Carrefour - 2017 Registration Document

COMPANY FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2017 Statutory Auditors' report on the Company Financial Statement 2017 REGISTRATION DOCUMENT | CARREFOUR 6. 316 Statutory Auditors' report on the Company Financial Statement 6.5 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 financial statements of Carrefour for the year ended December 31, 2017. In our opinion, the financial statements give a true and fair view of the assets and liabilities and of the financial position of the Company as of December 31, 2017 and of the results of its operations for the year then ended in accordance with French accounting principles. 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 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(1) of Regulation (EU) No. 537/2014 or in the French code of ethics (Code de déontologie) for statutory auditors. Emphasis of matter We draw your attention to Note 1 to the financial statements which describes the change in accounting method relating to the first-time adoption as of January 1, 2017 of ANC regulation 2015-05 relating to forward contracts and hedging transactions. Our opinion is not modified in respect to this matter. 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 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 financial statements as a whole, and in forming our opinion thereon. We do not provide a separate opinion on specific items of the financial statements. Key Audit Matters Measurement of the value in use of the shares of Carrefour France S.A.S. (Notes 1.2, 2.1, 3 and 14 to the financial statements) As of December 31, 2017, shares in subsidiaries and affiliates, including allocated merger losses, were recorded on the balance sheet for a net carrying amount of €30,065 million, or 97% of total assets. As stated in Note 1.2 to the financial statements, shares in subsidiaries and affiliates are subject to impairment tests at each year-end in order to verify that their net carrying amount (including, where necessary, the net carrying amount of allocated merger losses) does not exceed their value in use. As of December 31, 2017, the merger loss allocated to the shares of Carrefour France S.A.S. was impaired in financial income or loss by €4,709 million based on the value in use. The Carrefour France S.A.S. value in use was determined using the future cash flow forecasts based on management’s significant judgments. In this context, we considered the measurement of the Carrefour France S.A.S. value in use to be a key audit matter due to the significant net carrying amount of the shares including the allocated loss, the impairment amount recognized for the period, the uncertainties relating to the probability of future cash flow forecasts used to measure the value in use and the sensitivity to changes of the financial data and assumptions used. Responses as part of our audit In order to measure the value in use of the shares of Carrefour France S.A.S. as determined by management, our work mainly consisted in: assessing the appropriateness of the methodology used to ● determine the value in use; analyzing the consistency of the cash flow forecasts used with ● our understanding of the group’s strategic outlook and guidance in France and with management’s most recent estimates presented to the Board of Directors; analyzing the reasonableness of the financial parameters used ● (discount and perpetual growth rates) with the help of our financial valuation specialists; assessing the appropriateness of the disclosures in Notes 1.2, 2.1, ● 3 and 14 to the financial statements.