Carrefour - 2017 Registration Document

5 CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017 Statutory Auditors' report on the Consolidated Financial Statements CARREFOUR | 2017 REGISTRATION DOCUMENT 293 Statutory Auditors' report on the Consolidated Financial 5.7 Statements This is a translation into English of the Statutory Auditors’ Report on the Financial Statements of the Company issued in French and it is provided solely for the convenience of English speaking users. This Statutory Auditors’ Report includes information required by European regulation and French law, such as information about the appointment of the statutory auditors or verification of the management report and other documents provided to shareholders. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France. For the year ended December 31, 2017 To the Carrefour Shareholders’ Meeting, Opinion In compliance with the engagement entrusted to us by your Shareholders’ Meetings, we have audited the accompanying consolidated financial statements of Carrefour for the year ended December 31, 2017. In our opinion, the consolidated financial statements give a true and fair view of the assets and liabilities and of the financial position of the Group as at 31 December 2017 and of the results of its operations for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union. The audit opinion expressed above is consistent with our report to the Accounts Committee. Basis for Opinion Audit Framework We conducted our audit in accordance with professional standards applicable in France. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our responsibilities under those standards are further described in the Statutory Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. Independence We conducted our audit engagement in compliance with independence rules applicable to us, for the period from January 1, 2017 to the date of our report and specifically we did not provide any prohibited non-audit services referred to in Article 5 of Regulation (EU) No 537/2014 or in the French Code of ethics (code de déontologie) for statutory auditors. Justification of Assessments - Key Audit Matters In accordance with the requirements of Articles L.823-9 and R.823-7 of the French commercial code (Code de commerce) relating to the justification of our assessments, we inform you of the key audit matters relating to risks of material misstatement that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period, as well as how we addressed those risks. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on specific items of the consolidated financial statements. Key Audit Matters Responses as part of our audit Measurement and recognition of rebates and service agreement (See notes 1.3 and 5.2.1 of the consolidated financial statements) The Group signed a significant number of purchase agreements with suppliers which include: Commercial discounts based on the purchase volumes or ● on other contractual terms such as the achievement of threshold or the increase of purchase volumes (« rebates ») ; Revenues from services provided to suppliers by the ● Group (« service agreements »). Rebates and service agreement received from suppliers by the Group are estimated in compliance with the contractual terms agreed in the purchase agreement with suppliers and are recorded as a reduction of cost of sales. Given the significant number of agreements and the specificities of each agreement, the measurement and the recognition of rebates and service agreement represent a key audit matter. We have obtained an understanding on the internal controls implemented by the Group on the measurement and the recognition of rebates and service agreement. We assessed their design and implementation and we tested their effectiveness through a sample of agreement. Our other procedures based on a sample of rebates and service agreement consisted mainly of : Matching the data used for the calculations of rebates and ● service agreement with the contractual terms mentioned in the agreements signed with the suppliers; Comparing last year’s estimates with actual figures in order to ● assess the reliability of the rebates and service agreement measurement’s process; Matching the purchase volumes used for the calculation of the ● expected rebates and service agreement for the year ended December 31, 2017 with the purchase volumes recorded in the Group’s procurement system; Performed substantive analytical procedures on rebates and ● service agreement variation.