LEHMAN BROTHERS (LUXEMBOURG) EQUITY FINANCE S.A. (INCORPORATED IN THE GRAND DUCHY OF LUXEMBOURG)

Transcription

1 REGISTRATION DOCUMENT 28 August 2007 LEHMAN BROTHERS (LUXEMBOURG) EQUITY FINANCE S.A. (INCORPORATED IN THE GRAND DUCHY OF LUXEMBOURG) This document (this "Registration Document") has been prepared for the purposes of providing the information disclosure on Lehman Brothers (Luxembourg) Equity Finance S.A. ("LBEF") required by Directive 2003/71/EC (the "Prospectus Directive") to be included in the registration document component of any prospectus of which this Registration Document forms part submitted on the date of this Registration Document (or to be submitted before the first anniversary of the date of this Registration Document) to the Bundesanstalt für Finanzdienstleistungsaufsicht ("BaFin") in connection with the issuance by LBEF of warrants, certificates or other securities or debt instruments guaranteed by Lehman Brothers Holdings Inc. ("LBHI"), which are non-equity securities (as defined in the Prospectus Directive) and in respect of which a prospectus is required to be published for the purposes of the Prospectus Directive as implemented in any jurisdiction.

2 TABLE OF CONTENTS Risk factors... 3 Risks relating to Lehman Brothers (Luxembourg) Equity Finance S.A...3 Factors Affecting Lehman Brothers Results of Operations...3 Responsibility Statement... 6 General... 7 Information relating to LBEF... 8 Incorporation, History and Development...8 Corporate Seat...8 Statutory Auditors /Financial Statements...8 Investments...8 Business Overview...8 Organisational Structure...10 Recent Developments/Trend Information...11 Outlook...11 Management...11 Share Capital...12 Material Contracts...12 Legal and Arbitration Proceedings...12 Summary Financial Information of LBEF Year - End Financial Information...13 Documents on Display ANNEX A: AUDITED FINANCIAL STATEMENTS AS OF 30 NOVEMBER A-1 ANNEX B: ANNUAL ACCOUNTS AND INDEPENDENT AUDITOR S REPORT AS OF NOVEMBER 30, B-1 Names and Addresses...S-1 Signature Page...S-1 A

3 RISK FACTORS Risks relating to Lehman Brothers (Luxembourg) Equity Finance S.A. Lehman Brothers (Luxembourg) Equity Finance S.A. is a subsidiary of Lehman Brothers Holdings Inc. ("LBHI" and together with all the subsidiaries of LBHI, "Lehman Brothers"). As each company of Lehman Brothers, LBEF may be affected by uncertain or unfavourable economic, market, legal and other conditions that are likely to affect Lehman Brothers. By purchasing securities issued by LBEF, investors will take a credit risk on LBEF (that is the risk of LBEF not being able to meet its payment obligations (if any) with respect to any securities issued by LBEF and purchased by the investors). The proceeds of the issuance of securities by LBEF are being used to enter into hedging arrangements with other Lehman Brothers companies, principally Lehman Brothers Finance S.A.. LBEF is fully hedging its obligations by offsetting derivatives instruments with other Lehman Brothers companies, principally Lehman Brothers Finance S.A. The derivative element of any structured notes is consistently valued with the related hedging instruments. Due to the above mentioned hedging structure of LBEF, LBEF's ability to perform its obligations may be affected by any inability or failure to perform obligations owed to LBEF by other Lehman Brothers companies, principally Lehman Brothers Finance S.A.. The risk factors set out below with respect to Lehman Brothers as a whole apply to an investment in LBEF securities as (i) LBEF cash flows depend to a material extent on cash flows received from hedging activities of other Lehman Brothers companies and (ii) the business activities of LBEF with third party market participants, being broadly of the same nature as the business activities of Lehman Brothers as a whole are affected by the same risks.. Factors Affecting Lehman Brothers Results of Operations Lehman Brothers' financial condition and results of operations may be affected by uncertain or unfavourable economic, market, legal and other conditions. Market Risk As a global investment bank, market risk is an inherent part of Lehman Brothers business, and Lehman Brothers businesses can be adversely impacted by changes in market and economic conditions that cause fluctuations in interest rates, exchange rates, equity and commodity prices, credit spreads and real estate valuations. Lehman Brothers maintain inventory positions (long and short) across a broad range of financial instruments to support Lehman Brothers client-flow activities and also as part of Lehman Brothers proprietary trading and principal investment activities. Lehman Brothers businesses can incur losses as a result of fluctuations in these market risk factors, including adverse impacts on the valuation of Lehman Brothers inventory positions and principal investments. Competitive Environment All aspects of Lehman Brothers' business are highly competitive. Lehman Brothers' competitive ability depends on many factors, including its reputation, the quality of its services and advice, intellectual capital, product innovation, execution ability, pricing, sales efforts and the talent of its employees. A

