Carrefour - 2017 Registration Document

MANAGEMENT’S DISCUSSION AND ANALYSIS AS OF DECEMBER 31, 2017 Internal control system 2017 REGISTRATION DOCUMENT | CARREFOUR 4. 204 Internal control system 4.8 Introduction Responsibility for the set-up, maintenance and steering of internal control procedures across the Group lies with the Group’s Executive Management, which has submitted this section of the report to the Statutory Auditors and the Board of Directors, which approved it on February 28, 2018 on the recommendation of the Accounts Committee. Applicable reference framework The Carrefour group’s internal control system is based on the AMF’s reference framework, updated on July 22, 2010. This section has been prepared in accordance with Article L. 225-100-1 of the French commercial code. Scope The internal control system presented in this report is implemented in the Company and all its fully-consolidated subsidiaries, and covers a larger scope than the procedures relating to the preparation and processing of accounting and financial information. Definition and objectives of the internal control system 4.8.1 The internal control system comprises a set of resources, standards of conduct, procedures and actions adapted to the individual characteristics of the Company and its subsidiaries, which: contribute to the control of its activities, the efficiency of its ● operations and the efficient use of its resources; enable it to take into consideration, in an appropriate manner, all ● major operational, financial or compliance-related risks. More specifically, the internal control system is designed to ensure: that the Group’s economic and financial targets are achieved in ● accordance with laws and regulations; that instructions and directional guidelines established by the ● Group’s Executive Management in respect of internal control are applied; that the internal processes are working correctly, particularly ● those contributing to the security of assets; that financial information is reliable. ● By helping to prevent and control the risks that may prevent the Group from achieving its objectives, the internal control system plays a key role in the management and oversight of its activities. However, as the AMF reference framework underscores, no matter how well designed and properly applied, an internal control system cannot fully guarantee that the Group’s objectives will be achieved. There are inherent limitations in all internal control systems, which arise, in particular, from uncertainties in the outside world, the exercise of judgement or problems that may occur due to technical or human failure, or simple error.