CRITERIA CAIXACORP, S.A.

Transcription

1 REGISTRATION DOCUMENT ANNEX IX OF COMMISSION REGULATION (EC) No 809/2004 OF 29 April 2004 CRITERIA CAIXACORP, S.A. This Registration Document was registered in the official registers of the CNMV on 22 October 2010

2 CONTENTS RISK FACTORS 1 1. RISK FACTORS SPECIFIC TO THE ISSUER OR ITS INDUSTRY 1 2. RISKS ASSOCIATED WITH THE ACTIVITY OF THE INVESTEES 4 3. RISKS ASSOCIATED WITH THE BUSINESS SECTOR 7 4. RISKS ASSOCIATED WITH THE SHAREHOLDER STRUCTURE 7 1. RESPONSIBLE PERSONS All persons responsible for the information given in the Registration Document and, as the case may be, for certain parts of it, with, in the latter case, an indication of such parts. In the case of natural persons, including members of the issuer s administrative, management or supervisory bodies, the name and function of the person; in the case of legal persons, the name and registered office A declaration by those responsible for the Registration Document that, having taken all reasonable care to ensure that such is the case, the information contained in the Registration Document is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. As the case may be, a declaration by those responsible for certain parts of the Registration Document that, having taken all reasonable care to ensure that such is the case, the information contained in the part of the Registration Document for which they are responsible is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import STATUTORY AUDITORS Names and addresses of the issuer s auditors for the period covered by the historical financial information (together with their membership in a professional body) If auditors have resigned, been removed or not been re-appointed during the period covered by the historical financial information, indicate details if material RISK FACTORS INFORMATION ABOUT THE ISSUER History and development of the issuer BUSINESS OVERVIEW 17

3 5.1 Principal activities ORGANIZATIONAL STRUCTURE If the issuer is part of a group, a brief description of the group and the issuer s position within it If the issuer is dependent upon other entities within the group, this must be clearly stated, together with an explanation of this dependence TREND INFORMATION Include a statement that there has been no material adverse change in the prospects of the issuer since the date of its last published audited financial statements Other relevant information PROFIT FORECASTS OR ESTIMATES ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES Names, business addresses and functions in the issuer of the following persons and an indication of the principal activities performed by them outside the issuer where such activities are significant with respect to the issuer: 56 a) Members of the administrative, management or supervisory bodies; 56 (b) partners with unlimited liability, in the case of a limited partnership with a share capital Administrative, management and supervisory body conflicts of interest MAJOR SHAREHOLDERS To the extent known to the issuer, whether the issuer is directly or indirectly owned or controlled and by whom, the nature of such control, and the measures in place to ensure that such control is not abused A description of any arrangements, known to the issuer, the operation of which may at a subsequent date result in a change in control of the issuer FINANCIAL INFORMATION CONCERNING THE ISSUER S ASSETS AND LIABILITIES, FINANCIAL POSITION AND PROFITS AND LOSSES Consolidated historical financial information (from audited data) Financial statements Auditing of historical annual financial information Age of latest financial information Legal and arbitration proceedings 80 2

4 11.6 Significant change in the issuer s financial or trading position RELEVANT CONTRACTS Protocol of relations between la Caixa and Criteria CaixaCorp THIRD PARTY INFORMATION, STATEMENTS BY EXPERTS AND DECLARATIONS OF INTEREST Report attributed to a person as an expert Third party information DOCUMENTS SUBMITTED 81 3

5 RISK FACTORS Set forth below are certain risks which, if they occurred, could affect the business, results or financial condition of Criteria CaixaCorp, S.A. (hereinafter referred to interchangeably as Criteria CaixaCorp, Criteria, the Company or the Issuer ). These are not the only risks Criteria CaixaCorp could face in the future. There may be other risks of which the Company is not currently aware or that it does not consider material that may affect its business, operations or financial condition in the future. 1. RISK FACTORS SPECIFIC TO THE ISSUER OR ITS INDUSTRY The Company is subject to general and specific risks arising from its business and the implementation of its investment strategy. These risks are detailed below: Market risk could significantly affect the value of the Company A high percentage of the market value of the Company s assets (gross asset value, hereinafter GAV) relates to investments in listed securities. The Company is therefore exposed to the market risk generally associated with listed companies. The listed securities in which the Company invests are exposed to fluctuations in price and trading volumes due to factors beyond the Company s control, so that the concurrence of some of these factors could significantly affect the Company and its business performance, adversely affecting, among other things, the price and liquidity of the Company s share. On the other hand, the results of the listed companies in which Criteria CaixaCorp invests, the provisions such companies may record, the provisions Criteria itself may record and the return on the investments in these companies could affect the market price of Criteria. A significant portion of the Company s investments is concentrated in securities included in the Ibex-35, in addition to investments in securities that are included in indices in other countries, including Hong-Kong, Mexico and Austria. Stock indices in general, including the Ibex-35, are going through a period of great volatility. The Company expects that a significant portion of its investments will remain invested in Ibex-35 securities and securities listed in other markets and no assurance can be given that these securities will increase in value. Likewise, Criteria maintains a part of its portfolio invested in companies in the financial sector, which at present is subject to various regulatory changes that could affect said companies financial position and stock price. Valuation of the Company s GAV At 30 June 2010, 75% of the Company s GAV relates to interests in publicly traded companies and so is subject to changes in the different markets, as indicated in the first risk described in this section 1. The remaining 25% of the GAV therefore relates to interests in unlisted companies. As the Company has the technical and human resources to value the different businesses, the valuations are done internally, using valuation methods commonly accepted by the market (including discounted cash flows, dividend discount model, etc.), without the endorsement of independent experts. For these purposes, it should be noted that the valuations used at 30 June 2010 are those made at 31 December 2009 with respect to the interests in unlisted companies, except in the case of Adeslas and Agbar, which have been valued at 30 June 2010.

