Universal Registration Document 2019

73 LISI 2019 UNIVERSAL REGISTRATION DOCUMENT Consolidated financial statements 2 Provisions for industrial and environmental risks Risque identifié Notre réponse 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 worldwidewithin complex and constantly changing regulatory frameworks. As specified in Note 3.4.4 in the notes 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 the Group 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 the main 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 the Group, provided in the management report of the Board of Directors, dated February 19, 2020. Concerning subsequent events and the information that has emerged after the date on which the financial statements were approved regarding the health crisis caused by Covid-19, the Management has informed us that these events and information will be covered in a communication to the Shareholders’ General Meeting convened to approve the financial statements. 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 havewe 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 from other legal and regulatory obligations Auditors appointment We were appointed as Auditors of the Company LISI by your Shareholders’ General Meeting of June 2, 1993 for EXCO ET ASSOCIES and of April 27, 2011 for ERNST & YOUNG et Autres. At December 31, 2019, EXCO ET ASSOCIES was in the twenty-seventh consecutive year of its assignment and ERNST & YOUNG et Autres in the ninth 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 statements giving a true and fair view in accordance with the International Financial Reporting Standards (IFRS), as adopted in the European Union, and to put in place the internal control that it deems necessary for drawing up the consolidated financial statements free of ‑material misstatements, 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 to monitor the process for preparation of 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 were 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 as material where it is