NEOPOST_REGISTRATION_DOCUMENT_2017

2

Corporate governance report

Committees

The audit committee comprises Catherine Pourre, Éric Courteille (Chair) and William Hoover Jr., all independent directors. The appointments committee considered that Catherine Pourre and Éric Courteille fulfilled the criteria to be considered financial experts on the committee, due to their training and experience (see the detailed biographies of directors at the beginning of this section). The audit committee monitors all matters relating to the drafting and audit of financial and accounting information, specifically: the process of preparing financial information, particularly • by examining the scope of the consolidated companies; the efficiency of internal control and risk management • systems, the application and implementation of corrective measures, where needed; legal checks of the annual financial statements and, where • necessary, the consolidated financial statements by the statutory auditors; the competence and independence of the external experts • used by the Group. to review the scope of consolidation and examine all draft • consolidated and corporate financial statements and related reports which will be submitted to the Board for approval; to select a consolidation frame of reference, to ensure the • appropriateness and permanence of the accounting policies In this context, the task of the committee is:

used to draw up the consolidated and parent-company financial statements and to ensure the appropriateness of the treatment of significant operations at Group level; to ensure with respect to the General Management that all • legal and financial communications are correctly performed with respect to stock market authorities; to assess the level of satisfaction of statutory auditors with • the quality of information received from the Company's departments when performing their task and gather comments from managerial staff as regards the degree of sensitivity of the statutory auditors to the Group's business and its environment; to examine any information to its knowledge with respect • to operations and transactions by the Company involving ethical problems, and with respect to transactions which, due to their nature and the person concerned, may reveal a conflict of interests; to ensure that key risks are identified, managed and • brought to its attention. To this end, it examines the internal control and risk management systems, the internal audit programme, monitors its development and the results of action plans, and draws the Board's attention to any improvements that have been made or remain to be made; to issue an opinion on the appointment renewal of the • statutory auditors; to ensure the statutory auditor's independence and • objectivity.

The main topics discussed at the Audit committee meetings in 2017 were:

Review of the annual financial statements • Review of the management report • Review of the statutory auditors’ tasks and fees • Review of acquisition price allocation • Review of deferred taxes • Examination of off-balance sheet commitments • Presentation of work to measure the impact on IFRS 15 (new revenue recognition standard) • Validation of specific expenses (excluding auditing) • Review of internal audit procedures • Monitoring of the programmes carried out by internal audit • Presentation of the work on the impacts of the future application of other IFRS measures to • implement the “Sapin II” law on corruption and influence peddling

Financial position

Internal audit and risk management

Approach of work for the annual closing •

Miscellaneous

The audit committee primarily interacts with general management, the finance department, the Head of Internal Control and the Company's statutory auditors. The statutory auditors attend every audit committee meeting.

The audit committee can commission specific studies as required and may call on the services of outside experts.

25

REGISTRATION DOCUMENT 2017 / NEOPOST