24 Mar 2017 07:01
BANK AUDI S.A.L.
Bab Idriss - Omar Daouk StreetBank Audi Plaza, P.O. Box 11-2560Beirut - Lebanon
INFORMATION STATEMENT
March 24, 2017
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. (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, nominal value L.L. 1,656 per common share (the "Common Shares"). 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 Common Shares evidenced by GDRs, has received notice of the Ordinary General Meeting of the Shareholders of the Bank to be held on April 10, 2017 (the "General Meeting"), at the Bank's head office in Beirut, which (among other things) sets forth the agenda for such General Meeting. References in this Information Statement (this "Information Statement") to the "Holder" of any GDR shall mean the person registered as the holder of such GDR on the books of the Depositary. In accordance with Clause 13 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 24, 2017, which is the record date (the "Record Date") established by the Depositary for this purpose (which is as near as practicable to April 7, 2017, being the corresponding record date set by the Bank in respect of the General Meeting).
As set forth in such notice, at the General Meeting, 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, 2016, and to discharge the Chairman and members of the Board of Directors of the Bank in respect of activities performed during the year ended December 31, 2016;
2. To appropriate the 2016 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 2016 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 2017, in accordance with Article 152 of the Code of Money and Credit;
6. To ratify transactions that are subject to the approval of the General Meeting including transactions entered into between the Bank and members of the Board of Directors or affiliated companies during the year ended December 31, 2016 that are subject to Article 158 of the Code of Commerce and to authorise the Bank to enter into similar transactions during the year 2017;
7. To note the changes in the Board of Directors and to elect new members;
8. To confirm the managerial responsibilities of certain Board members and to determine their fixed and performance-related remuneration in respect of such responsibilities, and to determine the remuneration of the other members of the Board;
9. 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
10. To determine the External Auditors' fees for the year 2017.
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 favour of each such resolution.
Yours very truly,
Raymond Audi
Chairman - General Manager
Bank Audi
INFORMATION STATEMENT
Table of Contents
Page
AVAILABLE INFORMATION………………………………..........…….......………………………………………….3
VOTING RIGHTS OF HOLDERS…………………………………..........….......………………………………………3
SUMMARY BACKGROUND INFORMATION………………………….................……………………………….....3
VOTING INSTRUCTIONS……………………………………………………….................……………………………7
INFORMATION REGARDING BANK AUDI S.A.L………………………………….................…………………….8
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 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 Meeting to enable them to withdraw Deposited Shares and vote at the General Meeting.
SUMMARY BACKGROUND INFORMATION
On March 20, 2017, the Board of Directors of the Bank (the "Board of Directors" or the "Board"),
(i) Having examined the draft External Auditors report to the General Meeting in connection with the financial statements as of and for the year ended December 31, 2016, encompassing the External Auditors qualified opinion;
(ii) Having, in consideration of the fact that the External Auditors qualification relates to the accounting, by the Bank, of certain gains, as directed by applicable Lebanese regulation (notably Central Bank of Lebanon's Intermediate Circulars No. 439 dated 8 November 2016), which departs from the requirements of International Financial Reporting Standards (Holders are advised to review the Bank's Annual Report for 2016 encompassing the Audited financial statements of the Bank and the accompanying notes and auditors' report) resolved to approve the financial statements;
(iii) Having adopted the 2016 Annual Report encompassing the "Management Discussion and Analysis", which summarises the Bank's activity during the year ended December 31, 2016 (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;
(iv) Having adopted a proposal for the appropriation of the profits realized by the Bank for the year ended December 31, 2016 to be submitted to the General Meeting, such proposal encompassing amongst other things the distribution to holders of Preferred Shares (in accordance with their terms) of :
- USD 6 per Series "F" Preferred Share (aggregating LL 13,568 million (USD 9 million)),
- USD 6 per Series "G" Preferred Share (aggregating LL 13,568 million (USD 9 million)),
- USD 6.5 per Series "H" Preferred Share (aggregating LL 7,349 million (USD 4.9 million)),
- USD 3 per Series "I" Preferred Share (aggregating LL 11,306 million (USD 7.5 million)),
and the distribution of dividends to holders of Common Shares (including the Depositary) of LL 753.75 per Common Share (aggregating LL 301,311 million (USD 199.9 million)), in each case, on April 18, 2017 to holders of record as at April 13, 2017;
(v) Having examined the draft External Auditors special reports in connection with outstanding loans to related parties subject to Article 152 of the Code of Money and Credit ("Article 152 Loans") pursuant to which the External Auditors confirmed that loans granted by the Company to related parties during the year ended December 31, 2016 are within applicable legal and regulatory ceilings, and having thus adopted a proposal to ratify the "Article 152 Loans" granted during 2016 as shown in the following table:
Loans to related parties Amounts in billions of LL (as per Article 152 of the Lebanese Code of Money and Credit) | ||
Total Gross Amount | 165 |
