CONTENTS #02 #01 #04 #06 #08 #10 #12. Governance. International presence Market data. Financial information

Transcription

1 Annal report 2014

2 CONTENTS #01 #02 #04 Chairman s message Profi le Governance #06 #08 #10 MPI in brief International presence Key Figres Market data #12 Financial information This docment is a free translation into English of the French Docment de référence (hereafter referred to as Reference Docment ) that was fi led with the Atorité des marchés fi nanciers (the AMF ) on April 28, It has not been approved by the AMF. This translation has been prepared solely for the information and convenience of shareholders of MPI. It is not a binding docment. No assrances are given as to the accracy or completeness of this translation, and MPI assmes no responsibility with respect to this translation or any misstatement or omission that may be contained therein. In the event of any ambigity or discrepancy between this translation and the French Reference Docment, the French version shall prevail.

3 Chairman's message Dear Shareholders, Dring the corse of fi scal year 2014, the economic environment has affected MPI in two different ways: while the decline in oil prices has had a negative impact on Seplat s income and valation, the change in exchange rates has reslted in a positive revalation of the Grop s assets, particlarly its cash and cash eqivalents. Given this volatile environment, its large cash holdings mean that MPI retains all of its strategic mobility. Jean-François Hénin Chairman of the Board of Directors ANNUAL REPORT

4 PROFILE The MPI Grop operates throgh its eqity interests in Nigeria, mainly in Seplat Petrolem Development Company Plc (Seplat) and the projects it has ndertaken, primarily in Canada and Myanmar, in partnership with the Marel & Prom Grop throgh the joint investment company Saint-Abin Energie. Seplat is an oil company listed on the stock exchanges in London (LSE) and Lagos (NSE), following its IPO on 14 April Following this transaction, the Company s eqity interest was dilted to 21.76% of the share capital. As a reslt of this interest in Seplat, the Company has rights in Oil Mining Licences ( OMLs ) located mainly in the Niger delta in Nigeria. Since 2013, the Company has been diversifying its asset portfolio, particlarly throgh Saint-Abin Energie, with the acqisition of eqity interests in oil companies in Canada (in Alberta, on the Gaspé Peninsla and Anticosti) and in Myanmar. Saint-Abin Energie also owns 50% of a company that has been selected by the Iraqi athorities to participate in ftre permit allocations. 02 ANNUAL REPORT 2014

5 ProfIlE ANNUAL REPORT

6 Governance As at the date of this Annal Report, the management team is strctred as follows: Mr. JEAN-FRANÇOIS HÉNIN Chairman of the Board of Directors Gradate of the IAE Sorbonne Bsiness School (Paris) in Economics. Treasry and Foreign Exchange Director of Société Lyonnaise de Dépôts, Treasrer of Thomson CSF, Chief Exective Officer of Alts Finance, Vice-Chairman of the spervisory board of Alts Finance, Chairman & Chief Exective Officer of Electricité et Eax de Madagascar (EEM). He has been the Chairman of Marel & Prom since March Mr. MICHEL HOCHARD Depty Chief Exective Officer Gradate of the ICN Bsiness School (Nancy) and Chartered Accontant. Internal aditor in the Department of Finance at ELF Aqitaine, Head of the Finance Division for Africa & the Middle East, Director of Finance of the SNEAP, then at ELF Aqitaine prodction and ELF E&P, Depty Head of HR at ELF E&P, Director of Operations at PricewaterhoseCoopers BPO, member of the management committee of GEOS. He joined Marel & Prom as Chief Financial Offi cer in 2007 and was appointed Depty Chief Exective Offi cer of Marel & Prom on 27 Agst Mr. XAVIER BLANDIN Chief Exective Officer Gradate of the HEC bsiness school and former stdent of the ENA administrative college. Treasry Department, Depty Director for France with the International Monetary Fnd in Washington and fi nancial attaché at the French Embassy in the United States, head of the Banks and Banking Reglation offi ce at the Treasry Department, technical advisor to the cabinets of Mr Cabana and sbseqently Mr Balladr, head of the pblic enterprise offi ce and Assistant Director of the Treasry Department. From 1991 to the end of December 2010, Mr Blandin worked in the banking sector, fi rst at Banqe Paribas and then at BNP Paribas, where he was a member of the Exective Committee of the Corporate Finance Department before becoming Senior Banker. Mr Xavier Blandin has been a director of the Company since 22 September ANNUAL REPORT 2014

7 Governance Board of Directors AUGUSTINE OJUNEKWU AVURU Director XAVIER BLANDIN Director NATHALIE DELAPALME Independent director CAROLINE CATOIRE Independent director JEAN-FRANÇOIS HÉNIN Chairman of the Board of Directors MACIF, représentée par M. OLIVIER ARLES Independent director EMMANUEL DE MARION DE GLATIGNY Director AMBROSIE BRYANT CHUKWUELOKA ORJIAKO Director ALEXANDRE VILGRAIN Independent director Adit and Risk Committee NATHALIE DELAPALME Chairman, Independent director EMMANUEL DE MARION DE GLATIGNY Director CAROLINE CATOIRE Independent director Appointments and Compensation Committee EMMANUEL DE MARION DE GLATIGNY Chairman, Director ALEXANDRE VILGRAIN Independent director NATHALIE DELAPALME Independent director ANNUAL REPORT

8 MPI in brief MPI was formed by Marel & Prom, a grop specialising in the exploration and prodction of hydrocarbons and deriving from the spin-off of activities in Nigeria by Marel & Prom. MPI has been listed on NYSE Eronext Paris since 15 December 2011, after shareholders approved the distribtion of 100% of MPI s capital at the General Shareholders Meeting of 12 December MPI is a holding company seeking new opportnities worldwide for the prpose of developing its portfolio of assets. Previosly present only in Nigeria, MPI began its international expansion in 2013 throgh the creation of a new joint investment vehicle with Marel & Prom: Saint-Abin Energie. Throgh Saint-Abin Energie, MPI made its entry into Myanmar (gas) and Canada (conventional and non-conventional hydrocarbons) and qalifi ed as an operator in Iraq in Landmarks In 2012 Increase in prodction for Seplat Agreement signed with SPDC In 2013 Creation of Saint-Abin Energie (Marel & Prom 1/3, MPI 2/3) Entry into Myanmar Entry into Canada Late 2013 Sale of 15% of Seplat MP Nigeria becomes MPI In 2014 Seplat listed in Lagos and London Long-term prodction tests of SAGD pilot in Alberta Lanch of the fi rst phase of exploration on Anticosti Island and signatre of strategic partnership agreement with Gaz Métro December 2011 MP Nigeria becomes independent 15 December 2011 MP Nigeria listed in Paris, France 29 Janary 2010 Acqisition of OMLs 4, 38 and 41 April 2010 Restart of prodction Agst 2010 Seplat becomes an operator 15 October 2009 Incorporation of MP Nigeria, a wholly owned sbsidiary of Marel & Prom 06 ANNUAL REPORT 2014

9 MPI in Brief Organisational chart of Grop activities (at 31 March 2015) MPI 40% 21.76% 66.67% CARDINAL SEPLAT SAINT-AUBIN ENERGIE 100% 56.25% 100% 100% 100% 100% NEWTON BELEMAOIL MP EAST ASIA SAE Qébec Saint-Abin E&P Qébec MP WEST CANADA MP Energy West Canada Deep Well Oil & Gas 45% 40% 40% 40% 40% 50% 21.67% 25% 25% OML 4, 38 and 41 OPL 283 OML 53 OML 55 M2 block 13 permits Gaspé Peninsla 38 Permits Anticosti 12 permits Alberta NIGERIA MYANMAR CANADA DOCUMENT ANNUAL DE RÉFÉRENCE REPORT

10 INTERNATIONAL PRESENCE The Grop has a balanced portfolio of high-qality assets. Canada throgh Saint-Abin Energie (66.67% owned by MPI) Alberta (12 permits) 31 km 2-25% Gaspé Peninsla (13 permits) 1,892 km 2-50% Anticosti 6, km % 08 ANNUAL REPORT 2014

11 INTERNATIONAL PRESENCE (66.67% owned by MPI) M2 Block 9,652 km 2-40% Myanmar throgh Saint-Abin Energie Nigeria throgh Seplat (21.76% owned by MPI) OML 4,38 et 41 2,650 km 2-45% OPL % OML 53-1,585 km² - 40% OML km² % ANNUAL REPORT

12 KEY FIGURES The Company consolidates its sbsidiaries, Seplat (21.76%) and Saint-Abin Energie (66.6%), sing the eqity method in accordance with IFRS 10. MPI posted an operating loss of 3.8 million for fiscal year 2014, after taking into accont the rnning costs inherent to the stats of listed company (stattory adit, financial commnication, legal costs, etc.). The revalation of the holding company s cash in USD contribted to the recognition of a taxable income in France and a tax liability of 12.1 million as a reslt. The income of 35 million from the eqity associates primarily corresponds to MPI s share in Seplat for 46.1 million and Saint-Abin Energie (SAE) and its sbsidiaries for a total of million. Since the Company did not participate in the Seplat capital increase at the time of its IPO, its stake in Seplat was redced from 30.1% to 21.76%, which led to the recognition of a diltion gain of 29.4 million. At 31 December 2014, the Company held net cash of 251 million, an increase of + 25 million over the previos year as detailed below: ReSeplat repayment of the shareholder loan for 35 million; Dividends paid: - 27 million; Dividends received: + 9 million; Investments in SAE: - 17 million; Impact of changes in EUR/USD exchange: + 30 million; Miscellaneos: -5 million. As at this date of this Annal Report, the Company has no otstanding debt. (in millions of eros) Sales - - Operating income (3.8) 29.0 Financial income Income before tax (2.6) 32.9 Income taxes (12.1) (1.7) Net income from consolidated companies (14.8) 31.2 Net income from eqity associates Effect of diltion Consolidated net income CASH AND CASH EQUIVALENTS AT END OF PERIOD ANNUAL REPORT 2014

13 MARKET DATA Shareholding as at 31 December 2014 Breakdown by type of holder (% of capital) Geographic breakdown of o ther instittional investors (% of capital) Treasry shares 4% Macif 7% Other 2% Other instittional investors 27% Rest of World 0.1% Soth Africa 5.3% North America 3.4% France 6.3% Pacifico 25% Pblic 35% UK & Ireland 2.3% Rest of Erope 9.6% Stock Market MPI is eligible for the French PEA PME investment scheme. CODE ISIN: FR MPI NYSE EURONEXT PARIS Total nmber of shares: 115,336,534 Treasry shares: 4,576,483 Shares otstanding: 110,760,051 Inclsion in the CAC PME index ,000, ,000, ,000, ,000, ,000, /12/ /02/ /04/ /06/ /08/ /10/ /12/ /02/ /04/ /06/ /08/ /10/ /12/ /02/ /04/ /06/ /08/ /10/ /12/ /02/ /03/ volme market price Contact : MPI - 51 re d Anjo Paris, FRANCE +33(0) ir@mpienergy.com ANNUAL REPORT

14 12 ANNUAL REPORT 2014

15 financial information ANNUAL REPORT

16 1 4 Description of the Company Profi le and history Description of the Grop s bsiness Development potential for MPI Financial information Investments Information regarding trends and strategy 30 2 Risk factors Major risks related to the Company s oil operations Financial risks Risks related to the Company s holding of a minority interest of 21.76% in Seplat, its only signifi cant operational asset, located in Nigeria Other risks Company insrance 41 3 Corporate governance (Chairman s report prsant to Article L of the French Commercial Code) Administrative, management and spervisory bodies and exective management Compensation and benefi ts Operation of the administrative and management bodies Stattory Aditors Report, prepared in accordance with Article L of the French Commercial Code, on the report prepared by the Chairman of the Board of Directors of the Company 68 Corporate, social and environmental responsibility Information on labor Environmental information Information on corporate commitments to promote sstainable development Report of the independent third-party aditors on MPI corporate, social and environmental information 79 5 Information abot the Company and its capital Information abot the Company Information abot capital Related-party transactions Large contracts Special Stattory Aditors Report on reglated agreements and commitments Financial statements Consolidated fi nancial statements for the year ended 31 December Company income in the last fi ve fi scal years Additional information Pblicly available docments Information on eqity interests Provisional calendar Person responsible for the Annal Report Stattory Aditors Glossary Concordance tables ANNUAL REPORT 2014

17 A pblic limited company with capital of 11,533, Registered offi ce: 51 re d Anjo, Paris, France RCS Paris Annal Report 2014 This 2014 Annal Report incldes the annal fi nancial report as referred to in Article of the AMF General Reglations. This Annal Report was fi led with the Atorité des marchés fi nanciers on 28 April 2015 prsant to the provisions of Article of its General Reglations. It may be sed in spport of a fi nancial transaction if it incldes the relevant transaction notice approved by the Atorité des marchés fi nanciers. Incorporation by reference: prsant to Article 28 of Commission Reglation (EC) No. 809/2004, the following information is inclded by way of reference in this Annal Report: for fi scal year 2012: the Management Report, consolidated fi nancial statements and annal fi nancial statements, inclding the Stattory Aditors Reports on these statements, appear on pages 190 and 206 respectively of the Annal Report, registered by the Atorité des Marchés Financiers on 9 Jly 2013 nder nmber R13-037; for fi scal year 2013: the Management Report, consolidated fi nancial statements and annal fi nancial statements, inclding the Stattory Aditors Reports on these statements, appear on pages 112 and 138 respectively of the Annal Report, registered by the Atorité des Marchés Financiers on 27 October 2014 nder nmber R14-065; and Seplat s base prospects, drawn p in preparation for its stock market listing in London and Lagos on 14 April These docments as well as copies of this Annal Report are available free of charge from MPI (51, re d Anjo Paris, France) as well as on the websites of MPI ( and the Atorité des Marchés Financiers ( ANNUAL REPORT

18 DISCLAIMER Preliminary remarks In this Annal Report: the term Listing refers to the listing of shares of Marel & Prom Nigeria (now called MPI) on the NYSE Eronext reglated market in Paris on 15 December 2011; the term Marel & Prom Grop refers to the Marel & Prom Grop, i.e. Marel & Prom and all of the sbsidiaries and eqity interests held directly or indirectly by Marel & Prom; the term MPI Grop refers to the MPI Grop, i.e. MPI and all of the sbsidiaries and eqity interests held directly or indirectly by MPI (formerly known as Marel & Prom Nigeria); the term Marel & Prom refers to Etablissements Marel & Prom SA, a pblic limited company (société anonyme) with capital of 93,602,812.38, whose registered offi ce is located at 51, re d Anjo Paris, France, and which is registered with the Paris Trade and Companies Register nder nmber ; the terms MPI and Company refer to MPI; the term MPNATI refers to the Swiss sbsidiary of the Company, MPNATI, a pblic limited company incorporated nder Swiss law, with capital of CHF 100,000, whose registered offi ce is located at 47 rote des Acacias, 1227 Les Acacias, Switzerland, registered with the Geneva Trade and Companies Register nder nmber CH ; the term NPDC refers to the Nigerian Petrolem Development Company; the term NNPC refers to the Nigerian National Petrolem Corporation; the term Platform refers to Platform Petrolem (JV) Limited (BVI); the term Partners refers to Shebah and Platform, as well as their respective parent companies, the Nigerian companies Shebah Petrolem Development Company Limited and Platform Petrolem Joint Ventres Limited; the term Pacifico refers to Compagnie de Participations Commerciales Indstrielles et Financières Pacifi co, a pblic limited company with capital of 1,196,736.48, whose registered offi ce is located at 51, re d Anjo Paris, France, and which is registered with the Paris Trade and Companies Register nder nmber ; the term Saint-Abin Energie refers to Saint-Abin Energie SAS, a simplifi ed joint-stock company (société par actions simplifiée) with capital of 20,000,000, whose registered offi ce is located at 51, re d Anjo Paris, France, and which is registered with the Paris Trade and Companies Register nder nmber ; the term Seplat refers to Seplat Petrolem Development Company Limited; the term Shebah refers to Shebah Petrolem (JV) Limited (BVI); the term SWST refers to Shell Western Spply and Trading Limited; and the term SPDC refers to Shell Petrolem Development Company of Nigeria Limited. A glossary defi ning the technical terms sed in this Annal Report is provided at the end of this docment. 16 ANNUAL REPORT 2014

19 Forward-looking information This Annal Report contains statements concerning the otlook and development strategies of the Company, particlarly in Section 1.6 of this Annal Report. This information is sometimes identifi ed by the se of the ftre or conditional tenses or by forwardlooking terminology, sch as consider, plan, think, have the objective of, in expectation of, nderstand, shold, aspire, estimate, believe, hope, may or, as the case may be, the negative form of these terms, or any other variation or comparable terminology. Sch information is not historical data and shold not be interpreted as a garantee that the data or facts stated will occr. Sch information is based on data, assmptions and estimates considered reasonable by the Company. It is liable to change or to be altered de to ncertainties srronding the economic, fi nancial, competitive and reglatory environment. This information is provided in varios sections of this Annal Report and contains data abot the Company s intentions, estimates and objectives with regard to the market in which it operates, its strategy, growth, reslts, fi nancial position, cash and forecasts. The forward-looking statements contained herein are crrent as at the date of this Annal Report. The Company cannot anticipate all risks, ncertainties or other factors that may affect its activity, their potential impact on its activity, or even the extent to which the appearance of a risk or combination of risks may lead to reslts differing signifi cantly from those mentioned in the forward-looking statements, bearing in mind that no forward-looking statement constittes a garantee of actal performance. The Company makes no commitment and gives no garantee that the objectives and forecasts expressed in this Annal Report will be achieved. Eqal access to information The information contained in this Annal Report, as at the date stated herein, satisfi es in all signifi cant aspects the principle that all shareholders have eqal access to information abot the Company. Risk factors This Annal Report incldes risk factors as described in Chapter 2 Risk factors, which shold be careflly considered, as well as, for those risk factors having a direct impact on Seplat and ths an indirect impact on the Company, the factors identifi ed by Seplat in its base prospects as prepared for its stock market listing in April 2014 (and available from Seplat s website at or in any other docment that it may pblish. Shold all or some of these risks occr, they may have a signifi cant adverse impact on the Company and its activity, image, fi nancial position, reslts or ability to achieve its objectives. ANNUAL REPORT

20 18 ANNUAL REPORT 2014

21 Description of the Company PROFILE AND HISTORY Overview Organisation chart and change in consolidation scope DESCRIPTION OF THE GROUP S BUSINESS Seplat s assets and activities Saint-Abin Energie s assets and activities DEVELOPMENT POTENTIAL FOR MPI FINANCIAL INFORMATION Consolidated fi nancial statements for the year ended 31 December Company fi nancial statements for the year ended 31 December Contractal commitments Borrowing and fi nancing Restrictions on the se of capital INVESTMENTS Principal investments made, planned or covered by fi rm commitments from the Company s management bodies Financing of investments Property, plant and eqipment INFORMATION REGARDING TRENDS AND STRATEGY Development of Saint-Abin Energie Diversifi cation of Seplat s asset portfolio and refi nancing Development strategy 30 ANNUAL REPORT

22 1 Description of the Company PROFILE AND HISTORY 1.1 PROFILE AND HISTORY Overview The Company was created by the Marel & Prom Grop, a grop specialising in hydrocarbon exploration and prodction, in order to acqire rights to Oil Mining Licences (OMLs) in the Niger Delta in Nigeria, in a joint ventre with Nigerian partners (namely, Shebah and Platform) within Seplat. The fact that the Company belongs to the Marel & Prom Grop has enabled it to benefi t from the knowledge, experience and expertise developed by Marel & Prom in the context of its oil bsiness operations on several continents. The Company became independent in December 2011, after Marel & Prom s shareholders approved the distribtion of 100% of the Company s capital to Marel & Prom s shareholders dring an Ordinary General Meeting held on 12 December Since 15 December 2011, all of the Company s shares have been listed for trading on the NYSE Eronext reglated market in Paris. MPI is active in the oil indstry today via eqity interests in the Nigerian company Seplat and Saint-Abin Energie (SAE), a joint investment vehicle for the Company and Marel & Prom. Seplat is an oil company listed on the Stock Exchanges in London (LSE) and Nigeria (NSE), following its IPO on 14 April Following this transaction, the Company s eqity interest was dilted to 21.76% of the share capital. As a reslt of this interest in Seplat, as at the date of this Annal Report, the Company has indirect rights in six onshore OMLs offering a balanced combination of fi elds in prodction, fi elds to be developed and exploration opportnities. It also enjoys strong local involvement in Nigeria throgh this interest. MPI is crrently also active throgh Saint-Abin Energie in Canada (in Alberta, the Gaspé Peninsla and Anticosti), Myanmar as well as in Iraq, where it owns 50% of a company that has been selected by the Iraqi athorities to participate in ftre permit allocations. Formerly known as Marel & Prom Nigeria, the Company s name became MPI with effect from the Combined General Shareholders Meeting of Thrsday, 20 Jne ANNUAL REPORT 2014

23 Description of the Company 1 PROFILE AND HISTORY Organisation chart and change in consolidation scope Grop organisation chart As of 31 March 2015, the Company holds eqity interests of 21.76% in Seplat and 66.67% in Saint-Abin Energie. MPI 40% 21.76% 66.67% 100% CARDINAL DRILLING SERVICES SEPLAT SAINT-AUBIN ENERGIE MPNATI 100% 56.25% 100% 100% 100% 100% 50% Newton Belemaoil MP EAST ASIA SAE Qébec Saint-Abin E&P Qébec MP WEST CANADA Marel & Prom Iraq 100% 20% MP Energy West Canada Deep Well Oil & Gas 45% 40% 40% 40% 40% 50% 21.67% 25% 25% OML 4, 38 and 41 OPL 283 OML 53 OML 55 M2 block 13 permits Gaspé Peninsla 38 Permits Anticosti 12 permits Alberta NIGERIA MYANMAR CANADA IRAQ SWITZERLAND Change in consolidation scope (a) Seplat Dring the second half of 2013, the Company sold a total of 14.9% of its interest in Seplat to three UK investment fnds. Following these transactions, MPI held 30.1% of Seplat s capital. Since 14 April 2014, Seplat s shares have been traded simltaneosly on the London Stock Exchange (LSE; ISIN code: NGSEPLAT0008) and the Nigerian Stock Exchange in Lagos (NSE). Following this IPO, the Company, which previosly held 30.1% of Seplat s share capital, had its holding dilted to 21.76% of Seplat s share capital (after exercising 97% of the overallotment option). On 22 April 2014, Seplat sed part of the proceeds of the IPO to pay off the otstanding balance of $48 million on the shareholder loan granted to it by the Company on 25 Jne The remainder of the proceeds of the IPO will mainly be sed to fi nance new acqisitions. In addition, the Company has, since September 2013, held 40% of the capital of Cardinal Drilling Services, with the remainder of the capital being held by Shebah (34%) and Platform (26%). Cardinal Drilling Services performs oil drilling operations in Nigeria on behalf of Seplat. (b) Saint-Abin Energie On 1 April 2014, Saint-Abin E&P (Qébec) Inc., a wholly owned sbsidiary of Saint-Abin Energie SAS, conclded the fi nal docmentation for the creation of a joint ventre in partnership with Ressorces Qébec, Pétrolia and Corridor Resorces. The eqity interests in the joint ventre are as follows: Ressorces Qébec: 35%; Pétrolia: 21.7%; Corridor Resorces: 21.7%; Saint-Abin (E&P) Qébec: 21.7%. The joint ventre holds exploration permits on Anticosti Island, Qebec, which are operated by Pétrolia. ANNUAL REPORT

24 1 Description of the Company DESCRIPTION OF THE GROUP S BUSINESS 1.2 DESCRIPTION OF THE GROUP S BUSINESS The Company is active in the pstream sector of the oil and gas indstry, and, more precisely, in the fi eld of hydrocarbon exploration and prodction. As at the date of this Annal Report, the Company s exploration/prodction activities are located in Nigeria, throgh Seplat, and in Myanmar and Canada via Saint- Abin Energie. As at the date of this Annal Report, the Company holds eqity interests or stakes in oil projects throgh sbsidiaries or companies that, with the exception of Seplat, do not operate said projects Seplat s assets and activities Seplat s asset portfolio As at the date of this Annal Report, Seplat holds the following direct or indirect interests in six licences (OMLs 4, 38, 41, 53 and 55 and OPL 283). These licences inclde developed fi elds in prodction, discovered, ndeveloped fi elds and a 24-inch pipeline with a capacity of 144,000 bopd. ESCRAVOS (terminal) 2010 OML 41 BENIN CITY WARRI OML 4 Oben Sapele Okwefe Mosogar Okporhr Ubaleme Orogho Amkpe Ovhor Okoporo OML 38 OPL 283 Umseti (Pillar) NIGERIA Igbk (Pillar) ONITSHA 2014/2015 Jisike OML 53 OWERRI OML 4, 38 and 41 45% 139 MMbbls (oil) 827 Bscf (gas) Prodction Seplat: 30,176 bopd OPL % 9 MMbbls (oil) 80 Bscf (gas) Prodction Seplat: 647 bopd FORCADOS (terminal) Glf of Ginea 2013 Ohaji Soth Heoma Emeabiam Ow Omerel Odinma Alaoma OML 53 40% 51 MMbbls (oil) 611 Bscf (gas) Prodction Seplat: 800 bopd NIGERIA 2015 OML 55 Sok NEMBE Dama Krakama PORT HARCOURT OML % 20 MMbbls (oil) 156 Bscf (gas) Prodction Seplat: 1,800 bopd Robert Kiri Ke Akaso BONNY Belema Inda Glf of Ginea 22 ANNUAL REPORT 2014

25 Description of the Company 1 DESCRIPTION OF THE GROUP S BUSINESS Seplat plans to develop its gas assets to take advantage of the growth in demand for gas in Nigeria. To this end, Seplat is devoting a signifi cant proportion of its hman and fi nancial resorces to expansion work that will increase its gas prodction, processing and roting capacity. The presence of Nigerian co-investors in Seplat, which was increased as a reslt of Seplat s recent listing on the Nigerian Stock Exchange in Lagos, shold make it easier to secre local spport for developing oil fi elds for which it holds the operating permit, exploring fi elds that are as yet ndeveloped and applying for new permits, thereby benefi ting from the Nigerian government s policy and reglations designed to promote Nigerian companies, depending pon changes to the applicable reglations and the Nigerian government s procedres for intervention in the oil and gas indstry. In this respect, in Febrary 2014, Seplat obtained Pioneer indstry stats from the Nigerian tax athorities, nder which it benefi ts from an exemption from corporation tax with retroactive effect from 1 Janary 2013, which may last for fi ve years Reserves as Seplat s share net of royalties P1 and P2 reserves (Seplat share) were estimated at 281 MMboe (139 MMbbl of oil and 826 Bscf of gas) as at 31 December 2014, which corresponds to a 24% increase over a year and a reserve replacement ratio of over 400%. Oil + Condensates Natral G as Total Oil Eqivalent MMbbls Bscf MMboe Reserves as at 31 October Revisions Discoveries Prodction (10.4) (21.4) (14.1) RESERVES AS AT 31 DECEMBER Sorce : Seplat Seplat s activities dring fiscal year 2014 Dal stock market listing Since 14 April 2014, Seplat s shares have been traded simltaneosly on the London Stock Exchange and the Nigerian Stock Exchange in Lagos. Following this IPO and capital increase, in which it did not participate, the Company, which previosly held 30.1% of Seplat s share capital, had its holding dilted to 21.76% of Seplat s share capital. Part of the proceeds from the isse were sed by Seplat on 22 April 2014 to repay all of the sms otstanding in respect of the shareholders loan granted by the Company to Seplat on 25 Jne 2010 in the amont of $48 million. The remainder of the proceeds of the IPO will mainly be sed to fi nance new acqisitions. prodction from the fi elds of OMLs 4, 38 and 41 reached a new record in December 2014 of 76,000 barrels of oil per day. Constrction and installation works for the new gas treatment plant (150 million cbic feet per day) located on the Oben fi eld were fi nished at the end of 2014, signifi cantly increasing the volme of gas available for the local market. Works on connecting the Warri refi nery are complete, with 288,811 barrels having been transported there to date, allowing Seplat to diversify its evacation otlets for hydrocarbons prodced. Seplat plans to prodce between 32,000 and 36,000 barrels of oil eqivalent per day on average in In order to adapt to the crrent environment, Seplat will devote its investments for 2015 to prodction and development activities in the amont of $168 million for its share. Prodction Hydrocarbon prodction over the entire 2014 fi scal year totalled 30,823 barrels of oil eqivalent per day (Seplat share). Gross ANNUAL REPORT

26 1 Description of the Company DESCRIPTION OF THE GROUP S BUSINESS KEY FIGURES FOR SEPLAT AS AT 31 DECEMBER 2014 In millions of dollars Chg. Revenes % Gross profit % Operating income % Income before tax % Net income % Operating cash flow* % Prodction as Seplat s share (bopd) 30,823 30,600 +1% Sale price oil ($/bbl) % Sale price gas ($ per M cf) % * before change in working capital reqirements. Althogh prodction has increased, the nbdgeted prodction stoppage had a negative effect on revene growth. Sales for 2014 are down 12% compared with 2013 sales of $775 million, mainly de to the drop in oil prices in the second half of the year. Net profi t for the year totalled $252 million, taking into accont non-recrring costs of $70 million, primarily linked to Seplat s IPO. Cash fl ow generated by operations before working capital adjstments totalled $353 million and exceeds investments made over the fi scal year in the amont of $296 million. Available cash and net debt at the end of the year amonted to $285 million and $304 million respectively Saint-Abin Energie s assets and activities Saint-Abin Energie was set p by Marel & Prom (with one-third ownership) and MPI (two-third ownership) for the joint development of new projects. The investments made by Saint-Abin Energie amonted, for MPI, to 37.7 million at 31 December 2013 and 43.1 million at 31 December The projects in which Saint-Abin Energie s sbsidiaries hold interests are not yet in prodction. The Company holds 66.67% of the share capital of Saint-Abin Energie. These projects are managed by third-party operators Saint-Abin Energie s asset portfolio Saint-Abin Energie, which is 66.67% owned by MPI, holds assets in Canada (in Alberta, the Gaspé Peninsla and Anticosti Island), and in Myanmar and Iraq. SAINT-AUBIN ENERGIE 100% 100% 100% 100% 50% MP East Asia Saint Abin Energie Qébec Saint Abin E & P Qébec MP West Canada Marel & Prom Iraq 100% MP Energy West Canada Corp. 20% Deep Well Oil & Gas 40% 50% 21.7% 25% 25% M2 Block 13 permits in the Gaspé Peninsla Permits on Anticosti Island* * Conclded on 1 April permits in Alberta MYANMAR CANADA IRAQ 24 ANNUAL REPORT 2014

27 Description of the Company 1 DESCRIPTION OF THE GROUP S BUSINESS (a) Gaspé Peninsla In Jly 2013, Saint-Abin Energie signed a 50/50 partnership agreement with Pétrolia (a Qebec company whose shares are listed on the Toronto Stock Exchange nder the ticker symbol PEA- TSXV) to develop 13 hydrocarbon prospecting permits covering 1,892 km 2 of the Gaspé Peninsla in Canada. Althogh the prospection targets are in nconventional reservoirs, this does not preclde the presence of conventional deposits. (b) Qébec Anticosti USA Labrador Anticosti Terre- Neve Campbellton On 1 April 2014, Saint-Abin E&P (Qébec) Inc., a wholly owned sbsidiary of Saint-Abin Energie SAS, conclded the fi nal docmentation for the creation of a joint ventre in partnership with Ressorces Qébec, Pétrolia and Corridor Resorces. The eqity interests in the joint ventre are as follows: Ressorces Qébec: 35%; Pétrolia: 21.7%; Corridor Resorces: 21.7%; Saint-Abin (E&P) Qébec: 21.7%. The joint ventre holds exploration permits on Anticosti Island, Qebec, which are operated by Pétrolia. (c) Sawn Lake, Alberta Since Jly 2013, a Saint-Abin Energie sbsidiary has held a 25% interest in permits for the prpose of testing a steam injection-based prodction process for bitminos oil. These permits are operated by Andora (which holds 50% of these permits). In addition, Saint-Abin Energie acqired 20% of Deep Well Oil & Gas (a company with its head offi ce in Edmonton, Alberta, Canada, whose shares are listed on the OTCQB exchange nder the ticker symbol DWOG, and which holds 25% of these permits) and no shareholder agreement exists to which Saint-Abin Energie is party. (d) Myanmar In May 2013, MP East Asia, a wholly owned sbsidiary of Saint-Abin Energie, signed an agreement with PetroVietnam Exploration Prodction Corporation Ltd. to take a 40% stake in the M2 block sitated off the coast of the Repblic of the Union of Myanmar, with effect from 13 May The interests in the M2 block will be split as follows: PetroVietnam Exploration Prodction Corporation Ltd. (45%), MP East Asia (40%) and Eden Grop Company Ltd. (15%). Sandoway Prospects to be drilled Gas discoveries Bassein Myanang Wakema Henzada Yandoon Rangoon Ma-bin Kyalklat Bogale Pyapon Qébec Labrador USA Sainte-Annedes-Monts Gaspé Chandler Terre- Neve Anticosti In addition, Myanmar Oil and Gas Entreprise (MOGE), a company wholly owned by the Repblic of the Union of Myanmar, is entitled to a 20% stake in the M2 block in the event of a commercial discovery, which cold reach 25% if reserves exceed 5 billion cbic feet. ANNUAL REPORT

28 1 Description of the Company DEVELOPMENT POTENTIAL FOR MPI (e) Iraq In Agst 2013, Marel & Prom Iraq, a company in which Saint-Abin Energie and PIA Conslting each hold a 50% stake, established for the prpose of sorcing oil assets in Iraq in which the Grop cold acqire interests, was selected by the Iraqi athorities to participate in pcoming permit allocations. This qalifi cation cold allow the Grop to access very signifi cant oil resorces Saint-Abin Energie s operations dring fiscal year 2014 (a) Canada At Sawn Lake in Alberta, the pilot test of the SAGD (steam-assisted gravity drainage) procedre, carried ot at two wells in order to evalate the technical and commercial feasibility of this steam injection-based bitmen prodction project, contined. Prodction began in September 2014 and will contine ntil the smmer of 2015 to collect the data necessary to assess the deposit s potential. In Qebec, on Anticosti Island, the stratigraphic srvey campaign was a technical and operational sccess. The Macasty target was met on all fi ve drilling sites and the sample analysis reslts were either in line with or exceeded partners expectations. The drilling campaign, which covers p to 18 stratigraphic wells, was sspended dring the winter. It shold resme in May 2015 and fi nish in early atmn Frthermore, on 23 October 2014 the Hydrocarbres Anticosti joint ventre (Saint-Abin Energie 21.7%) annonced the signatre of a strategic partnership with the Qebec company Gaz Métro aimed at making se of natral gas from Anticosti Island. (b) Myanmar Drilling of the SP-1X exploration well, located on the M2 block (Saint-Abin Energie 40%) and operated by PetroVietnam, began on 27 December Drilling ended in March 2015 and reslts from the well are crrently being analysed. (c) Iraq As at the date of this Annal Report, there is no exploration activity to speak of in Iraq, given the overall sitation in the contry. 1.3 DEVELOPMENT POTENTIAL FOR MPI The partnership established by the Company and Marel & Prom throgh the creation of Saint-Abin Energie allows the Company to access a greater nmber of opportnities whilst diversifying risk. The Company contines to examine investment and development opportnities otside of Nigeria in order to prse growth in exploration and prodction operations in high-potential areas. This diversifi cation of the Company s asset portfolio otside of Nigeria does not confl ict in any way with the Company s desire to maintain a signifi cant eqity interest in Seplat. In addition, the Company maintains an interest in Nigeria, which remains an attractive contry in terms of investment in the hydrocarbon sector. To fnd its development, the Company has a strong cash base, 251 million as at 31 December 2014, as well as the ability to raise fnding, as it crrently has no debt of its own. 26 ANNUAL REPORT 2014

29 Description of the Company 1 FINANCIAL INFORMATION 1.4 FINANCIAL INFORMATION Consolidated financial statements for the year ended 31 December 2014 The Company consolidates its sbsidiaries Seplat (21.76%) and Saint-Abin Energie (66.6%) sing the eqity method, in accordance with IFRS 11. In millions of eros Sales 0 0 Operating income (3.8) 29.0 Financial income Income before tax (2.6) 32.9 Income taxes (12.1) (1.7) Net income from consolidated companies (14.8) 31.2 Net income from eqity associates Effect of diltion Consolidated net income NET CASH MPI s operating income for fi scal year 2014 amonts to million after taking into accont operating expenses associated with the IPO (stattory adit, fi nancial/legal commnication, etc.). The revalation of the holding company s cash in USD led to the recognition of net income taxable in France and a reslting tax expense of 12 million. Net income from eqity associates ( 35 million) corresponds primarily to MPI s share in Seplat of 46.1 million and in Saint- Abin Energie and its sbsidiaries in the amont of million. Since the Company did not take part in Seplat s capital increase dring its IPO, its share of ownership in Seplat was redced from 30.1% to 21.76%, with this operation also generating a diltion gain of 29.4 million. As at 31 December 2014, the Company held cash and cash eqivalents of 251 million, an increase of 25 million verss fi scal year 2013, as detailed below: Seplat s repayment of the shareholder loan: 35 million; dividends paid: - 27 million; dividends received: + 9 million; investments in SAE: - 17 million; effect of changes in the EUR/USD exchange rate: + 30 million; miscellaneos: - 5 million Company financial statements for the year ended 31 December 2014 Seplat, in which MPI had held a 30.1% interest, commenced trading on 14 April Seplat shares are listed on the London Stock Exchange (LSE) and the Nigerian Stock Exchange (NSE). A total of million Seplat shares, representing 27.70% of the Company s capital (post-transaction), were admitted to trading at an IPO price of 210 pence per share (NGN 576 per share on the NSE). The IPO generated net proceeds of $497 million, giving the Company the means to fi nance new acqisitions of oil assets in the Niger Delta. Since MPI did not participate in this transaction, its share of ownership in Seplat was redced from 30.1% to 21.76%. The balance sheet vale of this share remains at 21.3 million. In 2014, Seplat paid a dividend of $12 million ( 8.8 million) to MPI as part of the allocation of its 2013 net income. Frthermore, ANNUAL REPORT

