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2006 REGISTRATION DOCUMENT

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2006 REGISTRATION DOCUMENT Powered By Docstoc
					NEW NAME FOR MINES DE LA LUCETTE SUBJECT TO APPROVAL BY
THE GENERAL SHAREHOLDERS’ MEETING TO BE HELD ON 24 MAY 2007




                                                              2006
                                                              REGISTRATION
                                                              DOCUMENT
The original French version of this translated Registration Document was filed with the Autorité des Marchés Financiers on March 28, 2007,
number D07-0239, pursuant to Article 212-13 of the general regulations of the Autorité des Marchés Financiers. It may be used in connection
with a financial operation if completed by a prospectus for the operation and a summary, each of which has received the visa of the Autorité
des Marchés Financiers.
CONTENTS
  2   1. Description of the Company and the Group                          22   5. Management’s discussion and analysis
  2   Description of the Company
  2   Investment policy and business markets
                                                                           44   6. Events after the board of directors’ meeting
  3   Simplified Group organisation chart
                                                                                   of 6 March 2007
  3   Judicial and arbitration proceedings                                 45   7. Report by the Chairman of the board
  3   Selected financial information                                       45   Chairman’s report
  4   Description of Group properties                                      52   Auditors’ report on the Chairman’s report
  5   2. General information about the issuer                              53   8. Audit Committee’s report
         and its capital
  5   Company name and registered office                                   54   9. Consolidated financial statements
  5   Legal form and applicable law                                        55   Consolidated financial statements and notes
  5   Nationality                                                          78   Auditors’ report
  5   Formation and term of the Company                                    79   10. Parent Company financial statements
  5   Corporate purpose (article 2 of the articles of association)         80   Company financial statements and notes
  6   Trade and Companies Register                                         87   General Auditors’ report
  6   Financial year (article 33 of the articles of association)           88   Special Auditors’ report
  6   Consequences of opting for SIIC status
  6   General shareholders’ meetings                                       91   11. Pro Forma Financial data
  6   Consultation of corporate documents                                  92   Pro Forma consolidated income statement
  6   Share capital and type of shares                                     94   Auditors’ Report on the pro forma data
  7   Transfer of shares
                                                                           95   12. Stock Market Information
  7   Authorisation for capital increases
                                                                           95   Stock exchange on which Mines de la Lucette shares are listed
  9   Other securities giving access to capital
                                                                           95   Volumes traded and recent price trends
 10   Changes in capital
                                                                           96   13. General shareholders’ meeting
 11   3. Ownership structure and voting rights                                      of 24 May 2007
 11   Number of voting rights
                                                                           96   Agenda
 11   Changes in ownership strucuture as at 31 December 2005
                                                                           97   Proposed Resolutions
      and 2006
                                                                          102   Persons responsible for the registration document and
 11   Description of majority shareholder: MSREF Turque S.à r.l
                                                                                for the audit of the accounts
 12   Lien on registered shares
                                                                          102        Statement by the person responsible
 12   Main changes in distribution of capital over the last three years
                                                                                     for the registration document
 14   Disclosure thresholds
                                                                          103        Persons responsible for the information
 14   Statutory distribution of profits (articles 35 and 36
                                                                          103        Auditors
      of the articles of association)
                                                                          103   Fees paid to the auditors
 15   4. Management Bodies                                                104   14. Information policy
 15   Internal regulations of the board of directors
                                                                          104   Regulatory filings
 15   Other bodies
 16   Board members’ appointments                                         106   15. Cross reference table
 20   Conflicts of interest for members of the Board
 20   Directors’ interests in the Company’s capital
 20       Operations with members of the Board or Senior Executives
 21       Service contracts between members of the Board and
          the Company or one of its subsidiaries providing for benefits
          in exchange for services
 21       Compensation and benefits
 21       Retirement scheme
 21       Number of meetings of the Board and Board Committees
          in 2006
 21   Declaration on corporate governance
 21   Benefits granted to Group employees
 21       Stock subscription or stock purchase options
 21       Allocation of shares granted without consideration
      1. DESCRIPTION
      OF THE COMPANY AND THE GROUP

      Description of the Company
      Mines de la Lucette was an industrial company up until the Second World War, operating gold and antimony mines. In 1945 it began to trade and
      process the antimony it mined. In 2001, the Company sold its antimony goodwill and became a property company. On 30 March 2005, one of the
      real estate funds managed by Morgan Stanley Real Estate became the majority shareholder in Mines de la Lucette. As at 31 December 2006,
      MSREF Turque S.à r.l owns 93.6% of the share capital of Mines de la Lucette. MSREF Turque carried out this takeover to provide it with an investment
      structure with the ability to take advantage of capital market opportunities and benefit from the company’s status as an SIIC (listed real estate
      investment company).
      Mines de la Lucette is a real estate company with assets of approximately 2 billion euros as at 31 December 2006, consisting mainly of office and
      warehouse buildings.
      The Company’s portfolio as at 31 December 2006 contained 43 high quality properties covering an area of approximately 746,000 sqm, mainly
      concentrated in:
      • the most sought-after business districts in the Île-de-France region, both by users and investors in the Office sector;
      • various areas of industrial activity in France in the Warehouse sector.
      The Company’s business mission is the acquisition and active management of its real estate assets.



      Investment policy and business markets
      Mines de la Lucette’s goal in the medium term is to become a major listed real estate company with most of its investments in the office sector. To
      achieve this objective, the Company has an ambitious policy of selective acquisition of properties with secure cash flows or with high revaluation
      potential (restructuring, in-house development or other opportunities).
      The Company intends to give priority to investments in office space in the most sought-after business districts in Paris and the Île-de-France region
      due to the size of this market and its great liquidity. Mines de la Lucette also intends to gain a presence in Lyon and Marseille, markets it considers
      promising particularly in terms of diversification of risks and yields.
      In addition, Mines de la Lucette intends to continue to take advantage of property outsourcing by industrial corporations.
      Fifty to seventy-five percent of these acquisitions will be financed by loans and the balance by the Company’s own funds. These funds may come
      from business cash flow or raising funds from the stock market.




2
COMPAGNIE
LA
LUCETTE
Simplified Group organisation chart


                                              Mines de la Lucette




                                                                 100%
                                                                                             M2L GESTION




                                                      99.99%                          100%                              100%



 99.99%                                           SNC
             SCI Chassagne                                                  Sarl Landes                    Sarl Libourne
                                           Vaillant Peupliers



  95%                                                                                                    99.84%         99.93%
                     SCI 21                                                SCI Gascogne



 99.99%
              SCI Chambolle                                                                         SNC                      SNC
                                                                                              Saint-Ouen Évry           Trois Fontanot


 99.99%                                                                           99.99%      SCI Saint-Ouen            SCI Charenton     99.99%
                    SCI Conti
                                                                                                   Biron                  de Gaulle


                                                                                  99.99%          SCI Évry                 SCI Nanterre   99.99%
 99.99%
                SCI Volnay                                                                         Mozart                   Étoile Park


                                                                                  99.99%         SCI Évry                  SCI Antony     99.99%
                                                                                                 Européen                  Renaissance




Judicial and arbitration proceedings
Over the last twelve months, the Company has not been involved in any government, judicial or arbitration proceedings that either had, or may in
the future have, significant effects on its financial situation or profitability.



Selected financial information
In thousand euros                                                                                                   2006                    2005

Net rents                                                                                                         73,680                   3,938
Operating income                                                                                               158,415                     4,594
Net income (group share)                                                                                       105,403                     4,911
Shareholders’ equity                                                                                           561,495                    32,740
Net financial debts                                                                                          1,397,811                    88,838

The selected financial information shows a significant increase due to the Group’s growth in the 2006 financial year.




                                                                                                                                                   3

                                                                                                                                 legal information
      Description of Group properties
      The table below is a summary of the properties owned as at 31 December 2006:
                                                       Geographic area   Type of property Acquisition          Area   Main tenants

      5/7, rue Scribe – 75009 Paris                    Paris CBD*        Offices          2006            7,491 sqm   Bloomberg, Discovery Channel
      7/9, avenue Messine – 75008 Paris                Paris CBD*        Offices          2006            8,459 sqm   AXA, KBL France
      Scor Tower – 92800 Puteaux-La Défense            La Défense        Offices          2006           30,172 sqm   Scor Insurance
      Colisée – 92400 La Défense-Courbevoie            La Défense        Offices          2006           24,932 sqm   Regus, Expanscience, Gefco
      31, rue des Peupliers – 92100 Boulogne           Western Paris     Offices          1999            1,014 sqm   A novo
      Crystal Park – 92200 Neuilly-sur-Seine           Western Paris     Offices          2006           39,911 sqm   PricewaterhouseCoopers, Landwell,
                                                                                                                      Amgen, IFF
      River Plaza – 92600 Asnières                     Western Paris     Offices          2006           26,740 sqm   L’Oréal, Fujitsu, Lesieur
      Nanterre Étoile Park – 92000 Nanterre            Western Paris     Offices          2006            5,633 sqm   Genegis
      93, avenue C.-d-G. – 92200 Neuilly-sur-Seine     Western Paris     Offices          2006            1,852 sqm   Firmenich
      22, rue J.-Dulud – 92200 Neuilly-sur-Seine       Western Paris     Offices          2006            2,017 sqm   Firmenich
      Maisons-Alfort – 94700 Maisons-Alfort            Île-de-France     Offices          2005            3,931 sqm   Geoxia, ACE
      Les Espaces de Torcy – 77200 Torcy               Île-de-France     Offices          2005            3,053 sqm   Veritas
      Antony Renaissance – 91160 Antony                Île-de-France     Offices          2006           10,539 sqm   IBM, Sanofi Aventis, Linedata
      Évry Européen – 91080 Courcouronnes              Île-de-France     Offices          2006           14,384 sqm   Multiple tenants
      Évry Mozart – 91000 Évry                         Île-de-France     Offices          2006            5,510 sqm   Multiple tenants
      Évry Champs – 91080 Courcouronnes                Île-de-France     Offices          2006            5,347 sqm   Multiple tenants
      Saint-Ouen Biron – 93400 Saint-Ouen              Île-de-France     Offices          2006           12,633 sqm   Bull
      Saint-Ouen Dieumegard – 93400 Saint-Ouen         Île-de-France     Offices          2006            6,332 sqm   Vacant
      Charenton-le-Pont – 94220 Charenton              Île-de-France     Offices          2006           10,043 sqm   Vacant

       OFFICES                                                                                          219,993 sqm
      10, rue Denis-Papin – 91380 Chilly-Mazarin       Île-de-France     Warehouse        2000           10,977 sqm   Locaposte
      23, rue Denis-Papin – 91380 Chilly-Mazarin       Île-de-France     Warehouse        1998            2,360 sqm   ING Car Lease
      8, rue Denis-Papin – 91380 Chilly-Mazarin        Île-de-France     Warehouse        1999            4,800 sqm   Vacant
      Moreuil-L’espinoy – 80110 Moreuil                Provinces         Warehouse        2005           53,036 sqm   Vacant
      Aix 1 – 13792 Aix-en-Provence                    Provinces         Warehouse        2006           48,574 sqm   Easydis
      Aix 2 – 13792 Aix-en-Provence                    Provinces         Warehouse        2006           24,498 sqm   Easydis
      Aix 3 – 13792 Aix-en-Provence                    Provinces         Warehouse        2006            4,194 sqm   Easydis
      Andrézieux – 42160 Andrézieux                    Provinces         Warehouse        2006           70,202 sqm   Easydis
      Auxerre – 89000 Auxerre                          Provinces         Warehouse        2006           30,643 sqm   Easydis
      Besançon – 25052 Besançon                        Provinces         Warehouse        2006           73,661 sqm   Easydis
      Béziers/Servian – 34290 Servian                  Provinces         Warehouse        2006            5,610 sqm   Easydis
      Cholet – 49300 Cholet                            Provinces         Warehouse        2006            6,933 sqm   Easydis
      Grigny-le-Boutras – 69520 Grigny                 Provinces         Warehouse        2006           30,885 sqm   Easydis
      Limoges – 87290 Limoges                          Provinces         Warehouse        2006           46,177 sqm   Easydis
      Montmorillon – 86500 Montmorillon                Provinces         Warehouse        2006           35,164 sqm   Easydis
      Toulon – 83320 La Farlède                        Provinces         Warehouse        2006           20,963 sqm   Easydis
      Longvic                                          Provinces         Warehouse        2006           24,000 sqm   Transalliance

       WAREHOUSES                                                                                       492,677 sqm
      Radisson                                         Western Paris     Hotel            2003            8,110 sqm   Société Hôtelière Boulonnaise
      20, rue du Fief (land) – 92100 Boulogne          Western Paris     Land             1999            2,134 sqm
      Hôtel Latitudes Seilh – 31840 Seilh (Toulouse)   Provinces         Hotel            2003            9,559 sqm   Pierre et Vacances
      CERS – 40130 Cap-Breton                          Provinces         Sports           2005            8,117 sqm   Générale de Santé
                                                                         Rehabilitation
                                                                         Centre
      Cap Club Hôtel – 40130 Cap-Breton                Provinces         Hotel            2005            5,120 sqm   Générale de Santé

       OTHER PROPERTIES                                                                                  33,040 sqm
      * Central Business District.




4
COMPAGNIE
LA
LUCETTE
2. GENERAL INFORMATION
ABOUT THE ISSUER AND ITS CAPITAL

Company name and registered office
Current company name of the Company: Mines de la Lucette
New company name to be submitted for approval to the combined general shareholders’ meeting on 24 May 2007: Compagnie la Lucette
Registered office: 7, rue Scribe – 75009 Paris – Tel. 00 33 (0) 1 42 25 86 86



Legal form and applicable law
Mines de la Lucette is a French société anonyme with a board of directors governed by the provisions of the French Commercial Code (Code de
commerce) and the decree of 23 March 1967 on business corporations.



Nationality
French



Formation and term of the Company
The Company has been registered in the Paris Trade and Companies Register since 18 November 2005, and in the Nanterre Trade and Companies
Register since 27 March 2001, and had previously been registered in the Paris Trade and Companies Register since 23 June 1958. The term of the
Company was extended for a period of 99 years from 1 July 1990, i.e. until 1 July 2089, unless it is dissolved earlier or the term is extended.



Corporate purpose (article 2 of the articles of association)
The Company’s corporate purpose, in France and foreign countries, on its own behalf or in partnership with third parties is:

primarily:
• the acquisition of any land, property rights or properties, including by means of construction leases and property financial leases, as well as any
assets and rights accessory to or associated with such real estate assets;
• the construction of buildings and any operations directly or indirectly related to the construction of these buildings;
• the operation and development of these properties by renting;
• owning direct and indirect interests in the entities mentioned in article 8 and paragraphs 1, 2 and 3 of article 206 of the General Tax Code, and
more generally acquiring interests in any companies whose main corporate purpose is operating rental properties as well as the associated asset
management, accounting and administration thereof;

subordinately:
• directly or indirectly leasing all types of real estate assets;
• all legal, financial, administrative operations, intermediary services, and operations to promote companies in which it has an interest;

exceptionally:
• divestment, particularly by sale, transfer or merger of the Company’s assets;

and more generally:
• participation as a borrower and lender in any intragroup loan or cash operation and the option of granting any real or personal security interests,
mortgages or other guarantees;
• and any civil, financial, commercial, industrial, asset and property operations deemed useful for achieving any of the above-mentioned corporate
purposes.




                                                                                                                                                        5

                                                                                                                              legal information
      Trade and Companies Register
      582 061 727 RCS Paris – SIRET: 582 061 727 00076 – APE: 702C



      Financial year (article 33 of the articles of association)
      1 January to 31 December.



      Consequences of opting for SIIC status
      In addition to the statutory provisions and due to opting for SIIC (listed investment property companies) status, the current income from business
      activities eligible for SIIC status, as well as capital gains from the sale of assets qualifying for this status, are tax exempt subject to the mandatory
      distribution of 85% of the profit before tax for year N in year N+1, and 50% of the sale income for year N by year N+2.



      General shareholders’ meetings
      Collective decisions by the shareholders are voted on in general shareholders’ meetings, in application of the legal and statutory requirements(1).
      General shareholders’ meetings are convened according to the requirements set by law.
      The agenda for shareholders’ meetings is determined by the person convening the meeting. One or more shareholders, representing at least the
      percentage of share capital fixed by law and acting according to the legal requirements and deadlines, are entitled to require that draft resolutions
      be added to the agenda of the shareholders’ meetings, by registered letter, with a delivery receipt, or by electronic means.
      Shareholders’ meetings may not discuss any items not included on the agenda, which may not be changed at the meeting’s second call. However,
      the shareholders’ meeting may dismiss one or more Board members and replace them under any circumstances.
      Any shareholder has the right to attend general shareholders’ meetings and participate in the discussions in person or through a proxy, simply by
      providing proof of identity and ownership of his/her shares, provided that:
      • for holders of registered shares, the shares are entered in the holders’ name in the Company’s share registry by midnight Paris time on the
      third business day prior to the general shareholders’ meeting;
      • for holders of bearer shares, the shares must be entered or registered in the books, by an authorised intermediary and registered in the bearer’s
      share account with that intermediary, by midnight Paris time on the third business day prior to the general shareholders’ meeting by midnight Paris
      time.
      Any shareholder may vote by mail prior to the general shareholders’ meeting pursuant to legal and regulatory procedures. Mail-in votes are only
      included for calculating the quorum if they are received by the Company in advance of the meeting, according to the procedures and deadlines fixed
      by decree.
      The voting right attached to shares is in proportion to the capital they represent. Each capital share or dividend share entitles the holder to at least
      one vote.
      Double voting rights will be attributed to shares based on the amount of capital they represent is attributed to all fully paid up shares for which proof
      can be shown that they have been registered in the same holder’s name for at least two years.



      Consultation of corporate documents
      Corporate documents about the Company may be reviewed upon request at the Company’s registered office.



      Share capital and type of shares
      The Company’s share capital as at 31 December 2006 was 287,197,920 euros, divided into 19,146,528 shares with a face value of 15 euros each,
      all in the same class and fully paid up.
      These shares may be registered or bearer shares, at the shareholder’s own option. The shares are entitled to be entered in the books under the con-
      ditions and according to the procedures fixed by current legislative and regulatory requirements.
      Under the terms of article L. 228-2 of the French Commercial Code (Code de commerce), the Company is authorised to enforce the regulations
      for identification of shareholders and identification of shares giving immediate or future voting rights in its own shareholders’ meetings.




      (1) Articles 24 to 31 of the articles of association.




6
COMPAGNIE
LA
LUCETTE
Transfer of shares
Shares are freely negotiable, unless legal or regulatory requirements state otherwise.
Shares are transferred by changing the registration from account to account in accordance with the procedures fixed by the legal and regulatory
requirements in effect.



Authorisation for capital increases
The table below gives a summary of the authorisations granted to the board of directors by resolutions passed by the combined general
shareholders’ meetings on 3 April 2006 and 27 June 2006.


Resolution   Type of authorisations                  Date authorised        End of         Maximum        Global cap of   Effective date
                                                     by shareholders’   authorisations     authorised      1.04 billion   of authorisations
                                                         meeting                           face value         euros

   10        Authorisation, with permission to        03/04/2006        03/06/2009       10% of capital       Yes         Board meeting of 27 April 2006:
             subdelegate, to increase the capital                                                                         allocation of 18,850 shares
             and issue securities without                                                                                 granted without consideration.
             preferential subscription rights, for
             the allocation without consideration
             of existing shares or shares to be
             issued to salaried members of staff
             and/or officers of the Company or
             associated companies.

   11        Authorisation, with permission           03/04/2006        03/06/2009       10% of capital       Yes         Board meeting
             to subdelegate, to grant on one or                                           on the day                      of 21 August 2006:
             more occasions stock subscription                                            the options                     granting of 55,660 options.
             and/or stock purchase options                                                are granted
             to members of staff and/or officers
             of the Company or associated
             companies.

   7         Authorisation to implement a share       27/06/2006        27/12/2007       10% of capital       N/A         Not used.
             buyback programme to in                                                      at any time
             particular:
             1) ensure the maintenance
             of an active market with liquidity
             of transactions and regularity
             of the share price in shares
             of Mines de la Lucette through
             the intermediary of an investment
             services;
             2) allocate shares granted without
             consideration;
             3) allow share distribution or swap
             during external growth operations.




                                                                                                                                                            7

                                                                                                                                    legal information
      Resolution   Type of authorisations                  Date authorised        End of          Maximum         Global cap of   Effective date
                                                           by shareholders’   authorisations      authorised       1.04 billion   of authorisations
                                                               meeting                            face value          euros

            17     Authorisation, with permission to        27/06/2006        27/08/2008           M€400              Yes         1) board meeting of 27 June
                   subdelegate, to decide on a capital                                                                            2006: increase of share capital
                   increase on one or more                                                                                        for a cash value of €204,981,300,
                   occasions, by issuing shares, with                                                                             by issuing new shares, with
                   preferential subscription rights,                                                                              preferential subscription rights,
                   and/or securities giving access                                                                                2) Board meeting of 27 June
                   to the capital.                                                                                                2006: allocation without
                                                                                                                                  consideration to shareholders
                                                                                                                                  of 5,466,168 share warrants
                                                                                                                                  for a total nominal value
                                                                                                                                  of €22,775,770.



            18     Authorisation, with permission           27/06/2006        27/08/2008           M€200              Yes         Not used.
                   to subdelegate, to decide
                   on a capital increase:
                   1) by issuing shares, without
                   preferential subscription rights,
                   and/or securities giving access
                   to capital in the Company and/or
                   issuing securities;
                   2) to pay for the securities that are
                   tendered to a public exchange
                   offer.

            19     Authorisation, with permission           27/06/2006        27/08/2008        10% of capital        Yes         Not used.
                   to subdelegate, to pay for the                                                at any time
                   contributions in kind for capital
                   shares or securities by issuing
                   shares or securities giving access
                   to capital.

            20     Authorisation to fix the subscription    27/06/2006            N/A           10% of capital        Yes         Not used.
                   share price, in the context of a                                               per year
                   capital increase without preferential
                   subscription rights.

                   Authorisation to decide to increase
            21     the share capital by adding              27/06/2006        27/08/2008           M€200              Yes         Not used.
                   premiums, reserves, profits or from
                   other sources.

                   Authorisation, with permission to
            22     subdelegate, to decide to increase       27/06/2006        27/08/2008           No limit           Yes         Not used.
                   the number of shares to be issued
                   in the event of a capital increase
                   with or without preferential
                   subscription rights.

                   Authorisation to increase the share
            23     capital by issuing shares or             27/06/2006        27/08/2008           M€200              Yes         Not used.
                   securities giving access to capital
                   reserved for savings plan members,
                   without preferential subscription
                   right of subscription.

                   Permission to reduce the share
            24     capital by cancelling treasury stock.    27/06/2006        27/08/2008       10% for a period       No          Not used.
                                                                                                of 24 months




8
COMPAGNIE
LA
LUCETTE
Share capital authorised but not issued
The combined general shareholders’ meeting of 27 June 2006:
• in its seventh resolution, gave authorisation to the board of directors to implement a share buyback programme to in particular: (i) ensure the main-
tenance of an active market with liquidity of transactions and regularity of the share price in shares of Mines de la Lucette through the intermediary
of an investment services; (ii) allocate shares granted without consideration; (iii) allow share distribution or swap during external growth operations,
up to the limit of 10% of the share capital at any time. This authorisation is valid for eighteen months, and has not been used;
• in its eighteenth resolution, gave authorisation to the board of directors, with permission to subdelegate, to decide to increase the share capital
(i) by issuing shares, without preferential subscription rights, and/or securities giving access to the Company’s capital and/or the issue of securities
and (ii) to pay for the securities that are tendered to a public exchange offer, up to 200 million euros. This authorisation is valid for twenty-six
months, and has not been used; to decide on a capital increase:
• in its nineteenth resolution, gave authorisation to the board of directors, with permission to subdelegate, to pay for contributions in kind for cap-
ital shares or securities by issuing shares or securities giving access to capital, up to the limit of 10% of the capital at any time. This authorisation
is valid for twenty-six months and has not been used;
• in its twentieth resolution, gave authorisation to the board of directors to fix the share price for a capital increase without preferential subscrip-
tion rights, up to the limit of 10% of the capital per year. These authorisation has not been used;
• in its twenty-first resolution, gave authorisation to the board of directors to decide on a capital increase by the addition of premiums, reserves,
profits or from other sources, up to the limit of 200 million euros. This authorisation is valid for twenty-six months and have not been used;
• in its twenty-second resolution, gave authorisation to the board of directors, with permission to subdelegate, to decide on an increase in the
number of shares to be issued in case of a capital increase, with or without preferential subscription rights, with no limit on the amount. This autho-
risation is valid for twenty-six months and has not been used;
• in its twenty-third resolution, gave authorisation to increase the share capital by issuing shares or securities giving access to capital, reserved for
savings plan members with no preferential subscription right, up to the limit of 200 million euros. This authorisation is valid for twenty-six months
and have not been used;
• in its twenty-fourth resolution, gave authorisation to the board of directors to reduce the share capital by cancelling treasury stock, up to the limit
of 10% of the capital every twenty-four months. This authorisation is valid for twenty-six months and has not been used.



Other securities giving access to capital
On 27 April 2006, the board of directors proceeded to allocate 18,850 shares granted without consideration to salaried members of staff at associated
companies, who are not company officers.
On 21 August 2006, the board of directors set up a stock subscription or stock purchase option plan and proceeded to allocate 55,660 options
(with the right to subscribe to the same number of shares) to salaried members of staff at associated companies who are not company officers.
The table below summarises the securities giving access to capital issued as at 31 December 2006:
Share warrants
Date of shareholders’ meeting                                                                                                             27 June 2006
Date of Board meeting                                                                                                                     27 June 2006
Starting date for exercise                                                                                                                  5 July 2006
Expiry Date                                                                                                                               30 June 2008
Number of share warrants allocated                                                                                                           5,466,168
Share warrant exercise parity                                                                                        5 new shares for 18 share warrants
Issue price for each new share                                                                                                                      €24
Number of shares issued after exercise of share warrants as at 31 December 2006                                                                 14,940
Number of share warrants exercised as at 31 December 2006                                                                                        53,784
Number of share warrants outstanding                                                                                                         5,412,384




                                                                                                                                                            9

                                                                                                                                 legal information
      Changes in capital
      Date            Number Type of operation                         Authorisation        Amount/           Date              Result of              Number of           Amount
                     of shares                                                 date          number     performed/          implementation            shares after        of capital
                                                                                          authorised     exercised          of authorisation            operation


                                                                                                                        Number of      Number of
                                                                                                                     share warrants     securities
                                                                                                                         exercised         issued

      1992 to 2001    73,220                                                                                                                                           F7,322,000

      20/06/2001      73,220 Conversion of capital into euros                                          20/06/2001                                        73,220        €1,098,300
                             by rounding and allocating
                             the reduction in capital to a blocked
                             reserve account

      26/09/2002      73,220 Capital increase by issuing              05/09/2002         375,000       29/09/2002                       288,079         361,299        €5,418,435
                             new shares for cash

      27/06/2003     361,299 Capital increase by withdrawal                                            27/06/2003                                       361,299       €16,258,455
                             from “Issue, merger,
                             contribution bonus” account.

      27/06/2003     361,299 Splitting the face value of each share   27/06/2003                       27/06/2003                                     1,083,897       €16,258,455
                             into 3 and creating 2 new shares
                             for each old share

      08/11/2004 1,083,897 Allocation of share warrants without       18/06/2004         722,598       17/12/2004                       698,409       1,549,503       €23,242,545
                           consideration to shareholders

      03/04/2006 1,549,503 Capital increase by issuing new shares     04/03/2006        3,916,665      03/04/2006                     3,916,665       5,466,168       €81,922,520
                           to pay for contributions in kind

      03/08/2006 5,466,168 Capital increase by issuing new shares
                           shares with preferential
                           subscription rights                        27/06/2006       13,665,420      03/08/2006                     13,665,420     19,131,588      €286,973,820

      03/08/2006 19,131,588 Allocation of share warrants without
                            consideration to shareholders             27/06/2006        5,466,168 from 05/07/2006         88,434         24,565      19,156,153      €287,342,295
                                                                                                     to 14/03/2007




10
COMPAGNIE
LA
LUCETTE
3. OWNERSHIP STRUCTURE
AND VOTING RIGHTS

Number of voting rights
As at 31 December 2006, the total number of voting rights in existence was 19,144,167.
As at 14 March 2007, after the exercise of share warrants, the total number of voting rights in existence was 19,154,738.
The total number of shares with double voting rights was 207.



Changes in ownership structure as at 31 December 2005 and 2006
As far as the issuer’s managers are aware, the ownership structure is as given below:
Shareholder                                             As at 31/12/2006                                               As at 31/12/2005
                                    Number of shares            % of capital   % of voting rights   Number of shares            % of capital   % of voting rights

MSREF Turque S.à r.l                    17,922,848                    93.6                 93.6                   –                       –                    –
MSREF Grillet BV                                  –                       –                    –         1,188,338                    76.7                 76.7
Cyril Finance                                     –                       –                    –            91,027                      5.9                  5.9
Asset Value Investor                              –                       –                    –            79,282                      5.1                  5.1
FL participations                                 –                       –                    –                  –                       –                    –
Tschingel                                         –                       –                    –                  –                       –                    –
Saint Paul                                        –                       –                    –                  –                       –                    –
Autodétention                                 2,568                     0.0                  0.0                  –                       –                    –
Public                                   1,221,112                      6.4                  6.4           190,856                    12.3                 12.3
Total                                   19,146,528                     100                  100          1,549,503                     100                  100

As far as the Company is aware, there is no other shareholder apart from MSREF Turque S.à r.l holding more than 5% of the capital or voting
rights. A double voting right is allocated to registered shares held for more than two years (see 2.1.11/article 29 of the articles of association).
According to the articles of association, each board member holds 20 Company shares. These shares were lent by MSREF Grillet BV (then
by MSREF Turque S.à r.l after the sale by MSREF Grillet BV of its company shares to the latter) for the term of their appointments to the Board
to Messrs Pascal Duhamel, Francis Berthomier, Robert Falls and Stéphane Theuriau.
As at 31 December 2006, 2,568 shares were owned by the Company as part of the liquidity contract signed with Fortis Bank. As far as the
Company is aware, as at 31 December 2006, employees of the Mines de la Lucette Group together owned fewer than 1,000 shares, which were
not acquired or allocated as part of a company savings plan.
As far as the Company is aware, there is no shareholders’ agreement in effect at the time of filing of this registration document.



Description of the majority shareholder: MSREF Turque S.à r.l
Registered Office                                      Legal form                                             Date of Incorporation
20, rue de la Poste, L-2346 Luxembourg                 Limited Liability Company                              2 June 2006

Company object
The Company’s corporate purpose is the acquisition of interests, in any form whatsoever, in Luxembourg or foreign countries, the acquisition by
purchase, subscription or any other means as well as divestment by sale, swap or any other means of securities, bonds, receivables, bills and
securities of any kind, holding, managing, developing any kind of financial, industrial or commercial company, and providing any kind of assistance,
by loans, guarantees or any other kind to subsidiaries, affiliates or any company belonging to the same group of companies. The Company may
borrow in any way. Generally, the Company can take all measures to control and oversee and carry out all kinds of financial, commercial or industrial
operations relating to real estate or any other assets it deems useful to achieve or develop its corporate purpose.

Registration
Luxembourg Trade and Companies Register no. B 117220




                                                                                                                                                                    11

                                                                                                                                        legal information
      Share capital
      430,200 euros, fully paid up.

      Management – Supervision
      MSREF Turque S.à r.l is managed by two “A” directors – Ms Carolyn Harris and Mr Jan-Dries Mulder, who were appointed to their positions on
      2 June 2006. MSREF Turque is a limited liability corporation under Luxembourg law, whose capital is fully owned, directly or indirectly, by the four
      Morgan Stanley funds registered in the state of Delaware, whose general partner is MSREF V International-GP, LLC, controlled by Morgan Stanley
      under the same conditions as above.



      Liens on registered shares
      The MSREF Turque S.à r.l shareholder’s financial instruments account, in which the Company’s shares are held, was pledged on 20 June 2006 (i.e.
      as at 31 December 2006: 17,922,768 shares, representing 93.6% of the share capital). This pledge was made in favour of Lehmann Brothers
      Aktiengesellschaft and Morgan Stanley Bank International Limited. The terms for releasing the pledge are either a release by the creditor benefiting
      from the pledge or the reimbursement of the debt.



      Main changes in distribution of capital over the last three years
      • On 15 December 2003, pursuant to a share sale and purchase agreement, the shareholders of Zukunft Anlangen SA sold 50% of the shares of
      Zukunft Anlagen SA to Mr Jérôme Lesaffre and 50% to Mr Alain Floch. Zukunft Anlagen SA owned 154,760 of the Company’s shares. Zukunft
      Anlagen SA changed its company name to become FL Participations.
      This sale resulted in a transfer of capital and voting rights, in application of articles 5-5-3 and 5-3-2 b) of the general regulations of the Financial
      Markets Council, a simplified public takeover bid(2) was launched by FL Participations for the period between 16 June 2004 and 29 June 2004. At
      the end of the takeover bid, FL Participations owned 678,968 Company shares, representing 62.64% of the capital and 62.60% of the voting rights
      respectively.

      • On 15 November 2004, a capital increase of the Company was performed by issuing an allocation without consideration of share warrants(3)
      to its shareholders.
      On 11 January 2005, the board of directors of the Company recorded the exercise of 698,409 subscription share warrants, leading to the creation
      of 465,606 new shares, at a unit price of 17.50 euros (i.e. 15 euros face value and a 2.50 euros issue premium). The centraliser for the exercise
      of the share warrants issued its certificate on 29 December 2004. The share warrants allocated without consideration to the shareholders on
      15 November 2004 could be exercised between 15 November and 17 December 2004 inclusive.

      • On 30 March 2005, the 670,221 shares owned by FL Participations, the 190,080 shares owned by Saint Paul SA and the 188,640 shares owned
      by Tschingel SA were sold to MSREF Grillet BV.
      In a letter dated 5 April 2005 sent to AMF, the French Financial Markets Authority, MSREF Grillet BV declared that on 30 March 2005 it had exceeded
      the 5%, 10%, 20%, one third, 50% and two thirds ownership thresholds of the capital and voting rights in Mines de la Lucette, and that it owned
      1,048,941 shares in the Company, representing 67.69% of the share capital and 67.68% of the voting rights.
      In letters dated 4 April 2005 sent to the AMF, FL Participations declared that on 30 March 2005 it had dropped below the one third, 20%, 10% and
      5% thresholds of the ownership capital and voting rights in the Company, and no longer owned any Company shares, Tschingel SA declared that
      on 30 March 2005 it had dropped below the 10% and 5% ownership thresholds of the capital and voting rights in the Company, and no longer
      owned any Company shares, and Saint Paul SA declared that on 30 March 2005 it had dropped below the 10% and 5% ownership thresholds of
      the capital and voting rights in the Company and no longer owned any Company shares.
      After this sale, pursuant to the AMF’s general regulations, MSREF Grillet BV initiated a simplified public takeover bid for the Company’s shares at
      the price of 21 euros per share. This operation(4) took place from 3 June 2005 to 16 June 2005 inclusive. At the end of the offer period, MSREF
      Grillet BV had acquired 138,397 Company shares and owned 76.6% of the capital and voting rights in the Company. In a press release dated 18
      August 2005, MSREF Grillet BV also announced that it was reserving the right to buy more shares on the market to reach the 80% ownership
      threshold of capital and voting rights in the Company.

      • On 3 April 2006 a capital increase of the Company was carried out following the transfer of a portfolio of ten warehouses by Immobilière Groupe
      Casino and its subsidiary SCI de l’Océan. In a letter dated 6 April 2006, received on the same day, the Dutch company MSREF (Morgan Stanley
      Real Estate Funds) International Holdings Coöperatief, UA, controlled by Morgan Stanley(5) declared that on 3 April 2006 through its 100%-owned
      subsidiary MSREF Grillet BV, it had indirectly dropped below the two thirds, 50%, one third, 25% ownership thresholds of the capital and voting
      rights in the Company and then owned indirectly 1,188,338 shares in the Company representing the same number of voting rights, i.e. 21.74% of
      the existing capital and voting rights(6).


      (2) Approval no. 04-596 by the Financial Markets Authority dated 14 June 2004.
      (3) Approval no. 04-874 by the AMF dated 8 November 2004.
      (4) Approval no. 05-486 by the AMF dated 31 May 2005.
      (5) Morgan Stanley acting in its capacity as administrator of the MSREF funds owned by Morgan Stanley and private, institutional or pension fund investors.
      (6) Based on share capital of 5,466,168 shares representing 5,466,375 voting rights.




12
COMPAGNIE
LA
LUCETTE
In the same letter, MSREF International Holdings Coöperatief, UA, declared that on 3 April 2006, through its 100% owned subsidiary MSREF Grillet,
BV, it had indirectly exceeded the 25%, one third, 50%, two thirds and 90% ownership thresholds of the capital and voting rights in the Company
and then indirectly owned 5,105,003 of the shares in the Company representing the same number of voting rights, i.e. 93.39% of the existing capital
and voting rights, after the acquisition of all the 3,916,665 new shares issued by the Company to the benefit of Immobilière Groupe Casino and its
subsidiary SCI de l’Océan to pay for the contribution made by these companies.
Exceeding the one third ownership threshold of the capital and voting rights in the Company by MSREF International Holdings Coöperatief, UA,
resulted in an exemption from the obligation to file a proposal for a public takeover bid(7).
In a letter dated 7 April 2006, received on the same day, Immobilière Groupe Casino and its subsidiary SCI de l’Océan, controlled by Casino,
Guichard-Perrachon, a limited liability company, declared after a transfer of a portfolio of ten warehouses on 3 April 2006, they had exceeded the
5%, 10%, 15%, 20%, 25%, one third, 50% and two thirds ownership thresholds in the capital and voting rights of the Company and then owned
3,916,665 shares in the Company, representing the same number of voting rights, i.e. 71.65% of the capital and voting rights(8).
In the same letter, Immobilière Groupe Casino stated that after the sale of all the 3,916,665 new shares issued by the Company on 3 April 2006 to
MSREF Grillet BV, it had dropped below the two thirds, 50%, one third, 25%, 20%, 15%, 10% and 5% ownership thresholds of the capital and
voting rights and no longer owned any Company shares.
In the same letter, a declaration of intent was made, by which Immobllière Groupe Casino and its subsidiary SCI de l’Océan stated that they did
not intend to acquire control of the Company or to ask to be appointed board members of the Company.
Exceeding the one third ownership threshold of the capital and voting rights in Mines de la Lucette by Immobilière Groupe Casino resulted in an
exemption from the obligation to file a proposal for a public takeover bid(9).

• On 12 April 2006, Asset Value Investors Ltd. owned 102,847 shares and declared that on 4 April 2005 it had dropped below the ownership
threshold of 5% of the capital and voting rights after the capital increase of 3 April 2006.

