annual report

2003

At the heart of new dynamic urban developmentQuality drives development and growthYear’s highlights: a Group on the road to successQuestions for Antoine Jeancourt-Galignani and Serge GrzybowskiCorporate management: recognized and complementary skillsStrategy: an objective of profitable redeploymentPortfolio highlights: major improvementFinancial highlights: objectives achievedGECINA and its shareholders: emphasis on the quality of informationHuman resources: integration facilitatedSustainable development: a commitment that involves everyoneCommercial real estate: an active and selective development policyResidential real estate: rationalization stepped upBackground: dynamic developmentFinancial report

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Contents

2-4, quai Michelet 92300 Levallois-Perret

7, rue de l’Amiral-Serre78000 Versailles

11

Leader in the euro zone with realestate holdings valued at 7.8 billion euros,GECINA has a unique profile defined by a balance between its two rental activities:commercial real estate and residentialproperties. Offices and commercialpremises, which offer a high yield,combine with residential properties, asource of regular and diversified revenues,to ensure a profitable and safe investment.

GECINA’s rental real estateproperties represent a total area ofmore than 2.2 million sq.m., comprising900,000 sq.m. of commercial premisesand 19,000 apartments. Assets are notedfor the quality of their location: 90% are inParis and the surrounding region, and therest in Lyons.

GECINA’s profitable growth trendis driven by its teams’ experience and know-how. Asset management, buildingservice and maintenance, financial and realestate engineering, asset restructuringand development, marketing, etc. aresome of the areas in which the Group hasdeveloped expertise, fostering the implementation of an active policy to increase the value of assets and pursean opportunistic strategy of acquisitionsand divestments.

As a listed French real estateinvestment trust (SIIC)1 since 2003,GECINA is a tax free vehicle that provides a high yield. With a market capitalization of 3.8 billion euros in the hands of almost38,000 shareholders, GECINA is one of themost liquid real estate stocks. It is part of the SBF 120 and the Euronext 100 stockmarket indexes.

(1) Société d’Investissements Immobiliers Cotée.

2

Through its activities in real estate, GECINA contributes to urban redevelopment. By restructuring, renovating,redeveloping, constructing and improving, its investmentsprefigure a new cityscape and the economic developmentof the players involved. The architectural and technicalcharacteristics of these real estate projects enhance theenvironmental and esthetic qualities of the greater Parisand Lyons regions in which the Group’s assets are located.The mix of residential properties and commercial premisesat these locations ensures a better balance in the heart ofcities, as illustrated by major projects such as the Labuireconcerted development zone or the renovation of theBeaugrenelle mall, which are conducted together with allthe local partners. These programs are complemented bythe daily service and maintenance operating teams providefor all the GECINA’s real estate assets.

At the heart of new dynamic urban development

1-3, rue de Caumartin75009 Paris

3

• In partnership with Lyonnaise de Banque,GECINA is involved, as planner, in the Labuireproject, a five hectare plot of land at thecorner of the boulevard Vivier-Merle and the avenue Félix-Faure in Lyons.

• The project aims to develop 140,000 sq.m. of offices, stores, housing and public facilities.

• The sale to real estate operators of propertyconcession rights, of which GECINA owns 60%, is scheduled from 2005.

The development of Labuire will

create a new neighborhood that

will be the setting for enhanced

living conditions. At the southern

end of the Lyons Part-Dieu central

business district, housing, stores,

small shops and services, parks

and offices will together create

the economic, social and

environmental components

needed to ensure an attractive

balance for quality urban living.

72-86, avenue Félix-Faure and 106, boulevard Vivier-Merle - 69003 Lyon

5 bis-7, rue Volney and 14-16, rue des Capucines- 75002 Paris

4

Quality drives development and growth

The process GECINA employs to create value is based onthe mastery of new businesses better able to take advantageof fluctuations in the real estate markets. Most activities arepiloted within the Company – acquisitions, divestments,development, marketing, asset management and, last butnot least, financial and real estate engineering. The size theGroup has attained has enabled it to bolster operationsthrough the addition of various support functions – Quality,Research, Strategy and Marketing, and Risk Management.These activities make GECINA more responsive and betterable to create value. They are made available to third parties through LOCARE, one of the top ten brokers in Paris,and COMPAGNIE FONCIERE DE GESTION, which is dedicatedto real estate management.

32-34, rue Guersant 75017 Paris

5

• In 2003, LOCARE recorded 17 millioneuros in commissions, 40% of whichwere from clients outside the Group.

• During the year, 2,460 apartments and58,350 sq.m. of offices were rentedand 1,300 apartments were sold toretail customers.

• GECINA as well as major institutional,corporate and individual real estateinvestors put their trust in LOCARE in 2003.

23-29, rue de Châteaudun75009 Paris

Cours Ferdinand-de-Lesseps 92500 Rueil-Malmaison

As the Group’s marketing andsales arm, LOCARE has more than20 years’ experience as a realestate service provider specializedin property rental and sales transactions. Since the beginningof 2004, this subsidiary providesasset management consulting services for professional investors.

6

Year’s highlights

A Group on the road to success

2003JanuaryGECINA joined forces with Apsys, one of France’s majorcommercial real estate operators, to restructure the Beaugrenelle mall in Paris. With its financial partnersFoncière Euris and Francarep, Apsys now has a 50%interest in this asset, and GECINA holds the other 50%.In close cooperation with all the local players, the projectinvolves major restructuring and the extension of the mallto 40,000 sq.m.GECINA will continue to ensure the management of thewhole operation, as well as administrative and financialmanagement for the project.

Work started on the future headquarters of the GECINAGroup at 5bis-7, rue Volney / 14-16, rue des Capucines,Paris 2nd, in the central business district between theOpera, la place de la Madeleine and the place Vendôme.

February GECINA successfully launched its first bond issue in the amount of 500 million euros. Partial refinancing of the syndicated loan negotiated when SIMCO wasacquired in November 2002 allowed the Group to extendand diversify its sources of financing.

MayCrédit Foncier transferred its entire stake in GECINA(4.1%) to Prédica, the Crédit Agricole Group’s lifeinsurance company. Ownership of this equity holding, theresult of GECINA’s takeover bid on SIMCO, was required tobe maintained until May 16, 2003. Prédica then becameone of GECINA’s major shareholders with 9.4% of thecapital.

On May 28, GECINA signed the definitive sales contractfor 47 buildings, mainly residential Haussmann-styleproperties, in the amount of 563 million euros. Thisdivestment represented a total of 1,965 apartments, asstipulated in the agreement signed on October 14, 2002,with the American company Westbrook Partners.

JuneGECINA’s Annual Shareholders’ Meeting decided to renewthe terms as members of the Board for a period of threeyears of Laurent Mignon, Christian de Gournay, Azur-Vieand Antoine Jeancourt-Galignani, whose position asChairman of the Board of Directors was confirmed by theBoard at the meeting held after the Annual Shareholders’Meeting. The Annual Shareholders’ Meeting also ratifiedthe appointment of Anne-Marie de Chalambert as amember of the Board to replace GPA Vie, which resigned,for the remainder of the latter’s term.

JulyThe Axa Group sold its 6.2% equity interest in GECINA,after the expiration of the commitment not to sell on May16, 2003. These shares were placed with a wide circle ofinternational investors.In keeping with the calendar announced on July 31, 2003,the protocol agreement signed with Westbrook Partnerson October 14, 2002, was completed when the definitivesales contract was signed for 50 buildings that were

7

2004formerly SIMCO assets. This second part of the agreementrepresented a sale of assets in the amount of 575 millioneuros for almost 140,000 sq.m. of mainly residentialHaussmann-style properties for a total of 1,151 apartments.

GECINA published an increase in half-year rental incomeof more than 100%. For the first time, commercialrentals accounted for more than 50% of the Group’stotal rental income.

SeptemberGECINA opted for the new SIIC tax system withretroactive effect as of January 1, 2003. This systemallows the Group to benefit from a tax exemption on rental income and capital gains on real estatetransactions generated within the framework of itsactivities as a real estate investment trust. Conversely,GECINA should pay an exit tax of 569.4 million euros, a quarter of which is payable every December 15 from2003 to 2006.

OctoberGECINA Group brought its teams together at 34, rue dela Fédération, Paris 15th.

DecemberThe Shareholders’ Meetings of GECINA and SIMCOapproved the merger of SIMCO into GECINA.Announced as a possible complement to the takeover bidon SIMCO, the merger is a logical stage in the Group’sdevelopment. The parity of the merger was nine GECINAshares for ten SIMCO shares, the same as was proposedduring GECINA’s takeover bid on SIMCO in the autumnof 2002.

JanuaryOn January 2, the par value of GECINA shares wasdivided in half to 7.50 euros. Registered shares becamemandatory as of January 7.

The 6,300 sq.m. of GECINA’s former headquarters,located at 2ter, boulevard Saint-Martin, Paris 10th, wererented under satisfactory market conditions.

FebruaryThe Dauphiné Part-Dieu project was completed. The 13,000 sq.m. of office space are located near the Part-Dieu rail station in Lyons.

MarchIn the presence of Gérard Collomb, Senator-Mayor of Lyons, the project for the Labuire concertedredevelopment zone was presented at the 2004 MIPIM(international marketplace of real estate professionals),which was held in Cannes from March 9 to 12. In partnership with the “Grand Lyons” and the city of Lyons, GECINA and Lyonnaise de Banque joined forcesin SAS LABUIRE Aménagement as planner. The projectinvolves making five hectares of undeveloped land into140,000 sq.m. plots on which offices, stores, housingand public facilities can be built.

193, rue de Bercy 75012 Paris

8

Questions for

Antoine Jeancourt-Galignaniand Serge Grzybowski

How do you analyze GECINA’s annualresults, which for the first timeconsolidated SIMCO on a full year basis?Serge Grzybowski: GECINA reported good and veryencouraging results in 2003. The operating margin, i.e.the ratio between EBITDA (excluding net income fromsales of real estate holdings) and rental income, againimproved, rising to 77.7%. The impact of the adoptionof the SIIC tax system was a 42.6% increase in currentcash flow1 per share after tax. Even more convincing wasthe 9.1% rise in current cash flow before tax, in line with our objectives. In fact, if abstraction is made of the creation of shares at the end of the year following the merger of SIMCO into GECINA and the conversion of former GFC 3.25% bonds, pre-tax current cash flowper share stood at 15.3%.

How do you explain this performance?Antoine Jeancourt-Galignani: These results areconcrete proof of the benefits generated by the mergerof GECINA and SIMCO, as we had announced to the shareholders’ of both companies. But they also owea great deal, and increasingly so, to the policy implementedfor almost three years now that aims to rebalance our asset portfolio. The consistency and coherence of our strategic choices have thus been confirmed – a commercial focus that has been honed according tostrict criteria ensuring the yield, quality and the regularityof flows, an optimized residential activity, a relutive financialstructure, and an organization clearly defined by line of business.

S. G.: As we promised in this forum last year, SIMCO wascompletely integrated as of 2003. The legal merger ofthe two companies was approved by each company’sShareholders’ Meeting on December 17, 2003. This operation took effect on December 31, 2003. At the operational level, the process was already wellunderway during the year as the companies’ teams were

regrouped, the Executive Committee was named, and an organization was set up, with the addition of a significant marketing subsidiary, one of the tenlargest brokers in Paris, and new support functions(research, quality, etc.). I would like to take thisopportunity to associate the men and women in theGroup with this success and thank them for their efforts.

A. J.-G.: Let me add that the Group achieved theobjective it had set to reduce debt in 2003. At the end ofDecember, the revalued debt-equity ratio was once againlower than 40% and EBITDA covered financial expensemore than 2.5 times. GECINA now has financialresources that open the door to new opportunities.

On this point, there are frequent marketrumors about new external growthoperations? Is there any truth to them?A. J.-G.: GECINA is certainly not opposed to the prospectof external growth, a strategy that it has employedfrequently in the past. We carefully study any and allopportunities. But we have strict requirements in termsof the creation of value that neither we nor ourshareholders and the Board of Directors will forego.Today, this approach distances us from certain currentoperations, all the more so since the new GECINA nowhas the resources it needs to focus more on internalgrowth.

S. G.: The merger with SIMCO makes it possible to formteams of experts dedicated to the Group’s development.While carrying out a 1.5 billion euro divestment programin 2003, these teams conducted several developmentprojects representing a total of 90,000 sq.m. GECINAalso benefits from a preliminary agreement to acquiremore than 20,000 sq.m. of commercial real estatelocated in Paris. This investment totals 121 million euros.As you can see, the redeployment of the Group throughits internal resources is on the right track.

9

Antoine Jeancourt-GalignaniChairman

Serge GrzybowskiChief Executive Officer

Let’s talk some more about the SIICstatus GECINA has adopted. What is the benefit for shareholders? S. G.: It’s a great advantage. This new tax systempotentially gives us greater flexibility to pursue an arbitrage policy based on economic fundamentalswithout having to calculate the impact of taxes. Our arbitrage policy, in both the residential and commercial sectors, will be designed on the basis of our objectives to improve the overall return on ourassets. For example, tax savings in 2003 were greaterthan the first payment of the exit tax last December 15.

A. J.-G.: The SIIC option led to an immediate revaluation of the Group. As of December 31, post-tax diluted netrevalued block assets2 per share increased by 27.1% in a year. This option also enabled us to internationalize ourshareholding base, in particular with the arrival of Americanshareholders who are familiar with Real Estate InvestmentTrusts (REITs), an American vehicle that has approximatelythe same tax status as ours. Their joining our shareholderranks was accompanied by a reduction in GECINA’s share price discount vis-à-vis a sharp increase inrevalued net assets per share. This was one of the reasonsfor the positive trend in the share price over the last fewmonths. Finally, there was a significant rise in distribution. A dividend of 2.45 euros per share has been proposed to the Shareholders’ Meeting of June 2. This represents an increase of 22.5%, with the gross dividend proposed up 12.0% to 3.35 euros.

What message do you want to send to your shareholders?S. G.: There are many ways to create value for ourshareholders. We should, therefore, continue to improvethe return on assets in the next two years. At the end of this process, the breakdown of residential and commercial activities should stand at 30%-35% and 65%-70%. The objective of an operating margin of 80% is within our grasp.

A. J.-G.: The implementation of our strategy justifies an objective of double-digit growth in current cash flowper share. In 2004, the increase should be between 5%and 10%. The top of this range will be all the easier toattain if significant investments are made during the year.

Finally, GECINA’s reputation as a yield stock will beconfirmed in 2005. The tax reforms in France and ournew tax system together have a very positive impact for our shareholders. This will be particularly the case forindividual shareholders, who benefit not only from higherdividends as a result of SIIC bonds, but also the commonlaw tax exemption on dividends. They will benefit the most from the reform and we invite more of them to join us.

1 Cash flow excluding net income from sales of real estate holdings.2 On the basis of a block valuation, net selling prices, of real estate assets.

10

Corporate management

Recognized and complementary skills

GECINA’s Board of DirectorsAntoine Jeancourt-GalignaniChairman of the Board

Michel Pariat Vice Chairman

Charles RuggieriChairman, Batipart

Christian de GournayChairman of the Executive Board, Cogédim

Bertrand Letamendia Chief Real Estate Officer, AGF

Azur Vie represented by Bruno LegrosChief Investment Officer, Azur GMF

GMF Vie represented by Sophie Beuvaden Chief Executive Officer Delegate,Finance division, Azur GMF

Anne-Marie de Chalambert1

Chairman and Chief Executive Officer,Generali Immobilier Conseil

Laurent MignonChief Executive Officer, AGF

Jean-Paul Sorand2

Chairman’s Delegate Director

Bertrand de Feydeau Chief Executive Officer,Economic Affairs, AssociationDiocésaine de Paris

Philippe Geslin Chairman, Banque Française de l’Orient

Françoise Monod Attorney

Prédica represented byJean-Pierre Bobillot Deputy Chief Executive Officer, Prédica

Appointments andCompensation Committee

Laurent Mignon, Chairman

Sophie Beuvaden

Christian de Gournay

Françoise Monod

Antoine Jeancourt-Galignani3

Audit CommitteePhilippe Geslin, Chairman

Bertrand Letamendia

Jean-Pierre Bobillot

Bruno Legros

(Details of directors’ compensation and terms ofoffice are provided in the management report. Theconditions of the organization and preparation ofthe Board and the Group’s internal control arepresented in the Chairman’s report.)

1 Director whose mandate the Shareholders’Meeting of June 2, 2004, is asked to renew.

2 Director with executive management functionssince December 20, 2002.

Quality and SustainableDevelopment Committee Charles Ruggieri, Chairman

Anne-Marie de Chalambert

Bertrand de Feydeau

Jean-Paul Sorand, Reporter

Executive Management Serge Grzybowski Chief Executive Officer

Independent StatutoryAuditorsErnst & Young Audit4

F-M Richard & Associés4

Mazars & Guérard5

Independent AlternateAuditors Patrick de Cambourg6

Sylvain Elkhaim7

Dominique Duret-Ferrari7

Board SecretaryJean-Alain Daniel

3 Appointments only.

4 Independent Statutory Auditor whose mandateexpires June 2, 2004, a fact of which theShareholders’ Meeting held on the same day isinformed.

5 Independent Statutory Auditor whose resignationas the Company’s third auditor is proposed to theShareholders’ Meeting of June 2, 2004, andwhose appointment for six years is proposed tothe Shareholders’ Meeting held on the same day.

6 Independent Alternate Auditor whose resignation isproposed to the Shareholders’ Meeting of June 2,2004, and whose appointment for six years isproposed to the Shareholders’ Meeting held on thesame day.

7 Independent Alternate Auditor whose mandateexpires June 2, 2004, a fact of which theShareholders’ Meeting held on the same day isinformed.

11

Antoine Jeancourt-GalignaniChairman

Serge Grzybowski Chief Executive Officer

Méka BrunelDevelopment Director

Yves Dieulesaint Director of Residential Property

Michel Gaillard Lyons Regional Director

Michel Gay Financial and Administrative Director

André LajouDirector of Commercial Property

Etienne Marcot Chief Executive Officer of LOCARE

Denis Outin Human Resources Director

From left to right and from top to bottom:Antoine Jeancourt-GalignaniSerge GrzybowskiMéka BrunelYves Dieulesaint Michel Gaillard Michel Gay André LajouEtienne Marcot Denis Outin

Executive Committee

GECINA financing policy is designed to minimize theaverage weighted cost of capital and, in particular,of debt, within the framework of strict managementof interest rate, liquidity and counterparty risks. In 2003, the priority was debt reduction and the diversification of sources of financing, two majorfactors in restoring the Group’s financial capacity so as to pursue its growth.

For many years, GECINA has implemented a policythat targets regular growth in dividends, reflectingincreased current cash flow per share. The adoptionof the SIIC status confirms GECINA’s reputation as a yield stock, and within the framework of French tax reforms, will boost net income aftertaxes for all owners of shares, and most especially,individual shareholders.

The GECINA Group is resolutely engaged in a processthat targets the creation of value based on anenhanced return on assets. In 2004, GECINA defineda new multi-year arbitrage plan in the amount of 500 million euros. Comprised of residentialHaussmann-style properties in Paris, with a grossyield of less than 5%, these assets will be sold byunit in order to maximize the resources gleaned. Atthe same time, the high market values of commercialinvestments are exploited by the sale (for 200 millioneuros) of offices with mature rents and thereforelimited growth potential.

In 2003, GECINA took the steps required to createinternal growth relays. Capable of generating almost30 million euros in additional rental income on the basis of high yield properties, several assetdevelopment projects, representing a total of 90,000 sq.m. of commercial premises in Paris and Lyons, has been launch. At the same time,GECINA implements an opportunistic assetacquisition policy that represents real prospects forshort-term profitability. The Company targets officebuildings with an area of more than 10,000 sq.m.and with long-term rental flows.

Strategy

know-howprofitability

know-howdevelopment

know-howremuneration

know-howfinancing

12

1 Vente au détail par appartement.

132-4, quai Michelet 92300 Levallois-Perret

An objective of profitable redeployment

14

Portfolio highlights

Major improvement

millions of euros unless otherwise stated 2001 2002 2003

• Rental income 267.3 293.7 493.2Commercial properties 99.4 122.5 259.8Residential properties 167.9 171.2 233.4

• Revalued block value of assets as of December 311 4,091.7 8,403.8 7,111.9Commercial properties 1,440.7 4,029.9 3,871.5Residential properties 2,652.0 4,373.9 3,240.4

• Revalued retail value of assets as of December 312 4,543.7 9,017.9 7,793.3Commercial properties 1,479.0 4,075.2 3,915.3Residential properties 3,064.7 4,942.7 3,878.1

• Gross return on assetsrental income/revalued block value of assets1 6.53 % 6.21 %3 6.93 %

• Total surface area of real estate assets as of December 31 1,722,868 sq.m. 2,771,699 sq.m. 2,248,710 sq.m.Commercial properties 536,189 sq.m. 1,014,167 sq.m. 929,621 sq.m.Residential properties 1,186,679 sq.m. 1,757,532 sq.m. 1,319,089 sq.m.

• Number of apartments as of December 31 16,671 24,400 19,044• Investments 50.9 4,354.1 131.4• Divestments 315.3 334.9 1,521.8

Consolidated data

Change in residential and commercial business

2001 2002 2003

37.2

62.8

41.7

58.3

47.352.7

1 On the basis of block valuation appraisals, net selling prices, of real estate assets.2 On the basis of unit valuation appraisals, net selling prices, of residential properties and of block valuation

appraisals, net selling prices, of commercial premises.3 On the basis of 2002 pro forma GECINA-SIMCO rental income of 522.1 million euros.

% of the Group’s rental income

2001 2002 2003

64.8

35.2

48.052.0

45.654.4

% of the revalued block value of assets1

Residential

Commercial

1 On the basis of block valuation appraisals, net selling prices, of real estate assets.

15

Geographic breakdown of properties in operation1

Breakdown of properties in operation by type1

% of rental income

2001

2002

2003

2001

2002

2003

% of the revalued block value of assets2

2001

2002

2003

% of surface area

50.533.6 14.1 1.8

44.632.8 21.3 1.4

52.024.3 21.5 2.2

1 Excluding properties for sale and buildings acquired or under constructionduring the year, lands and La Rente Immobilière.

2 On the basis of block valuation appraisals, net selling prices, of real estate assets.

After 19751960-1975Haussmann-styleOther

ParisParis regionLyonsOther

36.943.6 19.0 0.5

27.240.6 31.8 0.4

41.028.6 29.6 0.8

37.644.3 17.0 1.1

24.539.5 35.0 1.0

43.529.6 24.9 2.0

% of rental income

2001

2002

2003

33.562.5 4.0

31.664.4 3.9 0.1

29.661.0 8.1 1.3

% of the revalued block value of assets2

2001

2002

2003

31.465.4 3.2

28.069.1 2.9

28.464.5 6.4 0.7

2001

2002

2003

39.549.3 11.0

35.454.4 10.0 0.2

28.352.2 17.3 2.2

0.2

% of surface area

16

Financial highlights

Objectives achieved

70.8%

74.6%

77.7%

1.8

2.7

3.4

2001 2002 2003

Operating margin

3.8

12/31/2001 12/31/2002 12/31/2003 4/10/2004

GECINA’s stock market capitalization

Breakdown of gross financial debtas of December 31, 2003

Shareholding structureas of March 31, 2004

13.6% Azur GMF

23.9% AGF

9.7% Prédica (CréditAgricole Group)

4.2% Treasury stock11.1% Individual shareholders

18.7% Non-resident shareholders

18.8% Other institutional residents

14% Convertiblebonds

12% Financeleases

29% Bankloans

12% Commercialpaper

33% Bonds

EBITDA1 / rental income (%) billions of euros

1 Excluding net income from divestments.

17

millions of euros unless otherwise stated 2001 2002 2003

• EBITDA1 189.1 219.1 383.4• Net financial expense 65.9 72.7 150.8• EBITDA1 / net financial expense 2.87 x 3.01 x 2.54 x• Pre-tax current cash flow1 123.2 146.3 232.6• Current cash flow after tax1 90.6 110.3 229.0• Diluted pre-tax current cash flow1 2 130.7 151.5 242.4• Diluted current cash flow after tax1 2 93.6 112.5 238.9• Net income, Group share 113.3 130.9 535.5• Net financial debt as of December 31 1,421.0 3,993.0 2,513.0• Shareholders’ equity as of December 31 1,113.3 3,515.43 3,773.1• Revalued net block asset value after tax as of December 314 1,923.5 2,937.7 4,043.9• Revalued net unit asset value after tax as of December 315 2,215.4 3,329.8 4,725.3• Diluted revalued net block asset value after tax2 4 2,156.8 3,390.7 4,389.5• Diluted revalued net unit asset value after tax 2 5 2,448.7 3,782.7 5,070.9• Net financial debt / revalued net block asset value

as of December 314 34.73% 47.75% 35.33%• Net financial debt / revalued net unit asset value

as of December 315 31.27% 44.48% 32.25%• Net financial debt / shareholders’ equity as of December 31 1.28 x 1.98 x 0.65 x• Total dividends6 69.3 108.2 138.3

euros 2001 2002 2003

• Pre-tax current cash flow1 3.32 3.77 4.11• Diluted pre-tax current cash flow1 2 3.18 3.58 3.82• Current cash flow after tax1 2.44 2.83 4.04• Diluted current cash flow after tax 1 2 2.28 2.65 3.76• Net income, Group share 3.05 3.37 9.46• Diluted revalued net block asset value after tax2 4 52.87 54.53 69.28• Diluted revalued net unit asset value after tax2 5 60.02 60.83 80.03• Net dividend 1.80 2.00 2.456

• Gross dividend 2.70 3.00 3.356

2001 2002 2003

• Number of shares comprising the share capital as of December 31 38,476,100 54,092,752 58,038,246

• Number of shares excluding treasury shares as of December 31 36,796,524 52,652,818 56,432,164

• Diluted number of shares excluding treasury shares as of December 312 40,796,978 61,879,826 63,358,772

• Average number of shares 37,125,948 38,874,050 56,609,724• Diluted average number of shares2 41,126,402 42,331,052 63,536,332

Consolidated financial data

1 Excluding net income from divestments.2 Diluted by existing convertible bonds.3 After restatement of the balance sheet as of January 31, 2003.4 On the basis of block valuation appraisals, net selling prices, of real estate assets.5 On the basis of unit valuation appraisals, net selling prices, of residential properties and of block valuation appraisals, net selling prices,

of commercial premises.6 Subject to the approval of the Shareholders’ Meeting of June 2, 2004, and a dividend payment base of 56,412,164 shares.7 Data restated to account for the split of the par value of shares as of January 2, 2004.

Per share data7

Number of shares7

18

GECINA and its shareholders

In 2003, GECINA confirmed its status as a major stockinvestment in its sector at the European level with a15.45% increase in the share price, an increasinglydiversified shareholding structure and enhanced financialcommunication.

A SIIC with cloutIn less than three years, GECINA’s stock marketcapitalization has more than doubled, rising to 3.8 billioneuros in April 2004. This growth was accompanied by an expansion of its shareholding base, which is now halffreefloat. Together with AGF (23.95%), Azur GMF(13.64%) and Prédica, the Crédit Agricole Group’s life-insurance subsidiary (9.71%), non-resident investorsincreased their holdings significantly to 18.66% as of March 31, 2004, at the same level as residentinstitutional shareholders (18.64%). Individual shareholdersrepresent 11.06% of the capital, with an average of 174 shares.

At the same time, the liquidity of GECINA shares improvedmarkedly with an increase of more than 200% in tradingvolume in 2003. When the par value was divided in half on January 2, 2004, the average number of shares tradedsurpassed 110,000 per day in the first three months of 2004.

Registered sharesSince January 7, 2004, all GECINA shares must be registered shares. Approved by the Shareholders’ Meeting of December 17, 2003, this form enables shareholders to benefit from personalized services that includeannouncements of Shareholders’ Meetings, participation inShareholders’ Meetings without having to obtain a banker’scertificate freezing shares, and invitations to events forindividual shareholders. An in-house team manages “pure”registered shares with no custody fees and reducedbrokerage commissions. There are also “administered”registered shares that allow shareholders to continue towork with their brokers. The account is therefore managedunder the conditions practiced by the broker firm.

Regular and detailed informationIn 2003,GECINA continued to improve the quality of itsfinancial communication by adding new indicators tobolster its financial information. The number of pressreleases was increased and more diversity wasintroduced into the subjects announced (appointments,divestments, investments, new rentals, etc.) in order toprovide greater regularity and transparency with regardto major events in the life of the Group. Information isput online at www.gecina.fr as soon as it is announcedin order to ensure equal access to information for allshareholders, whatever their profile and nationality.

A grass-roots approach and dialogueGECINA is committed to establish and maintaindialogue with its shareholders. Throughout the year,management is in regular contact with the financialand economic press, financial analysts, investors andindividual shareholders.

With institutional shareholders, analysts andjournalists, these contacts take the form ofconferences, SFAF meetings organized on theoccasion of the publication of annual and half-yearresults, group or individual meetings.

A particular effort was made in 2003 to attractindividual shareholders. For the first time, GECINAtook part in the Actionaria shareholding promotionevent, which was held in Paris on November 21 and22, 2003. In addition, dedicated services were createdto maintain close contact:

■ a free telephone service for direct dialogue with theInvestor Relations team;

■ an e-mail address.

GECINA plans to continue to develop this area and isstudying new investor relations opportunities (visits toGECINA properties, shareholder meetings outside ofParis, etc.).

Emphasis on the qualityof information

GECINA shares

■ Number of shares: 58,053,246 as of March 31, 2004

■ ISIN code: FR0010040865

■ Stock Exchange: Euronext Paris, (Premier Marché)Service à Règlement Différé

■ Indexes: SBF 120, Euronext 100, MSCI, EPRA

GECINA shareholders’ calendar

■ May 27, 2004Participation in the conference on listed real estatecompanies organized by Kempen & Co in Amsterdam

■ June 2, 2004Shareholders’ Meeting to approve the 2003 financialstatements

■ June 8, 2004Dividend paid

■ July 28, 2004Publication of 2004 half-year results after the stockexchange closes

■ July 29, 2004SFAF financial analysts’ meeting on 2004 half-year results

■ October 15, 2004Publication of rental income in the third quarter of 2004

■ November 19-20, 2004GECINA stand at the Actionaria shareholding promotionevent in Paris

Contacts

Financial Communication

■ Financial analysts, investors and press relations: Laurence Bousquet + 33 1 40 40 52 21

■ Individual shareholders: Régine Willemyns + 33 1 40 61 66 46

actionnaire@gecina.fr

Securities and Stock Market

Laurent Le Goff + 33 1 40 61 66 71

19

350

300

250

200

150

100

50

0

80

70

60

50

40

GECINA share price

Price in euros Trading volume (millions of euros)

euros millions of euros

01.99 01.00 01.01 01.02 01.03 01.04

20

Human resources

Optimized organizationAt the end of 2003, the GECINA Group employed 798 men and women, including 373 housekeepers. By focusing their efforts on the harmonization of workprocedures and methods, the seven working groupscreated in 2002 contributed to the success of themerger of the two companies in December 2003. Their missions mainly concerned the Group’s legal and accounting reorganization, IT, the search for newheadquarters, changes in marketing strategy, externaland financial communication, new third-party activitiesand labor and human resources issues.

In addition to the two functional divisions (HumanResources, Administration and Finance), five operationaldivisions were created in line with the Group’s strategy:the Residential Properties division, the CommercialProperties division, the Development division, Marketingand Sales, and the Lyons Region division. Managementof residential properties and commercial properties is thus clearly distinguished, since each categorycorresponds to a specific market approach and clientbase. The Development division is responsible for applying the Group’s strategy concerning its assetholdings and the appropriate arbitrage policy, and for exploring geographic expansion and productdevelopment.As a result of the alliance with the SIMCO Group,Marketing and Sales benefited significantly from the addition of a line of business targeting third parties.LOCARE, initially a SIMCO subsidiary, has recognizedexperience in organizing property rentals and sales,either of Group products or for major institutionalinvestors specialized in residential real estate.The managers, technicians, sales staff, etc. in the LyonsRegion division deal with all aspects of real estatemanagement in Lyons and the surrounding area.

New headquarters Since October 2003, GECINA and SIMCO teams worktogether in the Group’s new headquarters at 34, rue de laFédération, Paris 15th. This first move will be following by another when the Group takes possession of its newlyrenovated building at 14-16, rue des Capucines, Paris 2nd, in the autumn of 2004. The Lyons Region division (staff of 23 and 24 housekeepers) will remain in Lyons (29, quai Saint-Antoine, Lyons 2nd).

A common employment status, harmonized toolsIn 2003, the labor agreements existing at GECINA andSIMCO were harmonized, leading to the adoption of a newsocial and economic unity since the two companies mergedin December 2003. Since January 2004, employees in all the of the GECINA Group’s companies share the sameemployment status, which defines new conditions for working together.

This dynamic was complemented by the upgrade of ITsystems, to the advantage of the Group and its employees.Launched by a study in the first half of 2003, the convergenceof IT systems was effective as of January 5, 2004.

All the administrative staff was trained, first, to introducethem to the system and, then to allow them to exploit all itspossibilities. Upstream from such training programs workinggroups were formed and, over several weeks, they comparedwork processes in order to choose and improve those thatwere in the final selection. The leaders and members of theworking groups became facilitators in the in-house programsorganized to train Group employees.

During this period of integration, a special effort was made in internal communication in order to provide the staff withregular information and a new dynamic was created in the Group. The publication of a newsletter on the merger,the introduction of an intranet tool “mon.gecina.fr”, and the meetings held to inform management helped to create a Group spirit.

The prime objective in 2003 was the successfulintegration of the GECINA and SIMCO teams in a spirit of cooperation and mutual respect.

Integration facilitated

3-5, boulevard de la Madeleine - 75001 Paris

21

Sustainable development

Principles of actionThe principles of action that motivate Group employeesin the exercise of their jobs are based on respect for legalrequirements, the environment, health and safety. Valuesof mutual respect, fairness, solidarity and professionalismbolster GECINA’s integration of sustainable developmentat the heart of its redeployment strategy. Listening toclients, transparency vis-à-vis shareholders, dialogue withGECINA’s partners and suppliers are part of daily life forthe men and women who work for the GECINA Group.

Concrete measures Many measures are applied on a day-to-day basis. Thecompetitiveness of real estate proposals from the point ofview of environmental protection is a constant priority forthe Group. In 2003, GECINA invested 10.5 million eurosfor the maintenance and renovation of apartments andoffices (painting, plumbing, flooring, etc.), while capitalexpenditures for major restructuring and improvements in apartments and offices totaled 59.9 million euros.Within the framework of its sustainable development,GECINA pays special attention to issues of risk andsustainable development. A comprehensive analysis ofground pollution risks is a required stage in GECINA’sinvestigation of new investment possibilities. For thisreason, high-yield projects have been turned downbecause the buildings had been constructed on pollutedland and the economic, environmental or healthconsequences for the local population were unknown.The technical equipment and raw materials GECINA usesin its development projects are chosen for theirenvironmental properties and their durability. GECINAalso complies with current regulations that are specific to the real estate market (asbestos, lead in paint,Legionnaire’s disease, fire safety, elevators, etc.)1. A riskmanagement team is in charge of monitoring, controllingand advising on any possible environmental risks in orderto anticipate any incidents.

Specific services GECINA clients have access to a 24-hour emergencyassistance service since 2002. A telephone contact isprovided and skilled Company employees are on duty tofield the calls. The goal is to reduce the materialconsequences of any delayed response to an incidentthat might have negative consequences for GECINA orits clients. For maximum efficiency, a crisis cell has alsobeen set up with a pluridisciplinary team to deal withmajor events The unit combines skills in the field of IT,technical questions, legal requirements, communication,human resources, etc.

A committee for quality and sustainabledevelopment A committee for quality and sustainable developmentcomprised of four Board members was formed at thebeginning of 2003 to promote and pilot all initiatives insupport of quality and sustainable development. In 2003,it focused on risk management prevention in liaison withthe risk manager. In 2004, it will study the introductionof standards against which to measure quality and clientsatisfaction.

GECINA’s commitment is illustrated by a whole series of actions in response to the Group’s increased awareness of its environmental, social and society-based responsibilities.The creation of an autonomous Risk Management departmentin 2001 and, recently, of a committee of Directors dedicated to quality and sustainable development incorporate this objective at a practical level in the Group’s businesses.

1 GECINA’s industrial and environmental risks and its prevention policy are presented inthe management report.

A commitment that involves everyone

Commercial real estate

53%

79%

60%

of the Group’s rental income in 2003 was fromcommercial properties.

of commercialproperties wereconcentrated in primeParis business districtsas of December 31,2003.

of the Group’s rentalincome in 2003 wasfrom properties with a surface area of morethan 5,000 sq.m.

In the last two years, GECINAhas put together a portfolio of commercial propertiesthat is a source of growth and the creation of value in the medium term. Its highlyselective position enabled the Group to move forward in an uncertain economic environment in 2003.

22

23

An active and selective development policy

10-12, place Vendôme75001 Paris

24

3, place de l’Opéra75002 Paris

2003, a second year of rental marketadjustments in Ile-de-FranceWith weak growth in GDP, the year 2003 representedthe third worst economic performance since the SecondWorld War. The job market remained depressed.Unemployment continued to rise, reaching an averageestimated at 9.5% in 2003, versus 9.0% in 2002.

In such an economic environment, the market for officereal estate in Ile-de-France showed rather goodresistance. The fourth quarter of 2003, which wasparticularly active in terms of both supply and demand,offset the first three quarters, which were disappointing,making the year’s results better than expected.

In 2003, the supply increased, but at a slower pace thanin 2001 and 2002. As of December 31, 2003, CBRE-Bourdais estimated at 2,934,400 sq.m. the surfacearea immediately available in Ile-de-France, representing a moderate increase of 12%. This growth was nothomogeneous. Certain sectors recorded significantincreases of approximately 48% (close suburbs north,east and south of Paris) and 21% in Paris in a year,whereas other zones reported more contrasted trends: -2% at La Défense and -5% in the outlying suburbs1.

In Paris, the vacancy rate was the lowest in Ile-de-Franceat 5%. La Défense reported a vacancy rate of 8%.

Altogether, at 6.5%, this indicator for Ile-de-Francepractically stabilized after several years of rapid growth2.

With 1,708,200 sq.m. in placement (510,000 sq.m. inthe last quarter alone), demand was satisfied (space rentedor acquired by clients in Ile-de-France) at a level similar to that reported in 2001, and up 11.5% from 2002. Of this total, sales1 to occupants representedapproximately 300,000 sq.m. Transactions of more than5,000 sq.m. drove the market, showing strong growthcompared with 2002 – 810,000 sq.m. were placed in this segment, versus 630,000 sq.m. in 2002. Overall, 71 transactions of more than 5,000 sq.m. were recorded in 2003, compared with 47 in 2002. The strongestgrowth was reported in the 5,000 sq.m. to 10,000 sq.m.segment, with 41 transactions in 2003, up from 24 in 20022.

The choice of a site for corporate relocation is oftendecided on the basis of trends in rental costs. Despite relative stabilization in the third quarter, rentalscontinued their readjustment in 2003. The weightedaverage of rentals in Ile-de-France for new, restructuredor renovated buildings stood at 310 euros sq.m./year(excluding VAT and operating costs), down 9% in nominal value in a year1.

The most significant market corrections were observed in business districts in and around Paris. The average

3-5, boulevard de la Madeleine 75001 Paris

1 Source: CB Richard Ellis Bourdais.2 Source: Catella Property Group.

25

78-80, rue de la Villette69003 Lyon

value of transactions of more than 5,000 sq.m. amounted to 420 euros sq.m./year (excluding VAT and operating costs) in the business district west of Paris and 603 euros sq.m./year(excluding VAT and operating costs) in Paris1. Prime real estatefollowed a similar trend: - 5% to -7% in central Paris and - 7% to - 10% at La Défense2. This decline wasaccompanied by enhanced commercial advantages for renters,including rental franchises, contribution to works, progressiverent structures, etc. Conversely, new renters agreed to contractlong leases (6 to 9 years or more) for large surface areas.

An active market for offices in Lyons3

The year 2003 was marked by a sustained volume of transactions in Lyons, confirming this market’s reputation as a good investment. Commercial rental transactions totaled172,600 sq.m., up 8.5% from 2002 and at a higher level thanthe average of the last ten years. Space available in less than a year increased by 34% in 2003 to 268,500 sq.m. at the end of the year. This figure included 91,800 sq.m. of new offeringsand 176,700 sq.m. of previously occupied properties, for atotal vacancy rate of 5.9%. The increase in supply in 2003ensured stability in rental fees, which stood at 180 euros sq.m./year (excluding VAT and operating costs) for new constructionsand 121 euros sq.m./year (excluding VAT and operating costs)for previously occupied properties at the end of the year.

Prime office yields in Europe in 2003

Paris (central business district) 5.90%London West End 5.75%Frankfurt 4.80%Madrid 6.00%Source: CB Richard Ellis Bourdais.

Investment in offices was down slightly in 2003, with a total of 132,500 sq.m. versus 144,500 sq.m. in 2002. This contraction in investment was the resultof a reduction in office space supply that led to a general decrease in profitability rates. The continued major presence of German investmentfunds ensured support for market values in 2003.

Retail leases, a lackluster marketThe decline in consumer spending affected the development plans of major distributors, who focused on opening stores of less than 500 sq.m. in recognized commercial sectors. Luxury brands were particularly active in downtownareas, while retail parks in the suburbs attracted well-known brand names.

Rental income was down slightly with contrastingtrends. Rents for well-located stores of less than 500 sq.m. remained stable, or even rose slightly,whereas rents declined for retail premises between500 sq.m. and 2,500 sq.m. or in less desirablelocations.

1 Source: Catella Property Group.2 Source: CB Richard Ellis Bourdais.3 Source: Atis Real Auguste-Thouard.

Prime rentals in Europe in 2003 (sq.m./year - excluding VAT and operating costs)

London West End 850 eurosParis (central business district) 675 eurosFrankfurt (central business district) 420 eurosMadrid 312 eurosSource: CB Richard Ellis Bourdais.

>>

>>

26

47, rue Louis-Blanc92215 La Défense

A dynamic investment market

Despite the adjustment in the rental market, the Frenchmarket confirmed in 2003 that it continues to exert an attraction. Comparisons with other Europeanmarkets are to its advantage; rent levels have growthpotential in spite of their current decline; and themarket is fluid. 9.5 billion euros were invested in corporate real estate in France in 2003, the samevolume as in 2002 and 2001 (excluding the FranceTélécom portfolio)1. In an uncertain economicenvironment, investors preferred traditional products,which involve fewer risks. So 80% of investmentsconcerned offices, the most liquid asset, with 92% inIle-de-France, and 75% represented acquisitions thatwere already rented. Commercial space attracted 10%of the total invested in 2003, while warehousesaccounted for the remainder, i.e. 10%1.

Among the investors, German funds remained the mostactive market players, with 37% of investments in 2003.Their acquisitions were primarily composed of new or restructured buildings in good locations with securedrents. With 30% of total acquisitions, French investors, in particular real estate firms and insurance and life-insurance companies, remained active. North American and British investors accounted for 9%of total investments respectively. Lastly, in 2003, MiddleEastern funds returned to France, to represent 7.5% of acquisitions, and 65% of sales were negotiated

with French investors – occupants, developers, real estatefirms and insurance companies.

Among the foreign sellers, North Americans continued to glean capital gains on assets that have risen in value,representing 25% of total sales. The British, Dutch and Germans sold little in 20031.

Ile-de-France drained 78% of the amounts invested.Outside of Paris, it was the Lyons region that remainedthe most attractive with real estate resources that meetinternational standards and a rental market for previouslyoccupied properties. In 2003, this region accounted for 22% of French investments1.

Real estate continued to attract investment in 2003.Despite the rise in interest rates at the end of 2003, and a slight decrease in the immediate yield on officerentals of approximately 25 basis points, the spreadremained at 140 basis points to the advantage of realestate yields at the end of 2003.

A diversified market with many players

Corporate real estate assets are owned by many leasingoperators, including listed real estate firms, insurancecompanies, SCPI investment vehicles and a growingnumber of foreign operators. With a total of 45 million sq.m., Ile-de-France is considered to beEurope’s leading office market, ahead of London,

19, rue de la Villette 69003 Lyon

1 Source: CB Richard Ellis Bourdais.2 Source: Catella Property Group.

27

9-15, avenue Matignon75008 Paris

and also one of the most diversified2. Office space in Ile-de-France basically involves three main centralmarkets. The central Paris business district with 8.3 million sq.m. accounts for 18.4% of the total Ile-de-France market; the western suburbs of Paris with6.4 million sq.m. represents 14%; and the secondaryoffice areas of Paris (Front de Seine, Montparnasse, Garede Lyons/Bercy/Paris Rive Gauche) add 1.5 million sq.m. Atthe same time, other areas are emerging like thenorthwest suburbs of Paris (Clichy, Saint-Ouen and Saint-Denis), and in general, all the municipalities in the immediately surrounding suburbs, such as Montreuil,Charenton and Montrouge. Further out in the suburbs,there are micro markets at Saint-Quentin, Marne-la-Vallée,Vélizy-Villacoublay, etc.)1.

In 2003, Lyons confirmed its position as the second largestFrench office market after Ile-de-France. Rental office spacewas estimated at 4 million sq.m. at the end of 20032.

At the end of 2003, the GECINA Group owned 929,621 sq.m. of offices and stores, 803,937 sq.m. of which were in Paris and its suburbs, a figure thatrepresents less than 2% of office space (excluding stores) in Ile-de-France.

Although it is one of the largest listed French real estatefirms, GECINA does not have a dominant position in the commercial real estate market. At the same time,the Group’s office rental transactions accounted forapproximately 2% of the demand satisfied in Ile-de-France.

A quality portfolio

As of December 31, 2003, the GECINA Group’sportfolio of commercial assets was valued at 3.87 billion euros, with 3.78 billion euros located inParis and its suburbs. The value of commercial assets in the first, second, eighth, sixteenth and seventeentharrondissements, represented 51.9% of totalcommercial assets, while the value of assets in the western suburbs (Boulogne, Levallois, Issy-les-Moulineaux, etc.) accounted for 26.8%.

These assets form a varied offering in terms of both typesof office space (Haussmann-style, recent constructions,stores on the ground floor, etc.) and rental surface area(from small to large). This diversity makes it possible to satisfy a wide range of clients and provides a buffer in the event of an economic downturn. GECINA’s corporate clients work in many sectors, thereby reducingthe Group’s rental risks. In 2003, the ten largest rentersaccounted for only 14.0% of the Group’s rental income.With an annual rent of 13.3 million euros, the largestuser represented 2.7% of the Group’s rental income in 2003. The fifth and the tenth largest accounted for 6.0 million euros and 3.3 million euros, respectively,representing 1.2% and 0.7% of the Group’s rental income in 2003. At the same time, rents for the ten largest commercial properties contributed 15.7% of GECINA’s rental income in 2003.

Rental income by business sector in 2003

40% Services

4% Real estate

3% Insurance

3% Media, TV

6% Other

8% Banking

3% Telecommunications

4% Luxury - retail

13% Industry

13% Administration

3% Information technology

1 Source: Catella Property Group.2 Source: Atis Real Auguste-Thouard. .

28

In 2003, commercial rental activities continued toconcentrate on the most profitable segments.Consequently, co-op properties and real estate located in less desirable areas were sold. Meanwhile, in May 2003GECINA acquired a 3,894 sq.m. office building with stores at 159, avenue Charles-de-Gaulle in Neuilly-sur-Seine for 15.8 million euros. After restructuring, this building will form a property of 10,000 sq.m. with 157, avenueCharles-de-Gaulle, which the Group also owns.

In a profitable real estate investment market, GECINAintends to pursue its arbitrage policy for second-tiersuburban assets and mature assets. This policy aims to reduce the rental risks of the commercial portfolio and to enhance prospects for growth in rental income. For 2004, the Group targets 200 million euros in blocksales. At the same time, GECINA implements an opportunistic asset acquisition policy that presents real potential in terms of short-term return on investment.GECINA has thus signed a preliminary agreement to acquire 21,000 sq.m. of office space located in the 17th arrondissement of Paris with a market value of 112 million euros.

Block sales of primarily commercial properties in 2003

Sales of former GECINA assets to Westbrook

Paris

• 217, rue du Faubourg-Saint-Honoré – Paris 8th

(3,594 sq.m. of commercial space and 3,376 sq.m. of residential space)

Sales of former SIMCO assets to Westbrook

Paris

• 91, rue du Cherche-Midi – Paris 6th

(2,595 sq.m. of commercial space)

• 4, rue du Commandant Rivière – Paris 8th

(815 sq.m. of commercial space and 722 sq.m. of residential space)

• 71, avenue Franklin-Roosevelt – Paris 8th

(1,555 sq.m.of commercial space and 762 sq.m. of residential space)

Other assets sold Paris region

• Boulevard de l’Yerre – Evry (16,944 sq.m. of commercial space)

% of rental income % of total area

Less than 2,000 sq.m. 11% 11%

2,000 sq.m. to 5,000 sq.m. 28% 32%

5,000 sq.m. to 10,000 sq.m. 29% 28%

More than 10,000 sq.m. 31% 29%

Commercial rental properties by size

24, rue Royale75008 Paris

29

8, avenue Delcassé 75008 Paris

4, allée Ferrand 92200 Neuilly-sur-Seine

Launch of development operationsIn 2003, GECINA developed a strategy to increase the value of its commercial portfolio, thereby meeting the criterion of a minimal gross yield of 7.5%. Mainly based on major restructuring operations in Lyonsand Paris, this strategy aims to maximize the creation of value in the Group in terms of both profitability and net asset value.

In Lyons, work was completed on the Dauphiné Part-Dieuproject, which was begun in the autumn of 2002. The delivery of this 13,000 sq.m. office building on landowned by GECINA took place on February 3, 2004, ahead of the scheduled date. The investment totaled 28.0 million euros.

In Paris, the Volney-Capucines office complex – 10,000 sq.m.of office space near the Opera and the place Vendôme – is being developed to become the Group’s future headquarters. Delivery is scheduled for the fourth quarterof 2004. This operation on a building acquired in July2002 represents an investment of approximately 25.5 million euros in addition to the acquisition price of 48.0 million euros.

In January 2003, GECINA launched a project to restructureand give new life to the Beaugrenellle mall in the 15th

arrondissement of Paris through a joint venture (50% - 50%) with a major commercial real estate operator, Apsys (see page 31).

Lastly, GECINA plans to build 8,281 sq.m. of offices and 2,190 sq.m. of stores at 122, avenue du GénéralLeclerc in Boulogne. Very close to major development projects in the western suburbs (restructuring of the Pontde Sèvres intersection, development of the site of the former Renault automobile plant), the operation wouldincrease the Group’s real estate holdings at this address to almost 20,000 sq.m. of offices and stores. Designed by the architectural firm of ARTE Charpentier et Associés, the project was granted a building permit in February2004. Delivery is scheduled for 2006. The preliminaryinvestment is estimated at 34.0 million euros for an estimated gross yield of more than 8.5%.

All of the Group’s development projects are major relays of growth from 2004 to 2007, representing a total of 90,000 sq.m. and a potential of additional rental income estimated at 27.0 million euros.

30

Good resistance of rental activitiesIn 2003, the GECINA Group’s rental income from commercial properties totaled 259.8 million euros, up 5.0% from GECINA-SIMCO’s 2002 pro forma commercial rental income. For the first time in 2003,commercial rental transactions accounted for more than50% of the Group’s rental income. Excluding propertiesfor sale and on a constant basis, rent revaluation stood at 3.1%.

Despite adjustments to market rental prices, the Group’sre-letting rates increased by 18.2% compared with thelevels in the previous leases. Re-let properties represented36,720 sq.m. in 2003. For example, 7,899 sq.m. at 14, boulevard Général Leclerc in Neuilly-sur-Seine were re-letfor 457.0 euros sq.m./year (excluding VAT and operatingcosts), representing an increase of 21.5% compared withthe previous rent. The Group also rented 2,950 sq.m. at55, avenue de Colmar in Rueil-Malmaison for 250.0 eurossq.m./year (excluding VAT and operating costs),representing an increase of 10.1%. GECINA’s formerheadquarters at 2ter, boulevard Saint-Martin, Paris 10th,rapidly found a renter for their 6,300 sq.m. at 354.0 eurossq.m./year (excluding VAT and operating costs).

In addition, all of the 2,164 sq.m. at 12, rue de Torricelli,Paris 17th, were rented for 457.0 euros sq.m./year (excluding VAT and operating costs). In a similar fashion,all of the 1,500 sq.m. in the restructured building at 9, avenue de Paris in Vincennes was rented for anaverage of 290.5 euros sq.m./year (excluding VAT and operating costs).

Following the market, vacancy rates increased slightly in 2003. The financial vacancy rate stood at 5.1% in December 2003, compared with 3.7% in December2002. The physical vacancy rate was 3.8% in December2003, while the rate for Ile-de-France leveled off at 6.5%.

In 2003, GECINA’s reversionary potential rental income,the gap between market prices and rents in the leases,declined owing to new portfolio rentals and adjustmentsin the rental market. This market was, nevertheless,estimated at 16.7 million euros as of December 31,2003, over the next four years provided that the currentlevel of market rents is maintained.

(%)

12.95 12.96 12.97 12.98 12.99 12.00 12.01 12.02 12.03

90.192.4

93.395.7 96.4

98.8 98.896.3 94.9

9, avenue de Paris94300 Vincennes

Financial occupancy rate of commercial properties

31

23-29, rue de Châteaudun75009 Paris

This potential will be liberated as leases expire, are broken or are renewed. Leases expiring in 2004represent 48,266 sq.m. with an average rent of 234.0 euros sq.m./year (excluding VAT and operatingcosts), versus a market rent of 259.0 euros sq.m./year(excluding VAT and operating costs). This estimate wasalso conducted for 2005, 2006 and 2007 on a lease to lease basis. Leases will expire in the next three yearsfor 82,435 sq.m., 80,655 sq.m. and 102,855 sq.m.,respectively, with an average rental price of 324.0 euros, 255.0 euros and 234.0 euros sq.m./year (excluding VAT and operating costs), compared with a market rental price of 374.0 euros, 305.0 euros and301.0 euros sq.m./year (excluding VAT and operatingcosts).

Beaugrenelle mall: a landmark project

After consulting the main French commercial real estate operators, GECINA joined forces with Asys, Eurisand Francarep in January 2003 to restructure and givenew life to the Beaugrenelle mall. The 50%-50% joint venture was formed through the sale of 50% of the shares of SCI Beaugrenelle, which owns the mall.The project involves the complete architectural and technical renovation of the site with an extension to 40,000 sq.m. An architectural firm was selected after competing projects were submitted in April 2003.The next step is to apply to the competent localauthorities for the building permit and the other requiredauthorizations. Completion is scheduled for 2007. The investment will total 115 million euros and is designed to meet the objective of a gross yield of more than 7.5%.