6 The use of debt could adversely affect the Company s results As of 30 June 2010 the financial liabilities of the Company and its subsidiaries amounted to EUR 16,013 million, while the aggregate pro forma net debt position in the non-consolidated financial statements of Criteria CaixaCorp and holding companies at that date was EUR 6,058 million. Details of the calculation of the pro forma net debt are given in section 5.1.c) below. The Company plans to present a Bond Issuance Programme of up to EUR 2,000 million. No assurance can be given that the Company will have access to the capital it needs in order to finance its current business or make further acquisitions, or that such access will be available on attractive terms, which could limit the Company s ability to execute its strategy. Use of debt would entail an increase in the Company s finance costs and an increase in the volatility of the return on its investments, furthermore entailing greater exposure to market fluctuations. Changes in interest rates may affect both finance costs and the market price of the securities in which the Company invests and, consequently, the Company s own share price. Strategic risk The Company s ability to carry out its strategy will depend on factors such as correct identification of investment and divestment opportunities or the Company s ability to exercise influence over investees. Changes in strategy could affect the value of the Company s shares. Future profits and attractive returns will be conditional upon correct implementation of the Company s future strategy, which will depend to a large extent on the skill of its managers in identifying investment and divestment opportunities. In particular, the Company s strategy centres on increasing the relative weight of investments in the financial and insurance industries, although there can be no assurance that attractive opportunities will arise in those industries or that, if they do, the Company will be able to take advantage of them. The fact that Criteria CaixaCorp has an equity interest or board representation in certain investees may prevent it from seizing investment opportunities that may arise in companies in the same industry, or in related parties. The impediments to investment may be motivated, among other factors, by the application of competition law or by obstacles arising from relations with current or potential partners that limit investment in other entities. On the other hand, the Company s strategy is based on the exercise of significant influence over investees through board representation and collaboration in strategy and project development and implementation. Most of the value of the Company s portfolio consists of interests in listed companies, so the acquisition of significant shareholdings in these companies by third parties or the issuance of ordinary shares by these companies (implying a dilution of Criteria CaixaCorp s interest) could result in a loss or decrease of the Company s ability to exercise such influence or the need to make further investments in order to maintain said ability. Both the Company and its controlling shareholder have entered into agreements with third parties in relation to some of their listed investees; and the Company invests in listed companies through companies controlled jointly with other entities. The other shareholders and partners in these investments may have interests and goals that do not coincide with those of Criteria CaixaCorp, which could prevent Criteria CaixaCorp from implementing its strategy. Furthermore, the Company may acquire minority interests in listed or unlisted companies or invest in operations led by other investors. These acquisitions or investments could be significant and could entail greater risks as a result of the Company s relative lack of influence. The Company 2

7 might also have less management information about these investments, which would limit its ability to influence the investees business decisions. Identifying and implementing investment strategies or changing strategy entails risks, including those detailed in the following paragraph and the rest of this section, which could adversely affect the Company s future results and profitability. Investments in geographical areas subject to greater risks The Company s investment strategy could include the acquisition of interests in companies operating in markets, such as Asia, America or Central and Eastern Europe, that are subject to risks different from, and possibly greater than, those typical of the Company s local market. Such risks include country risk, monetary and tax risk, regulatory risk, volatility/illiquidity, corporate information integrity and legal environment. The existence of these risks could adversely affect the chances that the investments made in these markets will be successful. The Company is exposed to currency risk through its investments. The Company is directly exposed to currency risk through its investments denominated in currencies other than the euro, which are exposed to exchange rate fluctuations. Exchange rate fluctuations could affect the Company s ability to pay dividends by adversely affecting its results and financial position. Concentration risk The Company has a relatively concentrated equity portfolio, due to: (i) industry concentration; (ii) concentration in certain investments; (iii) concentration in a particular geographical market. Liquidity risk The lack of liquidity of some investments may affect the Company adversely. The Company s investment strategy may lead it to hold significant interests in listed or unlisted companies whose liquidity may be less than that of smaller interests, independently of the chosen divestment procedure. The sale of a significant interest in a listed company to a single acquirer could require that the acquirer make a bid for the entire share capital of the company concerned. Said acquirer may also, depending on the industry and the transaction, be required to obtain (industry or competitionrelated) administrative consents or authorisations. These factors could increase the financial effort for the acquirer and the time required to complete the transaction, or even prevent the sale (if the necessary authorisations are not obtained), which could limit the number of potential acquirers and adversely affect the liquidity of the investments held by the Company at present. Placing a significant interest in a listed company in the market with several different acquirers could require a discount in the selling price, depending on market conditions and the characteristics of the security concerned, among other factors. On the other hand, some of the Company s current or future investments, especially investments in unlisted entities, are and could be subject to significant exit barriers. The Company could be forced to hold its interest in these investees for a substantial period before being able to sell them, or only be able to sell them to non-shareholders under the provisions of the articles of association or shareholder agreements, for instance. 3