4 Business Environment Concerns about geopolitical developments, oil prices and natural disasters, among other things, can affect the global financial markets and investor confidence. Accounting and corporate governance scandals in recent years have had a significant effect on investor confidence. Liquidity To manage Lehman Brothers liquidity risks, Lehman Brother's liquidity and funding policies have been conservatively designed to maintain sufficient liquid financial resources to continually fund Lehman Brothers balance sheet and to meet all expected cash outflows, for one year in a stressed liquidity environment. Liquidity and liquidity management are of critical importance in Lehman Brothers' industry. Despite the existence of the above mentioned liquidity and funding policies, liquidity could nevertheless be affected by the inability to access the long-term or short-term debt, repurchase or securities-lending markets or to draw under credit facilities, whether due to factors specific to Lehman Brothers or to general market conditions. In addition, the amount and timing of contingent events, such as unfunded commitments and guarantees, could adversely affect cash requirements and liquidity. Credit Ratings Lehman Brothers' access to the unsecured funding markets is dependent on its credit ratings. A reduction in its credit ratings could adversely affect Lehman Brothers' access to liquidity alternatives and its competitive position, and could increase the cost of funding or trigger additional collateral requirements. LBEF is not rated and to the extent it taps the unsecured funding markets, its ability to do so will also be dependent on the credit ratings of LBHI. Credit Exposure Credit exposure represents the possibility that a counterparty will be unable to honour its contractual obligations. Although Lehman Brothers actively manage credit exposure daily as part of its risk management framework, counterparty default risk may arise from unforeseen events or circumstances. Operational Risk Lehman Brothers seek to manage operational risks through an effective internal control environment. Despite the existence of the control environment it cannot be excluded that operational risks will nevertheless arise. Operational risk is the risk of loss resulting from inadequate or failed internal or outsourced processes, people, infrastructure and technology, or from external events. Legal, Regulatory and Reputational Risk The securities and financial services industries are subject to extensive regulation under both federal and state laws in the U.S. and under the laws of the many other jurisdictions in which Lehman Brothers do business. Lehman Brothers also are regulated by a number of self-regulatory organizations such as the National Association of Securities Dealers, the Municipal Securities Rulemaking Board and the National Futures Association, and by national securities and commodities exchanges, including the New York Stock Exchange. As of 1 December 2005, LBHI became regulated by the SEC as a consolidated supervised entity ("CSE"), and as such, LBHI is subject to group-wide supervision and examination by the SEC, and accordingly, LBHI is subject to minimum capital requirements on a consolidated basis. Violation of applicable regulations could result in legal and/or administrative proceedings, which may impose censures, fines, cease-and-desist orders or suspension of a firm, its officers or employees. The A