|
Out of which | 116 | Covered by cash collateral in the same currency as the related loan |
Total Amount net of cash collateral | 49 |
|
Out of which | 36 | Housing loans covered by first degree mortgages on independently evaluated homes and bearing terms and conditions that are in line with the industry practice and compliant with applicable regulations. |
| 1 | Car loans covered by liens on independently evaluated cars and bearing terms and conditions that are in line with the industry practice and compliant with applicable regulations. |
Total Amount net of cash collateral, housing loans and car loans | 13 |
|
Out of which | 6 | Covered by real estate mortgages with a sufficient coverage in compliance with applicable regulation and market practice. |
Total Net Amount of loans to related parties | 7 | Approved by the Board and granted to Senior managers or executive directors (none of whom is one of the non-executive members of the Board). |
(vi) Having, in consideration of the fact that the aforementioned loans are within applicable legal and regulatory ceilings, adopted a proposal to approve the maintenance of the aforementioned Article 152 Loans during 2017;
(vii) Having examined the draft External Auditors special reports in connection with Article 158 of the Code of Commerce, pursuant to which the External Auditors did not express any remarks in connection with transactions entered into between the Bank and members of the Board of Directors or affiliated companies;
(viii) Having adopted a proposal to ratify transactions entered into between the Bank and members of the Board of Directors or affiliated companies during 2016 (by virtue of the authorization granted by the general meeting of shareholders on 8 April 2016, and pursuant to Article 158 of the Code of Commerce), such transactions encompassing, in essence (after deduction of dealings with Consolidated Banks, Financial institutions, or Subsidiaries), the following 6 transactions, all of which entered into at arm's length and duly approved by the Board of Directors:
- Acquisition of insurance services and bancassurance (insurance products bundled with banking products sold to the bank's customers) from "LiA insurance", a company that is 17% owned by Bank Audi (and where Bank Audi has nominated one of its own directors on the Board) (Total amount of premiums and fees paid in 2016 aggregate 12.3 billion LBP (USD 8.1 million);
- Provision of loans and financial services to "PinPay s.a.l" (a provider of payment solutions to Bank Audi and to other Lebanese banks and that is 37% owned by Bank Audi) aggregating 0.8 billion LBP (USD 0.5 million) and the charging of interest on said loans;
- The acquisition of fixed assets, for 5.1 billion LBP (3.3 million USD), and of services for 1 billion LBP (0.7 million USD) from Capital Outsourcing s.a.l. a company related to a member of the family of the Group CEO;
- The sale of the Bank's participation in the National Bank of Sudan to Fondal Ltd., a company related to one of the members of the Board of Directors ; (Holders are advised to review the notes to the Consolidated Financial Statements for more information)
- The rent of a branch from a person related to one of the members of the Board of Directors, for 0.1 billion LBP annually (0.07 million USD)
- Donation to a cultural foundation bearing the Bank's name (the "Audi Foundation") whose managing board comprises a number of the Bank's Directors and executives, for 0.8 billion LBP (0.6 million USD);
- And other miscellaneous transactions aggregating 0.10 billion LBP (0.06 million USD)
(ix) Having adopted a proposal to authorize the Bank to enter into similar transactions during 2017 (until the next annual ordinary general meeting expected to be held in April 2018)
(x) Having, pursuant to Article 158 of the Code of Commerce, approved (by virtue of the authorization granted by the general meeting of shareholders on 8 April 2016) (i) the payment of fixed remuneration in 2016 aggregating LL 15.8 billion (USD 10.5 million) to 7 persons (including the current Chairman of the Board, the Executive Directors and the members of the Executive Committee who are not members of the Board of Directors); and (ii) the payment of a performance-related remuneration to the Directors members of the Executive Committee (4 persons) representing 2.4% of the Bank's consolidated net profits before taxes, all aggregating LL 23.7 billion (USD 15.7 million), and (iii) the payment of an advance on end of service indemnities to the Chairman of the Board and to the Group CEO aggregating 14.2 billion LBP (9.4 million USD);
(xi) Having noted the intention of the Chairman of the Board of Directors, Mr. Raymond Audi, 84, to stand down from the Board of Directors, at the conclusion of the General Assembly (Mr. Raymond Audi having served as Director of the Company since its incorporation in 1962, and wishing to retire from his corporate responsibilities in order to devote more time to his personal life),
and having nominated the below-named candidates for the remainder of the term of office of the current Board of Directors, in line with the recommendation of the Corporate Governance and Nomination Committee (the Board having expressed its satisfaction that it benefits, as a collective body, and with the inclusion of the new nominated candidates, from, an adequate superior knowledge of the financial industry and an excellent understanding of the Company's client base and of the main geographic markets in which the Company is active and that all the candidates have a reputation and track record that demonstrate their ability to make the kind of important and sensitive judgments that the Board is called upon to make):
Candidate | Brief Profile |
Aristidis Vourakis Age: 41 - Greece General Manager - Group Deputy Chief Executive Officer - Bank Audi sal
| Aristidis Vourakis has recently joined the Bank as Group Deputy Chief Executive Officer.
