QUADIENT - 2020 Universal Registration Document

FINANCIAL STATEMENTS Consolidated financial statements

Actuarial differences are systematically recognized in shareholders’ equity and reported under the consolidated statement of comprehensive income. The cumulative actuarial difference shows a loss of 0.4 million euros as at 31 January 2021 compared with a loss of 5.5 million euros as at 31 January 2020.

The expense related to the French subsidiaries’ defined contribution pension plans amounted to 0.6 million euros in 2020 compared with 0.3 million euros in 2019.

Share-based payments 10-4:

10-4-1: ACCOUNTING PRINCIPLES

Group employees, including top management, 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 over 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.

10-4-2: STOCK OPTION PLANS

No more stock options have been granted since January 2012. Arrangements relating to plans still in force are described in previous Quadient registration documents. Options have been valued based on the Bjerksund & Stensland (2002) model to which the non-transferability value is added as calculated by the difference between the

Bjerksund & Stensland model and the Black, Scholes & Merton (1973) model for options with a duration equivalent to the non-transferability period. The stock-option plans terms and conditions approved by the Annual General Meeting are as follows:

6

Adjusted number of options granted (a)

Of which subject to conditions (b)

Adjusted exercise price (a) (in euros)

Outstanding options 31/01/2020

Options cancelled or adjusted (a)

Outstanding options 31/01/2021

Options expired

Expiry date

Start date

12/01/2011

245,585

41,018 60.86–62.32 127,906 (127,906)

-

- 12/01/2021

12/01/2012

267,538

76,917

47.76–48.85

117,987

-

(22,529)

95,458 12/01/2022

Adjusted number since the payment of the balance of the dividend partly issued from capital reserves. (a) Options granted with performance conditions. (b)

10-4-3: FREE SHARE PLANS

Free shares are granted for the purposes of: attracting and retaining high potential employees; ● acknowledging exceptional performance; ● fostering strong motivation and commitment to the ● Company’s performance by granting specific free share plans based on the Group’s future results.

expense was calculated by estimating a number of shares whose ownership will be transferred corresponding to a percentage of the maximum attributable amount. This assumption is considered the most likely on the date of allocation. This expense is spread out over the vesting period. The number of shares is adjusted at each closing date and the expense is revaluated consequently to ensure that the period expense corresponds to the number of shares

The fair value of the shares thus granted is calculated effectively attributed. based on the share price on the allocation date from which anticipated dividend are deducted. The overall

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UNIVERSAL REGISTRATION DOCUMENT 2020