Document de référence. English version

Transcription

1 Document de référence English version 2006

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3 MAROC TELECOM Société Anonyme de droit marocain au capital de dirhams Head Office: Avenue Annakhil Hay Riad Rabat Morocco RCS Rabat REGISTRATION DOCUMENT This Registration Document in English is a translation of the French «Document de référence» for information purposes. This translation is qualified in its entirety by reference to the «Document de référence». Pursuant to Article , of the Financial Market Authority s Regulation this Registration Document was filed on May 9, 2007 under No. R It may not be used in support of a financial transaction unless it is accompanied by a transaction note endorsed by the Financial Market Authority. This Registration Document was drawn up by the issuer and engages the responsibility of its signatories. This registration in compliance with Article L I of the Monetary and Financial Code, was carried out after examination of the relevance and consistency on the information provided on the company s situation and does not imply authentication by the AMF of the accounting and financial elements presented. In application of Article 28 of European Commission Regulation 809/2004/EC, the following information is included by reference in this Registration Document: the 2004 Consolidated financial statements and the corresponding Statutory Auditors report are presented on pages 83 and following and page 105 of the Registration Document filed with the AMF on March 30, 2005 under No. R ; the 2004 Company financial statements and the corresponding Statutory Auditors reports on pages 106 and following and page 116 of the Registration Document registered with the AMF on March 30, 2005 under No. R ; the 2005 Consolidated financial statements and the corresponding Statutory Auditors report are presented on pages 88 and following and page 160 of the Registration Document filed with the AMF on March 23, 2006 under No. R ; the 2005 Company financial statements and the corresponding Statutory Auditors reports on pages 129 and following and page 159 of the Registration Document filed with the AMF on March 23, 2006 under No. R Des exemplaires du présent document sont disponibles sans frais auprès de Maroc Telecom, Avenue Annakhil - Hay Riad - Rabat, Maroc sur le site Internet de Maroc Telecom : et sur le site Internet de l Autorité des Marchés Financiers

4 TAbLE OF CONTENTS 2006 HIGHLIGHTS 4 KEY FIGURES 6 1 PERSONS RESPONSAbLE FOR THE REGISTRATION DOCUMENT AND AUDIT OF THE FINANCIAL STATEMENTS Person responsible for the Registration Document Certification of the Registration Document Persons responsible for the audit of the financial statements Statutory auditor Information policy Person responsible for the information Financial communication calendar Shareholders information 9 2 INFORMATION RELATING TO THE TRANSACTION 10 3 GENERAL INFORMATION REGARDING THE COMPANY AND ITS SHARE CAPITAL General information Corporate name Head Office Legal form Legislation Commitments of the Company to the market authorities in France Registration Duration of the Company Corporate purpose Legal documents available for viewing Fiscal year Allocation of profits General shareholders meetings Management of the Company Statutory auditors Trading of shares Statutory thresholds Public bids General information relating to the company s share capital Share capital Form of shares Rights and duties attached to shares Acquisition by the Company of its own shares Changes in the Company s share capital since its incorporation Trading of the company s shares Places of listing Maroc Telecom share price Dividends and dividend policy Dividend paid out over the past five fiscal years Dividend policy Tax treatment relating to dividends Breakdown of share capital and voting rights Ownership of share capital and voting rights in the Company Authorized share capital Changes in the shareholding structure of the Company over last three fiscal years Employee stock ownership Shareholders Agreement Asset pledges 41 4 INFORMATION CONCERNING COMPANY business ACTIVITIES History General presentation Organization Description of operations ISO Certification Maroc Telecom s business strategy Business activities Mobile business Fixed-line and Internet business Shareholdings Distribution Marketing, communication and sponsorship Competition Mobile telecommunications Fixed-line telecommunications Data transmission Internet Research and development Seasonality Regulatory environment and possible dependencies General presentation of the legal environment with respect to telecommunications in Morocco The legal environment with respect to telecommunications in Morocco Dispute settlement Dependencies 91 2

5 TABLE OF CONTENTS 4.9 Human resources Modernization of human resources management Staff Staff turnover rate Changes in the number of employees Staff of the Vivendi group Training Evolution of staff compensation Labor relations Agreements and negotiations Employee benefits Real property Intellectual property Insurance Legal and arbitration proceedings Risk factors Risks relating to the company s business Risks relating to the regulatory environment Tax risk Risks relating to the interests held by major shareholders in Maroc Telecom Market risks FINANCIAL REPORT Consolidated financial data for years ended December 31, 2004, 2005 and Financial data in Moroccan dirhams Financial data in euros General overview General presentation Market trends and other factors affecting earnings Scope of consolidation Significant accounting policies and estimates Consolidated income statement Comparison of 2006, 2005 and Comparison of business segment results Cash and cash equivalents Contractual obligations and commercial commitments Disclosure of qualitative and quantitative information about market risks Transition from individual financial statements to consolidated financial statements Consolidated financial statements Individual financial statements Report of the Management Board CORPORATE GOVERNANCE Management and supervisory boards Composition and functioning of the Management board Composition and roles of the Supervisory board Corporate governance Audit Committee Code of Ethics Interests of the corporate executives Compensation of the Management and Supervisory boards Participation of Management structures and Supervisory board in the Company s share capital Conflict of interests Interests of corporate executives in significant customers and suppliers of the Company Service contracts Stock options Loans and guarantees granted to corporate executives Related party transactions Management Services Agreement Management Services Agreement with Mauritel Agreement with Casanet Agreement with GSM Al-Maghrib (GAM) Costs relating to stock options and restricted stock Sale of property to a member of the Management board Agreement with Al Akhawayn University Contract with Media Overseas Medi-1-Sat current account advance Mobisud current account advance RECENT DEVELOPMENTS AND OUTLOOK Recent developments Shareholders Meeting held April 12, Acquisition of Gabon Telecom Phony 7.2 Market outlook Objectives 224 TAbLE OF CONCORDANCE ANNUAL INFORMATION DOCUMENT 228 STATUTORY AUDITORS FEES 229 APPENDICES 230 Maroc Telecom s ordinary general meeting, april 12, Glossary 233 3

