EXEL Industries // 2020 Universal registration document

Consolidated fi nancial statements 5

Statutory Auditors’ report on the consolidated fi nancial statements

Goodwill impairment tests (Notes 1.7 and 3 to the consolidated fi nancial statements)

Risk identi fi ed On September 30, 2020, the Group’s net goodwill totaled €63.0 million i.e . around 8.2% of the Group’s total assets. This goodwill was recognized following di ff erent external growth operations by the Group. These were assigned to each CGU thus de fi ned by the Group: Agricultural Spraying, Sugar Beet Harvesters, Garden Watering and Spraying and Industrial Spraying. As stated in note 1.7 of the notes to the consolidated fi nancial statements, the Group carries out an impairment test on goodwill at least once a year and every time the Management identi fi es an indicator of impairment. This test involves determining the recoverable value of each Cash Generating Unit to which the goodwill is allocated, and checking that the CGU’s net carrying value is not higher than their respective recoverable values. This is the value in use that is determined on the basis of the present value of future operating cash fl ows expected by Management over a fi ve-year period and a terminal value. The net values are presented in note 3 to the consolidated fi nancial statements. Any unfavorable change in the business plans for the activities to which the goodwill has been allocated and the assumptions of discount rates and growth rates could materially a ff ect the recoverable value of these CGUs and potentially lead to the recognition of an impairment. We considered that the determination of the recoverable amount of goodwill is a key audit matter because of its relative weight in the Group’s fi nancial statements and because the determination of the recoverable amount of the various CGUs to which it is attached involves signi fi cant use of judgment by management. Our response We examined the procedures used to establish the impairment tests, examined their methods of implementation in line with the applicable accounting standards and, with the help of our valuation experts, assessed whether the principal estimations made by Management were of a reasonable nature. We veri fi ed:  the reasonable nature of the cash fl ow projections presented to the Board of Directors compared to the economic and fi nancial context in which the di ff erent CGUs are operating, as well as the consistency of these forecasts with the Group’s historical performance;

 the main parameters used with regard to our own benchmarks, namely:  the consistency of the perpetual growth rates used by Management,  the methods of calculating the discount rate applied to projected cash fl ows. In addition, we conducted our own sensitivity analysis and veri fi ed the arithmetic accuracy of the impairment tests.

First consolidation of INTEC (Notes 2 and 3 to the consolidated fi nancial statements)

Risk identi fi ed On February 3, 2020, EXEL Industries acquired 100% of German company INTEC for €57.9 million. This transaction resulted in the recognition of goodwill in the amount of €25.0 million after allocation of the purchase price to the assets acquired and liabilities assumed. EXEL Industries commissioned an independent expert to assist it in the identi fi cation and valuation of INTEC’s main intangible and industrial assets. The fi rst consolidation of INTEC is considered to be a key audit matter in view of the materiality of this acquisition and because Management is required to make a certain number of judgments to identify the assets acquired and liabilities assumed, and to assess their fair value. Our response Our work consisted in:  on the basis of the independent expert’s report and with the support of our own specialists, assessing the scope of his work and the relevance of the main assumptions and conclusions formulated;  auditing the initial consolidation, in particular to identify any overvalued assets or undervalued liabilities, or any assets or liabilities not taken into account among assets acquired and liabilities assumed;  assessing the appropriateness of the assumptions and methods used to measure the fair value of the assets acquired and liabilities assumed

with regard to the criteria provided for by the relevant accounting standards;  verifying the appropriateness of the fi nancial information provided in the notes.

EXEL Industries group I 2020 Universal Registration Document

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