Download 24/01/2013 - EXEL Industries

REGISTRATION DOCUMENT
2012
including the Annual Report and
Annual Financial Report
Fiscal year from September 1, 2011
to August 31, 2012
WORLD LEADER
IN PRECISION SPRAYING SOLUTIONS
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Registration Document
Including the Annual Report and Annual Financial Report
Fiscal year from September 1, 2011 to August 31, 2012
In accordance with article 212-13 of the General Regulations of the Autorité des Marchés Financiers (AMF) the original French
language version of this Registration Document was filed with the AMF on December 27, 2012.
It may be used in connection with a financial transaction only if accompanied by a memorandum approved by the AMF. The
original French language version of this document was prepared by the issuer and is binding on its signatories.
In compliance with the provisions of article 28 of European Regulation 809/2004 of April 29, 2004, for selected information the
reader is referred to the previous Registration Documents:
• The consolidated financial statements, separate annual financial statements and corresponding auditors' reports for the period
ended August 31, 2011 contained in the Registration Document filed with the AMF on December 29, 2011;
• The consolidated financial statements, separate annual financial statements and corresponding auditors' reports for the period
ended Tuesday, August 31, 2010 contained in the Registration Document filed with the AMF on Thursday, December 30, 2010.
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Cross-reference table
This cross-reference table refers to key headings for disclosures required by European Regulation No.
809/2004 applied in accordance with Directive 2003/71/EC (the "Prospectus Directive") of the European
Parliament
and
Council
of
November
4,
2003,
prospectuses to be published when securities are offered to the public or admitted to trading.
1. Persons responsible
P. 10
1.1
Name and position of persons responsible for the document
P. 10
1.2
Responsibility statement
P. 10
2. Name and address of the Statutory Auditors
P. 11
3. Selected financial information
p. 33, 42, 43, 44
4. Risk factors
p. 23 to 27, 38, 39, 44 to 47, 86, 87
5. Information about the issuer
5.1
5.2
History and development of the company
p. 15
Legal and commercial name of the company
p. 122 to 127
Place of registration and registration number
p. 122 to 127
Date of incorporation and term
p. 122 to 127
Registered office and legal form
p. 122 to 127
Important events in the development of the company
p. 122 to 127
Investments
p. 30
6. Business overview
p. 17 to 28
6.1
Principal activities
p. 17 to 28
6.2
Principal markets
p. 17 to 28
6.3
Degree of dependence, competitive position
p. 17 to 28
7. Organizational structure
p. 17, 69, 70
8. Property, plants and equipment
p. 28, 29, 30, 38
9. Operating and financial review
p. 33, 42, 43, 44 55 to 101
9.1
Financial position
9.2
Operating results
10. Capital resources
10.1 Information concerning the issuer's capital resources
p. 47 to 50, 56, 58, 76, 90, 96, 97
3
concerning
10.2 Cash flows
p. 59, 60, 75, 85
10.3 Information on borrowing requirements and funding structure
p. 44 to 47, 56, 57, 79, 80, 83, 86, 90, 98, 99
11. Research and development, patents and licenses
p. 33 to 38
12. Trend information
p. 23 to 28, 33
13. Profit forecasts or estimates
p. 33
14.
Administrative, management and supervisory bodies and senior
management
p. 51, 52, 53, 108, 110, 111, 112
15. Remuneration and benefits
p. 10, 51, 52, 82, 83, 85, 118, 119
16.
Board practices
p. 110 to 119
17. Employees
17.1 Number of employees
p. 54, 82, 100
17.2 Stock options
p. 52
17.3 Employee stock ownership
p. 47 to 50
18. Main shareholders
p. 47, 48
19. Related-party transactions
p. 28, 29, 30, 85, 86
20.
p. 30, 33, 42 to 47, 53, 54, 56 to 108
Financial information concerning the issuer's assets and
liabilities, financial position and profits and losses
Historical financial information, financial statements, auditing of
historical annual financial information
Dividend policy
Legal and arbitration proceedings
21. Additional information
21.1 Share capital
p. 47 to 50, 76, 96, 127
21.2 Memorandum of incorporation and bylaws
p. 123 to 127
22. Material contracts
p. 26 to 31, 33, 34, 35, 85, 86, 87, 100,
104 to 106
23. Third party information
N/A
24. Documents on display
p. 11, 12
25. Information on holdings
p. 63, 69 to 73, 93, 94, 95
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Contents
INFORMATION ON THE REGISTRATION
FINANCIAL STATEMENTS
55
Consolidated financial statements
DOCUMENT
9
I - Consolidated balance sheet at August 31, 201256
II - Consolidated income statement at August 31,
Responsibility for the Registration Document
..... 10
Responsibility statement ................................ 10
Auditors .................................................... 11
Responsibility for information ........................ 11
Shareholder information and investor relations .. 11
2012......................................................... 57
III - Consolidated statement of changes in
shareholders' equity
..................................... 58
IV - Consolidated statement of cash flows ........... 59
V - Notes to the consolidated financial statements 61
Statutory Auditors' report on the consolidated
financial statements
PRESENTATION OF THE GROUP
14
..................................... 88
Condensed parent company financial statements
I.- Balance sheet at August 31, 2012 ................ 90
History of the Group
..................................... 15
Organization chart of EXEL Industries Group ..... 17
Business overview of EXEL Industries Group ....... 17
1 - Group businesses and products ................... 17
2 - Market, competition ................................. 23
3 - Customers - suppliers ............................... 26
4 - Production resources ................................ 28
5 - Capital investments ................................. 30
6 - Insurance .............................................. 31
II.- Income statement ..................................... 91
III.- Notes to the separate parent company financial
statements................................................... 92
IV.- Proposed appropriation of net income ....... 101
Statutory Auditors' report on the annual financial
statements................................................. 102
Statutory Auditors' special report on regulated
agreements and commitments ........................ 104
CORPORATE GOVERNANCE
MANAGEMENT DISCUSSION AND ANALYSIS
1 - Annual highlights
32
109
Directors and officers of SA EXEL Industries ..... 110
Audit committee
....................................... 111
Group Management and Strategy Committee ..... 111
.................................. 33
2 - Events after the reporting period and outlook 33
Offices and positions held by each corporate officer of
3 - Research and development ......................... 33
EXEL Industries SA
4 - Sustainable development, industrial and
.................................... 113
........................................... 113
environmental
Auditors' fees
risks
Report of the Chairman of the Board of Directors114
.................................................... 38
5 - Review of operations, consolidated and parent
Statutory Auditors' report on the Chairman's report
company separate financial statements .............. 42
120
6 - Market risks
........................................... 44
7 - Exceptional items and litigation ................. 47
8 - Changes in share capital in the period ........ 47
9 - Appropriation of net income of the period ..... 51
10 -Information on corporate officers................ 51
11 -Change in accounting method ................... 53
12 -Parent company results and five-year financial
summary .................................................... 53
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Information on EXEL Industries' share capital
.. 127
Securities giving access to the share capital ...... 127
Information on pledges ................................ 127
Shareholders' agreement .............................. 127
Dividends ............................................... 127
INFORMATION ON THE COMPANY AND ITS SHARE
CAPITAL
122
Statutory information on EXEL Industries ........ 123
SHAREHOLDER RESOLUTIONS
6
128
Chief Executive Officer's
Message
Dear shareholders,
Fiscal 2011-2012 was a very good year for the EXEL Industries Group, marked by renewed international
expansion, with the acquisition of AGRIFAC in July 2012, and record revenues for the Group topping
€525 million.
We ended the year with growth in excess of 20% in both the agriculture and industry segments, while
international growth stood at 21%. The automotive segment outside Europe and demand in the agricultural
market were positive contributing factors. EXEL ends the 2011-2012 fiscal year with equity representing
half of the total balance sheet and positive net cash of €4.7 million, equating to deleveraging of €17.2
million after acquisitions.
Fiscal 2012-2013 has begun in an atmosphere of financial crisis. EXEL has good visibility over the coming
months, but remains prudent regarding the outlook for growth in revenues for the coming year.
We will continue our international expansion and consolidate our presence in the gardening segment with
the acquisition of HOZELOCK in October 2012.
We have begun 2013 with the same level of determination and pragmatism that marked our approach in
2012, focusing on our three operating priorities.
> Margins. We increased our margins by volume in FY 2011-2012. However, there is real potential for
improvement, particularly in terms of sale prices that better reflect our competitive advantages, the
continued deployment of lean manufacturing at our manufacturing facilities and rigorous project
management in industry,
> Innovation. Our engineering departments continue to build up our portfolio of more than 200 patents.
Our spraying technology innovations offer our customers increased value through improved time-tomarket performances, modular design and reliability for our new products due to pilot testing,
> International development. Our focus on international expansion has resulted in market share gains and
acquisitions, the opening of new subsidiaries in growth markets, the higher professional standards of our
local teams, and the launch of new products specifically adapted to each market.
Our Group's unique profile and strength are based on an organization comprised of independent small
and mid-size companies with the agility to adapt more easily, and proactively take the right decisions.
Furthermore, given the positive underlying trends for our markets, we remain confident about the future.
Contributing to feeding the world, respecting the environment and supporting the industrial development
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of emerging countries: these three challenges are key priorities for EXEL Industries.
Finally, with subsidiaries on five continents, complementary markets, high quality products and the
expertise of our teams, we have a strong foundation for the future.
Founded on the basis of strong human values, EXEL Industries will continue its trajectory of growth
guided by these principles.
With a clear strategy, a long-term vision, an exemplary financial base, and values firmly anchored in a
corporate culture of entrepreneurship, the EXEL Industries Group will pursue its path of sustainable and
profitable growth.
Thank you for your continued support,
Guerric Ballu
Chief Executive Officer of the Group
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INFORMATION
ON THE REGISTRATION
DOCUMENT
Responsibility for the Registration Document
Responsibility statement
Auditors
Responsibility for information
Shareholder information and investor relations
10
10
11
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Responsibility for the Registration Document
Monsieur Guerric Ballu
Chief Executive Officer
Responsibility statement
I declare, after having taken all reasonable measures in this regard that to the best of my knowledge the
information in this Registration Document is accurate and there are no omissions likely to alter its import.
I declare that, to the best of my knowledge:
the financial statements have been prepared in accordance with the applicable financial reporting standards
and give a true and fair view of the assets and liabilities, financial position and results of the company and
all consolidated operations;
and the annual report for the period faithfully presents business trends, the results and financial position of
the company and all consolidated operations and the description of the main risks and uncertainties.
I have obtained a completion of work letter from the Statutory Auditors in which they indicate that they
have verified the information concerning the financial position and accounts presented in this Registration
Document and read the entire Registration Document.
The Statutory Auditors have issued reports on the historical information presented in this Registration
Document.
The Statutory Auditors' report on the annual financial statements includes the following observation: "the
management report does not provide exhaustive information as provided by article L. 225-102-1 of the French Commercial Code (Code
de Commerce) on compensation and benefits paid to each corporate officer during the fiscal year, as well as the commitments incurred
in their favor in connection with the assumption, change, or termination of functions at the time of or subsequent to their a ppointments
as officers.”
I wish to specify that:
We do not include exhaustive detail on this information, considering that such disclosures might constitute
an unwarranted infringement of privacy both with respect to the individuals concerned and the profession,
that is moreover totally silent on this matter;
Total remuneration of management committee members and company officers of EXEL Industries is also
disclosed, thus allowing shareholders to be adequately informed and note that compensation levels remain
reasonable.
Guerric Ballu
CEO
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Auditors
STATUTORY AUDITORS
The financial statements for the 2011-2012 fiscal year were approved by:
> DELOITTE & Associés
- Appointment date: January 19, 2009
- End of term: expiring on the date of the Ordinary General Meeting called to approve the financial
statements for the fiscal period ending in 2014;
> SA Philippe Venet – Grant Thornton
- Appointment date: January 19, 2009
- End of term: expiring on the date of the Ordinary General Meeting called to approve the financial
statements for the fiscal period ending in 2014.
ALTERNATE AUDITORS
B.E.A.S.
- Appointment date: January 19, 2009
- End of term: expiring on the date of the Ordinary General Meeting called to approve the financial
statements for the fiscal period ending in 2014.
> Geneviève VENET-MOREL
- Appointment date: January 19, 2009
- End of term: expiring on the date of the Ordinary General Meeting called to approve the financial
statements for the fiscal period ending in 2014.
Responsibility for information
Responsibility for information
Guerric BALLU
EXEL Industries
54, Rue Marcel Paul - 51200 Épernay
Tel.: + 33 (0)3 26 51 52 55
Shareholder information and investor relations
1. FINANCIAL COMMUNICATIONS
EXEL Industries has a policy of providing extensive information to shareholders, the financial community
and the public through:
> An annual report - Registration Document filed with the French financial market authority, the AMF;
> The publication of financial announcements and press releases;
> Quarterly newsletters;
> Regular meetings with journalists, analysts and investors;
> Visits to our manufacturing sites;
> A website with a section dedicated to financial communications.
In addition, since November 2008, EXEL Industries has been a partner of the FFCI (French Federation of
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Investment Clubs), an independent not-for-profit association serving the community of individual investors.
2. ACCESS TO INFORMATION
Documents are available on request and selected documents can be consulted and downloaded from our
website:
www.exel-industries.com, under the heading "Finance".
For the period of validity of this Registration Document, the articles of association (statuts), Statutory
Auditors' reports and the financial statements for the last three financial periods, as well as all reports,
correspondence and other documents and the historical financial information of EXEL Industries and its
subsidiaries for the last three financial periods and all other documents provided for by law may be
consulted at the issuer's registered office.
3. FY 2011-2012 FINANCIAL PRESS RELEASES
December 14, 2011
First-quarter sales
March 27, 2012
Second-quarter sales
April 18, 2012
First-half results
June 26, 2012
Third-quarter sales
October 09, 2012
Fourth-quarter sales
December 12, 2012
Full-year results
4. 2013 SHAREHOLDERS' DIARY
December 12, 2012
First-quarter sales
January 22, 2013
Annual General Meeting
March 22, 2013
Second-quarter sales
April 16, 2013
First-half results
June 25, 2013
Third-quarter sales
October 01, 2013
Fourth-quarter sales
December 10, 2013
Full-year results
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5. BROKERAGE AND RESEARCH FIRMS COVERING EXEL INDUSTRIES GROUP
> Arkéon Finance,
> Aurel-BGC,
> CM-CIC Securities,
> Crédit Agricole Cheuvreux,
> Gilbert Dupont (Crédit du Nord),
> ID Midcap,
> Oddo Securities,
> Portzamparc.
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PRESENTATION OF THE
GROUP
History of the Group
Organization chart of EXEL Industries Group
Business overview of EXEL Industries Group
1 - Group businesses and products
2 - Market, competition
3 - Customers - suppliers
4 - Production resources
5 - Capital investments
6 - Insurance
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23
26
28
30
31
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History of the Group
In 1946, Vincent Ballu, civil engineer and father of the current Chairman, invented, developed and built
the prototype of the first wine grower “high-clearance tractor” for use in the vineyards of the famous
Champagne producer Moët et Chandon. In 1947, this achievement won its inventor first prize from the
Association Viticole Champenoise and marked the beginning of automation for wine growing in Champagne
and subsequently all narrow vineyards.
> 1952
Creation of TECNOMA a marketing company for the high-clearance tractors.
> 1953
Tecnoma becomes a local dealer for Vermorel spraying equipment.
> 1959
Tecnoma invents the first synthetic resin sprayer.
> 1960
Tecnoma takes over manufacturing of its new sprayers.
> 1966
Acquisition
of
former
market
leader
“VERMOREL”,
“ ULYSSE
FABRE” ,
and “LACHAZETTE” .
> 1967
First export award.
> 1975
Launch of first garden spraying equipment with synthetic resin injection.
> 1980
Death of the company's founder, Vincent Ballu.
Patrick Ballu, graduate of the top French engineering school, Arts et Métiers, and a CPA,
succeeded his father. The company sales reached nearly FFR 80 million (€12.2 million).
> 1986
Modernization of the Epernay plant, roll-out of a new range of agricultural sprayers.
Acquisition of RAM and Caruelle near Orléans, and Nicolas in Agen.
> 1987
Creation of the EXEL Group and acquisition of Berthoud, the French market leader for
agricultural and garden spraying with its subsidiaries Seguip, Thomas and Perras. The
EXEL Group triples in size to become a world leader in spraying equipment for plant
protection.
> 1988
The company is voted "The Most Innovative French Business".
> 1989
Acquisition of VITITRAC and LOISEAU, competitors in the high-clearance tractor segment.
> 1990
Acquisition of Préciculture, the French leader in self-propelled spraying equipment.
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> 1993
Group legal structure simplified around EXEL Industries as the holder of most of the
trademarks and patents.
> 1996
Acquisition of Kremlin, the French market leader in painting equipment. After having
established positions in the agriculture and consumer segments, the EXEL Group expands
into the industrial market.
> 1997
The EXEL Group changes its name to EXEL Industries and is listed on the Second Marché
of the Paris stock exchange.
> 1998
Consolidated sales exceed the FFR1 billion milestone (€150 million).
> 1999
Acquisition of Eurotec (UK).
> 2000
The size of the Préciculture plant is doubled. Acquisition of Fischer and Rexson. EXEL
Industries becomes the world no. 3* for materials protection.
> 2001
Acquisition of Sames, No. 2 worldwide* for electrostatic industrial spraying, and Matrot,
French leader for agricultural self-propelled sprayers.
> 2003
Merger of Kremlin and Rexson.
Acquisition of Herriau (Plant Protection).
> 2006
Acquisition of CMC (Constructions Mécaniques Champenoises), a specialist in highclearance tractors for wine growers.
> 2007
With the acquisition of Moreau, the French leader for sugar beet harvesters, EXEL
Industries becomes a major European player in this market.
> 2007
Acquisition of Hardi, the world's second-largest manufacturer of agricultural sprayers.
Through this acquisition, EXEL Industries consolidates its global leadership in the Plant
Protection business.
> 2009
Acquisition of JOHNSTONE. EXEL Industries strengthens its position in North America in
the Material Protection business.
> 2012
Acquisition of Agrifac, a Dutch company specializing in agricultural spraying and sugar
beet harvesters.
* Company data
16
Organization chart of EXEL Industries Group on Friday, November
30, 2012
Business overview of the EXEL Industries Group
The Group is a pure player provider of high precision spraying solutions for two key market applications:
> Plant Protection, a business subject to seasonal fluctuations linked to weather and natural growing cycles;
> Materials Protection, a business with a limited seasonality profile.
1 - Group businesses and products
1.1 - PLANT PROTECTION
EXEL Industries' historical business is the manufacture of spraying equipment for plant protection for
professional, semi-professional and consumer agricultural applications.
The sprayer makes it possible to deliver just the right amount of product to protect and treat plants as needed.
Sometimes called phytomedication or phytosanitary products, plant health products include herbicides (to
fight against weeds), insecticides (to protect against attack by insects), fungicides (to protect against fungal and
mildew attack), liquid fertilizers, and other products.
Spraying equipment design requires expertise in cutting-edge technologies that are both environmentally
friendly and safe for the operators.
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This equipment must comply with a significant number of demanding safety and environmental standards.
For this reason, new players need to obtain product certification before they can be introduced on the market.
A summary of key regulations and standards in force is provided below:
> European Directive 2006/42/EC (the amended "Machinery Directive" entered in effect on December 29,
2009) setting key European requirements for agricultural equipment manufacturers. For sprayers, this
Directive is based on EN ISO 4254, parts I and VI;
> Amendment to the Machinery Directive (Directive 2009/127/EC adopted by the European Parliament on
April 22, 2009). This amendment that concerns only sprayers, supplements requirements laid down by the
directive on machine safety with a specific section on the "Environment". Beginning on December 15, 2011,
new sprayers marketed in the EU must comply with these new environmental standards;
> Directive 2009/128/EC on the sustainable use of pesticides (adopted by the European Parliament in
January 2009) establishes a framework for Community action with respect to use of plant health products
within Europe, through measures such as user training, obligatory inspection of sprayers, phytosanitary
effluent management, adherence to best practices, etc;
> Obligatory operating safety certification for high-clearance tractors, self-propelled vehicles and trailed
sprayers, both in France and other European countries (a long and costly procedure);
> Decree of September 12, 2006 on the use of phytosanitary products that notably encourages manufacturers
to offer sprayers in France meeting new requirements for tank filling (overflow prevention systems), dilution
of tank bottom residue and reduction of spray drift.
> New French "Water Act", adopted on December 20, 2006, that has imposed a requirement for regular
technical inspections (every 5 years) of all sprayers, mandatory since January 1, 2009;
> The Ecophyto 2018 action plan adopted by the French government to reduce the use of plant health
(phytosanitary) products by half, if possible, and strengthen prevention measures in the area of user safety
and health.
All these requirements impose high precision in applying plant health products and consistent performance
in delivering "the right dose in the right place at the right time". For example, nozzle flow must not vary by
more than 5% from nominal flow, and transversal distribution under the boom must be perfectly uniform
(<7% variance).
Sprayers must consequently be reliable, ready for use at all times and easy to rapidly adjust for each new
application.
1.1.1 - Agriculture
Sprayers are the most frequently used equipment after tractors. They are used nearly eight months out of the
year to perform 4 to 20 treatments depending on the type of crop. The reliability of the spraying equipment
guarantees the quality and yield of the crop and is the decisive factor in the effectiveness of all plant care
products.
The annual cost of the spraying equipment is often less than 5% of the annual plant protection budget for
which it is a key component. We therefore understand the importance of its performance quality in
contributing to controlling optimizing farmers' operating costs.
Faced with the new challenges of globalization and changing agricultural subsidy policies (in particular the
EU's Common Agricultural Policy), it is increasingly important for farmers to effectively identify and manage
mechanization-related costs. The focus on productivity per hectare is gradually shifting in favor of human
productivity.
This new challenge entails:
> simplified crop itineraries (no-till direct seeding, for example);
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> sustainable or integrated farming;
> spraying that is:
• more accurate (GPS connections to adjust quantities according to requirements in the field),
• faster (reducing time required to cover larger farms),
• safer and more reliable (adapting and meeting specified requirements for quantities for improved
efficiency),
• better managed (preprogrammed treatment for more efficient delivery),
• traceability ensured (providing tools if required to demonstrate proper compliance with regulations).
Spraying equipment may be motorized (self-propelled), carried or trailed by a tractor. Self-propelled sprayers
are fitted with a fully equipped cabin for driver comfort which may even be air-conditioned.
High-clearance tractors are particularly well suited to wine-growing and vegetable production.
An agricultural sprayer costs between €2,000 and €150,000 depending on the size, performance and degree
of sophistication. For the most elaborate, functions (unfolding, geometry, height, etc.) may be remotely
controlled from the cabin and even regulated electronically both during the preparation (filling, dosage,
mixing, cleaning, etc.) and crop spraying phases (automatic regulation of the output per hectare), regardless of
changes in operating speed, the actual width of the spraying of the boom, etc.
All these improvements fall within the scope of "sustainable and precision farming" that respects the
nutritional quality of food products, health and the environment, where spraying equipment plays a major
role.
For fertilizers and plant care products different spraying techniques are used. For example:
> Air blast sprayers: droplets are created by pressurization of the liquid (2 to 50 bars);
> Aero-convection or carried jet: droplets generated by the pressure of the liquid are transported by a stream
of air created by a ventilator. It is often used in arboriculture to ensure the droplets reach the depth of the
foliage;
> Pneumatic: this form of spraying is produced by the high air speed (several hundred km per hour)
generated by a centrifugal ventilator which also sprays the liquid arriving at the center of the air jet. This
technique is used in vineyards or crops needing a strong penetration at a highly localized position;
> Centrifugal: the liquid directed without pressure to the center of a disc carried at high speed by an electric
motor, is sprayed on its periphery. The size of the drops is directly related to the speed of the disc which
provides a highly homogeneous spectrum of droplets. This technique is used to apply much more concentrated
products (with ten times less water transported) for example to treat cotton in Africa by using wind drift.
A broad range of spraying equipment is offered by each of the Group’s main brands:
Berthoud, Caruelle,
Evrard, Hardi, Matrot, Nicolas, Seguip, Thomas and Tecnoma, to cover all market requirements.
1.1.2 - In vegetable gardens, greenhouses and market gardens
Backpack and hand-held sprayers can be used for treatment to ensure the quality of fruit and vegetables.
1.1.3- In private parks and domestic gardens
Hand-held spraying equipment (with a trigger or compressed air) enables gardeners to give ornamental plants
all the plant health products they need.
EXEL distributes a complete range of hand-held spraying equipment under its different brand names,
Berthoud, Cooper Pegler, Peras, Tecnoma, as well as distributor brands.
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1.1.4 - Description of Group companies
EXEL Industries has 14 direct subsidiaries: Tecnoma, Berthoud, Caruelle-Nicolas, Hardi, Préciculture, CMC,
Vermorel, EMC, Agrifac, Matrot, Herriau, Capagri, Moreau, and EXEL gsa:
Tecnoma Technologies, based in Epernay in the Marne region, designs, manufactures and markets a wide
range of agricultural spraying equipment under the Tecnoma brand name. In addition, it distributes highclearance tractors for vineyards used for mainly spraying under the Tecnoma, Loiseau and Viti label brand
names.
It also manufactures and distributes components for other companies, and in particular Group companies
(tanks, injection components, etc.).
The company had sales of €51.72 million in the period, up from €43.2 million in the prior financial year.
Berthoud Agricole, located in Belleville-sur-Saône in the Rhone region, designs, manufactures and markets
agricultural spraying equipment for large-scale farming, vineyards, and fruit trees. The Berthoud range
covers all market requirements with over 120 product groups. Berthoud, the leading brand on the French
market, recorded sales of €56 million in the period compared with €41.6 million the previous year.
CARUELLE-NICOLAS, located in Saint-Denis de l’Hôtel
in the Loiret region, designs, manufactures and
markets spraying equipment sold under its four brand names: Caruelle and Seguip (spraying equipment with
booms for large farms) and Nicolas and Thomas (turbine driven sprayers used to treat vineyards and fruit
trees).
It had sales of €17.2 million in the period compared with €15.8 million in the previous year.
The Hardi Group, with its head office in Taastrup in Denmark, designs, manufactures and markets a very
broad range of sprayers for large-scale farming, vineyards, fruit orchards, golf courses, parks and gardens. The
Hardi Group is comprised of 9 companies throughout the world. This includes HARDI-EVRARD AND HARDI
SERVICE in France, as well as eight production sites in Denmark, France, Australia, USA and Spain. This
makes Hardi the leading world brand for agricultural spraying equipment.
The HARDI Group posted sales of €161.8 million in the period, up from €133.6 million in the previous
financial year.
Préciculture, based in Fère-Champenoise in the Marne region, designs and manufactures self-propelled
chassis for the BERTHOUD, CARUELLE, SEGUIP and TECNOMA brands. Each company then installs its own
spraying equipment on the chassis and markets the end product: a self-propelled sprayer.
Préciculture also manufactures high-clearance tractors marketed by CMC and Tecnoma, which equip them
with spraying equipment.
It posted sales of €35.6 million in the period compared with €29.3 million in the previous year.
CMC (Constructions Mécaniques Champenoises), established at Epernay in the Marne department, joined the
EXEL Industries Group in July 2006. It markets a complete range of high-clearance tractors for use in
vineyards.
The company had sales of €1.7 million in the period compared with €2.9 million in the previous year.
Vermorel, based in Ploiesti in Romania, manufactures and markets spraying equipment for the Group.
Its sales during the period totaled €2.7 million, compared with €2 million in the previous year.
EMC, based in Volgograd in Russia, manufactures and markets spraying equipment for the Russian market.
EMC's sales for the period amounted to €6.4 million, up from €4.5 million in the previous year.
20
The Agrifac Group, headquartered in Steenwijk in the Netherlands, was acquired at the end of FY 2012. It
manufactures and markets a wide range of sprayers, sugar beet harvesters, potato harvesters and drainage
cleaners. There are three companies in the group, including the production site in the Netherlands and the
two sales subsidiaries located in the United Kingdom and Russia.
Consolidated in EXEL Industries' financial statements for two months (since 01/07/2012), Agrifac posted
sales of €4.8 million for FY 2011-2012.
Matrot Equipements is the market leader in France in the manufacture of self-propelled agricultural
equipment.
Matrot Equipements, based in Noyers Saint-Martin (60), mainly manufactures two product ranges: selfpropelled beet harvesters and self-propelled sprayers.
It had sales of €31.4 million in the period compared with €19.8 million in the previous year.
Herriau, acquired in January 2003, is based at Noyelles-sur-Escault in France's Nord Pas de Calais region.
It markets self-propelled high-end seeders.
The company posted sales of €1.3 million in the period compared with €1.2 million in the previous year.
Capagri, located in Maizy in the Aisne region, manufactures conveyor belts.
It had sales of €1.3 million in the period compared with €1.4 million in the previous year.
Moreau, also based in Noyelles-sur-Escault in the Nord Pas de Calais region, joined the Group in July 2007.
It is the French leader in self-propelled sugar beet harvesters. It also designs, manufactures and markets beach
cleaners.
Moreau recorded sales of €11.2 million in the period compared with €13.2 million in the previous year.
EXEL gsa is based in Villefranche-sur-Saône in the Rhône region. It designs, assembles and markets backpack
and hand-held spraying equipment for semi-professional users and gardeners, drawing and watering pumps
and a range of fogging equipment. The company also offers alternatives to sprayers for weeding, in the form of
thermal and electric weeders. EXEL gsa's products are distributed through all specialized and traditional
sales networks in France and other countries.
The company has a significant market share in France through its different consumer brands that include
Berthoud, Tecnoma, Peras and Laser.
It had sales of €22.5 million in the period compared with €22.8 million in the previous year.
1.2 - MATERIALS PROTECTION
EXEL Industries provides materials protection through spaying applications in two areas:
> Industrial equipment for the application of paint and viscous products;
> Elimination of dust and odors.
1.2.1 - Industrial equipment for applying paint and viscous products
Manufacturing spraying equipment for paint and other products (varnish, glue, coatings, etc.) requires the
same basic technologies as those used in spraying for plant protection.
EXEL Industries is positioned as a provider of technologies that help customers reduce the quantity of products
used
in
spraying applications. As such, it offers equipment with a particularly high rate of transfer, i.e. the ratio of the
product actually deposited on the item to the total amount used. The cost of products used over a year often
21
amount to 20 times the cost of the spraying application equipment.
Today the Group has two brands in this market with clearly defined positions:
> Kremlin Rexson for liquid and viscous applications;
> Sames for electrostatic applications.
KREMLIN REXSON posted consolidated sales of €89.8 million in the period, up from €74.5 million in the
previous year.
KREMLIN REXSON is the Group brand specialized in the application of liquid products for industrial
finishing. Its pumps and pistols are designed to spray a range of products including paint, varnish and other
coatings.
> KREMLIN REXSON'S spraying equipment significantly improves productivity by reducing paint consumption,
while protecting the environment and the operator's health by reducing paint fume emissions,
> Its wide range of products is intended solely for professional use and covers all customer needs. The main
areas of usage for these spray guns are the wood, metal, plastics and transport industries.
Kremlin REXSON uses a number of different spray-painting techniques:
• "pneumatic" (air speed);
• "airless" (pump pressure);
• "airmix" (combining the two previous techniques).
Each spray gun model is available in manual and automated versions that are able to be mounted on
painting robots.
KREMLIN REXSON is also the Group brand specialized in viscous products for industrial applications (glue,
coatings, paste, etc.). KREMLIN REXSON offers high-yield applications that are often automated. Its products
are mainly used in the automotive, metallurgy and aeronautics industries, etc.
SAMES is the Group brand specialized in equipment and integrated solutions for electrostatic spraying of
paint in liquid or powder form. Based near Grenoble, it is the world No. 2 in this market segment with
international sales accounting for more than three quarters of its sales.
For FY 2011-12, Sames had consolidated sales of €77.2 million, up from €58.2 million in the previous year.
As a highly innovative company and a pioneer of electrostatic spraying techniques, Sames has numerous
patents with 16% of its workforce devoted to R&D.
Its technology involves giving an electrostatic charge to each paint particle making it possible to paint all
sides of components simultaneously.
Its equipment and systems are used by general industry (30% of sales) and by the automotive industry (70% of
sales) in their vehicle painting and varnishing lines.
Using its advanced technologies, Sames has also created new, very powerful, miniaturized electrostatic
generators, capable of removing ultrafine industrial dust before being released into the atmosphere.
Sames' main product ranges are:
> Complete solutions for robot painting lines for the car industry;
> Electrostatic spraying equipment mounted on multi-axis robots;
> Electrostatic powdered paint atomizers;
> Electrostatic liquid paint atomizers;
> Powder coating booths;
> High voltage generators.
Kremlin-Rexson and Sames full range of products are also marketed throughout the world through the
22
Group's many subsidiaries (Europe, North and South America, China, India, Singapore and South Africa).
1.2.2 - Elimination of dust and odors
RAM Environnement, located in Saint-Denis de l'Hôtel in the Loiret region, is a well-known specialist in
dust elimination using the spraying techniques of its RAM (Molecular Action Reduction) equipment.
The RAM process has the ability to capture very fine "alveolar" dust that is invisible and a danger to health
(pneumoconiosis, silicosis, etc.).
RAM's markets cover all industries concerned with extracting, handling and breaking up ore and minerals
(quarries, mines, steel plants, ore terminals, etc.), demolition industries and all food processing industries
(agricultural cooperatives, port terminal grains silos, sugar and starch refineries, etc.).
In addition to dust removal, RAM also specializes in eliminating odors. Its ODO-RAM system, specifically
developed for this purpose, is perfectly suited to a wide range of uses: factory olfactory emissions, waste disposal
centers, water treatment plants, etc.
RAM equips installations throughout the world.
It had sales of €1.5 million in the period compared with €1.8 million in the previous year.
2 - Market, competition
EXEL Industries operate in three markets:
> the agricultural market with large-scale farms, arboriculture and wine growing, etc.;
> industrial markets: all companies are concerned in varying degrees by spraying and the application of
paint, varnish and glue, etc.;
> the consumer market (retail and wholesale) with backpack and hand-held sprayers, water drawing systems,
and thermal and electric weeders for semi-professionals and gardeners.
Its presence in three different markets reduces the Group's overall exposure to cyclical variations and their
seasonal effects.
2.1 - THE AGRICULTURAL MARKET
With its many brands, EXEL Industries is the world leader in the market for agricultural spraying.
The size of the installed base of agricultural spraying equipment is currently going through a phase of
contraction. However, this trend is being offset by a rise in equipment unit prices in response to:
> Increasing sizes of farms through the consolidation of farm units driving demand for larger and higherperformance equipment;
> Increasing treatment speed and precision from the contributions of new technologies;
> Growing mechanization of agriculture to achieve higher productivity and meet today's challenges:
• reduce production costs,
• meet growing demand for agricultural products even though the volume of arable land is relatively stable
worldwide;
> Increasing environmental and safety requirements.
Sales of agricultural sprayers can depend on several factors:
> The price of agricultural products;
> Growth in demand for agricultural products, resulting from an increase in the size, standard of living and
dietary habits of the world's population as well as the rapid development of non-food uses (biofuels,
23
bioplastics, biomaterials, biomedicines, etc.);
> Stagnation in the availability of usable farm land requiring productivity increases to keep pace with
demand;
> Climatic conditions impacting crop quality and abundance;
> The level of agricultural subsidies (Common Agricultural Policy, World Trade Organization negotiations,
etc.);
> Developments in farming production costs (price of energy, fertilizers, pesticides, seeds, etc.);
> The ability of farmers to obtain financing;
> Regulatory developments.
A number of regulatory developments may contribute to a renewal of the installed base of agricultural
spraying equipment:
> New French "Water Act", adopted on December 20, 2006. Since January 1, 2009, this Act has made regular
(every 5 years) technical inspections of all operating sprayers mandatory in France. This should encourage the
renewal or refurbishing of farming spraying machinery in use;
> The amendment of the Machinery Directive (Directive 2009/127/EC) adopted by the European Parliament
on April 22, 2009 and effective on December 15, 2011. This amendment supplements requirements laid
down by the directive on machine safety by a section on the "Environment";
> Decree of September 11, 2006 on the use of phytosanitary products that notably encourages farmers in
France to purchase spraying equipment that meets the new requirements for tank filling (overflow prevention
systems), dilution of tank bottom residue and reduction of spray drift;
> Draft regulation to allow sprayers trailed by a tractor to operate at speeds of up to 40km/h, compared with
25 km/h today;
> The Ecophyto 2018 action plan adopted by the French government to reduce the use of plant health
(phytosanitary) products by half, if possible, and strengthen prevention measures in the area of user safety
and health.
Lastly, significant investments made to modernize agricultural operations in Central and Eastern European
countries provide opportunities for attractive medium term growth potential for the sales of agricultural
sprayers.
For that reason EXEL Industries has established a subsidiary in Russia and a production and marketing site
in Romania.
EXEL Industries' main competitors are:
John Deere (United States) tractor manufacturer which is aiming to build a full line of products;
Jacto (Brazil) for large scale cultivation, vines and trees;
Amazone (Germany) for large scale cultivation;
Kuhn, subsidiary of the Bucher Group (Switzerland) that seeks to develop up a wide range in large scale
farming sector.
However, EXEL Industries is currently the only pure player on a global scale with the ability to cover the full
range of farmers' requirements.
24
2.2 - THE CONSUMER MARKET FOR SPRAYING EQUIPMENT
The world consumer spraying equipment market is valued at in excess of €200 million* and EXEL Industries
Group is positioned as the market leader.
Long-term growth prospects in Europe, with France as one of its main markets, remain positive. This outlook
is supported by several trends:
> Increased leisure and free time contributing to a renewed and healthy interest in nature;
> Increasing longevity and larger number of older people leading to a rise in the number of people engaged in
gardening;
> With balconies and patios, vegetation is becoming fully integrated into the home and new trends are
developing;
> Changes in consumer behavior have led to renewed interest in private vegetable gardens;
> Lastly, we estimate that less than one-third of users are adequately equipped.
With a 60% market share in France (source: Nielsen, 2010) and present in all distribution channels, EXEL
Industries is well-positioned to benefit from these trends. The Group thus operates in a sector where the
installed base for the gardening market has considerable room for continued expansion particularly for
constant pressure and hand-held manual compression sprayers.
The main competitors in this market are:
> Hozelock (UK);
> Matabi (Spain);
> Gloria and Mesto (Germany);
> Selected Italian and Chinese companies.
2.3 - THE INDUSTRIAL MARKET
Through its subsidiaries Kremlin-Rexson and Sames, EXEL Industries is No. 1 in France and No. 3
worldwide* in materials protection.
Trends for the market for industrial sprayers are dependent on:
> Worldwide economic growth;
> The addition of new production capacity in the global market (particularly in emerging countries);
> The need for "clean" solutions to comply with environmental requirements (legislation on emissions of
Volatile Organic Compounds, REACH directive, etc.);
> The need for higher performance sprayers to improve productivity and profitability for users.
A number of major developments concern this last point:
> Increasing "transfer rates" (proportion of paint actually applied to the target) to minimize the loss of sprayed
products;
> Increasing spray flows to paint more quickly and reduce the number of robots used;
> The development of new solutions making it possible to paint inside objects (for example car interiors);
> Reducing time required to change colors in order to increase production output rates.
The main competitors in this market are:
> Graco (USA);
> ITW (USA) - De Vilbiss, Gema and Binks brands;
> Nordson (USA);
> Wagner (Germany);
> Anest Iwata (Japan);
> Dürr (Germany) for electrostatic spraying;
25
> ABB (Switzerland/Sweden) for electrostatic spraying.
3 - Customers - Suppliers
3.1 - THE AGRICULTURAL MARKET
Agricultural spraying equipment is sold ex-works to agricultural machinery retailers sometimes called
dealerships. They demonstrate, sell and set up new spraying equipment and also provide after-sales services,
trade-in and sales of used equipment.
Each Group brand develops its own marketing strategy through its own distribution networks. The rationale
behind this "multi-brand" and "multi-network" policy is based on:
> Geographical market segmentation;
> Brand loyalty among farmers;
> Maintaining the market share historically developed by each Group brand based on specific arguments and
an original marketing mix;
> The need to maintain a large selection of several brands of sprayers with decisive differences to increase
customer loyalty among the many agricultural equipment distributors through an offering providing
differentiation from their competitors.
Each of the Group's main brands therefore has its own network made up of several hundred approved and
trained distributors. The distribution agreements are renewed on an annual basis. The technical and sales staff
of each distributor are required to attend a session lasting several days at one of the Group's approved training
centers.
The end users of EXEL Industries' spraying equipment are farmers. These include cereal farmers, tree growers,
wine growers and market gardeners. Farmers today have a pivotal role in the development of sustainable and
eco-friendly agriculture. As part of this trend, they seek to adopt the most sustainable approach for treatment
with the goal of producing "clean" products. They also ensure the traceability of treatment operations.
Spraying equipment is also used in various exotic or tropical environments such as for cotton production.
3.2 - THE CONSUMER MARKET
Gardens, personal vegetable gardens and market gardens represent a sizable consumer base of users for EXEL
Industries' hand-held spraying equipment. Spraying equipment is sold under several brands and distributed
through specialized mass retailers (DIY superstores, garden centers, agricultural cooperatives, traditional
retailers, online and mail order, etc.), hypermarkets and supermarkets and through distributors of technical
products for industry.
3.3 - THE INDUSTRIAL MARKET
Many industries use EXEL Industries' spaying equipment:
> Transport: cars, trains, ships, aerospace, bikes and motorcycles, trucks, buses, etc.;
> Metallurgy: machine tools, wind turbines, electrical transformers, construction equipment, farm machinery,
structural steel, metal furnishings, maritime containers, kitchen utensils, etc.;
> Plastics: packaging, pleasure boats, household electrical appliances, television sets, computers, cell-phones,
toys, cosmetics, consumer goods, etc.;
> Wood: furniture, joinery, building, musical instruments;
> Glassmaking: fragrance bottles, cosmetics, decoration products, windows, etc.;
> Leather: clothing, footwear, bags, car seats, etc.
26
Our customers include many prestigious companies:
Airbus, Alstom, Areva, Audi,Bang & Olufsen, Bénéteau, Caterpillar, Dacia, Dassault, EDF, Eurocopter, Fagor,
Ford, GM, IKEA, Lafarge, Lamborghini, Louis Vuitton, Mahindra, Mercedes, Philips, PSA Peugeot Citroën,
Renault-Nissan, Rolls-Royce, Safran, Schneider Electrics, Tata, Tefal, Veolia.
No single customer represents a significant share of the Group's consolidated sales.
The Rexson and Sames acquisitions have increased the share of EXEL Industries' sales with car manufacturers
and their subcontractors that today account for approximately 60% of the materials protection market.
For our Group, the automotive industry is a very dynamic customer segment:
> Investing heavily in new factories located in regions where there is strong growth in car demand (emerging
and newly industrialized countries);
> Constantly looking for new sprayer solutions to increase its productivity and profitability.
Distribution
The painting equipment sales often require demonstrations to present the performances and advantages of the
model under consideration. Each sales team, both in France and in the foreign sales subsidiaries, has
technicians with the expertise to conduct these demonstrations and train distributors and large industrial users.
Products are sold ex-works or prepaid under set terms and conditions through "approved distributors" (active
sales including servicing) and "approved resellers" (typical of modern distribution).
In addition, industries that are the largest consumers of paint are prospected and monitored directly by the
Group's sales engineers with specialized expertise..
This sales approach allows the company to maintain direct and continuous contact with large customer-users,
identify issues and priorities in the field and even anticipate future market needs. These factors no doubt
contribute to the successful track record of Kremlin, Rexson and Sames as innovators.
3.4 - SUPPLIERS
No single supplier accounts for a significant share of the Group's consolidated purchases. There is no risk of
dependency on a single supplier.
Whenever several suppliers are able to provide the same product to more than one subsidiary, attempts are
made to achieve standardization and economies of scale at the group level. As a result, one or more
authorized suppliers may be selected for the whole of the Group.
Negotiations are carried out by one or more buyers and contribute to securing favorable sales conditions
(prices, deadlines, quality, etc.).
With regard to the manufacture of agricultural sprayers, the three largest purchase items are:
> Mechanized welding: chassis, ramp arms, etc.;
> Plastics for the manufacture of tanks or bodywork parts;
> Mechanical engineering: engines, cylinders, universal blocks, wheel rims, etc.
Manufacturing sprayers or pumps for the industrial market requires sophisticated and very precise industrial
techniques (tolerance or surface finish of within a few microns) to ensure no leaks under very high spraying
pressures (more than 600 bars).
Raw material risks
Despite the diversified base of suppliers and large range of raw materials used by the Group, certain items
may still be subject to price fluctuations and pressure on supply.
27
For that reason, purchasing departments usually negotiate long-term contracts with major suppliers to ensure
future availability, delivery times and prices over subsequent years.
4 - Plant and machinery
PRODUCTION TECHNIQUES
The main technologies used in the Group's factories are:
> Injection and over-injection of synthetic thermoplastic resin;
> Machining of metals with great precision (machining center for up to 11 axes);
> Rotational molding of tanks and cowling of complex shapes;
> Automatic flow and robot-controlled or semi-automatic welding of complex chassis items;
> Surface preparation and application of paint (automated electrostatic powdering).
PRODUCTION ORGANIZATION
All of the Group's factories are organized as autonomous workshops operating on a just-in-time basis. This
organization contributes to better responsiveness to seasonal fluctuations in activity and more efficient
management of working capital.
Moreover, the Group applies lean management practices in its manufacturing plants. Lean management is a
process that seeks to optimize the organization and operating efficiencies of our companies.
Production sites (worldwide)
Company name
Address
Agrifac Machinery BV
Eesveesenweg 15
Owned by Area in square Of which area
the Group
meters for buildings
No
26,667
12,475 Productio
8332 JA Steenwijk
n
(Netherlands)
API Technologies SAS
Activity
Offices
29 av. Ashton-Under-Lyne
Yes
52000 Chaumont
Same site as
SCM
Same site as Productio
SCM
n
Offices
Berthoud Agricole SAS
1 rue de l'Industrie
Yes
53,419
17,222 Productio
69220 Belleville sur Saöne
n
Offices
9009 rue du Bois Baron
Yes
3,215
Yes
31,000
69220 Belleville sur Saöne
CARUELLE NICOLAS SAS
2 rue de l'Industrie
22,300 Productio
45550 St Denis de l'Hôtel
n
Offices
CMC SAS
1 rue Vincent Ballu
Yes
51200 Epernay
Capagri SAS
Route de Villers
Yes (via
02160 Maizy
SCI)
Same site as
Same site as
Tecnoma
Tecnoma
17,400
Offices
3,000 Productio
n
Offices
28
EXEL gsa SAS
ZI Nord Arnas
69400
Villefranche
Yes
47,124
12,742 Productio
sur
n
Saône
EXEL Industries SA
Offices
54 rue Marcel Paul
Yes
51200 Epernay
Same site as
Tecnoma
Same site as
Group
Tecnoma headquar
ters
Villefranche sur Saône
Yes
22,738
- Reserve of
(69400) and Saint Jean
additiona
d'Ardières (69)
HARDI
l land
INTERNATIONAL Helgeshøj allé 38
A/S
No
-
6,159 Productio
2630 Taastrup (Denmark)
n
Offices
Herthadelvej 10
Yes
155,176
47,062 Productio
4840 Norre alslev (Denmark)
n
Offices
Hardi Australia
Cross Keys Road
Yes
58,776
15,200 Productio
Cavan SA 5094 (Australia)
n
Offices
Hardi US
1500 W 76th Street
Yes
80,937
9,145 Productio
Davenport (USA)
n
Offices
Ilemo Hardi (Spain)
Poligono Industrial "El Segre"
No
13,182
6,007 Productio
25080 Lleida (Spain)
n
Offices
Hardi Evrard SAS
43 rue Cuivre
Yes
13,827
5,182 Productio
77542 Savigny le Temple
n
Offices
Rue du 21 mai 1940
Yes
62,697
16,911 Productio
62990 Beaurainville
n
Offices
Hardi Service SAS
43 rue Cuivre
Yes
77542 Savigny le Temple
Herriau SAS
Rue Pasteur
Yes
59159 Noyelles s/Escaut
Same site as
Same site as Productio
Hardi-
Hardi-
n
Evrard in
Evrard in
Offices
Savigny
Savigny
Same site as
Moreau
Same site as Productio
Moreau
n
Offices
82 rue de Bonavis
Yes (via
59400 Cambrai
73,974
Reserve of
SCI)
additiona
l land
Kremlin Rexson SA
150 av. de Stalingrad
Yes
30,000
14,000 Productio
93240 Stains
n
Offices
29 av. Ashton-Under-Lyne
Yes
29
70,000
22,000
52000 Chaumont
Matrot Equipements SAS
116 rue des Pommiers
Yes
50,000
25,000 Productio
60480 Noyers St Martin
n
Offices
02420 Gouy le Catelet
Moreau SAS
Rue Pasteur
59159 Noyelles s/Escaut
Yes
7,500
Yes (via
40,000
20,000 Productio
SCI)
n
Offices
Préciculture SAS
165 rue des Verriers
Acquisiti
51230 Fère Champenoise
RAM Environnement SAS
2 rue de l'Industrie
n
progress
Offices
Yes
13 chemin de Malacher
9,471 Productio
on in
45550 St Denis de l'Hôtel
Sames Technologies SAS
32,248
Yes
1,600
1,300 Productio
Same site as
Same site as
n
Caruelle
Caruelle
Offices
28,000
10,800 Productio
38240 Meylan
n
Offices
SCM SAS
29, av. Ashton-Under-Lyne
Yes
52000 Chaumont
Tecnoma Technologies SAS
Same site as
Same site as Productio
API
54 rue Marcel Paul
Yes
36,500
API
n
18,500 Productio
51200 Epernay
n
Offices
Note:
- none of the properties belongs directly or indirectly to executive officers of the EXEL Industries
Group or members of their families;
- none of the rented properties belong to executive officers of the EXEL Industries Group.
Distribution sites:
The Group's distribution subsidiaries outside of France are all tenants of their premises, except the
subsidiaries in Spain, the US and Australia, which occupy premises owned by the Group.
5 - Capital investments
5.1 - SUMMARY OF CAPITAL INVESTMENTS 2007 - 2012
(€ millions)
2007
Capital expenditures for property, plant and
equipment and intangible assets
Non-current financial assets
2008
2009
2010
5.7
8.6
9.9
20.3
0.6
40.0
0.0
0.0
2011
2012
11.9
0.0
8.5 (a)
0.1
5.2 - MAIN CAPITAL EXPENDITURES
(a) In the last fiscal year, Group capital expenditures amounted to more than €8.5 million. The main capital
expenditures included:

fit-out of test laboratories at Sames;
30

Purchase of machine tools and industrial fixtures, notably for BERTHOUD Agricole, EXEL gsa,
KREMLIN REXSON, SAMES, TECNOMA, PRÉCICULTURE and Hardi.
These capital expenditures were in large part financed from equity.
6 - Insurance
To provide optimal coverage for risks incurred by the Group, EXEL Industries has had an international
insurance program for property damage and business interruption and civil liability (RC) in place since
September 1, 2008.
The purpose of this program is to ensure that all subsidiaries in France and other countries benefit from
optimal premium rates available at a Group level and to achieve harmonized coverage and deductibles at the
best costs.
In connection with this international program, each of the participating subsidiaries is in turn charged the
corresponding premium amount by our company.
During the current fiscal year we will examine the inclusion of the newly acquired Agrifac Machinery BV
and Hozelock, optimizing the conditions whenever possible.
At the same time, EXEL Industries maintains Group insurance cover in the following areas:
Type of insurance
Main cover
Property damage and business
interruption (International Program)
All risks subject to named exclusions
Civil Liability (International Program) All risks subject to named exclusions
Directors and Officers liability
Coverage for claims of liability against directors and officers
Automobile fleet
Full coverage for vehicle damage < 3.5 t (period < 4 years)
Full coverage for vehicle damage > 3.5 t (period < 7 years)
Employee vehicle coverage
Use of personal vehicles by employees for professional purposes
Individual accident and assistance
insurance
Individual accidents and assistance insurance for employees (in France and other countries)
Professional comprehensive
insurance
(vehicle driving risks)
Coverage for agricultural equipment loaned or made available
Coverage for testing new agricultural equipment
31
MANAGEMENT DISCUSSION
AND ANALYSIS
1 - Annual highlights
2 - Events after the reporting period and outlook
3 - Research and Development
4 - Sustainable development, industrial and environmental risks
5 - Review of operations, consolidated and parent company separate financial statements
6 - Market risks
7 - Exceptional items and litigation
8 - Changes in share capital in the period
9 - Appropriation of net income of the period
10 - Information on corporate officers
11 - Change in accounting method
12 - Parent company results and five-year financial summary
32
33
33
33
38
42
44
47
47
51
51
53
53
1 - Annual highlights
In FY 2011-2012, EXEL Industries' consolidated sales grew 22%: the Materials segment was up 23%, while Plant
Protection gained 22%. EXEL grew international sales by 21%, compared with gains of 24% in the French
market. For EXEL Industries Group as a whole, export sales accounted for 60% of annual sales.
At €33.1 million, current operating income increased by €12.9 million, accounting for 6.3% of sales (vs. 4.7%
in 2010-2011), boosted by a volume effect on margins and good control of fixed costs.
Net income came to €26.1 million, compared with €13.1 million for the previous fiscal year, giving net
earnings per share of €3.85 (vs. €1.93 the previous year).
Shareholders' equity at the end of the fiscal year rose €25.3 million to €212.3 million, representing 50% of
total assets.
WCR improved from 98 days of sales in FY 2011 to 86 days in 2012 against a backdrop of strong business
growth.
Our operations allowed us to reduce net debt by €17.2 million during the fiscal year. Net cash (cash - debt)
amounted to €4.7 million, compared with net debt of €12.5 million in 2010-2011.
2 - Events after the reporting period and outlook
Guerric Ballu, EXEL Industries Group CEO, comments:
"The Group is seeing the benefit of sales coming from our acquisitions of AGRIFAC and HOZELOCK (acquired in
October 2012) in Q1 2012-2013, as we continue to grow sales: up 18% compared with 2011-2012.
The October 2012 acquisition of HOZELOCK is of strategic importance for EXEL Industries and strengthens our
position in the Consumer market. Hozelock will be consolidated in our 2012-2103 financial statements and
provides EXEL Industries with the opportunity to further balance its market portfolio and reduce its exposure to
cyclical variations while contributing to profitable and sustainable growth.
Although sales in the Materials segment are down, they are resilient in Agriculture.
Against the backdrop of the economic crisis with a particularly severe impact on the automotive sector, we
remain cautious regarding the level of sales growth for this year."
3 - Research and development
3.1 - A culture of innovation
Since its creation, EXEL Industries has been a pioneer in developing technologies in its core business of spraying.
Research and innovation have been a key driver of the growth and success of the various EXEL Industries
businesses. This is a worldwide strategic strong point that allows the Group's products to dominate the most
33
difficult markets.
In a particularly competitive market, research and development and an ongoing technology watch have enabled
EXEL Group Industries to remain a leader in the three markets of the spraying business: farming, industry and
the consumer markets.
Each year, at least five new patents are filed in numerous countries. In fiscal 2011-2011, three patents were
filed.
At least 6% of our employees are permanently employed on R&D projects.
Research and development expenditures are recognized as ordinary annual operating expenses and therefore not
capitalized as assets, except on an exceptional basis.
Furthermore, to optimize the management of research and development expenditures, the Group uses the system
for research tax credits available in France.
IN THE PLANT PROTECTION MARKET
• Products for large-scale farms and vineyards
In order to consistently respond in the best possible way to new market expectations, EXEL Industries' research
and development is based on:

greater precision in applying and aiming the drops on the target;

greater safety for the operator;

greater comfort in operation, usage, adjustment through the development of assistance systems;

greater environmental protection;

greater longevity and reliability of equipment.
Some noteworthy examples of innovations include:

Self-propelling booth mounted on hydraulic rails with access from the ground (LASER FC);

4-component electro-pneumatic carried jet system (OPTI-SPRAY);

New variable-width chassis (225 to 320 cm) for use with all crops (WideTrackPlus);

New chassis with clearance ranging from 125 to 200 cm for tall crops (ClearancePlus);

A new exclusive system fully automating the process of opening and closing spraying booms (Press'n'Go).
Innovation Award at the Innovagri 2010 trade fair;

A new application system using air-assisted technology for precision spraying (IRIS). FIMA 2010
Innovation Award;

Automatic driving of the self-propelled sprayer to allow the operator to concentrate solely on the
operating settings. This "automatic pilot" operates when receiving a DGPS or RTK signal and may be
disconnected at any time by the operator;

Automatic management of the ramp height through ultrasound sensors (AutoHeight);

Lift and chain system providing a wide range of spray heights from 0.5m to 3.15m (Twin Lift);

