Bringing the city to life

Transcription

1 ANNUAL REPORT 2006 Bringing the city to life

2 Contents 1 CORPORATE GOVERNANCE...5 The Board of Directors...6 Committees of the Board of Directors...6 Management Committees PRESENTATION...11 The Chairman s Message...12 Stock Market Flotation...14 Profile...16 Background...18 Key Figures...20 Strategy ICADE S THREE MARKETS...27 A market-based organisation...28 Housing...30 Commercial Property...34 Public-Health Partnerships...38 International...42 Les portes d Arcueil Arcueil (94) 44,600 m 2 of net floor space (shon) Icade Tertial: developer Icade Arcoba: technical studies Architect: François Leclercq Investor: UBS User: Orange Operation nominated for the Équerre d argent 2006 prize 4 SUSTAINABLE DEVELOPMENT...47 Icade, a sustainable development player...48 Environmental Quality HUMAN RESOURCES...53 Icade s Employees...54 Career Development / Recruitment ORGANISATION CHART...57 Eugénie Salgado-Larbodière 7 ANNUAL ACCOUNTS at Consolidated financial statements...62 Notes to the consolidated financial statements...70 Statutory Auditors Report on the consolidated financial statements Corporate financial statements Statutory Auditors General Report on the annual accounts Statutory Auditors Special Report on related-party agreements Chairman s Report on corporate governance Statutory Auditors Report on the Chairman s Report

3 1 Lycée Galilée Gennevilliers (92) 22,000 m 2 of net floor space Icade G3A: agent Architect: J.P. Lott Project Owner: Region Île-de-France Valérie Palcy Corporate governance 4 5

4 Corporate governance THE BOARD OF DIRECTORS The Board of Directors determines the guidelines of Icade s businesses and oversees their implementation. Subject to the powers expressly assigned during Shareholders Meetings, and within the confines of the corporate purpose, it deals with all matters relating to the smooth running of Icade and, through its deliberations, makes decisions on matters concerning it. The Board of Directors meets at least three times a year and whenever the interests of the company so require. It met eight times during COMMITTEES OF THE BOARD OF DIRECTORS In order to support it in its work, the Board of Directors has set up three specialist committees: an audit committee, a nominations and remuneration committee, and an investment committee. THE AUDIT COMMITTEE The audit committee assesses the quality of the financial information submitted to the Board of Directors and examines the regulatory accounting methods used to produce the financial statements. It supplements the work of the Statutory Auditors without replacing them. The members of the audit committee are Christian Peene (Chairman), Jérôme Gallot and Marc-Antoine Autheman. It met four times during THE NOMINATIONS AND REMUNERATION COMMITTEE The nominations and remuneration committee makes proposals to the Board of Directors concerning the appointment of Directors and the remuneration of the Chairman and Chief Executive Officer. The members of the nominations and remuneration committee are Edmond Alphandéry (Chairman), Étienne Bertier, Jérôme Gallot and François Pochard. Guy Parisot, head of Icade s Human Resources, has been appointed as its secretary. This committee met three times during THE INVESTMENT COMMITTEE The investment committee makes decisions on any Icade investment or disinvestment undertaking, the value of which (or the aggregate turnover for multi-annual contracts) is over 50 million. In respect of acquisition and interest-taking operations, the committee makes decisions on undertakings of more than 30 million. The members of the investment committee are Étienne Bertier (Chairman), Caisse des dépôts represented by Dominique Marcel, Edmond Alphandéry and Christian Peene. It met four times during THE MEMBERS OF THE BOARD OF DIRECTORS* Francis Mayer Managing Director, Caisse des dépôts died on 09/12/2006 Edmond Alphandéry Chairman of the Supervisory Board, CNP Assurances Marc-Antoine Autheman Independent Director Étienne Bertier Chairman and Chief Executive Officer, Icade Pascal Duhamel Managing Director, Morgan Stanley Jérôme Gallot Chairman, CDC Entreprises Christian Peene Managing Partner, CMP Consultants Independent Director Le Millénaire 1 - Parc du Millénaire Paris, 19 th arrondissement 30,000 m 2 of net floor space Icade Emgp: investor Icade Tertial: assistant to the project owner Architect: Arte Charpentier Building certified NF bâtiments tertiaires-démarche HQE (French commercial property standard High Environmental Quality Approach) Icade s future headquarters * at Caisse des dépôts, represented by Dominique Marcel Head of Finance and Strategy, Caisse des dépôts François Pochard Senior Managing Director, Ixis Aew Europe 6 7

5 Corporate governance MANAGEMENT COMMITTEES THE MANAGEMENT COMMITTEE The management committee meets every week to deal with matters relating to the finances, organisation, customers and employees of Icade. It also routinely discusses current projects. THE STRATEGIC COMMITTEE The strategic committee meets every six weeks to deal with the strategy and guidelines of Icade, the development of operational activities, business acquisitions and disposals, and synergy between the Business Units. THE UNDERTAKINGS COMMITTEE The undertakings committee is responsible for assessing and authorising all the investment or disinvestment commitments of Icade and its Business Units, whether such commitments are on or off the Group s balance sheet. It meets twice a month and whenever the situation so requires. It examines all projects which exceed certain thresholds. Projects referred to Icade s undertakings committee are subject to prior authorisation by the undertakings committees and/or meetings for each market, with the latter deciding in respect of all projects without any threshold limit. Without any threshold limit, the undertakings committee decides on all projects for international development, expansion into new business lines and on acquisition operations, and in respect of taking interests, the disposal of shares, businesses, mergers and partnerships. THE HUMAN RESOURCES COMMITTEE The human resources committee meets every two weeks to discuss human resources considerations within Icade and, in particular, to monitor major ongoing projects, report on mobility, recruitment, legislation and legal considerations, training and the introduction and monitoring of procedures. From left to right: Jean-Pierre Matton, Antoine Fayet, Inès Reinmann, Étienne Bertier, Marianne de Battisti, Bertrand Delannoy and Guy Parisot. THE MEMBERS OF THE MANAGEMENT COMMITTEE Étienne Bertier Chairman and Chief Executive Officer Marianne de Battisti Head of the International and Communications Division Bertrand Delannoy Head of Finance, IT and Legal Affairs Antoine Fayet Head of the Housing Division Jean-Pierre Matton Head of the Public-Health Partnerships Division Guy Parisot Head of Human Resources and the Audit Division Inès Reinmann Head of the Commercial Property Division 8 9

6 2 Headquarters of the Region Nord-Pas-de-Calais Lille (59) 51,000 m 2 of net floor space Icade G3A: agent Architects: Delemazure - Neveux - Trace - Wilmotte Project Owner: Region Nord-Pas-de-Calais Presentation Philippe Aubert 10 11

7 The Chairman s Message A year ago, Icade set itself the target of becoming one of the main European property players. Today, this target has been achieved. The stock market flotation in April 2006 was a resounding success. It provided Icade with the financial resources to step-up its growth strategy whilst consolidating a unique property developer model. This major change to the company could not have taken place without the support of Caisse des dépôts and, in particular, its Managing Director, Francis Mayer, who died in December. WITH EXCEPTIONNAL RESULTS Yet again, this year, Icade confirmed the effectiveness of its business model. Its efficient market-based (housing, commercial property and public-health partnerships) and business line-based (development, investment and services) organisation is perfectly equipped to handle specific customer problems, whether the latter are individuals, investors or users. It also allows the company to benefit from the dynamic nature of development, the solidity of the investments and the recurrence of services. Turnover reached 1,327 million, representing a significant increase compared to 2005 (+ 12.5%), owing, in particular, to the dynamism of the housing development division. The development order book represents 478 million for the housing division and 650,000 m 2 currently being developed and constructed for the commercial property and the publichealth partnership. The EBITDA was up 30.6%, from 201 million in 2005 to 262 million in 2006, giving an EBITDA margin of 19.8% at the end of 2006 compared with 17% at the end of This significant increase is due to the dynamism of the business and sustained productivity initiatives. In 2006, Icade carried out an asset-arbitration programme by disposing of three SCIs (non-trading property companies) belonging to Icade Foncière des Pimonts ( 93 million of income from disposals), and housing units belonging to Icade Patrimoine ( 35 million). In all, the income from disposals was 125 million compared to 37 million at 31 December On account of the foregoing, the Group s share of net income was up by a significant 198% to 211 million at the end of On 21 February 2007, Icade s Board of Directors suggested that the General Meeting of 12 April 2007 resolve to pay out a dividend of 1.35 per share, representing 60% of Icade s consolidated net income. Icade has a significant asset base. It is made up of 2.5 million m 2 of housing in the Île-de-France region, 568,000 m 2 of office buildings and business premises in Paris, La Défense, Boulogne, Issy-les-Moulineaux, La Plaine Saint-Denis, Levallois-Perret, and 150,000 m 2 of office buildings in the main German cities. The appraised value of these assets was 4.4 billion at 31 December 2006, up 41% compared to 31 December 2005, and the revalued net asset value of the investments was 2.8 billion, representing an increase of 64% compared to 31 December FOR ICADE, 2006 was characterised by the launch of the construction of part of the 1,000 housing units being planned by Icade Capri, on land belonging to Icade Patrimoine, which shall acquire half of said housing units; by protection measures for tenants suffering rent increases following their leases no longer being subject to agreements: maximum 25% ceiling on rent versus revenue, no rent increase for tenants over 70 years old; by the filing of six building permits by Icade Pierre pour Tous for affordable housing operations; by the delivery of Millénaire 1 on the Icade Emgp site (30,000 m 2 ), which will house Icade s new headquarters; by the launch of the construction, by Icade Tertial, of an office building in Villejuif (15,000 m 2 ) on behalf of Icade Foncière des Pimonts. Icade s position as one of the leading companies in respect of public-private sector partnerships was confirmed with the 5 new contracts which it won. Icade Foncière Publique made its first major investment with the acquisition of a 30,000 m 2 office building in Levallois-Perret, which is rented out to the French Ministry of the Interior. The company has also stepped up its international presence through the acquisition of the property portfolio of DaimlerChrysler in Germany (150,000 m 2 and 79 hectares of property reserves). Finally, Icade Foncier Développement concluded a large-scale operation by purchasing the former MacDonald warehouses in Paris (130,000 m 2 over 5 hectares). THE INVESTMENT PLAN WHICH WAS ANNOUNCED WHEN THE COMPANY WAS FLOATED ON THE STOCK MARKET IS CURRENTLY BEING IMPLEMENTED Buoyed-up by the success of its stock market flotation, Icade demonstrated its ability to seize investment opportunities in France and Europe by investing 875 million during In March 2006, Icade laid down plans to invest 1.8 billion over 4 years. At present, almost all this amount has already been identified. Consequently, during the second half of 2007, Icade will increase the amount of its investment plan. With its strong position in its domestic market and its unique know-how as regards property restructuring and development, Icade will continue to focus on acquisitions of assets having significant value-generation potential: maintenance and reinvestment in Icade Patrimoine, Parc du Millénaire buildings and the implementation of a master plan for Icade Emgp, shopping centres at Aubervilliers and the Odysseum for Icade Emgp and Icade Foncière des Pimonts, finalisation of the operation with Immobilière Mr. Bricolage for Icade Foncière des Pimonts, acquisition of lands and international expansion. ÉTIENNE BERTIER 12 13

8 Stock Market Flotation 12 April 2006 witnessed the culmination of a long human and financial adventure: the floating of Icade on the Eurolist market of Euronext Paris SA, with 700 million being raised. This stock market flotation enabled staff to be offered the chance to be involved in the company s operations and associated with its success (eight employees out of ten subscribed for the offer reserved for staff), for an ambitious investment plan to be implemented, both in France and in Europe, and for the company to begin to compare itself with the major property sector players. The rise in the share price (+72% between 12 April and 29 December 2006) meant that Icade was one of the most high-profile companies on the market and highlighted investor-confidence in a company in the original position of being an integrated property developer. Icade s share price: very sharp rise since flotation on the stock market On 12 april CHANGE IN THE ICADE SHARE PRICE, EPRA* AND CAC 40 from to % 70 % ICADE EPRA CAC 40 ICADE S SHAREHOLDING AT 31 DECEMBER 2006 (in %) 60 % 50 % % Caisse des dépôts Employees Float (number of freely-traded shares in public hands) 30 % 20 % 10 % 0 % 10 % % april 06 may 06 june 06 july 06 august 06 september 06 october 06 november 06 december 06 january 07 * European Public Real Estate Association

9 Presentation PROFILE Icade is an integrated property developer involved in the three major property markets: housing for private tenants, first-time buyers or investors, commercial property (offices, business premises, leisure and shop premises) for companies and institutional investors and public and health property (communal and health facilities) for local government, authorities and public services. Icade has crafted its organisation so as to consolidate its presence in each of these markets: development (design and development), investment (investment, ownership and arbitration), and services (management and operations). This strategic policy allows it to provide its customers with adapted solutions and to intervene, globally, in respect of the sector s main current problems such as public-private partnerships, the outsourcing of major asset bases or integrated-service offers. This model means that Icade has access to property resources, the enhancement of customer-relations, and limited exposure to property cycles, whilst favouring growth and constant revenue levels. In 2006, with a view to completing this model, Icade created Icade Foncier Développement so as to acquire and enhance sites for all its structures. The 2006 creation of Icade Reit, which holds its office assets acquired from DaimlerChrysler in Germany, also confirms the company s European growth policy Méridia Nice (06) 28,500 m 2 of net floor space Icade Tertial Regions: co-developer Architects: Reichen & Robert/ M. Benaïm/J.P. Gomis/Brante & Vollenweider Investor: Cogedim Office Partners 2 - Les Hauts de Montlouis Oullins (69) 76 housing units Icade Capri: developer Architects: F. Dreidemie/Archigroup 3 - Institut d optique Graduate School-Campus Polytechnique Palaiseau (91) 12,200 m 2 of net floor space Icade G3A: agent Designer: Serau Architectes et ingénieurs associés Developer: GSE Project Owner: Institut d optique Graduate School

10 Presentation BACKGROUND SOME KEY DATES FOR ICADE Since 1954, Icade, formerly known as the Société Centrale Immobilière de la Caisse des dépôts (SCIC), has been one of the major players in the French property sector. In 2004, its transformation was stepped up by the introduction of a policy of 100% control of its unlisted subsidiaries, by the continuation of its expansion in the housing market, by a significant increase in its presence in the commercial property market, by the development of the public business, by the disposal of assets which were no longer in-line with its development model (within the context of the reorganisation of the property-related activities of Caisse des dépôts) and, finally, by a first major step to establishing a presence in Germany through investment in office buildings HOUSING Scic Creation Capri Creation COMMERCIAL PROPERTY PUBLIC-HEALTH PARTNERSHIPS Initially, and until the end of the 1980s, Icade was a service group specialised in building housing and public and para-public infrastructures. Today, it is one of the few property developers in Europe which operates on three property markets (housing, commercial, public and health), and throughout the value chain (development, investment and services) G3A Creation Setrhi Acquisition 1998 GFF Acquisition Capri Acquiring minority interests Cabinet Villa Acquisition Eurogem Acquisition Tertial Creation Emgp Acquisition Arcoba Acquisition Foncière des Pimonts Acquisition Eurogem Acquiring minority interests Icade Conseil Acquisition Foncière des Pimonts Acquiring minority interests Icade Foncière Publique Creation Domaine de Villiers Draveil (91) Icade Patrimoine: investor 2006 Icade Gestion Tertiaire Creation Icade Reit BV Creation Icade Foncier Développement Creation 18 19

11 Presentation KEY FIGURES FOR 2006 ON A LIKE-FOR-LIKE BASIS TURNOVER m1,327 GROWTH 12.5% GROWTH 30.6% GROWTH 198% EBITDA m262 NET INCOME GROUP SHARE m211 REVALUED NET ASSET VALUE (Icade proportion of 5 investment companies) m2,807 CONSOLIDATED KEY FIGURES At 31 December 2006, Icade recorded consolidated turnover of 1,327.2 million, broken-down between housing (64%), commercial property (27%) and public-health partnerships (9%). Icade continued to record two-figure growth during 2006 owing to the good performance of rent and the significant expansion of housing development. During the same period, Icade generated EBITDA of million, up 30.6% compared to 31 December This major increase is principally linked to the very good performance levels of housing development ( million) and the dynamism of the investment companies ( million, 20.6 million of which was for Icade Patrimoine, 9.8 million for the three commercial property investment companies and 3.1 million for Icade Foncière Publique). The EBITDA margin therefore reached a high level of 19.8% at 31 December 2006, reflecting the major productivity initiatives and the effectiveness of the company s business model (growth, recurrence and profitability). At 31 December 2006, income from disposals stood at million compared to 36.9 million at 31 December This is mainly composed of the disposals of the three SCIs belonging to Icade Foncière des Pimonts ( 93.3 million in income from disposals) and the disposal of the housing properties of Icade Patrimoine ( 34.6 million, 227 housing units sold unitarily, and 553 housing units sold as a block). million (IFRS) Variation Turnover 1,179 1, % EBITDA % EBITDA/TURNOVER 17% 19,8% pts Income from disposals % Net income, Group share % Net current cash-flow % Net financial debt % Shareholders equity 1,161 1, % GROWTH 64% LTV (Loan To Value)* 25% 14% 11 pts Revalued liquidation net asset value (Icade proportion**) 1,709 2, % * Defined as the net financial debt on the value of assets. ** Including direct interests in the SCIs of Icade Patrimoine. Lycée Galilée Gennevilliers (92) 22,000 m 2 of net floor space Icade G3A: agent Architect: J.P. Lott Project Owner: Region Île-de-France 20 21

12 Presentation CONTRIBUTIONS TO TURNOVER Housing turnover increased by 20.9% to million owing to the dynamism of housing development (+ 137 million) and Icade Patrimoine (+ 11 million). Commercial property turnover was down 2% to 352 million which was essentially due to the delivery of the Portes d Arcueil office building in June Nevertheless, the commercial property investment companies saw a 6% increase in their turnover with the integration of the German property investments. Public-health partnerships turnover increased by 31% to million owing to the development business. Change 2005/2006 DEVELOPMENT m748 (56% of TURNOVER) INVESTMENT m328 (25% of TURNOVER) SERVICES m257 (19% of TURNOVER) (in million) SYNERGY CONTRIBUTIONS TO EBITDA Icade generated EBITDA of million, up 30.6% compared to 31 December This major increase is principally linked to the very good performance levels of housing development ( million) and the dynamism of the property investment companies ( million, 20.6 million of which was for Icade Patrimoine, 9.8 million for the three commercial property investment companies and 3.1 million for Icade Foncière Publique). Change 2005/2006 DEVELOPMENT m88 (34% of total EBITDA) INVESTMENT m179 (68% of total EBITDA) HOUSING COMMERCIAL PUBLIC-HEALTH PROPERTY PARTNERSHIPS m847 m352 m124 (64% of TURNOVER) (27% of TURNOVER) (9% of TURNOVER) % % + 74% % % % % TURNOVER: m1,327* 2005/2006 TURNOVER change: % HOUSING COMMERCIAL PUBLIC-HEALTH PROPERTY PATNERSHIPS m145 m118 m9 (55% of EBITDA) (45% of EBITDA) (3% of EBITDA) % % % 3.1 5% 28% + 25% NET INCOME The Group s share of net income tripled between 2005 and 2006 to reach million ( 70.8 million in 2005). REVALUED LIQUIDATION NET ASSET VALUE The value of the asset base of Icade s five investment companies (Icade Patrimoine, Icade Emgp, Icade Foncière des Pimonts, Icade Foncière Publique and Icade Reit), not including rights, at 31 December 2006, was 4.4 billion, up 41% compared to 31 December Icade s share in the revalued liquidation net asset value of the five investment companies was 2.81 billion, up 64% compared to 31 December At 31 December 2006, the Loan To Value (ratio of the net debt / value of the assets of Icade Patrimoine, Icade Emgp, Icade Foncière des Pimonts, Icade Foncière Publique and Icade Reit) was 14% owing to the capital increase carried-out during the flotation on the stock market for 70 million and the increase in the value of the assets. A SOUND ASSET BASE HOUSING Icade Patrimoine 1.9 billion TYPE OF ASSETS 44,000 intermediate housing units in Île-de-France 2.55 million m 2 on 580 ha of land Average rent: 6 /m 2 /month Value of assets: 720 /m 2 /flat COMMERCIAL PROPERTY Icade Emgp 1.2 billion TYPE OF ASSETS Business parks in North-East Paris 372,000 m 2 of offices and business premises on 76 ha Icade Reit 0.4 billion TYPE OF ASSETS Icade Foncière des Pimonts 0.7 billion TYPE OF ASSETS Top-end offices in the central business district 80,000 m 2 of rented offices and business premises (Group s share) 150,000 m 2 of offices 79 ha of property reserves, 72 ha of which to be acquired during 2007 in Germany Total: 4.4 billion PUBLIC-HEALTH PARTNERSHIPS Icade Foncière Publique 0.2 billion TYPE OF ASSETS Outsourced assets of the State, local government bodies, private owners Buildings rented to public users: 30,000 m 2 at Levallois-Perret (rented to the Ministry of the Interior) SERVICES m6 (2% of total EBITDA) % % (in million) SYNERGY EBITDA: m262** 2005/2006 EBITDA change: % * Of which international activities (2005), Icade s parent company, Icade Foncier Développement and inter-market synergy (2005: 24.5 million : 3.5 million). ** Of which international activities (2005), Icade s parent company, Icade Foncier Développement and inter-market synergy (2005: 11.6 million : 9.7 million)

13 Presentation STRATEGY With the support of its main shareholder, Caisse des dépôts, Icade intends to strengthen its positions in each of its markets and has set its sights on becoming one of the leading property operators at European level. ICADE S STRATEGY INVOLVES: > enhancing its property assets, within the framework of a long-term investment (building, renovation and acquisition) and arbitration programme in order to maximise the value-creation potential of its assets; > securing access to new sites, together with Icade Foncier Développement, which is designed to acquire complex property assets in order to contribute to their enhancement; > offering a complete service based on top-level expertise throughout the value chain of the businesses in order to increase their development potential on the three markets, with each customer indeed being a potential user of all Icade s skills; > strengthening Icade s market positions, particularly by increasing the density of its territorial network in France and by targeted acquisitions, and developing the business in new growth markets such as urban regeneration and Public-Private Partnerships; > diversifying its geographic presence by expanding into Southern Europe, Germany and Eastern Europe, including by means of acquisitions; > setting up common processes in the functional field (IT, management control, cash-flow, communications, risk control), which generate savings; > rolling out a sustainable development approach to cover the whole business. The implementation of this strategy is based on the development of three types of synergy in Icade s business lines: > the development of commercial synergy through knowledge of the markets and competition-watch, by the enhancement of customer-relations and the company s many skills. This synergy facilitates the development of joint, complete and integrated offers, in particular in the context of setting up complex or town planning operations; > providing the whole company with the potential offered by Icade Foncier Développement in order to acquire control of property reserves destined to ensure future growth. This new structure uses the huge amount of expertise deployed throughout the company and, in particular, the skills in town planning, and the geographic network of Icade s different business lines; > the implementation of common processes in the operational fields (engineering, property valuation, rental management, safety...), which generate savings. A REALITY CHARACTERISED BY STRONG DEVELOPMENT When it was floated on the stock market, Icade announced an investment plan relating to 1.8 billion from 2006 to 2009, 850 million of which has already been identified. In 2006, Icade made 875 million of investments, including: > the international acquisition of a portfolio of offices for 315 million; > the acquisition by Icade Foncière des Pimonts of a building developed by Icade Tertial in Villejuif for 44 million; > the acquisition by Icade Foncière Publique of an office building located in Levallois-Perret for 186 million; > the purchase of the minority interests in Icade Emgp for 172 million and investments in the Millénaire 1 and Millénaire 2 buildings for 67 million; > the renovation of Icade Patrimoine s buildings for 52 million. In respect of arbitration, Icade plans to dispose of approximately 9,000 agreement-governed housing units from 2007 to From 2006 to 2009, and in view of the investments made during the 2006 financial year, Icade is confirming its turnover growth (on average, 8 to 10%) and margin (19% EBITDA margin) targets by 2009, which were announced when it was floated on the stock market. As a result of the foregoing, during the second half of 2007, Icade will announce a new investment plan for the 2008/2011 period. 1 - Opéra Villejuif (94) 15,250 m 2 of net floor space Icade Tertial: developer Icade Foncière des Pimonts: investor Architect: H. Godet , rue de Villiers Levallois-Perret (92) 30,000 m 2 of net floor space Acquisition and lay-out of high-rise complex composed of two buildings. Icade G3A: developer Icade Foncière Publique: investor French Ministry of the Interior: user 24 25

14 3 Institut de la vision Paris (75) 11,410 m 2 of net floor space Icade G3A: developer Icade Foncière Publique: investor with Caisse des dépôts/cnce Architects: J. Brunet-E. Saunier Laurence Méri Icade s three markets Gérard Toussaint 26 27

15 Icade s three markets A MARKET-BASED STRUCTURE Icade s operational organisation, which is tailored to its business model, is based around three markets. All Icade s business lines operate on each of these markets. In early 2006, Icade established an autonomous structure to serve its three markets, Icade Foncier Développement, which is designed to secure access to new sites and to acquire complex property assets in order to contribute to their enhancement. HOUSING COMMERCIAL PROPERTY PUBLIC-HEALTH PARTNERSHIPS DESIGN AND > Icade Capri > Icade Tertial > Icade G3A DEVELOP > Icade Pierre pour Tous (Development) 1 INVEST, > Icade Patrimoine > Icade Emgp > Icade Foncière Publique HOLD AND > Icade Foncière des Pimonts ARBITRATE > Icade Reit BV (Investment) OPERATE > Icade Administration > Icade Gestion Tertiaire > Icade G3A AND MANAGE de Biens > Icade Eurogem > Icade Setrhi-Sétaé (Services) > Icade Eurostudiomes > Icade Conseil > Fincas Anzizu > Icade Arcoba > Resa > Icade Italia > Icade Benelux > Inmobiliaria de la Caisse des Dépôts España > Imsi > Icade Newreal Les Jardins d Aragon Saint-Denis (93) 66 flats Icade Capri: developer Architects: Edith & Olivier Girard Promenade des Anglais Nice (06) 11,000 m 2 of net floor space for offices Icade Tertial Regions: co-developer Icade Eurogem: facility manager Architect: J.P. Cabane (Nice) Investor: Crédit Suisse Asset Management Users: Conseil Général, Edhec, Stryker, i-selection 3 - Hôpital Cognacq-Jay Paris 15 th arrondissement 16,000 m 2 of net floor space Icade G3A: agent Architect: Toyo Ito Project Owner: Fondation Cognacq-Jay Operation nominated for the Équerre d argent 2006 prize

16 Icade s three markets OUTSTANDING FEATURES AND OUTLOOK Key figures 4,465 reserved flats and plots HOUSING Icade builds, holds, rents and manages housing for private tenants, first-time buyers or investors. Development Icade Capri, which operates in 20 French agglomerations, builds and markets urban apartment buildings for first-time buyers or private rental investors. At the end of 2006, its order book represented 478 million, steady in regard to Icade Capri also carries on a housing-estate development business. Through Icade Pierre pour Tous, Icade produces housing for first-time buyers in urban-regeneration districts. Development Eight of Icade Capri s operations won pyramide d argent prizes, awarded by the Fédération des promoteurs-constructeurs, for aesthetics, quality of life, comfort or sustainable housing. The marketing of Terre de Seine, within the framework of the Rives de Seine co development programme in Boulogne-Billancourt (92), experienced immediate success. Icade Pierre pour Tous delivered the Les Florianes programme in Saint-Raphaël (120 flats for first-time buyers, average price 2,100/m 2 ). 44,000 Housing units held, 2.5 million m billion appraised value of assets held (+ 33% compared to ) Investment Icade Patrimoine is Icade s housing property company, specialising in intermediate rental accommodation in Île-de-France. With a physical occupancy rate of 98.3%, it is one of the top non-social housing lessors in France. It caters for middle class Île-de-France residents who cannot afford luxury flats, or are not entitled to subsidised housing. At the end of December 2006, the appraised value of its asset base was 1.9 billion (not including rights and expenses). Investment Icade Patrimoine, together with Icade Capri, has laid the ground-stone for the Les Jardins Ronsard residence in L Haÿ-les-Roses (94). This development is part of the planned construction of 1,000 housing units (approximately 500 of which are reserved for it) on its property reserves, so as to renew its stock of intermediate accommodation in the Paris region. 6,100 serviced flats (student halls of residence) 157,000 plots managed Services Icade Administration de Biens, a property manager, offers private individuals and institutional investors a range of services including management, co-ownership management, transaction and rental marketing services. Finally, Icade Eurostudiomes is renowned for its business developing and managing serviced-residences (mainly for students). 1 Services Icade Eurostudiomes delivered three new student halls of residence in Paris (13 th arrondissement), Montpellier and Nice, thus increasing its nation-wide stock of 303 accommodation units. 1 - Le Domaine d Opale Chelles (77) 146 flats Icade Capri: developer Architect: François de Alexandris 2 - Les allées Chateaubriand Chelles (77) 88 flats (tranche 1) 48 flats (tranche 2) Icade Capri: developer Architect: Cabinet BIK

