AFD - Universal Registration Document 2020

CONSOLIDATED FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH IFRS Notes to the consolidated financial statements

micro-hedging relationships were tested at 31 Ǿ December Ǿ 2020 on the basis of a discount on the €STR and compared with the fair values of the statement based on an EONIA discount in order to simulate the impact on income of a hypothetical transition to the €STR. As a result of this work, the impact as at 31 Ǿ December Ǿ 2020 was not material. The other standards and interpretations applicable at 1 Ǿ January Ǿ 2020 had no significant impact on the Group’s financial statements at 31 Ǿ December Ǿ 2020. 6.2.3 Principles for the preparation of the consolidated fi nancial statements of the AFD Group at Ǿ 31 Ǿ December Ǿ 2020 6.2.3.1 Consolidation scope and methods 6.2.3.1.1 Scope of consolidation AFD’s consolidated financial statements cover all fully- controlled enterprises, joint ventures and companies on which the Institution exerts a significant influence. The following are not included in the consolidation scope: P companies of no real significance; P foreign companies in which AFD holds a minority interest and does not exercise significant influence due to the companies being either fully or partially state-owned. IFRS Ǿ 10-11-12 consolidation standards: Signi fi cant judgements and assumptions used in determining the scope of consolidation The elements used to draw a conclusion on whether AFD exercises control or influence over the entities in which it invests are many. Accordingly, the Group determines its ability to exercise influence over the management of another entity by taking due consideration of the entity’s structure, shareholders, arrangements and the participation of AFD and its subsidiaries in decision-making bodies. Moreover, materiality with regard to Group accounts is also subject to analysis. The list of companies in which AFD directly or indirectly holds an equity interest that exceeds 20% of the company’s share capital is presented on the following page.

the ECB (European Central Bank) has published the €STR, the Euro Short-Term Rate, which will replace the EONIA on 3 Ǿ January Ǿ 2022. Since April Ǿ 2018, the FED has published a new index for the overnight rate, the SOFR: Secured Overnight Financing Rate, based on the US Treasury repos market and which will serve as the basis for the replacement of the USD LIBOR rate. The majority of AFD Group’s positions are in USD LIBOR, which must transit before their maturity date. Several aspects of the transition remain to be implemented, however the success of the transition to new alternative rates will depend on their adoption by market participants and their liquidity. A liquid market on the new indices is the essential condition for the development of a market for derivatives, such as futures, which will serve as the basis for the creation of RFR rates with a forward structure to replace IBORs by 2022. All our new agreements have included fallback provisions since early Ǿ 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 Ǿ 2019, the IASB introduced amendments to IAS Ǿ 39, IFRS Ǿ 9 and IFRS Ǿ 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 Ǿ January Ǿ 2020 with mandatory application for the Ǿ 2020 financial statements. The transition of the clearing houses from the EONIA discount rate (€STR +8.5bps) to €STR flat (EUR) had a €2.5M impact on the Group’s financial statements at the end of Ǿ 2020. In August Ǿ 2020, the IASB published “Phase Ǿ 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. As a result, the AFD Group is mainly exposed to these hedging relationships at EONIA, EURIBOR and LIBOR rates. The

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2020 UNIVERSAL REGISTRATION DOCUMENT