AFD_REGISTRATION_DOCUMENT_2017

CONSOLIDATED FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH IFRS 6 Notes to the consolidated financial statements

Projected commitments at 31bDecember 2018bare as follows:

Actuarial debt at 31/12/2017 Cost of services rendered in 2018

43,983

80,733

15,490

140,206

964 129

141,170

198 221

3,764 1,690

1,240

5,201 2,226

5,331 2,247

Financial cost in 2018

315

21

Services payable in 2018/transfer of capital upon departures in 2018

-9,661

-1,838

-1,113

-12,613

-80

-12,693

Estimated debt at 31/12/2018

34,740

84,349

15,932

135,020

1,034

136,054

6.2.3.2.5.2 Impairments of loans and receivables Impairments of loans and receivables are recognised when there is clear evidence that a loan or receivable, or a portfolio of loans, has been impaired. Individual impairments Loans for which the rating system indicates that there is a proven risk (even if the loan is not in arrears) are analysed on a case- by-case basis, in order to calculate an individual impairment. The impairment is equal to the difference between the book value of the loan (outstanding principal plus unpaid interest and interest not yet due) and the sum of projected future cash flows discounted at the effective interest rate at loan origination. The recovery rate of future instalments is determined by the Group Risk Committee, and any guarantees are automatically booked alongside the final instalment. Guarantees include mortgages on land and buildings, deposits, endorsements and liens. Collective impairments Loans written down on a collective basis consist of all of the Group’s non-sovereign loans in foreign countries that are not written down on an individual basis. AFD writes down “homogeneous portfolios” whose amounts and any changes are determined based on qualitative and quantitative analyses (see paragraph 3.2.2 “Use of estimates”). At 31b December 2017, the portfolio is presented with a segmentation based on three sectors: public goods and services, financial sector and private goods and services. The Proparco portfolio is presented with a segmentation based on three sectors: public goods, financial sector and business, industry and trade. Residual outstandings were written down based on estimated residual loss for asset classes determined by borrower type and country category. Furthermore, a provision for liabilities was also recognised by AFD due to the economic crisis and political events in Côte d’Ivoire. This provision stood at €2.7M at 31bDecember 2017bcompared to €2.3M at the end of 2016, i.e . a provision allocation of €0.5M for 2017. Collective provision allocations for performing non-sovereign loans in foreign countries impacted positively on the cost of risk in the amount of €48.0M. The reversal amount takes account of the refining of the sub-participation loan portfolio in 2017. At 31bDecember 2017, total collective impairments stood at €365.9M and the loan loss reserve ratio for these outstandings was 5% overall, unchanged from 31bDecember 2016.

6.2.3.2.5.3 Subordinated debt In 1998, an agreement was reached with the French State whereby part of AFD’s debt to the French Treasury, corresponding to drawdowns between 1bJanuary 1990band 31bDecember 1997, was converted into subordinated debt. The agreement also provides for the general rescheduling of the debt’s repayment period over 20byears with a 10-year grace period, with any new borrowings after 1bJanuary 1998brecognised as subordinated debt (with a repayment period scheduled over 30byears and a 10-year grace period). In accordance with riders n°1 of 19bMarch 2015band n°2 of 24bMay 2016, on the initiative of the French State and per the third stage of additional financing of €280.0M, there was a drawdown of €160.0M on this last tranche of RCS (Resources with special conditions) in Septemberb2017. The drawdown of the balance of €120.0M is planned for Septemberb2018, thereby reaching the €840.0M total for the period 2015-2018. At 31bDecember 2017, the balance was thus €720.0M instead of the €840.0M initially planned by 2017. 6.2.3.2.5.4 Deferred taxes To produce the consolidated financial statements, deferred tax was calculated on a per-company basis while adhering to the rule of symmetry and using the comprehensive liability method. This method was applied to temporary differences between the carrying amount of assets and liabilities and their tax base. 6.2.3.2.5.5 Segment reporting In application of IFRSb8 Operating Segments, AFD has identified and reported on only one operating segment for its lending and subsidy activity, based on the information provided internally to the Chief Executive Officer, who is AFD’s chief operational decision-maker. This lending and subsidy-granting activity is the Group’s main activity, falling within the scope of its public service role of financing development assistance. 6.2.3.2.5.6 Cash flow statement principles The cash flow statement analyses changes in the cash position resulting from operating, investment and financing transactions from one year to the next. AFD’s cash flow statement is presented in accordance with ANC Recommendation nº 2013-04 respecting the format of summary statements for institutions in the banking sector drawn up in accordance with international accounting standards.

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REGISTRATION DOCUMENT 2017

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