17 Icade s three markets STRATEGY Icade s strategy in the housing market involves: > developing its geographic presence in housing development in growing agglomerations and increasing the density of its coverage in France in order to increase its market share and secure its access to land; > continuing the development of additional products in four fields: housing estate business, town centre renovation / regeneration market, serviced-residences for all publics, individual houses in housing estates; > making development the core synergy by facilitating the obtaining of management mandates for accommodation services and property development projects; > developing affordable housing, both for new property through Icade Pierre pour Tous and older property. Icade Patrimoine facilitates the acquisition of housing by their occupants by providing incentives for residential considerations (re-purchase and value guarantee); > enhancing Icade Patrimoine s asset portfolio in conjunction with local elected representatives by the implementation of a multi-annual asset plan. A plan for re-allocating assets to social housing bodies and an acquisition and construction programme should contribute to completing Icade Patrimoine s reorientation towards the intermediate rental accommodation segment. With around 580 hectares of land, Icade also has major potential for future development Villa Clara Le Plessis-Trevise (94) 56 flats and 11 houses Icade Capri: developer Architect: ATTB Guy Malot Architecte Le Patio Gerland Lyon (69) 42 accommodation units Icade Capri: developer Architects: Module Architectes/Mrs Berberian Richard Remigereau 3 - Les Vignes de la Cité Carcassonne (11) 77 flats and houses Icade Capri: developer Architect: Jean-Benoît Roux

18 Icade s three markets Key figures 336,000 m 2 in the order book (offices and shopping centres) 538,000 m 2 of commercial property held Appraised value of assets held: 1.9 billion (+28 % on a like-for-like basis compared to ) COMMERCIAL PROPERTY In the commercial property market, Icade develops, holds, invests and offers a full range of services. Development Under the corporate name, Icade Tertial, Icade develops offices, and shopping and leisure centres in the Paris region. Since the end of 2006, Icade has had a new autonomous structure, Icade Tertial Régions, which is specialised in commercial property development in regional France. The core of the customers being targeted by Icade Tertial and Icade Tertial Régions are user-companies and major national and international investors. At the end of 2006, Icade Tertial s order book represented 114,000 m 2 of ongoing operations and 222,000 m 2 of operations in the process of being set-up. Investment Icade Emgp, a listed company, is the precursor in France of business parks. Its 76.5 hectares of land and 453,820 m 2 of surface area represent an exceptional site, located between Paris, the Paris ring-road, the A1 motorway and Plaine Saint-Denis, with direct access to Charles-de-Gaulle airport and the Paris-Nord TGV station. Its asset base is comprised of offices, business premises, audiovisual production studios, warehouses and land. Its tenant companies represent a wide range of business sectors such as audiovisual, fashion, distribution and leisure. The appraised value of Icade Emgp was m1,230 (not including rights) at 31 December Icade Foncière des Pimonts, another listed company, holds medium to large-sized office blocks and is moving into the acquisition of commercial property assets. Icade Foncière des Pimonts operates an office block portfolio located in the Central Business District in Paris, La Défense, Boulogne-Billancourt and Issy-les-Moulineaux. At 31 December 2006, Icade Foncière des Pimonts held total assets of 155,363 m 2 (of which the Group s share was 84,886 m 2 ). The appraised value of Icade Foncière des Pimonts was m707 (not including rights) at 31 December Services Icade handles the rental and operational management of commercial property for third parties and on its own behalf (property and facilities management or PFM), under the corporate names Icade Gestion Tertiaire and Icade Eurogem, project engineering under the corporate name Icade Arcoba, and property consultancy under the corporate name Icade Conseil. This wide range of services allows the company to meet all its customers requirements within the framework of setting-up, developing, managing and optimising their property projects. 1 - Opéra Villejuif (94) 15,250 m 2 of net floor space Icade Foncière des Pimonts: investor Icade Tertial: developer Architect: H. Godet 2 - Le Millénaire 1 - Parc du Millénaire Paris 19 th arrondissement 30,000 m 2 of net floor space Icade Emgp: investor Icade Tertial: assistant to the project owner Architect: Arte Charpentier Building NF bâtiments tertiaires-démarche HQE certified Future headquarters of Icade OUTSTANDING FEATURES Development Icade Tertial, specialised in the development of offices, and shopping and leisure centres, delivered Orange s new headquarters in Arcueil (94). Les Portes d Arcueil, the largest property development in Val-de-Marne, houses over 3,000 Orange staff in 45,000 m 2. The tertiary development of the inner Paris suburbs is witnessing the launch by Icade Tertial of new large-scale programmes in Montrouge (13,180 m 2 ) and Villejuif (15,250 m 2 ). During the summer, in Montpellier, Icade Tertial began the construction of the Odysseum (50,000 m 2 ), a new generation shopping centre. Investment In 2006, the Millénaire 1 building (30,000 m 2 ), on Icade Emgp s site, was delivered and will house Icade s new headquarters, in addition to other companies, as from June Building work on Millénaire 2 (28,800 m 2 ) has commenced for scheduled delivery in June Icade Foncière des Pimonts sold three buildings with total surface area of 34,300 m 2. The company acquired 50% of the Atrium building in Boulogne- Billancourt (20,000 m 2 ) and an office building developed in off-plan sales by Icade Tertial in Villejuif (15,250 m 2 ). Services Since 1 January 2006, Icade has combined, under the corporate name Icade Gestion Tertiaire, its commercial property management businesses (essentially offices), which were carried-on by Icade Administration de Biens in the past

19 Icade s three markets STRATEGY Icade s strategy in the commercial property market involves: > increasing development in the shopping centre sector and in the development of complex operations (programmes combining offices, businesses, housing, conference centres, cinemas...); > consolidating its positions in Île-de-France and increasing its presence in the major regional cities; > enhancing the unique geographic set-up of Icade Emgp by gradually converting the site from a warehouse area into a company and business park and improving both the architecture and environment of the site; > making Icade Foncière des Pimonts the preferred vehicle for commercial and tertiary asset outsourcing projects; > becoming the leading player in property and facilities management in France and increasing its profitability by refocusing on higher added value activities: property management, gateways and networks, security and safety; > consolidating the positioning of its consultancy businesses in their upstream and downstream synergy-federating role Odysseum Montpellier (34) 50,000 m 2 of net floor space Icade Tertial: developer and marketer of the shopping centre Architects: Design International - DGLA Cap Sud Montrouge (92) 13,180 m 2 of net floor space Icade Tertial: co-developer Architect: J. Haour 3 - Les portes d Arcueil Arcueil (94) 44,600 m 2 of net floor space Icade Tertial: developer Icade Arcoba: technical studies Architect: François Leclercq Investor: UBS User: Orange Operation nominated for the Équerre d argent 2006 prize

20 Icade s three markets OUTSTANDING FEATURES Key figures 312,000 m 2 in the order book 30,000 m 2 of offices held m123 in the order book PUBLIC-HEALTH PARTNERSHIPS Icade operates in the public and health customers markets via its three business lines. Development With 13 public-private partnerships established over two years, Icade is imposing itself as one of the leaders in this emerging market. Moreover, as the leading operator in France in the field of health-related property with Icade G3A, it is also involved in the major public amenities sectors (universities, grammar schools, secondary schools), cultural, sport and leisure facilities or administrative offices. At the end of 2006, Icade G3A had an order book representing 148,000 m 2 of ongoing operations and 164,000 m 2 of operations in the process of being set-up. Investment Since January 2006, Icade has combined its current and future public-use property within a property company, Icade Foncière Publique, which is designed to host the outsourced assets of the State, local government bodies or private owners, and to hold property rented to public users (ministries, local government bodies, hospitals, clinics, retirement homes), either on a freehold basis, or through investments in companies holding public-private partnership contracts. Services Icade G3A provides public amenities on behalf of public authorities, or private amenities within the framework of mandates or project-owner support contracts. Icade Setrhi-Sétaé is the market leader in general project management and health equipment engineering in France. Its skills extend to all sectors: hospitals, clinics, retirement and old people s homes, laboratories, balneotherapy and thalassotherapy facilities. 1 Development In 2006, Icade G3A established 5 new publicprivate partnerships, thus bringing the number of contracts executed by Icade over the last two years to 13. Amongst the new public-private partnerships established, the development of the diplomatic activity property centre of the French Ministry for Foreign Affairs (27,233 m 2 of net floor space amount of the investment m50) and the reconstruction of a psychiatric unit for the Hôpital Laborit in Poitiers (2,923 m 2 of net floor space amount of the investment: m5), should be mentioned. Investment In 2006, Icade Foncière Publique made its first major investment by acquiring an office building worth m186 in Levallois-Perret (92), which is rented-out to the French Ministry of the Interior (30,000 m 2 ). Services Icade G3A was chosen for a project-owner support assignment for the extension of the Bastia hospital centre. Moreover, the Institut d Optique Graduate School (12,200 m 2 of net floor space) on the campus of the École Polytechnique in Palaiseau was delivered in December 2006, 23 months after the launch of the studies. 1 - Lycée Galilée Gennevilliers (92) 22,000 m 2 of net floor space Icade G3A: agent Architect: J.P. Lott Project Owner: Region Île-de-France 2 - Hôtel de Police Meaux (77) 8,540 m 2 of net floor space Icade G3A: developer Icade Foncière Publique: investor Architect: M. Larivière

21 Icade s three markets STRATEGY Icade s strategy in the public-health partnerships involves: > establishing itself as one of the leading companies in public-private sector partnerships in France, expanding all forms of the public amenities development and multi-programme residential complex business; > developing its role as an investor in property destined for the public sector in order to enable its customers to have a global offer of products and services; > strengthening its position as a leading company in services for the health sector (studies, engineering, project ownership) and, more generally, for major public amenities New diplomatic activity center French Ministry for Foreign Affairs La Courneuve (93) 27,233 m 2 of net floor space Icade G3A: developer Icade Foncière Publique: investor with Caisse des dépôts/crédit foncier Architect: H. Gaudin Engineering firm: OTH The Région s headquarters Nord-Pas-de-Calais Lille (59) 51,000 m 2 of net floor space Icade G3A: agent Architect: Delemazure - Neveux - Trace - Wilmotte Project Owner: Region Nord-Pas-de-Calais Marc Le Blanc 3 - Polyclinique de Navarre Pau (64) 16,500 m 2 of net floor space Combining 4 clinics: 180 beds and places Icade Setrhi-Sétaé: project manager Architect: H. Alozie

22 Icade s three markets Key figures INTERNATIONAL Icade provides services to its customers, key international accounts, investors or users in several European countries. During 2006, Icade confirmed its international development by acquiring a property portfolio from DaimlerChrysler, composed of office buildings and property reserves for development. 150,000 m 2 of commercial buildings held 79 ha of property reserves m372 appraised value (+ 18% compared to ) Located in Germany, this portfolio is made-up of three types of assets held by a company created ad hoc, Icade Reit: > a class-a building of 59,000 m 2, located in Munich-Allach, alongside the East-West motorway axis, in a dynamic commercial business zone, which is 89%-occupied by first-rate tenants (TSystem - Deutsche Telekom Group, MTU, Atena); > office and business property currently subject to revaluation, located in Hamburg, Frankfurt, Berlin and Stuttgart with total surface area of 90,000 m 2, 67%-occupied; > property reserves, over a total of 79 hectares in Munich, Düsseldorf, Berlin and Bad Homburg. OUTSTANDING FEATURES Germany Since the acquisition of the DaimlerChrysler property portfolio in Germany, Icade has been able to improve the physical occupancy rate of its buildings to 76% owing to having rented-out an additional 14,000 m ,400 housing units managed (Fincas Anzizu) 21 university halls of residence 5,200 beds managed (Resa) For several years, Icade has been operating in Spain, Italy and Belgium, in property, housing and commercial property service activities. In Spain, Icade manages university halls of residence (Resa), housing property (Fincas Anzizu), carries on a property and facilities management business (Imsi), and a development or co-development business in the commercial property and university halls of residence market. Finally, under the corporate name Inmobiliaria de la Caisse des dépôts España, Icade ensures the commercial development of its Spanish subsidiaries. In Italy, Icade Italia and Icade Newreal offer their property expertise as regards property and facilities management, whilst shifting towards audit and property transaction activities. In Belgium, Icade Benelux carries out facilities management and property-project steering assignments for institutional investors such as the European Commission or the European Parliament. Spain During 2006, a new student hall of residence opened: Residencia Giner de Los Rios in Alcala de Henares. 1 and 3 - Munich Allach Germany 59,000 m 2 of offices Icade: investor Users: TSystem-MTU-Atena 2 - Student hall of residence Giner de Los Rios Alcala de Henares Spain 330 places Icade: manager

23 Icade s three markets STRATEGY As a result of its strong position on its domestic market, Icade is considering European development which, with an eye to profitability, should favour investment-security. Consequently, Icade does not intend to launch development operations outside France with the exception of those which are launched with a firm promise of acquisitions or minority interests in operations conducted with a local partner. Icade will continue to actively search for growth opportunities in Southern Europe (Italy, Spain), in Germany, and in Eastern Europe, which favour recurrence and the profitability of its investments. Therefore, Icade s European strategy involves: > seeking out portfolios of residential and commercial (offices and shopping centres) property assets, the value of which can be enhanced by a contribution from its various areas of expertise; > developing new business park projects by reproducing the Icade Emgp model, by acquiring one or two sites in a major European city, located on an airport / city centre axis, or in an urban development zone offering good potential; > developing and duplicating its know-how as regards student halls of residence Student hall of residence Manuel Agud Querol San Sebastian Spain 300 places Icade: manager Anne Coupé-Saladin 2 - Goldsteinstrasse Frankfurt Germany 9,430 m 2 Business park Icade: investor 3 - Kochstrasse Berlin Germany 11,577 m 2 of offices Icade: investor

24 4 Lycée Galilée Gennevilliers (92) 22,000 m 2 of net floor space Icade G3A: agent Architect: J.P. Lott Project Owner: Region Île-de-France Renaud Glasson Sustainable development 46 47

25 Sustainable development ICADE, A SUSTAINABLE DEVELOPMENT PLAYER Icade takes care to favour development which is ecologically tolerable, in particular so as to limit any negative impact of its business activities on the environment. Over-and-above simple compliance with legal standards, Icade has taken account of environmental considerations and is particularly attentive to respect for the environment as regards development, in its property company business line, and also in the service business lines. As a developer, in 2003, Icade introduced an environmental charter in the housing market. This charter was based on the principles established by the Association Haute Qualité Environnementale (HQE ) (High Environmental Quality Association). Its principles are as follows: > consideration of the features of the site and integration of structures into its environment which favour green areas; > control of the environmental impact during the construction phase. In particular, Icade aims to reduce nuisance caused by building sites (installation of piles without drilling noise) and to ensure the sorting, management and removal of waste generated during the construction of a property programme to the appropriate dumps; > optimisation of occupants water and energy consumption; > raising public awareness and providing information on the initiatives implemented. 1 Séverine Unimon 1 - Goldsteinstrasse Frankfurt Germany Business park 9,430 m 2 Icade: investor 2 - Les Chemins du Halage Mantes-la-Jolie (78) 35 flats Icade Capri: developer Architect: R. Reveau Zac Thiers Lyon Part-Dieu (69) 15,400 m 2 of net floor space Icade Tertial Régions: developer Architects: J. Brunet - E. Saunier Investor: Generali Assurances

26 Sustainable development ENVIRONMENTAL QUALITY A PRIORITY IN ICADE S STRATEGY After years as a natural wasteland, and the spontaneous development or the return of species which had disappeared from the Parc du Millénaire, as part of its sustainable development and environmental protection policy, Icade Emgp sold a hectare of land to the Ville de Paris and to the Semavip, along the canal Saint-Denis, for the creation of the first Parisian ecological reserve in which an eco-system will be established with part being aquatic and part a dry zone allowing an environment rich in flora, fauna and birdlife, and unique in Paris, to be re-established. Icade s initiatives in favour of environmental protection were rewarded in Within the framework of the nationwide competition, Les Pyramides d or, organised by the Fédération des Promoteurs-Constructeurs, Icade Capri was a prize-winner in 2006 in respect of the following programmes: > Pyramide d argent in the Price of comfort and quality of natural life category for the Les Jardins d Harmony programme in Montpellier (architects: Bellecour et Barberot); > Pyramide d argent in the Prix Vivrelec category for the Patio de l Argonne programme in Bordeaux (architect: A. Loisier); > Pyramide d argent in the Property aesthetics prize category for the Le Mélèzium programme in Lille (architects: J.L. Leclercq, X. Bouffart, Atelier Quatr A Architecture); > Pyramide d argent in the Prix Vivrelec category and in the Price of sustainable housing category for the Fontaine d Emeraude programme in Cormeilles-en-Parisis (architects: I. Beguin, F. Genin, D. Nahoum); > Pyramide d argent in the Price of comfort and quality of natural life category for the Val Sully programme in Mantes-La-Jolie (architects: R. and T. Reveau). Icade s initiatives also relate to the fight against global warming. To this end, Icade Patrimoine is introducing contracts for the operation of communal boiler rooms in which the operator is involved in controlling energy consumption, so as to limit waste. Icade Patrimoine also intends to connect heating facilities to renewable energy networks such as, for example, on the Villejuif site for over 1,000 flats. Finally, the first carbon review of Caisse des dépôts was established by Icade Eurogem to measure the greenhouse gas emissions during the building s life cycle. 1 - Bâtiment 270 Aubervilliers (93) 9,400 m 2 of net floor space Icade Emgp: investor Icade Tertial: assistant to the Project Owner Architects: Brenac & Gonzalez This building has obtained HQE certification amongst the first five certification in France NF bâtiments tertiaires, Démarche HQE. 2 - Patio de l Argonne Bordeaux (33) 16 flats Icade Capri: developer Architect: A. Loisier

27 5 David Nicolas Cécile Paty Nicolas Sebti Human resources 52 53

28 Human resources ICADE S EMPLOYEES ICADE STAFFING LEVELS At 31 December 2006, Icade s total staffing level (excluding international) was 3,376 employees, compared to 3,366 at 31 December At 31 December 2006, Icade also had 268 international employees. In 2006, as regards hiring, there were 396 new opened-ended contracts and 406 fixed-term contracts. The total number of staff leaving Icade and its Business Units amounted to 413 people under open-ended contracts and 324 people whose fixed-term contract came to an end. Staff turnover for the 2006 financial year was 10.46%. BREAKDOWN BY MARKET % % CAREER DEVELOPMENT/ RECRUITMENT INTERNAL PROMOTION Internal promotion is one of the key factors of Icade s human resources policy; prior to any external hiring, an internal search is conducted to verify whether any current staff have the necessary profile. For the 2006 financial year, the mobility rate was 32%. ONGOING TRAINING Icade also focuses on the training of its staff. Thus, during 2006, 5,000 participants were involved in training sessions, i.e days training for each employee, for an investment of 2.07% of the payroll (not including salaries). Since the end of 2006, the École Icade, created in partnership with the École Nationale des Ponts et Chaussées, has been offering certain of its employees a high-level course. For 2007, the training-orientation within Icade highlights the strategic approaches of each market and the support departments by specifically favouring complementariness between the different business lines % 28.26% Housing market Commercial property market Public-health partnership market Holding (not including international) Vincent Rigolet 54 55

29 6 Musée Rodin Paris 7 th arrondissement Renovation of the Chapel 3,700 m 2 of net floor space Icade G3A: agent Architect: Agence Faloci Organisation chart Diane Bartoli 56 57

30 SIMPLIFIED ORGANISATION CHART AS AT ICADE SA HOUSING MARKET COMMERCIAL PRO PERTY MARKET PUBLIC-HEALTH PARTNERSHIP MARKET Icade Capri 100% Icade Capri SASU 51% Groupe Promo Midi SA 51% Icade Ellul SA Icade Administration de Biens 100% Icade Administration de Biens SASU 100% GFF Institutionnels SASU 100% Icade Eurostudiomes SASU 100% Cabinet Villa SASU Icade Emgp 83% Icade Emgp SA Icade Foncière des Pimonts 95% Icade Foncière des Pimonts SA Icade España 100% Inmobiliaria de la Caisse des dépôts España SAU Icade Eurogem 100% Icade Eurogem SASU Icade Gestion Tertiaire 100% Icade Gestion Tertiaire SASU Icade Conseil 100% Icade Conseil SASU Icade Arcoba 100% Icade Arcoba SASU Icade G3A 100% Icade G3A SASU 100% Icade Setrhi-Sétaé SASU 100% Icade Tertial SASU Icade Foncière Publique 100% Icade Foncière Publique SASU Icade Patrimoine 100% Icade Patrimoine SA 100% Foncière Commerce IDF SAS Icade Reit BV 100% Icade Reit BV Icade Italia 100% Icade Italia SpA Icade Tertial Régions 100% Icade Tertial Régions SASU Icade Benelux 100% Icade Benelux SRL 58 59

31 7 Headquarters of the Region Nord-Pas-de-Calais Lille (59) 51,000 m 2 of net floor space Icade G3A: agent Architects: Delemazure - Neveux - Trace - Wilmotte Project Owner: Region Nord-Pas-de-Calais Olivier Grall Annual accounts at 31 st December

32 Consolidated financial statements at 31 st December 2006 Le Clos Lamartine Le Coudray-Montceaux (91) 2 buildings (17 and 22 flats) and 22 houses Icade Capri: developer Architect: Cabinet d architecture 2AB CONSOLIDATED BALANCE SHEET...64 CONSOLIDATED INCOME STATEMENT...66 CONSOLIDATED CASH FLOW STATEMENT...67 CONSOLIDATED STATEMENT OF VARIATIONS IN SHAREHOLDERS EQUITY...68 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Accounting principles Changes in the consolidation Elements of gross operating profit Profit/loss from disposals Financial profit/loss Taxes Goodwill Intangible assets Tangible assets and investment properties Securities available for sale Other non-current financial assets Stocks and WIP Trade debtors Building contracts and off-plan sales Miscellaneous receivables Other current financial assets Cash and cash equivalents Investment properties held for sale Shareholders equity Minority interests Provisions Financial debts Trade creditors Miscellaneous debts Derivatives Financial risk management Earnings per share Commitments to staff Staff Description of current stock-option plans Off-balance sheet commitments Affiliated parties Sector report Events subsequent to the cut-off date Interests in joint ventures Securities valued by the equity method Scope of consolidation List of unapplied standards and interpretations

33 CONSOLIDATED BALANCE STATEMENT Assets (in million) Notes 31 Dec Dec Net consolidated goodwill Net intangible assets Net tangible assets Net investment properties 9 1, ,750.8 Non-current securities available for sale Securities consolidated by the equity method 36 (0.3) - Other non-current financial assets Deferred tax assets TOTAL NON-CURRENT ASSETS 2, ,103.1 Stocks and goods in process Trade debtors Amounts due by customers (building contracts and off-plan sales) Tax receivable Miscellaneous receivables Current securities available for sale Other current financial assets Cash and cash equivalents TOTAL CURRENT ASSETS 2, ,347.2 Assets held for disposal TOTAL ASSETS 4, ,452.0 Liabilities (in million) Notes 31 Dec Dec Capital Premiums Own shares (0.7) - Revaluation reserves (1.2) (8.8) Other reserves Net profit/loss, Group share Capital and reserves-group share 19 1, Minority interests CAPITAL AND RESERVES 1, ,161.1 Non-current provisions Non-current financial accounts payable Tax payable Deferred tax liabilities Miscellaneous non-current payables Other non-current financial liabilities TOTAL NON-CURRENT LIABILITIES 1, ,097.7 Current provisions Current financial accounts payable Tax payable Trade creditors Amount due to customers (building contracts and off-plan sales) Miscellaneous current payables Other current financial liabilities TOTAL CURRENT LIABILITIES 1, ,193.2 TOTAL LIABILITIES 4, ,

34 CONSOLIDATED INCOME STATEMENT (in million) Notes 31 Dec Dec Earnings 3.1 1, ,179.2 Other operating income Financial operating income Income from operating activities 1, ,196.0 Purchases used Outside services Tax, duty and similar payments Personnel charges, profit sharing and share incentive scheme Other business related charges Charges on operating activities 1, GROSS OPERATING PROFIT Amortisation charges net of investment grants (81.4) (74.8) Charges and reversals related to impairment of tangible, financial and other current assets 13.6 (2.5) Profit/loss disposals Impairment of consolidated goodwill and intangible assets - (4.1) OPERATING PROFIT/LOSS Gross cost of indebtedness (33.9) (30.3) Cash and cash equivalents Net cost of indebtedness (26.5) (27.3) Other financial income and charges FINANCIAL PROFIT/LOSS 5 (16.8) (21.2) Share in profit/loss of companies consolidated by the equity method 36 (0.3) - Profit tax 6 (76.9) (67.4) Profit/loss from discontinued activities NET PROFIT/LOSS Net profit/loss : minorities share Net profit/loss: Group share Group share of net earnings per share (in Euros) Of which, Group share of net earnings per share of discontinued activities Number of shares used in the calculation 85,601,854 33,560,000 Group share of net earnings per share after dilution (in Euros) Of which, Group share of net earnings per share of discontinued activities Number of shares used in the calculation 85,605,698 33,560,000 CONSOLIDATED CASH FLOW STATEMENT (in million) 31 Dec Dec I - OPERATING ACTIVITIES Net overall profit Net appropriations to amortisation and provisions Latent gains or losses due to variations in fair value - (0.4) Other calculated income and charges Capital gains or losses on disposal of assets (137.7) (22.6) Dilution capital gains or losses 2.4 (18.8) Quota share of profit/loss of companies consolidated by the equity method - - Dividends received (4.1) (3.4) Cash flow from operating activities after cost of net financial debt and tax Cost of net financial debt Tax liability Cash flow from operating activities before cost of net financial debt and tax Interest paid (25.3) (27.0) Tax paid (45.6) (77.7) Variation in working capital requirement related to operating activities (1) (63.2) (59.9) NET CASH FLOW GENERATED BY OPERATING ACTIVITIES II - INVESTMENT ACTIVITIES Tangible and intangible assets and investment properties - acquisitions (171.4) (148.7) - disposals Investment grants received Variation in deposits paid and received Variation in customer financial accounts receivable (187.4) - Operational investments (304.2) (67.0) Securities available for sale - acquisitions (38.8) (28.6) - disposals Consolidated securities - acquisitions (507.4) (207.5) - disposals impact of changes in the consolidation (1.8) (18.3) Dividends received Financial investments (392.4) (182.9) NET CASH FLOW FROM OPERTING ACTIVITIES (696.6) (249.9) III - FINANCING ACTIVITIES Sums received from shareholders on increases in capital: - paid by Icade shareholders paid by minority shareholders of consolidated subsidiaries (0.8) 0.1 Dividends paid during the year: - dividends (including deduction at source) and interims paid in the year by Icade (185.3) (20.1) - dividends and interims paid in the year to minority shareholders of consolidated subsids (10.2) (9.5) Variation in cash flow from capital transactions (29.5) Issues or subscriptions of borrowing and financial debts Repayment of borrowings and financial debts (144.1) (118.2) Acquisitions and disposals of current financial assets Variation in cash flow from financing activities NET CASH FLOW FROM FINANCING ACTIVITIES NET VARIATION IN CASH POSITION (I+II+III) (147.8) NET CASH POSITION AT START OF YEAR NET CASH POSITION AT END OF YEAR Operations not affecting variations in cash position: - investments in leasing Cash and cash equivalents Bank overdrafts (290.1) (109.0) NET CASH POSITION (1) Excluding customer financial accounts receivable. 67

