7 Apr 2009 08:47
INFORMATION STATEMENT
April 6, 2009
Dear Global Depositary Receipt Holder:
Reference is hereby made to the Deposit Agreement dated 23 October 1997 (as amended, the "Deposit Agreement") between Bank Audi S.A.L. - Audi Saradar Group (as successor to Banque Audi S.A.L.) (the "Company") and Deutsche Bank Trust Company Americas, in its capacity as depositary (the "Depositary") relating to Global Depositary Receipts issued in respect of shares of the Company ("GDRs"), each GDR representing one common share, nominal value LL 11,000 per share (the "Shares"), of the Company. Capitalized 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 Shares evidenced by GDRs, has received notice of the Annual (Ordinary) General Assembly of Shareholders of the Company to be held on April 21, 2009 (the "General Assembly"), at the Company's head office in Beirut, which (among other things) sets forth the agenda for such Assembly. References in 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 April 6, 2009, which is the record date (the "Record Date") established by the Depositary for this purpose (which is as near as practicable to April, 16, 2009, being the corresponding record date set by the Company in respect of the General Assembly).
As set forth in such notice, at the General Assembly, shareholders of the Company, including the Depositary, will be asked to consider and/or vote upon the following agenda:
To listen to the reports of the Board of Directors and of the External Auditors in connection with the activity and financial accounts of the Company for the year 2008;
To approve the Company's accounts, in particular the balance sheet and the profit and loss statement as of and for the year ended December 31, 2008, and to grant discharge to the Chairman and members of the Board of Directors in respect of activities performed during the year ended December 31, 2008;
To appropriate the 2008 profits in accordance with the proposal of the Board of Directors, and to declare distributions to the holders of preferred shares and dividends to the holders of ordinary shares;
To ratify transactions entered into between the Company and members of the Board of Directors during the year ended December 31, 2008 pursuant to Article 158 of the Code of Commerce and Article 152 of the Code of Money and Credit, and to grant the necessary waivers pursuant to the above-mentioned Articles, as well as Article 159 of the Code of Commerce, and to allow the Company to enter into similar transactions during the coming year;
To approve the remuneration of the External Auditors;
To approve the transfer of an amount equivalent to up to LL 150 Billion from the "Issue Premium" account to the "free reserves" account; and
To approve other matters relating to above mentioned subjects.
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,
Georges Gedeon Achi
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
Description of certain accounts 5
Voting Instructions 5
Information regarding Bank Audi S.A.L - Audi Saradar Group. 6
AVAILABLE INFORMATION
No person has been authorized 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 Company. 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 Company 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 Deposit Agreement relating to 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.
Shares which have been withdrawn from the depositary facility and transferred on the Company'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 the shares and vote at the Assembly.
SUMMARY BACKGROUND INFORMATION
On January 30, 2009, the Company released its annual unaudited consolidated financial statements as of and for the year ended December 31, 2008, showing total consolidated (unaudited) profits of LL 359.5 billion (USD 238.5 million), total consolidated (unaudited) deposits of LL 26,031 billion (USD 17.3 billion), total consolidated (unaudited) assets of LL 30,771 billion (USD 20.4 billion) and total consolidated (unaudited) equity of LL 2,956 billion (USD 1.9 billion).
On April 2, 2009, Ernst & Young and Semaan, Gholam & Co., the joint external auditors of the Company (the "External Auditors"), concluded their audit of the standalone (unconsolidated) financial statements of the Company as of and for the year ended December 31, 2008 and delivered their final opinion that such financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2008 and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.
The accounts show, in particular, that the balance of the Common Shares Issue Premium Account of the Company was LL 1,073 billion and the balance of the General Reserve Account of the Company was LL 24.4 billion as of December 31, 2008 as compared to LL 1,013 billion and LL 13.4 billion, each respectively, as of December 31, 2007 (See "Description of Certain Accounts") .
