GROUPAMA / 2018 Registration document

7 FINANCIAL STATEMENTS

ANNUAL FINANCIAL STATEMENTS AND NOTES

The capital gains or losses on marketable securities are determined by applying the first-in first-out method (FIFO), and they are recorded in the income statement. For these same securities, a reversal is made during the year they are sold for the accumulated amortisation of the premium or discount recordedup to the date ofsale. In non-life insurance, investment income and expenses are recorded on thenon-operating incomestatement. A portion of financial income reverting to technical reserves is transferred to the non-life technical income statement on a basis prorated to thetechnical reserves andequity. Forward sale financial instruments 3.2.4 Forward financial instrumentsare recorded in accordancewith the accountingrules of CRC Regulation2002-09.The forward financial instruments held by Groupama Assurances Mutuelles as of 31 December 2018 are total return swaps used as part of yield strategies. Expenses and income related to total return swaps are spread on a straight-line basis over the expected duration of the strategy. Detailsare provided inNote 16. 3.3.1 Intangibleassets mainly consistof: IT development expenses amortised over a period of 3 to ❯ 5 years by thestraight-line method; acquiredsoftware amortisedover a period of 1 to 4 years by the ❯ straight-line method; developed software amortised over a period of 3 or 4 years by ❯ the straight-line method. The software carries a reserve, if necessary, to recognise an additional impairmentdeemedto be irreversibleat the year end. Management fees and commissions 3.3.2 Management fees incurred by Groupama Assurances Mutuelles are recorded according to their nature within the de facto Groupama Assurances Mutuelles group; expenses pertaining to other membersof the de facto group are billed back to them. They are then classified for the presentation of the financial statements accordingto their purpose, byapplying allocationkeys. These keys are determinedanalytically and reviewed annually according to the Groupama Assurances Mutuelles internal structure and organisation. The management costs are classified under one of the following five categories: claims settlement costs, which specifically include claims ❯ services expenses andclaims dispute expenses; acquisition expenses, which factor in a part of the commissions ❯ of the regional mutuals, commissions paid for direct business and other inward reinsurance, advertising, and marketing expenses; Other transactions 3.3 Intangible assets

administrativecosts, which include a portion of the commissions ❯ of the regional mutuals and management expenses for direct business andinward reinsurance; investment expenses, which specifically include investment ❯ management services, including fees, commissions and brokeragecommissionspaid; other operating expenses, which include expenses that cannot ❯ be assigned directly or by applying a cost to one of the other categories. Expenses arising from activities with no operating connectionwith the insurance business are reported as other non-operating expenses. Foreigncurrencytransactions 3.3.3 In accordance with Article 243-1 of ANC Regulation 2015-11, operational foreign currency position accounts, converted at the inventory price and the equivalent in euros, are offset against foreign exchange income. For structural transactions, the foreign exchange difference is posted to the balance sheet in unrealised foreign exchange adjustment accounts. Receivables 3.3.4 Receivables are recorded at their face redemption value (historical cost). They specifically include: for direct insuranceoperations(these concern non-life insurance ❯ operations in co-insurance and co-reinsurance groupings and the operations of the regional mutual of Antilles Guyane not having administrative authorisation to carry out insurance operations): The Groupama Assurances Mutuelles share in the premiums ■ yet to be written, and in the premiums to be cancelled by the ceding entities (notably the regional mutuals), net of reinsurance; loans or advances withthe cedingentities, ■ receivables due relating to transactions accepted from the ■ ceding entities; for outwardtransactions: ❯ loans or advances to outwardreinsurers, ■ income owed relating to transactions ceded to outward ■ reinsurers; for the other receivables: ❯ tax combinationloans oradvances to daughtercompanies, ■ receivables from government bodies and social security ■ agencies, premiums yetto be written for policyholders; ■ premiums yetto be cancelled for policyholders; ■ premiums yetto be collected from policyholders; ■ loans or advances from co-insurers; ■ for inwardreinsurance operations: ❯

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REGISTRATION DOCUMENT 2018 - GROUPAMA ASSURANCES MUTUELLES