1995 1996 1997 1998 1999 2000 2001 2002 2003

-8.5n.s

-1.3

2.0

6.5 5.8

8.0

5.3

3.1

(%)

Growth in commercial rental income on a constantbasis and excluding properties for sale

32

Istarrdt

29,647 sq.m.

IIndarrdt

46,589 sq.m. IIIrdarrdt

2,464 sq.m.

IVtharrdt

603 sq.m.

Vtharrdt

158 sq.m.

VItharrdt

14,350 sq.m.

VIItharrdt

9,147 sq.m.

VIIItharrdt

128,933 sq.m.

IXtharrdt

27,852 sq.m. Xtharrdt

9,682 sq.m.

XItharrdt

2,549 sq.m.

XIItharrdt

20,836 sq.m.

XIIItharrdt

3,576 sq.m.XIVth

arrdt

11,694 sq.m.

XVtharrdt

53,613 sq.m.

XVItharrdt

18,647 sq.m.

XVIItharrdt

33,360 sq.m.

XVIIItharrdt

6,448 sq.m.

XIXtharrdt

7,750 sq.m.

XXtharrdt

1,041 sq.m.

PARIS428,940 sq.m.

PARIS REGION313,916 sq.m.

LYONS86,005 sq.m.

OTHER4,072 sq.m.

Commercial properties

Commercial properties comprising 929,621 sq.m. of offices and

stores, 832,933 sq.m. of which were in operation as of December 31, 2003.

Excellent locations with 285,028 sq.m.

in the first, second, eighth, ninth, sixteenth and seventeenth

arrondissements, and 242,596 sq.m. in the western suburbs

(Boulogne, Courbevoie, Levallois, etc.).

(in operation as of December 31, 2003)

33

%of rental income

% of revalued block value 1

% of rental income

% of revalued block value 1

1 On the basis of block valuationappraisals, net selling prices, of real estate assets.

2.2 %

ParisParis regionLyons

After 19751960-1975Haussmann-styleMiscellaneous

1.5 % 1.0 %2.0 %

69.2 % 63.5 %63.3 %66.4 %29.3 %31.4 %

19.2 %

15.5 %

20.0 %

15.5 %

Primarily commercial properties in operation

Paris 1st

7, place de Valois - 11, rue des Bons-Enfants 1800 0 0 1,028 1,028 GECITER55, boulevard de Sébastopol 1880 8 577 763 1,340 GECINA10/12, place Vendôme 1750 0 0 8,823 8,823 SIF16, rue Duphot 1988 0 0 1,405 1,405 GECINA8/10, rue Villedo 1970 0 0 1,366 1,366 GECITER1, boulevard de la Madeleine 1996 6 548 1,828 2,376 SIF3/5, boulevard de la Madeleine 2002 0 0 13,516 13,516 SIF

Paris 2nd

35, avenue de l’Opéra - 6, rue Danielle-Casanova 1878 10 545 1,739 2,284 GECITER64, rue Tiquetonne - 48, rue Montmartre 1850 52 4,484 5,719 10,203 GECINA26/28, rue Danielle-Casanova 1800 3 252 1,130 1,382 GECITER36, rue des Jeûneurs 1869 11 630 1,205 1,835 GECITER5, rue de Marivaux 1790 0 0 1,420 1,420 GECITER3, rue du Quatre-Septembre 1870 6 343 1,094 1,437 GECINA10, rue du Quatre-Septembre79, rue de Richelieu - 1, rue Ménars 1870 1 105 2,555 2,660 GECITER120, rue Réaumur 1880 0 0 1,198 1,198 GECITER6 bis, rue Bachaumont 1880 13 1,000 1,092 2,092 GECINA4, rue de la Bourse 1750 10 823 3,952 4,775 SAS FEYDEAU-

BOURSE38, rue des Jeûneurs 1870 5 307 3,617 3,924 SCI du 38 rue

des JEUNEURS37, boulevard des Capucines 1880 0 0 584 584 GECINA3, place de l’Opéra 1870 0 0 4,591 4,591 SCI TERNES-

OPERA31/35, boulevard des Capucines 1992 0 0 5,753 5,753 SCI CAPUCINES5, boulevard Montmartre 1995 17 1,342 6,135 7,477 SCI du 5 bld

MONTMARTRE29/31, rue Saint-Augustin 1996 6 445 4,805 5,250 SCI SAINT-

AUGUSTIN

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Geographic breakdown of commercial properties in operation

as of December 31, 2003

Breakdown of commercial properties in operation by type

as of December 31, 2003

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Paris 3rd

4, rue Beaubourg 1928 0 0 2,329 2,329 GECITER

Paris 6th

77/81, boulevard Saint-Germain 2002 0 0 14,141 14,141 SCI 77,81 bldST GERMAIN

Paris 7th

3/7, rue de Monttessuy 1994 1 97 8,450 8,547 SCI MONTTESSUY

Paris 8th

151, boulevard Haussmann 1880 16 1,271 2,085 3,356 GECITER153, boulevard Haussmann 1880 17 666 4,021 4,687 GECITER155, boulevard Haussmann 1880 11 449 3,676 4,125 GECITER22, rue du Général-Foy 1894 1 33 2,579 2,612 GECITER50, rue des Mathurins 1840 0 0 913 913 GECITER43, avenue de Friedland - rue Arsène-Houssaye 1867 0 0 1,672 1,672 GECITER31, rue d’Amsterdam 1895 9 760 1,335 2,095 GECINA57, avenue Franklin-D-Roosevelt 24, rue du Colisée 1890 4 127 1,708 1,835 GECITER169, boulevard Haussmann 1880 8 661 1,069 1,730 GECINA41, avenue Montaigne - 2, avenue de Marignan 1924 2 106 1,958 2,064 GECITER64, rue de Lisbonne - rue Murillo 1987 0 0 4,700 4,700 GECINA59/61, rue du Rocher 1964 0 0 3,657 3,657 GECINA10, rue Saint-Philippe-du-Roule 1880 0 0 1,468 1,468 SIF123, rue du Faubourg-Saint-Honoré 1880 0 0 1,383 1,383 SIF44, avenue des Champs-Elysées 1925 0 0 5,023 5,023 SIF30, place de la Madeleine 1900 2 279 1,891 2,170 SIF29, rue du Colisée 1950 0 0 686 686 SIF5, rue Tronchet 1890 8 242 1,222 1,464 SIF18/20, place de la Madeleine 1930 0 0 3,204 3,204 SA SPIPM75, rue du Faubourg-Saint-Honoré 1800 1 15 274 289 SA HOTEL D’ALBE6, rue de Penthièvre 1850 0 0 1,795 1,795 SCI du 6 rue

de PENTHIEVRE5, rue Royale 1850 1 128 2,149 2,277 SNC rue ROYALE7, rue Monceau 1880 8 737 995 1,732 GECINA26, rue de Berri 1971 0 0 2,840 2,840 GECITER38, avenue George-V - 53, rue François-Ier 1961 0 0 1,352 1,352 GECITER50, rue de Londres 1993 0 0 1,480 1,480 SCI SB LONDRES66, avenue Marceau 1997 0 0 4,660 4,660 SIF9/15, avenue Matignon 1997 35 2,585 9,477 12,062 SIF24, rue Royale 1996 0 0 2,896 2,896 SIF7, rue Tronchet NC 0 0 1,336 1,336 SIF9, rue Tronchet NC 0 0 1,628 1,628 SIF55, avenue George-V 1995 0 0 8,575 8,575 SA HOTEL D’ALBEParking George-V 1977 0 0 0 0 SA HOTEL D’ALBE8, avenue Delcassé 1988 0 0 9,783 9,783 SCI DELCASSE55, rue d’Amsterdam 1996 0 0 11,363 11,363 SCI du 55 rue

d’AMSTERDAM162, rue du Faubourg-Saint-Honoré 1953 0 0 1,941 1,941 GECITER89/91, rue du Faubourg-Saint-Honoré 1972 0 0 758 758 SIF17, rue du Docteur-Lancereaux 1972 0 0 5,428 5,428 GECINA20, rue de la Ville-l’Evêque 1967 0 0 5,450 5,450 GECINA27, rue de la Ville-l’Evêque 1962 0 0 3,169 3,169 GECINA7, rue de Bucarest 1972 0 0 2,749 2,749 GECINA

Paris 9th

21, rue Auber - 24, rue des Mathurins 1866 6 300 1,227 1,527 GECITER44, rue Blanche 1890 12 957 1,158 2,115 GECITER21, rue Drouot -12, rue de Provence 1861 5 140 857 997 GECITER32, boulevard Poissonnière - 2, rue du Faubourg-Montmartre 1900 0 0 1,138 1,138 GECITER1/3, rue de Caumartin 1780 4 266 2,608 2,874 SIF6, rue d’Amsterdam (Le VERMEER) 1990 0 0 1,771 1,771 GECINA26/28, rue Saint-Georges 1995 0 0 3,383 3,383 SA 26,28 rue

Saint-Georges23/29, rue de Châteaudun 1995 0 0 11,968 11,968 SA 23,29 rue de

Châteaudun32, boulevard Haussmann 2002 0 0 3,050 3,050 SIF

Paris 10th

21, rue d’Hauteville 1850 11 750 1,850 2,600 GECINA2ter, boulevard Saint-Martin - 1ter, rue René-Boulanger 1972 0 0 6,400 6,400 GECINA

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Paris 12th

193, rue de Bercy 1972 0 0 15,899 15,899 GECINA58/62, quai de la Rapée (parking) 1990 0 0 0 0 S.P.L.

Paris 14th

11, boulevard Brune 1973 0 0 2,781 2,781 GECINA37/39, rue Dareau 1988 0 0 4,857 4,857 GECINA69, boulevard Brune - 10/18, rue des Mariniers 1970 0 0 2,221 2,221 GECINA

Paris 15th

33, avenue du Maine (Tour MAINE-MONTPARNASSE -50th floor) 1991 0 0 1,822 1,822 GECINA7/11, place des Cinq-Martyrs-du-Lycée-Buffon 1992 0 0 8,355 8,355 SCI SB NORD-PONT28/28 bis, rue du Docteur-Finlay - 5, rue Sextius-Michel 1960 0 0 3,444 3,444 GECITER31, quai de Grenelle (MERCURE) 1973 0 0 8,250 8,250 GECINA34, rue de la Fédération 1973 0 0 6,579 6,579 GECINA

Paris 16th

43, avenue Marceau - 14, rue Bassano 1928 0 0 1,314 1,314 GECITER100, avenue Paul-Doumer 1920 0 0 294 294 GECINA58/60, avenue Kléber 1992 0 0 4,789 4,789 SA SADIA28, rue Dumont-d’Urville 1880 0 0 1,382 1,382 GECINA17, rue Galilée 1960 0 0 680 680 GECITER24, rue Erlanger 1965 0 0 5,956 5,956 SCI du 24 rue

ERLANGER

Paris 17th

63, avenue de Villiers 1880 8 406 2,912 3,318 GECITER12/12 bis, rue Torricelli 1800 0 0 2,620 2,620 GECITER45, avenue de Clichy - 2/4, rue Hélène 1991 0 0 3,900 3,900 GECINA32/34, rue Guersant 1992 0 0 13,175 13,175 SP216, rue Médéric 1970 0 0 1,338 1,338 GECINA251, boulevard Pereire 1973 0 0 2,792 2,792 GECINA

Paris 18th

88/92, boulevard Ney 1972 0 0 6,260 6,260 GECINA

Paris 19th

43 bis/45, rue d’Hautpoul 1977 12 786 2,988 3,774 GECINA96/100, rue Petit 1977 0 0 4,185 4,185 SA PARIGEST

Subtotal properties in operation Paris 330 23,162 368,796 391,952

Versailles (78000)Petite place - 7, rue Sainte-Anne 1968 0 0 1,630 1,630 GECINA

Montigny-le-Bretonneux (78180)1, avenue Niepce 1984 0 0 4,050 4,050 GECINA5/9, avenue Ampère 1986 0 0 5,534 5,534 GECINA4, avenue Newton 1978 0 0 4,398 4,398 GECINA6, avenue Ampère 1981 0 0 3,204 3,204 GECINA

Guyancourt (78280)3/9, rue Hélène-Boucher 1990 0 0 10,242 10,242 GECINA

Puteaux (Paris-La Défense) (92000) La Défense - Tour Franklin 1973 0 0 12,637 12,637 GECINALa Défense - Tour Atlantique 1970 0 0 6,376 6,376 GECINALa Défense - Tour Franklin 1973 0 0 4,559 4,559 GECINA

Courbevoie (Paris-La Défense) (92052)Le Lavoisier - 4, place des Vosges 1989 0 0 8,473 8,473 GECITER

Boulogne-Billancourt (92100)40, rue de l’Est 1989 0 0 2,024 2,024 GECINA37/39, rue Marcel-Dassault 1993 0 0 1,343 1,343 GECINA73/77, rue de Sèvres 1973 0 0 5,790 5,790 GECINA218, boulevard Jean-Jaurès 1988 0 0 1,293 1,293 GECINA32/36, rue de Bellevue 1988 0 0 4,006 4,006 GECINA220/224, boulevard Jean-Jaurès 1988 0 0 1,986 1,986 GECINA50, rue Reinhardt - 51, rue Diaz 1980 0 0 1,120 1,120 GECITER52, rue Belle-Feuille 1980 0 0 1,066 1,066 GECITER150, route de la Reine 1990 0 0 4,666 4,666 SCI du 150 route

de la REINE148, route de la Reine 1997 0 0 4,605 4,605 SCI du 150 route

de la REINE

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42/44, rue de Bellevue 1989 0 0 4,121 4,121 SCI SEVRES-BELLEVUE150, rue Gallieni - rue Henri-Martin 1970 0 0 542 542 GECINA38, rue Vauthier 1974 0 0 3,181 3,181 GECINA

Clichy (92110)98, boulevard Victor-Hugo 1970 0 0 5,361 5,361 GECINA6, boulevard du Général-Leclerc 1972 0 0 7,728 7,728 GECINA

Issy-les-Moulineaux (92130)12, boulevard des Iles 1991 0 0 5,370 5,370 GECINA

Suresnes (92150)10, rue du Chevreul 1991 0 0 2,680 2,680 GECINA

Vanves (92170)66/68, rue Jean-Bleuzen 1990 0 0 2,960 2,960 GECINA17/19, rue Ernest-Laval 1976 0 0 1,518 1,518 GECINA

Neuilly-sur-Seine (92200)159/161, avenue Achille-Peretti17, rue des Huissiers 1914 0 0 3,830 3,830 GECITER159, avenue Charles-de-Gaulle 1970 0 0 3,894 3,894 GECITER12/16, boulevard du Général-Leclerc35, rue du Pont 1973 8 541 15,867 16,408 GECINA157, avenue Charles-de-Gaulle 1959 0 0 5,605 5,605 GECITER6 bis/8, rue des Graviers 1959 0 0 4,544 4,544 GECINA195, avenue Charles-de-Gaulle 1960 0 0 1,338 1,338 GECINA4, allée Ferrand 1992 0 0 878 878 GECINA163/165, avenue Achille-Peretti 1970 0 0 2,536 2,536 GECINA163/165, avenue Charles-de-Gaulle 1967 0 0 1,680 1,680 GECINA

La Défense (92215)47, rue Louis-Blanc 1992 0 0 7,609 7,609 GECINA

Levallois-Perret (92300)97, rue Anatole-France 1986 0 0 1,379 1,379 GECINA109/113, rue Victor-Hugo 1992 0 0 4,459 4,459 GECINA68 bis, rue Marjolin 1980 0 0 3,640 3,640 GECITER16, rue Paul-Vaillant-Couturier 1982 0 0 2,078 2,078 GECINA101/109, rue Jean-Jaurès 1988 0 0 7,174 7,174 GECINA2/4, quai Michelet 1996 0 0 32,960 32,960 SNC MICHELET35, rue d’Alsace 1977 0 0 1,800 1,800 GECINA55, rue Deguingand 1974 0 0 4,525 4,525 SA PARIGEST

Meudon-la-Forêt (92360)2/4, rue Andras-Beck - 5/7, rue Jeanne-Braconnier 1988 0 0 6,315 6,315 GECINA

Rueil-Malmaison (92500)8, rue Henri-Becquerel - 6, rue E. and A.-Peugeot 1987 0 0 4,500 4,500 GECINA55/57, avenue de Colmar97/101, avenue Victor-Hugo 1988 0 0 2,950 2,950 GECINACours Ferdinand-de-Lesseps (VINCI 1) 1992 0 0 25,663 25,663 SP1Place de l’Europe (VINCI 2) 1993 0 0 9,786 9,786 SP1

Montreuil (93100)46, rue de Lagny - 88/92, rue Robespierre 1971 0 0 1,218 1,218 GECINA

Noisy-le-Grand (93160)4/10, la Courtine-Mont-d’Est 1985 0 0 4,675 4,675 GECINA4/10, la Courtine-Mont-d’Est 1980 0 0 4,818 4,818 GECINA

Bagnolet (93170)59, rue Charles-Delescluze 1972 0 0 850 850 GECINA

Créteil (94000)9/11, rue George-Enesco 1975 0 0 9,054 9,054 GECINA

Vincennes (94300)5/7, avenue de Paris 1988 0 0 3,579 3,579 GECINA9, avenue de Paris (Clinique du CHATEAU) 1971 0 0 2,375 2,375 GECINA

Subtotal properties in operation Paris region 8 541 304,042 304,583Subtotal properties in operation Paris + Paris region 338 23,703 672,832 696,535

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Saint-Génis-Pouilly (01630)Technoparc GESSIEN - Bâtiment E’ 1989 0 0 731 731 GECINATechnoparc - Bâtiment E 1989 0 0 731 731 INVESTIBAIL

TRANSACTIONS

Rochegude (26790)Château de ROCHEGUDE 1750 0 0 1,916 1,916 INVESTIBAIL

TRANSACTIONS

Lyon 2nd

27, quai Saint-Antoine 1650 0 0 350 350 GECINA28, quai Saint-Antoine 1650 0 0 45 45 GECINA29/30, quai Saint-Antoine 1650 6 460 2,373 2,833 GECINA

Lyon 3rd

19/21, cours de la Liberté 1850 14 549 1,773 2,322 GECINA74, rue de Bonnel 1986 0 0 1,950 1,950 GECINA21, rue François-Garcin 1989 0 0 1,848 1,848 GECINA19, rue de la Villette 1986 0 0 3,903 3,903 GECINA

Lyon 7th

174, avenue Jean-Jaurès 1950/70/94 0 0 3,783 3,783 GECINA174/188, avenue Jean-Jaurès42, rue Pré-Gaudry 1950/70/94 0 0 12,078 12,078 GECINA75, rue de Gerland 1850/1980/97 0 0 21,834 21,834 GECINA81/85, rue de Gerland 1850/1980/97 0 0 1,635 1,635 GECINA12, cours Gambetta5/6, rue Basse-Combalot 1900 9 688 689 1,377 INVESTIBAIL

TRANSACTIONS

Villeurbanne (69100)63, avenue Roger-Salengro 1981 0 0 2,136 2,136 GECINA1, avenue Paul-Kruger - 51, rue Emile-Decorps 1981 0 0 2,440 2,440 GECINA

Ecully (69130)6, chemin Moulin-Carron 1984 0 0 700 700 GECINA

Irigny (69540)Le BROTEAU 1980 0 0 10,400 10,400 GECINA

Génas (69740)Rue de Genève 1991 0 0 5,565 5,565 GECINA

Subtotal properties in operation Lyons + Lyons region 29 1,697 76,880 78,577

Nantes (44000)49, quai Malakoff - 0 0 1,239 1,239 SCI 16 VE

INVESTISSEMENT

Arras (62004)37, rue Saint-Aubert (SAINT-JEAN) 1970 0 0 2,833 2,833 GECINA

Subtotal properties in operation other regions 0 0 4,072 4,072General total properties in operation French provinces 29 1,697 80,952 82,649General total properties in operation 367 25,400 753,784 779,184

Various sales programs

Paris 12th

173 bis, rue de Charenton (SAINT-ELOI II) 1965 0 0 618 618 GECINA173, rue de Charenton (SAINT-ELOI I) 1961 0 0 141 141 GECINA

Paris 13th

84, boulevard Massena (Tour BOLOGNE) 1972 0 0 270 270 GECINA

Paris 19th

9/13, rue Delouvain 1970 0 0 124 124 GECINA

Total various sales programs Paris 0 0 1,153 1,153

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Longjumeau (91160)162, rue du Président-Mitterrand 1965 1 84 452 536 GECINA

Total various sales programs Paris region 1 84 452 536

Lyon 2nd

26, quai Saint-Antoine - 56, rue Mercière 1650 5 247 370 617 GECINA

Total various sales programs Lyons + Lyons region 5 247 370 617

Montpellier (34000)Avenue Saint-Clément - 2/13, square Murillo 1967 1 69 428 497 GECINA

Total various sales programs other regions 1 69 428 497

Total various sales programs 7 400 2,402 2,802Total GECINA Group primarily commercial assets 374 25,800 756,186 781,986

Under construction

Paris 2nd

122, rue Réaumur - 7/9, rue Saint-Joseph 1890 6 386 3,188 3,574 GECITER14/16, rue des Capucines 1970 0 0 10,570 10,570 GECITER

Paris 9th

16, boulevard Montmartre 1820 36 1,457 3,250 4,707 GECINA

Paris 15th

16, rue Linois (Centre Commercial BEAUGRENELLE) 1979 0 0 13,004 13,004 SCI BEAUGRENELLE

Lyon 3rd

74/78 and 82, rue de la Villette (Part-Dieu) 0 0 13,087 13,087 GECITER

Boulogne-Billancourt (92100)122, avenue du Général-Leclerc 1968 0 0 10,965 10,965 SA PARIGEST

Total buildings under construction 42 1,843 54,064 55,907

La Rente Immobilière

Paris 7th

1/1 bis, avenue de Villars 1880 0 0 2,152 2,152 LRI5, avenue de Villars 1900 0 0 233 233 LRI

Paris 8th

87/89, rue La Boétie 1965 0 0 230 230 LRI9, rue Christophe-Colomb 1996 0 0 996 996 LRI4, boulevard Malesherbes 1880 8 640 990 1,630 LRI11, place de la Madeleine 1880 6 748 1,087 1,835 LRI

Paris 9th

2/6, rue de la Chaussée-d’Antin 1880 8 467 5,256 5,723 LRI

Paris 15th

104/104 bis, rue Saint-Charles 1972 0 0 1,649 1,649 LRI

Paris 16th

25, rue Jean-Giraudoux 1972 0 0 1,043 1,043 LRI

Paris 17th

62, rue Ampère (parking) 0 0 0 0 LRI69, rue Ampère 1962 0 0 1,540 1,540 LRI5, rue Alfred-Roll (parking) 0 0 0 0 LRI

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Nanterre72/78, avenue Georges-Clemenceau 1970 0 0 2,490 2,490 LRI

Total La Rente Immobilière 22 1,855 17,666 19,521

Lands

Lyon 3rd

72/86, avenue Félix-Faure106, boulevard Vivier-Merle ZAC LABUIRE (R.FONCIERE) 1880 0 0 20,815 20,815 GECINA

Lyon 7th

168/172, rue de Gerland (GERLYON) (R.FONCIERE) - 0 0 0 0 A.I.C

Boulogne-Billancourt122, avenue du Général-Leclerc 1968 0 0 0 0 SA PARIGEST

Total lands 0 0 20,815 20,815Total GECINA Group 438 29,498 848,731 878,229

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Paris 428,940Commercial share of primarily residential assets 60,150Commercial share of primarily commercial assets 368,790

Paris region 313,916Commercial share of primarily residential assets 9,874Commercial share of primarily commercial assets 304,042

Lyons 86,005Commercial share of primarily residential assets 9,125Commercial share of primarily commercial assets 76,880

Other regions 4,072Commercial share of primarily residential assets 0Commercial share of primarily commercial assets 4,072

Commercial properties in operation as of December 31, 2003 832,933

Various sales programs as of December 31, 2003 4,144Commercial share of primarily residential assets 1,742Commercial share of primarily commercial assets 2,402

Other 92,545

Total Group commercial properties as of December 31, 2003 929,621Commercial share of primarily residential assets 80,891Commercial share of primarily commercial assets 848,731

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Residential real estate

69 sq.m.

70%

5,339

was average surface area of GECINA apartments as of December 31, 2003.

of the value of GECINAresidential properties in operation as of December 31, 2003,in Paris.

GECINA apartments sold in 2003.

In 2003, GECINA pursuedan active policy to improvethe profitability of its residential properties,which present the advantage of generatinglow-risk rental income.

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39, rue de Vouillé 75015 Paris

42

current leases, new rentals and lease renewals, also integrates the rise in the construction cost index, on which rent adjustments are calculated over the life of the lease. In 2003, this index was up 2.8%, after anincrease of almost 3.5% in 2002.

According to the most recent statistics published on Parisrentals, the average rent for all private rental propertiesin Paris as of January 1, 2003, increased by 4.9% in a year to 12.5 euros per sq.m. At 15.0 euros/sq.m./month, Paris rents increased the most (+5.2%).Close suburbs (11.7 euros/sq.m./month, + 4.8%) andoutlying suburbs (9.8 euros/sq.m./month, + 4.4%) alsoreported gains at a slightly less sustained pace. Averagerents remained twice as high in Paris and in theneighboring suburbs as in the rest of France, while thegap between rents in the more distant Paris suburbs andin the rest of France was approximately a third2.

The general rise in rental prices was due to the significanthike in re-let rentals. Sector statistics show that the monthly rent of new occupants as of January 1, 2003was 16.8 euros/sq.m., up 11.9% in a year. In both the close and outlying suburbs of Paris, the annualincrease was, respectively, 10.4% and 7.4% at 13.3 euros/sq.m./month and 10.8 euros/sq.m./month.Outside of Paris, the increase in new rental prices wasnot so high at 5.5% (7.5 euros/sq.m./month).

Better balance in the rental market

In line with the trend first observed at the end of 2002,the year 2003 was characterized by a slight lessening of rental market pressure as demand contracted. The decline in interest rates combined with longer loanmaturities and the opinion that the price of new rentalswas too high resulted in the partial transfer of rentaldemand to the acquisition market.

At the same time, the tax incentive for private rentalinvestment met with growing success. The Besson taxbreak motivated more than 30% of sales of newapartments in 2001 and almost 40% in 2002, and the Robien version was expected to generate slightlymore than 50% of sales in 20031.

The market has thus entered a more balanced phasecharacterized in particular by slower growth in averagerents for new occupants. Market professionals also notedthe reappearance of a hierarchy of rental values based onthe quality of properties in a given sector, a phenomenonthat had disappeared in the last few years. The reductionin corporate demand to house executive managers on mobility assignments made it more difficult to rentlarge apartments in buildings of grand standing.

Although the data for 2003 is not yet available,professionals agree that the increase in rental pricesshould stabilize. This trend, which takes into account

Average monthly rents for private rental real estate in France as of January 1, 2003 (in euro/sq.m.)

21-31, rue des Côtes78600 Maisons-Laffitte

Total French private New rental real estate rentals

Paris 15.0 16.8Inner Paris suburbs 11.7 13.3Outer Paris suburbs 9.8 10.8French provinces 6.7 7.5

Source: OLAP

1 Sources: FNPC and Crédit Agricole’s economic research department.

2 Source: Crédit Agricole’s economic research department.

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8-12, rue Pierre-Lhomme92400 Courbevoie

Stabilization in the sales market?

Once again proving the forecasters wrong, 2003 was a good year with 615,700 real estate transactionsinvolving older buildings in France, versus 627,100 the previous year1. Sales of new housing units were up21.0% from 2002 to 103,000 dwellings in 2003. The number of available new properties for salecontracted, falling in a year from 48,100 to 37,500, the lowest level recorded in the period 1987-2003. The average time it takes to sell new apartments decreasedfrom seven to four months, and for new individualhouses from seven to five months, also a historical low2.According to the Banque de France, annual growth inoutstanding housing loans was 9.9% in December 2003,compared with 8.0% in December 2002.

Many factors encouraged residential investment in 2003:favorable borrowing conditions, arbitrage between rentaland purchase decisions, uncertainty in the financialmarkets, etc. In Ile-de-France, the volume of sales for allcategories of real estate increased by 2.4% from oneyear to the next to 234,181 transactions, according to the notaries in Ile-de-France. This result can mainly beattributed to the outlying suburbs (+ 4.8%) and to a lesser extent to the close suburbs (+ 1.5%), while Parisstagnated (- 0.4%). The market for free apartments in older buildings in Ile-de-France totaled 111,325 transactions, down 0.8% from 2002. In Parisand its close suburbs, the number of transactions declined(- 2.7% to 36,043 sales and - 2.5% to 43,469 sales)2.

1 Source: Fédération Nationale de l’Immobilier (FNAIM).

2 Source: Ministère de l’Equipement.

3 Source: Notaires d’Ile-de-France.

4 Source: Indices Notaires INSEE.

This migration of demand from the capital to neighboring municipalities and from the close suburbsto more outlying areas resulted in greater annual rises in prices in the region than in Paris itself (+ 11.1% in thecapital versus + 14.0% in the close suburbs and + 12.5%in the outlying suburbs)4. In France taken as a whole,prices of existing housing rose 14.2% in 2003,representing an increase of 59.2% since 19881.

Paris remained the most expensive department with an average price of 3,989 euros/sq.m. in the fourthquarter of 2003. The sixth arrondissement remained themost expensive at 6,265 euros/sq.m., followed by theseventh (5,771 euros/sq.m.). Conversely, the leastexpensive arrondissements were the nineteenth and thetwentieth at 2,885 euros/sq.m. and 3,114 euros/sq.m.,respectively. The average price per square meter of existingapartments in Hauts-de-Seine was 2,983 euros in the fourth quarter of 2003, in Saint-Denis 1,647 eurosand in Val-de-Marne 2,337 euros. Prices in outlyingsuburbs came close or exceeded those in the close suburbs:2,403 euros/sq.m. in Yvelines, 1,610 euros/sq.m. in Seine-et-Marne, 1,602 euros/sq.m. in Essonne and 1,552 euros/sq.m. in Val d’Oise3.

In the fourth quarter of 2003, the rise in the price of existing apartments slowed throughout Ile-de-France,and prices even declined in several arrondissements in Paris (seventh, ninth, tenth and fifteenth). Some observers think the market has entered a period of stabilization.

44

remains competitive, and to optimize the value and yieldof each of its assets, the Group is constantly focused on improving its properties. Works involve buildingmaintenance (regular and major repairs such as cleaningthe façade, heating systems, waterproofing, etc.) as wellas home improvements (painting, plumbing, flooring,etc.), apartment renovation (modernization of bathroomsand kitchens, upgrading electrical systems, etc.) and enhancing and restructuring building functionalities.Finally, in 2003, GECINA continued to create new rentalspaces by restructuring attics and maid rooms to make1,351 sq.m. into apartments.

Satisfactory rental activityResidential rental income stood at 233.3 million euros,representing 47.3% of the Group total. In 2003, GECINA’sprofitable rent indexing system with quarterly indexes of the cost of construction based on the last four quartersgreater than 2%, new rentals, and to a lesser degree leaserenewals generated significant growth of 4.3% in residential rental income on a constant basis and excluding properties for sale.

Almost 2,400 apartments were re-let in 2003. Average re-let rental rates remained high during the periodat 17.6 euros/sq.m./month in Paris, 20.0 euros/sq.m./monthfor Haussmann-style apartments and 12.9 euros/sq.m./month in the Paris region. Compared with the averagerent of former occupants, the average for new rental was up 14.8% in Paris, 20.8% for Haussmann-styleapartments and 10.6% in the Paris region.

The financial occupancy rate of residential properties in operation stood at 97.3% in December 2003, while theturnover rate for 12 months on a sliding scale was 14.2%.

A splintered rental marketAccording to the most recent French census (INSEE,March 1999), 23.8 million principal residences were surveyed in France and 4.5 million in Ile-de-France.Principal residences in France that are rental propertiestotaled 9.7 million dwellings (40.7%), of which 5.4 million (55.7%) belonged to the private sector. In Paris and the region, the number of rented apartmentswas 2.3 million (51.1%), of which 1.1 (47.8%) werenon-social housing.

Institutional investors and real estate firms in particulartook advantage of the high market prices to dispose of residential properties. Their role among private playersin the free rental sector has therefore regularly declined.Although it is France’s largest real estate firm, GECINA’s share in this sector is not significant.

Residential real estateAs of December 31, 2003, the GECINA Group’sproperties were estimated at 3.2 billion euros on the basis of a block appraisal, and at 3.9 billion euroson the basis of a unit appraisal. For a total area of 1,319,089 sq.m., residential holdings at the end of 2003 comprised 19,044 apartments with an averagesurface area of 69 sq.m. There were 16,856 apartments in Paris and its region, 1,910 in Lyons and the remainder in the rest of France and for sale.

Including residences built between 1965 and 1975,Haussmann-style buildings and more recent constructions,GECINA’s residential properties appeal to a wide range of clients, in terms of both the services provided and the price. In order to ensure that its retail offer

(%)

1995 1996 1997 1998 1999 2000 2001 2002 2003

+ 2.6 +2.3+2.7

+3.5 +3.3+3.8

+4.9

+5.9

+4.3

25, rue Paul-Rivet 92350 Le Plessis-Robinson

Growth in residential rental income excluding properties for sale and on a constant basis

45

12, rue Sylvain-Vigneras 92380 Garches

Accelerated drive to optimize real estate assetsRespecting its commitments, GECINA significantlystepped up its drive to improve the yield on its residentialproperty portfolio and to harness the potential thisbranch represents for the creation of value. This arbitragepolicy generated sales of 1,522 million euros during the year, compared with 335 million euros in 2002.These sales represented a total of 508,326 sq.m., with436,002 sq.m. of residential space and 5,339 apartments.The net return on the properties sold was 4.5%. Block sales concerned 120 buildings with a total area of 458,388 sq.m., with 389,582 sq.m. of residentialspace (4,688 apartments). Unit sales involved 651 apartments with a total area of 49,938 sq.m. andtotaled 135 million euros.

This major program was in large measure (1,138 million euros) carried out within the framework of the agreements signed in October 2002 with the American real estate investment fundWestbrook Partners. On May 28, 2003, GECINA soldWestbrook 47 primarily residential complexesrepresenting 1,965 apartments for 563 million euros. The second part of the agreement was finalized on July 31, 2003, with the sale of 50 buildings that hadpreviously belonged to SIMCO and its subsidiaries. This 575 million euro sale represented a total of 138,803 sq.m., with 116,320 sq.m. of residentialspace and 1,151 apartments. These two disposals wererounded off by the sale of three buildings in the fourthquarter for 28 million euros. The net yield of each of the sold properties was 4.3%.

(%)

1995 1996 1997 1998 1999 2000 2001 2002 2003

98.2 97.9 97.5 97.5 96.698.7 98.8 98.3

97.3

The buildings put on the market were selected on the basis of a study of the yield each produced and an estimate of the investment to be made. Becauseof their high intrinsic value, low turnover rate and moreexpensive maintenance costs, Haussmann-style buildingsgenerate a lower yield than the Group’s real estate assetsin general. They therefore made up a large percentage of the properties sold in 2003, along with matureconstructions. Haussmann-style buildings now account for14.2% of rental income in 2003, and 17.7% of the valueof residential real estate in operation as of December 31,2003, compared, respectively, with 19.9% and 20.4%for recent constructions, and 65.9% and 61.9% for assets built between 1965 and 1975.

The first effects of the 2003 sales program were feltduring the year. The gross yield of residential propertieswent from 6.0% to 6.2%; in spite of a rise in the blockvalue of residential real estate that exceeded the increasein rental income. With constant market values and onthe basis of appraisals at the end of 2002, residentialproperties produced a yield of 6.0% before sales and of 6.5% after sales.

Since the beginning of 2004, GECINA has launched a new arbitrage program for Haussmann-style apartmentslocated in Paris with a yield of less than 5%. This 500 million euro programs involves the unit sale of apartments over the next few years. By sellingindividual apartments, the Group hopes to glean 100 million euros in 2004. The share of residentialproperties, which accounted for 47.3% of rental incomein 2003 versus 52.6% in 2002, should continue to decline in the next few years. GECINA neverthelessintends to maintain a significant position in residentialproperty sector (35% of rental income), which is lesssensitive to changes in the economic environment.

Total New GECINA rentals

Paris 14.8 17.6

Paris region 11.3 12.9

Lyons 7.5 7.9

Average monthly rents of the GECINA Group’s residentialassets as of January 1, 2004 (in euro/sq.m.)

Financial occupancy rate of the GECINAGroup’s residential assets

46

• 2, rue Charles-Baudelaire – Paris 12th

(1,111 sq.m. residential and 145 sq.m. commercial)• 8/10, rue Jules-César /

boulevard de la Bastille – Paris 12th

(3,934 sq.m. residential and 708 sq.m. commercial) • 39/41, rue de la Glacière – Paris 13th

(3,459 sq.m. residential)• 51/57, rue Froidevaux / 6, rue Deparcieux –

Paris 14th (3,290 sq.m. residential)• 119, rue d’Alésia – Paris 14th

(933 sq.m. residential and 337 sq.m. commercial)• 47, rue Froidevaux – Paris 14th

(3,109 sq.m. residential)• 11 bis, rue César-Franck – Paris 15th

(1,614 sq.m. residential)• 112, rue Michel-Ange – Paris 16th

(1,614 sq.m. residential and 583 sq.m. commercial)• 49/51, rue Erlanger – Paris 16th

(3,232 sq.m. residential)• 60, rue Michel-Ange – Paris 16th

(1,073 sq.m. residential and 74 sq.m. commercial)• 1, avenue Paul-Doumer /

49, rue Vineuse – Paris 16th

(2,432 sq.m. residential and 79 sq.m. commercial)• 66, rue de la Pompe – Paris 16th

(1,131 sq.m. residential and 943 sq.m. commercial)• 146, rue de la Pompe – Paris 16th

(1,310 sq.m. residential and 108 sq.m. commercial)• 58, rue Michel-Ange – Paris 16th

(1,325 sq.m. residential)• 14/16, avenue Théophile-Gautier – Paris 16th

(3,703 sq.m. residential and 1,130 sq.m. commercial)• 4, rue de Galliéra – Paris 16th

(1,975 sq.m. residential and 1,298 sq.m. commercial)• 155, rue de Courcelles – Paris 17th

(2,699 sq.m. residential and 531 sq.m. commercial)• 118, boulevard Malesherbes – Paris 17th

(2,027 sq.m. residential and 36 sq.m. commercial)• 12, rue Poncelet – Paris 17th

(1,069 sq.m. residential and 680 sq.m. commercial)• 21, rue Poncelet – Paris 17th

(1,596 sq.m. residential and 85 sq.m. commercial)• 14, avenue Carnot – Paris 17th

(952 sq.m. residential and 297 sq.m. commercial)• 63 bis, rue Damrémont – Paris 18th

(1,432 sq.m. residential and 200 sq.m. commercial)

• 110, rue Marcadet / 67, rue du Mont-Cenis – Paris 18th

(2,389 sq.m. residential and 220 sq.m. commercial)• 15/17, rue Henri-Ribière /

place des Fêtes – Paris 19th

(10,034 sq.m. residential and 1,266 sq.m. commercial) • 2/10, rue de Joinville /

3, quai de l’Oise – Paris 19th

(4,662 sq.m. residential and 394 sq.m. commercial)

Paris region• 7, 9/11 and 17, rue Gallieni /

11, rue Henri-Martin – Boulogne Billancourt (9,399 sq.m. residential)

• 41, rue Greffülhe / 122, rue de Villiers – Levallois-Perret (2,903 sq.m. residential)

• 131, avenue du Maréchal-Foch – Châtou (10,355 sq.m. residential and 236 sq.m. commercial)

• 18/20, rue Félicien-David – Saint-Germain-en-Laye(1,749 sq.m. residential)

• 40/42 ter, rue des Ursulines / 2 bis-2 ter, rue de la Rochejacquelain – Saint-Germain-en-Laye (13,613 sq.m. residential)

• 16 bis, rue de Neuilly / rue Louis-Xavier-de-Ricard –Fontenay-sous-Bois (7,006 sq.m. residential)

• 1, rue de Salverte / 34, avenue du Maréchal Joffre /14, rue Saint-Laurent – Chantilly (6,599 sq.m. residential and 579 sq.m. commercial)

Sales of former SIMCO assets to Westbrook Paris• 7/9, rue des Arquebusiers – Paris 3rd

(9,787 sq.m. residential and 3,815 sq.m. commercial)• 1/5, rue Palatine – Paris 6th

(3,720 sq.m. residential and 729 sq.m. commercial)• 16, rue Stanislas – Paris 6th

(1,546 sq.m. residential and 144 sq.m. commercial)• 3, rue du Regard – Paris 6th

(1,485 sq.m. residential and 77 sq.m. commercial)• 91, rue du Cherche-Midi – Paris 6th

(1,950 sq.m. residential)• 91 bis, rue du Cherche-Midi – Paris 6th

(1,311 sq.m. residential and 364 sq.m. commercial)

Block sales of primarily residential assetsin 2003

Sales of former GECINA assets to Westbrook Paris• 10, rue du Mont Thabor – Paris 1st

(998 sq.m. residential and 569 sq.m. commercial)• 25, rue du Montparnasse – Paris 6th

(1,963 sq.m. residential)• 16, rue Pérignon – Paris 7th

(1,744 sq.m. residential and 102 sq.m.commercial)• 42, boulevard Raspail – Paris 7th

(1,058 sq.m. residential and 220 sq.m. commercial)• 64/66, rue des Saints-Pères – Paris 7th

(793 sq.m. residential and 146 sq.m. commercial)• 29, avenue Franklin-D.-Roosevelt – Paris 8th

(1,538 sq.m. residential )• 12, avenue Franklin-D.-Roosevelt – Paris 8th

(1,823 sq.m. residential and 1,202 sq.m. commercial)• 37, rue du Général-Foy – Paris 8th

(2,112 sq.m. residential and 515 sq.m. commercial)• 55, boulevard Malesherbes /

26, rue de Laborde – Paris 8th

(993 sq.m. residential and 262 sq.m. commercial)• 38/42, avenue de Wagram – Paris 8th

(5,577 sq.m. residential and 952 sq.m. commercial)• 48, boulevard Malesherbes / 22, rue de la

Bienfaisance – Paris 8th

(2,356 sq.m. residential and 809 sq.m. commercial) • 1/7, square du Roule / 221-225, Faubourg-Saint-

Honoré – Paris 8th (18 285 sq.m. residential2,556 sq.m. commercial)

• 47, rue de Berri – Paris 8th

(1,336 sq.m. residential and 386 sq.m. commercial)• 195, rue du Faubourg-Saint-Honoré – Paris 9th

(2,033 sq.m. residential and 338 sq.m. commercial)• 27, rue Ballu – Paris 9th

(2,304 sq.m. residential and 151 sq.m. commercial) • 89, boulevard Voltaire – Paris 11th

(1,489 sq.m. residential and 405 sq.m. commercial)• 93, boulevard Voltaire – Paris 11th

(1,644 sq.m. residential and 294 sq.m. commercial)

40, rue d’Artois 75008 Paris

47

6-8, rue Meissonnier 75017 Paris

• 95, rue de Rennes – Paris 6th

(2,172 sq.m. residential and 188 sq.m. commercial)• 18, rue Rousselet – Paris 7th

(1,974 sq.m. residential)• 23, rue de Bourgogne – Paris 7th

(2,980 sq.m. residential and 425 sq.m. commercial)• 25, rue de Bourgogne – Paris 7th

(2,581 sq.m. residential and 355 sq.m. commercial)• 199/201, rue de Grenelle – Paris 7th

(8,632 sq.m. residential and 1,185 sq.m. commercial)• 191/195, rue de l’Université – Paris 7th

(11,885 sq.m. residential and 463 sq.m. commercial)• 11, rue Murillo – Paris 8th

(1,079 sq.m. residential)• 4, rue Saint-Philippe-du-Roule – Paris 8th

(1,367 sq.m. residential and 249 sq.m. commercial)• 6, rue Saint-Philippe-du-Roule – Paris 8th

(1,266 sq.m. residential)• 8, rue Saint-Philippe-du-Roule – Paris 8th

(809 sq.m. residential and 171 sq.m. commercial)• 131, rue du Faubourg-Saint-Honoré – Paris 8th

(1,578 sq.m. residential and 382 sq.m. commercial)• 3, rue du Commandant-Rivière – Paris 8th

(674 sq.m. residential and 242 sq.m. commercial)• 5, rue du Commandant-Rivière – Paris 8th

(888 sq.m. residential and 310 sq.m. commercial)• 6, rue du Commandant-Rivière – Paris 8th

(1,125 sq.m. residential and 303 sq.m. commercial)• 7, rue du Commandant-Rivière – Paris 8th

(686 sq.m. residential and 338 sq.m. commercial)• 8, rue du Commandant-Rivière – Paris 8th

(762 sq.m. residential and 186 sq.m. commercial)• 10, rue du Commandant-Rivière – Paris 8th

(1,407 sq.m. residential and 426 sq.m. commercial)• 12, rue du Commandant-Rivière – Paris 8th

(974 sq.m. residential and 176 sq.m. commercial)• 73, avenue Franklin-Roosevelt – Paris 8th

(1,215 sq.m. residential and 541 sq.m. commercial)• 24/24bis, rue de Téhéran – Paris 8th

(4,268 sq.m. residential and 222 sq.m. commercial)• 74/76, rue de Bercy – Paris 12th

(3,524 sq.m. residential and 365 sq.m. commercial)• 80, rue Michel-Ange – Paris 16th

(1,196 sq.m. residential and 96 sq.m. commercial)

• 14, boulevard Exelmans – Paris16th

(2,194 sq.m. residential and 228 sq.m. commercial)• 104, avenue Victor-Hugo – Paris 16th

(1,256 sq.m. residential and 246 sq.m. commercial)• 106, avenue Victor-Hugo – Paris 16th

(1,208 sq.m. residential and 152 sq.m. commercial)• 108, avenue Victor-Hugo – Paris 16th

(1,225 sq.m. residential and 136 sq.m. commercial)• 2/4, avenue des Ternes – Paris 17th

(3,464 sq.m. residential and 783 sq.m. commercial)• 3, place des Ternes – Paris 17th

(786 sq.m. residential and 147 sq.m. commercial)• 5, place des Ternes – Paris 17th

(4,350 sq.m. residential and 382 sq.m. commercial)• 7/9, place des Ternes – Paris 17th

(5,951 sq.m. residential and 1,698 sq.m. commercial)• 2, rue Gounod – Paris 17th

(1,535 sq.m. residential and 163 sq.m. commercial)• 3, rue Gounod – Paris 17th

(1,912 sq.m. residential and 108 sq.m. commercial)• 4, rue Gounod – Paris 17th

(2,118 sq.m. residential and 71 sq.m. commercial)• 5, rue Gounod – Paris 17th

(2,687 sq.m. residential)• 6, rue Gounod – Paris 17th

(1,963 sq.m. residential)• 7, rue Gounod – Paris 17th

(1,589 sq.m. residential and 301 sq.m. commercial)• 8, rue Gounod – Paris 17th

(2,079 sq.m. residential and 598 sq.m. commercial)• 9, rue Gounod – Paris 17th

(1,958 sq.m. residential and 250 sq.m. commercial)• 11, rue Gounod – Paris 17th

(1,739 sq.m. residential and 118 sq.m. commercial)• 121, avenue de Wagram – Paris 17th

(2,155 sq.m. residential and 185 sq.m. commercial)• 123, avenue de Wagram – Paris 17th

(1,826 sq.m. residential and 200 sq.m. commercial)

Other assets soldParis• 21, rue Hérold – Paris 1st

(1,058 sq.m. residential and 620 sq.m. commercial)• 125, boulevard Saint-Germain – Paris 6th

(1,290 sq.m. residential and 320 sq.m. commercial)

• 105 / 109 bis, rue de Reuilly – Paris 12th

(33,036 sq.m. residential and 1,259 sq.m. commercial)• 6/8, rue Dulac – Paris 15th

(2,628 sq.m. residential and 357 sq.m. commercial)• 45, rue d’Alleray – Paris 15th

(3,484 sq.m. residential) • 39, rue Olivier-de-Serres – Paris 15th

(2,270 sq.m. residential)• 2, rue Lyautey – Paris 16th

(1,020 sq.m. residential and 102 sq.m. commercial)• 4, rue Guy-de-Maupassant – Paris 16th

(1,104 sq.m. residential)• 70 bis / 72, rue Botzaris – 10/12, Villa des Buttes

Chaumont – Paris 19th

(3,151 sq.m. residential) • 133 / 137 /139, rue Manin – Paris 19th

(4,129 sq.m. residential and 962 sq.m. commercial)• 157, boulevard Davout – Paris 20th

(4,930 sq.m. residential and 244 sq.m. commercial)• 80 / 84, rue des Orteaux – 39, rue Rasselins –

Paris 20th (5,139 sq.m. residential)

France other than Paris• 241, rue Dugesclin – Lyon 3rd

(2,375 sq.m. residential and 309 sq.m. commercial)• 245, rue Dugesclin – Lyon 3rd

(2,246 sq.m. residential and 446 sq.m. commercial)• 27 / 31, rue Fénelon – 31, avenue de Saxe – Lyon 6th

(4,900 sq.m. residential and 727 sq.m. commercial)• 20, rue Robin – Lyon 7th

(4,759 sq.m. residential and 372 sq.m. commercial) • Parc de Chalin – 8, chemin de L.-Chirpaz – Ecully

(12,805 sq.m. residential and 185 sq.m. commercial) • 248/250 - 254/272, avenue de Grammont –

Tours (17,787 sq.m. residential and 1,046 sq.m.commercial)

7-7 bis, rue Saint-Gilles75003 Paris

48

Istarrdt

2,389 sq.m.

26 apartments

IIndarrdt

10,276 sq.m.

134 apartmentsIIIrd

arrdt

2,713 sq.m.

42 apartments

IVtharrdt

2,160 sq.m.

36 apartments

Vtharrdt

12,396 sq.m.

232 apartments

VItharrdt

982 sq.m.

14 apartments

VIItharrdt

1,765 sq.m.

19 apartments

VIIItharrdt

25,256 sq.m.

281 apartments

IXtharrdt

8,157 sq.m.

122 apartments

Xtharrdt

15,534 sq.m.

245 apartments

XItharrdt

12,070 sq.m.

195 apartments

XIItharrdt

42,263 sq.m.

743 apartments

XIIItharrdt

30,656 sq.m.

487 apartments

XIVtharrdt

35,221 sq.m.

605 apartments

XVtharrdt

210,331 sq.m.

3,347 apartments

XVItharrdt

53,683 sq.m.

653 apartments

XVIItharrdt

55,834 sq.m.

587 apartments

XVIIItharrdt

38,274 sq.m.

543 apartments XIXtharrdt

29,945 sq.m.

450 apartments

XXtharrdt

30,923 sq.m.

535 apartments

Residential properties

Residential properties comprising 19,044 apartments

with a surface area of 1,319,089 sq.m.,

of which 18,524 apartments (1,276,788 sq.m.) were in operation

as of December 31, 2003.

PARIS620,828 sq.m.9,296 apartments

PARIS REGION501,456 sq.m.7,115 apartments

LYONS143,977 sq.m.1,837 apartments

OTHER10 527 sq.m.276 apartments

(in operation as of December 31, 2003)

49

6.3% 5.2%

61.0%

61.9%

57.4%

33.8%36.3%

20.4%17.7%

75

Primarily residential properties in operation

Paris 1st

184, rue de Rivoli - 2, rue de l’Echelle 1880 12 1,264 918 2,182 GECINAParis 3rd

7/7 bis, rue Saint-Gilles 1987 42 2,713 135 2,848 GECINA

Paris 4th

2, rue Crillon 1969 36 2,160 603 2,763 GECINA

Paris 5th

21, rue Galande - 2, rue des Anglais 1800 37 656 158 814 GECINA7, rue Nicolas-Houël 1972 195 11,740 0 11,740 GECINA

Paris 6th

1, carrefour Croix-Rouge 1876 14 982 209 1,191 GECINA

Paris 7th

262, boulevard Saint-Germain 1880 9 705 556 1,261 GECINA266, boulevard Saint-Germain 1880 9 963 141 1,104 GECINA

Paris 8th

44, rue Bassano - 11, rue Magellan 1907 34 4,335 590 4,925 GECINA165, boulevard Haussmann 1866 12 1,042 752 1,794 GECINA30, rue de Laborde 1930 21 816 110 926 GECINA80, rue du Rocher 1903 17 1,990 179 2,169 GECINA51, rue de Rome 1865 13 1,211 501 1,712 GECINA3, rue Treilhard 1866 11 802 610 1,412 GECINA93, rue du Faubourg-Saint-Honoré 1880 15 1,066 510 1,576 GECINA21, rue Clément-Marot 1880 6 1,330 649 1,979 SIF40, rue d’Artois 1900 15 2,090 160 2,250 SA PARIGEST5, rue Monceau 1890 6 1,317 67 1,384 GECINA7 bis, rue Monceau 1890 8 1,198 457 1,655 GECINA

%of rental income

% of revalued block value1

% of rental income

% of revalued block value1

ParisParis regionLyons

1 On the basis of block valuationappraisals, net selling prices, of real estate assets.

After 19751960-1975Haussmann-style

Geographic breakdown of residential properties in operation

as of December 31, 2003

Breakdown of residential properties in operation by type

as of December 31, 2003

19.9%14.2%

65.9%

Com

mer

cial

area

(sq

.m.)

Tota

lar

ea (

sq.m

.)

Com

pany

Res

iden

tial

area

(sq

.m.)

