QUADIENT - 2020 Universal Registration Document

FINANCIAL STATEMENTS Statutory auditors’ report on the consolidated financial statements

Sales

Risk identified

Our response

As at January 31, 2021, Sales amounted to EUR 1,029 million. 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 terms 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 treatment of revenue. The accounting standards for the registration of this type of contract imply judgment, and particularly for complex contracts. 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, if the following conditions are met: The group has entered into a legal binding 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. • As a result, we have considered revenue recognition as a key audit matter, since it is sensitive to management’s judgments and estimates, and therefore, may have a significant impact on the financial statements.

We performed walkthroughs to understand the procedures including IT systems implemented by the most significant components. We analyzed the compliance of the revenue recognition rules with IFRS 15 standards. We evaluated and tested key controls on the process of revenue recognition for the considered most significant components. We conducted disaggregated analytical procedures at the level of each scoped subsidiary, based on size or risk, and at group level by geographic region, and by products to analyze changes in sales throughout the year. On a sample of contracts, we obtained: The related documentation (contracts, invoices, delivery • notes, proof of service) to ensure the accounting on the correct accounting period; The documentation for some manual entries impacting • the turnover accounts by focusing on non-recurrent transactions. We also assessed the appropriateness of the disclosures in Note 6-1 of the appendices to the consolidated financial statements.

6

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 given in the Board of Directors’ Group management report. 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 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.

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UNIVERSAL REGISTRATION DOCUMENT 2020