• On 20 June 2006, MSREF Grillet BV sold all the Company shares it owned to MSREF Turque S.à r.l. In a letter dated 22 June 2006, MSREF Grillet
BV declared to the AMF that it had dropped below the 5%, 10%, 15%, 20%, 25%, one third, 50% and two thirds ownership thresholds and no
longer owned any Company shares.
In a letter dated 22 June 2006, MSREF Turque S.à r.l declared to the AMF that it had exceeded the 5%, 10%, 15%, 20%, 25%, one third, 50%,
two thirds and 90% ownership thresholds of the capital and voting rights in the Company.
In the same letter, a declaration of intent was made, by which MSREF Turque S.à r.l asked the AMF for exemption from the obligation to file a public
takeover bid for the Company’s shares, as the sale by MSREF Grillet BV to MSREF Turque S.à r.l was an internal rearrangement of the Company’s
shares between entities within the Morgan Stanley Group. MSREF Turque S.à r.l received exemption from the obligation to file a public takeover
bid(10).

• On 5 July 2006, a cash capital increase was launched for a minimum face value of 204,981,300 euros, by issuing 13,665,420 new shares, with
preferential subscription rights. In addition, an allocation without consideration of 5,466,168 share warrants was granted to existing shareholders(11).
The capital increase with preferential subscription rights was carried out between 5 July and 3 August 2006(12). At the end of the operation on
3 August 2006, the Company recorded the execution of a capital increase of 204,981,300 euros, in cash, by the issue of 13,665,420 new shares.
At the end of this operation, the majority shareholder, MSREF Turque S.à r.l, owned 93.68% of the capital.
On 4 December 2006 and 7 February 2007, by delegation of authorisation by the board of directors, the Chairman and CEO of the Company
reported the exercise of 53,784 share warrants between 6 September and 31 December 2006, and therefore the execution of a capital increase
of 224,100 euros, in cash, by the issue of 14,940 new shares.
There were no other significant changes over the last three years.

Changes due to be made to ownership and exemption from the obligation to file a proposal for a public takeover bid relating to the
Company’s shares
As at the date of this document, no changes are due to be made to the distribution of capital and no exemption from the obligation to file a proposal
for a takeover bid relating to the Company’s shares is due to be requested.




(7) D&I 205C2148 of 13 December 2005 published in the BALO on 16 December 2005.
(8) Based on capital of 5,466,168 shares representing 5,466,375 voting rights.
(9) D&I 205C2148 of 13 December 2005 published in the BALO on 16 December 2005.
(10) D&I 206C1026 of 31 May 2006 published in the BALO on 2 June 2006.
(11) Approval no. 06-245 by the AMF dated 30 June 2006.
(12) Settlement and delivery of new shares.




                                                                                                                                                           13

                                                                                                                                legal information
      Disclosure thresholds
      Pursuant to article L. 233-7 of the French Commercial Code, any individual or legal entity, acting alone or in concert, who exceeds or drops below
      the ownership thresholds of one twentieth, one tenth, three twentieths, one fifth, one quarter, one third, one half, two thirds, eighteen twentieths
      or nineteen twentieths of the capital or voting rights in the Company must report this to the Company as well as to the AMF within five trading
      days.
      Apart from the thresholds provided for in article L. 233-7 of the French Commercial Code, by application of the articles of association, any individual
      or legal entity who owns or may own, either directly or indirectly, a number of shares representing more than 2% of the capital or voting rights in
      the Company must report this fact to the Company, by registered letter with a delivery receipt, within fifteen days of such threshold being crossed
      and state their identity, and if applicable, the identities of the persons acting with them. This same obligation to inform applies each time an addi-
      tional 2% of the capital or voting rights in the Company is acquired, or when the amount owned drops by 2% or any multiple of 2%.
      If the above stipulations are not complied with, the penalties set forth in article L. 233-14 of the French Commercial Code will be applied, provided
      that a request to this effect made by one or more shareholders holding at least 2% of the share capital or voting rights is entered in the minutes of
      the general shareholders’ meeting.



      Statutory distribution of profits (articles 35 and 36 of the articles of association)
      The distributable profit comprises the profit for the financial year minus prior losses and funds placed in reserve(13) by application of the law and
      articles of association, plus any profits carried forward.
      This profit is to be divided among all the shareholders in proportion to the number of shares owned by each of them.
      However, after setting aside the funds placed in reserve by application of the law, the general shareholders’ meeting may, at its own discretion, set
      aside any funds into any optional ordinary or extraordinary reserves, or carry funds forward, and decide to distribute funds taken from the reserves
      available to it, with an explicit indication of the specific reserve accounts from which such funds are taken.
      Apart from a capital decrease, no distribution can be made to the shareholders when the shareholder equity is or would be thereafter, lower than
      the capital plus reserves blocked by law or the articles of association from being distributed. A revaluation difference may not be distributed. It may
      be incorporated in whole or in part into the capital.
      If a balance sheet drawn up during or at the end of the financial year and certified by an statutory auditor shows that the Company, since the end
      of the previous financial year, after setting aside the amortisation funds and provisions required and after deducting any losses from previous years
      and funds to be placed in reserve, by application of the law or the articles of association, has made a profit, advances on dividends may be distrib-
      uted prior to the approval of the accounts for the year. The amount of these advances may not exceed the amount of the profit so defined.
      Dividends may not be claimed back from shareholders unless the distribution was executed in violation of the legal regulations and the Company
      determines that the beneficiaries knew that the distribution was not allowed when it took place or could not have been unaware of it given the
      circumstances. When applicable, reclaim of dividends is barred three years after the issue for payment of these dividends.
      Unclaimed dividends lapse five years after they are issued for payment.




      (13) At least 5% is set aside from the profits for the year, minus any losses from previous years, to create the legal reserve.




14
COMPAGNIE
LA
LUCETTE
4. MANAGEMENT BODIES

Internal regulations of the board of directors
On 19 December 2006, the board of directors adopted its internal regulations and a director’s charter to create an ethical framework governing a
director’s duties, potential conflicts of interest, procedures for multiple appointments, attendance at board meetings and confidentiality.
Apart from the principles contained in the director’s charter, the internal regulations of the board of directors also defines the operating procedures
for the board of directors, the rules for paying directors’ fees to directors based on their frequency of attendance (up to the total amount of directors’
fees approved by the general shareholders’meeting), and sets limits on the authorisation of the CEO.



Other bodies
On 19 December 2006, the board of directors decided to create committees from within its membership to facilitate the operations of the Board
and provide effective support to prepare for its decisions.

THE INVESTMENT COMMITTEE
On 19 December 2006, the board of directors decided to replace the Management Committee by the Investment Committee, with a more focused
mandate and fewer members.
The task of the Investment Committee, created by a board decision on 19 December 2006, is to:
• review the investment and divestment strategy, and ensure that any planned acquisitions and sales are aligned with this strategy;
• issue a favourable or unfavourable opinion, which is non-binding, on any proposal submitted to it;
• if applicable, to present a report to the Board on any investment proposal submitted to it, which it has examined and for which the Investment
Committee has issued an opinion, whatever the opinion may be.
The Investment Committee is responsible for (i) issuing an advance non-binding opinion on investment or divestment proposals falling within the
scope of the CEO’s decision-making authorisation, and (ii) issuing an advance non-binding opinion on investment and divestment proposals, whatever
the operation planned, the kind of financing or changes to business plans approved previously by the Board, falling within the exclusive scope of
the decision-making authorisation of the Board.
The members of the Investment Committee are Messrs Stéphane Theuriau, Chairman & CEO and also Chairman of the Investment Committee,
Adrien Blanc, permanent representative of a corporate board Member, Pascal Duhamel, director, Thomas Guyot, director of acquisitions at one of
the Company’s subsidiaries, Éric Pinon, chief financial officer.

AUDIT COMMITTEE
The Audit Committee was created by the board on 19 December 2006 and its role is to provide assistance to the Board in relation to examining
and drawing up the annual and half-yearly accounts for the Company and its subsidiaries.
For this purpose, the Audit Committee has the power to examine the annual and half-yearly financial statements for the Company and the Group
and the associated reports before they are submitted to the Board, to interview particular employees as well as the statutory auditors and any
external consultants that it deems necessary.
The Audit Committee may also examine and formulate an opinion on the candidates for statutory auditors as well as all the relationships they have
with the Company and/or the Group and on the requested fees.
More generally, the Audit Committee has the power to ensure that the Company and/or the Group have the appropriate means to prevent risks and
irregularities in the management of the Company’s and Group’s affairs.
The members of the Audit Committee are Messrs Adrien Blanc, permanent representative of a corporate board member, Éric Pinon, chief financial
officer, and Francis Berthomier, a director deemed independent by the Board, although this status does not fit the criteria for an independent director
generally accepted in corporate governance. Mr. Francis Berthomier is also Chairman of the Audit Committee.




                                                                                                                                                             15

                                                                                                                                  legal information
      Board members’ appointments
      Mr Stéphane Theuriau
      Chairman & CEO
      Date of appointment: 3 April 2006 (director) – 6 September 2006 (Chairman & CEO)
      Term of appointment ends: general shareholders’ meeting called to approve the accounts for the 2008 financial year.
      Business address: Mines de la Lucette – 7, rue Scribe – 75009 Paris

      Biography
      A graduate of the Lyon School of Management, in 1998 Mr Theuriau set up and headed the Paris office of the Morgan Stanley. As the “Head of
      Morgan Stanley Real Estate Funds” France, he made real estate investments of over 2.5 billion euros, set up partnerships with Foncière des Régions
      and organised the acquisition of interests in Altarea and Korian. Since 2003, as “Head of Investing Europe” at Morgan Stanley in London, managing
      director, Mr. Theuriau has been responsible for investments worth over 30 billion euros in Germany, Great Britain, Spain and France. He was appointed
      a director of the Company at the general shareholders’ meeting of 3 April 2006 and Chairman of the Board and CEO of the Company at the Board
      meeting of 6 September 2006.

      Other appointments and positions held in 2006
      • Chairman of the following companies:
      M2L Gestion, SAS MILU Investissements

      • Manager of the following companies:
      Sarl Landes,                                                         SCI Volnay,
      SCI Gascogne,                                                        SCI Vosne,
      Sarl Breton,                                                         SCI Mondotte,
      SCI Savigny,                                                         Sarl Libourne,
      Sarl Garonne,                                                        SCI 21,
      Sarl Odet,                                                           SCI Chinon,
      SCI Dordogne,                                                        SNC Saint-Ouen Évry,
      SCI Loire,                                                           SCI Saint-Ouen Biron,
      SCI Seine,                                                           SCI Évry Mozart,
      SCI Chambolle,                                                       SCI Évry Européen,
      SCI Chassagne,                                                       SNC Trois Fontanot,
      SCI Chorey,                                                          SCI Charenton de Gaulle,
      SCI Conti,                                                           SCI Nanterre Étoile Park,
      SCI Morey,                                                           SCI Antony Renaissance.

      Other appointments and positions held in foreign countries in 2006
      Germany:
      • Director of DIC Asset

      Mr Pascal Duhamel
      Director
      Date of appointment: 27 June 2006
      Term of appointment ends: general shareholders’ meeting called to approve the accounts for the 2011 financial year.
      Business address: Morgan Stanley – 61, rue de Monceau – 75008 Paris

      Biography
      A 1985 graduate of the HEC Business School in Paris, Mr. Pascal Duhamel joined Morgan Stanley in 1998. He is currently managing director in the
      Real Estate, Investment Banking division in Paris where he has particular responsibility for real estate investment funds in France, Spain and Belgium.
      Mr. Duhamel is also responsible for managing Morgan Stanley’s Core funds in Europe. In this capacity, he is chief operating officer of the Eurozone
      Office Fund (a Luxembourg mutual fund) and is Head of Morgan Stanley KAG (a real estate management company located in Frankfurt). Mr Duhamel
      acquired extensive, varied experience in real estate at the Bouygues group. At Archon, a Goldman Sachs subsidiary, he led the team responsible
      for development operations.
      Mr Duhamel’s Board appointment was renewed for a six-year term at the General shareholders’ meeting of 27 June 2006. Mr. Duhamel resigned
      from his positions as Chairman of the Board and CEO at the Board meeting of 6 September 2006, but remains as a director of the Company.

      Other appointments and positions held in France on 31 December 2006
      • Director of the following companies: Altarea, Ogic

      • Manager of the following companies:
      SNC Late,                                                            ZEUS Sarl,
      Akama Sarl,                                                          ZEUS Paris Bercy Sarl,
      SNC Cortone,                                                         MSGV Sarl.
      SNC Latécoère,




16
COMPAGNIE
LA
LUCETTE
• Joint manager of TEPIA

• Chairman of the following companies:
SNC Caudron,
ZEUS 1 SAS,
ZEUS 4 SAS,
ZEUS 7 SAS.
Morgan Stanley Properties France

• Board member of Icade.

Other appointments and positions held in foreign countries on 31 December 2006

Luxembourg:
• Director of the following companies:
MSEOF Finance Sarl,
MSEOF Holding Sarl,
MSEOF Manager Sarl

Italy:
• Director of Core One SRL

Spain:
• Member of the Board of Grupo Lar

• director of the following companies:
Desarollos Lar Sol MS, SL,
Lar Sol MS, SL,
Puente Genil Retail Assets, SL,
Navalmoral Retail Assets, SL,
Puertollano Retail Assets, SL.

Mr Francis Berthomier
Director
Date of appointment: 15 June 2005
Term of appointment ends: general shareholders’ meeting called to approve the accounts for the 2006 financial year.
Business address: LCH Clearnet – Le Centorial – 18, rue du 4-Septembre – 75008 Paris

Biography
Mr Berthomier is 39 years old and a graduate of the Amiens Graduate Business School, and holds a Diploma in Advanced Accounting Studies and
Finance. After seven years as a statutory auditor with PricewaterhouseCoopers in Paris and then in London, he joined Morgan Stanley in 1998 as
director of Finance for France and then for the whole of continental Europe. Since September 2005, he has been the director of Finance for the LCH.
Clearnet Group, where he is also a member of the Management Committee.

Other appointments and positions held in 2006
• Director of LCH. Clearnet Group Limited and LCH. Clearnet PLP Limited

Mr Robert Falls
Director
Date of appointment: 15 June 2005
Term of appointment ends: general shareholders’ meeting called to approve the accounts for the 2007 financial year.
Business address: Morgan Stanley – 25, Cabot Square – Canary Wharf – Floor 05 – London E14 4QA

Biography
Mr Falls holds the position of executive director of Morgan Stanley and co-Head of Asset Management for Europe in London for Morgan Stanley’s
European Real Estate Principal Investing group. Before joining Morgan Stanley in 2002, Mr Falls was the Marketing director of the Sovereign Land
real estate company, a joint venture with CSFB. He was also director of the Proprietary Principal Transactions Group at CSFB. Previously, at Erste
Bank, Mr Falls managed senior and mezzanine loan operations for seven years. He is a graduate in modern languages from Fitzwilliam College
Cambridge University.

Other appointments and positions held in France on 31 December 2006
• Director of the following companies:
Carlton Danube Cannes SNC,                                 SCH Résidence (France) SNC,
MSREF Hotel Danube I SAS,                                  Société des Hôtels réunis SAS
MSREF Hotel Danube II SAS,




                                                                                                                                                      17

                                                                                                                            legal information
      Other appointments and positions held in foreign countries on 31 December 2006

      Austria:
      • Director of the following companies:
      Danube Hotel Betriebsgesellschaft GmbH,
      MSREF Danube Erste Hotel-Holding GmbH,
      MSREF Danube Zweite Hotel-Holding GmbH

      Italy:
      • Director of Dellaville Srl.

      United States, Delaware:
      • Chairman of the Board of the following companies:
      Drake Circus GP LLC,
      Elizabeth House GP LLC
      • Director of the following companies:
      MSQ Co-Investment Partnership IV LP,
      MSQ GP, LLC

      England:
      • Director of the following companies:
      2-6 Eaton Gate Ltd,                                        Executive Offices (London) Ltd,
      53 Davies Street Ltd,                                      First Serviced Offices GP Ltd,
      Argyll Business Centres Holdings Ltd,                      First Serviced Offices Ltd,
      Argyll Business Centres Ltd,                               Industrious Asset Management UK Ltd,
      Business Centers Ltd,                                      Kendor Ltd,
      Business Centres Director Ltd,                             Leadenhall Court (GP) Ltd,
      Business Centres London Ltd,                               Leonora Estates (Plymouth) Ltd,
      Business Centres Secretary Ltd,                            MSREF (East India UK II) Ltd,
      Canary Wharf Group Plc,                                    MSREF (East India UK) Ltd,
      Central Court Ltd,                                         MSREF (Leadenhall Court UK) Ltd,
      Chambercroft Ltd,                                          MSREF (UK) Ltd,
      Chamberflame Ltd,                                          MSREF (UK Mezzco III) Ltd,
      Corpnex Acquisitions Ltd,                                  MSREF (UK Mezzco II) Ltd,
      Corpnex Ltd,                                               MSREF (UK Mezzco I) Ltd,
      Drake Property Holdings Ltd,                               MSREF (Welbeck Street UK) Ltd,
      Drake Property Nominee (No. 1) Ltd,                        Nexus Cornhill Ltd,
      Drake Property Nominee (No. 2) Ltd,                        Officehound Ltd,
      East India Dock (GP) Ltd,                                  Omega Land Ltd,
      Elizabeth Property Holdings Ltd,                           One Cornhill Ltd,
      Elizabeth Property Nominee (No. 1) Ltd,                    Palladia Ltd,
      Elizabeth Property Nominee (No. 2) Ltd,                    Rangeflat Ltd,
      Elizabeth Property Nominee (No. 3) Ltd,                    Serviced Offices Ltd,
      Elizabeth Property Nominee (No. 4) Ltd,                    The Welbeck Street Partnership,
      EOG Business Services Ltd,                                 Welbeck Street (GP) Ltd,
      EOG (Lombard Street) Ltd,                                  16 OQS Limited,
      EOG Serviced Offices Ltd,                                  ASK Investments Ltd,
      EOG (UK) Ltd,                                              Aurora (General Partner) 1 Ltd
      EOG (Management) Ltd,
      EOG (Wyvols Court) Ltd,
      Executive Offices Group Ltd,
      Executive Offices Ltd,

      Jersey:
      • Director of the following companies:
      Alban Gate Estates II Ltd,                                 Elizabeth Investments (No. 2) Ltd,
      Alban Gate Estates I Ltd,                                  Elizabeth Investments (No. 3) Ltd,
      Appold (Jersey) Ltd,                                       Elizabeth Investments (No. 4) Ltd,
      Drake Circus Investments (No. 1) Ltd,                      Fontville Ltd,
      Drake Circus Investments (No. 2) Ltd,                      Garville Ltd,
      Drake Circus Investments (No. 3) Ltd,                      Giraffe Ltd Partnership,
      Drake Circus Investments (No. 4) Ltd,                      Mezzco (Jersey) III Ltd,
      Drake Trsutee Ltd,                                         Mezzco (Jersey) II Ltd,
      Elizabeth Investments (No. 1) Ltd,                         Mezzco (Jersey) I Ltd,


18
COMPAGNIE
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LUCETTE
MSREF   (EIQ) IV Ltd,                                            MSREF (Jersey) Ltd,
MSREF   (EIQ) III Ltd,                                           MSREF (Welbeck) II Ltd,
MSREF   (EIQ) II Ltd,                                            MSREF (Welbeck) I Ltd,
MSREF   (EIQ) I Ltd,                                             MSREF (Welbeck) Ltd,
MSREF   (EIQ) Ltd,                                               Omega Land Nominees Ltd,
MSREF   (Jersey) III Ltd,                                        Waterloo Trustee Ltd,
MSREF   (Jersey) II Ltd,                                         Noble Holdings Ltd,
MSREF   (Jersey) I Ltd,                                          MSREF VI Aurora Ltd

Madeira:
• Director of the following companies:
Seea – Leea – Serviços de Consultadoria Económica e Comercial Lda,
Towzica – Comercio, Serviços de Consultadoria e Investimentos Lda

Spain:
• Director of the following companies:
Navalmoral Retail Assets SL,                                     Puertollano Retail Assets, SL,
Puente Genil Retail Assets SL,                                   Hotelera el Carmen SL

Sweden:
• Director of MSREF V Investments AB

Hungary:
• Director of the following companies:
Kairos Szalloda Kft,
MSREF Danube Hotel Kft

Germany:
• Director of the following companies:
Danube Holding (Germany) GmbH,                                   Danube Verwaltung GmbH,
Danube Holding GmbH & Co. KG,                                    Frankfurt Danube Hotels GmbH
Danube Hotel Betriebsgesellschaft GmbH,

The Netherlands:
• Director of the following companies:
68 Brook Street,                                                 MSREF VI Kairos BV,
First Serviced Offices Holdings BV,                              MSREF VI Danube BV,
First Serviced Offices Real Estate Holdings BV,                  MSREF Lydgate BV,
Ifanco Consultancy BV,                                           Cascata BV,
MSREF V Galileo BV,                                              BV Amstel Hotel Maatschappij,
MSREF V Tulip BV,                                                BHR Overseas (Europe) BV,
MSREF V Saturnus BV,                                             Omega Land BV,
MSREF V Rooster BV,                                              Omega Land Holding II BV,
MSREF V Pluto BV,                                                Omega Land Holding I BV

MSREF Turque S.à r.l
Director
Type of company: limited liability corporation under Luxembourg law
Share capital: 12,500 euros
Registered office: 9, rue Schiller – L-2519 Luxembourg
Registration no. B117220
Date of appointment: 27 June 2006
Term of appointment ends: general shareholders’ meeting called to approve the accounts for the 2006 financial year.

Permanent representative: Mr Adrien Blanc
Chief position outside the Company held by Mr Adrien Blanc: vice-president of Morgan Stanley Properties France

Other appointments and positions held in France on 31 December 2006 by Mr Adrien Blanc:
• Director of the following companies:
Altarea,                                                   SNC Foncière Palmer,
Chips Holding Sarl,                                        SNC Palmer Plage,
Chips Plage Sarl,                                          SNC Palmer Transactions,
Financière Palmer Sarl,                                    Suren SA




                                                                                                                                     19

                                                                                                                      legal information
      Other appointments and positions held in foreign countries on 31 December 2006 by Mr Adrien Blanc

      Jersey:
      • Director of the following companies:
      Industrious Holdings, Ltd,                                         Industrious Warehousing Ltd,
      Industrious Guarantee Company Ltd,                                 Pintscripe Ltd,
      Industrious MTL Security Ltd,                                      Garville Ltd

      United States:
      • Director of the following companies:
      MSQ Co-Investment Partnership IV, LP,                               MSREF V Green Investments GP LLC.
      MSQ GP, LLC,

      The Netherlands:
      • Director of the following companies:
      68 Brooke Street BV,                                               78 Fenchurch Street BV,
      103 Colmore Row BV,                                                8 Park Row BV,
      103 Colmore Row (2) BV,                                            8 Park Row (2) BV,
      11 Angel court BV,                                                 Cascata BV,
      130 Newington Butts (2) BV,                                        First Serviced Offices Holdings BV,
      130 Newington Butts BV,                                            First Serviced Offices Real Estate Holdings BV,
      1 Aldgate Union Retail BV,                                         Ifanco Consultancy BV,
      1 Aldgate (2) Union Retail BV,                                     MSREF V Galileo BV,
      1 Finsbury Square BV,                                              MSREF V Pluto BV,
      1 Finsbury Square (2) BV,                                          MSREF V Saturnus BV,
      1 Sandyford BV,                                                    MSREF V Tulip BV,
      22 Queen Square BV,                                                Goodmans Fields I BV,
      2 Aldgate Union BV,                                                Goodmans Fields II BV,
      2 Aldgate Union (2) BV,                                            Goodmans Fields II (2) BV,
      34 Henrietta Street BV,                                            Drapers Gardens BV,
      34 Henrietta Street (2) BV,                                        Drapers Gardens (2) BV,
      41 Lothbury BV,                                                    Edridge Road BV,
      42 Leicester Square BV,                                            MSREF V Rooster BV,
      42 Leicester Square (2) BV,                                        MSREF V Emerald BV,
      42 St Andrew’s Square BV,                                          Redland House BV,
      50 West Register Street BV,                                        St James House BV,
      67 Lombard Street BV,                                              St James (2) BV
      67 Lombard Street (2) BV,

      Over the last five years, as far as the Company is aware, no member of the board of directors or management of the Company:
      • has been condemned for fraud or been charged with or been issued with an official public sanction by legal or regulatory authorities;
      • has been involved in a bankruptcy, receivership or liquidation as a manager or company officer;
      • has been prohibited from acting as a member of a board of directors, management board or supervisory board or taking part in the management
      of a company.



      Conflicts of interest for members of the Board
      As far as the Company is aware, there are no potential conflicts of interest between the duties of the members of the board of directors towards
      the Company and their private interests or other duties.
      Under the terms of the director’s charter, which forms part of the internal regulations of the Board, a Board member must inform the Board of any
      situation where there is a conflict of interest, even if only potential, and must refrain from taking part in the voting on any proposals before the
      Board where such a conflict of interest could exist.
      There is no arrangement or agreement reached between the Company’s majority shareholders, clients, suppliers or others by virtue of which a
      Board member was appointed.



      Directors’ interests in the Company’s capital
      OPERATIONS BY MEMBERS OF THE BOARD OR SENIOR EXECUTIVES
      Operations performed by members of the Board or Senior Executives must be authorised by the board of directors in advance and must be included
      in a special report by the statutory auditors.




20
COMPAGNIE
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SERVICE CONTRACTS BETWEEN MEMBERS OF THE BOARD AND THE COMPANY OR ONE OF ITS SUBSIDIARIES PROVIDING
FOR BENEFITS IN EXCHANGE FOR SERVICES
There are no contracts of this kind between members of the Board and the Company or any of its subsidiaries.

COMPENSATION AND BENEFITS
Compensation and benefits paid to the members of the Board are listed in the management report in section 5 of this registration document.

RETIREMENT SCHEME
The Company currently has no retirement scheme for executives.

NUMBER OF MEETINGS OF THE BOARD AND BOARD COMMITTEES IN 2006
The board of directors met 13 times in the 2006 financial year.
The average attendance rate for the members of board in 2006 was 79%.
The Investment Committee and Audit Committee, created by the Board on 19 December 2006, were unable to hold their first meetings prior to
31 December 2006.



Declaration on corporate governance
The Company’s intention is to conduct its actions and operations of its management bodies in accordance with best practices for corporate governance,
and in particular to apply the recommendations in the report by the French Association of Private Enterprises (AFEP) and the French Enterprise
Movement (MEDEF) issued in October 2003, in so far as these recommendations are compliant with the Company’s size and organisational structure.



Benefits granted to Group employees
STOCK SUBSCRIPTION OR STOCK PURCHASE OPTIONS
In 2006, the Company set up a stock subscription or stock purchase options plan for salaried employees of related companies in application of the
provisions of article L. 225-180-1 paragraph 1 of the French Commercial Code.
The term of the option plan is six years, and the beneficiaries are allowed to exercise fractions of the options they receive, with restrictions on sales.
However, the options may be exercised early if there is a change in control, on the anniversary date of such a change in control or the sixth anniver-
sary of the allocation of the options.
The plan set up in 2006 for salaried employees of related companies covered three Group employees who are not company officers or members
of the Board. The subscription price was fixed at 29.02.

ALLOCATION OF SHARES WITHOUT CONSIDERATION
On 27 April 2006, by virtue of the authorisation approved by the combined general shareholders’ meeting of 3 April 2006, the board of directors
approved the allocation of 18,850 shares granted without consideration to three beneficiaries. These beneficiaries are Group employees who are
not company officers or members of the Board.
The acquisition period after which the allocation of the shares to the beneficiaries will be final was fixed at two years.
The lock-in period for the shares so allocated is fixed at two years.
Stock subscription or stock purchase options
Date of the shareholders’ meeting                                                                                                           3 April 2006
Date of the Board meeting                                                                                                                21 August 2006
Starting date for exercise                                                                                                               21 August 2008
Expiry date                                                                                                                              21 August 2012
Number of options granted                                                                                                                       55,660
Parity for exercising options                                                                                                                          1
Subscription or purchase price                                                                                                                  €29.02
Number of shares subscribed or purchased                                                                                                               0
Number of options which may be exercised                                                                                                               0
Allocation of shares granted without consideration
Date of the shareholders’ meeting                                                                                                           3 April 2006
Date of the Board meeting                                                                                                                  27 April 2006
Date of final allocation                                                                                                                   27 April 2008
End of lock-in period                                                                                                                      27 April 2010
Number of shares granted without consideration allocated                                                                                          18,850




                                                                                                                                                             21

                                                                                                                                  legal information
      MANAGEMENT’S DISCUSSION
      AND ANALYSIS
      Financial year ended 31 December 2006




                CONTENTS
                   23    1. Activities and consolidated results           35   4. Corporate result of the parent company
                   23    Significant events during the year               35   Key figures
                   23    Acquisitions
                   23    Disposals
                                                                          36   List of subsidiaries and equity interests
                   24    Capital increases associated with acquisitions   38   Distribution and monitoring
                   24    Change in Shareholder                                 of distribution obligations
                   24    Capital operations
                   24    Change of Chairman & CEO                         38   Information about the breakdown capital
                   24    Development projects                             38   Share capital and changes over the year
                                                                          39   Disclosure thresholds
                   25    Accounting standards – Change in methods         39   Securities giving access to capital
                         and presentation                                 40   Liquidity contract, share buyback program
                                                                          40      Liquidity contract
                   25    Key figures
                                                                          40      Share buyback program
                   25    Analysis and comments on business
                         and results by sector                            40   5. Human resources
                   25    Analysis and comments on business                40   Employment
                   26    Analysis and comments on results                 40   Group payroll as at 31 December 2006
                   26       Operating profit                              40   Work organisation, career and skills management
                   29       Financial result
                   30       Net results                                   41   Compensation policy
                   30       Recurring cash flow                           41   Simplified organisation chart
                   31    2. Property and net asset value                  42   6. Company officers
                   31    Property                                         42   7. Social and environmental consequences
                   31    Changes in property                                   of the Group’s business
                   31    Property valuation
                   31       Office properties                             43   8. Insurance – Coverage for risks
                   32       Warehouse properties
                                                                          43   9. Recent events
                   32       Other properties
                                                                          43   10. Future prospects
                   32    Net asset value (NAV)
                   32    Calculation method for NAV
                   32       Consolidated shareholder equity
                   32       Mark-to-market debt
                   33    Calculation table
                   33       Net asset value at replacement cost
                   33       Net asset value at liquidation

                   33    3. Financial resources
                   33    Debt structure
                   34    Debt breakdown
                   34    Debt maturity
                   34    Average cost of debt

                   35    Financial structure
                   35    Financial structure ratios and bank covenants
                   35       Risk management – Hedging policy




22
COMPAGNIE
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1. Activities and consolidated results




1.1 Significant events during the year
1.1.1 ACQUISITIONS
Acquisitions carried out by the Mines de la Lucette Group during the 2006 financial year totalled 1.8 billion euros. The acquisitions took place in
two phases: the first phase was the creation of a very high quality set of assets generating secure cash flows, which was subsequently followed
up by the purchase of assets with significant potential for increased value, particularly due to the current upswing in the rental cycle.

Acquisition of a portfolio of five office properties from the KanAm Investment Fund
In March 2006, the Group carried out a large scale operation with the acquisition of five high quality office properties at a cost of 1,181 million
euros located in the Paris Central Business District (Quartier Central des Affaires), La Défense and Western Paris.
Taken together, all these properties, which have a total area of 112,900 sqm, generate an annualised rent of 58.8 million euros as at 31 December
2006. These properties are rented to high end tenants.

Acquisition of warehouses from the Casino group
On 3 April 2006, the Group purchased thirteen warehouses at a cost of 204 million euros from the Casino group which has remained the tenant.
These properties, which are located in the provinces, cover a total area of 416,400 sqm.
This operation has given the Group a high end tenant and leases with a minimum term of nine years for 10 of the 13 warehouses.

Acquisition of a warehouse in Longvic (Côte-d’Or region)
On 9 May 2006, the Group spent 6 million euros to buy all the shares in the SCI 21 company relating to a warehouse near Dijon rented for a fixed
period of six years to Transalliance, a transport logistics company. The agreed value of the underlying assets on the date of acquisition was 16 million
euros. This property, with an area of 24,000 sqm, generates an annualised rent of 1.4 million euros as at 31 December 2006.

Acquisition of the Colisée building in la Défense
On 31 July 2006, the Group bought the Colisée building for 196 million euros.
The Colisée is a multi-tenant building used for offices with an area of approximately 24,900 sqm and generates an annualised rent of 12.6 million
euros. This property is rented to very reputable tenants, including Moët Hennessy, ACE and Regus.

Acquisition of a portfolio of eight office buildings in the Île-de-France region
On 29 September 2006, the Group spent 46 million euros to buy all the shares in SNC Saint-Ouen Évry and SNC Trois Fontanot from the Westbrook
Partners fund, which owns eight office buildings in the Île-de-France region and Western Paris. The agreed value of the underlying properties on
the acquisition date was 172 million euros.
This portfolio of properties has a high rent potential, due to its high vacancy rate (35%). These buildings, with an area of about 72,000 sqm, generate
an annualised rent of 8.9 million euros as at 31 December 2006.

Acquisition of two office buildings located in Paris West
On 22 November 2006, the Group acquired two office buildings located in Neuilly-sur-Seine from the Firmenich group at a cost of 27 million euros.
These buildings, with an area of about 4,000 sqm, generate an annualised rent of 1.8 million euros.
The tenant will leave at the end of 2007 and this property will then be renovated before being rented again.

1.1.2 DISPOSALS
The vacant warehouse located in Chambéry, belonging to the portfolio of warehouses purchased from the Casino Group on 3 April 2006, was sold
on 11 October 2006 at a price slightly above its 4.8 million euros acquisition price.




                                                                                                                                                           23

                                                                                            management’s discussion and analysis
      1.1.3 CAPITAL INCREASES ASSOCIATED WITH ACQUISITIONS
      Following the asset contribution in April 2006 of 10 warehouses by the Immobilière Groupe Casino and its subsidiary SCI de l’Océan, a capital
      increase of 94 million euros was carried out.

      1.1.4 CHANGE IN SHAREHOLDER
      On 20 June 2006, MSREF Grillet BV sold all its equity interests in Mines de la Lucette to MSREF Turque S.à r.l, i.e. 5,105,033 shares and voting
      rights, representing 93.39% of the capital and voting rights in Mines de la Lucette.

      At the end of the capital operations for the period, MSREF Turque S.à r.l owned 93.61% of the Company’s share capital.

      1.1.5 CAPITAL OPERATIONS
      At the beginning of July 2006, Mines de la Lucette carried out two capital operations:
      – an immediate capital increase of 328 million euros with preferential subscription rights;
      – and a deferred capital increase in the form of an allocation with consideration of share warrants maturing in July 2008.
      The main features of the immediate capital increase with preferential subscription rights carried out in July were:
      • number of shares issued: 13,665,420;
      • issue price for the new shares: 24 euros per new share;
      • amount of capital increase, including the issue premium: 328 million euros.
      The main features of the deferred capital increase in the form of an allocation without consideration of share warrants were:
      • number of share warrants issued: 5,466,168 (18 share warrants giving entitlement to five new shares);
      • issue price for the new shares: 24 euros per new share;
      • maximum amount of increase in shareholders’ equity: 36.4 million euros.
      MSREF Turque S.à r.l stated its intention to exercise all its share warrants.
      As at 31 December 2006, 53,784 share warrants had been exercised, leading to the issue of 14,940 new shares. These operations raised Mines
      de la Lucette’s share capital as at 31 December 2006 to 287,197,920 euros for 19,146,528 shares.

      1.1.6 CHANGE OF CHAIRMAN & CEO
      Mr Stéphane Theuriau was appointed Chairman & CEO by the board of directors of the Company on 6 September 2006, replacing Mr Pascal
      Duhamel, who remains a member of the Board.

      1.1.7 DEVELOPMENT PROJECTS
      The Mines de la Lucette Group has signed promises of sale with conditions precedent to undertake development operations on its own account
      in Paris and in Western Paris. The Group also owns land in Saint-Ouen on which it plans to erect buildings. These operations cover about
      35,000 sqm of office properties and are listed in the table below:
      Project                                                               Area                                                  Provisional delivery date

      Gare de Lyon                                                   7,000 sqm                                                                  Q1 2010
      Clichy                                                        17,500 sqm                                                                  Q2 2009
      Saint-Ouen                                                    10,500 sqm                                                                  Q2 2009
       Total                                                        35,000 sqm

      These operations are subject to the granting of construction permits.
      The total figure for these three operations should amount to 180 million euros and the expected total return from these projects should be between
      6% and 8%.




24
COMPAGNIE
LA
LUCETTE
1.2 Accounting standards – Change in methods and presentation
The Group has drawn up its consolidated accounts using IFRS since 1 January 2005. The accounting methods applied by the Group in its consolidated
accounts for the financial year ended 31 December 2006 are identical to those used in the consolidated accounts for the previous financial year
except for the point described below.
On 1 January 2006, the Group opted to use the fair value method to value investment properties according to IAS 40. Previously, the Group applied
the amortised cost method to record its investment properties according to the procedures provided for by IAS 16.
In addition, to give a better picture of the Group’s business, in 2006 the Group adopted an income statement model which lists charges by
destination instead of by type as they were presented previously.
The effects of this change in method and presentation are detailed in the appendix to the consolidated accounts for 2006.
On 31 December 2006, the Group recorded derivative instruments subscribed at the end of the year according to the cash flow hedging accounting
method provided for by IAS 39.
The Group has changed the presentation of the changes in cash flow statement : it is still drawn up using the indirect method but is now drawn up
based on operating profit and not the net income. For ease of comparison, the changes in cash flow statement have also been restated for 2005.
The consolidation scope includes 32 companies, including the parent company, Mines de la Lucette SA. The subsidiaries are 100% owned and are
consolidated using the global integration method. The list of consolidated companies is given in the appendix to the consolidated accounts.



1.3 Key figures
The Group uses the following three key indicators to measure its performance:
• operating profit represents the Group’s share of net profit, and includes changes in fair value excluded from the financial results and tax charges;
• recurring cash flow is the Group’s share of net profit, adjusted for allowances for depreciation and provisions, changes in fair value, development
costs for abandoned projects, the gains and losses from disposals and the tax charge for the period;
• net asset value at replacement cost is determined by adding the consolidated shareholder equity (including changes in fair value of properties),
transfer tax and adjustment to mark-to-market of fixed rate debts, because the latter is not included in the balance sheet at fair value.
The detail of the calculation of these key indicators is shown in points 1.4.2 and 2.2.2 of this report.
These three key indicators show the active growth policy conducted by the Mines de la Lucette Group in the course of the 2006 financial year:
• operating profit was 158.4 million euros (including 90.7 million euros of change in fair value) in 2006, compared to 4.6 million euros in 2005, i.e.
15.2 euros per diluted share, compared to 3.0 euros;
• recurring cash flow was 15.6 million euros in 2006, compared to –0.2 million euros in 2005, i.e. 1.5 euro per diluted share compared to –0.1 euro;
• net asset value at replacement cost by diluted share was 36.0 euros as at 31 December 2006, compared to 24.3 euros as at 31 December 2005.