30 1 Description of the Company FINANCIAL INFORMATION in November 2014, Seplat decided to pay its shareholders an interim dividend of $0.06 per share. For fi scal year 2014, MPI therefore recorded dividends receivable of $7.2 million ( 5.9 million), which were received at the beginning of On 19 Jne 2014, the partners of Saint-Abin Energie decided to carry ot a capital increase offset against de and payable receivables (the capital of Saint-Abin Energie now stands at 20 million). MPI entered into this transaction in the amont of its share of ownership, 66.7%, which broght the balance sheet vale of this share to 14,232K (compared with 26K at the end of 2013). The Company s net income for fi scal year 2014 amonts to 32.5 million. This is composed primarily of the amont of dividends received from Seplat at 14.8 million, foreign exchange differences at 30.1 million and corporation tax at million. The revalation of the holding company s cash in USD led to the recognition of net income taxable in France and a reslting tax expense. The Company s Board of Directors, which met on 30 March 2015, decided to propose the payment of a dividend of 0.30 per share at the next General Shareholders Meeting, on 22 May Contractal commitments As at the date of this Annal Report, the Company is not sbject to any contractal commitments. More specifi cally, the Company has not conclded any fi nancing agreements Borrowing and financing Consolidated cash fl ow and potential fnding reqirements for the year ended 31 December 2014 are described in the Company s consolidated annal fi nancial statements and the notes thereto in Section 6.1 of this Annal Report. As at the date of this Annal Report, the Company has not conclded any fi nancing agreements Restrictions on the se of capital At the date of this Annal Report, there are restrictions regarding the se of the capital available to the Company. 28 ANNUAL REPORT 2014

31 Description of the Company 1 INVESTMENTS 1.5 INVESTMENTS Principal investments made, planned or covered by firm commitments from the Company s management bodies The Company developed a programme of investments in 2013 that yielded a partnership with Marel & Prom for the joint development of new projects otside the traditional areas of bsiness of both grops. The agreement was strctred throgh a joint ventre Saint-Abin Energie in which MPI holds a 66.67% stake and Marel & Prom a 33.33% stake. Two projects began in Canada in Saint-Abin Energie and Pétrolia entered into an agreement for joint hydrocarbon exploration on thirteen permits on the Gaspé Peninsla in Qebec. In addition, MP West Canada, a wholly owned sbsidiary of Saint-Abin Energie, acqired 20% of the capital of Deep Well Oil & Gas for $22 million and, at the same time, boght p half of the eqity interests held by that company in 12 blocks in the Peace River oil sands of Alberta, Canada. It also has an option on 56 other blocks for which Deep Well Oil & Gas is the operator. With regard specifi cally to the 12 blocks acqired, it has committed to investing a maximm of $40 million, of which $14 million was still to be fi nanced by MPI at 31 December 2014; based on the reslts of the pilot, Saint-Abin Energie will contribte p to $110 million in fnding for the development and prodction phase. In 2014, Saint-Abin E&P (Qébec) Inc., a wholly owned sbsidiary of Saint-Abin Energie SAS, conclded a partnership with Ressorces Qébec, Pétrolia and Corridor Resorces. The joint ventre began an exploration programme composed of 15 to 18 stratigraphic wells and three exploration wells with completion, for an amont not exceeding $60 million, fi nanced by Saint-Abin (E&P) Qébec Inc. (43.33%) and Ressorces Qébec (56.67%). $14 million remained to be fi nanced by MPI as at 31 December Financing of investments The MPI Grop s investments described in the section above are fi nanced by the Company s available cash resorces. These liqid assets will also allow the Company to take advantage of opportnities that may arise in the global oil indstry Property, plant and eqipment The Company does not own facilities or eqipment, since it is not an operator. ANNUAL REPORT

32 1 Description of the Company INFORMATION REGARDING TRENDS AND STRATEGY 1.6 INFORMATION REGARDING TRENDS AND STRATEGY Development of Saint-Abin Energie In Myanmar, drilling of the exploration well SP-1X, located on the M2 block (Saint-Abin Energie 40%) and operated by PetroVietnam, started on 27 December Drilling ended in March 2015 and reslts from the well are crrently being analysed Diversification of Seplat s asset portfolio and refinancing Debt refinancing At the beginning of 2015, Seplat annonced that it wold refi nance its debt by raising $700 million over a period of seven years and $300 million over a period of three years. In the event of acqisition opportnities, this line may be spplemented by another of the same amont. These new lines allowed Seplat to repay its existing debt, of $552 million, and the balance may also be sed in potential growth plans. Acqisition of interests in OML 53 On 5 Febrary 2015, Seplat annonced the fi nalisation of the acqisition of a 40% stake in OML 53 for $259 million from Chevron Nigeria. The state company NNPC holds the remaining 60%. Seplat estimates its recoverable volmes at arond 51 million barrels of oil and condensate and 611 billion cbic feet of gas, or 151 million barrels of oil eqivalent. Seplat was appointed as operator of this licence, sitated onshore in the Niger Delta. Crrent oil prodction is at 2,000 bopd at 100%, with Seplat s share at 800 bopd. Acqisition of interests in OML 55 On 5 Febrary 2015, Seplat annonced the signatre of an agreement on the acqisition of a 56.25% stake in Belemaoil, a Nigerian vehicle dedicated to the prchase of a 40% stake in OML 55 from Chevron Nigeria. The state company NNPC holds the remaining 60%. Seplat therefore indirectly holds a 22.5% stake in OML 55. After adjsting for the prchase price, the cost to Seplat of this transaction was $132 million. Seplat estimates its recoverable volmes at arond 20 million barrels of oil and condensate and 156 billion cbic feet of gas, or 46 million barrels of oil eqivalent. Seplat was appointed as operator of this licence, sitated onshore in the Niger Delta. Crrent oil prodction is at 8,000 bopd at 100%, with Seplat s share at 1,800 bopd. Seplat dividend Seplat s Board of Directors recommends the payment of a total dividend of $0.15 per share, of which $0.06 per share was already paid at the end of The fi nal decision rests with Seplat s General Shareholders Meeting, set to take place in Lagos, Nigeria, on 2 Jne Development strategy The Grop s objective is to become an independent player in the oil indstry by expanding into areas where prospects are good. MPI has a strong cash base, giving it the means for development in Nigeria, Canada and Myanmar. The Company contines to examine investment opportnities in order to prse growth in exploration and prodction operations in high-potential areas. Saint-Abin Energie The prpose of this joint ventre is to spport development projects pt forward by either of the partners. Under this partnership, ftre development projects for oil exploration and prodction will be condcted jointly by the two companies throgh the joint ventre (with the specifi c exception of projects located in the respective historical operating areas of each company). 30 ANNUAL REPORT 2014

33 Description of the Company 1 INFORMATION REGARDING TRENDS AND STRATEGY However, if one of the two partners decided not to take part in a development operation, the other partner wold be free to carry ot the development operation otside the joint ventre (alone or in conjnction with another partner). The interest for the two companies in joining forces resides in their complementary characteristics, as Marel & Prom is a recognised player in the oil sector and has the reqisite skills and expertise, while the Company has the necessary cash to be able to invest, particlarly as part of its policy of expanding its asset portfolio, bt does not have its own technical resorces. The partnership enables the Company to access a large nmber of opportnities while diversifying the risks. Nigeria The diversifi cation of the Company s asset portfolio otside of Nigeria does not confl ict in any way with the Company s desire to maintain a signifi cant eqity interest in Seplat. In addition, the Company contines to take an interest in Nigeria, a contry that remains attractive in terms of investments in oil and gas. ANNUAL REPORT

34 1 Description of the Company 32 ANNUAL REPORT 2014

35 Risk factors MAJOR RISKS RELATED TO THE COMPANY S OIL OPERATIONS Risks related to exploration, the replacement of reserves and decisions affecting permits Risks related to the identifi cation and assessment of reserves and resorces Risks related to hydrocarbon prodction capacity Indstrial and environmental risks Risks related to competition FINANCIAL RISKS Risks of fl ctations in hydrocarbon prices Foreign exchange risk Liqidity risks Market risk RISKS RELATED TO THE COMPANY S HOLDING OF A MINORITY INTEREST OF 21.76% IN SEPLAT, ITS ONLY SIGNIFICANT OPERATIONAL ASSET, LOCATED IN NIGERIA Risks related to the lack of a controlling interest in Seplat Risks related to Seplat Risks related to maintaining a presence in Nigeria OTHER RISKS Risks related to operational dependency on the Marel & Prom Grop Risks related to shareholders and to the management of the Company Risks related to disptes COMPANY INSURANCE 41 ANNUAL REPORT

36 2 Risk factors MAJOR RISKS RELATED TO THE COMPANY S OIL OPERATIONS The Company has condcted a review of the risks that might have a signifi cant adverse effect on its operations, fi nancial position and/or reslts (or on its capacity to achieve its objectives), and believes that there are no other signifi cant risks to which it is exposed as at the date of this Annal Report, either directly or indirectly, beyond those presented below. However, the possibility exists that other risks, which are nknown or have not been considered as at the date of this Annal Report, and are likely to have a signifi cant negative impact on the Company, may or cold exist. The occrrence of any one of these risks cold have a signifi cant adverse effect on the Company s operations, fi nancial position and reslts, its image, its otlook and its ftre share price. 2.1 MAJOR RISKS RELATED TO THE COMPANY S OIL OPERATIONS Risks related to exploration, the replacement of reserves and decisions affecting permits Exploration activity, which relies on the discovery and extraction of hydrocarbons, reqires major preliminary operations to be ndertaken. Geological and seismic analyses are prereqisites for exploration drilling. Operations of this type make it possible to decide on the location of exploration drilling, to transition to the prodction start-p phase or to decide whether to prse exploration. When sch operations are lanched, there are still nmeros ncertainties as to whether the hydrocarbons being investigated are present in sffi cient qantity and qality as well as to the feasibility of extracting them. In fact, the hydrocarbons being investigated when obtaining exploration/prodction permits and dring drilling operations may ltimately be absent or may be present in insffi cient qantities to be economically prodcible. As a reslt, the many ncertainties that persist dring the exploration phase mean that the Company cannot ensre that the investments that are or will be made for crrent or ftre explorations will be profitable. It is ths impossible to garantee that new hydrocarbon resorces will be discovered in sffi cient qantities to replace existing reserves and to allow the Company to recover all of the capital invested in exploration activities and ensre a retrn on the investments made. In order to limit the technical risks of exploration, exploration programmes are validated pstream based on technical criteria prior to being implemented. An acqisition or transfer of interests in prodction permits generally reqires approval from the local government, which cold delay or hinder transfers of interests or growth operations. Moreover, when sch interests are transferred, the local government cold reqire certain work to be performed by specifi c deadlines or impose varios other constraints (particlarly the payment of fi nancial compensation), which may have a signifi cant detrimental impact on the Company s bsiness, net income and prospects in Nigeria Risks related to the identification and assessment of reserves and resorces The evalation process implies sbjective jdgments and may lead to sbseqent revalations, perhaps even downward, as more information is obtained abot the deposits. Any error or inaccracy in the assessment of Seplat s resorces and reserves and any downward revision that may reslt cold have a signifi cant detrimental impact on the Company s bsiness, fi nancial position and prospects Risks related to hydrocarbon prodction capacity When the estimate of hydrocarbon reserves and the economic analysis jstify the development of a discovery, the reserves may, at any time dring prodction, prove to be smaller than projected, and ths compromise the economics of the operation. 34 ANNUAL REPORT 2014

37 Risk factors 2 MAJOR RISKS RELATED TO THE COMPANY S OIL OPERATIONS In addition, the development of a hydrocarbon prodction fi eld reqires signifi cant investment to bild the facilities reqired for the operation, to drill prodction or injection wells and to implement advanced technologies to extract and prodce hydrocarbons with complex properties over the dration of the permit, which is generally for several decades. Making sch investments and the se of these technologies in generally diffi clt environments may reslt in ncertainties abot the amont of the investment reqired, and the development costs and additional costs incrred above and beyond the initial bdgets may have a negative impact on the Company s otlook, fi nancial position and reslts Indstrial and environmental risks Throgh its eqity interests in Seplat and the projects in which it is involved via Saint-Abin Energie (in Myanmar and Canada, inclding Alberta, the Gaspé Peninsla and Anticosti Island), the Company is exposed to the indstrial and environmental risks inherent in the bsiness of hydrocarbon exploration and prodction. These risks inclde erptions of crde oil or natral gas dring drilling, wellhead collapses, and hydrocarbon spills or leaks that generate toxic risks and the risk of fi re or explosion. All these events are capable of damaging or destroying the hydrocarbon wells in prodction as well as the srronding facilities, endangering hman lives or property, leading to interrptions to bsiness activity and casing environmental damage with certain direct conseqences for the health and economic wellbeing of local commnities. In addition to these common risks in exploration/prodction, there are the additional specifi c risks described below. The Company is exposed to all of these ftre and past risks in eqal measre insofar as responsibility for environmental liability before or after the date on which the rights were acqired generally resides with the parties involved in the projects, which may have a negative impact on the Company s bsiness. The principal indstrial and environmental risks are: risks related to a lack of athorisation and/or approval of existing eqipment and pipeline locations; risks related to gas fl aring; risks related to noise polltion; risks related to water and sbsoil qality. It shold be noted that the Company has no involvement as an operator in the projects where it is present; nevertheless, it ensres that operators apply the most stringent standards, sch as API (American Petrolem Institte), ISO, ASME, GE GAP Gidelines, and the Environmental Impact Assessment Act Cap E12 LFN 2004, where applicable. With regard to the preventive measres taken by Seplat (which is the Company s main operational asset) to limit indstrial and commercial risks, Seplat is reqired to condct an environmental impact stdy before carrying ot any expansion or development projects. These stdies allow it to examine and assess the safety risks and the environmental impact of the work that is planned. In order to allow it to identify, qantify and prevent the occrrence of sch risks, Seplat relies on its own expertise, as well as on external experts approved by the government of the contry involved. Lastly, Seplat rotinely works to obtain approval from the relevant ministry for its srface installations, particlarly with respect to their safety. This approval may also be reqired by Seplat s insrers and/or by the Nigerian government (pblic safety). However, sch approval cannot always prevent accidents, which cold have a signifi cant negative impact on Seplat s operations, with fi nancial conseqences that may not be flly covered by Seplat s insrance policies Risks related to competition In developing its activities beyond the crrent scope of its assets, the Company cold face competition from other oil companies in acqiring rights to oil permits for the exploration and prodction of hydrocarbons. Given its crrent positioning and its size, the Company s main competitors are jnior and mid-sized oil companies. The Company is therefore likely to be in competition with oil companies that have greater fi nancial resorces and ths have a competitive advantage in relation to any sellers of oil rights. However, the Company s modest size in comparison with the majors in the sector represents an advantage in terms of operational fl exibility and the ability to make decisions more qickly. This operational fl exibility and rapid decision-making may also give the Company a competitive edge in other contries in which it may plan to operate in the ftre. ANNUAL REPORT

38 2 Risk factors FINANCIAL RISKS 2.2 FINANCIAL RISKS Risks of fl ctations in hydrocarbon prices The economy, particlarly the profi tability of the oil and gas indstry, is very sensitive to the price of hydrocarbons expressed in US dollars. As a reslt, the provisional cash fl ows and net incomes for the Company and Seplat are heavily impacted by changes in the price of hydrocarbons expressed in US dollars. As of the date of this Annal Report, no specifi c policy to hedge this risk has been implemented by the Company, owing in particlar to the lack of its own oil prodction, the implementation costs and the associated nfavorable tax treatment. However, the Company does not rle ot the possibility of sing hedging instrments in the ftre, if the related costs and taxes become more favorable, or if it is warranted by a change in the price of hydrocarbons. Given the signifi cant drop in the price of a barrel of oil since the second half of 2014, and if the prices were to remain at a low level for a prolonged period of time, Seplat may be forced to revise the amont of the dividend that it wold pay to its shareholders. The following table sets ot a sensitivity analysis of the Company s net income and consolidated shareholders eqity as at 31 December 2014 to fl ctations in the price of hydrocarbons (in millions of eros): Changes in barrel price Percentage change 10% -10% Impact on consolidated net income Impact on consolidated net eqity Foreign exchange risk Althogh the Company s reporting crrency is the ero, Seplat and the Company have sed the dollar as their operating crrency since 1 Janary 2012, since sales, the majority of operating expenses and a signifi cant portion of the investments of the Company and Seplat are denominated in this crrency. As for Saint-Abin Energie, whose reporting crrency is the ero, investments are made in USD and CAD. This sitation creates sensitivity in the Company s consolidated fi nancial statements to the EUR/USD, EUR/CAD exchange rates, related to the conversion of assets and liabilities into the reporting crrency at the closing rate, with the discrepancy reslting from this conversion being recorded directly as shareholders eqity. The impact on income before tax, profi ts and the crrency translation adjstment (shareholders eqity) as at 31 December 2014 of a 10% increase or decrease in the EUR/USD exchange rate on that date is set ot below (in millions of eros): Impact on net income before tax Impact on exchange gain (loss) (shareholders eqity) 10% rise in EUR/USD rate 10% fall in EUR/USD rate 10% rise in EUR/USD rate 10% fall in EUR/USD rate USD (52.2) 63.8 Other crrencies TOTAL (52.2) 63.8 The Company may occasionally employ hedging strategies sing derivative instrments (forward crrency transactions and crrency options) to limit its exposre to foreign exchange risk. As at the date of this Annal Report, there is no foreign exchange hedging in place. 36 ANNUAL REPORT 2014

39 Risk factors 2 FINANCIAL RISKS The Company s consolidated foreign exchange position as at 31 December 2014 breaks down as follows (in millions of dollars): Assets and liabilities Foreign crrency commitments (c) Net position before hedging (d) = (a)-(b)+/-(c) Hedging financial instrments (e) Net position after hedging (f) = (d) - (e) Non-crrent fi nancial assets Eqity associates Other crrent assets Derivative instrments Other creditors and miscellaneos liabilities Cash and cash eqivalents USD EXPOSURE Liqidity risks As with any indstrial and commercial activity, the Company is exposed to the risk of insffi cient liqidity or the risk that its fi nancing strategy is inadeqate. To address this risk, the Company ensres that it maintains a balance between debt and shareholders eqity, on the one hand, and its debt and ability to repay on the other, in compliance with ratios that are sally considered catios. Financing options are reviewed and validated by the Company s Board of Directors. As at 31 December 2014 and 31 December 2013, the MPI Grop had no signifi cant fi nancial liabilities. The MPI Grop s liqid assets, which were million as at the closing date, are held in sight deposit acconts. The Company has condcted a specifi c review of its liqidity risk, and believes that it is able to meet its forthcoming contractal matrities over the next 12 months Market risk In recent years, the fi nancial markets have been sbject to signifi cant fl ctations, which at times have not refl ected the reslts of the companies whose shares are traded on the markets. Market fl ctations and the state of the economy cold signifi cantly affect the price of the Company s shares. The price of the Company s shares cold also be infl enced by nmeros events affecting the Company, its interests, its competitors or general economic conditions, and the oil and gas sectors in particlar. The price of the Company s shares cold also fl ctate signifi cantly in reaction to events sch as: annoncements relating to changes in the Company s shareholder composition; changes in the Company s fi nancial reslts or those of its competitors from one period to the next; changes in the estimates of hydrocarbon reserves for projects in which the Company is involved via Saint-Abin Energie; annoncements by competitors or annoncements regarding the oil and gas sectors; annoncements relating to changes in the management team or key personnel of the Company; changes in the ftre prospects or strategy of the Company and its activities or the oil and gas sectors; changes in the content of research analyses involving the Company; changes in economic and market conditions; and political and criminal risks in Nigeria. ANNUAL REPORT

40 2 Risk factors RISKS RELATED TO THE COMPANY S HOLDING OF A MINORITY INTEREST OF 21.76% IN SEPLAT, ITS ONLY SIGNIFICANT OPERATIONAL ASSET, LOCATED IN NIGERIA 2.3 RISKS RELATED TO THE COMPANY S HOLDING OF A MINORITY INTEREST OF 21.76% IN SEPLAT, ITS ONLY SIGNIFICANT OPERATIONAL ASSET, LOCATED IN NIGERIA As at the date of this Annal Report, the Company s only signifi cant operational asset consists of its 21.76% minority interest in Seplat (following its stock market listing on 14 April 2014), a Nigerian company registered with the Nigerian Corporate Affairs Commission nder nmber RC , whose prodction and exploration bsiness and hydrocarbon reserves are located entirely in Nigeria, a contry considered to carry signifi cant risks of political and economic instability, as described below. The Company is therefore exposed to risks related to the lack of a controlling interest in Seplat, risks which cold affect Seplat, and risks related to the exclsive presence of Seplat in Nigeria Risks related to the lack of a controlling interest in Seplat As a minority shareholder of Seplat, the Company is also exposed to the risk that decisions may be taken regarding Seplat that are contrary to the Company s interests; Seplat s listing led the fonding shareholders, inclding MPI, to terminate the shareholders agreement that had bond them since December 2009, and nder which MPI had been given a right of veto on all major decisions concerning Seplat and joint control along with the other fonding shareholders. De to the importance of its eqity interest in Seplat s capital, the Company is assred of holding a position on Seplat s Board of Directors and contines to take an active role in decisions made by the Board of Directors, pon which it has a considerable infl ence. Seplat contines to be consolidated by the Company sing the eqity method Risks related to Seplat Seplat remains the sole signifi cant operational asset as at the date of this Annal Report, making the Company particlarly sensitive to risks that may affect it. The risks to the Company described in Sections 2.1 and 2.2 of this Annal Report cold have a signifi cant detrimental impact on the Company s operations and its development if they were to affect Seplat. Frthermore, in its base prospects drafted in preparation for its stock market listing on 14 April 2014, Seplat describes the risks that it has identifi ed to its operations and which are incorporated by reference in this Annal Report. This docment is available on its website at The materialisation of the risks identifi ed (and others which may not have been identifi ed in this docment) may have a signifi cant detrimental impact on Seplat s bsiness and reslts, and therefore also on the Company. Generally speaking, all indstrial risks which may have an effect on Seplat, its operations and its share price, are likely to have a signifi cant adverse effect on the Company and/or its share price. The Company draws particlar attention to the following risks, which may affect Seplat and have a signifi cant adverse impact on its operations and fi nancial position: risks related to the operation of the Joint Operating Agreement between Seplat and NPDC: Since 30 Jly 2010, Seplat has held 45% of the rights to OMLs 4, 38 and 41, with the remaining 55% being owned by NPDC; any disagreement persisting between Seplat and NPDC and/or signifi cant delay with respect to the fi nancing obligations incmbent pon NPDC cold have a long-term effect on prodction from OMLs 4, 38 and 41, leading to signifi cant adverse effects on Seplat s operations and income, and therefore also on the Company; the same is tre of the association agreements with NPDC in respect of OMLs 53 and 55 in which Seplat has, since 5 Febrary 2015, had an indirect holding of 40% and 22.5% respectively; 38 ANNUAL REPORT 2014

41 Risk factors 2 RISKS RELATED TO THE COMPANY S HOLDING OF A MINORITY INTEREST OF 21.76% IN SEPLAT, ITS ONLY SIGNIFICANT OPERATIONAL ASSET, LOCATED IN NIGERIA risks of dependency on sppliers or sbcontractors: nonperformance, poor performance or late performance by a third party of its contractal obligations to Seplat or the Company cold sbject Seplat or the Company to additional costs, delays, or even the abandonment of projects, which cold have a signifi cant adverse effect on the operations, otlook, fi nancial position and reslts of Seplat and the Company. Specifi cally in relation to the transportation agreement entered into with SPDC, Seplat now has a new pipeline to the Warri refi nery that has been completed and came into operation dring the fi rst qarter of 2014, giving Seplat an alternative channel for exporting fl ids and allowing it to redce the impact of any closres of third party terminals or pipelines. With regard to OML 55 (for which, on 5 Febrary 2015, Seplat annonced that it had reached an agreement with Chevron to complete its acqisition for 22.50% of the rights to OML 55 and for which Seplat was named as the operator), delivery to the Bonny terminal is to be ensred throgh infrastrctre belonging to a third party; poor delivery or the closre of this third party infrastrctre cold have a signifi cant adverse effect on the operations and prodction of OML 55. The same is tre of prodction from OML 53 for which Seplat, on 5 Febrary 2015, annonced that it had completed its acqisition of a 40% interest in OML 53 from Chevron and for which Seplat was named as the operator. These operations depend on OML 124 in Izombe from where the prodction is exported via pipeline to the Brass terminal; risks of dependence on cstomers: Seplat, which does not have its own strctre for marketing the hydrocarbons prodced to end sers, is obliged to enter into agreements with intermediary companies that specialise in this fi eld. The Company believes that Seplat incrs no major conterparty risk in this respect, insofar as the majority of its prodction is sold, as at the date of this Annal Report, to SWST, a Barbados company and a member of the Shell Grop, one of the world s leading oil grops. However, Seplat remains exposed to other risks inherent in this type of contract, sch as contractal non-performance or renegotiation nder less favorable conditions Risks related to maintaining a presence in Nigeria Seplat s exploration and prodction operations, as well as its hydrocarbon reserves, are all located in Nigeria. Nigeria is an emerging contry that is exposed to generally greater risks than in contries with more developed economies: political, economic and health risks (haemorrhagic fever), risks to the safety and secrity of people and property, acts of terrorism, armed confl icts, criminal activities of varios kinds, corrption, and changes to the reglations governing the oil bsiness (Nigeria has specifi c and stringent reglations srronding the exploration and exploitation of hydrocarbons, changes to which cold have signifi cant adverse effects on Seplat s operations, otlook, fi nancial position and reslts) and their interpretation by the Nigerian corts. Frthermore, the Company draws investors attention to the fact that any ftre Company investment in emerging contries with characteristics similar to those of Nigeria may be sbject to risks similar to those previosly described. However, Seplat s assets in Nigeria are now spread over several exploration and prodction areas nder the six permits (pls marginal fi elds) that it holds there, ths mitigating the conseqences shold an isolated event occr at one of its exploration or prodction sites. In addition, Seplat is examining potential opportnities with a view to diversifying its prodction zones. Frthermore, the Company is researching new development and investment opportnities otside of Nigeria. To this end, the Company has signed a partnership agreement with Marel & Prom which provides for joint investments in oil projects throgh a joint ventre company, Saint-Abin Energie. The partnership has been implemented in Myanmar and Canada. The Company holds signifi cant cash for se in development (see Section of this Annal Report), which will allow it to react qickly to attractive, promising opportnities. ANNUAL REPORT

42 2 Risk factors OTHER RISKS 2.4 OTHER RISKS Risks related to operational dependency on the Marel & Prom Grop The Company s operations were, ntil its listing, carried ot within the Marel & Prom Grop, sing an internal system adapted to its stats as a pblicly traded grop, which the Company no longer has since the listing date of 15 December The Marel & Prom Grop has made a commitment nder the Services Agreement (for which the terms and conditions are listed in Section of this Annal Report), to provide the Company with a nmber of administrative and operational services for a period of p to 12 months. This agreement was renewed at the end of 2014 for a frther 12 months and will expire on 15 December This Services Agreement may be renewed nder the same terms before its next matrity date. As of 31 December 2014 and nder the terms of the Services Agreement, the Marel & Prom Grop has provided the Company with a team of 16 staff, comprising six technical experts and 10 staff for the Company s spport fnctions. All of these staff are shared with Marel & Prom. The expiry or fll or partial non-performance of this contract cold disrpt the Company s operations if it is nable to perform the relevant fnctions internally. It cold also generate signifi cant costs to ensre that these services are maintained (either de to the hiring of new personnel needed to ensre the performance of these fnctions internally, or the need to se other external service providers). Any change in the control of Marel & Prom cold also affect the natre of relations between Marel & Prom and the Company, as well as the performance of the agreement at isse, which cold have a signifi cant detrimental impact on the organisation and operation of the Company. Moreover, as a reslt of its leaving the Marel & Prom Grop, the Company has committed sbstantial fi nancial and physical resorces in order to make a name for itself and bild its reptation and attractiveness amongst both its economic and fi nancial partners as well as its cstomers and sppliers. The Company cold sffer from a lack of name recognition. Finally, the Company, as a reslt of having less recognition or fewer fi nancial resorces, cold enconter diffi clties in negotiating agreements with existing or new partners nder conditions eqivalent to those obtained by Marel & Prom (particlarly for fi nancing) Risks related to shareholders and to the management of the Company As at the date of this Annal Report, Pacifi co, the principal shareholder of Marel & Prom, holds arond 25% of the Company s capital and voting rights. This signifi cant eqity interest cold delay or prevent a third party from prchasing the Company s secrities (particlarly throgh the lanch of a pblic offer) if Pacifi co does not spport sch an acqisition. Pacifi co s power to prevent or delay this type of transaction cold have a detrimental effect on the Company s liqidity and market price. In addition, the possibility that confl icts of interest may arise between the Company and Marel & Prom cannot be rled ot, particlarly given that there are Directors common to Marel & Prom and the Company, and becase as at the date of this Annal Report, the Chairman of the Board of Directors of the Company is also the Chairman of the Board of Directors of Marel & Prom and the crrent Depty Chief Exective Offi cer of the Company is also the Chief Exective Offi cer of Marel & Prom. 40 ANNUAL REPORT 2014

43 Risk factors 2 COMPANY INSURANCE Risks related to disptes With regard to the risk of disptes, the Company is not, as at the date of this Annal Report, involved in any governmental, legal or arbitration proceedings, and there is no other proceeding of this kind, inclding any pending or threatened proceeding of which the Company is aware, that cold have or has had a signifi cant impact on the Company s fi nancial position or profi tability within the last 12 months. Lastly, the Company is not aware of any ongoing adits or adits annonced by the tax administration, the URSSAF social secrity agency or the competition athority concerning the Company, or any similar annoncements concerning Seplat by the eqivalent local athorities. 2.5 COMPANY INSURANCE The Company has insrance policies to cover the following categories of risk: pblic liability of the management team; fi res, storms, natral disasters and water damage; theft, vandalism and glass damage; and liability for offi ces, not inclding professional pblic liability, and basic legal protection. In addition, as the Company, as at the date of this Annal Report, does not directly condct any exploration/prodction activity, no insrance policy has been taken ot to cover the risks associated with sch activities. ANNUAL REPORT

44 2 Risk factors 42 ANNUAL REPORT 2014

45 Corporate governance (Chairman s report prsant to Article L of the French Commercial Code) ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES AND EXECUTIVE MANAGEMENT Members of the Management and Spervisory Bodies of the Company and Seplat Potential confl icts of interest on the Company s administrative bodies and exective management COMPENSATION AND BENEFITS Compensation and benefi ts of all types given to corporate offi cers Eqity interest of corporate offi cers in the Company s capital OPERATION OF THE ADMINISTRATIVE AND MANAGEMENT BODIES Terms of offi ce of members of the administrative and management bodies Deliberations of the Board of Directors Assessment of the work of the Board of Directors Prevention of insider trading Information on the service contracts binding members of the administrative and management bodies to the Company or to any of its sbsidiaries Committees of the Board of Directors Declaration relating to corporate governance Internal control and risk management STATUTORY AUDITORS REPORT, PREPARED IN ACCORDANCE WITH ARTICLE L OF THE FRENCH COMMERCIAL CODE, ON THE REPORT PREPARED BY THE CHAIRMAN OF THE BOARD OF DIRECTORS OF THE COMPANY 68 ANNUAL REPORT

46 3 Corporate governance ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES AND EXECUTIVE MANAGEMENT In accordance with the provisions of Article L of the French Commercial Code, the Company adheres to the Corporate Governance Code for small and mid-cap companies pblished by Middlenext in December 2009 (see Section of this Annal Report). 3.1 ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES AND EXECUTIVE MANAGEMENT Members of the Management and Spervisory Bodies of the Company and Seplat Members of the management and spervisory bodies of the Company The Company is a pblic limited company (société anonyme) with a Board of Directors. A brief description of the key provisions of the Articles of Association and bylaws for the Board of Directors, particlarly its operating procedres and powers, can be fond in Section of this Annal Report. Unless otherwise specifi ed, references to the Articles of Association in this chapter mean the Articles of Association of the Company adopted by the Ordinary and Extraordinary General Shareholders Meeting of 7 October 2011 and later amended by the Ordinary and Extraordinary General Shareholders Meeting of 20 Jne (a) (i) Board of Directors Members of the Board of Directors The Board of Directors is composed of at least three members and at most twelve members, appointed by the Ordinary General Shareholders Meeting, barring legal exception in the case of mergers. The term of offi ce for Directors is three (3) years. Members of the Board of Directors may be re-elected. The version of the bylaws of the Board of the Directors of 22 September 2011 specifi es the criteria listed below that are reviewed by the Appointments and Compensation Committee and the Board in order to classify a Director as independent; it is specifi ed that the Board of Directors mst have at least two Independent Directors. A Director is deemed to be independent if he or she has no signifi cant fi nancial, contractal or family relationship that cold impair his or her independence of jdgement, in particlar a Director who: is neither an employee nor a corporate offi cer of the Company or of a company of the MPI Grop and has not been so in the last three years; is not a signifi cant cstomer, spplier or bank of the Company or of the MPI Grop, or for which the Company or the MPI Grop represents a signifi cant portion of its bsiness; is not a major shareholder in the Company, i.e. a shareholder who holds a large stake in a company that gives him or her signifi cant infl ence in decision-making; has no close family ties with a corporate offi cer of the Company or a major shareholder of the Company; and has not been an aditor of the Company dring the last three years. The independence criteria for Directors of the Company were reviewed in Following the meeting of the Board of Directors of the Company, which took place on 19 December 2014 after the meeting of the Appointments and Compensation Committee of 16 December 2014, the Independent Directors are: Ms Caroline Catoire; Ms Nathalie Delapalme; MACIF; and Mr Alexandre Vilgrain. 44 ANNUAL REPORT 2014

47 Corporate governance 3 ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES AND EXECUTIVE MANAGEMENT As at the date of this Annal Report, the members of the Board of Directors are as follows: Mr Agstine Ojnekw Avr, 56, Director Address: c/o Seplat - 25A Lgard Avene - Ikoyi - Lagos - Nigeria. Agstine Ojnekw Avr was appointed as a Director of the Company by the General Shareholders Meeting of 7 October 2011 for a term of three years, ntil the General Shareholders Meeting of 2014 called to approve the fi nancial statements for the year ended 31 December His term of offi ce was renewed for a period of three years by the Ordinary and Extraordinary General Shareholders Meeting of 19 Jne 2014, and will expire at the close of the General Shareholders Meeting called in 2017 to approve the fi nancial statements for fi scal year Mr Avr holds a Bachelor of Science degree in Geology from the University of Nskka in Nigeria and a post-gradate diploma in oil engineering from the University of Ibadan. Mr Avr has over 30 years experience in the oil and gas indstry. He began his career at the Nigerian National Petrolem Corporation, where he served for more than 12 years as a geologist for well placement, as a prodction seismologist and a reserves engineer. He then spent 10 years as Director of Exploration and then Technical Director at Allied Energy Resorces, a Nigerian oil prodction company. Mr Avr was also a member of the ministerial committee for the restrctring of the Directorate of Petrolem Resorces and an external consltant for the Senate Committee on Petrolem Resorces. He is a member and former Chairman of the Nigerian Oil Exploration Association. In 2002, Mr Avr formed Platform Petrolem Limited, a company in which he held the post of Managing Director ntil 2010, when he stepped down to become Managing Director of Seplat. Mr Xavier Blandin, 64, Director Address: c/o MPI - 51, re d Anjo Paris - France. Xavier Blandin has been a Director of the Company since 22 September His term of offi ce was renewed for a period of three years by the Ordinary and Extraordinary General Shareholders Meeting of 20 Jne 2013, and will expire at the close of the General Shareholders Meeting called in 2016 to approve the fi nancial statements for fi scal year He has also been Chief Exective Offi cer of the Company since 27 Agst A gradate of the HEC bsiness school in Paris and former stdent of the prestigios ENA administrative college, Xavier Blandin spent the early part of his career ( ) in the French civil service, notably with the Treasry Department. Dring this period, he was Depty Director for France at the International Monetary Fnd in Washington and fi nancial attaché at the French Embassy in the United States ( ), Head of the Banks and Banking Reglation offi ce at the French Treasry Department ( ), technical advisor to the government departments of Mr Cabana and sbseqently Mr Balladr ( ), Head of the Pblic Enterprise Offi ce ( ) and Assistant Director to the Treasry Department ( ). From 1991 to late December 2010, Mr Blandin worked in the banking sector, fi rst for Banqe Paribas ( ) and then for BNP Paribas, where he was a member of the Exective Committee of the Corporate Finance Department before becoming a Senior Banker. Ms Caroline Catoire, 59, Independent Director Address: c/o Metalor Technologies International SA - Avene d Vignoble - P.O Box 9 - CH-2009 Nechâtel - Switzerland. Caroline Catoire was appointed as Director of the Company by the General Shareholders Meeting of 19 Jne 2014 for a term of three years, ntil the General Shareholders Meeting called in 2017 to approve the fi nancial statements for fi scal year Ms Catoire is a gradate of the École Polytechniqe and of the prestigios Paris civil engineering school, the École Nationale des Ponts et Chassées. She began her career in 1980 in the Economic Stdies Department at Total, before moving to the Oil Trading Department. In 1990, she joined the Finance Department as Director of Management Control and later took on the role of Corporate Finance Director. In 2002, she was recrited by Sez as Exective Director of Sita France, with responsibility for fi nance, information systems and legal affairs. She joined the Sar Grop in 2009 as Chief Financial Offi cer and a member of the Exective Committee. Since November 2014, she has been Chief Financial Offi cer of the Metalor Grop. She is also a Director and a member of the Adit Committee of Crédit Agricole SA. Ms Nathalie Delapalme, 58, Independent Director Address: c/o MO IBRAHIM Fondation - 35, Portman Sqare - London W1H6LR - United Kingdom. Nathalie Delapalme was appointed as a Director of the Company by the General Shareholders Meeting of 7 October 2011 for a term of three years, ntil the General Shareholders Meeting of 2014 called to approve the fi nancial statements for the year ended 31 December Her term of offi ce was renewed for a period of three years by the Ordinary and Extraordinary General Shareholders Meeting of 19 Jne 2014, and will expire at the close of the General Shareholders Meeting called in 2017 to approve the fi nancial statements for fi scal year ANNUAL REPORT

