Financial Report

Fiscal Year 2007

FINANCIAL REPORT
62 – MANAGEMENT REPORT 62 – Consolidated financial results 73 – Risk factors 77 – 2008 financial calendar 79 – General information 80 – General information about Club Méditerranée 83 – General information about the company’s capital 88 – General information about Club Méditerranée securities 90 – Corporate governance 102 – Chairman’s report on the practices and procedures of the board of directors and internal control procedures 113 – Statutory Auditors’ report on internal control 114 – Fees paid to the Statutory Auditors 115 – CONSOLIDATED FINANCIAL STATEMENTS 116 – Consolidated statements of income 117 – Consolidated balance sheets 118 – Consolidated cash flow statement 118 – Change in consolidated net debt 119 – Consolidated statement of changes in equity (Note 12) 120 – Notes to the consolidated financial statements 120 – Note 1 - General information 120 – Note 2 - Summary of significant accounting policies, scope of consolidation 128 – Note 3 - Changes in scope of consolidation 128 – Note 4 - Segment information 131 – Note 5 - Goodwill and business combinations 132 – Note 6 - Intangible assets 133 – Note 7 - Property, plant and equipment 134 – Note 8 - Non-current financial assets 135 – Note 9 - Assets held for sale 136 – Note 10 - Other receivables 136 – Note 11 - Cash and cash equivalents 136 – Note 12 - Share capital and reserves 137 – Note 13 - Share-based payments 139 – Note 14 - Pensions and other long-term benefits 141 – Note 15 - Provisions 141 – Note 16 - Income taxes 143 – Note 17 - Borrowings and other interest-bearing liabilities 145 – Note 18 - Financial instruments 148 – Note 19 - Other liabilities 148 – Note 20 - Employee benefits expense and number of employees 149 – Note 21 - Operating income - Management of assets 149 – Note 22 - Other operating income and expense 149 – Note 23 - Finance cost, net 149 – Note 24 - Share of income of associates 150 – Note 25 - Earnings per share 150 – Note 26 - Notes to the consolidated cash flow statement 151 – Note 27 - Related party transactions 152 – Note 28 - Commitments and contingencies 153 – Note 29 - Scope of consolidation at 31 October 2007 157 – Auditors’ report on the consolidated financial statements 158 – Group structure at 31 October 2007 161 – ADDITIONAL INFORMATION 162 – Statutory Auditors’ special report on regulated agreements and commitments 165 – Report of the board of directors on the proposed resolutions 169 – Proposed resolutions

2007 ANNUAL REPORT

61

MANAGEMENT REPORT
1. Consolidated Financial Results
1.1. FINANCIAL HIGHLIGHTS
(in € millions)

Other operating income and expense, corresponding to credit card costs, litigation and restructuring, represented a net expense of €21 million. Operating income stood at €14 million, reflecting an improvement in the leisure businesses and a lower contribution from

2006 Consolidated revenue Reported Like-for-like(1) EBITDAR - leisure (2) Operating income - leisure
Of which business interruption insurance settlements

2007 1,727 1,727 244 33
2
+2,8%* +3,4%**

the management of assets.
1.2. BUSINESS REVIEW FY 2006 Number of customers (in thousands) Of which Club Med Of which Jet tours Of which Club Med Gym 1,685 1,328 286 71 FY 2007 1,639 1,324 243 72 1,727 1,367 €119.4 12,477 8,536 68.4% €86.5 Change vs. FY 2006 -2.7% -0.2% -15.1% +1.1% +3.4% +5.7% +8.1% - 0.6% -0.3% +0.2 pt +7.7 %

1,679 1,670 229 24
21

Operating income - management of assets Other operating income & expense Operating income Net income/(loss) Net debt

40 (29) 35 5 (294)

2 (21) 14 (8) (336)

Revenue like-for-like (in € thousands) 1,670 Of which core business 1,292 Revenue like-for-like per hotel day (2) €110.4 Capacity in thousands of hotel days(2) Hotel days sold (in thousands)(2) Occupancy rate
(2)

(1) At constant exchange rates and comparable scope of consolidation. (2) EBITDAR - leisure: Earnings before interest, taxes, depreciation, amortization and rents. * including a 3.3% increase in core business. ** including a 5.7% increase in core business.

12,550 8,560 68.2% €80.4

Consolidated revenue amounted to €1,727 million, an increase of 2.8% on a reported basis. Like-for-like revenue was up 3.4%, reflecting 4% growth in the first half and 2.8% in the second. The fourth quarter saw a strong 5.3% increase in revenue. Core business rose by 5.7% like-for-like. EBITDAR - leisure rose to €244 million from €229 million the previous fiscal year. Excluding the impact of business interruption insurance settlements in fiscal 2006, EBITDAR was up 16%. Operating income - leisure, at €33 million, showed a sharp increase, particularly after taking into account the fiscal 2006 impact of business interruption insurance settlements. Operating income - management of assets, corresponding to the revenues and expenses generated by the management of property assets, amounted to €2 million versus more than €40 million in fiscal 2006. The sharp decline stemmed from the cost of closing year-round Villages for renovation and a weaker contribution from disposals and asset refinancing transactions, which were unusually high in fiscal 2006. Borrowings were also affected, rising to €336 million at 31 October 2007, despite the decrease in average net debt to €370 million in fiscal 2007 from €432 million in the previous year.

RevPAB(1) per hotel day, like-for-like

(1) RevPAB: Total like-for-like Village revenue excluding tax and transportation/Available beds. (2) For the core business.

Like-for-like revenue per hotel day rose by 8.1%, with gains in every region. The €9 increase in revenue per hotel day was mainly attributable to the nearly €6 effect of the ongoing upmarket strategy, involving resegmentation of the Village base, the impact of the “Bar & Snacking Included” formula introduced in Asia during the year and the “Confort à la Carte” offering of rooms in a higher comfort category. Capacity was down 0.6% overall for Club Med Villages, including a 4.5% decrease in Europe that was mainly attributable to the closure of Opio en Provence and La Pointe aux Canonniers for renovation. In the Americas, capacity increased 8.7%, with the reopening of the newly renovated Cancún Yucatán, Trancoso and La Caravelle Villages. In Asia, capacity was up by 3.6%. Club Med Gym reported a 3.5% increase in revenue. However, due to the membership system, business growth is better measured in terms of new subscriptions, which rose by a satisfactory 5.3% in value over the prior year.

62

M A N A G E M E N T R E P O RT

1.2.1. CUSTOMERS

4 Trident capacity grew 30% compared to fiscal 2006 and 53% compared to fiscal 2005 to represent 42% of the total. The number of hotel days sold during the period was in line with fiscal 2006 at 8,536,000.
FY 2006 Europe Capacity Occupancy rate Americas Capacity Occupancy rate Asia Capacity Occupancy rate Total Capacity Occupancy rate 8,142 72.3% 2,621 66.1% 1,787 52.7% 12,550 68.2% FY 2007 7,778 73.5% 2,847 62.0% 1,852 56.9% 12,477 68.4%

In fiscal 2007, the Group welcomed over 1,639,000 customers. The Villages business served 1,324,000 customers during the year, in line with fiscal 2006 and up for the first time in the summer months since 2001. The number of customers at 4-Trident Villages rose by 133,000 and by nearly 200,000 compared with fiscal 2005. These positive developments are key to the strategy to move upmarket. Jet tours served far fewer customers in fiscal 2007 as the upmarket strategy was pushed into higher gear, leading to plans to build four Eldorador hotels being removed from the catalogue. However, at the same time, the repositioning led to an 11% increase in the average price per customer, which is crucial to improving Jet tour’s future profitability.
1.2.2. HOTEL DAYS - VILLAGES HOTEL DAYS BY OUTBOUND ZONE

Outbound zones generate revenue and sales costs (e.g. France, United Kingdom, Belgium, Canada...).
(in thousands of hotel days sold)

The occupancy rate stood at 68.4% of available beds, an increase of 0.2 points from the previous year.
FY 2007 6,450 1,253 833 8,536 Change -0.9% -2.8% +9.7% -0.3% 1.2.4. REVPAB (REVENUE PER AVAILABLE BED)
(€/hotel day)

FY 2006 Europe Americas Asia Total 6,511 1,290 759 8,560

Cumulative at 31 October (like-for-like) 2005 2006 2007 Change 2007 vs. 2006 +7.3% +1.9% +22.3% +7.7% Change 2007 vs. 2005 +17.0% +9.4% +42,2% +17.4%

HOTEL DAYS BY INBOUND ZONE

Inbound zones are where Villages are located and operated (e.g. France, Morocco, Polynesia, Mexico...).
(in thousands of hotel days sold)

Europe Americas Asia Total Villages

77.4 72.2 57.2 73.7

84.4 77.5 66.5 80.4

90.5 78.9 81.3 86.5

FY 2006 Europe Americas Asia Total 5,885 1,733 942 8,560

FY 2007 5,717 1,766 1,053 8,536

Change - 2.8% +1.9% +11.8% - 0.3%

RevPAB: Total Village revenue excluding tax and transportation/ Available beds.

Revenue per available bed (RevPAB) is a key business indicator since it measures how well customers are embracing the upmarket strategy. In fiscal 2007, RevPAB rose by 7.7% to nearly €87 per hotel day. After rising by €7 per hotel day in fiscal 2006, RevPAB increased by an additional €6 in fiscal 2007.

1.2.3. OCCUPANCY RATE BY CATEGORY Thousands of hotel days by destination FY 2006 2 Tridents 3 Tridents 4 and 5 Tridents Other Total 418 5,435 2,626 81 8,560 FY 2007 266 4,698 3,511 61 8,536 Occupancy rate FY 2006 71.1% 70.7% 65.0% 34.0% 68.2% FY 2007 75.4% 70.0% 66.9% 38.0% 68.4%

Growth was attributable to all the upmarket initiatives and reflected advances across all zones.

2007 ANNUAL REPORT

63

1.2.5 FINANCIAL MODEL (at 31 october 2007)
(€)

Fiscal 2007 revenue rose by 3.4% like-for-like and by 2.8% on a reported basis. The currency effect was a negative €23 million, due to the strength of the euro, while changes in

>

GOP*/hotel day Price
€69 €46 €24

the scope of consolidation – corresponding to the sale and management-back of the Almadies Village in Senegal – had an €8 million negative impact.

Costs

In fiscal 2007, revenue was affected by two major developments: - Changes in price mix had a €75 million positive effect on rev-

4%
2 Tridents

54%
3 Tridents

42%
4 and 5 Tridents

> Comfort category

2007 capacity

enue, reflecting the ongoing rise in average prices. - The volume effect was positive, at €2 million, for the first time in five years. This indicator shows that the shift in the customer base has been completed in a number of countries.
LIKE-FOR-LIKE REVENUE BY REGION AND BUSINESS (OUTBOUND ZONES)
(in € millions)

* GOP: Village operating income before property costs.

This financial model shows gross operating profit (GOP) per hotel day by comfort category. There is only a limited link between cost and comfort category, whereas prices vary by 20% to 50% from one category to another. For example, GOP per hotel day in the 4 Trident category is €69, which is 1.5 times higher than in the 3 Trident category.
1.3. STATEMENT OF INCOME 1.3.1. CONSOLIDATED REVENUE
(in € millions)

FY 2005 Europe Americas Asia Villages Jet tours Other businesses Total 925 194 110 1,229 311 53 1,593

FY 2006 970 185 137 1,292 322 56 1,670

FY 2007 1 012 188 167 1,367 302 58 1,727

FY 2007 vs. FY 2006 +4.3% +1.7% +21.4% +5.8% -6.1% +4.1% +3.4%

FY 2006 Revenue Operating income - leisure Operating income - management of assets Other operating income & expense Operating income Finance costs and other financial income & expense Share of income of associates Income tax Net income/(loss) Of which attributable to shareholders FY 2007 VERSUS FY 2006 1,679 23.7 39.7 (28.7) 34.7 (32.1) 3.6 (1.2) 5.0 4.6

FY 2007 1,727 32.9 2.0 (20.5) 14.4 (26.4) 1.2 2.5 (8.3) (10.4)

1.3.2. INCOME BY REGION AND BUSINESS
(in € millions)

EBITDAR FY 2006 Europe Americas Asia Sub-total Villages Jet tours Other businesses 163 22 20 205 9 15 229 13.7% FY 2007 166 21 32 219 8 17 244 14.1%

Operating income leisure FY 2006 21.4 (1.6) (1.6) 18.2 3.1 2.4 23.7 FY 2007 19.9 (2.2) 9.6 27.3 2.2 3.4 32.9

1,727 1,679 +2 –31 +75
Currency effect and change in scope of consolidations Volume effect Change in price mix Jet tours Fiscal 2006 Fiscal 2007

Total % of like-for-like revenue

+2
Jet tours(1)

(1) Including €22 million due to changes in the scope of consolidation.

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M A N A G E M E N T R E P O RT

LEISURE OPERATING INCOME - VILLAGES
(in € millions - like-for-like)

FIXED OPERATING COSTS
(in € millions)

FY 2006 Revenue Business interruption insurance settlements Other revenue Total revenue Margin on variable costs
as a % of revenue (1)

FY 2007 1,366.7

FY 2006 like-for-like Scope of consolidation/Capacity/Upmarket strategy

(402.6)
€(35.9) per hotel day (1)

1,292.4 19.1 7.8 1,319.3 807.5
61.0%

(8.2) 9.4 9.0 (21.9) (1.8) (2.9) (8.6) (419.4)

1.9 9.8 1,378.4 845.4
61.7%

Villages closed definitively Villages closed for renovation New or reopened Villages Upmarket strategy Other Cost increases FY 2007

Fixed selling costs Fixed operating costs Property costs Overheads Operating income - leisure

(175.5) (402.6) (150.7) (62.0) 16.7

(171.8) (419.4) (163.3) (63.6) 27.3

€(37.4) per hotel day (1)

(1) Excluding managed Villages.

(1) Adjusted to exclude insurance settlements.

Fixed operating costs rose by €17 million. Part of the increase
Reported fiscal 2006 operating income - leisure Currency effect Change in scope of consolidation Like-for-like fiscal 2006 operating income - leisure Volume effect Change in price mix Business interruption insurance settlements Change in margin on variable costs Fixed selling costs Fixed operating costs Property costs Overheads Fiscal 2007 operating income - leisure

was due to growth in capacity. Adjusted for changes in capac18 1 (2) 17 0 55 (17) 38 4 (17) (13) (2) 27

ity, average fixed operating costs per hotel day were 4.2% higher than in fiscal 2006, at €37.4. The two main reasons for the increase were as follows: - The ongoing shift of the Village base upmarket had an inevitable impact. The operating cost per hotel day of the 4-Trident Villages opened during the year is roughly €40, but this compares with an average price per hotel day of around €135. The Group also closed entry-level Villages that represented an operating cost per hotel day of around €27 compared with an average price, including Crested Butte, of €93 per hotel day. In all, changes in the scope of consolidation, both quantitative and qualitative, resulted in an overall cost increase of approximately €9 million.

FIXED SELLING COSTS

- A residual increase in costs of nearly €9 million, or 2.4%, with the effects of inflation partly offset by productivity gains.
PROPERTY COSTS
(in € millions - like-for-like)

Reduced catalog costs accounted for half of the savings in selling costs and lower administrative costs for the other half.

Fiscal 2006 property costs Refinancing transactions Changes in scope of consolidation Upmarket strategy Rent escalation clauses and other Fiscal 2007 property costs

(150.7) (3.0) 1.2 (4.5) (6.3) (163.3)

Property costs increased by €12.6 million due to the effect of asset securitizations, the upmarket strategy and a particularly large upward rent adjustment of 7%.

2007 ANNUAL REPORT

65

7 84.8) (16.2) 19.leisure Reported fiscal 2006 operating income .leisure Currency effect Change in scope of consolidation Like-for-like fiscal 2006 operating income .4% Fixed selling costs Fixed operating costs Property costs Overheads Operating income .7 (3. 66 .0 21.1) (18.leisure: Europe (in € millions . Growth in revenue was mainly attributable to the 18% increase in the number of customers booking vacations in the Americas and Asia.VILLAGES.4 2.0) (23.3 0.6 Operating income .1) (2.0 29.leisure (120.8) (4.3 0.012.5) (270.like-for-like) FY 2006 FY 2006 FY 2007 1.2 3.LEISURE OPERATING INCOME .9% FY 2007 166.9 Currency effect Change in scope of consolidation Like-for-like fiscal 2006 operating income .0 58.like-for-like) Operating Income .2 195.1) 10. The price-mix impact offset the higher costs incurred during the year.5 1.3) 28.4 (1.0 (15. Reported fiscal 2006 operating income .4) (122.leisure: Asia (in € millions . The overall increase in business volume had a €12-million impact.5) (37.7 63.8) (1.3) (40.3) (3.6 (1) Adjusted to exclude insurance settlements.6) (1.5) (273.8) 19.6 105.0 22.leisure in Asia rose sharply.1 0.9 (2. BY REGION Operating Income .1 10.6 576.0 (3.0% Revenue Business interruption insurance settlements Other revenue (including inter-regional revenue) Total revenue Margin on variable costs as a % of revenue(1) 137.1 9.leisure Volume effect Change in price mix Business interruption insurance settlements Change in margin on variable costs Fixed selling costs Fixed operating costs Property costs Overhead Fiscal 2007 operating income .3) 22.leisure 21.6) (39.leisure Volume effect Change in price mix Business interruption insurance settlements Change in margin on variable costs Fixed selling costs Fixed operating costs Property costs Overheads Fiscal 2007 operating income .4 159.0) 9.leisure (21.4) 0.3 566. (1) Adjusted to exclude insurance settlements.0) 12.5% Revenue Business interruption insurance settlements Other revenue (including inter-regional revenue) Total revenue Margin on variable costs as a % of revenue (1) 970.4 61.3 0.0) (7.022.3%.3) (1.2 56.6) 22.3) 9.1) (45.0 (3. led by the 21% Operating income .9 Fixed selling costs Fixed operating costs Property costs Overheads Operating income .4) (115. These regions were the main beneficiaries of the increase.0 (120.leisure in Europe decreased slightly while revenue in the region rose 4.0 10.6) (9. growth in sales and the increased number of Europeans vacationing in Asia.0 983.8) (8.leisure (1.5 0.

3.1) 6.1) (2.9 27.2 5.1 1.2 255.0 (2.5 FY 2007 2.9 million 44% 2007 ANNUAL REPORT 67 . OTHER BUSINESSES Villages Excluding business interruption insurance settlements(1) Business interruption insurance settlements Villages Other businesses Operating income leisure Operating income .leisure as a % of like-for-like revenue 38.2) EBITDAR .2 17.7) 2.1 23.leisure was stable in the Americas region.0 13.leisure (1.9% +18% Business interruption insurance settlements Villages Other businesses EBITDAR .4 1.1 24.3 5.1) (100.4 million the previous year.7) 0.leisure: Americas (in € millions . FY 2006 .8 (2.3) 3. Jet tours income (in € millions) FY 2006 Revenue Business interruption insurance settlements Other revenue (including inter-regional revenue) Total revenue Margin on variable costs as a % of revenue (1) FY 2007 188.7 24.0 47. Change vs.7% 184.LEISURE REVENUE TO EBITDAR FLOW-THROUGH RATE (in € millions) (1) Adjusted to exclude insurance settlements.3% FY 2006 65.3 20. thanks to a strong favorable change in the price mix which offset the sharp decline in business interruption insurance settlements.6) 20.M A N A G E M E N T R E P O RT Operating Income .8 205.5) (2.9 12.2 163.3% 217.2 million due to its stepped-up repositioning at the end of 2006.leisure: Jet tours and other businesses (in € millions) FY 2006 Jet tours Club Med Gym Club Med World Total 3.5% 20.4 248.7 25.4% FY 2007 302 36.9 184.3 14.leisure (33.3.0) 5.leisure Volume effect Change in price mix Business interruption insurance settlements Change in margin on variable costs Fixed selling costs Fixed operating costs Property costs Overheads Fiscal 2007 operating income . FY 2006 .2 Fixed selling costs Fixed operating costs Property costs Overheads Operating income .leisure Currency effect Change in scope of consolidation Like-for-like fiscal 2006 operating income .leisure (33.9 +€28 M Operating Income .2) *Semi-net margin = gross margin (revenue less purchases) after agency commissions.1 (34.3 21.2 15.1% +7% +6% Operating income .7 215.9 229.2% Revenue Semi-net margin as a % of revenue* 300 36.4 million +€32.0 13.4 (2.6 +50% +39% Operating income .like-for-like) Club Med Gym’s operating income continued to improve.leisure FY 2005 Villages Excluding business interruption insurance settlements(1) as a % of like-for-like revenue FY 2006 FY 2007 Change vs.9 219.8) 1.2) 38.9) 5.6 (2.3) (16.9 16.1 3.4 85. 1.leisure FY 2005 FY 2006 FY 2007 Change vs.5 243.8 18.8) 3.Villages EBITDAR Flow-through rate (1) Business interruption insurance settlements.6 14.6 32.2 5.1 (14.9) (22.Villages revenue Change vs.4) (18. +€73.8) (91.1) (14.0% Other costs Operating income . EBITDAR/OPERATING INCOME .0 12.6 (9. which amounted to €2 million in fiscal 2007 versus €16 million in fiscal 2006. FY 2006 (17.9 12.6) (0.3 157.5 23.7% 1.3 (1.5) (3. FY 2006 156.2 74.3 million in fiscal 2007 from €4. rising to €5.2 5.3 194. Reported fiscal 2006 operating income .leisure for Jet tours fell to €2.3) (28.1 4.

Despite these events. IFRS impact) (21) (12) (4) FY 2007 (21) (10) (1) (37) 5 (32) (432) 7. Finance cost.3. CONDENSED BALANCE SHEET (in € millions) OPERATING INCOME . The impact of costs relating to the closure of year-round Villages for renovation totaled €11 million in fiscal 2007.e.185 31 October 2007 928 191 86 1.5) 14. .72% 5. Villages EBITDAR before insurance settlements rose 18% to €217 million from €184 million.4.0 (20.0 4.4) 1.leisure Operating income management of assets Other operating income & expense Operating income Finance costs and other financial income & expense Share of income of associates Income tax Net income/(loss) Of which attributable to shareholders 1.727 32. NET INCOME/LOSS ASSETS Property.205 (37) 1.2 2. Village margins improved considerably.7 (32.4) FY 2006 Revenue Operating income .47% 6. Their closure represented a “lost” contribution of approximately €5 million.168 Club Méditerranée ended the year with a net loss of €8 million versus net income of €5 million in fiscal 2006.2) 5. This includes the significant impact of FY 2007 1. including Opio en Provence.6 applying IFRS to OCEANE convertible/exchangeable bonds.1) 3.On a reported basis. net Average debt Calculated cost of debt Cash cost of debt (excl.6 (1. 6.leisure by 39%. Growth was achieved in a difficult year primarily impacted by low winter 2007 snow levels. 1. OTHER STATEMENT OF INCOME ITEMS (in € millions) FINANCE COSTS AND OTHER FINANCIAL INCOME & EXPENSE (in € millions) FY 2006 OCEANE convertible/exchangeable bonds Finance costs Other Finance costs and other financial income & expense before exchange gains and losses Realized and unrealized exchange gains and losses Finance cost. representing a flow-through rate of around 44%. Property development profits from the sale of Villas are recognized under “Operating income – management of assets”. when a high volume of refinancing transactions was carried out. net improved due to three factors: .41% Finance costs and other financial income & expense amounted to €26 million in fiscal 2007 compared with €32 million the previous year. driven by changes in the financial model. EBITDAR . The cost of debt can be measured in two ways: . representing some €8 million in fiscal 2007.3) (10.Based on finance costs recognized in the income statement.679 23.7) 34.Based on the economic cost of debt (coupon rate + premium). .Finance costs were lower due to a roughly 15% decrease in average debt.7 (28.leisure increased by nearly 6. Fiscal 2007 was also shaped by the closure of several year-round Villages for renovation.9 2. Ixtapa Pacific and Punta Cana.Fiscal 2006 finance costs included some €2 million in costs arising on buybacks of bonds issued to finance operations in the Americas. or .Net realized and unrealized exchange gains were €1 million higher in fiscal 2007. 68 .4. plant and equipment Intangible assets Non-current financial assets Total non-current assets Government grants Total assets 31 October 2006 951 182 80 1. La Pointe aux Canonniers. The flow-through rate provides a means of comparing Villages EBITDAR growth to revenue growth.213 (28) 1.MANAGEMENT OF ASSETS Operating income from the management of assets amounted to €2 million versus €40 million in fiscal 2006.41% in fiscal 2007.4 (26.4% and operating income . i. An additional €74 million in revenue generates nearly €33 million in EBITDAR.7 39.95% (32) 6 (26) (370) 8.5 (8. 1.

net of government grants. Net borrowings totaled €336 million.922 1. the Group invested €108 million. plant and equipment concerned Villages owned jointly with partners.060 19. • Approximately 301 rooms (660 beds) per Village.589 57 120 59 395 118 749 143 12 904 Property. • The net book value per Village stood at €25 million for an average value per room of €80. mainly due to a €29 million currency negative effect that was primarily caused by the fall in the dollar and Mexican peso against the euro. 2006 Net book value at 31 Oct. The 30 owned Villages represented 39% of capacity. including a €110 million undrawn line of credit expiring in June 2010.436 34.104 4. I Assets held for sale (non-strategic and unused assets) II Mortgaged assets Net book value at 31 Oct.021 15. Non-current assets totaled €1. Club Méditerranée had €234 million in Equity declined by €24 million to €490 million at 31 October 2007.684 8.278 24.786 2. The main investments included renovation expenditure of €16 million at La Pointe aux Canonniers. PLANT AND EQUIPMENT Fully or partially owned Villages France Europe Africa Americas Asia Subtotal Villages Managed Villages Leased Villages Other assets (offices. A portion of property.2% 31 October 2007 490 51 34 257 336 1. The €63 million positive net impact of net investments and depreciation and amortization expense was offset by the €56 million effect of refinancing transactions and disposals and by a negative currency effect of €29 million.571 984 2.3 million at Opio en Provence. €11 million at Ixtapa Pacific.M A N A G E M E N T R E P O RT EQUITY AND LIABILITIES Equity Provisions Deferred taxes.813 4.IN € MILLIONS) PROPERTY. of which €904 million concerned Villages. leased Villages represented 51% and Villages operated under management contracts accounted for 10%. for gearing of 68. 2007 4 6 4 11 5 30 7 48 85 200 103 108 244 288 944 842 1.168 68.321 861 3.205 million. Working capital. 2007 93 26 130 540 789 68 118 124 439 749 III Assets that could be refinanced in the near term IV Other Village assets Total Village property. plant and equipment amounted to €928 million. a slight €8 million lower than at 31 October 2006. €6 million at Cancún Yucatán and €5. plant and equipment 2007 ANNUAL REPORT 69 .322 58. €6 million at La Plagne 2100. Most of that amount corresponded to 30 owned Villages representing €749 million.6%. as well as Jet tour’s acquisition of Quotidien Voyages (Austral Lagons). cash. PROPERTY PORTFOLIO (NET BOOK VALUE . was unchanged from 31 October 2006 at €257 million or around 15% of revenue.185 57.043 3.353 9. INVESTMENTS AND DISPOSALS (in € millions) FY 2006 Total Club Med investments net of government grants and tax-advantaged investments Disposals and asset refinancing transactions Investments net of disposals FY 2007 (151) 143 (8) (108) 65 (43) 1.6% In fiscal 2007.000.5. net Working capital Net debt Total equity and liabilities Gearing 31 October 2006 514 69 51 257 294 1. machines) Total Villages Villages Surface area (hectares) Beds Rooms Net book value at 31 Oct. At 31 October 2007. which represents a net source of funds at Club Med.502 1.

70 .7 31.3 19.00 11. Club Méditerranée owns three mortgaged Villages representing €118 million and eight Villages representing a net book value of roughly €124 million.1 17.00 22.30 43.6 749. for example in Asia Surface area (hectares) 0.00 87.60 22. Tax-advantaged investment.1 12.1 33.1 30.00 30.3 29.8 1.00 19.40 7.25 21.7 0.5 13.4 27. They correspond mainly to Villages owned jointly with partners.50 2.52 30. Minority interests of less than 20%.0 17.7 59.00 136.00 1.70 27.5 Notes Arcs Altitude Cargese Club Med 2 Dieulefit Le Fleix Cefalu Gregolimano Kemer Kos Sestrieres St Moritz Roi Soleil Assinie Cap Skirring La Pointe aux Cannoniers Louxor Cancún Yucatán Colombus Isle Ixtapa Pacific La Caravelle Les Boucaniers Punta Cana Sandpiper Mexican archeology villas Itaparica Rio das Pedras Trancoso Bali Bora Bora Cherating Lindeman Island Phuket Total Villages (1) (2) (3) (4) 1 1 1 1 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 30 2 3 4 Closed Land Closed 3 3 3 3 4 Closed 4 4 3 4 4 3 4 4 3 3 Villas 3 4 4 4 4 4 3 4 - 460 945 394 305 191 439 196 158 (3) (1) (3) (4) (1) (2) (2) Sold in Nov.3 28.50 9.00 85. Villages in countries where refinancing is more difficult to arrange and Villages on land that Club Med does not own.00 15.40 39.3 4.4 59.6 32.021 6.00 21. representing €439 million.68 15.072 901 920 880 569 580 407 420 585 272 785 473 822 620 649 1. include Villages that cannot be refinanced in the short or medium term.5 33.00 24.0 Jointly owned in a 50/50 partnership.9 0. Concession land.00 2. which could be the subject of financing or refinancing transactions in the near term.1 42.2 23.1 30.7 25.97 0.37 944.813 536 419 460 328 267 311 238 205 280 138 376 236 374 250 293 519 337 213 330 324 250 400 149 297 216 291 9.9 12.00 29. Fully or partially owned Villages Villages Tridents The remaining assets.40 14.399 751 444 700 810 590 840 300 800 475 645 19.8 8. 2007 (1) (1) (1) (3) (3) (3) (3) 1.00 40.A few Villages representing a net book value of €68 million still remain to be sold.4 24.7 28.10 33.00 138.8 33.00 Beds Rooms Net book value at 31 October 2007 (in € millions) 9.5 51.00 15.

2007 ANNUAL REPORT 71 . 2005 160 31 Oct. ACQUISITION OF QUOTIDIEN VOYAGES (AUSTRAL LAGONS) BY JET TOURS On 15 May. after taking into account disposals and refinancing transactions.In April. Jet tours announced that it had acquired Quotidien Voyages. The acquisition is part of Jet tours’ strategy to build positions in the upscale travel market.In May. 2007 36 During fiscal 2007.On 31 May. 2005 49 27 31 153 15 167 61 454 503 31 Oct. Net cash used by investing activities. 152 17 145 6 88 408 444 2. Significant Events of the Year CHANGES IN CAPITAL Changes in the Group’s ownership structure in fiscal 2007 are presented in the section “General information about the capital” on page 83 of this registration document. CASH FLOW STATEMENT (in € millions) Net borrowings at 31 October 2007 breaks down as follows: (in € millions) FY 2006 Cash flow Change in working capital Change in provisions Net cash from operating activities Acquisitions of non-current assets Proceeds from disposals of non-current assets Free Cash Flow Effect of changes in exchange rates on cash and cash equivalents and other Change in debt 22 22 3 47 (151) 143 39 (10) 29 FY 2007 24 (2) (9) 13 (108) 65 (30) (12) (42) Cash and cash equivalents Long-term borrowings and other interest-bearing liabilities Short-term borrowings and other interest-bearing liabilities Liabilities related to assets held for sale 31 Oct. . free cash flow was a negative €30 million and net debt came to €336 million.6. the facility is secured by the Cancún Yucatán Village. representing a gearing ratio of 68. amounted to €43 million in fiscal 2007 compared with €8 million the previous year. A specific €26 million loan was arranged in June 2007 to finance work at the La Pointe aux Canonniers Village in Mauritius. which does business under the name Austral Lagons. As a result. a €30 million loan was taken out to refinance the Club Med 2 cruise ship. . Club Méditerranée actively implemented its refinancing strategy. 1. FINANCING Due within one year Due beyond one year Fiscal 2007 Fiscal 2008 Fiscal 2009 Fiscal 2010 Fiscal 2011 Fiscal 2012 Beyond Total due beyond one year Total The following table analyzes borrowings by maturity: (in € millions) 31 Oct.7. 2006 165 31 Oct. which is designed to strengthen the Group’s balance sheet and extend the maturity of debt. The main refinancing transactions in fiscal 2007 were as follows: . Club Méditerranée obtained a new €120 million syndicated line of credit due June 2010 from a pool of nine banks. a €50 million loan facility was arranged. The loan is repayable in installments through April 2018.M A N A G E M E N T R E P O RT 1. 2006 113 0 20 158 5 145 18 346 459 31 Oct. 2007 108 435 346 408 48 0 483 323 109 4 459 294 36 0 444 336 Total borrowings and other interest-bearing liabilities Net debt Cash flow remained stable at around €24 million and changes in working capital were limited. leading to net cash from operating activities of €13 million. Due in 2017.6%.

with the 133.La Plantation d’Albion Club Med . 3. which is the preferred booking method for the affluent families targeted by Club Med.2% As of 8 December 2007.1 pt +8. and the closure of the archeology villas in Mexico.414 844 5. Forecast capacity for the 2008 winter season is up 3. La Caravelle.3% The offering is continuing to be resegmented.6% +14.000 additional customers worldwide.510 vs Winter 2007 -1 pt -2 pts +4 pts .406 932 5.3% compared with last winter. winter 2008 bookings were up 14.4% increase in Europe is due to the re-opening of the Opio en Provence Village. Palmiye and Villars-sur-Ollon . in the summer of 2007 the Group attracted 9. the Group met its objective of generating €140 million in revenue via the Internet. while the 5.336 Winter 2008 2% 44% 54% 0% 100% 3. Winter 2008 3. another innovation that will help to drive future growth. 72 . CAPACITY BY CATEGORY AND REGION (in thousand hotel days) Winter 2005 2 Tridents 3 Tridents 4 and 5 Tridents Other Total Europe Americas Asia Total worldwide 6% 57% 35% 2% 100% 2.461 786 5. CHANGES IN THE VILLAGE BASE Attracting more affluent customers has been a critical challenge for Club Med since the Group announced its upmarket strategy in 2004. In addition.984 1. Cancún Yucatán.4% on the prior-year date.4% +27.269 Winter 2007 3% 46% 50% 1% 100% 2.2% +16. and the first 5-Trident Village . Plots of land in Greece and Mexico were sold during fiscal 2007.011 1. This process is nearing completion.4% -5.484 927 5.STRATEGIC ADVANCES Implementation of the upscale strategy moved up a gear in fiscal 2007. Six renovated villages came back on the market Opio en Provence.231 Winter 2006 4% 53% 41% 2% 100% 3.1.2% decline in the Americas reflects the reduced capacity of the renovated Ixtapa PacificVillage. The percentage of 3 to 5-Trident Villages has steadily risen to the point that today they represent 98% of available capacity.3% +3. A certain number of villas have been built around the Village. Lastly.172 1.was opened on Mauritius. Winter 4 and 5-Trident capacity is increasing and already represents more than half of total Winter 2008 capacity. WINTER 2008 BOOKINGS (compared with winter 2007) As of 8 december 2007 Europe Americas Asia Total Club Med Jet tours +16. 4-Trident guests accounted for 45% of the customer base compared with just 24% in fiscal 2003. The 8.leading to a sharp rise in 4-Trident capacity.3% +0.2.6% +3. with variations from one region to another. Ixtapa Pacific.000-person increase in the number of 4-Trident customers last year. In fiscal 2007.925 1. 3.

the environment and labor relations. The 27.2. 4. helped by sales and marketing initiatives designed to encourage customers to book earlier.6% reduction in capacity.4. None 3. Jet tours bookings are up 25% compared with the prior-year date. More information about the Group’s sustainable development practices is provided in the Sustainable Development report. we adopt the most flexible operating formulas.000 customers compared with the prior-year date. 2007 ANNUAL REPORT 73 . CLAIMS AND LITIGATION To the best of the Company’s knowledge. PREVENTION AND COMPLIANCE Environmental risk prevention and management Our businesses do not give rise to any specific environmental risks. Objectives assigned to subsidiaries Our subsidiaries outside France are required to apply our general environmental policy.M A N A G E M E N T R E P O RT These figures include a net gain of some 30. pages 34 to 60. due to the lack of snow in winter 2007. Bookings in Asia are up 16. The risk of environmental damage caused by the technical installations at vacation villages is managed by performing regular inspections. Excluding Austral Lagons. 3. Compliance No provisions for environmental liabilities arising from court decisions have been recorded in the fiscal 2007 financial statements of Club Méditerranée SA. ENVIRONMENTAL RISKS None 3. In view of the unpredictability of these risks.2.1.1. The 3. OTHER INFORMATION 3. To limit our exposure in high-risk countries. it is very difficult to assess their potential impact on our financial statements. Examples of where this solution is applied include the El Gouna Village in Egypt and Coral Beach in Israel. 4. We also ensure that our subsidiaries comply with local regulations. The related risk is reduced by our business model which focuses on variabilizing operating costs. It is based on a map of critical operational risks. Economic slowdowns in the regions where the Group does business adversely affect demand for leisure activities generally and for vacation travel in particular.2. EXCEPTIONAL EVENTS. The total includes Austral Lagons which has increased bookings by 39%. assets and liabilities or financial position of the Company or the Group. SUBSEQUENT EVENTS 4. ECONOMIC AND GEOPOLITICAL RISKS The Group’s vacation village operations are particularly sensitive to economic cycles and weather conditions. no environmental provisions or warranties have been recognized in the fiscal 2007 accounts. Due to the absence of material risks. Risk Factors Club Méditerranée’s corporate risk management policy is designed to effectively protect both the interests of shareholders and customers and the environment. Economic-driven fluctuations in demand can cause significant changes in revenue.4. They are also encouraged to share experience and best practices in the areas of business practices.4. there are no claims.3.3% growth in Europe is particularly noteworthy in that gains have been balanced between France and the other countries in the region. representing a strong performance on the back of a 47.2% growth in the Americas has been achieved despite a 5. Our presence in over forty countries increases our exposure to worldwide geopolitical risks.2% increase in Jet tours bookings confirm the success of its repositioning.4% rise in year-to-date bookings as of 8 December 2006. but have since gained momentum.1. The increase is even greater for sun Villages.6%. such as management contracts. DEPENDENCE ON PATENTS OR SUPPLY CONTRACTS 4. litigation or exceptional events that could have a material adverse effect on the results of operations. The strong 16. Winter 2008 snow village bookings got off to a slow start. which serves to prioritize risks based on their frequency and their financial and business impact.

employees or local authorities.1. XL and AGF. on the number and circumstances of claims. RSA. In the latter case. 74 . managed and hedged at Group level. and included ACE Europe. in the interests of our customers. in accordance with the policies approved by the Audit Committee. The insurance pool for the Property Damage and Business Interruption Program was led by ACE Europe and the London insurance market. The program was renewed in January 2007 for 16 months.2. country and region.RISK COVERAGE (see also note 18 to the consolidated financial statements “Financial instruments”). these instruments are used primarily to hedge currency risks on future transactions. AWAC.Balance sheet risk arising from financing raised in a currency other than the Group’s functional currency and from the Group’s net investment in foreign operations. In the normal course of business. the Group is exposed to various market risks. It is lead-managed by Generali and includes GAN. Where necessary. Provisions are booked for the cost of identified risks. The program provides worldwide cover. CURRENCY RISK Insurable risks are managed by taking out insurance cover at Group level.1. 4. 4. we have set up reporting systems providing detailed and summary information by Village. the resulting unrealized exchange gains and losses are recognized directly in equity. • Property Damage and Business Interruption Program. In practice. 4.4. assessed. as soon as the amounts involved can be reasonably estimated. After the natural disasters of 2005. Coverage is capped at €100 million per claim. Specific rules have been drawn up and approved banning the use of derivative instruments for trading purposes. we offer all of our cus- The nature of the Group’s business and the fact that its operations are conducted in a large number of countries with differing and sometimes contradictory regulations is a source of operating difficulties and can lead to disputes with suppliers. taking into account the nature of the business and its international nature. based on the nature of our business. with lower caps applying in some specific cases depending on the type of risk. with better cover at a more attractive price. Tokio Marine. including currency. Our exposure concerns three types of currency risk: . The international nature of our business exposes us to currency risks arising from the impact of changes in exchange rates on revenue. such as fire and natural disasters. LEGAL RISKS ARISING FROM THE GEOGRAPHIC DIVERSIFICATION OF THE BUSINESS In fiscal 2007. we purchased insurance cover primarily through the Marsh global insurance brokerage network. In addition to insuring our own risks.3.3. This information ensures that immediate action is taken to implement preventive and safety measures. based on the insurance values of assets at the Club Med sites. LEGAL RISKS 4. interest rate and liquidity risks. income and balance sheet items. This program covers all risks affecting our assets. .4. FINANCIAL RISK MANAGEMENT POLICY To the best of the Company’s knowledge. LEGAL PROCEEDINGS AND EXCEPTIONAL EVENTS tomers throughout the world extensive assistance cover purchased from Europ Assistance. Risk management tools and global insurance programs have been set up in partnership with pools of leading insurers. The insurance pool for the Third-Party Liability program was unchanged in 2007. separate cover is purchased locally or for specific activities. owners. covering the Group’s liability towards customers and other third parties. there are no other legal proceedings pending or in progress that could have a material impact on its business or results of operations. To reduce our exposure to risks.3. XL and ACE. an overall assessment of the risks associated with Club Med sites and case law. ACE Europe became the lead insurer for the program in 2007.5. 4. since fiscal 2006 we have followed a policy of transferring risks to the insurance market whenever possible. Financial risks are identified. The maximum insured value of €114 million has been maintained. The main global insurance programs are as follows: • Global Third-Party Liability Program.Transaction risk arising from marketing activities (in outbound zones) and operating activities (in inbound zones). without using a captive insurance or reinsurance company. as well as the related cost. by the Treasury and Financing unit. the Group may use derivative financial instruments to hedge currency risks arising in the course of its business and interest rate risks on floating rate debt. From time to time.5. INSURANCE .

