GROUPAMA / 2019 Universal Registration Document

7 FINANCIAL STATEMENTS Consolidated financial statements and notes

deconsolidation. Subsequent changes in values are recorded in accordancewith the methodologydefined for this type of securities. List of entities included in the scope 2.3.2 of consolidation and changes The list of entities included in the scope of consolidation of the Group’s financial statements and the changes in this scope are describedNote 51 to the financial statements. Uniformity of accounting principles 2.3.3 The Groupama Assurances Mutuelles consolidated financial statementsare presented consistentlyacross the entity formed by the companies included within the scope of consolidation, taking into account the characteristics inherent in consolidation and the financial reporting objectives required for consolidated financial statements (predominanceof substance over form, elimination of local tax accounting entries). Restatementsunder the principles of consistency are made when they are material. Conversion of financial statements 2.3.4 of foreign companies Balance sheet items are translated to euros (the functional and presentation currency of the Group’s financial statements) at the official exchangerate on the balancesheet date, with the exception of shareholders’equity,excludingnet income,which is translatedat historic rates. The Group share of the resulting unrealised foreign exchange adjustment is recorded under “Unrealised foreign exchange adjustments”, and the remaining balance is included in “Non-controlling interests”. Transactions on the income statements are translated at the average rate. The Group share of the difference between income translatedat the average rate and income translatedat the closing rate is recorded under “Unrealisedforeign exchange adjustments”, and theremainingbalance is includedin “Non-controlling interests”. All transactions within theGroup are eliminated. When these transactions affect consolidated income, the eliminationof profits and losses as well as capital gains and losses is done at 100% then divided between the interests of the consolidating company and the non-controlling interests in the company having generated the income. When eliminating losses, the Group ensures that the value of the disposed asset is not changed for the long term. Eliminating the impacts of internal transactions involving assets brings them down to their original value when they entered the consolidated balance sheet (consolidated historical cost). Thus, inter-company transactions on the following must be eliminated: reciprocalreceivablesand payablesas well as reciprocal income ● and expenses; Internal transactions 2.3.5 between companies consolidated by Groupama Assurances Mutuelles

Consolidating company (a) A consolidatingcompany is one that exclusively or jointly controls other companies, regardless of their form, or that has a considerableinfluence over othercompanies. Controlled entities (b) Controlled entities are fully consolidated. These entities are consolidatedonce they are controlled.An entity is controlledwhen the consolidatingcompanyholds power over this entity, is exposed or is entitled to variable returns because of its ties with this entity, and when it has the ability to exercise its power over this entity in order to havean influence on the amount of returns that it obtains. An entity ceases to be fully consolidated once the consolidating company loses control of this entity. Full consolidation involves: integratingin the consolidatingcompany’saccountsthe items in ● the financial statements of the consolidated entities, after any restatements; eliminating transactions and accounts between the fully ● consolidated companyand the otherconsolidated companies; distributing shareholders’ equity and net income among the ● interests of the consolidatingcompany and the interests of the holders of minority interests. Related companies and joint ventures (c) Investments in associates in which the Group has a significant influenceand investmentsin joint venturesare accountedfor under the equity method. When the consolidatingcompany holds, directly or indirectly, 20% or more of the voting rights in an entity, it is assumed to exert significantcontrol, unless it is otherwisedemonstrated.Conversely, when the consolidating company directly or indirectly owns less than 20% ofthe voting rights ofthe entity, it is assumednot to exert a significant influence, unless it can be demonstrated that such influence exists. A joint venture is a partnership in which the parties who exercise joint control overthe entity have rights to its net assets. The consolidating company has joint control over a partnership when the decisions concerning the relevant activities of the partnership require the unanimous consent of the parties sharing control. The equity methodconsistsof replacingthe carryingamount of the shares held by the Group, the share of shareholders’ equity convertedat year end, includingthe net incomefor the fiscal yearin accordancewith consolidationrules. Deconsolidation (d) When an entity is in run-off mode (no longer taking new business) and the main aggregates of the balance sheet or the income statement are not significant compared with those of the Group, this entity isdeconsolidated. The securities of such entity are then posted on the basis of their equivalent value, under securities held for sale at the time of

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Universal Registration Document 2019 - GROUPAMA ASSURANCES MUTUELLES