J UICIOS DE CONFIANZA

2014 2013 PPF Group holding 86.62% 86.62% Operating income (EUR millions) 1,943 2,542 Net profit (EUR millions) (60) 324 Total assets (EUR millions) 7,037 9,313 Total equity (EUR millions) 1,239 1,532 Number of employees at year end 58,300 51,400

Established in 1997, Home Credit Group (also referred to as “Home Credit”) focuses on the responsible provision of consumer financing, primarily to people with little or no credit history. The group is based on the concept of “inclusive” financial services, i.e. it is open to doing business with those who, for whatever reasons, do not have access to the regulated financial sector. It provides these customers with a positive experience, and for many it is their first loan ever. Home Credit helps these people, who have been disregarded by banks, to satisfy their financial needs and improve their standard of living. Home Credit’s services are simple, easy to understand, and quick. This sets the group’s offering apart from the competition and has made it a leader in a number of local markets in Europe and Asia.

The majority shareholder (with an 86.62% stake) of Home Credit B.V. is PPF Group N.V. A minority (13.38%) stake in Home Credit B.V. (also referred to as “HCBV”) is held by EMMA OMEGA LTD, an investment holding company whose ultimate owner is Jiří Šmejc.

Home Credit Group operates in emerging markets whose local regulatory environments make them difficult to penetrate. Currently, Home Credit is active in the Czech Republic (since 1997), Slovakia (since 1999), Russia (since 2002), Kazakhstan (since 2005), Belarus (since 2007), China (since 2007), India (since 2012), Indonesia (since 2013), the Philippines (since 2013), and Vietnam (since 2014). In all of these countries, it is subject to supervision by the central financial sector authorities.

Home Credit Group focuses on providing consumer financing through a diverse distribution network. The foundation is Point Of Sale (POS) lending, i.e. provision of loans directly in retail establishments, where Home Credit finances purchases of durable consumer goods – always in the domestic currency. In countries where Home Credit has obtained a banking licence, it also offers banking transactions to private individuals and accepts deposits, which are an important source of financing for its lending operations. The group’s product portfolio differs from country to country, and develops as each market matures – in line with the changing needs of customers.

Home Credit has served 44.4 million customers to date. Its 58,300 employees work in a wide‑ranging distribution network consisting of 166,272 retail stores, lending offices, and branches; Home Credit’s services are also available at post offices (data as of December 31, 2014).

In 2014 Home Credit Group addressed the difficult challenges posed by the market through swift and effective action. The worsening macro environment and geopolitical uncertainty in Russia in 2014 impacted the overall Group’s performance, resulting in a net loss for the year.

In Russia, Home Credit maintained its policy – established over a year ago in response to the 2013 credit boom – to tighten lending criteria and reduce loan volumes. Thanks to the experience gained during the previous economic crisis in Russia and with the support of its shareholders, Home Credit’s management team has responded adequately and maintained a solid position for the future.

Asia has continued to perform well, justifying the decision to diversify into these fast‑growth markets and reduce the significance of Russia in the overall figures. Incorporating the Vietnamese business into operations in 2014 also provided a positive impact.

In the third quarter of 2014 HCBV acquired businesses in China and Vietnam (Home Credit Consumer Finance China Ltd. and PPF Vietnam Finance Company (LLC), the latter subsequently renamed to Home Credit Vietnam Finance Company Limited) from PPF and both companies were consolidated into HCBV’s financial results from the date of acquisition.

Home Credit Group is aware of its responsibility toward its customers for whom – outside of advanced markets – this is often their first loan and who have no prior experience with financial institutions. Therefore, Home Credit has implemented a wide‑ranging set of initiatives to help improve people’s financial literacy while respecting cultural and social differences in each local market. In cooperation with regulators and other institutions, Home Credit Group is focusing on helping people to correctly take account of their expenses and needs, and therefore learn to borrow responsibly. Tools include seminars held in shopping centers and town halls, richly illustrated learning brochures, explanatory articles in periodicals and newspapers, as well as educational activities on social networks, publishing of information on websites, and special computer applications. In the several languages of its local markets, the Group has also published a picture textbook for parents and school children with texts and case studies highlighting various situations in life that are often associated with major financial decisions. Home Credit is involved in these publishing activities either in cooperation with, or under the patronage of, national financial market regulators and in accordance with G20 recommendations.

Home Credit also puts considerable efforts into ensuring that its products are transparent and straightforward for customers to understand. In all markets, regardless of whether local regulations require it or not, the group has imposed a minimum 14‑day “cool‑off period” during which the customer can change his or her mind and return the loan, free of charge and with no strings attached, without incurring any interest or fees. In certain countries, with regard to local customs, the group has a customer ombudsman watching over the sales and post‑sales service processes to ensure compliance with the Customer Charter – a set of voluntary transparent, and responsible lending pledges.

44 Annual Report 2014

PPF Group companies employ