Group Approval Rules

Status as of June 22, 2017

© LafargeHolcim 2015
Agenda

 Purpose
 Definitions
 Application of the Rules
 Contents of the Group Approval Rules
 Approval Rules by Topic
 Appendix

© LafargeHolcim 2015 2
Purpose

The Group Approval Rules will compile in one document all approving
authority for any financial commitment involving LafargeHolcim or any
of its subsidiaries.
 Define requirements for BOD approval
 Provide financial thresholds
 Integrate rules deriving from policies and specify cross-functional regulations

These rules will provide a clear framework to countries and functions to

make their decisions.

© LafargeHolcim 2015 3
Definitions
The terms used in the approval tables are defined as follows:
 Approves: Those who are authorized to approve and answer to the decision before
sign off, or are authorized to approve or reject a project (investments).

 Clears:
• Procurement only: Those who are sent by email a proposed contract (copy) and a
summary for review and approval to proceed for signatures.
• All Others: Those subject matter experts whose opinions are sought and with whom
there is two-way communication but do not have approval authority.

 Informed: Those who are kept up-to-date on progress, often only on completion of the
task or deliverable; and with whom there is just one-way communication.

© LafargeHolcim 2015 4
Functional Committees
The Group Committees in the charts include:
 Group Financial Instruments Committee: Chaired by CFO and including the Head of Corporate
Finance and Treasury (Group), Head of Group Tax and Head of Group Reporting and
Consolidation.
• For internal financing transactions, the committee is chaired by the Head of Corporate
Finance and Treasury (Group) and includes the Head of Group Tax and Head of Group
Reporting and Consolidation.
• If related to equity financing, Legal clearance must be sought.
 Group Pension Governance Team: Includes representatives from Human Resources, Legal and
Compliance, Accounting and Controlling and Corporate Finance and Treasury.
 Group Pension Fund Committee: Chaired by CFO and including Head Communications, Public
Affairs& Sustainable Development, Group General Counsel and Chief Legal and Compliance
Officer, Head of Organization and Human Resources, Head of Reporting and Consolidation,
Head Corporate Finance and Treasury, Group Pension and Benefits and ExCo members
depending on the topic.

© LafargeHolcim 2015 5
Application of the Rules

LafargeHolcim Controlled Companies:

The Rules apply to all companies in which LafargeHolcim has a controlling interest[1] :
• Fully owned companies
• Investments over which the Group exercises control.
These rules do not apply to the commitments and transactions among LafargeHolcim Controlled
Companies (e.g.: Industrial Franchise Agreements or similar, intercompany loans, dividends
payment etc.).

Non Controlled Companies:

The Group Approval Rules must be applied whenever exercising voting rights in a board or
shareholders’ meeting of a company over which LafargeHolcim has a significant influence but no
control (‘Non Controlled Companies’) [2].

Currency
All amounts indicated are in CHF (except Trading which is in USD)

[1] As far as the compliance with the rules is not contradictory with any existing agreement with a partner.
[2] Holding 20% or more of the voting power (directly or through subsidiaries) will indicate significant influence unless it can be clearly demonstrated otherwise.

© LafargeHolcim 2015 6
Contents of the Group Approval Rules
Commercial g Sales and service agreements p.8
Agreements g Multi-country framework agreements p.8
g Franchise & licensing agreements involving p.8
g Oil & gas sales & service agreements: p.9
Global/multi country agreements
Local agreements with key global/multi-country accounts
Local agreements with the local customers (non-key
accounts)
Procurement g Local / Zone procurement p.10
g Global procurement p.11
g Energy (including electricity, gas, solid fuels) p.12
Trading g Contracts and agreements with non-Group p.13
Finance & Treasury g Guarantees p.14
g External financing (new and renewals) p.14
g Internal financing (new and renewals) p.15
Governance g Creation of a company p.16
g
Appointment of a company's legal or authorized p.16
Human Resources g Restructuring p.17
g Change in employee's pension and post employment p.17
Specific
Agreements g Lobbying p.18
g Other service agreements with government-facing p. 18
g Sponsoring and donations p. 18
g Settlements (not insurance) p.19
g Settlement agreements with insurers p.19
g Closing of a site or its activities p.19
Updated New
Investments g Capex to maintain and develop p. 20
g M&A Size Categorization and Responsibilities p. 21
© LafargeHolcim 2015 7
Appendices pp. 23-27
 Commercial Agreements (1 of 2) (when LafargeHolcim is the Supplier)