6 2006 HIGHLIGHTS January Maroc Telecom adopted a new visual identity increasing visibility and simplicity. February 2006 The CMC holding company, which is 80% owned by Maroc Telecom, acquired an additional 0.527% of the shares in Mauritel SA. March Maroc Telecom implemented the new fixed-line numbering plan, simplifying it to two zones instead of four. Maroc Telecom disposed of its 35% stake in GSM Al-Maghrib. Maroc Telecom reduced its VPN and secure optical access tariffs. April Maroc Telecom s Supervisory board appointed Mr. Arnaud Castille as member of the Management board, replacing Mr Mikael Tiano. The Company paid out an ordinary dividend of MAD6.96 per share, representing a total payout of MAD6,119 million. Maroc Telecom participated in Medi-1-Sat s capital increase of MAD10 million, increasing its stake from 24.7% to 26.8%. May The ANRT launched an invitation to tender to grant three 3G mobile licenses. Maroc Telecom reduced its tariffs for several services including Menara, ADSL and international leased lines for call centers. June Maroc Telecom launched television via ADSL. This is the first time this service has been made available in Morocco, Africa and the Arabic world. Maroc Telecom started laying a fiber optic submarine cable between Morocco (Asilah) and France (Marseille) called Atlas Offshore, in an aim to meet international capacity requirements for offshoring activities in Morocco and Internet driven by ADSL broadband access. The ANRT set the agenda for implementing number portability at December 31, 2006 for Mobiles and March 31, 2007 for Fixed-lines. Maroc Telecom offered football fans a unique occasion to watch all the 2006 World Cup matches for free, setting up more than forty large screens connected to TV via ADSL in public places in the Kingdom s main cities. Maroc Telecom cut its international leased line tariffs and introduced 155 Mbps bandwidth. Maroc Telecom launched a new voluntary redundancy plan to be completed in 2007 for a total cost of MAD300 million. Restructuring costs at Mauritel SA totalled MAD29 million and concerned 192 employees. Maroc Telecom reduced its share capital by MAD3,516 million and paid shareholders MAD4 per share in cash. 4

7 2006 HIGHLIGHTS July Maroc Telecom s Supervisory board appointed Mrs. Janie Letrot as member of the Management board, replacing Mr. François Lucas. Maroc Telecom modified its internal organisation to be able to seize the opportunities made available by convergence and to be in a position to propose global offers at the best prices while maintaining high quality service. Fixed-line & Internet and Mobile segments were grouped together in a single department called Services. Regional sales teams have been set up to strengthen links with Maroc Telecom s clients and partners at both provincial and prefectoral levels. The ANRT granted three 3G licenses in July to Maroc Telecom, Medi Telecom and Maroc Connect for MAD360 million (incl. VAT) per license. Maroc Telecom belgium was created with share capital of 62,000, wholly-owned by Maroc Telecom. August The Maroc Telecom foundation rewarded the Kingdom s best students. September Maroc Telecom continued to break new ground on the market with its new services Internet Mobile ( Mobimail ) and push-to-talk ( Mobitalkie ). To build customer loyalty and attract new customers, Maroc Telecom launched a series of unlimited fixed-line offers called Phony, allowing customers to make unlimited fixed-line local and national calls to all Maroc Telecom numbers. November Maroc Telecom purchased a 66% stake in SFR6 for MAD74 million. The other shareholders in this is company, which has been renamed Mobisud, are SAHAM (18%) and SFR (16%). December Maroc Telecom launched Mobisud, a new operator on the French Mobile market. Maroc Telecom belgium carried out a share capital increase of MAD16.8 million. Maroc Telecom signed an investment agreement with the Moroccan government. After privatization by means of an international invitation to tender, Maroc Telecom acquired 51% of Onatel, Office National des Telecommunications, burkina Faso s incumbent operator. Maroc Telecom introduced ADSL+ with bandwidth of up to 20 Mo and reduced ADSL 4 Mo tariffs, and tariffs for international leased lines. 5

8 KEY FIGURES Var Number of employees* 12,204 11,178 11, % Fixed-line customers* (in thousands) 1,309 1,341 1,266 (5.6%) Mobile customers* (in thousands) 6,361 8,237 10, % Internet customers* (in thousands) % IFRS (in millions MAD) Consolidated revenues 17,408 20,542 22, %. Mobile 9,684 12,772 14, %. Fixed-line and Internet 11,133 11,949 12, % EBITDA 10,451 11,664 13, %. Mobile 5,099 6,808 8, %. Fixed-line and Internet 5,352 4,856 4,713 (2.9%) Operating income (EFO) 7,597 8,678 10, %. Mobile** 3,806 5,394 6, %. Fixed-line and Internet 3,791 3,284 3,139 (4.4%) Consolidated net income (group share) 5,171 5,809 6, % Capital expenditure 2,488 3,210 3, %. Mobile** 1,122 1,771 2, %. Fixed-line and Internet 1,366 1,439 1, % * Excluding Mauritel ** Including Mobisud in