35 STATEMENT OF VARIATIONS IN SHAREHOLDERS EQUITY Cash flow Total capital hedging Securities and reserves Total net of available Other Group Minority capital and (in million) Capital Corp. Tax for sale reserves share interests reserves As at 31 st December (9.4) ,161.1 Cash flow hedging instruments: - variations in value directly recognised under capital and reserves transfert to profit/loss of non-qualified hedging instruments as at 1 st January Fair value of securities available for sale - - Variation in fair value - - (1.9) - (1.9) - (1.9) - Transfer to profit/loss for the period - - (0.7) - (0.7) - (0.7) Total variations directly recognised in reserve accounts (1) (2.6) Net profit/loss (2) Total income and charges accounted for (1) + (2) (2.6) Dividends for (185.3) (185.3) (8.8) (194.1) Variation in percentage interest - (9.1) (9.1) Increase of capital BRS (110.8) (110.8) (16.7) (127.5) Others As at 31 st December (2.0) , ,786.2 Cash flow Total capital hedging Securities and reserves Total net of available Other Group Minority capital and (in million) Capital Corp. Tax for sale reserves share interests reserves As at 31 st December 2005 after first application of IAS 32 and (11.8) ,227.9 Cash flow hedging instruments: - variations in value directly recognised under capital and reserves transfer to profit/loss of non-qualified hedging instruments as at 1 st January Fair value of securities available for sale Total variations directly recognised in reserve accounts (1) Net profit/loss (2) Total income and charges accounted for (1) + (2) Dividends for (20.1) (20.1) (9.5) (29.6) Variation in percentage interest (115.7) (115.5) Others (1.1) (1.1) (0.6) (1.7) As at 31 st December (9.4) ,

36 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. ACCOUNTING PRINCIPLES 1.1 Standards applied The consolidated accounts of the Icade Group ( the Group ) are produced as at 31 st December 2006 in accordance with International Accounting Standards (IFRS) as adopted by the European Union pursuant to European Regulation N o 1606/2002 of 19 th July They were drawn up by the Board of Directors meeting of Icade SA of 21 st February The last consolidated annual accounts published by the Group as at 31 st December 2005 were drawn up in accordance with the same principles and methods. The International Accounting Standards are published by the IASB (International Accounting Standards Board) and adopted by the European Union. They comprise IFRS (International Financial Reporting Standards) and IAS (International Accounting Standards) as well as their compulsory application interpretations on the closing date. Where applicable, the options used are indicated in the following sections. IAS 39 amendments on financial instruments: accounting and valuation (fair value and intra-group foreign currency transaction hedging option), compulsorily applicable from 1 st January 2006, have been applied but have had no impact. Furthermore, IFRS 6 Prospecting and valuation of mineral resources and IFRIC 5 Charges on interest emanating from management funds dedicated to the dismantling, reconditioning and rehabilitation of the environment do not have to be applied as at 1 st January IFRIC 4 To determine whether an agreement contains a lease contract, compulsorily applicable from 1 st January 2006, has no impact on the 2006 consolidated financial statements. IFRIC 7 Application of the restatement approach within the framework of IAS 29 Financial Information in hyperinflationary economies, IFRIC 8 Area of application of IFRS 2, IFRIC 9 Revaluation of embedded derivatives have been applied in advance but have had no impact. IFRS 7 Financial Instruments: information to be supplied and amendment IAS 1 Presentation of financial statements on the notes to the accounts will be applied by 1 st January 2007 at the latest (cf. exhaustive list in note 38). 1.2 Bases of assessment, judgements and use of estimates The financial statements have been prepared under the historical cost convention, with the exception of certain financial instruments which are accounted for under the fair value convention. The preparation of the financial statements necessitates the use of estimates and assumptions to determine the value of assets and liabilities, assess any positive or negative unanticipated unknowns on the closing date and income and charges for the year. The significant estimates made by the Group in producing the financial statements primarily relate to assessing the result of the progress of building contracts, off-plan sales and certain service contracts as indicated in note 1.4, the recoverable value of tangible and intangible assets and investment properties as indicated in note 1.11, and the assessment of provisions and personnel benefits as indicated in notes 1.21, 1.22, 21 and 28. Due to the uncertainties inherent in any assessment process, the Group reviews its estimates on the basis of regularly updated information. It is possible that the future results of the activities concerned may differ from those estimates. In addition to using estimates, the Group s management makes judgements to define the appropriate accounting treatment for certain activities and transactions where current IFRS interpretations do not specifically deal with the accounting problems concerned. In particular, management has exercised its judgement in classifying leases (ordinary lease and direct financing lease) and in determining the accounting treatment of certain activities for which IFRS do not provide any specific details (accounting for the acquisition of minority interests and bonds redeemable in shares issued by the Group). 1.3 Consolidation methods The consolidation methods used by the Group are full consolidation, proportional consolidation and consolidation by the equity method: > Subsidiaries (companies in which the Group has the power to direct financial and operational policies in order to secure economic benefits) are fully consolidated. > Companies in which the Group exercises joint control are proportionally consolidated. > Consolidation by the equity method is applied to associate companies in which the Group exercises a significant influence, which is presumed when the Group holds 20% or more of the voting rights. According to this method, the Group records the share in profit of companies consolidated by the equity method on a specific line of the consolidated income statement. All internal transactions and positions are eliminated in the consolidation, totally in respect of fully consolidated companies and up to the Group s percentage interest in respect of proportionally consolidated companies or those consolidated by the equity method. A list of the fully and proportionally consolidated companies and companies consolidated by the equity method is set out in note 37 Companies in the consolidation. 1.4 Earnings, other operating income, financial operating income Earnings The Group s earnings comprise four types of income: rental income, including financial rent building contracts and off-plan sales sale of goods provision of services Rental income, including financial rent Rental income includes rent from housing, office blocks, warehouses and business premises. Rental income is recorded by the straight line method over the firm terms of the leases. Consequently, any particular provisions or benefits specified in the leases (exemptions, payment holidays, key money) are spread over the firm term of the lease, without taking indexation into account. The reference period used is the first firm term of the lease. Tenants charges reinvoiced to tenants are deducted from the corresponding charges accounts and excluded from earnings. Income from finance leases include financial rent from property assets leased within the framework of operations conducted with public partners. Financial rent is accounted for on the basis of a formula translating a constant periodic rate of return on the lessor s net investment in the finance lease contract

37 Notes to the consolidated financial statements Building contracts and off-plan sales Earnings are recognised in line with progress. Earnings accounted for during the year correspond to the estimated final forecast earnings for the operation recorded pro rata to the progress of works, accrued at the end of the year, less any earnings accounted for in previous years in respect of operations already in the construction phase at the beginning of the year. Recognition of earnings in line with progress relates only to plots sold and commences on signature of the notarised deed. Sales of goods Sales of goods relate essentially to property agent transactions. Provision of services Surveys and assistance to clients: earnings are accounted for in line with the progress of the services; Services and technical functions (management, building maintenance, general services...): earnings are accounted for in line with the progress of the services; Property administration (management, managing agent ): commission and fees are recorded as income when the service is provided. Reinvoiced tenants charges and expenses incurred on behalf of third parties are deducted from the corresponding charges if the Group does not bear any risk in respect of those services. Other operating income Other operating income includes income of a non-recurrent nature or not directly related to the operations described in the paragraph entitled Earnings. Financial operating income Financial operating income includes financial income earned on funds received in respect of mandate operations and other financial income related to operating activities. 1.5 Earnings per share The non-diluted earnings per share (basic earnings per share) are the Group share of net earnings for the year attributable to the ordinary shares compared to the average weighted number of shares in circulation during the year. The average number of shares in circulation during the year is the number of ordinary shares in circulation at the beginning of the year, adjusted by the number of ordinary shares bought back or issued during the year. In calculating the diluted earnings per share, the average number of shares in circulation is adjusted to take into account the diluting effect of equity instruments issued by the company likely to increase the number of shares in circulation. 1.6 Sector report The sector report, as presented, matches the organisation of internal reporting by the management of Icade. In 2004, Icade adopted a position as property developer and structures its offer, organisation and management according to the nature and needs of its customers. The business is segmented into three major markets: > the housing market, aimed at private individuals, > the commercial property market, aimed at a corporate and investor clientele, > the public and health market, aimed at a local authority, public service and administration clientele. Within each market, performance is analysed by business, each of which has its own risks and benefits. Three types of business are thus identified and pursued: > property development (essentially the building of property for sale) present in all three markets; > property company business (holding property for rental purposes and arbitraging those assets), carried out in 2005 and 2006 in the housing and commercial property markets (offices and warehouses) as well as in the public-health market in 2006; > services, present in all three markets: in the housing market, services relate to property administration (management, managing agent, property dealing and marketing rental property); in the commercial property market, Icade operates a property facilities management activity (management and maintenance of buildings and their facilities, general services) engineering for property projects and construction economics, property consultancy (strategic advice, outsourcing of assets and financing of assets); in the public and health market, Icade provides assistance to public, local authority and administration clients and health property engineering. The primary sector report is therefore organised on a market and business basis. Operations carried out between businesses in one and the same market and between businesses in different markets are presented in the sector report in the same way as operations carried out with third parties. Eliminations and reclassifications relating to those operations appear under separate columns. Furthermore, a secondary sector report is provided by geographic sector: France and the rest of Europe, in view of the Group s up to now limited presence outside France (the rest of Europe encompasses Spain, Italy, Germany and Benelux). 1.7 Consolidated goodwill According to IFRS 3, all business combinations must be accounted for using the acquisition method. Only business combinations involving entities under joint control, excluded from the area of application of IFRS 3, are accounted for at cost. According to the acquisition method, the acquirer must, on the date of acquisition, account for the identifiable assets, liabilities and potential liabilities of the acquired entity (with the exception of noncurrent assets held for sale) at their fair value on that date. Any residual discrepancy between the acquisition cost of the securities and the Group s percentage interest in the fair value of the identifiable assets and liabilities on the date of acquisition constitutes consolidated goodwill. On that date, it is recorded under the acquirer s assets if positive and accounted for immediately in the income statement if negative. When buying out minority interests of companies already controlled by the Group, the whole of the difference between the acquisition price and percentage interest acquired in the fair value of the identifiable assets and liabilities on the acquisition date is posted to consolidated goodwill. The acquirer has 12 months from the date of acquisition to definitively determine the fair value of the assets and liabilities acquired. Goodwill is not amortised but tested for impairment at the end of the year or more frequently if there are identified signs of impairment. The procedures for carrying out the depreciation tests are set out in note

38 Notes to the consolidated financial statements 1.8 Intangible assets An intangible asset is a non-monetary element with no physical substance, which must be both identifiable and controlled by the company as a result of past events which may bring future economic benefits. An intangible asset is identifiable if it can be separated from the acquired entity or if it stems from legal or contractual rights. Intangible assets whose useful lives can be determined are amortised on a straight line basis over their forecast useful lives. Intangible assets Useful life Method of amortisation Contracts and customer relation acquired Duration of contracts Straight line Others* 1 to 3 years Straight line * Other intangible assets consist mainly of software. 1.9 Tangible assets and investment properties Tangible assets primarily consist of office furniture depreciated by the straight line method over five years and fixed assets under construction (essentially buildings under construction). Investment properties are properties held in order to earn rent, increase capital, or both, rather than to use them in the production and provision of goods and services or for administrative purposes or to sell them within the framework of ordinary business activities. Buildings under construction or development with a view to future use as investment properties, as well as advances paid on those properties, are classified under tangible assets. Once construction or development is terminated the building is classified as an investment property. In accordance with the option offered by IAS 40, investment properties are accounted for at cost less accrued depreciation and any impairment (cf. note 1.11). The cost of investment properties consists of: > the purchase price stated on the deeds or the construction price, including non-recoverable taxes, after deducting any rebates, trade or payment discounts; > the cost of refurbishment works; > all directly attributable costs incurred in order to put the investment property in a condition to be leased in accordance with the use intended by management. Thus, conveyance charges, fees, commission and document costs related to the acquisition and commission related to leasing are included in the cost; > costs relating to bringing the property in line with safety and environmental regulations; > capitalised loan costs (cf. note 1.13). Any investment grants received are deducted from the value of the corresponding assets. These are therefore accounted for as income over the useful life of the asset depreciable by means of a reduction in the depreciation charge. The gross value is split into separate components which have their own useful lives. Investment properties are depreciated by the straight line method over periods which correspond to their expected useful life. The land is not depreciated. The depreciation periods used (in years) are as follows: Offices Warehouse Haussmann Other and business Components building properties Housing premises Roads, networks, distribution Fabric, structure External structures General and technical installations Internal fittings Specific facilities The useful lives are revised at the end of each year, particularly in respect of investment properties which are the subject of a refurbishment decision. In accordance with IAS 36, where events, changes in the market environment or internal factors indicate a risk of impairment of investment properties, they are tested for impairment (cf. note 1.11) Assets intended to be sold In accordance with IFRS 5, if the Group decides to dispose of an asset or group of assets, it classifies it as an asset held for sale if: > the asset or group of assets is available for immediate sale in its current condition, subject only to customary conditions regarding the sale of such assets; > it is likely to be sold within one year. For the Group, only properties meeting the above criteria and subject to a formal disposal decision by the Board of Directors, or failing that the General Meeting, are classified as non-current assets held for sale. The accounting consequences are as follows: > the asset (or group of assets) intended to be sold is valued at its book value or fair value less selling costs, whichever is lower; > the asset stops being depreciated with effect from the date of transfer Procedures for conducting asset impairment tests IAS 36 provides that goodwill and intangible assets with an indeterminate lifespan must be tested at least once a year and other long term assets such as investment properties must be checked to see if there is any indication that they may have become impaired. An indication of impairment may be: > a substantial reduction in the market value of the asset, > a change in the technological, economic or legal environment. Impairment of an asset is accounted for where the recoverable value is less than the book value

39 Notes to the consolidated financial statements Procedures for impairment of investment properties The recoverable value of investment properties is the fair value less disposal costs or the going value, whichever is higher. The fair value is the market value excluding charges, determined by independent surveyors. The going value is the present value of expected rental income from those assets. If there is an indication of impairment, and where the recoverable amount is less than the net book value, the difference between those two figures is accounted for as an impairment. Accounting for an impairment entails a review of the basis of depreciation and possibly the depreciation plans of the investment properties concerned. Impairments relating to investment properties may be subsequently reversed if the recoverable value again becomes higher than the net book value. The value of the asset after reversal of the impairment is capped at the book value which is determined net of depreciation if no impairment was accounted for in previous years. Procedures for impairment of goodwill, intangible assets and other tangible assets These assets are tested individually or combined with other aspects if they do not generate any cash flow independently of other assets. Impairment relating to intangible and tangible assets may subsequently be reversed if the recoverable value again becomes higher than the net book value. Impairment relating to goodwill cannot be reversed. Goodwill and intangible asset impairment tests are carried out per cash generating unit on the basis of future discounted cash flows stemming from medium term plans (four year forecasts following that of the closing). The discount rates used are determined before tax Leases Within the framework of its business activities, the Group uses assets taken or given under leases. These leases are subject to analysis in the light of the situations described and indicators provided in IAS 17 in order to determine whether they are ordinary leases or direct financing leases. Direct financing leases are leases which transfer virtually all the risks and benefits of the asset concerned to the lessee. All leases which do not match the definition of a direct financing lease are classified as ordinary leases. From the lessee s point of view Direct financing lease When first accounted for, assets used within the framework of direct financing leases are accounted for under tangible assets with a financial debt as the counterpart entry. The asset is accounted for at the fair value of the leased asset on the start date of the lease or the discounted value of minimum payments if that is lower. Ordinary lease Payments made under ordinary leases (other than service costs such as insurance and maintenance) are accounted for under charges on the income statement on a straight line basis over the term of the lease. From the lessor s point of view Direct financing lease When first accounted for, assets held by virtue of a direct financing lease are presented as accounts receivable for an amount equal to the net investment in the lease. These accounts receivable, including initial direct costs, are presented under Trade debtors on the asset side of the balance sheet. After being accounted for for the first time, financial income is spread over the term of the lease on a systematic and rational basis. This appropriate is made on the basis of a scheme reflecting a constant regular return on the net investment in the direct financing lease. Payments received under the lease corresponding to the period, excluding cost of services, are charges to the gross investment resulting from the lease to reduce both the principal and financing income not acquired. The initial direct costs are included in the initial valuation of the account receivable and reduce the revenue accounted for over the rental period. Ordinary lease Leases signed by the Group with its customers in the housing and commercial property markets are ordinary leases. Some leases concluded with public health customers are also ordinary leases. In these leases, rental income is recorded on a straight line basis over the firm terms of the leases. Consequently, any particular provisions and benefits specified in the leases (exemptions, payment holidays, key money) are spread over the firm term of the lease, without taking indexation into account. The reference period used is the first firm term of the lease. Any expenses directly incurred and paid to third parties for setting up a lease are recorded under the assets, under investment properties and amortised over the firm term of the lease Borrowing costs The Group has elected to include borrowing costs directly attributable to construction or production in the cost of the corresponding asset. Borrowing costs are deducted from financial charges and included in the cost of construction up to the completion date of the works. The borrowing costs incorporated into the value of assets are determined as follows: > where funds are borrowed in order to construct an individual building, the borrowing costs that can be incorporated are the actual costs incurred over the year less any financial income from investing the borrowed funds temporarily; > where the borrowed funds are used to construct several buildings, the borrowing costs that can be incorporated into the cost of the building are determined by applying a capitalisation rate to the building costs. This capitalisation rate is equal to the weighted average of current borrowing costs for the year other than the costs of borrowings specifically taken out for the construction of specific buildings. The capitalised amount is limited to the amount of costs actually borne

40 Notes to the consolidated financial statements 1.14 Securities available for sale Securities available for sale are accounted for at their fair value on the closing date. For shares of listed companies, the fair value is determined on the basis of the stock market quotation on the closing date in question. For unlisted companies, the fair value is determined using recognised valuation techniques (reference to recent transactions, discounting of future cash flows). Exceptionally, certain securities, which do not have a price quoted on an active market and whose fair value cannot be assessed reliably, are valued at cost. Potential gains and losses in relation to the acquisition price are routinely accounted for under capital and reserves, revaluation reserves, up to the date of disposal. However, where an impairment test leads to the recognition of a potential capital loss in relation to the acquisition cost and this is similar to a significant or lasting impairment, that impairment is accounted for in the income statement. It cannot be subsequently reversed in the income statement in respect of shares and other variable income securities Other financial assets Other financial assets essentially consist of: > UCITS which do not meet the criteria for classification as cash equivalents, accounted for at fair value by result, > receivables associated with investments, loans, deposits and guarantees paid, term deposits, accounted for at amortised cost Stocks Stocks and works in progress are accounted for at their acquisition or production cost. At each close, they are valued at their production cost or net realisation value whichever is lower. The net realisation value represents the estimated selling price in the normal course of business, less expected costs to complete them or realise the sale. Stocks primarily consist of land, reserves and unsold plots from the housing development business (under way or finished) Building contracts and off-plan sales The Group applies the progress method to determine earnings from and costs related to building contracts and off-plan sales to be accounted for in the income statement for each period. Building contracts and off-plan sales costs are production costs directly assignable to the contract as well as borrowing costs incurred up to the date of completion of the works. Marketing fees and management expenses are recorded under charges. If it is likely that the total cost of the contract will be more than the total income, the Group recognises a termination loss under charges for the period. Part payments received on these contracts, before the corresponding work has been carried out, are accounted for on the liabilities side under advances and payments on account received. Costs incurred plus profits accounted for less losses accounted for as well as intermediate invoices are determined on a contract by contract basis. If this figure is positive, it is accounted for on the asset side under amount due by customers in respect of building contracts and off-plan sales. If it is negative, it is accounted for on the liabilities side under amount due to customers in respect of building contracts and off-plan sales Trade debtors Trade debtors primarily consist of short term receivables. Depreciation is established where the book debt is higher than the amount recoverable Cash and cash equivalents Cash includes liquid assets in current and at-sight deposit bank accounts. Cash equivalents consist of cash UCITS and investments maturing in less than three months, easily convertible into a known amount of cash and subject to a negligible risk of change in value, held in order to meet short term cash commitments. Overdrafts are excluded from the notion of cash and cash equivalents and are accounted for as current financial debts Treatment of property brokerage activities Under their brokerage contracts, the Group s property administration companies (housing and commercial property markets) and public-health market services hold principals funds. As agent, the Group keeps the principals accounts and presents them in its own balance sheet. Specific balance sheet accounts are used under the headings miscellaneous debtors and miscellaneous creditors. The principals accounts on the balance sheet thus represent the position of managed funds and accounts Provisions A provision is accounted for as soon as there is a probable Group obligation, resulting from past events, the extinction of which should result in an outflow of resources for the Group without at least an equivalent counterpart, the value of which can be estimated reliably. If the date of realisation of that obligation is beyond one year, the amount of the provision is subject to a discounting calculation, the effects of which are recorded under financial income. All kinds of identified risks, particularly operational and financial risks, are monitored on a regular basis, which enables the amount of provisions considered necessary to be decided Staff benefits Pension liabilities and long-service medals Pension schemes, similar payments and other welfare benefits, which are analysed as defined benefits schemes (scheme in which the Group undertakes to guarantee a defined amount or level of benefit), are accounted for on the balance sheet on the basis of an actuarial assessment of the liability on the closing date, less the fair value of the assets of the related scheme which are dedicated to them. Contributions paid under schemes which are analysed as defined contribution schemes, in other words where the Group has no obligation other than to pay the contributions, are accounted for under charges for the year. The provision appearing in the consolidated accounts is calculated according to the projected credit units method and takes the related social security charges into account. Actuarial discrepancies are due to distortions between the assumptions used and reality or changes in the assumptions used to calculate commitments and the assets assigned to cover them: > staff turnover, > rate of wage increases, > discount rate, > mortality tables, > rate of return on assets

41 Notes to the consolidated financial statements The actuarial discrepancies are accounted for in the income statement in the year in which they are noted. Bonuses paid when long-service medals are awarded throughout the working life of employees are covered by a provision. This is assessed taking into account the likelihood that the employees will reach the required length of service for each stage and is discounted at the end of each year. Employee profit sharing scheme The provision for the employee profit sharing scheme is determined in accordance with a current Group agreement Icade share subscription option plans Pursuant to IFRS 2 relating to payments based on shares, share subscription or purchase option plans give rise to the registration of a charge in respect of the fair value of the services to be rendered over the acquisition period. For plans subject to acquisition conditions, this charge is spread in a straight line over the acquisition period of the rights in return for an increase in reserves Financial debts and rate hedging Financial debts Borrowings and other interest bearing financial liabilities are valued by the depreciated cost method using the effective interest rate of the loan. Expenses and issue premiums affect the opening value and are spread over the life of the loan via the effective interest rate. In the case of financial debts resulting from accounting for direct financing leases, the financial debt recorded as the counterpart of the asset is initially accounted for at the fair value of the leased asset or the discounted value of minimum payments under the lease if this is lower. Derivatives and hedge accounting The Group uses financial derivatives to hedge its exposure to the market risk stemming from interest rate fluctuations. Derivates are used within the framework of a Group rates risk management policy. The financial risk management strategies and methods used to determine the fair value of financial derivatives are set out in note 26 Financial risk management. Financial derivatives are recorded on the balance sheet at their fair value. The Group uses derivatives to hedge its variable rate debts against rate risks (hedging future cash flows) and applies hedge accounting where the documentation and effectiveness conditions (a priori and a posteriori) are fulfilled. In this case, changes in the fair value of the financial derivative are accounted for net of tax under capital and reserves (revaluation reserves) until the hedged transaction occurs in respect of the effective part of the hedging. The ineffective part is recorded immediately in the income statement for the period. Accrued gains and losses in capital and reserves are reclassified in the income statement under the same heading as the hedged item for the same time that the hedged cash flow affects the result. Where the financial derivatives do not satisfy the conditions laid down by the standard for using hedge accounting, they are classified under the category of transaction assets and any changes in fair value are accounted for directly in the income statement for the period. The fair value of derivatives is calculated by commonly accepted models (future discounted cash flow method, Black and Scholes method ) and based on market data Hybrid financial instruments The hybrid financial instruments issued by the Group are analysed according to the substance of the contractual agreements. Their various components are presented under debt and/or capital and reserves respectively. The capital and reserves component is the one for which there is no possibility of cash repayment. The debt component includes bonds redeemable in shares (BRS) which are the subject of a cash buy-back option by Icade and interest payments certain to be discounted at the market rate Tax Tax payable Icade Emgp and Icade Foncière des Pimonts, listed property companies, have opted for the SIIC scheme (Listed French Property Investment Companies). Within this framework, in return for paying an exit tax, revenues (rent and capital gains) are exempt from tax in the future. The debt relating to the exit tax will be paid out over four years. In the absence of interest paid on the debt and in view of the existence of a reliable payment schedule, the figure has been discounted at the closing date. Deferred tax In accordance with IAS 12, deferred tax is recorded on short term differences between the book values of assets and liabilities and their values for tax purposes. According to the variable carry-over method, they are calculated on the basis of the expected tax rate for the year in which the asset will be realised or the liability paid off. The effects of changes in tax rates from one year to the next are recorded in the result for the year in which the change occurs. Deferred tax relating to items accounted for directly under capital and reserves is itself accounted for under capital and reserves. With regard to short term differences relating to investments in subsidiaries consolidated by the equity method or proportionally consolidated, a deferred tax liability is accounted for unless: > the Group is in a position to control the date on which the short term difference will be reversed or > if the short term difference does not reverse within the foreseeable future. Deferred tax assets resulting from short term differences, tax deficits and tax credits which can be carried over are limited to the estimated value of the recoverable tax. This is assessed at the close of the year according to the forecast results of the tax entities concerned. Deferred tax assets and liabilities are not discounted. 2. CHANGES IN THE CONSOLIDATION 2.1 Consequences for Icade of the reorganisation of the property division of the Caisse des Dépôts in 2005 The Caisse des dépôts decided to maintain its position as property operator by electing to reorganise its property division around general interest activities on the one hand and competitive activities on the other. Icade is set to be the fulcrum of the competitive division. Additional acquisition of Icade Foncière des Pimonts securities in the second half of 2005 Within the framework of this reorganisation, in 2004 Icade acquired 76.53% of the capital and 34.56% of the value of the BRS issued by Icade Foncière des Pimonts from the Caisse des dépôts

