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Pargesa Holding SA Pargesa Holding SA 11, Grand-Rue Pargesa Holding SA CH – 1204 Genève T +41 (0) 22 817 77 77 [email protected]

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Pargesa Holding SA Pargesa Holding SA 11, Grand-Rue Pargesa Holding SA CH – 1204 Genève T +41 (0) 22 817 77 77 Info@Pargesa.Ch ANNUAL REPORT 2014 Pargesa Holding SA Pargesa Holding SA 11, Grand-Rue www.pargesa.ch Pargesa Holding SA CH – 1204 Genève T +41 (0) 22 817 77 77 [email protected] Pargesa Holding SA Annual report 2014 Pargesa Holding SA Annual report 2014 2 Pargesa Holding SA Annual report 2014 Contents Contents Structure and key data 4 Board of Directors, Senior Management and Auditor 6 Letter from the Chairman 8 01 Business report 11 Introduction 12 Highlights 12 Group shareholdings 14 2014 consolidated results 15 Adjusted net asset value 18 Proposals to the Annual General Meeting of 5 May 2015 19 Company organisation 19 02 Main shareholdings 20 GBL 21 Imerys 22 Lafarge 24 Total 26 GDF Suez 28 Pernod Ricard 30 SGS 32 Other GBL assets 34 03 Corporate Governance report 37 04 Compensation Report 49 05 Consolidated financial statements 53 06 Parent company financial statements 125 3 Pargesa Holding SA Annual report 2014 Structure and key data Structure and key data Organisation chart at 31 December 2014 * Pargesa Holding SA 50.0% 56.5% 21.1% 3.0% 2.4% 7.5% 15.0% * shareholdings are expressed as a percentage of capital Main shareholdings key data at 31 December 2014 31.12.2014 % of % flow- 2014 shareholders Direct Total voting through net profit equity Company Currency interest % interest % rights interest (1) (CHF millions) (CHF millions) GBL EUR 50.0 % 50.0 % 52.0 % 50.0 % 1’063 17’178 Imerys EUR 56.5 % 71.9 % 28.3 % 384 2’970 Lafarge EUR 21.1 % 29.3 % 10.6 % 174 18’584 Total EUR 3.0 % 2.7 % 1.5 % 3’885 89’779 GDF Suez EUR 2.4 % 2.4 % 1.2 % 3’795 59’561 Pernod Ricard (2) EUR 7.5 % 6.9 % 3.8 % 1’234 13’975 SGS CHF 15.0 % 15.0 % 7.5 % 629 2’327 Umicore EUR 12.4 % 12.4 % 6.2 % 208 2’050 (1) flow-through interest assessed at the level of Pargesa (2) financial year ending on June 30 4 Pargesa Holding SA Annual report 2014 Structure and key data Global and per-share data CHF millions 2010 2011 2012 (1) 2013 2014 Consolidated shareholders’ equity, Group share 8'671 7'482 7'230 7'545 7’725 Operating income 465.8 342.5 346.0 250.5 339.5 Non-operating income 0.1 (407.4) 59.2 143.4 297.4 Consolidated net profit, Group share 465.9 (64.9) 405.2 393.9 636.9 Gross dividend 230.2 217.5 217.5 223.5 192.2 (2) Shares entitled to dividend 84’638’370 84’638’370 84'640'770 84'643'980 84’659’190 Market capitalisation at year-end 6’720 5’205 5'303 6'086 6’523 Adjusted net asset value at year-end 8’448 6’686 7'648 8'820 8’876 CHF per share 2010 2011 2012 (1) 2013 2014 Share price year-end 79.40 61.50 62.65 71.90 77.0 5 high 94.85 90.70 68.20 72.25 82.90 low 65.30 58.65 51.20 61.10 70.60 average 79.82 74.37 61.66 67.07 76.55 Consolidated shareholders’ equity, Group share 102.45 88.40 85.42 89.14 91.25 Adjusted net asset value at year-end 99.82 78.99 90.36 104.20 104.85 Operating income (3) 5.50 4.05 4.09 2.96 4.01 Non-operating income (3) 0.00 (4.82) 0.70 1.69 3.51 Consolidated net profit, Group share (3) 5.50 (0.77) 4.79 4.65 7.52 Gross dividend 2.72 2.57 2.57 2.64 2.27 (2) (Average) gross yield 3.4 % 3.5 % 4.2 % 3.9 % 3.0 % (1) certain amounts have been adjusted to take account of the amendments to IAS 19 concerning the reporting of employee benefits and the correction of an error concerning the tax bases of Imerys tangible assets (2) proposed to the Annual General Meeting (3) calculated on the weighted average of the number of shares outstanding during the year Market Data 160 150 140 130 120 110 100 90 80 70 60 50 40 2010 2011 2012 2013 2014 Market price CHF Flow-through adjusted net asset value CHF Relative SPI CHF 5 Pargesa Holding SA Annual report 2014 Board of Directors Board of Directors Chairman Paul DESMARAIS Jr Chairman of the Board and Co-Chief Executive Officer, Power Corporation of Canada Vice-Chairmen Baron FRÈRE * Chairman of the Board of Directors, Frère-Bourgeois SA Gérald FRÈRE Executive Director, Frère-Bourgeois SA André DESMARAIS Deputy Chairman, President and Co-Chief Executive Officer, Power Corporation of Canada Directors Marc-Henri CHAUDET Attorney-at-Law Bernard DANIEL Member of the International Committee of the Red Cross (ICRC) Assembly Victor DELLOYE Director and Secretary General, Frère-Bourgeois SA and its subsidiary Compagnie Nationale à Portefeuille SA (CNP) Paul DESMARAIS III Vice President, Power Corporation of Canada Cedric FRÈRE Director, Frère-Bourgeois SA Ségolène GALLIENNE Director, Frère-Bourgeois SA Barbara KUX Company Director Michel PÉBEREAU Honorary Chairman of