9 KEY FIGURES Quartely data in thousands Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Number of Fixed-lines 1,254 1,312 1,299 1,309 1,335 1,349 1,345 1,341 1,336 1,310 1,267 1,266 Internet Access ADSL Number of Mobile customers 5,353 5,519 6,034 6,361 6,709 7,188 8,041 8,237 8,576 8,924 10,496 10,707 Prepaid 5,129 5,283 5,790 6,105 6,428 6,875 7,717 7,908 8,228 8,553 10,108 10,297 Postpaid IFRS (in millions MAD) Consolidated revenues 4,068 4,164 4,697 4,479 4,712 5,039 5,527 5,264 5,276 5,612 6,195 5,532 Mobile (gross) 2,213 2,295 2,709 2,467 2,839 3,139 3,553 3,241 3,279 3,678 4,164 3,563 Maroc Telecom 2,213 2,295 2,591 2,351 2,709 2,999 3,403 3,088 3,118 3,507 3,991 3,381 Mauritel Fixed-line and Internet (gross) 2,660 2,682 2,904 2,887 2,860 2,925 3,073 3,091 3,084 3,060 3,270 3,198 Maroc Telecom 2,660 2,682 2,827 2,780 2,779 2,843 2,991 3,003 3,004 2,981 3,196 3,121 Mauritel Elimination of inter-segment transactions (805) (813) (916) (875) (987) (1,025) (1,099) (1,068) (1,087) (1,126) (1,239) (1,229) Consolidated operating income 1,786 1,729 2,209 1,873 2,073 1,844 2,537 2,224 2,326 2,165 3,106 2,446 7

10 1 PERSONS RESPONSIbLE FOR THE REGISTRATION DOCUMENT AND FOR THE AUDIT OF THE FINANCIAL STATEMENTS In this Registration Document, "Maroc Telecom" or the Company refers to the company Itissalat Al-Maghrib, and the group refers to the group constituted by the Company and all direct and indirect subsidiaries, as described in Chapter PERSON RESPONSIbLE FOR THE REGISTRATION DOCUMENT Mr. Abdeslam Ahizoune Chairman of the Management board 1.2 CERTIFICATION OF THE REGISTRATION DOCUMENT I attest, after having taken all reasonable steps for this purpose, that the information contained in this Registration Document is, to my knowledge, in conformity with reality and does not comprise any omission likely to deteriorate its range. I obtained a letter of work-end from statutory auditors, in which they indicate that they have verified the information related to the financial standing and the accounts given in this Registration Document and the overall reading of the Registration Document. Historical financial information presented in the Registration Document was the subject of Statutory Auditors reports, which appear on pages 175 and 198 of the present Registration Document, pages 167 and 197 of the 2005 Registration Document filed with the French Autorité des Marchés Financiers (AMF) on April 11, 2006 under the number R , on pages 157 and 186 of the 2004 Registration Document filed with the French Autorité des Marchés Financiers (AMF) on April 8, 2005 under the number R , and on page 292 and 330 of Document de base filed with French Autorité des Marchés Financiers (AMF) on November 8, 2004 under the number I , which contain observations. Rabat, May 4, 2007 Mr. Abdeslam Ahizoune Chairman of the Management board 1.3 PERSONS RESPONSIbLE FOR THE AUDIT OF THE FINANCIAL STATEMENTS Statutory Auditors Mr. Samir Agoumi Representative of Salustro Reydel in Morocco 100 boulevard Abdelmoumen Casablanca, Morocco First appointed in 2001 for a three fiscal year term by the general shareholders meeting. This mandate will expire at the end of the general shareholders meeting held to approve the financial statements for the fiscal year ended December 31, The renewal of this mandate has not been included in the agenda of the general shareholders meeting on April 12, The appointment of KPMG representing Mr Fouad Lahgazi will be proposed to the shareholders at the general meeting. Mr. Abdelaziz Almechatt Representative of Coopers & Lybrand in Morocco 101 boulevard Massira Al Khadra Casablanca, Morocco First appointed in 1998 by statutes, the current mandate, of a three fiscal year term, was renewed by the shareholders meeting held April 8, 2005 and will expire at the end of the shareholders meeting held to approve the financial statements for the fiscal year ended December 31,