5 scrutiny of the financial services industry has increased over the past several years, which has led to increased regulatory investigations and litigation against financial services firms. Legislation and rules adopted both in the U.S. and around the world have imposed substantial new or more stringent regulations, internal practices, capital requirements, procedures and controls and disclosure requirements in such areas as financial reporting, corporate governance, auditor independence, equity compensation plans, restrictions on the interaction between equity research analysts and investment banking employees and money laundering. The trend and scope of increased compliance requirements has increased costs necessary to ensure compliance. Our reputation is critical in maintaining our relationships with clients, investors, regulators and the general public, and is a key focus in our risk management efforts. Several Lehman Brothers companies (other than LBEF) are involved in a number of judicial, regulatory and arbitration proceedings concerning matters arising in connection with the conduct of their respective business, including actions brought against such Lehman Brothers companies and others with respect to transactions in which such Lehman Brothers companies acted as an underwriter or financial advisor, actions arising out of their respective activities as a broker or dealer in securities and actions brought on behalf of various classes of claimants against many securities firms and lending institutions, including such Lehman Brothers companies, which judicial, regulatory and arbitration proceedings may have, or have had a material adverse effect on the financial position or profitability of such Lehman Brothers companies. If and to the extent that such judicial, regulatory and arbitration proceedings may have, or have had a material adverse effect on the financial position or profitability of such Lehman Brothers companies, this may also ultimately have an materially adverse effect on the financial position or profitability of LBEF. A

6 RESPONSIBILITY STATEMENT Lehman Brothers (Luxembourg) Equity Finance S.A. whose registered office is at 1 Allee Scheffer, L Luxembourg accepts responsibility for the content of this Registration Document pursuant to 5 para 4 Wertpapierprospektgesetz and hereby accordingly declares that the information contained in this Registration Document is, to the best of its knowledge, in accordance with the facts and that no material circumstances have been omitted. Lehman Brothers (Luxembourg) Equity Finance S.A. hereby declares that, having taken all reasonable care to ensure that such is the case, the information contained in this Registration Document is, to the best of its knowledge, in accordance with the facts and contains no omissions likely to affect its import. A

7 GENERAL This document is valid for the period of twelve months from the date of its publication and is to be read and construed with any supplement to a prospectus which incorporates this document, where any such supplement relates to the content of this document. A copy of this Registration Document and each supplement hereto will be available free of charge during the life of this Registration Document, during normal business hours on any weekday (Saturdays and public holidays excepted), for inspection at the office of The Bank of New York, Filiale Frankfurt am Main, Niedenau 61-63, Frankfurt am Main, Germany, and Lehman Brothers International (Europe), Frankfurt Branch, Rathenauplatz 1, Frankfurt am Main, Germany. No person has been authorised to give any information or to make any representation not contained in or not consistent with this Registration Document and, if given or made, such information or representation must not be relied upon as having been authorised by LBEF or any of its affiliates. This Registration Document is not intended to provide the basis of any credit or other evaluation and should not be considered as a recommendation by LBEF or any other person that any recipient of this Registration Document should purchase any securities issued by LBEF. Each investor contemplating purchasing securities issued by LBEF should make its own independent investigation of the financial condition and affairs, and its own appraisal of the creditworthiness, of LBEF. No part of this Registration Document constitutes an offer or invitation by or on behalf of LBEF to any person to subscribe for or to purchase any securities issued by LBEF. Neither the delivery of this Registration Document nor any documentation relating to any securities issued by LBEF (including without limitation any base prospectus or final terms for the purposes of the Prospectus Directive) nor the offering, sale or delivery of any such securities shall, in any circumstances, create any implication that there has been no change in the affairs of LBEF since the date hereof, or that the information contained in the Registration Document is correct at any time subsequent to the date hereof or that any other written information delivered in connection herewith or therewith is correct as of any time subsequent to the date indicated in such document. Investors should review, inter alia, the most recent financial statements of LBEF when evaluating any securities issued by LBEF or an investment therein. However, LBEF will always comply with the applicable statutory requirements to publish supplements in accordance with 16 WpPG. The distribution of this Registration Document and the offer or sale of securities issued by LBEF may be restricted by law in certain jurisdictions. Persons into whose possession this Registration Document or any securities issued by LBEF come must inform themselves about, and observe, any such restrictions. A

