GROUPAMA / 2019 Universal Registration Document

7 FINANCIAL STATEMENTS Annual financial statements and notes

Investment income and expenses 3.2.3 Financial income includes the revenue from investments received during the fiscal year(rent, dividends,couponpayments,intereston loans andcurrentaccounts). Other investment income includes the pro-rata share in the discount on the bond redemption differences and reversals of reserves for loss in valueof investments. Other investmentexpenses include the percentageof appreciation on the differences in redemption of bonds, and the depreciation allowance and reserves for investments, and the percentage of overhead expenses corresponding to investment-management activities. The capital gains or losses on marketablesecuritiesare determined by applying the first-in first-out method (FIFO), and they are recorded in the incomestatement. For these same securities, a reversal is made during the year they are sold for the accumulated amortisation of the premium or discountrecorded upto the dateof sale. In non-life insurance, investment income and expenses are recorded on the non-operating income statement. A portion of financial income reverting to technical reserves is transferred to the non-life technical income statement on a basis prorated to thetechnicalreservesand equity. 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 2019 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. Details areprovidedin Note 16. Intangible assets 3.3.1 Intangible assetsmainly consist of: IT developmentexpensesamortisedover a periodof 3 to 5 years ● by the straight-line method; acquiredsoftwareamortisedover 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-linemethod. The software carries a reserve, if necessary, to recognise an additional impairment deemed to be irreversible at the yearend. Management fees and commissions 3.3.2 Managementfees incurredby GroupamaAssurancesMutuellesare recorded according to their nature within the de facto Groupama Assurances Mutuelles group; expenses pertaining to other members of the de facto group are billed back to them. They are then classified for the presentation of the financial statements accordingto their purpose,by applyingallocationkeys. These keys are determinedanalyticallyand reviewed annually according to the Groupama Assurances Mutuelles internal structure and organisation. Other transactions 3.3

The managementcosts are classifiedunder one of the followingfive categories: claims settlement costs, which specifically include claims ● servicesexpensesand claimsdisputeexpenses; 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; administrativecosts, which include a portion of the commissions ● of the regional mutuals and management expenses for direct businessand inward reinsurance; investment expenses, which specifically include investment ● management services, including fees, commissions and brokerage commissions paid; 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. Foreign currency transactions 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 Receivablesare 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):

premiums yet tobe written for policyholders, ● premiums yet tobe cancelled forpolicyholders, ● premiums yet tobe collected frompolicyholders, ● loans or advancesfromco-insurers; ● for inwardreinsuranceoperations: ●

the Groupama Assurances Mutuelles share in the premiums ● yet to be written, and in the premiumsto be cancelledby the ceding entities (notably the regional mutuals), net of reinsurance, loans or advanceswith the ceding entities, ● receivables due relating to transactions accepted from the ● ceding entities; for outward transactions: ● loans or advancesto outward reinsurers, ● income owed relating to transactions ceded to outward ● reinsurers;

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Universal Registration Document 2019 - GROUPAMA ASSURANCES MUTUELLES