18 Mar 2011 13:57
INFORMATION STATEMENT
March 18, 2011
Dear Global Depositary Receipt Holder:
Reference is hereby made to the Amended and Restated Deposit Agreement dated May 10, 2010 (as may be amended from time to time, the "Deposit Agreement") between Bank Audi s.a.l. - Audi Saradar Group (the "Bank") and Deutsche Bank Trust Company Americas, in its capacity as depositary (the "Depositary") relating to Global Depositary Receipts issued in respect of common shares of the Bank (the "GDRs"), each GDR representing one common share of the Bank with a nominal value LL 1,254 per common share (the "Common Shares"). Capitalised terms used herein without otherwise being defined shall have the respective meanings assigned thereto in the Deposit Agreement.
The Depositary, as the shareholder of record of Common Shares evidenced by GDRs, has received notice of the Annual (Ordinary) General Assembly of Shareholders of the Bank to be held on April 4, 2011 (the "General Assembly"), at the Bank's head office in Beirut, which (among other things) sets forth the agenda for such General Assembly. References in this Information Statement (this "Information Statement") to the "Holder" of any GDR shall mean the person registered as a holder on the books of the Depositary. In accordance with Clause 12 of the Deposit Agreement and Condition 23 of the GDRs, a copy of such notice and agenda is being sent hereby to each person who is a Holder on March 18, 2011, which is the record date (the "Record Date") established by the Depositary for this purpose (which is as near as practicable to April 1, 2011, being the corresponding record date set by the Bank in respect of the General Assembly).
As set forth in such notice, at the General Assembly, shareholders of the Bank, including the Depositary, will be asked to consider and vote upon the following agenda:
1. To approve the Bank's accounts, in particular the balance sheet and the profit and loss statement, as of and for the year ended December 31, 2010, and to discharge the Chairman and members of the Board of Directors of the Bank (the "Board of Directors" or the "Board") in respect of activities performed during the year ended December 31, 2010;
2. To appropriate the 2010 profits in accordance with the proposal of the Board of Directors;
3. To declare distributions to the holders of the Bank's preferred shares and dividends to the holders of Common Shares and determine the related record and payment dates;
4. To ratify loans granted during the year 2010 to related parties as per Article 152 of the Code of Money and Credit;
5. To authorise the granting of loans to related parties during the year 2011, in accordance with Article 152 of the Code of Money and Credit;
6. To ratify transactions entered into between the Bank and members of the Board of Directors or affiliated companies during the year ended December 31, 2010 pursuant to Article 158 of the Code of Commerce and to authorise the Bank to enter into similar transactions during the year 2011;
7. To confirm the managerial responsibilities of certain Board members and to determine their fixed and performance-related remuneration in respect of such responsibilities;
8. To authorise the participation of certain Board members in the boards of other companies and to grant the necessary related authorisations pursuant to Article 159 of the Code of Commerce; and
9. To approve the payment of certain fees to Ernst & Young and Semaan, Gholam & Co., the joint external auditors of the Bank (the "External Auditors") for the years 2010 and 2011.
Each Holder is hereby requested to return to the Depositary voting instructions, as provided in this Information Statement, by which such Holder may give instructions to the Depositary to vote for or against each and any resolution specified in such agenda.
After careful consideration, the Board of Directors recommends a vote in favor of each such resolution.
Yours very truly,
Raymond Audi
Chairman - General Manager
Bank Audi s.a.l. - Audi Saradar Group
INFORMATION STATEMENT
Table of Contents
Page
Available Information.......................................................................................................................................................... 3
Voting Rights of Holders..................................................................................................................................................... 3
Summary Background Information.................................................................................................................................... 3
Voting Instructions.............................................................................................................................................................. 5
Information Regarding Bank Audi s.a.l. - Audi Saradar Group.................................................................................... 6
AVAILABLE INFORMATION
No person has been authorised to give any information or to make any representation other than those contained in this Information Statement, and, if given or made, such information or representation must not be relied upon as having been authorised by the Bank. No delivery of this Information Statement nor any offer or distribution of any securities to which this Information Statement relates shall, under any circumstances, create any implication that there has been no change in the affairs of the Bank since the date of this Information Statement or that any information contained or referred to herein is correct as of any time subsequent to the date as of which it is given. This Information Statement does not constitute the solicitation of a proxy to or from any person in any jurisdiction to or from whom it is unlawful to make such offer or solicitation within such jurisdiction.
