Company with limited liability (société anonyme) with a Management Board and Supervisory Board ...

324 Pages·2009·1.89 MB·English

Company with limited liability (société anonyme)
with a Management Board and Supervisory Board
and with share capital of €10,254,060.00
Registered office: 18, rue Troyon
92316 Sèvres
552 056 152 R.C.S. Nanterre
REGISTRATION DOCUMENT

In accordance with its General Regulations and, in particular, Article 212-23 thereof, the Autorité des Marchés Financiers
(AMF) has registered this Registration Document on October 7, 2009 under number I.09-079. This document may not be
used in the context of any financial operation unless completed by a Securities Note in respect of which the AMF has
granted a visa.
The Registration Document has been prepared by the issuer and its signatories therefore assume responsibility for its
contents. This registration was granted following an examination by the AMF of “whether the document is complete and
comprehensible and whether the information it contains is coherent” in accordance with the provisions of Article L. 621-8-
1-I of the French Monetary and Financial Code. It does not imply that the AMF has verified the accounting and financial
information presented herein.

DISCLAIMER

By accepting this document, you acknowledge, and agree to be bound by, the following statements. This document is a
translation of CFAO’s Document de Base dated October 7, 2009 (the “Document de Base”). The Document de Base, in its
original French version, is publicly available at www.amf-france.org. This translation (the “Translation”) is provided for
your convenience only and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or
published in whole or in part for any purpose. It does not include the translations of certain sections of the Document de
Base. This Translation has not been prepared for use in connection with any offering of securities. It does not contain all of
the information that an offering document would contain. None of CFAO or any of their respective officers, directors,
employees or affiliates, or any person controlling any of them assume any liability which may be based on this Translation
or any errors or omissions therefrom or misstatements therein, and any such liability is hereby expressly disclaimed. This
Translation does not constitute or form part of any offer to sell or the solicitation of an offer to purchase securities, nor shall
it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Persons
into whose possession this Translation may come are required by CFAO to inform themselves about and to observe any
restrictions as to the distribution of this Translation.
TABLE OF CONTENTS Page

1. RESPONSIBILITY FOR THE REGISTRATION DOCUMENT.....................3
1.1 PERSON RESPONSIBLE FOR THE REGISTRATION DOCUMENT......................................3
1.2 STATEMENT OF RESPONSIBILITY................................................................................3
1.3 PERSON RESPONSIBLE FOR FINANCIAL INFORMATION................................................3
1.4 INDICATIVE FINANCIAL INFORMATION CALENDAR....................................................3
2. STATUTORY AUDITORS....................................................................................4
2.1 PRINCIPAL STATUTORY AUDITORS.............................................................................4
2.2 DEPUTY STATUTORY AUDITORS................................................................................4
3. PRESENTATION OF THE GROUP....................................................................4
3.1 GENERAL PRESENTATION OF THE GROUP.....................................................................4
3.2 SELECTED FINANCIAL INFORMATION RELATING TO THE GROUP................................5
4. RISK FACTORS.....................................................................................................8
4.1 RISKS RELATING TO THE GROUP’S BUSINESS DIVISIONS AND MARKETS......................9
4.2 RISKS RELATING TO THE GROUP’S BUSINESS...........................................................14
4.3 RISKS RELATING TO THE GROUP..............................................................................20
4.4 MARKET RISKS.........................................................................................................21
4.4.1 Exchange Rate Risks........................................................................................22
4.4.2 Interest Rate Risk.............................................................................................27
4.4.3 Liquidity Risk...................................................................................................28
4.4.4 Counterparty Risk............................................................................................28
4.4.5 Risks Relating to Minority Interests.................................................................29
4.5 RISK MANAGEMENT..................................................................................................29
4.5.1 Identifying the Principal Risks.........................................................................29
4.5.2 Risk Management.............................................................................................29
5. INFORMATION ABOUT THE GROUP...........................................................31
5.1 HISTORY AND DEVELOPMENT..................................................................................31
5.1.1 Company Name................................................................................................31
5.1.2 Place of Registration and Registration Number..............................................31
5.1.3 Date and Duration of Incorporation...............................................................31
5.1.4 Registered Office, Legal Form and Applicable Law.......................................31
5.1.5 Background......................................................................................................31
5.2 INVESTMENTS...........................................................................................................31
5.2.1 Investments Since 2006....................................................................................31
5.2.2 Principal Investments Underway.....................................................................33