Canadian and Australian dollars and Korean won) and in US dollars. AUD: Australian dollars. we hedge exposures for the coming fiscal year in the principal billing currencies (mainly sterling. intra. JPY: yen. mainly currency swaps and options. yen. Tunisian dinar. which is both a billing and an operating currency. MXN: Mexican pesos.M A N A G E M E N T R E P O RT TRANSACTION RISK To permit transaction risks to be managed at Group level. KRW: Korean won. forward contracts and non-delivery forward contracts. Our policy consists of obtaining protection against the effects of exchange rate changes on reported net income compared with the budget. Our net exposure to currency risks on operating transactions (transaction risk) is presented in the following table. Indonesian rupiah and Thai baht) are not systematically hedged. CAD: Canadian dollars. Currency risks are hedged using derivative instruments. amounts not in parentheses correspond to sales of foreign currencies. TRY: Turkish new lira. GBP: pounds sterling. TND: Tunisian dinars. the impact of changes in the American currency on our operating income in the US is entirely offset at Group level.and inter-regional payment flows are centralized at the level of a regional “wholesaler”. since Japan is both an outbound and an inbound zone.600 76 - (3) (500) (25) 340 - - - - (3) (2) 15 22 8 5 1. The notional amount of hedges is limited to the future cash flows forecast in the budget.600 7 Amounts in parentheses correspond to purchases of foreign currencies.Marketing subsidiaries are billed in their local currency by the “wholesaler”. USD: US dollars. As some operating expenses are paid in US dollars. Turkish lira. 2007 ANNUAL REPORT 75 .Operating subsidiaries bill the “wholesaler” in their local currency. and . Based on budget forecasts.200 7 4 3 (65) (4) (350) (31) (50) (28) (18) (11) 8. Exposures in some currencies are partially self-hedged. Currency risks in our operating currencies (mainly Moroccan dirham. Exposure to transaction risk at 31 October 2007 (in millions) USD Net exposure to currency risks on operating transactions Notional amount of derivative instruments (cash flow hedges) Net exposure of 2008 cash flows after hedging at 31 October 2007 Net exposure converted into euros GBP AUD JPY CAD MXN MAD TND TRY KRW (80) 15 10 1.700 29 (405) (350) (50) (18) 8. MAD: Moroccan dirham. Under this system: . No derivative instruments are acquired for trading purposes. This is the case for example of the yen.

Gearing < 1 . The Group has a combination of fixed and floating rate debt.3 LIQUIDITY RISK The covenants were complied with at 31 October 2007: .Gearing (net debt/equity) < 1 .42x Liquidity risk is managed by using diversified sources of financing. This risk is not hedged using derivative instruments. EBITDA is defined as operating income leisure before depreciation.5.Leverage (net debt/EBITDA) < 4. Ratios applicable to the €120 million syndicated line of credit and the loan secured by the Club Med 2 cruise ship are as follows: .Fixed charge cover > 1.7 million increase in finance costs.BALANCE SHEET RISK Some of the Group’s debt facilities include acceleration clauses that are triggered in the event of a breach of debt covenants or certain asset sales. 4. The carrying amount of financial assets and liabilities is not adjusted for changes in interest rates and fair value risk therefore corresponds to the opportunity cost of a fall in rates.0 There are two types of interest rate risk: . 4. Under the redefined covenants. .50x 1.Cash flow risk on floating rate net debt.Off-balance sheet commitments < €200 million . At 31 October 2007. amortization and provisions.35 1.0 Total Fixed rate debt 368 72 Floating rate debt* Derivative instruments 4 Total 444 Less than one year 12 20 4 36 One to five years 290 30 320 More than five years 66 22 88 .Off-balance sheet commitments < €200 million . This type of risk is not hedged. The Group does not hold any material interest-bearing assets.Leverage (net debt/EBITDA as defined above) < the following ratios: 30 April 2007 2008 2009 and beyond 31 Oct.45 A 1-point increase in short-term interest rates applied to the Group’s net floating rate debt would lead to a €0. The loan agreement includes certain debt covenants.5 3.5. and the outstanding debt may become immediately repayable. 76 .Fixed charge cover (EBITDAR/(rent + net interest expense)) > the following ratios: 30 April 2007 2008 2009 and beyond 31 Oct.25 1. At 31 October 2007. Maturities of debt are presented on page 71 of this registration document. to take into account the transition to IFRS. no interest rate hedges were set up as average floating rate net debt represented just 16% of total debt. corresponding to the impact on future finance costs of an increase in interest rates.0 3. The impact of these fluctuations on net investments in independent subsidiaries is recognized as a separate component of equity. 1. 4. CONFIRMED LINE OF CREDIT The Group’s exposure to currency risks on external debt is limited and intra-group financing is generally denominated in the subsidiary’s functional currency.25 1. In fiscal 2007.2 INTEREST RATE RISK Club Méditerranée has a €120 million line of credit obtained on 31 May 2007 and expiring in June 2010. DEBT COVENANTS The Group’s debt covenants were redefined on 30 April 2006.25x €118m 0. Any breach of the ratios defined in the covenants constitutes an event of default. 1. Changes in the value of hedges of the net investment in foreign operations are recognized directly in equity.00x .45 * Including bank overdrafts. The Group’s net investment in foreign operations is exposed to the risk of fluctuations in foreign currencies against the euro.69 3.75 3. the Group’s exposure to interest rate risk by maturity was as follows: (in € millions) 3. the line was drawn down in the amount of €10 million.Fair value risk on fixed rate net debt.

Club Méditerranée SA ended the year with a net loss of €38 million compared with a net loss of €14 million for the year ended 31 October 2006.4 EQUITY RISK Parent Company The parent company of the Club Méditerranée Group is Club Méditerranée SA. following an increase in provisions related to subsidiaries. Club Méditerranée SA operates Villages under the Club Med brand in France and abroad. it is not exposed to any risk of fluctuations in stock prices. 2007 ANNUAL REPORT 77 . Temporary cash surpluses. As a result. 2008 FINANCIAL CALENDAR 11 March 2008: Annual Shareholders’ Meeting and first-quarter revenue release. 4. September 2008: Third quarter revenue release. Consequently.M A N A G E M E N T R E P O RT 4. June 13.5. As well as acting as the Group holding company. its financial results and their year-on-year change only partially express the Group’s performance and do not reflect the same trends as the consolidated financial statements. The loss was primarily due to the increase in net financial expense to €41 million from €9 million in fiscal 2006. apart from treasury stock which is recorded as a deduction from equity. representing limited amounts. 11 December 2008: Fiscal 2008 results release.5 CREDIT AND COUNTERPARTY RISK Most customers pay for their vacation before they leave and the Group’s exposure to credit risk on commercial transactions is therefore limited. Transactions involving derivative instruments and borrowings are entered into with a wide range of leading counterparties. 2008: Fiscal 2008 interim results release. The Group does not hold any listed equities. are invested in certificates of deposit or Sicav money market funds purchased from leading banks.5.

78 .

GENERAL INFORMATION 80 – GENERAL INFORMATION ABOUT CLUB MÉDITERRANÉE 83 – GENERAL INFORMATION ABOUT THE COMPANY’S CAPITAL 88 – GENERAL INFORMATION ABOUT CLUB MÉDITERRANÉE SECURITIES 90 – CORPORATE GOVERNANCE 2007 ANNUAL REPORT 79 .

the creation and operation of design offices. advances and credits. 225-17 to L. The income remaining. is then appropriated as follows: . if for any reason. provided that. More generally. on any basis. educational. The Company may assist its subsidiaries by any method. logo or emblem owned or registered by the Company in the future. the creation or acquisition and operation of any and all equipment. of land. in France or abroad. 75957 Paris Cedex 19. purchase and/or sale and leasing. minutes of Shareholders’ Meetings. commercial or financial operations. This appropriation ceases to be compulsory once the legal reserve represents one-tenth of the Company’s capital. rue de Cambrai. management and maintenance of hotels. including the prospecting. the Company may conduct all industrial. food and transport for participants. directly or indirectly related to the corporate purpose of the Company as described above and any other similar or related purposes. tourist. including the acquisition. 80 . including by extending loans. the construction. France. 2095 unless it is wound up in advance or its term is extended by decision of an Extraordinary Shareholders’ Meeting. cultural or artistic purposes. 225-56 of the Commercial Code. financial statements and Auditors’ reports are available for consultation at the Company’s head office. Fiscal year The Company’s fiscal year begins on 1 November and ends on 31 October. organization or delivery of travel and holiday packages. Legal form and governing law Club Méditerranée (the Company) is a French société anonyme (public limited company) governed by the laws of France. the creation or acquisition and operation of any and all businesses or facilities conducting the same activities. holding and management of interests in any industrial or commercial venture. creation.APE Code 552 E Corporate purpose (article 2 of the bylaws) Club Méditerranée was established to develop and manage hotels.To any extraordinary reserves or to revenue reserves. or emblems owned by the Company. restaurants and holiday centers and/or leisure facilities and/or entertainment facilities. Registered office and head office 11. is appropriated to the legal reserve. except in the case of a capital reduction. it must be restored to the required level by the same method. including Articles L. involving both movable property and real estate. whether directly or indirectly. holiday centers and/or leisure facilities and/or entertainment facilities and any and all activities relating thereto. participation by any method and in any form in any and all existing or future ventures or companies. the legal reserve falls to below one-tenth of the capital.GENERAL INFORMATION ABOUT CLUB MÉDITERRANÉE Company name Club Méditerranée. However. educational. the organization of events and shows. Appropriation of income Article 36 of the bylaws states that at least five percent of net income for the year. by decision of the Annual Shareholders’ Meeting. Term The Company will be dissolved on October 31. the organization of tours and excursions. the performance thereof and the provision of any related consulting services. logos Consultation of corporate documents The bylaws. less any prior year losses and any other amounts to be credited to reserves pursuant to the law or the Company’s bylaws. movable property and real estate. plus any unappropriated retained earnings brought forward from prior years. cultural or artistic activities. the design. the promotion. subject to compliance with applicable laws and regulations. . the provision of accommodation. less any prior year losses. the drafting and signature of any and all contracts for the same purposes. organizations and facilities for sporting. fitting out. Incorporation details 572 185 684 RCS Paris . no distributions are made to shareholders if shareholders’ equity represents – or would represent if the distribution were to be made – less than the sum of capital and non-distributable reserves. or under any new brand. the organization and execution of sporting. tourist.To the payment of a dividend. production and marketing – directly or indirectly through a licensee or other partner – of any and all products and services that can be distributed under the brands.

In this case. 5 .G E N E R A L I N F O R M AT I O N The Annual Shareholders’ Meeting may also decide to pay all or part of the dividend out of revenue reserves or to effect an exceptional distribution of revenue reserves. in which case only the named shareholder or proxy may use the card. the reserves against which the dividend is to be charged must be designated in the related resolution.5% of the Company’s capital or voting rights or any multiple thereof is required to notify the Company of the total number of shares and voting rights held. dividends must be paid within nine months of the year-end. Any losses recorded in the financial statements approved by the Annual Meeting are recorded in a special reserve account and set off against income earned in subsequent years until they have been absorbed in full. However.Shareholders may give proxy only to their spouse or another shareholder. lodged a proxy or requested an admission card or participation certificate (attestation de participation) in accordance with the applicable regulations may still sell all or some of their shares.All shareholders may vote by mail. Shareholders who have cast a postal vote. Details of how to obtain postal voting forms are provided in the notice of meeting. one-fifth. Under no circumstances may interim dividends exceed the profit available for distribution thus defined. one-quarter. The method of payment of cash dividends is decided by the Annual Meeting or. Article 7 of the bylaws stipulates that any shareholder acting alone or in concert with others that directly or indirectly acquires a number of shares representing at least 0. three-twentieths. In the event such shares are transferred or converted to bearer form. if any shares are sold by any method after the record date. 4 . 3 . 2 . for shareholders to be entitled to participate in Shareholders’ Meetings or cast a postal vote. one-half. proxy. two-thirds. However. Disclosure thresholds Attendance and representation at shareholders’ meetings 1 . For the purpose of determining whether a disclosure threshold has been crossed. or a donation inter vivos to a spouse or relative in the direct line of succession. If the audited annual or interim financial statements show that the Company has generated a profit for the period – after deducting depreciation. the Company will take the appropriate measures to cancel or amend any related postal vote. However. If the sale takes place prior to the record date. eighteen-twentieths and nineteen-twentieths thresholds provided for in Article L 233-7 of the Commercial Code. using the postal voting form issued by the Company. The Annual Meeting may offer shareholders the option to reinvest all or part of the interim or final dividend in new shares. In all cases. the sale will not be reported to the Company by the shareholder’s bank or broker (intermédiaire habilité) and will not be taken into account by the Company. their shares must be recorded in accordance with the relevant regulations no later than midnight (CET) on the third business day preceding the meeting (the record date).All shareholders have the right to attend Shareholders’ Meetings in accordance with the applicable law and to take part in the vote. The Board of Directors may decide to issue individual admission cards to shareholders. upon presentation of evidence of their identity.Pursuant to the applicable laws and regulations. These disclosure thresholds apply in addition to the one-twentieth. Holders of bearer shares will be admitted on presentation of the proof that their shares have been recorded as described above. exchangeable. shareholders will be invited to amend the disclosure threshold provided for in the Company’s bylaws from 0. one-third. no distributions of reserves may be decided if distributable earnings for the year have not been fully distributed. they are stripped of their double voting rights.Holders of registered shares will be admitted to the meeting on presentation of evidence of their identity. Disclosure must be made by registered letter with return receipt requested. irrespective of any agreement providing otherwise. and taking into account any unappropriated retained earnings – an interim dividend may be paid prior to the approval of the financial statements for the year. within five trading days of the date on which the disclosure threshold is crossed. admission card and/or attestation de participation. The same disclosure rules apply if a shareholder’s interest is reduced to below any of the above thresholds. double voting rights are not lost and the two-year qualifying period continues to run if the shares are transferred in the estate of a deceased shareholder. in person or by proxy. account is taken of any securities that are convertible. unless the court grants an extension. redeemable or otherwise exercisable for shares of the Company. failing that.5% of the 2007 ANNUAL REPORT 81 . or in connection with the settlement of the marital estate. by the Board of Directors. Double voting rights Article 8 of the bylaws stipulates that all fully paid shares registered in the name of the same holder for at least two years carry double voting rights. amortization and provision expense as well as any prior year losses and any amounts to be appropriated to reserves pursuant to the law or the bylaws. At the Annual Shareholders’ Meeting to be held on 11 March 2008. whatever the number of shares held. one-tenth.

233-3. human resources. financial. or otherwise exercisable for voting shares. Identifiable bearer securities The bylaws authorize the Company to apply at any time to the French securities clearing agency for details of the identity of holders of voting shares and any securities convertible.228-2 of the Commercial Code. communication. marketing.Company’s capital or voting rights to 1%. They are billed at cost. the terms “shares” and “voting rights” have the same meaning as in Articles L. redeemable. duly noted in the minutes of the Shareholders’ Meeting. For the purpose of applying these rules. exchangeable. 82 . IT and sales services.233-10 of the Commercial Code. L. training. legal.233-9 and L. the shares in excess of the relevant threshold will be stripped of voting rights at all Shareholders’ Meetings for the period provided for by law at the request of one or several shareholders together holding at least 5% of the Company’s capital or voting rights. The Company makes such applications each year. including administrative. and of the number of securities held by each such holder. pursuant to Article L. In the case of failure to comply with these requirements. which corresponds to a satisfactory level for precisely ascertaining the Company’s ownership structure. Services provided by the company to subsidiaries Services provided by Club Méditerranée SA in its capacity as parent company to its subsidiaries include the usual senior management and support services.

783 convertible bonds (OCEANEs) due 1 November 2010 + 1.370. redeemable.740 consisting of 25.G E N E R A L I N F O R M AT I O N GENERAL INFORMATION ABOUT THE COMPANY’S CAPITAL Share capital At 31 October 2007 the Company’s share capital amounted to €77.160.861. The purpose of these authorizations – which expire in May 2009 – is to enable the Company to issue shares and share equivalents in order to raise any necessary financial resources in a swift and flexible manner.225-127 et seq of the Commercial Code.482. unissued capital The Ordinary and Extraordinary Shareholders’ Meeting of 8 March 2007 approved several resolutions authorizing the Board of Directors to increase the Company’s capital. Shares registered in the name of the same holder for at least two years carry double voting rights (949. The Company’s share capital was €50. representing a potential dilution of 33.731 convertible bonds (OCEANEs) due 1 November 2008 + 3.800 higher at 31 October 2007 than one year earlier due to the exercise of stock options during the period which led to the issuance of 12.193.705 shares outstanding at 31 October 2007: + 2.592 at 31 October 2007). These figures take into account all the securities outstanding at 31 October 2007 that are convertible. Authorized.000 options 46 600 shares (1) Amount included in the overall authorized ceiling: €75 million (40th resolution of the Shareholders’ Meeting of 8 March 2007).935 potential shares at 31 October 2007 Potential capital The exercise of all outstanding equity warrants and stock options would result in the Company’s capital being increased to €103.700 new shares.370. (2) Amount included in the €20 million ceiling relating to the issue of shares and share equivalents without pre-emptive subscription rights.820.092.490 shares to be granted free of consideration = 25.226 stock options outstanding at 31 October 2007 + 44. 19. The Board of Directors may delegate the right to use these authorizations in accordance with the Company’s bylaws and Articles L. (3) The number of outstanding options may not exceed one-third of the Company’s common stock (Article L. all fully paid up. divided into 19. additional paid-in capital or profit Issue of shares and share equivalents in connection with a public exchange offer Issue of shares and share equivalents in payment for contributed assets Increase in the number of securities to be issued in the event of the issue of shares and share equivalents either with or without pre-emptive subscription rights (greenshoe option) Employee share issue Stock options for corporate officers and employees Share grants Maximum amount Equity: €20 million(1) Debt: €300 million Equity: €20 million(1) Debt: €300 million 10% of capital per year Equity: €32 million(1) Equity: €20 million(2) 10% of capital 15% of the initial issue based on the same price €3 million(1) (2) 10% of capital(3) 1% of capital(1) Duration Expiry date Used in fiscal 2006/2007 Not used Not used Not used Not used Not used Not used Not used Total used 26 months 7 May 2009 26 months 7 May 2009 26 months 7 May 2009 26 months 7 May 2009 26 months 7 mai 2009 26 months 7 May 2009 26 months 7 May 2009 Not used 26 months 7 May 2009 26 months 7 May 2009 125.600 shares 125.174-17).935 shares of common stock.447.705 common shares with a par value of €4. exchangeable or otherwise exercisable for common shares at a future date.861.5%.225-182 of the Commercial Code and Article D. 2007 ANNUAL REPORT 83 .000 options 26 months 7 May 2009 46. Financial authorizations at 31 october 2007 Authorization Issue of shares and share equivalents with pre-emptive subscription rights Issue of shares and share equivalents without pre-emptive subscription rights Issue of shares and share equivalents with no set issue price Capital increase to be paid up by capitalizing retained earnings.

184 20.358.6 9.219 387.791 1.177 3.162.7 4.9 9.358.432 50 77.358.0 15.432 77.432 77.005 19.588 shares held in treasury that do not carry voting rights.7 2.000 3.741 4.9 10.591 3.432 77.3 21.777.370.577 769.922.370.0 0.935.0 31 October 2007 1.739 201.588 27.432 77.666 2.730 387.899.5 3.811 2.297 % 9.0 24.162. Voting rights % 10.9 11.577 769.573 993.047.630 909.731 4.801 1.6 1.219.421.731 4.0 10. 84 .700 19.690 19.777.297* * Taking into account 201.005 12.005 19.7 1.5 1.432 77.005 19.5 5.8 23.160 2.320.0 6.801 1.739 201.385.005 19.705 Single voting rights Double voting rights Total voting rights 18.005 19.358.9 100.160 2.935.7 4.358.358.007.Changes in capital since 31 october 2001 Share capital €’000s At 31 October 2001 At 31 October 2002 At 31 October 2003 At 31 October 2004 At 31 October 2005 At 31 October 2006 At 31 October 2007 77.1 11.573 993.229.482 Additional paid-in capital €’000s 412 19.615.630 909.588 54.2 16.0 4.6 5.320.0 0.047.177.1 18.9 100.0 1.666 2.1 4.705 Exercise of options Number of shares Type of transaction Analysis of ownership structure Number of shares 31 October 2007 Fipar Int (CDG Maroc) Accor Rolaco Nippon Life* Total Board of Directors Treasury stock Employees Richelieu Finance Air France Finance GLG Partners LP Susquehanna Ireland Ltd French institutions Foreign institutions Public and other Total * Non-voting director.800 20.235.113 1.

03. • To purchase shares for allocation on exercise of stock options granted to employees. • To purchase shares for subsequent cancellation. On 11 July 2007.588 shares were held in treasury. the maximum purchase price per share under this authorization is €70 and the minimum sale price is €30.225-209 et seq. Shareholders will be asked to renew the share buyback authorization at the Annual Meeting on 11 March 2008. Under the terms of this authorization.000. At 31 October 2007. The authorization given to the Board of Directors to trade in the Company’s shares on the stock market.G E N E R A L I N F O R M AT I O N Trading in the company’s shares AUTHORIZATION TO TRADE IN THE COMPANY’S SHARES For transactions to stabilize the share price. This minimum sale price applies to the resale of shares acquired under this share buyback program and/or any programs authorized by previous shareholders’ meetings. A total of €2. of the Commercial Code and European Commission Regulation 2273/2003 was renewed at the Annual Shareholders’ Meeting of 8 March 2007 (fifteenth resolution) for a further period of eighteen months. the Company purchased 251. • To purchase shares to be exchanged for stock in other companies or to be used as consideration in connection with acquisitions. Club Méditerranée entered into a liquidity agreement with Natixis Securities that complies with the AFEI Code of Ethics as approved by the French securities regulator (Autorité des Marchés Financiers) on 22 March 2005. On 11 January 2008.000 has been allocated to the related liquidity account. in accordance with Articles L. The authorization may be used in the following order of priority: • To maintain a liquid market in the Company’s shares under a liquidity agreement that complies with the Code of Ethics of the French Association of Investment Firms (AFEI).53 and sold 277.510 shares at an average price of €49. a total of 201. 2007 ANNUAL REPORT 85 .717 shares at an average price of €49. the number of shares purchased may not exceed 10% of the capital. pursuant to an addendum to the liquidity agreement. Between 8 March and 31 October 2007. an additional one million shares were transferred to the liquidity account. expiring on 7 September 2008.

500 7.07.06.2007 18.2007 11.05.04.500 5.2007 02.000 5.2007 02.LIST OF TRADES IN THE COMPANY’S SECURITIES CARRIED OUT DURING THE YEAR ENDED 31 OCTOBER 2007 GOVERNED BY ARTICLE L.000 15.03.500 7.000 5.000 15.2007 18.2007 02.2007 Corporate officer Michel Wolfovski Executive Vice President Michel Wolfovski Executive Vice President Laurence Berman-Clément Member of the Management Committee Laurence Berman-Clément Member of the Management Committee François Salamon Executive Vice President François Salamon Executive Vice President Olivier Sastre Member of the Management Committee Olivier Sastre Member of the Management Committee Michel Wolfovski Executive Vice President Olivier Sastre Member of the Management Committee Olivier Sastre Member of the Management Committee Persons closely related to Michel Wolfovski Executive Vice President Henri Giscard d’Estaing Chairman and Chief Executive Officer Henri Giscard d’Estaing Chairman and Chief Executive Officer Michel Wolfovski Executive Vice President Michel Wolfovski Executive Vice President Franck Gueguen Member of the Management Committee Franck Gueguen Member of the Management Committee Shares/Other financial instruments Other financial instruments Other financial instruments Other financial instruments Shares Other financial instruments Shares Other financial instruments Shares Other financial instruments Other financial instruments Shares Shares Type of transaction Sale of call options Purchase of put options Purchase Sale Purchase Sale Purchase Sale Purchase Purchase Sale Sale Number of securities 15.000 15.2007 18.000 5.2007 10.000 86 .2007 18.2007 11.2007 17.04.000 5.000 15.03.04.000 15.04.000 02.2007 10.2007 Other financial instruments Shares Other financial instruments Shares Other financial instruments Shares Purchase Sale Purchase Sale Purchase Sale 8.500 8.2007 18.2007 30.2007 29.07.000 15.04.000 15.04.05.07.07.621-18-2 OF THE MONETARY AND FINANCIAL CODE (CODE MONÉTAIRE ET FINANCIER) Date of transaction 30.07.000 5.04.2007 17.07.

As a result Icade has withdrawn from the shareholders’ pact. Richelieu Finance disclosed that it once again raised its interest in the Company. Richelieu Finance disclosed that following sales of Club Méditerranée shares on the open market. In letters dated 12 and 17 April.58% of the Company’s total capital and voting rights respectively. representing 9.5%.212 shares.9%. Icade informed the Company that it had sold its 4% stake in Club Méditerranée.38% of the capital. • 2007 .5% of the Company’s shares to Generali France. following which it had a remaining 5. Richelieu Finance informed the Company that it had raised its interest to 4. As part of its strategy to refocus operations on its Hotels and Services businesses. and that it held 3.45% of the Company’s capital and 20. Fipar Holding (a subsidiary of Caisse de Dépôt et de Gestion du Maroc). on 14 June 2007 it had reduced its interest in the Company to below the 25% threshold for capital and voting rights and below the 20% threshold for capital. representing 26.730 shares and 4. representing 10. Air France Finance (holder of a 2% interest) and Icade (whose interest amounted to 4%). On 17 April 2007. representing 23. Richelieu Finance subsequently continued to raise its shareholdings and at 31 October 2005 held 4. Caisse de Dépôt et de Gestion du Maroc (through its subsidiary Fipar Holding which had acquired a 10% interest).978 shares representing 4. corresponding to 17.107. and that it held 3. Following this transaction.895.668.5% to 8.219 voting rights.857 shares of Club Méditerranée common stock.On 25 January 2005. following sales of Club Méditerranée shares on the open market. The pact includes a two-year lock-up and standstill clause. • 2006 . Accor informed the Company that it had reduced its holdings to below the 10% threshold for both capital and voting rights and that it directly held 1.On 18 April 2006. On 30 October 2007.369 shares. on 9 June 2006 Accor announced that it had decided to sell the bulk of its stake in Club Méditerranée. Accor then sold a further 1.67% and 21.4% to divest. representing 25.87% of the voting rights.249 Club Méditerranée shares. Shareholders’pacts In connection with the reorganization of Club Méditerranée’s ownership structure.006.492 shares.615. representing 22.28% of the capital. Icade and the Air France-KLM group held respective interests of 10%. On the same date. Richelieu Finance informed the Company that it held 3. representing 18.95% of the capital.88% of the capital and 9. To the best of the Company’s knowledge. 2007 ANNUAL REPORT 87 .912. In a letter dated 20 June 2007. these shareholders have illustrated their long-term commitment to holding a stake in Club Méditerranée with a view to enabling the Company to continue to implement its strategy via the backing of a solid ownership structure. The planned transaction – which concerned refinancing three Club Med Villages – could not be completed by that date as the related economic and financial conditions were not suitably advantageous for Club Méditerranée. Following these sales the fund manager Susquehanna Ireland Ltd.349 shares. Icade’s signature of the pact was subject to a condition precedent of entering into a real estate partnership agreement with Club Méditerranée by 30 September 2006.36% of the capital and 9. Accor first sold a 16% interest to a group of investors which have signed a shareholders’ pact with Accor (see “Shareholders’ Pacts” below).377. no other shareholders’ pacts exist.467 voting rights.564.76% of the voting rights in accordance with the Shareholders’ Pact signed on 9 June 2006.147. By signing this pact. On 7 August 2006.On 23 January 2007.78% of the voting rights.9% of the capital out of its total holding of 28.385.G E N E R A L I N F O R M AT I O N Changes in ownership structure over the last three years Changes in ownership structure over the last three years were as follows: • 2005 . representing 18. Richelieu Finance increased its holdings in the Company to 5. GLG Partners informed the AMF that it had crossed the threshold of 10% of the Company’s capital and that it held 2. Accor informed the Company that it had further reduced its interest in Club Méditerranée to 6% of the capital and 5. 4% and 2%. a shareholders’ pact relating to 22% of the Company’s shares was signed on 9 June 2006 between Accor (which had retained a 6% stake in the Company).18% of the voting rights.57% of the Company’s capital. had acquired a stake in the Company and the percentage interest held by GLG Partners – a Londonbased investment firm – increased from 3.

Between the beginning of each fiscal year and the ex-dividend date.445.001.80 Capital 13. new shares issued ex-dividend are traded on the cash settlement market.40 51.GENERAL INFORMATION ABOUT CLUB MÉDITERRANÉE SECURITIES Club Méditerranée shares were originally floated on the Paris stock exchange in 1966 and are currently traded on the first market of Euronext.25 45.26 39.40 56.40 31. brokers.00 49.545.73 50.95 45.40 47.90 42.55 32.615.99 48.00 45.20 45.72 42.98 47.20 29.63 88 .61 Monthly average daily trading volume (number of shares traded and thousands of euros) No. of shares 21.00 42.00 48.11 52.11 53.44 46.143.01 Average 42.50 48.829.30 54.10 33.158.99 Low 40.43 169.09 43.40 42.64 38. financial analysts.369.223.80 32.81 46.74 43. Club Méditerranée shares have been selected as a support for covered warrants issued by various banks.99 52.35 47.00 40.20 33.95 54. Club Méditerranée shares are eligible for Euronext’s deferred settlement service. Trading performance of Club Méditerranée securities Common stock (ISIN: FR 0000 121568) Monthly share price (euros) High January 2007 February 2007 March 2007 April 2007 May 2007 June 2007 July 2007 August 2007 September 2007 October 2007 November 2007 December 2007 44.75 43.00 156.61 21. Prices and trading volumes for Club Méditerranée common stock and OCEANE convertible/exchangeable bonds are presented below. portfolio managers and private investors of developments affecting the Group. Common shares are traded under ISIN code FR 0000 121568.748. For several years.41 44.47 44.46 50.68 51.10 52.22 43.49 46.20 46.40 17. press releases are distributed to the main press agencies and published in a number of newspapers. as well as on the Company’s website.10 20. To inform shareholders.20 46.81 48. Club Méditerranée is one of the 120 stocks included in the SBF 120 index.60 59.896.55 52.70 44.757.

28 66.00 67.39 56.51 66.85 56.70 56.00 54.225 312 8.75 31 Oct.00 65.444 387 178 354 116 508 Capital 37 11 32 25 65 17 470 23 10 19 6 26 - Low(2) 48.62 66.84 66. tax credit based on 31 Oct.145 82 216 99 339 Capital 14 18 9 59 6 7 10 145 5 14 7 22 - 4.00 51.20 70.00 60.07 54.50) (ISIN: FR 00 10130732) High(1) December 2006 January 2007 February 2007 March 2007 April 2007 May 2007 June 2007 July 2007 August 2007 September 2007 October 2007 November 2007 December 2007 Source: Fininfo (1) Highest intraday price during the period.00 68.50 66.50 66.05 52. Monthly price (euros) Monthly average daily trading volume (number of bonds traded and thousands of euros) Average(3) 49.13 52.45 65.92 46.60 48.11 Low 34.50 50.22 50.358. (3) Arithmetic average of closing prices.50 67.04 49.50 55.12 66.10 66.00 53.56 63.03 52.67 54.00 51.55 66.65 48.54 66.358.33 50. (2) Lowest intraday price during the period.00 51.375% OCEANE convertible/exchangeable bonds (face value €48.370.60 48.28 48.95 67.45 42. 36.09 58.50 Average(3) 65.40 51.20 47.24 65.90 39.15 56.28 51.45 66.005 19.95 59.53 66.50 53.99 - Monthly price (euros) Low(2) 65.005 19. of bonds 212 275 130 599 86 107 147 2.00 35.06 65.G E N E R A L I N F O R M AT I O N 3% OCEANE convertible/exchangeable bonds (face value €58) (ISIN: FR 0000 180184) High(1) December 2006 January 2007 February 2007 March 2007 April 2007 May 2007 June 2007 July 2007 August 2007 September 2007 October 2007 November 2007 December 2007 66.00 66.25 66.02 66.17 66.60 51.00 56.705 Dividend for the year Share price Yield incl.21 46.94 66.30 67.24 53.61 No.36 66. of bonds 753 214 637 436 1.15 66.00 66.88 66. share price Tax credit - Total - High 42.95 - Dividends Years ended 31 October Number of shares Net 2005 2006 2007 19.16 65.75 55.19 - Monthly average daily trading volume (number of bonds traded and thousands of euros) No.41 - 50.35 2007 ANNUAL REPORT 89 .

