LISI GROUP - 2018 Financial report

156 / 171

Provisions for industrial and environmental risks
Risk identified How we tackled it
The Group is exposed to the environmental and industrial risks inherent to
each of its LISI AEROSPACE, LISI AUTOMOTIVE and LISI MEDICAL activities
carried out worldwide within complex and constantly changing regulatory
frameworks.
As specified in Notes 2.2.13 and 2.5.4 to the consolidated financial
statements, the Group exercised its judgment on a case-by-case basis when
assessing the risks incurred, and recognized a provision whenever it
expected a probable outflow of resources to settle the obligation.
We have deemed this issue to be a key audit matter considering the amounts
involved and the level of judgment required for determining these provisions
against the backdrop of multiple and constantly changing regulatory
frameworks.
As part of our audit of the consolidated financial statements, our work
consisted in particular in:
• examining the procedures implemented by theGroup to identify and record
all the risks;
• reviewing the risk assessment carried out by the Group, the related
documentation and, where applicable, written consultations of external
consultants;
• assessing themain risks identified and examining the assumptions used by
Management to estimate the amount of these provisions;
• examining the disclosure on these risks contained in the Notes to the
consolidated financial statements.
Specific verifications
We have also, in accordance with the professional standards applicable
in France, specifically verified, as required by the laws and regulations in
force, the information relating to theGroup, provided in themanagement
report of the Board of Directors.
We have no comments to make on their sincerity and consistency with
the consolidated financial statements.
We certify that the consolidated extra-financial declaration pursuant to
Article L. 225‑102‑1 of the French Commercial Code is included in the
information relating to the Group contained in the Management Report,
it being understood that, in accordance with the provisions of
Article L. 823‑10 of this code, we have not verified the truthfulness of the
information contained in this declaration nor have we checked their
concordance with the consolidated financial statements and thus these
should be the subject of a report by an independent third party
organization.
Disclosures arising fromother legal and regulatory obligations
Auditors appointment
We were appointed as Auditors of LISI by your Shareholders’ General
Meeting in 1993 for EXCO ET ASSOCIES and of April 27, 2011 for ERNST &
YOUNG et Autres.
At December 31, 2018, the firmEXCOET ASSOCIESwas in the 26th year of
its engagement, without interruption, and ERNST & YOUNG et Autres in
its eighth year.
Responsibilities of management and of those charged
with corporate governance in relation to the consolidated
financial statements
It is management’s responsibility to draw up the consolidated financial
statementsgivingatrueandfairviewinaccordancewiththeInternational
Financial Reporting Standards (IFRS), as adopted in the European Union,
andtoputinplacetheinternalcontrolthatitdeemsnecessaryfordrawing
uptheconsolidatedfinancialstatementsfreeofmaterialmisstatements,
whether due to fraud or error.
When drawing up the consolidated financial statements, it is the
responsibility of management to assess the company’s capacity to
continue its operations, to present in these financial statements, if
applicable, the necessary information on the going concern assumption
and to apply the going concern principle, unless it is planned to wind up
the company or discontinue its operation.
It is the responsibility of the Audit Committee tomonitor the process for
preparationof the financial information and the effectiveness of internal
control and risk management systems, and, if applicable, the internal
audit systems, as regards the procedures relating to the preparation and
processing of accounting and financial information.
The consolidated financial statements have been approved by the Board
of Directors.
Responsibilities of Auditors relating to the audit of the
consolidated financial statements
Audit objective and approach
It is our responsibility to prepare a report on the consolidated financial
statements. Our objective is to obtain a reasonable assurance that the
consolidated financial statements, taken as a whole, are free of material
misstatements. Reasonable assurance is a high level of assurance,
without however guaranteeing that an audit conducted in accordance
with professional standards systematically ensures that any material
misstatement is detected. Misstatementsmay be due to frauds or errors
and are considered asmaterial where it is reasonable to expect that they
can, taken separately or together, influence the economic decisions that
users of the financial statements take based on them.
As set out inArticleL.823‑10‑of theFrenchCommercial Code, our task of
certifying the financial statements does not consist in guaranteeing the
viability or the quality of themanagement of your company.
As part of our audit conducted in accordance with the professional
standards applicable in France, the Auditor exercises his professional
judgment throughout this audit. Furthermore:
■■the Auditor identifies and assesses the risks that the consolidated
financial statements contain material misstatements, whether due to
fraudorerror,definesand implementsauditprocedurestotacklethese
risks, and gathers the information that he/she deems sufficient and
relevant to formhis/her opinion. The risk of non-detectionof amaterial
misstatement arising from a fraud is higher than that of a material
misstatement arising from an error, since fraud may involve collusion,
forgery,deliberateomissions,misrepresentationsorthecircumvention
of internal control;