ON, and I set up the Renewable Energy business. Then since the 1st October 2012, I have been acting as a CEO at BNW, the largest energy company in Germany, ENBW. I would be very happy to contribute to Alstom if you support my appointment today. Thank you very much for your attention. Thank you, Frank. And we would like to welcome Frank Macchio here and to have him on the board. He's got a long experience in energy in the sustainable development. After this general meeting, the Board will have 10 directors, 70% of independent directors, 40% of women, 3 board members will be having a foreign nationality. Mr. Frank Macio is German. And Lead Independent Director, Thank you, Henri. Ladies and gentlemen, the shareholders, I'm going to show you the activity of the committee, nominations and remunerations and the recommendations. First of all, what are the missions of this nomination and remuneration committee of the Board of Director of Alstom? It's unchanged versus last year. This composition of the Board of Directors and of its committee, the succession plans of the management of the company, common governance and the remuneration of the executive committee members and corporate officers of Alstom. Next slide. In terms of activities, our committee had 2 working groups, governance and remuneration. For governance, first, looking for new Board members. It was done in a very satisfactory way, and it led to the proposal of Frank Mercio. So the review of the composition of the Malaysian bodies and the committee, it was done with an external consultant. The setting up of a system enabling employee directors to be a part of the Board members from next fixed all year, the regular review of the composition of the management bodies. And the 4th bullet point is the review of the government's roadshows led by the shareholders and their representatives to assess the practices of the group and to be assessed by the shareholders. And then the review of the regulatory evolutions in terms of governance and the pact law for the remuneration, as usual. The setting up of the remuneration policy of the corporate officers of the CEO and the Board members, the review of the elements of remuneration related to the past fiscal year, including the new provisions coming from the executive decree of the 27th November 2019, Resolution 7, and then the setting up of a long term plan, pre allocation of performance shares for the employees of the Alastairn Group. Slide 37. The review of the operation and the efficiency of the Board and the committees, a number of action plans decided by the Board with 2 main objectives. First, we want to strengthen the involvement of the Board of Reduction in the policy of corporate social responsibility on 3 major topics: sustainable developments, ethics and compliance of the group with the reorganization of the committees and the reinforcement of or reorganization of the agenda so that the Board is fully involved in the implementation of this policy. The second objective of this action plan further to the assessment carried out on the operation of the Board, the frequency of the executive sessions is well determined now. And we and there are various items to be addressed during the executive sessions. As I said, new directors representing the employees will join us from the next calendar year. And therefore, the committee has examined the process of choice and the appointment modalities of those new provisions. I'm going to comment on the resolutions regarding the remuneration policy, started with Resolution 7. I have already said that this resolution comes from the new decree imposed upon us during this fiscal year, and it will be submitted to your vote. We so the remuneration conditions of the corporate officers, those CEO and the elements comprising the remuneration ratios. As far as we are concerned, we have put that into place on a rather broad basis. We compare the compensation level of the CEO of Alstom with almost all the average and the median level of the employees of Alstom in France. Next is Resolution 8, which we'll be voting on later on. It's the usual resolution put to the vote at Georgia's meetings concerning the remuneration for the Chairman and CEO, Henri Poupart Lafarge in the past financial year, fiscal year 2019 2020. The items of compensation or remuneration in cash, 1st STAR, 3 of them. And then 3 parts rather, there's the fixed compensation stemming from the remuneration policy approved at the last AGM that brought to €850,000 the annual fixed remuneration of Henri Propar Lafarge. And the second component is variable remuneration in respect of the financial year stemming from a policy that's unchanged in terms of setting the principles governing the variable component of his remuneration. Now to determine that remuneration, the principles used are set down in the universal registration document, page 186 on the following pages. It comes out as a proposal of €906,000 and €6,015 for the past financial year. So we use recurring items for previous fiscal years as you see here. And also regarding the share based payment, share based payment performance shares allocated in line with the policy that's remained unchanged for the last