MRM - 2018 Registration document

2.

RISK FACTORS

The Company has assessed the risks which could have a significant negative effect on its activity, its financial situation or its results (or on its capacity to achieve its objectives) and it believes that there are no significant risks other than those presented. Investors should be aware that the list of risks that follows is not exhaustive, and that other risks either unknown or not considered material at the date of this Registration

Document, and which could have an adverse impact on the Company, its activity, financial position, earnings or share price, could still exist. The procedures in place to monitor risks relating to the preparation and processing of accounting and financial information are detailed in Section 1.7 of the management report in Section 3.6 of this Registration Document.

Legal risks

2.1

Risks related to unfavourable developments in commercial lease regulations

French legislation on commercial leases is relatively constrictive for the lessor. Provisions on term of leases, renewal, and rent revisions while the lease is running and for renewed leases are part of public policy, tending to limit any leeway owners might have to increase rents to market levels. Any changes in rules applying to commercial leases, especially with regard to duration, revision and capping of rents, calculating eviction compensation due to tenants in case of non-renewal, could have negative consequences on the value of the Company’s

assets, earnings, business or financial position. The Company’s business may in particular be influenced by the new retail rents index (ILC), which is set to replace the construction cost index (ICC), and by the Pinel Law, which modifies the list of service charges, work, taxes, duties and fees which may be charged to tenants on leases concluded or renewed from 3 November 2014. See “Economic risk” in Section 2.2 of this Registration Document for more information on the ILC. Moreover, the Company would lose the benefit of the SIIC regime if one or more of its shareholders acting in concert (other than listed companies benefiting from the SIIC regime) were to hold 60% or more of its shares or voting rights. The Company currently does not envisage one of its shareholders directly or indirectly holding 60% or more of its shares. However, since 29 May 2013, the majority shareholder, SCOR SE has held 59.9% of the share capital of M.R.M. Accordingly, M.R.M. and the SCOR group mobilised their teams to hedge against this risk by actively monitoring trends in shareholders’capital holdings and voting rights in M.R.M. and notably by registering M.R.M. shares in the bearer share account of SCOR SE, so as to avoid the acquisition of double voting rights that would

Risk related to the SIIC tax regime

Since 1 January 2008, the Company has benefited from the SIIC status governed by Article 208-C of the French General Tax Code under which it is exempt from corporate income tax, subject to distribution conditions, on the part of its profit derived from the rental of its properties, capital gains on the sale of properties or of certain stakes in real estate companies, and certain dividends. In order to maintain the advantages of the SIIC regime, the Company must distribute a significant part of its profits, which can affect its financial position and cash flow. In addition, failure to meet this distribution obligation during the financial period would mean that the exemptions would not apply to that year.

M.R.M. 2018 REGISTRATION DOCUMENT

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