48 3 Corporate governance ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES AND EXECUTIVE MANAGEMENT Ms Delapalme spent the early part of her career in the Senate, between 1984 and 1985 and then from 1997 to 2002, largely as an administrator and then as an advisor to the National Finance, Bdget and Acconts Commission. She was also a Depty Director serving nder the Minister for Development Cooperation between 1995 and 1997, and then became Africa advisor to the Minister for Foreign Affairs from 2002 to From 2007 to 2010 she held the position of General Inspector of Finances for the French Inspectorate-General of Finance (IGF), and in Jne 2010 she joined the Mo Ibrahim Fondation as Exective Director for Research and Pblic Policy. Mr Jean-François Hénin, 70, Chairman of the Board of Directors Address: c/o MPI - 51, re d Anjo Paris - France. Jean-François Hénin was appointed as a Director of the Company by the General Shareholders Meeting of 15 November 2010 for a term of three years, ntil the General Shareholders Meeting called in 2013 to approve the fi nancial statements for the year ended 31 December At its meeting of 15 November 2010, the Board of Directors elected Mr Hénin as Chairman and Chief Exective Offi cer of the Company. However, at its meeting of 22 September 2011, the Board of Directors decided to modify the management strctre of the Company and separate the positions of Chairman and Chief Exective Offi cer. Mr Hénin took offi cial note of the termination of his dties as Chairman and Chief Exective Offi cer. At the same meeting, and as a reslt of the change in the Company s management strctre, the Board of Directors appointed Mr Hénin as Chairman of the Board of Directors of the Company. The Ordinary and Extraordinary General Shareholders Meeting of 20 Jne 2013 decided to reappoint him for another threeyear term, ntil the end of the General Shareholders Meeting to be called in 2016 to approve the fi nancial statements for fi scal year Mr Hénin was Chief Exective Offi cer of Thomson CSF Finance, then of Alts ntil May He was then Chairman and Chief Exective Offi cer of Électricité et Eax de Madagascar from 1994 to Since that date, Mr Hénin has been a manager and partner at Etablissements Marel & Prom (a partnership limited by shares ntil 2004) with the role of Chairman and Chief Exective Offi cer of Aréopage. He became Chairman of the Management Board after the Company became a pblic limited company in December Since it adopted the stats of a pblic limited company with a Board of Directors in Jne 2007, he has served as Chairman of the Board of Directors and Chief Exective Offi cer of Etablissements Marel & Prom. He has been the Chairman of the Board of Directors of Etablissements Marel & Prom since 26 May MACIF (Mtelle Assrance des Commerçants et Indstriels de France), permanently represented by Mr Olivier Arlès, 47, Independent Director Address: MACIF - 2/4, re de Pied de Fond Niort Cedex - France. MACIF was appointed as a Director of the Company by the General Shareholders Meeting of 7 October 2011 for a term of three years, ntil the General Shareholders Meeting called in 2014 to approve the fi nancial statements for the year ended 31 December Mr Gérard Andreck was appointed permanent representative of MACIF on 26 October 2011 and resigned from this position on 26 March He was replaced by Mr Olivier Arlès on 24 April 2013, who was offi cially appointed as permanent representative on 24 April His term of offi ce was renewed for a period of three years by the Ordinary and Extraordinary General Shareholders Meeting of 19 Jne 2014, and will expire at the close of the General Shareholders Meeting called in 2017 to approve the fi nancial statements for fi scal year A property insrer (vehicles, hosing, etc.) since it was formed in 1960, MACIF has gradally diversifi ed its activities and is today present in health, pension schemes, savings, life insrance and banking. Mr Arlès, the permanent representative of MACIF, is a gradate of the École Polytechniqe, the Paris School of Economics (ENSAE) and the Centre d Étdes Actarielles (Centre for Actarial Stdies CEA) where he is a member of the Institte of Actaries. Mr Arlès began his career with the Commission de Contrôle des Assrances, Mtelles et Instittions de Prévoyance (CCAMIP) from 1992 to 2005, where he served sccessively as insrance commissionercontroller and Head of an Adit Team within the CCAMIP. He then joined the Mornay Grop in 2005 where he held the position of Health/Provident Technical Director ntil In 2008, he joined MACIF where he served as Actarial Director and then as Chief Financial Offi cer. Since 2012, he has been the Depty Chief Exective Offi cer for economic and fi nancial planning at MACIF. Mr Emmanel de Marion de Glatigny, 68, Director Address: c/o MPI - 51, re d Anjo Paris - France. Emmanel de Marion de Glatigny has been a Director of the Company since the General Shareholders Meeting of 15 November His term of offi ce was renewed for another three-year period by the Ordinary and Extraordinary General Shareholders Meeting of 20 Jne 2013, and will expire at the close of the General Shareholders Meeting called in 2016 to approve the fi nancial statements for fi scal year Mr de Marion de Glatigny holds degrees from the École Spériere de Commerce in Marseille (Eromed), the Centre d Étdes d Commerce Extérier and the University of the Avergne (in asset management). He started his career in 1973 in the Sales 46 ANNUAL REPORT 2014

49 Corporate governance 3 ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES AND EXECUTIVE MANAGEMENT Department at Atomobiles Pegeot, where he held a nmber of different positions. In 1987, he moved into fi nancial management, taking p the role of Depty Director of the SOCIA and SOFIB banks. In 1990, Mr Marion de Glatigny joined Colbert bank, a sbsidiary of Crédit Lyonnais, as a Director, contribting to the growth of life insrance company Elysis. In 1996, Elysis was taken over by Avip (an Allianz Grop company), where Mr Marion de Glatigny developed a network of introdcers in his role as Director. He left Allianz Grop in 2008 to set p an asset management conslting company. Mr Ambrosie Bryant Chkweloka Orjiako, 54, Director Address: c/o Seplat - 25A Lgard Avene - Ikoyi - Lagos - Nigeria. Ambrosie Bryant Chkweloka Orjiako was appointed as a Director of the Company by the General Shareholders Meeting of 7 October 2011 for a term of three years, ntil the General Shareholders Meeting called in 2014 to approve the fi nancial statements for the year ended 31 December His term of offi ce was renewed for a period of three years by the Ordinary and Extraordinary General Shareholders Meeting of 19 Jne 2014, and will expire at the close of the General Shareholders Meeting called in 2017 to approve the fi nancial statements for fi scal year Mr Orjiako holds a doctorate in medicine and srgery from the University of Calabar in Nigeria. He worked as an intern in the srgery nit at Lagos University Teaching Hospital (LUTH) from 1989 to In 1996, Mr Orjiako set p the Daniel Orjiako Memorial Fondation (DOMF), which fi nances brsary programmes for disadvantaged stdents. In 2006, he attended the Owner/President Management programme at Harvard University. Mr Orjiako has over 25 years experience in varios bsiness sectors in Nigeria, inclding maritime transport, pharmaceticals, insrance and oil and gas. Mr Alexandre Vilgrain, 59, Independent Director Address: c/o SOMDIAA - 39 re Jean-Jacqes Rossea Paris - France. Alexandre Vilgrain was appointed as a Director of the Company by the General Shareholders Meeting of 15 November 2010 for a term of three years, ntil the General Shareholders Meeting called in 2013 to approve the fi nancial statements for the year ended 31 December The Ordinary and Extraordinary General Shareholders Meeting of 20 Jne 2013 decided to reappoint him for another threeyear term, ntil the end of the General Shareholders Meeting to be called in 2016 to approve the fi nancial statements for fi scal year Mr Vilgrain has been Chief Exective of the Somdiaa Grop since Appointed to scceed his father, Jean-Lois Vilgrain, as Head of the Grop, he now rns all Somdiaa sbsidiaries and holds varios offi ces within other companies (CARE and SIDA Enterprises). With extensive experience of Africa s economic development and as Chief Exective of a leading African food processing grop, Mr Vilgrain has been Chairman of the Conseil Français des Investissers en Afriqe (French Concil of Investors in Africa CIAN) since Having joined the family company in 1979 after stdying Law at the Paris II Panthéon-Assas University, Mr Vilgrain held varios positions within the family bsiness in Africa, Asia and Erope. In 1985, he fonded Délifrance Asia, a French-style café-bakery chain with otlets in a nmber of contries across Asia. The sccess of this new concept in the region allowed Mr Vilgrain to have the company listed on the Singapore Stock Exchange in 1996, before leaving this position in 1998 to focs on the Grop s activities in Africa. (ii) Positions and offices held by members of the Board of Directors in other companies Mr Agstine Ojnekw Avr Positions held in French companies None. Positions held in foreign companies Agstine Ojnekw Avr is a Director, Managing Director, and Chairman of the Seplat bid tender committee. He has also served as a member of the National Committee on Local Content Development, an advisor for Platform Petrolem Limited and Director of Professional Spport Limited (which he also fonded). He was previosly the Managing Director of Platform Petrolem Limited and Chairman of the Technical Sb-committee, which helped to draft the Local Content Act of Mr Xavier Blandin Positions held in French companies Mr Blandin was a Director of varios SOFICA companies dring fi scal year Since 2011, Mr Blandin has been a Director of Marel & Prom and Fideal. He is the Chairman of Fistra Conseil SAS. Positions held in foreign companies None. ANNUAL REPORT

50 3 Corporate governance ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES AND EXECUTIVE MANAGEMENT Ms Caroline Catoire Positions held in French companies Director of Crédit Agricole SA. Positions held in foreign companies None. Ms Nathalie Delapalme Positions held in French companies Since 2010, Nathalie Delapalme has been a member of the Spervisory Board of CFAO and a Director of Marel & Prom. Positions held in foreign companies None. Jean-François Hénin Positions held in French companies From 2010 to 2014, Jean-François Hénin served as (i) Chairman and Chief Exective Offi cer of Etablissements Marel & Prom (he has not been Chief Exective Offi cer since 27 Agst 2014), of the Company (ntil 22 September 2011) and of Marel & Prom Volney 5; (ii) Chairman of the Management Board of Pacifi co; (iii) Chairman of the Board of Directors of the Company (from 22 September 2011), (iv) Chairman of Marel & Prom West Africa; Marel & Prom Assistance Techniqe; Caroil SAS (ntil 2010) and Marel & Prom Volney 2; Marel & Prom Venezela (ntil 1 April 2011), Marel & Prom Per Holdings, Marel & Prom Namibia and Marel & Prom Volney 6; (v) Director of Pacifi co Forages and EO2 and (vi) a member of the Spervisory Board of CIMV. Positions held in foreign companies From 2010 to 2014, Jean-François Hénin served as (i) Chairman and Chief Exective Offi cer of Marel & Prom Congo (Congo) and Zetah Marel & Prom Congo (Congo) (liqidated in 2011), (ii) Co- Managing Director of Marel & Prom Colombia BV (Netherlands), Marel & Prom Netherlands BV (Netherlands) and Marel & Prom Drilling Services BV (Netherlands), (iii) General Director of Prestoil Koilo (Congo) (ntil September 2013) and (iv) a Director of Zetah Nombi Ltd (Congo), Marel & Prom Exploration Prodction Tanzania Ltd (Tanzania), Panther Ereka Srl (Italy), Newton Energy Ltd (Nigeria) (from 2013) and a Director of Seplat (Nigeria) (a position which came to a close at the end of 2013). Mr Hénin also represented Pacifi co on the Board of New Gold Mali ntil October Mr Emmanel de Marion de Glatigny Positions held in French companies From 2010 to 2014, Emmanel de Marion de Glatigny was Chairman of the Spervisory Board of Pacifi co, a Director of Etablissements Marel & Prom, Pacifi co Forages and Safetic (formerly Easydentic) (liqidated in Febrary 2012) and Chairman of Glatigny Patrimoine SAS. Positions held in foreign companies None. MACIF (Mtelle Assrance des Commerçants et Indstriels de France), permanently represented by Olivier Arlès. Positions held in French companies by MACIF In 2014 MACIF served as (i) Director of Altima Cortage SA ntil 19 December 2014; Avise SAS and BPCE Assrances SA; CEREMH (Association); Chèqe Domicile SA; Compagnie Foncière de la MACIF SAS and Domicors Holding SAS ntil 5 December 2014; Enercoop SCIC ntil 29 September 2014; EQUIGEST from 15 May 2014; ESFIN SAS; France Active SIFA; Foncière de Ltèce SA; Foncière Inéa from 18 November 2014; Gestépargne Investissements Services SA ntil 24 Jne 2014; GIE IMH; MACIF Gestion SA ntil 27 Jne 2014; MACIF Participations SAS; Macifi lia SA; OFI Holding; SICAVs OFI Bond Allocation, OFI Convertibles, OFI Investment Grade, OFI Palmarès Actions Erope; OFI SMIDCAP Opportnité; OFI Trésor ISR ntil 13 November 2014; OFIVALMO Partenaires; SECTA; SOCRAM Banqe; Solaire Direct; S2IEM from 6 Jne 2014; THEMIS SA; QUALIDOM ntil 31 October 2014; (ii) member of the Spervisory Board of Altima Assrances ntil 19 December 2014, D ARVA; DV Holding; GPIM; Inter Mtelles Assistance; Inter Mtelles Entreprises from 6 May 2014; Mtavie; (iii) Chairman and member of the strategic committee of IDMACIF ntil 30 Janary 2014; (iv) member of the Spervisory Board of OFI MGA and OFI Investment Soltions; (v) member of the Strategy Committee of SIPEMI; and (vi) observer at Foncière Inéa ntil 18 November 2014 and (vii) member of the Management Committee of SFEREN Réparations. In 2013 MACIF served as (i) Director of Altima Cortage SA; Avise SAS, BPCE Assrances SA; CEREMH (Association); Chèqe Domicile SA; Compagnie Foncière de la MACIF SAS, Domicors Holding SAS; Enercoop SCIC; ESFIN SAS; France Active SIFA; Foncière de Ltèce SA; Gestépargne Investissements Services SA; GIE IMH; MACIF Gestion SA; MACIF Participations SAS; Macifi lia SA; OFI Holding; SICAVs OFI Bond Allocation, OFI Convertibles, OFI Ero Investment Grade and OFI Palmarès Actions Erope; OFI SMIDCAP Opportnité; OFI Tresor ISR; OFIVALMO Partenaires; SECTA; SOCRAM Banqe; Solaire Direct; 48 ANNUAL REPORT 2014

51 Corporate governance 3 ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES AND EXECUTIVE MANAGEMENT THEMIS SA; QUALIDOM; (ii) Chair and Director of ARDEVIE; (iii) member of the Spervisory Board of Altima Assrances, D ARVA; DV Holding; GPIM; Inter Mtelles Assistance; Mtavie; OFI Investment Soltions; (iv) Chairman and member of the strategic committee of IDMACIF; (v) member of the Spervisory Board of OFI MGA; (vi) member of the Strategy Committee of SIPEMI; (vii) observer at Foncière Inéa; (viii) fll member of the GEMA association; and (ix) member of the Management Committee of SFEREN Réparations. In 2012 MACIF served as (i) Director of ADI Alternative Investments SA, Altima Cortage SA, Avise SAS, BPCE Assrances SA, CEREMH (Association); Chèqe Domicile SA, Compagnie Foncière de la MACIF SAS, Domicors Holding SAS, Enercoop SCIC, ESFIN SAS and RIED (Résea International Éco Développement); France Active SIFA; Foncière de Ltèce SA, Gestépargne Investissements Services SA and GIE IMH; GIE, GIE Navmt GIE, MACIF Gestion SA, MACIF Participations SAS and Macifi lia SA; Meillertax SA, OFI AM SA and OFI Holding; OFI Convertibles; OFI Ero Soverains; OFI Ero Investment Grade; OFI Palmarès Actions Erope; OFI SMIDCAP Opportnité; OFI Tresor ISR; SECTA; SOCRAM Banqe; Solaire Direct; QUALIDOM; (ii) Chairman and Director of ARDEVIE; (iii) member of the Spervisory Board of Altima Assrances; D ARVA; DV Holding; GPIM; Inter Mtelles Assistance; Mtavie; OFI Investment Soltions; OFIVALMO Partenaires; Rencontres Sociales; (iv) Chairman and member of the strategic committee of IDMACIF; (v) member of the Spervisory Board of OFI MGA; (vi) member of the Strategy Committee of SIPEMI; (vii) observer at Foncière Inéa; and (viii) fll member of the GEMA association. In 2011 MACIF served as (i) Director of ADI Alternative Investments SA, Altima Cortage SA, Avise SAS, BPCE Assrances SA, Chèqe Domicile SA, Compagnie Foncière de la MACIF SAS, Domicors Holding SAS, Enercoop SCIC, ESFIN SAS, Foncière de Ltèce SA, Gestépargne Investissements Services SA, GIE IMH GIE, GIE Navmt GIE, MACIF Gestion SA, MACIF Participations SAS, Macifi lia SA, Meillertax SA, OFI AM SA, OFI Holding (formerly OFI INSTIT) SA, OFI Participations SA, Secta SA, Socram Banqe SA and Solaire Direct SA; (ii) Chairman and Director of ARDEVIE; (iii) member of the Spervisory Board of Altima Assrances SA, D ARVA SA, DV Holding SAS, GPIM SAS, Inter Mtelles Assistance SA, Mtavie SA, OFI Private Eqity Capital SCA, OFI Private Eqity SA and Ofi valmo Partenaires SA; (iv) observer of Foncière Inéa; (v) member of GEMA; (vi) member of the GIE MACIF Mtavie Assrance Vie GIE and GIE Services Assrances GIE; (vii) Chairman and member of the strategic committee of IDMACIF SAS; (viii) member of the advisory committee of Imagecom SAS; (ix) member of the Boards of OFI MGA SAS and UES d RES de l Offre de Services ax Personnes à Domicile; and (x) a member of the Spervisory Board of OFI Investment Soltions SAS. In 2010 MACIF was (i) a Director of ADI Alternative Investments SA, Altima Cortage SA, Avise SAS, BPCE Assrances SA, Chèqe Domicile SA, Compagnie Foncière de la MACIF SAS, Domicors Holding SAS, Enercoop SCIC, ESFIN SAS, Foncière de Ltèce SA, Gestépargne Investissements Services SA, GIE IMH GIE, GIE Navmt GIE, MACIF Gestion SA, MACIF Participations SAS, Macifi lia SA, Meillertax SA, OFI AM SA, OFI Holding (formerly OFI INSTIT) SA, OFI Participations SA, Oterom Holding SAS, Secta SA, Socram Banqe SA and Solaire Direct SA; (ii) Chairman of the Spervisory Board of Inservio SAS; (iii) a member of the Spervisory Boards of Altima Assrances SA, D ARVA SA, DV Holding SAS, GPIM SAS, Inter Mtelles Assistance SA, Mtavie SA, OFI Private Eqity Capital SCA, OFI Private Eqity SA and Ofi valmo Partenaires SA; (iv) an observer on the Board of Foncière Inéa; (v) member of GEMA; (vi) a member of the GIE MACIF Mtavie Assrance Vie GIE and GIE Services Assrances GIE; (vii) Chairman and member of the strategic committee of IDMACIF SAS; (viii) a member of the advisory committee of Imagecom SAS; (ix) Chairman of the Strategy and Partnerships Committee of Meillertax SA; (x) a member of the Board of OFI MGA SAS and UES d RES de l Offre de Services ax Personnes à Domicile; and (xi) a member of the Spervisory Board of OFI Investment Soltions SAS. Positions held by MACIF in foreign companies In 2014 MACIF served as (i) Director of Gropement Mtaliste por la Prévoyance (Tnisia); Vivim (Belgim). In 2013 MACIF served as (i) Director of Gropement Mtaliste por la Prévoyance (Tnisia) and Eresa Holding (Lxemborg); Vivim (Belgim). In 2012 MACIF served as (i) Director/Vice-Chairman of Atlantis Segros and Atlantis Vida in Spain; (ii) Director of: Gropement Mtaliste por la Prévoyance (Tnisia), Eresa Holding and Eresa Life (Lxemborg); MACIF Zycie (Poland); Société d Assrance de Prévoyance et de Santé (Algeria) and Vivim (Belgim). In 2011 MACIF served as (i) Director/Vice-Chairman of Atlantis Segros and Atlantis Vida in Spain; (ii) Director of: Gropement Mtaliste por la Prévoyance (Tnisia), Eresa Holding (and Secretary) and Eresa Life (Lxemborg); PARTISAGRES (Portgal); Tw Tw (Poland); and Vivim (Belgim). In 2010 MACIF served as (i) a Director of Vivim in Belgim, Atlantis Segros and Atlantis Vida in Spain, Daman in Tnisia, Eresa Holding and GEIE in Lxemborg and Unipol in Italy; and (ii) a member of the Spervisory Board of Tw Tw in Poland. ANNUAL REPORT

52 3 Corporate governance ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES AND EXECUTIVE MANAGEMENT Offices held in French companies by Olivier Arlès, the permanent representative appointed by MACIF In 2014 Olivier Arlès served as (i) a Director of Compagnie Foncière de la MACIF SAS, GIE MMF, OFI Asset Management SA, MACIF Gestion SA ntil Jne 2014, and OFI Holding from Jne 2014; (ii) member of the Management Board of Mtavie; (iii) permanent representative of MACIF, itself a member of the Spervisory Board at OFI Investment Soltions, permanent representative of MACIF, a member of the Spervisory Board at OFI MGA SAS; permanent representative of MACIF Participations SA and Director of Foncière de Ltèce; (iv) a member of the Management Committee of SIEM SAS; (v) Chairman and member of the Spervisory Board of GPIM and Chairman and member of the Strategy Committee of MACIFIMO; (vi) member of the Spervisory Board of New Alpha AM, IME (from December 2014), SECURIMUT from October 2014 and MACIFIMO AdB (formerly GPIM, where he also served as Chairman). In 2013 Mr Arlès served as (i) a Director of Compagnie Foncière de la MACIF SAS, MACIF Gestion SA, OFI Asset Management SA and OFI Bon Allocation (SICAV, ntil March 2013); (ii) the permanent representative of Mtavie, a Director at OFI Smidcap Opportnities (SICAV), OFI Tresor ISR (SICAV) and OFI Holding SA; the permanent representative of MACIF, itself a Director of OFI Ero Investment Grade (SICAV) and of OFI Palmares Actions Erope (SICAV, ntil March 2013) and member of the Spervisory Board of OFI Investment Soltions; permanent representative of MACIF Participations SA, a Director of Foncière de Ltèce; permanent representative of MACIF, a member of the Spervisory Board at OFI MGA SAS; (iii) a member of the Management Committee of SIEM SAS and a member of the Management Board of Mtavie SE; (iv) Chief Exective Offi cer of the MACIF Mtavie Finance GIE; (v) Chairman and member of the Spervisory Board of GPIM and Chairman and member of the Strategy Committee of MACIFIMO; (vi) member of the Spervisory Board of New Alpha AM (from October 2013); and (vii) observer at OFI Convertibles (SICAV, ntil April 2013). He was also Chief Exective Offi cer of GIE MMF. In 2012 Mr Arlès served as (i) a Director of Compagnie Foncière de la MACIF SAS, MACIF Gestion SA, OFI Asset Management SA and OFI Ero Soverains (SICAV); (ii) permanent representative of Mtavie, as a member of the Board at OFI Smidcap Opportnité (SICAV), OFI Tresor ISR (SICAV) and OFI Holding SA; the permanent representative of MACIF, Director of OFI Ero Investment Grade (SICAV) and OFI Palmares Actions Erope (SICAV); permanent representative of MACIF Participations SA, a Director of Foncière de Ltèce; the permanent representative of MACIF, a member of the Spervisory Board of OFI MGA SAS and OFI Investment Soltions SAS; (iii) a member of the Management Committee of SIEM SAS and a member of the Management Board of Mtavie SE; (iv) Chief Exective Offi cer of the MACIF Mtavie Finance GIE; (v) Chairman and member of the Spervisory Board of GPIM and Chairman and member of the Strategy Committee of MACIFIMO; and (vi) observer at OFI Convertibles (SICAV). In 2011 Mr Arlès served as (i) a Director of Compagnie Foncière de la MACIF SAS; (ii) permanent representative of Mtavie, a Director of Smidcap Opportnité (SICAV) and OFI Tresor ISR (SICAV); (iii) a member of the Management Committee of SIEM SAS; (iv) Chief Exective Offi cer of the MACIF Mtavie Finance GIE; and (v) observer at OFI Convertibles (SICAV). In 2010 None. Offices held in foreign companies by Olivier Arlès, the permanent representative appointed by MACIF Mr Arlès is a Director of OFI Lx (from September 2013). Mr Ambrosie Bryant Chkweloka Orjiako Positions held in French companies Mr Orjiako was a member of the Board of Directors of Marel & Prom from 31 March 2010 ntil his resignation on 26 March Positions held in foreign companies Mr Orjiako is Chairman and a Director of Seplat. He is also Chairman of Shebah Exploration and Prodction Company Limited and Chairman and Director of several Nigerian companies, inclding Zebbra Energy Limited, Shebah Marine Services Limited and Neimeth International Pharmaceticals Plc. In 2009, he already held the positions of Chairman and Chief Exective Offi cer of Shebah Exploration and Prodction Company Limited. He was also Chairman and Chief Exective Offi cer of Ordrec Investments Limited. Mr Alexandre Vilgrain Positions held in French companies Alexandre Vilgrain has been a member of the Board of Directors of Marel & Prom since 14 Jne Mr Vilgrain has served as Chairman & Chief Exective Offi cer of Somdiaa since 2006 (he has also been Somdiaa s permanent representative on the Board of Directors of Sominfor since 2009), of Conetrage and Alexandre Vilgrain Holding since 2009 and of Erope des Pains since May ANNUAL REPORT 2014

53 Corporate governance 3 ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES AND EXECUTIVE MANAGEMENT He has held the positions of Chairman of the Board of Directors of CIAN (since 2008), of Fromentiers de France (from 2009 to 2011) of which he became Chairman & Chief Exective Offi cer in 2012, and Chairman of Fromentiers Magasins (May 2012). Since 2008, he has been a Director of Care France, Secria and Sonopros (ntil 1 Janary 2012). Lastly, from 2009 to 2011, Mr Vilgrain served as the Managing Director of Fromimo and as a member of the Spervisory Board of CFAO. Positions held in foreign companies Alexandre Vilgrain has been Chairman & Chief Exective Offi cer of Saris-Congo since 2009 and of Le Grand Molin d Cameron (SGMC) since 2010 (he was previosly a Director, from 2006 onwards). From 2006 to 2012, he was a Director of the Gabonese company SMAG; of Société Scrière d Cameron (SOSUCAM), Compagnie Scrière d Tchad (CST), the US company Food Research Corporation and SUCAF Côte d Ivoire. Since 2012, he has also served as a Director of SUCAF Gabon and SUCAF RCA. (iii) Measres taken to promote balanced representation of men and women As at the date of this Annal Report and following the Company s Ordinary and Extraordinary General Shareholders Meeting of 19 Jne 2014, the Board of Directors comprises two women and seven men and is therefore compliant with the provisions of French Law of 27 Janary 2011 on balanced representation of men and women on Boards of Directors. (b) Chief Exective Officer Prsant to the provisions of Article 20 of the Company s Articles of Association, the meeting of the Board of Directors of 27 Agst 2014 appointed Xavier Blandin as Chief Exective Offi cer of the Company, replacing Michel Hochard, who previosly held the role from 22 September In addition to his role as Chief Exective Offi cer of the Company, Mr Blandin retains his role as a Director of the Company (see Section (i) of this Annal Report). Prsant to the legislative and stattory provisions, the Chief Exective Offi cer is vested with the broadest powers to act on behalf of the Company in all circmstances. He/she exercises these powers within the limit of the corporate prpose and sbject to those that the law expressly attribtes to the General Shareholders Meeting and to the Board of Directors. He/she represents the Company in its relations with third parties. The Company is bond even by acts of the Chief Exective Offi cer that are not within the scope of the corporate prpose, nless the Company can prove that the third party knew that the act was beyond the scope of said prpose or that the third party mst have been aware of this given the circmstances, with mere pblication of the Articles of Association being insffi cient to constitte sch proof. (c) Observer Roman Gozalo has been Company observer since 14 December Mr Gozalo developed his management expertise as exective manager of three sbsidiaries of the Total Grop from 1979 to 2002 and also as Administrative Director (General Secretary) of the Elf Grop from 1995 to He has held the offi ce of Chief Exective Offi cer at TotalFinaElf Norway. A member of the Management Board of Marel & Prom from 24 October 2005 to 14 Jne 2007, Mr Gozalo held the position of Chief Exective Offi cer from 30 Agst 2007 ntil 19 May He has been a Director of Marel & Prom since the General Shareholders Meeting of 12 Jne 2008 and was reappointed by the Ordinary and Extraordinary General Shareholders Meeting of 29 Jne (d) Management Boards The meeting of the Board of Directors of the Company of 27 Agst 2014 appointed Michel Hochard as Depty Chief Exective Offi cer and Xavier Blandin as Chief Exective Offi cer of the Company. Michel Hochard holds a degree from the Institt Commercial de Nancy (ICN). He is a qalifi ed chartered accontant and has served as an Internal Aditor in the Finance Department of Elf Aqitaine, Head of the Africa-Middle East Finance Department of that company, and as Chief Financial Offi cer of SNEAP and then of Elf Aqitaine Prodction. He was Depty Director of Hman Resorces at Elf Exploration Prodction and Director of Operations for PricewaterhoseCoopers BPO. Inter alia, he has held the positions of Chief Exective Offi cer of Etablissements Marel & Prom since 26 May 2014 and served as Chief Financial Offi cer of Etablissements Marel & Prom. Positions held in French companies Mr Hochard has been the Chief Exective Offi cer of Marel & Prom since 26 May Positions held in foreign companies Mr Hochard has been a Director of Seplat since 14 December He has also held the offi ce of Director of MPNATI (Switzerland) since Jne Within the Marel & Prom Grop, Mr Hochard has been Chief Exective of Marel & Prom Gabon (Gabon) since 30 Jne 2009 and of Qartier Général Marel & Prom (Gabon) since 30 Jne A Director of Marel & Prom Tanzania Ltd and Marel & Prom Exploration Prodction Tanzania Ltd, he has also served as the permanent representative of Etablissements Marel & Prom on the Board of Directors of Marel & Prom Congo (Congo) since 2009 and of Marel & Prom Volney 5 since December ANNUAL REPORT

54 3 Corporate governance ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES AND EXECUTIVE MANAGEMENT (e) Family ties As at the date of this Annal Report, there are no family connections between the members of the Board of Directors, the Chief Exective Offi cer and the Depty Chief Exective Offi cer. (f) Legal information As at the date of this Annal Report, and to the best of the Company s knowledge, dring the past fi ve years at least, no member of the Board of Directors, the Chief Exective Offi cer or the Depty Chief Exective Offi cer has been: convicted of frad; involved, as an exective or non-exective corporate offi cer, in any insolvency, seizre or liqidation; prevented by a cort from acting as a member of an administrative, management or spervisory body of an isser, or from being involved in managing or condcting the affairs of an isser; sbject to an offi cial pblic sanction issed by a stattory or reglatory athority (inclding designated professional bodies), with the exception of Mr Jean-François Hénin, who was censred by the disciplinary tribnal of the Atorité des Marchés Financiers (French Financial Markets Athority), which, by a decision dated 4 December 2008, ordered Marel & Prom and Mr Jean-François Hénin, Chairman of its Management Board at the time of the events, to pay fi nancial penalties of 300,000 and 200,000 respectively for failre to disclose accrate, fair and precise information to the pblic in two statements released on 10 Jne and 26 October The statement pblished in Jne 2005 inclded the third-party share in the oil reserves that the Company had jst acqired. The inclsion of this third-party share also skewed the cost price per barrel annonced to the pblic. The statement pblished in October 2005 indicated lower reserves and attribted the difference to a change in calclation criteria and the adoption of IFRS acconting standards withot explicitly mentioning the fact that an error had been made in inclding the third-party share in the Jne statement. The disciplinary tribnal stressed the importance for a hydrocarbon exploration and prodction company of making a fndamental distinction between its own share and a third-party share, and the clear anomaly cased by the inclsion of the third-party share in the price calclation. Frthermore, the AMF disciplinary tribnal also imposed a penalty on Mr Frédéric Bolet, the former Chief Exective Offi cer of Marel & Prom. Both Mr Hénin personally and Marel & Prom appealed this decision nder Articles R to R of the French Monetary and Financial Code. In a jdgment dated 2 Febrary 2010, the Paris Cort (g) of Appeal dismissed the appeals against the decision of the AMF disciplinary tribnal. Both, Mr Hénin personally and Marel & Prom decided not to lodge an appeal with the Cort of Cassation. Committees At the meeting of 22 September 2011, the Board of Directors of the Company adopted bylaws establishing specialised committees: an Adit Committee and an Appointments and Compensation Committee. The membership, operating rles and powers of the specialised committees are described in Section of this Annal Report Members of the management and spervisory bodies of Seplat Seplat is a company limited by shares incorporated nder Nigerian law. Since 14 April 2014, its shares have been listed on the Stock Exchanges in both London (LSE) and Lagos (NSE). It is governed by a Board of Directors and a Chief Exective Offi cer. (a) Board of Directors Seplat s Board of Directors was initially composed of fi ve members, inclding two Directors representing Shebah, one Director representing Platform and two Directors representing the Company, as well as a Managing Director, making a total of six members. If Seplat s shareholders decide to increase the nmber of Directors, each shareholder will be entitled to appoint additional Directors in proportion to their eqity interest in Seplat. Each of Seplat s shareholders may freely decide to dismiss the Director(s) it has appointed, sbject to notifying the other shareholders of their decision. As at the date of this Annal Report, Seplat s Board of Directors is composed of nine Directors, one Managing Director and two Exective Directors. The Board of Directors is chaired by a Director of Shebah or Platform. As at the date of this Annal Report, the Chairman of the Board of Directors since 3 March 2010 has been a Director of Shebah, Ambrosie Bryant Chkweloka Orjiako; the membership of the Board of Directors of Seplat is as follows: Mr Michel Hochard, 65, Director The biography of Michel Hochard can be fond in Section (d) of this Annal Report with regard to positions held in the Company. 52 ANNUAL REPORT 2014

55 Corporate governance 3 ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES AND EXECUTIVE MANAGEMENT Mr Macalay Agbada Ofrhie, 68, Director Macalay Agbada Ofrhie has been a Director of Seplat since 14 December He holds a Bachelor of Science degree from the University of Ibadan in Nigeria. He has over 30 years experience in the oil and gas sector in Nigeria. Now retired, he held several exective posts dring the corse of his career with the Nigerian National Petrolem Corporation and the Directorate of Petrolem Resorces. He was formerly Chief Exective Offi cer of the Nigerian Petrolem Development Company and Nigeria Gas Company, both sbsidiaries of the Nigerian National Petrolem Corporation. Ms Ifeko Marina Omoigi Okar, 51, Independent Director Ifeko Marina Omoigi Okar has been a Director of Seplat since 22 March She holds a Bachelor s degree in Acconting with fi rst class honors and an MSc in Management Science. Ms Omoigi Okar has over 30 years experience in the private and pblic sectors, where she has held varios positions on Boards of Directors and in exective management. She was previosly a partner at Arthr Andersen & Co (later KPMG Professional Services and Accentre) and Exective Chairwoman of the Federal Inland Revene Service of Nigeria. She is also a member of the Institte of Chartered Accontants of Nigeria and the Chartered Institte of Taxation of Nigeria. She is crrently Managing Director of Compliance Professionals Plc. Mr Charles Chined Okeahalam, 51, Independent Director Charles Chined Okeahalam has been a Director of Seplat since 22 March He holds a Ph.D. in Econometrics from the University of London, England, and a higher doctorate (D.Sc.) in banking and fi nance from the University of Exeter, England. Mr Okeahalam is the co-fonder and Chief Exective Offi cer of AGH Capital, a private eqity and investment fnd based in Johannesbrg, Soth Africa. Before fonding AGH Capital in 2002, he was the Liberty Life Chair Professor of Finance, Economics and Banking at the University of the Witwatersrand in Johannesbrg, Soth Africa. He has experience in fi nancial sector restrctring, capital market development and infrastrctre fi nancing and has served as a Non-Exective Director of a nmber of large companies. He was a Director of Cadiz Holding from 1999 to 2001, ABSA Corporate and Merchant Bank from 2001 to 2006, the Bond Exchange of Soth Africa from 2003 to 2009, Sn International Soth Africa from 2003 to 2005, National Discont Hose in Zimbabwe from 2001 to 2004 and Soth African Airways ( ), where he also held the posts of Chairman of the Adit Committee and Chairman of the Investment Committee. Mr Okeahalam has jst completed a twoyear contract nder which he was the non-exective Chairman of Société Générale Bank Nigeria (SGBN), now known as Heritage Bank. Mr Basil Efoise Omiyi, 68, Independent Director Basil Omiyi has been a Director of Seplat since 22 March He holds a Bachelor s degree in Chemistry and a postgradate diploma in Petrolem Technology. He joined the Shell Grop in 1970 as a trainee petrolem engineer, then held varios positions in the Shell Grop in the Petrolem Engineering, Prodction, Operations and External Affairs Departments in Nigeria, the Netherlands, and the United Kingdom before being appointed as Chief Exective Offi cer of Relations and the Environment at Shell Petrolem Development Company and joining its Board of Directors. In September 2004, he was appointed the fi rst Nigerian Chief Exective Offi cer of Shell Petrolem Development Company and manager of Shell s companies in Nigeria. He held these positions ntil his retirement in December 2009 after 39 years with the Shell Grop. Since 2006, he has also served as Chairman of the Oil Prodcers Trade section with the Chamber of Commerce and Indstry of Lagos, Nigeria. Mr Michael Richard Alexander, 66, Independent Director Michael Richard Alexander has been an Independent Director of Seplat since Jne In 1969, he gained a Bachelor of Science degree in Chemical Engineering, followed in 1970 by a Master of Science in Compter Control of Process Plants, both from the University of Manchester. He is a member of the Instittion of Engineering and Technology, the Instittion of Chemical Engineers, the Instittion of Gas Engineers and Managers and the Institte of Directors. He was the Chief Exective Offi cer of British Energy Grop plc from 2003 to 2005 and Exective Director of Centrica plc; prior to that, he held varios positions at British Gas plc, inclding that of Managing Director of British Gas Trading and Commercial Director of British Gas Exploration & Prodction. Before joining British Gas plc in 1991, he spent 25 years at BP plc, where he held varios positions. In addition to his offi ces at Seplat, he is also an Independent Director at the Payments Concil Limited and senior board advisor at EGS Limited. He is also a member of the Eropean Advisory Board of Landis & Gyr Limited. ANNUAL REPORT