several years, coming out subject to conditions to be determined over a 3 year period to be evaluated rather over a 3 year period, coming out at 34,000 Astrum shares if these conditions prevail up to a maximum of 51,000 shares if these performance conditions are actually overshot. So you have then the governing principles set down here. 3 the first three principles are the usual ones we use, the margin, the EBIT margin of the company, the conversion ratio of the income into cash and then the total returns for the shareholders. That's the 3rd main principle used. That is we look at the trend of the stock price and the dividend split. Now that's the total shareholder return. There's a new condition, however, that's been included here this time concerning a main focus of the Astro in Motion plan, as Henri outlined a couple of minutes ago, that is concerning the contribution of the equipment supplied by Alstom to the reduction of energy consumption. And that is important in our plan. And therefore, that's one of the prerequisites too in terms of granting these performance shares to the Chairman and CEO decided upon in this fiscal year that will therefore reflect the success of these policies over a 3 year period. Now the last item that's unchanged in the remuneration policy noncompete undertaking. Well, this didn't come into play in the last fiscal year and supplemental pension scheme that reflects what's granted to all of the senior managers of the ASEAN Group. No particular arrangements, therefore, for the Chairman and CEO. So that sums up what we're asking you to approve in Resolution 8. That is the remuneration for Enrico Parle part in respect of the last fiscal year. So I move on now to Resolution 9, setting down the remuneration policy of the Executive Corporate Office for the coming financial year. Now it's mainly unchanged compared with the policies that were put to you for approval and that were approved in the last few financial years. So I won't detail out the text here. But I'd just like to limit my remarks to one item where there is a change that we're putting to the vote here this afternoon. That is the variable annual remuneration. The amounts and criteria for the granting will be unchanged, but your board would like to have discretionary power to ensure that such remuneration would properly reflect the group's performance. And the maximum scope would be more or less 15%, so that if necessary, it can take account of new unforeseeable conditions that might affect the conditions prevailing in the fiscal year. For example, it will be the case this year with, of course, the impacts not yet totally quantified or quantifiable of the health crisis that we are going through. So apart from that, discretionary power is limited. The other items concerning the remuneration policy remain unchanged. So I move on then to Resolution 10, which is also a new one. This is the remuneration policy of the Board members. The members of our Board of Directors put to the vote at this shareholders' meeting. This policy sees no change compared with what we've had in previous financial years in the Alstom Group, The annual package of 1,300,000 that's the total package, so to speak, available to the company to remunerate the members of the Board of Directors. As presented in the universal registration document. We're far from utilizing this, the package in full. And therefore, the details remain unchanged, as you see here, concerning the remuneration granted to the Board members. So there are fixed amounts for the members of the Board who attend Board meetings and the chairpersons of the 3 Board Committees. And then variable remuneration subject to attendance conditions at meetings of the Board and the Board's committees. That, Ari, sums up the items I wanted to explain to the shareholders this afternoon. Thank you, Jan. We'll now give the floor to Sylvie Rucard, who is our Chairwoman of the Audit Committee. Sylvie Rucard? Thank you, Henri. Good afternoon, ladies and gentlemen, dear shareholders. The Audit Committee was set up in 1998, and I've had the honor of chairing it since the 30th July 2018. So this committee exists so as to assist the board with overseeing issues relating to the preparation and control of finance financial and accounting information. The Audit Committee is in charge of monitoring the process through which financial information is prepared, effectiveness of internal controls and risk management systems and also the statutory auditing of the annual and consolidated accounts by the statutory auditors and the independence of these statutory auditors. The people who attend our meetings, we've got the CFO, the Vice President for Internal Audit and Risk Management, the Vice President for Group Performance, Vice President for Accounting and Statutory and the Statutory Auditors and the General Counsel and the Head of Treasury and Financing may also attend subject to what's on the agenda. We had 4 meetings in the last financial year with 100% attendance. That's the 3 members of the committee were in attendance. 