42 Notes to the consolidated financial statements Additional acquisition of securities and BRS in the second half of 2005 Icade acquired a block of Icade Foncière des Pimonts securities and BRS belonging to minority shareholders on 13 th July 2005, i.e. 635,748 shares, representing 19.19% of the capital of Icade Foncière des Pimonts and 61,322 BRS providing entitlement to 299,380 shares on conversion. This acquisition represents 935,128 shares after conversion out of a total of 6,227,607 i.e % of the capital after the BRS have been converted. The acquisition price of the securities and BRS paid in the second half of 2005 amounts to 97.1 million. The consolidated goodwill accounted for in the second half of 2005 amounts to 7.7 million. Acquisition price The acquisition price of the securities and BRS paid in 2004 amounts to million and 97.1 million in The overall acquisition price of million consists of the following components: acquisition price of the securities: million; acquisition price of the BRS: million. General interest activities discontinued by Icade in the first half of 2005 Within the framework of the reorganisation of the Caisse des dépôts property division, the Group sold all its holdings in the following companies to the SNI (subsidiary of the Caisse des dépôts, not in Icade s consolidation): > SCIC Habitat, a company with majority holdings in social housing companies in which the Group held 567,600 shares, i.e % of the capital. > GFF Habitat and Icade Cités, social housing service companies, in which the Group held 100% of the capital. > SCET, an amenities and development tool of the Caisse des dépôts Group, a company in which Icade held 402,000 shares, i.e. 100% of the capital. The securities of SCIC Habitat were outside the consolidation as at 31 st December However, GFF Habitat, Icade Cités and SCET were fully consolidated as at 31 st December The share disposals actually took place on 26 th May 2005 in respect of SCIC Habitat, GFF Habitat and Icade Cités and on 23 rd June 2005 in respect of the SCET. These disposals are treated as a discontinued activity according to IFRS 5 because all the Group s general interest activities were conducted in companies sold to the SNI. Discontinued activities realised a profit of 8.4 million as at 30 th June Other acquisitions of minority holdings in 2005 and 2006 Within the framework of the reorganisation of its activities and its development Icade acquired minority holdings in several fully consolidated companies for a total price of: > 80.7 million in 2005, 58.5 of which paid in the first half and 22.2 in the second half. > 14.4 million in 2006, in the first half of the year. Acquisition of minority holdings in the housing market property development business in the first half of 2005 On 24 th June 2005, Icade strengthened its position in Icade Capri, already fully consolidated in 2004, by buying the 35% holding of a minority shareholder, thus becoming the sole shareholder. Goodwill of 24.8 million was recorded in the first half of On 18 th January 2005, Icade Capri acquired 30% of the shares of its subsidiary Espace et Habitat, previously fully consolidated, thus taking its holding to 100%. This acquisition released goodwill of 3.6 million in the first half of Acquisition of minority holdings in the housing market property company business in the second half of 2005 On 26 th December 2005, Icade acquired holdings from minority shareholders in several property companies in the housing market, thus facilitating the legal reorganisation of this business. The goodwill recorded in the consolidated accounts in the second half of 2005 amounted to 17.1 million. Acquisition of minority holdings in the housing market property company business in the first half of 2006 The purchase of holdings from minority shareholders in property companies in the housing market in the first half of 2006 generated goodwill of 6.9 million. The price paid was 14.4 million. 2.3 Other business combinations in 2005 and 2006 Within the framework of developing as an integrated property operator, Icade took control of several companies for a total price of: > 24.7 million in cash in 2005, broken down into 24.2 million in the first half and 0.5 million in the second half. > million in 2006 broken down into 0.4 million in the first half and 145 million in the second half. Acquisition of companies in Italy in the second half of 2005 Icade acquired 100% of a service company in Italy, New Real, on 12 th July The impact on the Group s consolidated accounts is insignificant. Acquisition of Icade Conseil and Icade Expertise in the first half of 2005 and a price supplement accounted for in 2006 Icade acquired a property consultancy business through the companies Icade Conseil and its wholly owned subsidiary, Icade Expertise. This expansion operation is in line with Icade s development as a complete property operator. These companies were acquired in successive portions reaching 100% in the first half of They were fully consolidated in the first half of The majority of this acquisition was paid for in cash, supplemented by Icade Foncière des Pimonts shares, representing 0.76% of the shares of Icade Foncière des Pimonts. These securities were exchanged for Icade securities in the first half of Two additional payments are likely to be made, one on 31 st March 2008, the other on 31 st March 2011 on the basis of the company s performance. As the amount of these additional payments cannot be determined reliably in 2005, only the certain acquisition price was taken into account in determining the 2005 goodwill, which amounts to 7.2 million. In 2006, in the light of the development of the business, the additional payment could be estimated more reliably and a price supplement of 3 million was accounted for. The goodwill amounts to 10.2 million as at 31 st December Acquisition of Cabinet Villa in the first half of 2005 Pursuing its expansion in property administration, the Group acquired 100% of the company Cabinet Villa SAS, on 6 th June 2005, together with its wholly owned subsidiaries Villa Transactions SAS and Cabinet Villa Gestion. The goodwill stands at 14.1 million in the first half of Acquisition of OPTIME in the first half of 2006 Icade acquired 100% of a French service company, OPTIME, for 0.4 million, actually taking control on 1 st January The acquisition of OPTIME has no significant impact

43 Notes to the consolidated financial statements Acquisition of GETCI in the second half of 2006 Icade acquired 100% of a French service company, GETCI, for 1.5 million, actually taking control on 1 st September The goodwill amounts to 0.5 million. Acquisition of an Italian company in the second half of 2006 Icade acquired 100% of an Italian service company, Icade Italia Agency, on 19 th October The impact on the Group s consolidated accounts is insignificant. Acquisition of two German companies in the second half of 2006 On 1 st August 2006, Icade acquired 94.9% of the shares of two German companies, KABALO Grundstucks-Verwaltungsgesellschaft mbh & Co. KG and KABALO Grundstucks-Verwaltungsgesellschaft mbh for a price of million. The consolidated goodwill in the Group s consolidated accounts amounts to 2.7 million. 3. ELEMENTS OF GROSS OPERATING PROFIT 3.1 Earnings Earnings by type are detailed as follows: (in million) 31 Dec Dec Rental income including financial rent Building contracts and off-plan sales Provision of services Sale of goods Total earnings 1, , Information on leases (from the point of view of lessor and lessee) ORDINARY LEASES (LESSOR S POINT OF VIEW) Types of lease Basis of determination of conditionnal rent Renewal or purchase option conditions Warehouses and Housing Offices business premises Lessees earnings Renewal offer Renewal offer Tacit renewal or renewal six month before six month before offer with increase of rent expiry of expiry of three years term three years term Indexation clauses* Building costs index* Building costs index* Building costs index* 6 years renewable 3/6/9/ year lease 3/6/9/ year lease Term by tacit agreement 12 years maximum 12 years maximum * The new rent reference index supplied by INSEE will apply with effect from 01/01/2007. ORDINARY AND DIRECT FINANCING LEASES (LESSOR S POINT OF VIEW) (in million) 31 Dec Dec DIRECT FINANCING LEASES RUNNING ON CLOSING DATE Total gross initial investment in the lease A Rents due B Gross initial investment in lease at less than one year Gross initial investment in lease at one to five years Gross initial investment in lease at more than five years Gross investment in lease on closing date C = A - B Financial income acquired on closing date D Accrued financial income not acquired on closing date E = C - I - D Financial charge on non-discounting F - - Non-guaranteed discounted residual values reverting to lessor G Discounted value of minimum payments receivable at less than one year Discounted value of minimum payments receivable at one to five years Discounted value of minimum payments receivable at more than five years Total discounted value of minimum payments receivable H = C - D - E - F - G Net investment in the lease I Non-guaranteed residual values reverting to lessor Accrued correction to value of non-recoverable minimum payments in respect of letting - - Conditional rent accounted for under income for the period - - DIRECT FINANCING LEASES SIGNED BUT WHERE THE INVESTMENT IS NOT MADE BY THE CLOSING DATE Total gross initial investment in the lease A Rents due B - - Gross initial investment in lease at less than one year - - Gross initial investment in lease at one to five years Gross initial investment in lease at more than five years Gross investment in lease on closing date C = A - B Financial income acquired on closing date D - - Accrued financial income not acquired on closing date E = C - I - D Financial charge on non-discounting F - - Non-guaranteed discounted residual values reverting to lessor G - - Discounted value of minimum payments receivable at less than one year - - Discounted value of minimum payments receivable at one to five years Discounted value of minimum payments receivable at more than five years Total discounted value of minimum payments receivable H = C - D - E - F - G Net investment in the lease I Non-guaranteed residual values reverting to lessor - - Accrued correction to value of non-recoverable minimum payments in respect of letting - - Conditional rent accounted for under income for the period - - NB: The lessor had no financing leases in

44 Notes to the consolidated financial statements (in million) 31 Dec Dec ORDINARY LEASES Rental income from ordinary leases of which conditionnal rent Tenants charges not reinvoiced (1.9) (2.5) - Upkeep, repairs and maintenance (38.8) (51.7) Net rent At less than one year One to five years More than five years Minimum rents to be paid under non-cancellable ordinay leases DIRECT FINANCING AND ORDINARY LEASES (LESSEE S POINT OF VIEW) (in million) 31 Dec Dec DIRECT FINANCING LEASES, TANGIBLES ASSETS AND INVESTMENT PROPERTIES At less than one year (4.9) (4.5) One to five years (24.8) (17.6) More than five years (17.7) (27.8) Minimum rent to be paid (47.4) (49.9) At less than one year (3.4) (3.4) One to five years (20.3) (14.0) More than five years (17.3) (26.4) Discounted value of payments under direct financing leases (41.0) (43.8) (in million) 31 Dec Dec ORDINARY LEASES Rental charges (30.3) (27.1) Revenue from sub-letting At less than one year (22.5) (19.3) One to five years (31.6) (41.7) More than five years (9.5) (28.5) Minimum rents to be paid under non-cancellable ordinary leases (63.6) (89.5) 4. PROFIT/LOSS FROM DISPOSALS (in million) 31 Dec Dec Profit/loss from disposals of investment properties of which sales of blocks of buildings of which sales of individual accomodation units Profit/loss from disposals of other tangible and intangible assets (1.4) (0.4) Profit/loss from disposals of consolidated interests Profit/loss from disposals of assets held for sale of which sales of blocks of buildings Profit/loss from other disposals Total profit/loss from disposals FINANCIAL PROFIT/LOSS (in million) 31 Dec Dec Interest charges on borrowings (33.9) (29.6) Recycling in profit/loss of rate hedging derivatives (3.8) (0.7) Gross cost of indebtedness (37.7) (30.3) Income from interest on cash and cash equivalents (0.4) 0.4 Profit/loss from disposal of cash equivalents Income from cash and cash equivalents Net cost of indebtedness (30.3) (27.3) Profit/loss from disposal of securities available for sale 8.5 (0.1) Interest income on securities available for sale - - Profit/loss on financial assets valued at fair value by result (0.1) 0.2 Variation in fair value of transaction derivatives Other financial income Other financial charges (14.6) (6.2) Other financial income and charges Financial profit/loss (16.8) (21.2) 6. TAXES ANALYSIS OF THE LIABILITY (in million) 31 Dec Dec Current taxes (52.4) (71.9) Deferred taxes (24.5) 4.5 Total tax liability recognised in the income statement (76.9) (67.4) Tax on items recognised in capital and reserves (0.8) 0.3 (in million) 31 Dec Dec Theorical tax liability at effective rate in France (100.8) (49.2) Impact of different tax rates (2.2) - Impact of carried forward loss used - (0.1) Impact of tax liability on profit taxed at reduced rate Other impacts* 25.5 (18.8) Effective tax liability (76.9) (67.4) Effective tax rate 25.43% 44.43% * In view of the characteristics of the SIIC scheme, the Group reports corporation tax up to the legal distribution obligation, the remainder of the profit being reinvested by the property companies. The main factors of the reduction in tax liability are: > limitation to the legal distribution obligation of subsidiaries falling under the SIIC scheme and > the reversal of the provision for tax risks These two factors lead to an easing in the tax liability of 30 million, included under other impacts

45 Notes to the consolidated financial statements ORIGIN OF DEFERRED TAXES (in million) 31 Dec Dec Deferred tax assets related to short term differences Provisions for staff related commitments Provisions for non-deductible liabilities Provisions for non-deductible assets Other Deferred tax assets related to losses carried forward Total deferred tax assets Deferred tax liabilities related to short term differences (58.5) (41.5) - Leasing (9.1) (8.7) - Asset revaluation* (17.6) (17.4) - Legal distribution obligation of subsidiaries under the SIIC scheme (21.4) (5.4) - Other (10.4) (10.0) Total deferred tax liabilities (58.5) (41.5) Net position (27.5) (2.3) (*) Deferred taxes on the revaluation of the property assets of companies which have not opted for the SIIC scheme. As at 31 st December 2006, non-activated deficits to be carried forward by the Group amounted to a basic 25 million. Deferred taxes on leasing EMGP The profits made on renting buildings under leases are exempt if 85% of their amount is distributed prior to the end of the year following their realisation. With regard to the assignment of rights relating to a leasing contract concerning a building, this is also exempt if 50% of the capital gains recorded are distributed prior to the end of the second year following the year of realisation. Nevertheless, these provisions only apply to contracts executed or acquired as from 1 st January As regards contracts executed or acquired prior to this date, the sub-letting transactions for buildings therefore remain taxable at the common law rate. When the property assets recognised in the 2003 consolidated accounts were revalued, during the changeover to the SIIC scheme, a deferred tax liability was recorded on the investment properties subject to leasing. This deferred tax liability, calculated at the common law rate, corresponds to the tax on the latent capital gains resulting from the difference between the revaluation value of the building at the effective date of the SIIC scheme option, and the consolidated net book value of this asset at the same date. The amended Finance Act, dated 21 st December 2005, provides for the option of assigning contracts acquired prior to 1 st January 2005 to a structure having opted for the SIIC scheme, so as to make them eligible for the SIIC scheme. The decision to take up this assignment option must be made prior to 31 st December 2007; this date has been moved forward to 31 st December 2008 by the amending Finance Act for This option gives rise to payment of a tax at the reduced rate of 16.5%, based on the difference between the market value and the value for tax purposes of the underlying assets. As at 31 st December 2006, Icade Emgp had not yet taken the decision to assign the leasing contracts by 31 st December Consequently, the deferred tax was calculated at the common law rate. 7. GOODWILL ANALYSIS OF BALANCES 31 Dec Dec (in million) Gross value Impairment Net value Gross value Impairment Net value Housing market Commercial property market 41.5 (3.1) (3.1) 27.0 Public health market Other Goodwill (3.1) (3.1) VARIATIONS (in million) Gross value Impairment Net value Balance as at 31 st December (3.1) Charges related to impairment Impact of changes to companies in the consolidation Balance as at 31 st December (3.1) (in million) Gross value Impairment Net value Balance as at 31 st December Charges related to impairment - (3.1) (3.1) Impact of changes to companies in the consolidation Balance as at 31 st December (3.1) (in million) Gross value Balance as at 31 st December Acquisition of minority equity interests (property investment) 7.0 Total acquisitions - housing market 7.0 Acquisition of KABALO (property investment) 2.7 Acquisition of OPTIME and GETCI (services) 0.8 Price supplement Icade Conseil (services) 3.0 Other movements 0.3 Total acquisitions - commercial property market 6.8 Balance as at 31 st December

46 Notes to the consolidated financial statements (in million) Gross value Balance as at 31 st December Acquisition of minority equity interests (property development) 28.4 Acquisition of minority equity interests (property investment) 17.1 Acquisition of Cabinet Villa (services) 14.1 Total acquisitions-housing market 59.6 Acquisition of minority equity interests Icade Foncière des Pimonts (property investment) 7.7 Acquisition of Icade Conseil (services) 7.2 Other movements (1.4) Total acquisitions-commercial property market 13.5 Acquisition of Newreal 0.2 Total acquisitions-others 0.2 Balance as at 31 st December INTANGIBLE ASSETS TABLE OF VARIATIONS Contracts and customer (in million) relations acquired Other Total Gross value as at 31 st December Increases Capitalised productions Reductions - (6.3) (6.3) Impact of changes to consolidation* Other movements Gross value as at 31 st December * No fixed assets acquired by means of business combinations. An impairment test was carried out on 31 st December The pre-tax discount rate used to determine the going value varied from 8.17% to 15.45% according to the assets tested. Impairment of 3.1 million was recorded on the goodwill of a cash generating unit in the commercial property market. The impact on the income statement appears on the impairment of consolidated goodwill and intangible assets line. An impairment test was carried out on 31 st December The pre-tax discount rate used to determine the going value varied from 9.21% to 13.79% according to the assets tested. Depreciation as at 31 st December 2005 (1.5) (9.8) (11.3) Increases - (2.0) (2.0) Capitalised productions Reductions Impact of changes to consolidation* - (0.1) (0.1) Other movements - (2.2) (2.2) Depreciation as at 31 st December 2006 (1.5) (11.1) (12.6) * No fixed assets acquired by means of business combinations. Impairment as at 31 st December (0.9) (0.9) Increases Capitalised productions Reductions Impact of changes to consolidation* Other movements Impairment as at 31 st December (0.7) (0.7) * No fixed assets acquired by means of business combinations. Net value as at 31 st December Increases Capitalised productions Reductions - (3.1) (3.1) Impact of changes to consolidation* Other movements Net value as at 31 st December * No fixed assets acquired by means of business combinations

47 Notes to the consolidated financial statements Contracts and customer (in million) relations acquired Other Total Gross value as at 31 st December Increases Capitalised productions Reductions - (0.3) (0.3) Impact of changes to consolidation* - (3.3) (3.3) Other movements - (0.4) (0.4) Gross value as at 31 st December * Of which fixed assets acquired by means of business combinations: m1.9. Depreciation as at 31 st December 2004 (0.8) (10.9) (11.7) Increases (0.7) (0.8) (1.5) Capitalised productions Reductions Impact of changes to consolidation* Other movements Depreciation as at 31 st December 2005 (1.5) (9.8) (11.3) * Of which fixed assets acquired by means of business combinations: less than m TANGIBLE ASSETS AND INVESTMENT PROPERTIES TABLE OF VARIATIONS Advances and Total of wich payments on tangible assets Other Tangible account assets and under direct tangible assets under on tangible Investment investment financing (in million) Land Buildings assets construction assets properties properties leases Gross value as at 31 st December , , Acquisitions * (**) Capitalised production Reductions (0.1) - (5.5) - - (58.9) (64.5) - Impact of changes in consolidation *** - - (0.5) Other movements **** (30.6) (81.1) (97.1) 0.5 Gross value as at 31 st December , , * Of which m52.8 of expenses subsequently capitalised. ** Of which m3.9 in loan costs incorporated into the cost of the assets during the year. *** Of which m317.0 of investment properties added to the consolidation and m(199) of investment properties removed from the consolidation. **** Of which m(88.3) of investment properties held for sale. Impairment as at 31 st December (2.0) (2.0) Increases - (1.1) (1.1) Capitalised productions Reductions Impact of changes to consolidation* Other movements - (0.8) (0.8) Impairment as at 31 st December (0.9) (0.9) * Of which fixed assets acquired by means of business combinations: nil. Net value as at 31 st December Increases Capitalised productions Reductions (0.7) (1.9) (2.6) Impact of changes to consolidation* Other movements - (0.2) (0.2) Net value as at 31 st December * Of which fixed assets acquired by means of business combinations: m1.9. Depreciation as at 31 st December (0.8) (21.6) - - (884.9) (907.3) (8.2) Increases - (0.2) (5.3) - - (79.2) (84.7) (2.7) Capitalised production (0.2) (0.2) - Reductions Impact of changes in consolidation - - (0.3) Other movements **** Depreciation as at 31 st December (0.5) (23.4) - - (871.8) (895.7) (10.9) **** Of which m67.5 of investment properties held for sale. Impairment as at 31 st December 2005 (0.8) - (2.8) - - (15.7) (19.3) - Increases (0.2) (0.2) - Capitalised production Reductions Impact of changes in consolidation Other movements **** (0.9) (0.9) - Impairment as at 31 st December 2006 (0.7) (9.0) (9.7) - **** Of which m0.5 of investment properties held for sale

48 Notes to the consolidated financial statements Advances and Total of wich payments on tangible assets Other Tangible account assets and under direct tangible assets under on tangible Investment investment financing (in million) Land Buildings assets construction assets properties properties leases Net value as at 31 st December , , Increases * (**) 0.4 (0.2) (2.7) Capitalised production (0.2) Reductions - - (0.4) - - (36.8) (37.2) - Impact of changes in consolidation *** - - (0.8) Other movements **** (29.1) (81.1) (23.4) 0.5 Net value as at 31 st December , , * Of which m52.8 of expenses subsequently capitalised. ** Of which m3.9 in loan costs incorporated into the cost of the assets during the year. *** Of which m317.0 of investment properties added to the consolidation and m(193.4) of investment properties removed from the consolidation. **** Of which m(20.3) of investment properties held for sales. Value as at 31 st December , , Acquisition * *** Capitalised production Reductions - - (1.8) (2.9) - (61.3) (66.0) - Impact of changes in consolidation **** (0.1) (3.2) (4.1) - - (2.7) (10.1) - Other movements ** (0.3) (38.3) Gross value as at 31 st December , , * Of which m147.4 of expenses subsequent to acquisitions. ** Of which m4.1 of investment properties held for sale. *** Of which m2.9 in loan costs incorporated into the cost of the assets during the year. **** No assets acquired by business combinations. Impairment as at 31 st December (1.6) (24.3) - - (819.0) (844.9) (5.3) Increases - (0.3) (3.4) - - (76.9) (80.6) (2.9) Capitalised production Reductions Impact of changes in consolidation Other movements * - (0.9) Impairment as at 31 st December (0.8) (21.6) - - (884.9) (907.3) (8.2) Advances and Total of wich payments on tangible assets Other Tangible account assets and under direct tangible assets under on tangible Investment investment financing (in million) Land Buildings assets construction assets properties properties leases Impairment as at 31 st December 2004 (1.0) - (0.7) - - (18.1) (19.8) - Increases (0.1) - (1.5) - - (5.0) (6.6) - Capitalised production Reductions Impact of changes in consolidation Other movements * - - (0.7) Impairment as at 31 st December 2005 (0.8) - (2.8) - - (15.7) (19.3) - * No impairment relating to investment properties held for sale. Net value as at 31 st December , , Increases (2.9) Capitalised production Reductions 0.2 (0.3) (5.0) (2.9) - (133.5) (141.5) - Impact of changes in consolidation (0.1) (1.2) Other movements * (0.3) (38.3) Net value as at 31 st December , , * Of which m1.7 investment properties held for sale. UNDERTAKINGS RELATING TO THE ACQUISITION OF ASSETS IN GERMANY Icade concluded several transactions with DaimlerChrysler Entwicklungsgesellschaft fur Immobilien mbh (DCI), approved by the DCI Supervisory Board in July Icade undertakes to acquire property assets from DCI worth a total of 4.5 million in the first half of FAIR VALUE OF INVESTMENT PROPERTIES At each cut-off date, the investment proprieties of each property company are valued by independent property surveyors, who are members of the Association française des sociétés d expertises immobilières. Icade Patrimoine (housing market) Icade Patrimoine s investment properties (housing market), which mainly consist of apartment buildings in the Ile-de-France, are valued on the basis of a block value which is consistent with the asset base strategy of the property company. The main evaluation method is the discounted revenue method (future discounted cash-flow method) over long periods (10 years). * Of which m2.4 of investment properties held for sale

49 Notes to the consolidated financial statements Icade Emgp (commercial property market) Icade Emgp operates and develops a complex of business parks in the north of Paris. The investment properties are valued on the basis of a global approach of the asset value of the parks which represent homogenous sub-complexes. The evaluation of the parks is carried out using the future discounted cash-flow method. The results obtained are periodically cross-checked using the so-called direct comparison method, against equivalent assets in terms of type and location. Icade Foncière des Pimonts (commercial property market) Icade Foncière des Pimonts owns office blocks in Paris (central business quarter), and in the Paris region, and implements outsourcing projects for commercial property assets (offices, shops). The investment properties are valued using the revenue method (future discounted cash-flow method and net rent capitalisation method), cross-checked using the direct comparison method. The fair values set out below are the survey values, excluding charges. FAIR VALUE OF INVESTMENT PROPERTIES Net book Net book value Fair value value Fair value (in million) 31 Dec Dec Dec Dec Icade Patrimoine (housing market) Icade Emgp (commercial property market) Icade Foncière des Pimonts (com.prop.mkt.) Icade Reit (commercial property market) Other Total 1, , , ,042.9 Of which : investment properties under direct financing leases SECURITIES AVAILABLE FOR SALE 31 Dec Dec (in million) Gross Impairment Net Gross Impairment Net Bonds and similar securities 41.1 (0.1) of which Immobilière Mr. Bricolage BRS* Shares and other variable income securities (0.2) of wich Club Méditerranée of which other holdings (0.2) 19.9 Total non-current securities available for sale 88.8 (0.1) (0.2) 71.0 Bonds and similar securities Total current securities available for sale * Securities and bonds repayable in company shares are not listed. (in million) 31 Dec Acquisitions 47.6 Disposals (30.6) Impact of variations in value of capital and reserves (2.4) Net charges related to impairment in income statement - Impact of changes to consolidation and capital - Other - 31 Dec st Jan Acquisitions 28.6 Disposals (51.5) Impact of variations in value of capital and reserves 0.5 Net charges related to impairment in income statement (0.1) Impact of changes to consolidation and capital 0.2 Other (4.6) 31 Dec Evaluation of Immobilière Monsieur Bricolage BRS During the first half of 2005, Icade Foncière des Pimonts subscribed for BRS issued by the company Immobilière Monsieur Bricolage. These BRS have the following characteristics: > nominal value: 18,000,000 > return: 4.5% > cash repayment option, at the initiative of Icade Foncière des Pimonts, between 1 st Jul and 30 st Sept. 2007, in the sum of 18,350,000 > If this option is not exercised, BRS repaid on 01 st Jan in Immobilière Monsieur Bricolage shares, representing 32% of its capital plus an undertaking to acquire from the Mr. Bricolage Group, on the same date, an additional 63% of the capital of Immobilière Monsieur Bricolage, to take the holding to 95%. Consequently, these securities are considered to be available for sale as at 31 st December 2006 and accounted for at their historical cost as the fair value of the BRS cannot be determined reliably. The impairment risk on the BRS is hedged by the cash repayment option. Acquisitions Acquisition of a holding in the Club Méditerranée: On 14 th June 2006, Icade acquired 4% of Club Méditerranée securities from Accor for 34.8 million. Following this transaction, Icade holds 774,320 shares with a nominal value of 4. This holding falls within the framework of a shareholders agreement which was signed and came into force on 14 th June 2006 by which investors undertake to keep the Club Méditerranée shares for two years with effect from that date. After that period of inaccessibility, any disposal by the investors shall be subject to a right of pre-emption in favour of the other investors. This agreement is concluded for three years, renewable annually. Net 96 97

50 Notes to the consolidated financial statements Icade agreed to be a party to the shareholders agreement on the determining prospect that an agreement relating to the acquisition of certain property assets by Icade or one of its subsidiaries and a partnership in respect of property development operations relating to the construction of villas on land adjoining certain sites operated by Club Méditerranée, would be signed by 30 th September 2006 at the latest. Icade did not pursue the proposed industrial agreement with Club Méditerranée and withdrew from the shareholders agreement. The Club Méditerranée shares are classified as assets available for sale and valued at the closing price on 31 st December OTHER NON-CURRENT FINANCIAL ASSETS 31 Dec Dec (in million) Notes Gross Impairment Net Gross Impairment Net Receivables associated with investments 21.5 (0.8) Loans Deposits and guarantees paid Term deposit Other Total other non-current financial assets at depreciated cost 29.5 (0.8) Derivatives Total other non-current financial assets 33.1 (0.8) (in million) Non-current financial assets 31 Dec Acquisitions 22.6 Disposals (1.4) Impact of changes in value on capital and reserves 3.6 Net charges related to impairment in income statement - Impact of changes in consolidation and capital 0.1 Other (2.2) 31 Dec ACQUISITIONS During the course of the first half of 2006, Icade Foncière des Pimonts subscribed for 50% of the shares of SCS Atrium Boulogne, which encompasses the Atrium Building at 6 Place Abel Gance, Boulogne. This transaction was conducted within the framework of a partnership with a German company which provides exit clauses. Both partners negotiated promises of sale and purchase of the SCS Securities held by Icade Foncière des Pimonts, which should unravel during the course of 2008, at a price determined on the basis of the company s valuation as at 31 st December This transaction is accounted for under Other financial assets at depreciated cost, at the effective interest rate of the transaction. LOANS AND RECEIVABLES AT DEPRECIATED COST Portion at less Portion at one Portion at more Total than one year to five years than five years non-current (in million) 31 Dec (current) (non-current) (non-current) portion Receivables associated with investments Loans Deposits and guarantees paid Term deposits Other Total other financial assets valued at depreciated cost-net Portion at less Portion at one Portion at more Total than one year to five years than five years non-current (in million) 31 Dec (current) (non-current) (non-current) portion Receivables associated with investments Loans Deposits and guarantees paid Term deposits Other Total other financial assets valued at depreciated cost-net

