GROUPAMA / 2020 UNIVERSAL REGISTRATION DOCUMENT

7 FINANCIAL STATEMENTS Consolidated financial statements and notes

lease and manage properties occupied by at least one member; ❯ provide its members with all general services; ❯ assist its members with their purchasing strategy and ❯ relationships with Group suppliers. Most servicesprovidedby the EIG are exempt fromVAT, except for services corresponding to the supply of goods. The members of the EIG, which are not charged VAT, are mainly the regional mutuals, Groupama Assurances Mutuelles, and the French insurance subsidiaries.Non-membercustomers,which are charged VAT, are mainly Group financial management companies and international subsidiaries and, where appropriate, entities outside the Group affiliated through partnership agreements with Groupama. IT services provided by G2S to the Group’s entities are invoiced based on the following principles: G2S, as an EIG, invoicesall of its costs, whether they be its own ❯ operating costs, costs that are chargedby other groupentitiesor costs of technical resources acquired on behalf of thiprdarties; all costs are allocated according to a defined list of services ❯ (operating services, project services) that cover all areas of operationof the EIG. Invoicedamountsare determinedbased on the following conditions: charged directly when possible; ■ otherwise, according to allocation keys that can be modified ■ each fiscal year if necessary, the principle of which is determined by G2S for each cost category based on significant criteria. Special governancewas put into place to ensure the relevanceand stability of these invoicingkeys. These are reviewedregularlyby two different advisory bodies, depending on the nature of the services. Operating services are reviewed by the “Keys Committee” which brings together IT Managers from member companies of the inter-company venture and the various services of the venture in charge of developing and implementing invoicing keys. For projects, invoicing keys are reviewed by “Business Domain Committees”. Any proposed amendment issued by one of these committees is subject to approval by the Board of Directors of the EIG. Furthermore, a review of the invoicing keys is carried out with the management controllersof the EIG for validation of the distribution of the final invoice, and with the Tax Department to ensure compliance with the VAT regulations. The auditors also ensure the expenses of the EIG undergo correct analytical allocation for billing. Based on the provisionabove, €360.9 millionexcluding taxes were billed at 31 December2020, €128.7 millionof which to the regional mutuals.

Orange Bank 2.3 The relations between Orange Bank, of which Groupama Assurances Mutuelles indirectly holds 24.14% of the capital at 31 December 2020, and the regional mutuals are governed by a distribution agreement, periodic compensation agreements, and IOBSP mandates. Distribution agreement (a) A distribution agreement was entered into between Groupama Assurances Mutuelles and Orange Bank, which each of the distributing entities of the Groupama group, including the regional mutuals, join individually. This agreement defines the respective roles of the bank and the distributor relating to the marketing of Orange Bank’s banking products. The distributor is licensed by Orange Bank to market its products within the framework of the financial intermediary mandate (IOBSP) setting out the delegated operations that the distributor is solely authorisedto perform.Delegatedoperationsare operations to present Orange Bank’s banking products and to support customers who wish to subscribe to these products (for example, consumer credit), as Orange Bank has the sole capacity to accept requests to subscribe to its banking products. By joining this agreement,each distributorundertakesa number of commitmentsaimed at achievingthe bankingbusinessgrowthplan in a controlled manner: mobilising the necessary workforce and seeing to it that they are trained, applying the quality charter, deploying an internal control system as well as a system to fight money laundering, etc. This distribution agreement was entered into for an initial term of 10 years. It may be renewed for three-year periods. A periodic compensation agreement (b) This agreement supplements the distribution agreement on the points needing periodic updating: annual production targets of each of the distributors, compensation, qualitoybjectives, etc. The distributors are compensated from the net banking income generated by the products held by customers less the payment processing costs and a percentageof the distributioncosts related to the bank’s remote sales centre. The net banking income earned by Orange Bank under its agreements amountedto €69.7 millionin 2020. The fees earnedby the regional mutuals amounted to €21.7 million. 2.4 The purpose of Groupama Supports & Services is to facilitate the economic activities of its members, improve or increase the results of these activities by sharing and optimising IT, logistics and purchasing activities. To this effect, the role of G2S is to: undertake any preliminarystudies and perform, at the request of ❯ its members, all the IT work necessary for the exercise of their business; ensure the operationand maintenanceof IT systemson behalf of ❯ its members; Groupama Supports and Services (G2S)

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Universal Registration Document 2020 - GROUPAMA ASSURANCES MUTUELLES