Plastic Omnium // 2021 Universal Registration Document

CONSOLIDATED FINANCIAL STATEMENTS 2021 Consolidated financial statements at December 31, 2021

1.5

Other provisions

The new method results in a provision only being made for employees after a certain number of years of service and in the provision being adjusted in a straight-line manner until the date of the employee’s retirement. The impact for the Group is a reduction of €3.5 million in actuarial debt. As the impact of the change in method on the consolidated income statement was insignificant, it was decided to retain January 1, 2021 as the date of first-time application and to recognize the impact of the change in retained earnings ( i.e. in shareholders’ equity) at this date. DEFINED-CONTRIBUTION PLANS 1.4.2.1 The cost of defined-contribution plans, corresponding to salary-based contributions to national bodies responsible for pension and death/disability insurance plans made in accordance with local laws and practices in each country, is recognized as an operating expense. The Group has no legal or implicit obligation to pay additional contributions or future benefits. Consequently, no actuarial liability is recorded under these defined-contribution plans. DEFINED-BENEFIT PLANS 1.4.2.2 Defined-benefit plans are mainly related to post-employment benefits and mainly correspond to the following commitments: pension plans for French employees; ● other pension and supplementary pension plans, mainly in the US, ● France and Belgium; plans to cover healthcare costs in the US. ● Defined benefit plans are subject to provisions for staff benefits calculated on the basis of actuarial valuations carried out by independent actuaries using the projected unit credit method. These assessments take into account assumptions specific to each plan such as: retirement dates determined according to the terms of the legislation ● and, in particular for French employees, a voluntary retirement assumption when full benefit rights have been acquired; mortality; ● the probability of active employees departing before retirement age; ● estimates of salary increases up to retirement age; ● discount rates and inflation. ● When defined benefit plans are funded, the commitments under these plans are reduced by the market value of plan assets at the reporting date. The valuation builds in long-term profitability assumptions for the invested assets, calculated on the basis of the discount rate used to value company commitments. Changes in provisions for defined-benefit obligations are recognized over the benefit acquisition period, in the income statement under “Operating expenses”, except for: the effect of the reversal of discounting of the commitments recognized ● in net financial income (expense); actuarial gains and losses on post-employment benefit obligations ● recognized in equity. OTHER LONG-TERM BENEFITS 1.4.2.3 Other long-term benefits correspond mainly to long-service awards for French employees. Actuarial gains and losses on “Other long-term benefits” (mainly long-service awards) are recognized immediately in profit or loss.

Provisions for employee downsizing 1.5.1 The cost of employee downsizing plans is recognized in the period in which a detailed plan is drawn up and announced to the employees concerned or their representatives, thus creating a well-founded expectation that the Group will implement this plan. 1.5.2 Provisions are booked when there are obligations to third parties leading to a likely outflow of resources for the benefit of these third parties without a counterparty of at least equivalent value expected for the Group. Losses identified on onerous contracts, i.e. contracts whose unavoidable costs relating to their obligations are greater than the expected economic benefits, are subject to provisions. These provisions are recognized in current or non-current liabilities depending on whether they are short- or medium/long-term in nature. Provisions for onerous contracts 1.6.1 Goodwill is measured annually at cost, less any impairment representing loss of value. Impairments on goodwill are irreversible. Negative goodwill (badwill) is recorded in the income statement during the year of acquisition. 1.6.2.1 Development costs incurred during the project phase and related to the execution of a contract with a customer not fulfilling a performance obligation are recognized as intangible assets. These internal and external costs relate to the work on the organization of purchasing, logistics and industrial processes to produce the parts that will be ordered by customers. These costs are recognized as intangible assets in progress during the development phase and amortized on a straight-line basis over the estimated life of the series production, i.e. generally three years for exterior parts, five years for fuel systems and the “Modules” business. The amortization of development hours is booked under Research and Development costs. Assets under construction are subject to annual impairment tests. As of their commissioning, impairment tests are carried out as soon as signs of impairment are identified. Income received from related customers in respect of these costs is recognized in revenue from the start of series production and over the duration of production. Payments received before the start of series production are recorded in customer advances. The accounting treatment of costs that satisfy a performance obligation is described in Note 1.3.2 “Revenue/Revenue from Contracts with Customers”. Furthermore, under IFRS 15, only the costs of obtaining contracts that would not exist in the absence of a contract are credited to the assets and depreciated over the expected production period; costs incurred prior to the selection of the Group, whether or not the contract is obtained, are recognized as an expense for the period. OTHER RESEARCH AND DEVELOPMENT COSTS 1.6.2.2 Other Research and Development costs are expensed for the fiscal year. Intangible assets 1.6.2 RESEARCH AND DEVELOPMENT COSTS Goodwill, property, plant and equipment 1.6 and intangible assets Goodwill

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PLASTIC OMNIUM UNIVERSAL REGISTRATION DOCUMENT 2021