921 12. No loans or guarantees have been granted by the Company to its executive officers. The rules used to calculate the variable portion are set by the Board of Directors each year on the basis of recommendations issued by the Nominations and Compensation Committee.000 43. the Company’s executive officers held the following stock options: OUTSTANDING STOCK OPTIONS GRANTED IN PRIOR YEARS Plan F2 Exercise dates 50 % at 24 March 2003 + balance at 24 March 2004 70.000 332.81 10.000 5. COMPENSATION The compensation paid to executive officers is made up of a fixed and variable portion.650 132. 2005 Plan G5 5 Feb.CORPORATE GOVERNANCE Compensation and benefits paid to directors and officers The Company complies with the principles of corporate governance applicable in France.000 104. OTHER BENEFITS AND COMMITMENTS During fiscal 2007. (2) Paid in January 2007 for fiscal 2006.500 31.500 16.000 On the recommandation of the Board of Directors.020 365.000 105.11 25.000 35 40. 2007 Plan J 11 Jan. * François Salamon left Club Méditerranée on 28 September 2007.kind 23.000 20.909 8.07 31.442 352.017 160.865 19. 90 .74 35 121.184 4.500 7.020 320.430 544.000 92. and share grants were also made.000 10. Benefits in-kind correspond to a company car and fringe benefits associated with stays at Club Méditerranée Villages. and respectively represented 60% and 40% of their target bonuses.000 Plan G 7 Feb.000 stock options received between 2002 and 2006 following termination of his employment contract on 31 October 2007.000 160.300 450.000 170.300 121. At the Annual Shareholders’ Meeting of 16 March 2005. At 31 October 2007.67 30.721 Paid 288.131 (1) Paid in January 2006 for fiscal 2005. the shareholders approved an amendment to the Company’s corporate governance involving a switch from the two-tier system of an Executive Board and Supervisory Board to that of a Board of Directors.78 5. These performance criteria respectively represented 70% and 30% of his target bonus.000 25. The same criteria applied to the variable compensation of François Salamon and Michel Wolfovski in their capacity as Executive Vice Presidents (non-directors). François Salamon was authorised to retain the 60. No exceptional payments were made in fiscal 2007.600 Benefits in-kind 24. stock options were granted to executive officers under Plan L.640 Benefits in. 2008 Plan K 14 March 2009 Plan L 8 March 2010 Exercise price (in euros) Henri Giscard d’Estaing Michel Wolfovski 111. Gross compensation in euros Fiscal 2006 annual compensation Fixed Variable Target Henri Giscard d’Estaing François Salamon* Michel Wolfovski 640.000 155.200 (1) Fiscal 2007 annual compensation Fixed Variable(2) Target 640.03 33.015 Paid 354. 2006 Plan H 1 March 2006 Plan I 15 Jan.000 44. Henri Giscard d’Estaing’s variable compensation paid in January 2007 for fiscal 2006 in his capacity as Chairman and Chief Executive Officer was based partly on the Company’s earnings and partly on the attainment of individual objectives.000 42. 2005 Plan G3 6 Feb.

COMPENSATION PAID TO MEMBERS OF THE MANAGEMENT COMMITTEE Total gross compensation paid to the members of the Management Committee (including executive officers) in fiscal 2007 amounted to €4.500 7.500 Sale 7. Henri Giscard d’Estaing.2007 10. including variable compensation.2007 29.07. For Henri Giscard d’Estaing and Michel Wolfovski.2007 10.106.2007 Other financial instruments Shares Other financial instruments Shares Purchase Sale Purchase 8.07.29% of their gross compensation.04.G E N E R A L I N F O R M AT I O N SHARE GRANTS MADE IN FISCAL 2007 Plan L Start of vesting period 8 March 2010 + sale of shares prohibited before 7 March 2012 3.03. The contributions paid under these plans represent 8% of the officers’ gross compensation.000 in fiscal 2006).928.9 million.000 02.2007 02. The contributions paid under these plans represent 6.2007 Corporate officer Michel Wolfovski Executive Vice President Michel Wolfovski Executive Vice President François Salamon Executive Vice President François Salamon Executive Vice President Michel Wolfovski Executive Vice President Persons closely related to Michel Wolfovski Executive Vice President Henri Giscard d’Estaing Chairman and Chief Executive Officer Henri Giscard d’Estaing Chairman and Chief Executive Officer Michel Wolfovski Executive Vice President Michel Wolfovski Executive Vice President Shares/Other financial instruments Other financial instruments Other financial instruments Other financial instruments Shares Other financial instruments Shares Type of transaction Sale of call options Purchase of put options Purchase Sale Purchase Sale Number of securities 15.850 Henri Giscard d’Estaing Michel Wolfovski TRADES IN THE COMPANY’S SECURITIES CARRIED OUT BY CORPORATE OFFICERS IN FISCAL 2007 Date of transaction 30.2007 18.04.000 (€3.000 15.2007 18.07.000 15.03.07. The members of the Management Committee (excluding executive officers) are covered by supplementary defined-contribution pension plans.000 15. François Salamon and Michel Wolfovski are entitled to a contractual lump-sum severance payment in the event that their employment contracts are terminated.500 8.2007 30.04. this severance pay will be increased to three years’ gross compensation (including variable compensation) if the termination occurs within six months of a third party acquiring a controlling interest in the Company. The amount payable corresponds to two years’ gross remuneration.000 15.000 15. other than for gross or willful misconduct. 2007 ANNUAL REPORT 91 .600 1.2007 18. Termination benefits paid in fiscal 2007 amounted to €0.06.500 The Company’s executive officers are covered by supplementary defined-contribution pension plans.

Taittinger 21. Details of the stock option and share grant plans in place at October 31. on 11 December 2006 the Board of Directors decided to allocate these fees based on members’ actual attendance at meetings held by the Board of Directors and Board Committees during fiscal 2006.ATTENDANCE FEES STOCK OPTIONS AND SHARE GRANTS The Annual Shareholders’ Meeting of 14 March 2006 set the aggregate amount of attendance fees payable to members of the Board of Directors (including non-voting directors) at €305.083.32 19. 92 . Delaunoy de La Tour d’Artaise J-M.65 7. Stern (retired) P. unchanged from the previous fiscal year.381.250 10 8 March 2010 + sale of shares prohibited before 7 March 2012 44.00 15. Miyagawa V.166. They are primarily awarded based on the level of responsibility and potential of the beneficiaries. Al Sulaiman M. In addition. Ragozin (retired) J.314.333.440. Espalioux (retired) H.99 1. Adam S. share grants made to members of the Executive Committee and the Management Committee are subject to performance criteria.33 11. 2007 for corporate officers and full-time GOs are presented below.000 for fiscal 2006.858.65 5.33 Stock options grants are discretionary. for as long as they remain in office.33 2.625.65 17. Langlois-Meurinne P. as explained in note 13. Giscard d’Estaing P.600 10. Based on the recommendations of the Nominations and Compensation Committee. Bakkoury E. Pelisson S.166.00 20.183.000 for Board of Directors’ meetings and €61. David Dautresme received additional compensation of €30.083. SHARE GRANT PLAN 2007 Plan L Date of Shareholders’ Meeting Date of Board of Directors’ Meeting Number of shares granted O/w number of shares granted to members of the Management Committee (based on membership at 31 October 2007) Number of executives concerned Start of vesting period 8 March 2007 8 March 2007 46. Total attendance fees paid to each of the members of the Board of Directors in fiscal 2007 was as follows: Members of the Board of Directors Ph. The proportion corresponds to the equivalent of 30% of the capital gain realized on the exercise of the stock options or the sale of the shares received under share grants.974.316. which was paid in January 2007.858.146. Jeanbart A.249. Caillière D.083.000 for specific advisory work carried out in fiscal 2006 for the Chairman and Chief Executive Officer.00 29.1.791.416. Morali G.66 21.99 10. was allocated as follows: €244.66 5.32 10. No loans or guarantees have been granted by the Company to any member of the Board of Directors.525. Bertier Y.66 25.99 28.32 5. Ujihara (retired) A-C.000. Lebard T. Dautresme T. Torodov K.33 25.000 for meetings of the Board Committees.490 Number of shares held at 31 October 2007 Executive officers are required by law to retain a certain proportion of the shares acquired through the exercise of stock options and under share grants.66 21. The total amount of €305.

02.03.07.02.500 188.13 35 before 14.04.530 24.800 116.09 92.07 27.02.79 06.03.01.000 2.03.01.G E N E R A L I N F O R M AT I O N 1998 1999 Plan F2 Plan F3 Plan F4 Plan F5 Date of Shareholders’ Meeting Date of Executive Board/Board of Directors’ Meeting Number of options granted 23.400 72.05 26.05 16.03.10 13.14 42.07.05 22.000 29.000 08.97 29. The Board met five times in fiscal 2007. Nine out of eleven members attended the 11 December 2006 meeting. At the filing date of this report the Board comprised ten voting directors and one non-voting director.000 4 01.000 07.000 154.400 10 14.08.03.02 127.04 272.04 Expiry date Exercise price (in euros) Number of options outstanding at 31 October 2007 Number of options exerciced at 31.03 2006 Plan K 16.10 111.07 prohibited 89.13 35 before 13.07.98 73. Club Méditerranée’s Board of Directors resolved to combine these two functions and appointed Henri Giscard d’Estaing as Chairman and Chief Executive Officer.02.74 before 28.000 86.05 24.03 + balance 50% at 24.08.050 The board of directors GENERAL INFORMATION 16 March 2005.04 + balance 50% at 23.02.07.04 9.02.01.07.97 23.13 05. The structure and operations of the Board of Directors are governed by internal rules which establish the terms of reference and powers of the Board.03. ethical conduct and integrity.06 prohibited 64.05 6.14 31.97 23.02.04 23.450 7.950 213.07 13.11 92.03.10.08 79.97 23. At its first meeting held on 2007 ANNUAL REPORT 93 .01.97 23.09 81.02.01.815 06.04 + balance 37.700 82.08 14..03.042 5.02. In application of Article 14 of the Company’s bylaws.000 7.97 23. and seven. the Board of Directors determines the Company’s strategy and oversees its implementation.700 5.97 2000 2001 2002 2003 Plan G Plan G2 Plan G3 Plan G4 Plan G5 Plan H* 23.000 17.03.04.11 25.08.07.04. each member of the Board must own at least 50 Club Méditerranée shares.400 26.13 23.03 283.500 3.78 23.000 at 31 October 2007) Number of executives concerned Start of exercise period 1 50% at 24.000 11.03.100 10 08.15 43.00 258. elected by shareholders in an Ordinary Meeting.04. No directors are elected by the Company’s employees.09 prohibited 84.900 4 06.04.07.400 05.81 24.97 23.02.03.000 28.500 24.99 21.04.04.12 17.04.03 + balance 1.99 46. as well as the duty of directors to comply with the fundamental principles of independence.67 before 07.300 10 11. Except for the powers directly vested in shareholders and within the scope of the corporate purpose.02.07.000 14.06 136.03.11 07.000 81.08 70.05 300.03 before 10.10 136.00 21.99 04. The internal rules require each director to disclose to the Board any actual or potential conflict of In accordance with Article L.02.03.03 2005 Plan J 17. the Board considers all matters related to the efficient management of the Company and makes all related decisions.07. with an average attendance rate of 77%.01. 7 June and 23 October 2007 respectively.02.07 125.02.01. six and eight of the total ten members attended the meetings held on 21 May.12 44.03.03.04.08 prohibited 81.000 o/w number of new or existing shares to be purchased by members of the Management Committee (based on membership 10. ten out of eleven members were present on 8 March 2007.02. French law provides that a company’s management may be placed under the responsibility of either the Chairman of the Board of Directors or another individual appointed by the Board as Chief Executive Officer.900 9 15.07.000 15.06 250.02 2004 Plan I 17. The Board of Directors comprises a minimum of three and a maximum of eighteen members.05 2007 Plan L 24.000 1 50% at 17.09 10.98 9.97 23.700 240. define the operating rules for the Board Committees and set out the confidentiality principle applicable to information obtained by members in their capacity as directors.01 212.800 4 05.02.03. David Dautresme was appointed Vice Chairman of the Board and Michel Wolfovski was named Executive Vice President.08.10 prohibited + sale of shares + sale of shares + sale of shares + sale of shares + sale of shares 24.615 11.400 7 07.11 63.02.2007 23.03.225-35 of the Commercial Code.01 37.

According to these criteria. directors with close family ties with a corporate officer of the Company. directors with an employment contract. directors with a seat on the Board of another company of which the Company is also a director. He began his career with Cofremca where he served as an Associate Director between 1982 and 1987. and directors who have material business interests with the Company. directors who have been director of the Company for more than a certain period of time. The detailed information below concerning each director indicates whether or not he or she is classified as independent. and in such a case to abstain from taking part in any discussion and/or vote on the matters in question. corresponding to more than the 50% minimum recommended in the AFEP/MEDEF report. holding the positions of Chief Operating Officer in charge of Finance. On 7 June 2007 the Board noted Etienne Bertier’s resignation as a non-voting director. in compliance with Article L. They also set out the regulations applicable to trading in the Company’s securities. the Board of Directors reviewed the assessment of the independence of Board members.interest in which he or she may be directly or indirectly involved. CHANGES SINCE THE ANNUAL SHAREHOLDERS’ MEETING OF 8 MARCH 2007 Biography: Henri Giscard d’Estaing graduated from Institut d’Etudes Politiques de Paris and has a masters degree in economics. OTHER POSITIONS WITHIN THE GROUP At its 8 March 2007 meeting the Board of Directors noted the resignation of Véronique Morali from her position as a director. based on the criteria set out in the AFEP/MEDEF report on corporate governance. Chief Executive Officer of Evian-Badoit and Head of the Mineral Water division. Chairman of the Board of Directors of: Club Med World Holding Jet tours SA Chairman and Founding Director of: Fondation d’entreprise Club Méditerranée Senior Executive of: Club Med Management Asia Ltd. directors in the following situations are not independent: directors who represent a shareholder that owns more than 10% of the Company’s capital. (Hong Kong) 94 . directors who have been an auditor of the Company in any of the five preceding years. INDEPENDENT DIRECTORS (AS DEFINED IN THE AFEP/MEDEF REPORT ISSUED IN OCTOBER 2003 ON PROMOTING GOOD CORPORATE GOVERNANCE IN FRENCH LISTED COMPANIES) MEMBERS OF THE BOARD OF DIRECTORS The Board of Directors comprises ten directors – seven of whom are independent – and one non-voting director. It is made up of individuals with complementary skills and backgrounds. In 1987 he entered the Danone group and was successively Head of Development. Development and International Relations (1997-2001). Chief Executive Officer (2001-2002). seven of the ten current Board members can be deemed independent. Henri Giscard d’Estaing joined Club Méditerranée in 1997. specializing in researching changes in food consumption patterns and their marketing and strategic impacts. MEMBERS OF THE BOARD OF DIRECTORS AND POSITIONS HELD IN OTHER COMPANIES HENRI GISCARD D’ESTAING Chairman and Chief Executive Officer Born on 17 October 1956 French Appointed on 16 March 2005 Term expires at the Annual Shareholders’ Meeting to be called to approve the accounts for the year ended 31 October 2007 First term of office within the Company began on 17 July 1997 Non-independent director Number of shares held: 50 At its meeting on 28 September 2006. and Chairman of the Executive Board (2002-2005) before being appointed Chairman and Chief Executive Officer. Based on these criteria. Chief Executive Officer of the British subsidiary HP Food Lea and Perrins.621-18-2 of the Monetary and Financial Code and Articles 222-14 and 222-15 of the AMF’s General Regulations.

following which he served as a Policy Officer at the French Ministry of the Economy and Société Immobilière Marseillaise Axa Investment Managers Lazard Frères Banque Crédit Agricole Lazard Financial Products Ltd.G E N E R A L I N F O R M AT I O N Chairman of the Board of: Club Med Services Singapore Pte Ltd (Singapore) Director of: Holiday Hôtels AG (Switzerland) Carthago (Tunisia) OTHER POSITIONS OUTSIDE THE GROUP Finance.591 Independent director Biography: A graduate of ENA. Since 2006 he has also been a Senior Advisor to Barclays Capital France. David Dautresme held the post of Officer in charge of Algerian Affairs for the French government between 1958 and 1960. where he subsequently became Chief Operating Officer. MAIN POSITION OUTSIDE THE GROUP Director of: Casino.) Non-voting Director of: Eurazeo Groupe Go Sport Lazard Frères Banque Chairman of: Parande Développement SAS Member of the Supervisory Board of: AXA (France) Club Méditerranée Casino Managing Partner of: Lazard Frères Maison Lazard Partena Director of: DAVID DAUTRESME Vice-Chairman of the Board of Directors Born on 5 January 1934 French Appointed on 16 March 2005 Term expires at the Annual Shareholders’ Meeting to be called to approve the accounts for the year ended 31 October 2007 First term of office within the Company began on 23 April 1997 Number of shares held: 1. He served as Chairman and Chief Executive Officer of Crédit du Nord between 1982 and 1986 before entering Banque Lazard Frères et Cie where he was Managing Partner until 2000 and appointed Senior Advisor in 2001. Rue Impériale Permanent representative of: Lazard SA on the Board of Directors of Compagnie de Crédit 2007 ANNUAL REPORT 95 .G. In 1966 he was appointed Comptroller at Caisse des Dépôts et Consignations before joining Crédit Lyonnais in 1968 as Deputy Director.Lazard Financial Products Bank Vice-Chairman and Director of: Fonds .K Ltd (United Kingdom) Vice-Chairman of: Nouvelle Société Victoria (Switzerland) Permanent representative of: Club Méditerranée SA.P. on the Board of Directors of Hôteltour Director of: SECAG Caraïbes Sole Legal Manager of: DD Finance (France) Director of: Fimalac (France) OTHER POSITIONS HELD WITHIN THE PAST FIVE YEARS Executive Deputy Chairman of: Crédit Agricole . He was subsequently an auditor at and then honorary advisor to the Cour des Comptes (French National Audit Office). Guichard-Perrachon Member of the Supervisory Board of: Vedior (Netherlands) OTHER POSITIONS HELD WITHIN THE PAST FIVE YEARS Senior Advisor to Lazard Frères OTHER POSITIONS OUTSIDE THE GROUP Chairman of the Executive Board of: Club Méditerranée Chairman of: Hôteltour Club Med Marine CM U.Partenaires Gestion (F.

He began his career in 1984 as a financial analyst before joining Accor in 1986. He has contributed to driving the group’s expansion in a number of areas including manufacturing.PHILIPPE ADAM SAUD AL SULAIMAN Director Born on 1 May 1957 French Appointed on 16 March 2005 Term expires at the Annual Shareholders’ Meeting to be called to approve the accounts for the year ended 31 October 2007 Number of shares held: 50 Non-independent director Director Born on 8 December 1961 Saudi-Arabian Appointed on 16 March 2005 Term expires at the Annual Shareholders’ Meeting to be called to approve the accounts for the year ended 31 October 2007 First term of office within the Company began on 12 December 2003 Number of shares held: 50 Independent director Biography: Philippe Adam is a graduate of Institut d’Etudes Politiques de Strasbourg and also holds an MBA degree. the worldwide leader in contract catering. Strategy and Hotel Development with the Accor Group. finance. MAIN POSITION OUTSIDE THE GROUP Biography: Saud Al Sulaiman graduated in Finance from the University of New York in the United States. on the Board of Directors of GO Voyages Managing Director of: Carlson Wagon Lit Travel Member of the Supervisory Board of: Club Méditerranée (France) 96 . In 1993 he entered the Compass Group. Philippe Adam is currently Executive Vice-President. (Grand Cayman) Semiramis Intercontinental Hotel (Egypt) Sharjah National Lube Oil Company (United Arab Emirates) This Works (United Kingdom) Muzun International Aviation Fund (Bahamas) OTHER POSITIONS HELD WITHIN THE PAST FIVE YEARS Permanent representative of: SAMINVEST. Saudi Arabia) OTHER POSITIONS OUTSIDE THE GROUP OTHER POSITIONS HELD WITHIN THE PAST FIVE YEARS Chairman and Chief Executive Officer of: Devimco Member of the Board of Directors of: Arabian Cement Company (Saudi Arabia) Saudi Arabian Refineries Company (Saudi Arabia) Capital Finance Company SAL. which is partly owned by the Al Sulaiman family. MAIN POSITION OUTSIDE THE GROUP Executive Vice-President. (Lebanon) Rolaco Holding SA (Luxembourg) Hadhan Holding SA (Luxembourg) Oryx Finance Ltd. Since he began his career he has held several management positions within the Rolaco Trading & Contracting group. real estate development and tourism. Strategy and Hotel Development Accor OTHER POSITIONS OUTSIDE THE GROUP Partner and Managing Director of Rolaco Trading and its subsidiaries (Jeddah.

G E N E R A L I N F O R M AT I O N MUSTAPHA BAKKOURY Director of: Banque Centrale Populaire (Morocco) Méditélécom (Morocco) Ciments du Maroc Air Liquide (Morocco) Fonds d’Equipement Communal (Morocco) Poste Maroc Compagnie d’Assurance Atlanta Crédit Eqdom Médi 1 Sat (Morocco) Director Born on 20 December 1964 Moroccan Appointed on 28 September 2006 Term expires at the Annual Shareholders’ Meeting to be called to approve the accounts for the year ended 31 October 2007 First term of office within the Company began on 28 September 2006 Number of shares held: 250 Non-independent director THIERRY DELAUNOY DE LA TOUR D’ARTAISE Director Born on 27 October 1954 Biography: Mustapha Bakkoury graduated from Ecole Nationale des Ponts et Chaussées de Paris and also holds a degree in Banking and Finance. MAIN POSITION OUTSIDE THE GROUP Chief Executive Officer of Caisse de Dépôt et de Gestion du Maroc OTHER POSITIONS OUTSIDE THE GROUP Chairman of the Board of Directors of: Fipar Holding (Morocco) CDG Capital (Morocco) Société Immobilière de la Mer (Morocco) Société d’Aménagement Ryad (Morocco) Massira Capital Management (Morocco) CDG Développement (Morocco) Chairman of the Board and Chief Executive Officer of Groupe SEB OTHER POSITIONS OUTSIDE THE GROUP Chairman of the Supervisory Board of: Crédit Immobilier et Hôtelier (Morocco) Compagnie Générale Immobilière MEDZ Chairman of: SEB SA (France) SEB Internationale (France) Member of the Supervisory Board of: Member of the Supervisory Board of: TMSA (Agence Spéciale Tanger Med) Banque Marocaine pour le Commerce et l’Industrie (Morocco) Rowenta Invest BV (Netherlands) Permanent representative of: Sofinaction on the Board of Directors of Lyonnaise de Banque (France) 2007 ANNUAL REPORT 97 . MAIN POSITION OUTSIDE THE GROUP French Appointed on 16 March 2005 Term expires at the Annual Shareholders’ Meeting to be called to approve the accounts for the year ended 31 October 2007 Number of shares held: 100 Independent director Biography: A graduate of Ecole Supérieure de Commerce de Paris. He joined Groupe SEB in 1994 as Chief Executive Officer of Calor SA. Mustapha Bakkoury is also ViceChancellor of Al Akhawayn University. and in August 2001 was appointed Chief Executive Officer of Caisse de Dépôt et de Gestion du Maroc in Morocco. Chief Executive Officer in 1999 and Chairman and Chief Executive Officer in 2000. including with BNP Paribas in France and BMCI in Morocco. He was appointed Chairman of the Home Appliances Division of Groupe SEB in 1998. before joining Croisères Paquet where he held the post of Chief Financial Officer from 1984 to 1986 and subsequently Chief Executive Officer from 1986 to 1993. He spent some ten years working in the banking industry. Thierry Delaunoy de La Tour d’Artaise served as head of internal audit with the Chargeurs group from 1983 to 1984. Senior Vice-President. of which he became Chairman and Chief Executive Officer in 1996. a member of the Mohammed VI Foundation (which promotes the teaching profession and performs charity work) and Co-Chairman of Groupe d’Impulsion Economique France Maroc. aimed at furthering economic relations between France and Morocco.

insurance and the maritime industry (covering both ship owners and operators). finance. which started out as a Sciences Po in Paris in 1965. Paul Jeanbart co-founded the Rolaco Trading & Contracting Group. hotel services. Bermuda Delta Bank International. including tourism. He joined the Paribas group in 1971 where he worked 98 . Grand Cayman Hôtels Intercontinental Genève SA Managing Director of: All of the subsidiaries of Rolaco Holding SA. He worked at Rolaco Trading & Contracting from 1964 until 1982 when he moved to Geneva to manage the investments of the Luxembourg-based company Rolaco Holding SA Group in various sectors. vehicles and road and maritime freight equipment.000 Independent director Director Born on 23 August 1939 Canadian Appointed on 16 March 2005 Term expires at the Annual Shareholders’ Meeting to be called to approve the accounts for the year ended 31 October 2007 First term of office within the Company began on 23 April 1997 Number of shares held: 50 Independent director Biography: Aimery Langlois-Meurinne graduated from Biography: After graduating in civil engineering from the University of Alep in Syria. MAIN POSITION OUTSIDE THE GROUP Chairman of: Groupe SEB Moulinex (France) Chairman of the Supervisory Board Rowenta Werke (Germany) Member of the Supervisory Board of: Groupe SEB Deutschland (Germany) Permanent representative of: SEB Internationale for Groupe SEB UK (United Kingdom) SEB Internationale for Groupe SEB Iberica (Spain) SEB Internationale for Rowenta France SEB Internationale for Calor (France) SEB Internationale for Tefal (France) Director of: T-Fal Corp (United States) T-Fal de Mexico (Mexico) Rowenta Inc (United States) Groupe Seb Colombia (Colombia) Tefal UK (United Kingdom) Seb Benrubi (Greece) Groupe Seb South Africa (South Africa) Legal Manager of: Rowenta Deustchland GmbH (Germany) Krups GmbH (Germany) AIMERY LANGLOIS-MEURINNE PAUL JEANBART OTHER POSITIONS HELD WITHIN THE PAST FIVE YEARS Managing Director of Rolaco Holding SA (Luxembourg) OTHER POSITIONS OUTSIDE THE GROUP Chairman and Chief Executive Officer of: Oryx Finance Limited. Luxembourg Director of: Sodexho Alliance SA Luxury Brand Development SA Semiramis Hôtel Co. Egypt Nasco Insurance Group Bermuda Member of the Supervisory Board of: Club Méditerranée Director Born on 27 May 1943 French Appointed on 28 September 2006 Term expires at the Annual Shareholders’ Meeting to be called to approve the accounts for the year ended 31 October 2007 First term of office within the Company began on 28 September 2006 Number of shares held: 1.Director of: Tefal UK (United Kingdom) Groupe Seb Japan (Japan) Groupe Seb Mexicana (Mexico) Plastic Omnium (France) Legrand (France) OTHER POSITIONS HELD WITHIN THE PAST FIVE YEARS construction firm and also specialized in trading construction materials. earned a doctorate in law in 1966 and graduated from France’s Ecole Nationale d’Administration in 1970. Egypt Director of: Orfèverie Christofle SA XL Capital Limited.

In 1998. before becoming a Director at Ifint. which is part of the Agnelli Group. he served as Chief Executive Officer and then Senior Vice-President. Chief Executive Officer of Parfinance Paris. MAIN POSITION OUTSIDE THE GROUP Chief Executive Officer of Sequana Capital OTHER POSITIONS OUTSIDE THE GROUP MAIN POSITION OUTSIDE THE GROUP Chairman of: Safic Alcan Boccafin (formerly Permal Group SAS) Chairman of the Supervisory Board of: Chief Executive Officer and Member of the Board of Pargesa Holding SA (Geneva) OTHER POSITIONS OUTSIDE THE GROUP Director of: Groupe Bruxelles Lambert SA (Belgium) Eiffage (France) PAI Management (France) Pascal Investment Advisers SA (Switzerland) Director and Chairman of: Pargesa Luxembourg SA (Luxembourg) Pargesa Netherlands BV (Netherlands) Imerys (France) OTHER POSITIONS HELD WITHIN THE PAST FIVE YEARS ArjoWiggins SAS Antalis SAS Director of: LISI (Paris) SGS (Geneva) Financière Worms SA (Geneva) Greysac (formerly Domaines Codem) OTHER POSITIONS HELD WITHIN THE PAST FIVE YEARS Chairman of the Supervisory Board of: Club Méditerranée MICEL (Saint-Chamond) Chief Executive Officer of: Exor SA (Paris) Chairman and Chief Executive Officer of: Domaines Codem (Begadan) Director of: Corporation Financière Power (Canada) Axis Capital Management (United Kingdom) Club Français du Livre (France) PASCAL LEBARD Director of: Domaines Codem (Begadan) Européenne de Financement (Paris) Soficol (Paris) Exint. he was appointed Chairman of the Supervisory Board of Imerys and has been the Chairman of that company’s Board of Directors since 2005.G E N E R A L I N F O R M AT I O N for 12 years before being appointed Managing Director of G. He has also been Managing Director of Pargesa Holding in Geneva since 1990. the predecessor of the Exor Group. He held the post of Associate Director at 3i SA from 1989 until 1991. Pascal Lebard became a Chargé d’Affaires at Crédit Commercial de France in 1986. 2007 ANNUAL REPORT 99 . (Paris) Member of the Executive Board of: Worms & Cie (Paris) Director Born on 15 May 1962 French Appointed on 16 March 2005 Term expires at the Annual Shareholders’ Meeting to be called to approve the accounts for the year ended 31 October 2007 First term of office within the Company began on 23 April 1997 Number of shares held: 54 Independent director Biography: After graduating from EDHEC. In 2003 he joined Worms & Cie (which was renamed Sequana Capital in 2005) as a member of the Supervisory Board (20032004). Between 1987 and 1998. Becker Paribas (New York) and subsequently Merrill Lynch Capital Markets (New York). subsequently becoming a member of the Management Board (2004-2005) and then Chief Operating Officer (20052007).

shareholders will be asked to renew the terms of office of all the Company’s directors for a three-year period expiring at the Annual Shareholders’ Meeting to be held to approve the accounts for the year ending 31 October 2010.ANNE-CLAIRE TAITTINGER Permanent Representative of Groupe Taittinger on the Boards of: Société Hôtelière Lutétia Concorde Taittinger CCVC Director of: DIXIA Chairman of: SAS du Riffray II Director Born on 3 November 1959 French Appointed on 14 March 2006 Term expires at the Annual Shareholders’ Meeting to be called to approve the accounts for the year ended 31 October 2007 First term of office within the Company began on 12 June 2003 Number of shares held: 400 Independent director TETSUYA MIYAGAWA Non-voting director Born on 6 April 1955 Japanese Appointed on 14 March 2006 Biography: Anne-Claire Taittinger is a graduate of Institut d’Études Politiques de Paris. Tetsuya Miyagawa joined Nippon Life Insurance Company in 1978. He was appointed General Manager in charge of the International Investment Department in 2001 and has been Nippon Life’s chief representative in London since 2005. 100 . before occupying various managerial and CEO positions within holding companies for Groupe du Louvre and Groupe Taittinger until 2006. Chairman of the Executive Board of: Groupe Taittinger Chief Executive Officer of: Société du Louvre . She also holds ordinary and advanced degrees in urban planning as well as an executive MBA from HEC-CPA. She spent four years working in the regional urban development subsidiaries of Caisse des Dépôts et Consignations (1976-1979). subsequently Chairman and subsequently Director of: Baccarat Chairman and Director of: Baccarat Inc. (United States) Baccarat Pacific KK (Japan) OTHER POSITIONS HELD WITHIN THE PAST FIVE YEARS N/A At the Annual Shareholders’ Meeting to be held on 11 March 2008. MAIN POSITION OUTSIDE THE GROUP Senior Advisor to the Women’s Forum for the Economy and Society (WEFCOS) OTHER POSITIONS OUTSIDE THE GROUP Chief Representative of Nippon Life Insurance Company at its London office OTHER POSITIONS OUTSIDE THE GROUP Member of the Supervisory Board of: Carrefour OTHER POSITIONS HELD WITHIN THE PAST FIVE YEARS Director of: Nippon Life Insurance International PLC Nippon Life Insurance Investments Europe Ltd. MAIN POSITION OUTSIDE THE GROUP Biography: After graduating in economics from the University of Tokyo in Japan.Groupe du Louvre Groupe du Louvre Chairman of: Louvre Hôtels SAS Chairman and Chief Executive Officer.

The Strategy Committee met twice in fiscal 2007. receiverships or liquidations. The roles and responsibilities of the Nominations and Compensation Committee are described in the Report of the Chairman of the Board of Directors on Preparing and Organizing Board Meetings and on the Company’s Internal Control Procedures (see page 104). The Audit Committee is one of the key components of the corporate governance structure set up by the Company. there are no potential conflicts of interests between the duties of the corporate officers to the Company and their private interests. to the best of the Company’s knowledge. Chief Financial Officer Non-director Born on 3 April 1957 French The Strategy Committee is chaired by Henri Giscard d’Estaing and has six other members: Philippe Adam. Two of the Committee’s members are independent.A Nominations and Compensation Committee 2007 ANNUAL REPORT 101 .A Strategy Committee . are set by the Board of Directors. The responsibilities of the Committees. Thierry de La Tour d’Artaise and Saud Al Sulaiman. THE NOMINATIONS AND COMPENSATION COMMITTEE The Nominations and Compensation Committee has three members. Paul Jeanbart. BOARD COMMITTEES The Audit Committee is chaired by David Dautresme and has two other members: Philippe Adam and Pascal Lebard. It is chaired by Thierry de La Tour d’Artaise. in the past five years none of its corporate officers have been convicted of any fraudulent offences or have been associated with any bankruptcies. The roles and responsibilities of the Audit Committee are described in the Report of the Chairman of the Board of Directors on Preparing and Organizing Board Meetings and on the Company’s Internal Control Procedures (see page 103). all of whom are independent: Anne-Claire Taittinger. Finally. The Nominations and Compensation Committee met twice in fiscal 2007. THE AUDIT COMMITTEE OTHER POSITIONS WITHIN THE GROUP Permanent representative of: Club Méditerranée SA for Club Med World Holding (Paris) Director of: Jet tours SA (Ivry) OTHER POSITIONS OUTSIDE THE GROUP Member of the Supervisory Board of: Adenclassifieds OTHER POSITIONS HELD WITHIN THE PAST FIVE YEARS Member of the Executive Board of: Club Méditerranée SA (Paris) Director of: Club Med Gym (Paris) Chairman of: Club Med Amérique du Nord (Paris) Club Med Amérique du Sud (Paris) Club Med Asie (Luxembourg) As far as the Company is aware. At its meeting on 16 March 2005. In addition no official public incriminations and/or sanctions have been pronounced against any of the Company’s officers by any statutory or regulatory authorities and they have never been disqualified by a court from acting as a member of the administrative. the Board of Directors set up three specialized committees: .The Committees report on their work to the Board of Directors. Aimery Langlois-Meurinne. whose role is exclusively advisory. The Audit Committee met twice in fiscal 2007.An Audit Committee .G E N E R A L I N F O R M AT I O N HENRI GISCARD D’ESTAING IS ASSISTED BY AN EXECUTIVE VICE PRESIDENT: MICHEL WOLFOVSKI The members of the Board Committees are appointed by the Board of Directors. It is responsible for assisting the Board with reviewing and approving the interim and annual financial statements. management or supervisory bodies of an issuer or from acting in the management or conduct of the affairs of any issuer. Mustapha Bakkoury. The roles and responsibilities of the Strategy Committee are described in the Report of the Chairman of the Board of Directors on Preparing and Organizing Board Meetings and on the Company’s Internal Control Procedures (see page 104). Four of the Committee’s members are independent. THE STRATEGY COMMITTEE Executive Vice President. as well as with examining any operations or events that may have a significant impact on the Group and its subsidiaries in terms of commitments and/or risks. Pascal Lebard and Tetsuya Miyagawa (non-voting director).

or in which an employee appointed in that role.1 MEMBERS OF THE BOARD Article 14 of the Company’s by-laws states that “The Company shall be administered by a Board of Directors comprising between three and eighteen members”. based on the independence criteria defined in France’s AFEP-MEDEF report on corporate governance. either directly or indirectly.CHAIRMAN’S REPORT ON THE PRACTICES AND PROCEDURES OF THE BOARD OF DIRECTORS AND INTERNAL CONTROL PROCEDURES This report has been drawn up in accordance with paragraph 6 of Article L.has not been an auditor of the Company within the previous five years. in whole or in part. supplier. as amended by Act 2005-842 of 26 July 2005. .does not. The internal rules stipulate that the Board should meet as often as required in the Company’s interests. The internal rules also require each director to disclose to the Board any actual or potential conflict of interest in which he or she may be directly or indirectly involved. the classification as independent takes into account the Company’s ownership structure and any potential conflict of interests. or (ii) for which the Company or Group represents a significant portion of the business of the director concerned. Practices and procedures The Board’s practices and procedures are governed by French law. and has not been one during the previous five years. In compliance with its internal rules. or a corporate officer of the Company (currently in office or having held such office in the past five years). . Based on these criteria. as well as the duty to comply with the fundamental principles of independence.does not have close family ties with a corporate officer. for directors holding in excess of 10% of the Company’s capital and/or voting rights. they set out the rules applicable to trading in the Company’s shares. Its purpose is to report to shareholders on the conditions underlying the preparation and organization of the work of the Board of Directors (“the Board”) and the internal control procedures set up by Club Méditerranée SA (“the Company”). and impose a duty on directors to treat as strictly confidential all information obtained in their capacity as Board members. seven of the ten directors are considered to be independent. the Board regularly checks that its members include the requisite number of independent directors. ethical conduct and integrity. .is not an employee or corporate officer of the Company. PRACTICES AND PROCEDURES 1. At its meeting on 16 March 2005 the Board adopted a set of internal rules governing its organization. . At 31 October 2007. and the internal rules of the Board and the Board Committees.225-37 of the French Commercial Code. nor an employee or director of its parent or one of its consolidated subsidiaries. and in such a case to abstain from taking part in any discussion and/or vote on the matters in question. investment banker or commercial banker (i) that is material for the Company or Group. In addition. .is not a customer. These are based on French law.1. 1. the Company’s by-laws and the recommendations set out in France’s AFEP-MEDEF Corporate Governance Code for listed companies published in October 2003.2 BOARD PRACTICES AND PROCEDURES INTERNAL RULES I.1. 1. is a director. as defined in Article L. the Company’s by-laws. a director is deemed to be independent when he or she: . control the Company. practices and procedures.621-18-2 of the French Monetary and Financial Code and Articles 222-14 and 222-15 of the General Regulations issued by the French securities regulator (AMF). In accordance with these criteria.has not been a director of the Company for more than twelve years. They describe the terms of reference and powers of the Board.1 MEMBERSHIP. . define the practices and procedures of the Board Committees. the Board was composed of ten voting directors and one non-voting director. 102 . The directors’ biographies and details of their other directorships and functions are provided on page 94 of this registration document.is not a corporate officer of a company in which the Company is a corporate director.