Num

ber

of a

part

men

ts

Year

Add

ress

or

buil

ding

nam

e

Dep

artm

ent

Cit

y

50

Paris 9th

21, rue Condorcet 1881 23 1,579 404 1,983 GECINA16, cité de Trévise 1881 6 322 60 382 GECINA34, rue Pierre-Semard 1869 14 963 175 1,138 GECINA6 bis, rue de Châteaudun 1880 8 857 53 910 GECINA13/17, cité de Trévise 1998 44 2,773 0 2,773 GECINA

Paris 10th

141, rue La Fayette 1898 9 1,060 640 1,700 GECINA166/172, quai de Jemmapes 1982 139 8,753 0 8,753 GECINA41/47, rue de la Grange-aux-Belles 1967 86 4,971 792 5,763 GECINA

Paris 11th

44/50, rue Pétion 1978 40 2,820 420 3,240 GECINA45/53, avenue Philippe-Auguste 1970 71 4,564 1,416 5,980 GECINA8, rue du Chemin-Vert 1969 42 2,200 713 2,913 GECINA8 bis, rue Lacharrière 1967 42 2,486 0 2,486 GECINA

Paris 12th

29, avenue Ledru-Rollin 1929 36 2,120 534 2,654 GECINA25/27, rue de Fécamp - 45, rue de Fécamp 1988 32 2,590 181 2,771 GECINA18/20 bis, rue Sibuet 1992 63 4,423 73 4,496 GECINA9/11, avenue Ledru-Rollin 1997 62 3,047 177 3,224 GECINA25, avenue de Saint-Mandé 1964 83 3,619 161 3,780 GECINA12/14, boulevard de Picpus 1966 22 1,628 52 1,680 GECINA46, boulevard de Reuilly - 38, rue Taine 1972 159 8,541 2,655 11,196 GECINA220, rue du Faubourg-Saint-Antoine 1969 127 6,535 1,019 7,554 GECINA24/26, rue Sibuet 1970 159 9,760 85 9,845 GECINA

Paris 13th

22/24, rue Wurtz 1988 68 4,471 248 4,719 GECINA10/18, passage Foubert 1989 92 6,233 0 6,233 GECINA49/53, rue Auguste-Lançon 26, rue de Rungis - 55/57, rue Brillat-Savarin 1971 40 3,413 1,800 5,213 GECINA2/12, rue Charbonnel - 53, rue de l’Amiral-Mouchez 65/67, rue Brillat-Savarin 1966 181 12,007 490 12,497 GECINA20, rue du Champ-de-l’Alouette 1965 53 3,886 939 4,825 GECINA53, rue de la Glacière 1970 53 646 99 745 GECINA

Paris 14th

149/153, rue Raymond-Losserand - 1/5, rue Pauly 1979 67 3,564 599 4,163 GECINA83/85, rue de l’Ouest 1978 31 1,981 112 2,093 GECINA36/38, rue Cabanis 1975 83 3,911 1,124 5,035 GECINA26, rue du Commandant-René-Mouchotte 1966 316 21,076 0 21,076 GECINA3, villa Brune 1970 108 4,689 0 4,689 GECINA

Paris 15th

22/34, rue Balard - rue des Cévennes 1971 113 9,252 1,133 10,385 GECINA49, avenue de la Motte-Piquet 1885 12 1,235 340 1,575 GECINA52, avenue de Saxe 1905 14 2,075 70 2,145 GECINA22/24, rue Edgar-Faure 1996 85 6,774 301 7,075 SCI DUPLEIX-

SUFFRENFront de Seine (Tour H15) 26, rue Linois 1979 192 11,634 0 11,634 SCI H1589, rue de Lourmel 1988 23 1,487 245 1,732 GECINA39, rue de Vouillé 1999 84 6,291 135 6,426 SCI VOUILLE-

NANTEUIL75/77, rue Saint-Charles 1979 40 2,764 0 2,764 GECINA27, rue Balard 1995 64 5,798 0 5,798 SA PARIGEST22, rue de Cherbourg - 25, rue de Chambéry 1965 22 1,497 0 1,497 GECINA199, rue Saint-Charles 1967 59 3,253 0 3,253 GECINA

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159/169, rue Blomet - 334/342, rue de Vaugirard 1971 320 21,524 5,310 26,834 GECINA191, rue Saint-Charles - 17, rue Varet 1960 208 12,319 0 12,319 GECINA76/82, rue Lecourbe - rue François-Bonvin (BONVIN-LECOURBE) 1971 247 13,875 6,581 20,456 GECINA10, rue du Docteur-Roux - 189/191, rue de Vaugirard 1967 228 13,015 2,739 15,754 GECINA74, rue Lecourbe 1971 93 8,042 0 8,042 GECINA148, rue de Lourmel - 74/86, rue des Cévennes - 49, rue Lacordaire 1965 316 21,979 802 22,781 GECINA170, rue Saint-Charles - 55, rue des Bergers 1965 48 2,856 1,148 4,004 GECINA85/89, boulevard Pasteur 1965 261 16,451 0 16,451 GECINA44/50, rue Sébastien-Mercier 1971 40 2,464 703 3,167 GECINA18/20, rue Tiphaine 1972 79 4,862 2,126 6,988 GECINA37/39, rue des Morillons 1966 37 2,212 524 2,736 GECINA12, rue Chambéry 1968 30 890 0 890 GECINA6, rue de Vouillé 1969 588 28,215 1,961 30,176 GECINA168/170, rue de Javel 1962 85 5,817 135 5,952 GECINA20, rue de Cronstadt 1967 59 3,750 910 4,660 GECINA

Paris 16th

11, chaussée de La Muette 1897 23 2,087 296 2,383 GECINA16, rue de Lübeck 1897 12 1,220 0 1,220 GECINA60, avenue Paul-Doumer - 7, rue Vital 1880 30 3,708 743 4,451 GECINA2, rue Poussin 1880 10 1,260 379 1,639 SIF4, rue Poussin 1880 8 629 198 827 SIF6, rue Poussin 1880 14 1,355 287 1,642 SIF12, rue Raynouard 1913 13 1,576 182 1,758 GECINA14, rue Raynouard 1913 15 2,460 0 2,460 GECINA3, rue Franklin 1900 10 1,679 311 1,990 GECINA7, rue Georges-Ville 1911 14 1,879 0 1,879 GECINA72, avenue Mozart 1862 14 1,673 0 1,673 GECINA12, avenue Boudon 1988 21 1,690 0 1,690 GECINA10/12, rue de Saigon 1984 20 1,587 0 1,587 SA PARIGEST6/14, rue de Rémusat - square Henri-Paté 1962 187 15,987 1,023 17,010 GECINA17/19, rue Mesnil - 48, rue Saint-Didier 1963 220 12,822 143 12,965 GECINA46 bis, rue Saint-Didier 1969 42 2,071 670 2,741 GECINA

Paris 17th

121, rue de Courcelles 1908 13 960 218 1,178 GECINA4, rue Léon-Cosnard 1903 17 1,294 0 1,294 GECINA169/183, boulevard Pereire7/21, rue Faraday - 49, rue Laugier 1882 236 20,661 1,713 22,374 GECINA25, rue du Colonel-Moll - 11, rue Saint-Ferdinand 1906 15 1,450 115 1,565 GECINA7, rue Saint-Senoch 1909 17 1,922 0 1,922 GECINA7, rue Montenotte 1800 11 1,032 186 1,218 GECINA79, rue Jouffroy-d’Abbans 1880 9 1,345 776 2,121 GECINA81, rue Jouffroy-d’Abbans 1880 10 1,742 698 2,440 GECINA54, rue de Prony 1885 14 2,906 346 3,252 GECINA80, rue de Prony 1885 11 1,519 105 1,624 GECINA3, rue Meissonnier 1885 10 1,391 261 1,652 GECINA4, rue Meissonnier 1885 14 1,882 489 2,371 GECINA6/8, rue Meissonnier 1885 34 4,881 634 5,515 GECINA8, rue Balny-d’Avricourt 1911 7 666 0 666 GECINA28, avenue Carnot 1882 24 2,367 0 2,367 SA PARIGEST30, avenue Carnot 1882 13 1,220 0 1,220 SA PARIGEST32, avenue Carnot 1882 9 1,034 161 1,195 SA PARIGEST10, rue Nicolas-Chuquet 1995 54 3,159 455 3,614 GECINA75/79, rue Laugier - 12, rue Galvani 1980 39 2,693 0 2,693 GECINA38/40, rue de Lévis 1966 22 1,304 466 1,770 GECINA

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Paris 18th

40, rue des Abbesses 1907 33 1,951 188 2,139 GECINA88/92, boulevard Ney 1972 302 24,080 0 24,080 GECINA234, rue Championnet 1980 208 12,243 0 12,243 GECINA

Paris 19th

27/31, avenue de Flandre - 6/8, rue du Maroc 1996 54 3,336 219 3,555 GECINA29/33, rue des Ardennes 1984 69 5,084 0 5,084 GECINA25/31, rue Pradier - 63, rue Fessart 1965 202 14,526 358 14,884 GECINA8/10, rue Manin 1967 113 6,213 0 6,213 GECINA

Paris 20th

19/21, rue d’Annam 1981 57 2,907 0 2,907 GECINA59/61, rue de Bagnolet 1979 57 3,227 101 3,328 GECINA44/57, rue de Bagnolet 1992 30 1,926 308 2,234 GECINA162, rue de Bagnolet 1992 32 2,305 134 2,439 GECINA42/52 and 58/60, rue de la Py15/21, rue des Montibœufs 1967 141 7,967 498 8,465 GECINA20/24, rue de la Plaine - 15/17, rue de Lagny 1965 218 12,591 0 12,591 GECINA

Subtotal properties in operation Paris 8,966 597,666 60,150 657,816

Versailles (78000)79, rue des Chantiers 1965 63 4,128 156 4,284 GECINAPetite place - 9, rue Sainte-Anne 6, rue Madame - 20, rue du Peintre-Le-Brun 1968 192 13,899 1,045 14,944 GECINA48, rue Albert-Joly 1966 24 1,968 175 2,143 GECINA13, avenue du Général-Pershing 1972 152 10,895 0 10,895 GECINA7, rue de l’Amiral-Serre 1974 75 5,577 0 5,577 GECINA6, boulevard du Roi 1966 23 1,732 0 1,732 GECINA

Saint-Germain-en-Laye (78100)33/61, rue Rouget-de-L’Isle40/41, rue Jeanne-d’Albret 1987 17 2,228 0 2,228 GECINA31, avenue Saint-Fiacre - 10/28, rue Marie-Stuart 1987 19 2,568 0 2,568 GECINA17, rue Félicien-David 1966 41 2,996 0 2,996 GECINA

Le Chesnay (78150)16/20, rue Pottier 1980 147 8,147 443 8,590 SA PARIGEST

La Celle-Saint-Cloud (78170)16/22 bis, avenue de Circourt 1966 44 3,539 0 3,539 GECINA1, allée du Béarn 1961 245 16,091 0 16,091 GECINA

Poissy (78300)10, boulevard de la Paix 1972 26 1,872 121 1,993 GECINA

Bougival (78380)12/18, côte de la Jonchère 1982 71 5,909 0 5,909 GECINA

Chatou (78400)3, avenue de la Faisanderie 1972 27 1,723 0 1,723 GECINA

Maisons-Laffitte (78600)21/31, rue des Côtes 1982 47 3,854 0 3,854 GECINA56, avenue de Saint-Germain 1981 64 5,046 0 5,046 GECINA

Saint-Michel-sur-Orge (91240)Rue Berlioz 1968 294 20,098 632 20,730 GECINARue Chabrier 1968 511 38,348 0 38,348 SCI PARIS-

SAINT-MICHEL

Courbevoie (Paris-La Défense) (92000)3/6, square Henri-Regnault 1974 224 12,626 0 12,626 GECINA

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Boulogne-Billancourt (92100)59 bis/59 ter, rue des Peupliers35 bis, rue Marcel-Dassault 1993 33 2,740 292 3,032 GECINA175, boulevard Jean-Jaurès 1994 49 3,001 0 3,001 SA PARIGEST94/98, rue de Bellevue 1974 63 4,474 0 4,474 GECINA108, rue de Bellevue - 99, rue de Sèvres 1968 424 29,966 0 29,966 SA PARIGEST

Issy-les-Moulineaux (92130)20/22, rue Hoche 1984 27 1,664 0 1,664 GECINA30/32, rue Diderot - 35, rue Danton 1985 33 2,019 298 2,317 GECINA

Antony (92160)254/278, rue Adolphe-Pajeaud 1972 112 5,622 0 5,622 GECINA17/25, avenue Jeanne-d’Arc 1973 230 13,556 0 13,556 GECINA

Vanves (92170)2/6, rue Ernest-Laval 1978 62 3,406 1,070 4,476 SA PARIGEST5 bis, rue Larmeroux 1970 117 7,497 0 7,497 GECINA

Meudon (92190)7, rue du Parc - 85, rue de la République 1966 206 16,322 0 16,322 GECINA

Neuilly-sur-Seine (92200)54/56, boulevard du Général-Leclerc 70/72, rue Edouard-Nortier 1961 48 2,855 0 2,855 GECINA1/2/3/5/7/9, rue Théophile-Gautier 2, rue Casimir-Pinel 1880 114 9,994 415 10,409 GECINA41, boulevard du Commandant-Charcot 1950 32 2,985 0 2,985 SIF8, rue Berteaux-Dumas 1910 14 1,919 90 2,009 GECINA47/49, rue Perronet 1976 46 3,503 0 3,503 GECINA7 bis, rue Jacques-Dulud 1989 12 1,242 0 1,242 GECINA77, rue Perronet 1963 32 1,497 0 1,497 GECINA

Saint-Cloud (92210)165/185, boulevard de la République 1966 119 9,269 809 10,078 GECINA9/11, rue Pasteur 1964 63 6,526 0 6,526 GECINA

Châtenay-Malabry (92290)148, rue d’Aulnay 1973 113 6,400 0 6,400 GECINA97, avenue Roger-Salengro 1972 102 6,084 0 6,084 GECINA

Levallois-Perret (92300)136/140, rue Aristide-Briand 1992 73 4,699 0 4,699 GECINA

Sèvres (92310)Allée des Acacias - 15/17, route de Gallardon 1973 250 15,644 512 16,156 GECINA

Le Plessis-Robinson (92350)25, rue Paul-Rivet 1997 132 11,265 250 11,515 GECINA

Garches (92380)12, rue des Quatre-Vents 1987 8 1,120 0 1,120 GECINA17/21, rue Jean-Mermoz 1974 32 1,946 0 1,946 GECINA12, rue Sylvain-Vigneras 1972 158 10,776 0 10,776 GECINA

Courbevoie (92400)8/12, rue Pierre-Lhomme 1996 96 5,344 0 5,344 GECINA43, rue Jules-Ferry - 25, rue Cayla 1996 58 3,574 0 3,574 GECINA3, place Charras 1985 67 4,807 0 4,807 GECINA9, rue Kilford 1966 13 1,120 0 1,120 GECINA190, boulevard Saint-Denis 1965 30 2,281 0 2,281 GECINA161/165, rue Jean-Baptiste-Charcot 1965 89 6,314 0 6,314 GECINA9/15, rue Adélaïde 1971 38 2,407 152 2,559 GECINA4/6/8, rue Victor-Hugo - 8/12, rue de l’Abreuvoir 11, rue de l’Industrie 1966 202 13,977 732 14,709 GECINA102/110, avenue Marceau - 175/181, rue Jean-Pierre-Timbaud 1966 111 8,563 1,674 10,237 GECINA6, rue des Vieilles-Vignes 1962 54 2,716 0 2,716 GECINA

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Ville-d’Avray (92410)1 to 33, avenue des Cèdres - 3/5, allée Forestière 1, rue du Belvedère-de-la-Ronce 1966 584 40,157 1,008 41,165 GECINA6, chemin Desvallières 1965 81 6,234 0 6,234 GECINA14/18, rue de la Ronce 1963 159 15,902 0 15,902 GECINA

Asnières (92600)46, rue de la Sablière 1994 87 6,130 0 6,130 SA PARIGEST

Créteil (94000)1/15, passage Saillenfait 1971 114 8,628 0 8,628 GECINA

Saint-Maur-des-Fossés (94100)4, quai du Parc - 69, rue Gabriel-Péri 1966 40 3,452 0 3,452 GECINA

Saint-Mandé (94160)7, rue de l’Amiral-Courbet 1975 63 4,524 0 4,524 GECINA

Saint-Maurice (94410)1/5, allée des Bateaux-Lavoirs4, promenade du Canal 1994 87 6,382 0 6,382 GECINA

Maisons-Alfort (94700)58/60, avenue Georges-Clemenceau 1967 124 7,168 0 7,168 GECINA

Subtotal properties in operation Paris region 7,107 500,915 9,874 510,789Subtotal properties in operationParis + Paris region 16,073 1,098,581 70,024 1,168,605

Lyon 3rd

19/20, quai Augagneur 1890/1860 25 1,748 1,555 3,303 GECINA100, cours La Fayette 1965 218 17,683 1,884 19,567 GECINA15/33, rue Desaix 1963 280 17,164 1,077 18,241 GECINA113/119, cours Gambetta - 17, rue Dunoir (SGIL) 0 100 9,478 127 9,605 SGIL

(QUOTE-PART 36.5455%)

Lyon 4th

104/110, rue Hénon 1966 93 7,899 283 8,182 GECINA

Lyon 5th

85/92, quai Pierre-Scize 1890 101 7,900 1,638 9,538 GECINA

Lyon 6th

47, avenue de Saxe 1932 10 969 778 1,747 GECINA

Lyon 7th

Le Fleuve Sud - 9/11, rue Commandant-Ayasse 1969 16 1,303 279 1,582 GECINALe Fleuve Quai - 39, avenue Leclerc 1969 23 1,511 162 1,673 GECINALe Fleuve - 40/43, avenue Leclerc 1969 87 7,392 0 7,392 GECINA

Lyon 9th

La Clairière - 176, rue de Saint-Cyr 1972 120 9,987 0 9,987 GECINA

Villeurbanne (69100)83, cours de la République 1967 98 5,652 473 6,125 GECINA

Ecully (69130)20/24, chemin de Charrière-Blanche 1968 426 35,718 380 36,098 GECINA

Caluire-et-Cuire (69300)Bissardon - 23/29, rue de l’Oratoire 1962 211 17,876 489 18,365 GECINA

Subtotal properties in operation Lyons + Lyons region 1,808 142,280 9,125 151,405

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Fos-sur-Mer (13778)Les Jardins 1966 36 2,967 0 2,967 GECINA

Gradignan (33170)Chemin du Naudet 1974 240 7,560 0 7,560 GECINA

Subtotal properties in operation other regions 276 10,527 0 10,527General total properties in operation French provinces 2,084 152,807 9,125 161,932General total properties in operation 18,157 1,251,388 79,149 1,330,537

Unit sales programs

Paris 4th

9, rue Ferdinand-Duval 1800 1 33 27 60 GECINA

Paris 7th

63, rue de Varenne 1880 7 1,201 0 1,201 SIF63 bis, rue de Varenne 1880 3 380 0 380 SIF3, cité Vaneau 1880 7 961 0 961 SIF5, cité Vaneau 1880 3 506 0 506 SIF7, cité Vaneau 1880 5 888 0 888 SIF9, cité Vaneau 1880 4 754 0 754 SIF10, cité Vaneau 1880 6 979 0 979 SIF11, cité Vaneau 1880 5 627 0 627 SIF12, cité Vaneau 1880 5 843 0 843 SIF14, cité Vaneau 1880 5 828 0 828 SIF

Paris 8th

19, rue de Lisbonne 1930 5 552 0 552 GECINA166, boulevard Haussmann 1880 2 457 155 612 GECINA

Paris 12th

26/36, rue Claude-Decaen - 42/46, rue de Fécamp 1965 5 436 0 436 GECINA

Paris 13th

184, avenue de Choisy 1970 1 81 0 81 GECINA

Paris 14th

4/8, rue des Mariniers 1970 2 149 0 149 GECINA8/20, rue du Commandant-René-Mouchotte 1967 3 239 0 239 GECINA

Paris 15th

13, rue de Vouillé 1860 3 124 0 124 GECINA3, rue Jobbé-Duval 1900 16 731 0 731 GECINA

Paris 16th

8/10, rue Oswaldo-Cruz 1930 28 3,309 0 3,309 GECINA8/9, avenue Saint-Honoré-d’Eylau 1880 1 138 0 138 GECINA11, rue du Conseiller-Collignon 1933 18 2,342 0 2,342 GECINA/

SA PARIGEST

Paris 17th

6, rue Mariotte 1904 1 18 0 18 GECINA42 bis, rue Cardinet 1911 3 381 43 424 GECINA35, rue des Batignolles 1800 1 40 0 40 GECINA

Paris 18th

35, rue Joseph-de-Maistre 1850 4 152 0 152 GECINA

Paris 19th

104/106, rue Petit - 16, allée de Fontainebleau 1977 73 4,969 0 4,969 SA PARIGEST

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Paris 20th

17/35, rue du Repos 1969 1 42 0 42 GECINA

Total unit sales programs Paris 218 22,159 225 22,384

Bois-d’Arcy (78380)1/17, rue René-Laennec (Croix-Bois-d’Arcy) 1969 1 65 0 65 GECINA

Bois-d’Arcy (78390)2, rue Toulouse-Lautrec 1966 71 4,795 608 5,404 GECINA

Saint-Michel-sur-Orge (91240)Rue Berlioz, rue Debussy 1968 7 557 0 557 GECINA15/17, rue Chabrier 1968 3 158 0 158 SCI PARIS-

SAINT-MICHELMassy (91300)

Avenue nationale - allée de Suède, Norvège, Pologne,Finlande, Danemark - square du Portugal 1967 2 155 0 155 GECINA

Chilly-Mazarin (91380)5, rue des Dalhias 1972 2 175 0 175 GECINA

Orsay (91400)2/32, chemin des Vignes 1990 10 1,143 0 1,143 GECINA

Issy-les-Moulineaux (92130)134/138, avenue de Verdun 1971 2 122 0 122 GECINA

Neuilly-sur-Seine (92200)163/165, avenue Charles-de-Gaulle 1967 26 1,476 0 1,476 GECINA

Saint-Cloud (92210)8, avenue Francis-Chaveton 1989 3 182 0 182 GECINA

Bois-Colombes (92270)82, rue du Général-Leclerc 1970 4 364 0 364 GECINA

Gagny (93220)2/16, boulevard Jean-Pierre-Gardebled 1965 8 496 0 496 GECINA

Bry-sur-Marne (94360)106/108, avenue du Général-Leclercquai Louis-Ferber 1982 23 1,987 0 1,987 GECINA

Total unit sales programs Paris region 162 11,676 608 12,284

Lyon 2nd

1/3 and 12/22, cours Bayard - 44, rue Quivogne 1895 1 51 43 94 GECINA62, rue Mercière 1650 18 747 216 963 GECINA64, rue Mercière 1650 9 435 316 751 GECINA3/5, rue du Petit-David 1650 6 240 0 240 GECINA

Lyon 6th

18/22, rue Crillon 1969 15 1,271 257 1,528 GECINA

Villeurbanne (69100)2, rue Paul-Lafargue - 198, cours Emile-Zola 1995 18 1,389 0 1,389 GECINA

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Toulon (83000)2, rue Guiol - 7, boulevard de Strasbourg 1910 1 71 0 71 GECINA

Total unit sales programsLyons + Lyons region 68 4,203 832 5,036

Lille (59000)Parc Saint-Maur - avenue de Mormal 1962 1 164 76 240 GECINA

Total unit sales programs other regions 1 164 76 240

Total unit sales programs 449 38,203 1,742 39,944Total GECINA Group primarily residential assets 18,606 1,289,591 80,891 1,370,481

Paris 9,296 620,828Residential share of primarily residential assets 8,966 597,666Residential share of primarily commercial assets 330 23,162

Paris region 7,115 501,456Residential share of primarily residential assets 7,107 500,915Residential share of primarily commercial assets 8 541

Lyons 1,837 143,977Residential share of primarily residential assets 1,808 142,280Residential share of primarily commercial assets 29 1,697

Other regions 276 10,527Residential share of primarily residential assets 276 10,527Residential share of primarily commercial assets 0 0

Residential properties in operation as of December 31, 2003 18,524 1,276,788

Unit sales programsas of December 31, 2003 456 38,603Residential share of primarily residential assets 449 38,203Residential share of primarily commercial assets 7 400

Other 64 3,698

Total Group residential properties as of December 31, 2003 19,044 1,319,089Residential share of primarily residential assets 18,606 1,289,591Residential share of primarily commercial assets 438 29,498

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Background

Dynamic development

1959■ Creation of the Groupement pour le Financement

de la Construction (GFC), a Société ImmobilièreConventionnée.

1963■ Floated on the Paris Stock Exchange.■ Becomes a Société Immobilière d’Investissement (SII).

1991■ Acquisition of the real estate company GFII.

This company, created by the merger of three SII,owned real estate assets mainly located outside of Paris, in Lyons and the north of France.

1993■ Abandonment its status as an SII.■ Strategic focus on properties in Paris and the Paris

region and diversification into commercial property.

1997■ Acquisition of the real estate company FONCINA, with

properties valued at 213 million euros located in Parisand the Paris region.

■ On March 24, creation of FONCIGEF, a real estateservice subsidiary specialized in rentals and sales.

■ On October 3, issue of bonds convertible into shareswith a nominal rate of 3.25%, due January 1, 2004.

1998■ The Company’s growth gains speed with the

acquisition of IUF (340,000 sq.m. of rental properties)and LA FONCIERE VENDOME (48,900 sq.m. of rentalproperties) with Haussmann-style buildings in Paris,most of them offices.

■ GFC becomes GECINA.

1999■ On July 8, merger with SEFIMEG, then on December

16 with IMMOBILIERE BATIBAIL. GECINA doubles itssize; its revalued real estate assets rise above 4 billioneuros; and the Company becomes the leading privateinvestor in Lyons.

2000■ Acquisition of the real estate complex CARRE SAINT-

GERMAIN, located in Paris’s 6th arrondissement. Afterthe restructuring completed in the summer of 2002,5,000 sq.m. of offices and 9,064 sq.m. of commercialspace are available.

■ Launch of the Internet site www.gecina.fr■ Creation of GECITER, a commercial real estate

subsidiary.

2001■ Appointment of Antoine Jeancourt-Galignani as

Chairman of GECINA, succeeding Eliane Sermondadaz.Serge Grzybowski is named Chief Executive Officer.

■ Development of the DAUHINE PART-DIEU projectinvolving the construction of a 13,000 sq.m. officebuilding on one of the Group’s lands located rue de la Villette in Lyons.

2002■ Development of commercial property through:

• The acquisition of an office complex at 26-30, rue Saint-Georges and 23-29, rue de Châteaudun,Paris 9th, with a total surface area of 15,350 sq.m.;

• The acquisition of an office building located 5bis-7, rue Volney / 14-16, rue des Capucines, Paris 2nd, with a total surface area of 12,500 sq.m.

■ GECINA launches a public offer on SIMCO. Thisoperation allows GECINA to double its assets, from 4.1 billion euros to 8.4 billion euros.

■ Agreement between GECINA and Westbrook Partners,an American real estate investment fund, for the saleof approximately 1.2 billion euros of residentialproperties, half of which belonged to GECINA and half to SIMCO.

2003■ Joint venture with Apsys to restructure

the Beaugrenelle mall in Paris 15th .■ Launch of works on the Volney-Capucines building,

the future headquarters of the GECINA Group. ■ Adoption of the new SIIC tax system, retroactive

as of January 1, 2003. ■ LOCARE becomes the brand name for all

of the GECINA Group’s marketing activities (rental and sales).

■ Merger of SIMCO into GECINA approved on December 17.

■ Disposal of primarily residential real estate for 1.5 billion euros.

2004■ The par value of the GECINA share split in half

to 7.50 euros. Adoption of obligatory registered sharesas of January 7, 2004

financial report

2003

61 2003 Management report

Consolidated financial statements83 - Consolidated income statement84 - Consolidated balance sheet as of December 31, 200386 - Notes to the 2003 consolidated financial statements

Corporate financial statements107 - Corporate income statement108 - Corporate balance sheet110 - Notes to the 2003 corporate financial statements

125 Analysis of subsidiaries and equity interests

126 Five-year financial summary

127 Organization chart of the Group

128 Statutory Auditors’ report

135 Draft resolutions

144 General information pertaining to the issuer and its share capital

153 Special report submitted by the Board of Directors to the CombinedOrdinary and Extraordinary Shareholders’ Meeting of June 2, 2004

154 Report submitted by the Chairman on corporate governance andinternal control

161 Statutory Auditors’ report on the report prepared by the Chairman ofthe Board on the internal control

162 Board of Directors and executive management

168 Independent Auditors

169 Latest news

170 Persons responsible for the document, financial disclosures and audits

171 Report of the Statutory Auditors on the Registration Document

173 Readers’ Index

Contents

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2003 Management report

I • Organization of the Group

1 • Merger of SIMCO into GECINA

Background

On November 15, 2002, subsequent to a Public Offer,GECINA acquired 95.9% of SIMCO’s capital. Thisacquisition, which opportunely fitted into the firm’sgeneral strategic refocusing of its asset portfolio oncommercial real estate, as announced in September 2001,enabled GECINA to double its asset base, from€4.1 billion to €8.4 billon (block sale values as of December 31, 2002) and to rebalance the breakdown of its assets, giving the priority to commercial properties.

This acquisition corresponded to an investment of €2,269 million, €746 million of which was financedthrough a capital increase, represented by the issue of 7,808,046 shares, as well as through bankfinancing in the amount of €1,522 million.

In addition, in exchange for SIMCO 3.25% convertiblebonds (maturing on 1/1/2006) presented in the PublicOffer, GECINA issued 3,667,873 convertible bonds inNovember 2002 with financial conditions identical toexisting SIMCO bonds, and convertible into GECINAshares on the basis of 1 GECINA convertible bond for 0.9 GECINA share (before the two-for-one stock spliteffective January 1, 2004).

GECINA - SIMCO merger

Approved by the Extraordinary Shareholders’ Meetings of GECINA and SIMCO held on December 17, 2003, the merger of SIMCO into GECINA was carried out on the basis of values revalued as of December 31, 2002, to include assets and liabilities transferred by the mergedcompany, representing:• total assets of €4,340,357,828• liabilities assumed €1,527,355,476for total transferred net assets of €2,813,002,352

The assets transferred were valued on the basis of blockvaluation appraisals (excluding duties) of the properties.The liabilities assumed corresponded to those on SIMCO’sbalance sheet as of December 31, 2002, after accountingfor the dividends paid in 2003, as well as the tax expenseresulting from the option taken to be taxed under thenew SIIC tax system within the framework of theCompany’s activities as a real estate investment trust(Société d’Investissements Immobiliers Cotée).The merger parity was determined using the same multi-criteria method applied for the Public Offer initiatedin September 2002. It is based on a comparison of:

• the consolidated current cash flow before taxes pershare of each company;

• the net dividend paid each share; • the net asset value per share as of June 30, 2003,

calculated on the basis of block valuation appraisals(excluding duties) and after accounting for theconsequences for each of the two companies of opting for SIIC tax system;

• the share prices in the 3, 6, and 12 months immediatelypreceding the date of the meeting of the Board of Directors deciding the proposed merger.

Comparison of these criteria produces the following ratiosCash flow per share 0.73Net dividend per share 0.77Net asset value per share 0.78Share price 0.86

Except for the ratio of the two companies’ net asset value,which reflects the impact of GECINA’s acquisition ofSIMCO, the comparison of these criteria is not substantiallydifferent from the items of comparison used to determinethe exchange ratio proposed in the Public Offer inSeptember 2002, and for this reason the same exchangeratio was applied, i.e. 9 GECINA shares for 10 SIMCOshares.

On the basis of this exchange ratio and since the26,166,649 SIMCO shares held by GECINA and the357,124 shares SIMCO itself owned were not paid a dividend, GECINA’s capital increase carried out toremunerate transfers of assets totaled €10,067,220,through the issue of 671,148 shares of €15, attributedto SIMCO shareholders other than GECINA and SIMCOthemselves.

The difference betweenthe net assets transferred by SIMCO, minus the portion held by GECINA: €77,082,781

and the par value of the shares issued in the capital increase to be attributed to SIMCO shareholders other than GECINA and SIMCO themselves: €10,067,220constitute a merger premium: €67,015,561

and the difference betweenthe portion of SIMCO’s net assets corresponding to the SIMCO shares held by GECINA: €2,735,056,329

and, on the one hand, the restated book value of GECINA’s interest in SIMCO as recorded in GECINA’s financial statements: €2,707,285,215

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and, on the other hand, the restated book value of SIMCO’s treasury shares €30,290,361

represents a merger discount: €2,519,247

Note is made that the revaluation differential noted by GECINA, prior to the merger, on its equity interest in SIMCO, i.e. €425,459,279, was recorded as a merger premium.

2 • Composition of the Group

After the merger of SIMCO into GECINA, the Group wascomprised, as of December 31, 2003, of 54 distinct legalentitles, including 45 real estate companies with realestate assets or rights and 9 service companies. Followingthe merger with SIMCO, GECINA held 57% of theGroup’s assets directly: almost 90% of the residentialproperties and 30% of the commercial properties.

As can be seen in the organization chart presented in thisreport, subsidiaries are generally fully owned by the Groupexcept for:• Société des Immeubles de France - SIF, in which GECINA

has a 99.13% interest;• SCI Beaugrenelle, of which GECINA sold 50% of the

capital to SCI du Pont de Grenelle, in January 2003, as part of the project to restructure the shopping mall;

• SCPI La Rente Immobilière, in which SIF has a 60.23%interest;

• SGIL, in which GECINA only has a 36.55% interest.

The Group’s organization is highly centralized, since theofficers of the parent company also run the subsidiaries.GECINA ensures Group refinancing, except for severalfinancing arrangements that are specific to certain assetsheld by subsidiaries.

Most of the flows between the parent company and its subsidiaries therefore involve the pooling of financialresources within the framework of a cash pool covenantextended in July 2003 to SIMCO and its subsidiaries.Plans have been made to pursue the simplification and rationalization of the Group’s legal and financialorganization by strengthening the integration of the different entities.

3 • Activity and results of the main subsidiaries

As of December 31, 2003, the characteristics of theGroup’s subsidiaries are as follows:

SOCIETE DES IMMEUBLES DE FRANCE

SOCIETE DES IMMEUBLES DE FRANCE, listed on EuronextParis (premier marché), became a direct subsidiary ofGECINA following the merger between GECINA andSIMCO. Its real estate holdings are primarily commercialproperties and are located in Paris. In 2003, it sold most of its residential properties to WestbrookPartners for €142.3 million and continued to sell the Vaneau complex apartment by apartment.

Despite the divestments in the second half, rentals billedduring the year totaled €37.2 million, compared with €35 million in 2002, owing to the full-year operation ofthe Cambon-Madeleine complex and, to a lesser degree,of the building at 32, boulevard Haussmann, Paris 9th.

The appraised value of its real estate assets was €617 million as of December 31, 2003. In 2003, it opted for the new SIIC tax system. Net income stood at €63.5 million compared with €28.9 million in 2002,up 119.4%. SIF’s Shareholders’ Meeting on June 8, 2004, is asked to approve the distribution of a dividend of €0.77 pershare under its SIIC system.

PARIGEST

PARIGEST, a fully owned subsidiary of GECINA, primarilyowns residential real estate located in Paris and the closesuburbs, with an appraised value of €261 million as ofDecember 31, 2003.

Rentals billed during the year totaled €20.3 million,compared with €24 million in 2002. The decrease was dueto the disposal of four buildings in 2003. During the year,it opted for the new SIIC tax system. Net income stood at€20.6 million, compared with €17.5 million in 2002.PARIGEST’s Shareholders’ Meeting is asked to approvethe distribution of a dividend of €2.10 per share underits SIIC system.

GECITER

This fully owned subsidiary of GECINA, owns 39 commercialbuildings with an appraised value of €493 million as of December 31, 2003. Rentals billed during the year totaled€26 million, an amount comparable to the previous year(€25.8 million in 2002).

In 2003, it opted for the new SIIC tax system. Net incomestood at €14.5 million compared with a loss of €3.5 million in 2002 attributable to the merger discountrecorded following the absorption of three subsidiaries.GECITER’s Shareholders’ Meeting is asked to approve thedistribution of a dividend of €0.58 per share under its SIIC system.

LOCARE

LOCARE is a service company, holding “G” and “T” cards,which rents both residential and commercial propertiesand also conducts block and unit sales. It works for theGroup and third parties as well.

LOCARE took over the activities of FONCIGEF as ofJanuary 1, 2004. In 2003, the two companies reported a total volume of commissions of €17 million, 40% ofwhich were from outside the Group, placing LOCAREamong the top ten market players. LOCARE is also abenchmark real estate service provider in the markets of Ile-de-France and Lyons.

It combines a thorough knowledge of the market withexpertise in commercialization methods specific todifferent types of operations.

LOCARE reported net income of €3.2 million, comparedwith €2.4 million in 2002. LOCARE’s Shareholders’Meeting is asked to approve the distribution of a dividendof €1,000 per share.

COMPAGNIE FONCIERE DE GESTION – CFG

CFG is also a Group service company, holding “G” and“T” cards. For third parties, it ensures the real estateand/or administrative management of different companiesthat own buildings.

In 2003, net income was €8.4 million, 12% of which wasfrom outside the Group, compared with €8.5 million in2002. After an allowance of €3.3 million for businessgoodwill representing a non-value, the company reporteda net loss of €2.5 million versus net income of€1.3 million in 2002.

II • Rental income(1)

In terms of rentals, the year 2003 was marked by a goodvolume of business as rents continued to climb upward,although at a slower pace than in previous years, and realestate holdings reported a satisfactory occupancy rate.

Altogether, in 2003 GECINA’s consolidated rental incometotaled €493.2 million, compared with €293.7 million in2002, which included a month and half of SIMCOoperations. Compared with the pro forma rental incomeof €522.1 million reported in 2002 by GECINA + SIMCO,rental income was down 5.5%, reflecting the majordivestments carried out in the last two years. On a constant basis, rents increased by 3.7%.

At €259.8 million, rental income in the commercial sectoraccounted for 52.7% of the GECINA Group’s rentalincome. Excluding properties for sale and on a constantbasis, rents in the commercial sector rose 3.1%. In a moredifficult commercial market, GECINA continued to benefitfrom the potential for rent increases. Rents in newtransactions, which concerned a total of 36,720 sq.m. in2003, were up 18.2% compared with the average rent inprior leases. The financial occupancy rate of commercialreal estate in operation stood at 94.9% in December 2003.

At €233.4 million, rental income in the residential sectoraccounted for 47.3% of the Group’s rental business.Favorable indexation and new rentals generatedsignificant growth on a constant basis and excludingproperties for sale of 4.3% in residential rents in 2003.Almost 2,400 apartments were re-rented in 2003.Average rents in new leases remained at a high levelduring the period, stabilizing at €17.6/sq.m./month inParis, €20 for Haussmann-style apartments in Paris and€12.9 in the Paris suburbs. Compared with the averagerent paid by the previous tenants, rents in new leases wereup 14.8% in Paris, 20.8% for Haussmann-style apartments,and 10.6% in the Paris suburbs. The financial occupancyrate of residential real estate in operation stood at 97.3%in December 2003, while the 12 month (y-o-y) turnoverrate came out at 14.2%.

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(1) Information on market developments is presented in the first part of the annual report.

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III • Financing policy

In 2003, GECINA implemented an active funding policywith a twofold objective: to reduce its debt and diversifyits sources of financing.

As of December 31, 2002, within the framework of thePublic Offer on SIMCO shares, GECINA benefited from aloan granted by a banking syndicate for an initial sum of €2,700 million, made available on August 29, 2002, andnegotiated to finance the acquisition of shares and ensurethe refinancing of a part of its own debt and that of theacquired company. The loan was finally reduced to €2,148 million at the first drawdown.

In fact, with the acquisition of SIMCO (€1,523 million) andaccounting for this company’s debt (€746 million),GECINA’s consolidated net financial debt amounted to€3,993 million as of December 31, 2002, and represented44.5% of the unit valuation appraisal of real estate assets(47.8% of the block valuation appraisal).

In 2003, GECINA employed most of the proceeds fromdisposals to reduce its net debt to €3,383 million as of June 30, 2003, and to €2,513 million as ofDecember 31, 2003, i.e. 32% of the unit valuationappraisal of real estate assets and 35% of the blockvaluation appraisal.

In addition, GECINA launched several bond issues in thefinancial markets. In the bond markets, it successfully floatedan issue in February 2003 in the amount of €500 millionwith a maturity of seven years, and two months later in thesame program, it issued an additional €100 million incomplementary bonds. The Company also set up an EMTNprogram totaling €1 billion, the first use of which, inOctober 2003, led to the issue of €250 million with amaturity of four years. These securities are listed on theLuxembourg stock exchange.

Complementing the diversification of its market resources,GECINA also issued commercial paper in October 2003 in the amount of €300 million.

Well in advance of the due date of its contractualobligations to banks, GECINA paid back the entirety of thesyndicated loan negotiated in August 2002, replacing it bymore flexible and better adapted financing instruments inthe form of bilateral loan agreements or club deals. Thelatter now include margin matrixes and covenants that willgive GECINA significant leeway to ensure its developmentwithout being obliged to refinance its debt.

After having renewed more than two-thirds of itsresources during the year, GECINA’s financing debt profileas of December 31, 2003, found itself significantlychanged. Market resources now accounts for 46% of netdebt, compared with 12% as of December 31, 2002.Correlatively, bank debt declined to 54% of the total.

With funding from diversified sources and a level of debtthat now represents only 32% of assets with a (unit) valueof €7.8 billion, GECINA has totally rebuilt its financialcapacity and can now rely on a broader base to pursue itsdevelopment strategy.

The notes to the consolidated financial statements (cf. 4.7)provide a detailed presentation of the Group’s debt at theend of the year and in particular of:• categories of resources: bonds, commercial paper, bank

loans, and lines of credit;• maturity: 1 year, between 1 and 5 years, more than

5 years, as well as duration;• nature: fixed, floating or regulated, with the

corresponding derivatives;• sensitivity to interest rate risks;• sensitivity to liquidity risks and presentation of the main

financial covenants the Company must respect withinthe framework of its financing agreements;

• amount of available lines of credit;• guarantees granted.

In order to preserve its ability to respond rapidly wheninvestment opportunities arise GECINA applies a prudentfinancing policy, both by maintaining available lines ofcredit and securing the cost of its resources throughderivative-based hedging.

As of December 31, 2003, GECINA had at its disposal in various banks a total of €938 million in undrawn linesof credit, including €300 million used as a back-up line for its commercial paper.

Because of the massive reduction in debt during the year,GECINA reported a slight excess in coverage at the end of2003. Coverage represented 117% of drawn gross debt atthe end of the year, and 80% of the debt by integratingthe undrawn fraction of the lines of credit. In a marketenvironment in which interest rates are at historically lowlevels, it seems preferable to maintain this position, whichmakes it possible to secure the cost of resources fromwhich the Company could benefit if all the available lineswere mobilized to finance new investments.

For 2003, the average cost of the debt stood at 4.8%. The coverage ratio for financial expense (EBITDA/ financial expense excluding provisions) was 2.54.Calculated on the basis of the debt as of December 31,2003, the ratio was approximately 3.

Consolidated debt guaranteed by real collateral(mortgages, lender’s liens, mortgage commitments)totaled €35.3 million at the end of 2003. In addition,GECINA financed three buildings through finance leasesfor a total of €329.8 million. Altogether, guarantees thusrepresent only 5.1% of the total (block) value of the assetsheld.

As indicated in the financial ratios presented in the firstpart of the annual report, GECINA’s financial situation atthe end of 2003 respected the different contractual limitsset for financial ratios in the loan agreements.

IV • 2003 financial statements

1 • Accounting impact of the option for SIIC tax system

After adjustments for the revaluation differential toaccount for the decrease in the valuation appraisals ofcertain properties during the year, opting for the new taxsystem had the following main consequences on the 2003consolidated balance sheet and statement of income

Balance sheetrevaluation of capitalized assets: €1,532 millionrecognition of a revaluation differential, Group share (after an exit tax of €258 million calculated on a standard tax base at a rate of 16.5%): €1,224 million

Statement of incomerecognition in the year’s statement of income of a non-recurring tax credit: €379 million representing the difference between payment of the balance of the exit tax: – €312 million tax due for discontinuation of activities: – €27 millionand the reversal of deferred taxes recorded as liabilities in the consolidatedbalance sheet as of 12/31/02 that now serve no purpose: + €718 million

In addition, the revaluation of the balance sheet implies arecurring increase in depreciation and amortization in thestatement of income. The amortization schedules for fixedassets are, in fact, calculated on the basis of new revaluedvalues, broken down for each property between the landand the buildings, on the basis of real estate valuationappraisals.

Thus, depreciation and amortization, which increased byapproximately 30% to €81 million after revaluation,compared with €62 million before revaluation, werecalculated on the basis of revalued values over service livesof 50 to 80 years depending on the assets.

2 • Consolidated financial statements

The 2003 consolidated financial statements were preparedon a revalued base as of January 1, 2003. Otherwise, theycan be compared with the 2002 consolidated financialstatements, which from November 15, 2002, i.e. a periodof only six weeks, recorded the consequences of theacquisition of a 95.9% equity interest in SIMCO.

Given the importance of these changes and to allowcomparison, comparative data is contained in the financialstatements in the form of:• a consolidated balance sheet as of 1/1/2003 after

revaluation and accounting for the option for SIIC tax system;

• a 2002 pro forma consolidated statement of income,presenting corrected results for the Group as if GECINA’sacquisition of SIMCO had taken place on 1/1/2002.

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Consolidated statement of income

In 2003, consolidated rental income totaled €493.2 million compared with €293.7 million in the previous year.

in € millions 2003 2002(1) 2002 2001pro forma (2)

Commercial rental income 259.8 122.5 247.4 99.4

Residential rental income 233.4 171.2 274.7 167.9

Total 493.2 293.7 522.1 267.3

(1) with consolidation of SIMCO since acquisition (1.5 months).(2) accounting for SIMCO on a 12-month basis.

Excluding proceeds from disposals, the 2003 EBITDA stood at €383.4 million, compared with €393 million on a 2002 proforma basis (GECINA + SIMCO). This 2.4% decline can be compared with the 5.5% decrease in 2002 pro forma rentalincome, reflecting the major disposals in 2002 and 2003. In fact, it shows the improvement in rental profitability, as can beseen in the rise in the EBITDA / rental income ratio, which was 77.7% in 2003, compared with 75.3% on the basis of2002 pro forma data (GECINA+SIMCO).

Disposals in 2003 totaled €1,522 million, compared with €502.9 million in 2002 for both GECINA and SIMCO.Nevertheless, because of the revaluation of the balance sheet as of January 1 following the option for SIIC tax system,disposals did not result in significant capital gains in the statement of income (€16.7 million). Calculated on the basis ofnon-revalued values, the capital gains would have represented an amount of €180.7 million compared with €93.2 million in 2002.

After net financial expense of €150.8 million, representing an average debt cost of 4.8%, current cash flow (excludingproceeds from disposals) stood at €232.6 million, up 11.9% from the 2002 pro forma current cash flow ofGECINA+SIMCO (€207.8 million).

In 2003, earnings before tax and non-recurring items (excluding proceeds from disposals) totaled €148.7 millioncompared with consolidated earnings before tax and non-recurring items of €101.8 million in the previous year and of €126.1 million on a 2002 pro forma basis.

After accounting for proceeds from disposals and allowances for depreciation of properties, earnings before tax and non-recurring items totaled €162 million compared with €206.1 million in 2002. It should, nevertheless, be remembered thatthese figures are not comparable. First, because of the revaluation of the balance sheet as of January 1, income in 2003included only minor capital gains (€16.7 million), whereas capital gains from disposals had totaled €93.2 million in 2002.Secondly, income in 2003 reflected a broader consolidation base (GECINA+SIMCO) over a 12-month period, whereas the2002 accounts had only consolidated the operations of the SIMCO subgroup for six weeks.

After accounting for the non-recurring taxes mentioned above that were charged to income in 2003 (€379.6 million),consolidated net income totaled €537 million in 2003, compared with €131.4 million as of December 31, 2002. After subtracting minority interests, which included the impact of the merger of SIMCO into GECINA, consolidated netincome - Group share was €535.5 million in 2003.

Consolidated balance sheet

Following the revaluation as of January 1, 2003, net fixedassets at the beginning of the year totaled €8,323 million,compared with €6,788 million as of December 31, 2002.During the reporting period, the principal changes in fixedassets were attributable to the year’s divestments(€1,518 million).

As required for a period of two years by the Comitéd’Urgence du Conseil National de la Comptabilité in its recommendation dated June 11, 2003, the amountof the revaluation differential as of January 1, 2003, wasadjusted at the end of the year in the amount of €74 million to reflect the decrease in the valuationappraisals made during the year.

Current assets, which totaled €258.6 million at the end ofthe year, included accounts receivable in the amount of€111.4 million and short-term cash investments in theamount of €147.2 million.

Consolidated shareholders’ equity - Group share stood at€3,773 million compared with €1,936 million as ofDecember 31, 2002. The major changes during the yearwere as follows:

Consolidated shareholders’ equity - Group share as of December 31, 2002 €1,936 millionImpact of the revaluation subsequentto the option for SIIC tax systemas indicated above €1,224 million Conversion of former GFCconvertible bonds €119 million Dividends paid in 2003 – €105 million Change in treasury shares – €10 million Takeover of SIMCO’s minority interests following the merger €75 million Consolidated net income in 2003 €535 million Other changes – €1 million

Consolidated shareholders’ equity - Group share as of December 31, 2003 €3,773 million

Changes in contingencies and loss reserve from one year tothe next were primarily due to the reversal of deferred taxesthat no longer serve a purpose as a result of the option forSIIC tax system, which were recorded in the previous year’sclosing balance sheet (€718 million). Borrowings and financial debt totaled €2,660 million as ofDecember 31, 2003, compared with €4,259 million at theend of 2002. Excluding marketable securities and cash andnear cash on the balance sheet (€147.2 million),consolidated net debt as of December 31, 2003, was

€2,513 million, down €1.5 billion since the beginning ofthe year. This change was primarily the result of using theproceeds from the year’s disposals to repay the debt. Italso reflected, for €132 million, the conversion of almostall of the former GFC convertible bonds in the last fewdays before the expiration date of January 1, 2004.

Liabilities also included €427 million in debtcorresponding to the exit tax that the Group will have topay on December 15, 2004, 2005 and 2006 since it optedfor SIIC tax system.

Off-balance sheet commitments, which are itemized in thenotes to the financial statements, include all significantcommitments as defined by generally accepted accountingprinciples in France. They are mainly interest rate hedginginstruments (swaps, caps and floors) used to secure thecost of the debt (€3,232 million), and collateral pledgedto guarantee funding (€35 million).

3 • Corporate financial statements

The GECINA parent company financial statements record(i) the consequences of the reevaluation of the balancesheet as of January 1, 2003, and (ii) the impact of themerger approved by the Shareholders’ Meeting ofDecember 17, 2003.

Thus, Grand total on the Company’s balance sheet rosefrom €5,461 million as of December 31, 2002, to€7,261 million as of December 31, 2003. Shareholders’equity increased from €1,745 million as a result of the following movements:

Shareholders’ equity as of December 31, 2002 €1,988 millionImpact of the revaluation subsequent to the option for SIIC tax system as indicated above €1,557 million Creation of capital and premiums resulting from the merger with SIMCO €74 million Conversion of former GFCconvertible bonds €119 million Dividends paid in 2003 – €105 million Net income in 2003 €21 million Recording in retained earningsof the dividend received fromSIMCO in June 2003 €79 million Other changes –

Shareholders’ equity as of December 31, 2003 €3,733 million

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On the balance sheet, fixed assets were comprised of:

• real estate assets directly owned by GECINA, the valueof which increased from €1,960 million at the end of2002 to €3,882 million, following the revaluation(€756 million), the transfer of SIMCO’s assets as a resultof the merger (+ €1,668 million) and the year’s disposals(– €982 million);

• equity interests in subsidiaries and affiliates and othercapitalized equity investments, which went from €2,804 million at the end of 2002 to €2,628 million atthe end of 2003, mainly owing to the revaluation of thebalance sheet (+ €536 million, including €426 millionfor the SIMCO shares), the transfer of SIMCO’s securitiesportfolio as a result of the merger (+ €2,017 million),and the cancellation of the SIMCO shares held byGECINA when the merger took place (– €2,707 million).

As of December 31, 2003, the shares of SOCIETE DESIMMEUBLES DE FRANCE (SIF), of which GECINA owns99.13% of the capital, represented €1,297 million.Company shares held by the Company (excluding thoseheld in representation of the plans of stock purchaseoptions granted to employees and officers recorded asmarketable securities for €11.8 million) represented avalue of €82 million.

Current assets, which totaled €722 million, includedmarketable securities and cash and near cash in theamount of €115 million, and subsidiary receivablesresulting from intra-Group financing (€551 million).

Financing debt as of December 31, 2003, totaled €3,061 million, compared with €3,258 million at the end of 2002. The change was due, first, to an €789 million increase in SIMCO’s financing debt as ofJanuary 1, 2003, as a result of the merger, and secondly,of a decrease attributable to the application to repaymentof the debt of the proceeds of the year’s disposals (€1,027 million) and the conversion of former GFCconvertible bonds (€132 million).

Liabilities also included €322 million in debtcorresponding to the exit tax related to the option for SIIC tax system.

In the statement of income, rental income, whichtotaled €289 million, was up 55% from 2002, reflectingthe increase in real estate assets from the merger withSIMCO retroactive as of January 1, 2003. After themerger, rental income accounted for 59% of the Group’s total consolidated rental income. Operating income stood at €150 million, compared with€221 million in the previous year, which recorded capitalgains on disposals in the amount of €121 million compared with €2.6 million in 2003.

The year’s financial result (– €153 million comparedwith – €65 million in the previous year) recorded thefollowing items:• first, interest and related expense (net of financial

revenues), which totaled €126.8 million, compared with€73 million in 2002, after accounting for expensestransferred to deferred charges in the amount of€47 million; this rise was primarily the result offinancing arrangements to acquire SIMCO;

• secondly, the following items recorded as financialallowances:- the cancellation of the expenses linked to the

acquisition of SIMCO that had been recorded at theend of 2002 as deferred expenses amortized over fiveyears (€47 million), since the absorption of SIMCO andthe full repayment of the syndicated loan negotiated inthe autumn of 2002 obviate any justification formaintaining them on the balance sheet;

- the amortization of convertible bond redemptionpremiums (€6.4 million, including the entire SIMCO1997 issue) and the premiums of the bond issue byGECINA in 2003 (€548,000);

- allowances of €5.4 million subsequent to therenegotiation of a swap contract, the reversal of whichwill be spread over the life of the contract.

After non-recurring expense and income of €5 million anda tax credit of €19 million primarily due to the accountingconsequences of the option for SIIC system, net income in2003 totaled €21.3 million compared with €110 millionin 2002.

V • Distribution and appropriationof net income

Taxable income in 2003 from rental operations under SIICsystem totaled €39 million. At least 85% of this sum mustbe distributed, representing €33 million.

In addition, capital gains from disposals under SIIC systemamounted to €28 million in 2003, with the obligation todistribute 50% of this sum, or €14 million. Since thisdistribution may be made over a period of two years, ithas been postponed until 2005.

Consequently, the Shareholders’ Meeting is asked toapprove the appropriation of 2003 net income as followsand decide:

From total earnings of the year €21,268,551Appropriation to retained earnings €84,510,197

Appropriation to dividend payout not exceeding €105,778,748 Appropriation to the long-term capital gains €2,346,533

Balance €103,432,215 Increased by a transfer from the share premiums, mergers, and contributions account €38,761,488

A total amount of €142,193,703

to distribute a dividend per share of €2.45,of which €0.65 under SIIC systemand of which €1.80 under common law system

representing a maximum amount of:under SIIC system €37,724,860 under common law system €104,468,843

No tax credit (avoir fiscal) is attached to the €0.65 fractionof the dividend under SIIC system. A tax credit (avoir fiscal)of €0.90 is attached to the €1.80 fraction of the dividendunder common law system for individual shareholders,and for legal entities that do not benefit from the parentcompany tax system, the tax credit is €0.18.