5.2.3 Principal Planned Investments........................................................................33
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6. BUSINESS..............................................................................................................33
6.1 BUSINESS OVERVIEW...............................................................................................33
6.2 COMPETITIVE STRENGTHS........................................................................................37
6.2.1 The Leading Specialized Distributor in its Core Businesses in Africa
(Excluding South Africa) and in the French Overseas Territories..................37
6.2.2 The Only Major Specialized Distribution Group Operating in Over 30
African Countries.............................................................................................38
6.2.3 A Recognized Ability to Enter and Succeed in New Markets..........................38
6.2.4 Substantial Geographic and Business Diversification Resulting in More
Effective Risk Management..............................................................................39
6.2.5 A Skill Set and Internal Organization Constituting a Competitive
Advantage in its Principal Businesses.............................................................39
6.2.6 A Recognized and Experienced Leadership Team and Local Teams with
Significant Execution Skills.............................................................................40
6.2.7 The Group Believes That it is a Privileged Partner For Major
International Manufacturers Seeking Access to Promising African
Markets............................................................................................................41
6.2.8 Consistent and Profitable Growth...................................................................42
6.3 STRATEGY................................................................................................................44
6.3.1 Maintaining a High Level of Organic Growth in Existing Businesses............44
6.3.2 Optimizing Productivity and Operating Profitability......................................45
6.3.3 Continuing the Geographic Expansion of its Various Divisions.....................46
6.3.4 Applying its Know-How to the Development of New Businesses
Principally in Africa........................................................................................46
6.3.5 Pursuing a Policy of Targeted External Growth.............................................47
6.4 MARKET DESCRIPTION.............................................................................................48
6.4.1 The Group’s Principal Markets—Africa and the French Overseas
Territories are the Group’s Main Regions and Are Considered to Be
Growth Markets for the Group........................................................................48
6.4.2 A Privileged Position Among Principal Actors in the Group’s Main
Geographic Zones............................................................................................56
6.4.3 The Automobile Distribution Division in Africa and in the French
Overseas Territories........................................................................................58
6.4.4 The Pharmaceutical Distribution Division in Africa and in the French
Overseas Territories........................................................................................61
6.4.5 The Consumer Goods Production Segment in Africa......................................63
6.4.6 The New Technologies Products Distribution Division in Africa...................64
6.5 BUSINESS DIVISIONS.................................................................................................66
6.5.1 CFAO Automotive............................................................................................67
6.5.2 Eurapharma.....................................................................................................81
6.5.3 CFAO Industries..............................................................................................89
6.5.4 CFAO Technologies.........................................................................................91
6.5.5 Dependence on Certain Commercial Partnerships.........................................94
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6.6 INSURANCE...............................................................................................................95
6.6.1 General Overview............................................................................................95
6.6.2 Risk Prevention................................................................................................95
6.6.3 The Group’s Approach to Insurance...............................................................95
6.6.4 Main Insurance Policies..................................................................................96
6.7 REGULATION............................................................................................................97
6.7.1 Pharmaceutical Operations.............................................................................98
6.7.2 Exchange Controls.........................................................................................100
6.7.3 Regulations Concerning the Flow of Goods..................................................102
6.7.4 Regulations Concerning Foreign Direct Investment.....................................103
6.7.5 Product Liability............................................................................................103
6.7.6 Environmental Responsibility........................................................................104
7. ORGANIZATIONAL CHART..........................................................................104
7.1 THE GROUP’S SIMPLIFIED ORGANIZATIONAL CHART AS OF THE DATE OF THE
REGISTRATION DOCUMENT.....................................................................................105
7.2 SUBSIDIARIES AND EQUITY INTERESTS...................................................................106
7.2.1 General Overview..........................................................................................106
7.2.2 Subsidiaries in Which the Group Holds All (or Nearly All) Share Capital
