BIC - 2018 Registration document

FINANCIAL STATEMENTS

Statutoty Auditors' Report on the consolidated financial statements

Impairment test of the Cello Pens goodwill (Note 10 to the consolidated financial statements) Risk identified Our answer Goodwill represents an important part of the total assets of the Bic Group (€ 277 million out of € 2 352 million at December 31, 2018). The assessment of the recoverability of those goodwill, especially the one related to the most recent acquisition (Cello in India – € 96 million), is a matter of attention for management as the underlying business plan is ambitious reflecting existing opportunities in the country. In the course of the year 2018, the company decided to impair this goodwill for an amount of € 69 million. A high degree of judgement is exercised by management around the assumptions used to determine the value in use of the cash generating unit (“CGU”) to which the Cello Pens goodwill has been allocated and which was determined using discounted cash flows of the Cello Pens CGU. We have therefore considered the Cello goodwill valuation as a key audit matter. The main assumptions used to determine the value in use as well as the sensitivity analysis for the main parameters (discounted cash flows, discount rate and perpetual growth rate) are presented in Note 10 to the consolidated financial statements.

We have examined how the CGUs’ value in use were determined with a specific focus on the Cello Pens’ value in use. Besides the assessment of management’s competency and objectivity, we have performed certain specific audit procedures: Testing of internal control related to the preparation of the future cash flows forecast. Verifying consistency of the main data used in the future cash flows determination comparing them with the historical performance and the CGU strategical plan validate by the appropriate level of governance. Corroborating the perpetual growth rate and discount rate used in the impairment test with the expertise of our valuation specialists.

IV.

SPECIFIC VERIFICATIONS

As required by law we have also verified in accordance with professional standards applicable in France the information pertaining to the Group presented in the management report of the board of directors. We have no matters to report as to its fair presentation and its consistency with the consolidated financial statements. We attest that the consolidated non-financial statement required by Article L.225-102-1 of the French Commercial Code is included in Group management report, being specified that, in accordance with the provisions of Article L.823-10 of the code, we have not verified the fair presentation and the consistency with the consolidated financial statements of the information contained therein and should be reported on by an independent insurance services provider.

V.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

Appointment of the Statutory Auditors We were appointed as statutory auditors of company Bic during the annual general meeting held on May 4, 1999 for Deloitte & Associés and May 23, 2007 for Grant Thornton. As at December 31, 2018, Deloitte & Associés and Grant Thornton were in the 20 th year and 12 th year of total uninterrupted engagement respectively.

VI.

RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED

WITH GOVERNANCE FOR THE CONSOLIDATED FINANCIAL STATEMENTS Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the European Union and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless it is expected to liquidate the Company or to cease operations. The Audit Committee is responsible for monitoring the financial reporting process and the effectiveness of internal control and risks management systems and where applicable, its internal audit, regarding the accounting and financial reporting procedures. The consolidated financial statements were approved for issuance by the Board of Directors.

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• BIC GROUP - 2018 REGISTRATION DOCUMENT •