51 Notes to the consolidated financial statements 12. STOCKS AND WORK-IN-PROGRESS ANALYSIS OF STOCKS (in million) 31 Dec Dec Land and property reserves Work in progress Finished but unsold plots Other Gross value Impairment (8.3) (8.4) Net value IMPAIRMENT (in million) 31 Dec Dec Opening balance (8.4) (9.7) Appropriations for the year (3.0) (3.5) Impact of changes in consolidation (0.3) (0.8) Reversals during the year Other (0.1) 0.9 Closing balance (8.3) (8.4) 13. TRADE DEBTORS 31 Dec Dec (in million) Gross Impairment Net Gross Impairment Net Trade debtors and related accounts (13.4) (13.6) Financial trade debtors Total trade debtors (13.4) (13.6) BUILDING CONTRACTS AND OFF-PLAN SALES 31 Dec Dec Offices & (in million) Offices Amenities Housing Total amenities Housing Total Aggregate receivables, including tax, according to the progress method Work in progress , Termination loss - - (1.2) (1.2) Collected calls for funds (48.6) (36.4) (852.5) (937.5) (292.1) (844.9) ( ) Amount owed by customers Amount due to customers - - (17.8) (17.8) (11.5) (36.3) (47.8) Income for the year Concerning ongoing contracts at the closing date which are completed during the period: Total amount of costs incurred and profits accounted for (less losses accounted for) until 31 st December Amount of advances received (amount due to customers) - - (17.8) (17.8) (11.5) (36.3) (47.8) Reciprocal off balance sheet commitments (notarised instruments, excluding tax - collected calls for funds) (in million) Gross Impairment Net Balance as at 31 st December (13.6) Variation during year Impact of changes to the consolidation Balance as at 31 st December (13.4) Balance as at 31 st December (13.7) Variation during year Impact of changes to the consolidation Balance as at 31 st December (13.6)

52 Notes to the consolidated financial statements 15. MISCELLANEOUS RECEIVABLES 31 Dec Dec (in million) Gross Impairment Net Net Advances from suppliers Investment grants receivable Dividends receivable Receivables on disposal assets Mandate operations * Prepayments Tax receivables Social security receivables Other receivables 78.0 (3.5) Total miscellaneous receivables (3.5) All receivables are at less than one year. * Details of mandate operations below: (in million) 31 Dec Dec Receivables Cash Total mandate operations Current (in million) financial assets 31 Dec Acquisitions 34.9 Disposals (58.7) Impact of changes in value in capital and reserves - Impact of changes in value in income statement 0.3 Net charges associated with impairment in income statement - Impact of changes in the consolidation and capital 6.6 Other (35.6) 31 Dec CASH AND CASH EQUIVALENTS (in million) 31 Dec Dec Cash UCITS Cash equivalents Cash assets Cash and cash equivalents OTHER CURRENT FINANCIAL ASSETS 31 Dec Dec (in million) Notes Gross Impairment Net Gross Impairment Net Receivables associated with investments 24.9 (1.5) (0.9) 26.5 Loans Deposits and guarantees paid Term deposits Total other current financial assets at depreciated cost (1.5) (0.9) 76.3 Other UCITS in fair value by result Derivatives Total other current financial assets 50.4 (1.5) (0.9) INVESTMENT PROPERTIES HELD FOR SALE 31 Dec Dec Gross Net Net (in million) value Amortisation Impairment value value Investment properties held for sale 88.3 (67.3) (0.5) Total assets held for sale 88.3 (67.3) (0.5) Of which assets under direct financing leases Land Buildings As these are short term assets, the fair value is the same as the net book value

53 Notes to the consolidated financial statements 19. CAPITAL AND RESERVES CAPITAL 31 Dec Dec Capital Capital Number (in million) Number* (in million) Shares issued Fully paid 93,619, ,560, Ordinary shares with nominal value of 7.60 Total 93,619, ,560, * Ordinary shares with nominal value of CHANGE IN NUMBER OF SHARES IN CIRCULATION Number Nominal (in ) Capital (in m) 1 st Jan and 31 st December ,560, Exchange one old share for two new shares on 6 th march 2006 (33,560,000) (15.20) ,120, Share capital as at 6 th March ,120, Cash increase in capital on 18 th April ,044, Cash increase in capital on 25 th April ,306, Cash increase in capital on 24 th May ,148, Net acquisitions of treasury stock Share capital as at 31 st December ,619, The capital transactions carried out during the first half of 2006 have the following characteristics: > In March 2006, the Ordinary and Extraordinary General Meeting decided to issue 67,120,000 new shares with a nominal value of 7.60, each assigned to the company s shareholders at a rate of two new shares for one old share, replacing the 33,560,000 old shares with a nominal value of each. Following this operation, the number of shares was increased to 67,120,000 shares with a nominal value of > In April 2006, Icade carried out an initial increase in capital including removal of preferential subscription rights and a public call for savings to the value of million. This operation, carried out within the framework of the Open Price Offer and Guaranteed Global Placing, led to the issue of 22,044,089 new shares with a nominal value of 7.60 each together with a premium of 20.3, producing gross income of million. > An additional share issue following the exercise of the Over-allocation Option was also carried out in April The company s capital was increased by a nominal figure of 25.1 million, together with an issue premium of 67.1 million, by issuing an additional 3,306,613 shares with a nominal value of > In May 2006, Icade carried out an increase in capital including removal of preferential subscription rights in favour of employees and affiliated companies within the framework of an Offer reserved for employees. This increase in capital of an overall figure of 8.7 million entailed the creation of 1,148,835 new shares with a nominal value of 7.60 Euros. These shares were fully subscribed, 658,450 by Icade ACTIONS and 490,435 by Icade MULTI. The costs relating to these capital transactions were accounted for by deducting 17.3 million net of tax from capital and reserves. As at 31 st December 2006, Icade s share capital stood at 711,508, divided into 93,619,537 shares with a nominal value of DIVIDENDS (in million) 31 Dec Dec Payment to Icade SA shareholders - dividend distribution of reserves interim dividend reversal of interim dividend - (10.1) Total VARIATION IN REVALUATION RESERVES Securities Future Tax on available cash flow variations (in million) for sale hedging in value Total 31 December (9.7) 0.3 (8.8) Variation in fair value (2.4) 7.9 (0.8) 4.7 Transfer to profit/loss for period (0.7) December 2006 (2.5) 1.8 (0.5) (1.2) Securities Future Tax on available cash flow variations (in million) for sale hedging in value Total 1 st January (12.1) 0.3 (11.7) Variation in fair value Transfert to profit/loss for period December (9.7) 0.3 (8.8) The impact of future cash flow hedging mainly relates to the Group s property investment businesses which have opted for the SIIC tax scheme, which explains the low level of taxes on variations in value. TREATMENT OF BUY-BACK OF EMGP BRS BY ICADE In 2006, Icade organised an operation to buy back all the April 2004 and November 2004 BRS held by non-group third parties. Following these transactions there are still 303 April 2004 BRS and 428 November 2004 BRS in circulation with non-group third parties as at 31 st December The BRS buy-back price was split between the debt and capital and reserves components on the transaction date according to the same method as originally used, in accordance with IAS 32. The impact of the capital and reserves component was recorded by deducting million from capital and reserves

54 Notes to the consolidated financial statements 20. MINORITY INTERESTS IMPACT OF BRS ON MINORITY INTERESTS Icade Emgp and Icade Foncière des Pimonts have both issued BRS (Bonds Redeemable in Shares). These instruments meet the definition of capital and reserve instruments provided there is no possibility of being redeemed in cash (redeemed in shares). Only interest payments which are certain to occur are booked to debts, on the basis of the discounted value of flows at the market rate. The additional remuneration provided for in the event of payment of dividends in respect of Icade Foncière des Pimonts is considered as distributions to shareholders and in this respect, is charged to capital and reserves (minority interests). Icade holds a fraction of the BRS issued by these subsidiaries which is non-proportional to its percentage holding. The fraction of BRS held by Icade (capital and reserves and debts) is eliminated in the consolidation. The balance of the BRS not held by the Group is booked to minority interests in respect of the portion of the instrument which corresponds to capital and reserves and to debts in respect of the portion of certain interest to be paid to BRS holders from outside the Group. CHANGES TO THE CONSOLIDATION The 9.1 million reduction in minority interests as at 31 st December 2006 and the million reduction as at 31 st December 2005 related to changes to the companies in the consolidation are broken down as follows: (in million) 31 Dec Dec Acquisitions of minority interests (property development) - (30.5) Acquisitions of minority interests (property investment) - (7.0) Acquisitions of minority interests Icade Foncière des Pimonts (property investment) - (87.3) Acquisition of KABALO (property investment) - - Acquisition of OPTIME and GETCI (services) - - Impact of mergers on Icade Patrimoine (property investment) (7.3) - Other movements (1.8) 9.1 Impact of changes in the consolidation on minority interests (9.1) (115.7) 21. PROVISIONS (in million) Note 31 Dec Dec Provisions for: - Pension payments and similar commitments Contingencies and liabilities Non-curent provisions Provisions for: - Losses on contracts Tax risks Contingencies and liabilities Current provisions Total Changes to (in million) 31 Dec Approps. Use Reversals consolidation Other 31 Dec Pension payments and similar commitments (4.5) (4.9) Losses on contracts (3.7) Tax risks (9.6) (6.0) - (0.3) 15.9 Contingencies - other (3.2) (1.1) Liabilities - other (1.7) (1.9) (0.3) (1.6) 17.0 Total (22.7) (13.9) of which: operating profit/loss (22.4) (13.9) financial profit/loss (0.3) Changes to (in million) 31 Dec Approps. Use Reversals consolidation Other 31 Dec Pension payments and similar commitments (0.4) - (12.6) Losses on contracts (2.0) - (0.1) (0.3) 2.6 Tax risks (11.5) (1.1) 0.6 (1.3) 30.5 Contingencies - other (3.1) (1.6) (3.5) Liabilities - other (8.5) (3.6) Total (25.5) (6.3) (14.1) of which: operating profit/loss (25.2) (6.3) financial profit/loss No provision for non-current contingencies and liabilities has required discounting. Icade identifies several types of provisions. In addition to pension payments and similar commitments, which are subject to specific explanations (see note 28), provisions are made whenever the risks identified are the result of past events creating a probable obligation to disburse resources. The identified risks are: > losses on service contracts (for information, property development contracts appearing under amounts owed by customers and amounts due to customers );

55 Notes to the consolidated financial statements > tax risks. The provisions cover tax risks for which reassessment notices have been received as at 31 st December Within the framework of its business activity, the Group is faced with lawsuits. On the basis of an estimate of the risk established by management and its legal advisors, the provisions made are considered to be adequate at the close of the year and the Group also considers that it possesses all the information enabling it to support its position. Provisions which have an individual significant nature as at 31 st December 2006 cover: lawsuits relating to property development in the sum of 8.4 million, 0.8 million of which was allocated during 2006; risks relating to the renovation of the property asset base in the sum of 10.8 million, 2.7 million of which was allocated during The Group took out insurance for its risks relating to its business activity with the insurance company, ICS Assurances SA, which was wound-up by a decision from the Nanterre Commercial Court on 30 th September 1999, following the withdrawal of its accreditation. In the past, the Group has never borne any significant liabilities in this respect and no provision was booked either at 31 st December 2005 or 31 st December The possible liability which may be assumed by the Group is extinguished as the insured risks become time-barred. 22. FINANCIAL DEBTS NET FINANCIAL DEBT (in million) 31 Dec Dec Long and medium term financial debt (non-current) Short term financial debt (current) Gross financial debt 1, ,225.7 Interest rate risk derivatives (assets and liabilities) (1.8) 12.6 Gross financial debt after taking account of derivatives 1, ,238.3 Securities available for sale and other non-current financial assets (excluding interest rate risk derivatives and deposits paid) (109.9) (74.1) Securities available for sale and other current financial assets (excluding interest rate risk derivatives and deposits paid) (47.7) (102.5) Cash and cash equivalents (670.2) (285.7) Net financial debt FINANCIAL DEBTS BY TYPE (in million) 31 Dec Dec Bonded debt repayable in shares (BRS) Loans with credit institutions Direct financing leases Other loans and similar debts Debts associated with investments Long and medium term financial debts Bonded debt repayable in shares (BRS) Loans with credit institutions Direct financing leases Other loans and similar debts Debts associated with investments Bank overdrafts Short term financial debts Total gross financial debt 1, ,225.7 FINANCIAL DEBTS BY MATURITY Portion Portion Portion Portion Portion Portion at less at one at more at less at one at more than to five than than to five than (in million) 31 Dec one year years five years 31 Dec one year years five years Bonded debt repayable in shares (BRS) Loans with credit institutions 1, Direct financing leases Other loans and similar debts Debts associated with investments Bank overdrafts Total financial debts 1, , Loans taken out by Icade Emgp (outstanding capital at 31/12/2006: 378 million) and Icade SA (outstanding capital at 31 st december 2006: 295 million) are subject to covenants based on financial ratios (Loan to Value and interest charge hedging notions) which may lead to an early repayment obligation. To date, these ratios have been complied with. Icade SA also took out a loan with Crédit Foncier which includes an early repayment clause in the event that the Caisse des dépôts were to reduce its holding in the capital of Icade SA to below a threshold of 67%. As at 31 st December 2006, the outstanding capital on this loan was 20.7 million. The same applies to Icade Administration de Biens for outstanding capital as at 31 st December 2006 of 7.3 million. On these lines, the Group has obtained the lenders agreement not to demand early repayment of the loans, despite any change in the Caisse des dépôts holding in the capital of Icade

56 Notes to the consolidated financial statements The other financing taken out by the Icade Group may, in some cases, contain early repayment clauses in the event that the Caisse des dépôts holding were to fall below a threshold of 50%. As at 31 st December 2006, the Caisse des dépôts held 64.70% of the capital of Icade. FINANCIAL DEBTS BY RATE TYPE 31 Dec Dec Breakdown by rate Breakdown by rate (in million) Total Fixed Variable Total Fixed Variable Bonded debt repayable in shares (BRS) Loans with credit institutions 1, Direct financing leases Other loans and similar debts Debts associated with investments Bank overdrafts Total financial debts 1, , , ,075.0 During 2006, the Group significantly increased its protection against a rise in interest rates by setting up swaps. As 31/12/2006, hedged variable rate loans with credit institutions amounted to million. FAIR VALUE (in million) 31 Dec Dec Variable rate debts 1, ,075.0 Fixed rate debts Total fair value 1, ,222.1 LOAN GUARANTEE COMMITMENTS GIVEN 31 Dec Dec Global amount of 2005 corporate NBV Global amount (in million) pledged liabilities of pledged assets pledged liabilities Global amount of guaranteed liabilities Tangible assets Mortage and mortgage promises Financial assets Pledged securities TRADE CREDITORS (in million) 31 Dec Dec Trade creditors and related accounts Total trade creditors MISCELLANEOUS DEBTS (in million) 31 Dec Dec Long term deposits and guarantees received Medium term deposits and guarantees received Total non-current miscellaneous debts Advance payments from customers Debts on acquisition of assets Shareholders - dividends payable BRS holders - remuneration on capital and reserves component payable Mandate operations * Deferred income Deposits received Social security payables Tax payables excluding profit tax Other debts Employee profit sharing scheme Total current miscellaneous debts Total miscellaneous debts * (in million) 31 Dec Dec Debts Cash Total mandate operations

57 Notes to the consolidated financial statements 25. DERIVATIVES PRESENTATION ON THE BALANCE SHEET (in million) Notes 31 Dec Dec Assets: non-current current Liabilities: non-current (2.3) (8.4) current (0.1) (4.5) Total derivatives - Rate risk 1.8 (12.6) ANALYSIS OF NOTIONAL AMOUNTS BY MATURITY DATE 31 Dec Notional contract value Portion Portion Portion at less than at one to at more than (in million) Average rate Total one year five years five years Rate swaps-fixed payer 4.01% Caps and tunnels 5.53% Total derivatives - rate risk Dec Notional contract value Portion Portion Portion at less than at one to at more than (in million) Average rate Total one year five years five years Rate swaps-fixed payer 4.59% Caps and tunnels 5.55% Total derivatives - rate risk VARIATIONS IN FAIR VALUE OF DERIVATIVES Variation Variation in fair value Disposal in fair value Fair value Fair value in income of in capital 31 Dec Dec statement derivatives and reserves (5) = (in million) (1) (2) (3) (4) (1)+(2)+(3)+(4) Rate swaps-fixed payer (8.8) Caps and tunnels Total future cash flow hedging instruments (8.8) Rate swaps-fixed payer (4.1) Caps and tunnels Total non-classified hedging instruments (3.8) Total instruments - rate risk (12.6) Impact of Variation reclassification in fair Variation Declassified of instruments value in fair value Fair value Fair value after declassified at in income in capital 31 st Dec st Jan st Jan st Jan statement and reserves (6) = (1)+(2) (in million) (1) (2) (3) (4) (5) +(4)+(5) Rate swaps-fixed payer (15.3) (8.8) Caps and tunnels Total future cash flow hedging instruments (15.3) (8.8) Rate swaps-fixed payer - (4.7) (0.7) 0.6 (4.1) Caps and tunnels Total non-classified hedging instruments - (4.7) (0.7) (3.8) Total instruments - rate risk (15.3) - (0.7) (12.6) 26. FINANCIAL RISK MANAGEMENT The Group s operational and financial activities expose it to the following risks: Market risks The holding of property assets intended for rental exposes the Group to the risk of fluctuations in the value of property assets and rent. However, this exposure is limited: > the assets are held in a long-term perspective and valued in the accounts at their cost net of depreciation and impairment; > invoiced rent originates from rental commitments, the term and dispersion of which offset the impact of fluctuations in the rental market

58 Notes to the consolidated financial statements Counter-party risk Having a varied client portfolio and business activities, the Group is not exposed to significant risks. Moreover, the derivatives are only negotiated with first rate counterparties. Exchange rate risk As the Group does not carry-out any foreign currency transactions, it is not exposed to any exchange rate risk. Liquidity risk Management of the liquidity risk is ensured in the medium and long term within the framework of multi-annual plans and, in the short term, by using confirmed, non-drawn down lines of credit. Interest rate risk By borrowing at variable rates, the Group is subject to the risk of interest rate increases over time. Exposure to this risk is limited by the implementation of a conservative hedging policy (swaps and caps). After hedging, the debt structure (excluding debts associated with investments and bank overdrafts) favours fixed rates, variable rate debt representing no more than 25% of debt after taking into account overall rate management and 38% taking into account only hedging classified as cash flow hedging. Credit concentration risk The Group is not exposed to a credit concentration risk owing to the diversity of its business activities and customers. 27. EARNINGS PER SHARE (in million) 31 Dec Dec Net profit for calculating earnings per share (in ) Group share of net earnings 211,300,000 70,751,000 Impact of dilutive instruments: Group share of net diluted earnings 211,300,000 70,751,000 Group share of net earnings from discontinued activities - 8,398,000 Impact of dilutive instruments: - - Group share of net diluted earnings from discontinued activities - 8,398,000 Group share of net earnings from continued activities 211,300,000 62,353,000 Impact of dilutive instruments: - - Group share of net diluted earnings from continued activities 211,300,000 62,353,000 Number of shares used for calculating earnings per share Average number of shares in circulation (1) 85,601,854 33,560,000 Shares to be provided to redeem BRS - - Average number of shares used for the calculation 85,601,854 33,560,000 Impact of dilutive instruments: 3,844 - Average diluted number of shares in circulation 85,605,698 33,560,000 Earnings per share (in ) Group share of net earnings per share Group share of net earnings per diluted share Group share of net earnings per share from discontinued activities Group share of net earnings per diluted share from discontinued activities Group share of net earnings per share from continued activities Group share of net earnings per diluted share from continued activities (1) Number of shares as at 31 st december 2005 and 30 th june ,560,000 33,560,000 Change in number of shares held (2 new shares for 1 old share) 33,560,000 - Increase in capital of 22,044,089 shares as at 18 th april ,521,454 - Increase in capital of 3,306,613 shares as at 25 th april ,264,803 - Increase in capital of 1,148,835 shares as at 24 th may ,597 - Average number of shares used for the calculation 85,601,854 33,560,

59 Notes to the consolidated financial statements 28. COMMITMENTS TO STAFF VARIATION IN COST OF SERVICES RENDERED AND FAIR VALUE OF COVER 31 Dec Dec Commitment Commitment Total Commitment Commitment Total (in million) covered not covered covered not covered Opening actuarial debt (1) Impact of changes to consolidation and other movements (2) (12.2) - (12.2) Cost of services rendered during the year (a) Financial cost for the year (a) Cost of past services recognised (a) Cost for the period (a) Services paid for (3) (2.2) - (2.2) (0.6) - (0.6) Actuarial (Gains) losses for the period (4) (3.5) - (3.5) (0.4) - (0.4) Cost of past services un recognised (5) Closing (A)=(1)+(2)+ actuarial debt (a)+(3)+ (4)+(5) Value of cover assets Opening fair value of cover assets (6) Impact of changes to consolidation and other movements (7) Impact of the celling on cover assets recognised Amount of charges to be repaid recognised separately from assets Expected returns on assets (b) Contributions (b) Services provided (b) (0.1) - (0.1) Actuarial (Gains) losses for the period (b) (0.1) - (0.1) Closing fair value of cover assets (B)= (b)+(6)+(7) AMOUNTS RECOGNISED ON THE BALANCE SHEET AND INCOME STATEMENT 31 Dec Dec Commitment Commitment Total Commitment Commitment Total (in million) covered not covered covered not covered Closing actuarial debt Fair value of cover assets (3.2) - (3.2) (2.7) - (2.7) Cost of past services not recognised (0.5) - (0.5) (0.6) - (0.6) Liabilities recognised on the balance sheet Cost of services rendered during the year Financial cost for the year Return of assets (0.1) - (0.1) (0.1) - (0.1) Actuarial (Gains) losses recognised in the year (4.0) - (4.0) (0.3) - (0.3) Cost of past services not recognised Impact of reduction or liquidation of scheme Charge recognised on the income statement VARIATION IN NET LIABILITIES RECOGNISED ON BALANCE SHEET 31 Dec Dec Commitment Commitment Total Commitment Commitment Total (in million) covered not covered covered not covered Opening net liability Impact of changes to consolidation and other movements (12.3) - (12.3) Charge recognised on the income statement Services paid for (2.2) - (2.2) (0.6) - (0.6) Contributions paid Closing net liability The following actuarial assumptions were used: > discount rate: 3.3% at 31 st December 2005, and 3.7% at 31 st December 2006 > mortality table: INSEE TV table > inflation rate: 2% > retirement age: 60 in 2005 and The rates of wage increases, staff turnover and social security and tax contributions on salaries are specific to each of the Group s business lines. Pension payments are valued according to the probable determination method

60 Notes to the consolidated financial statements Moreover, the Group recognises long-term commitments in the form of long-service medals and jubilee payments. (in million) 31 Dec Dec Medals and jubilee payments Long term benefits Finally, in the light of current decisions taken by management, end of employment related benefits affecting the Group s employees are not covered by any provision. (in million) 31 Dec Dec Compensation for breach of employment contract, if any * Total not recognised * The commitment is valued inclusive of employer s charges. Company savings plan: treatment of discount At its meeting of 27 th March 2006, the Board of Directors of Icade decided to carry out two employee savings operations, one with and one without leverage. The reference price used for both operations was the opening price of the Icade share, i.e. that of 12 th April 2006, the date on which the Group was first listed. The increase in capital for this operation was carried out at an issue price 20% lower than the reference price. The notional cost of the non-transferability of the shares subscribed for, expressed as a percentage of the spot rate of the shares on the date when granted, is 10.46% for the non-leveraged operation. It is determined by using a borrowing rate of 4.20% which the company would have obtained on the date when it was floated on the stock market for a 5-year loan, repayable in fine, calculated on the basis of a 5-year swap rate of 3.80% and a margin of 0.40%. The forward sale price of the shares is determined by using the valuation model on the basis of market parameters. The cost of the non-transferability in the leveraged operation is determined by referring to a dividend / interest entitlement value which is estimated on the basis of the average price of European calls in the currency, with 5-year maturity. The benefit given to employees under this operation was recorded under personnel charges as at 31 st December 2006 at 1.8 million in respect of the non-leveraged operation and 1.4 million in respect of the leveraged operation. 29. STAFF Executives Non-executives Total staff Average levels Average levels Average levels 31 Dec Dec Dec Dec Dec Dec.2005 Develop (Property development) Invest (Property investment) Manage (Services) Housing market ,246 1,213 1,877 1,914 Develop (Property development) Invest (Property investment) Manage (Services) Commercial property market , Develop (Property development) Invest (Property investment) Manage (Services) Public-Health market Other Total staff 1,536 1,552 1,995 2,004 3,531 3, DESCRIPTION OF CURRENT STOCK-OPTION PLANS The Ordinary and Extraordinary General Meeting of Shareholders of 6 th March 2006 authorised the Board of Directors, within the framework of Article L and following of the Commercial Code, to offer all or some of the eligible salaried staff as well as all or some of the eligible corporate officers, subscription and/or purchase options on the shares of the company or companies in the Group which are affiliated to it in accordance with the conditions laid down in Article L of the Commercial Code. STOCK OPTION PLANS GRANTED IN 2006 Description of plans granted in 2006 Plan 1 Plan 2 Date granted Date of amendment of non-market related performance conditions Not applicable Number of options granted 430,240 * 764,070 Number of beneficiaries Acquisition period 3.8 years 4 years Exercice price Life of the plans 6 years 6 years 30% of options 30% of options Acquisition conditions other 40% of options with market with non-market No than four year s service with no performance performance related performance performance conditions conditions conditions conditions (*) Of which 286,730 subscription options granted to affiliated parties

61 Notes to the consolidated financial statements Performance conditions related to Plan 1: In addition to a four year service conditions from the date of granting, a maximum of 60% of the options will be acquired subject to achieving certain objectives. The acquisition of half of these conditional options (60% of the total options) is related to the realisation of market performance conditions: > 7.5% of the options will be acquired if the annual reference price, calculated in respect of any of the years ending 31 st December 2006, 31 st December 2007, 31 st December 2008 and 31 st December 2009 is times the flotation price or more. > 15% of the options will be acquired if the annual reference price, calculated in respect of any of the years ending 31 st December 2007, 31 st December 2008 and 31 st December 2009 is 1.15 times the flotation price or more. > 22.5% of the options will be acquired if the annual reference price, calculated in respect of any of the years ending 31 st December 2008 and 31 st December 2009 is times the flotation price or more. > 30% of the options will be acquired if the annual reference price, calculated in respect of the year ending 31 st December 2009 is 1.30 times the flotation price or more. The acquisition of the other half of these conditional options (60% of the total options) is related to the realisation of non-market related performance conditions: The non-market related performance conditions, which were initially dependent on gross operating income (EBIT), are now dependent on the NPGS rate by a decision of the Board of Directors meeting of 14 th December 2006 in order to take better account of the impact that certain growth operations could have. > 7.5% of the options will be acquired if the annual NPGS rate, calculated in respect of any of the years ending 31 st December 2006, 31 st December 2007, 31 st December 2008 and 31 st December 2009 is 6.30% or more. > 15% of the options will be acquired if the annual NPGS rate, calculated in respect of any of the years ending 31 st December 2007, 31 st December 2008 and 31 st December 2009 is 6.60% or more. > 22.5% of the options will be acquired if the annual NPGS rate, calculated in respect of any of the years ending 31 st December 2008 and 31 st December 2009 is 6.90% or more. > 30% of the options will be acquired if the annual NPGS rate, calculated in respect of the year ending 31 st December 2009 is 7.20% or more. Annual NGPS rate : Means, in respect of each financial year under consideration, the ratio, expressed as a percentage, between (i) the Company s Net Profit Group Share as shown in the consolidated accounts and certified by the latter in respect of the year in question and (ii) the Company s consolidated earnings as shown in the consolidated accounts and certified by the latter in respect of the year in question. Movements observed in the 2006 stock option plans To date, all the options are subscription options and the company has not acquired any shares with a view to allocating them to its employees within the framework of these plans. Valuation methodology: fair value of 2006 stock options Plan 1 Plan 2 Averaged weighted fair value of the option Probality of service 94.7% 89.5% Risk free interest rate 3.93% 3.93% Expected volatility 20.00% 20.00% Expected dividend rate 1.32% 1.32% Price of underlying stock Exercice price Model used Trinomial Trinomial The valuation model used is a trinomial model enabling market conditions, such as achieving a certain level of Annual Reference Price, to be included. With regard to the options with performance conditions related to the Net Profit Group Share (NPGS), an achievement probability in the region of 94% has been used. This probability will be adjusted before the end of the acquisition period at the latest according to the annual NPGS rates observed and Group expectations. In view of an inadequate price history, the volatility used is an index constructed from the historical volatilities of comparable companies by type of business. As at 31 st December 2006, the impact on charges of stock options granted in 2006 amounts to 1.2 million, of which 0.3 million in respect of affiliated parties. STOCK OPTION PLANS GRANTED IN 2007 Within the framework of the delegation received from the Ordinary and Extraordinary General Meeting of Shareholders of 6 th March 2006, on 14 th December 2006, the Board of Directors decided the terms of two new option plans which were granted on 8 th January Description of plans granted in 2007 Plan 1 Plan 2 Date granted Number of options granted 456,000 * 194,000 Number of beneficiaries Acquisition period 4 years 4 years Exercice price Life of the plans 6 years 6 years 40 % 30 % of options 30 % of options Acquisition conditions other of options with marke with non-market No than four year s service with no performance performance related performance performance conditions conditions conditions conditions (*) Of which 310,000 subscription options granted to affiliated parties