8 Lastly, the shareholder agreements the Company has used in the past and that it may continue to use in the future to channel some of its investments in listed companies through companies in which it invests with other partners could also, to differing degrees, limit the Company s ability to make certain divestments. The existence of high exit barriers could entail holding a certain investment even when conditions for selling it are optimal, or not selling the investment even though it is not yielding the expected returns or results. The Company may invest in financial derivatives The Company has traded in financial derivatives in the past and may continue to trade in exchangetraded and over-the-counter (OTC) derivatives for hedging purposes, as a complement to investment or divestment strategies, or as (speculative) trading strategies. Unless conceived as hedging instruments, financial derivatives entail risks additional to those of cash investments and are especially sensitive to changes in the price of the underlying (normally, listed securities). Risks arising from the purchase and sale of equity investments Although the Company carefully analyses the available information before making an investment decision and tries to obtain the usual contractual protections against the risks of each investment, it cannot give any assurance that the available information will reveal all the risks associated with the investment or that it will be possible to make a proper valuation or obtain appropriate contractual protection against said risks, especially as regards investment in unlisted securities. On the other hand, due diligence does not guarantee the success of transactions that depend on a variety of factors, many of which are beyond the Company s control. Furthermore, the acquisition of significant shareholdings in listed or unlisted companies may require administrative consents or authorisations that may not be obtained or only under conditions that prevent the acquisition or make it unattractive. Lastly, the Company may be obliged to give representations and warranties in favour of third parties in relation to the sale of some of its equity investments. If such representations and warranties were found to be incorrect, the buyer of the assets could start legal proceedings against the Company. Credit risk This is the risk that the Company will fail to meet its contractual obligations. Since 27 July 2009, Criteria CaixaCorp has been assigned a long-term credit rating of A with stable outlook and a short-term rating of A-1 by Standard & Poor s Ratings Services. Since 8 July 2010, Criteria CaixaCorp has been assigned a credit rating of A2 (stable outlook) by Moody s Investors Services España, S.A. A lowering of the credit rating of the Company s main shareholder, la Caixa, could result in a downgrade of the Company s own credit rating. La Caixa has a long-term credit rating of (i) AA- assigned by Standard & Poor s Ratings Services in June 2010; (ii) A+ assigned by Fitch in September 2010; and (iii) Aa2 assigned by Moody s in March RISKS ASSOCIATED WITH THE ACTIVITY OF THE INVESTEES Criteria CaixaCorp is subject to general and specific risks arising from the nature and characteristics of its investments. 4

9 Risks arising from the business sectors of investees The Company is indirectly subject to the risks associated with the business sectors in which its investees operate. The degree of exposure will depend on the relative weight of the investments in the Company s Gross Asset Value (GAV). These risks include the risks arising from the Company s investments in companies that operate in highly regulated industries, such as energy, telecommunications, finance or insurance, as well as the operational risks faced by investees. Significant changes in the industries in which investees operate may affect their market value, adversely affecting the Company s future results. Risks arising from the geographical markets in which the investees operate The Company is indirectly subject to the risks of the markets in which its investees operate or invest, the degree of exposure depending to a greater or lesser extent on the weight of the investments in the Company s GAV and results. Some of the companies in the current investment portfolio have significant operations and assets in Latin America or Africa and are therefore exposed to the risks specific to these regions. Risks arising from the investees regulatory environment The Company is indirectly subject to the regulatory environment in which its investees operate, the degree of exposure depending to a greater or lesser extent on the weight of the investments in Criteria CaixaCorp s GAV. Some of the investees (those operating in the financial and insurance industries, for example) are also subject to prudential supervision by certain national and foreign regulatory bodies, so any change in application of the regulations or rules for the exercise of said bodies supervisory powers could have an adverse effect on the Company. Given that the Company has interests in entities that operate in highly regulated industries such as the financial industry and the insurance industry, the acquisition by Criteria CaixaCorp of a percentage of shares representing a significant shareholding in any of said entities could be subject to authorisation by, or the obtaining of a no-objection certificate from, the competent regulatory authorities. Risks arising from the levels of debt incurred by investees The Company is indirectly exposed to the risks arising from the level of debt existing in its investees, the degree of exposure depending to a greater or lesser extent on the weight of the investments in the Company s GAV. Any failure by these entities to perform their obligations could adversely affect their business, thus harming the Company s results and profitability. Similarly, high levels of borrowing or significant fluctuations in interest rates would increase these companies finance costs, adversely affecting their results and their ability to pay dividends, thus harming the Company s results. Lastly, high levels of debt in investees could adversely affect returns on the investment or even prevent recovery of the investment in extreme cases of default or bankruptcy. Risks of the insurance and financial business Through its interest in insurers, the Company is exposed to the risks characteristic of the insurance business. By definition, the insurance business is exposed to certain exogenous factors beyond the Company s control (chance). There may therefore be relatively significant changes in the actuarial 5