8 Incorporation, History and Development INFORMATION RELATING TO LBEF Lehman Brothers (Luxembourg) Equity Finance S.A. was incorporated as a public limited liability company (a société anonyme, or S.A.) under the laws of the Grand-Duchy of Luxembourg in the City of Luxembourg, Grand Duchy of Luxembourg, on 8 June, 2004 for an unlimited duration. The company administration and corporate governance of Lehman Brothers (Luxembourg) Equity Finance S.A. are subject to the laws of Luxembourg. Lehman Brothers (Luxembourg) Equity Finance S.A. is registered in the Registre de Commerce et des Sociétés under the number "B " in Luxembourg. A copy of Lehman Brothers (Luxembourg) Equity Finance S.A.'s constitutional documents was published in the "Mémorial C, Recueil de Societés et Associations" on 8 July, Corporate Seat The registered office of LBEF since 20 December 2004 is at 1 Allee Scheffer, L-2520 Luxembourg (before 20 December 2004 it was 33 Boulevard du Prince Henri, L-1724 Luxembourg) and the telephone number is On pages A-8 and B-8 of this Registration Document it is stated that the registered office of LBEF is still 33 Boulevard du Prince Henri, L-1724 Luxembourg. This is incorrect. Statutory Auditors /Financial Statements The financial statements of LBEF for the years ending 30 November, 2005 and 30 November, 2006 have been prepared in accordance with generally accepted accounting principles in the Grand Duchy of Luxembourg and reported on without qualification by Ernst & Young, a member of the Institut des Réviseurs d'enterprises (IRE), 6, rue Jean Monnet, L-2180 Luxembourg, Luxembourg. Investments Other than entering into hedging arrangements LBEF does not undertake any independent investments with the proceeds (net of third party costs) of any issuance of warrants, certificates or other securities or debt instruments. Business Overview Principal Activities The principal activities of LBEF include the issuance of warrants, certificates and other debt instruments (linked to the performance of equities, funds, indices, foreign exchange, fixed income, commodities, real estate or other underlyings), the risk management of the foregoing security instruments and the execution of intercompany borrowing and lending transactions. The principal platform pursuant to which LBEF conducts such securities issuance activity is the warrant and certificate programme between LBEF as issuer, Lehman Brothers Securities N.V. ("LBS") as issuer, Lehman Brothers Finance S.A. ("LBF") as issuer, Lehman Brothers Bankhaus A.G. ("LBB") as issuer and LBHI as guarantor (the "Luxembourg Warrant and Certificate Programme"). In accordance with the Luxembourg Warrant and Certificate Programme, each of LBS, LBEF, LBF and LBB may from time to time issue warrants or certificates of any kind (such as warrants and certificates relating to an index or a basket of indices a share or basket of shares, a depositary receipt in respect of a share, a basket of depositary receipts in respect of the shares of a basket of companies, a debt instrument or basket of debt instruments, a currency or basket of currencies, an interest rate or a commodity or basket of commodities). Each security issued by LBS, LBEF, or LBB has the benefit of an unconditional and irrevocable guarantee of LBHI. A