and Voting Rights...........................................................................................106
7.2.3 Subsidiaries in Which the Group Does Not Hold all Share Capital and
Voting Rights..................................................................................................109
7.2.4 Acquisitions and Divestitures Over the Past Three Years and the First
Half of 2009...................................................................................................113
8. PROPERTY, PLANT AND EQUIPMENT......................................................115
8.1 SIGNIFICANT EXISTING OR PLANNED REAL PROPERTY............................................115
8.2 ENVIRONMENT AND SUSTAINABLE DEVELOPMENT................................................115
8.2.1 Environmental Regulations............................................................................115
8.2.2 Sustainable Development...............................................................................115
9. OPERATING AND FINANCIAL REVIEW....................................................118
9.1 OVERVIEW.............................................................................................................119
9.1.1 Introduction...................................................................................................119
9.1.2 Factors Affecting the Group’s Results of Operations....................................122
9.1.3 Principal Income Statement Items.................................................................126
9.2 COMPARISON OF THE GROUP’S RESULTS OF OPERATIONS FOR THE FIRST HALF OF
2008 AND 2009......................................................................................................132
9.2.1 Consolidated Results of Operations for the First Half of 2008 and 2009.....132
9.3 ANALYSIS OF REVENUES, GROSS PROFIT AND RECURRING OPERATING INCOME
BEFORE PPR MANAGEMENT FEES BY DIVISION FOR THE FIRST HALF OF 2008 AND
2009.......................................................................................................................138
9.3.1 CFAO Automotive..........................................................................................138
9.3.2 Eurapharma...................................................................................................141
9.3.3 CFAO Industries............................................................................................143
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9.3.4 CFAO Technologies.......................................................................................145
9.4 COMPARISON OF THE ANNUAL RESULTS FOR THE YEARS ENDED DECEMBER 31,
2007 AND DECEMBER 31, 2008..............................................................................148
9.4.1 Comparison of the Results for the Years Ended December 31, 2007 and
December 31, 2008........................................................................................148
9.5 ANALYSIS OF REVENUES, GROSS PROFIT AND RECURRING OPERATING INCOME
BEFORE PPR MANAGEMENT FEES BY DIVISION FOR 2007 AND 2008........................153
9.5.1 CFAO Automotive..........................................................................................153
9.5.2 Eurapharma...................................................................................................156
9.5.3 CFAO Industries............................................................................................158
9.5.4 CFAO Technologies.......................................................................................160
9.6 COMPARISON OF THE ANNUAL RESULTS FOR THE YEARS ENDED DECEMBER 31,
2006 AND DECEMBER 31, 2007..............................................................................161
9.6.1 Comparison of the Annual Results for the Years Ended December 31,
2006 and December 31, 2007........................................................................161
9.7 ANALYSIS OF THE REVENUES, THE GROSS PROFIT AND THE RECURRING
OPERATING INCOME BEFORE PPR MANAGEMENT FEES BY DIVISION FOR 2006
AND 2007...............................................................................................................166
9.7.1 CFAO Automotive..........................................................................................166
9.7.2 Eurapharma...................................................................................................169
9.7.3 CFAO Industries............................................................................................171
9.7.4 CFAO Technologies.......................................................................................172
9.8 QUALITATIVE AND QUANTITATIVE ANALYSIS OF MARKET RISK..............................174
9.9 CRITICAL ACCOUNTING POLICIES UNDER IFRS.....................................................174
9.9.1 Provisions......................................................................................................174
9.9.2 Post-Employment Benefits and Other Long-Term Employee Benefits..........175
9.9.3 Goodwill and Asset Impairment....................................................................175
9.9.4 Income Taxes.................................................................................................176
9.9.5 Derivatives.....................................................................................................176
9.10 CHANGES IN ACCOUNTING METHODS....................................................................177
9.11 FINANCIAL CONSEQUENCES OF LISTING CFAO’S SHARES ON EURONEXT PARIS...177
10. LIQUIDITY AND CAPITAL RESOURCES OF THE GROUP....................179
10.1 OVERVIEW.............................................................................................................179
10.2 FINANCIAL RESOURCES..........................................................................................180
10.2.1 Outlook...........................................................................................................180
10.2.2 Borrowings.....................................................................................................180
10.3 PRESENTATION AND ANALYSIS OF THE MAIN CATEGORIES OF USE OF THE
GROUP’S CASH.......................................................................................................183
