(Notes 2 “Investments”, 9.3 and 9.4 “Loans and receivables owed by associates and receivables” to the financial statements)
| Risk identified | Our response |
|---|---|
Risk identified As of December 31, 2019, investments are accounted for at a net book value of €5,540 M, or 69% of the total assets. They are accounted for at the acquisition price of the securities excluding ancillary expenses. The related loans and receivables amount to € 2,067 M, or 26% of the total assets. We believe that the valuation of investments and related loans and receivables constitutes a key audit matter, given their materiality in the assets of Publicis Groupe SA, and because the valuation of their recoverable amount, often based on projected discounted future cash flows, involves judgements from management, and the use of numerous economic assumptions related to the Company’s growth forecasts. | Our response • We assessed the process used to value the recoverable amount of the Company’s investments and related loans and receivables as well as the valuations carried out by the Company, and supported by an independent expert; we ensured that the assumptions and estimates used in the reporting were based on an appropriate assessment of the valuation method, and of the figures retained. • We involved our valuation experts in order to assess the consistency of the assumptions used with the economic environment at closing and on the date the financial statements were prepared. • We also compared the figures used for the impairment tests on Investments with the entities’ source data, as well as the result of our audit work or analytical procedures on these entities. We have examined: • The compliance of shareholders’ equity with the financial statements of the entities subject to audit or analytical procedures, and the evidence related to adjustments made, when applicable, on such shareholders’ equity; • The consistency of projected future cash flows for the relevant entities’ activities, as prepared by their operational management, with the companies’ growth forecasts taken from the latest strategic plans; • The adjustments made to the present value of projected future cash flows to account for the indebtedness of the relevant entities. • TWe have assessed the recoverability of the related loans and receivables in the light of the analyses performed on the Investments. • We have assessed the appropriateness of the information related to Investments and related loans and receivables, as set out in the notes to the financial statements. |
We have also performed, in accordance with professional standards applicable in France, the specific verifications required by laws and regulations.
We have no matters to report as to its fair presentation and its consistency with the financial statements of the information given in the management report of the Management Board approved on February 3, 2020 and in the other documents with respect to the financial position and the financial statements provided to shareholders. Regarding the events that occurred, and elements that have been known since the date of the financial statements were approved and in relation to the effects of Covid-19’s crisis, management informed us that this would be subject to a specific communication addressed to the shareholders’ meeting called to vote on said financial statements.
We attest the fair presentation and the consistency with the financial statements of the information relating to payment deadlines mentioned in Article D. 441-4 of the French Commercial Code (Code de commerce).
