SFIL Annual financial report 2018

4 I Annual financial statements in accordance with French GAAP 130 SFIL Annual Financial Report 2018 Statutory Auditors’ report on the financial statements For the year ended December 31, 2018 To the Annual General Meeting of SFIL, Opinion In compliance with the engagement entrusted to us by your annual general meeting, we have audited the accompanying financial statements of SFIL for the year ended December 31, 2018. 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, 2018 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 Audit 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, 2018 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. 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 state- ments 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, and we do not provide a separate opinion on specific items of the financial statements. IT migration Risk identified Our response The SFIL group rolled out a program to overhaul its IT system. In April 1, 2018, this project resulted in the migration of, notably, the management of all market transactions (derivatives and securities) towards a new IT system integrating a new management application and the creation of an data warehouse. Considering the risks inherent in such a project, notably the correct recovery of data and carryforward of historical balances in the new IT system, as well as the changes related to a new IT system in the processes of the activities, we considered this project to be a key audit matter. Our procedures, with the support of our experts who are part of the audit team, consisted in: • Examining the documentation related to the different phases of the project and its governance framework; • Examining the controls set up by the permanent control and internal audit reports; • Analyzing coverage of acceptance testing; • Examining the control mechanism framing the recovery of post-migration transactions; • Examining the application authorizations for the new IT tools and applications having been impacted by the simplification of the IT system; • Examining the developments of new application program interfaces; • Analyzing internal developments enabling non-assured functionalities to be repaired by the new IT system as of the production starting date. This is a free translation into English of the Statutory Auditors’ special report on regulated agreements and commitments with third parties that is issued in the French language and is provided solely for the convenience of English-speaking readers. This report on regulated agreements and commitments should be read in conjunction, and construed in accordance with, French law and professional auditing standards applicable in France. It should be understood that the agreements reported on are only those provided by the French Commercial Code and that the report does not apply to those related party transactions described in IAS 24 or other equivalent accounting standards.