Plastic Omnium - 2020 Universal Registration Document

2020 STATUTORY FINANCIAL STATEMENTS Statutory auditors’ report on the financial statements PLASTIC OMNIUM UNIVERSAL REGISTRATION DOCUMENT 2020 291 VALUATION OF EQUITY INVESTMENTS AND RECEIVABLES RELATED TO EQUITY INVESTMENTS Note "Accounting principles and methods - Equity investments and related receivables", note "C - Investments" and note "L - Depreciation, amortization and impairment" of the notes to the financial statements. Equity investments of Compagnie Plastic Omnium SE. amount to € 1 231 million as of December 31, 2020. KEY AUDIT MATTER As described in the note "Accounting principles and methods - Equity investments and related receivables" in the appendix to the financial statements, a provision for impairment is recorded when the value in use or the probable realization value is lower than the net book value. Value in use is determined by taking into account the share of net equity and profit outlook in view of current market conditions as set out in the subsidiaries’ medium-term business plans. As described in the note C « Investments » in the appendix of the financial statements, in the current context of the Covid-19 sanitary crisis and the decrease in business activity, impairment tests have been performed on subsidiaries’ equity investments. The valuation of equity investments is considered as a key audit matter given the importance of equity investments in the balance sheet and because of the judgments to be made by management to estimate the profit outlook of the subsidiaries, including those related to the health crisis linked to Covid-19 and the decrease in business activity. OUR RESPONSE Our work consisted in: Comparing the net book value of equity securities with the net equity of these companies; ● Reviewing the analyses conducted by your company; ● Examining the existence of indication of impairment by: ● Interviewing the Group’s Finance Department on the results and profit outlook of the different companies; ● reviewing the minutes of the meetings of the Board of Directors of Compagnie Plastic Omnium. ● Examining, when applicable, the valuation methodology and the arithmetical accuracy of the calculation of the recoverable value and verifying ● the consistency of assumptions used with the economic environment at the reporting and closing dates, in particular in the context of the Covid-19 pandemic and its impact on the profitability prospects of your company’s subsidiaries. Comparing the discount and long-term growth rates used to our internal databases with the help of our valuation specialists. ● SPECIFIC VERIFICATIONS We have also performed, in accordance with professional standards applicable in France, the specific verifications required by French law and regulations. INFORMATION GIVEN IN THE MANAGEMENT REPORT AND OTHER DOCUMENTS SENT TO SHAREHOLDERS ON THE FINANCIAL POSITION AND THE FINANCIAL STATEMENTS We have no matters to report as to the fair presentation and the consistency with the financial statements of the information given in the management report of the Board of Directors and in the other documents addressed to the shareholders with respect to the financial position and the financial statements. In accordance with French law, we report to you that the information relating to payment times referred to in Article D. 441-6 of the French Commercial Code ( Code de commerce ) is fairly presented and consistent with the financial statements.