AFD // 2021 Universal Registration Document

CONSOLIDATED FINANCIAL STATEMENTS 6 Notes to the consolidated financial statements

AMENDMENTS TO IAS 39, IFRS 9 AND IFRS 7 “CHANGES IN CRITERIA FOR HEDGE ACCOUNTING REQUIREMENTS” The index transition project began in early 2019 under the responsibility of the Finance Department with the participation of all relevant departments (Operations, Legal, Risks, Information Systems and Communication) at AFD Group. At the same time, the proposals and recommendations of market players were regularly monitored. Equally, working groups of central banks and authorities as well as a customer communication plan were initiated. Since September ɸ 2020, the work relating to the operational and systems impacts has been integrated into the “information transformation” programme of the Group Finance Department and Risk Department. The FCA (Financial Conduct Authority) announced the end dates of the LIBORs on 30 ɸ November 2020: P 31 ɸ December 2021 for all maturities of GBP, JPY, CHF, EUR LIBOR and for USD LIBOR 1W and 2M (one week and two months); P 30 ɸ June 2023 for other maturities of USD LIBOR (1M, 3M, 6M and 12M). Following the FCA’s announcement of the end of the USD LIBOR publication in June ɸ 2023, and the initiatives to support the SOFR, two important events took place during the third quarter of the year: P the ARRC, Alternative Reference Rates Committee, in charge of identifying a replacement rate for USD LIBOR, formally recommended the CME Term SOFR as the replacement rate for USD LIBOR for bilateral and syndicated loans; P the FCA, the UK Financial Conduct Authority, formally prohibited the use of USD LIBOR from 1 ɸ January 2022 for new loan agreements. The CME Term SOFR recommendation is an important milestone towards the end of USD LIBOR. The CME Term SOFR has a pre set structure, known at the beginning of the interest period, like the USD LIBOR, which reduces the impact of the transition and was a key element in the decision of the ARRC. Other SOFR based alternatives were put forward, such as the Compound or Average SOFR. However, these rates are post-set, i.e. known at the end of the interest period, which requires a profound transformation of practices and significant changes to the operating systems and elicited the reluctance of market players. AFD closely monitors changes in the SOFR market and is in favour of the CME Term SOFR, in line with the official recommendations. New agreements in USD will be offered on the basis of the CME Term SOFR rate. All our new agreements have included fallback provisions since early ɸ 2020. As regards previous contracts, as a European institution, our agreements being established under French law, the revision of the Benchmark Regulation would cover a significant portion of legal risks. The European Commission has revised the Benchmark Regulation to introduce a “prescriptive” fallback clause, whereby the Commission grants itself the possibility of determining the replacement rate for all contracts in stock of European establishments without adequate fallback clauses. Contracts in inventory under French law are within the scope of the regulation revision. The same actions are being

undertaken across the Channel and the Atlantic (Great Britain and the United States). In September ɸ 2019, the IASB introduced amendments to IAS ɸ 39, IFRS ɸ 9 and IFRS ɸ 7 for the first phase of the IBOR reform, which changes the requirements of the criteria for using hedge accounting by allowing the continuation of hedging relationships existing before the effective implementation of that reform. These amendments were adopted by the European Commission on 15 ɸ January 2020 with mandatory application for the 2020 financial statements. In August ɸ 2020, the IASB published “Phase ɸ 2” amendments, clarifying that amendments related solely to changes in interest rates as part of the reform must not lead to an interruption in hedging relationships. In addition, the data were surveyed and analysed. It was found that the rates the AFD Group is largely exposed to in its hedging relationships are EONIA, EURIBOR and LIBOR. For these hedging relationships, the hedged and hedging instruments will be progressively amended, when necessary, in order to incorporate the new rates. The “Phase ɸ 1” amendments to IAS ɸ 39 and IFRS ɸ 7 are applicable when the contractual terms of the hedged instruments or hedging instruments have not yet been amended. Conversely, the “Phase ɸ 2” amendments are applicable once the contractual terms of the hedged instruments or hedging instruments have been amended, and the terms and date of transition to the new benchmark interest rates have been clearly stipulated. New overnight benchmark rates are published for the Yen: the TONAR (Tokyo Overnight Average Rate); for sterling: the SONIA (Reformed Sterling Overnight Index Average); and for the CHF: the SARON (Swiss Average Rate Overnight). Since October ɸ 2019, the ECB (European Central Bank) has published the €STR, the Euro Short-Term Rate, which will replace the EONIA on 3 ɸ January 2022. The documentation of the micro-hedging relationships was carried out on the basis of the EONIA discount rate as at 31 ɸ December 2020 and the €STR as at 31 ɸ December 2021. Also, the change in the benchmark rate for the derivatives portfolio (not eligible for hedge accounting and so-called “natural” hedges) resulted in the transition from the EONIA discount rate (€STR + ɸ 8.5 ɸ bps) at €STR flat (EUR). As at 31 ɸ December 2021, the net impact of these changes on the Group’s financial statements was immaterial. EXTENSIONOFTHEAPPLICATIONOFAMENDMENTS TO IFRS 16 “LEASES” – COVID-19-RELATEDRENT CONCESSIONS BEYOND 30 JUNE 2021 These amendments extend by one year the period of application of the amendments to IFRS ɸ 16 “Leases” relating to the Covid-19 crisis published by the IASB on 28 ɸ May 2020. They are intended to allow tenants benefiting from rent concessions in the context of the Covid-19 pandemic to not analyse whether the concessions granted to them should be recognised as lease amendments (which would imply a deferral of the effects of the benefit granted over the term of the lease) but, rather, to recognise these reductions as negative variable rents (generating an immediate gain in income).

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2021 UNIVERSAL REGISTRATION DOCUMENT