11 1.PERSONS RESPONSIBLE FOR THE REGISTRATION DOCUMENT AND FOR THE AUDIT OF THE FINANCIAL STATEMENTS INFORMATION POLICY 1.4 INFORMATION POLICY Person responsible for information Mr. Arnaud Castille Chief Financial Officer Maroc Telecom Avenue Annakhil Hay Riad Rabat, Morocco Telephone: (0) E mail: relations.investors@iam.ma Financial communication calendar All the financial information issued by Maroc Telecom (press releases, presentations, annual reports) is available on its website The following is an indicative calendar of Maroc Telecom s financial communication for 2007: Date* Event Format Monday January 22, 2007 Q and 2006 revenues Press release Friday March 2, 2007 Q and 2006 results Press release Press conference Analysts and Investors conference Thursday April 12, 2007 Shareholders Meeting Friday May 11, 2007 Q revenues and results Press release Monday July 23, 2007 Q2 and H revenues Press release Thursday August 30, 2007 Q2 and H revenues Press release Press conference Analysts and Investors conference Monday November 5, 2007 Q revenues and results Press release * before the market Shareholders information The social, accounting and legal documents, whose communication is ruled by the Moroccan and French laws and the statutes in favour of the shareholders and third parties can be consulted at the head office of the Company. Registration Documents, updating of Registration Documents filed with the Autorité des marchés financiers (AMF), presentations for investors and financial analysts made by the Company, as well as the various press releases are available on Maroc Telecom s website: In accordance with the provisions of the Transparency Directive, which has been applicable since January 20, 2007, all regulated information is available and stored on Maroc Telecom s website: 9

12 2 INFORMATION RELATING TO THE TRANSACTION NOT APPLICAbLE 10

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14 3 GENERAL INFORMATION REGARDING THE COMPANY AND ITS SHARE CAPITAL The significant information for investors, relating to the Company and its share capital have been set forth in the Articles of Association effective on the date of the present document subject to the specific provisions of the Shareholders Agreement (See section "Shareholders Agreement"). 3.1 GENERAL INFORMATION Corporate name The Company s corporate name is: Itissalat Al-Maghrib. It also operates under the trade names IAM and Maroc Telecom Head Office The Company s Head office is located on Avenue Annakhil (Hay Riad), Rabat, Morocco. Telephone: Legal form Maroc Telecom is a Moroccan corporation with a Management board and Supervisory board, governed by Chapter II of Act relating to corporations Legislation The Company is governed by Moroccan law, including in particular Act relating to corporations, and by its Articles of Association. The French law governing commercial companies is not applicable to it. As the Company is listed on a regulated market in Morocco, the provisions of various Moroccan rules, regulations, orders, decrees and circulars will be applicable, including in particular: The Decree , dated September 21, 1993, relating to the Securities Exchange, as amended and extended by Acts 34-96, and 52-01; The General Regulation of the Stock Exchange approved by Order of the Minister of the Economy and Finance, dated July 27, 1998, and amended by Order of the Minister of the Economy, Finance, Privatization and Tourism dated October 30, 2001 and by Order of the Minister of Finance and Privatization dated November 22, 2004; The Decree , dated September 21, 1993, relating to the Ethics Council for Securities (CDVM) and the information required of legal entities issuing securities to the public, as amended and extended by Act 23-01; The Decree relating to the creation of the central depositary and establishment of a general accounting system for certain securities as amended and extended by Act 43-02; The General Regulation of the central depositary approved by Order of the Minister of the Economy and Finance, dated April 16, 1998, and amended by Order of the Minister of the Economy, Finance, Privatization and Tourism, dated October 30, 2001; The Decree relating to the Postal Service and Telecommunications, dated August 7, 1997, as amended by 12

15 3. GENERAL INFORMATION REGARDING THE COMPANY AND ITS SHARE CAPITAL GENERAL INFORMATION REGARDING THE COMPANY Act 79-99, dated June 22, 2001, and by Act 55-01, dated November 4, 2004; The Decree , dated April 21, 2004, enacting Act relating to public offers on the Moroccan stock market; The Circular of the Ethics Council for Securities (CDVM), dated June 8, 2004, relating to the thresholds for ownership of shares or voting rights of listed companies; The Circular of the Ethics Council for Securities (CDVM), dated March 18, 2005, relating to the ethical frame information within listed companies; The Circular of the Ethics Council for Securities (CDVM), dated October 3, 2005, relating to publication of important information by legal entities issuing securities to the public; and The Circular of the Ethics Council for Securities (CDVM), dated October 13, 2005, relating to publication and distribution of financial information by legal entities issuing securities to the public Commitments of the Company to the market authorities in France As the Company is also listed on the primary market of Euronext Paris, some provisions of French stock law are applicable to it. Indeed, under the current legislation, rules concerning foreign issuers provided by AMF Regulation are applicable to the Company. In addition, organization and general rules of Euronext Paris are applicable to the Company. AMF rules may also apply to public bids for the shares of the Company, except provisions concerning Compulsory standing offer procedure, the mandatory submission of a public tender offer and compulsory buyout. Other rules of French stock exchange law do not apply to the Company. This is the case of threshold rules. With regards to French law, a foreign issuer has to take the necessary steps to allow the shareholders to manage their investments, and implement their rights. Since Company securities are listed in the primary market of Euronext Paris, and pursuant to AMF Regulation and in compliance with provisions of the European Transparency Directive transposed by the Monetary and Financial Code and applicable since January 20, 2007, the Company is required to: inform the AMF of any changes in its share capital compared with previously disclosed information, particularly the crossing of thresholds which Maroc Telecom would have received; publish interim financial reports including condensed financial statements, an interim management report, the Statutory Auditors reports on the limited review of the above mentioned financial statements and a statement from the persons responsible for the half-yearly financial report within two months of the end of the first half of the Company s fiscal year; publish an annual financial report including the accounts, a management report, the Statutory Auditors report and a statement from the persons responsible for the report within four months of the end of the fiscal year; publish quarterly statements including net revenues by business segment for the past quarter, a general description of the Company s results and financial position and that of companies it controls, and the significant transactions and events which occurred during the quarter and their impact on the Company s financial position, within 45 days from the end of the first and the third quarters; publish a press release specifying the fees paid to the Statutory Auditors, to be presented on the AMF and Maroc Telecom websites within four months of the end of the fiscal year; publish monthly statements on the total number of voting rights and shares comprising the Company s share capital; publish, as early as possible, any information on new facts that may significantly affect the share price and inform the AMF; inform the French public about changes in the business of the Company or its management; make the necessary provisions for allowing the persons who hold their securities through Euroclear France to exercise their rights, particularly by informing them about any annual ordinary shareholders meeting and by allowing them to exercise their voting rights; inform the persons who hold their securities through Euroclear France about dividend payments, new share issues, allocation, subscription, renunciation and conversion; update names and details of the person in charge of the issuer information in France; provide the AMF with any information it may require in accordance with its mission and the laws and regulations applicable to the Company; 13