62 Notes to the consolidated financial statements Performance conditions related to Plan 1: In addition to a four year service conditions from the date of granting, a maximum of 60% of the options will be acquired subject to achieving certain objectives. The acquisition of half of these conditional options (60% of the total options) is related to the realisation of market performance conditions: > 7.5% of the options will be acquired if the annual reference price, calculated in respect of any of the years ending 31 st December 2007, 31 st December 2008, 31 st December 2009 and 31 st December 2010 is times the flotation price or more. > 15% of the options will be acquired if the annual reference price, calculated in respect of any of the years ending 31 st December 2008, 31 st December 2009 and 31 st December 2010 is times the flotation price or more. > 22.5% of the options will be acquired if the annual reference price, calculated in respect of any of the years ending 31 st December 2009 and 31 st December 2010 is 1.30 times the flotation price or more. > 30% of the options will be acquired if the annual reference price, calculated in respect of the year ending 31 st December 2010 is times the flotation price or more. The acquisition of the other half of these conditional options (60% of the total options) is related to the realisation of non-market related performance conditions: > 7.5% of the options will be acquired if the annual NPGS rate, calculated in respect of any of the years ending 31 st December 2007, 31 st December 2008, 31 st December 2009 and 31 st December 2010 is 6.60% or more. > 15% of the options will be acquired if the annual NPGS rate, calculated in respect of any of the years ending 31 st December 2008, 31 st December 2009 and 31 st December 2010 is 6.90% or more. > 22.5% of the options will be acquired if the annual NPGS rate, calculated in respect of any of the years ending 31 st December 2009 and 31 st December 2010 is 7.20% or more. > 30% of the options will be acquired if the annual NPGS rate, calculated in respect of the year ending 31 st December 2010 is 7.50% or more. Valuation methodology: fair value of 2007 stock options Plan 1 Plan 2 Average weighted fair value if the option Probability of service 93.82% 85.67% Risk free interest rate 3.95% 3.95% Expected volatility 20.00% 20.00% Expected dividend rate 1.32% 1.32% Price of underlying stock Exercice price Model used Trinomial Trinomial The valuation model used is a trinomial model enabling market conditions, such as achieving a certain level of Annual Reference Price, to be included. With regard to the options with performance conditions related to the Net Profit Group Share (NPGS), an achievement probability in the region of 90% has been used. This probability will be adjusted before the end of the acquisition period at the latest according to the annual NPGS rates observed and Group expectations. In view of an inadequate price history, the volatility used is an index constructed from the historical volatilities of comparable companies by type of business. As at 31 st December 2006, no impact from stock options granted in 2007 has been accounted for. Annual NGPS rate Means, in respect of each financial year under consideration, the ratio, expressed as a percentage, between (i) the Company s Net Profit Group Share as shown in the consolidated accounts and certified by the latter in respect of the year in question and (ii) the Company s consolidated earnings as shown in the consolidated accounts and certified by the latter in respect of the year in question. Movements observed in the 2007 stock option plans To date, all the options are subscription options and the company has not acquired any shares with a view to allocating them to its employees within the framework of these plans

63 Notes to the consolidated financial statements 31. OFF-BALANCE SHEET COMMITMENTS (in million) 31 Dec Dec Commitments received Sureties and guarantees received Unusued credit facilities Pledged securities Liability guarantees Other commitments received Total asset commitments Commitments made Pledged securities Sureties and guarantees given Commitments received on property reservations Liability guarantees granted Asset acquisition commitments Other commitments made Total liability commitments Other commitments relating to Icade Foncière des Pimonts On 26 th January 2006, Icade gave an irrevocable, fixed price promise of sale relating to 160,000 shares and 3,300 bonds redeemable in 58,113 shares in Icade Foncière des Pimonts, representing, after redemption of the BRS, 6.47% of the share capital of Icade Foncière des Pimonts. The beneficiary exercised the promise by notifying Icade of its decision to acquire all the securities and BRS on 15 th February To guarantee the keeping of the unilateral promise of sale given, Icade pledged securities and BRS to the benefit of FORUM. Other commitments relating to the acquisition of SIICInvest On 22 nd November 2006, the Crédit Foncier de France, a subsidiary of the Caisse d Epargne Group, concluded agreements with shareholders of Locindus representing a total of 26.8% of the capital and 26.9% of the voting rights of that company with a view to contributing their holding in Locindus to a voluntary takeover bid that the Crédit Foncier de France was about to launch on Locindus shares (the Bid ). These shareholders are Groupama/Gan the Prévoir Group, the Caisse des Dépôts, CNP Assurances and Scor. The Bid was priced at 37 per share, 2006 coupon attached, and is conditional on the Crédit Foncier de France securing, after the Bid, Locindus shares representing at least one third of the capital and voting rights of Locindus. The Bid was filed on 20 th December 2006 and declared compliant by the AMF on 9 th January In this operation, the Crédit Foncier de France is partnered by Icade. Subject to satisfying the suspensive conditions provided in their agreements, particularly obtaining a certificate of equity, the necessary authorisations and consulting the staff representative authorities, it is intended that, after the Bid, Locindus will transfer control of SIICInvest to Icade. The latter, 72.6% owned by Locindus, is a property company specialising in corporate property which opted for the SIIC scheme in July This company is set to become the SIIC vehicle of Icade Foncière Publique whose strategy is to manage assets leased to public users or stemming from public-private partnerships, particularly in the healthcare field. The price of this sale is to be determined on the basis of a valuation of SIICInvest equal to its liquidation net asset value published at the end of the half year preceding the date of signature of the contract of sale. In accordance with stock market regulations, the sale will be followed by a public offering of all the SIICInvest shares still not held by Icade on the date of filing, at the same price as that paid within the framework of the sale. The outcome of the Bid is not known at the 2006 closing date. 32. AFFILIATED PARTIES BENEFITS TO DIRECTORS AND THE MANAGEMENT COMMITTEE (in million) 31 Dec Dec Short term benefits (salaries, bonuses, etc.) * Post-employment benefits * Long term benefits * - - Share based payments Benefits recognised Benefits for termination of employment contract * Total not recognised Total * Figures include employer s charges. The share subscription options granted to affiliated parties are detailed under Section 30. RELATIONS WITH AFFILIATED PARTIES (in million) 31 Dec Dec Parent company Parent company Value of transactions Related receivables Related payables Guarantees given Guarantees received Other commitments received Provisions for depreciation of related receivables

64 Notes to the consolidated financial statements 33. SECTOR REPORT AT 31 ST DECEMBER 2006 HOUSING COMMERCIAL PROPERTY PUBLIC HEALTH (PH) OTHERS Housing Commercial Public health Intermarket property property market Develop Invest Manage internal Develop Invest Manage market internal Develop Invest Manage market internal internal (in million) (Prop. Dev.) (Prop. Inv.) (services) eliminations Sub-total (Prop. Dev.) (Prop. Inv.) (services) eliminations Sous-total (Prop. Dev.) (Prop. Inv.) (services) eliminations Sub-total Sub-total eliminations Total INCOME STATEMENT Consolidated earnings (0.8) (7.9) (0.7) , Inter-business sales (Group) - (0.2) (1.0) - (1.2) (0.1) (0.8) (4.1) - (5.0) - (0.1) (0.2) - (0.3) (38.8) - (45.3) - Total sales, including inter-business sales (Group) (0.8) (7.9) (0.7) ,372.5 GOI (0.2) (1.4) (0.1) 8.7 (9.7) Impairment on assets (3.0) (4.2) (0.3) - (7.5) - (1.2) (0.4) - (1.6) - - (1.3) - (1.3) - - (10.4) - Reversal of impairment on assets Profit/loss from disposals (0.3) (3.0) (0.4) Operating profit/loss (0.2) (3.1) (1.4) (0.1) 7.5 (11.4) of which share in affiliated companies (0.3) (0.3) (0.3) BALANCE SHEET Sector assets (3.1) 1, (1.4) 1, (0.1) ,597.9 Sector liabilities ,147.3 Holdings in related companies CASH FLOW Net appropriations for the year (1.1) ,0 0,2 0,1-2.3 (6.4) Tangible and intangible investments and investment properties (44,0) ,1 4,2 0, Disposal of tangible and intangible assets and investment properties - (53.1) (3.2) - (56.3) (53.2)

65 Notes to the consolidated financial statements SECTOR REPORT AT 31 ST DECEMBER 2005 HOUSING COMMERCIAL PROPERTY PUBLIC HEALTH (PH) OTHERS Housing Commercial Public health Intermarket property property market Develop Invest Manage internal Develop Invest Manage market internal Develop Invest Manage market internal internal (in million) (Prop. Dev.) (Prop. Inv.) (services) eliminations Sub-total (Prop. Dev.) (Prop. Inv.) (services) eliminations Sub-total (Prop. Dev.) (Prop. Inv.) (services) eliminations Sub-total Sub-total eliminations Total INCOME STATEMENT Consolidated earnings , Inter-business sales (Group) - - (0.4) - (0.4) (0.1) (1.0) ( 2.7) - (3.8) - - (0.8) - (0.8) (27.4) - (32.4) - Total sales, including inter-business sales (Group) ,211.6 GOI (1.0) (11.6) Impairment on assets (5.3) (12.5) (0.8) - (18.6) (0.3) (1.3) (3.4) - (5.0) (0.1) - (1.6) - (1.7) (0.0) - (25.2) - Reversal of impairment on assets Profit/loss from disposals (0.1) 27.0 (0.1) (0.1) (0.1) - (0.1) Operating profit/loss (2.3) (3.2) (7.5) of which share in affiliated companies BALANCE SHEET Sector assets , , , ,933.9 Sector liabilities Holdings in related companies CASH FLOW Net appropriations for the year (1.9) Tangible and intangible investments and investment properties Disposal of tangible and intangible assets and investment properties (0.0) (44.8) (0.2) - (45.0) - (36.3) - - (36.3) (81.3)

66 Notes to the consolidated financial statements RECONCILIATION OF INDICATORS WITH THE FINANCIAL STATEMENTS (in million) 31 Dec Dec SECTOR ASSETS Goodwill Intangible assets Tangible assets Investment properties 1, ,750.8 Stocks & work in progress Trade debtors and related accounts Amounts owed by customers (building contracts and off-plan sales) Miscellaneous receivables Total sector assets 3, ,933.9 Other non-sector assets Total assets 4, ,452.0 SECTOR LIABILITIES Provisions (current and non-current) Amounts due to customers (building contracts and off-plan sales) Trade creditors and related accounts Miscellaneous payables Total sector liabilities 1, Other non-sector liabilities 3, ,510.7 Total liabilities 4, ,452.0 This item primarily includes Icade s financial debts and capital and reserves. SECTOR INFORMATION BY GEOGRAPHIC AREA France Europe (in million) 31 Dec Dec Dec Dec Sector assets 3, , Sector liabilities 1, Tangible and intangible investments & investment properties EVENTS SUBSEQUENT TO THE CUT-OFF DATE No significant event needs to be mentioned. 35. INTERESTS IN JOINT VENTURES 31 Dec Non-current Current Non-current Current Capital and (in million) assets assets liabilities liabilities reserves Property investment companies Property development companies Other companies Dec Non-current Current Non-current Current Capital and (in million) assets assets liabilities liabilities reserves Property investment companies Property development companies Other companies Dec Dec (in million) Income Charges Income Charges Property investment companies 44.4 (35.5) 40.8 (31.3) Property development companies (185.9) (109.8) Other companies 25.8 (23.6) 20.5 (19.3) COMMITMENTS IN THE CAPITAL OF JOINT VENTURES 31 Dec Dec Average Icade s Average Icade s percentage capital percentage capital (in million) interest Share capital commitment interest Share capital commitment Property investment companies 33.33% % Property development companies 30.31% % Other companies 23.20% % POSSIBLE LIABILITIES IN JOINT VENTURES 31 Dec Dec Possible Icade s quota Possible Possible Icade s quota Possible liabilities share of liabilities related liabilities share of liabilities related incurred by liabilitiy for to Icade s liability incurred by liabilitiy for to Icade s liability Icade by its possible for liabilities Icade by its possible for liabilities interest in liabilities in of other interest in liabilities in of other (in million) joint ventures joint ventures joint ventures joint ventures joint ventures joint ventures Property investment companies Property development companies Other companies

67 Notes to the consolidated financial statements 36. SECURITIES VALUED BY THE EQUITY METHOD 31 Dec (in million) Gross value Impairment Net Share in net assets of companies consolidated by equity method as at 31 st Dec Share in profit/loss for the year (0.3) - (0.3) Dividends paid Impact of changes in the consolidation Other movements Share in assets of companies consolidated by equity method as at 31 st Dec (0.3) - (0.3) 37. SCOPE OF CONSOLIDATION % % % Company Legal Post direct interest Consol. interest name form SIREN code Location holding method Icade SA Boulogne-Billancourt FC Icade Foncier Développement SNC Boulogne-Billancourt FC - Paris Nord Est SAS Boulogne-Billancourt PC - HOUSING Icade Patrimoine Icade Patrimoine SA Boulogne-Billancourt FC Foncière Commerce Île-de-France SAS SAS Le Kremlin-Bicêtre FC Société Anonyme pour la Construction de Logements Economiques (SACLE) SAS Le Kremlin-Bicêtre FC Rental property companies Bas Longchamps SCI Le Kremlin-Bicêtre FC Côte d Azur SCI Le Kremlin-Bicêtre - - O D Auvergne SCI Le Kremlin-Bicêtre - - O De Normandie SCI Le Kremlin-Bicêtre FC Du Centre SCI Le Kremlin-Bicêtre - - O Du Rhône SCI Le Kremlin-Bicêtre FC Élysée Chatin SCI Le Kremlin-Bicêtre - - O Épinay-sur-Seine SCI Le Kremlin-Bicêtre FC Grange Rouge SCI Le Kremlin-Bicêtre - - O Granges (Les) SCI Le Kremlin-Bicêtre - - O Hameau de La Pradelle SCI Le Kremlin-Bicêtre - - O Lille Thumesnil SCI Le Kremlin-Bicêtre - - O % % % Company Legal Post direct interest Consol. interest name form SIREN code Location holding method Nocaze SCI Le Kremlin-Bicêtre FC Noroise (La) SCI Le Kremlin-Bicêtre FC Pays de Loire SCI Le Kremlin-Bicêtre FC Rillieux Crêpieux SCI Le Kremlin-Bicêtre FC Rosiers SCI Le Kremlin-Bicêtre - - O Sablons SCI Le Kremlin-Bicêtre - - O Saint-Étienne du Rouvray SCI Le Kremlin-Bicêtre FC Sarcelles SCI Le Kremlin-Bicêtre FC SCIC Résidences SCI Le Kremlin-Bicêtre FC Scopiam SCI Nice - - O Seloge SCI Le Kremlin-Bicêtre FC Vénissieux G des Terres des Vignes SCI Le Kremlin-Bicêtre FC Groupe Icade Capri Split by consolidation method Icade Capri (262 stés) Boulogne-Billancourt FC Icade Capri (44 stés) Boulogne-Billancourt PC Icade Capri (6 stés) Boulogne-Billancourt CEM Icade Administration de Biens Cabinet Villa SAS Paris FC Euro Campus SARL Puteaux FC GFF Institutionnels SAS Puteaux FC Icade Eurostudiomes SASU Puteaux FC Icade ADB (ex GFF) SASU Puteaux FC Montparnasse Services SARL Puteaux FC Services - Espagne Fincas Anzizu SARL B Barcelone FC Resa SA Folio Barcelone FC COMMERCIAL PROPERTY Icade Emgp 68 Victor Hugo SCI Saint-Denis FC Bassin Nord SCI Saint-Denis-la-Plaine PC Bati Gautier SCI Saint-Denis-la-Plaine FC CFI SAS Saint-Denis-la-Plaine FC

68 Notes to the consolidated financial statements % % % Company Legal Post direct interest Consol. interest name form SIREN code Location holding method Icade Emgp SA Aubervilliers FC Parc du Millénaire SNC Saint-Denis-la-Plaine FC Parc du Millénaire SCI Saint-Denis-la-Plaine FC PDM 1 SCI Saint-Denis-la-Plaine FC PDM 2 SCI Saint-Denis-la-Plaine FC PDM 3 SCI Saint-Denis-la-Plaine FC Serael SA Paris FC Séverine SCI Saint-Denis-la-Plaine FC Icade Foncière des Pimonts 1 Terrasse Bellini SCI Paris PC av des Champs-Élysées SCI Paris FC rue du Quatre-Septembre SCI Paris rue de Mogador SCI Paris FC avenue Friedland SCI Paris FC bld Haussmann SCI Paris FC Camille Desmoulins SCI Paris FC Icade Foncière des Pimonts SA Paris FC Messine Participations SCI Paris FC Morizet SCI Paris FC Pont-Neuf SCI Paris - - O Rive du Quinzième SCI Paris - - O Tour Descartes SAS Paris PC Villejuif SCI Paris FC - Icade Tertial 22/24 rue de Lagny SCI Paris PC Aménagement Croix de Berny SARL Boulogne-Billancourt FC Antony Parc II SCI Boulogne-Billancourt FC Espace Marceau SCI Paris PC Icade Tertial SAS Boulogne-Billancourt FC Les Portes d Arcueil A SNC Boulogne-Billancourt FC Les Portes d Arcueil B SNC Boulogne-Billancourt FC Les Portes d Arcueil C SNC Boulogne-Billancourt FC Montrouge Cap Sud SCI Vélizy Villacoublay PC - Neruda Fontanots SCI Boulogne-Billancourt FC Nice 400 Promenade des Anglais SCI Boulogne-Billancourt PC Odysseum 2 SCI Montpellier Cedex FC Paris Berthelot SCI Paris PC % % % Company Legal Post direct interest Consol. interest name form SIREN code Location holding method PB 31 Promotion SNC Boulogne-Billancourt PC Portes de Clichy SCI Boulogne-Billancourt PC - Toulouse Canceropôle SAS Paris PC - Villejuif Guipons SCI Boulogne-Billancourt FC - Property investment companies - Germany Icade Reit BV 1079 LH Amsterdam FC - Icade Reim Germany GmbH GmbH HRB B Hambourg FC - Icade Reim Ahrensdorf GmbH GmbH HRB Hambourg FC - Icade Reim Arnulfstrasse MK 8 GmbH GmbH HRB Hambourg FC - Icade Reim Arnulfstrasse MK 9 GmbH GmbH HRB Hambourg FC - Icade Reim Dachauer Strasse GmbH GmbH HRB Hambourg FC - Icade Reim Frankenallee GmbH GmbH HRB Hambourg FC - Icade Reim Friesenstrasse Haus 3 GmbH GmbH HRB Hambourg FC - Icade Reim Friesenstrasse Haus 4 GmbH GmbH HRB Hambourg FC - Icade Reim Goldsteinstrasse GmbH GmbH HRB Hambourg FC - Icade Reim Hohenzollerndamm GmbH GmbH HRB Hambourg FC - Icade Reim Industriestrasse (PRO 1) GmbH GmbH HRB Hambourg FC - Icade Reim Industriestrasse (PRO 2) GmbH GmbH HRB Hambourg FC - Icade Reim Industriestrasse (PRO 3) GmbH GmbH HRB Hambourg FC - Icade Reim Industriestrasse (PRO 4) GmbH GmbH HRB Hambourg FC - Icade Reim Kochstrasse GmbH GmbH HRB Hambourg FC - Icade Reim Mercedesstrasse GmbH GmbH HRB Hambourg FC - Icade Reim Rhinstrasse GmbH GmbH HRB Hambourg FC - Icade Reim Salzuferstrasse GmbH GmbH HRB Hambourg FC - Icade Reim Turlenstrasse GmbH GmbH HRB Hambourg FC - KABALO Grundstücks- Verwaltungsgesellschaft mbh GmbH HRB P Schonefeld FC - KABALO Grundstücks- Verwaltungsgesellschaft & Co KG HRA 3791 P Schonefeld FC - Icade Arcoba Icade Arcoba SAS Fontenay-sous-Bois FC GETCI SAS Lyon FC - Icade Conseil Icade Conseil SAS Paris FC Icade Expertise SAS Paris FC

69 Notes to the consolidated financial statements % % % Company Legal Post direct interest Consol. interest name form SIREN code Location holding method Icade PFM Icade Eurogem SAS Aubervilliers Cedex FC Facimalp SAS Saint-Priest FC Icade Gestec RS (ex Gestec RS Consultants) SAS Aubervilliers FC I Labor SNC Aubervilliers FC I Porta SAS SAS Aubervilliers FC Icade Gestion Tertiaire SASU Puteaux FC Icade Suretis SAS Aubervilliers FC Imop SAS Bordeaux Lac FC Isis Facilities SAS Bordeaux Lac FC Kléber FM SAS Aubervilliers Cedex FC Manutra SAS Aubervilliers Cedex FC - Manutra Sécurité SARL Aubervilliers Cedex FC - Normandial Services SAS Colombelles - - O Protertia FM SAS Paris PC Sthal SNC Melun PC Services Spain Imsi Eurogem Iberica SA Barcelone FC Inmobiliaria de la CDC España SA B Barcelone FC Services Italy Icade Italia (ex Immogest) SPA Milan FC Newreal SRL Rome FC Icade Italia Agency FC - Services Belgium Icade Benelux (ex Euris FM) SPRL 1080 Bruxelles FC PUBLIC-HEALTH % % % Company Legal Post direct interest Consol. interest name form SIREN code Location holding method Les Tovets SCI Boulogne-Billancourt - - FC Nord Promotion SNC Boulogne-Billancourt FC Sorif Icade Les Portes d Espagne SNC Boulogne-Billancourt PC Icade Foncière Publique Icade Foncière Publique SAS Boulogne-Billancourt FC - Centre des archives diplomatiques SCI Boulogne-Billancourt PC - Police de Meaux SCI Boulogne-Billancourt FC - SCI de la Vision SCI Boulogne-Billancourt PC - Les Tovets SCI Boulogne-Billancourt FC - Icade Setrhi Icade Setrhi-Sétaé SAS Limonest FC FC = Full Consolidation PC = Proportional Consolidation CEM = Consolidated by Equity Method O = Outgoing 38. LIST OF UNAPPLIED STANDARDS AND INTERPRETATIONS Date of adoption by the European Union Mandatory adoption date Amendments to IAS 1 presentation of financial statements: Capital information to be supplied 11 th January th January 2007 IFRS 7 Financial instruments: information to be supplied 11 th January th January 2007 All these standards, amendments to standards and interpretations adopted by the European Union which became compulsory subsequent to 31 st December 2006, were not applied by Icade in drawing up the consolidated accounts. Icade G3A Icade G3A SASU Boulogne-Billancourt FC Centre Est SNC Boulogne-Billancourt FC France Ouest Promotion SNC Boulogne-Billancourt FC Icade Docks de Paris SNC Boulogne-Billancourt FC - Icadleo SNC Boulogne-Billancourt FC Les bureaux de l Île de Nantes SNC Boulogne-Billancourt FC

70 AUDITORS' REPORT ON THE CONSOLIDATED ACCOUNTS Year ended 31 st December 2006 > Notes 1.22 and 1.23 explain the procedures for accounting for staff benefits and the Icade share subscription option plans. Notes 28 and 30 show the amounts accounted for in 2006 together with a description of the share subscription option plans. Our work consisted of assessing the information and assumptions used by general management in making all these estimates and reviewing the calculations made by the Group. The assessments thus made fall within the framework of our audit of the consolidated accounts, taken as a whole, and therefore contributed to the formation of our opinion as expressed in the first part of this report. Ladies and Gentlemen, As instructed by your General Meeting, we have audited the consolidated accounts of the company Icade for the year ended 31 st December 2006 as appended to this report. The consolidated accounts were produced by the Board of Directors. It is our responsibility to express an opinion on those accounts on the basis of our audit. 3. SPECIFIC CHECK In accordance with professional standards applicable in France, we have also checked the information given the Group s management report. We have no observations to make on their accuracy and consistency with the consolidated accounts. 1. OPINION ON THE CONSOLIDATED ACCOUNTS We carried out audit in accordance with professional standards applicable in France, which require that diligence is used to obtain reasonable assurance that the consolidated accounts do not contain any significant anomalies. An audit consists of examining the documentary evidence supporting the figures and information contained in the accounts by sampling. It also consists of assessing the accounting principles followed and any significant estimates made in producing the accounts as well as assessing their overall presentation. We consider that our audit provides a reasonable basis for the opinion expressed below. We certify that the consolidated accounts for the year are true and accurate and give a true picture of the assets, financial position and results of the Group consisting of the individuals and entities included in the consolidation. Given in Paris, on 12 th March 2007 The auditors SALUSTRO REYDEL MAZARS & GUÉRARD Member of KPMG International Denis Grison Isabelle Goalec Loïc Wallaert François Bernard 2. BASIS OF ASSESSMENT Pursuant to the provisions of Article L of the French Commercial Code relating to the basis of our assessment, we would bring the following points to your attention: > Notes 1.9 and 1.11 explain the accounting rules and methods for valuing tangible assets and investment properties. These assets are valued on an annual basis. > Note 1.17 explains the accounting rules and methods for accounting for construction and off-plan sales operations in accordance with the progress of earnings and profit method. Our work consisted of assessing the appropriateness of those accounting methods and the information supplied in the notes to the accounts and checking that they have been properly applied

71 Company annual accounts 31 st December 2006 (French standards) 1. FINANCIAL STATEMENTS Balance sheet Income statement KEY EVENTS DURING THE YEAR ACCOUNTING POLICIES AND METHODS CASH FLOW STATEMENT NOTES ON THE INCOME STATEMENT Operating profit/loss Financial profit/loss Extraordinary profit/loss Breakdown of profit tax Opéra Villejuif (94) 15,250 m 2 shon Icade Tertial: developer Icade Foncière des Pimonts: investor Architect: H. Godet 4. COMMENTS ON THE BALANCE SHEET Tangible and intangible assets Statement of depreciation and provisions Financial assets Statement of maturity of receivables Liquidities Variation in capital and reserves Provision for liabilities and charges Financial payables Statement of debt maturity Information regarding affiliated companies and equity interests OFF BALANCE SHEET COMMITMENTS OTHER INFORMATION Share capital Information relating to hedging instruments on loans Consolidation Remuneration of the Management and Administration bodies Table of staffing Table of subsidiaries and equity interests

72 Annual accounts 1. FINANCIAL STATEMENTS BALANCE SHEET ASSETS Amortisation Net value Net value (in K ) Gross value Provisions 31/12/ /12/2005 FIXED ASSETS Intangible assets Concessions, patents, licences 3,897 2,541 1, Total intangible assets 3,897 2,541 1, Tangible assets Land Buildings 3,994 2,461 1,533 1,602 Other 3,594 2,352 1, Assets under construction Total tangible assets 8,402 4,813 3,589 3,351 Financial assets Equity interests 867,324 13, , ,087 Related receivables and other investments 814,153 4, , ,078 Other 1,138-1, Total financial assets 1,682,615 17,568 1,665, ,795 TOTAL FIXED ASSETS 1,694,914 24,922 1,669, ,287 Advances & payments on account paid Trade debtors 15, ,253 7,932 Other receivables 4,893-4,893 20,044 Investments 273, ,895 38,994 Available assets 54,382-54, Deferred charges TOTAL CURRENT ASSETS 349, ,148 67,917 LIABILITIES (in K ) 31/12/ /12/2005 Capital and reserves Capital 711, ,112 Issue, merger and contribution premiums 519,185 4,918 Special revaluation reserve Legal reserve 22,653 18,157 Statutory reserves Other reserves 37, ,402 Loss carried forward - (3,095) Profit for the year 86,275 87,724 Statutory provisions - 1,360 Total capital and reserves 1,377, ,170 Provision for liabilities and charges Provisions for liabilities 12,720 21,637 Provisions for charges 4,579 4,704 Total provisions for liabilities and charges 17,299 26,341 Financial accounts payable Loans from credit institutions 360, ,717 Miscellaneous financial accounts payable 239, Operating accounts payable Trade creditors and related accounts 9,685 9,298 Tax and social security accounts payable 7,285 9,523 Accounts payable on fixed assets and related a/cs 4, Other accounts payable 3,696 9,019 Deferred income Total accounts payable 624, ,693 TOTAL ASSETS 2,044,065 24,925 2,019,140 1,042,204 TOTAL LIABILITIES 2,019,140 1,042,