Bi-turbine centrifugal pumps that are easier to clean and more economic in fuel consumption (Omega);

An interlined air jet system for spraying in vineyard rows making it possible to significantly reduce
doses of plant care products (Précijet);

Air-assisted spraying that will enable drift from the sprayed products to be very significantly reduced
(Twin);

"Automotive" drive that allows self-propelled sprayers to be controlled by both hand and foot;

Filling management system which prevents tank overflow and assists the operator to adjust the sprayer
(Novaflow);
34

Filling the sprayer's main tank via an intermediate tank to avoid any risk of contamination (O'Clear);

System that recycles the air in the sprayer's cabin and prevents any air entering from outside during
spraying work for better operator protection (Clinair);

Guiding systems, section management and dose modulation coupled with GPS mapping of the field;

Automatic sequential rinsing system for the whole spraying cycle (Autonet);

Automatic follow-up system for the ramp and system for keeping the chassis of the self-propelled sprayer
horizontal (Stabilis);

Telescopic booms for narrow or wide vineyards;

Sugar beet cleaning system which cuts tare weight by half (Rotonet);

Digital system for controlling the working depth of the leaf stripper and stripper chassis (Positronic 2).
This culture of innovation also contributes to regular launches of new product lines. In 2012 alone launches by
the Group is included:

A new carried spraying system with the option of a tight swivel circle (Twist’Air);

A new range of spraying products that are easy to handle and adjust (OSPRAY);

A new range of trailed sprayers (Lunis);

Renewed range of VITIS tractors;

New self-propelled LASER FC.
With this track record, the Group's products are regularly singled out for their performance, exemplified by
Matrot's world record (122 ha sprayed in one hour) with a standard model Maestria 23-45, or the many
awards received by the Group's products at trade shows.
• The consumer market
Such innovations are based on the creation of original product ranges offering new performance features while
continuing to meet user needs with:

improved ergonomics, comfort and safety;

a visual-based approach for easier use and understanding of functions;

greater robustness and reliability;

a marketing approach using design and color to increase product attractiveness for customers.
EXEL Industries is in this way pursuing its strategy of developing in the upmarket segment as a means of
differentiation with competitors.
• Selected innovations:

Electric thermal shock weeder (Green Power);

Gas thermal sprayer and weeder;

Small hand-held manual compression 1.5 l sprayer, ergonomic and user-friendly (Pulsar). This new
product had received several French awards: the "Trophée d'Or Promojardin 2008' and the "Trophée de
la Maison 2008";

Multi-purpose evacuation pump: it enables, through very easy handling, the sucking up of clean
ground water or sewage and so avoids the necessity of purchasing several traditional pumps (Flowmax
Multi);

Consumer market sprayer for one-off weeding in the form of a "cane", providing unrivaled user comfort
for removing weeds without stooping (Herbastop and Wonderweed);

Sprayers with rechargeable batteries (Libertis);

Electronically regulated watering pumps (Olympia);

Professional sprayer in stainless steel or steel-epoxy for intensive industrial or chemical use or building
35
trades (Laser);

Constant pressure syringe sprayer for home and garden use (Seringa).
THE MATERIALS PROTECTION MARKET
To be able to meet all our customers' needs, there are four key research priorities:

introduction of new products (paints, varnishes, dyes, glues, fillers etc.);

higher transfer rates (the proportion of paint that is actually applied to its target);

improved customer productivity (reducing time for changing colors, increase in spray flows, etc.);

environmental protection through responsible energy use and controlling VOC (Volatile Organic
Compound) emissions.
The paint finishing stage, long the poor relation in the production process, is now often integrated into a
quality process and continues to gain in importance. For a product to sell, it must be visually perfect. This
requires use of high-quality sprayers.
Kremlin-Rexson recently launched new product lines that have met with an enthusiastic response by
customers:
• Spray guns:
New generation ASI GTV spray gun
To meet new customer needs, the spray gun product circuit was redesigned to increase productivity and triple
the effective operation time, compared with older models.
Xcite™ paint spray gun:
Latest generation of Airmix® spray guns, the Xcite provides a further improved finish quality and offers the
possibility of applying up to 86% of paint sprayed onto the part, a record for non-electrostatic sprayers.
M22 HTV spray gun:
Containing high technology features, this new spray gun enables fluid product to be applied to very complex
forms. For example, the vortex effect generates a helicoidal movement of paint particles which then cover parts
at distance or those parts that are difficult to reach. It therefore saves time while guaranteeing a perfect finish.
M22 WBE spray gun:
The M22 WBE is a specialist spray gun for the application of enamels and highly loaded hydro-soluble paints.
Its strengths: very high standard quality of finish and above all exceptional reliability that is 4 times higher
than average as well as very rapid maintenance. This new spray gun is particularly suited to high output rates.
S3 manual spray gun:
Small and light (390 g), it is ideal for precise work in sectors such as wood, metal or plastics-processing.
• Pumps:
New EOS pump range:
The latest generation of KREMLIN REXSON spray pump guns are the first to be offered in phosphor and black
colors, especially designed to be seen even in the darkest work areas. Their innovative design offers high
performance and easy-to-maintain features, requiring a minimum quantity of solvents for a more eco-friendly
product. Finally, they are equipped with a new motor providing optimal control flow and smooth and steady
handling for even better spraying performance.
PU 3000 pump:
Simple and quick to use (Plug & Spray), the PU 3000 has electronic regulation for continuous and precise
control of applications and monitoring of actual product consumption and emissions of VOCs.
PU 2160 F pump:
Ready for using dual-component products simply and economically, it is also particularly well suited to new
36
UV and pre-catalyzed products.
INTENSIVES™ 40.25 and 40.50 WBE pumps:
These pumps provide a reliable and high performance solution to implement the latest generation of
hydrosoluble, high viscosity products, used especially in the wood market.
• Examples of new products launched by Sames:
Accubell 709 EVO:
This new spraying solution for hydro-soluble paints features several innovations: reduced application times per
vehicle, reduced quantities of lost paint during color changes and application, broader application spectrum
(since Accubell 709 EVO can be used to paint both the interior and exterior of vehicle bodies, as well as plastic
parts, such as fenders and wing mirrors), elimination of the need to check the thickness of the layer of paint
applied, and lastly, a guarantee of performance, regardless of the ambient humidity and temperature.
A new PPH 707-EXT atomizer:
The latest generation of electrostatic external charge atomizers, the PPH 707-EXT uses our exclusive new Hi-TE
(High Transfer Efficiency) spraying technology, offering significant savings in paint consumption (with transfer
rates of up to 95%) while retaining high quality finishing capabilities. These features of the PPH 707 EXT
establish its position as an industry benchmark for external charge sprayers.
Inobell sprayer:
Inobell is the first powder paint sprayer in the world to use a rotating bell. This technology, until now, only
used by liquid paint sprayers, provides both better finish quality and greater flow rate. Inobell should therefore
enable Sames to stand out from the competition in the powder paint sprayer market.
Nanobell sprayer:
Nanobell is a very light (3.3kg) electrostatic liquid paint sprayer used by small multiple axis robots that are less
costly than the large robots and are very widely used in a large number of industries. Despite its size, the
Nanobell sprayer uses the latest technological advances to provide very high transfer rates (over 90%) and thus
enables numerous industries to benefit from technology that has, until now, been the reserve of the automobile
sector, at the forefront of paint application.
PPH 707-SB sprayer:
First new generation sprayer equipped with HST (High Speed Turbine). The technology allows fast paint flow
applications (up to 1,000 cc/min), thus increasing productivity. In conjunction with the "Bol/Bol" process, it
makes it possible to achieve a perfect color with one of the highest transfer rates available on the market.
FCR and MCR lines:
These lines offer a "Plug and Spray" concept which Sames intends to extend in future. Customers can order a
complete system under a single reference, unpack it, plug it in and start painting.
EasyCompact powder coating booth:
Through its design (aspiration floor, smooth wall structure, integration of manual work stations, intuitive
command interface, etc.), this automatic dusting cabin meets all industry requirements. It enables gains across
the whole production cycle: saving powder, rapid cleaning, minimization of color changing time, increased
productivity, etc.
GNP 800
High Voltage Generator for capturing ultrafine industrial dust. Three times as powerful but only twice as big as
the GNP 250, the GNP 800 gives customers an even more effective way to meet environmental standards
concerning factory smoke.
37
As part of its dust removal activity, RAM Environnement created:
A system for stabilizing tracks and external stocks to combat wind erosion by controlled precipitation
measurement (RAM-SPC) connected to a meteorological center.
A spraying system that treats odors (ODO-RAM).
An ultra-powerful spraying equipment (TURBO RAM). This equipment is capable of spraying large quantities of
liquid up to a distance of 40 meters. Canon output can vary from several dozens of liters per hour to 10,000
l/h. This makes possible either near-total vaporization (for odor treatment or atmospheric humidification), or
spraying (for dust removal).
A system for dust elimination fitted directly on mechanical excavators used for demolition (RAM-ED). The
spray, controlled directly from the cabin of the excavator, makes the dust heavy, causing it to fall to the ground
instead of remaining in suspension in the air. RAM-ED is already offered as an option on equipment from
Liebherr, and is compatible with most machines from other manufacturers.
Lastly, the latest model, launched in 2008 and developed in partnership with Sames, has a dust removal
system that uses new technology based on the principle of electrostatic capture (Volta-RAM). This new system
ensures optimal results, close to vacuuming, but with much less energy consumption and reduced maintenance.
3.2 - Trademarks and patents
In principle, trademarks, patents and models are registered by EXEL Industries; however for historic reasons and
in exceptional cases, they may remain the property of some of our subsidiaries.
EXEL Industries owns over 204 patents, 237 trademarks and 54 models, protected by EU or international
filings.
As the main holder of the patents, trademarks and models of the Group, EXEL Industries has granted licenses to
its various operating subsidiaries in return for the payment of royalties.
The Group does not recognize patents, trademarks and models under assets, apart from those acquired
individually or as part of the assets originating from company acquisitions.
EXEL Industries has no license granted by a third party and therefore does not pay royalty fees.
4 - Sustainable development, industrial and environmental risks
4.1 - Industrial and environmental risks
None of the Group's activities entail significant industrial or environmental risks that could have an adverse
impact on its assets or results.
All possible precautions are taken for more sensitive activities, such as painting lines or use of solvents for
cleaning paint-application equipment used during marketing demonstrations or after-sales service.
38
Concrete measures are starting to be widely adopted within the Group's companies:

The use of latest-generation painting installations (powder paints, with high dry-extract or dualcomponent) allowing reduction in emissions of volatile organic components;

Replacement in certain of our plants of zinc phosphate used to protect the metallic parts of sprayers
from corrosion by an eco-friendly product (OXSILAN®);

Reduced use of solvents for cleaning soiled paint-application equipment; The cleaning method (with or
without solvent) is now determined on a case-by-case basis;

Selective waste sorting and use of approved treatment channels for optimal recycling;

Improving the energy performance of our sites (notably investments in more energy-efficient boilers);

Reducing travel by staff by investing in new videoconferencing systems for our subsidiaries in France
and abroad.
4.2 - Sustainable development: the environment
EXEL Industries' innovation strategy forms part of a sustainable development policy. All the Group's laboratories
and design departments work in close collaboration with the customers and suppliers within the Group and the
sector, as well as with inter-professional associations. R&D contributes to renewing the range of products and
services while playing a part in reducing manufacturing costs, improving personal and product safety as well as
being more environmentally friendly.
In this way, EXEL Industries, as a responsible corporate citizen, is constantly designing more efficient,
accurate and elaborate spraying equipment, supporting GPS tracking of product sprayed as part of
sustainable, precision farming that respects the environment and the quality of the food we eat.
In addition, the increasing focus on the priorities of user safety and environmental protection acts to
accelerate the replacement of our equipment. Today, increasing attention is paid to protecting the operator
(elimination of the risks of injury or contamination) and the environment (elimination of waste, reducing
wastage, residual products and overspray, pollution and neighborhood disruption). These two objectives are
an integral part of all our specifications from the moment a new machine enters the design phase.
Environmental protection is a core value of EXEL Industries and we are proud to be actors within sectors at
the forefront of this issue, as it is our belief that action and innovation are drivers of change.
As examples, here are some of our latest innovations in this area:
PLANT PROTECTION
An interlined air jet spaying system (Précijet). Used for vines, this new system greatly reduces the amount of
plant health products used (between 20% and 50% reduction in sprayed product, depending on the previous
type of equipment used).
Vine spray calibration system (EasyFlo). It delivers more accurate application and limits the loss of products
into the environment (up to 10% reduction in sprayed plant health products).
ADX nozzles to limit the loss of sprayed products and thus reduce the risk of propagation to surrounding
areas (neighboring fields, watercourses, housing, etc.).
Control by GPS which allows the spray to be automatically cut when passing over the same spot again and
which automatically controls the flow according to the real needs of the plot (as yields vary according to
39
zones, certain parts of a field will have less need of a product than others).
Filling the sprayer's main tank via an intermediate tank to avoid any risk of contamination by splashes or
discharge to the running water system (O'Clear).
System for automatically washing the packaging of concentrated products (Lav'box), the tank (Lav'ton) and the
whole of the agricultural sprayer (Autonet), to prevent most discharge of residual products into the natural
environment. Residue at the bottom of the tanks is thus reduced as much as possible, then diluted up to
1,000 times before being sprayed on the plants to be treated.
Anti-overflow tank filling program controller (Volutis). Given that currently nearly 30% of accidental
pollution is caused by tank overflow, this system is all the more important for environmental protection.
System that recycles the air in the sprayer's cabin and prevents any air entering from outside during spraying
work for better operator protection (Clinair).
MATERIALS PROTECTION
Design of specific sprayers for new environmentally-friendly paints (hydro-soluble, multi-component, high dry
content, powder, etc.).
Electronic systems offering full traceability capability for volatile organic compounds (VOCs).
Increase of transfer rates in order to reduce paint consumption as much as possible. Our latest generation
sprayers offer paint transfer rates of up to 95% (data officially verified by the prestigious German research
institute, the IPA*).
In addition, the Group works in close association with:

FARRE sustainable agricultural
forum (Forum
de
l'Agriculture Raisonnée
et
Respectueuse
de
l'Environnement);

manufacturers of active or consumable materials sprayed with its equipment: plant care products,
paints,
glues
and
varnish, fillers and surfactants;

specialized institutions and research centers;