Group Exco
All Member
amounts Area Manager /
Group Function
Region ExCo Growth &
are in (1) (2)
Commitment Threshold Country CEO Head Member Innovation Group CEO
CHF Sales & services agreements and binding offers (whatever the duration of the contract)
[Ductal contracts must b e approved b y the Head of Function for Ductal]

< 25 M Approves

> 25 - < 50 M Clears (3) Informed

Approves

> 50 M Clears Clears Clears Approves

(4)
Multicountry framework agreements (with key customers)

< 50 M Clears Informed Approves

> 50M Clears Clears Clears Approves

Franchise & licensing agreements involving Lafarge-Holcim's intellectual property rights (patents, brands, trademarks, know-
how)
Clears
(Communication
No Threshold Clears Informed Approves
approves if related
to b rand)

(1) The commitment value over the entire duration of the contract
(2) Related Growth & Innovation Function (e.g. Head of Oil & Gas, Head of Infrastructure & Key Account Management)
(3) Region ExCo member may delegate their level of authority to the area managers up to a certain threshold based on their judgment
(4) Partnership Memorandum of Understanding with International Groups (with no direct sales or pricing impact) are approved by the
ExCo member of Growth & Innovation. The relationship with these customers requires strong coordination with the Business Units.
© LafargeHolcim 2015 8
 Commercial Agreements (2 of 2) (when LafargeHolcim is the Supplier)

Group Exco
All Member
Group Function
amounts Area Manager / Region ExCo Growth &
(1) (2)
Commitment Threshold Country CEO Head Member Innovation
are in
CHF Oil & Gas global/multi country sales and service agreements

No Threshold
Clears Clears Informed Approves

Oil & Gas local sales and service agreements with the key global/multi-country accounts

No Threshold
Approves Clears Informed

Oil & Gas local sales and service agreements with the local customers (non key accounts)

No Threshold
Approves Informed

(1) The commitment value over the entire duration of the contract
(2) Related Growth & Innovation Function (e.g. Head of Oil & Gas, Head of infrastructure & Key Account Management)

© LafargeHolcim 2015 9
 Local/Zone Procurement
All Group ExCo
amounts Area Zone Procurement Group Chief Member
are in Manager / Procurement Global Head Region ExCo Procurement Performance
(1) (2) (3)
CHF Commitment Threshold Country CEO Heads of Category Member Officer & Cost Group CEO Group ExCO

< 500 K (1M for logistics) Approves

> 500 K - <10 M Approves Clears

> 10 M - < 25 M Clears Approves Approves

> 25 M - < 200 M Clears Clears Clears Approves

(5)
> 200 M - < 400 M Clears Clears Clears Approves

(1) The commitment value over the entire duration of the contract
(2) These thresholds do not apply for energy including AF – specific approval process currently being designed
(3) Leasing: Any commitment above 5 M will have to be approved by Head of Group Treasury
(4) Head of the Region may delegate their level of authority to the area managers up to a certain threshold based on their judgment
(5) Beyond 400 M, the Board of Directors functions diagram should be used to determine review and approval requirements

Note: The approvals by Global & Zone Procurement are to be done for contracts and not per individual order or transaction. As an
example: A contract for coal is signed for 12 months with a total value of CHF 10M; subsequently 20 purchase orders are issued against
this contract over the year. Only the 10M contract is to be approved by Global/Zone Procurement, not the individual orders.