16 comply with AMF Regulation relating to the obligation to inform the public; comply with the provisions of the AMF s General Regulation on disclosures; make all regulated information available on Maroc Telecom s website and store such information for at least five years; inform the AMF about any draft amendment of its bylaws. The Company will have to inform the AMF about any general shareholders meeting resolution authorizing the Company to trade in its own shares and send the AMF periodic reports of purchases or sales of shares made by the Company by virtue of the authorization. The Company will have to ensure in France, in a simultaneous way, identical information to the one that it will give abroad, particularly in Morocco. Any publication and information to the public related to in this chapter will be made by any mean particularly by a notice or press release inserted in a national financial daily newspaper distributed in France. The information intended for the public in France is written in French. The Company establishes, like French issuers, a Registration Document, supplying legal and financial information relating to the issuer (shareholding structure, activities, management, financial information) without containing however any information relating to an issue of specific shares. In practice, the annual report of the Company can be used as the Registration Document, to the condition that it contains all the required information. The Registration Document will then have to be filed with the AMF and distributed to the public once registered. The annual and the interim reports in French will be available for public in France at the office of the financial intermediary in charge of financial service in France (currently: CACEIS). In addition, the Company has the intention to lead an active policy towards all shareholders, including those holding their shares through Euroclear France, doing the best to allow them to participate to any public offer which would, if applicable, be made on the international markets. However, because of the constraints related to operations on international markets and in order to be able to benefit from the best existing conditions on these markets, in the interest of the Company and of all its shareholders, the Company cannot guarantee to the persons holding their shares through Euroclear France such a participation in all operations which would, if applicable, be made Registration The Company was founded in Rabat by a deed dated February 3, The Company was registered with the Rabat Registry of Commerce on February 10, 1998, under number Duration of the Company The term of the Company is 99 years from the date of its registration with the Registry of Commerce, subject to early dissolution or extension as provided for by law or the Articles of Association. 14

17 3. GENERAL INFORMATION REGARDING THE COMPANY AND ITS SHARE CAPITAL GENERAL INFORMATION REGARDING THE COMPANY Corporate purpose The Company s corporate purpose, in accordance with its contract specifications as an operator and pursuant to the statutory and regulatory rules in force, is: to provide universal service, in the manner provided for under the statutory and regulatory rules in force; and; to establish and/or operate telecommunication infrastructure, networks and services of any kind; For the purposes of the activities so defined, it may: acquire, own and operate any real or personal property that is necessary or appropriate for its operations, in particularly those whose transfer or availability in its favour is provided for by the applicable law; market and, on an accessory basis, assemble and manufacture, any telecommunications devices, products and items; create, acquire, license and make use of any patents, processes or trade names; take part in any financial syndicate, concern or company, existing or currently being created, having a purpose similar or related to its own, by any lawful means; and more generally, carry out any transactions of a commercial, financial or, if necessary, industrial nature relating to real or personal property directly related to any part of the Company s corporate purpose and which could advance its growth and development Legal documents available for viewing The corporate, accounting and legal documents required to be disclosed by law or the bylaws to the shareholders and third parties may be viewed at the Company s Head Office in avenue Annakhil (Hay Riad), Rabat, Morocco Fiscal year The Company s fiscal year begins on January 1 and ends on December Allocation of profits At the close of each fiscal year, the Management board draws up a statement of the various corporate assets and liabilities as of such date and draws up the annual financial statements and the annual report to be submitted to the shareholders meeting, in accordance with applicable law. The net profit generated by the Company, after deduction of any earlier net loss, shall be subject to a withholding of 5% to fund the statutory reserve; such withholding shall no longer be required once the amount of the statutory reserve exceeds one tenth of the share capital. The distributable profit shall consist of the net profit for the fiscal year, after funding the statutory reserve and allocation of earlier net profit or loss carried forward. Against such profit, the shareholders meeting may charge such amounts as it shall see fit in order to fund any optional, ordinary or exceptional reserve funds, or to carry forward, to the extent of a maximum aggregate amount of half the distributable profit, subject to an exception granted by a 75 percent majority of the members of the Supervisory board present or represented. The balance shall be paid out to the shareholders by way of a dividend, the aggregate amount of which shall not be less than half the distributable profit, subject to an exception granted by a 75 percent majority of the members of the Supervisory board present or represented. Within the limits set forth by law, the shareholders meeting may resolve, on an exceptional basis, to pay out amounts 15