9 LBEF continues to act as an issuer under a warrant and certificate programme principally directed to the German domestic market (the "German Warrant and Certificate Programme"). Under the German Warrant and Certificate Programme, LBEF and LBS may from time to time issue warrants and certificates irrevocably and unconditionally guaranteed by LBHI (the "Guaranteed Obligations"). The other securities issuance platform used by LBEF is described below under "Significant new Products and/or Activities". LBEF may also enter into financial derivatives agreements. Upon issuance of such securities, LBEF will enter into total return swaps with other Lehman Brothers companies (the "Total Return Swaps") in order to hedge its exposure. The Total Return Swaps will have the same maturity as the offered securities. According to Article 3 of the Articles of Association, LBEF may do all and any of the following: "The objects of the Company are to invest in a portfolio of domestic or foreign securities or similar instruments, including but not limited to shares, warrants and equity securities, bonds, notes, rights or participations in senior or mezzanine loans and in financial derivatives agreements and other debt instruments or securities, trade receivables or other forms of claims, obligations (including but not limited to synthetic securities obligations), to enter into any agreements relating to such portfolio and to grant pledges, guarantees or other security interests of any kind under any law to Luxembourg or foreign entities. The Company may also: (a) (b) (c) (d) (e) raise funds through, including, but not limited to, the issue of bonds, notes, subordinated notes and other debt instruments or debt securities and equity instruments, the use of financial derivatives or otherwise and obtain loans or any other form of credit facility; enter into any kind of credit derivative agreements such as, but not limited to, swap agreements; grant loans or any financial assistance to companies of the same group; grant security for funds raised, including bonds, obligations and notes issued, and for indemnities given by the Company; enter into all necessary agreements, including, but not limited to underwriting agreements, marketing agreements, management agreements, advisory agreements, administration agreements and other contracts for services, selling agreements, interest and/or currency exchange agreements and other financial derivative agreements, bank and cash administration agreements, liquidity facility agreements, credit insurance agreements and any agreements creating any kind of security interest. In addition to the foregoing, the Company can perform all lawful, commercial, technical and financial investments or operation and in general, all transactions which are necessary or expedient to meet its objects as well as all operations connected directly or indirectly to facilitating the accomplishment of its purpose in all areas described above, however without taking advantage of the Act of 31 July, 1929, on holding companies." Significant new Products and/or Activities On November 29, 2006, LBEF created a Certificates Programme approved by the SWX Swiss Exchange (the "SWX Programme") with LBEF as issuer, Lehman Brothers Finance S.A. ("LBF") as issuer, Lehman Brothers Securities N.V. ("LBS") as issuer, Lehman Brothers Treasury Co. B.V. ("LBTCBV") as issuer and LBHI as guarantor. A

10 Principal Markets The securities issued by LBEF are placed for the vast majority in the markets of EU Member States. The placing policies of the securities aim at providing investors with highly liquid securities with several maturity options. LBEF issues securities denominated in various currencies in order to strengthen the diversification of its investor base and tap different capital markets. Rating LBEF is not rated. Risk Management LBEF fully hedges its market risk by offsetting derivatives instruments with other Lehman Brothers companies, principally Lehman Brothers Finance S.A.. The derivative element of any structured securities issued by LBEF is consistently valued with any related hedging instruments. Hence, LBEF is not exposed to any material market risk, other than where such other Lehman Brothers companies were unable or fail to pay for their obligations under the hedging arrangements (as set out under Risk Factors). Employees LBEF has no employees. Organisational Structure LBEF is a subsidiary of LBHI. LBEF acts in co-ordination with its Lehman Brothers affiliates. Certain of its operations have been delegated under the terms of service agreements to such affiliates. Pursuant to resolutions of members of the Executive Committee of the Board of Directors of LBHI on 9 June 2005 LBHI fully guarantees the payment of all liabilities, obligations and commitments of LBEF. The accounts of LBEF are audited by independent external auditors and additional measures are in place to prevent mismanagement of LBEF by its parent company. A