He joined Bank Audi after 19 years with J.P. Morgan, where he was Managing Director leading J.P. Morgan team focusing on Financial Institutions in Central Eastern Europe, Middle East, and Africa. He was also JPMorgan's Senior Country Officer for Greece and Cyprus. Based out of London, Aristidis Vourakis has led a large number of capital raising, funding and IPO transactions for credit institutions across Europe, and managed the development and implementation of regional expansion strategies and group reorganisations. He has also supported a number of Greek companies and the sovereign itself, in accessing international capital markets following the sovereign debt restructuring in 2012.
Aristidis Vourakis holds an M.Sc. In Accounting and Finance with distinction from the London School of Economics and Political Science.
|
Sherine R. Audi Age: 57 - Lebanon General Manager and Board Member of Bank Audi France
| Sherine Audi is the General Manager of Bank Audi France s.a. ("BAF"), the French subsidiary of the Bank.
She started her Banking career in 1980 at BAF, now a fully owned subsidiary of Bank Audi s.a.l. . She held several positions there, including in credit, business development, operations and administration, while gradually climbbing the corporate ladder. She was appointed assistant General Manager in 1995, then executive director in 2000, and Director - General Manager since 2010. In this capacity, she is now in charge of the development and implementation of the bank's strategy, as approved by the Board. She heads all the executive aspects of BAF's activity and drives its strategic transformations (including technological and regulatory ones) as required by the current market rules and practices.
She also acts as the bank's representative towards the French banking authorities and professional organizations.
Sherine Audi is a Certified Professional Banker (BP de Banque) and a Certified Director (by Sciences Po. Paris., jointly with the French Institute of Directors)
|
Carlos A. Obeid Age: 52 - Lebanon Group Chief Financial Officer of Mubadala Investment Company
Member of the Baord of Directors of Mubadala GE Capital PSC
| Carlos Obeid is the Group Chief Financial Officer of Mubadala Investment Company, the 120 billion USD entity resulting from the merger of International Petrolium Investments Co and Mubadala Development Company in Abu Dhabi, UAE.
In this position, he is responsible for the provision of specialist advisory and transactional services across the organization and its related companies (Project & Corporate Finance, Treasury, Financial Planning & Business Performance, Mergers and Acquisitions). He is also responsible for and established group governance guidelines for investee companies across finance and other functions.
He was responsible for the preparation of 5-year strategic plans, the identification of value enhancing opportunities, and provided valuation assessment for all investments. He has automated all finance systems with Oracle ERP, Hyperion Consolidation and Budgeting and Planning, Quantum Treasury systems, thereby reducing regulatory reporting timelines as well as budget cycle times. He managed the initial credit rating process and subsequent credit rating reviews, raised over 5 billion USD in corporate bonds and over 2.5 billion USD in project bonds, established a Commercial Paper program for Mubadala and raised over 12 billion USD in project finance.
