Danone // 2020 Universal Registration Document

4 137 DANONE UNIVERSAL REGISTRATION DOCUMENT 2020 4.2 Financial statements of Danone SA, the parent company Statutory auditors’ report on the financial statements of the parent company Valuation of equity interests RISK IDENTIFIED OUR RESPONSE As at 31 December 2020, equity interests amounted to 28 697 million euros out of a total balance sheet of 34 220 million euros. As stated in Note 1 to the financial statements, an impairment loss is recorded when the recoverable amount of the equity interests is lower than their carrying amount. The recoverable amount is determined by management based of various criteria, including market value, value in use based on discounted cash flows and revalued shareholders’ equity. The estimation of the recoverable amount of these equity interests requires management to exercise its judgment in choosing the items to be taken into consideration depending on the interests concerned, as well as in determining the value in use, estimating the future performance of the entities concerned and the discount and long-term growth rates. As stated in Note 2 to the financial statements, the Company has assessed the recoverable amount of equity interests and financial fixed assets, for which the assessment is based on discounted forecasted cash flows, by projecting in its business plans the full effects on its various businesses of the Covid-19 health crisis over its entire duration so as to reflect the uncertainty as to the magnitude and duration of the crisis. In view of themateriality of this line item in the Company’s balance sheet and the judgment required to estimate their recoverable amount, especially in the context of the health crisis linked to Covid-19, we considered the valuation of these interests to be a key audit matter. Our work mainly consisted in the following, for a sample of equity interests determined based on qualitative and quantitative criteria: • For valuations based on historical data: • examining the concordance between the shareholders’ equity used and the accounts of the corresponding entities, as well as any adjustments performed on this shareholders’ equity; • For valuations based on forecast data: • obtaining the operating cash flow forecasts for the activities of the entities concerned and reconciling them with the forecast data provided in the latest strategic plans, including the effects of the health crisis linked to Covid-19 projected by management; • examining the assumptions used in the light of the economic environment at the closing date and the date on which the accounts were drawn up; • comparing the forecasts used for prior periods with the corresponding actual figures in order to assess the achie- vement of past targets. We also examined the information provided in Note 9 to the financial statements. Specific verifications We have also performed, in accordance with professional standards applicable in France, the specific verifications required by laws and regulations. Information given in themanagement report and in the other documents with respect to the financial position and the financial statements provided to the shareholders We have no matters to report as to the fair presentation and the consistency with the financial statements of the information given in the management report of the Board of Directors and in the other documents with respect to the financial position and the financial state- ments provided to the shareholders. We attest the fair presentation and the consistency with the financial statements of the information relating to payment deadlines men- tioned in Article D. 441-6 of the French Commercial Code ( Code de commerce ). Report on Corporate Governance We attest that the Board of Directors’ Report on Corporate Governance sets out the information required by Articles L. 225-37-4, L. 22- 10-10 and L. 22-10-9 of the French Commercial Code ( Code de commerce ). Concerning the information given in accordance with the requirements of Article L. 22-10-9 of the French Commercial Code ( Code de commerce ) relating to remunerations and benefits received by, or allocated to the directors and any other commitments made in their favor, we have verified its consistency with the financial statements, or with the underlying information used to prepare these financial statements and, where applicable, with the information obtained by your Company from companies controlled thereby, included in the consolidation scope. Based on these procedures, we attest the accuracy and fair presentation of this information. With respect to the information relating to items that your Company considered likely to have an impact in the event of a takeover bid or exchange offer, provided pursuant to Article L. 22-10-11 of the French Commercial Code ( Code de commerce ), we have agreed this infor- mation to the source documents communicated to us. Based on these procedures, we have no observations to make on this information. Other information In accordance with French law, we have verified that the required information concerning the identity of the shareholders and holders of the voting rights has been properly disclosed in the management report.