Registration document 2013 - Le Groupe La˜Poste 2013/media/documents/public/annual...Le Groupe La...

GROUP FINANCE DEPARTMENT44 BD DE VAUGIRARD — 75757 PARIS CEDEX 15

Tél. : +33 (0)1 55 44 00 00www.legroupe.laposte.fr

La Poste – Société anonyme with a capital of €3,800,000,000 – 356 000 000 RCS PARIS – Head office: 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX 15

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2013

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A public limited company with share capital of €3,800,000

Head office: 44, boulevard de Vaugirard, 75015 Paris

Siren No.: 356 000 000

Registration document

2013Annual financial report

This registration document contains all of the information that forms part of the annual financial report.

The original French version of this registration document was filed with the Autorité des marchés financiers (French Financial

Markets Authority) in accordance with Article 212-13 of its General Regulations, 12 March 2014. It may be used in connection

with a financial transaction if it is supplemented by a transaction note (note d’opération) endorsed by the AMF. This document

has been drawn up by the issuer and is binding on its signatories.

Pursuant to Article 28 of European Commission (EC) Regulation No.809/2004, the following is included by reference in this

registration document:

• the consolidated financial statements of Le Groupe La Poste for 2012 and the corresponding Statutory Auditors' report

reproduced in paragraphs 20.1.1 and 20.1.2 of the 2012 registration document, filed with the AMF on 28 March 2013 under

number R13-009;

• the consolidated financial statements of Le Groupe La Poste for 2011 and the corresponding Statutory Auditors' report

displayed in paragraphs 20.1.1 and 20.1.2 of the 2011 registration document, filed with the AMF on 20 April 2012 under

number R12-012.

This document is a free translation from French into English and has no other value than an informative one. All possible care has been taken to ensure that the translation is an accurate presentation of the original. Should there be any difference between the French and the English version, only the text in French language shall be deemed authentic and considered as expressing the exact information published by Le Groupe La Poste.

Copies of this registration document are available free of charge from La Poste, 44, boulevard de Vaugirard, 75015 Paris, as well as on its website, at www.laposte.fr, and on the French Financial Markets Authority website at www.amf-france.org.

Contents

Person responsible 5

1.1 Person responsible for the registration document . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

1.2 Declaration from the person responsible for the registration document . . . . . . . . . . . . . . 6

Statutory Auditors 7

2.1 Regular Statutory Auditors . . . . . . . . . . . . . . . . 82.2 Alternate Statutory Auditors . . . . . . . . . . . . . . . 8

Le Groupe La Poste profile and selected financial information 9

3.1 Overview: a major multi-business services group . . . . . . . . . . . . . . . . . . . . . . . . . 10

3.2 History and milestones in the development of the Group’s business activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

3.3 Selected financial information . . . . . . . . . . . . 123.4 Group strategy . . . . . . . . . . . . . . . . . . . . . . . . . 14

Information on the Company 17

4.1 Company name . . . . . . . . . . . . . . . . . . . . . . . . . 184.2 Registration place and number . . . . . . . . . . . 184.3 Date of incorporation and duration of the

Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184.4 Head office, legal status and governing

law applicable . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Overview of business activities 19

5.1 Presentation of business activities . . . . . . . . 205.2 Digital services are central

to Le Group La Poste . . . . . . . . . . . . . . . . . . . . 715.3 Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 775.4 Social and Environmental Responsibility . . . 905.5 Quality of customer relations . . . . . . . . . . . . 1025.6 Exceptional events . . . . . . . . . . . . . . . . . . . . . 1045.7 Dependence on patents . . . . . . . . . . . . . . . . . 104

Simplified organization chart 105

Property, plant and equipment 109

7.1 The Group’s assets . . . . . . . . . . . . . . . . . . . . . 1107.2 Environment and sustainable development 111

Innovation and intellectual property 113

8.1 Innovation in action . . . . . . . . . . . . . . . . . . . . 1148.2 Intellectual property policy . . . . . . . . . . . . . . 116

Risk factors 117

9.1 Risk management system and methods for identifying and handling risks . . . . . . . . . 118

9.2 Strategic risks . . . . . . . . . . . . . . . . . . . . . . . . . 1199.3 Operational risks . . . . . . . . . . . . . . . . . . . . . . 1229.4 Financial risks . . . . . . . . . . . . . . . . . . . . . . . . 1249.5 Legal and regulatory risks . . . . . . . . . . . . . . 1299.6 Policy of covering certain risks

with insurance . . . . . . . . . . . . . . . . . . . . . . . . 131

Review of the financial position and results 135

10.1 Highlights 2013 . . . . . . . . . . . . . . . . . . . . . . . . 13610.2 Summary of Le Groupe La Poste

consolidated results . . . . . . . . . . . . . . . . . . . 14610.3 Operating results by business segment . . . 14910.4 Other income statement aggregates . . . . . . 16110.5 Debt and financial strength . . . . . . . . . . . . . . 16210.6 Analysis of the parent company financial

statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 16910.7 Other financial information . . . . . . . . . . . . . . 17210.8 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . 17310.9 Post balance sheet events . . . . . . . . . . . . . . . 173

Cash, cash equivalents and equity 175

Outlook 177

Profit forecasts or estimates 179

Administrative, management and supervisory bodies and Executive Management 181

14.1 Board of Directors . . . . . . . . . . . . . . . . . . . . . 18214.2 Executive Management . . . . . . . . . . . . . . . . . 18914.3 Absence of family ties, convictions

and conflicts of interest . . . . . . . . . . . . . . . . . 193

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Remuneration and benefits 195

15.1 Remuneration and benefits paid to corporate officers . . . . . . . . . . . . . . . . . . . 196

15.2 Total provisions and amounts recognised for pensions and other benefits . . . . . . . . . . . 200

Operations of administrative bodies 201

16.1 Duties of the Board of Directors . . . . . . . . . . 20216.2 Activity of the Board of Directors in 2013 . . 20416.3 Assessment of the operation

of the Board of Directors . . . . . . . . . . . . . . . . 20416.4 Board Committees within the Board

of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . 20516.5 Internal control . . . . . . . . . . . . . . . . . . . . . . . . 20716.6 Compliance with the system of corporate

governance in force in France . . . . . . . . . . . . . 208

Employees 209

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . 21017.1 Change in staff numbers . . . . . . . . . . . . . . . . 21017.2 A responsible employment policy . . . . . . . . 21017.3 Professional development, training

and promotion policy . . . . . . . . . . . . . . . . . . . 21117.4 Diversity and equal opportunity . . . . . . . . . . 21517.5 Health and safety—Quality of life at work . . 21817.6 Players in HR support . . . . . . . . . . . . . . . . . . 21917.7 General remuneration policy . . . . . . . . . . . . 22017.8 Staff policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22217.9 Employee shareholding . . . . . . . . . . . . . . . . . 22717.10 Summary of employee information . . . . . . . 227

Principal shareholders 231

18.1 Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . 23218.2 Control of La Poste . . . . . . . . . . . . . . . . . . . . . 23218.3 Known agreement that could lead

to a change of control . . . . . . . . . . . . . . . . . . . 232

Related-party transactions 233

19.1 Relations with the French Government and public sector companies . . . . . . . . . . . . 234

19.2 Relations with consolidated companies . . . 235

Financial information regarding the assets and liabilities, financial position and results of the issuer 237

20.1 Consolidated financial statements . . . . . . . . 23820.2 Separate financial statements . . . . . . . . . . . 37920.3 Dividend distribution policy . . . . . . . . . . . . . . 42620.4 Legal and arbitration proceedings . . . . . . . . 42620.5 Material change in the Company’s

financial or commercial position . . . . . . . . . 426

Additional information 427

21.1 Share capital . . . . . . . . . . . . . . . . . . . . . . . . . . 42821.2 Memorandum of association

and articles of association . . . . . . . . . . . . . . 430

Material contracts 435

Third-party information, statements by experts and declarations of interest 437

Publicly available documents 439

Information on equity investments 441

Appendices 443

A1 Chairman's report on corporate government, internal control procedures and risk management in respect of 2013 . . . . . . . . . . . . . . . . . . . . . . 445

A2 Statutory Auditors' report, prepared in accordance with Article L. 225-235 of the French Commercial Code, on the report of the Chairman of the Board of Directors of the company La Poste . . . . . . . . . . . . . . . . . . 489

A3 Summary of information pertaining to the social and environmental consequences of the business activities, and societal commitments in favour of sustainable development . . . . . . . . . . . . . 493

A4 Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 509A5 Cross reference table . . . . . . . . . . . . . . . . . . 519

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Registration document 2013 / LE GROUPE LA POSTE4

5Registration document 2013 / LE GROUPE LA POSTE

1

1.1 Person responsible for the registration document 6

1.2 Declaration from the person responsible for the registration document 6

Person responsible


1Person responsible Person responsible for the registration document

1.1 Person responsible for the registration document

Mr Philippe Wahl

Chairman and Chief Executive Officer

La Poste

1.2 Declaration from the person responsible

for the registration document

Having taken all reasonable care to ensure that such is the case, I certify that the information contained in this registration

document is, to the best of my knowledge, in accordance with the facts and contains no omission likely to affect its import.

I declare that, to the best of my knowledge, the financial statements have been drawn up in accordance with the relevant

accounting standards and give a true and fair view of the assets and liabilities, financial position and results of the Company

and all the companies included in the consolidation, while the management report (pages 135 to 174 of this registration

document) gives a true and fair view of changes in the business, results and financial position of the Company and all the

companies included in the consolidation, as well as a description of the main risks and uncertainties they face.

The Statutory Auditors have provided me with a completion letter indicating that they have verified the financial position

and accounting information in this report and have read this same document in its entirety. This letter does not contain any

comments.

The historical information relating to La Poste presented in this registration document has been audited by the Statutory

Auditors whose reports are reproduced on pages 376 and 424 of this document. In the report relating to the consolidated

financial statements for the year ended 31 December 2013, the Statutory Auditors, without qualifying their opinion, have

drawn the reader's attention to the matter set out in Notes 2.1.A and 29 to the consolidated financial statements which set

out the change in accounting policies from the application of the revised standard IAS 19, related to employee benefits.

Chairman and Chief Executive Officer

Philippe Wahl


2

2.1 Regular Statutory Auditors 8

2.2 Alternate Statutory Auditors 8

Statutory Auditors


2Statutory Auditors Regular Statutory Auditors

2.1 Regular Statutory Auditors

Mazars

Represented by Guy Isimat-Mirin and Dominique Muller

Tour Exaltis

61, rue Henri-Regnault

92400 Courbevoie

Mazars was appointed by the inter-ministerial decree of

18 September 1991 and reappointed by the inter-ministerial

decrees of 17 October 1997, 20 June 2003 and 29 June 2009.

KPMG

Represented by François Caubrière and Isabelle Goalec

1, cours Valmy

92923 Paris-La Défense Cedex

KPMG was appointed by the inter-ministerial decree of

29 June 2009.

2.2 Alternate Statutory Auditors

Serge Castillon

Tour Exaltis

61, rue Henri-Regnault

92400 Courbevoie

Philippe Mathis

1, cours Valmy

92923 Paris-La Défense Cedex

Serge Castillon and Philippe Mathis were appointed by the inter-ministerial decree of 29 June 2009.

The current terms of the regular and alternate Statutory Auditors will expire at the end of the Ordinary General Meeting

called to approve the financial statements for the year ending 31 December 2014.


3

3.1 Overview: a major multi-business services group 10

3.2 History and milestones in the development of the Group’s business activities 10

3.3 Selected financial information 12

3.4 Group strategy 14

Le Groupe La Poste profile

and selected financial information


Le Groupe La Poste profile and selected financial information Overview: a major multi-business services group3

3.1 Overview: a major multi-business services group

Le Groupe La Poste is a major services group that today

ranks among France's top 25 groups by revenue. It is also

France's leading employer after the French government

with nearly 266,400 employees.

In 2013, the Group had revenues of €22,084 million, of which

17.6% in international markets, and an operating profit of

€770 million.

Comprised of the parent company (La Poste S.A.) and its

subsidiaries, Le Groupe La Poste has opted for a multi-

business group structure. It is organised around its core

Business Lines:

Mail (47.4% of the Group’s operating revenue in 2013);

Parcels-Express (26.9% of the Group’s operating revenue

in 2013);

Banking activities (25.0% of the Group’s 2013 operating

revenue) through La Banque Postale.

Since May 2011, the Group has also been marketing a

mobile telephone services business as a virtual network

operator (1) under the brand La Poste Mobile.

The marketing and delivery of services are, according to

needs and evolving lifestyle trends, supported by:

a network of 17,081 postal outlets in France, directly-

owned or held in partnership with local authorities or

merchants. More than 96% of French people live within

five kilometres of a postal outlet;

a network of 7,000 parcel PickUp and DropOff points

(PUDOs);

letter and parcel delivery rounds, organised in order for

Mail and Parcels to service 26 million French households

per day;

web-based and other remote channels ensuring an

increasing proportion of sales activities, customer

relations and after-sale services.

La Poste has been tasked by the French government with

four public service missions at the heart of its identity. Fully

integrated into its operations, they remain central to Group

strategy: the Universal Postal Service, press transportation

and delivery, regional planning and development and

banking accessibility (see Chapter 5, Section 5.3).

The conditions governing the performance of these

missions are set by public service agreements between

La Poste and the French government. The agreement

currently in force was signed on 1 July 2013 and covers the

2013-2017 period: reaffirming its public service missions,

it also enables Le Groupe La Poste to commit to public

citizenship responsibilities by contributing as a public

company to developing policies in the general interest (see

Chapter 5, Section 5.3.2). With regards to regional planning

and development, on 16 January 2014 La Poste, the French

government and the French Mayors Association (Association

des Maires de France), signed the 2014-2016 local postal

coverage agreement (see Chapter 5, Section 5.3.2.2).

And finally, the Group has consistently been a major player

in regional development. La Banque Postale's launch in

2012 as a provider of local authorities financing highlights

this positioning.

La Poste's close ties with the French people reflect its long

history which runs deep into their regions, their daily life

and their imagination.

3.2 History and milestones in the development

of the Group’s business activities

Without going too far back in time, La Poste, as a company,

grew out of the Post and Telecommunications Ministry,

established as the “ministère des Postes et Télégraphes”

in 1879. The first post offices appeared before this, dating

back to the end of the 16th century; the first town postmen

appeared in 1760, and the first stamp was created in 1849.

From 1881, the initial financial activities were extended to

(1) MVNO: Mobile Virtual Network Operator. La Poste Mobile uses the mobile phone network of SFR.


Le Groupe La Poste profile and selected financial information History and milestones in the development of the Group’s business activities 3

The key rules that continue to govern mail delivery today

were put in place in the first half of the 19th century, with

the development of a network of public outlets across the

country and the establishment of a rural service in 1830

allowing postmen to move out into the countryside, with

daily delivery beginning from 1832.

From 1923, Post and Telecommunications were granted a

separate budget from the French government; a situation

that would continue under the 1959 French organic law on

Finance laws.

La Poste and France Telecom were given legal entity status

and financial autonomy by French Act 90-568 of 2 July 1990

on the restructuring of the postal and telecommunications

public service. La Poste therefore became a public sector

operator, the status of which was confirmed as an EPIC

(établissement public à caractère industriel et commercial,

or Public Industrial and Commercial Establishment) by

the French Council of State in 1998. As at 1990, it was

equipped with a tripartite Board of Directors governed by

the provisions of law on the democratisation of the public

sector. The law gave La Poste the management autonomy

it needed to push forward with its development strategy.

La Poste was allowed to freely manage its assets while

ensuring the financial stability of its business activities.

Having its autonomy, La Poste laid down its main strategic

priorities via plans designed to ensure growth in its

business activities and financing for capital expenditure,

to successfully carry out its public service missions

and to preserve its social model. A number of planning

agreements have been entered into by La Poste and the

French government, setting out the Company’s strategy and

the goals regarding the public service missions entrusted

to La Poste.

Since 2008, and pursuant to the New Economic Regulations

Act (Nouvelles Régulations Économiques or NRE), two

separate documents are submitted to the Board of

Directors: a business contract signed by the French

government and La Poste, setting public service mission

objectives and a business plan, defining the company

strategy. A new business contract was signed on 1 July 2013

for 2013-2017. On 28 January 2014, a new strategic plan

for 2014-2020 was presented to the Board of Directors. The

financial business plan will be presented in mid-2014 (see

Section 3.4).

Over the past decade, Le Groupe La Poste has transformed

itself while continuing to carry out the public service

missions assigned to it under French legislation. It has

completely reorganised itself by Business Lines and has

undertaken the modernisation of its industrial and logistics

facilities in order to increase efficiency and quality as well

as introduce new services. It has enhanced its distribution

network through modernisation measures and developing

resource sharing, in particular for local and intercommunal

postal agencies (APCs) and Relais-Poste outlets (RPs)—see

Chapter 5, Section 5.1.4.1.2. In the Express business, it has

built one of the leading European networks by establishing

the GeoPost holding company. It has developed a retail

banking activity with a comprehensive offering: the French

law of 20 May 2005 on the regulation of postal business

enabled La Poste to establish La Banque Postale on the

basis of La Poste’s former financial services business.

These developments have resulted in the creation and

acquisition of subsidiaries in its different Business Lines,

transforming Le Groupe La Poste into a major services

group while it continues to assure its public service

missions.

The Group's markets have also undergone major

transformations in recent years, impacted in particular by

an activity fully opened up to competition since 1 January

2011, when the postal service monopoly ended through

the complete deregulation of the sector, the digitisation of

information flows or the development of online commerce.

La Poste's transformation into a public limited company)

on 1 March 2010, in accordance with the law of 9 February

2010, enabled it to establish a share capital and gain

access to financing through capital increases, an essential

prerequisite to finance an investment plan and major

developments to manage the new challenges in its different

markets.

In connection with the €2.7 billion capital increase

adopted by the Board of Directors in February 2011, the

Group welcomed a new shareholder, Caisse des Dépôts

et Consignations, alongside the French government. This

capital increase was carried out through three payments: a

first €1,050 million payment was paid in April 2011, followed

by a second €1,050 million payment in April 2012. The third

and last payment for €600 million was made in spring 2013.

These payments have notably allowed the Group to execute

and accelerate its development and innovation initiatives

while improving its financial structure.

The law of 9 February 2010 set out the principles

underpinning the change in status. Legal and financial

continuity in terms of assets and liabilities between La Poste

and La Poste S.A. is guaranteed. All of the share capital

can be held by the French government, by legal entities

belonging to the public sector or by employees. Employees

retain their rights, in particular those with the status of

state employee. As at 1 March 2010, state employees are

employed by La Poste S.A. pursuant to Article 29-4 of the

French Postal law of 9 February 2010.

In addition, the four public service and general interest

missions assigned to La Poste were confirmed by the

law of 9 February 2010. These missions defined by

Article 2 of the French law of 2 July 1990 as amended,

were previously guaranteed by the law of 20 May 2005


Le Groupe La Poste profile and selected financial information Selected financial information3

governing the regulation of postal business—which had

also implemented a regulation governing postal business

assigned to the Autorité de régulation des communications

électroniques et des postes (ARCEP), the French regulator

of the electronic communications and postal sectors. The

undertakings of La Poste and the French government with

respect to public service were redefined by the 2013-2017

business contract signed on 1 July 2013, providing for the

maintenance of a large scope for its public service missions,

a further reinforced quality trajectory, missions in line with

user expectations and technological developments, the

implementation of corporate citizenship commitments in

favour of territories and businesses as well as the most

vulnerable, the development of the digital society and CSR.

In terms of social model, La Poste's goal is to be an

exemplary corporate citizen with respect to well-being

at work. On 22 January 2013, La Poste management and

the unions CFDT, FO, CGC-UNSA and CFTC signed an

agreement making specific and innovative commitments

focusing on improving Quality of life at work. This agreement

reflected the Group commitment resulting from the "Major

Dialogue" launched in 2012 on the subject of Quality of life

at work (see Chapter 17).

On 4 July 2013, the Chairman and Chief Executive Officer, Jean-

Paul Bailly, informed the Board of Directors of his intention not

to complete his term of office. He was replaced by Philippe

Wahl who assumed his functions on 26 September 2013.

Finally, 2013 was marked, on 4 July, by the presentation of a

strategic project. Through information drawn from a participative

approach based on a consultation with all La Poste's

stakeholders including more than 150,000 employees, this

strategic project laid the foundations for a new strategic

plan presented to the Board of Directors on 28 January 2014

(see Chapter 3, Section 3.4).

3.3 Selected financial information

The 2012 and 2013 selected financial information presented

below is taken from Le Groupe La Poste's consolidated

financial statements, which have been prepared in

accordance with IFRS.

This information must be read in conjunction with the

following sections of the registration document:

the consolidated financial statements in Chapter 20;

the Group’s financial and operating review in Chapter 10;

the cash flow analysis in Chapter 11.

3.3.1 Consolidated income statement

(€ million) 2013 2012

Operating revenue 22,084 100% 21,658 100%

Operating profit 770 3.5% 816 3.8%

Financial profit/(loss) (223) -1.0% (284) -1.3%

Income tax (127) (231)

Consolidated net profit 420 301

Share in profits of equity associates 215 1.0% 180 0.8%

Attributable to non-controlling interests 8 2

Net profit, Group share 627 2.8% 479 2.2%


Le Groupe La Poste profile and selected financial information Selected financial information 3

3.3.2 Consolidated balance sheet

(€ million) 2013 2012

Intangible assets (including goodwill) 2,404 2,387

Property, plant and equipment 5,941 6,062

Investments in equity associates 2,634 2,446

Current banking assets 195,837 191,876

Other current assets 6,648 6,661

Total assets 214,677 210,544

Net debt (1) 3,778 3,460

Equity, Group share 8,460 7,470

Contingency and loss provisions 1,746 1,480

Current banking liabilities 190,133 186,883

Net debt(1) is defined in Chapter 10, Section 10.5 and detailed in Note 28.1 of the appendix to the consolidated financial

statements—Chapter 20, Section 20.1.

3.3.3 Changes to net debt

(€ million) 2013 2012

EBITDA 824 915

Cash flows from operating activities 1,056 1,195

of which dividends paid by La Banque Postale 258 186

Cash flows from investing activities (excluding purchases and sales of negotiable debt

securities with maturities of less than 3 months) (1,403) (876)

of which La Banque Postale issuance of subordinated notes (800)

Dividends paid (171) (144)

La Poste S.A. capital increase 600 1,050

Net interest expense (164) (164)

Other items (235) 23

Change in net debt (1) (318) 1,084

The calculation of net debt (1) is presented in Note 28.1 to the consolidated financial statements (Chapter 20, Section 20.1).

This net debt is defined in Chapter 10, Section 10.5. Comments on these changes are provided in Chapter 10, Section 10.5.

(1) Group net debt does not take into account banking activity for which this concept is not relevant.


Le Groupe La Poste profile and selected financial information Group strategy3

3.3.4 Bank ratios

(in %) 2013 2012

Loan to deposit ratio (a) 67% 59%

Total balance sheet assets 200 196

Core Tier 1 Ratio (b) 11.4% 12.1%

(a) Ratio of loans to deposits, defined according to specific rules, excluding savings centralised at CDC.

(b) Basel 2.5 Core Tier 1 Ratio = Core Tier One 2.5 less eligible hybrid capital and after applying the deductions from Tier 1 capital as per CRD Regulation III,

with respect to / Risk Weighted Assets (RWA).

3.4 Group strategy

La Poste's strategy has been laid out in a series of

successive plans designed to develop and finance its

operations while ensuring it meets its public service

missions within the framework of a high-quality social

model.

The "Performance and Convergence" strategic plan, drawn

up for 2003-2007, developed the autonomy of La Poste's

business activities by ensuring that each had its own proper

organization. This plan also allowed the Group to modernise

the Mail industrial facilities and post offices, build a

European network for the Express business and eliminate

the competitive handicaps the Group had inherited from its

past as a government service. This final step was achieved

with the setting up of La Banque Postale in 2005 and the

pension funding reform for state employees working for

La Poste in 2006.

During the 2003-2008 period, the strength of the Group’s

business portfolio was demonstrated and Group earnings

registered sustained improvements. Nevertheless, the

Group remained under-capitalised, with a net debt (1)/equity

ratio of over 2, which might have constrained its growth.

A new “Performance and Trust” plan was adopted for

2008-2012 to continue to prepare the Company for the full

deregulation of its business activities from 1 January 2011.

It has also contributed to widespread adoption of customer

commitments and a responsible development policy.

Furthermore, in 2008 the Government asked the Ailleret

Commission (Commission de développement de La Poste)

to assess the impact of the new competitive environment,

review the various options for the development of the

Group and estimate the funding requirements needed to

achieve them. Given the need to modernise the post office

network, innovate in order to continue developing new

forms of mail (e.g. digitisation), complete the establishment

of the European Parcels-Express network and continue

the development of La Banque Postale, the Commission

put La Poste’s capital requirement at €2.7 billion and

proposed its transformation into a public limited company.

These proposals, approved by the President of the French

Republic in December 2008, paved the way for the adoption

of the law of 9 February 2010, which transformed La Poste

into a public limited company starting from 1 March 2010

with the goal of conducting a capital increase to ensure its

growth and put its financial structure on a sound footing.

In April 2010, Le Groupe La Poste, taking into account the

profound transformation of its model (advent of the digital

society, growing digitisation of data flows) and the financial

crisis followed by the economic crisis since 2008, developed

a new "Ambition 2015" strategic plan. This plan was based

on an investment programme in large part self-financed

and supplemented by proceeds from a €2.7 billion capital

increase approved by the Board of Directors on 10 February

2011 taken up by the French government and the Caisse des

Dépôts et Consignations.

In 2013, faced with the challenge to its historical model

resulting from changes in its economic, regulatory and

technological environment, the Group initiated a broad-

based participative initiative involving an unprecedented

consultation with all its stakeholders: more than

150,000 postal workers, labour organization representatives,

shareholders, Board of Directors' members, associations of

(1) Group net debt does not take into account banking activity for which this concept is not relevant. Ratio of "net debt to equity" dividing Group net debt by

Group share of equity.


Le Groupe La Poste profile and selected financial information Group strategy 3

elected officials and consumers. La Poste also organised

"Citizen Conferences", an initiative rarely used in France,

inviting groups of persons representing rural and urban

areas and micro-business entrepreneurs to work together

and share their expectations about La Poste's services in

the future.

Following this consultation, on 28 January 2014 the

Group presented the major lines of action of it strategic

plan to the Board of Directors. This plan provides for a

major transformation starting in 2014 based on a vision, a

roadmap and an implementation timetable.

This vision puts the human dimension and trust at the

heart of the customer relation, in line with its values,

core missions and La Poste's know-how. With the

convergence of its networks—available to everyone,

everywhere and every day—it is helping its customers to

simplify their future.

The roadmap sets the priority of developing existing

activities and expanding into new areas, while at the

same time assuring and modernizing its public service

missions, developing new missions of general interest

and building a social pact. Improving the company's

competitiveness represents a condition for returning to

sound financial health.

The method and timetable for implementation provide

for presenting, at the end of March 2014, an organization

adapted to the Group and, at the end of June, action

plans and a financial business plan.

The new strategic plan: "La Poste 2020: Conquering the Future" – A growth and development plan at the service of customers

Accelerate the development of existing business activities

Mail aims to consolidate its position as a premium media

for global multi-channel customer relations and become

the number one network for local services. As part of

this objective, ColiPoste will join the Mail Business Line.

Parcels-Express will have as its mission to build the first

hybrid network (BtoB and BtoC) in Europe, with a continental

dimension, and to become the European leader in parcel

delivery to private individuals. The Retail Brand will be

positioned as the reference network for services and public

service missions. Similarly, it will support the commercial

development of La Banque Postale, La Poste Mobile and

the offerings for professionals of all the Group’s Business

Lines. La Banque Postale will accelerate its development by

equipping all its customers, from private individuals (from

the most vulnerable ones to the high-net-worth clients) and

legal entities (especially businesses). Digital activities will

speed up the Group’s digital transformation, spur innovation

in connection with the digital ecosystem, and ensure a

continuous customer experience for all La Poste services,

while developing new business activities, particularly as a

trusted third party in digital exchanges.

Capture new markets

La Poste has significant assets to capture new markets:

values, structural support—its networks, the diversity of

its Business Lines, the commitment of its employees, the

stability of its shareholders, trust—and know-how that is in

tune with the times, where the digital and physical worlds

meet. These new markets are booming:

e-commerce;

local logistics;

assistance to the elderly (silver economy), vulnerable

and/or isolated;

secure digital exchanges;

services related to the connected environment;

the regional social and solidarity economy;

new business activities based on the Group's assets (real

estate management on behalf of third parties, mobile

telephony, Internet and associated services).

Taking a foothold in these new markets, Le Groupe La Poste

will meet the expectations of customers, citizens, regions

and postal workers who want La Poste to continue to

perform critical missions that are still relevant in the digital

age: facilitating exchange, helping to maintain territorial

unity, promoting regional development, strengthening

social cohesion, and maintaining the privacy and security

of correspondence. As with all Group business activities,

these new projects will be undertaken in the context of its

Corporate Social Responsibility (CSR) policy.


Le Groupe La Poste profile and selected financial information Group strategy3

Ensure, modernize, and balance public service missions

La Poste will further improve its level of service quality,

reinforce its fight against financial exclusion and dialogue

with the State on modernizing its public service missions.

Develop new business activities in the public interest

La Poste is currently investigating several opportunities

based on the values of trust and accessibility that could

eventually give rise to new activities in the public interest:

participation in the energy transition (identification of private

individuals’ needs by postmen, loans funded by La Banque

Postale for carrying out works, etc.), creation of a trusted

third-party offering, contribution to the modernization of

public action (participation in the programme to set up local

public services offices, service provision on behalf of the

State, local authorities and public bodies at the post office

and by the postman).

Develop and negotiate a collective agreement

Through this strategic plan, La Poste is developing the

means to control its future, and one of its pillars is to make

each postal worker a key participant and beneficiary of this

transformation. As such, a collective agreement will be

offered for negotiation with the unions. It will focus on six

objectives: training, flexibility, fairness, proximity, solidarity

and trust in the context of expanding strategic and social

dialogue.

Improve the Group's competitiveness and restore its economic health

Lastly, the Group's sustainable development depends

on improving its competitiveness. This requires a

comprehensive effort to control operating costs, adapting

them to changes in the business activity, and to reduce

overhead and structural costs by leveraging synergies

within the Group.

With this new strategic plan, La Poste is taking charge

of its future to restore its economic health and make its

postal workers key participants and beneficiaries of its

transformation. It will accelerate the development of its

existing activities and expand into new markets while

preserving and modernizing its public service missions.


4

4.1 Company name 18

4.2 Registration place and number 18

4.3 Date of incorporation and duration of the Company 18

4.4 Head office, legal status and governing law applicable 18

Information on the Company


Information on the Company Company name4

4.1 Company name

The Company’s name is: “La Poste”, referred to as La Poste in this registration document.

4.2 Registration place and number

The Company is registered in the Paris trade and companies register under number B 356 000 000.

“APE” (activity) Code: 641 A.

4.3 Date of incorporation and duration of the Company

Under Act 90-568 of 2 July 1990, La Poste was incorporated as a public industrial and commercial establishment (EPIC).

La Poste was converted to a société anonyme (French public limited company) by Act 2010-123 of 9 February 2010. The duration

of the Company is 99 years as from 1 March 2010. Barring an early wind-up or an extension, the Company will cease to exist

on 1 March 2109.

4.4 Head office, legal status and governing

law applicable

4.4.1 Head office

The Company’s head office is located at 44, boulevard de Vaugirard, 75015 Paris, France.

The telephone number for the head office is +33 (0) 1 55 44 00 00.

4.4.2 Legal form and governing law

Since 1 March 2010, La Poste has been a public limited company with a Board of Directors, subject to the legal and regulatory

provisions applicable to public limited company unless there have been specific exemptions such as those provided for in Act

83-675 of 26 July 1983 on the democratisation of the public sector, Act 90-568 of 2 July 1990, as amended by Act 2010-123 of

9 February 2010, or by Decree 2010-191 of 26 February 2010, amended by Decree 2010-351 of 1 April 2010.

Rules applying to La Poste as sole provider of the Universal Postal Service are described in Chapter 5, Section 5.3 of this

document.


5

5.1 Presentation of business activities 20

5.1.1 Mail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205.1.2 Parcels-Express . . . . . . . . . . . . . . . . . . 315.1.3 Banking Activities . . . . . . . . . . . . . . . . . 435.1.4 La Poste Retail Brand: the

distribution of products and services of the Group’s Business Lines to private individuals and professionals . . . . . . . . . . . . . . . . . 58

5.1.5 Real estate: Poste Immo, a global real estate partner contributing to the Group’s dynamic . . . . . . . . . . . . . 65

5.2 Digital services are central

to Le Groupe La Poste 71

5.2.1 Development priorities for digital ambitions . . . . . . . . . . . . . . . . . . . . . . . . 72

5.2.2 Priorities for transformation . . . . . . . . 75

5.3 Regulations 77

5.3.1 Regulation of Le Groupe La Poste' Business activities . . . . . . . . . . . . . . . . 77

5.3.2 Regulations applicable to public sector missions . . . . . . . . . . . . . . . . . . . 82

5.4 Social and Environmental

Responsibility 90

5.4.1 A CSR policy integrated into the Group's strategy . . . . . . . . . . . 90

5.4.2 Governance of the organization . . . . . . 915.4.3 The Group's ethical approach . . . . . . . 925.4.4 Customer responsibility . . . . . . . . . . . . 935.4.5 Social responsibility . . . . . . . . . . . . . . . 945.4.6 Get involved to preserve

the environment . . . . . . . . . . . . . . . . . . 955.4.7 Dialogue with stakeholders . . . . . . . . . 975.4.8 Working towards the success

of joint projects that contribute to the sustainable performance of the Company . . . . . . . . . . . . . . . . . . . 99

5.5 Quality of customer relations 102

5.5.1 The Service Ambition project . . . . . . 1025.5.2 External recognition of the

customer relationship quality . . . . . . 104

5.6 Exceptional events 104

5.7 Dependence on patents 104

Overview of business activities


Overview of business activities Presentation of business activities5

5.1 Presentation of business activities

Le Groupe La Poste has opted for a multi-business

group structure. Backed by this model, all involved are

able to benefit from commercial synergies, combined

innovations and shared costs through the many and ongoing

collaborations among Business Lines and subsidiaries.

The Group's various business activities have been

structured as Business Lines with their own resources

since 2003, although they are closely interrelated with one

another. Each business activity benefits from the support of

the others, while largely relying on the post office network,

which distributes products and services from Mail, Parcels-

Express and La Banque Postale to retail customers in

France. The Group’s strategy is expressed in each of the

Business Lines through their own programs designed to

meet the targets set.

Since the full deregulation of the mail market in 2011, all of

the Group's markets have been open to competition.

5.1.1 Mail

5.1.1.1 General points and key figures

2013 2012 2013/2012 change

(€ million) amount %

Revenue 11,103 11,410 -307 -2.7%

External revenue 10,461 10,773 -312 -2.9%

Intercompany revenue 642 636 +6 +0.9%

Operating profit 471 684 -213 -31.1%

Mail (1), the historic heart of Le Groupe La Poste, is the

Group's largest Business Line. It accounted for 47% of the

Group's revenue and 61% of its headcount (2) in 2013.

As the second largest European postal service provider in

terms of revenue and volumes, Mail generated revenue

of €11.1 billion and delivered 24.3 billion mail items (all

categories combined) in 2013.

Mail engages in daily contact with private individuals

and companies: it distributes mail six days out of seven

throughout all areas of the country, i.e. 38 million mailboxes

in France's 36,000 districts, via close to 58,000 delivery

rounds, and nearly 97,000 mail collections from, and

deliveries to, companies. Furthermore, Mail also contributes

to disseminating opinions by delivering election materials

and documents and nearly one third of all press volumes.

5.1.1.2 Structure

Mail is organised around the activities of the parent

company and its subsidiaries:

The parent company hosts all the marketing and delivery

activities relating to mail addressed in France.

(1) Mail (with a capital letter) refers to the Group's Business Line formed by the Mail activities of the parent company and of the subsidiaries held by Sofipost

holding company. Historically, Mail's market has been the collection, transportation and delivery of mail (no capitals). This covers mail service within the

generic meaning, including various categories of mail, and specifically addressed mail (e.g. advertising, commercial, administrative or personal mail)

and unaddressed mail (with no name or address—information mailings, and advertising materials).

(2) Weight of Mail personnel, parent company only within Le Groupe La Poste.


Overview of business activities Presentation of business activities 5

The four subsidiaries, attached to the holding company

Sofipost, contribute to the deployment of Mail in

dynamic market segments such as (1) relational

marketing (targeting and management of customer

data), (2) document management solutions and services

(design, printing, routing, digitisation and archiving), data

management including secure electronic exchange),

outsourced process management, (3) press and

e-commerce logistics, and (4) cross-border mail services.

5.1.1.2.1 Parent company regional structure

The organizational structure at the parent company is

divided into three levels:

Executive Management, responsible for strategy, defining

processes and common operating rules. It intervenes

by providing support to Operating divisions and also

manages commercial relations with national major

accounts;

the operating sales and regional management teams,

which are responsible for rolling out the Mail strategy

in the geographical area for which they are responsible:

- the Operational Sales divisions, are assembled into

six Mail Operational Sales divisions (DOCC), working

closely with the Regional Operational divisions in their

catchment areas,

- the Regional Operational divisions, which are

assembled into 40 Mail Regional Operational

divisions, and provide support functions to the

facilities in terms of production, human resources,

finance, communications and controls, and which also

guarantee the quality of the Mail adjustment projects

in their region;

the industrial facilities that include the mail sorting,

processing and distribution activities:

- On 31 December 2013, there were 49 Industrial Mail

Platforms (PIC) and Mail Processing Platforms (CTC).

These sites constitute the network's backbone and

concentrate the sorting capacity in terms of flow

pooling and automation,

- The 239 Mail Preparation and Distribution Platforms

(PPDC) are fully mechanized and computerized

at 31 December 2013. These sites are responsible for

the collection, consolidation and processing of mail,

- Lastly, the 3,091 Mail Distribution Platforms (PDC)

ensure that mail is delivered to all addressees

(private individuals, professionals, companies, and

administrative authorities) six days out of seven.

The Mail Distribution Platforms and the Mail

Preparation and Distribution Platforms are assembled

within 580 facilities.

In Corsica and the French overseas departments, all of

La Poste’s Business Lines share a regional structure

that is reporting both to the Retail Brand and Mail (see

Section 5.1.4.1).

5.1.1.2.2 Sofipost structure

Sofipost’s structure includes four divisions. Each division

plays a key role in developing Mail’s growth:

The Mediapost Communication division covers the

relational marketing value chain. It covers expertise

relating to both online and traditional media to

support local, national and international advertisers

in the implementation of their communication

strategies for their customers and prospects: from

the distribution of advertising materials to online

advertising campaigns(1), from customer knowledge to

performance measurement, including the production of

materials and promotional offerings. In 2013, Mediapost

Communication had generated more than €600 million in

revenue. The company has business activities in France

and Europe (United Kingdom, Belgium, Spain, Portugal,

and Romania). Its subsidiaries include 9,000 employees.

The Docapost division covers all solutions and services

for managing professional data exchanges between

companies and institutions and their target audiences.

Docapost proposes document management solutions

(document management outsourcing, digitisation,

desktop publishing), customer process management

(outsourcing customer relationship management,

industrial processing of files and mail, transactions

and payment solutions) and e-services (electronic

certificates, secure BtoB electronic exchanges,

(1) Online advertising includes space purchasing, use of graphic or visual elements (banner ads,rectangle ads, etc.) referred to as "campaign displays".



e-vote). Docapost has 4,600 employees, and generated

consolidated revenue of nearly €440 million in 2013.

The ViaPost division includes all the e-commerce

logistics, transportation, newspaper mail subscription

processing, newspaper delivery (1) and eco-mobility

businesses. Its three core businesses are:

- newspaper and magazine processing activities:

(1) receiving, processing and shipping of press

subscriptions mailed in France and other countries

for the parent company and (2) day and night local

multi-title press delivery to subscribers;

- logistics activities: (1) shipping of mail in France

to processing platforms for the parent company,

(2) preparation of omni-channel orders (BtoC, BtoB

and retail), managing transport and customer

relations for brick-and-mortar and online retailers,

and (3) recycling logistics;

- online activities relating to eco-mobility: consulting

services and optimisation of the use of electric

vehicles in corporate fleets, development of training

tools for driving, transport and eco-responsible

mobility consulting.

ViaPost has 2,500 employees spread between eight

companies, and generated revenues of almost

€500 million in 2013.

The Asendia (2) division is a 50-50 joint venture between

La Poste and Swiss Post, and markets cross-border

mail services outside France. Drawing on the expertise,

the networks of the two partners and their capacity to

support international customers in the distribution

of mail, catalogues, papers and merchandise, in 2013

Asendia reached revenue of €452 million. Asendia has

over 1,000 employees and currently operates on three

continents—Europe, North America, and Asia—and in

15 countries through 25 facilities.

5.1.1.2.3 Logistics network

To deliver mail to private individuals, companies and

administrative authorities promptly six days out of seven,

Mail has determined and implemented a standardized five-

stage process:

Collection/consolidation consists of collecting postal

items deposited in mail boxes on public streets (yellow

mailboxes) and collecting mail from companies and

at mail platforms (in the case of corporate customers

dropping off their postal items) six days out of seven.

All the mail thereby collected is then routed to the Mail

Preparation and Delivery Centres (PPDC), tasked with

pre-sorting, before being moved on to the Industrial Mail

Platforms (PIC) for outward sorting.

Outward sorting consists of using machines to separate

out all the mail collected in a geographic area into

batches corresponding to homogeneous delivery areas.

Transportation combines various modes of transport

(plane, ground and rail) adapted to the urgency of the

mail and the distance of the delivery areas in order to

ship the corresponding batches to the inbound PIC. In

2013, 2.9% of the outflow was dispatched by plane, 92.1%

by ground and 5.0% by rail. Shipments are maximised

by various breakdown and separation points known as

transport hubs.

Sorting on arrival and delivery preparation consist of

dividing up the mail batches by delivery platform and

delivery round. The postal items within the same round

are put in order of delivery by the postman. Small-sized

mail is mainly machine-sorted, while large-sized or

oddly-shaped mail arrives at the PPDC without being

pre-sorted and the postman manually arranges such

mail in his or her pouch.

Delivery carried out by the postmen, is comprised of

letterbox delivery of postal items and personal delivery of

“recorded” items (i.e. registered letters, letters or parcels

that must be counter-signed, etc.).

Mail shipping is backed by a large logistics network, both

on own account and partly sub-contracted.

(1) In contrast to distribution by mail service delivery according to an address indicated on the paper and where the postal worker distributes it as an addressed

mail item, press delivery involves the distribution of an undifferentiated bulk supply of papers according to a list of recipients. Accordingly, press delivery,

often carried out in the early morning, is not a postal service as defined by Directive E97/67/EC, which assumes the distribution of addressed items.

(2) Asendia markets mail processing, routing and distribution services for all destinations (including France) outside France. In contrast, the parent company

is directly responsible for marketing in France.



OVERVIEW OF THE LOGISTICS NETWORK (PARENT COMPANY)

Collection Transport Processing Delivery

141,000 street letterboxes

97,000 pick-up and

delivery customers

328 trucks

8,800 road links

3 TGVs (high speed trains)

11 planes serving

14 destinations

40,000 cars

11,500 motorcycles

14,000 bikes

4,000 electric vehicles (VE)

1,000 quadéos (electric

quad bikes)

15,000 electric bicycles

(VAE)

Nearly 3,400 sites and

600 centres:

3,091 Mail Delivery

Platforms (PDC) and Mail

platforms

239 Mail Preparation and

Delivery Centres (PPDC)

49 Industrial Mail

Platforms (PIC) and Mail

Processing Platforms

(CTC)

58,000 rounds

38 million letterboxes

served six days out of

seven

1.1 million kilometres

covered per day by

postmen

5.1.1.3 Business activities and markets

5.1.1.3.1 Mail customers

Mail's customers include all private individuals and

economic players.

Addressed letter volumes break down accordingly between

companies and private individuals, senders and addressees:

91% of volumes shipped are issued by professionals or

administrations;

72% of volumes delivered are destined for private

individuals;

Mail from one private individual to another represents

only 3% of total volume. Accordingly, 97% of the

14 billion addressed messages processed in 2013

represent economic exchanges (i.e. involving at least one

administration or company).

Key sectors

The bulk of the parent company’s revenue is generated

from a few customer segments. The banking sector (bank

statements, advertising), the public sector (health insurance

statements, assessment notices), the distance sales sector

(catalogues) and the telecommunications sector (mobile

phone bills) are amongst the largest customers of parent

company Mail.

The top 100 customers accounted for 35% of revenue in

2013.

Relations between Mail and the other Business Lines

Mail is closely interconnected with the other Le Groupe

La Poste Business Lines.

The post office network (La Poste Retail Brand) generates

18% of the parent company’s Mail revenue and is also a

collection and delivery supplier (e.g. for registered letters).

The Parcels division is the leading Mail “customer”. Mail

handles a significant portion of deliveries for ColiPoste

(La Poste’s parcels division, which specializes in the delivery

of parcels to private individuals), and accounts for 16% of

its revenue. Mail provides marketing support for three-

quarters of ColiPoste’s customers.

La Banque Postale is one of the parent company Mail

division’s 10 largest customers, and a partner in the

development of its Internet offering.

5.1.1.3.2 Mail areas of business activities

Sending mail serves a number of purposes that compete

with other channels and entities operating in very different

markets. The main uses of mail relate to business

communications (sending quotes, contracts, account

statements, invoices, etc.) that compete directly with

electronic document solutions, commercial development

(advertising mail, direct marketing, printed advertising

material) competing directly with other traditional

advertising media (television, press, radio, poster campaigns

and Internet), information (press and political mailings) and

interpersonal and cross-border communications competing

with other postal operators.



Mail thus covers five areas of activity. The first three are

focused on the customer relations market in France and

accounted for 81% of 2013 revenue.

Business communications (55% of 2013 revenue,

generated by the parent company and Docapost)

combines Mail solutions and services allowing

companies to enter into a contract, manage it (i.e. sales

administration and after-sales service), invoice and

pay, or manage disputes and litigation. These offerings

include, among others: delivery of relationship mail, data

security (1), electronic invoicing and electronic archiving

with probative value, consulting services on professional

data exchange processing.

Marketing communications (16% of 2013 revenue,

generated by the parent company and Mediapost

Communication) covers Mail offerings addressing the

marketing communications needs of companies. Mail

offers a full range of expertise for leveraging customer

knowledge to connect brands with their audiences

through any type of medium (web-based or traditional

channels) and in any point of sale (brick-and-mortar or

online). Various products and services are offered such

as gaining new customers, stimulating the portfolios of

existing customers, accelerating purchases or visits to

retail banners, delivering advertising mail (addressed)

and printed ads, geo-marketing targeting and measuring

campaign efficiency.

Local mail services (10% of 2013 revenue, generated

by the parent company and ViaPost) cover services such

as press preparation and shipping, paper collection

and recycling, and order preparation and parcel

transportation management (logistics of e-commerce).

Private communications (2) (12% of 2013 revenue,

generated by the parent company) represent mail sent

by private individuals (customised stamps, etc.) and

stamp-collecting.

Cross-border mail (7% of 2013 revenue, generated

by Asendia and the parent company for products

marketed in France). Mail meets both companies' and

private individuals' needs with a range of products and

services from business communications to marketing

communications and local mail services.

5.1.1.3.3 Mail market trends

Business communications market

Estimated at approximately €31.9 billion (3) in 2013 in

France, this market is made up of three large segments

with different dynamics:

outsourcing business processes for customer relations

or Business Process Outsourcing (BPO): estimated to

be worth approximately €1.3 billion, the growth of this

segment is driven by the development of new business

activities (e-commerce) and by companies focusing on

their core business;

electronic document management and call centres:

estimated to be worth €3.3 billion, this segment enjoys

moderate annual growth of 0% to 3%, driven by the

companies willing to transform fixed costs into variable

costs and to minimise capital expenditure in platforms

and industrial facilities;

communications channels (including mail postal

charges, telephone services, Internet): estimated to be

worth €27.3 billion, this segment has seen substantial

growth in volume, driven in particular by the level of

household uptake of new technologies, while seeing

a slowdown in value partly as a result of companies’

increasing use of low-cost communications channels.

Mail is a major player in business communications with

€6.1 billion in revenue in 2013, through its positioning

in postage (relationship mail) and in activities under

development of Docapost division subsidiaries, proposing

a wide range of services from production, management and

archiving documents and data in multiple channels (paper,

web or EDI) to outsourcing the entire customer process.

Marketing communications market

The marketing communications market in France was

estimated at €30 billion in 2013 (4).

This market contracted in 2013 by 3.2% (vs. -1.3% in 2012,

+1.9% in 2011, +3.4% in 2010 and -8.6% in 2009), reflecting

the impacts of the economic crisis and the streamlining of

communication expenses by advertisers.

(1) Generally through secure or specialised EDI platform exchanges.

(2) The scope of the private communications segment changed in 2011 in order to integrate return flows from companies to private individuals, formerly

recognised in the business communications segment.

(3) Internal analyses.

(4) Source: Irep-France Pub (September 2013) - 2013 Forecasts.



The offerings of the parent company (particularly advertising

mail) and of the Mediapost division, which is positioned on

the growing relational marketing segment, enabled Mail to

generate revenue of €1.8 billion, and to capture an average

6% share of the French advertising market in 2013.

In this market, Mail proposes, in particular, consultancy

services, customer knowledge, implementation of

campaigns and efficiency measurements. Through its

subsidiaries, Mediapost Communication is the leading

distributor of printed advertising material in France and

the leader in the customer knowledge and promotional

marketing market.

Local mail services market

The French market for local services was estimated at

€13.6 billion (1) in 2013, up 2.3% (compared with +4.7% in

2012). Growth in this market is driven by e-commerce,

the transformation of brick-and-mortar retailers to omni-

channel offerings that contributes to the development of

fine-tuned logistics for small goods, and the development

of "green business" activities (e.g. collection of end-of-

life products for recycling). In contrast, press delivery

operations in this market have been gradually contracting.

In the parcel and small merchandise distribution market,

Mail occupies a key position by ensuring the delivery of

three quarters of ColiPoste volumes (Parcels division of the

parent company), which is the leader in France.

In 2013, Mail posted €1.1 billion in revenue in the local mail

services market (including €0.7 billion from press handling

and shipping).

The subsidiaries of the ViaPost division are developing in

strong growth niches in this market: Neolog, Orium and

Morin Logistic in e-logistics (inventory management and

preparing orders for online sales companies) and Nouvelle

Attitude (Recy'go offer) in reverse logistics for paper.

Mail is the leading provider of e-retailer logistics services,

and has been gradually strengthening its positions in press

delivery and recycling services.

Private communications market

This market covers all of the communication flows made by

private individuals and stamp-collecting. In this segment,

the digitisation of flows and the development of new Internet

access technologies is significantly changing the behaviour

of private individuals.

In this context, Mail has an advantageous connection:

in everyday life: Mail is a major player in the everyday

lives of private individuals. In fact, the letterbox is

considered as an extension of the household, an

entryway allowing those involved to access the home

without disturbing intimacy;

in emotional relationships: a letter proves one's

attachment to a loved one or one's attention to an

acquaintance;

in leisure: stamp-collecting is the most popular

collection hobby, with its two million customers who

occasionally or regularly buy and preserve beautiful

stamps, or collectors.

To cover the needs of private individuals, Mail proposes

a broad range of products including the sale of stamps,

prepaid mail products, Lettre MAX and other small parcels.

In 2013, it generated €1.3 billion (2) in revenue from private

individuals with €356 million from stamp-collecting.

Cross-border mail market

This market, which is estimated to be worth €6.8 billion (3)

world-wide in 2012, is in steady decline:

Flows are concentrated in two regions, the United

States and Europe, while the top 10 exporting countries

generate over 70% of total volumes, including 40% for

the top four.

The remaining flows are mainly continental, and reflect

trading patterns: almost 80% of European cross-border

flows remain in Europe, while 40% of exports from the

US are destined for Canada.

Volumes in this market have remained steady, reflecting

mixed trends for different product segments: a gradual

substitution of business mail and communications from

private individuals by electronic solutions, offset by

strong growth in advertising mailings, and catalogues,

as well as in small goods weighing up to 2 kg, which is

linked to the growth of e-commerce.

(1) This activity includes BtoB express services, local collection and delivery (local courier services), as well as delivery solutions adapted to new requirements

of traditional retailers and e-retailers.

(2) Revenue including all sales channels (Retail Brand, Internet, GMS, tobacco retailers , etc.) for a relatively wide range of products (such as Lettre MAX,

prepaid letters, etc.) and with an average size of items often exceeding 20g.

(3) Sources: annual report of DP-DHL on world export flows; internal sources (2012).



Apart from single-piece mail (i.e. mail posted in street

letterboxes without prior sorting by the customer), which

is entirely operated by the exporting postal operator,

competition in this market is very strong. Four types of

players are present: postal operators who still apply a

traditional import and export model in their traditional

market, postal operators operating outside their domestic

market, consolidators and mail houses (e.g. Pitney, and IMX,

etc.) and integrators (e.g. UPS, and FedEx, etc.).

Customers’ main purchasing criteria is price, provided

reliable delivery can be demonstrated. The key success

factor for competing companies lies in their ability to

identify and negotiate the best terms for the transportation

and delivery of postal items.

With a revenue of €0.8 billion in 2013, Mail enjoys a strong

position on import flows (a protected sector up until the end

of 2010) and export flows (market share of around 90% in

value terms (1)) in France. In the case of international flows,

Mail operates via Asendia in the three main markets: the

US, the UK and Germany, and has sales teams in some 10

European and Asian countries. Bolstered by these trends,

Asendia has become the second-largest provider of postal

services outside its own borders, just behind DP-DHL.

(1) Sources: IPC market audit (2012).

5.1.1.3.4 Mail demand and usage trends

Analysis of domestic volumes for addressed mail processed by La Poste, by category of flow:

(traffic in millions of mail items)

2013 2012 2013/2012 change

amount %

Transactional mail 8.8 9.2 -0.4 -4.8%

Advertising mail 3.6 3.9 -0.3 -7.4%

Press 1.3 1.4 -0.1 -6.0%

All flows combined (excluding elections) 13.7 14.5 -0.8 -5.6%

In 2013, the decrease in distributed paying traffic continued

at a rate of -5.6%, and is explained by:

the continued historic-level decrease in flows from

private individuals;

the decrease in relational mail, which accelerated

slightly, as a result of economic conditions and the

continued switch to paperless formats, as well as a

reduction in outbound mail from companies;

the reduction of advertising mail, impacted by economic

conditions and by new communication practices by

distance sales corporations;

a decrease in press subscription volumes, which

accelerated compared with previous years.

Two major factors, one economy-driven and the other

structural, are contributing to the decline in mail volumes:

unfavourable economic conditions adversely affecting

postal activity that is by nature correlated with GDP.

In addition, banks are implementing savings plans by

reducing the main cost items, which includes mail. The

public sector is simplifying administrative processes in

order to reduce costs;

digital services. Distance sales abandoned "all paper" for

e-commerce via the multichannel. The press is affected

by a crisis in its paper readership and digital economic

model. The rapid digitisation of BtoB exchanges linked

to the simplification of processes, the growing popularity

among individuals of electronic exchanges represent

examples of transformations in exchanges and uses of

communication.

These two causes are contributing to a reduction in paper-

based mail. La Poste is expecting a 50% decrease in mail

volumes over the period between 2008 and 2020.



5.1.1.4 Special regulatory issues and business model

5.1.1.4.1 Special regulatory issues

Mail is responsible for carrying out two of La Poste’s four

public service missions: the Universal Postal Service (see

Section 5.3.2.1) and press transportation and delivery (see

Section 5.3.2.3).

The environment in which Mail operates is subject to a high

level of regulation and oversight. The Universal Service

mission assigned to Le Groupe La Poste by the French

government is overseen by Arcep (Autorité de régulation

des communications électroniques et des postes—French

regulator of the electronic communications and postal

sectors), which provides price regulation and in particular

checks the quality of service, monitoring compliance with

respect to the targets set by the Minister.

Universal Service accounted for approximately 75% of the

parent company Mail division’s revenue in 2013, stable

compared with 2012

Quality of service is governed by a specific legal provision

published in a decree issued by the Minister responsible

for postal services (1), which sets out the Universal Service

quality of service targets. On certain product ranges, quality

of service is governed by contractual commitments that may

result in La Poste paying compensation in the event that

it fails to meet these commitments. For cross-border or

international mail, the distributor's remuneration is directly

linked to service quality. An independent body (Ifop in 2013)

assesses the quality of service.

The quality of service for Mail’s main products has

significantly and regularly improved over the last few years.

In 2013, quality of service for Priority Mail reached a high

level of 87.4% for next-day delivery. For "Green Mail", quality

of service reached 92.8% for two day delivery, while quality

of service for Registered Mail reached 95.2% for two day

delivery with a very high level of quality of service for next-

day delivery.

5.1.1.4.2 Business model

Parent company

Revenue model

The Mail parent company's revenue covers postal charges

of letter post and services provided including collection,

special deliveries and mail box management.

Postal charges account for the bulk of revenue. Although

there are various ranges with different postage rates, overall

volumes, aside from rate changes, are the main driver

of revenue trends. Rates are governed by multi-annual

rate caps (see Section 5.3.2.1.2—Regulatory framework).

Changes in the product mix (i.e. volume changes of

differently priced products) affect revenue to a lesser extent.

Cost structure

Despite the increase in automated processing, the parent

company’s business is still highly labour-intensive.

Most of its costs are significant fixed costs, largely arising

from its Universal Service obligations and the quality of

service targets for next day delivery:

the service quality targets for priority deliveries require

sorting platforms close to the delivery areas. The number

of such platforms results in high fixed costs (real estate

and overhead costs);

the obligation to make daily mail deliveries to all

letterboxes six days out of seven means that it is

necessary to make regular rounds and requires

significant fixed travel time;

the obligation to have a dense network of public outlets,

which ensures access to the Univeral Service (2), also

results in high fixed costs (e.g. real estate and staff).

(1) Service quality refers to the European standard EN 13850 that defines a methodology for "end-to-end" service where quality represents the shipping

time for a postal item expressed as a percentage of distributed mail in days (d + n with "d" representing the mail drop-off date and "n" the number of

days adopted for the service standard).

(2) The criteria for access to Universal Service in France specify that at least 99% of the French population, and at least 95% of the population in each

Department must live less than 10 km from a public outlet, and that all districts of over 10,000 inhabitants must have at least one public outlet for each

tranche of 20,000 inhabitants; it must be possible to perform essential mail transactions at these outlets.



The cost structure points to the limits of the parent

company’s business model. Given the importance of fixed

costs, and the moderate nature of price increases compared

with other postal operators, the parent company’s business

model is heavily dependent on volume trends.

Furthermore, the parent company’s business activities are

not very capital-intensive, as fixed assets accounted for 6%

of revenue in 2013 (7% in 2011 and 2012).

Subsidiaries

The business models of Mail subsidiaries are specific in

some ways:

The unaddressed admail business model Mediapost is

similar to that of addressed letters, with revenue highly

dependent on volumes and payroll representing a high

proportion of costs.

The desktop publishing/routing activities/Business

Process Outsourcing (Docapost) business activities are

rather capital intensive with an elevated share of labour

costs.

The press home delivery model is primarily dependent

on delivery and on an ability to maximise volumes in a

given delivery area.

The business model for cross-border operations

(Asendia) has a high proportion of variable costs, (i.e.

purchase of transport and delivery services), and is

highly dependent on an ability to negotiate the best

possible transport and delivery prices with other postal

operators.

5.1.1.5 Strategy and outlook

In response to declining volumes in its core market, which

are primarily due to the development of the Internet and

electronic exchanges, as well as the complete end of the

postal service monopoly on 1 January 2011, Mail continues

to face major challenges.

Mail is introducing innovations for all its customer

segments, including corporate and retail customers, and

senders and recipients, in order to strengthen its position

as the premium customer relationship medium.

For individual customers, Mail facilitates the sending

and reception of mail in all forms: services accessible

24/7, customised services, simplified drop-off, diverse

reception options, an offering with reinforced security

features, etc.

For professionals, above its services of shipping and

delivery, Mail is positioned as a growth driver for the

company: a global provider of document management,

mail and direct marketing services. The integration of its

subsidiaries' expertise forms the basis for a complete

offering. Mail offers companies a range of business

solutions to promote their development, in the role of

a trusted third-party on the Internet, by transforming

the exponential growth in digital exchanges into an

opportunity for developing revenue both for the company

and its customers.

Mail is transforming itself in order to offer all customers the

best of two worlds: the world of paper and the digital world.

5.1.1.5.1 Major recent trends for Mail

Innovations and enhancements of the range

Mail is developing and improving its service offering to

meet the new needs of its customers, facilitating and

simplifying micro-business and SME access to mail media

and supporting all customers by rolling out new uses:

Green Mail was created at the end of 2011, in order to

provide a less expensive and more environmentally-

friendly solution (it emits 15% less CO2 than Priority

Mail). This initiative has met with great success: over

1.4 billion letters were delivered in 2013, while one letter

in every three sold in the fast mail range was a Green

Letter.

In May 2013, La Poste's connected mail range was

enriched by the addition of Webkey. This range already

includes the integration of 2D codes in advertising mail,

redirecting the reader equipped with a smartphone to

online mobile content. The connected mail Webkey is

in the form of a USB flash drive device facilitating the

connection between a physical document and a website.

Webkey is designed to optimise the interactivity and

performances of companies’ marketing campaigns (1) by

automatically loading a URL web address.

(1) The survey conducted on La Poste customer feedback and the study performed by the H2O Research Institute based on 600 respondents demonstrated

a 10-point improvement in the recall rate for Webkey mail in the case of bank customers, with an increased reading rate: seven people out of every 10

who opened the letter read it.



Win’up is a powerful and innovative new marketing tool,

which involves affixing an advertising label to mail, and

enables the promotion of an offering tailored to the

target recipients. It is also possible for the issuer of a

mail to make this space available to a partner. Win’up

represents an effective means for boosting the impact

of campaigns: when mail is received, this captures

the attention of target customers as soon as they see

the envelope, which becomes in this manner a new

communications media.

New more flexible services are offered, in order to

meet retail customers, expectations, including via the

introduction of a repeat delivery, as part of the "Reception

choice, successful delivery: 100% of customer

satisfaction" programme. Customers can choose, via

the Internet, the reception method for items where the

delivery requires a signature, including registered letters,

which are on hold at the post office due to their being

absent at the first delivery attempt.

Building a network of connected postmen: Facteo

Mail is equipping postmen with smartphones: this

investment is a strong sign of the evolving profession

of postman, its modernity and capacity to respond to

new customer expectations in terms of local service

and relations of trust. At the end of 2013, more than

10,000 postmen were equipped with Facteo. This tool is

intended to support the evolution of the profession notably

by enhancing the Facteurs Services Plus local service

range. Facteo already allows certain local postmen to

transmit information to local authorities after visits, notably

of isolated persons and seniors, to ensure their well-being,

regardless of whether they have mail to be delivered or not.

In time, this device will offer 15 to 20 services.

Developing new growth drivers, notably through acquisitions

A number of acquisitions in recent years have contributed

to developing and enhancing Mail's offering in the following

areas:

relational marketing, notably through a number of

acquisitions (1) by Mediapost in 2012 (BudgetBox,

MixCommerce, Adverline, Vertical Mail and Cabestan)

and the launch of Mediapost Local (2) and Cabestan in

Portugal. These transactions strengthened Mediapost

Communication's positioning by integrating new

expertise and complementary capabilities. In 2013,

to facilitate the integration of this new expertise, the

deployment of synergies and the legibility of the offering,

Mediapost Communication was reorganised around eight

business units: Consulting and Customer Knowledge

(Mediaprism), Local Communications (Mediapost),

E-commerce (MixCommerce), Home Media Sales

(Mediapost publicité), Internet (Adverline), Promotion

(Sogec, BudgetBox), CRM (Sogec Datamark Service,

Vertical Mail, Cabestan, as well as the advertising

campaign management expertise of Mediapost) and an

international business unit (Mediapost Spain, Portugal

and Romania). This new organization will facilitate the

development of market positions and the rapid rollout

of new offerings.

e-logistics, via the acquisitions of of Orium (1) (which

specialises in cross-channel logistics solutions and

customer relations for e-commerce companies) and of

Morin Logistic (a major provider of e-commerce logistics

services in France) in 2012. These acquisitions have

enabled Mail to become the leading provider of logistics

services for e-retailers in France (3).

These operations completed the Group's know-how and

brought adapted responses to players' development

needs in France and Europe, from companies operating

exclusively on the Internet to marketplaces wanting to

outsource all or part of their volume in order to deal with

their growth. ViaPost also brings an adapted response to

players in traditional commerce with order preparation

solutions for physical points of sale and for Internet

customer orders, in a multi-channel rationale.

the collection of office paper for recycling: following the

acquisition of Nouvelle Attitude (4) at the end of 2011, Mail

launched Recy’go, an offering involving the collection

of used office papers in order to recycle them aimed at

small to medium-sized businesses. Several local SMEs

and municipalities subscribed for this new offer, which

was deployed simultaneously in La Poste's facilities.

Recy’go has now been rolled out across France and

has already achieved convincing results, including over

2,000 corporate and regional authority customers, and the

collection of 8,000 tonnes of paper at 31 December 2013.

As part of this new business activity, La Poste also signed

an agreement with the French group of paper recyclers

(Revipap) to ensure to the French paper industry

that all of the tonnage collected will be delivered to

manufacturers located in France.

(1) Refer to Note 4 of the consolidated financial statements, Chapter 20, Section 20.1.

(3) External sources (Xerfi Logistics and e-commerce report, August 2012, Stratégies Logistiques magazine) and internal sources.

(4) Operating subsidiary for the Recy’go offering.

(2) Division specially dedicated to the coordination of local communication activities to promote prospecting consulting, loyalty-building, campaign

management, customer knowledge and database management solutions to micro-businesses and SMEs.



management processes and e-services: the French

National Order of Pharmacists (Conseil national de

l’Ordre des pharmaciens—CNOP) selected Docapost to

manage and develop the Pharmaceutical File (dossier

pharmaceutique—DP), a professional tool for serving

patients and the first e-health service in France. The

electronic pharmaceutical file records for each patient

who so wishes all medications provided to them by

pharmacists within the last four months. Pharmacists

are given a comprehensive view of patient treatments,

which in turn enables them to enhance the performance

of their role. 22,000 pharmacies and several thousand

healthcare professionals (hospital personnel and

pharmacists) are able to access to the historical record

for the distribution of medications. Today, more than

28 million people in France have a Pharmaceutical File.

cross-border mail: in May 2013, Asendia announced the

acquisition of Pitney Bowes' international mail business

activities in the United Kingdom, thus strengthening its

positions in this key market and developing its growth

potential by opening up new commercial opportunities,

and notably in markets for e-commerce and distance

selling, direct marketing, press and catalogues. In

addition, in September 2013, Asendia strengthened

its presence in the cross-border e-commerce market

through:

- a strategic investment in eShopWorld, a company

based in Dublin and in the United States, which

has developed a set of software solutions that help

simplify cross-border transactions for small goods;

- the launch of three new e-commerce products with

tracking options that will provide more secure cross-

border delivery solutions to its customers for small

parcels.

5.1.1.5.2 Mail’s strategy

Mail has enriched its vision and renewed its strategic

project by taking into account both market developments

and its positioning. On 1 July 2013, Mail launched a new

strategic plan ("2018: Let’s Reinvent Mail"), which included

a new portfolio of programmes and focused on two key

areas: Mail's renewing its positioning, in order to remain

the premium medium for customer relations, which are now

global and multi-channel, and to become the leading local

services network.

It also intends to remain a key operator in its original field

of operations, to which it has a legitimate claim, and take

advantage of growth in segments. The challenge involves

adjusting to changes in companies’ communications

and relational strategies, which are now based on

multi-channel (letter boxes, Internet and mobile) and

multi-platform (paper, digital, and hybrid) offerings, in

order to achieve an ongoing relationship, which creates

more loyalty between the brand and the customer. These

strategies combine promotional marketing, relational

marketing and contractual management through a

combination of formats. Accordingly, Mail is continually

supplementing its range through the introduction of

new commercial growth and innovation drivers, both

at the parent company and the Sofipost subsidiaries.

Marketing, communication and business communication

will therefore continue to generate the major portion of

its revenue.

Expanding into new areas of development to provide

growth drivers for the future. Three areas of development

have been identified:

- Services for e-retailers and local merchants: the

digitalisation of the customer experience and

the development of online sales will result in the

convergence of different forms of commerce with

similar expectations in terms of services for logistics

and distribution, solutions for attracting incoming

business, generating traffic and managing local

inventories.

- New logistics services—local logistics (1), urban

logistics (2), reverse logistics, and the circular and

responsible economy (3)—are changing rapidly, and

are providing growth opportunities for La Poste. To

capture this growth, processes and organizations,

and even functions, need to make in-depth changes,

notably in the area of distribution, in order to propose

responsive, reliable, smooth and cost competitive

services.

(1) Deliveries of flows generated close to the consumers: shortening store delivery periods (to approach instantaneousness, etc.), simplified return procedures

for packages from home, etc.

(2) Urban logistics: solutions for shipping goods to merchants under optimal conditions, (incoming, outgoing and intracity).

(3) Recycling products (office paper, cartridges, etc.), repairs, etc.



- The new services provided by the postman, including

local services, which are closely linked to the

challenges posed by an aging population and the

financial equilibrium of social security schemes: Mail

is seeking to leverage the trust the French population

has in its postmen (1), and in its very dense regional

network, in order to develop projects for home-based

services that postmen would be capable of providing

in addition to mail delivery.

In these three areas, La Poste has assets (the network

of postmen, the logistics network and the commercial

networks), expertise and recognised legitimacy.

Mail intends to leverage this potential notably through the

ability of postmen to intervene on a day-to-day basis, so

that its services meet the requirements for responsiveness,

reliability, fluidity, competitiveness, and enable it to build

sustainable leadership positions for activities under

development.

Mail is conducting this policy while continually monitoring

its balanced progress in each of its three strategic priorities,

namely commercial development, Quality of life at work, and

financial performance.

(1) TNS Sofres survey of October 2012 : 92% of French people indicate that they trust their postman. The postman is the second most preferred figure in the

day-to-day life of the French (ahead of the baker but before the fireman).

5.1.2 Parcels-Express

5.1.2.1 General points and key figures

2013 2012 2013/2012 change


Revenue 5,988 5,580 +408 +7.3%

External revenue 5,947 5,538 +410 +7.4%

Intercompany revenue 41 42 -1 -2.8%

Operating profit 419 403 +17 +4.1%

Backed by a long-standing presence in the postal parcel

market, La Poste was the first European postal operator to

enter the express market, as early as 1984.

In France, the Group operates in this sector via ColiPoste, its

parent company's Parcels division, and through GeoPost’s

Exapaq, Chronopost and Pickup subsidiaries in the express

and pick-up point markets. It also operates in international

markets through GeoPost, its wholly-owned subsidiary

that includes in turn all the express service subsidiaries in

Europe and worldwide.

Parcels-Express accounted for 26.9% of Group revenues in

2013. The Business Line handles over 1 billion parcels every

year, and ranks among the four largest operators world-

wide in volume terms.

5.1.2.2 Structure

Parcels-Express is organised into two complementary

operating divisions: ColiPoste and GeoPost.

5.1.2.2.1 ColiPoste

ColiPoste specialises in delivering parcels weighing less

than 30 kg within 48 hours to private individuals ("toC", i.e.

in both the BtoC and CtoC segments) in France, with home

delivery services six days a week.

As La Poste's Parcels division, ColiPoste operates

exclusively in France, and delivered over 277 million parcels

in 2013, compared with 271 million in 2012. This represents

over 1 million parcels per business day. ColiPoste generated

revenue of €1.6 billion in 2013.



As a historic operator in the distance sales market and a

key partner for online retailers, ColiPoste’s know-how and

delivery process knowledge, especially in the "last mile" of

the home delivery process, make it the leader in the French

market, with a market share of approximately 65% in the

business (1) and private individual (BtoC and CtoC) delivery

segments.

5.1.2.2.2 GeoPost

GeoPost operates according to a combined model: it is

primarily positioned on the BtoB express market, and

its core business is parcels weighing less than 31.5 kg.

GeoPost is also expanding in the BtoC segment, which is

experiencing rapid growth.

GeoPost owns all Le Group La Poste’s French and foreign

subsidiaries operating in the express business. As a holding

company founded in 1999, its scope of operations was built

mainly through acquisitions.

GeoPost generated revenue of €4.5 billion in 2013; 26% of

its revenue is generated in France and 74% outside France.

International (incoming or outgoing) parcels account for

roughly 20% of GeoPost’s revenue. GeoPost delivered

814 million parcels in 2013, an increase of 12% compared

with 2012.

GeoPost's structure in France

GeoPost operates in the French market via three

subsidiaries with complementary business activities:

Chronopost International, focused on premium express

services, the French specialist for express delivery for

parcels up to 30 kg in both the BtoB and BtoC segments.

Chronopost is the only express service provider offering

coverage throughout metropolitan France for next day

home delivery before 1:00 p.m. Chronopost delivered

102 million parcels in 2013. International express delivery

accounted for 25% of its revenue. The share of BtoC

deliveries represented 33% of its flows. It includes the

Chrono Relais service. Chronopost employs 3,500 people.

Exapaq, focused on express service. Exapaq was founded

by 19 independent French freight and express delivery

companies in 1995 and was acquired by GeoPost in 2006;

the company delivers parcels weighing less than 30 kg,

primarily to the BtoB segment.

Exapaq delivered 55 million parcels on behalf of over

100,000 business and private individuals in 2013, and

employs 1,800 people.

Pickup, expert in PickUp and DropOff delivery (see

Section 5.1.2.2.3).

GeoPost's worldwide organization

Le Groupe La Poste operates in the express parcel segment

outside France via GeoPost and its subsidiaries, which are

usually major players in their respective domestic markets.

GeoPost has strong brands in Europe, including DPD,

GeoPost’s international brand, Chronopost International

and Exapaq in France, as well as SEUR in Spain, and a

highly consistent network, which relies on DPD's road

transport network; GeoPost is DPD's majority shareholder.

Depending on the countries, GeoPost operates:

on its own account via subsidiaries, in France, Germany,

the United Kingdom, Belgium, Spain, Portugal,

Luxembourg, the Netherlands, Switzerland, Poland,

Hungary, the Baltic Countries, the Czech Republic,

Slovakia, Romania, Croatia and Slovenia;

via commercial partnerships: GeoPost has entered into

commercial partnerships with leading operators such as

Bartolini in Italy and Posten in Sweden;

via equity and industrial partnerships: GeoPost operates

on the Turkish market via its interest in Yurtiçi Kargo,

with which it is also expanding—under the DPD brand—

in Ukraine, Kazakhstan, Belarus and Russia, where it

has substantial operations.

Outside Europe, GeoPost has expanded its operations

on fast-growing markets through partnerships, via a

continuous continental block approach:

in Asia, in the People’s Republic of China and India;

in Africa: Niger, Morocco, the Ivory Coast, Burkina Faso,

and South Africa;

on the American continent, in the United States via IBC.

Lastly, where international import and export flows are

concerned, GeoPost benefits from the freight forwarding

activities of its Tigers subsidiary, which is an international

freight forwarder that operates in Asia (China), in the United

States, Europe and Australia. GeoPost invested in Tigers in

2011, and acquired control of the company, in which it now

directly holds a 66% share capital, in 2013. This transaction

has enabled GeoPost to broaden its scope of activities, to

develop synergies at commercial and operational levels, and

to offer an alternative to the service provided by integrators.

(1) Internal sources.



5.1.2.2.3 The GeoPost network

Logistics network

GeoPost operates in over 40 countries throughout the

world, including 26 countries in the European Union. It

serves over 230 countries worldwide on behalf of over

300,000 customers, thanks to its 22,000 employees, over

14,000 of which are outside France.

The GeoPost network is composed of:

the domestic networks owned by each entity;

the DPD pan-European road network, which is GeoPost’s

international shipping and delivery road network. It is the

most extensive road network in Europe, and covers the

most important business regions worldwide;

an air express network for Chronopost, primarily

operated under an agreement with an integrator (a

global shipping company controlling the whole shipping

chain);

the inter-continental GeoPost network, which relies on

the Air France SA air network, primarily via Sodexi (a

subsidiary in which Air France SA and GeoPost have

respective interests of 65% and 35%), in order to connect

Europe to the other continents where GeoPost operates.

Overall, the GeoPost network includes 830 warehouses and

60 hubs, which are connected via 500 daily international

road links between 35 European countries.

The decentralised structure at local level ensures the

efficiency of the network, which is constantly adapting

to national and international volumes. The density of the

network makes it possible to handle deferred parcels as

well as express parcels and to offer tailored solutions to

its customers.

A parcel PickUp and DropOff network

Pickup is Le Groupe La Poste's PickUp and DropOff

network. The network was set up in 2000, and was acquired

by GeoPost in 2009. Pickup is now France's leading network

with 7,000 PickUp and DropOff at the end of 2013. The

density of this network, which is the largest in France, and

the densest in the Greater Paris region, enables GeoPost to

support the substantial increase in the number of parcels

handled each day, while continuing to provide a top-quality

service.

GeoPost applied the Pickup model to the new PickUp and

DropOff networks in Germany and the Benelux countries in

2013, by relying on its knowledge and experience in France.

The model covers hiring, training, management and

oversight at the PickUp and DropOff and the network

management tools, as well as its IT system. It incorporates

retailers' constraints, as well as solutions that are

appropriate for shippers' requirements (the widest range

of PickUp and DropOff services on the French market).

Pickup aims to satisfy private individuals thanks to a highly

selective hiring process for PickUp and DropOff and an

exclusive service quality level.

GeoPost wants to develop a unique model in Europe, in

order to offer shippers a single and consistent of PickUp

and DropOff network that has the same service quality

requirements, the same processes, and the same IT system.

The company is aiming to set up the largest PickUp and

DropOff network in Europe.

5.1.2.2.4 The ColiPoste network

The ColiPoste organization makes use of both its own

resources combined with support of other La Poste

Business Lines, particularly the La Poste's retail outlets

and the Mail division's postmen. ColiPoste’s own headcount

includes around 5,500 employees, who are divided between

five Regional Departments, and the Head Office in the Paris

area.

To deliver around 280 million parcels to private individuals

every year, ColiPoste has built a unique industrial facility in

France, which enables it to process very substantial parcel

volumes and to dispatch them to the various distribution

facilities used by La Poste, in order to cover the whole

of France. These volumes are highly seasonal in nature.

Indeed, in December, ColiPoste’s business increases 50%:

during these peak periods, ColiPoste supplements its

industrial base with sub-contractors.

The ColiPoste network is built around two divisions:

"Sorting and Shipping"; and

"Delivery".

The processing and shipping of parcels for the domestic

market are managed through 14 parcel platforms located

throughout France, which guarantee the network's

coverage. Every day these platforms receive parcels from

corporate customers and parcels collected by the post

offices, which are sorted on the basis of the address of the

recipient. Once sorted, parcels are loaded into trailers that

leave the same night.

The ColiPoste road network is organised as an interlinking

group of national and regional links servicing daily all the

Parcels platforms, the Mail distribution centres, the Parcels

offices and the public outlets.

In order to handle import and export parcels, ColiPoste

has an international office of exchange dedicated to

international parcels, in Chilly-Mazarin. In addition, trade

offices have been established at the platforms closest to

the borders.



In terms of delivery, ColiPoste has a network of 65 centres

devoted to parcels, delivering mainly in high density urban

areas (cities with more than 150,000 inhabitants). The urban

delivery areas require a specific organization in order to

handle high traffic volume, the density of delivery points,

difficulties of parking near buildings, frequent absence

of recipients, etc. In rural areas the postmen responsible

for delivering letters ensure the distribution of parcels to

residential addresses. Parcels delivered by postmen now

account for close to 70% of ColiPoste’s overall business.

ColiPoste also makes use of La Poste's network of

17,000 public outlets for the pick-up of parcels by private

individuals following being on hold at the post office. To

meet the pace of demand in large metropolitan areas and

expectations of urban customers with reduced availability

who want to be able to pick up their parcels whenever they

have the time or desire, since 2006 ColiPoste has offered

a service allowing pick-up from special locker facilities

accessible 24/7 and local convenience stores.

International parcel delivery services, mainly in Europe,

are assured by other postal operators under historic

agreements of the Universal Postal Union or special

agreements with certain postal operators or by private

operators, including GeoPost subsidiaries for certain

countries.

5.1.2.3 Markets and business activities

5.1.2.3.1 Parcels-Express' key markets

The European market is estimated at €42.8 billion (1) for all

parcel categories combined, and at €32.8 billion excluding

postal parcels. It has increased by 5.7% (2) in value terms

compared with 2011.

The market remains highly concentrated: Germany, the

United Kingdom and France account for over 53% of the

European express parcel market. Including Spain and Italy,

these five countries account for 70% of the market.

The express parcel market is traditionally segmented

according to several criteria.

A first segmentation criterion is the delivery time, which

subdivides the market into three segments:

- traditional parcel deliveries (24 to 72-hour delivery);

- deferred delivery service (pick-up before 6 pm for

delivery, in principle, the next day before 6 pm, in the

national territory, time lines not being guaranteed);

- express delivery service (pick-up before 6 pm for

delivery the next day before noon or 1 pm, in the

national territory subject to levels of guarantees).

The deferred parcel delivery and express messaging

service segments are the segments usually referred to

under the generic "express" category.

Le Groupe La Poste operates in the traditional delivery

service segment of the market through its ColiPoste

division and in the deferred and express delivery service

segments through its GeoPost subsidiaries.

A second criterion for market segmentation is the nature

of the sender and recipient, breaking down the market

according to the nature of the parcel flow:

- from professional to professional (BtoC);

- from professional to private individual (BtoB);

- from private individuals to private individuals (CtoC);

- from private individuals to professionals (CtoB).

Le Groupe La Poste covers all i ts customers'

requirements and every kind of flow thanks to ColiPoste,

(a "toC" specialist, i.e. BtoC and CtoC), and GeoPost

(which specializes in BtoB and has a substantial share

of the "toC" market) and its subsidiaries.

Lastly, markets may also be defined by geographic

criteria. On that basis, the geographical segmentation

makes a distinction between:

- domestic markets; and

- an international market, sub-divided between

shipments within the European Union and shipments

outside the European Union.

Le Groupe La Poste has a combined network (BtoB and

BtoC). It specializes in the domestic and intra-Europe

parcels-express road delivery market, and is expanding

at the global level.

Thanks to GeoPost and ColiPoste, Le Groupe La Poste

is the second largest European operator in the market

after Deutsche Post DHL, with a 10.1% market share in

2012 (3). GeoPost is the market leader in the domestic

European road transport market with an 11.2% market

share, ahead of Deutsche Post DHL. Furthermore, it

ranks among the four largest operators worldwide, with

over 1 billion parcels per year.

(1) Internal sources produced in 2013 for 2012.

(2) Internal source from a report using 2012 data published in 2013. As the research methodology incorporated marginal changes in the geographical scope,

the 2012 data is not directly comparable with the data provided for 2011.

(3) Internal sources.