VOTING RIGHTS OF HOLDERS
In accordance with Condition 12 of the GDRs, the Depositary is seeking voting instructions from the Holders in order to exercise or cause to be exercised the voting rights in respect of the Deposited Shares as directed by such voting instructions to the extent permitted by Lebanese Law.
Common Shares which have been withdrawn from the deposit facility under the Deposit Agreement and transferred on the Bank's register of members to a person other than the Depositary or its nominee may be voted by the registered owner thereof; however, Holders may not receive sufficient advance notice of the General Assembly to enable them to withdraw Deposited Shares and vote at the General Assembly.
SUMMARY BACKGROUND INFORMATION
On January 20, 2011, the Bank released its annual unaudited consolidated financial statements as of and for the year ended December 31, 2010, showing total consolidated (unaudited) profits of LL 531 billion (USD 352 million), total consolidated (unaudited) deposits of LL 37,458 billion (USD 24.8 billion), total consolidated (unaudited) assets of LL 43,255 billion (USD 28.7 billion) and total consolidated (unaudited) equity of LL 3,657 billion (USD 2.4 billion).
On March 12, 2011, the Board of Directors,
(i) Having examined the draft External Auditors report to the General Assembly in connection with the financial statements as of and for the year ended December 31, 2010 and having approved such financial statements;
(ii) Having adopted the "General Report of the Board of Directors" to the General Assembly, which summarises the Bank's activity during the year ended December 31, 2010 (and its major financial indicators), as well as the major developments in the local and regional economies and the Bank's market positioning and strategic choices;
(iii) Having adopted a proposal for the appropriation of the profits realised by the Bank for the year ended December 31, 2010 to be submitted to the General Assembly, such proposal encompassing amongst other things (x) the distribution to holders of Series "D" Preferred Shares (in accordance with their terms) of USD 0.775 per Series "D" Preferred Share aggregating LL 14,604 million (USD 9.7 million), the distribution to holders of Series "E" Preferred Shares (in accordance with their terms) of USD 4 per Series "E" Preferred Share aggregating LL 7,538 million (USD 5 million) and the distribution of dividends to holders of Common Shares (including the Depositary) of LL 603 (USD 0.4) per Common Share aggregating LL 210,132 million (USD 139.39 million) (before deduction of dividends payable on GDRs held in treasury), in each case, on April 6, 2011 to holders of record as at April 1, 2011;
(iv) Having adopted a proposal to ratify transactions entered into between the Bankand members of the Board of Directors or affiliated companies (as referred to in and) pursuant to Article 158 of the Code of Commerce during the year 2010 and to authorise the Bank to enter into similar transactions during the year 2011;
(v) Having, pursuant to the recommendation of the Audit Committee, adopted a proposal to approve the granting of loans to related parties during the year 2011 in accordance with Article 152 of the Code of Money and Credit, aggregating LL 26.4 billion;
(vi) Having adopted a proposal to grant the members of the Board attendance fees aggregating LL 325 million (divided in 13 parts, the Chairman being allocated two parts and each other Director being allocated one part);
(vii) Having approved the payment of additional remuneration to the Chairman and members of the Board who are independent directors, including the Vice-Chairman, (a total of 5 persons) in their capacities as chair or members of the Board committees (Audit Committee, Governance and Remuneration Committee, and Risk Committee), aggregating USD 1.1 million per annum;
(viii) Having confirmed the managerial responsibilities of the Executive Directors;
(ix) Having, pursuant to article 158 of the Code of Commerce, approved the payment of fixed remuneration in 2010 aggregating LL 15.9 billion (USD 10.5 million) to 12 persons (including the current and previous Chairmen of the Board, the Executive Directors and the General Managers who are not members of the Board of Directors);
(x) Having adopted a proposal to confirm the resolution of the Annual (Ordinary) General Assembly dated April 2010 granting the Chairman of the Board and the Executive Directors an annual performance-related cash remuneration amounting in aggregate to 3.35% of the Bank's consolidated net profits before taxes for the financial years 2010 to 2013, inclusive;
(xi) Having noted that the Corporate Governance and Remuneration Committee made no reservations or comments in connection with the aforementioned remuneration related proposals;
(xii) Having adopted a proposal to authorise the participation of certain Board members in the boards of controlled subsidiaries;
(xiii) Having, pursuant to the matters mentioned under points (iv) to (xii) above, adopted the "Special Report of the Board of Directors" produced in accordance with Article 152 of the Code of Money and Credit and Article 158 of the Code of Commerce and summarising (x) the transactions entered into by the Bank with related parties (including affiliated companies and members of the Board of Directors) during the year ended December 31, 2010 and (y) the remuneration of the members of the Board and of the General Managers; and
(xiv) Having adopted the recommendation of the Audit Committee to (x) set the fees of the External Auditors at USD 800,000 (USD 400,000 to each auditing firm) for the year 2011, (y) grant the Audit Committee the authority to approve additional fees of up to 15% of said amount of fees for the annual audit work in order to accommodate the Bank's need for additional audit work should such need arise and (z) ratify the payment to the External Auditors in 2010 of additional fees amounting to USD 75,000 (USD 37,500 to each auditing firm) for (a) their review and validation of the offering circular relating to the USD 125 million Series E Preferred Shares and of the prospectus relating to the Admission to Listing on the Official List and to Trading on the London Stock Exchange of up to 344,189,410 GDRs, and (b) the issuance of letters of comfort in connection with the above.