1.4 Analysis and comments on business and results by sector
1.4.1 ANALYSIS AND COMMENTS ON BUSINESS(1)
With a volume of commitments of nearly 23 billion euros, 2006 was a record year for investments in the French corporate real estate market. The
Île-de-France region, with 18.5 billion euros(2) continued the exceptional momentum noted in 2005; it obviously remains attractive, especially to new
investors who were still numerous. There was increased investment in empty properties and some acquisitions completed with no guaranteed tenants.
2006 was marked by sales of significant portfolios and individual properties which goes some way to explaining the new record in activity.
Transactions of more than 200 million euros (15 non-portfolio transactions) totalled nearly 5 billion euros.
The influx of capital into the market and the scarcity of properties compared to the ever-growing number of investors continued to squeeze yields.
In relation to the rental business, the upward trend in rental values noted since mid-2006 continued in the second half of 2006: up by an average
of 4% in the Île-de-France region, by 6% in Paris CBD, and by 8% to 11% in Péri Défense and the Northern Loop.
The increased supply of office properties in 2007 appears to be insufficient to meet user demand which strongly supported new offerings in 2005
and 2006. Of the 650,000 sqm deliverable in 2007, only 373,000 sqm remain to be placed, representing less than six months of sales at the current
pace.
The scarcity of quality offerings has already produced its first effects: high end rental values have gone up with a meteoric rise in the values of
prime transactions: 700 euros per square metre per annum in Paris CBD, from 285 to over 560 euros per square metre per annum for the Western
Crescent, 535 euros per square metre per annum in la Défense.
The upswing in rental values is also occurring in the second-hand properties market: a 5% to 10% increase from 2005 to 2006, depending on the
location. The demand for properties in the Île-de-France region in 2006 represented nearly 2.9 million sqm, which is an increase of 31% compared
to results for 2005.
Paris retains its leading position. The Paris Centre West sector (including the CBD) represents 22% of sales in the Île-de-France region, with 627,200 sqm
placed at the end of 2006. La Défense remains one of the sectors popular with major accounts and we have seen a strong increase in deals in the
2,000 sqm to 5,000 sqm segment in 2006.


(1) Source: CBRE – Market View 4th Quarter 2006/DTZ Research – Trends Note.
(2) Amount for the over 4 million euros investment segment.




                                                                                                                                                             25

                                                                                             management’s discussion and analysis
      In addition, the immediate supply has stabilised at around 2.5 million sqm over the last three quarters, i.e. a vacancy rate of 5.1%, while quality prop-
      erties are tending to get scarcer in the geographical areas most popular with users such as Paris CBD, la Défense or the Western Crescent.
      The Mines de la Lucette Group is one of the most prominent players in the 2006 market with investments totalling 1.8 billion euros. As at
      31 December 2006, the Group owned a portfolio of about 745,700 sqm, generating annualised rents of 106 million euros. This property portfolio
      is concentrated mainly in:
      – the most sought-after business districts in the Île-de-France region, for both occupants and for investors in the Office sector;
      – the various areas of industrial activity for the Warehouse sector.
      The occupancy rate for the properties as at 31 December 2006 has reached a level of 93.8%, with high end tenants, leading companies in very
      diversified business sectors, including L’Oréal, PriceWaterhouseCoopers, AXA RE, Moët Hennessy, Casino, LocaPoste, Transalliance, ING Car
      Lease and Bloomberg etc.

      1.4.2 ANALYSIS AND COMMENTS ON RESULTS
      Bearing in mind the acquisitions carried out during the financial year by the Mines de la Lucette Group, the analysis of the results is presented as
      several levels of sector information.
      The Group now considers the Warehouse sector to be a completely distinct sector and it is, therefore, presented separately, unlike in the previous
      financial year when it was grouped together with the Office sector. The Group’s top level of sector information is broken down into the following categories:
      Offices, Warehouses and Other Properties. The Hotel sector is included in the Other Properties sector.
      A second level of sector information is based on the geographical location of the properties owned. The second level is broken down as follows:
      Paris Central Business District (“CBD”), la Défense, Western Paris, Île-de-France and the Provinces.

      Operating Profit
      The operating profit was 158.4 million euros, including 90.7 million euros from the changes in fair value; it breaks down as follows:
      In thousand euros                           Rental income           %                  Net rents           %                    Operating result          %

      Paris QCA                                          9,135            12                   9,059            12                           24,786            16
      Western Paris                                     28,587            38                  28,401            39                           84,274            53
      La Défense                                        14,192            19                  14,145            19                           11,065             7
      Île-de-France                                      2,326             3                   2,212             3                           11,114             7

       Offices                                          54,241            73                  53,817            73                          131,239            83
      Île-de-France                                        675             0                     331             0                              (305)           0
      Provinces                                         13,947            19                  13,900            19                           13,288             8

       Warehouses                                       14,622            19                  14,231            19                           12,983             8
      Western Paris                                      2,614             4                   2,590             4                           12,274             8
      Regions                                            3,047             4                   3,043             4                             7,908            5

       Other properties                                  5,661             8                   5,632             8                           20,182            13
      Total for the sector                              74,523                                73,680                                        164,404           104
      Total not allocated                                                                                                                     (5,989)          (4)
       Total                                            74,523                                73,680                                        158,415           100

      Average number of shares                     10,106,367                                                                                   €15.67 per share
      Average number of diluted shares             10,440,277                                                                                    €15.17 per share




26
COMPAGNIE
LA
LUCETTE
i. Office sector

                                                                                                                                     Total in thousand euros

Income from office rentals                                                                                                                          54,241
Ground rents paid                                                                                                                                       (85)
Net operating costs                                                                                                                                    (339)
  Non recharged rental expenses                                                                                                                        (113)
  Landlord building expenses                                                                                                                           (225)

Net Rents                                                                                                                                           53,817
Other income from properties
Operating costs                                                                                                                                        (255)
Other income and charges                                                                                                                                 19
Gain and losses from disposal of investment properties
Fair value changes of investment properties                                                                                                         77,659
Operating profit for Office sector                                                                                                                131,239

As at 31 December 2006, net rents totalled 53.8 million euros, which is a major increase compared to 31 December 2005, which is explained by
the acquisition of 16 office buildings. These acquisitions represent 98% of the net Office rents for the 2006 financial year.
The geographical breakdown of net rents is as follows:


   GEOGRAPHICAL SPREAD
   OF NET OFFICE RENTS

                                                   La Défense 26%
                                                                                                             Île-de-France 4%


                                                                                                             Paris CBD 17%
                                                Western Paris 53%




As at 31 December 2006, all the leases in the Office sector represented a cumulative amount of rent for a full year of 83.3 million euros; their maturities
are as follows:

MATURITIES TABLE FOR LEASES IN THE OFFICE SECTOR (in million euros)

Years                                  By lease end date             As a % of the total                By next break option date        As a % of the total

2007                                                  5.8                             7                                     14.3                         17
2008                                                  4.0                             5                                      6.1                          7
2009                                                  2.7                             3                                      9.9                         12
2010                                                  5.1                             6                                      4.2                          5
2011                                                  3.7                             4                                      3.3                          4
2012                                                19.2                             23                                     15.0                         18
2013                                                10.6                             13                                      6.1                          8
2014                                                  4.6                             6                                      0.1                          0
2015                                                  3.3                             4                                      0.0                          0
2016                                                20.9                             25                                     20.9                         25
> 2016                                                3.4                             4                                      3.4                          4
Total                                               83.3*                          100                                      83.3*                      100

* Includes 0.8 million euros of rent for the Group’s head offices.

55% of the rents are secured until the end of 2011 and therefore contribute to the consistency of the Group’s cash flows.

The financial occupancy rate of the Office sector as at 31 December 2006 was 94.1% compared to 93.7% as at 31 December 2005.

Vacancies represent a potential rent of 5.2 million euros, compared to 0.1 million euros on 31 December 2005. The large increase in potential rent
is due to the recent acquisitions in the portfolios of buildings with vacancies thereby offering opportunities to create more value.




                                                                                                                                                               27

                                                                                              management’s discussion and analysis
      ii. Warehouse sector
                                                                                                                                      Total in thousand euros

      Income from Warehouse rentals                                                                                                                  14,622
      Ground rents paid                                                                                                                                 (258)
      Net operating costs                                                                                                                               (133)
        Non recharged rental expenses                                                                                                                   (127)
        Landlord building expenses                                                                                                                         (7)

       Net rents                                                                                                                                     14,231
      Other revenue from properties                                                                                                                   1,628
      Operating costs                                                                                                                                   (797)
      Other income and charges                                                                                                                            15
      Gain and losses from disposal of investment properties                                                                                              74
      Fair value changes of investment properties                                                                                                    (2,168)
       Operating profit for Warehouse sector                                                                                                         12,983

      Net rents as of 31 December 2006 came to 14.2 million euros, i.e. a hefty increase compared to 31 December 2005, which is explained by the
      acquisition of 14 warehouses as part of the trend in divestment of properties. These acquisitions represent 93% of the net Warehouse rents for
      fiscal 2006.
      The net rents break down geographically in the following way:

            GEOGRAPHICAL SPREAD
            OF NET RENTS FOR WAREHOUSES
                                                                                                               Île-de-France 2%




                                                     Provinces 98%




      As at 31 December 2006, all the leases in the Warehouse sector represented a cumulative amount of rent for a full year of 17.3 million euros; their
      maturities are as follows:

      MATURITIES TABLE FOR LEASES IN THE WAREHOUSE SECTOR (in million euros)

      Years                             By lease end date            As a % of the total                  By next break option date       As a % of the total

      2007                                           0.0                              0                                        0.0                         0
      2008                                           0.0                              0                                        0.0                         0
      2009                                           0.0                              0                                        3.8                        22
      2010                                           0.0                              0                                        0.0                         0
      2011                                           0.0                              0                                        0.0                         0
      2012                                           0.0                              0                                        1.5                         9
      2013                                           0.0                              0                                        0.0                         0
      2014                                           0.0                              0                                        0.0                         0
      2015                                          12.6                             73                                       12.0                        69
      2016                                           0.0                              0                                        0.0                         0
      > 2016                                         4.6                             27                                        0.0                         0
       Total                                        17.3                           100                                        17.3                      100

      78% of rents in the Warehouse sector are secured until the end of 2011.
      The financial occupancy rate of the Warehouse sector as at 31 December 2006 was 90.6% compared to 87.1% as at 31 December 2005. The vacancy
      is basically due to the warehouses located in Moreuil and Chilly-Mazarin. The potential rent from these vacant properties comes to 1.8 million euros
      for a total vacant area of 57,800 sqm.




28
COMPAGNIE
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iii. Other properties

The Other Properties sector comprises four hotels and a plot of land as at 31 December 2006. The hotels are not strategic for the Mines de la
Lucette Group, and have therefore been classified in the “Other Properties” category.
The net rents for “Other Properties” totalled 5.6 million euros and break down as follows:
                                                                                                                               Total in thousand euros

Income from Other Properties rentals                                                                                                           5,661
Ground rents paid                                                                                                                                  (2)
Net operating costs                                                                                                                               (27)
  Non recharged rental expenses                                                                                                                     (8)
  Landlord building expenses                                                                                                                      (19)

Net rents                                                                                                                                      5,632
Other income from properties                                                                                                                       18
Operating costs                                                                                                                                  (536)
Other income and charges                                                                                                                            5
Gain and losses from disposal of investment properties                                                                                           (103)
Fair value changes of investment properties                                                                                                   15,166
Operating profit for Other Properties sector                                                                                                  20,182

As at 31 December 2006, all the leases in the Other Properties sector represented a cumulative amount of rent for a full year of 5.8 million euros,
the payments for which are given below:

MATURITIES TABLE FOR LEASES IN THE OTHER PROPERTIES SECTOR (in million euros)

Years                             By lease end date        As a % of the total                     By next break option date       As a % of the total

2007                                           0.0                          0                                           0.0                         0
2008                                           0.0                          0                                           0.0                         0
2009                                           0.0                          0                                           0.0                         0
2010                                           0.0                          0                                           0.0                         0
2011                                           0.0                          0                                           0.0                         0
2012                                           0.0                          0                                           0.0                         0
2013                                           1.4                         25                                           1.4                        25
2014                                           0.0                          0                                           0.0                         0
2015                                           1.7                         29                                           1.7                        29
2016                                           0.0                          0                                           0.0                         0
> 2016                                         2.6                         46                                           2.6                        46
Total                                          5.8                       100                                            5.8                      100


Financial result
The financial result was –51.2 million euros as at 31 December 2006, compared to –1.7 million euros for the previous year.
The financial result for the Mines de la Lucette Group mainly comes from interest on the bank debt and the shareholder’s loan.
During the 2006 financial year, bank loans were taken out with reputable institutions such as Lehman Brothers, Morgan Stanley, HSBC and IXIS.
The interest on the bank loans totalled 46.3 million euros, the interest on the shareholder’s loan was 5.5 million euros and the income from cash
investments was 0.9 million euros.
The loan from the majority shareholder bears interest at the favourable rate of 4.35%.




                                                                                                                                                          29

                                                                                         management’s discussion and analysis
      Net results
      As at December 31 in thousand euros                                      Total                      Offices            Warehouses         Other Properties      Not Allocated

      Rental Income                                                         74,523                     54,241                     14,622                 5,661
      Ground rents paid                                                        (344)                         (85)                   (258)                    (2)
      Net operating costs                                                      (499)                        (339)                   (133)                   (27)
            Non recharged rental expenses                                      (248)                        (113)                   (127)                    (8)
            Landlord building expenses                                         (251)                        (225)                     (7)                   (19)

       Net rents                                                            73,680                     53,817                     14,231                 5,632                  –
      Other income from assets held                                           1,646                            –                   1,628                     18
      Asset management costs                                                 (1,648)                        (230)                   (786)                  (263)             (369)*
      Corporate overhead                                                     (5,353)                           –                       –                      –            (5,353)
      Development expenses                                                     (351)                           –                       –                      –              (351)
      Depreciation of operating assets                                         (482)                         (25)                    (10)                  (273)             (174)

       Administrative expenses                                               (7,835)                       (255)                    (797)                  (536)           (6,247)
      Other income and charges                                                  296                           19                     15                       5              258
      Gain and losses from disposal of investment properties                        (29)                       –                     74                    (103)                –
      Fair value changes of investment properties                           90,657                     77,659                     (2,168)               15,166                  –

       Operating profit                                                    158,415                   131,239                      12,983                20,182             (5,989)

       Financial result                                                     (51,175)                   (38,148)                   (5,662)               (2,786)            (4,579)
      Taxes                                                                  (1,837)                                                                                       (1,837)

       Net profit                                                          105,403                     93,091                      7,321                17,396           (12,405)
      Net profit per share                                                 10.43 €
      Net profit per diluted share                                         10.10 €
      * Including 349 thousand euros in employee costs for the Asset Management division.

      After taking into account deferred taxes of 1.7 million euros and corporate tax of 0.1 million euros, the consolidated net profit after taxes as at
      31 December 2006 was 105.4 million euros, 90.7 million euros of which came from the net balance value adjustments. The fair value of 90.7 million
      euros is due primarily to the appreciation in value of acquisitions.
      The net profit per share was 10.43 euros as at 31 December 2006, compared to 3.13 euros as at 31 December 2005. The net profit per diluted
      share was 10.10 euros as at 31 December 2006, compared to 3.13 euros as at 31 December 2005.

      Recurring cash flow
      The recurring cash flow for the 2006 financial year, compared to the 2005 financial year’ breaks down as follows:
                                                                                                2006                                                         2005
                                                                         Total in              Average              Per share           Total in           Average       Per share
                                                                       thousand                number                (in euros)       thousand             number         (in euros)
                                                                          euros               of shares                                  euros            of shares

      Group result                                                     105,403             10,106,367                  10.43                4,911       1,568,353             3.13
      Amortisation allowance                                                114                                                              128
      Allowance for provisions                                              368                                                               54
      Development costs for abandoned projects                              301                                                              131
      Results from other activities                                         (296)                                                               9
      Other non-recurring income from properties                         (1,628)                                                                –
      Results from disposal of investment properties                          29                                                             (364)
      Fair value changes of investments properties                      (90,657)                                                           (3,013)
      Deferred and current taxes                                          1,837                                                            (2,018)
      Charges for bonus shares and stock options                            122                                                                 –
      Recurring cash flow                                                15,593            10,106,367                   1.54                 (162)      1,568,353            (0.10)
      Diluted recurring cash flow                                        15,593            10,440,277                   1.49                 (162)      1,568,353            (0.10)

      The average number of diluted shares takes the dilution from share warrants and stock options into account using the share buyback method.




30
COMPAGNIE
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2. Property and net asset value

2.1 Property
2.1.1 CHANGES IN PROPERTY
As at 31 December 2006, the properties owned by the Mines de la Lucette Group had a value of 2,126 million euros (taxes included) compared
to 123 million euros (taxes included) as at 31 December 2005.
The sharp increase results from the various acquisitions carried out during the year. In fact the Mines de la Lucette Group acquired 16 office buildings
and 14 warehouses.
As at 31 December 2006, the Mines de la Lucette Group has a portfolio of 43 properties.
The properties are classified as follows:

   DIVISION OF PROPERTY BY TYPE OF PROPERTY, VALUED
   (TAXES INCLUDED) AS AT 31 DECEMBER 2006
                                                                                                           Warehouses 12%

                                                                                                           Other properties 5%


                                                Offices 83%




   GEOGRAPHICAL DIVISION OF PROPERTY, VALUED
   (TAXES INCLUDED) AS AT 31 DECEMBER 2006
                                                                                                           La Défense 22%
                                           Île-de-France 8%


                                                                                                           Provinces 14%


                                         Western Paris 44%                                                 Paris CBD 12%




The following paragraphs detail the valuations performed for each of the various property segments.

2.1.2 PROPERTY VALUATION
The properties owned by the Mines de la Lucette Group were subjected to a half-yearly valuation performed by independent appraisers. As at
31 December 2006, the whole portfolio was valued by CB Richard Ellis ant DTZ Eurexi.

Office properties
The Mines de la Lucette Group’s Office properties were valued at 1.8 billion euros as at 31 December 2006, taxes included.
The geographical distribution is given below:
In million euros                                                                  31/12/2006                 %           31/12/2005                  %

Paris CBD                                                                               249                  14                   0                  0
Western Paris                                                                           885                  50                   5                 38
Île-de-France                                                                           169                  10                   8                 62
La Défense                                                                              466                  26                   0                  0
Total                                                                                 1,770                100                   13                100

The valuation of the office properties was mainly performed by DTZ Eurexi, except for five properties valued by CB Richard Ellis. DTZ Eurexi uses
two methods: the “Discounted Cash flows” method and the yield method. The two methods are applied then the expert performs an arbitrage to
select the most appropriate method for the particular property.




                                                                                                                                                           31

                                                                                               management’s discussion and analysis
      The “Discounted Cash flows” valuation method consists of determining the utility value of a property by actualising the provisional cash flows it is
      likely to generate over a particular period.
      The yield method (or income capitalisation) consists of capitalising an annual income, which could be a fixed rent or potential income (the rental
      value, lease renewal rent), the differences between actual rents and potential income also taking into account loss of income or specific factors for
      each property.

      Warehouse properties
      The Mines de la Lucette Group’s Warehouse properties were valued at 252 million euros (taxes included) as at 31 December 2006.
      The geographical division break down is as follows:
      In million euros                                                                     31/12/2006                   %           31/12/2005                   %

      Île-de-France                                                                                 6                   2                    6                  23
      Provinces                                                                                  246                   98                   20                  77
       Total                                                                                     252                  100                   25                 100

      The whole Warehouse portfolio was valued by CB Richard Ellis using the income capitalisation method, with the result corroborated in terms of value
      per unit of area.
      To do this the following factors were determined:
      – the rental value on the property market;
      – the sale value of the property by capitalising the rental market value in terms of a return likely to interest an investor (this return takes the fixed term
      of the lease into account);
      – the sale value of the property based on the current occupancy;
      – taking into account any over or under rental during the term of the lease;
      – taking into account any loss of value during the work;
      – taking any possible work into account.

      Other properties
      The Other Property assets of the Mines de la Lucette Group were valued at 105 million euros, taxes included, as at 31 December 2006.
      This section of the portfolio mainly comprises four hotels, three of which are in the Provinces and one in Western Paris as shown in the table below:
      In million euros                                                                     31/12/2006                   %           31/12/2005                   %

      Paris West                                                                                   56                  54                   42                  49
      Provinces                                                                                    49                  46                   43                  51
       Total                                                                                     105                  100                   85                 100

      The full portfolio of Other Properties was valued by CB Richard Ellis using the revenue capitalisation method (see above).



      2.2 Net asset value (NAV)
      2.2.1 CALCULATION METHOD FOR NAV
      The net asset value amount was determined by adding the consolidated shareholder equity, which is understood as including the gain or loss of
      fair value, restatements of transfer taxes and adjustment to the mark-to-market of the fixed rate debt.

      Consolidated shareholder equity
      As at 31 December 2006, the Group’s share of consolidated shareholder equity was 561.5 million euros, including changes in fair value of 90.7 million
      euros.

      Mark-to-market debt
      The fixed rate bank loan taken out by the Mines de la Lucette Group is not given at fair value in the balance sheet, so it was necessary to evaluate
      the impact that the fair value would have on the consolidated debt. As at 31 December 2006, this impact is positive based on positive changes in
      interest rates and came to 16.3 million euros.
      It should be noted that the loan, taken out with the Group’s majority shareholder, was not valued because the due date for its repayment is at the
      borrower’s discretion.




32
COMPAGNIE
LA
LUCETTE
2.2.2 CALCULATION TABLE

Net asset value at replacement cost
To calculate the net asset value at replacement cost, the taxes deducted from the asset values given in the balance sheet and reintegrated into the
calculation of the NAV totalled 124.1 million euros as at 31 December 2006.
The net asset value per diluted share was 36.0 euros per share, which is an increase of 48.1% compared to the value of 24.3 euros as at 31
December 2005.
                                                                                                                                                    31/12/2006
In million euros                                                                                                                            Total            Per share
                                                                                                                                                               (in euros)

Shareholders’ equity                                                                                                                      561.5
Restatement of transfer taxes (taxes deducted in the balance sheet)                                                                       124.1
Adjustment of the debt to market value                                                                                                      16.3

Net asset value at replacement cost                                                                                                       701.9                    36.6
Number of    shares(1)                                                                                   19,162,810

Net asset value at replacement cost after dilution                                                                                        701.9                    36.0
Number of diluted   shares(2)                                                                            19,496,721
(1) The number of shares corresponds to the number of shares as at 31 December 2006, plus the bonus shares allocated, minus the own shares.
(2) The number of diluted shares takes the impact of the dilution from share warrants and stock options into account using the share buyback method.

Net asset value at liquidation
The calculation of the net asset value at liquidation requires the restatement of transfer taxes and costs. These are estimated either at 6.2% of the
asset value, or at 5% of the asset value of the company owning the asset (under the assumption of a sale).
To calculate the net asset value at liquidation, the taxes and fees estimated using the method of the most likely sale value, amounted to 88.2 million
euros. This figure replaces the 124.1 million euros in taxes, deducted for the calculation of the value excluding fees appearing in the balance sheet
as at 31 December 2006.
As at 31 December 2006, the net asset value at liquidation per diluted share was 31.5 euros per share, representing an increase of 47.9%
compared to the value of 21.3 euros as at 31 December 2005.




3. Financial resources

3.1 Debt structure
The consolidated bank debt as at 31 December 2006 was 1.409 billion euros and breaks down as follows:
In thousand euros                                                                                                                     31/12/2006            31/12/2005

Bank loans                                                                                                                                1,394                      86
Accrued interests                                                                                                                             15                      0
Total bank debt                                                                                                                           1,409                      86

For each acquisition financing, an invitation for proposals is systematically issued to the main banks in the market to obtain the best financial terms.
In addition to the bank debt, Mines de la Lucette has a loan from its majority shareholder for 31.3 million euros. The timing of the repayment of this
loan is at the discretion of Mines de la Lucette.




                                                                                                                                                                            33

                                                                                                     management’s discussion and analysis
      3.1.1 DEBT BREAKDOWN
      The chart below shows the breakdown of the Group’s debt by type:

            BREAKDOWN OF THE CONSOLIDATED DEBT AS AT 31/12/2006




                                                                                                                                                                  Variable rate debt 4%
                                                                                                                                                                  €58 million
                                            Fixed rate debt 96%
                                            €1,335 million




      The Group’s net debt (excluding interest incurred but not yet due) as at 31 December 2006 breaks down as follows:
      In thousand euros                                                                                                                                                         31/12/2006       31/12/2005

      Bank loans                                                                                                                                                                    1,394               86
      Bank financial assistance                                                                                                                                                             –            0
      Cash in hand                                                                                                                                                                        (34)           (6)
      Restricted cash                                                                                                                                                                      (8)
       Total net debt                                                                                                                                                               1,352               80

      As at 31 December 2006, all the bank debt is guaranteed by the Group’s property assets.

      3.1.2 DEBT MATURITY
      The maturity of the Mines de la Lucette’s debt as of 31 December 2006 is represented in the chart below according to the remaining lifetime of
      the loans:

            MATURITY OF NET DEBT                                                         1,400
                                                             Net debt in million euros




            AS AT 31/12/2006                                                             1,200
                                                                                                                                     86.33%


                                                                                         1,000

                                                                                          800

                                                                                          600

                                                                                          400

                                                                                          200                                                         11.74%

                                                                                                           0.25%    0.25% 0.26%               2.86%
                                                                                            0
                                                                                                 –1.68%
                                                                                         –200    0-1 year 1-2 year 2-3 year 3-4 year 4-5 year 5-6 year 6 year
                                                                                                                                                      and above
                                                                                                                         Repayment date

      The average term of the Group’s net debt as at 31 December 2006 was 4.6 years.
      In addition, the net debt/asset revaluation excluding taxes ratio was 67.4% as at 31 December 2006, with the taxes on the value of the property
      depending on the type of sale planned: sale of the actual property or the shares in the company owning the property.

      3.1.3 AVERAGE COST OF DEBT
      The average cost of debt over the year was 4.5% in line with the level in the previous financial year.
      If the interest rate went up by an average of one hundred base points, the increase in financial costs over a full year would be only 0.7 million euros.




34
COMPAGNIE
LA
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3.2 Financial structure
3.2.1 FINANCIAL STRUCTURE RATIOS AND BANK COVENANTS
The main loans made to the Group are accompanied by contractual requirements setting the financial ratios the Group agrees to respect which are
the subject of regular reporting to the lending institutions.
The Group’s obligations towards its main financial partners are as follows:
– the financial debt/assessed value of the property (LTV “Loan to Value”) ratio: below ratios of between 65% and 80%;
– the net rental revenue/financing costs ratio (ICR “Interest Covering Ratio”): above ratios of between 1.2 and 1.4.
As at 31 December 2006, the LTV ratio came to 70.7% and the ICR was 1.69.
Due to the bank financing for acquisitions in the period, the shares of some of the Group companies were pledged to the lending institutions by
Mines de la Lucette and Milu Investissement.

Risk management – Hedging policy
The Mines de la Lucette Group is exposed to the risk relating to changes in interest rates. The Group has set up an interest rate management
policy for the main purpose of limiting the impact of changes in interest rates. The debt hedging breaks down as follows:
Fixed rate debt                         Debt hedged                       Debt hedged                    Variable rate debt                    Total
                                           by swaps                         by collars
M€1,184                                     M€122                              M€30                                M€58                  M€1,394

The use of derivative instruments is strictly limited to operations to hedge the interest rate risk.
However, the use of derivative products exposes the Group to counterparty risks. The Mines de la Lucette Group, therefore, only engages in such
use with top ranked financial partners thereby limiting its exposure to this risk.
The Group is not exposed to share risk, except for its own shares. The cash is invested in no-risk money market products (SICAV – French market
securities).
No transaction was performed in any currency other than euros.




4. Corporate result of the parent company

4.1 Key figures
As at 31 December 2006, the net result for the Mines de la Lucette Corporation was a deficit of –6.7 million euros which is summarised as follows:
                                                                                 31/12/2006                                              31/12/2005
In thousand euros                              Total                        Property management                        Not allocated           Total
                                                                Offices        Warehouses               Other
Number of months of activity              12 months          12 months           12 months          12 months            12 months        12 months

Turnover                                    48,298             32,489              13,702              1,300                    807          2,675
Operating profit                            19,425             18,618                4,372               603                  (4,168)        (1,398)
Financial result                           (26,631)            (22,143)             (4,328)             (503)                   343          (1,900)
Exceptional result                             507                  19                   167              84                    237          2,109

Result before tax                           (6,700)             (3,506)                  211             184                  (3,588)       (1,190)
Income tax                                                                                                                                    (910)
Net result                                  (6,700)                                                                                         (2,100)

Sales turnover comprises rental income and charges rebilled to tenants collected during the 2006 financial year for a total of 48.3 million euros.
Operating costs were –29.3 million euros and mainly comprise the following items:
– amortisation allowances for the year for a total of –17.1 million euros;
– outside services –8.9 million euros;
– taxes, fees and similar payments: –3 million euros.
The financial result of –26.6 million euros comprises mainly bank interest on loans for a total of –25.8 million euros.




                                                                                                                                                       35

                                                                                               management’s discussion and analysis
      4.2 List of subsidiaries and equity interests
      Subsidiaries and holdings                                                                                          Capital        Shareholder equity
                                                                                                                        in euros                other than
                                                                                                                                            capital owned
                                                                                                                                                  in euros

      Detailed information about subsidiaries
      SNC VAILLANT PEUPLIERS – 61, rue de Monceau –75008 Paris –                                                        10,000                          –
      Siret: 448 913 871 00027
      SARL LANDES (ex-MDL HOTEL LES ARCS) – 61, rue de Monceau – 75008 Paris –                                       4,257,500                3,481,069
      Siret: 483 205 572 00020
      SAS M2L GESTION – 61, rue de Monceau – 75008 Paris – Siret: 485 079 420 00017                                     37,500                   (24,575)
      SARL BRETON – 61, rue de Monceau – 75008 Paris – Siret: 487 557 720 00017                                          3,750                     3,750
      SAS MILU INVESTISSEMENTS – 61, rue de Monceau – 75008 Paris –                                                     37,500                     (8,000)
      Siret: 487 557 589 00016
      SARL GARONNE – 61, rue de Monceau – 75008 Paris – Siret: 488 108 242 00014                                         3,750                     3,750


      SARL ODET – 61, rue de Monceau – 75008 Paris – Siret: 488 103 813 00017                                            3,750                     3,750


      SCI DORDOGNE – 61, rue de Monceau – 75008 Paris – Siret: 488 101 296 00017                                         1,000                     1,000


      SCI LOIRE – 61, rue de Monceau – 75008 Paris – Siret: 488 107 889 00013                                            1,000                     1,000


      SCI SEINE – 61, rue de Monceau – 75008 Paris – Siret: 488 090 796 00019                                            1,000                     1,000


      SCI CHAMBOLLE – 61, rue de Monceau – 75008 Paris – Siret: 488 874 371 00013                                        1,000                     1,000


      SCI CHASSAGNE – 61, rue de Monceau – 75008 Paris – Siret: 488 873 928 00011                                        1,000                     1,000


      SCI CHOREY – 61, rue de Monceau – 75008 Paris – Siret: 488 871 559 00016                                           1,000                     1,000


      SCI CONTI – 61, rue de Monceau – 75008 Paris – Siret: 488 873 886 00011                                            1,000                     1,000


      SCI MOREY – 61, rue de Monceau – 75008 Paris – Siret: 488 871 583 00016                                            1,000                     1,000


      SCI VOLNAY – 61, rue de Monceau – 75008 Paris – Siret: 488 873 860 00016                                           1,000                     1,000


      SCI VOSNE – 61, rue de Monceau – 75008 Paris – Siret: 488 873 845 00017                                            1,000                     1,000


      SARL LIBOURNE – 61, rue de Monceau – 75008 Paris – Siret: 489 254 177 00012                                   18,003,750               18,003,750


      SCI 21 – 61, rue de Monceau – 75008 Paris – Siret: 440 153 427 00024                                                 200                5,617,308



      Mines de la Lucette SA directly or indirectly owns 100% of the stock and voting rights in its subsidiaries. New holdings acquired in 2006 relate to
      the following companies: SCI 21, SARL Garonne, SARL Odet, SCI Dordogne, SCI Loire, SCI Seine, SCI Chambolle, SCI Chassagne, SCI Chorey,
      SCI Conti, SCI Morey, SCI Volnay, SCI Vosne and SARL Libourne.




36
COMPAGNIE
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LUCETTE
         Share of       Gross book    Net book value         Loans and    Guarantees and            Turnover     Results of last
capital owned as    value of shares        of shares   advances made      bonds given by    excluding tax for     financial year
             a%     owned in euros    owned in euros   by the Company       the Company         last financial         in euros
                                                               in euros          in euros       year in euros



          99.99             9,990                 –       14,597,758                   –         2,580,000          (888,687)


            100        8,507,500         8,507,500             23,100                  –                    –      1,097,815


            100            37,500           37,500           987,723                   –                    –        186,135
            100             7,500            7,500              2,100                  –                    –               31
            100            37,500           37,500           356,883                   –                    –         (54,210)


            100             7,500            7,500                                                          –         (13,321)


            100             7,500            7,500                                                          –         (12,464)


            100             2,000            2,000              3,000                                       –          (7,346)


            100             2,000            2,000              3,000                                       –          (7,351)


            100             2,000            2,000              3,350                                       –          (7,558)


            100             2,000            2,000        34,000,000                             5,821,776          (671,632)


            100             2,000            2,000        10,500,000                             3,997,837          (530,088)


            100             2,000            2,000                                                          –          (6,731)


            100             2,000            2,000        38,000,000                             8,058,649        (1,955,045)


            100             2,000            2,000                                                          –          (6,731)


            100             2,000            2,000        50,815,021                             6,170,551          (430,341)


            100             2,000            2,000                                                          –          (6,716)


            100       36,007,500       36,007,500          1,150,000                                        –         (22,637)


              95       6,103,225         6,103,225                                               1,373,030             40,628




                                                                                                                                   37

                                                                          management’s discussion and analysis
      4.3 Distribution and monitoring of distribution obligations
      On 26 April 2005, Mines de la Lucette opted for SIIC (French Listed Real Estate Investment Company) status.
      This status implies:
      – an obligation to distribute at least 85% each year of the profits from property rentals and 100% of the dividends received from subsidiaries which
      have also opted for SIIC status;
      – the distribution of 50% of the capital gains from disposals within two years.
      Because of its deficit result, Mines de la Lucette is not subject to any obligation to distribute dividends.
      As Mines de la Lucette’s goal is to provide a return for its shareholders, a proposal will be submitted to the next combined general shareholders’
      meeting on 24 May 2007 to distribute a unit dividend of 1.30 euro, taken from the share issue account.
      A proposal will also be made to post the net loss for financial year 2006 to “Retained earnings” resulting in a retained loss as at 31 December
      2006 of 8.1 million euros.
      It should be noted that no dividends have been paid out over the last three years.



      4.4 Information about the breakdown capital
      4.4.1 SHARE CAPITAL AND CHANGES OVER THE YEAR
      On 20 June 2006, MSREF Grillet BV sold all its equity interests in Mines de la Lucette to MSREF Turque S.à r.l (see Significant events in the year).
      As at 31 December 2006, the shareholders of Mines de la Lucette are as follows:
                                                                                         Number of        % of capital           Number of            % of voting
                                                                                      shares owned             owned           voting rights               rights

      MSREF Turque S.à r.l                                                            17,922,848               93.61           17,922,848                 93.62
      Floating                                                                          1,221,112               6.38            1,221,319                   6.38
      Treasury Stock(1)                                                                     2,568               0.01                      0                    0
       Total                                                                          19,146,528                 100           19,144,167                   100

      (1) Under a liquidity agreement signed on 1 September 2006 with Fortis Bank.

      During 2006, several capital operations were performed, as indicated in the table below:
      Date                Type of operation                                          Shares created   Capital increase   Cumulative amount     Cumulative number
                                                                                                                                  of capital            of shares

      31/12/2005                                                                                                             €23,242,545              1,549,503
      03/04/2006          Issue of new shares in cash                                   3,916,665      €58,749,975           €81,992,520              5,466,168
      03/08/2006          Issue of new shares in payment for contributions in kind    13,665,420      €204,981,300         €286,973,820             19,131,588
      From 15/08/2006 Capital increase from the exercise of 53,784 share warrants          14,940         €224,100         €287,197,920             19,146,528
      to 31/12/2006

      Therefore as at 31 December 2006, the capital consisted of 19,146,528 shares with a face value of 15 euros each, amounting to 287,197,920 euros.




38
COMPAGNIE
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LUCETTE
4.4.2 DISCLOSURE THRESHOLDS

In the course of the 2006 financial year, the operations indicated in the table below were reported to the AMF, pursuant to article L. 233-13 of the
French Commercial Code:
Reporting entity                                     Date of report    Type           Declared    % of capital         Number of          % of voting
                                                                                    number of                        voting rights             rights
                                                                                 shares owned

MSREF International Holdings Coöperatief, UA 11/04/2006               Down        (1,188,338)          21.74          1,188,338               21.74
Immobilière Groupe Casino                            11/04/2006         Up         3,368,370           61.62          3,368,370               61.62
SCI de l’Océan                                       11/04/2006         Up           548,295           10.03            548,295               10.03
Immobilière Groupe Casino                            11/04/2006       Down        (3,368,370)           0.00                    0               0.00
SCI de l’Océan                                       11/04/2006       Down          (548,295)           0.00                    0               0.00
MSREF International Holdings Coöperatief, UA 11/04/2006                 Up         5,105,003           93.39          5,105,003               93.39
Asset Value Investors(1)                             12/04/2006         Up            86,056            5.55             86,056                 5.55
Asset Value Investors                                12/04/2006       Down          (102,847)           1.88            102,847                 1.88
MSREF Turque S.à r.l                                 27/06/2006         Up         5,105,003           93.39          5,105,003               93.39
MSREF Grillet BV                                     27/06/2006       Down        (5,105,003)           0.00                    0               0.00
(1) Adjustment for crossing the threshold on 22 July 2005.


4.4.3 SECURITIES GIVING ACCESS TO CAPITAL
As at 31 December 2006, the securities issued, apart from existing shares giving access to Mines de la Lucette capital are as follows:
– stock subscription or stock purchase options;
– bonus shares distributed;
– share warrants.
The table below details the features of each of these types of securities:
Stock subscription or stock purchase options
Date of shareholders’ meeting                                                                                                           3 April 2006
Date of Board meeting                                                                                                                21 August 2006
Starting date for exercise                                                                                                           21 August 2008
Expiry date                                                                                                                          21 August 2012
Number of shares granted                                                                                                                    55,660
Share exercise parity                                                                                                                              1
Subscription or purchase price                                                                                                              €29.02
Number of shares subscribed or purchased                                                                                                           0
Number of options which could be exercised                                                                                                         0
Bonus shares
Date of shareholders’ meeting                                                                                                           3 April 2006
Date of Board meeting                                                                                                                  27 April 2006
Date of final allocation                                                                                                               27 April 2008
End of lock-in period                                                                                                                  27 April 2010
Number of shares granted without consideration allocated                                                                                    18,850
Share warrants
Date of shareholders’ meeting                                                                                                          27 June 2006
Date of Board meeting                                                                                                                  27 June 2006
Starting date for exercise                                                                                                               5 July 2006
Expiry date                                                                                                                            30 June 2008
Number of share warrants granted                                                                                                          5,466,168
Number of share warrants exercised                                                                                                            53,784
Exercise price for share warrants                                                                                                                €24
Number of share warrants which could be exercised                                                                                         5,412,384
Exercise price for share warrants                                                                                                                €24




                                                                                                                                                        39

                                                                                          management’s discussion and analysis
      4.4.4 LIQUIDITY CONTRACT, SHARE BUYBACK PROGRAM

      Liquidity contract
      On 1 September 2006, Mines de la Lucette entered into a liquidity contract for an indefinite period with Fortis Bank Succursale France, in accor-
      dance with the ethics charter of the AFEI, approved by the AMF, in a decision dated 11 September 2006. The Company has allocated the amount
      of 150 thousand euros to the liquidity account, which could possibly go up to 500 thousand euros.
      Subsequent to the setting up of the liquidity contract, the way in which Mines de la Lucette’s shares are listed was changed. Since 15 September
      2006, the shares have been listed continuously.
      During the 2006 financial year, under this liquidity contract, 6,491 shares were purchased at an average price of 34.9 euros and 3,923 shares were
      sold at an average price of 35.0 euros.
      As at 31 December 2006, 2,568 shares valued at 89 thousand euros were self-held by the Group as part of its liquidity contract.