Supply and demand dynamics

E-commerce demand from individual customers

continually growing

BtoB continues to account for the major share with 70% in

relation to BtoC. In effect, in the European market valued at

€42.8 billion (1) for all parcels combined, "toB" accounts for

€28.7 billion compared with €14.1 billion for "toC".

However, the BtoC share, which is supported by the growth

in e-commerce volumes, is increasing both at the domestic

and international level, and is recording much higher growth

rates, from which the Group benefits via ColiPoste in France

and via GeoPost in Europe, thanks to its combined network.

Unbundling and Internet: optimised customer structure

The trend witnessed over the last three years has been

continuing. Seeking out increased productivity across

all economic sectors has resulted in the optimisation of

logistics chains and inventories at all production stages.

Of particular note is the progressive decline in the role of

middlemen (wholesalers) accompanied by a phenomenon

of unbundling: transport of goods in large quantities by

container or pallets has been replaced by the shipping of

small quantities by parcels, with direct delivery to end-

customers.

This trend is gaining momentum with the opening up of the

borders (Schengen agreements) resulting in the elimination

of inter-European customs documents and the continuing

development of e-commerce, with goods sold online

shipped in the form of parcels delivered to end-customers

(and no longer in shops or warehouses).

Convergence of BtoB and of BtoC

A decade ago, two markets existed side by side, each

completely foreign to the other. First there was BtoB,

primarily express deliveries, which was characterized

by high delivery speeds, tracking at each stage of the

transport, and highly developed after sales services; and

then there was the retail parcel service, with a lower level

of service, a lack of tracking, and a service quality that was

below BtoB standards.

This situation has seen a profound change. Customers

are looking for more services, and the development of

the Internet has led to heightened demands from new

customers. This is resulting in a profound transformation

of BtoC worldwide, and in particular in Europe, the US and

Japan.

Nowadays, the characteristics of “toC” products are

relatively similar to those of “toB” products. Information

tracking is pretty much complete, and the after-sales

service highly sophisticated. Furthermore, a growing

number of shippers, who were customers specialised in

“toB”, are now becoming “toB” and “toC” customers. For

example, most clothing chains are key "toB" customers for

GeoPost by definition since they continually restock stores

via express and have opened Internet sites accessible to

private individuals.

It should be noted that this convergence of service levels

with demands from shippers does not involve the transport

and delivery infrastructures of BtoB and BtoC merging. This

is in particular due to the specific features of the final mile,

i.e. delivery to the end customer. The specific features of

“toC” compared to “toB” deliveries are:

a single parcel per delivery;

greater or less success in reaching a private individual

at home, as addressees are often absent;

the need to set up solutions to arrange other delivery

attempts and leave delivery slips.

The development of parcel PickUp and DropOff networks

to support the development of e-commerce

The challenge posed by delivering to private individuals

with pressure regarding costs and the necessity to always

bring the addressee/customer more flexibility and choice in

delivery methods, has made parcel PickUp and DropOff a

vital addition to home delivery and post offices.

This system, which was developed by mail order companies

for their own purposes, has become a distribution channel

in its own right and is experiencing growing success as

a result of certain benefits associated with out-of-home

delivery (e.g. longer opening hours of convenience stores

and competitive prices).

(1) Internal sources produced in 2012 for 2011.



Le Groupe La Poste is positioned in this complementary

niche through:

Pickup Services, a GeoPost subsidiary, a PickUp and

DropOff network that has significant growth potential,

due to a booming market, increased customer

confidence, and substantial synergies with Le Groupe

La Poste's transport partners, i.e. Chronopost, ColiPoste,

Exapaq and DPD. The PickUp and DropOff network in

France expanded significantly in 2013, with parcel traffic

up between 80 and 100% compared with 2012, and

new e-commerce players, who wanted to enable their

customers to benefit from this service;

the option provided by ColiPoste to offer up to five

delivery methods including parcels available in post

offices, in its 35 "Cityssimo" areas and in the Pickup

network;

consigned delivery: in January 2014, GeoPost signed an

agreement with Neopost ID, a subsidiary of Neopost, the

European leader in the mailroom equipment market, and

a major player in the logistics solutions market. This

agreement involves setting up and operating automatic

and secure consigned delivery networks intended for

delivering and returning parcels in France. An initial roll-

out of 1,500 consignment points has been scheduled up

to 2016, followed by the installation of 3,000 consignment

points over the longer term. The agreement provides for

setting up a joint venture, Packcity France, which will

be jointly owned by GeoPost and Neopost, while the

consignment points will be operated under the Packcity

brand, and 1,000 points will be exclusively dedicated to

GeoPost.

Through these PickUp and DropOff network delivery

options, Le Groupe La Poste provides an efficient means

for completing its different delivery offerings available to

e-retailers and end-customers.

Profile of the express market—GeoPost

Multi-faceted competition on the express market

The market is largely structured around shipping (air

or road) and customer (corporate or private individual)

characteristics, and there are three major types of

operators:

Global players—also called integrators. These are

shippers who control the whole shipping chain. They

manage a whole series of activities: airline company,

customs broker, cargo agent and often road carrier. The

four major players in this market (DHL, TNT, FedEx and

UPS) enjoy 80% (1) of the global market;

European players, including GeoPost, that are mainly

road operators;

Local players, including some national postal operators

(operating in domestic BtoC markets), and certain regional

transport SMEs that offer some BtoB express services.

Domestic demand is continuing to switch from air

transport to road transport and from express to deferred

delivery

In addition to the trends mentioned above, and in particular

the development of BtoC traffic with operators historically

positioned in BtoB, the market has experienced a transfer

of air express traffic to more economic shipping methods,

namely by road.

The crisis has led to greater price sensitivity. As a result,

corporate customers have changed their orders from

premium express to deferred express, which is cheaper but

without the guarantees provided by premium express. Since

GeoPost's subsidiaries are very active in the products and

services in this segment, they benefit from these customer

shifts.

Market prices have been influenced by the economic

and competitive environment

The express and deferred parcel transport business is

facing a certain level of pricing pressure both in the BtoB

and BtoC segments.

Three factors are contributing to pricing pressure, namely

an increase in the capacity of parcel operators who have

followed the market's capacity, customers' high level

of negotiation power due to the concentration of the

e-commerce market on a handful of operators, and the

costs relating to delivering to private individuals, which are

higher than for companies.

The continued roll-out and expansion of the offering

and the optimization of capital expenditures and means

of production enable GeoPost and ColiPoste to provide

a commercial and industrial solution, and to continue

expanding their business and results.

Profile of the traditional parcels market—ColiPoste

In France, parcels grew thanks to distance sales in the

1980s, followed by a long period of stagnation before being

reinvigorated with the appearance of e-commerce. This

market has been growing at an average rate of 4% per year

for the last three years.

(1) Internal sources, for 2011.



This market has undergone substantial change over the

past number of years. Service standards have moved

closer to those offered by express in terms of speed and

tracking. Customer profiles have changed, with the decline

in volumes of some major traditional customers such as

mail order firms benefiting e-retailers, demanding in terms

of quality of service, which has profoundly altered the nature

of the market.

The major market trends with respect to postal parcels

sent to private individuals continue to be impacted by the

ongoing explosion in e-commerce, the decline in traditional

distance sales which is progressively moving online and

more demanding customers (more tracking, more services

and better reliability).

Online commerce as a market driver

Driven by almost universal high-speed Internet in the

home, e-commerce has reached the whole population of

France, regardless of social and professional status or

age. European e-commerce, including goods and services,

increased by 19% to €311.6 billion in 2012 (1).

This phenomenon has completely changed consumption

patterns, in terms of the structure of the offering, the

structure of the online presentation and the various

delivery options. For Le Groupe La Poste, this development

represents a highly promising underlying trend. Distance

sales continued to expand in 2013, against a backdrop of

falling household retail consumption (-2%). The distance

sales market share now accounts for 7% (2) of household

expenditure (excluding food), which still allows for

significant growth potential for the future. The growth in

this market results from a combination of two factors: the

switching of mail-order sales to online sales, and websites

gaining market share from bricks-and-mortar retailers.

The result is a moderate growth rate for distance sales at

around 3% (net impact of the growth in e-commerce and

the contraction in mail-order).

The number of active merchant sites has grown from less

than 50,000 at the end of 2008 to more than 120,000 in

June 2013 (1). In 2013, growth in distance sales experienced

accelerating momentum in response to the intensification

of purchases. Accordingly, the percentage of households

receiving parcels increased to 87% (3) with the average

number of parcels received per household now reaching

15.5 (2) per year.

There were 3,000 e-retail websites offering the So Colissimo

service in 2013, compared with 2,000 websites in 2012.

New forms of competition

Competition mainly stems from another delivery method:

PickUp and DropOff. This system, which was developed by

mail order companies for their own purposes, has become

a distribution channel in its own right and is experiencing

growing success as a result of certain benefits associated

with out-of-home delivery (e.g. longer opening hours of

convenience stores and competitive prices).

In addition to the emergence of PickUp and DropOff, it is

worth noting the development of e-commerce platforms or

providers of e-retail websites to distance-sellers, who may

increasingly act as middlemen between ColiPoste and its

customers, both in the private individual and professional

sectors (Price Minister, and Oxatys, etc.).

5.1.2.3.2 Business Activities

GeoPost's business activities

GeoPost’s products and services

GeoPost’s core business is the express shipping and delivery

(next day within France and next day or within 48 hours for

international intra-European deliveries) of parcels weighing

less than 30kg to companies (BtoB).

GeoPost’s express offering comes in two forms:

Premium Express, guaranteeing next-day delivery,

typically before 13:00 (date and time specified—refund

if not delivered on time);

Deferred Express, ensuring delivery prior to 18:00 the

next day but without any delivery deadline guarantee.

GeoPost is primarily positioned in the road deferred express

parcel segment.

Due to the strong growth of e-commerce, BtoC home

delivery offerings now account for a significant portion of

GeoPost subsidiaries’ business.

(1) Latest E-commerce Europe report.

(2) Source FEVAD.

(3) Source: Sofres-ColiPoste.



In addition, depending on the market, these BtoC offerings

rely on local networks, thereby offering private individuals

and small businesses several services as follows:

Pick-up of their parcel, at the time and place of their

choice, from a network of pre-determined delivery

locations;

Management of return-to-sender items and delivery

slips;

Pick-up and sale of a reasonably priced offering.

GeoPost was the f irst company to introduce the

"Predict" product onto the market: this service warns

customers of deliveries within a one-hour window, while

the addressee has the option to reschedule the delivery

timeframe up to six days by text message or e-mail, with

a delivery timeframe of one to five hours depending on the

business unit. This option, launched in 2010 by DPD UK in

the United Kingdom, is available for cross-border deliveries,

in particular between Germany, the Benelux and Slovakia.

It is being expanded and deployed by all of the subsidiaries

in Europe.

Communications with addressees significantly reduces

the number of unsuccessful delivery attempts, and results

in a substantial increase in customer satisfaction. This

saves time and also reduces CO2 emissions, by reducing

unnecessary trips.

GeoPost's product range includes:

"DOMESTIC" OFFERING

Deferred Delivery Express Delivery

BtoB DPD CLASSICNext-day delivery

ExapaqNext-day delivery

SEUR 24Next-day delivery

DPD Express: DPD 8:30, DPD 10:00, DPD 12:00,

DPD 13:00 and DPD 18:00

Guaranteed delivery the next day before 8:30, 10:00, 12:00, 13:00 or 18:00

France: Chrono 8, Chrono 9, Chrono 10, Chrono 13, Chrono 18Guaranteed delivery the next day before 8:00, 9:00, 10:00, 13:00 or 18:00

Spain: SEUR 8:30, SEUR 10:00, SEUR 13:30Guaranteed same-day or next-day delivery

BtoC Pickup ServicesThe business units' partner, which is responsible for

IT system implementation and network development.

Delivery service is ensured by the business unit

Examples of business units using the Pickup system: DPD Parcel ShopsDelivery to 4,500 pick-up points in Germany, and delivery

to 531 pick-up points in Belgium

Spain: SEUR-Punto Pack Network & SEUR Own NetOver 870 delivery points in Spain where BtoC customers

can pick up their parcels

France: Chrono RelaisGuaranteed next-day delivery from 13:00 onwards at one of the 6,150 Chrono Relais points

Portugal: Chronopost—Pick Me!Next-day delivery before 13:00 at the 440 Pick Me! pick-up points. (including Madeira and Azores)



"INTERNATIONAL" OFFERING

Deferred Delivery Express Delivery

BtoB DPD CLASSIC 1-4 day delivery in Europe

7-day delivery worldwide

Chrono ClassicSEUR Classic

DPD Express Next-day delivery in Europe

Express delivery available in over 220 countries

worldwide

DPD GuaranteeGuaranteed delivery to European destinations

Chrono Premium EuropeNext-day delivery in major European cities before 10:30

Chrono Express Europe and worldwideNext-day delivery in the main European cities, and in 2-3 days in main destinations worldwide

SEUR Air CourierGuaranteed delivery in main destinations worldwide

SEUR NetExpress

BtoC DPD Parcel ShopsDelivery in 1 to 4 days available cross-border, notably between Belgium, the Netherlands and Luxembourg

GeoPost customers

GeoPost’s target customers mainly operate in the following

sectors:

High technology and telecommunications;

Fashion and textiles;

Pharmaceuticals, health, biology and cosmetics;

Automotive, steel and tires;

Publishing;

Music and entertainment;

Sports goods.

The subsidiaries develop a service offering tailored to the

specific requirements of their customers.

ColiPoste business activities

ColiPoste products and services

ColiPoste's mission is to deliver parcels to private

individuals in a reliable manner, according to the methods

that they choose, which is at the heart of the relationship

between a company's offering and the customer's order.

The ColiPoste range is focused on three products:

Colissimo: Colissimo is ColiPoste’s flagship product, and

accounted for 80% of the volumes handled in 2013. This

product integrates the key services demanded by private

individual customers, such as fast home delivery (within

two days), online parcel tracking and flat-fee insurance

either included or optional.

Coliéco piloté: economical corporate parcel service with

no guaranteed delivery times. Since November 2009, this

product has been enhanced with systematic scanning at

all shipping and delivery phases.



Over the past three years, the proportion of tracked

products deliverable within 48 hours has risen sharply, at

the expense of low-cost parcels. The Colissimo offering

combining speed and traceability is becoming the market

standard.

So Colissimo: a new delivery offering that was launched

in June 2010; this high service-content product

accounted for 18% of corporate volumes, excluding

Coliéco, in 2013. So Colissimo offers a 48-hour multi-

option delivery service in Metropolitan France. It offers

a choice between delivery to the addressee's home, by

appointment in the evening between 17:00 and 21:30

(exclusively in Paris), at a secure Cityssimo location

24/7 (where parcels are available for up to 10 business

days), at a post office chosen by the addressee (for

instance, the post office closest to their place of work

among the 10,000 available post offices), or at one of the

5,500 partner retailers.

Addressees choose other delivery methods than home

delivery (primarily delivery to post offices or retailer pick-

up points) in 10% of cases.

3,000 e-retail websites were offering So Colissimo at the

end of 2013.

In response to new lifestyle and customer practices

driven by e-commerce and the growing importance of

the Internet for customers, ColiPoste is introducing new

services organised around its products: online franking

of parcels on the ColiPoste website, parcel tracking with

mobile telephone updates and parcel pick-up according to

the selected options. So Colissimo also provides an email

and/or SMS notification service when the parcel becomes

available, in response to the trend of growing customer

expectations in terms of delivery standards, tracking and

adapting to changing living and work rhythms.

Central to this offering are quality of service and recipient

customer satisfaction. ColiPoste’s quality of service has

reached 95% for 48-hour delivery.

To provide a higher quality service level to a large number

of destinations, La Poste-ColiPoste has signed the main

postal service agreements, including the E-Parcel Group

(EPG) for Europe and the Kahala Posts Group (KPG) for the

world. Membership in these networks makes it possible to

offer a very high quality of service in international regions

with Colissimo International with guaranteed delivery

performances for 15 countries (or more than 70% of

volume).

Through high quality delivery, ColiPoste plays a major role

in boosting confidence in distance purchasing. Indeed, the

distance purchasing decision is highly correlated with the

confidence of shippers and recipients in the delivery service:

66% (1) of web users believe that delivery options for online

purchases represent a determining factor when choosing

a merchant site.

ColiPoste is also conscious that sales price has become a

decisive criterion for customers. E-commerce constitutes a

business model frequently comparable to mass retail with

relatively low margins: transportation costs are of structural

importance for this business and represent a major process

in the value chain of e-retailers.

ColiPoste customers

ColiPoste's customer portfolio breaks down between

distance sales companies (traditional distance sellers and

e-retailers) and private individuals and small businesses.

Thanks to an offering that is suited to the requirements

of companies that ship parcels, ColiPoste has established

high-quality relations with over 50,000 major distance-

selling and corporate customers who now entrust their

shipments to ColiPoste.

ColiPoste's “corporate” business accounted for 71% of its

revenue and 84% of its volumes in 2013.

ColiPoste's customer base of shippers may be broken down

into the following segments:

distance sellers, whether traditional players having

added online sales, e-retailers (pure players) or click-

and-mortar companies.

A long-standing supplier of so-called “traditional”

distance sales companies, ColiPoste has over the

past few years become a very important supplier to

e-commerce companies;

logistics operators, who buy transport services on behalf

of a number of shippers selling a range of private brands;

other parcel shippers (e.g. subscription books,

promotional items).

Customer size is a major segmentation criterion, as

200 customers account for around 70% of ColiPoste’s

“corporate” revenue. They enjoy special options (e.g.

drop-off at sorting platform, pre-sorting, direct shipping,

etc.), depending on the volumes dropped off and the

sorting already carried out. There has been a recent and

rapid development relating to customer concentration,

and some of the flagship brands in the Internet world

recorded double-digit growth in the volumes that

ColiPoste handled for them in 2013.

(1) Internal source.



ColiPoste offers services adapted to the needs of private

individuals and small businesses in post offices, in large

part under the Universal Parcel Service assigned to

Le Groupe La Poste.

Cash sales online or in post offices meet the shipping needs

of private individuals and small businesses. ColiPoste

estimates that around 70% of these shipments are from

private individuals, and that they meet the following three

requirements:

trading between private individuals, which is made

possible thanks to merchant platforms (40% of this

segment);

distance-selling returns, since distance sellers in

France usually only offer free returns if the order was

not fulfilled properly or as part of after-sales services,

and rarely do so in the event of ordinary cancellations

(30% of this segment);

shipments between private individuals for other reasons

(e.g. gifts, and forgotten items, etc.), which account for

30% of this segment.

5.1.2.4 Outlook and Strategy

5.1.2.4.1 GeoPost outlook and strategy

GeoPost's mission is fundamentally to provide its worldwide

customers with transport solutions with defined deadlines

and related logistics services, with comprehensive tracking

services for the merchandise shipped. It is on this basis that

GeoPost continuously observes the market and evaluates

trends.

Pursuing growth in Europe: organic and through acquisitions

GeoPost is pursuing its strategy aimed at developing a

specialist parcels-express network in the BtoB and BtoC

areas. GeoPost is now number two in Europe and has an

acknowledged strong European (1) network focusing on road

parcels-express.

GeoPost's goal is to become number one in Europe. Since

it was founded almost a decade ago, GeoPost has enjoyed

uninterrupted growth in its European network, either

through acquisitions or organic growth.

The European market is undergoing a phase of

consolidation: the three largest postal operators (in

Germany via DHL, in France via GeoPost, and in the United

Kingdom via GLS and Parcelforce) control over 40% of

the European market. The market is already relatively

concentrated, although it is still very fragmented compared

with the US market, where two operators share 95% of the

market between them. Consolidation can thus be expected

to continue.

GeoPost will make acquisitions whenever they make

sense, either in terms of geographic footprint or in terms

of making useful additions to existing business activities.

GeoPost's strategy in terms of organic growth will be to

increase market share by relying on the efficiency of its

network and the quality of its services.

Developing GeoPost's positions internationally

GeoPost's broader international strategy consists of

duplicating the European model in other major regions of

the world, by aiming to interconnect these regions with the

European Continent, including:

developing the network in Eastern Europe and Asia:

GeoPost's road network in Eastern Europe and Asia

stretches from France to Russia, including Belarus,

Ukraine, Kazakhstan and Turkey. This network operates

under the DPD brand, except for Turkey, where the

network operates under the Yurtiçi Kargo brand.

GeoPost has already linked up all its networks in this

part of the world; conversely, the Eastern European

and Asian network is currently being connected to the

European network; this road connection is now a priority

for GeoPost. The toC market is experiencing strong

growth in this part of the world, and GeoPost has already

focused its business on this market in all the countries

in question.

developing the network in South-East Asia and in Africa,

and more specifically in India (where GeoPost acquired

a 40% share capital in DTDC in 2013), in the Republic

of South Africa (where it operates with DPD Laser), in

the Far East (where GeoPost has partnerships with the

Chinese and Japanese Postal Services), as well as in

South-East Asia (Indonesia, the Philippines, Vietnam,

Thailand and Malaysia).

GeoPost will also rely on Tigers, Sodexi and Lenton

(Cathay Pacific) for the growth in inter-continental traffic

between its various regional networks (Europe, Eastern

Europe and Asia, South-East Asia and Africa).

Pursuing its capital expenditure strategy

The efficiency and quality of GeoPost's solutions guarantee

the success of its customers. GeoPost has made substantial

targeted capital expenditures, in order to drive growth,

deliver a high-quality service and optimize its regional

coverage over the past few years; these capital expenditures

have enabled it to open and expand hubs in France and

Europe, and to equip its delivery staff with portable

scanners, etc.

(1) Internal source.



GeoPost's strategy is to pursue these investments in

infrastructure, technology and personnel. In 2013, GeoPost

announced the construction in the United Kingdom of the

largest hub in Europe that will be operational in 2015.

This high-performance platform for processing parcels

will increase the capacity of its network in order to meet

customer needs. DPD also invests in Russia, where it is

the leader in the Russian express delivery market, via the

development of new branch offices and of its network.

Expanding into BtoC markets, notably through the development of PickUp and DropOff

GeoPost's goal is to build the largest network in Europe

with a unified and coherent structure offering European

shippers a consistent level of service. The aim is to pursue

the development of the Pickup model in other countries in

2014, after Germany and the Benelux countries.

All merchant partners will be equipped with PDAs that will

send a notice of availability by email or SMS on the parcel's

receipt. The offering may be replicated in other countries

covered by the DPD network, as and when required.

Driving product innovations and customer satisfaction

GeoPost is focusing on enhancing the customer experience,

in line with the examples below, which illustrate best

practices within the Group.

DPD UK has launched "Follow My Parcel", the first live

parcel tracking service. Thanks to this new service,

customers can follow their delivery in real-time via

an interface that combines mapping software and

the delivery vehicles' GPS system, calculate the time

remaining, and obtain the narrowest possible delivery

slot (15 minutes). In the same way as Predict already

enables them to do, they can also select the option to

have their parcel delivered to a neighbour.

The customer experience is enhanced thanks to the use

of the very latest technology available, such as the option

for customers to access the "track and trace" page on

their mobile phone or tablet via a secure link, as well as

to use responsive web design technologies. Customers

have warmly welcomed this solution, and have shared

their experience on social networks. This initiative has

enabled DPD UK to really stand out in its market.

In Estonia, DPD Estonia introduced an immediate feedback

system in October 2013, which enables customers to

express their opinions on the service that they received

(delivery service, customer service and sales).

To conclude, GeoPost, which specializes in the road delivery

of express parcels, is building three competitive benefits

compared to the competition:

the hybrid (BtoB and BtoC) nature of its world-wide

networks;

the extent, consistency and continuity of its regional

networks;

the advanced industrialization of its operations, and

the incorporation of new technologies in operating

processes.

The strategy should enable GeoPost to grow faster than

the market, and therefore play a role in the market's

consolidation.

GeoPost's business performance relies on growing volumes

and the development of international (intra-European, intra-

region, and intercontinental) traffic.

GeoPost’s development outside Europe is based on the

same business model as the European model.

5.1.2.4.2 ColiPoste’s outlook and strategy

Col iPoste has implemented i ts strateg ic p lan:

"Satisfaction 2015: we are all working for our customers".

This plan underlines the commitment to put customers at

the centre of strategic priorities:

ColiPoste will continue to simplify and develop its

parcel delivery service offering. In particular, increased

interactions with customer recipients will make it

possible to respond more effectively to their need

for information about the delivery of their parcel, the

choice of date and place of delivery. These changes

should ensure successful delivery and offer addressee

customers even more choice. An innovation will also be

introduced for the sending of parcels.

Operational reliability and the fulfilment of service

commitments remain the cornerstone of business and

of customer satisfaction: service quality indicators

are systematically monitored, and must contribute

to ongoing improvements in processes. In addition

to internal indicators, a new customer satisfaction

indicator based on the Net Promoter Score method (Net

Recommendation Index) will also be used. The aim is to

supplement service quality assessment with a metric that

takes customers' viewpoints into account. This indicator

involves asking service users about their customer

experience and checking if they would be ready to

recommend those services, and therefore promote them.



For ColiPoste, the target is to remain the preferred parcels

delivery service in France by virtue of its reliability and its

range of delivery solutions. The So Colissimo brand should

progressively become the new benchmark for secure

delivery of distance purchases.

ColiPoste defined a number of strategic priorities:

increasing competitiveness through innovation by

implementing parcel delivery and shipping solutions that

meet customers' expectations;

implementing a value-creating relationship for shipping

customers;

ambition to strengthen addressee customer satisfaction;

ensuring cost control and operational reliability, pursuing

the investment strategy for its network and information

system.

ColiPoste is also pursuing its staff development policy

in order to strengthen collective performance and team

satisfaction as essential conditions for achieving its

strategic goals.

5.1.3 Banking Activities

2013 2012 2013/2012 change


Net Banking Income 5,539 5,241 +298 +5.7%

External Net Banking Income 5,522 5,217 +305 +5.8%

Intercompany NBI 17 24 -7 -27.9%


5.1.3.1 Overview of La Banque Postale

5.1.3.1.1 History

Traditionally active in deposit taking and property lending,

Le Groupe La Poste Financial Services underpinned

the Group’s development since the early phases

marking the transition from the French Post Office and

Telecommunications company into two independent

operators: France Télécom and Le Groupe La Poste.

Following its separation from the French government

ancillary budget, La Poste became legally autonomous

on 1 January 1991. It continued to offer deposit taking and

property lending with prior savings via its Financial Services

arm, albeit without enjoying the status of a credit institution.

As a result, sight deposits (CCP—postal bank accounts)

were pooled daily at the French Treasury. A similar

arrangement also applied to regulated savings accounts

(i.e. home ownership savings plan, Home Savings Accounts

(CEL) and Livret A passbook savings accounts), the balances

of which were pooled within the Savings Funds managed by

Caisse des Dépôts. Property loans were ultimately granted,

subject to there being prior savings, by Financial Services

but were recognised on the balance sheet of the Home

Savings section of the Savings Funds.

Le Groupe La Poste later proposed retaining sight

deposits and taking over the financial management itself.

In February 2000, it requested approval from the Comité

des établissements de crédit et entreprises d’investissement

(Committee of Credit Institutions and Investment

Companies—CECEI) to create an investment company

whose purpose was to financially manage these resources.

In 2005, Le Groupe La Poste proposed to create a subsidiary

with banking status that had the ability to carry all of its

customers' deposits, and all the loans on its balance sheet,

as part of the Government Planning Agreement.

On 30 November 2005, CECEI authorized Efiposte to take

over the rights and obligations of La Poste’s Financial

Services, in order to become La Banque Postale.

Likewise, on 21 December 2005, the European Commission

concluded that the founding of La Banque Postale would not

jeopardize competition in the banking sector.



La Banque Postale was therefore founded on 31 December

2005, via the legal transformation of Efiposte, which was

authorized by Act 2005-516 on the regulation of the postal

activities of 20 May 2005. This law provided for Le Groupe

La Poste to set up a subsidiary into which all the assets,

rights and obligations relating to La Poste’s Financial

Services would be transferred, including those relating to

deposit and savings accounts, and more generally, to any

kind of agreements opened or entered into with La Poste

in this context.

The law regulating postal business gave Le Groupe La Poste

a public service mission in the banking, financial and

insurance sector by giving it an obligation to offer products

and services to as many people as possible, notably the

Livret A savings account. Within this framework, La Banque

Postale is obligated to open a Livret A savings account to

anyone who requests it for free. An essential point of its

public service mission is to authorize payment transaction

on Livret A relating to social security benefit. and public

employee pensions and withdrawals pertaining to duty

and tax payments, water, gas and electricity receipts and

social housing rent. Lastly, La Banque Postale is the only

bank where withdrawals and deposits on Livret A passbook

savings accounts are authorised starting at €1.50.

When established, La Banque Postale was authorised to

expand its range to cover all forms of property lending.

Previously, La Poste could only offer them to customers

with prior savings, via Home Savings Plans (PEL) or Home

Savings Accounts (CEL).

Following the European Commission's decision asking

France to no longer restrict the distribution of Livret A

passbook savings accounts to traditional operators, the

French Economy Modernisation Act of 4 August 2008 opened

up distribution of the Livret A passbook savings account to

all banks as long as they entered into an agreement with

the French government. For its part, La Banque Postale saw

its banking accessibility mission with respect to the Livret A

passbook savings account legally defined and recognised.

In 2007, the French government granted La Banque Postale

a licence to expand its product range to consumer credit

and as from 2009, to property insurance. These moves were

approved by the relevant authorities.

In August 2010, La Banque Postale also obtained an

authorization from the Minister of the Economy, Industry

and Employment to draft an offering of financing products

and services for corporates. On 5 September 2011, this

culminated in the authorization by the French Prudential

Oversight Authority (Autorité de contrôle prudentiel) to

provide financing for corporates (SMEs, micro-businesses,

non-profit organizations, social housing operators, etc.).

La Banque Postale therefore entered a new stage, and now

offers all the products and services of a retail bank.

La Banque Postale was authorized to finance the local

public sector by the French Prudential Oversight Authority

on 25 May 2012, and has been offering local authorities

short-term loans since June 2012, and medium and long-

terms loans at fixed or reviewable rates, and maturities of

up to 15 years since November 2012.

Lastly, La Banque Postale strengthened its position in the

social home ownership scheme for low income families,

and in 2012 made several partnerships with players

in social housing (the National Cooperative Housing

Federation, Maison France Confort). These partnerships aim

to secure the financing provided by implementing protective

provisions for borrowers.

In this connection the Board of Directors of Le Groupe

La Poste authorized La Poste to subscribe to an initial

€860 million increase in La Banque Postale’s capital

on 26 August 2011. The primary purpose of this capital

increase was to support the development of La Banque

Postale’s lending activities (property loans, consumer credit,

and lending to legal entities). This decision also enabled the

introduction of a more diversified management process for

the Bank’s balance sheet, by making use of its strong cash

position.

At its meeting on 28 November 2013, which was chaired by

Philippe Wahl, the Board of Directors of Le Groupe La Poste

authorized a new increase of over €1 billion in La Banque

Postale’s equity capital (1). This transaction represents

a major step towards consolidating the Banks’ financial

structure and solvency, in accordance with the strategy

aimed at developing its lending businesses. The investment

consisted of a capital increase via the contribution of the

company that owned La Banque Postale’s head office, which

was valued at €228 million, corresponding to its market

value on the date of the transaction together with a hybrid

subordinated Tier 1 issue amounting to €800 million, which

was entirely subscribed by Le Groupe La Poste.

(1) And related receivables. Head office located 115, rue de Sèvres, 75006.



5.1.3.1.2 Overview of La Banque Postale

La Banque Postale, a public limited company with an

Executive Board and Supervisory Board, is the parent

company of La Banque Postale group.

As the successor to La Poste Financial Services, it inherited

the Group’s values of trust, accessibility and proximity, giving

it an original and unique positioning in the French market.

This policy is reflected in a strategy based on moderate

service tariffs, accessibility for all customers and simple

products that focus on customers’ requirements.

La Banque Postale's business activities are focused on

retail banking operations in France, and private individuals

in particular. Its operations are structured around three

business activities:

Retail Banking, its core business, which primarily

focuses on retail customers, and was extended to

included corporates in 2011, and local authorities in

2012;

Insurance (life, contingency, property and health);

Asset Management (asset management companies and

private wealth management).

La Banque Postale's has 3,500 direct employees spread

throughout France. Moreover, the 17,860 Financial

Services employees in the financial centres are placed

under the responsibility of the Chairman of La Banque

Postale’s Management Board, in his capacity as Deputy

Chief Executive of La Poste in charge of Financial Services.

This organizational structure is specifically dependent on

22 financial centres (18 in Metropolitan France and four

overseas), including six national financial centres that have

specific expertise, and a dedicated IT Department. It also

relies on 39 subsidiaries and strategic equity investments,

and on the distribution capacity of La Poste's network.

At 31 December 2013, La Banque Postale had:

10.7 million active customers;

11.6 million deposit accounts;

9,702 advisors and customer managers;

684 real estate advisors, 811 wealth advisors and

77 wealth management advisors;

7.47 million bank cards, and 7,000 self-service kiosks

and ATMs;

€200 billion in total balance sheet assets.

5.1.3.2 Structure

5.1.3.2.1 Functional structure

Wholly-owned by La Poste, La Banque Postale is both a

Group customer (in particular of Mail) and supplier, acting

as its main bank. La Poste acts as a service provider by

assigning to La Banque Postale employees who work “in

the name and on behalf of” La Banque Postale.

The relationship between La Banque Postale and La Poste

is governed by service agreements provided for by the Act

of 20 May 2005. These agreements cover various services,

such as commercial relations via a framework agreement, a

Commercial Charter, provisions relating to inspections and

oversight, combating money laundering and the financing

of terrorism, and agreements governing the use of staff and

various other service agreements.

The La Poste staff assigned to La Banque Postale

implement the Bank’s policies in its name and on its behalf.

In accordance with specific rules, it was given the necessary

powers by the Bank to carry on banking activities, primarily

encompassing back-office and middle-office operations, IT

support and the financial products sales force.

Counter services are carried out the Retail Brand’s network

of post offices and are governed by agreements specifying

the types of transactions to be carried out, the relevant

unit price based on the economic system, the prescribed

procedure and quantitative and qualitative service criteria.

La Banque Postale has an Executive Board and Supervisory

Board with independent members.

The Supervisory Committee is assisted by three Special

Committees:

Audit Committee;

Strategy Committee;

Appointments and Remuneration Committee.

5.1.3.2.2 Capital structure

The structure of La Banque Postale reflects La Poste's

Financial Services organizational structure and consists

of, in particular:

La Banque Postale, parent company of the Group

(formerly Efiposte) to which the Financial Services

businesses were transferred. It is also the core of the

Retail Banking activities;



SF2, a holding company for La Banque Postale's

subsidiaries and investments with the exception of a few

entities directly held by La Banque Postale. Since SF2

already existed during the La Poste Financial Services

era, it was transferred to La Banque Postale when it

was established, at which time it already controlled the

Insurance and Asset Management businesses.

The most recent acquisitions or creations are held directly

by La Banque Postale, in line with the example of BPE or

La Banque Postale Collectivités Locales.

5.1.3.2.3 Partnerships

In order to expand the scope of its business activities and

its areas of expertise, and to better respond to customer

requirements, La Banque Postale instituted a very active

partnership policy designed primarily to effectively share

expertise and control costs while staying true to its core

values.

The La Banque Postale's multi-partner strategy is based on

the sharing of expertise, technology and systems, and on

customer access. Through these partnerships, La Banque

Postale can quickly move into new businesses on the back

of the expertise of major market players, enabling it to

provide its customers with a broader and more innovative

offering.

Insurance

This strategy was initiated with CNP Assurances in life

insurance, with Financial Services distributing a range

of life insurance contracts since 1989. In 1998, CNP

Assurances and La Poste's Financial Services decided to

set up a company, which was renamed La Banque Postale

Prévoyance in 2007, to provide a range of personal risk

products covering the needs of La Banque Postale.

In 2009, La Banque Postale entered into a partnership with

Groupama in property insurance via La Banque Postale

Assurances IARD, a subsidiary in which La Banque Postale

has a 65% stake.

In 2010, a partnership was entered into with La Mutuelle

Générale in health insurance via the creation of the

La Banque Postale Assurance Santé subsidiary, also 65%

owned by La Banque Postale.

Loans

In 2009, La Banque Postale obtained the authorization from

the Credit Institutions and Investment Firms Committee

(CECEI) to distribute consumer credit, and created a

partnership with Franfinance, a subsidiary of Société

Générale. La Banque Postale Financement, 65% owned

by La Banque Postale via SF2, is the company providing

these loans, distribution being the responsibility of the post

offices, distance communication channels or a dedicated

call centre.

Created on 27 March 2013, La Banque Postale Collectivités

Locales, 65%-held by La Banque Postale and 35%-held

by Caisse des Dépôts, provides services relating to the

marketing of loans to municipalities and hospitals by

La Banque Postale. These loans are then refinanced by

Société de Financement Local (Sfil), a company in which

La Banque Postale (5%) and Caisse des Dépôts (20%) are

also shareholders.

Means of payment

In 2008, La Banque Postale and Société Générale created

Transactis, a joint venture designed to pool resources

from the two partners in order to develop and operate

computerised banking information systems. Transactis

therefore processes all the transactions of La Banque

Postal and Société Générale with retailers and also all of

the flows between the two institutions (La Banque Postale

and Société Générale). At the end of 2012, Le Crédit du

Nord joined La Banque Postale and Société Générale within

Transactis, confirming the Transactis solution's ability to

manage a "multi-bank" banking group including several

different names.

On 17 September 2013, BNP Paribas, La Banque Postale

and Société Générale announced the launch of Paylib,

a company proposing a new simple and secure online

payment solution. With Paylib, three banks meet customer

needs for simplicity and security by proposing a new

method of online payment from a computer, smartphone

or touchscreen tablet that does not require them to enter

their bank details. La Banque Postale holds 33.33% of this

new company.

Other partnerships

In 2006, La Banque Postale and Natixis founded a

subsidiary, Titres Cadeaux, a 50/50 joint venture, to market

multi-retailer gift vouchers and cards to private individuals,

professionals, companies and works councils.

In 2007, La Banque Postale set up La Banque Postale

Gestion Privée with Oddo & Cie, in which La Banque Postale

holds a controlling interest, to develop a discretionary asset

management service offering. In accordance with the heads

of agreement, it was decided in 2012 that the agreement

between La Banque Postale and Oddo & Cie with La Banque

Postale Gestion Privée not be extended. La Banque Postale

became the sole shareholder in La Banque Postale Gestion

Privée on 27 June 2013.



5.1.3.3 La Banque Postale business activities

La Banque Postale business activities are split into three

divisions: Retail Banking (including the customer segments

comprised of private individuals, companies and local

authorities, Insurance and Asset Management.

5.1.3.3.1 Retail Banking

Retail Banking includes the activities of La Banque Postale

and the retail banking subsidiaries, like La Banque Postale

Financement, La Banque Postale Crédits Entreprises and

BPE.

The retail bank is organised around the sector covering

the marketing of products to retail customers in the area

of deposit, savings and loans (housing and consumer),

means of payment and insurance products. It also includes

the lending and deposit businesses for companies,

professionals, not-for-profit organizations, and the local

public sector. Lastly, it includes the business carried out

with the support of La Banque Postale Collectivités Locales.

Other related activities are included in this segment, such

as the real estate investment partnerships (SCIs) that own

the facilities used by the financial centres in Metropolitan

France and overseas, as well as SF2, which owns La Banque

Postale's equity investments and receives dividends from

non-consolidated investments.

A unique model in the French landscape

La Banque Postale operates an original business model

in the French banking market. With close to 10.7 million

active customers and 435,500 legal entities customers

(companies and non-profit organizations) at the end of 2013,

the development of La Banque Postale depends on building

and maintaining a long-term customer relationship offering

innovative solutions. It constitutes a model of a bank close

to its customers, transparent, attentive to their needs, with

a human dimension. In September 2013, the quarterly

barometer, Posternak/Ifop that evaluates the image of the

global brand of banks with consumers, ranked La Banque

Postale second, underlining the strength of La Banque

Postale's position in the daily lives of the French population

and as a provider of financing to the real economy.

A model geared towards customer satisfaction

This development model is centred on understanding

customers' requirements, on the advice offered to them,

and on supporting all customers, including customers of

modest means and marginalized customers.

This support is provided by over 31,000 people, including

over 3,560 employees working at La Banque Postale and its

subsidiaries, and over 27,400 La Poste employees, working

exclusively in the name and on behalf of La Banque Postale,

in bank back-offices (financial centres), IT, or in the advisory

and marketing businesses, mainly within the post offices.

Moreover, 31,796 counter clerks provide multi-business line

assistance at around 10,000 post offices that are part of the

La Poste Retail Brand.

La Banque Postale also relies on a network of over

6,984 ATMs used by La Banque Postale spread across the

country, which handled over 520 million transactions in

2013.

A resolutely multi-channel model

La Banque Postale aims to build a close relationship with its

customers, notably by means of an innovative multi-channel

relationship that enables each customer to decide how they

will interact with La Banque Postale: face to face in a post

office, by telephone, via the Internet, as well as by a new

means of long distance communication, La Banque Postale

Chez Soi. Today one third of La Banque Postale's customers

use the Internet to manage their accounts.

This close relationship with customers is built and

relies on the relationship with the post office, thanks to

the 9,702 advisors and customer managers who serve

customers, as well as on a new branch layout named

“Espace Service Client” (Customer Service Area—ESC),

which was rolled out at 1,659 locations at the end of 2013,

and aims to strengthen the way customers are dealt with,

the visibility of La Banque Postale, and to reduce waiting

times.

The financial centres also play an important role in this

multi-channel relationship: close to 6,000 employees in the

financial centres are dedicated to processing transactions

and customer relations, and they receive and handle nearly

16 million calls. Since 2009, the national customer relations

centre has been tasked with responding to existing and

potential customers with queries regarding La Banque

Postale and its products. A unique telephone number,

3639 (1), was set up. The three specialised platforms of the

subsidiaries La Banque Postale Financement, La Banque

Postale IARD and La Banque Postale Assurance Santé also

play a major role in this remote customer relationship.

(1) €0.15 including tax per minute + potential surcharge depending on the operator.



The web portal at www.labanquepostale.fr allows customers

to interactively participate in this relationship. This site

welcomes 498 million visits per year. In 2010, La Banque

Postale also launched its website labanquepostale.mobi

for smartphone technology and completed the available

applications through three products aiming to support

mobile users in their budget management and project

development. Since the end of 2011, the Banque Postale's

Smartphone banking application is available on mobile

telephones sold in post offices, thereby reinforcing the

synergies between La Poste and La Banque Postale.

Furthermore, La Banque Postale has been experimenting

with mobile payment since June 2013, by testing the

micro-SD technology for contactless payments using a

smartphone with merchants equipped with compatible

payment terminals.

Today, 46% of contacts between customers and their bank

are through digital technologies.

An ever-changing model to adapt to new technology

La Banque Postale customers now have the possibility

to have a complete long-distance banking relationship

thanks to the new mode of communication “La Banque

Postale Chez Soi”. This new long-distance communication

channel (1) allows the user to access all of La Banque

Postale's products and services at the same rate as their

other communication channels, but also manage money

completely anonymously and benefit from real support by

a team of dedicated advisors.

In 2013, in the multi-channel area, the Group is pursuing its

innovation strategy with the launch of the "Talk to Pay" voice

authentication technology for purchases at a merchant site.

With Paylib's creation in September 2013, La Banque

Postale proposes to its customers the possibility to make

payments online from their computer, tablet or smartphone

with all participating merchants having the payment Paylib

icon on their payment page.

Markets

Private individual customers

Customer relations are a key driver in the development of

La Banque Postale, which places the customer’s interests

at the centre of all its business activities, from product

design to advice given to customers. In 2013, in the retail

market, La Banque Postale continued the deployment of

customer-focused commercial initiatives, including for

example promotional days proposing several special offers

for: bank cards, consumer credit, casualty insurance, and

personal risk and health insurance.

One of La Banque Postale's main areas of focus is

accessibility, enabling it to be an inclusive bank and to offer

a basic range of products and services. It is also reliant on

product innovation in order to provide specific and tailored

solutions to customer needs. La Banque Postale offers a

range of services adapted to the needs of both younger and

older customers and high net-worth, fragile or low-income

population segments or families.

La Banque Postale also proposes solutions for younger

customers to facilitate the daily banking operations of their

money, specialised account options, recommendations for

building up savings as well as a special savings product,

Livret Jeune Swing. La Banque Postale also provides

solutions for the financing of their studies through a special

student loan offering, as well as a personal apprenticeship

loan allowing them to finance all or part of their professional

training. In addition, in 2013, La Banque Postale introduced

a health insurance offering for young people during stays

outside of France. In 2013, 1.2. million young people opened

their primary bank accounts with La Banque Postale.

La Banque Postale provides private individuals with the

complete range of solutions and products of a full-service

retail bank:

Overnight accounts

La Banque Postale offers an à la carte account formula

(“formule de compte”) that allows products and services

to be tailored to the needs and financial situation of each

customer.

With close to one million gross account openings in 2012

and 650,000 at the end of December 2013, the total portfolio

for this category of overnight accounts reached more than

6 million accounts.

(1) "La Banque Postale Chez Soi" that has been in a test phase since 2010, was rolled out at the national level in 2012.



In an environment marked by uncertain economic

conditions and low returns for savings products, sight

deposits reached 47.7 billion, or a 15% underlying market

share for households (1), the increase in the ceiling for

Livret A passbook savings accounts and LDD Sustainable

Development savings accounts (Livret de Développement

Durable), encouraging fund transfers to these two types of

vehicles.

Cards and cheques

La Banque Postale distributes bank cards, the total number

of which amounted to 7.47 million as at the end of 2013, i.e.:

a +4.3% rise in the number of cards plus a +38% rise for

high value-added cards (Visa Premier);

up +8.7% for transactions through payment cards with

merchants and companies.

La Banque Postale's market share for all CB bank cards

grew further to reach 12.5% at the end of September 2013

(compared with 12.3% in 2012).

To improve service quality and reduce the time it takes

to process cheques deposited by customers, in 2011,

La Banque Postale launched a program to equip post

offices with automated cheque deposit machines or cheque

scanners for prompt crediting to customer accounts. The

roll out of these automated machines started in February

2011. This process was completed at the end of 2013 with

670 automated cheque deposit machines, as well as more

than 3,780 scanners installed in post offices.

In addition, La Banque Postale is authorised to issue Chèques

Emploi-Service Universel (CESU), a system that enables

private individuals to pay salaries and social security charges

with respect to people they employ at home. It also has a

16.66% interest in the economic interest grouping GIE CESU,

an entity created with five other partners for the purposes of

processing and cashing CESUs.

Gift vouchers

With respect to gift vouchers, La Banque Postale holds

50% of SAS Titres Cadeaux, a non-consolidated 50/50 joint

venture held with Natixis. The purpose of this venture is to

create, promote, issue, distribute, process and refund all

gift vouchers and other special forms of payment that are

not within the scope of banking monopoly and which can

be used to purchase specific goods or services from a list

of stores or other companies. In June 2011, the Company

began marketing its multi-brand gift card, CA DO CARTE,

the sales network of which was expanded in 2012. In 2013,

Titres Cadeaux won for the second consecutive year the

prize for the "Best Consumer Gift Card Programme" for

CA DO CARTE.

Savings products

Balance sheet savings products

In 2013, La Banque Postale's customers continue to

prefer liquid and secure savings vehicles. The effect of the

significant rise in the ceiling for Livret A passbook savings

accounts and Sustainable Development savings accounts

(LDD) in 2012 continued in early 2013, resulting in net

collections of €2 billion at the end of December. According

to the latest OPERBAC study (Observatoire permanent de

la banque, de l’assurance et du crédit) La Banque Postale

accounted for 26.7% of Livret A passbook savings accounts

holders.

With centralized Livret A passbook savings, Sustainable

Development savings accounts and Popular Savings

accounts balances of €76.6 billion, La Banque Postale

accounts for around 19.4% of the market in these three

products (source: Banque de France). The homes savings

product range includes the PEL (Plan Épargne Logement)

and Home Savings Accounts (CEL). Outstandings for these

two products remained steady in 2013 at €27 billion. Home

savings experienced a mixed situation, with strong inflows

into PEL accounts (€640 million at the end of November)

due to the very attractive PEL rates, and outflows from

Home Savings Accounts (CEL) accounts (-€637 million at

the end of November).

Financial savings products

In the financial savings area, the UCITS balance increased

by 1.3%, against a more favourable backdrop for equity

markets. La Banque Postale offered equity, money-market,

and bond funds on a regular basis over the year, as well as

guaranteed products protected at maturity (in life insurance

and as Share Savings Schemes), which enable customers

to take advantage of a potential rise in the markets within

a controlled risk framework. The Bank's discretionary

management business also continued to expand.

Although the life-insurance market recovered and recorded

net positive inflows, La Banque Postale recorded more

moderate inflows in 2013, following a good performance

in 2012. The proportion of unit-linked (2) policies recorded

a significant increase due to the success of the fund-

switching mandate offering, and to people taking into

account the need to diversify their assets. Market share in

terms of assets at 8.3% declined marginally to reach total

assets of €121 billion.

(1) Source: Banque de France.

(2) Unit linked accounts are investment vehicles expressed in transferable securities, i.e. listed bonds or equities, and units in investment companies, mutual

funds or real estate companies.



Home loans

2013 was marked by an increase in outstanding home loans

+10.7% bad conditions (decrease in transactions, decrease

of the number of real estate loans granted, speculative

bubble in certain regions).

The expertise and professionalism of the property advisors

specialised in real estate have resulted over the year in a

funding agreement of more than 78,000 projects, including

more than 68,000 purchases of old and new properties.

La Banque Postale's National Centre for real estate

Relations (CNMRCI—Centre national de mise en relation

du crédit immobilier), comprises approximately 40

account managers responding to information requests

from customers and prospects. In 2013, it made 16,700

appointments, more than 133,000 outbound calls and more

than 43,500 inbound calls.

La Banque Postale also supports its customers in their

first home purchase with financing solutions adapted and

eligible for subsidised loans (Home Ownership Savings

Plans, Zero Interest Loans, etc.).

For young customers, which La Banque Postale has

prioritised in its business development, the “Pactys Avenir”

offer provides a home loan with a special rate designed

for young people under 36 to help with the purchase of a

primary residence, without an initial contribution.

Meeting for the first time on 19 April 2013, the La Banque

Postale's Steering Committee for the promotion of social

home ownership enabled La Banque Postale to present

a first report on actions in favour of home-ownership

among low-income households, notably by implementing

partnerships with social housing stakeholders to develop

solutions for acquiring a home.

Consumer credit (La Banque Postale Financement)

La Banque Postale Financement (LBPF), specialised in

consumer credit, is a 65%-owned subsidiary of La Banque

Postale in partnership with Société Générale. It was granted

a licence from the CECEI in April 2009. As such, La Banque

Postale enhanced its range by launching its first range of

LBPF products.

This offering was built in the spirit of the new Act 2010-737

of 1 July 2010, known as the “Lagarde Act”, on consumer

credit and banking reform, and is based on the values of the

bank, in particular regarding customer transparency and

the attention given to potential debt problems.

It offers, in particular:

responsible practices for providing customers with loans

that reflect their needs;

educational practices with clear and transparent

documentation;

support options (budget reviews) throughout the life of

the loan;

socially responsible practices through a Support

unit within the customer relations centre itself and

partnerships with the Crésus association for financially

fragile customers.

At the end of 2013, La Banque Postale Financement had

more than 408 employees operating from two locations in

the Paris region.

Outstanding consumer credit reached €3.4 billion at the

end of 2013.

Online broking

La Banque Postale has a wholly-owned subsidiary,

EasyBourse, providing online broking services for those

customers who want to manage their investment portfolio

transactions on their own. This subsidiary provides easy

access to foreign stock markets, a wide range of financial

instruments and products, deferred settlement services and

information via articles, special reports and interviews with

experts.

In October 2012, EasyBourse launched a mobile telephone

application, available on iPhone and Android, allowing

users to follow the Stock Exchange, manage their accounts

(positions, unrealised gains or losses, committed and

available cash, order book) and place orders.

Microcredit

La Banque Postale is a pioneer in the social microcredit

sector in France. In May 2007, the Social Cohesion Fund

approved the Bank’s application to be covered by the fund’s

guarantee. In this respect, La Banque Postale entered into

over 95 micro-loan agreements with regional associations.

It also participates in Espoir Banlieues, a specialised

support plan for young unemployed people in marginalised

areas, and has teamed up with Union nationale des centres

communaux d’action sociale. In 2012, La Banque Postale

entered the professional micro-loan market next to Adie,

an association known for public utility and a major player

in the micro-loan market in France.

Other business activities

The fund transfer business is another field in which it is

active, comprising two separate business activities: firstly,



the money order business, inherited from La Poste and

enabling international transfers within the Universal Postal

Union, and secondly, the Western Union transfers also

offered in post offices. In October 2013, Western Union and

La Banque Postale announced the renewal of their long-

term partnership that gives customers access to Western

Union's money transferring services in France.

La Banque Postale has also set up innovative partnerships

aimed at enhancing its offering for young customers (aged

between 18 and 29, or 1.2 million customers) through

innovative partnerships, and by supporting KissKiss

BankBank, a project fund-raising website.

Lastly, outside France, La Banque Postale Consultants, a

wholly-owned subsidiary, provides consulting services for

setting up a new post office banking offer.

Financially vulnerable customers

In addition to its mission of facilitating access to banking

services, La Banque Postale exercises a key role in

combating banking exclusion through day-to-day initiatives

promoting access to a large number of quality banking

services and supporting financially vulnerable customers.

In order to prevent over-indebtedness, since 2007,

La Banque Postale has offered a personal micro-loan offer

in partnership with local non-profit organizations (notably

the Secours catholique, UDAF, the French Red Cross,

Les Restaurants du Cœur, etc.) responsible for detecting

and supporting projects concerning people experiencing

banking exclusion from their weak solvency. In 2013, the

number of micro-loans granted rose 66% in relation to

2012.

Since June 2012, La Banque Postale also offers a

professional micro-loan product, in partnership with Adie.

The objective is to promote the creation of businesses by

persons excluded from the labour market without access

to banking credit.

La Banque Postale is also conducting experiments to

better serve its financially insecure customers and to

promote banking inclusion. Since its creation in 2006,

La Banque Postale has united with Union nationale des

centres communaux d’action sociale (National Union of

Social Action Community Centres—UNCCAS) to improve the

information, advice and positioning of people experiencing

banking exclusion. This partnership was expanded in 2010

with the REFLEX project (Réagir Ensemble et Fédérer la Lutte

contre l’Exclusion—React Together to Combat Exclusion) the

objective of which is to coordinate La Banque Postale and

CCAS's respective actions to help customers of La Banque

Postale rebound from their financially insecure position.

This experimentation was praised and recognised as an

example of best practices in measures to combat banking

and social exclusion (2012 Annual Convention of the

European Platform against Poverty and Social Exclusion in

December 2012).

The latest major innovation in providing support to

financially vulnerable customers: in November 2013,

La Banque Postale created a platform called "L’Appui",

providing banking advice and guidance accessible at the

customer's initiative through a unique abbreviated phone

number without a surcharge. The mission of this new

service is twofold: on the one hand, assist customers of

La Banque Postale experiencing exceptional or recurrent

financial difficulties and, on the other hand, contribute to

preventing situations of financial vulnerability.

The commitment of La Banque Postale is also exemplified

by its support of several educational projects of the IEFP

(Institut pour l’éducation financière du public), authorised by

the French national education system, destined to assist

persons acquire a basic knowledge about financial matters.

Finally, in October 2012, a think and action tank called

"The Initiative Against Banking Exclusion" was created to

unite the players involved with the social and associative

world who want to develop new initiatives against banking

and financial exclusion. As an open initiative, members of

this think tank currently include ATD Quart-Monde, ADIE,

Crésus, the French Red Cross, La Banque Postale, Emmaus

France, Habitat et Humanisme, Les Restos du Cœur, the

Secours catholique, the Secours populaire and UNCCASS.

High net-worth customers

La Banque Postale currently has more than 600,000 High

net-worth customers to whom it offers products and

services which now makes up a range:

investment solutions, notably discretionary management

service offered by La Banque Postale Gestion Privée and

inheritance funds offered by Tocqueville Finance and

La Banque Postale Structured Asset Management;

high-end life insurance (Cashmire, a multi-support

and multi-manager contract, Excelis, a contract with

arbitration delegation, and Toscane Vie;

premium means of payment (Visa Platinum Visa Infinite

cards);

tax optimisation solutions (Sofica, capital expenditure

managed by XAnge Private Equity, real estate investment

with La Banque Postale Immobilier Conseil, and Ciloger).



To serve its high net-worth customers, La Banque

Postale employs a dedicated team of 811 specialist asset

management advisors across France, plus a team of

77 wealth management advisors for customers with the

most assets.

The special ised asset management and wealth

management advisors are able to offer the full range

of La Banque Postale products, the UCITS range, life

insurance products, high-tech funds, REITs and real estate

funds.

For real estate projects, these advisors work with the

Group's advisors possessing specific expertise in this area.

The wealth advisors have also been able to rely on BPE,

La Banque Postale's new subsidiary, since 2 April 2013.

La Banque Postale acquired BPE from Crédit Mutuel Arkéa

on 2 April 2013. BPE has a robust asset management

platform and a range of financial products and services

combining loan and savings management offerings. With

this acquisition, La Banque Postale reinforced its service

offering to its high net-worth customers by proposing a

comprehensive range of products and services adapted to

their needs, from the simplest to the most complex. BPE

has brought almost 60,000 high net-worth customers to

La Banque Postale via this acquisition.

BPE is supported by a national network of 33 branch

offices established in major French cities, including

10 in the Greater Paris region, as well as one regional

office and three wealth management offices in Paris,

Aix-en-Provence and Lyon. Covering the entire country,

these branches and offices form a cross-section of

expertise hubs or local service platforms at the service of

La Banque Postale and its customers.

Finally, the wholly-owned subsidiary, La Banque Postale

Immobilier Conseil, proposes a real estate management to

complete the range of products and services to La Banque

Postale's high net-worth customers.

Corporate customers

La Banque Postale has an offering of credit solutions for the

complete range of legal entities.

La Banque Postale had 435,000 legal entity customers at the

end of 2013, from large corporations to small businesses

and the self-employed, and from small associations to big

housing associations who now benefit from an enlarged

offering: accounts, means of payment, investments, advice,

financing, insurance.

Rolled out in 2009 in metropolitan France, La Banque

Postale has established “Espaces Entreprises” (Business

Areas), which are fundamentally business centres designed

to support customers with professional advice. In addition to

these business areas, distributing financing offers to legal

entities can also be carried out through a multi-channel

agency in charge of guiding professionals and small

businesses and to begin loan file inquiries. Corporate

customers can also contact advisors in post offices to be

put in contact with the Multi-channel Agency.

Marketing the first financing offers to legal entity customers

(equipment leasing) began at the end of 2011, and for social

economy customers (advances on subsidies, authorised

overdrafts) at the beginning of 2012.

La Banque Postale has been offering financial leases and

lease purchase ranges to all its legal entity customers since

2012. The finance leasing offering has been available since

July 2012.

Furthermore, in 2013 La Banque Postale decided to

introduce a new factoring offering, through "Factor", a

factoring company that completes the range of financing

products destined for legal entities.

La Banque Postale also proposes support to customers in

the following four service areas:

fund flow management: La Banque Postale positions

itself as a specialist in handling substantial fund flows

either with respect to inflows (i.e. bank transfers, direct

debits or international money orders) or cash payments

(i.e. bank transfers and cheque payments);

cash management: the range of collective investments

(UCITS) offered by La Banque Postale is being expanded,

covering short term investment needs. The range is

designed to respond to customer demand and makes

it possible to address the specific needs of selected

customers, namely housing associations. Lastly,

La Banque Postale also offers tailored solutions to

its large corporate customers, in particular via term

deposits and issues of negotiable certificates of deposit.

This offering accounted for €1.7 billion in outstanding

deposits as at the end of 2013;

means of payment: the Visa Business card, reserved

for professionals, associations and corporations,

allows in particular for easier spending management

and better separation of personal and professional

expenses. In terms of investments, La Banque Postale

is also providing customers with an optional treasury

management system;



employee savings financial engineering solutions: this

activity is focused on putting in place employee savings

plans using specific products for each customer

segment. La Banque Postale now covers the full range of

financial engineering products for employees (luncheon

vouchers, CESUs [special employer cheque books], etc.).

Outstanding loans to associations and legal entities (€1.7

billion) were up 171% in relation to 2012.

La Banque Postale: a leader of the non-profit association market

Furthermore, La Banque Postale is one of the major players

in the non-profit market, with 300,000 small non-profit

organizations as customers, including 7,700 manager

associations, representing one third of the market.

La Banque Postale made available a community site

dedicated to non-profit organizations, www.assoandco.fr,

which takes a census of all the necessary information an

association needs on a daily basis and is designed to be an

exchange site and service platform intended for everyone.

Since the end of 2013, La Banque Postale has proposed

to its management association customers the possibility

to apply for real estate loans. This type of financing, which

was lacking in the product range, now allows management

associations to acquire new premises, renovate old

premises and carry out their building project.

La Banque Postale recently completed its offering for

associations and professionals by also launching dedicated

insurance products:

online property and casualty insurance products

for associations providing a range of basic coverage

solutions (civil liability for association related activities,

criminal defence and remedy, legal protection) as well

as optional coverage solutions adapted to the profile of

the association (occupying owner civil liability, personal

director's liability, personal accident, owner-occupier

property damage);

online property and casualty insurance dedicated to

office work operations and convenience stores.

In 2014, La Banque Postale will pursue this major

development priority, focusing notably on the social welfare

and healthcare sector.

Local authorities customers

La Banque Postale has been authorized to grant loans to

the local public sector since 25 May 2012. In this context, it

has developed a new local financing model through setting

up La Banque Postale Collectivités Locales, in which

La Banque Postale and Caisse des Dépôts have respective

interests of 65% and 35%, on 27 March 2013.

This new subsidiary provides simple and understandable

liquidity-backed products for customers, granted as part

of a transparent rate policy and a responsible approach to

advice and risk.

In order to respond to local authorities' short-term

financing needs, since June 2012, La Banque Postale has

offered a treasury line of credit usable by drawdowns (for a

maximum of 364 days).

La Banque Postale has also proposed since November 2012

a medium-long-term credit offering, enabling municipalities

to manage their investment projects by means of fixed or

floating rate loans over terms of up to 15 years.

La Banque Postale also enables municipalities to invest

their surplus cash through a complete range of collective

investment vehicles including those adapted to the specific

regulatory constraints imposed on municipalities.

Outstanding local authority loan balances amounted to

€2.2 billion at the end of 2013.

5.1.3.3.2 Insurance

The Insurance business line covers nearly 560 employees

who work in product development and customer relations.

It is present in both personal insurance (life and retirement

insurance, personal risk and health) and asset and liability

insurance (means of payment, home, auto, legal protection).

It is intended for private individuals, professionals and

organizations.

Life insurance (CNP Assurances)

Le Groupe La Banque Postale is a shareholder (at

20.15%) and markets on behalf of CNP Assurances Group

life insurance and capitalisation products. In 2013, it

represented 41.5% of the CNP Assurances Group's revenue.

These CNP products constitute the majority of those offered

by La Banque Postale for life insurance.

The offer is divided around the following contracts, in the

process of being marketed:

"Vivaccio" for retail customers; starting at €75, this life

insurance policy is designed to meet the specific needs

of customers at any age at the time of inception that

subsequently evolves with them;

"Cachemirea", a multi-fund and multi-manager policy,

for high net-worth customers;

"Satinium", a high-end discretionary management policy;

"Toscane Vie", a policy with a loyalty guarantee for

customers who pay French Wealth Tax.

Life insurance also consists of a complete range for

retirement preparation (Solésio range).



Contingency insurance (La Banque Postale Prévoyance)

La Banque Postale Prévoyance, set up in 1998 (under the

name Assurposte) is equally owned by La Banque Postale

and CNP Assurances. Its primary business activity is

developing individual and group personal risk products

adapted to La Banque Postale’s customers' needs.

La Banque Postale Prévoyance has developed a

comprehensive range of individual personal-risk products

providing all the coverage needed to face the vagaries of life

(death, long-term care, funeral, accident coverage, etc.) and

offers a wide range of services above and beyond financial

services.

The quality of its personal risk range was once again

recognised by the profession in 2013. In effect, the entire

range was distinguished by Les Dossiers de l’épargne:

Prévialys Accidents de la Vie received an Excellence Award

(the policy has received an award every year since 2004).

The commercial success of the range was confirmed in

2013, following additions to the cover in late 2012, including

Avisys Protection Famille (a policy that has received an

award every year since 2004), Protectys Autonomie (a

policy that has received an award every year since 2005),

Résolys Obsèques Prestations (a policy that has received

an award every year since 2004), and Sérénia (a policy

that was rewarded once again last year, as in 2012, after

only one year of marketing). Finally, the Résolys Obsèques

Financement, a burial insurance policy, has received the

"Avis Positif" distinction.

With more than 425,000 new policies at the end of 2013,

La Banque Postale Prévoyance ranks as the second

largest operator in the French market. Its growth has

also been driven by borrower-insurance policies, which

are subscribed at the time of a financing transaction with

La Banque Postale.

La Banque Postale's portfolio included 2.7 million contracts

at the end of 2013.

Health care (La Banque Postale Assurance Santé)

In 2010, to develop the health insurance activity and

capitalise on its growth potential, La Banque Postale

established a company in partnership with La Mutuelle

Générale, La Banque Postale Assurance Santé, in which it

holds a 65% interest.

La Banque Postale Assurance Santé has therefore been

providing a complementary health insurance offering

that is in line with its values and strategic choices since

December 2011. Customers now have access to the offering

of La Banque Postale both through face-to-face and online

channels, including through the 420 development officers of

the financial centres, and since mid-2013, at all post offices

following the important training plan for 17,000 employees

(advisors in post offices and financial centres).

The roll-out of health insurance products in La Banque

Postale's network is a true success, resulting in a sale of

more than 54,000 policies in 2013 with a net acceleration

since September.

The standard offer is made up of three targeted formulas,

each comprised of four levels of guarantees that each

customer can subscribe to according to his/her needs:

"Formule Solo" for people insuring themselves only, up

to 55 years of age;

"Formule Familles" for couples or families with children;

"Formule Senior" for people over 55.

In 2013, Senior and Solo received the "Avis Positif" distinction

granted by Les Dossiers de l’épargne.

In 2014, new products and services will be added to

complete the traditional supplementary health insurance

offering and provide an expanded range in response to the

emergence of new needs.

Property and liability insurance

La Banque Postale proposes a range of personal line

property and casualty insurance products through its

subsidiary, La Banque Postale Assurances IARD (65%-held

by La Banque Postale and 35%-held by Groupama). The

first offerings were organised around automobile, multi-

risk household and legal protection insurance distributed

through remote (phone and online) channels starting in

December 2010, and gradually extended thereafter to all

other distribution channels.

This multi-channel approach (phone, online and post

offices) allows customers to choose the type of relation

they prefer.

At the end of December 2013, La Banque Postale IARD's

portfolio exceeded the threshold of 863,000 policies.

Following the Argus d'or de l'Assurance award in April

2013, La Banque Postale Assurances IARD was granted

three new awards for providing an option for insureds

to use the Digishoot application for auto or household

insurance claims, in partnership with Digiposte. Awarded by

insurance industry professionals, these awards recognise

the continuing search for simple and innovative solutions

destined to facilitate our customers' life.



La Banque Postale Assurances IARD also won the Palme

de l’innovation award in 2013 in the "Customer Experience"

category in the Palmes de la relation client series, as well as

the Top Com d’argent award in the Digital category.

Furthermore, La Banque Postale Conseil en Assurances,

a wholly-owned subsidiary of La Banque Postale, designs

and proposes "turnkey" insurance, assistance and service

offerings for the different divisions and subsidiaries of

La Banque Postale and, more generally, Le Groupe La Poste

as a whole.

These offerings in particular relate to current accounts

(insurance for Alliatys means of payment subscribed by

6.7 million customers), bank cards (7.47 million), telephone

devices, savings products, credit products of all kinds for

retail customers as well as professionals, associations,

companies and social housing operators.

5.1.3.3.3 Asset Management

The Asset Management activities cover the Group's third-

party asset management companies and propose in this

way expertise that allows La Banque Postale to offer private

individual and legal entity customers a complete range of

savings and investment products covering both traditional

financial markets in addition to specific asset classes.

The third-party asset management subsidiaries have

a combined staff of 323 people working on product

development and customer relations.

At the end of 2013, assets under management amounted to

€149 billion, up 4% from 2012.

Since August 2013, when La Banque Postale Gestion Privée

signed them, all the asset management subsidiaries have

now formally committed to comply with Responsible

Investment Principles, demonstrating their determination

to implement a responsible management process in

accordance with the Group's values. In the investment area,

an SRI Investment Selection Committee, which includes

the subsidiaries involved, enables the sharing of reports,

thereby providing pooled research to the management

companies.

Multi-expertise investments (La Banque Postale Asset Management)

La Banque Postale Asset Management (LBPAM), is the fifth

largest French asset management company in terms of

assets under management and a wholly-owned subsidiary,

which specializes in the management of benchmarked

UCITS within the unit and operates on the main financial

markets. LBPAM has developed a full range of UCITS, in

order to meet the requirements of retail banking customers,

and a range that is more specifically intended for legal

entity customers (mutual companies, pension funds and

insurance companies, etc.). In fact, LBPAM was one of the

first management companies to launch a debt fund with

infrastructure and real estate sub-funds. As a recognized

operator in the debt and insurance management sector,

LBPAM takes part in a large number of institutional tenders

for delegated or discretionary management services

Finally, La Banque Postale proposes a large range of

SRI UCITS destined for both private individuals and legal

entities. The generalisation of the integration of ESG criteria

in all asset classes under management has furthermore

been continued in 2013.

La Banque Postale also operates in the employee savings

sector through the open-ended or dedicated employee

savings vehicle (FCPE) managed by LBPAM.

LBPAM also manages a range of savings products that

covers the main asset classes, including:

UCITS euro money market funds to manage their cash

assets;

UCITS bond funds invested in government and corporate

bonds. If these UCITS are invested mainly in the euro

zone, the range also includes international bond funds

hedged against exchange rate risks;

diversified UCITS funds to take advantage of asset

allocations strategies of experts within the framework

of benchmarked management or flexible management

seeking to achieve absolute performance. The range

of diversified funds includes UCITS invested directly in

securities, in "in-house" UCITS or in multi-management

funds, through specialists selecting external funds;

UCITS equity funds covering all major geographic

regions: France, Euro, Europe, North America, Asia

Pacific;

thematic non-listed REIT covering a specific sector:

healthcare, financials, or telecoms;

debt funds with infrastructure and real estate sub-funds;

fully or partially capital guaranteed structured UCITS

managed by La Banque Postale Structured Asset

Management, a 99.99%-held subsidiary of LBPAM.

Discretionary management (La Banque Postale Gestion Privée)

To better serve the Group's high net-worth customers,

La Banque Postale proposes a range of asset management

services adapted to different profiles from the most cautious

to the most dynamic, and that may be exercised within

the framework of life insurance, equity savings plans

or securities accounts. These discretionary mandates,

managed by La Banque Postale Gestion Privée (LBPGP),

provide access to the expertise of financial market



professionals. These professionals select investment

vehicles from a large choice of financial products: direct

purchases of equities or through UCITS managed by Group

management companies or top-tier external management

companies.

Equity management (Tocqueville Finance)

La Banque Postale also proposes to its customers UCITS

of Tocqueville Finance, a 92.5%-held subsidiary. This

subsidiary is very well-established with financial investment

advisors, independent asset management advisors,

private and institutional banks. Specialised in equities

management, it invests with the objective of supporting the

development of companies over the long term by applying

a conviction-driven management approach, independently

of market indexes.

In conjunction with this offering, Tocqueville Finance also

manages discretionary mandates for a specific high net-

worth customer segment that does not necessarily have

banking relations with La Banque Postale.

Open-ended property funds (OPCI) and real estate investment partnerships (SPCI)—Ciloger

La Banque Postale offers its customer diversification or

tax optimization solutions via the range of OPCI and SCPI

managed by Ciloger, a subsidiary in which La Banque

Postale, Nexity and CNP Assurance have respective

interests of 45%, 45% and 10%. It specifically distributed

the first “Duflot” SCPI in 2013.

There are also products destined for legal entities:

companies, institutions (mutual companies, pension funds

and insurance companies, etc.), by offering them a range

of real estate investment mutual funds with simplified

operating rules (OPCI RFA) in order to meet these

customers’ requirements and constraints.

Private Equity (XAnge Private Equity)

In addition, La Banque Postale proposes a range of

mutual funds providing opportunities to invest in fast-

growing innovative companies, notably in the technology

and information sectors. These funds are managed by

the subsidiary XAnge Private Equity, 90%-held by SF2-

La Banque Postale. With branches in Paris, Munich and

Lyon, it has a team of 14 experienced investors, responsible

for monitoring and directing their 65 equity investments.

XAnge Private Equity continued in 2013 its strategy of

acquiring new institutional customers through two new

funds: for FCPR XAnge Capital 2 (a venture capital fund) and

also for FCPR XPansion 2 (specialised in growth capital).

5.1.3.4 Strategy and outlook

5.1.3.4.1 La Banque Postale: a young

full-service bank operating in an important

competitive environment

The progress made over the past few years by La Banque

Postale has made it a major player in the French retail

banking market, often ranked among the leading banks in

terms of customer satisfaction. La Banque Postale has also

been able to reconcile its commercial development with its

banking accessibility mission, in particular by means of

the support provided to financially insecure customers.

This success has been achieved in a highly competitive

market that includes very powerful operators. Through its

specific characteristics and unique business model original,

La Banque Postale has been able to establish its position in

this environment and today occupies an important place in

the French banking landscape.

Beyond these successes, La Banque Postale also has

significant growth potential in terms of future customer

penetration and the acquisition of new customer segments

including private individuals, companies and the local public

sector.

Turning this potential into a reality remains a challenge

for all at La Banque Postale that must be combined with

ongoing efforts to control operating costs, a prerequisite

for achieving a high level of competitiveness in line with

the bank's strategic objectives. Over the 2005-2013 period,

La Banque Postale saw the number of active customers rise

by nearly 15% to 10.7 million by the end of 2013, in line with

targets. This development was accompanied by significant

growth in the real estate loan sector, where the loan balance

over the period between 2008 and 2013 increased by 100%,

reaching a market share of 5.3% in terms of loan balances

in 2013.

La Banque Postale, over the recent period, has made

unprecedented enhancements to its offerings for all

customer segments: consumer credit (La Banque Postale

Financement), property insurance (La Banque Postale

Assurances IARD), health insurance (La Banque Postale

Assurance-Santé), discretionary asset management

(La Banque Postale Gestion Privée), as well as loans to

legal entities (La Banque Postale Crédit Entreprises),

municipal lending (La Banque Postale Collectivités Locales)

and offerings destined for high net-worth customers

(BPE) supported by its important distribution network and

partnerships.



La Banque Postale has also become a leading banking and

insurance provider, and has recorded ongoing strong growth

in its life insurance assets (life-insurance assets increased

by over 36% between 2007 and 2013), and in the penetration

of personal risk insurance among its customers. It is thus

positioned as the number two French bank insurance

provider in the personal risk business.

La Banque Postale, which has made life insurance one

of its core businesses, relies on its partnership with CNP

Assurances in this area. La Banque Postale currently holds

20.15% of CNP Assurances, France's leading personal

insurer, backed by 150 years of experience, with revenue

of €27.7 billion in 2013. La Banque Postale will play an

active role in renegotiating the commercial agreement and

shareholder agreement that bind it to CNP Assurances,

which are set to expire at the end of 2015.

5.1.3.4.2 Strengthening the Group’s

operations in the retail, corporate and local

authority market

La Banque Postale must respond to the challenges

arising from a constantly changing environment, whether

stemming from the economic and financial context,

customer behaviour patterns, or the competitive French

banking landscape that has significantly refocused on retail

banking.

La Banque Postale will boost its operations on the retail

market via several development priorities:

by offering appropriate solutions to marginalized

customers, and by ensuring the funding of La Banque

Postale's general interest remit;

by rounding out the range offers to high-potential

customers (in banking & insurance, and wealth

management);

by continuing to improve the effectiveness of the Retail

Brand Bank and of the financial centres.

Young customers will specifically be a major and key

development priority for La Banque Postale over the coming

years, as this market offers a high potential and a large

number of growth opportunities. The commercial terms of

the offerings, and customer relations will be the weapons

to attract and retain the loyalty of this demanding customer

base.

The corporate market will also be a priority over the coming

years. It will involve the implementation of structural

projects via a targeted and controlled expansion in the

corporate and not-for-profit organization market.

La Banque Postale wants to offer a new local financing

model, based on simple and understandable products

for customers, liquidity backed and granted as part of a

transparent rate policy and a responsible approach to advice

and risk. This model led to the creation on 27 March 2013

of La Banque Postale Collectivités Locales, 65%-held by

La Banque Postale and 35%-held by Caisse des Dépôts.

One year after it began granting loans to local authorities,

La Banque Postale has now captured 15% of the market for

this customer segment. Over the coming years, La Banque

Postale will continue and strengthen the initiatives that are

already underway for local authorities, despite a stretched

competitive environment, by broadening its offering together

with Caisse des Dépôts.

5.1.3.4.3 Developing the "digital" bank

The users of La Banque Postale's online services are a

strategic customer base. 41% of active customers currently

use the online services, and over 80% of the service users

are customers for whom La Banque Postale is their "Main

Bank".

The development priorities for this "digital" strategy are as

follows:

making digital technologies serve commercial

development;

simplifying the interoperability between the channels;

adding the know-how of Le Groupe La Poste to the online

services;

developing the attractiveness, visibility and prioritization

of the "La Banque Postale" brand;

developing new ways of running a bank by taking

advantage of digital ecosystems;

Developing the digital bank is therefore a major requirement

and challenge for the coming years, and La Banque Postale

has to be at the cutting-edge of market developments.

5.1.3.4.4 Maintaining a strong relationship

between La Banque Postale and Le Groupe

La Poste

To support this strong relationship, Le Groupe La Poste and

La Banque Postale maintain strong relations. In November

2013, the Board of Directors of Le Groupe La Poste

authorized an increase of over €1 billion in La Banque

Postale's prudential equity capital.



This strengthening consists in a capital increase via the

contribution of La Banque Postale’s head office (1), valued

at €228 million, together with a hybrid subordinated Tier 1

issue amounting to €800 million, which was entirely

subscribed by Le Groupe La Poste. The principle of both

transactions had been decided at La Poste Board of

Directors’ meeting last 4 July.

Through this contribution, Le Groupe La Poste has

strengthened the commercial development of its bank and

its multi-business approach. This transaction represents

a major step towards consolidating the Bank's financial

structure and solvency, in accordance with the strategy

aimed at developing its lending businesses.

Over the coming years, the Bank and La Poste will

continue to maintain a strong and close relationship, in

order to create optimal synergies and support the Group's

development.

5.1.3.4.5 A new development strategy:

the professional market

In 2014 and over the coming years, La Banque Postale will

increase its operations with the professional customer

base by rolling out a sales force in post offices throughout

France.

The professional market is currently dominated by leading

banking groups, so La Banque Postale will position itself as

a challenger. This market represents a local customer base

that uses the post offices and is well represented among the

Group’s business assets.

This means that professionals represent an area with strong

growth potential for La Banque Postale. In this context,

dedicated sales persons will be sent to large post offices in

2014. The roll-out of this model will enable improvements

in the customer contact area, and will enable advisors to

be closer to their customers and to capitalize on the post

offices' local advantage.

5.1.4 La Poste Retail Brand: the distribution of products and services of the Group’s Business Lines to private individuals and professionals

5.1.4.1 La Poste Retail Brand: the strength of a multi-activity business model

2013 2012 2013/2012 change


Revenue 4,230 4,231 -1 0.0%

Operating expenses (4,196) (4,215) +19 -0.4%

Operating profit 34 16 +17 n.s.

As the distribution network of Le Groupe La Poste Business

Lines for retail and professional customers (1), La Poste

Retail Brand represents the Group’s multi-business

operating structure. It is both a symbol of local postal

coverage and a point of contact between the public and

La Poste’s Business Lines.

Its accessibility represents one of the network’s strengths:

96% of the French population live less than five km away

from a postal service outlet. Its founding mission is to

welcome, serve and advise the customers of La Poste and

of its Business Lines, with three specific goals:

ensure the practical implementation of three of the four

public service missions assigned to La Poste (Universal

Service, regional planning and development, and banking

accessibility—see Chapter 5, Section 5.3);

(1) "Professionals" refers to any person supplying goods or services (e.g. industrial, commercial, cottage industry, freelance, agricultural or others). This

customer base is primarily comprised of local shopkeepers, small traders, freelancers, etc. who are offered cards that give them special access to

La Poste Retail Brand services.



implement the commercial policies of the three

Le Groupe La Poste Business Lines;

achieve a value creating level of performance for the

Group and its Business Lines, by means of multi-channel

development and process optimisation.

5.1.4.1.1 Original features

A network indispensable both for the functioning of the Group and French society

La Poste Retail Brand is a multi-business and multi-

channel distribution network vital to the Group and to

French society's functioning. In 2013, 85% of the French

population stated that they had visited their post office

at least once to carry out postal or banking transactions,

either with an agent or via an automated postal service

machine or ATM (1).

An original model in Europe

The Retail Brand offers a multi-activity business model that

is unique in Europe. The models employed in most other

European countries have typically resulted in downsizing

the post office network.

A multi-business strategic positioning

The Retail Brand model allows the Business Lines to

share the cost of a commercial organization that offers

accessibility to a vast number of people, while ensuring

the sustainability of a network that is both extensive and

efficient. In addition, the resulting environment favours the

mutual development of their activities.

The Retail Brand’s multi-business strategic positioning is

designed to ensure that the distribution network remains

financially sound.

La Poste Retail Brand accounted for 18.0% of the parent's

Mail revenue, 27.4% of ColiPoste’s revenue, 9.7% of

Chronopost’s revenue, and for 96.7% of La Poste Mobile’s

sales. It held 6.9 million banking advice appointments, while

representing 69.1% of consumer loans, 89.3% of home

loans, and 100% of net collection for private individuals at

31 December 2013.

Relations between the Retail Brand and the Business

Lines are set out in a series of contractual provisions

governing relations within Le Groupe La Poste with respect

to the services to be provided and the related corporate

governance arrangements. As part of this, the Retail Brand

invoices its services to the Business Lines and Group

subsidiaries (including all or part of certain services), based

on the cost of the resources employed.

5.1.4.1.2 Network structure

La Poste has 17,081 public outlets throughout France,

57.9% of which are in rural municipalities (2).

Postal service coverage meets the populat ion’s

requirements, and La Poste consults elected officials within

the framework of the national and departmental governance

bodies set up through a local postal coverage agreement. A

new postal coverage agreement for the period between 2014

and 2016 was signed on 16 January 2014 by La Poste, the

French government, and the French Mayors’ Association.

Types of public outlets

To successfully change its local postal coverage and

continually adapt its structure to its customers’ lifestyles,

the Retail Brand has gradually built up and expanded

a network comprising two types of public outlets: firstly,

directly-managed post offices and, secondly, retail outlets

managed in partnership.

