SOMFY_ANNUAL_FINANCIAL_REPORT_2017

09 LEGAL DOCUMENTS

MEASUREMENT OF PROVISIONS FOR CONTINGENCIES AND CONTINGENT LIABILITIES

Risk identified

Our response

The Group’s business activities are conducted within a complex and continuously changing international regulatory framework, which varies depending on the countries and over time, and applies to extremely different aspects. In that context, these activities may entail risks, commercial, wage-related or tax disputes, or litigious situations. As specified in notes “Highlights”, 1.3 and 9 to the consolidated financial statements, Group Management exercises its judgement, and uses estimates and assumptions when assessing these risks. A provision is recorded as soon as an outflow of resources is considered likely, and its amount can be estimated on a reliable basis. Some of these risks are classified as contingent liabilities, as described in notes “Highlights” and 9.2 to the consolidated financial statements, and no provision is therefore recorded for them in the Group’s financial statements. We have considered that the measurement of these provisions for contingencies, which amounted to €8 million at 31 December 2017, and of the contingent liabilities is a key audit point in view of the amounts in question, and the level of judgement required by Management to determine them. VERIFICATION OF INFORMATION PERTAINING TO THE GROUP INCLUDED IN THE MANAGEMENT REPORT — As required by law, we have also verified, in accordance with professional standards applicable in France, the information on the Group provided in the Management Board’s management report. We have no observation to make with regard to the fairness of such information and its consistency with the consolidated financial statements. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS — APPOINTMENT OF THE STATUTORY AUDITORS We were appointed as Statutory Auditors of Somfy SA by the General Meetings of 24 May 2016 for KPMG and 12 May 2010 for ERNST & YOUNG et Autres. At 31 December 2017, KPMG SA was in its second year of uninterrupted engagement and ERNST & YOUNG et Autres in its eighth year. Previously, ERNST & YOUNG Audit had been Statutory Auditor since 1993. RESPONSIBILITIES OF MANAGEMENT AND INDIVIDUALS IN CHARGE OF CORPORATE GOVERNANCE IN RELATION TO THE CONSOLIDATED FINANCIAL STATEMENTS — Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the European Union, and for such internal control as Management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, Management is responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless it is expected to liquidate the company or to cease its operations.

Our work as part of the audit of the Group’s consolidated financial statements specifically consisted in: reviewing the procedures implemented by the Group to identify – and assess these risks; familiarising ourselves with the risk assessment performed by – Management, and the corresponding documentation, and reviewing the written consultations provided by external advisers, where applicable; assessing the written confirmations obtained from the Group’s – external advisers; assessing the main risks identified, and reviewing the – assumptions used by Management to estimate the amount of these provisions, or classify these risks as contingent liabilities, by including in our teams our experts, especially in tax; assessing the appropriate nature of the information set out in – the notes to the consolidated financial statements. The Audit Committee is responsible for monitoring the financial reporting process and the effectiveness of internal control and risks management systems and, where applicable, its internal audit, regarding the accounting and financial reporting procedures. The consolidated financial statements have been prepared by the Management Board. STATUTORY AUDITORS’ RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS — AUDIT OBJECTIVE AND APPROACH Our role is to issue a report on the consolidated financial statements. Our objective is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with professional standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions that users take on the basis of these consolidated financial statements. As specified in Article L. 823-10-1 of the French Commercial Code ( Code de Commerce ), our statutory audit does not include assurance on the viability of the company or the quality of management of the company. As part of an audit conducted in accordance with professional standards applicable in France, the Statutory Auditor exercises professional judgment throughout the audit. Furthermore, the Statutory Auditor: identifies and assesses the risks of material misstatement of the – consolidated financial statements, whether due to fraud or error, designs and performs audit procedures responsive to those risks, and obtains audit evidence considered to be sufficient and appropriate to provide a basis for his opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

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SOMFY – ANNUAL FINANCIAL REPORT 2017