On April 2, 2009, the Board of Directors of the Company,
Having examined the External Auditors report to the General Assembly in connection with the standalone financial statements as of and for the year ended December 31, 2008 and having approved such standalone financial statements;
Having adopted the "General Report of the Board of Directors" to the General Assembly, which summarizes the Company's activity during the year ended December 31, 2008 (and its major financial indicators), as well as the major developments in the local and regional economies and the Company's market positioning and strategic choices;
Having adopted a proposal for the appropriation of the profits released by the Company for the year ended December 31, 2008 to be submitted to the General Assembly;
Having 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 summarizing the transactions entered into by the Company with related parties (including affiliated companies and members of the Board of Directors of the Company) during the year ended December 31, 2008 and the remuneration of the members of such Board and the members of the Executive Committee of such Board;
Having examined the report of the External Auditors in connection with Article 152 of the Code of Money and Credit and Article 158 of the Code of Commerce (said reports confirm that (x) loans granted by the Company to related parties during the year ended December 31, 2008 are in compliance with the ceilings imposed by Article 152 of the Code of Money and Credit, and (y) the External Auditors do not express any remarks in connection with the Article 158 of the Code of Commerce);
Having adopted a recommendation of the Audit Committee to (x) approve the payment of fees to the External Auditors amounting to USD 750,000 annually (USD 375,000 to each auditing firm) for the years 2008 and 2009 and (y) to grant the Audit Committee the authority to approve additional fees of up to 15% of said amount on account of the 2009 audit work in order to accommodate the Company's need for additional audit work should such need arise; and
Having determined that it is in the best interests of the Company to increase its free reserves by transferring an amount of LL 150 billion from the Common Shares issue premium Account to the General Reserves Account (a component of the Company's free reserves), after considering the following:
i. the Company intends to redeem and cancel the outstanding 4,000,000 Series "C" Preferred Shares (the "Series C Preferred Shares"), which will require the utilization of LL 44 billion out of the General Reserves Account representing the nominal value of such shares, with the balance of the amount to be paid to holders to be withdrawn from the Preferred Shares Issue Premium Capital Account;
ii. the Company wishes to have the capacity to intervene in the capital markets, with the aim of reducing the volatility of the Company's share price, with such intervention generally taking the form of the Company purchasing Common Shares or GDRs in the open market (to the extent practicable and subject to applicable law and regulatory authorizations), which requires the availability of sufficient Free Reserves;
iii. in anticipation of (a) the Company's redemption of its Series C Preferred Shares and (b) the Company's desire to improve its capacity to purchase treasury stock, the Central Bank of Lebanon and the Lebanese Banking Control Commission have recommended that the Company strengthen its Free Reserves;
Convened the General Assembly to consider the following:
To listen to the reports of the Board of Directors and of the External Auditors in connection with the activity and financial accounts of the Company for the year 2008;
To approve the Company's accounts, in particular the balance sheet and the profit and loss statement as of and for the year ended December 31, 2008, and to grant discharge to the Chairman and members of the Board of Directors in respect of activities performed during the year ended December 31, 2008;
To appropriate the 2008 profits in accordance with the proposal of the Board of Directors, and to declare distributions to the holders of preferred shares and dividends to the holders of ordinary shares;
To ratify transactions entered into between the Company and members of the Board of Directors during the year ended December 31, 2008 pursuant to Article 158 of the Code of Commerce and Article 152 of the Code of Money and Credit, and to grant the necessary waivers pursuant to the above-mentioned Articles, as well as Article 159 of the Code of Commerce, and to allow the Company to enter into similar transactions during the coming year;
To approve the remuneration of the External Auditors;
To approve the transfer of an amount equivalent to up to LL 150 Billion from the "Issue Premium" account to the "Free Reserves" account; and
To approve other matters relating to above mentioned subjects.
Description of certain accounts
The "Equity" of the Company comprises, among others, the following accounts:
the "Common Shares Issue Premium Account", which is an equity account established to account for the issue of new Common Shares at a price above their nominal value. This account is credited upon each capital increase undertaken by the Company through the issuance of new Common Shares, with the amount credited, in each case, representing the difference between (i) the price at which the new Common Shares are issued and (ii) the nominal value of the then existing Common Shares. By virtue of applicable Lebanese legislation, any transaction affecting the Common Shares Issue Premium Account requires the preliminary authorization of the General Assembly of Shareholders; and
"Free Reserves", which encompass several reserves accounts, including the "General Reserves Account"
the "General Reserves Account", which is an equity account comprising part of Free Reserves that may be used by the Company to effect capital related transactions (such as the redemption of the Company's preferred shares or the purchase of treasury stock) and to provide for unexpected risks.
VOTING INSTRUCTIONS
Each Holder is hereby requested to return to the Depositary voting instructions, in the form provided separately by the Depository 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 voting instructions form 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.
BANK AUDI S.A.L. - AUDI SARADAR GROUP
For information regarding the Company, Holders are advised to consult the following documents:
The Company's Annual Report for 2007;
The standalone (unconsolidated) audited financial statements of the Company as of and for the year ended December 31, 2008 and the accompanying notes and auditors report; and
The report of the Board of Directors about the Company's activity during the year ended December 31, 2008.
The above documents (in Arabic or English, or both, as the case may be) may be obtained free of charge from the Company 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 Compnay:
Bank Audi S.A.L. - Audi Saradar Group
Bab Idriss Omar Daouk Street Banque Audi Plaza, P.O. Box 11-2560 Beirut Lebanon
Attn: The Corporate Secretary