BIC_REGISTRATION_DOCUMENT_2017

FINANCIAL STATEMENTS Statutory Auditors’ Report on the consolidated financial statements

Post employment obligations

Risk identified

Our answer

The Bic Group is involved in several post employment benefits schemes (defined benefits). Those schemes are mainly located in the United States, in France and in the United Kingdom. Those three countries represent approximately 88% of the total post employment benefit obligation at December 31, 2017. Considering the plan assets for which the fair value is €435 million at December 31, 2017, the net obligation amounts to 164 million as of that date. The main plan assets are also located in the United States, in the United Kingdom and in France. The evaluation of the pension assets and liabilities together with the actuarial expense of the period require management to exercise a significant degree of judgement to retain the most relevant assumptions to be used (e.g. discount rate, inflation, future salary increase, turnover rate, mortality). Deviations from reality for those parameters can have a significant impact on the net pension liability that is recorded. In that context, management uses external actuarial firms to assist in the determination of those assumptions and computation. Considering the level of the obligations and assets, the degree of judgement exercised and the technicality required to appropriately evaluate those elements, we have considered those post employment obligation as a key audit matter.

We have considered the process in place to evaluate the post employment obligations. We have used our internal specialist (actuaries) to evaluate the assumptions retained by the Group, especially in the United States, France and United Kingdom. We have: Compared the discount rates and inflation rates used with actual • market conditions Compared the assumptions used for salary increase, turnover and • mortality with specific requirements for each regime and when the case may be with national or sector observable datas. Performed auditing procedures on the actuarial computation made by • external actuarial firms. With regard to the dedicated plan assets, we have considered whether the assumptions retained by management to evaluate those assets as well as the documentation provided by management to record those plan assets were met. We have also verified that the disclosures provided in Note 18 to the consolidated financial statements were appropriate.

IV. Verification of the Information Pertaining to the Group Presented in the Management Report As required by law we have also verified in accordance with professional standards applicable in France the information pertaining to the Group presented in the management report of the board of directors. We have no matters to report as to its fair presentation and its consistency with the consolidated financial statements. V. Report on Other Legal and Regulatory Requirements Appointment of the Statutory Auditors We were appointed as statutory auditors of company Bic during the annual general meeting held on May 4, 1999 for Deloitte & Associés and May 23, 2007 for Grant Thornton. As at December 31, 2017, Deloitte & Associés and Grant Thornton were in the 19 th year and 11 th year of total uninterrupted engagement respectively. VI. Responsibilities of Management and Those Charged with Governance for 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 operations. 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 were approved for issuance by the Board of Directors.

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BIC GROUP - 2017 REGISTRATION DOCUMENT