56 3 Corporate governance ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES AND EXECUTIVE MANAGEMENT Lord Malloch-Brown, 60, Independent Director Lord Malloch-Brown has been an Independent Director of Seplat since Febrary He gained a BA in 1975 and an MA in history from Magdalene College, Cambridge University in 1976, as well as an MA in political science from the University of Michigan in Lord Malloch-Brown was a member of Prime Minister Gordon Brown s government from 2007 to 2009, with responsibility for strengthening relations with Africa and Asia. He was Chief of Staff at the United Nations and Depty Secretary General nder Kofi Annan from 2005 to For six years prior to that, he was a Director of the United Nations Development Programme. From 1994 to 1999, he was Vice-President in charge of External Affairs for the World Bank. Before that, he began his career as a jornalist with The Economist. Lord Malloch-Brown joined FTI Conslting in September 2010, where he is Chairman for the EMEA region. Lord Malloch-Brown also sits on the Royal Africa Society and on the Boards of Directors and advisory concils of not-for-profi t organisations sch as the International Crisis Grop and the Open Society Fondation. He was made a Life Peer and Privy Consellor when he joined the UK government in He is a member of the Hose of Lords and was made a peer by Her Majesty Qeen Elizabeth II in Mr Ambrosie Bryant Chkweloka Orjiako, 52, Chairman The biography of Ambrosie Bryant Chkweloka Orjiako can be fond in Section (a) (i) of this Annal Report with regard to positions held in the Company. Mr Damian Dinshiya Dodo (SAN), Independent Director Damian Dinshiya Dodo has been an Independent Director of Seplat since In 1985, he was awarded a law degree from Ahmad Bello University (Nigeria). He was called to the Nigerian bar in 1986 and in 2001, he was the yongest lawyer in Nigeria to receive the highest designation of Senior Advocate of Nigeria (SAN). In 2011, he was awarded the National Honor of Offi cer of the Order of the Federal Repblic of Nigeria by the President of Nigeria. Mr Dodo has also recently been made a member of the Nigerian Institte of Legal Stdies. Damian Dodo has worked for a signifi cant nmber of large companies in Nigeria, as well as for government and reglatory bodies in different bsiness sectors, and has sat on varios committees and grops in Nigeria. He crrently chairs the National Lottery Reglatory Commission in Nigeria and previosly chaired the Nigerian National Petrolem Corporation Commission of Inqiry, the Membership Committee for the Nigerian Bar and the Board of the National Agency against Hman Traffi cking. He is also a member of the Chartered Institte of Arbitrators in London. (b) Managing Director The Board of Directors meeting on 1 May 2010 appointed Agstine Ojnekw Avr as Chief Exective Offi cer of Seplat. The biography of Mr Avr can be fond in Section (a) (i) of this Annal Report with regard to positions held in the Company. (c) Exective Directors Mr Start Connal, 57, Exective Director Chief Operating Officer Start Connal has been an Exective Director of Seplat since 22 March He joined Seplat in 2010 as Chief Operating Offi cer to contribte the experience he has acqired in international greenfi eld and brownfi eld development operations. Mr Connal is an engineer by training, with over 30 years experience acqired with leading engineering companies (Aker Kvaerner, Amec Process and Energy, and Brown & Root and McDermott) and major oil and gas companies. He worked for the Shell Grop on the implementation of the Grop s long-term fi eld development strategy for the Brent fi eld. He then held a nmber of senior positions, inclding Director of Constrction and Engineering with the Detag Grop in Norway, where he worked on the development of new fi elds for Norsk Hydro, Statoil and Esso Norge. He then joined Centrica Energy, where he held varios positions over the corse of 10 years, inclding Project Director for new fi eld development and for the Langeled gas terminal. Over the last for years, he has held the positions of Chief Exective Offi cer and Contry Manager at Centrica Resorces in Nigeria. He then joined Seplat as Chief Operating Offi cer. Mr Roger Thompson Brown, 44, Exective Director Chief Financial Officer Roger Thompson Brown has been Chief Financial Offi cer and an Exective Director of Seplat since Jly In 1992, he was awarded a Bachelor of Science degree in Finance from the University of Dndee, in Scotland, followed in 1993 by a Master of Science in Finance from the University of Ulster. He is also a member of the Institte of Chartered Accontants of Scotland. 54 ANNUAL REPORT 2014

57 Corporate governance 3 ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES AND EXECUTIVE MANAGEMENT He has 18 years experience in the energy sector, primarily in emerging markets, with signifi cant experience of major projects on the African continent. Before joining Seplat, he was Managing Director, Oil and Gas EMEA for Standard Bank Grop. From 2001 to 2005, he was Director of the Energy, Infrastrctre and Services teams at Standard Bank. Before joining Standard Bank, he worked at PricewaterhoseCoopers, advising government and private eqity promoters in the United Kingdom and the Middle East Potential confl icts of interest on the Company s administrative bodies and exective management Under the terms of Articles L and L of the Commercial Code, Jean-François Hénin is party to (i) two service agreements conclded by the Company and Seplat and by the Company and Etablissements Marel & Prom, (ii) a mandate given by the Company to Seplat (it shold be noted that this mandate was terminated by Seplat s stock market listing on 14 April 2014) and (iii) the partnership agreement conclded by the Company and Etablissements Marel & Prom. Mr Hénin is both a Director and the Chairman of the Company s Board of Directors, and was Chairman and Chief Exective Offi cer of Etablissements Marel & Prom p ntil 26 May He remains the Chairman of the Board of Directors of Etablissements Marel & Prom. He was a Director of Seplat p ntil the end of fi scal year Frthermore, he is also a shareholder of the Company and of Etablissements Marel & Prom throgh Pacifi co. Conseqently, the two aforementioned agreements were sbmitted for the prior athorisation of the Board of Directors and for the approval of the Company s General Shareholders Meeting as part of the related-party agreements procedre. In addition, Xavier Blandin, Nathalie Delapalme, Emmanel de Marion de Glatigny and Alexandre Vilgrain, Directors of the Company and Roman Gozalo, observer, are also Directors of Etablissements Marel & Prom. With the exception of the foregoing, to the Company s knowledge, as at the date of this Annal Report, there are no potential confl icts of interest for (i) members of the Board of Directors between their dties in respect of the Company and their private interests, or (ii) the Chief Exective Offi cer, Xavier Blandin, and the Depty Chief Exective Offi cer, Michel Hochard, between their dties in respect of the Company and their private interests. Frthermore, Directors have an obligation to contribte to good governance as defi ned in the Middlenext Corporate Governance Code (code of ethics for Board members). ANNUAL REPORT

58 3 Corporate governance COMPENSATION AND BENEFITS 3.2 COMPENSATION AND BENEFITS Compensation and benefits of all types given to corporate officers For the year ended 31 December 2014, with the exception of the Chairman of the Board of Directors, the Chief Exective Offi cer and the Depty Chief Exective Offi cer (see Section of this Annal Report), no corporate offi cer of the Company received compensation from the Company, for any reason, other than the attendance fees awarded each year to members of the Company s Board of Directors (see Section of this Annal Report) and paid in Non-exective corporate officers The members of the Board of Directors of the Company receive Directors fees which are voted on each year by the General Shareholders Meeting. On the recommendation of the Appointments and Compensation Committee, the Board of Directors distribtes the bdget for Directors fees according to the following rle: a fi xed portion, which acconts for 50% of the overall bdget and is distribted proportionally over the period in which the dties are performed; and a variable portion, acconting for 50% of the overall bdget, which is allocated based on attendance and on the fnctions performed by each member (membership of a specialised committee, or performance of the fnctions of Chairman of the Board of Directors). The amont of the attendance fees to be distribted among Board members in respect of fi scal year 2014 was set at 360,000 by the Fifth Resoltion of the Ordinary and Extraordinary General Shareholders Meeting of 19 Jne At its meeting of 25 March 2015, the Company s Appointments and Compensation Committee recommended that the Board of Directors distribte the sm of 353,518 to Directors as attendance fees for 2014, in accordance with the breakdown shown in the table below, which was approved by the Board of Directors at its meeting of 30 March The members of the Board of Directors of the Company received the following amonts (indicated in the table below in eros) as attendance fees for fi scal years 2013 and 2014, paid in 2014 and 2015 respectively: Board member Fixed fees Variable fees Total Mr Avr 14,000 11,111 1,802 4,831 15,802 15,942 Mr Blandin * 14,000 11,111 15,495 14,372 29,495 25,483 Ms Catoire 7,518-3,604-11,121 - Ms Delapalme 14,000 11,111 23,964 16,908 37,964 28,019 Mr Gozalo 14,000 11,111 14,414 10,870 28,414 21,981 Mr Hénin *** 64,000 61,111 46,216 44, , ,604 MACIF ** 14,000 11,111 10,811 4,831 24,811 15,942 Mr de Marion de Glatigny 14,000 11,111 30,270 17,995 44,270 29,106 Mr Orjiako 14,000 11,111 3,604 4,831 17,604 15,942 Mr Vilgrain 14,000 11,111 19,820 10,870 33,820 21,981 TOTAL 183, , , , , ,000 * Mr Xavier Blandin was sbseqently appointed as Chief Exective Offi cer of the Company on 27 Agst ** Mr Gérard Andreck was appointed permanent representative of MACIF on 26 October He resigned from this position on 26 March 2013 and was replaced by Mr Olivier Arlès on 24 April *** For the year ended 31 December 2013, Mr Hénin, in his capacity as Chairman of the Board of Directors, received additional attendance fees of 80,000; of this amont, 50,000 was paid in respect of the fi xed portion and 30,000 in respect of the variable portion. For the year ended 31 December 2014, Mr Hénin, in his capacity as Chairman of the Board of Directors, received additional attendance fees of 80,000; of this amont, 50,000 was paid in respect of the fi xed portion and 30,000 in respect of the variable portion. 56 ANNUAL REPORT 2014

59 Corporate governance 3 COMPENSATION AND BENEFITS In addition, corporate offi cers receive no special benefi ts in kind. There is no spplementary pension scheme in place for corporate offi cers Exective corporate officers (a) Compensation of the Chairman, Chief Exective Officer and Depty Chief Exective Officer On the recommendation of the meeting of the Appointments and Compensation Committee of 19 Jne 2014, the Board of Directors, meeting on the same day, maintained the fi xed compensation for Michel Hochard, Chief Exective Offi cer on that date, at 150,000 gross per annm for fi scal year 2014 and decided to bring the Chairman s compensation into line with this at 150,000 gross per annm. Following the changes made to the exective management of the Company at the Board of Directors meeting of 27 Agst 2014, it was decided that for the fi scal year ending on 31 December 2014, the annal compensation awarded to Mr Hochard, who became Depty Chief Exective Offi cer on that date, wold be maintained at 150,000. Mr Blandin, who was appointed Chief Exective Offi cer with effect from that date, wold receive annal compensation of 120,000. For fi scal year 2014, Michel Hochard, Chief Exective Offi cer of the Company ntil 27 Agst 2014 and Depty Chief Exective Offi cer thereafter, was also a Director of Seplat. He received no compensation in this respect in fi scal year 2014 from Seplat. The exective corporate offi cers of the Company receive no benefi ts in kind. The exective corporate offi cers of the Company receive no compensation or benefi ts other than those described in this section of the Annal Report and do not receive a severance package or any other sm which is or might be de when they leave the Company. DETAILS OF COMPENSATION, OPTIONS AND SHARES GRANTED TO EXECUTIVE CORPORATE OFFICERS Jean-François Hénin: Chairman of the Board of Directors Compensation de in respect of the fi scal year 50, ,000 Vale of options awarded dring the fi scal year - - Vale of performance options awarded dring the fi scal year - - Attendance fees 105, ,216 TOTAL 155, ,216 Michel Hochard: Chief Exective Officer ntil 27 Agst 2014 and Depty Chief Exective Officer from that date Compensation de in respect of the fi scal year 50, ,000 Vale of options awarded dring the fi scal year - - Vale of performance options awarded dring the fi scal year - - Attendance fees - - TOTAL 50, ,000 Xavier Blandin: Chief Exective Officer from 27 Agst 2014 Compensation de in respect of the fi scal year - 41,384 Vale of options awarded dring the fi scal year - - Vale of performance options awarded dring the fi scal year - - Attendance fees 25,483 29,495 TOTAL 25,483 70,879 ANNUAL REPORT

60 3 Corporate governance COMPENSATION AND BENEFITS SUMMARY TABLE OF COMPENSATION GRANTED TO EXECUTIVE CORPORATE OFFICERS Amonts de Amonts paid Amonts de Amonts paid Jean-François Hénin: Chairman of the Board of Directors Fixed compensation 50,000 50, , ,000 Non-recrring compensation Attendance fees 105, , , ,216 Benefi ts in kind TOTAL 155, , , ,216 Michel Hochard: Chief Exective Officer ntil 27 Agst 2014 and Depty Chief Exective Officer from that date Fixed compensation 50,000 50, , ,000 Variable compensation Non-recrring compensation Attendance fees Benefi ts in kind TOTAL 50,000 50, , ,000 Xavier Blandin: Chief Exective Officer from 27 Agst 2014 Fixed compensation N/A N/A 41,384 41,384 Variable compensation N/A N/A - - Non-recrring compensation N/A N/A - - Attendance fees 25,483 25,483 29,495 29,495 Benefi ts in kind N/A N/A - TOTAL 25,483 25,483 70,879 70,879 (b) Amonts provisioned by the Company and its sbsidiaries to provide pension, retirement or similar benefits for exectives There is no specifi c spplementary pension scheme for exectives. They will be entitled to the same pension schemes as those applicable to ftre employees of the Company Stock options and bons shares The Board of Directors of the Company received athorisation from the Ordinary and Extraordinary General Shareholders Meeting of 7 October 2011, to isse bons shares to eligible employees and corporate offi cers, p to a limit of 1% of the share capital (Twenty-First Resoltion). As this athorisation was valid for 38 months, ntil 7 December 2014, shareholders reqested and obtained a new athorisation at the Ordinary and Extraordinary General Shareholders Meeting of 19 Jne At its meeting of 27 March 2013, the Board of Directors of the Company approved the principle of an allotment of bons shares to the Company s Chief Exective Offi cer, sbject to performance conditions, as recommended by the Appointments and Compensation Committee meeting of 25 March On 20 Jne 2013, on the recommendation of the Appointments and Compensation Committee meeting of 25 March 2013, the Board of Directors of the Company decided on three mtally independent performance conditions (the sale of a portion of the eqity interest in Seplat, the diversifi cation of Company assets and the level of the share price), setting a limit of 45,000 on the nmber of bons shares that can be allotted if these conditions are srpassed. At its meeting of 26 March 2014, the Board of Directors of the Company established that these three conditions had been met and some had been srpassed; accordingly, 45,000 shares were allotted to the Chief Exective Offi cer. Frthermore, a long-term incentive programme for employees and corporate offi cers, which may take the form of an allotment of bons preference shares (share category to be created in advance), convertible to ordinary shares, was granted shareholder approval at the Combined General Shareholders Meeting of 19 Jne As at the date of registration of this Annal Report, no preference shares have been awarded nder this programme. 58 ANNUAL REPORT 2014

61 Corporate governance 3 COMPENSATION AND BENEFITS BONUS SHARES ALLOTTED TO EACH CORPORATE OFFICER Bons shares allotted by the General Shareholders Meeting No. and date of plan Nmber of shares allotted dring the fiscal year Vesting date Availability date Performance conditions Jean-François Hénin: Chairman of the Board of Directors None None None - - None TOTAL None None - - None Michel Hochard: Chief Exective Officer* Single shares Extraordinary General Shareholders Meeting of 7 October 2011 and Board of Directors meeting of 26 March 45, Jne Jne 2017 sale of a portion of Seplat s capital diversifi cation of the Company s assets level of the share price 2014 TOTAL None 45, None Xavier Blandin: Chief Exective Officer since 27 Agst 2014 None None None - - None TOTAL None None - - None * Mr Michel Hochard was Chief Exective Offi cer of the Company ntil 27 Agst 2014, when he became Depty Chief Exective Offi cer.. Bons shares allotted and made available to each corporate officer No. and date of plan Nmber of shares made available dring the fiscal year Vesting conditions Jean-François Hénin Chairman of the Board of Directors Xavier Blandin Chief Exective Officer * Michel Hochard Depty Chief Exective Officer ** TOTAL * Mr Xavier Blandin was appointed Chief Exective Officer of the Company on 27 Agst ** Mr Michel Hochard was Chief Exective Officer of the Company ntil 27 Agst 2014, when he was appointed Depty Chief Exective Officer Eqity interest of corporate officers in the Company s capital As at 31 December 2014 and to the best of the Company s knowledge, the Company s corporate offi cers hold a total of 37,229,583 shares in the Company, representing 32.28% of its capital and 33.61% of the exercisable voting rights (verss 32.28% of theoretical voting rights). The members of the Board of Directors are sbject to the laws and reglations governing trading in secrities for which they have information that is not yet pblic. In addition to the applicable laws and reglations, the Company wishes to ensre prdent management of its secrities, in compliance with the reglations in force and, in accordance with the precationary principle, shall alert the corporate offi cers and its employees, as well as persons acting on behalf of the MPI Grop, to the rles associated with certain transactions on any fi nancial instrment, as defi ned in Article L of the French Monetary and Financial Code, which has been or will be issed by the Company and on derivatives and other instrments related to these secrities. In this respect, at its meeting of 22 September 2011, the Company s Board of Directors adopted a code of condct relating to the prevention of insider trading that entered into force following the Company s listing on the NYSE Eronext reglated market in Paris on 15 December 2011; a smmary of this code is provided in Section of this Annal Report. ANNUAL REPORT

62 3 Corporate governance COMPENSATION AND BENEFITS To the Company s knowledge, the detail of the eqity interests held in the Company by the corporate offi cers at 31 December 2014 is as shown in the table below. Member of the Board of Directors Shares Agstine Avr 0 Xavier Blandin 0 Caroline Catoire 0 Nathalie Delapalme 100 Jean-François Hénin (1) 28,749,616 MACIF 8,324,204 Emmanel de Marion de Glatigny (2) 144,097 Ambrosie Bryant Chkweloka Orjiako 0 Alexandre Vilgrain 0 Roman Gozalo 11,566 (1) Held by Pacifi co SA, of which Mr Hénin and the members of his family have majority control. (2) Mr de Marion de Glatigny owns 120,847 shares of the Company directly and 23,250 shares indirectly, throgh a Share Savings Plan held by his wife. 60 ANNUAL REPORT 2014

63 Corporate governance 3 OPERATION OF THE ADMINISTRATIVE AND MANAGEMENT BODIES 3.3 OPERATION OF THE ADMINISTRATIVE AND MANAGEMENT BODIES Terms of office of members of the administrative and management bodies The table below gives the dates on which the Company exectives were fi rst appointed and the dates on which their terms of offi ce expire. Name Date of appointment Date on which term of office expires Position Jean-François Hénin 15 November 2010 Emmanel de Marion de Glatigny 15 November 2010 Alexandre Vilgrain 15 November 2010 Xavier Blandin 22 September Agst 2014 Nathalie Delapalme 7 October 2011 MACIF, represented by Olivier Arlès * 7 October 2011 Ambrosie Bryant Chkweloka Orjiako 7 October 2011 Agstine Ojnekw Avr 7 October 2011 Caroline Catoire 19 Jne 2014 Michel Hochard ** 27 Agst 2014 General Shareholders Meeting called to approve the 2015 fi nancial statements General Shareholders Meeting called to approve the 2015 fi nancial statements General Shareholders Meeting called to approve the 2015 fi nancial statements General Shareholders Meeting called to approve the 2015 fi nancial statements General Shareholders Meeting called to approve the 2014 fi nancial statements General Shareholders Meeting called to approve the 2016 fi nancial statements General Shareholders Meeting called to approve the 2016 fi nancial statements General Shareholders Meeting called to approve the 2016 fi nancial statements General Shareholders Meeting called to approve the 2016 fi nancial statements General Shareholders Meeting called to approve the 2016 fi nancial statements General Shareholders Meeting called to approve the 2014 fi nancial statements Director/Chairman Director Director Director Chief Exective Offi cer Director Director Director Director Director Depty Chief Exective Offi cer * Gérard Andreck was appointed permanent representative of MACIF on 26 October He resigned from this position on 26 March 2013 and was replaced by Olivier Arlès on 24 April ** Michel Hochard was Chief Exective Offi cer of the Company ntil 27 Agst 2014; the Board of Directors decided to appoint Xavier Blandin as Chief Exective Offi cer with effect from that date, with Michel Hochard as Depty Chief Exective Offi cer. ANNUAL REPORT

64 3 Corporate governance OPERATION OF THE ADMINISTRATIVE AND MANAGEMENT BODIES Deliberations of the Board of Directors Dring the year ended 31 December 2014, the Board of Directors met fi ve times and the average attendance rate of its members was 79.17%. The table below shows the rate of Directors attendance at meetings of the Board of Directors of the Company held dring the year ended 31 December 2014: Board of Directors meetings Attendance rate 26 March % 23 April % 19 Jne % 27 Agst % 18 December % AVERAGE ATTENDANCE 79.17% The main agenda items discssed by the Board of Directors meetings in 2014 were: the proposed bdget for 2014; review and approval of the Company and consolidated fi nancial statements for the year ended 31 December 2013; proposed allocation of income for the year ended 31 December 2013 and dividend distribtion; notice of the Ordinary and Extraordinary General Shareholders Meeting; setting of the agenda and draft resoltions; creation of a sbsidiary; investment projects; and activation of the share reprchase plan; review of the fi nancial statements for the fi rst half of 2014; approval of the Bsiness Report on the fi rst half of 2014; draft press release on the reslts for the fi rst half of 2014; presentation of a year-end estimate for 2014 and the draft bdget for Assessment of the work of the Board of Directors Article 3 of the Company s bylaws of 22 September 2011 stiplate that the Board of Directors shold condct an annal assessment of its own operations and the preparation of its work, at the invitation of the Chairman of the Board. The assessment of the operation of the Board of Directors is performed in accordance with recommendation 15 of the Corporate Governance Code for small and mid-caps pblished by Middlenext in December 2009, to which the Company adheres. An evalation was condcted at the initiative of the Chairman of the Board of Directors, by means of a qestionnaire given to each member of the Board of Directors. This qestionnaire contained qestions regarding the membership of the Board of Directors (nmber of Directors, the nmber of Independent Directors, the professional backgronds of the Directors, average age, the nmber of women on the Board and the representation of foreign nationalities on the Board), the work of the Board of Directors (freqency of meetings, dration of meetings, attendance at meetings, qality of the fi les sent to the Directors before each meeting, the qality and qantity of the information provided and the qality of the mintes), the work of the committees, the effectiveness of the Board and the compensation of members of the Board of Directors. A smmary of the responses to the latest qestionnaires sent ot was presented to the Board of Directors on 30 March This selfassessment, which the Board of Directors discssed at its meeting of 30 March 2015, shows that Directors are generally satisfi ed with the membership, operation and effectiveness of the Board of Directors and with the compensation of members of the Board of Directors. However, members of the Board of Directors believe that consideration cold be given to Increasing the capability in the fi eld of energy and having a foreign, non-nigerian member on the Board, and that the information provided on the Company s operations cold be improved. 62 ANNUAL REPORT 2014

65 Corporate governance 3 OPERATION OF THE ADMINISTRATIVE AND MANAGEMENT BODIES Prevention of insider trading In order to ensre prdent management of its secrities, in compliance with the reglations in force and in accordance with the precationary principle, to alert the Directors, the Chairman, the Chief Exective Offi cer and, if applicable when sch positions exist, the Vice-Chairman, the Depty Chief Exective Offi cer (referred to collectively as the corporate officers ) of the Company and its employees, as well as persons acting on behalf of the MPI Grop, at its meeting of 22 September 2011, the Board of Directors of the Company resolved to adopt a code of condct for the prevention of insider trading and to comply with the provisions of AMF Recommendation No of 3 November This code entered into effect on 15 December The code explains in some detail the rles of professional condct relating to transactions effected by corporate offi cers in fi nancial instrments within the meaning of Article L of the French Monetary and Financial Code, which have been or will be issed by the Company and in derivatives and other instrments related to sch secrities (options, nits of FCPE mtal fnds, etc.) (referred to collectively as the Secrities ). The code of condct on the prevention of insider trading ses the reglatory defi nition of inside information and gives examples of information that cold be considered as sch. This is the case, in particlar, for information relating to the fi nancial position of the bsiness, the strategy and development priorities of the Company and/or the MPI Grop and/or Seplat, the operational and commercial activity of the Company and/or the MPI Grop and/or Seplat, and disptes, investigations or legal proceedings involving the Company and/or the MPI Grop and/or Seplat in the corts or before arbitral or administrative jdicial athorities. The code of condct on the prevention of insider trading then otlines the type of person(s) who cold be considered insiders within the meaning of the applicable reglations. The prevention of insider trading reqires the establishment of specifi c procedres. In this respect, the code of condct sets ot: obligations of discretion reqired of insiders, sch as general Secrities transaction obligations, the general prohibition on disclosing privileged information, specifi c obligations (holding shares in registered form, percentage of retention of bons shares allotted or reslting from the exercise of options, the ban on execting transactions considered to be speclative, negative windows and prior consltation with a compliance offi cer) and the description of the programmed trading mandate that, nder certain conditions, makes it possible to avoid the simple presmption of se of privileged information reslting from the Spector Photo Grop NV, Chris Van Raemdonck/ CBFA rling of the Cort of Jstice of the Eropean Union; the establishment of a list of MPI Grop insiders, kept pdated and made available to the AMF, in accordance with the applicable reglations; and a specifi c obligation for insiders to individally disclose their Secrities transactions, in accordance with the applicable reglations. The code of condct on the prevention of insider trading sets ot the penalties applicable to insider trading or to a failre to refrain from sing inside information. In addition to any disciplinary measres that the Company may decide pon, the code of condct on the prevention of insider trading specifi es that: the administrative sanctions decided by the AMF s Sanctions Commission may be p to 100 million or ten times the amont of any profi t made; and the criminal sanctions imposed by the criminal cort may range from a one-year prison sentence and a fi ne of 150,000 to seven years in prison and a fi ne of 1.5 million Information on the service contracts binding members of the administrative and management bodies to the Company or to any of its sbsidiaries There are no service contracts that bind members of the administrative or management bodies to the isser or to any of its sbsidiaries and grant benefi ts to sch members. ANNUAL REPORT

66 3 Corporate governance OPERATION OF THE ADMINISTRATIVE AND MANAGEMENT BODIES Committees of the Board of Directors Adit and Risk Committee (a) Members of the Adit and Risk Committee Prsant to the provisions of Article 6.1 of the bylaws of the Board of Directors adopted by the Board on 22 September 2011, the Adit and Risk Committee is composed of three Directors selected by the Board of Directors from among its members; the objective is for at least two-thirds of the committee to be Independent Directors. Since the stock market listing, the Adit and Risk Committee had comprised the following Directors: (i) Mr Xavier Blandin, Chairman, Independent Director; (ii) Mr Emmanel de Marion de Glatigny, Director; and (iii) Ms Nathalie Delapalme, Independent Director. At its meeting on 27 Agst 2014, the Board of Directors took offi cial note of Mr Blandin s resignation from his dties as member and Chairman of the Adit and Risk Committee, following his appointment as Chief Exective Offi cer of the Company. At that time, the Board of Directors appointed Caroline Catoire, an Independent Director, as a member of the Adit and Risk Committee and Nathalie Delapalme, Independent Director, was appointed as Chairman of the Adit and Risk Committee. As a reslt, the membership of the Company s Adit and Risk Committee is now as follows: Ms Nathalie Delapalme, Chairman, Independent Director; Ms Caroline Catoire, Independent Director; and Mr Emmanel de Marion de Glatigny, Director. The Chairman of the Adit and Risk Committee is elected by his/ her peers. Directors who hold management positions within the Company may not be members of the Adit and Risk Committee. The members of the Adit and Risk Committee are appointed for a term commensrate with their term of offi ce as a member of the Board of Directors (which was decided by the meeting of the Board of Directors of the Company held on 2 November 2011 for the members above), or for a term set by the Board of Directors. They may, however, resign at any meeting of the Board of Directors withot reason or advance notice. (b) Role of the Adit and Risk Committee The general role of the Adit and Risk Committee, as defi ned by the bylaws of the Board of Directors adopted by the Board on 22 September 2011, is to assist the Board of Directors so that the Board has the information and resorces needed to ensre the qality of internal controls and the reliability of the fi nancial information provided to shareholders and the fi nancial markets. The main dties of the Adit and Risk Committee inclde: monitoring the process of preparing fi nancial information; reviewing the interim, annal, consolidated and company fi nancial statements in conjnction with the Stattory Aditors; verifying the relevance and permanence of the acconting methods adopted (i) to prepare the Company and consolidated fi nancial statements and (ii) for the scope of consolidation; reviewing major transactions that carry a risk of confl icts of interest between the Company and members of the Board of Directors; monitoring the stattory adit of the interim, annal, company and consolidated fi nancial statements condcted by the Stattory Aditors; monitoring the independence of the Stattory Aditors; examining the main risks to which the Company is exposed and the soltions adopted by the Company to address sch risks; monitoring the effectiveness of the internal control and risk management systems, and examining the report on these sbjects by the Chairman of the Board of Directors to the General Shareholders Meeting; and examining any matter likely to have a signifi cant impact on the sbstance and presentation of the fi nancial statements. The Adit and Risk Committee isses recommendations on the Stattory Aditors proposed for appointment by the General Shareholders Meeting. It reglarly reports on its work to the Board of Directors and immediately informs the latter of any problem encontered. The Adit and Risk Committee meets as often as it deems necessary or appropriate, at the reqest of any one of its members, and at least twice yearly and, in any event, before the meetings of the Board of Directors called to approve the fi nancial statements. For its deliberations to be valid, at least half of its members mst be present. The resoltions of the Adit and Risk Committee are adopted by majority approval of the members attending the meeting. Each member has one vote. In the case of a tied vote, the Chairman shall have the casting vote. The Adit and Risk Committee may isse non-binding written or verbal recommendations for the attention of the Board of Directors. The members of the Adit and Risk Committee may, as part of their dties, interview the Company s exectives, inclding the Chief Exective Offi cer. In 2014, the Adit and Risk Committee met three times, to approve the annal fi nancial statements for 2013, to approve the 2014 interim fi nancial statements, and to review the annal year-end fi nancial statements and the draft bdget. 64 ANNUAL REPORT 2014

67 Corporate governance 3 OPERATION OF THE ADMINISTRATIVE AND MANAGEMENT BODIES Appointments and Compensation Committee (a) Members of the Appointments and Compensation Committee Prsant to the provisions of Article 6.1 of the bylaws of the Board of Directors adopted by the Board on 22 September 2011, the Appointments and Compensation Committee is composed of three Directors selected by the Board of Directors from among its members or from otside the Company; the objective is for at least two-thirds of the committee to be Independent Directors. At its meeting of 2 November 2011, the Board of Directors appointed the following members, whose appointment became effective on the Listing date, 15 December 2011: Mr Emmanel de Marion de Glatigny, Chairman, Director; Mr Alexandre Vilgrain, Independent Director; and Ms Nathalie Delapalme, Independent Director. The Company s exective corporate offi cers may not be members of the Appointments and Compensation Committee. Members of the Appointments and Compensation Committee who are also Directors are appointed for a term commensrate with their term of offi ce as members of the Board of Directors. Members of the Appointments and Compensation Committee who are not Directors are appointed for a term of one year, renewable atomatically. They may resign at any meeting of the Board of Directors withot reason or advance notice. The Chairman of the Appointments and Compensation Committee is elected by the members of the committee for a period of one year, nless decided otherwise. (b) (i) Dties of the Appointments and Compensation Committee Selection and appointment dties The Chairman of the Company shall be involved in the work of the Appointments and Compensation Committee. Applicants for Director positions The Appointments and Compensation Committee may have to make proposals and give opinions on individal candidates, whether independent or not, for positions as Directors of the Company. Applicants for exective corporate officer positions (Chief Exective Officer/Depty Chief Exective Officer) The Appointments and Compensation Committee may have to make proposals and isse opinions on candidates for the Company s exective corporate offi cer positions. Recritment of exectives who are not corporate officers The Board of Directors may seek the opinion of the Appointments and Compensation Committee when recriting or dismissing an exective who is not a corporate offi cer. (ii) Dties relating to compensation Compensation for exective corporate officers The Appointments and Compensation Committee has a dty to make proposals on the compensation for exective corporate offi cers (the amont of fi xed and variable compensation, where applicable). The Appointments and Compensation Committee bases its proposals for the compensation for exective corporate offi cers on sch principles as thoroghness, the balance between the elements of compensation, benchmarks, consistency, clarity of rles, moderation and transparency. The Appointments and Compensation Committee also makes recommendations with regard to the pension and benefi ts scheme, benefi ts in kind and rights to varios fi nancial rights for exectives and corporate offi cers and the fi nancial conditions of their departre. The Appointments and Compensation Committee makes its proposals at the beginning of each fi scal year for the year in progress. In particlar, at the beginning of each year the Appointments and Compensation Committee isses an opinion on the elements of compensation, company benefi ts and benefi ts in kind for the Chairman and Chief Exective Offi cer, or the Managing Director, in compliance with reglations and market conditions and in the best interests of the Company. Compensation policy for exectives who are not corporate officers The Appointments and Compensation Committee ensres that the compensation policy for exectives who are not corporate offi cers of the Company is consistent with market practices and in the Company s best interests. Distribtion of Directors fees and exceptional compensation The General Shareholders Meeting of 19 Jne 2014 set the amont of the attendance fees to be distribted among Board members for fi scal year 2014 at 360, ,518 of this bdget was sed (see Section of this Annal Report). The Appointments and Compensation Committee may also be asked to isse an opinion on any proposals made by the Board of Directors for the payment of exceptional compensation to any member to whom it has assigned particlar dties or given a special mandate, in compliance with the provisions of Article L of the French Commercial Code. The Appointments and Compensation Committee mst draw p a sccession plan for the exective corporate offi cers in the event of nforeseen vacancies. ANNUAL REPORT

68 3 Corporate governance OPERATION OF THE ADMINISTRATIVE AND MANAGEMENT BODIES The Appointments and Compensation Committee met six times in It made decisions on the distribtion of attendance fees for 2013, the assessment of candidates for the Board of Directors and the appointment of a new Director, the allotment of bons shares to the Chief Exective Offi cer, the compensation for the Chairman of the Board of Directors, the Chief Exective Offi cer and the Depty Chief Exective Offi cer, the amont of attendance fees for 2014 and the self-assessment of the Board of Directors Observer Prsant to the provisions of Article 5 of the bylaws of the Board of Directors, adopted by the Board on 22 September 2011, the Board may appoint to the Company one or more observers, who mst be individals, bt no more than for. Roman Gozalo has been Company observer since 14 December Declaration relating to corporate governance In the interests of transparency and pblic information, on 22 September 2011 the Board of Directors decided, in accordance with the provisions of Article L of the French Commercial Code, to commit volntarily to the Corporate Governance Code for small and mid-caps pblished by Middlenext in December The Company has decided to comply with all recommendations of this code Internal control and risk management Internal control within the Company (a) Scope of internal control Internal control within the Company can be defi ned as all policies and procedres for control designed to ensre: the reliability and fair presentation of acconting and fi nancial data; the accracy and completeness of acconting records; the exection and optimisation of the Company s transactions; that management and the exection of transactions are consistent with the gidelines issed for the Company s activities by the corporate bodies and with the Company s vales, standards and internal rles; adherence to applicable local laws and reglations; and the protection of the Company s assets. The aim of the internal control system that the Company intends to implement will be to provide reasonable assrance of compliance with the rles and reglations, the secrity of assets and the effectiveness of operations. It cannot, however, provide an absolte garantee that all risks will be totally eliminated. (b) Risk management The Company has a risk identifi cation and management system similar to that in operation within its former parent company, Marel & Prom. Under the Transitional Services Agreement, Marel & Prom staff have been responsible for the adoption, implementation, and application of sch measres since the Listing, making them all the more consistent. Risk management consists of an nderstanding of the risks incrred de to the Company s activity and the monitoring measres that mst be established to prevent sch risks. The main external risks are oil prices and the legal and political risks related to Seplat s exploration and prodction zones, as described in Sections and 2.3 of this Annal Report. The Company and Seplat have arranged sitable insrance policies for the risks incrred in connection with the activities carried ot. (c) (i) Spervision of internal control procedres Board of Directors The Board of Directors has always emphasised the importance that it, along with exective management, places on internal control and its main areas of application. 66 ANNUAL REPORT 2014

69 Corporate governance 3 OPERATION OF THE ADMINISTRATIVE AND MANAGEMENT BODIES (ii) Adit and Risk Committee The Adit and Risk Committee is responsible for monitoring internal control measres, with priority being placed on the acconting and fi nancial areas, withot neglecting the other fnctions. This committee reports to the Board of Directors. The main dties of the Adit and Risk Committee are described in Section (b) of this Annal Report. The Adit and Risk Committee relies on services rendered by Marel & Prom nder the Transitional Services Agreement. The dties assigned will specifi cally take into accont the assessment of the most signifi cant risks. The weight, contribtion and precedence of activities and their pace of development will be taken into consideration in the risk assessment. The action plans decided pon following the adits will be reglarly monitored by the Adit and Risk Committee. (iii) Exective management The role of exective management is to defi ne the general principles governing internal control and to ensre their proper application. (iv) Stattory Aditors Throgh their varios checks, the Stattory Aditors exercise the necessary professional diligence to validate the preparation, treatment and consistency of the consolidated acconting and fi nancial information. They are informed in advance of the process for preparing the fi nancial statements, and present a smmary of their work to exective management, the Adit and Risk Committee and the Board of Directors. The Stattory Aditors condct the internal control checks deemed necessary as part of their work to certify the fi nancial statements, and deliver their observations to the Adit and Risk Committee Seplat s internal control procedres For the prpose of its stock market listing in London and Lagos on 14 April 2014 and in compliance with the new reglations applicable in Nigeria, Seplat has adopted the IFRS standards and has taken and contines to take steps to improve its fi nancial reporting and internal control. Seplat has introdced reporting procedres, practices and internal controls that are typical of those in place in international listed companies, has hired qalifi ed individals for its Finance Department and has otsorced the internal adit fnction to reinforce its independence. An Adit Committee and an HSE and Risk Management Committee have been created within Seplat s Board of Directors. Lastly, Seplat s Stattory Aditors perform the internal control adits that they deem necessary as part of their dties. The internal control procedres implemented at Seplat are set ot in its base prospects drafted in preparation for its stock market listing on 14 April 2014, and in any Annal Report issed by Seplat. ANNUAL REPORT