In each region, the post offices ensure access to the full

range of products and services. Partnerships are entered

into with the agreement of local elected representatives

and consist of entrusting the provision of its most common

services to third-party public authorities (municipalities or

groupings), in the case of Local Postal Agencies, or private

operators (shopkeepers), in the case of Relais Poste outlets.

Furthermore, retail customers have access to postal

services at over 24,500 newsagents and large retailers

(5,000 stores), which offer Mail products (stamps and

stamped envelopes), pre-paid envelopes, and Colissimo

and Chronopost services.

Directly-managed post offices

There were 9,692 post offices at 31 December 2013; these

are the physical showcase for Le Groupe La Poste's

integrated services, and are intended for all retail and

professional segments. Marketing all services, they propose

the broadest range of Group products and serve as support

points for the development of new services. They offer:

Banking services: standard counter transactions,

personalised banking advice, property and casualty

insurance products, consumer credit, etc.;

Mail services: purchase of pre-paid envelopes, delivery of

Green Mail, postage, mail pick-up, mail forwarding, etc.;

Parcels services: sale, drop-off and pick-up, etc.;

Telephone services.

(1) Customer satisfaction survey: BVA phone survey and IPSOS post office exit interviews.(1) Customer satisfaction survey: BVA phone survey and IPSOS post office exit interviews.

(2) As defined by INSEE 1999



The post offices are the main point of contact for local

partners: they provide them with training and information

as well as coordination and support.

To better adapt to customer needs and transition from

a uniform counter-based standard of service to a multi-

channel model based on customised service, the Retail

Brand put in place a major plan to transform post offices

into welcoming, modern, customer-oriented service areas.

The post-office "Customer Service Area" concept has been

in use since 2009. The priority roll-out of this concept began

in 2009 with the 1,000 largest post offices: 1,659 post offices

had adopted this format at the end of 2013 (1,472 at the

end of 2012). This Customer Service Area format offers the

customer a unified commercial area combining:

a banking area with the banking desk for drop-

in transactions and financial advisor offices for

appointments;

a sales area with ATMs, self-service products, the

professional welcome desk, the mail drop-off/pick-up

desk, the payment desk, the traditional counter, etc.

A colour coded design makes it possible to distinguish the

banking area (blue) from the postal service area (yellow for

mail and parcel service areas).

The modernisation of offices seeks to further increase

customer satisfaction, improve sales performances and

reduce one of the principal sources of customer irritation:

the waiting experience and how it is perceived. The

average time taken across all offices to gain access to a

counter (all transactions) was reduced from seven minutes

and 19 seconds in November 2009 to four minutes and

25 seconds in 2013. Meanwhile, the average time taken

to gain access to services (all counter and non-counter

transactions) amounted to three minutes and 58 seconds

in 2013.

Overall customer satisfaction remained stable in 2013

at a level that was very satisfactory compared to other

distribution networks. Based on surveys conducted over

the last six months, nearly nine customers out of 10 (89%)

state that they are satisfied with their post office. This

score increases to 95% when customers are surveyed

when leaving post offices, immediately following their

experience (1).

Retail outlets managed in partnership

Retail outlets managed in partnership are made up of Local

Postal Agencies (APC) and Relais Poste outlets (RP).

The number of public outlets under partnership increased

by 138 in 2013, which brought the number of partnerships

to 7,360 (2) at 31 December 2013, as part of a network that

includes 17,052 public outlets (3) serving customers.

These partnerships received a very warm welcome due

in particular to the longer opening hours. In addition, the

RPs, like the APCs, help deepen the relationship with the

inhabitants of small municipalities, retain the last shop and

the attractiveness of the municipality for new inhabitants.

In March 2012, the results of the National Partnership

Survey (4) showed that these partnerships are a "good thing"

for 93% of the population, 83% of elected officials and 86%

of retailers. And for more than 90% of elected officials, the

presence of the APC and RP contribute to maintaining the

public service in rural municipalities. APC and RP are very

well known among the population (79%). 89% of elected

officials and 93% of retailers would recommend their

peers to welcome a partnership. In terms of satisfaction,

partnerships satisfy the different parties involved (91%).

Local Postal Agencies

The 5,326 Local Postal Agencies (at the end of 2013) offer

almost all the services provided by post offices, including

mail (postage, registered letters, and mail holding,

etc.), and parcels (sale of packaging materials, drop-

off, and collection, etc.), as well as a stop-gap financial

troubleshooting offering (cash withdrawals of up to €350

per week for postal bank accounts and Livret A passbook

savings accounts, and payment of postal money orders,

up to a limit of €350 per transaction). The APCs are

compensated for the resources employed.

The APCs are managed by territorial staff, employed by the

municipality or grouping of municipalities that have signed

the agreement with La Poste. In this respect, they come

under local public sector management rules. La Poste’s

contact is the Mayor (or the President of the grouping of

municipalities) who represents the municipality and acts

as employer.

(1) Customer satisfaction survey: BVA phone survey and Ipsos post office exit interviews.

(2) Excluding the 14 Postal Agencies in Andorra and Monaco, but including two other partnerships (Postal Agencies not included under the agreement,

and others).

(3) Excluding the 29 speciality public outlets.

(4) This barometer is based on a TNS Sofres study conducted on a representative sample of 800 inhabitants of communities with an APC or an RP, 500 city

Mayors and 150 retailers managing an RP.



The framework agreement covering Local Postal

Agencies (APCs) between La Poste and the French Mayors

Association (AMF) sets out the legal framework under which

municipalities and groupings of municipalities can take on

the local postal coverage public service mission.

Relais Poste outlets

La Poste enters into an agreement with a shopkeeper

or trader to provide, in its name and on its behalf, postal

services and basic financial troubleshooting services

(cash withdrawals of up to €150 per week by holders of

CCP (postal bank accounts) and Livret A passbook savings

accounts) in consideration for which they receive a fixed fee

and transaction commissions on business activities. There

were 2,032 Relais Poste outlets at the end of 2013.

The shopkeepers and traders responsible for Relais

Poste outlets are chosen in consultation with the Mayor.

They are selected according to practical criteria which

will facilitate the implementation of the project (hours,

image, layout, location, etc.). They can be independent or

tied to a distribution network, even franchises of a brand.

The Relais Poste outlet partnership format, launched

in 2003, was reviewed in June 2005 with the Assembly

of French Chambers of Commerce and Industry, the

Permanent Assembly of Chambers of Trades (Assemblée

permanente des Chambres de Metiers) and the union of

French tobacconists (Confédération des débitants de tabac

de France).

Geographic accessibility of public outlets

La Poste Retail Brand operates through 6,941 public outlets

in urban areas (1), 5,956 of these outlets are post offices and

985 are Local Postal Agency or Relais Poste outlets. 870 post

offices are located in underprivileged urban areas or serve

one: these offices, 270 of which rank among the 1,000 largest

post offices, account for 16.3% of business volumes.

The Retail Brand operates through 10,111 public outlets

(3,736 post offices and 6,375 partnerships) in rural

areas (2) (as defined by INSEE—French National Institute of

Economic and Statistical Information). The number of public

outlets in rural revitalization areas or mountain areas is

5,215 (1,858 post offices and 3,357 partnerships).

Relational accessibility

In addition to the physical network and its accessibility in

geographic terms, the friendly nature of its staff who are

in direct contact with customers on an ongoing basis also

represents the strength of the Retail Brand’s network.

Postal workers are committed to welcoming customers and

providing them with a high quality of service every day and

are actively involved in implementing change.

La Poste Retail Brand employs almost 56,000 staff, over

85% of whom work in post offices. Counter clerks account

for around two-thirds of those agents, while banking

advisors account for almost 20%.

The three main functions are:

counter clerks: the customer’s first point of contact, they

are responsible for the friendliness of the welcome and

for providing customers with the products and services

that best suit them from the range offered by the Retail

Brand. In order to ensure customer satisfaction, the

collective skill-sets of a team of counter clerks are built

around flexibility and specialisation of some (dealing with

professional customers, banking products and services,

mobile telephone services offer, etc.);

banking advisors: responsible for the development of a

long-term customer relationship within a multi-channel

structure, they provide customers with personalised

advice, and offer La Banque Postale products and

services that truly meet their needs. The various advisor

profiles make it possible to cover the particular needs of

all La Banque Postale’s existing and potential customer

segments. In response to changes in the retail banking

sector, the Retail Brand Financial Services Department

and Executive Management have decided to step up

commercial development and to implement a distribution

strategy that adapts to new customer behaviours. A staff

agreement dated 5 September 2011 falls within this

framework and focuses on the work environment and

career development;

branch manager: responsible for a post office or a

network of public outlets (i.e. post offices, Local Postal

Agencies and Relais Poste outlets), they manage

their team of counter clerks, bank advisors and local

supervisors in such a way so as to ensure customer

satisfaction, quality of service, sales performance,

financial performance and risk control.

Physical access

The Group has a plan for making its premises open to the

public, including post offices, accessible: at the end of 2013,

77% of directly-owned locations and 49% of leased locations

were accessible to persons with reduced mobility (PRM).

La Poste Retail Brand has incorporated CSR concerns

(accessibility, eco-designed materials, lowering the energy

consumption of lighting and IT equipment, and providing

access to everyone) in its initiative to redesign the post office

network.

(1) Excluding French overseas departments.

(2) Including all public outlets in French overseas departments.



5.1.4.1.5 Strategy and outlook

La Poste Retail Brand is now the largest integrated service

distribution and public service network in France, with over

17,000 outlets spread throughout the country. It is also very

often the only network involved in a business activity in

urban and rural areas from which some business operators

have withdrawn.

Through the commitment of post office staff, the Retail

Brand occupies a critical role as a provider of local services,

notably by implementing three of the four public service

missions assigned by the French government to La Poste

through the Business Contract.

A new strategic project: "Excellence & Development"

Since the environment in which the Retail Brand operates

is undergoing rapid change (evolving expectations and

customer behaviour, the digital revolution, the economic

and financial crisis), in 2013, it decided to accelerate its

transformation. This initiative involves its development

through a new strategic project, "Excellence and

Development" in line with Le Groupe La Poste's strategic

plan. Its objectives are clear: to become the leading local

service network.

Striving for excellence in quality of service and customer relations

Over the past few years, the Retail Brand, which is

bolstered by solid foundations and the service culture of

its employees, has been conducting an initiative aimed at

improving service quality (reception, accessibility, efficiency

of the service, and quality of advice) that now enables it to

benefit from a marked improvement of customer service,

and to aim to satisfy 95% of its customers by 2018.

Simplifying the customer experience and product ranges and developing value-added offerings

The Retail Brand is pursuing the development of service

innovations in synergy with Group Business Lines (Mail,

Parcels, La Banque Postale, Telephone services), seeking

to optimise the potential of each and develop high value-

added offer generating services, by shifting low value-added

activities to automated machines. It maintains a customer-

centric focus to identify changes in their expectations in

terms of services and offerings. Highlighting this approach,

in November 2013, the Retail Brand launched a pilot 3-D

printing service for private individuals and professionals

in three offices in the Paris region. The Retail Brand also

markets the value-added offerings of La Poste Mobile

(quadruple play, packages). Since April 2013, La Poste

Mobile proposes a broadband offering based on the SFR

Internet box and, since September, a new package for less

than €20 including a smartphone.

To address the needs of its customers, the Retail Brand's

plan is that all post office offerings contribute to simplifying

their lives, starting with the number of references in the

product ranges, rendering them more understandable and

easier for post office staff to present. This simplification

requires that certain processes and customer itineraries

be rethought via facilitating service access by expanding the

multi-channel dimension.

Post office retrofitting includes reducing the workload on

counters to allow counter clerks and advisors to focus on

transactions that call on their expertise and enable them to

offer personalised service.

The shortening of lines will be achieved by transferring

basic transactions to alternative self-service channels

(increasing the use of automated postal and banking

machines), modernising stands and self-service sales.

To support its strategy of moving low value-added

transactions to ATMs, the Retail Brand relies on around

20,900 automated machines, including:

5,673 “Mail & Parcels” ATMs (postage and stamp

dispensers);

15,226 banking ATMs (cash dispensers, coin change

machines, cheque deposit boxes, check scanners, and

automated cheque deposit machines).

Adapting the network: differentiating office layouts through customer adaptations and strengthening accessibility

The Retail Brand is adapting its organization to the

new lifestyle and consumer practices of its customers,

particularly professionals. Adapting hours of operation,

diversifying forms of access to products and services,

changes to layouts for rural (Postal Agencies and Relais

Poste outlets) and urban areas, integrating the digital

dimension in offerings and in the use of the network (notably

through Internet with the website www.laposte.fr) are part

of these innovation and adaptation initiatives designed to

strengthen the accessibility of the network.

For La Poste services intended for professionals, access is

facilitated by the establishment of a dedicated area in post

offices, a phone number (3634) and a “my post office” (mon

bureau de poste) website.



The Retail Brand continues to develop its network of partner

public outlets in order to:

ensure the sustainability of the rural network, within the

framework of a constructive relationship with the local

population and their elected representatives;

cut network operating costs by transforming under-used

post offices into Local Postal Agencies or Relais Poste

outlets;

play a part in providing services that are high-quality,

accessible and tailored to the location and customer

lifestyles.

The Charter on local dialogue provides a clear framework

for consultations on restructuring local postal coverage.

New post office layouts, adapted to the needs of customer

segments, will contribute to increasing the commercial

attractiveness of the network. This objective remains

consistent with transformations already in progress. The

brick-and-mortar network will also be supplemented

by digital and remote channels, via which an increasing

number of transactions will be generated and carried out.

Within Le Groupe La Poste, the Retail Brand is getting ready

to develop its multi-channel dimension necessary to meet

its strategic objectives.

Finally, the evolution of the network depends on the

affirmation of its banking dimension. In this way, the counter

clerk becomes a full-fledged contributor to commercial

banking relations. After the customer welcoming process

and quality of service, integrating counter clerks into the

banking process helps reinforce synergies between advisory

and counter service functions. In this way, the counter clerk

position is enriched by developing accessibility to offerings

and banking services while maintaining a local banking

service in the offices that do not have advisors. This trend

makes it possible to handle all customer requests thanks to

the modernisation of tools made available to staff.

La Banque Postale and the Retail Brand have also decided

to make organizational changes in 2013. Accordingly, the

25 regional commercial banking directors responsible for

coordinating commercial banking activities, now report to

Executive Directors of the Retail Brand. The objective of this

new organization is to shorten distances between teams to

accelerate commercial development.

5.1.4.2 La Poste Mobile

5.1.4.2.1 General information

La Poste, which for the last ten years has proposed a pre-

paid mobile telephone services offer in its post offices, has

expanded this offering to supplementary products and

services.

La Poste Telecom, a joint venture 51% owned by Le Groupe

La Poste and 49% by the operator SFR, was therefore

launched in 2011 under the brand La Poste Mobile. This

constitutes what is referred to as a virtual mobile operator

or MVNO (Mobile Virtual Network Operator): not having

its own network, it uses the network of the host operator,

SFR (see Section 5.3.1.4). SFR contributes its knowledge

in exchange for access to the Retail Brand’s distribution

network.

The development of a mobile telephone services business

under the La Poste Mobile brand falls within the scope

of initiatives seeking to find additional revenue streams

in markets offering potential synergies with the Group’s

traditional Business Lines.

Since May 2011, La Poste Mobile offers a complete mobile

telephone services range, SIM-only or contract plans, with

or without mobile phones and prepaid plans.

5.1.4.2.2 Market and offers

The mobile telephone services market in France

The mobile telephone services market had 70 million active

customers as at the third quarter of 2013, i.e. a penetration

rate of 110.8% of the population (1). The market is growing,

with a customer base increasing by close to 3,632,000

customers as at the third quarter of 2013, i.e. a net growth

of +5.5% year on year.

With close to 7.9 million subscribers as at the third quarter

of 2013, the MVNO market share reached 10.8% in the

overall market (13% in the residential market).

(1) Source Arcep: Observatory of electronic communications markets - third quarter 2013 and 2012.



Market trends

Several factors are causing the mobile telephone services

market to rapidly change:

The first involves the change in usage. The smartphone

has become a full-fledged multimedia hub for personal

communications. Boosted by broadband mobile, in

addition to handling “conventional” telephone calls/

SMS/MMS, it offers access to emails, the Internet, social

networks, music, videos, games while offering a high

degree of personalisation in terms of continuity of use.

The consequence has been the widespread adoption of

“unlimited” voice, data and messaging offers.

The second effect is linked to the significant drop in market

rates triggered by the arrival of France’s fourth operator in

2012. In 2013, all market players ended up adjusting their

prices as a result.

The third factor concerns the success of SIM-only

contracts (without phones) and pay-as-you-go plans. The

subscription of a contract plan is increasingly independent

of the purchase of a phone. These SIM-only contracts,

which are easy to market through distance selling, have

been accompanied by an evolution in distribution channels.

Direct marketing on the web has increased in consequence.

This trend has been accompanied by the development of

low-cost offerings (less than five euros per month).

Lastly, the first 4G offerings were launched at the end

of 2013.

La Poste Mobile offering

The distinguishing feature of La Poste Mobile is its

extremely vast territorial network. La Poste Mobile is

capitalising on a positioning based on customer proximity,

via a physical network of close to 10,000 post offices. All

offerings and mobile devices are accessible for customers

in all post offices, either immediately or in under 48 hours

with direct delivery to their home. In addition to the post

offices, products and services are also offered on the

Internet at www.lapostemobile.fr and by phone (multi-

channel distribution).

In 2013, in order to adapt to market changes, the range

of plans was renewed and simplified. In March, La Poste

Mobile launched SIM-only pay-as-you-go offering without

a mobile phone at a very competitive price. The entry

level plan for this range was €3.90 per month, including

two hours of calls and unlimited SMS and met with a

very positive response. In September, a new plan for

less than €20 per month offering “unlimited” voice, data

and messaging, including a smartphone, was launched

on the market. This contract plan, which is particularly

competitive, also met with a very positive response.

Since April 2013, La Poste Mobile proposes an ADSL

offering on the SFR modem router units. Discounts are

offered for customers subscribing to both a mobile contract

and ADSL access.

This strategy enabled to service 613,000 new customers in

2013. Net sales (after cancellations) amounted to 299,000.

The customer base grew by 47% to 943,000 customers at

the end of 2013. Revenue for 2013 came to €148 million.

Quality of service and advice remain vital priorities. The post

office-based customer service reached a level of service

quality that is recognised by customers. According to the

surveys conducted among La Poste Mobile customers, 97%

confirmed that they were satisfied or very satisfied with the

advice and service received at the post office and one out of

two have already recommended products and services to

friends and family. Two-thirds of the clients have said that

signing up to a contract or amending an existing contract

required “no effort at all” or “minimal effort”, which testifies

to the constant improvement of processes. La Poste Mobile

is one of the operators that customers trust the most,

ranking a score of 8.2 (1) on this criteria.

Today, the legitimacy of La Poste Mobile’s offerings in a very

competitive market and its ability to meet customer needs

are established, as is the postal workers’ strong support of

this new business activity and their motivation to market

the range.

5.1.4.2.3 Strategy and outlook

The company’s strategy aims to position La Poste Mobile

as the most accessible physical network operator in the

market, while continuing to emphasise the quality of service

rendered and customer proximity. The quality of advice given

by postal workers and after sales service management are

two major advantages for La Poste Mobile, which benefits

from the soundness and trusted name of La Poste and the

quality of the SFR network.

(1) Maxiphone and GN Research studies on behalf of La Poste Mobile (November 2013).



Likewise, commercial offerings are developed consistently

with the Group’s values: trust, transparency, simplicity,

proximity, accessibility for as many people as possible. La

Poste Mobile offers a range of products and services that

easy to understand, financially attractive, presented and

marketed as part of a close, trusting customer relationship.

Moreover, La Poste Mobile endeavours to facilitate access

to the new digital communication tools for as many people

as possible, which is one of the goals that is very well suited

to the Group’s objectives.

In 2014, La Poste Mobile’s goal is to maintain the

commercial momentum of 2013, both for the mobile

phone and ADSL offerings, or by the 4G range launch, on

January 27.

Lastly, the development of shared offers with other Group

Business Lines will be emphasised in order to maximise

synergies. Collaboration with La Banque Postale will allow

the Group to market La Poste Mobile/ La Banque Postale

offers as well as value-added services. For example, a

mobile phone-based payment offering using near field

communications technology will be rolled out in the first

half of 2014.

5.1.5.1 Introduction

Real estate is a strategic division for Le Groupe La Poste

and is key to the challenges associated with:

the development of the Business Lines’ industrial facilities;

customer reception;

local coverage;

employee working conditions;

the Group’s efforts with respect to responsible development;

economic and financial performance.

A very large property portfolio

Distributed throughout France, the real estate assets of

Le Groupe La Poste are the second largest in the country

after that of the French government. The portfolio has

assets throughout the country, reflecting the public service

mission of Le Groupe La Poste with regard to regional

planning and development (at least 90% of the population

of a department must be within 5 km—20 minutes—from a

public postal services outlet).

Completely atypical, it includes widely diversified assets in

terms of size, type and usage. It consists of large industrial

platforms, small and medium-sized retail spaces and

commercial premises. To illustrate, the smallest asset (the

post office of the Eiffel Tower) has an area of 9 sqm, and

the largest, such as the Industrial Mail Platform (PIC) in

Wissous or the Poste du Louvre, are as large as 39,000 sqm.

The Group's real estate assets have unusual characteristics

in terms of size. Its 6.7 million square meters, 59% of which

is directly owned, correspond to 23,600 leases managed.

Lastly, the specific feature of this complex of 11,847 buildings

resides in the number of people who come through its doors

every year: in 2013, 85% of the French population stated that

they had visited their post office at least once to carry out

postal or banking transactions.

5.1.5 Real estate: Poste Immo, a global real estate partner contributing to the Group’s dynamic

2013 2012 2013/2012 change


Revenue 908 851 +57 +6.7%

External revenue 62 41 +21 +50.2%

Intercompany revenue 845 809 +36 +4.5%




Beyond these aspects, the real estate assets of the Group

represent considerable financial stakes. In fact, real estate

is the second largest operating cost item (rent and rental

charges), as well as largest fixed-asset item on the Group's

balance sheet item; this item was valued at €4 billion in the

Group's 2013 accounts.

The real estate division

Le Groupe La Poste’s real estate Department sets out

and oversees the Group’s real estate policy.

Poste Immo, the overall real estate operator, implements

the Group’s real estate policy and takes on the

responsibility of property ownership.

Poste Immo was founded in 2005 as a wholly-owned

Le Groupe La Poste subsidiary to turn real estate into a

value creation tool for the Company and to underpin the

performance of the Business Lines.

Poste Immo performs its business for Group Business

Lines and its network, with the goal of reducing their real

estate costs and supporting them in their development. As

the entity responsible for managing the Group’s real estate

assets, and as a service provider, Poste Immo develops real

estate and financial engineering operations; Poste Immo

enters into strategic alliances with specialised operators to

increase the value of the real estate assets and to develop

the portfolio in order to provide the Business Lines with an

industrial and commercial base adapted to their new uses.

In 2012, Poste Immo and the real estate Department

obtained ISO 9001-2008 certification for all of their

services and business activities. A follow-up ISO 9001 audit

was carried out in the first half of 2013 confirming the

certification received in May 2012.

The real estate division, which has around 1,050 employees

imbued with a dual real estate and postal service culture, is

determinedly positioned as a partner for the Group’s growth

momentum.

5.1.5.2 Business activities

Eager to provide the Business Lines of the Group with the

highest quality support and services on the market, Poste

Immo focuses its comprehensive service offer on four

lines of business: real estate solutions and agency, asset

management, portfolio management, and development

management.

With its 12 regional departments, Poste Immo is active

across the country as close as possible to the Group

Business Lines, elected officials and stakeholders.

“Real estate solutions and Agency” is responsible for

advising the Business Lines with the development of their

real estate site location strategy and for helping them cut

their real estate expenses. Poste Immo is the contact for the

Group’s Business Lines to anticipate their real estate needs

and to assess the upstream potential for the most efficient

use of assets used in both the directly-owned portfolio and

in the rental portfolio. The reduction of under-occupied or

vacant spaces is the key to decreasing real estate costs.

Optimisation of space occupied by La Poste Retail Brand

launched in 2009 made it possible to reclaim 129,000 sqm

for 817 buildings and generated for La Poste Retail Brand

recurrent annual savings for rent and property charges. On

28 June 2013, Poste Immo signed with Mail a mandate for

the optimisation of operating space for a five-year period.

This mandate falls within the scope of the DOTI (1) property

optimisation programme, via which Poste Immo undertakes

to support Mail in negotiating conditions for reclaiming real

estate. Mail's goal is to adapt the area of rented property

to its operating requirements. Finally, the optimisation of

services began in 2005 with the establishment of urban

master plans. In 2011, this was intensified as part of a

Group programme, with the development of master plans

for the real estate Business Lines. This system mainly

concerns spaces occupied by multiple Business Lines. Its

implementation has also been incorporated into a system

established by the Group Executive Committee.

(1) Dossiers d'optimisation territoriale immobilière (property optimization program).



In 2013, Poste Immo therefore continued to support the

Business Lines and the network in anticipating their real

estate needs and assessing upstream potential for the

most efficient use of surface areas. At the end of 2013,

886,000 sqm had been returned to Poste Immo by the

Business Lines and the network, which has resulted in

a €129 million reduction in the invoice from La Poste's

Business Lines since 2005.

Poste Immo, through its agency, looks to identify the best

solutions in terms of functionality, surface area, rent and

location, while negotiating a non-Group lease when necessary.

Since 2010, lease renegotiations with lessors have resulted in

a significant cost reduction for the Business Lines.

“Property asset management” is responsible for managing

the Group’s real estate assets, combining solutions that

meet the operating requirements of the Business Lines

with the application of industry best practice. It manages

and enhances the value of the directly-owned real estate

portfolios and ensures investment returns in line with

market expectations. It implements its real estate and

financial engineering policy by means of buying and selling

properties, maximising value and joint development. The

creation of a real estate fund (OPCI) with a leading player in

the market illustrates this policy. In 2013, a new industrial

platform of the Mail division in Vitrolles was integrated into

the non-listed REIT (OPCI). 268 asset disposals were carried

out in 2013, including the sale of La Banque Postale’s head

office to its occupant.

“Property management” is responsible for ensuring

that leases are respected and secure, for optimising the

related cash flows, and for ensuring that the contractual

terms and provisions are properly applied. It moreover

guarantees owners a multi-annual major repairs

programme and tenants the use of the leased surface

areas in line with their needs. In 2013, the continuous

worry regarding maintaining the value of the assets led to

2,256 technical upkeep and maintenance operations being

carried out. Large Renovations / Large Maintenance (GRGE)

now systematically include a sustainable development

component. In 2011, the outsourced management of

1.3 million sqm was awarded to four companies as

part of an Outsourced Management Project for Multi-

Occupant Buildings (GEIMO). This is in conjunction with

a security policy and a policy of clarifying landlord-tenant

responsibilities, as well as a policy of controlling operating

expenses. Now that the Outsourced Management Project

for Multi-Occupant Buildings (GEIMO) model has been

operating for two years, the different parties (owners and

tenants) in these buildings have a better understanding of

their responsibilities. Amendments to the existing model

extended to multi-occupant sites are currently under study

for deployment in mid-2014.

Lastly, Poste Immo wanted to improve the property business

activities by setting up procedures, structure and systems

in compliance with market standards. The new guide

regarding the breakdown of owner-renter obligations

has been distributed to the Business Lines. This guide is

intended to define the relationship and responsibilities of

the owner and renter as part of the building operations.

“Project Development” embodies the industrial and

commercial strategies of the Group’s Business Lines

and enhances the value of the directly-owned real estate

portfolio through the deployment of responsible, innovative

and efficient real estate projects. In this context, Poste

Immo has implemented programmes of various sizes and

types, as well as programming, feasibility, and assembly

studies and purchases of services and supplies in order

to reduce costs and delays. 2013 was characterised by the

completion of 2,539 programmes. Poste Immo is supporting

La Poste Retail Brand in the rollout of the Customer Service

Area concept. After transforming the top 1,000 post offices

(in terms of revenue), which was completed in 2011, Poste

Immo is supporting La Poste Retail Brand in the launch

of renovations in another segment: from the 2,000th to

the 4,000th largest post office. This project includes, in

particular, the standardisation of these post offices in terms

of accessibility for people with reduced mobility. 82% of the

wholly-owned buildings open to the general public are now

accessible to persons with reduced mobility.

The cash generated by disposals and the surplus internal

cash have enabled the Group to finance buildings works

amounting to over €2.9 billion since 2005.

The amplification and diversification of development and

value creation policies realised by Poste Immo led to the

formation of the National Project Management Group

(Direction Nationale des Projets, or DNP) in 2012. Made

up of a multidisciplinary team capable of leading real

estate projects from start to finish, it manages the most

complex operations, of all types (valuation, labour, leasing,

disposals, etc.) and the development and equity investment

subsidiaries. The challenge is giving Poste Immo the

resources to develop and diversify its development and

value creation policies and to structure an organization

capable of contributing to transversal projects within

the context of large metropolitan operations (ex. Grand

Paris, EurAtlantique, etc.). This Management Group will

take charge of cases with complex criteria and requiring

a specific level of expertise, and notably the Louvre post

office project, whose refurbishment was entrusted to

the Dominique Perrault Architecture group (DPA). The

renovation of this real estate jewel of the Group by Poste

Immo will not only modernise the already existing postal

business activities, but will also accommodate public

services, offices, social housing and a hotel. The building

permits were granted in November 2013.

In order to add value to La Poste's real estate assets to

be disposed of or vacant, real estate project development

operations (residential, office, commercial) have been

begun so that the disposal of these buildings generates the

most profit for the Group. The first cases, regarding very



important buildings (such as Issy-les-Moulineaux, École

Militaire in Paris) and carried out with specialised partners,

are in the process of completion. In the regions, equity

investments were made in companies whose purpose is

the renovation or construction of real estate developments

in Toulouse, Lyon and Fort de France, in preparation for

their resale.

Poste Immo operates as part of a responsible development

policy, with its key goal being the improvement of the

real estate business performance by safeguarding asset

values (i.e. anticipating future market standards, audits

and green ratings, scheduling property upgrades, etc.)

and by offering innovative and financially efficient solutions

(e.g. environmental outbuildings, promotion of renewable

energies, etc.). All new construction corresponds to BBC/

HQE standards (Low Energy Consumption Building/High

Environmental Quality), with the key challenge being

the upgrading of the old portfolio, of which 50% is over

50 years old. Poste Immo has begun reviewing the energy

renovation potential of its strategic buildings, as well as

experimenting with simple schemes and action plans that

can be adjusted for the entire real estate portfolio, and first

of all for facilities where a green lease has been signed,

prior to rolling them out. In 2013, Poste Immo signed and

Energy Efficiency Charter for public and private office

buildings. This Charter anticipates the decree governing

the renovation of office buildings published in 2014. Poste

Immo has actively undertaken to adopt a proactive approach

to the energy performance of its real estate portfolio and

has reaffirmed its commitment to remain a key player in

this area. Furthermore, since May 2012, 44 (1) photovoltaic

units were commissioned in Poste Immo buildings under

a partnership arrangement. Lastly, Poste Immo tasked

GEOPLC with collecting and validating Energy Savings

Certificates (CCE) for several development plans.

As a pioneer, via the signing of five “green pre-completion

leases (2)” for new HEQ and energy-saving sorting platforms

with Mail since January 2010—these leases arrange for the

landlord and lessee to share responsibility for the additional

costs relating to improving buildings’ energy performance

compared with the standard in effect at the time—Poste

Immo has now signed 189 green appendices. 38 of these

appendices relate to the regulatory scope (leases for

premises used as offices or for retail outlets with a surface

area of over 2,000 sqm), while 151 relate to the full scope

(i.e. the implementation of the green appendix with regard to

the building). In conjunction with this, for the rental property

portfolio, measures have been undertaken vis-à-vis lessors.

Poste Immo has in this way taken the initiative of proposing

them model green leases.

Lastly, in the area of healthcare prevention for personnel

and workplace quality of life, 2013 saw the launch of the

"Workplace Quality of Life" Programme in line with analysis

and studies carried out in 2012. On that basis, in 2013,

nearly 300 managers were provided with information on

psycho-social risks. The company in addition recruited a

work ergonomics specialist to provide the company with

new expertise, especially for the evaluation of occupational

risks, an integrated part of all analysis. At the same

time, in July 2013, the real estate division implemented a

mechanism for psychological counselling and input from

staff combined with management support. A mechanism

of social assistance was also implemented for Poste Immo

personnel, supplementing measures by La Poste.

A social survey was carried out in November, and the results

and conclusions will be available in the first quarter of 2014.

Measures are also being rolled out to improve the day-to-

day quality of life, and have been significantly accelerated

by a specific and decentralized budget throughout the real

estate division. New initiatives have also appeared, including

meeting and discussion areas, etc. Around 20 new video-

conferencing systems have been installed in the regions,

reducing travel and the related risks.

5.1.5.3 Challenges and strategy

Since its creation in 2005, Poste Immo has fully exercised

its role of increasing the level of professionalism in real

estate management by investing and modernising the

portfolio. This has in turn contributed to generating cash

for the Group and financing capital expenditures from the

resulting disposals. Poste Immo has facilitated the process

of reclaiming space for the Business Lines, accelerating

work devoted to optimising areas and contributing to real

estate cost controls for Business Lines, while ensuring the

transparency of actual prices.

Today, Poste Immo must further develop its model in order

to adapt to a new environment, new requirements and new

opportunities. On the one hand, against the backdrop of a

particularly difficult economic environment for Business

Line customers, Poste Immo must ramp up its operating

performance, in order to continue to help its customers

meet these new challenges, including service quality,

reducing costs, changing networks, and new markets

(like urban logistics). On the other hand, reducing the

portfolio of directly-owned properties will lead to a decline

in its property revenue. For that reason, Poste Immo must

revamp its business model, by seeking out external growth

opportunities, pursuing joint-development initiatives,

becoming a key provider of urban logistics services or

offering customers project development or property

portfolio management services.

(2) BEFA: "Bail en l’Etat Futur d’Achèvement" (off-plan lease agreement).

(1) Some of which were commissioned in early 2014.



Poste Immo involved all the company’s stakeholders by

inviting them to take part in reviewing and planning the

"Horizons 2018" strategic project between late 2012 and

the first half of 2013. This collective momentum has laid the

foundations for a company strategy adapted to expectations

of customers and the real estate market alike. Its goal is to

meet the challenges in terms of performance and service,

innovation and openness, to confirm its position as the key

real estate partner for Le Groupe La Poste and its Business

Lines.

Poste Immo has defined five strategic priorities, which break

down into 21 operating projects:

strengthening operating performances for improved

customer service;

actively participating in the forward momentum of

Le Groupe La Poste and its Business Lines;

fuelling growth by innovation and leveraging its strengths;

making commitments in favour of responsible

development and workplace quality of life;

enhancing practices and developing cooperation and trust

between employees, customers and stakeholders.

5.1.5.4 Key figures

With 11,847 buildings—3,485 of which wholly-owned—Poste Immo manages the second largest directly-owned and rented

real estate portfolio after the French government.

DIRECTLY-OWNED REAL ESTATE PORTFOLIOS

2013 2012 2013/2012 change

amount %

Number of properties 3,485 3,689 -204 -5.5%

Number of square metres (in thousands) 3,974 4,150 -176 -4.2%

The breakdown of the portfolio by type of asset is detailed below, in thousands of square metres:

2013 2012

Property type Properties SUN (a) Properties SUN (a)

Post offices 1,485 507 1,609 549

Production premises (b) 695 1,485 701 1,518

Residential 40 21 54 32

Mixed / Post offices (c) 1,037 932 1,072 964

Service (d) 209 1,008 217 1,034

Other (e) 19 21 36 53

Total 3,485 3,974 3,689 4,150(a) Lettable Area (SUN): surface area of premises or a building excluding common areas and parking spaces.

(b) Production premises: Mail and Parcels processing platforms.

(c) Mixed / post offices: premises including a post office and other types of premises (e.g. residential premises, or distribution platform, etc.).

(d) Service: financial centre, financial services and offices.

(e) Other: residential, holiday facility, sporting facilities, etc.



RENTED REAL ESTATE PORTFOLIO

2013 2012 2013/2012 change

amount %

Number of properties 8,362 8,369 -7 -0.1%

Number of square metres (in thousands) 2,726 2,761 -35 -1.3%

The breakdown of the portfolio by type of asset is detailed below, in thousands of square metres:

2013 2012

Property type Properties SUN (a) Properties SUN (a)

Post offices 6,871 988 6,898 999

Production premises (b) 749 1,349 751 1,377

Residential 20 5 23 12

Mixed/post offices (c) 424 179 402 175

Service (d) 287 201 285 194

Other (e) 11 4 10 4

Total 8,362 2,726 8,369 2,761(a) Lettable Area (SUN): area of premises or a building excluding common areas and parking spaces.

(b) Production premises: Mail and Parcels processing platforms.

(c) Mixed / post offices: premises including a post office and other types of premises (e.g. residential premises, or distribution platform, etc.).

(d) Service: financial centre, financial services and offices.

(e) Other: residential, holiday facility, sporting facilities, etc.

OCCUPANCY OF BUSINESS LINES’ DIRECTLY-OWNED AND RENTAL PROPERTIES

2013 2012

SUN (a) % SUN (a) %

Mail 3,087,619 46% 3,137,024 45%

La Poste Retail Brand 1,987,577 30% 2,037,214 30%

La Banque Postale 303,209 5% 302,941 4%

Parcels 393,204 6% 409,589 6%

Support/structure 192,677 3% 233,736 3%

Real estate 25,395 0% 29,183 1%

External customers 83,909 1% 90,873 1%

Vacant areas (b) 626,614 9% 671,076 10%

Total 6,700,204 100% 6,911,636 100%(a) Lettable Area (SUN): surface area of premises or a building excluding common areas and parking spaces.

(b) Gross rate.

The gross vacancy rate was 15.0% (1) at 31 December 2013. It represented 594,747 sqm, 365,204 sqm of which is being sold

and 1,593 sqm of which is undergoing renovation or demolition. The net vacancy rate (2) for these areas was 5.7%. The rental

vacancy rate (3) was 1.2% at 31 December 2013, i.e. 31,867 sqm.

(1) Percentage of vacant directly-owned surface areas.

(2) Percentage of vacant directly-owned surface areas excluding areas that are up for sale or undergoing renovation works.

(3) Percentage of vacant rental surface areas.


Overview of business activities Digital services are central to Le Groupe La Poste 5

The digital revolution has significantly transformed

individual and professional practices as well as the

economy in a profound and lasting manner. This digital

revolution represents an opportunity for those organizations

that successfully adapt and change. Starting in 2008

La Poste has responded to this challenge by becoming a

stakeholder in this transformation. With the creation of a

Digital Department reporting to the Chairman-CEO in 2012,

La Poste has clearly incorporated the strategic potential

of this increasingly important trend. The new 2014-2020

strategic plan has accordingly established the digital

priority for Le Groupe La Poste as the focus of a major

transformation.

Le Groupe La Poste has high ambitions for digital

developments.

The strategy of La Poste is focused around five priorities

for development:

developing a digital brand activity for the Group, based

on a strong digital brand identity and a customer-centric

experience supported by a unique customer identifier;

building a position as a "trusted third-party" for digital

exchanges;

becoming a partner of preference for e-retailers by

contributing to the organization of the e-commerce

ecosystem;

developing digital and brick-and-mortar conversions for

local services;

using Big Data as a growth driver for the Group.

These development priorities are underpinned by two

transformational lines of action seeking to:

develop the Group's internal digital DNA (i.e. positioning

the postal worker as a key contributor to the Group's

digital transformation);

establish the Group's position in the external digital

landscape.

La Poste's digital strategy fits within a tripartite relational

system with customers at its centre: a fixed physical

network (agencies and public outlets), a mobile physical

network (postmen, parcel carriers), digital network (digital

brand).

Through this three-pronged relational organization, each

customer chooses its own point of entry for relations with

the Group destined to ensure an optimised customer

experience.

The customer may draw upon the capabilities of a powerful

digital network. The Group's online presence is organised

around three pillars:

La Poste's fixed Internet had 12.75 million unique

visitors in December 2013 through four main web

portals (laposte.fr, laposte.net, labanquepostale.fr and

colissimo.fr). Laposte.fr, the brand’s natural website

point of entry, which is structured according to visitor

profiles (private individuals, businesses, professionals,

e-retailers), presents all offers, recommends Group

solutions and facilitates access via e-stores.

La Banque Postale also has a significant online presence:

The website www.labanquepostale.fr welcomes more

than 498 million visits per year.

Mobile Internet (i.e. cell phones, smartphones and

tablets) is the multi-channel Internet pathway to provide

customers and French people with Le Groupe La Poste's

services, wherever they are, whenever they need it. The

Group's smartphone applications were downloaded

nearly 4.2 million times to research post offices, rates,

or consult a La Banque Postale account.

Finally, social media highlight Le Groupe La Poste's

service-oriented attitude and customer-centric culture

on a day-to-day basis. The Group monitors online

opinion (blogs, discussion forums, social media) and

uses its online presence (Facebook, Twitter, Google +,

Dailymotion, Youtube) to spread information about the

Group and its offerings, provide services (tracking postal

items) and engage with customers.

5.2 Digital services are central to Le Groupe La Poste


Overview of business activities Digital services are central to Le Groupe La Poste5

5.2.1.1 Developing the Group's digital brand around a strong digital brand identity and a customer-centric experience supported by a unique client identifier

The digital brand represents the La Poste brand's proposal

for online value (Mail, Parcels and the Retail Brand) to

individual customers, professionals and companies. This

system covers several areas (information, commercial and

non-commercial services) along with several dimensions

(websites, mobile and tablets applications, and social

media).

The Group already offers a complete range of physical,

hybrid or fully digitised products along with a very broad

range of digital services:

The Group's traditional offerings have been digitised:

- Online mail offering (electronic registered letter (1),

online registered mail (2), online mail (3), online

postage, sending and tracking, etc.), creating and

printing personalised stamps to simplify the day-

to-day life of customers in France and facilitate the

sending and receipt of letters in all forms;

- Online parcel services (colissimo.fr, Cityssimo, etc.);

- La Banque Postale products: for example, in 2013,

84% of all transfers were made online;

- Online subscriptions to La Poste Mobile offerings.

Webmail laposte.net has 3.8 million users.

In 2013, to support the development of the digital brand,

improvements were made to the customer experience,

in order to facilitate purchase and payment processes:

customers are now able to purchase several services and

pay through a single transaction.

An online store was created allowing individual and

professional customers to access the following services

through a single account and interface:

- mail forwarding and holding services in France and

other countries;

- printing stamps from one's own printer for private

individuals;

- sending hybrid or 100% electronic registered letters;

- sending an online letter;

- expanding the range of services for professionals

by incorporating the MonTimbrenLigne service for

professionals, which allows professionals to print

stamps from their own printer;

- integration of MonTimbraMoi customers allowing

them to access new services.

In 2013, La Poste online store achieved revenue of

€127.3 million.

5.2.1.2 Developing a position as a trusted intermediary in the digital universe

Needs related to digital trust are developing with the growth

of online exchanges, accompanied by an increasing need for

personal data protections.

To transpose its role as a trusted third-party in the digital

universe, Le Groupe La Poste is exploiting and developing

a range of models to ensure the reliability/security of

digital exchanges and data, in BtoB (digitisation, regulated

information exchanges, etc.) and in BtoC (secure vaults,

digital identities, webmail).

The continuing development of digital applications will depend

on user confidence and a simplification in security methods.

Le Groupe La Poste is developing a position as a trusted

third-party by targeting two major segments:

services for companies and administrations.

Docapost offers a range of offerings including:

- solutions for securing and digitising flows and

exchanges, including e-contracting (Contralia),

e-debiting and e-transfers (Sepalia);

- solutions for digitising processes, such as claims

management, subscriptions (notably through

Docapost BPO);

- secure intermediation platforms for information

flows for specialised business activities (infogreffe,

jedeclare.com), or special events such as online

voting or electronic contracts.

services for private individuals.

Le Groupe La Poste offers a range of services:

- Digiposte offers solutions for receiving, archiving and

sharing electronic documents (payslips, invoices, etc.).

Today, Digiposte has more than 220 major account

customers who distribute documents electronically to

their customers or staff, nearly 35 reseller partners,

and more than1.2 million private individual accounts;

(1) LRE.

(2) LREL.

(3) LREL.

5.2.1 Development priorities for digital ambitions



- the Digishoot appl icat ion, a t ime-stamped

geolocation-based service for taking pictures with

smartphones was developed through synergies

with Digiposte (photos taken using the Digishoot

application are stored directly in Digiposte).

- laposte.net integrates a functionality for storing mails

and attachments directly in Digiposte;

- Certinomis, a Docapost subsidiary, a certification

authority created in 2000 and recognised by the

French government, issues two forms of electronic

certificates: certificates for individuals and server

certificates. It verifies the identity of a person in

a digital procedure (when signing a response to a

call for bids, for example). Certinomis provides the

electronic version of the La Poste postmark, time-

stamped and archived electronically, to ensure the

traceability of digital exchanges;

- the Digital Identity Department supports retail

customers in performing their online tasks. This

service guarantees online identity for several

applications, such as, for example, on e-commerce

or exchanges between private individuals on websites.

30,000 private individuals have subscribed to the

service since its launch. Users' digital identities are

verified face to face by the postmen.

In this framework, La Poste has fixed as an objective

creating a "digital keychain" for the public. This basic digital

offering consists of services from Digiposte, Digital Identity

and laposte.net.

In 2013, Le Groupe La Poste, Caisse des Dépôts, SFR,

Euro-Information and Solocal Group created Idenum,

through the French government's investing for the future

programme (Programme des Investissements d’Avenir), to

serve as a common platform for users, websites, issuers

of digital ID services and to promote a simple, secure and

interoperable authentication solution. The commitment of

these major groups highlights an important milestone and

a new ambition: be concrete and complete the work that has

been in progress for a few years with the public and private

players of the digital trust.

5.2.1.3 Becoming the preferred partner for e-retailers

Beyond being the privileged partner of e-retailers for

delivering their parcels, Le Groupe La Poste’s goal is to

support brick-and-mortar merchants and e-retailers

at every stage of their development in their online sales

operations (mail, parcels, banking):

• assistance in creating or strengthening online presence

(e-commerce delegation through Mix-Commerce,

website creation with Box e-commerce for micro-

businesses and SME, annuaire.com);

• digital communications solutions for processes

upstream of commercial development (prospecting

assistance, behavioural targeting, sending of emails or

SMS, mailbox advertising campaigns, connected mail,

web advertising campaigns, customer acquisitions or

loyalty campaigns, etc.);

• integrated logistics and e-logistics solutions (ViaPost,

Morin, Orium, Neolog), with the Group's ability to absorb

large volumes during peak periods (Christmas, sales)

and adapting to smaller entities with lower volumes

though equally demanding in terms of quality and

service integration. Solutions for inventory management,

preparing orders and reverse logistics;

• secure payment solutions (Scellius, assured by

La Banque Postale) or micro-payments (Adverline). In

2013, La Banque Postale launched an electronic wallet,

Paylib (with BNP and Société Générale), tested a Talk To

Pay voice authentication mechanism, and is currently in

a trial phase for microSD contactless payments;

• solutions for delivery in France and in other countries;

multiple delivery solutions through the development

of So Colissimo (choice of parcel pick-up location) and

Pickup's network (7,000 PickUp and DropOff at the end

of 2013).

Delivery services have been expanded with Colissimo

"delivery choice options" and Chronopost "interactive

delivery". Addressees can therefore know the delivery

date of their purchases, by e-mail or by a message on

their mobile phone, and postpone the delivery if it is not

convenient for them, by responding to the message.

Chronopost Interactive was furthermore a finalist of

the 2013 e-commerce Awards, as was the Colissimo

International return offer of ColiPoste that allows e-retailers

to manage their return costs.



Since 2006, Le Groupe La Poste, at the service of connected

commerce, has participated in the e-commerce trade show

and publishes every year a barometer (1) called "Small

Companies and e-Commerce" that seeks to measure

the obstacles and motivations of companies in this area.

The Group is an active member in the French government

"digital transition" programme (Transition Numérique Plus)

through its e-commerce Universities.

In this fast-growing e-commerce market, Le Groupe

La Poste's strategy is to strengthen its positioning by

integrating the existing offerings in its different Business

Lines, and to propose solutions adapted to each type of

market. A study is currently under way on La Poste's

positioning in the Marketplaces (2) segment.

5.2.1.4 Developing digital and physical convergence for local services

Le Groupe La Poste's goal is to leverage its existing assets

and historic positioning as a physical proximity player to

explore opportunities for developing offerings through the

convergence between physical and digital proximity.

Three areas are under study:

supporting local commerce through digital solutions to

develop locally-based logistics.

Local commerce is subject to strong online competition.

To help convenience stores recover customers,

Le Groupe La Poste must develop a "web to store" digital

offering bringing the customer to the store through its

website, and positioning itself in aggregation platforms

providing a common showcase for local merchants. For

example, in Sceaux, a dedicated online marketplace for

the town's convenience stores has been created. After

purchasing online, customers can pick up their shopping

directly in stores or from Cityssimo lockers.

supporting exchanges and local entrepreneurs through

the "community life" ("vie des communautés") initiative.

As the economy based on sharing and proximity is

gaining ground, markets involving different economic

models are experiencing strong development

(carpooling, co-working, peer-to-peer renting, etc.).

Le Groupe La Poste's differentiation is based on its

positioning as a figure of trust and a capacity to provide

both a physical or mobile service in addition to digital

services.

T h e s e p ro j e c t s m u st b e d eve lo p e d t h ro u g h

experimentations and business incubation.

developing connected homes and cities.

Le Groupe la Poste aims at identifying new models based

on home automation systems, coordinating services for

the home and connected objects.

These potential markets are however not yet currently

organised: competition is fierce and multi-form, hence the

need to adopt an innovation and partnership approach.

5.2.1.5 Making Big Data a Group growth driver

With the explosion of data produced online and the

associated possibilities for its exploitation through Big

Data (3) technologies, all companies (and not only those

originating directly from Big Data such as Google) are

transforming the exploitation and leveraging of this data

into a growth driver.

Beyond the contribution of Big Data technologies to

the Group's industrial business activities and customer

knowledge, the challenge for Le Groupe La Poste is to

become a major player in this new ecosystem and its

monetisation.

La Poste's goal is to exploit possibilities from leveraging

and using data for:

improving the efficiency of industrial mail processes.

In connection with coordinating industrial business

activities, new means for using data are applied to

industrial mail processes to improve the efficiency

of distribution processes and services up to delivery:

predictive analysis and real-time analysis of postal data

to optimise the distribution network or improve the

processing of mail pending collection.

This requires investments and tools for collection,

processing, storage and ad hoc viewing.

(1) Barometer PriceMinister-Rakuten—La Poste produced by OpinionWay from a panel of 1,005 companies.

(2) A website offering an online commercial platform for a number of brands for professional and consumer segments.

(3) Big Data refers to the collection, processing and analysis of data traces left on the Web through new technologies made possible by the development

of IT tools.



For example, the Mail division conducted work (with

Dassault Systems, Exalead and Sopra Group) on a real-

time tool to optimise industrial processing for mail items

through the Orest TAE project (Traitement Automatisé de

l’Enveloppe) in production since December 2011.

The goal of this very ambitious project is to obtain a

general overview of mail flows and be able to provide

performance indicators useful for managing the activity

in real time, as well as to directly obtain information

about a mail item.

enhancing the value proposition of the Group in

connection with existing business activities.

Le Groupe La Poste is positioned in the area of data

marketing with Mediapost Communication. Exploiting

Big Data is an integral part of the growth drivers for this

business activity. The objective is therefore to combine

this offering with other offerings of both Mediapost

Communication and Mail, so as to provide advertisers

with a coherent range of products and services (customer

knowledge, prospecting and loyalty-building solutions).

Conducting forward-looking initiatives to develop new

services as well as develop new growth drivers.

La Poste is positioned within the French government's

open data approach and, furthermore, is developing an

approach aiming to open out its own data.

In connection with its public service missions,

La Poste has made the data for post offices available

to data . gouv . fr . A commitment has been made in the

business contract between La Poste and the French

government with respect to making available the

location of letterboxes and pick-up times in 2015. The

availability of this information represents an opportunity

for developing new services.

By way of example, data on postal outlets (post offices,

letterboxes, Cityssimo, etc.) represent information which

is useful for the development of the business activity and

may also be positively exploited externally. New local

services using this data may also be introduced with the

assistance of partners.

5.2.2 Priorities for transformation

5.2.2.1 Support Group employees in increasing the use of digital technologies

Digital technology impacts all dimensions of a company:

strategy, organization, management, working methods,

social relations, customer, partner and supplier

interactions, etc.

La Poste is convinced its digital transformation will be

driven by its employees. For that reason, a major internal

priority for transformation is organised around the following

objectives:

develop digital cultures and practices;

facilitate the emergence of new ways of working;

develop collaborative approaches and tools;

use digital possibilities to serve employees and

customers.

Certain priorit ies, already present in 2012 were

strengthened, while others represent new priorities for

work initiated in 2013.

Developing digital cultures and practices

In order to support these changes, La Poste is taking

actions to raise awareness with its employees in order to

allow them to better understand digital trends, and above

all, take full advantage of the resulting opportunities and

transformations: the 2012 management forum with a day

devoted to "digital culture and practices", simple modules

providing an introduction to digital knowledge and practices

for the Retail Brand counter clerks provided in October

and November 2013, or the Lab Postal of December

2013 that focused in part on the internal transformation

programme. These many examples highlight initiatives by

Le Groupe La Poste for its employees to promote the digital

transformation.



Facilitate the emergence of new ways

of working

New forms of exchanges and communities are being

spontaneously created in professional areas. Corporate

social networks make up a source of opportunities,

exchanges and creativity. There are therefore a number of

collaborative initiatives underway in Le Groupe La Poste.

By way of example:

Since 2007, a collaborative platform has brought together

the community of innovators, more than 400 members

from all the Business Lines, in order to discuss about

innovation. In 2012, La Banque Postale built an active

community of 70 new members to create and organise a

collaborative environment capable of contributing to its

innovation approach.

In 2012, La Banque Postale also created a customer

listening platform in order to test and communicate with

customers on new products and services.

La Banque Postale is working on the development of a

collaborative approach for 550 senior executives as a first

step before being extended to the 3,000 managers.

Integrating new terminals

New uses are also reflected by the arrival of new terminals:

smartphones, tablets and other personal devices. La Poste

is modernising its infrastructure and adjusting the employee

equipment policy in order to integrate this multichannel

information and to support this growth driver of digital

culture.

In 2013, tests were conducted to equip post offices with

touch screen tablets to enable the counter clerks to

assist customers in their post office tasks.

With the Facteo project (see Chapter 5, Section 5.1.1.5.1),

the Group is equipping Mail operational staff with mobile

terminals.

5.2.2.2 Establish the Group's public position in the external digital landscape

Le Groupe La Poste must adopt a strong digital positioning

supported by an ambitious visibility programme. Certain

actions already initiated were strengthened in 2013 while

others are in the pipeline to support the Group's digital

activity. The main drivers are:

off-line and online communications initiatives focusing

on internal and external audiences to promote Le Groupe

La Poste's position as a player operating in both digital

and traditional channels. The Groupe has implemented

communications initiatives internally across its network

of public outlets, in the Group's proprietary media and

externally thanks to brand image partnerships, social

media and press relations. For example, La Poste formed

a partnership, which allowed it to have a noteworthy

presence at the "French Web" event in December 2013;

actively contributing to the digital ecosystem and

exercising a strong role as innovator by developing

partnerships with start-ups, associations, institutions

(Government entities, municipalities, universities, etc.).

By way of example, the postal presence during events

such as "Futurs en Seine" with Cap Digital has allowed

La Poste to establish a strong presence in the digital

ecosystem;

maintaining a proximity with public authorities to

accelerate the digital transformation of La Poste

ecosystem and participate in the construction of a

national digital policy. La Poste is a visible stakeholder

in the political ecosystem and actively contributes

to addressing the major digital issues facing the

government. For example, La Poste intervenes as

a signatory member of the Silver Economy Charter.

Le Groupe La Poste is also a member of a group

brought together by the CNIL, the French data protection

authority, to establish digital education as a "major

national priority" in 2014.


Overview of business activities Regulations 5

Le Groupe La Poste entities are subject to a wide range

of regulations in the course of their business activities.

La Poste is in particular subject to EU legislation on

postal services, which has been transposed into French

law. Le Groupe La Poste has to comply with regulations

governing the transport and forwarding staff businesses,

regulations governing the banking sector and regulations

governing telephone services.

Le Groupe La Poste is also subject to a series of specific

provisions relating to its public service missions.

The following summary of legislative or regulatory

provisions is not intended to provide an exhaustive

description of all the legislative and regulatory provisions

governing Le Groupe La Poste.

5.3 Regulations

5.3.1 Regulation of Le Groupe La Poste' Business activities

From a regulatory perspective, Le Groupe La Poste's

business activities fall into the following main categories:

Postal business (mail/parcels), the Group’s traditional

business activities;

Express-related activities (express parcel business)

through GeoPost subsidiaries;

Banking activities, via its La Banque Postale subsidiary;

since 2011, mobile telephone activities through La Poste

Telecom.

5.3.1.1 Related postal business

The provisions governing the development of the EU internal

market for postal services were set out in an initial directive

of 15 December 1997 (97/67/EC). This was supplemented

by the Directives of 10 June 2002 (2002/39/EC) and of

20 February 2008 (2008/6/EC). These directives were also

responsible for the gradual deregulation of the postal

sector, which ended with the market completely opening

up to competition on 1 January 2011.

The 15 December 1997 Directive notably sanctioned the

provision of a Universal Postal Service within the EU.

The Universal Service, provided in France by La Poste,

conceived as a right of access to postal services for users,

encompasses a minimum range of services of specified

quality which must be provided in all Member States at

affordable prices for the benefit of all users, irrespective of

their geographical location (see Section 5.3.2.1).

The transposition into French law of these European

Directives was:

by French Act No.2005-516 of 20 May 2005 on the

regulation of postal business, which partially deregulated

the market for items of correspondence and defined the

regulatory framework, including the creation of Arcep

(Autorité de régulation des communications électroniques

et des postes—the French regulator of the electronic

communications and postal sectors);

via Act No.2010-123 of 9 February 2010 regarding the

Le Groupe La Poste public sector company and postal

services (codified in Articles L. 1 et seq. of the French

Postal and Electronic Communications Code (CPCE)),

which ended the protection of the sector, and adjusted

the regulatory framework on 1 January 2011.

5.3.1.1.1 Definition of postal service

Postal services are deemed to include the collection,

sorting, shipping and delivery of postal items as part of

regular rounds.

In addition, a postal item is any item to be delivered to the

address indicated by the sender on the item itself or on

its wrapping, including in the form of encoded geographic

coordinates and presented in the final form in which it is

to be shipped. Postal items include books, catalogues,

newspapers, periodicals and postal packages containing

merchandise with or without commercial value.

Lastly, an item of correspondence is defined as a postal

item that weighs up to two kilos and contains written

communication on any kind of physical medium, excluding

books, catalogues, newspapers or periodicals.

All these provisions are set out in Article L. 1 of the CPCE.


Overview of business activities Regulations5

5.3.1.1.2 The system of prior authorizations

The postage of items of correspondence is a regulated

business activity subject to prior receipt from Arcep of an

operating license. Up to 31 December 2010, this license,

which is renewable and non-transferable, was issued for

a period of 10 years and only related to the postal services

outside La Poste’s reserved sector.

Since Title II of the Act of 9 February 2010 took effect on

1 January 2011, Arcep issued a license for a period of

15 years, which covers all items of correspondence (Article

L. 3 of the CPCE), given that the protected sector has been

dismantled.

The procedure to grant authorizations as well as applicable

obligations for authorized service providers are defined in

decree No. 2006-507 dated 3 May 2006. The request for

authorization must contain a certain amount of technical,

financial and commercial information pertaining to the

applicant and its business activity. In addition, postal

service providers must apply for a license to post items of

correspondence domestically and/or cross-border. These

provisions are codified in Articles R. 1-2-1 et seq. of the

French Postal and Electronic Communications Code.

The granting of the license requires an express decision

by Arcep.

La Poste holds a license covering:

items of correspondence including delivery;

postage of outward cross-border items of correspondence.

This license was issued for 10 years pursuant to Arcep

decision No.06-1091 dated 26 October 2006.

In addition, the French Act of 20 May 2005 designated

La Poste as the service provider responsible for the

Universal Postal Service. The French Act of 9 February

2010 reaffirmed the award of this mission to La Poste,

for a period of 15 years as from 1 January 2011 (see

Section 5.3.2.1 et seq.).

5.3.1.1.3 Rights and obligations relating

to the license

La Poste, like all postal service providers licensed to provide

postage services for items of correspondence, is required

to fulfill a series of obligations relating to:

guaranteeing the safety of users, staff and facilities;

guarantee ing the conf ident ia l i t y o f i tems of

correspondence and the integrity of their contents;

providing user access to a simple, transparent and free

claims procedure;

ensuring data and privacy protection;

meeting the goal of protecting the environment as

regards the implementation of the technical aspects of

the services.

These obligations which, in particular, consist of

introducing rules for identifying employees, measures to

ensure the confidentiality of correspondence, in addition

to arrangements for implementing claims processing

procedures, are detailed by a French Ministerial Decree of

3 May 2006.

All these obligations were supplemented by the law of

9 February 2010. Now, any postal service provider holding

an authorization must also:

guarantee the neutrality of the postal services with

regard to the identity of the sender and the nature of the

postal items;

guarantee access to the services and facilities for people

with disabilities in line with the provisions of Article

L. 111-7-3 of the French Building and Housing Code;

comply with legal and contractual obligations related

to employment rights and applicable social security

legislation, notwithstanding the special provisions

applying to those who may have state employee status;

respect public order and national defense related

obligations.

In addition to these obligations, service providers licensed

by Arcep are entitled to access private letterboxes in order

to be in a position to deliver postal items.



5.3.1.1.4 Access to essential resources

Where it proves necessary to protect the interests of

users and/or to promote genuine competition, Member

States are required to provide transparent and non-

discriminatory access to certain aspects of the postal

infrastructure deemed essential to the carrying on of a

business. La Poste’s essential resources were introduced

by the French Act of 20 May 2005 (codified in Article L. 31 of

the CPCE) transposing the provisions of Directive 97/67/EC.

They consist of access to the postcode system, the address

database, PO boxes, letterboxes, information on address

changes, a forwarding and return to sender service.

In this respect, in France, any operator licensed to post

items of correspondence has access, on transparent and

non-discriminatory terms, and on the technical and pricing

terms and conditions set out in the related agreements

signed with La Poste, to the following essential resources:

the postcode index matching these codes to geographic

details such as streets and addresses;

the information collected by La Poste with respect to

changes of address;

a forwarding service in the event of a change in the

recipient’s address;

a delivery facility or service for PO boxes installed in post

offices.

Arcep is informed by La Poste of the technical and pricing

terms and conditions on which service providers can access

the essential resources and is notified of any agreements

entered into in this respect.

5.3.1.1.5 The liability regime

Postal service providers are subject to a special liability

regime. This regime provides that the liability of postal

service providers shall be governed by Articles 1134 et seq.

and 1382 et seq. of the French Civil Code with respect to

losses and damages arising in the course of the service and

in the event of the delayed delivery of a postal item, if the

service provider has committed to a shipping time for this

postal item (Articles L. 7 and L. 8 of the CPCE).

Compensation is set by French Decree No.2006-1020 of

11 August 2006, which provides for maximum compensation

with regard to the nature of the items and the postal

charges. Accordingly, compensation payable by postal

service providers as a result of the loss or damage of postal

items, other than parcels, may not exceed:

for ordinary items, a sum equal to twice the postage

price;

for items that the sender has asked to be tracked from

drop-off in the service provider’s network to delivery, a

sum equal to three times the postage price;

for items subject, in accordance with the terms

and conditions laid down by decree of the minister

responsible for postal services, to procedures attesting

to their postage and delivery, the sum of €16;

for insured items, the insured amount.

In the case of the loss or damage of postal packages, the

maximum compensation is €23 per kg of merchandise lost

or damaged (the gross weight shall be the weight of the

merchandise plus the wrapping).

The decree also sets out the period after which a postal

item that hasn’t been delivered to its recipient should be

considered lost (period of 40 days from the date on which it

is dropped off in the service provider’s network).

The compensation that may be payable by postal service

providers as a result of a delay in delivering postal items

entrusted to them may not exceed the postage price.

5.3.1.1.6 Obligations in terms of information

Under Article L. 135 of the CPCE, licensees must provide

Arcep with annual statistics on the use, coverage area

and terms and conditions of access to their service. This

reporting in particular includes items relating to the nature

and volume of the various postal services for which they

are licensed. Arcep is also empowered to carry out expert

assessments, undertake studies, collect data and carry out

all forms of reporting on the postal sector.

As part of this reporting obligation, Arcep is required to

make a decision every year with respect to carrying out an

annual survey designed to:

ensure that all sector stakeholders and consumers are

kept informed by publishing aggregate indicators on the

main postal sector segments;

provide the necessary data for public policy reviews

and in particular Arcep’s work with respect to the

implementation of applicable regulation;

assess the effect of its decisions on the market as a

whole.



The Arcep members designated in the decision are the

only ones authorized to receive and process individual

information collected in the course of this survey.

These surveys are published on Arcep’s website as part of

the Annual Observatory of Postal Business.

5.3.1.1.7 Arcep's authority

Arcep is empowered to settle disputes arising from the

performance of postal service activities. This consists of

powers to settle disputes and arbitration powers.

Arcep may be called upon to settle a dispute when it

involves an agreement to access essential resources (see

Section 5.3.1.1.4), or involves entering into or performing

agreements that vary from the general terms and

conditions of the Universal Service offering for items of

correspondence. Where the dispute falls outside the scope

of the dispute settlement procedure, Arcep may be called

upon to conciliate.

In addition, Arcep can, on its own initiative or at the

request of the Minister responsible for postal services, a

professional body, a recognized user group, an affected

individual or legal entity, Universal Postal Service provider

or license holder, decide to hand down penalties against a

Universal Service provider or a license holder. Arcep may

only hand down penalties having given the interested party

formal notice to comply with its obligations within a specific

deadline.

The penalties available to Arcep are as follows:

a warning;

cutting a year off the length of the license;

suspending the license for at most one month;

withdrawing the license;

a fine, the amount of which is proportional to the

seriousness of the breach, the position of the interested

party, the scale of the damage and the amount it

benefited from it, subject to a 5% maximum of net

revenue for the most recent ended financial year, this

threshold being raised to 10% in the event of a further

infringement.

Arcep cannot be summoned regarding events dating back

more than three years, if no effort has been taken to identify

them, ascertain their veracity or penalize them. Lastly,

the penalties issued by Arcep were based on a reasoned

decision, notified to the interested party and published

in the French Official Bulletin. They may be cause for an

administrative appeal and an application for a suspension

filed in line with the provisions of Article L. 521-1 of the

French Administrative Justice Code with the French Council

of State.

In addition to these powers, since the effective introduction

of Title II of the French Act of 9 February 2010, Arcep has

additional powers with respect to the processing of claims

by postal service users where these claims have not been

resolved under the procedures put in place by the licensed

postal service providers.

5.3.1.2 Express-related business activities

Through GeoPost’s subsidiaries, La Poste operates in the

express parcel service business. These subsidiaries operate

mainly as freight forwarding staff or road hauliers. These

two activities are governed by specific regulations.

5.3.1.2.1 Conditions governing the

performance of transport and freight

forwarding activities

The conditions governing the exercise of freight transport

activities are mainly laid down at the European level by

Regulation No.1071/2009 of 21 October 2009 and at the

national level by the French Act of 30 December 1982

on domestic transport and French Decree No.99-752 of

30 August 1999, and amended by Decree No.2011-2045 of

28 December 2011.

The conditions governing entry into a forwarding staff

member business are mainly laid down in the French Act

of 30 December 1982 on domestic transport and French

Decree No.90-200 of 5 March 1990 on the performance of

forwarding staff member activities. The latter differs from

the transport operator in that it organizes and arranges

for the carrying out under its responsibility of the various

freight transport phases, without actually transporting them

itself or without transporting them the whole way.

Companies operating in the road freight transport sector

in France using motorized vehicles must possess an

administrative authorization to exercise such an activity

and be registered as well in the national register of road

transport undertakings (registre des transporteurs). For

the issuance of the administrative authorization and

registration, four conditions must be met: undertakings are

stably and genuinely established, financial standing, good

repute and professional ability.



The financial standing criterion means that the Company

must have equity or guarantees of at least €1,800 for the

first vehicle with an average authorized weight of up to

3.5 tons, and €900 for each subsequent vehicle. For vehicles

above 3.5 tons, these amounts are increased respectively to

€9,000 and €5,000. The integrity criterion must be satisfied

both by the Company’s legal representative(s), and the

person responsible for the management of the transport

activity.

The condition of professional ability concerns the

company's transport manager who must hold a certificate

of professional ability. This status is obtained by the

possession of certain diplomas, a specific examination or

justification of professional experience.

Companies exercising the profession of freight forwarding

staff in France must be registered in the national register

for freight forwarding staff (registre des commissionnaires de

transport). Such registration is subject to compliance with

the two criteria mentioned above of professional standing

and professional competence.

5.3.1.2.2 Conditions governing the

performance of road transport and freight

forwarder activities

The freight road transport company must possess an

EU license if it engages in transport using vehicles with

a maximum authorized payload above 3.5 tons and a

national transport license for vehicles under 3.5 tons.

These administrative authorizations are valid for 10 years

and subject to renewal.

A certified copy of the administrative authorization required

must be carried on board the corresponding vehicle.

Furthermore, operating a freight transport business in

France requires a number of documents, and namely the

bill of lading and tracking document.

The bill of loading, which is mandatory on board for any

vehicle, contains a series of compulsory information

regarding the sender, the recipient and the freight being

transported. It may be produced by the forwarding staff

member, when applicable.

The tracking document must be filled in as the transport

is performed. This document, which is duly signed by

the remitter or its representative and kept in the vehicle,

indicates the arrival and departure dates and times of

the vehicle both at the loading location and the unloading

location. The freight forwarding staff member is required

to maintain a register in paper or electronic form for road

freight forwarding or consolidation services including

information about the shipper, recipient, road haulier and

the service.

In addition, a summary of the load indicating the inventory

of the consolidation batch must be drawn up by the

consolidator forwarding staff member.

5.3.1.3 Banking activities

La Banque Postale, a wholly-owned subsidiary of La Poste,

is a public limited company with an Executive and

Supervisory Board, authorized to operate as a bank by the

CECEI (Comité des établissements de crédit et des entreprises

d’investissement—Credit Institutions and Investment Firms

Committee) in 2005 and registered as an insurance broker

by ORIAS (Organisme pour le registre des intermédiaires en

assurances—the Register of Insurance Brokers).

In this respect, La Banque Postale targets all customer

segments and provides a comprehensive banking, financial,

savings and insurance offering:

banking services: bound by CCP and payment services,

overdraft facilities, real estate loans, consumer credit,

corporate loans and loans to local authorities;

financial instruments: investment account management,

investment of financial securities including units or

shares in UCITS, and futures;

savings products: savings products subject to special tax

regimes and unregulated savings products, employee

savings products, insurance linked products.

It also offers payment services unconnected with a bank

account, such as postal money orders, money transfers,

cash foreign currency exchange and travelers’ checks.

Bank transactions, transactions associated with bank

transactions, investment services and services associated

with investment services, savings products and cash foreign

currency exchange are regulated by the French Monetary

and Financial Code.

Insurance products are governed by the French Insurance

Code.

These codified provisions, supplemented by un-codified

legal and regulatory provisions, govern the business

activities of La Banque Postale in their respective fields.

Moreover, La Banque Postale is also subject to oversight

by professional authorities: Autorité de contrôle prudentiel

(French Prudential Oversight Authority) and Autorité des

marchés financiers (French Financial Markets Authority).



5.3.1.4 Mobile telephone services business activities

On 14 October 2010, La Poste Telecom declared itself as

an operator with Arcep (French regulator of the electronic

communications and postal sectors) to conduct two

business activities: telephone services to the public (direct

transfer of voice in real time between land line or mobile

users) and services other than telephone service (electronic

communication services). The telephone service that

La Poste Telecom provides the public is mobile.

However, La Poste Telecom is a mobile telephone operator

that does not have specific authorization for the use of radio

frequencies. As such, it is an MVNO (Mobile Virtual Network

Operator).

SFR is the “host” network operator of La Poste Telecom.

An agreement to provide access was signed in early 2011

for the supply by SFR to La Poste Telecom of wholesale

mobile electronic communications services (voice,

SMS, data) across metropolitan France. Thus, La Poste

Telecom, through its access agreement, benefits from the

interconnections negotiated by SFR with all mobile and

fixed-line operators.

End-to-end mobile voice services are provided by SFR with

a quality of service equivalent to that offered by SFR to its

own customers for comparable services. In addition, insofar

as that La Poste Telecom benefits from a simple provision

of access, it is primarily SFR that is bound by regulatory

obligations regarding interconnection.

Since registering with Arcep, La Poste Telecom has enforced

the rights and obligations attached to the establishment

and operation of public networks on the basis of Article

L. 33-1 of the French Postal and Electronic Communications

Code (CPCE).

Meanwhile, La Poste Telecom has the right to engage in the

aforementioned activities of public telephone service and

services other than telephone service as well as the right

to be issued blocks of numbers by Arcep.

La Poste Telecom is subject to the rules relating in

particular to:

conditions governing the consistency, quality and

availability of service;

conditions of confidentiality and neutrality with regard

to the messages transmitted and information related to

communications;

regulations governing health and environmental

protection;

free routing of emergency calls;

funding of Universal Electronic Communications Service.

5.3.2 Regulations applicable to public sector missions

La Poste is tasked with four public service and public

interest missions, defined in Article 2 of the French Act of

2 July 1990, as amended:

the Universal Postal Service;

the contribution, through its network of public outlets, to

regional planning and development;

press transportation and delivery;

banking accessibility.

On 22 July 2008, the French government and La Poste signed

a public service agreement for the period between 2008 and

2012. This agreement set out the conditions underpinning

the new framework governing the performance of the public

service missions. An amendment signed on 14 February

2012 confirmed the quality of service goals for 2011 and

2012 with regard to services falling within the scope of the

Universal Service mission.

The undertakings given by La Poste and the French

government were redefined by the "2013-2017 Public

Service Agreement" which was approved by the Group's

Board of Directors on 22 April 2013, and signed by the

stakeholders on 1 July 2013.

This agreement provides for:

maintaining a broad scope of public service missions

assigned to La Poste: Universal Postal Service, press

transport and delivery, banking services accessibility and

regional planning;

further reinforcement in the quality of service objectives

(Priority Mail, Registered Letter and Green Mail);

missions adapted to meet users' expectations and

technological advances (online letter, range for sending

small items);

implementation of corporate citizenship engagements

in favour of the development of regions and companies,

the most disadvantaged persons, the development of

the digital society and corporate social responsibility

initiatives.



For each of its missions, the concrete implications are as

follows:

Universal Service mission: the agreement provides for

several advances in terms of quality of service. A revision

clause was set for 2015 to adjust the agreement, if

necessary, to the decline in mail volumes;

Mission for press transport and del ivery: the

commitments made by La Poste and the French

government in the 2008-2015 Schwartz agreements

were confirmed A review of the terms and conditions

for carrying out the mission beyond 2015 will also be

scheduled;

Banking accessibility mission: this mission is confirmed.

A study on its potential development is in progress by

the General inspectorate of Finance and the General

inspectorate of Social Affairs. The purpose of this

initiative is to shed light on the work on the extension of

the mission beyond 2014;

Regional planning mission: the agreement sets out the

guidelines of the “new regional coverage agreement”,

i.e. continuing the renovation of the post offices, and

developing partnerships, by giving priority to innovation

and digital technology. The agreement for the period

between 2014 and 2016 was signed on 16 January 2014

by the AMF (French Mayors’ Association), the French

government, and La Poste.

The public service missions assigned to La Poste are dealt

with in turn in the following sections.

5.3.2.1 Universal Postal Service mission

The French Act of 20 May 2005 designated La Poste as the

service provider responsible for the Universal Postal Service

mission. The French Act of 9 February 2010 confirmed the

assignment of this mission to La Poste, for a period of

15 years as from 1 January 2011.

5.3.2.1.1 Legal and regulatory framework

The concept of Universal Postal Service, introduced by

Directive 97/67/EC, represents a guarantee for every

European citizen of a permanent postal service of specified

quality throughout the territory at affordable prices. This

guarantee involves:

delivery to everyone’s home;

collection and delivery at least five times a week;

access to post offices and letterboxes;

deadlines for national and cross-border shippings;

affordable prices based on costs.

In terms of services, Directive 97/67/EC stated that the

Universal Postal Service should at least include the

following services:

postal items of up to 2 kg;

postal packages of up to 10 kg;

services for registered items and insured items.

EU provisions on the Universal Service were transposed

into French law by means of the French Act of 20 May 2005

subsequently supplemented by the French Act of 9 February

2010.

The legislature elected for an expanded Universal Service

as provided for in Article L. 1 of the CPCE: “The Universal

Postal Service helps bring about social cohesion and

the balanced development of the country. It is carried

out in such a way as to ensure respect for the principles

of equality, continuity and adaptability while striving to

maximize economic and social efficiency. It guarantees all

users throughout the country permanent access to postal

services of specified quality. These services are offered at

affordable prices for all users”.

In addition, the French Decree of 5 January 2007 on the

Universal Service reaffirmed and detailed the legislature’s

choice with respect to both the characteristics of the

Universal Service (i.e. offering, accessibility, collection,

delivery, etc.) and the rights and obligations of La Poste as

Universal Service provider.

The criteria of accessibility for the network of postal outlets

according to the Universal Service mission set by the French

Decree of 5 January 2007 on the Universal Postal Service

provide that at least 99% of the French population and at

least 95% of the population of each department be within

10 km of a postal outlet and that all towns with more than

10,000 inhabitants have at least one postal outlet per

20,000 inhabitants.

The set of principles governing the Universal Service’s

definition and scope were not amended by the French Act

of 9 February 2010.



5.3.2.1.2 Regulatory framework

Arcep is tasked with monitoring the opening up and

proper functioning of the postal market while ensuring the

financing and safeguarding of the Universal Service.

Arcep ensures that La Poste meets its Universal Service

obligations and in this regard establishes a multi-annual

price cap along with price regulation on a case-by-case

basis of services within the scope of the Universal Service.

La Poste is subject in its capacity as Universal Service

provider to obligations with respect to quality of service,

claims processing and accounting. The financing of this

mission is provided for by means of the establishment of a

compensation fund.

In addition, every year La Poste sends Arcep a report on

the Universal Service it provided, with a copy sent to the

minister responsible for postal services.

Features of the Universal Service

In France, the Universal Postal Service includes national

and cross-border transmission of postal items weighing up

to 2 kg, postal packages of up to 20 kg, registered items

and insured items. Collection and delivery services within

the scope of the Universal Postal Service are carried out

every working day, save in exceptional circumstances.

Distribution of services within the scope of the Universal

Service is carried out in appropriate facilities to the door of

every individual or legal entity.

The scope of the Universal Postal Service is set out in

French Decree No.2007-29 of 5 January 2007 (codified as

Articles R. 1 et seq. of the CPCE), which states that the

Universal Service includes the following minimum services

for domestic and cross-border postage:

single piece items of correspondence with two levels of

priority;

bulk items of correspondence;

registered items;

newspapers and periodicals;

catalogues and other printed matter;

postal packages;

insured items;

forwarding;

literature for the blind.

These services are offered on a permanent basis to all users

across Metropolitan France, in the overseas departments

and in Saint-Pierre-et-Miquelon.

Universal Service catalogue

La Poste puts together and keeps updated a catalogue

outlining the services falling within the scope of the

Universal Service (i.e. description of offerings and current

prices). This catalogue was approved by the minister

responsible for postal services on 20 August 2007, following

a favourable opinion by Arcep on 26 April 2007, and can be

downloaded from the La Poste's website.

La Poste must simultaneously seek approval from the

minister responsible for postal services, and consult Arcep

for any proposed substantial changes to the catalogue,

other than prices, when these changes affect the single

piece postal component of the Universal Service. Should

the minister fail to object within two months of receipt of

the document, the changes are deemed approved. In the

case of bulk postal services, La Poste must only inform the

minister responsible for postal services and Arcep of the

catalogue changes.

Multi-annual price caps

Multi-annual price caps governing the prices for services

falling within the scope of the Universal Service are set by

Arcep, following a review of La Poste’s proposal (Article

L. 5-2 of the CPCE).

This price cap makes it possible to control price increases

for all or some of the products in the sector governed by

postal regulations, with a view to keeping the Company’s

operating margin constant over a specific period.

Regarding the periods from 2006-2008 then 2009-2012, the

annual changes in postal rates from the Universal Service

may not exceed the level of inflation plus 0.3 points. In 2012,

the rate increase capacity thus amounted to 2%.

The framework for the 2013-2015 period was defined by

ruling No.2012-1353 dated 6 November 2012. This new

framework provides that the change in rates may not exceed

the level of inflation plus 1 point (i.e. 2.8% for 2013 and 2.3%

for 2014). The price caps were established based on the

inflation rate anticipated in the French Finance Bill (PLF),

elasticity of consumer demand and changes in La Poste's

volumes and expenses. Nevertheless, the arrangement

comes with symmetric adjustment clauses if assumptions

regarding inflation and changing volumes are not verified.

Case-by-case price regulation for Universal Service products

The French Act of 9 February 2010 (Article L. 5-2-3° of the

CPCE) stipulates that Arcep issues opinions on service

price increases within the scope of the Universal Service. In

addition, it empowers Arcep to change or suspend planned



price increases where the pricing principles applying to the

Universal Service are patently not complied with.

Quality of service obligations

At EU level, quality of service standards relating to the

shipping time for postal items between the date of deposit

by the sender and delivery to the recipient were defined for

intra-EU cross-border mail. Accordingly, from the time the

object is passed to the postal operator, 85% of items must

be delivered within three days and 95% within five days.

At national level, quality targets are also set by the minister

responsible for postal services (order of 2 August 2013).

These annual targets, dealing with the speed and reliability

of services, cover the following services:

Priority Mail: delivery rate in D+1 >85%;

Registered Mail: delivery rate in D+2 of 93%;

Green Mail: delivery rate in D+2 of 93%;

EU cross-border mail delivery rate D+3 of 90% and in

D+5 of 97%;

the Colissimo counter: delivery rate in D+2 of 88%.

Arcep ensures that these targets are met along with the

publication and reliability of service quality measures. It also

commissions an independent body to carry out an annual

survey on the quality of service of various components

of the Universal Service. In addition, La Poste provides

Arcep with any information it may request for carrying

out its responsibilities and its oversight of the Universal

Postal Service. Arcep’s requests must be well-founded and

proportionate to its needs as well as specify the level of

detail required and the deadline involved.

Moreover, La Poste regularly measures quality of service

based on European or national standards (Article R. 1-1-

8 of the CPCE). Some of these standards are designated

annually by ministerial decree. The results of these

measurements are disclosed to users and Arcep.

Claims processing

As the Universal Service Provider in France, La Poste

must publish an annual report on the monitoring of its

performance, information on the number of claims and

the manner in which they have been handled (Article 19 of

Directive no. 97/67/EC).

