NEOPOST_REGISTRATION_DOCUMENT_2017

5

Financial statements

Parent company statements of financial position

Loan/borrowing/short-term advance

Notional amount of financial instruments

Subsidiary

Currency

Amount

Neopost Sverige AB

Loan

SEK

53.6

Neopost Sverige AB

Short term advance

SEK

(17.5)

Neopost Finance (Ireland) Ltd

Loan

SEK

45.0

Neopost Finance (Ireland) Ltd

Short term loan

SEK

7.0

Neopost Finans AB

Short term advance

SEK

(5.3)

82.8

Neopost Finance (Ireland) Ltd

Loan

DKK

40.0

Neopost Finance (Ireland) Ltd

Short term loan

DKK

7.7

Neopost Danmark AS

Short term advance

DKK

(13.8)

Neopost Danmark Finans AS

Short term advance

DKK

(2.0)

31.9

Quadient Canada Inc

Short term loan

CAD

4.5

4.5

Quadient Poland sp z.o.o

Short term loan

PLN

3.9

3.9

Neopost Asia-Pacific Pte Ltd

Short term loan

SGD

0.2

Quadient Singapore Ltd

Short term loan

SGD

4.4

4.6

Temando Holding Pty

Short term advance

AUD

(0.3)

Neopost Finance (Ireland) Ltd

Loan

AUD

30.0

Temando Pty Ltd

Short term advance

AUD

(0.1)

Neopost Finance (Ireland) Ltd

Short term loan

AUD

3.2

Neopost Shipping Holding Pty

Short term loan

AUD

41.0

Quadient Australia Pty Ltd

Short term loan

AUD

3.0

Neopost Holdings Pty Ltd (Australie) 73.1 Neopost S.A. naturally hedges these loans by debts in united States dollar (private placements, Schuldschein, revolving credit facilities). (a) Short term advance AUD (3.7)

13-3 Risk management policy

Hedging of interest rate risk

Year-end position A hedging strategy is adopted on the basis of the position to be managed and the reference interest rate adopted. The strategy is aimed at protecting the reference interest rate and at taking advantage, at least to some extent, of favorable movements. Hedging strategies involve definite and optional derivative instruments, and open positions are maintained if possible. The valuation of the open position based on market forward interest rates, along with the interest rates obtained through hedging operations, should always protect the reference interest rate. Hedging strategies cover the period three years ahead at all times. However, the level of coverage and the weightings of the various derivative instruments may vary from one year to the next, since the aim is to maintain greater scope for optimizing positions in later years. Neopost works with the same consultancy for hedging both interest rate risk and exchange rate risk.

To limit the impact of a rise in interest rates on its interest expenses, the Neopost group has a risk-hedging policy aimed at protecting a maximum annual interest rate for the three years ahead at all times. management horizon used is rolling in order to always have three years of management. Neopost has a policy of centralizing its interest rate risk, enabling it to monitor the Group’s overall interest rate risk exposure and to gain full control over the market instruments used in hedging operations. The Group hedges its interest rate risk depending on its current debt levels, but also according to likely future movements in debts, arising from drawings on its revolving credit facilities. Financial instruments are carried by the legal entities that have the corresponding debt on their balance sheet.

The table below sets out Neopost S.A.’s year-end position:

EUR

USD

Financial assets

-

-

Financial liabilities

908.6

238.9

Net exposure before hedging

(908.6)

(238.9)

Fixed-rate debt

733.3

145.0

Hedging

155.0

95.0

190

REGISTRATION DOCUMENT 2017 / NEOPOST