10.3.1 Investments.....................................................................................................183
10.3.2 Dividends.......................................................................................................183
10.3.3 Financing of Working Capital Requirements................................................183
10.3.4 Financing of Non-Current Assets..................................................................184
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10.3.5 Contractual Obligations................................................................................184
10.3.6 Other Commitments.......................................................................................185
10.4 ANALYSIS OF CASH FLOW......................................................................................186
10.4.1 Cash Flow from Operating Activities............................................................186
10.4.2 Cash Flow Used In Investing Activities.........................................................187
10.4.3 Cash Flows Used in Financing Activities......................................................189
10.4.4 Free Operating Cash Flow............................................................................190
10.4.5 Change in Net Debt........................................................................................191
11. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES............191
12. TREND INFORMATION..................................................................................191
12.1 BUSINESS TRENDS..................................................................................................191
12.2 PROSPECTS FOR THE MEDIUM-TERM.......................................................................192
13. PROFIT FORECASTS OR ESTIMATES........................................................194
13.1 ASSUMPTIONS........................................................................................................194
13.2 GROUP FORECASTS FOR 2009.................................................................................195
13.3 INTENTIONALLY OMITTED......................................................................................195
14. CORPORATE GOVERNANCE........................................................................195
14.1 CORPORATE GOVERNANCE......................................................................................195
14.1.1 Management Board........................................................................................196
14.1.2 Supervisory Board.........................................................................................197
14.1.3 Statements Concerning the Members of the Management and
Supervisory Board.........................................................................................201
14.2 CONFLICTS OF INTEREST........................................................................................202
15. COMPENSATION AND BENEFITS...............................................................202
15.1 COMPENSATION AND BENEFITS.............................................................................202
15.1.1 Compensation and Benefits Paid to Members of the Management Board....202
15.1.2 Compensation and Benefits Paid to the Members of the Supervisory
Board.............................................................................................................209
15.2 TOTAL AMOUNTS SET ASIDE OR ACCRUED TO PROVIDE PENSION, RETIREMENT
OR SIMILAR BENEFITS.............................................................................................210
16. OPERATION OF THE ADMINISTRATIVE AND MANAGEMENT
BODIES................................................................................................................210
16.1 DUTIES OF THE MEMBERS OF THE ADMINISTRATIVE AND MANAGEMENT BODIES....210
16.1.1 The Management Board.................................................................................210
16.1.2 The Supervisory Board..................................................................................210
16.2 SERVICE AGREEMENTS BETWEEN MANAGEMENT BOARD AND SUPERVISORY
BOARD MEMBERS AND THE COMPANY OR ONE OF ITS SUBSIDIARIES.......................211
16.3 SUPERVISORY BOARD COMMITTEES........................................................................211
16.3.1 Audit Committee............................................................................................211
16.3.2 Compensation Committee..............................................................................212
16.3.3 Appointments Committee...............................................................................213
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16.4 STATEMENT RELATING TO CORPORATE GOVERNANCE............................................214
16.5 INTERNAL CONTROL...............................................................................................215
17. EMPLOYEES......................................................................................................215
17.1 INTRODUCTION.......................................................................................................215
17.1.1 Number of Employees and Analysis of Workforce.........................................215
17.1.2 Training.........................................................................................................217
17.1.3 Employee Relations........................................................................................218
17.2 SHAREHOLDINGS AND STOCK OPTIONS HELD BY THE MANAGEMENT BOARD
AND THE SUPERVISORY BOARD.............................................................................219
17.2.1 CFAO Interests Held by the Members of the Management and
Supervisory Board.........................................................................................219
17.2.2 Stock Options.................................................................................................219
17.2.3 Award of Free Shares....................................................................................220
17.3 PROFIT-SHARING AGREEMENTS AND INCENTIVE SCHEMES......................................220
17.3.1 Profit-Sharing Agreements............................................................................220