      Share buyback program
      The combined general shareholders’ meeting on 27 June 2006 gave authorisation to the board of directors for a period of eighteen months, with
      permission to subdelegate, to trade the Company’s shares, in application of the provisions of article L. 225-209 of the French Commercial Code,
      and the share buyback programme initiated by the board of directors may not exceed 10% of the Company’s share capital or a maximum unit pur-
      chase price of 60 euros.
      As approved by the meeting, the Board was authorised for a period of twenty-six months to cancel the shares held by the Company, up to a limit
      of 10% of the total number of shares in the capital per twenty-four month period, with permission to subdelegate.




      5. Human resources

      5.1 Employment
      During the year, the Group acquired the human resources necessary for its growth. Its directors set up a human resources policy appropriate for
      the size of the Group and its growth.
      All the Group’s employees with the exception of the Group’s Chairman & CEO are employed by M2L Gestion, a management company created on
      17 November 2005, which signed a service contract with Mines de la Lucette for this purpose effective as of 1 January 2006.

      5.1.1 GROUP PAYROLL AS AT 31 DECEMBER 2006

      Employee status        Gender      Employees as           Indefinite contracts       Fixed term contracts                   Others          Employees as
                                         at 31/12/2005                                                                     (temporary workers,    at 31/12/2006
                                                                                                                               interns etc.)
                                                           Incoming         Outgoing       Incoming       Outgoing    Incoming         Outgoing

      Executives                  M                 4             8                    1         0                0          0               0              11
                                  F                 3            10                    1         1                1          0               0              12
      Administrative staff        M                 0             0                    0         0                0          2               2               0
                                  F                 1             1                    0         0                0          9               9               2
       Total                                        8            19                    2         1                1         11              11              25


      5.1.2 WORK ORGANISATION, CAREER AND SKILLS MANAGEMENT
      For employees under the Syntec national collective bargaining agreement, the organisation of the working hours at the Group falls within the legal
      and regulatory framework of annualisation of working hours in the form of days of reduced working hours (French JRTT system) allowed on top of
      their legal and contractual leave days.
      Career and skills management is carried out using an annual appraisal system involving an individual interview with each M2L Gestion employee
      and his/her supervisor(s).
      The appraisal has a double purpose:
      – to carry out a review of the past year;
      – to set up goals to be achieved for the year to come.
      In fact, the appraisal partly provides an evaluation of the goals to be achieved in the year to come but also reveals any training needs identified by
      the employees and/or their supervisors in the performance of their duties.




40
COMPAGNIE
LA
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5.2 Compensation policy
The salary policy of the Mines de la Lucette group is based on a system of incentive-based variable compensation in exchange for the services of
each Group employee. The variable compensation is awarded on a discretionary basis according to the Company’s results, and the performances
by the department and the employee.



5.3 Simplified organisation chart



                                                           General Management




  Asset Management                    Legal                      Acquisitions                   Finance                   Development and
     department                     department                   department                    department                 Risks department




To strengthen current skills for growth of the Group’s business, the Development and Risks department was created in the first quarter of 2007.




                                                                                                                                                   41

                                                                                       management’s discussion and analysis
      6. Company officers

      The following individuals and legal entities were members of the board of directors of Mines de la Lucette as at 31 December 2006:
      – Mr Francis Berthomier;
      – Mr Pascal Duhamel;
      – Mr Robert Falls;
      – Mr Stéphane Theuriau, Chairman, CEO, appointed on 6 September 2006 after the resignation of Mr Pascal Duhamel;
      – MSREF Turque S.à r.l, represented by Mr Adrien Blanc.
      Over the last five years, none of the current members of the board of directors of Mines de la Lucette:
      – has been found guilty of fraud, subject to an indictment or official sanction issued by the legal or regulatory authorities;
      – has been involved in a bankruptcy, receivership or liquidation as a company director or officer;
      – has been banned from acting as a member of a management, direction or supervisory body or from taking part in the management of a company.
      Pursuant to article L. 225-102-1 of the French Commercial Code, we give below the compensation and benefits of all kinds paid to the company
      officers of Mines de la Lucette during the year.
      The general shareholders’ meeting of 27 June 2006 fixed the total amount of directors’ fees at 30 thousand euros. During the 2006 financial year,
      a total of 21 thousand euros was reported.
      Mr Stéphane Theuriau
      Chairman of the Board
      Attendance fees                                                                                                                           4,500
      CEO
      Fixed compensation                                                                                                                      133,333
      Variable compensation
       Total                                                                                                                                  137,833
      Mr Francis Berthomier
      Board member
      Attendance fees                                                                                                                          16,500
       Total                                                                                                                                   16,500
      The compensation for the Chairman & CEO was determined based on comparisons with the compensation paid to equivalent positions. On
      18 January 2007, the Board granted 2,826 bonus Company shares granted without consideration to the Chairman & CEO. It should be noted that
      no commitment has been entered into by the Company for the benefit of its company officers.




      7. Social and environmental consequences of the Group’s business

      The Mines de la Lucette Group believes the social and environmental consequences of its business are particularly important. The Group has taken
      all necessary measures to conform to regulatory requirements, especially in respect of detecting and dealing with asbestos problems.
      Finally, as the Group is no longer involved in the mining business, no environmental or social consequences have been identified.




42
COMPAGNIE
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8. Insurance – Coverage for risks

To protect its assets and significantly reduce the effects of any incidents, the Mines de la Lucette Group has set up a very extensive insurance
programme covering damage to assets, any loss of rents and landlord’s liability.
The multi-risk insurance policies for the buildings have been taken out with a pool of insurance companies, principally ACE Europe, AGF and AXA,
mainly to cover the most important buildings owned by the Mines de la Lucette Group.
Any new building added to the portfolio of any of the companies in the Mines de la Lucette Group is protected by the extensive coverage provided
by this insurance programme.
The multi-risk insurance policies for the buildings therefore cover the Group’s assets against major property damage, including acts of vandalism,
attacks, riots, popular uprisings, terrorism, sabotage and collapse.
In addition, as part of this programme, the multi-risk policies for the buildings taken out by the Group companies always include coverage for building
landlord’s civil liability, to protect the Group from any claims by neighbours, third parties and tenants.
As part of the implementation of this programme, and the selection of policies to be taken out, the Group has paid particular attention to the amount
of coverage provided in case of destruction of the insured building, its new replacement value and coverage for the loss of rents for three years.
The annual insurance premium total was 642 thousand euros in 2006 (60 thousand euros in 2005 and 2004).




9. Recent events

Transfer of the registered office
The Company’s registered office was transferred on 1 January 2007 to 7, rue Scribe – 75009 Paris, to a building belonging to the Mines de la
Lucette Group.




10. Future prospects

Mines de la Lucette is pursuing a policy of acquiring operations with a high potential for increased rental value involving offices located in business
districts in the Paris area, Lyon and Marseille, as well as industrial properties as part of the trend towards property outsourcing.




                                                                                                                                                          43

                                                                                           management’s discussion and analysis
      EVENTS AFTER THE BOARD
      OF DIRECTORS’ MEETING
      OF 6 MARCH 2007

      None.




44
COMPAGNIE
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REPORT BY THE CHAIRMAN
OF THE BOARD

Report by the Chairman of the Board on the conditions for preparing
and organising the work of the Board, any limitations made
to the authorisation of the CEO and the oversight procedures
put in place by the Mines de la Lucette Group
Financial year ended 31 December 2006



In application of article L. 225-37, last paragraph, of the French Commercial Code, this report by the Chairman of the board of directors (the “Board”)
of Mines de la Lucette (the “Company”) is submitted to you to inform you of the conditions under which the work of the Board is prepared and
organised as well as the internal control procedures set up within the Company during the financial year ended on 31 December 2006.
Within this report, you will find the rules and methods of work, as well as the description and division of the authorisation of the management bodies
of the Company which led to the decisions presented and discussed by those management bodies latter during the last financial year and finally,
the internal control procedures.
This report will be attached to the board of directors’ management report as required by law.




1. Preparation and organisation of the work of the Board

1.1 Membership – Specific rules for the Board’s operations and organisation
Internal Regulations of the Board – On 19 December 2006, the board of directors adopted its internal regulations and a director’s charter, to
create an ethical framework governing the directors’ duties, potential conflicts of interest, procedures for multiple appointments, attendance at
Board meetings and confidentiality.
Apart from the principles contained in the director’s charter, the internal regulations of the board of directors also define the operating procedures for
the board of directors, the rules for paying directors’ fees to directors according to their frequency of attendance (up to the total amount of directors’
fees approved by the general shareholders’meeting), and setting limits on the authorisation of the CEO.
Membership of the Board – The articles of association stipulate that the Board should be composed of between 3 and 18 members. Since the com-
bined general shareholders’ meeting of 27 June 2006, the articles of association have stipulated that the members of the Board are appointed for a
term of six years. The Board currently has five members, as follows:
                                                  Appointment ends with the closing of the financial year ending on                        Representative

Mr Stéphane Theuriau
– Chairman & CEO                                                                                     31/12/2008
Mr Francis Berthomier
– Board member                                                                                       31/12/2006
Mr Robert Falls
– Board member                                                                                       31/12/2007
Mr Pascal Duhamel
– Board member                                                                                       31/12/2011
MSREF Turque S.à r.l
– Board member                                                                                       31/12/2006                          Mr Adrien Blanc

There are currently no independent directors (as defined in the Bouton report on corporate governance of listed companies).




                                                                                                                                                             45

                                                                                                                                  chairman’s report
      However, Mr Francis Berthomier is deemed an “independent” director by the other directors, in the sense that since 2005 he has had no ties of any
      kind with the Company, the Group, or a company directly or indirectly owning a stake in the Company, a supplier or service provider or any other
      outside party with whom the Company may have a business relationship. However, this is the Board’s own opinion and does not meet the definition
      of an independent Board member generally accepted in corporate governance.
      It should be noted that none of the Board members is elected by the employees, in application of article L. 225-27 of the French Commercial
      Code, and that the articles of association do not provide for the appointment of observers in addition to directors.
      Renewals of the appointments of two of the directors, Mr Francis Berthomier and MSREF Turque S.à r.l will be on the agenda for the next general
      shareholders’ meeting.

      Average notice for calling a meeting of the Board – The articles of association state that meetings of the Board can be announced by any means,
      including orally, at the initiative of the Chairman of the Board. The amount of notice for calling the meeting depends on the type and/or importance
      of the items on the agenda to allow the Board members to have enough time to prepare the items on the agenda and particularly to call for an expert
      opinion if needed. The average notice for calling a meeting of the Board has been about five days.

      Directors’ representation – Directors are allowed to request another director to represent them at meetings of the Board. This proxy must be given
      in writing. In the 2006 financial year, no Board member used this representation option.

      Chair of meetings of the Board – Meetings of the Board are chaired by the Chairman or in his absence, by a Vice-Chairman or a director appointed
      by the Board. Out of 13 meetings of the Board held over the year, the Board was always chaired by its Chairman.

      Video-conference – Pursuant to the articles of association, any member of the Board may attend and participate in meetings of the Board by video-
      conference or by any means of telecommunication or teletransmission, including the Internet, under the conditions set by current regulations and
      the Board’s own internal regulations. The Board’s own regulations expressly state that Board members participating in the Board’s discussions by
      video-conference or by any means of telecommunication or teletransmission are deemed present for calculating the quorum and the majority,
      except when the following matters are on the table: drawing up the annual accounts and the management report as well as drawing up the con-
      solidated accounts and the Group’s management report. The option of participating by video-conference or any means of telecommunication or
      teletransmission was used on seven occasions in 2006 and involved an average of two directors.

      Evaluation of the Board’s operations – The membership of the Board and the relations between its members do not make it necessary to set
      up a formal procedure for evaluating its operations. The Board members freely discuss any proposals relating to holding meetings with the Chairman.



      1.2 Board committees
      On 19 December 2006, the Board decided to set up permanent committees from within its membership to facilitate the operations of the Board
      and provide effective assistance in preparing its decisions. Two committees were set up on that date: the Investment Committee, to replace the
      Management Committee and an Audit Committee.

      1.2.1 THE MANAGEMENT COMMITTEE
      The Management Committee met twice in the course of 2006. At the end of 2006, the decision was made that it would be better to redefine the
      structure of the Management Committee and replace it by the Investment Committee, responsible for examining the Company’s investment strategy
      and ensuring consistency in acquisitions and/or divestments with this strategy, and with fewer members than the Management Committee but
      with authority to call on any expert for assistance. Therefore, on 19 December 2006, the Management Committee was disbanded.

      1.2.2 THE INVESTMENT COMMITTEE
      The role of the Investment Committee, instituted by a Board decision dated 19 December 2006, is:
      – to examine the investment and divestment strategy and to ensure consistency in planned acquisitions and divestments with this strategy;
      – to give a non-binding favourable or unfavourable opinion on any project submitted to it;
      – if necessary, to present a report to the Board on any investment project submitted to it, which it has examined and for which the Investment
      Committee has issued an opinion, whatever the opinion is.
      The Investment Committee is responsible for:
      – issuing an advance non-binding opinion on investment and divestment proposals falling within the decision-making authorisation of the CEO;
      – issuing an advance non-binding opinion on investment and divestment proposals, whatever the kind of operation planned, using financing
      or changing business plans which were previously approved by the Board, falling within the exclusive scope of the Board’s decision-making
      authorisation.




46
COMPAGNIE
LA
LUCETTE
The Investment Committee is made up of five members appointed for an indefinite period by the Board.
The members of the Investment Committee are Messrs Stéphane Theuriau, Chairman & CEO, and also Chairman of the Investment Committee,
Adrien Blanc, permanent representative of a corporate director, Pascal Duhamel, director, Thomas Guyot, director of Acquisitions at one of the
Company’s subsidiaries, Éric Pinon, CFO.
The Investment Committee did not meet in 2006 as it was only created at the very end of the year.

1.2.3 THE AUDIT COMMITTEE
The Audit Committee was created by the Board on 19 December 2006 and its role is to provide assistance to the Board in relation to examining
and drawing up the annual and half-yearly accounts for the Company and its subsidiaries (together, the “Group”).
To do this, it has the power to examine the annual and half-yearly financial statements for the Company and the Group and the associated reports
before they are submitted to the Board, to interview particular employees as well as the statutory auditors and any outside experts at its own discretion.
The Audit Committee may also examine and formulate an opinion on the candidates for statutory auditors as well as all the relations they have with
the Company and/or the Group and on the requested fees.
More generally, the Audit Committee has the power to ensure that the Company and/or the Group have the appropriate means to prevent risks and
irregularities in the management of the Company’s and Group’s affairs.
The members of the Audit Committee are Messrs Adrien Blanc, permanent representative of a corporate Board member, Éric Pinon, CFO, and
Francis Berthomier, a Board member deemed independent by the Board, although this status does not meet the criteria for independent Board
member generally accepted in corporate governance. Mr Francis Berthomier is also Chairman of the Audit Committee.
The Audit Committee did not meet in 2006 as it was only created at the very end of the year.



1.3 Information provided to directors
The Chairman of the Board provides the directors with sufficient information in enough time to allow them to fully carry out their duties, and the notices
of meeting sent by e-mail include the agenda. Each director receives the information necessary for carrying out his duties in advance of the Board
meeting. To this end, the internal regulations state that before any meeting of the Board, the members must receive a file on all the items on the
agenda requiring special examination and advance consideration in good time and at the latest forty-eight hours before the meeting, provided that
confidentiality considerations do not preclude it.



1.4 Frequency of Board meetings and average attendance by directors
The Board met 13 times in 2006.
The average attendance rate of the members during 2006 was 79%.



1.5 Tasks of the Board
The Board decides on the direction of the Company’s business and oversees its implementation.
During 2006, the Board’s tasks included:
– an examination of the Company’s annual accounts and the consolidated accounts for 2005;
– an examination of the half-yearly accounts for 2006;
– approving strategic operations for the acquisition of real estate assets;
– using authorisation granted by the combined general shareholders’ meeting of 27 June 2006 to increase the Company’s share capital by issuing
shares and securities giving access to capital, retaining the preferential subscription right, and by the allocation without consideration of share
warrants;
– appointing Mr Stéphane Theuriau as the Chairman and CEO, replacing Mr Pascal Duhamel;
– adopting a code of good conduct for operations involving securities by company officers and employees;
– approving the adoption of the internal regulations;
– creating the Investment Committee and the Audit Committee;
– examining the allocation of shares granted without consideration to particular Group employees;
– examining the allocation of Company stock subscription or stock purchase options to particular Group employees.




                                                                                                                                                             47

                                                                                                                                  chairman’s report
      1.6 Operations involving securities
      A code of good conduct relating to operations involving securities and respecting French laws on insider trading and insider misconduct was set
      up and must be accepted by each director, manager and employee at the Group when they are hired or start work. These operations must also
      be declared to the AMF, the French Financial Markets Authority in accordance with the applicable regulations.



      1.7 Agreements under article L. 225-38 of the French Commercial Code
      During the year, the Board approved several new agreements under article L. 225-38 of the French Commercial Code which are presented in the
      special auditors’ report.



      1.8 Delegations of authority for guarantees, bonds and security interests –
      article L. 225-35 of the French Commercial Code
      During the year, the Board authorised the Chairman to grant guarantees, bonds and security interests in the name of the Company.



      1.9 General management procedures at the Company and limits on the
      authorisation of the CEO
      The Board voted to combine the positions of Chairman of the Board and CEO.
      In its Internal Regulations, the Board imposed some limits on the authorisation of the CEO, in particular requiring approval by the Board for certain
      operations especially acquisitions, divestments, acquiring holdings in other companies or loans, if they exceed particular significant financial thres-
      holds. The Board votes on these matters after consulting with the Investment Committee if necessary.




      2. Internal control

      The goal of the internal control procedures both for the shareholders and for third parties, is to:
      – ensure that actions by management or execution of operations of all kinds are carried out in compliance with the decisions by the Group’s
      decision-making bodies;
      – ensure that the accounting, financial and management information given to the directors is a true reflection of the Group’s business and situation;
      – ensure the integrity and preservation of the Group’s assets as far as possible.
      The main risks, detailed below, which the Group is faced with are:
      – risks associated with acquisitions;
      – risks associated with asset management;
      – risks associated with drawing up the accounting and financial information;
      – IT risks;
      – legal risks.



      2.1 Setting up specialist committees
      As part of its ongoing concern for improving its internal control procedures, the Board decided on 19 December 2006 to set up two specialist
      committees as follows:
      – the Audit Committee, whose tasks are detailed above (see section 1.2.3) met for the first time on 28 February 2007, to examine the annual
      accounts and consolidated accounts for the year ended on 31 December 2006;
      – the Investment Committee, whose tasks are given above (see section 1.2.2) has been meeting since 18 January 2007.
      The internal regulations of these committees are attached to the internal regulations of the Board.




48
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2.2 Preventing risks associated with acquisitions
Risks associated with acquisitions
When a proposal for a possible acquisition is being studied, a certain number of tasks are performed. These consist mainly of:
– an analysis of the tenants’ credit rating;
– an analysis of the concurrent properties;
– an analysis of the market for the property;
– an analysis of the pollution risks;
– technical studies;
– an sensitivity analysis of the main parameters;
– an analysis of the financial impact associated with the acquisition.
Proposals for property acquisitions must be presented to ad hoc committees which meet as soon as necessary. When these committees meet, the
various technical, legal, financial and commercial analyses relating to the proposed acquisition are presented. The value development strategy, the
assumptions made and the price to be offered are confirmed, subject to the in-depth audit of the conditions for carrying out the transaction (data
room) and the decision by the general management. Models have been developed by the acquisition teams (Discounted Cash flows, comparables
method, etc.) to be used as the basis for the committees’ work, which allow comparisons to be made with acquisitions previously carried out or
similar operations in the property market.
The proposed acquisitions must fall within the scope of the Group strategy developed from a business plan approved by the Board.
To prevent risks associated with the acquisition, the Board uses all the legal and financial contingency clauses it can which apply to the proposal
(conditions precedent, liability guarantees, deferred payments, etc.)

Risks associated with financing
The Group’s strategy is based on using mortgage debt of an average of 70% of the property value. When so doing, setting up any line of credit is
subject to advance approval by the Finance department and the Legal department in accordance with directives from General Management. The
Group routinely asks for proposals from at least two lending institutions.
The Group’s bank debt is taken on at a fixed rate of interest, as far as possible, and if a variable interest rate has to be accepted, the change in the
interest rate is hedged by the use of financial instruments in almost all cases.
Monitoring of respect for corporate lines of credit is performed jointly by the Finance department and by the Legal department. In particular, the
Finance department ensures sure that all covenants are respected on an updated basis.



2.3 Prevention of risks associated with asset management
Asset management
Asset management is carried out directly by the Group and consists firstly of analysing the situation itself and setting up a strategy appropriate for
each asset, and secondly, implementing the strategy and any investment operations encouraging the development and increased value of the
Group’s assets.
The goals of asset management (price, timing and targets) are defined with General Management at monthly committee meetings. At these meetings
various updated rental scenarios for the properties owned by the Group are presented, new acquisitions as well as key business ratios. The Asset
Management department is advised and assisted in its asset management policies, particularly in relation to the rental situation, by the Legal
department which contributes to ensuring the good outcome for any leases which are signed.

Budget control
Since 4 December 2006, ten-year business plans have been drawn up every six months and are presented to the Board for approval.

Property valuations
Twice a year the Group has a valuation of all its real estate assets performed by independent experts. These valuations assess the market value of
the properties and are used on the one hand to record the fair value, in accordance with the accounting principles adopted by the Group, and on
the other hand to carry out checks when business plans are drawn up and/or examined.

Property management
Property management is outsourced to the following service providers: Nexity, APM, Constructa and Sudeco. They are responsible for the day to
day operational and administrative management of the properties owned by the Group under the direct ongoing supervision of the asset managers
and Finance department.
The main tenants of the Group’s properties are high end companies which reduces the risk of insolvency. In addition, when the leases are signed,
the tenants must give the landlord financial deposits, either by making deposits in escrow or in the form of a performance bond.




                                                                                                                                                           49

                                                                                                                                chairman’s report
      2.4 Prevention of risks associated with drawing up the financial information
      Internal accounting control procedures
      The Group’s internal accounting control procedures, as well as the procedures for drawing up and processing the accounting and financial infor-
      mation, were the subject of special investment and attention in the second half of 2006. The corporate accounting of all the companies within the
      Group’s scope of consolidation uses the same integrated system set up in June 2006.
      The Company’s books are kept within the Company by a team which reports to the Group’s CFO.
      The accounting employees in charge of keeping the books for one or more companies work in tandem. In addition, two independent accounting
      firms are active throughout the year and participate in preparing the half-yearly and annual corporate and consolidated accounts for the Group.

      Authorised signatures
      The ordering and payment functions have been clearly separated for the purpose of preventing any possible risk of fraud, and the authorised
      signatures must sign in pairs.

      Drawing up the accounts
      The corporate accounts are drawn up in accordance with French accounting rules and standards. The half-yearly accounts enable the Company to
      give partial approval to the items to be included in the annual accounts. A procedure defines the management rules so that the information available
      is centralised in the accounting division to ensure that all information required for closing the accounts is on hand.

      Account consolidation
      The Group uses a standard consolidation computer programme and employs an accounting firm with specialist expertise for the preparation of its
      consolidated accounts.

      Off-balance sheet commitments
      Management rules have been defined for off-balance sheet commitments in the procedures for drawing up the accounts. The Legal department
      gathers and consolidates these items and sends them to the Finance department as part of the procedure to draw up the accounts.

      Financial reporting
      The Group has specific quarterly reporting obligations to the lending institutions.
      Producing these reports, based on actual figures and also on budget figures, means that activities can be more thoroughly analysed and directed:
      – a detailed report is made for each property owned by the Group;
      – the report means that systematic comparisons can be made between the actual and the budget figures, which shows up any anomalies.

      Financial communications
      As Mines de la Lucette is a listed company, the Group is subject to strict requirements when producing its financial information.
      As at 1 January 2007, draft press releases on the accounts, are presented to the Board for approval, as well as to the Audit Committee.
      Draft annual reports and press releases must be approved by the heads of the appropriate departments and the statutory auditors.

      Statutory auditors
      As a listed company, Mines de la Lucette employs the services of two statutory auditors. As part of their auditing tasks, and based on French
      accounting rules and standards, they ensure that the Company and Group accounts are properly and accurately kept, and give a true picture of
      the results of operations for the year just past as well as the financial and asset situation at the end of the year.
      As part of their duties, the statutory auditors must examine the organisation and functioning of the internal control procedures which have been
      implemented, and make recommendations as necessary.




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2.5 Preventing other risks
IT risks
The Group has implemented a procedure in accordance with the following general computer security practices and standards:
– continuity of operations;
– backing up and protecting data;
– incident management;
– protecting systems against computer viruses and security breaches.
IT risks are prevented particularly by a process of regularly backing up all computer data. The back up media are stored at an off-site location.
For the physical protection of the premises, the computer centre has its own enclosed area, protected from intrusions (access control) and fire
(smoke detectors).

Legal risks
The Legal department, reporting directly to the Chairman & CEO, is made up of legal experts specialising in property law and corporate law.
These experts monitor the Group’s activities and also draw up all the Group’s legal documentation.
Risk prevention also takes the form of a control procedure implemented by the Legal department, which ensures that the regulations applicable to
the Group and its businesses are properly adhered to.

Lawsuit management
The Legal department monitors all lawsuits in which the Group’s liability could be incurred, on a case by case basis.

Asset insurance policies
The Group has set up an insurance programme for all its assets, mainly covering all the risks which could affect the Group’s properties and/or
incur its civil liability. The policies are taken out with top ranked insurance companies.
The insurance risks and coverage are monitored by the Legal department.

Financial risks
The rules for intervention in the financial markets, as part of hedging operations and operations involving Mines de la Lucette shares, provide the
proper separation between the control and operational functions.
All the Group’s operations are carried out with top ranked institutions, thereby limiting the counterparty risks.

Fight against money laundering
The Group is currently setting up the required mechanisms to comply with the requirements of decree no. 2006-739 of 26 June 2006 on the fight
against money laundering when its half-yearly accounts are drawn up.



2.6 Quality standards
ISO-type certifications, and reference to charter-type professional standards, code of ethics, Company membership of professional
associations, etc.: steps have not been taken so far.
More information is given in the management report on the Group’s activities.
In application of article L. 225-235, last paragraph, of the French Commercial Code, the statutory auditors’ special report includes their comments
on the internal control procedures relating to drawing up and stating the accounting and financial information.




                                                                                                                               Stéphane Theuriau
                                                                                                                                Chairman & CEO




                                                                                                                                                      51

                                                                                                                            chairman’s report
      Statutory auditors’ report, prepared in accordance with article 225-235
      of the French Commercial Code (Code de commerce), on the report prepared
      by the President of the Board of Mines de la Lucette, on the internal
      control procedures related to preparation and processing of accounting
      and financial information
      Year ended 31 December 2006
      Free translation of the French original



      To the Shareholders,

      In our capacity as statutory auditors of Mines de la Lucette, and in accordance with article L. 225-235 of the French Company law (Code de
      commerce), we report to you on the report prepared by the President of your Company, in application of article L. 225-37 of the French Company
      law (Code de commerce) for the year ended 31 December 2006.

      It is for the president to give an account, in his report, notably of the conditions in which the duties of the board of directors are prepared and
      organized and the internal control procedures in place within the Company.

      It is our responsibility to report to you our observations on the information set out in the president’s report on the internal control procedures relating
      to the preparation and processing of financial and accounting information.

      We performed our procedures in accordance with professional guidelines applicable in France.
      These require us to perform procedures to assess the fairness of the information set out in the president’s report on the internal control procedures
      relating to the preparation and processing of financial and accounting information. These procedures notably consisted of:
      • obtaining an understanding of the objectives and general organization of internal control, as well as the internal control procedures relating to the
      preparation and processing of financial and accounting information, as set out in the president’s report;
      • obtaining an understanding of the work performed to support the information given in the report.

      On the basis of these procedures, we have no matters to report in connection with the information given on the internal control procedures
      relating to the preparation and processing of financial and accounting information, contained in the president of the Board’s report, prepared in
      accordance with article L. 225-37 of the French Company law (Code de commerce).

                                                                                                                  Paris and Paris-La Défense, 23 March 2007
                                                                       The statutory auditors
                        RSM RSA                                                                                            ERNST & YOUNG Audit
                (French original signed by:)                                                                             (French original signed by:)
                  Stéphane Coutsoloucas                                                                                     Marie-Henriette Joud




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REPORT ON THE ACTIVITIES
OF THE AUDIT COMMITTEE

Report by the Chairman of the Audit Committee
on the meeting held on 28 February 2007
On 28 February 2007, at 3 p.m., the Audit Committee of Mines de la Lucette (the “Company”) and its subsidiaries (together the “Group”) met
at the registered offices at 7 rue Scribe, 75009 Paris.

Present
- Mr Francis Berthomier, director and Chairman of the Audit Committee;
- Mr Adrien Blanc, representing MSREF Turque S.à r.l (by telephone) and member of the Audit Committee appointed by the Board;
- Mr Éric Pinon, CFO of the Mines de la Lucette Group and member of the Audit Committee appointed by the Board;
- Ms Marie-Henriette Joud, representing Ernst & Young Audit, joint statutory auditor;
- Mr Stéphane Coutsoloucas, representing RSM-RSA, joint statutory auditor;
- Mr Emmanuel Gey, deputy CFO of the Mines de la Lucette Group and appointed secretary of the Audit Committee.
The Audit Committee was therefore validly in session in the presence of its three members, Messrs Francis Berthomier, Adrien Blanc and Éric Pinon.

Purpose
The Audit Committee (created by the board of directors on 19 December 2006) met on 28 February 2007 to provide assistance to the Board
as part of its task of examining and drawing up the annual accounts for the 2006 financial year for the Company and its subsidiaries (together the
“Group”). The following documents were provided by the Group for this purpose:
• Management’s discussion and analysis;
• Group’s consolidated financial statements;
• Chairman’s report on internal control;
• Mines de la Lucette S.A.’s financial statements.
The following were also provided for information purposes:
• the draft press release;
• the draft presentation of the annual results to the financial analysts, with the understanding that they must be examined for consistency by the
statutory auditors. The Chairman of the Audit Committee wishes that the draft may be presented to the board of directors on 6 March 2006.
A detailed report of the discussions of the Audit Committee meeting of 28 February 2007 has been attached to this report.

Audit Committee’s opinion
The Audit Committee has examined the annual financial statements described above. The questions raised as a result of this examination received
satisfactory answers. The Audit Committee has no special comments to make which could raise any doubts about the annual accounts presented
by the Mines de la Lucette Group as drawn up on 31 December 2006. It has therefore issued a favourable opinion for approval of the annual
accounts presented to the board on 6 March 2007.




                                                                                                                           Mr Francis Berthomier




                                                                                                                                                     53

                                                                                                                   audit committee report
      CONSOLIDATED FINANCIAL STATEMENTS
      Year ended 31 December 2006




               CONTENTS                                                 73   Notes to the income statement
                                                                        73   Rental income
                 55    Consolidated income statement                    73   Ground rents paid
                 56    Consolidated balance sheet                       73   Unrecovered rental expense
                                                                        73   Landlord building expenses
                 57    Statement of changes in consolidated             73   Other income from assets held
                       shareholders’ equity                             74   Administrative expenses
                                                                        74   Net income from other activities
                 58    Consolidated cash flow statement
                                                                        74   Net gains on sale of buildings
                 59    Notes to the consolidated financial statements   74   Fair value changes on investment properties
                                                                        74   Net financial items
                 59    General environment                              75   Income tax
                 59    Reporting entity
                                                                        75   Number of employees and personnel costs
                 59    Accounting principles
                 60    Basis of consolidation                           75   Segment information
                 60    Changes in accounting policies
                                                                        77   Related parties
                 61    Accounting valuation and policies
                 64    Assumptions and use of estimates                 77   Subsequent events
                 64    Significant events in 2006
                                                                        78   Statutory auditors report on the
                 66    Consolidation scope                                   consolidated financial statement
                 67    Balance sheet notes
                 67    Change in non current assets
                 68    Maturity of current assets
                 68    Cash and cash equivalents
                 69    Change in share capital
                 69    Maturity of non current liabilities
                 69    Maturity of current liabilities
                 70    Change in borrowings
                 70    Net borrowings
                 70    Fair value of borrowings
                 71    Financial instruments
                 71    Interest rate exposure and counterparty risk
                 71    Taxation
                 72    Employee benefits
                 72    Off balance sheet commitments




54
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I. Consolidated income statement


In thousand euros                                                                      Notes                    2006               2005 restated

Rental income                                                                           V.4.1                74,523                      4,194
Ground rents paid                                                                       V.4.2                  (344)                       (121)
Unrecovered rental expenses                                                             V.4.3                  (248)                       (100)
Landlord building expenses                                                              V.4.4                  (251)                        (35)

Net rents                                                                                                    73,680                      3,938
Other income from assets held                                                           V.4.5                 1,646                           –
Asset management expenses                                                                                     (1,648)                      (613)
Corporate overheads                                                                                           (5,353)                    (1,483)
Change in provisions                                                                                           (368)                        (54)
Development expenses                                                                                           (351)                       (452)
Depreciation of operating assets                                                                               (114)                       (128)

Administrative expenses                                                                 V.4.6                (7,835)                     (2,731)
Other income                                                                                                    298                          17
Other expenses                                                                                                    (2)                         (8)

Net income from other activities                                                        V.4.7                   296                           9
Operating profit before changes in value                                                                     67,787                      1,217

Proceeds from disposals of investment properties                                                              5,848                      2,478
NBV of investment properties sold                                                                             (5,877)                    (2,114)

Capital gains/losses on sale of investment properties                                   V.4.8                    (29)                      364
Fair value changes on investment properties                                             V.4.9                90,657                      3,013
Operating profit                                                                                            158,415                      4,594

Financial expenses                                                                                          (51,808)                     (1,912)
Financial income                                                                                                948                        212

Net cost of debt                                                                      V.4.10                (50,860)                     (1,700)
Change in fair value of financial instruments                                         V.4.10                    188                           –
Other financial income and expenses                                                   V.4.10                   (503)                          –
Net financial items                                                                                         (51,175)                    (1,700)

Profit before tax                                                                                           107,239                      2,893

Current income tax                                                                    V.4.11                     (83)                    (1,361)
Deferred income tax                                                                   V.4.11                  (1,753)                    3,379
Net profit of consolidated companies                                                                        105,403                      4,911

Net profit of the consolidated group                                                                        105,403                      4,911

Of which minority interests                                                                                        –                          –
Of which Group share                                                                                        105,403                      4,911

Non-diluted average number of shares                                                                     10,106,367                 1,568,353
Earnings per share (€)                                                                                        10.43                        3.13
Diluted average number of shares                                                                         10,440,277                 1,568,353
Diluted earnings per share (€)                                                                                10.10                        3.13

The 2005 income statement, which is stated by function, has been restated based on the fair value method applied retrospectively from 1 January
2005 (see note V.1.4).




                                                                                                                                                    55

                                                                                                   consolidated financial statements
      II. Consolidated balance sheet

      ASSETS

      In thousand euros                                                                Notes                  2006             2005 restated

      Intangible assets                                                               V.3.1.b                 284                        60
      Investment properties                                                           V.3.1.a           1,998,580                  114,356
      Properties held for sale                                                        V.3.1.a                   –                    1,093
      Tangible assets under construction                                                                    4,437                    3,788
      Other tangible assets                                                                                   397                    2,191
                                                                                      V.3.1.b
      Loans and long-term receivables                                                                         187                    2,014
      Other financial assets                                                                                1,781                         –

       Total non current assets                                                                         2,005,667                  123,501
      Net trade and other receivables                                                   V.3.2              54,372                    4,712
      Restricted cash                                                                   V.3.3               8,281                         –
      Cash and cash equivalents                                                         V.3.3              33,871                    5,699

       Total current assets                                                                                96,524                   10,412
       Total assets                                                                                     2,102,191                  133,913



      LIABILITIES

      In thousand euros                                                                Notes                  2006             2005 restated

      Share capital                                                                                       287,198                   23,243
      Share premium                                                                                       160,669                    2,872
      Consolidated reserves                                                                                 8,226                    1,715
      Consolidated net profit                                                                             105,403                    4,911
      Minority interests                                                                                        –                         –

       Shareholders’ equity                                                                               561,495                   32,740
      Shareholder loan                                                                  V.3.7              31,250                    8,500
      Loan borrowings                                                                   V.3.7           1,378,074                   80,003
      Deposits and pledges received                                                     V.3.5              19,416                    3,033
      Other borrowings                                                                  V.3.5              18,622                         1
      Deferred tax liabilities                                                          V.3.5              10,388                         –
      Corporation tax payables                                                       V.3.12.b                 760                         –

       Total non current liabilities                                                                    1,458,510                   91,537
      Loan borrowings                                                                   V.3.6              30,638                    6,035
      Trade and other payables                                                          V.3.6              50,855                    2,665
      Corporation tax payable                                                        V.3.12.b                 693                      936

       Total current liabilities                                                                           82,186                    9,636
       Total liabilities                                                                                2,102,191                  133,913

      The balance sheet as at 31 December 2005 has been restated based on the fair value method applied retrospectively from 1 January 2005
      (see note V.1.4).




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III. Statement of changes in consolidated shareholders’ equity


In thousand euros                              Share capital   Share premium   Own shares       Return on       Net profit Total shareholders’
                                                                                                 earnings     for the year              equity

Balance at 1 January 2005 as published              23,243            2,967             –            (52)            111             26,269
– Appropriation of earnings for year N-1                                                             111            (111)                   –
– Fair value changes on properties                                                                 1,656          5,298                6,954
– Allocation of share issue costs                                       (96)                                                              (96)
– Net profit (group share)                                                                                          (388)               (388)
Balance at 31/12/2005 restated                      23,243            2,872             –          1,715          4,911              32,740

– Cash flow hedges                                                                                 1,593                               1,593

Total income and expense recorded
directly in shareholders’ equity                          –               –             –          1,593                –              1,593
– Net profit (group share)                                                                                      105,403             105,403

Total income and expenses for the year                    –               –             –          1,593        105,403             106,996
– Appropriation of earnings for year N-1                                                           4,911          (4,911)                   –
– Share issue for cash*                           205,205          123,123                                                          328,329
– Share issue for non-cash assets*                  58,750           35,250                                                          94,000
– Allocation of share issue costs*                                     (576)                                                            (576)
– Shares bond payment                                                                                122                                 122
– Purchases of own shares                                                             (89)                                                (89)
– Other                                                                                              (27)                                 (27)
Balance at 31/12/2006                             287,198          160,669            (89)         8,315        105,403             561,495

* See V.3.4.

Shareholders’ equity as at 31 December 2005 has been restated based on the fair value method applied retrospectively from 1 January 2005
(see note V.1.4).