by the Vice-Chairman or by a director designated as acting Chairman or by another director designated by the Board. BOARD MEETINGS In fiscal 2007. directors who take part in Board meetings through such means are deemed to be present for the purposes of calculating the quorum and voting majority. THE AUDIT COMMITTEE The Audit Committee has three members – including two independent members – who are appointed for their term of office as director. The Company’s Executive Vice-Presidents attended all of the Board meetings. the Board considers all matters concerning the efficient management of the Company and makes all related decisions within the limits set by the Company’s corporate purpose. examined the financial statements of the Company and the Group for the first half of fiscal 2007. no executive directors sit on the Audit Committee.225-35 of the French Commercial Code. reviewed the budget and the business plan. the Board examined the financial statements of the Company and the Group for the year ended 31 October 2006. • Chairman Board meetings are chaired by the Chairman of the Board or. the Board determines the Company’s strategy and oversees its implementation. During the year the Board also reviewed the reports of the various Board Committees. The Audit Committee is one of the key components of the corporate governance structure set up by the Company. The Board also examined and approved capital expenditure requests (including for asset acquisitions and renovation projects) and planned disposals or asset refinancing for amounts requiring the Board’s prior approval pursuant to its internal rules. 2007 ANNUAL REPORT 103 .1 ROLE OF THE BOARD At its meeting on 16 March 2005. reviewed the Group’s quarterly performance and results. The average period of notice for calling these meetings is approximately two weeks. and Pascal Lebard. 1. In accordance with best corporate governance practice. The current Audit Committee members are David Dautresme (Chairman).C H A I R M A N ’ S R E P O RT The internal rules state that directors may participate in Board meetings by videoconference or using other forms of telecommunication technology (including conference calls and any other interactive means of electronic communication) that enable them to be identified and to effectively participate in the discussion and vote. During fiscal 2007 the Board met five times with an average attendance rate of 77%. It is responsible for assisting the Board with reviewing and approving the interim and annual financial statements. Accordingly. tasks and duties are described in a specific Charter that was unanimously approved by the Committee’s members during its meeting of 8 June 2005. modus operandi.2. subject to compliance with the applicable regulations. approved the reports and resolutions to be presented at the Annual Shareholders’ Meeting of 8 March 2007. Philippe Adam. 1. as well as for advising on transactions or events that could have a material impact on the financial position of the Group or its subsidiaries in terms of commitments and/or risk.2 ROLE AND RESPONSIBILITIES OF THE BOARD AND BOARD COMMITTEES 1. and set up a stock option plan and stock grant plan for members of senior management and certain employees. All of the meetings in fiscal 2007 were chaired by the Chairman of the Board. except for Board meetings held to approve the financial statements of the Company and the Group and the related management report. • Directors’ right to information The Chairman of the Board is required to provide directors on a timely basis with any and all documents and information they may need to fulfill their duties. In accordance with Article L.2 ROLES OF THE BOARD COMMITTEES • Average period of notice for calling Board meetings The provisional schedule of meetings of the Board and Board Committees is sent to each director at the beginning of the fiscal year. The rules governing the Audit Committee’s organization. Each meeting lasted an average of two hours. The Board of Directors appoints the members of these Committees (including the Chairman) from among its members.2. in his or her absence. the Board set up three standing Committees whose role is to facilitate the work of the Board and efficiently contribute to preparing Board decisions – the Audit Committee. Except for the powers directly vested in shareholders. the Nominations and Compensation Committee and the Strategy Committee.

multicultural vacations. social and cultural background.Review the membership structure of Board Committees and make related recommendations. with an average attendance rate of 86%.Review the annual and interim financial statements of the Company and the Group. notably to update the 2007-2009 business plan taking into account Magellan. the Committee checked that the closing process had gone smoothly and was presented with a report on the work of the Statutory Auditors. . the new corporate program aimed at positioning Club Méditerranée as the worldwide specialist in all-inclusive upscale. and (v) refinancing operations. . it examines audit service proposals and makes recommendations concerning the appointment or re-appointment of the Statutory Auditors.Recommend methods for determining the compensation payable to the Chairman of the Board. The role of the Strategy Committee is to review: .The roles and responsibilities of the Audit Committee are to: . four of whom are independent. (iv) the Group’s real-estate portfolio. . . . all of whom are independent: Thierry de La Tour d’Artaise (Chairman) Anne-Claire Taittinger and Saud Al Sulaiman. In accordance with best corporate governance practice. The Committee also examined (i) the tax audits in progress within the Group. The Audit Committee met twice in fiscal 2007. from both a financial and commercial perspective. compensation payable to the Group’s Executive Vice-Presidents and senior executives.Obtain all the required information concerning the compensation and status of Group executives. . the Nominations and Compensation Committee draws on the expertise of a specialized independent consulting firm as well as on market information obtained on an annual basis. and gave its opinion on the internal audit plan.The three-year business plan presented annually by the Chief Executive Officer. friendly. Aimery Langlois-Meurinne. The Nominations and Compensation Committee has three members.600 new or existing shares without consideration. Philippe Adam. . This recommendation was adopted by the Board at its meeting of 8 March 2007. . In addition. . the Vice-Chairman and 104 . at the Chairman’s request.Review proposed stock option plans and stock grant plans for the management and employees of the Group (including corporate officers).Ensure that the data in these financial statements are consistent with other information available to the Committee. During these meetings the Committee recommended that the Board of Directors grant 125. (iii) hedging operations. and economic. with a 100% attendance rate. The Strategy Committee receives input from all of the Group’s corporate departments. During these two meetings. . The principles and rules used to set the remuneration and benefits of corporate officers are described on page 90 of this registration document. Pascal Lebard and Tetsuya Miyagawa (non-voting director). no executive directors sit on the Committee. In addition the Audit Committee was presented with a report of the work performed by the internal auditors in fiscal 2007 and their internal control assessments. The Strategy Committee met twice in fiscal 2007. Mustapha Bakkoury.Review candidates for the position of Chief Executive Officer and Executive Vice-President.Analyze recent regulatory developments and assess their impact on the financial statements. The current Committee members are Henri Giscard d’Estaing (Chairman). business experience.The main growth strategies of the Company and its subsidiaries. focusing particularly on ensuring that changes to the product offering appropriately reflect the Company’s image and corporate culture. The roles and responsibilities of the Nominations and Compensation Committee are to: . which were dedicated to reviewing the annual and interim financial statements. as well as 46. THE NOMINATIONS AND COMPENSATION COMMITTEE the Chief Executive Officer and. In order to effectively perform its role of setting the amount of remuneration and benefits for corporate officers. (ii) ongoing measures to rationalize the Group’s legal structure by reducing the number of separate companies. The Nominations and Compensation Committee met three times in fiscal 2007. together with the related reports. . Paul Jeanbart.000 stock options to members of senior management and certain employees. THE STRATEGY COMMITTEE The Strategy Committee has seven members.Ensure that the accounting policies used to prepare the financial statements are appropriate and have been applied consistently from one period to the next. with an attendance rate of 86%.Check the effectiveness of internal reporting and control procedures.Make proposals and recommendations concerning attendance fees and any other compensation and benefits for members of the Board (including non-voting directors). The Committee reviews the work performed by the Statutory Auditors.Review candidates for election to the Board – either at its own initiative or on the request of the Board – based on the candidates’ skills.

In order to meet these goals. and appointed Henri Giscard d’Estaing as Chairman and CEO. the Board decided that certain transactions and decisions require its prior approval due to their nature and/or the amounts involved. • Transactions in settlement of claims or litigation representing over €6. These include: • The annual budget. . This restriction does not apply. REPORTING RULES According to the internal control reference framework published on 31 October 2006 by the working group of the AMF. . as well as regularly updating the Board on specific matters such as changes in the Company’s ownership structure and strategic partnerships.8 million. the effectiveness of its operations and the efficient utilization of resources. to related party transactions not governed by Article L.2 million.C H A I R M A N ’ S R E P O RT 1.225-56 of the French Commercial Code.225-38 of the French Commercial Code.1 million. and the creation of any and all companies. representing an investment or disposal proceeds in excess of €15. except for those powers directly vested by law in shareholders and the Board of Directors. By helping to limit and manage the risk of the Company failing to meet its objectives. . standards and internal rules. The Chief Executive Officer is required to report regularly to the Board on the use of his powers. which was held on 16 March 2005. particularly those contributing to the protection of assets. However. The system contributes to the overall control of the business. the Board decided to combine the functions of Chairman of the Board and Chief Executive Officer. Internal control procedures 2. internal control procedures in each Business Unit extend to every level of the organization and are the responsibility of the operating and corporate departments.The reliability of financial information. all transactions. the applicable laws and regulations.3 million. procedures and practices aimed at controlling risks that may have a material impact on the Group’s assets or on its ability to achieve its objectives. underpinned by rules relating to organization. particularly in relation to share buyback programs and the issuance of guarantees. sales and exchanges of property. • New loans and borrowings (including bond issues and shortterm advances) in excess of €45.Application of senior management instructions and strategic guidelines.1 DEFINING INTERNAL CONTROL OBJECTIVES DESCRIPTION OF INTERNAL CONTROL OBJECTIVES At its first meeting. however. strategies. . the internal control system plays a key role in the conduct and management of the business. and the Company’s corporate values. financial and management information submitted to the Company’s corporate governance bodies gives a true and fair view of the Company’s operations and financial position.Protect the Group’s assets. rights or securities. . plant and equipment. and the behavior of all Company employees comply with the general strategic guidelines established by the Company’s corporate governance bodies.3 RESTRICTIONS ON THE POWERS OF THE CHIEF EXECUTIVE OFFICER IMPOSED BY THE BOARD OF DIRECTORS RESTRICTIONS RESULTING FROM INTERNAL RULES II. In accordance with Article L. • The 3-year business plan.The effectiveness of internal processes.Provide assurance that the accounting. the Chief Executive Officer has the broadest powers to act on behalf of the Company under all circumstances within the scope of the corporate purpose. intangible assets.The company’s compliance with the applicable laws and regulations. The Chief Executive Officer represents the Company in its dealings with third parties. • Any capital projects or asset disposals not included in the annual budget representing an aggregate amount of more than €9. For internal purposes. 2007 ANNUAL REPORT 105 . partnerships and business ventures. • Purchases. no system of internal control can provide an absolute guarantee that the company’s objectives will be met.Ensure that all acts of management. internal control is a system developed and implemented by a company that provides assurance concerning: . The purposes of the procedures in place within the Company and its subsidiaries are to: . This decision reflected the Board’s view that combining these two positions would be the best manner of ensuring the success of the Group’s upscale strategy. Club Méditerranée’s internal control system is organized on a decentralized basis.

as well as to the operating departments concerned. and GMs can respond either by post or online via “e-Feedback”. including outbreaks of diseases. For this reason. while also being flexible enough to let the Group’s teams give free rein to spontaneous and creative ideas. hostilities and natural disasters. from the Village Manager to the Senior Management Committee. and in some cases must be avoided at all costs. which can be viewed on the Group’s intranet. A manual was then compiled for each Village department. This process hinges on tracking products and carefully assessing feedback from the Group’s customers (“GMs”). with highs of 48% in France and 50% in Switzerland. Quali Signs have also been put in place for Club Med Agencies and for visitor reception areas at the Company’s headquarters. The manual is also used in all internal training sessions on crisis management and communication.000 questionnaires are sent out.2 MEETING INTERNAL CONTROL OBJECTIVES 2. compliance with applicable laws in the Group’s host countries and adherence to Group strategy. These standards – called “Quali Signs” – were drafted by over 600 GOs® throughout the world. Group policy concerning gifts. . invitations and payments to employees. The response rate is also very high for non-European customer bases. in which they are required to answer yes or no to questions about whether they (i) may have direct or indirect conflicts of interest with the Group. Effective operating controls consist of gauging customer satisfaction and monitoring quality. as well as ensuring that the Group’s global information systems are sustainable and adequately backed up. Crisis management manual The purpose of this manual is to set out the procedures to be applied in the event of a sensitive or emergency situation. in recent years the Quality Department has taken steps to set up a structured process in line with developments concerning the Company as well as its products and markets. Over 367.THE CONTROL ENVIRONMENT 2. The results are analyzed and taken into account in the day-to-day management of the Villages and also in selecting long-term strategic options. Compiled by the Health. Procedures Accounting and financial procedures. Quality standards Club Méditerranée required a set of quality standards that would be sufficiently rigorous to ensure consistent levels of service over time and from one Village to another. such as the United States (36%). • Quality Improving quality has always been an essential part of Club Méditerranée’s corporate culture. The average response rate is 43%. (ii) are prepared to comply with all aspects of the Code of Ethics and have taken all requisite measures to ensure that close members of their family do likewise. A questionnaire is sent to all Group employees. in nine different languages. the manual contains numerous examples of typical situations that may occur at the Group’ facilities or in its host countries. as well as general procedures relating to each of the Group’s main businesses are sent out to the various managers and their teams and are centralized within the Internal Audit Department. GM Feedback GM Feedback is a satisfaction survey sent to all GMs around the globe. benefits. Internal Audit Charter The aim of the Internal Audit Charter is to define the role. GM Feedback is a valuable tool for monitoring progress made by the Group and serves as an internal benchmark. The procedures concerning the Group’s Villages can be viewed on the Group’s intranet and are regularly updated. The results are sent to a wide range of people within the Group.2. Safety and Security Department with a view to both preventing and dealing with such events. This Code covers topics such as potential conflicts of interest. the Group drew up a Code of Ethics in order to raise employee awareness about the fact that certain types of activities and relationships are heavily restricted. as well as the use of confidential information.1 INTERNAL CONTROL PROCEDURES RELATING TO OPERATING CONTROLS AND REGULATORY COMPLIANCE OPERATING CONTROLS • Internal standards Code of Ethics and best practices Following a decision by the Executive Board on 23 June 1997. 106 . and (iii) will promptly inform the Human Resources Department of any event or situation covered in the Code that may concern them. objectives and responsibilities of the Group’s Internal Audit team and ensure that this team can perform its duties appropriately.

. • Information systems The reservation system and related data. .Guarantees issued in the name of the Company and/or its subsidiaries and any liens or charges on the Group’s assets. Each information system user can store important data on a secure server. sales or exchanges of property. its officers and employees in the performance of their duties. . fire or site damage or other incidents: . . A list of the available tools is also provided.All hardware and software components are split between two distinct but interconnected sites.Any criminal proceedings taken against Club Méditerranée or any of its executives or employees. . Less sensitive applications – including resource management and decision-making tools – also form part of this plan wherever possible. The Americas and Asia regions each have their own Regional Legal Director who is responsible for protecting and defending Club Méditerranée’s interests. partnerships or other business ventures. The role of the Insurance Department – which also reports to the Corporate Secretary – is to ensure that the Group has adequate insurance coverage in relation to the nature and extent of its risks.Data is replicated in real time between the two sites and can be accessed indifferently by either of the two sites. with a view to continually enhancing the professional approach of the Group’s GOs® and GEs®. .C H A I R M A N ’ S R E P O RT Practical guidelines have been drawn up for each Club Méditerranée profession in order to deliver the service quality that customers expect and that complies with the Quali Signs standards. The risk of an intruder hacking into the network and/or a centralized application is assessed and tested on a periodic basis. rights or securities. User profiles and access rights are managed jointly with the Human Resources Department in order to ensure that only people within the Group can access its systems. Procedures and best practices for more than 110 of the Group’s professions were developed by experts in each field and grouped together as standards called “Pro Signs”. Purchasing and Safety departments all contributed towards creating the Pro Signs. and to ensure that Club Méditerranée complies with local laws and regulations in its host countries. .g. . intangible assets. as well as Club Méditerranée’s accounting system. Risk management and insurance policies are organized on a consolidated basis. enabling numerous points to be improved.Significant arbitration or legal proceedings. legal or financial risks). REGULATORY COMPLIANCE – THE LEGAL AFFAIRS AND INSURANCE DEPARTMENTS • Structure The role of the Legal Affairs Department – which reports to the Corporate Secretary – is to protect and safeguard the assets and operations of the Group as a whole.Any matter that is considered as needing to be brought to the attention of senior management as it could damage the image of the Group or be contrary to its corporate ethics. and the creation of companies.A recovery plan has been drawn up so that key applications such as reservations and accounting can be restarted without delay.Growth projects requiring the authorization of the Board of Directors or that involve a particular risk for the Group (e. plant and equipment. 2007 ANNUAL REPORT 107 . The Group has set up risk management tools and global insurance programs with pools of top-ranking insurers. • Procedures The Regional Legal Directors are required to notify the Group Legal Affairs Department of issues which are deemed to be sensitive. A list of these sensitive issues is provided at the beginning of each fiscal year and generally includes: .Material purchases. which define the duties of members of each hotel profession and set out rules relating to attitudes. The Group Legal Affairs Department performs this role for Europe and Africa. A report is sent to the Village Manager within ten days of these visits. Mystery visits Mystery visitors from an external specialist company visit the Group’s Villages and carry out checks covering some 650 issues. behavior and safety.Any matters that could have a future impact on the Group’s day-to-day operations or that raise issues of principle concerning the running of the Group. as well as the procedures to be implemented before. and specific insurance coverage is taken out at a local level. The Information Systems Department has set up the following procedures in order to minimize the risks of system downtime due to major failures. . . during and after the season.Projects involving the creation of an entity in which the shareholders’ have unlimited liability. The Human Resources.Any transactions between the Company and any one of its subsidiaries or between subsidiaries or between companies with common directors. Strict access controls prevent unauthorized access to the Group’s systems from the computer terminals and work stations linked up to this network. are major assets for the Group. as well as to defend the interests of the Group. The Group’s information systems are accessed via an international telecommunications network that operates around the globe.

The consolidation system includes programmed controls to ensure that accounting flows such as increases. Each Business Unit has a Managing Director and a Financial/ Management Control Department whose manager reports to the Executive Vice-President.2 INTERNAL CONTROL PROCEDURES COVERING THE PREPARATION AND PROCESSING OF ACCOUNTING AND FINANCIAL INFORMATION trol issues at his or her site. The Management Controller/Finance Manager of each Village is responsible for accounting. • Procedures The main monthly accounting controls are as follows: . such as extended payment terms. which is linked up to a global database. management and internal con- 108 . Management Control.Extensive balance sheet analyses. The Consolidation Department also performs the following key controls: . off-balance sheet and cash flow statement items. .Monthly analysis of the components of consolidated profit: Operating profit . as well as the monitoring of local tax regulations.Analyses of foreign exchange gains and losses.Reconciliation between the asset management system and the accounting system in order to ensure data consistency.A system has been set up to control the automatic interfaces with fixed asset management systems. .Suppliers: a check is carried out to ensure that the different systems are correctly interfaced (trade payables balance in the aged payables system and the trade payables balance in the general ledger system). . Other operating income & expense.Revenue by country: the various entities validate that revenue and receivables figures have been correctly entered by type of structure (reseller or agent) and that data from the reservation system is properly fed into the accounting system. . This technology enables the Group to monitor.Trade receivables: the Sales Departments analyze and explain any differences compared with the Group’s general terms of sales. Operating profit . They are performed regularly by members of the Finance Department at country. This task is facilitated by the use of a Group chart of accounts. THE ACCOUNTING DEPARTMENT • Structure The Accounting Department organizes and plans all of the Group’s accounting tasks in order to ensure that consolidated data is consistent and reliable. the tracking of capital expenditure and debt recovery data. The Receivables Accounting Department at the Head Office and the Finance Managers then check these explanations based on the receivables ledgers. Treasury & Financing. regional and Group level. purchases.Management of assets.2. accounting changes from numerous input locations throughout the world. . by currency pair. Accounting and financial information is prepared by the Finance Department which oversees the work of the Accounting. Automatically-generated depreciation and amortization charges are checked on a monthly basis. The Group produces monthly accounts. One of the main objectives of an internal control system is to contribute to ensuring that the financial statements of the Company and the Group provide a true and fair view of the Group’s assets. while the representative office in each country deals with specific local issues and performs an accounting oversight role. . and financial information reported by all of the Group’s host countries. performed in March and September.Reconciliation of intra-group current accounts at Group level. liabilities and results operations as well as a reasonable assessment of any potential risks to which the Group may be exposed.Bank reconciliations.Leisure. .2.Checks performed by the Headquarters Accounting Department on current account balances between Club Méditerranée SA and other Group entities. Data is automatically transferred to the Group’s management and consolidation system on a monthly basis. decreases and reclassifications have been correctly recorded by the various entities. The Group publishes financial information based on its internal reporting format. . The Group’s financial information is directly derived from its integrated accounting and management system. The Internal Audit Department performs cross-business controls for all of the Group’s operations and cash flows. These controls include checks on the input of monthly revenue figures. Club Méditerranée has set up a series of controls at each Business Unit in order to monitor the principal risks inherent in their operations and the related financial consequences. A control is also performed on amounts due from suppliers. Tax and Internal Audit Departments. Chief Financial Officer. on a real time basis. At the interim and annual balance sheet dates in April and October an in-depth analysis is performed of all balance sheet. such as Villages and representative offices at country or regional level. Finance costs and other financial income & expense. and is subsequently published in the notes to the financial statements. .

THE TREASURY & FINANCING DEPARTMENT • Structure The Management Control Department is responsible for coordinating this function worldwide.Quantify and hedge financial risks – notably currency and interest-rate risks. in particular. balance sheet and cash flow projections.Manage investments and financing transactions to ensure that the Group has sufficient liquidity.Reviews of employee numbers. including foreign exchange gains and losses. the plan forms the basis for income statement. as well as a procedure on signing and sending files containing batches of supplier payments. THE MANAGEMENT CONTROL DEPARTMENT A detailed monthly reporting process All entities submit monthly reporting packages. • Structure The Treasury & Financing Department is responsible for ensuring the security. Forecasts The Management Control Department draws up forecasts for the remainder of the season based on actual figures for the first two months and updated forecasts for the remaining months.Reconciliation of Operating profit – Leisure to profit reported in the management accounts. The forecasts are revised after each monthly close until the end of the season.Control the level of finance costs. transparency and effectiveness of treasury and financing operations. The budget is presented to the Board of Directors for approval in October of each year. including such variables as growth in the tourism sector and changes in exchange rates. The Group’s transition to International Financial Reporting Standards was completed in fiscal 2006 and these standards have been applied since then by all local entities for consolidated reporting purposes.Help subsidiaries with cash management processes and assist the Development Department in arranging financing for new projects. Budgetary process The budgetary process – which is coordinated by the Management Control Department – begins at Village and sales office level.Monitor banking relations. . . .C H A I R M A N ’ S R E P O RT The following controls are also performed on a monthly basis in coordination with the Management Control and Treasury & Financing Departments: . operating margins. transport margins.Detailed analyses of revenue by outbound and inbound zone. . Examples include a procedure on authorized bank account signatures in order to limit the risk of fraud. based on the management accounts which comprise the same underlying transaction data as the statutory accounts. Its main roles are to: . . . .Reconciliation of revenue to sales data. .Detailed profitability analyses covering. Monthly consolidated income statements are also produced. The main controls performed by the Management Control Department are as follows: . Village and Headquarters cost controls.Capital expenditure analyses. The budgetary process is an effective internal control tool that enables the Group to analyze all of its financial flows. Local budgets are consolidated first by Business Unit and then at Group level. . Rolled forward annually.Perform cash management tasks. Each Business Unit presents its results for the month at a Senior Management Committee meeting.Analyses of finance costs and other financial income and expense. Each region also has a management control department staffed by locally-based controllers. • Procedures Three-year business plan The rolling three-year business plan reflects the main changes expected to affect the Group during the period as well as their financial impacts. The narrative section of the plan includes data from market research carried out in the Group’s strategic countries and the related action plans.Net debt analyses. • Procedures The Treasury & Financing Department has drawn up a set of Group rules and procedures. 2007 ANNUAL REPORT 109 . The business plan schedules simulate the financial impacts of the Group’s strategy and the macro-economic environment. This process enables the Group to assess the impact of any changes in operations. . .

Weekly and monthly reporting systems have also been set up in order to provide senior management with information on matters such as (i) the Group’s actual and forecast levels of debt and liquidity; (ii) risk monitoring and hedging transactions; and (iii) the Group’s dealings with its banks, including details of cash flows and commitments, account movements and banking terms and conditions. The Treasury team uses a treasury management system that enables it to track key liquidity indicators as well as all of the financial instruments used on a centralized basis. Tasks relating to financial market transactions are segregated, with orders, execution and controls carried out by three different people. All currency hedges are systematically presented to the Audit Committee.
THE TAX DEPARTMENT

• Structure The Internal Audit Department is a centralized structure based at the Company’s headquarters. It comprises six people who carry out cross-functional audits of all of the Group’s operations and transaction flows. The Internal Audit Department reports directly to the Executive Vice-President, Chief Financial Officer. • Role and responsibilities The internal auditors perform audits of specific functions or businesses at Group, Headquarters, Country Representative Office and Village level. They coordinate their work with that of the Statutory Auditors. The internal auditors’ activities cover: - Financial audits, which consist of reviewing the financial statements and examining the systems and rules set up to ensure the reliability of financial information. - Operational audits, which include reviewing the various cycles (such as sales, purchasing and human resources) and assessing internal control procedures in order to obtain assurance that the organization in place contributes to managing Group risks and meeting Group objectives. - Specific engagements, corresponding to various one-off projects such as providing support for operations staff, or organizational and diagnostic work. The Internal Audit Department also takes part in events such as financial seminars and training sessions for new Cost Controllers and Management Controllers/Finance Managers as well as more experienced Management Controllers/Finance Managers, with a view to relaying a control culture throughout the Group and driving changes to improve the internal control and risk management environment. • Operational structure and procedures The Internal Audit Department draws up an annual audit program and an audit plan covering all of the Group’s operations. The audit program is based on maps of the main risks at Group level and by country and domain (Human Resources, Purchasing, Legal/Tax/Asset Management, Sales, Accounting, Treasury, Information Systems, Geopolitical Risks/Quality/ Security).

• Structure The Tax Department is responsible for coordinating international tax issues, ensuring that taxation policies are applied consistently by each Business Unit and monitoring all tax audits carried out on Group companies. At the level of the parent company, the Department ensures that the company complies with all its tax reporting obligations as head of the French tax group, monitors tax audits carried out on the companies in the tax group and manages tax disputes. The American and Asian regions have their own Tax Director who is responsible for these issues on a regional basis, while the Group Tax Department covers Europe and Africa. • Procedures The Tax Department monitors tax issues, in coordination with the person responsible for tax matters in each country or region. It reports to the Audit Committee on a six-monthly basis, giving a detailed account of any tax audits and/or disputes in process.
THE INTERNAL AUDIT DEPARTMENT

The Internal Audit Department ensures that internal control procedures are effectively conveyed and respected across the Group and verifies that they are properly applied throughout the various departments. It also helps to enhance the Group’s performance and operations by assisting the senior management team in its decision-making process. To this end it presents a report on its work once a year to the members of the Senior Management Committee.

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C H A I R M A N ’ S R E P O RT

The audit program is presented twice a year to the Audit Committee along with a progress report and a summary of the audits performed since the start of the year. Internal audits are conducted in four phases: - Collecting information on the entity or domain concerned. - On-site checks by teams to ensure that appropriate controls have been set up to address the risk areas identified in the mapping process and to assess the quality of internal controls. - Drawing up reports on the main identified weaknesses, updating the risk map and proposing action plans. These reports are then sent to senior management as well as to the audited units and support functions. - Follow-ups to check that the internal auditors’ recommendations have been implemented and, if necessary, to assist the audited units with their risk management action plans. Since 2005, the frequency of the audits carried out on the Group’s Villages by the Internal Audit team has been stepped up substantially, to support Club Méditerranée’s upscale strategy and the implementation of a leaner management organization in certain Villages. The aim behind these more frequent audits was to ensure that new processes were being applied correctly. In 2007, the Internal Audit team continued to focus on auditing the Villages, which accounted for an average of 46% of the total time spent by the internal auditors. The remainder of the hours worked breaks down more or less equally between audit engagements in national representative offices (26%) and engagements at headquarters (28%). As part of the Group’s phased project to assess its internal control procedures, 2007 was dedicated to fine-tuning a selfassessment internal control matrix for the Villages in order to help enhance each department’s internal control process. The matrix is based on: - Regularly assessing risk control. - Carrying out an objective and realistic evaluation of the quality of the internal controls in place, using consistent methodology resulting in a mathematical score. - Setting up action plans and monitoring that these plans are properly implemented. This matrix has been successfully tested with a pilot group and will be rolled out to all the Villages during 2008.

After each internal audit of a Village or a national representative office, the entity is rated on a scale of 10. This enables the Group to assess the internal controls in place, compare performance between the audited entities and measure their progress. The two follow-up audits carried out in fiscal 2007 showed that internal control processes are continuing to improve and that the Department Managers are much more aware of the importance of strictly implementing procedures.
STATUTORY AUDITORS

The Statutory Auditors certify the annual financial statements of Club Méditerranée SA and its subsidiaries and the annual consolidated financial statements of the Group. They also perform a limited review of the interim consolidated financial statements and verify the information given in the interim report. They attend meetings of the Audit Committee, are regularly informed of the work carried out by the Internal Audit team, and receive a copy of the yearly Internal Audit report.
2.3 RAISING AWARENESS OF INTERNAL CONTROL 2.3.1 ROLLING OUT THE NEW VILLAGE ORGANIZATION TO STRENGTHEN INTERNAL CONTROL

As part of the Group’s overall upscale strategy, the new organization structure trialed at ten Villages in 2005 and put in place in thirteen Villages in 2006 was rolled out on a permanent basis in 2007. Under the new leaner and more coherent structure, each Village Manager has just five direct reports compared with an average of fifteen previously. The aim of this approach is to enhance the management of each Village’s P&L by fully leveraging the available products and resources. The new organization is also more customer-focused, enabling the Group to build the skill-sets of its GOs® by providing training in specific skills and creating new professions. Introduction of the new Village organization led to the creation of a new recruitment/placement unit whose first season began in February 2006. The unit was tasked with improving the GO® placement process and reducing turnover – an aim that was achieved in the first season with the GO® turnover rate decreasing sharply.

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At the same time, the Group has created a new position of Cost Controller reporting to the Village Management Controller/Finance Manager. The Cost Controller is responsible for closely monitoring the Village’s P&L and ensuring that purchasing procedures are correctly applied. The creation of this position as part of the new Village structure will help the Management Controllers/Finance Managers fulfill their duty of ensuring compliance with internal control processes.
2.3.2 OTHER MEASURES IMPLEMENTED TO STRENGTHEN INTERNAL CONTROL PRODUCT INNOVATIONS

NEW PURCHASING STRUCTURE

In line with its aim to enhance cost controls, the Group has set up a Global Purchasing Department reporting to the Executive Vice-President, Chief Financial Officer. This new department uses a central purchasing system to monitor purchases in real time and provide users with lists of products for which prices have been negotiated by product family purchasers. It also tracks implementation of action plans and savings on purchasing costs. The information system enables the Global Purchasing Department to verify that negotiated contracts are being properly used in order to optimize purchases.
CONCLUSION

As part of its continued drive to tighten control over revenue and in order to reduce the circulation of cash within the Villages, the Group extended the “Bar & Snacking Included” and “Club Med Pass” formulas to all of its Villages as from the summer of 2006. After paying a deposit, customers can use the Club Med Pass to pay for drinks that are not included in the Bar & Snacking formula (such as champagne and VSOP alcohols) as well as for additional services (such as spa treatments).

During the year, the Group continued to focus on raising awareness of the risks inherent in its operations and of the related internal control procedures. These procedures will be once again updated in 2008 in order to apply the recommendations issued by the AMF on 31 October 2006 as part of its internal control reference framework.

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Based on the procedures performed. In our capacity as Statutory Auditors of Club Méditerranée and in accordance with the requirements of Article L. 12 February 2008 The Statutory Auditors Deloitte & Associés Dominique Jumaucourt Ernst & Young Audit Pascal Macioce 2007 ANNUAL REPORT 113 . we have no matters to report concerning the information provided on the Company’s internal control procedures related to the preparation and processing of accounting and financial information. 225-37 of the French Commercial Code. Neuilly-sur-Seine and Paris-La Défense. .STATUTORY AUDITORS’ REPORT ON INTERNAL CONTROL Statutory Auditors’ report prepared in accordance with Article L. we present below our report on the report prepared by the Chairman of the Board of Directors of Club Méditerranée in application of Article L. as well as existing documentation. Our responsibility is to report to you our comments on the information contained in the Chairman’s report concerning the internal control procedures related to the preparation and processing of accounting and financial information. 225-235 of the French Commercial Code. 225-37 of the French Commercial Code for the year ended 31 October 2007.Acquiring an understanding of the work performed in order to prepare this information and existing documentation. To the shareholders. These procedures included: YEAR ENDED 31 OCTOBER 2007 . 225-235 of the French Commercial Code. In his report. the Chairman is required to comment on the conditions applicable for the preparation and organization of the work carried out by the Board of Directors and the internal control procedures implemented within the Company.Determining whether the major internal control weaknesses concerning the preparation and processing of accounting and financial information that we may have identified as part of our audit are appropriately disclosed in the Chairman’s report. as contained in the report of the Chairman of the Board of Directors prepared in accordance with Article L. . Those standards require us to perform procedures to assess the fairness of the information set out in the Chairman’s report concerning the internal control procedures related to the preparation and processing of financial and accounting information.Examining the internal control procedures related to preparation and processing of accounting and financial data underlying the information presented in the Chairman’s report. on the report of the Chairman of the Board of Directors of Club Méditerranée on internal control procedures related to the preparation and processing of accounting and financial information We performed our procedures in accordance with professional standards applicable in France.

92% 3 996 0. VAT % 472 521 42.Fully consolidated subsidiaries Audit-related services .81% 50.41% 47.07% 10. VAT Statutory and contractual audits .20% 100.54% 765 100.FEES PAID TO THE STATUTORY AUDITORS (in € thousands) Ernst & Young network 2007 Amount excl.46% 1.Other Sub-total Total fees % Montant excl.108 10.07% 100.00% 114 .80% 676 98.05% 328 348 47.46% 100.34% 10.00% 10 10 686 1.00% 112 112 1. VAT 2007 Deloitte network 2006 % Amount excl.73% 307 298 160 40.Issuer .58% 47. VAT 2006 % Amount excl.70% 1.Issuer .27% 89.Legal and tax advice .93% 983 98.00% 5 7 12 995 0.50% 0.00% 765 100.95% 20.08% 412 471 100 41.Fully consolidated subsidiaries Sub-total Other services provided to fully consolidated subsidiaries .13% 38.

Provisions 141 – Note 16 .Other receivables 136 – Note 11 .Intangible assets 133 – Note 7 .Income taxes 143 – Note 17 .Finance cost.Employee benefits expense and number of employees 149 – Note 21 .Borrowings and other interest-bearing liabilities 145 – Note 18 .Earnings per share 150 – Note 26 .Financial instruments 148 – Note 19 .Notes to the consolidated cash flow statement 151 – Note 27 .Goodwill and business combinations 132 – Note 6 .Other liabilities 148 – Note 20 .General information 120 – Note 2 .Operating income .Scope of consolidation at 31 October 2007 157 – AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS 158 – GROUP STRUCTURE AT 31 OCTOBER 2007 2007 ANNUAL REPORT 115 .Management of assets 149 – Note 22 .Assets held for sale 136 – Note 10 .Pensions and other long-term benefits 141 – Note 15 . net 149 – Note 24 . plant and equipment 134 – Note 8 .Club Méditerranée Group CONSOLIDATED FINANCIAL STATEMENTS 116 – CONSOLIDATED STATEMENTS OF INCOME 117 – CONSOLIDATED BALANCE SHEETS 118 – CONSOLIDATED CASH FLOW STATEMENT 118 – CHANGE IN CONSOLIDATED NET DEBT 119 – CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 120 – NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 120 – Note 1 .Share-based payments 139 – Note 14 .Commitments and contingencies 153 – Note 29 . scope of consolidation 128 – Note 3 .Segment information 131 – Note 5 .Property.Share capital and reserves 137 – Note 13 .Changes in scope of consolidation 128 – Note 4 .Related party transactions 152 – Note 28 .Cash and cash equivalents 136 – Note 12 .Non-current financial assets 135 – Note 9 .Share of income of associates 150 – Note 25 .Summary of significant accounting policies.Other operating income and expense 149 – Note 23 .

1.1 8.2 & 4.735 (765) (360) (332) (34) 244 (148) (64) 1 33 2 (21) 14 (26) (12) 3 1 (8) (10) 2 20 2.CONSOLIDATED STATEMENTS OF INCOME (in € millions) Years ended 31 October Revenue Other income Total income from ordinary activities Purchases External services Employee benefits expense Taxes other than on income EBITDAR .Leisure Rent Depreciation and amortization expense Provision expense.720 (751) (379) (329) (32) 229 (142) (63) - 2007 1.Attributable to equity holders of the parent .Minority interests Notes 4.3 2006 1.2 21 22 4. net Income/(loss) before tax Income tax Share of income of associates Net income/(loss) .24 0.679 41 1.4 4.24 (0.727 8 1.Management of assets Other operating income and expense Operating income Finance cost.55) 116 .55) (0. net Operating income .Leisure Operating income .2 23 16.1 & 24 24 40 (29) 35 (32) 3 (1) 3 5 5 - (in €) Basic earnings/(loss) per share Diluted earnings/(loss) per share 25 25 0.

