GUILÉ EUROPEAN ENGAGEMENT FUNDThe New Generation of Socially Responsible Investment

P1

A new generation of SRI*

* Socially responsible investment

P2

Three generations of socially responsible investments

ExclusionExclusion InclusionInclusion EngagementEngagement

• South Africa• Tobacco• Armament• Etc…

• Exercise voting rights• Initiate dialogue with

companies

• Taking into consideration corporate social and environmental criteria

P3

Shareholder activism> Concentrating on the balancing act of corporate governance

> Limited impact of shareholder motions

> Tension between management and shareholder activists

> Creation of CSR departments as a defensive measure

• Necessity to develop a new direction: a critical & legitimate cooperation with the corporate sector on the issues involving the vast social and environmental stakes

• Transfer CSR from the communication department to the heart of corporate strategy.

P4

The Ten Principles of the Global Compact

The Global Compact’s ten principles in the areas of human rights, labour, the environment and anti-corruption are derived from the Universal Declaration of Human Rights, the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development and the United Nations Convention Against Corruption. The Global Compact asks companies to embrace, support and enact, within their sphere of influence, a set of core values in the areas of human rights, labour standards, the environment and anti-corruption.

Businesses should support and respect the protection of internationally proclaimed human rights andmake sure that they are not complicit in human rights abuses

Human Rights

P5

The Ten Principles of the Global Compact

Labour Standards

Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;the elimination of all forms of forced and compulsory labour;the effective abolition of child labour; andthe elimination of discrimination in respect of employment and occupation

Environment

Businesses should support a precautionary approach to environmental challengesundertake initiatives to promote greater environmental responsibility; andencourage the development and diffusion of environmentally friendly technologies

Anti-Corruption

Businesses should work against corruption in all its forms, including extortion and bribery

P6

The Global CompactSupport growth, reduce risks

Exposure to ESG*problems

Human RightsHuman Rights

Labour standardsLabour standards

EnvironmentEnvironment

Anti-corruptionAnti-corruption

OthersOthers

CommunityCommunity

Strategy,politicies,

managementsystems

Strategy,politicies,

managementsystems

Engagement towardsThe Global Compact

Operational risksOperational risks

Reputation and brandingReputation and branding

Operational efficiencyOperational efficiency

InnovationInnovation

Access to new markets/products/sectorsAccess to new markets/products/sectors

Access to knowledge and skillsAccess to knowledge and skills

Access to key resourcesAccess to key resources

Acceptance by the communityAcceptance by the community

OthersOthers

Legal risks and regulationLegal risks and regulation

Transmission factors

Risk premiumRisk premium

CostsCosts

RevenuesRevenues

Others (tax issuesReinvestment rates) Others (tax issues

Reinvestment rates)

Creation of financialdrivers

* Env

ironm

enta

l, soc

ial a

nd g

over

nanc

e

P7

The Guilé European Engagement Fund: an overview

GUILÉ EUROPEANENGAGEMENT FUNDGUILÉ EUROPEAN

ENGAGEMENT FUND

Portfolio ~ 25-40 Firmswhich signed UNGC

Portfolio ~ 25-40 Firmswhich signed UNGC

PICTET, LuxembourgFUND CUSTODY

DE PURY PICTET TURRETTINIFUND MANAGEMENT

Voting Rights GUILÉ FOUNDATION

In collaboration with

GUILÉ ENGAGEMENT FUND TEAM

Service to portfolio firms :

• Benchmarking on reporting• Case-Stories• Multi-stakeholder dialogue and

initiatives• Suggestions for consulting

GUILÉ INVESTOR COMMITTEEfor Mult-istakeholder Initiative

P8

Guilé’s engagement team

Ernst-A. Brugger Fondation Guilé, President of BHP Partners, Blue Orchard Finance, Board member of Precious Wood. Vice-president Centre Henry Dunant. Guest professor at Stanford University and Zurich University. Beforehand, at Swiss Re and ICRC.

Thomas Streiff Partner at BHP Partners. Beforehand responsible of « Group Sustainability Management » at Swiss Re, member of the management committee; Coopération Suisse au Développement (SDC); COO of Sustainability Forum Zürich.