The decree from the minister responsible for postal services

on the quality of service targets set for La Poste with respect

to its Universal Service mission also states that an annual

report must be published on claims processing, breaking

down the number of mail and parcels claims as well as

the procedure used to handle them. The evaluation method

must comply with the principles provided for by European

standard EN 14012. The decree of 2 August 2013 establishes

a minimum response of 95% within a 21 day time frame for

claims involving domestic mail.

Furthermore, as Universal Service provider, La Poste must

display a notice at each public outlet detailing the claims

procedure and the standard compensation. Universal

Service users must have access to claims forms. The time

taken to deal with a claim relating to a domestic postal

item may not exceed two months from receipt of the claim

accompanied by supporting documentation. This claims

processing procedure is free for users (Article R. 1-1-9 of

the CPCE).

Lastly, should users not be satisfied with the response to

their claim, they may file a further claim, which is dealt

with by a different unit. If they feel the response is still

not satisfactory, they may then ask Le Groupe La Poste's

mediator to intervene.

Accounting obligations

As Universal Postal Service provider, up to 31 December

2010, Le Groupe La Poste was required to present separate

financial statements for each service within the reserved

sector on the one hand and the services in the deregulated

sector on the other hand, distinguishing between those

within the scope of the Universal Service and those falling

outside. Since 1 January 2011, when the market was fully

deregulated and the protected sector was dismantled,

La Poste has been required to present separate financial

statements for the services within the Universal Service

scope, and for the services outside that scope.

The cost allocation principles for this regulatory accounting

are laid down by Arcep. At the request of the latter, La Poste

provides it with any accounting document and information

required to enable it to verify that it is complying with its

obligations.

La Poste’s regulatory accounting has been verified by

La Poste Statutory Auditors every year since 2000. Since

2006, Arcep has conducted an audit under La Poste's

responsibility, using an independent body authorized by it

for that purpose, to verify that the principles it defined are

effectively applied.



Universal Service financing

If La Poste bears an unfair cost under its Universal

Service obligations, it may request the application of a

compensation fund, which would be funded by all licensed

postal operators (including itself). In the event the fund was

applied, the scheme until 31 December 2010 provided that

the contribution made by each service provider would be

calculated in proportion to the revenue generated under

the Universal Service. Since 1 January 2011, in the event

that the fund is activated, the contribution of each operator

has been calculated in proportion to the number of postal

items dispatched within the Universal Service scope.

Nevertheless, any operator dispatching a number of items

of correspondence below a threshold set by decree shall

be exempt from making a contribution to the fund. Arcep

is responsible for calculating the net cost of the Universal

Service obligations and for the amount of the contribution

payable into the fund by each authorized postal operator.

To this end, Arcep may ask La Poste to provide it with

any information and study it has that makes it possible to

objectively assess the additional costs associated with the

provision of the Universal Service.

A Council of State Decree, issued following consultation

with Arcep and the CSSPPCE (Commission supérieure

du service public des postes et des communications

électroniques—High Commission for the Public Service

of Postal and Electronic Communications), should clarify

methods for measuring, compensating and sharing net

costs associated with Universal Service obligations. A

second decree, issued following a public notice by Arcep at

the request of the Universal Service provider establishing,

based on accounting data, that it bears an unfair financial

expense as a result of its Universal Service obligations, shall

set the first year with respect to which the net contributions

into the Universal Postal Service compensation fund shall

be collected.

5.3.2.2 Regional planning mission

The French Act of 9 February 2010 reaffirmed the

assignment to La Poste of a regional planning public service

mission.

5.3.2.2.1 Legal and regulatory framework

As part of its mission to contribute to regional planning,

La Poste is subject to access rules set by the French Act on

the organization of the La Poste and France Telecom public

service of 2 July 1990 as amended by the Act of 20 May

2005: “Save in exceptional circumstances, these rules do

not permit that over 10% of people in a department live

over five kilometres or over 20 minutes’ car journey, based

on the traffic conditions in that department, from home to

the nearest La Poste public outlets”.

The French Postal Act of 9 February 2010 adds that the

La Poste network “must have at least 17,000 public outlets

spread across French territory taking into consideration

France's special characteristics, in particular in the

overseas departments and local authorities”.

For the purposes of this mission, La Poste adapts its

network of public outlets by entering into local public or

private partnerships while striving to maximize economic

and social efficiency. La Poste’s partners are firstly

municipalities and groupings of municipalities in the case of

Local Postal Agencies, and secondly shopkeepers, traders,

tobacco retailers in the case of Relais Poste outlets. These

partnerships make it possible to improve access to postal

services through longer opening hours. Their development

in accordance with local elected representatives is at the

heart of the policy to adapt postal coverage.

At the national level, the La Poste network has over

17,000 public outlets (post offices, Local Postal Agencies,

and Relais Poste outlets), spread across 14,000 districts.

57.9% of these outlets are in located rural districts (1).

Within each department, La Poste presents an annual

report on the local coverage in line with the accessibility

standard, including a map setting out the location of the

various La Poste public outlets.

In 2013, 90 departments in Metropolitan France met the

accessibility standard. In the overseas departments and

territories, every city has at least one public outlet.

5.3.2.2.2 Financing and governance

The additional coverage to ensure the regional planning

mission corresponds to the number of public outlets

deployed by La Poste to enable it to fulfil this mission,

in addition to those resulting from the sole obligation of

accessibility of the Universal Service.

The net cost of this additional coverage is assessed each

year by Arcep on the basis of a method provided for

by a Council of State Decree of 18 July 2011, following

consultation with CSSPPCE. The latter specifies that “the

net cost of this additional coverage is equal to the avoided

cost in its absence less revenue lost in its absence”.

(1) As defined by INSEE 1999.



After applying this method, Arcep considered that the net

cost of the additional coverage required by La Poste in order

to fulfil its regional planning mission was €252 million for

2012 (decision dated 1 October 2013).

To offset the additional costs, up to 31 December 2010,

La Poste benefited from an 85% reduction in local taxes. As

from 2011, this rebate can amount to up 95%, in accordance

with the French Act of 9 February 2010. The provisional

amount for 2013 was approximately €170 million, an

identical amount to that for the first year of the new local

postal coverage agreement. It is allocated to a national

postal equalization territorial compensation fund for which

La Poste must keep separate accounting and financial

records. By a ruling on 25 January 2012, the European

Commission approved this compensation plan for the

2008-2012 period, as government assistance compatible

with the treaty on the functioning of the European Union.

This mechanism is currently subject to notification by the

French government for 2013 and the following years.

The local postal coverage agreement signed by the French

government, La Poste and the French Mayors’ Association,

defines the procedures for allocating and managing this

fund. Allocations are made on a departmental basis,

depending on the number of public outlets located in so-

called priority areas: rural areas and the rural revitalization

areas that they include, mountain and hill areas, deprived

urban areas (ZUS) and French overseas departments and

Territories. To ensure a true equalization, a weighting is

applied to each eligible public outlet on the basis of its

geographic area.

Each departmental allowance contributes to the

indemnification of the Local Postal Agencies, remunerating

the Relais Poste outlets, a departmental program

negotiated with the Departmental Commission for Regional

Post Office Presence (CDPPT), which in particular finances

the refurbishment of post offices, a ZUS program, a French

overseas department program as well as a program

dedicated to the operation and development of rural post

offices.

The first two postal service coverage agreements,

which covered the periods between 2008 and 2010, and

between 2011 and 2013, fulfilled their commitments.

Over €900 million was invested in six years, including

€330 million to ensure the development and sustainability

of partnerships (postal agencies and Relais Poste outlets),

€200 million to support the real estate investment policy in

priority areas, including the renovation of over 2,700 post

offices located in priority areas, and lastly, €370 million to

guarantee the running of post offices in rural areas.

The new agreement for the period between 2014 and 2016,

which was signed on 16 January 2014, is in keeping with

the two previous agreements, although it innovates and

goes even further in some areas. In this sense, it meets the

expectations of elected local officials, with whom meetings

were held as part of a major consultation process in the

spring of 2013. Over 130 meetings enabled these officials

to express their point of view, to share their expectations,

and to suggest new ideas. The new agreement focuses on

improving access to services, and especially digital services:

the postal service offering must be made available to the

general public in all its forms in areas that are eligible for

the equalization fund. Emphasis has also been placed on

the initiative to pool public services, in order to reduce

regional disparities in terms of the local service offering.

In this respect, the inclusion of postal services in existing

pooled service areas is a priority. The pooling of services

may also take other forms, primarily through turning to new

kinds of partners.

In the departments, the Departmental Commission on

Local Postal Presence (CDPPT), composed of eight elected

officials representing cities and municipalities, the general

councils and regional councils, guarantees the consistency

of the postal offering in its territory and is responsible for

monitoring La Poste's adherence to accessibility standards

regarding regional planning. It proposes a division of the

departmental allowance for the territorial equalization

fund and negotiates projects that fall under the fund with

La Poste, in particular in the programs for rural, deprived

urban area's and overseas departments and territories. It

also reviews the potential submissions from the mayors on

changes in postal coverage. Over 300 CDPPT meetings were

held in 2013.

At the national level, the National Observatory of Postal

Coverage, established in December 2007, monitors the

implementation of the local postal coverage agreement.

It follows, in particular, the management of equalization

funds, the CDPPT work and the development of the postal

network. It researches concrete solutions to improve, where

applicable, the relations between La Poste and its partners.

The new agreement is characterized by a more significant

representation of the CDPPT within the Observatory, which

has seen the scope of its missions broadened to include

assessing the work performed by the CDPPT, primarily via its

responsibility to warn the joint signatories of the agreement

in the event of significant discrepancies between the work

performed and the estimated expenditure. The Observatory

also approves any new form of service pooling, and the trials

aimed at managing local services proposed by the CDPPT.

The CDPPT have more room for maneuver in terms of

managing the equalization fund, in order to improve access to

postal services, and of the prioritization and management of

projects, which are assessed over the three-year term of the

agreement. They may also suggest the launching of trials,

specifically where pooling services are concerned.



This decentralized system, with dual governance both

nationally and departmentally, allows for ongoing and in-

depth interaction with, and consultation of local elected

officials.

5.3.2.3 Press transportation and delivery mission

The French Act of 2 July 1990 makes La Poste responsible

for a press transportation and delivery public service

mission. The French Act of 9 February 2010 confirmed the

assignment of this mission to La Poste.

5.3.2.3.1 Framework of the mission

The press transportation and delivery public service mission

is governed by multi-annual agreements between the

French government, La Poste and press industry unions.

The current multi-annual agreement (the “Schwartz

agreement”), was signed on 23 July 2008 and sets out

the commitments of each party for the 2009-2015 period.

Its purpose is to ensure this public service mission is

performed on a financially balanced basis.

Accordingly, the Schwartz agreement provides for price

increases of between 2% and 5% excluding inflation over

the period between 2009 and 2015, depending on the special

nature of each newspaper and magazine category (i.e.

publications that hold a registration certificate issued by

the French Joint Commission for Publications and Press

Agencies, political and general information publications,

and daily newspapers with low levels of advertising income).

The French government’s goal under this framework is to

ensure a plurality of information and country-wide postal

delivery access by publications and readers.

The prices for the services offered to the press under

this public service mission are approved by the minister

responsible for postal activities following a public notice by

Arcep (Article L. 4 of the CPCE).

In addition, under these agreements, La Poste has

undertaken to continue its efforts to optimize, increase

productivity and generate savings so as to reflect changes

in volumes and bring about a net reduction in total costs

for the press of €200 million by 2015, excluding inflation.

Lastly, the parties also agreed to jointly develop industrial

solutions that would make it possible both to optimize press

transportation and delivery as well as grow press home

delivery.

In addition, La Poste, the press and the French government

agreed to establish a Universal Service price for press

publications. This price entered into effect on 1 March 2009.

A Committee to monitor the draft agreement is responsible

for reviewing an annual overview of the implementation of

the agreement, ensuring that the commitments made by

each party are being met and dealing with any difficulties

that may arise with regard to the implementation of the

agreement.

5.3.2.3.2 Financing

The “Schwartz agreements” determine the French

government’s contribution until 2015; this contribution,

which takes the form of an annual financial contribution,

aims to offset the additional costs of the public service

mission relating to the transportation and delivery of

newspapers and magazines.

This contribution is implemented in a manner that is

wholly legal, in particular under EU law. Accordingly, in

order to enable the system to be implemented, the French

government is committed to providing Le Groupe La Poste

with an annual contribution of approximately €242 million in

2009, 2010 and 2011, then €232 million in 2012, €217 million

in 2013, €200 million in 2014 and €180 million in 2015.

By a ruling on 25 January 2012, the European Commission

approved this compensation plan for the 2008-2012 period,

as a government assistance compatible with the treaty on

the functioning of the European Union. This mechanism is

currently subject to notification by the French government

for 2013 and the following years.

The French 2014 Finance Act nevertheless provided for a

€50 million reduction in compensation budgeted for 2014

for La Poste's transport and delivery mission in relation to

the amount indicated in the tripartite agreement of 23 July

2008.

Furthermore, the Finance Act also stipulated that

the moratorium in 2014 on regulated rates for the

press established in 2009 that resulted in a one year

postponement in the application of increases actually

incurred by publishers, would not be renewed. The impact

on La Poste's accounts of this deferred application of rate

increases was offset by a contribution from the general

government budget in order to maintain the equilibrium of

the agreement. The impact of the end of the moratorium

will gradually be offset by an increase in the postal rates

for delivering newspapers and magazines.

As part of the reform of aid to the press, the general

inspectorate of cultural affairs, the general inspectorate

of Finance and the general council for the economy,

energy industry and technologies were tasked to initiate

reflection about the complementary nature of the various

press distribution modes: postage, delivery and newsstand

sales. This will be implemented by 2016, when the

Schwartz agreements come to end. This mission consists

in particular, in drawing up an objective and common

assessment of the linkage between the various distribution

modes and the aids currently mobilised, as well as an

assessment of their respective efficiency.



5.3.2.4 Banking accessibility mission

5.3.2.4.1 Framework of the mission

The banking accessibility mission assigned to La Poste is

performed via the Livret A passbook savings account.

It should not be confused with the right to open a bank

account, which does not cover savings products. This right

only concerns a bank account and does not include credit

institutions.

Up until 1 January 2009, La Poste, the Caisses d’Épargne

and, under specific conditions, Crédit Mutuel, were the

only institutions authorized to offer Livret A passbook

savings accounts. The French Economy Modernization

Act of 4 August 2008 brought this situation to an end, and

deregulated Livret A passbook savings accounts, which

all banks can now offer to their customers, subject to

having signed an agreement with the French government

beforehand, and specifically complying with the one account

per person rule.

La Poste carries out its banking accessibility mission, a

public service and public interest mission, assigned by

the French Act of 2 July 1990 as amended, in a unique

manner, through La Banque Postale, its subsidiary, a credit

institution (Article L. 518-25-1 of the French Monetary

and Financial Code). In addition to the rules governing

the operation of the Livret A passbook savings account,

La Banque Postale is also required to comply with specific

obligations codified as part of the French Monetary and

Financial Code:

La Banque Postale is required to open a Livret A

passbook savings account for any individual, any

association mentioned in Article 206-5 of the French

General Tax Code or public housing bodies so requesting

it;

the minimum amount for cash withdrawals or deposits

is set at €1.50;

La Banque Postale is required to authorize, on the

Livret A passbook savings accounts, in the terms and

conditions defined in the General Regulations, all of the

transactions listed by the order of 4 December 2008 from

the minister responsible for the economy, in particular

housing revenue paid by public bodies and payments and

withdrawals of certain transactions (social minimums,

income tax, various duties, gas and electricity bills,

housing associations, etc.).

Of La Banque Postale’s Livret A passbook savings accounts,

55% or some 11 million accounts, have an average balance

of under €150. However, these Livret savings accounts,

which only total 0.5% of deposits, have a significant

management cost because they are among the most used

accounts, with 46% of transactions being carried out on

Livret A passbook savings accounts.

La Banque Postale has also begun, as part of the Act of

9 February 2010 to combat and prevent excessive debt and

encourage micro-loans.

That is why the French Economy Modernization Act provided

for special remuneration for La Banque Postale.

5.3.2.4.2 Financing

The additional costs incurred by La Banque Postale as a

result of its obligations under the banking accessibility

mission are ”compensated in proportion to the general

economic interest service missions assigned to this

establishment” as provided for by Article R. 221-8-1 of the

French Monetary and Financial Code.

The amount of the compensation for the period between

2009 and 2014 was determined in a decree issued on

4 December 2008. A decree issued on 29 July 2013 amended

the compensation amount for 2013 and 2014, and cancelled

the decree of 4 December 2008. The new decree provides

for an annual contribution of around €246 million in 2013

and €242 million in 2014.

This compensation comes on top of the remuneration it

receives, like other establishments, for the distribution of

Livret A passbook savings accounts.

On 23 January 2013, the European Commission approved

the public service compensation bestowed upon La Banque

Postale in order to guarantee banking accessibility

("Livret A" passbook savings accounts). The European

Commission estimated that the public financing granted

by France to La Banque Postale from 2009 to 2014 that was

intended to improve banking accessibility is in compliance

with the EU regulations regarding government assistance.


Overview of business activities Social and Environmental Responsibility5

Since 2003, the Group has shown its continued commitment

to social and environmental responsibility (CSR—Corporate

Social Responsibility).

Le Groupe La Poste's sustainable development approach,

which was launched as part of the 2003-2007 "Performance

and Convergence" strategic plan, was continued and

reaffirmed in each of the subsequent plans. CSR is at the

heart of the strategy for the period between 2014 and 2020,

which was previewed in July 2013.

The maturity acquired by the Group entities has enabled the

Group to clarify the social and environmental responsibility

goals and action priorities for 2015 as early as 2011. It

is within this context that the Group Corporate Social

Responsibility Department was created in early 2011,

and that the Group's corporate social and environmental

responsibility policy was defined and approved by the

Executive Committee in September 2011. This policy was

updated at the time of the new 2014-2020 strategic plan.

Over the period between 2014 and 2020, Le Groupe La Poste

aims to become a major player in the distribution and local

services market. It will therefore support changes in the

regions, and will contribute to meeting the challenges

posed by changes in the environment and society, alongside

all the operators involved. This assumes making two major

commitments:

the first commitment is to set an example by providing

a responsible offering, i.e. an offering that is useful and

accessible to all, neutral in terms of environmental and

societal consequences, and by reducing the negative

external effects (1) of its activities.

the second is to help regions pursue economic

development that is in the general interest, and

contributes to independence and social inclusion and

improves the quality of life.

With respect to the environment, by 2020, Le Groupe

La Poste undertakes to:

contribute towards the transition to a low-carbon

economy: French law provides for reducing greenhouse

gas emissions by a factor of four between now and 2050,

by lowering overall energy consumption and increasing

the share of renewable energy. Direct (2) greenhouse gas

emissions (GHGs) will be reduced by 20% by 2020 (in line

with the International Post Corporation (IPC) targets).

Full carbon offsetting in the Mail and Parcels offerings

will be sought throughout the period;

turning its waste into a resource. Between now and 2020,

in the Group:

- 80% of Waste From Electric and Electronic will be

recovered for reuse,

- 100% of hazardous waste will be processed in

accordance with applicable regulations,

- 80% of used office paper of Group Departments will

be collected for recycling.

In terms of employee relations and work conditions, the

Group's goal, beyond the inherent objective of respecting

human rights, wherever it operates, is to positively

contribute to the quality of life of its employees by better

taking into account their personal environment and

aspirations to participate in the life of the company.

In addition to the "Human Resources" commitments and

action plans (see Chapter 17), the Group will offer post

office workers the opportunity to commit to social solidarity

initiatives alongside it, and will supplement social outreach

measures aimed at marginalized postal workers.

At the societal level, the Group will pursue its economic

development initiatives, which are aimed at promoting

employment and sustainable development in the French

regions, and help marginalized people gain access to

essential goods (3).

(1) Negative external effects: social costs (dangerous work with no offsetting benefits, professional mobility, and insecurity, etc.) or environmental costs

(fumes, particles, toxic clouds, noise, congestion, damage to, extinction of natural species, and soil and subsoil depletion, etc.).

(2) Direct and indirect emissions linked to the consumption of power, steam, heating and cooling in the transportation and building sectors.

(3) Essential goods: food, healthcare, housing, the supply of energy and water for the primary residence, telecommunications (telephony and Internet),

transportation, culture.

5.4 Social and Environmental Responsibility

5.4.1 A CSR policy integrated into the Group's strategy


Overview of business activities Social and Environmental Responsibility 5

5.4.2 Governance of the organization

5.4.2.1 Governing bodies

In order to embed CSR at all decision-making levels of the

Company, the Group has several governing bodies. At the

highest level, the Quality and Sustainable Development

Committee, which is part of the Board of Directors (see

Chapter 16, Section 16.4.3), reviews the strategic priorities

and monitors their implementation.

The Group’s Chief Executive Officer is the CSR contact for

the Executive Committee. A progress update on the roll-out

of CSR in the Group is given to the Executive Committee

every year.

The Group has drawn up a framework including the

definitions and guidelines of ISO 26000 certification. This

assessment is renewed every two years, and enables the

incorporation of ISO 26000 principles by each Group entity

and the roll-out of the CSR policy to be monitored. The first

roll-out assessment was presented in the first half of 2013.

The Group's CSR Department coordinates a Business Line

CSR Committee that brings together each Business Line

and the holding companies for the Group's subsidiaries.

This Committee monitors the roll-out of action plans within

the Group, and incorporates CSR concerns into business

practices of the functional operating segments.

Each Business Line and the most important subsidiaries

have added a CSR Department to define their policy and

oversee deployment of operational action plans, and in

this way integrating responsible development into their

processes and management.

Lastly, at a local level, CSR contacts have been designated

by each of the Business Lines and, when justified by their

size, the Group subsidiaries. They are supported in their

work by the 22 Regional Representatives, who coordinate

initiatives between the Business Lines, subsidiaries' and

local stakeholders’ local operations (see Section 5.4.7.3).

5.4.2.2 CSR in collective performance indicators, roadmaps and decision-making processes and controls

The including of responsible development criteria into the

Group’s management system is now a reality.

The Group's CSR targets are monitored on a regular basis

in the Chairman’s management indicators and during

performance reviews with each of the operational directors

on the Executive Committee.

All the managers, from members of the Executive

Committee to team leaders, have at least one CSR target

in their roadmap: Quality of life at work. This in turn has an

impact on their variable compensation.

At La Poste, the profit-sharing bonus, which has been

distributed to La Poste employees since 2010, specifically

includes a criterion known as “progress in terms of the

accessibility of buildings for people with reduced mobility

at facilities open to the public in the asset portfolio",

and a criterion known as "total emissions offset via the

carbon offset program" for companies within La Poste's

consolidation scope.

The economic, social and environmental impacts are

analyzed when major projects in terms of their amount or

the issues involved are assessed.

CSR has been included in the Group's internal control

system and risk management system: a legal CSR

framework has been drawn up, and the annual self-

assessment matrix includes questions on CSR.



5.4.3.1 A Group initiative

In April 2011, the Executive Committee adopted an ethical

system. This system is based on:

a Reference Guide to Professional Ethics specifying

all of individual and collective rules of conduct. Its

dissemination, which began in December 2011, was

completed in 2013. This Reference Guide is available

online on La Poste’s Intranet site (in French and English),

and on Le Groupe La Poste institutional website for

external stakeholders;

a Business Ethics Committee chaired by the Group's

General Representative, and which includes the Group,

Business Lines and Poste Immo's corporate ethics

officers, as well as the officers from the functional

Departments. The Business Ethics Committee met twice

in 2013, in order to review the progress of the roll-out

system, the results of the first ethical survey set up in

2012, and the anti-corruption action plan;

a customized support system (or warning system), in

order to answer employees' questions, enable them to

escalate any serious breaches of the guidelines that they

may observe, where applicable, and request mediation

in certain cases;

a network of ethical supervisors composed in particular

of a Group compliance officer, four Business Line

compliance officers and compliance officers in the main

subsidiaries (in particular Poste Immo). They meet once

a quarter, in order to discuss matters to be addressed,

and to co-construct staff awareness-raising tools

(Intranet, monthly newsletter, and ethical management

training module, etc.). The issues addressed in 2013

were corruption and conflicts of interest.

a survey for measuring sensitivity to ethical issues, and

employees’ level of understanding and endorsement of

corporate ethics (1).

The first annual report on professional ethics for the 2012

financial year was presented to the Executive Committee

and the Board of Directors.

5.4.3.2 An approach promoted in the Business Lines and the subsidiaries

The approach was promoted by the Business Lines in 2013:

local communications were organized in Mail, and

improved employees’ overall awareness of the Reference

Guide (38% in 2012, and 60% in 2013);

in Parcels-Express, staff are reminded of the ethical

guidelines during every assessment campaign at

ColiPoste. GeoPost continued to promote its Professional

Conduct Code for employees, by creating an ad hoc

section on its Intranet site. The French entities'

compliance officers met to discuss issues relating to

professional ethics (conflict of interest, and religion-

related incidents, etc.). In Europe, GeoPost subsidiaries

adapted their professional ethics guidelines to local

regulations;

at La Banque Postale, a film was produced and shown to

new hires, in order to boost endorsement of the Bank's

values by all the parties involved;

Retail Brand continued to increase the "Risk and Internal

Ethics and Professional Conduct Control" division's

level of professional expertise through producing new

relationship tools with facility directors. The Retail

Brand assessed breaches of business ethics rules, and

wrongdoing in order to improve prevention. Employment

training for bank advisors and branch managers has

been updated in order to take into account the most

recent regulatory developments.

two Ethical Committees are held at Poste Immo every

year. The Ethics initiative was also presented to all new

hires.

(1) The questionnaire was drawn up with the institut de sondage BVA (BVA Marketing and Opinion Insights) and le Cercle Éthique des Affaires (French Business

Ethics Circle) for use within the company, and with a sample of large companies in order for benchmarking purposes.

5.4.3 The Group's ethical approach



5.4.4.1 Responsible service offerings

The Group is involved in designing more responsible

products and services for its 45 million retail customers

and 3.5 million corporate and professional customers.

5.4.4.1.1 Integrating CSR concerns from the

moment the products and service offerings

are designed

Le Groupe La Poste is committed to making its offering

available to everyone. Environmental, social and societal

goals are integrated into the different phases of preparing

and marketing new offerings. CSR guidelines are now used

by marketing managers.

The Green Letter, which was launched in October 2011,

will help reduce Mail's CO2 emissions by removing

air transport from the means of transport used in

Metropolitan France.

In 2013, all Mail and Parcels offerings were guaranteed

as carbon neutral. This proactive approach that consists

in measuring, reducing and offsetting carbon emissions

produced in the conception and execution of the service,

without resulting in additional charges for the customer,

represents a source of competitive differentiation. It

has been in place since 1 March 2012 for ColiPoste

and Mail, and since 1 July 2012 for GeoPost, for all

packages transported by GeoPost subsidiaries in France,

Germany, the United Kingdom, Belgium, Luxembourg,

the Netherlands and Switzerland. Since 1 July 2013, 10

new countries have joined the Total Zero compensation

programme. With a total of 17 countries this programme

covers 95% of the volumes transported by the Group.

La Banque Postale has requested that an ESG check-

list (1) aimed at guaranteeing the inclusion of 19 extra-

financial criteria covering design, distribution and

customer support, etc. be appended to each new product

file submitted to a review committee. It is also offering

its customers a full range of Socially Responsible

Investment (SRI) funds certified by Novethic and

Finansol.

By developing Recy’go, an offering involving the collection

and recycling of office paper, Mail has offered SMEs a

practice from which they were previously excluded due

to the low individual volumes requiring collection.

5.4.4.1.2 Improving customers' understanding

of the environmental impact of the offering

To inform consumers about their consumption choices,

and meet their expectations, Le Groupe La Poste has

designed calculators that also enable them to anticipate

new legislative measures (displaying the CO2 emissions of

transport services, and environmental labelling of products

and services, etc.). This eco-calculator, which was approved

by Bureau Veritas in 2011 and 2013, has been used to meet

the requests of Mail's key account and corporate customers,

while a mass-market version has been available online as

part of a dedicated website (www.objectifzeroco2.laposte.fr)

since November 2012.

Tools enable users to calculate a shipment's carbon

footprint. Customers may also ask their sales contact

person for a calculator.

ColiPoste provides retail customers with a multi-criteria

comparison tool via its www.colissimo.fr website; this tool

enables individuals to estimate the main environmental

effects of an online purchase compared with a "physical"

in-store purchase.

5.4.4.1.3 Improve consumer access

to the offer

The third line of action for the Group consists in simplifying

access to its service offerings for marginalized customers

segments (i.e. the disabled, migrants, persons experiencing

financial difficulties, or who find it hard to read and write,

etc.), by providing simple and accessible information, a

customized welcome and support with the initial use of, or

during the service (loan support).

The Retail Brand has developed an active partnership policy

with four national not-for-profit organizations (the French

Red Cross, FNARS—Fédération nationale des associations

d’accueil et de réinsertion sociale [National Federation of

Host and Social Reinsertion Organizations]), Unis-Cité

and FACE (Fondation Agir Contre l’Exclusion [Act Against

Exclusion Foundation]), and with local organizations that

support vulnerable customer groups. The aim of these

partnerships is to promote greater understanding of postal

processes (understanding forms, and assistance with

drafting documents, etc.) and increased use of automated

services. Almost 150 partnerships were entered into in 2012;

they involved social mediation initiatives, and training and

interpretation services to help the customers of 300 post

offices located in underprivileged urban areas in 64 French

departments.

5.4.4 Customer responsibility

(1) Environmental, social and governance criteria.



La Banque Postale focuses on designing an offering

available to the largest possible number of people

by applying rates that are in keeping with its banking

accessibility public service mission. In addition La Banque

Postale has committed to combating and preventing

overindebtedness by offering customers a range of

responsible consumer loans (conditions for granting

credit and assistance) and to promoting micro-loans (see

Section 5.1.3).

In September 2012, La Poste signed a partnership with

the OFII (Office français de l’immigration et de l’intégration,

the French Office of Immigration and Integration) to help

migrants gain access to banking and postal services.

Furthermore, as part of its partnerships with France

terre d’asile and the French Office for Immigration and

Integration, which are aimed at improving refugees and

asylum seekers’ access to postal, banking and telephone

services, 90 flagship post offices were identified and

provided with training on how to receive and service these

population groups.

5.4.4.1.4 Improve service rendered

to customers

The fourth line of action is developing the quality of service

rendered to customers (see the service culture process

presented in Section 5.5.1.3).

5.4.4.2 Making buildings open to the public accessible by 1 January 2015

In the accessibility area, the group has plans to make its

premises that are open to the public (1) (primarily post

offices) accessible by 1 January 2015, the cut-off date

determined by the government.

At the end of 2013, approximately 82% of the directly owned

facilities were accessible to persons with reduced mobility

(PRM). Since 2007, 1,379 post offices have been rendered

PRM-compliant, including 327 in 2013. The accessibility

assessment for the portfolio of rented properties was

completed in September 2013: 50% of these facilities are

accessible. Poste Immo is continuing its plan to inform and

raise the awareness of institutional and private landlords

for facilities in the rented portfolio. The implementation of a

specific plan for local authority landlords (66% of landlords)

is in the process of being finalized.

In addition, 148 automated bank tellers located outside post

offices were upgraded to PRM standards in 2013, raising the

compliance of the installed automated bank teller base to

4,524, or 91.2% of the installed base.

Retail Brand includes all aspects of CSR concerns

(accessibility, eco-designed materials, reduction of energy

consumption, reception, service efficiency and quality of

advice) in its global approach to transforming the post

office network into modern service areas (Customer Service

Areas).

(1) With the exception of properties destined for disposal.

5.4.5 Social responsibility

5.4.5.1 Compliance with human rights and international agreements

In the Group's opinion, taking human beings, their freedom,

differences, quality of life, and health into consideration in

every decision is a cornerstone of responsible development.

All of the Group companies have policies and practices

aimed at ensuring respect for equality of opportunities

and the absence of discrimination, as defined in the

International Labour Organization agreements. The same

applies to respect for people, trade union freedoms, and the

prohibition of child labour and forced labour.

These factors make up an integral part of the Group's CSR

framework and were analyzed during the biennial review

initiated in 2012.

Regarding the respect of human rights, compliance

monitoring focuses primarily on combating discrimination

and promoting equal opportunity (see Chapter 17), well-

being at work (occupational accidents and illnesses,

MSD, psycho-social risks) and combating corruption.

Combinating corruption constitutes an integral part of the

conduct of business procedures (see Section 5.4.3).

La Poste has a specific plan to confront natural disasters

in French territory as part of its public service obligations,

along with an assistance plan for postal workers affected

by these phenomena.



5.4.5.2 Make Quality of life at work a priority

As a cornerstone of the Group's strategy, Quality of life at

work is the subject of a commitment and action plans. This

commitment is covered in Chapter 17, Section 17.5.

5.4.5.3 Responsible management of change

Responsible management of change is based on the desire

of real quality of employment and life at work the concern

for developing employability, allowing for functional mobility.

The method for implementing organizational changes was

negotiated in early 2012, tested for six months and followed

by full-scale adoption in November 2012. A warning

system was implemented to identify the occurrence of any

deviations from targets in the field.

In the area of the development of employability for staff,

Le Groupe La Poste enhances its processes for developing

skills. The commitment to at least one training program per

year and per employee is included in operational targets for

the various Business Lines and subsidiaries.

5.4.5.4 Developing a more responsible management

Responsible management includes managerial identity

(a manager who is both efficient and responsible for the

consequences of his/her decisions, innovative and true to

the Group's values, cooperative and attentive to everyone,

brave and respectful of women and men), and economic,

social, environmental and societal dimensions in the

decision-making process, as well as paying attention to

spreading the benefits evenly among stakeholders who are

affected by change.

Its implementation requires a change in behaviour. To

support the implementation process, Le Groupe La Poste

calls upon its managers to discuss day-to-day responsible

management practices at the “Meetings for Responsible

Development” platform. 13 meetings were held in

metropolitan France. Drawing on this experience, the Group,

working together with French philosopher Yves Michaud,

recorded a significant portion of the lessons learned in

a work entitled "What Is Responsible Management?",

4,000 copies of which were distributed.

5.4.6.1 Preventing environmental risks

Given its business activities, La Poste is not responsible for

any high-risk environmental impact.

Due to changes in the legal and regulatory provisions,

including several major decrees and decisions that were

issued in 2013, Le Groupe La Poste monitors and analyses

obligations that may affect its business activities. These

obligations may affect customers or the regions where

Le Groupe La Poste operates, and require the Group to

adapt.

In addition to this monitoring, Le Groupe La Poste

contributes, alongside institutions, to the definition of

standards in areas of significant impact for the Group.

Since 2013, it has been a founding member of the Institute

for the Circular Economy to define the institutional

environment favourable to the development of this new

more environmentally-friendly economy.

5.4.6.2 Reducing the environmental impacts of transport

La Poste (1), where over 1.6 billion km are travelled per year

(excluding exports), uses a fleet that includes combustion

vehicles (11,938 motorbikes, over 50,000 light vehicles

and 328 heavy goods vehicles) and electric vehicles

(16,236 electric bicycles, 1,041 quadricycles and 3,677 light

vehicles). It pays particular attention to the environmental

impacts of its fleet and to those of its transport sub-

contractors.

In 2013, La Poste (1) emitted 581,532 tons of greenhouse

gases relating to its transport activities, i.e. a decrease of

7% compared with 2012 at similar consolidation scope,

despite a 0.82% increase in ColiPoste’s traffic and a 1.09%

increase in the number of Mail distribution points.

5.4.6 Get involved to preserve the environment

(1) Scope: La Poste, La Banque Postale, Mediapost SAS.



To reduce the environmental impact of its fleet, its direct

CO2 emissions and atmospheric pollution, La Poste relies

on several drivers:

technological, by pursuing the integration of more

environmentally friendly vehicles within its internal

fleet. The replacement of internal combustion vehicles

by electric vehicles constitutes an important contribution

to reducing CO2 emissions, emissions of air pollutants

(particulates, NOx) and noise pollution. This is

complemented by a steady change in the fleet to bring it

up to the latest European standards;

use of lower impact means of transport. Mail is reducing

its use of air transport and is developing the use of rail

notably combined road-rail transport (swap bodies).

In 2013, 12 swap body transport links were in service.

Every swap body connection replaces a semi-trailer road

transport link;

logistical, by optimizing rounds and loads. At the end of

2013, 69% of ColiPoste’s national links used the unsorted

delivery method compared with 67% at the end of 2012;

a behavioural driver, by providing environmentally friendly

driving training to its employees (79,195 employees

trained since 2007).

The specifications for the Group’s purchase of sub-

contracted transport have included environmental criteria

fuel consumption and European standards. The process

continues with the assessment of other criteria such as

the age of equipment and environmentally-friendly driving

training. Since 2013, Mail has asked its service providers

for data on unit consumption for vehicles used in order to

more precisely manage its own transport service related to

CO2 emissions.

Furthermore, La Poste is currently determined to increase

its expertise relating to understanding and managing

environmental impacts other than CO2. In this context, Mail

signed a partnership agreement with the France Nature

Environnement organization in 2013, in order to work on

issues relating to atmospheric and noise pollution in the

transport field.

5.4.6.3 Reducing the environmental impacts of buildings

Significant changes in French environmental regulations

have led to profound transitions and real estate sector

practices (construction, renovation and operations).

With a portfolio of 11,847 managed properties, i.e.

6.7 million sqm, 3.97 million sqm of which are wholly-owned

(see Section 5.1.5), Poste Immo is taking action to reduce

energy consumption and CO2 emissions. In late October

2013, Poste Immo signed the Energy Efficiency Charter for

Public and Private Office Buildings, and is developing its

initiatives based on several drivers:

ensuring the right scale of its real estate assets and

ensuring that they meet customer requirements and

uses;

construction of buildings using best market practices,

with a BBC/HQE (Low Energy Consumption Building/

High Environmental Quality) level and ensuring the

environmental efficiency of the building through the

progressive addition of green leases. Since 2010, six

low-energy buildings have been delivered in conjunction

with the introduction of green leases (1). The signing of

green leases was intentionally expanded in 2013, via

the signing of 182 green leases in addition to the seven

leases already in effect. At the end of 2013, green leases

signed covered 36 buildings;

developing renewable energy (RE) sources for

construction projects is being systematically studied.

Furthermore, Poste Immo rolled out 42 solar power

installations, which were executed as part of a partnership

(representing 27,733 sqm of solar panels) via its Arkasolia

subsidiary at the end of 2013; 22 of the installations

(representing 17,703 sqm) were installed in 2013;

improving the energy performance of the existing

portfolio: this is a major challenge for La Poste given

the size of the portfolio. Achieving better energy

performance occurs through two main channels:

performing renovation work and processes involving the

use and operation of buildings.

(1) Decree No.2011-2058 of 30 December 2011 requires the signing of an environmental appendix for leases involving premises of over 2,000 sqm for offices

or retail use. The decree's provisions apply to leases signed or renewed starting as 1 January 2012 and, as from 14 July 2013 for all leases in force.



5.4.6.4 Reduce the environmental impacts of information systems

Le Groupe La Poste has launched a program to reduce

the CO2 emissions relating to its information and

communication systems. As part of the Group's responsible

purchasing policy, specifications aimed at promoting "Green

IT", namely environmentally-responsible information

and communication systems, are now added to the

specifications for the suppliers involved. Requirements are

mainly based on eco-labels and energy performance of IT

and telecommunications equipment.

5.4.6.5 Preserving biodiversity, optimizing resource use and waste management

Because of the nature of its business activities, Le Groupe

La Poste is a significant consumer and carrier of paper.

Environmentally responsible paper use represents a

challenge for the Group. In 2013, La Poste, La Banque

Postale and Mediapost consumed 17,600 tons, of which

97.5% was environmentally-responsible paper (an

increase of +3.3 points compared with 2012). All entities

are encouraged to favour environmentally responsible

paper for their own purposes (i.e. recycled paper, labelled

environmentally friendly or from sustainably managed

forests).

Launched at the beginning of 2012 with micro-businesses,

SMEs, and local authorities, Le Groupe La Poste's office

paper collection and recycling solution, Recy'go has now

rolled out across France and has met with promising

success. 2,077 companies have already chosen this Mail

offering, or that of its subsidiary, Nouvelle Attitude, together

with a portion of Le Groupe La Poste's internal facilities,

i.e. over 8,277 tons of paper in volume terms, 2,987 tons

of which are collected by postmen. Bolstered by this first

success, the Mail division envisages expanding its offering

to other sectors, such as ink cartridges or professional

clothing, for example.

Regarding water resources, Le Groupe La Poste does not

use water in its production processes (with the exception of

the printing works of the Service national des timbres-poste

(National Service for Stamps), which is ISO 14001 certified).

Water consumption is related to the occupation of premises

(bathrooms, food service, etc.). Reducing consumption is

included in cost reduction plans and awareness-raising

campaigns on eco-friendly practices.

Le Groupe La Poste's business activities generate a wide

variety of waste (including waste from electrical and

electronic equipment, used office paper, packaging waste,

cardboard boxes, pallets and plastic). The Group is gradually

implementing action plans for sorting, treating and

recycling its waste, for instance, on the Mail and ColiPoste

Industrial Platforms, where the quantities involved allow

for the optimization of waste management. The ISO 14001

certification of the environmental management system

on the 15 ColiPoste platforms also improved waste

management, reduced energy and water consumption and

prevented pollution risks.

Group sites in France are implementing, when necessary,

actions to comply with new obligations limiting the use of

nocturnal lighting for buildings.

5.4.7 Dialogue with stakeholders

Particular attention is paid to dialogue with the primary

stakeholders, notably consumers, local elected officials,

employees, as well as entities in the customer value chain,

sub-contractors, and suppliers.

5.4.7.1 Consumers

La Poste has been consulting with consumer associations

since 1989. This is an essential component of La Poste’s

consultation with its stakeholders. The Le Groupe

La Poste Mediator oversees a consultation process

with 17 recognized national consumer organizations,

which originate from three main movements: the family

movement, the labour movement and the specialized

consumer movement.

There are two levels of consultation: the national level

(including meetings with the Group's Chairman and Chief

Executive Officer) and the local level (through the Group's

Regional Representatives).

National consumer associations play a key role through

participation in various activities of the Company. For

example, suggestions from the annual consumer claims



meeting, co-hosted by the Quality Department of the

Group, brings together, La Banque Postale, Chronopost and

national consumer associations, are taken into account in

developing changes for handling and responding to claims:

changes to the paper claim form, and simplification of the

Customer Service area on www.laposte.fr.

The associations have the opportunity to visit several

operational premises, such as the consumer service call

centre, the platform of the TGV Postal (fast train for mail),

the Parcels and Mail Platforms.

5.4.7.2 Staff

2013 was characterized by a wide-ranging staff consultation

process regarding the strategic project, in which

150,000 people took part. The year was also particularly

eventful from the standpoint of dialogue with employees,

and included the signing of several agreements. Detailed

information on actions in this area is presented in

Chapter 17.

5.4.7.3 Local elected officials

Aside from its legal obligations relating to regional planning

and development, Le Groupe La Poste is very attached to the

idea that social dialogue and consultation are at the heart of

discussions with elected officials. Le Groupe La Poste, and

more recently La Banque Postale, are historic and trusted

partners for the local public sector.

To jointly develop solutions for postal service coverage

that meets the needs of the population, Le Groupe

La Poste is pursuing collaborative work with regional and

national governance bodies implemented under the local

postal coverage agreement and partnerships with the

French Mayors Association (see Chapter 5, Section 5.3).

A new postal service coverage agreement for the period

between 2014 and 2016 was signed on 16 January 2014 by

La Poste, the French government, and the French Mayors’

Association. Furthermore, Le Groupe La Poste has signed

annual agreements with associations of elected officials

with the purpose of renewing partnerships based on the

goal of sustainable regional development.

In response to requests expressed by elected officials,

Le Groupe La Poste has established 22 regional offices

since January 2008, in order to strengthen its regional

roots. The regional officer henceforth serves as the Group's

representative for the region in question. Serving as a single

entry point, this officer is also the preferred contact for

elected officials and regional socio-economic stakeholders.

La Banque Postale, which has been rolling out a new

financing model for local authorities since 2012, extended

its offering of short, medium and long-term loans to public-

private companies, local public enterprises, and public

healthcare institutions in 2013, and will offer other services

in the future.

2013 was marked by a broad consultation with elected

officials on the strategic product.

5.4.7.4 Suppliers

By adhering to the United Nations Global Compact in

February 2003, and to the Intercompany Relations Charter

of 28 June 2010, Le Groupe La Poste has committed to

respecting and promoting principles pertaining to human

rights, labour rights, the environment, combating corruption

and responsible purchasing. Since January 2008, Le Groupe

La Poste has asked its suppliers to make a commitment

themselves and work alongside it via adhering to the

Responsible Purchasing Charter, which requires them to

comply with the same principles.

With more than 30,200 active suppliers, La Poste has

implemented a broad array of tools that enable it to

incorporate responsible criteria for selecting the products

and services purchased into its purchasing process and

across all purchasing categories that it handles. All areas

of purchasing are now covered.

Furthermore, La Poste seeks to ensure that all companies

have access to bid as vendors and suppliers to its contracts.

La Poste has therefore made its general purchasing terms

and conditions freely available for download on the www.

laposte.fr website, in the “Suppliers” area. It also publishes

all purchasing transactions involving amounts exceeding

the European threshold set out in the Official Journal of

the European Union (OJEU), as well as specific categories

of purchases, in the trade media. Additionally, since 2012,

the SME Pact site automatically transmits all purchasing

opportunities published on the website. Le Groupe La Poste

also endorsed in June 2010 the Intercompany Relations

Charter governing relations between major purchasing

decision-makers and SMEs. Buyers are reminded of the

terms of this Charter in the Procurement Ethics Guidelines.

Buyers are also informed of the existence of the Pas@Pas

platform (see Section 5.4.8.1), which offers vehicles to

publish their purchasing consultations for the sheltered

sector and the professional integration sector.



5.4.8.1 Contributing to local economic development

Through its activities, the Group occupies a important

role in French regions. It plays an active role in regional

think-tanks and in developing their structural policies such

as the Regional Climate, Air, Energy Programs, Climate

Plans, Agenda 21, urban development plans, and local

accessibility plans, etc. La Poste brings its expertise on the

transportation of goods and people, and is specifically highly

committed to rolling out company and intercompany travel

plans (62 active plans at the end of November 2013). The

Group contributes to setting up structuring projects for the

territories and adapt its business activity.

La Poste is committed to promoting job growth in French

regions:

by facilitating the development of SMEs and participants

in the social and solidarity-based economy. A member

of the SME pact, it contributes to increasing their

number among its suppliers. La Banque Postale offers

professional micro-loans in partnership with Adie, in

order to help with company start-ups and handovers,

and also offers loans and factoring services to SMEs;

by taking part in setting up the Pas@Pas organization,

and jointly designing the shared Internet platform. "Pas@

Pas" puts buyers from member companies in direct

contact with 4,000 companies in the protected work and

professional reinsertion sectors;

Le Groupe La Poste has continued its actions to raise

awareness amongst buyers on charitable purchases

(purchases from the disabled and sheltered sectors)

and is looking to increase the proportion of purchases

from these sectors. La Poste wants to increase the

share of its purchases that is entrusted to these sectors

(€13,971 million for La Poste in 2013).

Thanks to the resources generated through carbon

offsetting, Le Groupe La Poste is developing projects aimed

at reducing greenhouse gases and promoting economic and

social development in the French regions.

5.4.8.2 Contributing to the development of new areas

Human capital, the number of customers, local ties and the

range of its business activities make Le Groupe La Poste

a major player in environmental, economic and societal

changes.

5.4.8.2.1 Developing solutions for sustainable

mobility

This positioning confers a training role to the Group in

favour of multi-player innovative projects, in particular in

the development of sustainable mobility. In this manner, the

Group has devoted considerable resources to developing a

fleet of more eco-friendly vehicles.

2011 was characterized by the pooled order for electric

vehicles led by the Group's Chairman, which aimed to

structure the demand for electric vehicles and contribute to

the emergence of an industrial sector. Following four years

of work organizing and bringing together the needs of public

corporations, roughly 20 private companies and local and

government authorities, an order for nearly 20,000 vehicles

was submitted, including 10,000 for La Poste. This approach

has led to the creation of a competitive and sustainable

offering contributing to the emergence of a French sector

for light utility vehicles.

Greenovia, the dedicated transportation and mobility

consulting subsidiary, demonstrates Le Groupe La Poste’s

commitment to contribute to discussions regarding new

forms of mobility: it aims to capitalize on the know-how

that the Group has acquired in the fleet management

area, in order to help companies and local authorities

with their transition projects, for instance, via optimizing

the management of vehicle fleets, assisting with the

introduction of electric vehicles, and developing innovative

solutions (car sharing, and car pooling, etc.).

Initially focused on training staff in eco-driving, Mobigreen,

a subsidiary of Mail, diversifies its business activities to

include the handling of electric vehicles and the integration

of road safety into its training.

5.4.8 Working towards the success of joint projects that contribute to the sustainable performance of the Company



5.4.8.2.2 Developing recycling

La Poste is contributing to the creation of a connected

regional network to recycle office paper in the service of the

French regions and establishing a profitable, sustainable

economic model for creating local jobs. With Recy’go,

Mail has launched a program for the collection of office

paper for recycling from micro-businesses, SMEs and local

authorities and developed a project aimed at promoting

the socially inclusive and social economy, which sorts

and processes this paper (either via the Nouvelle Attitude

subsidiary, a company that aims to integrate people via

business activities, or via its local partners). Lastly, La Poste

has undertaken to have the paper collected by postmen

recycled, and to perform this recycling process in France.

5.4.8.2.3 Developing services for individuals

Furthermore, La Poste is entering the in-home services

market, either through its postmen (La Poste has

committed to contributing to the Silver Economy contract

co-launched by the Minister for Productive Renewal and

the Minister in charge of the Elderly) or by developing the

area of services for connected homes: the Newton project

relating to the services provided by postmen. La Poste

is trialing the delivery of medicines, meals and books (a

service that is called COHESIO).

5.4.8.3 The Group's and postal workers' commitment to social integration

5.4.8.3.1 The Group's commitment to social

integration

A policy of commitment to solidarity was adopted by the

Executive Committee. The initiatives aimed at social

integration focus on access to money, the encouragement

of social diversity, access to information, and access and

return to work. They rely on joint initiatives with volunteer

employees.

Beyond assuring access to its service offering to the

largest possible number, its objective of contributing to

social integration (see Section 5.4.4.1.3) is supplemented

by several initiatives. La Banque Postale supports the

Institut pour l’éducation financière du public (institute for

public financial education) not-for-profit organization, and

the Entreprise et Pauvreté organization whose purpose is

to encourage companies to develop experimental projects

that have an impact on reducing poverty and exclusion in

France. It also launched the “Appui” (“Support”) counselling

and banking and budgeting guidance platform in October.

La Banque Postale offers customers who are experiencing

temporary or recurring financial problems services like

banking and budgetary support, and an introduction to

partners, organizations and social services, in order to

expand access to entitlements and to socially inclusive

offerings. The aim is also to improve prevention of financially

fragile situations.

An online study was conducted to review solutions adopted

by people under financial constraints, through social

networks. The resulting information has served to enhance

the training of postmen in contact with these populations.

Le Groupe La Poste, together with TF1, Orange, L'Oreal,

Publicis and Manpower founded the Ba’-A’-ba Solidarité

intercompany organization that combats illiteracy and

provides access to basic skills within companies.

The Group is also involved within this framework in

promoting the employment of vulnerable persons by:

informing the most vulnerable young people and

job-seekers about its businesses, via: taking part in

local authorities’ job fairs, local integration plans, in

employment organizations’ plans (local missions, and

job centres);

developing mentoring and sponsorship programs for

young people and job seekers (signing of a partnership

agreement with the “Nos Quartiers ont des Talents” (Our

districts have talent) organization and with the French

“second-chance schools” in December 2012). La Banque

Postale founded the “L’Envol” (Take-off) organization in

2012. The aim of this organization is to help talented

students from low-income (urban and rural) households

to make their way through secondary and higher

education. The students are identified in junior high

school, and receive financial and cultural support from

volunteer postmen from Year 10 until their entry into a

higher educational stream.

Le Groupe La Poste supports its employees’ commitment to

solidarity: internationally, by financially supporting two non-

profit associations: Planète Urgence (since 2006) and France

Volontaires (since 2008). In 2013, 46 Group employees went

on humanitarian leave, bringing the number of employees

who have given their time and expertise to educational and

socio-economic missions to nearly 500.



5.4.8.4 Contributing to research

For the Group, investment in CSR related research makes

it possible to open up new possibilities or solutions in order

to come into line in a timely and appropriate manner to

evolving lifestyle, organizational or technological trends.

Furthermore, by virtue of the range of its business activities

and its interaction with all segments of society, Le Groupe

La Poste represents an appealing testing ground for various

research groups.

The Group is party to major projects associated with

researching how to incorporate CSR into management

practices. It is in particular:

a founding member since 2007 of the French Network of

Responsible Managers, established by KEDGE Business

School (formally Euromed Marseille), which brings

together the sustainable development and diversity

managers of major groups on a monthly basis;

sponsor of the Paris-Dauphine Diversity Chair, which

finances research and provides diversity management

training. In 2013 the thesis focusing on "Diversity

policy as a driver of corporate change: strategic stakes

and socio-organizational dynamics" allowed Maria

Guiseppina Bruna to earn her doctorate.

La Poste is a founding sponsor of a new academic chair

on the circular economy, alongside the KEDGE business

school, SNCF, Orange and several NGOs. Launched

on 18 April 2013, the goal of this research chair and

management entitled "Business As Usual" is to rethink

existing economic models and to explore new ones.

5.4.8.5 Coach the international postal sector

In 2012, Le Groupe La Poste became the Chairman of the

sustainable development project group founded by the

UPU (Universal Postal Union, a specialized United Nations

agency for the postal sector, which includes 192 nations

throughout the world), and actively contributed to organizing

and carrying out seminars on every continent, in order to

raise awareness of sustainable development among the

various postal services, and help them design their own

strategies in this area. These seminars led to a sustainable

development action plan for each postal service involved.

Since 2004, the Group has accordingly co-financed and

organized 10 seminars in every region of the world.

Notably, in 2013, the Group provided training on sustainable

development to postal services in the Mediterranean

Region.

At the last UPU meeting, which was held in Doha (Qatar)

in the autumn of 2012, the postal services of 192 countries

adopted a project aimed at setting up a sector-based carbon

offset scheme called the "Postal Carbon Fund", on France’s

recommendation. This will be implemented in 2014.

Over a one-year period, one individual helped Correos,

the Costa Rican postal service, Correos, to roll out its

sustainable development plan. Then, over a period of six

months, this individual helped the Ecuadorian postal

service (Correos del Ecuador) to implement its sustainable

development strategy and vehicle plan, which resulted in a

call for tender for 200 electric utility vehicles for the delivery

of mail, express mail and parcels.

The Memorandum of Understanding (MOU) with Japan Post

Services, the Japanese postal service, was renewed for

three years in 2012, and focuses on several issues including

stamp-collecting and sustainable mobility. It will have led to

two meetings-seminars this year with an accent specifically

on the record of electric vehicles.

An MOU with Correios do Brasil, the Brazilian postal service,

was signed in 2012 and resulted in the first discussions

between both parties, including discussions relating to the

issue of sustainable development, in the autumn of 2013.

An MOU was signed with the Moroccan postal service in

March 2012, with a view to sharing practices, including

practices relating to gender equality and electric vehicles.

Several discussion seminars were held in 2013, and a

certification process by the Moroccan CSR Label, delivered

by CGEM (the General Federation of Moroccan Companies)

was launched in spring 2013 with the jointly-owned

subsidiary of the Moroccan postal service and GeoPost

(EMS Chronopost International Maroc-CIMA).


Overview of business activities Quality of customer relations5

Excellence in service relations and trust are key components

of the Group's quality policy. From 2009 to 2013, the policy

deployed through the "Service Ambition" strategic project

is organised around the following lines of action:

increasing trust via customer commitments;

simplifying the relationship by developing a Group

multi-channel system and pushing forward with service

innovation;

introducing a service-oriented attitude based on the

individual and collective commitment of all staff;

establ ishing customer-focused oversight and

management at all levels of the Company.

Le Groupe La Poste is conducting an initiative for sharing

best practices among major institutions and professional

associations dealing with quality and customer relations.

As part of the process for drawing up Le Groupe La Poste’s

new strategic plan, the 2014-2020 quality policy priorities

were defined with the Business Lines, and focus on three

main lines of action:

simplification;

personalisation;

consideration.

5.5.1.1 Customer service commitments and trust

Trust is at the heart of La Poste’s brand and the key

component in the service relationship. 70% of French people

said that they trusted La Poste in 2013 (1).

To maintain and strengthen this relationship of trust, since

2009, Le Groupe La Poste has implemented an ongoing

process of customer commitments:

provide customers with information on its services

annually;

provide access to information on mail delivery terms and

conditions;

offer a repeat delivery free of charge for registered

letters at the request of the recipient;

improve claims processing: send an acknowledgement of

receipt within 48 hours of a claim being dropped off with

a deadline for providing a response, in particular thanks

to the introduction of a Multi-Channel Customer Service;

cut waiting time in the 1,000 largest post offices

by customer visits to under five minutes for fast

transactions, such as mail or parcel drop-off/pick-up.

Results have been particularly positive and have been

improving from 2009 to 2013. In November 2013, the wait in

the 1,000 largest post offices was reduced by 3.30 minutes to

pick up or drop off mail and parcels, and 81% of customers

were serviced in less than 5 minutes (2). The commitment

compliance rate for Mail delivery remained above 95%

(with automatic cost indemnification for the customer in

the event that commitments are not met) and the goals

on commitments tied to claims processing were reached

again in 2013 thanks to action plans in the Business Lines

(continuing training in quality of responses, reinforcing

teams, simplifying online claims forms, the development

of online customer satisfaction initiatives, etc.).

(1) Ipsos/La Poste reputation barometer, consolidated results for 2013.

(2) Quality Inspections—La Poste Retail Brand Quality Department—December 2013 cycle.

5.5 Quality of customer relations

5.5.1 The Service Ambition project


Overview of business activities Quality of customer relations 5

The customer commitment policy has been continuously

strengthened by Mail since 2010. Furthermore, the Retail

Brand has developed an ambitious programme for certifying

the service commitments of its post offices:

After an initial consultation launched in 2010 with all

of its customers and the publication of four Customer

Commitment Charters on 2 January 2011 covering each

customer segment, Mail relaunched a new consultation

with its customers in 2012 and published new customer

commitments in September 2013.

Based on a service commitment framework that was

jointly designed with customers and employees of the

Group, Le Groupe La Poste Retail Brand awarded an

AFNOR “Service Commitment” certificate to almost

1,400 post offices at the end of 2013. This means that

La Poste now offers the largest network of “Service

Commitment” certified branches in Europe.

5.5.1.2 Simplification of customer relations

In order to facilitate its relationship with its retail customers,

La Poste established the Group’s Multi-Channel Customer

Service. This offers customers a particularly simple and

direct access to all of La Poste’s services—notably for filing

claims—through:

a unique abbreviated phone number without a surcharge

(3631);

a specific consumer area on the homepage of the Group

website portal (www.laposte.fr);

and a unique postal address: Service Consommateurs

—99999 LA POSTE.

Today, traffic volumes reflect the success of this service,

which responds to real consumer expectations. Over

840,000 calls are made to the “3631” number every month,

over 122,000 unique visitors consult the Customer Service

area on the Internet every month, and over 21,000 paper

claim forms are sent to the Customer Relations Department

by mail every month, on average.

After being awarded the 2010 Customer Service award

the year of its launch, in November 2013, the Group’s

Customer Service received the "Customer Relations Centre"

NF Service certification for its Mail section for the third

consecutive year, and the telephone platforms of the Retail

Brand for the second time. Several customer relations

service innovation projects were standardised for general

use or enhanced in 2013: implementing WebCam access in

French language sign language for the hearing impaired,

adopting natural language functionality for the 3631 vocal

server, and automated continuous measuring accessibility

for Internet forms. Finally, an automatic semantic claim

assessment system has been trialled, in order to enable an

ongoing qualitative voice assessment of customer claims.

On social media, since July 2012, a team of Customer

Services call centre agents now intervenes alongside the

community manager of the Group to respond to customer

service requests and claims posted on the Group's Facebook

page and through the Twitter account @lisalaposte.

5.5.1.3 Service culture of Group employees

The service-oriented attitude is made up of a service

relations management model. It presents itself as a series

of key attitudes and skills built on La Poste’s values, which

make it possible to build long-term high-quality customer

relations based on the professionalism and commitment

of postal workers.

Built together with customers and the Group's employees,

the content of the service-oriented attitude is structured

around welcoming, listening, and efficiency. Based on

the principle of balanced attention, the "Service-oriented

attitude" approach rolls out these attitudes to the three

levels of service relations: between employees and

customers, between managers and employees and between

Business Lines. The development of a service culture has

been accompanied by a major training initiative (over

100,000 training sessions including service culture are

provided at the Group on an annual basis, including a 1.5-

day session for all newly appointed strategic managers).

Local meetings combining first-hand accounts from

companies and workshops, called “Instants Qualiades”,

are organised on the implementation of service-oriented

attitude.

Mail has integrated service-oriented attitude into the

management of its offices (notably through a "Service-

oriented attitude" memo resulting from customer

surveys) and the Customer Relation/Service-oriented

attitude function was implemented in its offices in 2013.

The Retail Brand has incorporated the "Service-oriented

attitude" approach into its service standards. ColiPoste

has incorporated "Service Culture" into its program aimed

at developing greater responsibility and independence

in teams' local initiatives. Lastly, after successfully

experimenting in five financial centres for over one year,

La Banque Postale has adopted the "Service-oriented

attitude" for general use in all financial centres as at

27 November 2013. A reference guide for service practices

was produced, drawing on input from customers and staff

in financial centres. La Banque Postale's "Service-oriented

attitude" approach was carried out in cooperation with

the Retail Brand in order to ensure optimal consistency

for the customer experience. In this way, joint work has

been carried out on simplifying the five customer service

itineraries: accessibility and first-line service, urgent

transactions, personalised service, property lending and

claims.


Overview of business activities Exceptional events5

Participative innovation, which is what really drives the

service-oriented attitude, continued to develop in 2013

within each Business Line, around Intranets dedicated

to the promotion and circulation of ideas, as well as

through challenges directed towards implementing the key

attitudes of service-oriented attitude. Over 12,318 ideas

were registered in 2013. The most outstanding ideas are

selected by a panel every year, and prizes are awarded to the

proponents of the best ideas by the members of the Group

Executive Committee and the Heads of each Business Line

at the "Trophées Qualiades" award ceremonies.

5.5.1.4 Management of customer relationship quality

Customer commitment performance measures feed into

scorecards at all corporate levels. They are monitored

every month by the Executive Committee, and are regularly

presented to the Quality and Sustainable Development

Committee of the Group’s Board of Directors and to

Consumer Associations at plenary meetings and working

groups on customer relations, in particular as regards

claims processing.

Measurements of customer perception have been

strengthened by standardisation of tracking for the satisfaction

rate and effort rate. Waiting time measurements in post offices

are based on a significant volume of "mystery" visits (40,000

per year in the 2,000 most important post offices).

Customer commitments pertaining to the reduction of

post office waiting times made up an integral portion

of calculating the employee incentive-based pay for all

employees of La Poste.

The Group’s Quality Department backs up and supports the

Group’s Business Lines and support services by choosing

benchmarks and obtaining various quality certifications (e.g.

ISO and service) or certificates of excellence.

La Poste contributes to the development and dissemination

of quality management best practices through its

participation in quality associations (e.g. Chairmanship

of Anfor’s “Management & Services” Committee, of the

Innov’Acteurs association, AFQP—Association France

Qualité Performance, etc.), its partnerships with the leading

standard setting bodies and universities, the intercompany

associations it coordinates (e.g. Best Practices ISO or

Club Benchmark EFQM) and a very active presence on the

Board of Directors of service professions associations and

customer relations associations (e.g. Association Française

de la Relation Client, Association pour le Management de

la Réclamation Client, Institut Esprit Service). In this area,

Le Groupe La Poste was recognised for the quality of its

Chairmanship of the AFNOR commission that published the

first worldwide standard for "online consumer opinions" in

July 2013 and for the coordination of work conducted at

the European level for draft text on "service excellence

systems". In addition, Le Group La Poste held the

Chairmanship for the first edition of La Fête des Services,

a service innovation competition launched within the

framework of the National Services Commission.

5.5.2 External recognition of the customer relationship quality

5.6 Exceptional events

5.7 Dependence on patents

Not applicable.

Not applicable.


6Simplified organization chart



The Group is structured around the five operating segments

described in Note 5 to the consolidated financial statements

(income statement and main elements of the balance

sheet). Each operating segment, with the exception of the

Banking activities segment, comprises a division of La Poste

and a top level subsidiary, with each first level subsidiary

itself having several subsidiaries listed in Note 41 to the

consolidated financial statements.

A large majority of the Group’s debt is held in Le Groupe

La Poste’s accounts.

BusinessLine

Secteursd'activité

Units of La Poste

First level subsidiary

Mail La PosteMail SofiPost

GeoPost

Poste Immo

La Poste Télécom (2)

Véhiposte

Secteursd'activité

Parcels/Express La PosteParcels

Secteursd'activité

Banking Activities La PosteFinancial Services

CNP

Secteursd'activitéReal Estate La Poste

Real Estate Division

Secteursd'activité

La Poste Retail Brand La PosteRetail Brand

Secteursd'activité

OtherLa PosteSupports

and registered offices

(20.15%)

La Banque Postale

La Poste

(1)

(1)

(1)

(1)

(1)

(1)

(100%)

(100%)

(100%)

(100%)

(51%)

(100%)

(1) See detail of each operating segment's subsidiaries in the scope of consolidation presented in the consolidated appendix.

(2) Joint venture owned together with SFR.

Percentage: of ownership interests (%).



The main second or third level subsidiaries in the Mail, Parcels-Express and Banking activities segments are the following

(with percentages of the Group’s interest):

DOCAPOST(100%)

Desktop publishing Logistic

VIAPOST(100%)

Marketingcommunications

MEDIAPOSTHolding(100%)

Internationalmail

ASENDIA(50%)

SofiPost(Mail)


CHRONOPOST(France)

(100%)

EXAPAQ(France)

(100%)

DPD Germany Entities

DPD UK Entities

SEURSpain Entities

GeoPost Intercontinental

Entities

DPD GeoPost Gmbh (100%)DPD Vetriebsgesellschaft (84%)DPD Aschaffenburg (84%)DPD Betriebgesellschaft (84%)DPD Delicom (84%)

GP UK Ltd (100%)Interlink Express Parcels Ltd (100%)

SEUR GeoPost (92%)Menexpres (92%)SEUR International (92%)SEUR SA (59%)

DPD laser (75%)

GeoPost(Parcels-Express)




Sopa

ssur

e(5

0%)

CNP

(20,

15%

)

LBP

Prév

oyan

ce(5

0%)

LBP

Cons

eil

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ssur

ance

s (1

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)

LBP

Assu

ranc

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RD

(65%

)

LBP

Assu

ranc

essa

nté

(65%

)

LBP

Asse

tM

anag

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t(1

00%

)

LBPS

AM(1

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)

Tocq

uevi

lleFi

nanc

e(9

2%)

LBP

(99,

99%

)

SF2

(100

%)

SCI

LBP

Gest

ion

Priv

ée(1

00%

)

CRSF

DOM

(100

%)

CRSF

Mét

ropo

le (1

00%

)Te

rtia

ire S

t Rom

ain

(100

%)

Insu

ranc

eR

etai

l Ban

king

/ L

endi

ngAs

set M

anag

emen

t

(50%

)

(36.

25%

)

LBP

Colle

ctiv

ités

loca

les

(65%

)

LBP

Créd

itau

x en

trep

rise

s(1

00%

)

LBP

Fina

ncem

ent

(65%

)

La B

anqu

e Po

stal

e (

Ban

king

Act

iviti

es)

Perc

enta

ge: o

f ow

ners

hip

inte

rest

s (%

).


7

7.1 The Group’s assets 110

7.2 Environment and sustainable development 111

Property, plant and equipment


Property, plant and equipment The Group’s assets7

7.1 The Group’s assets

The net book value of the Group’s intangible assets

(excluding goodwill) and property, plant and equipment

amounted to €6,758 million as at 31 December 2013,

compared with €6,887 million as at 31 December 2012.

The Group does not calculate the market values of its assets

and liabilities. However, it carries out frequent valuation

tests on samples of assets when researching impairment

indices.

Information on fixed assets broken down by nature

is presented in Note 17 of the consolidated financial

statements and Note 10 of the parent company financial

statements.

The Group’s main assets are made up of fully owned or

rented property assets.

The vast majority of the Group’s property assets are

managed by the real estate operating segment, which

includes Poste Immo (wholly-owned) and the La Poste’s

real estate division.

The Group’s property assets (most of which are in the real

estate operating segment) were broken down as follows as

at 31 December 2013:

GROUP PROPERTY ASSETS BY CATEGORY

(thousands of square metres)Directly-owned

propertiesRented

properties

Mail platforms 1,255 1,366

Parcels-Express platforms 182 917

Financial centres 351 19

Post offices 1,406 1,178

Administrative buildings 566 532

Other sites 641 1,498

Total 4,402 5,510

The assets managed by the real estate segment represented 3,974 million m² of floor space in wholly-owned properties and

2,726 m2 of floor space in rented properties at the end of December 2013.

GROUP PROPERTY ASSETS BY GEOGRAPHIC AREA

(thousands of square metres)Directly-owned

propertiesRented

properties

France 4,169 3,852

Europe 233 1,218

Other continents 0 440

Total 4,402 5,510

Other property, plant and equipment include vehicles, machinery and office fittings.


Property, plant and equipment Environment and sustainable development 7

The net book value of capital assets by type and sector as at of 31 December 2013 is presented as follows:

Net book value(€ million) Mail

Parcels-Express

Banking activities

Retail Brand Real estate

Shared Services Total

Intangible assets 251 143 327 44 41 10 816

Land and buildings 22 354 358 0 2,880 0 3,614

Machinery and equipment 332 245 158 7 0 40 782

Vehicles 26 32 0 0 0 432 491

Other tangible assets 185 72 121 87 352 55 872

Assets under construction 15 85 5 0 77 1 182

Total 833 930 969 138 3,350 538 6,758

7.2 Environment and sustainable development

This section is covered in Chapter 5, Section 5.4 “Corporate Social and Environmental Responsibility”.


8

8.1 Innovation in action 114

8.2 Intellectual property policy 116

Innovation and intellectual property


Innovation and intellectual property Innovation in action8

As a multi-business service provider, innovation is a critical

component of Le Groupe La Poste’s strategy for anticipating

and adapting to profound global transformations in its areas

of development.

To that purpose, its innovation strategy takes into account

such major developments as:

population ageing in France and Europe;

transformations in consumer practices and retail trends;

the advent of a digital society whose repercussions go

well beyond the simple digitisation of exchanges.

These changes entail both risks and also challenges for the

Group’s development. For that reason, the innovation policy

has focused on three priorities:

opening to external innovations;

paying careful attention to those technologies that are

revolutionising practices and uses by different customers

to test service innovations (1);

promoting an internal culture conducive to innovation.

8.1 Innovation in action

Innovation efforts are deployed at all Group levels, with cross-entity initiatives on the one hand and actions in each of the

Business Lines on the other hand.

8.1.1 Developing an open innovation approach

The Group engages with a number of parties that contribute

to its innovation profile: customers, shareholders, suppliers,

the world of academics and research, start-ups and SME,

shareholders. This environment, also populated by its

competitors, is viewed as an open innovation ecosystem

that it must integrate.

Innovation requires an ability to identify underlying socio-

technological trends, sourcing or acquiring the best

solutions to be integrated in its processes and offerings,

through four steps that are related to the components of

this ecosystem:

The appropriation of the issues relating to future challenges calls for collaborative relations with

academia. It requires taking into account changes in

the environment, with the broadest possible approach

that is at the same time societal, technological and

international in nature. The resulting analysis is then

shared with Business Lines in order to raise awareness.

In 2013, issues relating to population ageing, the

transformation of the urban landscape and European

integration were addressed.

identifying trends and sharing experience is concretely

achieved through playing an active role in managing this

innovation ecosystem (2):

- intercompany clubs, forums for exchange and sharing

best practices (Club des Directeurs de l’Innovation, Club

Open Innovation);

- associations and think tanks where transformational

ideas of contributors to innovation meet and exchange

ideas: Fing, IE Club, Competitive Clusters (Cap

Digital);

- customers: to jointly build and test new offerings

before being released on the market (for example,

the Banking Lab);

- partnerships with events seeking to support

innovation:

- in 2013, the Group supported the Paris "Innovation

Grands Prix" for the third year in the "Services to

Companies" category,

- the Group is a partner of the fourth edition of the

Dataconnexions contest devoted to the theme of

"local services", promoting projects using one

or more public data sets acquired within the

framework of a public service mission.

(1) The goal of innovating services, while drawing frequently on disruptive technological solutions, is to above all enhance and/or facilitate the customer

experience during interactions with its supplier.

(2) The open innovation ecosystem defines relations between a company and all of its innovation partners.


Innovation and intellectual property Innovation in action 8

Qualification and execution of innovative projects, with

SMEs and start-ups:

- Lab Postal, created in 2009 has contributed to the

Group’s open innovation momentum. Through this

vehicle, the goal is to promote an understanding of the

stakes and opportunities of the digital transformation

by means of: exchanges with external and internal

contributors, experiments with service prototypes

developed with innovative companies, tests of tools

and methods fostering innovation (digital tools,

design, creativity, etc.).

Since its creation in 2009, 80 prototypes have been

produced on this basis with the Business Lines and at

subsidiaries, with 20% reaching concrete development

phases (intelligent street letterboxes, innovative urban

delivery vehicles, citizenship relations management,

etc.);

- the FTSIO open innovation fund (Le Fonds Transverse

pour l’Innovation Ouverte) created at the end of 2011,

is a corporate entrepreneurship vehicle contributing

to the development of partnership projects by Group

subsidiaries through an open innovation approach

(formation of business partnerships, experimentation

or research agreements). Since its creation, the FTSIO

fund has contributed to the emergence of 33 projects

originating from all Business Lines and has financed

19 projects with 20 different partners (for example:

Mooville-Muses with Chronopost, winner of the IE

Club responsible development prize for relations

between major groups and innovative SMEs; Talk to

Pay with La Banque Postale for payment transaction

voice biometrics authentication of payment).

Contributing equity capital through XAnge: the private

equity and venture capital company of which Le Groupe

La Poste is one of the founding members, is a financing

vehicle for innovative young companies. Every year, XAnge

has referred 60 to 100 projects to the Group’s different

Business Lines with a development objective. Over the

last 10 years, €120 million in venture capital have been

raised by La Poste and La Banque Postale, which also

provide their business expertise and contributes to

generation of the deal flow.

This open innovation strategy has resulted in concrete

commitments on the part of La Poste at the end of 2012

with the "Charter for public corporations in favour of

the emergence and development of innovative SMEs",

supplemented by a Group purchasing strategy in favour of

the development of innovative SMEs (optimising SME access

to purchasing opportunities, improving contractual relations

with SMEs and their cash flows).

8.1.2 Proposing ongoing service innovations

The Group is constantly seeking to demonstrate its ability

to propose innovative service solutions to retail customers

and companies. This priority is exemplified by:

joint development through partnerships: for example,

the creation in March 2013 of Idenum, a joint undertaking

held by Le Groupe La Poste, Euro-Information (Crédit

Mutuel-CIC), SFR, Solocal Group and the Caisse des

Dépôts (through the French national Fund for a Digital

Society—Fonds national pour la société numérique), to

promote digital identity services; market roll-out in

September 2013 of Paylib, an electronic wallet jointly

developed by La Banque Postale, BNP Paribas and

Société Générale;

the launch of innovative offerings, in line with

the strategic positioning of each Business Line

(development, for example, of the "Predict" offering by

DPD guaranteeing the delivery during a specific time

window for corporate customers in the United Kingdom,

the launch by EasyBourse of a mobile application for

placing stock market orders, etc.).

8.1.3 Promoting the internal culture of innovation

Changing culture and tools is an important driver of Group

transformation and depends on participatory innovation, a

structured management approach seeking to foster and

promote the development, the implementation and the

dissemination of ideas by all personnel to create added

value and improve organizational performances.


Innovation and intellectual property Intellectual property policy8

8.2 Intellectual property policy

8.2.1 Patents

As service operators, the Group’s Business Lines mainly

use patents and licenses developed by partners and

suppliers. The amount invested for research tax credits is

not significant.

Le Groupe La Poste has filed more than 40 patent

applications to which it has full title with INPI over the last

decade, mainly for industrial mail facilities (i.e. processing

and sorting, transport and storage, distribution and

collection).

8.2.2 Trademarks

The Group’s main brand is “Le Groupe La Poste”, which

has been registered in France and the European Union and

is endorsed by all subsidiaries in their institutional and

business communications. The Group has a portfolio of

approximately 1,700 brands registered in France and around

the world.

The Group has registered many other brands corresponding

to the names of subsidiaries, products and services.

Lastly, constant care is taken to protect, defend and monitor

the portfolio of brands and domain names to prevent any

fraudulent or unauthorised use that could harm the Group’s

intangible assets and brand image.


9

9.1 Risk management system and methods for identifying and handling risks 118

9.2 Strategic risks 119

9.3 Operational risks 122

9.4 Financial risks 124

9.5 Legal and regulatory risks 129

9.6 Policy of covering certain risks with insurance 131

Risk factors


9Risk factors Risk management system and methods for identifying and handling risks

The Company performs its business activities in an environment that carries certain risks. Readers should pay careful

attention to the risks described below. One or more of these risks may have a negative effect on the Group’s business

activities, financial position or results. Other risks that have not yet been identified, or that Le Groupe La Poste currently

deems non-material, could also have a negative impact.

9.1 Risk management system and methods for identifying

and handling risks

The risk management system (1) is set out in the Group’s

Risk Management Charter. The Charter, which was signed

by the Chairman of Le Groupe La Poste, entered into effect

on 1 January 2010, and applies to the whole Group.

The risk management system is in compliance with the

professional standards recommended under international

COSO 2 guidance and the Autorité des marchés financiers

(French Financial Markets Authority)'s reference

framework. It is also based on the standards contained

in CRBF Regulation 97/02 as amended, which applies to

La Banque Postale.

The Executive Committee relies on the Group Risk

Committee, a body combining representatives from the

Business Lines, the main subsidiaries and the cross-

divisional support functions, which coordinate the risk

management approach.

The Group Risk Department, which works under the

director of audit and risks who himself reports to the

Chairman and Chief Executive Officer, draws up the major

risk cartography project in collaboration with the concerned

parties, prepares the work of the Risk Committee and the

Executive Committee regarding risk management and

organizes the "risk—internal control—insurance" sector.

This sector supports the managerial line up to the

operational premises in order to help control its business

activities and risks.

The identification and assessment of major risks and the

preparation of plans to control these risks, are based on

work carried out in each Business Line, subsidiary and

government domain, on interviews with the Group’s senior

executives and on permanent oversight of risks at each

specialist unit and body (e.g. HR, security, legal, information

systems, etc.). Audit plans are drawn up based on the

Group's major risk mapping as well as sector mapping.

The results of this work are presented each year to the

Board of Directors' Audit Committee, after it is presented

to the Executive Committee who approves it.

Another meeting, at mid-year, allows the Executive

Committee to ensure that the implementation of risk

control plans is monitored. An overview of this monitoring

is also presented to the Audit Committee.

There are three types of risk facing Le Groupe La Poste:

business activities-related strategic and operating risks;

risks inherent to financial management activities,

especially for La Banque Postale;

risks pertaining to the legal, regulatory and market

environments in which business activities and missions

are carried out.

La Banque Postale, GeoPost, Sofipost and Poste Immo

also have Audit Committees, to which the main risk factors

relating to these entities’ business areas entities are

presented.

(1) See Chairman’s report on corporate governance and internal control and risk management procedures (appendix 1).


Risk factors Strategic risks 9

9.2 Strategic risks

Risks from environmental strategy or the implementation of the strategy pertaining to market developments for each

Business Line and to the management of external growth transactions and partnerships.

Risks related to the different Business Lines' markets

Risks relating to declining Mail volume

The Mail service must adapt to customers’ expectations in

an environment with the following key features:

spread of the Internet, which has led to changes in

the way private individuals and businesses operate, to

a digitization of part of the mail and to the emergence

of alternative competitive solutions (the Mail Business

Line still needs to strengthen its presence in this rapidly

growing niche market);

higher standards of service activities;

society ’s env ironmental awareness, which is

transforming the Mail business environment—directly

affected by the Grenelle 1 and 2 Acts (e.g. reduced energy

consumption and eco-design of direct marketing);

an economic environment that remains difficult.

Pressure on business customers’ overheads and the

growing importance of environmental issues have

acquired strategic importance for the Mail business, with

sustainable development constituting a powerful driver for

the rationalization of flows.

All of these undercurrents are combining to cut mail

volumes by an estimated 50% over the 2008-2020 period,

thereby reinforcing the need to renew the Mail offering in

order to seize the opportunities these trends are generating

and to reduce costs. Le Groupe La Poste and its relevant

subsidiaries have defined a strategy seeking to address this

risk focusing on four main areas:

Mail, the major media of the customer relationship;

Mail, the high-value local logistics network;

Mail, partner of choice for e-retailers;

Mail, a major provider of home-based services through

its network of postmen.

Risks related to economic conditions and

competitive pressures in Europe in the parcel

and express segments

Express (GeoPost) and rapid (ColiPoste) parcel delivery

is subject to considerable pricing pressure in both the

B-to-B and B-to-C segments that are undergoing rapid

development. This pressure on prices is not always passed

on to suppliers. On to the contrary, in certain markets

production costs of GeoPost Group companies are also

subject to an associated increase in certain production

costs (labour, fuel, etc.). This in turn is putting increasing

pressure on margins.

The measures taken by GeoPost’s management at local

and Group level have enabled it to continue expanding its

business activities and net income.

On the more specific market of B-to-C express parcels

in France, ColiPoste is faced with the ongoing ramp-up

of logistics and business models that offer an alternative

to postal distribution. Once again, this trend has led

to significant pressure on prices, and has affected the

level of service accordingly. The continued deployment

and enhancement of the So Colissimo offering (see

Chapter 5, Section 5.1.2.3.2) and the optimization of capital

expenditures and production resources constitutes a

commercial and industrial response to this challenge.

Risks relating to the pace of La Banque

Postale’s commercial development

Operating in the retail banking market, La Banque Postale

has managed to maintain a strong position in the sight

deposits and savings market for private individuals.

Its continued development depends on its ability to maintain

its share of the savings products and current accounts

market and grow its market share in property lending,

consumer credit, property and casualty insurance and, since

2012, credit lending for legal entities and local authorities,


Risk factors Strategic risks9

as well as for social home ownership programs for low

income families. However, when there is tension in liquidity

and capital requirements are being tightened, rival banking

networks are all looking for safe, inexpensive resources

(deposits/savings). Increasingly heavy competition and

persistently low interest rates are a source of uncertainty

where La Banque Postale’s development plan is concerned.