18 charged against the optional reserves at its disposal (see also section 3.4 Dividends and dividend policy ). Dividend payments The ordinary shareholders meeting, or absent an agreement, the Management board, shall determine the terms of payment of the dividends voted. Such payment shall be made within nine months after the close of the fiscal year, subject to extension of that period by an order of the President of the Court, acting in summary proceedings upon a petition from the Supervisory board. If the Company holds shares of its own stock, the related dividend entitlement shall be cancelled. Dividends not collected within five years after the date of payment thereof shall be forfeited to the Company. Amounts not collected and not forfeited shall constitute a claim of the owners against the Company, not bearing interest, unless they are converted into loans on mutually agreed terms. If the shares are subject to a life interest, the dividends shall be payable to the life tenant. The proceeds of the distribution of reserves, other than the carry-forward, shall, however, be allocated to the bare owner General shareholders meetings Shareholders meetings The shareholders collective resolutions shall be made at meetings, which shall be ordinary or extraordinary according to the nature of the decisions that they are called upon to make. A duly convened general meeting shall be deemed to represent all the shareholders; its decisions shall be binding on all, including those who are absent, not sui juris, dissenting or deprived of voting rights. Calling of meetings Meetings shall be called by the Supervisory board. An ordinary shareholders meeting may also be called: by the Statutory Auditor or Auditors, who may do so only after requesting the Supervisory board to call it and the Supervisory board fails to do so; by an agent appointed by a Court order, upon the application of any interested party in an emergency or of one or more shareholders holding at least one tenth of the share capital; or by the liquidator or liquidators in the event of the Company s dissolution, during the liquidation period. Shareholders meetings shall be called and carried out in the manner provided for by law. The Company shall, at least 30 days before the shareholders meeting is convened, publish in a newspaper chosen among those contained in the list determined by the Minister of Finance and in the Official Journal, a notice containing the information required by law and the draft resolutions to be submitted to the meeting by the Management board. The Company shall be required to publish, in a newspaper authorized to carry legal advertisements and in the Official Journal, at the same time as the notice of the annual ordinary shareholders meeting, the summary financial statements relating to the previous fiscal year, drawn up in accordance with applicable law (which shall include the balance sheet, statement of income, statement of cash flows and Statement of changes in financial position), and the report of the Statutory Auditor(s) relating to such financial statements. Any amendment to such documents shall be published by the Company in a newspaper authorized to carry legal advertisements within 20 days after the annual ordinary shareholders meeting. Meetings shall be held at the registered office or at any other location specified in the notice. Agenda The agenda of a shareholders meeting shall be determined by the author of the notice. One or several shareholders holding at least 2% of the share capital may, however, call for one or several draft resolutions to be tabled on the agenda. Regardless of the number of shares held, all shareholders shall be entitled, upon providing evidence of identity, to take part in shareholders meetings subject: for holders of registered shares, to an entry by name in the Company s records; 16

19 3. GENERAL INFORMATION REGARDING THE COMPANY AND ITS SHARE CAPITAL GENERAL INFORMATION REGARDING THE COMPANY for holders of bearer shares, to deposit, at the locations mentioned in the notice, of the bearer shares or of a certificate of deposit issued by the establishment having custody of such shares; and if applicable, to provide to the Company, in accordance with applicable law, of any evidence allowing his or her identification. Such formalities shall be completed no later than five days before the date of the meeting, subject to any shorter period provided for in the notice or mandatory statutory rules reducing such period. Participation in meetings The shareholders meeting concern all shareholders, regardless of the number of shares they hold. Corporate shareholders shall be represented by a specially appointed agent, who need not personally to be a shareholder. A shareholder may be represented by another shareholder, or by his or her guardian, spouse or an ascendant or descendant, who need not to be a shareholder in his or her personal capacities. Multiple holders of undivided interests in shares shall be represented at shareholders meetings by one of them or by a single agent. A shareholder having pledged his or her shares shall retain the right to attend shareholders meetings. Officers - Attendance sheet Officers The shareholders meeting shall be chaired by the Chairman of the Supervisory board or the Vice Chairman of the Supervisory board. Failing this, the meeting shall appoint its own Chairman. The Chairman of the meeting shall be assisted by the holders of the two largest interests, either personally or as agents, present and accepting such office, who shall serve as scribes. The officers so appointed shall appoint the Secretary, who need not be a shareholder. Attendance sheet An attendance sheet shall be kept at each meeting, specifying the names and addresses of the shareholders, and, if applicable, those of their proxies, and the numbers of shares and voting rights they hold. Such attendance sheet shall be signed by all shareholders present and by the proxies of absent shareholders; it shall then be certified by the officers of the meeting. Voting rights Each member of the meeting shall have as many voting rights as he or she owns or represents, in particular as a result of voting proxies or other powers of attorney. The voting rights attached to a share shall belong to the life tenant at ordinary shareholders meetings and to the bare owner at extraordinary shareholders meetings. If the shares are pledged, the voting rights shall be exercised by the owner. The Company may not vote shares that it has acquired or accepted as security. Minutes The minutes of meetings shall be entered in a special register kept at the Head Office, the pages of which shall be numbered and initialed by the Registrar of the Court at the location of the Company s registered office. Copies of/or extracts from the minutes shall be certified by the Chairman of the Supervisory board alone, or by the Vice Chairman of the Supervisory board signing jointly with the Secretary. Ordinary shareholders meetings Powers The ordinary shareholders meeting shall act upon all matters of an administrative nature exceeding the powers of the Supervisory board and Management board, and which are not reserved for the extraordinary shareholders meeting. An ordinary shareholders meeting shall be held each year, within the first six months after the end of the company s fiscal year. Such meeting shall hear in particular the report from the governing body and the report from the Statutory Auditor or Auditors; it shall consider, amend and approve or refuse the financial statements; and it shall apportion and allocate profit. It shall appoint members of the Supervisory board and it shall appoint the Statutory Auditor(s). Quorum and majority The ordinary shareholders meeting shall be duly convened and may validly act only if the shareholders present or represented hold at least 25 percent of the voting rights, exclusive of shares acquired or accepted as security by the Company; if such quorum is not obtained, a further meeting shall be called, for which no quorum shall be required. At an ordinary shareholders meeting, resolutions shall be passed by a majority of votes of the shareholders present or represented. 17