17.3.2 Incentive Schemes..........................................................................................220
17.3.3 Employee Share Savings and Similar Schemes.............................................221
18. PRINCIPAL SHAREHOLDERS......................................................................222
18.1 GROUP ORGANIZATION...........................................................................................222
18.1.1 Simplified Organizational Chart...................................................................222
18.1.2 Principal Shareholders (Direct and Indirect)...............................................223
18.1.3 Share Capital and Voting Rights...................................................................223
18.2 VOTING RIGHTS OF SHAREHOLDERS.......................................................................223
18.3 CONTROL STRUCTURE............................................................................................223
18.4 AGREEMENTS RESULTING IN A CHANGE OF CONTROL.............................................224
19. RELATED PARTY TRANSACTIONS............................................................224
19.1 TRANSACTIONS WITH PPR.....................................................................................224
19.2 INTRAGROUP TRANSACTIONS..................................................................................225
19.3 CONSEQUENCES OF LISTING THE COMPANY’S SHARES ON EURONEXT PARIS........226
19.4 INTENTIONALLY OMITTED......................................................................................228
19.4.1 Intentionally Omitted.....................................................................................228
19.4.2 Intentionally Omitted.....................................................................................228
19.4.3 Intentionally Omitted.....................................................................................228
20. FINANCIAL INFORMATION CONCERNING THE ASSETS AND
LIABILITIES, FINANCIAL POSITION AND PROFITS AND LOSSES
OF CFAO.............................................................................................................229
20.1 CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP......................................229
20.1.1 Consolidated Annual Financial Statements...................................................229
20.1.2 Intentionally Omitted.....................................................................................290
20.1.3 Interim Consolidated Financial Statements..................................................290
20.1.4 Intentionally Omitted.....................................................................................313
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20.2 STATUTORY AUDITORS’ FEES................................................................................313
20.3 DATE OF THE MOST RECENT FINANCIAL INFORMATION...........................................313
20.4 INTERIM FINANCIAL INFORMATION........................................................................313
20.5 DIVIDEND DISTRIBUTION POLICY............................................................................313
20.6 LITIGATION AND ARBITRATION..............................................................................313
20.6.1 Tax Litigation.................................................................................................314
20.6.2 Civil and Criminal Litigation........................................................................314
20.7 SIGNIFICANT CHANGES TO FINANCIAL OR COMMERCIAL CONDITION......................315
21. INTENTIONALLY OMITTED.........................................................................315
22. MATERIAL CONTRACTS...............................................................................315
23. INFORMATION FROM THIRD PARTIES, STATEMENTS BY
EXPERTS AND DECLARATIONS OF INTEREST......................................315
24. DOCUMENTS AVAILABLE TO THE PUBLIC............................................316
25. INFORMATION ON EQUITY INTERESTS..................................................316

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GENERAL INFORMATION
Certain Definitions
In this Registration Document and unless otherwise indicated:
• The term “CFAO” or the “Company” refers to the company CFAO;
• The term “Group” refers to CFAO and its subsidiaries;
• The term “North Africa” refers to Algeria, Morocco and Tunisia, although the Group is only
present in Algeria and Morocco;
• The term “French-speaking Sub-Saharan Africa” refers to the following countries:
Benin* Ivory Coast* Mali*
Burkina Faso* Djibouti Mauritania*
Burundi Gabon* Niger*
Cameroon* Gambia* Rwanda
Central African Republic* Guinea Bissau* São Tomé and Príncipe*
Comores Equatorial Guinea* Senegal*
Democratic Republic of the Congo* Guinea Conakry* Chad*
Congo* Madagascar* Togo*

* Countries in which the Group operates
• The term “English- and Portuguese-speaking Sub-Saharan Africa” refers to the following
countries:
South Africa Lesotho Sierra Leone
Angola* Liberia Sudan
Botswana Malawi* Swaziland
Cape Verde Mozambique Tanzania*
Eritrea Namibia Zambia*
Éthiopia Nigeria* Zimbabwe*
Ghana* Uganda*
Kenya* Seychelles

* Countries in which the Group operates
• The term “French Overseas Territories and Others” refers to the following countries and
territories:
French Overseas Territories Others
Other French Overseas
Overseas Departments Overseas Collectivities Territories
Guadeloupe* French Polynesia* New Caledonia* Mauritius*
French Guyana* Saint Pierre and Miquelon Clipperton Vietnam*
French Southern and
Martinique* Wallis and Futuna
Antarctic Lands
Reunion Island* Mayotte
Saint Martin*
Saint Barthélemy

* Countries in which the Group operates
Prospective investors are advised to review section 6.4 “Market Description” of this Registration
Document for information concerning the countries and geographic zones in which the Group is
present, which are described above. Prospective investors should also note that the classification of
the countries and territories above corresponds to that used by the Group in the context of the
presentation of its financial statements, but may be different from the traditional geopolitical
classification for certain countries (in particular, Gambia, Guinea Bissau and São Tomé and Príncipe).