This risk is reduced by the comprehensive scope of the

range, which is now complete, and the implementation

of structured sales methods in which the sales force and

Advisers are trained. La Banque Postale applies the due

diligence required when implementing new offerings by

supplementing its control procedures accordingly, and

remaining true to its positioning as a “bank and a corporate

citizen”.

Risks associated with the rise of a new mobile

phone service

Already active in the sale of prepaid telephone cards,

La Poste has decided to take the next step by creating

La Poste Telecom, together with a partner telephone

operator. This company has developed a business as

a mobile virtual network operator and its products are

marketed by the network of post offices under the La Poste

Mobile brand.

This activity is no longer in the start-up phase and today is

very close to meeting its first strategic target of one million

customers. However, the sector is undergoing rapid change.

The ability to anticipate is a key factor in an environment

where competition is intense, and very low prices are

putting pressure on margins.

Risks from mergers, external growth transactions and partnerships

Acquisitions entail specific risks that could potentially

call into question their business plans. economic risks

(economic deterioration of the business activity or the

country, adverse changes in rates, etc.), business risks

(loss of major customers, new competitors, substitution

products, etc.), management, social, legal risks, etc. When

such risks materialize, the profitability or even the viability

of the acquired entity may be called into question.

Within Le Groupe La Poste, external growth transactions

up to now have essentially taken place in GeoPost and

Sofipost, part of their development being based on

external growth transactions. These entities have made

acquisitions of various sizes that might entail risks, and

notably difficulties related to implementing the integration

of the acquired companies. With respect to the Banking

activities of the Group, in addition to selected acquisitions

(notably, Tocqueville and BPE), La Banque Postale has

also forged partnerships with specialized companies to

develop its new banking and insurance activities as part

of joint ventures (property and casualty insurance, health

insurance, consumer credit, lending to legal entities, wealth

management, electronic banking).

To be able to control the risks related to its acquisitions,

Le Groupe La Poste bases its decisions on an in-depth

evaluation of the transactions and their validation at each

level of its governance:

At the operational level, each acquisition is evaluated on

the basis of an assessment carried out by specialists or

external consultants on the reliability of the accounts,

the business plan, and the legal risks. Local expertise

is sought when the markets are outside Europe, given

the specific features of regulations and cultures.

Moreover, more attention is paid to identifying suitable

management that is familiar with the local market and

available as soon as the deal is completed.

In the banking area, partner companies for La Banque

Postale’s new business activities were selected through

calls for tenders and the partnership arrangements were

carefully studied and negotiated.

At the industrial subsidiary level, approval by Board of

Directors of the subsidiary in question is required for

any transaction exceeding €10 million (1). The decision-

making process is supported by the review of a file

focusing on four areas: strategic analysis; an assessment

of the business plan, its assumptions, the price structure

and price sensitivity; an accounting impact analysis; and

an assessment of the Company’s societal responsibility.

Regarding Sofipost, the target selection and integration

process was reinforced and formalized in 2012,

consistent with that of the Group.

(1) €15 million for La Banque Postale.


Risk factors Strategic risks 9

At the Group level, the Board of Directors must examine

and approve all acquisitions of more than €30 million.

The same applies to external growth transactions

executed as part of a new strategic orientation regardless

of their amount.

Additionally, in the first half of 2012, the Group

strengthened its process for choosing capital expenditure

and external growth prior to these instances:

- external growth transaction projects exceeding

€10 million, for the industrial and commercial

subsidiaries, and €12 million for La Banque Postale,

are now submitted for approval to an Investment

Committee composed of Senior Vice Presidents in

charge of Financing and Strategy;

- additionally, external growth projects for amounts

exceeding €30 million, or resulting in an installation in

a new country, or the development of a new business

activity are reviewed by an Investment Committee

composed of Senior Vice Presidents in charge of

Financing and Strategy and chaired by the Group

Chairman and Chief Executive Officer prior to being

submitted to the Board of Directors of Le Groupe

La Poste.

These procedures for securing external growth transactions

aim to help control the risks relating to these acquisitions

in various areas, which form an integral part of the Group’s

development strategy.

Le Groupe La Poste recorded goodwill following

transactions completed by its subsidiaries. No impairment

on this goodwill was recorded with regard to 2013.

Risk relating to the inability to generate the cash required for the Group's development, which may have a detrimental effect on the Group's sound economic health

Major strategic objectives for the Group include self-

financing its operations and current organic growth, thanks

to the generation of positive cash flows after the payment of

dividends to shareholders, and access to external sources

of financing (debt and equity capital). These objectives are

essential for meeting the Group's goal of obtaining "good

economic health". This good economic health can be

weakened by taking into account the following factors:

an acceleration in the contraction of Mail volumes and of

the Retail Brand’s business activities. In fact, in this case,

Mail and the Retail Brand's ability (which is also affected

by the switch to paperless channels and by a decrease in

transactions performed at post office counters) to adjust

their organizational structures and resources to changes

in their respective business volumes would become

inadequate, and would be hard to offset via additional

productivity gains. These Business Lines have operating

structures relying mainly on fixed costs;

La Banque Postale's results, and thus the dividends that

it pays out and which represent a significant contribution

to the Group's consolidated cash flow, are sensitive to

certain volatility factors (markets, rate levels, the debt

of governments). Furthermore, La Banque Postale's

contribution (34.5% at 31 December 2013 compared

with 30.7% in 2012) is significantly dependent on CNP

Assurances’ contribution, which is also sensitive to

economic and regulatory changes in the markets;

an increase in bearish tensions on prices in the Parcels

and Express markets for which dynamic growth in

volumes would not be able to compensate.


Risk factors Operational risks9

9.3 Operational risks

Changes in employees and skills

Le Groupe La Poste's staff is comprised of both state and

private employees, and is spread over a large number of

facilities throughout the country. These features make it

complex for organizations to adapt, all the more so since

Le Groupe La Poste’s respective Business Lines are facing

rapid, fundamental changes in their strategic environment

and markets. This has led them to overhaul the organization

of their workforce, which has both quantitative and

qualitative repercussions on the Group’s human resources

policy.

The risks from these developments are as follows:

Risk of developing insufficient skills

The qualitative and quantitative changes of Le Groupe

La Poste's Business Lines involve a necessary adjustment

of postal workers' skills. This necessity is not new, and it

has always been taken into consideration. Nevertheless, the

current rhythm of changes (digitization of mail, growth of

e-commerce, increase in new banking offers, omnipresence

of new IT and communication techniques in the professional

environment), is such that the subject of continued skills

development is on the agenda. As such, Le Groupe La Poste

is strengthening its actions in the areas of workforce and

skills management planning and training.

Risks related to the health of the postal

workers

As with all labour-intensive companies, La Poste may

generate:

professional risks related to the very nature of its

business activities, whether it involves physical activities

(handling and carrying loads) or customer relations

(insults, stress, assaults);

risks linked to changes in organizational structures

and Business Line content (skills management and

psychosocial risk);

compliance risks with regulations on health and safety

and duration of working hours;

image risks in postal worker/customer relations.

To deal with these risks, the company strives to ensure

responsible development, prevention, mentoring and

training. In particular, a global action plan drawn up at

the highest level of the Company has been implemented

to prevent psychosocial risks and improve the well-being

of Group employees, especially within each Business Line.

The new health, safety and working conditions Committees,

implemented in the autumn of 2011 and endowed with

competencies under the normal legal regime, the roll-out

of “work life” plans in all services, and the mobilization of

players contributing to prevention are taken into account in

the workplace health and safety risk control system.

Furthermore, in March 2012, Le Groupe La Poste launched

a program aimed at listening to health at work issues,

which primarily resulted in the report of the La Poste's

Major Dialogue Commission, chaired by Jean Kaspar,

the conclusions of which were submitted in September

2012. The priority measures determined by Executive

Management following the submission of the report

involved support for management, the organization of

work and change management, health and safety at work,

and strengthening local HR functions, as well as forward

management of headcount and skills. They have been rolled

out since the last quarter of 2012.

The framework agreement of 22 January 2013, signed with

the majority of trade union organizations, supplements

and reinforces the whole plan, and opens the way to other

agreements in various areas like teleworking.


Risk factors Operational risks 9

Business continuity, safety and security

Risk of loss of sales and disruption of public

service missions in the event of a major crisis

Every day, 250,000 individuals serve 65 million people in

France, delivering tens of millions of items, carrying out

millions of bank transactions and dealing with 1.7 million

people in post offices.

These figures show the economic importance of the

services Le Groupe La Poste provides to the public and

businesses, the degree of contact between postal workers

and customers and between postal workers themselves,

and also the importance of the human factor in postal

business.

Moreover, in accordance with current regulations on civil

protection and defense, the Group is required to fulfil

certain roles necessary for the nation’s economic activity

and for the continuity of government operations.

A pandemic or any other major crisis preventing a large

number of postal workers from performing their duties

would greatly disrupt Le Groupe La Poste's work and would

lower its revenue.

Therefore, this challenge concerns both the Company’s

social and economic role and its financial health.

Crisis management procedures and business continuity

plans introduced as part of wider government response

measures (to pandemic, fuel shortage, terrorism, etc.) must

be adapted to the various possible forms of crisis.

Crash or downgrading of the computer or

telecommunications systems, undermining

the Group’s ability to support its operating

activities

This global risk factor, relating to the direct dependence

of various Group business activities on its information

systems, covers two main areas of risk:

Risk of malicious attacks on the Group’s network, mail servers or websites

Firstly, an uncontrolled virus can alter, destroy, disclose or

make unavailable the Group’s information systems following

a partial update of the anti-virus protection or the failure

to update it, an insufficiently detected virus spread, an

insufficient response or unsuitable user behaviour.

Such virus pollution could result in the network being

blocked, which would prevent transactions from being

carried out with customers (at the post office counters or in

the banking back office), or the performance of production

processes (for mail or parcels).

Secondly, malicious software intrusions (the use of

malicious software to wilfully intrude into information

systems without authorization) may be facilitated by

weaknesses in the information system’s different security

and surveillance mechanisms and components or by

careless user behaviour.

Lastly, the disclosure of personal or strategic data may hit

revenue directly or indirectly.

This is why the Group's telecommunications and data

exchange network is subject to constant monitoring (an

observatory operates 24/7), and is the subject of state-of-

the-art prevention measures. Following the example of

other large companies, Le Groupe La Poste has organized

a CERT (Computer Emergency Response Team) function at

the observatory.

Risk in the event of a major disaster at an IT production site

The Group's IT production centres house components of

the information systems, which support key management

and operational processes: sorting and tracking items,

sales administration for mail and parcels, checking account

and means of payment management, savings account and

investment account management and loan management

for the banking activity.

To reduce the risk of one of these components being

unavailable after a major disaster, whether to hardware

or software, La Poste and its subsidiaries are introducing

business continuity and business recovery plans in

applications deemed critical.


Risk factors Financial risks9

Risk of armed robbery in post offices

The risk of armed robbery remains significant given the

number of post offices, the role of La Banque Postale and

the type of services it provides to the French population.

The risk lies more on the intensity of these attacks than on

the number of them, which has sharply decreased over the

last ten years as a result of the actions taken by Le Groupe

La Poste.

Vigilance and security programs remain on the agenda.

Bank fraud

Like all banks, La Banque Postale has seen an upsurge of

external fraud.

Fraud is an operational cost that La Banque Postale

closely monitors. It consists mainly of electronic banking

fraud, and also includes “identity theft”. La Banque Postale

significantly reinforced its action plan in 2013, working

together with the operators concerned at La Poste, in

order to reduce this cost via measures that address both

the management and strengthening of tools and controls

(including the identification of fraudulent documents),

and training on fraud prevention and identification for

employees, as well as changes to procedures (security of

transactions).

Furthermore, La Banque Postale benefits from an insurance

program from Le Groupe La Poste for internal and external

fraud, and in particular bank fraud.

9.4 Financial risks

Apart from Banking activities liabilities, which La Banque

Postale distinctly manages in collaboration with the Group,

the Group’s other financial liabilities mostly comprise bank

borrowings and overdrafts, as well as accounts payable.

The main purpose of these financial liabilities is to finance

the Group’s operating activities. The Group holds financial

assets such as trade receivables, cash and cash equivalents

and short-term investments directly generated by its

business activities. The Group also invests in derivative

instruments—mostly interest-rate swaps. The aim of these

instruments is to manage interest rate risks linked to Group

financing.

Le Groupe La Poste takes a cautious approach to risk

management based on a system of notional limits for

each of the financial risks to which it is exposed through

its financial activities. This system of limits is set down

in a “Book of Limits” that is updated regularly, based on

changes in the business activities of the Treasury and

Financing Department.

An execution report on the Book of Limits is also presented

annually to Le Groupe La Poste's Audit Committee. In 2013,

it contained no particular observations.

9.4.1 Non-banking financial risks

Liquidity risk

The Group strives to have sufficient financial resources

to finance current business activities and the capital

expenditure needed for future growth at all times. The aim

of cash management is to find resources at the lowest cost

and ensure they can be obtained at any given moment.

Liquidity risk is measured using cash and cash equivalent

forecasts drawn up each month. Any potential liquidity

gaps are covered by issuing short-term negotiable debt

securities (Treasury bills and Euro Commercial Paper) and

through confirmed credit facilities provided by financial

institutions. The Group also has a syndicated loan facility

of €650 million. The loan agreement, which was signed

on 20 October 2011 for an initial term of five years, was

extended for an additional year in October 2012 under the

same conditions, and for a further year in October 2013,

under the same conditions. In addition to the €650 million

syndicated loan, the Group arranged a confirmed credit

facility of €75 million in October 2013, under the same

conditions. Chapter 20—Note 28.2 to the consolidated

financial statements details all cash flows.


Risk factors Financial risks 9

A liquidity alert is sounded when the one-month provisional

cash flow statement reveals that total short-term financial

resources that have been used exceed 50% of all available

financial resources (approved credit facilities).

Risk of inadequate long-term capital for the

Group's new needs

The €2.7 billion share capital increase proposed by La Poste’s

Board of Directors on 10 February 2011, which was approved

by the General Meeting on 6 April 2011, and from which the

Group benefited between 2011 and 2013, reduced this risk

factor, which was linked to an excessively high level of debt

in view of the amount of equity capital, and restricted the

Group's ability to seize future development opportunities.

Nevertheless, vigilance will be maintained with regard to

the potential funding needs of the Group’s Business Lines,

especially those of La Banque Postale, in times of tighter

prudential rules and deteriorated economic conditions.

Similarly, the need to find and finance sources of growth to

offset the decrease in certain traditional business activities

will require adequate equity capital.

Currency risk

The Mail and Parcels-Express businesses operate

internationally, either from France or through foreign

subsidiaries. The bulk of these business activities leads to

income and expenses denominated in a single currency—

primarily the euro.

The residual foreign exchange rate risk on operations

therefore concerns only very modest amounts relative to

the Group’s size.

At 31 December 2013, the currency impact on revenue

amounted to -€49.8 million. This is broken down into -€30

million on the British pound, -€11.1 million on the South

African rand, -€3.3 million on the Russian rouble and

-€1.8 million on the Swiss franc. The impact of currency

fluctuations on operating profit was -€6.4 million in 2013.

Foreign currency-denominated debt issues are

systematically hedged using currency swaps. Therefore,

bonds denominated in pounds sterling and in Swiss

francs are subject to a 100% foreign currency hedge

(see Chapter 20, Note 27.4 to the consolidated financial

statements). An exchange rate hedge was put in place

to eventually cover the acquisition price of the company

DTDC in Indian rupees. This hedge took the form of a Non-

Deliverable Forward (NDF) which secures a consideration

for the acquisition price in euros.

Interest rate risk

La Poste has implemented an active bond debt management

strategy, which is based on using derivatives to reduce the

cost of its borrowings (see Chapter 20, Section 20.1, and

Note 27.3 to the consolidated financial statements).

This dynamic management generates a unidirectional

interest rate risk linked to an unfavourable change in

the yield curve. The interest rate risk is controlled by a

percentage limit representing the maximum cost of the

bonds on a four-year horizon. This limit, which is revised

every year based on the duration of the bonds and the yield

curve, is monitored on a weekly basis.

The forecast debt cost is determined based on projected

cash flows for all instruments used to manage the debt:

borrowings and derivatives. These cash flows are calculated

using a market tool that determines expected future

coupons based on yield curves.

In order to anticipate the impact of a rise in interest rates,

the cost of debt is simulated every week based on a parallel

shift of 50 basis points in the yield curve. If the result of this

test exceeds the authorized interest rate limit, preventive

transactions are carried out to re-price the cost of the debt

(see Chapter 20—Note 27.3 to the consolidated financial

statements). The floating-rate portion amounts to around

7.5% of total debt excluding Asset Backed Investments

(described below). The impacts from a sharp decrease or

increase in rates therefore remain limited on the average

cost of Le Groupe La Poste's debt.

Furthermore, La Poste has decided to invest part of its cash

(€650 million) in products that are fully-backed (by rate and

maturity) by part of its bond debt, so as to provide for the

redemption of that debt while neutralizing interest-rate

risk and benefiting from a more attractive remuneration

on the backed investments. To determine the net exposure

to interest rate risk, Le Groupe La Poste only takes into

account the debt for which no investment income can

perfectly offset changes in interest rates.



Credit risk

Credit risk involves a risk of the Group suffering a financial

loss if a customer or counterparty to a financial instrument

fails to meet its contractual obligations. The risk mainly

arises from trade receivables and investment securities.

Investment securities

In the course of its financial activities, La Poste is primarily

exposed to two types of credit risk (see Note 32.1 to the

consolidated financial statements—Chapter 20):

risk of issuers defaulting on their investment securities;

risk of its market counterparties defaulting.

Le Groupe La Poste's cash and cash equivalents are

placed under cash UCITS, term deposits and negotiable

debt securities (NDS) benefiting from the purchase of a

minimal short term rating of A2/P2 as well as cash-backed

investment securities. The credit risks are controlled by

a system of limits representing the maximum nominal

amount not to be exceeded per UCITS or issuer. In the

event where a portfolio investment sees one of its short

term ratings fall below A2/P2, this security must be sold "at

best" unless the Chief Financial Officer makes an overriding

decision.

In addition, to limit the risk of loss on the asset investment

portfolio (excluding cash UCITS), a maximum loss limit has

been introduced. This limit represents the statistical loss

on the asset investment portfolio within a 97.5% interval. Its

calculation is based on including the CDS for each security

in the portfolio, weighted by its residual maturity. In the case

of investments backed by a portion of the bond debt (see

“Interest-rate risk”), bonds with a maturity greater than

one year have been purchased, primarily through setting

up three dedicated funds amounting to €150 million each.

Specific limits were developed for these cash-backed

investments, including those limiting the share of banking

securities to 50% and those intended for investment in

securities with an A rating or above for banking sector

bonds, and BBB+ or above for other securities when

these bonds are acquired. If these securities (banking and

non-banking) are downgraded by one of the credit ranking

agencies to under the levels BBB-/Baa3, they will be sold

with no override possible.

Moreover, in view of its activity in derivative markets,

Le Groupe La Poste is exposed to a risk of its market

counterparties defaulting. This risk is also controlled by a

system of limits, which constitute absolute upper limits for

risks from derivative portfolios.

The exposure arising from these instruments is identified

via a valuation system based on the net market value of the

derivatives, less any potential guarantees received.

Finally, the commitments vis-à-vis Le Groupe La Poste’s

counterparties are subject to systematic collateralization

agreements that reduce the risk of default at the franchise

level.

Trade and other accounts receivable

Provisions are calculated individually, based on an

assessment of the risk of default. The weight of the top

Parcels-Express customers does not present a significant

risk to the Group.

No Group customer accounts for more than 10% of

consolidated revenue.

9.4.2 Financial risks related to Banking activities

The financial risks to the Banking activities are as follows:

credit risk;

counterparty risk;

liquidity risk;

market risk;

interest rate risk;

operational risks.

Note 33.4 to the consolidated financial statements

(Chapter 20) quantifies risks of the Banking activities.

Credit risk

Credit risk represents risk of loss resulting from the

inability of bank customers, sovereign issuers or other

counterparties to confront their financial commitments.

La Banque Postale implements risk-taking rules relating to

commitments and loan issuance in particular, and applies

procedures involving scoring and expert systems for the

issue or management of loans and overdrafts.


Risk factors Financial risks 9

La Banque Postale’s Risk Management Department defines

and applies credit risk measurement indicators, as well as

action plans to be implemented in the event of adverse

changes to these indicators.

In retail banking business activities, credit risk primarily

comes from property lending.

Furthermore, La Banque Postale Financement, La Banque

Postale’s specialist consumer loan subsidiary, has been

marketing these loans since April 2010. The same rules

that are used for property lending are applied.

Likewise, strict rules are put in place regarding loans to

legal entities and local authorities since these operations

began in 2012. Dedicated teams within these Business

Lines handle the corresponding risks in close cooperation

with La Banque Postale's Risk Department.

As regards trading, credit risk stems from interbank cash

transactions on deposits, loans and repurchase agreements

as well as from corporate, banking or sovereign issuer

risk on negotiable debt securities bought and sold by the

trading room. Before any capital expenditure, third parties

are systematically rated and assigned an individual limit

designed to cap the total amount of the commitment. If

necessary, these individual levels may be supplemented

by so-called Group limits, covering exposures to a group

of third parties considered to be the same beneficiary for

the purposes of Article 3 of CRBF Regulation No.93-05.

The individual limits are supplemented by a set of limits

designed to reduce the risks of concentration on groups of

counterparties classified according to their country of origin,

their Business Line or their internal rating. La Banque

Postale’s Risk Committee may revise these diversification

limits monthly (see Chapter 20—Note 33 to the consolidated

financial statements).

La Banque Postale's current holdings of sovereign debt

result from the obligation previously made to Le Groupe

La Poste's Financial Services to invest in sovereign debt

of OECD countries as specified in the French decree dated

28 February 2000.

2010 saw the emergence of risk on certain euro zone

member states (Portugal, Ireland, Italy, Greece, Spain).

La Banque Postale's Risk Committee has adjusted the limits

on the most sensitive countries several times, some in fact,

all the way down to zero. In the case of the Greek debt,

the remaining securities were sold during the last quarter

of 2012. In the case of Portuguese and Spanish securities,

La Banque Postale reclassified a total outstanding of €1.8

billion of held-to-maturity securities under "financial assets

available for sale", in accordance with IFRS standards

on the exceptional change in management intent. Part

of these reclassified securities were sold for a nominal

amount of €1.1 billion. At 31 December 2013, La Banque

Postale's direct and indirect exposure to PIIGS amounted

to €2.79 billion, including €2.46 billion as a result of

direct exposure. This last amount should be compared

with €4.15 billion at 31 December 2012. The change is

primarily explained by the redemption of certain facilities

that had reached maturity. Exposure to this risk is detailed

in Note 33.7 to the consolidated financial statements

(Chapter 20).

Today, it is markedly less than it was at the beginning of the

crisis, thanks to:

run-off management from that date: the portfolio has

been significantly reduced, and actually reached zero in

the case of Portugal in late 2013;

measures taken at the EU level and by the European

Central Bank;

increase of La Banque Postale's capital base during this

period.

Exposure to counterparty risk

Counterparty risk is credit risk that occurs in market

transactions, investments or regulations where the bank is

potentially exposed to default from its counterparty.

In the terminology used by La Banque Postale, counterparty

risk stems primarily from transactions using futures. These

transactions, which are only carried out with banking

counterparties, are regularly performed within the context

of agreements that provide for netting the exposure and

arranging a collateral amount with regular margin calls.

Liquidity risk

Liquidity risk is defined as the risk for an establishment

to not be able to meet its commitments or not be able to

resolve or offset a position due to the market situation. It

can occur during times of regular market functioning due to

an imbalance on the balance sheet or in a stress scenario.

Due to La Banque Postale’s recent activity as a credit

institution, its balance sheet structure is characterized

by a persistent concentration of assets represented by

investment portfolios and, to a lesser extent, loans to

customers.

In principle, La Banque Postale is not dependent on the

market to meet its commitments. Nevertheless, it is

exposed to a liquidity risk arising from the transition of

its inflows, primarily sight deposits, into outflows with

scheduled due dates, either in the form of debt securities

or loans.

The amounts allocated to the held-to-maturity investment

portfolio are determined by applying a standard test,

modelling the liabilities run-off under different stress

tests and, in particular, incorporating major sight deposit

withdrawal scenarios.



The portion of resources not used for held-to-maturity

investments or property lending can be used to build the

available-for-sale investment portfolio. These securities

are in effect marketable and can be sold quickly if needed.

The risk control policy of La Banque Postale defines

two types of liquidity risk with two different monitoring

approaches: tactical liquidity risk, associated with the

facility's treasury management, and structural liquidity risk,

related to a change in the Bank's balance sheet structure

(see Chapter 20, Note 33.5 to the consolidated financial

statements).

These two risks are controlled by two limits that are

periodically reviewed by the ALM (Asset and Liability

Management) Committee (1).

Market risks

Market risk involves the possibility of changes in the market,

such as exchange rates, interest rates and the price of

equity instruments, affecting the Group’s earnings directly

or through its equity investments in CNP Assurances, which

has a significant influence on the consolidated financial

statements.

La Banque Postale is exposed to market risks from its cash

management activities and balance sheet management.

The market portfolio, which groups together all transactions

subject to market risks, encompasses not only the trading

portfolio but also banking portfolio transactions, including

available-for-sale financial assets and some lending/

borrowing transactions.

The risk of fluctuations in this market portfolio, which are

defined in La Banque Postale’s risk management policy, is

assessed via sensitivity indicators, a Value-at-Risk scenario,

and stress tests.

This market portfolio is primarily exposed to risks of

fluctuations in interest rates and credit spreads and,

to a lesser extent, to stock markets and exchange rates

(see Chapter 20—Note 33.8 to the consolidated financial

statements).

Prudential ratios

La Banque Postale’s capital base is managed with a view

to enabling La Banque to comply with regulatory ratios

and ensure its solvency while providing its shareholder

Le Groupe La Poste with a dividend yield that is in line with

Group policy and expectations.

The quality of the Bank's assets, together with the

€860 million capital increase in September 2011, and the

€1,028 million capital increase in December 2013, enabled

it to report prudential ratios that exceeded regulatory

requirements in 2013: despite a sharp increase in loans to

customers, the risk quality and level of guarantees attached

to the customer loans portfolio allowed the bank to benefit

from low weightings. Other assets are mainly comprised of

an investment portfolio, primarily invested in government

bonds or equivalent in conjunction with the risk control

policy as defined by La Banque Postale’s governing bodies.

The solvency ratio (2) is the measurement that enables

financial institutions’ ability to handle risk to be assessed.

To calculate its capital base requirements, La Banque

Postale uses a consolidated view of the standard approach

to calculate requirements on credit risks, market risks

and operational risks, while working to develop an internal

model.

As a result, according to the Basel 2.5 standards, La Banque

Postale, which applies CRBF Regulation No.2000-03

regarding financial conglomerates, had a solvency ratio of

15.3% and a Core Tier 1 ratio of 11.4% at 31 December 2013.

Nevertheless, it is advisable to remain vigilant in view of

potential additional prudential changes or the uncertainties

weighing on certain counterparties, which could affect

La Banque Postale's equity capital requirements as part of

the specific measures for applying the Basel III regulations

in European law (CRR and CRDIV).

Lastly, La Banque Postale continued to manage its cash

in a cautious manner. This was reflected in surpluses

throughout the year, underpinned by the quality of the

financial assets owned. La Banque Postale’s liquidity ratio

is furthermore well above the regulatory minimum of 100%.

(1) Balance sheet management (assets/liabilities).

(2) Solvency ratio = prudential capital base / Risk Weighted Assets (RWA).


Risk factors Legal and regulatory risks 9

Interest rate risk

Interest rate risk concerns the possibility of La Banque

Postale’s future margins or economic value being affected

by interest rate fluctuations, in particular due to the

structural nature of the bank.

The overall interest rate risk is measured on the total,

comprised of the modelled retail banking balance sheet

(loans and deposits), portfolios of assets available-for-sale

and held-to-maturity investments.

It is controlled by a limit on measuring overall interest rate

risk, in line with Basel Committee recommendations. This

indicator is presented regularly to the Risk Committee

and the ALM Committee and every six months to the Audit

Committee (see Chapter 20, Note 33.6 to the consolidated

financial statements).

Operational risk

Operational risk is the risk of impairment due to an

inadequacy or an error in procedures, staff, internal

systems or external events, excluding strategic risks but

including risks to the Group’s reputation.

9.5 Legal and regulatory risks

Due to its size and the amount of human and material

resources (i.e. real estate, IT, vehicles, etc.) that it uses,

as well as its historical position on the mail market and

its banking activities, Le Groupe La Poste is subject to a

strict, well-developed and constantly changing legal and

regulatory framework (see Chapter 5—Section 5.3).

There is a risk of failing to adapt, or comply within the

allotted deadline, with the commercial, legal, financial,

civil or criminal repercussions that this can have (see

Chapter 20, Section 20.4). This is why managers and their

staff in each of the Group’s Business Lines are made well

aware of compliance issues.

Risk related to compliance with competition rules

Le Groupe La Poste now performs all of its operations in

a completely competitive environment. Within this context,

La Poste and La Banque Postale are both equipped with

a Department responsible for compliance. Close attention

is paid to this subject in the Group's various business

activities.

In accordance with the commitments made to the French

Competition Authority, in 2012, Le Groupe La Poste rolled

out a competition compliance program in the Group based

on the model created by the French Competition Authority.

Within this context, a member of the Executive Committee

was appointed as head of the program and communication

and training events were distributed to Group employees. A

system to signal when competition regulations are breached

was made available to them.

Compliance with regulations regarding individual freedoms

Personal data makes up the primary source of services

for the digital economy. Le Groupe La Poste, a player in

the digital economy, and a long-time trusted third party,

is sensitive to everything that can and must allow for the

sensitive use of data. The vehicle of this protection policy is

the Data Protection officer (CIL). In 2013, in a fast-changing

regulatory environment, the CIL launched a program

to raise awareness among all internal operators, and

provide them with training. The program aims to reinforce

awareness of data protection from the moment services are

designed. Lastly, the program was partnered by the CNIL,

in order to share expertise and experiences.


Risk factors Legal and regulatory risks9

Regulations applied to the banking sector and risk of non-compliance

La Banque Postale is subject to numerous regulations

governing its banking, asset management and insurance

activities.

Despite all the precautions taken and the controls in place,

a risk of non-compliance cannot be ruled out.

Risks relating to customers, products and

business practices

Numerous savings products and services (means of

payment) distributed by La Banque Postale are regulated,

i.e. regulations govern the amounts, duration, remuneration,

taxation, beneficiaries and distribution method.

The number of accounts and customers concerned, and

the growing complexity of regulations, can automatically

generate an operational risk of non-compliance, with the

financial consequences this may have.

Specific control systems and instructions are designed

to manage this risk. The Bank also has a system for the

operational validation of products and business information

document compliance.

For its part, interbank management of means of payment

can give rise to legal or regulatory changes that could affect

its business model through commissions paid or received.

Regarding actions led during the last few years by the

French Competition Authority in the area of interbank

commissions. The proceedings launched against French

banks by the French Competition Authority in 2010, which

related to a breach of the competition rules at the time of

the switch to the electronic processing of checks, resulted

in a €33 million fine for La Banque Postale. This decision of

the French Competition Authority was overturned by a Paris

Court of Appeal ruling on 23 February 2012, and therefore

granted La Banque Postale the right to recover the full

amount of the fine. The French Competition Authority is

currently appealing said proceedings in the French Court

of Cassation, which results in a risk that has led La Banque

Postale to record a provision of €16.4 million with regard to

this dispute for the 2013 financial year.

Changes to regulations and legal precedence are constantly

reinforcing banks’ obligations with regards to their duty to

advise (MIFID—Markets in Financial Instruments Directive,

DDAC Act and orders of 5 December 2008 and 30 January

2009—concerning insurance products, etc.).

This regulatory environment is constantly making

the marketing of these products more complex and

consequently making sales line skills increasingly

necessary.

The specific nature of La Banque Postale’s customers, who

prefer secure deposits, and the cyclical weakness of the

financial markets, widen exposure to this risk. This is why

training and professional documentation for the banking

customer advice business constantly stress this aspect.

In addition, the duty of counsel is a recurring control theme

for bank controllers.

Applicable environmental and social regulations

Le Groupe La Poste, with its significant real estate assets

(see Section 5.1.5), must comply with the standards set forth

by the Grenelle 2 Act. This involves voluntary changes at

a time when the growing industrialization of operations is

itself very energy-consuming. This means having to do more

than just offset the emissions from buildings themselves,

in particular by reducing the amount of floor space used.

Moreover, the Act of February 2005 on the accessibility

of public access buildings (PAB) to persons with reduced

mobility states that buildings must be brought up to

standard by the end of 2014, or sanctions may be imposed.

This also concerns outside and inside facilities and all types

of disabilities.

In both cases, this assumes a sustained upgrading of real

estate assets, bearing in mind the scale involved. Outdoor

ATMs have to meet accessibility criteria.

Regarding the “accessibility” component, the upgrading

program is well under way and on track. The assessment

phase of the "environmental" component has been led on


Risk factors Policy of covering certain risks with insurance 9

strategic and significant buildings, and the compliance

upgrades will be carried out consequently. However,

pending the publication of the decree implementing the

law, there remains uncertainty as to the precise standards

to be complied with.

This risk factor is included in this broader component,

bringing weight to bear on the Group's necessity to adapt

to environmental and social challenges, taking into

account the variety of expectations of the company and

the complexity of the regulations affecting the Group’s

different business activities. The Group is strengthening its

management tools to meet its obligations in this area.

9.6 Policy of covering certain risks with insurance

The Group believes it has reasonable and sufficient

insurance coverage.

The Group’s general policy for insurance is based on the

following principles:

risk sharing: wherever possible, a Group policy is taken

out to provide each entity or subsidiary with optimum

coverage commensurate with its own risks, at minimum

cost, regardless of their financial resources;

insurance in priority of the intensity risk: in general,

frequency risk, for which the cost of insurance would be

too high (deductible, holding, etc.), is kept in-house given

La Poste’s financial resources.

The total amount of the premiums pertaining to insurance

policies subscribed by the Group amounted to €23.1 million

for 2013.

Insurance against property damage and operating losses / all security risks

The Group’s casualty insurance program primarily consists

of a “comprehensive damages except” policy, which

covers all movable and immoveable assets (except for any

exclusions specifically mentioned in the agreement), and

concerns all the Group’s entities, with the exception of

certain subsidiaries covered by a policy that is appropriate

for their financial resources.

Under this policy, all claims are totalled and the coverage is

triggered when they exceed €3 million per year. Le Groupe

La Poste therefore insures itself up to this amount. Above

this limit, the risk is transferred to the insurer.

The main limits under this policy are as follows:

fire, explosion, lightning, electric and electronic damage,

land vehicle accident, naturally occurring events and

natural disasters, terrorist attacks, smoke damage:

€150 million in direct damages of which €45 million for

additional costs;

collapse: €30 million in direct damages and additional

costs;

insolvency of suppliers and customers: €20 million.

This contract also covers risks tied to funds and securities

held by the Group, including those in ATMs.

The Mail and Parcels subsidiaries, both in France and

abroad, also benefit from their "All Risks and Operating

Losses" property insurance program for a total amount of

€100 million per claim.

Other property insurance policies mainly involve risk

coverage:

fraud: this compensates financial losses resulting from

fraud, malicious acts committed directly against the

Group or one of its subsidiaries on insured items (i.e.

all documents, archives, furniture, equipment, goods,

programs and data, and securities held in any way);

IT: these compensate for damages (including operating

losses) the Group may suffer in the event of damage to

its software and data, resulting from one of the trigger

events listed in the contract;

pertaining to banking activity: this compensates

financial losses suffered by La Banque Postale and its

subsidiaries, triggered by one of the events listed in the

policy.


Risk factors Policy of covering certain risks with insurance9

Vehicle fleet insurance

Given the importance of the fleet used by La Poste

(65,900 internal combustion and electric vehicles), La Poste

has set up an array of specific insurances: service vehicles

are covered solely by third parties, with a deductible of

€250,000 per claim and a retention limit of €600,000.

Fully comprehensive insurance has been taken out for

company cars.

The Group also offers “work car” coverage to employees

using their own vehicles for business purposes.

Liability insurance

A “general and professional liability” policy for non-financial

activities covers the liability of Le Groupe La Poste and its

French and foreign subsidiaries. Deductibles are adapted

to the nature of the risk and beneficiaries of coverage. The

main deductibles are between €1,500 and €100,000.

This coverage has a maximum limit of €70 million.

Professional liability insurance is also taken out for financial

activities, covering errors or omissions made in banking

activities (professional liability for financial activities and

consulting).

Then there is obligatory coverage for insurance brokerage,

management and real estate transactions, as well as for

the employees concerned.

There is also liability insurance for the corporate officers,

covering all directors of the Group and its subsidiaries, as

listed in the policy, against the financial consequences of any

claim made against them, including the cost of defending

civil, administrative, arbitration or criminal proceedings, or

the cost of reaching an out-of-court settlement.

Other insurance

Transport insurance

The Group has two policies:

one specific to GeoPost and its French and foreign

subsidiaries; and

the other specific to the French postal business.

These policies cover the contractual and professional

liability of the Group’s various entities and subcontractors,

damage to Group property, damage to third-party property

held by the Group, and transfer of funds and securities.

Building insurance

As owner, the Group takes out building policies including

two insurance programs to automatically cover any

operation for up to €10 million:

one is called “all site risks” to cover material damage

that may occur to buildings under construction;

the other is called “building damage insurance” to cover

hidden faults that emerge on these buildings within

10 years after they have been signed off.


Risk factors Policy of covering certain risks with insurance 9

Events and exhibitions insurance

This mandatory insurance covers the Group’s liability as

both organizer and participant.

The Group has not taken out any “key employee” insurance.

Deprived urban area insurance (ZUS)

and insurance to protect employees victims

of crime (APAVI)

These insurance policies cover material damage and

personal injury to Group employees at work or while

performing their job.


10.1 Highlights 2013 136

10.1.1 Appointments to Group corporate governance bodies . . . . . . . . . . . . . . . 136

10.1.2 Economic and financial environment: a slow recovery . . . . . . 136

10.1.3 Regulatory environment . . . . . . . . . . 13810.1.4 Mergers and acquisitions and

expansion of the Group’s business portfolio . . . . . . . . . . . . . . . . . . . . . . . . 139

10.1.5 Securing the Group’s financial structure . . . . . . . . . . . . . . . . . . . . . . . 142

10.1.6 The Group’s commitment to responsible development . . . . . . . . . . 142

10.1.7 La Poste, a responsible employer . . . 145

10.2 Summary of Le Groupe La Poste

consolidated results 146

10.2.1 Operating revenue . . . . . . . . . . . . . . . 14710.2.2 Operating profit . . . . . . . . . . . . . . . . . . 14810.2.3 Other key aggregates . . . . . . . . . . . . . 149

10.3 Operating results by business

segment 149

10.3.1 Mail . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15010.3.2 Parcels-Express . . . . . . . . . . . . . . . . . 15210.3.3 Banking Activities . . . . . . . . . . . . . . . . 15410.3.4 Retail Brand. . . . . . . . . . . . . . . . . . . . . 15810.3.5 Real estate . . . . . . . . . . . . . . . . . . . . . . 15910.3.6 Other segments. . . . . . . . . . . . . . . . . . 160

10.4 Other income statement

aggregates 161

10.4.1 Financial profit/(loss) . . . . . . . . . . . . . .16110.4.2 Net profit, Group share . . . . . . . . . . . 162

10.5 Debt and financial strength 162

10.5.1 Change in net debt . . . . . . . . . . . . . . . 16310.5.2 Change in cash and cash equivalents 16610.5.3 Breakdown of financial debt . . . . . . . .16710.5.4 Equity and financial structure . . . . . . 16810.5.5 Credit rating . . . . . . . . . . . . . . . . . . . . 169

10.6 Analysis of the parent company

financial statements 169

10.6.1 Operating profit/(loss) . . . . . . . . . . . . 16910.6.2 Financial profit/(loss) . . . . . . . . . . . . . 17010.6.3 Net profit/ (loss) . . . . . . . . . . . . . . . . . 17010.6.4 Balance sheet . . . . . . . . . . . . . . . . . . . 171

10.7 Other financial information 172

10.8 Miscellaneous 173

10.9 Post balance sheet events 173

10Review of the financial position

and results


Review of the financial position and results Highlights 201310

The financial data set out in this part of the document are taken from the consolidated financial statements of the Group

prepared in accordance with IFRS and historic data.

The values in the tables are generally expressed in millions of euros. Rounding them may, in some cases, lead to slight

discrepancies in totals or in variations.

10.1 Highlights 2013

10.1.1 Appointments to Group corporate governance bodies

10.1.1.1 Philippe Wahl appointed Chairman and Chief Executive Officer of La Poste S.A.

During the Council of Ministers meeting on Wednesday,

25 September 2013 and on the Government's proposal,

Philippe Wahl was appointed Chairman and Chief Executive

Officer of La Poste S.A. by the French President of the

Republic.

He succeeds Jean-Paul Bailly who early July announced

his decision not to serve his full term of office expiring in

November 2014.

10.1.1.2 Remy Weber appointed Chairman of the Management Board of La Banque Postale

On Tuesday, 15 October 2013, Remy Weber was appointed

Chairman of La Banque Postale Management Board by

La Banque Postale Supervisory Board Chairman, on a

proposal from Philippe Wahl.

At this meeting, Philippe Wahl was appointed Chairman of

the Supervisory Board of La Banque Postale as Jean-Paul

Bailly's replacement.

Remy Weber was also appointed Group Deputy Chief

Executive Officer and member of the Executive Committee.

10.1.2 Economic and financial environment: a slow recovery

Owing to its banking activities, the Group is sensitive

to interest rate fluctuations, and to a lesser extent to

developments on the financial markets. Given its position

in the service activities sector, the various Business Lines

of the Group are more generally influenced by economic

conditions and by changes in labour costs, particularly

in France. Oil prices and exchange rates, particularly in

relation to the US dollar and pound sterling, given the size

of GeoPost activities in the UK, are very important both for

the Group's logistics and international businesses.

10.1.2.1 A global growth, gradually picking up

After the sharp slowdown in 2011-2012, global growth

gradually resumed in 2013. The euro zone emerged from

recession in the spring. The US economy, while hampered

by cuts in the federal budget, picked up steam after a very

depressed start to the year. Lastly, Chinese growth resumed

little by little. By contrast, the economy in several emerging

countries (Brazil, India, Russia, etc.) has been held back by

various domestic imbalances.

10.1.2.2 A slow recovery from recession in the euro zone

After six consecutive quarters of GDP contraction, the

euro zone finally emerged from recession as from the

second quarter of 2013. Signs of stabilization and even

economic recovery are visible in the most stricken euro

zone countries. 2013 also featured further progress in

stabilising the euro zone. Indeed, several countries (e.g.

Ireland, Portugal and Spain) regained competitiveness and

improved their current external account deficits, and there

was agreement on the Banking Union.


Review of the financial position and results Highlights 2013 10

However, the recovery is s low and fragi le . The

unemployment rate peaked at a high level in the euro zone

(around 12%) and at record highs in some countries (e.g.

25% in Spain). As a result, wages are rising very slowly,

which, combined with moderate energy prices, explains why

inflation is low (0.8% year on year in December for the entire

euro zone). Many other constraints are still holding back

the recovery including persistently high interest rates in the

so-called “peripheral” countries, ongoing, albeit mitigated,

efforts to cut budget deficits and the need to reduce private

sector debt in some countries (notably Spain).

10.1.2.3 A still very tenuous economic recovery in France

Reflecting the euro zone as a whole, France enjoyed

marginal GDP growth in the 2nd quarter, after six months

of falling GDP. This recovery was boosted by non-recurring

factors, particularly linked to the weather, hence there was

a decline in GDP in the 3rd quarter. 4th quarter GDP grew

by 0.3%, boosted by a bounce in domestic consumption,

investment and exports. GDP growth for the whole of 2013

also came in at 0.3%.

In this environment, domestic consumption, which no

longer drives the French economy as it used to in the early

2000s, only edged up 0.4% in 2013. Nevertheless, thanks to

low inflation (+0.7% year on year in December), domestic

purchasing power was a little higher in 2013, having fallen

in 2012. With regard to corporates, while their financial

health remained weak given that their operating margins

are at a 30-year low, the decline in business investment

bottomed out in 2013 and saw a slight improvement in

future prospects.

10.1.2.4 Interest rates still very low

While the Federal Reserve held its benchmark rate around

0.1%, the European Central Bank (ECB) once again lowered

its benchmark rate to 0.50% in May followed by 0.25% in

November, to foster a recovery in the euro zone and in

response to low inflation. In addition, the ECB once again

took exceptional steps to refinance banks at fixed rates for

unlimited amounts to avert any liquidity shortfall.

Consequently, short-term interest rates in the larger euro

zone countries (notably Germany and France) remained

exceptionally low, as did interbank rates. The EURIBOR

3 months rate averaged 0.2% during the year while EONIA

was just below 0.1%.

The rates of the highest rated euro zone Government

bonds also remained very low in 2013 (averaging 2.2% for

10-year French government bonds OAT and 1.6% for 10-year

German Government bonds during the year). Nevertheless,

after hitting a low in the spring (1.8% for French government

bonds in April 2013), the trend has somewhat turned around

(2.3% in December 2013), fuelled by US long-term rates.

Indeed, the improved US economy prompted the Fed to first

announce and then, at the end of 2013, begin reducing its

monthly bond purchase programme.

10.1.2.5 Bounce in the euro

Despite a more buoyant economy in the US, the euro tended

to appreciate against the dollar in 2013 (monthly average of

€1: $1.37 in December 2013 against €1: $1.31 in December

2012). This increase has two causes: (i) a gradual smoothing

in the euro zone debt crisis following a peak in market

concerns in early summer 2012; and (ii) the fact that the

Fed has flooded the market with liquidity, unlike the ECB.

The euro also appreciated against pound sterling last year

closing at £0.84 in December 2013, up from £0.81 at year-

end 2012, even though sterling rose in the autumn on the

back of the UK economic recovery.

10.1.2.6 Stable oil prices

In 2013, the dollar oil price drifted with no specific trend

averaging just under $110 per barrel of North Sea Brent

over the year. Hit by ongoing tensions in the Middle East (e.g.

civil war in Syria, the Iran nuclear issue, unrest in Libya and

Egypt etc.), while the oil price perked up on occasions, these

were limited and temporary.

With regard to economic fundamentals, the stable oil

price is down due to constrained global demand for oil in

correlation with relatively low global growth, whereas supply

has been boosted by the ramping up of production of shale

oil in the United States.



10.1.3 Regulatory environment

10.1.3.1 A new business contract

The undertakings of La Poste and the French government

were redefined by the "2013-2017 business contract"

approved by the Group's Board of Directors on 22 April 2013

and signed by all participating parties on 1 July 2013.

This contract provides for:

maintaining a broad range of public service missions


transportation and delivery, banking accessibility and

regional planning;

a reinforced quality of service (Priority mail, Registered

Mail and Green Mail);

missions tailored to consumer expectations and

technological trends (e.g. online letters, range for

sending small goods);

implementation of citizenship commitments promoting

regional and business development, the most

disadvantaged people, development of the digital society

and corporate social responsibility initiatives.

For each of its missions, the tangible implications are as

follows:

Universal Postal Service: the contract provides for

several advances in terms of quality of service. It was

decided to add a clause in 2015 to adapt the contract to

mail volumes decreases among other matters.

Press transportation and delivery: the plans established

by La Poste and the French government in the 2008-

2015 Schwartz agreements have been confirmed; a

review of the mission's execution plan after 2015 will

also be planned. The 2014 Finance Act nevertheless

provides for a €50 million reduction in La Poste's

press transportation and delivery compensation in

2014 compared to that stated in the 23 July 2008

tripartite agreement. The Finance Act also provided

for terminating in 2014 the moratorium on regulated

press prices that has run since 2009, which resulted

in delaying implementation of price increases actually

paid by publishers by a year. The impact on the La Poste

financial statements of this delayed price increase was

offset by extra funding from the Government's general

budget, in order to preserve the treatment of both parties

in the agreement. The termination of the moratorium will

result in a gradual increase in postage rates for press

distribution.

Banking accessibility: this mission is confirmed.

Regional planning: on 16 January 2014, the French

government, the AMF (The French Mayor Association)

and La Poste signed the 2014-2016 local postal coverage

agreement. This agreement is in line with previous

agreements: it confirms the postal service in high priority

locations (i.e. rural areas, Zones Urbaines Sensibles and

French overseas departments) and aims to enhance the

quality of the public postal service. In this regard, two

points have been retained: i) improve digital accessibility

by introducing new computer equipment in Local Postal

Agencies and ii) search for new forms of pooling in

respect of premises or staff. In addition, this agreement

specifies rules for using the national postal equalisation

territorial fund, and its value of €170 million per year,

remains the same.

10.1.3.2 Increase in mail tariffs

Like most European operators, La Poste decided to raise

postal prices, with a view of maintaining a high-quality public

service. The increase as from 1 January 2013 averaged 2.8%

and had little impact on household budgets (around €1 per

year per household). Sensitive to the plight of businesses in

a depressed economy, La Poste restricted the price increase

for industrial mail to 1.8%. Moreover, prices of the Destineo

Esprit Libre offers designed for SMEs did not increase.

On 1 January 2014, postal prices have risen once again,

on average by 2.9%. Priority Mail and Green Mail prices

increase by €0.03. As a result, the Priority Mail rises to

€0.66 and the Green Mail rises to €0.61. The Online Mail

price remains unchanged at €0.99. The price of a stamp

corresponds to the average for other European postal

prices even though the public service commitments and

geographical coverage are more important in France:

La Poste distributes mail six days a week to all addresses

in a country with one of the largest surface areas in Europe.



10.1.3.3 Implementation of CICE (Tax Credit for Competitiveness and Employment)

CICE (tax credit for competitiveness and employment) is

designed to fund improvements in business competitiveness

principally through investment, research, innovation,

training, recruitment, exploration of new markets,

environmental and energy changes and to fund increases

in working capital.

Introduced on 1 January 2013, CICE is a corporate tax credit

intended to lower labour costs. In 2013 CICE was 4% and in

2014 is 6% of salaries not exceeding 2.5 times the French

minimum wage paid to employees during the calendar year.

CICE is recognized as a deduction from personnel expenses

and is broken down between each business segment. In

2013 CICE reduced personnel expenses by just under

€300 million, but had no impact on Group cash flow given

that a tax credit in respect of 2013 will be received in 2014

at the earliest. The Government repays any excess in CICE

that has not been used over a three-year period at the end

of this period, i.e. 2017.

Despite the sluggish economy, CICE will allow La Poste

to safeguard the Group's jobs policy in an economically

sustainable manner (including the commitment to recruit

15,000 people for the parent company from 2012 to 2014)

and to ensure its long term development backed by a

controlled yet ambitious level of capital expenditure,

including modernization, development and environmentally-

friendly investments.

10.1.3.4 Banking environment trends

2013 featured changes in the interest rate on and the

maximum limit for Livret A passbook savings accounts:

On 1 January 2013, the maximum Livret A limit rose to

€22,950, having previously increased 25% from €15,300

to €19,125 on 1 October 2012.

As from 1 February, the interest rate earned on Livret A

accounts fell from 2.25% to 1.75%, and as from 1 August

fell further from 1.75% to 1.25%, thereby reverting to

the record low reached in August 2009. This reduction

was accompanied by steps to revive construction of

social housing, including a levy, between August 2013

and February 2014 amounting €120 million, on the

savings funds. This envelope is aimed at accelerating the

construction of housing units by housing owners.

An important event in 2013 was also the European

Parliament's adoption of the CRD IV/CRR directive

transposing Basel 3 into European law (final adoption dated

27 June 2013 which, was published in the Official Journal of

the European Union).

CRD IV improves solvency by increasing the value of

equity (strengthening the Core Equity Tier 1 “CET1” and

Tier 1 ratios), by limiting the definition of equity notably

that of “pure” equity (i.e. CET1), by introducing share

capital cushions (contra-cyclical and systemic cushions

to protect capital) and by improving risk hedging (bad debt

counterparty risks on derivatives).

10.1.4 Mergers and acquisitions and expansion of the Group’s business portfolio

10.1.4.1 Development of the Mail business

Acquisition of the UK-based Pitney Bowes

international mail business

In April 2013 Asendia purchased the UK-based Pitney

Bowes international mail business. Asendia (2013 revenue

just over €450 million) is a joint venture founded in July 2012

by La Poste and Swiss Post to manage cross border mail.

The UK subsidiary of Pitney Bowes International Mail

Services posted approximately £15 million or €17.5 million

in revenue and provides international mail services in

over 215 countries, more particularly targeted at financial

services companies and publishers.

Asendia already operates in the UK, its 2013 revenue is

valued at €112 million. With this acquisition the joint venture



shores up its market position in these two segments by

taking on new customers and by expanding its range of

publishing and relationship mail distribution solutions.

Strengthening Asendia's presence

on the international e-commerce market

In October 2013, Asendia purchased a 40% stake in

eShopWorld, an Irish-based company that has developed

a range of technology solutions and services covering the

e-commerce value chain. eShopworld posted 2013 revenue

of €12 million. Furthermore, Asendia has launched three

new e-commerce products providing tracking options

designed to deliver more secure international distribution

solutions.

Development of new services

Facteo

The Group has equipped postmen with a new working tool:

Facteo is a smartphone that postmen carry with them at all

times during their professional activities. This innovation

takes postmen into the digital era. It is designed to improve

customer relationships and develop new services. By 2013

year-end, more than 10,000 postmen were already equipped

with Facteo and by 2015 year-end all 88,000 postmen will

be equipped.

100% Choice of delivery

In order to facilitate deliveries of mail items where the

delivery requires a signature and adapt to customers' pace

of work, La Poste offers individual and business customers

two new free services. By connecting to the Internet,

customers can opt for a 2nd delivery on the day they specify

for mail and parcels items where the delivery requires a

signature. Customers can also choose another mail delivery

point in any post office they wish.

Nearly 300 million mail items where the delivery requires

a signature are distributed every year, including 62 million

which are on hold at the post office due to the recipient's

absence.

10.1.4.2 Pursuing of growth in Express

Continued acquisitions of SEUR franchises

in Spain

In July, GeoPost acquired the entire equity of the

Guadalajara and Salamanca franchises thereby raising its

equity stake in SEUR to 61.2%, including 44.3% held directly.

Investment in Colizen in France

On 28 February 2013, Chronopost acquired a 40% equity

stake in Colizen, a company specialising in fixed-delivery

times in the Paris region, which posted 2013 revenue

amounting to €2.3 million. Eventually Chronopost, French

express delivery specialist, seeks to provide this service

in large towns and to raise the bar for “premium” BtoC

delivery, which will result in improved customer satisfaction

and a higher successful delivery rate as from the first

delivery of the deliverer.

Investment in the UK in the largest European

parcel sorting hub

At the end of the first half of 2013, DPD UK purchased

a land located near a motorway junction in East Midlands

UK, with a view to establishing the largest parcels platform

in Europe. This platform, with sufficient capacity to handle

up to 70,000 parcels an hour, will process 65% of DPD's UK

parcels business.

Takeover of Tigers

GeoPost, which in 2011 acquired a 2.5% stake in Tigers,

purchased a further 63% stake in June 2013. As such,

GeoPost now holds directly nearly 66% in this international

freight forwarder operating in Asia (China), the United

States, Europe and Australia. This acquisition has enabled

GeoPost to broaden its scope of activities, develop synergies

at commercial and operational levels, and offer an

alternative to the services provided by integrators. In 2013,

Tigers posted revenue of €163 million.

GeoPost equity investment in DTDC

Early July 2013, GeoPost purchased a 40% equity interest

in DTDC, an Indian-based parcels transport company.

DTDC posted €83 million in 2013 revenue and has

7,300 employees.



10.1.4.3 Expansion of La Banque Postale's business portfolio

Deploying the local authorities financing offer

After rolling out La Banque Postale's financing offer in

the second half of 2012, setting up La Banque Postale

Collectivités Locales marked the last step in establishing

funding schemes for the local public sector. La Banque

Postale Collectivités Locales, which is 65%-owned by

La Banque Postale and 35% by Caisse des Dépôts, was

launched in March 2013. This subsidiary markets and sells

La Banque Postale loans to local authorities and hospitals.

La Banque Postale Collectivités Locales has the status of

a banking intermediary and hosts the customer call centre

and the studies service.

Boosting the high net-worth customer offering

On 2 April 2013 La Banque Postale purchased the entire

equity of Banque Privée Européenne (BPE) from Credit

Mutuel Arkea, a mutual bank. BPE has a robust high net-

worth customer platform as well as a range of financial

products and services involving loan and savings offers.

La Banque Postale aims to offer a better service to its high

net-worth customers through this acquisition, by offering

them a full range of products and services that match their

needs. As at 31 December 2013, BPE had total consumer

and property loans outstandings close to €2.5 billion.

Furthermore, LBP Gestion Privée became a wholly-owned

La Banque Postale subsidiary on 27 June 2013, after LBP

Gestion Privée shares previously held by Oddo and Company

were redeemed.

Development of property lending and issuance

of a covered bond vehicle

La Banque Postale Home Loan SFH is a refinancing vehicle

set up in 2013 and wholly-owned by La Banque Postale. In

September 2013 La Banque Postale Home Loan SFH issued

€1 billion of covered bonds over a period of 7 years.

The yield on these bonds, which are rated AAA by S&P, is

1.962%, equivalent to the swap rate plus 16 basis points.

The bonds are secured on a portfolio of home loans granted

by La Banque Postale to its customers.

The success of this bond issue emphasizes La Banque

Postale's credit worthiness and will allow it to further

strengthen its role in the French financing residential

property market.

Launch of Paylib, a remote payment solution

On 24 September 2013, BNP Paribas, La Banque Postale

and Société Générale launched Paylib, a free service to

pay by computer, smartphone or tablet without inputting

bank details. It has been made available to their 23 million

individual customers since October.

The three banks aim to facilitate and secure purchase

transactions for e-merchants. This simple and secure

solution, which is expected to deal with fraud, will encourage

growth in buying by mobile phone "m-commerce".

10.1.4.4 LPM has nearly one million customers and is boosting its offering

On 22 April 2013 La Poste Mobile launched an offer known

as "Quatro". The latter combines SFR's triple play service

(Internet, TV and landline) with La Poste Mobile's mobile

phone packages. La Poste Mobile, which is 51% held by

Le Groupe La Poste, thus improves its service offering via

a broadband offer and a quadruple play offer and can now

offer customers a complete telecommunications offering at

very competitive rates.

By the end of 2013 La Poste Mobile had chalked up

963,000 customers (including 20,000 quadruple play). This

bears out the effectiveness of the growth model and the

attraction of its telephone offers, which recently added 4G.



10.1.5 Securing the Group’s financial structure

10.1.5.1 La Poste capital increase: third and final instalment

As part of La Poste's €2.7 billion capital increase, which

was subscribed by the French government and Caisse des

Dépôts, a third and final payment amounting to €600 million

was made in April 2013 by the exercise of equity warrants,

at a ratio of two shares for seven warrants. 100 million new

shares were issued for this purpose.

Caisse des Dépôts now holds 26.32% of the share capital

and voting rights of Le Groupe La Poste.

Consol idated equ i ty Group share amounted to

€8,460 million at 31 December 2013 and the "Net Debt (1)/

Equity" ratio has been reduced to 0.45.

10.1.5.2 Increase in La Banque Postale's equity

At the 12 December 2013 Board meeting, the Group

authorized an increase in La Banque Postale's equity

amounting to over €1 billion. This transaction is a major

step forward to consolidate La Banque Postale's financial

structure in line with the growth strategy of its loan

business.

This equity increase took place in December 2013 via

a €800 million subordinate hybrid Tier 1 issue, fully

subscribed by Le Groupe La Poste, and via a capital increase

paid by transfer of the La Banque Postale head office valued

at €228 million.

10.1.5.3 €250 million bond issue

The Group successfully completed a new €250 million bond

issue in November. This issue was added to the existing

€750 million bond issued in November 2012 maturing in

November 2024 with an annual 2.75% coupon. The Group

is thus meeting its objective to actively manage its financial

resources while optimising the cost. The average cost

of Group debt was 3% in 2013 at an average maturity of

6.7 years.

10.1.6 The Group’s commitment to responsible development

The Group summarises below a selection of 2013

achievements in promoting responsible development. This

is based on ongoing and recognized efforts to combat global

warming while promoting the circular economy and strong

social commitment to disadvantaged people.

10.1.6.1 Poste Immo signs the energy efficiency Charter for office buildings

In late October 2013, Poste Immo signed the energy

efficiency Charter for public and private office buildings

in the presence of the Minister for Regional Equality and

Housing and real estate business actors.

The Charter was prepared in conjunction with the

"sustainable building" plan and anticipates the decree

on the obligation to renovate office buildings, which

is due to be published in 2014, in accordance with the

French President's commitment made during the second

environmental conference dated 20 September 2013.

Under Poste Immo's strategic plan, the Company intends to

reduce the energy consumption of the Group's real estate

by 25% between 2010 and 2018.

(1) Group net debt excludes the banking business for which this is not relevant.



10.1.6.2 Carbon Neutrality and Recy’go awards

Le Groupe La Poste received two awards under the Fair

Business Reporting Awards, sponsored by the Ministry of

Ecology, Sustainable Development, Transport and Housing:

The Mail's 2012 “Carbon Neutrality” campaign won the

1st prize for "Publishing".

The “La Poste Business Solutions” campaign as part

of the launch of Recy’go (offering to collect office

paper of SMEs and local authorities launched in 2012),

was awarded the Prize from the public in the “Press

Advertising” category.

Recy’go also received a special “Top Com” sustainable

development award for communication strategies

promoting sustainable development activities in line with

the directives of the Grenelle de l’environnement and the

ARPP (French advertising regulatory authority).

10.1.6.3 Ongoing investment in sustainable mobility

Greenovia, a Groupe La Poste subsidiary, has been selected

by the French government's procurement department to

support the introduction of electric and hybrid cars for

ministerial fleets.

Since early 2013, Greenovia assists the inter-ministerial

programme to support rationalising the vehicle fleet in the

definition and coordination of its activity programmes with

regard to the purchase of new vehicles. This programme

epitomises the French government's commitment (1) to

deploy recharging facilities and a fleet of electric and hybrid

vehicles. Greenovia's assistance allows Mipa to monitor

departmental action plans and support the Government's

Departments at each stage of the deployment.

Furthermore, Chronopost has opened a new urban

logistics centre—"ELU" in Paris city centre (Beaugrenelle)

designed to consolidate flows and deliver parcels in nearby

neighbourhoods by favouring proximity to recipients.

Backed by a fleet of 30 electric utility vehicles, which must

be under two metres high, this urban logistics centre

will lead to nearly an 80% reduction in CO2 while halving

the number of miles travelled. This new organization

has positive impacts on the environment, the well-being

of local residents and represents an innovative solution

for customers in the relevant district. ELU Beaugrenelle

was awarded the 2013 SITL innovation prize in the “Best

Innovation” category.

Lastly, during the mobility week, which took place from 16

to 22 September, the Group launched its carpooling website

for all staff. Drivers and passengers can now travel together.

10.1.6.4 Commitment to the circular economy

Circular Economy Institute Foundation

(Fondation de l’Institut de l’économie circulaire)

La Poste is one of the eight founding members of the

circular economy Institute that was launched in early

February. The objective of this institute is to promote a

new economy inspired by natural ecosystems. In this

model, waste from some people becomes a resource for

others, either by returning it to the land, or by reusing it to

manufacture other products.

Collection of printer cartridges with

Cart'Touch

Cart'Touch is an association of 15 brands of printers which

promotes sustainable practices and responsible disposal

of used cartridges.

For the very first time, Cart'Touch offered teaming up with

La Poste to collect used print cartridges for businesses on

a voluntary basis. The results of these collections were very

positive for all parties involved in this project.

Collect ing trays were provided to businesses in

113 La Poste sites dedicated for businesses areas from

January to July 2013. This experimental project resulted in

collecting 7,500 cartridges. Through this project La Poste

demonstrates how it can effectively and professionally help

to collect printer cartridges.

Cart'Touch is now expected to decide on another targeted

project. In the meantime La Poste will begin collecting its

own cartridges.

(1) French Prime Minister's December 2012 Circular: 25% of vehicles replaced must be electric or hybrid.



10.1.6.5 Commitment towards disadvantaged people

Setting up L’Appui, a scheme for banking and

budgeting support

La Banque Postale actively helps to combat exclusion from

the banking system and every day strives to give everyone

access to a high quality banking service. By setting up

"L’Appui", a platform providing banking and budgeting

advice and guidance, La Banque Postale has come up with

a major innovation in supporting financially disadvantaged

customers. Customers are sent by the financial centres,

and as from 2014, by post offices or by La Banque Postale

Financement in particular, to L’Appui, where 11 trained

advisors listen to them. Depending on their needs three

different services are offered: they are provided banking and

budgeting support, they are put in contact with partners,

charities or social services so they can exercise their rights

and lastly they are given access to charitable programmes

such as Mobiliz (guiding people to find a job). Opened in

November 2013, L’Appui will be rolled out throughout France

in the second half of 2014.

Partnership with the national charity for

local programmes (Association nationale des missions locales)

La Banque Postale offered ANDML (national charity for local

programmes) to set up a "financial training" programme

taking the form of banking and budgeting workshops

for young people. To run these workshops, 50 employee

volunteers were trained by La Banque Postale in June 2013.

In conjunction with a dedicated e-volunteering collective

area, the employee volunteers will train ANDML staff, young

civic service volunteers contracted with ANDML and even

the general public beneficiaries of ANDML's charitable

services themselves. Tested from June to December 2013,

this programme will be completed and developed during

2014.

"L’initiative" to combat banking exclusion

"The Initiative to Combat Banking Exclusion" is a reflection

and action club set up by La Banque Postale in October

2012 and deployed during first half 2013. The club includes

all parties involved in the social and charitable community

such as ATD, the French Red Cross, Restos du cœur and

Secours catholique, who offer to provide their know-how

and experience to support the debate by the Government

authorities so that new operational programmes to combat

banking exclusion be set in motion.

The club is open to the rest of the social and charitable

community as well as other banks who wish to develop new

initiatives to combat banking and financial exclusion.

Agreements with Nos Quartiers ont des Talents

(our neighbourhoods have talent—"NQT") and

the Écoles de la seconde chance (2nd chance

schools—"E2C")

The Group sought to engage with young people from

disadvantaged neighbourhoods or who meet certain social

criteria so that they can be supported in their search for a

job. With NQT, Le Groupe La Poste volunteers undertake

to help young people to once again be part of the world of

employment With E2C, Le Groupe La Poste supports the

social inclusion of unqualified school leavers.

La Poste is stepping up its partnership with

Extramuros, a job integration firm

Mail signed a new agreement with Extramuros (a job

integration firm that designs, manufactures and distributes

products made from recycled materials) so as to play an

active role in its operations and to create jobs.

Award for "L’Envol", La Banque Postale

campus wins Mecenova prizes

The La Banque Postale campus was set up in May 2012

to support high school leavers from poor backgrounds to

go on to study at top schools and universities. On 3 April

L’Envol received an award at the Produrable show in Paris.

Attended by Philippe Wahl, then Chairman of the La Banque

Postale Management Board, some sponsors and students,

La Banque Postale was awarded the Mecenova France prize

for a program designed to promote equality of opportunity.



10.1.7 La Poste, a responsible employer

10.1.7.1 A company committed to Quality of life at work

In line with the findings of the La Poste Commission of

Major Dialogue issued on 11 September 2012, on 22 January

2013 La Poste senior management and FO, CFDT, CGC-

UNSA and CFTC (French trade unions) signed a 3-year

agreement relating to Quality of life at work covering all

postal workers.

This agreement makes specific and innovative commitments

to improve Quality of life at work.

It sets out 17 immediate measures and eight projects

requiring further negotiation. These measures include:

introducing a change management method to be applied

for all organizational changes after consulting with the

staff involved via an impact study;

introducing job redesign systems for seniors, state

employees and employees;

introducing teleworking, on a voluntary basis;

an employee-relations warning system regarding

compliance with employee-relations rules and collective

agreements;

training new managers as soon as they take up their

duties;

turning 3,000 temporary employees into permanent

employees, with improved seniority transfer rights;

establishing over 1,000 local HR managers.

During 2013, five of the eight negotiations stated above

were initiated: career advancement of postal workers,

organization of work, teleworking, healthcare at work and

setting up a Group committee.

On 25 June 2013, the teleworking negotiation concluded

in an agreement signed between La Poste and CGT, FO,

CFDT, CGC-UNSA and CFTC (trade unions). In addition

to the immediate teleworking measure, this agreement

specified detailed procedures at La Poste. Its main purpose

is to enable postal workers to better balance their jobs

with private life and to promote employment of disabled

postal workers. The implementation of teleworking also

contributes to the risk prevention policy (by avoiding driving,

stress etc.) and the Group's sustainable development

strategy (less travel and so lower CO2 emissions).

The generation contract negotiation which took place at

the same time as negotiating career advancement, led to

an agreement on 22 January 2014 with FO, CFDT, CFTC

and CGC-UNSA (trade unions). The agreement focuses on

long-term employment of young people, elderly employees

staying in employment, and transferring knowledge and

skills.

The three other negotiations, concerning communication

with staff, HR policy and HR guidelines, will commence in

2014.

Quality of life at work at work is a key priority for the Group.

This includes being a constantly evolving organization,

adapting activities to the pace of the work environment,

fully respecting people and providing postal workers with

genuine opportunities for recognition and development, in

addition to just retaining the job.

10.1.7.2 A leading player in the French job market

Le Groupe La Poste follows a responsible employment

policy and manages its workforce and personnel expenses

in a very uncertain economic environment, while being a

leading player in the French job market:

commitment to recruit 15,000 people in the parent

company from 2012 to 2014: 5,298 permanent employees

were hired in 2013, including 1,390 who were previously

temporary employees;

employment policy that supports recruitment of

young people and social inclusion: commitment to

recruit 1,000 contracts for the future in 2013-2014

with prospects of being rapidly hired on permanent

employment contracts, part-time work policy and

interns. As at 31 December 2013, 626 people were

recruited under contracts for the future and 5,106 part-

time work contracts were signed;

active and tailored policy to manage employee age that

takes into account a longer working life expectancy, the

Group's demographic structure and the economic context.

An employment policy that promotes adapting work for

elderly employees and confirms the desire to hire and

retain disabled people: since the disability agreement was

signed in 2012, 187 disabled people have been recruited

as permanent or temporary (over six months) employees

and people under part-time work contracts.


Review of the financial position and results Summary of Le Groupe La Poste consolidated results10

10.1.7.3 Promote a strong and shared managerial culture

The Group strives to promote a postal managerial model

which strengthens adherence, rallying, cooperation,

efficiency and well-being at work among postal workers.

This involves developing responsible management, attentive

to employees' personal situations and sensitive to new

occupational risks, and better trained and supported

managers who are freed from non-essential tasks and act

with more autonomy.

In support of this goal, in 2013 the Group established

the Institute of Management, with the objective of giving

managers a strong and shared culture. Based on the

principles of openness, cohesion and innovation, the

Institute of Management is targeting all Group managers

with regard to common topics including Group culture,

managerial identity and innovation. The Institute of

Management also addresses the need for managers to

adapt to new trends and changes in society.

Designed in close cooperation with the Business Lines and

corporate management, the Institute of Management offers

individual and collective development of managerial skills in

addition to skills taught by the Business Line Universities.

10.2 Summary of Le Groupe La Poste consolidated results

(€ million) 2013 2012Change

Change at constant consolidation and

exchange rates(€m) (as a %) (€m) (as a %)

Group operating performance

Operating revenue 22,084 21,658 +426 +2.0% +217 +1.0%

Operating profit/(loss) 770 816 -46 -5.6% -40 -5.0%

Operating margin 3.5% 3.8% - -0.3 pt

Net profit, Group share / Revenue 627 479 +148 +30.9%

Net profit/(loss), Group share as %

of revenue 2.8% 2.2% - 0.6 pt

Key figures—La Banque Postale

Net Banking Income 5,539 5.241 +298 +5.7% +257 +4.9%

Operating ratio 84.9% 85.8% - -0.9 pt

Core Tier One (Basel 2.5) 11.4% 12.1% - -0.7 pt

Loan to deposit ratio 67% 59% +8.0 pt


(€m) (as a %)

Key financial indicators

Net debt (a) 3,778 3,460 +318 +9.2%

Equity, Group share 8,460 7,470 +990 +13.2%

Free cash flows (b) (505) 467 -973 ns

Net debt / equity—Group share 0.45 0.46 - -0.0 pt

Net profit / equity (Group share) 7.4% 6.4% - +1.0 pt

(a) Group net debt excludes La Banque Postale for which this is not relevant.

(b) Free cash flow = cash flows from operating activities + cash flow from investing activities (including 2013 €800 million increase in LBP equity via hybrid

bonds).

ns = not significant.


Review of the financial position and results Summary of Le Groupe La Poste consolidated results 10

10.2.1 Operating revenue

In 2013, Le Groupe La Poste operating revenue came in at €22,084 million, up 2.0% compared to 2012.

In 2013, Group operating revenue breaks down as follows:




Mail 11,103 11,410 -307 -2.7% -396 -3.5%

Parcels-Express 5,988 5,580 +408 +7.3% +328 +5.9%

Banking activities 5,539 5,241 +298 +5.7% +257 +4.9%

Other segments and intercompany (546) (573) +27 -4.6% +27 -4.6%

Operating revenue 22,084 21,658 +426 +2.0% +217 +1.0%

The €426 million increase in Group operating revenue can

be broken down as follows:

Revenue growth at constant consolidation and exchange

rates of €217 million or 1.0%. Adjusted for the home

loan savings provision (€160 million change), operating

revenue grew by 0.3%.

The impact of consolidation changes of +€259 million,

of which Sofipost (€89 million largely from 2012

acquisitions of Orium, Morin, Adverline and Cabestan),

GeoPost (€130 million largely from 2012 and 2013

purchases of SEUR franchises, the 2013 acquisition of

Tigers and the 2013 equity investment in DTDC) and

La Banque Postale (€41 million in respect of the Banque

Privée Européenne).

Currency losses amounted to €50 million, including

a €30 million loss on pound sterling (GBP) and an

€11.1 million loss on the South African rand (ZAR).

With regard to the operating segments, 2013 featured the

following key items:

2.7% reduction in Mail revenue compared to the prior

year. The parent company's historical mail delivery

business posted a 5.5% reduction in volumes and to

a lesser extent, a negative product mix variance. This

decrease is partially offset by a January 2013 price

increase in postage stamps. The downward trend was

worsened in 2013 by a €15 million reduction in the

press (1) compensation and the lack of elections during

the year. To mitigate the impact of the lower volumes,

Mail is engaged in an active innovation policy designed

to enhance the value of mail services and to offer new

services largely on the back of its strong local presence

represented by postmen who will progressively be

connected via smartphone (over 10,000 postmen

equipped with smartphones at 31 December 2013 as

part of the Facteo project).

2013 Sofipost revenue increased by €74 million due

to acquisitions (€89 million). Sofipost's like-for-like

revenue was down 1.4% due to a difficult year especially

on Mediapost France activity (volumes of printed

advertising down) and Viapost, which was hit by the

economic recession.

Continued growth in Parcels-Express revenue (up 7.3%).

ColiPoste revenue in France increased by 2.8% in a tough

competitive environment, fuelled by growth in volumes

and in particular BtoC Colissimo products, which were

supported by e-commerce operators' growth.

Express revenue rose 9.1% boosted by a surge in

volumes despite downward pressure on prices. Like-

for-like growth amounted to 7.2%. All countries posted

increases, especially UK, France, the Benelux countries

and Spain.

La Banque Postale Net Banking Income rose 5.7%

(4.9% at constant consolidation and exchange rates).

The increase amounts to 2.7% after adjusting for

changes in the home loan saving provisions and the

(1) In accordance with the Schwartz 2008-2015 agreements relating to press transport and distribution.


Review of the financial position and results Summary of Le Groupe La Poste consolidated results10

EIC fine (imposed on the large French banks by the

French Competition authority for their pricing policy

regarding digitisation of cheques). La Banque Postale's

performance includes revenue increases from customer

loans and commissions that, in line with their growth,

are naturally replacing income from sovereign debt

investment portfolios.

La Poste Mobile, which is included in the "Other

segments and intercompany" line, turned in revenues of

€75 million based on 51% Group share, which represents

growth over 2012 of 6.9%, boosted by its relevant offering.

The total number of customers increased from 319,000

during 2013 to 963,000 at 31 December 2013 (including

20,000 quaruple play packages). The one million

customers mark was reached in January 2014.

10.2.2 Operating profit

2013 Group operating profit amounted to €770 million, down 5.6% compared to 2012 and down 5.0% at constant consolidation

and exchange rates, a fall of €40 million.




Mail 471 684 -213 -31.1% -208 -30.6%

Parcels-Express 419 403 +17 +4.1% +19 +4.9%

Banking activities 708 621 +87 +14.0% +85 +13.7%

Retail Brand 34 16 +17 ns +17 ns

Real estate 135 109 +26 +24.1% +26 +24.1%

Shared services (211) (188) -24 +12.5% -24 +12.5%

Unallocated and eliminations (786) (829) +43 -5.2% +43 -5.2%

Operating profit/(loss) 770 816 -46 -5.6% -40 -5.0%ns = not significant.

This reduction was due to:

a €213 million dip in Mail operating profit in line with

the 5.5% reduction in parent company mail volumes

that price increases, reorganization programmes and

innovation did not completely offset. This resulted in

a €213 million decrease in the parent company Mail

operating profit. Sofipost’s 2013 operating profit held

up (€67 million) at a level close to the prior year (2012

operating profit included nevertheless a €17 million

capital gain on the founding of Asendia);

boosted by a sharp increase in revenue, Parcels-Express

turned in operating profit of €419 million, up 4.1%. Note

that in 2013 Parcels-Express launched new projects

designed to improve the quality of the services offering

(information systems, selected deliveries etc.). The

benefits of these projects will be felt gradually over time;

an €87 million increase in the operating profit of the

Banking activities primarily driven by higher volumes on

customer loans and commissions and cost control;

Real estate posted operating profit of €135 million

up €26 million compared with that of 2012, including,

€19 million of gains on asset sales. A key item in 2013

was a €65 million gain on the sale of the real estate

head office to La Banque Postale. This capital gain is

eliminated on Group consolidation. Excluding capital

gains from asset sales, Poste Immo's operating profit

rose by €7 million;

the improved change in the operating profit of

'Unallocated' is largely due to lower expense in 2013 on

the Group's end-of-career mechanisms.


Review of the financial position and results Operating results by business segment 10

10.2.3 Other key aggregates

10.2.3.1 Financial profit/(loss)

Financial profit rose by €61 million, including €37 million

due to the change in fair value of swaps on debt and the

debt credit spread and €31 million due to lower discounting

expense on post-employment benefits.

10.2.3.2 Profit before tax

Profit before tax increased by €16 million compared to 2012,

to €548 million. After adjusting for CICE (French tax credit

for competitiveness and employment) which amounted to

€297 million, not taxable, profit before tax amounted to

€251 million, down €281 million from €532 million in 2012,

thereby leading to a €104 million reduction in the tax charge

to €127 million, from a tax charge of €231 million in 2012.

10.2.3.3 Net profit

Net profit, Group share amounting to €627 million increased

by €148 million, including a €104 million lower tax charge

and a lower effective tax rate (falling from 43.5% to 23.3%)

due to CICE not being taxable. The share of profit of equity

associates came in at €36 million, including €24 million in

respect of CNP Assurances.

10.2.3.4 Free cash flows

The net cash outflow of €505 million was €973 million

higher than the 2012 net outflow due to purchase of

La Banque Postale hybrid bonds amounting to €800 million

and a €140 million reduction in cash flows from operating

activities caused by lower mail volumes.

After the payment of the third and final €600 million

instalment of the capital increase to which the State

and the Caisse des Dépôts were committed, payment of

dividends and interests (€175 million and €172 million

respectively), Group net debt (1) increased by €318 million

to €3,778 million at 31 December 2013.

10.2.3.5 Financial Ratio

The Net Debt/Equity ratio was unchanged at 0.45.

10.3 Operating results by business segment

Segment reporting is presented in accordance with IFRS 8—

Operating Segments. The definition of operating segments

is based on Le Groupe La Poste's current management

structure. A segment is a subgroup for which separate

financial information is available and regularly reviewed

by the Group’s Executive Management for the purpose of

allocating resources to that segment and assessing its

performance.

The criteria used to define business segments specifically

include: the nature of the products distributed, the type

or class of customer for whom they are intended, the

production process, the distribution network and the

regulatory environment. The operating segments reported

by Le Groupe La Poste in 2013 are as follows:

Mail: the entire La Poste parent company Mail business

including collection, sorting, and delivery of letters,

advertising and newspapers, as well as the Sofipost

subgroup companies;

Parcels-Express: Parcels represents the entire business

activity performed by La Poste under the ColiPoste brand

("toC" in France). Express includes the Group’s Express

BtoB and BtoC activities in France and abroad under

the GeoPost subgroup brands, and especially DPD,

Chronopost, Exapaq and SEUR;

(1) Group net debt excludes La Banque Postale for which this is not relevant.


Review of the financial position and results Operating results by business segment10

Banking activities: includes the Banking and Insurance

activities of the La Banque Postale subgroup and the

shared Resources unit;

La Poste Retail Brand: sale and distribution to the retail

customers of Le Groupe La Poste products and services,

together with mobile telephone services;

Real estate: includes Poste Immo’s real estate portfolio

management activities, and La Poste’s real estate

Operations Department;

Shared services: Head Office support and services

Departments (Group parent company);

Unallocated: includes the costs of the Universal Postal

Service accessibility mission, the costs of the regional

planning mission and the corresponding discount on

local tax charges, and lastly, the transitional expenses

relating to end-of-career mechanisms borne by the

Group, and as such not allocated to the Business Lines.

Each business segment’s operating revenue corresponds

to the total segment revenue including intercompany

transactions but excludes intra-segment revenue.

By a press release dated 28 January 2014, the Group

announced that ColiPoste will join the Mail segment.

December 2013(€ million) Mail

Parcels-Express

Banking activities

Retail Brand

Real estate

Shared services Unallocated Elim. Group

Operating revenue 11,103 5,988 5,539 4,230 908 825 (6,509) 22,084

Operating expenses (10,632) (5,569) (4,831) (4,196) (773) (1,037) (719) 6,442 (21,314)

Operating profit/(loss) 471 419 708 34 135 (211) (719) (67) 770

% of operating revenue 4.2% 7.0% 12.7% 3.5%

December 2012(€ million) Mail

Parcels-Express

Banking activities

Retail Brand

Real estate

Shared services Unallocated Elim. Group


Operating expenses (10,725) (5,177) (4,620) (4,215) (742) (1,028) (832) 6,497 (20,842)

Operating profit/(loss) 684 403 621 16 109 (187) (832) 3 816

% of operating revenue 6.0% 7.2% 11.9% 3.8%

10.3.1 Mail

The Mail segment includes all of the La Poste parent

company’s Mail business (i.e. collecting, sorting and

delivering letters, advertising and newspapers), as well as

the Sofipost subgroup companies, which are positioned on

strategic and fast-growing markets, namely:

Mediapost : relat ionship market ing and local

communications;

Docapost : document and data solut ions and

management services;

Viapost: logistics (including the e-commerce unit), and

transport;

Asendia: processing and routing cross-border mail,

company founded in July 2012 as a joint venture co-

owned by Swiss Post.