international standardization organizations (CEN and ISO).
All these factors contribute to the Group's position at the cutting edge of operator and environmental protection.
4.3 - Sustainable development: corporate citizenship and social responsibility
In 20 years, EXEL Industries has developed in large part through external growth while retaining its culture as
a family business and the focus and energy of a small and mid-sized company, a culture actively transmitted
by management to all staff.
A grouping of companies on a human scale
40
EXEL Industries today is itself comprised of a group of dynamic small and mid-sized companies. Each company
has its own culture and retains this human scale which in turn fosters better relations with suppliers,
customers and employees. Accessibility to management facilitated by short reporting lines, contributes to more
efficient information flows and promotes workplace motivation and professional development for the maximum
number of employees.
This decentralized approach that seeks to encourage maximum accountability and promote initiative,
accelerates and facilitates decision-making as close as possible to the field resulting in a more flexible and
responsive organization.
In addition, horizontal and spontaneous coordination of expertise facilitates sharing knowledge and the best
practices between management staff who occupy the same function in different companies.
An organization and corporate culture that encourages dialog between staff and management
The decentralization of authority and the particular culture of family companies also positively contribute to
dialog between staff and management adapted to the organization, actual experiences and decision-making
processes within each company.
The positive working environment and relations between staff and management is reflected by statistics such as
the very low turnover rate, the level of absenteeism and an average seniority of employees of more than 14 years.
A SOCIALLY RESPONSIBLE CORPORATE CITIZEN
EXEL Industries is an open Group that respects its employees and the world around it.
Respecting its employees with safety at work is a key Group priority. Training programs and initiatives to raise
employee awareness about risks are regularly organized for personnel and their safety coordinators.
Respecting the world around it, EXEL Industries is committed to being an equal opportunity employer,
combating discrimination (racial, ethnic, religious, sexual or other) and regularly proposing job opportunities to
disabled workers.
EXEL Industries also seeks to encourage young people to enter the workforce and to assist persons in difficulty to
return to active employment. The Group has undertaken a range of initiatives to this end.
41
5 - Review of operations, consolidated and parent company separate
financial statements
EXEL Industries has continued to exercise two primary activities:
Managing and coordinating its direct subsidiaries, all more than 95%-held;
Management and supervision of its portfolio of patents, trademarks, designs and models for which it grants
operating licenses.
5.1 Consolidated accounts - financial highlights
(€ millions)
8/31/2012
Equity attributable to owners of the parent before appropriation of income
8/31/2011
212.2
186.9
Goodwill
25.3
25.2
Net assets (excluding goodwill)
75.2
72.4
Cash and cash equivalents
54.9
44.8
Borrowings (current and non-current)
50.2
57.3
Provisions for contingencies and expenses (current and non-current)
28.4
24.4
525.3
430.1
33.1
20.2
Non-recurring income/ (expenses)
0.4
0.6
Of which impairment of goodwill
0.0
(0.5)
33.5
20.7
4.0
(4.1)
Net income from consolidated operations
26.1
13.1
Net income attributable to the equity holders of the parent before appropriation
26.1
13.1
Operating cash flows
36.8
20.6
In euros
In euros
Net income per share
3.8
1.9
Cash flow per share
5.4
3.0
Revenue (excluding VAT)
Current operating income (EBIT)
Operating profit
Financial income /(expenses)
5.1.1 - INCOME STATEMENT
Annual consolidated revenue rose +22.1% from €430.1 million to €525.3 million.
Revenue from exports rose +21% from €262.7 million to €317.2 million. International sales accounted for 60%
of total revenue, down slightly from 61% in the previous fiscal year.
Revenue was boosted by a €7 million positive currency effect from exchange rate increases for selected
currencies and notably the US and Australian dollars.
Current operating income (EBIT) rose from €20.2 million to €33.1 million after net depreciation allowances
42
and provisions of €12.7 million, compared with €9.5 million in the prior period.
Statutory and voluntary employee profit sharing expenses, included under payroll, totaled €2.8 million, up
from €2.1 million in the previous fiscal year.
Net non-recurring income and expenses amounted to €0.4 million. This primarily includes bad debts
recovered.
Net financial income amounted to €4 million. This included net borrowing costs of -€1.6 million plus net
foreign exchange gains of €5.5 million.
Profit before tax rose from €16.6 million to €37.5 million.
Tax expense increased from €4 million in the previous period to €12 million.
Net income attributable to equity holders of the parent rose 99.4% to €26.1 million, representing a net margin
of 5%.
5.1.2 - BALANCE SHEET
Equity attributable to the parent increased from €186.9 million to €212.2 million, up €25.3 million and
broken down as follows:
Total income and expenses recognized in the
balance sheet:
Distribution of dividends:
Change in treasury shares
+ €28.5
million
-€3.3 million
+ €0.1
million
Equity represented 49.5% of the total balance sheet, compared with 51.4% at the end of the previous fiscal
year.
Provisions for contingencies and expenses (current and non-current) of €28.4 million were set aside or
maintained to cover risks identified by the company.
Working capital rose €15.2 million from €119.9 million to €135.1 million in response to the following:
+ Change in shareholders' equity:
€25.3
million
+ Change in provisions:
€4.6
million
+ Change in non-current financial liabilities:
- €10.4
million
- Change in non-current assets:
- €4.3
million
Working capital requirements, determined on the basis of net asset values, amounted to €126.4 million at
August 31, 2012, up from €118 million at August 31, 2011.
This €8.4 million increase reflects:
+ An increase in current assets (excluding cash
and cash equivalents):
+ 50.8
million
- A decrease in current liabilities (excluding
provisions & short-term borrowings)
- €42.4
million
43
At August 31, 2012, the net cash balance (cash net of current financial liabilities) totaled €8.7 million, or
cash and cash equivalents of €54.9 million and current borrowings of €46.2 million.
5.2 - Parent company accounts
Parent company financial highlights:
2012
2011
Revenue:
€7,536,000
€5,745,000
Operating profit:
€6,190,000
€4,750,000
Net financial income/(expense):
€14,107,00
0
€6,146,000
Net income:
€14,734,00
0
€7,673,000
Financial income includes primarily dividends paid by subsidiaries and interest income from cash and cash
equivalents.
5.3 - Analysis of trade payables
(see article L441-6-1 and Decree D.441-4 of the French Commercial Code)
Total trade payables
Fiscal 2012 Fiscal 2011
€283,000
€447,000
Nil
Nil
Of which due on 09/30
€283,000
€447,000
Of which due on 10/31
Nil
Nil
Of which past due on 08/31
6 - Market risks
After performing a review of risks that could potentially have a material adverse effect on its business,
financial position or results (or its ability to meet its targets), the Company considers that there are no risks
other than those presented below.
6.1 - Exchange rate and payment risks
Most export sales invoiced in euros are covered by COFACE trade credit insurance or cash payment prior to
delivery.
Sales through foreign retail subsidiaries outside the Euro zone are naturally invoiced in local currencies.
Given the importance of billings in US and Australian dollar markets, the Group has exposure to fluctuating
exchange rates of these currencies. Trade payables in US dollars owed to French companies of the Group are
fully recognized at the closing exchange rate at the end of the financial period.
44
The majority of sales by the Group's foreign subsidiaries to non-Group foreign buyers are in euros. Invoices
issued in foreign currencies by French subsidiaries of the Group are converted into euros at the exchange rate in
force on the date of delivery. Sales and invoices of French subsidiaries of EXEL Industries to their foreign
subsidiaries are in euros. As an exception to this practice, subsidiaries in the US and the UK are invoiced in
their respective local currencies and subsidiaries in China in US dollars.
Since the end of the 2004-2005 financial period, the Group's general policy has been to hedge significant
engineering contracts denominated in a currency other than the euro, mainly in US dollars. In the last fiscal
year, there has been no significant contract of this type denominated in a currency other than in euros.
The Group has recourse to cash flow hedges for a portion of cash flows in US dollars on a case-by-case basis.
At 8/31/2012, trade receivables, cash and cash equivalents and payables of the Group denominated in the
main currencies were as follows:
IN US DOLLARS:
Receivables in
US$14,716,000
- Cash in USD
US$13,426,000 (*)
- Payables in USD
US$12,253,000
- Net receivables in USD
US$15,889,000
Or €12,599,000
(*) Assets in US dollars are not covered by an exchange rate hedge at the end of the financial year.
IN DANISH CROWNS:
- Receivables and cash in DKK
DKK 48,124,000
- Payables in DKK
DKK
187,003,000
- Net receivables in DKK
- DKK
138,879,000
Or - €18,638,000
(**)
(**) Historically, the Danish Crown has fluctuated within a narrow range of 0.20% relative to the euro.
IN POUNDS STERLING:
- Receivables and cash in GBP
£1,614,00
0
- Payables in GBP
£825,000
- Net receivables in GBP
£790,000
Or €993,000
IN AUSTRALIAN DOLLARS:
- Receivables and cash in AUD
AUD
7,903,000
- Payables in AUD
AUD
6,623,000
45
AUD
1,280,000
- Net receivables in AUD
Or
€1,049,000
IN CHINESE YUAN
- Receivables and cash in CNY
CNY
32,107,000
- Payables in CNY
-CNY
21,134,000
- Net receivables in CNY
CNY
10,973,000
Or €1,371,000
€5,130,000
Total net receivables in other currencies:
Net consolidated foreign exchange gains as at August 31, 2012 totaled €5,544,000. Most of this amount
originated from US dollars breaking down as follows:
Gains originating from payment delays: €2,486,000
Gains on revaluation of receivables and payables: €1,288,000
Gains on sales of currencies and fluctuations on currencies in bank: €1,770,000
6.2 - Exposure to interest rate risk
At August 31, 2012, most borrowings and financial debt at variable rate interest were indexed to the 1- or
3-month Euribor, as appropriate, or equivalent rates, notably in Denmark.
At the fiscal year end, total debt and borrowings concerned broke down as follows:
Medium-term variable-rate loans and drawdowns
on secured medium-term credit facilities:
€15,993,00
0
Finance lease liabilities:
€1,214,000
Overdrafts and similar facilities:
€30,689,00
0
Financial assets (money market funds and other short-term investments) bearing interest at a variable rate
amounted to €23,838,000.
A 1% increase in the interest rate would have a negative impact on the Group's pretax profit of €240,000.
6.3 - Exposure to equity risk
EXEL Industries does not hold, directly or indirectly, shares in listed companies or other financial
instruments.
46
The only exception to this are holdings of its own shares in connection with a liquidity agreement with
Natixis.
At August 31, 2012, EXEL Industries held 6, 641 treasury shares, equating to 0.10% of share capital.
6.4 - Exposure to liquidity risk
No loans obtained by EXEL Industries from banks provide for prepayment provisions (covenants).
Furthermore, EXEL Industries has good access to credit in light of the number of confirmed credit lines with
banks negotiated before the current financial crisis.
The Company has performed a specific review of its liquidity risk and considers that it is able to fully honor
all its future payment obligations.
7 - Exceptional items and litigation
To the best of the Company's knowledge, no exceptional items or litigation exist for which provisions have not
been recorded that could have a material adverse effect on its business, financial position or assets and
liabilities.
There are no other legal, judicial or arbitration proceedings (including any that are pending or threatened of
which the company is aware), which may have or have had during the last twelve months, a material effect
on the financial position or profitability of the company and/or Group.
8 - Changes in share capital in the period
8.1 - Analysis of share capital at the end of the financial year
There have been no changes in the share capital in the last five years and the amount of share capital thus
remains unchanged at €16,969,750.
However, for information, in the 2007-2008 financial year, a two-for-one stock split of the EXEL Industries
share was carried out, reducing the par value per share from €5 to €2.50.
OWNERSHIP OF EXEL INDUSTRIES SHARE CAPITAL AND VOTING RIGHTS
At 8/31/2010
Shareholder Number of
s
shares
EXEL SAS
Patrick Ballu
and family
shareholders
4,143,489
1,035,221
% of
capital
61.04%
15.25%
At 8/31/2011
% of
voting
rights
Number of
shares
68.61 %
4,158,367
17.28%
% of
capital
61.26 %
1,018,375
47
15.00%
At 8/31/2012
% of
voting
rights
68.92 %
17.09%
Number of
shares
% of
capital
% of
voting
rights
4,158,367
61.26 %
69.04 %
1,018,880
15.01%
17.09%
EXEL
Industries SA
5,067
0.07%
0.00%
9,083
0.13%
0.00%
6,641
0.10%
0.00%
Financial
institutions,
misc. investors
and public
1,604,123
23.63%
14.11%
1,602,075
23.60%
13.99%
1,604,012
23.63%
13.87%
TOTAL
6,787,900
100.00% 100.00%
6,787,900
100.00%
100.00%
6,787,900
100.00%
100.00%
* EXEL SAS is wholly owned by the family of Patrick Ballu
NUMBER OF VOTING RIGHTS:
At 8/31/2010
11,957,026
At 8/31/2011
11,907,670
At 8/31/2012
11,906,396
DISCLOSURES ON OWNERSHIP THRESHOLDS:
None.
SHAREHOLDERS HOLDING MORE THAN 5% OF THE SHARE CAPITAL AMONG "FINANCIAL INSTITUTIONS,
MISC. INVESTORS AND THE PUBLIC":
La Financière de l'Echiquier and Lazard Frères Gestion.
SHAREHOLDERS HOLDING MORE THAN 2.5% OF THE SHARE CAPITAL AMONG "FINANCIAL
INSTITUTIONS, MISC. INVESTORS AND THE PUBLIC":
None.
NUMBER OF SHAREHOLDERS
(based on the most recent identifiable bearer shares report on 11/20/2012): 1,733 (including 263 registered
shareholders).
No employee stock ownership plan exists.
8.2 - Authorizations to purchase treasury shares
In light of regulations in force, and in accordance with article L225-209 of the French Commercial Code
(Code de Commerce) and Commission Regulation (EC) No 2273/2003 of September 22, 2003, and the
Information Memorandum, the Annual General Meeting of January 24, 2012 granted the Board of Directors
an authorization for a period of 18 months from the date of this Meeting to repurchase shares of the company
in accordance with the following terms and conditions:
These share buybacks may be carried out in accordance with the limits provided for by laws and regulations
applicable at the time of said transactions and in accordance with the purposes and procedures set forth
below.
The maximum number of shares purchased by the company under this authorization may not exceed 10% of
its current share capital.
These shares may be acquired on one or more occasions and through any means for the following purposes:
48
Market-making or share liquidity services provided by an Investment Service Provider through a liquidity
agreement in compliance with the conduct of business rules recognized by the French securities market
regulator, the AMF;
Purchasing shares to be retained for future use for payment or exchange in connection with possible
acquisitions;
The cancellation of all or part of the shares thus acquired;
Employee stock option plans (or other share grants to employees) or for debt securities convertible into shares.
These shares may be acquired, sold or transferred by any means, on or off market, including involving the
use of any derivative financial instruments. The entire share repurchase program may be carried out through
block trades.
The maximum purchase price may not exceed €80 per share, subject to adjustments linked to corporate
actions that may be implemented. In a scenario involving the purchase of 5% of the shares, the maximum
amount paid would be €27 million.
Shares thus purchased may be held, sold or transferred.
In connection with the objective of assuring an orderly market for its shares, the company made use of this
authorization to repurchase shares and on August 31, 2012, held 6,641 of said shares.
On August 31, 2012, EXEL Industries sold and purchased a certain number of its own shares for the purpose
of ensuring the liquidity and an orderly market for its shares:
Number of shares at 8/31/2011
9,083
Number of shares repurchased in the financial year
ended 8/31/2012
30,278
Shares were purchased at an average price of
€33.64
Number of shares sold in the financial year ended
8/31/2012
32,720
Shares were sold at an average price of
€32.93
Number of treasury securities held at 8/31/2012
6,641
Furthermore, an authorization was submitted for approval to the next Annual General Meeting of Tuesday,
January 22, 2013. Once approved by the shareholders, this authorization will cancel and supersede the
authorization granted by the Ordinary General Meeting of January 24, 2012. An Information Memorandum
on this share repurchase program has been made available on the websites of both the AMF and EXEL
Industries.
8.3 - Authorizations to increase the share capital and issue securities
Extraordinary
Preferential
shareholders' Authorizations granted to subscription
meeting
the Board
rights
ESM of
01/24/2012
1. Capital increase (issuance of
shares for cash, capitalization of
reserves or share premium, the
exchange of shares, bonus
With or without
Maximum
nominal
value
€80 million
49
Authorization
Term of
s in force
validity and
Term of the
used in FY exercise of
authorization (1) 2011-2012
securities
26 months
Nil
Nil
share issues, exercise of
warrants)
2. Capital increase through the
issuance of shares or securities
With or without
€80 million
26 months
Nil
Nil
3. Rights issue reserved for
employees
(1) As these authorizations were granted to the Board of Directors for a period of validity of 26 months, a new ESM will be called at
the end of this term to proceed, if necessary, with their renewal.
8.4 - The market for the issuer's shares
Price changes over the past 24 months in the EXEL Industries share, listed in compartment B (mid-caps) of
NYSE-Euronext Paris since June 20, 1997, were as follows:
EXEL INDUSTRIES SHARE PRICE AND TRADING ACTIVITY: (SOURCE: NYSE-EURONEXT)
12/1/2010 to 11/30/2011
Price in euros
Period
Trading volume in
number of shares
Trading volume
in € million
High
Low
Closing price
December 2010
50,326
1.81
39.30
31.60
38.90
January 2011
59,184
2.47
43.50
38.01
40.58
February 2011
25,182
1.01
42.00
38.85
42.00
March 2011
79,682
3.40
45.00
39.50
43.60
April 2011
28,232
1.25
44.75
42.50
42.80
May 2011
15,891
0.67
42.60
41.20
41.44
June 2011
13,481
0.55
41.75
39.70
41.74
July 2011
12,003
0.52
43.50
41.70
42.91
August 2011
11,404
0.46
43.40
39.40
39.40
September 2011
7,461
0.28
40.00
36.00
36.84
October 2011
3,653
0.13
37.50
35.51
37.00
17,580
0.52
36.99
23.50
26.50
324,079
13.07
45.00
23.50
26.50
November 2011
TOTAL
12/1/2011 to 11/30/2012
Price in euros
Period
Trading volume in
number of shares
Trading volume
in € million
High
Low
Closing price
December 2011
10,993
0.31
31.85
26.20
31.85
January 2012
43,942
1.40
32.90
31.00
31.36
February 2012
30,368
1.05
36.00
31.30
35.50
March 2012
22,242
0.81
37.99
34.00
37.38
April 2012
27,346
1.05
41.20
36.00
36.01
May 2012
8,319
0.31
37.75
35.10
35.56
June 2012
47,997
1.59
35.70
30.59
32.50
July 2012
26,698
0.87
33.45
31.91
32.26
August 2012
9,809
0.33
34.99
32.27
33.55
September 2012
2,885
0.10
35.00
33.53
35.00
33,183
1.25
37.90
34.86
37.85
October 2012
50
November 2012
TOTAL
40,169
1.46
37.90
35.52
36.50
303,951
10.53
41.20
26.20
36.50
9 - Appropriation of net income of the period
9.1 - Income appropriation
In light of the consolidated net profit of €26.1 million, we propose that the General Meeting appropriates the
net income of the parent company for the year, of €14,734,134, as follows:
Distribution of a dividend of €6,516,384 or €0.96 per share
(1),
duly noting that the legal reserve is already
fully funded;
Carry forward to retained earnings of the remaining profit of €8,217,750;
Thereby increasing the amount of retained earnings to €105,390,967.
Furthermore, the Ordinary General Meeting approved the allocation of amounts corresponding to dividends
not distributed for EXEL Industries treasury shares held by the company to "Retained Earnings".
(1) This dividend will be payable as of January 25, 2013 directly by CM-CIC Securities.
9.2 - Dividends
FY
Dividend per share
2008/2009
€0.37 per share
2009/2010
€0.64 per share
2010/2011
€0.49 per share
10 - Information on company officers
10.1 - Remuneration and benefits paid in the period to directors and officers of the Group
Total gross remuneration paid in fiscal year 2011-2012 by EXEL Industries to its Chairman, Patrick Ballu,
and its Chief Executive Officer, Guerric Ballu, amounted to €334,850 (excluding social charges). This
remuneration was comprised exclusively of fixed compensation and benefits in kind (car, PC, telephone).
Compensation to members of the Management Committee and company officers totaled €4.2 million
(including social charges) for the fiscal year ended August 31, 2012, compared with €3.75 million for the
previous FY.
This remuneration breaks down as follows:
51
€4.2 million
Short-term benefits
Post-employment benefits
-
Other long-term benefits
-
Severance benefits
-
Share-based payments
-
Total attendance fees of €80,000 voted by the General Meeting for fiscal 2011-2012 were allocated among
the six directors of EXEL Industries. This amount remains unchanged from fiscal 2010-2011.
EXEL Industries has not granted any loans, advances, guarantees or security to directors and officers.
Holding an employment contract with SA EXEL Industries while at the same time serving as a director or
officer is prohibited.
Furthermore, they are not entitled to special retirement severance benefits and stock options reserved for senior
executives or share-based compensation.
10.2 - Stock options and warrants
There are no stock option, stock subscription warrant (BSA) and founder share warrant (BSPCE) plans.
10.3 - Offices and positions exercised by each corporate officer at August 31, 2012
COMPANIES CONCERNED
Patrick Ballu
Guerric Ballu
Marc Ballu
Franck Ballu
Cyril Ballu
Chairman of the Board
of Directors (1)
CEO
Director
Chief Executive
Officer and Director
Deputy Chief
Executive Officer
Deputy Chief
Executive Officer
Director +
Shareholder's Rep. EI
Agrifac Machinery BV
(2)
API Technologies SAS
Chairman's Rep. KR
Berthoud Agricole SAS
Chairman's Rep. EI (2)
(3)
Capagri SAS
CEO
Caruelle Nicolas SAS
Chairman's Rep EI (2)
CMC SAS
Chairman's Rep. EI (2)
EXEL SAS
Chairman
EXEL gsa SAS
Hardi A/S
Chairman
Member of the Board
Kremlin Rexson SA
Director
Deputy Chief
Executive Officer
Deputy Chief
Executive Officer
Chairman's Rep. EI (2)
CEO
Member of the Board
Chairman of the
Board of Directors
RAM Environnement SAS
Chairman's Rep. EI (2)
Sames Technologies SAS
Chairman's Rep. EI (2)
SCM SAS
Chairman's Rep. KR
(3)
52
Deputy Chief
Executive Officer
Deputy Chief
Executive Officer
Tecnoma Technologies SAS
Chairman's Rep EI (2)
Banque CIC Est
Director
EXPOSIMA SA
Director
(1) The other corporate officers, who do not fulfill any function other than as Director of EXEL Industries, are
not included in the table
(2) EI = SA EXEL Industries
(3) KR = SA KREMLIN REXSON
11 - Change in accounting method
There were no changes in accounting methods in the period under review.
12 - Parent company results and five-year financial summary
FY closing date (12 month period)
In euros
8/31/2012
8/31/2011
8/31/2010
8/31/2009
8/31/2008
1. CAPITAL AT YEAR-END
Share capital
16,969,750
16,969,750
16,969,750
16,969,750
16,969,750
6,787,900
6,787,900
6,787,900
6,787,900
6,787,900
7,536,039
5,745,487
5,081,898
5,293,177
6,032,740
18,707,458
6,938,115
19,934,117
18,759,653
17,989,618
3,386,844
(1,540,258)
3,476,123
(2,220,292)
898,477
-
-
-
-
-
586,480
804,892
3,235,636
561,139
(954,546)
14,734,134
7,673,482
13,222,359
20,418,806
18,045,687
-
3,326,071
4,344,256
2,511,523
5,090,925
2.26
1.25
2.42
3.09
Number of shares
- ordinary shares
- preferred shares
Maximum number of potential shares
- by conversion of bonds
- by exercise of subscription rights
II. OPERATING HIGHLIGHTS AND
RESULTS
Sales excluding VAT
Profit before tax, employee profit-sharing,
depreciation, amortization and provisions
Income tax
Employee profit-sharing
Depreciation, amortization and provisions
Net income
Distributed profit
III. EARNINGS PER SHARE
Profit after tax, employee profit-sharing,
before depreciation, amortization and
provisions
53
2.52
Profit after tax, employee profit-sharing
depreciation, amortization and provisions
2.17
1.13
1.95
3.01
2.66
0.49
0.64
0.37
0.75
6
7
7
7
7
Payroll
467,624
533,900
582,123
525,312
474,322
Social charges and benefits paid
(social security, social welfare payments, etc.)
199,186
233,757
239,900
221,688
208,464
Dividend per share
IV. PERSONNEL
Average number of employees
54
FINANCIAL STATEMENTS
Consolidated financial statements
I - Consolidated balance sheet at August 31, 2012
II - Consolidated income statement at August 31, 2012
III – Consolidated statement of changes in shareholders' equity
IV - Consolidated statement of cash flows
V - Notes to the consolidated financial statements
Statutory Auditors' report on the consolidated financial statements
56
57
58
59
61
88
Condensed parent company financial statements
I.- Balance sheet at August 31, 2012
II.- Income statement
III.- Notes to the separate parent company financial statements
IV.- Proposed appropriation of net income
Statutory Auditors' report on the annual financial statements
Statutory Auditors' special report on regulated agreements and commitments
55
90
91
92
101
102
104
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated balance sheet at August 31, 2012
ASSETS
(€ thousands)
Notes
8/31/2012
8/31/2011
Goodwill
3
25,256
25,173
Intangible assets
4
916
701
Property, plant and equipment
5
71,252
68,925
Investments in associates
6
2,659
2,460
Financial assets
7
344
351
Deferred tax assets
22
10,611
9,158
111,038
106,767
NON-CURRENT ASSETS
Total non-current assets
CURRENT ASSETS
Inventories and work-in-progress
8
143,885
117,613
Trade receivables
9
102,471
79,580
334
3,484
Current tax receivables
Other receivables
10
16,262
11,485
Cash and cash equivalents
11
54,893
44,840
Total current assets
317,845
257,001
TOTAL ASSETS
428,883
363,768
EQUITY AND LIABILITIES
(€ thousands)
Notes
8/31/2012
8/31/2011
12
16,970
16,970
169,343
157,178
(223)
(358)
26,111
13,098
212,200
186,887
Equity attributable to non-controlling interests
106
99
Income attributable to non-controlling interests
(1)
2
105
101
212,306
186,988
EQUITY
Capital
Other reserves
Treasury shares
Net income/(loss) for the year
Shareholders' equity attributable to the Group
Total non-controlling interests
Total equity
NON-CURRENT LIABILITIES
56
Non-current provisions
13
26,301
22,886
14 & 15
4,013
14,404
1,475
904
31,789
38,194
13
2,085
1,526
Current portion of long-term debt
14 & 15
15,472
4,259
Current bank facilities and overdrafts
14 & 15
30,689
38,643
53,549
45,381
7,571
892
75,422
47,884
Total current liabilities
184,788
138,586
TOTAL EQUITY AND LIABILITIES
428,883
363,768
Long term financial debt
Deferred tax liabilities
Total non-current liabilities
CURRENT LIABILITIES
Current provisions
Trade payables
Current tax liabilities
Other current liabilities
16
II - Consolidated income statement at August 31, 2012
CONSOLIDATED INCOME STATEMENT
(€ thousands)
Notes
8/31/2012
17
525,287
430,080
1,527
1,535
526,814
431,614
15,102
10,673
(260,034)
(205,196)
Other purchases and external charges
(80,281)
(69,170)
Taxes and duties other than on income
(7,348)
(6,440)
(147,474)
(130,981)
(9,301)
(9,226)
(3,359)
(254)
Other operating expenses
(1,049)
(869)
CURRENT OPERATING INCOME (EBIT)
33,070
20,152
2,097
3,811
(1,656)
(3,238)
442
573
33,512
20,725
9,079
2,744
Revenue
Other operating income
Operating income
Changes in inventories of work-in-process and finished goods
Raw materials and consumables
Staff costs
18
Allowances for depreciation and amortization
Net allowances for provisions and asset impairments
19
Non-recurring income
Non-recurring expenses
Net non-recurring income/(expenses)
20
OPERATING PROFIT
Financial income
57
8/31/2011
Financial expense
Net financial income/(expense)
(5,121)
(6,860)
3,958
(4,116)
37,469
16,609
21
PROFIT BEFORE TAX
Corporate income tax
22
(11,951)
(3,992)
Share in earnings of equity-method associates
6
591
483
26,109
13,100
26,111
13,098
Net income attributable to non-controlling interests
(1)
2
Earnings per share (in €)
3.8
1.9
Diluted earnings per share (in €)
3.8
1.9
NET INCOME FOR THE PERIOD
Net income attributable to the Group
III.- Consolidated statement of changes in shareholders' equity
Statement of recognized income and expense
(€ thousands)
8/31/2012
Net income
26,109
13,100
Net actuarial gains/(losses) on defined benefit plans
(1,323)
679
456
(234)
3,314
(384)
(50)
34
28,506
13,195
28,503
13,193
3
2
Deferred taxes on actuarial gains/(losses)
Changes in currency translation adjustments
Capital gains or losses on the disposal of treasury shares (net of tax)
Total recognized income and expenses
Attributable to shareholders
Attributable to non-controlling interests
8/31/2011
EQUITY ATTRIBUTABLE TO THE GROUP
(€ thousands)
Balance at 8/31/2010
(Reported data)
Capital
16,970
Retained
Share earnings and Translation Treasury
premiums reserves adjustments shares
2,528
Correction of error
Balance at 8/31/2010
(Restated data)
158,793
849
(144)
(808)
16,970
2,528
157,985
849
58
(144)
Total
attributable
to the
Group
Equity
attributable
to noncontrolling
interests
Total
consolidated
equity
178,995
104
179,099
(808)
(4)
(812)
178,187
100
178,287
Impact of change from
correction of error (N-1)
-
-
56
-
Total recognized income
and expenses
-
-
13,578
(384)
Dividends distributed
-
-
(4,341)
-
-
-
56
4
60
13,193
2
13,195
(4,341)
0
(4,340)
Change in Group
structure
0
Other changes
19
(13)
(214)
(208)
(6)
(214)
Balance at 8/31/2011
0
0
16,970
2,528
167,296
451
(358)
186,887
101
186,988
Total recognized income
and expenses
-
-
25,193
3,310
-
28,503
3
28,506
Dividends distributed
-
-
(3,323)
-
-
(3,323)
0
(3,323)
Change in Group
structure
-
-
0
-
-
0
-
0
Other changes
-
-
(24)
23
135
133
2
135
16,970
2,528
189,142
3,784
(223)
212,200
105
212,306
8/31/2012
8/31/2011
Balance at 8/31/2012
IV - Consolidated statement of cash flows
Consolidated data
(€ thousands)
Notes
A. CASH FLOWS FROM OPERATING ACTIVITIES
Net income attributable to the Group
26,111
13,098
(1)
2
- Share in earnings of equity-method associates
(591)
(483)
+ Allowances for depreciation of fixed assets
9,303
9,226
+ Net allowances for provisions and asset impairments (a)
2,197
(1,211)
- Net gains on disposals of fixed assets
(194)
(57)
36,825
20,574
(1,696)
21,200
38,521
(626)
(8,513)
(11,900)
420
320
(4,589)
0
(12,682)
(11,580)
0
0
Attributable to non-controlling interests
Operating cash flows
Change in Working Capital Requirements
23
NET CASH FLOW PROVIDED BY OPERATING ACTIVITIES
(C)
B. CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of fixed assets (b)
Proceeds from the sale of fixed assets
Impact of changes in Group structure
CASH BUDGETED FOR CAPITAL EXPENDITURES
C. CASH FLOWS FROM FINANCING ACTIVITIES
Increase in share capital and premium
59
Net dividends paid in the period
(2,932)
(4,142)
Increase in borrowings
12,747
1,090
(17,180)
(5,943)
59
(161)
(7,306)
(9,156)
(525)
(743)
18,008
(22,104)
6,196
28,300
18,008
(22,104)
24,204
6,196
Marketable securities
23,838
16,477
Cash at banks and on hand
31,055
28,362
- Current bank facilities and overdrafts
(30,689)
(38,643)
NET CASH AND CASH EQUIVALENTS AT CLOSE OF THE
PERIOD
24,203
6,196
Repayment of borrowings
Change in treasury shares
CASH FROM FINANCING ACTIVITIES
D. EFFECT OF FOREIGN EXCHANGE RATES ON CASH
NET CHANGE IN CASH AND CASH EQUIVALENTS (A + B
+ C + D)
Net cash and cash equivalents at beginning of the period
Net change in cash and cash equivalents during the period
NET CASH AND CASH EQUIVALENTS AT CLOSE OF THE
PERIOD
(a) Excluding impairment of current assets
(b) Purchases are net of changes in payables on fixed assets
(c) Of which interest expense paid
2,035
1,655
and of which income tax paid (or refunded)
1,956
8,150
60
V - Notes to the consolidated financial statements
1. Significant accounting policies and basis of consolidation.............................. 61
2.- Basis of consolidation ...........................................
................................................. 69
3.- Goodwill................................................................... ................................................. 71
4.- Intangible assets ...................................................... ................................................. 72
5.- Property, plant and equipment .......................... ................................................. 72
6.- Investments in associates ....................................... ................................................. 73
7.- Non-current financial assets ............................... ................................................. 74
8.- Inventories and work in progress ........................ ................................................. 74
9.- Trade receivables .................................................... ................................................. 74
10.- Other receivables ................................................. ................................................. 75
11.- Cash and cash equivalents ................................ ................................................. 75
12.- Share capital ........................................................ ................................................. 76
13.- Provisions for contingencies and expenses ..... ................................................. 76
14.- Analysis of financial debt by nature.............. ................................................. 79
15.- Repayment schedule of financial debt at August 31, 2012 ........................ 80
16.- Analysis of other current liabilities .............. ................................................. 81
17.- Net sales ................................................................. ................................................. 81
18.- Payroll and workforce ........................................ ................................................. 82
19.- Net allowances for depreciation, amortization and impairment ............... 82
20.- Non-recurring income/(expenses) .................... ................................................. 83
21.- Financial income/(expenses) ............................. ................................................. 83
22.- Corporate income tax .......................................... ................................................. 83
23.- Change in working capital requirements (WCR) ............................................ 85
24.- Related party transactions ................................. ................................................. 85
25.- Off-balance sheet commitments & contingent liabilities ............................. 86
26.- Liquidity risk ....................................................... ................................................. 86
27.- Tax risk.................................................................. ................................................. 87
28.- Exposure to exchange rate risk ......................... ................................................. 87
29.- Events after the reporting period ...................... ................................................. 87
1. Significant accounting policies and basis of consolidation
1.1 STATEMENT OF COMPLIANCE
The financial statements of EXEL Industries Group have been prepared on the basis of International
Financial Reporting Standards (IFRS) as adopted by the European Union at August 31, 2012, and available
for consultation on the European Commission's website:
http://ec.europa. eu/internal_market/accounting/ias/index_en. htm
New standards, interpretations and amendments applicable to the financial period commencing on September 1, 2011
The Group has applied the following new standards, amendments and interpretations as from the beginning
61
of FY 2011/2012:

IAS 24 – Related party disclosures (applicable to periods beginning on or after January 1, 2011);

IFRS annual improvements - May 2010 (applicable to periods beginning on or after January 1, 2011);

Amendments to IFRS 7 - Disclosures: transfers of financial assets; (applicable to periods beginning on or
after July 1, 2011);

Amendments to IFRIC 14 - Prepayments of a minimum funding requirement (applicable to periods
beginning on or after January 1, 2011).
The first time of adoption of these standards, interpretations and amendments did not have a material effect
on the Group's financial statements at August 31, 2012.
Standards and interpretations published but that have not yet entered into force
The following standards and interpretations have been adopted by the European Union at the closing date:

Amendment to IAS 1 – Presentation of other items of comprehensive income (applicable to periods
beginning on or after July 1, 2012);

Amendment to IAS 19 – Employee benefits (applicable to periods beginning on or after January 1,
2013).
The Group has not applied these new standards or interpretations in advance and does not anticipate that
they will have a material impact on its financial statements.
Standards and interpretations not adopted by the European Union at the closing date
Subject to their final adoption by the European Union, application of the standards, amendments and
interpretations published by IASB and presented below are mandatory effective September 1, 2012:

Amendments to IFRS 1 - Severe hyperinflation and removal of fixed dates for first-time adopters
(applicable to periods beginning on or after July 1, 2011);

Amendment to IAS 12 – Recovery of underlying assets (applicable to periods beginning on or after
January 1, 2012).
The Group is currently in the process of assessing the impact of the first-time application of these new
standards and interpretations. They have not been applied in advance.
The consolidated financial statements for the period ending Friday, August 31, 2012 were prepared according
to the same accounting policies used for the period ending Wednesday, August 31, 2011.
The consolidated financial statements of EXEL Industries were approved by the Board of Directors on
December 10, 2012.
1.2 BASIS OF CONSOLIDATION (see note 2)
Companies over which EXEL Industries exercises exclusive control are fully consolidated. Exclusive control is
defined as an ability to govern the financial and operating policy decisions of the enterprise so as to benefit
from its activities. It is generally presumed to exist when the Group has more than 50% of the voting rights of
the controlled company.
Companies in which EXEL Industries exercises a material influence are accounted for using the equity
method. Significant influence is an ability to participate in the financial and operating policy decisions of
an enterprise though without exercising control over its policies. It is presumed to exist when the Group
directly or indirectly holds between 20% and 50% of the voting rights.
Receivables, payables, and reciprocal assets and liabilities are fully eliminated between fully consolidated
companies as well as intra-Group profits and losses (dividends, capital gains, margins on inventory).
62
1.3 BUSINESS COMBINATIONS
Business combinations are recognized on the basis of the acquisition method of accounting, according to the
principles of IFRS 3 - Business Combinations.
The assets, liabilities and contingent liabilities of the acquiree are recognized at fair value.
The difference between the acquisition cost and the proportionate share acquired of the fair value of the
assets and liabilities on the acquisition date is recognized under "Goodwill". This goodwill is not amortized
and is tested for impairment whenever there exist indications of loss, and at least once a year (see below).
If the acquisition cost is less than the fair value of the acquiree's assets and liabilities, the residual amount of
negative goodwill (badwill) is recognized directly in "Non-recurring income/(expenses)".
1.4 GOODWILL (see note 3)
For fully consolidated companies, goodwill arises from the difference between the purchase price of shares
acquired and the Group's share in equity on this date, recognized as assets in the consolidated balance sheet
under the heading of "Goodwill".
At August 31, 2012, the net value of residual goodwill on the balance sheet amounted to €25,256,000.
Goodwill as well as property, plant and equipment and intangible fixed assets are tested as soon as they are
there is evidence of impairment and reviewed at the end of each period. This test is performed at least once a
year for indefinite life fixed assets, which for the Group is limited to goodwill.
For the performance of these tests, fixed assets are grouped into units of reporting referred to as Cash
Generating Units (CGU). CGUs are homogeneous groups of assets that generate cash inflows that are largely
independent of the cash inflows from other assets or groups of assets. For the Group, CGUs are legal entities or
subsidiaries providing the basis for organizing its activities and analyzing its results for internal reporting
purposes.
When the recoverable value of the CGU is less than its net carrying amount, an impairment charge is
recognized in the income statement under "current operating income" and "operating profit". The recoverable
value of a CGU represents the higher of its net selling price and value in use. Value in use is determined on
the basis of the present value of future operating cash flows expected over a five-year period and a terminal
value based on a perpetuity growth rate for cash flow.
The following are the main assumptions used in 2012 to calculate value in use:

perpetuity growth rate of 2%;

A discount rate of 9.3% (the same as in the previous period).
The discount rate used for impairment testing is based on an independent source according to the weighted
average cost of capital (WACC) estimated for the period by financial analysts who cover the EXEL Industries
share, on a date near the fiscal year-end.
Management's budget for future cash flows is based on past performances and developments expected on the
date these forecasts are produced.
On the basis of these assumptions, impairment tests on CGUs including goodwill did not indicate any
impairment loss to be recognized.
For information, with respect to the sensitivity of these assumptions, a one point increase or decrease in the
discount rate or perpetuity growth rate would not result in the recognition of an additional goodwill
impairment charge.
63
1.5 INTANGIBLE ASSETS (see note 4)
Other intangible assets are recognized at cost and amortized on a straight line basis over their estimated
useful lives.
Development costs
In accordance with IAS 38, development costs are not capitalized by the Group for several reasons:

When these expenditures are incurred, the technical feasibility of completing the intangible asset so
that it will be available for use or sale is not certain;

