As previously communicated, in response to these allegations, the company commenced an internal independent investigation under the supervision of the Finance and Audit Committee of the Board.  The findings of the investigation illustrate that the deterioration of the political situation in Syria posed very difficult challenges for the security and operations of the plant and its employees. Such challenges included threats to the safety of its employees as well as disruption of supplies needed to operate the plant and product distribution.

At times, different armed factions controlled or sought to control the areas around the plant.  It appears from the investigation that the local company provided funds to third parties to work out arrangements with a number of these armed groups, including sanctioned parties, in order to maintain operations and ensure safe passage of employees and supplies to and from the plant. The investigation could not establish with certainty the ultimate recipients of funds beyond those third parties engaged.

In hindsight, the measures required to continue operations at the plant were unacceptable.  Those responsible for the Syria operations appear to have acted in a manner they believed was in the best interests of the company and its employees.  However, the investigation revealed significant errors in judgment that are inconsistent with the applicable code of conduct.

The legacy Lafarge operations in Syria operated at a loss during the time period in question and represented less than 1% of the Group’s sales at the time.

As a consequence of the internal review and its findings, the Board has taken a number of decisions. First of all, the Board approved the creation of a new Ethics, Integrity & Risk committee, supervised by a member of the Executive Committee. The decisions further include, with the assistance of outside counsel, continuing improvements of efforts already undertaken by the Group in the last few years, specifically the adoption of a more rigorous risk assessment process focusing in particular on high risk third parties and joint venture partners, a restricted party screening program, a new sanctions and export control program and further efforts resulting from a benchmarking exercise it has undertaken. The Board has instructed executive management to vigorously implement these actions, which are designed to further strengthen and resource a state-of-the-art compliance organization and processes reflecting best practices.  It makes it clear that there can be no compromise with compliance nor with adherence to the standards reflected in the company’s code of conduct no matter the operational challenges.

Based on the information available today, there is no indication that the reported allegations are likely to have an adverse financial impact that is material to the Group.

In connection with the reported activities, criminal complaints are reported to have been filed in France. Such proceedings are conducted under a rule of secrecy and neither Lafarge SA nor any of its affiliates have been made a party to any of them. In light of the proceedings, the company will not comment further on the findings or individual conduct.