10 assumptions (e.g. claims rate and longevity, among others) used in calculating the theoretical cost of premiums and provisions, possibly leading to significant changes in the Company s forecasts. Furthermore, the insurance industry is subject to close supervision by national and international regulators. Fiscal regulations also impact very significantly on the performance of the insurance business, as the tax incentives/disincentives associated with a product very significantly affect the product s performance (pensions and unit linked products, among others). Because of their special characteristics, life insurance-savings products are highly exposed to interest rates, given that if interest rates fall, the insurance company may be unable to achieve the necessary returns on its investments (assets) to cover the fixed-value increase in its technical provisions (liabilities). Although at present there are mechanisms for minimising the risks of financial asset-liability management, the possibility that the insurance companies in which Criteria CaixaCorp has interests will in the future be forced to record extraordinary provisions to cover the shortfall in provisions cannot be ruled out. On the other hand, the Company s investments in the financial industry are subject to market risk, including interest rate and exchange rate risk, which in turn depends on certain macroeconomic variables beyond the Company s control. Imbalances between the cost of liabilities and the return on assets of the Company s investees could adversely affect the return on the Company s investments, although there are mechanisms for hedging said risks. The investees may be involved in corporate transactions, which may adversely affect the Company The Company may be indirectly involved in corporate transactions such as mergers, acquisitions or splits affecting some of its investees. To be effective these transactions depend on various factors, including market conditions, competition, investor approvals, regulatory approvals, regulatory restrictions or changes in business lines, among others. There is no guarantee that the corporate transactions affecting the Company s investees will be completed successfully nor that they will be favourable to the investees, in which case the Company could be adversely affected. The Company is exposed to currency risk through its portfolio of investee companies The Company is indirectly exposed to currency risk, a risk to which most of the Company s investees are subject due to their transactions, investments or assets denominated in currencies other than the euro, resulting in an exposure to exchange rate fluctuations. Decreases in market values or impacts on the investees results due to exchange rate fluctuations could affect the investees ability to pay dividends, thus adversely affecting the results and financial condition of the Company. Risks arising from the existence of litigation in the investees The Company is exposed to the risks its investees may incur as a result of the existence of legal proceedings arising from the conduct of their business and any corporate transactions in which they may be involved. The outcome of these legal proceedings may entail substantial costs for the investees, adversely affecting their results, their ability to pay dividends and, consequently, their value. 6

11 3. RISKS ASSOCIATED WITH THE BUSINESS SECTOR The increasing size and maturity of other investment companies may reduce the Company s investment opportunities The Company competes with other investment companies and other market participants in the active pursuit of profitable investment opportunities. The competitors could be or become substantially larger organisations and could have greater financial, technical or advertising resources than are available to the Company, or they could have a lower cost of capital and access to cheaper sources of financing, all of which could create competitive disadvantages with respect to investment opportunities. Furthermore, in its search for investment opportunities in international markets the Company could encounter local competitors whose greater knowledge of the local market or whose positioning in the target market allows them to obtain certain synergies that may not be available to the Company, giving rise to competitive disadvantages for the Company and adversely affecting the objectives of its investment strategy (because it may have to pay higher prices for its investments or because it may lose some investment opportunities). 4. RISKS ASSOCIATED WITH THE SHAREHOLDER STRUCTURE The interests of the controlling shareholder may not coincide with the interests of the rest of shareholders or of the Company itself Caja de Ahorros y Pensiones de Barcelona (hereinafter la Caixa ), as the controlling shareholder of Criteria CaixaCorp, has decisive influence on all matters that require a majority of shareholders, including dividend distribution, appointment of directors (subject to the limitations imposed by the right of proportional representation under Spanish law), capital increase or reduction, and amendment of the articles of association; and the shareholder-nominated directors appointed at the proposal of la Caixa constitute a majority on the Board of Directors of Criteria CaixaCorp. To comply with the recommendations of the Unified Code of Corporate Governance, the Company and la Caixa have signed an internal protocol of relations (hereinafter, the Protocol ), whose purpose is to facilitate, within legal limits, a proper level of coordination that will redound to the common benefit and interest of the la Caixa group and the Company. The Protocol establishes, among others things, certain procedures for the approval of the Company s investments and divestments. It gives the Company the necessary mechanisms to ensure that any conflicts of interest that may arise in relations with the controlling shareholder are properly managed, but no assurance can be given that such conflicts will be eliminated or that they will be solved in the manner most satisfactory to minority shareholders. Related-party transactions Given the nature of the controlling shareholder s business, the fact that the Company belongs to the group of companies controlled by la Caixa and the complementary nature of the businesses carried on by the Criteria CaixaCorp group and the la Caixa group (in the area of bank insurance, for example), a large number of related-party transactions take place. In related-party transactions there is a risk that transactions may not be carried out at market prices and that the decisions to be made at any given moment may not be based on strictly professional criteria. The Protocol establishes that when the same service or activity can be provided by a la Caixa group company or a third party, the Company will evaluate the options, putting not only its corporate interests 7