When the dividend is paid, to account for treasury shares,which by law are not eligible for dividends, the totalamount of the dividend distributed and the amountcharged to paid-in capital will be adjusted accordingly.

The dividend will be available for payment as of June 8,2004.

As required by law, the shareholders are informed thatdividend distributions in the following amounts weremade in the three previous years;

Year Net dividend Tax credit** Gross dividend

2000 €3.34 €1.67 €5.01

2000 adjusted* €1.67 €0.84 €2.51

2001 €3.60 €1.80 €5.40

2001 adjusted* €1.80 €0.90 €2.70

2002 €4.00 €2.00 €6.00

2002 adjusted* €2.00 €1.00 €3.00

* Adjusted amount to the two-for-one stock split decided by the ExtraordinaryShareholders’ Meeting of December 17, 2003.

** Tax credit (avoir fiscal) attached to the dividend distributed to individual shareholders.

In addition, the Shareholders’ Meeting will be asked toapprove the transfer from the merger premium in theamount of €24,501,779, corresponding to theadjustment of paid-in capital, the charging of expenses,duties and commissions, and the allocation to the legalreserve related to the merger.

The Shareholders’ Meeting will also be asked to approve thetransfer from the conversion premium of €1,952,398 to endow the legal reserve with a tenth of the capital increaseresulting from the conversion of bonds during the year.

Finally, the Shareholders’ Meeting will be asked to decideto transfer to a specific reserve account the revaluationdifferential of the assets sold during the year and theadditional amortization resulting from the revaluation inthe amount of €145,970,698.

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VI • Real estate assets - revaluednet asset value

As in previous years, the Group’s real estate assets wereappraised at the end of 2003 by a panel of threeindependent appraisers: INSIGNIA BOURDAIS, COEXTIMand FONCIER EXPERTISE. On the recommendation of theCommission des Opérations de Bourse, the appraisalswere performed in accordance with standard valuationmethods that are homogeneous from one year to the nexton the basis of comparison, capitalization and discountedcash flow for commercial properties: • for commercial real estate: only block valuation

appraisals;• for residential real estate: unit and block valuation

appraisals.

As of December 31, 2003, the appraised value (excludingduties) of the Group’s real estate assets was €7,793million on the basis of block valuation appraisals forcommercial real estate and unit valuation appraisals forresidential real estate, and €7,112 million on the basis ofblock valuation appraisals for all properties. On a constantbasis, block valuation appraisals remained stable forcommercial properties and increased by 5.9% forresidential real estate in operation.

At the end of 2003, revalued net asset after tax stood at: • €4,725 million on the basis of block valuation appraisals

for commercial real estate and unit valuation appraisalsfor residential real estate;

• € 4,044 million on the basis of block valuationappraisals for all properties.

Revalued net asset per share (based on the number ofshares as of December 31, 2003, after the two-for-onestock split and minus treasury shares) were respectively€83.73 (unit value) and €71.66 (block value). Afterdilution, revalued net assets per share were respectively€80.03 (unit value) and €69.28 (block value).

Reflecting the increased value conferred by SIIC taxsystem, revalued net asset per share (block value) after taxat the end of 2003 rose 28.4% in a year’s time (€55.80 atthe end of 2002).

VII • Creation of shares

In the second half of the month of December 2003, a large number of shares were created with effect as of January 1, 2003, as a result of:• the conversion of 1,299,315 former

GFC bonds (October 1997) into 1,299,315 shares• the conversion of 2,539 GECINA

bonds (November 2002) into 2,284 shares• the issue within the framework

of the merger with SIMCO of 671,148 shares

1,972,747 shares

Or 3,945,494 shares after the two-for-one stock split.

By significantly increasing, with effect as of January 1,2003, the number of shares used to calculate per sharedata, the creations of shares at the end of the year alteredthe comparative data between 2002 and 2003. Thegrowth rate minus cash flow per share was consequentlydiminished compared with the growth that would havebeen observed with constant capital.

The consequences on current cash flow per share of theconversion of all the convertible bonds in the three bondissues by GECINA (former GFC bonds issued in 1997,GECINA bonds issued in November 2002 in exchange forconvertible bonds issued by SIMCO in 1997) and SIMCO(remainder of the issue of convertible bonds in 1997) arepresented in the following table.

VIII • GECINA share

1 • Share price in 2003 (data adjusted to the two-for-one stock split as of January 1, 2004)

In the stock market, GECINA’s share price increased by 15.45% in 2003, from €50.50 on December 31, 2002, to €58.30 on December 31, 2003. The highest price of €58.90 was recorded in December and the lowest (€48.25) in April.

A total of 31,682,926 shares were traded in 2003 representing €1,645 million. At the end of 2003, the Company’s stockmarket capitalization stood at €3,383 million.

2 • Share buyback program

In 2003, GECINA used the authorization granted to the Board of Directors by the Shareholders’ Meeting of June 5, 2002,and renewed by the Shareholders’ Meeting of June 3, 2003, to buy back its own shares. During the year, 147,460 shareswere acquired at an average purchase price of €109.98.

After the exchange of GECINA shares for SIMCO shares resulting from the exercise of options by beneficiaries of plans andsubscriptions within the framework of SIMCO’s corporate savings plan, in conformity with the commitments taken in thePublic Offer, the number of shares held by the Company as of December 31, 2003, was 924,541, or 3.19% of the capital.They represent a total investment of €94.5 million, for an average unit price of €102.30 per share.

Since the authorization was granted by the previous Shareholders’ Meeting for 18 months, the Shareholders’ Meeting is asked to renew its authorization.

Current cash flow per share (*) 2003 Change 2002 Change 20022003/2002 2003/2002 pro forma

(%) pro forma (%)

1 – After merger and conversionCurrent cash flow (in € millions) 232.6 58.9% 146.4 11.9% 207.8

Per share (*) €4.11 9.1% €3.77 3.8% €3.95

2 – After dilutionCurrent cash flow (in € millions) 242.5 60% 151.5 9.5% 221.5

Per share (*) €3.81 6.6% €3.58 6.9% €3.57

(*) Adjusted amount to the two-for-one stock split as of January 1, 2004.

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IX • Human resources

1 • Workforce and employment policy

As of December 31, 2003, the GECINA Group had a consolidated workforce of 798, with 744 permanent hires and 54 fixed-term hires.

Women accounted for 62% of the permanent hires, and the breakdown by socio-professional category was as follows.

Professional category Men Women Total

Management 106 84 190

Supervisors 18 103 121

Employees 156 277 433

Total 280 464 744

An analysis of the Group’s workforce between December 31, 2002 and December 31, 2003, reveals the following trends:

Gender Workforce Permanent Fixed-term Promotion Workforce

as of Hire- Hire- Hire- Hire- as ofProfessional category 12/31/2002 new departure new departure + – 12/31/2003

Management M 125 1 19 5 4 1 109

W 102 2 21 2 2 87

Supervisors M 17 3 3 2 3 1 17

W 111 1 16 13 15 17 2 109

Administrative employees M 37 1 37 37 3 33

W 96 2 8 61 64 17 70

Building M 169 12 27 250 264 140

staff W 352 19 123 307 322 233

Total 2003 1,009 37 218 678 708 23 23 798

The large number of new hires and departures in fixed-term employment reflects the specific nature of the job done bybuilding staff, which requires the systematic replacement of this category of employees during any period of absence.

Departures in the permanent hire category are representative of the rebalancing of the workforce following the sale ofresidential properties worth €1.2 billion to Westbrook Partners in 2003. A double plan to preserve employment was thusorganized at both GECINA and SIMCO, completely based on employees’ free decisions to work for the new owner or not. These two plans to preserve employment only concerned administrative staff, since the employment contracts ofbuilding staff, which are specific to the building, were transferred to Westbrook Partners with the guarantees offered byarticle L.122-12 of the French work code (Code du travail). These plans to preserve employment were complemented by a series of measures that allow employees who so decide to pursue their personal career development.

As of December 31, 2003, therefore, the stabilized employment base made it possible to reorganize work procedures inthe Group and to benefit from the merger of GECINA and SIMCO by controlling and consolidating the level of these jobs(as well as payroll) as required for the good operation of the Group’s activities.

In general, the number of salaried employees as of December 31 in the last three years was as follows.

Professional category 2001 2002 2003

Management 99 227 196

Supervisors and administrative employees 144 261 229

Building staff 356 521 373

TOTAL 599 1,009 798

2 • Organization of the Group

In anticipation of the merger of the teams at GECINA and SIMCO, much thought was given to the organization ofoperating structures. Although they exercise the same activities, the two companies were organized in different ways.Since GECINA had tested the efficiency of a new organization during the year 2002, it was decided to keep this matrixand adapt it to the Group’s new size and configuration.

The activities of residential real estate and commercial real estate are clearly identified and separated from an operatingpoint of view, regrouping around the building all the tasks related to its management and maintenance. “Propertyentities” regrouping properties by geographic sector have been made into profit centers and are managed as such. Thisintegrated organization presents the advantage of concentrating responsibilities and fostering responsiveness to events. It also enables clients to identify their correspondents.

LOCARE is a marketing and sales structure that, in addition to its traditional commercial activities of apartment rental andsales (unit) for the Group, develops similar activities for institutional third parties.

The Group’s other divisions (Development, Finances and Human Resources) remain organized as these structures usually are.

The Group’s real estate assets in Lyons are managed by a regional structure proportional to the holdings that replicates theoperating organization in Paris.

3 • New headquarters

On October 6, 2003, all the Group’s administrative teams moved to the site of SIMCO’s headquarters (34, rue de laFédération, Paris 15th) to facilitate the merger of the teams and the rental of GECINA’s former headquarters in the tentharrondissement. The premises were rented in the weeks following the move. Only the Development division has separateoffices on rue de Monttessuy, which is not, however, very far from headquarters.

Regrouping the teams immediately boosted Group efficiency, first of all by just facilitating the sharing of experience andknow-how. Special attention was paid to furnishing and to ensuring conformity with safety standards. In this connection,the Company’s committee on health, safety and working conditions (CHSCT) played a major role from the spring,collecting employee suggestions and formulating recommendations.

4 • Labor harmonization

In 2003, the Group rebuilt its labor polices within the framework of the effective combining of the teams in October andthe merger of the companies.The Group’s executive management had committed, at the time of the acquisition, to rely on labor negotiations toharmonize the labor practices of the two companies. The negotiations continued throughout the year. The effort focusedon the ability to harmonize labor agreements without necessarily adopting the most advantageous conditions granted onone side or the other.

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An agreement on the methods to be employed wassigned on March 5, 2003, defining the form and contentof the negotiation, to be preceded by consultation on themerger project with the two works councils. Each of thesebodies gave its full and unreserved approval to the projecton September 4, 2003, illustrating the good quality ofsocial dialogue in the Company.

Several themes were at the heart of the negotiations:• employee representation and labor organization rights

were agreed on as of June 30, 2003; • common labor provisions mainly concerned the

harmonization of retirement benefits and dismissalindemnities;

• the Group also signed a new agreement oncomplementary reimbursement of healthcare costs andon retirement benefits; a call for bids from brokershelped rationalize coverage rates;

• another agreement was signed on the number andscheduling of work time; the workweek was set at37.5 hours, with the difference from the legal workweekof 35 hours to be compensated by 15 additional days off;

• negotiations on employee savings and retirementincorporated government projects proposed in 2003 inan attempt to create a dynamic employee savingssystem to take the place of the plans that exist atGECINA and SIMCO.

Two amendments to the respective agreements ofGECINA and SIMCO were signed on June 30, 2003, toharmonize gainsharing provisions with the same financialconditions for all the employees. Pursuant to currentlegislation, gainsharing is limited to 1/13th of total payroll.The system chosen, which will be confirmed by a companyagreement in 2004, combines an employee savings planoffering a diversification of funds and the new Frenchretirement account (PERP) which employees are free tosubscribe. The Company will only contribute to theemployee savings plan.The employee savings plan will take the form of aCompany mutual fund. Employees will subscribe shareswith a discount pursuant to current legislation. This fundwill be managed with multi-company funds to allowemployees to benefit from the diversification of theirsavings. The Company will match employee investment inthe fund.

5 • Training

In addition to continuing the training programs launchedin 2002 by each of the two companies to promoteprofessional real estate techniques (management andlegal issues), in 2003 training focused on the use of thenew computer system introduced as of January 1, 2004.

6 • Retirement benefits

1. Retirement indemnity obligationsAccrued retirement indemnity paid in application ofcompany or branch agreements are covered by insurancepolicies. The amount of the commitments is adjustedevery year using actuarial methods based on age atretirement, mortality, number of years in the Companyand employee turnover.A hypothetical annual revaluation of salaries is posited.Since the lump sum payment is made at the time theemployee actually leaves the company, it is updated onthe basis of a defined rate.

2. Supplementary retirement obligations withrespect to certain employees and officers

A. Commitments to certain employees

Within the framework of the different external growthoperations engaged since 1998, three additionalpension systems with defined benefits, in use in threemerged companies, were taken over by GECINA.

Their principal characteristics are as follows.

a) RECOGANThis system concerns administrative employees whooriginally worked for l’Union Immobilière de France(UIF). It guarantees a general level of retirementbenefits equal to 2% of the average salary in the36 months preceding retirement, per year in theCompany, within the limit of 37.5 years, and subjectto the condition that the employee be present in theCompany on the day of retirement.This system was discontinued in December 1998 andrights were only maintained for employees with at least 13 years in the Company at that date; 21 employees were still potential beneficiaries as of December 31, 2003.

b) Fonds Intérieur de RetraiteThis system, discontinued in 1986, concernsadministrative employees who originally worked forSEFIMEG. It guarantees differential retirement benefitsacquired for 2% of their reference salary by year ofseniority, with a ceiling set at 66% of this salary.At 55, employees can immediately benefit from thissystem in the form of early retirement. Only a fewbeneficiaries remain.To benefit from this system, an employee does nothave to be present in the Company at retirement.

c) AXAThis pension fund concerns all SIMCO employees. Itwas discontinued as of December 31, 2003, date ofthe merger of SIMCO into GECINA.To benefit from this system, an employee must be50 years and have worked for 10 years in the Group,without having to be present in the Company atretirement. When the fund was disbanded, it wasdecided to maintain the benefits for employeesworking in the Group as of January 1, 2004, and whomeet the same conditions of age and number of yearsin the Company that are required to benefit. Therights acquired have been frozen; no further rights aregenerated.

These three systems, which are managed by insurancecompanies are monitored and updated on a yearly basis.

B. Additional retirement benefits for Company officers

In 2001, an agreement was signed with Cardif toprovide additional retirement benefits for Companyofficers. To benefit, the retirement must also beinitiated at GECINA and the individual must have beenan officer for a minimum of five years. The funds paidinto this system ensure the payment to former officersof the retirement benefits to which they have a right.

Commitments are covered both by premiums paid tothese insurance companies and by additional allowancesin GECINA’s financial statements. Since all these systemsare sufficiently covered, no additional provision was madein 2003.

X • Risk exposure

GECINA ensures the protection of its clients, its assets, its employees and its activities by applying a policy of riskidentification, prevention and protection, aimed atreducing their frequency and seriousness.

Risk management and control

A Risk Management team supervises, monitors andadvises on operating risks.

The Group has set up a 24-hour monitoring system and acrisis management unit that can be mobilized in the eventof a material incident. There is an outsourced call centeravailable to tenants, staff on call, and a crisis managementteam. In 2004, the system will be extended to SIMCOproperties.

It was also decided to set up an Operating Risk Committeeto analyze and determine appropriate measures to betaken when risks arise.

Health and environmental risks

The composition of the Group’s property assets is not of anature to expose it to major environmental risks.

This category of risks is prescribed by legislation andregulations that are specific to real estate activities (inparticular, asbestos, lead poisoning and legionella, firesafety, etc.) for which GECINA has adopted a policy ofprevention.

Asbestos

At the end of 2003, GECINA had conducted 1,609 auditson all types of building materials (excluding properties forsale).

Overall, the completed audits did not detect the presenceof degraded asbestos requiring major works, except for abuilding in which asbestos removal studies are beingconducted.

Generally speaking, the building materials are in goodcondition and require little removal work. Asbestosremoval in the last four years represented an expense of€2.3 million. Identified installations of asbestos were allremoved by the end of October 2003. Thirteen buildingsare, however, under particular surveillance with aninspection every three years.

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In addition, GECINA decided to adopt an offensive riskcontrol policy with regard to asbestos and drew up acharter pursuant to which, GECINA shall:• adopt a general risk prevention and regulation

anticipation policy;• commit to transparency when asbestos is found in its

buildings;• do everything possible to eliminate the risks linked to

asbestos for tenants, companies or another person orentity, or to give them all the information they require totake preventive measures;

• remove, wherever possible, degradable materialscontaining asbestos that have been identified.Otherwise, GECINA commits to provide adequateconditioning for these materials.

Finally, GECINA launched for mid-2004 a complete audit(all building materials) of its buildings. At this date, morethan a year ahead of regulations, all materials containingasbestos will be identified and localized, and their state ofconservation will be analyzed.In order to preserve the environment for future generations,GECINA has processed all its asbestos waste as final wastesince 2003, and has drawn up an inventory of materialscontaining asbestos produced by GECINA in the past andstored at controlled disposal sites in order to render theseproducts inert.

Lead paint

Although banned in France since 1948, lead paint ispresent in most buildings constructed before that date.

Group-owned properties concerned are in good condition,and works are carried out from time to time to cut offaccess. At the end of 2003, 292 lead paint audits hadbeen conducted, as had the treatment that is so necessaryto cut off access. No cases of lead poisoning werereported or observed.

When lead paint is removed, the waste materials aretagged and sent to special waste facilities pursuant toapplicable regulations.

Legionella

For the maintenance of its drinking water, heating and airconditioning systems, GECINA requires its service providersto monitor maintenance procedures at technicalinstallations and to respect regulations. For buildings withindependent air-cooling systems that may be liable tolegionella, maintenance companies or engineering firmsconduct yearly audits to control the presence of legionella,with negative results.

Termites and other parasites

To date, no building has been concerned by the presenceof termites. For the other measures related to hygiene,approved companies are in charge of eliminating rats andinsects and disinfecting garbage shoots.

Fire safety

The Group fully owns only three high-rise buildings andco-owns six other co-op buildings of this type. The totalarea of these buildings represents less than 3.5% of thetotal area. Safety records in these buildings have beeninspected by French authorities (Commission de Sécurité)and no anomalies were found that might compromise thesafety of the occupants or the properties.

In addition, 150 buildings were audited by the RiskManagement division or by independent consultantsbetween 2001 and 2003. The technicians and buildingstaff were trained in fire safety.

Elevators

GECINA’s and SIMCO’s properties were equipped with1,202 elevators as of December 31, 2003. The elevatorshave homogeneous contracts and in Ile-de-France aremonitored for safety and service reliability by consultingfirms. All of the elevator service contracts in the Lyonsregion were transformed into complete contracts.

In 2003, new specifications were drawn up for elevatorinspection teams, providing for better information for theowner (detailed photographs, report available over theInternet, etc.).

Regulated Environmental Protection Facilities(Installations Classées pour la Protection del’Environnement - ICPE)

The Group has few Regulated Environmental ProtectionFacilities:20 parking facilities with capacity of more than250 vehicles, 46 refrigeration units of more than 20 KW, 19 boiler rooms (other than standard urban heatingrooms) of more than 2 MW, 7 pyralene transformers (PCB), 19 flammable liquid reservoirs measuring more than 10 cubic meters.

Electromagnetic waves

65 devices are installed on the rooftop terraces of 51 buildings.Operators verify compliance. Their insurance includes third-party liability from damage caused by electromagnetic fields.

In light of scientific debate over this type of installation,GECINA has applied the principle of precaution anddecided not to install any other devices.

Water

The GECINA Group monitors water consumption on aproperty-by-property basis. None of its properties drawswater from wells or other underground sources. There is,therefore, no sourcing in a natural environment; thecommunal water supply provides all GECINA propertieswith drinking water. Every location is connected to thepublic water purification station.

The Group conducts water quality analyses as required.Inspections have revealed rather large quantities of lead inthree buildings. Lead was eliminated from horizontal waterpipes in the jointly owned areas of a residential property.

Energies

Engineering firms conduct periodic inspections of HVACequipment, controlled mechanical ventilation, boosterpumps, lifting pumps, hot water and water processingsystems. The technical control procedures include aminimum of 1 to 4 visits annually to every location. Atechnical report is drawn up for each building, indicatingtechnical surveillance information and consumptioncontrol.

To limit energy consumption, particularly of electricity, theGECINA Group upgraded electrical installations in abuilding in 2003.In addition, the Group replaced the boilers in five buildingswith gas-powered equipment with a higher yield.

Waste

Post-consumer and office waste are picked up bymunicipal trash collection services. GECINA’s operationscause no ground pollution.

Urban insecurity

Tenants want more and more security. GECINA has noproperties in particularly difficult neighborhoods. All thebuildings with more than 100 apartments benefit fromthe presence of a caretaker, and all the public areas aregated, even before the new regulations.

The Group examines on a case-by-case basis how tosecure properties by additional equipment such as doorcodes, access controls, video-surveillance, remote controlsurveillance and other mechanical protection systems.

Flooding in Paris

Public authorities have implemented a flood preventionplan (Plan de Prévention aux Risques d’Inondation - P.P.R.I.)in anticipation of a major flood of the Seine and itstributaries. Seventy-five buildings are located in the areaaffected by the great flood of 1910.

Ground pollution

Because of past industrial activities, certain properties maybe located in areas where the ground is polluted.However, the major excavations dug during theconstruction of buildings with two levels of basementmakes it possible to eliminate such properties from the listof locations concerned by ground pollution.

A study conducted in 2003 enabled the Group to identify22 buildings in areas of major (past or future) industrialactivities. The GECINA Group has received no complaintsabout possible ground pollution.

Buildings built over quarries of underground cavities

In Paris and the Paris region, public authorities(l’Inspection Générale des Carrières) have drawn up mapsof underground or open-air quarries. On the basis of thisinformation, a list has been made of the buildings locatedover a former quarry or underground cavity.

The zoning used as a reference by the GECINA Groupincludes the mining area itself as well as a larger spacecorresponding to the risks related to mining (primarily therisk of collapse).

Thirty-six buildings, including 24 in Paris, are located overquarries or land exposed to a natural risk. In all cases, theexcavations have been filled.

Insurance

The main risks against which GECINA has organizedinsurance protection are: property casualty and thesubsequent loss of rental income, construction risks,liability as property owner or as a real estate professional.

These risks are insured through a program based on a lienthat allows to limit the management costs of frequentclaims and on a transfer to insurance for serious risks,which GECINA covers, as do its subsidiaries and officers,through first-rate insurers. There is no captive insurancecompany in the Group.

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Coverage of damages and responsibilities related tobuildings

Since January 1, 2002, GECINA has subscribed a Groupinsurance policy covering any damage to its properties,including that caused by storms, acts of terrorism, claimsby neighbors and third parties, the loss of rental incomeand the subsequent losses and indemnities. Buildings areinsured for their new reconstruction value on the day ofthe incident. The contractual indemnity limit per claim iswithout limit for the great majority, €75 million for some30 buildings and €6.5 million for the 5 warehouses.

Because of the wide geographic spread of its assets andthe extent and content of its insurance coverage, a lossaffecting any one of its properties would have little impacton its financial conditions. Insurance coverage has beencalculated to provide the most comprehensive coveragefor a major incident that would affect the Group’s largestholding.

The level of deductibles in the insurance program caneasily absorb frequent claims, which are thereforemutualized among all the Group’s properties. Beyondlevels of conservation, risks are transferred to thetraditional insurance market.

The contract includes an automatic guarantee for addedrisks during the year with settlement at the end of theyear.

Liability insurance for building owners and forenvironmental risks is included in the primary contract.The insurance program for buildings thus includes policiessubscribed for construction operations, operation byoperation, pursuant to law 78.12 of January 4, 1978.

General and professional liability insurance

The corporal, material and immaterial consequences ofliability engaged because of operations or a professionalfault are insured by a Group contract. In an environmentin which insurance offerings are revamping andcontracting, GECINA maintained its guarantees. Themerger with SIMCO as of January 1, 2004, made itpossible to increase the general liability guarantee by €7.5 million to €10 million for an equivalent cumulatedpremium.

The mandatory liability insurance taken out by subsidiarieswhose activities enter into the field of application of theHoguet law is incorporated into the Group’s liabilityinsurance program.

Claims

GECINA submitted 83 claims in 2003. The cost of thelargest claim in 2003 was estimated at €2.1 million, withindemnification expected to be 93%.

Legal and financial risks

Particular regulations

Real estate rental and sales (unit sales and managementfor third parties) fall within the scope of the Hoguet law.Subsidiaries concerned by these activities (mainly LOCAREand GFC) have received the necessary business licensesfrom the Paris Préfecture de Police.

Lease management

Leases of new tenants are all prepared on the basis ofstandards studied by the management servicesdepartment in cooperation with the Legal and RiskManagement divisions.In the event of exceptional wording specific to certainoperations related to commercial leases, the clausesconcerning insurance, responsibility and safety may bemodified with the approval of the Legal and RiskManagement divisions.

Management of service contracts

GECINA experimented comprehensive contracts for certainservices related to building security, for example the supplyand maintenance of fire extinguishers, or security guards.Independently of economies of scale, these experimentsmade its possible to improve the quality of service andsecurity, as a result of the attention paid to specificationsand to GECINA’s more substantial weight in its relationswith its preferred suppliers. In 2004, this approach will beextended to their services related to risks and safety.

Litigation

To the best of the Company’s knowledge, there are nomatters currently in litigation that could have a materialimpact on the Group’s financial situation or net assets. TheCompany has established reserves for all known risks ofthis type.

Tenant insolvency risk

Since the Company’s rental properties cater to almost17,000 residential tenants and approximately 1,500 commercial tenants, the risks of tenant insolvency are greatly dispersed.

In 2003, GECINA introduced an innovative system that willbe launched in 2004 to protect against the risk of non-payment of rent on commercial office leases bysubscribing a credit insurance policy that allows to make aimmediate evaluation of the risks of potential tenants and,in the event of non-payment, to guarantee the unpaidrents for several years.

In 2003, the net cost of tenant insolvency was less than0.65% of total rents invoiced.

Financial risks

Financial risks are discussed in chapter III on financingpolicy.

XI • Draft resolutions

1 • Authorizations to issue securities

In order to provide the Company with the means, underthe best market conditions, to acquire the financialresources it needs to ensure its development, theShareholders’ Meeting is asked to renew theauthorizations granted to the Board of Directors to issuesecurities.

Issue of bonds

Whereas the intention of the Company is to lead theactive diversification of its sources of financing and in lightof the €850 million bond issue in 2003, the OrdinaryShareholders’ Meeting is asked to renew theauthorizations to issue bonds by increasing it to€1.5 billion. This authorization is granted for a period of5 years.

Issue of securities giving access to the capital withor without any pre-emptive right of subscription

These authorizations asked at the ExtraordinaryShareholders’ Meeting replace those granted by theOrdinary and Extraordinary Shareholders’ Meeting ofJune 3, 2003. It is proposed to set at €150 million in parvalue the ceiling on the capital that may be created withinthe framework of issues of this nature, and at €1.5 billionthe amount of bonds that may be issued. Note is madethat the limits on issues launched with or without any pre-emptive right of subscription within the framework ofthese authorizations, granted for a period of 26 months,are not cumulative.

Authorization to increase the capital through theincorporation of reserves or paid-in capital

The Shareholders’ Meeting is asked to authorize the Boardof Directors to increase the share capital throughincorporation of reserves, income or paid-in capital withinthe limit of a maximum nominal amount of €150 million.These capital increases may take the form of an increasein the par value of existing shares or the creation and freeattribution of new shares. This authorization replaces theauthorization granted by the Ordinary and ExtraordinaryShareholders’ Meeting of June 3, 2003.

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2 • Stock subscription or purchase options

Using the authorization granted by the Shareholders’Meeting of June 6, 2001, the Board of Directors set up astock purchase option plan and, in 2003, granted137,500 stock purchase option. In accordance withcurrent legislation, this attribution of stock options toCompany directors and certain Company managers isdiscussed in a special report of the Board of Directors.

Thus, in the last three years, 259,000 options (518,000after the two-for-one stock split) were granted within theframework of the authorization granted by theShareholders’ Meeting of June 6, 2001. The Shareholders’Meeting is asked to renew the authorization given to theBoard of Directors to grant new stock subscription and/orpurchase options to the directors and certain employeesof the Company or of companies in the Group. Thisauthorization will be granted within the limit of a totaladditional number of shares not to exceed 2.5% of thetotally diluted share capital.

3 • Authorization to increase the capitalthrough the issue of shares reserved to employees

This resolution is presented in application of the law onemployee savings of February 19, 2001, which stipulatesthat every three years, when the number of shares held byemployees represents less than 3% of the capital orwhenever there is a decision to increase the capital, theShareholders’ Meeting should be asked to vote aresolution authorizing capital increases reserved toemployees the employee savings plan.

In light of these provisions, the twenty-first resolutionauthorizes the Board of Directors, for a period of fiveyears, to conduct such capital increases within the limit of3% of the share capital. It will also make to possible tosatisfy the new legal provisions if the authorizationsrequested in the seventeenth, eighteenth and nineteenthresolutions are put to use.

4 • Authorization to reduce share capitalthrough the cancellation of shares

The Shareholders’ Meeting is also asked to renew for aperiod of 18 months the authorization granted to theBoard of Directors by the previous Shareholders’ Meetingto cancel all or part of the shares acquired by theCompany within the limit of 10% of the share capital byperiod of twenty-four months, and, correlatively, to reducethe share capital.

5 • Renewal of the appointment of a memberof the Board

The Shareholders’ Meeting is asked to renew theappointment of Anne-Marie de CHALAMBERT , whoseterm has just expired.

6 • Appointment of statutory and alternateauditors

Since the terms of two of the Company’s auditors, F-M Richard et Associés, and Ernst & Young Audit, as wellas the terms of their alternates, Sylvain Elkhaim andDominique Duret-Ferrari, were about to expire, theCompany called for bids in order to choose the auditors topropose to the Shareholders’ Meeting.

At the end of the selection process, the Board of Directors,on the recommendation of the Accounting and AuditCommittee, chose as a replacementPricewatherhouseCoopers Audit, represented by Eric Bulle,and Mazars & Guérard, represented by PhilippeCastagnac. The alternates are respectively Pierre Coll andPatrick de Cambourg.

Mazars & Guérard and Patrick de Cambourg informed theCompany of their resignation from their positions as thethird statutory auditor and alternate, for which they werenamed by the Shareholders’ Meeting of June 3, 2003.

7 • Compensation and mandates of Companydirectors

Pursuant to current legislation, the compensation andmandates of Company directors in 2003 are presented inan appendix to this report.

To reward the due diligence of the Board of Directors,reinforced by the provisions of the law on financialsecurity, and give the Company the means required forcorporate governance, which calls for a greater number ofmeetings of the Board and its committees, theShareholders’ Meeting is asked to adjust the amount oftotal directors’ fees by increasing the overall sum to€400,000, less than the combined amount of directors’fees and indemnities paid to directors by the twocompanies GECINA and SIMCO.

XII • Changeover to new accountingstandards IAS/IFRS

In 2005, GECINA should present its consolidated financialstatements according to the international accountingstandards (IAS/IFRS) with comparative data for 2004.Because of its activity, the main issues for GECINA in thechangeover to new accounting standards concernaccounting for fixed assets and processing financialinstruments, and to a lesser degree the new rules onrevenue recognition and the incorporation of socialcommitments.

Accounting for fixed assets

IAS 40 offers real estate companies the choice betweentwo accounting methods for fixed assets – (i) the fair valuemethod presents assets on the balance sheet at theirmarket price while recording the impact of marketfluctuations in the statement of income, whereas (ii) theother method is based on the historical cost.

GECINA has not yet opted for one or the other of thesemethods.

Nevertheless, it seems that in balance sheet terms andunder constant market conditions, opting for the fairvalue method should not have significant consequenceson consolidated shareholders’ equity to the extent thatsince the Company revalued its balance sheet as ofJanuary 1, 2003, after opting for SIIC tax system, the valueof the assets recorded in the consolidated balance sheetcorresponded to market values at the end of 2002.Conversely, net income in years that begin after January 1,2005, could be substantially affected by taking intoaccount the market fluctuations that would occur afterthat date.

In the hypothesis that we opt for accounting at historicalcost, GECINA would be led to apply the method bycomponents.

The application of this method would require revising thebreakdown between land and buildings in the value of theproperties now in the accounts in order to bring the valueof the buildings closer to the effective cost price ofconstruction in a built property. This preliminary step isindispensable to allow the breakdown of the building intoits different components and to define for each of themthe percentage they represent as well as the appropriate

amortization schedule according to its service life. In fact, after the revaluation as of January 1, 2003, thebuildings were valued on the basis of real estate appraisalsconducted at the end of 2002 that attribute market valuesto constructions, whereas the basis and the amounts havelittle to do with the reality of their cost price. Theintroduction of the method by components, whilemaintaining, building by building, the overall value of theassets should thus lead to an adjustment of theamortizable bases.

In addition, the amortization schedules defined by families of components will prompt a modification in theallocation to depreciation and amortization, theadjustment for which in 2003 and 2004 would beaccounted for in shareholders’ equity, following the rulesapplicable to changes in accounting policies.

Even if it is not selected for the consolidated financialstatements, the application of the component method ofaccounting for fixed assets will be mandatory as ofJanuary 1, 2005, for GECINA’s parent company accountsand those of its subsidiaries.

Financial instruments

The other field in which the adoption of IAS/IFRSstandards may have a significant impact concerns theprovisions of IAS 39 applicable to the accounting andvaluation of financial instruments.

According to the circumstances, the application of newrules governing financial debt and derivatives introducedto hedge interest rate risk may lead to a valuation of thedebt and of derivatives at their fair value or at theamortized cost.

A simulation of the consequences of the application of thedifferent methods on the Company’s portfolio of financialinstruments is being mounted in order to appreciate theimpact on the financial statements of the differentscenarios possible.

For fiscal years beginning as of January 1, 2005, and tothe extent that certain derivatives would not be qualifiedfrom an accounting point of view as a hedginginstrument, their changes in value according to marketconditions would be recorded in the statement of income.

It seems in the current state of the texts published that theapplication of the new IFRS standards to the consolidatedfinancial statements would tend to inject a strong dose of

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volatility into the year’s net income not as a result of theCompany’s management but owing to marketfluctuations. It therefore appears to be very important tobe able to dissociate, in the formation of net income, thepart that corresponds to operations actually conductedfrom the impact of variations linked to market changes,the effect of which is only potential at their reportingdate.

IAS/IFRS project

In order to prepare for the changeover to IFRS standards,which should be applied as of January 1, 2005, GECINAorganized a work group to identify the main differencesand their consequences between the accounting policiesalready in use in the Group and the new rules that may be applied.

As quantified consequences of changes that might occurare valued, GECINA will present the impacts as acomplement to the financial statements published in 2004as stipulated in the regulations.

XIII • Recent developments and prospects

With a financial structure that makes it possible to pursueits development, GECINA’s strategy in 2004 is clearlyfocused on investment. The objective is to increase thevalue of the assets, while maintaining a significantresidential activity that contributes between 35% and40% of the Group’s rental income. To achieve itsobjectives, the Group can arbitrate approximately €500 million of residential properties with low profitabilityand high metric value.

Independently of the study of files of significant portfoliosof commercial properties the Group regularly receives,several major products are currently being developed.

• In Lyons, the de la Buire commercial area will enter therealization phase once the building permit is granted inthe spring of 2004, allowing the project to get off to aquick start.

• The restructuring and development of the Beaugrenelleshopping mall will take a major step forward with thesubmittal of CDEC files and a request for the buildingpermit.

• The Group also undertook to increase from 11,000 sq.m. to 18,000 sq.m. the usable office andcommercial space it owns at 122, avenue du GénéralLeclerc in Boulogne in the suburbs of Paris, for aninvestment of approximately €35 million.

Lastly, the Group benefits from a promise to buy a 21,000 sq.m. real estate project in the seventeentharrondissement of Paris. This promise is subject tosuspensive conditions that should be raised in April 2004.The corresponding investment represents €112 million.

In addition, diversifying the scope of its activates andbacked by LOCARE’s expertise in unit sales, GECINA seeksoperations with valuation potential. To this end, the Grouphas bid for or is studying various calls for bids in order todecide if the offer represents a growth opportunity.

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Consolidated income statement

in € thousands 12/31/2003 12/31/2002 12/31/2002 12/31/2001PUBLISHED PRO FORMA(1)

Operating incomeRental income 493,162 293,661 522,133 267,306Net proceeds on disposal of properties 16,665 93,156 93,156 88,125Releases of allowances for building impairment 12,963 10,960 10,294Releases of allowances 6,959 9,352 14,418 21,427Rental charges and utilities billed to tenants 85,300 53,107 89,580 56,273Other transferred charges 4,116 1,820 2,677 1,705Other income 13,181 5,607 18,242 1,491

Total 619,383 469,667 751,166 446,621

Operating expensesOther external expenses 110,813 77,154 129,303 82,149Taxes and duties 43,223 27,052 46,384 27,741Payroll expense 51,342 27,367 52,613 25,472Depreciation and amortization 81,175 41,069 76,850 40,084Allowance for impairment 1,417 2,003 13,891Allowance for depreciation of current assets 5,497 3,303 3,939 3,578Contingencies and loss reserve 1,746 5,620 5,857 3,793Other expenses 6,932 3,378 11,283 2,288Total 302,145 186,946 326,229 198,996

Operating profit 317,238 282,721 424,937 247,625

Financial revenuesInterest and related income 11,617 4,198 5,530 1,309Expense transfers 10,372 10,372Release of reserves 11,108 200 200 39Total 22,725 14,770 16,102 1,348

Financial expensesInterest and related expense 162,466 87,275 201,165 67,240Depreciation allowance 13,495 4,072 9,670 5,222Total 175,961 91,347 210,835 72,462

Financial result –153,236 –76,577 –194,733 –71,114

Income before tax 164,002 206,144 230,204 176,511

Non-recurring income (expense) –1,847 –6,599Earnings before tax 162,155 206,144 230,204 169,912

Corporate income tax –26,235 –59,724 –56,904 –45,274Exit tax –311,498Deferred taxes 712,790 –14,811 –29,844 –11,124Employee profit-sharing plan –34 –192 0Net income of consolidated companies 537,178 131,417 143,456 113,514

O/w Group share 535,519 130,865 142,363 113,297O/w minority interests 1,659 552 1,093 217

Net income Group share per share €18.92 €6.73 €5.42 €6.10Diluted net income Group share per share €17.37 €6.44 €5.06 €5.51

(1) Including the acquisition of SIMCO as of January 1, 2002.

Consolidated financial statements

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Consolidated balance sheet as of December 31, 2003

12/31/2003 01/01/2003 12/31/2002 12/31/2001REVALUED PUBLISHED PUBLISHED

in € thousands GROSS DEPRECIATION NET NET NET NETAND AMORTIZATION

FIXED ASSETS

Intangible fixed assets 7,651 4,287 3,364 4,238 4,063 383Tangible fixed assets 6,913,268 75,768 6,837,500 8,303,954 6,772,091 2,828,443Land 2,454,842 1,417 2,453,425 2,933,401 2,392,653 1,076,780

Buildings 4,417,603 73,191 4,344,412 5,337,480 4,346,365 1,707,604

Other fixed assets 3,983 1,160 2,823 7,877 7,877 1,996

Construction in progress 36,840 36,840 25,196 25,196 42,063

Long-term financial assets 12,930 1,648 11,282 15,106 12,068 9,314Equity investment securities 1,114 697 417 7,878 4,840 4,539

Other long-term financial assets 11,816 951 10,865 7,228 7,228 4,775

TOTAL FIXED ASSETS 6,933,849 81,703 6,852,146 8,323,298 6,788,222 2,838,140

CURRENT ASSETS

Rent receivables 37,099 18,309 18,790 27,946 27,946 15,698

Other receivables 62,047 693 61,354 80,239 80,239 13,715

Marketable securities 130,836 866 129,970 240,495 240,495 124,792

Cash and near cash 17,278 17,278 25,206 25,206 11,737

Pre-paid expenses 645 645 667 667 281

Deferred tax assets 1,191 1,191 755 755 2

Convertible bond redemption premiums 16,977 16,977 21,732 21,732 4,825

Deferred expenses 12,435 12,435 17,079 17,079 6,631

TOTAL CURRENT ASSETS 278,508 19,868 258,640 414,119 414,119 177,681

Assets

TOTAL ASSETS 7,212,357 101,571 7,110,786 8,737,417 7,202,341 3,015,821

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in € thousands 12/31/2003 01/01/2003 12/31/2002 12/31/2001REVALUED PUBLISHED PUBLISHED

SHAREHOLDERS’ EQUITY

Share capital 435,287 405,696 405,696 288,571

Additional paid-in capital 1,359,245 1,207,760 1,207,760 368,830

1,255,385 1,223,599

Consolidated reserves 187,693 192,079 192,079 342,595

Consolidated income or loss 535,519 130,865 130,865 113,297

Income to record in 2003 – 355,418

TOTAL SHAREHOLDERS’ EQUITY 3,773,129 3,515,417 1,936,400 1,113,293

TOTAL MINORITY INTERESTS 38,149 117,278 76,079 446

Contingencies and loss reserve 75,823 81,002 743,682 249,930Deferred tax liabilities 42,632 30,047 692,727 226,441

Allowance for contingencies and losses 33,191 50,955 50,955 23,489

DEBTConvertible bonds 358,431 491,085 491,085 247,872

Borrowings and financial debt 2,301,810 3,767,602 3,767,602 1,309,682

Security deposits 59,928 70,614 70,614 38,742

Trade notes payable and accounts payable 16,623 24,573 24,573 19,949

Tax and social liabilities 451,351 633,220 55,680 21,143

Other liabilities 25,848 33,457 33,457 12,326

Adjustment accounts 9,694 3,169 3,169 2,438

TOTAL LIABILITIES 3,223,685 5,023,720 4,446,180 1,652,152

Liabilities

TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 7,110,786 8,737,417 7,202,341 3,015,821

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I • Highlights of the year

1.1 • Main events

Fiscal year 2003

1. Option for SIIC tax system (Sociétésd’Investissements Immobiliers Cotées) andrevaluation

On September 9, 2003, the Board of Directors opted forthe new SIIC tax system within the framework of theCompany’s activities as a real estate investment trust, andall of the Group’s tangible and long-term financial assetswere freely revalued as of January 1, 2003.The revaluation was based on block valuation appraisals,net selling prices, as of December 31, 2002. In keepingwith the general principles and provisions of opinion2003-C of the Comité d’Urgence du Conseil National de laComptabilité, the revaluation recorded for its amount netof the exit tax in shareholders’ equity. The effects of thisrevaluation are presented in paragraphs 1.2, 2.1, 2.5.3,2.5.4, 4.1 and 4.5.This option implied an exit tax assessment in the amountof €569,531,000, of which €257,853,000 were chargedto the revaluation differential and €311,498,000 to theyear’s expenses. The revaluation differential totaled€1,255,385,000 as of December 31, 2003.

2. Depreciation and amortization

Following the free revaluation as of January 1, 2003,depreciation and amortization were calculated overperiods of 50 to 80 years applied to the values relatingfrom the real estate appraisals as of December 31, 2002and in line with the breakdown of the “block valueexcluding duties” between land and buildings as definedin these appraisals.

CRC regulation n° 2002-10 of December 12, 2002,stipulated that for “first category” replacement expensesand for “second category” major repair works in thetransition period of 2003 and 2004, that either provisionsmust be allocated for major repairs or the “components”approach be applied. CRC regulation n° 2003-07 of December 17, 2003,modified the previous regulation by excluding forcompanies that do not apply the “components” approachany first time accounting of provisions for major repairsas replacement expenses. Conversely, for the samecompanies, it confirmed the obligation to allocateprovisions for major repairs or renovations.GECINA did not opt for early application of the“components” approach in 2003. With regard to multi-year programs, no provision of this nature need to beallocated by the Group except for those required bylegislation on French real estate investment vehicles(Sociétés Civiles de Placements Immobiliers).

3. Merger of SIMCO into GECINA

The SIMCO Extraordinary Shareholders’ Meeting andthe GECINA Combined General Shareholders’ Meetingof December 17, 2003, decided to merge SIMCO intoGECINA effective retroactively as of January 1, 2003, andsubsequent to revaluation. GECINA thus issued 671,148new shares in remuneration of the 2.77% of SIMCO’scapital not held as of that date.

4. Completion of a major asset disposal program

In 2003, the GECINA Group sold €1.5 billion of assets,primarily low-yield residential properties.For €1.2 billion, these disposals were conducted onthe basis of agreements recorded as off-balance sheetcommitments as of December 31, 2002, and finalizedin October 2002 with the American investment fundWestbrook Partners.

5. Conversion of bonds

Bond conversions during the year, mainly the GFC issueof 1997 maturing on January 1, 2004, generated thecreation of 1,301,599 new shares. Following theseconversions, shareholders’ equity increased by€119,072,000 (cf. 4.5), and the year’s income totaled€11,092,000.

Notes to the 2003 consolidated financial statements

Fiscal year 2002

Following the public exchange offering on SIMCO’sshares, GECINA acquired 95.9% of SIMCO’s shares and97.2% of the voting rights, as well as 97.9% of SIMCO’sCertificates of Guaranteed Value (CVG). The settlement date was November 15, 2002.The total price of the transaction was €2,269,004,000,of which €746,102,000 (including the premium) wasfinanced through a combination of equity (7,808,046 newshares issued) and bank loans (€1,522,902,000). In connection with the same offer, the Group issuedbonds convertible into GECINA shares in exchange forconvertible bonds issued by SIMCO. At the close of theoffer period, 95.9% of SIMCO’s convertible bonds hadbeen tendered, leading to the issue of new GECINAconvertible bonds (cf. 4.7.1).

1.2 • Comparability of financial statements

a) The published consolidated financial statements for2002 were presented before the revaluation of tangibleand long-term financial assets. The financial statementsalso include a balance sheet as of January 1, 2003, thatshows the different impacts of this revaluation on theaccounts at the beginning of the period year.

b) The consolidated financial statements for 2002accounted for the acquisition of the SIMCO Groupas of November 15, 2002, and therefore cannot becompared with the accounts of previous years.A 12-month pro forma statement of income for 2002,supposing the acquisition of SIMCO effective as ofJanuary 1, 2002, was included in the year’s financialstatements.The different notes to the balance sheet mentionthe significant changes linked to the acquisitionof the SIMCO Group in 2002.

II • Principles and methods of consolidation

2.1 • References

The Group’s consolidated financial statements were drawnup according to the consolidation methods defined byCRC regulation n° 99-02 published on June 22, 1999, oncommercial companies. In 2001, the recording of deferredtaxes in the assets resulting from temporary timingdifferences related to the amortization of the former SIIstatus was charged to consolidated shareholders’ equityin the amount of €16.9 million (cf. note 4.5).In 1999, since GECINA had acquired more than 90% ofthe shares of Artémis Immobilier, Financière SEFIMEG andSEFIMEG following the merger of these companies on July 8,1999, and more than 90% of the shares of ImmobilièreBatibail following the merger of this company onDecember 16, 1999, the operations were governed byarticle 215 of the guidelines for consolidated financialstatements. As such, no negative or positive goodwill wasrecorded when they were initially consolidated.Because of the free revaluation of fixed assets as ofJanuary 1, 2003 (cf.1.1), these provisions no longer impactthe balance sheet.

2.2 • Method of consolidation

The financial statements of subsidiaries over which theGroup exercises exclusive control are fully consolidated.The financial statements of subsidiaries over which theGroup shares control with another partner areproportionately consolidated. Certain companies are notconsolidated if they are not significant in terms of totalassets, shareholders’ equity and income.

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2003 2002 2001

REGISTRATION CONSOLIDATIONCOMPANIES (SIREN) % OWNERSHIP METHOD % OWNERSHIP % OWNERSHIP

GECINA 592 014 476 100.00% Parent 100.00% 100.00%SA La Foncière Vendôme 391 576 352 – – Merged 100.00%SA La Fourmi Immobilière 572 178 069 – – Merged 100.00%SA Union Immobilière et de Gestion 414 372 367 100.00% FC 99.95% 99.95%SARL Foncigef 411 405 590 100.00% FC 100.00% 100.00%SAS Geciter 399 311 331 100.00% FC 100.00% 100.00%SCI 63, avenue de Villiers 320 852 239 – – Merged 100.00%SCI du 159, avenue du Roule 320 921 133 – – Merged 100.00%SCI du 77/81, boulevard Saint-Germain 431 570 530 100.00% FC 100.00% 100.00%SCI Dupleix-Suffren 397 600 875 100.00% FC 100.00% 100.00%SNC Peupliers-Dassault 380 522 797 – – Liquidated 100.00%SPL 397 840 158 100.00% FC 100.00% 100.00%SCI Beaugrenelle 307 961 490 50.00% PC 100.00% 100.00%SCI Tour H15 309 362 044 100.00% FC 99.55% 83.33%SCI SB Acti-Défense 412 120 180 – – Liquidated 100.00%SCI SB Nord-Pont 412 234 197 100.00% FC 100.00% 100.00%SCI SB Grand-Axe 412 230 708 – – Liquidated 100.00%SCI SB Le Lavoisier 412 235 939 – – Merged 100.00%SCI SB Londres 412 235 061 100.00% FC 100.00% 100.00%SCI SB Miroir 412 231 003 – – – LiquidatedSCI SB Théâtre 412 251 415 – – – LiquidatedInvestibail 329 970 636 – – – MergedInvestibail Transactions 332 525 054 100.00% FC 100.00% 100.00%Sogecil 969 502 756 100.00% FC 100.00% 100.00%S.G.I.L. 964 505 218 36.55% PC 36.55% 36.55%SCI Les Peupliers 316 168 499 – – Sold 56.62%A.I.C. 351 054 432 100.00% FC 100.00% 100.00%Foncière de la Cité 403 267 651 – – – MergedFC Transactions 421 487 364 – – – MergedSAS du 262, boulevard Saint-Germain 410 285 464 – – – MergedSAS du 266, boulevard Saint-Germain 410 285 068 – – – MergedSAS du 86, avenue de Villiers 410 286 678 – – – MergedSAS du 90, avenue de Villiers 410 285 290 – – – MergedSAS du 38-42, avenue de Wagram 410 295 042 – – – MergedSAS du 23, avenue de Niel 410 286 298 – – – MergedSAS 4, rue Galliera 410 285 183 – – – MergedSAS du 184, rue de Rivoli 410 285 563 – – – MergedSA du 8, rue Cambacérès 602 015 588 – – – – SAS du 73, rue d’Anjou 412 697 567 – – Dissolved 100.00%SAS du 68 bis, rue Marjolin 412 697 591 – – - – SAS du 22-24, rue de Londres 412 697 476 – – - LiquidatedSAS du 48, boulevard Malesherbes 412 697 443 – – - MergedSAS du 51, boulevard de Strasbourg 412 697 211 – – Dissolved 100.00%SAS du 37, boulevard de Grenelle 412 693 558 – – Dissolved 100.00%SCI 16 VE Investissements 352 396 899 100.00% FC 100.00% 100.00%

Consolidated as of January 2002SA 23/29, rue de Chateaudun 387 558 034 100.00% FC 100.00% – SA 26/28, rue Saint-Georges 334 874 260 100.00% FC 100.00% –

2.3 • Scope of consolidation

As of December 31, 2003, there were 51 companies in the consolidated entity as presented in the following table.

2003 2002 2001

REGISTRATION CONSOLIDATIONCOMPANIES (SIREN) % OWNERSHIP METHOD % OWNERSHIP % OWNERSHIP

Consolidated as of November 2002(SIMCO Group)SA SIMCO 562 811 410 Merged FC 97.27% – SCI 24, rue Erlanger 430 143 810 100.00% FC 97.27% – SAS Feydeau Bourse 403 136 666 100.00% FC 97.27% – SCI Franco-Russe-Université 410 339 691 100.00% FC 97.27% – GIE Gessi 409 790 276 99.98% FC 97.26% – SCI 38, rue des Jeuneurs 429 811 516 100.00% FC 97.27% – SA Locare 328 921 432 99.76% FC 97.04% – SNC Michelet 419 355 854 100.00% FC 97.27% – SAS Parisienne Immobilière d’Investissement 1 434 021 200 100.00% FC 97.27% – SAS Parisienne Immobilière d’Investissement 2 434 021 309 100.00% FC 97.27% – SCI Paris Saint-Michel 344 296 710 100.00% FC 97.27% – SCI 6, rue de Penthièvre 429 956 493 100.00% FC 97.27% – SCI du 150, route de la Reine à Boulogne 399 945 153 100.00% FC 97.27% – SCI 5, rue Royale 429 956 550 100.00% FC 97.27% – SCI Sèvres Bellevue 432 858 389 100.00% FC 97.27% – SCI Ternes Opéra 389 626 821 100.00% FC 97.27% – SCI Vouillé-Nanteuil 412 066 011 100.00% FC 97.27% – SA Parigest 642 030 571 100.00% FC 97.27% – SAS Fedim 440 363 513 100.00% FC 97.27% – SA Société des Immeubles de France 572 231 223 99.13% FC 96.42% – SCI du 55, rue d’Amsterdam 382 482 065 99.13% FC 96.42% – SCI Capucines 332 867 001 99.13% FC 96.42% – SCI Delcassé 348 931 650 99.13% FC 96.42% – SCI du 5, rue Montmartre 380 045 773 99.13% FC 96.42% – SPIPM 572 098 465 99.13% FC 96.42% – La Rente Immobilière 306 865 270 59.70% FC 58.08% – SNC du 24, rue Royale 382 358 653 99.13% FC 96.42% – Sadia 572 085 736 99.13% FC 96.41% – SCI Saint-Augustin-Marsolier 382 515 211 99.13% FC 96.42% – Société Hôtel d’Albe 542 091 806 99.13% FC 96.42% – SCI Monttessuy 423 852 185 99.13% FC 96.42% – Compagnie Foncière de Gestion 432 028 868 99.13% FC 96.41% – Foncirente 403 282 353 99.13% FC 96.42% –

FC: fully consolidated.PC: proportionately consolidated.

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2.4 • Financial statement reporting date

The fiscal year lasts twelve months, from January 1to December 31, for all the consolidated companies.