© LafargeHolcim 2015 10
Global Procurement
All
Group ExCo
amounts Zone Procurement Group Chief Member
are in Procurement Global Head Procurement Performance
(1)
CHF Commitment Threshold Heads of Category Officer & Cost Group CEO Group ExCO

< 10 M Clears Approves

> 10 M - < 25 M Clears Approves

> 25 M - < 50 M Clears Approves

> 50 M - < 200 M Clears Clears Approves

(2)
> 200 M - < 400 M Clears Clears Approves

(1) The commitment value over the entire duration of the contract
(2) Beyond 400 M, the Board of Directors functions diagram should be used to determine review and approval requirements

© LafargeHolcim 2015 11
 Updated
Energy (Including Electricity, Gas, Solid Fuels)
Head of Energy ExCo Member
All Region ExCo
Head of Energy Area Manager/ Group Head of Group Performance &
amounts Commitment Threshold
(1) (2)
(Region) Country CEO (4) Procurement Member(4) Procurement Cost Group CEO Group ExCO
are in
CHF <1M Clears Approves

> 1 M < 10 M Clears Approves Approves

> 10 M - < 25 M Clears Clears Clears Approves Approves

> 25 M - < 50 M Clears Clears Clears Clears Clears Approves

> 50M - < 200 M Clears Clears Clears Clears Clears Clears Approves

(3)
> 200 M - < 400 M Clears Clears Clears Clears Clears Clears Clears Approves

(1) Regulated contracts which are renewed with no changes to terms and conditions except the contract term need to receive the lowest level of approval only.
(2) In case of contracts with value above 10MCHF and duration longer than 24 months, approvals to be sought up to Region ExCo Member.
(3) Beyond 400 M, the Board of Directors functions diagram should be used to determine review and approval requirements
(4) For Solid Fuels contracts signed by LHES, Area Manager/Country CEO & Head of Region signature is not required.

© LafargeHolcim 2015 12
Trading (including Chartering)
All
amounts
Commitment Threshold Region ExCo
are in in USD millions CEO Trading Member Group CEO Group ExCo
USD
< 60 M Approves

> 60 M - < 100 M Clears Approves

>100 M - < 200 M Clears Approves

(3)
> 200 M - < 400 M Clears Approves

Notes:
1) These rules/thresholds apply to contracts with non-Group companies (Third Parties).
2) Beyond 400 M, the Board of Directors functions diagram should be used to determine review and approval requirements

© LafargeHolcim 2015 13
 Updated
Finance & Treasury (1 of 2)
All Country CEO Head of Corporate Group Financial
amounts jointly with Country Finance & Treasury Instruments Committee
Commitment Threshold CFO (at the Group) (4) (chaired by Group CFO) Group CFO Group CEO Group ExCo
are in
CHF Guarantees or other types of comforts that may be required as a security delivered by a Group company for the benefit of a wholly owned
subsidiary within its country (1)
No threshhold
Clears Clears Approves

All types of new external financing for Group Companies (2) (3)

<5M
Approves Informed
> 5 M - < 25 M
Clears Approves Informed
> 25 M - < 200 M
Clears Clears Approves
> 200 M - < 400 M
Clears Clears Clears Approves

Renewal of external financing for Group Companies

<5M
Approves Informed
> 5 M - < 200 M
Clears Approves Informed
> 200 M
Clears Clears Approves Informed

(1) As a principle, LafargeHolcim Corporate (Group) does not provide guarantees to operating Group companies in a country.
(2) Securitization and factoring of receivables are not encouraged. If this exceptional case was to occur, Group CFO approval would be mandatory.
(3) Delegations of authority for approval of new financing, which need to be documented, are as follows:
• Group ExCo can delegate to the Group CEO for financing > 200M (with the ExCo being informed)
• Group CEO can delegate to the Group CFO for financing > 25M - < 200M (with the Group CEO being informed)
• Group CFO can delegate to the Head Corporate Finance and Treasury for financing > 5M - < 25M (with the Group CFO being informed)
(4) Delegation of authority, which needs to be documented, of the Head of Corporate Finance and Treasury to the Head of Group Financing & International
Treasury can occur up to a certain threshold based on his judgment.
© LafargeHolcim 2015 14
 Updated
Finance & Treasury (2 of 2)
All Group Financial
amounts Commitment Threshold Instruments Committee Group CFO Group CEO Group ExCo
are in New internal financing (equity / debt) from LafargeHolcim (Group) to Group Company
CHF
< 25 M Approves Informed