12 (understood as the interests of Criteria CaixaCorp) but the interests of the la Caixa group before any other interests, the interests of la Caixa taking preference, subject to other principles stated in the Protocol (transparency and maximum diligence, among others). Limitations arising from the regulatory environment in which the controlling shareholder operates The controlling shareholder, la Caixa, as a financial institution, operates in a regulated environment and is subject to the requirement to comply, at group level, with Bank of Spain regulations on levels of capital and equity (regulations which affect, among other things, the levels of investment that la Caixa and its subsidiaries, including Criteria CaixaCorp, are able to undertake) and with regulations on cross-border activity by credit institutions, under which significant investments by Criteria CaixaCorp in credit institutions and specialised credit institutions will in certain circumstances be subject to prior authorisation by the Bank of Spain. On the other hand, the new capital requirements that will be imposed on financial institutions by the agreements of the Basel Committee on Banking Supervision of 12 September 2010 (Basel III) could affect the investment strategy that the controlling shareholder of Criteria, la Caixa, is able to pursue through the Company. In addition, la Caixa is a savings bank subject to the legislation applicable to savings banks in Catalonia. Under this legislation, certain of the Company s decisions (such as strategic investments/divestments) could require approval by the authorities or preclearance by the Board of Directors or Executive Committee of la Caixa, subject to a favourable report by its Investment Committee. 8

13 1. RESPONSIBLE PERSONS 1.1 All persons responsible for the information given in the Registration Document and, as the case may be, for certain parts of it, with, in the latter case, an indication of such parts. In the case of natural persons, including members of the issuer s administrative, management or supervisory bodies, the name and function of the person; in the case of legal persons, the name and registered office. Mr. Gonzalo Gortázar Rotaeche, in his capacity as CEO/Managing/Director, acting in the name and on behalf of Criteria CaixaCorp, S.A. (hereinafter referred to interchangeably as Criteria CaixaCorp, the Company or the Issuer ), accepts responsibility for the content of this registration document (hereinafter, the Registration Document ), in accordance with the authorisation granted by the Company s Board of Directors at its meeting on 29 July A declaration by those responsible for the Registration Document that, having taken all reasonable care to ensure that such is the case, the information contained in the Registration Document is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. As the case may be, a declaration by those responsible for certain parts of the Registration Document that, having taken all reasonable care to ensure that such is the case, the information contained in the part of the Registration Document for which they are responsible is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. Mr. Gonzalo Gortázar Rotaeche, in the name and on behalf of Criteria CaixaCorp, declares that, having taken all reasonable care to ensure that such is the case, the information given in this Registration Document is, to the best of his knowledge, in accordance with the facts and does not omit anything likely to affect its import. 2. STATUTORY AUDITORS 2.1 Names and addresses of the issuer s auditors for the period covered by the historical financial information (together with their membership in a professional body). The individual and consolidated financial statements for 2008 and 2009 were audited by Deloitte, S.L., whose registered office is at Plaza de Pablo Ruiz Picasso 1, Torre Picasso, Madrid, and have been filed in the appropriate public registers of the Spanish National Securities Market Commission (CNMV). Deloitte, S.L. is registered in the Madrid Companies Register on Sheet no. M-54,414, Folio 188, Volume 13,650, Section 8, and in the Official Register of Auditors (ROAC) under registration number S If auditors have resigned, been removed or not been re-appointed during the period covered by the historical financial information, indicate details if material. Deloitte, S.L. has not resigned or been removed from its functions as auditor of Criteria CaixaCorp during the last two financial years. The General Meeting of Shareholders of the Company held on 19 May 2010 approved the reelection of Deloitte, S.L. as auditors for the 2011 financial year. 9