2 members of the committee are independent board members. So 2 out of 3, they're 66%. And this composition would remain unchanged then after this Annual General Meeting. And then regarding the last financial year, what we reviewed was as following was as follows, sorry. Accounting and Finance, we reviewed the half year consolidated accounts as of 30 of September 2019 and the annual consolidation statutory accounts as of 31 March 2020. We review the fiscal policy, the cash management policy of the group, the universal registration document for 20 nineteentwenty 20 fiscal year. In terms of risks, we present we looked at the updated risk map of the group and reviewed the top risks and the mitigation plan set in place and the enterprise risk management deployment plan for this current financial year 2020 2021. Terms of internal audit and internal control, We did a review of the last financial year's audit program and its principal findings monitoring also of the progress of corrective measures with done by our committee. The corrective measures that were the ones that arose from audits that were completed and validated then this current financial year's audit program. And in terms of internal control, we saw a presentation of the detailed results of the last year's program and the action plans that are taken to improve internal controls and risk control, so to eliminate weaknesses and ensure compliance with applicable regulations. And we did a review of the efficiency of the internal control procedures implemented within the group. In terms of work with the statutory auditors, we had a report from the statutory auditors on the half year annual financial statements and observations, recommendations by the statutory auditors on internal control were presented at our meetings. And we reviewed the amount of fees paid out to the statutory auditor firms for 2019 2020 and the verification of the compliance of the emissions carried out with the directives of the statutory auditors' charter was done as well. So that really, in essence, in a nutshell, sums up what our committee was busy doing in the last financial year. Thank you, Sylvie. I'll give the floor now to Sylvie Conde de Beaupre, Chairwoman of the Ethics, Compliance and Sustainable Development Committee. Sylvie Conde de Beaupre. Thank you. Henri? It's an honor for me to chair the Ethics and Compliance and Sustainable Development Committee. I've been doing so since March 2017. Our committee is made up of 2 members, 2 being independent according to the code, AFFECT MEDEV. Our role as described in the internal regulations is to examine and make recommendations to the Board of direction of governance as to the code of ethics and the sustainable development policy. We make sure that the integrity program is well implemented, and we review the human resource environment policy and the stakeholder policy. We held 5 meetings during the fiscal year 2019 2020 with a 93% attendance rate. The detailed report of our committee is on Page 177178 of the universal registration document of the fiscal year. The Legal Counsel and the Manager of Compliance and Sustainable Development and CSR took part in the meetings of our committee. During the last fiscal year, we reviewed the objectives and the performance indicators for ethics and compliance. We monitored the implementation status of the group integrity program, including the update of the code of ethics, the instructions of the group, the training and awareness efforts and the resources of the Ethic and Compliance team, given the responsibility extended to the in view of the addition of competition law to Ethics and compliance department's scope of responsibility. Then we, the committee, is satisfied with the renewal of certification of the group. It shows how the anti corruption system is mature. The committee was kept informed of all proceedings and investigations, past or ongoing investigations. And regarding the procedure initiated in the United Kingdom in 20 10. The committee is glad to see that this investigation is over. The Alstom UK has been declared not guilty in India, Poland and Hungary. It was declared guilty regarding a contract in 2004 in Tunisia and had to pay a fine. Therefore, the proceedings are over. The committee also followed the development of the policy, the objectives and strategy and approach to sustainable development. And we were informed on the group preliminary reflections on the raison d'etre in relation to the French law called pact of the 22nd May 2019, and we will continue that during this fiscal year. The committee reviewed the assessment made by the non financial rating agencies and reviewed the main non financial indicators used by the group as well as the risk mapping, the ethic compliance competition and environmental and social risk mapping. At the end of each meeting, the committee reported to the Board of Directors and shared their comments on the main issues and made proposals to improve the situation. The Board of Directors of the 10th March 2020 decided, based on the results of the assessment of the Board and the committees, to enhance the visibility of ethics and compliance and the topics regarding sustainable development, among which environmental issues. Therefore, on the agenda of the Board of Directors, twice a year, we'll have those items. And then the scope of