QUADIENT - 2019 Universal Registration Document

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FINANCIAL STATEMENTS Statutory auditors’ report on the consolidated financial statements

Revenue recognition

Risk identified

Our response

As at January 31, 2020, turnover amounted to 1,143 million euros. As described in Note 6-1 (“Sales”) the Group assessed sales at the fair value of the consideration expected, 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. The clauses of the commercial contracts between the Group and its customers include the terms and conditions for the transfer of ownership and the performance of services. The analysis of those conditions is decisive for the correct accounting of revenue. The accounting standards for the registration of this type of contract imply judgment in particular for complex contracts. In particular, for financial leases, the Group recognizes a sale of equipment and records a receivable amounting to the net present value of lease payments receivable over the term of the financing. For software and associated services and sales of patents, the Group recognizes revenue, as long as the following conditions are met: the Group has entered into a legal agreement with a • customer; the software or service has been delivered; • license fees are fixed and there are no uncertainties on • the completion of the contract; collection is probable. • An error in the analysis of the contractual obligations and their realization can lead to an erroneous accounting of the revenue. As a result, we have considered revenue recognition as a key audit matter, since it requires Management’s judgments and estimates, and therefore, may have a significant impact on the consolidated financial statements.

We performed walkthroughs to understand the procedures including IT systems implemented by the most significant subsidiaries contributing to the Group’s revenue. We analyzed the compliance of the revenue recognition rules with IFRS standards. We evaluated and tested key controls on the process of revenue recognition for the considered most significant subsidiaries. We conducted disaggregated analytical procedures at the level of each scoped subsidiary, and at Group level, by region and by products to analyze changes in sales throughout the year. We made selections on the turnover and examined: the related documentation to ensure that entries are • booked on the correct accounting period; the documentation for some manual entries impacting • the turnover accounts by focusing on non-recurrent transactions. We also examined the relevance of the disclosures in the consolidated financial statements.

SPECIFIC VERIFICATIONS

We have also performed, in accordance with professional standards applicable in France, the specific verifications required by laws and regulations of the information relating to the Group given in the Board of Directors’ Group management report, as approved on March 27, 2020. Regarding the events that occurred and the elements known after the date of approval of the consolidated financial statements relating to the effects of the Covid-19 crisis, Management has informed us that such events and elements will be communicated to the annual general meeting called to decide on these financial statements. We have no matters to report as to their fair presentation and their consistency with the consolidated financial statements. We attest that the consolidated non-financial statement required by Article L. 225-102-1 of the French Commercial Code (Code de commerce) is included in the Group management report, it being specified that, in accordance with Article L. 823-10 of this Code, we have verified neither the fair presentation nor the consistency with the consolidated financial statements of the information contained therein.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

Appointment of the Statutory Auditors

We were appointed as statutory auditors of Neopost S.A. by the annual general meeting held on July 8th, 2004 for Finexsi Audit and on September 9, 1997 for ERNST & YOUNG et Autres. As at January 31, 2019, Finexsi Audit and ERNST & YOUNG et Autres were in the sixteenth year and twenty-third year of total uninterrupted engagement, (which are twenty-one years since securities of the Company were admitted to trading on a regulated market) respectively.

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UNIVERSAL REGISTRATION DOCUMENT 2019