(€m) (as a %)

Revenue 11,103 11,410 -307 -2.7%

Of which intercompany revenue 10,461 10,773 -312 -2.9%


Operating profit/(loss) 471 684 -213 -31.1%

As a % of revenue 4.2% 6.0% -1.8 pt

10.3.1.1 Parent company mail

2013 revenue amounted to €9,892 million, down 3.7% or

€381 million compared to 31 December 2012. This change

can be explained by:

the 2013 5.5% reduction in traffic versus 2012 was partly

caused by large customers cost cutting and sending mail

electronically—an underlying market trend accelerated

by the depressed economy in 2013, and partly by distance

selling companies cutting back on advertising. The effect

of this €494 million reduction in traffic comes on top of a

product mix negative variance of €52 million;

2012 revenue was boosted €81 million by a one-off

increase in volumes due to the presidential and

parliamentary elections;

the 1 January 2013 price increase offset these negative

trends by €240 million;

lastly, International Sales and Services grew by

€6 million, particularly for collection and delivery

services.

To respond to the decrease in traditional business, Mail

continues to come up with innovative offers designed

to enhance the value of mail and to offer new services

including keeping postmen connected via their smartphone:

the FACTEO project shortens the time postmen spend on

proxies and, with live Intranet access, facilitates their

daily work while also providing commercial information to

customers and gradually developing new services. As such,

10,000 postmen were equipped as at 31 December 2013 and

all 88,000 postmen will be by 2015.

Quality of service remains high with a next-day delivery rate

for Priority Mail of 87.4% in 2013.

10.3.1.2 Sofipost

Sofipost 2013 revenue amounted to €1,211 million,

an increase of €74 million or 7%, boosted by the 2012

acquisitions of Orium, Morin, Adverline and Cabestan.

The main changes by unit break down as follows:

Mediapost Communicat ion posted revenue of

€482 million, up €30 million, buoyed by acquisitions

amounting to €23 million (acquisition of Adverline late

June 2012 and Cabestan in August 2012). Like-for-like

growth came in at €6 million or 1.4% mainly in relation

to the advertising business of Mediapost Publicité in a

declining market; Mediapost Publicité is tasked with

selling mail media to national advertising agencies

and media buying firms. Buoyant new business won

by Mediapost France, driven by a light upswing in the

printed advertising market in the second half, resulted

in almost flat revenue compared to 2012.

Docapost revenue remained at similar levels to

2012 (down €1 million or 0.2%) at €418 million. BPO

(Business Process Outsourcing) revenue grew despite

the anticipated decline in cheque processing business

and volumes from EBS (Electronic Business Solutions)

offering software solutions and secure electronic

communication services. The traditional activities of

DPS (Document Process Solutions) turned in satisfactory

2013 revenue, albeit down on 2012 given one-off business

last year.



Viapost posted revenue of €94 million, up €48 million,

including €58 mill ion related to acquisit ions:

consolidation of Orium in August 2012 and Morin in

December 2012, which positions Viapost as the No.1

independent logistics operator for e-business in France.

The like-for-like reduction of €10 million (22.6%)

primarily relates to the historical logistics business,

which declined due to a depressed market reflected

in some customers taking back processes in house.

Note that this unit still primarily sells to other Group

companies, notably in press and mail transport: Viapost's

2013 revenue before elimination of intercompany

transactions amounted to €503 million.

Asendia, posted revenue of €217 million (at 50% Group

share), which was similar to 2012.

10.3.1.3 Other key Mail indicators

2013 intercompany revenues between Mail parent company

and Sofipost totalled €711 million. The intercompany

services involved for these revenues cover:

parent company Mail services delivered to Sofipost

amounting to €153 million; these principally relate

to distribution of Mediapost Communication printed

advertising in rural areas and postage of Asendia's

international mail;

Sofipost services delivered to Mail parent company

amounting to €558 million relate primarily to the

following services:

- Mediapost Communication for marketing and

assembly of printed advertising material for

customers managed by the Mail sales forces,

- Viapost, via STP (press sorting and transport) and

Neolog (package transport and logistics services).

Total consolidated operating profit for the operational Mail

segment of €471 million reduced by €213 million or 31.1%

compared to 2012. This decrease is linked to a structural

decline in mail volumes made worse by the economic

recession which also hit the Sofipost business. The postage

price increase, the innovation policy and strict cost control

only partially made up for the downturn in business activity.

10.3.2 Parcels-Express

The Parcels-Express Business Line combines the activities

of ColiPoste and GeoPost:

ColiPoste specialises in the rapid delivery of BtoC or

CtoC parcels weighing up to 30 kg to private individuals

in France, with delivery on the second business day.

GeoPost covers the Express activities in France

and abroad under the following main brands: DPD,

Chronopost, Exapaq and SEUR. The unit’s subsidiaries

are mainly involved in the business to business (BtoB)

market, although they are increasingly involved in the

BtoC market (27% of sales in 2013).

The impact of the 2012 acquisitions (i.e. purchase of

SEUR franchises, purchase of Biocair and takeover of

IBC) as well as the 2013 acquisitions (largely new SEUR

franchises, equity in investment in DTDC and takeover of

Tigers) resulted in a total increase to GeoPost 2013 revenue

amounting to €130 million.


(€m) (as a %)

Revenue 5,988 5,580 +408 +7.3%

Of which intercompany revenue 5,947 5,538 +410 +7.4%

Operating expenses (5,569) (5,177) -392 +7.6%

Operating profit/(loss) 419 403 17 +4.1%

As a % of revenue 7.0% 7.2% -0.2 pt



10.3.2.1 ColiPoste

ColiPoste revenue continued to maintain the growth

trends seen in previous years. 2013 revenue amounted to

€1,597 million, up 2.8% or €43 million compared to 2012.

This increase was driven by €47 million or 3.1% growth in

traffic (excluding impact of business days) and by positive

price and mix variances amounting to €12 million or 0.7%.

The renegotiation of pricing agreements during the second

half was successfully dealt with the decline in the average

unit price that had arisen due to a higher proportion of large

customers. These positive variances were partly offset by

a €12 million or 0.8% reduction due to a higher number of

public holidays and a €4 million reduction in services and

amounts reinvoiced.

Volumes were boosted by 6.2% growth in BtoC Colissimo,

supported by a sharp increase in business from major

e-commerce operators while CtoC and Coliéco products

declined (down 3.2% and 11.1% respectively), Coliéco

being hit by difficulties among traditional distance selling

companies.

2013 quality of service remained high and almost

unchanged compared to 2012 with a 2-day delivery rate of

93% (94% in 2012).

ColiPoste launched the "Satisfaction 2015" project during

the first half of 2013. Satisfaction 2015 is a commitment

programme to ensure long-term performance focusing

on four points: customers (by offering innovations and

bolstering customer relations based on a high level of

on-time delivery), teamwork (by fostering a service culture

and by developing talent), business (by ensuring rapid

growth and enhancing competitiveness) and environment

(by ensuring CO2 neutral delivery and acting responsibly

towards suppliers).

10.3.2.2 GeoPost

GeoPost's 2013 revenue amounted to €4,391 million,

up 9.1% or €365 million compared to 2012. Excluding

acquisitions and disposals (which contributed €130 million)

and €50 million of currency losses, like-for-like growth

came in at €285 million, up 7.2%.

This sharp growth was underpinned by positive volume and

mix variances totalling €359 million (up 8.7%), whereas

changes in prices led to a €75 million reduction. The

increase in public holidays cost €3 million. Lastly, services

and other recharges grew by €3 million.

Revenue increased in all geographical regions, albeit based

on different situations:

still significant like-for-like growth in the UK subsidiaries

(up 20%) due to considerable new business won and a

surge in volumes;

a sharp rise in France revenues, Exapaq up 5% and

Chronopost up 8%, fuelled by growth in volumes. With

regard to Chronopost, very high volumes driven by

winning major accounts and a successful launch of the

BtoC business, was accompanied by lower revenue per

unit primarily due to changes in the product mix (sharp

growth in PickUp and DropOff deliveries);

the Benelux subsidiary continues to grow (up 8%)

boosted by buoyant volume growth abroad. This

improvement also came with expansion of the PickUp

and DropOff network;

the Spanish subsidiaries increased volumes by 11%,

which began in the first half of the year, having fallen for

the previous two years. This increase was underpinned

by a sales turnaround plan launched in 2012, which has

resulted in market share gains. However, the higher

volumes were partially offset by lower revenue per unit

caused mainly by a lower average parcel weight;

the German subsidiary's sales rose 2% compared to

2012, principally driven by a price increase that was

designed to track increases in operating costs for the

sector. Volumes hardly changed in a highly competitive

market and the Group's business in Germany is still

strongly focused on the BtoB market;

revenue in Russia continue to soar (up 21%). Revenues

increased in Poland (up 5%), the Czech Republic (up

10%) and in other Eastern European subsidiaries (up

18%).

10.3.2.3 Other key Parcels-Express indicators

Total 2013 intercompany revenues in both directions

between ColiPoste and GeoPost amounted to €64 million.

The services represented by these revenues cover:

GeoPost's services for ColiPoste amounted to €61 million

and consisted of IT developments performed by GeoPost

SI, PickUp and DropOff deliveries performed by Pick-up

Services and Chronopost as well as advisory services

performed by Chronopost's industrial Department.



ColiPoste's services for GeoPost amounted to €3 million

and consisted of invoicing parcel deliveries in France on

behalf of GeoPost's European subsidiaries.

Parcels-Express turned in 2013 operating profit of

€419 million, an increase of €17 million compared to

2012, which represents a margin of 7% marginally down

on 2012 (7.2%). The revenue increase was accompanied by

a controlled increase in ongoing expenses, even if in 2013

Parcels-Express had to cope with pressure on unit prices

caused by changes in the product and customer mix, and

one-off costs related to some strategic developments both

at ColiPoste and GeoPost to strengthen their positioning on

the promising “toC” market (i.e. PickUp and DropOff, choice

of delivery and information systems).

10.3.3 Banking Activities

The Banking segment includes La Banque Postale, its

subsidiaries and the pooled assets of both La Poste and

La Banque Postale that are subject to a cost allocation

agreement. All expenses relating to the asset pooling,

which mainly consist of costs of La Poste staff working

exclusively for La Banque Postale, are recharged at cost to

La Banque Postale.

10.3.3.1 Economic and financial environment

2013 featured record low interest rates:

EONIA rates remained under 0.1% reaching a low late

February of 0.06% while EURIBOR 3 months were slightly

higher at 0.2%. These rates began to pick up at the end

of the year reaching 0.15% and 0.28% respectively, driven

by lower interbank liquidity;

long rates, including the benchmark 10-year French

Treasury bond rate, continued to fall during the first four

months of the year reaching a record low at 1.67% late

April before very gradually rising and stabilising at the

end of the year at around 2.3%;

lastly, the fall in inflation led to two successive

reductions in the Livret A passbook savings interest

rate, on 1 February from 2.25% to 1.75% and on 1 August

reducing further to 1.25%. This hit volumes of new

savings deposited with La Banque Postale hard.

These exceptionally low rates buoyed the property loan

market, which also featured a high level of loan repayments.

The consumer credit market suffered from weak domestic

consumption and remains on a downward trend.

With regard to the local authorities credit market, demand

for credit has reverted to the pre-crisis level in a highly

competitive market. Alongside bank financing, funds

received from bond issue also met with some success.

The banking business was also affected this year by major

changes in regulations including the European Parliament's

adoption of the CRD IV/CRR transposing Basel 3 into

European law (final adoption dated 27 June 2013, which

was published in the official journal of the European Union).

10.3.3.2 Commercial Activities

In this environment of low interest rates and a sluggish

economy in France, La Banque Postale turned in a strong

commercial performance by continuing to develop its

core business while continually enhancing its offering.

Total outstanding customer savings increased by 3.0% to

€297.1 billion (up €8.5 billion including €2.3 billion from

the BPE acquisition):



(€ billion) 2013 2012Change

(€bn) (as a %)

Sight deposits 47.7 45,2 +2.5 +5.4%

Ordinary savings products 86.1 84.2 +1.9 +2.2%

Livret A passbook savings account 64.3 61.8 +2.6 +4.1%

Popular savings accounts 8.7 9.4 -0.7 -7.4%

Sustainable Development savings accounts (LDD) 7.2 6.4 +0.8 +11.8%

Other savings accounts 5.9 6.7 -0.7 -10.9%

Home savings accounts 27.0 26.5 +0.5 +2.0%

UCITS (a) 14.7 14.5 +0.2 +1.3%

Life insurance (a) 120.4 116.5 +3.9 +3.4%

Other (b) 1.2 1.6 -0.5 -28.3%

Customer savings (c) 297.1 288.6 +8.5 +3.0%(a) Products distributed by the La Banque Postale network and BPE.

(b) Term deposits and equity savings schemes.

(c) The 2013 acquisition of BPE had a €2.3 billion impact.

Outstanding sight deposits of €47.7 billion rose 5.4% (up

€2.5 billion), in line with La Banque Postale's strategy of

transforming inactive clients into active clients.

Outstanding ordinary savings products increased by

€1.9 billion or 2.2% to €86.1 billion, underpinned by a

€3.3 billion or 4.9% increase in Livret A passbook savings

accounts and Livret Sustainable Development accounts. The

successive interest rate reductions in 2013 nevertheless

dampened net inflows in these two products which turned

negative in the second half (Livret A outstandings totalled

€64.8 billion at 30 June 2013).

Outstanding home loan savings stood at €27 billion, a

marginal €0.5 billion increase (up 2.0%) boosted by Plans

Épargne Logement (home savings plans), which come with

an attractive interest rate.

Outstanding life insurance saving stood at €120.4 billion,

up €3.9 billion or 3.4%, including a 7.7% increase, or

2.4 percentage points, in the proportion of units of account

in total gross inflows compared to 2012.

Total outstanding UCITS savings stood at €14.7 billion

holding up thanks to lower outflows than in 2012 despite

extremely low short-term market interest rates and a

higher capital gains tax on investments held in ordinary

investment accounts.

Total outstanding loans amounting to €57.8 billion continue to display strong growth, up 17.3% or €8.5 billion (including

€2.5 billion from the BPE acquisition):

(€ billion) 2013 2012Change

(€bn) (as a %)

Property loans 49.8 45.0 +4.8 +10.7%

Consumer loans 3.4 2.6 +0.7 +28.2%

Other loans (a) 0.7 0.8 -0.1 -15.0%

Loans to legal entities (b) 3.9 0.8 +3.1 ns

Loans to customers (c) 57.8 49.3 +8.5 +17.3%(a) Overdrawn sight deposits and amounts owed on bank cards.

(b) Businesses, housing associations, voluntary organizations, and regional authorities.

(c) The 2013 acquisition of BPE had a €2.5bn impact.


In 2013, over €9 billion in property loans were granted, up

33% (excluding BPE) and a 1.3 percentage point gain in

market share to 7.7% in 2013. In addition to the buoyant

activities of the usual outlets, there was also growth in new



distribution channels. "Prescription" accounts for nearly

11% of total new loans in 2013 and the introduction of the

Accession Sociale (social accession) loan scheme enabled

La Banque Postale to be the third largest accession sociale

loan provider. Outstanding property loans of €49.8 billion

increased by 10.7% (up €4.8 billion). Excluding BPE, the

increase is 5.5% (up €2.5 billion).

In a declining market, La Banque Postale Financement

turned in 24% growth in production of consumer loans

thereby continuing to finance La Banque Postale customers

with a consumer loan market share up 0.9 points at 5%.

Outstandings rose 28.2% (up €0.7 billion) to €3.4 billion.

In 2012 La Banque Postale launched a range of loan offers

targeting businesses and the local public sector. In 2013,

a factoring offer for legal entities and products for public

health and local public institutions customers were added

to this range. As at 31 December 2013, total outstanding

loans in this market segment amounted to €3.9 billion, up

€3.1 billion.

10.3.3.3 Operating performance


(€m) (as a %)

Asset management 134 120 +14 +11.9%

Insurance 123 107 +17 +15.7%

Retail banking 5,281 5,015 +267 +5.3%

Net interest margin 3,416 3,186 +231 +7.2%

Commissions 1,990 1,901 +90 +4.7%

Other income and expenses (125) (72) -54 +74.9%


La Banque Postale's 2013 Net Banking Income (NBI)

amounted to €5,539 million. At constant consolidation,

adjusting for the home loan savings provision and for the

Cheque Scanning fine, NBI rose 2.7% fuelled by higher new

loans and more products sold to customers.

Asset Management NBI increased by 11.9% to €134 million

underpinned by buoyant equity markets (CAC 40 up 18%)

combined with a 3.5% increase in outstandings under

management to €149 billion—largely a result of strong

new business at LBP Gestion Privée, for which gross new

investments amounted to €535 million, up €180 million.

La Banque Postale still has the sixth largest market share

among asset management companies affiliated to a bank.

2013 Insurance NBI came in at €123 million, a sharp

15.7% increase (up €17 million) reflecting strong demand

for La Banque Postale products from customers. LBP

Assurances IARD (property and casualty insurance) rose

by €11.2 million backed by 863,000 policies while the NBI

of LBP Assurances Santé (Health insurance), launched late

2012, was €4.1 million with 56,400 policies.

The Retail Bank NBI adjusted for the home loan savings

provision (a €137 million reduction in 2012 and a

€23 million increase in 2013) and for the Cheque Scanning

fine (€33 million expense in 2012 and €16 million income

in 2013) increased by €156 million or 3.0%. This increase

was primarily due to:

a 1.3% increase in the net interest margin fuelled by

higher income in the loan business, which is expanding

its offering, and by lower remuneration paid on deposits;

a 4.0% increase in commissions, boosted by growth in

products sold to customers reflecting a 2.5 percentage

points increase over the year in the packages sold rate,

and boosted by the ongoing policy to move up market;

the May 2013 integration of BPE, undertaken so as to

develop high net work offering, delivered €41 million NBI

in 2013.




(€m) (as a %)


Management expenses (4,686) (4,481) -205 +4.6%

Gains and losses on other assets (a) 10 13 -3 -24.8%

Gross Operating Profit 863 773 +90 +11.6%

Cost of risk (154) (152) -3 +1.7%

Operating profit/(loss) 708 621 +87 +14.0%

La Banque Postale cost-to-income ratio 84.9% 85.8% -0.9 pt

(a) Including the negative goodwill on CNP.

Management expenses on Banking activities amounted

to €4,686 million, up 4.6% or -€205 million. This increase

includes the following items:

capital expenditure and assets provided to support the

growth of subsidiaries, as well as new credit activities for

legal entities (companies and local authorities);

the first-time consolidation of BPE in 2013 for which

expenses amounted to €35 million;

a tax penalty related to the ongoing inspection of

regulated savings.

At constant consolidation and excluding the notified fine,

management expenses increased by only 1.6% compared

to 2012.

Gross Operating Profit amounted to €863 million, an

increase of €90 million over 2012 with a cost-to-income

ratio of 84.9%, down 0.9 pt.

Cost of risk was €154 million, up €3 million compared to

2012. Adjusting for the 2012 €17 million impairment on

Greek sovereign debt and the BPE acquisition, this increase

amounted to €16 million, which was primarily caused by the

large increase in outstanding loans and remains fully in line

with market standards.

Operating profit amounted to €708 million, up €87 million.

With a view to supporting La Banque Postale's commercial

growth and to adapt to changes in regulations, on

12 December the La Poste Board of Directors resolved to

increase La Banque Postale's equity by €1,028 million. As

such, on 13 December €228 million were added to Core

Tier 1 equity via the contribution in kind of La Banque

Postale head office. In addition, an €800 million issue of

subordinated hybrid bonds, fully taken up by Le Groupe

La Poste, bolstered La Banque Postale's Core Tier 1 equity.

La Banque Postale's growth relies on a robust balance

sheet and a high solvency level: at 31 December 2013, the

Basel 2.5 Core Tier 1 ratio stood at 11.4% following the

€228 million capital increase.

Following the €800 million issue of Tier 1 hybrid bonds, the

La Banque Postale Tier 1 ratio is 13.2%.

La Banque Postale is underpinned by a strong Basel III

Common Equity Tier 1 ratio (1) of 10.2% as at 31 December

2013.

La Banque Postale's liquidity remains very strong with a

loans to deposits ratio of 67% and a LCR ratio of 152% as

at 31 December 2013, well above regulatory requirements.

(1) Applying the transitional rules and the provisions of the Danish compromise. The fully loaded CET1 ratio is estimated at 11.2%.



10.3.4 Retail Brand

The "Retail Brand" segment covers all consumer sales and distribution of Le Groupe La Poste products and services (parent

company Retail Brand) as well as La Poste Telecom activities, which are marketed under the brand "La Poste Mobile".


(€m) (as a %)

Revenue 4,230 4,231 -1 -0.0%

Of which intercompany revenue 92 88 +4 +4.3%


Operating profit/(loss) 34 16 +17 nsns = not significant.

10.3.4.1 Parent company Retail Brand

To market its products and services to the general public,

the Retail Brand provides La Poste with the most extensive

distribution network of 17,081 outlets in France as at

31 December 2013, including 7,360 partnerships (Local

Postal Agencies and Relais Poste outlets).

For several years, the Retail Brand has engaged in a

programme to modernise and rationalise the network in

order to boost its attraction, offer a top quality of service

while controlling trends in operating costs:

This is reflected in the ongoing renovation of post

offices undertaken over the last few years that includes

deployment of the ESC model (Customer Service Area) so

as to transform the post offices from a standard counter-

based service to a multi-channel model including

reception and customised advice and sales, tailored to

the diverse customer needs. In 2013, 324 additional post

offices were modernized (211 in 2012).

This concept is also based on providing consumers with a

large number of vending machines, both for the banking

business and for the mail/parcels business: 20,899 ATMs

(mail, parcels and banking) including 3,535 introduced

in 2013.

This major Group project resulted directly in cutting

waiting times in post offices, thereby enhancing the

quality of customer service. As a result, the average

time spent waiting for service at a counter has reduced

by three minutes in the past four years from 7 minutes

19 seconds in November 2009 to 4 minutes 25 seconds

in November 2013 (measured every six months by Ipsos).

In line with the Retail Brand network modernisation and

with a view to diversifying activities within post offices

so as to enhance their attraction, the Retail Brand is

currently testing new services such as digital tablets in

50 Local Postal Agencies and 3D printers in three Paris

region post offices. Based on feedback from this test, the

project will be rolled out in several French cities.

The attraction of the network contributes directly to

the Group's Business Lines' sales growth, in particular

La Banque Postale, as shown by 19.4% and 16.3%

increases in property loans and consumer loans sold

respectively compared to 2012.

The Retail Brand network underlies the synergies between

a digital and physical presence through increasing growth

in online sales of Group products, access to key information

at outlets (visiting bank consultants, opening times, prices,

etc.) and even the option to submit a complaint online.

Group Business Lines are charged for using this

commercial network based on actual services performed by

the Retail Brand on their behalf, and this represents most

of the Retail Brand revenue:

service agreements based on operating indicators (e.g.

revenue, number of items handled) with Mail, ColiPoste

and Chronopost;

a service agreement with La Banque Postale based on

transactions handled at the counter and charged based

on actual costs for the banking advisory line hosted by

the Retail Brand (e.g. financial advisors etc.);

transfer of costs related to the Universal Postal Service

and regional planning and development missions,

and transitional expenses (including end-of-career

mechanisms) to the 'Unallocated' segment.



The 2013 recharges based on the service agreements were

similar to 2012, the lower volume of transactions handled

at the counters (down 5.8% in 2013 compared to 2012)

being offset by a higher proportion of transactions done

via ATMs (postal, parcels and banking), while Retail Brand

costs remained flat thanks in part to the CICE tax credit (for

competitiveness and employment).

2013 operating profit rose by €17 million compared to 2012.

10.3.4.2 La Poste Mobile

La Poste Telecom, the Group's 51%-owned MVNO joint

venture with SFR holding the remaining 49%, markets its

services under the "La Poste Mobile" brand.

Early in 2012, the La Poste Mobile was hit by a price war

among competitors selling low-level offers online. La Poste

Mobile then successfully responded with very competitive

mobile phone packages sold in post offices. 2013 marked a

record with the sale of 633,000 new lines (383,000 in 2012).

The total number of lines was 963,000 at 31 December 2013

up 319,000. The one million customers mark was reached

in January 2014.

The benefit of a sharp growth in volumes (year-end

number of lines up 50% compared with 2012) on revenue

is mitigated by the sale of low-cost packages (in particular

packages without phones supplied) leading to a lower

average revenue per unit. La Poste Mobile's 2013 revenue

came in at €148 million, up 7.0% over 2012.

In the first half year, La Poste Mobile also launched

"quadruple play" packages in partnership with SFR

(20,000 broadband packages have been sold by the Retail

Brand network).

10.3.5 Real estate

The real estate segment consists of the subsidiary Poste Immo and is overseen by the real estate Department.


(€m) (as a %)

Revenue 908 851 +57 +6.7%

Of which intercompany revenue 62 41 +20 +49.5%

Operating expenses (847) (797) -50 +6.2%

Gains (Losses) on disposal 74 55 +19 +34.4%

Operating profit/(loss) 135 109 +26 +24.1%

At the end of December 2013, real estate revenue amounted

to €908 million, an increase of €57 million or 6.7% in

relation to 2012:

The Group share of growth in joint development

revenue, which are consolidated under the proportional

consolidation method, amounted to €23 million.

Revenue excluding property development activities

consisting of rental income primarily from third parties

reduced by €3 million.

2013 intercompany revenue amounting to €846 million

increased by €37 million or 5%, boosted by rent indexing

and additional rental income charged to the Retail Brand

notably work to improve customer service as part of the

post offices modernisation project. Surface area used fell

by 132,000 square metres.

2013 operating profit came in at €135 million, an increase

of €26 million compared to 2012. This increase is mainly

due to gains on asset sales, which increased by €19 million

due to one material €65 million gain in second half 2013

on the sale of the head office to La Banque Postale, which

was eliminated on consolidation. Excluding this transaction,

2013 gains on asset sales fell compared to 2012 on account

of material asset sales in 2012 (e.g. Creteil parcels hub, mail

Industrial Platforms of Rennes and Issy-les-Moulineaux).

2013 operating profit excluding gains on disposal increased

by €7 million.



10.3.6 Other segments

10.3.6.1 Shared Services

The "Shared Services" segment consists of Support Departments (primarily IT, car fleet administration and procurement) which

recharge their services to other operating segments, the Group head office and the Digital department (set up on 1 July 2013).

(€ million) 2013 2012 (a)

Change(€m) (as a %)

Operating revenue 825 840 -15 -1.8%


Operating profit/(loss) (211) (188) -23 -12.4%(a) Reported in 2012: change in accounting policy (tax adjustments, SLP products and Vehiposte peripheral products)

2013 operating profit came in at €825 million and includes:

€782 million for intercompany revenue resulting from

invoices by the Support Departments for services

delivered to other operating segments and recharges for

head office service centres. Unit prices are established

prior to commencing work in a service agreement and

amounts charged are based on actual volumes;

€43 million of Group head office costs in respect of

management fees paid by subsidiaries.

Intercompany revenue fell marginally, by €15 million

compared with 2012, in line with a reduction in demand

from customers especially for IT services, reflecting stricter

cost control among the various segments.

Operating expenses increased by €8 million due to:

a €15 million reduction in intercompany revenue, which

are reflected in operating expenses;

stable head office costs (excluding the Institute of

Management);

the cost to set up the Institute of Management in early

October amounting -€3 million;

transfer of the Mail's digital business to the Digital

Department costing €5 million;

accounting adjustments for prior years amounting to a

€15 million expense.

10.3.6.2 Unallocated expenses

The "Unallocated segment" includes the costs of the

regional planning deriving from the Universal Service

Obligations, the costs of the regional planning mission

and the corresponding discount on local tax charges, and

lastly, the transitional expenses relating to end-of-career

mechanisms throughout the Group, and as such not

allocated to the Business Lines.

(€ million) 2013 2012

Change

(€m) (as a %)

Net cost of regional postal presence (616) (621) +5 -0.8%

Other operating expenses (103) (211) +108 -51.2%

Operating profit/(loss) (719) (832) +113 +13.6%

The €108 million decrease in operating costs resulted from a sharp decline in transitory expenses due to setting up a cheaper

scheme in 2014 than in 2013.


Review of the financial position and results Other income statement aggregates 10

10.3.6.3 Consolidation adjustments

€65 million of the €67 million consolidation adjustment represents the elimination of the intercompany gain earned by Poste

Immo on sale of the La Banque Postale head office (see 3.5 above).

10.4 Other income statement aggregates

10.4.1 Financial profit/(loss)


(€m) (as a %)

Net interest expense (174) (160) -14 +8.9%

Change in fair value excl. spread and change in debt

credit spread (24) (61) +37 -60.8%

Cost of net financial debt (198) (221) +23 -10.4%

Other financial items (25) (63) +38 -60.8%

Financial profit/(loss) (223) (284) +61 +21.6%

2013 financial profit/(loss) of €223 million improved by

€61 million compared to 2012.

While the net interest expense on debt rose by €14 million,

the average bond interest rate, after active management,

reduced from 3.28% in 2012 to 3.0% in 2013, albeit offset by

an increase in the value of average debt from €5.6 billion to

€6.2 billion. Financial income fell due to lower EONIA and

EURIBOR interest rates (down on average by a factor of 2.5).

The 2013 average cost of debt before active management

amounted to 4.31%.

The 2013 impact from the fair value adjustment on debt

is amounting to €24 million, mainly due to a further

decline in La Poste's credit spread of €51 million (the

EURIBOR 3 months spread decreased from 90 basis points

at 31 December 2012 to 60 basis points at 31 December

2013), which increased the value of the existing debt thereby

leading to an expense in the accounts. 2012 had also been

featured by a negative fair value adjustment on the swaps

portfolio following a sharp decline in long-term rates.

2013 other financial profit/(loss) items (a €25 million

expense) principally arises from an accretion expense on

staff provisions, which reduced by €31 million compared

to 31 December 2012, following a decline in discount rates.


Review of the financial position and results Debt and financial strength10

10.4.2 Net profit, Group share


(€m) (as a %)

Operating revenue 22,084 21,657 +427 +2.0%


Operating profit/(loss) 770 816 -46 -5.6%

Financial profit/(loss) (223) (284) +61 +21.6%

Profit before tax 548 532 +15 +2.9%

Income tax (127) (231) +104 +44.9%

Share in profits of equity associates 215 180 +36 +19.8%

Consolidated net profit 635 481 +155 +32.2%

Net profit/(loss), Group share 627 479 +148 +30.9%

Non-controlling interests (8) (2) -7 ns


Net profit, Group share increased from €479 million at

the end of 2012 to €627 million at the end of 2013, up

€148 million:

Profit before tax rose marginally by €15 million to

€548 million given that the reduction in operating profits

was offset by lower financial expenses (see above);

The Group tax charge amounted to €127 million, a

€104 million decrease compared to 2012, due specifically

to the lower profit before tax excluding the CICE tax

credit income of €297 million, which was not taxable;

2013 share of profits of equity associates amounted to

€215 million, up €36 million over 2012, and mainely

comprises contribution of CNP Assurances, in which the

Group holds a 20.15% equity stake.

10.5 Debt and financial strength

The tables below are set out so as to present both the

banking activities and the industrial and commercial

activities within the same group while providing a more

economic view of their respective contribution to Group

cash flow.

As Group parent company, La Poste provides funding

for industrial and commercial activities and equity for

La Banque Postale. La Banque Postale, although fully

consolidated, provided it meets minimum regulatory equity

requirements, distributes dividends to its parent company,

which are treated as Group cash flows.

Consequently, Group net debt excludes La Banque Postale

for which the concept of net debt is not relevant. Group net

debt therefore changes based on the following:

free cash flows generated by industrial and commercial

activities (i.e. EBITDA, changes in working capital, capital

expenditure and any acquisitions);

dividends paid by La Banque Postale or equity associates

to La Poste;

the tax charge applying to the tax consolidation group

comprising La Poste and its subsidiaries;

La Poste's cost of capital employed based on interest

paid on net debt and dividends paid to shareholders.


Review of the financial position and results Debt and financial strength 10

10.5.1 Change in net debt

10.5.1.1 Cash flows from operating activities

Cash flows from operating activities reduced by €140 million compared to 2012:


(€m) (as a %)

EBITDA (excluding La Banque Postale) 824 915 -91 -9.9%

Dividends received from LBP and equity associates 267 193 +74 +38.1%

Change in working capital 144 73 +71 +97.8%

CICE for the year (a) (253) 0 -253 -

Taxes paid 97 40 +57 ns

Other cash flows from operating activities (23) (25) +2 -7.1%

Cash flows from operating activities 1,056 1,195 -140 -11.7%(a) CICE on remuneration paid during the year. This does not include CICE in respect of provisions for employee benefits. This CICE is included under

EBITDA but had no cash impact in 2013.


At the end of 2013, EBITDA excluding La Banque Postale

fell by €91 million, largely due to lower EBITDA of the

Mail parent company (down €186 million), which suffered

from a more rapid decline in mail volumes during 2013.

Growth in EBITDA of the subsidiaries, particularly

Sofipost (up €26 million) and GeoPost (up €29 million),

partly offset the decline in the Mail parent company.

2013, dividends received from La Banque Postale and

the equity associates increased by €74 million given that

La Banque Postale posted a higher 2012 net profit than

in 2011 (2011 was hit hard by the Greek sovereign debt

crisis).

2013, a positive change in working capital, principally

due to a €108 million reduction in cash held in post

offices. The month-end value of cash held in post offices

fluctuates considerably mainly due to required cash

reserves to replenish ATMs, which strongly depends

on the timing of the last day of the month (e.g. larger

reserves required just before a weekend).

The 2013 impact of CICE (tax credit for competitiveness

and employment), which is recognised as a deduction

from personnel expenses under EBITDA excluding

La Banque Postale, amounted to €253 million. 2013

CICE will not impact cash flow until 2014 at the earliest,

by setting it off against tax payable in respect of 2013,

and 2017 at the latest in the form of a payment from the

tax authorities, in accordance with the relevant statutory

conditions.

Accounting for tax resulted in a €97 million improvement

in the Group's net debt (1) during 2013, in part due to

setting off the losses from the non-banking activities

against tax paid by La Banque Postale to the parent

company in accordance with the tax consolidation group

procedures, and in part due to the French government's

repayment in 2013 of the receivable balance of the

Group's payments on account in 2012 (the Group's

available tax credits cannot be offset against future

payments on account).

(1) Group net debt excludes La Banque Postale for which this is not relevant.



10.5.1.2 Cash flow from investing activities excluding La Banque Postale

At the end of December 2013, net cash flow from investing activities excluding La Banque Postale amounted to €1,561 million,

up €833 million over 2012 including €800 million from the La Poste purchasing hybrid bonds issued by La Banque Postale

so as to strengthen its equity.


(€m) (as a %)

Purchase of intangible assets and P, P&E (837) (864) +26 -3.1%

Purchase of financial assets (a) (826) (35) -791 ns

Asset disposals 151 252 -101 -39.9%

Acquisitions of subsidiaries less cash acquired (50) (83) +33 -40.0%

Disposals of subsidiaries less cash included in disposal 0 1 -1 ns

Cash flow from investing activities excluding LBP (1,561) (728) -833 ns(a) Of which €800 million to increase La Banque Postale's equity in 2013.


Purchase of intangible assets and P, P&E

2013 purchases of intangible assets and property, plant and

equipment were similar to 2012 (up €26 million or 3.1%).

Capital expenditure was boosted by investment in the

European and international network of the Express business

(particularly in UK in 2013), while also including ongoing

refurbishment of the post office network, maintenance of

the real estate portfolio and industrial tool, vehicles and

information systems. Tight control over capital expenditure,

particularly regarding real estate and Mail segments has

resulted in overall stable investments.

Purchases of intangible assets and property, plant and

equipment are broken down by Business Line as shown

below. It should be noted that the electric vehicle equipment

held by Véhiposte explains most of the sharp increase

in capital expenditure for Support Services in line with

commitments made by the Group.


(€m) (as a %)

Mail (173) (197) +24 -12.0%

Parcels-Express (197) (169) -28 +16.9%

Retail Brand (34) (37) +3 -7.8%

Real estate (249) (288) +39 -13.7%

Support (184) (173) -11 +6.3%

Purchase of intangible assets and P, P&E (837) (864) +26 -3.1%

Change in non-current asset accounts payable 6 (12) +17 ns

Capital expenditure excluding LBP (832) (875) +44 -5.0%ns = not significant.



Purchases of financial assets

Purchases of financial assets (guarantee deposits and equity

investments) are stated excluding "Cash investments with a

maturity of over three months" (amounting to €655 million

and €815 million at the end of 2013 and at the end of 2012

respectively), which represent security for the bond debt in

line with the Group’s ongoing cash management procedures

and are reported as a deduction to net debt (1).

The vast majority of 2013 purchases of financial assets

consists of the €800 million purchase of the La Banque

Postale hybrid bonds carried out in conjunction with

strengthening this subsidiary's equity.

Acquisitions and external growth

2013 acquisitions were made by GeoPost: 40% equity

investment in India-based DTDC, acquisition of a controlling

interest in Tigers and acquisitions of new SEUR franchises.

Pursuant to the general principles mentioned above,

La Banque Postale's April 2013 purchase of Banque Privée

Européenne (BPE) for €115 million (see Section 10.1.4.3)

is not included in this total, but is taken into account via

La Banque Postale's distributable earnings.

Asset disposals

2013 asset disposals, which amounted to €151 million, are

lower than 2012, when the Group sold two major assets in

the first half of 2012 comprising the Issy-les-Moulineaux

site and a facility in Créteil.

10.5.1.3 Change in net debt

In 2013, the Group consumed €852 million of cash for

operations: in addition to a net free cash outflow of

€505 million, including €800 million to purchase La Banque

Postale hybrid bonds as stated above, the Group paid out

€175 million in shareholder dividends in respect of 2012

earnings and paid €172 million in net interest costs.

The April 2013 payment of the third and last €600 million

instalment of the capital increase, limited the increase in

Group net debt (1) to €318 million over the year, reaching

€3,778 million at the balance sheet date.


(€m) (as a %)

Cash flows from operating activities 1,056 1,195 -140 -11.7%

Cash flow from investing activities (1,561) (728) -833 ns

Free cash flows (505) 467 -973 ns

Dividends paid (175) (148) -27 +18.4%

Net interest paid (172) (164) -8 +4.7%

Net free cash flows (852) 156 -1,007 ns

Capital increase 600 1,053 -453 -43.0%

Impact of changes in consolidation on gross debt (15) (32) +17 -52.4%

Purchase of non-controlling interests (9) (25) +16 -64.4%

Unrealised gains and losses relating to changes in fair

value (28) (58) +30 -51.9%

Increase in finance lease liabilities (17) (7) -10 ns

Change in accrued interest not yet due on financial

instruments 8 0 +7 ns

Other items (a) (5) (2) -3 ns

Change in net debt (b) (318) 1,084 -1,402 ns(a) "Other items" includes the impact of changes in exchange rates on net debt.

(b) " - ": increase / "+": decrease.


(1) Group net debt excludes La Banque Postale for which net debt is not relevant.



10.5.2 Change in cash and cash equivalents

Le Groupe La Poste's cash and cash equivalents increased

from €2,167 million at the beginning of the year to

€2,163 million at 31 December 2013, a €4 million decrease,

primarily as a result of:

• a net free cash outflow of €852 million including

€800 million in La Banque Postale hybrid bonds;

• the Apri l 2013 capital increase amounting to

€600 million;

• the €357 million net cash outflow from financing

activities primarily relates to bond transactions, with

a debt redemption of €726 million in November 2013

and €250 million of new borrowings contracted early

November 2013. This line also includes changes in debt

corresponding to secured cash on financial instruments

(amounting to some €100 million in respect of coupons

received in 2013);

• the change in financial assets used in cash management

represented by a cash inflow of €157 million that

primarily arose from negotiable debt securities,

dedicated funds and over three months fixed term lines

falling due (totalling €500 million) offset in part by two

new dedicated funds as security for the Feb 2016 bond

tranche (totalling €350 million);

• the intercompany cash inflow of €557 million, which

consists of changes in La Poste's account balance

with La Banque Postale and principally arose from

a €500 million term account used as security for the

€726 million of borrowings repaid in November 2013.


(€m) (as a %)

Net free cash flows (852) 156 -1,007 ns

Capital increase 600 1,053 -453 -43.0%

Change in cash flows from financing activities (357) 54 -411 ns

Change in financial assets used in cash management 157 (148) +305 ns

Other cash flows from financing activities (97) 63 -160 ns

Intercompany cash flows 557 (159) +716 ns

Other items (a) (14) 2 -16 ns

Change in cash and cash equivalents (4) 1,022 -1,026 ns

Opening cash and cash equivalents 2,167 1,146 +1,022 +89.2%

Closing cash and cash equivalents 2,163 2,167 -4 -0.2%(a) Other items: Exchange differences and change in accounting policy (€5 million outflow) and purchase of non-controlling interests (€9 million outflow).




10.5.3 Breakdown of financial debt

10.5.3.1 Gross debt

A breakdown of the Group’s gross debt as at 31 December 2013 and 2012 is provided below:

(€ million)

2013 2012

Short-term

Medium- and

long-term TotalShort-

term

Medium- and

long-term Total

Bonds 207 5,925 6,133 726 5,968 6,694

La Poste savings bonds 63 0 63 66 0 66

Commercial paper 150 0 150 0 0 0

Deposits and guarantees received 368 26 394 486 25 512

Accrued interest 132 0 132 139 0 139

Other 140 91 232 151 91 242

Gross debt 1,060 6,043 7,103 1,567 6,085 7,652

La Poste's gross bond debt is made up of around 10

originally fixed-rate loans, some of which have been

converted into variable rate loans and others converted into

new fixed-rate loans based on forecast interest rate rises.

In November 2013, a €726 million bond was repaid and a

new 11-year €250 million bond maturing in November 2024

was issued by adding to the existing bond line, at a fixed

coupon of 2.75% per year.

Note that the deposits and guarantees, which largely

consist of secured cash with banking counterparties for

swaps "in profit", reduced by €118 million due to coupons

received in 2013.

The 2013 cost of debt came in at 3% down from 4.31%

before active management.

10.5.3.2 Net debt


(€m) (as a %)

Closing gross debt 7,103 7,652 -549 -7.2%

Cash and cash equivalents (2,163) (2,167) +4 -0.2%

Other assets (1,162) (2,025) +864 -42.6%

Closing net debt 3,778 3,460 +318 +9.2%



Group net debt at 31 December 2013 amounted to

€3,778 million, up €318 million compared to 31 December

2012.

Other assets consist of:

investments maturing in over three months, including

a portion of the cash investments backing future bond

repayments;

derivative investments linked to debt;

guarantee deposits paid on derivatives recognised as

assets;

the net financial balance with La Banque Postale.

The €318 million increase in net debt, which includes the

La Poste purchase of €800 million of hybrid bonds so as to

increase La Banque Postale's equity and the payment of the

last €600 million instalment of the Group's capital increase,

resulted in holding gearing (net debt (1) divided by equity) at

0.45 as at 31 December 2013.

10.5.4 Equity and financial structure


(€m) (as a %)

Opening consolidated equity, Group share 7,470 6,783 +687 +10.1%

Capital increase 600 0 +600 -

Net profit/(loss), Group share 627 479 +148 +30.9%

Dividend payments (171) (144) -27 +18.4%

Unrealised gains and losses on financial instruments 33 439 -406 -92.6%

Translation adjustments (75) (16) -59 ns

Change in the fair value of call options on non-

controlling interests 0 0 0 -

Actuarial gains (losses) (81) 0 -81 -

Other items 57 (71) +128 ns

Equity, Group share 8,460 7,470 +990 +13.2%

Non-controlling interests 57 65 -9 -13.1%

Closing consolidated equity 8,516 7,535 +981 +13.0%ns = not significant.

Equity, Group share, amounted to €8,460 million at 31 December 2013, up €990 million, and includes the €600 million April

2013 capital increase.

(1) Group net debt excludes La Banque Postale for which net debt is not relevant.


Review of the financial position and results Analysis of the parent company financial statements 10

10.5.5 Credit rating

On 11 July 2013, while Standard and Poor's confirmed La Poste's credit rating, it marked down the outlook from "positive"

to "stable".

Following the downgrade in France's long term credit rating from AAA to AA+, Fitch Ratings revised La Poste's long-term

rating to AA- with a stable outlook.

Company AgencyLong-term

ratingShort-term

rating Outlook Last revised

La Poste Fitch Ratings AA- F1+ Stable 17 July 2013

Standard and Poor’s A A-1 Stable 11 July 2013

La Banque Postale's credit rating was also revised in 2013.

Company AgencyLong-term

ratingShort-term

rating Outlook Last revised

La Banque Postale Fitch Ratings A+ F1+ Stable 24 July 2013

Standard and Poor’s A A-1 Stable 12 November 2013

10.6 Analysis of the parent company financial statements

La Poste’s company financial statements are prepared in accordance with French GAAP and with the provisions of the French

General Chart of Accounts.

10.6.1 Operating profit/(loss)


(€m) (as a %)

Operating revenue 14,625 14,980 -355 -2.4%


Operating profit/(loss) (549) (369) -180 +48.7%

Financial profit/(loss) 340 286 +54 +18.9%

Non-recurring items (21) (26) +6 -21.0%

Tax 314 175 +139 +79.3%

Net profit/ (loss) 84 66 +19 +28.7%


Review of the financial position and results Analysis of the parent company financial statements10

La Poste’s 2013 operating income, which primarily consists

of revenues from the Mail and Parcels business, the Retail

Brand's invoices to La Banque Postale, and recharges from

the shared resources unit to La Banque Postale in respect

of personnel expenses for the financial centres and the

banking advisory line, amounted to €14.6 billion, down 2.4%

compared with 2012 in line with the decline in mail volumes.

2013 operating expenses amounted to €15.2 billion, down

1.1% or €176 million. Personnel expenses reduced by

€278 million, due mainly to the €269 million CICE tax credit.

Purchases and other external expenses rose by €45 million.

Depreciation, amortisation, impairment and provision

charges increased by €66 million.

La Poste’s 2013 operating loss amounted to €549 million,

i.e. a deterioration of €180 million, which was primarily

related to the fall in mail volumes.

10.6.2 Financial profit/(loss)


(€m) (as a %)

Net expense on loans and borrowings (62) (66) +4 -6.2%

Income from equity investments 348 286 +61 +21.4%

Other financial income and expenses 54 66 -12 -17.7%

Net financial profit/(loss) 340 286 +54 +18.8%

The net expense on loans and borrowings amounted

to €62 million, primarily comprising interest costs on

borrowings, principally bonds issued by La Poste.

Dividends received from subsidiaries amounted to

€348 million (including €258 million from La Banque

Postale and €77 million from GeoPost), up €61 million

largely due to La Banque Postale's increased net profit in

2012 (while 2011 net profit was hit by impairment charges

on Greek Government bonds).

Other financial income and expenses primarily comprise

reversals of provisions on financial instruments.

2013 financial profit amounted to €340 million, a €54 million

increase compared to 2012 financial profit of €286 million.

10.6.3 Net profit/ (loss)

The loss before tax increased by €121 million to

€230 million.

Tax income increased by €139 million to €314 million.

Tax income results from the positive impact of the tax

consolidation group, which in 2013 saw an increase in

tax paid by La Poste S.A. subsidiaries (that are offset by a

higher amount of tax losses), notably La Banque Postale.

La Poste’s net profit amounted to €84 million, up

€19 million or 28.7% compared with 2012.


Review of the financial position and results Analysis of the parent company financial statements 10

10.6.4 Balance sheet

Assets(€ million) 2013 2012

Equity and liabilities(€ million) 2013 2012

Non-current assets 11,796 11,062 Equity 5,458 4,946

Current assets 2,353 2,009 Provisions 1,814 1,779

Financial debt 6,614 7,063

Cash and cash equivalents 3,558 4,364 Current liabilities 3,821 3,647

Total 17,707 17,435 Total 17,707 17,435

10.6.4.1 Assets

Non-current assets increased by €734 million including

€858 million on non-current financial assets following the

purchase of La Banque Postale hybrid bonds in conjunction

with its capital increase.

The increase in current assets largely relates to a

French government receivable for CICE (tax credit for

competitiveness and employment).

Cash and cash equivalents at 31 December 2013 amounted

to €3,558 million, down €805 million due to investing in

La Banque Postale's increase in equity.

10.6.4.2 Equity and liabilities

Equity amounted to €5,458 million at 31 December 2013, an

increase of €512 million compared to 2012, boosted by the

€600 million capital increase in April 2013.

Contingency and loss provisions amounted to €1,814 million

and financial debt stood at €6,614 million. Current liabilities

amounted to €3,821 million.


(€m) (as a %)

Trade payables maturing in less than 60 days 1,198 1,219 -21 -1.7%

Trade payables maturing in over 60 days 3 4 -1 -19.1%

Trade payables 1,201 1,223 -22 -1.8%

Trade payables amounted to €1,201 million as at 31 December 2013, of which €1,132 million owing for operating expenses

and €68 million owing for capital expenditure.


Review of the financial position and results Other financial information10

10.7 Other financial information

2013 2012 2011 2010 2009 2008

Operating revenue 14,625 14,980 15,228 15,236 15,314 15,967

Unallocated expenses (15,174) (15,349) (15,433) (15,707) (15,491) 15,761

Operating profit/(loss) (549) (369) (205) (471) (176) 207

Financial profit/(loss) 340 286 289 277 101 131

Non-recurring items (21) (26) (1) 0 (16) (43)

Tax 314 175 96 76 121 6

Net profit/(loss) 84 66 179 (117) 30 300

Share capital (€) 3,800,000,000 3,400,000,000 3,400,000,000 1,000,000,000 N/A N/A

Number of shares 950,000,000 850,000,000 850,000,000 500,000,000 N/A N/A

Revenue excl. tax 12,089 12,373 12,696 12,713 13,064 13,654

Profit/loss before tax,

depreciation and reversals 219 273 638 593 447 704

Tax 314 175 96 76 121 6

Profit/loss before tax,

depreciation and reversals 84 66 179 (117) 30 300

Profit distributed (171) (144) (136) (105) (106) (141)

Earnings per share after tax 0.09 0.08 0.21 (0.23) N/A N/A

Net earnings per share 0.09 0.08 0.21 (0.23) N/A N/A

Dividend per share 0.18 0.17 0.16 0.21 N/A N/A

Number of employees (full-time employee equivalents per annum) 218,941 221,656 226,502 236,593 248,287 257,120

Wages and salaries 6,792 6,821 6,868 7,024 7,114 7,204

Non-wage labour costs 1,546 1,528 1,374 1,322 1,305 1,323


Review of the financial position and results Post balance sheet events 10

10.8 Miscellaneous

TABLE SUMMARISING THE POWERS DELEGATED AND THEIR USE DURING FISCAL YEAR 2013

FOR THE INCREASE IN CAPITAL AT LA POSTE

Type of authorization granted to the Board of Directors

Date of Extraordinary

General Meeting

Expiry date of

delegation of authority

Amount authorised

Issue(s) made during 2013

Issue(s) made since the end

of the year

Authorization to increase

the share capital through

the exercise of warrants

(with waiver of preferential

subscription rights

for warrant holders) 6 April 2011 30 April 2013 €600,000,000 €600,000,000 None

10.9 Post balance sheet events

Not applicable.


11Cash, cash equivalents and equity


Cash, cash equivalents and equity 11

Information on share capital and cash flows is described in Chapter 10, Section 10.5.


12Outlook


Outlook 12

2014 began in an economic environment characterized by

recovery, which is modest in France and more pronounced

in Europe, moderate inflation, economic policies aimed at

reducing public expenditure, and long-term interest rates

that are still at low levels.

In this context, the Group has set itself the target of expanding

its revenue by 1% to 2%, driven by growth in Parcels, Express,

and La Banque Postale. Operating profit is expected to drop

sharply because the effect of the contraction in mail volumes

will not be completely offset.

To restore the Group's economic balance and to place it in

a sustainable development perspective that will guarantee

the accomplishment of its public service missions, a new

strategic plan was proposed to the Board of Directors at

its meeting of 28 January 2014. This plan prioritizes the

development of the Group and each Business Line. It

is based on innovation, digital transformation and the

conquest of new areas that are booming. Moreover, an

overall cost management effort to adapt costs to changes

in business activities and customer needs will enable the

Group to improve its performance, to return it to sound

health and to regain its development capacities.

That is what the plan, "La Poste 2020: Conquering the

future" is all about.

By business

Mail

As is the case in other European countries, the fall in paid

traffic is expected to continue and could reach -7.5% per

year by 2020. To deal with these challenges, Mail's goal is to

consolidate its position as the premium medium in the global

and multi-channel customer relationship, and to become the

leading local service network by drawing on its network of

connected postmen (Facteo). In this context, ColiPoste will

merge with the Mail business and will continue to develop

its parcel delivery service and the continuous improvement

in the quality of service to customers.

Mail is also planning to introduce a pricing policy enabling

it to maintain a high quality of the Universal Postal Service.

Express

GeoPost's goal is to build the first continental-scale hybrid

(B-to-B and B-to-C) network in Europe and to become the

European market leader for delivering parcels to private

individuals, via internal growth and acquisitions. The

offering will be complemented by new services and by

simple and innovative solutions. The connection with an

international network will also be strengthened, thanks

to the development of the freight forwarding business, to

external growth, or to duplicating the European model on

other continents.

La Banque Postale, bank and citizen

The Bank will step up its growth by increasing the services

subscribed by all its customers and will reinforce its

new business lines: multi-channel banking for private

customers and a bank for legal entities, giving priority to the

professional segment and by becoming the reference bank

for local authorities. It will intensify its efforts to improve

its operational efficiency, and will develop digital banking,

all the while ensuring that it proposes relevant solutions to

vulnerable customers. It will also ensure the continuity of

the financing of its missions of general interest. All this will

be done in a context of equity optimisation and risk control.

Retail Brand

The Retail Brand is positioning itself as the standard-setting

service and public service network and the convergence

point between physical and digital media. It will support,

in particular, the commercial development of La Banque

Postale, La Poste Mobile, and of the professional offerings

of all of the Group's Business Lines.

The Retail Brand also aims to improve its economic

efficiency, by adjusting the network and the office formats

to its customers' new life styles and consumption habits,

while increasing the accessibility of the network.

The Retail Brand will ensure the best possible linkage

between its network (rural as well as urban) and the

Group's other physical and digital networks, to bring a

coherent solution to the client-consumer.

La Poste Mobile

La Poste Mobile will continue its sales momentum on its

mobile and ADSL offering, as illustrated with the recent

launch of 4G. Offerings shared with the other Business

Lines will be developed, like contactless mobile payment.

Digital business activities

The digital businesses will accelerate the Group’s digital

transition, will deliver innovation in keeping with the digital

ecosystem, and will guarantee a continuous customer

experience for all La Poste’s services while developing new

businesses, including as a trusted third-party in digital

exchanges.

This means that the Group is involved in and committed to

changing its business model, and to meet the challenge

of the contraction in mail volumes and post office traffic,

with the objective of ensuring the long-term and sustainable

growth of each of its Business Lines.


13Profit forecasts or estimates


Profit forecasts or estimates 13

None.


14

14.1 Board of Directors 182

14.2 Executive Management 189

14.3 Absence of family ties, convictions and conflicts of interest 193

Administrative, management

and supervisory bodies and Executive

Management


Administrative, management and supervisory bodies and Executive ManagementBoard of Directors14

14.1 Board of Directors

14.1.1 Composition of the Board of Directors

Le Groupe La Poste’s Board of Directors comprises

21 members, in accordance with Act 90-568 of 2 July 1990

as amended, which relates to the organization of Le Groupe

La Poste and France Télécom’s public services, with Decree

No.2010-191 dated 26 February 2010 as amended, which

sets out Le Groupe La Poste’s initial articles of association

and includes various provisions relating to Le Groupe

La Poste, and with Article 13 of the Company’s articles of

association made up of 21 members.

The Board is composed of:

12 Board members appointed by the General Meeting:

on the recommendation of the French government and

the Caisse des Dépôts et Consignations, Philippe Wahl (1);

on the recommendation of the French government,

Éric Delzant (2), Laurence Franceschini, Jean-Michel

Hubert, Philippe Lemoine, Françoise Malrieu, Sophie

Mantel (3), Christian Martin, Antoine Saintoyant (4);

on the recommendation of the Caisse des Dépôts et

Consignations, Caisse des Dépôts et Consignations

represented by Jean-Pierre Jouyet, Odile Renaud-

Basso (5) and Franck Silvent (6);

two Directors appointed by decree: Mr Jacques

Pélissard, representing regional authorities, and Ms

Élyane Zarine, representing users;

seven staff-elected directors: Mr Régis Blanchot,

Ms Florence Derouard, Mr Bernard Dupin, Ms Sylvie

Feola, Mr Michel Lersy, Mr Marie-Pierre Liboutet and

Mr Michel Pesnel.

The term of office for members of the Board of Directors

is five years and is aligned to the end of the term of office

of the employee-elected members. Consequently, the

terms of office of the above-mentioned Board members

will expire on 20 December 2015. Should a member of the

Board of Directors leave his or her position for any reason,

a replacement will sit only for the duration of the remaining

term of office, until the entire Board is renewed.

The government representative and the head of the

French government economic and financial control unit

at Le Groupe La Poste also attend Board of Directors'

meetings in a non-voting capacity.

The Board of Director’s remit, procedures and work in 2013

are described in Chapter 16.

14.1.2 Profiles of the members of the Board of Directors

Directors’ biographies and terms of office

As required by Article L. 225-102-1 of the French

Commercial Code, a list of positions held by directors in

any company appears below. This information is correct to

the best of the Company’s knowledge.

Régis Blanchot has been a member of the Board of

Directors of La Poste since 1 January 2009. He was born

in 1967, and began his career at La Poste as a Controller

at the Paris financial centre in May 1987. He has been the

team leader at this centre since 1995. He was a full-time

employee of SUD-PTT with the status of Federal Secretary

(1) Philippe Wahl was appointed via co-optation by the Board of Directors on 1 August 2013, replacing Guillaume Gaubert. The General Meeting on 15 October

2013 ratified his appointment.

(2) Éric Delzant was appointed via co-optation by the Board of Directors on 26 September 2013, replacing Emmanuel Berthier. The General Meeting on

15 October 2013 ratified his appointment.

(3) Sophie Mantel was appointed via co-optation by the Board of Directors on 26 September 2013, replacing Jean-Paul Bailly. The General Meeting on

15 October 2013 ratified her appointment.

(4) Antoine Saintoyant was appointed via co-optation by the Board of Directors on 22 April 2013, replacing Olivier Bourges. The General Meeting on 18 June

2013 ratified his appointment.

(5) Odile Renaud-Basso was appointed via co-optation by the Board of Directors on 12 December 2013, replacing Loraine Donnedieu de Vabres-Tranié.

(6) Franck Silvent was appointed via co-optation by the Board of Directors on 22 April 2013, replacing Sabine Schimel. The General Meeting on 18 June 2013

ratified his appointment.


Administrative, management and supervisory bodies and Executive Management

Board of Directors 14

from 1999 to 2008. He re-assumed his position as team

leader in September 2008.

Current term of office

• Director of Le Groupe La Poste

Éric Delzant has been a member of the La Poste Board of

Directors since 26 September 2013. Born in 1957, he is a

graduate of Sciences-Po and a former student of ENA (1986-

88, Michel Montaigne Class). Éric Delzant’s career path has

included alternating positions within central government

(Secretary-General of the French government, Ministry of

Finance, and in particular, at the Ministry of the Interior,

where he was an Advisor to the Minister's Office between

2000 and 2001). He has held regional responsibilities within

local authorities (Advisor to the Chairman of the General

Council, then Managing Director of services for the Pas-

de-Calais Region from 2004-2009, and Managing Director

of the Bordeaux Urban District from 2009 to 2012), and

principally within prefectural authorities. He was specifically

Sub-Prefect of Saint-Girons (Ariège), and Provins (Seine-

et-Marne) and Prefect of Haute-Corse (from 2001 to 2003),

then of Ariège (from 2003 to 2004), and more recently, of the

Auvergne Region (2012 to 2013). Since 12 August 2013, Éric

Delzant has been the inter-ministerial delegate for regional

planning and regional attractiveness. He is also in charge of

the State Territory Equality Commission (CGET).



Florence Derouard was elected by the employees on

16 November 2010 from a list sponsored by the SUD-PTT

trade union. She was born in 1963, and holds a bachelor's

degree in law. She joined the PTT in Paris as a Controller

in 1987. After a period in sorting, she worked behind the

counter (as well as at the till and in accounting). In 2000,

she was transferred to the Payroll Department in Rouen,

working on staff pay and family allowances, before moving

to Centre interdépartemental de gestion administrative de

paie (the inter-departmental centre for administrative

management and pay).



Bernard Dupin was elected by the employees on

16 November 2010 from a list sponsored by the CGT trade

union. He was born in 1951. After studying law, he left the

country in 1976 to teach at the Collège Français in Montréal.

In 1982, he was a PTT inspector at the main tax receipts

office at Paris Louvre, then at the Financial Services

Department in Paris and, in 1990, Montpellier Rondelet.

Working as a trade unionist, he became Secretary-General

of the CGT labour union's departmental union for postal

and telecom business in Hérault, then member of the

Federal Bureau for international business until 2011. He

was elected to the European Post and Logistics segment

of the UNI Global Union International Federation and

member of the Management Committee for the executive

segment, which includes 157 trade unions representing

2.5 million employees around the world and is a member

of its Management Committee. Bernard Dupin, now a senior

executive at La Poste, is a member of the regional Economic

and Social Council of Languedoc-Roussillon.



Sylvie Féola, who was elected by the employees on


union, was born in 1961. After beginning her career at

La Poste as a seasonal employee in 1980, she has since

spent her entire career at the financial centre in Marseilles.

Member of the comité technique paritaire (Joint Technical

Committee) of this centre from 1997 to 2010, she was

elected secretary of the CGT labour union's Bouches-

du-Rhône departmental union of finance workers 13 in

1995, then General Secretary from 1997 to 2010. She

represented the CGT on Committees of various social action

organizations (Assogeva PACA from 1996 to 2000, CTPC

PACA from 2000 to 2007, the Board of the La Couronne

holiday centre from 2006 to 2009), federal manager and

leader of the financial services collective of the CGT 13

federation since 2004. She was an elected representative at

the CGT 13 labour union Bouches-du-Rhône departmental

union office from 2002 to 2008, before sitting on its Executive

Committee until 2010.



Laurence Franceschini has been a member of the La Poste

Board of Directors since 24 June 2009. She was born in

1957, and is a graduate of the Institut d’Études Politiques

de Paris and a former student of the École Nationale

d’Administration. An unranked civil administrator, she

worked as Head of Legal Affairs on the Conseil supérieur de

l’audiovisuel (CSA), then Assistant Manager of audiovisual

communications at the IT and Communications Legal

Department. In April 2004, she was appointed Deputy

Director at the office of the Ministry of Culture and

Communications. From January 2007 to January 2010,

she worked as Head of Media Development at the Prime

Minister’s office and was then appointed Managing Director

of media and cultural industries at the Ministry of Culture

and Communications.

Current terms of office


• Director of France Télévisions

• Director of Radio France

• Director of Foreign Audiovisual



Director of Agence France-Presse

Director of the Cinema and Cultural Industry Financing

Institute (IFCIC)

Director of the National Library of France

Director of the Arte France TV Channel

Board member of the National Centre of Cinema (CNC)

Board member of the National Centre of Books

Director of the Bibliothèque publique d’information

Jean-Michel Hubert has been a member of the La Poste

Board of Directors since 20 March 2003. He was born in

1939, and is a former student of the École Polytechnique

and École Nationale Supérieure des Télécommunications.

The first years of his career were spent at the national

telecommunications studies centre (CNET), then DINFO.

He later worked for nearly 10 years as Head of Technical

Services, then Head of Financial, real estate and Social

Affairs at the Ministry of the Interior. In September 1986,

he rejoined the City of Paris where he became Secretary-

General in 1992. In January 1997, he was appointed

Chairman of the Telecom Regulatory Authority (ART) for a

six-year term of office. He was subsequently Vice Chairman

of the Conseil général des technologies de l’information (CGTI)

as well as Deputy Ambassador for the World Summit on the

Information Society. From 2003 to 2007, he was Chairman/

delegate of the Conseil stratégique des technologies

de l’information (Strategic Committee for Information

Technologies) (CSTI). From 2006 to February 2013, he

was, alongside the Prime Minister, Deputy Chairman of

the Strategic Committee for Digital Issues (CSN), and he

was also a member of the Supervisory Board of the future

capital expenditure program.


Director of Le Groupe La Poste

Jean-Pierre Jouyet has been a member of the Board of

Directors since 19 July 2012. He was born in 1954, and

holds a post-graduate research diploma (DEA) in public

law. He is also a graduate of the Institut d'Études Politiques

de Paris (IEP) and a former student of the École Nationale

d'Administration (ENA). Appointed as General inspectorate

of Finance upon leaving ENA, he then was Head of the

Tax Legislation Office in the French Ministry of Finance.

From 1988 to 1991, he was the director at the office of

the Ministry of Industry and Regional Planning. In 1991,

he became Deputy Head of the Office of the President of

the European Commission, then Head of the Office from

1994 to 1995. From 1995-1997, he was a partner at the law

firm Jeantet Associés then he was Deputy Director of the

Office of the Prime Minister from 1997 to 2000. He then

held the position of Director of the Treasury, then became

ambassador in charge of international economic affairs in

2004. Briefly Chairman of Barclays France in 2005, he was

then appointed as the Department Head of the General

inspectorate of Finances, a position he held until 2007.

In May 2007, he became Secretary of State in charge of

European affairs with the Minister of Foreign and European

Affairs. At the end of 2008, he took the helm of the Autorité

des marchés financiers (French Financial Markets Authority).

On 19 July 2012, he was appointed as Managing Director of

Caisse des Dépôts et Consignations.


Managing Director of Caisse des Dépôts et Consignations


Chairman of the Management Board of the Fonds de

Réserve pour les Retraites

Chairman of the Board of Directors of BPI

Director of Institut Pasteur

Board member of CNP-Assurances

Philippe Lemoine has been a member of the La Poste

Board of Directors since 26 June 2009, after serving as

a Board Member of La Poste from 2004 to 2007. He was

born in 1949, and is a graduate of IEP Paris; he holds a

degree in law, and successfully passed the French civil law

open examinations; he also holds a postgraduate degree in

economics. He started his career as a researcher. Whilst

he was an engineer at the National Institute for Research

in Computer Science and Control (INRIA), he also studied

sociology at the School for Advanced Studies in the Social

Sciences (EHESS). In 1976, he was called to the Ministry for

Industry to assume responsibility for the “Computerization

of Society” project and helped draw up the Nora-Minc

report. He subsequently joined the office of Norbert Segard

and then Pierre Aigrain (Technology and Society report).

In 1981, he was appointed government representative at

CNIL (1982-1984); in 1982, he took over the “Technology,

Employment, Work” program, becoming Vice Chairman of

the national Committee at the Ministry for Research. At the

end of 1984, he joined the Galeries Lafayette group. In 1998,

he was named Co-Chairman of the Group’s Management

Board (1998-2005). From 1999 to 2009, he sat as a member

with qualified status on the Board of CNIL. Since 1995, he

has been Chairman and Chief Executive Officer of the LaSer

group, a European intermediation and customer relations

company that includes loans in its business model. Philippe

Lemoine chairs the Board of Directors of the Collège de

France Foundation, the Maison des sciences de l’homme

Foundation and the Franco-American Foundation. He is

also Chairman of the “Open Innovation Committee” working

group at Medef, Fondation Internet Nouvelle Génération




(FING), Chairman-Founder of the Forum d’Action Modernités

(FAM) and co-chairman of the Supervisory Board of GS1

France.


Chairman and Chief Executive Officer of LaSer

Director of Unincofra

Chairman of the Board of Directors of LaSer Cofinoga

Chairman of the Board of Directors of Sygma Bank


Chairman of GMGL

Vice-president of the BHV Comité de surveillance

Sole director of GIE Recherche Haussmann

Sole Board member of GIE LaSer Archives

Chairman of the Fondation LaSer Initiatives Solidaires

Chairman of the Open Innovation Committee of Medef

Chairman of the FING Foundation

Board member of the Collège de France Foundation

Board member of the Maison des sciences de l’homme

Foundation

Board member of the Franco-American Foundation

Chairman of the Forum d’Action Modernités Foundation

Co-chairman of the Supervisory Board of GS1 France

Terms of office expired in the last five years

Director of Monoprix

Permanent representative of LaSer Cofinoga on the

Board of Directors of Fidecom

Co-Chairman of the Management Board of the Galeries

Lafayette group

Chairman of the Association Réseau Échangeur


Board of Directors of Médiatis

Director of Telemarket

Director of BNP Paribas Personal Finance

Non-voting director of GDF-Suez

Director of établissement public de coopération culturelle

Le 104 (cultural cooperation public sector company)

Michel Lersy was elected by the employees on


union. He was born in 1961. After working at La Poste

as a seasonal employee, he passed a competitive postal

workers' examination, and was posted to the Paris Gare du

Nord sorting centre in 1982. Three months later, he passed

the AEX-SG exam, and was appointed as a postman on the

Ambulants de l’Est line, before returning to Paris Nord in

September 1983. He joined the Metz sorting centre in 1985,

before being assigned to the industrial mail platform in

Lorraine. He is now a level-one technical and management

staff member. An activist in the CGT since 1982, he was

secretary of the union section of the Metz sorting centre

from 1987 to 1990, elected Secretary General of the CGT-

PTT Departmental Union of Moselle in 1994, then Regional

Secretary of Lorraine in 2001; a position he held until 2010.

He was also a member of the Federal Department from

2001 to 2004, then from 2008 to 2010, and a Board member

then Chairman (1992-1994) of a government restaurant in

Metz and FNR Regional Delegate from 1993 to 1997. Elected

to the Executive Commission of the CGT labour union's

Departmental Union for Moselle until 2010, he served as

Secretary there from 2004 to 2008.



Marie-Pierre Liboutet has been a member of the La Poste

Board of Directors since 9 May 2001. She was born in

1956 and holds a bachelor's degree in English; she joined

La Poste as an inspector in 1979. She was a sales manager

in Vesoul until 1984, and was transferred to Haute-Vienne in

1985. Within the CFDT Post Office and Telecommunications

Federation, she was National Secretary for La Poste

and the public sector from 1990 to 1994 and served as

Secretary General from 1994 to 2001. She represented

the Federation at the National Confederation Office from

1995 to 2001. At that time, she rejoined La Poste as Head

of Communications for Haute-Vienne. In 2008, she became

Head of Communications for the Local Operational Mail

Department of Limousin.



Françoise Malrieu has been a member of the La Poste

Board of Directors since 17 December 2005. She was

born in 1946, and is a graduate of HEC and the Financial

Analysis Training Centre (CFAF); Françoise began her

career at BNP in 1969, where she worked as a financial

analyst. Vice President (1974) responsible for monitoring

equity investments in the BNP group’s corporate banking

arm, Banexi, she was appointed Assistant Manager of

the Financial Analysis Department in 1979, heading this

Department in 1982. At the same time, she was elected

General Secretary then Vice President of the Société

française des analystes financiers (SFAF). She continued

her career in mergers & acquisitions at Lazard Frères

(1987-2001), where she was appointed as a Board member,

Manager, and then Managing Partner in charge of the

Mergers & Acquisitions team, before joining Deutsche Bank

(2001-2003) as a Managing Director in Paris and London,

as Head of the Corporate Finance Team for France and a

consultant banker, before moving to Aforge Finance where

she was a Managing Partner until 2009. She was appointed

as a Board member (2008) and then Chairperson of the

Board of Directors (2010) of the Société de Financement



de l’Économie Française (SFEF). During 2010, she was the

deputy inspector of market professionals’ remuneration.

Since May 2013, she has been a member of the Board of

Directors of the Institut Français des Administrateurs (IFA).



Chairperson of Société de Financement de l’Économie

Française Board of Directors

Director of Aéroports de Paris

Director of GDF-Suez

Member of the Supervisory Board of Bayard Presse SA


Managing partner of Aforge Finance

Deputy inspector of market professionals’ remuneration

Sophie Mantel has been a member of the La Poste Board of

Directors since 26 September 2013. She was born in 1965,

and is a graduate of the École Polytechnique (1987) and the

ENSAE (École Nationale de la Statistique et de l'Administration

Économique—1989); Sophie is the Controller-General

of Economics and Finance. She began her career in the

Forecasting Department (1989-1992), before joining the

Budget Department where she managed the 6C offices

(pension plans, pension funds, etc.), then 2A offices (wage

policy and public sector employment, etc.). She was Special

advisor to the Budget Director in 1999, then in 2001, she

joined the organic law project team and was responsible

for the implementation of organic law pertaining to finance

law (LOLF) in terms of staff expenditure. In 2006, Sophie

Mantel became the Head of the Management Systems

Processes and Functionalities Department in the DGME

(State Modernization Executive Management before joining

the Budgetary Audit and Internal Control Mission (MACIB)

where she took over management in 2011. Since August

2013, she has been Head of the Department, assistant to

the Director of Budget.



Director of La Française des Jeux

Board member of PMU

Director of Institut Pasteur

Christian Martin has been a member of the Board of

Directors of La Poste since 24 January 2013. He was born in

1955, and is a graduate of the Institut d’Études Politiques de

Paris, holds an engineering degree from the École Nationale

des Ponts et Chaussées, and is a former student of the ENA.

Auditor at Cour des comptes / French Court of Auditors

(1987-1991), from 1991-1992 he was deputy director of the

Office of the Ministry of Agriculture, then Board member of

the Office of the Ministry in charge of Parliament Relations,

government spokesperson (1992-1993). Referendum

Advisor (1991-2004), he was Mayor of Draguignan (Var) from

1995 to 2001, Regional Advisor and Deputy Vice-Chairman

of Culture for the Provence-Alpes-Côte d’Azur region from

1998 to 2010, and Chairman of société d’économie mixte for

the Provence-Alpes-Côte d’Azur region from 1998 to 2004.

He has been Chief-Advisor at the Cour des comptes / French

Court of Auditors since 2004 in the 4th Chamber, responsible

for the "public safety" segment.



Jacques Pélissard has been a member of the La Poste

Board of Directors since 17 December 2005. He was born

in 1946, is a former student of the Lyon Law School, and

a graduate of the Institut d’Études Politiques de Paris

(1970); he was awarded a bachelor of arts degree from

the University of Lyon in 1971. From 1971 to 1974, he was

a professor of economic law at the École supérieure de

commerce de Lyon, and then a lawyer in Lyon, and in Lons-

le-Saunier until July 1993. He has been the Mayor of Lons-

le-Saunier (in the Jura Prefecture) since 1989. He has been

Chairman of the communauté d’agglomération (Conurbation

authority) of the Lons-le-Saunier basin since 2000. He has

been a Deputy of Jura (member of the Finance Commission

of the National Assembly) since 1993. Since 18 November

2004, Jacques Pélissard has been the Chairman of the

French Mayors Association. He is also a member of the

Local Finance Committee.



Michel Pesnel was elected by the employees on

16 November 2010 from a list sponsored by the FO trade

union. He was born in 1952. After studying Philosophy,

he passed the examination to become a Post Office and

Telecoms (PTT) inspector in 1979. He went on to work at

the Institut national de gestion d’Évry, the Basse-Normandie

Regional Department of La Poste, and the École Nationale

Supérieure des Postes et des Télécommunications (ENSPTT)

as Head of Continuing Education. He holds a master’s

degree in defense and was a former auditor at IHEDN.

He is also a defense advisor to the Prefecture of Basse-

Normandie. A member of the Executive Committee of

FO Communication since 1990, he became National

Secretary in 1993, then Deputy General Secretary. He has

sat on the Conseil supérieur de la fonction publique d’État

and Supervisory Board of Le Groupe La Poste’s employee

savings program.



Odile Renaud-Basso has been a member of the Board of

Directors of La Poste since 12 December 2013. She was

born in 1965, and is a graduate of the Institut d’Études




Politiques de Paris and a former student of the ENA (Jean

Monnet Class). After beginning her career as an auditor

at the Cour des comptes / French Court of Auditors (1990-

94), she joined the Department of Treasury where she held

positions pertaining to international, industrial and financial

issues. In 2005, she was appointed Director of the European

Commission (Directorate general for economic and financial

affairs) and continued her career in the European spheres.

In early 2010, she became Assistant Head of the office of the

President of the European Council, Herman van Rompuy.

In May 2012, she became Deputy Director of the office of

the Prime Minister, Jean-Marc Ayrault. Since 1 September

2013, she has been Deputy Managing Director of the Caisse

des Dépôts Group and Director of Savings funds.




Antoine Saintoyant has been a member of the La Poste

Board of Directors since 22 April 2013. He was born in 1977

and is a graduate of the Institut d’Études Politiques de Paris;

Antoine was appointed as business advisor in 2003 upon

graduating from ENA (René Cassin class). He was Deputy

Head of Multifin 4 (international financial system) in the

French Treasury and Economic Policy Department in Bercy

(2003-2007), and then acted as an advisor (financial and

institutional services, banks, stock market, and insurance)

for Financial and Monetary Affairs at the Permanent

Representation of France at the European Union in Brussels

(2007-2009). While he was Head of banks and credit

institutions at the French General Treasury and Economic

Policy Directorate, which became the French Treasury (in

March 2010) between 2009 and 2012, he was also Deputy

Secretary-General of the French Financial Legislation

and Regulation Advisory Council. Since July 2012, Antoine

Saintoyant has been Head of the C1 office (La Poste and

Orange) of the Agence des Participations de l'État (APE) at

the Ministry of the Economy and Finance, before being

named Director of equity investments, Deputy-Director of

Aviation and Defense in August 2013.



Board member of Orange

Board member of Société de Financement Local (SFIL)

Board member of ODAS


Board member of SPPE

Franck Silvent has been a member of the Board of Directors

of La Poste since 22 April 2013. He was born in 1972, and

is a graduate of Institut d’Études Politiques de Paris; Frank

joined the General Inspectorate of Finance in 1998 upon his

graduation from ENA (Valmy class). He was seconded as

Deputy Director of strategy, finance, management control

and accounting at Caisse des Dépôts et Consignations

(2002-2005). Director of financial development strategy

and member of the Management Board (2005-2009), then

Deputy Chief Executive of Compagnie des Alpes (March-

October 2009), he was then Associate Managing Director of

this group (2009-2012). Since January 2013, Franck Silvent

has been director of strategy, sustainable development

and research for Caisse des Dépôts. In May 2013, he was

appointed director of the finance, strategy, subsidiaries and

international division of the Caisse des Dépôts Group. In

October 2013, he became director of the finance, strategy

and equity investments division of the Caisse des Dépôts

Group.



Board member of BPI France Participations

Board member of BPI France Investissements

Board member of BPI Groupe

Board member of CNP Assurances

Director of Icade

Board member of Transdev Group


Board member of Santoline

Board member of Compagnie du Mont Blanc

Board member of Lafuma

Board member of Société du Parc du Futuroscope

Associate Managing Director of La Compagnie des Alpes

Chairman of the Supervisory Board of La Compagnie des

Alpes—Domaines Skiables

Vice-Chairman of the Supervisory Board of Domaine

Skiable de Griffe


Skiable de Flaine

Member of the Supervisory Board of Looping Holding

Board member of Premier Financial Services

Board member of Swissalp

Board member of Belpark

Board member of Grévin et Compagnie

Board member of Musee Grévin

Board member of Safari Africain de Port-Saint-Père

Board member of Valbus

Philippe Wahl has been a member of the La Poste Board

of Directors since 1 August 2013. He was born in 1956,

and is a graduate of Sciences-Po Paris, a former student

of the ENA, and holds a Postgraduate Research Degree in

Economics. He began his career as an auditor and maître

des requêtes (Master of Requests) at the French Council



of State. Special advisor to the Chairman of the COB

(1986), in 1989 he joined the office of Michel Rocard, prime

minister, as technical advisor for economic, financial and

tax affairs. Advisor to the Chairman of Compagnie Bancaire

(1991), then Deputy Chief Executive (1994), in 1997 he was

appointed Head of Specialist Financial Services at Paribas.

In 1999, he became Managing Director of Caisse Nationale

des Caisses d’Épargne. Through this, he became Chairman

of Sopassure and of the Board of Directors of Écureuil

Assurances IARD, and a member of the Supervisory Boards

of CDC Ixis and CNP Assurances. Philippe was appointed

Managing Director of the Havas Group in 2005, and became

Vice-Chairman of the Bolloré Group in 2006. After joining

the Royal Bank of Scotland as Managing Director for France

in 2007, he was appointed as an advisor to the Global

Banking and Markets Board in London and Managing

Director for France, Belgium and Luxembourg in 2008,

before being appointed Chairman of the Management Board

of La Banque Postale and Group Deputy Chief Executive

Officer of Le Groupe La Poste in January 2011. Philippe

Wahl became CEO of Le Groupe La Poste in September

2013, and became Chairman of the Supervisory Board of

La Banque Postale in October of that year.



Chairman of the Supervisory Board of La Banque Postale

Permanent representative of Le Groupe La Poste and

Director of GeoPost, Sofipost and Poste Immo

Director of Sopassure

Director of CNP Assurances


Chairman of the Management Board of La Banque

Postale

Director of Société de Financement Local (SFIL)

Chairman of the Supervisory Committees of La Banque

Postale Financement, XAnge Private Equity, La Banque

Postale Gestion Privée and La Banque Postale Asset

Management

Chairman of the Board of Directors of La Banque Postale

Assurance Santé, La Banque Postale Prévoyance and

La Banque Postale Assurances IARD

Chairman and Chief Executive Officer of SF2 and

Sopassure

Member of the Supervisory Board of Fonds de Garantie

des Dépôts

Managing Director of Royal Bank of Scotland PLC

Vice-Chairman of the Supervisory Board of Société

Financière de Paiements

Élyane Zarine has been a member of the Board of Directors

of La Poste since 17 December 2005. She was born in 1941.

After working in different administrative positions in film

and credit sales from the age of 20, she joined Air France

in 1968, where she worked as a salesperson, manager,

training officer, coordinator, and Head of Recruitment at

the Charles-de-Gaulle HR Department for 30 years. In

1998, following a company audit at the Centre of Obstetric

Surgery in Hauts-de-Seine, she took over the running of this

clinic. From 2000 to 2003, she was Head of Administration

and Human Resources at a medical analysis laboratory.

From 2003 to 2011, she sat on the Boards of Directors

of several social housing companies and has been the

Chairperson of housing committees. Chairperson of

the Organisation générale des consommateurs (General

Consumer Organization—Orgeco) from 2008 to 23 May

2012, she was chairperson of OR.GE.CO Paris. In October

2010, Minister Hervé Novelli appointed her as chairperson

of the Commission de la médiation de la consommation

(Commission of Consumption Mediation—CMC) and Board

member of Credoc.



Chairperson of CMC

Chairperson of Orgeco Paris

Director of the Institut national de la consommation

Director of Credoc

Director of CISS, CNC and CEC


SADIF

ASH, ASH GIE

Orgeco



Executive Management 14

14.2 Executive Management

14.2.1 Combined offices of Chairman of the Board of Directors and Chief Executive Officer

Company management is the responsibility of the Chairman

of the Board of Directors, who acts as Chief Executive

Officer in accordance with Article 14 of the Company’s

articles of association.