14 3. RISK FACTORS See Section I. Risk Factors. 4. INFORMATION ABOUT THE ISSUER 4.1 History and development of the issuer Legal and commercial name of the issuer Company name: CRITERIA CAIXACORP, S.A. Commercial name: Criteria CaixaCorp./ Criteria TAX IDENTIFICATION NUMBER (C.I.F.): A INDUSTRY CLASSIFICATION (CNAE): Place of registration of the issuer and its registration number The Company is registered in the Barcelona Companies Register in Volume 37,883, Folio 123, Sheet no. B-41,232 (before Sheet 103,614), Entry no Date of incorporation and length of life of the issuer, except where indefinite The Company was incorporated under the name Grupo de Servicios, S.A. for an indefinite period of time through a public deed granted before the Barcelona notary Mr. Eduardo Blat Gimeno on 12 December 1980 and recorded in said notary s record book as deed number 2,375. The Company changed its company name to GDS-Grupo de Servicios, S.A. in a public deed granted before the Barcelona notary Mr. Antonio- Carmelo Agustín Torres on 22 December 1983 and recorded in said notary s record book as deed number 5,813. The Company adapted its articles of association to current company law through a public deed granted before the Barcelona notary Mr. Ladislao Narváez Acero on 1 June 1992 and recorded in said notary s record book as deed number 1,124. On 1 June 2000, GDS-Grupo de Servicios, S.A. carried out the merger by absorption of CaixaHolding, S.A., a dormant company, and adopted the latter s company name. Said merger was executed through a public deed granted before the Barcelona notary Mr. Tomás Giménez Duart on 11 July 2000 and recorded in said notary s record book as deed number 4,011, giving rise to entry number 35ª on the sheet open in the Company s name at the Companies Register in Barcelona. The Company changed its company name from CaixaHolding to the current name, Criteria Caixacorp, on 19 July 2007 at the decision of its sole shareholder. Said sole shareholder s decision was executed through a public deed granted before the Barcelona notary Mr. Tomás Giménez Duart on 2 August 2007 and recorded in said notary s record book as deed number 3,511, giving rise to entry number 56 on the sheet open in the Company s name at the Companies Register in Barcelona. 10

15 4.1.4 Domicile and legal form of the issuer, legislation under which the issuer operates, country of incorporation, and address and telephone number of its registered office (or principal place of business if different from its registered office). Criteria CaixaCorp, the parent of the Criteria CaixaCorp group, has its registered office at Avinguda Diagonal 621, Barcelona It is a Spanish company and has the legal form of a public limited company and so is governed by the Law on Corporations (Ley de Sociedades de Capital), the consolidated text of which was ratified by Royal Decree- Law 1/2010 of 2 July. The Company was incorporated in Spain and the telephone number of its registered office is (+34) Since 2007 the shares representing the whole of the Company s share capital have been admitted to trading on the continuous market of the stock markets of Madrid, Barcelona, Valencia and Bilbao. The majority shareholder of Criteria CaixaCorp is Caja de Ahorros y Pensiones de Barcelona (hereinafter, la Caixa ), which at present has 79.45% of the Company s share capital. la Caixa is a financial institution subject to Bank of Spain regulation and supervision and to compliance, at group level, with capital regulations, which among other things affect the permitted levels of investment for financial institutions. Consequently, the investments made by Criteria CaixaCorp (as part of the la Caixa group) are indirectly subject to the limitations established by Bank of Spain Circular 3/2008 of 22 May for the la Caixa group. Other regulations that may influence Criteria CaixaCorp s investments, on account of its close ties with la Caixa, are Law 26/1988 of 29 July on Discipline and Intervention of Credit Institutions and Royal Decree 1245/1995 of 14 July on standards for the creation of banks, cross-border activity and other issues relating to the legal regime of credit institutions, in its current wording. la Caixa is, moreover, a savings bank subject to the provisions of Legislative Decree 1/1994 of 6 April, implementing the consolidated text of Laws 15/1985 of 1 July, 6/1989 of 25 May, and 13/1993 of 25 November on Catalan savings banks, passed by the Catalan Parliament, in their current wording. In addition, la Caixa is subject to the provisions of Royal Decree-Law 11/2010 of 9 July on the governing bodies and other aspects of the legal regime of savings banks, To comply with national and regional legislation on savings banks, the Board of Directors and Executive Committee of la Caixa (both of which are reported to by the Investment Committee) shall exercise the necessary high-level control over the strategic investments and divestments of Criteria CaixaCorp to prevent or minimise any adverse impacts they may have on la Caixa s solvency or eligible capital Any recent events particular to the issuer which are relevant to the evaluation of the issuer s solvency The main events that have taken place in the course of the issuer s business during 2009 and this year to date, including any that might be relevant to the evaluation of its solvency, are described below: 11