20 Extraordinary shareholders meetings Powers Extraordinary shareholders meetings shall have sole authority to amend any provisions of the bylaws. They may dismiss the members of the Supervisory board. They may not, however, change the Company s nationality or increase the shareholders liabilities. They may decide upon the conversion of the Company into a company in any other form, subject to compliance with the applicable statutory rules. Quorum and majority Extraordinary shareholders meetings shall be duly convened and may act validly only if the shareholders present or represented hold at least, upon a first call, half, and upon a second call, 25 percent, of the voting rights, exclusive of shares acquired or accepted as security by the Company. If the 25 percent quorum is not satisfied, such second meeting may be postponed to a date no later than two months after the date for which it had been called, and may be validly held with the presence or representation of shareholders holding at least 25 percent of the share capital. At an extraordinary shareholders meeting, resolutions shall be passed by a two-third majority of votes of the shareholders present or represented Management of the Company Management board Membership The Management board shall administer and manage the Company, under the supervision of a Supervisory board. The Management board shall consist of five members. The members of the Management board must be individuals. All members of the Management board shall be employees of the Company and/or present in Morocco more than 183 days per year, subject to exceptions granted by the Supervisory board acting by a 75 percent majority of the members present or represented. In the event of termination of the office of a member of the Management board during its term, the board shall appoint his or her substitute in the manner provided for by law and the Company s bylaws. Appointment and dismissal of members of the Management board The members of the Management board are appointed by the Supervisory board, acting by a majority of the members present or represented. The Supervisory board shall appoint one of them to act as Chairman. They may be dismissed only by the ordinary meeting of shareholders, upon the motion of the Supervisory board acting by a 75 percent qualified majority. If the dismissal is decided upon without due cause, it may give rise to liability in damages. Termination of office on the Management board shall not entail termination of the contract of employment between the person concerned and the Company. Term of office The members of the Management board shall be appointed for terms of two years, subject to extension. In the event of termination of office of a member of the Management board during its term, his or her substitute shall be appointed for the remaining duration of such term until the renewal of Management board. All members of the Management board shall be eligible for further office. Operation The Management board shall manage the Company collectively. The members of the Management board may, subject to the Supervisory board s consent, allocate among themselves the tasks of management. Such allocation may in no event, however, deprive the Management board of its collegiate character as the Company s management body. Meetings of the Management board may be held outside the principal office. Resolutions shall be passed by a majority of members present or represented in office, each of whom shall have one vote. 18

21 3. GENERAL INFORMATION REGARDING THE COMPANY AND ITS SHARE CAPITAL GENERAL INFORMATION REGARDING THE COMPANY Minutes of resolutions of the Management board, if any are drawn up, shall be entered in a special register and signed by the Chairman of the Management board and another member. Copies of or extracts from such minutes shall be certified by the Chairman of the Management board or by a General Manager. Powers The Management board shall have full powers to act in all circumstances in the name of the Company, within the limitations of the corporate purpose and subject to those powers expressly conferred by law and the Company s bylaws on the Supervisory board under Articles to of the bylaws. In relation to third parties, the Company shall be bound even by an action of the Management board that is not consistent with the corporate purpose and bylaws, unless it proves that the third party was aware that the action exceeded such purpose and/or the bylaws, or could not be unaware thereof in the circumstances. The provisions of the bylaws restricting the Management board s powers shall not be binding on third parties. The Chairman of the Management board shall represent the Company in its dealings with third parties. The Management board may, however, confer the same representation power on one or more members of the Management board, who shall have the title of Executive officer. The provisions of the Articles of Association restricting the Chairman s, or, if applicable, the General Managers powers to represent the Company shall not be binding on third parties. The Chairman of the Management board and the Executive officer may grant powers of attorney to third parties. The powers thereby concerned shall, however, be limited and relate to one or more specific purpose or purposes. In relation to third parties, any action binding the Company shall be validly taken by the Chairman of the Management board or any other member appointed by the Management board as an Executive Officer. Disclosure duties The Supervisory board may require the Management board to submit a report relating to its management and to current transactions at any time. Such report may be supplemented, at the Supervisory board s request, by a provisional accounting statement for the Company. To the extent necessary, the Management board shall forward to the Supervisory board a report detailing the application or implementation, if applicable, of the points to be adopted by the Supervisory board in accordance with Articles to of the bylaws. At least once a quarter, the Management board shall submit to the Supervisory board a report on the Company s operations. Within three months after the close of each fiscal year, the Management board shall draw up the Company s annual financial statements (balance sheet, statement of income and notes) and provide them to the Supervisory board, in order to enable it to perform its supervisory function. The Management board shall also provide the Supervisory board with the report to be submitted to the ordinary meeting of shareholders called to act upon the financial statements for the previous fiscal year. Compensation The Supervisory board shall determine, in the appointing resolution, the nature and amount of compensation paid to each member of the Management board. Liability Without prejudice to any specific liability arising out of the Company s receivership or bankruptcy proceedings, the members of the Management board shall be liable, personally or jointly as the case may be, to the Company and to third parties, for offenses against the statutory or regulatory rules applicable to corporations, for breaches of the bylaws, or for misconduct in their management. Supervisory board Membership The Supervisory board shall consist of not less than eight and not more than 12 members, which may be increased to 15 members if the Company s shares are admitted to listing on the Casablanca stock exchange. Each member of the Supervisory board shall hold at least one share of the Company throughout the term of office. The members of the Supervisory board shall be appointed by the ordinary shareholders meeting. If, on the date of his or her appointment, a member of the Supervisory board does not hold at least one share of the Company or, during his or her term of office, ceases to hold at least one share, he or she shall be deemed to have resigned if the situation is not fixed within three months. Such shares shall be assigned in undivided manner to the potential liability of members of the Supervisory board, collectively or individually, in connection with management of the Company, or of their personal action. Such qualifying shares must be registered shares; they may not be transferred. Such restriction shall be recorded in the Company s transfer register. 19