70 3 Corporate governance STATUTORY AUDITORS REPORT, PREPARED IN ACCORDANCE WITH ARTICLE L OF THE FRENCH COMMERCIAL CODE, ON THE REPORT PREPARED BY THE CHAIRMAN OF THE BOARD OF DIRECTORS OF THE COMPANY 3.4 STATUTORY AUDITORS REPORT, PREPARED IN ACCORDANCE WITH ARTICLE L OF THE FRENCH COMMERCIAL CODE, ON THE REPORT PREPARED BY THE CHAIRMAN OF THE BOARD OF DIRECTORS OF THE COMPANY To the Shareholders, In or capacity as stattory aditors of MPI and in accordance with provisions of Article L of the French Commercial Code, we hereby present or report on the report prepared by yor company s chairman, in accordance with provisions of Article L of the French Commercial Code for the fi scal year ended 31 December It is the dty of the chairman to prepare and sbmit for the Board of Directors approval a report on the internal control and risk management procedres implemented by the Company and to provide the other information reqired by Article L of the French Commercial Code relating in particlar to corporate governance arrangements. It is or dty: to report on any matters relating to the information contained in the chairman s report, regarding the internal control and risk management procedres for the preparation and processing of acconting and fi nancial information; and to certify that this report contains the other information reqired by Article L of the French Commercial Code, provided that or role is not to verify the fairness of this other information. We have carried ot or work in accordance with the professional standards applicable in France. Information concerning the internal control and risk management procedres for the preparation and processing of acconting and financial information The professional standards reqire that we perform the necessary procedres to assess the accracy of the information provided in the chairman s report in respect of the internal control and risk management procedres for the preparation and processing of acconting and fi nancial information. These procedres mainly consist of: obtaining an nderstanding of the internal control and risk management procedres for the preparation and processing of the acconting and fi nancial information on which the information presented in the Chairman s report is based and of the existing docmentation; obtaining an nderstanding of the work leading to the preparation of this information and of the existing docmentation; determining whether any material weaknesses in the internal control procedres for the preparation and processing of the acconting and fi nancial information that we might have noted in the corse of or work are properly disclosed in the chairman s report. On the basis of or work, we have no matters to report on the information concerning the Company s internal control and risk management procedres for the preparation and processing of the acconting and fi nancial information contained in the report prepared by the Chairman of the Board of Directors in accordance with provisions of Article L of the French Commercial Code. Other information We hereby confi rm that the report prepared by the Chairman of the Board of Directors also contains the other information reqired by Article L of the French Commercial Code. Paris, 27 April 2015 The Stattory Aditors INTERNATIONAL AUDIT COMPANY Daniel DE BEAUREPAIRE François Carrega 68 ANNUAL REPORT 2014

71 Corporate, social and environmental responsibility INFORMATION ON LABOUR Employment Organisation of work Indstrial relations Health and safety Training Eqal treatment Promotion of and compliance with the International Labor Organisation s Fndamental Conventions ENVIRONMENTAL INFORMATION General environmental policy Polltion and waste management Sstainable se of resorces Climate change Protection of biodiversity INFORMATION ON CORPORATE COMMITMENTS TO PROMOTE SUSTAINABLE DEVELOPMENT Regional, economic and social impact of the Company s activities Relations between individals or organisations with an interest in the Company s activities Sbcontractors and sppliers Fair practices Other actions ndertaken to promote hman rights REPORT OF THE INDEPENDENT THIRD-PARTY AUDITORS ON MPI CORPORATE, SOCIAL AND ENVIRONMENTAL INFORMATION 79 ANNUAL REPORT

72 4 Corporate, social and environmental responsibility In accordance with the provisions of Articles L and R et seq. of the French Commercial Code, this Annal Report presents information on the manner in which the Company deals with the social and environmental conseqences of its activities as well as its corporate commitments to promote sstainable development, non-discrimination and diversity. This presentation is made in accordance with the terms of the Decree of 24 April 2012 relating to the obligations of corporate transparency in social and environmental matters. Accordingly, this chapter on corporate, social and environmental responsibility sets forth the corporate information, for the Company, its sbsidiary MPNATI and Saint-Abin Energie, on the workforce, compensation, organisation of work, indstrial relations, accidents in the workplace and occpational diseases, as well as the promotion of and compliance with the fndamental conventions of the International Labor Organisation. It shold be noted that, as at the date of this Annal Report, the Company holds 21.76% of Seplat s capital, following its initial pblic offering on 14 April The legal and reglatory provisions stiplate that the information provided in relation to corporate social responsibility mst be consolidated when the Company prepares consolidated fi nancial statements, and this information mst pertain to the Company itself and to all its sbsidiaries within the meaning of Article L of the French Commercial Code or to the companies that it controls within the meaning of Article L of the said code. Accordingly, since the Company does not control Seplat, this chapter does not contain any information pertaining to Seplat. As it is not engaged in exploration/prodction activities itself and does not have capital control of oil exploration/prodction companies, the Company does not consolidate environmental information relating to the general policy on the environment, polltion, waste management, the sstainable se of resorces, climate change or biodiversity protection. Similarly, the Company does not consolidate information relating to corporate commitments to sstainable development sch as the regional, economic and social impact of its activities, relations with persons or organisations concerned by its activities, sbcontracting and spply, fair practices or other hman rights efforts. Using this environmental and social information, the Company aims to identify and minimise the risks arising from the investments it holds. When the Company or the MPI Grop makes an investment in a company with operational exploration/prodction activities or works with other operating partners, the qality of health, safety, secrity and environmental risk management employed by these companies or operators is a determining factor in any investment decision. The analysis of environmental and social risks and the management of sch risks is therefore sbject to de diligence before any investment takes place. Monitoring these risks and identifying appropriate ways to properly manage them forms an integral part of technical and fi nancial project monitoring and these tasks are carried ot with the same professional rigor. The extra-fi nancial challenges involved in projects in which the Company invests are placed at the centre of the relationship with partner operators and at the highest level of management when the Company has representatives of these investments on the Board of Directors. At the end of 2014, the MPI Grop formalised the review of the environmental and social risks involved in projects in which it holds an interest. The projects in association with Pétrolia and Andora were sbject to environmental and social de diligence. A qestionnaire covering the environmental and social challenges, the main risks and any environmental liabilities, the impact on the poplation or commnities affected by the project, adherence to the reglations and laws in force and the sstainable se of natral resorces was sent to these operating partners. The information gathered was analysed and a smmary prodced, detailing the main challenges, evalating the qality of the environmental and social management system and, where necessary, establishing corrective action or complementary action to be taken in terms of monitoring environmental and social risks. 70 ANNUAL REPORT 2014

73 Corporate, social and environmental responsibility 4 INFORMATION ON LABOUR 4.1 INFORMATION ON LABOUR The Company has a redced workforce, the management aspects of which are detailed below Employment Total workforce and breakdown by gender, age and geographic region As at 31 December 2014, the Company had for employees (exclding corporate offi cers), MPNATI, the sbsidiary of the Company that employs the Company s international staff, had two employees and Saint-Abin Energie had one employee, recrited locally by the sbsidiary Saint-Abin Energie Qébec Inc. The latter has a backgrond in pblic relations and the social acceptability of projects in Qebec. Since the Listing, the Company has benefi ted from the expertise and assistance of Marel & Prom in the exploration and prodction of hydrocarbon fi elds nder the terms of the Services Agreement conclded with Marel & Prom on 2 November 2011 for a term of 12 months and which may be renewed for the same term at the Company s reqest. Under this agreement, Marel & Prom agreed to perform the technical assignments and work that will be needed by the Company. The Agreement, which entered into effect on 15 December 2011, has since been renewed annally for a oneyear period. The tables below indicate the respective distribtion of the employees of the Company, MPNATI and Saint-Abin Energie as at 31 December 2014, according to the following criteria: position, age grop, geographic region and gender. Position Engineers 1 1 Technicians 0 0 Spport staff 6 4 TOTAL 7 5 Distribtion by age grop < 25 years to 34 years to 44 years to 54 years 1 1 > 55 years 3 2 TOTAL 7 5 Geographic distribtion (registered workforce, all types of employment contract) by gender Men Women Men Women Africa (Nigeria) Erope North America (Canada) Sb-total TOTAL 7 5 ANNUAL REPORT

74 4 Corporate, social and environmental responsibility INFORMATION ON LABOUR Recritment and dismissals The transition period dring which the Company is covered by the Transitional Services Agreement conclded with Marel & Prom allows the Company to organise its recritment process in order to secre qality employees who have the reqired expertise in exploration/ prodction. The table below shows the new employees hired by the Company, MPNATI and Saint-Abin Energie dring the 2014 and 2013 fi scal years: Recritment Permanent Temporary Total Permanent Temporary Total Company + MPNATI + Saint-Abin Energie The table below shows departres, exclding retirees, role changes and early retirement for 2013 and 2014: Departres exclding retirees/role changes/early retirement 0 1 Volntary departres (resignations, negotiated departres, contract terminations) 0 0 Dismissals 0 0 Deaths 0 0 TOTAL DEPARTURES/TOTAL WORKFORCE Compensation and changes in compensation For the MPI Grop, the payroll covering salaries (exclding corporate offi cers), social secrity contribtions, employer s contribtions and bonses was as follows (in thosands of eros): Payroll 2,430 1,605 In order to attract qality employees and give them a stake in the performance of the Grop, MPI has set p a profi t-sharing plan and a corporate savings plan. Profit-sharing plan On 26 Jne 2012, the Company established a three-year profi t- sharing plan, covering 2012, 2013 and Under the terms of this plan, any employee affi liated with the Company by an employment contract and who has worked for MPI for three months or more may benefi t from the incentive even if he/she is no longer an employee at the end of the fi scal year. The method for calclating the incentive is based on (i) the level of eqity interests held by the Company, (ii) the level of dividend distribtions by the eqity interests held by the Company, (iii) the increase in the market vale of the Company in relation to the CAC Mid & Small index and (iv) the increase in hydrocarbon reserves within the eqity interests held by the Company. Payments will be allocated among Company employees in proportion to their basic salary for the year. This decision was based on two giding principles: to foster employee solidarity in order to stimlate the Grop s momentm for prodctivity, and to respect every individal s contribtion to the effort to increase prodctivity and improve the organisation of work. Employee savings plan On 23 November 2012, the Company established an employee savings policy offering all employees the benefi t of a corporate savings plan ( plan épargne entreprise or PEE ). This PEE has an indefi nite term. Under the terms of the PEE, any employee who has been part of the Company for three months will be eligible for the Company savings plan. The PEE is fnded throgh (i) reglar or one-off volntary contribtions made by each benefi ciary, (ii) additional payments made by the Company, (iii) all or some of the incentive bonses, (iv) all or some of the profi t-sharing, (v) the transfer of sms from another employee savings plan with an identical term, and (vi) the transfer of sms and rights from a time savings accont. It shold, however, be noted that the annal volntary payments by a benefi ciary (inclding profi t-sharing) may not exceed 25% of his/her annal compensation or professional income sbject to income tax for the previos year. 72 ANNUAL REPORT 2014

75 Corporate, social and environmental responsibility 4 INFORMATION ON LABOUR If it wishes, the Company can spplement the PEE by topping p the payments of the benefi ciaries of the PEE with a maximm employer s contribtion eqal to 300% of their payments. The annal contribtion paid by the Company for each employee is capped at the stattory limit, which is 8% of the annal social secrity ceiling (for information, this was 3, for the 2014 calendar year). Pension scheme and other benefits The Company has joined a spplementary retirement scheme which is a grop insrance agreement from Generali. This affi liation covers crrent and ftre personnel of the Company, and the rates of employer contribtions are 8% on tranches A, B and C. The total amont paid by the Company in respect of this scheme is 22, MPNATI has signed p to a spplementary retirement scheme, which is a grop insrance agreement from La Mondiale. This affi liation covers crrent and ftre personnel of the Company, and the rates of employer contribtions range from 15% to 22% of basic salary, depending on the age of the contribtor. The total amont paid by MPNATI in respect of this scheme for 2014 was 272, Organisation of work Organisation of working time Organisation of working time within the Company In France, the Company has applied the collective agreement of the oil indstry since 15 Jne Working hors Dring the fi scal year ended 31 December 2012, the Company established a system of a fi xed nmber of days for (i) managers who have independence in the se of their time and (ii) self-employed workers. This system conts the working time of the people concerned in days and not in hors. An annal limit is set by collective agreement at a maximm of 218 days, bt an employee may legally work beyond this limit p to 282 days. This system was applied for the fi scal year ended 31 December To date, given the nmber of employees in the Company, it has not adopted a protocol for the adjstment and redction of working time. Overtime Since an employee employed nder the fi xed days system can work more than 218 days, ths recovering the additional days worked, the Company does not se overtime hors Absenteeism For the year ended 31 December 2014, the rates of total absenteeism and absenteeism de to illness for the Company, MPNATI and Saint-Abin Energie were zero Indstrial relations Organisation of social dialoge, inclding procedres for employee information, consltation and negotiation As a reslt of the crrent strctre of the MPI Grop, social dialoge within the Company and its sbsidiary MPNATI takes place directly between the management teams of these companies and their employees on isses relating to matters sch as working time, the organisation of working time and compensation Overview of collective agreements Given the crrent nmber of employees in the Company and MPNATI, no collective agreement has been signed to date with the employees of these entities. ANNUAL REPORT

76 4 Corporate, social and environmental responsibility INFORMATION ON LABOUR Health and safety Health and safety are a key concern for the MPI Grop. The Company is committed to contining to improve working conditions, preventing risks and redcing all forms of polltion, in compliance with national reglations. As a reslt of the crrent strctre, the Chief Exective Offi cer of the Company assmes direct responsibility for matters relating to health, safety and the environment (HSE). Within the MPI Grop s sbsidiaries, the legal representatives for each sbsidiary are responsible for HSE isses and are tasked with ensring that the health and safety of individals, environmental protection and the protection of goods and property are respected in all activities ndertaken by the sbsidiary. Signifi cant accidents or incidents may be sbject to a follow-p procedre. Drilling campaigns are organised based on climatic conditions and adherence to personal safety rles. In Qebec, the drilling of stratigraphic wells on Anticosti Island was halted in November 2014 and will resme in April In Myanmar, de primarily to the typhoon season, drilling began on an exploration well located on the M2 block and operated by PetroVietnam on 27 December Occpational health and safety conditions The Company, MPNATI and Saint-Abin Energie shall ensre that their employees carry ot their dties in good health and in a safe environment Overview of collective agreements on occpational health and safety signed with trade nions or employee representatives The Company has not signed any agreement with its employees relating to occpational health and safety Occpational accidents and diseases In fi scal year 2014, there were no occpational accidents sffered by employees of the Company, MPNATI or Saint-Abin Energie. Neither the Company, MPNATI nor Saint-Abin Energie declared any occpational diseases in Training Training policies implemented The Company and MPNATI vale and encorage the implementation of training measres insofar as sch measres improve employee effectiveness and performance and ensre that its operations are carried ot nder satisfactory safety conditions Nmber of hors of training Fifty-six (56) hors of training were provided for Company and MPNATI employees in 2014, compared to one hndred (100) in Saint-Abin Energie employees did not receive training in Eqal treatment Measres taken to promote gender eqality The MPI Grop does not discriminate between men and women when hiring to fi ll vacancies, and pays close attention to the balance of men and women Measres taken to encorage the employment and integration of people with disabilities The MPI Grop s general policy establishes the principle of eqal opportnity in recritment, compensation, benefi ts, promotion and access to opportnities for training and development Anti-discrimination policy The Grop is committed to fll compliance with the principles of non-discrimination, as set ot in applicable French (declaration of hman and citizens rights, laws and decrees in force), Eropean and local texts. 74 ANNUAL REPORT 2014

77 Corporate, social and environmental responsibility 4 ENVIRONMENTAL INFORMATION Promotion of and compliance with the International Labor Organisation s Fndamental Conventions Freedom of association and the right to collective bargaining/elimination of discrimination in respect of employment and occpation/elimination of forced and complsory labor/effective abolition of child labor The MPI Grop s general policy complies with the general principles of international law (OECD, ILO and EU law) as well as national laws that exclde, in particlar, all forms of discrimination, harassment and the se of forced and child labor. 4.2 ENVIRONMENTAL INFORMATION The MPI Grop s operations may have conseqences for the environment and natral resorces that mst be measred, controlled and minimised. Frthermore, any potential environmental distrbance or damage cold expose the Grop to varios risks, which cold generate additional costs and also ndermine the Company s image and reptation. In terms of environmental protection, the Company s objective is to preserve the areas that may be affected by its activities, or those in which it has interests. The Company shall ensre that these sbsidiaries implement an environmental management programme to identify, prevent and mitigate environmental risks or ensre that these management systems are in place at operating partners sing a qestionnaire and a smmary detailing the main challenges, evalating the qality of the environmental and social management system and, where necessary, establishing corrective or additional action to be taken in terms of monitoring environmental and social risks General environmental policy The Company shall ensre that environmental protection is taken into consideration when condcting its operations. It shall identify the environmental risks among its operating partners that reqire particlar vigilance and any opportnities to redce the environmental impact of its projects. It shall ensre that its partners act in compliance with local reglations, and international instrctions and codes of good practice relating to the environment. As the Company is not an operator, and its only bsiness is as a holding company, it does not have a dedicated bdget for environmental protection or the prevention of polltion; nevertheless, it does provide fi nancial spport for this aim indirectly throgh the investments that it holds. Given the natre of the MPI Grop s activities and its wage strctre, the Company has not made any provisions or issed any garantees in terms of environmental risks and has not specifi cally provided any instrction or information to its employees on environmental protection. ANNUAL REPORT

78 4 Corporate, social and environmental responsibility ENVIRONMENTAL INFORMATION Polltion and waste management Measres to prevent, redce or remedy releases into the air, water and soil that seriosly affect the environment and waste management measres Given the natre of its activities, the Company does not directly emit any releases into the air, water or soil that seriosly affect the environment. Insofar as control measres allow, the Company careflly monitors the natre of releases into the air, water and soil associated with projects in which it has a direct interest or has an interest via Saint- Abin Energie. Signifi cant incidents may be sbject to a follow-p procedre. The Company monitors isses relating to polltion and waste management Consideration of noise and any other form of polltion specific to an activity In light of its activities, the Company is not a sorce of noise polltion. It ensres that the operators responsible for projects in which it has an interest strive to identify and minimise all forms of polltion Sstainable se of resorces Water consmption and water spply based on local constraints Owing to the natre of its activities, the Company s consmption of fresh water cannot be qantifi ed, thogh is not signifi cant. Operating partners are responsible for obtaining athorisations prior to project implementation. The preservation of water resorces and wastewater treatment are generally strictly reglated. In Alberta, the water sed by the SAGD (steam-assisted gravity drainage) project in Sawn Lake is considered locally as fresh water, despite a mineralisation rate of over 4,000 mg/l of total dissolved matter. The SAGD procedre sed by Andora (Sawn Lake project) ses advanced techniqes to generate steam, recycling the combstion gas and redcing water consmption sing a low-pressre steam separator. The facility was designed so that water cold be recycled for ftre well pairs. The se of hydralic fractring will be specially monitored by Saint- Abin Energie in terms of water se and qality, the treatment of backfl ow water, the extraction fl ids sed and the integrity of the well Consmption of raw materials and measres taken to improve efficiency of se The MPI Grop does not consme raw materials Energy consmption, measres taken to improve energy efficiency, and se of renewable energy Owing to the natre of its activities, the Company is not reqired to be able to se varios sorces of renewable energy. The SAGD procedre sed by Andora ses advanced techniqes to generate steam, recycling the combstion gas and redcing water consmption sing a low-pressre steam separator Land se In light of its activities, the Company s land se is not signifi cant. The area covered by mining permits in which the Company holds an interest and nder which operating partners condct exploration activities is generally proportionately limited. 76 ANNUAL REPORT 2014

79 Corporate, social and environmental responsibility 4 INFORMATION ON CORPORATE COMMITMENTS TO PROMOTE SUSTAINABLE DEVELOPMENT Climate change Greenhose gas (GHG) emissions In oil exploration and prodction activities, greenhose gas emissions are mainly linked to natral gas associated with oil prodction, which may be fl ared, vented or possibly leaked. It is standard practice to fl are (brn off) excess gas to ensre the safety of the facilities. The qantity of gas fl ared can also depend on whether or not processes have been pt in place for reinjecting gas and establishing infrastrctres for processing gas, sing the gas internally at the facility, the commercial markets for the hydrocarbons extracted and the type of hydrocarbon extracted. Flared gas is therefore a non-vale-adding resorce and a sorce of polltion. In recent years, the sector has made progress in redcing the volmes of gas fl ared and the associated greenhose gas emissions. The Company s greenhose gas emissions are not recorded. They may be specially monitored by operating partners Adapting to the conseqences of climate change The natre of the Company s activities means that it has not implemented a climate change adaptation policy Protection of biodiversity Measres taken to preserve or develop biodiversity The Company takes care to ensre that the potential impact on biodiversity of operations nder the permits in which it is active, mainly via Saint-Abin Energie, is evalated in environmental impact stdies. 4.3 INFORMATION ON CORPORATE COMMITMENTS TO PROMOTE SUSTAINABLE DEVELOPMENT The Company s corporate policy, whether implemented by its employees or nder service provision contracts conclded with Marel & Prom, is refl ected in the basic principle that the development of relationships with its stakeholders, viewed as a partnership, contribtes to the sccess of the Company Regional, economic and social impact of the Company s activities The Company s territorial, economic and social impact on employment and regional development The natre of the Company s activities means that its contribtion to society resides particlarly in its economic and social footprint The Company s territorial, economic and social impact on local or neighboring poplations Althogh the operating partners of the MPI Grop are responsible for managing relations with the regions in which activities take place, the Grop may have case to intervene. As sch, in 2014, Saint-Abin Energie recrited an employee with a great deal of experience in pblic relations and the social acceptability of projects in Qebec. Pétrolia also recrited a commnity relations manager to spport the Anticosti Island project. ANNUAL REPORT

80 4 Corporate, social and environmental responsibility INFORMATION ON CORPORATE COMMITMENTS TO PROMOTE SUSTAINABLE DEVELOPMENT Relations between individals or organisations with an interest in the Company s activities Conditions for dialoge with sch individals or organisations Owing to the natre of its activities, the Company is not reqired to and does not engage in reglar dialoge with individals or organisations in spport of sstainable development Partnership or sponsorship actions The Company neither ndertook nor expanded any partnership or sponsorship initiatives in Sbcontractors and sppliers Consideration of social and environmental isses in the procrement policy The Company s consideration of social and environmental isses in its prchasing policy essentially entails giving preference to local offers when prchasing non-technical work. Insofar as control measres allow, the Company careflly monitors spplier qality, local sorcing and prodction conditions Importance of sbcontracting and consideration of sppliers and sbcontractors social and environmental responsibility in relations with them As part of its operations, the Company ensres that any sbcontractors who may work for it, directly or indirectly, share the same social and environmental concerns and are at least as demanding Fair practices Anti-corrption measres As a responsible investor, the Company is committed to the application of best practices in terms of ethics. As part of this drive for continos improvement, the Company encorages its sbsidiaries to implement best practices in the prevention and detection of frad and corrption, as most appropriate to the specifi c featres of each sbsidiary Measres taken to promote consmer health and safety The Company and MPNATI have no direct contact with consmers throgh their operations. It shold be noted that the companies in which the Company is involved via Saint-Abin Energie do not refi ne or distribte hydrocarbons and do not therefore come into contact with consmers. It is therefore not appropriate, in view of the operations of the Company and MPNATI, to plan or adopt measres in spport of consmer health and safety Other actions ndertaken to promote hman rights The Company has not ndertaken any actions to promote hman rights. 78 ANNUAL REPORT 2014

81 Corporate, social and environmental responsibility 4 REPORT OF THE INDEPENDENT THIRD-PARTY AUDITORS ON MPI CORPORATE, SOCIAL AND ENVIRONMENTAL INFORMATION 4.4 REPORT OF THE INDEPENDENT THIRD-PARTY AUDITORS ON MPI CORPORATE, SOCIAL AND ENVIRONMENTAL INFORMATION To the Shareholders, Following the reqest made to s, and in or capacity as aditors (accredited by COFRAC, certifi cate nmber Rev. 6) (1), we present to yo the reslts of or examination, prsant to Article L and Articles R et seq. of the French Commercial Code. We condcted this review in order to certify the inclsion of all reqired corporate, social and environmental information ( CSR Information ) and to isse an opinion on the fair presentation of the CSR Information selected by MPI and set ot in its 2014 Annal Report. The collection and collation of this CSR Information was coordinated by the MPI General Secretariat nder the aspices of the Chief Exective Offi cer. It is or responsibility, in accordance with Articles A et seq. of the French Commercial Code determining the methods to be sed by independent third-party bodies, and on the basis of or work, to express an opinion on this CSR Information. The opinions below pertain only to the information reqired by Article R of the French Commercial Code (Chapter 4 of the 2014 Annal Report: Corporate, social and environmental responsibility) and not to the 2014 Annal Report as a whole. Natre and scope of the work SOCOTEC completed its work by: familiarising itself with the MPI Grop in order to gain an nderstanding of its strctre and bsiness (by examining the 2014 Annal Report and condcting interviews with management in particlar); performing a risk assessment to establish an adit plan specifi c to the activities ndertaken and to the CSR Information reported; implementing the adit plan; drafting a provisional report, which was sbmitted for the Company s approval; drafting a fi nal report (declaration of inclsion of CSR Information and opinion thereon). On the basis of a docmentation adit carried ot between 12 March and 1 April 2015 and an on-site adit carried ot on 16 and 17 March 2015 by two of or CSR experts, or work consisted of condcting interviews at MPI headqarters with management and with the employees responsible for preparing the CSR Information. We ndertook the following procedres to obtain assrance that the selected CSR Information did not contain any material misstatement: we assessed the MPI Grop procedres in terms of their relevance to the Company s investment activities, their reliability, how easy they are to nderstand and how exhastive they are (consolidation of reporting, qestionnaires sent to operators and internal control); within MPI, we condcted interviews with the individals responsible for environmental and social reporting in order to check compliance with internal procedres; with regard to the selected sites and companies and in relation to the key metrics (2), we verifi ed the nderstanding and correct application of the relevant procedres and sed sampling techniqes to careflly check that the detail of the CSR Information matched the spporting docments and, for qantitative information, to verify the calclations made. In 2014, the selected qantitative data covered all of the Grop s employees. For all qantitative information and all consolidated MPI sbsidiaries, we also verifi ed that the 2014 CSR Information was consistent with the CSR Information for the previos fi scal year, and with the Grop s bsiness and crrent sitation. We believe that the methodologies that we sed to identify key metrics and to check the information (as per the chosen sampling approach) provide a reasonable basis for the opinion and comments expressed hereafter. (1) List of establishments and scope available at (2) Key metrics in 2014: Staff and workforce breakdown; recritment and dismissals; remneration; workplace accidents; training; environmental risk prevention methods and measres; fi nancial garantees; sbcontractor and spplier relationships; corrption. ANNUAL REPORT

82 4 Corporate, social and environmental responsibility REPORT OF THE INDEPENDENT THIRD-PARTY AUDITORS ON MPI CORPORATE, SOCIAL AND ENVIRONMENTAL INFORMATION Opinion Declaration of inclsion We confi rm the inclsion in the MPI 2014 Annal Report of all of the information stiplated in Articles R et seq. of the French Commercial Code, except: the information on measres taken to protect the health and safety of consmers, for which we believe that the explanation given by the MPI Grop abot the lack of relevance for its activities and cstomers appears to be satisfactory. Opinion on the CSR Information Based on or work, we did not identify any material misstatements that cold call into qestion: the preparation and compilation of the CSR Information drawn p in accordance with the procedres of the MPI Grop and the information gathered; the fair presentation of the CSR Information provided. 13 April 2015 For SOCOTEC, the aditors Patrick ARMANDO and Jean-Michel PRIOLEAU 80 ANNUAL REPORT 2014

83 Information abot the Company and its capital INFORMATION ABOUT THE COMPANY Company information Company charter and Articles of Association INFORMATION ABOUT CAPITAL General information regarding capital Major shareholders Dividend distribtion policy LARGE CONTRACTS Seplat shareholders agreement Services Agreement Other agreements SPECIAL STATUTORY AUDITORS REPORT ON REGULATED AGREEMENTS AND COMMITMENTS RELATED-PARTY TRANSACTIONS Services agreement Shareholder loan Independent fi rst demand garantee 100 ANNUAL REPORT

84 5 Information abot the Company and its capital INFORMATION ABOUT THE COMPANY 5.1 INFORMATION ABOUT THE COMPANY Company information (a) Corporate name The Company s corporate name is MPI. Prior to the Company s Ordinary and Extraordinary General Shareholders Meeting of 20 Jne 2013, its name was Marel & Prom Nigeria. (b) Trade and Companies Register The Company is registered in the Paris Trade and Companies Register nder nmber (c) Company incorporation date The Company was registered on 13 October 2009 in the form of a simplifi ed joint-stock company and then converted to a pblic limited company on 15 November In the absence of early dissoltion or extension, the Company will cease operating on 12 October (d) Registered office, legal form and applicable law The Company s registered offi ce is located at 51, re d Anjo, Paris, France. Telephone: +33 (0) The ICB sector code of the Company is 0533 Exploration & Prodction. This category incldes companies engaging in exploration and drilling, prodction, refi ning and oil and gas prodct spply activities. (e) History of the Company The Company was formed by Marel & Prom, a grop specialising in hydrocarbon exploration and prodction, with the aim of acqiring, in a joint ventre with Nigerian partners within Nigerian company Seplat, rights to OMLs 4, 38 and 41 in Nigeria (Seplat has since acqired interests in other OMLs, as described in Chapter 1 of this Annal Report). The fact that the Company belongs to the Marel & Prom Grop has enabled it to benefi t from the knowledge, experience and expertise developed by Marel & Prom in the context of its oil bsiness operations on several continents. As at the date of this Annal Report, the Company holds a 21.76% eqity interest in Seplat. Throgh this 21.76% interest in Seplat, the Company benefi ts indirectly from rights in onshore OMLs offering a balanced combination of fi elds in prodction, fi elds to be developed, and exploration opportnities. Throgh this interest, it also enjoys strong local involvement. In addition to this interest, since 2013 the Company has held 66.67% of the capital of Saint-Abin Energie, ensring diversifi cation of its asset portfolio, given Saint-Abin Energie s eqity interests in oil companies in Myanmar, Canada and Iraq via its sbsidiaries. (f) Articles of Association and amendments to the Articles of Association The references to the Articles of Association in this section are references to the Articles of Association adopted by the Company s General Shareholders Meeting of 7 October 2011, as amended by the Board of Directors of the Company on 27 March As a reminder, the Articles of Association of the Company are referred to in Section 6.1 of this Annal Report and are available on the Company s website at In accordance with the provisions of Articles L and L of the French Commercial Code, General Shareholders Meetings are said to be extraordinary when their prpose is to amend the Company s Articles of Association or its nationality. Extraordinary General Shareholders Meetings are held whenever the interests of the Company so reqire. The Extraordinary General Shareholders Meeting may only validly deliberate if the shareholders present, represented or voting by correspondence possess, at the fi rst convening, at least one qarter of the shares with voting rights. If these conditions are not satisfi ed, the meeting is reconvened. It may only validly deliberate if the shareholders present, represented or voting by correspondence at the second convening possess at least one-fi fth of the shares with voting rights. If this qorm is not satisfi ed, the second meeting may be postponed ntil a date no later than two months after the date on which it was originally convened. Resoltions of the Extraordinary General Shareholders Meeting are passed by a majority of two-thirds of the shareholders present, represented or voting by correspondence. However, in the event of a capital increase throgh capitalisation of reserves, profi ts or isse premims, the resoltions of the meeting are passed on the basis of the qorm and majority reqired for Ordinary General Shareholders Meetings. 82 ANNUAL REPORT 2014

85 Information abot the Company and its capital 5 INFORMATION ABOUT THE COMPANY Company charter and Articles of Association The references to the Articles of Association in this section are references to the Articles of Association adopted by the Company s General Shareholders Meeting of 7 October 2011, as amended by the Board of Directors of the Company on 27 March Form Corporate prpose Registered office Term (a) Corporate form The Company is a pblic limited company with a Board of Directors governed by the laws and reglations in force on pblic limited companies, as well as by the Company s Articles of Association. (b) Corporate prpose The Company has the following prpose, both in France and abroad: the holding and management of all shares and membership rights and, to this end, the acqisition of interests in any company, grop or association, particlarly by way of prchase, sbscription and contribtion, as well as the sale in any form of the said shares or membership rights; the prospecting and exploitation of all mineral deposits, particlarly liqid or gaseos hydrocarbon deposits and related prodcts; the leasing, acqisition, transfer and sale of all wells, land, deposits, concessions, operating permits and prospecting permits, either on its own accont or on behalf of third parties, whether by participation or otherwise, and the transport, storage, processing, transformation and trading of all natral or synthetic hydrocarbons, all liqid or gaseos prodcts or by-prodcts of the sbsoil, and all minerals or metals; the acqisition, management or sale of any bildings; trading in any prodcts and commodities; the issance of any garantees, fi rst demand garantees, collateral and other sreties, particlarly to the benefi t of any grop, ndertaking or company in which it holds an interest, in the context of its activities, and the fi nancing or refi nancing of its activities; and generally speaking, the Company s direct or indirect participation in all commercial, indstrial, real estate, agricltral and fi nancial transactions, in France or other contries, either by the formation of new companies or by the contribtion, sbscription or prchase of shares or membership rights, merger, joint ventre or otherwise, and generally all transactions of any kind whatsoever directly or indirectly related to these activities and likely to facilitate development or management. (c) Registered office The registered offi ce is located at 51, re d Anjo, Paris, France. It may be transferred nder the conditions provided for by Article L of the French Commercial Code. (d) Term Unless dissolved or extended, as provided for in the Company s Articles of Association, the Company s term is set at ninety-nine years beginning on 13 October 2009, i.e. ntil 12 October Provisions relating to the Board of Directors and exective management (a) (i) Board of Directors Bylaws The Board of Directors has a set of bylaws specifying the operating procedres of the Company s Board of Directors. The bylaws, which were adopted by the Company s Board of Directors on 22 September 2011, came into effect on 15 December (ii) Composition The Company is governed by a Board of Directors comprising at least three (3) and no more than twelve (12) members, appointed by the General Shareholders Meeting, sbject to the exception provided for by law in the event of a merger. A legal entity may be appointed as a Director, bt that person mst, in accordance with the conditions provided for by law, appoint an individal who will be its permanent representative on the Board of Directors. (iii) Term of office Age limit The term of offi ce for Directors is three (3) years. A Director s offi ce shall end after the Ordinary General Shareholders Meeting called to approve the fi nancial statements for the past fi scal year and held in the year dring which that Director s term of offi ce expires. The nmber of Board members over the age of seventy (70) may not exceed one-third of the members in offi ce. When this nmber is exceeded, the eldest member shall be deemed to have resigned. Directors may be re-elected indefi nitely, sbject to the application of the above provisions relating to the age limit. They may be dismissed at any time by the General Shareholders Meeting. ANNUAL REPORT

86 5 Information abot the Company and its capital INFORMATION ABOUT THE COMPANY In the event of a vacancy de to the death or resignation of one or more Directors, the Board of Directors may make provisional appointments sbject to ratifi cation by the next Ordinary General Shareholders Meeting, within the limits and in accordance with the conditions established by law. In the event of non-ratifi cation, any previos resoltions adopted and actions taken shall no longer be valid. In the event of a vacancy de to the death, resignation or dismissal of a Director, the Director appointed nder the conditions set ot above by the Board of Directors to replace the otgoing Director shall remain in offi ce, sbject to ratifi cation by the General Shareholders Meeting, only for the remainder of his/her predecessor s term of offi ce. If the nmber of Directors falls below three (3), the remaining members (or the Stattory Aditors, or a designated representative, at the reqest of any interested party, by the President of the Commercial Cort) mst immediately convene a General Shareholders Meeting with a view to appointing one or more new Directors in order to bring the nmber of Board members p to the legal minimm. (iv) Powers of the Board of Directors The Board of Directors determines the strategies for the Company s bsiness and ensres their implementation. Sbject to the powers expressly given to the Shareholders Meetings and within the limits of the corporate prpose, it addresses all qestions relating to the proper fnctioning of the Company and governs, throgh its decisions, the affairs that concern it. In its relations with third parties, the Company is bond even by acts of the Board of Directors that are not inclded within the scope of the corporate prpose (nless the Company can prove that the third party knew that the act was beyond the scope of that prpose or that, given the circmstances, the third party cold not ignore that fact), with the mere pblication of the Articles of Association alone not constitting sch proof. The Board of Directors carries ot the adits and controls that it deems necessary. Each Director receives all the information necessary for the performance of his/her dties, and may obtain all necessary docments from the Chairman and Chief Exective Offi cer. The Board of Directors may grant to one or more of its members, or to third parties, who may or may not be shareholders, any special mandates for one or more specifi c prposes. It may also decide to create specialised committees within it. These committees, whose composition and powers are determined by the Board, perform their activities nder the responsibility of the latter. (v) Notices of meeting and deliberations The Board of Directors meets as often as reqired by the interests of the Company, when convened by its Chairman or Chief Exective Offi cer and as often as he/she sees fi t, at the place specifi ed in the notice of meeting. When the Board of Directors has not met for more than two months, at least one-third of the Board s members may ask the Chairman to convene a Board meeting to consider a specifi c agenda. The Chairman is then bond to act on sch reqests. A notice of meeting may be made by any means. The Board of Directors may only validly deliberate when at least half of its members are present. Decisions are taken by the majority of its members present or represented. In the case of a tied vote, the Chairman of the meeting has the casting vote. Sbject to legal and reglatory provisions, meetings of the Board of Directors may be condcted via videoconferencing or other telecommnications methods nder the conditions provided for in the bylaws adopted by the Board of Directors. The deliberations of the Board of Directors are recorded in meeting mintes established in accordance with law. Copies or excerpts of these mintes are issed and certifi ed in accordance with the law. (vi) Brea of the Board of Directors The Board of Directors chooses a Chairman from among its own members, who shold be an individal, and, if it deems it necessary, one or more Vice-Chairmen. It sets the term of their mandate, which cannot exceed the term of their mandate as a Director. The Board can terminate these mandates at any time. The age limit for holding the position of Chairman of the Board of Directors is set at seventy-fi ve (75) years of age. If the Chairman of the Board of Directors reaches this age dring his term of offi ce, he shall be deemed to have atomatically resigned. In the event of the temporary incapacity or death of the Chairman, the Vice-Chairman of the Board of Directors who is most senior in age is delegated to act as Chairman. In the case of temporary incapacity, this delegation is given for a limited term and is renewable. In the case of death, it is valid ntil a new Chairman is elected. The Board of Directors also appoints and determines the term of offi ce of a secretary, who may be chosen either from among the Directors or from otside their nmber. In the absence of the Chairman and Vice-Chairmen, the Board of Directors shall appoint a Director present to chair the meeting. If, as the reslt of simple omission, the Board has not expressly re-elected the meeting offi cers whose terms of offi ce as Directors have not expired, sch re-election is considered to have taken place atomatically, and it falls to a sbseqent Board meeting to formalise this re-election as necessary. 84 ANNUAL REPORT 2014