• The term “territories” refers to a country or a French Overseas Territory.
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Unless otherwise indicated, the term “revenues” (and related information), when covering the Group
or one of its divisions, refers to revenues excluding intragroup revenues.
Market Information
This Registration Document contains information about the Group’s markets and competitive
position, including information relating to market size and market share. Unless otherwise stated, the
information provided in this document and relating to market share and the size of relevant markets is
based on the Group’s estimates and is provided solely for indicative purposes. To the Group’s
knowledge, there are no authoritative external reports providing exhaustive and comprehensive
coverage or analysis of the markets in which the Group operates. Consequently, the Group has made
estimates based on a number of sources including internal surveys, studies and statistics from
independent third parties (in particular, INSEE, Global Insight, Groupement pour l’Elaboration et la
Réalisation de Statistiques and IMS Health) or professional federations of specialized distributors
(such as the French Automobile Manufacturers’ Committee, l’Association des Importateurs de
Véhicules Automobiles in Morocco and le Groupement des Poids Lourds et Camions in Morocco) and
data from operational subsidiaries. These various studies, estimates, research and information, which
the Group considers reliable, have not been verified by independent experts. The Group does not
guarantee that a third party using other methods to collate, analyze or compile market data would
obtain the same results. In addition, the Group’s competitors may define its economic and geographic
markets differently. To the extent the data relating to market share and market size included in this
document are based solely on the Group’s estimates, they do not constitute official data.
Forward-Looking Statements
This Registration Document contains information on the prospects and main lines of development of
the Group. This information is sometimes presented by use of the future or conditional tense, or by the
use of forward-looking statements such as “considers”, “envisages”, “thinks”, “aims to”, “expects”,
“intends”, “should”, “has the ambition to”, “estimates”, “believes”, “wishes” and “might”, or, if
applicable, the negative form of such terms and expressions or any other variant or similar
terminology. Such information is not historical data and should not be interpreted as a warranty that
such facts and events as stated will occur. Such information is based on data, assumptions, and
estimates that the Group considers reasonable. They are likely to change or be modified due to the
uncertainties of the economic, financial, competitive or regulatory environment. This information is
mentioned in various sections of this Registration Document and contains data relating to the Group’s
intentions, estimates and targets concerning in particular its market, strategy, growth, results, financial
position, cash position and projections. The forward-looking statements provided in this document are
made as of the date of this Registration Document. Excluding any applicable legal or regulatory
requirements, the Group does not make any commitment to publish updates of the forward-looking
statements provided in this document to reflect any changes in its targets or events, conditions or
circumstances on which such forward-looking statements are based. The Group operates in a
competitive environment subject to rapid change. It therefore is unable to anticipate all risks,
uncertainties or other factors that may affect its activities, their potential impact on its activities or the
extent to which the occurrence of a risk or combination of risks could have significantly different
results from those set out in any forward-looking statements, it being noted that such forward-looking
statements do not constitute a guarantee of actual results.
Risk Factors
Investors are advised to carefully take into consideration the risk factors described in Chapter 4 “Risk
Factors” of this Registration Document before making their investment decision. The occurrence of
all or any of these risks is likely to have a negative effect on the activities, results or financial situation
or prospects of the Group. Furthermore, other risks, that have not yet been identified, or that are
considered not to be material by the Group at the date of registration of this Registration Document,
may have the same negative impact and investors may lose all of part of their investment.
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