NEOPOST_REGISTRATION_DOCUMENT_2017

5

Financial statements

Consolidated financial statements

By fixing the average discount rates as defined in the table above and assuming a growth rate to infinity of 0%, the valuation of several cash-generating units becomes equal to the book value of capital employed with an average five-year

revenue growth rate of 7.5% for Enterprise Digital Solutions, 11.2% for Neopost Shipping and 58.5% for Temando. In all cases, the sensitivity tests did not call into question the book value of the cash-generating units as at 31 January 2018.

Note 5

Assets held for sale

Discontinued operations A discontinued operation is a component operation of an entity that either has been disposed of, or is classified as held for sale and represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations or is a subsidiary acquired exclusively with a view to resale. When the criteria are met, the net income and the cash flow of discontinued operations are presented on a separate line in the consolidated income statements and consolidated statement of cash flow. The Group decides if a discontinued operation forms a separate major line of business or geographical region of operations substantially based on its contribution to the Group financial statements.

IFRS 5 "Non-current assets held for sale and discontinued operations" specifies the accounting treatment applicable to assets held for sale and the presentation and disclosure of discountinued operations. Assets held for sale Non-current assets held for sale are presented separately in the statement of financial position as soon as the Group has decided to sell these assets and when the sale is considered to be highly probable. These assets are measured at the lower of the carrying amount and the fair value less costs to sell. When the Group is committed to a sale plan involving loss of control of a subsidiary, all the assets and liabilities of this subsidiary shall be classified as held for sale, regardless of whether the Group will retain a non-controlling interest in its former subsidiary after the sale.

As at 31 January 2017, assets classified as held for sale for an These assets were measured at their fair value which led to amount of 2.0 million euros were related to the distribution recognition of a depreciation booked in other operational subsidiaries in Thailand, Singapore, Malaysia and Indonesia. expenses for an amount of 4.5 million euros.

Note 6

Operating data

6-1:

Sales

6-1-1:

Accounting principles

Equipment sales Equipment sales are recognized when the goods are shipped. This reflects the transfer to the buyer of major risks and benefits inherent to the ownership of the item because: the lead times between shipping, delivery and • installation are very short; the products are most often installed directly by the • customer;

In accordance with IAS 18, sales are measured at the fair value of the consideration received, 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 substantially all the risks and rewards of ownership to the buyer and retains neither continuing managerial involvement nor effective control over the goods sold. Rental of mailroom equipment The Neopost group rents equipment to its customers in France, United States and Canada under rental contracts in which the Group does not transfer all the risks and benefits of ownership of the assets. Contracts are generally for periods of one to five years. Rentals and maintenance contracts are normally billed in advance; the related revenue is recorded in income as earned. The balance is shown in deferred income.

the return rate after shipping is very low. •

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REGISTRATION DOCUMENT 2017 / NEOPOST