87 Information abot the Company and its capital 5 INFORMATION ABOUT THE COMPANY (vii) Compensation of Directors Members of the Board of Directors may receive compensation in respect of Directors fees, the total amont of which, determined by the General Shareholders Meeting, is distribted by the Board of Directors at its discretion. In particlar, the Board of Directors may allocate a greater share to those Directors who are members of the specialised committees created by the Board of Directors. (viii) Chairman of the Board of Directors The Chairman of the Board of Directors organises and directs the work of the Board of Directors, and reports on this work to the General Shareholders Meeting. The Chairman oversees the proper fnctioning of the Company s bodies and ensres, in particlar, that the Directors are capable of flfi lling their dties. The Board of Directors determines the amont, manner of calclation and payment of the Chairman s compensation, if applicable. The Chairman may be removed from offi ce at any time by the Company s Board of Directors. (ix) Observers The Board of Directors may appoint one or more observers to the Company, who mst be individals, and whose nmber may not exceed for. The term of offi ce for each of the observers is set at three (3) years. Observers are called pon to attend and observe meetings of the Board of Directors, and may be conslted by it; they may also present observations at the General Shareholders Meetings on the proposals sbmitted to them, if they deem it appropriate. They mst be invited to each meeting of the Board of Directors. The Board of Directors may assign specifi c tasks to observers. Sbject to the provisions of Article L of the French Commercial Code, they may sit on committees created by the Board of Directors. The observers shall have access to the same docments and information as those provided to Directors and shall be bond by the same obligations of loyalty and confi dentiality. The Board of Directors may decide to pay observers a proportion of the Directors fees allotted to it by the General Shareholders Meeting, and athorise the reimbrsement of expenses incrred by observers dring the corse of their work for the Company. (b) Exective management In accordance with the legal and reglatory provisions, the Company s exective management is assmed nder the responsibility of either the Chairman of the Board of Directors or another individal appointed by the Board of Directors and holding the title of Chief Exective Offi cer. The choice between these two methods of exercising the exective management is made by the Board of Directors, which mst inform the shareholders and third parties accordingly nder the conditions provided for by law. The decision of the Board of Directors regarding the choice of the methods of exercising the exective management is taken on the basis of a majority vote by the Directors present or represented. A change in the methods of exercising the exective management does not entail any change to the Articles of Association. (i) Chief Exective Officer Depending on the choice made by the Board of Directors, exective management is ensred either by the Chairman or by an individal appointed by the Board of Directors and holding the title of Chief Exective Offi cer. If the Board of Directors chooses to separate the fnctions of Chairman and Chief Exective Offi cer, it appoints the Chief Exective Offi cer, sets the term of his/her offi ce, determines his/ her compensation and, where applicable, establishes the limits on his/her powers. The age limit for holding the position of Chief Exective Offi cer is set at seventy (70) years of age. If the Chief Exective Offi cer reaches this age dring his term of offi ce, he shall be deemed to have atomatically resigned. The Chief Exective Offi cer may be removed from offi ce at any time by the Board of Directors. The Chief Exective Offi cer is vested with the broadest powers to act on behalf of the Company in any circmstance. He/she exercises these powers within the limit of the corporate prpose and sbject to those that the law expressly attribtes to the General Shareholders Meeting and to the Board of Directors. The Chief Exective Offi cer represents the Company in its relations with third parties. The Company is bond even by acts of the Chief Exective Offi cer that are not within the scope of the corporate prpose, nless the Company can prove that the third party knew that the act was beyond the scope of said prpose or the third party cold not be naware of it given the circmstances, with the mere pblication of the Articles of Association alone not constitting sch proof. (ii) Depty Chief Exective Officers At the proposal of the Chief Exective Offi cer, the Board of Directors may appoint one or more individals as Depty Chief Exective Offi cer, with the responsibility of assisting the Chief Exective Offi cer. The maximm nmber of Depty Chief Exective Offi cers is set at two (2). In agreement with the Chief Exective Offi cer, the Board of Directors determines the scope and extent of the powers granted to Depty Chief Exective Offi cers. With regard to third parties, Depty Chief Exective Offi cers have the same powers as the Chief Exective Offi cer. ANNUAL REPORT

88 5 Information abot the Company and its capital INFORMATION ABOUT THE COMPANY The age limit for holding the position of Depty Chief Exective Offi cer is set at seventy (70) years of age. If the Depty Chief Exective Offi cer reaches this age dring his term of offi ce, he shall be deemed to have atomatically resigned. At the proposal of the Chief Exective Offi cer and Depty Chief Exective Offi cers may be removed from offi ce at any time by the Board of Directors. The Board of Directors determines the compensation of Depty Chief Exective Offi cers. In the event of the termination of dties or incapacity of the Chief Exective Offi cer, the Depty Chief Exective Offi cers retain, nless decided otherwise by the Board of Directors, their fnctions and powers ntil sch time as a new Chief Exective Offi cer has been appointed Share capital and shares (a) Change in share capital The share capital may be redced or increased by decisions of the Extraordinary General Shareholders Meeting nder the conditions set by the laws and reglations. The Extraordinary General Shareholders Meeting may nevertheless delegate to the Board of Directors, in accordance with any conditions athorised by the laws and reglations, the necessary powers for the prposes of deciding or implementing a capital increase or any other isse of transferable secrities. (b) Payment for shares In the event of a capital increase, the shares sbscribed shold be paid-p at the time of sbscription, as decided by the Extraordinary General Shareholders Meeting or by the Board of Directors acting by delegation of the Extraordinary General Shareholders Meeting, either in fll or for a portion that may not be less than a qarter of the price of each share sbscribed in cash and, in any case, within a period of fi ve years, by decision of the Board of Directors, which sets the amont of the sms called, as well as the place and time at which the payments mst be made. The amont of shares to be sbscribed is payable either at the registered offi ce or at any other place indicated for this prpose. The Board of Directors also determines the conditions nder which shareholders may be athorised to pay for their shares in advance. Any call for fnds shold be broght to the attention of the shareholders 15 days prior to the date set for payment by a notice pblished in a newspaper athorised to carry legal notices in the place of the registered offi ce or by a registered letter with acknowledgement of receipt. As at its de date, any late payment shall atomatically entail the payment of 6% interest to the Company withot the need for a cort order, bt withot prejdice to the personal action that may be broght by the Company against the defalting shareholder and forced exection measres provided for by law. (c) Form of shares Flly paid-p shares may be registered or bearer shares, at the shareholder s discretion. They shall be registered in an individal accont nder the terms and conditions provided for by the applicable legal and reglatory provisions. The Company is entitled, at any time, nder the terms and conditions provided for by the legal and reglatory provisions, to ask the central cstodian responsible for managing the accont for the issing of its shares for the identity of holders of secrities conferring voting rights immediately or in the ftre in its General Shareholders Meetings, as well as the nmber of secrities held by each of them and, where applicable, the restrictions to which the secrities may be sbject. (d) Obligation to declare the crossing of thresholds In addition to the thresholds provided by the applicable legal and reglatory provisions, any individal or legal entity, acting alone or in concert, that comes to directly or indirectly hold a nmber of shares representing a percentage of the capital or voting rights eqal to or greater than 2%, or a mltiple of 2%, as long as it does not hold, alone or in concert, a total nmber of shares representing more than 50% of the Company s capital and voting rights, mst inform the Company of the total nmber of shares conferring entitlement to the Company s capital that it holds, by registered letter with acknowledgement of receipt sent to the registered offi ce within a period of for trading days from the date on which the aforementioned ownership thresholds are exceeded. At the reqest, recorded in the mintes of the General Shareholders Meeting, of one or more shareholders holding at least 2% of the Company s capital or voting rights, any failre to comply with this obligation shall be penalised, with respect to the shares exceeding the percentage that shold have been declared, by the withdrawal of the right to vote at any General Shareholders Meeting that may be held ntil the end of a two-year period following the date on which the notifi cation was formally recorded. The same dty of information applies, with the same timescale and nder the same conditions, each time the fraction of share capital or voting rights held by a shareholder falls below one of the thresholds mentioned above. For the calclation of the thresholds mentioned above, the shares and voting rights held are taken into accont, as well as even if the person concerned does not personally hold shares or voting rights otherwise comparable shares or voting rights in application of Article L of the French Commercial Code, in relation to the total nmber of shares making p the Company s capital and the total nmber of voting rights attached to those shares. The total nmber of voting rights is calclated on the basis of all shares to which voting rights are attached, inclding shares not eligible for voting rights. 86 ANNUAL REPORT 2014

89 Information abot the Company and its capital 5 INFORMATION ABOUT THE COMPANY (e) Rights and obligations attached to shares Each share confers a right to an eqal share in the Company s profi ts and corporate assets. Shareholders are not committed beyond the nominal amont of the shares that they possess. Ownership of a share atomatically entails adherence to the Company s Articles of Association and the decisions of its General Shareholders Meetings. The heirs, creditors, assignees or other representatives of a shareholder may not call for the affi xing of seals on the Company s assets and secrities, nor reqest their distribtion or sale at action, nor interfere in any way in its management. In order to exercise their rights, they mst refer to the statements of corporate assets and to the decisions of the General Shareholders Meetings. Each time it is necessary to own several shares in order to exercise any right, in the event of any exchange, consolidation or allocation of shares or as a conseqence of a capital increase or redction, merger or other transactions, the owners of single shares or those owning a smaller nmber than that reqired may not exercise these rights nless they personally decide to grop together sch shares or by or sell the necessary shares or allocation rights, as the case may be. The shares are indivisible in the view of the Company, which recognises only one owner for each share. The joint owners of indivisible shares may be represented at General Shareholders Meetings by one person only. The voting right attached to the share belongs to the sfrctary at Ordinary General Shareholders Meetings and to the bare owner at Extraordinary General Shareholders Meetings. A doble voting right is conferred to flly paid-p shares for which a registration in the Company s records is demonstrated for at least for years as at the date on which they are flly paid p, withot interrption, in the name of the same shareholder. Frthermore, in the event of a capital increase throgh the capitalisation of reserves, profi ts or isse premims, the doble voting right is conferred immediately pon the isse of any registered shares allocated free of charge to a shareholder who had old shares benefi ting from this same entitlement. Any share converted to bearer form or whose ownership is transferred loses the doble voting right, bt this right may be reinstated when the new holder of the secrities provides evidence of registration for an ninterrpted period of at least for (4) years. However, a transfer throgh inheritance, liqidation of marital property between sposes, or an inter-vivos donation to a spose or relative entitled to inherit does not lose the right acqired and does not interrpt the aforementioned for-year period. The merger or demerger of the Company has no effect on the doble voting right which may be exercised within the benefi ciary companies if the Articles of Association of those companies have constitted it. (f) Transfer of shares Shares may be freely transferred, by way of an inter-accont transfer nder the conditions provided for by the laws and reglations General Shareholders Meetings (a) Provisions common to General Shareholders Meetings A dly convened General Shareholders Meeting represents all shareholders. Its decisions are binding for all shareholders, even those who are absent, dissenting or legally incapable. Every shareholder, regardless of the nmber of shares that he/ she owns, has the right to participate in General Shareholders Meetings, be it personally, by appointing a proxy, or by voting by correspondence, in accordance with crrent laws and reglations. Any shareholder may also send a proxy to the Company withot indicating the name of their representative. All sch powers of attorney withot indication of the name of the proxy shall be considered as a vote in favor of the resoltions sbmitted or approved by the Board of Directors to the General Shareholders Meeting. Proof of the right to participate in the Company s General Shareholders Meetings, in whatever form, may be demonstrated via book entry or share registration nder the conditions and within the time periods stiplated by crrent reglations. Remote or proxy voting forms, as well as shareholding certifi cates, may be prepared, if the Board of Directors so stiplates, in electronic form, dly signed nder the conditions provided for by the applicable laws and reglations. For this prpose, the form may be directly entered and signed electronically on the website set p by the meeting s clearing agent. The electronic signing of the form may be condcted (i) by entering, nder conditions that comply with the provisions of the fi rst sentence of the second paragraph of Article of the French Civil Code, an identifying code and a password, or (ii) by sing any other process that meets the conditions defi ned in the fi rst sentence of the second paragraph of Article of the French Civil Code. The proxy or vote ths expressed before the meeting throgh this electronic means, as well as the acknowledgement of receipt given, if any, shall be considered as a written, irrevocable docment enforceable against all parties, except in cases of sales of secrities, which are sbject to the notifi cation provided for in Section IV of Article R of the French Commercial Code. The procedres for sending postal and proxy voting forms shall be specifi ed by the Board of Directors in the advance notice and notice of meeting. ANNUAL REPORT

90 5 Information abot the Company and its capital INFORMATION ABOUT THE COMPANY The Board of Directors may organise, nder legal and reglatory conditions, the participation and voting of shareholders at the Shareholders Meeting via videoconferencing or any other means of telecommnication that allows them to be identifi ed and that complies with legal and reglatory reqirements; the Board shall ensre the effectiveness of the means of identifi cation. For the calclation of the qorm and majority reqired for any Shareholders Meeting, shareholders who attend the General Shareholders Meeting via videoconferencing or other means of telecommnication that allows them to be identifi ed in accordance with legal and reglatory conditions shall be deemed present. (i) Convening of General Shareholders Meetings Shareholders Meetings are convened, nder conditions stiplated by law, by the Board of Directors or, otherwise, by the Stattory Aditors or by any other legally athorised persons. Meetings are held at the registered offi ce or at any other place specifi ed in the advance notice. (ii) Agenda of General Shareholders Meetings The agenda is set by the body that calls the meeting. However, one or more shareholders, or the works concil, if it exists, have the right, sbject to crrent laws and reglations, to reqest that items or draft resoltions are added to the agenda. The meeting may not deliberate on any matter not inclded in the agenda. However, it may, nder any circmstances, remove one or more members of the Board of Directors from offi ce and appoint their replacement. (iii) Chairing of General Shareholders Meetings The General Shareholders Meeting is chaired by the Chairman of the Board of Directors or, in his/her absence, by a member of the Board of Directors appointed by the Board. Otherwise, the meeting elects its own Chairman. Meetings convened by the Stattory Aditors are chaired by the aditor who is most senior in age. The Chairman of the meeting is assisted by two tellers who constitte, with the Chairman, the meeting offi cers. The roles of tellers are performed by two willing shareholders present at the start of the meeting who represent, both in their own right and by virte of the powers conferred pon them, the greatest nmber of shares. The meeting offi cers appoint a secretary, who may be chosen from otside the members of the meeting. (iv) Attendance sheet At each meeting, an attendance sheet is drawn p containing the fi rst and last names and domiciles of the shareholders present, represented or voting by correspondence and of any of their proxies, as well as the nmber of shares held by each of them. This sheet, drawn p nder the conditions provided for by Article R of the French Commercial Code and to which the proxies of the represented shareholders and postal voting forms are annexed, is initialed by the shareholders present or their proxies and certifi ed as accrate by the meeting offi cers. It is fi led at the registered offi ce and mst be commnicated to any reqesting person nder the conditions laid down by the laws and reglations in force. (v) Deliberations of General Shareholders Meetings Sbject to the doble voting right provided for in the Company s Articles of Association, each shareholder has as many votes as the nmber of shares that he/she owns or represents. The deliberations are recorded in mintes, which are entered in a special register. These mintes are signed by the meeting offi cers. Copies or excerpts of mintes are signed by the Chairman of the Board of Directors. (b) Ordinary General Shareholders Meetings The Ordinary General Shareholders Meeting makes all decisions other than those stiplated in Articles L and L of the French Commercial Code concerning the competence of Extraordinary General Shareholders Meetings. The Ordinary General Shareholders Meeting is convened each year by the Board of Directors, within six months of the end of the fi scal year. Ordinary General Shareholders Meetings may also be convened extraordinarily. The deliberations of the Ordinary General Shareholders Meeting are valid at the fi rst convening only if the shareholders present, represented or voting by correspondence possess at least one-fi fth of the shares with voting rights. If these conditions are not satisfi ed, the meeting is reconvened. At this second meeting, the deliberations are valid irrespective of the nmber of shares present or represented. Resoltions of the Ordinary General Shareholders Meeting are passed by a majority of votes held by the shareholders present, represented or voting by correspondence. 88 ANNUAL REPORT 2014

91 Information abot the Company and its capital 5 INFORMATION ABOUT THE COMPANY (c) Extraordinary General Shareholders Meetings In accordance with the provisions of Articles L and L of the French Commercial Code, General Shareholders Meetings are said to be extraordinary when their prpose is to amend the Company s Articles of Association or its nationality. Extraordinary General Shareholders Meetings are held whenever the interests of the Company so reqire. The Extraordinary General Shareholders Meeting may only validly deliberate if the shareholders present, represented or voting by correspondence possess, at the fi rst convening, at least one qarter of the shares with voting rights. If these conditions are not satisfi ed, the meeting is reconvened. It may only validly deliberate if the shareholders present, represented or voting by correspondence at the second convening possess at least one-fi fth of the shares with voting rights. If this qorm is not satisfi ed, the second meeting may be postponed ntil a date no later than two months after the date on which it was originally convened. Resoltions of the Extraordinary General Shareholders Meeting are passed by a majority of two-thirds of the shareholders present, represented or voting by correspondence. However, in the event of a capital increase throgh capitalisation of reserves, profi ts or isse premims, the resoltions of the meeting are passed on the basis of the qorm and majority reqired for Ordinary General Shareholders Meetings. (b) Payment of dividends The terms for payment of the dividends voted by the General Shareholders Meeting shall be set by it or otherwise by the Board of Directors in accordance with the provisions of Articles L to L of the French Commercial Code. The General Shareholders Meeting has the option of granting shareholders a choice, for all or part of a dividend or interim dividend to be paid, between payment of the dividend or interim dividend in cash or in shares nder the conditions set by law. All or part of any dividend, interim dividend, reserves, premims or any other sms that may be distribted to shareholders may be paid in cash or in kind in the form of Company assets inclding fi nancial secrities held by the Company. A dividend payment in kind may be made with or withot the option of a payment in cash Provisions of the Articles of Association or other provisions that might have the effect of delaying, deferring or preventing a change of control The Articles of Association do not contain any stiplations that have the potential to delay, defer or prevent a change of control of the Company Fiscal year Dividend (a) Term of the fiscal year The fi scal year has a one-year term beginning on 1 Janary and ending on 31 December. ANNUAL REPORT

92 5 Information abot the Company and its capital INFORMATION ABOUT CAPITAL 5.2 INFORMATION ABOUT CAPITAL General information regarding capital Amont of capital The Company s capital at 31 December 2014 was 11,533, It was divided into 115,336,534 shares with a nominal vale of 0.10 each, flly paid-p. Each share confers a right to the Company s profi ts and assets in proportion to the fraction of the capital that it represents. The Company s share capital may be increased, redced or amortised nder the terms and conditions governed by law, the Articles of Association making no specifi c provision for this Shares held by the Company or on its behalf (a) (i) Share reprchase plan athorised by the Eleventh Resoltion of the Ordinary and Extraordinary General Shareholders Meeting of 19 Jne 2014 Legal framework The terms of the Eleventh Resoltion of the Company s Ordinary and Extraordinary General Shareholders Meeting of 19 Jne 2014 athorised the Board of Directors, with the option to sbdelegate, to acqire, sell or transfer, on one or more occasions at the times it shall determine, shares of the Company within the limit of 10% of the Company s share capital as it exists on the date of said meeting (it being specifi ed that when the shares are prchased to stimlate the market nder a liqidity agreement, the nmber of shares sed to calclate this 10% limit corresponds to the nmber of shares prchased, less the nmber of shares resold dring the athorisation period) or 5% if they are shares acqired for holding and sbseqent remittance in payment or exchange in external growth operations. The athorisation granted by the Company s Ordinary and Extraordinary General Shareholders Meeting of 19 Jne 2014 immediately terminated and replaced the athority granted by the General Shareholders Meeting of 20 October This athorisation is valid for a period of 18 months from 19 Jne The framework for the athorisation is provided by Articles L et seq. of the French Commercial Code, Eropean Reglation No. 2273/2003 of 22 December 2003 and the General Reglations of the Atorité des Marchés Financiers, as well as any other legal and reglatory provisions that cold apply. (ii) Objectives of the share reprchase plan Share reprchases may be made with a view to: honoring obligations nder stock option plans, allocations of bons shares or other share allocations or sales to employees and/or corporate offi cers of the Company and its sbsidiaries, specifi cally as part of company profi t-sharing or any share prchase plan or bons share plan; honoring obligations relating to secrities conferring access to Company shares, by any means, immediately or in the ftre (inclding any hedging transactions by virte of the Company s obligations relating to sch transferable secrities); ensring the liqidity of Company shares throgh an investment services provider nder a liqidity agreement, in accordance with the ethics charter of the French Financial Markets Association (AMAFI) recognised by the Atorité des Marchés Financiers; holding shares for sbseqent se as exchange or payment in a potential external growth operation; and cancelling all or some of the shares ths reprchased as part of a capital redction decided or athorised by the General Shareholders Meeting prsant to the Twenty-Fifth Resoltion of the General Shareholders Meeting of 19 Jne 2014 or by any sbseqent General Shareholders Meeting. This plan wold also be intended to allow the Company to operate for any other prpose athorised or that may be athorised by the laws and reglations in force. In sch a case, the Company wold inform its shareholders throgh a statement. (iii) Principal characteristics and procedres of the plan The maximm nmber of shares that can be reprchased by the Company may not exceed 10% of the Company s share capital at any time, with this percentage being applicable to capital adjsted for transactions effective after the General Shareholders Meeting of 19 Jne 2014, or 5% of this capital if it involves shares acqired for holding and sbseqent remittance in payment or exchange as part of external growth operations. The maximm prchase price may not exceed 6 per share, it being specifi ed that the maximm amont of the fnds that the Company can allocate to its share reprchase plan may not exceed 69,201, ANNUAL REPORT 2014

93 Information abot the Company and its capital 5 INFORMATION ABOUT CAPITAL The acqisitions made by the Company nder the athorisation granted by the Eleventh Resoltion of the Ordinary and Extraordinary General Shareholders Meeting of 19 Jne 2014 may not, nder any circmstances, lead the Company to hold, directly or indirectly, at any time, more than 10% of the shares comprising the share capital on the date in qestion. The shares may be prchased, sold or transferred, inclding dring a pblic offer of Company shares, nder the conditions set ot in the applicable legislative and reglatory provisions, by any means; specifi cally, on reglated markets, mltilateral trading systems or over-the-conter systems, inclding when prchased or sold in blocks, or throgh derivative fi nancial instrments or transferable secrities conferring access to the Company s capital, in accordance with the legal and reglatory provisions applicable on the date of the transactions concerned and sbject to the time periods estimated by the Board of Directors. (iv) Nmber of shares held directly and indirectly by the Company and distribtion of the shares held by the Company by objectives As at 31 December 2014, the Company held 4,590,987 of its own shares, representing 3.98 % of its capital, distribted as follows: (b) (i) 740,672 shares nder a liqidity agreement; and 3,850,315 treasry shares, held for sbseqent exchange or settlement in potential external growth operations. Description of the new share reprchase plan adopted by the General Shareholders Meeting of 19 Jne 2014 Date of the General Shareholders Meeting athorising the Company s share reprchase plan The Company s Ordinary and Extraordinary General Shareholders Meeting of 19 Jne 2014 approved a resoltion athorising the Board of Directors, with the option to sb-delegate, to acqire, sell or transfer, on one or more occasions at the times it shall determine, shares of the Company within the limit of 10% of the Company s share capital as it exists on the date of said meeting (it being specifi ed that when the shares are prchased to stimlate the market nder a liqidity agreement, the nmber of shares sed to calclate this 10% limit is the nmber of shares prchased, mins the nmber of shares resold dring the athorisation period) or 5% if they are shares acqired for holding and sbseqent remittance in payment or exchange in external growth operations. The framework for the athorisation is provided by Articles L et seq. of the French Commercial Code, Eropean Reglation No. 2273/2003 of 22 December 2003 and the General Reglations of the Atorité des Marchés Financiers, as well as any other legal and reglatory provisions that cold apply. (ii) Distribtion of the shares held by the Company by objective The distribtion of the shares held by the Company by objective is indicated in Section (a) (iv) of this Annal Report. (iii) Objectives of the share reprchase plan Reprchases of shares may be made for any prpose permitted by law or the applicable reglations; the prposes of this share reprchase plan are: to honor obligations nder stock option plans, allocations of bons shares or other share allocations or sales to employees and/or corporate offi cers of the Company and its sbsidiaries, specifi cally as part of Company profi t-sharing or any share prchase plan or bons share plan; to honor obligations relating to transferable secrities conferring access to Company shares, by any means, immediately or in the ftre (inclding any hedging transactions by virte of the Company s obligations relating to sch transferable secrities); to ensre the liqidity of Company shares throgh an investment services provider nder a liqidity agreement in accordance with the ethics charter of the French Financial Markets Association (AMAFI) recognised by the Atorité des Marchés Financiers; to hold shares for sbseqent se as exchange or payment in a potential external growth operation; and to cancel all or part of the shares reprchased in this way as part of a capital redction decided or athorised by this General Shareholders Meeting prsant to the Twentieth Resoltion or by any sbseqent General Shareholders Meeting. This plan wold also be intended to allow the Company to operate for any other prpose athorised or that comes to be athorised by the laws and reglations in force. In sch a case, the Company wold inform its shareholders throgh a statement. (iv) Maximm share of capital, maximm nmber and characteristics of the secrities and maximm prchase price Prsant to the terms of the Eleventh Resoltion adopted by the Company s Ordinary and Extraordinary General Shareholders Meeting of 19 Jne 2014, the Board of Directors is athorised to prchase or arrange for the prchase of shares of the Company (ISIN code: FR , listed on the NYSE Eronext reglated market in Paris, compartment B), within the limit of 10% of the share capital (it being nderstood that when the shares are prchased to stimlate the market nder a liqidity agreement, ANNUAL REPORT

94 5 Information abot the Company and its capital INFORMATION ABOUT CAPITAL the nmber of shares sed to calclate this 10% limit corresponds to the nmber of shares prchased, mins the nmber of shares resold dring the athorisation period) or 5% if they are shares acqired for holding and sbseqent remittance in payment or exchange as part of external growth operations. For information, as at the date of this Annal Report, 5% of the Company s capital corresponds to 5,766,826 shares and 10% of the Company s capital corresponds to 11,533,653 shares. The maximm prchase price mst not exceed 6 per share, corresponding to a maximm amont that may be allocated to the share reprchase plan of 69,201, Other secrities conferring access to the capital As at the date of this Annal Report, there are no secrities in existence that confer access to the Company s capital, other than the bons shares allocated to the Company s Chief Exective Offi cer (see Section of this Annal Report). In addition, a long-term incentive programme for employees and corporate offi cers, which is set to take the form of an allocation of bons preference shares (share category to be created in advance), convertible to ordinary shares, was approved by the Ordinary and Extraordinary General Shareholders Meeting of 19 Jne The prpose of this programme is to offer longterm incentives for the Directors and employees of the Grop, consisting of the allocation of bons preference shares that carry certain rights and which are convertible into a certain nmber of ordinary shares at the end of a pre-defi ned period, conditional on reaching share price targets set by the Board of Directors. The main characteristics of the preference shares that wold be created are described below: they carry no voting right and no right to reserves, bt do benefi t from the right to dividends and to any liqidation srpls; the preference shares can be converted into ordinary shares after for years sbject to reaching share price targets set by the Board of Directors in accordance with rles defi ned by the General Shareholders Meeting; the weighted share price, sed to calclate the high and low prices, is the weighted average price of all of the Company s shares traded in the last fi scal year preceding the preference share allocation date or the preference share conversion date, as the case may be; the share price fl oor on the conversion date is at least eqal to the weighted share price mentioned above; the share price ceiling on the conversion date is the weighted share price mentioned above pls 40%; between the price fl oor and price ceiling, the conversion to an increasing nmber of ordinary shares is linear; and the preference shares are atomatically converted at the end of the lock-in period if the objectives set have been achieved (i.e. at least the price fl oor). If not, the Company bys back the preference shares at their nominal vale, it being nderstood that in all cases the preference shares no longer confer a right to dividends with effect from the conversion date. The Board of Directors may (i) set the terms and conditions for allocating the preference shares and the criteria for their conversion, (ii) determine the identity of the benefi ciaries, the nmber of preference shares allocated to each of them and the terms and conditions for allocating said preference shares, and (iii) make any necessary adjstments in the event of a transaction involving the Company s capital, it being nderstood that the shares will be acqired and retained for a minimm period of two years, and that if the minimm period is abolished, the acqisition period will be for years. This athorisation, granted to the Company s Board of Directors by the General Shareholders Meeting of 19 Jne 2014, is described in brief in Section of this Annal Report. As at the date of this Annal Report, this athorisation has not been exercised. 92 ANNUAL REPORT 2014

95 Information abot the Company and its capital 5 INFORMATION ABOUT CAPITAL Athorised share capital not issed The table below shows the fi nancial athorisations and delegations granted to the Board of Directors by the Combined (Ordinary and Extraordinary) General Shareholders Meeting of 19 Jne 2014: Date of the General Shareholders Meeting Resoltion Type of delegation or athorisation Ceiling in eros Period of validity 19 Jne th Delegation of athority to the Board of Directors to isse Company shares or secrities conferring access to the capital of the Company or one of its sbsidiaries, maintaining shareholders pre-emptive sbscription rights 19 Jne th Delegation of athority to the Board of Directors to isse shares or secrities conferring access to the capital, removing pre-emptive sbscription rights, as part of a pblic offer 19 Jne th Delegation of athority to the Board of Directors to isse Company shares or secrities conferring access to the capital of the Company or one of its sbsidiaries, removing shareholders pre-emptive sbscription rights by private placement governed by Article L II of the French Monetary and Financial Code 19 Jne th Athorisation for the Board of Directors, in the event of an isse, with removal of shareholders preemptive sbscription rights, shares and secrities conferring access to the capital 19 Jne th Athorisation for the Board of Directors to increase the nmber of secrities to be issed for a capital increase with or withot maintaining shareholders pre-emptive sbscription rights Maximm nominal amont of increases: 6.5 million (1) Maximm nominal amont of debt secrity isses: 400 million (3) Maximm nominal amont of capital (1) (4) increases: 4.5 million Total nominal amont of debt secrities (2) (3) that may be issed: 270 million Maximm nominal amont of capital (1) (4) increases: 4.5 million Total nominal amont of debt secrities (2) (3) that may be issed: 270 million Maximm amont of capital increases: 10% of the Company s capital on the date of the decision by the Board of (1) (4) Directors, per 12-month period Concerns each isse decided prsant to Resoltions Thirteen and Forteen, sbject to compliance with the ceilings in the resoltion nder which the isse is decided The increase mst be made within 30 days of the initial sbscription and may not exceed 15% of the initial isse This concerns each of the isses decided pon prsant to Resoltions 12, 13, 14 and 15 and sbject to the ceiling set by Resoltion 12 adopted by the General Shareholders Meeting of 19 Jne 2014, solely to service the redcible reqests made by the shareholders and/ or the assignees of the pre-emptive sbscription rights 26 months, ntil 19 Agst months, ntil 19 Agst months, ntil 19 Agst months, ntil 19 Agst 2016 ANNUAL REPORT

96 5 Information abot the Company and its capital INFORMATION ABOUT CAPITAL Date of the General Shareholders Meeting Resoltion Type of delegation or athorisation Ceiling in eros Period of validity 19 Jne th Delegation of athority to the Board of Directors to isse shares or secrities conferring access to the capital in the event of a pblic exchange offer initiated by the Company, removing pre-emptive sbscription rights 19 Jne th Athorisation for the Board of Directors to isse shares and secrities conferring access to the capital, in order to compensate in-kind contribtions made to the Company in the form of shares or secrities conferring access to the capital, removing pre-emptive sbscription rights 19 Jne th Delegation of athority to the Board of Directors to increase the Company s capital throgh the capitalisation of reserves, profi ts, premims or other sms which may be capitalised, maintaining shareholders pre-emptive sbscription rights 19 Jne th Delegation of athority to the Board of Directors to isse secrities giving rise to the allocation of debt secrities 19 Jne nd Athorisation for the Board of Directors to allocate Company preference shares free of charge to employees and/or corporate offi cers of the Company and its sbsidiaries, removing shareholders pre-emptive sbscription rights Maximm nominal amont of capital (1) (4) increases: 4.5 million Total nominal amont of debt secrities (2) (3) that may be issed: 270 million Maximm amont of capital increases: 10% of the Company s capital on the date of the Board of Directors (1) (4) decision Total nominal amont of debt secrities (2) (3) that may be issed: 270 million The maximm nominal amont of the capital increases is eqal to the total amont of sms that may be capitalised prsant to the reglations in force, calclated atonomosly, separately and independently from the ceilings specifi ed in the other resoltions Maximm nominal amont of the secrities to be issed: 400 million (this ceiling is independent of the amont of debt secrities that may be issed on the basis of Resoltions 12 to 18) The total nmber of bons preference shares allocated may not exceed 0.2% of the Company s capital on the date on which it is decided to allocate them, and the nmber of ordinary shares created if the preference shares are converted may not exceed 2% of the share capital on the date of conversion The nmber of preference shares allocated to any one exective corporate offi cer mst not exceed 20% of the allocated preference share package 26 months, ntil 19 Agst months, ntil 19 Agst months, ntil 19 Agst months, ntil 19 Agst months, ntil 19 Agst ANNUAL REPORT 2014

97 Information abot the Company and its capital 5 INFORMATION ABOUT CAPITAL Date of the General Shareholders Meeting Resoltion Type of delegation or athorisation Ceiling in eros Period of validity 19 Jne rd Athorisation to the Board of Directors to freely allocate Company shares to employees and/or corporate offi cers of the Company and its sbsidiaries 19 Jne th Delegation of athority to the Board of Directors to carry ot capital increases reserved for employees who are members of the Company savings plan, removing shareholders pre-emptive sbscription rights 19 Jne th Athorisation for the Board of Directors to redce the share capital by cancelling shares The total nmber of bons shares awarded free of charge may not represent more than 1% of the Company s capital (on the date of the Board of Directors decision to allocate them), it being specifi ed that the awarding of bons shares to the Chairman of the Board of Directors, the Chief Exective Offi cer and any Depty Chief Exective Offi cers is sbject to performance conditions and may not exceed 0.5% of the Company s capital (on the date of the Board of Directors decision to award them) Maximm nominal amont of immediate or ftre capital increases: 0.5% of the Company s capital on the date of the Board s decision to allocate, atonomosly and separately from the ceilings specifi ed in the other resoltions Sbscription price eqal to the average closing price over the 20 trading days preceding the date on which the Board of Directors set the opening date of the sbscription period (with the maximm possible discont provided for by law) Delegation of athority to cancel, sbject to a limit of 10% of the capital in any 24-month period, all or some of the shares acqired as part of a share reprchase plan 38 months, ntil 19 Agst months, ntil 19 Agst months, ntil 19 December 2015 (1) Conts towards the overall ceiling of 6.5 million specifi ed in Resoltion 12 and which applies to all isses that may be ndertaken prsant to Resoltions 12 to 18. (2) This sm of 270 million is an overall ceiling covering all debt secrities issed prsant to Resoltions 13, 14, 17 and 18. (3) Conts towards the overall ceiling of 400 million specifi ed in Resoltion 12 and which applies to all isses that may be ndertaken prsant to Resoltions 12 to 18. (4) This ceiling conts towards the ceiling of 4.5 million on the nominal amont of capital increases covering all isses that may be ndertaken prsant to Resoltions 13, 14, 17 and 18. ANNUAL REPORT