16 - Backing of the transaction between Gas Natural and Unión Fenosa At its meeting in July 2008, the Board of Directors of the Company resolved to back the acquisition of 45.3% of Unión Fenosa by Gas Natural and the concomitant public tender offer for the rest of Unión Fenosa s share capital. In connection with the financing of this transaction, on 28 March 2009 Gas Natural successfully completed a capital increase of EUR 3,502 million, in which Criteria CaixaCorp disbursed EUR 1,313 million, corresponding to its proportional share of ownership. During June 2009, the General Meetings of Gas Natural and Unión Fenosa approved the merger plan previously prepared by the two companies boards of directors in April of that year. The merger was completed in September 2009, giving the Company a 36.43% interest in Gas Natural. As of 30 June 2010, the interest of Criteria CaixaCorp in the share capital of Gas Natural was 35.69%. - Payment of final dividend for 2008 On 7 May 2009, the Ordinary General Meeting of Shareholders of the Company approved the payment of a final dividend for 2008 in the gross amount of EUR 0.06 per share. This final dividend, added to the interim dividends already paid during 2008, brings the total dividend for 2008 to EUR 0.21 per share (EUR million). - Reinforcement of the shareholding in the Portuguese bank Banco BPI ( Banco BPI ) and signing of strategic collaboration agreement The Company further increased its interest in Banco BPI in the first half of 2009 in order to support the bank and as part of its strategy to increase its weight in financials. During this period the Company acquired a further 0.72% of Banco BPI, bringing its interest at 30 June 2010 to 30.10%. On 1 October 2009, la Caixa and BPI signed a Strategic Collaboration Agreement to serve companies operating in Spain and Portugal. The collaboration agreement has involved opening two specialised centres in the businesses segment. This agreement strengthens the cooperation between the two financial institutions, which together have one of the largest branch networks specialising in businesses that operate in the Iberian Peninsula (as of December 2009, 80 centres belonging to la Caixa and 54 belonging to BPI). - Signing of preferred partnership agreement with controlling shareholder of Erste Group Bank ( EGB ) and increase in shareholding On 4 June 2009, the Company signed a preferred partnership agreement with the controlling shareholder of Erste Group Bank ( Erste ), ERSTE Foundation, under which the Company may increase its interest up to 10% of the capital without restriction and exceed said percentage up to 20% by mutual agreement with ERSTE Foundation. At the same time, la Caixa and the Company signed an agreement with Erste Group Bank under which the Company is granted a preferential right to participate in investments in which Erste Group seeks a co-investor. Criteria s investment in EGB is intended to be 12

17 long-term, aimed at creating value by jointly identifying banking business opportunities in areas of business and commercial cooperation. During 2009, Criteria increased its interest in the share capital of Erste Group Bank from 4.90% to 10.1%. This increase was accomplished mainly through subscription to the capital increase carried out during November, entailing for Criteria a disbursement of EUR 635 million. Criteria subscribed 36% of said capital increase through the acquisition of subscription rights to purchase shares of Erste Group Bank, owned by ERSTE Foundation, for the symbolic amount of 1 euro. This transaction took place within the framework of the agreements signed on 4 June 2009: (i) (ii) Preferred Partnership Agreement with the controlling shareholder of Erste Group Bank, ERSTE Foundation, which regulates their relationship as shareholders of Erste Group Bank, along with other business collaboration agreements between the two banking groups. The preferred partnership agreement gives each entity access to customers in the other s national market. The planned collaboration will allow la Caixa to serve the 10.5 million of its customers that have specific business interests in Central and Eastern Europe, and Erste Group Bank to access retail and corporate customers in Spain. The agreement also allows Criteria to increase its interest up to 10% of capital without restriction and exceed said percentage up to 20% by mutual agreement with ERSTE Foundation. Agreement between la Caixa, Criteria and Erste Group Bank to establish certain areas of business and commercial cooperation, specially focused on their customers (Intended Cooperation Agreement and Coinvestment Partnership Agreement). In this agreement Criteria is granted a preferential right to participate in investments in which Erste Group Bank seeks a co-investor. (iii) Partnership agreement between the la Caixa Foundation and ERSTE Foundation (Memorandum of Understanding Foundations) with the aim of collaborating in cultural and welfare projects, through the exchange of ideas and experiences in the areas of integration, culture and social development, and so exploring opportunities for joint action. - Signing of strategic investment agreement with The Bank of East Asia Limited (BEA) and increase in shareholding. On 22 June 2009, the Company signed a Strategic Investment Agreement with BEA under which the Company may increase its interest up to a maximum of 20%. At the same time, the Company and la Caixa signed a strategic collaboration agreement with BEA under which BEA will be the Company s exclusive vehicle for investment in banks and financial institutions in the Asia Pacific region. This same agreement is intended to maximise each company s sales and business opportunities. On the same date, in connection with the above agreement, a memorandum of understanding was signed between the la Caixa Foundation and The Bank of East Asia Charitable Foundation Limited to explore and carry out initiatives in the area of 13