He is appointed from among the directors by decree,

following a proposal by the Board of Directors.

Mr Phi l ippe Wahl was appointed Chairman and

Chief Executive Officer of La Poste by a decree dated

26 September 2013, following the Board of Directors’

proposal to the President of France.

14.2.2 Remit of the Chairman and Chief Executive Officer

The Chairman and Chief Executive Officer organizes and

coordinates the work of the Board of Directors and reports

to the General Meeting on that work. He oversees the

proper functioning of the Company’s corporate bodies and,

in particular, ensures that directors are in a position to fulfil

their duties.

The Chairman and Chief Executive Officer is fully

empowered to act in all circumstances on the Company’s

behalf, within the corporate purpose and subject to the

powers of the General Meeting and those reserved for the

Board of Directors by law, Le Groupe La Poste’s articles of

association, as well as the Board’s by-laws as adopted on

10 February 2011.

Accordingly, he must obtain prior approval from the Board

of Directors for:

a) any transaction (including any material change

thereto) involving acquisitions, equity investments,

asset disposals (including financial, excluding day-to-

day treasury management), capital restructuring (in

particular mergers, spin-offs or asset transfers, with the

exception of Le Groupe La Poste internal transactions)

for a unit amount of over €30 million, this threshold

including, as the case may be, the price, the net debt of

the target, the amount of any purchase or subscription

guarantee made by La Poste and any off-balance sheet

commitments given;

b) any transaction (including any material change thereto)

involving a business combination, disposal or issue of

equity securities or financial instruments convertible

to share capital carried out by La Poste (or to which

La Poste is party), for a unit amount of over €30 million,

this threshold including, as the case may be, the price,

the net debt of the target, the amount of any purchase

or subscription guarantee made by La Poste and any

off-balance sheet commitments given; any strategic

partnership with average annual revenue over the time

frame of its business plan of more than €30 million

(including the renewal of any partnership);

c) any capital expenditure or divestment transaction

(including any material change thereto) not covered

by item b) above, carried out by La Poste (or to which

La Poste is party) for a unit amount of over €200 million,

this threshold including, as the case may be, any given

off-balance sheet commitments;

d) any transaction (including any material change thereto)

involving debt, cash or hedging management (excluding

day-to-day management) carried out by La Poste for a

unit amount of over €700 million per transaction;

e) any transaction (including any material change thereto)

involving the securitization of financial or commercial

assets carried out by La Poste for a unit amount of over

€100 million per transaction;

f) any new direction for La Poste’s business activities or

a change in its purpose, or any material transaction

reflecting a new direction for the business or a strategic

refocusing of La Poste;

g) any decision to bring legal (including arbitration),

regulatory or administrative proceedings by La Poste

or to enter into a settlement agreement or arbitration

agreement with respect to legal, regulatory or

administrative proceedings to which La Poste is party,

for a unit amount of over €50 million, it being added that

where a number of such actions are based on the same

or a related event, this threshold is assessed based on

all relevant actions;


Administrative, management and supervisory bodies and Executive ManagementExecutive Management14

h) any decision to carry out a public offering of financial

instruments issued by La Poste outside programs that

were already authorized as part of the budget approval

by the Board of Directors;

i) any material change or planned material change to

Le Groupe La Poste's accounting practices.

In addition, the Chairman and Chief Executive Officer is

expressly authorized to provide bonds, guarantees and

endorsements binding Le Groupe La Poste up to an overall

annual limit excluding tax set by the Board of Directors, and

a maximum unit amount before VAT of €75 million.

The Chairman and Chief Executive Officer is authorized to

delegate these powers.

14.2.3 Executive Committee

The Executive Committee is the body for discussing strategy,

consulting on all cross-entity Group issues, considering

important decisions and monitoring targets and operating

profit/(loss). It meets every Monday under the chairmanship

of the Chairman and Chief Executive Officer.

Executive Committee members are appointed by the

Chairman and Chief Executive Officer. In accordance

with the by-laws of Le Groupe La Poste’s Remuneration

and Governance Committee (Article 1.2), the Chairman

and Chief Executive Officer informs the Remuneration

Committee of the appointment, remuneration and planned

replacement of the executives of Le Groupe La Poste and its

main subsidiaries. Where appropriate, the Committee may

pass its observations on to the Board of Directors.

Membership of the Executive Committee is as follows:

Philippe Wahl Chairman and Chief Executive Officer

Georges Lefebvre Executive Officer

Nathalie Andrieux Deputy Chief Executive Officer in charge of digital technology

Chairperson of Mediapost

Philippe Bajou Deputy Chief Executive Officer

Managing Director of La Poste Retail Brand

Paul-Marie Chavanne Deputy Chief Executive Officer

Director of Parcels

Chairman of GeoPost

Marc-André Feffer Deputy Chief Executive Officer in charge of strategy, innovation, international

development, regulations, legal affairs and real Estate

Chairman of Poste Immo

Sylvie François Deputy Chief Executive Officer

Director of Human Resources and Employee Relations

Xavier Girre Deputy Chief Executive Officer

Chief financial officer

Nicolas Routier Deputy Chief Executive Officer

Managing Director of Mail

Chairman of Sofipost

Jacques Savatier Deputy Chief Executive Officer responsible for regional development and the

corporate governance bodies

Director of regional affairs and of the public service

Rémy Weber Deputy Chief Executive Officer

Chairman of the Management Board of La Banque Postale



Executive Management 14

Philippe Wahl. Born in 1956, he is a graduate of Sciences-

Po Paris, a former student at the ENA, and holds a DEA

in economic science. He began his career as an auditor

and maître des requêtes (Master of Requests) at the French

Council of State. Special advisor to the Chairman of the COB

(1986), in 1989 he joined the office of Michel Rocard, Prime

Minister, as technical advisor for economic, financial and

tax affairs. Advisor to the Chairman of Compagnie Bancaire

(1991), then Deputy Chief Executive Officer (1994), in 1997

he was appointed Head of Specialist Financial Services

at Paribas. In 1999, he became Managing Director of

Caisse Nationale des Caisses d’Épargne. Through this,

he became Chairman of Sopassure and of the Board of

Directors of Écureuil Assurances IARD, and a member of

the Supervisory Boards of CDC Ixis and CNP Assurances.

He was appointed Managing Director of the Havas Group in

2005, and became Vice-Chairman of the Bolloré Group in

2006. After joining the Royal Bank of Scotland as Managing

Director for France in 2007, he was appointed as an Advisor

to the Global Banking and Markets Board in London and

Managing Director for France, Belgium and Luxembourg in

2008, before being appointed Chairman of the Management

Board of La Banque Postale and Group Deputy Chief

Executive Officer of Le Groupe La Poste in January 2011.

Philippe Wahl became CEO of Le Groupe La Poste in

September 2013, and became Chairman of the Supervisory

Board of La Banque Postale in October of that year.

Georges Lefebvre. Born in 1952, Georges Lefebvre holds a

degree in mathematics and is a graduate of ENSPTT (École

nationale supérieure des postes et des télécommunications).

He joined the P.T.T. in 1970 and became Head of Personnel

at the Le Groupe La Poste du Nord regional division

(1981-1983). He then served as Director of the Office of

the Regional Director of La Poste du Nord-Pas-de-Calais

(1983-1986), Departmental Director for Marne (1987-1990)

responsible for handling relations with senior executives

of Le Groupe La Poste on behalf of the Managing Director

(1990-1994), and Director of Human Resources at La Poste

Greater Paris regional delegation (1994-1997). In 1997, he

joined the office of Christian Pierret, Secretary of State

for Industry, as a technical advisor for social security, post

offices and telecommunications, before becoming Director

of Human Resources (1998-2001), Deputy Chief Executive

Officer (2001-2002) then Managing Director (2002-2010) of

Le Groupe La Poste. Since Le Groupe La Poste’s change

of status, he has been an executive officer and Director of

Human Resources and Labour Relations for La Poste S.A.

Since September 2012, he has been an executive officer of

the Group, in charge of cross-entities policies and Group

cohesion.

Nathalie Andrieux. Born in 1965, she holds an engineering

degree from the école supérieure d’informatique Supinfo.

Nathalie Andrieux began her career in the Banques

Populaires Group where she was entrusted with

information systems development projects. In 1997, she

joined Le Groupe La Poste as Head of Information Systems

Management. In late 2001, she took charge of marketing

strategy in the Strategy Department, and in 2003, she was

appointed director of DIDES (Department of Innovation

and E-Services). In 2004, she became Managing Director

of Mediapost and Chairperson as at 2009. In September

2011, she created and took the helm of Mediapost

Communication. While she was Chairperson of Mediapost

Communication, in September 2012, Natalie Andrieux

became Deputy Chief Executive Officer of Le Groupe

La Poste, in charge of digital technology. On 18 January,

2013, she was appointed member of the Conseil national du

numérique (French National Digital Council).

Philippe Bajou. Born in 1958, he graduated from École

Nationale Supérieure des P.T.T. in 1989. He began his

career at Le Groupe La Poste in 1982. Special Advisor at

the Ministry of P.T.T. with the Director of Common Affairs

from 1989 to 1990, he then held various positions within

the Finance Department of La Poste, then was appointed

Director of Financial Affairs and Equity Investments at

La Poste in 1995. He was responsible for the CCP fund

management project in November 1998, which resulted

in the formation of Efiposte in March 2000, where he

became Managing Director. He became a member of the

Banque Postale Management Board on 1 January 2006, and

remained in that position until December 2012. Since then,

he has been the Group Deputy Chief Executive Officer, and

Managing Director of La Poste Retail Brand.

Paul-Marie Chavanne. Born in 1951, Paul-Marie Chavanne

is a graduate of the École centrale des arts et manufactures

de Paris, a former student of ENA and an Inspector of

Finance. After starting out at the General Inspectorate of

Finance (1978-1982) and then the Treasury Department

(1982-1989), he became Head of Strategy and Development

at Soparges (1989-1992), then Deputy Chief Executive Officer

of Automobiles Citroën (1992-1997), before joining Strafor

Facom as Managing Director (1997-1998) and subsequently

Chairman and Chief Executive Officer (1998). After chairing

the Management Board of Auto Distribution, he became

Head of Parcels (in 2001), Chairman of GeoPost (in 2001)

and at the same time Executive Officer (2002-2010) then

Deputy Chief Executive Officer (2010) of Le Groupe La Poste.

Marc-André Feffer. Born in 1949, he holds a master's

degree in public law, is a graduate of Sciences-Po Paris and

is a former student of the ENA. Marc-André Feffer has been

maître des requêtes at the Council of State, Secretary General

of the Electoral Council (1979-1981), advisor to the office of

Gaston Thorn, Chairman of the European Commission (1981-

1984), Managing Director of the Centre Mondial Informatique

(1984-1985), and Head of the Legal and IT Department at

the offices of the Prime Minister (1985-1988). He then

joined the Canal+ Group, working as Secretary General

(1988), Executive Officer (1994), Deputy Vice Chairman of the

Group (1995-2000), and Vice Chairman of the Management

Board and General Counsel (2001-2003). With Le Groupe

La Poste since 2004, he is responsible for strategy and

innovation, international development and legal, real estate

and regulatory affairs, and has been Vice Chairman of the


Administrative, management and supervisory bodies and Executive ManagementExecutive Management14

Supervisory Board since 2005 of Efiposte—now part of

La Banque Postale—Chairman of Poste Immo and XAnge

Capital, and Group Deputy Chief Executive Officer.

Sylvie François. Born in 1954, Sylvie François is a graduate

of Sciences-Po and holds a bachelor's degree in law and

a DEA in labour law. Upon her exit from the ENA, in 1980,

she was appointed office manager at the délégation à

l’Emploi (Delegation for Employment) within the Ministry

of Labour. Then she alternated positions in the Ministerial

office and positions of responsibility in the administration

until 1997: technical advisor to the Minister of Social Affairs

and Health in 1983, Director of the Office of Secretaries of

State for technical education from 1985 to 1986, and from

1988 to 1989, technical advisor in charge of public service

resurgence for the Prime Minister, and between 1989 and

1992, Deputy Director of training at the Ministry of Higher

Education and Research. In 1997, she joined the Crédit

Commercial de France as Director of Human Resources.

She held this position until February 2008, when she

became the Director of Human Resources and Financial

Services for La Banque Postale. In September 2012, she

was appointed Deputy Managing Director of Le Groupe

La Poste, Director of Human Resources and Employee

Relations.

Xavier Girre. Born in 1969, he is a graduate of HEC,

Sciences-Po Paris, holds a master's degree in Business

Law and is a former student of the ENA. He began his

career in 1995 as an auditor at Cour des comptes / French

Court of Auditors before being appointed as conseiller

référendaire (a magistrate responsible for verifying public

accounting) three years later. After joining Dalkia (Vivendi

Environnement) in 1999 as Special Advisor to the Chief

Executive Officer, he became Director of Audit at Vivendi

Environnement (renamed Veolia Environnement in 2003) in

2002, and became Chief Risk Officer, responsible for audits,

risk management and insurance, in 2004. He was appointed

Chief Financial Officer and Deputy Chief Executive Officer in

charge of finance, information systems, procurement and

risk management at Veolia Transport in 2007. He was Chief

Financial Officer of Veolia Propreté and Executive Director for

Central Europe of that division of Veolia Environnement Group

before being named Deputy Chief Executive Officer, Chief

Financial Officer of Le Groupe La Poste in November 2011.

Nicolas Routier. Born in 1963, he is a graduate of

Sciences-Po Paris, holds a bachelor's degree in Economics

from Paris-I Panthéon-Sorbonne, and is a graduate of

ENSPTT. Mr. Routier joined Le Groupe La Poste's Finance

Department as Head of strategic planning (1988-1991),

then Head of management control (1991-1994). From 1994

to 1997, he was director of La Poste de l’Oise. In 1997, he

joined La Poste's Management Committee and created

the Purchasing Department, which he managed until

2001. At the same time, he was director of management

control (1998-2001). In 2001, he became director of Group

strategy then joined the Group's Executive Committee. He

has since become a director of Sopassure, member of the

Supervisory Board of CNP (2001-2003) and a director of

GeoPost (since 2001). In 2002, he was appointed Executive

Officer responsible for Group strategy and development, and

Chairman of Sofipost. In 2004, he became an Advisor to the

Group Chairman and CEO of Mediapost until 2009. At the

same time, he was Chairman of STP from 2005 to 2009 and

of Neopress from 2007 to 2009. Since 2009, he has been a

Group Deputy Chief Executive Officer of Le Groupe La Poste,

Managing Director of Mail and Chairman of Sofipost.

Jacques Savatier Jacques was born in 1952, and hold an

Agricultural Engineering and Engineering Degrees from the

École des Ponts, des Eaux et des Forêts. He began his career

at the General Agronomy Inspectorate for the Central

France Region (1976-1978), and then at the Inspectorate

for the Poitou-Charentes Region (1978-1981). He was

appointed as a Special Advisor for Agriculture, Rural

development, the Environment and Education to the Prefect

of the Poitou-Charentes Region in 1981, before joining the

Poitou-Charentes Regional Council in 1982, initially as Head

of Rural Affairs, and then of Economic Affairs, Regional

Planning and the Environment. He was appointed as Special

Advisor to the Prefect of the Poitou-Charentes Region

in 1990, and was specifically responsible for a national

assignment on behalf of the DATAR (coastal development,

and application of the Act of 1986). Between 1992 and 1993,

he worked as the Regional Director for the Environment for

the Poitou-Charentes Region. He was Director of Tourism

at Futuroscope for the Vienne General Council between

1993 and 1997, and then became Secretary General for

Regional Affairs at the Central France Prefecture (SGAR)

in 1997. He was appointed as a Director and Advisor to the

Chairman and Chief Executive of La Poste in 2003, where he

was responsible for regional consultation and coverage. He

also became the Group's Managing Director of Sustainable

Development in 2008. He has been the Director of Regional

Affairs and the Public Service since 2010.

Rémy Weber. Born in 1957, he graduated from the Institut

d’Études Politiques (IEP) in Aix-en-Provence and from

the École des Hautes Études Commerciales (HEC). Rémy

Weber began his career in 1983 as chargé d'affaires in

the Operations Department of the Banque Française de

Commerce Extérieur (BFCE), before landing a position

as Special Advisor to the Ministry of Finance regarding

international business and the Department of Treasury

matters (1987-89). He then became assistant manager at

BFCE (1990-92), then joined Lyonnaise de Banque where

he was Regional Director in charge of the Lyon network

(1993-94), Secretary-General (1995-97), Director of

Operations (1996-97), Deputy Chief Executive Officer (1997-

99), Managing Director (1999-2002) and lastly Chairman

and Managing Director—a position which he held until

his appointment as Chairman of the La Banque Postale

Management Board on 15 October 2013.



Absence of family ties, convictions and conflicts of interest 14

14.3 Absence of family ties, convictions and conflicts

of interest

14.3.1 Absence of family ties between members of the administrative bodies and Executive Management

To the best of La Poste’s knowledge, there are no family ties between (i) the corporate officers of La Poste or (ii) the members

of the Executive Committee.

14.3.2 Absence of convictions for fraud handed down to the members of administrative bodies and Executive Management

To the best of La Poste’s knowledge, none of the

(i) corporate officers of La Poste or (ii) members of the

Executive Committee:

have been convicted of fraud in the last five years;

have been declared bankrupt, put into receivership or

undergone liquidation in the last five years;

have been subject to incrimination or official public

sanction delivered by statutory or regulatory authorities

in the last five years.

Furthermore, to the best of La Poste’s knowledge, none of

(i) the corporate officers of La Poste or (ii) the members of

the Executive Committee, have been barred from acting as

a member of an administrative, management or supervisory

body of an issuer or from managing or conducting the

business of an issuer in at least the last five years.

14.3.3 Conflicts of interest within the administrative bodies and Executive Management

To the best of La Poste’s knowledge, and on the date this

registration document was filed, there were no potential

conflicts of interest at La Poste between the duties of

the corporate officers and members of the Executive

Committee, and their private interests or other duties.

To the best of La Poste’s knowledge, there are no

arrangements or agreements between shareholders,

customers, suppliers or any other parties under which a

member of the Board of Directors has been appointed to

this position.


15

15.1 Remuneration and benefits paid to corporate officers 196

15.2 Total provisions and amounts recognised for pensions and other benefits 200

Remuneration and benefits


Remuneration and benefits Remuneration and benefits paid to corporate officers15

15.1 Remuneration and benefits paid to corporate officers

15.1.1 Rules for setting the remuneration of corporate officers—Procedures for setting the remuneration of the Chairman and Chief Executive Officer

Decree No. 53-707, dated 9 August 1953, pertaining to

the French government’s control over national public

corporations and certain organizations which have a social

or economic purpose, is modified in its Article No.3 by

Decree No.2012-915 dated 26 July 2012, in order to institute

a limit to the fixed and variable remuneration of Executive

Directors of public corporations and establishments to

€450,000 gross annually.

La Poste currently has just one corporate executive officer,

its Chairman and Chief Executive Officer The office was

held by Mr Jean-Paul Bailly until 25 September 2013, and

currently by Mr Philippe Wahl since 26 September 2013.

During its meeting on 22 April 2013 regarding the

remuneration of Jean-Paul Bailly, and its meeting on

12 December 2013 regarding the remuneration of Philippe

Wahl, the La Poste Board of Directors set the total

remuneration of the Chairman and Chief Executive Officer

at €450,000.

15.1.1.1 Fixed annual remuneration

The fixed portion of the remuneration of the Chairman Chief

Executive Officer of La Poste is subject to a ministerial

decision, in accordance with Decree No.53-707 dated

9 August 1953.

This Decree was modified by Decree No.2012-915 dated

26 July 2012 pertaining to the French government’s control

of the remuneration of officers of public corporations.

15.1.1.2 Variable remuneration

At its meetings on 22 April 2013 and 12 December 2013,

the Board of Directors decided not to grant variable

remuneration to Jean-Paul Bailly and to Philippe Wahl,

respectively.

15.1.1.3 Company car

A Company car is made available to the Chairman and Chief

Executive Officer La Poste bears all costs related to the

Company car (i.e. maintenance, insurance and fuel). This

benefit is accounted for as a benefit in kind.

15.1.1.4 Health and personal risk insurance coverage

The Chairman and Managing Director of La Poste is not

covered by any specific health and personal risk insurance

plan.

However, like the other Board members of La Poste, he is

covered by a supplementary health and personal risk plan,

for which the premiums are all paid by La Poste.

15.1.1.5 Pension plan

The Chairman and Managing Director of La Poste does not

receive any supplementary pension plan.

Regarding supplementary retirement, he has the same plan

as the senior executives of La Poste.

15.1.1.6 Directors' fees

The Chairman and Chief Executive Officer of La Poste does

not receive directors' fees for his position as a director of

La Poste.


Remuneration and benefits Remuneration and benefits paid to corporate officers 15

15.1.2 Corporate officers’ remuneration

15.1.2.1 Remuneration paid to Mr Philippe Wahl, Chairman and Chief Executive Officer, as from 26 September 2013

TABLE 1: SUMMARY OF REMUNERATION AWARDED TO THE CHAIRMAN AND MANAGING DIRECTOR—

MR PHILIPPE WAHL

Philippe Wahl, Chairman and Chief Executive Officer From 26/09/2013 to 31/12/2013

Remuneration due for the financial year (including benefits in kind) €119,272

Valuation of options awarded during the financial year N/A

Valuation of performance shares awarded during the financial year N/A

Total (including benefits in kind) €119,272

Total (excluding benefits in kind) €118,500

Gross before tax

TABLE 2: SUMMARY OF THE CHAIRMAN AND MANAGING DIRECTOR’S REMUNERATION—

MR PHILIPPE WAHL

Philippe Wahl, Chairman and Chief Executive Officer

From 26/09/2013 to 31/12/2013

Amount due Amount paid

Fixed remuneration €118,500 €118,500

Variable remuneration N/A N/A

Maximum % N/A N/A

% awarded N/A N/A

Special remuneration N/A N/A

Directors' fees N/A N/A

Total (excluding benefits in kind) €118,500 €118,500

Benefits in kind €772 €772

Total €119,272 €119,272

Gross before tax


Remuneration and benefits Remuneration and benefits paid to corporate officers15

15.1.2.2 Remuneration of Mr Jean-Paul Bailly, Chairman and Chief Executive Officer until 25 September 2013

TABLE 1: SUMMARY OF REMUNERATION AWARDED TO THE CHAIRMAN AND MANAGING DIRECTOR—

MR JEAN-PAUL BAILLY

Jean-Paul Bailly, Chairman and Chief Executive Officer

From 01/01/2013

to 25/09/2013 2012

Remuneration due for the financial year (including benefits in kind) €384,086 €453,865

Valuation of options awarded during the financial year N/A N/A

Valuation of performance shares awarded during the financial year N/A N/A

Total (including benefits in kind) €384,086 €453,865

Total (excluding benefits in kind) €380,917 €450,000

Gross before tax

TABLE 2: SUMMARY OF THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER—MR JEAN-PAUL BAILLY'S

REMUNERATION

Jean-Paul Bailly,Chairman and Chief Executive Officer

From 01/01/2013 to 25/09/2013 2012

Amount due Amount paid Amount due Amount paid

Fixed remuneration €337,500 €337,500 €404,072 €404,072

Variable remuneration (a) €43,417 €43,417 €45,928 €45,928

Maximum % N/A N/A N/A N/A

% awarded 11% 13% 11% 11%

Special remuneration N/A N/A N/A N/A

Director’s fees N/A N/A N/A N/A

Total (excluding benefits in kind) €380,917 €380,917 €450,000 €450,000

Benefits in kind €3,169 €3,169 €3,865 €3,865

Total €384,086 €384,086 €453,865 €453,865

Gross before tax(a) Remuneration paid in N+1 for year N.


Remuneration and benefits Remuneration and benefits paid to corporate officers 15

15.1.2.3 Directors' fees received by non-executive corporate officers

The members of the Board of Directors receive directors'

fees according to the following principles, adopted by the

General Meeting on 27 April 2011:

the annual budget allocated to directors' fees represents

€230,000;

this amount is divided up by the Board in the following

manner, subject to approval by the relevant ministries:

- €1,300 per attended Board Meeting or specialised

Committee meeting,

- €2,000 per attended meeting for the Chairman of a

Board Committee.

Pursuant to Article 13 of Le Groupe La Poste’s articles of

association and Article 22 of the Democratisation of the

Public Sector Act of 26 July 1983, only directors appointed

by the General Meeting are eligible for directors’ fees.

If the total amount of €230,000 approved by the General

Meeting proved insufficient at end of period in view of the

number of Board or Committee meetings, the directors’

fees will be allocated in proportion to the Board members’

attendance at corporate governance meetings.

For 2013, the directors' fees given out amounted to

€208,400.

TABLE 3: DIRECTORS’ FEES PAID TO DIRECTORS

Amounts due for 2013

Amounts due for 2012

Emmanuel Berthier (a) (*) €5,200 €9,100

Éric Delzant (a) (*) €3,900 N/A

Olivier Bourges (b) (*) €1,300 €23,400

Antoine Saintoyant (b) (*) €24,700 N/A

Sophie Mantel (c) (*) €5,200 N/A

Laurence Franceschini (*) €5,200 €5,200

Guillaume Gaubert (d) (*) €3,900 €11,700

Jean-Michel Hubert (*) €25,000 €18,400

Philippe Lemoine (*) €21,000 €15,700

Françoise Malrieu (*) €21,000 €21,700

Pascal Faure (e) (*) N/A €5,200

Christian Martin (e) (*) €19,500 N/A

Jean-Pierre Jouyet (f) (**) €7,800 €5,200

Antoine Gosset-Grainville (f) (**) N/A €1,300

Augustin de Romanet (f) (**) N/A €1,300

Odile Renaud-Basso (g) (**) €1,300 N/A

Loraine Donnedieu de Vabres-Tranié (g) (**) €35,100 €1,300

Michel Rose (g) (**) N/A €13,700

Franck Silvent (h) (**) 19,700 N/A

Sabine Schimel (h) (**) €8,600 €28,000

Total (€) €208,400 €161,200(*) Directors' fees paid to the French government.

(**) Directors' Fees paid to Caisse des Dépôts et Consignations.

(a) Éric Delzant was appointed on 15 October 2013 to succeed Emmanual Berthier.

(b) Antoine Saintoyant was appointed on 18 June 2013 to succeed Olivier Bourges.

(c) Sophie Mantel was appointed on 15 October 2013 to succeed Jean-Paul Bailly.

(d) Philippe Wahl was appointed on 15 October 2013 to succeed Guillaume Gaubert.

(e) Christian Martin was appointed on 24 January 2013 to succeed Pascal Faure.

(f) Jean-Pierre Jouyet was appointed on 19 July 2012 to succeed Antoine Gosset-Grainville, who had himself succeeded Augustin de Romanet on 7 March 2012.

(g) Odile Renaud-Basso was appointed on 12 December 2013 to succeed Loraine Donnedieu de Vabres-Tranié, who had herself succeeded Michel Rose.

(h) Franck Silvent was appointed on 18 June 2013 to succeed Sabine Schimel.


Remuneration and benefits Total provisions and amounts recognised for pensions and other benefits15

15.1.2.4 Stock options and performance shares

Within Le Groupe La Poste, there is no system for awarding performance shares or stock options to directors or employees.

15.1.2.5 Employment contract, supplementary pension, termination or job transfer allowance, and compensation for non-competition clauses

TABLE 4

Employment contract

Supplementary pension plan

Compensation payable due to severance or a

change of position

Compensation for a non-competition

clause

Yes No Yes No Yes No Yes No

Philippe Wahl,

Chairman and Chief Executive

Officer starting from

26 September 2013 X X X X

Jean-Paul Bailly,

Chairman and Chief Executive

Officer from 1 January 2013

to 25 September 2013 X X X X

15.2 Total provisions and amounts recognised for pensions

and other benefits

The corporate officer and members of the executive Committee do not belong to any complementary pension plan.


16

16.1 Duties of the Board of Directors 202

16.2 Activity of the Board of Directors in 2013 204

16.3 Assessment of the operation of the Board of Directors 204

16.4 Board Committees within the Board of Directors 205

16.5 Internal control 207

16.6 Compliance with the system of corporate governance in force in France 208

Operations of administrative bodies


Operations of administrative bodies Duties of the Board of Directors16

16.1 Duties of the Board of Directors

In accordance with the laws and regulations in force and

with the terms of the business contract, the Board of

Directors sets out La Poste’s general policies and the

business direction of La Poste and its Group (including

subsidiaries in which La Poste directly or indirectly has at

least 50% of the share capital or voting rights).

In particular, the Board of Directors determines the

strategic, economic, financial and technological priorities

of La Poste’s business and monitors their implementation.

Any material Group transaction outside the stated strategy

or that could have a material influence on the Group’s

financial structure or results must be referred to the Board

of Directors.

It may consider any issue concerning the smooth running

of the Company and deliberate and decide on any relevant

matters. It carries out whatever controls and checks it

deems necessary.

Whilst drawing up La Poste’s annual financial statements

and the consolidated financial statements, the Board of

Directors reviews forecasts, the attainment of the targets

set out in the business contract between the French

government and La Poste, and the Group’s strategic

progress. The Chairman informs the Board whether the

stated targets have been met and, if necessary, presents

suitable measures to reduce the actual or expected

shortfall.

The strategic direction of the Group and of each of its

Business Lines—and the multi-annual business plan in

particular—are reviewed at least once a year by the Board

of Directors, which approves the business plan, the Group’s

annual budget, the finance plan and its ability to distribute

dividends, as well as the key goals of the Group’s financial

guidance. Each quarter, the Chairman reports to the Board

of Directors on his monitoring of the Group’s business

activities and key operating performance indicators;

twice a year he reviews a report on the Group’s first-level

subsidiaries. For each of these subsidiaries, the report sets

out the highlights and indicators, in particular the major

acquisitions, disposals, equity investments or financial

transactions that do not require the prior approval of the

Board of Directors.

The Board of Directors is kept regularly informed of the

financial position and any material commitments; it is

also kept informed of major debt and cash management

transactions (excluding La Banque Postale).

The following transactions must be referred to the Board of

Directors for prior approval:

a) any transaction (including any material change thereto)

involving acquisitions, equity investments, asset

disposals (including financial, excluding day-to-day

treasury management and excluding day-to-day asset

and liability management at La Banque Postale), capital

restructuring (in particular mergers, spin-offs or asset

transfers, with the exception of La Poste internal

transactions) for a unit amount of over €30 million, this

threshold including, as the case may be, the price, the

net debt of the target, the amount of any purchase or

subscription guarantee made by La Poste or any of its

subsidiaries and any off-balance sheet commitments;

b) any transaction (including any material change thereto)

involving a business combination, disposal or issue of

equity securities or financial instruments convertible to

equity carried out by La Poste or any of its subsidiaries

(or to which La Poste or any of its subsidiaries is party),

for a unit amount of over €30 million, this threshold

including, as the case may be, the price, the net debt of

the target, the amount of any purchase or subscription

guarantee made by La Poste or any of its subsidiaries

and any off-balance sheet commitment; any strategic

partnership with average annual revenue over the time

frame of its business plan of in excess of €30 million

(including the renewal of any partnership);

c) any investment or divestment transaction (including

any material change thereto) not covered by item b)

above, carried out by La Poste or any of its subsidiaries

(or to which La Poste or any of its subsidiaries is party)

for a unit amount of over €200 million; this threshold

including, as the case may be, any off-balance sheet

commitments;

d) any transaction (including any material change thereto)


day-to-day management) carried out by La Poste or any

of its subsidiaries (excluding La Banque Postale) for a



Operations of administrative bodies Duties of the Board of Directors 16

e) setting a maximum amount of borrowings for the coming

year, when voting on the budget, excluding La Banque

Postale;

f) any transaction (including any material change thereto)

involving the securitisation of financial or commercial

assets carried out by La Poste or any of its subsidiaries

(excluding La Banque Postale) for a unit amount of over


g) any borrowing by La Banque Postale with a material

impact on the consolidated balance sheet of La Poste

(and in particular where it involves over €1 billion), or

any issue of debt or hybrid share capital by La Banque

Postale qualifying as Tier 1 or Tier 2 share capital

(additional equity capital) for over €500 million;

h) any new direction for the business activities of La Poste

or any of its subsidiaries or a change in its purpose, or

any material transaction reflecting a new direction for

the business or a strategic refocusing of La Poste or any

of its subsidiaries;

i) the dividend policy of La Poste or any of its directly owned

subsidiaries and any change to or development in the

dividend policy;

j) any decision to bring legal (including arbitration),

regulatory or administrative proceedings by La Poste

or any of its subsidiaries or to enter into a settlement

agreement or arbitration agreement with respect to

legal, regulatory or administrative proceedings to which

La Poste or any of its subsidiaries is party, for a unit

amount of over €50 million, it being specified that where

a number of such actions are based on the same or a

related event, this threshold is assessed on the basis of


k) setting a maximum amount for the coming year,

when voting on the budget, as well as the provision by

La Poste or any of its subsidiaries of guarantees and

endorsements or any transaction guaranteeing the

commitments of an entity that is not directly or indirectly

wholly-owned by La Poste, excluding transactions by

La Banque Postale with its customers or those involving

customer commitments, for a unit amount of over


l) any decision to carry out a public offering of financial

instruments issued by La Poste or any of its subsidiaries

excluding programmes already approved as part of the

budget approval by the Board of Directors;

m) any material change or planned material change to

Le Groupe La Poste’s accounting practices.

The Chairman informs the Board of the internal control

procedures established within the Group, significant risks

exposed by the controls implemented by virtue of these

procedures and risk management policies being considered

or carried out. It is also asked to give prior approval to the

internal control report drawn up by the Chairman.

The Board of Directors ensures the fairness and accuracy of

the financial statements and the quality of internal controls

and of the financial information published or made available

to it.

As part of its work, the Board of Directors may call upon

any expert whose skills it considers necessary. The rights

and duties of Board members, as set out in Articles 7 to

13 of the Act of 26 July 1983 on the democratisation of the

public sector, apply to members of the Board of Directors

of La Poste. In particular, and as specified in Article 7 of

the Board’s policies and procedures, Board members

must treat any documents or information that come to

their knowledge in the course of their duties as strictly

confidential. The position of a Board member representing

employees is incompatible with any other position involving

the representation of employee interests within La Poste

or its subsidiaries.

The Board Members’ Code, adopted in December 2004 and

included with each version of the policies and procedures

that the Board of Directors has adopted since, summarises

the rules of conduct with which Board members must

comply.

The policies and procedures of the Board of Directors set

out the manner in which the Board may exercise these

powers; amended at the Board Meeting on 10 February

2011, they incorporate the policies and procedures of

each of the four Board Committees (see below) and the

aforementioned Board Members’ Code. It specifies the

methods for disclosing information to Board members.

Since 2008, this has mainly involved a specially developed

secure electronic data room reserved for members of the

Board of Directors, who are notified whenever a document

becomes available.

To the best of the Company’s knowledge, no service contract

binding members of the Board of Directors to the Company

or any of its subsidiaries provides for the award of benefits

at the end of said contract.


Operations of administrative bodies Activity of the Board of Directors in 201316

16.2 Activity of the Board of Directors in 2013

The Board of Directors meets as often as Company interests

require, and at least six times a year. Furthermore, one

third of the members of the Board of Directors may call a

meeting by setting an agenda if no meeting has been held

for more than two months.

The Board met 11 times in 2013. Board members’ average

attendance at these meetings was 84%.

In particular, the Board of Directors reviewed and authorised

the following in 2013:

the business contract;

the 2014-2016 local postal coverage agreement;

the increase in La Banque Postale’s equity capital;

acquisition projects (La Banque Postale, GeoPost);

the collection of dividends from CNP-Assurances

in shares;

the 2014 budget.

In addition, the Board Members proposed the appointment

of Philippe Wahl as Chairman of the Board of Directors on

1 August.

The Board of Directors also reviewed the corporate balance

sheet, the business progress of first-level subsidiaries, and

the annual report on the management of real estate assets.

Lastly, the Board met for a strategic meeting on 24 January

2013 before adopting a preparatory document for the

strategic plan ("strategic project, financial outlook and

future in-depth projects"). On 28 November 2013, a new

strategic meeting took place in order to examine La Poste’s

digital transition, new services delivered by postmen,

La Banque Postale’s challenges with equity capital, the

future of the Group’s public service missions and the

international development of GeoPost. On 16 January

2014, a last strategic meeting was held before the Board of

Directors adopted the strategic plan on 28 January.

16.3 Assessment of the operation of the Board of Directors

Once a year since 2006, the Board of Directors has devoted

a part of its agenda to assessing its internal practices, with

particular regard to its policies and procedures and to any

improvements that could be made. From 2006 to 2009, this

annual appraisal was led by Jean-Michel Hubert (member

of the Board, individual with qualified status); the process is

now led by the Remuneration and Governance Committee

and its Chairman, who presents a summary to the Board

and suggests areas for improvement. La Poste has also

decided to carry out this assessment once every three years

with the help of an external firm.

The assessment of the Board and its Committees’

operations for 2012 was performed through interviews led

by the firm Leaders Trust International, chosen during a

consultation after which three candidates were auditioned.

The in-depth interviews led with all Board members

concerned were compiled in a summary document, which

was made available to the Board of Directors on 22 February

for the meeting on 28 February 2013. The agenda included

a presentation by Jean-Philippe Saint-Geours (Senior

partner of Leaders Trust International) and Philippe

Lemoine (Chairman of the Remuneration and Governance

Committee), followed by an exchange with all participants

of this meeting.

This assessment revealed the overall satisfaction of Board

members as well as their assessment of progress made

in terms of the content of files and availability time line for

information on risk management and explanation of the

strategy (particularly thanks to strategic meetings).

Most Board members wanted to see continued progress

regarding information on operational risks, creating a

system for following up on decisions made, and information

concerning comparative performances. To do this, avenues

for reflection were provided to the Board; they must be able

to respond to these expectations, while ensuring that the

Board of Directors’ pace and progress of work remains

smooth by bolstering the work of the Board Committees,

in particular.

In early 2014, the assessment of the Board’s operations

for 2013 was launched with the distribution of a detailed

questionnaire to each Board member, which will allow

Board members to express their opinions on the changes

encouraged following the Leaders Trust International firm’s

work.


Operations of administrative bodies Board Committees within the Board of Directors 16

16.4 Board Committees within the Board of Directors

To fulfil its duties, the Board of Directors has set up four

Board Committees tasked with examining and preparing

certain projects before they are presented at plenary

sessions, either adding them to the agenda or mentioning

them in the report on work carried out by the Chairman.

The government representative and the head of the French

government’s economic and financial control unit attend the

meetings of each Committee.

The Committees are as follows: Audit Committee (set up in

2001), Strategy and Investment Committee (set up in 2004),

Quality and Sustainable Development Committee (set up in

2004 as the Customer Service Committee, later renamed

in 2007) and the Remuneration and Governance Committee

(set up in 2010). Furthermore, an ad hoc commission comes

together to prepare for the Board of Directors Meetings two

days before they take place.

16.4.1 Audit Committee

The Audit Committee is composed of: Mr Silvent, Chairman

of the Committee, Mr Lersy, Ms Mantel, Ms Renaud-Basso

and Mr Saintoyant.

The role of the Audit Committee is to assist the Board

of Directors in its areas of expertise, i.e. for Le Groupe

La Poste, analysing the accounts, the main financial

information, major risk mapping, the management policy

applied to these risks and internal control procedures.

With a view to preparing the work of the Board of Directors

and making any useful recommendations, the Committee:

checks the relevance and consistency of the accounting

standards and practices applied by La Poste and the

Group in preparing the parent company and consolidated

financial statements, as well as the appropriate

recognition of significant financial and accounting

transactions carried out or to be carried out by La Poste

and the Group; studies any proposal for significant

changes to these standards and practices before they

are applied;

ensures the separate and consolidated financial

information produced by La Poste is true and fair; verifies

that internal data collection and control procedures are

established and followed to guarantee this truth and

fairness;

reviews La Poste’s financial disclosure policy and the

main aspects of this disclosure;

carries out a prior review of accounting and financial

documents to be submitted to the Board of Directors,

including the annual and interim financial statements,

financial statements specifically drawn up for the

purposes of a given transaction, management reports

and their notes;

with the help of the Finance Department, establishes

the procedure for choosing La Poste’s Statutory Auditors

after putting out an invitation to tender and making a

recommendation to the La Poste Board of Directors on

the choice of said auditors; debates the involvement

of the appointed Statutory Auditors and the budget

allocated to their work; ensures the Statutory Auditors

are independent;

periodically reviews the Statutory Auditors’ report and

their recommendations;

reviews the Chairman’s report on internal control

procedures;

assesses the effectiveness of internal control and risk

management systems and, to this end, carries out

an annual review of the mapping of all kinds of risks

to which the Group is exposed through its operating

activities, as well as the processes and action plans

introduced to identify and control these risks; reviews

the report on the work of the head office internal auditors

and staff responsible for internal audit within La Poste

and the Group for the previous year, and gives its opinion

on the work programme for the year ahead;

carries out a periodic review of major unresolved

disputes and any other issues of a financial, accounting,

legal or any other nature that could generate risks or

threats;

reviews the nature and scope of significant off-balance

sheet commitments;

makes any recommendations to the Board of Directors

on the matters above;

more generally, reports any significant issues that could

require the Board’s special attention to the Board of

Directors.

The Audit Committee met five times in 2013; the average

attendance of Board members was 84%.

During 2013, in addition to recurring subjects such as

reviewing the annual and interim financial statements, risk

mapping and scheduling audits, the Committee notably

reviewed the internal control and risk control processes of

Mail and La Banque Postale, as well as its revenue model

and allocation of equity capital.


Operations of administrative bodies Board Committees within the Board of Directors16

16.4.2 Strategy and Investment Committee

The Strategy and Investment Committee is made up

of: Ms Malrieu, Chairperson, Mr Blanchot, Mr Dupin,

Ms Liboutet , Mr Pesnel , Ms Renaud-Basso and

Mr Saintoyant and Mr Silvent.

With a view to preparing the work of the Board of Directors

and offering any useful opinion or recommendations, the

Committee:

analyses the strategic growth drivers of La Poste and its

Group in France and abroad;

studies proposed strategic agreements and monitors

partnerships;

studies planned asset acquisitions or disposals within

the Group, plans to create subsidiaries or buy and sell

equity investments for amounts exceeding €30 million;

reviews the multi-annual business plan;

oversees the main items of the business contract signed

with the French government.

The Strategy and Investment Committee met four times in

2013; the average attendance of Board members was 84%.

In 2013, the Committee essentially worked on the Group’s

strategic project, the business contract, the change in

La Banque Postale’s equity capital, the international

development of GeoPost and acquisition projects.

16.4.3 Quality and Sustainable Development Committee

The Quality and Sustainable Development Committee is

made up of: Mr Hubert, Chairman, Ms Derouard, Mr Martin,

Ms Féola, Ms Renaud-Basso, Mr Silvent and Ms Zarine.

The Committee helps the Board of Directors to analyse

the quality of services that Le Groupe La Poste provides

to its customers, as well as sustainable development at

Le Groupe La Poste.

The Committee’s role is to prepare the Board of Directors’

work and make any useful recommendations on any issue

concerning the quality of relations between Le Groupe

La Poste and customers, as well as on sustainable

development, especially regarding the following:

surveying customer satisfaction with Le Groupe

La Poste;

analysing the quality of service provided to customers of

Le Groupe La Poste;

reviewing best practices in the services provided to

customers of Le Groupe La Poste;

reviewing best practices in terms of sustainable

development and corporate social responsibility.

The Board of Directors may also ask the Committee to

carry out any other work relating to quality and sustainable

development; the Committee may even suggest that the

Board consult it on any specific issue that it considers

necessary or relevant. Following deliberation on 30 May

2013, the Board of Directors added well-being at work at

La Poste and best practices to the Committee’s area of

responsibility.

The Quality and Sustainable Development Committee

met six times in 2013; the average attendance of Board

members was 79%.

During 2013, the Committee examined the service-oriented

attitude, the systems to measure quality delivered and

perceived quality, the implementation of the agreement

on Quality of life at work, the CSR strategy and La Poste’s

ethics programme.


Operations of administrative bodies Internal control 16

16.4.4 Remuneration and Governance Committee

The Remuneration and Governance Committee is composed

of: Mr Lemoine, Chairman, Mr Jouyet, Ms Renaud-Basso

and Mr Saintoyant.

With a view to preparing the work of the Board of Directors,

the Committee:

issues recommendations on the remuneration of

La Poste’s corporate officers;

formulates an opinion on any proposal pertaining to

the general principles of the remuneration policy;

gives an opinion on any planned capital increase

reserved for employees or bonus share awards pursuant

to Articles 32 and 33 of Act 90-568 of 2 July 1990 as

amended, relating to the organization of the public

service provided by La Poste and France Télécom;

coordinates the annual assessment of the Board of

Directors.

The Chairman of the Board of Directors informs the


replacement of the executives of La Poste and its main

subsidiaries. Where appropriate, the Committee passes on

its observations to the Board of Directors.

The Remuneration and Governance Committee met four

times in 2013; the average attendance of Board members

was 75%.

During 2013, the Committee primarily devoted itself to its

recurrent assignments (remuneration of the Chairman and

Chief Executive Officer, etc.).

16.5 Internal control

16.5.1 Report of the Chairman of the Board of Directors

In accordance with the provisions of Article L. 225-37 of

the French Commercial Code, the Chairman of the Board

of Directors must produce a report on the conditions

of preparing and organising the Board’s work, and on

the Company’s internal control and risk management

procedures, and attach this to the Board of Directors'

management report.

This report is included in appendix 1.


Operations of administrative bodies Compliance with the system of corporate governance in force in France16

16.5.2 Statutory Auditors’ report prepared in accordance with the final paragraph of Article L. 225-235 of the French Commercial Code, on the report by the Chairman of the Board of Directors of La Poste, regarding internal control and risk management procedures

This report is included in appendix 2.

16.6 Compliance with the system of corporate governance

in force in France

At its meeting on 10 March 2011, the La Poste Board of

Directors decided to refer to the provisions of the Code

of Corporate Governance drawn up by Afep-Medef for

purposes of preparing the report mentioned in Article

L. 225-37 of the French Commercial Code. Said Code of

Corporate Governance is compatible with the legislative and

regulatory provisions governing La Poste.

This means that some of the legislative provisions

arising from Act No.83-675 of 26 July 1983 regarding

the democratization of the public sector, which apply to

La Poste, together with the provisions of Act No.90-568 of

2 July 1990 regarding the organization of La Poste’s public

service Télécom limit the option to apply the Corporate

Governance Code drawn up by the Afep and the Medef.

These provisions primarily concern the composition of

the Board of Directors, which is specified by law, and can

therefore not meet the composition (categories of directors)

or independence requirements set down in the Afep-Medef

Corporate Governance Code, as revised in June 2013.

The same applies where the Audit Committee set up by

La Poste is concerned. However, the Company believes

that each of the directors has the relevant skills and

professional experience to perform their duties and notes

that in accordance with Point 7 of the Code, employees are

represented on the Board of Directors, and make up one

third of the Board members, pursuant to the provisions of

Article 10 of the Act of 2 July 1990.

Moreover, in the case of:

the roles of Chairman of the Board of Directors and

Managing Director: Article 11 of the Act of 2 July 1990

and referred to in Article 14 of the articles of association

states that the functions of Chairman and Managing

Director are combined;

the methods for appointing and dismissing the Chairman

and Chief Executive Officer: Article 10 of the law of

26 July 1983 referred to in Article 14 of the articles of

association states that the Chairman and Managing

Director is appointed and removed by decree;

setting the remuneration for the Chairman and Chief

Executive Officer: the decree dated 9 August 1953 states

that the decision comes from the relevant ministers, and

the decree dated 26 July 2012 defines a ceiling;

membership of La Poste’s Board of Directors: this is

set at five years, and all the members of the Board of

Directors are reappointed when their term of office

expires; the procedures are specified in Article 11 of the

Act of 26 July 1983;

directors cannot own shares in a personal capacity, as

Act No.2010-123 of 9 February 2010 has provided that

La Poste’s share capital shall be held by the French

government or by other legal entities governed by public

law, except for the portion of the share capital that may

be held as employee shareholdings. Moreover, the Act of

26 July 1983 (Articles 11 and 12) exempts Government

representatives and employee representatives from

being required to hold shares in companies of which they

are directors where such a holding is required;

the Committee responsible for selecting or appointing

directors and executive corporate officers: no such

Committee has been set up as the terms and conditions

for selecting and appointing directors are determined

in law.


17

Introduction 210

17.1 Change in staff numbers 210

17.2 A responsible employment policy 210

17.3 Professional development, training and promotion policy 211

17.4 Diversity and equal opportunity 215

17.5 Health and safety—Quality of life at work 218

17.6 Players in HR support 219

17.7 General remuneration policy 220

17.8 Staff policy 222

17.9 Employee shareholding 227

17.10 Summary of employee information 227

Employees


Employees Introduction17

Introduction

Le Groupe La Poste has chosen to grow responsibly,

combining improved performance with an exemplary

attitude in social, societal and environmental issues. The

Group’s responsible development involves a strong social

model based on offering quality jobs, equal opportunities,

diversity and support for employees’ career plans. This

staff policy enables the Company to keep its promise of

supporting employees’ career development and securing

the loyalty of those who join by providing opportunities for

promotion.

Following the Major Dialogue in 2012, during which more

than 125,000 postal workers expressed their opinions,

eight social transition projects were recommended:

social dialogue, management, organization of work and

change management, health and safety at work, social

model, reclassification, HR function, workforce and skills

management planning.

La Poste entered into comprehensive social negotiations,

which led to a framework agreement on Quality of

life at work that was signed on 22 January 2013. This

founding agreement on Quality of life at work, which is

described in more detail below in this Chapter, provides

for immediate measures, sets down the company's goals

and commitments and organizes an additional negotiation

program on the different projects which began in 2013.

17.1 Change in Group staff numbers

Change in Group staff numbers in full-time staff equivalents/annum

AVERAGE NUMBER OF EMPLOYEES (FULL-TIME EMPLOYEE EQUIVALENTS/ANNUM)

2013 2012

Group 266,369 266,618

82.2%

La Poste

parent company

(France)

French

and foreign

subsidiaries

17.8%

Foreign

subsidiaries

8.7%

Frenchsubsidiaries9.1%

17.2 A responsible employment policy

La Poste leads a responsible employment policy despite a

difficult economic context and environment. The decrease

in mail volumes and the decline in visits to post offices are

both factors driving the Group to control staff numbers,

but La Poste remains one of the leading players in the

employment market in France.

This policy is primarily reflected by a change in the

headcount which is solely due to the difference between

natural departures and hires, by an employment policy that

promotes permanent contracts for employees; employees

on these contracts accounted for 94.6% of La Poste parent

company employees in 2013, and by a dynamic hiring policy

that actively supports the integration of young people, and

encourages social inclusion.


Employees Professional development, training and promotion policy 17

La Poste is convinced that the quality of recruitment

processes, which recognize social diversity and respect equal

opportunities, contributes to the Company’s responsible

development. La Poste is a signatory of the Apprenticeship

Charter (2005), the Charter for Diversity (2006), the National

commitment to local youth employment (2008), and the

Corporations and Neighborhoods Charter (2013).

La Poste gives each candidate every opportunity to succeed,

choosing solely on the basis of skills, qualifications,

experience and motivation, from the recruitment stage on.

The Group implements an open recruitment policy that

reflects the Group’s commitment to diversity.

La Poste promotes diversity in its recruitment in several

ways (e.g. anonymous CVs, recruitment in deprived urban

areas, vocational training contracts, apprenticeship

contracts, simulation-based recruitment, etc.).

La Poste has committed to recruiting 15,000 employees on

permanent contracts during the period between 2012 and

2014. After the 5,211 permanent contract hires made in 2012,

the company recruited 5,298 new employees on permanent

contracts in 2013, thereby continuing on the path towards

meeting its commitment. These recruitments present an

opportunity to integrate employees who previously worked

under temporary contracts at La Poste. Within this context,

the company has committed to prioritizing the review of any

application from an individual who has previously held a

position at La Poste when recruiting staff under permanent

contracts for the same position, as part of the Quality of llife

at work agreement, and to making 3,000 permanent contract

hires among employees on temporary contracts during the

period between 2013 and 2015. In 2013, 1,390 people who

had already worked at La Poste on temporary contracts were

recruited on a permanent basis.

NUMBER OF PERMANENT RECRUITS

At year end 2013 2012

Permanent contract 5,298 5,211

On 30 October 2012, La Poste signed an agreement with the

French government to recruit 1,000 contracts for the future

(emplois d'avenir) by 31 December 2014. This commitment

will allow 1,000 young people with few or no qualifications to

receive skills or known qualifications and gain professional

experience. La Poste intends to offer these young people

permanent contracts once they satisfy the employment

criteria on which they were trained under temporary

contracts. At 31 December 2013, 626 young people were

employed at La Poste under "emploi d'avenir" contracts.

Women accounted for 49.1% of new hires in 2013, while people

living in deprived or critical urban areas accounted for 15.2%,

and people aged 45 and over for 7.4%. La Poste has hired 118

disabled people under permanent contracts, in accordance

with the commitment made in the staff agreement for the

benefit of people with disabilities signed on 8 March 2012.

Lastly, in 2013, and for the fifth consecutive year, the CRF

Institute awarded La Poste its Top Employer certification.

La Poste has a low staff turnover rate (3.25% in 2013 and

2.82% in 2012).

17.3 Professional development, training and promotion

policy

Skills development for its postal workers is central to

La Poste's human resources policy.

In 2013, the Quality of life at work agreement rolled out

several new measures and opened specific negotiation on

professional development in order to cultivate workforce

and skills management planning and to strengthen

professional development policies.

17.3.1 Professional development

La Poste promotes professional development that respects

individuals and promotes diversity in professional projects,

the ultimate goals being:

to respond to the employees' career advancement goals

in a diverse range of areas: projects may involve internal

or geographic mobility, or a change in positions, such as

moving to the public sector or even creating a business;


Employees Professional development, training and promotion policy17

• to secure the loyalty of La Poste employees by offering

more possibilities for career development;

• to support the Company’s modernization by allowing

skills to be mobilized wherever and whenever they are

needed;

• to consolidate the introduction of skills-based HR

management with progress made in training and

promotion.

In October 2013, La Poste organized its first Career

Development Week, during which postal workers were able

to discover all of the Group’s business activities and develop

their career path through more than 800 demonstrations,

conferences, meetings and workshops throughout the

territory and in every Business Line.

La Banque Postale has chosen to encourage professional

development in order to support new jobs with good

prospects, like 100% remote banking advisers, account

managers for companies and local authorities, and

specialist banking positions (risk, control, and fraud).

17.3.1.1 Internal mobility

La Poste would like to develop career advancement

opportunities within the Group.

To this end, in 2013, a catalogue was developed,

grouping together all positions performed in the

company, subsidiaries and job families in common

with all of La Poste's operations. This more simple and

comprehensible shared reference guide will help build

more numerous and varied career paths at La Poste on a

company-wide scale. It will allow the company to develop

and share workforce and skills management planning

throughout all of the company's Business Lines.

In terms of internal mobility, La Poste allows company

employees to actively participate in their career

development by creating means for them to take initiative:

rules regarding internal mobility, a job market accessible to

all employees through Intranet or Internet, development of

a mobility advisers network or career advancement advisers

divided up between the company's different Business Lines.

A new stage was reached in 2013 with the signing of the

Quality of Life at Work Agreement, including the extension

of La Poste's jobs fair to all of its French subsidiaries.

Lastly, La Poste continued developing cross-career paths

between Business Lines and professional fields. As a result,

in 2013, 613 employees from the Mail and Parcels Business

Lines benefited from a skills enhancement scheme, by

alternating between periods in the post offices and periods

at the training facility, which has enabled them to become

counter clerks within the post office network.

17.3.1.2 HR support

In 2013, the company developed its support scheme aimed

at helping postal workers to build and implement their

career path. La Poste has introduced a career interview

with a specialized HR manager (mobility advisor, career

development advisor, or career advancement advisor, etc.)

for any postal worker who requests one, regardless of

their status and level, provided they have been in the same

position or role for over five years. In addition, since 2013,

new managers have received specific training aimed at

helping them support every one of their employees in their

career development plan.

17.3.1.3 External mobility

Public sector mobility

In response to postal workers’ requests for mobility towards

one of the three public sectors (French government, local

government and hospitals), in 2008, La Poste introduced

a new legal process of secondment, then transfer of state

employees.

This exceptional measure common to the three public

sectors was introduced by Act No.2007-148 of 2 February

2007, and then extended until 31 December 2016 by Act

No.2012-347.

Within this context, La Poste and the Centre national de la

fonction publique territoriale (National Centre of Territorial

Public Sector—CNFPT) established a training partnership

allowing postal workers who would like to move to the

regional public sector to receive a specific training path

within the CNFPT, or to individually register for training or

competition preparation available in the CNFPT catalogue.

La Poste helped 203 postal workers transfer to the public

sector in 2013. 96.2% stated that they were satisfied or very

satisfied with their career path.


Employees Professional development, training and promotion policy 17

Business creation

La Poste leads an active policy to support entrepreneurial

projects expressed by its employees, organized around

five principles: initiative and voluntary service of the

entrepreneurial postal worker, equal treatment, access to

information and transparency, confidentiality of the process,

and individualized support.

The creation or takeover of a business activity is therefore

subject to specific measures of support: a toll-free number

for information, an internal network of specialized Advisers,

access to training and planning working hours, financial

aid, post-creation follow-up and a right to return to the

company.

In 2013, 130 postal workers with plans to start or take over a

business succeeded in their plans, and 61 received financial

assistance from the company.

17.3.2 Training

2013 2012

Training expenditure as a percentage of payroll 3.63% 3.60%

Number of employees trained at least once 163,822 NA

Number of training days 731,543 590,000

17.3.2.1 Stakes of training

Against a backdrop of economic and social change, the

La Poste’s strategic plan has high ambitions in terms of

business development, quality of customer service and

Quality of life at work.

Therefore, training is more than ever seen as an investment

for the future, an indicator of economic and social

performance. The ability to identify the skills needed to

foresee development and meet the demands of the market

and customers is an essential part of being competitive.

Beyond the economic dimension, training must also meet

postal workers' expectations in terms of their individual

recognition and professional development.

Since 2013, this policy has been reflected by a sharp

increase in the access to training: nearly 80% of postal

workers attended at least one training course during the

year. This commitment must allow each employee to obtain

and maintain the skills necessary to accomplish their job

and career path.

2013 also provided an opportunity to finalize the setting up

of a management institute intended to train and develop

the Group's executives, and make them more open to

the outside world. This institute is also responsible for

management research.

Thus, Le Groupe La Poste's 2013 training project falls under

a dynamic policy in developing postal workers' skills.

Special priority was given to the following objectives:

supporting projects that promote secure career paths;

guaranteeing employees’ professional development by

supporting their internal or external career paths;

actively recognizing and valuing skills and qualifications,

by ensuring that employees maintain basic knowledge

and skills, and encouraging access to programs that help

them obtain qualifications and certificates;

being particularly vigilant with certain sensitive people

through monitoring and support: seniors, and people

with disabilities, etc.;

encouraging access to training for each postal worker;

developing the mentoring system, which forms in

particular one of the keys of success of the youth

integration policy and of the implementation of contrats

de génération (cross-generation contracts). As a result,

it is necessary to introduce support and training that is

appropriate for the mentors;

supporting the development of managerial skills as

part of the Business Line training process, or programs

created by the Institute of Management, and helping

professionalize the employees in the HR area.


Employees Professional development, training and promotion policy17

La Banque Postale offered a risk management and Net

Banking Income training program to all of the managers

in its network in 2013. At the same time, it rolled out a

managerial development program for its 2,300 managers

in June 2013. A new program has since been relaunched,

based on the themes of cooperat ion, strategic

communications and leadership. It is available to all bank

managers, financial services, and subsidiaries of La Banque

Postale.

17.3.2.2 An active part-time education policy

La Poste is convinced that part-time education is an

appropriate and effective way to prepare for professional

life and integration into the workplace, and has been firmly

committed to a policy aimed at integrating young people

into the workplace by developing part-time employment

(apprenticeship contracts and vocational training contracts)

for a number of years.

There are two aspects of Le Groupe La Poste’s part-time

education policy:

training and integration in the workplace, giving young

people the chance to obtain a diploma and have their first

work experience, which improves their employability;

pre-recruitment, especially for “core business” jobs

(postmen and financial Advisers in particular), taking

into account recruitment needs.

The programs offered by La Poste allow participants to

receive diplomas or professional accreditation, from CAP

(Professional Ability Certificate) qualification to a master's.

In concrete terms, this policy resulted in the Company

deciding to employ at least 7,500 young people on work-

study programs during the 2013-2015 period. Despite

the adverse economic environment, 5,106 young people

benefited from an apprenticeship or vocational training

contract in 2013.

17.3.3 Promotion

17.3.3.1 Promotion

In keeping with a human resources management approach

that is focused on skills development, La Poste has put in

place three channels for promotion:

recognition of professional achievement to advance one

classification level;

recognition of professional potential to advance several

classification levels;

recognition of professional experience to advance one

classification level based on merit and seniority.

12,873 postal workers were promoted via one of these three

promotion channels in 2013. This represents a promotion

rate of 5.8%. 47,390 postal workers have been promoted

over the past three years.

17.3.3.2 Qualification-based promotion

As part of La Poste’s tradition of employee promotion, the

qualification-based promotion system offers employees who

have not been able to study at university, despite having the

potential, the possibility of being promoted to operational

management level through a part-time education program.

This training is based on an 18-month block release course

that includes classes at a management school to obtain a

Master’s degree, and apprenticeship experience in the role

of an operational manager, in the presence of a mentor.


Employees Diversity and equal opportunity 17

17.4 Diversity and equal opportunity

La Poste is a signatory of the Corporations and

Neighbourhoods Charter for 2013/2014.

At the end of 2010, the Chairman of Le Groupe La Poste

signed the commitment proposed by the United Nations

Global Compact in order to promote gender equality, which

is known as Women’s Empowerment Principles—Equality

means business.

At the Department of Human Resources and Labour

Relations, a new Diversity and Equal Opportunities

Department has been responsible for managing La Poste’s

diversity policy from an HR standpoint since 2011, including

the disability mission at the national level, and organizing

an inter-Business Line Steering Committee, and diversity

officers for local organizations.

Initiatives regarding diversity and equal opportunities have

consistently been a part of La Poste's strategic plans.

They aim in particular to:

implement the commitments of the gender equality

agreement;

improve handling un-employability and manage the

disabled policy under a fifth agreement signed with

unions on 8 March 2012;

manage and monitor age-management actions;

ensure compliance with legal requirements and manage

discrimination risk.

A national level action plan is implemented each year and

action plans are drawn up by the management of each

Business Line. The progress of action plans is regularly

reported to the authorities concerned. In each of the

Business Lines as well as locally, diversity officers support

the implementation of the diversity policy.

La Poste has been awarded the Diversity Label for all its

business activities. This award was granted to the company

again in February 2013 for a four-year period.

17.4.1 A constant effort to ensure gender equality in the workplace

A process that began in 2005 with the signing of a

framework agreement, and continued in 2006 with the

award of the Equality Label—renewed every 18 months

since then—has led the managements of each Business

Line to define their own action plans specific to their

Business Lines.

The agreement signed on 11 April 2011 resembles the

guiding principles and the key commitments of the initial

agreement in 2005 and is accompanied by a priority

action plan:

strengthen diversity in the Business Lines, particularly

by updating communication tools;

undertake an in-depth study of remuneration inequality

that may persist between women and men;

facilitate parenting in professional life (improving

childcare, communication on rights related to

parenthood, parent survey);

train and raise awareness with all postal workers to

combat gender stereotypes.

Dedicated resources support the implementation of the agreement and indicators regularly evaluate progress.

2013 2012

Percentage of women in the total headcount 51.5% 50.6%

Proportion of women on the Executive Committee of La Poste 27.3% 9%

Percentage of senior executives who are women 28.7% 12.2%

Percentage of managerial staff who are women 46.3% 41.6%


Employees Diversity and equal opportunity17

The comparison report, which has been published since

2003, is shared with unions within the Commission that

monitors the agreement, the comité technique paritaire

(Joint Technical Committee), and each year it is presented

to the Board of Directors to review and issue an opinion, in

accordance with obligations required by law.

Lastly, in April 2013, La Poste committed to implement

actions specifically in the following areas, by way of an

agreement with the Ministry of Women's Rights:

professional equality in Small and Medium-sized

businesses;

the development of diversity in sectors and functions;

combating loss from employment among people on

maternity or paternity leave;

developing roles for women on the Group and Business

Line management bodies.

17.4.2 Measures implemented to help disabled people and those unfit for work

On 8 March 2012,La Poste management and four unions,

CFDT, CFTC, CGC/UNSA and FO signed a new agreement

in favour of employing disabled people.

On 22 May 2012, this agreement, the fifth signed on this

theme, received approval from the Greater Paris regional

department of companies, competition, consumption,

labour and employment.

Through this agreement, equipped with a €56 million budget

over three years, La Poste is continuing and strengthening

its commitments in favour of employing disabled people in

all areas.

The agreement, which covers the 2012-2014 period, involves

an action plan which notably aims to:

hire a minimum of 480 disabled people for any type of

position (213 people hired in 2012 and 187 in 2013) and

welcome 300 interns with disabilities;

maintain employment of disabled personnel and improve

their Quality of life at work;

guarantee professional advancement of disabled people

through easier access to training and promotions;

continue and strengthen partnerships with different

specialized organizations in training and supporting

disabled workers.

The agreement is subject to action plans within the different

La Poste Business Lines in order to take into consideration

their specific features and facilitate its implementation.

La Poste also implemented a network of trained and

professional disability officers throughout France, which

has been active since late 2012.

In 2013, more than 6% of employees of La Poste parent

company receive a job security guarantee, accompanied

with adjustments in their workstations, where necessary,

either as disabled workers or as people with medical

restrictions.

(€ million) 2013 2012

Amount of purchases from sectors that work with the disabled 11.03 8.63


Employees Diversity and equal opportunity 17

17.4.3 Cross-generation agreement

The provisions of the age management action plan

decided on in 2010 were extended in 2013. At the same

time La Poste conducted negotiations with trade union

organizations concerning the policy of integrating young

people into the workplace (permanent contracts and part-

time hires), maintaining senior workers in employment

and passing on skills and knowledge. These negotiations

resulted in the signing of a Cross-generational Agreement

between La Poste and five trade union organizations on

22 January 2014.

2013 2012

Percentage of workforce aged 55 or over (La Poste parent company) 23.5% 21.6%

At Chronopost, a triennial contrat de génération was signed

on 22 October 2013 by all representative unions. It states

that, in addition to recruiting people under 26 years old, the

percentage of permanent contract employees aged 50 and

above must reach a minimum of 15% of employees by the

end of the agreement period.

17.4.4 Anti-discrimination action

The various agreements reached with social partners

included actions to raise postal workers’ awareness of the

most common stereotypes likely to result in discriminatory

practices. Two communication tools accompanied by a

guide were made available to all La Poste managers for

a deployment carried out with their teams from 2011 to

2013, the second tool focused more specifically on gender

stereotypes.

In 2013, La Poste chose to contribute to intercompany

studies, such as Work relationships between men and

women, carried out by the Conseil supérieur de l’égalité

professionnelle (French High Council for Professional

Equality), the conclusions of these studies were made

public in December 2013.

The reference guide on discrimination risk presenting

the state of the law and jurisprudence as well as

practical cases, was updated in 2013 for legal experts

and the company's managers of human resources. It is

supplemented with regular reports of news on the subject

of discrimination.

2013 2012

Percentage of permanent contract recruitments in deprived urban areas

or under urban social cohesion contracts 15.2% 14.5%

17.4.5 The publication of a diversity report

La Poste has made it a priority to ensure that specific legal

provisions in favour of certain communities or situations are

respected and that close attention is paid to the individuals

concerned. The following categories of people are reviewed

each year, while corrective measures are taken whenever

an unusual situation is noted in terms of recruitment,

remuneration, or access to promotion or training:

women;

beneficiaries of the obligation to employ disabled

workers;

people over 45;

people under 26;

individuals living in deprived urban areas;

individuals born in French overseas departments and

territories;

foreign workers.

This report is discussed with trade union organizations.


17Employees Health and safety—Quality of life at work

For 2013, the report was made more general, in order

to better show La Poste's successes and areas for

improvement regarding diversity, and to allow for it to be

distributed to the largest audience possible, both inside and

outside of the company.

17.5 Health and safety—Quality of life at work

17.5.1 Immediate measures specified by the Quality of Life at Work Agreement

The Quality of life at work agreement signed on 22 January

2013 defined several immediate measures which help to

better preserve the health and safety of postal workers,

among which are:

strengthening the monitoring of postal workers'

occupational health:

La Poste has committed that, starting in 2013, priority

check-ups would be proposed to all postal workers who

had not had one recently, so that by the end of 2013, all

postal workers would have been called in for a check-up

within the last two years.

This measure has been carried out notably by

reinforcing medical teams: at the end of 2013 La Poste

had 161 occupational doctors 158 in 2012, 152 in 2011,

147 occupational nurses (132 in 2012, 105 in 2011) and

106 secretaries (106 in 2012, 93 in 2011);

changes in the missions of La Poste and its Business

Lines' National Commissions on Health and Safety

at Work:

La Poste and its Business Lines' National Commissions

on Health and Safety at Work meet regularly throughout

the year. These commissions, which have existed

since early 2012, changed in 2013 to an authoritative

body on information, research and discussions of

matters concerning hygiene, safety, health and working

conditions common to all entities within their scope. In

Financial Services, a major project in the Operations

Department, digitization, was also presented and

analyzed by this Commission.

17.5.2 Continued and increasing efforts

La Poste continued and stepped up its efforts in prevention,

with particular attention paid to preventing accidents

at work, preventing psychosocial risks and preventing

physical duress. All actions led by the company in 2013 were

included in a written summary presented in the National

Commissions on Health and Safety at Work on 4 December

2013.

In terms of preventing psycho-social risks:

new training programs were rolled out in the

Business Lines for managers on the fundamentals of

management: team motivation, daily communications,

assessment, cooperation, change management,

personalized management.

as part of its Quality of Life at Work Agreement, La Poste

is committed to complying with joint rules that apply to

all parties in the social dialogue. These rules aim to

clarify the roles and undertakings of each party, and the

role of the authorities, in order to achieve a high-quality

social dialogue on the issue of psycho-social risk in all

circumstances.

in order to better take into consideration work/life

balance in work organizations:

- an agreement on the implementation of teleworking

at La Poste was signed on 26 June;

- experiments are in progress as part of the Quality

of life at work agreement, with new organizations

granting two rest days during the week for postal

workers working six out of seven days.

where listening to and supporting people who are

experiencing difficulties is concerned, La Poste

introduced a telephone listening and psychological

support scheme, with the assistance of experienced

psychologists; postal workers may call anonymously

and confidentially 24/7. This scheme will supplement

the measures taken by managers, human resources,

occupational health services, social services and staff

representatives.


Employees Players in HR support 17

Where preventing workplace accidents and musculo-

skeletal disorders is concerned, La Poste is taking action

at several levels:

Studies have been conducted by the network of

occupational physicians to identify the jobs at risk and

risk factors of musculoskeletal disorders. The results

of these studies have been distributed to managers and

specialized areas along with practical advice.

The method for analyzing the causes of workplace

accidents has been adjusted.

New work equipment has been tested and rolled out:

new sorting units that can adjusted to the configuration

of mail rounds, and where the height can be adjusted,

so as to take employees’ height into consideration, new

sorting units adapted for people with restricted delivery

abilities, new sorting units for financial services, the

use of conveyor belts at ColiPoste offices, in order to

handle the arrival of bulk parcels, new vehicles that allow

standing, and are fitted so as to make getting in and out

of the vehicle easier, as well as storing parcels in the

appropriate delivery order and no longer stacking them

on the ground.

New training and new educational tools have been

rolled out for postal workers: new training on preventing

manual handling risks and musculo-skeletal disorders

that is appropriate for the activities performed in post

offices, ColiPoste offices and platforms, in Financial

Services ("My back, my joints" training); new educational

tools for protecting health that are appropriate for Mail

activities, such as two-wheel delivery, working on display

screens, or working on sorting units.

These actions have produced concrete results: drop in

La Poste injury frequency rates (from 26.42 in 2012 to

25.2 in 2013) and the severity of accidents at work (from

1.3 in 2012 to 1.27 in 2013 (1)).

17.5.3 Beginning negotiations on health and safety at work

Negotiations have begun on the following themes:

the assessment and prevention processes implemented

in facilities;

the prevention of psycho-social risk;

the prevention of physical duress;

identifying, handling and preventing situations linked to

psychological and sexual harassment;

players in prevention: occupational health services,

prevention division, and social workers;

staff representative authorities: CHSCT and National

Commissions on Health and Safety at Work.

17.6 Players in HR support

17.6.1 Creation of 1,100 local HR managers

The creation of the local HR manager position is a

significant component of La Poste's development policy

regarding Quality of life at work. It is included in particular

in the framework agreement on Quality of life at work which

was signed on 22 January 2013.

Tasks of the local HR position cover two major dimensions:

local HR management directed towards operational

managers to help them facilitate social dialogue and

change management at local level. This requires strong

technical skills;

local HR relationship more oriented towards people,

which is specifically reflected by competent, trustworthy

general HR representatives being made available to

postal workers who are capable of addressing, at a high

level, all aspects of professional life while respecting

peoples' confidentiality and freedom of expression.

This second dimension calls for skills that are more

interpersonal, and specifically relies on adopting a

proactive stance.

(1) The indicators are those defined by the state health insurance fund. Lost-time accident frequency = number of lost-time accidents x 1,000,000/number

of hours worked Severity off accident at work = number of days compensated x 1,000/number of hours worked.


Employees General remuneration policy17

Around 1,100 local HR managers have been sent to all the

regions and to each of La Poste's Business Lines. Several

of the Group's subsidiaries have also retained this principle.

Each postal worker and each manager benefit from their

services.

The duties of local HR managers were defined and

formalized by the Group's Executive Committee in April

2013.

Four primary duties are shared among these HR managers,

regardless of the unit they are attached to:

providing information about and deal ing with

frequently asked questions pertaining to administrative

management;

providing information and giving advice about

professional development;

being a trusted advisor for employees experiencing a

difficult situation, regardless of whether it is professional

or personal;

support managers in ensuring the management and

professional development of team members.

To do this, they must meet with:

each manager within their scope at least twice per year;

each employee at least once every two years.

In 2013, a professionalisation programme for these HR

managers was launched in each Business Line. It was

completed at the cross-functional level with inter-

Business Line training sessions that began in November

2013 and will continue in 2014.

17.6.2 The HR role of managers

In order to assist and support new managers, in 2013, a

specific obligatory training program based on the HR role

of the manager was put in place. This training, which is

given before, or as at, the position start date, allows the

manager to:

know how to perform his/her role in supporting

employees, and in particular in supporting their

professional development;

support his/her group in the process of change;

know how to create individual and collective Quality of

life at work conditions within his/her team.

This training course, which lasts for two days, is mandatory,

and provides an opportunity for managers from all the

Business Lines and all management levels to meet and

mingle. 3,000 new managers will be trained each year. In

addition to the new manager training program, and in order

to support them during the first months after assuming

their new position, La Poste now systematically designates

an experienced contact for each new manager.

17.7 General remuneration policy

17.7.1 Wage policy

Special measures apply to state employees in the public

sector (points accumulation system).

For employees under contract, the remuneration policy

is set out in the Company agreement and through annual

pay negotiations. It must be adapted to the specific nature

of La Poste, which is a labour-intensive company whose

business is conducted individually or in small entities. This

makes service quality dependent upon the attitude of each

employee. In this sense, La Poste looks to secure a degree

of loyalty from its operational/production staff while keeping

its payroll costs necessarily competitive. The remuneration

policy primarily comprises an annual negotiated change as

well as a certain progression in years of service recognizing

the development of expertise in a job. It is supplemented

with promotion measures adding value to career paths

and changes. An additional sum for family expenses takes

into consideration the costs employees may incur as their

personal life develops. All of the combined elements allow

for motivating remuneration changes on a controlled scale.


Employees General remuneration policy 17

For managers, the remuneration policy includes individual

fixed pay increases based on the contribution made and

potential held, and variable awards based on annual

quantitative and qualitative targets. Sales staff (over

10,000 individuals) benefit from a commission scheme that is

appropriate for the sales policy, including in the banking area.

17.7.2 Profit-sharing

The incentive scheme in effect at La Poste since 2007 is

based on economic, quality of service and responsible

development results. A new incentive agreement was signed

in 2012, incentive-based pay is now directly proportional to

the Group's net profit/(loss) after taxes It is calculated based

on the profit (loss) after taxes of consolidated companies,

restated by the items defined in the agreement. There is

a standard payout for all postal workers regardless of the

Business Line to which they belong.

In 2013, an amendment to the incentive agreement was

signed. It provides for the integration of a CO2 emission

criterion among the indicators serving as the definition of

the amount distributed.

The incentive accentuates the efforts accomplished and

results in personnel working together for the company's

smooth operation and profits. These incentives amounted

to €73.6 million for the 2013 financial year.

Most subsidiaries have employee incentive agreements.

17.7.3 Group Savings Plan (PEG) and Collective Retirement Savings Plan (PERCO)

In December 2006, La Poste and five trade unions (CFDT,

CFTC, CGC, FO and UNSA) signed two company agreements

respectively instituting the Group Savings Plan (PEG) and

Collective Retirement Savings Plan (PERCO).

These savings plans are offered to all private-sector

employees and state employees of La Poste parent

company. Subsidiaries may decide whether to sign up for

the PEG and/or PERCO when they meet the enrolment

conditions established by the agreement (subsidiary in

which La Poste holds an interest of at least 50%, and where

the financial statements are consolidated). So far, eight

subsidiaries have done so, among the largest most notably

Mediapost, Poste Immo and Chronopost.

The range of investments available to postal workers—with

the PEG or PERCO—comprises five employee mutual

funds (FCPE) covering all asset classes: a money market

fund, bonds, two equity funds and a solidarity fund. A

very significant proportion of funds now comprises SRI

investments (Socially Responsible Investment). Therefore,

the FCPE, La Poste Responsable Monétaire, which

comprises nearly 40% of postal workers' investments, has

invested 52% in ISR, and ISR floor rates are applied for

bonds and equity funds.

In 2012, the Supervisory Board decided to change the

La Poste Responsable Actions 70 Solidaire FCPE: a new

organization, Habitat et Humanisme, currently benefits from

capital expenditure made under the solidarity pocket. This

capital expenditure is thus added to those made with the

Société d’Investissement France Active (SIFA).

La Banque Postale Asset Management (LBPAM) manages

these employee investment funds. In October 2012, and

upon the Supervisory Board's request, LBPAM established

an over-performance commission for four of the five

La Poste FCPEs. This Commission applies when the

performance of the FCPE surpasses its reference index.

The agreement provides for an additional contribution from

La Poste parent company. The amount of this top-up is

proportionate to the investments employees have made in

their respective plans:

for the PEG, the top-up amounts to 35% of contributions

up to €400, 25% for the next €400 and 15% for the

subsequent €8,400. The maximum top-up is therefore

€1,500 gross;

for the PERCO, it equals 33% of contributions up to a

maximum of €900 gross.

Subsidiaries signing up to the Group savings plan are free

to determine their own top-up policy.

There were over 72,300 members of one or both employee

savings plans (PEG and PERCO) as at 31 December 2013

at Le Groupe La Poste (the La Poste parent company and

the eight member subsidiaries), representing a 4% increase

between 2012 and 2013.


Employees Staff policy17

At the La Poste parent company, the number of PEG

amounted to 57,275 and the number of PERCO amounted to

22,340. As at 31 December 2013, the total amounts invested

in the various funds amounted to €463.5 million. Lastly,

for 2013, the matching contribution made by the parent

company amounted to €16.4 million.

The La Poste employee mutual funds Supervisory Board

comprises representatives of unit-holders and management

in equal numbers. The Board met three times in 2013.

La Poste has a pro-active training policy for appointed and

alternate members of the Supervisory Board. The training

structure, which was reviewed in 2012, was rolled out in the

form of (1) an induction model, which was offered to new

members of the Board of Directors in October 2013, in order

to help them to familiarize themselves with the financial and

technical products involved in financial management, and

(2) a "2013 News" module offered to all Board members

in November 2013, in order to improve their knowledge of

financial management, These modules are customized and

designed to meet the specific needs of the Supervisory Board

members.

17.7.4 Employee profit-sharing

For La Poste, Act No.2010-123 of 9 February 2010

(Article 12) amended the last paragraph of part III of

Article 32 of the Act of 2 July 1990, stating that title II of

book III of the French Employment Code (Employee profit-

sharing) may be extended to all La Poste staff (including

state employees) under conditions set out in the Council

of State decree.

The introduction of profit-sharing at La Poste remains

subject to the issuance of a decree (provision in the second

Sub-Paragraph of Article L. 3321-1 of the French Labour

Code, whereby “a Council of State decree specifies which

industrial and commercial public enterprises, companies,

business combinations or legal entities—regardless of their

legal status but where more than half of the share capital

is held directly by the French government—are subject

to the provisions of this title. This decree establishes the

conditions under which these provisions apply”).

Subsidiaries are required to operate profit-sharing

schemes.

17.8 Staff policy

17.8.1 Staff regulations

Having both state and private employees, La Poste tries

to apply common or at least comparable HR rules to each

group. This policy is essential as each part of the Company

has state employees and private-sector employees at the

same workstations.

Article 29 of the Act of 2 July 1990 states that La Poste’s

state employees are governed by specific regulations

pursuant to Act 83-634 of 13 July 1983 on the rights

and obligations of state employees and to Act 84-16 of

11 January 1984 on legal provisions relating to the French

public sector.

Article 31 of the Act of 2 July 1990 states that contractual

employment is subject to collective bargaining agreements.

Act 2010-123 of 9 February 2010 relating to La Poste as a

public company and to postal business, has not affected

pre-existing provisions on the status of staff.


Employees Staff policy 17

17.8.2 Social dialogue and staff representation

17.8.2.1 Institutions representing staff at La Poste (IRP)

La Poste’s IRP mostly come under public sector legislation,

with the exception of CHSCT, which in accordance with the

law, falls under the rules of the French Employment Code

since 16 November 2011.

La Poste’s conversion from public sector company into a

public limited company in 2010 did not affect the nature of

the IRP. Indeed, at a staff representation level, co-existence

of two categories of staff requires consistency throughout

the Company.

Individual staff representation

In terms of individual representation, the creation of joint

administration Committees (CAP) for state employees and

public contractual employees meant creating joint advisory

Committees for private-sector employees (CCP). Committee

members are elected every four years following the CAP

model.

Within the joint Committees, elected officials are called

upon to advise on individual circumstances relating to

mobility, assessment, disciplinary matters, promotion, etc.

Collective staff representation: Technical

Committees and CHSCT

The collective representative authorities are the Technical

Committees (CT) and the Committees on Hygiene, Health

and Safety at Work (CHSCT).

These authorities were implemented following the last

professional elections on 18 October 2011.