98 5 Information abot the Company and its capital INFORMATION ABOUT CAPITAL History of the share capital over the last three fiscal years The table below shows the change in the Company s capital since its incorporation: Date Natre of operation Capital before operation Isse premim Shares created Nominal vale Total nmber of shares Capital after operation, in eros 13/10/2009 Incorporation N/A N/A 37, ,000 37,000 15/11/2010 Capital increase by incorporation of receivable sbscribed in fll by Marel & Prom 15/11/2010 Capital increase by incorporation of receivable sbscribed in fll by Marel & Prom 02/12/2011 Capital redction by redcing the total nmber of shares 02/12/2011 Capital redction by redction of the nominal vale of the shares 02/12/2011 Capital increase maintaining pre-emptive sbscription rights 14/12/2011 Capital increase by incorporation of sms dedcted on isse premims 37,000 N/A N/A ,000 40,700 40,700 N/A 121,266, ,303, ,433, ,433, ,418, N/A ,286, ,015, ,015, ,286,602 N/A ,286,602 9,728, ,728, ,289, ,108, ,394,931 11,439, ,439, , , ,336,534 11,533, Major shareholders Major shareholders Since 31 December 2014 and to the best of the Company s knowledge, the composition of the Company s shareholding has not changed signifi cantly. At 31 December 2014, the capital and voting rights were distribted as follows: 31/12/2014 Nmber of shares % of capital Nmber of exercisable voting rights % of exercisable voting rights % of theoretical voting rights * s/110,760,051 s/115,336,534 Pacifi co SA 28,749, % 28,749, % 24.93% Macif 8,324, % 8,324, % 7.22% Pblic 73, 671, % 73, 671, % % Treasry shares 4, 590, % TOTAL 115, 336, % 110, 745, % % * Theoretical voting rights = total nmber of voting rights attached to the total nmber of shares, inclding treasry shares and non-voting shares. 96 ANNUAL REPORT 2014

99 Information abot the Company and its capital 5 INFORMATION ABOUT CAPITAL At 31 December 2013, the capital and voting rights were distribted as follows: 31/12/2013 Nmber of shares % of capital Nmber of exercisable voting rights % of exercisable voting rights % of theoretical voting rights * s/110,987,992 s/115,336,534 Pacifi co SA 28,749, % 28,749, % 24.93% Macif 8,324, % 8,324, % 7.22% Pblic 73,852, % 73,914, % 64.08% Treasry shares 4,410, % TOTAL 115,336, % 110,987, % 96.23% * Theoretical voting rights = total nmber of voting rights attached to the total nmber of shares, inclding treasry shares and non-voting shares. At 31 December 2012, the capital and voting rights were distribted as follows: 31/12/2012 Nmber of shares % of capital Nmber of exercisable voting rights % of exercisable voting rights % of theoretical voting rights * s/111,768,202 s/115,336,534 Pacifi co SA 28,749, % 28,749, % 24.93% Macif 8,324, % 8,324, % 7.22% Pblic 74,694, % 74,694, % 64.76% Treasry shares 3,568, % TOTAL 115,336, % 111,768, % 96.91% * Theoretical voting rights = total nmber of voting rights attached to the total nmber of shares, inclding treasry shares and non-voting shares. To the Company s knowledge, none of its shareholders has offered any of the Company s shares as pledges Major shareholders voting rights The voting rights attached to capital or dividend shares are proportional to the portion of the capital they represent. Each share entitles the holder to one vote. However, Article 11 paragraph 7 of the Company s Articles of Association provides for a doble voting right attached to flly paid-p shares with evidence of registration in the Company s records for at least for (4) years withot interrption from the date on which they were flly paid-p, in the name of the same shareholder Shareholders with more than 5% of the capital To the best of the Company s knowledge, only Pacifi co and Macif each directly or indirectly hold more than 5% of the capital and/or voting rights of the Company. As at 31 December 2014, Pacifi co and Macif respectively held 24.93% of the capital and % of the exercisable voting rights of the Company and 7.22% of the capital and 7.52 % of the exercisable voting rights of the Company. Pacifi co is a company in which more than 99% of the capital and voting rights are held by Jean-François Hénin, Chairman of the Board of Directors of the Company, and his family (Jean-François Hénin personally holds approximately 10% of Pacifi co s capital and voting rights) Control over the isser exercised by one or more shareholders As at 31 December 2014, Pacifi co held 24.93% of the capital and 25.96% of the exercisable voting rights of the Company. It shold be noted that the presence of Macif, another major shareholder which holds 7.22% of the capital and 7.52 % of the exercisable voting rights of the Company as at 31 December 2014, the organisation and operating procedres of the Board of Directors and its specialised committees, the nmber of Independent Directors (forming half of the Board of Directors which ensres the prevention of confl icts of interest and reglarly condcts its assessment, two-thirds of the Adit and Risk Committee and ANNUAL REPORT

100 5 Information abot the Company and its capital INFORMATION ABOUT CAPITAL two-thirds of the Appointments and Compensation Committee, it being stated that no exective corporate offi cer is a member of one of those committees), the separation of the offi ces of Chairman and Chief Exective Offi cer, compliance with the bylaws, with the code of condct to prevent insider trading and the corporate governance code for small and mid-cap companies pblished by Middlenext in December 2009, all contribte to the absence of control by any one shareholder of the Company Agreement that cold reslt in a change of control As at the date of this Annal Report, there was, to the best of the Company s knowledge, no shareholders agreement or other arrangement that cold lead to a change in control of the Company Elements that cold have an impact in the event of a pblic offer As at 31 December 2014, the elements that cold have an impact in the event of a pblic offer are indicated below: strctre of the Company s capital: see Section of this Annal Report; stattory restrictions on the exercise of voting rights and transfers of shares or clases of the conventions broght to the attention of the Company prsant to Article L of the French Commercial Code: none; direct or indirect eqity interests in the capital of which it is aware prsant to Articles L and L of the French Commercial Code: see Section of this Annal Report; list of holders of any secrity carrying special control rights and a description of those rights: none; control mechanisms provided in a possible employee shareholding system when the controlling rights are not exercised by those shareholders: none; agreements among shareholders of which the Company is aware and which may reslt in restrictions on the transfer of shares and the exercise of voting rights: none; rles applicable to the appointment and replacement of members of the Board of Directors and amendments to the Company s Articles of Association: see Sections (a) and 5.1 of this Annal Report; powers of the Board of Directors, in particlar the isse and reprchase of shares: see Sections and of this Annal Report; agreements signed by the Company which are modifi ed or cease to apply in the event of a change of control of the Company, nless this disclosre, exclding cases with a legal disclosre obligation, wold serios harm its interests: none; and agreements providing for indemnities for members of the Board of Directors or employees, if they resign or are dismissed withot real or serios case, or if their employment ends becase of a pblic offer: none Dividend distribtion policy The dividend distribtion policy is defi ned by the Company s Board of Directors. Among other things, it takes into consideration factors sch as the Company s reslts, its fi nancial position and Seplat s distribtion policy. The Company s policy regarding the management of its eqity consists mainly, as an exploration/prodction company, of making the necessary investments for the prposes of developing its crrent and ftre sorces of prodction. In this respect, it decided not to distribte dividends for fi scal years 2010 and However, the Company did indicate that it wold consider the possibility of distribting dividends in ftre fi scal years, in keeping with its cash fl ow reqirements and plans for investment. Based on the Company s consolidated net income for the year ended 31 December 2012, the Board of Directors recommended to the Company s Ordinary and Extraordinary General Shareholders Meeting of 20 Jne 2013 that a dividend of 0.08 per share be paid in respect of fi scal year This resoltion was approved by the Company s Ordinary and Extraordinary General Shareholders Meeting of 20 Jne Based on the Company s consolidated income for the year ended 31 December 2013, the Board of Directors decided to recommend to the Company s Ordinary and Extraordinary General Shareholders Meeting of 19 Jne 2014 that a dividend of 0.24 per share be paid in respect of fi scal year This resoltion was approved by the Company s Ordinary and Extraordinary General Shareholders Meeting of 19 Jne Based on the Company s consolidated income for the year ended 31 December 2014, the Board of Directors has decided to recommend to the Company s Ordinary and Extraordinary General Shareholders Meeting to be held on 22 May 2015 that a dividend of 0.30 per share be paid in respect of fi scal year ANNUAL REPORT 2014

101 Information abot the Company and its capital 5 RELATED-PARTY TRANSACTIONS 5.3 RELATED-PARTY TRANSACTIONS Services agreement General presentation On 31 Jly 2010, Seplat and Marel & Prom entered into a technical services agreement (the Services Agreement ) governed by English law, nder the terms of which Marel & Prom has agreed to provide services that wold allow Seplat to flfi l its obligations as operator nder the Joint Operating Agreement relating to the operation of OMLs 4, 38 and 41. In an amendment formalised on 26 September 2011, the Company replaced Marel & Prom as Seplat s contractor nder the terms of the Services Agreement with effect from the Listing date for the Company s shares, i.e. 15 December 2011, it being nderstood that at this date, Jean- François Hénin was a Director of both Seplat (which is no longer the case since the end of 2013) and the Company, and that Michel Hochard was a Director of Seplat and Chief Exective Offi cer of the Company (since 27 Agst 2014, he has been Depty Chief Exective Offi cer of the Company) Services provided and compensation (a) General consltancy services Under the terms of the Services Agreement, the Company provides Seplat with general services (the General Services ) covering (i) management, (ii) project management (inclding related services) and (iii) fi nancial services. More specifi cally, the General Services mainly cover: research and development; information technology; administration, corporate policy, organisation, training and personnel; fi nance, acconting, insrance and taxation; legal affairs and negotiations, inclding the management contract; and management, spervision and planning. In order to flfi l its obligations, the Company assigns employees to Seplat. The assigned employees hold the positions of (i) technical manager, (ii) fi nance manager, and (iii) geologists, geophysicists, and reservoir engineers. The Company may also send other experts, if reqired. Each year, the Company and Seplat jointly defi ne the scope of the consltancy services (inclding the personnel on secondment) to be provided to Seplat and the fees de with regard to the provision of sch services. (b) Technical services The Company also provides Seplat with technical services (the Technical Services ) and advises Seplat (i) on all commnications with the Nigerian government and with the NNPC and NPDC, and (ii) on the terms of the local content contracts with Shebah Petrolem Development Company Limited and Platform Petrolem Limited and any other party. The Technical Services inclde: petrolem engineering and exploration; prodction and engineering; health, safety and environment isses; procrement (inclding the prchase of services and eqipment as well as the related consltancy services); geology and geophysics; facilities engineering; the selection of drillers and any other providers of key services; the short-term work schedle and approval of the bdget, inclding the fi ve-year bsiness plan; fi nancial reporting to Seplat s Directors and shareholders; and the se of workstations and software by the Company s teams for the performance of the Technical Services. The remneration for these services is based on a daily rate, the amont of which varies according to the skills and nmber of people involved in providing the services. In fi scal year 2014, the amont of the services invoiced by the Company to Seplat nder the Services Agreement amonted to 6,000 exclsive of tax. (c) Additional services Frthermore, Seplat may reqest additional services from the Company. If Seplat wishes to receive these additional services, it mst reach an agreement with the Company on certain conditions, sch as the price, the personnel who will provide these services and the schedle for the performance of sch services. ANNUAL REPORT

102 5 Information abot the Company and its capital RELATED-PARTY TRANSACTIONS (d) Progress reports relating to services At Seplat s reqest, the Company prepares and sends progress reports to Seplat on the progress of the services being provided, in addition to any other relevant information, so as to allow Seplat to flfi l its obligations nder the Joint Operating Agreement. (e) Responsibilities The Services Agreement also stiplates that the Company will not be liable for damages reslting from the services provided, nless they are de to gross negligence by it, its representatives, employees or co-contracting parties, it being specifi ed nevertheless that the Company may not in any case be held liable for any reservoir damage or polltion or any environmental harm or collateral damage. It also states that the Company s liability nder the agreement may not exceed a sm corresponding to 100% of the amonts invoiced in respect of the services provided Transfer and sbcontractors Sbject to obtaining the prior written agreement of the other party, the Company and/or Seplat may transfer the rights and obligations arising from the Services Agreement. In addition and if necessary, the Company is entitled to sbcontract certain services sbject to the Company (i) notifying Seplat of this decision in writing and (ii) remaining primarily responsible to Seplat for the performance of services End of the agreement The Services Agreement will end on of the following dates, whichever is soonest: the expiry of the Joint Operating Agreement; fi ve years from the signing of the agreement, with the parties being able to decide by mtal agreement whether to renew or renegotiate the agreement; the date on which the Company ceases to be a shareholder of Seplat; and the nilateral termination of the Services Agreement by the Company, sbject to 30 days advance notice Shareholder loan On 25 Jne 2010, the Company granted a shareholder loan to Seplat of $153 million (the shareholder loan ), representing 45% of the acqisition cost of OMLs 4, 38 and 41, corresponding to the Company s 45% eqity interest in Seplat. Following the fi rst repayment of approximately $31 million at the end of March 2011 and a second repayment of $75 million in September 2011, the remaining balance repayable by Seplat nder the shareholder loan was approximately $48 million. The shareholder loan was terminated when the initial pblic offering of Seplat was made on 14 April 2014 and has been repaid Independent first demand garantee On 1 April 2014, Saint-Abin E&P (Qébec) Inc., a wholly owned sbsidiary of Saint-Abin Energie, entered into a partnership with the government of Qebec (throgh its entity Ressorces Qébec) and Canadian partners Pétrolia and Corridor Resorces to carry ot an oil exploration programme on Qebec s Anticosti Island, for which the exploration permit is held by a joint ventre known as Hydrocarbres Anticosti. Under a garantee agreement signed the same day, Saint-Abin Energie, as the fi rst garantor, has garanteed that its Saint-Abin E&P (Qébec) sbsidiary will meet its obligations and that it will pay all amonts owing by the sbsidiary in respect of the Anticosti project, p to a maximm of fi fty million eros ( 50,000,000). As the second garantor, Marel & Prom is jointly responsible with the fi rst garantor, Saint-Abin Energie, for meeting its obligations as referred to above and for the payment of amonts owing, p to a maximm of fi fty million eros ( 50,000,000). Insofar as the Company holds two-thirds of the capital of Saint- Abin Energie and Marel & Prom holds one-third of the capital, it has emerged that these two companies mst provide fi nancial backing to garantee the commitments of Saint-Abin Energie to the extent of their respective interests in its share capital; this is why the Company, nder the terms of the fi rst demand garantee, has garanteed to pay Marel & Prom two-thirds of any amonts that it mst settle nder the garantee agreement, p to a maximm of 33,333, (eqating to two-thirds of the maximm of 50,000,000). At its meeting of 23 April 2014, MPI s Board of Directors athorised the provision and signatre of this fi rst demand garantee by the Company, which was signed on 28 April 2014 to the benefi t of Etablissements Marel & Prom. The garantee was approved by the General Shareholders Meeting of 19 Jne 2014 (Resoltion For). 100 ANNUAL REPORT 2014

103 Information abot the Company and its capital 5 LARGE CONTRACTS 5.4 LARGE CONTRACTS Seplat shareholders agreement The Company s relations with its Partners within Seplat are governed by a shareholders agreement nder English law signed on 22 December 2009 (the Agreement ), the main stiplations of which are smmarised in the paragraphs below. Following the sccessfl listing of Seplat s shares in London (LSE) and Lagos (NSE) on 14 April 2014, the parties terminated this agreement. The Agreement was initially signed by Marel & Prom. The Company then became a party to the Agreement on 3 Jne 2010 nder the terms of a deed of adherence. Marel & Prom fi nally ceased to be a party to the Agreement on 26 September 2011 nder the terms of an amendment agreement, with the rights and obligations of Marel & Prom nder the terms of the Agreement having been transferred to the Company as a reslt of this agreement and on the date thereof Services Agreement (a) General presentation On 2 November 2011, Marel & Prom and the Company signed a services agreement prsant to which Marel & Prom agrees to provide the Company and Seplat with a certain nmber of administrative and operational services, in particlar those services described below, for a period of p to 12 months from the Listing date (15 December 2011). This Services Agreement has since been renewed, inclding at the end of 2014 for a frther 12-month period expiring on 15 December 2015, and may be renewed nder the same terms prior to the schedled expiry date. (b) (i) Services provided Services provided by Marel & Prom to the Company Under the terms of the services agreement, Marel & Prom agrees to provide the Company with services (the Services ) in order to allow the Company to operate independently. The Services mainly cover: the management of fi nancial and tax services; assistance in applying for reglatory permits; the Company s administration, corporate policy and organisation; the management of intellectal and indstrial property rights; the spply of moveable and real estate assets; the implementation of major operating agreements; the establishment of intra-grop agreements; and the management of administrative, legal and social fnctions. (ii) Services provided by Marel & Prom to Seplat for and on behalf of the Company Marel & Prom has agreed to provide Seplat, for and on behalf of the Company, with all of the services stiplated in the Services Agreement (i.e. consltancy, technical services and additional services), as described in Section of this Annal Report. (iii) Additional services Frthermore, additional services (the Additional Services ) may be reqested from Marel & Prom by the Company on its own accont or on behalf of Seplat. The price conditions and terms nder which the Additional Services will be rendered mst be sbject to an agreement between Marel & Prom and the Company. (iv) Compensation Each service rendered will be invoiced by Marel & Prom to the Company at cost price pls a margin of 6%. In fi scal year 2014, the amont of the services invoiced by Marel & Prom to the Company nder the Services Agreement totalled 0.4 million exclsive of tax. (v) Term of the agreement The Services Agreement was signed for a term of 12 months and entered into effect on the Listing date, i.e. 15 December Under the Agreement, it was renewed by the Company on 5 November 2012 for a 12-month period beginning on 15 December 2012, and then again on 5 November 2013 for a frther 12-month period with effect from 15 December The Services Agreement may be terminated at any time by the Company sbject to 30 days advance notice. ANNUAL REPORT

104 5 Information abot the Company and its capital LARGE CONTRACTS Other agreements Partnership agreement with Marel & Prom athorised by the Company s Board of Directors on 26 April 2013 (see Section 5.5 of this Annal Report). 102 ANNUAL REPORT 2014

105 Information abot the Company and its capital 5 SPECIAL STATUTORY AUDITORS REPORT ON REGULATED AGREEMENTS AND COMMITMENTS 5.5 SPECIAL STATUTORY AUDITORS REPORT ON REGULATED AGREEMENTS AND COMMITMENTS MPI General Shareholders Meeting to approve the financial statements for the year ended 31 December 2014 To the Shareholders, In or capacity as stattory aditors of yor company, we hereby present or report on reglated agreements and commitments. It is or dty is to commnicate to yo, on the basis of the information provided to s, the main characteristics and terms of the agreements and commitments abot which we have been informed or that have come to or attention dring or work, withot being reqired to offer an opinion on their seflness or their legitimacy or to identify any other agreements or commitments. It is yor responsibility, in accordance with Article R of the French Commercial Code, to assess the benefi ts of entering into these agreements and commitments when they are sbmitted for yor approval. Frthermore, it is or task, where applicable, to commnicate to yo information of the type referred to in Article R of the French Commercial Code relating to the exection, dring the previos fi nancial year, of any agreements and commitments already approved by the General Shareholders Meeting. We have performed the procedres that we considered necessary to comply with professional gidance issed by the Compagnie nationale des commissaires ax comptes (the national aditing association) in respect of this task. Or work involved verifying the consistency of the information given to s with the core docments from which it was derived. Agreements and commitments sbmitted for the approval of the General Shareholders Meeting We inform yo that we have not been advised of any agreement or commitment athorised dring the past year to be sbmitted for approval by the General Shareholders Meeting prsant to the provisions of Article L of the French Commercial Code. Agreements and commitments already approved by the General Shareholders Meeting Agreements and commitments approved in previos years Prsant to Article R of the French Commercial Code, we have been informed that the following agreements and commitments, already approved by the General Shareholders Meeting in previos years, have been exected dring the past fi nancial year. Persons concerned Messrs. Jean-François Hénin, Xavier Blandin, Alexandre Vilgrain, Emmanel Marion de Glatigny and Ms. Nathalie Delapalme, directors of both yor Company and of Établissements Marel & Prom. a) Natre and prpose At the General Shareholders Meeting of 28 Jne 2011 and becase of the plans to fl oat yor company on the stock market, yo athorised the signatre of a transitional services agreement (the Transitional Services Agreement ) between yor company and Établissements Marel & Prom. The prpose of this agreement is to secre for yor company the material and technical resorces necessary (i) for its day-today operations, particlarly with regard to administration and acconting, and (ii) to provide Seplat with the services reqired nder the technical services agreement entered into with this company on 31 Jly ANNUAL REPORT

106 5 Information abot the Company and its capital SPECIAL STATUTORY AUDITORS REPORT ON REGULATED AGREEMENTS AND COMMITMENTS Terms and conditions Under the terms of this agreement signed on 2 November 2011, Établissements Marel & Prom provides yor company with services enabling it to provide for its day-to-day administrative and acconts management and to honor its commitments with regard to Seplat. This agreement entered into effect on 15 December 2011 for a period of twelve months, renewable. The most recent renewal extends the contract for a period of one year ntil 15 December An amont of 367,214 exclding taxes was paid by yor company dring the fi nancial year 2014 in respect of this agreement. b) Natre and prpose On 31 Jly 2010, Établissements Marel & Prom and Seplat entered into a technical services agreement, governed by English law, nder the terms of which Établissements Marel & Prom ndertook to provide services enabling Seplat to flfi l its obligations as operator nder the Joint Operating Agreement relating to operation of the OML 4.38 and 41 permits. At the General Shareholders Meeting of 28 Jne 2011, yo athorised the signatre of a draft amendment (a Deed of Novation), nder the terms of which yor company wold replace Établissements Marel & Prom in the technical services agreement signed on 31 Jly 2010, if the plans to distribte yor company s shares became a reality. The senior management sbseqently amended the draft on two points: (i) the new draft is no longer in the form of a Deed of Novation bt of a normal amendment to the original agreement, in order to avoid the formal constraints associated with the signatre of a deed nder English law, and (ii) the agreement will come into effect on the date when yor company s shares are admitted for trading on the NYSE Eronext reglated market in Paris (instead of the signatre date stated in the previos version of the draft). Terms and conditions By virte of the amendment signed on 26 September 2011, yor company replaced Établissements Marel & Prom as Seplat s contractor nder the terms of the services agreement, with effect from the date when yor company s shares were listed for trading on the NYSE Eronext reglated market in Paris, namely 15 December The amont invoiced by yor company to Seplat for the fi nancial year 2014 was 6,000 exclsive of tax. c) Natre and prpose On 26 April 2013, yor Board of Directors athorised the establishment of a partnership with Établissements Marel & Prom and approved its giding principles. Under the terms of this partnership, ftre development projects relating to oil exploration and prodction will be carried ot jointly by these two companies (except in the two companies respective historical regions of operation). Terms and conditions Yor company holds two-thirds of the share capital of Saint Abin Energie and Etablissements Marel & Prom holds one-third. In addition, a shareholders agreement was signed on 10 September Development projects led by Saint Abin Energy are fnded by yor company and Etablissements Marel & Prom pro rata to their shareholding. On 31 December 2014, yor company s crrent accont with Saint Abin Energie amonted to 44,395,562 (inclding interest). 104 ANNUAL REPORT 2014

107 Information abot the Company and its capital 5 SPECIAL STATUTORY AUDITORS REPORT ON REGULATED AGREEMENTS AND COMMITMENTS Agreements and commitments approved dring the past financial year We were also informed, dring the past fi nancial year, of the implementation of the following agreement, which had already been approved by the General Shareholders Meeting of 19 Jne 2014, based on a special stattory aditors report dated 28 May Persons concerned Messrs. Jean-François Hénin, Xavier Blandin, Alexandre Vilgrain, Emmanel Marion de Glatigny and Ms. Nathalie Delapalme, directors of both yor company and Établissements Marel & Prom. Natre and prpose On 23 April 2014, yor Board of Directors athorised the signatre of a fi rst demand garantee agreement in favor of Établissements Marel & Prom as part of the project concerning implementation of an oil exploration programme on Anticosti Island in Qebec. Terms and conditions Saint-Abin Energie (one-third owned by Établissements Marel & Prom and two-thirds by yor company) garanteed, as primary garantor, the obligations of its wholly owned sbsidiary, Saint-Abin Energie Exploration Prodction Inc., and the payment of 50,000,000 to establish a partnership with the government of Qebec. Under the terms of this garantee, Établissements Marel & Prom is jointly responsible with Saint-Abin Energie for honoring the obligations and for paying the amonts de, p to a maximm of 50,000,000. Since yor company holds two-thirds of the capital of Saint-Abin Energie and Établissements Marel & Prom holds the other one-third of the capital, it appears that these two companies mst provide fi nancial backing for the garantee of Saint-Abin Energie s commitments in proportion to their interests in its share capital. This is why it has been decided, nder the terms of a fi rst demand garantee, that yor company shold garantee to pay Établissements Marel & Prom two-thirds of all amonts that it is reqired to pay nder the garantee agreement, p to a maximm of 33,333, (representing two-thirds of the maximm limit of 50,000,000). The garantee agreement between yor company and Établissements Marel & Prom was signed on 28 April INTERNATIONAL AUDIT COMPANY Paris, 27 April 2015 The Stattory Aditors Daniel DE BEAUREPAIRE François CARREGA ANNUAL REPORT

108 5 Information abot the Company and its capital 106 ANNUAL REPORT 2014

109 Financial statements CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER I Statement of fi nancial position 109 Assets 109 Liabilities 109 Changes in shareholders eqity 110 II Consolidated comprehensive income statement 111 Net income for the period 111 Comprehensive income for the period 111 III Cash Flow Statement COMPANY INCOME IN THE LAST FIVE FISCAL YEARS 136 Notes to the consolidated fi nancial statements 113 Stattory aditors report on the consolidated fi nancial statements for the year ended 31 December ANNUAL REPORT

110 6 Financial statements CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 Contents I Statement of financial position 109 II Consolidated comprehensive income statement 111 III Cash Flow Statement 112 NOTE 1 General information 113 NOTE 2 Acconting methods 115 NOTE 3 Changes in the composition of the MPI Grop 118 NOTE 4 N on-crrent fi nancial assets 119 NOTE 5 Eqity associates 119 NOTE 6 Fair vale 124 NOTE 7 Cash and cash eqivalents 125 NOTE 8 Shareholders eqity 126 NOTE 9 Trade payables, tax de other creditors and other fi nancial liabilities 127 NOTE 10 Operating income 127 NOTE 11 Financial income 128 NOTE 12 Earnings per share 128 NOTE 13 Related parties 129 NOTE 14 Off-balance-sheet commitments 130 NOTE 15 Operating segments 130 NOTE 16 Risks 130 NOTE 17 Post-balance-sheet events 132 NOTE 18 Adit fees ANNUAL REPORT 2014

111 Financial statements 6 CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 I Statement of financial position Assets In thosands of eros Note 31/12/ /12/2013 Non-crrent fi nancial assets 4 36,850 38,160 Eqity associates 5 270, ,244 Non-crrent assets 307, ,404 Trade receivables and related acconts Other crrent fi nancial assets 6 5,645 34,937 Other crrent assets Cash and cash eqivalents 7 251, ,805 Crrent assets 257, ,029 TOTAL ASSETS 565, ,433 Liabilities In thosands of eros Note 31/12/ /12/2013 Share capital 11,534 11,534 Additional paid-in capital 226, ,900 Consolidated reserves 272,929 36,114 Treasry shares (10,627) (9,883) Net income, Grop share 49, ,360 Eqity, Grop share 550, ,025 Total shareholders eqity 8 550, ,025 Non-crrent provisions Non-crrent liabilities Other crrent borrowings and fi nancial debt 0 70 Trade payables and related acconts ,204 Income tax payable 9 11, Other creditors and miscellaneos liabilities 9 2,886 4,444 Crrent liabilities 14,903 7,379 TOTAL LIABILITIES 565, ,433 ANNUAL REPORT

112 6 Financial statements CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 Changes in shareholders eqity In thosands of eros Capital Treasry shares Premims Other reserves Exchange gains (losses) Net income Eqity, Grop for the year share Total shareholders eqity 1 Janary ,534 (6,442) 226,900 19,392 (5,994) 50, , ,216 Net income 196, , ,360 Other comprehensive income (19,803) (19,803) (19,803) Total comprehensive income (19,803) 196, , ,557 Appropriation of income Dividends 41, (50,824) (8,949) (8,949) Increase/decrease in capital Changes in treasry shares (3,441) 639 (2,802) (2,802) Total transactions with shareholders (3,441) 42, (50,824) (11,748) (11,748) 31 DECEMBER ,534 (9,883) 226,900 61,668 (25,556) 196, , ,025 Net income 49,638 49,638 49,638 Other comprehensive income 65,565 65,565 65,565 Total comprehensive income 65,565 49, , ,203 Appropriation of income Dividends 169,659 (196,360) (26,701) (26,701) Increase/decrease in capital Bons shares Changes in treasry shares (744) 1, Total transactions with shareholders (744) 171,251 (196,360) (25,853) (25,853) 31 DECEMBER ,534 (10,628) 226, ,919 40,009 49, , , ANNUAL REPORT 2014

113 Financial statements 6 CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 II Consolidated comprehensive income statement Net income for the period In thosands of eros Note 31/12/ /12/2013* Sales 2 42 Other income 1, 973 1, 488 Prchases and change in inventories 0 (2) Other prchases and operating expenses (2,324) (1,037) Taxes & dties (275) (248) Personnel expenses (2,767) (1,845) Provisions and impairment of crrent assets (68) - Gain (loss) on asset disposals 0 30,878 Other expenses (322) (294) OPERATING INCOME 10 (3,781) 28,982 Other fi nancial income and expenses 1,148 3,955 FINANCIAL INCOME 11 1,148 3,955 Income before tax (2,633) 32,937 Income taxes 9 (12,136) (1,707) NET INCOME FROM CONSOLIDATED COMPANIES (14,769) 31,230 Net income from eqity associates 5 35, ,131 Effect of diltion 1 29,387 0 CONSOLIDATED NET INCOME 49, ,360 Net income, Grop share 49, ,360 Earnings per share 12 Basic Dilted * Inclding the reclassifi cation of personnel expenses re-invoiced to eqity associates. Comprehensive income for the period In thosands of eros 31/12/ /12/2013 Net income for the period 49, ,360 Other comprehensive income Exchange gains (losses) 65,565 (19,803) TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 115, ,557 Grop share 115, ,557 Non-controlling interests 0 0 ANNUAL REPORT

114 6 Financial statements CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 III Cash Flow Statement In thosands of eros Note 31/12/ /12/2013 Consolidated income before tax 61, ,067 Net increase (reversals) of amortisation, depreciation and provisions Other calclated income and expenses (29,065) 892 Gains (losses) on asset disposals 0 (38,031) Share of net income from eqity associates 5 (35,020) (165,131) Cash flow before taxes (2,244) (4,172) Payment of tax de (2,693) 1,398 Change in working capital reqirements for operations (5,841) 1,958 Cstomers (129) 404 Sppliers (1,433) 1,500 Other (4,279) 54 NET CASH FLOW FROM OPERATING ACTIVITIES (10,778) (816) Disbrsements for acqisitions of fi nancial assets (nconsolidated secrities) 0 (3,012) Disbrsements for sales of fi nancial assets (nconsolidated secrities) 0 110,684 Impact of changes in consolidation 0 (24) Dividends received (eqity associates, non-consolidated secrities) 9,066 0 Other cash fl ows from investing activities 23,953 34,676 NET CASH FLOW FROM INVESTING ACTIVITIES 33, ,324 Amonts received from shareholders for capital increases 0 3 Dividends paid (26,701) (8,949) Financing fl ows 0 0 Treasry share acqisitions 547 (3,863) NET CASH FLOW FROM FINANCING ACTIVITIES (26,154) (12,809) Impact of exchange rate fl ctations 29,478 (9,301) CHANGE IN NET CASH 25, ,398 Cash at start of period 225, ,334 NET CASH AND CASH EQUIVALENTS AT PERIOD END 7 251, , ANNUAL REPORT 2014

115 Financial statements 6 CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 Notes to the consolidated financial statements NOTE 1 General information The MPI Grop operates throgh (i) its eqity interests in Nigeria, mainly in Seplat Petrolem Development Company Plc ( Seplat ) and (ii) the projects it has ndertaken, primarily in Canada and Myanmar, in partnership with the Marel & Prom Grop throgh the joint investment company set p between the two grops: Saint-Abin Energie. 1.1 Listing of Seplat shares in London and Lagos Seplat Petrolem, in which MPI had held a 30.1% interest, commenced trading on the London Stock Exchange (LSE) and the Nigerian Stock Exchange (NSE) on 14 April A total of million Seplat shares, representing 27.70% of the Company s capital (post-transaction) were admitted to trading at an IPO price of 210 pence per share (NGN 576 per share on the NSE). The IPO generated net proceeds of $497 million, giving the Company the resorces to fi nance new acqisitions of oil assets in the Niger Delta. Since MPI did not participate in this transaction, its stake in Seplat was redced from 30.1% to 21.76% and generated, given the terms of the IPO, a diltion gain of 29.4 million, which can be analysed as follows: EFFECT OF DILUTION In thosands of shares Before listing Shares created After listing Diltion Total Seplat shares 400, , ,320 - Inclding s hares held by MPI 120, ,400 - MPI ownership 30.10% % 8.34% DILUTION GAIN Data in millions of dollars Net Seplat position on the listing date 815 Share of the net position sold (8.34%) 68 Net income from isse 498 Inclding MPI s share (21.76%) 108 Diltion profi t (in millions of dollars) 40 Diltion profit (in million) 29 Following its IPO, Seplat paid off the $48 million balance on the shareholder loan it received from MPI. Seplat s listing led the fonding shareholders MPI, Shebah Petrolem and Platform Petrolem to terminate the shareholders agreement that had bond them since December 2009, and nder which MPI had had a right of veto on all major decisions concerning the Company. MPI holds a 21.76% interest in Seplat, which garantees it a seat on the Company s Board of Directors. MPI contines to actively participate in decisions made by the sbsidiary, over which it exercises signifi cant infl ence. These changes have no effect on the consolidation of Seplat, which contines to be treated as an eqity associate. ANNUAL REPORT

116 6 Financial statements CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER Deterioration of the economic environment The economic context was marked by a sharp decline in the price of Brent over the 4th qarter of Brent fell from $92 in September 2014 to $58 at the end of December Over the fll year, the decline in the price of the barrel remained contained. It was 9%, as the average price of Brent dropped from $108 in 2013 to $98 in The drop in barrel price had an nfavorable impact on Seplat s 2014 sales, its income which remained positive at $252 million and its market price. On the basis of a share price of 144 pence at closing, Seplat s market capitalisation at closing was $1.242 billion, which corresponds for MPI to a market vale of $222.6 million, compared with an eqity method vale of million. Based on this fact, and in accordance with IAS 36, MPI condcted an impairment test which revealed that the Company s vale in se, calclated on the basis of its cash projections, remains signifi cantly greater than its carrying vale, and that it was not necessary to recognise this asset as impaired. 1.3 Strategic partnership signed on Anticosti Island in Qebec On 1 April 2014, Saint-Abin Energie (2/3 MPI) signed an agreement relating to the creation of a joint ventre, in partnership with Ressorces Qébec, Pétrolia and Corridor Resorces. The joint ventre, established in Qebec as a limited partnership, will condct exploration work on non-conventional objectives on Anticosti Island. An initial srvey phase, inclding the drilling of stratigraphic wells and three horizontal fracking wells for a total amont of $55 million at 100% is in progress. For stratigraphic wells were completed over 2014, which showed the presence of gas in the Mascaty formation. Depending on the reslts obtained, this initial exploration programme may be completed by a confi rmation phase. Under this agreement, the parties committed to maximm fi nancing of the work (for all phases) which amonts to $43.3 million for Saint-Abin Energie, given its interest percentage in the entity. The fi nancial commitment for MPI is $28.9 million. The eqity interests in the joint ventre are as follows: Ressorces Qébec 35%; Pétrolia 21.7%; Corridor Resorces 21.7%; Saint-Abin Energie 21.7%. In addition, Hydrocarbres Anticosti, co-held by Saint-Abin Energie, Corridor Resorces and Pétrolia with 21.7% each, and 35% by Ressorces Qébec, signed a strategic partnership on 23 October 2014 with the Qebec company Gaz Métro in order to develop the associated natral gas coming from Anticosti Island. 1.4 Contined tests on the Sawn Lake project in Canada At Sawn Lake in Alberta, the pilot test of the steam assisted gravity drainage (SAGD) process, condcted on two wells in order to evalate the technical and commercial feasibility of bitmen prodction throgh steam injection, contines. Prodction began in September 2014 and will contine ntil the smmer of 2015 in order to collect the data necessary to assess the potential of the fi eld. This investment is carried by MP West Canada corporation, a wholly owned sbsidiary of Saint-Abin Energie. 114 ANNUAL REPORT 2014

117 Financial statements 6 CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTE 2 Acconting methods The consolidated fi nancial statements are prepared on a historical cost basis, except for certain categories of assets and liabilities, in accordance with IFRS. Prsant to Eropean Reglation 1606/2002 of 19 Jly 2002 on international standards, the MPI Grop s consolidated fi nancial statements for the year ended 31 December 2014 have been prepared in accordance with IAS/IFRS international acconting standards applicable as at 31 December 2014, as approved by the Eropean Union and available at: http//ec.eropa.e/ internal market/acconting/ias fr.htm#adopted-commission. International acconting standards inclde IFRS (International Financial Reporting Standards), IAS (International Acconting Standards) and their interpretations (Standing Interpretations Committee and International Financial Reporting Interpretations Committee). New legislation or amendments adopted by the Eropean Union and mandatory from 1 Janary 2014 have been taken into accont. IFRS 10 Consolidated Financial Statement, IFRS 11 Joint Arrangements, IFRS 12 Disclosre of Interests in Other Entities, IAS 27R Separate Financial Statements, IAS 28R Investments in Associates and Joint Ventres and their sbseqent amendments. Amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities. Amendments to IAS 36 Disclosres to be provided on the Recoverable Vale of Non-Financial Assets. Amendments to IAS 39 Novation of Derivatives and Contination of Hedge Acconting. These new standards had no material impact on the consolidated fi nancial statements at 31 December The entry into force of IFRS 10, 11 and 12 did not reslt in any particlar changes in the Grop s acconting methods insofar as entities sbject to joint control (Seplat and Saint-Abin Energie and its sbsidiaries Marel & Prom East Asia, Saint-Abin Energie Qébec Inc., MP Energy West Canada Corp., MP Qébec and MP West Canada) were already consolidated by the eqity method. The company Saint-Abin Exploration and Prodction Qébec Inc., established in 2014 and wholly owned by Saint- Abin Energie, is also consolidated by the eqity method. The Grop has chosen not to apply the standards and interpretations which were not mandatory on 1 Janary 2014, sch as IFRIC 21 Levies (applicable to fi scal years beginning on or after 17 Jne 2014 endorsed on 13 Jne 2014). IFRS standards have been applied by the Grop consistently for all of the periods presented. The preparation of consolidated fi nancial statements nder IFRS reqires the Grop to make acconting choices, prodce a nmber of estimates and se certain assmptions that affect the reported amonts of assets and liabilities, the notes on the possible assets and liabilities at the closing date, and the income and expenses dring the period. Changes in facts and circmstances may lead the Grop to review sch estimates. The reslts obtained may signifi cantly differ from sch estimates when different circmstances or assmptions are applied. In addition, when a specifi c transaction is not treated by any standard or interpretation, the Grop s Management ses its own discretion to defi ne and apply the acconting methods that will provide relevant and reliable information. The fi nancial statements provide a faithfl representation of the Grop s fi nancial position, performance and cash fl ows. They refl ect the sbstance of transactions, are conservatively prepared, and are complete in all material respects. ANNUAL REPORT