2.5 • Consolidation adjustments andeliminations

2.5.1 • Consolidation adjustments andreclassifications (corporate financialstatements)

The rules and methods applied by consolidatedsubsidiaries are restated to ensure consistency with Groupstandards.

2.5.2 • Reciprocal transactions

Realized gains and losses on inter-company transactionsare eliminated in consolidation.

2.5.3 • Goodwill on acquired business

Goodwill on consolidation corresponds to the differencebetween the purchase price of the equity interest (plusrelated acquisition fees) and the proportionate share ofshareholders’ equity at the date of acquisition. Thispurchase goodwill is allocated to identifiable assets andliabilities whenever possible. Goodwill thus allocated isaccounted for according to the accounting policiesgoverning the relevant items, including the impact ofdeferred taxes. As of December 31, 2002, provisionalpurchase goodwill in the amount of €1,055,507,000 wascalculated by the partial method and fully broken downbetween land and buildings on the basis of their net bookvalue in the SIMCO Group’s consolidated financialstatements as of December 31, 2002.Because of the free revaluation of fixed assets as ofJanuary 1, 2003, block valuation appraisals as ofDecember 31, 2002, have been substituted for thisbreakdown (cf.1.1).

2.5.4 • Deferred taxes

Common law system

For companies that are not covered by the SIIC system,deferred taxes resulting from temporary timing differencesor deductions are calculated using the liability (or accrual)method of tax allocation for all temporary timingdifferences that exist in company financial statements,that are due to consolidation reclassifications, or thatresult from the elimination of intercompany transactions.They appear whenever the book value of an asset orliability differs from its taxable value. A net deferred tax

asset is not recorded for losses carried forward unless theyare likely to be charged against future taxable income.Within the framework of the free revaluation as ofJanuary 1, 2003 (cf.1.1), the revaluation differential wasrecorded in shareholders’ equity for its amount net oftaxes.

SIIC system

Companies that have adopted the SIIC system areexempted from corporate income tax if they distribute inthe next year 85% of net income, excluding capital gains,and 50% of the proceeds from disposals in the followingtwo years. In application of recommendation 2003-Cof the Comité d’Urgence du Conseil National de laComptabilité (Emergency Council of the NationalAccounting Board), deferred taxes related to SIIC assets onthe balance sheet as of December 31, 2002, werereversed in the 2003 statement of income in the amountof €735,766,000 (cf.1.1).

2.5.5 • Finance leases

Items acquired under finance leasing arrangements arecarried as balance sheet assets. Related liabilities arecarried as financial debt. Correlatively, related leasecharges are cancelled and the related interest expense andallowances for depreciation are recorded in accordancewith Group accounting policies.

III • Valuation methods and otheraccounting principles

Statement of income

In order to reflect the different components of the Group’sactivities more completely, proceeds from the saleof buildings, as well as allowances and reversalsof allowances for depreciation of real estate assets arerecorded as separate items in operating income (expense).

Balance sheet

For accounting purposes, assets and liabilities are valuedat their historical cost, except for tangible and long-termfinancial assets subject to a free revaluation as of January 1,2003 (cf. 3.1.1).In the comparative accounts for the years 2002 and 2001,it is recalled that the consolidation of the SEFIMEG andBATIBAIL groups was governed by article 215 of theguidelines for consolidated financial statements, i.e. the

acquisition value determined in 1999 for the assets andliabilities of the former SEFIMEG and IMMOBILIEREBATIBAIL groups is equal to their consolidated book value,reclassified according to GECINA’s accounting policies andmethods, while distinguishing gross values, depreciationand amortization. The consolidated financial statementsfor the SEFIMEG group are those published on July 1,1999, by ARTEMIS IMMOBILIER, SEFIMEG’s majorityshareholder at the time of the merger.The resulting net change in equity in 1999 can beanalyzed as follows.

SEFIMEG BATIBAIL

Capital increase 71,083 32,215

Additional paid-in capital (excluding amounts allocated to reserves, gains on cancelled shares and merger costs) 194,220 155,955

Impact of the pooling of interest method –33,769 –29,472

Increase in the Group’s shareholders’ equity 231,534 158,698

Because of the free revaluation of fixed assets as ofJanuary 1, 2003 (cf.1.1), this situation no longer impactedthe balance sheet as of December 31, 2003.

3.1 • Fixed assets

3.1.1 • Gross value of fixed assets

Tangible and intangible fixed assets acquired since January 1,2003, are recorded at their acquisition price includinginterest during construction in the case of built properties.Land and buildings subject to the free revaluation asof January 1, 2003, are recorded for their revalued valueon the basis of block valuation appraisals excluding dutiesas of December 31, 2002 (cf.1.1).In conformity with the recommendation of the Comitéd’Urgence du Conseil National de la Comptabilité on theaccounting consequences of the application of the newSIIC tax system, the decreases in block valuation appraisalsexcluding building duties as of December 31, 2003,compared with December 31, 2002, were corrected in theamount of €73,638,000 charged to the revaluationdifferential recorded at the beginning of the year(cf. 4.1.1).

3.1.2 • Amortization of fixed assetsAmortization of tangible and intangible fixed assets arecalculated by the straight-line method on the basis of the assets’ useful lives.

Intangible fixed assets

Computer software 1 to 5 years

Built properties as of January 1, 2003 (revalued values)

Residential properties (80 years until December 31, 2002) (1) 80 years

Commercial properties (80 years until December 31, 2002) (1) 50 years

Buildings on third-party land Period of use

Other fixed assets

Transport equipment 4 to 5 years

Office and computer equipment 3 to 5 years

Office furniture 10 years

(1) The 2002 pro forma statement of income had beenprepared using the amortization periods applied by theSIMCO Group (100 years for residential properties and50 to 100 years for commercial properties).

3.1.3 • Property depreciation

As stipulated, for a period of two years, in therecommendation of the Comité d’Urgence du ConseilNational de la Comptabilité, the decreases in block valuationappraisals as of December 31, 2003, compared withDecember 31, 2002, were corrected by charging therevaluation differential recorded at the beginning of the year.In addition, a supplemental allowance was calculatedon these buildings if the revaluation differential provedinsufficient, according to the following procedures.

Long-term real estate assets

Depreciation is recognized on a line-by-line basis when theappraised value of a property by an independent appraiseris lower than its book value, minus a 15% deductible.This allowance primarily concerns non-depreciable itemsand is adjusted every year on the basis of new appraisals.

Real estate up for sale or held for sale in the near term

Properties up for sale or held for sale in the near term arevalued at their estimated market value. Depreciation isrecognized when this amount is less than the book value.

3.2 • Equity interests in non-consolidatedcompanies

Equity interests in non-consolidated companies are recordedat cost, except for those included in the free revaluationas of January 1, 2003, which are recorded at their restatedvalue (cf. 1.1). A provision is calculated if depreciationis recognized with reference to their value in use.

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3.3 • Operating receivables

Receivables are carried at their nominal value. For rentreceivables, provisions are systematically booked on thebasis of the age of the debt and the situation of thetenants. Adjustments are made to account for individualcircumstances.

3.4 • Adjustment accounts (assets) and relatedreceivables

Deferred charges spread over several years basicallyinclude the following:• costs incurred to renovate properties before they are

put on the market, and which are recovered when theproperties are sold;

• convertible bond redemption premiums amortized ona straight-line basis over the bond’s scheduled maturity;

• premiums on interest rate hedging instruments, spreadover the period of the related hedge;

• debt issuance fees amortized over the life of the loans.

3.5 • Marketable securities

Marketable securities are carried at cost in the balancesheet. An allowance for impairment is recognizedwhenever the estimated fair value is lower than the netbook value.

3.6 • Treasury shares

A valuation allowance is recognized for shares specificallyacquired for the purchase options granted to employees andofficers, considered as marketable securities, if the bookvalue is more than the exercise price. All other treasuryshares owned by the Group are deducted from consolidatedshareholders’ equity at their acquisition value or at cost.

3.7 • Convertible bonds

Bonds issued by the Group are recorded at theirredemption value. The corresponding redemptionpremium is carried as an asset and is subject to straight-line amortization over the bond’s scheduled maturity.

3.8 • Provisions for works

a) No provision for major repairs concerning significantmaintenance and substantial renovations is includedin multi-year plans. No provision was therefore madeexcept for SCPI LA RENTE IMMOBILIERE (cf. 1.2).

b) Property maintenance costs are charged to income inthe year in which they are incurred. Renovation worksare capitalized.

c) In the accounts for 2001, a provision for maintenancewas charged to shareholders’ equity following theacquisition of SEFIMEG and IMMOBILIERE BATIBAIL inorder to harmonize property maintenance standards.The portion not used as of December 31, 2001,was credited to shareholders’ equity in the amountof €8,845,000.

d) As of December 31, 2001, goodwill on improvements,which was amortized over ten years and recorded inthe consolidated financial statements when LA FOURMIIMMOBILIERE was acquired in 1998, was deductedfrom tangible fixed assets.

3.9 • Financial instruments

The Group primarily uses interest-rate swaps, caps andfloors to hedge its interest-rate exposure on outstandingcommitments. The resulting gains and losses are recordedin the statement of income on a pro rata basis (cf. 4.7.2and 5.4).

3.10 • Accrued retirement liability

Retirement indemnity obligations

Accrued retirement indemnity paid in applicationof company or branch agreements is covered by insurancepolicies or allowances for the portion not covered bythe insurance policies.

Supplemental retirement obligations with respect to certain employees

Commitments regarding additional retirement benefitsfor certain employees are estimated using the actuarialmethod and mortality tables. They are managed andadministered by external organizations, and, if required,involved payments to these organizations or allowancesto cover the Group’s commitments.

IV • Notes to the consolidated balance sheet

4.1 • Fixed assets

4.1.1 • Intangible and tangible fixed assets

CHANGES LINEGROSS VALUES REVA- ACQUI- IN ITEMin € thousands 12/31/2001 12/31/2002 LUATION SITIONS DISPOSALS SCOPE TRANSFERS 12/31/2003

Intangible fixed assets 865 4,668 –38 124 2,896 7,650

Land 1,103,298 2,409,708 568,174 13,961 –537,000 2,454,843

Buildings 1,912,290 4,567,517 751,875 84,736 –974,794 –13,121 1,390 4,417,603

Other tangible fixed assets 5,547 11,272 –8,418 1,219 –53 –58 20 3,982

Tangible fixed assets in progress 42,063 25,196 –18,006 31,338 –619 –1,069 36,840

TOTAL 3,064,063 7,018,361 1,293,587 131,378 –1,511,847 –13,798 3,237 6,920,918

CHANGES LINEAMORTIZATION REVA- ACQUI- IN ITEMin € thousands 12/31/2001 12/31/2002 LUATION SITIONS DISPOSALS SCOPE TRANSFERS 12/31/2003

Intangible fixed assets 481 605 786 2,896 4,287

Buildings 202,497 220,460 –218,248 78,647 –5,455 –2,211 73,193

Other tangible fixed assets 3,551 3,394 –3,012 853 –17 –56 1,162

TOTAL 206,529 224,459 –221,260 80,286 –5,472 –2,267 2,896 78,642

CHANGES LINEDEPRECIATION REVA- ACQUI- IN ITEMin € thousands 12/31/2001 12/31/2002 LUATION SITIONS DISPOSALS SCOPE TRANSFERS 12/31/2003

Intangible fixed assets

Land 26,518 17,055 –17,055 1,417 1,417

Buildings 2,189 692 –692

TOTAL 28,707 17,747 –17,747 1,417 1,417

NET VALUES 2,828,826 6,776,155 1,532,594 49,675 –1,506,375 –11,531 341 6,840,859

As of December 31, 2003,

the net book value of buildings on third-party land was €132,252,000. The data in the revaluation column (cf. 1.1.1 and1.1.2) includes the correction of the decrease in valuation as of December 31, 2003 (cf. 3.1).

a) Changes in 2003

The year’s acquisitions mainly concerned the following properties:• acquisition of a building located avenue Charles de Gaulle in Neuilly for €15,778,00;• continued development of the Volney-Capucines building for €8,284,000;• continued development of the Dauphiné Part-Dieu building for €12,214,000;• works funded by finance leases on the building located 77/81 boulevard Saint-Germain for €3,899,000;• improvements and renovation during the year on Group-owned buildings for €59,990,000; the harmonization of

accounting policies led to the capitalization in GECINA’s assets of €6,302,000 in works expenditures previously includedin the year’s expenses;

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• finally, additional goodwill related to the acquisition of the SIMCO Group for €31,213,000, following recognitionof deferred taxes.

Disposals included for €1,383,586,000 the net book value of the buildings sold in block and for €116,104,000 the netbook value of the buildings sold by unit.

b) Changes in 2002

The year’s acquisitions mainly concerned the following properties:• change in consolidation at the SIMCO Group for €4,112,692,000, of which €1,055,174,000 in goodwill;• improvements and renovation during the year on Group-owned buildings for €38,397,000;• works funded by finance leases on the building located 77/81 boulevard Saint-Germain for €19,340,000;• acquisition of the Volney-Capucines building for €48,890,000;• acquisition of land to be used in the Lyons-Villette project for €1,702,000;• acquisition of buildings at 23/29, rue de Châteaudun and 26/28, rue saint-Georges, through the acquisition of two

companies for €133,229,000.Disposals included the deconsolidation of SCI LES PEUPLIERS for €1,501,000.

c) Changes in 2001

The year’s acquisitions mainly concerned the following properties:• improvements and renovation during the year on Group-owned buildings for €29,632,000;• works funded by finance leases on the building located 77/81 boulevard Saint-Germain for €20,013,000 within

the framework of a sale in the future state of completion;• the line item transfers column in part represented the reclassification, reducing fixed assets, of the balance as of

December 31, 2001, of the purchase goodwill recorded for improvements previously recorded in loss contingencies(cf. 3.8) for €25,236,000.

4.1.2 • Long-term financial assets

12/31/2003 12/31/2002 12/31/2001

in € thousands TOTAL TOTAL TOTAL

Non-consolidated equity interests 1,113 5,591 4,792

Receivables from equity interests 7,619 1,797 5

Other long-term securities 3 7 7

Loans 1,428 3,553 3,078

Other 2,766 2,826 1,842

TOTAL GROSS VALUES 12,929 13,774 9,724

Depreciation –1,649 –1,706 –410

TOTAL NET VALUES 11,280 12,068 9,314

All BELLATRIX shares were sold in 2003.COFIMEG-PIERRE was liquidated on December 29, 2003.

Receivables related to equity interests included for €5,795,000 the partner’s advance to SCI BEAUGRENELLE, which wasconsolidated on a pro rata basis as of January 1, 2003.

4.2 • Trade notes and accounts receivable

in € thousands 12/31/2003 12/31/2002 12/31/2001

Rents receivable 37,099 45,607 28,992

Liabilities –18,309 –17,661 –13,294

TOTAL TRADE NOTES AND ACCOUNTS RECEIVABLE 18,790 27,946 15,698

The decline in rents receivable reflected the impact of the building divestment program in 2003.The client risks (losses on unrecoverable receivables and depreciating allowances, minus reversals of allowances andpayment of amortized receivables) accounted for 0.65% of rents and utilities re-billed to tenants.The contribution of the SIMCO Group as of December 31, 2002 represented €17,534,000 in gross value and €3,617,000of liabilities.

4.3 • Other receivables and adjustment accounts

in € thousands 12/31/2003 12/31/2002 12/31/2001

VAT 5,395 9,204 1,361

Corporate income tax 18,003 38,508

Other current assets receivable (1) 38,649 33,194 13,000

Pre-paid expenses 645 667 281

Deferred tax - assets 1,191 755 2

Expenses to amortize over several periods 12,435 17,079 6,631

Convertible bond redemption premiums (2) 16,977 21,732 4,825

TOTAL 93,295 121,139 26,100

Impairment allowances 693 667 646

NET TOTAL 92,602 120,472 25,454

Operating receivables have a maturity of less than one year, except for €1,422,000 representing a carryback receivablefrom 2003.

(1) Including SIMCO €17,510,000 as of December 31, 2002.(2) As of December 31, 2003, including premiums related to:

– the July 1997 SIMCO convertible bond issue for €566,000;– the November 2002 GECINA convertible bond issue in exchange for SIMCO bonds for €12,266,000;– the non-convertible bond issues in 2003 for €4,145,000.

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4.4 • Cash and near cash (including marketable securities)

in € thousands 12/31/2003 12/31/2002 12/31/2001

Money market funds and term deposits (1) 118,165 228,370 124,792

Treasury shares 11,805 12,125

Cash and near cash 17,279 25,206 11,737

CASH ASSETS 147,249 265,701 136,529

Bank overdrafts –7,089 –20,548 –16,000

NET CASH POSITION 140,160 245,153 120,529

As of December 31, 2002, SIMCO contributed €142,781,000 to net cash.

(1) The portfolio of marketable securities is comprised of money market mutual fund units (SICAV) and bonds. The SICAVholdings are recorded on the balance sheet at market value. Bonds, which represented €50,250,000 on the balancesheet, had a market value as of December 31, 2003, of €50,452,000.

(2) Treasury shares included for €12,490,000 (before an allowance of €685,000) the 121,500 GECINA shares held for thepurchase options granted to employees and officers.

4.5 • Consolidated shareholders’ equity

NUMBER EQUITY PAID-IN CONSOLIDATED TOTAL MINORITYOF SHARES CAPITAL CAPITAL RESERVES GROUP SHARE INTERESTS

BALANCE AS OF DECEMBER 31, 2000 19,237,876 293,280 791,038 1,084,316 680

2000 dividend (€3.34 per share) –62,084 –62,084

Other changes in capital (1) 174 –4,709 27,231 22,522 (2) –451

Value of treasury shares (7) –44,758 –44,758

Earnings for 2001 113,297 113,297 217

BALANCE AS OF DECEMBER 31, 2001 19,238,050 288,571 824,724 0 1,113,293 446

2001 dividend (€3.60 per share) –66,216 –66,216

Other changes in capital (3) 280 3 –37 –34 (4) –511

Value of treasury shares (7) 12,391 12,391

Capital increase (acquisition of SIMCO) (5) 7,808,046 117,121 628,981 746,102 75,593

Earnings for 2002 130,864 130,864 551

BALANCE AS OF DECEMBER 31, 2002 27,046,376 405,695 1,530,707 0 1,936,400 76,079

2002 dividend (€4.00 per share) –104,856 –104,856 –3,928

Other changes in capital (6) 1,301,599 19,524 99,547 0 119,071

Value of treasury shares (7) –9,801 –9,801

Revaluation as of 1/1/2003 (8) 1,223,599 1,223,599 41,199

Capital increase (merger of SIMCO) (9) 671,148 10,067 32,710 31,786 74,563 –76,861

Other changes (10) –1,365 –1,365

Earnings for 2003 535,518 535,518 1,659

BALANCE AS OF DECEMBER 31, 2003BEFORE NET INCOME APPROPRIATION 29,019,123 435,286 2,082,460 1,255,385 3,773,129 38,148

a) Operations in 2001

(1) Changes in 2001 corresponded to:– the issue of 172 new shares following the conversion of 208 SEFIMEG bonds and 44 GFC bonds;– the issue of two shares following the merger of INVESTIBAIL; – a 4,771,000 reduction in par after the share capital was converted into €, and deposited in an unavailable reserve;– the allocation of deferred tax assets under the former SII tax regime (cf. 2.1);– the reversal of €8,843,000 in unused reserves, net of tax, for the upgrade of property maintenance in buildings

that served as the base for the initial consolidation of the SEFIMEG and BATIBAIL groups for €8,843,000 (cf. 4.6).

(2) The decline in minority interests reflected:– the buyout of minority interests in SCI BEAUGRENELLE for €150,000;– the buyout of minority interests in LA FOURMI IMMOBILIERE for €2,000;– dividends paid by subsidiaries to minority interests in the amount of €299,000.

b) Operations in 2002

(3) Changes in 2002 corresponded to:– the issue of 208 new shares following the conversion of 338 SEFIMEG bonds;– the issue of 9 new shares following the conversion of 9 GFC bonds;– the issue of 63 new shares following the conversion of 71 bonds issued in exchange for SIMCO bonds tendered.

(4) The decline in minority interests reflected dividends paid by subsidiaries to minority interests in the amount of €71,000and to the sale of SCI LES PEUPLIERS for €440,000.

(5) Issue of shares in remuneration of SIMCO shares tendered in connection with the public exchange offer (cf. 1.1).Minority interests included the minority interests of the SIMCO sub-group in the amount of €30,295,000.

c) Operations in 2003

(6) Other changes in 2003 corresponded to the issue of 1,299,315 new shares following the conversion of1,299,315 GFC bonds, and to the issue of 2,284 new shares following the conversion of 2,539 SIMCO 2002 bonds.

(7) Treasury shares:12/31/2003 12/31/2002 12/31/2001

Number of shares held ** 803,041 ** 719,967 839,788

Equity interest in GECINA (%) 2.8 2.7 4.4

Accounted for a reduction in shareholders’ equity (in € thousands) 9,801 12,391 44,758

** Excluding 121,500 shares for purchase options granted to employees and officers, recorded as marketable securitiesin the amount of €12,490,000.

(8) The revaluation differential - Group share, recorded net of taxes at a standard rate of 16.5% as of January 1, 2003(cf. 11.1), totaled €1,223,599,000, after a correction of €73,638,000 to reflect the decreases in valuation as ofDecember 31, 2003, compared with values as of December 31, 2002, that served as a base for the revaluation(cf. 3.1.1).The gross revaluation differential on tangible fixed assets totaled €1,532,594,000 (cf. 4.1.1).

(9) The merger of SIMCO (cf. 1.1.3) resulted in the issue of 671,148 new GECINA shares.

(10) Recognition of deferred taxes - liabilities for €1,365,000.

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4.6 • Contingencies and loss reserves

LINE ITEM CHANGES12/31/2001 12/31/2002 PROVISIONS RELEASES TRANSFERS IN SCOPE 12/31/2003

Deferred tax liabilities (1) 226,441 692,727 24,154 –736,944 63,164 –469 42,632

Other allowancesfor contingences and losses (2) 23,490 50,955 7,100 –8,228 –16,635 33,193

TOTAL 249,931 743,682 31,254 –745,171 46,529 –469 75,824

Situation in 2002In application of regulation 2000-06 of the Comité de la Réglementation Comptable (French Accounting RegulatoryCommittee) on liabilities, applicable to the financial statements of fiscal years beginning as of January 1, 2002,contingencies and loss reserves are defined as liabilities with no defined due date or amount; since a liability represents anobligation to pay a third party, it is likely or certain that the transfer of resources will be required, and that this transfer willnot be offset by a consideration from the third party in question. This new definition had no material impact on thecontingencies and losses carried on the balance sheet at the beginning of 2002.

Commentary on 2003(1) Deferred tax liabilities were mainly comprised as of December 31, 2003, of latent taxes on goodwill allocated to real

estate assets of companies not governed by SIIC system (cf. 1.1). Item transfers were principally release of deferredtaxes of companies that had opted for SIIC system (cf. 2.5.4) in the amount of €735,766,000, but also includedmovements related to companies not governed by SIIC system.

(2) Contingencies and loss reserves primarily included:– the coverage of notifications of tax assessments, certain of which have been contested, for €22,405,000; these

assessments gave rise to the issue of bank guarantees in the amount of €19,271,000;– an allowance of €5,393,000 representing the valuation differential on the occasion of the adjustment in September

of two interest-rate swap contracts for 2004-2008, the rates and dates of which remained identical; this allowancewill later be reversed on the basis of the change in the renegotiated schedule compared with the initial schedule;

– allowances to complement payments to insurance companies for commitments in terms of additional retirementbenefits (cf. 3.10 and 4.10) in the amount of €2,705,000.

4.7 • Borrowings and financing debt

4.7.1 • Financing debt

in € thousands 12/31/2003 12/31/2002 12/31/2001

Convertible bonds (1) 358,431 491,085 247,872

Other bond issues (2) 850,000

Bank borrowings and other financing debt 1,451,810 3,767,601 1,309,682

TOTAL 2,660,241 4,258,686 1,557,554

SIMCO’s contribution as of December 31, 2002, totaled €918,221,000.Summary of the principal characteristics of the bond issues: as indicated in note 1, as of January 1, 2001, bond issues arerecorded as financing debt at their redemption value.

(1) Convertible bonds

Former GFC 1997-2004 convertible bondsOn October 3, 1997, GFC issued €133,572,231 in convertible bonds due January 1, 2004. A total of 1,460,294 bondswere issued at €91.47 each, paying interest of 3.25%. The bonds are redeemable at maturity at a price of €101.88.Conversion is on the basis of 1 GECINA share for 1 bond presented. As of December 31, 2003, 1,447,127 bonds hadbeen converted, and the number of bonds remaining as of this date was 13,167.

GECINA 2002-2006 convertible bondsFollowing the public exchange offer, GECINA issued 3,667,873 bonds on November 15, 2002, redeemable under thesame conditions as those originally issued by SIMCO (cf. below). Each bond, with a par value of €78.97, pays interest of3.25% and is redeemable at maturity at a price of €93.15. Conversion is on the basis of 0.9 GECINA share for 1 bond. Asof December 31, 2003, 2,610 bonds had been converted, and the number of bonds remaining as of this date was3,665,263.

SIMCO 1997-2006 convertible bondsOn July 9, 1997, SIMCO issued 3,861,000 convertible bonds due January 1, 2006, for a total of €359,652,150. Followingthe public exchange offer described above, 168,222 convertible bonds were not held by the Group for a total includingthe premium of €15,670,000. Each bond, with a par value of €78.97, pays interest of 3.25% and is redeemable atmaturity at a price of €93.15. Conversion is on the basis of 0.9 GECINA share for 1 bond. As of January 2, 2004, the two-for-one stock split will result in an adjustment of the conversion parities.

(2) Other bond issues

GECINA issued:– in February 2003, 500,000 bonds due February 19, 2010 for a total of €500 million, with a par value of €1,000, at an

issue price of €993.34, paying annual interest of 4.875%;– in April 2003, an additional 100,000 bonds for a total of €100 million, with a par value of €1,000, at an issue price of

€990.49, with the same characteristics in terms of due date and nominal rate;– in October 2003, 250,000 bonds due October 17, 2007, for a total of €250 million, with a par value of €1,000, at an

issue price of €998.35, paying annual interest of 3.625%.

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4.7.2 • Exposure to interest-rate risk

FINANCING DEBT AND CASH POSITION OUTSTANDING12/31/2003 < 1 YEAR 1 TO 5 YEARS > 5 YEARS

FIXED RATE DEBT 1,464,989 110,638 743,757 610,594

1 Convertible bonds 358,431 1,342 357,089

2 Bonds 850,000 250,000 600,000

3 Bank borrowings 195,468 55,089 129,842 10,536

4 Interests covered by allowances and other debts 61,090 54,207 6,826 57

FLOATING RATE DEBT 1,195,251 377,721 540,985 276,545

1 Commercial paper 300,000 300,000

2 Floating rate and revised rate loans 462,394 6,397 439,208 16,788

3 Lines of credit 95,980 53,357 42,622

4 Finance leases 329,789 10,878 59,155 259,757

5 Bank overdrafts 7,089 7,089

GROSS DEBT 2,660,240 488,359 1,284,742 887,139

CASH AND CASH EQUIVALENTS

Fixed rate Bonds 50,250 50,250

Floating rate Treasury shares 11,805 11,805

Floating rate Mutual funds and investments 67,915 67,915

Floating rate Cash and near cash 17,278 17,278

TOTAL CASH AND CASH EQUIVALENTS 147,248 135,443 11,805

NET DEBT

Fixed rate 1,414,739 60,388 743,757 610,594

Floating rate 1,098,253 292,528 529,180 276,545

NET DEBT 2,512,991 352,916 1,272,937 887,139

DERIVATIVES PORTFOLIO (excluding term)

Swaps of fixed rates for floating rates 1,605,378 374,338 1,123,622 107,417

Caps and corridors 780,144 3,213 276,931 500,000

Swaps of floating rates for fixed rates 847,000 250,000 597,000

TOTAL 3,232,522 377,551 1,650,553 1,204,417

HEDGING OF GROSS DEBT

Fixed rate gross debt 1,464,989 110,638 743,757 610,594

Floating rate swaps –847,000 –250,000 –597,000

Residual fixed rate debt 617,989 110,638 493,757 13,594

Floating rate gross debt 1,195,251 377,721 540,985 276,545

Fixed rate debt transformed into floating rate 847,000 250,000 597,000

Floating rate debt 2,042,251 377,721 790,985 873,545

Fixed rate swaps and corridors –2,042,251 –377,721 –790,985 –873,545

(Excess) or insufficiency of hedging –343,271

12/31/2003 12/31/2004 12/31/2008

LINES AVAILABLE

Including €300 million as back-up for commercial paper 937,847 711,000

PART AT TERM OF DERIVATIVES CONTRACTS 300,000

Hedging instruments include:– swap contracts in the amount of €2,452 million, of which €1,605 million in fixed/floating rate swaps and €847 million

in floating/fixed rate swaps;– options: €780 million in caps and €680 million in floors, with in both cases €680 million associated with

floating/floating swaps.

(1) The purpose of the financial instruments employed, which represent outstanding commitments of €3,232 million,of which €847 million in floating/fixed swaps linked solely to bond issues, is to protect the financial debt against risksof changes in interest rates. Their valuation as of December 31, 2003, would show a latent capital loss of €74.1 million,not accounting for capital gains in the amount of €6.8 million (out of a total of €8 million initially) on a swap that wasdiscounted and pro rated on the swap’s initial maturity (7 years).

(2) As of December 31, 2003, there was temporary over-hedging in the amount of €350 million. Because investmentprojects are being studied, no allowance was made for this over-hedging.

(3) The sensitivity of net interest-bearing financial debt after hedging for the floating component measures the impactof a 1% (more or less) change in the interest-rate curve on interest expense for floating rate debt. The impact for thefollowing year would be €660,000 in the event of a 1% decrease in interest rates and €2,400,000 in the event of a 1% rise in interest rate. In both cases, the financial expense would increase owing to the over-hedging and theceiling on a part of the debt.

4.7.3 • Security deposits

This item represents the deposits paid by rental guarantors in the amount of €59,928,000, including the contributionof the SIMCO Group in the amount of €33,585,000 as of December 31, 2002.

4.7.4 • Covenants

In the fourth quarter of 2003, GECINA fully reimbursed the syndicated loan taken out in November 2002. The main loansfrom which the Group benefits are accompanied by contractual provisions related to certain financial ratios determiningearly repayment clauses. GECINA’s situation as of December 31, 2003, with respect to the principal ratios was as follows.

STANDARD AS OF 12/31/2003

Net financing debt / revalued value of assets (block) 50% 35.3%

EBIDTA (excluding disposals) / Financial expense 2.25/2.50 2.54

Net financing debt / Shareholders’ equity (including deferred taxes) 1.3 0.66

Value of guarantees / Value of assets (block) 15%/20% 5.13%

Minimum value of assets held (block) 6,000 M€ 7,112 M€

4.8 • Trade notes and accounts payable

in € thousands 12/31/2003 12/31/2002 12/31/2001

Trade payables 14,750 20,688 18,737

Payables to suppliers of fixed assets 1,873 3,885 1,212

TOTAL NET DEBT 16,623 24,573 19,949

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4.9 • Other liabilities and adjustment accountsin € thousands 12/31/2003 12/31/2002 12/31/2001

Rental expenses to be adjusted 14,518 14,010 2,123Social liabilities 14,989 14,063 5,515Tax liabilities (1) 436,363 41,617 15,628Miscellaneous creditors 11,328 19,448 10,203Pre-paid income 9,694 3,169 2,438

TOTAL 486,892 90,507 35,907

SIMCO contributed €61,720,000 as of December 31, 2002.Operating debt has maturities of less than a year, except for the unadjusted balance of the exit tax in the amount of€427,013,000.(1) After the first payment of the exit tax on December 15, 2003, in the amount of €427,013,000, three other payments,

in the amount of €142,338,000, are scheduled for December 15, 2004, December 15, 2005, and December 15, 2006.

4.10 • Off-balance sheet commitmentsin € thousands 12/31/2003 12/31/2002 12/31/2001

Commitments receivedSWAPS 2,452,378 2,745,909 1,182,824CAPS 780,144 782,467 198,183Unused lines of credit 937,847 211,841 395,190Firm commitments to acquire property 63,256 1,282,206Other (LA FOURMI IMMOBILIERE tax dispute) 6,530 6,530

TOTAL COMMITMENTS RECEIVED 4,240,155 5,028,953 1,776,197

Commitments givenSWAPS 2,452,378 2,745,909 1,182,824FLOORS 680,000 680,000Security deposits 2,040Lender’s lien ** 18,813 26,539 28,478Debt guaranteed by collateral ** 14,382 72,712 86,229Mortgage commitments and first mortgages ** 2,050 8,944 13,678Exclusive or first refusal rights on sales of property 63,256 1,282,206

TOTAL COMMITMENTS GIVEN 3,230,879 4,816,311 1,313,249

As of December 31, 2002, SIMCO contributed €1,102,851,000 in commitments received and €916,384,000 incommitments given.

** List of collateralized properties: 7, rue Montenotte - 75017 Paris - 3, rue du faubourg Saint-Honoré - 75008 Paris - 60, avenue Paul Doumer and 7-9, rue Vital - 75016 Paris - 17, rue Galilée - 75016 Paris - 12-12 bis, rue de Torriceli -75017 Paris - 1-3-5-7-9, rue Théophile Gautier - 2, rue Casimir Pinel - 221, avenue Charles-de-Gaulle - Neuilly (92) - 2-8, rue du Maroc and 27-31, rue de Flandre - 79019 Paris - 28-28 bis, Dr Finlay and 5, rue Sextius Michel - 75015 Paris.

Accrued retirement liability (cf. 3.10)The amount of retirement indemnity paid is covered by insurance policies that provided satisfactory coverage of theGroup’s commitments as of December 31, 2003.Commitments regarding additional retirement benefits managed by external organizations, as a result of additionalallowances recorded on the balance sheet, provided an overall excess of coverage in the amount of €1,475,000 forcommitments of €11,968,000 discounted at 5%.

It is specifically stated that no significant commitment has been omitted from the commitments listed in this note.

V • Notes on the consolidated statement of income

5.1 • Rents

Rental income

2002 2002Excluding taxes (in € thousands) 2003 PRO FORMA PUBLISHED 2001

Rents from residential properties 233,348 274,708 171,210 167,892

Rents from commercial and office properties 259,831 247,425 122,451 99,414

CONSOLIDATED RENTAL INCOME 493,179 522,133 293,661 267,306

Consolidated rents for 2003 were down 5.55% from pro forma rents in 2002. Published rental income in 2002 includedincome from the SIMCO Group, consolidated as of November 15, 2002, in the amount of €32,639,000.On a constant basis and excluding properties for sale, rental income increased by 3.66% (4.32% for residential propertiesand 3.10% for commercial properties) compared with the previous year.

5.2 • Depreciation and amortization

Depreciation and amortization concerned built properties, installations and improvements, and goodwill amortization onbuilt properties.

12/31/2003 12/31/2002 12/31/2001

in € thousands ALLOWANCES RELEASES ALLOWANCES RELEASES ALLOWANCES RELEASES

Real estate holdings 84,676 39,759 12,963 54,949 10,295

Rents receivable 5,497 4,635 3,303 2,899 3,197 3,456

Other contingencies and losses 7,100 2,324 5,620 1,622 2,818 16,597

Others 8,103 11,109 7,385 5,031 12,202 1,312

TOTAL 105,378 18,068 56,067 22,515 73,166 31,660

Calculated on the basis of historical values, applying amortization periods in effect until December 31, 2002, depreciationand amortization in 2003 would have totaled €59,694,000.

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5.3 • Net proceeds from disposals

This result included no proceeds from sales of properties that had belonged to SIMCO.Because of the free revaluation of fixed assets as of January 1, 2003 (cf. 1.1.1), the year’s disposals generated nosignificant capital gains.

5.4 • Financial results

Depreciation allowances represented €6,990,000 in amortization of bond redemption premiums for the year.They also included, in the amount of €5,393,000, an allowance for the valuation differential on the occasion of theadjustment in September of two interest-rate swap contracts for 2004-2008 (cf. 4.6).Reversals of financial allowances included €11,088,000 corresponding to the cancellation of cumulated amortization as of December 31, 2002, of the portion of the redemption premium on the 1,299,315 GFC convertible bonds convertedas of December 31, 2003.Capitalized financial expense for buildings under development totaled €984,000.

5.5 • Non-recurring results

Non-recurring results totaled €1,847,000, representing the impact on minority interests of the merger of SIMCO intoGECINA.In 2001, other non-recurring gains and losses, in the amount of €6,599,000, corresponded to the accrued amortizationof the redemption premium as of December 31, 2000, on the GFC bond issue (cf. chapter 1).

5.6 • Corporate income tax2002 2002

Excluding taxes (in € thousands) 2003 PRO FORMA PUBLISHED 2001

Income tax payable –26,235 –56,904 –59,724 –45,274

Exit tax –311,498

Deferred income tax 712,790 –29,844 –14,811 –11,124

TAX EXPENSE 375,057 –86,748 –74,535 –56,398

VI • Other relevant information

6.1 • Events subsequent to December 31, 2003

None.

6.2 • Non-recurring events and litigation

In the consolidation process, certain companies were subject to tax inspections and notified of tax assessments that havebeen contested. Based on the best estimates of the Group and its advisors, there is no material risk that might affect theGroup’s earnings or financial position that has not been covered by an allowance.

6.3 • Group workforce

AVERAGE WORKFORCE 2003 2002 2001

Managers 215 121 98

Non-management staff 247 147 143

Building staff 420 371 351

TOTAL 882 639 592

In 2002, SIMCO accounted for 58 employees, owing to the fact that it was consolidated as of November 15, 2002.

6.4 • Compensation paid to directors and officers of the Company

Directors’ fees paid to the members of the Board of Directors of GECINA and SIMCO for the fiscal year 2003 totaled€424,000.Total compensation paid to directors and officers in 2003 was €1,224,000.

6.5 • Loans and guarantees granted to directors and officers of the Company

None.

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6.6 • Consolidated statement of cash flows

in € thousands 12/31/2003 12/31/2002 12/31/2001

Cash flow from operations

Net income from consolidated companies 537,178

Elimination of expenses and income with no material impact on cash flow or unrelated to operations

– Depreciation and amortization 83,707

– Change in deferred taxes –712,790

– Net capital gains on asset disposals –30,404

– Exit tax (1) 311,498

Gross cash flow of consolidated companies 189,189

Change in working capital requirements

– Trade receivables 27,197

– Trade payables excluding SIIC option debt –37,107

NET CASH FLOW FROM OPERATIONS 179,279 99,156 120,503

Cash flow from investment activities

Acquisitions of fixed assets –113,465

Sales of fixed assets 1,554,294

Impact of changes in scope of consolidation 11,605

Payment of the exit tax –142,338

Merger costs –2,520

NET CASH FLOW FROM INVESTMENT ACTIVITIES 1,307,575 –1,277,224 214,900

Cash flow from financing activities

Dividends paid to shareholders of the parent company –104,856

Dividends paid to minority shareholders of consolidated companies –3,928

Debt issues 1,427,523

Debt redemptions –2,900,767

Capital increase

Treasury shares accounted for as a reduction in shareholders’ equity and options exercised –9,801

NET CASH FLOW FROM FINANCING ACTIVITIES –1,591,829 1,303,518 –115,275

CHANGE IN CASH FLOW –104,975 125,449 220,128

Cash flow at start of period 245,979 120,530 –99,598

Cash flow at end of period 141,004 245,979 120,530

(1) A quarter of the exit tax is paid every December 15 from 2003 to 2006. These payments are considered as a reduction in cashfor investment operations (cf. 4.9).

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Corporate income statement

in € thousands 12/31/2003 12/31/2002 12/31/2001

Operating incomeRental income 288,403 186,071 170,963Net proceeds from property disposals 2,585 121,034 63,369Other services 355 491 452Miscellaneous subsidies 1 21 11Releases of allowances for building impairment 4,981 17,320Releases of allowances 4,232 1,800 14,236Rental charges and utilities billed to tenants 57,777 37,198 39,240Other expense transfers 2,616 18,541 1,175Other income 5,691 26 131Total 361,660 370,163 306,897

Operating expensesPurchases 19,096 12,110 12,109Other external expenses 66,357 59,280 52,027Taxes and duties 28,565 18,948 18,933Payroll expense 38,042 18,179 17,576Depreciation and amortization 46,431 27,440 23,907Allowance for property impairment 3,893 9,591 5,578Allowance for depreciation of current assets 4,083 2,077 2,141Provisions for contingencies and losses 558 521 1,060Other expenses 4,564 817 1,551Total 211,589 148,963 134,882

Results of operations 150,071 221,200 172,015

Interest and dividend incomeInterest and related income 27,235 389 314Net income on the sale of marketable securities 850 762 81Release of reserves and expense transfers 1,636 47,683 114Income from marketable securities and receivables 8,374 4,056 3,499Income from equity interests 31,698 11,394 18,720Total 69,793 64,284 22,728

Interest expenseInterest and related expense 161,580 124,026 80,161Allowances 61,020 5,277 22,149Total 222,600 129,303 102,310

Financial results –152,807 –65,019 –79,582

Earnings before tax and non-recurring items –2,736 156,181 92,433

Non-recurring itemsCapital gains on mergers, disposals, exchanges of securities 7,994 –385 1,207Loss on cancelled shares in acquired companies –2,519 –60,296Subsidies 280 214 197Non-recurring allowances, expense transfers –4,999 2,490Non-recurring gains and losses –792Non-recurring result 4,963 –5,170 –56,402

Net result before tax 2,227 151,011 36,031

Corporate income tax 19,042 –40,835 –30,174Net income 21,269 110,176 5,857

Corporate financial statements

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Corporate balance sheet

12/31/2003 12/31/2002 12/31/2001

GROSS DEPRECIATION NET NET NETin € thousands AND AMORTIZATION

FIXED ASSETSIntangible fixed assetsConcessions, licenses and similar rights 662 434 228 253 215Tangible fixed assetsLand 1,224,146 3,820 1,220,326 631,401 414,002Buildings 2,602,324 38,509 2,563,815 1,296,599 985,565Buildings on third-party-owned land 95,774 2,833 92,941 20,563 29,150Other 2,159 423 1,736 1,420 1,714Construction in progress 3,106 3,106 10,230 3,268Prepaids 97 97Long-term financial assetsReceivables from controlled entities 2,543,276 40 2,543,236 2,701,736 1,257,812Other long-term securities 81,574 81,574 102,563 75,371Loans 1,361 1,361 3,090 3,063Other long-term financial assets 2,060 153 1,907 1,045 1,183

TOTAL I 6,556,539 46,212 6,510,327 4,768,900 2,771,343

CURRENT ASSETS

Prepaids 86 86 31 25

RECEIVABLESRent receivables 25,753 14,291 11,462 11,070 11,169Other 594,899 315 594,584 157,316 36,783Marketable securities 114,138 181 113,957 441,107 156,277Cash and near cash 1,680 1,680 805 8,030

ADJUSTMENT ACCOUNTPre-paid expenses 539 539 127 195

TOTAL II 737,095 14,787 722,308 610,456 212,479

EXPENSES TO AMORTIZE OVER SEVERAL PERIODS 11,710 11,710 61,445 6,958

BOND REDEMPTION PREMIUMS 16,977 16,977 20,886 4,825

TOTAL III 28,687 28,687 82,331 11,783

Assets

GRAND TOTAL (I + II + III) 7,322,321 60,999 7,261,322 5,461,687 2,995,605

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AFTERNET INCOME

BEFORE NET INCOME APPROPRIATION APPROPRIATION

in € thousands 12/31/2003 12/31/2002 12/31/2001 12/31/2003

SHAREHOLDERS’ EQUITYShare capital 435,287 405,696 288,571 435,287Additional paid-in capital 1,773,328 1,207,761 368,830 1,734,567Revaluation differential 1,150,751 1,150,751Reserves:

Legal reserve 42,233 39,273 28,036 42,233Legal reserve from long-term capital gains 1,296 1,296 1,296 1,296Regulated reserves 221,874 221,610 219,806 224,221Retained earnings 84,510 26,170 0Earnings for the year 21,269 110,176 5,857 0Investment subsidies 2,449 1,988 1,916 2,449Regulated allowances 70

TOTAL I 3,732,997 1,987,800 940,552 3,590,804

CONTINGENCIES AND LOSS RESERVE

Contingency reserve 47,171 23,469 1,793 47,171Accrued liabilities 8,328 116,418 111,485 8,328

TOTAL II 55,499 139,887 113,278 55,499

DEBTConvertible bonds 368,321 488,705 287,024 368,321Bond debentures 877,210 877,210Borrowings and financing debt 1,815,697 2,769,333 1,599,240 1,815,697Security deposits 40,293 30,910 24,755 40,293Dividends payable 142,193Advances and down payments received 10,319 8,281 7,066 10,319Trade notes 12,175 15,207 12,824 12,175Tax and social liabilities 13,764 7,406 5,861 13,764Debt on fixed assets 983 705 524 983Tax liabilities (corporate income tax – exit tax) 322,114 10,794 3,451 322,114Other liabilities 4,767 2,281 1,030 4,767

ADJUSTMENT ACCOUNTSPre-paid income 7,183 378 7,183

TOTAL III 3,472,826 3,334,000 1,941,775 3,615,019

Liabilities

GRAND TOTAL (I + II + III) 7,261,322 5,461,687 2,995,605 7,261,322

I • Operating highlights

1.1 • Significant events

Fiscal year 2003

1. Election for the tax system of listed propertycompanies and revaluation

During its meeting held on September 9, 2003, the Board ofDirectors decided to make an election for the tax system ofthe Sociétés d’Investissements Immobiliers Cotées (ListedProperty Companies - SIIC) and accordingly to carry out afree revaluation as of January 1, 2003 with respect to thevalue of its tangible and financial fixed assets.Such revaluation was made on the basis of the net sellers’prices of block sales as of December 31, 2002 as determinedby expert appraisals.In accordance with general principles and with theprovisions of Opinion 2003-C of the Comité d’Urgence duConseil National de la Comptabilité (Emergency Council ofthe National Accounting Board), the revaluationdifferential is posted to shareholders’ equity (up to itsamount net of the amount paid in full satisfaction of alltaxes). The effect of such elections is shown underparagraphs 4.1 and 4.7.Such an election entailed the obligation to pay an exit taxin the amount of €429,485,000 of which €365,757,000 areapplied against the revaluation differential and €63,728,000are expenses in this fiscal year’s income statement.As of December 31, 2003, the revaluation differentialamounted to €1,150,751,000.

2. Depreciation

Following the free revaluation as of January 1, 2003,depreciation was calculated over terms ranging between50 and 80 years and applied to the values resulting fromthe property appraisals made as of December 31, 2002 onthe basis of the “block value, net of duties” of the landand buildings defined in such appraisals.

CRC Regulation No. 2002-10 of December 12, 2002provided, as regards replacement expenses (called“category 1” expenses) as well as major maintenance and

major revision expenses (called “category 2” expenses)concerning financial years 2003 and 2004, for theobligation either to set aside provisions for major repairsor to apply the “component per component” approach.CRC Regulation No 2003-07 of December 17, 2003amended the above provisions by excluding, forcompanies that are not applying the “component percomponent” approach the initial recognition of provisionfor major repairs as replacement expenses. On thecontrary, for these same companies, the obligation to setaside provisions for major maintenance expenses andmajor revisions expenses remains in force.GECINA did not make any election for the early applicationof the “component per component” approach as regardsfiscal year 2003. With a view to the multi-annual program,no such provision is to be set aside by the Company.

3. Merger of SIMCO into GECINA

The Extraordinary General Meeting of shareholders ofSIMCO and the Combined General Meeting of shareholdersof GECINA took place on December 17, 2003 andapproved the merger of SIMCO into GECINA withretroactive effect as of January 1, 2003 after revaluation.Accordingly, GECINA issued 671,148 new shares inexchange for 2.77% of the SIMCO capital not yet held by it as of that date.

4. Completion of a major disposal program

During fiscal year 2003 the Company sold assets with atotal value of €999 million, consisting primarily in low-yield residential assets.These sales were, in an amount of €774 million, madepursuant to agreements posted in the off-balance sheetcommitments as of December 31, 2002 that has beenexecuted in October 2002 with Westbrook Partners, a USinvestment fund.

5. Bond conversions

Bond conversions made during the fiscal year andconcerning primarily the GFC bond issue made in 1997and maturing on January 1, 2004 triggered the issuanceof 1,301,599 new shares. Following such conversions, netshareholders’ equity increased by €119,072,000 (see 4.7),and net income for the financial year, by €11,092,000.

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Notes to the 2003 corporate financial statements

Fiscal year 2002

1. SIMCO acquisition

Following the public exchange offering on SIMCO’sshares, GECINA acquired 95.9% of SIMCO shares capitaland 97.2% of the voting rights, as well as 95.6% of theconvertible bonds and 97.9% of SIMCO outstandingCertificates of Guaranteed Value (CGV). The settlementdate was November 15, 2002.The total price of the transaction was €2,269,004,000, of which €746,102,000 (including the premium) wasequity financed (through the issue of 7,808,046 newshares) and €1,522,902,000 was bank financed.In connection with the offer, the Group issued bondsconvertible into GECINA shares in exchange forconvertible bonds issued by SIMCO. At the close of theoffer period, 95.9% of the SIMCO convertible bonds wereexchanged, leading to the issuance of new GECINA bonds(see note 4.9).

2. Acquisition merger of FOURMI IMMOBILIERE and FONCIERE VENDOME

In shareholders’ meetings held on June 5, 2002, themerger agreements by and between FOURMIIMMOBILIERE and FONCIERE VENDOME were ratified.Since GECINA owned all of the share capital of thesecompanies, no additional equity was issued in connectionwith the mergers, which became official on July 1, 2002.The transaction generated a €254 million gain oncancelled shares, which was credited to GECINAshareholders’ equity.

Fiscal year 2001

Acquisition mergers of INVESTIBAIL, FONCIERE DE LACITE, FC TRANSACTIONS, SAS 262 BOULEVARD SAINT-GERMAIN, SAS 266 BOULEVARD SAINT-GERMAIN, SAS 86 AVENUE DE VILLIERS, SAS 90 AVENUE DE VILLIERS,SAS 38-42 AVENUE DE WAGRAM, SAS 23 AVENUE DENIEL, SAS DU 4 RUE GALLIERA, SAS 184 RUE DE RIVOLIand SAS DU 48 BOULEVARD MALESHERBES.

In shareholders’ meetings on June 6, 2001, the mergeragreement by and between the companies was ratified.The mergers, retroactive to January 1, 2001, led to a€30.49 equity increase. GECINA already owned most ofthe share capital of these companies. The shares acquiredin the mergers were recorded at their net book value,generating a non-recurring loss on cancelled shares inacquired companies (mali de fusion) of €60 million.

1.2 • Comparability of financial statements

In light of the aforementioned acquisition mergers, as well as the free revaluation of fixed assets, the corporatefinancial statements for the fiscal years 2003, 2002 and2001 are not directly comparable. The notes that followprovide an analysis of the impact of significanttransactions during the period on assets, liabilities and line items in the statement of income.

II • Accounting methods and principles

GECINA’s corporate financial statements are established inaccordance with generally accepted accountingregulations in France and the principle of a going concern.

Because arbitrage is central to the property managementbusiness, and in the interest of improving the presentationof its various lines of business, capital gains and losses onproperty sales and allowances to and releases of reservesfor depreciation of core real estate assets are recorded asseparate operating income and expense line items.

III • Valuation methods

For accounting purposes, assets and liabilities are valuedat their historical cost, with the exception of thecontributions related to the free revaluation as of January 1, 2003 with respect to the value of the Company’stangible and financial fixed assets (see note 1.1.1).

Section 3.1 below describes the valuation methods usedfor real estate assets.

3.1 • Fixed assets

Gross value of fixed assets

Tangible and intangible fixed assets, acquired sinceJanuary 1, 2003, are carried at their acquisition price, withthe exception of built properties, which are recorded attheir construction cost.

Land and built properties subject to the free revaluation asof January 1, 2003, are carried at their value, re-valued onthe basis of the net sellers’ prices of block sales as ofDecember 31, 2002 as determined by expert appraisals(see 1.1.1).In accordance with the provisions of the opinion of theComité d’Urgence du Conseil National de la Comptabilité(Emergency Council of the National Accounting Board),June 11, 2003, relating to the effect to the accounts,

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resulting from the election of the new tax system as aSIIC, the negative differential of the back value ofbuildings (excluding duties) as of December 31, 2003,with regard to December 31, 2002, was adjusted by€26,074,000 through an entry to the revaluationdifference, recorded at the opening of the fiscal year.

Amortization of fixed assets

Tangible and intangible fixed assets are amortized usingthe straight-line method, based on the expected useful lifeof the assets:

Intangible fixed assets:

Computer software 1 to 5 years

Built properties as of January 1, 2003(revalued values):

Residential properties 80 years

Commercial properties 50 years

Buildings on third-party-owned land period of use

Fixtures and installations,improvements and fittings 5 to 20 years

Other fixed assets:

Misc. fixtures and installations,improvements and fittings 5 to 20 years

Transportation equipment 4 to 5 years

Office and computer equipment 3 to 5 years

Office furniture 10 years

Property depreciation

As stipulated by the opinion of the Comité d’Urgence duConseil National de la Comptabilité (Emergency Council ofthe National Accounting Board), during a period of two years,the negative differential of the block valuation of buildings,assessed at December 31, 2003, with regard to December 31,2002, was adjusted by charging the revaluation difference,recorded at the opening of the fiscal year.

Furthermore, an additional allowance was calculated forthese buildings, in case the revaluation difference provesinsufficient (notably, the case for SIMCO property holdings,as the revaluation difference does not exist, following themerger), according to the following methods:

Long-term real estate assets

Depreciation is recognized when, on the basis of a line-by-line analysis by independent appraisers, the appraisedvalue of a property is lower than its book value, less a15% deductible.The above primarily relates to non-amortizable items, withadjustments made annually on the basis of subsequentappraisals.

Real estate assets up for sale or held for sale in the near term

Properties up for sale or held for sale in the near term arevalued at their estimated fair value. Depreciation isrecognized when this amount is below the book value.

3.2 • Long-term financial assets

Equity investment securities are recorded at theiracquisition or subscription cost. They primarily concernGECINA equity interests in companies that own rentalproperties (equity interests and non-capitalized advances).

Impairment is recognized for these securities and relatedreceivables when they show depreciation with respect totheir use value. Degree of impairment is calculated bytaking several factors into account: adjusted value of netassets, profitability, the strategic value of the investmentfor the Group, and the prevailing economic environment.

Long-term financial assets also include treasury sharesowned by the Company for uses other than the employeestock option grant program.

3.3 • Operating receivables

Receivables are recorded at their nominal value. For rentsreceivable, liabilities are calculated on the basis of the ageof the debt and the situation of the tenants. Adjustmentsmay be made to take individual circumstances into account.