                                                                                                                                                 57

                                                                                              consolidated financial statements
      IV. Consolidated cash flow statement


      In thousand euros                                                                                           Notes                         2006                    2005 restated

       Operating profit                                                                                                                    158,415                             4,594
      Change in depreciation and provisions                                                                                                      458                             186
      Fair value changes on properties                                                                             V.4.9                    (90,657)                          (3,013)
      Accrued income and expense on stock options and related instruments                                        V.3.13                          122                                –
      Other                                                                                                                                         –                               –
      Capital gains or losses on sale                                                                              V.4.8                          32                            (357)

       Operating cash flow before financial items and taxation                                                                               68,370                            1,410
      Financial expenses paid and financial income received                                                                                 (38,702)                          (1,750)
      Income tax paid                                                                                                                           (487)                           (425)

       Operating cash flow after financial items and taxation                                                                                29,182                             (765)
      Change in trade receivables                                                                                                             (5,681)                           (549)
      Change in trade payables                                                                                                                3,403                               (13)
      Change in other payables and other receivables                                                                                          (2,860)                         (1,984)

       Change in operating working capital                                                                                                    (5,138)                         (2,546)
       Net cash flow from operating activities                                                                                               24,043                           (3,311)

      Investment activities
      Acquisition of intangible assets                                                                          V.3.1.b                         (297)                             (62)
      Acquisition of investment properties                                                                      V.1.7.a                 (1,441,772)                          (61,917)
      Sale of tangible and intangible assets                                                                       V.4.8                      5,715                            2,478
      Acquisition of other financial assets                                                                                                     (150)                           (186)
      Sale of other financial assets                                                                            V.3.1.b                       1,982                            7,713
      Acquisition of shares in subsidiaries and net cash acquired(a)                                            V.1.7.a                     (36,965)                               (2)
       Net cash flow from investment activities                                                                                         (1,471,485)                          (51,976)

      Financing activities
      Capital increase(b)                                                                                       V.1.7.e                    327,752                                (95)
      Own shares                                                                                                                                 (89)                               –
      Dividends paid to parent company shareholders                                                                                                 –                               1
      Change in shareholder loan                                                                                   V.3.7                     22,750                            8,500
      Loans received                                                                                               V.3.7                 1,253,559                           48,093
      Loans repayments                                                                                             V.3.7                   (129,611)                          (7,291)
      Change in deposits and pledges received                                                                                                 9,951                            2,219
       Net cash flow from financing activities                                                                                           1,484,314                           51,427

       Change in cash and cash equivalents                                                                                                   36,871                           (3,860)

       Cash and cash equivalents brought forward                                                                                              5,261                            9,121

       Cash and cash equivalents carried forward                                                                                             42,132                            5,261
        Restricted cash and cash equivalents                                                                                                  8,281                                 –
        Cash and cash equivalents                                                                                                            33,871                            5,699
        Bank overdraft                                                                                                                           (19)                           (438)
      (a) This consists of cash flow from the acquisition of shares in SCI 21 in May 2006 for 6 million euros and the acquisition of the offices portfolio at the end of September 2006
      (cost of shares: 47 million euros, including 10 million euros deferred payments for two years, and cash acquired of 6 million euros).
      (b) The purchase of Casino warehouses described in note V.1.7 related to 10 out of 13 warehouses, in the form of assets received at 151.8 million euros in consideration for
      a 94 million euros share issue and debt assumed of 57.8 million euros. This transaction had no impact on cash and is not reflected in the consolidated cash flow statement.

      The 2005 consolidated cash flow statement has been restated based on the fair value method applied retrospectively from 1 January 2005
      (see note V.1.4). A portion of the cash and cash equivalents is restricted as at 31 December 2006 (see note V.3.3).




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V. Notes to the consolidated financial statements



V.1 General environment
V.1.1 REPORTING ENTITY
Mines de la Lucette SA (the “Company”) is domiciled in France. On 31 December 2006, the registered office of the Company was located at 61,
rue de Monceau – 75008 Paris. It was transferred to 7, rue Scribe – 75009 Paris on 1 January 2007.
The consolidated financial statements of the Company for the year ended 31 December 2006 include the Company and its subsidiaries (collectively
referred to as the “Group”). The Company’s consolidated financial statements were approved by the board of directors on 6 March 2007.
The Group’s primary business activities are the holding and management of commercial real estate assets, consisting mainly of offices and warehouses.

V.1.2 ACCOUNTING PRINCIPLES
In accordance with the EU Directive dated 19 July 2002, the Group’s consolidated financial statements have been prepared in accordance with the
presentation, accounting and valuation principles of the IFRS standards as adopted by the European Union on 31 December 2006. International
accounting standards include IFRS (International Financial Reporting Standards), IAS (International Accounting Standards), and their interpreta-
tions (SIC and IFRIC).
The Group’s consolidated financial statements were prepared under IFRS, with comparative figures for 2005 prepared under the same accounting
principles. The principles applied in the preparation of these financial statements comply with:
• all standards and interpretations adopted by the European Union as at 31 December 2006;
• applicable options and exemptions used.
The accounting policies adopted are consistent with those applied in the prior year, with the exception of the changes stated in notes V.1.2.a,
V.1.2.b and V.1.2.c below.

V.1.2.a Application of new standards, amended standards and interpretations of current standards within the European Union as at
31 December 2006 and mandatory applicable at this date
New standards, IFRS amendments and the new IFRIC interpretations in force as at 31 December 2006 did not have an impact on the Group financial
statements. These are as follows:
• amendment to IAS 19 “Treatment of actuarial gains and losses, group schemes and disclosures”,
• amendment to IAS 39 “Hedging of cash flow for future intercompany transactions”,
• amendment to IAS 39 “Fair value option”,
• amendment to IAS 39 and IFRS 4 “Financial guarantee agreements”,
• IFRIC 4 interpretation “Determining whether an arrangement contains a lease”.
The Group is not affected by the amendment to IAS 21 “Effects of changes in foreign exchange rates”, or by IFRS 6 “Exploration for and evaluation
of mineral resources”, or by the IFRIC 5 interpretation “Rights in interests arising from decommissioning, restoration and environmental
rehabilitation funds”, or by IFRIC 6 “Liabilities arising from participating in a specific market – waste electrical and electronic equipment”.

V.1.2.b Application of new standards, amended standards and interpretations of standards prior to the latest date for compulsory
application
The Group has chosen not to apply any standard, amended standard or interpretation of a standard for which the latest compulsory date for
application is after 31 December 2006.
Current standards of the European Union as at 31 December 2006 for which the latest deadline for application is after the Group’s balance sheet
date and which are relevant (or may be relevant) are as follows:
• IFRS 7 “Financial instruments : disclosures”,
• amendment IAS 1 “Share capital disclosures”,
• interpretation IFRIC 8 “Scope of IFRS 2”,
• interpretation IFRIC 9 “Reassessment of embedded derivatives”.
Furthermore, standards issued by the IASB as at 31 December 2006 but not yet adopted by the European Union at this date, which are relevant
for the Group, are as follows:
• interpretation IFRIC 10 “Interim financial reporting and impairment”,
• interpretation IFRIC 11 “IFRS 2 – Group and treasury shares transactions”,
• IFRS 8 “Operating segments”.
The Group is not affected by IFRIC 12 “Service concession arrangements”, which was published in November 2006 and must be adopted for all
periods beginning with effect from 1 January 2008.
These standards and interpretations have no impact on the valuation and accounting of the transactions.
With regard to the other standards and interpretations mentioned above, the Group is currently conducting a review of their actual impact on the
accounts. The Group does not plan to apply these standards and interpretations prior to the latest mandatory application date.




                                                                                                                                                        59

                                                                                                       consolidated financial statements
      V.1.2.c Options available under international accounting standards adopted by the Group
      Some of the international accounting standards stipulate options for the valuation and accounting of assets and liabilities.
      The options chosen by the Group are as follows:
      • valuation of its investment properties at fair value, as allowed under IAS 40. The impact of this choice, taken in 2006, is detailed in paragraph V.1.4
      below;
      • capitalisation of interest incurred during the period of construction and acquisition of tangible and intangible assets as allowed under IAS 23
      “Borrowing costs”.

      V.1.3 BASIS OF CONSOLIDATION
      The consolidated financial statements include the financial statements of the Company and those of its subsidiaries at 31 December every year. The
      financial statements of the subsidiaries are prepared for the same accounting period as those of the parent company and are based on the same
      accounting policies.
      All intercompany balances and transactions as well as income, expenses and unrealised gains/ losses, which are included in the net book value of
      assets, which derive from intercompany transactions are fully eliminated.
      Subsidiaries are consolidated with effect from the date of acquisition, which corresponds to the date on which the Group obtained control, and they
      continue to be consolidated until the date when the Group loses control. All companies held by Mines de la Lucette are wholly owned and are fully
      consolidated under the full consolidation method. There were no minority interests as at 31 December 2006.
      Business combinations are accounted for in accordance with the acquisition method. This involves recording the identifiable assets (including intangible
      assets not previously recognised) and the identifiable liabilities (including contingent liabilities, with the exception of future restructuring charges) of
      the business acquired at fair value.

      V.1.4 CHANGES IN ACCOUNTING POLICIES

      V.1.4.a Change in policy
      In 2006, and in accordance with the option offered by IAS 40, the Group has selected the fair value model for valuing investment properties. This
      model consists of stating investment properties at fair value and recording changes in value through the income statement. The balance sheet,
      income statement and cash flow statement for the year 2005 have been restated accordingly.
      In the past, the Group applied the cost model to value its investment properties based on IAS 16.

      V.1.4.b Changes in presentation
      In order to better reflect its business, the Group adopted an income statement presentation for 2006 that breaks down costs by function rather than
      by expenditure type as previously presented. In order to ensure comparability, the 2005 income statement was restated in order to present costs
      broken down by function in a similar way.
      The presentation of the cash flow statement was modified: it is still based on the indirect method but it now starts from the basis of operating profit
      rather than from net profit as in the past. In order to ensure comparability, the 2005 cash flow statement has also been restated.

      V.1.4.c Impacts of changes
      The adjustments and reclassifications between the published 2005 income statement stated by expense type using the cost model and the restated
      income statement stated by function at fair value are as follows:
      In thousand euros                                                                               2005           Fair value impact              2005 restated

      Net rent                                                                                       3,938                          0                      3,938

       Operating profit before changes in value                                                      (586)                     1,802                       1,217
      Capital gains/ losses on sale of investment properties                                           516                       (152)                       364
      Fair value changes on properties                                                                                         3,013                       3,013

       Operating profit                                                                                (69)                    4,663                       4,594

       Net financial items                                                                         (1,700)                          –                     (1,700)

       Profit before tax                                                                           (1,770)                     4,663                       2,893
      Income tax                                                                                     1,381                       636                       2,017

       Net profit of the consolidated group                                                          (389)                     5,299                       4,911
      Of which minority interests                                                                                                   –

       Of which net profit (group share)                                                             (389)                     5,299                       4,911
      Average number of shares                                                                  1,568,353                                             1,568,353

       Earnings per share (in euros)                                                                 (0.25)                     3.38                        3.13




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The main impacts are as follows:
• an increase in operating profit of 1.802 million euros due to a lack of depreciation charges;
• an increase in operating profit of 4.663 million euros due to fair value changes on sold and unsold properties;
• a deferred tax gain of 636 thousand euros arising from the release of the additional deferred tax to 2005 income at a rate of 34.33% from
1 January 2005 due to the change whereby properties are stated at fair value, following the introduction of SIIC status decided on 27 April 2005.
At 31 December 2005, the balance sheet impacts of the revised policy are as follows:
In thousand euros                                                                              2005          Fair value impact              2005 restated

ASSETS
Non current assets                                                                        116,548                      6,953                   123,501
Current assets                                                                              10,412                          –                    10,412
Total assets                                                                              126,960                      6,953                   133,913

LIABILITIES
Shareholders’ equity before net profit                                                      26,174                     1,655                     27,829
Consolidated net profit                                                                       (388)                    5,299                      4,911

Shareholders’ equity                                                                        25,786                     6,954                     32,740
Total non current liabilities                                                               91,536                          1                    91,537
Total current liabilities                                                                    9,638                         (2)                    9,636
Total liabilities                                                                         126,960                      6,953                   133,913

The main impacts are as follows:
• an increase in the value of properties of 6,953 thousand euros;
• an equivalent increase in shareholders’ equity, of which 5,299 thousand euros relates to 2005 earnings.

V.1.5 ACCOUNTING VALUATION AND POLICIES

V.1.5.a Investment properties (IAS 40)
The Company has chosen the fair value model, which consists, in accordance with the option offered under IAS 40, of recording investment prop-
erties at fair value and recording changes in value in the income statement.
Investment properties are initially stated at cost including transaction costs. The book value includes costs of improvements to the property when
incurred, provided that these meet the accounting criteria. The book value does not include ongoing repair and maintenance costs for the invest-
ment property. The investment properties are subsequently stated at fair value.

Fair value
The fair value of an investment property is the price at which the asset could be sold between two informed and consenting parties on an arms
length basis. It reflects actual market conditions and circumstances prevailing at the financial year-end date rather than at a past or future date, but
does not reflect future capital expenditure that would improve the property nor future benefits generated by this future capital expenditure.
The fair value is established based on independent expert valuation reports including taxes, applying a discount rate of 6.2%, which corresponds
to transfer tax and costs as at 31 December 2006 and 2005.
Changes in fair value are accounted under “Fair value changes on investment properties” and are determined as follows:
Change in fair value = market value at the end of the financial year – market value at the end of the prior year + amount of work and expenses
capitalised for the year.

Valuation methodology
All properties in the Group’s portfolio were valued as at 31 December 2006 by two independent appraisers.
To value the offices portfolio, DTZ Eurexi uses the “Discounted Cash flows” method and the yield method.
The two methods are then compared in order to apply the most appropriate method to value the assets.
The discounted cash flow valuation method consists of establishing the value in use of a property by discounting its cash flows over a given future
period to net present value.
The yield method (or income capitalisation) consists of capitalising an annual income including both existing rent and future income (e.g. rental
value, rental increases), and the differences between actual rent and future rent is taken into account by lower income or items specific to each asset.
The entire Warehouses portfolio was valued by CB Richard Ellis using the income capitalisation method, and the result was compared with values
per unit of surface area.
All other properties (mostly hotels) were valued by CB Richard Ellis using the income capitalisation method.
Market values are stated both “contracts concluded”, i.e. including all transfer fees and legal fees, and also as excluding transfer fees and legal fees.




                                                                                                                                                            61

                                                                                                          consolidated financial statements
      Accounting policies
      Investment properties are not depreciated.
      Until the completion of a building in construction, renovation or refitting for future use as an investment property, IAS 16 applies. After completion
      of the work, the property is classified for accounting purposes as an investment property, subject to meeting the definitions of IAS 40.
      Properties for which agents have been appointed for sale or a sale has been decided by the board of directors are reclassified in accordance with
      IFRS 5 as assets held for sale.

      Changes in use
      Properties are only transferred to the investment properties category if, and only if, there is a change in use, such as if the owner no longer occupies
      the property when it is rented to a third party or on completion of the construction or refitting of the property. Properties are only transferred from
      the investment properties category if, and only if, there is a change in use, such as if the owner begins to occupy the property or starts to fit it out
      in order to sell it.

      V.1.5.b Properties held for sale
      A property for which the sales process has been launched falls under the scope of IFRS 5. A property can be deemed to be available for sale if a
      formal decision to put it up for sale has been taken by the relevant management authority and the sale must be highly probable within twelve months.
      These properties are valued at fair value and are stated on a separate line on the balance sheet.
      There were no properties held for sale in the balance sheet as at 31 December 2006.

      V.1.5.c Tangible assets (IAS 16)
      In accordance with IAS 16, operating properties are valued at historical cost less accumulated depreciation and any impairment loss.
      Properties under construction are first recorded at cost and are subject to impairment tests at each balance sheet date. Once a property under con-
      struction is completed, it is treated as an investment property (IAS 40) and stated at fair value; any variation in value is accounted as a change in
      fair value in the income statement.

      V.1.5.d Intangible assets (IAS 38)
      Assets treated as intangible assets may be separated, sold, transferred, ceded under licence, leased or exchanged, either individually or as part
      of a contract with a related asset or liability. These assets may also result from contractual rights or other legal rights regardless of whether these
      rights can be sold or separated. Once they are first recorded, intangible assets are stated at cost less accumulated depreciation and impairment.
      Fixed assets with a finite useful life are depreciated on a straight line basis over the useful life. These useful lives are reviewed every year and an
      impairment test is performed once there is an indication of loss in value.

      V.1.5.e Asset impairment (IAS 36)
      In accordance with IAS 16, 36 and 40, tangible and intangible assets undergo impairment tests if, at the balance sheet date, indications of loss in
      value (indicators such as market value of the assets, changes in the use or the asset’s economic environment etc) have been identified.
      A recoverable value is then established for each separate property by external appraisers.
      In the event that the recoverable value is lower than the net book value, the Group may have to accrue for impairment affecting earnings.

      V.1.5.f Financial assets and borrowings (IAS 32/39)
      The application of IAS 32 and 39 requires the following accounting valuation principles and policies:

      • Financial assets
      Current financial assets comprise investment securities which are stated at fair value (i.e. likely realisable value) at each balance sheet date. The change in
      the difference between the net book value and the fair value brought forward and carried forward for each financial year is posted to “Net financial items”.

      • Borrowings
      All loans are initially recorded at cost (i.e. fair value, net of directly attributable costs). Subsequently, they are stated at amortised cost using effective
      interest rate. The change in the difference between the book value and the amotised cost brought forward and carried forward for each financial
      year is posted to “Net cost of debt”.
      Deposits paid by tenants, for which expiry is constantly renewed, are not discounted.

      • Accounting for hedging of future cash flows
      The Group has adopted an interest rate risk management policy using derivative financial instruments such as collars and interest risk swaps.
      These derivative financial instruments are recorded at fair value. Derivatives are accounted for as assets if the fair value is positive and as liabilities
      if the fair value is negative. The valuation of derivatives is based on generally accepted valuation models (e.g. discounted future cash flow method,
      Black and Scholes model).




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The Group has opted to account for hedging transactions as specified under IAS 39. At the start of a hedging operation, the Group specifies and
formally documents the hedging contract to which it seeks to apply hedge accounting. The Group expects the hedge to be effective in compen-
sating for fluctuations in fair value or cash flow.
All gains and losses from changes in fair value of derivatives that are not classified as hedging instruments are posted directly to the income statement.
Profits or losses corresponding to the effective portion of the hedge are posted directly to shareholders’ equity, whereas the ineffective portion is
taken to income.

V.1.5.g Taxation
Group companies which have opted for SIIC status as Listed Property Investment Companies are exempt from corporate income tax and capital gains tax.
Payables of exit tax for which the payment is spread over four years are discounted to present value. The impact of discounting is posted to “Net
financial items”.

V.1.5.h Receivables from tenants
Amounts due from tenants are stated at face value and are systematically reviewed on a case by case basis. A bad debt provision is established
for each balance owing based on any expected collection difficulties in respect of the amount considered to be at risk.

V.1.5.i Borrowing costs
The Group has chosen to apply the alternative method specified by IAS 23, which consists of capitalising borrowing costs within the related eligible assets.

V.1.5.j Earnings per share (IAS 33)
Basic earnings per share is calculated by dividing the parent company’s net profit for the year attributable to ordinary shareholders by the weighted
average number of ordinary shares in issue during the year.
To calculate diluted earnings per share, the average number of shares in issue is adjusted to take into account of the conversion of all ordinary shares
that may be issued in the future, notably due to stock options.
The dilution is calculated based on the “share buy-back method” specified under IAS 33. Under this method, the funds received following the
exercise of share warrants or options are deemed to be allocated first to the share buy-back at market price. This market price corresponds to the
average monthly share price weighted for volumes traded.
The theoretical number of shares that would be bought back at market price is then deducted from the total number of shares resulting from the
exercise of the share warrants or options. The resulting number is then added to the average number of shares in issue which then constitutes the
denominator of the equation.
The detailed calculation of the average number of shares before and after dilution from share warrants and stock options is as follows:
In thousand euros                                                                                                            2006                     2005

Average number of shares                                                                                              10,087,517                1,549,503
Adjustment for shares granted without consideration                                                                       18,850                   18,850

Average number of shares restated                                                                                     10,106,367                1,568,353
Impact of dilution from share warrants                                                                                   330,747                          –
Impact of dilution from stock options                                                                                      3,164                          –

Diluted average number of shares                                                                                      10,440,277                1,568,353

V.1.5.k Share-based payments
Under IFRS 2, the impact of any transaction involving payment in shares must be posted to the income statement.
Compensation paid in the Company’s own equity instruments to employees after 7 November 2002 is valued at the fair value of the instruments
as at the date granted.
The cost of the transactions paid in equity instruments is accounted for over the period during which the conditions for performance and/or services
are met. This period finishes on the date when the employees obtain an unconditional right to the instruments (“the rights acquisition date”). The
cumulative charge posted for these transactions at each year end until the rights acquisition date reflects the passing of this acquisition period
based on the Group’s best estimate, as at this date, of the number of instruments that will be acquired. The charge or income recorded in the
income statement of the year represents the difference between the accumulated expense as at the year end and the accumulated expense as at
the beginning of the year. The dilution of the outstanding options is reflected in the calculation of the diluted earnings per share.

V.1.5.l Own shares
If the Group buys back its own equity instruments (own shares), they are deducted from shareholders’ equity. No gain or loss is posted to the
income statement when shares are bought back, sold, issued or cancelled.




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                                                                                                            consolidated financial statements
      V.1.5.m Lease contracts
      There are two types of property leases as follows:
      • construction leases where the Company, Mines de la Lucette, is lessee;
      • leases granted to tenants of properties owned by the Group.
      According to IAS 17, a lease contract is an agreement by which the lessor transfers the right to use an asset for a given period to the lessee in
      exchange for a payment or a series of payments.
      IAS 17 distinguishes two categories of leases:
      • a finance lease is a lease contract the effect of which is to transfer to the lessee virtually all the risks and rewards of ownership of an asset. The
      actual transfer of ownership may or may not take place when the lease expires;
      • an operating lease covers all lease contracts other than a finance lease.
      Based on a review of the Company’s leases, they fall under the definition of operating leases as specified by IAS 17.
      Rental income and costs from operating leases are accrued on a straight line basis over the entire term of the lease contract.
      Consequently, step rents and rent-free periods granted are accrued over time and increase or reduce the rental income for the year. The base
      period is taken to be the period until the earliest cancellation date of the contract.

      V.1.5.n Segment information
      The Group’s highest level of segment information is a breakdown by business line distinguishing between the following:
      • Offices,
      • Warehouses,
      • Other assets.
      In view of the acquisitions during the year, the Group now considers the Warehouses business as a distinct segment that needs a separate
      presentation, in contrast with its treatment in the prior year when it was combined with the Offices segment.
      The Hotel segment is included in the Other Assets segment unlike the prior year.
      The second level of segment information of the Group is a breakdown by geographical region based on the location of the properties, distinguishing
      between the following:
      • Paris CBD (central business district);
      • Western Paris;
      • La Défense;
      • Île-de-France (Greater Paris);
      • Provinces.

      V.1.6 ASSUMPTIONS AND USE OF ESTIMATES
      To prepare the financial statements in accordance with Group accounting policies, the management has made certain assumptions and has also
      made use of estimates when necessary. The preparation of the financial statements requires Group management to make estimates and apply
      assumptions that affect the amounts stated under assets and liabilities in the consolidated balance sheet, and the disclosures covering contingent
      assets and liabilities at the date of preparing this financial information and the amounts stated under income and expenses for the year. This relates
      largely to the following items:
      • fair value of investment properties;
      • valuation of share-based payments;
      • valuation of financial instruments.
      Management constantly reviews its estimates and judgements based on past experience and various other factors considered reasonable that
      form the basis of its assessments of the book value of assets and liabilities. Actual results may differ from these estimates depending on different
      assumptions or conditions.
      Furthermore, the Group has concluded commercial leases on the investment properties in the portfolio. The Group considers that it retains virtually
      all the risks and rewards of ownership of the investment properties and treats them as operating leases for accounting purposes accordingly.

      V.1.7 SIGNIFICANT EVENTS IN 2006

      V.1.7.a Acquisitions and sales during the year

      Acquisition from KanAm, an investment fund
      In March 2006, the Group made a major acquisition of five very high quality office properties for 1,181 million euros. The properties are located in
      the Paris central business district (“CBD”), Western Paris and La Défense.
      These properties have a combined total surface area of 112,900 sqm and at 31 December 2006 generated secured annual rent of 58.8 million
      euros. They are leased to first rate tenants.
      Mines de la Lucette purchased Crystal Park and Tour Scor properties and undertook to retain them for five years. SCI Chambolle purchased the
      property at 7/9, avenue Messine, SCI Chassagne purchased 5/7, rue Scribe, and SCI Conti purchased River Plaza.




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Contributions and sales of warehouse properties by Immobilière Groupe Casino and by its real estate subsidiary SCI de l’Océan
Mines de la Lucette acquired 13 properties used as warehouses with a total surface area of 416,400 sqm located in the France for 204 million euros.
This transaction took place on 3 April 2006 following the general meeting of Mines de la Lucette. Ten of these warehouses were transferred in the
form of a capital contribution, and the remaining three as an asset sale. Twelve of the warehouses are operated by Easydis, a subsidiary of Casino
dedicated to the logistics business. Only the Chambéry warehouse, which was sold on 11 October 2006, is not operated by Easydis and has
guaranteed rental income for twelve months.
Mines de la Lucette purchased all these warehouses, except the Chambéry warehouse, under the French tax system known as “SIIC 2” and “SIIC 3”.
Under this system, the Group is required to hold these assets for five years.

Purchase of a warehouse at Longvic (Côte-d’Or)
On 9 May 2006, the Group acquired the entire share capital of the company SCI 21 for 6 million euros. This real estate investment company holds
a range of properties principally used as warehouses with a surface area of some 24,000 sqm. The agreed asset value as at the acquisition date
was 16 million euros.
At the acquisition date, a nine year lease with a minimum lease term of six years was signed with the company Transalliance.

Purchase of the Colisée property in La Défense
On 21 July 2006, Mines de la Lucette, via SCI Volnay, purchased the Colisée property for 196 million euros.
Colisée is an office property with a surface area of some 24,900 sqm and generates annual rental income of 12.6 million euros. It is rented to high
quality tenants including Moët Hennessy, ACE and Regus.

Purchase of a portfolio of eight office properties in Île-de-France
On 29 September 2006, the Group purchased the entire share capital of SNC Saint-Ouen Évry and SNC Trois Fontanot for 46 million euros from
the fund Westbrook Partners. These companies owned eight office properties located in the Île-de-France region and in West Paris. The agreed
asset value as at the acquisition date was 172 million euros.
The real estate portfolio represents a surface area of some 72,000 sqm.

Purchase of two office properties from Swiss group Firmenich
On 22 November 2006, Mines de la Lucette purchased two office properties in Neuilly-sur-Seine amounting to some 4,000 sqm from Swiss group
Firmenich for 27 million euros.

Sale of Chambéry
On 11 October 2006, Mines de la Lucette sold the vacant warehouse at Chambéry for 4.8 million euros.

Sale of residential properties at Boulogne-Billancourt
The remaining residential properties at Boulogne-Billancourt were sold in 2006.

V.1.7.b Equity loan
On 8 March 2006, MSREF Grillet BV and Mines de la Lucette signed a participating loan agreement for 350 million euros of which 303.3 million euros had
been drawn down as at 30 June 2006. The purpose of the loan was to fund the acquisitions of the KanAm portfolio and part of the Colisée property.
The loan was transferred to MSREF Turque S.à r.l when it purchased MSREF Grillet BV’s equity stake in Mines de la Lucette.
This loan was posted to share capital on the occasion of the July 2006 capital increase. On 21 July 2006, a further draw down was made for
31.2 million euros.

V.1.7.c Change in shareholding
On 20 June 2006, MSREF Grillet BV sold its entire equity stake (5,105,003 shares representing 93.39% of the share capital and voting rights) in
Mines de la Lucette and transferred the participating loan signed on 8 March 2006 to MSREF Turque S.à r.l.

V.1.7.d Change of Chairman & CEO
Mr Stéphane Theuriau was appointed Chairman & CEO by the board of directors of the Company on 6 September 2006 replacing Mr Pascal
Duhamel who remains a member of the Board.

V.1.7.e Capital increases

Capital increase in conjunction with the Casino transaction (see V.1.7.a)
On 3 April 2006, MSREF Grillet BV, majority shareholder of Mines de la Lucette until 20 June 2006, purchased all Mines de la Lucette shares allocated
to Immobilière Groupe Casino and its real estate subsidiary SCI de l’Océan in exchange for assets contributed for a total purchase price of 94 million euros.
The 57.8 million euros of debt corresponding to current account advances granted by Casino, Guichard-Perrachon SA and Immobilière Groupe
Casino were fully repaid by Mines de la Lucette via new debt as at the completion date of the asset contribution.
Consequently, the share capital of Mines de la Lucette SA was increased during the first quarter of 2006 to 81,992,520 euros divided into 5,466,168
fully paid-up shares, each with a nominal value of 15 euros.

Share capital transactions
Early in July 2006, Mines de la Lucette undertook two transactions affecting share capital:
• a rights issue of 328 million euros with preferential subscription right (13,665,420 shares issued at 24 euros);
• a deferred capital increase in the form of a bonus issue of share warrants maturing in July 2008.
At 31 December 2006, 53,784 share warrants had been exercised giving rise to the issue of 14,940 new shares (5,412,384 share warrants are
outstanding representing a future issue of 1,503,440 shares).
At 31 December 2006, Mines de la Lucette’s share capital amounted to 287,197,920 euros, divided into 19,146,528 shares.


                                                                                                                                                                65

                                                                                                             consolidated financial statements
      V.2 Consolidation scope
      Consolidated companies                     SIREN               Date of formation   Asset               Assets
                                                                     or acquisition      segment             held

      Parent company
      SA Mines de la Lucette                     582 061 727         –                   Offices             Crystal Park – 92200 Neuilly-sur-Seine
                                                                                                             Scor Tower – 92800 Puteaux-La Défense
                                                                                                             31, rue des Peupliers – Boulogne-Billancourt
                                                                                                             93, rue Dulud and avenue Charles-de-Gaulle –
                                                                                                             Neuilly-sur-Seine
                                                                                         Warehouses          13 Casino warehouses – provinces
                                                                                                             3 warehouses rue Papin – 91380 Chilly-Mazarin
                                                                                         Other Properties    Latitudes Seilh Hôtel – 31840 (Toulouse)
                                                                                                             Land 20, rue du Fief –
                                                                                                             92100 Boulogne-Billancourt
      Management company
      SAS M2L Gestion                            485 079 420         17/11/2005          –
      Operating companies
      SCI Gascogne                               483 334 652         13/07/2005          Offices             Les Espaces de Torcy – 77200 Torcy
                                                                                         Warehouses          Maisons-Alfort – 94700 Maisons-Alfort
                                                                                         Other Properties    Moreuil warehouse – 80110 Moreuil (Somme)
                                                                                                             Cap club hôtel et CERS – 40130 Cap-Breton
      SNC Vaillant Peupliers                     448 913 871         10/06/2003          Other Properties    Hôtel Radisson – 92100 Boulogne-Billancourt
      SCI Saint-Ouen Biron                       421 986 860         29/09/2006          Offices             Saint-Ouen Dieumegard – 93400 Saint-Ouen
                                                                                                             Saint-Ouen Biron – 93400 Saint-Ouen
      SCI Charenton de Gaulle                    424 114 312         29/09/2006          Offices             Charenton-le-Pont – 94220 Charenton
      SCI Évry Mozart                            423 528 132         29/09/2006          Offices             Évry Mozart – 91000 Évry
                                                                                                             Évry Champs – 91080 Courcouronnes
      SCI Antony Renaissance                     423 528 819         29/09/2006          Offices             Antony Renaissance – 91160 Antony
      SCI Évry Européen                          421 389 313         29/09/2006          Offices             Évry Européen – 91080 Courcouronnes
      SCI Nanterre Park                          423 525 237         29/09/2006          Offices             Nanterre Étoile Park – 92000 Nanterre
      SCI Chambolle                              488 874 371         08/03/2006          Offices             7/9 Messine – 75008 Paris
      SCI Chassagne                              488 873 928         08/03/2006          Offices             5/7 Scribe – 75009 Paris
      SCI Conti                                  488 873 886         07/03/2006          Offices             River Plaza – 92600 Asnières
      SCI Volnay                                 488 873 860         08/03/2006          Offices             Colisée – 92400 La Défense-Courbevoie
      SCI 21                                     440 153 427         10/05/2006          Warehouses          Longvic warehouse – 21100 Longvic (Dijon)
      Non-trading companies
      SCI Savigny                                487 723 967         20/12/2005          –                   –
      SCI Dordogne                               488 101 296         24/01/2001          –                   –
      SCI Loire                                  488 107 889         24/01/2001          –                   –
      SCI Seine                                  488 090 796         25/01/2006          –                   –
      SCI Chorey                                 488 871 559         08/03/2006          –                   –
      SCI Vosne                                  488 873 845         09/03/2006          –                   –
      SCI Mondotte                               489 406 355         31/03/2006          –                   –
      SCI Chinon                                 490 388 535         07/06/2006          –                   –
      SCI Morey                                  488 871 583         08/03/2006          –                   –
      Holding companies
      SARL Libourne                              489 254 177         27/03/2006          –                   –
      SNC Trois Fontanot                         423 525 344         29/09/2006          –                   –
      SNC Saint-Ouen Évry                        421 388 976         29/09/2006          –                   –
      SARL Landes                                483 205 720         13/07/2005          –                   –
      SARL Breton                                487 557 720         15/12/2005          –                   –
      SARL Garonne                               488 108 242         27/01/2006          –                   –
      SARL Odet                                  488 103 813         27/01/2006          –                   –
      SAS Milu Investissements                   487 557 589         15/12/2005          –                   –

      All companies of the Mines de la Lucette Group are fully consolidated and are wholly owned in terms of equity interest and voting rights. Their
      registered offices are all located in Paris. There was no change during the year to the equity interest or consolidation methods used in respect of
      companies consolidated for the year ended 31 December 2005.


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V.3 Balance sheet notes
V.3.1 CHANGE IN NON CURRENT ASSETS

V.3.1.a Investment properties
In thousand euros                                                                          Investment properties                                      Properties held for sale

At 1 January 2005 restated                                                                               25,863                                                          1,701
Acquisitions                                                                                             59,724                                                               –
Disposals                                                                                                   (880)                                                         (962)
Fair value adjustment                                                                                      2,646                                                           354
Reclassifications*                                                                                       27,003                                                               –

At 31 December 2005 restated                                                                            114,356                                                          1,093
Acquisitions                                                                                         1,796,334                                                                –
Disposals                                                                                                 (4,785)                                                        (1,093)
Fair value adjustment                                                                                    90,657                                                               –
Reclassifications                                                                                          2,018                                                              –

At 31 December 2006                                                                                  1,998,580                                                                –
* The 27 million euros reclassification relates to the delivery of the Radisson hotel in May 2005, which was previously classified as fixed assets under construction.

• The increase in investment properties relates to the purchase of office buildings at a consolidated cost of 1,576 million euros (see V.1.7.a) and
warehouses at a consolidated cost of 220 million euros (purchased from Casino and located at Longvic).
• The reduction in investment properties reflects the sale of a vacant warehouse located at Chambéry with a consolidated cost of 4.8 million euros.
The warehouse was sold on 11 October 2006 at a slightly higher price. The reduction in properties held for sale relate to sales from the portfolio
of residential housing in Boulogne for which the final apartment was sold on 15 September 2006.
• Changes in fair value amount to 90.7 million euros including 77.6 million euros in respect of office properties (see V.4.9).
• Reclassifications of investment properties during 2006 largely concern the reclassified loan secured against the Radisson hotel property and the
hotel linked to it from tangible assets to investment properties.

V.3.1.b Other non current assets
In thousand euros                                                   01/01/2006          Additions        Reductions Reclassifications            Fair value        31/12/2006

Intangible assets                                                           63                309                  (15)                –                 –                 357
Tangible assets under construction                                      4,097                 670                    –                 –                 –               4,767
Other tangible assets                                                   2,327                 335                  (22)          (2,131)                 –                 509
Loans and long-term receivables                                         2,014                 155             (1,982)                  –                 –                 187
Other financial assets                                                        0                  –                   –                 –            1,781                1,781

Gross value of other non current assets (1)                             8,501              1,470              (2,019)            (2,131)            1,781                7,602
Intangible assets                                                            (3)              (73)                   3                 –                 –                  (73)
Tangible assets under construction                                            –                  –                   –                 –                 –                    –
Other tangible assets                                                     (136)               (42)                  22             113                   –                  (42)

Depreciation of other non current assets (2)                              (139)              (114)                  25             113                   –                (115)
Tangible assets under construction                                        (309)               (21)                   –                 –                 –                (330)
Other tangible assets                                                         –               (70)                   –                 –                 –                  (70)

Impairment of other non current assets (3)                                (309)               (91)                   –                 –                 –                (400)
Intangible assets                                                           60                236                  (12)                –                 –                 284
Tangible assets under construction                                      3,788                 650                    –                 –                 –               4,437
Other tangible assets                                                   2,191                 224                    0           (2,018)                 –                 397
Loans and long-term receivables                                         2,014                 155             (1,982)                  –                 –                 187
Other financial assets                                                        0                  –                   –                 –            1,781                1,781
Net book value of other non current assets (1) – (2) – (3)              8,053              1,265              (1,994)           (2,018)             1,781                7,087




                                                                                                                                                                                   67

                                                                                                                          consolidated financial statements
      Tangible assets under construction principally comprise land located at 20, rue du Fief in Boulogne-Billancourt. The independent valuation of the
      property as at 31 December 2006 reduced compared to 31 December 2005, which caused the Group to increase the provision by 21 thousand euros
      during the year to 330 thousand euros.
      At 31 December 2005, other tangible assets principally comprise the loan secured against the Radisson hotel in Boulogne, which is owned by the
      Group and was reclassified at 31 December 2006 as an investment property together with the hotel linked to that loan.
      Other financial assets consist of derivatives valued at fair value at 31 December 2006 (see V.3.10).

      V.3.2 MATURITY OF CURRENT ASSETS

      In thousand euros                                                                        Up to 1 year             31/12/2006              31/12/2005

      Trade receivables                                                                            37,564                  37,564                   1,960
      Tax receivables                                                                              14,681                  14,681                   2,005
      Receivables from sale of fixed assets                                                           130                     130                         –
      Other receivables                                                                             1,650                   1,650                      657
      Prepaid expenses                                                                                394                     394                       90

       Gross values                                                                                54,419                  54,419                   4,712
      Bad debts on trade receivables                                                                   (47)                    (47)
       Net book value                                                                              54,372                  54,372                   4,712

      Trade receivables concern principally rent and additional charges for the first quarter 2007 invoiced in advance. The increase in trade receivables
      during the year arises due to the increased scale of the Company.
      Tax receivables principally comprise VAT on the purchase of the Colisée property. The authorities refunded the VAT on this property in February 2007.

