BIC - 2020 Universal Registration Document

FINANCIAL STATEMENTS

Statutory auditors' report on the consolidated financial statements

III.

JUSTIFICATIONOF ASSESSMENTS - KEY AUDIT MATTERS

Due to the global crisis related to the Covid-19 pandemic, the financial statements of this period have been prepared and audited under specific conditions. Indeed, this crisis and the exceptional measures taken in the context of the state of sanitary emergency have had numerous consequences for companies, particularly on their operations and their financing, and have led to greater uncertainties on their future prospects. Those measures, such as travel restrictions and remote working, have also had an impact on the companies’ internal organization and the performance of the audits. It is in this complex and evolving context that, in accordance with the requirements of Articles L.823-9 and R.823-7 of the French Commercial Code ( Code de commerce ) relating to the justification of our assessments, we inform you of the key audit matters relating to risks of material misstatement that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period, as well as how we addressed those risks. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on specific items of the consolidated financial statements.

Impairment test of the Cello Cash Generating Unit (Note 10 “Goodwill” to the consolidated financial statements) Risk identified Our answer

The assessment of the recoverability of the Cash Generating Unit (CGU) of Cello in India is a matter of attention for management as the underlying business plan is ambitious, reflecting existing opportunities in the country, but also due to the strict health restrictions imposed by the Indian authorities during the year 2020. The Cello goodwill amounting to a 81 million euros gross value as of December 31,2020 had been fully depreciated in 2019. The annual impairment test performed by the management as of June 30, 2020, resulted in an additional depreciation for € 41.7m, allocated in proportion to the book value of the other assets of the CGU: €14.9m allocated to the brand and € 26.8m to property, plant and equipment. In December 2020 and as described in note 10 to the notes of the consolidated financial statements, due to the adverse business environment of Cello both in India and its major export markets, Bic performed an additional impairment test of the Cello CGU, which did not result in any additional impairment needed. 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”). This recoverable value, which corresponds to the value in use, is determined on the basis of discounted projections of future cash flows of the CGU. We have therefore considered the Cello CGU valuation as a key audit matter. The main assumptions used to determine the value in use are presented in Note 10 to the consolidated financial statements.

We have reviewed how the Cello CGU value in use was determined. Besides the assessment of management’s competency and objectivity, we have performed certain specific audit procedures, with the assistance of our specialists: Familiarizing ourselves with the internal control procedures related to • the preparation of the most recent Cello UGT future cash flows forecast; Verifying consistency of the main data used in the Cello CGU future • cash flows forecast comparing them with both the historical performance and the strategic plan validated by the appropriate level of governance; Corroborating the perpetual growth rate and discount rate used in the • impairment test with the available market data.

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.

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• BIC GROUP - 2020 UNIVERSAL REGISTRATION DOCUMENT •