Plastic Omnium - 2020 Universal Registration Document

CONSOLIDATED FINANCIAL STATEMENTS 2020 Consolidated financial statements at December 31, 2020 www.plasticomnium.com PLASTIC OMNIUM UNIVERSAL REGISTRATION DOCUMENT 2020 200 Operational items 1.3 Segment information 1.3.1 Segment information is presented on the basis of the segments identified in the Group’s internal reporting and notified to the management in order to decide on the allocation of resources and to analyze performance. The Group has two operating segments: “Industries” and “Modules”. Revenue/“Revenue from contracts with customers” 1.3.2 Since January 1, 2018, the Group has applied IFRS 15 “Revenue from Contracts with Customers”. SALES OF PARTS Agreements signed with customers in the context of the development and supply of parts do not meet the criteria of a contract within the meaning of IFRS 15; in general, only firm orders received from customers are analyzed as contracts creating a performance obligation. Sales of parts are recognized when the significant risks and rewards of ownership of the goods are transferred to the buyer, usually upon delivery of the goods, and measured at the fair value of the consideration received, net of discounts, rebates and other taxes on sales and customs duties. SERVICES AND CREATION OF SPECIFIC TOOLING The project phase corresponds to the period during which the Group is working on the development of the part to be produced, on the design and manufacture of specific tooling to be used in production as well as on the organization of future production processes and logistics. It begins with the selection of the Group for the vehicle and the product concerned and is completed when the normal production volume is reached. The accounting treatment applied is based on the identification by the Group in most cases of two performance obligations, distinct from the production of parts, under the Design business and the supply of certain specific tooling whose control is transferred to clients. Products, including those explicitly included in the part price, are recognized at the start of production life. Payments received before the start of series life are recorded in customer advances. The costs related to these two performance obligations are recognized in inventories during the project phase and then in expenses when their control is transferred to the client, i.e. when series production is launched. Operating margin 1.3.3 The Group presents an operating margin in the income statement before taking into account the following items: the amortization of intangible assets related to acquisitions as part of ● business combinations; and the share of income of associates and joint ventures. ● The Group also presents an operating margin after taking these elements into account. Development expenses”, see Notes 4.1 “Research and Development expenses” and 4.2 “Costs of goods and services sold, development, selling and administrative costs”). The first aggregate corresponds to revenue less direct selling costs, Research and Development, selling and administrative costs. The “Net Research and Development expenses” include tax credits related to the research effort of the Group and its subsidiaries. These tax credits are included in the operating margin under the item “Net Research and The second aggregate includes the share of income of associates and joint ventures presented on a separate line and the impacts related to the amortization of customer contracts and brands acquired in the context of business combinations also presented on a separate line of the income statement. The Group main operating indicator used after taking into account the amortization of intangible assets related to acquisitions and the share of income of associates and joint ventures, is the “operating margin” in the income statement. The operating margin does not include other operating income and expenses (see Note 1.3.4). Other income and expenses 1.3.4 Other operating income and expenses essentially include: the results of the disposal of property, plant, equipment and intangible ● assets; provisions for the impairment of property, plant, equipment and intangible ● assets, including any impairment of goodwill; exchange rate differences arising from different currency rates between ● those used to recognize operating receivables and payables and those recorded when these receivables and debts are settled; unusual items corresponding to non-customary income and expenses ● due to their frequency, nature or amount, such as profits and losses realized in the context of changes in the scope of operations, pre-start-up costs for large new plants, restructuring costs and those related to employee downsizing measures. Recognition of transactions in foreign currencies 1.3.5 Transactions in foreign currencies are initially recorded in the functional currency at the rate on the transaction date. On the closing date, monetary assets and liabilities are revalued at the rates prevailing at the closing date. Non-monetary assets and liabilities are valued at historic cost, prevailing at the transaction date (for example: goodwill, property, plant and equipment, inventories). Non-monetary assets and liabilities at fair value are valued at the rates prevailing at the date when fair value is determined. For monetary items, exchange rate differences arising from changes in foreign exchange rates are recorded in the income statement, as other operating income and expenses, when they relate to operations and as financial income/expenses when they relate to financial transactions. Inventories and work in progress 1.3.6 RAW MATERIALS INVENTORIES AND OTHER SUPPLIES 1.3.6.1 Raw materials and other supplies are measured at the lower of cost and net realizable value. At the end of the fiscal year, a provision for impairment is recorded when the estimated sales price of the finished products for which they are used in the normal course of business, less the residual estimated marketing, production and processing costs, is less than the carrying amount of the raw materials or supplies.