3.4 • Marketable securities

Marketable securities are carried in the balance sheet attheir acquisition cost. An allowance for impairment isestablished whenever estimated fair value is lower thanbook value.

This line item also includes treasury shares held by thecompany for the employee stock option plan. Whereappropriate, depreciation is calculated on the basis of theoption exercise price or the average stock price over thelast month of the fiscal year, whichever is lower.

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3.5 • Adjustment accounts (assets)

This item primarily includes:• Costs incurred to renovate properties before they are

put on the market for sale. These costs are recoupedwhen the properties are sold.

• Fixed asset acquisition costs, which are amortized overfive years.

• Bank fees charged to open lines of credit, spread overthe maturity of the borrowing.

• Premiums on interest-rate hedging instruments, whichare spread over the period of the related hedge.

• Issue or redemption premiums for bond debentures,which are amortized over the duration of theborrowing, using the straight-line method.

3.6 • Bond debentures

Bond debentures issued by the Company are carried attheir redemption value. The redemption premiums arerecorded, correspondingly, as balance sheet assets, andare amortized using the straight-line method over theduration of the borrowings.

3.7 • Allowance for major renovation

There are no allowances for major renovation, concerning“2nd category” spending for major repairs and upgrades,mentioned in the multi-year plan. Therefore, there is noneed to establish them.

The costs of repairs made in the course of normal buildingmaintenance are fully expensed in the year they areincurred. Renovation work is carried as a fixed asset.

Concerning the accounts for fiscal year 2001, allowancesfor property maintenance upgrades were establishedfollowing the acquisition of SEFIMEG and IMMOBILEREBATIBAIL in order to harmonize the maintenancestandards of property holdings. The unused portion,which amounted to €3,019,000 at December 31, 2001,was released in 2001.

3.8 • Interest-rate hedging instruments

The Company uses interest-rate swaps, caps and floors tocover its interest-rate exposure on outstanding lines ofcredit and loans. The resulting gains and losses arerecorded as income on a prorated basis.

3.9 • Accrued retirement liability

Retirement indemnity obligationsAccrued retirement indemnity obligations agreed to inthe collective and company-wide agreements are coveredby insurance contracts. Allowances are established for the portion not covered by the insurance fund.

Supplemental retirement obligations with respect tocertain employeesThese are estimated using the actuarial method andmortality tables. They are managed and administered byexternal organizations, and are subject to payment or tothe establishment of allowances for future liabilities as thecase may be.

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IV • Notes to the balance sheet

4.1 • Fixed assetsASSETS GROSS GROSS

VALUES AT VALUES ATin € thousands 01/01/2003 REVALUATION (2) MERGERS ACQUISITIONS DECREASES 12/31/2003

Intangible fixed assets 591 –25 0 96 0 662Concessions, licenses and similar 591 –25 96 662OtherTangible fixed assets 2,203,697 998,884 1,668,482 41,933 985,390 3,927,606Land 666,085 334,543 565,613 342,095 1,224,146Buildings 1,495,327 644,938 1,067,402 37,938 643,281 2,602,324Buildings on third-party-owned land 27,650 33,044 34,800 280 95,774Other tangible fixed assets 4,405 –3,411 570 609 14 2,159Fixed assets in progress 10,230 –10,230 3,106 3,106Prepaids 97 97Long-term financial assets 2,813,001 540,055 –688,718 49,987 86,054 2,628,271Equity investment securities 2,704,827 541,378 –659,782 33,335 76,482 2,543,276Other fixed assets (1) 108,174 –1,323 –28,936 16,652 9,572 84,995

TOTAL 5,017,289 1,538,914 979,764 92,016 1,071,444 6,556,539

(1) Including treasury stock (see note 4-4).(2) Including the negative differential of the valuation of buildings, posted at December 31, 2003 (see 3.1).

Transactions involving equity investment securities, other than those that relate to mergers and revaluation, concern the saleof shares in BELLATRIX, the winding up of SCPI COFIMEG-PIERRE, and the sale of a 50% share interest in SCI BEAUGRENELLEwithin the framework of restructuring the shopping mall, in partnership with APSYS, the buyer of these shares.

AMORTIZATION GROSS GROSSVALUES AT VALUES AT

in € thousands 01/01/2003 REVALUATION MERGERS ALLOWANCES RELEASES 12/31/2003

Intangible fixed assets 338 –25 0 121 0 434Concessions, licenses and similar 338 –25 121 434Tangible fixed assets 203,373 –203,373 0 44,948 3,256 41,692Buildings 193,301 –193,301 41,692 3,256 38,436Buildings on third-party-owned land 7,087 –7,087 2,833 2,833Other tangible fixed assets 2,985 –2,985 423 423

TOTAL 203,711 –203,398 0 45,069 3,256 42,126

DEPRECIATION GROSS GROSSVALUES AT VALUES AT

in € thousands 01/01/2003 REVALUATION MERGERS ALLOWANCES RELEASES 12/31/2003

Intangible fixed assets 0 0 0 0 0 0Concessions, licences and similar 0 0Tangible fixed assets 40,111 –40,111 0 3,893 0 3,893Land 34,684 –34,684 3,820 3,820Buildings 5,427 –5,427 73 73Long-term financial assets 4,567 –4,414 40 0 0 193Equity investment securities 3,091 –3,091 40 40Other long-term financial assets 1,476 –1,323 153

TOTAL 44,678 –44,525 40 3,893 0 4,086

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4.2 • Operating receivables

Rents receivable amounted to €25,753,000, for which an allowance of €14,291,000 was established.

Other receivables totalled €594,899,000. This amount primarily reflects €5,015,000 in unpaid proceeds from sales;€550,684,000 in interest-earning cash advances made available to Group companies under treasury managementagreements; and miscellaneous deferred income of €18,138,000.

Operating receivables all fall due in less than 1 year, with the exception of €1,422,000, the amount of a tax loss carryback.

4.3 • Marketable securitiesGROSS VALUES in € thousands 12/31/2003 12/31/2002 12/31/2001

Marketable securities (money market mutual fund units) 49,193 44,843 124,604

Convertible bonds 322,473 30,647

Bond debentures 50,250 50,250

Accrued interest on bonds 2,890 11,917 1,025

Treasury shares, held for employees 11,805 11,805

TOTAL 114,138 441,288 156,276

As part of the contributions related to the merger between GECINA and ARTEMIS IMMOBILIER, the GECINA Group owned,from December 31, 1999 to January 1, 2002, 320,078 bonds convertible into shares issued by the former SEFIMEG.

As of December 31, 2002, GECINA owns 3,667,873 convertible bonds originally issued by SIMCO and tendered in thepublic exchange offer.The Board of Directors has decided to cancel these securities, held as treasury bonds, which impacts the assets statement onthe 2003 balance sheet in the form of reductions in the accounts, convertible bond borrowings and redemption premiums.

4.4 • Change in treasury sharesNUMBER IN €

OF SHARES THOUSANDS

Balance at January 1, 2003 719,967 73,093

Acquisitions 147,460 16,218

Revaluation –1,319

SIMCO employee stock option plan exchange –64,386 –6,418

BALANCE AT DECEMBER 31, 2003 (1) 803,041 81,574

(1) Carried as “other long-term financial assets.”

4.5 • Expenses to amortize

Expenses to amortize over several periods primarily include:• €429,000 recorded at December 31, 2003 to acquire equity securities (SCI VILLIERS, SCI BERRI, SCI BEAUGRENELLE and

SIMCO) and properties. These expenses are amortized over five years.• A €337,000 expense to renovate properties sold by individual unit, capitalized and expensed as each unit is sold. The

total amount capitalized at year-end 2002 was €2,401,000.• An amount of €7,906,000 in premiums on interest-rate hedging instruments, which are spread over the period of the

related hedge.• €3,037,000 in bank fees, relating to the opening of lines of credit, spread over the term of the loan starting from the

first drawdown date, and bank commissions and fees on bond debenture issues. Note that €2,091,000 relate tooperations during the year.

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4.6 • Bond redemption premiums

This line item primarily includes, at December 31, 2003, the premiums relating to:• convertible bonds, issued July 1997 by SIMCO, for €563,000;• convertible bonds, issued by GECINA in November 2002 in exchange for SIMCO bonds, received during the public

offering, for €12,269,000;• bond debentures, issued in 2003, for €4,145,000.

4.7 • Change in share capital and net position

At the December 31, 2003 reporting date, share capital included 29,019,123 shares of stock, each with a par value of€15. A three-year analysis of change in share capital follows:

ADDITIONALSHARE PAID-IN REVALUATION RETAINED NET

in € thousands CAPITAL CAPITAL RESERVES DIFFERENTIAL EARNINGS POSITION

12/31/1999 293,256 545,453 243,641 65,583 1,147,933

Bond conversions 24 118 142

Net income appropriation –176,760 –65,583 –242,343

12/31/2000 293,280 368,811 243,641 0 0 905,732

Bond conversions 2 19 21

Mergers 421 –686 –265

Conversion of equity capital into € –4,711 4,711 0

Net income appropriation 365 26,856 27,221

12/31/2001 288,571 368,830 249,138 0 26,170 932,709

Bond conversions 4 32 36

Mergers 256,352 796 257,148

Public offer for SIMCO 117,121 617,744 11,237 746,102

Net income appropriation –35,197 1,008 –26,170 –60 359

12/31/2002 405,696 1,207,761 262,179 0 0 1,875,636

Bond conversions 19,524 97,595 1,953 119,072

Mergers 10,067 42,513 1,007 79,454 133,041

Revaluation at 01/01/2003 1,602,284 1,602,284

Revaluation increases/decreases 425,459 –451,533 –26,074

Net income appropriation 264 5,056 5,320

12/31/2003 435,287 1,773,328 265,403 1,150,751 84,510 3,709,279

Bond conversions resulted in the issue of 1,301,599 new shares.The SIMCO acquisition merger resulted in the issue of 671,148 new shares. It also lead to the posting of additional paid-incapital in the total amount of €24,502,000 corresponding to adjustment of the contribution value, posting of expenses,duties and commissions relating to the merger, and an allowance for the legal reserve.The par value of GECINA shares was divided by two on January 2, 2004.

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4.8 • Contingencies and loss reserve

GROSS GROSS GROSSALLOWANCES VALUES AT VALUES AT VALUES ATin € thousands 12/31/2001 12/31/2002 MERGERS ALLOWANCES RELEASES 12/31/2003

Allowances for taxes on capital contributions and mergers (1) 108,290 107,329 107,329 0

Allowances for tax audits (2) 245 27,763 19,713 6,148 41,328

Allowances for interest expense (3) 5,391 5,391

Allowances for risks related to subsidiaries 5,105 5,105

Other allowances for contingencies and losses 4,742 4,795 558 1,678 3,675

TOTAL 113,277 139,887 5,105 25,662 115,155 55,499

Note concerning 2002: Regulation 2000-06 of the Comité de Règlement Comptable (French Accounting RegulationsCommittee), which concerns accounting for liabilities, went into effect on January 1, 2002. This regulation requires thatreserves for contingencies and losses be carried as liabilities with no defined due date or amount. The rationale behind thenew regulation is that, insofar as a liability represents an obligation to pay some third party, it is likely or certain that therelease of resources will be required, and that this release will not be offset by a consideration from the third party inquestion. The new definition had no material impact on the contingencies and losses carried on the balance sheet at thebeginning of 2002.

Notes concerning 2003

(1) Allowances for deferred taxes on capital gains related to business contributions and mergers and for which deferralshave been granted in the case of transactions eligible for favourable tax treatment.These allowances, which are released as earnings as the related merger capital gains become taxable earnings (overthe average amortization schedule for built properties; for the total value in the case of property disposals), have beenreleased in total for the fiscal year, because of opting for the SIIC tax system and the payment of an exit tax of 16.5%on these gains, benefiting from deferrals.

(2) See note 6.2.

(3) This allowance represents the valuation differential, occurring as a result of modifications in September to two rate-swap contracts for the period 2004-2008, the rates and durations for which have remained identical. This allowancewill later be the subject of releases, depending on variations in the renegotiated fulfilment schedule, compared withthe initial schedule.

4.9 • Borrowings and financing debt

BY DUE DATE LESS THAN MORE THAN TOTAL TOTAL TOTALin € thousands 1 YEAR 1-5 YEARS 5 YEARS 12/31/2003 12/31/2002 12/31/2001

Convertible bond borrowings (1) 11,233 357,088 368,321 488,705 287,024

Other bond borrowings 27,210 250,000 600,000 877,210

Borrowings and financing debt (excluding Group) 426,697 611,845 25,934 1,064,476 2,733,348 1,196,729

Group financing debt 751,221 751,221 35,985 402,511

TOTAL 1,216,361 1,218,933 625,934 3,061,228 3,258,038 1,886,264

The increase at 12/31/2002 in borrowings and financing debt is primarily attributable to the SIMCO acquisition (€1.523 billion).The line items for 2003 essentially concern the issuing of non-convertible bond debentures for €850 million, inreplacement of bank lines of credit.

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(1) Summary of the principal characteristics of the convertible bond issues:

The convertible bonds issued by the former GFC in 1997. On October 3, 1997, GFC issued €133,572,231 inconvertible bonds due January 1, 2004. A total of 1,460,294 bonds were issued at €91.47 each, offering an interest rateof 3.25%. Bonds are redeemable at maturity at a price of €101.89. Each bond is convertible into one GECINA share uponpresentation. At the December 31, 2003 reporting date, 1,447,127 bonds had been converted; consequently, the numberof bonds remaining outstanding at this date is 13,167.

Convertible bonds issued by GECINA in 2002. On November 15, 2002, GECINA issued €289,651,930.81 in convertiblebonds due January 1, 2006. The 3,667,873 bonds were issued in exchange for SIMCO convertible bonds tendered inconnection with the public exchange offer at a rate of one GECINA bond for one SIMCO bond presented.

The bonds, which were issued at a price of €78.97 each and offer an interest rate of 3.25%, are redeemable at maturityat a price of €93.15 (the same conditions as those issued by SIMCO). The Group is offering 0.9 GECINA shares for eachbond presented for conversion. At the December 31, 2003 reporting date, 2,610 bonds had been converted, and3,665,263 bonds were outstanding.

Convertible bonds issued by SIMCO in 1997. On July 9, 1997, SIMCO issued €359,652,150 in convertible bonds dueJanuary 1, 2006. Of the 3,861,000 bonds issued, and following the exchange operation described above, 168,222 convertiblebonds were not presented to the Group for exchange, representing an amount, premium included, of €15,670,000. Thebonds, which were issued at a price of €78.97 each and offer an interest rate of 3.25%, are redeemable at maturity at aprice of €93.15. The Group is offering 0.9 GECINA shares for each bond presented for conversion.

As of January 2, 2004, the two-for-one stock split will lead to an adjustment in the conversion parity.

Other bond borrowings

GECINA issued:• in February 2003, €500 million in non-convertible bond debentures due February 19, 2010. The 500,000 bonds have

a par value of €1,000, were issued at a price of €993.34, and offer an annual interest rate of 4.875%.• in April 2003, €100 million in additional debentures. The 100,000 bonds with a par value of €1,000 were issued at a

price of €990.49, and offer the same characteristics in terms of due date and nominal interest rate.• in October 2003, €250 million in non-convertible bond debentures due October 17, 2007. The 250,000 bonds with a

par value of €1,000 were issued at a price of €998.35, and offer an annual interest rate of 3.625%.

CovenantsDuring the fourth quarter of 2003, GECINA reimbursed the total amount of its syndicated loan, negotiated in November2002.The main lines of credit, from which the Company benefits, are subject to contractual conditions, which relate to certainof its financial ratios (calculated on consolidated results), and determine the effect of early repayment clauses. The positionof GECINA at December 31, 2003, with reference to these principal ratios, was the following:

GROSS VALUES RESULT AT REFERENCE NORM 12/31/2003

Net financial debt / Revalued block value of property holdings 50% 35.3%

EBITDA (excluding divestments) / Financial expense 2.25/2.50 2.54

Net financial debt / Shareholders' equity (including differed taxes) 1.3 0.66

Value of security deposits / Block value of property holdings 15%/20% 5.13%

Minimum block value of property held €6,000 M €7,112 M

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4.10 • Accrued liabilities, accrued income and prepaid income and expenses

These items are recorded under the following balance sheet line items:

in € thousands 12/31/2003 12/31/2002 12/31/2001

Bonds 37,100 13,328 8,504

Financing debt 7,615 18,574 10,876

Trade payables 11,476 13,621 11,299

Tax and social liabilities 8,504 4,163 2,914

Other 1,065 1,031 294

Total accrued liabilities 65,760 50,717 33,887

Pre-paid income 7,183 378 0

TOTAL LIABILITIES 72,943 51,095 33,887

Long-term financial assets 5,132 105 105

Trade note receivables 5,761 6,055 6,032

Other receivables 19,340 3,889 1,289

Marketable securities 2,890 11,916 1,025

Cash and near cash 1,718 0 3,670

Total accrued income 34,841 21,965 12,121

Prepaid expenses 539 127 195

TOTAL ASSETS 35,380 22,092 12,316

4.11 • Exposure to interest-rate risk

DEBT DEBT DEBT DEBTBEFORE IMPACT OF HEDGING AFTER AFTER AFTER

HEDGING AT INSTRUMENTS HEDGING AT HEDGING AT HEDGING ATin € thousands 12/31/2003 AT 12/31/2003 12/31/2003 12/31/2002 12/31/2001

Floating rate financing debt 858,373 –2,056,114 847,000 –350,741 472,546 63,577

Fixed rate financing debt 1,402,737 2,056,114 –847,000 2,611,851 2,707,503 1,383,994

NET INTEREST BEARING FINANCING DEBT (*) 2,261,110 0 0 2,261,110 3,180,049 1,447,571

(*) Excluding accrued interest, bank overdraft facilities and Group debt.

Hedging instruments include:• €2,903 million in interest-rate swaps, including €1,376 million in floating/fixed rate swaps and €680 million

in floating/floating swaps (averaged);• €680 million in caps and €680 million in floors (in both cases associated with floating/floating swaps).

A non-recurring additional hedge of €350 million appears at December 31, 2003.Due to investment projects under study, no allowance has been recorded for this additional hedge.

€2,903 million in financial instruments put in place to hedge financing debt against exposure to interest rates, include€847 million in floating/fixed rate swaps, relating only to bond issues. At the December 31, 2003, reporting date, they

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generated an unrealized loss of €59 million, without taking into account a gain of €6.8 million (on a total amount of €8 million originally) resulting from a closed out swap and recorded pro-rata over initial duration (7 years) of the swap.

The sensitivity of net interest-bearing financing debt after hedging for the floating component measures the impact of a sudden 1% change in the interest-rate curve on interest expense for floating-rate debt. The impact on the Group’searnings for the following year would be €2,300,000 in the event of a 1% decrease and €900,000 in the event of a 1% increase in interest rates. In both cases, interest expenses would increase, due chiefly to the situation of additionalhedging, covering a portion of the debt.

4.12 • Security deposits

This line item totals €40 million, mainly attributable to tenant security deposits.

4.13 • Other liabilities

All other liabilities fall due in less than one year, with the exception of an exit tax balance of €322 million, payable in thirds, December 15 of the years 2004 to 2006.

4.14 • Off-balance sheet commitmentsin € thousands 12/31/2003 12/31/2002 12/31/2001

Commitments received

Bank guarantees received in respect of real estate management business 145 145 145

Unused lines of credit 937,847 127,841 395,190

Swaps 2,223,114 2,203,962 1,122,809

Caps 680,000 680,000 198,183

Firm commitments to acquire property 63,256 688,563

Other (La Fourmi Immobilière tax dispute) 6,530 6,530

TOTAL 3,910,892 3,707,041 1,716,327

Commitments granted

Pledges, security deposits and guarantees (1) 280,494 140,742 195,432

Guarantees given on swap differentials (notional amount) 234,913 120,651

Swaps 2,223,114 2,203,962 1,122,809

Floors 680,000 680,000

Debt guaranteed by collateral 35,246 108,196 128,383

Exclusive or first refusal rights on property sales 63,256 688,563

TOTAL 3,517,023 3,942,114 1,446,624

(1) €280,494,000 in deposits made at 12/31/2003 by GECINA in favour of its subsidiaries.

Retirement indemnity obligations (see 3.9)

Accrued retirement indemnity paid are covered by an insurance policy, paid up in order to satisfactorily provide for thecommitments of the Company at December 31, 2003.Supplementary retirement obligations, managed by third-party organisations, globally show, given the supplementalallowances carried on the balance sheet, an excess of coverage for an amount of commitments of €11,439,000, at anactuarial rate of 5%.

Note that there has been no significant omission of obligations in the commitments, reported in the present note.

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V • Commentary on the statement of income

5.1 • Income

in € thousands 2003 2002 2001

Rents

Rents from residential properties 196,141 131,967 118,335

Rents from commercial and office properties 92,262 54,104 52,628

TOTAL RENTS 288,403 186,071 170,963

Net gain (loss) on disposals 2,585 121,034 63,369

TOTAL 290,988 307,105 234,332

5.2 • Operating expenses

Operating expenses (excluding depreciation and amortization) include €57,872,000 in rental charges and utilities re-invoiced to tenants.

5.3 • Depreciation and amortization

This line item primarily reflects depreciation and amortization of properties and fixtures, and allowances for buildingimpairment, pursuant to the principles defined in note 3.1, and contingencies and loss reserves (see note 4.8).

in € thousands 2003 2002 2001

ALLOWANCES RELEASES ALLOWANCES RELEASES ALLOWANCES RELEASES

Property impairment 97,117 30,566 24,879

Property allowances 3,893 9,591 14,004 16,435 29,090

Rents receivable 4,054 3,930 2,077 1,331 2,114 2,247

Other contingencies and losses 25,662 115,155 11,456 6,334 1,305 9,421

Bond redemption premiums 6,989 3,127 17,891

Other 29 260 181 71 27 246

TOTAL 137,744 119,345 56,998 21,740 62,651 41,004

Including – operating 57,011 4,232 40,786 6,781 33,658 31,557

– financial 61,020 1,636 5,277 9,023 22,149 114

– non-recurring and taxes 19,713 113,477 10,935 5,936 6,844 9,333

Calculated on historical values with the period of depreciation in force up to December 31, 2002, the allowance for amortization of fixed assets for the fiscal year 2003 would be €37,517,000 instead of €45,070,000.

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5.4 • Non-recurring results

in € thousands 2003 2002 2001

Losses on cancelled shares in acquired companies (1) –2,519 –60,296

Capital gains/losses on the sale of securities 7,994 –385 1,207

Allowances for taxes/partial business mergers, and tax assessments –5,070 8,429

Non-recurring allowance for a bond redemption premium –6,599

Other non-recurring gains and losses –512 285 857

NON-RECURRING RESULTS 4,963 – 5,170 –56,402

(1) The contributions of the companies merged in 2001 were valued at net book value. Since GECINA owned shares in the acquired companies, the mergers generated losses on cancelled shares, which were recorded under non-recurringresults. These losses correspond to the difference between that share of net assets contributed that corresponded to the shares GECINA already owned and their book value as recorded by GECINA.

5.5 • Transactions with affiliated companies

ASSETS LIABILITIES FINANCIAL RESULTS

Long-term financial assets 2,624,733 Financing debt 751,221 Interest expense 17,090

Trade notes receivable 2,718 Trade notes payable 531

Other receivables 550,904 Other payables 200 Interest income 47,287

Guarantees and pledges given by Gecina on behalf of its subsidiaries 280,494

VI • Other relevant information

6.1 • Events subsequent to December 31, 2003

None.

6.2 • Non-recurring events and litigation

Some of the companies that were merged with and into GECINA in 2000 subsequently underwent tax audits that resulted,in some cases, in tax assessments, some of which are being contested. Based on the estimates of the Group and itsadvisors, no material risk of this kind exists that could affect the GECINA earnings or financial position that has not beenaccounted for by means of an allowance.

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6.3 • Workforce

AVERAGE WORKFORCE 2003 2002 2001

Managers 144 75 67

Non-management staff 162 87 92

Building staff and laborers 377 233 204

TOTAL 683 395 363

6.4 • Compensation paid to directors and officers of the Company

Directors’ fees paid to members of the Board of Directors for the fiscal year totalled €120,000.The aggregate compensation paid to directors and officers in 2003 was €1,109,000.

6.5 • Loans and guarantees granted to directors and officers of the Company

None.

6.6 • Identity of the Parent Company

GECINA is accounted for by the equity method in the financial statements of Assurances Générales de France, 87, rue de Richelieu, 75009 Paris.

6.7 • Share subscription and purchase options

(1) (1) (1) (1)

Date of Shareholders ‘ Meeting June 19, 1996 June 7, 2000 June 7, 2000 June 6, 2001 June 6, 2001 June 6, 2001 June 5, 2002 June 6, 2001

Date of Board of Directors' Meeting Sept. 29, 1999 Sept. 27, 2000 Sept. 26, 2001 June 6, 2001 Sept. 26, 2001 June 5, 2002 Sept. 25, 2002 Nov. 25, 2003

Option exercise start date Sept. 29, 1999 Sept. 27, 2000 Sept. 26, 2001 June 6, 2001 Sept. 26, 2001 June 5, 2002 Sept. 25, 2002 Nov. 25, 2003

Date of expiration Sept. 29, 2004 Sept. 27, 2010 Sept. 26, 2011 June 5, 2009 Sept. 25, 2009 June 4, 2010 Sept. 25, 2012 Nov. 24, 2011

Type of options subscription subscription subscription purchase purchase purchase purchase purchase

Number of shares (2) 64,800 126,000 136,800 63,000 47,000 133,000 172,800 275,000

Exercise price €43.64 €40.56 €39.58 €48.38 €47.49 €47.71 €44.75 €52.38

Number of options exercised (2) 14,760 9,900 11,700

(1) Within the framework of the transfer of commitments, relating to stock options, made by SIMCO.

(2) Data adjusted for the two-for-one stock split, on January 2, 2004.

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6.8 • Statement of cash flow

in € thousands 12/31/2003 12/31/2002 12/31/2001

Cash flow from operations

Net income 21,269

Elimination of expenses and income with no material impact on cash flow or unrelated to operations

– Depreciation and amortization 17,984

– Investment subsidies recorded under earnings –280

– Net capital gains on asset disposals –24,819

– Losses on cancelled shares in acquired companies 2,519

– Releases of redemption premiums following bond conversions –11,092

– Exit tax (1) 70,866

Gross cash flow 76,447

Change in working capital requirements

– Trade receivables 26,844

– Trade payables (excluding exit tax) –48,199

NET CASH FLOW FROM OPERATIONS 55,092 70,077 47,118

Cash flow from investment activities

Acquisitions of fixed assets –94,694

Sales of fixed assets (1) 1,028,494

Payment of exit tax –107,372

Decrease in long-term financial assets 66,889

Merger expenses –2,520

NET CASH FLOW FROM INVESTMENT ACTIVITIES 890,797 –1,373,301 79,586

Cash flow from financing activities

Dividends paid –104,856

Paid-in capital increase 5,849

Debt issues 1,417,202

Debt redemptions –2,891,273

NET CASH FLOW FROM FINANCING ACTIVITIES –1,573,078 1,655,569 –91,401

CHANGE IN CASH FLOW –627,189 352,345 35,303

Cash flow at start of period (*) 860,320

Cash flow at end of period 233,131

(1) Elimination of the exit tax expense recorded in the income statement. Payment of the exit tax (€429.5 million) infourths, every December 15 of the years 2003 to 2006, is carried as a capital expenditure in investment/disposalactivities. The first one-fourth payment was made on December 15, 2003, in the amount of €107.3 million.

(*) Includes impact of mergers completed during the year.

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125

FINANCIAL INFORMATION EQUITY SHAREHOLDERS’ % EQUITY OUTSTANDING GUARANTEES REVENUES EARNINGS DIVIDEND(in € thousands) CAPITAL EQUITY OWNERSHIP LOANS AND AND SURETIES (EXCLUDING (PROFIT OR ACCOUNTED

(OTHER THAN ADVANCES GIVEN TAXES) FOR LOSS FOR FOR BY THE EQUITY GRANTED BY BY THE THE MOST THE MOST COMPANY

SUBSIDIARIES CAPITAL) THE COMPANY COMPANY RECENT RECENT DURINGAND EQUITY INTERESTS GROSS NET YEAR ENDED YEAR ENDED) THE YEAR

A - Detailed information on subsidiaries and equity interests

SA Société des Immeubles de France 62,405 1,362,147 99.13% 1,308,597 1,308,597 – – 37,215 63,488 –

SAS Geciter 9,614 426,789 100.00% 407,026 407,026 85,763 7,309 26,100 14,242 –

SA Parigest 93,534 444,443 99.99% 404,976 404,976 – – 20,313 21,747 –

SCI Ternes Opéra 114,761 126,105 99.99% 115,609 115,609 – – 5,055 4,832 –

SCI Paris Saint-Michel 31,946 33,882 99.99% 36,799 36,799 1,356 – 2,569 1,356 1,356

SCI SB Nord-Pont 25,384 36,903 100.00% 32,952 32,952 – – 2,872 2,289 –

SCI Dupleix-Suffren 1 6,640 99.90% 30,283 30,283 25,604 – 1,740 620 –

SAS SPL 22,898 25,352 100.00% 25,435 25,435 – – 3,284 1,655 –

SNC Michelet – 28,309 99.00% 20,965 20,965 153,422 – 13,180 6,606 –

SCI Franco-Russe-Université 15 20,069 99.90% 19,229 19,229 20,033 – 1,522 20,054 20,034

SAS Investibail Transactions 16,515 19,489 100.00% 15,899 15,899 175 – 332 1,555 –

SAS Feydeau Bourse 4,642 12,097 100.00% 11,675 11,675 11,105 – 1,660 997 –

SCI Beaugrenelle 22 2,028 50.00% 11,216 11,216 11,592 – 4,328 2,006 1,116

SCI SB Londres 6,511 9,873 100.00% 8,837 8,837 – – 759 590 –

SCI Du 150 route de la Reine à Boulogne – –444 99.00% 8,228 8,228 44,756 – 4,018 1,933 1,914

SAS Parisienne Immobilière d’Investissement 1 40 –436 100.00% 5,185 5,185 2,458 – 9,627 153 –

SCI du 77/81 Bld Saint Germain 38 –4,797 99.96% 4,511 4,511 – 118,223 838 –4,835 –

French subsidiaries and equity interests < 1% K parent company

Other subsidiaries and equity interests

a. French subsidiaries (total) 28,864 28,824 106,648 228 38,003 13,214 4,364

b. Foreign subsidiaries (total) – – – – – – –

c. Equity interests in French 1,537 1,537 – – 748 300 77

companies (total)

d. Equity interests in foreign – – – – – – –

companies (total)

BOOK VALUE OF SHARES OWNED

Analysis of subsidiaries and equity interests

126

1999 2000 2001 2002 2003

I - EQUITY CAPITAL AT THE END OF THE PERIOD (3)

Share capital (in € thousands) 293,256 293,280 288,571 405,696 435,287

Number of ordinary shares outstanding 19,236,325 19,237,876 19,238,050 27,046,376 58,038,246

Maximum number of shares to be issued by bond conversionsand/or exercise of subscription rights 2,205,078 2,197,370 2,252,326 4,735,003 7,908,646

II - OPERATIONS AND EARNINGS FOR THE FISCAL YEAR(in € thousands) (1) (2)

Revenues (excluding taxes) 158,614 149,611 171,415 186,346 288,758

Earnings before income tax,depreciation and amortization –162,697 103,999 57,677 186,269 115,179

Corporate income tax 33,955 30,219 30,174 40,835 75,512

Earnings after income tax,and depreciation and amortization –181,789 89,305 5,857 110,176 21,269

Distributed profits 60,584 62,084 69,257 108,186 140,453

III - EARNINGS PER SHARE(in €) (1) (2)

Earnings after tax, and before depreciation and amortization –13.32 3.87 1.48 7.19 0.68

Earnings after tax, and depreciation and amortization –12.31 4.68 0.32 5.45 0.37

Net dividend per share 3.18 3.34 3.60 4.00 2.42

IV - WORKFORCE

Average number of employees during the fiscal year 420 368 363 395 683

Annual payroll expense (in € thousands) 14,004 10,228 10,265 13,008 26,898

Annual employee benefits, including social securityand other social charges (in € thousands) 8,937 4,973 5,162 5,171 11,144

(1) Including loss on cancelled shares in acquired companies (€225,947,000).(2) Including loss on cancelled shares in acquired companies (€60,296,000).(3) Data adjusted for the two-for-one stock split, on January 2, 2004.

Five-year financial summary

127

GECITERCommercial for 100%

26-28 Saint-GeorgesCommercial for 100%

23-29 ChateaudunCommercial for 100%

SB LondresCommercial for 100%

SB Nord PontCommercial for 100%

16 VE InvestissementCommercial for 100%

77-81 bd Saint-GermainCommercial for 100%

50%Beaugrenelle

Commercial for 100%

SPLCommercial for 100%

AICCommercial for 100%

Investibail TransactionsCommercial for 100%

Ternes-OpéraCommercial for 100%

GECINAResidential for 73% Commercial for 27%

24 ErlangerCommercial for 100%

28 JeûneursCommercial for 100%

6 PenthièvreCommercial for 100%

5 RoyaleCommercial for 100%

Sèvres-BellevueCommercial for 100%

Michelet-LevalloisCommercial for 100%

Route de la ReineCommercial for 100%

Feydeau-BourseCommercial for 100%

PII 1Commercial for 100%

PII 2Commercial for 100%

ParigestResidential for 78%Commercial for 24%

Dupleix-SuffrenResidential for 100%

Vouillé-NanteuilResidential for 100%

Paris Saint-MichelResidential for 100%

Tour H 15Commercial for 100%

36.55%SGIL

Residential for 100%

GEC 1Real Estate Shell

Company

GEC 2Real Estate Shell

Company

LOCAREReal EstateTransactions

FONCIGEFReal Estate Agency

SOGECILCorporation in liquidation

Union Immobilièrede Gestion

Property Management

Cofimeg Pierre GestionCorporation in liquidation

FoncirenteReal Estate Management

Partnership

GIE GESSIIT Services Company

MadeleineGardiennage

Service Company

GEC 3Real Estate Shell

Company

FEDIMShell Company

Franco-RusseReal Estate Shell

Company

99.13%

SIFResidential for 2%

Commercial for 98%

5 MontmartreCommercial for 100%

55 AmsterdamCommercial for 100%

CapucinesCommercial for 100%

St-Augustin MarsollierCommercial for 100%

MonttessuyCommercial for 100%

SPIPMCommercial for 100%

SADIAResidential for 1%

Commercial for 99%

Hôtel d’AlbeCommercial for 100%

DelcasséCommercial for 100%

60.13%Rente Immobilière

Commercial for 100%

CFGThird-party

Management firm

Organization chart of the GECINAGroup at December 31, 2003, afterthe SIMCO merger

128

Statutory Auditors’ report on the consolidated financial statements(Free translation of the French original)

To the shareholders,

In compliance with the assignment entrusted to us by the Shareholders’ meeting, we have audited the accompanyingconsolidated financial statements of GECINA for the year ended December 31, 2003.

The consolidated financial statements have been approved by the Board of Directors. Our role is to express an opinion onthese financial statements based on our audit.

I • Opinion on the consolidated financial statements

We conducted our audit in accordance with professional standards applicable in France. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are freeof material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principles used and significant estimates madeby the management, as well as evaluating the overall financial statements presentation. We believe that our audit providesa reasonable basis for our opinion.

In our opinion, the consolidated financial statements give a true and fair view of the assets, liabilities, financial position andresults of the consolidated group of companies in accordance with the accounting rules and principles applicable in France.

Without qualifying our opinion, we draw attention to note 1.1 of the Notes that presents the change in the accountingmethod pursuant to the transitional provisions of the regulation CRC-2002-10 related to asset amortization anddepreciation and its application.

II • Justification of our assessments

In accordance with the requirements of article L. 225-235 of the French Company Law (Code de Commerce) relating tothe justification of our assessments, introduced by the Financial Security Act of August 1, 2003 and which came into effectfor the first time this year, we bring to your attention the following matters:

• As stated in notes 1.1 and 3.1 to the Notes, in connection with the election to the new tax regime applicable to“SIIC” (French listed property investment companies), GECINA carried out a voluntary revaluation of its tangible andfinancial fixed assets based on valuations performed by independent real estate experts. We ensured that theaccounting treatment of these transactions was appropriate based on generally accepted accounting principles inFrance, the specific provisions laid down by the Emergency Committee meeting of the French National Institute ofaccountants (Conseil national de la comptabilité) held on June 11, 2003 and the tax impact resulting therefrom.

• As stated in note 3.1 to the Notes, the real estate assets are subject to valuation procedures carried out byindependent real estate experts. We ensured that based on the external expert appraisals as at December 31, 2003:- the book values of the revalued assets have been corrected in a proper manner towards the revaluation reserve in

compliance with the provisions of the Emergency Committee meeting of the French National Institute ofaccountants (Conseil national de la comptabilité) held on June 11, 2003,

- sufficient provisions were set aside using the Group’s accounting principles.

The assessments were made in the context of our audit of the consolidated financial statements, taken as a whole, andtherefore contributed to the formation of the unqualified opinion expressed in the first part of this report.

III • Specific verification

In accordance with professional standards applicable in France, we have also verified the information given in the Groupmanagement report. We have no matters to report regarding its fair presentation and conformity with the consolidatedfinancial statements.

April 23, 2004

The Statutory Auditors

MAZARS & GUERARD F-M RICHARD et Associés ERNST & YOUNG AuditPhilippe Castagnac Ginette Piquy Christian Mouillon

Statutory Auditor’s report

Statutory Auditors’ report on the financial statements(Free translation of the French original)

To the Shareholders,

In compliance with the assignment entrusted to us by the Shareholders’ meeting, we hereby report to you, for the yearended December 31, 2003, on:• the audit of the accompanying financial statements of GECINA;• the justification of our assessments;• the specific verifications and information required by law.

These financial statements have been approved by the Board of Directors. Our role is to express an opinion on thesefinancial statements based on our audit.

I • Opinion on the financial statements

We conducted our audit in accordance with professional standards applicable in France. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are freeof material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principles used and significant estimates madeby the management, as well as evaluating the overall financial statements presentation. We believe that our audit providesa reasonable basis for our opinion.

In our opinion, the financial statements give a true and fair view of the Company’s financial position and its assets andliabilities, as of December 31, 2003, and of the results of its operations for the year then ended in accordance with theaccounting rules and principles applicable in France.

Without qualifying our opinion, we draw attention to note 1.1 of the Notes that presents the change in the accountingmethod pursuant to the transitional provisions of the regulation CRC-2002-10 related to asset amortization anddepreciation and its application.

II • Justification of our assessments

In accordance with the requirements of article L. 225-235 of the French Company Law (Code de Commerce) relating tothe justification of our assessments, introduced by the Financial Security Act of 1st August 2003 and which came intoeffect for the first time this year, we bring to your attention the following matters:

• As stated in notes 1.1 and 3.1 to the Notes, in connection with the election to the new tax regime applicable to“SIIC”(French listed property investment companies), GECINA carried out a voluntary revaluation of its tangible andfinancial fixed assets based on valuations performed by independent real estate experts. We ensured that theaccounting treatment of these transactions was appropriate based on generally accepted accounting principles inFrance, the specific provisions laid down by the Emergency Committee meeting of the French National Institute ofaccountants (Conseil national de la comptabilité) held on June 11, 2003 and the tax impact resulting therefrom.

• As stated in notes 1.1 and 4.7 to the Notes, SIMCO has merged with GECINA effective January 1, 2003 afterrevaluation. We ensured that the accounting treatment of this transaction was appropriate based on generally acceptedaccounting principles.

• As stated in note 3.1 to the Notes, the real estate assets are subject to valuation procedures carried out by independentreal estate experts. We ensured that based on the external expert appraisals as at December 31, 2003:- the book values of the revalued assets have been corrected in a proper manner towards the revaluation reserve in

compliance with the provisions of the Emergency Committee meeting of the French National Institute of accountants(Conseil national de la comptabilité) held on June 11, 2003,

- sufficient provisions were set aside using the Group’s accounting principles.

129

130

The assessments were made in the context of our audit of the financial statements, taken as a whole, and thereforecontributed to the formation of the unqualified opinion expressed in the first part of this report.

III • Specific verifications and information

We have also performed the specific verifications required by law in accordance with professional standards applicable inFrance.

We have no matters to report regarding the fair presentation and the conformity with the financial statements of theinformation given in the management report of the Board of Directors, and in the documents addressed to theshareholders with respect to the financial position and the financial statements.

In accordance with French law, we have ensured that the required information concerning the names and voting rights ofthe shareholders has been properly disclosed in the Board of Directors’ Report.

April 23, 2004

The Statutory Auditors

MAZARS & GUERARD F-M RICHARD et Associés ERNST & YOUNG AuditPhilippe Castagnac Ginette Piquy Christian Mouillon

To the Shareholders,

In our capacity as statutory auditors of your Company, we are required to report on certain contractual agreements withcertain related parties of which we have been advised. We are not required to ascertain whether such agreements exist.

We hereby inform you that we have not been advised of any agreements covered by Article L.225-38 of French CompanyLaw (Code de Commerce).

April 23, 2004

The Statutory Auditors

MAZARS & GUERARD F-M RICHARD et Associés ERNST & YOUNG AuditPhilippe Castagnac Ginette Piquy Christian Mouillon

Special report of the Statutory Auditors on certain related party transactions(Free translation of the French original)

131

To the Shareholders,

In our capacity as statutory auditors of your Company and in compliance with Article L.225-177 of French Company Law(Code de commerce) and Article 174-19 of the Decree of March 23, 1967, we hereby report on the employee stock optionsubscription or purchase plan reserved for the employees and directors of the Company and affiliated companies asdefined under Article L.225-180 of French Company Law (Code de commerce), upon which you are called to vote underResolution 16.

Your Board of Directors proposed that it be empowered for the legal maximum period to grant share subscription orpurchase options.

The total number of options thus granted would entitle holders to subscribe for or purchase a total number of sharesrepresenting no more than 2.5% of GECINA’s fully diluted share capital. These options would be valid for a maximum of10 years from the date on which they are vested.

The subscription price for options will be fixed at the date the options are granted and would not be less than 95% of theaverage price quoted over the twenty trading days prior to the allocation date. The purchase price of shares will bedetermined on the day the options are allocated and would be at least equal to 95% of the average price quoted over thepreceding twenty trading days, or 95% of the average purchase price of the treasury stock held by the Company underArticles L.225-208 and L.225-209 of French Company Law (Code de commerce).

The report on the reasons for the stock option plan and on the proposed methods used for determining the subscriptionor purchase price is the responsibility of the Board of Directors. Our responsibility is to express an opinion on the proposedmethods for determining the subscription or purchase price.

We conducted our work in accordance with French professional standards. These standards require that we perform thenecessary procedures to verify that the methods proposed for determining the subscription or purchase price are includedin the Board of Directors’ Report, are in accordance with legal requirements, are of information to the shareholders and donot appear manifestly inappropriate.

We have nothing to report on the methods proposed.

April 23, 2004

The Statutory Auditors

MAZARS & GUERARD F-M RICHARD et Associés ERNST & YOUNG AuditPhilippe Castagnac Ginette Piquy Christian Mouillon

Report of the Statutory Auditors on the stock optionsubscription or purchase plan(Free translation of the French original)

132

To the Shareholders,

In our capacity as statutory auditors of GECINA and in compliance with Articles L. 225-135, L. 228-92 and L. 228-95 ofFrench Company Law (Code de commerce), we hereby report on the proposed issue of securities, with or withoutpreferential subscription rights, upon which you are called to vote under Resolution 17 and 18 respectively.

Your Board of Directors proposes that, on the basis of its report, it be empowered for a period of 26 months to determinethe conditions of these operations and requests that, if necessary, you waive any preferential subscription rights as set outin Resolution 18. These empowerments would replace anyone granted previously.

The maximum amount of capital increase resulting from these issues would be €150 million. Where debts are issued, themaximum amount of debt resulting from these issues, will be €1,500 million.

We conducted our work in accordance with French professional standards. These standards require that we perform thenecessary procedures to verify the methods used for determining the issue price.

Subject to a subsequent examination of the conditions for the proposed increase in capital, we have nothing to report onthe methods used for determining the share price provided in the Board of Directors’ Report.

As the issue price has not yet been determined, we do not express an opinion on the final conditions for the increase incapital, and, consequently, on the proposed cancellation of preferential subscription rights, the principal of which is,however, inherent to the operation submitted for your approval.

In accordance with Article 155-2 of the law of March 23, 1967, we will issue a supplementary report when the increase incapital has been performed by your Board of Directors.

April 23, 2004

The Statutory Auditors

MAZARS & GUERARD F-M RICHARD et Associés ERNST & YOUNG AuditPhilippe Castagnac Ginette Piquy Christian Mouillon

Report of the Statutory Auditors on the issue of marketable securities (Free translation of the French original)

To the Shareholders,

In our capacity as statutory auditors of GECINA and in compliance with Article L.225-209, paragraph 4 of FrenchCompany Law (Code de Commerce) in respect of the cancellation of a company’s own shares previously repurchased, wehereby report on our assessment of the terms and conditions of the proposed reduction in capital under Resolution 20.

We conducted our work in accordance with French professional standards. These standards require that we perform thenecessary procedures to examine whether the terms and conditions for the proposed reduction in capital are fair.

This operation involves the repurchase by your Company of its own shares, representing an amount not in excess of 10%of its total capital, in accordance with Article L. 225-209, paragraph 4 of French Company Law (Code de Commerce).Moreover, this purchase authorisation is proposed to your shareholders’ meeting for approval under Resolution 14 andwould be given for a period of 18 months.

Your Board of Directors requests that it be empowered for a period of 18 months to proceed with the cancellation of ownshares the Company was authorised to repurchase, representing an amount not exceeding 10% of its total capital for aperiod of 24 months. This authorization would cancel the one granted at the Extraordinary General Meeting of June 3,2003 under Resolution 17.

We have nothing to report on the terms and conditions of the proposed reduction in capital, which can be performed onlyafter your Shareholders’ meeting has already approved the repurchase by your Company of its own shares as described inResolution 14.

April 23, 2004

The Statutory Auditors

MAZARS & GUERARD F-M RICHARD et Associés ERNST & YOUNG AuditPhilippe Castagnac Ginette Piquy Christian Mouillon

Report of the Statutory Auditors on the proposed reduction in capital through the cancellation of own shares purchased or to be purchased by the company(Free translation of the French original)

133

134

To the Shareholders,

In our capacity as statutory auditors of your Company and in compliance with Articles L.225-135 and L.225-138 of FrenchCompany Law (Code de Commerce), we hereby report on the proposed reserved increase in capital of maximum€15 million upon which you are called to vote under Resolution 21.

This increase in capital, which is submitted for your approval in accordance with Article L. 225-129 VII of French CompanyLaw (Code de Commerce), is reserved for the employees of your Company and affiliated entities as defined under Article L.225-16 of French Company Law (Code de commerce), that subscribes to company savings scheme as definedunder Articles L.443-1 and L.443-2 of French Company Law (Code de commerce).

Your Board of Directors proposes, on the basis of its report, that it be empowered for a period of 5 years started thisShareholders’ meeting to determine the conditions of this operation and proposes to cancel your preferential subscriptionrights. This authorization would cancel the one granted at the Extraordinary General Meeting of December 17, 2003under Resolution 8.

We conducted our work in accordance with French professional standards. These standards require that we perform thenecessary procedures to verify the methods used to determine the amount of issue price.

Under Article L.443-5 of French Employment Law (Code de Travail), the exercise price of the new issue will be equal to theaverage share price taken over 20 trading days of the regulated market on which the Company shares are listed, precedingthe date the Board of Directors meet to determine the opening date for subscriptions, and may not be reduced by morethan 20%.

Subject to a subsequent review of the conditions for the proposed increase in capital, we have nothing to report on themethods used to determine the amount of issue price provided in the Board of Directors’ Report.

As the issue price has not yet been determined, we do not express an opinion on the final conditions for the increase incapital and, consequently, on the proposed cancellation of preferential subscription rights, the principal of which is,however, inherent to the operation submitted for your approval.

In accordance with Article 155-2 of the law of March 23, 1967, we will issue a supplementary report when the increase incapital has been performed by your Board of Directors.

April 23, 2004

The Statutory Auditors

MAZARS & GUERARD F-M RICHARD et Associés ERNST & YOUNG AuditPhilippe Castagnac Ginette Piquy Christian Mouillon

Report of the Statutory Auditors on the increase in capital with cancellation of preferential subscription rights reserved for employees members(Free translation of the French original)

135

Ordinary resolutions1st RESOLUTION • Approval of the annualfinancial statements and release of liability for management

The Shareholders’ Meeting, having read the Report of theBoard of Directors and the Report of the IndependentAuditors, hereby approves in full the Report of the Boardof Directors and the annual financial statements for thefiscal year ended December 31, 2003, as presented,together with the transactions referred to in theaforementioned reports, showing a net profit of€21,268,551.29.

It notes payment from additional paid-in capital (merger)of €24,501,779, corresponding to the adjustment ofcontributions, expenses, duties and commissions relatingto the merger, and a transfer to the legal reserve.

It also notes payment from the conversion premium of€1,952,398.50, to increase legal reserve by one tenthof the capital increase, resulting from the conversionof bonds during the fiscal year.

2nd RESOLUTION • Approval of theconsolidated financial statements

The Shareholders’ Meeting, having read the Report of theBoard of Directors and the Report of the IndependentAuditors, hereby approves the consolidated financialstatements for the year ended December 31, 2003,as presented, together with the transactions referred toin the aforementioned reports, showing a net profit of€535,519,000, Group share.

3rd RESOLUTION • Transfer to a reserveaccount

The Shareholders’ Meeting decides to transfer to a specificreserve account the revaluation difference related to assetssold during the fiscal year and the additional depreciationresulting from such revaluation in an amount of€145,970,698.

4th RESOLUTION • Appropriation of net income

The Shareholders’ Meeting hereby approves the proposalsmade by the Board of Directors, and resolves toappropriate the following amounts:

From total earnings for the year €21,268,551 Appropriation to retained earnings €84,510,197

Appropriation to dividend payout not exceeding €105,778,748Appropriation to the long-term capital gains reserve €2,346,533

Balance €103,432,215Increased by a transfer from the share premiums, mergersand contributions account €38,761,488

A total amount of €142,193,703

for distribution of a net dividend of €2.45 per share,comprising the company’s capital, of which €0.65 pershare under the SIIC system and €1.80 per share undercommon tax law provisions, representing a maximumamount of €37,724,860, under the SIIC system and€104,468,843 under standard tax law provisions.

No tax credit (avoir fiscal) is attached to the €0.65 fractionof the dividend under SIIC system. To the fraction equal to1.80 and governed by common tax law provisions, thereattaches, as regards individuals, a dividend tax credit (avoirfiscal) of €0.90 and, for legal entities not eligible forparent company status, a dividend tax credit of €0.18.

The total distributable dividend and the deductedamounts shall be adjusted to take into account Treasuryshares held by the Company on the date of dividendpayout, which by law are not eligible for dividends.

The dividend will be available for payment as of June 8,2004.

In accordance with applicable law, dividends paid outin respect of the three preceding fiscal years are indicatedin the table below:

Fiscal year Net Tax GrossDividend Credit Dividend

2000 €3.34 €1.67 €5.01

Adjusted amount (*) €1.67 €0.84 €2.51

2001 €3.60 €1.80 €5.40

Adjusted amount (*) €1.80 €0.90 €2.70

2002 €4.00 €2.00 €6.00

Adjusted amount (*) €2.00 €1.00 €3.00

(*) Amount adjusted in order to account for the two-for-one stock split effective January 1, 2004.

Draft resolutions

136

5th RESOLUTION • Regulated agreements

The Shareholders’ Meeting duly notes the terms of theIndependent Auditors’ Special Report on agreementsfalling within the scope of Articles L.225-38 and followingof the French Company Code and hereby approves saidagreements.

6th RESOLUTION • Re-election of a member of the Board of Directors

The Shareholders’ Meeting hereby re-elects Anne-Marie deCHALAMBERT to the Board of Directors for a term of threeyears, set to expire at the close of the Annual Meeting ofthe Shareholders called to approve the financial statementsfor the year ended December 31, 2006.

7th RESOLUTION • Determination of the amount of Directors fees

The Shareholders’ Meeting sets at €400,000 the totalannual amount of Directors fees allocated to the Board ofDirectors starting from January 1, 2004.

8th RESOLUTION • Expiration of the term of office of the independent auditors

The Shareholders’ Meeting takes note of the expiration ofthe terms of office of Accounting Offices of F-M Richardet Associés SA, and Ernst & Young Audit, incumbentindependent auditors and Sylvain Elkhaim and DominiqueDuret-Ferrari, alternate auditors.

9th RESOLUTION • Resignation of two independent auditors

The Shareholders’ Meeting takes note of the resignation,as third independent auditor, of the Accounting Offices ofMazars & Guérard, incumbent independent auditor andMr. Patrick de Cambourg, alternate auditor.

10th RESOLUTION • Appointment of an independent auditor

The Shareholders’ Meeting hereby appoints the firm Mazars& Guerard as incumbent independent auditor for a term ofsix years, expiring at the close of the Annual Meeting of theShareholders called to approve the financial statements forthe year ended December 31, 2009.

11th RESOLUTION • Appointment of an independent auditor

The Shareholders’ Meeting hereby appoints the firmPricewaterhouseCoopers Audit as incumbent independentauditor for a term of six years, expiring at the close of theAnnual Meeting of the Shareholders called to approve thefinancial statements for the year ended December 31, 2009.

12th RESOLUTION • Appointment of an alternate independent auditor

The Shareholders’ Meeting hereby appoints the Mr. Patrickde Cambourg as alternate independent auditor for a termof six years, expiring at the close of the Annual Meeting ofthe Shareholders called to approve the financialstatements for the year ended December 31, 2009.

13th RESOLUTION • Appointment of an alternate independent auditor

The Shareholders’ Meeting hereby appoints the Mr. PierreColl as alternate independent auditor for a term of six years, expiring at the close of the Annual Meetingof the Shareholders called to approve the financialstatements for the year ended December 31, 2009.

14th RESOLUTION • Renewed authorization to the Company to trade in its own shares

The Shareholders’ Meeting, having read the managementreport of the Board of Directors and the condensedregistration statement that received the visa of the Frenchstock exchange regulatory authority, hereby renews theauthorization granted to the Board of Directors, topurchase, sell or transfer Company shares, pursuant to theprovisions of Article L.225-209, and following, of theFrench Company Code. The total number of sharesrepurchased may at no time exceed the maximumauthorized by law, which is 10% of the company’s equitycapital at the date of repurchase (currently a maximum of5,803,824 shares with a par value of €7.50).