      V.3.3 CASH AND CASH EQUIVALENTS

      In thousand euros                                                                               Cost               Fair value              Change in
                                                                                                                                                  fair value

      At 1 January 2006
      Sicav (marketable securities)                                                                 2,565                   2,614                       49
      Cash at bank                                                                                  3,085                   3,085                         –
      Restricted cash                                                                                    –                       –                        –
       Total                                                                                        5,650                   5,699                       49

      At 31 December 2006
      Sicav (marketable securities)                                                                23,436                  23,436                         –
      Cash at bank                                                                                 10,434                  10,434                         –
      Restricted cash (a)                                                                           8,281                   8,281                         –
       Total                                                                                       42,152                  42,152                         –

      A portion of the cash and cash equivalents is remunerated at between EONIA – 0.30% and EONIA – 0.50% rates. The remaining balance is invested
      in Sicav mutual funds in the regular monetary assets class with maturity of less than three months. These Sicav funds have very low volatility and
      offer a return very close to EONIA.

      (a) Restricted cash and cash equivalents
      When Lehman Brothers Bankhaus AG and Morgan Stanley Bank International Ltd set up the financing for the purchase of the KanAm and Casino
      assets, a rental payments transfer arrangement was implemented for their benefit. Income received is secured in an account in their name and repaid
      to the Group, less interest and principal due, at each loan interest payment date, i.e. 15 January, 15 April, 15 July and 15 October. These accounts
      are remunerated. The restricted cash stated in the balance sheet at 31 December 2006, less debt repayments, was released on 17 January 2007.




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V.3.4 CHANGE IN SHARE CAPITAL

                                                                      Number of shares                                            in euros
Period         Transaction type               Note       Balance at          issued       Balance at    Share capital Share premium           Issue           Total
                                                          01/01/06                         31/12/06                                 expenses charged

31/12/2005 Ordinary shares                           1,549,503                                          23,242,545       2,871,544                      26,114,089
03/04/2006 Share issue for non-cash assets V.1.7.a                       3,916,665        5,466,168     58,749,975      35,250,025          (107,805)   93,892,195
20/07/2006 Capital increase                                             13,665,420       19,131,588 204,981,300 122,988,780                 (468,384) 327,501,696
15/08/2006 Exercise of share warrants                                           100      19,131,688           1,500            900                           2,400
28/08/2006 Exercise of share warrants                                         7,985      19,139,673        119,775          71,865                        191,640
15/09/2006 Exercise of share warrants                                           145      19,139,818           2,175          1,305                           3,480
15/10/2006 Exercise of share warrants          V.1.7.e                          180      19,139,998           2,700          1,620                           4,320
05/11/2006 Exercise of share warrants                                           270      19,140,268           4,050          2,430                           6,480
08/11/2006 Exercise of share warrants                                         6,110      19,146,378         91,650          54,990                        146,640
20/11/2006 Exercise of share warrants                                            25      19,146,403               375          225                             600
15/12/2006 Exercise of share warrants                                           125      19,146,528           1,875          1,125                           3,000
31/12/2006                                                                               19,146,528 287,197,920 161,244,809                 (576,189) 447,866,540

There were two major capital increases on 3 April 2006 in conjunction with the purchase of the Casino properties and on 20 July 2006 in order to
strengthen the balance sheet structure based as described in point V.1.7.

V.3.5 MATURITY OF NON CURRENT LIABILITIES

In thousand euros                                               Gross at 31/12/2006       Between 1 and 5 years         More than 5 years                31/12/2005

Shareholder loan                                                            31,250                           –                   31,250                      8,500
Long and medium term borrowings                                          1,378,074                     578,793                  799,281                    80,003

Total non current portion of borrowings                                  1,409,324                     578,793                  830,531                    88,503
Deposits and pledges received                                               19,416                          76                   19,340                      3,033
Other borrowings                                                            18,622                      14,879                    3,743                          1
Deferred tax   liabilities(1)                                               10,388                      10,388                         –                         –
Long and medium term corporation tax payables                                   760                       760                          –                         –
Total                                                                    1,458,510                     604,896                  853,614                    91,537

(1) See V.3.12.a

Other borrowings relate to discounted payables in respect of work performed on the warehouses purchased from Casino group for 11 million euros
and a deferred payment of 9 million euros for the purchase of eight office properties from the Westbrook Partners fund.

V.3.6 MATURITY OF CURRENT LIABILITIES

In thousand euros                                                                                                             31/12/2006                 31/12/2005

Current portion of borrowings (principal)                                                                                        15,902                      5,449
Accrued interest not yet due                                                                                                     14,717                        147
Current bank overdrafts                                                                                                               19                       438

Total current portion of borrowings                                                                                              30,638                      6,035
Trade payables                                                                                                                    4,662                        948
Fixed asset payables                                                                                                                 256                        34
Other payables                                                                                                                    3,747                        132
Deferred income                                                                                                                  32,074                      1,243
Tax and social security payables                                                                                                 10,116                        308

Total trade and other payables                                                                                                   50,855                      2,665
Current portion of corporation tax payables                                                                                          693                       936
Total current liabilities                                                                                                        82,186                      9,636

Deferred income is mainly attributable to first half 2007 rents invoiced before year-end 2006.




                                                                                                                                                                      69

                                                                                                                    consolidated financial statements
      V.3.7 CHANGE IN BORROWINGS

      In thousand euros                                                              01/01/2006                          Increase                Reduction                   31/12/2006

      Non current borrowings
      Shareholder loan                                                                    8,500                         334,250 (1)              (311,500) (1)                  31,250
      Long and medium term borrowings                                                    80,003                    1,420,415 (3)                 (122,344) (2)              1,378,074

       Total                                                                             88,503                    1,754,665                     (433,844)                  1,409,324
      Current borrowings
      Current portion of borrowings                                                       5,449                          17,720 (3)                 (7,267) (2)                 15,902
      Accrued interest                                                                        147                        14,570                           –                     14,717
      Current bank overdrafts                                                                 438                              –                      (419)                           19

       Total                                                                              6,035                          32,290                     (7,686)                     30,638
       Total borrowings                                                                  94,538                    1,786,954                     (441,530)                  1,439,962

      (1) The shareholder loan of 31.2 million euros taken out with the majority shareholder is repayable at the Company’s discretion. The net change during the year amounts to 22.7 mil-
      lion euros. In July 2006, 303 million euros were transferred to share capital.
      (2) Total loan repayments including reduction in current and non current borrowings amount to 129.6 million euros.
      (3) The additions to current and non current borrowings of 1,438.6 million euros include certain non-cash transactions which are therefore not stated on the cash flow
      statement (see IV). This specifically relates to the non-cash capital contribution in conjunction with the acquisition of the Casino warehouses in April 2006 and the payables
      assumed as part of the SCI 21 takeover in May 2006 (relating to the Longvic warehouse) and the portfolio of eight office properties in September 2006.


      V.3.8 NET BORROWINGS

      In thousand euros                                                               Total         Less than 1 year         Between 1 year    More than 5 years                   Total
                                                                             at 31/12/2006                                      and 5 years                               at 31/12/2005

      Borrowings
      Shareholder loan                                                             31,250                         –                       –              31,250                   8,500
      Long and medium term borrowings                                          1,378,074                          –                 578,793            799,281                  80,003
      Current borrowings                                                           30,638                   30,638                        –                       –               6,035

       Total                                                                   1,439,962                    30,638                  578,793            830,531                  94,538
      Cash and cash equivalents
      Cash equivalents                                                            (23,436)                 (23,436)                       –                       –              (2,614)
      Restricted and available cash and cash equivalents                          (18,715)                 (18,715)                       –                       –              (3,085)

       Total                                                                      (42,152)                 (42,152)                       –                       –              (5,699)
       Net balance                                                             1,397,811                   (11,513)                 578,793            830,531                  88,838

      The principal loans granted to the Group are subject to contractual provisions regarding financial covenants with which the Group is bound to
      comply and which are regularly reported to the credit institutions concerned.
      The covenant with which the Group must comply are as follows:
      • “Financial debt/portfolio valuation” ratio: lower than ratios ranging between 65% and 80%;
      • “Net rental income/interest” ratio: higher than ratios ranging between 1.2 and 1.4.
      At 31 December 2006, the “Financial debt/portfolio valuation” ratio amounted to 70.7% and the “Net rental income/interest ratio” stood at 1.69.

      V.3.9 FAIR VALUE OF BORROWINGS

      In thousand euros                                                                                                Book value              Market value                   Difference
                                                                                                                                              of borrowings

       Borrowings at 31/12/2005                                                                                          94,538                    97,685                        (3,147)
      Fixed rate debt*                                                                                             1,215,318                   1,199,051                        16,267
      Variable rate payables hedged                                                                                     151,871                   151,871                              –

       Fixed rate payables after hedging                                                                           1,367,189                   1,350,922                        16,267
      Variable rate debt                                                                                                 58,056                    58,056                              –
      Accrued interest                                                                                                   14,717                    14,717                              –
       Borrowings at 31/12/2006                                                                                    1,439,962                   1,423,695                        16,267

       Change                                                                                                                                                                   19,414
      * Including the shareholder loan of 31,250 thousand euros, which was not valued during the year.




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V.3.10 FINANCIAL INSTRUMENTS
In accordance with its policy for interest rate risks (see V.1.5.f.3), Mines de la Lucette took out six swaps and a collar in 2006. Thanks to these instru-
ments, the fixed rate debt (including variable rate debt after hedging), account for 96% of borrowings.
• At 31 December 2006, the Group had six swaps outstanding designed to hedge against interest rate risks on loans taken out to fund the purchase
of eight office properties from Westbrook Partners:
                                                                                                      Cash flow hedges
Fixed rate payer                                            Maturity          Amount (In thousand euros)                  Swap rate            Valuation at 31/12/2006

Nanterre Étoile Park                                   29/09/2013                               24,330                      3.76%                                346
Charenton de Gaulle                                    29/09/2013                               26,880                      3.76%                                383
Antony Renaissance                                     29/09/2013                               23,790                      3.76%                                339
Saint-Ouen Biron                                       29/09/2011                               26,600                      3.72%                                308
Évry Européen                                          29/09/2011                               11,350                      3.72%                                132
Évry Mozart                                            29/09/2011                               12,050                      3.72%                                140
Total                                                                                          125,000                                                         1,648

• Furthermore, Mines de la Lucette contracted a collar in November 2006 with a notional value of 21 million euros, comprising a 3.49% floor and
a 4.25% cap, maturing in November 2013. This derivative is designed to hedge the borrowings taken out to fund the purchase of assets from the
Firmenich group. At 31 December 2006, this collar is valued at 133 thousand euros.

• The collar “included” in the loan has been recorded in SCI 21’s accounts (relating to Longvic’s warehouse) with a notional value of 9,945 thou-
sand euros and is not disclosed separately.

V.3.11 INTEREST RATE EXPOSURE AND COUNTERPARTY RISK
• Interest rate exposure: cashflow hedge on financial costs
Variable rate debts account for 14% of consolidated borrowings at 31 December 2006 before hedging and 4% after hedging. They consist exclu-
sively of mortgage loans signed with banks.
An increase in interest rates on which the variable rate debts are indexed (Euribor 3 months) may cause an increase in future interest expenses.
Specifically, a rise of 1 point in interest rates would increase financial expenses by some 0.7 million euros.
At 31 December 2006, fixed rate payables (including variable rate payables after hedging) account for 96% of borrowings.

• Counterparty risk
The use of derivatives to limit interest rate risks exposes the Group to a potential bad debt risk of a counterparty. In order to limit the counterparty
risk, the Group only undertakes hedging transactions with very large financial institutions.

V.3.12 TAXATION
The tax system is described under paragraph “Income tax” in the note on net profit under V.4.11.

V.3.12.a Deferred tax
Deferred tax liabilities relate to the tax effect of the exit tax payable on the difference of 8.6 million euros between the fair value of the properties and
their tax value, as at the acquisition from the fund Westbrook Partners dated of 29 September 2006. The change in fair value of these assets over
the fourth quarter 2006 led to an adjustment of 1.7 million euros to deferred tax that was posted into the income statement and this brought
the tax liability to 10.4 million euros at 31 December 2006. The election of SIIC status for the SCI holding these assets is due to be taken prior
to 30 April 2007, with backdated effect to 1 January 2007.
The taxable activities of the Mines de la Lucette group generated a tax loss of 3 million euros which was not registered as an asset due to a lack
of a reliable turnaround plan.

V.3.12.b Corporation tax payables
In thousand euros                                                                                 Current portion        Non current portion                     Total

Exit tax*                                                                                                    562                       760                     1,322
Corporation tax                                                                                              131                                                 131
Total                                                                                                        693                       760                     1,453

* The exit tax liability amounts to 685 thousand euros for SCI 21 and 636 thousand euros for Mines de la Lucette SA.




                                                                                                                                                                         71

                                                                                                                       consolidated financial statements
      V.3.13 EMPLOYEE BENEFITS

      V.3.13.a Bonus shares
      18,500 bonus shares were granted to Group executives following a decision of the board of directors dated 27 April 2006. The employees concerned
      will only take ownership of these shares after a period of two years and they must hold them for a further two years before selling them. The compen-
      sation expense resulting from this issue is recorded in the year when the shares are granted and amounts to 94 thousand euros for the year ended
      31 December 2006.

      V.3.13.b Stock options
      On 21 August 2006, the Board decided to grant 55,660 stock subscription or stock purchase options of the Company to the Group executives.
      The exercise price of each stock subscription or purchase option was set at 29.02 euros. 25% of these options may be exercised in each of the
      following respective periods: between two and six years after the grant date, between three and six years after the grant date, between four and
      six years after the grant date and between five and six years after the grant date.
      Stock options are valued in accordance with the Black and Scholes method. The compensation cost arising is accounted for in the year when the
      options were granted and amounted to 28 thousand euros in the year ended 31 December 2006.
      Since no options were exercised in 2006, no shares were issued during the year in respect of the stock option plan.

      V.3.13.c Retirement bonus
      In view of the composition of Mines de la Lucette’s workforce in terms of age, years of service etc. the Company’s liability for retirement payments
      is not material (less than 1,000 euros).

      V.3.14 OFF BALANCE SHEET COMMITMENTS

      V.3.14.a Commitments granted

      Asset pledges
      In conjunction with various acquisitions during 2006, bank facilities were received in consideration for:
      (i) pledges of shares by the shareholders Mines de la Lucette and SAS Milu Investissements to the benefit of financial institutions, principally Lehman
      Brothers Bankhaus Aktiengesellschaft, Morgan Stanley Bank International Ltd, IXIS Corporate and Investments, Eurohypo and Landesbank Saar.
      The companies whose shares were pledged are the real estate companies SNC Vaillant Peupliers, SCI Gascogne, SCI 21, SCI Chambolle, SCI
      Chassagne, SCI Conti, SCI Volnay, SARL Libourne, SNC Trois Fontanot, SCI Charenton de Gaulle, SCI Nanterre Étoile Park, SCI Antony
      Renaissance, SNC Saint-Ouen Évry, SCI Saint-Ouen Biron, SCI Évry Mozart, and SCI Évry Européen;
      (ii) pledges of bank accounts held by the said companies;
      (iii) Mines de la Lucette pledged shareholder loan receivables made to the real estate companies SCI Conti, SCI Chassagne, SCI Chambolle and
      SCI Volnay to the benefit of the banks.

      Real security interests
      In thousand euros                               Balance of principal amount due    Original loan amount        Original security            Fair market value
                                                                        at 31/12/2006                                interest amount          of mortgaged assets
                                                                                                                                         excl. rights at 31/12/2006

      Mortgage                                                             260,404                                          264,528                      422,522
      Lender’s priviledge
      and promise of mortgage                                            1,133,587                                       1,151,535                    1,579,128

       Secured bank debt                                                 1,393,991               1,416,063               1,416,063                    2,001,650

       Unsecured bank debt                                                         –                 15,526                         –                            –
       Total bank debt                                                   1,393,991               1,431,589                          –                            –


      V.3.14.b Commitments received

      Mining concessions
      The administrative procedure for waiving concessions is progressing as planned and it is not currently planned to incur significant additional
      expenses on this matter.

      Representations and guarantees and VAT guarantee
      Under the SCI 21 shares sale and purchase agreement dated 9 May 2006, the vendor provided to Mines de la Lucette and SAS Milu
      Investissements representations and guarantees covering the accuracy of its representations, warranting that there would be no further liabilities
      after the shares transfer date or any additional tax assessments.
      Under the SNC Trois Fontanot and SNC Saint-Ouen Évry 21 shares sale and purchase agreements dated 29 September 2006, the vendor provided
      SARL Libourne representations and guarantees covering the accuracy of its representations, warranting that there would be no reduction in assets
      or increase in liabilities or any additional tax assessments.
      In conjunction with the acquisitions made in 2006, the companies concerned obtained a VAT guarantee from the previous owners.




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V.3.14.c Other commitments
SNC Vaillant Peupliers entered into a commercial lease with Hôtelière Boulonnaise SARL effective from completion of the construction of the
Radisson hotel in Boulogne, for a minimum twelve year term and a minimum annual rent of 2.6 million euros.
Mines de la Lucette has committed to SAS Hôtels A/S, Denmark, the manager of the hotel that SNC Vaillant Peupliers will continue to honour the
commercial lease throughout the twenty year term of the management contract between SAS Hotels A/S Denmark and Sarl Hôtelière Boulonnaise.
This commitment is in exchange for an earnings guarantee granted by SAS Hotels A/S Denmark to Hôtelière Boulonnaise Sarl, which was transferred
to SNC Vaillant Peupliers (in respect of a rental guarantee) and to Eurohypo as security interest for the loan.
Mines de la Lucette Group executed promises of sale subject to conditions precedent in relation to sale before completion transactions (“VEFA”)
acting on its own account in Paris and Western Paris. These transactions relate to some 24,500 sqm of office properties and are subject to obtain-
ing the relevant construction permit.
At 31 December 2006, all leases together represent a total annual rent for a full year of €106 million, which are payable as stated below:
                                                                           Lease maturities table (In million euros)
Years                                      Per lease-end date                      % of total                Per next break              % of total
                                                                                                                option date

2007                                                     5.8                             5%                             14.3                 13%
2008                                                     4.0                             4%                              6.1                   6%
2009                                                     2.7                             3%                             13.7                 13%
2010                                                     5.1                             5%                              4.2                   4%
2011                                                     3.7                             3%                              3.3                   3%
2012                                                    19.2                            18%                             16.5                 16%
2013                                                    12.0                            11%                              7.5                   7%
2014                                                     4.6                             4%                              0.1                   0%
2015                                                    17.7                            17%                             13.7                 13%
2016                                                    20.9                            20%                             20.9                 20%
> 2016                                                  10.7                            10%                              6.0                   6%
Total                                                 106.4                           100%                             106.4                100%




V.4 Notes to the income statement
V.4.1 RENTAL INCOME
Rental income comprises rent and related income (e.g. arrangement fees, parking revenues etc.) charged for the office and warehouse properties
during the year. Rent-free periods, step-rents and key-money are spread over the term of the lease (see V.1.5 Accounting valuation and policies).
The expense recharges and recoveries are also posted to rental income.

V.4.2 GROUND RENTS PAID
Ground rents paid of 344 thousand euros relate to fees paid when the land was subject to a construction lease. Most of this expense relates to the
warehouses located at Chilly-Mazarin (257 thousand euros).

V.4.3 UNRECOVERED RENTAL EXPENSE
These expenses of 248 thousand euros are stated net of recharges to tenants and largely reflect costs arising on vacant premises. They relate prin-
cipally to the warehouses at Chilly-Mazarin in respect of 81 thousand euros and the Charenton property in respect of 66 thousand euros.

V.4.4 LANDLORD BUILDING EXPENSES
These expenses of 251 thousand euros principally relate to rental charges payable by landlords, renovation charges, administrative costs and dis-
putes.

V.4.5 OTHER INCOME FROM ASSETS HELD
The income of 1,646 thousand euros corresponds to compensation received from the tenant of the Moreuil warehouse following early cancellation
and departure in November 2006.




                                                                                                                                                      73

                                                                                                            consolidated financial statements
      V.4.6 ADMINISTRATIVE EXPENSES
      Administrative expenses include head office costs and corporate overheads of Mines de la Lucette Group. It also includes costs relating to planned
      acquisitions and rent on the premises occupied by the Group in 2006.

      V.4.7 NET INCOME FROM OTHER ACTIVITIES
      Income on other activities largely relates to cancellation of the Cidem guarantee in conjunction with the cessation of mining activities.

      V.4.8 NET GAINS ON SALE OF BUILDINGS

      In thousand euros                                                                                                       2006                    2005

      Proceeds from disposal of investment properties                                                                       5,848                   2,478
      NBV Investment properties sold                                                                                        (5,877)                 (2,114)
       Capital gain on sale of investment properties                                                                           (29)                   364

      The 2006 net gains on sale relate principally to the sale of apartments located at Boulogne-Billancourt, the last of which was sold on 15 September
      2006 for 1 million euros, and the sale on 11 October 2006 of the vacant warehouse in Chambéry for 4.8 million euros.
      In view of the receivables on property sales of 133 thousand euros, the impact of property sales stated in the cash flow statement is 5,715,000 euros
      (see IV).

      V.4.9 FAIR VALUE CHANGES ON INVESTMENT PROPERTIES
      This line reflects changes in fair value on investment properties and properties held for sale (see V.3.1.a).
      In thousand euros                                                                                                       2006                    2005

      Warehouses
      Assets held at 31 December 2005                                                                                         (503)                  (864)
      Acquisitions in 2006                                                                                                  (1,665)                      –

       Total                                                                                                                (2,168)                  (864)
      Offices
      Assets held at 31 December 2005                                                                                         180                     179
      Acquisitions in 2006                                                                                                 77,479                        –

       Total                                                                                                               77,659                     179
      Other assets
      Assets held at 31 December 2005                                                                                      12,366                   3,698
      Acquisitions in 2006                                                                                                  2,800                        –

       Total                                                                                                               15,166                   3,698
       Fair value changes on investment properties                                                                         90,657                   3,013


      V.4.10 NET FINANCIAL ITEMS

      In thousand euros                                                                                                       2006                    2005

      Investment income on cash and cash equivalents                                                                          313                     166
      Gain on sale of investment securities                                                                                   635                        –
      Change in value of investment securities                                                                                 (49)                    46
      Interest on loans from financial institutions                                                                        (46,294)                 (1,899)
      Interest on loans from shareholders                                                                                   (5,465)                    (13)

       Net cost of debt                                                                                                    (50,860)                (1,700)
      Change in fairvalue of financial instruments                                                                            188                        –
      Other                                                                                                                   (503)                      –
       Net financial items                                                                                                 (51,175)                (1,700)




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V.4.11 INCOME TAX

In thousand euros                                                                                                       2006                 2005

Corporation tax                                                                                                          (83)              (1,361)
Deferred tax                                                                                                          (1,753)              3,379
Total taxation                                                                                                       (1,837)               2,017

On 26 April 2005, Mines de la Lucette opted for the tax system applicable to Listed Property Investment Companies (“SIIC”) specified under arti-
cle 208 C of the French General Tax Code (“CGI”), backdated to 1 January 2005, following approval from the board of directors on 25 April 2005.
The corporation tax charge for the year ended 31 December 2006 corresponds to the Group’s non-exempt activities, i.e. taxable income on the
services business of the management company M2L Gestion undertaken with the other Group companies and deferred tax on the fair value adjust-
ment for investment properties (eight office properties) in Île-de-France purchased from the investment fund Westbrook Partners.
In thousand euros                                                                        SIIC sector           Taxable sector                Total

Profit before tax                                                                           97,112                   10,128              107,239

Theoretical tax charge at 16.5%                                                            (16,023)                  (1,671)             (17,694)
Difference in rates between 16.5% and 33.33%                                                                             (45)                 (45)
Exempt sector                                                                               16,023                                        16,023
Other non taxable items                                                                                                 (120)                (120)

Actual tax charge                                                                                 0                  (1,837)               (1,837)


V.4.12 NUMBER OF EMPLOYEES AND PERSONNEL COSTS
At 31 December 2006 the number of employees was 23 managers and 2 staff (versus 7 managers and 1 staff at 31 December 2005). Personnel
costs totalled 1.8 million euros in 2006 (vs 0.2 million euros in 2005).



V.5 Segment information
The Group’s top level segment information presentation is broken down by the following main business lines:
• Offices;
• Warehouses;
• Other Assets.
The Group’s second level of segment information presentation is broken down by geographical region. The balance sheet items are as follows:
In thousand euros                           Offices      Warehouses       Other Assets          Unallocated       Net book value    Net book value
                                                                                                                      31/12/2006        31/12/2005

Non current assets
Intangible assets                                –                –                 –                    284                284                60
Investment properties                   1,666,376          237,254            94,950                       –         1,998,580           114,356
Properties held for sale                         –                –                 –                      –                    –          1,093
Properties under construction                    –                –            3,785                     652              4,437            3,788
Other tangible assets                            –                –                 –                    397                397            2,191
Financial assets                                 –                –                 –                  1,968              1,968            2,014
Total                                   1,666,376          237,254            98,735                   3,302         2,005,667           123,501

As a %                                    83.08%            11.83%             4.92%                   0.16%          100.00%




                                                                                                                                                     75

                                                                                                         consolidated financial statements
      In thousand euros                         Offices   Warehouses    Other Assets    Unallocated   Net book value     Net book value
                                                                                                          31/12/2006         31/12/2005

      Current assets
      Net trade and other receivables          46,222         5,565            1,925          661           54,372              4,712
      Restricted cash and cash equivalents           –            –                –        8,281            8,281                   –
      Cash and cash equivalents                      –            –                –       33,871           33,871              5,699
       Total                                   46,222         5,565            1,925       42,812           96,524             10,412

      As a %                                   47.89%         5.76%           1.99%       44.35%          100.00%


      In thousand euros                         Offices   Warehouses    Other Assets    Unallocated   Net book value     Net book value
                                                                                                          31/12/2006         31/12/2005

      Non current liabilities
      Shareholder loan                               –            –                –       31,250           31,250              8,500
      Long and medium term borrowings        1,190,240      122,070           65,763                     1,378,074             80,003
      Deposits and pledges received            18,115            33            1,268                        19,416              3,033
      Other borrowings                          9,337         7,127                –        2,158           18,622                   1
      Deferred tax liabilities                 10,388             –                –                        10,388                   –
      Long and medium term corporate
      tax payables                                312           448                –                           760
       Total                                 1,228,393      129,678           67,031       33,408        1,458,510             91,537

      As a %                                   84.22%         8.89%           4.60%         2.29%         100.00%


      In thousand euros                         Offices   Warehouses    Other Assets    Unallocated   Net book value     Net book value
                                                                                                          31/12/2006         31/12/2005

      Current liabilities
      Current portion of borrowings            25,297         1,473            1,866        2,003           30,638              6,035
      Trade and other payables                 39,559         7,988            1,251        2,057           50,855              2,665
      Current portion of corporate
      tax payables                                368           320                              5             693                936
       Total                                   65,223         9,781            3,118        4,065           82,186              9,636

      As a %                                   79.36%       11.90%            3.79%         4.95%         100.00%

      The segment breakdown of earnings is as follows:
      In thousand euros                                                2006                                            2005
                                                 Rental           %               Net            %            Rental                %
                                                income                           rent                        income

      Paris CBD                                 9,135            12            9,059            12                5                  0
      Western Paris                            28,587            38           28,401            39             317                   8
      La Défense                               14,192            19           14,145            19                –                  0
      Île-de-France                             2,326             3            2,212             3                –                  0

       Offices                                 54,241            73           53,817            73             322                   8
      Île-de-France                               675             1             331              0           1,015                  24
      Provinces                                13,947            19           13,900            19               12                  0

       Warehouses                              14,622            19           14,231            19           1,027                  24
      Western Paris                             2,614             4            2,590             4           1,667                  40
      Provinces                                 3,047             4            3,043             4           1,177                  28

       Other assets                             5,661             8            5,632             8           2,844                  68
      Total segments                           74,523                         73,680                         4,194
      Total unallocated
       Total                                   74,523                         73,680                         4,194




76
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At 31 December 2006 (In thousand euros)                                  Total          Offices   Warehouses       Other Assets          Unallocated

Rental income                                                         74,523            54,241       14,622             5,661
Ground rents paid                                                        (344)             (85)         (258)                  (2)
Net operating costs                                                      (499)            (339)         (133)                 (27)
  Unrecovered rental expenses                                            (248)            (113)         (127)                  (8)
  Landlord building expenses                                             (251)            (225)           (7)                 (19)

Net rents                                                             73,680            53,817       14,231             5,632                     –

Other income from assets held                                          1,646                 –        1,628                   18
Asset management expenses                                              (1,648)            (230)         (786)             (263)                (369)*
Corporate overheads                                                    (5,353)               –             –                    –            (5,353)
Development expenses                                                     (351)               –             –                    –              (351)
Change in provisions and depreciation of operating assets                (482)             (25)          (10)             (273)                (174)

Administrative expenses                                                (7,835)            (255)        (797)              (536)              (6,247)
Other income and expenses                                                296                19           15                     5              258
Capital gains/losses on sale of investment properties                     (29)               –           74               (103)                   –
Fair value in changes on investment properties                        90,657            77,659        (2,168)          15,166                     –
Operating profit/ loss                                               158,415           131,239       12,983            20,182                (5,989)

Net financial items                                                  (51,175)          (38,148)       (5,662)           (2,786)              (4,579)

Taxation                                                               (1,837)                                                               (1,837)
Net profit/ loss                                                     105,403            93,091        7,321            17,396              (12,405)

Basic earnings per share                                             €10.43
* Including 349 thousand euros of personnel costs for the Asset Management division.




V.6 Related parties
The shareholders general meeting of 27 June 2006 decided to set the total directors’ fees for the board of directors at 30 thousand euros in respect
of 2006 and for each subsequent year until otherwise decided. Directors’ fees actually paid in 2006 amounted to 21 thousand euros.
Executives and directors remuneration (In thousand euros)                                                              2006                    2005

– executive management                                                                                                 133                       48
– directors                                                                                                             21                        9
Total                                                                                                                  154                       57

No other type of remuneration was provided in respect of financial year 2006.
Other transactions with related parties principally concern the shareholder loan signed on 8 March 2006 and detailed in note V.1.7 Key events –
Participating loan. This loan gave rise to interest expenses during the year of 5.4 million euros.



V.7 Subsequent events
The registered office of the Company was transferred on 1 January 2007 to 7, rue Scribe – 75009 Paris, a property belonging to the Mines de la
Lucette Group.
No other major event has occurred in 2007 as at the date of preparing these consolidated financial statements.




                                                                                                                                                        77

                                                                                                        consolidated financial statements
      Statutory auditors report
      on the consolidated financial statements
      Year ended 31 December 2006
      Free translation of the French original




      To the Shareholders,

      In compliance with the assignment entrusted to us by your shareholders’ general meetings, we have audited the accompanying consolidated financial
      statements of Mines de la Lucette for the year ended 31 December 2006.
      The consolidated financial statements have been approved by the board of directors. Our role is to express an opinion on these financial statements
      based on our audit.



      I. OPINION ON THE CONSOLIDATED FINANCIAL STATEMENTS
      We conducted our audit in accordance with the professional standards applicable in France; those standards require that we plan and perform the
      audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes
      examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
      accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statements presentation.
      We believe that our audit provides a reasonable basis for our opinion.
      In our opinion, the financial statements give a true and fair view of the assets, liabilities, financial position and results of the consolidated group in
      accordance with IFRS standards as adopted by the European Union.

      II. JUSTIFICATION OF ASSESSMENTS
      In accordance with the requirements of article L. 823-9 of the French Commercial Code (Code de commerce) relating to the justification of our
      assessments, we bring to your attention the following matters:
      • Note “V.1.4 Changes in policy and presentation” of the notes to the financial statements sets out:
      1. the change in accounting policy (point V.1.4. a) during the year following the option adopted by the group to treat its investment properties in
      accordance with the fair value method,
      2. changes in presentation relating to:
      – the profit and loss account breaking down expenditures by function rather than by expense type as in the past;
      – the cash flow statement presented pursuant to the indirect method starting from the basis of operating profit rather than from net profit as in the
      past.
      • In accordance with IAS 8, the 2005 comparative data included in the consolidated financial statements was restated in order to adjust for these
      changes retrospectively. Consequently, the comparative data differs from the published consolidated financial statements for the year 2005.
      • As part of our review of the accounting principles adopted by the Company, we verified that the 2005 data has been properly restated and that
      the related disclosures in note V.1.4 of the notes are accurate.
      • As stated in note V.1.5 “Accounting valuation and policies” of the notes to the financial statements, in accordance with the application of the fair
      value method, property assets are valued by independent experts. We ensured that the values recorded by the Group are valid on the basis of the
      independent expert valuations obtained.
      The assessments were thus made in the context of the performance of our audit of the consolidated financial statements taken as a whole, and
      therefore contributed to our formation of our audit opinion expressed in the first part of this report.

      III. SPECIFIC VERIFICATION
      In accordance with professional standards applicable in France, we have also verified the information given in the Group management report.
      We have no matters to report regarding its fair presentation and conformity with the consolidated financial statements.

                                                                                                                 Paris and Paris-La Défense, 23 March 2007



                                                                       The statutory auditors
                        RSM RSA                                                                                           ERNST & YOUNG Audit
                (French original signed by:)                                                                            (French original signed by:)
                  Stéphane Coutsoloucas                                                                                    Marie-Henriette Joud




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PARENT COMPANY FINANCIAL
STATEMENTS

  CONTENTS
   80   Income statement
   81   Balance sheet
   82   Notes to the financial statements
   87   Statutory auditors’ report
        on the financial statements
   88   Special report of the statutory auditors




                                                                                    79

                                                   parent company financial statements
      This document presents a summary of the principal items of the company financial statements of the parent company Mines de la Lucette SA, a
      full version of which is also published in the BALO and may be obtained on request from Company.



      I. Income statement for the year ended 31 December 2006


      In thousand euros                                                                                           2006                      2005

      Turnover                                                                                                  48,298                     2,675
      Capitalised costs                                                                                             18                       47
      Reversal of depreciation and provisions and expenses transferred to income                                   353                       10
      Other income                                                                                                  16                       17

       Total operating income                                                                                   48,685                     2,748
      Other purchases and external charges                                                                      (8,868)                   (2,036)
      Taxation and related costs                                                                                (2,950)                     (154)
      Wages and salaries                                                                                          (124)                     (359)
      Social security charges                                                                                      (43)                     (132)
      Dotations d’exploitation
      Operating charges on fixed assets:
      – depreciation charges                                                                                   (17,063)                   (1,257)
      – provision charges                                                                                         (191)                     (205)
      Other costs                                                                                                  (22)                       (3)

       Total operating costs                                                                                   (29,261)                   (4,147)
       Operating profit/ loss                                                                                   19,425                    (1,398)

      Financial income from equity investments                                                                   4,318                      381
      Other interest and related income                                                                            362                         –
      Reversal of provisions and expenses transferred to income                                                  1,550                      643
      Net gains on sales of investment securities                                                                  436                       73

       Total financial income                                                                                    6,666                     1,097
      Financial depreciation and provision charges                                                              (1,059)                   (1,538)
      Interests and related expenses                                                                           (32,239)                   (1,459)

       Total financial expenses                                                                                (33,297)                   (2,997)
       Net financial items                                                                                     (26,631)                   (1,900)

       Profit on ordinary activities before tax                                                                 (7,207)                   (3,299)

      Extraordinary income on management operations                                                                283
      Extraordinary income on capital transactions                                                               5,957                     2,478
      Provisions and expenses transferred to income                                                                                        1,718

       Total extraordinary income                                                                                6,240                     4,196
      Extraordinary expenses on management operations                                                                (3)                      (0)
      Extraordinary expenses on capital transactions                                                            (5,478)                   (2,083)
      Extraordinary depreciation and provision charges                                                            (253)                       (4)

       Total extraordinary expenses                                                                             (5,733)                   (2,087)
       Extraordinary items                                                                                         507                     2,109

      Income tax                                                                                                                            (910)
       Profit / loss for the year                                                                               (6,700)                   (2,100)




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II. Balance sheet at 31 December 2006

ASSETS
In thousand euros                                                                              31/12/2006     31/12/2005

Intangible assets
Concessions, patents and similar rights                                                                               7
Tangible assets
Land                                                                                            548,817          7,037
Buildings                                                                                       487,418         20,287
Plant and machinery                                                                                   –              –
Other tangible assets                                                                                 –            100
Fixed assets under construction                                                                     345            327
Financial fixed assets
Equity investments                                                                               50,736          7,781
Receivables related to subsidiaries and affiliated companies                                    149,575         15,838
Other fixed asset securities                                                                         89              –
Other fixed asset investments                                                                       107             45
Total fixed assets                                                                             1,237,085        51,422
Inventories
Payments on account                                                                                    –              1
Receivables
Trade receivables and related accounts                                                           24,773             829
Other receivables (including restricted cash at 31/12/2006 of 1,614 thousand euros)               4,800             834
Cash and cash equivalents
Marketable securities                                                                              9,617          2,234
Cash in hand                                                                                         586              1
Prepaid expenses and accrued income
Prepaid expenses                                                                                     157             89
Total current assets                                                                             39,933           3,989
Deferred expenses                                                                                  6,341
Total assets                                                                                   1,283,358        55,411


LIABILITIES
In thousand euros                                                                              31/12/2006     31/12/2005

Shareholders’ equity
Share capital                                                                                   287,198         23,243
Share and merger premium account                                                                160,669           2,872
Revaluation reserve                                                                                1,766          1,906
Legal reserve                                                                                        152            152
Other reserves                                                                                       536            397
Retained earnings                                                                                 (1,446)           654
Net profit for the year                                                                           (6,700)        (2,100)
Total shareholders equity                                                                       442,176         27,123
Provisions for risks and charges
Provisions for risks                                                                                 252            729
Total provisions for risks and charges                                                               252            729
Payables
Loans and payables to financial institutions                                                    747,508         14,868
Miscellaneous loans and borrowings                                                               50,363          9,974
Trade payables and related accounts                                                               2,610            642
Tax and social security payables                                                                  6,618          1,253
Fixed asset payables                                                                                 77             44
Other payables                                                                                   14,478            134
Accruals and deferred income
Deferred income                                                                                  19,276             643
Total liabilities and equity                                                                    840,930         27,559
Total liabilities                                                                              1,283,358        55,411




                                                                                                                           81

                                                                                      parent company financial statements
      III. Notes to the financial statements

      III.1 Accounting policies and comparability between the two financial years
      The principal valuation change during the year relates to the method used for estimating impairment of equity securities. This method now takes
      account of the fair value of the assets. This led to a reversal of the impairment provision of 1,498 thousand euros and to no provision on certain secu-
      rities on account of unrealised capital gains.
      The comparability of the data between 2005 and 2006 is affected by major investments and related financing incurred during the year as detailed
      in the key events for the year. Investments made in 2006 account for over 90% of Mines de la Lucette SA’s rental income over a full year.