As member of the Investment Committee, he reviewed and decided on capital deployments totalling over 35 billion USD. He has also been Chairman or member of the boards and various committees of many related companies or Joint Ventures in fields ranging from Energy, to Financial Services, Real Estate, Hospitality, Technology, and Healthcare. He was responsible for the strategic steering and guidance, for senior leadership recruitment and assessment, and where applicable establishing them, or restructuring or realigning their business. (Listed companies: include ALDAR and Waha CapitaL Joint Ventures: Mubadala-GE Capital, Capitala, Viceroy Hotel Group. Wholly owned entities: Cleveland Clinic Abu Dhabi, Yahsat, Global Foundries, Masdar).
Carlos Obeid holds an MBA degree from INSEAD (1991 ), and a Bachelor of Electrical Engineering from AUB (1986).
|
(xii) Having confirmed the managerial responsibilities of the Executive Directors and having adopted a proposal to:
a. Confirm the resolution of the Annual Ordinary General Assembly dated 14 April 2014 granting the Executive Directors an annual performance-related cash remuneration not exceeding 2.4% of the Bank's consolidated net profits before taxes for the financial years 2014 to 2017 inclusive; and
b. Maintain the fixed remuneration arrangements of the Executive Directors and the General Managers members of the Executive Committee who are not members of the Board of Directors unchanged from the previous year;
(xiii) Having, pursuant to Article 158 of the Code of Commerce, adopted a proposal to note the implementation and maintain unchanged the additional annual remuneration to the Chairman and to the members of the Board who are non-executive and/or independent directors, including the non-executive Vice-Chairman (a total of 5 persons), aggregating USD 2.3 million per annum (i) for their chairmanship or membership of certain Board committees (the Audit Committee, the Governance and Nomination Committee, the Remuneration Committee and the Risk Committee), and/or (ii) for their assistance to the Board and its committees (and to the boards of banking subsidiaries and their committees) including in control and governance oversight matters and in risk oversight matters;
(xiv) Having adopted a proposal to grant the members of the Board annual attendance fees of LL 50 million each (LL 25 million in 2016) the Chairman of the Board being allocated two parts and each other Director being allocated one part;
(xv) Having adopted a proposal to authorize the participation of certain Board members in the boards of controlled subsidiaries of the Bank, and in the Boards of certain non-competing financial institutions;
(xvi) Having, pursuant to the matters mentioned under points (iv) to (xiv) 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 summarizing (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, 2016 and (y) the remuneration of the members of the Board and of the General Managers who are members of the Executive Committee; and
(xvii) Having adopted the recommendation of the Audit Committee to set audit fees for "BDO, Semaan, Gholam & Co." and "Ernst & Young" being joint External Auditors of the Company for the financial year ending December 31, 2017 at USD 1,350,000 (USD 675,000 to each auditing firm) (unchanged with respect to 2016).
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, 2016, and to discharge the Chairman and members of the Board of Directors of the Bank in respect of activities performed during the year ended December 31, 2016;
2. To appropriate the 2016 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 2016 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 2017, in accordance with Article 152 of the Code of Money and Credit;
6. To ratify transactions that are subject to the approval of the General Meeting including transactions entered into between the Bank and members of the Board of Directors or affiliated companies during the year ended December 31, 2016 that are subject to Article 158 of the Code of Commerce and to authorise the Bank to enter into similar transactions during the year 2017;
7. To note the changes in the Board of Directors and to elect new members;
8. To confirm the managerial responsibilities of certain Board members and to determine their fixed and performance-related remuneration in respect of such responsibilities, and to determine the remuneration of the other members of the Board;
9. 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
10. To determine the External Auditors' fees for the year 2017.
All as per the aforementioned Board reports, proposals and recommendations.
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 Meeting.
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.
INFORMATION REGARDING BANK AUDI S.A.L.
For information regarding the Bank, Holders are advised to review the following documents:
- The Bank's Annual Report for 2016 encompassing:
o The Audited financial statements of the Bank as of and for the year ended December 31, 2016 and the accompanying notes and auditors' report;
o The "Management Discussion and Analysis" which summarizes the Bank's activity during the year ended December 31, 2016.
The above documents (in Arabic or English, or both, as the case may be) can be downloaded from Bank Audi's website: www.bankaudigroup.com or 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: Ms. Katia Levy-Thevenon
The Bank:
Bank Audi s.a.l.
Bab IdrissOmar Daouk StreetBank Audi Plaza, P.O. Box 11-2560BeirutLebanon
Attn: The Group Corporate Secretary
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