NEOPOST - 2018 Registration document

6

Financial statements

Neopost S.A. statements of financial position

Extraordinary income 11-3: Treasury shares disposals under the liquidity contract generate extraordinary income from capital transactions of 0.7 million euros (1.1 million euros at 31 January 18) and extraordinary expenses from capital transactions of 1.2 million euros (1.2 million euros at 31 January 2018). The expenses capitalized in regard of a project of common IT tools roll-out in Europe were sold to one of the Group's subsidiary for a net book value of 32.6 million euros. Neopost S.A. is the parent company of an integrated tax group under the terms of article 223A of the French general tax code. In this context, Neopost S.A. is only liable for income tax due by its subsidiaries with a view to determining the whole Group’s earnings. The tax consolidation agreement used in the Group is based on the principle of neutrality and plan that the tax burden is borne by the Company as in the absence of tax consolidation. The In accordance with article 223 quater of the French general tax code, the financial statements for the financial year ended 31 January 2019 contain 73,831 euros of non-deductible expenses for income tax (article 39-4 of the French general tax code), but do not contain overhead costs, which are non-deductible for tax purposes (article 39-5 of the French general tax code). The French tax consolidation group includes the following companies in 2018: Non-deductible tax expenses: Income tax 11-4:

An exceptional depreciation of the corresponding intangible fixed assets is recorded for an amount of 21.7 million euros as at 31 January 2019. As at 31 January 2018, an exceptional depreciation of 5.7 million euros was recorded on intangible assets recognized on the implementation of a web platform for SMEs, because of the abandonment of the project

tax is thus calculated on the Company’s own taxable income. The tax savings realized by the Group, through losses, adjustments or tax credits, are retained by the parent company and regarded as an immediate gain for the year (in a year in which the Company show some profits,

the parent company will then bear a tax charge).

The employment and competitiveness tax credit ( Crédit d’Impôt pour la Compétitivité et l’Emploi – CICE ) coming from the tax consolidation amounts to 1.3 million euros as at 31 January 2019 compared with 1.6 million euros as at 31 January 2018. For 2018, the tax benefit coming from the tax consolidation is 5.5 million euros (1.6 million euros for 2017). As at 31 January 2019, tax proceeds of 4.8 million euros are recorded, compared with 8.3 million euros as at 31 January 2018 in respect of the claim related to the 3% contribution on dividend distributions made by the Company between 2013 and 2017. Losses carried forward amount to 82.9 million euros as at 31 January 2019. The Group tax result submitted to ordinary tax rate is a loss and the Group tax result submitted to the reduced tax rate is a profit. Net income amounts to 38.5 million euros (78.9 million euros as at 31 January 2018).

• • • • • •

Neopost France;

Neopost Services;

Mail Finance;

Neopost Industrie S.A.;

Neopost Technologies S.A.;

Neopost Shipping.

Income before tax

Theoretical tax

Net income

Current income

50.4

3.0

53.4

Extraordinary income (loss)

(22.2)

7.6

(14.6)

Sub-total

28.2

10.6

38.8

Tax credits offsetting

-

3.5

3.5

Claim of additional 3% tax on dividends

-

4.8

4.8

Effect of tax consolidation

-

(8.6)

(8.6)

TOTAL

28.2

10.3

38.5

193

REGISTRATION DOCUMENT 2018 / NEOPOST