> 25 M - < 200 M Clears Approves Informed

> 200 M Clears Clears Approves Informed

Internal financing (equity / debt) from Group Company to other non-wholly owned Group Company) (1)

< 25 M Clears Approves Informed

> 25 M - < 200 M Clears Clears Approves Informed

> 200 M - < 400 M Clears Clears Clears Approves

Renewal of internal financing (debt) from LafargeHolcim (Group) to Group Company

< 200 M Approves Informed

> 200 M Clears Approves Informed

Debt equity swap of debt between LafargeHolcim (Group) and Group Company

< 200 M Clears Approves Informed

> 200 M Clears Clears Approves Informed

(1) Non-wholly owned Group Company means any Group Company that is not owned 100% directly or indirectly by LafargeHolcim Group.

© LafargeHolcim 2015 15
 New
Governance
All Head of Group
amounts Area Manager/ Head of Reporting & Group General Region ExCo
are in Commitment Threshold Country CEO Group Tax Consolidation Counsel member Group CFO Group CEO
CHF Creation of a company or joint venture (legal entities, joint ventures, etc)

No threshold
Clears Clears Approves Approves

(1)
Appointment of a Company's legal or authorized representative
- Listed Companies
- Significant subsidiaries (2)
- Holding companies above
country level Informed
- The main operational (Holding Clears Clears Approves
company in each country companies)
where the country Excom are
employed

Other subsidiaries Approves Clears

(1) Person / body empowered by law or within the by-laws to commit the Company such as Chairman, Board of Directors, etc.
(2) Significant subsidiaries, joint ventures and investments in associates such as listed in the Group annual report.

© LafargeHolcim 2015 16
 New
Human Resources
Pension
All Area Manager/ O&HR Group O&HR Regional ExCo Governance Group Pension
(1)
amounts Commitment Threshold Country CEO Regional Head Exco Member Member Team Fund Committee Group CEO Group ExCo
are in Restructuring (plan or accumulation of individuals)
CHF
<2M
Approves Informed

> 2 - < 10 M
Clears Approves

> 10 - < 25 M
Clears Clears Approves

> 25 M - < 200 M

Clears Clears Approves

> 200 M - < 400 M Clears Clears Approves

Change in employees' pension benefits and other post employment benefits (2)

<2M
Approves Informed Informed

> 2 - < 25 M
RfA Informed Recommends Approves

> 25 M - < 200 M

RfA Informed Recommends Recommends Approves

> 200 M - < 400 M RfA Informed Recommends Recommends Approves

(1) Commitment Threshold means the impact of any single proposal or project. For instance, a buy-in of CHF 20M with no cash impact and
no EBITDA impact will have to be analyzed by the Governance Team and formally approved by the Group Pension Fund Committee.
(2) Commitment calculated on a discounted basis as per IFRS.
(3) RfA means Request for Approval.
(4) Beyond 400 M, the Board of Directors functions diagram should be used to determine review and approval requirements

© LafargeHolcim 2015 17
 New

Intermediation , Lobbying, Sponsoring & Donations

Group Head of
All Communication,
amounts Group General Sustainable
are in Area Manager / Counsel and Group Head of Development & Region ExCo
Commitment Threshold Country CEO Compliance Public Affairs Public Affairs member Group CEO
CHF
Lobbying agreements (public affairs)

No threshhold Clears
(2) Approves Informed
(via TPDD tool )

Other service agreements with government-facing intermediaries (having interactions with public officials on behalf of LH group company)

