NEOPOST - 2018 Registration document

6

Financial statements

Statutory auditors’ report on the consolidated financial statements

Revenue

Risk identified

Our response

Turnover amounts to M€ 1.092 as at January 31, 2019. As described in Note 6-1 (“Sales”) the Group assessed sales at the fair value of the consideration expected, net of any trade discount and volume rebates and excluding any VAT or other taxes. Sales are recognized at the date on which the Group transfers the control of the performance obligations attached to the contract.The terms of the commercial contracts between the Group and its customers include the terms and conditions for the transfer of ownership and the performance of services. The analysis of those conditions is decisive for the correct accounting of revenue. The accounting standards for the registration of this type of contract imply judgment in particular for complex contracts. In particular, for financial leases, the Group recognizes a sale of equipment and records a receivable amounting to the net present value of lease payments receivable over the term of the financing. For software and associated services and sales of patents, the Group recognizes revenue, as long as the following conditions are met: The group has entered into a legal binding agreement with a • customer; The software or service has been delivered; • License fees are fixed and there are no uncertainties on the • completion of the contract; Collection is probable. • An error in the analysis of the contractual obligations and their realization can lead to an erroneous accounting of the revenue As a result, we have considered revenue recognition as a key audit matter, since it is sensitive to management’s judgments and estimates, and therefore, may have a significant impact on the financial statements.

We performed walkthroughs to understand the procedures including IT systems implemented by the most significant components. We analyzed the compliance of the revenue recognition rules with IFRS. We evaluated and tested key controls on the process of revenue recognition for the considered most significant components. We conducted disaggregated analytical procedures at the level of each scoped subsidiary, and at group level by geographic region, and by products to analyze changes in sales throughout the year. We made selections on the turnover and examined: The related documentation to ensure the accounting on the • correct accounting period; The documentation for some manual entries impacting the • turnover accounts by focusing on non-recurrent transactions. We also examined the relevance of the disclosures in the consolidated financial statements

Specific Verifications 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.

We attest that this report contains the consolidated report over extra-financial performance, with the requirements of Article L.225-102-1 of the French Commercial Code. However, in accordance with article L 823-10 f the French Commercial Code, we have not verified its fair presentation and consistency with the consolidated financial statements, which will be the subject of a report by an independent third party. Report on Other Legal and Regulatory Requirements Appointment of the Statutory Auditors We were appointed as statutory auditors of Neopost S.A. by the annual general meeting held on July 8 th , 2004 for Finexsi Audit and on September 9 th , 1997 for ERNST & YOUNG et Autres. As at January 31 st , 2019, Finexsi Audit were in the fifteenth year of total uninterrupted engagement and ERNST & YOUNG et Autres were in their twenty-second year (twenty years of which since securities of the Company were admitted to trading on a regulated market respectively).

173

REGISTRATION DOCUMENT 2018 / NEOPOST