The Group is not able to demonstrate how the intangible asset will generate probable future economic
benefits.
In particular, it is difficult to demonstrate the existence of a market (or evaluate the
duration) for production resulting from these development costs. In effect, the Group is constantly
developing new innovations in its market and the potential of these developments is still unknown or
even nonexistent at that particular time.
These costs mainly comprise payroll expenditure.
1.6 PROPERTY, PLANT AND EQUIPMENT (see note 5)
Property, plant and equipment are recognized in the balance sheet at acquisition cost or their contribution
value.
These assets are depreciated according to the straight line method applied on the basis of their corresponding
estimated useful lives.
Comparable depreciation rates are applied by all companies as follows:
20 to 30 years for buildings;
5 to 10 years for building improvements;
5 to 10 years for industrial equipment and machinery;
3 to 5 years for other fixed assets (office equipment, vehicles, etc.).
1.7 IMPAIRMENT OF ASSETS
The Group performs impairment tests on an annual basis on the main tangible and intangible assets to
identify potential losses if events or circumstances indicate that the carrying amount of these assets may not
be recoverable. When there is an indication that the carrying amount of the fixed assets may not be recovered,
the Group compares the recoverable value of these assets with their net carrying amount and when
applicable, an impairment charge is consequently recorded to reduce the value of the assets to their estimated
recoverable value. Recoverable value is defined as the higher of market value and value in use on the basis
of future cash flows discounted to their present value (discounted cash flows or DCF) derived from use of the
assets. After recognizing this provision, the asset is maintained in the balance sheet at its net carrying amount
after impairment. In the case of depreciable assets, the depreciation expense is calculated on the basis of the
new net carrying amount and its remaining estimated useful life.
1.8 NON-CURRENT FINANCIAL ASSETS (see note 7)
Non-current financial assets include equity interests and other financial assets.
Equity interests represent Group holdings. These interests are accounted for as available-for-sale securities
and recognized at fair value or their acquisition cost, which, according to the Group's estimates, represents
their fair value in the absence of an active market. Unrealized gains and losses on these items are recorded
64
separately under shareholders' equity.
In the case of a permanent loss in value, the corresponding impairment charge is recognized in the income
statement of the period. The permanent nature of impairment is determine by comparing the estimated value
based on the share in net equity, the market price or earnings growth prospects, after adjusting for the effects
of these holdings on the Group in terms of strategy, synergies or existing businesses. Recognition of this
impairment loss in the income statement is not reversible if the estimated value is considered to develop
positively in the future (in which case the unrealized profit is recognized under the separate heading of
equity mentioned above).
Other financial assets are recognized at amortized cost.
A provision for impairment may be recorded when there exists an objective indication that they have been
impaired.
Securities held for trading are recognized at fair value and unrealized gains and losses on re-measurement
are recognized in profit or loss under "income from cash and cash equivalents".
All financial assets are subject to tests once a year to determine if there exists an indication of impairment.
1.9 INVENTORIES AND WORK IN PROGRESS (see note 8)
In accordance with IAS 2 "Inventories", inventories and work in progress are measured at the lower of cost and
net realizable value. Cost is measured mainly according to the FIFO method. Net realizable value is defined as
the expected selling price in the ordinary course of business minus costs necessary for completion and
disposal.
Raw materials and trade goods are as a general rule measured according to the FIFO method.
Inventory in progress and finished products are recognized at production cost that includes the cost of raw
materials, direct labor costs and factory overheads.
1.10 TRADE RECEIVABLES AND RELATED ACCOUNTS (see note 9)
Trade receivables have been measured at face value. Provisions for impairment are recorded according to the
age of the receivable and an assessment of the customer's situation.
1.11 CASH AND CASH EQUIVALENTS (see note 11)
Cash includes bank balances and highly liquid investments and cash equivalents with maturities of less
than three months from their date of acquisition.
Bank overdrafts are presented as a specific line item under current liabilities.
1.12 INCOME TAXES (see note 22)
Deferred taxes
In accordance with IAS 12 "deferred tax", provisions for deferred tax are recorded using the balance sheet
liability method and temporary differences arising between the tax bases of assets and liabilities (including
tax losses) and their carrying amounts in the financial statements. Deferred taxes are calculated at the
prevailing tax rate in force.
Deferred tax assets are recorded only if it is probable that they will be recovered from taxable profit. In
particular, no deferred tax asset has been recognized for losses of certain subsidiaries where recovery is not
currently considered likely.
65
Deferred tax assets and liabilities are not discounted.
The Group offsets deferred tax assets and liabilities if the entity has the legal right to offset current income
tax assets and liabilities and they relate to types of taxes levied by the same tax authority.
French tax group provisions
Under the current tax sharing agreement, with EXEL Industries as head of the tax group, Group subsidiaries
pay advances to EXEL Industries for taxes owed by them and EXEL Industries will settle the Group tax at the
end of the fiscal year after any restatements provided for under this system. Application of these tax sharing
provisions between the parent company and subsidiaries resulted in a tax saving of €352,000 for fiscal 2012
compared with a tax saving of €2,093,000 the previous year.
Tax credits
Given the purely fiscal nature of these provisions, and possibilities that they will be subject to changes in
line with changes in tax regulations, tax credits are recognized as a deduction from the income tax expense.
This is notably the case for research tax credits (RTC).
1.13 FOREIGN CURRENCY TRANSLATION
The annual financial statements of foreign companies are translated using the closing rate method. Under this
method assets and liabilities are translated at the closing rate (balance sheet rate) and income statement items
at the average exchange rate of the period. Translation differences are recorded directly in equity under the
heading "Foreign currency translation reserve".
Transactions by Group entities in a currency other than their functional currency are translated at the
exchange rate prevailing on the transaction date. Assets and liabilities denominated in a currency other than
the functional currency of the entity are translated at the closing exchange rate in force at the end of the
period. Currency gains and losses are recognized directly under financial income and expense.
1.14 LEASES
Finance leases
Assets financed by means of finance leases as defined by IAS 17 "Leases" are presented as assets at the lower of
the present value of future lease payments or fair market value. The corresponding liability is recognized in
financial liabilities. Such items are amortized on a straight line basis over their estimated useful lives.
Only significant transactions are restated (where the purchase value at inception of the item financed by the
lease exceeds €150,000).
The main finance leases have been restated in the consolidated financial statements and no additional
disclosures are required concerning the corresponding future lease payments.
Operating leases
Operating leases that individually involve small amounts are not material in nature. In particular, there are
no significant property leases as the Group is the owner of its main production sites.
1.15 PROVISIONS, CONTINGENT ASSETS AND CONTINGENT LIABILITIES
In accordance with IAS 37, provisions are recognized based on case-by-case assessments of the corresponding
contingencies and expenses. A provision is recorded whenever Group corporate governance bodies are made
aware of a legal or constructive obligation resulting from a past event when it is probable that it will result
in an outflow of resources with no inflow of resources representing an equivalent amount expected in return.
Provisions are broken down between current and non-current liabilities according to the expected term to
66
maturity of the risk. Provisions with a term to maturity of more than one year are discounted when their
impact is material.
In cases where it is not probable that an obligation will result in the outflow of resources to be settled or
because its amount cannot be measured with sufficient reliability, it is recognized by the Group off-balance
sheet as a contingent liability.
Contingent liabilities are reported in the notes unless the probability of an outflow of resources is very low.
Contingent assets are reported in the notes where an inflow of economic benefits is probable.
1.16 PENSIONS AND SIMILAR LIABILITIES (see note 13.3)
Provisions are recorded in the balance sheet for liabilities arising from defined benefit plans. These
liabilities are calculated using the projected unit credit method based on actuarial valuations performed at
the end of the financial year. Actuarial assumptions used to calculate these liabilities vary according to the
economic conditions of the country in which the plan applies. Each plan is accounted for separately.
The Group makes use of these services of an outside entity to partially cover its benefit liabilities. The
provision recorded in the consolidated financial statements corresponds solely to the uncovered portion as
well as social charges for the full amount of these benefit liabilities.
For defined benefit plans financed through outside fund managers (pension funds or insurance policies), any
difference in the fair value of plan assets and the present value of obligations is recognized in the balance
sheet as an asset or liability. However, such differences are only recognized as assets when they embody a
future economic benefit for the Group.
Past service costs represent the benefits granted when the company either adopts a new defined benefit plan or
modifies the level of benefits of the existing plan. When new rights to benefits are vested as of the adoption of
the new plan or the change of the existing plan, past service costs are immediately recognized in the income
statement. Conversely, when the adoption of a new plan or a change in the existing plan results in the vesting
of rights subsequent to the date the plan is established, past service costs are expensed on a straight-line basis
over the average remaining period for the corresponding rights to be fully vested.
Actuarial gains and losses result from changes in actuarial assumptions and adjustments related to experience
(differences between actuarial assumptions and assumptions based on actual experience). Actuarial gains and
losses are recognized directly in equity and in consequence have no impact on the income statement.
For defined benefit plans, the expenses recognized in operating income includes service costs, the amortization
of past service costs, the discounting costs as well as the effects of any plan curtailment or settlement.
1.17 USE OF ESTIMATES
To prepare consolidated financial statements in compliance with the rules provided for under IFRS, Group
Management makes a certain number of estimates and adopts certain assumptions that may have an impact
on the amounts disclosed under assets and liabilities. These include amounts for depreciation, amortization
and provisions, information on contingent assets and liabilities on the closing date of the consolidated
financial statements and amounts recognized under income and expenses for the period. These estimates are
based on the assumption of going concern and include assumptions that Management considers relevant and
feasible in the Group's operating environment and based on feedback available.
Estimates and assumptions are reviewed on a regular basis and at a minimum at the end of each financial
year. They may vary if the circumstances on which they were based change or new information becomes
available. Actual results may differ from these estimates.
67
The main estimates made by the Group when preparing the financial statements concern notably assumptions
adopted for calculating deferred taxes, the valuation of tangible and intangible assets, equity interest, the
depreciation of current assets and current and non-current provisions.
Forecasting and producing medium-term plans is rendered difficult by the current economic environment.
The consolidated financial statements for the period were prepared taking into account the current economic
and financial crises and on the basis of financial parameters for the market available at the end of the
financial year.
The immediate effects of the crisis were taken into account in particular in the valuation of assets such as
inventories, trade receivables and liabilities.
With respect to longer-term assets such as goodwill, the assumption adopted is that the crisis' duration will be
limited in time. The value of these assets is reassessed at the end of the financial period and whenever there
exists an indication of impairment based on the long-term economic outlook and Group Management's best
assessment in an environment of reduced visibility with respect to future cash flows.
1.18 SEGMENT REPORTING
Even though it manufactures products for three principal markets segments, namely agriculture, gardening
and industry, EXEL Industries Group remains a pure player operating in a single core business: spraying
technologies.
1.19 FINANCIAL INSTRUMENTS
Treasury shares
In accordance with IAS 32, treasury shares (own equity instruments) held by the Group through the share
repurchase program in connection with the liquidity agreement are recorded at acquisition cost and deducted
from equity. Proceeds from the disposal of treasury shares are recognized under equity, net of income tax, and
are not included under income in the period.
Derivative financial instruments
In the fiscal year, the Group has on occasion made use of interest rate or foreign exchange hedges to reduce its
exposures.
At the end of the fiscal year, a position remained open for only one financial instrument:
A fixed-to-variable interest rate swap on a nominal €2.65 million bank loan.
At August 31, 2012, the position of this financial instrument was valued at -€73,000.
Financial liabilities
Non-current loans and financial liabilities are valued at their historical nominal value considered close to
their amortized cost.
1.20 REVENUE
Revenue arising from ordinary activities represents sales from goods and services produced in connection with
the Group's main activities.
In accordance with IAS 18, revenue is recognized according to the accrual basis of accounting and matching
principle for income and expenses.
Income from the sale of goods is recognized when the risks and rewards incident to ownership are transferred
to the buyer and the costs that have been or are to be incurred can be reliably identified.
68
Any trade discounts rebates and related items granted to customers are recognized as amounts deducted from
of sales.
Revenue from the sale of services is recognized at fair value of the consideration received or receivable.
Revenue from the sale of products is recognized when delivery has been completed, the amount of revenue
can be reliably measured and the economic benefits of the transaction will flow to the Group.
2.- Basis of consolidation
Percentage controlled
Name
08/2012
EXEL Industries SA
100.00%
Tecnoma Technologies SAS
Consolidation
method
08/2012
08/2011
100.00%
100.00%
100.00%
Parent
company
100.00%
100.00%
100.00%
100.00%
FC
Préciculture SAS
100.00%
100.00%
100.00%
100.00%
FC
CMC SAS
100.00%
100.00%
100.00%
100.00%
FC
Caruelle Nicolas SAS
100.00%
100.00%
100.00%
100.00%
FC
RAM Environnement SAS
100.00%
100.00%
100.00%
100.00%
FC
Berthoud Agricole SAS
100.00%
100.00%
100.00%
100.00%
FC
FISCHER Nouvelle SARL (Switzerland)
BERTHOUD Sprayers Ltd (UK)
MATROT Equipements SAS:
Matrot UK Ltd (UK)
08/2011
Percentage held
100.00%
100.00%
100.00%
99.00%
99.00%
99.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.0
0%
99.00
%
100.00%
100.00
%
FC
FC
FC
FC
Herriau SAS
100.00%
100.00%
100.00%
100.00%
FC
Moreau
100.00%
100.00%
100.00%
100.00%
FC
SCI Cathan
Capagri
SCI Maizy
Vermorel (Romania)
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00
%
100.00%
100.00
%
FC
FC
FC
100.00%
100.00%
100.00%
100.00%
FC
90.00%
90.00%
90.00%
90.00%
FC
EXEL GSA SAS
100.00%
100.00%
100.00%
100.00%
FC
EXEL Real Estate (USA)
100.00%
100.00%
100.00%
100.00%
FC
EXEL Real Estate (Australia)
100.00%
100.00%
100.00%
100.00%
FC
EMC LLC (Russia)
100.00%
100.00%
100.00%
100.00%
FC
Kremlin Rexson SA
99.48%
99.48%
99.48%
99.48%
FC
Ingelia (Romania)
French subsidiaries:
69
Percentage controlled
Name
08/2012
SCM SAS
100.00%
API Technologies SAS
08/2011
Percentage held
Consolidation
method
08/2012
08/2011
100.00%
99.48%
99.48%
FC
100.00%
100.00%
99.48%
99.48%
FC
100.00%
100.00%
99.48%
99.48%
FC
99.90%
99.90%
99.38%
99.38%
FC
KREMLIN REXSON Italy
100.00%
100.00%
99.48%
99.48%
FC
EXEL North America (USA)
100.00%
100.00%
99.48%
99.48%
FC
Portugal
100.00%
100.00%
99.48%
99.48%
FC
Argentina
100.00%
100.00%
99.48%
99.48%
FC
Poland
100.00%
100.00%
99.48%
99.48%
FC
Brazil
100.00%
100.00%
99.48%
99.48%
FC
100.00%
74.00%
99.48%
73.62%
FC
Mexico
100.00%
100.00%
99.48%
99.48%
FC
India
100.00%
100.00%
99.48%
99.48%
FC
Singapore
100.00%
100.00%
99.48%
99.48%
FC
100.00%
100.00%
100.00%
100.00%
FC
NC
100.00%
NC
100.00%
FC
UK
100.00%
100.00%
100.00%
100.00%
FC
China
100.00%
100.00%
100.00%
100.00%
FC
Russia
100.00%
100.00%
100.00%
100.00%
FC
100.00%
100.00%
100.00%
100.00%
FC
Hardi North America Inc. (USA)
100.00%
100.00%
100.00%
100.00%
FC
Hardi Australia Pty (Australia)
100.00%
100.00%
100.00%
100.00%
FC
Ilemo-Hardi S.A. (Spain)
100.00%
100.00%
100.00%
100.00%
FC
Hardi GmbH (Germany)
100.00%
100.00%
100.00%
100.00%
FC
Svenska Hardi AB (Sweden)
100.00%
100.00%
100.00%
100.00%
FC
Hardi Norge A/S (Norway)
100.00%
100.00%
100.00%
100.00%
FC
Hardi Ltd (UK)
100.00%
100.00%
100.00%
100.00%
FC
Hardi Evrard SA
100.00%
100.00%
100.00%
100.00%
FC
Hardi Service
100.00%
100.00%
100.00%
100.00%
FC
47.32%
47.32%
47.32%
47.32%
EA
100.00%
NA
100.00%
NA
FC
100.00%
NA
100.00%
NA
FC
Foreign subsidiaries:
Germany
(a)
Spain
South Africa
(c)
Sames Technologies SAS
Foreign subsidiaries:
Germany
(a)
Hardi International AS (Denmark)
Foreign subsidiaries:
French subsidiaries:
Pommier S.C.E.P.
Agrifac Machinery BV (Netherlands)
(b)
Foreign subsidiaries:
Agrifac UK Ltd (UK)
70
Percentage controlled
Name
08/2012
Agrifac Russia LLC (Russia)
100.00%
08/2011
NA
Percentage held
08/2012
08/2011
100.00%
NA
Consolidation
method
FC
FC: Full consolidation – EA: Equity accounting – NC: Not consolidated, deconsolidated – NA: Not applicable.
Changes in consolidated Group structure
In the fiscal year ended August 31, 2012, the following changes were made in the consolidated Group's
structure:
(a) An internal Group merger of the two German subsidiaries of Kremlin Rexson and Sames had no impact
on the consolidated financial statements.
(b) EXEL Industries acquired 100% of the stock in Agrifac Machinery BV on July 4, 2012. This Dutch
company, whose registered office is in Steenwijk in the Netherlands, makes and sells agricultural sprayers
and sugar beet harvesters. This acquisition was paid for in cash.
Agrifac’s activity was consolidated in the period 2011/2012, from July 2012, i.e. over two months.
This first-time consolidation had the following impact on consolidated income:

on consolidated sales + €4,841,000

on operating income - €827,000

on financial income - €11,000

on net income - €915,000
This first-time consolidation affects the consolidated balance sheet as follows: (net value)

on non-current assets + €1,759,000

on stocks + €14,989,000

on trade receivables + €3,604,000

on other current assets + €2,327,000

on non-current liabilities + €1,697,000

on current liabilities + €12,780,000
(c) Kremlin Rexson bought the minority interests in the capital of its South African subsidiary for a residual
value. As this subsidiary was losing money, it was already fully consolidated beforehand: this purchase of
interests did not therefore have any material effect on the Group’s consolidated financial statements.
3.- Goodwill
3.1 CHANGES IN THE PERIOD
(€ thousands)
08/31/2012
Opening net value
08/31/2011
25,173
25,668
Increases
55
0
Decreases
0
0
Changes in consolidated Group structure:
Impairment
(533)
71
Other net changes (foreign exchange effect)
Closing net value
28
38
25,256
25,173
The change in Group structure concerns Agrifac.
3.2 ANALYSIS OF GOODWILL BY CASH GENERATING UNIT (CGU)
(Net carrying value)
(€ thousands)
08/31/2012
08/31/2011
KREMLIN REXSON
2,228
2,228
SAMES
2,629
2,629
MATROT
HARDI and its subsidiaries
Other subsidiaries
TOTAL
5,296
5,296
14,291
14,263
811
756
25,256
25,173
4 - Intangible assets
08/31/2012
(€ thousands)
Patents, trademarks, licenses and software (a)
Other intangible assets
TOTAL
08/31/2011
Gross
Amortization
Impairment
Net
Net
9,628
(8,805)
0
823
624
805
(711)
0
94
76
10,433
(9,517)
0
916
701
(a) Software purchases account for virtually all these assets.
5 - Property, plant and equipment
08/31/2012
(€ thousands)
Gross
08/31/2011
Depreciation Impairment
Net
Net
Land
17,711
(1,085)
0
16,626
15,338
Buildings
69,174
(40,259)
0
28,915
28,507
Plant and equipment
86,878
(70,877)
0
16,001
15,229
Other property, plant and equipment (a)
25,204
(19,562)
0
5,642
4,522
3,828
0
0
3,828
5,077
239
0
0
239
252
203,035
(131,783)
0
71,252
68,925
Property, plant and equipment under construction
Advances and prepayments
TOTAL
(a) Other property, plant and equipment consists mainly of vehicles, furniture and computer equipment.
The gross value of property, plant and equipment includes €5,278,000 for items acquired through finance
72
leases (see note on financial debt).
5.1 - CHANGES IN GROSS VALUE DURING THE PERIOD
(€ thousands)
08/31/2012
Gross value of property, plant and equipment at the beginning of the period
08/31/2011
191,720
181,685
Acquisitions (net of transfers)
8,251
11,575
Change in Group structure
1,674
0
Disposals or decommissioned assets
(1,942)
(1,221)
Impact of foreign exchange and misc.
3,331
(319)
203,035
191,720
GROSS VALUE OF PROPERTY, PLANT AND EQUIPMENT AT THE END OF THE
PERIOD
5.2 - CHANGES IN ACCUMULATED DEPRECIATION DURING THE PERIOD
(€ thousands)
08/31/2012
Accumulated depreciation at the beginning of the period
Increases in the period
122,796
115,379
9,009
8,811
Change in Group structure
Reversals of disposals or decommissioned assets
744
0
(1,752)
(1,104)
986
(290)
131,783
122,796
Impact of foreign exchange and misc.
ACCUMULATED DEPRECIATION AT THE END OF THE PERIOD
08/31/2011
6 - Investments in associates
(€ thousands)
08/31/2012
Opening net value
08/31/2011
2,460
2,176
591
483
(392)
(199)
0
0
2,659
2,460
Acquisitions
Change in Group structure
Share in earnings of equity-accounted associates
Dividend distribution
Disposals / deconsolidation
Other net changes
CLOSING NET VALUE
This concerns Pommier, 47%-held by Hardi Evrard, a direct subsidiary of Hardi:
Key financial aggregates of Pommier at 08/31/2012 are presented below:
Assets
€7.3m
Liabilities (excluding equity)
€1.7m
Revenue (12 months)
Net income (12 months)
€12.6m
€1.3m
73
7 - Non-current financial assets
08/31/2012
Consolidated data
(€ thousands)
Gross
Equity interests
Impairment
102
Receivables on equity interests
0
Other equity securities
8
Loans
08/31/2011
0
Net
Net
102
102
0
0
5
5
48
48
(3)
48
Other non-current financial assets
375
(187)
188
195
TOTAL
534
(190)
344
351
Equity interests represent non-controlling interests of 10% in companies marketing agricultural equipment in
Europe.
8 - Inventories and work in progress
08/31/2012
(€ thousands)
Gross
Raw materials
86,149
08/31/2011
Impairment
(19,498)
Net
Net
66,651
62,181
Work-in-progress (goods and services)
31,757
(1,532)
30,225
20,279
Semi-finished and finished goods
43,213
(2,164)
41,049
29,681
9,716
(3,756)
5,960
5,472
170,835
(26,950)
143,885
117,613
Trade goods
TOTAL
9.- Trade receivables
08/31/2012
(€ thousands)
Trade receivables
TOTAL
Gross
08/31/2011
Impairment
Net
Gross
Impairment
Net
108,869
(6,398)
102,471
83,002
(3,422)
79,580
108,869
(6,398)
102,471
83,002
(3,422)
79,580
Impairment charges are estimated on an individual basis after identifying a risk of default by the customer
in question and based on payment delays.
Changes in allowances for impairment of trade receivables break down accordingly:
€ thousands
08/31/2012
Allowances for impairment at the beginning of the period
Net allowance (or reversal) recognized under profit or loss
74
08/31/2011
(3,422)
(3,859)
(1,159)
438
Change in Group structure
(1,817)
Other changes
ALLOWANCES FOR IMPAIRMENT AT THE END OF THE PERIOD
(6,398)
(3,422)
The payment schedule of receivables due, subject to allowances for impairment or not, is presented below:
Receivables not due
(€ thousands)
Receivable
s past due
Gross trade receivables
< 90 days
80,140
Impairment of trade receivables
TOTAL NET RECEIVABLES
80,140
91 - 180
days
181 - 360
days
> 360 days
TOTAL
18,270
3,583
1,657
5,219
108,869
(693)
(346)
(852)
(4,507)
(6,398)
17,577
3,237
805
712
102,471
10 - Other receivables
Other receivables consist mainly of amounts for VAT refunds.
(€ thousands)
Tax receivables excluding corporate income tax (mainly VAT)
08/31/2012
08/31/2011
net value
net value
8,877
Amounts receivable from payroll tax agencies
Advances and prepayments paid
Sundry debtors
Prepaid expenses
TOTAL
6,006
273
280
2,903
1,667
555
879
3,654
2,654
16,262
11,485
11 - Cash and cash equivalents
(€ thousands)
08/31/2012
08/31/2011
Marketable securities
23,838
16,477
Cash at banks and on hand
31,055
28,362
54,893
44,840
TOTAL
The market value of marketable securities that consist mainly of money market funds is close to the carrying
value.
Available cash is generally invested in risk-free investment vehicles (money market funds). The company does
not have any investment portfolios of equity securities.
75
12 – Share capital
At August 31, 2012, the parent company's share capital consisted of 6,787,900 ordinary shares with a par
value of €2.50 per share. The company does not have any dilutive instruments.
There were no corporate actions in the period under review.
At August 31, 2012, there were 6,641 treasury shares.
Policy for managing equity
Equity management involves mainly determining the level of current and future share capital and the policy
with respect to the distribution of dividends.
The Group's management policy is based on ensuring a sufficient level of equity to ensure that the Group's
financial structure remains sound. The proper level of equity is monitored on the basis of gearing (net
financial debt to equity).
In addition, for a number of years, a liquidity agreement has been in place to facilitate orderly trading of its
shares on the market. This liquidity agreement does not permit use of significant amounts of capital and
allows for only marginal intervention in the trading of the company's shares on the market.
13 - Provisions for contingencies and expenses
13.1 BREAKDOWN OF PROVISIONS BY NATURE AND CHANGES IN THE PERIOD
Consolidated data
(€ thousands)
Provisions for contingencies
Provisions for expenses
TOTAL
Of which non-current provisions
Of which current provisions
TOTAL
Reversals Reversals Reclassifi(used
(unused
cations &
08/31/2011 Allowance provisions) provisions)
other
Change in
Group
structure
and
exchange
rates
08/31/2012
15,447
5,603
(2,740)
(1,150)
571
17,731
8,965
1,826
(151)
0
16
10,656
24,412
7,429
(2,892)
(1,150)
587
28,386
0
22,886
26,301
1,526
2,085
24,412
28,386
13.2 BREAKDOWN BETWEEN CURRENT AND NON-CURRENT PROVISIONS
As a rule, provisions for contingencies and expenses are classified as non-current liabilities as their due date
is known with precision except if at the closing date the company knows that certain provisions will result in
outflows in the next financial year. In this latter case, provisions in question are classified as current
liabilities.
76
Non-current provisions for contingencies and expenses
Consolidated data
€ thousands
08/31/2012
08/31/2011
Sales-related litigation and expenses for work in progress
1,871
1,967
Contractual customer warranties
8,360
6,689
30
30
10,397
8,803
Other miscellaneous employee-related commitments (excluding redundancy plans)
2,044
1,787
Contingencies for patents and related litigation
2,730
2,585
Tax contingencies and provisions
381
426
Sundry
489
599
26,301
22,886
Risks of the closure of foreign establishments and subsidiaries
Retirement commitments including social charges
TOTAL
Current provisions for contingencies and expenses
Consolidated data
€ thousands
08/31/2012
08/31/2011
Sales-related litigation and expenses for work in progress
174
Redundancy plans
130
175
0
0
448
0
1,333
1,351
2,085
1,526
Risks of the closure of foreign establishments and subsidiaries
Tax contingencies and provisions
Other miscellaneous employee-related commitments
TOTAL
13.3 PENSION LIABILITIES
Depending on the country, Group employees are entitled to:

Lump sum severance payments paid on retirement (defined benefit plans that concern almost
exclusively French employees);