The maximum purchase price is not to exceed €90 pershare, on the basis of a per share par value of €7.50. Theaforementioned prices may be adjusted to reflect anytransactions carried out on the Company’s equity capital.

Consequently, the maximum amount that the Companymay allocate to the purchase of its own shares is€522,344,160.

The acquisition of these shares of stock may be completedin one or more transactions by any appropriate means, inconformity with existing law and regulation, includingthrough public purchase/exchange offerings, in blocks, onthe open market, or as derivatives (options), particularlyfor the purpose of:– holding, selling, or generally, transferring the

aforementioned shares in order to optimizemanagement of the Company’s assets and finances;

– Regulating the market price of the Company’s share bycountering adverse price trends;

– Buying and selling shares on the basis of prevailingmarket conditions;

– Allotting or selling shares to employees and directorsand officers of the company in connection withemployee profit sharing, stock option plans, employeestock ownership or employer-sponsored companysavings plans;

– Using them, by exercising the attached rights, as tenderfor conversion, exchange, payment or on presentation,notably in acquiring Company shares;

– Using them as tender for payment or exchange, notablyin acquisitions;

– Cancelling them, subject to approval by the Extraordinaryand Ordinary General Meeting of Shareholders, asstipulated in the twentieth resolution hereinafter.

– Carry out, either simultaneously or otherwise, one ormore of the operations, mentioned above.

The Company is authorized to proceed with theaforementioned transactions during a period of publicoffering to purchase or exchange shares in compliancewith the regulations of the French stock exchangeregulatory authority (AMF).

This authorization is valid for a period of eighteen monthsas of the Meeting of the Shareholders on June 2, 2004,and replaces the authorization given by the Shareholders’Meeting of June 3, 2003, as stipulated in its twelfthresolution. The Board of Directors is expressly authorizedto delegate the power to implement decisions made byvirtue of this authorization to its Chairman or CEO.

15th RESOLUTION • Authorization of the Boardof Directors to issue bonds

The Shareholders’ Meeting, after taking note of the reportsubmitted by the Board of Directors, authorizes the Boardof Directors to issue on the basis of the sole deliberationsof the Board of Directors, in one or more times, whetherin France, in foreign countries and/or on internationalmarkets through public offerings or private placements,where applicable under a Euro Medium-Term Notes

(EMTN) program, at such dates and terms as the Board shallsee fit and within a time period of 5 years from the date ofthis Meeting, any bonds and assimilated securities, and inparticular any subordinated securities, whether with a fixedor unlimited term, or any other securities granting througha single issuance a same receivable as against the Company,whether or not such securities are accompanied withwarrants giving a right to acquire and subscribe for bonds,assimilated securities or other securities or investmentsecurities granting such a right as against the Company.

The Shareholders’ Meeting decides that the maximumnominal amount of all securities to be issued under theabove authorization shall not exceed one billion fivehundred million euros (€1,500,000,000) or the exchangevalue of such amount in foreign currencies or in any otheraccounting units referring to several currencies, it beingindicated that such maximum nominal amount shall applyin total to the bonds and assimilated securities issuedimmediately or after exercise of warrants but that suchamount shall not include any redemption premiums, if any.

This maximum amount is separate from that referred to inthe seventeenth and eighteenth resolutions.

The Shareholders’ Meeting grants all powers to the Boardof Directors with all powers to sub-delegate in accordancewith provisions of law, in order to:– make such issues within the aforementioned limits, and

determine the date, nature, amounts and issuancecurrency thereof;

– determine the features of the securities to be issued andin particular their nominal value and ex-coupon date,issuance price, where applicable with redemptionpremium (in which case such redemption premium shallbe applied against the maximum authorized amountreferred to above), interest rate (fixed and/or floating orwith repaid interest), and payment date or, in the case offloating rate securities, the terms of determination of theirinterest rate, or the terms of capitalization of the interest;

– determine, according to market conditions, the terms ofamortization and/or early redemption of the securitiesissued, where applicable with a fixed or variable premium,or even the terms of redemption by the Company;

– where applicable decide to grant a guarantee orsecurity interests to be issued and determine the termsor features thereof;

– and provide where applicable for the repayment by way ofdelivery of assets of the Company of the securities issued;

– in general, determine all terms of each issue, executeany and all contracts and agreements with any and allbanks and institutions; take all steps necessary andcomplete all required formalities and in general do allsuch things as shall be necessary.

137

138

Extraordinary resolutions

16th RESOLUTION • Authorization to the Boardof Directors to grant to certain employees orcertain categories of employees and to officersof the Company or Group affiliates, certainshare subscription and/or acquisition options.

The Shareholders’ Meeting, deliberating in accordancewith the quorum and majority requirements applicable toExtraordinary Shareholders’ Meetings, after taking note ofthe Report submitted by the Board of Directors and thespecial Report prepared by the Statutory Auditors, herebyauthorizes the Board of Directors, pursuant to ArticlesL.225-177 et seq. of the French Company Code, to grantto such employees and officers of the Company as theBoard shall designate and where applicable to theemployees and officers of the Company’s affiliates eligibleunder Article L.225-180 of the French Company Code, inone or more times, and during the maximum statutorytime period commencing on this day, options for thesubscription of new shares to be issued by the Companyas part of a capital increase and for the acquisition ofexisting shares of the Company held by the Company as aresult of acquisitions made pursuant to provisions of lawand/or the fourteenth resolution within the limit of amaximum number of shares not exceeding 2.5% of thefully diluted share capital.

For the same beneficiary, the maximum amount of thesubscribed and unexercised options shall be restricted tothe ceiling imposed by the legislation in force upon thegrant of such options.

The options subscription price shall be determined uponthe grant of such options and shall not be less than 95%of the average of the quoted prices during the twentytrading days preceding the grant of the option. The termof exercise of the subscription options shall not exceed tenyears.

The average acquisition price of the shares shall bedetermined upon the grant of such options and shall notbe less than 95% of the average of the quoted pricesduring the twenty trading days preceding the grant of theoption and shall also not be less than 95% of the averagepurchase or acquisition prices of the shares held by theCompany under Articles L.225-208 and L.225-209 of theFrench Company Code.

No share subscription or acquisition option may begranted less than twenty trading days after the strippingfrom the shares of a coupon giving a right to a dividend orcapital increase.

All powers are granted to the Board of Directors withinthe limits set forth above in order to determine any and allother terms and conditions of the operation and inparticular to: – determine the list of beneficiary employees and officers; – determine the terms under which the subscription

options shall be subscribed for and the acquisitionoptions shall be granted, as well as the respectivenumbers of shares concerned;

– prepare where applicable clauses prohibiting theimmediate resale of all or part of the shares;

– decide on the terms under which the price or numberof shares to be subscribed for or granted may beadjusted in the various cases set forth under Article225-181 of the French Company Code and, whereapplicable, the cases of suspension of the exercise ofthe options.

The Shareholders’ Meeting also grants all powers to theBoard of Directors, with the right to sub-delegate thesame to the Chairman, in order to acknowledge thecapital increase(s) resulting from the exercise of thesubscription options, to deduct from the amount of theissuance premium corresponding to each capital increaseresulting from the exercise of subscription options theamount required in order to increase the statutory reserveto one tenth of the new share capital after each increase,to complete or procure completion of all formalities,amend the articles of association and more generally doany and all such things as shall be necessary.

The Board of Directors shall inform each year the OrdinaryShareholders’ Meeting of transactions completed inaccordance with this resolution.

The Shareholders’ Meeting takes note of the fact that thisauthorization entails, in favour of the beneficiaries ofsubscription options, an express waiver of theshareholders’ pre-emption right with respect to shares tobe issued as and when options are exercised.

17th RESOLUTION • Authorization of the Boardof Directors to issue securities, with pre-emptive subscription rights maintained, witha claim to shares of the Company

The Shareholders’ Meeting, having fulfilled the quorumand majority requirements pertaining to ExtraordinaryGeneral Meetings of Shareholders, and having read theReport of the Board of Directors and the IndependentAuditors’ Special Report, and pursuant to the provisions ofparagraph 3 of Article L.225-129 III of the FrenchCompany Code:

1. Hereby authorizes the Board of Directors to issueCompany shares or securities in any form (includingunattached stock purchase warrants payable in cash orfreely allotted). These issues may be carried out in oneor more offerings, in France or abroad, in euro orforeign currencies, in the amounts and on the datesdetermined by the Board. Securities may be issued witha claim to shares of the Company immediately or atmaturity, at any time or on a determined date, and mayconsist of bonds, be combined with the issue of bonds,or consist of instruments enabling the issue of bonds.

2. Resolves that the amount of any new equity issuescarried out immediately or at maturity by virtue of theaforementioned authorization may not exceed theprincipal amount of one hundred and fifty (150) millioneuros (as required by law, the principal amount ofadditional shares issued shall be added to this amount,in order to protect the rights of holders of securitieswith a claim to shares of the Company), it beingunderstood that the principal amount of any direct orindirect equity issues effected by virtue of theeighteenth resolution hereinafter shall be included inthis total of one hundred and fifty (150) million euros.

3. Resolves that the maximum principal amount of debtinstruments issued by virtue of the aforementionedauthorization shall not exceed one billion five-hundred(1,500,000,000) million euros on the date of issue, itbeing understood that the principal amount of debtinstruments issued by virtue of the eighteenthresolution shall be included in this amount.

4. Resolves that the shareholders may exercise their pre-emptive subscription as of right for new shares, asprovided for by law. Furthermore, the Board ofDirectors may grant shareholders the right to purchasean additional number of shares than that to which theyare entitled as of right, in proportion to theirsubscription rights and limited to the number of sharesrequested.

For any shares that are not acquired through pre-emption, whether as of right or not, the Board ofDirectors may, at its option and in the order it deemsappropriate:– limit the issuance to the number of subscriptions

received, provided that it reaches the lowerthreshold indicated in Article L.225.134-1 of theFrench Company Code;

– freely allot all or a portion of non-subscribed shares;– offer all or a portion of non-subscribed shares to the

public.

5. Duly notes that, if required, the aforementionedauthorization shall entail the express waiver byshareholders, in favour of holders of securities witha claim at maturity to shares of the Company that maybe issued, in particular through conversion of bondsor presentation of warrants, of their pre-emptivesubscription rights to the shares to which they areentitled with respect to said securities.

6. Resolves that any sum paid or to be paid to theCompany in consideration for each share issued byvirtue of the aforementioned authorization shall be atleast equal to the minimum value of the share,stipulated by the law, after taking into account, in thecase of issuing unattached stock subscription warrants,the issue price of said warrants.

7. Resolves that the Board of Directors shall be grantedall powers required to give effect to this authorization,and the option of delegating such powers to itsChairman, in accordance with applicable law. Inparticular and within the limits of applicable law andregulations, the Board of Directors is entitled todetermine the dates and terms of issues as well as thetype and characteristics of the securities issued; setissue conditions and prices, especially the exercise priceof warrants and the conditions for exchange,conversion, redemption, or attribution of shares by anyother means; set issue amounts; determine the date ofas of which the securities to be issued shall earndividends, even retroactively; determine the method bywhich shares or other securities issued shall be paid upand, as required, set the conditions for their buybackon the stock market, their exchange or theirredemption; decide to suspend the exercise of rights tothe allotment of shares attached to securities to beissued, for a period that may not exceed three months;determine the conditions under which the rights ofholders of securities with a claim to share capital atmaturity shall be protected.The Board or its Chairman may, as required, charge anycosts to additional paid-in capital, in particular,

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expenses incurred to complete the issues, transfer fromissue premiums the sums necessary to increase thelegal reserve to one tenth of the new stated capital,take all measures and conclude all agreements ingeneral in furtherance of such issues, duly note thenumber of new shares issued by virtue of thisauthorization and amend the Company bylawsaccordingly.In addition, in the event that debt securities are issued,the Board of Directors is empowered to determinewhether said securities shall be subordinated; to setapplicable interest rates; to set terms and determinewhether the redemption price shall be fixed or variable,at par or with a premium; to set the terms of regularor early amortization; to assign rankings to the debt;to determine the method of representation ofbondholders and the conditions under which theseinstruments shall entitle bearers to shares and/or anysecurities with an immediate or future claim to sharecapital of the Company and, in general; to determineall other terms and conditions it shall deem necessary.The Board may, at its option, delegate such powersto its Chairman.

8. Resolves that this authorization cancels and replacesall prior authorizations pertaining to the immediateor future issue of Company shares with pre-emptivesubscription rights maintained. This authorizationis granted to the Board of Directors is valid for a periodof twenty-six months as of the date of this Meetingof the Shareholders.

18th RESOLUTION • Authorization grantedto the Board of Directors to issue securities,with pre-emptive subscription rights waived,with a claim to the Company’s share capital

The Shareholders’ Meeting, having fulfilled the quorumand majority requirements pertaining to ExtraordinaryGeneral Meetings of Shareholders, and having read theReport of the Board of Directors and the IndependentAuditors’ Special Report, and pursuant to the provisionsof paragraph 3 of Article L.225-129 III of the FrenchCompany Code:

1. Hereby authorizes the Board of Directors to issueCompany shares or securities in any form, includingin exchange for securities tendered during a publicexchange offer or in accordance with Article L.228-93of the French Company Code, in one or moreofferings, in France or abroad, in euros or foreigncurrencies, in the amounts and on the datesdetermined by the Board. Securities may be issued witha claim to shares of the Company immediately or atmaturity, at any time or on a determined date, and mayconsist of bonds or be combined with them, or mayconsist of instruments enabling the issue of bonds.

2. Resolves that the amount of new equity issues, carriedout immediately or at maturity, by virtue of theaforementioned authorization, may not exceed theprincipal amount of one hundred and fifty (150) millioneuros (as required by law, the principal amount ofadditional shares issued shall be added to this amount,in order to protect the rights of holders of securitieswith a claim to shares of the Company), it beingunderstood that the principal amount of any direct orindirect new equity issues effected by virtue of theseventeenth resolution hereinabove shall be included inthis total of one hundred and fifty (150) million euros.

3. Resolves that the maximum principal amount of debtinstruments issued by virtue of the aforementionedauthorization shall not exceed one billion five-hundred(1,500,000,000) million euros on the date of issue, itbeing understood that the principal amount of debtinstruments issued by virtue of the seventeenthresolution hereinabove shall be included in this amount.

4. Resolves to waive their pre-emptive subscription rightsto the securities issued hereunder, it being understoodthat the Board of Directors may grant shareholders apriority right to acquire all or a portion of the securitiesissued during a defined period and under terms andconditions that it shall determine. Although this priorityright shall not lead to the creation of negotiable rights,

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the Board of Directors may decide that it may beexercised as of right or not. Resolve that, if theshareholders and the public do not fully subscribe tothe issue, the Board of Directors may, at its option andin the order it deems appropriate: – limit the issuance to the number of subscriptions

received, provided that it reaches the lowerthreshold indicated in Article L.225-134-1 of theFrench Company Code;

– freely allot all or a portion of non-subscribed shares.

5. Duly notes that, if required, the aforementionedauthorization shall entail the express waiver byshareholders, in favour of holders of securities with aclaim at maturity to shares of the Company that maybe issued, in particular through conversion of bonds orpresentation of warrants, of their pre-emptivesubscription rights to any shares to which they areentitled by virtue of such securities.

6. Resolves that any sum paid or to be paid to theCompany in consideration for each share issued byvirtue of the aforementioned authorization shall be atleast equal to the minimum value set by law, afteradjustments, if required, to take into account, in thecase that unattached stock subscription warrants wereissued, the issue price of said warrants.

7. Resolves that the Board of Directors shall be granted allpowers required to give effect to this authorization,and the option of delegating such powers to itsChairman, pursuant to applicable law. In particular, theBoard of Directors is granted the power to determinethe dates, terms and conditions of the issues;determine the type and characteristics of the securitiesto be issued; set issue conditions and prices within thelimits of this authorization, especially the exercise priceof warrants and the conditions under which securitiesmay be exchanged, converted, redeemed, or attributedby any other means; set the amounts of issues and anycash payments to be made; determine the date of as ofwhich the securities to be issued shall earn dividends,even retroactively; determine the method by whichshares or other securities issued shall be paid up and,as required, set the conditions for their buyback on thestock market, their exchange or their redemption;decide to suspend the exercise of rights to theallotment of shares attached to securities to be issued,for a period that may not exceed three months;determine the conditions under which the rights ofholders of securities with a claim to share capital atmaturity shall be protected, in accordance with legalrules and regulations. The Board or its Chairman may,as required, charge any costs to additional paid-in

capital, in particular, expenses incurred to complete theissues, use additional paid-in capital to bring the legalreserve to the required one-tenth of the new totalequity capital, take all measures and conclude allagreements in general in order to successfully completesuch issues, duly note the number of new shares issuedby virtue of this authorization and amend theCompany bylaws accordingly. In addition, in the eventof the issuance of debt securities, the Board ofDirectors shall be empowered to determine whethersaid securities shall be subordinated, set applicableinterest rates, set terms, determine whether theredemption price shall be fixed or variable, at par orwith a premium, set the terms of regular or earlyamortization, assign the ranking of debt, determine themethod of representation of bondholders and theconditions under which these instruments shall entitlebearers to shares and/or any securities with animmediate or future claim to share capital of theCompany and, in general, determine and set all otherterms and conditions at its discretion. The Board may,at its option, delegate such powers to its Chairman.

8. Resolves that this authorization cancels and replaces allprior authorizations pertaining to the immediate orfuture issue of Company shares with pre-emptivesubscription rights waived and the power to grant apre-emptive right to acquire shares. This authorizationis granted to the Board of Directors is valid for a periodof twenty-six months as of the date of this meeting ofthe shareholders.

19th RESOLUTION • Authorization grantedto the Board of Directors to raise equitythrough the capitalization of reserves,earnings or additional paid-in capital

1. The Shareholders’ Meeting, having fulfilled the quorumand majority requirements pertaining to OrdinaryGeneral Meetings of Shareholders, and having read theReport of the Board of Directors, grants the Board ofDirectors all powers required to raise equity, in one ormore operations, by a maximum principal amount ofone hundred and fifty (150) million euros, through thecapitalization of all or a portion of reserves, earnings oradditional paid-in capital of any kind that may beadded to the share capital (to which shall be added theamount of reserves or securities required to protect therights of holders of securities with a claim to shares, asrequired by law). Equity capital may be raised byincreasing par value or by freely allotting shares, andmay be evidenced by the issuance of new shares, by anincrease in the par value of each outstanding share, orby a combination of the two.

2. The Shareholders’ Meeting hereby resolves that theodd lot of the allotment rights shall not be negotiableand that the corresponding shares (in the event of afree allotment of shares) shall be sold, with theproceeds of such sale being distributed among theholders of such rights within thirty days of the date ofregistration in their account of the whole number ofallotted shares.

3. The Shareholders’ Meeting authorizes the Board ofDirectors to use the aforementioned authorization todetermine the dates and terms of issues; to set issueprices and conditions; to determine the amounts ofeach issue; and, generally, to do whatever is necessaryto complete such issues, comply with relatedformalities, and amend the bylaws accordingly. TheBoard may, at its option, delegate such powers to itsChairman.

4. This authorization is granted to the Board of Directorsis valid for a period of twenty-six months as of the dateof this Meeting of the Shareholders. It replaces theauthorization granted by virtue of the sixteenthresolution voted by the Meeting of the Shareholders onJune 5, 2002.

20th RESOLUTION • Share capital reductionthrough the cancellation of shares

The Shareholders’ Meeting, provided the fourteenthresolution is adopted by this Meeting, after taking note ofthe Report of the Board of Directors, the IndependentAuditors’ Special Report, and the information noteregistered with the French stock exchange regulatoryauthority, renews the authorization granted to the Boardof Directors (by virtue of Article L.225-209 of the FrenchCompany Code) to cancel all or a portion of sharesacquired by the Company, up to a maximum of 10% ofthe equity capital, effective on the date of its decision per24-month period, and to reduce equity capital, in one orseveral operations, by charging the difference betweenthe purchase value of the cancelled shares and their parvalue to additional paid-in capital and reserves, includingto the legal reserve up to the limit of 10% of the resultingreduction in equity capital.

The Shareholders’ Meeting hereby authorizes the Boardof Directors to record the reduction in equity capital. TheBoard may, at its option, delegate such authority to theChairman and CEO, including all powers to accomplishoperations, formalities or declarations with a view tofinalizing the reduction in equity capital, which can becarried out in virtue of the present authorization, takenote of the aforementioned reductions in equity capital,and amend the bylaws accordingly.

This authorization is valid for a period of eighteen monthsfrom the date of this Meeting and replaces theauthorizations, given in the seventeenth resolution of theShareholders’ Meeting of June 3, 2003.

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21st RESOLUTION • Authorization grantedto the Board of Directors to issue new equityreserved for employees only

The Shareholders’ Meeting, having taken note of theReport of the Board of Directors and the IndependentAuditors’ Special Report, deliberating in accordance withthe provisions of Article L.225-138 of the FrenchCompany Code and Articles L.443-1 and following of theFrench Labor Code:

– Hereby authorizes the Board of Directors to issue newequity, in one or more offerings, within a period of fiveyears from the date of this Meeting of Shareholders, bya maximum principal amount of fifteen million euros(15,000,000), through the issue of new shares,tendered in return for cash payment, to be allotted toemployees of the Company or certain of its subsidiariesor inter-company partnerships which are affiliated to itas defined in Article L.233-16 of the French CompanyCode, provided that these employees are enrolled in anemployer-sponsored savings plan that meets therequirements of Articles L.443-1 and L.443-2 of theFrench Labor Code;

– resolves to cancel the preferential subscription rights toshares in favor of employees to whom the capitalincrease is reserved;

– grants the Board of Directors all powers required to:

a) decide, for each new equity issue, whetheremployees enrolled in employer-sponsored companysavings plans will acquire shares directly or via acompany mutual fund;

b) determine the date and the terms of such issues aswell as the period during which employees mayexercise their rights; set the issue price, withinapplicable legal limits; determine the opening andclosing dates of subscription periods and the datefrom which new shares shall earn dividends, evenretroactively; set periods of payment, within amaximum of three years, and, if applicable, set themaximum number of shares that may be subscribedper employee and per issue;

c) duly note the number of new shares subscribed andthe new total equity capital;

d) accomplish, directly or by proxy, all requiredtransactions and formalities;

e) amend the bylaws in accordance with the sharecapital increases;

f) use additional paid-in capital from capital increasesto pay for any fees incurred in respect of thesetransactions and to bring the legal reserve to therequired one-tenth of the new total equity capitalafter each capital increase.

This resolution cancels and replaces the authorizationgranted by the Shareholders meeting of December 17,2003, to the Board of Directors, pertaining to capitalincreases reserved to employees (eighth resolution).

22nd RESOLUTION • Authorization to complywith legal and other formalities

The Shareholders’ Meeting hereby grants full authority tothe bearer of a copy or an extract of these minutes for thepurpose of complying with all formal filing, publicationand other requirements.

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General information pertaining to GECINA

Corporate name: GECINARegistered office: 34, rue de la Fédération, PARIS (75015).

Legal formA form of public limited company or corporation (sociétéanonyme), governed by the Act of July 24, 1966, theDecree of March 23, 1967, and subsequent legislation.

Governing lawFrench law.

Tax status of a Listed Real Estate CompanyThe Company has elected for the new tax system,instituted by the French tax code for 2003, on December30, 2002, and applicable starting January 1, 2003, whichforesees the setting up of Listed Real Estate Companies(Sociétés d’Investissements Immobiliers Cotées, or SIIC). Itallows these companies, electing for this status, to benefitfrom tax exemptions relating to corporate income andcapital gains realised pursuant to their activities as realestate companies, on the condition that they pay an “exittax” calculated at a tax rate of 16.5% on unrealized capitalgains, booked at January 1 of the fiscal year of election,and subsequent to payment over a period of four years. Incounterpoint to this tax exemption, SIICs must distribute85% of their exempted current taxable income and 50%of capital gains, realised over the value serving as the basisfor calculating the “exit tax.”

Incorporation and duration of the CompanyThe Company was incorporated on February 23, 1959, for 99 years. The Company expires on February 22, 2058.

Corporate purpose (Article 3 of the bylaws)The Company’s purpose is to operate individual rentalproperties or groups of properties located in France orabroad. To this end, the Company may:• acquire undeveloped or previously developed land

through purchase, exchange, payment in kind or othertype of payment;

• build individual properties or blocks of properties;• acquire built properties or blocks of properties through

purchase, exchange, payment in kind or other type ofpayment;

• finance the acquisition and construction of properties;• rent, administer and manage properties, either on its

own behalf or on behalf of third-parties;• dispose of any real estate assets or titles;• acquire equity interests in any company or organization

involved in the exercise of activities related to itscorporate purpose, through any authorized means,including capital contribution and the subscription,

purchase or exchange of securities or voting rights;• more generally, to engage in all types of financial, real estate

and investment transactions directly or indirectly related tothis corporate purpose or in the furtherance thereof.

Board Chairmanship and general managementThe Board of Directors, meeting June 5, 2002, elected toseparate the functions of Chairman of the Board andChief Executive Office of the Company.

Company and Trade RegisterRCS PARIS B 592 014 476Identification number: SIRET 592 014 476 00143NAF code: 702 A.

Documents pertaining to the Company are availablefor consultation atRegistered offices.

Fiscal year:The fiscal year is 12 months, beginning on January 1st andending on December 31st.

Statutory distribution of profits(Article 23 of the bylaws)Net profits for the fiscal year are determined in accordancewith legal provisions and allocated by the Shareholders’Meeting, duly assembled for this purpose.

Net profits for the fiscal year and any retained earnings,less any prior losses and amounts appropriated to reservespursuant to legal provisions, constitute the distributable profit.

After having approved the financial statements and dulynoted the amount of distributable sums, the annualmeeting of the shareholders shall decide on theproportion to be distributed as a dividend.

The annual meeting of the shareholders called to approvethe financial statements may grant each shareholder theoption of receiving all or a portion of the dividend oradvances on distributed dividends, in cash or in ordinaryshares issued by the Company, at an issue price determinedin advance in accordance with applicable law. The offer ofpayment must be made simultaneously to all shareholders.

However, with the exception of a reduction of sharecapital, no distribution may be made to shareholders if theamount of net assets is less than the total amount ofshare capital plus legal and other reserves that areunavailable for distribution, or if such distribution wouldbring net assets to below this threshold.

The Shareholders’ Meeting shall determine the date, methodand place of dividend payout during the annual meeting.If this is not the case, such decisions shall fall to the Boardof Directors. Dividends must be made available for paymentwithin nine months following the end of the fiscal year.

General information pertaining to the issuer and its share capital

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The Shareholders’ Meeting determines the appropriationof the remainder, which may be carried forward asretained earnings or allocated to one or more reserves.

General meetings of shareholders(Article 20 of the bylaws)Shareholders are called to meetings and conduct businessin accordance with applicable laws and regulations.

Meetings are held at the registered office or any othervenue stated in the notice of meeting.

All shareholders have the right to attend meetings ofshareholders in person or by proxy, provided that theysubmit valid identification and proof of share ownership,by registering nominative shares, attesting to the non-transfer of bearer shares until the date of such meeting.These formalities must be accomplished at least five daysbefore the scheduled meeting date.

The voting rights attached to shares are directlyproportional to the share of equity capital owned andeach share entitles its holder to one vote.

Meetings of shareholders are chaired by the Chairman ofthe Board of Directors or, in his absence, by the Vice-Chairman or by a Director explicitly appointed by theBoard to fulfil this function. If the Board fails to appoint anacting Chairman, the Shareholders elect a Chairman forthe meeting.

Minutes of meetings of the shareholders are prepared andcopies of the minutes are certified and distributed inaccordance with legal provisions.

Disclosure of shareholding thresholds (Article 9 of the bylaws)In addition to legally defined thresholds in force,shareholders are required to disclose shareholdings thatexceed additional thresholds of 2% of share capital orvoting rights or any multiple of this percentage, withinfifteen days of having exceeded one of these thresholds.Failure to disclose the required information shall entail theforfeiture of voting rights with respect to any sharesexceeding the fraction of shareholding which should havebeen disclosed, in accordance with the terms andconditions set forth in law, provided that such a requestby one or more shareholders together owning 5% of theshare capital is recorded in the minutes to the meeting ofthe shareholders.

Identity of shareholders (Article 7 of the bylaws)Shares are obligatorily registered shares. They entitle thebearer to inscription in due form under the conditions andaccording to the practices, foreseen by the legislation andregulations in force.

General information pertaining to the share capital of the Company

Procedures for modifying share capital and rightsattached to various types of sharesThe Extraordinary Meeting of Shareholders may grant theBoard of Directors the right to modify the share capitaland the number of shares, notably in the event that sharecapital is raised or reduced.

Share capitalAt December 31, 2003, share capital totalled€435,286,845, divided into 29,019,123 fully paid-upshares, all of the same type, with a par value of €15 each.Effective January 1, 2004, the par value of shares was split2-for-1 (from €15 to €7.5), the number of sharesincreasing to 58,038,246.

Amount of unused authorizations to issue newequity1. The Extraordinary and Ordinary General Meeting heldon June 3, 2003, authorized the Board of Directors toissue Company shares or securities in any form, in one ormore offerings, in France or abroad, in euros or foreigncurrencies, in the amounts and on the dates determinedby the Board. These securities may be issued with a claimto shares of the Company, immediately or at maturity, atany time or on a determined date, and may consist ofbonds, be combined with the issue of bonds, or consist ofinstruments enabling the issue of bonds. The amount ofnew equity issued, immediately or at maturity, by virtue ofthe aforementioned authorization may not exceed theprincipal amount of one hundred and fifty million euros,to which shall be added, as required, the principal amountof additional shares issued in order to protect the rights ofholders of securities with a claim to shares of theCompany, in accordance with applicable law.

The principal amount of debt securities issued by virtue ofthe aforementioned authorization may not exceed onebillion euros on the date of issue. These securities may beissued with pre-emptive subscription rights maintained orwaived.

These unused authorizations remained valid for a periodof twenty-six months, as of the Shareholders’ Meeting ofJune 3, 2003.

They are being resubmitted to the Shareholders forapproval at the Extraordinary and Ordinary Meeting of theShareholders on June 2, 2004 (17th and 18th resolutions),for a maximum amount of one hundred and fifty millioneuros for capital increases, and €1.5 billion forborrowings.

These authorizations replace those granted by the Shareholders at their meetings held on June 3, 2003. The Board ofDirectors requests that the Shareholders’ Meeting authorizes it to issue new equity and thereby increase the Company’sshare capital:• through the capitalization of reserves, earnings or additional paid-in capital, by a maximum amount of one hundred

and fifty million euros;• through the issue of a maximum of one million shares reserved for employees enrolled in employer sponsored savings

plan, by a maximum principal amount of fifteen million euros.

These authorizations are valid, in the first instance for a period of twenty-six months, and in the second, for a period offive years, as of the date of the Meeting.

They were again submitted for approval of the Combined General Shareholders’ Meeting of June 2, 2004 (19th and 21st resolutions). These authorizations replace those given by the Shareholders’ Meeting of June 3, 2003.

2. At the meeting of the shareholders held on June 6, 2001, the Shareholders authorized the Board of Directors to grantemployees, directors and officers of the Company and Group companies stock subscription and purchase options, limitedto 2.5% of the number of shares constituting the fully diluted share capital.

The Board set up a stock purchase option plan in 2003 involving 137,500 shares, which was described in a special reportto the Extraordinary and Ordinary Meeting of Shareholders held on June 2, 2004. Taking into account the 55,000 stockpurchase options granted in 2001, and the 66,500 granted in 2002, a total of 259,000 shares have been grantedto directors, officers and employees of the Company.

A new authorization has been submitted for the approval of the Mixed Shareholders’ Meeting of June 2, 2004(16th resolution).

Relating to this authorization, no share subscriptions have been granted.

Securities with a claim to share capital• The Company has issued bonds that may be converted into securities with a claim to share capital.ISSUE DATE 10/03/1997 (1) 11/15/2002 07/09/1997 (2)

Issue amount €133,572,231 €289,651,930.81 €304,897,729.60Issue price €91.47 €78.97 €78.97Number of bonds issued 1,460,294 3,667,873 3,861,000Interest rate 3.25% 3.25% 3.25%Maturity date 01/01/2004 01/01/2006 01/01/2006Redemption price €101.88 €93.15 €93.15Conversion characteristics 1 share for 18 shares for 18 shares for

2 bonds 10 bonds 10 bonds

Situation at 12/31/2003Bonds remaining in circulation 13,167 3,665,263 168,222Bonds presented for conversion 1,447,127 2,610 24,905Total new shares possible following conversion 26,334 6,597,473 302,799

(1) These bonds, which fall due on January 1, 2004, were withdrawn from the French premier marché on January 2, 2004.(2) Transfer of commitments, relating to convertibles bonds issued by SIMCO, approved by the Combined General

Shareholders’ Meeting of December 17, 2003 (5th resolution).

• Share subscription options

Transfer of commitments, relating to share subscription and purchase options, attributed by SIMCO

The Combined General Shareholders’ Meeting of December 17, 2003 (6th resolution), approved the transfer ofcommitments made by SIMCO, resulting in 218,000 share subscription options and 96,000 share purchase options beingattributed. The shares issued following the exercise of share subscription options, occurring after the achievement of themerger, will be GECINA shares, in effect replacing SIMCO shares.

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At December 31, 2003, given the exchange rate agreed as part of the merger project, that is 9/10, the numberof potential shares amounts to 232,020 (464,040 shares after the two-for-one stock split on January 2, 2004).

• The Company has not issued founder’s shares or voting right certificates.

• The Company has not issued any other securities with a claim to its share capital.

Changes in share capital since January 1, 1999SHARE ISSUE OR MERGE

NUMBER CAPITAL PREMIUMYEAR OPERATION OF SHARES (IN FRF) (IN FRF)

1999 Share capital at January 1, 1999 12,464,793 1,246,479,300Merger with ARTEMIS IMMOBILIER 950,025 95,002,500 180,171,775Merger with SEFIMEG 3,712,712 371,271,200 777,008,265Merger with IMMOBILIERE BATIBAIL 2,113,140 211,314,000 338,462,215Conversion of 146,175 ex-GFC 3.25% bonds 146,175 14,617,500 73,087,500Conversion of 13 ex-SEFIMEG 3.75% bonds 8 800 6,480Exercise of 5,741 stock options 5,741 574,100 1,676,372Cancellation of 156,269 treasury shares –156,269 –15,626,900 –57,092,003Share capital at December 31, 1999 19,236,325 1,923,632,500

2000 Share capital at January 1, 2000 19,236,325 1,923,632,500Conversion of 1,551 ex-GFC 3.25% bonds 1,551 155,100 775,500Share capital at December 31, 2000 19,237,876 1,923,787,600

SHARE ISSUE OR MERGENUMBER CAPITAL PREMIUM

YEAR OPERATION OF SHARES (IN €) (IN €)

2001 Share capital at January 1, 2001 (par value: €15) 19,237,876 288,568,140Merger with INVESTIBAIL 2 30 39Conversion of 44 ex-GFC 3.25% bonds 44 660 3,365Conversion of 208 ex-SEFIMEG 3.75% bonds 128 1,920 990Share capital at December 31, 2001 19,238,050 288,570,750

2002 Share capital at January 1, 2002 19,238,050 288,570,750Public Exchange Offer for SIMCO 7,808,046 117,120,690 628,981,500Conversion of 9 ex-GFC 3.25% bonds 9 135 823Conversion of 338 ex-SEFIMEG 3.75% bonds 208 3,120 28,855Conversion of 71 November 2002 3.25% bonds 63 945 6,242Share capital at December 31, 2002 27,046,376 405,695,640

2003 Share capital at January 1, 2003 27,046,376 405,695,640Merger with SIMCO 671,148 10,067,220 67,015,561Conversion of 1,299,315 ex-GFC 3.25% bonds 1,299,315 19,489,725 99,357,852Conversion of 2,539 November 2002 3.25% bonds 2,284 34,260 188,850Share capital at December 31, 2003 29,019,123 435,286,845

Analysis of capital and voting rightsAt present, there are no shares that entitle their holder to double voting right. However, the number of voting rights must be adjusted to take into account treasury shares, which do not grant voting rights. To the best of the Company’sknowledge, the following table summarizes its capital ownership and voting rights at January 31, 2004:

SHARE CAPITAL VOTING RIGHTS

SHAREHOLDER NUMBER % NUMBER %

AGF Group 13,897,490 23.95 13,897,490 24.86Azur-GMF Group 7,919,234 13.64 7,919,234 14.16Crédit Agricole Group-PREDICA 5,638,720 9.72 5,638,720 10.09Other institutional shareholders resident in France 12,445,138 21.44 12,445,138 22.26Non-resident shareholders 10,336,587 17.81 10,336,587 18.49Individual shareholders 5,672,868 9.77 5,672,868 10.15Treasury shares 2,128,209 3.67 – –

TOTAL 58,038,246 100.00% 55,910,037 100.00%

To the best of the Company’s knowledge, no other shareholders own more than 5% of the Company’s share capital orvoting rights and no shareholders’ agreements exist.

At January 31, 2004, the percentages in equity capital and voting rights, held by all members of top and executivemanagement are, respectively, 17.94% and 18.62%.

Pursuant to the SIMCO-sponsored employee savings plan, the SIMCO shares held as part of the plan were exchanged, atthe time of the merger, for GECINA shares, according to the same conditions as for other SIMCO shareholders, that is tosay by application of the same share exchange ratio for SIMCO as for exchange relating to the merger. Group employeesheld at December 31, 2003, directly 67,345 GECINA shares, that is 0.23% of its share capital.

To the best of the Company’s knowledge, there are no significant pledges on “pure” registered GECINA shares. (3,248 shares before the par value stock split).

The Company has not pledged its treasury stock.

Three-year summary of changes in share ownershipThe Company’s share ownership, noting that the significant changes recorded in 2002 over 2001 are the consequence ofthe public offering on SIMCO, has evolved in the following manner:

2001 2002 AT 01/31/04(1) (2) (3)

AGF Group 32.3% 23.1% 24.0%Azur-GMF Group 22.8% 18.6% 13.6%BATIPART 2.4% 1.0%AXA 7.5%Crédit Agricole Group-PREDICA 6.8% 9.7%Crédit Foncier de France 4.1%Other institutional shareholders resident in France 23.5% 17.4% 21.4%Non-resident shareholders 5.4% 9.3% 17.8%Individual shareholders 9.2% 10.1% 9.8%Treasury shares 4.4% 3.1% 3.7%

100.0% 100.0% 100.0%

(1) Source: Identifiable bearer shares (TPI) inquiry, December 2001.(2) Source: Identifiable bearer shares (TPI) inquiry, December 2002.(3) According to a file of registered shareholders.

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Transactions carried out by the Company on its own sharesThe meeting of the Shareholders held on June 3, 2003, renewed the authorization granted to the Company to purchaseits own shares on the stock market for a period of eighteen months. The maximum purchase price was set at €135 andthe minimum selling price at €75 on the basis of a share par value of €15. The maximum number of shares that may beowned is 10% of the total equity capital. This authorization was granted in connection with the repurchase programdescribed in the condensed registration statement that received Visa No. 03-420 of the Commission des Opérations deBourse (the French stock exchange regulatory authority) on May 14, 2003.

The renewal of this authorization will be submitted for the approval of the Combined General Shareholders’ Meeting ofJune 2, 2004 (14th resolution).

During the fiscal year 2003, the Company repurchased 147,460 shares as treasury stock.

At December 31, 2003, the Company owned 924,541 treasury shares (before the two-for-one stock split), that is 3.19%of the share capital.

Dividends

The date and place of dividend payout is determined by the Shareholders meeting or, failing that, by the Board ofDirectors, within nine months following the end of the fiscal year. In the event that shareholders are offered dividendpayment in the form of Company shares, this offer must be made within three months of the date of the Annual Meeting of Shareholders.

DISTRIBUTION PER SHARE

YEAR ENDED DISTRIBUTION NUMBER NET DIVIDEND TAX CREDIT TOTALOF SHARES PER SHARE DISTRIBUTION

1999 FRF401,258,825 38,472,650 FRF10.43 FRF5.22 FRF15.652000 €64,254,506 38,475,752 €1.67 €0.84 €2.512001 €69,256,980 38,476,100 €1.80 €0.90 €2.702002 €108,185,504 54,092,752 €2.00 €1.00 €3.002003 (1)

€37,724,860 58,038,246 €0.65 – €0.652003 (2)

€104,468,843 58,038,246 €1.80 €0.90 €2.70

(Data adjusted for the two-for-one stock split on January 2, 2004)

Dividends not claimed within 5 years become the property of the French Tax Office (Direction Générale des Impôts).

(1) Proposal submitted to the approval of the Meeting of the Shareholders held on June 2, 2004 (4th resolution), relatingto the SIIC tax system.

(2) Proposal submitted to the approval of the Meeting of the Shareholders held on June 2, 2004 (4th resolution) relating tocommon law tax system.

Market in company securities

Place of listing GECINA shares are quoted on the Premier Marché of Euronext Paris Stock Exchange, under the ISIN code number,FR0010040865. Transactions are eligible for inclusion in the differed settlement system (Service à Règlement Différé - SRD),and the security is part of the indexes, SBF120, SBF80 and Euronext 100.

Footsie Economic Sector: 862 (Real Estate Investment and Promotion).

Convertible bonds, issued in November 2002, are inscribed in the Euronext Paris bulletin, under the heading, GECINA3.25% 02 CV (FR0000181265 – YGC).

Former-SIMCO convertible bonds, issued in July 1997, are inscribed in the Euronext Paris bulletin, under the new heading,GECINA 3.25% 06 CV (FR0000094997 – YSC).

Former-GFC convertible bonds, issued on October 3, 1997, were inscribed until December 31, 2003, in the Euronext Parisbulletin, under the heading, GFC 3.25% 04 CV (FR0000085045 – YGE).

Other places of listing

ISSUE DATE 02/19/2003 10/17/2003

Issue amount €600 million €250 millionIssue price 99.334% up to an amount of €500 million 99.835%

99.049% up to an amount of €100 millionMaturity date February 19, 2010 October 17, 2007Interest rate 4.875% 3.625%ISIN Code FR0000472441 FR0010021220Place of listing Luxemburg Stock Exchange Luxemburg Stock Exchange

Trading volume in number of shares and amount of equity traded

• Shares (code ISIN FR0010040865).

Trading volume and change in price

AVERAGENUMBER AMOUNT

OF SHARES TRADED FOR PRICE PRICETRADED THE MONTH (HIGH) (LOW)

MONTH FOR THE MONTH (IN € MILLIONS) (IN €) (IN €)

October 2002 996,048 45.83 48.15 42.80November 2002 2,057,882 99.96 50.95 45.55December 2002 894,348 44.68 50.50 47.00January 2003 1,054,598 53.32 51.05 49.53February 2003 1,663,294 83.16 50.65 49.50March 2003 1,147,880 56.37 50.15 48.53April 2003 1,358,812 66.41 50.45 48.25May 2003 6,444,330 331.27 53.10 50.05June 2003 4,839,194 249.89 52.95 49.95July 2003 4,219,820 212.52 51.70 49.30August 2003 3,116,910 160.6 51.85 50.95September 2003 2,348,136 122.96 53.50 51.35October 2003 1,361,704 73.51 54.95 52.90November 2003 2,549,516 143.23 57.50 53.65December 2003 1,681,606 97.21 58.90 57.00January 2004 1,839,883 108.81 61.00 58.00February 2004 3,355,947 201.54 61.65 58.20March 2004 1,927,606 119.55 64.30 60.25

(Historical data adjusted for the two-for-one stock split on January 2, 2004)

Source: Euronext

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Trading volume and change in price over the last 5 years:

NUMBER OF NUMBER OF DAYS PRICE PRICE PRICESHARES STOCK MARKET (HIGH) (LOW) (CLOSE)

YEAR TRADED (IN €) (IN €) (IN €)

1999 5,707,354 254 58.85 49.15 56.002000 10,566,352 253 52.95 47.25 51.002001 9,217,858 253 53.50 40.00 45.752002 9,565,596 255 52.00 42.80 50.502003 31,682,926 255 58.90 48.25 58.30

(Historical data adjusted for the two-for-one stock split on January 2, 2004)

Source: Euronext

• Bonds convertible into shares

1. Former-GFC 3.25% October 1997 bonds convertible into shares (code ISIN FR0000085045)

Trading volume and change in priceAVERAGE

NUMBER AMOUNTOF BONDS TRADED FOR PRICE PRICE

TRADED FOR THE MONTH (HIGH) (LOW)MONTH THE MONTH (IN € MILLIONS) (IN €) (IN €)

July 2002 604 0.06 104.90 101.00August 2002 735 0.08 104.50 101.00September 2002 517 0.05 104.80 99.10October 2002 289 0.03 104.00 99.00November 2002 588 0.06 110.00 100.05December 2002 484 0.05 108.20 102.50January 2003 119 0.01 105.00 102.25February 2003 1,396 0.14 105.00 102.25March 2003 235 0.02 103.80 100.20April 2003 151 0.02 103.60 102.35May 2003 46 0.00 105.00 105.00June 2003 47 0.00 109.80 102.90July 2003 5,025 0.53 106.50 103.01August 2003 64 0.01 106.50 103.10September 2003 527 0.06 107.00 103.65October 2003 264 0.03 109.50 104.10November 2003 2,035 0.23 115.00 109.00December 2003 47,880 5.48 116.00 102.96

Source: Euronext

2. 3.25% November 2002 bonds convertible into shares (Code ISIN FR0000181265)

Trading volume and change in priceAVERAGEAMOUNT

NUMBER OF BONDS TRADED FOR PRICE PRICETRADED FOR THE MONTH (HIGH) (LOW)

MONTH THE MONTH (IN € MILLIONS) (IN €) (IN €)

November 2002 21,214 1.95 94.00 90.50December 2002 68,737 6.46 95.00 92.00January 2003 30,933 2.87 93.25 91.10February 2003 26,996 2.50 93.46 92.30March 2003 4,297 0.40 94.00 90.00April 2003 14,297 1.35 95.70 93.00May 2003 18,267 1.78 98.30 93.50June 2003 8,095 0.79 98.50 94.50July 2003 969 0.09 98.25 96.80August 2003 1,112 0.11 97.50 90.00September 2003 102,025 10.07 98.20 90.10October 2003 2,638 0.26 107.00 98.80November 2003 12,063 1.23 104.20 97.45December 2003 13,349 1.44 114.00 97.50January 2004 150,743 15.58 106.00 99.00February 2004 50,269 5.12 103.00 100.00March 2004 656 0.07 110.00 103.00

Source: Euronext

3. Former-SIMCO 3.25% July 1997 bonds convertible into shares (code ISIN FR0000094997)

Trading volume and change in priceAVERAGEAMOUNT

NUMBER OF BONDS TRADED FOR PRICE PRICETRADED FOR THE MONTH (HIGH) (LOW)

MONTH THE MONTH (IN € MILLIONS) (IN €) (IN €)

October 2002 14,687 1.28 90.80 80.80November 2002 440 0.04 90.80 87.50December 2002 3,487 0.31 96.90 88.10January 2003 266 0.02 90.00 90.00February 2003 969 0.08 90.00 85.00March 2003 783 0.07 91.00 77.00April 2003 1,417 0.13 95.35 90.00May 2003 493 0.04 93.50 88.10June 2003 271 0.03 95.50 94.50July 2003 347 0.03 94.00 93.50August 2003 360 0.03 93.70 93.65September 2003 133 0.01 95.10 93.65October 2003 2,046 0.20 97.80 94.50November 2003 454 0.04 100.10 97.05December 2003 719 0.07 103.00 99.00January 2004 727 0.07 103.00 97.50February 2004 3,021 0.30 112.00 97.00March 2004 92 0.01 105.00 103.00

Source: Euronext

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Special report submitted by the Board of Directorsto the Combined Ordinary and ExtraordinaryShareholders' Meeting of June 2, 2004

Pursuant to the authorization granted by the twenty-eighth resolution of the Shareholders' Meeting held on June 6, 2001,the Board of Directors approved a stock option subscription and/or purchase plan whose purpose is to associate moreclosely GECINA’s executives and senior managers to its development. During fiscal year 2003, the Board of Directorsgranted 137,500 stock purchase options to the 2 officers and to 41 employees, but none of these options was exercised.Furthermore, no share subscription option was granted.

The table below indicates, under Article L. 225-184 of the French Commercial Code, the number, price and maturity dateof the options granted by GECINA to its officers and to each of the ten employees benefiting from the largest number ofoptions.

The table also indicates the nature, mode of exercise of the options as well as the offered discount percentage.

PLANS GRANTEE DATE START OPTION DISCOUNT NUMBER NUMBER PRICE BALANCE TO EXPIRATIONOF THE DATE OF STRIKE OPTIONS SHARES SHARES BE EXERCISED DATE

AUTHORIZING EXERCISE PRICE GRANTED PURCHASED PURCHASED ATGM PERIOD IN 2003 IN 2003 IN 2003 12/31/2003

2003 purchaseoption plan 1. Directors and Officers

A. Jeancourt-Galignani 6/6/2001 11/25/2003 €104.76 5% 15,000 – – 15,000 11/24/2011S. Grzybowski 6/6/2001 11/25/2003 €104.76 5% 15,000 – – 15,000 11/24/2011

Sub-total 30,000 – – 30,000

2. EmployeesJ.-P. Sorand 6/6/2001 11/25/2003 €104.76 5% 10,000 – – 10,000 11/24/2011

M. Gay 6/6/2001 11/25/2003 €104.76 5% 8,000 – – 8,000 11/24/2011M. Brunel 6/6/2001 11/25/2003 €104.76 5% 7,000 – – 7,000 11/24/2011

Y. Dieulesaint 6/6/2001 11/25/2003 €104.76 5% 7,000 – – 7,000 11/24/2011A. Lajou 6/6/2001 11/25/2003 €104.76 5% 7,000 – – 7,000 11/24/2011D. Outin 6/6/2001 11/25/2003 €104.76 5% 6,000 – – 6,000 11/24/2011F. Buchet 6/6/2001 11/25/2003 €104.76 5% 5,000 – – 5,000 11/24/2011

M. Gaillard 6/6/2001 11/25/2003 €104.76 5% 5,000 – – 5,000 11/24/2011F. Vasseur 6/6/2001 11/25/2003 €104.76 5% 4,500 – – 4,500 11/24/2011

J.-A. Daniel 6/6/2001 11/25/2003 €104.76 5% 3,500 – – 3,500 11/24/2011

Sub-total 63,000 63,000

TOTAL 93,000 93,000

Because of the division of the par value of the shares starting from January 1, 2004, the number of granted options mustbe doubled as from that date, the exercise price being reduced to €52.38.

It is also recalled that the Extraordinary Shareholders' Meeting of December 17, 2003, approved in its sixth resolution thetaking of commitments by SIMCO towards the beneficiaries of 168,300 share subscription options and 89,500 sharepurchase options. Because of the exchange ratio and two-for-one split of the par value of the GECINA share,302,940 shares are likely to be issued with respect to the stock option subscription and 161,000 shares are likely to bededucted from the treasury shares held by GECINA with respect to the share purchase options. It is indicated that nooption was granted by SIMCO in 2003.

The table shown in note 6.7 to the corporate financial statements summarises current plans.

Concerning the employee stock option subscription and/or purchase plan

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The Financial Security Law of August 1, 2003, imposed oncompanies new disclosure obligations as regards corporategovernance and internal control. The Chairman must, inpursuance of provisions of law, report to the shareholders,in a report attached to the Board of Directors’ report onthe terms of implementation and organisation of its workand on the internal control procedures set up by theCompany. That is the purpose of this report.

I • Terms of implementation and organisation of the Board of Directors’ work

The governance rules defined by the GECINA Board ofDirectors are in line with those contained in the reportpublished in October 2003 by AFEP and MEDEF.

1 • Mode of organisation and proceedings of the Board

The Board of Directors of GECINA is comprised of 14 members.

The Board’s internal rules were approved by the Board on June 5, 2002, and updated on January 15, 2003, and April 20, 2004, and supplements the rules containedin the articles of association concerning the proceedingsof the Board.

Meetings of the Board of Directors

The Board of Directors meets at least four times a yearand as often as necessary upon being convened by theChairman of the Board of Directors or at the request of atleast one third of the Directors if the Board has not metfor more than two months. Decisions are made by amajority of the votes of members present or represented.In case of a tie, the Chairman has a casting vote.

Shares held

During his term of office, each Director must hold400 shares having a par value of €7.50.Each Director reports the securities transactions he hascarried out whether directly or through reports at the endof each half-year, in accordance with a procedure definedby GECINA, on his own behalf or on behalf of a thirdparty pursuant to an agency agreement outside theframework of a collective management service on behalfof third parties. This procedure also applies to transactionsmade on the accounts of the Director concerned by hisspouse (provided that such spouse is not legally separated

from such Director) or by any person holding a power ofattorney.This reporting mechanism also applies to the ChiefExecutive Officer.

Director compensation

Directors fees are allocated to each Director. Each Directoris granted a fixed compensation of €5,000. In addition, avariable amount of €1,500 per meeting is paid individuallyto each Director depending on his record of attendance ofthe Board’s meetings.

As regards specialised committees, each Chairmanreceives, as Directors fees, a fixed individual amount of €3,000. A variable amount of €1,500 per meeting is paid individually to each member depending on hisrecord of attendance of the meetings.

Independent Directors

During its meeting held on April 20, 2004, the Board ofDirectors reviewed the findings of the Appointments andCompensation Committee concerning the characterisationof independent Directors. The Committee endorsed theDirector independence principles contained in thecorporate governance recommendations circulated byMEDEF and AFEP in October 2003:• not to be an employee or Director of the Company and

not to have been an employee of the Company or aDirector during the last five years,

• not to be an officer of any company in which theCompany directly or indirectly holds any directorship, orin which an employee or officer of the Company hasbeen appointed as such (presently or in the last fiveyears) holds an office as a Director,

• not to be a client, supplier, investment banker orcommercial banker: – having material relationships with the Company or

with the Group – or for which the Company or the Group represents a

significant share of total operational volume, • not to have any close family ties with a corporate

officer,• not to have been an auditor of the company during the

last five years,• not to have been a Director of the Company for more

than twelve years,• Directors representing major shareholders of the

company are deemed independent when they do notparticipate in the Company’s control and theirshareholding percentage is less than 10%; above this10% threshold, the Board, acting on the basis of areport of the Appointments and Compensation

Report submitted by the Chairman on corporate governance and internal control

155

Committee, must decide by taking into account thecomposition of the share capital and the existence ofany potential conflicts of interests.

On the basis of these recommendations, the Board ofDirectors determined that six Directors were notindependent: • Laurent Mignon and Bertrand Letamendia because of

the positions they hold within Assurances Générales deFrance, an entity into whose accounts GECINA isconsolidated;

• Antoine Jeancourt-Galignani, Michel Pariat, CharlesRuggieri and Jean-Paul Sorand, because of their statusas officers of the Group during the last five years.