73 Annual accounts INCOME STATEMENT (in K ) Year 2006 Year 2005 Operating income Earnings 40,907 30,836 Other operating income 15,453 10,009 Total operating income 56,360 40,845 Operating charges Purchases and stock variations Outside services 38,581 25,036 Tax, duty and similar payments 2,533 3,569 Salaries and wages 13,916 17,014 Social security contributions 5,781 6,618 Appropriations to amortisation 1, Appropriations to provisions for current assets Appropriations to provisions for liabilities and charges 360 1,159 Other charges Total operating charges 62,881 55,641 OPERATING PROFIT/LOSS (6,521) (14,796) Joint operations Profit of loss assumed 1,917 (876) Financial income Financial income from equity interests 95,079 98,182 Other interest and similar income 943 1,807 Reversal of provisions and transferred charges 2,169 31,041 Net income from disposal of investment securities 5,656 1,051 Total financial income 103, ,081 Financial charges Financial appropriations to amortisation and provisions 8,815 3,691 Interest and similar charges 11,895 5,468 Net charges on disposal of investment securities Total financial charges 21,203 9,159 FINANCIAL PROFIT/LOSS 82, ,922 Extraordinary income Extraordinary income from management transactions Extraordinary income from capital transactions 17,847 27,809 Reversal of provisions and transferred charges 9,296 14,319 Total extraordinary income 27,150 42,264 Extraordinary charges Extraordinary charges on management transactions 64 11,588 Extraordinary charges on capital transactions 7,514 33,593 Extraordinary appropriation to amortisation and provisions 63 11,252 Total extraordinary charges 7,641 56,433 EXTRAORDINARY PROFIT/LOSS 19,509 (14,169) Employee profit sharing scheme Profit tax 11,173 5,235 NET PROFIT/LOSS 86,275 87, KEY EVENTS DURING THE YEAR 2.1 Increase in capital and flotation > Icade s flotation on Section A of Eurolist by Euronext took place on 12 th April > This flotation was effected by issuing 26,499,537 shares and enabled Icade to proceed with an increase in capital of million (including issue premium). > During 2006, the Board of Directors of Icade granted 1,194,310 Stock Options. 2.2 Acquisitions and disposal of equity interests and other investments In 2006, Icade carried out the following transactions in equity interests: > Icade acquired from investors City North, Forum European Income and the general public, 42,461 Icade Emgp April 2004 BRS and 146,217 Icade Emgp November 2004 BRS. > Icade acquired 774,320 shares in Club Med from the Accor Group, representing 4% of the capital. > Icade sold the SCI de Lacq to the SNI. > Icade set up Icade Foncière Publique in the sum of 27 million and Icade Foncier Développement in the sum of 3.8 million. > Icade acquired the Dutch company Icade Reit BV in order to acquire a portfolio of property assets of the Daimler Chrysler group in Germany consisting of property and land reserves located in Frankfurt, Hamburg, Munich, Berlin and Stuttgart, making a total investment of 326 million. > In addition to the flotation, in order to finance the above mentioned acquisitions, Icade took out two new loans totalling 125 million. 2.3 Tax reassessments > In respect of tax reassessments relating to fiscally transparent property companies, Icade reversed a provision for liabilities of 7.9 million following a reduction in the adjustment granted by the tax authorities. 2.4 Distributions > Distributions amounted to million of which 102 million corresponding to an extraordinary distribution of reserves

74 Annual accounts 3. ACCOUNTING POLICIES AND METHODS The 2006 accounts were drawn up in accordance with the provisions of the General Accounting Plan and according to methods set out in the French Commercial Code and its enacting legislation. The options chosen by the company are explained below: 3.1 Tangible and intangible assets Tangible assets are valued at their acquisition cost. Depreciation is calculated according to the straight line method over the estimated useful life of each category of asset. The following rates were used: Buildings 2% Fixtures and fittings 10% Office furniture (2) 12.5% Vehicles 25% Office equipment (1) 20% IT equipment 20% Micro-computing equipment 33% General facilities, fixtures and fittings (2) 11.1% (1) 12.50% on equipment acquired before (2) The furniture, general facilities, fixtures and fittings of the Atrium building have been depreciated at a faster rate due to the move scheduled for 1 st July The component-based approach has no significant impact on Icade s accounts. Intangible assets (mainly software) are depreciated over 1 to 3 years. 3.2 Equity interests and other investments Equity interests and other investments appear on the balance sheet at their acquisition, contribution or subscription value. This value is brought into line with their value-in-use by means of a provision for depreciation, when this is less than the acquisition value. This value-in-use is essentially calculated according to the following criteria: the net book value adjusted by the company s profitability, which is calculated by referring to the company s value net of financial payables. The said company value is based on the discounted net cash flow method and, where applicable, on the comparables method. Minority holdings in listed companies are valued at the stock market value. Acquisition costs are directly accounted for under charges at the time of acquisition. 3.5 Financial instruments In order to hedge interest rate risks on credit facilities and loans, financial instruments, which are interest rate swap contracts (swaps) and conditional instruments (caps and floors) have been set up. The corresponding charges and income are booked to the income statement on a pro rata temporis basis. 3.6 Provisions for liabilities and charges A provision for liabilities and charges is recognised where there is an obligation burdening the company and it is likely or certain that it will lead to a charge without at least an equivalent counterparty and which, regardless of its amount or due date, cannot be accurately calculated. 3.7 Corporate commitments Retirement commitments and other long-term benefits are subject to an actuarial evaluation and are booked as provisions for charges. The annual cost of services rendered, the financial cost, actual services paid for, and actuarial variations, are all recognised. The rate of salary increases, staff turn-over and social security contributions are specific to Icade. Pensions are valued according to their probable determination method. The company accounts for all impacts relating to changes in actuarial assumptions during the then-current year in which the latter occur. Furthermore, commitments relating to the departure of certain executives and employees appear under off balance sheet commitments. 3.8 Operating income Essentially, operating income includes the invoicing of services and trademark royalties relating to services provided to the Group s subsidiaries, as well as the re-invoicing of charges borne on behalf of Group companies. 3.9 Financial income Dividends from subsidiaries and equity interests are booked as financial income on the date of the dividend payment resolution adopted at the General Meetings of the companies concerned. Financial income also includes interest on BRS and income from the disposal of investment securities Loan costs These are accounted for as a charge when the loan is taken out. 3.3 Receivables and payables Receivables and payables are accounted for at their nominal value. Receivables for which collection is considered to be doubtful or unlikely are subject to a provision calculated on the basis of the risk incurred. 3.4 Investment securities Investment securities appear on the balance sheet at their acquisition price. They are subject to a provision for depreciation where their realisation value is less than their net book value

75 Annual accounts 4. COMMENTS ON THE BALANCE SHEET TANGIBLE AND INTANGIBLE ASSETS Increases Reductions Acquisitions By sale Gross value creations or or Gross value (in K ) 31/12/2005 asset contributions decomissioning 31/12/2006 INTANGIBLE ASSETS 2,199 1,698-3,897 TANGIBLE ASSETS Land Buildings: - On own land 3, ,648 - Fixtures and fittings OTHER TANGIBLE ASSETS Facilities, fixtures and fittings Vehicles Furniture, office and IT equipment 1, ,894 FIXED ASSETS UNDER CONSTRUCTION Sub-total 7,426 1, ,402 GRAND TOTAL 9,625 3, ,299 STATEMENT OF DEPRECIATION AND PROVISIONS Depreciable assets Appropriations Reversals Straight line (Items removed (in K ) 31/12/2005 depreciation from assets) 31/12/2006 INTANGIBLE ASSETS 2, ,541 TANGIBLE ASSETS Buildings: - On own land 2, ,148 - Fixtures and fittings OTHER TANGIBLE ASSETS Facilities, fixtures and fittings Vehicles Furniture, office and IT equipment 1, ,802 Sub-total 4, ,813 Depreciation of fixed assets GRAND TOTAL 6,134 1, ,354 FINANCIAL ASSETS Increases Reductions Acquisitions By sale creations or or asset (in K ) 31/12/2005 asset contributions contributions 31/12/2006 FINANCIAL Equity interests 825,200 59,261 17, ,324 Related receivables and other investments 154, ,695 88, ,153 Other financial assets Deposits and guarantees ,138 GROSS 980, , ,245 1,682,615 Provisions for depreciation 9,601 8, ,568 NET 970, , ,498 1,665,047 The overall net increase in equity interests is essentially due to the companies Icade Foncière Publique (+ K 27,000), Icade Eurogem (+ K 10,415), Icade Patrimoine (+ K 7,614) and Icade Foncier Développement (+ K 3,800). The main variations in related receivables relate to companies Icade Reit BV (+ K 326,007), Icade Emgp (+ K 181,867), Icade Capri (+ K 70,000) and Icade Foncière Publique (+ K 21,800). The main variation in other investments is the acquisition of Club Med shares to the value of K 34,770. STATEMENT OF MATURITY OF RECEIVABLES > 5 years or no fixed (in K ) Gross < 1 year 1 to 5 years maturity FIXED ASSETS Related receivables and other investments 814, , , ,203 Loans Deposits and guarantees 1,138 1, CURRENT ASSETS Trade debtors 15,256 15, Advances, payments on account and credit notes receivable Personnel and related accounts Social security and other welfare organisations Value Added Tax 1,174 1, Miscellaneous debtors 3,386 3, DEFERRED CHARGES TOTAL 836, , , ,203 Details of income receivable - Accrued interest on BRS 7,347 - Accrued interest on subsidiary advances 1,009 - Customers- Invoices to be raised 2,582 - Miscellaneous ,

76 Annual accounts LIQUIDITIES Depreciation Net (in K ) Gross and provisions 31/12/2006 Investment securities (inc. AIND) 273, ,895 Bank balances and other liquid assets 54,382-54,382 TOTAL 328, ,277 Investment securities may be provisioned if the market value is less than the book value. They break down as follows: > Shares liquidity contract K 838 > UCITS K 177,639 > MTN K 12,455 > Other investment securities K 72,486 > Bonds K 10,366 > Accrued interest on investments K 111 The number and value of ICADE own shares comes to 15,300 shares and K 706. Amount Amount (in K ) as at 31/12/2006 as at 31/12/2005 Liquidities (gross assets) 328,277 39,615 Current overdrafts inc.accrued interest (liabilities) (1) (61,714) (32,135) Net available cash 266,563 7,480 (1) cf page 152: the accrued interest corresponds to accrued interest of K 156 on overdrafts and accrued interest of K 1,724 on loans. CAPITAL AND RESERVES Allocation of 2005 profit In accordance with the decision of the Ordinary General Meeting of 20 th March 2006, the 2005 profit of K 87,724 was allocated as follows: > Legal reserve K 4,495 > Dividends K 83,229 PROVISIONS FOR LIABILITIES AND CHARGES Reversals Groundle (in K ) Nature 31/12/2005 Appropriations for use reversals 31/12/2006 Provisions for liabilities Property management extraordinary 1, ,400 Subsidiaries' liabilities (1) financial 7, ,422 6,454 Tax liabilities (2) extraordinary 11, ,873 3,300 Disposal of subsidiaries extraordinary 1, ,566 Sub-total 21, ,295 12,720 Provisions for charges Pensions operating 4, ,417 Long-service medals and industrial tribunal disputes operating Miscellaneous charges operating Sub-total 4, ,579 TOTAL 26, ,356 17,299 (1) Subsidiaries liabilities The balance as at 31/12/06 mainly relates to the SCI Bas Longchamp in the sum of K 6,253 (2) Tax liabilities The provisions for tax liabilities relate to SCI Patrimoniales and the reversal of provisions as at 31/12/06 was made on the basis of the proposed settlement from the tax authorities. Allocation of profit/loss Other (in K ) 31/12/2005 Reserves Dividends Movements 31/12/2006 Capital (1) 510, , ,508 Issue, merger and contribution premiums (1) 4, , ,185 Special revaluation reserve Legal reserve 18,157 4, ,653 Statutory reserves Other reserves (2) 142, (105,118) 37,284 Profit/loss carried forward (2) (3,095) - - 3,095 - Profit/loss for ,724 (4,495) (83,229) - - Profit/loss for ,275 86,275 Statutory provisions 1, (1,360) - TOTAL 762,170 1 (83,229) 698,555 1,377,498 (1) Icade carried out an increase in capital of 26,499,537 shares for a nominal value of K 201,396 and an issue premium of K 514,267 (after charging K 17,263 of issue costs net of CT). (2) An extraordinary distribution of K 102,023 was made by deducting K 105,118 from Other reserves and K 3,095 from the Carried forward account

77 Annual accounts FINANCIAL PAYABLES Movements in 2006 Net amounts Balance (in K ) as at 31/12/2005 Additions Repayments as at 31/12/2006 Loans and debts with credit institutions Loans from credit institutions (1) 191, ,000 21, ,288 Banks (credit balances) 32,011 29,703-61,714 Accrued interest 1,139 1,880 1,139 1,880 Cash instruments - 1,200-1,200 Sub-total 224, ,783 22, ,082 Miscellaneous financial payables Deposits and guarantees received Group current accounts (2) - 239, ,430 Sub-total , ,574 TOTAL 224, ,237 22, ,656 (1) These loans are hedged (cf. note 8 ). The main guarantees given to the banks on these loans consist of pledges of Icade Emgp securities to the value of K 20,773. (2) The Group current accounts relate to companies included in the cash flow centralisation convention. INFORMATION REGARDING AFFILIATED COMPANIES AND EQUITY INTERESTS This is set out in the following summary: Companies to which the company is connected (in K ) Affiliated companies by an equity interest ASSETS Equity interests 866, Receivables related to equity interest 772,866 - Trade creditors and related accounts 12,122 - Other receivables 3,108 - LIABILITIES Trade creditors and related accounts 1,230 - Other payables 242, FINANCIAL Income from equity interests 80, Other financial income 14,220 - Financial charges 2,636 - STATEMENT OF DEBT MATURITIES (in K ) Gross < 1 year 1 to 5 years > 5 years Loans and debts with credit institutions 360,082 88,258 83, ,703 Loans and related advances (Group company) 239, , Trade creditors and related accounts 9,685 9, Personnel and related accounts 3,559 3, Social security and other welfare organisations 3,236 3, Corporation tax Other tax, duty and similar payments Supplier of fixed assets 4,007 4, Other payables 3,696 3, Deferred income TOTAL 624, ,520 83, ,703 Details of charges payable - Accrued interest on loans and financial payables 1,724 - Tax and social security payables 5,866 - Suppliers - Invoices not received 9,445 - Miscellaneous ,

78 Annual accounts 5. CASH FLOW STATEMENT (in K ) 31/12/ /12/2005 Operating activities Net profit 86,275 87,724 Elimination of charges and income not impacting on cash position and not related to the business - Amortisation and provisions (1,214) (28,082) - Capital gains or losses on disposals (10,333) 5,785 - Receivables written off 2, CT on IPO 8,630 - Variation in working capital requirement 103 (1,067) NET CASH FLOW FROM OPERATING ACTIVITIES 85,597 64,995 Investment activities Tangible and intangible assets (2,616) (715) Disbursements for acquisition or increase (2,676) (715) Receipts from disposals 60 - Investments (39,655) (140,865) Disbursements for acquisition (55,255) (168,672) Receipts from disposals 15,600 27,807 Financial receivables (649,965) (15,811) Disbursements (738,960) (46,716) Receipts 88,995 30,905 NET CASH FLOW FROM INVESTMENT ACTIVITIES (692,236) (157,391) Financing activities Variation in capital 707, Variation in financial payables 343,889 36,809 Dividends paid (185,200) (20,136) NET CASH FLOW FROM FINANCING ACTIVITIES 865,722 16,748 VARIATION IN CASH POSITION 259,083 (75,648) Cash position at start of year 7,480 Variation over the year 259,083 Net cash position at end of year 266, NOTE ON THE INCOME STATEMENT OPERATING PROFIT/LOSS Earnings Nature of income (in K ) 31/12/ /12/2005 Services to network (central services) 24,119 19,800 Personnel made available 2,578 4,716 Miscellaneous services provided 14,210 6,320 TOTAL 40,907 30,836 Other operating income Nature of income (in K ) 31/12/ /12/2005 Other income Trademark royalties 11,286 8,147 Rent 3, Miscellaneous income 484 1,073 TOTAL 15,244 9,994 The change in operating income is mainly due to the increase in re-invoicing central services and other services provided. FINANCIAL PROFIT/LOSS The financial profit of K 82,644 breaks down as follows: > dividends: K 80,807 > other income related to equity interests: K 14,261 > interest related to loans: K 7,183 EXTRAORDINARY PROFIT/LOSS The extraordinary profit of K 19,509 breaks down as follows: > capital losses on disposal of assets: K 391 > capital gains on disposal of asset: K 10,725 > reversal of provisions for tax inspections: K 7,873 BREAKDOWN OF PROFIT TAX Net profit/ Breakdown (in K ) Pre-tax profit/loss Tax loss after tax Current pre-tax profit/loss 77,940 (10,797) 67,143 Extraordinary profit/loss 19,509 (377) 19,132 Book profit/loss 97,449 (11,174) 86,

79 Annual accounts 7. OFF BALANCE SHEET COMMITMENTS (in K ) Affiliated co's Other Commitments made Sureties and guarantees Bank guarantees for the property sector 83,041 - Bank guarantee for the SCI Construction du Bassin Parisien Other guarantees: - Eurostudiomes 1,215 - Liability vis-a-vis third parties in partnerships 25,488 - Asset and liability guarantee provided to the CDC 25,298 - Visa Entreprises 198 SFCI no ceiling SA rue du Hameau no ceiling SDFM liability guarantee provided during the sale of SDFI - 4,250 SAS Cap Sud completion bond 23,739 - Commitments to employees and executives - 3,373 Miscellaneous 39 9 TOTAL 159,123 7,830 Commitments received Acquisition of equity interests - 1,260 CDC (Foncière des Pimonts) - 5,000 Liability guarantee CDC (Snc Locatrium) for information TOTAL - 6,260 Other commitments relating to Icade Foncière des Pimonts On 26 th January 2006, Icade gave an irrevocable, fixed price promise of sale relating to 160,000 shares and 3,300 bonds redeemable in 58,113 shares in Icade Foncière des Pimonts, representing, after redemption of the BRS, 6.47% of the share capital of Icade Foncière des Pimonts. The beneficiary exercised the promise by notifying Icade of its decision to acquire all the securities and BRS on 15 th February To guarantee the keeping of the unilateral promise of sale given, Icade pledged securities and BRS to the benefit of Forum.. Other commitments relating to the acquisition of SIICInvest On 22 nd November 2006, the Crédit Foncier de France, a subsidiary of the Caisse d Epargne Group, concluded agreements with shareholders of Locindus representing a total of 26.8% of the capital and 26.9% of the voting rights of that company with a view to contributing their holding in Locindus to a voluntary takeover bid that the Crédit Foncier de France was about to launch on Locindus shares (the Bid ). These shareholders are Groupama/Gan, the Prévoir Group, the Caisse des Dépôts, CNP Assurances and Scor. The Bid was priced at 37 per share, 2006 coupon attached, and is conditional on the Crédit Foncier de France securing, after the Bid, Locindus shares representing at least one third of the capital and voting rights of Locindus. The Bid was filed on 20 th December 2006 and declared compliant by the AMF on 9 th January In this operation, the Crédit Foncier de France is partnered by Icade. Subject to satisfying the suspensive conditions provided in their agreements, particularly obtaining a certificate of equity, the necessary authorisations and consulting the staff representative authorities, it is intended that, after the Bid, Locindus will transfer control of SIICInvest to Icade. The latter, 72.6% owned by Locindus, is a property company specialising in corporate property which opted for the SIIC scheme in July This company is set to become the SIIC vehicle of Icade Foncière Publique whose strategy is to manage assets leased to public users or stemming from public-private partnerships, particularly in the healthcare field. The price of this sale is to be determined on the basis of a valuation of SIICInvest equal to its liquidation net asset value published at the end of the half year preceding the date of signature of the contract of sale. In accordance with stock market regulations, the sale will be followed by a public offering of all the SIICInvest shares still not held by Icade on the date of filing, at the same price as that paid within the framework of the sale. The outcome of the Bid is not known at the 2006 closing date.. Other undertakings relating to the acquisition of assets in Germany Icade concluded several transactions with DaimlerChrysler Entwicklungsgesellschaft fur Immobilien mbh (DCI), approved by the DCI Supervisory Board in July Icade undertakes to acquire property assets from DCI worth a total of 4.5 million in the first half of OTHER INFORMATION SHARE CAPITAL Icade's share capital, in the sum of 711,508,000, consists of 93,619,537 ordinary shares held by the following companies: Caisse des dépôts 60,576,452 shares, i.e 64.70%, Other shareholders 33,043,085 shares, i.e 35.30%. COMMITMENTS RELATING TO HEDGING INSTRUMENTS ON LOANS Swap Maturity Bide rate Notional 31/12/06 IXIS CIB swap 8/11/2008 E12R pf % (capped at 4.50% and floored at 2.09% ) 7,966 BNP Paribas swap 30/12/2007 E12R pf (capped at 3.60% with click at 4.65% and floored at 2.23% ) 7,667 HSBC-CCF swap 29/06/ % 7,000 BNP Paribas swap 16/03/ % 10,000 Ixis CIB swap 8/05/2008 E12R pf (capped at 4.10% ) 10,386 Dexia CL swap 2/01/ % 8,250 Dexia CL swap 1/12/ % 9,600 HSBC-CCF swap 28/11/ % 14,400 HSBC-CCF swap 16/11/ % 2,972 BNP Paribas swap 1/11/ % 29,250 BNP Paribas swap 9/11/ % 18,000 CALYON swap 5/12/ % 50,000 CALYON swap 15/11/ % 25,000 HSBC-CCF swap 5/12/ % 20,000 The fair value of swaps as at 31/12/06 is K 2, % of variable rate debt is hedged using derivatives

80 Annual accounts CONSOLIDATION Icade's consolidated accounts are consolidated in those of the Caisse des dépôts. REMUNERATION OF MANAGEMENT AND ADMINISTRATION BODIES > Management bodies: this information has not been provided as it would entail divulging information on individual salaries > Administration bodies: K 114 of Directors' fees were paid. TABLE OF STAFFING LEVELS The level of salaried staffing as at 31 st December 2006 was as follows: Non PMAD Employees company employees made available Category (number) (number) Total Executives (and similar) Employees NET TABLE OF SUBSIDIARIES AND EQUITY INTERESTS Capital and Quota Book value of Profit/loss Obs. reserves share of shares held for last (date of last exc. capital Loans & Guarantees year Dividends balance (in K ) Capital capital held in % Gross Net BRS given Earnings (+ or -) received sheet) SUBSIDIARIES (more than 50% held) SASU Icade Capri 24,624 69, ,732 68,732 70,000-60,436 40,333 23, SAS Icade Eurogem 1,000 (1,099) ,971 23, ,730 (6,472) SAS Icade Foncière Publique 27, ,000 27,000 21,800-4, SASU Icade Conseil et Ass , ,131 13, ,158 2,343 2, SASU Icade AdB 11,822 17, ,702 9,702 1,000-31,903 (10,336) SASU Icade G3A 8,911 8, ,557 7, ,705 7,166 3, SAS Icade Arcoba 3, ,637 4, , SNC Icade Foncière Développement 3,800 (910) 100 3,800 3,800 3, (910) SCI La Noroise 3,000 (1,808) 100 3, ,323 1, SCI SCIC-Résidences 1, ,816 1, SA Immobilaria de la Caisse des dépôts España 1, ,207 2,207 6,656-1, SCI Des Pays de Loire 1, ,387 1, SA Maisons Terres de France (in liquidation) 1, ,068 (0) SASU Icade Gestion Tertiaire 1, ,000 1,000 1,500-10, SCI Venissieux Les Grandes Terres des Vignes 50 (253) SAS Sacle (99) SCI De Normandie 589 (118) SCI De Rillieux Crépieux Les Chartoux (39) SPA Icade Italia SpA 120 (240) ,370-4, SAS Icade Tertial Régions

81 Annual accounts Capital and Quota Book value of Profit/loss Obs. reserves share of shares held for last (date of last exc. capital Loans & Guarantees year Dividends balance (in K ) Capital capital held in % Gross Net BRS given Earnings (+ or -) received sheet) GmbH Icade Reim Deutschland SCI Saint-Étienne du Rouvray BV Icade Reit , , SCI Domaine de Premol SCI Seloge 504 (850) , SCI Nocaze SA Icade SCI Fontaine-au-Roy SNC SNC Capri Danton SCI Les Bas Longchamps 0 (6,362) (53) SCI Les Sablons Sprl Icade Benelux SCI Les Rosiers SA Icade Patrimoine 119, , , ,954-68, ,151 62,499 29, SNC Locatrium SCI La Sucrière SCI Des Muriers SII Icade Foncière des Pimonts 252, , , , ,624-37, ,190 7, SCI Luzoue à Mourenx SII Icade Emgp 16, , , , ,097-65,191 2,814 8, SCI Du Rhône 2,171 (703) SCI Antony Parc Capital and Quota Book value of Profit/loss Obs. reserves share of shares held for last (date of last exc. capital Loans & Guarantees year Dividends balance (in K ) Capital capital held in % Gross Net BRS given Earnings (+ or -) received sheet) SCI Elysée Chatin BFM Facilities Management Praha Facilities Management 1, Equity interests (10 to 50 % held) SAS Icade Pierre pour Tous SNC PB 3I Promotion SCI SCI de la Vision 1,500 (40) (9) SCI Centre des Archives Diplomatiques 1,440 (1) SCI Hôtel de Police de Strasbourg SCI Résidence de Sarcelles 201 (348) SA S.N.I. 151,

82 AUDITORS GENERAL REPORT Annual accounts Year ended 31 st December 2006 Ladies and Gentlemen, As instructed by your General Meeting, we hereby present our report for the year ended 31 st December 2006, on: > The audit of the annual accounts of the company Icade, as appended hereto, > The basis of our assessment, > The specific checks and information required by law. The annual accounts were produced by the Board of Directors. It is our responsibility to express an opinion of these accounts on the basis of our audit. 1. OPINION ON THE ANNUAL ACCOUNTS We carried out our audit in accordance with professional standards applicable in France, which require that diligence is used to obtain reasonable assurance that the annual accounts do not contain any significant anomalies. An audit consists of examining the documentary evidence supporting the figures and information contained in the accounts by sampling. It also consists of assessing the accounting principles followed and any significant estimates made in producing the accounts as well as assessing their overall presentation. We consider that our audit provides a reasonable basis for the opinion expressed below. We certify that, in the light of French accounting policies and methods, the annual accounts are true and accurate, and give a true picture of the operations carried out during the past year, and of the financial position and assets of the company at the end of that year. 3. SPECIFIC CHECKS AND INFORMATION In accordance with professional standards applicable in France, we have also carried out the specific checks required by law. We have no comments to make on: > The accuracy and consistency with the annual accounts of the information given in the Board of Directors management report and the documents sent to shareholders regarding the financial position and the annual accounts, > The accuracy of the information given in the management report relating to the remuneration and benefits paid to corporate officers as well as undertakings given in their favour on the occasion of taking up, leaving or changing office or subsequently. In accordance with the law, we are satisfied that the various information relating to holdings and control as well as the identity of the holders of the capital and voting rights has been provided to you in the management report. 2. BASIS OF ASSESSMENT Pursuant to the provisions of Article L of the French Commercial Code relating to the basis of our assessment, we would bring the following point to your attention: Note 2 of chapter 3 of the notes explains the accounting policies and methods relating to the valuation of equity interests. We have verified the appropriateness of the accounting policies and methods described, and the information provided in the notes to the accounts, and we are satisfied that they have been correctly applied. The assessments thus made fall within the framework of our audit of the annual accounts, taken as a whole, and therefore contributed to the formation of our opinion as expressed in the first part of this report. Given in Paris, on 12 th March 2007 The auditors SALUSTRO REYDEL MAZARS & GUÉRARD Member de KPMG International Denis Grison Isabelle Goalec Loïc Wallaert François Bernard