Resolved to recommend to the General Assembly to adopt the following resolutions:
1. To approve the Bank's accounts, in particular the balance sheet and the profit and loss statement, as of and for the year ended December 31, 2010, and to discharge the Chairman and members of the Board of Directors in respect of activities performed during the year ended December 31, 2010;
2. To appropriate the 2010 profits in accordance with the proposal of the Board of Directors;
3. To declare distributions to the holders of the Bank's preferred shares and dividends to the holders of Common Shares and determine the related record and payment dates;
4. To ratify loans granted during the year 2010 to related parties as per Article 152 of the Code of Money and Credit;
5. To authorise the granting of loans to related parties during the year 2011, in accordance with Article 152 of the Code of Money and Credit;
6. To ratify transactions entered into between the Bank and members of the Board of Directors or affiliated companies during the year ended December 31, 2010 pursuant to Article 158 of the Code of Commerce and to authorise the Bank to enter into similar transactions during the year 2011;
7. To confirm the managerial responsibilities of certain Board members and to determine their fixed and performance-related remuneration in respect of such responsibilities;
8. To authorise the participation of certain Board members in the boards of other companies and to grant the necessary related authorisations pursuant to Article 159 of the Code of Commerce; and
9. To approve the payment of certain fees to the External Auditors for the years 2010 and 2011.
All, as per the aforementioned Board reports, proposals and recommendations.
On March 17, 2011, the External Auditors issued (i) their unqualified opinion on the financial statements of the Bank as of and for the year ended December 31, 2010 and (ii) their special reports in connection with Article 152 of the Code of Money and Credit and Article 158 of the Code of Commerce, pursuant to which the External Auditors (x) noted that loans granted by the Bank to related parties during the year ended December 31, 2010 are in compliance with the ceilings imposed by Article 152 of the Code of Money and Credit, and (y) did not express any remarks in connection with Article 158 of the Code of Commerce.
VOTING INSTRUCTIONS
Each Holder is hereby requested to return to the Depositary voting instructions, in the form provided separately by the Depositary for this purpose, by which such Holder may give instructions to the Depositary to vote for or against each and any resolution specified in the agenda for the General Assembly.
In order for a voting instruction to be valid, the above-mentioned form of voting instructions must be completed and duly signed by the respective Holder (or in the case of instructions received from the clearing systems should be received by authenticated SWIFT message or market standard authenticated message format) and returned to the Depositary by the date that the Depositary shall specify in such form of voting instructions.
BANK AUDI S.A.L. - AUDI SARADAR GROUP
For information regarding the Bank, Holders are advised to consult the following documents:
- The Bank's Annual Report for 2009;
- The audited financial statements of the Bankas of and for the year ended December 31, 2010 and the accompanying notes and auditors report; and
- The report of the Board of Directors about the Bank's activity during the year ended December 31, 2010.
The above documents (in Arabic or English, or both, as the case may be) may be obtained free of charge from the Bank and the Depositary at the addresses set forth below:
The Depositary:
Deutsche Bank Trust Company Americas
Winchester House
1 Great Winchester Street
London EC2N 2DB
Attn: Mr. Stanley Jones
The Bank:
Bank Audi s.a.l. - Audi Saradar Group
Bab IdrissOmar Daouk StreetBanque Audi Plaza, P.O. Box 11-2560BeirutLebanon
Attn: The Corporate Secretary