The Board thus appointed determined that eight Directorswere independent:• Anne-Marie de Chalambert, Françoise Monod,

Christian de Gournay, Bertrand de Feydeau and PhilippeGeslin;

• Azur Vie, represented by Bruno Legros, GMF Vierepresented by Sophie Beuvaden, and PREDICA,represented by Jean-Pierre Bobillot.

Role of the Board

The Board of Directors is responsible for determining theCompany’s operational policies. The Board of Directorsmay review any matter related to the Company’smanagement. The Board of Directors is regularly informedof the Group’s operations and assets and of its financialposition and cash management. The Board of Directors isalso informed of material commitments made by theGroup.

The Board of Directors must approve any transactionentailing a strategic change in the development of theCompany’s operations.

As part of the approvals granted by the GeneralShareholders' Meeting, the Board of Directors decideson any transaction bringing about a change to the sharecapital or the issuance of new shares by the Company.

2 • Organisation of work for preparingthe meetings of the Board

In order to improve the quality of the Board’s work andsupport the Board in the discharge of its duties, theGECINA Board of Directors formed during its meeting ofJanuary 15, 2003, three specialised committees, i.e. theAppointments and Compensation Committee, the AuditCommittee, and the Quality and Sustainable DevelopmentCommittee.

The internal regulations of each of these Committeesdetermine its mode of operation and mandate.

Appointments and Compensation Committee

This Committee is comprised of five Directors:

Laurent Mignon, Chairman, Sophie Beuvaden, Christiande Gournay, Françoise Monod and Antoine Jeancourt-Galignani. The Chairman of the Board is not a member ofthis Committee when it meets in order to reviewcompensation issues.

The Committee is responsible for making proposals orgiving opinions to the Board for the election of corporateofficers. The Committee is also responsible for identifyingindependent Directors, as the majority of its membersmust consist of independent Directors.

When meeting in order to review compensation issuesonly, the Compensation Committee is responsible formaking proposals to the Board as regards thecompensation of corporate officers, for giving an opinionon the mode of compensation of members of the Group’ssenior management, and for making any proposalconcerning stock option plans.

The Committee met on October 24, 2003, in order toreview the management succession plan, initiate a reviewof the mode of compensation of the members of theExecutive Committee and discuss the compensation of thetwo corporate officers in order to adapt the same to theGroup’s new dimension and to new market conditions.The Committee also took a position on a proposal toaward a new fraction of the share option plan.The Committee’s attendance rate was 100%.

Audit Committee

This Committee is comprised of four Directors, i.e.Philippe Geslin, Chairman, Bertrand Letamendia, Jean-Pierre Bobillot and Bruno Legros. At least two thirds of itsmembers must be independent Directors. The Chairmanof the Committee is an independent Director.

The Committee is responsible for reviewing financialstatements and maintaining a direct dialogue with theCompany’s financial managers and the IndependentAuditors, for giving an opinion on any issue concerningthe Independent Auditors and reviewing the operation ofthe Group’s internal control.

The Committee met three times during fiscal year 2003.The main specific topics covered were as follows: • on February 19, 2003: analysis of the financial

statements for fiscal year 2002, opinion on the renewalof the term of office of an Independent Auditor, reviewof the operation of the internal audit function;

• on June 3, 2003: review of the possibility of extendingto SIMCO the cash management agreement existingwithin the GECINA Group;

• on September 2, 2003: review of the contemplatedmerger between GECINA and SIMCO andcontemplated election for the SIIC system, and reviewof the financial statements as of June 30, 2003.

In 2003, the overall attendance rate at the meetings ofthe Committee was 100%.

Quality and Sustainable Development Committee

This Committee is comprised of four Directors, i.e. Charles Ruggieri, Chairman, Anne-Marie de Chalambert,Bertrand de Feydeau and Jean-Paul Sorand, reporter.

The Committee is responsible for listing the maincategories of risks threatening GECINA and monitoringthe action programme prepared in order to address theserisks, assess the quality of service offered to tenants andexamine the Group’s contribution to sustainabledevelopment.

Depending on the matters reviewed, the Committee callswhere applicable on the Risk Manager or on otheroperational managers of the Group.

The Committee met five times in 2003. The main specificsubjects covered were as follows: • March 13, 2003: determination of the objectives of the

Committee’s work on the basis of three focuses:assessment of the quality of service offered to tenantsof the residential sector, main categories of risks andmonitoring of steps taken in order to assess these risks,and sustainable development;

• April 8, 2003: review of the main risks identified by theGroup and measures taken in order to handle them;

• June 18, 2003: analysis of the Group’s insuranceprogramme;

• September 24, 2003: safety of the buildings;• November 12, 2003: first discussions and 2004-2005

action plan for the quality of services offered to tenantsof the residential sector.

In 2003, the overall attendance rate at the meetings ofthe Committee was equal to 90%.

3 • Measures taken by the Board during the fiscal year

The Board of Directors met eight times during fiscal year2003. During each meeting, a report on the activity of theGroup (rental operations, disposals and funding inparticular) was presented. Also, a summary of the progressof the procedure for the merger between GECINA andSIMCO was submitted by the Chief Executive Officerduring each meeting of the Board, the topics covered

including in particular the organization of the divisions,the unification of information systems, the harmonizationof employment status, and the grouping of teams on asingle site.

The Board was informed several times of the provisions ofthe tax system applicable to SIICs and deliberated on themerits of such system and its consequences for GECINAbefore deciding during its meeting of September 9, 2003,to file the corresponding election.

During these meetings, the main specific topics coveredwere as follows: • January 15, 2003: organisation and internal regulations

of the Board of Directors; possibilities offered by the taxbill creating the system of Sociétés d’InvestissementsImmobiliers Cotées (SIIC, or listed property investmentcompanies); authorization to issue bonds in a maximumamount of €750 million; 2003 budget.

• February 25, 2003: review of the financial statementsfor fiscal year 2002; contemplated dividend distributionand decision to convene a Shareholders' Meeting.

• April 16, 2003: consequences for the Group of apossible election for the SIIC system; preparatory workfor the GECINA - SIMCO contemplated merger;decision to entrust to the SIMCO securities departmentthe financial unit responsible for the GECINA securities.

• June 3, 2003 (meeting held before the Shareholders'Meeting): answer given to the written questionssubmitted by a shareholder.

• June 3, 2003 (meeting held after the Shareholders'Meeting): renewal of Antoine Jeancourt-Galignani asChairman of the Board; authorizations to implement anEMTN programme in an amount of €1 billion and acommercial paper programme in an amount of €300million.

• September 9, 2003: election made by GECINA and itseligible subsidiaries for the SIIC system; review of theconsolidated financial statements as of June 30, 2003;net income forecast for fiscal year 2003; review andapproval of the contemplated merger between GECINAand SIMCO; decision to convene the General Meetingsof shareholders and bondholders; transfer of theregistered office to 34 rue de la Fédération Paris (75015).

• November 25, 2003: discussion on the Company’sinvestment strategy; 2004 budget; report submitted bythe Appointments and Compensation Committee.

• December 17, 2003: adjustment of the resolutionsconcerning the GECINA - SIMCO merger submitted tothe Shareholders' Meeting of the same day, followingchanges made to the SIMCO share capital since June 30, 2003.

The overall attendance rate at the meetings of the Boardwas equal to 90.2%.

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II • Internal controlThe internal control mechanism existing within GECINAserves the following purposes:• to ensure that management decisions and the conduct

of operations are in line with the framework of thepolicies approved for the company by corporate bodies,in accordance with applicable laws and regulations andwith the company’s internal rules.

• to ensure that the accounting, financial andmanagement information fairly reflects the Company’soperations and position.

1 • Organisation and Management of the Company

Management of the Company

After harmonizing its articles of association with theprovisions of the law of May 15, 2001, on New EconomicRegulations, GECINA made an election in order toseparate the offices of Chairman of the Board of Directorsand that of Chief Executive Officer. By dissociating theoperational functions from the Board’s functions which areto manage the company and supervise the properfunctioning of the company’s bodies, this organisationalmode contributes to a strengthening of the control of the Company’s affairs.

Upon being appointed by the Board, the Chief ExecutiveOfficer was entrusted with the broadest powers in hiscapacity as the Company’s legal representative. Of course,the exercise of the Chief Executive Officer’s office must bein line with the operational rules and policies defined bythe Board. Also, certain decisions must form part of aprior consultation with the Chairman, representing theBoard of Directors and the Chief Executive Officer. This isthe case as regards the appointment and compensation ofmembers of the Executive Committee, acquisitions anddisposals of property in an amount exceeding €15 million,and banking and financial transactions in an amountexceeding €15 million.

Organisation of the Company

The new organisation set up at the end of 2003 inconnection with the merger between GECINA and SIMCOis in line with the principles introduced within GECINA in2002. This creation is based on the formation of assetmanagement entities grouping properties per geographicareas, structured in profit centres and covering allfunctions necessary for the management of the buildings(customer relations, administrative, technical andaccounting management). This integrated organisation is

structured around each building and makes it possible todefine responsibilities more closely and increaseresponsiveness to events.

These asset management entities are grouped into threedivisions forming activity sectors, which are clearlyidentified and separated for operational purposes:Commercial Property Division, Residential PropertyDivision, and Lyons Regional Division

Marketing activities are developed through a specialisedsubsidiary, LOCARE, which trades on the rental and salemarket, whether for the Group or for external principals.

The Group’s other divisions are entrusted withmanagement development functions (asset managementand major works), human resources management andadministrative and financial management are organised inaccordance with the typical pattern specific to suchstructures.

Management Committees

GECINA Group Management relies on the Executive, AssetManagement, Financial and Results Committees.

• The Group’s management structure is supplemented bythe Executive Committee that meets on a weekly basisand includes, in addition to the Chairman and the ChiefExecutive Officer, the managers of seven divisions. TheCommittee is a collegial body responsible forimplementing strategic decisions and ensuring theconsistency of the main management decisions. TheCommittee is supported by Special Committeesresponsible for preparing and steering the variousmeasures taken by the Group in the relevant areas.

• The Asset management Committee meets each month.The Committee prepares property managementdecisions and reports on major measures and projects.The Committee, including a reduced number ofmembers, is supplemented by an InvestmentCommittee that decides on current acquisitions or sales.

• The Finance Committee meets on a monthly basis inorder to review the Company’s financial position andcash forecasts. The Finance Committee preparesfinancing, hedging and investment decisions.

• The Results Committee meets each quarter in order toreview the Group’s budget monitoring statements andvarious activity indicators. On the basis of theexplanations provided with the support of theManagement Control unit, the Committee allows forthe identification of risks and of performanceimprovement factors.

Management Procedures

As part of the merger between GECINA and SIMCO,working groups comprised of employees of the twocompanies were formed during 2003 in order to define jointoperational processes, by seeking to identify best practice.

The new practices so defined shall be documented byupdating the written procedures currently in force withinGECINA.

Group Organization

The Group is primarily comprised of subsidiaries that areexclusively or near-exclusively held by GECINA. The Groupis organised in a centralised manner with common teamsand units applying the same methods and procedures toall companies.

2 • Structures carrying out internal controlfunctions

GECINA is equipped with three structures responsible forcontrol functions, i.e. the risk management, managementcontrol and internal audit units. These entities form part ofthe Administration and Finance Division and also report ontheir works to the Board’s various competent Committees.

Risk Management

The risk management function is responsible foridentifying and handling risks related to the security ofassets and individuals, the control of legal risk, sustainabledevelopment, (environment, safety). Risk management isan expert department responsible for steering,coordinating and controlling the management of risk.

The risk management unit is comprised of 4 employeesand is responsible for supporting and guiding theoperational divisions, carrying out checks and makingrecommendations.

• The risk management unit’s expertise relies ontechnological and regulatory intelligence and allows forthe diagnosis of risk through direct inspection and thedefinition of technical recommendations.

• The support to, and supervision of, technical divisionsare reflected by: – support given to operational managers in the

monitoring and control of risks affecting the propertyfor which they are responsible,

– support to the conduct of transverse or generalprojects: choice of technical solutions, preparation ofspecifications and selection of service providers,monitoring and control of services,

– awareness-raising and training programmes.

For each building, a risk monitoring statement isperiodically reviewed and allows not only for risk diagnosisbut also for the implementation of periodical checks andthe conduct of prevention and correction measures.

It was decided at the beginning of 2004 to create a RiskOperational Committee (ROC) which is responsible formaking collegial risk management decisions.

The control and proposal function relies on thecentralisation and monitoring control of risk, the provisionof information to Senior Management in the form ofperiodical reports and the making of appropriate proposals.

In addition to its functions, the risk management unit is alsoresponsible for the management of insurance policies andreported losses. A harmonization of insurance policies heldby GECINA (former scope of consolidation) and SIMCO(former scope of consolidation) was carried out in 2003.

Management control

Management control is carried out at a twin level: anoperational level within each division and a centralisedlevel within the Management Control Division.

The Management Control Division is comprised of 7 employees and relies on a network of managementcontrollers within the operational divisions (Residential andCommercial Property Divisions, Development Division,Locare).

The Management Control Division is responsible forbudget preparation and control, monitoring of key activityindicators, analysis of the profitability of property andconduct of property appraisals.

Budget preparation and control

A budget forecast is prepared for each property andincludes the rents, works and other property-relatedexpenses. Assumptions are made for each building asregards the vacancy rate, turnover rate, progress of newrentals and re-rental lead times, it being indicated that, forthe commercial property sector, the budget is prepared byreviewing each lease agreement of the rental statement.

The budget monitoring of the buildings is made on amonthly basis for the rental and works components andon a quarterly basis for the other property charges. Gapsbetween forecasts and actual amounts are identified,analysed and justified in liaison with the operational unitsconcerned.

As regards operating expenses, budgets are prepared onmonthly basis. Payroll expenses are monitored on amonthly basis and other expenses are monitored on aquarterly basis.

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Monitoring of management indicators

Activity indicators have been set up for each area in orderto measure the performance of the rental activity. Theseindicators cover notified terminations, exits and re-lettingdata and thus analyse on an ongoing basis, along with the other operational divisions, the vacancy, price and re-letting lead time data as well as the turnover rates

Property profitability analysis

The profitability of buildings is valued by way of areference to the last property appraisals known. Propertyassets are classified per category (per asset type and perregion). Buildings having an abnormally low profitabilityare subject to specific monitoring in order to optimizetheir performance or decide on their future status.

Property appraisals

The Management Control unit is responsible for carryingout and updating the property appraisals prepared byindependent experts. This function is thus dissociatedfrom the sales function, with reports to the DevelopmentDivision.

Internal audit

The main functions of the audit unit, as well as theinternal control responsibilities of the line and staffdivisions are defined in the Group’s audit charter.

An annual audit engagement program is prepared by theaudit division and validated by Senior Management.

Audit engagements have been prepared since the creationof the unit and primarily cover the rental cycle (invoicingand collection) which corresponds to the Group’s corebusiness. These engagements have covered the collectionprocesses, the preparation of the rental grid, the recordingof the property sections and leases in the informationsystem, the invoicing of leases and lease reviews.

Audit reports include recommendations and action plans.These reports are submitted to Senior Management andto the members concerned of the Executive Committee.The implementation of the recommended actions ismonitored.

In 2004, the scheduled strengthening of the internal auditteam should make it possible to support the processdocumentation exercise that is to be carried out duringthe fiscal year. This will also make it possible to increasethe number of audit engagements whose scope shall beextended to other activity cycles, in accordance with the2004 audit plan.

3 • Major operational processes

Internal control processes, whose purpose is to protect theCompany’s assets and control their management, aredescribed below through three major processes, i.e. assetvaluation, rental management and support processes.

Asset valuation

Property appraisals

Property assets are valued twice per year throughappraisals prepared by independent experts.

Investments

The security of investments is ensured through anacquisition process relying on a technical, legal andfinancial analysis, where applicable with the support ofexternal consultants and property experts.

Investment decisions are validated by the InvestmentCommittee. Transactions are made secure through relianceon notaries or attorneys.

Disposals

A disposal plan is prepared by the Development Divisionand defines sale proposals that are validated by theManagement Control Unit. Anticipated sale prices arecompared with the valuations derived from propertyappraisals in order to ensure that – except in duly justifiedexceptional situations – prices are in line with market data.

The disposal plan is submitted for approval to theInvestment Committee. The completion of thetransactions is then made secure through the specificprocedure required for the preparation of notarised deeds.

Asset maintenance and enhancement

The control of expenses associated with works is backedby the existence of work programmes prepared for eachbuilding. A works profitability analysis is prepared prior toany commitment in excess of €45,000.

The selection of suppliers is made through calls for tendersfor all projects of more than €45,000.

As regards residential assets, price statements definestandard services per category of buildings, and suppliersare required to comply with the relevant data.

Rental management

Price determination

As regards residential assets, the prices of the new rentalsare determined on the basis of schemes of limits approvedby Senior Management. These schemes of limits are

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prepared on the basis of the observation of internal andexternal data and through a comparison between rentsand market conditions.

As regards commercial property, the largest areas areleased through external sales agents, who provide greaterknowledge of market conditions.

As regards assets currently in operation, a monthly reportper building makes it possible to ensure the monitoring ofnew rentals, re-letting releases and vacant premises.

Vacancy monitoring

Commercial property: on the basis of the lease schedule,the weekly monitoring of vacancies and terminationnotices makes it possible to schedule refurbishmentworks, prepare marketing programmes and takecommercial measures in case of abnormally long re-lettingperiods.

The residential area is organised in the same manner. Theweekly analysis of vacancies and received terminationnotices makes it possible, in coordination with the teams,to schedule all necessary works and sales efforts.

All of this asset management data is automaticallytransferred to the IT system used to support thecommercial work carried out by Locare.

Client selection

The new tenants of the residential assets are selected onthe basis of their creditworthiness by a committeemeeting on a daily basis.

The new tenants of the commercial property assets areselected after a creditworthiness review. Since January 1,2004, GECINA took out an insurance contract in order toprotect itself against the non-payment risks associatedwith office property leases. After an assessment of therisks associated with prospective lessees, unpaid rents areguaranteed over a period of several years, in the event ofdefault.

Customer Relations

GECINA is equipped with a unit in charge of quality andresidential customer satisfaction. On the basis of anassessment of past experience, a comparative study and asystematic analysis of letters received from tenants, the2004 action plan provides for the launch of programmes,such as the creation of a tenant book, the development ofa consumer unit and the creation of a satisfaction gauge.

Support functions

Accounting and IT systems

It control processes and authorisation managementprocedures make it possible to ensure a secure operationof the systems. These procedures rely on regular databack-ups and on a set of controls serving to verify thesmooth completion of the processes. The back-upsupports are redundant and maintained with specialisedservice providers. A back-up contract also makes itpossible to ensure the continuation of the Company’soperations in case of unavailability of the informationsystem following a major disaster.

During fiscal year 2003, accounting and managementdata was still handled through the specific systems ofGECINA and SIMCO by applying the definitions and rulescommon to each of these subsets.

As part of the merger between the two companies, worksaimed at ensuring the convergence of the IT systems werecarried out in 2003 in order to provide for a single systemfor the entire Group starting from January 1, 2004.

In the same manner, the centralisation of accountingworks within the same division for the entire Group willmake it possible to improve the control of accountingprocesses, in compliance with the principles and standardsdefined at the consolidated level.

The reliability of accounting information is protected by anorganisation relying on the division of duties, budgetmonitoring and comparative analyses developed by theManagement Control Unit which thus ensures a second-level control.

Financial management

The liquidity risk and cost of debt are reviewed eachmonth by the Finance Committee. A regular monitoring offinancial ratios and the financing schedule that is updatedon an ongoing basis makes it possible to make financialmanagement more secure and ensure a conservativemanagement of resources.

The safety of financial flows is ensured by the bankingsignature organisation process, which entrusts to a smallnumber of persons, in keeping with the segregation ofduties and within specifically defined boundaries, thedelegations necessary for the operation of bank accounts.

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To the Shareholders,

In our capacity as statutory auditors of GECINA, and in accordance with article L.225-235 of the French Company Law(Code de Commerce), we report to you on the report prepared by the Chairman of the Board of your company inaccordance with article L.225-37 of the French Company Law (Code de Commerce) for the year ended December 31, 2003.

Under the responsibility of the Board of Directors, it is for management to determine and implement appropriate andeffective internal control procedures. It is for the Chairman of the Board to give an account, in his report, notably of theconditions in which the duties of the Board of Directors are prepared and organized and the internal control procedures in place within the Company.

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

We performed our procedures in accordance with professional guidelines applicable in France. These require us to performprocedures to assess the fairness of the information set out in the Chairman of the Board’s report on the internal controlprocedures relating to the preparation and processing of financial and accounting information. These procedures notablyconsisted of:• obtaining an understanding of the objectives and general organization of internal control, as well as the internal control

procedures relating to the preparation and processing of financial and accounting information, as set out in theChairman of the Board’s report;

• obtaining an understanding of the work performed to support the information given in the report.

On the basis of these procedures, we have no matters to report in connection with the information given on the internalcontrol procedures relating to the preparation and processing of financial and accounting information, contained in thereport of the Chairman of the Board of Directors, prepared in accordance with article L.225-37 of the French CompanyLaw (Code de Commerce).

April 23, 2004

The Statutory Auditors

MAZARS & GUERARD F.-M. RICHARD et Associés ERNST & YOUNG AuditPhilippe Castagnac Ginette Piquy Christian Mouillon

Statutory Auditors’ report, prepared in accordance with article L.225-235of the French Company Law (Code de Commerce), on the report preparedby the Chairman of the Board of Directors of GECINA,on the internal control procedures relating to the preparation and processingof financial and accounting information (Free translation of the French original)

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Board of Directors andexecutive management

Antoine Jeancourt-Galignani

Born 01/12/1937French nationality

Chairman, member of the BoardAppointed by the GM of May 23, 2000.Appointment renewed by the GM of June 3, 2003.Expiry of term of office: GM of fiscal year 2005.

Main position held:Chairman of the Board of Directors of GECINA

Other positions and offices held in 2003:• Chairman of the Board of Directors of SIMCO and

Société des Immeubles de France - S.I.F.• Chairman of the Supervisory Board of Euro Disney SCA• Member of the Supervisory Board of Oddo & Cie SCA

(since 12/02/2003)• Board member: Société Générale, AGF, TOTAL, and

KAUFMAN and BROAD• Positions and offices held in foreign companies: SNA

Holding Ltd, Bermuda (Chairman of the Board ofDirectors); SNA SAL, Lebanon, (Board member); SNA-ReLtd, Bermuda (Board member); JETIX, Netherlands(Supervisory Board member).

Antoine Jeancourt-Galignani owned 2,000 (1) GECINAshares, at December 31, 2003.

Gross compensation paid directly or indirectly, in 2003, to Antoine Jeancourt-Galignani amounted to €304,589.This compensation includes a non-recurring bonus of€150,000, relating to the conduct of the public offeringinitiated by GECINA on the shares of SIMCO.

Antoine Jeancourt-Galignani was paid by GECINA€18,279.50 (2) in Directors fees.Antoine Jeancourt-Galignani also benefits from the use of a company car.

Serge Grzybowski

Born 09/14/1958French nationality

Chief Executive Officer, since June 5, 2002.

Main position held:Chief Executive Officer of GECINA

Other positions and offices held in 2003:• Board member of Société des Immeubles de France –

S.I.F., LOCARE, PARIGEST, HOTEL D’ALBE• Board of member – Chief Executive Officer of SIMCO.• Trustee of FONCIGEF• Legal representative of GECINA, Trustee of SCI

Beaugrenelle, SCI Tour H 15, SCI SB Nord Pont, SCI SBLondres, SCI Dupleix-Suffren, SCI 16, VE Investissement,SCI du 77/81, boulevard Saint-Germain.

• Legal representative of GECINA; Chairman of GECITER,A.I.C., SAS SPL, SAS INVESTIBAIL TRANSACTIONS,Union Immobilière et de Gestion - UIG, GEC 1; GEC 2and GEC 3.

Serge Grzybowski owned 400 (1) GECINA shares atDecember 31, 2003.

Gross compensation paid directly or indirectly, in 2003, to Serge Grzybowski amounted to €519,146 including:- a fixed emolument of €243,918;- a variable emolument of €122,569, calculated on the

basis of change in consolidated current cash flow pershare;

- a non-recurring bonus of €150,000, relating to theconduct of the public offering initiated by GECINA on the shares of SIMCO;

- the use of an automobile, for €2,659.

Serge Grzybowski also benefits from the use of acompany car.Serge Grzybowski does not receive Directors fees from the Group.

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Michel Pariat

Born 05/30/1938French nationality

Board member, Vice Chairman

Appointed by the GM of December 20, 2002.Expiry of term of office: ASM of fiscal year 2004.

Main position held:Chairman of Logement Français

Other positions and offices held in 2003:• Chairman of Sicav DWS Haussmann France (expiry

of term: March 2003)• Board member of IPD France

Michel Pariat owned 980 (1) GECINA shares at December 31, 2003.Michel Pariat was paid by GECINA €762.50 (2)

in Directors fees.

Charles Ruggieri

Born 01/16/1948French nationality

Board member

Co-opted on September 12, 1996 (ratified by the GM of June 4, 1997).Appointment renewed by the GM of June 5, 2002.Expiry of term of office: GM of fiscal year 2004.

Main position held:Chairman: BATIPART SA

Other positions and offices held in 2003:• Chairman of Immobilière BATIBAIL BENELUX SA,

BATISICA SA, Bâti Gestion d’Actifs SAS, SociétéImmobilière CENTRE NORD SA

• Honorary Chairman: BATIGERE SAS• Chairman of the Supervisory Board: Foncière

des Régions (GFR)• Board member: SOVALKE SA, CIAL SA, L’ARSENAL

Association, Foncière Logements Association, SUREN• Acting director: CILGERE LORRAINE• Board member, representing BATIPART de FINAGEST SA• Board member, representing CILGERE LORRAINE

de UESL (SA, investment cooperative)• Board member, representing Associés Collecteurs

de ANPEEC (EPIC)• Board member, representing GIE CILGERE de APALOF• Legal representative of BATIPART Chairman of BATIPART

PARTICIPATIONS NOVAE, SAS 46 avenue Foch

Charles Ruggieri owned 20,540 (1) GECINA shares atDecember 31, 2003.Charles Ruggieri was paid by GECINA €5,750 (2)

in Directors fees.

Christian de Gournay

Born 08/25/1952French nationality

Board member

Co-opted on March 5, 1997 (ratified by the GM of June 4, 1997).Appointment renewed by the GM of June 2, 2003.Expiry of term of office: GM of fiscal year 2005.

Main position held:Chairman of the Executive Board of COGEDIM.

Christian de Gournay owned 236 (1) GECINA shares atDecember 31, 2003.Christian de Gournay was paid by GECINA €7,250 (2)

in Directors fees.

Bertrand Letamendia

Born 02/06/1947French nationality

Board member

Co-opted on February 8, 2000 (ratified by the GM of May 23, 2000).Appointment renewed by the GM of June 5, 2002.Expiry of term of office: GM of fiscal year 2004.

Main position held:Chief Real Estate Officer, AGF Group

Other positions and offices held in 2003:• Trustee of SNC AGF Immobilier• Trustee of SNC PHENIX Immobilier• Member of the Supervisory Board of KLEPIERRE• Board member of GECINA• Board member of SOPHIA• Board member of SOGEPROM• Board member of SIMCO• Chairman of SAS AGF Saint-Marc• Chairman of SAS Etablissements Paindavoine• Chairman of SAS Etoile Foncière et Immobilière• Chairman of SAS FINANCIERE COGEDIM LAENNEC• Chairman of SAS Kléber Lamartine• Chairman of SAS Madeleine Opéra

164

• Chairman of SAS Kléber Passy• Chairman of SAS 48 Notre Dame des Victoires• Chairman of SAS Société Commerciale Vernet• Chairman of SAS Société Foncière Européenne• Chairman of SAS Société de Négociation Immobilière

et Mobilières MALEVILLE “SONIMM”• Chairman of VERNON SAS• Trustee of SNC A.I.P.• Trustee of SNC Kléber Mirabeau• Trustee of SNC ALLIANZ Bercy• Trustee of ALLIANZ France SARL• Trustee of ALLIANZ IMMMO 3 EURL• Trustee of EURL 20/22 Rue Le Peletier• Trustee of SCI Centre et Paris• Trustee of SCI CIVILASSUR• Trustee of SCI 25 Rue Clapeyron• Trustee of SCI CLICHASSUR• Trustee of SCI COREPASSUR• Trustee of SCI 40 Avenue Duquesne• Trustee of SCI 16/18 Avenue George V• Trustee of SCCV 48-50 Henri Barbusse• Trustee of SCI INGRASSUR• Trustee of SCCV 33 La Fayette• Trustee of SCI 2 Rue Largillière• Trustee of SCI MARTINASSUR• Trustee of Société de Construction et de Gestion

Immobilière des MESOYERS• Trustee of SCI MOZARTASSUR• Trustee of SCI 30 Rue Pergolèse• Trustee of SCI 12 Rue de Rambouillet• Trustee of SCI REMAUPIN• Trustee of SCI 10 Rue de Richelieu• Trustee of SCI 3 Route de la Wantzenau “Les Portes de

L’Europe”• Trustee of SCI SOGEFO• Trustee of SC PRELLOYD Immobilier• Trustee of SCI VI Jaurès• Trustee of SCI VIA Pierre 1• Trustee of SCI du 18 Rue Vivienne – Vivienne 18

Bertrand Letamendia owned 1,560 (1) GECINA shares atDecember 31, 2003.

Bertrand Letamendia was paid by GECINA €12,562 (2) inDirectors fees.

AZUR VIE

Board member

represented by Bruno Legros

Born 07/14/1958French nationality

Co-opted on September 12, 1996 (ratified by the GMof June 4, 1997).Appointment renewed by the GM of June 3, 2003.Expiry of term of office: GM of fiscal year 2005.

Main position held:Chief Investment Officer for AZUR GMF

Other positions and offices held in 2003:• Chairman and Chief Executive Officer of Foncière

Malesherbes Courcelles, Securité Pierre Investissement• Board member of ARBF, ARFLOR, Grands Millésimes de

France• Trustee of Prony Immobilier and Prony Pierre 1• Member of the Board of Trustees of SCE du Château

Beaumont, SCE du Château Beychevelle• Permanent representative of AZUR Assurances• Board member of AZUR Finances, AZUR GMF

Obligations, Immobanque, AZUR VIE• Trustee of SCI Sécurité Pierre• Permanent representative of La Garantie Mutuelle

des Fonctionnaires• Board member of SOCANO 3, Forêts Gestion

(expiry of term in 2003)• Permanent representative of GMF VIE• Member of the Supervisory Board of Société Foncière

des Régions

AZUR VIE owned 23,852 (1) GECINA shares at December 31, 2003.

Bruno Legros was paid by GECINA €7,250 (2)

in Directors fees.

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GMF Vie

Board member

represented by Sophie Beuvaden

Born 04/01/1957French nationality

Appointed by the GM of July 8, 1999.Appointment renewed by the GM of June 5, 2002.Expiry of term of office: GM of fiscal year 2004.

Main position held:Chief Executive Officer Delegate for Finance Division,AZUR GMF Mutuelles d’Assurances Associées

Other positions and offices held in 2003:

In France:• Chairman of the Board of Directors of Assistance

Protection Juridique of FIDELIA Assistance• Board member of Foncière Malesherbes Courcelles,

SIMCO• Member of the Board of Trustees of SCE Beychevelle

and SCE Beaumont

Abroad:• Member of the Supervisory Board of TOKAJ HETSZOLO• Board member of ASSURANCES MUTUELLES D’EUROPE,

AZURITALIA ASSICURAZIONI S.P.A., AZURITALIA VITA,AZUR MULTIRRAMOS, AZUR VIDA, CSE ICO, CSESAFEGUARD, GMF FINANCIAL

• Permanent representative of AZUR Assurances i.a.r.d.• Board member of AZUR Vie, Sécurité Pierre Investissement• Permanent representative of AZUR Vie• Board member of GMF Vie• Permanent representative of GMF Assurances• Board member of IMMOBANQUE, PHRV• Permanent representative of GMF Vie• Board member of AZUR GMF Actions Asiatiques, AZUR

GMF Actions Françaises, AZUR GMF Moyen Terme,AZUR GMF Sécurité, COFITEM-COFIMUR, RestaurationInvestissement

• Permanent representative of LA SAUVEGARDE• Board member of BOISSY Finances• Executive Board member of AZUR GMF Mutuelles

d’Assurances Associées (expiry of term in 2003)• Board member of AZUR Patrimoine, BOISSY Gestion,

BOISSY Finances (expiry of terms in 2003)

GMF Vie owned 4,826,622 (1) GECINA shares at December 31, 2003.

Sophie Beuvaden was paid by GECINA €12,562 (2)

in Directors fees.

Anne-Marie de Chalambert

Born 06/07/1943French nationality

Board member

Co-opted on January 15, 2003 (ratified by the GM of June 3, 2003).Expiry of term of office: GM of fiscal year 2003.

Main position held:• Chairman and Chief Executive Officer of GENERALI

Immobilier Conseil

Other positions and offices held in 2003:• Sole board member and Chief Executive Officer of GIE

GENERALI Immobilier• Chairman of the Supervisory Board of GENERALI

Immobilier Gestion• Board member of SOPHIA• Permanent representative of GENERALI France

Assurances, Board member of SILIC• Permanent representative of Fédération Continentale,

Board member of Foncière des Régions• Trustee of SCI 174 rue de Rivoli, SCI 52-52bis

bd Saint Jacques and 6 rue Leclerc, SCI 26-28 rueJacques Dulud (Neuilly-sur-Seine), SCI 5 and 7 rueDrouot, SCI Bois des Roches (Saint-Michel sur Orge), SCI France Mornay (Lyon)

• Representative of GIE GENERALI Immobilier• Chairman of 2 ISO SAS, SURESNES Immobilier SAS• Representative of GIE GENERALI Immobilier, Trustee

of SNC GENERALI FRANCE TRIESTE ET VENISE ETCOMPAGNIE, SCI 10-12 boulevard de la Libération(Viroflay), SCI 24 rue de Mogador (Paris 9th), SCI 54,avenue Hoche, SCI avenue de France GENERALI, SCILAGNY-CUVIER-GENERALI, SCI Le Domaine du Mesnil,SCI Immobilière Font Romeu Neige et Soleil, SCI 3 ruede Londres et 70 rue Saint-Lazare, SCI 13 rue deLondres, SCI 48 and 50 boulevard des Batignolles, SCI Les Serres, SCI 2 rue Saint-Louis, SCI Lagny 68-70 GENERALI, SCI COGIPAR, SCI 130 boulevardBineau, LANDY-Wilo SCI, SCI 2-4 boulevard Haussmann,SCI GENERALI le Jade.

Anne-Marie de Chalambert owned 400 (1) GECINA sharesat December 31, 2003.

Anne-Marie de Chalambert was paid by GECINA €1,917 (2)

in Directors fees.

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Laurent Mignon

Born 12/28/1963French nationality

Board member

Co-opted on August 30, 2002 (ratified by the GM ofDecember 20, 2002).Appointment renewed by the GM of June 3, 2003.Expiry of term of office: GM of fiscal year 2005.

Main position held:Chief Executive Officer of AGFMember of the Executive Board of AGF

Other positions and offices held in 2003:• Chairman and Chief Executive Officer of Banque AGF• Chairman of the Board of directors of AGF Assurances

Financières, GIE Placements d’assurance• Chairman of the supervisory board of AGF Asset

Management• Vice President of the Supervisory Board of AGF Private

Equity, EULER Hermès, W Finance• Board member, Chief Executive Officer of AGF Vie• Board member, Chief Executive Officer Delegate

of AGF Holding• Board member of AGF International, Dresdner Gestion

Privée, Enténial• Member of the Supervisory Board of Oddo et Cie SCA,

AGF Informatique• Permanent representative of AGF International

of AGF IART• Permanent representative of AGF Holding of Génération

Vie, Métropole SA, Bolloré Investissement, AGF PrivateEquity

• Permanent representative of AGF of Worms et Cie• Permanent representative of AGF Vie of Bolloré• Permanent representative of AGF• Board member of AGF 2 X, AGF IART, BANQUE AGF,

COPARC, ENTENIAL, EUSTACHE, EPE, CIVIPOL, SMAFGIE Registrar, GIE SINTIA

• Member of the Supervisory Board of WORMS et Cie• Chairman of Assurance Fédérales IARD• Board member of SOPHIA

(Laurent Mignon no longer holds these last twopositions, since the end of 2003)

Laurent Mignon owned 240 (1) GECINA shares at December 31, 2003.

Laurent Mignon was paid by GECINA €3,833 (2)

in Directors fees.

Jean-Paul Sorand

Born 08/10/1941French nationality

Board member

Appointed by the GM of December 20, 2002.Expiry of term of office: GM of fiscal year 2004.

Main position held:Chairman’s Delegate Director

Other positions and offices held in 2003:• Vice President of SIMCO• Chairman of LOCARE• Chairman and Chief Executive Officer of PARIGEST• Board member of COMPAGNIE FINANCIERE DE PARIS,

SOCIETE DES IMMEUBLES DE FRANCE• Member of the Supervisory Board of HAUSSMANN

IMMOBILIER (SCPI).

Jean-Paul Sorand owned 28,080 (1) GECINA shares atDecember 31, 2003.

Gross compensation paid directly or indirectly, in 2003, toJean-Paul Sorand amounted to €392,152 including:- a fixed emolument of €268,702;- a variable emolument of €120,060, calculated on the

basis of change in consolidated current cash flow pershare;

- the use of an automobile, for €3,390.

Jean-Paul Sorand also benefits from the use of a company car.

Jean-Paul Sorand was paid by GECINA €14,491.50 (2)

in Directors fees.

Bertrand de Feydeau

Born 08/05/1948French nationality

Board member

Appointed by the GM of December 20, 2002.Expiry of term of office: GM of fiscal year 2004.

Main position held:• Chief Executive Officer for Economic Affairs of the

Association Diocésaine de Paris

Other positions and offices held in 2003:• Chairman and Chief Executive Officer of AXA

AEDIFICANDI (Sicav)• Board member of BAIL INVESTISSEMENT• Member of the Supervisory Board of KLEPIERRE

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• Observer of AFFINE – SEFRI CIME• Chairman of Association pour la Formation Supérieure

aux Métiers de l’Immobilier (AFSMI)• Fellow of the Royal Institution of Chartered Surveyors

in the United Kingdom (FRICS)• Board member and Treasurer of Fondation

du Patrimoine• Delegate of Vieilles Maisons Françaises pour le

Département de la Vienne

Bertrand de Feydeau owned 400 (1) GECINA shares atDecember 31, 2003.

Bertrand de Feydeau was paid by GECINA €1,525 (2)

in Directors fees.

Philippe Geslin

Born 07/09/1940French nationality

Board member

Appointed by the GM of December 20, 2002.Expiry of term of office: GM of fiscal year 2004.

Main position held:• Chairman, BANQUE FRANÇAISE DE L’ORIENT

Other positions and offices held in 2003:• Board member of Crédit Agricole Indosuez, ARC

International, Direction de la Construction NavaleInternationale, Crédit Foncier de Monaco, UnionFinancière de France Banque, SIMCO

Philippe Geslin owned 400 (1) GECINA shares at December 31, 2003.

Philippe Geslin was paid by GECINA €6,862 (2)

in Directors fees.

Françoise Monod

Born 07/18/1938French nationality

Board member

Appointed by the GM of December 20, 2002.Expiry of term of office: GM of fiscal year 2004.

Main position held:• Attorney, member of the Paris Bar Association:

Cabinet PDGB

Other positions and offices held in 2003:• Board member of SIPAREX Associés, SIPAREX Ventures

Gestion, SIMCO, CAIXABANK France

Françoise Monod owned 400 (1) GECINA shares atDecember 31, 2003.

Françoise Monod was paid by GECINA €3,812 (2)

in Directors fees.

PREDICA

represented by Jean-Pierre Bobillot

Born 02/21/1944French nationality

Board member

Appointed by the GM of December 20, 2002.Expiry of term of office: GM of fiscal year 2004.

Main position held:• Deputy Chief Executive Officer of the insurance

company, PREDICA

Other positions and offices held in 2003:• Board member of SIMCO

PREDICA owned 5,510,714 (1) GECINA shares at December 31, 2003.

PREDICA was paid by GECINA €3,812 (2) in Directors fees.

(1) Number adjusted, following the stock split (by 2) of thenominative share value on January 2, 2004.(2) Not including GECINA Directors fees for the fiscal year2003, paid in January 2004.

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Additional information - Directorsfees for the fiscal year 2003, paid in January 2004

Antoine Jeancourt-Galignani €18,500 GMF VIE Sophie Beuvaden €15,500 PREDICA Jean-Pierre Bobillot €17,000 Anne-Marie de Chalambert €24,500 Bertrand de Feydeau €21,500 Philippe Geslin €23,000 Christian de Gournay €18,500 AZUR VIE Bruno Legros €21,500 Bertrand Letamendia €21,500 Laurent Mignon €20,000 Françoise Monod €17,000 Michel Pariat €15,500 Charles Ruggieri €26,000 Jean-Paul Sorand €24,500

Independent Auditors

The Company’s current independent auditors are:

• Ernst & Young Audit, Tour Ernst & Young - 11, allée del’Arche - 92400 Courbevoie, represented by ChristianMouillon, appointed by the Ordinary Shareholders’Meeting of June 12, 1998 to a six-year term of office,which expires at the close of the Meeting of Shareholderson June 2, 2004 called to approve the financialstatements for the year ending December 31, 2003.

• F-M Richard et Associés, 5, avenue Bertie Albrecht -75008 Paris, represented by Ginette Piquy, appointed bythe Ordinary Meeting of Shareholders of June 12, 1998, toa six-year term of office, which expires at the close ofthe Meeting of Shareholders on June 2, 2004 called toapprove the financial statements for the year endingDecember 31, 2003.

• Mazars & Guérard, Le Vinci, 4, allée de l’Arche - 92075 Paris la Défense Cedex, represented by PhilippeCastagnac, appointed by the Ordinary Meeting ofShareholders of June 3, 2003 to a six-year term ofoffice, which expires at the close of the Meeting ofShareholders called to approve the financial statementsfor the year ended December 31, 2008.

Fees paid to the independent auditors (including non-recoverable VAT) relative to the fiscal year 2003 for theaudit and certification of the individual and consolidatedfinancial statements and related services amounted to:Ernst & Young Audit: €380,104 (€261,972 in 2002);Mazars & Guérard: €235,077 (€172,036 in 2002);F-M Richard et Associés: €181,871 (€185,799 in 2002).

Fees paid to the independent auditors of SIMCO(including non-recoverable VAT) relative to the fiscal year2003 for the audit and certification of the individual andconsolidated financial statements and related servicesamounted to:Mazars & Guérard: €228,024;PricewaterhouseCoopers Audit: €311,712.

The Company’s current alternate auditors are:

• Dominique Duret-Ferrari, Tour Ernst & Young - 11, alléede l’Arche - 92400 Courbevoie, appointed by theOrdinary Meeting of Shareholders of June 12, 1998 to a six-year term of office, which expires at the close ofthe Meeting of Shareholders on June 2, 2004 called to approve the financial statements for the year endingDecember 31, 2003.

• Sylvain Elkhaim, 6, place de la République Dominicaine -75017 Paris, reappointed by the Ordinary Meeting ofShareholders of June 12, 1998 to a six-year term of office,which expires at the close of the Meeting of Shareholderson June 2, 2004 called to approve the financialstatements for the year ending December 31, 2003.

• Patrick de Cambourg, Le Vinci 4, allée de l’Arche - 92075Paris la Défense Cedex, appointed by the OrdinaryMeeting of Shareholders of June 3, 2003 to a six-year term of office, which expires at the close of theMeeting of Shareholders called to approve the financialstatements for the year ended December 31, 2008.

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Early redemption of GECINA Nov. 2002 –3.25%and ex-SIMCO July 1997 –3.25% convertible bonds

In line with moves to optimize its financial structure, GECINA is exercising the early redemption option on the GECINANovember 2002 –3.25% and the ex-SIMCO July 1997 –3.25% convertible bonds. Indeed, the agreements applicableto each one of these bonds provide for an early redemption option if the average opening GECINA share price over10 consecutive days included within the period of 20 days trading prior to the announcement of the redemption is 130%higher than the early redemption price divided by 1.8. This price is calculated such that on the early redemption date,the bond offers a gross yield to maturity of 5%.

The redemption of the convertible bonds will be effective as at May 23, 2004 at a price of €89.97 per unit, in additionto the accrued interest acquired since January 1, 2004.

Through to August 23, 2004, any holder of convertible bonds may opt for the conversion of their bonds into GECINAshares, entitled to dividends as of January 1, 2004. This option may lead to the creation of 6,900,273 new shares, takingGECINA’s share capital up to a total of 64,938,519.

GECINA, which currently holds 2,696,838 shares in treasury stock, aims to continue rolling out its share buyback program.Indeed, the operation to buy back new shares up to the maximum authorized limit of 10% of the share capital will drivegrowth in both diluted current cash flow and net asset value per share.

Latest news

170

Chief Executive Officer:Serge GRZYBOWSKI

To the best of our knowledge, the information containedin this document is fair and accurate in all materialrespects, and there are no facts the omission of whichwould make misleading any statement of fact or opinion.The document provides investors with sufficientinformation to evaluate the assets, operations, financialcondition, performance and outlook of the GECINA Group.

Serge GRZYBOWSKI

Independent Auditors

Incumbent auditors:

• F-M Richard et Associés, 5, avenue Bertie Albrecht -75008 Paris, appointed by the Ordinary Meeting ofShareholders of June 12, 1998 to a six-year term ofoffice which expires at the close of the Meeting ofShareholders called to approve the financial statementsfor the year ending December 31, 2003.

Representative: Ginette PIQUY

• Mazars & Guérard, le Vinci, 4, allée de l’Arche - 92075Paris la Défense Cedex, appointed by the OrdinaryMeeting of Shareholders of June 3, 2003 to a six-yearterm of office which expires at the close of the Meetingof Shareholders called to approve the financialstatements for the year ending December 31, 2008.

Representative: Philippe CASTAGNAC

• Ernst & Young Audit, Tour Ernst & Young - 11, allée del’Arche - 92400 Courbevoie, appointed by the OrdinaryMeeting of Shareholders of June 12, 1998 to a six-yearterm which expires at the close of the Meeting ofShareholders called to approve the financial statementsfor the year ending December 31, 2003.

Representative: Christian MOUILLON

Person responsible for financial disclosures:Michel GAY – Chief Financial Officer

34, rue de la Fédération - 75737 Paris cedex 15Tel.: +33 (0)1 40 40 50 50

Persons responsible for the document,financial disclosures and audits

171

To the shareholders,

In our capacity as statutory auditors of GECINA and in compliance with the COB(1) Regulation n° 98-01, we have verified,in accordance with French professional standards, the information in respect of the financial position and historic financialstatements included in the accompanying Registration Document (Document de Référence).

This Registration Document is the responsibility of the Chief Executive Officer. Our responsibility is to issue an opinion onthe fairness of the information contained therein with respect to the financial position and financial statements.

We conducted our review in accordance with French professional standards. This review consisted in assessing the fairnessof the information on the financial position and financial statements and to verify their consistency with the auditedaccounts. We also reviewed other financial information contained in the Registration Document in order to identify anysignificant inconsistency with information in respect of the financial position and financial statements and to bring to yourattention any obvious misstatements we noted based on our general understanding of the company gained through ouraudit. The prospective information is based on management's expectations and intentions and not on properly preparedprojections on individual components of the prospective information.

We issued an unqualified opinion on the annual and consolidated accounts for the years ended December 31, 2001 and2003 drawn up by the Board of Directors, in accordance with French professional standards.

In our reports on such years we drew attention on the following matters:• in our reports on the annual and consolidated accounts for the year ended December 31, 2001, we drew attention to

the note 1.1 to the Notes which described the change in the presentation of redemption premiums on convertiblebonds and their method of depreciation.

• in our reports on the annual and consolidated accounts for the year ended December 31, 2002, we drew attention tothe note 4.6 of the Notes to the consolidated accounts and the note 4.8 to the Notes to the annual accounts in respectof the first application of regulation CRC-2002-06 relating to liabilities.

We issued an unqualified opinion on the annual and consolidated accounts for the year ended December 31, 2003 drawnup by the Board of Directors, in accordance with French professional standards. In our reports we drew attention to note1.1 of the Notes on these financial statements that present the change in the accounting method pursuant to thetransitional provisions of the regulation CRC-2002-10 related to asset amortization and depreciation and its application.

For the year ended December 31, 2003, in accordance with the requirements of article L. 225-235 of French CompanyLaw (Code de Commerce), introduced by the Financial Security Act of 1st August 2003 and which came into effect for thefirst time this year, we reported on the justification of our assessments in our report on the annual and consolidatedfinancial statements:

• As stated in notes 1.1 and 3.1 to the Notes to the annual and consolidated accounts, in connection with the election tothe new tax regime applicable to “SIIC” (French listed property investment companies), GECINA carried out a voluntaryrevaluation of its tangible and financial fixed assets based on valuations performed by independent real estate experts.We ensured that the accounting treatment of these transactions was appropriate based on generally acceptedaccounting principles in France, the specific provisions laid down by the Emergency Committee meeting of the FrenchNational Institute of accountants (Conseil national de la comptabilité) held on June 11, 2003 and the tax impactresulting therefrom.

• As stated in notes 1.1 and 4.7 to the Notes to the annual accounts, SIMCO has merged with GECINA effective January 1, 2003 after revaluation. We ensured that the accounting treatment of this transaction was appropriate based on generally accepted accounting principles.

Report of the Statutory Auditors on the Registration Document(Document de référence)(Free translation of the French original)

(1) French Stock Exchange Regulatory Body Regulation.

172

• As stated in note 3.1 to the Notes to the annual and consolidated accounts, the real estate assets are subject tovaluation procedures carried out by independent real estate experts. We ensured that based on the external expertappraisals as at December 31, 2003:

- the book values of the revalued assets have been corrected in a proper manner towards the revaluation reserve incompliance with the provisions of the Emergency Committee meeting of the French National Institute of accountants(Conseil national de la comptabilité) held on June 11, 2003,

- sufficient provisions were set aside using the Group’s accounting principles.

We have examined the pro forma income statement for the year ended December 31, 2002, drawn up by themanagement of GECINA in accordance with French professional standards. We have issued an unqualified opinion in ourreport dated March 24, 2003.

We have nothing to report with respect to the fairness of the information on the financial position and financialstatements contained in the Registration Document (Document de Référence).

With regard to the pro forma information contained in the present Document, may we remind you that this information isintended to reflect the effect of a given transaction on the historical financial information, had this transaction or eventoccurred at a date earlier than the date at which such transaction or event occurred or is reasonably expected to occur. It isnot necessarily indicative of the results of operations or related effects on the financial position that would have beenattained had the transaction or event occurred at a date earlier than the date at which it actually occurred or is reasonablyexpected to occur.

May 13, 2004

The Statutory Auditors

MAZARS & GUERARD F-M RICHARD et Associés ERNST & YOUNG AuditPhilippe Castagnac Ginette Piquy Christian Mouillon

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Readers’ Index

For the convenience of readers of this annual report, which has been filed as self registration document (document de référence) withthe French stock market authorities (L'Autorité des Marchés Financiers - AMF), the following index is provided to facilitate the identificationof disclosures required by AMF regulations and filing requirements.

INFORMATION PAGES IN THE ANNUAL REPORT

PERSONS RESPONSIBLE 170 to 172• Person responsible for the document 170• Independant aiditor’s opinion 171-172• Financial disclosures

GENERAL INFORMATION 144 to 152Share capital• Specific information (limitation on the exercise of voting rights) 145-148• Authorized capital not issued 145-146• Potential capital 145-146• Five-year analysis of equity capital 147Market in company securities• Trading volume over the last 18 months (number of shares and amount of equity traded) 150 to 152• Dividends 69-135-149

SHARE CAPITAL AND VOTING RIGHTS 148• Capital ownership and voting rights 148• Change in shareholder base 148• Shareholder agreements 148

INFORMATION CONCERNING THE GROUPS BUSINESS 61 to 71-82• Presentation of the Group (the parent company and subsidiaries, information on subsidiaries) 61-62• Key figures 14 to 17• Analysis by sector (business lines, geographic region/countries) 14 to 17-22 to 39-40 to 57• Market and competitive position of the issuer 24 to 27-42 to 44• Investment policy 2 to 3-8 to 9-12-14-28-45-82• Key performance indicators (value creation for the Company) 14 to 17

GROUP RISK PROFILE 64-65-75 to 79-100-101-105-119-120-122Risk factors• Market risks (liquidity, interest and exchange rates, equity securities portfolio) 64-65-100-101-119-120• Risks related to the issuer’s business

(including dependence on supplies, clients, subcontractors, contracts, manufacturing processes) 27-78• Legal risks (specific regulations, concessions, licenses and similar operating rights, significant litigation, one-off events) 78-105-122• Industrial and environmental risks 21-75 to 78Insurance and risk coverage 78

ASSETS, FINANCIAL SITUATION AND PERFORMANCE 64 to 70-83 to 124• Consolidated financial statements and notes 83 to 106• Off-balance sheet commitments 102-103-120• Fees paid to independent auditors and members of their network 168• Corporate financial statements and notes 107 to 124

CORPORATE GOVERNANCE 105-123-154 to 160-162 to 167• Composition and functioning of boards responsible for corporate governance,

administration and supervision 10-11-154 to 160• Composition and organization of committees 10-21-154 to 160• Directors and Officers

(compensation and benefits, options granted and exercised, BSA and BSPCE warrants granted) 105-123-154-155-162 to 167• Ten hightest paid employees who are not officers of the Company (options granted and exercised) 123-153• Regulated agreements 105-122-123

RECENT DEVELOPMENTS AND OUTLOOK 8-9-12-82-169• Recent developments 82-169• Outlook 8-9-12-82-169

GECINAFinancial Communications Department: 33 1 40 40 51 98

Design and production: WprintelPhotography: Alain Kernévez - Didier Cocatrix - Thomas Dhellemmes - Studio Pons et X.

The French original version of this report has been registered with the AMF* on May 13, 2004, pursuant to the rule n° 98-01. It can onlybe used to support a financial transaction if it is accompanied by a specific document also registered by the AMF. * L’Autorité des Marchés Financiers (The French Control Authorities for Stock Market).

GECINA GROUP

34, rue de la Fédération75015 Paris - FranceTel: + 33 1 40 40 50 50

Mailing address34, rue de la Fédération75737 Paris cedex 15 - France

29, quai Saint-Antoine69002 Lyon - FranceTel: + 33 4 72 77 11 40

www.gecina.frwww.locare.fr