83 AUDITORS SPECIAL REPORT ON THE STATUTORY AGREEMENTS AND COMMITMENTS Year ended 31 st December 2006 Ladies and Gentlemen, In our capacity as auditors of your company, we present our report on the statutory agreements and commitments. 1. AGREEMENTS AND COMMITMENTS AUTHORISED IN THE YEAR In accordance with Article L of the Commercial Code, we have been advised of the agreements and commitments subject to the prior authorisation of your Board of Directors. It is not our duty to ascertain the possible existence of other agreements or commitments but to inform you, on the basis of the information given to us, of the essential characteristics and terms of those of which we have been advised, without having to give an opinion on their appropriateness or validity. It accordance with Article 92 of the Decree of 23 rd March 1967, it is your duty to assess the interest attached to the conclusion of these agreements and commitments with a view to approving them. We have carried out our work in accordance with professional standards applicable in France which require that diligence is used to verify the consistency of the information given to us with the basic documents from which it stemmed. Guarantee contract : Acceptance of trading of your company s shares on the Eurolist by Euronext Paris A guarantee contract was concluded between Icade and the Caisse des Dépôts et Consignations of the one part, and financial establishments of the other, relating to the acceptance of trading of your company s shares on the Eurolist by Euronext Paris. Commission under this contract amounts to 17.3 million. Directors concerned: Messrs. Marc-Antoine Autheman, Edmond Alphandéry, Jérôme Gallot and the Caisse des Dépôts et Consignations (represented by Mr. Dominique Marcel). Board of Directors meeting of 11 th April Sale of SCI de Lacq shares to the SNI On 16 th October 2006, your company sold all the shares in the SCI de Lacq to the SNI for 10 million. Director concerned: The Caisse des Dépôts et Consignations (represented by Mr. Dominique Marcel). Board of Directors meeting of 24 th May Acquisition of Club Méditerranée shares from ACCOR In June 2006, your company acquired 4% of the shares of Club Méditerranée from Accor for 34.8 million, and concluded an agreement with certain shareholders (specifically Accor) providing for the establishment of an industrial agreement in the property field between Icade and Club Méditerranée. In September 2006, no further action had been taken with regard to this industrial agreement and your company exited the shareholders agreement. Directors concerned: Messrs. Francis Mayer, Dominique Marcel and Etienne Bertier. Board of Directors meetings of 12 th June 2006 and 19 th September Payment for the study on the proposed purchase of Icade Emgp and Icade Foncière des Pimonts BRS Your Board of Directors instructed Mr. Marc-Antoine Autheman to assist it within the framework of the proposed purchase, by Icade and/or one of the issuers, of the BRS issued by Icade Emgp and Icade Foncière des Pimonts. Payment for this instruction amounted to K 41.8 excluding tax. Board of Directors meeting of 19 th September Commitment relating to the acquisition of a block of shares representing 51% of the capital and voting rights of the company SIICInvest On 16 th November 2006, Icade concluded an outline agreement with the Crédit Foncier de France (CFF) under the terms of which Icade will acquire, from the company Locindus, a block of shares representing 51% of the capital and voting rights of its subsidiary, the company SIICInvest, if the public offering launched by CFF on Locindus is a success. Director concerned: Mr. François Pochard Board of Directors meeting of 14 th December

84 2. AGREEMENTS AND COMMITMENTS APPROVED IN PREVIOUS YEARS, CONTINUING INTO THE FINANCIAL YEAR Pursuant to the Decree of 23 rd March 1967, we have also been informed that the following agreements and commitments approved in previous years continued into last year. Payment of severance pay and taking out of an insurance policy for the benefit of your Chairman and Managing Director In the event of leaving office (except for serious negligence), your Chairman and Managing Director will receive severance pay corresponding to twice his gross overall remuneration (fixed and variable) received in the twelve months preceding the dismissal decision. A corporate officer s unemployment guarantee insurance policy has also been taken out for the benefit of your Chairman and Managing Director at a cost of K 6 in Guarantees granted to members of GIE Icade Patrimoine Within the framework of Icade s disposal of its holding in Scic Gestion Ile-de-France, an assets and liabilities guarantee covering any litigation and risks arising before 31 st December 1997 has been granted. As at 31 st December 2006, the provisions set up in this regard amount to 316 K. Mandate conferred on your company by the Nord-Pas-de-Calais Region Within the framework of the reorganisation of Scet, your company has taken over a mandate, originally conferred on Scet by the Nord-Pas-de-Calais Region, relating to the refurbishment of four grammar schools. The corresponding remuneration in 2006 is K 138 and the net impact is a charge of K 15 after taking sub-contracting into account. Paris La Défense, 12 th March 2007 The auditors SALUSTRO REYDEL MAZARS & GUÉRARD Member of KPMG International Denis Grison Isabelle Goalec Loïc Wallaert François Bernard CHAIRMAN S REPORT ON CORPORATE GOVERNANCE AND INTERNAL AUDITING Articles L of the French Commercial Code Article L of the Commercial Code compels the Chairman of the Board of Directors of any Société Anonyme with its head office in France and making public issues to report on the conditions for preparing and organising the work of the Board as well as the internal auditing procedures set up by the company. Without prejudice to the provisions of Article L , the report should also mention any limitations that the Board of Directors places on the powers of the Managing Director. Pursuant to these articles, this report has been produced as a result of work carried out by management in conjunction with the Audit Committee. 1. OPERATION OF THE BOARD OF DIRECTORS: conditions for preparing and organising the work of the Board of Directors 1.1 Composition of the Board and general management The company s Board of Directors currently consists of eight members, including two independent directors: Christian Peene and Marc-Antoine Autheman. A director s period of office is six years, renewable. Directors may not be older than 70 years of age. No directors mandates expire at the end of the General Meeting called to rule on the accounts for The list of directors was as follows at the beginning of 2006: > Edmond Alphandéry (CNP Assurances) > Marc-Antoine Autheman > Étienne Bertier (Icade) > Caisse des dépôts ( CDC ) represented by Dominique Marcel > Jérôme Gallot ( CDC ) > Thierry Gaubert (Caisse nationale des caisses d épargne) > Christian Peene (CMP Consultants) > François Pochard (Ixis Aew Europe) > Jean-Louis Subileau (Saem Val-de-Seine)

85 Chairman s report on corporate governance and internal audit During 2006, the composition of the Board was confirmed or amended as follows: > The Ordinary General Meeting of 20 th March 2006 ratified the appointment of the Caisse des Dépôts et Consignations, co-opted as director replacing the Caisse des Dépôts-Développement (C3D) by the Board of Directors meeting of 15 th December 2005, > It also placed on record that the mandate of Christian Peene had expired and decided to renew it for six years. This new mandate will therefore expire at the end of the Ordinary General Meeting called in 2012 to rule on the accounts for the year ended 31 st December 2011, > Furthermore, on 24 th May 2006, the Board of Directors acknowledged the resignation of two directors: Jean-Louis Subileau and Thierry Gaubert. Francis Mayer (Caisse des Dépôts) and Pascal Duhamel (Morgan Stanley) respectively were co-opted by the Board on the same date. They are both required to remain in office for the remaining term of the mandate of their predecessors, i.e. until the end of the Ordinary General Meeting called in 2008 to rule on the accounts for the year ended 31 st December > On 14 th December 2006, the Board noted the death of Francis Mayer and paid their respects to him. The Board has not replaced him. The nature of the other mandates exercised by the directors is described in the management report. 1.2 Calling and preparing for Board of Directors meetings. The bye-laws provide that notices of meeting are issued by any means and letters are signed by the Secretary of the Board of Directors. Before every meeting, each director received a dossier enabling him to make a decision at the meeting backed by all necessary information. Other than in an emergency, this dossier is sent to him one week before the date of the meeting, but may be subsequently supplemented by any other document capable of helping him to reach a decision. The company gives the directors all relevant information about it. This is done under the seal of confidentiality. Any director may, at any time, ask the Chairman of the Board of Directors for any document regarding the company. 1.3 Frequency of meetings The Board met eight times during 2006, on the following dates: > 3 rd February 2006 (closing of the company accounts, consolidated accounts and management report for the year ended 31 st December 2005, notice of meeting and preparation for the Ordinary General Meeting, presentation of the proposed offer reserved for employees, notice of meeting and preparation for the AGM); > 27 th March 2006 (approval of the company s flotation procedure, establishment of the price per share range within the framework of the market offer, proposed increase in capital within the framework of the market officer, over-allocation option and offer reserved for employees, approval of the operation memo., finalisation of the provisional management documents); > 11 th April 2006 (report to the Board on the progress of the proposed flotation of the company s shares, increase in capital within the framework of the market officer, over-allocation option and offer reserved for employees, approval of the draft guarantee contract, approval of the draft liquidity contract); > 24 th May 2006 (co-option of two new directors replacing two resigning directors, report to the Board on the first weeks of listing, definitive realisation of the increase in capital in favour of employees, report of the Appointments and Remuneration Committee meeting of 2 nd May 2006, report of the Investments Committee meeting of 24 th May 2006); > 12 th June 2006 (investment and partnership proposals, acquisition proposals and proposed disposal); > 29 th June 2006 (approval of plans and allocation of options, update on the share buy-back programme and increase in resources allocated to the liquidity contract); > 19 th September 2006, (closing of the 2006 half-yearly consolidated accounts, business update, update on BRS); > 14 th December 2006 (review of company outlook, report on proposed acquisitions, report on the redemption of Icade Emgp Brs, amendment to the option plan and approval of the changes in the organisation of internal auditing). Minutes of the Board of Directors meetings are produced at the end of each meeting and given to the directors for approval before the following meeting. 1.4 Committees of the Board of Directors Out of a desire for transparency and public information, the company has introduced a set of measures based on the recommendations of the report of the working party chaired by Daniel Bouton to improve corporate governance, the conclusions of which were presented to the public on 23 rd September 2002, ranging from the activities of the various committees described below to the appointment of independent members to the Board of Directors as described in that report. Three specialist committees thus met in 2006: an audit committee, an appointments and remuneration committee and an investment committee. The committees have consultative powers and operate under the responsibility of the Board of Directors. They make recommendations to the Board of Directors. The committees consist of at least three members, individual directors of permanent representatives appointed by the Board of Directors. The members are appointed personally and may not be represented. For this year, committee members receive an additional 1,500 in director s fees per meeting; the Chairman of each committee receives an additional 1,700 per meeting. The duties, composition and operation of these committees are described in the AMF reference document. The composition and number of meetings held during 2006 are given below:

86 Chairman s report on corporate governance and internal audit Audit Committee The Audit Committee consists of: Christian Peene, Chairman, Marc-Antoine Autheman and Jérôme Gallot. The auditors, members of the Finance Department and members of the Audit Department also attend meetings. They met four times during the year: > 3 rd February 2006 to examine the accounts for the year ended 31 st December 2005; > 17 th May 2006 to give an update on 2006 business and progress of the audit; > 14 th September 2006 to examine the company s accounts as at 30 th June 2006 and the company s internal auditing mechanism; > 12 th December 2006 to examine developments in business prospects and changes in the organisation of internal auditing. Appointments and Remuneration Committee This committee currently comprises Edmond Alphandéry, Chairman, Jérôme Gallot, François Pochard and Etienne Bertier. The committee met three times during Investment Committee This committee currently comprises Etienne Bertier, Chairman, Edmond Alphandery, Dominique Marcel and Christian Peene. The committee met four times during INTERNAL AUDITING PROCEDURES 3.1 Objectives of Group internal auditing The internal auditing procedures in force in the company and the Group are designed: > On the one hand, to ensure that acts of management or realisation of operations as well as the behaviour of staff fall within the framework set out by the guidelines on company activities issued by the corporate bodies, applicable laws and regulations and in-house values, standards and rules, > On the other hand, to check that the accounting, financial and management information given to the company s corporate bodies accurately reflects the activities and position of the company. One of the objectives of the internal auditing system is to guard against and control risks resulting from the company s business activities and the risk of error or fraud, particularly in the accounting and financial fields. Like any auditing system, it cannot however provide an absolute guarantee that these risks have been totally eliminated. The main risks confronted by Icade and its subsidiaries have been listed in the management report: Environmental risks Economic variations and in particular changes in the component parts of the property markets and rates. Increased competition risks. Risks related to the company s position Inadequacy of investment capacity; defaulting suppliers; difficulty in integrating new business activities; breakdown of information systems; lack of insurance cover. Business related risks 2. LIMITATIONS TO THE POWERS OF THE MANAGING DIRECTOR The positions of Chairman of the Board of Directors and Managing Director of the company are combined. On the date of this report, a Deputy Managing Director has not been appointed. The Managing Director is invested with the most extensive powers to act in the company s name in all circumstances. He exercises his powers within the confines of the corporate object and subject to those that the law expressly attributes to Shareholders Meetings and the Board of Directors. He represents the company in its relationships with third parties. The company is bound even by actions of the Managing Director which do not fall within the corporate object, unless it can be proven that the third party knew that the action exceeded that corporate object or could not be unaware of this in view of the circumstances. Mere publication of the Articles of Association is not sufficient to constitute such proof. Provisions of the Articles of Association or decisions of the Board of Directors limiting the powers of the Managing Director are not binding on third parties. Neither the Articles of Association of the company nor the Board of Directors have placed any limitation on the powers of commitment of the Managing Director. In general : appearance of new regulatory and administrative constraints; directors being held liable in the event of incidents; unforeseen discovery penalising operations (polluted land ) And business related : shortage of land, failure to hedge commitments; planning permission appeals and building disputes in respect of property development; changes in tax regimes in respect of property investment companies; action for liability or unfavourable change in contracts concluded with public bodies in respect of services. Financial and tax risks Liquidity risk, counterparty risk and tax risk. These risks are handled by general guidance on the one hand and operational monitoring on the other

87 Chairman s report on corporate governance and internal audit 3.2 General guidance on risks and internal control In order to achieve its control objectives, Icade has defined the following general principles: Risk assessment From identified risks, an analysis of factors likely to affect the achievement of the company s objectives leads to a regular assessment of the likelihood and gravity of incidents. This assessment enables control activities to be defined and managed. Internal control of operational risks taken Entrusted to the management of the subsidiaries, this revolves around operational value creation processes which represent operational logic. Procedures specify the main modus operandi. The most significant risk taking stages are identified in these specific processes and procedures, compliance and level of realisation control factors and delegations are gradually introduced and regularly audited. Audit of accounting and financial information An auditing framework, offering reasonable assurance as to the reliability of the management information and financial statements produced in accordance with generally accepted accounting standards, is being produced for the main subsidiaries. General distribution of information relating to risk taking procedures Development of a centralised Intranet will in the medium term enable the representation of processes, location of risk taking and associated control procedures to be combined on an entity by entity basis. Icade has introduced a three stage organisation: General risk management This provides, in collaboration with the operational directors of each of the subsidiaries, an analysis of the main operating risks. Internal auditing This is provided by the central unit in accordance with a programme about which the Audit Committee is kept informed. Management of the subsidiaries The subsidiaries constitute the linchpins of Icade s operational mechanism. Each of the directors of those subsidiaries is responsible for applying and complying with the procedures laid down by the Group within their company and defining and applying procedures specific to the company for which they are responsible. 3.3 Operational monitoring/ongoing risk management Operational risk management falls within the framework of identifying and describing key processes and results in a half-yearly review of operational risks with the introduction and ongoing monitoring of plans of action. Examination of the key operational processes: Acquisitions, disposals, leasing Beyond certain thresholds, these operations cannot be undertaken without the validation of the commitments office of the entity and then the commitments committee of the business or commitments committee of Icade. The latter committee meets every month and whenever the situation requires. In particular, it rules on the following points : examination of proposed investments or disinvestments and leasing. Development operations Icade s commitments committee is referred to and must authorise any proposed development operation if, within the framework of the project under consideration, the acquisition cost of the land or the construction cost exceeds certain thresholds. For smaller amounts, the entity s commitments committee carries out the same duties. Financial undertakings, financing, cash flow Icade s commitments committee examines dossiers related to external growth, investments, disposal of securities, businesses, mergers and partnerships. It authorises the main on or off balance sheet commitments for any business or non-business related project. For operations exceeding a certain threshold, Icade has set up an investment committee which provides a second level of control. Recruitment In principle, the human resources committee meets every two weeks to discuss human resources matters within the Group and in particular to monitor current major dossiers, information on current mobility, recruitment, legislation and legal matters, training and the introduction and monitoring of procedures. The detailed elements of this process are described in the AMF reference document. This process is centralised. Litigation Icade s legal department, periodically and at least once a year, makes an inventory of all litigation involving Icade and its subsidiaries on the basis of which a provisions committee decides on the amount of any provision required in respect of each dispute or significant litigation. This committee comprises Icade s Legal Director and the main financial and legal managers. The detailed elements of this process are described in the AMF reference document

88 Chairman s report on corporate governance and internal audit Insurance Icade, in collaboration with its brokers, endeavours to maintain a level of cover that it considers appropriate to each identified risk, subject in particular to constraints related to the insurance market and in line with an estimate of the sum insured it considers reasonable and the likelihood of a claim. Permanent control work: Regular review of operational risks Icade carries out this review which is placed under the responsibility of the Risk Controller General. A map of Icade s specific risks is produced according to an analysis of the impact and likelihood of occurrence in respect of the main subsidiaries. Each identified risk is set out on a specification sheet together with the measures taken and the person responsible for the action. Audits These are carried out to assess compliance with the main operating and risk management processes and procedures. These audits relate to subsidiaries or cross-disciplinary subjects. Management reports During the course of the year, the directors of the main subsidiaries complete management reports comprising indicators relating to significant operational risks. The main French subsidiaries at the beginning of the year have completed these management reports. 3.4 Internal control procedures relating to the preparation and processing of accounting and financial information Icade brings together the following central departments: cash flow, human resources, consolidation, financial reporting and control, information systems, investment and financing. The subsidiaries have a mechanism which enables them to produce their financial statements independently. Because of this organisation, the internal control of accounting and financial information is based on the following elements: > A reference system and common accounting methods, > A central consolidation, management and accounting department, > An accounting and subsidiary management department, > Financial reporting, > A control framework for processing accounting and financial information. 3.5 A reference system and common accounting methods For producing the consolidated accounts each half year and publishing quarterly earnings, Icade uses the Group s common reference system which ensures: > Uniformity of accounting methods and consolidation rules, > Standardisation of return formats. Icade produces its consolidated accounts in accordance with IFRS. The use of these standards required specific training and instruction during the course of the year. Memos from the Group finance department specify the timetable for each close. All the financial information systems and their contents are controlled by the Group finance department. Meetings are held on a regular basis with: the Finance Director, Information Systems Director, Consolidation Manager as well as the Finance Managers and Management Control Managers of the various subsidiaries. 3.6 A central management and accounting department Under the authority of the Group Finance Director, finance department teams produce all Icade s financial data and consolidated data and co-ordinate the work of the finance departments of the subsidiaries. The duties of this department are as follows: > Definition and distribution of the Group s accounting methods, procedures and reference systems, > Production of the annual company accounts, > Production of the annual and half-yearly consolidated accounts, > Production of quarterly consolidated earnings, > Co-ordination of the budget and forecasting process, > Identification and realisation of necessary changes to the accounting and management information systems, > Production of the tax package, > Production of the management report, > Participation in the preparation of the reference document. 3.7 An accounting and subsidiary management department The subsidiaries have independent staffing. The duties of this department are as follows: > adaptation of the accounting methods, procedures and reference systems to those laid down by the Group, > production of the annual company accounts, > production of the annual and half-yearly consolidation packages, > production of quarterly consolidated earnings, > production of the annual tax packages, > production of a quarterly financial report in respect of operating profit/loss, > production of budget and forecast information

89 Chairman s report on corporate governance and internal audit 3.8 Financial reporting The Group subsidiaries are included in the financial reporting cycle which constitutes one of the key elements of Group management. This reporting comprises two aspects: The budget process The budget process is applied in respect of the Group s consolidated subsidiaries. This process takes place in October and November. The various operational subsidiaries and functional units produce and present their budgets for the following year to Group general management. That budget then constitutes the reference document for quarterly financial reporting. Quarterly reporting Quarterly reporting, at operating profit/loss level, is a component part of the financial information and control mechanism. It comprises figured information from the income statement and the main balance sheet information over the period in question, compared to the budget targets and achievements of the proceeding year. All Group management controllers and accountants use the same IT system in producing the quarterly reports. 3.9 A control framework for processing accounting and financial information Reference frameworks for Icade s main subsidiaries and certain cross-disciplinary cycles are in preparation Financial reporting organised in accordance with AMF rules Icade publishes its quarterly earnings and half-yearly and annual financial information through press releases. Distributed to analysts, investors and the main media, these press releases are also put on line on Icade s Website. Finally, these press releases are also put on line at the same time on the AMF s Website like all other information capable of influencing the market and as a supplement to the reference documents published by Icade, also available on its Website (base document, operational memos, annual reports etc.). 4. CHANGES IN INTERNAL CONTROL, RISKS AND AUDITING PROCESSES During 2006 Internal control was carried out under the responsibility of: > The directors of the subsidiaries in respect of operational control, > The finance department in respect of processing financial data. Risk related matters were handled by the Controller General: > Who periodically assessed risk in terms of gravity and likelihood of occurrence, > Who made a record of the persons designated by the directors of the subsidiaries for taking preventive action, > Who took part in examining dossiers on the commitments committee. The Audit Department worked on the internal control system and in particular examined summaries of processes, action plans and management reports mentioning recommendations and progress targets formulated by the audit, in agreement with the managers. In future years, the organisation will be amended as follows: Following the approval of the Board of Directors meeting of 14 th December, risks will be included in the Audit Department. This department will become the Audit and Risks Department : > The director will become a member of the commitments committee, > The department will have a Risks Manager in charge of assessing and monitoring the introduction of security controls and procedures, > The auditing work will be defined taking into account the status of the security system and will include a permanent audit of the internal control system. 5. PRINCIPLES AND RULES FOR DETERMINING THE REMUNERATION AND BENEFITS OF ANY KIND GRANTED TO THE CORPORATE OFFICERS (Article 62 of the Law of 30 th December 2006 Article L of the Commercial Code, amended) The work undertaken has enabled and will in future enable the rules and principles to be worded in accordance with the law. General provisions Icade s Board of Directors meeting of 5 th October 2004 created an Appointments and Remuneration Committee (consisting of Edmond Alphandéry Chairman, Etienne Bertier, Jérôme Gallot and François Pochard - Guy Parisot as Secretary) which on 19 th September 2005 finalised the bye-laws establishing the duties, reporting procedures and meetings of the committee as well as the committee s reporting procedures to the Board of Directors. The main duties of this committee are to recommend to the Board of Directors the elements of the Chairman and Managing Director s remuneration (fixed remuneration, variable remuneration and determining criteria as well as his membership of the social security scheme for company directors and managers) and the method of paying the directors fees voted by the company s General Meeting. It also examines the share subscription option plans and how they are distributed among the beneficiaries

90 Chairman s report on corporate governance and internal audit The Chairman of the committee informs the Board of Directors of the opinion of the Appointments and Remuneration Committee. The Appointments and Remuneration Committee is informed of the remuneration of the members of the Strategic Committee and the company s remuneration policy and meets at least once a year at the initiative of the Chairman and Managing Director and whenever the situation so requires. Directors fees The directors may be remuneration by means of directors fees, the overall amount of which is then set each year by the Ordinary General Meeting of Shareholders. The payment of directors fees is freely determined by the Board of Directors following the opinion of the Appointments and Remuneration Committee. Committee members received additional directors fees as determined by the Board of Directors. Remuneration of the Chairman and Managing Director On a proposal from the Appointments and Remuneration Committee, the Board of Directors determines the elements of the remuneration of the Chairman and Managing Director (fixed remuneration, variable remuneration calculated on the basis of achievement of the targets assigned to him and determining criteria as well as his membership of the social security scheme for company directors and managers). For 2007, the Chairman and Managing Director s remuneration was determined by taking into account the median of the market comprising a panel of SBF 80 companies, taken from the SBF 120 minus the CAC 40 companies, with comparable capitalisation, earnings and staffing. Remuneration for specific duties The Board of Directors may also allocate extraordinary remuneration for duties or mandates given to directors subject to the conditions provided by applicable legal provisions. AUDITORS' REPORT PRODUCED pursuant to Article L of the French Commercial Code, on the report of the Chairman of the Board of Directors of the company Icade, relating to the internal control procedures relating to the preparation and processing of accounting and financial information Year ended 31 st December 2006 In our capacity as auditors of the company Icade and pursuant to the provisions of Article L of the French Commercial Code, we present our report on the report produced by the Chairman of your company in accordance with the provisions of Article L of the Commercial Code, for the year ended 31 st December It is the Chairman s duty to report on the conditions for preparing and organising the work of the Board of Directors and the internal control procedures put in place within the company. It is our duty to inform you of any observations called for on our part by the information given in the Chairman s report relating to the internal control procedures relating to the preparation and processing of accounting and financial information. We have carried out our work in accordance with professional standards applicable in France, which require that diligence is used to assess the accuracy of the information given in the Chairman s report relating to the internal control procedures relating to the preparation and processing of accounting and financial information. This diligence consists of: > Acquainting ourselves with the objectives and general organisation of internal control as well as the internal control procedures relating to the preparation and processing of accounting and financial information, as presented in the Chairman s report; > Acquainting ourselves with the work underlying the information thus given in the report. On the basis of this work, we have no observations to make on the information given regarding the company s internal control procedures relating to the preparation and processing of accounting and financial information, as contained in the report of the Chairman of the Board of Directors, produced in accordance with the provisions of Article L of the French Commercial Code. Paris La Défense, 12 th March 2007 The auditors SALUSTRO REYDEL MAZARS & GUÉRARD Member of KPMG International Denis Grison Isabelle Goalec Loïc Wallaert François Bernard

91 Employee photograph credits Olivier Raoux Development Manager - Icade Tertial (Cover) Eugénie Salgado-Larbodière Training Department Manager - Icade (p.3) Valérie Palcy Legal Manager - Icade Capri (p.5) Philippe Aubert Paralegal - Icade G3A (p. 11) Laurence Méri Quality Manager - Icade G3A (p.27) Gérard Toussaint Internal Communications and Events Manager - Icade (p. 27) Richard Remigereau Land Manager - Icade Capri (p.32) Marc Le Blanc Management Accounting Tools Manager - Icade G3A (p.40) Anne Coupé-Saladin Standards, Procedures and Internal Audit Manager - Icade (p.44) Renaud Glasson Site Manager - Icade Eurogem (p.47) Séverine Unimon Project Manager - Icade G3A (p.48) David Nicolas Security Officer - Icade Patrimoine (p.52) Cécile Paty Webmaster - Icade (p.52) Employee photograph credits (continued) Nicolas Sebti Programmes Manager - Icade Capri (p.53) Vincent Rigolet Multi-Technical Agent - Icade Eurogem (p.55) Diane Bartoli Training Manager - Icade (p.57) Olivier Grall Studies, Development and Operations Manager Information Systems Division Icade (p.61) Photograph : Christophe Boutet Étienne Bertier Chairman and Chief Executive Officer of Icade (p.12) Photograph: A. Février Credit for taking photographs F. Achdou/Urba Images, R. Araud, C. Bailleul, J.P. Duplan/Light Motiv, M. Engelhardt-Sellin, E. Lechangeur, H. Mouillade, G. Tordjeman, J. Urquijo, O. Wogenscky

92 S.A. with capital of 711,508, NANTERRE COMMERCIAL AND COMPANIES REGISTER SIRET (COMPANY ID) EEC VAT N FR APE (Principal Business Activity) Code 741 J 182

93 Bringing the city to life Headquarters Millénaire 1 35, rue de la Gare Paris Cedex 19 France Tel. : +33 (0) Direction de la Communication d Icade - - June 2007