Carrefour - 2017 Registration Document

CORPORATE GOVERNANCE Statutory Auditors' special report on regulated agreements and commitments 2017 REGISTRATION DOCUMENT | CARREFOUR 3. 164 Statutory Auditors' special report on regulated agreements and 3.8 commitments This is a translation into English of the Statutory Auditors’ report on the regulated agreements and commitments with third parties issued in French and it is provided solely for the convenience of English speaking users. 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, In our capacity as Statutory Auditors of your Company, we hereby report to you on the regulated party agreements and commitments. It is our responsibility to inform you, on the basis of the information provided to us, of the principal terms and conditions, the purpose and benefits to the Company of the agreements and commitments brought to our attention or which we may have identified during the course of our audit, as well as the reasons justifying that such agreements are in the Company’s interest, without expressing an opinion on their usefulness and appropriateness or identifying such other agreements and commitments, if any. It is your responsibility, pursuant to Article R.225-31 of the French Commercial Code (Code de commerce), to assess the interest of the conclusion of these agreements and commitments for the purpose of approving them. In addition, it is our responsibility, where appropriate, to provide you with the information stipulated in Article R.225-31 of the French Commercial Code (Code de commerce) relating to the implementation during the year of the agreements and commitments previously approved at the Shareholders’ Meeting, if any. We conducted the procedures we deemed necessary in accordance with the professional guidelines of the French National Institute of Statutory Auditors (Compagnie Nationale des Commissaires aux comptes) relating to this engagement. These procedures require that we plan and perform our work to verify that the information provided to us is consistent with the documents from which it was derived. Agreements and commitments subject to the approval at the shareholders’ meeting Agreements and commitments authorized during the past year Pursuant to Article 225-40 of the French Commercial Code, the following agreements and commitments, which were previously authorized by the Board of Directors, have been brought to our attention. Agreement with the company Kampos, whose Managing Director is Mr. Georges Ralli, a member of the Board of Director of the Company Person concerned Mr. Georges Ralli, member of the Board of Director of the Company and Managing Director of the company Kampos. Nature and purpose At its meeting on March 8, 2017, the Company’s Board of Directors authorized an agreement with the company Kampos relating to a technical analysis in connection with the IPO of the Carrefour Group’s Brazilian subsidiary. Terms and conditions Consideration for the technical analysis assignment, estimated to last six months, comprises a flat rate of €45,000, excluding expenses borne by the Company upon presentation of supporting documents. The assignment was performed during financial year 2017, and the consideration paid in 2018. Reasons justifying that the agreement is in the Company’s interest The Board of Directors considered that the purpose of the assignment was to analyze and ensure the conditions for success of the IPO of the Carrefour Group’s Brazilian subsidiary and to make useful recommendations to the Board of Directors, including by meeting the main players involved in the IPO in France and Brazil. New syndicated loan agreement with a syndicate of banks, including BNP Paribas Person concerned Jean-Laurent Bonnafé, member of the Board of Director of the Company and director and CEO of BNP Paribas. Nature and purpose At its meeting on April 12, 2017, the Board of Directors authorized the replacement of the seven-year revolving credit facility (maturing in 2019) entered into on April 4, 2012 and modified by the rider dated July 31, 2014, with a new revolving credit facility entered into with a syndicate of banks, including BNP Paribas. Terms and conditions The new revolving facility agreement, entered into on May 2, 2017, provides for a revolving credit line of €1,400 million. Interest payable on amounts drawn is calculated at Euribor plus an initial margin of 0.25%. This initial margin of 0.25% is adjusted according to a credit margin grid based on the long-term credit margin rating of the Company. In addition to interest, a utilization fee is charged based on the portion of the facility drawn. If the line of credit is not drawn, Carrefour must pay a non-utilization fee equal to 35% of the applicable margin (0.25% margin adjusted, if applicable, according to the credit margin rating). As of December 31, 2017, this line of credit was not drawn by the Company. Reasons justifying that the agreement is in the Company’s interest The Board of Directors considered that the main purpose of the new revolving credit facility of €1,400 million, entered into on May 2, 2017 with the same banks, was to extend the term of the credit facility to 2024 (five years with two one-year extension options), while lowering the variable interest rate margin under very favorable conditions.