NEOPOST_REGISTRATION_DOCUMENT_2017

5

Financial statements

Consolidated financial statements

Changes in obligation 9-3-3: Group pension liabilities were as follows over the last five years:

2017

2016

2015

2014

2013

Obligation – present value

202.2

210.1

193.8

212.6

158.9

Fair value of assets

213.8

215.0

207.5

214.8

166.6

Plan (surplus)/deficit

(11.6)

(4.9)

(13.7)

(2.2)

(7.7)

Actuarial gains/(losses) On liabilities

1.2

(31.7)

18.0

(34.9)

(4.1)

On assets

(4.4)

27.4

(7.8)

26.2

2.6

The discount rates used are based on the yields on bonds issued by high quality companies (AA) or, where the market is not liquid, on government bonds with the same maturity as the calculations and the same currency (reference: Iboxx). These references are compliant with the requirements of IAS 19 and are the same as those used in previous years. The effective return on Group assets plan in 2017 is a gain of 2.4% compared with 2.9% in 2016. Assumptions such as medical expenses of retired employees are not included in this plan. In terms of salary, only the last

salaries at the time the plan was frozen are taken into account, without revaluation (only the annuity is revaluated). Actuarial differences are systematically recognized in shareholders’ equity and reported under consolidated statement of comprehensive income. The cumulative actuarial difference shows a loss of 1.1 million euros as at 31 January 2018 compared with a gain of 2.1 million euros as at 31 January 2017. The expense related to the French subsidiaries’ defined contribution pension plans amounted to 0.4 million euros in 2017 compared with 0.8 million euros in 2016.

9-4:

Share-based payments Accounting principles

9-4-1:

Group employees, including directors, may receive remuneration based on shares. They will ultimately receive equity instruments in return for services rendered. The fair value is determined by an outside consultant using an appropriate valuation method. The cost of equity-settled transactions with employees is measured at the fair value of the instruments awarded at the vesting date. The cost is recognized during the period in which the performance terms are met and/or the services are rendered, with the balancing entry being an equivalent increase in equity. The cumulative expense

recognized for such transactions at the end of each period until the rights acquisition date reflects the run-off of this acquisition period and the Group’s best estimate at that date of the number of instruments to be acquired. The awarding of these instruments is subject to the beneficiary being on the Company's payroll at the delivery date of the options or free shares and for some of the plans, to the achievement of performance targets. It is not possible to settle these options or these free shares in cash.

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REGISTRATION DOCUMENT 2017 / NEOPOST