22 A member of the Supervisory board who no longer holds office, or his or her heirs or assigns, shall recover unrestricted disposal of the qualifying shares as a result only of approval by the ordinary shareholders meeting of the financial statements for the last fiscal year relating to his or her office. The statutory auditor(s) shall, under his/their sole responsibility, secure compliance with the provisions of Article 10.1 of the bylaws, and shall report any breach thereof in their report to the annual shareholders meeting. Term of office The members of the Supervisory board shall be appointed for a six-year term. The office of a member of the Supervisory board shall terminate upon adjournment of the ordinary shareholders meeting that has acted upon the financial statements for the previous fiscal year and was held during the year of expiry of the office of such member. They shall always be eligible for further office. They may be dismissed at any time by the extraordinary shareholders meeting. No member of the Supervisory board may be a member of the Management board. If a member of the Supervisory board is appointed to the Management board, his or her term of office as member of the Supervisory board shall terminate upon his or her assumption of office. A legal entity may be appointed to the Supervisory board. At the time of appointment, it shall be required to appoint a permanent representative who shall be subject to the same conditions and obligations, and shall incur the same civil and criminal liability, as a member of the Supervisory board in a personal capacity, without prejudice to the joint liability of the legal entity that he or she represents. When the legal entity dismisses its representative, it shall be required to appoint a substitute concomitantly. It shall immediately notify its decisions to the Company. It shall act likewise in the event of the permanent representative s death or resignation. Vacancy and appointment In the event of vacancy, as a result of death or resignation or any other inability to act, of the holder of one or several seats on the Supervisory board, the Supervisory board may, between two shareholders meetings, make temporary appointments. If the number of members of the Supervisory board falls below eight, the Supervisory board shall be bound to make temporary appointments to restore its membership within three months of the date of vacancy. Temporary appointments by the Supervisory board shall be subject to ratification by the next subsequent ordinary shareholders meetings; the member appointed to replace another shall remain in office only for the remaining duration of his or her predecessor s term. Even it the temporary appointments are not approved, the resolutions made and actions taken previously by the Supervisory board shall remain valid. If the number of members of the Supervisory board falls below three, the Management board shall be required to call, within 30 days after the date of the vacancy, an ordinary shareholders meeting to supplement the Supervisory board s membership. Chairman The Supervisory board shall appoint from among its members a Chairman and Vice Chairman who shall call meetings of the Supervisory board and direct its proceedings, and who shall hold office during the term of office of the Supervisory board. The Chairman and Vice Chairman must be individuals. The Supervisory board may appoint a Secretary for each meeting, who could not be a member of the board. Notice of meeting and proceedings The Supervisory board shall meet, upon a notice given by its Chairman or Vice Chairman, as frequently as required by the Company s interests, at the Head Office or any other location specified in the notice. Such notice may be given by electronic message or by fax, in both cases followed by confirmation by ordinary mail, or by registered mail return receipt requested, or by letter delivered personally against a receipt, 15 days before the date of the meeting, unless such period is reduced upon the consent of all the members of the Supervisory board. The Supervisory board shall act validly only if at least half the members of the Supervisory board are present. Subject to the provisions of Articles to of the bylaws described below, resolutions of the Supervisory board are passed in accordance with the Moroccan law relating to corporations (as amended or extended), by a majority. In addition to transactions subject by law to the Supervisory board s consent pursuant to article of the bylaws, the following resolutions require prior consent from the Supervisory board acting by a majority of members present or represented : Review, approval and revision of the business Plan, drawn up according to the same strategic criteria and requirements in terms of productivity, profitability and competitiveness as the best international operators; Review and approval of the budget drawn up, according to 20