0 - < 100 K Clears

Approves (2)
(via TPDD tool )
> 100 K - < 10 M Clears
(2) Approves
(via TPDD tool )
> 10 M Clears
(2) Clears Approves
(via TPDD tool )

Sponsoring and donations (in cash or in kind)

0-<5K
Approves
(to non-government recipient)
> 5 K - < 100 K
Approves Clears Informed
(to non-government recipient)
0 - < 100 K
Approves Clears Informed
(government recipient)
100 K> - < 1 M
Approves Clears Informed
(all recipients)
>1M
Clears Informed Approves Informed
(all recipients)

(1) For commercial agency and distribution contracts in the ordinary course of the business, refer to the section Commercial
Agreements. © LafargeHolcim 2015 18
(2) Third Party Due Diligence tool accessible via https://tpdd.lafargeholcim.com.
 New

Settlements, Closing of a Site

Head of Group
All Area Manager / Risk Group General Region ExCo
amounts Commitment Threshold Country CEO Management Counsel member Group CFO Group CEO
are in
Settlements (not insurance related, including related litigation matters) for an amount of, or leading to, a financial loss of:
CHF
<2M
Approves

> 2 - < 25 M
Clears Approves Clears

> 25 M
Clears Clears Clears Approves

Settlement agreement with insurers for property, liability and Directors & Officers insurance claims for an amount of:

<2M
Approves Informed

> 2 - < 10 M
Approves Clears Informed Informed

> 10 - < 25 M
Clears Clears Informed Approves

> 25 M
Clears Clears Informed Clears Approves

(1)
Closing of a site or of its activities leading to a possible write-off in non recurring items (based on book value)

<2M
Approves

> 2 - < 25 M
Clears Approves Informed

> 25M
Clears Clears Clears Approves

© LafargeHolcim 2015 19
(1) Plant, production line, office, etc.
 Updated
Investments: Capex to Maintain and to Develop
All Project Com m itm ent Country Country Regional Regional Group Investm ent EXCO CFO EXCO CEO BOD
amounts Size Threshold * Function CEO Function Investm . Function Preparation Mem ber /
Definition Head Head Com m ittee Head Group Area
are in
Manager
CHF, Small <1 M Geocycle:
based on Clears Approves Informed
Approves 1
individual >1 M-<10 M
projects Clears 2 Clears 3 Informed Informed Approves
Medium
threshold >10 M-<20 M
Clears Clears 4 Informed Approves

>20 M-<200 M
Clears 5 Clears Clears Clears Approves

>200 M-<400 M Requires the

Large Clears Clears Clears Approves positive vote
of the CEO
> 400 M
Clears Clears Clears Clears Clears Approves

Authorization rules key notes:

1. For Geocycle projects only: The Regional Function Head to be included jointly with Country CEO. For other projects: The Regional
Function Head is informed only.
2. AGG, RMX projects: In cases where Regions do not have Function Heads in AGG and RMX, the Group Head of Function (HoF) clears
the respective projects from CHF 1 to 10 Mio.
3. Regional Investment Committee(s) assessment and clearance is required for all projects from CHF 1 to 20 Mio.
4. Group Function Head clears medium size projects between CHF 10 to 20 Mio.
5. IPG assessment and clearance is required for all individual projects above CHF 20 Mio

2017-06-06 © 2017 LH © LafargeHolcim 2015 20

 Updated
M&A Size Categorization and Responsibilities
All amounts Criteria Size Categorization
are in CHF,
estimate for A B C
Enterprise Value *
the
> 20 M > 5 M to < 20 M <5M
proposed
transaction
Responsibility Led by Corporate Strategy Led by the Region, signed off by Led by the Country, with support from
and M&A Corporate Finance and must involve the Region and Corporate, as required
Corporate Strategy and M&A

The following rules apply for all Merger & Acquisitions (M&A) transactions within LH Group:
(1) All M&A opportunities and activities must be reported to Corporate M&A*. Corporate M&A informs the Strategy, Legal and Finance
teams at Corporate Level about such potential transactions
(2) Corporate M&A determines the size categorization for each project (based on relevant ExCo Member/OpCo input)
(3) Corporate M&A must be involved in all projects led by the Regions
(4) Corporate M&A can delegate its responsibilities as required
(5) All Financial Investments and M&A transactions are presented to IPG. IPG proposals are subsequently signed off by the CEO and
CFO

* In any event before a non-disclosure agreement ( NDA) is initiated, information is exchanged and any negotiation is initiated.