2 12.118 30 1.623 31 October 2007 77 563 (201) (10) 429 61 490 27 408 43 64 542 24 36 184 186 131 561 1.593 2007 ANNUAL REPORT 117 .593 10 11 Equity and liabilities (in € millions) Note Share capital Additional paid-in capital Retained earnings/(deficit) Net income/(loss) for the year Equity attributable to shareholders Minority interests Total equity Pensions and other long-term benefits Long-term borrowing and other interest-bearing liabilities Other non-current liabilities Deferred tax liabilities Non-current liabilities Provisions Short-term borrowings and other interest-bearing liabilities Trade payables Other current liabilities Customer prepayments Current liabilities Liabilities related to assets held for sale Total equity and liabilities 9 15 17 19 14 17 19 16. plant and equipment Non-current financial assets Total fixed assets Deferred tax assets Non-current assets Inventories Trade receivables Other receivables Cash and cash equivalents Current assets Assets held for sale Total assets 9 16.1 12.2 31 October 2006 77 562 (185) 5 459 55 514 28 346 36 86 496 41 109 170 177 112 609 4 1.148 22 86 142 108 358 87 1.C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S CONSOLIDATED BALANCE SHEETS Assets (in € millions) Note Goodwill Intangible assets Property.121 35 1.156 21 81 108 165 375 92 1.2 5 6 7 8 31 October 2006 103 79 859 80 1.623 31 October 2007 108 83 841 86 1.

net Income tax Other Change in working capital (1) Cash generated from operations Interest paid Income taxes paid Net cash from operating activities 5 26. 102 (118) (12) (4) (32) (2) 5 11 168 (8) 165 94 (127) 5 2 (26) (3) (57) 165 11 108 CHANGE IN CONSOLIDATED NET DEBT (in € millions) Years ended 31 October Net debt at beginning of period Impact on net debt of the adoption of IAS 32 and IAS 39 at 1 November 2005 Decrease/(increase) in net debt Net debt at end of period Note 17.3 (151) 143 (8) 39 (104) (4) 65 (43) (28) Cash flows from financing activities Proceeds from long-term borrowings Repayments of long-term borrowings Increase (decrease) in short-term bank loans Dividends paid and other Net cash used in financing activities Effect of changes in exchange rates on cash and cash equivalents and other Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Effect of a change of method (adoption of IAS 32 and IAS 39 at 1 November 2005) Cash and cash equivalents at end of period (1) Including charges to/(releases from) short-term provisions considered as accrued expenses. (2) Net of government grants. net Finance cost.1 70 (4) (49) 32 1 (4) 24 75 (22) (6) 47 (8) 56 (1) (11) 26 (3) (2) (20) 37 (16) (6) 15 Cash flows from investing activities Acquisitions of non-current assets(2) Acquisitions of equity interests.1 2006 (335) 12 29 (294) 2007 (294) (42) (336) 17.1 118 . net of cash acquired (3) Proceeds from disposals of non-current assets Net cash used in investing activities Free cash flow 26. amortization and provisions Share of income of associates Disposal (gains) and losses.CONSOLIDATED CASH FLOW STATEMENT (in € millions) Years ended 31 October Note 2006 2007 Cash flows from operating activities Net income/(loss) Adjustments for: Depreciation.2 26. (3) Including €4 million in cash acquired.

358.005 77 562 (9) (161) (1) 469 (1) 54 523 (1) (15) (16) 5 (11) (1) 2 (15) (16) 5 (11) (1) 2 (1) 2 (15) (16) 5 (11) (1) 2 (1) 2 Income and expenses recognized directly in equity Net income for the year Total recognized income and expense for the period (Purchases) and sales of treasury shares Share-based payments Dividends Effect of changes in scope of consolidation At 31 October 2006 Gains/(losses) on cash flow hedges taken to equity Revaluation of available-for-sale financial assets Exchange differences on translating foreign operations 19.705 77 563 (8) (203) 429 61 490 2007 ANNUAL REPORT 119 .700 1 (31) (25) (10) (35) 2 (1) 3 1 2 2 2 4 (29) (23) (8) (31) 2 (1) 3 Income and expenses recognized directly in equity Net loss for the year Total recognized income and expense for the period Share-based payments (Purchases) and sales of treasury shares Exercise of stock options Capital increase Dividends 3 (1) 4 (1) At 31 October 2007 19.005 77 562 (10) (170) (4) 459 (4) 55 514 (4) 10 10 10 (31) (25) (10) (35) 2 (1) 3 12.005 77 562 (9) (185) 24 454 15 54 508 15 At 1 November 2005 Including IAS 32/39 Gains/(losses) on cash flow hedges taken to equity Exchange differences on translating foreign operations 19.C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Note 12) (in € millions) Shares outstanding Share capital Additional paid-in capital Treasury shares Retained Equity earnings attributable and net to shareincome/(loss) holders for the year Minority interests Total equity At 31 October 2005 Excluding IAS 32/39 Effect of a change of method (adoption of IAS 32 & 39) 19.358.370.358.

fitness clubs and leisure and entertainment complexes). Estimates and assumptions are used in particular: 120 . . The Group has applied IAS 32 – Financial Instruments: Disclosure and Presentation and IAS 39 – Financial Instruments: Recognition and Measurement since 1 November 2005. 2. .Amendment to IAS 39: Cash Flow Hedge Accounting of Forecast Intragroup Transactions. the consolidated financial statements for the year ended 31 October 2007 have been prepared in accordance with the International Financial Reporting Standards (IFRSs). SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Note 2.IFRS 8: Operating Segments. and associated companies. At each period-end. The subsidiaries’ financial statements cover the same period and are prepared using the same accounting policies. The preparation of financial statements in accordance with IFRS requires management to make certain estimates and assumptions. These standards. . The practical implications of applying these standards.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 OCTOBER 2007 Note 1.1. International Accounting Standards (IASs) and related interpretations adopted by the European Union at that date. The consolidated financial statements for the year ended 31 October 2007 were approved by the Board of Directors on 12 December 2007. revised standards and interpretations adopted by the European Union were applicable as from 1 November 2006: . These assumptions are determined on a going concern basis according to the information available at the time. MEASUREMENT METHODS APPLIED FOR THE PREPARATION OF THE CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements have been prepared on a historical cost basis. Group Plans and Disclosures. which have been measured at fair value. . . Actual results may differ from these estimates. The Group opted to measure certain land and buildings at the IFRS transition date at their fair value. standards and interpretations and their effect on the consolidated financial statements are currently being assessed. the Group has elected to continue using the corridor method to recognize actuarial gains and losses. These include: Standards. The Group decided not to early adopt any standards. Its registered office is at 11.Amendment to IAS 39: Fair Value Option. revised standards and interpretations applicable as from 1 November 2009: . as permitted under IFRS 1. All amounts are presented in millions of euros.Financial Instruments: Disclosures.IFRIC Interpretation 10: Interim Financial Reporting and Impairment. France.1. revised standards and interpretations did not have a material impact on the consolidated financial statements.Amendment to IAS 1: Capital Disclosures.IFRIC Interpretation 11: Group and Treasury Share Transactions. revised 2. revised standards and interpretations applicable as from 1 November 2007: . except for derivative financial instruments and available-for-sale financial assets. rue de Cambrai. unless otherwise specified. The consolidated financial statements include the financial statements of Club Méditerranée SA and its subsidiaries (“the Group”).Amendment to IAS 19: Actuarial Gains and Losses. The Company’s fiscal year covers the twelve-month period ending 31 October. assumptions and estimates may be revised to take into account any changes in circumstances or any new information that has come to light. 75957 Paris Cedex 19. . scope of consolidation In accordance with European Council Regulation 1606/2002/EC dated 19 July 2002.IFRIC Interpretation 4: Determining whether an Arrangement Contains a Lease. Summary of significant accounting policies. However. The Group is one of the world’s leading providers of all-inclusive vacation packages and also operates in related businesses (tour operating. Club Méditerranée shares are traded on the Euronext Paris First Market and are included in the SBF 120 index.1.IFRS 7 . The amendment to IAS 19 provides the option of recognizing actuarial gains and losses in equity in the period in which they occur. . revised standards or interpretations applicable in accounting periods commencing after 31 October 2007. Standards. The following standards. General information Club Méditerranée SA is a société anonyme (joint stock corporation) governed by the laws of France.IFRIC Interpretation 8: Scope of IFRS 2.

The consolidated statement of income is presented in accordance with the “nature of expense” method. claims and litigation. all the costs related to new Village projects. which is 49.For the calculation of pensions and other long-term employee benefit obligations. is also fully consolidated because the majority of the associated risks are assumed by the Group. 2. which were previously set off against the corresponding expense. .Exchange gains and losses. corresponding to the date on which control is transferred to the Group. . the costs of temporary and permanent Village closures. and Recreational Villages.Sales of goods: revenue from the sale of goods is recognized when the goods are delivered and the significant risks and rewards of ownership are transferred to the buyer. and is recognized as follows: . As from 2007. . have been reclassified under provisions to make the EBITDAR indicator more meaningful. corresponding to all the costs related to changes in the scope of consolidation.C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S .Leisure. Total income from ordinary activities includes: Revenue Revenue corresponds to amounts received on the sale of goods and services by fully consolidated companies in the normal course of business. which is based on actuarial assumptions. Other income Other income mainly includes insurance settlements for business interruption losses as well as government grants recognized in accordance with the accounting methods described in Note 2. reversals of utilized provisions. . Other operating revenues are recognized in the period in which the transaction takes place.2. The results of consolidated subsidiaries acquired or divested during the year are included in consolidated income from the acquisition date or up to the divestment date. . . FINANCIAL STATEMENT PRESENTATION .Discounting adjustments to provisions for pensions and other long-term benefit obligations.Dividends received from non-consolidated companies. 2. .21%-owned.For the determination of deferred taxes. the impact of natural disasters and credit card costs. which is 10%owned.Operating income .For non-current asset impairment tests. Control is the direct or indirect power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Holiday Villages of Thailand. are fully consolidated because Club Méditerranée exercises de facto control.18. . The performance of the Villages (owned or leased) is tracked internally based on the Leisure activities’ EBITDAR. and impairment charges on operating and marketing units.Service revenues: land package revenues are recognized over the period of service provision.For the determination of provisions for claims and litigation. 2007 ANNUAL REPORT 121 . together with the profits included in the carrying amount of assets acquired in intra-group transactions. Société Martiniquaise des Villages de Vacances. including gains and losses on disposals of assets. BASIS OF CONSOLIDATION Income from ordinary activities is recognized when it is probable that the economic benefits associated with the transaction will flow to the Group and the amount of income can be measured reliably.Gains and losses on derivative instruments.Operating income – Management of assets. . . All intra-group balances and transactions.1.Interest expense and income on net debt. A) INCOME FROM ORDINARY ACTIVITIES C) FINANCE COST. particularly in assessing the recoverability of deferred tax assets. Companies over which the Group exercises significant influence (“associates”) are accounted for by the equity method. corresponding mainly to restructuring costs. . until the date on which control ceases. The list of consolidated companies and the consolidation methods applied are presented in Note 29.Impairment charges on financial assets. Comparative data for 2006 has been restated to reflect this change although the amounts involved were not material.2. income and expenses are eliminated in full in consolidation. Operating income is broken down in the statement of income between: . net. Subsidiaries are consolidated from the acquisition date.Bank charges. are fully consolidated.Other operating income and expense. Transport revenues are recognized on the travel date. corresponding to all the income and expenses directly related to the Group’s operations. NET This item includes: . which are based on estimated future cash flows and assumptions concerning future growth rates and discount rates. 21%-owned. B) OPERATING INCOME All companies that are controlled by Club Méditerranée. directly or indirectly.

Any gains or losses on subsequent disposals of foreign subsidiaries will exclude translation differences that arose before 1 November 2004. part of the Group’s net investment in the foreign operation.4.3. BUSINESS COMBINATIONS AND GOODWILL The consolidated financial statements are presented in euros. The method adopted by the IASB may differ from that described above. CHANGES IN MINORITY INTERESTS As there is currently no specific accounting treatment prescribed in IFRS for changes in minority interests. The same accounting treatment applies to monetary items that are receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur in the foreseeable future. should describe how to account for this type of transaction.3. and the resulting impact is recorded in the statement of income. 122 . under “Translation reserve”. GOODWILL AND INTANGIBLE ASSETS 2. as follows: . are translated into euros using the historical rate method.4.3. lease premiums and software. Club Méditerranée SA. by measuring the assets acquired and liabilities and contingent liabilities assumed at their fair value at the date of the combination.4. The revised version of IFRS 3 – Business Combinations. corresponding to the exchange rate on the transaction date. as these items are considered as representing. as follows: .3. INTANGIBLE ASSETS Exchange differences on monetary assets and liabilities that are an integral part of the Group’s net investment in a consolidated foreign operation are accumulated in equity until the foreign operation is sold or liquidated.2. representing the second phase of the business combinations project. Consequently. 2.Balance sheet items are translated at the closing exchange rate at the balance sheet date. 2.2. Based on this analysis. .Non-current assets and the corresponding amortization and depreciation charges are translated at the historical rate. TRANSLATION OF THE FINANCIAL STATEMENTS OF FOREIGN SUBSIDIARIES 2. minority interests in the identifiable assets and liabilities of the acquired entity are also measured at fair value.2. Intangible assets are analyzed to determine whether they have a finite or indefinite life.7 “Impairment of assets”.4. .1.3.Purchases of additional minority interests result in goodwill. FOREIGN CURRENCY TRANSLATION 2.Monetary assets and liabilities are translated at the closing rate. The financial statements of independent subsidiaries whose functional currency is not the euro are translated into euros by the closing rate method.Transactions that reduce the Group’s interest in an entity (without loss of control) are treated as a sale of interests to minority shareholders. in accordance with the policy described in Note 2. The resulting exchange differences are recognized as a separate component of equity.3. In accordance with IFRS 1 -– First Time Adoption of IFRS – cumulative translation adjustments arising on the translation of the financial statements of foreign subsidiaries were reset to zero at 1 November 2004 by adjusting opening retained earnings. . The excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets. . The resulting exchange differences are recorded in “Finance cost. TRANSACTIONS IN CURRENCIES OTHER THAN THE FUNCTIONAL CURRENCY Business combinations recorded prior to 1 November 2004 have not been retrospectively restated in accordance with IFRS. OPTION SELECTED BY THE GROUP ON FIRST-TIME ADOPTION OF IFRS Intangible assets consist mainly of brands. 2.Income statement and cash flow statement items are translated at the average rate for the period. The financial statements of operating and real estate companies that are not independent from the parent. the Group has chosen to apply the following method: . liabilities and contingent liabilities of the acquired entity at the date of the combination is recognized as goodwill. they are not amortized but are tested for impairment at least once a year and whenever events or circumstances indicate that their recoverable amount may be less than their carrying amount. Purchased intangible assets are carried at cost less accumulated amortization and any accumulated impairment losses.1. 2. the Jet tours brand and lease premiums in France have been qualified as having an indefinite life. BUSINESS COMBINATIONS.Income statement items (other than amortization and depreciation charges) and cash flow statement items are translated at the average rate for the period. being the difference between the consideration paid and the relevant share acquired of the carrying amount of non-revalued net assets of the subsidiary. For business combinations not achieved in stages. Business combinations carried out since that date are accounted for by the purchase method. net”. in substance.

wall and floor coverings. they are fully depreciated over the shorter of the lease term and their useful life. Property. Lease payments under operating leases are recognized as an expense on a straight-line basis over the lease term. The adjustments are treated as a change in accounting estimates and are made prospectively. foundations and structures Roof structures and coverings External and internal walls Utility installations (plumbing. the present value of the minimum lease payments. Assets under finance leases are depreciated over their estimated useful life. Useful lives are reviewed at each year-end and adjusted if necessary. plant and equipment are tested for impairment whenever there is an indication that their recoverable amount may be less than their carrying amount (see Note 2. The main useful lives are as follows: Financial information system Marketing system Other software Other intangible assets 3 to 15 years 3 to 24 years 3 to 8 years 3 to 10 years The main useful lives are as follows: Groundworks. plant and equipment are depreciated on a straightline basis over their estimated useful lives. certain land and buildings were measured at fair value in accordance with the option available under IFRS 1. Leases are classified as either finance leases or operating leases based on the substance of the transaction.6. Lease payments are apportioned between the finance charge and the reduction of the outstanding liability.7 “Impairment of assets”). Production cost includes materials and direct labor. plant and equipment are measured using the cost model.C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S All other intangible assets (software and licenses) are qualified as having a finite life and are amortized over their estimated useful life. Property. Intangible assets with a finite life are tested for impairment whenever there is an indication that their recoverable amount may be less than their carrying amount (see Note 2. 2. OPERATING LEASES Leases that do not transfer substantially all the risks and rewards of ownership to the lessee are classified as operating leases. 2. LEASES At the IFRS transition date (1 November 2004).7 “Impairment of assets”). electricity. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest. plant and equipment held under finance leases that transfer substantially all the risks and rewards of ownership of the assets to the lessee are recognized as assets.) Other 50 years 30 years 25 years 20 years 15 years 10 years 3 to 10 years These useful lives are reviewed at each year-end and adjusted if necessary. etc. and are therefore stated at cost less accumulated depreciation and any accumulated impairment losses. FINANCE LEASES Finance leases that transfer substantially all the risks and rewards of ownership of the assets to the Group are initially recognized in the balance sheet at amounts equal to the fair value of the leased asset or. heating. each determined at the inception of the lease. Property. However. PROPERTY. Cost corresponds to the asset’s purchase or production cost plus the directly attributable costs of bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended. The individual parts of each item of property. The adjustments are treated as a change in accounting estimates and are made prospectively.) Fixed hotel equipment Fixtures and fittings (joinery. PLANT AND EQUIPMENT Property. Finance charges are recorded directly in the statement of income. etc.5. windows. if lower. 2007 ANNUAL REPORT 123 . Villages are expected to be used throughout their useful life and depreciation is therefore calculated without deducting any residual value. if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term. plant and equipment are recognized separately when their estimated useful life is different from that of the asset as a whole. as well as borrowing costs that are directly attributable to the construction or production of the asset.

Estimates of recoverable amounts are based on assumptions concerning Village occupancy rates. Impairment losses may be reversed in subsequent periods if the conditions that led to their recognition have changed. Financial assets are classified in four categories in accordance with IAS 39. . an impairment loss is recognized to write down the CGU to recoverable amount. The discount rate used is determined based on weighted average cost of capital (WACC).Plans to discontinue or restructure the operation to which the asset belongs. Impairment losses are recorded in priority against any goodwill allocated to the CGU. The recoverable amounts obtained using this method are the same as those that would be obtained by applying a pre-tax discount rate to pre-tax cash flow projections as required by IAS 36.8. GOODWILL AND INTANGIBLE ASSETS WITH INDEFINITE USEFUL LIVES 2. whenever there is an indication that their recoverable amount may be less than their carrying amount. . . This is a post-tax rate applied to post-tax cash flow projections. For impairment testing purposes. growth rates for the region or the business. Cash flow projections for subsequent periods are estimated by extrapolating the projections based on a growth rate to perpetuity and the present value of the assets concerned at the end of their useful lives.1. IMPAIRMENT OF ASSETS 2.7. Cash flow projections for subsequent periods are estimated by extrapolating the projections based on a growth rate to perpetuity and the present value of the assets concerned at the end of their useful lives. Their subsequent measurement depends on their classification.Held-to-maturity investments. an impairment loss is recorded for the difference. Impairment tests are based on recoverable amounts estimated by reference to market multiples (to determine estimated fair value less costs to sell) and discounted cash flows (to determine estimated value in use). 2.2. Fair value is estimated based on independent valuations or earnings multiples. . Club Med Gym. When the CGU’s recoverable amount determined by the above methods is less than the carrying amount of its assets. The cash-generating units used by the Group are based on the groups of assets used to organize its businesses and analyze their results. Goodwill related to the other businesses (tour operating. Goodwill related to the Village business is allocated and analyzed by region (see Note 4 “Segment information”).Loans and receivables. goodwill and intangible assets with an indefinite life are tested for impairment annually and whenever there is an indication that their recoverable amount may be less than their carrying amount. as follows: .Available-for-sale financial assets. . . goodwill is allocated to the cash-generating unit (CGU) to which it relates. Impairment tests are therefore performed Village by Village.7.2.Evidence that an asset’s physical condition has deteriorated beyond the effects of normal wear and tear. 124 .) is tested for impairment at the level of these businesses. PROPERTY.7.Changes in the economic or legal environment. leading to a significant decline in the asset’s market value. Financial assets are initially recognized at cost. etc.Evidence that the asset’s economic performance is worse than expected. Recoverable amount corresponds to the higher of the Village’s fair value less costs to sell and its value in use. AVAILABLE-FOR SALE FINANCIAL ASSETS AND OTHER FINANCIAL ASSETS In accordance with IAS 36 – Impairment of Assets. Future cash flows are based on cash flow projections contained in management forecasts and the Group’s business plan covering a period of three years.Financial assets at fair value through profit or loss. defined as the higher of value in use and fair value less costs to sell. Value in use is determined by estimating the future cash flows expected to be derived from the asset. Value in use is determined on the basis of cash flow projections contained in management forecasts and the Group’s business plan covering a period of three years. perpetual growth rates and discount rates. corresponding to the fair value of the consideration paid plus directly attributable transaction costs. If the carrying amount of a Village’s assets is greater than the Village’s recoverable amount. PLANT AND EQUIPMENT AND DEPRECIABLE INTANGIBLE ASSETS These assets are tested for impairment whenever there is an indication that their recoverable amount may be less than their carrying amount. Indications of impairment include: . The Group has determined that each Village represents a separate CGU.

net of any expected reimbursement. it is virtually certain that reimbursement will be received. INVENTORIES Inventories are measured at the lower of cost. A description of the main plans is provided in Note 14.10. (ii) management has initiated a plan to sell the asset (or disposal group). 2. provisions are discounted using a pre-tax discount rate that reflects any specific risks associated with the obligation. When there is objective evidence of a prolonged decline in the fair value of an available-for-sale financial asset. Cash equivalents are defined as short-term. Gains and losses are recognized in the statement of income. net”. NON-CURRENT ASSETS HELD FOR SALE 2. Gains and losses arising on remeasurement at fair value are recognized directly in equity until the asset is sold. and (iii) the sale is highly probable. Heldto-maturity investments are financial assets with fixed or determinable payments and a fixed maturity. PENSIONS AND OTHER LONG-TERM BENEFITS In accordance with IFRS 5. the cumulative loss that had been recognized directly in equity is transferred from equity to the statement of income. 2. 2. TRADE AND OTHER RECEIVABLES Trade receivables are recognized and measured based on the initial invoice amount. non-current assets and groups of non-current assets (disposal groups) are classified as held for sale when their carrying amount will be recovered principally through a sale transaction rather than through continuing use. less any accumulated impairment losses. They include cash at bank and in hand. 2. Group employees are covered by various plans providing for the payment of supplementary pensions. The fair value of unlisted securities corresponds to their estimated value in use. and net realizable value. 2. calculated by the weighted average cost method. 2007 ANNUAL REPORT 125 . for example under an insurance policy.14. Non-current assets held for sale and the related liabilities are presented on separate lines of the balance sheet. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. length-of-service awards and other long-term benefits in line with the laws and practices in the Group’s host countries.C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S Financial assets at fair value through profit or loss are classified in current assets and measured at fair value. At each period-end. They are not depreciated. Held-to-maturity investments and loans and receivables are measured at amortized cost. determined by the effective interest method. Bad debts are written off when it is certain they will not be recovered.9. highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. CASH AND CASH EQUIVALENTS Cash and cash equivalents are held to meet the Group’s shortterm cash needs. except for the portion representing an effective hedge in a designated hedging relationship. the reimbursement is recognized as a separate asset when. PROVISIONS Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event.13. the recoverability of loans is assessed and an impairment loss is recognized if their recoverable amount is less than their carrying amount. The fair value of listed securities corresponds to their market value. Where the effect of the time value of money is material. The provision expense is recorded in the statement of income. A provision is recorded when there is objective evidence of impairment. Derivative instruments are included in this category. determined using the most appropriate financial criteria for the issuer’s specific situation. Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party. The increase in discounted provisions due to the passage of time is recognized in “Finance cost. net”.12.11. Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their carrying amount prior to reclassification and fair value less costs to sell. Investments in non-consolidated companies are classified as available-for-sale financial assets. it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. and only when. This is considered to be the case when (i) the asset (or disposal group) is available for immediate sale in its present condition. with changes in fair value recognized in “Finance cost. short-term deposits with an original maturity of less than three months and money-market funds that are readily convertible into cash. Other financial assets are classified as available-for-sale financial assets and measured at fair value.

Deferred tax assets are recognized for deductible temporary differences to the extent that it is probable that taxable income will be available against which the deductible temporary difference can be utilized. Past service cost is recognized as an expense over the average period until the benefits become vested. The gain or loss on a curtailment or settlement comprises any resulting change in the present value of the defined benefit obligation and any related actuarial gains and losses and past service cost that had not previously been recognized. Past service cost Past service cost is the increase in the present value of the defined benefit obligation resulting from changes to postemployment benefits or other long-term benefits. Actuarial gains and losses – corresponding to the effect of changes in actuarial assumptions on the amount of the obligation – are recognized as explained below. Income tax expense is recognized in the statement of income. Tax assets and tax liabilities are offset when the Group has a legally enforceable right to set off the recognized amounts. deferred taxes are recognized for temporary differences between the carrying amounts of assets and liabilities and their tax bases.POST-EMPLOYMENT BENEFITS 2. 2.16. Borrowings and other financial liabilities are initially recognized at fair value. The portion of actuarial gains and losses that exceeds the 10% corridor is recognized in income over the average remaining service lives of plan participants. These variables are reviewed each year. BORROWINGS AND OTHER FINANCIAL LIABILITIES Treatment of actuarial gains and losses Actuarial gains and losses arising on post-employment benefits are recognized in income by the corridor method. as well as on tax loss carryforwards. In accordance with IAS 12 – Income Taxes. they relate to income taxes levied by the same taxation authority and the Group intends to settle on a net basis. net”. adjusted for directly attributable transaction costs. redemption premiums and the settlement of the obligation at maturity). OCEANEs (BONDS CONVERTIBLE INTO NEW OR EXISTING SHARES) The Group’s debt includes two convertible bond issues (OCEANEs). using the effective interest method. Under this method. except when it relates to items recognized directly in equity in which case it is also recognized in equity. They are subsequently measured at amortized cost. nonamortized actuarial gains and losses as of 1 November 2004 have been recognized in equity. applied separately to each individual plan. No provision is recorded as the Group’s obligation is limited to its contributions to the plan. Curtailments and settlements Gains or losses on the curtailment or settlement of defined benefit plans are recognized when the curtailment or settlement occurs. 126 . actuarial gains and losses are recognized in the statement of income when cumulative unrecognized gains and losses exceed the greater of 10% of the present value of the defined benefit obligation and 10% of the fair value of plan assets. corresponding to the increase in the obligation due to the passage of time. by the liability method. These financial instruments comprise both a liability component and a conversion option recognized as an equity component. Issue costs are allocated to each component pro rata to their respective carrying amounts. discounted at the market interest rate on the issue date for debt instruments with the same characteristics in terms of maturity and cash flows but without a conversion option. so as to increase the carrying amount over the life of the debt to the amount payable at maturity to settle the obligation if the bonds are not converted. The carrying amount of deferred tax assets is reviewed at each period-end.15. The difference between interest expense determined by the effective interest method and the interest actually paid is added to the carrying amount of the liability. Defined benefit plans Obligations under defined benefit plans are measured by the projected unit credit method. If the benefits are already vested. The interest cost.16. The value of the equity component represents the difference between the nominal amount of the issue and the fair value of the liability component. 2.1. is recognized in “Finance cost. past service cost is recognized immediately. In accordance with the option provided under IFRS 1. This method involves the use of long-term actuarial assumptions concerning demographic variables (such as employee turnover and mortality) and financial variables (such as future increases in salaries and discount rates). DEFERRED TAX Defined contribution plans Contributions to government plans and other defined contribution plans are recognized as an expense for the period in which they are due. The component classified as a financial liability is measured at the present value of the future contractual cash flows (including interest.

C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S 2. The Group’s risk management policy is presented in Note 18. determined using the Black & Scholes option pricing model – is recognized in employee benefits expense with a corresponding increase in equity.19. are recorded as a deduction from consolidated equity at cost. If the hedging instrument no longer meets the criteria for hedge accounting and the forecast transaction is still expected to occur. MEASUREMENT OF DERIVATIVE FINANCIAL INSTRUMENTS Government grants are recognized when there is reasonable assurance that the conditions attached to them will be met and that the grants will be received. 2007 ANNUAL REPORT 127 . If the forecast transaction is no longer expected to occur.1.16. In both cases.2. the cumulative gain or loss recognized directly in equity remains recognized in equity until the forecast transaction occurs.2. In accordance with the transitional provisions of IFRS 2. issue or cancellation of equity instruments issued by the Group. Cash flow hedges are hedges of the exposure to variability in cash flows that is attributable to a particular risk associated with a recognized asset or liability.17. to hedge the Group’s exposure to fluctuations in exchange rates. GOVERNMENT GRANTS Other financial liabilities are measured at amortized cost using the effective interest method. sale.17. They are subsequently measured at fair value. including issue costs and issue and redemption premiums. corresponding in the Group’s case to stock options and convertible bonds. for whatever purpose. the derivative instrument is classified as a financial instrument at fair value through profit or loss and subsequent changes in fair value are recognized in “Finance cost. Grants that are intended to compensate costs are recognized as income over the periods necessary to match them with the related costs that they are intended to compensate. net”. only options granted after 7 November 2002 that had not yet vested at 1 November 2005 were recognized and measured at the IFRS transition date. or a highly probable forecast transaction. Derivative instruments are used by the Group as part of its cash flow hedging strategy. All Club Méditerranée shares held by the Group.20. 2. 2. net”.17. The effective portion of changes in the fair value of cash flow hedges eligible for hedge accounting is recognized directly in equity and reclassified into “Finance cost. The ineffective portion is recognized in “Finance cost. 2. EARNINGS PER SHARE Basic earnings per share correspond to net income attributable to equity holders divided by the weighted average number of shares outstanding during the period. TREASURY SHARES The Group uses financial instruments to optimize its borrowing costs and to hedge budgeted future net cash flows in foreign currencies. 2. No interest rate hedges have been set up and the Group does not implement any fair value hedging strategy. net”.18. on a systematic basis. This cost is adjusted based on the actual number of options that will be exercisable at the start of the exercise period.1. Diluted earnings per share take into account dilutive potential ordinary shares. 2. HEDGE ACCOUNTING The Group has set up stock option plans for members of senior management and certain employees.21. the benefit granted to employees in the form of stock options is recognized as an expense over the vesting period (corresponding to the period up to the start date of the exercise period). No gain or loss is recognized in the statement of income on the purchase. SHARE-BASED PAYMENTS Derivative financial instruments are initially recognized at their fair value on the date when the Group becomes a party to the contractual provisions of the contract. The cost of stock options – corresponding to the fair value of the employee services rendered. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING INSTRUMENTS 2. the cumulative gain or loss recognized directly in equity is reclassified immediately into “Finance cost. net” in the period when the firm commitment or future transaction affects profit or loss. Government grants related to assets are initially recognized as deferred income (other non-current liabilities) at fair value and subsequently recognized under “Other income” over the useful lives of the assets concerned. Derivative instruments with a positive fair value are recognized as an asset and derivative instruments with a negative fair value are recognized as a liability. OTHER FINANCIAL LIABILITIES 2. net of treasury shares. or a firm commitment. In accordance with IFRS 2.

Two companies were sold: .1.28% interest in this company. BUSINESS SEGMENTS 121 6 (1) (2) (2) 112 5 (1) 9 1 (2) The Group is organized around four business segments: . set up on 4 September 2007.On 28 November 2006.38%. raising its stake to 100% from 65%. as well as the development of tours marketed by Club Med Découverte. The Club Med Gym business segment corresponds to the marketing and management of fitness clubs.94% from 98.CM Inc. . Jet tours acquired 35% of the outstanding shares of FST.Club Med Gym .Club Med Villas et Chalets Holding.Club Med Villas et Chalets Services. Two companies were deconsolidated: .Club Med Ferias. One company was liquidated: . The Tour Operating business segment includes the development and marketing of tours and vacations by Jet tours.SOMAVIVAC. sold on 31 October 2007. set up on 27 April 2007. net of tax.In addition. It corresponds to all-inclusive vacation packages and covers the marketing and organization of the vacation. It also includes the management of Village property assets. options whose exercise price is lower than the average Club Méditerranée share price for the period). .On 9 March 2007. Segment information 4. income attributable to shareholders is adjusted for the interest paid on the bonds. The Village business segment comprises the Villages. CMSA acquired 40% of the outstanding shares of CM Viagens. . transport and related services. .Club Med Villas et Chalets. set up on 19 September 2007. Note 3. . sold on 31 October 2007.e.On 31 January 2007. . reducing its overall stake from 24. The impact of this acquisition on the consolidated financial statements is described in Note 5.. This company is fully consolidated.Tour operating . on 15 May 2007 Jet tours acquired the entire capital of Quotidien Voyages (Austral Lagons). CM Asie acquired 1.Albion Development Ltd. set up on 25 October 2007.SNC Caravelle 2006.28% to 17%. Changes in scope of consolidation Number of consolidated companies Scope of consolidation at 31 October 2006 Newly consolidated companies Liquidations Disposals Change in consolidation method Scope of consolidation at 31 October 2007 Full consolidation Equity method Total Note 4. raising its stake to 100% from 60%. The business segment therefore represents the Group’s Six companies were consolidated for the first time in fiscal 2007: . determined in accordance with IFRS 2. set up on 25 October 2007.56% of the outstanding shares of SPVV. 128 . liquidated on 31 March 2007. the cruise business (Club Med 2) and the marketing of Club Med Découverte tours. based on the type of products and services sold. The calculation only includes options that are in the money (i. “Goodwill and Business Combinations”. .CIVAC. This adjusted income is then divided by the average number of shares that would be issued assuming conversion of all the outstanding bonds.Club Med World The Group’s operating activities are organized and managed separately. Other changes in the scope of consolidation were as follows: . raising its stake to 99. For convertible bonds. Potential ordinary shares corresponding to bond conversions are included in the calculation only if they are dilutive. primary reportable segment. . The Group sold a 7.The average number of dilutive potential shares corresponding to stock options is determined by the treasury stock method. These changes in scope of consolidation did not have a material impact on the consolidated financial statements. deconsolidated on 13 December 2006. Each segment offers different products and serves different (1) (1) 115 7 122 markets. The exercise price takes into account the fair value of the services remaining to be received. .Villages .Société Immobilière de la Mer.

Europe-Africa . Alternatively. Inter-segment transactions are not material. The Asia segment comprises the countries of Asia and Oceania. The main transactions concern the organization by the Tour Operating segment of tours sold by the Villages’ marketing network (Club Med Découverte) and the sale by the Jet tours marketing network of vacations in the Villages. 4. Operations are organized around three geographical segments: .323 300 47 9 1.367 302 49 9 1.679 Inter-segment transactions (35) (11) Revenue contribution 1.C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S The Club Med World business segment corresponds to the management of a leisure and entertainment complex. plant and equipment. comprising conference facilities.Americas . Segment assets include goodwill. INFORMATION BY BUSINESS SEGMENT (in € millions) Fiscal 2006 Revenue Villages Tour operating (Jet tours) Club Med Gym Club Med World Eliminations Total 1. as well as a night club and areas used to organize activities for children.Asia Geographical segments can correspond to the location of customers and. therefore.2. geographical segments may correspond to the location of assets. amortization and impairment (61) (1) (4) (1) (67) Share of income of associates 3 3 2007 ANNUAL REPORT 129 .727 46 - 45 - (in € millions) Fiscal 2006 Operating income Leisure Villages Tour operating (Jet tours) Club Med Gym Club Med World Total 19 3 4 (2) 24 Operating income 31 3 3 (2) 35 Depreciation. which are included in net debt. the Middle East and Africa. in which case they are qualified as inbound zones.400 314 49 9 (45) 1.358 311 47 9 (46) 1. theaters and concert halls. and current assets other than cash and cash equivalents and tax receivables. These segments are qualified as outbound zones. with the exception of borrowings and other interest-bearing liabilities. to the region where the vacations are sold.727 Fiscal 2007 Inter-segment transactions (33) (12) Revenue contribution 1. The Americas segment comprises the countries of North and South America and the West Indies. The Europe-Africa segment comprises the countries of Europe. restaurants. intangible assets and property. non-current assets held for sale.679 Revenue 1. The Group’s secondary reportable format is the geographical segment. Segment liabilities include provisions – other than provisions for taxes – and other liabilities.

(in € millions) Fiscal 2007 Operating income Leisure Villages Tour operating (Jet tours) Club Med Gym Club Med World Total 28 2 5 (2) 33 Operating income 9 2 5 (2) 14 Depreciation.369 Segment liabilities 493 55 45 2 595 Capital expenditure(1) 94 1 4 99 Segment liabilities 473 48 40 3 564 Capital expenditure(1) 141 2 3 146 1.679 Fiscal 2007 1.727 Revenue in France amounted to €637 million in fiscal 2007 (€613 million in fiscal 2006).623 Fiscal 2006 Europe-Africa Americas Asia Total 1.3.180 87 72 4 1.343 80 35 165 1.372 188 167 1.198 94 74 3 1. 130 . amortization and impairment (52) (1) (3) (1) (57) Share of income of associates 1 1 (in € millions) 31 October 2006 Segment assets Villages Tour operating (Jet tours) Club Med Gym Club Med World Total (1) Excluding government grants.593 595 490 444 64 1. INFORMATION BY GEOGRAPHICAL SEGMENT REVENUE (OUTBOUND ZONES) (in € millions) 31 October 2007 1.338 196 145 1.369 86 30 108 1.593 1.343 Reconciliation of segment assets and liabilities to the amounts reported in the balance sheet: (in € millions) 31 October 2006 Segment assets Non-current financial assets Deferred tax assets Cash and cash equivalents Total assets Segment liabilities Equity Borrowings and other interest-bearing liabilities Deferred tax liabilities Total equity and liabilities 4.623 564 514 459 86 1. 31 October 2007 Segment assets 1.

Specialized in island vacations. 31 October 2007 Segment assets 871 392 106 1. Quotidien Voyages contributed €22 million to consolidated revenue in fiscal 2007. Its contribution to operating income was not material. BUSINESS COMBINATIONS ACQUISITION OF QUOTIDIEN VOYAGES (AUSTRAL LAGONS) On 15 May 2007 Jet tours acquired the entire capital of Quotidien Voyages.1.2.369 Capital expenditure(1) 70 21 8 99 Capital expenditure(1) 60 71 15 146 869 367 107 1. If the company had been consolidated over the full year. Trade receivables Other receivables Cash and cash equivalents Trade payables and other current liabilities Fair value of acquired assets and assumed liabilities Goodwill Acquisition cost Acquisition cost net of acquired cash 5 1 4 (8) 2 6 8 4 There were no changes in goodwill in fiscal 2006. 5. it would have contributed €38 million to consolidated revenue and €1 million to consolidated operating income. Goodwill and business combinations 5.343 Note 5. 2007 ANNUAL REPORT 131 . ANALYSIS (in € millions) 31 October 2006 Net Villages – Europe-Africa Tour operating (Jet tours) Club Med Gym Europe-Africa Villages – Americas Villages – Asia Total 19 33 43 95 3 5 103 31 October 2007 Net 20 39 43 102 2 4 108 Changes in goodwill were as follows: (in € millions) The assets acquired and liabilities and contingent liabilities assumed were as follows: 103 6 (1) 108 (in € millions) At 1 November 2006 Changes in scope of consolidation(1) Translation adjustments and other At 31 October 2007 (1) Goodwill arising on the Quotidien Voyages acquisition.C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S SEGMENT ASSETS AND CAPITAL EXPENDITURE (LOCATION OF ASSETS) (in € millions) 31 October 2006 Segment assets Europe-Africa Americas Asia Total (1) Excluding government grants. this company operates under the name Austral Lagons.