the Committee of Ethics and Compliance and Sustainable Development will be extended. This committee will focus on ethics and compliance and the management of social issues and human rights and will be renamed Ethics and Compliance Committee. And the sustainable development issues will no longer be within the scope of the committee and will be under the responsibility of the Board of Directors. Ladies and gentlemen, shareholders, thank you for your attention. Thank you very much for this report. I would like to ask our statutory auditors' reports represented by Edouard Demarc from PwC to make their reports. The reports are available in the universal registration document, Page 100 and 1 to 110 for consolidated accounts and Page 205 for related party agreements and commitments and on Page 259,000,000 and 260,000,000 for the consolidated statement for the non financial information statements. And we also have the Page 3435 for the related party agreements, Page 32, 33 for the complementary addition for issues raised with and Page 36 and 41 for reports related to resolutions between 201323. It's rather Mark. Thank you, Chairman. Ladies and gentlemen, shareholders, on behalf of the statutory auditors, MASA and PricewaterhouseCoopers, I propose to report to you on the conclusions of our reports issued in respect of the financial year ended March 31. As it is usual, I will summarize main comments and conclusion of our reports, and these have been made available to you by the company, are included in the universal registration documents or in the notice of this general meeting. Our first report on the ordinary part concerns the financial statements, which is the subject of the first resolution on which you will be asked to vote. For this report on the annual financial statements of Alstom S. A, which are prepared in accordance with French accounting principles, we have considered as a key point of our audit the assessment of the equity investments and related receivables. We have certified these financial statements without qualification or without reservation and have also carried out specific verifications, notably concerning the content of the governance report and no specific comments. With regard to our report on the consolidated financial statements prepared in accordance with IFRS, subject of the 2nd resolution, we have certified statements without any reservation and we considered as a key point of our audit the following items: accounting for turnover and margin on long term contracts and the litigation observation concerning the effects of the first time application of IFRS 16 and IFRIC 23 as well as the application by your company. We have also issued a special report on related party agreements and commitments subject of the 4th resolution. The purpose of this report is to inform you of the essential characteristics and terms and conditions as well as the reasons ifying the interest of the company of the agreements and commitments of which we were notified or which we discovered during our mission. Later agreement of Bouygues S. A. Relating to the acquisition by Alstom of Bombardier Transport. We have performed the necessary procedures. Finally, our last ordinary report on which we will not be called upon to express an opinion is the report of the non extra financial performance statement. No particular comment. The extraordinary part of this meeting, Resolution 13 to 23, you'll have to express your opinion related to the capital, the issue of ordinary shares or various securities with maintenance and or cancellation of preferential subscription rights, but also transaction involving a capital reduction. We have prepared reports in connection with the legations or authorizations to be given to the Board of Directors to carry out these transactions. To summarize the conclusion of all these reports, we have no observations on the terms and conditions of principle proposed to you by your Board of Directors. I have finished, and I thank you, ladies and gentlemen, shareholders, for your attention. Thank you. Thank you. To our statutory auditors, contrary to what we are doing. And because of this closed session, we cannot have a direct exchange with you, and we have not received any written questions. Therefore, I ask the secretary to this assembly to show the results of these resolutions. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Thank you, Chairman. The evolving process was closed yesterday at 3 p. M. The quorum required by law is exceeded because we've got 71.87%. So the resolutions on the agenda were all approved. You can see the outcome on the screen, the approval rate for each of the 27 resolutions put to the vote at this AGM. Thank you, this is Henri Poupart Lafarge. Thank you to our secretary. This brings us to the conclusion of our shareholders meeting, our combined meeting today. I'd like to once again thank heartily all of our shareholders for your confidence. I hope to see you all in a big turnout in a more conventional setting the next time around. And I'd like to thank all of those who've organized this rather extraordinary session in the other sense as well. It is a most particular kind of configuration. Thank you for attending.