2017-06-06 © 2017 LH © LafargeHolcim 2015 21

Approval and Versions

This Policy was approved by the Group Executive Committee on April 19, 2017 and will come into force immediately.

Changes this version: Approval levels for Energy (Including Electricity, Gas, Solid Fuels)

Original dated: Revision Dates:

April 15, 2016 April 15, 2016
Version dated: December 8, 2016
June 22, 2017 April 19, 2017
June 22, 2017 (Investments)
Responsible Group Executive Committee Member: Ron Wirahadiraksa, Group CFO
Responsible Person: Atilla Pars, Head Group Internal Control

© LafargeHolcim 2015 22
Appendices

© LafargeHolcim 2015 23
 For information

Procurement
The tables of approval apply to all Purchase and Lease agreements (Capex or Opex):
• Raw materials and industrial goods/equipment purchase contracts (including trucks, heavy mobile equipment, etc.)
• Energy and commodity contracts
• Transportation contracts (shipment contracts, freight)
• IS/IT contracts
• Construction contracts
• Services, audit fees and consulting (in the ordinary course of the business)

Key points:

• The approvals are not focused on transactions, but on total value of contracts or engagements.
• In the absence of a designated global system of contract management, most communications and approvals will be by email
• Signatures on contracts will be physical signatures on documents

• The following slides present two examples highlighting the application of the process
• Both examples presented are in line with existing Procurement thresholds and category management processes

© LafargeHolcim 2015 24
 For information
Procurement Example: Local Contract in India for Coal
Value CHF 800k
Proposed contract (copy) and a Zone Procurement Head
summary are emailed for review and
approval to proceed for signatures
(Clearance)
Proposed Contract
Contract Summary
2

CHF 800k Country CEO

3
Contract
Zone
Actual contract (and a summary if
Category required or requested) is physically
Team signed based on committed value CHF 800k
(Approval)

Category Team
members
1 negotiate contract
for India

Local orders are placed and released

4 according to local policies and
requirements

© LafargeHolcim 2015 25
 For information

Procurement Example: Zone Contract in LatAm for Packaging

Total Value CHF 28m
Proposed contract (copy) and a Global Category Manager
summary are emailed for review and
approval to proceed for signatures
(Clearance) Proposed Contract
2 Contract Summary

CHF 28m

Zone Head of Group

Category Procurement
Team
3 Contract
Actual contract (and a summary if
1 required or requested) is physically
Category Team
signed based on committed value for all
members
participating countries (Approval) CHF 28m
negotiate contract
for countries in
Latam

Local orders and contracts are

approved, placed, and released
4 according to local policies and
requirements in each country

© LafargeHolcim 2015 26
 For information

Terms and definitions

Commitment and Financial Threshold Calculation

For all purchase or sales, the amount of the commitment must:
- Be defined as the amount LafargeHolcim Company is committed to pay, irrespective of an
estimated but uncommitted amount of the contract (which may be higher), and irrespective of
the form (contract, purchase order, etc.);
- Be estimated over the life of the commitment / contract (including for long-term contracts);
- not be discounted whenever spreading over several years (except for changes in employees’
benefits);
- Be valued in EUR/CHF currency. Value denominated in foreign currency must be converted
into EUR/CHF at the last known month-end closing rate; include the valuation of embedded
derivatives (please refer to Financial Instruments Committee in case of doubt).

Series of commitments/purchase orders for the same objective (bundled) are considered as one
single commitment.

© LafargeHolcim 2015 27