11 Recent Developments/Trend Information Since 30 November, 2006, the date to which the latest audited financial statements of LBEF were prepared, there has been no significant change in the financial position of LBEF, and there has been no material adverse change in the prospects of LBEF. Outlook LBEF is not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a materially adverse effect on LBEF s prospects for the current financial year. Management Directors of LBEF The Directors of LBEF are as follows: (a) Urs Bressan, whose business address is at Talstrasse 82, CH-8021 Zurich (Switzerland); Principal Outside Activities: Urs Bressan is also Director of Lehman Brothers (Luxembourg) S.A. and Executive Director of Lehman Brothers Inc. (b) Leonard Murray Fuller, whose business address is at Talstrasse 82, CH-8021 Zurich (Switzerland); Principal Outside Activities: Leonard Murray Fuller is also Director of Lehman Brothers AB, Director, Chief Administrative Officer and Authorized Signatory of Lehman Brothers Finance S.A., Director of Lehman Brothers Treasury Co. B.V. and Executive Director of Lehman Brother Inc. (c) Ian Robert Maynard, whose business address is at 25 Bank Street, London E14 5LE (Great Britain); Principal Outside Activities: Ian Robert Maynard is also Director of LBPB Nominees Limited, Director of Lehman Brothers GCS Financing, Director of Equilend Europe Ltd and Managing Director of Lehman Brothers Inc. (d) Jorge Perez Lozano, whose business address is at 1 Allee Scheffer, L-2520, Luxembourg (Grand Duchy of Luxembourg); Principal Outside Activities: Jorge Perez Lozano is also a director of TMF Corporate Services S.A. (e) TMF Corporate Services S.A., the business address of which is at 1 Allee Scheffer, L-2520, Luxembourg (Grand Duchy of Luxembourg). A

12 Board Practices LBEF complies with the corporate governance regime under the laws in Luxembourg. Shareholders' and board meetings take place in accordance with the rules set out in the Articles of Association of LBEF and the laws of the Grand Dutchy of Luxembourg. Conflicts of interest There are no conflicts of interest between any duties of the directors of LBEF and their respective private interests or other duties that would materially adversely affect the results and operations of LBEF. Share Capital The subscribed capital of LBEF is set at fifty thousand American Dollars (USD 50,000), divided into five hundred (500) registered shares pursuant to Luxembourg law with a par value of one hundred American Dollars (USD 100) each, fully paid up (by 100%). The issued share capital is held by LBHI (499 shares) and Lehman Brothers U.K. Holdings (Delaware) Inc. (1 share), which is in turn wholly-owned by LBHI. Material Contracts No specific contract has been to the date of this Registration Document entered into outside the ordinary course of LBEF s business, which would result in LBF being under an obligation that is materially detrimental to LBEF s ability to meet its obligations. Legal and Arbitration Proceedings LBEF is not and has not been involved in any governmental, legal or arbitration proceedings which may have, or have had during the 12 months preceding the date of this Registration Document, any materially adverse effect on LBEF s financial position or prospects nor, so far as LBEF is aware, are any such proceedings pending or threatened. A

13 Year - End Financial Information SUMMARY FINANCIAL INFORMATION OF LBEF The following tables set forth financial information of LBEF for the periods indicated. The selected financial information is extracted from the Annual Accounts and Independent Auditor s Report for the year ended 30 November, 2006 containing the financial figures for the year ended 30 November 2006 and the comparable figures for the year ended 30 November 2005 (with respect to the 2006 figures) and from the Audited Financial Statements as of 30 November 2005 containing the financial figures for the year ended 30 November 2005 and the comparable figures for the year ended 30 November 2004 (with respect to the 2005 figures). AUDITED PROFIT AND LOSS ACCOUNT DATA Year ended 30 Year ended November 30 November (in US $ thousands) Realized result on certificates issued (745,017) (4,356) Realized result on total return swap 732,715 (710) Unrealized result on certificates issued (10,022) 0 Unrealized result on total return swap 10,022 0 Interest income 12,374 5,103 NET PROFIT BEFORE TAXATION Taxation on profit on ordinary activities (21) (11) PROFIT AFTER TAX ON ORDINARY ACTIVITIES PROFIT FOR THE FINANCIAL PERIOD AUDITED BALANCE SHEET DATA At 30 November 2006 At 30 November 2005 (in US $ thousands) ASSETS Current Assets Debtors Amounts owed by affiliated undertakings ,207 Other debtors 10, ,765 12, ,765 12,207 A