      III.2 Key events for the year
      Acquisitions and sales of assets
      The Company continued to review and implement real estate projects either directly or indirectly via its subsidiaries. The principal events in the
      year for Mines de la Lucette SA can be summarised as follows:
      • In March 2006, Mines de la Lucette purchased the Crystal Park and the Scor Tower properties in conjunction with the acquisition of five office
      properties by the Mines de la Lucette Group from the investment fund KanAm. These two properties located at Neuilly-sur-Seine and La Défense
      represent a surface area of 70,100 sqm leased to first class tenants. The Company undertook to retain these assets for five years as required by
      the “SIIC 3” tax status.
      • In April 2006, Mines de la Lucette purchased 13 properties in France, which are used as logistics warehouses with a total surface area of some
      416,000 sqm. Ten of these warehouses were transferred in exchange for a capital contribution, and the remaining three in the form of a sale. These
      warehouses are operated by Easydis, a subsidiary of Casino group active in the logistics business. The Chambéry warehouse which had a gua-
      ranteed rent for twelve months was sold on 11 October 2006 resulting in a capital gain of 0.2 million euros. All the warehouses, except that of
      Chambéry, were purchased by Mines de la Lucette under tax status known as “SIIC 2” and “SIIC 3”. The Group is obliged to retain these assets
      for five years. The Casino warehouses are undergoing a multi-year renovation programme that the Company undertook to carry out as part of the
      acquisition.
      • In November 2006, Mines de la Lucette purchased two office properties located at Neuilly-sur-Seine with a surface area of some 4,000 sqm.

      Capital transactions
      • Following the contributions of ten warehouses by the Immobilière Groupe Casino and by its real estate subsidiary SCI de l’Océan, the Company
      undertook a capital increase of 94 million euros. The 57.8 million euros debt corresponding to current account advances granted by the Casino
      Group was fully refinanced by Mines de la Lucette and repaid on the completion date of the asset contribution. Consequently, in the first half of 2006,
      the Company’s share capital increased by 58.7 million euros via the issue of 3,916,665 shares each with a nominal value of 15 euros and a pre-
      mium on issue of 9 euros.
      • On 8 March 2006, MSREF Grillet BV and Mines de la Lucette signed a participating loan agreement for 350 million euros, the purpose of which
      was to finance the acquisitions of the Crystal Park and Scor properties, and the Colisée (SCI Volnay), Scribe (SCI Chassagne), River Plaza (SCI Conti)
      and Messine (SCI Chambolle) assets. This loan was transferred to MSREF Turque S.à r.l when it took over MSREF Grillet BV’s equity stake in Mines
      de la Lucette.
      The drawdown on the loan until June 2006 of 303.3 million euros was entirely converted to share capital at the same time as the capital increase
      in July 2006. The value of this loan at 31 December 2006 is 31.3 million euros and corresponds to the balance of the drawdown which was made
      to fund SCI Volnay which holds the Colisée property on 21 July 2006.
      • In June 2006, MSREF Grillet BV transferred its entire stake in Mines de la Lucette to MSREF Turque S.à r.l Following the capital transactions
      during the year, MSREF Turque S.à r.l holds a 93.61% equity stake in the Company.
      • In July 2006, Mines de la Lucette undertook the following two capital transactions: an immediate capital increase totalling 328 million euros (for
      the issue of 13,665,420 shares at 24 euros each) with preferential subscription right, and a deferred capital increase in the form of a share warrants
      maturing in July 2008. These transactions are detailed in the legal notice published in the BALO on 5 July 2006.

      Other key events
      • On 1 January 2006, all employees of the Company were transferred to the subsidiary M2L Gestion with the exception of its Chairman & CEO.
      • Mr Stéphane Theuriau was appointed Chairman & CEO by the board of directors of the Company on 6 September 2006, replacing Mr Pascal
      Duhamel, who remains a member of the board of directors.
      • SIIC 4 status: the stake of the majority shareholder of the SIIC as at the filing date of this registration document exceeds the threshold of 60%.
      At this date no decision had been taken regarding the planned level of equity interest that the shareholder plans to retain in the SIIC company.




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III.3 Off balance sheet commitments
COMMITMENTS GRANTED

Pension liabilities:
Given that the Company only has one employee, the pension liabilities of Mines de la Lucette are not material and have not been provided for in
the balance sheet.

Shares granted without consideration:
18,500 shares granted without consideration were issued to managers of the subsidiary M2L Gestion, management company of the Mines de la
Lucette Group following a decision of the board of directors on 27 April 2006. Ownership of these shares will only pass to the employees concer-
ned after a period of two years and they must be retained for a further two years before they can be sold.

Stock subscription or stock purchase options reserved for employees:
On 21 August 2006, the Board decided to grant 55,660 company stock subscription or stock purchase options to managers of M2L Gestion. The
exercise price for each stock subscription or stock purchase option was set at 29.02 euros. 25% of these options may be exercised in each of the
following respective periods: between two and six years after the grant date, between three and six years after the grant date, between four and
six years after the grant date and between five and six years after the grant date.
Since no options were exercised in 2006, no shares were issued during the year in respect of the stock option plan.

Asset pledges:
In conjunction with the financing of the acquisitions for the year, Mines de la Lucette pledged the shares of SCI Conti, SCI Chassagne, SCI
Chambolle, SCI 21 and Sarl Libourne and the intragroupe loan receivables granted to SCI Conti, SCI Chassagne, SCI Chambolle, SCI 21 and
Sarl Libourne (which hold the properties at River Plaza, 5/7 rue Scribe, 7/9 avenue de Messine, Longvic and indirectly the Francilien properties)
respectively to the benefit of Lehman Brothers, Bankhaus Aktiengesellschaft, Morgan Stanley Bank International Ltd and IXIS Corporate and
Investments.
Mines de la Lucette has pledged the shares of SNC Vaillant Peupliers and SCI Gascogne to the benefit of Eurohypo and Landesbank Saar
respectively.


Real security interests:
In thousand euros                                         Balance of principal          Original loan        Original security      Fair market value
                                                                 amount due                  amount          interest amount     of mortgaged assets
                                                                                                                                        excl. rights at
                                                                                                                                          31/12/2006

Mortgage                                                             90,275                                          92,168                 176,227
Lender’s priviledge and promise of mortgage                         649,336                                         662,951                 922,577

Secured bank debts                                                  739,611                755,119                  755,119               1,098,804

Unsecured bank debts                                                   1,212                  2,711

Total bank debts                                                    740,823                757,830

Other commitments:
Mines de la Lucette has committed to SAS Hôtels A/S, Danmark, the manager of the Radisson hotel that SNC Vaillant Peupliers will continue to
honour the commercial lease throughout the twenty year term of the management contract between SAS Hotels A/S Denmark and Sarl Hôtelière
Boulonnaise. This commitment is in exchange for an earnings guarantee granted by SAS Hotels A/S Danmark to Hôtelière Boulonnaise Sarl, which
was transferred to SNC Vaillant Peupliers (in respect of a rental guarantee) and to Eurohypo as security interest for the loan.
Mines de la Lucette Group executed promises of sale subject to conditions precedent in relation to development transactions (“VEFA”) acting on
its own account in Paris and Western Paris. These transactions relate to some 24,500 sqm of office properties and are subject to obtaining the rele-
vant construction permit.

COMMITMENTS RECEIVED

Mining concessions
The administrative procedure to give up concessions located in Corsica is continuing and no significant additional expenditure is planned.

Representations and guarantees and VAT guarantee
Under the SCI 21 shares sale and purchase agreement dated 9 May 2006, the vendor provided to Mines de la Lucette and SAS Milu
Investissements representations and guarantees covering the accuracy of its representations, warranting that there would be no further liabilities
after the shares transfer date or any additional tax assessments.
Under the SNC Trois Fontanot and SNC Saint-Ouen Évry 21 shares sale and purchase agreements dated 29 September 2006, the vendor provided
Sarl Libourne representations and guarantees covering the accuracy of its representations, warranting that there would be no reduction in assets
or increase in liabilities or any additional tax assessments.
In conjunction with the acquisitions made in 2006, the companies concerned obtained a VAT guarantee from the previous owners.



                                                                                                                                                          83

                                                                                             parent company financial statements
      III.4 Details of subsidiaries and equity investments
      Subsidiaries and equity investments                                                 Capital   Shareholders’ equity
                                                                                         in euros     excl. share capital
                                                                                                                in euros

      Details of subsidiaries at 31 December 2006
      SNC VAILLANT PEUPLIERS – 61, rue de Monceau –75008 Paris –                         10,000                        –
      Siret: 448 913 871 00027
      SARL LANDES (ex-MDL HÔTEL LES ARCS) – 61, rue de Monceau – 75008 Paris –         4,257,500             3,481,069
      Siret: 483 205 572 00020
      SAS M2L GESTION – 61, rue de Monceau – 75008 Paris – Siret: 485 079 420 00017      37,500                 (24,575)
      SARL BRETON – 61, rue de Monceau – 75008 Paris – Siret: 487 557 720 00017            3,750                  3,750
      SAS MILU INVESTISSEMENTS – 61, rue de Monceau – 75008 Paris –                      37,500                  (8,000)
      Siret: 487 557 589 00016
      SARL GARONNE – 61, rue de Monceau – 75008 Paris – Siret: 488 108 242 00014           3,750                  3,750


      SARL ODET – 61, rue de Monceau – 75008 Paris – Siret: 488 103 813 00017              3,750                  3,750


      SCI DORDOGNE – 61, rue de Monceau – 75008 Paris – Siret: 488 101 296 00017           1,000                  1,000


      SCI LOIRE – 61, rue de Monceau – 75008 Paris – Siret: 488 107 889 00013              1,000                  1,000


      SCI SEINE – 61, rue de Monceau – 75008 Paris – Siret: 488 090 796 00019              1,000                  1,000


      SCI CHAMBOLLE – 61, rue de Monceau – 75008 Paris – Siret: 488 874 371 00013          1,000                  1,000


      SCI CHASSAGNE – 61, rue de Monceau – 75008 Paris – Siret: 488 873 928 00011          1,000                  1,000


      SCI CHOREY – 61, rue de Monceau – 75008 Paris – Siret: 488 871 559 00016             1,000                  1,000


      SCI CONTI – 61, rue de Monceau – 75008 Paris – Siret: 488 873 886 00011              1,000                  1,000


      SCI MOREY – 61, rue de Monceau – 75008 Paris – Siret: 488 871 583 00016              1,000                  1,000


      SCI VOLNAY – 61, rue de Monceau – 75008 Paris – Siret: 488 873 860 00016             1,000                  1,000


      SCI VOSNE – 61, rue de Monceau – 75008 Paris – Siret: 488 873 845 00017              1,000                  1,000


      SARL LIBOURNE – 61, rue de Monceau – 75008 Paris – Siret: 489 254 177 00012     18,003,750           18,003,750


      SCI 21 – 61, rue de Monceau – 75008 Paris – Siret: 440 153 427 00024                  200              5,617,308




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Equity interest       Gross book    Net book value                 Loans and         Value of guarantees             Net turnover    Net profit for
           held   value of shares         of shares          advances granted       and pledges granted                   for past   past financial
           a%       held in euros     held in euros   by the Company in euros   by the Company in euros    financial year in euros   year in euros



        99.99             9,990                  –              14,597,758                            –              2,580,000         (888,687)


          100        8,507,500         8,507,500                     23,100                           –                         –     1,097,815


          100            37,500           37,500                    987,723                           –                         –        186,135
          100             7,500             7,500                     2,100                           –                         –              31
          100            37,500           37,500                    356,883                           –                         –        (54,210)


          100             7,500             7,500                                                                               –        (13,321)


          100             7,500             7,500                                                                               –        (12,464)


          100             2,000             2,000                     3,000                                                     –         (7,346)


          100             2,000             2,000                     3,000                                                     –         (7,351)


          100             2,000             2,000                     3,350                                                     –         (7,558)


          100             2,000             2,000               34,000,000                                           5,821,776         (671,632)


          100             2,000             2,000               10,500,000                                           3,997,837         (530,088)


          100             2,000             2,000                                                                               –         (6,731)


          100             2,000             2,000               38,000,000                                           8,058,649       (1,955,045)


          100             2,000             2,000                                                                               –         (6,731)


          100             2,000             2,000               50,815,021                                           6,170,551         (430,341)


          100             2,000             2,000                                                                               –         (6,716)


          100      36,007,500        36,007,500                   1,150,000                                                     –        (22,637)


           95        6,103,225         6,103,225                                                                     1,373,030            40,628




                                                                                                                                                      85

                                                                                          parent company financial statements
      III.5 Distribution and monitoring of the SIIC status regulations
      On 26 April 2005, Mines de la Lucette opted for the status applicable to Listed Property Investment Companies (SIIC). This option involves the
      following obligations:
      • distribution of at least 85% of the profits generated from property rental and 100% of dividends received from subsidiaries which have also opted
      for the SIIC status;
      • distribution of at least 50% of capital gains on asset sales within two years.
      In view of its net losses, Mines de la Lucette is not subject to any obligation to distribute a dividend.
      Since the Company’s objective is to provide a return for its shareholders, at the combined ordinary and extraordinary general meeting of 24 May
      2007, a dividend per share of 1.30 euro charged against the share premium account will be recommended. Note that no dividend was paid during
      the last three financial years. It will also be recommended to post the net loss for financial year 2006 to “Retained earnings” resulting in a retained
      loss as at 31 December 2006 of 8.1 million euros.



      III.6 Financial results of the last five financial years
      Balance sheet date                                                              31/12/2006     31/12/2005    31/12/2004     31/12/2003      31/12/2002
      Accounting period (months)                                                       12 months      12 months     12 months      12 months       12 months

      Share capital at year-end
      Share capital (in thousand euros)                                                   287,198      23,243        23,243         16,258            5,419
      Number of ordinary shares                                                     19,146,528       1,549,503     1,549,503     1,083,897         361,299
      Operations and results (in thousand euros)
      Net turnover                                                                         48,298        2,675         3,096          2,746             859
      Profit before tax, employee profit sharing, depreciation and provisions              10,102         (539)        2,545            743             147
      Corporation tax                                                                           0          910           209              7               0
      Net profit/loss                                                                      (6,700)      (2,100)          654           (159)            161
      Earnings per share (in euros)
      Net profit/ loss after tax and profit sharing, before depreciation and provisions       0.5          (0.9)         2.0            1.0              0.0
      Net profit/ loss after tax and profit sharing, depreciation and provisions             (0.3)         (0.4)         0.4            0.0              0.0
      Personnel
      Average number of employees                                                               1            8             5              4               4
      Total wages and salaries (in thousand euros)                                           124           359           328            273             210
      Social benefits (in thousand euros)                                                     43           132           129            105              84




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Statutory auditors’ report on the financial statements
Year ended 31 December 2006
Free translation of the French original




To the Shareholders:

In compliance with the assignment entrusted to us by your general shareholders’ meetings, we hereby report to you, for the year ended
31 December 2006, on:
• the audit of the accompanying annual financial statements of Mines de la Lucette;
• the justification of our assessments;
• the specific verifications and information required by law.
The annual financial statements have been approved by the board of directors. Our role is to express an opinion on these financial statements
based on our audit.

I. OPINION ON THE FINANCIAL STATEMENTS
We conducted our audit in accordance with professional standards applicable in France; those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used
and significant estimates made by the management, as well as evaluating the overall financial statements presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at 31 December 2006 and the
results of its operations for the year then ended, in accordance with the accounting rules and principles applicable in France.
Without qualifying our opinion stated above, and pursuant to article L. 232-6 of the French Commercial Code, we draw attention to the matter dis-
cussed in note III.2.2 to the financial statements, “Changes in accounting policies or estimates”, relating to the method for establishing the book
value of shares in subsidiaries.

II. JUSTIFICATION OF OUR ASSESSMENTS
In accordance with the requirements of article L. 823-9 of French Company Law (Code de commerce) relating to the justification of our assessments,
we bring to your attention the following matters:
• Note III.2.1 “Principal policies adopted” in the notes to the financial statements details the accounting policies and methods relating to the valua-
tion of the Company’s property assets. We ensured that the Company’s accounting policies were correctly applied in relation to the independent
expert valuations obtained.
• Note III.2.2 “Changes in accounting policies or estimates” in the notes to the financial statements specifies the method for establishing the book
value of shares in subsidiaries. We ensured that the Company’s change in accounting policy mentioned above was correctly applied and properly
justified.
The assessments were thus made in the context of the performance of our audit of the financial statements taken as a whole, and therefore contri-
buted to the formation of our audit opinion expressed in the first part of this report.

III. SPECIFIC VERIFICATIONS AND INFORMATION
We have also performed the specific verifications required by law in accordance with professional standards applicable in France. We have no
matters to report regarding:
• the accuracy or consistency with the financial statements of the information given in the board of directors’ management report and in the documents
sent to the shareholders on the financial situation and the financial statements,
• the accuracy of the information given in the management report relating to the remuneration and benefits paid to the Company directors concerned
and commitments made in their favour at the time of beginning, ceasing or changing functions or thereafter.
In accordance with French law, we have ensured that the required information concerning the purchase of investments and controlling interests and
the names of the principal shareholders and holders of the voting rights has been properly disclosed in the Management Report.

                                                                                                         Paris and Paris-La Défense, 23 March 2007

                                                                The statutory auditors
                  RSM RSA                                                                                         ERNST & YOUNG Audit
          (French original signed by:)                                                                          (French original signed by:)
            Stéphane Coutsoloucas                                                                                  Marie-Henriette Joud




                                                                                                                                                          87

                                                                                               parent company financial statements
      Special report of the statutory auditors on regulated agreements and commitments
      Year ended 31 December 2006
      Free translation of the French original


      To the Shareholders:

      In our capacity as statutory auditors of the Company, we hereby present our report on regulated agreements and commitments.

      1. AGREEMENTS AND COMMITMENTS APPROVED DURING THE YEAR
      In accordance with article L. 225-40 of the French Commercial Code (Code de commerce), we have been advised of agreements and commitments
      which were given prior approval by your board of directors.
      It is not our responsibility to ascertain whether any other agreements and commitments exist, but to inform you of the principal terms and conditions
      of those agreements and commitments of which we were advised, on the basis of the information that was given to us. We are not obliged to
      comment on the utility or justification of such agreements and commitments. It is your responsibility to assess the interest underlying the contracting
      of these agreements and commitments with a view to their approval, in accordance with article 92 of the decree dated 23 March 1967.
      We performed our work in accordance with professional standards applicable in France. These standards require us to implement procedures
      designed to test the consistency of the information given to us with the underlying documents on which the information was based.

      1.1 Agreement with MSREF Grillet BV
      Company concerned: MSREF Grillet BV

      1.1.1 Participating loan
      a) By agreement dated 3 February 2006 the Company contracted a revolving shareholder loan of 20,000,000 euros, valid until 31 December 2006,
      attracting interest at a rate of 4.35%. This agreement was approved by the board of directors on 3 February 2006 and cancelled on 8 March 2006
      following the signature of the participating loan of 350,000,000 euros.
      b) By agreement dated 8 March 2006, the Company contracted a revolving participating loan with the majority shareholder of 350,000,000 euros,
      for an unlimited term, attracting interest at a rate of 4.35%.
      This agreement was approved by the board of directors on 7 March 2006.
      The total amount of interest recorded in respect of 2006 on behalf of MSREF Grillet BV amounts to 3,174,224 euros.

      1.1.2 Lehman Brothers subordination agreement
      In connection with financing granted by Lehman Brothers, the Company was authorised by the board of directors to sign a subordination agree-
      ment with Lehman Brothers, SCI Chassagne, SCI Chambolle and SCI Conti, under the terms of which any repayment and payment of any and all
      amounts due from the Company or from any of the three SCIs to MSREF Grillet BV or any one of its affiliates (other than companies of the Group
      to which the Company belongs), would be subordinated to the repayment and payment of all amounts due under the financing documents.
      This agreement was approved by the board of directors on 23 March 2006.

      1.2 Agreement with MSREF Turque
      Company concerned: MSREF Turque

      1.2.1 Participating loan
      On 20 June 2006, MSREF Grillet BV transferred to MSREF Turque all the shares it held in the Company and the debt arising by virtue of the revolving
      participating loan with a principal of 303,300,000 euros.
      On 3 August 2006, in connection with a cash share issue, the Company repaid this amount of 303,300,000 euros by offsetting it against the amount
      owed by MSREF Turque following its subscription of 13,665,420 shares issued by the Company including the premium on issue related thereto.
      The total amount of interest recorded in respect of 2006 in relation to the participating loan granted by MSREF Turque amounts to 2,220,168 euros.

      1.2.2 Lehman Brothers subordination agreement
      The debt assignment, mentioned in the paragraph above, involved the transfer of the Lehman Brothers subordination agreement related thereto.

      1.3 Agreement with SCI Conti
      Persons concerned: Messrs Pascal Duhamel, Stéphane Theuriau

      1.3.1 Loan contract
      By agreement dated 23 March 2006, the Company granted a shareholder loan amounting to 38,000,000 euros, expiring on 31 December 2011, attrac-
      ting interest at a rate of 4.35%. The purpose of this loan was to enable SCI Conti to finance the part of the purchase price for the River Plaza pro-
      perties which was not financed by bank loan taken out with Lehman Brothers.
      This agreement was approved by the board of directors on 23 March 2006.
      The amount of interest received in respect of 2006 amounts to 1,279,303 euros.




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COMPAGNIE
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1.3.2 Lehman subordination agreement
The board of directors’ meeting on 23 March 2006 authorised the Company to sign the Lehman subordination agreement with Lehman Brothers,
SCI Chassagne, SCI Chambolle and SCI Conti.

1.4 Agreement with SCI Chambolle
Persons concerned: Messrs Pascal Duhamel, Stéphane Theuriau

1.4.1 Loan contract
By agreement dated 23 March 2006, the Company granted a shareholder loan amounting to 34,000,000 euros, expiring on 31 December 2011, attrac-
ting interest at a rate of 4.35%. The purpose of this loan was to enable the company SCI Chambolle to finance the part of the purchase price of
the Messine properties which was not financed by bank loan taken out with Lehman Brothers.
This agreement was approved by the board of directors on 23 March 2006.
The amount of interest received in respect of 2006 amounts to 1,150,920 euros.

1.4.2 Lehman subordination agreement
On 23 March 2006, the board of directors authorised the Company to sign the Lehman subordination agreement with Lehman Brothers, SCI
Chassagne, SCI Chambolle and SCI Conti.

1.5 Agreement with SCI Chassagne
Persons concerned: Messrs Pascal Duhamel, Stéphane Theuriau

1.5.1 Loan contract
By agreement dated 23 March 2006, the Company granted a shareholder loan amounting to 10,500,000 euros, expiring on 31 December 2011, attrac-
ting interest at a rate of 4.35%. The purpose of this loan was to enable the company SCI Chassagne to finance the part of the purchase price
of the Scribe properties which was not financed by bank loan taken out with Lehman Brothers.
This agreement was approved by the board of directors on 23 March 2006.
The amount of interest received in respect of 2006 amounts to 355,499 euros.

1.5.2 Lehman subordination agreement
On 23 March 2006, the board of directors authorised the Company to sign the Lehman subordination agreement with Lehman Brothers, SCI
Chassagne, SCI Chambolle and SCI Conti.

1.6 Agreement with SAS Milu Investissements
Persons concerned: Messrs Pascal Duhamel, Stéphane Theuriau

1.6.1 Loan contract
By agreement dated 4 May 2006, the Company granted a shareholder loan amounting to 400,000 euros, expiring on 31 December 2013, attracting inte-
rest at a rate of 4.35%. The purpose of this loan was to enable Milu Investissements to finance the purchase of an equity interest in SCI 21.
This agreement was approved by the board of directors on 27 April 2006.
The amount of interest received in respect of 2006 amounts to 10,094 euros.

1.6.2 Lehman subordination agreement
On 27 April 2006, the board of directors authorised the Company to sign a subordination agreement with Lehman Brothers, SAS Milu
Investissements and SCI 21, under the terms of which any repayment and payment of all amounts due from the Company, SAS Milu Investissements
or SCI 21 to MSREF Grillet BV or any of its affiliates (other than the companies of the Group, to which the Company belongs), would be subordinated
to the payment of all amounts due under the financing documents.
To date, this agreement has not been prepared and has not taken effect.

1.7 Agreement with SCI VOLNAY
Persons concerned: Messrs Pascal Duhamel, Stéphane Theuriau

1.7.1 Loan contract
By agreement and amendment dated 21 July 2006, the Company granted a shareholder loan amounting to 51,000,000 euros, expiring on
31 December 2011, attracting interest at a rate of 4.35%. The purpose of this loan was to enable the company SCI Volnay to finance the part of the
purchase price for the Colisée property (consisting of a piece of land, the rights to a construction lease and the buildings erected thereon) which
was not financed by bank loan taken out with Lehman Brothers.
This agreement was approved by the board of directors on 20 July 2006.
The amount of interest received in respect of 2006 amounts to 972,374 euros.

1.8 Agreement with SCI Seine
Persons concerned: Messrs Pascal Duhamel, Stéphane Theuriau

1.8.1 Loan contract
The board of directors’ meeting on 3 February 2006 authorised the Company to grant a loan of 3,500,000 euros attracting an interest rate
of 4.35% to SCI Seine in order to enable it to finance the part of the purchase price of the Vitry properties not financed by bank debt.
Since the acquisition of the aforementioned assets did not take place, the agreement was never concluded.




                                                                                                                                                      89

                                                                                            parent company financial statements
      1.8.2 Subordination agreement
      The board of directors’ meeting on 3 February 2006 authorised the Company to subordinate the repayment of the loan authorised above to the
      repayment of amounts due from SCI Seine to the bank in respect of the bank loan.
      Since the loan was not contracted, the agreement was never concluded.

      2. AGREEMENTS AND COMMITMENTS APPROVED DURING PRIOR FINANCIAL YEARS WHICH CONTINUED TO RUN DURING THE
      FINANCIAL YEAR
      Furthermore, in accordance with the decree of 23 March 1967, we were informed that the execution of agreements and commitments, approved
      during prior financial years, continued during the financial year.

      2.1 Agreement with M2L Gestion
      Persons concerned: Messrs Pascal Duhamel, Stéphane Theuriau

      2.1.1 Services agreement
      With a view to rationalising the structure of the Group, the board of directors authorised the Company to sign a services contract with M2L Gestion,
      a subsidiary of the Company. Under the terms of this contract, M2L Gestion shall perform financial, administrative and asset management advisory
      and assistance engagements on behalf of the Company and on behalf of the other Group subsidiaries.
      The charge for the services rendered by M2L Gestion to Mines de la Lucette shall be 5%, net of VAT for rent received for the asset management
      engagements and 150,000 euros, net of VAT, for administrative and financial engagements.
      The services contract was signed on 23 March 2006 for an unlimited term with retroactive effect as from 1 January 2006.
      This agreement was approved by the board of directors on 16 December 2005.
      An amendment was signed on 23 March 2006 that required the payment of an exceptional amount of 300,000 euros for financial year 2006
      in respect of services to recruit new employees and implement new Group dynamics.
      By omission, this contract was not authorised in advance by the board of directors.
      The expenses charged in respect of 2006 amounted to 2,729,396 euros.

      2.2 Agreement with SNC Vaillant Peuplier
      Persons concerned: Messrs Pascal Duhamel, Stéphane Theuriau

      2.2.1 Pledge of shares
      The Company pledged its holding of 999 shares in SNC Vaillant Peupliers to Eurohypo as collateral for amounts due from SNC Vaillant Peupliers
      relating to finance for the VEFA acquisition of the hotel located in Boulogne-Billancourt, avenue Édouard-Vaillant.
      The nominal value of the 999 SNC Vaillant Peupliers shares is 9,990 euros.
      The share pledge expires on 15 June 2017.

      2.2.2 Loan agreement
      By agreement dated 16 June 2003 and by amendments dated 18 June 2003, 4 February 2004, 13 October 2004, 7 February 2005 and 26 May
      2005, 18 November 2005 and 13 December 2005, the Company granted a loan amounting to 14,947,300 euros to SNC Vaillant Peupliers.
      The term of the loan is identical to the Eurohypo loan taken out by SNC Vaillant Peuplier and repayable over fourteen years with effect from trans-
      fer of the property under construction, which was delivered on 19 May 2005.
      The interest is based on the average quarterly EURIBOR (three months) rate plus 0.50% per year, payable quarterly in arrears, with effect from the
      beginning of the repayment period. Prior to this date, the interest is capitalised.
      The amount of interest received in respect of 2006 amounts to 539,314 euros.

      2.3 Agreement with MSREF Grillet BV
      Person concerned: MSREF Grillet BV

      2.3.1 Participating loan
      By agreement dated 19 December 2005 the Company contracted a loan amounting to 8,500,000 euros until 30 September 2006 renewable, attracting
      interest at a rate of 4.35%. The purpose of this loan was to enable the Company to finance part of the purchase price of the Longueville properties.
      This agreement was approved by the board of directors on 16 December 2005 and cancelled on 8 March 2006 following the signature of a
      participating loan of 350,000,000 euros.
      The total amount of interest recorded in respect of 2006 for this loan amounts to 70,868 euros.

                                                                                                             Paris and Paris-La Défense, 23 March 2007

                                                                    The statutory auditors
                        RSM RSA                                                                                       ERNST & YOUNG Audit
                (French original signed by:)                                                                        (French original signed by:)
                  Stéphane Coutsoloucas                                                                                Marie-Henriette Joud




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PRO FORMA FINANCIAL DATA
Year ended 31 December 2006




The pro forma financial data is given for information purposes only. It has been included in order to assess the impact on the Mines de la Lucette
Group income statement of acquisitions made during 2006, as if they had taken place on 1 January 2006. The pro forma financial data has been
prepared in accordance with the same accounting principles and methods as those applied to the historical financial statements.
By definition, pro forma financial data depicts a hypothetical situation and, consequently, does not represent the financial situation or the actual
results of the Company that would have been recorded if the transactions mentioned below had taken place at 1 January 2006.
The pro forma accounts are based on the consolidated financial statements of Mines de la Lucette for the year ended 31 December 2006.
With regard to the property assets contributed or acquired during the year, the principal assumptions which had an impact on the income statement
are as follows:
• Annualised rent: data from property management information.
• Property management expenses and administrative overheads: the expense ratios for the year ended 31 December 2006 were introduced into
the pro forma accounts at 2.2% and 7.2% respectively of the additional rental income between 1 January and the effective acquisition date of the
assets.
• Interest income/expense: the debt lines at 1 January 2006 were repositioned and interest was calculated based on actual interest rates, which
are generally at fixed rates.
• consolidated property acquisition costs at the actual acquisition date was recalculated in an identical manner thereby avoiding any pro-forma P&L
adjustment to the net value adjustments at 31 December 2006.
The details of these transactions are as follows:

1) ACQUISITION OF THE KANAM PROPERTY PORTFOLIO
• Acquisition date: 24 March (in respect of the Crystal Park, River Plaza and Tour Scor properties) and 31 March (in respect of the 7/9 Messine and
5/7 Scribe properties).
• Annualised rent: 59.1 million euros of which 46.5 million euros for properties acquired on 24 March and 12.6 million euros for the properties acqui-
red on 31 March.
• Annualised interest expense of 39.8 million euros of which 26.1 million euros for a loan of 597.7 million euros (in principal) attracting interest
at 4.378%, and 13.1 million euros for a loan of 304.8 million euros attracting interest at 4.31%.

2) ACQUISITION AND CONTRIBUTION OF 13 CASINO WAREHOUSES
• Acquisition date: 3 April
• Annualised rent: 15.2 million euros of which 12.0 million euros for the 10 warehouses contributed and 3.2 million euros for the three purchased
warehouses.
• Annualised interest expense of 5.2 million euros including 5 million euros for a loan of 110.9 million euros (in principal) bearing interest at 4.522%

3) PURCHASE OF SCI 21 (LONGVIC WAREHOUSE)
• Acquisition date: 9 May
• Annualised rent: 1.4 million euros
• Annualised interest expense of 0.3 million euros on borrowings taken out for the 8.9 million euros purchase bearing interest at 3.694%.

4) PURCHASE OF THE COLISÉE PROPERTY
• Acquisition date: 21 July
• Annualised rent: 12.1 million euros
• Annualised interest expense of 7.1 million euros including 6.9 million euros for a loan of 147 million euros (in principal) bearing interest at 4.687%.

5) ACQUISITION OF THE OFFICE PROPERTY PORTFOLIO NEAR PARIS (ÎLE DE FRANCE)
• Acquisition date: 29 September
• Annualised rent: 8.9 million euros.
• Annualised interest expense of 5.6 million euros on borrowings taken out for the 123.2 million euros acquisition bearing interest at 4.497%




                                                                                                                                                            91

                                                                                                                    pro forma financial data
      6) PURCHASE OF TWO OFFICE PROPERTIES AT NEUILLY-SUR-SEINE
      • Acquisition date: 22 November
      • Annualised rent: 1.8 million euros
      • Annualised interest expense of 0.8 million euros on borrowings taken out for the 21 million euros acquisition bearing interest at 3.694%.

      7) SHAREHOLDER LOAN
      • The 328 million euros share capital increase by capitalising a receivable was completed on 1 January 2006. The balance of the MSREF revolving
      participating loan therefore remained unchanged throughout the year at 31.5 million euros at a fixed rate of 4.35%. This led to an improvement in
      pro-forma net financial items of 4.1 million euros.



      Pro forma consolidated income statement
      In million euros                                                                               2006                     KanAm               Casino
                                                                                                published        (5 office properties)     13 warehouses
      Date of consolidation in 2006                                                                                24 and 31 March                  3 April

      Rental income                                                                                 74.5                       13.7                   3.8
      Ground rents paid                                                                              (0.3)
      Unrecovered rental expense                                                                     (0.2)
      Landlord building expenses                                                                     (0.3)                      (0.1)

       Net rent                                                                                     73.7                       13.6                   3.8
      Other income from assets held                                                                   1.6
      Asset management expenses                                                                      (1.6)                      (0.3)                 (0.1)
      Corporate overheads                                                                            (5.4)                      (1.0)                 (0.3)
      Change in provisions                                                                           (0.4)
      Development expenses                                                                           (0.4)
      Depreciation of operating fixed assets                                                         (0.1)

       Administrative expenses                                                                       (7.8)                      (1.3)                 (0.4)
      Other income                                                                                    0.3
      Other costs                                                                                     0.0

       Net income from other activities                                                               0.3                        0.0                  0.0
       Operating profit before value gains and losses                                               67.8                       12.3                   3.5

      Proceeds from disposals of investment properties                                                5.8
      NBV of investment properties sold                                                              (5.9)

       Gains/losses on asset sales                                                                    0.0                        0.0                  0.0
      Changes in fair value of investment properties                                                90.7
       Operating profit                                                                            158.4                       12.3                   3.5

      Financial expenses                                                                            (51.8)                      (8.9)                 (1.1)
      Financial income                                                                                0.9

       Net cost of debt                                                                             (50.9)                      (8.9)                 (1.1)
      Change in value of financial instruments                                                        0.2
      Other financial income and expenses                                                            (0.5)
       Net financial items                                                                          (51.2)                      (8.9)                 (1.1)

       Profit before tax                                                                           107.2                         3.4                  2.4

      Corporation tax                                                                                (0.1)
      Deferred tax                                                                                   (1.8)
       Net profit of consolidated companies                                                        105.4                         3.4                  2.4

       Net profit of the consolidated group                                                        105.4                         3.4                  2.4

      Of which minority interests                                                                     0.0
       Of which group share                                                                        105.4                         3.4                  2.4




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SCI 21 (Longvic   Le Colisée           Paris region              Francilien     Sub-    Shareholder        2006
    warehouse)      property   (8 office properties)   (2 office properties)    total          loan   pro forma
        9 May        21 July        29 September            22 November                   July 2006

           0.5          6.7                    6.7                     1.6     107.4                    107.4
                                                                                (0.3)                      (0.3)
                                              (0.2)                             (0.4)                      (0.4)
                                                                                (0.4)                      (0.4)

           0.5          6.7                    6.5                     1.6     106.3           0.0      106.3
                                                                                 1.6                       1.6
           0.0         (0.1)                  (0.1)                    0.0      (2.4)          0.0         (2.4)
           0.0         (0.5)                  (0.5)                   (0.1)     (7.7)          0.0         (7.7)
                                                                                (0.4)                      (0.4)
                                                                                (0.4)                      (0.4)
                                                                                (0.1)                      (0.1)

           0.0         (0.6)                  (0.6)                   (0.2)    (10.9)          0.0       (10.9)
                                                                                 0.3                       0.3
                                                                                 0.0                       0.0

           0.0          0.0                    0.0                     0.0       0.3           0.0         0.3
           0.4          6.1                    5.8                     1.4      97.3           0.0        97.3

                                                                                 5.8                       5.8
                                                                                (5.9)                      (5.9)

           0.0          0.0                    0.0                     0.0       0.0           0.0         0.0
                                                                                90.7                      90.7
           0.4          6.1                    5.8                     1.4     187.9           0.0      187.9

          (0.1)        (3.8)                  (4.2)                   (0.7)    (70.7)          4.1       (66.6)
                                                                                 0.9                       0.9

          (0.1)        (3.8)                  (4.2)                   (0.7)    (69.7)          4.1       (65.7)
                                                                                 0.2                       0.2
                                                                                (0.5)                      (0.5)
          (0.1)        (3.8)                  (4.2)                   (0.7)    (70.0)          4.1       (66.0)

           0.3          2.2                    1.6                     0.8     117.9           4.1      121.9

                                                                                (0.1)                      (0.1)
                                                                                (1.8)                      (1.8)
           0.3          2.2                    1.6                     0.8     116.1           4.1      120.1

           0.3          2.2                    1.6                     0.8     116.1           4.1      120.1

                                                                                 0.0                       0.0
           0.3          2.2                    1.6                     0.8     116.1           4.1      120.1




                                                                                                                   93

                                                                                        pro forma financial data
      Statutory auditors report on the pro forma data
      Free translation of the French original




      To the Chairman & CEO:

      In our capacity as statutory auditors and in accordance with regulation (CE) no. 809/2004, we have prepared this report on the 2006 pro forma
      information of Mines de la Lucette included in section XI entitled “2006 pro-forma accounts” of the Mines de la Lucette prospectus dated 28 March
      2007.

      This pro forma data has been prepared for the sole purpose of illustrating the impact that the following transactions (hereinafter “the transactions”)
      might have had on the Company’s consolidated profit and loss account for the year ended 31 December 2006 if these transactions had taken
      effect as at 1 January 2006:
      • contributions and acquisitions on 13 April 2006 of 13 logistics warehouses from the group Immobilière Casino and its real estate subsidiary SCI
      de l’Océan;
      • acquisition in March 2006 of a property portfolio comprising five office properties from the investment fund KanAm;
      • acquisition on 9 May 2006 of an equity stake in SCI 21 that holds properties used as warehouses;
      • acquisition on 21 July 2006 of the Colisée property at la Défense;
      • acquisition on 29 September 2006 of a portfolio of eight office properties in the Île-de-France region from the Westbrook Partners investment fund;
      • acquisition on 22 November 2006 of two office properties from the Swiss group Firmenich;
      • receipt of a 31.5 million euros shareholder loan and the 328 million euros capital increase in July 2006.

      By definition, pro forma accounts depict a hypothetical situation and do not necessarily reflect the financial situation or results that would have
      occurred if the transactions had taken place on a date prior to their actual dates.
      These pro forma accounts were prepared under your responsibility in accordance with the provisions of regulation (EC) no. 809/2004 and CESR
      recommendations relating to pro forma data.
      It is our responsibility, based on our work, to give an opinion, pursuant to the requirements of Appendix II point 7 of regulation (EC) no. 809/2004,
      on the proper preparation of the pro forma data.
      We performed our work in accordance with the professional standards applicable in France. Our work did not include an audit of the financial infor-
      mation underlying the pro forma accounts presented but consisted principally in verifying that the data on which the said pro forma accounts were
      prepared are consistent with the source documents as described in the notes to the pro forma accounts (basis of preparation), in reviewing the key
      evidence underlying the pro forma adjustments and in discussing with the management of Mines de la Lucette to obtain the information and expla-
      nations that we deemed necessary.