132 . Intangible assets (in € millions) Brands and licenses Cost at 1 November 2005 Accumulated amortization Net at 1 November 2005 Acquisitions Disposals Amortization for the period Reclassifications Cost at 31 October 2006 Accumulated amortization Net at 31 October 2006 Acquisitions Amortization for the period Impairment Reclassifications and other Cost at 31 October 2007 Accumulated amortization Net at 31 October 2007 28 (3) 25 28 (3) 25 28 (3) 25 Software Lease premiums 17 (4) 13 1 1 Other intangible assets 11 (5) 6 (2) (1) (5) 6 (3) 3 Intangible assets in progress 5 5 4 Total 104 (74) 30 3 (6) 5 112 (80) 32 5 (7) 1 5 119 (83) 36 165 (86) 79 8 (1) (7) 0 168 (89) 79 9 (7) 1 1 175 (92) 83 18 (3) 15 4 4 4 (4) 18 (3) 15 6 (3) 3 4 4 Intangible assets with indefinite useful lives amounted to €32 million. Based on the results of the annual impairment tests performed no impairment losses have been recognized in relation to these assets. The assumptions used for impairment tests on the CGUs to which material goodwill and non-depreciable intangible assets have been allocated are as follows: Goodwill is allocated to cash-generating units (CGUs).50% 7. Based on the results of the impairment tests performed in fiscal 2006 and 2007. no impairment losses were recognized on goodwill or intangible assets with indefinite useful lives in either of these two years. IMPAIRMENT TESTS The recoverable amount of the main CGUs to which material goodwill has been allocated is calculated based on their value in use.50% Net (1) Discount rate 7.00% 7.20% 2.50% 1. The principles underlying these tests are described in Note 2.50% Discount rate 7.3. which correspond to the Villages in each geographical segment. Value in use is determined by the discounted cash flows method described in Note 2.00% 7.00% Perpetual growth rate 2.50% 7. including €23 million for the Jet tours brand which was acquired in a business combination. the tour operating business and Club Med Gym.20% Villages – Europe-Africa Tour operating (Jet tours) Club Med Gym 29 56 43 29 62 43 (1) Goodwill and intangible assets with indefinite useful lives allocated to the CGU. Goodwill was tested for impairment at the IFRS transition date and since then has been tested once a year.7 “Impairment of assets”.50% 1.5.7 “Impairment of assets” (in € millions and %) Fiscal 2006 CGU Net (1) Fiscal 2007 Perpetual growth rate 1. Note 6.20% 2.

Property. Les Deux Alpes and Avoriaz Villages.040 (527) 513 48 (50) (7) (34) (4) (27) (6) 48 858 (377) 481 34 (12) (33) 6 (14) 37 846 (347) 499 Equipment 154 (103) 51 25 (4) (1) (13) (2) (2) 2 150 (94) 56 20 (2) (13) (2) 8 158 (91) 67 FISCAL 2006 Other 139 (90) 49 7 Assets under construction 53 53 58 (2) (4) Total 1.410 (551) 859 101 (45) (55) 6 (25) 1. Valbella and Cadaques Villages.362 (521) 841 (9) (2) 6 130 (79) 51 8 (1) (9) (1) (56) 48 48 39 (50) (7) 224 (1) 223 (30) (6) 188 (1) 187 1 132 (82) 50 (3) (46) 38 38 The year’s capital expenditure mainly concerned the Villages of La Pointe au Canonniers (€16 million). Flaine.696 (721) 975 138 (65) (32) (56) (4) (81) (16) 1. and the sale-and-operating-leaseback of the Chamonix. La Caravelle (€5 million). during the year the Group exercised the purchase options under the finance leases on the Sandpiper. Les Boucaniers (€15 million). These remeasurements gave rise to a €6 million impairment reversal recognized under Operating income – Management of assets. Villarssur-Ollon (€4 million).1. Kanifinolhu (€10 million) and Cervinia (€3 million). The improvement in Village indicators led the Group to remeasure the value of certain impaired Villages. Cancún Yucatan (€6 million). Capital expenditure in fiscal 2006 mainly concerned the Villages of La Caravelle (€19 million). Opio en Provence (€5 million). The decrease in asset value related to translation adjustments was primarily due to the US dollar and Mexican peso. and Punta Cana (€4 million). Cancún Yucatán (€15 million). Peisey-Vallandry (€10 million). Disposals included the outright sale of the Crested Butte.C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S Note 7. In addition. La Plagne 2100 (€6 million). plant and equipment 7. the Da Balaia Village was sold and leased back at the end of April. Ixtapa Pacific and Cancún Yucatán Villages for a total of €14 million. ANALYSIS (in € millions) Land Cost at 1 November 2005 Accumulated depreciation Net at 1 November 2005 Acquisitions Disposals Changes in scope of consolidation Depreciation for the period Impairment losses Transfers to assets held for sale Translation adjustments Reclassifications Cost at 31 October 2006 Accumulated depreciation Net at 31 October 2006 Acquisitions Disposals Depreciation for the period Impairment reversal Translation adjustments Reclassifications Cost at 31 October 2007 Accumulated depreciation Net at 31 October 2007 FISCAL 2007 310 (1) 309 (9) (20) Buildings and fixtures 1. In addition. 2007 ANNUAL REPORT 133 . Ixtapa Pacific (€11 million).

“Other long-term facilities”).3. plant and equipment break down as follows by business and geographical segment: (in € millions) 31 October 2006 Cost Europe-Africa Americas Asia Sub-total Villages Tour operating (Jet tours) Club Med Gym Club Med World Total 679 483 182 1.1.2.295 5 48 14 1. At 31 October 2007.410 Depreciation and provisions (332) (110) (68) (510) (3) (27) (11) (551) Net 347 373 114 834 2 20 3 859 Cost 633 480 182 1.7.344 5 47 14 1. The lien on the Da Balaïa Village was released when the Village was sold (see Note 17. as well as by a lien on shares in the company that owns the Pointe aux Canonniers Village.28% interest in Société Immobilière de la Mer. versus €37 million worth of collateral for debts of €36 million at 31 October 2006. INVESTMENTS IN ASSOCIATES (in € millions) 31 October 2006 Sviluppo Turistico per Metaponto (Italy) Société Immobilière de la Mer (Morocco) SPFT . OTHER INFORMATION Property. loans were set up secured by mortgages on the assets of the Club Med 2 cruise ship and the Cancún Yucatán Village. Non-current financial assets (in € millions) 31 October 2006 Investments in associates Available-for-sale financial assets Other non-current financial assets Total 31 5 44 80 31 October 2007 27 18 41 86 8. 134 . decreasing its stake to 17%. The disposal gain was recorded under Operating income – Management of assets (see Note 21) and the remaining interest was reclassified at fair value under available-for-sale financial assets. Note 8. In 2007. Finance lease obligations at 31 October 2007 stood at €4 million (€8 million at 31 October 2006).362 31 October 2007 Depreciation and provisions (295) (110) (74) (479) (3) (28) (11) (521) Net 338 370 108 816 2 20 3 841 Assets held under finance leases amounted to €4 million at 31 October 2007 (€16 million at 31 October 2006). the Group sold a 7.Carthago Club Med Albion Resorts Other Total 7 5 10 4 5 31 Fiscal 2007 income Changes in scope of consolidation and other 31 October 2007 7 (5) 1 11 4 5 (5) 27 1 In October 2007. property.3. plant and equipment worth €113 million had been given as collateral for debts of €95 million.

Management of assets”. No impairment losses were recorded in relation to availablefor-sale financial assets in fiscal 2007 or fiscal 2006. 31 8 2 41 Note 9. (in € millions) Land Cost at 1 November 2006 Accumulated depreciation Net at 1 November 2006 Acquisitions Disposals Translation adjustments Cost at 31 October 2007 Accumulated depreciation Net at 31 October 2007 50 53 53 Buildings and fixtures 112 (77) 35 (1) (2) 106 (74) 32 Equipment 11 (9) 2 Other 5 (3) 2 Assets under construction Total 181 (89) 92 1 (3) 50 1 (1) (5) 173 (86) 87 11 (9) 2 5 (3) 2 1 1 Liabilities related to assets held for sale at 1 November 2006 Liabilities related to assets held for sale at 31 October 2007 4 - These assets do not correspond to discontinued operations as defined in IFRS 5. AVAILABLE-FOR-SALE FINANCIAL ASSETS (in € millions) Available-for-sale financial assets consist exclusively of shares in unlisted companies. this timeframe may be exceeded in some cases due to market constraints. An impairment loss of €1 million was recorded on these disposal groups in 2007 (€3 million in 2006).3.C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S 8. shares in Société Immobilière de la Mer were reclassified under available-for-sale financial assets following the sale of part of the Group’s stake in the company. Shares in unlisted companies carried at cost amounted to €5 million at 31 October 2007. 8.2. OTHER NON-CURRENT FINANCIAL ASSETS 10 (in € millions) 2006 At 1 November Changes in scope of consolidation Revaluation of available-for-sale financial assets At 31 October 6 (1) 2007 5 3 5 18 31 October 2006 Loans Deposits Loans to building organizations Other Total 1 33 6 4 44 31 October 2007 At 31 October 2007. to write down the assets to their estimated fair value less costs to sell. as their sale within 12 months from the date of said classification is considered highly probable. 2007 ANNUAL REPORT 135 . Assets held for sale The assets and liabilities attributable to certain Villages have been classified as disposal groups held for sale and reported on a separate line of the balance sheet. However. The shares were measured at fair value and equity was adjusted in a corresponding amount. The impairment loss is included in “Operating income .

Note 10.58 and 327. This provision was reclassified as a provision for impairment of receivables in 2007 and was reversed in an amount of €3 million. Share capital and reserves 12. At 31 October 2006.370.1. versus 277.305 at 31 October 2006. during fiscal 2007 a total of 333. including a negative €25 million attributable to shareholders. An €8 million provision for risk had been set aside in 2006 to cover the site closure costs relating to this Village. 31 October 2007 31 1 76 108 31 October 2006 Marketable securities Derivative instruments Cash Total 9 156 165 Under the buyback programs approved by the Annual Shareholders’ Meetings of 14 March 2006 and 8 March 2007. the Company’s share capital at 31 October 2007 represented 19. Cash and cash equivalents (in € millions) During fiscal 2007. During fiscal 2007. This compares with a positive amount of €10 million at 31 October 2006.005. the total number of fully-paid shares issued and outstanding came to 19. including €6 million attrib- 136 .500 options to purchase existing shares were exercised for a total of €2.9 million.09.705 shares with a par value of €4 each. Other receivables (in € millions) Cost Uncalled capital from minority shareholders Tax receivables Accrued income Prepayments to suppliers Receivables on sales of non-current assets Current account advances to associates Employee advances and prepaid payroll taxes Other receivables Prepaid expenses Total 31 October 2006 Provisions Net Cost 3 42 1 9 9 1 1 31 54 151 31 October 2007 Provisions Net 3 42 1 9 9 1 1 22 54 142 29 3 11 7 2 1 14 44 111 29 3 11 7 2 1 11 44 108 (3) (3) (9) (9) All receivables are due within one year.752 Club Méditerranée SA shares were purchased at an average price of €47. Note 12. and prepaid rentals.588 shares were held in treasury at 31 October 2007.358.700 options to purchase new shares. a total of 201. Based on the exercise of these options and movements in the liquidity contract during the period. CHANGES IN EQUITY SHARE CAPITAL Following the exercise of 12. These transactions were carried out under the liquidity contract. 81. the Group advanced funds to settle the liabilities of a company whose Village was closed.969 shares were sold at an average price of €48. TREASURY SHARES Note 11. The translation reserve amounted to a negative €19 million at 31 October 2007. TRANSLATION RESERVE Marketable securities consist of money market instruments and short-term deposits with an original maturity of less than three months. Prepaid expenses correspond mainly to services included in vacation packages that are paid before travel (such as transport and fee-based services). Treasury shares allocated to the exercise of these options increased the Company’s equity by €3 million.

The stock options granted to members of senior management and certain permanent employees of the Group are exercisable for new shares.1.2. K and L. REVALUATION RESERVES RELATING TO FINANCIAL INSTRUMENTS (in € millions) In fiscal 2007. In fiscal 2006. The decline in fiscal 2006 was mainly due to changes in the US dollar/euro exchange rate. On 8 March 2007.C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S utable to shareholders. The decrease in the translation reserve in fiscal 2007 stems primarily from the depreciation of the US dollar and Mexican peso against the euro.600 shares without consideration (Plan L). Share-based payments 13. All outstanding options have a ten-year life. which are exercisable for existing shares. except for those granted under Plans J.000 options to purchase new shares at an exercise price of €43. The plans do not allow for options to be cash-settled and do not include any vesting conditions based on market conditions or performance targets. the impact on equity of fair value adjustments concerning cash flow hedges and available-for-sale financial assets was not material. DESCRIPTION OF STOCK OPTION AND STOCK GRANT PLANS Plan F expired during fiscal 2007 without any of the options having been exercised. shares in Société Immobilière de la Mer were reclassified under available-for-sale financial assets (see Note 8. MINORITY INTERESTS (in € millions) 31 October 2006 Itaparica (Brazil) Holiday Villages Thailand Belladona Company for H&T (Egypt) Holiday Hotels AG (Switzerland) Taipe Trancoso (Brazil) Sté Villages Hôtels des Caraïbes (France) Covifra (Mauritius) Other Total 18 4 3 7 7 11 2 3 55 Fiscal 2007 income 1 1 1 (1) Dividends (1) Capital increase Translation adjustments 2 31 October 2007 20 5 4 7 9 11 2 3 61 3 2 (1) 3 2 Note 13. The exercise price corresponds to the average of the closing prices quoted for Club Méditerranée shares over the twenty trading days preceding the grant date.2). 2007 ANNUAL REPORT 137 . Vesting conditions for the 17. the Board of Directors used the authorization given at the Annual Shareholders’ Meeting that day to grant members of senior management and certain employees (i) 125.705 shares granted without consideration to members of the Senior Management Committee and the Executive Committee are based on the share’s performance compared with the SBF 120 stock index.07. which have an eight-year life. with the exception of Plan H options. Cash flow hedges 1 November 2006 Fair value adjustments 31 October 2007 0 4 4 Available-for-sale financial assets 0 10 10 12. and (ii) 46. Information about stock option plans is provided in Note 13.

4 0.02.000 23.3 6.3 1.000 2007 Plan L 08.97 07.02.04 50%: 23.03.800 until 07.600 10.14 42.04 9.3 2.03 283.03.07.07 08.05 22.8 4.500 50%: 24.490 138 .07.03 50%: 24.67 213.12 3.8 3.03 50%: 24.02.02.02.01.98 9.97 24.000 2005 Plan J 17.07.11 07.03.000 50%: 23.450 7.07.04.04.97 06.02.11 86.900 9 15.03.05 14.050 Expiry of exercise period Exercise price (in €) Options outstanding at 31 October 2007 Number of options exercised in 2007 Remaining life 0.03.03.02.99 46.74 72.04.10 13.10 111.05 16.07 08.000 23.03.99 21.03 15.700 5.01.09 81.07.97 05.07.500 23.03.08 70.3 3.000 2000 2001 2002 Plan G Plan G2 Plan G3 Plan G4 Plan G5 23.03 11.09 10.400 23.500 5.12 44.000 1.700 05.13 7.04.11 63.000 27. The main characteristics of the stock grant plan in progress at 31 October 2007 are as follows: 2007 Plan L Date of Shareholders’ Meeting Date of Board Meeting Number of shares granted Shares granted to the Senior Management Committee (members as of 31 October 2007) Number of senior managers concerned Start date of vesting period Stock grants outstanding at 31 October 2007 08.07.100 10 08.08 79.07 125.11 92.03.02.000 10.07 Lock-up 89.03.79 2.400 10 14.00 258.400 04.900 4 06.14 31.02.02.000 1 50%: 24.07 116.07.97 26.07 46.07 06.04.400 23.3 5.97 17.03.000 1 50%: 17.3 until 14.04 50%: 17.950 until 13.5 7.99 11.042 25.10 136.02.03.530 23.09 Lock-up 84.04.97 24.03.400 7 07.08.03 188.02 127.97 24.04 272.01.04 23.04.03.The main characteristics of the plans in progress at 31 October 2007 are as follows: 1998 1999 Plan F2 Plan F3 Plan F4 Plan F5 Date of Shareholders’ Meeting Date of Board meeting Number of options granted Options granted to the Senior Management Committee (members as of 31 October 2007) Number of executives concerned Start date of exercise period 23.03.000 81.01.05 6.250 10 08.08.13 35 154.06 Lock-up 64.78 82.13 35 240.02.98 73.000 37.815 23.08 Lock-up 81.01.09 92.02.02.000 2006 Plan K 16.8 1.06 136.07.02.000 4 01.615 23.800 4 05.07.08.01 212.06 250.03.000 2004 Plan I 17.700 6.03.04 23.08.03.01.05 26.81 13.01 37.10 Lock-up until 07.08 14.02.15 43.03.03.13 5.05 300.01.05 24.4 No options were exercised in fiscal 2006.3 until 10.10 Lock-up until 28.97 29.300 10 11.000 2003 Plan H 29.12 44.02 28.04.03.8 2.04.00 21.03.02.

The main defined contribution plans consist of government-sponsored basic and supplementary pension plans in Europe and defined contribution pension plans in North America.055) 1.70 23.7 5 3.97 11.013) 1.64 43.07 35.2.437. DEFINED BENEFIT PLANS Under defined benefit plans. Pensions and other long-term benefits 14.292.48 49.420 125.36 Under defined contribution plans. FAIR VALUE OF OPTIONS GRANTED Note 14. only options granted after 7 November 2002 that had not yet vested at 1 November 2005 were recognized and measured at the IFRS transition date. The Group’s post-employment benefit plans are based on legal obligations in each host country and on the subsidiaries’ compensation policies. unchanged from fiscal 2006. compensated absences. Vesting conditions related to share performance were taken into account in determining fair value. Expected volatility is determined on the basis of the share’s historic volatility and the risk-free interest rate corresponds to the yield to maturity on government bonds (OATs) over a period equivalent to the life of the options. health insurance and unemployment insurance in France. DESCRIPTION OF THE MAIN PLANS Group employees receive certain short-term benefits. “13th month” bonuses.80 14.197.92 48.64 63. The Group’s defined benefit plans are unfunded and are covered by provisions recorded in the balance sheet. DEFINED CONTRIBUTION PLANS Fair values were calculated at the grant dates of the various plans using the Black & Scholes option pricing model.3.89 42. Contributions to all of these plans are recognized as an expense for the period in which they are due.C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S 13. such as vacation pay. The shares granted without consideration in Plan L were valued on the basis of the share price at the date of grant.404 13.67 48.00 42.420 695. the Group pays contributions to an external fund that is responsible for paying the benefits. The cost recognized in respect of share-based payment plans in fiscal 2007 amounted to €2 million.437.84 Fiscal 2007 Number Average exercise price (in €) 49.14 Options outstanding at 1 November Options granted during the period Options exercised during the period Options canceled during the period Options outstanding at 31 October Options exercisable at 31 October 1. 2007 ANNUAL REPORT 139 . Greece and Turkey) or when they leave the Group (Italy and Japan).19 57. The main data and assumptions used to determine the fair values of options granted under the 2006 and 2007 plans were as follows: Plan K Club Méditerranée SA share price at grant date (in €) Exercise price (in €) Expected volatility (in %) Estimated life of the options (in years) Risk-free interest rate (%) Fair value per option 45. Five plans were set up between 2003 and 2007 and were measured and recognized in “Employee benefits expense”. OUTSTANDING OPTIONS Fiscal 2006 Number Average exercise price (in €) 50.200) (271.207 626. Long-term benefit plans include both defined contribution and defined benefit plans.5 5 3.1.000 (105.03 Plan L 41.475 250.020 1. Corporate officers are covered by defined contribution supplementary pension plans. RECOGNIZED COST In accordance with the transitional provisions of IFRS 2. The main defined benefit plans concern indemnities payable to employees on retirement (France.000 (94.22 56.77 43.07 22. the Group has an obligation to pay benefits to employees upon retirement or after they have retired. The Group’s legal or constructive obligation under these plans is limited to the amount that it agrees to contribute to the fund.

3.2. DEFINED BENEFIT PLANS 14. MAIN ACTUARIAL ASSUMPTIONS salaries and discount rates).1. net Total recognized (expense)/income (2) Fiscal 2006 (1) 1 2 (2) (1) (1) (3) 2 (1) (1) 1 14. 2006 2007 21 1 1 (2) (2) Defined benefit obligation at 1 November Service cost Interest cost (discounting adjustment) Actuarial (gains) and losses for the period Curtailments/settlements Paid benefits Defined benefit obligation at 31 October 26 2 1 (7) (1) 21 19 140 .4. FUNDED STATUS OF DEFINED BENEFIT PLANS (in € millions) 14. DEFINED CONTRIBUTION PLANS Contributions under defined contribution plans amounted to €15 million in fiscal 2007.04% 3.2.14 “Pensions and other long-term benefits”.60% Japan 2.70% 3.3. ANALYSIS OF DEFINED BENEFIT PLAN COSTS (in € millions) 31 October 2006 Present value of the unfunded obligation Unrecognized actuarial gains and losses Net liability recognized in the balance sheet Actuarial (gains)/losses related to experience adjustments Actuarial (gains)/losses related to changes in assumptions 21 7 28 31 October 2007 19 8 27 (1) (1) Fiscal 2006 Service cost Actuarial gains and losses recognized in the period Curtailments/settlements Cost recognized in employee benefits expense Interest cost Cost recognized in finance cost.60% 14. Actuarial gains and losses corresponding to the effect of changes in actuarial assumptions on the amount of the obligation are recognized by the corridor method described in Note 2. These variables are reviewed each year.2.5% Europe 3. unchanged from fiscal 2006. The assumptions used by the Group for the main plans are as follows: The Group’s obligations under defined benefit plans are measured by the projected unit credit method.0% 1.2. This method involves the use of long-term actuarial assumptions concerning demographic variables (such as employee turnover and mortality) and financial variables (such as future increases in 2006 Japan Discount rate Long-term salary increases 2% 1. CHANGE IN DEFINED BENEFIT OBLIGATIONS (in € millions) 14.14.5% 2007 Europe 5.2.2.

corporate income tax rates were reduced in Greece and Mexico.o/w current 6 16 13 2 4 41 41 2 7 1 10 10 (1) (4) (3) (1) (1) (10) (10) (9) 2 1 (1) (7) (7) 6 1 14 1 2 24 24 In fiscal 2006. 2007 ANNUAL REPORT 141 . restructuring provisions included €10 million in provisions for site closure costs. The North American tax group. deferred tax assets were recognized in relation to the North American tax group and certain Asian companies. comprises ten companies. Club Méditerranée SA has set up a tax group comprising twenty French subsidiaries. owners. and disputes with government agencies. In fiscal 2007. employee claims.1. Based on forecasts of future profits. In fiscal 2007. The nature of the Group’s business and the fact that its operations are conducted in a large number of countries with differing and sometimes contradictory regulations is a source of operating difficulties and can lead to disputes with suppliers.13 “Provisions”. Provisions for litigation cover commercial claims. Note 16. Provisions are booked for the estimated cost of identified risks on the basis described in Note 2. Deferred taxes on temporary differences included a €7 million benefit reflecting the reversal of a deferred tax liability previously recognized in relation to this same Village. employees or local authorities. headed by Club Med Sales. INCOME TAX ANALYSIS Current and deferred taxes can be analyzed as follows: (in € millions) Fiscal 2006 Current taxes Deferred taxes on temporary differences Effect of changes in tax rates Reassessment of deferred tax assets Deferred taxes Total (6) (3) 3 5 5 (1) Fiscal 2007 (14) 8 3 6 17 3 Current taxes in fiscal 2007 included €8 million in tax payable on the disposal of the Da Balaïa Village. Provisions (en millions d’euros) 31 October 2006 Increases Utilizations Reversals (surplus provisions) (1) (2) (5) (1) (1) (10) (10) Reclassifications 31 October 2007 Provisions for liability claims and damages Restructuring provisions Provisions for litigation Tax provisions Other provisions Total . an €8 million provision set aside for site closure costs was reclassified as a provision for impairment of receivables (see Note 10). Income taxes 16.C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S Note 15.

30% 34. Tax (in € millions) Fiscal 2006 Income before tax Standard tax rate in France Tax at standard rate Effect of different foreign tax rates Effect of changes in tax rates Unrecognized deferred tax assets on tax losses for the year Deferred tax assets recognized on tax losses generated in prior years Tax loss carryforwards utilized during the year Permanent differences and other Total Effective tax rate 16. Their recoverability was assessed based on the entities’ earnings forecasts. unchanged from fiscal 2006. Deferred tax assets break down as follows by balance sheet item: (in € millions) Deferred tax assets corresponding to these loss carryforwards 31 October 2006 31 October 2007 3 50 53 (8) (77) (2) (87) (34) French tax group Other – Europe-Africa Total – Europe-Africa US tax group Other – Americas Total – Americas Asia Total deferred tax assets on tax loss carryforwards 28 28 15 2 17 5 45 68 113 5 21 26 1 73 68 141 20 23 43 6 break down as follows by geographical region: (in € millions) Property.43% 25. of which €117 million were unrecognized. TAX LOSS CARRYFORWARDS BY EXPIRY DATE Tax loss carryforwards at 31 October 2007 can be analyzed as 31 October 2006 31 October 2007 30 (64) (34) 2008 2009 to 2013 Beyond Evergreen tax losses Total tax loss carryforwards follows by expiry date: (in € millions) Deferred tax assets Deferred tax liabilities Net deferred tax liability 35 (86) (51) 31 October 2007 25 146 99 303 573 Deferred taxes recognized directly in equity are not material. deferred tax assets on tax loss carryforwards totaled €170 million.00% 16.2. plant and equipment Borrowings and other interest-bearing liabilities Total liabilities Net deferred tax liability 3 53 56 (8) (96) (3) (107) (51) 31 October 2007 Recognized Unrecognized Total Deferred tax assets recognized on tax loss carryforwards concern the tax losses of tax groups in France and the United States and certain companies in Asia.43% 4 9 3 (32) 6 13 0 (1) 3 33.3.43% for fiscal 2007. DEFERRED TAX ASSETS AND LIABILITIES (in € millions) Tax rate Fiscal 2006 Fiscal 2007 Fiscal 2007 (12) 3 (1) 5 3 (55) 5 37 5 0 (1) 34. plant and equipment Tax loss carryforwards Total assets Intangible assets Property.EFFECTIVE TAX RATE The following reconciliation is based on the current French income tax rate of 34. 50 140 190 At 31 October 2006. 142 .

BORROWINGS AND OTHER INTEREST-BEARING LIABILITIES BY CATEGORY (in € millions) 31 October 2006 OCEANE convertible bonds Long-term bank borrowings Drawdowns on credit lines Finance lease obligations Total long-term borrowings and other interest-bearing liabilities OCEANE convertible bonds Current portion of long-term bank borrowings Drawdowns on credit lines Short-term bank loans and overdrafts Fair value of derivative instruments Total short-term borrowings and other interest-bearing liabilities Finance lease obligations Liabilities related to assets held for sale Total 269 57 16 4 346 10 10 80 9 109 4 4 459 31 October 2007 279 115 10 4 408 10 8 14 4 36 444 17. 2008 Oct. (b) 1. 2018 Nominal interest rate 5.8%.38% Effective interest rate 8. 2010 Margins (a) and (b) depend on the Group’s net debt/Ebitda ratio.35%. The ranges are as follows: (a) 1.3.90% 6.39% Due Nov.44% 6.24% June 2010 April 2018 May 2017 Jan.40% 7.61% 5. CHARACTERISTICS OF DEBT 31 October 2007 OCEANEs due 2008 fixed rate OCEANEs due 2010 fixed rate Total bonds Drawdowns on €120 million syndicated credit line Mortgage loan secured by Club Med 2 assets Mortgage loan secured by the Cancún Yucatán Village’s assets La Pointe aux Cannoniers loan Other Total borrowings and other interest-bearing liabilities 144 145 289 10 28 49 18 50 444 Euribor + (a) Euribor + (b) 6. Borrowings and other interest-bearing liabilities 17.58% 6. 2007 ANNUAL REPORT 143 .75% to 1.1.C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S Note 17.15% 5.2% to 0.2. NET DEBT (in € millions) Balance sheet items Cash and cash equivalents Long-term borrowings and other interest-bearing liabilities Short-term borrowings and other interest-bearing liabilities Liabilities related to assets held for sale Total borrowings and other interest-bearing liabilities Net debt 31 October 2006 165 346 109 4 459 294 31 October 2007 108 408 36 0 444 336 17.25% 4.

the loan secured by a mortgage on the Club Med 2 cruise ship was renegotiated.783 03.25% 8.25%. at a price representing a yield of 5. €120-million medium-term line of credit due in 2010 was arranged with a pool of nine banks on 31 May 2007.092.375% 7.40% OCEANEs due 2010 149.3. Club Méditerranée actively implemented its refinancing strategy.11.04. this facility is secured by the assets of the Cancún Yucatán Village. on 30 April 2006.6 million including accrued interest.08 3. and extended the repayment period until April 2018. At 31 October 2007. A confirmed. A total of 211. Due in 2017. A previous €70 million line of credit obtained on 25 October 2004 was reimbursed. €10 million had been drawn down from the new line.17.11. which raised the loan to a total of €30 million.514 2. 144 .5 million in additional financing. This resulted in €13. for a total of €13.976 3.10 4. increasing the yield to maturity to 5.39% Any unconverted OCEANEs due 2008 will be redeemed at maturity at a premium to their face value.02 01.1.04 01. OCEANE CONVERTIBLE BONDS The Group’s borrowings include two OCEANE convertible bond issues.999.404.2.25%. The bonds’ main characteristics are as follows: OCEANEs due 2008 Amount of the issue (in €) Number of bonds issued Start date for interest accruals Maturity Nominal interest rate Conversion ratio at maturity Yield to maturity Effective interest rate 139. Bondholders had the option of redeeming the bonds early. a €50 million loan facility was arranged.3.733 30.3. which is designed to strengthen the Group’s balance sheet and extend the maturity of debt.002 bonds were redeemed early on 30 April 2006. SYNDICATED LINE OF CREDIT 17.11. OTHER LONG-TERM FACILITIES During fiscal 2007. In April 2007. (in € millions) OCEANEs due 2008 Nominal amount of the issue Issuance costs Equity component Initial amount recognized as a liability Recognized interest Interest paid Liability at 1 November 2005 under IFRS Interest recognized in fiscal 2006 Interest paid in fiscal 2006 Bonds redeemed early in April 2006 Liability at 31 October 2006 Interest recognized in fiscal 2007 Interest paid in fiscal 2007 Liability at 31 October 2007 Of which accrued interest 140 (3) (21) 116 38 (10) 144 10 (4) (13) 137 11 (4) 144 4 OCEANEs due 2010 150 (3) (18) 129 9 138 10 (7) 141 10 (7) 144 7 17.00% 1 for 1 5.474.3.375% 1 for 1 4. At the end of May.

mainly currency swaps and options. Currency risks relating to the Group’s other functional currencies (mainly the Moroccan dirham. Specific rules have been drawn up and approved prohibiting the use of derivative instruments for trading purposes. Tunisian dinar. including market risks (particularly currency and interest rate risks). Fair value risk therefore corresponds to opportunity cost in the event of a fall in interest rates. and by a lien on the shares of the company that owns La Pointe aux Canonniers Village.Currency risks on net investments in foreign operations whose impacts are recorded as a change in consolidated equity.Currency risks on financing denominated in a currency other than the borrower’s functional currency. There are two types of interest rate risk: . Transaction currency risk The Group’s policy consists of protecting itself against the effects of exchange rate changes on reported net income compared with forecasts. In practice. assesses. OTHER INFORMATION . which is both a billing and an operating currency. Turkish lira. manages and hedges financial risks on a centralized basis in accordance with the policies approved by the Audit Committee. Financial instruments 18. The Group may use derivative financial instruments to hedge currency risks arising in the course of its business and interest rate risks on floating rate debt. MARKET RISKS CURRENCY RISK The Group does not hold any listed equities.1. Club Méditerranée had three loans secured by mortgages on the assets of the Cancún Yucatán Village and the Club Med 2 cruise ship. yen. EQUITY RISK Debt secured by collateral amounted to €95 million at 31 October 2007 (€36 million at 31 October 2006).3.4. which are recorded as a deduction from equity. which was secured by liens and mortgages on the Village’s assets. As this type of risk is not hedged. This risk is not hedged using derivative instruments.Fair value risk on fixed rate net debt.C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S Work on La Pointe aux Canonniers Village was financed by a dedicated €26 million loan taken out in June 2007. forward contracts and nondelivery forward contracts. . Its exposure concerns three types of currency risk: . 18. At 31 October 2007. Also during the year. these instruments are used primarily to hedge currency risks on future transactions. Balance sheet risk The Group’s exposure to currency risks on external debt is limited and intra-group financing is generally denominated in the subsidiary’s functional currency.Transaction currency risk arising from commercial activities (in outbound zones) and operating activities. the Group paid back the loan taken out to finance the Da Balaïa Village. 2007 ANNUAL REPORT 145 . 17. credit risks and liquidity risks. Indonesian rupiah and Thai baht) are not systematically hedged. The impact of these fluctuations on net investments in independent subsidiaries is recognized as a separate component of equity. following the sale and leaseback of the Village. As a result. the Group hedges exposures for the coming fiscal year in the principal billing currencies (mainly pounds sterling. FINANCIAL RISK MANAGEMENT POLICY In the normal course of business. The notional amount of hedges is limited to the future cash flows forecast in the budget. the Group is exposed to various financial risks. This loan is secured by a lien on the shares of the company that owns the Village. apart from treasury shares. The Group’s net investment in foreign operations is exposed to the risk of fluctuations in foreign currencies against the euro. No derivative instruments are acquired for trading purposes. At 31 October 2006. it is not exposed to any risk of fluctuations in stock prices.1. Based on forecasts. Unrealized currency gains and losses on hedges of net investments in foreign operations are recognized directly in equity. INTEREST RATE RISK Club Méditerranée’s international operations expose the Group to the risk of fluctuations in foreign exchange rates affecting its income and equity. Canadian and Australian dollars and Korean won) as well as in US dollars. the carrying amount of financial assets and liabilities is not adjusted for changes in interest rates. financing for the Da Balaïa Village and the Club Med 2 cruise ship was secured by liens and mortgages on the underlying assets. Note 18.1. The Treasury and Financing unit identifies. Currency risks are hedged using derivative instruments.

In light of their short-term nature.2. CONFIRMED LINES OF CREDIT Due beyond five years Total due beyond one year Total 4 4 4 8 31 October 2007 0 4 4 4 Financial assets Bonds Other fixed rate long-term borrowings and interest-bearing liabilities Other floating rate long-term borrowings and interest-bearing liabilities Short-term bank loans and overdrafts Foreign exchange derivatives Club Méditerranée has a €120 million line of credit obtained on 31 May 2007 and expiring in June 2010. 18. 18. At 31 October 2007. Cash surpluses are invested in certificates of deposit or money-market funds from leading banks with a minimum A2/A/A rating issued by Moody’s or Fitch. recorded under “Finance costs.3.3. 146 .1. Derivative instruments and borrowings are set up with a wide range of leading counterparties. ANALYSIS OF FINANCIAL LIABILITIES BY MATURITY (in € millions) Most customers pay for their vacations in advance and the Group’s exposure to credit risk on commercial transactions is therefore limited.3. Some of the Group’s debt facilities include early redemption clauses that are triggered if debt covenants are breached or assets are sold. corresponding to the impact on finance costs of an increase or decrease in interest rates.2. net”. FAIR VALUE 152 17 145 6 88 408 The discounted present value of finance lease obligations.1. 18.. No cash flow hedges of interest rate risks have been put in place as the Group’s net floating rate debt is not material.Cash flow risk on floating rate net debt.3. The Group does not hold any material interest-bearing assets. The ineffective portion. LIQUIDITY RISK 31 October 2006 Due within one year (including short-term bank loans and overdrafts) Due beyond one year 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 Beyond Total due beyond one year 31 October 2007 113 20 158 5 145 18 346 36 Liquidity risk is managed by using diversified sources of financing.3 “Debt covenants”).1. CREDIT AND COUNTERPARTY RISK Foreign exchange derivatives are forward contracts designated as cash flow hedges. the line was drawn down in the amount of €10 million. was as follows at 31 October 2006 and 2007: (in € millions) The following table shows the carrying amounts and fair values of financial instruments at 31 October 2007: (in € millions) 31 October 2006 Due within one year Carrying amount Foreign exchange derivatives Cash and cash equivalents 1 107 108 289 78 59 14 4 444 Fair value 1 107 108 312 82 59 14 4 471 18.2. there is no difference between the carrying amount of trade receivables and trade payables and their fair value. was not material. Financial liabilities The above table does not include trade receivables or trade payables. The effective portion of these hedges was deducted from equity in an amount of €4 million in fiscal 2007 (see Note 12. 18. MATURITIES OF FINANCIAL LIABILITIES AND DEBT COVENANTS 18. including those related to assets held for sale. The line is subject to various covenants (see Note 18.1).3.