Fritz Brugger Partner at BHP Partners. Beforehand, member of programs committee at Helvetas. Specialist in water issues and the role of the corporate sector . Pionneer in the cooperation between NGO’s and the private sector

Gilles Carbonnier Professor at HEI. Beforehand State Secretary at the department of the economy (SECO), responsible for negotiations for the entry of China and Vietnam in the WTO; Member of the executive committee at the ICRC, responsible for the coordination with the private sector.

Olivier Johner Associate BHP, responsible within the Global Compact for the creation of a benchmark.

The services and the added value of Guilé

P9

> Evaluation of accomplishment and progress

> Strategic seminar

> Examination of studies presented to the UNGC

> « Multistakeholders » initiatives

P10

Examples of value creation and social engagement:

Holcim AXA Siemens ABB

A « joint venture » in India

Building materials and durable habitat

Elaboration of a business model and a business

plan in the area of micro health

insurance with the Novartis

Foundation, Swiss Re and the Swiss

Development Cooperation (SDC)

Industrialisation of a UNCTAD project in the areas of a micro water

purification station

Windmill project in Madagascar

P11

Investment process

P12

Why ?

> An investment style focused on growth quality

> A robust historic performance

> First rate clients and first rate reputation

P13

Performance: 1999 – 2007* (Composite PPT European Equities)

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

180.00

sept.

99mars.

00se

pt.00

mars.01

sept.

01mars.

02se

pt.02

mars.03

sept.

03mars.

04se

pt.04

mars.05

sept.

05mars.

06se

pt.06

mars.07

Mandat

DJ Stoxx 50

+41.33%

+27.32%

* Base 100 at 21/04/1999, data at 31/07/2007, SPPS

P14

The management team

Christopher Quast

Christopher joined PPT in 1999 and is a partner of the firm. He was previously Senior Project Manager at McKinsey & Company in Zurich, New York and Geneva where he led a number of strategy and capital management projects for large banking and insurance clients. He started his career with Cargill and Shearson Lehman Brothers as broker active in financial derivative markets for institutional clients. Christopher graduated from the University of Lausanne with a Degree in Economics and holds an M.B.A. from INSEAD

Jean has been with PPT since 2001. He began his career in the audit field with Arthur Andersen in 1990, and then with Ernst & Young since 1994.In 1997 he joined the Swiss subsidiary of Pargesa Group (Orior Holding), composed of 30 companies active in different sectors (food, watch components, real estate). He held various responsibilities in the finance function (M&A, analysis of industrial investments, restructurings, consolidation, etc.). He joined PPT in 2001 and is in-charge of equity research, as well as the technical analysis of the markets. Jean graduated from HEC Lausanne, Switzerland. He is a US Certified Public Accountant, a Chartered Financial Analyst as well as a Chartered Market Technician.

Jean Niklas, CPA, CFA, CMT

P15

Investment Objectives

> The objective of the Guilé European Engagement Fund is to realise a significant capital appreciation all the while outperforming the European market*

> The investment process consists essentially in identifying situations with a significant upside potential, to determine the catalysts which would allow to crystallize this value, to invest at the right moment, and to sell once the potential has been recognized by the market.

> This investment method has been applied with success for more than seven years for our clients, institutional and private.

* Dow Jones STOXX 50 Index

P16

Portfolio construction

Portfolio25-40 positions

Portfolio25-40 positions

Selection

Portfolio constructionPortfolio constructionRisk control

(sectors / liquidity / size of positions / market risk)

Risk control(sectors / liquidity / size of

positions / market risk)

Fundamental analysis (approx. 100 companies)Fundamental analysis (approx. 100 companies)

Stock screeningStock screening Brokerrecommendation

Brokerrecommendation

Corporatevisits

Corporatevisits

Macroeconomic and technical analysis

Macroeconomic and technical analysisAnal isys

Universe : UN Global Compact European signatories (approx. 200 quoted companies)Universe : UN Global Compact European signatories (approx. 200 quoted companies)

* Dow Jones STOXX 50 Index

The principles of our investment process

P17

Our investment process respects a certain number of principles which have not evolved over the years :

> The choice of stocks is done on a fundamental « bottom-up » analysis.> Our objective is to identify companies capable of outperforming the European market in

its whole within an investment horizon of several years.> In order to identify the appropriate opportunities, a certain number of criteria measuring

financial performance and its durability are applied> The portfolio is structured in order to contain 25 to 40 stocks, a number which diversifies

the specific risk and maintains the portfolio volatility in line with the market.> The structure of the underlying benchmark* does not influence the choice of stocks; a

sectorial diversification is however assured by a « top-down » view of the portfolio.> This approach can bring about a high « tracking error » (up to 7% in the past years).

