Notes H.19.3, H.20 and M to the consolidated financial statements.
The Group’s companies are sometimes involved in litigation arising from their activities.
Provisions may, as the case may be, be set aside for these liabilities and litigation in accordance with the appropriate accounting standard, and the liabilities and litigation are assessed by VINCI and the subsidiaries concerned based on their knowledge of the matters.
Provisions for litigation (€678 million at 31 December 2021), other current liabilities (€1,763 million at 31 December 2021) and other non-current liabilities (€393 million at 31 December 2021) represented a total amount of €2,834 million at 31 December 2021.
Determining and measuring the recognised provisions for liabilities and litigation is a key audit matter given the amounts involved, the importance of estimates and the level of judgment required by Management in determining those provisions, as regards the likely outcome of the corresponding liabilities and litigation.
To obtain an understanding of existing liabilities and litigation and the related matters of judgment, we held discussions with the Group’s departments, business lines and main subsidiaries. For each of the main liabilities and items of litigation identified, we:
We examined the appropriateness of information provided in the Notes to the consolidated financial statements regarding the main items of litigation identified.
Notes A.1 and B.1 to the consolidated financial statements
On 31 December 2021, VINCI completed its acquisition of ACS’s energy business (Cobra IS). The total purchase price at 31 December 2021 was evaluated at €5.1 billion, including the estimated earn-out to be paid gradually to the seller as gigawatts of renewable energy developed by Cobra IS are made available over a period extending until 30 June 2030 at the latest.
Cobra IS has been consolidated in VINCI’s financial statements since the date of acquisition, 31 December 2021, leading to the recognition of provisional goodwill of €4.5 billion. The Group has 12 months from the date of acquisition (up to 30 December 2022) to finalise the allocation of the purchase price.
We regarded this as a key audit matter because the acquisition is material for the Group and because of Management’s use of estimates and judgement in determining the acquisition price and making a preliminary identification of the assets acquired and liabilities assumed.
In the course of our audit, we examined the legal documentation relating to the transaction, as well as the information that was prepared by Management to determine the purchase price and the provisional amount of the earn-out payment on the one hand, and to make a preliminary identification of the assets acquired and the liabilities assumed in the transaction on the other.
We familiarised ourselves with the acquisition agreement formed by the Group and the seller and assessed the arrangements made by Management to analyse and recognise the acquisition of control over the company.
We conducted a limited review of Cobra IS’s opening balance sheet at 31 December 2021, covering the main entities in the scope of consolidation. In particular, we:
Lastly, we examined the information provided in the notes to the consolidated financial statements on the accounting treatment of this acquisition, particularly Note B.1.
We also verified, in accordance with the professional standards applicable in France and as required by laws and regulations, the information concerning the Group presented in the management report of the Board of Directors.
We have no comments to make as to its fair presentation and its consistency with the consolidated financial statements.
We attest that the consolidated declaration of non-financial performance, required under Article L.225-102-1 of the French Commercial Code, is included in the information relating to the Group provided in the management report of the Board of Directors, it being specified that, in accordance with the provisions of Article L.823-10 of this code, we have not verified the fair presentation and the consistency with the consolidated financial statements of the information provided in this declaration and this information must be subject to a report by an independent third party.