Or supplementary retirement benefits paid annually to retired employees (defined contribution plan).
For defined-contribution plans,
Personnel expenses and contributions payable are recognized by the Group when they are incurred.
For defined benefit plans,
The Group recognizes a provision for pension liabilities corresponding to the amount of liabilities calculated
by independent actuaries, deducting premium amounts paid to an external fund managed by an insurance
company.
Assumptions used to estimate retirement commitments:
Salary growth rate
2012
2%
2011
2%
Discount rate (corresponding to the rate of French TEC 10-year OAT government bonds for August)
2012
2.13%
77
2011
2.94%
Retirement age: 65
Life expectancy: TF 00-02 mortality table
Turnover rate: based on the demographic data specific to each Group entity and actual experience.
Voluntary retirement of employees with social security costs representing 45% of total retirement liabilities.
Expenses in connection with retirement liabilities are recognized under current operating income and break
down as follows:
(€ thousands)
Gross
Social charges
Total
08/31/2012
Total
08/31/2011
Service costs in the period
316
142
459
495
Discount costs
188
85
273
275
COST FOR THE PERIOD
505
227
732
770
Total
08/31/2012
Total
08/31/2011
Changes in pension and similar liabilities break down as follows:
(€ thousands)
Gross
Liabilities at the beginning of the period
Cost for the period
Actuarial gains and losses recognized in equity
Benefits paid
Social charges
6,549
2,947
9,497
9,917
505
227
732
770
913
411
1,323
(679)
(321)
(144)
(465)
(511)
0
0
0
0
0
3,441
11,087
9,497
Contributions to plan assets
0
Changes in Group structure
TOTAL PENSION LIABILITIES AT THE END
OF THE PERIOD
7,646
Reconciliation between total pension liabilities and provisions for liabilities recognized in the balance sheet
at 08/31(N):
(€ thousands)
Total pension liabilities at the end of the
period
Liabilities covered by plan assets managed by a thirdparty (a)
PROVISIONS AT THE END OF THE PERIOD
Gross
Social charges
7,646
3,441
(690)
6,956
78
3,441
Total
08/31/2012
Total
08/31/2011
11,087
9,497
(690)
(693)
10,397
8,803
(a) Breakdown of plan assets at 08/31/2012:
Equities
€543,000 (78.6%)
Bonds
€147,000 (21.4%)
Provisions for retirement liabilities varied as follows for the period:
(€ thousands)
Gross
Provisions at the beginning of the period
Social charges
Total
08/31/2012
Total
08/31/2011
5,856
2,947
8,803
9,038
Cost for the period
505
227
732
770
Actuarial gains and losses recognized in equity
913
411
1,323
(679)
Benefits paid
(194)
(144)
(338)
(348)
Contributions to plan assets (including returns on
plans)
(123)
0
(123)
23
0
0
0
0
6,956
3,441
10,397
8,803
Changes in Group structure
PROVISIONS AT THE END OF THE PERIOD
14 - Analysis of financial debt by nature
Consolidated data
(€ thousands)
08/31/2012
Short-term facilities for operations and bank overdrafts - France and other countries (b)
08/31/2011
30,689
38,643
1,214
1,463
17,859
16,661
258
342
Other borrowings
97
163
Contingent advances (d)
56
34
50,174
57,306
4,013
14,404
46,161
42,903
50,174
57,306
Finance leases (a)
Bank borrowings - France and other countries (c)
Payables on employee profit sharing
TOTAL FINANCIAL DEBT
Breakdown between non-current and current:
Non-current portion (> 1 year)
Current portion (< 1 year)
TOTAL FINANCIAL DEBT
The average rate of interest for the period was, at 2.3%, similar to that in the prior period.
(a) Finance leases were restated under fixed assets and financial debt:
(€ thousands)
Gross value
Depreciation
Net value
Land and buildings
3,498
(1,577)
1,921
Installations
1,633
(1,498)
135
Computer equipment
147
(147)
0
Software
470
(470)
0
79
Outstanding
financial debt
(1,214)
TOTAL
Of which intangible assets
Of which property, plant and equipment
TOTAL
5,749
(3,693)
2,056
470
(470)
0
5,278
(3,222)
2,056
5,749
(3,693)
2,056
(1,214)
(1,214)
Transactions which on an individual basis are not material or do not result in the acquisition of assets
(vehicle fleets) were not restated.
(b) Foreign short-term bank borrowings amounted to €15.1 million. These concern foreign subsidiaries in
Denmark, the Netherlands, Italy and Spain.
(c) Bank borrowings break down as follows:
Consolidated data
(€ thousands)
08/31/2012
08/31/2011
France
1,916
14,771
Foreign
15,943
1,890
TOTAL
17,859
16,661
1,927
2,282
15,933
14,379
Of which fixed rate:
Of which variable rate:
(d) These concern advances granted by French development agencies (DRIRE and ANVAR) for modernization
and innovation or advances received from COFACE for commercial prospecting for export business.
Financial debt in foreign currency
At August 31, 2012, financial debt in foreign currency broke down as follows:
Financial debt denominated in DKK€15,702,000 (i.e. DKK 117,000,000)
Financial debt denominated in USD€5,108,000 (i.e. USD 6,442,000)
Financial debt denominated in AUD€4,409,000 (i.e. AUD 5,380,000)
Financial debt denominated in GBP€465,000 (i.e. GBP 370,000)
15 - Repayment schedule of financial debt at August 31, 2012
Consolidated data
(€ thousands)
Short-term operating capital loans and bank overdrafts
- France and other countries
Finance leases
Bank borrowings - France and other countries
Other borrowings
Less than 1
year
Total
30,689
0
0
30,689
138
600
476
1,214
15,206
2,601
52
17,859
128
228
355
0
56
56
46,161
3,485
Contingent debt
TOTAL
More than 5
years
1 to 5 years
80
528
50,174
16 - Analysis of other current liabilities
Consolidated data
(€ thousands)
08/31/2012
08/31/2011
Advances and prepayments received
14,830
12,429
Payables for tax (excluding corporate income tax) and payroll tax agencies
35,759
29,430
Other payables
Deferred income
TOTAL
3,755
2,617
21,078
3,408
75,422
47,884
17 - Net sales
Sales by geographical sector break down as follows:
Consolidated data
(€ millions)
08/31/2012
FY
08/31/2011
FY
%
%
MARKET
Plant protection
368.7
70.2%
302.6
70.4%
Materials protection
156.6
29.8%
127.5
29.6%
525.3
430.1
GEOGRAPHICAL AREA
France
208.1
39.6%
167.4
38.9%
Exports
317.2
60.4%
262.7
61.1%
525.3
430.1
Export sales broke down by geographical region as follows:
Consolidated data
(in millions of euros)
08/31/2012
Europe
%
08/31/2011
%
168.0
53%
137.3
52%
USA/Canada/Latin America
74.4
23%
57.2
22%
Asia
35.3
11%
29.2
11%
Africa & Oceania
39.4
12%
39.0
15%
TOTAL EXPORT
317.2
Amounts invoiced for export sales broke down as follows (translated into euros):
Total amounts invoiced in euros (subsidiaries + direct sales): €142.5m
Total amounts invoiced in foreign currency:
€174.7m
81
262.7
In US dollars: .............................................................. €65.0m i.e.USD 84.8m
In Danish crowns: ...................................................... €33.1m i.e.DKK 246.5m
In Australian dollars: ............................................... €29.1m i.e.AUD 37.0m
In pounds sterling: ....................................................... €9.6m i.e.GBP 7.9m
In other currencies: .................................................... €37.9m
18 - Payroll and workforce
Statutory employee profit sharing agreements and voluntary profit sharing plans specific to certain companies
of the Group amounted to €2,842,000 for the fiscal year ended August 31, 2012, compared with
€2,085,000 in the prior period. These amounts are expensed under staff costs for the period.
At the end of the period under review, the workforce broke down as follows:
Permanent workforce
08/31/2012
08/31/2011
Executive officers and management
520
514
Technical and supervisory staff
876
881
1,408
1,278
2,804
2,673
Plant workers
TOTAL
Permanent staff by division
08/31/2012
08/31/2011
PLANT PROTECTION
Headcount in France
Headcount in other countries
1,143
1,116
961
887
2,104
2,003
MATERIALS PROTECTION
Headcount in France
379
399
Headcount in other countries
321
271
700
670
Headcount in France
1,522
1,515
Headcount in other countries
1,282
1,158
2,804
2,673
TOTAL WORKFORCE
19 - Net allowances for depreciation, amortization and impairment
Consolidated data
(€ thousands)
08/31/2012
FY
08/31/2011
FY
Increases in operating provisions
Provisions for contingencies and expenses
(5,241)
(3,732)
Provisions for current assets
(3,076)
(2,393)
82
Reversal of operating provisions
Provisions for contingencies and expenses
3,315
3,292
Provisions for current assets
1,644
2,579
(3,359)
(254)
TOTAL
20 - Non-recurring income/(expenses)
This line item includes items not relating to ordinary activities corresponding to events that are unusual or
infrequent in nature.
Net non-recurring income amounted to €0.4 million. This includes mainly:
+ €0.8 million of inflows of old receivables previously written off;
- €0.4 million of net allowances in additional provisions on old litigation, a tax contingency and employeerelated disputes.
21 - Financial income/(expenses)
Consolidated data
(€ thousands)
08/31/2012
FY
Income from cash and cash equivalents
08/31/2011
FY
448
407
Finance costs, gross
(2,035)
(1,655)
Net interest income/(expenses)
(1,586)
(1,248)
5,544
(2,868)
3,958
(4,116)
(Loss)/gains on foreign exchange & other financial income/(expenses)
NET FINANCIAL INCOME/(EXPENSE)
22 - Corporate income tax
Income tax expense breaks down as follows:
Consolidated data
(€ thousands)
08/31/2012
FY
Current tax income/(expense)
Deferred tax income/(expense)
TOTAL
08/31/2011
FY
(11,784)
(3,975)
(166)
(17)
(11,951)
(3,992)
22.1 – CHANGE IN DEFERRED TAX
Consolidated data
(€ thousands)
08/31/2012
FY
83
08/31/2011
FY
Net deferred tax assets/(liabilities) at the beginning of the period
Differed taxes recognized in equity
Deferred tax income/(expense)
8,254
8,593
510
(286)
(166)
(17)
Changes in Group structure
413
Translation adjustments
125
(36)
9,136
8,254
Of which deferred tax liabilities
(1,475)
(904)
Of which deferred tax assets
10,611
9,158
Net deferred tax at the end of the period
22.2 - ANALYSIS OF DEFERRED TAXES BY NATURE
Consolidated data
(€ thousands)
08/31/2012
FY
08/31/2011
FY
(assets if +; liabilities if -)
Deferred taxes from temporary timing differences
Employee benefits (profit sharing, accrued vacation payments, provisions for pension liabilities)
5,138
4,113
Other timing differences between the tax result and book result
2,072
1,964
743
1,451
(277)
(294)
(1,698)
(1,479)
2,881
2,222
276
278
9,136
8,254
Of which deferred tax liabilities
(1,475)
(904)
Of which deferred tax assets
10,611
9,158
Tax losses to be carried forward
Deferred taxes arising from consolidation adjustments
Capitalization of finance leases
Cancellation of tax-driven provisions (accelerated tax depreciations)
Elimination of internal inventory margins
Other misc. items
Net deferred tax at the end of the period
22.3 - RECONCILIATION OF THE EFFECTIVE TAX EXPENSE AND THEORETICAL TAX EXPENSE
(Calculated at the tax rate applicable in France)
Consolidated data
(€ thousands)
08/31/2012
FY
Net loss before tax
08/31/2011
FY
37,469
16,609
36.10%
34.43%
(13,526)
(5,719)
Permanent tax differences
(820)
(714)
Tax loss not used
(855)
(68)
754
347
2,204
2,023
293
139
(11,951)
(3,992)
31.89%
24.03%
Current tax rate in France
Theoretical tax income/(expense) at the current tax rate
Impact of:
Tax rate differential with foreign subsidiaries
Tax credits
Misc. (including impact of the French tax sharing agreement)
Net tax income/(expense) recognized
Effective Group tax rate (%)
84
Tax credits concerned mainly research tax credits (RTC).
23 - Change in working capital requirements (WCR)
(€ thousands)
08/31/2012
Net inventories
26,272
30,035
1,236
112
Net trade receivables
22,891
5,269
Current income tax receivables
(3,150)
3,234
3,541
2,021
50,791
40,671
Advances and prepayments received
2,401
8,260
Trade payables
8,219
13,622
(51)
43
Payables for tax (excluding corporate income tax) and payroll tax agencies
6,329
2,197
Current income tax payables
6,679
(942)
Other payables and accruals
18,951
(3,988)
42,527
19,192
8,264
21,479
51
(43)
Impact of change in Group structure on WCR
8,505
0
Impact of foreign exchange on WCR
1,404
322
(1,696)
21,200
Advances and prepayments paid
Other net receivables and accruals
Payables for fixed assets
Change in WCR
Payables on fixed assets reclassified under investments
CHANGE IN WCR AFFECTING OPERATING CASH FLOW (EXCL. IMPACT OF
FOREIGN EXCHANGE AND GROUP STRUCTURE)
08/31/2011
24 - Related party transactions
24.1 - REMUNERATION OF EXECUTIVE OFFICERS
Compensation to members of the Management Committee and company officers totaled €4.2 million
(including social charges) for the fiscal year ended August 31, 2012, compared with €3.75 million for the
fiscal year ended August 31, 2011.
There were no share subscription agreements reserved for executive officers or share-based payments.
This remuneration breaks down as follows:
Short-term benefits
€4.2m
Post-employment benefits
-
Other long-term benefits
-
Severance benefits
-
85
Share-based payments -
24.2 - TRANSACTIONS WITH OTHER RELATED PARTIES
In line with previous years, the nature of the Group's relations remained unchanged with EXEL SAS, which:

invoiced industrial companies for provision of services in the amount of €4.08 million;

made its surplus cash available with a maximum amount of €20.0 million, giving rise to
remuneration of €141,000 determined on the basis of 1-month Euribor plus 0.35%.
25 - Off-balance sheet commitments and contingent liabilities
25.1 - GUARANTEES GIVEN ON FINANCIAL DEBT
Certain medium-term loans are guaranteed by pledges on equipment acquired. At August 31, 2012, the
amount of these pledges was not material and represented less than 1% of the gross value of total property,
plant and equipment of the Group.
Short-term credit lines are generally guaranteed by trade receivables balances with financing.
At August 31, 2012, total current bank facilities amounted to €30.7 million and outstanding trade
receivables balances net of impairment charges to €102.5 million.
No shares of a subsidiary were given as security for loans.
25.2 – OPENING OF MEDIUM-TERM CREDIT LINES
In connection with possible acquisitions, EXEL Industries Group's banks granted it a medium-term credit
line. At August 31, 2012, none of these credit lines were drawn.
25.3 - GUARANTEES GIVEN
In connection with the acquisition of Hardi on December 1, 2007, the EXEL Industries Group granted a
guarantee in favor of a Danish bank for all the medium- and short-term credit lines granted by this bank to
Hardi and its subsidiaries, but with the limit of a maximum amount of DKK 100 million (i.e. €13.4
million).
25.4 - OTHER COMMITMENTS
At August 31, 2012, individual training benefits provided for under French law (droit individuel à la
formation or DIF) representing a total amount of 146,435 hours were available. No requests were made to
exercise these rights. In consequence they remain contingent liabilities and no provisions have been recorded
for this purpose.
To the best of the Group's knowledge, it has not omitted to disclose any material off-balance sheet
commitments in accordance with applicable accounting standards.
26 - Liquidity risk
No loans obtained by EXEL Industries from banks provide for prepayment provisions based on covenants.
After performing a specific review of its liquidity risk, the company considers that is has the resources to
86
honor its future payment obligations.
27 - Tax risk
To the best of its knowledge, the Group does not have any tax risks for which provisions have not been
recorded.
28 - Exposure to exchange rate risk
Given the importance of its sales to North America and Australia, as well as US dollar denominated contracts,
the Group has an exposure to fluctuations in the exchange rates of these currencies.
In the period ended, Group revenue incurred a positive currency effect of €7 million resulting from foreign
exchange fluctuations concerning notably the Australian dollar in relation to the average exchange rate for
the previous period.
The majority of sales by the Group's foreign subsidiaries to non-Group foreign buyers are in euros. Invoices
issued in foreign currencies by French subsidiaries of the Group are converted into euros at the exchange rate
in force on the date of delivery.
Sales and invoices of French subsidiaries of EXEL Industries to their foreign subsidiaries are in euros. As an
exception to this general rule, subsidiaries in the US, Canada and the UK subsidiary of Berthoud are
invoiced in local currencies and the Chinese subsidiary in US dollars. Foreign subsidiaries of the Group
invoice customers in local currency and ensure that these amounts are settled in a timely manner.
29 - Events after the reporting period
In October 2012, EXEL Industries acquired 100% of the Hozelock Group from the CVC Capital Partners
investment fund and other minority shareholders.
Hozelock is one of the leading European manufacturers of gardening equipment, with a full range including
watering, spraying, hoses and aquatics (pool equipment).
In its last period ended September 30, 2012, Hozelock achieved sales of €95 million.
87
Statutory Auditors' report on the consolidated financial statements
To the Shareholders,
In accordance with the terms of our engagement as auditors appointed by your general meeting, we hereby
report to you for the year ended August 31 2012, on:

the audit of the accompanying consolidated financial statements of EXEL Industries;

the basis of our assessments;

the specific verification required by law.
The consolidated financial statements have been approved by the Board of Directors. Our role is to express an
opinion on these annual financial statements based on our audit.
I. OPINION ON THE CONSOLIDATED FINANCIAL STATEMENTS
We conducted our audit in accordance with professional standards applicable in France. These standards
require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes examination, on a test basis or
other methods of selection, of evidence relevant to the amounts and disclosures in the consolidated financial
statements. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made, as well as the overall presentation of the financial statements.
We believe that the audit evidence we have obtained provides a sufficient and appropriate basis for our audit
opinion.
In our opinion, the consolidated financial statements for the year give a true and fair view of the assets,
liabilities, financial position and results of the consolidated group of entities in accordance with IFRS as
adopted by the European Union.
II. BASIS OF OUR ASSESSMENTS
Accounting estimates used to prepare the financial statements for the period ended August 31, 2012, were
produced in a context of highly volatile markets and conditions rendering forecasting economic trends
difficult. These conditions are described in note 1.17 to the financial statements. It was in this context, in
accordance with the provisions of article L. 823-9 of the French Commercial Code (Code de Commerce), that
we proceeded with our own assessments based on which we draw to your attention the following matters:
As described in notes 1.15 and 1.17 to the consolidated financial statements, the Group has made estimates
and formulated assumptions and judgments that affect amounts presented in these financial statements and
the notes thereto, notably with respect to the valuation of provisions on the basis of the most recent available
data. Based on these estimates, the Group recognized provisions under liabilities in its balance sheet as
described in note 13 to the consolidated financial statements. Our work has consisted in evaluating the data
and assumptions on which these estimations have been based, reviewing the calculations made by the
company and examining the procedures for management's approval of these estimations. Because assumptions
are by nature uncertain, especially in the environment of economic crisis referred to above, actual results
may differ from these estimates. On this basis, we have assessed the reasonable nature of these estimations.
88
The Group tested goodwill and indefinite life intangible assets for impairment and determined for long-lived
assets if there existed an indication of impairment according to the procedures described in note 1.4 of the
consolidated financial statements. We have reviewed the procedures used for this impairment test, the
estimations concerning future cash flows and assumptions used and have verified that the notes 1.4 and 3 to
the consolidated financial statements provide appropriate information.
These assessments were made as part of our audit of the consolidated financial statements taken as a whole,
and therefore contributed to our opinion expressed in the first part of this report.
III. SPECIFIC VERIFICATION
As required by law we have also verified, in accordance with professional standards applicable in France,
the information relating to the Group given in the management report. We have no matters to report with
respect to the fair presentation of this information and its consistency with the consolidated financial
statements.
Reims and Villeurbanne, December 19, 2012
The Statutory Auditors
SA PHILIPPE VENET – GRANT THORNTON
DELOITTE & ASSOCIES
Philippe Venet
Dominique Natale
89
CONDENSED PARENT COMPANY FINANCIAL STATEMENTS
I - Balance sheet at August 31, 2012
Separate financial statements - Assets
(€ thousands)
08/31/2012
Net intangible fixed assets
08/31/2011
97
109
1,427
1,617
112,951
97,859
114,475
99,585
Trade receivables
1,621
1,100
Other receivables
14,379
16,647
Cash at banks and on hand
23,182
27,412
24
80
39,206
45,238
153,681
144,823
Net tangible fixed assets
Financial assets
NON-CURRENT ASSETS
Accruals
CURRENT ASSETS
TOTAL ASSETS
Separate financial statements - EQUITY & LIABILITIES
(€ thousands)
08/31/2012
Capital
Share premiums
Reserves
08/31/2011
16,970
16,970
2,528
2,528
4,101
4,101
Retained earnings
97,173
92,823
Net income/(loss) for the period
14,734
7,673
924
728
136,430
124,823
4,645
4,424
49
11,008
283
447
Tax and amounts payable to payroll tax agencies
7,010
443
Other payables
2,574
2,314
Accruals
2,688
1,363
12,556
4,568
153,681
144,823
Tax-driven provisions
Shareholders’ equity
Provisions for contingencies and expenses
Financial debt
Trade payables and related accounts
Trade and other payables
TOTAL EQUITY AND LIABILITIES
90
II - Income statement
Separate financial statements
INCOME STATEMENT
(€ thousands)
08/31/2012
08/31/2011
Sales
7,536
5,745
Other operating income
1,107
1,467
8,643
7,213
(1,313)
(1,279)
Taxes and duties other than on income
(148)
(123)
Payroll
(667)
(768)
Increases in depreciation and amortization, provisions
(203)
(205)
Other expenses
(122)
(87)
(2,453)
(2,463)
6,190
4,750
NET FINANCIAL INCOME/(EXPENSE)
14,107
6,146
CURRENT OPERATING INCOME (EBIT)
20,297
10,896
NET EXCEPTIONAL INCOME/(LOSS)
(2,176)
(4,762)
PROFIT BEFORE TAX
18,121
6,133
Corporate income tax
(3,387)
1,540
NET INCOME
14,734
7,673
Operating income
Operating expenses:
Raw materials and consumables
Other purchases and external charges
Operating expenses
Operating profit/(loss)
91
III - Notes to the separate parent company financial statements
ANNUAL HIGHLIGHTS
During the year, EXEL Industries acquired the Dutch company Agrifac (see table of subsidiaries and
associates below).
Our company granted debt waivers to certain subsidiaries for a total amount of €2,500,000 accompanied by
a "better fortunes" (financial recovery) clause.
In addition, one company repaid €800,000 as partial activation of a "better fortunes" clause.
These debt waivers and "better fortunes" are recorded in exceptional expenses and income.
SIGNIFICANT ACCOUNTING POLICIES, PRINCIPLES AND METHODS - Articles L123-13 to
L123-21 of the French Commercial Code (Code de Commerce).
1) COMPLIANCE STATEMENT AND BASIS OF PRESENTATION
These condensed financial statements of our company for the fiscal year ended August 31, 2012 were
prepared according to French generally accepted accounting principles (French GAAP).
The financial statements are on this basis prepared in accordance with the general principles of conservatism
in accordance with the basic principles of:

Going concern;

The consistency principle; and

The time period concept;

