GECINA - REFERENCE DOCUMENT 2017

RISKS Risks

Risks related to constraints stemming

6.1.3.2

DISPUTES 6.1.5 Each of the known legal disputes in which Gecina or the Group’s companies are involved was reviewed at the close of the accounts and the provisions deemed necessary have, where called for, been created to cover the estimated risks (see also Note 3.5.5.13 in the Notes to the Consolidated Financial Statements). Except the disputes mentioned below, the disputes and claims in which Gecina and its subsidiaries are parties to this day are in the normal course of their business. 6.1.5.1 To date, the company is not in a position to evaluate any potential risks, in particular, regulatory, legal or financial, arising from the facts covered by the ongoing criminal proceedings and cannot, in particular, exclude the possibility that it may be joined as a party in the future, together with the company’s officers and representatives. In 2009, a complaint was filed in France pertaining to ■ certain transactions involving in particular the former Chairman of Gecina’s Board of Directors, Mr. Joaquín Rivero. The company fully assisted the investigations and joined the proceedings as a civil party in 2010 to safeguard its interests. The investigating judge, Mr. Van Ruymbeke, during the investigation ordered the seizure of sums representing the dividends owed to Joaquín Rivero and the companies he controlled pursuant to the resolutions passed by the Shareholders’ Meetings of April 17, 2012 and April 18, 2013 (approximately €87 million). Mr. Joaquín Rivero was sent back to the Criminal Court ( Tribunal correctionnel ) on various counts as a result of the aforementioned complaint and, in a ruling handed down on March 11, 2015, he was convicted of misuse of corporate assets and money laundering and sentenced to four years of imprisonment, with a one-year suspended sentence. He was also ordered to pay around €209 million to Gecina in damages and a fine of €375,000. The Court ordered the confiscation of all the sums seized during the investigation (around €87 million). The Court also indicated that a portion of the damages would have to be paid directly by the AGRASC ( Agence de gestion et de recouvrement des avoirs saisis et confisqués ) to Gecina, firstly from the confiscated assets which the AGRASC managed and up to this amount. Lastly, Mr. Joaquín Rivero was acquitted on the counts of failure to report threshold crossings and circulation of false or misleading information. As the parties have appealed this decision, the ruling is not enforceable. Joaquín Rivero died on September 18, 2016. This death extinguishes the public action against Mr. Rivero, but does not extinguish Gecina’s civil action, which may continue, against Mr. Rivero’s assigns. Gecina continues to defend its rights in the ongoing appeal proceeding. Following the judgment of March 11, 2015, Gecina proceeded with the seizure of the 8,839 shares held personally by Joaquín Rivero and of the dividends attached to those shares since 2014. Pending criminal court disputes

from the SIIC tax regime Gecina is subject to the tax system for French listed real estate investment trusts (here in after “SIIC”) as provided for in Article 208 C of the French General Tax Code, which allows it to benefit from a corporate tax exemption on the portion of its profits generated from the rental of its buildings as well as from capital gains from disposals of properties or equity interests in real estate companies, and dividend payments from certain subsidiaries. The benefit from the tax exemptions under the SIIC regime is contingent on compliance with the mandatory distribution of a significant percentage of Gecina’s profits. However, this could be revoked if this obligation is not adhered to. The obligation to distribute could limit the resources available for financing new investments and oblige the Group to take on more debt or turn to the market to finance its development. Under the SIIC regime, Gecina is not subjected to an exclusive corporate purpose. It may engage in activities incidental to its main corporate purpose (for example property trading, marketing and development) on the condition that the value of the assets used for and directly involved in the exercise of this business does not exceed 20% of the gross value of Gecina’s assets. In case of the contrary, the benefit of the SIIC regime could be revoked. In any event, the profits accruing from incidental business are subject to corporate income tax based on the ordinary tax rate. Gecina is exposed to risks related to changes in applicable tax rules, their interpretations and new levies and taxes. Even if Gecina can sometimes pass on part of the corresponding costs to third parties, such changes could have an adverse effect on the Group’s financial position and earnings. TRANSACTIONS IN SPAIN Up until 2009, Gecina, chaired by Mr. Joaquín Rivero, made a certain number of acquisitions in the Spanish real estate sector, including SIF Espagne’s acquisition of a 49% stake in Bami Newco in 2009. Gecina also made certain commitments, notably granting certain guarantees relating to these acquisitions, as referred to in Notes 3.5.5.13 and 3.5.9.3 of the Notes to the Consolidated Financial Statements. Gecina cannot entirely rule out the possibility of non-compliance with its internal control and risk management arrangements resulting in additional financial, legal or regulatory risks that have not been identified to date. Occurrence of such risks may impact the Group’s reputation, results or financial situation. RISKS LINKED TO CERTAIN 6.1.4

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GECINA - REFERENCE DOCUMENT 2017