1.5 3.75 3. Under the redefined covenants.Gearing: less than 1 .42 (in € millions) 31 October 2006 Euros US dollars Swiss francs Brazilian reals Derivative instruments Total 389 41 12 17 459 31 October 2007 411 1 11 17 4 444 The Group has a combination of fixed and floating rate debt.1).Leverage (net debt/EBITDA as defined above)): less than 4 . the Group’s exposure to interest rate risk by maturity was as follows: (in € millions) The Group’s debt covenants have been redefined.3.25 1.0 Total Less than one year One to five years More than five years Cash and cash equivalents Floating rate debt* Net floating rate debt Fixed rate debt Derivative instruments Net debt (108) 72 (36) 368 4 336 (108) 20 (88) 12 4 (72) 320 88 30 30 290 22 22 66 * Including short-term bank loans and overdrafts.Leverage (net debt/EBITDA (as defined above)): less than the following: 30 April 2007 2008 2009 and beyond 31 October 4.Fixed charge cover (EBITDAR/(rents + net interest)): greater than the following: 30 April 2007 2008 2009 and beyond 31 October 1.35 1. 3.0 3. BALANCE SHEET RISK The Group’s exposure to currency risks on external debt is limited and intra-group financing is generally denominated in the subsidiary’s functional currency.50 1. MANAGEMENT OF INTEREST RATE RISK €118 million 0.25 1. ANALYSIS OF FINANCIAL LIABILITIES BY CURRENCY 1. the outstanding debt may become immediately repayable. amortization and provisions. DEBT COVENANTS At 31 October 2007. to take into account the transition to IFRS.Gearing (net debt/equity): less than 1 . CURRENCY RISK MANAGEMENT . If any of the ratios defined in the covenants are breached. no interest rate hedges were set up as average floating rate net debt only represented 16% of total debt.Fixed charge cover: greater than 1.5.45 18.69 3. 2007 ANNUAL REPORT 147 .4.Off-balance sheet commitments: less than €200 million .45 The covenants were complied with at 31 October 2007: . EBITDA is defined as Operating income . The Group’s net investment in foreign operations is exposed to the risk of fluctuations in foreign currencies against the euro. The impact of these fluctuations on net investments in independent subsidiaries is recognized as a separate component of equity (see Note 12.3.25 18.0 A 1-point increase in short-term interest rates applied to the Group’s average gross floating rate debt would lead to a €0.Off-balance sheet commitments: less than €200 million .Leisure before depreciation. In fiscal 2007.8 million increase in interest expense.C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S 18. 18. The impacts of changes in exchange rates on hedges of net investments in foreign operations are recognized directly in equity (see Note 12.1). effective from 30 April 2006.5. Ratios applicable to the €120 million syndicated line of credit and the secured loan used to finance the Club Med 2 cruise ship are as follows: .

Hedges are set up gradually over the year. TRY: new Turkish lira. All hedging instruments outstanding at the year-end expire within eighteen months. MXN: Mexican peso. EXPOSURE TO CURRENCY RISK ON OPERATING ACTIVITIES (TRANSACTION CURRENCY RISK) Net exposure to currency risks on operating transactions (transaction currency risk) is presented in the following table. EXPOSURE TO TRANSACTION CURRENCY RISK AT 31 OCTOBER 2007 (in millions of foreign currency units) USD Net exposure to currency risk on operating activities (1) Cash flow hedges (derivative notional amount) Net exposure of 2008 cash flows after hedging at 31 October 2007 Net exposure after conversion into euros (in € millions) (80) GBP 15 AUD 10 JPY 1. KRW: Korean won. AUD: Australian dollar. GBP: British pound.Leisure Total employee benefits expense Operating income Management of assets Total employee benefits expense Operating income (251) (49) (15) (2) (12) (329) Fiscal 2007 (247) (61) (15) (2) (7) (332) (3) (332) (8) (340) At 31 October 2007.200 4 (65) (350) (50) (18) 8. CAD: Canadian dollar. Other liabilities (in € millions) Note 20.600 (2) 22 5 7 3 (4) (31) (28) (11) 7 (1) Amounts in parentheses correspond to net purchases of foreign currencies. USD: US dollar. TND: Tunisian dinar. Net exposures correspond to the exposure of estimated operating cash flows for the following year. amounts not in parentheses correspond to net sales of foreign currencies. 148 .5. Employee benefits expense and number of employees (in € millions) 31 October 2006 Government grants Accrued rentals Total other non-current liabilities Accrued expenses Accrued personnel costs Accrued taxes Payables due to suppliers of non-current assets Deferred income Other Total other current liabilities 28 8 36 13 47 20 20 67 10 177 31 October 2007 37 6 43 9 50 35 13 71 8 186 Fiscal 2006 Wages and salaries Payroll taxes Pension contributions Share-based payment expense Other Total employee benefits expense Operating income .18. accrued taxes included €8 million in current taxes payable on the sale of the Da Balaïa Village. Derivative instruments designated as cash flow hedges are as follows: (in € millions) Fair value Assets Forward currency contracts Options 1 NM Liabilities 4 NM Notional amount Expiry date Less than From 1 1 year to 5 years 98 2 98 6 4 Note 19.700 CAD 29 MXN (405) MAD (350) TND (50) TRY (18) KRW 8.2.600 76 (3) (500) (25) 340 (3) 15 8 1. JPY: Japanese yen. MAD: Moroccan dirham.

Flaine. employees of Club Méditerranée SA had accumulated 93.580 29 40 25 7. net (in € millions) FISCAL 2007 The disposal of the Da Balaïa Village at the end of April 2007 and the sale of land in Mexico and Greece generated a gain of €10 million. which is expected to take place by 31 October 2008. Valbella and Cadaques Villages.886 339 485 135 14. Operating income management of assets (in € millions) Note 22. The sale agreement included an earn-out clause that could increase the price by 50% of any net-of-tax difference between the initial sale price and the share price set at the time of SIM’s IPO.553 O/w temporary contracts* Fiscal 2007 7.674 * Seasonal employees and employees under fixed-term contracts At 31 October 2007. net Other Finance cost. Finance cost. Fiscal 2006 Interest income 2 Interest on OCEANE convertible bonds (21) Other interest expense (15) Interest expense.C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S NUMBER OF EMPLOYEES Full-time equivalents Fiscal 2006 Villages Tour operating Club Med Gym Club Med World Total number of employees 13. FISCAL 2006 Disposals mainly included the outright sale of the Crested Butte. Gains on disposals of shares stemmed primarily from the sale of part of the Group’s stake in Société Immobilière de la Mer (see Note 8. Note 21.850 hours in statutory employee training rights (DIF) in France. 2007 ANNUAL REPORT 149 . Details of the sale proceeds are provided in Note 26. as well as the sale-andoperating-leaseback of the Chamonix. Share of income of associates (in € millions) Fiscal 2006 Share of income of associates 3 Fiscal 2007 1 Details of the contribution of associates to consolidated income are provided in Note 8 “Non-current financial assets”. net Exchange gains and losses.845 Full-time equivalents Fiscal 2007 14.465 O/w temporary contracts* Fiscal 2006 7. net (34) 5 (3) (32) Fiscal 2007 3 (21) (13) (31) 6 (1) (26) Note 24.3. Other operating income and expense (in € millions) Fiscal 2006 Gains on disposals of Villages Gains and losses on Village and site closures Village opening costs Impairment losses Gains on disposals of shares Other costs Operating income Management of assets 49 4 (6) (4) 1 (4) 40 Fiscal 2007 10 (4) (7) 6 5 (8) 2 Restructuring costs Tsunami and hurricane costs Costs of claims and litigation Credit card costs Other Fiscal 2006 (14) (1) (5) (9) Fiscal 2007 (7) (1) (3) (9) (1) (21) Other operating income and expense (29) Note 23. Les Deux Alpes and Avoriaz Villages.594 335 407 129 15.1).433 49 47 24 7.

2.55) Proceeds from disposals of non-current financial assets totaled €17 million and primarily corresponded to (i) €10 million in repayments of loans and deposits. Avoriaz (€13 million). AMORTIZATION AND PROVISIONS (in € millions) Fiscal 2006 Number of shares at 1 November Number of treasury shares at 1 November Weighted average number of treasury shares purchased/sold during the period Weighted average number of shares issued during the period Weighted average number of shares at 31 October 19.115 In fiscal 2007. ACQUISITIONS OF NON-CURRENT ASSETS (in € millions) 25. PROCEEDS FROM DISPOSALS OF NON-CURRENT ASSETS FISCAL 2007 Proceeds from disposals of property.Note 25. plant and equipment.078 30 4 19. For the same reason. Flaine (€7 million). in the amount of €110 million. and (ii) the sale of shares accounted for by the equity method (including €5 million relating to the sale of Société Immobilière de la Mer). BASIC EARNINGS PER SHARE (in thousands of shares) Note 26. No events occurred after the balance sheet date that would have a material impact on the calculation of diluted earnings per share. amortization and provisions 7 60 3 70 Fiscal 2007 7 50 (1) 56 (23) 19. Notes to the consolidated cash flow statement 26.078 111 19.020 shares in fiscal 2006).241. Valbella (€5 million) and Cadaques (€4 million). Fiscal 2006 Basic earnings per share Diluted earnings per share 0.1.55) (0.358 (257) Fiscal 2007 19. 1.115 26. Crested Butte (€25 million).115 19.000 potential ordinary shares corresponding to the conversion of OCEANE bonds were also excluded.1. plant and equipment Government grants and acquired cash Acquisitions of non-current financial assets Total acquisitions of non-current assets (8) (138) 7 (12) (151) Fiscal 2007 (9) (102) 11 (4) (104) Fiscal 2006 Weighted average number of shares Dilutive potential ordinary shares (stock options) Diluted weighted average number of shares 19. FISCAL 2006 Proceeds from disposals of property. in both fiscal 2007 and 2006 the 5.287.2. mainly reflecting the sales of the Da Balaïa Village (€39 million) and land in Greece and Mexico (€10 million).189 Fiscal 2007 19. Les Deux Alpes (€23 million). DILUTED EARNINGS PER SHARE (in thousands of shares) Fiscal 2006 Acquisitions of intangible assets Acquisitions of property. mainly corresponded to sales of the following Village properties: Chamonix (€27 million). (in €) 26.358 (277) Fiscal 2006 Amortization and impairment: intangible assets Depreciation and impairment: property.3. Club del Mar (€5 million) and Taipe Trancoso (€2 million). DEPRECIATION.697 potential ordinary shares (stock options and stock grants) were excluded from the calculation because they were anti-dilutive (687. plant and equipment amounted to €50 million.24 0. Earnings per share 25. 150 . plant and equipment Other provisions Depreciation.24 Fiscal 2007 (0. Proceeds from disposals of non-current financial assets corresponded to repayments of loans and deposits for €4 million and the €29 million in proceeds from the sale of shares in Vacances Cap Skirring (€21 million).

training. COMMITMENTS AND GUARANTEES Disclosures of senior management compensation relate to the members of the Senior Management Committee and the Board of Directors. communication. SENIOR MANAGEMENT COMPENSATION Termination benefits paid to members of senior management totaled €0. with an exercise price of €42.29% and 8% of their gross compensation. A total of 10. performs a general management role for its subsidiaries (which correspond to related parties). if the contract is terminated within six months of the parent company being taken over by a third party. This payment corresponds to two years of gross compensation. as determined in accordance with IFRS 2. 27. A total of 84. with justified exceptions. IT and sales.9 million in fiscal 2007.2 million in fiscal 2006 and €4. The cost recognized in fiscal 2007 for the stock options and stock grants awarded to members of senior management. Club Méditerranée SA. legal affairs. Transactions between the parent company and its subsidiaries are eliminated in the consolidated financial statements. including variable bonuses. TERMINATION BENEFITS The Group has signed lease contracts for certain Villages with companies belonging to groups that could be considered related parties as defined by IAS 24. The total fair value of these options.4 million at 31 October 2006. human resources.9 million at 31 October 2007. marketing. a stock option plan was set up for members of senior management and certain employees of Club Méditerranée. The future minimum lease commitments under the related contracts amounted to €521 million at 31 October 2007. This percentage corresponds to 30% of the capital gain generated when the options are exercised or the shares granted without consideration are sold. Related party transactions 27. TRANSACTIONS WITH ASSOCIATES (in € millions) 31 October 2006 Other receivables Other payables 2 4 31 October 2007 3 1 Rental payments to associates for the operation of certain Villages totaled €23 million in fiscal 2007 and €22 million in fiscal 2006. SHARE-BASED PAYMENTS During fiscal 2007. Members of senior management exercised 76. POST-EMPLOYMENT BENEFITS Executive directors are contractually entitled to a lump-sum payment if their employment contract is terminated. The Group’s main subsidiaries are listed in Note 29.250 shares were granted to members of senior management under this plan. Rent relating to these contracts recognized as an expense in the consolidated financial statements totaled €21 million in fiscal 2007 and €20 million in fiscal 2006. A stock grant plan conditional on the achievement of performance targets was also set up during the year.4 million in both fiscal 2007 and 2006. No loans or guarantees have been granted to or on behalf of executive directors. These include Rolaco. including variable bonuses. Total contributions to this plan paid on behalf of members of the Senior Management Committee amounted to €0.3 million in fiscal 2007.1.8 million. unchanged from fiscal 2006. Corporate officers are required to hold a percentage of the options and shares granted without consideration in 2007 in registered form until they leave their post. was €0. and cash surpluses are centralized in cooperation with the regional holding companies and subsidiaries. A total of 103.4. Financing is raised by the parent company. 27. TRANSACTIONS WITH CLUB MÉDITERRANÉE’S MAIN SHAREHOLDERS AND COMPANIES THAT SHARE SENIOR MANAGERS tributions representing between 6.4 million in fiscal 2007. with con- 151 .000 options were granted to members of senior management under this plan (based on the composition of the Senior Management Committee at 31 October 2006). except in the event of gross or willful misconduct.67. During fiscal 2006. Caisse de Dépôt et de Gestion (Société Immobilière de la Mer) and Carthago. The related future minimum lease commitments amounted to €451 million at 31 October 2007. or three years of gross compensation.000 stock options during fiscal 2007. and handles traditional support functions such as administration and finance. Pension benefit obligations relating to members of senior management amounted to €0. TRANSACTIONS BETWEEN CLUB MÉDITERRANÉE SA AND ITS SUBSIDIARIES The Group’s parent company. determined in accordance with IFRS 2. a stock option plan was set up for members of senior management and certain employees of Club Méditerranée.C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S Note 27. 2007 ANNUAL REPORT Members of senior management are covered by a defined contribution pension plan managed by an external fund. SHORT-TERM BENEFITS Gross compensation and related benefits paid (including attendance fees paid to members of the Board of Directors) came to €4. determined in accordance with IFRS 2. 27.07. unchanged from fiscal 2006. was €1.3. with an exercise price of €43. The total fair value of these options and stock grants. was €0.100 options were granted to members of senior management under this plan.2.

2. guarantees for credit card processors (€16 million) and performance bonds (€14 million). Guarantees received from contractors involved in Village renovation projects under private contracts amounted to €1. The amounts have been translated at the exchange rate prevailing at the balance sheet date.2 and 17. (in € millions) Total minimum future lease payments Europe-Africa Americas Asia Sub-total Villages Tour operating Club Med World Club Med Gym Total minimum future lease payments 1. The following table shows the minimum future lease payments due under these non-cancelable operating leases. Commitments and contingencies 28. Some office equipment and Village telephone and video equipment is also leased.4 million. certain Villages as well as other assets are also leased under non-cancelable operating leases. These rates are not discounted and are indexed to the last known rate. Under its asset financing policy.649 7 3 29 1.688 2008 2009 2010 2011 2012 2013 to 2017 514 16 48 578 2018 to 2027 358 17 25 400 2028 and beyond 61 1 62 109 4 11 124 2 1 5 132 109 4 10 123 2 1 5 131 107 4 10 121 2 1 4 128 109 3 9 121 1 4 126 107 3 10 120 4 124 6 584 1 401 62 Rental expense recognized in the statement of income for operating leases amounted to €148 million in fiscal 2007 (fiscal 2006: €142 million). Loans have been secured by mortgages and liens on the Club Med 2 cruise ship.3). 152 .Note 28.4 million. sellers’ warranties relating to asset disposals (€36 million). COMMITMENTS UNDER NON-CANCELABLE OPERATING LEASES The Group leases offices and sales agencies under non-cancelable leases. and the assets of the Cancún Yucatán and La Pointe aux Canonniers Villages (see Notes 7. OFF BALANCE SHEET COMMITMENTS AT 31 OCTOBER (in € millions) 31 October 2006 Total Commitments given Guarantees given (1) Europe-Africa Americas Asia Total commitments given Commitments received (2) Reciprocal commitments Unused lines of credit Rent guarantees Total reciprocal commitments Less than one year 31 October 2007 One to five years More than 5 years Total 65 20 6 91 13 15 7 22 40 6 2 48 3 7 20 7 34 2 118 6 124 27 8 35 5 74 34 9 117 10 118 6 124 (1) Guarantees given in connection with travel and transport agent licenses (€25 million). (2) Commitments received by the Group relating to travel agencies amounted to €7. rent bonds (€17 million). 28.1.474 52 123 1.

00% 100.00% 50.00% 100.00% 100.00% 100.00% 100.00% 100.S.00% 100.00% 100.50% 25. Sté des Villages de Vacances Club Med Villas et Chalets Holding Club Med Villas et Chalets Club Med Villas et Chalets Services South Africa Vacances (Pty) ltd Germany Club Méditerranée Deutschland Belgium Club Méditerranée SA Belge Côte d’Ivoire Club Méditerranée Côte d’Ivoire Croatia Club Méditerranée Odmaralista Egypt Belladona Hotels & Tourisme Spain Club Méditerranée SA Espagne Hoteles y Campamentos .00% 100.C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S Note 29.00% 100.SGHT Sté Immobilière des Résidences Touristiques . SECAG) Club Med Centre d’Appels Européen Club Med Croisières & Tourisme Club Med Événements Club Med Marine Hoteltour Loin SAS SAS du Domaine de Dieulefit SCI Edomic Société de Gestion Hôtelière et de Tourisme SA .00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.SACM United Kingdom Club Méditerranée UK ltd Club Méditerranée Services Europe ltd Greece Club Méditerranée Hellas Funhotel ltd (Ermioni) Mauritius Holiday Villages Management Services ltd Compagnie des Villages de Vacances de l’Isle de France .00% 100.00% 100.00% 100.T.00% 100.R.00% 100.COVIFRA Club Méditerranée Albion Resorts ltd Albion Development ltd 100.00% 84.00% 100.50% 25.00% 100.00% 100.00% 100.00% 100.00% 100.I. Scope of consolidation at 31 October 2007 GROUP Member of the tax group Parent company % voting rights EUROPE REGION France Club Aquarius (ex.00% 84.00% 100.00% 100.00% 50.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.43% 22.00% 100.00% 100.00% 100.00% 100.43% 22.00% 100.00% 100.00% 100.00% 100.00% 100.00% Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Equity Equity • • • • • • • • • • • % interest Method • Club Méditerranée SA 2007 ANNUAL REPORT 153 .00% 100.00% 100.HOCASA Servicios Auxiliares del Club Mediterraneo .

00% 100.00% 100.00% 100.43% 100.00% 100.00% 100.00% 37.00% 40.GROUP Member of the tax group % voting rights % interest Method Israel Club Méditerranée Israel ltd Italy Centrovacanze Kamarina Sole e sabbia di Sicilia SpA Sta Alberghiera Porto d’Ora .00% 100.00% 53.00% Full Full Full Full Full Full Full Full Full • • 100.00% 50.00% 100.S.00% 10.00% 100.00% 49.00% 100.00% 100. SpA Sviluppo Turistico per Metaponto Netherlands Club Méditerranée Holland BV CM Middle East BV Portugal Sociedade Hoteleira Da Balaïa SA Club Med Viagens Lda Senegal Société Immobilière et de Gestion Hôtelière de Cap Skirring Switzerland Club Méditerranée Suisse Holiday Hotels AG Nouvelle Société Victoria Tunisia Club Méditerranée Voyages Club Med Basic Tunisie SPFT – Carthago Turkey Akdeniz Turistik Tesisler A.00% 100.00% 100.00% Full Full Equity Equity Full Full Full Full Full Full Full Full Equity Full Equity Full Full 100.00% 50.00% 100.00% 100.91% 100.00% 60.00% 100.00% 100.00% 100.00% 40.00% 100.00% 37.52% 38.00% 100.10% 50.00% 100.00% 50.00% 100.00% 60.00% 100.00% 100.P.43% 100.00% 100.00% 100.00% 100.00% 50.00% 100.00% Full Full Full Full • • 154 .52% 38.10% 50.00% 100.00% 100.O.00% 100.91% 100.SVHC Société Hôtelière du Chablais Société Martiniquaise des Villages de Vacances 100.A.00% 53. Ukraine Club Méditerranée Ukraine SOUTH AMERICA REGION France Club Med Amérique du Sud Vacation Resort Club Med Ferias Argentina Club Med Argentina SRL Brazil Club Med Brasil SA Club Méditerranée do Brasil Turismo Ltda Itaparica SA Empreendimentos Turisticos Taipe Trancoso Empreendimentos SA Club Med Brasil Boutiques Ltda NORTH AMERICA REGION France Club Med Amérique du Nord French West Indies Société Villages Hôtels des Caraïbes .00% 100.S.00% 100.00% 100.00% 49.00% 100.

00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100. Club Med Sales Inc.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% Full Full Full Full Full Full Full Full Full Full Full 2007 ANNUAL REPORT 155 .00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S GROUP Member of the tax group % voting rights % interest Method Bahamas Club Méditerranée (Bahamas) Ltd Columbus Isle Casino Holiday Village (Columbus Island) Shipping Cruise Services Ltd Canada Club Med Sales Canada Inc.00% 100.00% 100.00% 100.00% 100. Mexico Cancún Property SRL Ixtapa Property SRL Operadora de Aldeas Vacacionales SA de CV Profotur SA de CV Vacation Properties de Mexico SA de CV Villa Playa Blanca SA Dominican Republic Holiday Village of Punta Cana (formerly Newco) Turks & Caïcos Holiday Villages Providenciales Turks & Caicos Ltd ASIA REGION Luxembourg Club Med Asie Australia Club Med Management (Australia) Pty Ltd Club Med Australia Pty Ltd Holiday Village (Australia) Pty Ltd South Korea Club Med Vacances (Korea) Ltd Hong Kong Club Méditerranée Hong Kong Ltd Club Méditerranée Management Asia Ltd Maldivian Holiday Villages Ltd Indonesia PT Bali Holiday Village Japan Club Méditerranée KK SCM leisure development Co Ltd 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full • • • • • • • • • • 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100. Holiday Village of Sandpiper Sandpiper Resort Properties Inc/SRP Sun Cancun I Sun Cancun II Sun Ixtapa I Sun Ixtapa II Sunport Property Corporation Vacation Wholesaler Inc.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100. United States Club Med Management Services Inc.00% 100.00% 100.

00% 100.00% 100.00% 100.94% Full Full Full Full Full Full Full Full Full 99.00% 100.85% 100.00% 49.85% 99.GROUP Member of the tax group % voting rights % interest Method Malaysia Holiday Villages of Malaysia SDN BHD Recreational Villages SDN BHD Vacances (Malaysia) SDN BHD Singapore Club Med Services Singapore Pte Ltd Vacances (Singapore) Pte Ltd Taiwan Club Med Vacances (Taiwan) Ltd Thailand Holiday Villages Thaïland Ltd Vacances Siam Club Med Ltd Polynesia and New Caledonia Société Polynésienne des Villages de Vacances TOUR OPERATING France Jet tours Jet Eldo Jet Loisirs Jet Marques Jet Stim Le Quotidien Voyages Tunisia Jet Eldo Tunisie Morocco FST Jet Eldo Maroc CLUB MED WORLD France Club Med World Holding Club Med World France Canada CM World Montréal Inc.00% 100.00% 100.00% 99.00% 100.00% 100.00% 99. CM World Montréal Holding Inc.00% 100.00% 100.85% 99.00% Full Full Full 156 .00% Full Full Full Full • • 100.00% 100.98% 49.00% 99.00% 100.00% 99.85% Full Full Full Full Equity Full Full Full Full • • • • 100.00% 100.94% 100.00% 100.00% 100.00% 100.21% 100.00% 100. Equity: accounted for by the equity method.00% 100.00% 100.00% 100.00% 100.00% 21.00% 100. CLUB MED GYM France Club Med Gym SA Edifit Club Med Gym Corporate Full: fully consolidated.00% 100.00% 100.00% 100.85% 99.00% 49.00% 100.21% 100.00% 100. 100.85% 100.00% 49.00% 99.00% 100.

as well as of the disclosures made in the notes. and the documents provided. the consolidated financial statements have been properly prepared and give a true and fair view of the assets and liabilities. and therefore contributed to the formation of the unqualified opinion expressed in the first part of this report. we have examined the accompanying consolidated financial statements of Club Méditerranée for the year ended 31 October 2007. The consolidated financial statements have been approved by the Board of Directors. Neuilly-sur-Seine and Paris-La Défense. SPECIFIC PROCEDURES We conducted our audit in accordance with the professional standards applicable in France. III. We also reviewed the consistency of the underlying data and assumptions. financial position and results of operations of the consolidated companies. An audit includes examining. I. taken as a whole. As part of our assessment of the reasonableness of the underlying estimates. 12 February 2008 The Statutory Auditors Deloitte & Associés Dominique Jumaucourt Ernst & Young Audit Pascal Macioce 2007 ANNUAL REPORT 157 . Our role is to express an opinion on these financial statements based on our audit.7 (Impairment of assets) and 2. We believe that our audit provides a reasonable basis for our opinion. In our opinion. OPINION ON THE CONSOLIDATED FINANCIAL STATEMENTS French Commercial Code (Code de Commerce) relating to the justification of our assessments. we assessed the appropriateness of these accounting policies and methods.823-9 of the In accordance with the terms of our appointment by the Annual Shareholders’ Meeting. We have no matters to report concerning the fairness of this information and its consistency with the consolidated financial statements.15 (Deferred taxes) describe the accounting policies and methods used to determine asset impairments and to assess the recoverability of deferred tax assets. in accordance with the International Financial Reporting Standards (IFRSs). An audit also includes assessing the accounting principles used and significant estimates made by management. We also examined the information about the Group given in the Management Report. evidence supporting the amounts and disclosures in the financial statements. The assessments were made in the context of our audit of the consolidated financial statements. JUSTIFICATION OF OUR ASSESSMENTS In accordance with the requirements of article L. on a test basis. International Accounting Standards (IASs) and related interpretations adopted by the European Union. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.Notes 2. in accordance with the professional standards applicable in France.C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED 31 OCTOBER 2007 II. as well as evaluating the overall financial statement presentation. we draw to your attention the following matters: .

Carthago Akdeniz Turistik Tesisler CM Ukraine CM UK CM Services Club Med Voyages CM Bazic Tunisie SACM Hocasa Covifra CM Albion Resorts Albion Development Ltd CM Middle East Funhotel Germany Greece Israel Italy Mauritius Netherlands Portugal Senegal South Africa Spain Switzerland Tunisia Turkey Ukraine United Kingdom 158 .GROUP STRUCTURE AT 31 OCTOBER 2007 Marketing companies Service companies Real estate companies Service and real estate companies Other EUROPE-AFRICA France CM Centre d’Appels Européen CM Croisières et Tourisme CM Evénements CM Marine SGHT SVV SAS Domaine de Dieulefit SIRT Sté Civile Edomic CMSA Club Aquarius Hoteltour Loin SAS CM Villas et Chalets CM villas et Chalets Services CM Villas et Chalets Holding Belgium Côte d’Ivoire Croatia Egypt CM Belgique CM Côte d’Ivoire CM Odmaralista Belladona Hotels & tourisme CM Deutschland CM Hellas CM Israel Centrovacanze Kamarina Ste Alberghiera Porto d’Ora Sviluppo Turistico per Metaponto HV Management Services CM Holland CM Viagens Sociedade Hoteleira de Balaia Société Immobilière et de Gestion Hôtelière de Cap skirring Vacances Pty CM Espagne CM Suisse Holiday Hotels Nouvelle Société Victoria SPT .

C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S Marketing companies Service companies Real estate companies Service and real estate companies Other SOUTH AMERICA France Argentina Brazil Vacation Resort CM Ferias CM Argentina CM do Brasil Turismo CM Brasil Boutiques Itaparica Taipe Trancoso Empredimentos CM Brasil CM Amérique du Sud NORTH AMERICA France French West Indies Sté Martiniquaise des Villages de Vacances SVHC Sté Hôtelière du Chablais CM Bahamas Columbus Isle Casino Shipping Cruise Services HV of Punta Cana Operadora de Aldeas Vacacionales Villa Playa Blanca Profotur Cancun SRL Ixtapa SRL HV Ste Lucie HV Providenciales CM Sales CM Management services Sandpiper Resort Properties Sun Property Corporation Sun Cancun I et II Sun Ixtapa I et II Holiday Village of Sandpiper Vacation Properties de Mexico CM Amérique du Nord Bahamas Holiday village (Columbus Island) Canada Dominican Republic Mexico CM Sales Canada Inc. Santa Lucia Turks & Caicos United States Vacation Wholesaler Inc ASIA Australia CM Australie CM Management Australia Beach Club Maldivian HV CM Management Asia Holiday Village Australia Hong Kong CM Hong Kong Indonesia Japan Luxembourg Malaysia Vacances (Malaysia) CM KK SCM Leisure Development Co PT Bali HV CM Asie HV Malaysia Recreational Villages Sdn Bhd 2007 ANNUAL REPORT 159 .

Marketing companies Polynesia and New Caledonia Singapore South Korea Taiwan Thailand TOUR OPERATING France CM Services (Singapore) CM Vacances Korea CM Vacances (Taiwan) Vacances Siam CM Service companies Real estate companies Service and real estate companies SPVV Other Vacances (Singapore) HV (Thaïland) Jet tours SA Jet Eldo Jet Loisirs Jet Marques Jet Stim Le Quotidien Voyages Four Season Travel Jet Eldo Maroc Jet Eldo Tunisie Morocco Tunisia CLUB MED WORLD France Canada CM World France CM World Montréal CM World Holding CM World Montréal Holding CLUB MED GYM France Club Med Gym SA Edifit CM Gym Corporate 160 .

ADDITIONAL INFORMATION 162 – STATUTORY AUDITORS’ SPECIAL REPORT ON REGULATED AGREEMENTS AND COMMITMENTS 165 – REPORT OF THE BOARD OF DIRECTORS ON THE PROPOSED RESOLUTIONS 169 – PROPOSED RESOLUTIONS 2007 ANNUAL REPORT 161 .

In our capacity as Statutory Auditors of Club Méditerranée (the “Company”).000. and (ii) its interest in the non-trading real estate company Civac for MAD 7. Jet tours paid €978. b. The Company will be required to pay an additional rent corresponding to 8.714 for airport-related expenses.O® accommodation and locker rooms. based on the information provided. Type of agreement. 1. Agreements and commitments authorized during the year In application of Article L.Agadir Club Med Village: upgrading the testing and cold storage areas in kitchens.Yasmina Club Med Village: construction and fitting out of G. Our responsibility does not include identifying any undisclosed agreements or commitments. The sale price of the shares has been set at MAD 59. comprising salaries. For the year ended 31 October 2007. Under this agreement. . purpose and terms and conditions On 11 December 2006 the Board of Directors authorized the Company to undertake the following three projects with Société Immobilière de la Mer (“SIM”). In accor- Director concerned: Mustapha Bakkoury. 225-40 of the French Commercial Code we have been informed of the agreements and commitments approved in advance by the Board of Directors. Those standards require that we carry out the necessary procedures to verify the consistency of the information disclosed to us with the source documents. WITH JET TOURS with Caisse de Dépôt et de Gestion to house Club Méditerranée’s assets in Morocco: . about the main terms and conditions of agreements and commitments that have been disclosed to us.260. Construction costs will be paid for by Club Méditerranée in its capacity as project manager and will be invoiced on a cost basis to SIM at the end of the construction work.000 (excluding VAT) in rent for all of the Villages that it runs in Morocco.Marrakech la Palmeraie Club Med Village: construction and fitting out of the new Club Med headquarters (previously located in Casablanca). Persons concerned: Henri Giscard d’Estaing (Chairman and Chief Executive Officer) and Michel Wolfovski (Executive Vice-President). we present below our report on regulated agreements and commitments.3% to 17%. Type of agreement. WITH CAISSE DE DÉPÔT ET DE GESTION c.STATUTORY AUDITORS’ SPECIAL REPORT ON REGULATED AGREEMENTS AND COMMITMENTS YEAR ENDED 31 OCTOBER 2007 To the shareholders. Type of agreement. We conducted our review in accordance with the professional standards generally accepted in France. a company set up in partnership 162 . This transaction would reduce the Company’s interest in SIM from 24. corresponding to flight management costs. it is the responsibility of shareholders to determine whether the agreements and commitments are appropriate and should be approved.592. Type of agreement. this price will be increased by an amount equal to 50% of any net-of-tax difference between the initial sale price and the share price set at the time of SIM’s IPO.687 in relation to this agreement. d.680 based on valuations carried out by Club Méditerranée and Caisse de Dépôt et de Gestion. which is expected to take place by 31 October 2008. This share transfer agreement was signed on 23 October 2007. 2. without commenting on their relevance or substance.587 for transport-related costs and €780. purpose and terms and conditions On 8 March 2007 the Board of Directors authorized the Company to enter into two framework share transfer agreements under which Club Méditerranée would sell to CDG Développement – a subsidiary of Caisse de Dépôt et de Gestion – (i) its stake in a nontrading real-estate company called Somavivac for MAD 2. However. the Company paid €449. purpose and terms and conditions On 23 October 2007 the Board of Directors authorized the Company to enter into a share transfer agreement with Caisse de Dépôt et de Gestion under which Club Méditerranée would sell to Caisse de Dépôt et de Gestion part of its stake in SIM corresponding to 33. each party shares the costs of the related joint operations.813. 225-31 of the Commercial Code. These framework agreements were signed on 31 October 2007.5% of the final amount of the works (excluding VAT).950. We are required to report to shareholders. purpose and terms and conditions On 7 June 2007 the Board of Directors authorized the Company to enter into an agreement with SIM under which Club Méditerranée would be appointed as project manager for the renovation and extension of 150 rooms at the Smir Club Med Village. Under the provisions of Article R. . purpose and terms and conditions On 11 December 2006 the Board of Directors authorized the Company to enter into a service agreement with Jet tours under which Club Méditerranée and Jet tours will pool their operations teams in order to manage the flights of their respective customers with a view to optimizing passenger load on the flights jointly chartered by the two companies. For the year ended 31 October 2007. Club Méditerranée paid a total of MAD 11. telephone expenses and rental payments for premises.3% of SIM’s capital and voting rights. Type of agreement.179. representing the same basis of payment as under the existing leases. a.492 shares and representing 7.