18 corporate social responsibility and to contribute to the development of the people and communities in which the two groups operate. On 30 December 2009, Criteria signed an agreement with BEA to subscribe to a large part of a capital increase, thus increasing Criteria s stake in BEA from 9.81% to 14.99%, with an investment of HKD 3,698 million (EUR 331 million). This capital increase was subscribed on 14 January 2010, so that as of 30 June 2010 the Company held 14.99% of the share capital of BEA. - Sale of 1% of the Company s interest in Telefónica, S.A. and cancellation of financial hedging contracts During the first half of 2009, the Company acquired 47 million shares of Telefónica (1% of the share capital), subject to financial contracts, for an investment of EUR 689 million. The market risk of this interest is hedged. During June 2009 the Company sold 47 million shares (1% of Telefónica s share capital), with a net consolidated gain of EUR 265 million (EUR 215 million on an individual basis). In addition, during the first half of 2010 the financial hedging contracts linked to part of the Telefónica portfolio, representing 1.03% of the interest in Telefónica as of December 2009, were cancelled. As of 30 June 2010, the interest of Criteria CaixaCorp in Telefónica was 5.04%. - Credit rating of the Company by Standard & Poor s Rating Services On 27 July 2009, the rating agency Standard & Poor s Ratings Services assigned the Company, for the first time, a long-term rating of A with a stable outlook and a shortterm rating of A-1. S&P attributed its decision to the Company s conservative and stable capital structure, its good financial flexibility and the composition and quality of its portfolio of investee companies. It also valued very positively the fact that the Company s main shareholder is la Caixa, which has a long-term credit rating of (i) AA- assigned by Standard & Poor s Ratings Services in June 2010, (ii) A+ assigned by Fitch in September 2010, and (iii) Aa2 assigned by Moody s in March 2010, reinforcing the Company s financial strength and flexibility. - Agreement with Investindustrial to take a 50% stake in the company that owns the Port Aventura theme park. On 10 September 2009, the Company notified the CNMV of the agreement it had reached with Investindustrial, under which Investindustrial would subscribe to a capital increase in the amount of EUR 94.8 million in the company that owns the Port Aventura theme park, making Investindustrial the owner of 50% of said company s share capital, while the remaining 50% remains in the hands of Criteria CaixaCorp. On 4 December 2009, the Company notified the CNMV of the completion of this transaction on the stated terms. - Signing of preliminary agreement between the Company and Suez Environnement Company, S.A. ( SE ) in relation to their interest in Sociedad General de Aguas de Barcelona, S.A. On 22 October 2009, the Company notified the CNMV of the signing of a preliminary agreement between the Company and SE in relation to their interest in Sociedad General de Aguas de Barcelona, S.A. ( Agbar ), whereby they decided to reorient their strategic interests in the group health insurance business and in the water management and environmental sector. 14

19 Among other things, the Company and SE agreed to promote a tender offer and delisting by Agbar at a price of EUR 20 per share, with subsequent cancellation of the own shares thus acquired. Once said tender offer had been completed and Agbar had been taken out of trading, the Company would sell to SE as much of its interest in Agbar, held directly and indirectly through Hisusa-Holding de Infraestructuras y Servicios Urbanos, S.A. ( Hisusa ), as would be necessary to bring SE s interest in Agbar to 75.01%, whereupon the Company and SE would reorganise their shareholdings in Agbar so as to channel all of them through Hisusa. At the same time, it was agreed that the shareholder agreements between the Company and SE that regulated their joint control of Agbar would be extinguished once the abovementioned transactions had been executed. On 15 January 2010, the Company notified the CNMV of the signing of the definitive agreement between the Company and SE in which the Company undertook to sell the necessary shares of Agbar and Hisusa to SE, it being established that the agreement would be executed once the tender offer and delisting of Agbar was concluded. On 7 June 2010, following the settlement of the tender offer and delisting by Agbar and in accordance with what had been agreed between the Company and SE, the Company, through SegurCaixa, S.A., de Seguros y Reaseguros, sold to SE a direct and indirect ownership interest in Agbar equivalent to 24.50% of Agbar s share capital for a total amount of EUR million, which is the result of valuing the shares of Agbar at EUR 20 per share. The sale of 24.5% of the interest in Agbar and the acquisition of 99.77% of the share capital of Adeslas generated consolidated profit after tax of EUR 162 million. Given that SE will contribute to Hisusa the whole of its direct ownership interest in Agbar, Hisusa will hold 99.04% of the shares of Agbar. After this, SE holds 75.74% of Hisusa (75.01% indirect interest in Agbar), while Criteria holds 24.26% of Hisusa (24.03% indirect interest in Agbar). Furthermore, Criteria and SE have signed a Hisusa and Agbar shareholders agreement, which will regulate their relations with respect to these two companies based on the new distribution of shares. - Signing of preliminary agreement between the Company and Malakoff Médéric and subsequent acquisition of Adeslas. On 22 October 2009, the Company notified the CNMV of the signing of a preliminary agreement between Criteria and SE, under which Criteria would acquire the 54.79% interest held by Agbar in Adeslas; in addition, on the same date, Criteria signed a preliminary agreement with Malakoff Médéric to acquire its 45% interest in the share capital of Adeslas. On 15 January 2010, the Company notified the CNMV of the signing of definitive agreements with Agbar and Malakoff Médéric, each separately, under which the Company undertook to acquire the shares of Adeslas held by these two companies. On 7 June 2010, through SegurCaixa, S.A. de Seguros y Reaseguros, the Company completed the acquisition of the interests of Agbar and Malakoff Médéric in Adeslas. The total amount paid was EUR 1,193.3 million for 99.77% of the share capital of Adeslas. - Payment of an interim dividend for