The most important element of the investment process is the method used to pick individual stocks. The following pages describe the fundamental details of our investment style.

* Dow Jones STOXX 50 Index

The fundamentals of our investment style

P18

who offer catalysts in view of an

appreciation of the value of its

stock price

who offer catalysts in view of an

appreciation of the value of its

stock pricewho have an attractive valuation

who have an attractive valuation

which benefit from a

significant competitive advantage

which benefit from a

significant competitive advantagewhich produce

added value for the

shareholder

which produce added value

for the shareholder

P19

Potential to produce added value for the shareholder

Return on investedcapital (ROIC)

Organic growth

Debt/Free Cash flow

P20

Return on Invested Capital (ROIC)

> Answers the following question: How much does the company make on every € invested ?

> Is measured by the ratio between net operational profit (after taxes) divided by the invested operational capital.

> Is often neglected by the market (which has a tendency to focus on growth)

> A high ROIC means that the activities of the company produce much cash and does not need financing by the banking sector (or other). It thus has the flexibility to optimize the utilisation of its cash flow, either by reinvesting it or by distributing it to its shareholders.

* Stock universe followed by Exane BNP Paribas (approx.. 240 European stocks)Source : Exane BNP Paribas, PPT analysis

ROIC 20052006

• Portfolio 35,7 % 31,7 %• European Stocks* 32,4 % 20,1 %

P21

Debt/Free cash flow

> Assesses the financial flexibility of the company

> Is measured by the ratio between the level of net debt + provisions, divided by free cash flow

> This data can be expressed in number of years that the company would need in order to completely reimburse its debts by using the free cash flow which it generates

> A high ratio means that the company lacks flexibility. In the case of financial pressure, it is obliged to reimburse its creditors without being able to optimize the use of its liquidity

Debt/Estimated FCF 20052006

• Portfolio 2,3x 5,5x• European Stocks* 2,9x 7,1x

*Stock universe followed by Exane BNP Paribas (approx.. 240 European stocks)Source : Exane BNP Paribas, PPT analysis

Organic growth and the capacity to finance it

P22

> Organic growth is an essential element in order to create future value for the shareholder, provided that the company is capable of financing it without increasing unseemly the weighting of its indebtedness

> This capacity can be measured by• the estimation of the organic growth of sales• the ratio between investments (« capex »

including the ones in working capital) and operational cash flow

• the evolution of ROIC over time

> A high « capex/cash flow » ratio, accompanied by a stable ROIC or growing means that the company has the capacity to reinvest its cash flow in a profitable way

*Stock universe followed by Exane BNP Paribas (approx.. 240 European stocks)Source : Exane BNP Paribas, PPT analysis

Organic growth of sales 20052006

• Portfolio 9,4 % 8,2 %• European Stocks* 7,6 % 5,4 %

P23

Ratios which enable to measure the capacity to produce value

2006 European StocksPortfolio

• ROIC (Net debt + provisions) 35,7 % 32,4 %

• Free Cash flow 2,3x 2,9x

• Organic growth of sales 9,4 % 7,6 %

Compared to the whole of the European market, the portfolio should be able to create more value for the shareholder, because companies which compose the portfolio…

> Have a superior return on invested capital – thus generate more profits on every € invested

> Reach this objective with less indebtedness on the balance sheet, thus have a greater capacity to allocate their resources.

> Experience quicker growth.