118 6 Financial statements CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 Management estimates sed in preparing fi nancial statements relate primarily to: impairment tests on joint arrangements and associates; recognition of oil carry transactions. 2.1 Consolidation methods The acconting rles and methods described below concern both the acconts of the Company (the holding company) and those of the joint ventres and associates, restated in accordance with the standards of the MPI Grop for the prposes of consolidation. Interests in partnerships are consolidated sing the eqity method. Applying the eqity consolidation method means that the Company s share of Seplat s eqity and net income is recorded nder Eqity associates in the Statement of fi nancial position and that the Company s share of net income for the period is recorded in the comprehensive income statement on a separate line. The Company s receivables from and payables to the partnership are not eliminated. The net income arising from transactions between the two companies is recognised in the MPI Grop s fi nancial statements only in proportion to the partners interests. 2.2 Bsiness combinations and goodwill Bsiness combinations are recognised in accordance with IFRS 3R nder the acqisition method. Ths, when control of a company is acqired, the assets, liabilities and contingent liabilities of the acqired company are assessed at their fair vale in accordance with IFRS gidelines. If the cost of an acqisition is lower than the fair vale of the net assets of the sbsidiary acqired, the identifi cation and valation of the identifi able assets and liabilities are frther analysed. Any residal negative goodwill mst be posted directly to net operating income. The analysis of goodwill mst be fi nalised within a period of one year from the date of acqisition. Sch goodwill is not amortised, bt rather sbjected to systematic impairment tests at every balance sheet date, and any losses in vale ascertained on goodwill are irreversible. When events indicate a risk of impairment of eqity associates, and in any case at least once a year, these are sbject to a detailed analysis in order to determine whether their net carrying vale is lower than their recoverable amont, with the latter defi ned as the higher of fair vale (less costs to sell) or vale in se. Vale in se is determined by disconting ftre cash fl ows expected to arise from the se of the asset and its disposal. Assets are groped into cash-generating nits (CGUs) to determine their recoverable amont. A CGU is a homogeneos set of assets whose ongoing tilisation generates cash infl ows that are largely independent of the cash infl ows from other grops of assets. Cash fl ows are determined in keeping with the reserves identifi ed, the related prodction profi le and the disconted sale prices after taking into accont the applicable tax. The discont rate sed takes into accont the risk associated with the activity and its geographical location. If the recoverable amont is lower than the net carrying vale, impairment is recognised for the difference between these two amonts. This impairment may be reversed depending on the net carrying vale that the asset wold have had on the same date, had it not been impaired. Impairment losses recorded on goodwill are irreversible. 2.3 Non-crrent financial assets Financial loans and receivables are initially recognised at fair vale and are posted on the balance sheet at their amortised cost. They are sbject to impairment if there is an objective indicator of impairment. This impairment, carried throgh net income, may later be reversed nder income if the conditions that led to sch impairment cease to exist. 2.4 Trade receivables Trade receivables are initially recognised at their fair vale. At year-end, they are impaired if there is a proven risk of nonrecoverability. 2.5 Foreign crrency transactions Expenses and income in foreign crrency are posted at their eqivalent vale in the operating crrency for the entity concerned at the transaction date. Debts, external fi nancing, receivables and liqid assets in foreign crrency appear on the balance sheet at their eqivalent in the operating crrency for the entity concerned at the closing price. Differences reslting from conversion into foreign crrency at this rate are posted to the income statement as other fi nancial income or other fi nancial expenses. 2.6 Crrency conversion of the annal financial statements of foreign sbsidiaries The fi nancial statements of foreign sbsidiaries whose operating crrency is not the ero are converted into eros sing the closing price method. Assets and liabilities, inclding goodwill on foreign sbsidiaries, are converted at the exchange rate in effect on the reporting date. Income and expenses are converted at the average rate for the period. 116 ANNUAL REPORT 2014

119 Financial statements 6 CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 The consolidating company s share of exchange gains/losses recorded both on the initial balance sheet and the income statement are posted to eqity nder exchange gains/losses. 2.7 Cash and cash eqivalents Cash eqivalents correspond to short-term investments of srpls cash. 2.8 Fair vale IFRS 7 Financial Instrments: Disclosres, as amended in 2009, establishes a three-level hierarchy for measring fair vale: level 1: the qoted prices for identical assets and liabilities (to those being measred), available on the valation date in an active market to which the entity has access; level 2: inpts are observable data, bt do not correspond to the prices qoted for identical assets or liabilities; and level 3: inpts not based on observable data (for example, the data reslting from extrapolations). This level applies when no market or observable data exists and the Company is reqired to make its own assmptions when estimating the data that other market operators wold have sed to measre the fair vale of the asset. All fair vale assessments are disclosed, according to their level, in Note 7 to the consolidated fi nancial statements. For the prposes of presentation in accordance with IFRS 7: the fair vale of loans and receivables is determined by disconting expected cash fl ows at the market rate in force at the reporting date; for receivables with a term of less than six months, the balance sheet vale represents a reliable approximation of their fair vale; and the fair vale of fi nancial liabilities is determined by disconting ftre cash fl ows at the market rate in force on the reporting date, for a debt with the same residal matrity. For trade payables, the balance sheet vale is a reliable approximation of their fair vale. 2.9 Treasry shares Treasry shares are recognised as a redction of shareholders eqity on the basis of their acqisition cost Provisions for risks and contingencies In accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets, provisions are recognised when the MPI Grop has an obligation at year-end to a third party deriving from a past event, the settlement of which shold reslt in an otfl ow of resorces constitting economic benefi ts. Provisions are adjsted when the effect of the adjstment is signifi cant. The effect of the accretion is posted nder Other fi nancial expenses Income taxes The tax expense presented on the income statement incldes the crrent tax expense (or income) and the deferred tax expense (or income). Deferred taxes are recorded based on temporary differences between the book vales of assets and liabilities and their tax bases. Deferred taxes are not pdated. Deferred tax assets and liabilities are measred based on the tax rates approved on the reporting date. Deferred tax assets, reslting primarily from tax loss carried forward or deferred amortisation and depreciation, are not taken into accont nless their recovery is likely. To ascertain the Grop s ability to recover these assets, the following elements in particlar have been taken into accont: the existence of sffi cient temporary differences taxable by the same tax athority for the same taxable entity, which will create taxable amonts on which nsed tax losses and tax credits may be charged before they expire; and forecasts of ftre taxable net income allowing prior tax losses to be offset Earnings per share Two earnings per share are reported: basic EPS and dilted EPS. The nmber of shares sed to calclate dilted earnings per share takes into accont the conversion into shares of instrments providing deferred access to the capital and having a diltive effect. Dilted earnings per share are calclated based on net income, MPI Grop share, adjsted by the fi nancial cost, net of taxes, of diltive instrments providing deferred access to the capital. Treasry shares are not taken into accont in the calclation. ANNUAL REPORT

120 6 Financial statements CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTE 3 Changes in the composition of the MPI Grop Company Registered office Type Consolidation method* % control 31/12/ /12/2013 MPI Paris FC Consolidating company Oil and gas activities Seplat Petrolem Development Company Plc Lagos, Nigeria Associate EM 21.76% 30.10% Marel & Prom East Asia SAS Paris, France Joint ventre EM 66.67% 66.67% Cardinal Ltd Lagos, Nigeria Associate EM 40.00% 40.00% Marel & Prom Iraq SAS Paris, France Joint ventre EM 16.67% 16.67% Saint-Abin Energie Qébec Inc. Montreal, Canada Joint ventre EM 66.67% 66.67% MP Energy West Canada Corp. Calgary, Canada Joint ventre EM 66.67% 66.67% MP Qébec SAS Paris, France Joint ventre EM 66.67% 66.67% MP West Canada SAS Paris, France Joint ventre EM 66.67% 66.67% Saint-Abin E&P (Qébec) Inc. Montreal, Canada Joint ventre EM 66.67% - Saint-Abin Energie SAS Paris, France Joint ventre EM 66.67% 66.67% Other activities MPNATI SA * FC: Fll consolidation. EM: Eqity method consolidation. Geneva, Switzerland FC % % The changes in consolidation mainly involve the redction in the share of ownership in Seplat after Seplat s IPO (see Note 1 General Information ). In addition, Saint-Abin E&P Qébec Inc. was created to carry the Grop s interest in the Anticosti project. 118 ANNUAL REPORT 2014

121 Financial statements 6 CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTE 4 Non- crrent financial assets Financial assets at 31 December 2014, amonting to 34.4, primarily represent the advances made to Saint-Abin Energie to fi nance its investments in Myanmar and Canada. In thosands of eros Loans and receivables Total Vale at 01/01/ ,705 35,705 Transfers 2,455 2,455 Vale at 31/12/ ,160 38,160 Impairment (7,860) (7,860) Crrency gains (losses) 3,850 3,850 Transfers 2,700 2,700 VALUE AT 31/12/ ,850 36,850 Provisions are recognised for the advances made to Saint-Abin Energie and to its sbsidiaries in proportion to their net negative position. The amont allocated for this prpose over 2014 as contra entry to the consolidated net position amonted to ( 10.3 million). NOTE 5 Eqity associates At 31/12/2014 In thosands of eros Share of eqity Goodwill Balance sheet vale Share of net income in the fiscal year MP East Asia (4, 683) MP Energy West Canada Corp (26) Saint-Abin E&P (Qébec) Inc (394) Seplat 258, , , 115 Cardinal (2, 196) Saint-Abin Energie 12, , 236 (1, 405) MP West Canada (2, 304) Marel & Prom Iraq (86) TOTAL 270, , , 020 The net negative positions of eqity associates are recognised throgh provisions on the crrent acconts sed to fi nance projects (see Note 4). The data below is presented as reported in the fi nancial statements of joint ventres (100% and not as a percentage of ownership) after, if necessary, translation into eros, fair vale adjstments made on the acqisition date and restatement for consistency of acconting methods. ANNUAL REPORT

122 6 Financial statements CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 FINANCIAL INFORMATION ON THE MAIN JOINT VENTURES AND ASSOCIATES AS AT 31 DECEMBER 2014 Joint ventres and eqity associates In thosands of eros/before eliminations MP East Asia MP Energy West Canada Corp. Saint-Abin Exploration & Prodction Qébec Inc. Seplat Cardinal Location Myanmar Canada Qebec Nigeria Nigeria Activity Exploration Exploration Exploration Exploration/ Prodction Drilling Holding % 66.67% 66.67% 66.67% 21.76% 40.00% Intangible assets 34, 959 8, 996 4, , Property, plant and eqipment , , 806 Other non-crrent assets Total non-crrent assets 34, 959 8, 996 4, , , 485 Cash and cash eqivalents , 695 1, 936 Other crrent assets , , 087 Total crrent assets , 191, , 022 TOTAL ASSETS 35, 032 8, 996 5, 298 2, 034, , 508 Eqity, Grop share (4, 528) (27) (411) 258, 706 (56) Eqity, non-grop share (2, 264) (13) (206) 930, 201 (83) Non-crrent fi nancial liabilities 0 0 5, , , 180 Other non-crrent liabilities , 176 8, 787 Total non-crrent liabilities 0 0 5, , , 967 Crrent fi nancial liabilities , , 384 Other crrent liabilities 41, 824 9, , , 296 Total crrent liabilities 41, 824 9, , , 680 TOTAL LIABILITIES 35, 032 8, 996 5, 298 2, 034, , 508 Reconciliation with balance sheet vales Net assets (6, 792) (40) (617) 1, 188, 907 (139) Share held (4, 528) (27) (411) 258, 706 (56) Goodwill Adjstments 4, BALANCE SHEET VALUE , Sales , , 354 Crrent operating income (2, 742) 0 (854) 215, 453 2, 313 of which: Amortisation and depreciation 0 0 (2) (36, 618) 0 Financial income (4, 138) (39) (79) (28, 094) (7, 804) of which: Interest income , Interest expense (1, 046) (39) (80) (35, 660) (4, 261) Income tax (146) Net income from discontined activities NET INCOME FROM CONTINUING ACTIVITIES (7, 026) (39) (592) 187, 335 (5, 491) Other comprehensive income TOTAL COMPREHENSIVE INCOME (7, 026) (39) (592) 187, 335 (5, 491) 120 ANNUAL REPORT 2014

123 Financial statements 6 CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 FINANCIAL INFORMATION FOR OTHER JOINT VENTURES AND ASSOCIATES AT 31 DECEMBER 2014 In thosands of eros Saint-Abin Energie MP West Canada Marel & Prom Iraq Total non-crrent assets , Total crrent assets 85,774 8,962 0 TOTAL ASSETS 85,925 25, Eqity, Grop share 12,236 (2,484) (411) Eqity, non-grop share 6,271 (1,242) (822) Total non-crrent liabilities Total crrent liabilities 67,419 29,279 1,244 TOTAL LIABILITIES 85,925 25, Sales Financial income (583) (3,426) (137) NET INCOME FROM CONTINUING ACTIVITIES (2,107) (3,456) (258) Reconciliation with balance sheet vales Net eqity, Grop share 12,236 (2,484) (411) Goodwill adjstments 2, BALANCE SHEET VALUE 12, At 31/12/2013 In thosands of eros Share of eqity Goodwill Balance sheet vale Share of net income in the fiscal year Seplat 168, , ,651 Marel & Prom East Asia Cardinal 2, ,122 (3,819) Marel & Prom Iraq (325) 0 (325) (149) MP West Canada (180) (180) (204) Saint-Abin Energie SAS (564) 0 (564) (484) TOTAL 169, , ,131 ANNUAL REPORT

124 6 Financial statements CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 FINANCIAL INFORMATION FOR THE MAIN JOINT VENTURES AT 31 DECEMBER 2013 Joint ventres and eqity associates In thosands of eros/before eliminations MP East Asia Seplat Cardinal Location Myanmar Nigeria Nigeria Activity Exploration Exploration/ Prodction Drilling Holding % 66.67% 30.10% 40.00% Intangible assets 30,030 27, Property, plant and eqipment 0 503,529 48,353 Other non-crrent assets Total non-crrent assets 30, ,961 48,389 Cash and cash eqivalents ,878 2,259 Other crrent assets 0 328,868 35,660 Total crrent assets ,746 37,919 TOTAL ASSETS 30, ,707 86,308 Net eqity, Grop share ,034 2,122 Eqity, non-grop share ,219 3,183 Non-crrent fi nancial liabilities 0 87,630 51,965 Other non-crrent liabilities 0 16,983 4,872 Total non-crrent liabilities 0 104,612 56,838 Crrent fi nancial liabilities ,592 1,399 Other crrent liabilities 29, ,249 22,765 Total crrent liabilities 29, ,840 24,165 TOTAL LIABILITIES 30, ,707 86,308 Reconciliation with balance sheet vales Net assets ,254 5,306 Share held ,034 2,122 Adjstments 4,528 BALANCE SHEET VALUE 4, ,034 2,122 Sales 0 662,772 25,376 Crrent operating income (168) 354,025 5,998 of which: Amortisation and depreciation 0 (24,597) 0 Financial income 476 (15,923) (5,538) of which: Interest income Interest expense (438) (15,097) 0 Income tax (103) 69,833 0 Net income from discontined activities NET INCOME FROM CONTINUED ACTIVITIES , Other comprehensive income TOTAL COMPREHENSIVE INCOME , ANNUAL REPORT 2014

125 Financial statements 6 CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 FINANCIAL INFORMATION FOR OTHER JOINT VENTURES AND ASSOCIATES AT 31 DECEMBER 2013 Saint-Abin Energie MP West Canada Marel & Prom Iraq Total non-crrent assets , Total crrent assets 56, TOTAL ASSETS 57,102 25, Net eqity, Grop share (465) (180) (325) Eqity, non-grop share (233) (90) (650) Total non-crrent liabilities Total crrent liabilities 57,799 25,721 1,009 TOTAL LIABILITIES 57,102 25, Sales Financial income (304) NET INCOME FROM CONTINUED ACTIVITIES (726) (307) (448) Comments on the Seplat financial statements restated in accordance with the standards of the MPI Grop The fi nancial data presented in these notes incldes the restatements to bring Seplat s statements in line with the MPI acconting standards. These restatements have an impact of million on net income and million on Seplat s eqity pblished at 31 December They represent the recognition of an intangible asset allocated to hydrocarbon reserves at the time of the prchase of exploration and prodction licenses in Nigeria from Shell in This asset is depreciated to depletion at the prodction rate of the reserves. In 2014, Seplat generated income of million, down sharply from the previos year ( million), partially becase of the signifi cant drop in oil and gas prices in the forth qarter of The price of Brent fell from $92 in September 2014 to $58 at the end of December Despite the deterioration in market conditions, the vale in se of Seplat s non-crrent assets, calclated at $1,224 million by Seplat on the basis of a calclation of disconted ftre cash fl ows that Seplat is expected to generate, remains mch higher than the carrying vale of $862 million. To carry ot this test, the company sed a Brent price forward at $72 and discont rate of 12%. The eqity vale of Seplat in the acconts of MPI was million at the end of December 2014, an amont greater than its market vale of million on that date on the basis of a share price of 144 pence at closing. As a reslt, and prsant to IAS 36, MPI performed an impairment test which shows that the vale in se of the Company, calclated from its cash projections, remains signifi cantly greater than its carrying vale, and that there is no reason to recognise this asset as impaired. In 2014, Seplat paid MPI a dividend of $12 million throgh the appropriation of 2013 income. In addition, in November 2014 the Company decided to pay its shareholders an interim dividend of $0.06 per share. As a reslt, MPI recorded a dividend receivable of $7.2 million for fi scal 2014, which was received early in ANNUAL REPORT

126 6 Financial statements CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTE 6 Fair vale Financial assets and fair vale The varios categories of fi nancial assets at 31 December 2014 are presented in the tables below: 31/12/2014 In thosands of eros Loans and receivables Financial assets at fair vale throgh income Balance Sheet Total Fair vale Non -crrent fi nancial assets 36, ,850 36,850 Trade receivables and related acconts Other crrent fi nancial assets 5, ,645 5,645 Cash and cash eqivalents 251, , ,297 TOTAL BALANCE SHEET VALUE 294, , ,106 TOTAL FAIR VALUE 294, , ,106 31/12/2013 In thosands of eros Loans and receivables Financial assets at fair vale throgh income Balance Sheet Total Fair vale Non -crrent fi nancial assets 38, ,160 38,160 Trade receivables and related acconts Other crrent fi nancial assets 34, ,937 34,937 Cash and cash eqivalents 225, , ,805 TOTAL BALANCE SHEET VALUE 299, , ,076 TOTAL FAIR VALUE 299, , ,076 Other crrent fi nancial assets at 31 December 2014 correspond to dividends receivable voted by Seplat in respect of an interim dividend of $0.06 per share. At 31 December 2013, this item inclded the shareholder loan granted to Seplat, which was repaid following the latter s IPO. 124 ANNUAL REPORT 2014

127 Financial statements 6 CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 Financial liabilities (exclding derivatives) and fair vale The varios categories of fi nancial liabilities at 31 December 2014 are as follows: 31/12/2014 In thosands of eros Crrent Non-crrent Balance Sheet Total Fair vale Other borrowings and fi nancial debt Trade payables Other creditors and sndry fi nancial liabilities 2, ,886 2,886 TOTAL 3, ,820 3,820 31/12/2013 In thosands of eros Crrent Non-crrent Balance Sheet Total Fair vale Other borrowings and fi nancial debt Trade payables 2, ,205 2,205 Other creditors and sndry fi nancial liabilities 4, ,444 4,444 TOTAL 6, ,717 6,717 Assmptions made Financial assets totalling 294 million inclde 251 million in demand deposits and the remainder primarily refl ects 34.4 million in advances to Saint-Abin Energie. The prpose of these advances is to fi nance exploration programmes spread ot over several years, the sccess of which is neither certain no precisely defi ned over time and which, if a discovery is made, wold initiate a stdy and assessment phase in order to evalate the potential of the fi eld and to defi ned a normally mlti-year development plan. Given these factors, the carrying vale of these advances is the best estimate of their fair vale. Crrent fi nancial liabilities consist of trade payables and other creditors and sndry fi nancial liabilities de in less than one year and for which the carrying vale conseqently corresponds to a reasonable approximation of the fair vale. NOTE 7 Cash and cash eqivalents In thosands of eros 31/12/ /12/2013 Liqid assets, banks and savings banks 251, ,554 Short-term bank deposits 0 7,251 Total 251, ,805 Bank borrowings 0 70 NET CASH AND CASH EQUIVALENTS AT END OF PERIOD 251, ,735 At 31 December 2014, the Company held cash and cash eqivalents of million, an increase over the previos year as detailed in the cash fl ow statement. ANNUAL REPORT

128 6 Financial statements CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTE 8 Shareholders eqity The share capital remained nchanged in The share capital amonts to 11,534 thosand, representing 115,336,534 shares with a nominal vale of Share byback plan The Board of Directors is athorised to by back its own shares, sbject to a limit of 10% of the share capital, nder the following conditions: maximm prchase price per share of 10 and the maximm fnds that the Company may devote to this by-back plan of 120 million. The General Shareholders Meeting of 19 Jne 2014 cancelled and replaced the athorisation previosly given by the General Shareholders Meeting of 20 Jne 2013 with a new athorisation for the same prpose. This new athorisation is granted for a term of 18 months and allows the Board of Directors to prchase Company shares p to 10% of the share capital, nder the following conditions: maximm prchase price per share of 6 and maximm fnds that the Company may devote to this byback plan of 69,201,920. Under this byback plan, 48,246 shares were prchased in Over the same period, 3,143,997 shares were boght and 3,011,331 shares were sold nder the liqidity agreement. At 31 December 2014, the Company held 4,590,987 treasry shares (4% of share capital for a gross vale of 10,627.4 thosand at the end of 2014), inclding 740,672 shares nder the liqidity contract. Distribtion Under a resoltion of the Ordinary and Extraordinary General Shareholders Meeting of 19 Jne 2014, it was decided to distribte a dividend of 0.24 per share. Accordingly, in 2014 the Company paid ot a dividend totalling 26.7 million. Smmary of capital transactions At 31 December 2014, there were 115,336,534 Company shares and share capital amonted to 11,533, Nmber of shares Treasry shares AT 31/12/ ,336,534 3,568,332 Share capital transactions (increases and decreases) Prchases of treasry shares 841,743 AT 31/12/ ,336,534 4,410,075 Share capital transactions (increases and decreases) Prchases of treasry shares 180,912 AT 31/12/ ,336,534 4,590, ANNUAL REPORT 2014

129 Financial statements 6 CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTE 9 Trade payables, tax de other creditors and other financial liabilities 31/12/ /12/2013 In thosands of eros < 1 year > 1 year Total < 1 year > 1 year Total Sppliers , ,204 Sppliers Accred expenses , ,011 Other creditors and miscellaneos liabilities 2, ,886 4, ,444 Social secrity liabilities Tax liabilities Fixed asset sppliers Miscellaneos creditors 2, ,526 4, ,326 In thosands of eros 31/12/ /12/2013 Tax liability payable 11, The corporate tax liability of 11.1 million is a sharp increase ( million) on the previos year. The MPI holding company in 2014 recorded taxable income at the ordinary rate of 36.3 million (i.e. a tax expense of 12.1 million), 30 million of which came from foreign exchange gains related to the revalation of its cash in crrencies at the closing rate. NOTE 10 Operating income The Company posted an operating loss in 2014 of 3.7 million, after taking into accont the operating costs inherent in the listing (stattory adit, fi nancial commnication, legal costs, etc.). The 1.3 million increase in operating expenses over 2013 is de to fees paid for planned external growth transactions. In 2013, operating income, which inclded a consolidated gain of 30.9 million realised on the sale of 14.9% of the Seplat shares, amonted to 29 million. ANNUAL REPORT

130 6 Financial statements CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTE 11 Financial income In thosands of eros 31/12/ /12/2013 Net foreign exchange adjstments (1,931) 651 Other 3,079 3,304 FINANCIAL INCOME 1,148 3,955 Other fi nancial income corresponds mainly to the interests on the advances to Seplat and Saint-Abin Energie. The relative decline in this item from one year to the next is de to Seplat s repayment of the loan it received over the fi rst half of the year. NOTE 12 Earnings per share 31/12/ /12/2013 Net income, Grop share 49, ,361 Net income from contining activities 49, ,361 Average nmber of shares otstanding 110,745, ,926,459 Average nmber of dilted shares 115,336, ,336,534 Earnings per share Basic Dilted In accordance with IAS 33, dilted earnings per share are eqal to the net income attribtable to ordinary shareholders of the parent company divided by the weighted average nmber of ordinary shares otstanding at the price for the period, after adjsting the nmerator and denominator for the impact of all potential dilting ordinary shares. Potential ordinary shares are treated as dilting if, and only if, their conversion to ordinary shares has the effect of redcing earnings per share from contining ordinary operations. 128 ANNUAL REPORT 2014

131 Financial statements 6 CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTE 13 Related parties Commercial and financial transactions (in thosands of eros) 31/12/2014 Revenes Expenses Amonts de from related parties (net) Amonts de to related parties Joint ventres Seplat 2,548 5, Saint-Abin Energie 1,203 44,396 0 Other related parties Etablissements Marel & Prom /12/2013 Revenes Expenses Amonts de from related parties (net) Amonts de to related parties Joint ventres and associates Seplat 3,003 34,937 0 Saint-Abin Energie 0 38,160 0 Other related parties Etablissements Marel & Prom Agreements between the Company and Seplat Shareholder loan In 2010, the Company granted a shareholder loan of $153 million to Seplat, remnerated at a rate of 7.125%, which had a balance of $48 million at 31 December This loan was repaid in May 2014 after Seplat s IPO. Spport services The Company provides technical and general spport services to Seplat nder normal competitive market terms. In 2014, the amonts invoiced for these services totalled 6 thosand. In addition, the amonts reinvoiced for personnel provided to Seplat totalled 1,793 thosand. Agreements between the Company and Saint-Abin Energie The Company makes crrent accont advances to Saint-Abin Energie. Under the agreement signed by the parties, these crrent accont advances are remnerated at the tax-dedctible rate in France. Compensation of senior exectives The main offi cers are the Chairman, the members of the Board of Directors, the Chief Exective Offi cer, and the MPI Depty Chief Exective Offi cer. The compensation allocated for MPI senior exectives amonted to 341 thosand in The Combined (Ordinary and Extraordinary) General Shareholders Meeting of 19 Jne 2014 also allocated Directors fees totalling 360 thosand for members of the Board of Directors. En milliers d eros 31/12/ /12/2013 Short-term benefi ts Share-based payments 60 TOTAL ANNUAL REPORT

132 6 Financial statements CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTE 14 Off-balance-sheet commitments Commitments given Garantees made on borrowings Seplat s secrities have been pledged to lending instittions as collateral for the syndicated line of credit set p by the sbsidiary in 2012 for a maximm of 550 million, which had a balance of 290 million at the end of Under these fi nancing agreements, Seplat mst meet the following two covenants: debt to eqity ratio of less than 3; and amont borrowed < P2 reserves * $70 * 40%. These ratios had been complied with at 31 December Commitments received None. NOTE 15 Operating segments In compliance with IFRS 8, segment reporting is presented according to the same principles as internal reporting, and reprodces the internal segment reporting defi ned to manage and measre the MPI Grop s performance. The MPI Grop has only one operating segment - its hydrocarbon eqity interest management/hydrocarbon prodction bsiness. Detailed information abot Seplat is provided in Note 5 Eqity associates. NOTE 16 Risks Credit risk Receivables and loans booked as Company assets concern Saint- Abin Energie. Considering the natre of these receivables, which are spposed to fi nance expenditre linked to the exploration condcted throgh this vehicle, MPI is not exposed to conterparty risk per se bt to the risk inherent in any exploration activity. Liqidity risk As with any bsiness, the MPI Grop is exposed to a risk of insffi cient liqidity or to a risk that its fi nancing strategy is inadeqate. To mitigate this risk, the Grop maintains a balance between debt and eqity on the one hand, and debt and its capacity to repay on the other, in compliance with ratios that are sally considered prdent. Financing options are reviewed and validated by the Company s Board of Directors. The Grop s liqidity is detailed in consolidated cash fl ow statements prodced weekly and sent to the exective management. Monthly, qarterly and year-end forecasts are also prodced at the same time. The Grop s cash position is monitored by the treasry manager at Etablissements Marel & Prom s registered offi ce as part of the service agreement entered into with this company. To perform his dties, this manager is in reglar contact with Seplat s treasry manager. As at 31 December 2014 and 31 December 2013, the MPI Grop had no signifi cant fi nancial liabilities. The MPI Grop s liqid assets, which were million as at the reporting date, are held in demand deposit acconts. Market risk The Grop s fi nancial statements are sensitive to fl ctations in the price of hydrocarbons. Crrency risk is negligible following the Company s adoption of the dollar as its operating crrency in ANNUAL REPORT 2014

133 Financial statements 6 CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 Exposre to hydrocarbon risk The economy, and particlarly the profi tability of the oil and gas indstry, is very sensitive to the price of hydrocarbons expressed in dollars. As a reslt, the cash fl ow and income projections of Seplat and, therefore, of the Company, are heavily impacted by changes in the price of hydrocarbons expressed in dollars. Foreign exchange risk The presentation crrency of the MPI Grop s fi nancial statements is the ero (EUR), while the operating crrency of the Company and Seplat is the dollar (USD). This is becase sales, most of the operating expenses, and a signifi cant portion of investments are denominated in this crrency. This makes the MPI Grop s consolidated fi nancial statements sensitive to the EUR/USD exchange rate, a sensitivity that is linked to the conversion of assets and liabilities to the reporting crrency at the closing rate. Exchange gains and losses arising therefrom are recorded in shareholders eqity. The impact on consolidated shareholders eqity at 31 December 2014 of a +/-10% change in the EUR/USD exchange rate on that date is presented below (in millions of eros): Impact on net income before income tax Impact on exchange gain (loss) (shareholders eqity) 10% rise in EUR/USD rate 10% fall in EUR/USD rate 10% rise in EUR/USD rate 10% fall in EUR/USD rate USD (52.2) 63.8 Other crrencies TOTAL (52.2) 63.8 At 31 December 2013, the changes were as follows: Impact on net income before income tax Impact on exchange gain (loss) (shareholders eqity) 10% rise in EUR/USD exchange rate 10% fall in EUR/USD exchange rate 10% rise in EUR/USD exchange rate 10% fall in EUR/USD exchange rate USD (42.3) 51.6 Other crrencies TOTAL (42.3) 51.6 The Grop has not set p any specifi c hedges to mitigate foreign exchange risk. At 31 December 2014, the Company s consolidated foreign exchange position stood at $697 million, which breaks down as follows: At 31 December 2014 Assets and liabilities Foreign crrency commitments (c) Net position before hedging (d) = (a)-(b)+/-(c) Hedging financial instrments (e) Net position after hedging (f) = (d) - (e) Non-crrent fi nancial assets Eqity associates Other crrent assets Derivative instrments Other creditors and miscellaneos liabilities Cash and cash eqivalents USD exposre ANNUAL REPORT

134 6 Financial statements CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 At 31 December 2013, the Company s consolidated foreign exchange position stood at $641 million, which can be analysed as follows: At 31 December 2013 Assets and liabilities Foreign crrency commitments (c) Net position before hedging (d) = (a)-(b)+/-(c) Hedging financial instrments (e) Net position after hedging (f) = (d) - (e) Non-crrent fi nancial assets Eqity associates Other crrent assets Derivative instrments Other creditors and miscellaneos liabilities Cash and cash eqivalents USD exposre Interest rate risk The MPI Grop s cash is deposited in demand deposit acconts earning interest at the Libor rate of +22 basis points. An increase of 1 bp in the Libor rate wold improve the Company s fi nancial income by 2.2 million. Seplat borrows at a variable rate capped at 10%, which reslts in a residal exposre to the Company s interest rate risk. A 1% increase in interest rates wold reslt in a decrease of 0.5 million in income from eqity associates. Exposre to eqity and management risk The MPI Grop s fi nancial assets are not exposed to eqity risk. NOTE 17 Post-balance-sheet events In Myanmar, drilling on well SP-1X operated by PetroVietnam, which began on 27 December 2014, ended in March The reslts from this well are now being analysed. 132 ANNUAL REPORT 2014

135 Financial statements 6 CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTE 18 Adit fees François Carrega Amont IAC Amont In thosands of eros Adit Stattory Aditor, certifi cation, examination of Company and consolidated fi nancial statements Other measres and services directly related to the dties of the Stattory Aditor Sbtotal Other services rendered via the networks to flly consolidated sbsidiaries Legal, tax, employment Other (specify if > 10% of adit fees) Sbtotal TOTAL ANNUAL REPORT

136 6 Financial statements CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 Stattory aditors report on the consolidated financial statements for the year ended 31 December 2014 To the Shareholders, In the performance of the task entrsted to s by yor General Shareholders Meeting and yor Articles of Association, we present to yo or report for the fi nancial year ended 31 December 2014, concerning: the adit of the consolidated fi nancial statements of MPI, as attached to this report; the reasons spporting or assessments; the specifi c verifi cation reqired by law. The Board of Directors has approved the consolidated fi nancial statements. It is or responsibility, based on or adit, to express an opinion on these fi nancial statements. I. Opinion on the consolidated financial statements We carried ot or adit in accordance with the professional standards applicable in France. These standards reqire that we plan and perform the adit to obtain reasonable assrance that the consolidated fi nancial statements are free of material misstatement. An adit involves sing sampling techniqes or other methods of selection to check the evidence jstifying the amonts and the information set ot in the consolidated fi nancial statements, It also consists of assessing the acconting policies followed, the main estimates made and the overall presentation of the fi nancial statements. We believe that the evidence we have gathered is a sffi cient and appropriate basis on which to form or opinion. With regard to the International Financial Reporting Standards as adopted by the Eropean Union, we certify that the consolidated fi nancial statements for the fi nancial year give a tre and fair view of the assets, fi nancial position and net income of the Grop comprising the persons and entities inclded in the consolidation. II. Jstification of or assessments Prsant to the provisions of Article L of the French Commercial Code relating to the reasons spporting or assessments, we bring the following matters to yor attention: Note 2.2 to the fi nancial statements describes the acconting policies applied concerning bsiness combinations and goodwill, as well as those relating to impairment tests on these assets; Note 5 to the fi nancial statements, Eqity Acconting, describes in detail the manner in which impairment tests have been applied to the shares of Nigerian Seplat, nder eqity acconting principles. These impairment tests are based, in particlar, on cash fl ow projections prepared by the company s senior management. We examined the consistency of the assmptions sed, their nmerical expression and the available docmentation, and we have, on this basis, assessed the reasonableness of the estimates made. We also checked that the Notes to the fi nancial statements provide appropriate information. The assessments ths made are part of or adit of the consolidated fi nancial statements, taken as a whole, and therefore contribted to the formation of or opinion expressed in the fi rst part of this report. 134 ANNUAL REPORT 2014

137 Financial statements 6 CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 III. Specific verification In accordance with professional standards applicable in France, we also carried ot the specifi c verifi cation, reqired by law, of the information relating to the grop and set ot in the management report. We have no comment to make on its fairness and consistency with the consolidated fi nancial statements. Paris, 27 April 2015 The Stattory Aditors INTERNATIONAL AUDIT COMPANY Daniel DE BEAUREPAIRE François CARREGA ANNUAL REPORT

138 6 Financial statements COMPANY INCOME IN THE LAST FIVE FISCAL YEARS 6.2 COMPANY INCOME IN THE LAST FIVE FISCAL YEARS In eros I FINANCIAL POSITION AT THE END OF THE FISCAL YEAR a) Share capital 133,433,534 11,533,653 11,533,653 11,533,653 11,533,653 b) Nmber of shares issed 121,303, ,336, ,336, ,336, ,336,534 II TOTAL INCOME FROM OPERATING ACTIVITIES a) Sales (exclsive of tax) 0 320, ,900 42,300 6,000 b) Income before tax, amortisation, depreciation and provisions 7,073,849 11,166,061 6,219,750 85,568,434 44,370,990 c) Income tax 1,988,195 2,918, ,292 1,658,325 13,278,472 d) Net income after tax, amortisation, depreciation and provisions 2,722,307 5,424,976 10,128,533 81,122,249 32,476,020 e) Distribted profi ts 0 0 8,948,767 26,701,073 34,600,960* III EARNINGS PER SHARE a) Net income after tax, bt before amortisation, depreciation and provisions b) Net income after tax, amortisation,depreciation and provisions c) Net dividend per share ** IV PERSONNEL a) Nmber of employees b) Total payroll , , ,762 c) Sms paid for employee benefi ts (social secrity, welfare schemes, etc.) , , ,343 * Approved by the General Shareholders Meeting of 22 May 2015 and based on the total nmber of shares at 31 December ** Approved by the General Shareholders Meeting of 22 May ANNUAL REPORT 2014

139 Additional information PUBLICLY AVAILABLE DOCUMENTS INFORMATION ON EQUITY INTERESTS PROVISIONAL CALENDAR PERSON RESPONSIBLE FOR THE ANNUAL REPORT Person responsible for the Annal Report Declaration by the person responsible STATUTORY AUDITORS Incmbent Stattory Aditors Alternate Stattory Aditors Stattory aditors fees GLOSSARY CONCORDANCE TABLES Management report EC reglations 144 ANNUAL REPORT