QUADIENT - 2020 Universal Registration Document

FINANCIAL STATEMENTS Consolidated financial statements

Retirement benefit obligations 10-3:

10-3-1: ACCOUNTING PRINCIPLES

Group companies participate in pension schemes and other staff benefits in accordance with the laws and customs of each country. The measurement and accounting policies applied by the Group with respect to these liabilities are in accordance with IAS 19: guarantees a future level of benefits: the liabilities are measured on the basis of actuarial valuations using the projected unit of credit method. These calculations use assumptions regarding mortality rates, staff turnover and wages, which reflect the economic conditions in each country or for each Group company. The liabilities are recognized under The main retirement obligation for the Group is the obligation for the United Kingdom. This retirement obligation is mainly covered by a pension fund showing a net asset of 36.3 million euros (32.1 million pounds sterling) as at 31 January 2021 compared with 43.0 million euros (36.2 million pounds sterling) as at 31 January 2020. It is accounted for in non-current assets. When a pension plan shows a net asset based on the assumptions used, IAS 19 states that this net asset should only be recognized in the balance sheet if an economic benefit is possible for the Company. Regarding the rules of the pension plan, Quadient has an unconditional repayment right of all the amounts left in the plan after the payment of the last pension to the last member of the pension plan. Quadient considers this to be a sufficient justification to recognize the net asset of the pension fund in the consolidated balance sheet, in accordance with IAS 19/IFRIC 14. defined benefit schemes under which the employer ● 10-3-2: OBLIGATION DETAILS

“Provisions for retirement benefit obligations”. Termination benefits are generally lump-sum payments based upon the number of years served by the employee and his/her salary as at retirement or termination of employment. Pension benefits are generally determined using a formula based on the number of years served by the employee and his/her average final earnings; schemes is recognized as an expense on the basis of contributions made. These schemes have no legal or constructive obligation to pay further contributions, the employer’s obligation is limited to the regular payment of contributions. The United Kingdom pension plan has not admitted any new members since 2001 and the rights of its members were frozen in June 2006. Every three years, the British regulator requires a valuation using different assumptions than those used for the valuation under IAS 19. If the valuation requested by the British regulator shows a deficit, Quadient has to make payments to offset it. The valuation performed for the British regulator in June 2020 identifies a non significant deficit related to the deteriorated economic conditions of the middle of the year 2020. The retirement benefits of French employees are not covered by investments in pension funds except for Quadient France which has subscribed an insurance contract. defined contribution schemes: the cost of these ●

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31 January 2021

31 January 2020

Change in value of obligations Present value of obligations at start of period

214.0

189.9

Service cost

1.7

1.2

Discounting cost

3.3

4.4

Actuarial (gains) or losses

10.4

21.0

Payments made

(9.8)

(10.9)

Scope variation

0.2

(0.2)

Other, including translation difference

(8.5)

8.6

Present value of liabilities at end of period

211.3

214.0

Change in hedging assets Fair value of hedging assets at beginning of period

232.0

204.9

Expected return on plan assets

3.5

4.6

Actuarial gains (losses)

5.3

22.5

Contributions paid by employer

2.8

1.1

Payments made by fund

(8.8)

(10.2)

Other, including translation difference

(10.9)

9.1

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UNIVERSAL REGISTRATION DOCUMENT 2020

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