P24

A significant competitive advantage

> This phase of analysis lies essentially on a qualitative estimate of the companies capacity in maintaining or developing its position on the market over time. It is done on within the dimensions of the Porter model :

• Size• Market share potential• New technology

• Brand value• Patents• Market share

• Size• Brand

• Change of technology

NewcomersNewcomers

BuyersBuyers

SubstitutionsSubstitutions

SuppliersSuppliers

Competitors

Rivalry betweenexisting

companies

Competitors

Rivalry betweenexisting

companies

Threats of newcomers

Threat of substituted products or services

Negotiating power

of suppliers

Negotiating power

of buyers

Source : Michael Porter

P25

Attractive valuation

> In order to evaluate the added value potential of companies of quality, a « Discounted Cash Flow » (DCF) model is applied with standardized hypotheses :

• Risk free rate : 4,0 %

• Market risk premium : 4,0 %

• Shareholders equity : 8,0 % (if beta = 1)

• Assessment of free cash flow in year 1

• Assessment of free cash flow growthover 5 years (a relatively short time frame)

• Growth rate beyond 5 years : Generally 3 %(In line with long term growth potential of the economy)

> This model allows to test the hypothesise in a consistent manner (« sanity check »).

P26

Example : Schneider Electric

> Schneider Electric, a French company, is the world leader in the production of electronic material

HypothesesFree Cash Flow to Equity (2006)Risk-Free RateMarket Risk PremiumCost of EquityLong-term GrowthNet Debt (including provisions)Expected Free Cash Flow Growth (5 years)Number of shares outstanding

1'3454.0%4.0%8.0%3.0%5'4006.5%

226

2006 2007 2008 2009 2010 2011 >20110 1 2 3 4 5 5

1'345 1'432 1'526 1'625 1'730 1'843 37'9616.5% 6.5% 6.5% 6.5% 6.5% 3.0%8.0% 8.0% 8.0% 8.0% 8.0% 8.0%1.08 1.17 1.26 1.36 1.47 1.47

1'326 1'308 1'290 1'272 1'254 25'83632'286

5'40026'886

226

11993

28%

Value per Share

Free Cash FlowFree Cash Flow GrowthDiscount rateDiscount factorDiscounted Free cash FlowEntreprise ValueLess: Net Debt

Nb of Shares

Fair Value per ShareShare pricePotential Upside

Catalysts for an appreciation of the stock price

P27

> In general, a company’s stock price moves when investors anticipate a change in its situation and thus adapt the value of the stock with their expectations.

> These changes, when positive, often include the following aspects :

Internal, for example :• A new management announcing a new strategy• Measures taken to improve margins or to increase market share• « Spin-offs », mergers or acquisitions

External, for example :• Change in the company’s competitive environment (increased competition, new technology,

etc…)• Increase in the demand for its products• Impact of the economic cycle, monetary and interest rate movements

> We analyse the impact of these changes on the valuation of the company and we can thus determine its value added potential

P28

Stock selling discipline

FALL IN THE STOCK PRICE

UNDER PERFORMANCEDurable compared to the underlying benchmark

What are the reasons ?

SignificantErroneous reasoning – sell position

Not significantWait 2-3 months and monitor position (« watch list »)

P29

GUILÉ Portfolio

P30

Current portfolio (at 23.8.07)

Sectorial allocation

• Banking 17.6%• Insurance 11.2%• Food & Beverages 10.9%• Oil & gas 10.7%• Industrial goods & services 10.1%• Construction 7.0%• Utilities 6.8%• Base materials 4.3%• Healthcare 3.7%• Retail 3.2%• Automobiles 3.2%• Distribution 3.1%• Media 2.6%• Technology 0.4%• Chemicals 0.00%• Telecommunications 0.00%• Travel & leisure 0.00%

10 biggest positions

• Arcelor Mittal• Royal Dutch • Total• Standard Chartered• E.ON• Holcim• ABB• Nestlé• Saint Gobain• Zurich Financial Services

P31

Statistics (at 30.6.2007)

> Average P/E 2007 14,9

> Average P/E 2008 13,5

> Average P/B 2,7

> Volatility 14,86

> TE 2,71

> Information ratio 0,6

Guilé : a new concept of ethical investment

P32

> In going beyond the traditional approach of exclusion or filtering, PPT’s SRI approach has the ambition of creating value for its shareholders through :

• A rigorous stock selection on the basis of financial criteria• A real capacity to influence CSR strategies of companies held in its portfolio• An accompaniment of CSR projects and a willingness to measure both social and financial

added value.

* Corporate social responsibility