      In our opinion:
      • the pro forma data was properly prepared on the stated basis;
      • this basis is consistent with the accounting policies of the issuer.
      This report is issued for the sole purpose of the public offering in France and in the other countries of the European Union where the prospectus
      approved by the AMF has been distributed and may not be used in any other context.



                                                                                                              Paris and Paris-La Défense, 27 March 2007

                                                                     The statutory auditors
                        RSM RSA                                                                                        ERNST & YOUNG Audit
                (French original signed by:)                                                                         (French original signed by:)
                  Stéphane Coutsoloucas                                                                                 Marie-Henriette Joud




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STOCK MARKET INFORMATION

Stock exchange on which Mines de la Lucette shares are listed
The Company’s shares have been listed on Eurolist compartment B Euronext Paris since 18 January 2007 under ISIN code ISIN FR0000066177
and the mnemonic code Milu.



Volumes traded and recent price trends
The quoted price of Mines de la Lucette shares in the last eighteen months has been as follows:
                                             Number of shares traded                          Trading value              High             Low
                                                                                                   in euros          in euros         in euros

September 2005                                              17,904                                 396,419             24.2                22.0
October 2005                                                 2,723                                  66,208             25.6                22.2
November 2005                                                1,083                                  27,321             26.8                23.7
December 2005                                                5,982                                 153,637             26.0                22.5
January 2006                                                 1,887                                  52,980             29.9                25.0
February 2006                                                1,102                                  31,652             29.9                27.0
March 2006                                                  19,648                                 859,799             50.0                29.9
April 2006                                                  11,061                                 423,603             41.0                34.1
May 2006                                                     2,737                                  89,739             34.9                30.5
June 2006                                                    2,061                                  44,766             26.3                20.0
July 2006                                                    3,716                                 117,371             39.3                23.1
August 2006                                                 11,553                                 326,170             33.0                26.0
September 2006                                              18,132                                 509,592             29.1                28.0
October 2006                                                89,288                                3,308,867            40.8                29.1
November 2006                                               11,290                                 425,088             38.2                37.4
December 2006                                                6,556                                 229,779             37.4                34.0
January 2007                                                19,803                                 687,668             36.4                33.5
February 2007                                               14,294                                 539,298             40.0                35.5
Source: Euronext Paris – GL Trade.

NB: Listing was suspended from 30 March 2005 to 2 June 2005 due to the filing of the simplified tender offer by MSREF Grillet BV.




   MOVEMENT IN SHARE PRICE JANUARY 2005 / DECEMBER 2006

                                                                                                                                     45
                                                                                                                                     40
                                                                                                                                     35
                                                                                                                                     30
                                                                                                                                     25
                                                                                                                                     20


  January                                                              January                                                  December
   2005                                                                 2006                                                      2006

Source: Euronext.




                                                                                                                                                  95

                                                                                                              stock market information
      COMBINED ORDINARY AND
      EXTRAORDINARY GENERAL MEETING
      24 MAY 2007

      Agenda

      Ordinary business
      • presentation of the management report of the board of directors on the Company financial statements and the consolidated financial
      statements for the year ended 31 December 2006;
      • presentation of the special reports;
      • presentation of the additional report;
      • presentation of the report of the Chairman on internal controls;
      • reading of the statutory auditors reports on the performance of their engagements and on the agreements covered by article L. 225-38
      of the French Commercial Code;
      • approval of the Company financial statements for the year ended 31 December 2006;
      • approval of the consolidated financial statements for the year ended 31 December 2006;
      • appropriation of earnings for the year;
      • distribution of reserves;
      • approval of the agreements covered by article L. 225-38 of the French Commercial Code;
      • re-appointment of two directors;
      • establishment of total amount of directors’ fees;
      • approval of the transfer of the registered office;
      • authorisation to be conferred on the board of directors to trade in the shares of the Company.



      Extraordinary business
      • delegation of authorisation to the board of directors to decide the increase in share capital, through the issue – with maintenance
      of preferential subscription rights – of shares and/or securities giving access to the share capital;
      • delegation of authorisation to the board of directors to decide the increase in share capital through the issue of shares or securities
      giving access to the share capital, reserved for savings plan members and with suppression of preferential subscription rights in favour
      of the said members;
      • change in the name of the Company;
      • modification of the Company’s articles of association;
      • authorisation to carry out formalities.




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Resolutions

Ordinary business
FIRST RESOLUTION (Approval of the Company financial statements for the year ended 31 December 2006)
The general meeting, sitting under the conditions of quorum and majority required for ordinary general meetings, and having taken note of the
management report of the board of directors and of the statutory auditors’ report on the Company financial statements for the year ended
31 December 2006 in accordance with article L. 225-100 of the French Commercial Code, approves the Company financial statements for the year,
in the form in which they were presented, and which show a loss of 6.7 million euros.
The general meeting also approves the operations expressed in the said accounts or summarised in the reports.
The general meeting consequently discharges the directors in the execution of their offices for the year ended.

SECOND RESOLUTION (Approval of the consolidated financial statements for the year ended 31 December 2006)
The general meeting, sitting under the conditions of quorum and majority required for ordinary general meetings, and having taken note of the
management report of the board of directors and of the statutory auditors’ report on the consolidated financial statements for the year ended
31 December 2006 in accordance with article L. 225-100-2 of the French Commercial Code, approves the company financial statements for the
year, in the form in which they were presented, and which show a consolidated profit of 105 million euros.
The general meeting also approves the operations expressed in the said accounts or resumed in the reports.

THIRD RESOLUTION (Appropriation of earnings for the year)
The general meeting, sitting under the conditions of quorum and majority required for ordinary general meetings, decides to allocate the loss for
the year ending 31 December 2006, which is the sum of 6.7 million euros, to the “Retained Earnings” account, carrying the debit balance of the
account from 1.4 million euros to 8.1 million euros.
The general meeting takes note that no dividend has been distributed by the Company for the last three financial years.

FOURTH RESOLUTION (Distribution of reserves)
The general meeting, sitting under the conditions of quorum and majority required for ordinary general meetings, noting that the reserves dedicated
to the share issue premium account show a credit of 160 million euros, decides, on proposal by the board of directors, to make a distribution
of 1.30 euro per share from the reserves in lieu of dividend.
This distribution from reserves will become payable as at 7 June 2007.
The distribution will be paid to shareholders either at the registered office of the Company, or at the counters of banking or financial institutions autho-
rised to make such payment, on proof of identity or on presentation of a certificate of deposit of securities or of the registration of their shares.
In the event that the Company holds a number of its own shares at the moment of payment of the distribution, the proportion of the distribution
corresponding to these shares and not paid out shall be allocated to the “Retained Earnings” account.
The general meeting notes that, given the existence of share warrants, allocated without consideration to shareholders in the Company in July
2006, with right of exercise until 30 June 2008, the board of directors shall inform holders of such warrants that have not yet been executed of the
parity adjustments to be made on execution of the warrants following the decision to make the distribution from reserves, the said adjustment to
be carried out in accordance with the provisions of article 242-13 of the modified decree of 23 March 1967 and the stipulations of article 5.1.13.4
of the offering circular as approved by the AMF, the French Financial Markets Authority on 30 June 2006 concerning the allocation without consi-
deration of these share warrants. The general meeting likewise takes note of the fact that adjustments shall be made concerning stock subscription
or stock purchase options and the rights resulting from the allocation of shares granted without consideration by the Company, in accordance with
the applicable provisions and regulations for stock subscription or stock purchase option plans and shares granted without consideration plans.

FIFTH RESOLUTION (Approval of the agreements covered by article L. 225-38 of the French Commercial Code)
The general meeting, sitting under the conditions of quorum and majority required for ordinary general meetings and having taken note of the
special report of the statutory auditors with regard to agreements covered by article L. 225-38 and following of the French Commercial Code,
approves the new agreements and the continuation of those previously authorised.




                                                                                                                                                               97

                                                                                                                                                  resolutions
      SIXTH RESOLUTION (Re-appointment of a director)
      The general meeting, sitting under the conditions of quorum and majority required for ordinary general meetings, having taken note of the report
      of the board of directors, decides to renew the appointment of Mr Francis Berthomier as a director for a period of six years, until the end of the ordi-
      nary general meeting called to examine the accounts for the year ending 31 December 2012. Mr Francis Berthomier had indicated in advance that
      he would accept the renewal of his term of office and that he met the conditions and obligations required by the regulations in force, in particular
      with regard to the plurality of offices.

      SEVENTH RESOLUTION (Re-appointment of a director)
      The general meeting, sitting under the conditions of quorum and majority required for ordinary general meetings, having taken note of the report
      of the board of directors, decides to renew the appointment of MSREF Turque S.à r.l as a director for a period of six years, until the end of the
      ordinary general meeting called to examine the accounts for the year ending 31 December 2012. MSREF Turque S.à r.l had indicated in advance
      that it would accept the renewal of its term of office and that it met the conditions and obligations required by the regulations in force..

      EIGHTH RESOLUTION (Global amount of directors’ fees)
      The general meeting, sitting under the conditions of quorum and majority required for ordinary general meetings, having taken note of the report
      of the board of directors, and in the light of the increasing frequency of Board meetings required by the growth of the Company, decides to raise
      the global amount of directors’ fees allocated annually to the board of directors from 30,000 euros to 100,000 euros for 2007 and each following
      year until a new decision is taken.

      NINTH RESOLUTION (Ratification of the decision to transfer the registered office and modification of article 4 of the articles of association)
      The general meeting, sitting under the conditions of quorum and majority required for ordinary general meetings, having taken note of the decision
      of the board of directors dated 19 December 2006 concerning the transfer of the registered office, decides to ratify the said transfer together with
      the modifications to article 4 of the articles of association of the Company required thereby.

      TENTH RESOLUTION (Authorisation to be conferred on the board of directors to trade in the shares of the Company)
      The general meeting, sitting under the conditions of quorum and majority required for ordinary general meetings, having taken note of the report
      of the board of directors in accordance with the provisions of article L. 225-209 of the French Commercial Code, articles 241-1 to 241-6 of the gene-
      ral regulations of the AMF, the French Financial Markets Authority, and regulation no. 2273/2003 of the European Commission dated 22 December
      2003, authorises the board of directors, with authorisation of sub-delegation, to buy shares in the Company directly or indirectly under the condi-
      tions set out below.
      The maximum purchase price of the shares in the context of this resolution shall not exceed 80 euros per share.
      In compliance with the legislation and regulations mentioned above, the purpose of the present authorisation is to enable the Company to trade in
      its own shares with a view to:
      • ensuring the maintenance of an active market with liquidity of transactions and regularity of the share price in shares of Mines de la Lucette
      through the intermediary of an investment services provider and a liquidity contract in accordance with the code of ethics of the AFEI as recognised
      by AMF, the French Financial Markets Authority;
      • issuing shares granted without consideration in accordance with the provisions of articles L. 225-197-1 and following of the French Commercial
      Code;
      • implementing stock subscription or stock purchase option plans in accordance with the provisions of article L. 225-177 and following of the
      French Commercial Code;
      • allocating shares to employees so as to involve them financially in the growth of the Company and the implementation of company savings plans
      under the conditions provided by law, in particular articles L. 443-1 and following of the French Employment Code;
      • conserving shares and carrying out subsequent discounts or exchanges when exercising rights attached to securities giving access to the
      Company’s equity or in the context of external mergers and acquisitions;
      • making purchases, sales or transfers in all forms through an investment services provider in particular as regards private transactions; or
      • cancelling them, subject to the decision of the general meeting of a reduction in capital or a delegation of authorisation to the board of directors.
      Purchases of the Company’s own shares shall concern a number of shares such that:
      • the number of shares that the Company buys under a share buyback programme does not exceed 10% of the shares comprising the Company’s
      share capital at any time and;
      • the number of shares that the Company holds at any time shall not exceed 10% of the shares comprising the Company’s share capital at that
      date.
      The total sum allocated to the share buyback programme referred to above shall not exceed 153 million euros.
      The general meeting decides that (i) the purchase, sale or transfer of shares may be executed and paid by any means in one or more operations,
      on the market or by private agreement, including the use of options, derivatives or securities giving right to shares in the Company, under the
      conditions provided by the market authorities and that (ii) the maximum amount of capital that may be transferred in blocks of securities may equal
      the total number of shares in the share buyback programme.




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The general meeting delegates to the board of directors the power to adjust the purchase price of the shares in order to take into account the
influence on their value of the following operations: modification of the nominal value; capital increase by capitalisation of reserves; issue of shares
granted without consideration; issue of share warrants; division or consolidation of shares; distribution of reserves or any other assets; reduction
of the share capital; or any other transaction concerning the shareholders’ equity.
The general meeting gives all authorisation to the board of directors with authorisation to subdelegate under the conditions provided by law and
the Company articles of association, to decide on the implementation of the present authorisation; to pass any and all market orders; to reach any
agreements; to carry out all formalities and declarations (in particular as required by the regulations in force with the French Financial Markets
Authority); and in general to do whatever is necessary for the application of this resolution.
The general meeting notes that with effect from this day this delegation to the board voides all prior delegations concerning the same subject for
its none-implemented part.
The board of directors shall inform the shareholders in an ordinary general meeting of all operations carried out in application of this resolution.
This authorisation is granted for a period of eighteen months with effect from the present general meeting.



Extraordinary business
ELEVENTH RESOLUTION (Delegation of authorisation to the board of directors to decide the increase in share capital, through the issue – with
maintenance of preferential subscription rights – of shares and/or securities giving access to the share capital)
The general meeting, sitting under the conditions of quorum and majority required for extraordinary general meetings, having taken note of the
report of the board of directors and the special report of the statutory auditors and in accordance with the provisions of articles L. 225-129 and
following of the French Commercial Code, and in particular of article L. 225-129-2 of the said code:

1. delegates to the board of directors, with power to subdelegate under the conditions fixed by law, all powers to decide an increase in share capital,
on one or more occasions in France, abroad and/or on the international market, in the proportions and at the times that it deems appropriate,
either in euros, or in any other currency or monetary unit established by reference to a basket of currencies, through the issue of shares (to the exclu-
sion of preference shares) or securities giving access to the equity of the Company (whether through new or existing shares), it being stipulated that
the subscription of shares and/or other securities may be executed either in cash or through offset of receivables or by incorporation of reserves
or profits or share premium account;

2. decides to set limits on the total capital increases authorised in the event that the board of directors makes use of the present delegation of autho-
risation as follows:
• the maximum nominal amount of additional capital that may be realised immediately or at term by virtue of the present delegation is fixed at
500 million euros, it being stipulated that the overall maximum nominal amount of capital increases that may be carried out by virtue of the present
delegation and of that conferred by the twelfth resolution, and of those conferred by the tenth and eleventh resolutions of the combined general
meeting of 3 April 2006 and of those conferred by virtue of the eighteenth, nineteenth, twentieth, twenty-first and twenty-second resolutions of the
combined general meeting of 27 June 2006 is fixed at 1.5 billion euros;
• to this ceiling shall be added, if required, the nominal value of additional shares that may be issued in the event of new financial operations, to pre-
serve the rights of bearers of securities giving access to the equity;

3. fixes the period of validity of the delegation of authorisation covered by this resolution at twenty-six months, counting from the date of the present
meeting;

4. in the event of use of this delegation by the board of directors, the general meeting:
• decides that the issue(s) shall be reserved by preference for the shareholders who may subscribe irreducibly in proportion to the number of shares
held by them at that time;
• notes that the board of directors has the power to institute reducible subscription rights;
• notes that, in the event of the issue of securities giving access to the equity of the Company, the present delegation of authorisation implies the
automatic renunciation by the shareholders of all preferential rights to subscribe to those shares to which the said securities give access either
immediately or at term, to the benefit of the holders of the said securities;
• notes that, if irreducible and reducible subscriptions have not absorbed the whole of the capital increase, the board of directors may, under the
conditions provided by law and in the order that it shall decide, make use of either or all of the following options:
– to limit the share issue to the amount of subscriptions on condition that this is at least three quarters of the increase decided;
– to make a free distribution of all or part of those shares or securities giving access to the equity which it had been decided to issue, but which
were not subscribed;
– to offer the public all or part of the shares or securities giving access to the equity that had not been subscribed, on French, foreign or interna-
tional markets;




                                                                                                                                                             99

                                                                                                                                                resolutions
      • decides that issues of share warrants by the Company may be carried out through subscription offers, but also through allocation without consi-
      deration to the owners of old shares, with the stipulation that the board of directors shall have the power to decide that extinct founders’ allocation
      rights shall not be negotiable and that the corresponding shares shall be sold;

      5. decides that the board of directors shall have all powers to implement the present delegation of authorisation and in particular to:
      • decide on the capital increase and determine the securities to be issued;
      • decide on the amount of the capital increase, the issue price and the amount of the premium which may be required on issue;
      • determine the dates and procedures for the share issue, the nature and characteristics of the securities to be created; additionally, in the case of
      bonds or other debt securities, to decide:
      – their subordination or other characteristics (and, where relevant, their level of subordination in accordance with the provisions of article L. 228-97
      of the French Commercial Code);
      – their interest rates (fixed or variable rate of interest, zero coupon or indexed) and provide for obligatory or facultative cases for the suspension or
      non-payment of interests;
      – establish their duration (fixed or indeterminate);
      – establish the possibility of reducing or increasing the nominal value of the securities or other types of issue (including by conferring guarantees)
      and of depreciation (including repayment by return of the Company’s assets); the said securities may be associated with warrants giving rights to
      the allocation, acquisition or subscription to bonds or other securities representing claims; or
      – establish the facility for the Company to issue debt securities (assimilable or not) in payment of interest whose payment has been suspended by
      the Company, or take the form of complex debt structures within the meaning of the market authorities (for example, because of their repayment
      or remuneration mechanisms or other rights such as indexing or options);
      – modify the mechanisms described above during the life of the securities concerned within the limits of the relevant regulations;
      • determine the way in which shares or securities giving access to the equity will issued either immediately or in the future;
      • establish as required the manner in which rights attached to shares or securities giving access to the equity shall be exercised and in particular
      to set the date, even retrospectively, with effect from which the new the shares will carry dividends; determine the exercise of rights for conversion,
      exchange or repurchase, including by return of Company assets such as securities already issued by the Company, together with all other terms
      and conditions of the share issue;
      • to set the terms and conditions under which the Company will be able to purchase or exchange on the market, at any time or during specified
      periods, those securities issued or to be issued immediately or in the future with a view to their cancellation or not, having regard to the legal
      provisions in force;
      • make provision for the power to suspend the exercise of rights attached to such securities in accordance with the legal and regulatory provisions;
      • on the Board’s sole initiative, to allocate the costs of the share issue to the share premium account and to deduct from this account the sums
      necessary to constitute the legal reserve;
      • establish and proceed with all adjustments required to take account of the impact of operations on the Company’s capital, in particular in the event
      of modification of the nominal value of the share, or of share issue by incorporation of reserves, allocation without consideration of shares, splitting
      or fusion of shares, distribution of reserves or of any other assets, depreciation of capital, or any other operation influencing the shareholders’
      equity, and fix the terms and conditions for assuring the preservation of the rights of the owners of securities giving access to the equity;
      • record the realisation of each share issue and proceed with the relevant modifications to the articles of association;
      • in a general manner, to sign any agreement in particular to reach a successful conclusion of the issues envisaged, to take all measures and carry
      out all formalities useful to the issue, the listing and the financial servicing of the securities issued by virtue of the present delegation of authorisation
      and the exercise of the rights attached thereto;

      6. takes note that this delegation with effect from the day hereof voides all prior delegations concerning the same subject for its none-implemented
      part in accordance with the provisions of article L. 225-129-2 para 2, that is to say any delegation of authorisation concerning the share issue with
      maintenance of preferential subscription rights regarding the securities and operations covered by this resolution;

      7. takes note that, in the event that the board of directors shall make use of the authorisation delegated by the present resolution, the board of directors
      shall account to the next ordinary general meeting following usage of the authorisations conferred in this resolution, in accordance with the law and
      the regulations.




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LA
LUCETTE
TWELFTH RESOLUTION (Delegation of authorisation to the board of directors to decide on an increase in share capital through the issue
of shares or securities giving access to the share capital, reserved for savings plan members and with suppression of preferential subscription
rights in favour of the said members)
The general meeting, sitting under the conditions of quorum and majority required for extraordinary general meetings, having taken note of the
report of the board of directors and the special report of the statutory auditors and in accordance with the provisions of articles L. 225-129-6 and
L. 225-138-1 of the French Commercial Code, and of articles L. 443-1 and following of the French Employment Code:
1. delegates authorisation to the board of directors to decide the increase in share capital, on one or more occasions, by a maximum amount of
200 million euros, through the issue of shares or securities giving access to the equity, reserved for members to one or more company savings plans
(or other plan for whose members which article L. 443-5 of the French Employment Code allows a share issue to be reserved under equivalent
conditions) established within the Group constituted by the Company and any French or foreign entities included in the scope of the consolidation
or combination of the Company’s accounts in accordance with article L. 444-3 of the French Employment Code. It is stipulated that the maximum
nominal amount of increases to the equity that may be realised immediately or at term by virtue of the present delegation shall be included in the
amount of the overall ceiling provided in paragraph 2 of the eleventh resolution of this present general meeting;
2. fixes the period of validity of the delegation of authorisation covered by this resolution at twenty-six months, counting from the date of the pres-
ent meeting;
3. decides that the issue price of the shares or new securities giving access to the equity shall be determined under the conditions provided in arti-
cle L. 443-5 of the French Employment Code and shall be at least equal to 80% of the Reference price (as defined below) or to 70% of the Reference
price where the period of non-availability required by the plan in accordance with article L. 443-6 of the French Employment Code is greater or equal
to ten years; nevertheless the general meeting expressly authorises the board of directors, at its own discretion, to reduce or suppress the discounts
indicated above, within the legal and regulatory limits in order to take account of the legal, accounting, tax or social security regimes locally appli-
cable; for the needs of this present paragraph, the Reference price expressly designates the average of the opening prices quoted for Company
shares on the Eurolist market of Euronext during the twenty market sessions immediately preceding the day on which the date was set for the
opening of subscriptions by members in a company savings plan;
4. decides to suppress the preferential subscription rights of shareholders to any securities resulting from this present authorisation in favour of the
beneficiaries indicated above;
5. decides that the board of directors shall have all authorisation to implement the present delegation, with authorisation of sub-delegation under
legal conditions, within the limits and under the conditions stated above, in particular as regards:
• establishing the list of companies whose employees, early retirers and pensioners may under legal conditions subscribe to the issued shares or
securities giving access to the equity and possibly benefit from shares granted without consideration or securities giving access to the equity;
• deciding that the subscriptions may be realised directly or through the intermediary of company unit trusts or other structures or entities allowed
by the relevant legal or regulatory provisions;
• deciding the conditions, in particular the number of years of service, that must be fulfilled by beneficiaries of this capital increase;
• setting the opening and closing dates for subscriptions;
• setting the amounts of issues to be made under the present authorisation and to decide the issue prices, dates deadlines, terms and conditions
of subscription, full payment, delivery and dividend dates of the securities (retroactive or not) together with any other terms or conditions of the
issues, within the limits of the law and regulations in force;
• recording the realisation of increases in capital up to the total amount of the shares that are subscribed (after possible reduction in the event of
over-subscription);
• if relevant, allocating the costs of the share issues to the share premium account and deducting from this account those sums required to create
the legal reserve of one-tenth of the new capital resulting from the share issue;
• entering into all agreements, and accomplishing directly or indirectly by appointed agent any and all operations and conditions including the
accomplishment of formalities resulting from the increase in capital and the corresponding modifications to the articles of association;
• in a general manner, signing any agreement in particular to reach a successful conclusion of the issues envisaged, taking all measures and carrying
out all formalities useful to the issue, the listing and the financial servicing of the securities issued by virtue of the present delegation of authorisation
and the exercise of the rights attached thereto;
6. decides that this delegation with effect from the day hereof voides all prior delegations concerning the same subject for its none-implemented
part that is to say any delegation of authorisation concerning the increase in the Company’s capital by issue of shares reserved for savings plan
members with suppression of preferential shareholder rights to the benefit of the said members.

THIRTEENTH RESOLUTION (Change in the corporate name of the Company and modification of article 3 of the articles of association)
The general meeting, sitting under the conditions of quorum and majority required for extraordinary general meetings, having taken note of the
report of the board of directors, decides to modify the Company name which thereafter shall become “Compagnie la Lucette” from that day on and
decides in consequence to modify article 3 of the Company articles of association as follows:




                                                                                                                                                                 101

                                                                                                                                                    resolutions
      “ARTICLE 3 – COMPANY NAME
      The Company name shall be: Compagnie la Lucette.
      In all deeds, acts, invoices, advertisements, publications and other documents issued by the Company, the Company name shall always be
      preceded or immediately followed by the legibly written words “société anonyme” or the initials SA and the indication of the amount of registered
      share capital, together with the Company’s registration number in the trade and companies register.

      FOURTEENTH RESOLUTION (Modification of article 27 of the articles of association)
      The general meeting, sitting under the conditions of quorum and majority required for extraordinary general meetings, having taken note of the
      report of the board of directors, decides to modify article 27 of the Company articles of association as follows

      “ARTICLE 27 – ACCESS TO MEETINGS – POWERS
      All shareholders have the right to be present at the general meetings and to participate in the deliberations personally or by proxy on simple proof
      of identity and of the ownership of his shares, subject to the following conditions:
      – holders of registered shares must have a record entered in the Company’s share register;
      – holders of bearer shares must have the shares entered or recorded in the bearer share accounts held by an authorised intermediary and recorded
      by a certificate of participation from the authorised intermediary or on presentation of an admission card.
      These formalities must be accomplished at least three (3) business days prior to the meeting.
      The board of directors may reduce the above-mentioned period by a general measure benefiting all the shareholders.
      All shareholders may employ remote voting prior to the meeting under the current legal and regulatory conditions.
      Shareholders may send in their proxy form or remote voting form concerning any general meeting, either on paper or by electronic transmission on
      decision of the board of directors as shown in the notice of meeting, in accordance with the laws and regulations in force.”

      FIFTEENTH RESOLUTION (Delegation of authorisation to carry out formalities)
      The general meeting gives all authorisation to the bearers of an original, a copy or an extract of the minutes of this meeting to accomplish all
      formalities required by law.




      Persons responsible for the registration document
      and the audit of the accounts
      Mr Stéphane Theuriau, Chairman of the board of directors & CEO

      Mines de la Lucette
      7, rue Scribe
      75009 Paris

      STATEMENT BY THE PERSON RESPONSIBLE FOR THE REGISTRATION DOCUMENT
      I certify, having taken all reasonable measures to this end, that the information contained in this registration document is to my knowledge in accor-
      dance with reality and does not contain any omissions liable to alter this conclusion.
      I have received a letter of completion from the statutory auditors in which they state that they have carried out a verification of the information relating
      to the financial situation and the accounts given in the present registration document, and that they have read the entire registration document.
      The financial information given in the registration document is covered by the reports of the statutory auditors shown in pages 78 (consolidated financial
      statements), 87 (company financial statements) and 94 (pro forma financial data) of the registration document.



                                                                                                                                          Paris, 28 March 2007

                                                                                                                            Chairman of the board of directors,
                                                                                                                                           Stéphane Theuriau




102
COMPAGNIE
LA
LUCETTE
PERSON RESPONSIBLE FOR THE INFORMATION
Mr Stéphane Theuriau, Chairman of the board of directors & CEO

Mines de la Lucette
7, rue Scribe – 75009 Paris – Tel.: +33 (0)1 42 25 86 86 – Fax: +33 (0)1 42 25 86 70
E-mail: contact@m2lgestion.com – www.minesdelalucette.com

AUDITORS

Statutory auditors
RSM RSA (formerly RSA SEEC)
Member of the Paris branch of the Auditors Association
40, avenue Hoche – 75008 Paris
Date appointed: ordinary general meeting of 27 June 2003.
Date of termination: general meeting held to approve the financial statements for 2008.

ERNST & YOUNG Audit
Member of the Versailles branch of the Auditors Association
Tour Ernst & Young, Faubourg de l’Arche – 92037 Paris – La Défense Cedex
Date appointed: ordinary general meeting of 15 June 2005.
Date of termination: general meeting held to approve the financial statements for 2010.

Alternate auditors
Ms Isabelle Couteret Castel
40, avenue Hoche – 75008 Paris
Date appointed: ordinary general meeting of 27 June 2003.
Date of termination: general meeting held to approve the financial statements for 2008.

AUDITEX
Tour Ernst & Young, Faubourg de l’Arche – 92037 Paris – La Défense Cedex
Date appointed: ordinary general meeting of 15 June 2005.
Date of termination: general meeting held to approve the financial statements for 2010.




Fees paid to the auditors
The fees paid to the statutory auditors for their appointment to audit the Company and consolidated financial statements of the companies in the
Mines de la Lucette Group and for any ancillary engagements carried out are shown in the table below:
In thousand euros                                          Ernst & Young                      RSA SEEC                      Atriom/Lecaron
                                                    2006         2005      2004        2006     2005      2004       2006         2005       2004

Audit
CAC                                                 343           40                   125       18         43                     39         53
Ancillary engagements                                 28                                24       15                                15          5
Other services
Legal, tax, social security                                       80
Information technology
Internal audit
Total                                               371         120          0         149       33         43          0          54         58




                                                                                                                                                    103

                                                                                                                                  responsibilities
      INFORMATION POLICY


      It is the Group’s ongoing policy to disseminate as widely as possible the clearest possible information, and all the financial news and all the documents
      published by the Mines de la Lucette Group are available on the Internet at www.minesdelalucette.com.
      The following current documents and their previous versions are available by written request to the Company’s registered office or through the
      “Contact” section on the Company’s website:
      – the annual report;
      – the registration document filed with the AMF;
      – the financial operations circular registered with the AMF;
      – the notice convening the general meeting, sent as a matter of routine to all registered shareholders.
      The following legal documents may be consulted at the Company’s registered office at 7, rue Scribe, 75009 Paris:
      – acts of incorporation and the Company articles of association;
      – all reports, letters and other documents, historical financial information, evaluations and declarations established by an expert at the issuer’s
      request, parts of which are included in or covered by the present document;
      – the historical financial information about the Company and its subsidiary for each of the two financial years preceding the publication of this regis-
      tration document.



      Regulatory filings
      The list of information published or made public by the Mines de la Lucette Group during the year from 1 January 2006 to 16 March 2007,
      in accordance with the French Monetary and Financial Code (Code monétaire et financier) and article 221-1-1 of the general regulations of the
      AMF, is as follows:
      – turnover for the year 2005 published in the Bulletin des annonces légales obligatoires (”BALO”) of 17 February 2006,
      – press releases concerning the signature of a bilateral agreement concerning a portfolio of five office properties published on 29 March 2006 and
      5 April 2006,
      – notice convening a combined ordinary and extraordinary general meeting on 3 April 2006 published in the BALO of 17 March 2006;
      – press release concerning the purchase of 13 logistics platforms from the Casino group published on 3 April 2006;
      – total number of existing voting rights as at 3 April 2006 published in the BALO of 10 April 2006;
      – declaration of threshold crossing and declaration of intent lodged with the AMF no. 206C0687 on 11 April 2006;
      – declaration of threshold crossing and declaration of intent lodged with the AMF no. 206C0701 on 12 April 2006;
      – turnover for the first quarter of 2006 published in the BALO of 17 May 2006;
      – notice convening a combined ordinary and extraordinary general meeting on 27 June 2006 published in the BALO of 26 May 2006;
      – notification of exemption from the obligation to lodge a takeover bid proposal for the Company’s shares lodged with the AMF no. 206C1026
      on 31 May 2006;
      – press release concerning the signature of a bilateral agreement covering the Colisée building with the Vivendi and Philip Morris Capital Partners
      groups published on 1 June 2006;




104
COMPAGNIE
LA
LUCETTE
– notice convening a combined ordinary and extraordinary general meeting on 27 June 2006 to consider the modifications made by the board of
directors published in the BALO of 9 June 2006;
– registration document 2005 filed with the AMF on 12 June 2006 no. D006-0553;
– declaration of threshold crossing and declaration of intent lodged with the AMF no. 206C1258 on 27 June 2006;
– Company and consolidated financial statements of the Mines de la Lucette Group published in the BALO of 30 June 2006;
– offering circular concerning the share issue with subscription rights for the sum of 328 million euros and the allocation without consideration
of share warrants to shareholders in Mines de la Lucette lodged with the AMF on 30 June 2006 no. 06-245;
– press release concerning the launch of the share issue with subscription rights for the sum of 328 million euros and the allocation without conside-
ration of share warrants to shareholders in the Company published on 3 July 2006;
– launch of the share issue with subscription rights for the sum of 328 million euros and the allocation without consideration of share warrants
to shareholders in Company published in the BALO of 5 July 2006;
– definitive Company and consolidated financial statements of the Mines de la Lucette Group, general report of the statutory auditors and allocation
of earnings published in the BALO of 17 July 2006;
– press release concerning the result of the share issue published on 4 August 2006;
– total number of voting rights existing as at 3 August 2006 published in the BALO of 11 August 2006;
– turnover for the second quarter of 2006 published in the BALO of 16 August 2006;
– press release concerning the appointment of Mr Stéphane Theuriau as Chairman and CEO of the Company published on 6 September 2006;
– press release concerning the establishment of a liquidities contract published on 6 September 2006;
– press release concerning the half-yearly consolidated financial statements for 2006 published on 2 October 2006;
– press release concerning the purchase of a portfolio of office properties in the Paris region published on 2 October 2006;
– half-yearly consolidated financial statements for 2006 published in the BALO of 20 October 2006;
– turnover for the third quarter of 2006 published in the BALO of 15 November 2006;
– total number of voting rights existing as at 31 December 2006 published in the BALO of 2 February 2007;
– turnover for the fourth quarter of 2006 published in the BALO of 14 February 2007;
– press release concerning the annual consolidated financial statements published on 8 March 2007;
– press release concerning the appointment of Mr Janick Dupessey as director for Promotion and Risks published on 16 March 2007.




                                                                                                                                                         105

                                                                                                                              information policy
      CROSS REFERENCE TABLE


      The table below refers to the principal subjects contained within the pages of this registration document as required by regulation no. 809/2004 in
      accordance with European directive 2003-1971/CE.
      The following information is also referred to in this registration document:

      2005
      Included in registration document no. D06-553 filed with the AMF on 12 June 2006:
      – the Group financial report;
      – the consolidated financial statements and the statutory auditors’ report on the consolidated financial statements for the year ended 31 December 2005;
      – the company financial statements and the statutory auditors’ report on the company financial statements for the year ended 31 December 2005;
      – the statutory auditors’ special report on regulated agreements for the year ended 31 December 2005.

      2004
      Included in registration document no. D05-1168 filed with the AMF on 22 September 2005:
      – the Group financial report;
      – the consolidated financial statements and the statutory auditors’ report on the consolidated financial statements for the year ended 31 December 2004;
      – the company financial statements and the statutory auditors report on the Company financial statements for the year ended 31 December 2004;
      - the statutory auditors’ special report on regulated agreements for the year ended 31 December 2004.


              Headings in appendix 1 of regulation 809/2004                                                                         Page in reference document

       1      Persons responsible
      1.1     Person responsible for the registration document                                                                                       102-103
      1.2     Statement by the responsible of the registration document                                                                                  102

       2      Statutory auditors                                                                                                                         103

       3      Selected financial information
      3.1     Selected financial information                                                                                                                3
      3.2     Intermediate financial information                                                                                                         N/A

       4      Risk factors                                                                                                                   35/43/48-51/71

       5      Information about the issuer
      5.1     History and development of the Company                                                                                                        2
      5.2     Investments                                                                                                                                   2

       6      Overview of the activities
      6.1     Principal activities                                                                                                            2/23-30/64-65
      6.2     Principal markets                                                                                                                          N/A
      6.3     Exceptional events                                                                                                                         N/A
      6.4     Dependence on patents, licences, industrial, commercial or financial contracts, or new manufacturing processes                             N/A
      6.5     Competitive position                                                                                                                       N/A

       7      Organisation chart                                                                                                                         3/41

       8      Real estate, plant and equipment
      8.1     Major tangible assets existing or planned                                                                                       4/23-24/31-32
      8.2     Environmental impact of the use of these fixed assets                                                                                        42

       9      Operating and financial review
      9.1     Financial condition                                                                                                                      33-35
      9.2     Operating income                                                                                                                  26-30/55/80




106
COMPAGNIE
LA
LUCETTE
10     Cash and cash equivalents and capital ressources
10.1   Information about the capital structure                                                                      56-57/81
10.2   Cash flows                                                                                                         58
10.3   Borrowing requirements and funding structure                                                                    33-35
10.4   Restrictions on the use of capital                                                                                N/A
10.5   Expected sources of funds                                                                                         N/A

11     R&D, patents and licences                                                                                         N/A

12     Trend information
12.1   Significant recent trends                                                                                    43/44/77/
12.2   Known trends or events liable to affect the prospects of the issuer                                                43

13     Forecasts or estimates                                                                                            N/A

14     Administrative and management bodies
14.1   Administrative bodies                                                                                  15-21/42/45-48
14.2   Conflicts of interest                                                                                              20

15     Remuneration and benefits                                                                                 21/42/77/86

16     Board practices
16.1   Dates of expiry of current terms of office                                                                16-20/42/45
16.2   Information about service contracts                                                                             88-90
16.3   Information about the audit committee and the compensation committee                                      15/46-47/53
16.4   Statement concerning corporate governance                                                                          21

17     Employees
17.1   Number of employees                                                                                             40/75
17.2   Shareholding and stock options                                                                              9/21/39/72
17.3   Employee holdings in the issuer’s equity                                                                     21/39/72

18     Major shareholders
18.1   Shareholders holding over 5% of the capital                                                                     11-14
18.2   Different voting rights                                                                                            11
18.3   Control of the issuer                                                                                           11-14
18.4   Agreements whose implementation could lead to a change of control                                                 N/A

19     Related parties transactions                                                                                 48/88-90

20     Financial information concerning the assets, the financial situation and earnings of the Company
20.1   Historical financial information                                                                                  106
20.2   Pro forma financial information                                                                                 91-93
20.3   Financial statements                                                                                            54-77
20.4   Auditing of historical annual financial information                                                    78/87/88-90/94
20.5   Dates of the latest financial information                                                                         N/A
20.6   Intermediary and other financial information                                                                      N/A
20.7   Dividend policy                                                                                                 38/86
20.8   Legal and arbitration proceedings                                                                                   3
20.9   Significant changes in the financial or trading situation                                                         N/A

21     Additional information
21.1   Share capital                                                                                         5-14/38-40/65/69
21.2   Acts of incorporation and articles of association                                                                 5-6

22     Important contracts                                                                                               N/A

23     Third parties information, statements by experts and declarations of interest                                     N/A

24     Documents on display                                                                                        6/104-105

25     Information on shareholding in subsidiaries                                                            36-37/66/84-85




                                                                                                                                107

                                                                                                          cross reference table
The original French version of this translated Registration Document was filed with the Autorité des Marchés Financiers on March 28, 2007,
number D07-0239, pursuant to Article 212-13 of the general regulations of the Autorité des Marchés Financiers. It may be used in connection
with a financial operation if completed by a prospectus for the operation and a summary, each of which has received the visa of the Autorité
des Marchés Financiers.
7, RUE SCRIBE
75009 PARIS
FRANCE
TEL. : +33 (0)1 42 25 86 86
FAX : +33 (0)1 42 25 86 70

				
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