WITH FONDATION D’ENTREPRISE CLUB MÉDITERRANÉE a. WITH CARTHAGO Person concerned: Henri Giscard d’Estaing (Chairman and Chief Executive Officer). as well as amounts paid to interns and the proportion of the accountant’s salary corresponding to the time spent on the Foundation’s accounts). and consequently settles the corresponding payments. The fees to be paid to the Company for its role as project manager have been set at 3% of the amount of the works (excluding VAT) carried out and paid for by Carthago in its capacity as owner of said Villages. This severance payment corresponds to the remuneration paid to François Salamon under his employment contract during the twenty-four months preceding the end of the notice period and includes any and all bonuses. 4. During the year ended 31 October 2007. corresponding to a total amount of €882. WITH FRANÇOIS SALAMON. such as the construction contract. and (ii) setting the terms of the main contracts related to the transaction.A. Consequently. under which in its capacity as owner Carthago has entrusted Club Méditerranée with overseeing the renovation program for the Djerba la Douce and Djerba la Fidèle Villages in Tunisia. the hotel management contract between Club Méditerranée and Med Taba.A D D I T I O N A L I N F O R M AT I O N dance with this agreement. based on the recommendation of the Nominations and Compensation Committee. on 11 December 2006 the Board of Directors authorized the Company to sign a memorandum of understanding with Rolaco Holding S. the Company will be paid a fee corresponding to 3% of the amount of the works (excluding VAT) that will be financed by SIM and which have been set at a maximum of €20 million. on 11 December 2006 the Board of Directors authorized the signature of an addendum to François Salamon’s employment contract. Type of agreement.000 exercisable options) granted between 2002 and 2006.Premises (rent and rental expenses on a pro rata basis). which owns 16. 3. b. EXECUTIVE VICE-PRESIDENT On 7 June 2007 the Board of Directors authorized the Company to enter into two agreements with Société de Promotion et de Financement Touristique Carthago (“Carthago”). and the development and marketing contract.A. under which Jet tours agreed to develop tours for Club Med Découverte and carry out any related necessary purchases with third-party service providers. . we were advised of the following agreements and commitments approved in prior years and which remained in force during the year. 2007 ANNUAL REPORT 163 .000 stock options (including 35. Following the Company’s decision to develop a new holiday village in Taba (Egypt) through Med Taba. c. Persons concerned: Saud Al Sulaiman and Paul Jeanbart (directors). These contributions related to the following: . Type of agreement.316.611 (including VAT) from these project management agreements. the Company received TND 159. the Board of Directors authorized François Salamon to retain 60. 1. The termination of François Salamon’s employment contract effective 31 October 2007 resulted in payment of the above severance indemnity. a company governed by Egyptian law – which is 16. On 7 June 2007. WITH JET TOURS a.5% indirectly owned by Club Méditerranée (the other shareholders being Orascom Hotels Holding SAE with 67% and Rolaco Holding S.Staff (payment of the salary of the head of the Foundation and her assistant. Jet tours is the sole signatory of the contracts and commitments entered into with said thirty-party service providers. purpose and terms and conditions At its 13 December 2004 meeting. except if it is terminated due to gross or willful misconduct. aimed at: (i) describing the transaction and the related terms and conditions. Agreements and commitments approved in prior years which remained in force during the year In application of the French Commercial Code. purpose and terms and conditions On 13 December 2004 the Supervisory Board authorized the Company to enter into a service agreement with Jet tours. This memorandum of understanding was signed on 17 December 2006. for the purpose of granting him entitlement to a contractual lump-sum severance payment for termination of his contract. It is not payable in the event of retirement giving rise to a statutory retirement bonus paid in accordance with the Company’s customary procedures. the Supervisory Board authorized the Company to provide Fondation d’Entreprise Club Méditerranée with various contributions in order for it to be able to conduct its operations.5%) – it has been agreed that Med Taba will hold all of the assets of the new Village and will authorize the Company to manage and market the Village for a minimum period of fifteen years.Equipment and furniture. . The addendum to the Smir Club Med Village rental agreement drawn up specifically to cover the above program and provide for the new rental terms and conditions had not been signed at 31 October 2007. Based on the recommendation of the Nominations and Compensation Committee. WITH THE ROLACO GROUP 5. These contributions represented the following amounts for the year ended 31 October 2007: (in € thousands) Volunteered hours worked during working hours (sharing of job skills) Volunteered hours worked during free time Salaries and payroll taxes Rent Miscellaneous expenses Total 150 231 156 37 13 587 2.

indexed on the price of the vacations. including such items as salaries and overheads. This agreement had not been signed at 31 October 2007 and was therefore not applicable. . purpose and terms and conditions In accordance with the authorization given by the Supervisory Board on 25 June 2001. corresponding to the costs of indirect sales teams.674.716. including the conditions under which said contract would resume in the event of termination of Henri Giscard d’Estaing’s duties as Chairman and Chief Executive Officer. .000. Club Méditerranée entered into a lease agreement for the purpose of renting the entire property complex for a period of twenty years as from 1 May 1999.2 million. or supplement their insurance payments. Club Méditerranée undertook to promote Jet tours’ products in its own marketing network. purpose and terms and conditions On 21 October 2005 the Board of Directors authorized the Company to enter into an agreement with Jet tours under which Jet tours has entrusted Club Méditerranée with promoting. The term of the contract is four years and the related fees correspond to the following: .A large-scale renovation program for the Villars-sur-Ollon Village with a view to upgrading it to four-trident status. Type of agreement.For commercial support: a commission representing 2% for the first two years and 3% for the following two years. purpose and terms and conditions Following the Company’s sale of the Villars-sur-Ollon Village in Switzerland to Nouvelle Société Villars Palace. and (ii) aggregate selling costs. based on an annual rent of CHF 1. In accordance with this agreement.000. purpose and terms and conditions On 29 March 2003 the Supervisory Board authorized the Company to enter into a service agreement with its subsidiary Jet tours under which Jet tours would lead the two companies’ joint sales and marketing teams and would promote the products developed by the two brands in its indirect sales network. representing an estimated budget of CHF 13. the above reciprocal services are invoiced pro rata to (i) the revenue generated by the indirect networks of each of the two companies. On 8 June 2006 the Board of Directors authorized the signature of an addendum to the above lease agreement. This agreement was not applied during the year ended 31 October 2007. The amount of costs rebilled by Jet tours to Club Méditerranée during the year ended 31 October 2007 totaled €1. Type of agreement. Rental payments made during the year ended 31 October 2007 totaled CHF 2. Guarantees given Company concerned SPVV (finance lease) Currency EUR Outstanding amount at 31 Oct. and authorized the amendments to be made to the contract.126 in fees from this agreement.In accordance with the agreement.Payment by Nouvelle Société Villars Palace of CHF 10 million worth of the related works. WITH HENRI GISCARD D’ESTAING a. On 16 March 2005 the Board of Directors approved the suspension of Henri Giscard d’Estaing’s employment contract as a result of his appointment as Chairman and Chief Executive Officer. with the remainder being directly financed by Club Méditerranée in its capacity as project manager. determined based on sales of Club Med products in the Middle East.An increase in the rental payment corresponding to 7% of the amount of the investment financed by Nouvelle Société Villars Palace.000 5. During the year ended 31 October 2007. the Company signed an agreement with the Rolaco group on 28 September 2001 relating to the provision of commercial support and assistance with developing new Villages in the Middle East. 2007 7. This agreement was not applied during the year ended 31 October 2007. 12 February 2008 The Statutory Auditors Deloitte & Associés Dominique Jumaucourt Ernst & Young Audit Pascal Macioce 164 . Jet tours received €10. 3.850. providing for the following amendments: .500. if they are held liable in a claim that: . WITH THE COMPANY’S SENIOR MANAGERS AND ITS SUBSIDIARIES’ CORPORATE OFFICERS At the Supervisory Board meeting of 11 December 1997. Type of agreement. Type of agreement. selling and marketing Jet tours products to works councils through “Club Med Collectivités” (Club Med Institutions). In return. whose majority shareholder is indirectly the Rolaco group. the Company undertook to indemnify certain its senior managers and corporate officers of subsidiaries and associates.801. Neuilly-sur-Seine and Paris-La Défense. based on the prices and terms in Jet tours brochures. c. Henri Giscard d’Estaing’s employment contract continued to be suspended during the year ended 31 October 2007.413 excluding VAT. Club Méditerranée is free to define the business and marketing strategy for the tours.is not covered by the relevant insurance policy due to exclusion clauses. b.For assistance with developing new Villages: a fee of €650 per new bed marketed in the region. WITH THE ROLACO GROUP .is only partially covered as the policy contains a deductible. 6. b. .

245. .Thierry de La Tour d’Artaise (tenth resolution). information on the position held by all Directors in office at 31 October 2007.Pascal Lebard (fourteenth resolution). Various other matters. . RE-ELECTION OF DIRECTORS I . the purpose of which is described below. You will therefore be asked to re-elect the following Directors: . Accordingly. that is until the Annual General Meeting held to approve the financial statements for the year ended 31 October 2012.A D D I T I O N A L I N F O R M AT I O N REPORT OF THE BOARD OF DIRECTORS ON THE PROPOSED RESOLUTIONS We have called this annual general meeting to submit twenty-four resolutions for your approval. unchanged from the amount voted in respect of previous years. 3. .Saud Al Sulaiman (seventh resolution).Mustapha Bakkoury (eighth resolution).David Dautresme (ninth resolution). APPROVAL OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2007 Ten Directors are due to retire by rotation at the Annual General Meeting and are standing for re-election for a further term of three years ending at the annual general meeting held to approve the financial statements for the year ended 31 October 2010. APPROVAL OF RELATED PARTY AGREEMENTS You will then be asked to approve the related-party agreements described in detail in the special report of the Auditors (fourth resolution). . The Board of Directors will have full discretion to allocate this sum among its members as it deems appropriate (fifth resolution).Philippe Adam (sixth resolution). 2007 ANNUAL REPORT 165 . REPLACEMENT OF A SUBSTITUTE AUDITOR François Carrega has resigned as substitute auditor and we are therefore seeking to appoint the firm Auditex in his place for the remainder of Mr Carrega’s term of office. The second resolution approves the Group’s consolidated financial statements and the third resolution approves the appropriation of the year’s net loss amounting to €38. APPROVAL OF DIRECTORS’ FEES We are proposing the sum of €305. . Including this loss and after the €260.341 effect of a change in accounting method concerning the measurement of assets.Henri Giscard d’Estaing (eleventh resolution).000 in Directors’ fees for the year from 1 November 2007 to 31 October 2008. the proposed appropriation of the year’s net income and granting the Board of Directors discharge for the fulfillment of its duties. 4. which we propose to transfer to the retained deficit.Anne-Claire Taittinger (fifteenth resolution). As required by law.Aimery Langlois-Meurinne (thirteenth resolution).Ordinary resolutions As required by law. . together with a list of all their other directorships or similar offices. . also require your approval by ordinary resolution. is provided in the Company’s shelf-registration document. The first three resolutions cover approval of Club Méditerranée’s parent company and consolidated financial statements for the year ended 31 October 2007.554. 1.806. the first resolution approves the financial statements of Club Méditerranée SA for the year ended 31 October 2007 and grants the Board of Directors discharge for the fulfillment of its duties. which are described briefly below. the retained deficit will amount to €296. 2.Paul Jeanbart (twelfth resolution). .020. we are calling this Annual General Meeting within six months of the financial year end to seek your approval of the Company’s financial statements and the transactions reflected therein. 5. .

to buy back shares of the Company for the following purposes: . 166 . The shares acquired. The entire program may be carried out through a single block purchase.6. which may be further delegated in accordance with the provisions of the law. you are required to set the terms and conditions of the program and the maximum authorized amounts. provided that the Company informs shareholders of said new purpose or purposes by press release or by any other legally authorized means. The maximum amount invested in the share buyback program may not exceed €135. entered into with an investment service provider acting on an independent basis without any influence from the Company. in compliance with the applicable regulations. . The authorization will be valid for a period of 18 months and will cancel and supersede the authorization granted under the 15th resolution passed at the Annual General Meeting held on 8 March 2007. The Board of Directors is seeking authorization. European Commission Regulation 2273/2003 of 22 December 2003 implementing Directive 2003/6/EC of 28 January 2003. The seventeenth resolution authorizes the Board of Directors to buy back shares of the Company in accordance with Articles L. on the market or over the counter. sales and transfers may be carried out and settled by any means. sold or otherwise transferred by any appropriate method. . The buybacks.to allocate the shares upon the issue or exercise of rights attached to shares or share equivalents. In accordance with the law. or through the use of options or derivatives. the sale price or equivalent financial value will be determined in accordance with the specific provisions that apply. may be cancelled. In these cases. provided that the extraordinary resolution authorizing the Board to reduce the Company’s capital is passed. and Articles 241-1 to 241-6 of the Autorité des Marchés Financiers’ general regulations or any regulations that may subsequently replace them. of the French Commercial Code.to carry out transactions under a liquidity contract complying with a code of ethics approved by the Autorité des Marchés Financiers or any other applicable provision. . including those bought back under earlier authorizations. .to allocate the shares to directors and/or employees of the Company and/or the Group upon exercise of stock options or under an employee stock ownership plan. including any shares purchased pursuant to earlier authorizations (provided that the extraordinary resolution authorizing the Board to reduce the Company’s capital is passed). AUTHORIZATION TO TRADE IN THE COMPANY’S SHARES . including through the use of derivatives and notes and the purchase of call options.705 shares. through a public cash or exchange offer.for any other purpose that is currently authorized by law or may be authorized in the future. The maximum buyback price is set at €70 per share and the minimum resale price at €30.594. The shares may be purchased. demergers or acquisitions of assets in exchange for shares. nor do they apply to shares purchased to fulfill the exercise of stock options (or stock grants made to employees).to constitute a stock of shares to be used (i) to pay for future business acquisitions or (ii) for future mergers.225-209 et seq. in compliance with the Autorité des Marchés Financiers’ general regulations. The number of shares used for this latter purpose shall not exceed 5% of the Company’s capital as of the transaction date.935. currently 19.to cancel the shares acquired.370. These prices do not apply to forward transactions entered into pursuant to previous authorizations permitting the purchase or sale of shares after this date of this meeting.

1. 67-236 of 23 March 1967 (French Companies Act) by adopting various measures applicable to companies limited by shares and more particularly the terms and conditions under which shareholders are entitled to attend and vote at general meetings. to carry out any and all necessary formalities and generally to do everything necessary to implement this authorization. . voting rights or share equivalents or any further multiple thereof is required to advise the Company by recorded delivery mail of the number of voting rights and share equivalents held. twenty-first and twentysecond resolutions. we propose to amend the disclosure threshold set out in the first paragraph of article 7.4 of the Company’s by-laws will therefore be amended as follows: “4. AMENDMENT OF ARTICLE 7.2 (Rights and Obligations Attached to the Shares).Extraordinary resolutions Six extraordinary resolutions will also be put to you for approval and are described below. Apart from the statutory disclosures required by law. to set the terms and conditions of the program where necessary. The eighteenth resolution grants the powers required to carry out all legal filing and other formalities with regard to the ordinary resolutions passed by the meeting. 2006-1566 of 11 December 2006 (the “Decree”) has amended decree no.The custodian of the shares now issues a certificate of ownership rather than a share-blocking certificate. no later than five business days after occurrence.The Decree has radically changed the procedure for evidencing ownership of registered or bearer shares.4 OF THE BY-LAWS ON DISCLOSURE THRESHOLDS In the nineteenth resolution.” The rest of the article remains unchanged. The main amendments we are proposing are described below: . The first paragraph of article 7. POWERS 2. either in the register of shares kept by the Company or in a securities account held by an authorized financial intermediary. in the twentieth. The Board may delegate these powers in accordance with the provisions of the law and the Company’s by-laws. Under the new law.Proxies) and article 30 (Quorum). which is now based on a system of record date as close as possible to the date of the General Meeting. any person or legal entity acting alone or in concert who comes to own either directly or indirectly 1% of the Company’s capital.A D D I T I O N A L I N F O R M AT I O N The Company may use this authorization to continue implementing its share buyback program in connection with a takeover bid for the Company or a public exchange offer initiated by the Company. II . in accordance with the provisions of the law. We are proposing to raise the disclosure threshold from 0. We are also seeking full powers for the Board of Directors to use this authorization.This is particularly important for companies that have issued bearer shares. to enter into any and all deeds and agreements. ALIGNMENT OF THE COMPANY’S BY-LAWS WITH THE PROVISIONS OF DECREE 2006-1566 OF 11 DECEMBER 2006 ON SHAREHOLDERS’ MEETINGS Decree no.5% to 1% or any further multiple thereof. . 2007 ANNUAL REPORT 167 . we are proposing to amend the by-laws to take account of these new rules.4 of the by-laws (Form and Ownership of Shares). at midnight (Paris time) on the third business before the date of the meeting. Consequently. shareholders are now entitled to attend and vote at General Meetings provided they are shareholders of record. The articles affected are article 8. article 28 (Attendance at General Meetings . These provisions are a matter of public policy. as we believe that this is sufficient for us to monitor and control the Company’s ownership structure. 7. as is the case for Club Méditerranée.

Lastly. The Board of Directors 168 . in any one twenty-four month period. the twenty-fourth and final resolution is the usual resolution granting the powers required to carry out any legal filing or other formalities with respect to the extraordinary resolutions passed at the meeting. which may be further delegated. do everything necessary in accordance with the laws prevailing at the time this authorization is used. which at present is 10% of the Company’s capital. This limit applies to the amount of capital after any adjustments for transactions made after the date of this meeting. in accordance with the provisions of articles L. POWERS IN RESPECT OF EXTRAORDINARY RESOLUTIONS The twenty-third resolution seeks authorization for the Board of Directors.amend the by-laws accordingly and.225-209 et seq. We trust that these resolutions will meet with your approval. . more generally.cancel the shares and make the resulting capital reduction(s).3. 4. to reduce the capital on one or more occasions in the proportions and at the times it deems appropriate by canceling all or part of the shares held or purchased by the Company within the limits permitted by law. The authorization will be valid for a period of 18 months.determine the final amount of the capital reductions. You will be asked to confer full powers on the Board of Directors. to do the following: . AUTHORIZATION TO THE BOARD OF DIRECTORS TO REDUCE THE CAPITAL BY CANCELING SHARES .deduct the difference between the net book value of the cancelled shares and their par value from any reserve or share premium accounts. . set their terms and conditions and duly record their completion. of the French Commercial Code.

341 effect of a change in accounting method concerning the measurement of assets. the Auditors’ report. having considered the report of the Board of Directors. resolves to appropriate the Company’s net loss for the year. the Ordinary General Meeting gives discharge to the Board of Directors for the fulfillment of its duties for the year ended 31 October 2007.020. as well as the transactions reflected in these financial statements and described in these reports. which show a net loss of €38.DIRECTORS’ FEES The Ordinary General Meeting. THIRD RESOLUTION . considering that Saud Al Sulaiman is due to retire by rotation at this meeting. and the financial statements of the Company for the year ended 31 October 2007 presented by the Board of Directors. of the French Commercial Code and – for agreements entered into prior to the change in management system – Articles L. in the amount of €38. FIFTH RESOLUTION . SIXTH RESOLUTION . As a result.APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2007 19.APPROVAL OF RELATED-PARTY AGREEMENTS The Ordinary General Meeting.358.RE-ELECTION OF SAUD AL SULAIMAN AS DIRECTOR The Ordinary General Meeting. as well as the transactions reflected in these consolidated financial statements and described in these reports. the Ordinary General Meeting notes that dividends for the last three fiscal years were as follows: 2003/04 Number of shares carrying dividend rights Net dividend per share Tax credit 2004/05 2005/06 The Ordinary General Meeting..554. The Ordinary General Meeting.APPROVAL OF THE FINANCIAL STATEMENTS OF THE COMPANY FOR THE YEAR ENDED 31 OCTOBER 2007 As required by law.358.806.005 - 19. approves the financial statements as presented. considering the recommendation of the Board of Directors. re-elects Mr Al Sulaiman as Director for a term of three years expiring at the annual general meeting held to approve the financial statements for the year ended 31 October 2010.225-38 et seq. SECOND RESOLUTION . SEVENTH RESOLUTION .225-86 et seq.000. 2007 ANNUAL REPORT 169 .468 million.A D D I T I O N A L I N F O R M AT I O N PROPOSED RESOLUTIONS A. the Chairman’s report on the practices and procedures of the Board of Directors and the Company’s internal control procedures. the deficit will amount to €296. and the consolidated financial statements for the year ended 31 October 2007 presented by the Board of Directors. which show a net loss of €10. to the deficit. having considered the report of the Auditors on related party agreements governed by Articles L. Ordinary resolutions FIRST RESOLUTION .APPROPRIATION OF PROFIT The Ordinary General Meeting.554.358.005 - 19. the Chairman’s report on the practices and procedures of the Board of Directors and the Company’s internal control procedures. considering that Philippe Adam is due to retire by rotation at this meeting.245.RE-ELECTION OF PHILIPPE ADAM AS DIRECTOR The Ordinary General Meeting. having considered the report of the Board of Directors. approves the consolidated financial statements as presented. sets the total amount of directors’ fees payable for the period from 1 November 2007 to 31 October 2008 at €305. approves the related party transactions and agreements that were entered into or remained in force during the year.005 - FOURTH RESOLUTION . Including this loss and after the €260. re-elects Mr Adam as Director for a term of three years expiring at the annual general meeting held to approve the financial statements for the year ended 31 October 2010.020. having considered the report of the Board of Directors. the Auditors’ report.

REPLACEMENT OF A SUBSTITUTE AUDITOR The Ordinary General Meeting.RE-ELECTION OF AIMERY LANGLOIS-MEURINNE AS DIRECTOR The Ordinary General Meeting. currently 19.RE-ELECTION OF PAUL JEANBART AS DIRECTOR The Ordinary General Meeting. European Commission Regulation 2273/2003 of 22 December 2003 implementing Directive 2003/6/EC of 28 January 2003. considering that Thierry de La Tour d’Artaise is due to retire by rotation at this meeting. re-elects Mr Langlois-Meurinne as Director for a term of three years expiring at the annual general meeting held to approve the financial statements for the year ended 31 October 2010. re-elects Mr Dautresme as Director for a term of three years expiring at the annual general meeting held to approve the financial statements for the year ended 31 October 2010. re-elects Mr Jeanbart as Director for a term of three years expiring at the annual general meeting held to approve the financial statements for the year ended 31 October 2010. TWELFTH RESOLUTION . ELEVENTH RESOLUTION .AUTHORIZATION TO TRADE IN THE COMPANY’S SHARES The Ordinary General Meeting. FIFTEENTH RESOLUTION . considering that David Dautresme is due to retire by rotation at this meeting.RE-ELECTION OF ANNE-CLAIRE TAITTINGER AS DIRECTOR The Ordinary General Meeting. subject to compliance with the law and the Company’s by-laws.RE-ELECTION OF PASCAL LEBARD AS DIRECTOR The Ordinary General Meeting. considering that Pascal Lebard is due to retire by rotation at this meeting. The number of Club Méditerranée SA shares held under this authorization at any given time shall not represent more than 10% of the Company’s capital. re-elects Mr Bakkoury as Director for a term of three years expiring at the annual general meeting held to approve the financial statements for the year ended 31 October 2010. considering that Mustapha Bakkoury is due to retire by rotation at this meeting.225-209 et seq. THIRTEENTH RESOLUTION .705 shares. demerger or asset transfer.RE-ELECTION OF THIERRY DE LA TOUR D’ARTAISE AS DIRECTOR The Ordinary General Meeting. considering that Paul Jeanbart is due to retire by rotation at this meeting. and Articles 241-1 to 241-6 of the Autorité des Marchés Financiers’ general regulations or any regulations that may subsequently replace them. of the French Commercial Code. re-elects Mr Giscard d’Estaing as Director for a term of three years expiring at the annual general meeting held to approve the financial statements for the year ended 31 October 2010. SIXTEENTH RESOLUTION . or 5% of the Company’s capital if the shares are purchased for the purpose of tendering them in consideration for a future merger.RE-ELECTION OF HENRI GISCARD D’ESTAING AS DIRECTOR The Ordinary General Meeting. The Ordinary General Meeting. Authority to act on this resolution may be delegated by the Board.370. NINTH RESOLUTION . appoints in his place the firm Auditex of Faubourg de l’Arche. re-elects Mr Lebard as Director for a term of three years expiring at the annual general meeting held to approve the financial statements for the year ended 31 October 2010. that is until the annual general meeting held to approve the financial statements for the year ended 31 October 2012. re-elects Ms Taittinger as Director for a term of three years expiring at the annual general meeting held to approve the financial statements for the year ended 31 October 2010. considering the resignation of François Carrega as substitute auditor as of the date of this meeting. re-elects Mr de La Tour d’Artaise as Director for a term of three years expiring at the annual general meeting held to approve the financial statements for the year ended 31 October 2010.RE-ELECTION OF MUSTAPHA BAKKOURY AS DIRECTOR FOURTEENTH RESOLUTION . considering that Aimery Langlois-Meurinne is due to retire by rotation at this meeting. considering that Henri Giscard d’Estaing is due to retire by rotation at this meeting.RE-ELECTION OF DAVID DAUTRESME AS DIRECTOR The Ordinary General Meeting. 170 . 92037 Paris-La Défense Cedex. for the remainder of Mr Carrega’s term of office. having considered the report of the Board of Directors. SEVENTEENTH RESOLUTION .EIGHTH RESOLUTION . TENTH RESOLUTION . considering that Anne-Claire Taittinger is due to retire by rotation at this meeting. authorizes the Board of Directors to buy back shares of the Company in accordance with Articles L.

For allocation upon the issue or exercise of rights attached to shares or share equivalents. a stock split or reverse stock split. mergers. The buybacks. entered into with an investment service provider acting on an independent basis without any influence from the Company. regulatory or other provisions that may subsequently replace them). .935. or through the use of options or derivatives. The maximum buyback price is set at €70 per share and the minimum resale price at €30. to enter into any and all deeds and agreements. . It supersedes the existing authorization given in the fifteenth resolution of the Ordinary General Meeting of 8 March 2007.For any other purpose that is currently authorized by law or may be authorized in the future. These prices do not apply to forward transactions entered into pursuant to previous authorizations permitting the purchase or sale of shares after the date of this meeting. nor do they apply to shares purchased to fulfill the exercise of stock options (or stock grants made to employees). including any shares bought back pursuant to earlier authorizations (provided that the extraordinary resolution authorizing the Board to reduce the Company’s capital is voted). to set the terms and conditions of the program. The Board of Directors shall have full powers to adjust the prices or the number of shares specified above to take into account the effects of any corporate actions. EIGHTEENTH RESOLUTION . The entire program may be carried out through a single block purchase. upon exercise of stock options or under an employee stock ownership plan or stock grant plan.To permit transactions under a liquidity contract complying with a code of ethics approved by the Autorité des Marchés Financiers or other applicable provisions. gives full powers to the bearer of a copy or extract of the minutes of this Meeting to carry out all legal filing and other formalities. . including through the use of derivatives and notes and the purchase of call options. where necessary.A D D I T I O N A L I N F O R M AT I O N The Ordinary General Meeting authorizes the Board of Directors (or any person duly authorized by the Board) to buy back shares for the following purposes: . provided that the Company informs shareholders of said new purpose or purposes by press release or by any other legally authorized means. This authorization will expire at the end of a period of eighteen months from the date of this meeting. including those bought back under earlier authorizations.For cancellation of the acquired shares. in compliance with the applicable regulations. to carry out any and all necessary formalities and generally to do everything necessary to implement this authorization. In these cases. on the market or over the counter.POWERS The Ordinary General Meeting. through a public cash or exchange offer. The maximum amount invested in the share buyback program may not exceed €135. demergers or acquisitions of assets. an issue of bonus shares or an increase in the par value of existing shares paid up by capitalizing reserves or earnings. sales and transfers may be carried out and settled by any means.594. or for tender in consideration for future business acquisitions. The shares acquired. the sale price or equivalent financial value shall be determined in accordance with the specific provisions that apply. The Board of Directors may delegate these powers in accordance with the provisions of the law and the Company’s by-laws. The Company may use this authorization to continue implementing its share buyback program in connection with a takeover bid for the Company or a public exchange offer initiated by the Company in accordance with the provisions of article 232-17 of the Autorité des Marchés Financiers’ general regulations (or any other legal. may be cancelled. The shares may be purchased. The Ordinary General Meeting gives full powers to the Board of Directors to use this authorization. provided that the extraordinary resolution authorizing the Board to reduce the Company’s capital is voted. in compliance with the Autorité des Marchés Financiers’ general regulations.For allocation to directors and/or employees of the Company and/or the Group. sold or otherwise transferred by any appropriate method. having considered the report of the Board of Directors. distribution of reserves or any other asset. 2007 ANNUAL REPORT 171 . capital redemptions or any other transaction affecting the Company’s capital. . particularly a change in the par value of the shares.

3. The second paragraph of article 8. simply upon presentation of evidence of their identity.AMENDMENT TO ARTICLE 28 OF THE BY-LAWS (ATTENDANCE AT GENERAL MEETINGS . All shareholders are entitled to attend and vote at general meetings in person or by proxy regardless of the number of shares held. having considered the report of the Board of Directors. Apart from the statutory disclosures required by law. having considered the report of the Board of Directors. any person or legal entity acting alone or in concert who comes to own either directly or indirectly 1% of the Company’s share capital.Extraordinary resolutions NINETEENTH RESOLUTION .” 172 . provided that they have settled all capital calls within thirty days of receiving notification of the amount called and that their shares are booked in an account opened in their name at least five days prior to the date of the meeting. resolves to amend article 28 of the by-laws to simplify it and bring it into line with the provisions of decree no. send their proxy form or postal voting form for any general meeting either by ordinary mail or by electronic means if permitted by the Board of Directors as published in one of the notices of meeting. The Extraordinary General Meeting.228-1 of the French Commercial Code may appoint an authorized intermediary as their nominee under the terms and conditions set out by law. voting rights or share equivalents or any further multiple thereof is required to advise the Company by recorded delivery mail of the number of voting rights and share equivalents held.2 of the by-laws (Rights and Obligations Attached to the Shares) to bring it into line with the provisions of decree no.” The rest of article 8 of the by-laws remains unchanged. The Board of Directors may reduce the legal time period required for receiving postal voting forms. Apart from the statutory disclosures required by law.5% of the Company’s share capital. no later than five days before the date of the meeting. having considered the report of the Board of Directors.5% to 1%. 2006-1566 of 11 December 2006.2 of the by-laws (Rights and Obligations attached to the Shares) is accordingly amended as follows: Old wording: “However.PROXIES) The Extraordinary General Meeting. The first paragraph of article 7.AMENDMENT TO ARTICLE 7 OF THE BY-LAWS (FORM AND OWNERSHIP OF SHARES) New wording: “However. Article 28 is accordingly amended as follows: Old wording: “1. have been registered with the issuer or registrar in the name of the same shareholder for at least two years. Shareholders may vote by mail in accordance with the terms and conditions set out by law.AMENDMENT TO ARTICLE 8.” TWENTIETH RESOLUTION .” New wording: “4. TWENTY-FIRST RESOLUTION . any person or legal entity acting alone or in concert who comes to own either directly or indirectly 0. Shareholders may. Old wording: “4.4 (Form and Ownership of Shares) is therefore amended as follows and the rest of the article remains unchanged. 20061566 of 11 December 2006. double voting rights are conferred on all fully-paid shares which. no later than five business days after occurrence. voting rights or share equivalents or any further multiple thereof is required to advise the Company by recorded delivery mail of the number of voting rights and share equivalents held. Owners of shares referred to in the seventh paragraph of article L. double voting rights are conferred on all fully-paid shares which have been registered in the name of the same shareholder for at least two years.B . resolves to amend article 8. in accordance with the provisions of the law. 2. resolves to amend article 7 (Form and Ownership of Shares) to raise the threshold for disclosing holdings of shares and voting rights from 0. Shareholders may only appoint their spouse or another shareholder as their proxy. no later than five business days after occurrence.2 OF THE BY-LAWS (RIGHTS AND OBLIGATIONS ATTACHED TO THE SHARES) The Extraordinary General Meeting.

only those forms duly completed and received by the Company at least three days before the date of the meeting will be counted for the purpose of calculating the quorum. Proxies given to or votes cast by any intermediary who fails to do so or who fails to disclose its capacity as nominee in accordance with the law or these by-laws will not be counted.” TWENTY SECOND RESOLUTION . send their proxy form or postal voting form for any general meeting either by ordinary mail or by electronic means if permitted by the Board of Directors as published in one of the notices of meeting. The Company may ask the intermediaries acting as nominee for the shareholders referred to in the seventh paragraph of article L 228-1 of the French Commercial Code to provide a list of all shareholders whose shares they are voting at the meeting. Proxies given to or votes cast by any intermediary who fails to do so or who fails to disclose its capacity as nominee in accordance with the law or these by-laws will not be counted. Old wording: “The quorum is calculated on the basis of all shares comprising the share capital. at least forty-eight hours before the date of the meeting. less any shares deprived of their voting rights by virtue of the law. Holders of registered shares will be admitted to the meeting on presentation of evidence of their identity. The second paragraph of article 30 of the by-laws (Quorum) is therefore amended as follows and the rest of the article remains unchanged. Shareholders may vote by mail in accordance with the provisions of the law. in accordance with the provisions of the law.” New wording: “The quorum is calculated on the basis of all shares comprising the share capital. in which case only the named shareholder or proxy may use the card. less any shares deprived of their voting rights by virtue of the law.AMENDMENT OF ARTICLE 30 OF THE BY-LAWS (QUORUM) The Extraordinary General Meeting. The Board of Directors may decide to issue individual admission cards to shareholders. resolves to amend article 30 of the by-laws (Quorum) to bring it into line with the provisions of decree no. 2.228-1 of the French Commercial Code may appoint an authorized intermediary as their nominee under the terms and conditions set out by law. 2006-1566 of 11 December 2006. Holders of registered shares may attend and vote at general meetings or vote by mail provided that their shares are registered on the share register kept by the Company at least forty-eight hours before the date of the meeting. bank or other intermediary has lodged a certificate at the Company’s head office or at any other address specified in the notice of meeting. Holders of bearer shares will be admitted on presentation of the certificate referred to above. In the case of postal votes. 6. The Company may ask the intermediaries acting as nominee for the shareholders referred to in the seventh paragraph of article L 228-1 of the French Commercial Code to provide a list of all shareholders whose shares they are voting at the meeting.” 2007 ANNUAL REPORT 173 . having considered the report of the Board of Directors. 5. Holders of bearer shares may attend and vote at general meetings or vote by mail provided that their stockbroker. attesting to the holder’s ownership of the shares and certifying that they are being held in a blocked account until after the date of the meeting. All shareholders may attend general meetings in accordance with the provisions of the law. 4. Shareholders may appoint a proxy to represent them in accordance with the provisions of the law. Owners of shares referred to in the seventh paragraph of article L. Shareholders may.A D D I T I O N A L I N F O R M AT I O N 4.” New wording: “1. 3.

174 .225-209 et seq.determine the final amount of the capital reductions. having considered the report of the Board of Directors. It supersedes and replaces the unused portion of any previous authorization granted for the same purpose and particularly that granted under the twenty-eighth resolution passed at the annual general meeting of 8 March 2007. more generally. This limit applies to the amount of capital after any adjustments for transactions made after the date of this meeting.cancel the shares and make the resulting capital reduction(s). The Extraordinary General Meeting. having considered the report of the Board of Directors and the special report of the Auditors. set their terms and conditions and duly record their completion. in accordance with the provisions of articles L.AUTHORIZATION GRANTED TO THE BOARD OF DIRECTORS TO REDUCE THE SHARE CAPITAL BY CANCELING SHARES The Extraordinary General Meeting confers full powers on the Board of Directors. The authorization is valid for eighteen months with effect from the date of this meeting. to do the following: .TWENTY-THIRD RESOLUTION . gives full powers to the bearer of a copy or extract of the minutes of this meeting to carry out all legal registration. filing. . announcement and other formalities. of the French Commercial Code. .deduct the difference between the net book value of the cancelled shares and their par value from any reserve or share premium accounts. authorizes the Board of Directors.POWERS The Extraordinary General Meeting.amend the by-laws accordingly and. which may be further delegated. which at present is 10% of the capital in any one twenty-four month period. TWENTY-FOURTH RESOLUTION . . do everything necessary in accordance with the laws prevailing at the time this authorization is used. to reduce the share capital on one or more occasions in the proportions and at the times it deems appropriate. by canceling all or part of the shares held or purchased by the Company within the limit permitted by law.

avenue Charles de Gaulle 92524 Neuilly-sur-Seine Cedex.relations@clubmed. 185. Ernst & Young Audit was appointed for the first time at the Annual General Meeting of 30 April 1981. Carrega having resigned. I further declare that. PERSON RESPONSIBLE FOR INFORMATION • Michel Wolfovski Executive Vice President and Chief Financial Officer 11. the consolidated financial statements of Club Méditerranée and the Auditors’ report on the consolidated financial statements for fiscal 2006. in accordance with the facts and contains no omission likely to affect its import. shareholders at the Annual General Meeting of 11 March 2008 will be asked to appoint Auditex as his successor for the remainder of his term. Faubourg de l’Arche 92037 ParisLa Défense Cedex. the consolidated financial statements of Club Méditerranée and the Auditors’ report on the consolidated financial statements for fiscal 2005. INVESTOR RELATIONS AND FINANCIAL COMMUNICATION • Ernst & Young Audit SAS. • Deloitte & Associés. Its appointment was renewed at the Annual General Meeting of 8 March 2007 for a period of six years expiring at the Annual General Meeting to be called to approve the fiscal 2012 financial statements. SUBSTITUTE AUDITORS • Caroline Bruel 11.” The Chairman and Chief Executive Officer Henri Giscard d’Estaing • François Carrega. 91 to 126 and 123 of the Registration Document filed with the Autorité des Marchés Financiers on 23 February 2006. to the best of my knowledge. • The business report. Phone: + 33 (1) 53 35 30 75 Fax: + 33 (1) 53 35 32 73 E-mail: investor. Its appointment was renewed at the Annual General Meeting of 8 March 2007 for a period of six years expiring at the Annual General Meeting to be called to approve the fiscal 2012 financial statements. financial position and results of Club Méditerranée and the consolidated companies. and ii) the management report on page 62 presents a fair view of the business. Mr.75019 Paris. It may be used in connection with a financial transaction provided that it is accompanied by an information memorandum approved by the AMF. 13. This registration document was filed with the Autorité des Marchés Financiers (AMF) on 12 February 2008 in accordance with Article 212-13 of the AMF’s general regulations. Carrega was appointed for the first time at the Annual General Meeting of 13 March 2001. avenue Charles de Gaulle 92524 Neuilly-sur-Seine Cedex. 2007 ANNUAL REPORT 175 . as well as a description of the main risks and uncertainties they face. i) the financial statements have been prepared in accordance with the applicable accounting standards and give a true and fair view of the assets and liabilities. represented by Pascal Macioce. STATUTORY AUDITORS • Beas. Deloitte & Associés was appointed for the first time at the Annual General Meeting of 17 March 2003. having taken all reasonable care to ensure that such is the case. I have obtained a statement from the Statutory Auditors at the end of their engagement affirming that they had examined the information about the financial position and the accounts contained in this reference document and had read the entire reference document. 91 to 143 and 140 of the Registration Document filed with the Autorité des Marchés Financiers on 14 February 2007. to the best of my knowledge. His appointment was renewed at the Annual General Meeting of 8 March 2007 for a period of six years expiring at the Annual General Meeting to be called to approve the fiscal 2012 financial statements. rue de Cambrai . Beas was appointed for the first time at the Annual General Meeting of 17 March 2003. Phone: + 33 (1) 53 35 34 00 VICE PRESIDENT. results and financial position of Club Méditerranée and the consolidated companies. the information contained in this Registration Document is. rue de Cambrai . Its appointment was renewed at the Annual General Meeting of 8 March 2007 for a period of six years expiring at the Annual General Meeting to be called to approve the fiscal 2012 financial statements. 185.com PERSON RESPONSIBLE FOR THE REGISTRATION DOCUMENT “I hereby declare that. Mr.75019 Paris. as presented on pages 60 to 78. as presented on pages 66 to 78. represented by Dominique Jumaucourt. boulevard des Invalides 75007 Paris.The following information is incorporated by reference in the Registration Document: • The business report.

views or opinion expressed therein the original language version of the document in French takes precedence over the translation.The English language version of this Registration Document is a free translation from the original. All possible care has been taken to ensure that the translation is an accurate representation of the original. 176 . which was prepared in French. However in all matters of interpretation of information.

avenue Carnot .clubmed.75017 Paris .7.75957 Paris Cedex 19 .75456 Paris Cedex 9 Garantie Financière APS .France Tel: +33 (0)1 53 35 35 53 – Fax: +33 1 53 35 36 16 – www.482.F .CLUB MÉDITERRANÉE SA 11.com Société anonyme (joint stock corporation) with share capital of 77.F . AA 992 497 GENERALI ASSURANCES IARD . rue de Cambrai . boulevards Haussmann .820 – 572 185 684 RCS Paris – License: LI 075 95 0333 RCP No.15.

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