the Board of Directors, BNP Paribas Michel PLESSIS-BÉLAIR Vice-Chairman, Power Corporation of Canada Gilles SAMYN Executive Director, Compagnie Nationale à Portefeuille SA (CNP) Amaury de SÈZE Vice-Chairman of the Board, Power Financial Corporation Arnaud VIAL Senior Vice-President, Power Corporation of Canada * not seeking re-election 6 Committees, Auditor, Pargesa Holding SA Annual report 2014 Senior Management Committees, Auditor, Management Audit Committee Chairman Marc-Henri CHAUDET Members Barbara KUX Michel PLESSIS-BÉLAIR Gilles SAMYN Amaury de SÈZE Compensation Committee Chairman Bernard DANIEL Members Barbara KUX Michel PLESSIS-BÉLAIR Gilles SAMYN Amaury de SÈZE Auditor Deloitte SA Management Paul DESMARAIS Jr Executive Director Baron FRÈRE * Executive Director Gérald FRÈRE ** Executive Director Pierre HAAS Advisor to the Chairman Arnaud VIAL Managing Director Andrew ALLENDER Financial Director and Secretary of the Board of Directors, Deputy Managing Director Mark KELLER Chief Accountant Fabienne RUDAZ BOVARD Treasurer * up to the end of the Annual General Meeting on 5 May 2015 ** from the end of the Annual General Meeting on 5 May 2015, if re-elected 7 Pargesa Holding SA Annual report 2014 Letter from the Chairman Letter from the Chairman Dear Shareholders, Since the 2007-2008 financial crisis, economic trends and growth levels have varied widely across regions. Some countries, like the US and UK, have already returned to growth. They introduced robust fiscal and monetary stimulus policies that have led, among other things, to a substantial rise in employment. The eurozone was slower to react and is taking longer to recover. Disparities within the single currency area have also emerged, due to the varying pace and scope of the reforms put into place by the individual countries to boost competitiveness. The driver of worldwide growth in 2014 was once again emerging markets, despite the slowdown in growth rate in China. Amid increasing geopolitical tensions, falling oil prices, which are now at a five-year low, and heightened volatility on the currency and commodities markets, the IMF recently revised down its growth forecast for 2015 to 3.5 %. The global economic outlook continues to be weighed down by fundamental weaknesses in certain regions. In the eurozone, the combination of the announcement in January by the ECB of a major quantitative easing programme, low oil prices, and the weakening of the euro, particularly against the dollar, should contribute to recovery. However, some macroeconomic risks remain, and a number of reforms are still required, and investments need to pick up. In this environment, equity markets trends were contrasted across different regions. Valuations remain high in general, however, buoyed by signs of returning confidence, robust balance sheets and continuing low interest rates. 2014 was another busy year for the Pargesa Group. As a professional shareholder with a long-term approach to investing, we continued to play an active role in the governance and strategic decision- making of the companies in which we invest. We actively supported the merger between Lafarge and Holcim, to create a world leader in construction materials. I would like to take this opportunity to highlight the key role played by Lafarge’s Chairman and CEO Bruno Lafont, who worked closely with Lafarge’s major shareholders and independent directors to garner the unanimous support of the Board of Directors in order to ensure a successful merger of equals with Holcim. Last year, we also supported the acquisition by Imerys of S&B, an international player in industrial minerals. It is my pleasure to wish a warm welcome to the Kyriacopoulos family, who have been the controlling shareholders of S&B for more than 80 years and with whom we share the same core business values. Under the terms of the transaction, the Kyriacopoulos family will become an Imerys shareholder and will be involved in the company’s future development. I look forward to the upcoming appointment of Ulysses Kyriacopoulos to the Imerys Board of Directors – his contribution will be of great value. In an ongoing effort, initiated in 2012, to achieve greater diversification across sectors and regions, we continued to gradually rebalance our portfolio in 2014 – albeit less intensively than in the two previous years. GBL disposed of an additional 0.6 % of Total’s share capital, as well as almost all of its holding in Suez Environnement following the early conversion of 85 % of the bonds exchangeable for shares of that company issued in September 2012. GBL also expanded its incubator-type investments, increasing its stake in Umicore from 5.6 % to 12.4 %, and continued to develop the “financial pillar”.
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