14 LIABILITIES Capital and reserves Subscribed capital Legal reserve 5 5 Profit Brought forward Profit for the financial period Provision for taxation Certificates issued 66,650 0 Creditors due and payable within one year Amounts owed to affiliated undertakings 59,923 12, ,765 12,207 AUDITED CASH FLOW DATA Year ended 30 November 2006 Year ended 30 November 2005 (in US $ thousands) Cash flows from operating activities Net Profit before extraordinary item Adjustments for: Interest (12,374) (5,103) Decrease/(Increase) in receivable from affiliated companies (104,536) 220,324 (Decrease)/Increase in liabilities arising with derivative transactions 0 (3,017) Decrease/(Increase) in liabilities arising with derivative transactions (10,022) 0 (Decrease)/Increase in amounts owed to affiliated undertakings 47,836 (62,402) Cash generated (used) in operations (79,045) 149,828 Interest received 12,374 5,103 Increase in provision for tax liabilities Net cash used in operating activities (66,650) 154,942 Cash flows from investing activities Proceeds from (redemption)/issuance of certificates 66,650 (154,942) Net cash from investing activities 66,650 (154,942) Cash flows from financing activities Proceeds from issuance of share capital 0 0 Net cash from financing activities 0 0 Net increase in cash and cash equivalents 0 0 Cash and cash equivalents at beginning of period 0 0 Net Cash and cash equivalents at end of period 0 0 A

15 DOCUMENTS ON DISPLAY The following documents, or copies thereof, will be available for physical inspection during normal business hours on any weekday (Saturdays and public holidays excepted), free of charge, during the life of this Registration Document * at the office of The Bank of New York, Filiale Frankfurt am Main, Niedenau 61-63, Frankfurt am Main, Germany, and Lehman Brothers International (Europe), Frankfurt Branch, Rathenauplatz 1, Frankfurt am Main, Germany (a) (b) (c) (d) This Registration Document and any supplement to a prospectus which incorporates this document, where any such supplement relates to the content of this document; By-laws of LBEF; any reports, letters and other documents, historical financial information, valuations and statements prepared by any expert at LBEF's request, any part of which is included or referred to in this Registration Document; Audited Financial Statements as of 30 November 2006; and (e) Annual Accounts and Independent Auditor s Report as of November 30, * This document is valid for the period of twelve month from the date of its publication and is to be read and construed with any supplement to a prospectus which incorporates this document, where any such supplement relates to the content of this document. A

16 ANNEX A: AUDITED FINANCIAL STATEMENTS AS OF 30 NOVEMBER 2006 The Audited Financial Statements as of 30 November 2006 are reproduced on the following pages and for the purpose of this Registration Document separately paginated (11 pages in total, from page A-2 through page A-12). A A - 1

17 A-2

18 A-3

19 A-4

20 A-5

21 A-6

22 A-7

23 A-8

24 A-9

25 A-10

26 A-11

27 A-12

28 ANNEX B: ANNUAL ACCOUNTS AND INDEPENDENT AUDITOR S REPORT AS OF NOVEMBER 30, 2005 The Annual Accounts and Independent Auditor s Report as of November 30, 2005 are reproduced on the following pages and for the purpose of this Registration Document separately paginated (9 pages in total, from page B-2 through page B-10). A B - 1

29 B-2

30 B-3

31 B-4

32 B-5

33 B-6

34 B-7

35 B-8

36 B-9

37 B-10

38 NAMES AND ADDRESSES REGISTERED OFFICE OF LBEF Lehman Brothers (Luxembourg) Equity Finance S.A. 1 Allee Scheffer L-2520 Luxembourg SIGNATURE PAGE Lehman Brothers (Luxembourg) Equity Finance S.A. Luxembourg, 28 August 2007 By Authorised Signatory [IAN MAYNARD] Authorised Signatory [BHAVESH DATTANI] - S-1 -