These principles comply with general rules for establishing and presenting annual financial
statements.
The financial statements for the period were prepared taking into account the current economic and
financial crises and on the basis of financial parameters for the market available at the end of the financial
year. The immediate effects of the crisis were taken into account in particular in the valuation of such assets
as marketable securities.
With respect to longer-term assets such as equity interests, the assumption adopted is that the crisis' duration
will be limited in time.
The value of these assets is reassessed at the end of the financial period based on the long-term economic
outlook and Management's best assessment in an environment of reduced visibility with respect to future cash
flows.
2) EXCEPTIONS PROVIDED FOR BY THE REGULATIONS - EXEMPTIONS TO ACCOUNTING INSTRUCTIONS
It was not necessary to make use of exceptions provided for by regulations to provide a true and fair view of
the company.
92
3) INTANGIBLE ASSETS
Intangible fixed assets are recognized at purchase cost and amortized on a straight-line basis over following
periods:
Patents and trademarks: 1 to 10 years
Software:
1 year on a prorated basis
4) PROPERTY, PLANT AND EQUIPMENT
Tangible fixed assets are recognized at purchase cost or production cost.
Economic depreciation is calculated using the straight-line method over the following estimated useful life of
the assets:
Machinery and equipment:
Accelerated method between 3 and 5 years;
Hardware:
Accelerated and straight-line method between 3 and 5 years;
Buildings:
Straight-line between 10 and 20 years;
Vehicles:
Straight-line between 3 and 5 years.
Total assets
Separate financial
statements
(€ thousands)
Opening gross
values
Intangible assets
Increases
Reclassificatio
ns
Decreases
Closing net
values
589
0
589
2,693
1
2,694
Equity interests
86,194
117
86,310
Receivables on interests
13,116
15,050
Property, plant and equipment
Financial assets:
Other equity securities
6
Others
4
TOTAL
102,602
(75)
28,091
6
(1)
15,168
(76)
3
0
117,694
Amortization and depreciation
Separate financial statements
(€ thousands)
Provisions at
the beginning
of the period
Amortization of intangible fixed assets
480
12
0
492
1,076
191
0
1,267
1,556
203
0
1,759
Depreciation of tangible fixed assets
TOTAL
Allowances
Reversals
Provisions at
the end of the
period
Changes affecting provisions for accelerated tax depreciations
Separate financial statements
(€ thousands)
Provisions at
the beginning
of the period
93
Increases
Reversals
Provisions at
the end of the
period
For tangible fixed assets
0
0
0
1
For acquisition costs for securities
728
197
0
925
Reversal of tax-driven provisions
(accelerated tax depreciations)
728
198
0
925
5) FINANCIAL ASSETS
The gross value of equity interests and receivables on interests is the acquisition cost. A provision for
impairment is recognized where the net carrying value exceeds the recoverable amount. Recoverable value is
calculated using various criteria including those used when the interests are acquired, value in use based on
the present value of estimated future cash flows and market value as determined in particular from revalued
equity.
Costs related to the purchase of equity interests are capitalized and amortized over five years as accelerated
tax depreciation.
Subsidiaries and associates of EXEL Industries (in euros)
SUBSIDIARIES AND
ASSOCIATES
Currenc
y
Capital
Other equity
before the
appropriatio
n of 2012
income
Percent
age of
capital
held
Carrying
value of
shares
Carrying
value of
shares
Gross
Net
Loans and
advances
granted by
the
company
Pledges
and
guarantee
s given by
the
company
Sales
2012
Net
income
for the
last fiscal
year in
2012
Dividends
received
by EXEL
Industries
in the
period
56,044,020
4,551,222
2,079,000
1,253,491
(73,063)
25,000
FRENCH SUBSIDIARIES
Berthoud Agricole SAS
In
euros
1,155,000
17,489,954
100
5,456,542
5,456,542
Capagri SARL
In
euros
80,000
170,574
100
523,850
523,850
Caruelle Nicolas SAS
In
euros
537,000
4,410,131
100
5,472,464
5,472,464
17,242,876
169,002
CMC SAS
In
euros
405,000
243,249
100
843,711
843,711
1,678,671
109,021
282,000
EXEL GSA SAS
In
euros
2,600,000
6,970,186
100
5,120,167
5,120,167
22,474,632
2,053,892
1,870,000
Herriau SAS
In
euros
51,000
(511,868)
100
461,273
4,000
1,128,340
1,335,646
229,879
Kremlin Rexson SA
In
euros
6,720,000
6,588,999
99.48
6,333,528
6,333,528
800,000
37,193,646
98,788
Matrot Equipements
SAS
In
euros
1,050,000
963,216
100
9,783
9,783
1,000,000
31,446,516
(49,665)
Moreau SAS
In
euros
1,000,000
-497,423
100
1,000,000
7,380,000
11,151,548
409,753
Préciculture SAS
In
euros
419,650
3,975,563
100
1,583,750
1,583,750
35,575,117
1,875,968
RAM Environnement
SAS
In
euros
100,000
6,940
100
76,769
76,769
1,474,547
(131,237)
Sames Technologies
SAS
In
euros
6,000,000
6,642,060
100
9,205,979
9,205,979
69,453,186
5,180,445
3,281,250
Tecnoma Technologies
SAS
In
euros
1,174,400
7,355,197
100
6,272,572
6,272,572
51,735,969
1,627,611
1,253,672
2,727,833
(233,355)
0
(4)
215,000
200,000
FOREIGN SUBSIDIARIES
Vermorel
In
euros
54
-1,153,185
100
70
70
Ingelia
In
72
10,217
90
2,145
2,145
94
2,941,256
1,292,522
euros
EXEL Real Estate USA
In
euros
1,328,206
267,473
100
1,116,101
1,116,101
Hardi International
In
euros
13,420,477
33,556,426
100
39,851,597
39,851,597
LLC EMC (Russia)
In
euros
186,447
359,312
100
183,855
183,855
EXEL Real Estate
Australia
In
euros
3,544,791
1,599,863
100
2,678,848
Agrifac Machinery BV
In
euros
67,520
(121,040)
100
Other equity holdings
In
euros
917,648
0
56,165
83,883,093
3,713,836
225,000
6,402,849
293,407
2,678,848
8,507,499
0
596,484
116,782
116,782
9,156,250
21,759,438
(2,684,434
)
6,631
3,674
86,316,416
84,856,185
32,470,994
670,916
10,754,360
6) INVENTORIES AND WORK IN PROGRESS
Not applicable.
7) TRADE RECEIVABLES
Receivables are recorded at face value.
They are reviewed on a case-by-case basis and a provision is recorded for impairment when risks of noncollection arise.
8) MARKETABLE SECURITIES
This line item includes treasury shares held in connection with a market-making agreement and money
market funds.
At the fiscal year-end, there were 6,641 treasury shares valued at €33.55 per share or a total of €223,000.
In the period, the company purchased 30,278 shares at an average price of €33.64 per share and sold
32,720 shares at an average price of €32.93 per share.
Surplus cash invested in monetary market funds (SICAV) amounted to €10,478,000.
At the fiscal year-end, the carrying value of these items was close to their market value.
9) CORPORATE INCOME TAX
The company has been the head of a French tax group within the provisions of tax sharing agreements since
09/01/1993, in accordance with the terms of the agreement of 08/30/1994 effective as of 09/01/1993.
Agreement between the parent company and consolidated subsidiaries were drawn up on the basis of fiscal
neutrality. Taxes payable are recognized by subsidiaries as if they were taxed separately, with the parent
company recording its own tax and the saving or charge resulting from application of the scheme.
Income tax as presented in the income statement breaks down as follows:
Tax on the company’s taxable income
€3,810,000
(identical to the tax that would have
been paid in the absence of tax
consolidation)
Taxes payable abroad
€13,000
95
Tax benefit arising from group relief
€(352,000)
(originating mainly from tax losses of
subsidiaries allocated to the results
of the tax group)
Tax credit of the company
Total income tax expenses for the
€(84,000)
€3,387,000
period (or net income)
Breakdown of income tax
Profit before
tax
(€ thousands)
Taxes payable
Net
income/(loss)
after tax
Current operating income
20,297
(3,792)
16,506
Net exceptional income/(loss)
(2,176)
52
(2,124)
352
352
(3,387)
14,734
Impact of tax consolidation
BOOK INCOME
18,121
Deferred taxes
(€ thousands)
Amount
Taxes payable on:
Regulated provisions (accelerated tax depreciations)
924
Total deferred tax assets
924
Prepaid taxes on:
Temporarily disallowed deductions (to be deducted the following year)
2,581
Expenses to be subsequently deducted (nondeductible provisions)
4,977
Total deferred tax liabilities
7,558
Net deferred taxes
(6,633)
10) FOREIGN EXCHANGE RISK
At August 31, 2012, the company had a cash balance of US$7.20 million. These foreign exchange holdings
were not covered by a currency hedge. At August 31, 2012, at the closing USD/€ exchange rate of 1.2611,
this balance represented €5.71 million.
11) SHARE CAPITAL
The share capital is comprised of 6,787,900 shares fully paid up of €2.5 per share.
12) CHANGE IN SHAREHOLDERS' EQUITY (IN € THOUSANDS)
Shareholders’ equity at August 31, 2011
124,822
96
Dividends
(3,322)
Net income/(loss) for the year
14,734
Change in tax-driven provisions
Shareholders’ equity at August 31, 2012
196
136,430
13) PROVISIONS FOR CONTINGENCIES AND EXPENSES
Provisions for contingencies and losses are recorded whose purpose and term are clearly defined or whose
amount can be reliably determined, when the company has an obligation towards a third party and it is
certain or probable that it will result in an outflow of resources with no inflow of resources representing an
equivalent amount expected in return.
13.1 - Changes in the period
Separate financial statements
(€ thousands)
Lawsuit contingency provisions for subsidiaries
08/31/2011
Allowance
3,382
145
974
179
Provisions for subsidiary losses
Reversal
(used
provision)
Reversal
(unused
provision)
08/31/2012
(45)
3,482
1,153
Provisions for retirement benefits
11
(1)
10
Provisions for foreign exchange losses
58
(58)
0
TOTAL
4,424
324
(59)
(45)
4,644
13.2 - Retirement severance benefits
Retirement severance payments under collective bargaining agreements (on the basis of a retirement age of 65)
are calculated according to rights vested at August 31, 2012 in accordance with agreement for the metallurgy
industry, according to a mortality table, an employee turnover rate, a discount rate and taking into account
regular wage increases.
The amount of this liability has in part been transferred to a specialized insurance company.
13.3 - Other provisions for contingencies and expenses.
For the period in progress, the company increased the net amount of provisions for contingencies to €279,000.
Lawsuit contingency provisions for subsidiaries amounted to €3,482,000 at August 31, 2012.
These provisions were recognized in the parent company's accounts rather than those of the subsidiaries for
reasons of confidentiality and to safeguard the latters' interests as parties to legal proceedings.
They concern mainly patent litigation and sales and employee-related disputes.
14) USE OF ESTIMATES
To prepare annual financial statements in compliance with the generally accepted accounting principles
(French GAAP), the company makes a certain number of estimates and adopts certain assumptions that may
have an impact on the amounts disclosed under assets and liabilities. These include amounts recorded under
assets and liabilities, information on contingent assets and liabilities on the closing date of the financial
97
statements and amounts recognized under income and expenses for the period.
These estimates are based on the assumption of going concern and include assumptions Management considers
relevant and feasible in the company's operating environment and based on feedback available.
Estimates and assumptions are reviewed on a regular basis and at a minimum at the end of each financial
year. They may vary if the circumstances on which they were based change or new information becomes
available. Actual results may differ from these estimates.
The main estimates made by the company when preparing the financial statements concern notably
assumptions adopted for calculations used for the valuation of intangible and intangible assets, equity
interest and provisions.
15) ADVANCES TO EXECUTIVE OFFICERS
No advances or loans were granted to executive officers for the period under review.
16) RELATED PARTY TRANSACTIONS
The company has non-material transactions with related parties or transactions concluded under normal
conditions or excluded from the scope of application of regulations 2010-02 and 2010-03 of the French
accounting standards Authority (ANC) on related parties.
17) TRADE RECEIVABLES AND PAYABLES
Statement of receivables
Separate financial statements (€ thousands)
Gross amount
More than 1
year
Up to 1 year
Receivables from equity interests
28,091
2,096
Other non-current financial assets
3
3
1,621
1,621
Tax and employee-related receivables
128
128
Group and associates (related parties)
14,197
14,197
78
78
44,118
18,123
Trade receivables
Other receivables and accruals
TOTAL
Loans granted in the period
25,995
25,995
15,870
Repayments received in the period
2,709
Statement of payables
Separate financial statements
(€ thousands)
Financial debt
Gross amount
Up to 1 year
49
49
283
283
Tax and amounts payable to payroll tax agencies
7,010
7,010
Group and associates (related parties)
1,287
1,287
Other payables and accruals
1,430
1,430
Trade payables
98
More than 1
year
More than 5
years
TOTAL
10,059
Loans obtained in the period
10,059
0
0
0
Loans repaid in the period
11,000
Breakdown of accrued expenses
Trade payables
€111,000
Tax and amounts payable
€103,000
to payroll tax agencies
Other payables
€1,243,000
Total accrued expenses
€1,457,000
Selected balance sheet information
(€ thousands)
Affiliates
NON-CURRENT ASSETS
Equity interests
86,310
Receivables from equity interests
28,091
CURRENT ASSETS
Trade receivables and related accounts
1,619
Other receivables
14,197
PAYABLES
Trade payables and related accounts
16
Other payables
2,431
18) NET FINANCIAL EXPENSE
Separate financial statements (€ thousands)
08/31/2012
Financial income from equity interests
08/31/2011
10,756
8,089
Other interest and similar income
1,213
1,027
Reserves written back to income
58
Foreign exchange gains
Net proceeds from the disposal of marketable securities
Total income
Increases in provisions
Interest
Foreign exchange losses
Net losses from the disposal of marketable securities
Total expenses
NET FINANCIAL INCOME/(EXPENSE)
2,398
324
43
86
14,468
9,525
0
(1,058)
(341)
(265)
(19)
(2,057)
0
0
(360)
(3,379)
14,107
6,146
Changes in balances of cash and cash equivalents with affiliates break down as follows:
(€ thousands)
08/31/2012
99
08/31/2011
Financial income
11,849
9,059
168
144
Financial expenses
19) NET EXCEPTIONAL INCOME/(LOSS)
Separate financial statements (€ thousands)
08/31/2012
Application of a "better fortunes" (financial recovery) clause
08/31/2011
800
Disposal price of decommissioned assets
0
0
8
45
665
0
2
845
674
(2,500)
(5,100)
0
(8)
Allowances for subsidiary contingencies
(325)
(134)
Allowances for tax-driven provisions (accelerated tax depreciations)
(197)
(193)
0
(1)
TOTAL EXPENSES
(3,022)
(5,437)
NET EXCEPTIONAL INCOME/(LOSS)
(2,176)
(4,762)
Reversal of provisions for subsidiary contingencies
Other misc. items
Total income
Debt waivers granted to subsidiaries
NAV of deactivated assets
Other misc. items
20) OTHER INFORMATION
Financial commitments
COMMITMENTS GIVEN (€ thousands)
Hardi bank loan guarantee
13,420
13,420
COMMITMENTS RECEIVED (€ thousands)
"Better fortunes" (financial recovery) clauses
16,330
16,330
Average number of employees
Average number of employees
08/31/2012
08/31/2011
Executive officers and management
4
5
Office staff and workers
2
2
TOTAL
6
7
21) EVENTS AFTER THE REPORTING PERIOD
In October 2012, EXEL Industries acquired 100% of the Hozelock Group from the CVC Capital Partners
investment fund and other minority shareholders.
Hozelock is one of the leading European manufacturers of gardening equipment, with a full range including
100
watering, spraying, hoses and aquatics (pool equipment).
In its last period ended September 30, 2012, Hozelock achieved sales of €95 million.
IV - Proposed appropriation of net income
(in euros)
08/31/2012
08/31/2011
Sources
1. Retained earnings from prior years
97,173,217
92,822,909
2. Net income/(loss) for the year
14,734,134
7,673,482
Appropriations:
3. Legal reserve
0
0
4. Dividends
6,516,384
3,326,071
5. Retained earnings
8,217,750
4,347,411
14,734,134
7,673,482
TOTAL
101
Statutory Auditors' report on the annual financial statements
FISCAL YEAR ENDED AUGUST 31, 2012
To the Shareholders,
In carrying out the mission entrusted to us by your Annual General Meeting, we hereby present our report for
the year ended August, 31 2012, on:

the audit of the accompanying annual financial statements of EXEL Industries;

the basis of our assessments;

the specific procedures and disclosures required by law.
These annual financial statements have been approved by the Board of Directors. Our role is to express an
opinion on these annual financial statements based on our audit.
I. OPINION ON THE ANNUAL FINANCIAL STATEMENTS
We conducted our audit in accordance with professional standards applicable in France. These standards
require that we plan and perform the audit to obtain reasonable assurance about whether the annual
financial statements are free of material misstatement. An audit involves performing procedures, using
sampling techniques or other methods of selection, to obtain audit evidence about the amounts and
disclosures in the annual financial statements. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made, as well as the overall
presentation of the financial statements. We believe that the audit evidence we have obtained provides a
sufficient and appropriate basis for our audit opinion.
In our opinion, the annual financial statements give a true and fair view of the financial position and the
assets and liabilities of the company as of August 31, 2012, and the results of its operations for the year then
ended in accordance with accounting principles generally accepted in France.
II. BASIS OF OUR ASSESSMENTS
In application of the terms of article L. 823-9 of the French Commercial Code relating to the basis of our
assessments, we bring to your attention the following matters:
Accounting estimates used to prepare the financial statements for the period ended August 31, 2012, were
produced in a context of highly volatile markets and conditions rendering forecasting economic trends
difficult.
These conditions are described in note 1 to the financial statements. It was in this context that we proceeded
with our own assessments based on which we draw to your attention the following matters:
As described in note 14 to the financial statements, the Group has made estimates and formulated
assumptions and judgments that affect the amounts presented in these financial statements and the notes
thereto, notably with respect to the valuation of provisions for contingencies and expenses on the basis of the
most recent available data. Based on these estimates, the company recorded in its balance sheet provisions for
lawsuit contingencies. In particular, our work has consisted in evaluating the data and assumptions on
which these estimations have been based, reviewing the calculations made by the company and examining
102
the procedures for management's approval of these estimations. Because assumptions are by nature uncertain,
especially in the environment of economic crisis referred to above, actual results may differ from these
estimates. On this basis, we have assessed the reasonable nature of these estimations.
Note 5 to the financial statements on "long-term investments" presents the accounting rules and principles for
the valuation of equity interests and related receivables. In connection with our assessment of the accounting
policies used by the Company, we have reviewed the appropriate nature of the accounting methods referred to
above and the information provided in this note to the financial statements.
These assessments were made as part of our audit of the annual financial statements taken as a whole and
therefore contribute to the opinion we expressed in the first part of this report.
III. SPECIFIC VERIFICATIONS AND INFORMATION
We have also carried out the specific verifications required by law.
We have no matters to report as to the fair presentation and the consistency with the annual financial
statements of the information given in the management report of the Board of Directors and in the documents
addressed to shareholders with respect to the financial position and the annual financial statements.
Furthermore, with respect to the accuracy of the information provided in the management report on
compensation and benefits paid to the corporate directors and officers concerned and commitments granted in
their favor at or after such time as they assume, cease or change functions, we have the following observation:
The management report does not provide exhaustive information as provided for by article L. 225-102-1 of
the French Commercial Code on compensation and benefits paid to each corporate officer during the fiscal
year as well as commitments made in their favor in connection with the assumption, change, or termination
of functions or subsequent to their appointments as officers.
In addition, as required by law, we have ensured that the management report includes the mandatory
disclosures on the identity of owners of share capital and voting rights in the company.
Reims and Villeurbanne, December 19, 2012
The Statutory Auditors
SA PHILIPPE VENET –
DELOITTE & ASSOCIES
GRANT THORNTON
Philippe Venet
Dominique Natale
103
Statutory Auditors' special report on regulated agreements and
commitments
ANNUAL GENERAL MEETING CALLED TO APPROVE THE FINANCIAL STATEMENTS FOR THE PERIOD
ENDED AUGUST 31, 2012
To the Shareholders,
As your Company's Statutory Auditors, we hereby present our report on regulated agreements and
commitments.
The terms of our engagement require us to communicate to you, based on information provided to us, the
principal terms and conditions of those agreements and commitments brought to our attention or which we
may have discovered during the course of our audit, without expressing an opinion on their usefulness and
merits or identifying such other agreements and commitments, if any. It is your responsibility, pursuant to
article R. 225-31 of the French Commercial Code, to assess the merits of concluding these agreements and
commitments for the purpose of approving them.
Our role is also to provide you with the information stipulated in article R. 225-31 of the French
Commercial Code relating to the implementation during the past year of agreements and commitments
previously approved by the Shareholders' Meeting, if any.
We performed procedures we deemed necessary in accordance with the professional guidelines of the French
National Institute of Statutory Auditors (Compagnie nationale des Commissaires aux Comptes) relating to this
engagement. These procedures consisted in verifying that the information provided to us is consistent with the
relevant source documents.
I - AGREEMENTS AND COMMITMENTS SUBMITTED FOR APPROVAL TO THE GENERAL
MEETING
Pursuant to article L. 225-40 of the French Commercial Code, we have been advised of the following
agreements and commitments previously authorized by your Board of Directors.
1.1 WITH MOREAU
On August 30, 2012, your Board of Directors authorized your company to grant a debt waiver to Moreau for
an amount of up to €2.3 million. This debt waiver was accompanied by a "better fortunes" clause that will be
applied when Moreau's shareholders' equity has been reconstituted and its net equity is positive.
In this case, up to 90% of profit before tax will be repaid to your Company by Moreau in the same period.
The amount of debt thus canceled under this waiver totaled €2.3 million as confirmed by your Board of
Directors on November 27, 2012.
1.2 WITH EXEL NORTH AMERICA INC
On April 11, 2012, your Board of Directors granted a US$7 million loan to EXEL North America Inc. over
eight years at 1-year Euribor plus 2.10%. This loan accrues with the previous advance of US$1 million.
At August 31, 2012, the outstanding amount was US$8,000,000, i.e. €6,343,669. Interest income of €91,288
104
on this loan was recognized in the period.
II - AGREEMENTS AND COMMITMENTS APPROVED IN PRIOR PERIODS THAT REMAINED
IN FORCE DURING THE PERIOD ENDED
Pursuant to article R. 225-30 of the French Commercial Code, we have been informed that the following
agreements and commitments, previously approved by General Meetings of prior years, have remained in force
during the year.
2.1 WITH KREMLIN REXSON
On August 26, 2010, and August 30, 2011, your company granted debt waivers for €3,000,000 to Kremlin
Rexson. These debt waivers are accompanied by a "better fortunes" (financial recovery) clause that will
become enforceable as soon as Kremlin Rexson's operating margin exceeds 1%.
In this case, an amount will be repaid in the same period representing up to 90% of current operating income
(EBIT).
During the period, and in line with KREMLIN REXSON’s results, this company repaid the debt waiver in the
amount of €800,000.
The remaining balance payable at August 31, 2012 in connection with the debt waivers totaled €2,200,000.
2.2 WITH HARDI INTERNATIONAL
On December 9, 2010, your Board of Directors authorized your company to extend the guarantee granted by
EXEL Industries to a Danish bank for up to DKK 600 million (or €80 million) for a term not to exceed
November 30, 2012 (with an option to negotiate a lesser amount and/or shorter period with this bank).
2.3 WITH ERE AUSTRALIA
On August 26, 2010, your Board of Directors granted a 15-year loan for AUD 12,975,000 paying a 5% rate
of interest, subject to annual revision.
Interest income of €436,309 on this loan was recognized in the period. At August 31, 2012, the balance
remaining due was AUD 10,380,000, i.e. €8,507,500.
2.4 WITH VERMOREL
On June 9, 2006, your Board of Directors granted a €3 million loan to Vermorel at interest based on the 3month Euribor plus 0.35%.
The loan agreement amendments of December 12, 2008 and January 29, 2009 increased the amount granted
to €5 million and extended the term of the loan for 5 years to February 28, 2014.
At August 31, 2012, the outstanding amount was €2,941,256. Interest income of €39,852 on this loan was
recognized in the period.
2.5 WITH EMC RUSSIA
On August 26, 2010, your Board of Directors authorized granting a 5-year €300,000 loan subject to 3month Euribor plus 0.50%, generating interest income of €4,353 in the period. At August 31, 2012, the
balance remaining due was €225,000.
2.6 WITH MOREAU
105
On August 27, 2008, August 27, 2009, and August 30, 2011, your company granted debt waivers totaling
€4,200,000 to Moreau. These debt waivers were accompanied by a "better fortunes" clause that will become
enforceable when Moreau's shareholders' equity has been reconstituted and its net equity is positive.
In this case, an amount of up to 90% of its profit before tax will be repaid in the same period.
No amounts were repaid in the period under the provisions of a "better fortunes" clause as the conditions for
applying this clause had not been met.
2.7 WITH HERRIAU
On November 20, 2007 your company granted Herriau a debt waiver for €1,900,000.
This debt waiver was accompanied by a "better fortunes" clause that must be enforced when Herriau's
shareholders' equity has been reconstituted and its net equity is positive.
In this case, an amount of up to 90% of its current operating income will be repaid in the same period.
No amounts were repaid in the period under the provisions of a "better fortunes" clause as the conditions for
applying this clause had not been met.
2.8 WITH MATROT EQUIPEMENTS
On July 1, 2002 your company granted Matrot Equipements a debt waiver for €12.9 million accompanied
by a "better fortunes" clause.
This "better fortunes" clause becomes enforceable as soon as Matrot Equipements generates a positive current
operating income. In this case, Matrot Equipements will repay your company an amount corresponding to at
least 50% of its current operating income subject to the condition that this amount does not generate a loss in
Matrot Equipements' accounts.
No amounts were repaid in the period under the provisions of a "better fortunes" clause as the conditions for
applying this clause had not been met.
The remaining balance payable at August 31, 2012, in connection with this debt waiver totaled
€3,630,000.
On August 30, 2011, your Board of Directors authorized your company to grant a debt waiver to Matrot
Equipements for an amount of up to €1,900,000. This debt waiver was accompanied by a "better fortunes"
clause that will be applied when Matrot Equipements' shareholders' equity has been reconstituted and its net
equity is positive.
In this case, an amount representing up to 90% of Matrot Equipements' profit before tax will be repaid to your
company in the same period.
No amounts were repaid in the period under the provisions of a "better fortunes" clause as the conditions for
applying this clause had not been met.
The remaining balance payable at August 31, 2012, in connection with this debt waiver totaled
€1,900,000.
106
III - PERSONS CONCERNED BY REGULATED AGREEMENTS
Patrick Ballu
Chairman of the
Board of Directors
Guerric Ballu
Chief Executive
Officer and Director
Marc Ballu
Deputy Chief
Executive Officer
and Director
Cyril Ballu
Deputy Chief
Executive Officer
-
-
-
-
Director
Chairman of the Board
of Directors
-
-
Chairman
Member of the Board
-
-
SAS MOREAU
-
-
-
-
ENA USA
-
-
-
-
COMPANIES
CONCERNED
SC VERMOREL SRL
SA KREMLIN REXSON
HARDI INTERNATIONAL A/S
Reims and Villeurbanne, December 19, 2012
The Statutory Auditors
SA PHILIPPE VENET – GRANT THORNTON
DELOITTE & ASSOCIES
Philippe Venet
Dominique Natale
107
REGULATED AGREEMENTS
I - ADVANCES, LOANS AND OTHER RECEIVABLES (IN EUROS)
ADVANCES, LOANS AND OTHER
RECEIVABLES
GRANTED BY
RECEIVED BY
AMOUNT at
08/31/2012
INCOME (EXPENSES)
RECOGNIZED at 08/31/2012
TERMS
Loan agreement
(3-month Euribor plus 0.35%)
€40,000
€918,000
Loan agreement
(5% per annum)
US$62,000 (approx. €48,000)
ERE Australia
€8,507,000
Loan agreement
(5% per annum)
AUD 557,000 (approx. €438,000)
SA EXEL Industries
EMC Russia
€225,000
Loan agreement
(3-month Euribor plus 0.5%)
€4,000
SA EXEL Industries
ENA USA
€6,344,000
Loan agreement
(1-year Euribor plus 2.1%)
US$115,000 (approx. €88,000)
SA EXEL Industries
SC VERMOREL SRL €2,941,000
SA EXEL Industries
ERE USA
SA EXEL Industries
II - OTHER AGREEMENTS
COMPANIES CONCERNED
NATURE, PURPOSE, TERMS OF AGREEMENTS
SA KREMLIN REXSON
Repayment - under the "better fortunes" clause - on
debt waivers
HARDI INTERNATIONAL A/S
The Hardi Group’s net financial debt with respect to a
Danish bank is covered by a guarantee given by SA
EXEL Industries within the limit of an amount of DKK
100 million at 08/31/2012 (i.e. €13.4 million)
SAS MOREAU
INCOME (EXPENSES)
RECOGNIZED at 08/31/2012
€800,000
€(2,300,000)
Debt waiver with a "better fortunes" clause
III - PERSONS CONCERNED BY REGULATED AGREEMENTS
COMPANIES
CONCERNED
Patrick Ballu
Chairman of the
Board of
Directors
Guerric Ballu
Chief Executive Officer and
Director
Marc Ballu
Deputy Chief
Executive
Officer and
Director
Cyril Ballu
Deputy Chief
Executive
Officer
SC VERMOREL SRL
-
-
-
-
SA KREMLIN REXSON
Director
Chairman of the Board of Directors
-
-
HARDI INTERNATIONAL A/S
Chairman
Member of the Board
-
-
SAS MOREAU
-
-
-
-
ENA USA
-
-
-
-
108
CORPORATE GOVERNANCE
Directors and officers
of SA EXEL Industries
110
Audit Committee
111
Group Management and Strategy Committee
111
Offices and positions held
by each corporate officer
of EXEL Industries SA 
113
Auditors’ fees
113
Report by the Chairman of the Board of Directors 114
Statutory Auditors' report on the Chairman's report 120
109
Directors and officers of SA EXEL Industries
CHAIRMAN OF THE BOARD OF DIRECTORS
M. Patrick Ballu - Appointed as Chairman and Chief Executive Officer on September 13, 1980 and
subsequently reappointed, lastly by the AGM of January 25, 2011, for a term of office expiring at the end of
the AGM called to approve the 2016 financial statements.
The Board meeting of April 22, 2011 decided to modify corporate governance procedures involving a separation
of the powers of executive management. Pursuant to this change Patrick Ballu retained his functions as
Chairman of the Board of Directors.
CHIEF EXECUTIVE OFFICER AND DIRECTOR
Guerric Ballu - Appointed by the AGM of February 26, 2008 for a term of office expiring at the end of the AGM
called to approve the 2014 financial statements.
By decision of the Board meeting of April 22, 2011, and pursuant to the separation of executive management
powers, he thereupon assumed the functions of Chief Executive Officer.
DEPUTY CHIEF EXECUTIVE OFFICERS
Marc Ballu, Franck Ballu and Cyril Ballu - Appointed as Deputy CEOs by the Board meeting of October 26,
2005 for terms of office equivalent to those of the Chairman and Chief Executive Officer. Their appointments
were renewed by the Board of Directors' meeting of January 25, 2011 for terms of office equivalent to that of the
Chairman. Then, at the meeting of the Board of Directors held on April 22, 2011, their terms of office were
renewed.
BOARD MEMBERS
René Marchese - Appointed February 2, 1995 and reappointed February 24, 1998, February 19, 2004 and
January 25, 2010 whose current term expires at the end of the AGM called to approve the 2015 financial
statements.
EXEL SAS, represented by Marie-Pierre du Cray-Sirieix - a Company appointed Director by the AGM of
February 2, 1995, and subsequently reappointed, lastly by the AGM of January 25, 2011, for a term of office
expiring at the end of the AGM called to approve the 2016 financial statements.
Marc Ballu - Appointed by the AGM of January 24, 2012, for a term of office expiring at the end of the
AGM called to approve the 2017 financial statements.
INDEPENDENT DIRECTORS
Marie-Claude Bernal - Appointed by the AGM of January 24, 2012, for a term of office expiring at the end
of the AGM called to approve the 2017 financial statements.
Claude Lopez - Appointed by co-optation by the Board of Directors on April 11, 2012, to replace René
Marchese – outgoing. Claude Lopez was appointed for his predecessor’s remaining term of office, i.e. until the
end of the AGM called to approve the 2015 financial statements – subject to ratification by the next AGM
held on January 22, 2013.
110
Audit Committee
In accordance with article L 823-19 of the French Commercial Code, the company has opted for the Board of
Directors to assume the role of Audit Committee as well.
Since December 9, 2011, the Board of Directors' meeting has authorized the expansion of the Audit
Committee with the addition of Marie-Claude Bernal and decided that she would assure the chairmanship
of this committee, thus replacing René Marchese.
In addition, on April 11, 2012, the Board of Directors authorized the addition to the Audit Committee of
Claude Lopez.
This Committee is responsible notably for overseeing:

the process for producing financial information with reporting;

the efficiency of the internal control systems;

identification and audit of risk management;

the statutory audit by the Auditors of the separate parent company and consolidated financial
statements;

the independence of the Statutory Auditors.
Group Management and Strategy Committee
This Committee is comprised mainly of Managing Directors of Group subsidiaries. Its purpose is to examine
and make strategic decisions with respect to the major priorities to be adopted for the Group's development.
The members of the Group Management and Strategy Committee are as follows:
Patrick Ballu
- Chairman of the Board of Directors of SA EXEL Industries,
- Director of SA Kremlin Rexson,
- Chairman of Hardi International A/S;
Guerric Ballu
- CEO of the EXEL industries Group,
- Chairman of the Board of Directors of SA Kremlin Rexson,
- Representing the Chairman of EXEL Industries in SAS Berthoud Agricole, Caruelle Nicolas, CMC, EXEL
gsa, Préciculture, RAM Environnement, Sames Technologies and Tecnoma Technologies,
- Representing the Chairman of Kremlin Rexson in SAS API Technologies and SCM,
- Director (Member of the Board) of Agrifac Machinery BV;
Marc Ballu
- Group Director of Strategy and Development,
- Deputy CEO of SA EXEL Industries,
111
- CEO of SAS EXEL gsa,
- Representative of SA EXEL Industries, Director company of SA Kremlin Rexson;
Franck Ballu
- CEO of SAS Capagri;
Marie-Pierre du Cray-Sirieix
- Group General Counsel;
Jérôme Denormandie
- CEO of SAS Matrot Equipements;
Sten Kjelstrup
- CEO and President of Hardi International A/S,
- Representative of the Chairman of Hardi International A/S in SAS Hardi-Evrard and SAS Hardi Service;
Dominique Lagouge
- CEO of SA Kremlin Rexson,
- CEO of SAS API Technologies;
Pierre Nieuviarts
- CEO of SAS Herriau,
- CEO of SAS Moreau,
- Manager of the SCI subsidiaries of both these companies;
Cédric Perres
- CEO of SAS Sames Technologies;
Bertrand Pignolet
- CEO of SAS Tecnoma Technologies,
- CEO of SAS Préciculture,
- CEO of SAS CMC;
Sébastien Roche
CEO of SAS Berthoud Agricole;
Sylvain Rousseau
- Group CFO;
Daniel Tragus
- Vice-Chairman of Hardi International A/S,
- CEO of SAS Hardi-Evrard,
- Representative of SAS EXEL, Director company of SA Kremlin Rexson,
- Director (Member of the Board) of Agrifac Machinery BV;
Christophe Turpin-Invernon
- CEO of SAS Caruelle Nicolas,
- CEO of SAS RAM Environnement.
112
Offices and positions held by each corporate officer of EXEL
Industries SA
See page 32, paragraph 10.3
Auditors’ fees
Deloitte Group
Amount at
08/31/2012
Other auditors
Amount at
08/31/2011
%
%
Amount at
08/31/2012
%
Amount at
08/31/2011
%
Auditing services
Auditing, certification, examination of
the separate and consolidated
accounts
572,697
81%
536,913
89%
360,949
82%
305,634
95%
Other related services and audit
assignments
133,466
19%
67,744
11%
79,950
18%
14,525
5%
706,162
100%
604,657
100%
440,898
100%
320,159
100%
3,000
0%
0
0%
0
0%
0
0
0
0%
0
0%
0
0%
0
0%
3,000
0%
0
0%
0
0%
0
0%
709,162
100%
604,657
100%
440,898
100%
320,159
100%
Subtotal
Other services
Legal, tax, employee-related
assignments
Others
Subtotal
TOTAL
113
Report by the Chairman of the Board of Directors
ON THE CONDITIONS OF PREPARATION AND ORGANIZATION OF THE WORK OF THE BOARD OF
DIRECTORS AND INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES
To the shareholders,
As a supplement to our Annual Report and in accordance with the French Financial Security Act No. 2003706 of August 1, 2003 (as amended by Act No. 2008-649 of July 3, 2008, I hereby report to you on the
preparation and organization of the Board of Directors' work and the internal control and risk management
procedures implemented by our company. This Report will be submitted for approval to the Board of
Directors.
The Auditors will in turn present their observations on the internal control procedures with respect to the
preparation and processing of accounting and financial information in their special report issued for this
purpose and accompanying their report on the annual financial statements.
I - CONDITIONS OF PREPARATION AND ORGANIZATION OF THE BOARD'S WORK
COMPOSITION OF THE BOARD OF DIRECTORS
Our company is managed by a Board of Directors that currently has six members, each possessing at least one
share of the company in accordance with article 14 of the Articles of Association.
Our Board of Directors does not include any Director elected by employees but benefits from the experience of
two Independent Directors: Marie-Claude Bernal and Claude Lopez.
Directors are appointed for six-year terms that are renewed for periods of the same duration.
BOARD ROLE AND OPERATING PROCEDURES
Its traditional role
The Board of Directors sets the company's business priorities, ensures their implementation and performs the
controls and verifications it considers appropriate.
Subject to the powers expressly granted to shareholders' meetings and within the limits of the company's
corporate charter, the Board may address all matters pertaining to the proper management of the company
and settle all items of business relating thereto.
Operating procedures
The Board meeting of April 22, 2011 decided to modify corporate governance procedures by separating the
powers of executive management between a Chief Executive Officer (Directeur Général) and a Chairman of
the Board of Directors.
Under my Chairmanship our Board of Directors meets as often as the interests of the company require.
Board of Directors' meetings are called and chaired by me as the Chairman with responsibility for organizing
and overseeing the Board's work. I also ensure that corporate bodies effectively perform their functions.
Decisions by the Board are made in accordance with the conditions of quorum and majority voting
requirements provided for by law. In the event of a tie, the vote of the Chairman prevails.
In the fiscal year ended August 31, 2012, the Board of Directors met six times.
114
Decisions at these Board meetings were taken on the basis of a unanimous vote by Directors present or
represented.
AUDIT COMMITTEE ROLE AND OPERATING PROCEDURES
Membership
In accordance with article L 823-19 of the French Commercial Code, our company has opted for the Board of
Directors to assume the role of Audit Committee as well.
Since December 9, 2011, the Board of Directors' meeting has authorized the expansion of the Audit Committee
with the addition of Marie-Claude Bernal and decided that she would assure the chairmanship of this
committee, owing to her independence and her financial and accounting skills.
In addition, on April 11, 2012, the Board of Directors authorized the addition to the Audit Committee of
Claude Lopez.
At the same Board meeting, Claude Lopez was appointed a new Director by co-optation, replacing René
Marchese, outgoing Director.
This appointment will be ratified by the next AGM, to be held on January 22, 2013.
Its role and assignments
This Committee is responsible notably for overseeing:

the process for producing financial information with reporting;

the efficiency of the internal audit systems;

identification and audit of risk management;

the statutory audit by the Auditors of the separate parent company and consolidated financial
statements;

the independence of the Statutory Auditors.
Operating procedures
In the fiscal year ended 08/31/2012, the Audit Committee met on December 9, 2011, and April 11, 2012.
It is also meeting this coming Monday December 10, with the following agenda:

Approval of the Minutes of the meeting of the Audit Committee held on 04/11/2012;

Review and approval of the 2011/2012 annual results;

Review of the Announcement Letter of the 2011/2012 annual results;

The Statutory Auditors’ report;

Update on the procedure for disclosing quiet periods and the list of insiders;

Update on the Letters of Affirmation;

Update on the audit procedure;

Update on putting risk management in place.
The Audit Committee reported to the Board of Directors (acting as a collegial body) on the performance of its
missions and will do so at least twice year in connection with the half-year and annual financial closings
and immediately notify the Board of any difficulty encountered.
II - INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES
DEFINITION AND OBJECTIVES OF INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES
Internal control covers all systems adopted by executive management for the purpose of providing reasonable
115
assurance with respect to the:

The reality and effectiveness of transactions;

The reliability of reporting;

Compliance with laws and regulations in force;

Asset protection;

Risk management in all areas.
One of the purposes of the internal control risk management system is to prevent and effectively manage risks
associated with business operations of the company and its subsidiaries. Risk management covers not only
financial risks (exchange rates, interest rates, etc.) but also operational risks (IT, fraud, environmental,
employee-related, legal, online reputational risks, etc.).
As with all systems of control, it cannot however provide an absolute guarantee that such risks will be fully
eliminated.
ORGANIZATION OF INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES
The internal control and risk management environment
Our group is a pure player operating in a single business across three markets: farming, manufacturing and
retail consumers.
Our activities cover the design, manufacture and sale of spraying equipment through wholly-owned
manufacturing or sales subsidiaries, some of which also have in turn foreign distribution or manufacturing
subsidiaries.
Parties involved in internal control and risk management procedures
By virtue of its powers and responsibilities for exercising oversight and setting priorities, the Board of
Directors assures the primary role in the company's internal control and risk management system with the
assistance of the Audit Committee.
Executive Management of our Company is provided by a CEO in direct collaboration with the Chairman of
the Board of Directors. It is also assisted by three Deputy CEOs. These different executive officers devote
considerable time in the subsidiaries to ensure that their operations are effectively managed and to meet their
CEO.
Executive Management is vested with the broadest powers to act in all circumstances in the name of the
company. It exercises its powers within the limits set by the company's corporate charter and the powers
expressly granted by law to shareholders' meetings and the Board of Directors.
INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES
Within our subsidiaries
Internal controls for accounting and finance and risk management procedures exist within each subsidiary.
Within the guidelines set by the Group, each subsidiary has full autonomy with respect to marketing,
employee-related issues, finance and risk management.
Under the authority of a chief executive officer (Directeur Général) and as the subsidiary's executive officer
with responsibility for the day-to-day application of internal control and risk management procedures, the
subsidiary has all resources required to:

monitor its performance and management;

ensure effective risk management.
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Executive Management of the Group is responsible for the effectiveness of the controls put in place in the
subsidiaries and requires that they be strengthened if deemed necessary.
The organization of the Finance Department
The process of financial closings is organized on the basis of a schedule and plan established by the Group
for each of its subsidiaries.
Each subsidiary is responsible for producing its financial statements, drawing up its budget, annual accounts
and defining its cash flow requirements.
The Group's Corporate Finance Department is responsible for producing the consolidated financial statements
and exercising oversight over subsidiary reporting. This department also ensures Group procedures are
properly applied by subsidiaries for consistency in financial statements and conducts audits when it deems
necessary.
The Corporate Finance Department coordinates cash management decisions for each subsidiary through the
Group's centralized cash pooling system.
Organization of risk management
To ensure the sustainability of its operating activities, the Group must ensure that the appropriate risk
prevention and risk management procedures are in place.
To this purpose, Group companies have identified the main risks incurred in connection with their activities.
Procedures to manage certain risks have been adopted in consequence. On this basis, the Group has adopted
solutions to limit the financial impact of risks notably through Group-level insurance programs and managed
by the Group’s Legal Department.
To supplement risk management, Executive Management has decided to put in place working groups charged
with drawing up an exhaustive list of risks, with a hierarchy of priorities.
With respect to the environment, the Group's policy is to promote sustainable development and its strategy for
innovation consequently incorporates this objective.
Within each subsidiary and through the products we manufacture, we are increasingly focusing on
improving operator safety and preserving the environment. These two objectives in effect constitute integral
parts of all manufacturing specifications for our products and equipment.
Quality control checks are performed on our products and equipment at the different stages of production.
To ensure that its activities comply at all times with applicable laws and regulations, the Group is assisted by
its Legal Department that works, when necessary, with specialized lawyers.
The Legal Department centralizes and coordinates the handling of legal matters for all Group subsidiaries. It
also manages and monitors disputes, in collaboration with the subsidiaries concerned.
Safeguarding intellectual and industrial property that constitutes a major Group strength represents a key
priority. These property rights are subject to rigorous oversight with the support of outside lawyers.
III - Other procedures (provided for in the French Act 2008-649 of July 3, 2008 - Art. 26)
CORPORATE GOVERNANCE
EXEL Industries Group is a closely-held corporation with members of one family holding the majority
interest and serving as corporate officers.
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The Group is committed to the principles of ethical business conduct and good corporate governance:
Because of its size and specific characteristics, our Group does not apply a specific code of corporate governance.
Its corporate governance organization nevertheless applies the principles of selected recommendations of the
corporate governance code of Middlenext, the independent French association representing listed SMEs and MidCaps.
Accordingly, the Board of Directors has six members including two Independent Directors according to the
criteria of the Middlenext Corporate Governance Code.
The Chairman of the Board of Directors and Chief Executive Officer of our company as well as the other
executive officers do not have employment contracts in addition to their corporate offices. Furthermore, they
do not have special supplemental retirement benefits ("Top Hat" plans) or options to subscribe for shares or
special severance benefits payable if they cease to exercise their functions (golden parachutes).
The Chief Executive Officer of our company is vested sufficiently broad powers to fully exercise responsibility
over strategy, with the assistance of a Strategic Committee and a Director of Development and Strategy. At the
same time, he benefits from the necessary expertise provided by the Chairman of the Board of Directors and
members of the Audit Committee and Strategy Committee.
For a number of years already, the Chairman has made decisions for ensuring a smooth transition in
management when the time arises.
The Board meeting of April 22, 2011 decided to modify corporate governance procedures involving a
separation of the powers of executive management.
The Executive Management has since been assured by Guerric Ballu in direct collaboration with Patrick
Ballu, Chairman of the Board of Directors.
As for shareholders, they continue to be kept reasonably informed about major foreseeable risks that could
potentially jeopardize the continuing operations of the company and its subsidiaries.
Finally, our company has a solid understanding of its shareholder base and seeks to strengthen long-term
shareholder commitment (notably by granting double voting rights for shares held more than four years).
RULES FOR SHAREHOLDER PARTICIPATION IN MEETINGS
All shareholders are entitled to participate in Meetings. However to participate, vote by mail or be represented
at Meetings, shareholders must no later than three business days before the Meeting by midnight (Paris time):

if a holder of registered shares, be listed in the registered shareholders account maintained by the
company;

or, if a holder of bearer shares, provide a participation certificate (attestation de participation) issued
by the bank or broker managing these shares confirming their status as shareholders on the meeting
date.
Shareholders who do not personally attend the Meetings may choose one of the following three options:

grant a proxy to another shareholder or his or her spouse;

send a proxy form to the company without specifying the proxy's name;

vote by mail.
DETERMINING FINANCIAL COMPENSATION AND BENEFITS FOR CORPORATE OFFICERS
The principles and rules set by the Board of Directors to determine compensation and benefits to be granted to
corporate officers are based on criteria relating to their respective skills, experience and responsibilities.
118
In addition, being among the company's main shareholders, certain of the corporate officers have a financial
interest through the growth of their personal assets that consist in large part of EXEL Industries shares they
directly or indirectly hold and dividend payments.
The Chairman of the Board of Directors
December 10, 2012
119
Statutory Auditors' report on the Chairman's report
ISSUED IN ACCORDANCE WITH ARTICLE L 225-235 OF THE FRENCH COMMERCIAL CODE FISCAL YEAR
ENDED AUGUST 31, 2012
To the Shareholders,
In our capacity as Statutory Auditors of EXEL Industries and in accordance with the provisions of article L.
225-235 of the French Commercial Code (Code de Commerce), we hereby present our report on the report
prepared by the Chairman of your company in accordance with article L. 225-37 of the French Commercial
Code for the fiscal year ended August 31, 2012.
It is the Chairman's responsibility to prepare, and submit to the Board of Directors for approval, a report on
the internal control and risk management procedures implemented by the company and containing the other
disclosures required by article L. 225-37 of the French Commercial Code, particularly in terms of corporate
governance.
It is our responsibility to:

Report to you on the information contained in the Chairman's report with respect to the internal
control and risk management procedures relating to the preparation and processing of accounting and
financial information; and

Certify that the report contains the other information required by article L. 225-37 of the French
Commercial Code, while specifying that we are not responsible for verifying the fairness of this other
information.
We have carried out our work in accordance with the professional standards and practices applicable in
France.
120
Information concerning the internal control and risk management procedures relating to the
preparation and processing of financial and accounting information
This standard requires us to perform procedures to assess the fairness of the information set out in the
Chairman's report on the internal control and risk management procedures relating to the preparation and
processing of financial and accounting information. These procedures mainly consist of:

Obtaining an understanding of the internal control and risk management procedures relating to the
preparation and processing of financial and accounting information, on which the information
presented in the Chairman's report is based, as well as reviewing supporting documentation;

obtaining an understanding of the work performed to prepare this information, as well as reviewing
supporting documentation;

taking note of the valuation process put in place and assessing the quality and adequacy of its
documentation, as regards the information related to assessing the internal control and risk
management procedures;

establishing whether major weaknesses in the internal control procedures relating to the preparation
and processing of accounting and financial information that we have identified in carrying out our
work are appropriately covered in the Chairman’s report.
On the basis of these procedures, we have no matters to report in connection with the information given on
the internal control and risk management procedures relating to the preparation and processing of financial
and accounting information, contained in the Chairman's report, prepared in accordance with article L.
225-37 of the French Commercial Code.
Other disclosures
We hereby certify that the Chairman's report includes the other disclosures required by article L. 225-37 of
the French Commercial Code.
Reims and Villeurbanne, December 19, 2012
The Statutory Auditors
SA PHILIPPE VENET – GRANT THORNTON
DELOITTE & ASSOCIES
Philippe Venet
Dominique Natale
121
INFORMATION ON THE
COMPANY AND ITS SHARE
CAPITAL
Statutory information
on EXEL Industries
Information on EXEL Industries'
share capital
Securities giving access to the share capital
Information on pledges
Shareholders’ agreement
Dividends
123
127
127
127
127
127
122
Statutory information on EXEL Industries
COMPANY NAME:
EXEL Industries
HEADQUARTERS:
54 rue Marcel Paul, 51200 Epernay - France
LEGAL FORM:
A French public limited company (Société Anonyme) with a Board of Directors. Amendment of the Articles of
Association (Statuts) to comply with the provisions of Act 2001-420 of May 15, 2001 (New Economic
Regulations Act).(see articles 13, 18, 19, 20 and 21 of the Articles of Association).
NATIONALITY:
French
DATE OF INCORPORATION:
August 4, 1952
TERM
Ninety-nine (99) years effective from its date of entry in the Trade and Companies Register (Registre du
Commerce et des Sociétés) or until August 3, 2051 barring early liquidation or extension.
CORPORATE CHARTER (ARTICLE 3 OF THE ARTICLES OF ASSOCIATION):
"The company's corporate purpose is to, in France and in any other country, directly or indirectly, conduct
research, manufacture and market, equipment, materials and services used mainly for industrial or
consumer agriculture, as well any commercial, industrial, financial, securities or real estate transactions
relating directly or indirectly to the purposes stated above or any similar and related activities contributing
thereto and that directly or indirectly contribute to the company's continuing operations and development".
FRENCH TRADE AND COMPANY REGISTER
RCS REIMS B 095 550 356
APE CODE:
2830Z
PLACE WHERE DOCUMENTS AND INFORMATION CONCERNING THE COMPANY CAN BE CONSULTED:
The Articles of Association, minutes of meetings and other corporate, legal or accounting documents may be
consulted at the Group's registered office: Epernay (51200) - 54 rue Marcel Paul, (the Legal and Finance
Departments), subject to the terms and times provided for by legislation in force concerning shareholders'
rights to information.
FISCAL YEAR:
123
The fiscal year commences on September 1 and ends on August 31 of each year.
DELIBERATIONS OF THE BOARD OF DIRECTORS
(ARTICLE 17 OF THE ARTICLES OF ASSOCIATION)
"17.1 Directors are called to Board meetings by all available means (including electronic messaging, remote
transmission, videoconferencing, etc.) and including orally.
All
Directors
may
attend,
participate
and
vote
in
Board
meetings
through
videoconferencing
and
telecommunications means under conditions provided for by regulations in force at that time.
A record of attendance is maintained that is signed by Directors participating in the Board meeting".
AGMS
(ARTICLE 23 OF THE ARTICLES OF ASSOCIATION):
"Shareholders' meetings are called and conduct proceedings according to procedures defined by statutes and
applicable regulations.
They are to be held at the registered office or at any other venue indicated in the notice of meeting.
The General Meeting is chaired by the Chairman of the Board of Directors or by the Director temporarily
appointed for this purpose or, barring this, by a Vice Chairman. If the Chairman, the Director temporarily
appointed for that purpose or the Vice Chairmen are absent at the same time, the Meeting is then chaired by
the Director designated by the Board or, barring this, a person selected by the Meeting.
Proceedings of the meeting are recorded in minutes signed by the Officers of the Meeting.
Subject to restrictions provided for by law or resulting from its application, any shareholder may attend
general meetings and proceedings in person or through a representative, regardless of the number of his or her
shares, subject to providing proof of identity, and provided that no payments are due on said shares.
The right to attend the shareholders meetings is evidenced by an accounting entry showing the number of
shares in the name of the shareholder of record (or the intermediary of record for the account) on the third
business day preceding the meeting at midnight (Paris time):

either in the registered share accounts maintained by the company or its agent;

or in bearer share accounts maintained by an authorized intermediary; in this latter case, the
corresponding
book
entry
must
be
evidenced
by
a
certificate
of
attendance
(attestation
de
participation) issued by the authorized intermediary that is to be attached to the voting form or the
proxy or the request for an admission card (carte d'admission) mentioning the name of the
shareholder.
However, the Board of Directors may reduce or set aside these time requirements provided that this is to the
benefit of all shareholders.
Any shareholder may vote by mail using a form that may be obtained according to the conditions indicated
by the meeting notice.
A shareholder may only be represented by his/her spouse, or by another shareholder holding a valid proxy.
Votes
in
Meetings
can
be
cast
through
all
means
(notably
electronic
means,
teletransmission,
videoconferencing, etc.), in accordance with the conditions established by regulations and set forth in the
meeting notice".
124
TRANSFER AND TRANSMISSION OF SHARES
(ARTICLE 10 OF THE ARTICLES OF ASSOCIATION):
No provisions of the Articles of Association imposed restrictions on the transfer of shares.
DOUBLE VOTING RIGHTS
(ARTICLE 12 OF THE ARTICLES OF ASSOCIATION):
shares that are fully paid up for which it is evidenced that they have been held in registered form in the
name of the same shareholder for at least four years, carry a double voting right. This four- year period
commences when the shares are recorded in registered form". 
The double voting right was introduced by the Extraordinary General Meeting of May 26, 1997 (Resolution
12).
The double voting rights ceases to exist for any share converted to bearer form or on transfer, excluding
transfers from one registered shareholder to another pursuant to inheritance or a gift to a qualifying family
member (see applicable laws and regulations).
APPROPRIATION AND DISTRIBUTION OF EARNINGS
(ARTICLE 25 OF THE ARTICLES OF ASSOCIATION)
"The income statement summarizes revenue and expense items of the period. It presents, after deducting
allowances for depreciation, amortization and provisions, the profit or loss of the period.
From this profit, less accumulated losses of prior periods, when applicable, are deducted".
"At least 5% to be appropriated to reserves as required by law. This obligation remains in force until the
reserve amount equals 10% of the common stock and resumes when, for any reason, the reserve amount falls
below this percentage."
"And all amounts appropriated to reserves required by law".
"The balance, plus profits brought forward, constitutes the distributable earnings for the year. This amount is
available to the General Meeting, pursuant to a proposal by the Board, for distribution in part or in full as
dividends, allocation to all reserves, repayment of the capital or to be carried forward to retained earnings".
"The shareholders' meeting, called to approve the financial statements for the period, may grant shareholders
the choice of receiving a dividend in the form of cash or shares for all or part of the dividend to be
distributed".
"Reserves available to the General Meeting may be used on its decision, for the payment of dividends. Such
decision expressly indicates the reserve accounts from which the amounts are drawn".
SHARE REPURCHASE PROGRAM
In light of regulations in force, in accordance with article L 225-209 of the French Commercial Code (Code
de Commerce), and the Information Memorandum, the Annual General Meeting of January 24, 2012 granted
the Board of Directors an authorization for a period of 18 months from the date of this Meeting to repurchase
shares of the company in accordance with the following terms and conditions:
These share buybacks may be carried out in accordance with the limits provided for by laws and regulations
applicable at the time of said transactions and in accordance with the purposes and procedures set forth
below.
The maximum number of shares purchased by the company under this authorization may not exceed 10% of
its current share capital.
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These shares may be acquired on one or more occasions and through any means for the following purposes:

Market-making or share liquidity services provided by an Investment Service Provider through a
liquidity agreement in compliance with the conduct of business rules recognized by the French
securities market regulator, the AMF;

Purchasing shares to be retained for future use for payment or exchange in connection with possible
acquisitions;

The cancellation of all or part of shares thus acquired;

Employee stock option plans (or other share grants to employees) or for debt securities convertible into
shares.
These shares may be acquired, sold or transferred by any means, on or off market, including involving the
use of any derivative financial instruments. The entire share repurchase program may be carried out through
block trades.
The maximum purchase price may not exceed €80 per share, subject to adjustments linked to corporate actions
that may be implemented. In a scenario involving the purchase of 5% of the shares, the maximum amount paid
would be €27 million.
Shares thus purchased may be held, sold or transferred.
An authorization for the company to buy back its shares is submitted for vote by the next General Meeting of
January 22, 2013.An Information Memorandum to this purpose has been filed with the AMF. Once approved
by the shareholders, this authorization will cancel and supersede the authorization granted by the Ordinary
General Meeting of January 24, 2012.
IDENTIFIABLE BEARER SHARES (TITRES AU PORTEUR IDENTIFIABLE)
The Company may, in accordance with applicable laws and regulations (article 263-1 of the Act of July 24,
1966) at its own expense and at any time, request the following information from the entity providing
clearing services for its securities, the name, nationality, date of birth or year of incorporation and address of
owners of securities that confer, immediately or in the future, voting rights in its shareholders' meetings,
along with the number of equity securities held by each, and, where applicable, any restrictions on said
securities.
EXCEEDING THRESHOLDS DEFINED IN THE ARTICLES OF ASSOCIATION
(ARTICLE 10 OF THE ARTICLES OF ASSOCIATION)
 "In addition to those thresholds provided for by applicable laws and regulations, any shareholder, a natural
person or legal entity, who acquires a proportion of the share capital or voting rights equal to 2.5%, or whose
holdings fall below or rise above this threshold or any multiple thereof, must notify the Company of the total
number of shares of voting rights possessed within 15 days after crossing this threshold by registered letter
with acknowledgment of receipt".
If the crossing of this threshold is not reported to the company within 15 days, the sanctions provided for by
applicable laws and regulations will then apply and namely, failure to report crossing a threshold shall
result in the loss of voting rights for the shares exceeding the percentage that should have been reported, for a
period of two years after this disclosure obligation has been met.
126
Information on EXEL Industries' share capital
SHARE CAPITAL
(ARTICLE 6 OF THE ARTICLES OF ASSOCIATION)
"The share capital amounts to €16,969,750 divided into 6,787,900 shares all with a par value of €2.5.
The shares are all fully subscribed, paid up and allocated among shareholders in proportion to their rights".
Securities giving access to the share capital
None.
Information on pledges
To the best of our knowledge, none of the shares making up EXEL Industries' share capital are pledged.
Shareholders' agreement
There are no shareholders’ agreements.
Dividends
FY
Dividend per share
2008/2009
€0.37
2009/2010
€0.64
2010/2011
€0.49
DIVIDEND POLICY:
Over the coming years, the company's policy is to pay dividends representing approximately one quarter of
consolidated net income.
LIMITATION PERIOD:
In accordance with the provisions of French law, dividends not claimed within five years are time-barred
and shall be paid over to the French State.
CHANGES IN CAPITAL STOCK DURING THE LAST FIVE YEARS
There have been no increases in share capital in the last five years and the amount of share capital thus
remains unchanged at €16,969,750.
The Extraordinary General Meeting of February 26, 2008 approved a 2-for-1 stock split dividing the par
value of the share by two which had no impact on the amount of the share capital.
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TEXT OF RESOLUTIONS
SUBMITTED TO THE ORDINARY GENERAL MEETING
OF JANUARY 22, 2013
128
RESERVED FOR THE ORDINARY GENERAL MEETING
Resolution one
The Shareholders, after having reviewed the different reports and documents and notably the "Registration
Document - Annual report", the Chairman of the Board of Directors' report on the organization of internal
controls and risk management procedures as well as the Statutory Auditors' reports, approve these reports and
the consolidated financial statements for the fiscal year ended August 31, 2012, as presented as well as the
operations reflected in these financial statements and summarized in these reports, and showing a net
consolidated profit of €26,100,000.
Resolution two
The Shareholders approve the separate annual financial statements for the fiscal year ended August 31,
2012, as presented as well as all operations reflected in these financial statements and summarized in these
reports, and showing a net profit of €14,734,134.
Resolution three
The Shareholders decide that the net profit for the fiscal year of €14,734,134 shall be appropriated as
follows:

Distribution of a total dividend of €6,516,384 or €0.96 per share (1), it being noted that the Legal
Reserve is already fully funded;

Carry forward to retained earnings of the remaining profit of €8,217,750;

Thereby increasing the amount of retained earnings to €105,390,967.
Furthermore, the Board requests that the General Meeting approves the appropriation to the "Retained
Earnings" account of the amount corresponding to dividends not paid on treasury shares held by EXEL
Industries.
The Shareholders furthermore duly note that dividends paid for the last three periods were as follows:
FY year
Dividend per share
2008/2009
€0.37
2009/2010
€0.64
2010/2011
€0.49
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Resolution four
The Shareholders, having reviewed the Statutory Auditors' special report on regulated agreements governed by
article L. 225-38 et seq. of the French Commercial Code, hereby approve in succession each of the
transactions presented in this report.
Resolution five
The Shareholders on that basis fully discharge all Directors from any liabilities with respect to the
performance of their duties over the year ended.
Resolution six
The Shareholders set a total amount for attendance fees to be granted to Directors of €80,000 for the fiscal year
ending August 31, 2013. The Board of Directors shall meet in consequence to fix the allocation of this amount
among its members.
Resolution seven
The Shareholders, after having reviewed the Board of Directors' report, authorize the Board, in accordance with
the provisions of articles L 225-209 et seq. of the French Commercial Code and other applicable laws and
regulations, to have the company buy its own shares for a period of eighteen months from the date of this
meeting.
These share buybacks may be carried out in accordance with the limits provided for by laws and regulations
applicable at the time of said transactions and in accordance with the purposes and procedures set forth
below.
The maximum number of shares purchased by the company under this authorization may not exceed 10% of
its current share capital.
These shares may be acquired on one or more occasions and through any means for the following purposes:

Market-making or share liquidity services provided by an Investment Service Provider through a
liquidity agreement in compliance with the conduct of business rules recognized by the French
securities market regulator, the AMF;

Purchasing shares to be retained for future use for payment or exchange in connection with possible
acquisitions;

The cancellation of all or part of shares thus acquired;

Employee stock option plans (or other share grant to employees) or for debt securities convertible into
shares.
These shares may be acquired, sold or transferred by any means, on or off market, including involving the
use of any derivative financial instruments. The entire share repurchase program may be carried out through
block trades.
The maximum purchase price may not exceed €80 per share, subject to adjustments linked to corporate
130
actions that may be implemented. In a scenario involving the purchase of 5% of the shares, the maximum
amount paid would be €27 million.
Shares thus purchased may be held, sold or transferred.
This authorization replaces the authorization granted by the Ordinary General Meeting held on January 24,
2012.
Resolution eight
The Ordinary General Meeting ratifies the appointment of  Claude Lopez, Director co-opted by a decision of
the Board of Directors on April 11, 2012, for the remaining term of office of his outgoing predecessor – i.e.
until the AGM called to approve the financial statements for the period ended in 2015.
Resolution nine
The Shareholders grant all powers to the holder of an original, a short-form certificate or a copy of the
minutes of this Meeting to carry out all formalities that may be required.
(1) Dividend to be payable as of January 25, 2013, directly by CM-CIC Securities.
131