NEOPOST - 2018 Registration document

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Risk factors and internal control

Risk factors

Risks

Risk management system

Fraud The Group has rolled out an initiative with managers of subsidiaries to ensure this risk is fully understood, to gather information on best practice and ensure standard practices are disseminated throughout the Group.

An anti-fraud policy was prepared and sent out in September 2014 to local chief financial officers and managing directors. The policy includes theoretical and practical recommendations to prevent fraud. If there is an attempted fraud using new methods, the head of internal control notifies local managing directors and chief financial officers where necessary. Neopost S.A. has taken out a specific insurance policy to enhance its protection against this type of risk. As part of the planned Group ethics charter, the Group internal control department introduced a procedure for managing conflicts of interest since October 2012 (refer to chapter 2 of this registration document, section “By-laws for the Board and committees.”.

Environmental risks

Risks

Risk management system

Lower risks Environmental regulation

Given the nature of the Group’s assembly and distribution businesses, the Group is not aware of any environmental risk or risk related to climate change that might have a material impact on its financial position, business or results. Please refer to the social and environmental information detailed in chapter 5 of this registration document.

Regarding industrial risks, the Group updates a Disaster Recovery Plan every year. This plan allows the Group to assert that these risks would not have a material impact on its financial position, business or results.

Exchange rate risk

Impact on net income before tax on 2019 budget

Impact on equity as at 31 January 2019

(In million euros)

Increase of 5% Decrease of 5% Increase of 5% Decrease of 5%

USD

3.4

(3.4)

(17.7)

17.7

GBP

0.8

(0.8)

(2.4)

2.4

Interest rate risk

31 January 2019

Impact on net income before tax

Impact on USD denominated debt

Impact on EUR denominated debt

Impact on equity

(in millions euros)

Impact of a rise of +0.5% in interest rates

(2.0)

1.8

(0.8)

0.1

Impact of a decrease of (0.5)% in interest rates

2,0

(1,8)

0.8

(0.3)

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REGISTRATION DOCUMENT 2018 / NEOPOST