The staff representatives within the Technical Committees

(CT) review in-depth subjects such as the structure

and functioning of services, statutory rules, training,

professional skills and qualifications development,

professional equality, parity and anti-discrimination

measures. The direct election of staff representatives to CTs

confirms even more the legitimacy and the role of elected

representatives within a context of ongoing social dialogue

and improving employee relations at La Poste.

The appointment of representatives to the HSWCC was

based on the representative nature of the last WC elections,

which were organized as from 16 November 2011, in

accordance with Part IV of the French Labour Code and

Decree No.2011-619 of 31 May 2011 regarding health and

safety at work at La Poste (these rules apply to all La Poste

employees, regardless of whether they are state employees

or private employees).

As defined in the French Employment Code, La Poste's

Committees on hygiene, safety and working conditions are

tasked with:

helping to protect the physical and mental health

and safety of company workers, and of workers made

available to the company by an outside company;

helping to improve working conditions, primarily with a

view to encouraging women's access to all jobs, and to

dealing with maternity-related issues;

ensuring that all the legal obligations decided in these

areas have been complied with.

Professional elections

During the professional elections that took place

on 18 October 2011, postal workers elected their

representatives to the technical Committees (CT), joint

administration Committees (CAP) or Joint Advisory

Committees (CCP), pursuant to the law of 5 July 2010 on

the modernization of social dialogue in Public Service and

the decrees of 7 September 2011 on La Poste's CT and CAP

(Professional Ability Certificate) qualification.

The staff representatives on the CTs are elected for four

years by the entire staff of La Poste irrespective of their

status, and the representation of the trade unions is based

directly on the results of these elections to the CT at the

level concerned.

The next elections will take place in late 2014.



17.8.2.2 Quality of life at work agreement dated 22 January 2013

The “Quality of Life at Work” framework agreement aims

to significantly and sustainably improve work and life

conditions for all postal workers.

It constitutes the first stage for making La Poste an

exemplary company in work life and health. It engages

the entire company, in particular the Department heads

and managers whose responsibility is to pay attention

to the well-being of postal workers, as well as economic

performance and customer satisfaction on a daily basis.

This framework agreement reflects the quality of debates

and propositions put forward by professional associations

and by management and testifies to the wealth of social

dialogue in the company. It was signed by the trade union

organizations FO, CFDT, CGC-UNSA and CFTC.

The framework agreement makes precise and ground-

breaking commitments in terms of Quality of life at work and

defines ambitions and goals upon which the signing parties

mutually agree. In this regard, 17 immediate measures to

improve Quality of life at work have already been applied.

Therefore, the company has been trying out a new five

out of seven day work schedule to allow employees to

have two rest days in a week, while maintaining quality

of service and customer satisfaction.

Teleworking gave rise to an agreement on 25 June 2013,

signed by five of the six representative unions (FO, CFDT,

CGC-UNSA and CFTC).

An adjusted part-time system was created for senior

workers (state employees and private employees)

who perform jobs with harsh working conditions.

Furthermore, an adjusted part-time system is also open

to other categories of staff, in order to enable younger

postal workers who perform jobs under harsh working

conditions to change positions within the Company.

Meeting hours are supervised to allow for better work/

life balance.

The agreement also defines company rules regarding

project management applicable to all participants in

the social dialogue. Social dialogue and negotiation

on projects impacting the structure and operation of

services also include alternative scenarios introduced

by unions.

The agreement set up an original alarm system for

compliance with these social dialogue rules and

collective agreements.

The training of new managers prior to starting their

position is focused on social dialogue and the prevention

of professional risks.

In order to support and train new supervisors, as soon

as a manager is appointed to a new position, La Poste is

committed to systematically designating an experienced

contact to support the new manager during his/her first

six months and to be available in case of difficulties.

Local HR managers will be identified throughout the

company so that they can respond to managers as

well as postal workers precisely and quickly regarding

individual management or career advice.

La Poste has committed to recruiting 15,000 people

under permanent contracts over the 2012-2014 period.

Additionally, external recruitments will allow for

3,000 people having worked under a temporary contract

within La Poste to be recruited under a permanent

contract throughout the duration of the agreement. At

the same time, a system for seniority resumption that

is more favourable than the one provided for by law has

been put in place.

La Poste also commits to offering a career interview with

a specialized HR manager to each postal worker who

would like one, once he/she has held the same position

or duties for at least five years.

Access to the job market was given to all of the Group's

postal workers at the end of the first half of 2013.

It also defines the supplementary negotiations program on

the following subjects:

shared rules regarding structure, content, purpose and

working conditions;

setting up teleworking;

professional development, training and GPEC (workforce

management planning);

health and safety at work;

social dialogue;

creation of a Group body;

improvement of the executive staff policy;

HR function.

Other negotiations can be started at the unions' and the

Company management's request.

In addition to the opening of negotiations and the signing

of an agreement on teleworking on 25 June 2013, the

implementation of the "Quality of Life at Work" agreement

brought great improvements to the working conditions of

postal workers throughout 2013 on all the themes addressed

in the agreement: in particular access to training (see Section

17.3), health at work (see Section 17.5) and the reinforcement

of local support and HR support (see Section 17.6).


Employees Staff policy 17

17.8.2.3 Social dialogue bodies

For several years, La Poste and trade unions have been

aware that while staff representation bodies created as a

result of public sector law guaranteed workers’ individual

rights, changes needed to be made to employee relations

and the collective representation of these workers. Indeed,

the public sector body, the CT, is not suited to organizing

healthy social dialogue in a company having to compete

in all of its markets. It was on this basis that La Poste and

the trade unions signed an agreement on 21 June 2004

covering the principles and methods of social dialogue.

This agreement also establishes employee relations and

negotiating bodies not required under public sector laws:

La Poste’s strategy exchange Committee (CESP) and

employee relations Committee (CDSP). These bodies were

enshrined in the Act of 20 May 2005.

On 22 December 2011, within the framework of

strengthening its social dialogue, Le Groupe La Poste

established a forum for social dialogue and information

for the Group called the “Commission d’Échange sur la

Stratégie du Groupe La Poste” (Exchange Commission on

the Strategy of Le Groupe La Poste, or CESG). This new

body complements the existing forums for information

and consultation at the national level, including the CESP

and the CDSP.

A negotiation provided for by the agreement of

22 January 2013 aims to change the CESG to one Group

body in 2014.

17.8.3 Pension plan

La Poste employees are each placed in a general law plan

corresponding to their legal status: civil pension plan for

state employees and a general plan for regular employees.

La Poste does not have its own special plan.

Regarding the state employees’ pension funding, Act

No. 2006-1771 of 30 December 2006 established a full

discharge contribution system for La Poste giving them

a full discharge of all liabilities. Under the competitively

fair rate principle, the rate of this payment is “calculated

in such a way as to equalize the levels of wage-related

social security and tax charges between La Poste and

other companies coming under the ordinary social security

arrangements, applying this principle to risks common to

private-sector employees and state employees”.

Only the competitively fair rate has applied since 2010.

17.8.4 Supplementary health insurance

A supplementary personal risk scheme that takes care of

health care costs has been in effect since 2007 for salaried

staff. This plan appeared as a significant instrument to

improve the staff's living standards, notably through a

contribution system that organizes solidarity over the entire

plan to families and low-income earners. The follow-up of

this plan with trade union organizations is also a special

occasion of social dialogue, allowing for positive decisions to

be made jointly, within an appropriate financial framework.

Employees receive regular communication on the situation

and changes to the plan, which highlights the role of union

signatories.

In the case of employees who are state employees, a

health care cost repayment scheme has been in operation

since 1 January 2012, as part of the opportunity afforded

by the Act of 9 February 2010 (French Act No.2010-123 of

9 February 2010 on the La Poste public sector company

and postal business activities). An agreement was signed on

7 July 2011. This is a mandatory defined contribution group

plan, governed by the private social security law (Article

L. 911-1 of the French Social Security Code).

The positive results achieved by the two health care cost

repayment schemes have enabled a higher level of coverage

as from 1 October 2013.



17.8.5 Management of social activities

Management of social activities at La Poste is specifically

run by the Conseil d’orientation et de gestion des activités

sociales (Advisory and Social Activities Management

Council—COGAS). COGAS has 24 members comprising

Company representatives (eight), unions (eight) and national

associations (eight, with two representatives for each of the

four sectors covered: personal risk and solidarity, sports

and leisure, culture, catering and economic activities). It is

chaired by the Chairman of La Poste or his representative.

Following the staff elections on 18 October 2011, the seats

assigned to the unions were as follows: two for the CGT

trade union, two for the SUD trade union, two for the FO

trade union, one for the CFDT trade union, and one for the

CGC/UNSA trade union. This representation also applies

to the local branches of COGAS, the local steering and

coordination Committees (CTPC).

Starting from July 2013, all of the social assistance that was

primarily reserved for permanent staff was gradually made

available to temporary contract employees with more than

three months' service.

The 2013 budget amounted to nearly €212.6 million and

was primarily allocated to catering, sporting and cultural

activities, children and personal risk and social solidarity.

The catering offering, which includes cafeterias and

luncheon vouchers (67,265 beneficiaries), accounted for

44.1% of the total budget. Cafeteria provision is a means of

promoting the National Healthy Food Plan. Furthermore,

in 2011, the COGAS declared a new policy in order to

improve catering offerings. It adapts meal production and

delivery methods to the size and employees of the postal

facilities, to the organization and work schedules and to

the expectations of staff in this area. Support for children

and youth was the second largest item in the budget, and

amounted to 21.8% in 2013. It involves childcare assistance

delivered via childcare providers, nurseries or outdoor

centres, and financial support for stays at holiday camps.

The third largest budget item was allocated to cultural

and sporting activities, and amounted to 20.3% of the total

budget. It covers two aspects:

direct financial support to encourage practice of a sport

and access to cultural or leisure events;

subsidies to associations working in these areas so that

their rates are affordable for all postal workers.

Mutual aid and social solidarity programs make up the

fourth item, and accounted for 7.5% of the budget. These

programs involve support for families with disabled

children, the severely ill, staff suffering from alcoholism,

blood donors, first-aid providers and disabled persons.

La Poste has also developed individual social action services

under its company policy, including holiday vouchers (42,500

recipients in 2013), study grants, and prepaid service checks

(CESU).

BREAKDOWN OF SPENDING ON SOCIAL ACTIVITIES

(€ million) 2013 in % 2012

Catering and economic sector 93.91 44.1 90.38

Of which paid directly to employees 29.95 14.1 26.10

Sporting and cultural activities 43.09 20.3 43.38

Children 46.28 21.8 45.61

Personal protection and solidarity 15.94 7.5 15.82

Management and structural costs 13.36 6.3 14.54

Total 212,58 209.73

Average amount per postal worker (in euros) 1,011 996


Employees Summary of employee information 17

17.9 Employee shareholding

The second line of Paragraph III of Article 32 of the 1990 Act

states that restricted capital increases or sales of reserved

shares may be carried out through one or more corporate

mutual investment funds, in accordance with Articles

L. 3332-18 et seq. of the French Labour Code, subject to

compliance with any provisions relating to the Company’s

valuation.

Employees of La Poste and its subsidiaries, as well as their

assignees, may not hold more than a minority stake in

La Poste's share capital.

17.10 Summary of employee information

17.10.1 Distribution of Group employees in France

TOTAL INDIVIDUAL STAFF MEMBERS AS AT 31 DECEMBER

2013 2012

La Poste parent company 238,699 243,172

La Banque Postale 3,619 3,126

Sofipost 19,897 19,581

GeoPost 5,531 5,492

Poste Immo 638 644

Others 124 121

Total 268,508 272,136


Employees Summary of employee information17

17.10.2 Summary of Group employee information in France

2013 2012

Staff

Total staff as at 31 December (individuals) 268,508 272,136

Number of state employees and permanent contract employees 250,436 254,962

Number of temporary contracts 18,072 17,174

% men 49.7% 50.0%

% women 50.3% 50.0%

Average number of employees (full-time employee equivalents per annum) 243,242 245,380

% executives 22.2% 21.7%

% employees 77.8% 78.3%

Part-time workers on permanent employees

Number 34,396 35,191

% of total staff (state employees and permanent contract employees) 13.7% 13.8%

Recruitments

Number of recruits on permanent contracts 8,936 10,248

Training

Number of employees taking at least one course 173,199 130,817


Employees Summary of employee information 17

17.10.3 Summary of employee information for La Poste parent company

2013 2012

Staff

Total staff as at 31 December (individuals) 238,699 243,172

Number of state employees 115,491 122,493

Number of permanent contracts 106,296 104,188

Number of temporary contracts 16,912 16,491

% men 48.5% 48.8%

% women 51.5% 51.2%

Average number of employees (full-time employee equivalents per annum) 218,941 221,657

Part-time workers on permanent employees

Number 23,715 25,438

% of total staff 10.7% 11.2%

Number of paid overtime hours 2,506,114 4,571,137

Outside workers

Agency staff (full-time employee equivalents per annum) 2,932 2,867

Recruitments

Number of recruits on permanent contracts 5,298 5,211

% men 50.9% 52.7%

% women 49.1% 47.3%

Number of recruits aged under 25 1,814 1,913

Remuneration

Average gross monthly remuneration in euros 2,384 2,341

Collective incentives for 2013 (€ million) 73,6 94,3

Absenteeism

Rate of absence for sickness 6.14% 6%

Professional relations

Number of national agreements signed 7 5

Health and safety conditions (a)

Frequency of accidents at work with time off 25.2 26.42

Severity of accidents at work with time off 1.27 1.3

Training

Training expenditure as a percentage of payroll 3.63% 3.6%

Number of employees taking at least one course 163,822 NA

Number of work experience days 731,543 590,000

Social activities

Spending on social activities (€ million) 212,579 209,737

(a) The indicators are those defined by the French National Health Insurance Fund.

Frequency of accidents at work with time off = number of accidents with time off x 1,000,000 / number of hours worked.

Severity of accidents at work with time off = number of paid days off x 1,000 / number of hours worked.


18

18.1 Shareholders 232

18.2 Control of La Poste 232

18.3 Known agreement that could lead to a change of control 232

Principal shareholders


Principal shareholders Shareholders18

18.1 Shareholders

The French government and Caisse des Dépôts et Consignations hold all share capital and voting rights in La Poste.

There are no legal or statutory provisions that provide for the award of different voting rights to shareholders.

Shareholder

2013 2012

No. of shares% share

capital% voting

rights No. of shares% share

capital% voting

rights

French government 700,000,000 73.7% 73.7% 655,555,556 77.1% 77.1%

CDC 250,000,000 26.3% 26.3% 194,444,444 22.9% 22.9%

Total 950,000,000 100% 100% 850,000,000 100% 100%

Shareholdings presented as at 31 December 2013 relate

to the position after the €2.7 billion capital increase was

finalized, which is described in Chapter 21 (Section 21.1.7)

and paid in three instalments (April 2011, April 2012 and

April 2013).

18.2 Control of La Poste

Article 1 of Act No.2010-123 of 9 February 2010 provides

that the share capital of La Poste shall be held by the

French government and by other public sector legal entities,

except for the portion that may be held under employee

shareholding arrangements.

In accordance with the provisions of this Article, the share

capital is held by the French government—the majority

shareholder—and by Caisse des Dépôts et Consignations.

The Company does not feel there is any risk of control being

exercised improperly.

18.3 Known agreement that could lead to a change

of control

None.


19

19.1 Relations with the French government and public sector companies 234

19.2 Relations with consolidated companies 235

Related-party transactions


19Related-party transactions Relations with the French government and public sector companies

Related-party transactions are described in Note 35 to the consolidated financial statements, including relations with

the French government and transactions with CNP Assurances, which is the only significant entity within the scope of

consolidation. A commercial partnership has been agreed to between CNP Assurances and La Banque Postale (see

Chapter 5—Section 5.1.3), generating business transactions described in Note 35 to the consolidated financial statements.

19.1 Relations with the French government and public

sector companies

19.1.1 Relations with the French government

Since the 10 February 2010 Act reaffirming the provisions

of the July 1990 Act on the restructuring of the postal and

telecommunications public service, Le Groupe La Poste has

been public limited company overseen by the Minister for

Industry under the Minister for the Economy, Industry and

Employment, and subject to economic and financial control

by the French government, and the control procedures of

the French Court of Auditors and the French Parliament.

Relations between La Poste and the French government

are contracted out under business contracts. The latest

agreement to date, for the period between 2013 and 2017,

was signed by all the stakeholders on 1 July 2013. This

agreement is characterized by:

maintaining the public service missions entrusted to

La Poste: the Universal Postal Service, press transport

and delivery, banking accessibility and regional planning,

and maintaining the principle of offsetting costs for the

latter three missions;

progress in strengthening quality of service;

missions adapted to users' expectat ions and

technological advances;

the implementat ion of corporate c i t i zenship

undertakings in favour of the development of regions and

companies, the most disadvantaged members of society,

the development of the digital society and corporate

social responsibility initiatives.

The French Postal Regulation Act of 20 May 2005 granted

ARCEP the power to regulate the Universal Postal Service's

rates on a multi-year basis, after reviewing La Poste’s

proposals. In addition, this Act confirmed and clarified

La Poste’s regional planning responsibilities.

Regarding the Group’s Banking activities, the French

government sets the commission rates on regulated

savings products: Livret A passbook savings accounts,

Sustainable Development savings accounts and Popular

savings accounts. The change in these rates has a direct

impact on La Banque Postale’s Net Banking Income.

In March 2012, La Banque Postale, Caisse des Dépôts,

Dexia SA and the French government established the

foundation of the new system for local authorities financing

(see Section 19.1.2).

On 16 January 2014, the French government, La Poste, and

the French Mayors’ Association signed a new local postal

coverage agreement [see Chapter 5, Section 5.3.2.2], for a

period of two years (2014-2016).

19.1.2 Relations with Caisse des Dépôts et Consignations

The French Postal Act amended by the Act of 9 February

2010 provides that the share capital of La Poste may only be

held by the French government and by other publicly owned

legal entities, except for the portion that may be held under

employee shareholding arrangements.

In this context, Caisse des Dépôts et Consignations, a

public sector company governed by Articles L. 518-2 et seq.

of the French Monetary and Financial Code, invested in

the share capital of La Poste following the Extraordinary

General Meeting on 6 April 2011, which decided La Poste’s

€2.7 billion capital increase. Caisse des Dépôts et

Consignations has committed to subscribe to this capital

increase, contributing €1.5 billion (see Chapter 21).


Related-party transactions Relations with consolidated companies 19

In its decision of 22 February 2011, the French Competition

Authority authorized the transaction, considering that, given

the small increase in market share and the existence of

numerous competitors, the deal could not adversely affect

competition in the relevant markets.

Caisse des Dépôts et Consignat ions has three

representat ives on the Board of Directors, has

representation in each of the Board Committees of the

Board of Directors and proposes the Chairman of the Audit

Committee.

Caisse des Dépôts et Consignations and La Banque

Postale are jointly shareholders in CNP Assurances via the

Sopassure holding company (see Chapter 5.1.3).

As part of financing local authorities, La Banque Postale

has committed to market loans to local authorities and

hospitals. La Banque Postale and Caisse des Dépôts

founded La Banque Postale Collectivités Locales, in which

La Banque Postale and Caisse des Dépôts have respective

interests of 65% and 35%, on 27 March 2013. This subsidiary

provides services relating to the marketing of loans, which

are then refinanced by Société de Financement Local

(SFIL), a company created on 23 January 2013, in which

La Banque Postale (5%) and Caisse des Dépôts (20%) are

also shareholders.

19.1.3 Relations with public sector companies

Le Groupe La Poste enters into transactions with public

sector companies in the normal course of its business. They

are entered into on market conditions.

In 2013, the Supervisory Board of La Banque Postale and

the Board of Directors of La Poste authorized La Banque

Postale to acquire a portion of the share capital of SOFIAP

(Société Financière pour I'Accession à la Propriété), which

was previously owned by Crédit Immobilier de France (51%)

and SNCF (49%). SOFIAP is a credit institution that primarily

aims to offer home loans to employees of SNCF, the French

railways operator.

19.2 Relations with consolidated companies

19.2.1 Relations with fully consolidated Group companies

With some of its subsidiaries, La Poste has signed

framework agreements, support agreements and service

contracts (marketing, BPO, IT services, real estate services,

finance, etc.). Specifically, La Poste is the main service

provider for La Banque Postale, which uses La Poste to

run its front-office (Retail Brand post offices) and back-

office (financial centres) operations. La Banque Postale is

La Poste’s main banker.

Furthermore, treasury agreements have been implemented

between La Poste and most of its subsidiaries (excluding

La Banque Postale).

19.2.2 Relations with associated companies

Transactions with associated companies primarily relate to CNP Assurances with which La Banque Postale has signed a

commercial partnership agreement.


20

20.1 Consolidated financial statements 238

20.2 Separate financial statements 379

20.3 Dividend distribution policy 426

20.4 Legal and arbitration proceedings 426

20.5 Material change in the Company’s financial or commercial position 426

Financial information regarding

the assets and liabilities, financial

position and results of the issuer


Financial information regarding the assets and liabilities, financial position and results of the issuerConsolidated financial statements

fi

20

The amounts shown in the tables are generally provided in millions of euros. Rounding may on occasion result in slight

differences in totals or changes.

20.1 Consolidated financial statements

20.1.1 Consolidated financial statements for the year ended 31 December 2013

Consolidated income statement

(€ million) Note 2013 2012

Mail revenue 10,461 10,774

Express revenue 4,379 4,016

Parcels revenue 1,567 1,522

La Poste Retail Brand revenue 92 88

Real estate revenue 62 41

Revenues from commercial activities 6 16,562 16,441

Banking operating revenue 8,248 8,815

Banking operating expenses (2,726) (3,597)

Net Banking Income 7 5,522 5,217

Operating revenue 22,084 21,658

Purchases and other expenses 8 (7,362) (7,108)

Personnel expenses 9 (12,524) (12,599)

Taxes and levies 10 (236) (235)

Depreciation, amortisation, provisions and impairment 11 (1,306) (1,175)

Other operating revenue and expenses 12 130 224

Proceeds from asset disposals (16) 52

Net operating expenses (21,314) (20,842)

Operating profit/(loss) 770 816

Cost of net financial debt (198) (221)

Other financial items (25) (63)

Financial profit/(loss) 13 (223) (284)

Profit before tax of consolidated companies 548 532

Income tax 14 (127) (231)

Share in profits of equity associates 215 180

Consolidated net profit/(loss) 635 481

Net profit/(loss), Group share 627 479

Attributable to non-controlling interests 8 2


Financial information regarding the assets and liabilities, financial position and results of the issuer

Consolidated financial statements

es, ernts 20

Consolidated comprehensive income statement

Amounts after tax(€ million) 2013

2012

Restated (a) As reported

Consolidated net profit/(loss) 635 481 481

Comprehensive income and expenses recognised under equity

Recyclable items

Change in unrealised gains and losses on financial instruments 32 216 216

Of which transferred to net profit/(loss) for the year 38 38

Translation adjustments (31) 7 7

Of which transferred to net profit/(loss) for the year

Share in comprehensive income and expenses posted of equity associates (22) 198 198

Of which:

change in unrealised gains and losses on financial instruments—CNP 26 220 220

other unrealised gains and losses on financial instruments (4) 1 1

cumulative translation adjustments (44) (23) (23)

Non recyclable items

Actuarial adjustments on employee benefits 27 (154)

Comprehensive income and expenses recognised in equity (after tax) 6 267 421

Comprehensive income 642 748 902

Net profit/(loss), Group share 633 746 900

Comprehensive income attributable to non-controlling interests 8 2 2

(a) See Note 2.1.A.



fi

20

Consolidated balance sheet

ASSETS

(€ million) Note 31/12/2013 31/12/2012

Goodwill 15 1,587 1,562

Intangible assets 16 816 825

Tangible assets 17 5,941 6,062

Investments in equity associates 18 2,634 2,446

Other non-current financial assets 19 942 894

Deferred tax assets 14 153 113

Non-current assets 12,073 11,903

Current banking assets

Customer receivables and loans 20.1 59,204 49,922

Receivables from credit institutions 20.2 82,894 81,254

Securities portfolio 20.3 49,784 54,281

Other current financial assets 20.4 1,200 1,305

Accruals 20.5 1,185 2,387

Cash and central bank deposits 23.2 1,570 2,726

Other current assets

Inventories and work-in-progress 21 136 203

Trade and other receivables 22 2,936 2,453

Other current financial assets 19 430 781

Cash held at post offices 612 719

Income tax credit 253 211

Other accruals—Assets 118 126

Cash and cash equivalents 23 2,163 2,167

Assets held for sale 24 120 104

Current assets 202,604 198,641

Total assets 214,677 210,544




es, ernts 20

LIABILITIES

(€ million) Note 31/12/2013

31/12/2012

Restated (a) As reported

Share capital 25 3,800 3,400 3,400

Issue premium 900 700 700

Reserves 2,698 2,357 2,355

Unrealised gains and losses on financial instruments 635 581 581

Actuarial adjustments on employee benefits (80) (110)

Cumulative translation adjustments (120) (45) (45)

Net profit/(loss), Group share 627 479 479

Equity, Group share 8,460 7,362 7,470

Non-controlling interests 57 65 65

Consolidated equity 8,516 7,427 7,535

Medium and long-term bonds and other financial debt 27 6,043 6,085 6,085

Employee benefits—non-current liabilities 29 1,685 1,821 1,713

Non-current provisions for contingencies and losses 26 80 90 90

Deferred tax liabilities 14 166 142 142

Non-current liabilities 7,976 8,140 8,032

Current provisions for contingencies and losses

Specific provisions for the Insurance and Banking activities 26 1,126 1,005 1,005

Current provisions for contingencies and losses 26 540 385 385

Short-term bonds and other financial debt 27 1,060 1,567 1,567

Current banking liabilities

Liabilities to credit institutions 30.1 14,757 15,811 15,811

Liabilities to customers 30.2 166,583 160,393 160,393

Debt evidenced by a certificate and other financial liabilities 30.3 6,790 7,185 7,185

Accruals 20.5 2,003 3,493 3,493

Other current liabilities

Trade and other payables 31 4,424 4,349 4,349

Government—Income tax 33 16 16

Employee benefits—current liabilities 29 663 617 617

Other accruals—Liabilities 207 154 154

Liabilities held for sale 24

Current liabilities 198,185 194,977 194,977

Total liabilities 214,677 210,544 210,544(a) See Note 2.1.A.



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Changes in consolidated equity 2013

Amounts after tax(€ million)

Share capital

Issue premium

Unal-located profit/(loss)

Cumu-lative

translation adjust-ments

Unrealised gains and losses on financial

instruments —CNP

Other unrealised

gains and losses on financial

instruments

Actuarial adjust-

ments on employee benefits (a)

Other reserves

Total, Group share

Non-controlling

interests Total

Consolidated equity as at 31/12/2012 (as reported) 3,400 700 479 (45) 392 189 - 2,355 7,470 65 7,535

Application of IAS 19 Revised (a) (110) 2 (108) (108)

Consolidated equity as at 31/12/2012 (restated) 3,400 700 479 (45) 392 189 (110) 2,357 7,362 65 7,427

La Poste capital increase (b) 400 200 600 600

Dividend payments (171) (171) (7) (178)

Call options on non-controlling

interests 67 67 (1) 66

Purchase of non-controlling

interests (43) (43) (6) (49)

Appropriation of 2012 earnings (308) 308 - - -

Comprehensive income

for the year 627 (75) 26 28 27 - 633 8 642

Of which:

Net profit 627 627 8 635

Other comprehensive

income (75) 26 28 27 - 6 - 6

Other 2 9 12 (3) 8

Consolidated equity as at 31/12/2013 3,800 900 627 (120) 418 217 (80) 2,698 8,460 57 8,516

(a) See Note 2.1.A.

(b) See Note 1.1.




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Changes in consolidated equity 2012

Amounts after tax(€ million)

Share capital

Issue premium

Unal-located profit/(loss)

Cumu-lative

translation adjust-ments

Unrealised gains and losses on financial

instru-ments—

CNP

Other unrealised

gains and losses on financial

instruments

Actuarial adjust-

ments on employee benefits (a)

Other reserves

Total, Group share

Non-controlling

interests Total

Consolidated equity as at 31/12/2011 (as reported) 3,400 700 478 (29) 171 (29) 2,093 6,783 3 6,786

First application of IAS 19 Revised (a) 46 46 46

Consolidated equity as at 31/12/2011 (restated) 3,400 700 478 (29) 171 (29) 46 2,093 6,829 3 6,832

Dividend payments (144) (144) (6) (151)

Call options on non-controlling

interests (24) (24) (6) (31)

Purchase of non-controlling

interests (28) (28) (28)

Appropriation of 2011 earnings (333) 333 - -

Comprehensive income

for the year 479 (16) 221 216 (154) 746 2 748

Of which:

Net profit 479 479 2 481

Other comprehensive income (16) 221 216 (154) 267 267

Other (b) 2 (2) (16) (16) 73 57

Consolidated equity as at 31/12/2012 (restated) 3,400 700 479 (45) 392 189 (110) 2,357 7,362 65 7,427

Consolidated equity as at 31/12/2012 (as reported) 3,400 700 479 (45) 392 189 2,355 7,470 65 7,535

(a) See Note 2.1.A.

(b) Including a variation in non-controlling interests linked to the change in consolidation method of Seur SA of €50 million.



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Consolidated cash flow statement

2013 2012

(€ million) Note GroupNon-

bankingLa Banque

Postale GroupNon-

bankingLa Banque

Postale

Gross Operating Profit 2,149 824 1,325 2,117 915 1,202

Change in provisions for current assets

and unrecoverable receivables (192) (28) (164) (181) (28) (153)

Miscellaneous financial income and expenses 5 5 0 3 3

Cash flows from operating activities before cost of net debt and taxes 38.1 1,962 801 1,162 1,939 890 1,049

Change in working capital requirement 38.3 12 36 (24) 136 161 (25)

Change in cash held at post offices 108 108 (88) (88)

CICE tax credit for the period (excluding provisions) (255) (253) (2)

Change in balance of banking sources and uses 38.4 (2,149) (2,149) (281) (281)

Taxes paid (141) 97 (238) (138) 40 (177)

Dividends paid by La Banque Postale to La Poste 258 (258) 186 (186)

Dividends received from equity associates 9 9 (0) 7 8 (0)

Cash flows from operating activities (454) 1,056 (1,509) 1,575 1,195 379

Purchase of intangible and tangible assets 38.5 (997) (837) (160) (1,065) (864) (201)

Purchase of financial assets (27) (26) (1) (38) (35) (3)

Issue of subordinated notes by La Banque Postale (800) 800

Proceeds from the disposal of tangible and intangible assets 132 125 7 234 234 0

Proceeds from disposals of financial assets 28 27 1 19 18 0

Impact of changes in consolidation scope (163) (50) (113) (82) (82)

Change in financial assets held for investment purposes 157 157 (148) (148)

Cash flows from investing activities (869) (1,403) 534 (1,079) (876) (203)

Capital increase (b) 600 600 0 1,053 1,053 (0)

Dividends paid (178) (175) (3) (151) (148) (3)

Interest paid (172) (172) 0 (164) (164) 0

Proceeds from new borrowings 38.6 402 402 752 752

Repayment of borrowings 38.7 (759) (759) (698) (698)

Purchase of non-controlling interests (53) (9) (45)

Other cash flows from financing activities 38.8 (97) (97) 63 63

Intra-group flows 557 (557) (159) 159

Cash flows from financing activities (256) 348 (605) 855 700 155

Decrease (increase) in cash and cash equivalents from Banking

activities before impact of changes in consolidation scope 38.9 1,580 1,580 (331) (331)

Impact of changes in exchange rates (5) (5) 2 2

Change in cash and cash equivalents (a) (4) (4) (0) 1,022 1,022 0

Opening cash and cash equivalents (b) 2,167 2,167 1,146 1,146

Closing cash and cash equivalents (b) 2,163 2,163 2,167 2,167

(a) Excluding cash held at post offices.

(b) Of which €600 million received in 2013 and €1,050 million received in 2012 in relation to La Poste’s capital increase decided in April 2011.




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General items 248

Note 1 Significant events during the financial year 248Note 2 Basis of preparation for the consolidated financial statements 249Note 3 Accounting Rules and Policies 251Note 4 Changes in the consolidation scope 266Note 5 Segment reporting 267

Notes to the income statement 273

Note 6 Revenues 273Note 7 Net banking income 275Note 8 Purchases and other external expenses 275Note 9 Personnel expenses and headcount 276Note 10 Taxes and levies 277Note 11 Depreciation, amortisation, provisions and impairment 277Note 12 Other operating revenue and expenses 278Note 13 Financial profit/(loss) 278Note 14 Income tax 279

Notes to the balance sheet 283

Note 15 Goodwill 283Note 16 Intangible assets 286Note 17 Tangible assets 287Note 18 Equity associates 288Note 19 Other financial assets 289Note 20 Banking activities financial assets 291Note 21 Inventories and work-in-progress 294Note 22 Trade and other receivables 294Note 23 Cash and cash equivalents 295Note 24 Assets and liabilities held for sale 295Note 25 Share capital 296Note 26 Provisions for contingencies and losses 297Note 27 Bonds and other financial debt 299Note 28 Net debt 304Note 29 Employee benefits 305Note 30 Banking activities financial liabilities 312Note 31 Trade and other payables 314

Notes to the consolidated financial statements




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Additional information 315

Note 32 Information on risks excluding Banking activities 315Note 33 Information on risks relating to Banking activities 317Note 34 Additional information on financial instruments 344Note 35 Related party transactions 357Note 36 Off-balance sheet commitments and contingent liabilities 358Note 37 Banking activities balance sheet 363Note 38 Notes to the consolidated cash flow statement 365Note 39 Fees paid to the Statutory Auditors 368Note 40 Post-balance sheet events 368Note 41 Scope of consolidation 369



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General items

NOTE 1 Significant events during the financial year

1.1 La Poste capital increase of €600 million

1.2 Implementation of a Tax Credit to promote Competitiveness and Employment (CICE)

1.3 Reclassification of held to maturity investments

1.4 Buyback of non-controlling interests from La Banque Postale Gestion Privée

1.5 Financing of local authorities

1.1 La Poste capital increase of €600 million

In accordance with the decisions of the Extraordinary

General Meeting on 6 April 2011, relating to the La Poste

capital increase, the French government and Caisse des

Dépôts exercised the 350 million equity warrants they were

holding in April 2013, which resulted in the issuance of

100 million new shares at a unit price of €6, €2 of which

was an issue premium.

Following this transaction, La Poste's share capital rose to

€3.8 billion, and the "issue premium" entry to €900 million.

1.2 Implementation of a Tax Credit to promote Competitiveness and Employment (CICE)

The amending finance law for 2012 dated 29 December 2012

established a Tax Credit to promote Competitiveness and

Employment (CICE) as at 1 January 2013. This tax credit

amounts to 4% of the remuneration paid that is less than

2.5 times the French minimum wage (SMIC) in 2013. This

rate will go up to 6% as at 1 January 2014. This tax credit

is recognised as a deduction for payroll expenses in the

Group's accounts.

A tax credit is recognised in income for personnel expenses

during the year, including the personnel expenses payable

(i.e. income of €255 million). A tax credit is also recognised

based on employee provisions (i.e. income of €42 million

in 2013).

In all, the CICE income for the year totalled €297 million.

Given their extremely long-term nature, no tax credit has

been taken into account for evaluating post-employment

benefits.

1.3 Reclassification of held-to-maturity investments

The amount of La Banque Postale's exposure to countries

receiving aid via the support plan is down compared to

31 December 2012. Most of these securities remain in held-

to-maturity portfolios and are therefore subject to disposal

based on redemptions.

Nevertheless, as part of its policy to diversify its exposures,

La Banque Postale has modified its intention to hold

a portion of its exposures from these countries until

maturity. Within this context, and in accordance with IFRS

standards on change of management intent for portfolios

of an exceptional nature that remain below the materiality

threshold, La Banque Postale reclassified €1.8 billion in

held-to-maturity investments to available-for-sale financial

assets. A portion of these downgraded investments have

since been sold for a nominal amount of €1.1 billion.

Impacts from the reclassification are presented in

Note 33.7.3.

1.4 Buyback of non-controlling interests from La Banque Postale Gestion Privée

In accordance with the terms of the partnership protocol

that was signed in 2007 between La Banque Postale and

Oddo et Cie as part of their joint subsidiary, La Banque

Postale Gestion Privée (LBPGP), in September 2012,

La Banque Postale had announced its decision not to renew

this partnership when it reached the end of its term.

The 49% equity investment in La Banque Postale Gestion

Privée held by Oddo & Cie was acquired on 27 June 2013,

at the end of an arbitration proceeding which determined

the acquisition price.




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1.5 Financing of local authorities

La Banque Postale Collectivités Locales was formed

during the first half of 2013. La Banque Postale holds a

65% interest in this company, while Caisse des Dépôts

holds 35%. This subsidiary will provide services related

to marketing the credits granted by La Banque Postale

to the local authorities and hospitals. La Banque Postale

Collectivités Locales will have intermediary status in bank

transactions. This company's business activity did not have

a significant impact as at 31 December 2013.

NOTE 2 Basis of preparation for the consolidated financial statements

2.1 Accounting guidelines

2.2 Valuation basis and use of estimates

La Poste, the parent company of Le Groupe La Poste

(“Le Groupe La Poste” or “the Group”) has been a public

limited company since 1 March 2010, and has its head office

at 44, boulevard de Vaugirard in Paris. It had previously

been an independent state-owned entity, which was already

subject to the same financial management and accounting

rules as commercial businesses.

The consolidated financial statements of Le Groupe

La Poste for the year ended 31 December 2013 were signed

off by the Board of Directors (meeting on 20 February 2014),

and the General Shareholders’ Meeting will be asked to

approve them.

2.1 Accounting guidelines

Pursuant to European Regulation No.1606/2002 of 19 July

2002, the consolidated financial statements of Le Groupe

La Poste for the year ended 31 December 2013 were

prepared in accordance with international financial

reporting standards (IFRS) as adopted by the European

Union These standards are available on the website of the

European Commission (ec.europa.eu/internal_market/

accounting/ias/index_fr.htm).

The accounting principles applied as at 31 December 2013

are unchanged from those applied as at 31 December 2012,

except for the items described in Point A below.

A. Standards and application interpretations that are mandatory for the first time in 2013

IAS 19 (revised in 2011)—Employee benefits

Revised standard IAS 19 introduces several changes to the

accounting principles on employee benefits.

The main impact for Le Groupe La Poste is the elimination

of the "corridor method" in recognising actuarial gains

(losses) on post-employment benefits. The application of

the revised standard IAS 19 has led to recognising actuarial

gains (losses) in other comprehensive income items, which

were until then not recognised. Unrecognised actuarial

gains (losses) totalled -€108 million as at 31 December

2012 and +€46 million as at 31 December 2011. The

actuarial differences generated during the financial year

are from now on recognised in other comprehensive income

items.

The other modifications that were introduced by revised

standard IAS 19 either did not impact, or only slightly

impacted the Group's f inancial statements as at

31 December 2013.

IFRS 13—Fair Value Measurement

This standard did not have a significant impact on fair value

measurement as at 31 December 2013.

Amendments to IFRS 7—Disclosures: Offsetting financial

assets and financial liabilities

The disclosures on financial assets and liabilities offsetting

are provided in Note 34.6.

Amendments to IAS 1—Presentation of other

comprehensive income items

In the context of the table on other comprehensive income

items, this text enables a distinction to be made between

recyclable items in net profit / (loss) and non-recyclable

items.

Amendments to IAS 12—Recovery of underlying assets

This text did not have a significant impact on the Group's

financial statements as at 31 December 2013.

2009-2011 Annual improvements

This text did not have a significant impact on the Group's

financial statements as at 31 December 2013.



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IFRIC 20—Stripping costs in the production phase

of a surface mine

This text did not have any impact on the Group's financial

statements as at 31 December 2013.

B. Standards and application interpretations that will be mandatory after 31 December 2013 and that were not applied in advance

Le Groupe La Poste did not apply the following standards

and interpretations, where the application date is after

31 December 2013, in advance:

IFRS 10—Consolidated financial statements, IFRS 11—

Joint arrangements, and IFRS 12—Disclosure of

interests in other entities

IAS 27—Separate Financial Statements

IAS 28—Investments in associates and Joint ventures

The potential impact of the application of these standards

is under review.

Moreover, the potential impact of IFRS 9—Financial

instruments, currently being prepared by the IASB, will be

analysed after its full and definitive publication.

C. Reminder of the exemptions to the retrospective application of IFRS retained on first application of IFRS

As a first-time adopter on 1 January 2006, Le Groupe

La Poste had applied the following exemptions provided for

by IFRS 1—First-time Adoption of International Financial

Reporting standards as at that date:

business combinations prior to 1 January 2006 were not

restated;

the cumulative amount of translation adjustments as

at 1 January 2006 was reclassified under consolidated

reserves, while the equity amount remained unchanged;

the cumulative amount of actuarial gains and losses on

employee commitments was recognised through equity

as from 1 January 2006;

the Group chose the option that allows tangible assets

to be measured at fair value as at the transition date for

all of its real estate assets.

2.2 Valuation basis and use of estimates

The consolidated financial statements are prepared using

the historical cost method, with the exception of certain

financial instruments measured at fair value.

When preparing the financial statements, the Group is

required to make the best possible estimates and to select

assumptions that affect the values of assets and liabilities

in the balance sheet, and the contingent assets and

liabilities disclosed in the notes to the consolidated financial

statements, as well as the income and expenses in the

income statement. The actual amounts may subsequently

differ from the estimates and assumptions.

The items primarily concerned are:

the calculation of employee benefits;

the estimates for provisions for contingencies and

losses, especially the Home Loan Savings provision;

the assumptions selected for impairment tests on

goodwill and on intangible and tangible assets;

the measurement of financial instruments not listed on

organised markets;

the credit risk assessments performed by La Banque

Postale;

the assumptions and estimates used to measure the

effectiveness of hedges.




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NOTE 3 Accounting Rules and Policies

A. Consolidation methods

B. Translation of financial statements of foreign companies

C. Foreign currency transactions

D. Consolidation of the Banking activities segment

E. Business combinations

F. Operating revenue

G. Taxes

H. Intangible assets

I. Tangible assets

J. Impairment of goodwill, intangible assets and tangible assets

K. Other financial assets

L. Banking activities assets and liabilities

M. Bond debt and financial derivatives relating to the management of the bond debt

N. Commitments to buy out non-controlling interests

O. Inventories and work-in-progress

P. Trade receivables

Q. Provisions

R. Employee benefits

S. Assets held for sale

T. Cash flow statement

A. Consolidation methods

A.1. Full consolidation

Subsidiaries that are exclusively controlled are fully

consolidated.

Exclusive control is defined as the power to direct a

company’s financial and operating policies so as to derive

a benefit from its activities.

Such power is deemed to exist by virtue of a direct or

indirect majority holding in the voting rights, the right

to appoint a majority of the members of the governing

bodies, or the right to exert dominant influence pursuant

to contracts or provisions in the articles of association.

A.2. Proportional consolidation

Companies over which the Group has joint control are

consolidated on a proportional basis.

Joint control is defined as the sharing of control over

a company operated in common by a limited number

of partners or shareholders, in such a way that they

unanimously set the financial and operating policies.

A.3. Equity method

Companies over which the Group exerts significant

influence are accounted for under the equity method.

Shares accounted for under the equity method are recorded

in the balance sheet under “Investments in associates” at

their historical cost adjusted for the share of net assets

earned subsequent to the acquisition, less impairment.



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Their profits or losses are presented in the consolidated

income statement under “Share in profits of equity

associates”.

Significant influence is defined as the power to participate

in the financial and operating policies of a company, without

having exclusive or joint control over that company.

Although the Group only holds a 20.15% interest in CNP

Assurances, Le Groupe La Poste considers that it has

significant influence over CNP Assurances due to its close

business ties with the company and its representation on

its governing bodies.

A.4. CNP Assurances share buyback agreement

La Poste sold 2% of its holding in CNP Assurances to

the Caisses d’Épargne Group in 2000, as part of the

restructuring of CNP Assurances’ share capital. This

sale was accompanied by the Caisses d’Épargne Group’s

agreement to sell back the shares, enabling Le Groupe

La Poste to recover its shareholding when the shareholders’

agreement expires.

In Le Groupe La Poste’s consolidated financial statements,

it was considered that the Group would continue to bear

the risks and enjoy the benefits relating to these shares.

As a result, the 20.15% interest in CNP Assurances, which

includes the 2% interest held by the Caisses d’Épargne

Group, is accounted for under the equity method.

A.5. Non-material controlled entities

Non-material and/or dormant entities, the consolidation of

which would not have a material impact on the presentation

of a true and fair view of the net assets, financial position

or profits and losses of the Group’s business activities, are

not consolidated.

A.6. Intra-group transactions

All material transactions between consolidated companies,

and proceeds on internal disposals, are eliminated.

A.7. Acquisition and disposal of non-controlling interests

Acquisitions and disposals of non-controlling interests that

do not result in a change in control over the company in

question are recognised in equity.

B. Translation of financial statements of foreign companies

The consolidated financial statements are presented in

euros, which is the functional and reporting currency for

La Poste, the Group’s parent company.

The financial statements of all Group companies that use

a functional currency other than the reporting currency

are converted into the reporting currency in the following

manner: the balance sheets of foreign companies are

converted into euros based on the closing exchange rate,

and their income statements are converted based on the

average rate for the financial year. The resulting translation

adjustments are recorded directly in the consolidated

balance sheet in equity, under “Translation reserves”.

Goodwill and fair value adjustments resulting from the

acquisition of a foreign operation are treated as the assets

and liabilities of the foreign operation and converted at the

closing exchange rate.

Exchange differences stemming from transactions

consisting of net investments between Group companies

are recognised in balance sheet equity under “Translation

reserves”. Foreign exchange differences resulting from

the translation of loans and other foreign exchange

instruments designated as hedging instruments for these

net investments are charged to equity on consolidation.

When a foreign operation is disposed of, the translation

adjustments initially recognised in equity are recognised

under gains and losses on disposal in the income

statement.

C. Foreign currency transactions

Transactions denominated in foreign currencies are

recognised based on the applicable exchange rates at the

recognition date.

At the closing date, assets and liabilities denominated in

foreign currencies are translated at the applicable closing

rate.

Foreign exchange differences arising on transactions

denominated in foreign currencies are recognised on the

"Net foreign exchange gains/(losses)" line under "Other

financial income" in the income statement (see Note 13).




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D. Consolidation of the Banking activities segment

In order to improve the clarity of financial statements,

specific Banking activities segment items relating to

banking and insurance activities have been combined

on separate lines in the consolidated balance sheet and

consolidated income statement. A detailed presentation of

these items is provided in the Notes, in accordance with the

requirements listed in the IFRS guidelines.

Comments on the principles applied are presented in the

following notes:

Note F: Operating revenue;

Note L: Banking activities assets and liabilities.

E. Business combinations

Business combinations are recognised according to the

acquisition method, in line with the provisions of IFRS 3—

Business Combinations (2008).

When an exclusively controlled company is f irst

consolidated, the acquisition cost represents the fair value

of the assets transferred, the equity instruments issued,

and of the liabilities incurred or assumed at the date of

exchange, plus any contingent consideration.

Goodwill represents the excess of the cost of the business

combination over the Group’s share in the fair value of the

assets, liabilities and contingent liabilities of the acquired

company.

Negative goodwill is immediately recognised in income in

the year in which the acquisition is made.

Goodwill is not amortised and is subject to impairment tests

at least once a year, and whenever there are indications that

it may have been impaired, using the method described in

Note J.

F. Operating revenue

F.1. Revenues from commercial activities

Revenue from the sale of goods or services is recognised

upon transfer of the major risks and rewards of ownership

to the customer. They are recognised as and when the

related service is provided, except for postage stamps and

pre-paid envelopes, where revenue is recognised at the time

of sale.

As a result, the time taken to deliver mail and parcels is

taken into consideration when assessing revenue at the

balance-sheet date.

F.2. Net Banking Income

Net Banking Income in the consolidated income statement

is the net difference between La Banque Postale and all its

subsidiaries’ banking operating revenue and expenses. It is

prepared in accordance with the accounting rules applicable

to banks. A breakdown of Net Banking Income is provided

in Note 7.

G. Taxes

The La Poste parent company has opted for a tax

consolidation regime where it is the umbrella company.

Deferred taxes are recognised whenever there is a timing

difference between the book value of balance sheet items

and their taxable value.

Deferred taxes recognised in prior financial years are

altered to reflect any tax rate changes. The corresponding

impact is recorded as an increase or decrease in the

deferred tax expense in the income statement unless it

relates to items recorded directly in equity, in which case

the tax is recorded in equity.

All deferred tax liabilities relating to taxable timing

differences are recognised. Deferred tax assets resulting

from timing differences, tax loss carry-forwards and tax

credits are recognised if they are likely to be recovered

(i.e. insofar as it is likely that future taxable profit will

be available against which the timing differences can be

charged). The assessment is based on the scheduled

reversal dates for all the deferred tax bases, using the

entity’s best estimates of the future changes in its taxable

profit (see Note 14).

Deferred tax assets and liabilities are offset within a single

taxable entity.

H. Intangible assets

IAS 38—Intangible Assets defines an intangible asset as

an identifiable non-monetary asset without any physical

substance (i.e. arising from legal or contractual rights or

a separable asset).

Intangible assets primarily involve software and leasehold

rights, and are recorded at their acquisition cost less

amortisation and impairment.

Software is amortised on a straight-line basis over its useful

life, usually a period of one to three years. Leasehold rights

are not amortised.



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Research and development costs

Research costs are expensed in the year in which they are

incurred.

Development costs are recorded as intangible assets,

provided:

the project has a good chance of being technically viable;

the Group has sufficient human and material resources

to produce the intangible asset;

the Group has shown its intention to complete the

intangible asset and to use or sell it;

the Group has shown that the asset will generate likely

future economic benefits;

the Group has shown that appropriate technical, financial

and other resources are available to complete the

development of the intangible asset, and to use or sell it;

expenditure attributable to the intangible asset during its

development can be reliably measured.

This expenditure, which is capitalised as intangible assets,

is amortised on a straight-line basis over the useful life of

the asset (usually three years and up to a maximum of five

years) from the time they are commissioned.

Development expenditure that does not satisfy the above

criteria is expensed in the year in which it is incurred.

I. Tangible assets

Tangible assets consist primarily of land, buildings, plants,

tools, equipment and computer hardware. They are

recorded at cost less depreciation and impairment.

I.1. Acquisition cost of a tangible asset

Only expenditure giving rise to a controlled resource as a

result of past events and from which the Group expects to

generate future economic benefits is capitalised.

The incidental costs directly attributable to the acquisition

of non-current assets or to bringing them into working

condition are included in the cost of the non-current asset.

Borrowing costs are included in the purchase cost of

qualifying assets, in accordance with IAS 23—Borrowing

Costs.

Investment subsidies received in respect of the acquisition

of a non-current asset are recorded as balance sheet

liabilities and recognised in income over the useful lives of

the underlying assets for which they were awarded.

I.2. Breakdown of the original value of non-current assets by component

A component is a part of a non-current asset that has a

different useful life, or that generates economic benefits at

a rate that differs from that of the overall non-current asset.




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Le Groupe La Poste has identified the following components:

Non-current assets Components

Real estate portfolio structural frame, roof, joinery and external works, large equipment items,

small equipment items, fixtures and fittings, and land

Sorting machines mechanical parts, intelligence, peripherals

a 4th component (feeders and measuring instruments) has been identified for

parcel sorting machines

Sorting-area equipment mechanical parts, intelligence

TGV railcars frame, servicing, interior fittings

Automated teller machines machine, installation

I.3. Depreciation periods

Tangible assets are depreciated on a straight-line basis over their useful life. The average useful lives are:

Non-current assets Depreciation period

Buildings

Structural frame 20 to 80 years

Roof 20 to 60 years

Joinery and external works 20 to 40 years

Large equipment items 15 to 20 years

Small equipment items, fixtures and fittings 5 to 10 years

Machinery and equipment

Sorting machines 5 to 15 years

Sorting-area equipment 5 to 8 years

Office and computer equipment 3 to 5 years

Office furniture 10 years

ATMs 5 to 10 years

Transportation vehicles (other than TGV railcars) 3 to 5 years

TGV railcars 15 to 30 years

Land is not depreciated.

I.4. Finance leases

Leases where the Group assumes, in substance, all the

risks and benefits, are deemed to be finance leases. An

asset acquired under a finance lease is recognised at the

lower of fair value or the present value of minimum future

payments as at the date the lease is signed, less cumulative

depreciation and impairment.

Leases that meet the definition of a finance lease, but

where the restatement would not have a material impact

on the presentation of a true and fair view of the net assets,

financial position or profits or losses of the Group’s business

activities, are treated as operating leases.



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J. Impairment of goodwill, intangible assets and tangible assets

Goodwill and intangible assets with indefinite useful lives

are systematically tested for impairment at least once a

year, and whenever an indication that the asset may be

impaired is identified.

Other intangible and tangible assets are only tested for

impairment where there is an indication that they may have

been impaired.

An impairment test involves comparing the net book value

of an asset, or of the Cash Generating Unit to which it

belongs with its recoverable value, which is the higher of

its fair value less sale costs and its value-in-use. Where the

recoverable amount of a capitalised asset or group of assets

falls below net book value, an impairment is recognised to

bring the book value in line with the recoverable amount.

Fair value less sale costs represents the amount that could

be obtained by selling an asset at the measurement date

in an arms’-length transaction, net of any disposal costs.

The value-in-use of an asset or group of assets is the

present value of the future cash flows expected to arise

from using the asset or Cash Generating Unit.

The value-in-use of goodwill is determined based on the

forecast net cash flows set out in business plans, and on the

assumptions approved by the Group as part of the budgetary

process. These forecasts generally cover a five-year period,

beyond which cash flows are extrapolated to infinity using a

low growth rate, which usually corresponds to inflation. The

cash flows are discounted applying the weighted average

cost of capital for each relevant asset or group of assets.

K. Other financial assets

K.1. Other non-current financial assets

This item primarily includes:

loans granted for local authority housing, recorded at

their amortised cost under the effective interest rate

method. Provisions are recorded so as to take the

maturities and repayment terms of these loans into

account, as well as the estimated risk of non-recovery;

unconsolidated investments classified under “Available-

for-sale financial assets” and measured at fair value

at the balance-sheet date. Changes in fair value are

recorded in equity. When the shares are disposed of,

the changes in fair value previously recognised in equity

are transferred to income. Dividends received from

unconsolidated investments are recognised as financial

income in the year in which the decision to pay a dividend

is made;

in the event that no active market exists, and where the

fair value cannot be reliably determined using alternative

measurement methods, they are retained on the balance

sheet at cost. An impairment is recorded where there

is an objective indication of a permanent reduction in

their current value. The current value is determined

based on the most appropriate financial criteria for each

company’s specific position. The criteria that are usually

selected are the share of equity held and the profitability

outlook;

the non-current portion of the fair value of financial

derivatives relating to La Poste’s bonds (see Note 27).

K.2. Other current financial assets

These primarily involve the current portion of the fair value

of financial derivatives relating to La Poste’s bonds (see

Notes 3.M and 27).

L. Banking activities assets and liabilities

The Banking activities’ financial assets and liabilities are

classified under one of the following four categories: loans

and receivables, financial assets and liabilities at fair value

through profit or loss, held-to-maturity investments and

available-for-sale financial assets.

L.1. Banking activities loans and receivables

Loans and receivables are fixed or determinable-income

non-derivative financial assets that are not listed on an

active market. They include loans and receivables due from

credit institutions and customers. Following their initial

recognition, they are recognised at amortised cost under

the effective interest rate method and can be subject to

impairment, where appropriate.

The effective interest rate is the exact interest rate that

discounts the future cash flows to the loan’s initial fair

value. It includes the transaction costs relating directly to

the loan issue, which are deemed to form an integral part

of the loan yield.

Exceptionally, some securities may be recognised in this

category. They then follow the accounting, measurement

and impairment rules for loans and receivables.

Banking activities loans and receivables are recognised in

the “Customer loans and receivables (Banking activities)” or

“Credit institution receivables (Banking activities)” balance

sheet items, depending on the type of counterparty.




es, ernts 20

Downgrading of Banking activities loans and receivables

The downgrade process applies to outstanding overdrafts,

property loans and consumer loans.

Active accounts and closed accounts are downgraded in

respect of outstanding overdrafts. Downgrading outstanding

overdrafts on active accounts has the effect of downgrading

performing loans to doubtful performing loans. Downgrades

are performed on a monthly basis and take the amount and

length of the overdraft for each account into consideration.

Closing the account results in downgrading the receivable to

a doubtful non-performing loan. Receivables for very small

amounts are directly recognised as losses.

Property loans six or more months in arrears are

downgraded to doubtful performing loans; in the case of

consumer loans these are accounts that present a proven

risk and have at least three payments in arrears at month-

end, or loans where an application for a debt management

plan has been filed with the Banque de France even if there

are no payment issues relating to these loans, or loans with

no payment issues classified as being in default due to their

being affected by another loan to the same customer that

is in default.

Cancellation of the loan results in the receivable being

downgraded to doubtful non-performing status. Moreover,

loans are systematically classified as non-performing

doubtful loans one year after they are classified as doubtful.

In accordance with the contagion principle, all outstanding

loans to the same account holder are downgraded as soon

as one receivable with this account holder is downgraded.

Impairment of loans on an individual basis

The Group begins by identifying whether there is objective

evidence of an event occurring after the granting of a

loan—or group of loans—that is likely to lead to a loss

in value. This can involve loans at least three months in

arrears, loans subject to legal proceedings or loans where

the counterparty’s financial position has deteriorated, and

is resulting in a risk of default.

An impairment is then recognised, based on the difference

between the book value and the expected flows discounted

at the original effective interest rate, which are determined

by taking account of the debtor’s financial position and the

present value of any guarantees received. In the case of

terminated non-performing loans backed by a guarantee

where the amount outstanding is greater than a given

minimum amount, an expert appraisal is performed in order

to determine the amount of the provision. For amounts

below that threshold and for unimpaired loans, a prudent

estimate is made, which factors in the acquisition cost of

the asset.

Loans guaranteed by a private individual, and unguaranteed

loans are impaired in full.

The amount of the impairment is recognised in “Cost of

risk” in the income statement, and the value of the financial

asset is reduced through recording an impairment charge.

Collective impairment of loans

In addition, loans that are not impaired on an individual

basis are impaired on a collective basis. This process

involves a group of “sensitive loans” that form a sub-

category in performing loans: they show preliminary signs

of default (with one or more payments less than 180 days

in arrears) but their status has not yet been downgraded

to doubtful.

These loans are provisioned on the basis of a likely

downgrade, which is calculated based on historical

observations. The risk of loss that takes the nature of the

guarantee into account is calculated in the same way as for

doubtful cases, and is the subject of a provision, based on

the discounted recoverable cash flows.

The amount of the impairment is recognised in “Cost of

risk” in the income statement, and the value of the financial

asset is reduced through recording an impairment charge.

Impairment of overdrafts

Provisions recorded for overdrafts on active post office bank

accounts factor in the loan recovery performance for the

previous year according to the level of risk.

The Group’s income statement shows the cost of risk for the

Banking activities, which includes losses on irrecoverable

receivables and changes in provisions on doubtful loans, as

well as recoveries of written-off receivables. The cost of risk

is shown on the “Depreciation, amortisation and provisions”

line of the consolidated income statement.

L.2. Financial assets at fair value through profit or loss

This category includes securities held for trading purposes,

together with securities designated from the outset as

belonging to this category by the Group. The Group thus

measures some structured issues at fair value through

profit or loss, together with some components of composite

financial instruments without splitting out embedded

derivatives that should be recognised separately.



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Securities classified in this category are initially recognised

at their market value, while transaction costs are directly

expensed. They are subsequently measured at fair value

at each balance-sheet date, and the change in fair value is

recognised in income, along with dividends from variable-

income securities and gains and losses on disposal, under

“Net gains and losses on financial instruments at fair value

through profit or loss”, which is included in Net Banking

Income (see Note 7). Income received on fixed-income

securities is recorded under “Interest and similar income”.

L.3. Financial assets held to maturity

This category includes fixed-or determinable-income

securities that the Group intends and has the ability to hold

to maturity.

Held-to-maturity investments are recorded at amortised

cost using the effective interest rate method, which includes

all premiums and discounts, as well as their purchase

costs.

Income received on these securities is recognised under

“Interest and similar income”, which is included in Net

Banking Income.

In the event that there is an objective indication of

impairment, a provision is recorded for the difference

between the book value and the estimated recoverable value

discounted at the original effective interest rate. In the event

of a subsequent improvement, the excess provision, which

is redundant, is written back.

L.4. Available-for-sale financial assets

The “Available-for-sale financial assets” category is the

default category defined by IAS 39. It includes fixed-income

securities and equities that do not fall into the two previous

categories.

Securities classified in this category are initially recognised

at their acquisition cost, plus transaction costs and accrued

coupons. At the balance-sheet date, they are measured at

fair value and any changes in that fair value are recorded

in equity under “Unrealised gains and losses on financial

instruments”.

In the event of a disposal or permanent impairment, the

unrealised gains and losses recorded in equity are reversed

in income under “Net gains and losses on available-for-sale

financial assets”.

In the event of a prolonged or material reduction in the fair

value of treasury shares, an impairment charge is recorded

on available-for-sale financial assets. The same applies to

debt securities in the event of a significant deterioration in

credit risk. The fall in the fair value of a security is deemed

to be material when an equity instrument has lost at least

40% of its value between the acquisition date and year-end.

When such objective evidence of impairment is observed,

the aggregate unrealised loss that had hitherto been

directly recognised in equity is automatically recognised in

the income statement. The fall in the fair value of a security

is assumed to be long-term when the ongoing fall extends

over a period of more than 24 months. In this case, the

Group examines whether there are grounds to recognise

the impairment charge in profit or loss, depending on the

level of significance of the unrealised losses. This approach

does not rule out the line-by-line examination of objective

evidence of impairment.

Moreover, the CNP Assurances Group uses specific

criteria to determine evidence of impairment on securities

available-for-sale as part of its insurance company

management process. These criteria are not re-estimated

when CNP Assurances is included in the Group’s

consolidated financial statements via the equity method,

in order to take account of the management and risk

framework that is inherent to CNP’s business.

For debt instruments like bonds, an impairment charge is

recorded when there is a proven counterparty risk.

Impairment losses on variable-income securities,

recognised in profit or loss, cannot be reversed while

the instrument remains on the balance sheet. They are

recorded in “Net gains or losses on available-for-sale

financial assets”. Impairment losses on fixed-income

securities can be reversed and recognised in the cost of

risk when they relate to credit risk.

L.5. Reclassification of financial assets

A financial asset with a fixed or determinable yield, which

was initially recognised in the “Available-for-sale financial

assets” category, but which is no longer tradable on an

active market after its acquisition, and which the Group

intends and is able to hold for a foreseeable period or until

maturity may be reclassified in the “Loans and Receivables”

category.

Reclassifications are carried out at market value on the

date of reclassification, and financial assets transferred in

this way are then valued according to the rules applicable to

their new category. The transfer price at the reclassification

date represents the initial cost of the asset when

determining potential impairment charges. A new effective

interest rate is then calculated in order to bring this new

balance into line with the instrument’s redemption value.

At the same time, profits and losses that were previously

recorded in equity are amortised through profit or loss

over the residual life of the instrument, using the effective

interest rate method.




es, ernts 20

L.6. Financial derivatives (Banking activities)

Derivatives held for transaction purposes

Derivatives belong to the category of financial instruments

held for transaction purposes, except for derivatives that are

used for hedging purposes. Their fair value is recognised

in the balance sheet in “Financial instruments at fair value

through profit or loss”. Changes in fair value and interest

accrued or not due are recognised in net gains or losses on

financial instruments at fair value through profit or loss.

Hedging derivatives

Derivatives that qualify as hedging instruments according

to IAS 39 criteria are classified in the “Fair value hedges”

or “Cash flow hedges” category, depending on the

circumstances. Other derivatives are classified in “Assets

or liabilities at fair value through profit or loss” by default,

even if they have been entered into in order to hedge one or

several transactions from an economic perspective.

In order to classify a financial instrument as a hedging

derivative, the Group must establish the hedging

relationship from the outset (hedging strategy, description

of the risk hedged, the item hedged, the hedging instrument

and the method used to assess its effectiveness).

Effectiveness is assessed when the hedge is put in place

and at each balance-sheet date while it remains in place.

Depending on the nature of the hedged risk, the derivative

is designated a fair value hedge, a cash flow hedge or a

foreign exchange hedge linked to a net investment in a

foreign operation.

Fair value hedges

Fair value hedges enable exposure to fluctuations in the

fair value of financial assets or liabilities to be hedged; they

are primarily used to hedge interest-rate risk on fixed-rate

assets and liabilities and on sight deposits, according to the

options approved by the European Union.

Any revaluation of the derivative is recognised in profit

or loss in a way that mirrors the revaluation of the item

hedged. Gains or losses attributable to the hedged risk are

recognised in “Net gains or losses on financial instruments

at fair value through profit or loss” in the income statement.

As soon as the hedging relationship becomes effective,

movements in the fair value of the hedged item are

mirrored by the movements in the fair value of the hedging

instrument. Any potential ineffectiveness of the hedge is

directly recognised in the income statement. The portion

relating to the accrued income or expenses of the derivative

is recognised in “Income and interest expense” in the

income statement at the same time as the interest income

and expense relating to the hedged item.

As soon as the derivative instrument no longer meets

the effectiveness criteria specified by the standard, and

especially if it is sold, hedge accounting is prospectively

discontinued: the derivative is transferred to “Financial

assets at fair value through profit or loss” or “Financial

liabilities at fair value through profit or loss” while the

revaluation of the hedged item is amortised over the period

remaining based on the initial life of the hedge.

In the event that the hedged item is sold or redeemed,

the hedging instrument, which no longer qualifies as a

hedging instrument but still exists, remains on the balance

sheet and is accounted for at fair value through profit or

loss. A gain or loss on the sale of the hedged item may be

recognised in profit or loss.

Macro-hedges

The Group applies the provisions of IAS 39 as adopted by the

European Union to macro-hedging transactions which are

performed as part of the asset and liability management of

fixed-rate positions.

Macro-hedging instruments are primarily interest rate

swaps designed as fair value hedges for the Group’s fixed-

rate resources.

Macro-hedging derivatives are accounted for according

to the same principles as those described above. The

revaluation of the hedging component is recognised in

“Revaluation differences on portfolios hedged against

interest-rate risk”.

Cash flow hedges

Cash flow hedges are used to hedge exposure to

movements in cash flows from financial assets or liabilities,

firm commitments or future transactions. More specifically,

they are used to cover interest-rate risk on reviewable-rate

assets and liabilities.

The effective portion of movements in the fair value of a

derivative instrument is entered on a specific line in equity,

while the ineffective portion is recognised in profit or loss in

“Net gains or losses on financial instruments at fair value

through profit or loss.”

The portion corresponding to the rediscounting of the

financial derivative is entered on the income statement in

“Interest income and expenses on hedging transactions”

symmetrically to the interest income and expenses relating

to the hedged item.

The hedged instruments continue to be recognised

according to the rules applicable to their accounting

category.



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In the event of a breakdown in the hedging relationship, or

as soon as the derivative instrument no longer meets the

effectiveness criteria specified by the standard, or especially

if it is sold, the hedge accounting ceases. The aggregate

amounts entered in equity in respect of the revaluation of

the hedging derivative are gradually transferred to profit

or loss as interest income or expense, or immediately

recognised in profit or loss. In the event that the hedged

item is sold or redeemed, the derivative is reclassified in

“Financial assets at fair value through net income”, while

the revaluation of the hedged item entered in equity is

immediately recognised in profit or loss.

Embedded derivatives

An embedded derivative is a component of a hybrid contract.

It is separated out of the host contract and recognised

separately when its economic characteristics and the

related risks are not closely linked to those of the host

contract, except where the hybrid instrument is valued at

fair value through profit or loss.

Day one profit

The Group generates no profit on the trading of structured

instruments.

L.7. Guarantee commitments

Financial guarantees

A contract meets the definition of a financial guarantee if

it includes an indemnity principle according to which the

issuer shall compensate the beneficiary for losses that

the latter has suffered due to the failure of a specifically

designated creditor to make a payment on a debt

instrument.

The financial guarantees provided are valued at their initial

fair value at the date into which they were entered. They

are subsequently valued at the higher of the amount of the

commitment and the amount initially recorded, less the

commission guarantee, where applicable.

L.8. Debt (Banking activities)

Liabilities to credit institutions and customers

Liabilities to credit institutions and liabilities to customers

are broken down according to their initial maturity or

nature: sight debt (sight deposits and ordinary accounts)

or long-term debt (special scheme savings accounts).

These liabilities include securities sold under repurchase

agreements and loaned securities.

Debt evidenced by a certificate

Issued financial instruments are classified as debt

instruments where the issuer is required to pay out cash

or some other financial asset, or furthermore, to exchange

instruments on potentially disadvantageous terms. Debt

securities consist of negotiable debt securities issued by

La Banque Postale.

The debt is initially recognised at nominal value and is then

valued at amortised cost using the effective interest rate

method at subsequent balance-sheet dates.

L.9. Deconsolidation of financial assets or liabilities

Financial assets are deconsolidated when the contractual

rights to the cash flows attached to the financial asset

expire, or when those rights and virtually all the risks and

benefits of ownership have been transferred to a third party.

When certain risks and advantages have been transferred,

and while control of the financial asset is retained, that

asset remains on the balance sheet so as to reflect the

ongoing involvement in the asset concerned.

A gain or loss on disposal is then recorded in the income

statement, in an amount equal to the difference between the

book value of the asset and the value of the consideration

received.

Financial liabilities are deconsolidated when the contractual

obligation is settled, cancelled, or when it expires.

Repurchase agreements

The assignor does not derecognise the securities. The

Group records a liability that represents its commitment to

refund the cash received. This debt represents a financial

liability, which is recorded at amortised cost, and not at fair

value.

The assignee does not recognise the assets received, but

recognises a receivable on the cash loaned by the assignor.

At subsequent balance-sheet dates, the assignor continues

to value the securities according to the rules applicable to

their original category. The nominal value of the receivable

is shown in loans and receivables.




es, ernts 20

Securities lending transactions

The lending and borrowing of securities cannot be treated

as a financial asset transfer according to IFRS. Therefore,

these transactions cannot result in the deconsolidation of

the loaned securities. They continue to be recognised in

their original accounting category and valued in accordance

with the rules of that category. Borrowed securities are not

recognised.

L.10. Insurance activities

The financial assets and liabilities of the Group’s insurance

companies are mostly valued and recognised according to

the provisions set out in IAS 39.

However, the following policies are recognised according

to IFRS 4:

insurance policies that include a contingency clause

for the policy holder. This category includes policies for

personal risk, retirement, property damage and unit-

linked savings policies with a guaranteed minimum

return;

financial contracts issued by the insurer that include a

discretionary profit-sharing (PS) clause.

In accordance with the provisions of IFRS 4, local guidelines

for valuing underwriting reserves are retained for both types

of contract.

Financial contracts governed by IAS 39 correspond to

investment contracts with no discretionary with-profits

clause, i.e. unit-linked savings policies with no euro-

denominated or minimum guarantee.

Pursuant to the “shadow” accounting principles set out in

IFRS 4, a provision for deferred profit-sharing is recorded

for insurance policies that include a discretionary with-

profits clause. This provision is determined in a way that

reflects the potential rights of policyholders to share in

unrealised gains on financial instruments valued at fair

value, or in potential losses in the event of unrealised losses

on those instruments.

At each year-end, the Group’s insurance companies perform

a liability adequacy test, which consists in checking that the

insurance liabilities recognised, net of deferred acquisition

costs and related tangible assets, are adequate on the basis

of current estimates of future cash flows from insurance

policies and from financial contracts with discretionary

profit-sharing clauses.

Underwriting and actuarial provisions

Underwriting provisions represent commitments to policy-

holders.

Actuarial provisions on euro-denominated policies

correspond to the difference between the current value of

the insurer’s and the policyholder’s commitments.

Life insurance provisions are recorded based on discount

rates that are at most equal to prudently-estimated rates

of return on the underlying assets.

The net present value of commitments is calculated

by choosing a discount rate that is at most equal to the

pricing rate of the policy involved, and by using statutory

mortality tables or tables based on experience if they

are more cautious. Lower interest rates are factored in

to investment income discount rate calculations when

the rate is deemed to be too high relative to the expected

reinvestment prospects.

Actuarial provisions on unit-linked policies are valued on

the basis of the underlying assets. Gains or losses resulting

from the revaluation of these policies are recognised in the

profit and loss statement, in order to cancel out the impact

of movements in underwriting provisions.

Active deferred profit-sharing

Most financial contracts issued to policyholders by the

Group’s life insurance subsidiaries include a discretionary

profit-sharing clause.

The discretionary profit-sharing clause grants life insurance

policyholders the right to receive a share in any realised

financial gains, as well as the income guaranteed. Pursuant

to the “shadow” accounting principles set out in IFRS 4,

the provision for deferred profit-sharing for these policies

is adjusted to reflect the policyholders’ entitlement to

any unrealised gains, or their obligation to assume their

share of unrealised losses on financial instruments valued

at fair value under IAS 39. The share of gains to which

policyholders are entitled is determined according to the

specific features of the policies likely to benefit from such

gains.

The net amount of the deferred profit-sharing established

by “shadow” accounting is recognised either in balance

sheet liabilities (net deferred profit-sharing—liabilities) or

assets (net deferred profit-sharing—assets) depending on

the situation of the entity concerned.

When recorded as an asset, deferred profit-sharing

is subject to a recoverability test. The aim of this test is

to show that the profit-sharing amount is recoverable

through sharing in future or unrealised gains, against the

background of the Group’s business continuity, and will not

result in any inadequacy of the commitments recognised by

the Group in respect of these economic commitments. The

recoverability test is performed by using current estimates

of future policy cash flows. The test is based on tools

for modelling the asset and liability management of the



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subsidiaries involved, and enables a value to be assigned

to commitments in a high number of economic scenarios

using a stochastic approach.

In accordance with the recommendation on methods for

identifying deferred profit-sharing issued by the French

National Accounting Council, or CNC, on 19 December

2008, profit-sharing recoverability is based on a prudent

assessment of the capacity for holding the assets,

particularly in terms of their future collection, in forecast

cash flows. Likewise, the capacity of future returns

to absorb unrealised losses was tested, based on an

unfavourable repurchase scenario that has never been

experienced up until now.

M. Bond debt and financial derivatives relating to the management of the bond debt

Bonds are classified in the balance sheet under both

“Medium and long-term bonds and other debt” and “Short-

term bonds and other debt”.

M.1. Bonds backed by “fixed-for-floating” swaps

As part of the Group’s strategy to manage its bonds, some

fixed-rate bonds are converted to “floating-rate bonds” via

fixed-for-floating swaps.

Depending on the circumstances, these bonds can be

designated at fair value through profit or loss or designated

as subject to fair value hedging.

Bonds designated at fair value through profit or loss

In accordance with IAS 39 and its “Fair value option”

amendment, adopted by the European Union on

15 November 2005, some bonds backed by “fixed-for-

floating” swaps are recognised at fair value through profit

or loss. The corresponding swaps are also measured at fair

value through profit or loss, in accordance with the general

rule for measuring derivatives set out in IAS 39.

Bonds designated as subject to fair value hedging

Some bonds are designated as subject to fair value hedging

through “fixed-for-floating” swaps. The application of fair

value hedge accounting leads to the recognition in profit

or loss of (i) the change in the fair value of hedging swaps,

and (ii) the change in the value of the efficient portion of the

hedging swap, as an adjustment to the value of the bond.

These effects offset one another where the effective part of

the hedge is concerned.

Moreover, depending on market developments, the Group

may refreeze the interest rates of some borrowings by

subscribing to floating-for-fixed swaps. These swaps are

also measured at fair value through profit or loss.

M.2. Bonds measured at amortised cost

Bonds not backed by “fixed-for-floating” swaps are

measured at amortised cost based on the effective interest

rate (EIR).

M.3. Forward start swaps

In some cases, La Poste subscribes to forward start swaps

to protect itself against a rise in interest rates. These cash

flow hedging instruments are terminated when the bond is

issued, which gives rise to the payment of an equalisation

balance (paid or received depending on the swap’s value).

These payments are recognised in reversible reserves as

part of the application of the cash flow hedge, and then

reversed to income over the life of the initially hedged loan,

in accordance with the provisions of IAS 39 regarding the

termination of hedges.

N. Commitments to buy out non-controlling interests

Pursuant to the provisions of IAS 32—Financial Instruments:

Presentation, Le Groupe La Poste records a financial

liability for put options granted to minority shareholders

of consolidated subsidiaries. When the value of the liability

exceeds the value of the non-controlling interests, IFRS do

not specify how the consideration should be recognised.

Le Groupe La Poste has chosen to offset the difference

between the liability and value of non-controlling interests

under reserves, Group share. Subsequent changes in debt

relating to the change in the estimated strike price of the

buy-back commitment and of the book value of the non-

controlling interests are recognised in reserves, Group

share.




es, ernts 20

O. Inventories and work-in-progress

Inventories are valued at the lower of their purchase cost

or net realisable value. The net realisable value is the

estimated sale price in the normal course of business, less

the estimated costs necessary to complete the sale.

The value of inventories is assessed using the weighted

average cost method, and includes both the purchase cost

and the expenses incurred in bringing the inventories to

their current location and condition.

P. Trade receivables

When initially recognised, trade receivables on commercial

activities are recorded at their nominal value, which

basically corresponds to the fair value of the receivables.

Provisions are calculated on an individual basis, based on

an assessment of the risk of non-recovery.

Q. Provisions

Provisions are recorded when (i) the Group has a present

obligation (legal or implicit) towards a third party as a result

of a past event at the balance-sheet date, (ii) it is likely that

an outflow of resources representing future economic

benefits will be required to settle the liability, and (iii) a

reliable estimate can be made of the liability.

The provisions are assessed on the basis of the Group’s

expectation of the expenditure required to settle the liability,

based on management data from the information system

and on assumptions selected by the Group, supplemented,

where necessary, by experience of similar transactions

and, in some cases, by reports from independent experts

or estimates from service providers. These various

assumptions are reviewed at each balance-sheet date.

Provisions for commitments on home loan savings agreements

Home loan savings accounts and plans offered to retail

customers in accordance with the French Act of 10 July 1965

include two phases: a first phase during which deposits are

collected in the form of interest-bearing savings accounts,

and a second phase where home loans are extended.

In accordance with the provisions of IAS 37, La Banque

Postale records provisions commitments with unfavourable

consequences relating to home loan savings agreements.

These provisions relate to the obligation to pay interest on

deposits for an undetermined period of time at a rate that

is fixed when the contract is signed in the future, on the one

hand, and to the obligation to extend loans at a rate that is

fixed at the time the contract is signed, on the other.

The additions to and reversals of this provision are included

in banking operating revenue and expenses, within Net

Banking Income.

Provisions are calculated for each generation of home

loan savings schemes, without offsetting commitments for

different generations of home loan savings schemes, and

for all the home loan savings accounts representing one

generation.

During the savings phase, the commitments to be

provisioned are evaluated according to the difference

between average forecast savings deposits and minimum

forecast savings deposits, both of which are determined on

a statistical basis by factoring in historical observations on

actual customer behaviour.

During the lending phase, the commitments to be

provisioned include loans that have already been granted

but not yet released at the year-end date, as well as future

loans that are viewed as statistically likely based on balance

sheet deposits as at the calculation date and historical

observations on actual customer behaviour.

A provision is recorded when the net present value of future

income is negative for a given generation of loans.

That income is assessed on the basis of the rates offered to

retail customers on equivalent savings and lending products

that have the same term as the deposits and were agreed

on the same day.

The Group’s insurance companies record underwriting

provisions, the principles of which are set out in Chapter

L. 10 above.

R. Employee benefits

Post-employment and long-term benefits resulting from

defined benefit plans, together with their related costs,

are measured using the projected unit credit method, in

accordance with IAS 19. Annual actuarial appraisals are

carried out.

The appraisal calculations involve taking third-party

actuarial economic assumptions into account (discount

rates, inflation rates, and the rate of increase in pensions,

etc.), as well as assumptions that are specific to La Poste

(employee turnover rates, mortality rate, and the rate of

increase in salaries, etc.).

The balance sheet provision for defined benefit post-

employment plans corresponds to the present value of

the liability at the balance-sheet date less the market



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value of any plan assets where applicable (GeoPost UK).

The present value of the commitment is calculated using

the projected credit unit method on an annual basis. That

value is determined by calculating the net present value

of expected future outflows based on the market rate for

top-tier corporate bonds, denominated in the currency in

which the benefit will be paid. In addition, the term of the

selected bonds is close to the average estimated length of

the underlying commitment.

Actuarial gains and losses resulting from experience-

based adjustments and the impact of changes to actuarial

assumptions are recognised as “other comprehensive

income”.

Past service costs, which arise when a defined benefit plan

is adopted or modified, are immediately expensed.

Pension and other employee benefit arrangements are

described in Note 29 together with the main assumptions

used.

R.1. Government employees

Pension plan

The Amending Finance Act of 2006 introduced a reform in

the way in which the pensions for government employees

attached to La Poste were financed, which was applied

retroactively as at 1 January 2006. This reform is described

in Note 29 "Employee benefits".

Under the plan introduced in 2006, La Poste pays an

employer contribution, which discharges it of its liabilities.

As a result, no provision for the retirement of government

employees is recorded in the financial statements.

Up until 2005, under the Act of 2 July 1990, La Poste

was responsible for reimbursing the cost of pensions

granted to government employees working for La Poste

in accordance with the French Civil and Military Pensions

Code, where payment and cover were provided by the

French government.

R.2. Contract staff

Pension plan for contract staff of La Poste

and the French subsidiaries of Le Groupe La Poste

The pension plan for contract staff at La Poste and the

Group’s French companies is a plan known as a “defined

contribution plan”. Such plans are based on payments to

independent bodies that are responsible for paying the

amounts due to employees, thus releasing the employer

from any subsequent obligation. Therefore, once the

contributions have been paid, no liability or commitment is

shown in the Group’s financial statements. Contributions

paid to independent bodies are recognised in the period

concerned.

Retirement benefits for contract staff of La Poste

and the French subsidiaries of Le Groupe La Poste

A provision for these commitments is recorded on the

balance sheet, and is calculated according to the principles

explained above for defined benefit schemes.

Pension plans for employees of Le Groupe La Poste’s

foreign subsidiaries

A provision for these commitments is recorded on the

balance sheet, and is calculated according to the principles

explained above; it primarily applies to the GeoPost UK sub-

group.

R.3. End-of-career arrangements

La Poste records a provision for the costs of the end-of-

career arrangements made for its employees. The amount

of this provision takes into account both persons who have

enrolled in one of the existing plans, and those who are

expected to enrol on the basis of past take-up rates in

previous years and Management’s best estimates.

S. Assets held for sale

A non-current asset, or group of assets and liabilities, is

classified as being held for sale when its book value will

primarily be recovered through its sale and not its ongoing

use. This assumes that the asset is available for immediate

sale in its current state and that such a sale is highly likely

within one year.

These assets and groups of assets, along with all related

liabilities, are disclosed separately from other assets and

liabilities and are valued at the lower of book value or the

estimated sale price, net of disposal costs. These assets

cease to be depreciated or amortised from the date when

they are classified in this category.

T. Cash flow statement

In accordance with IAS 7, Le Groupe La Poste publishes

a Cash Flow Statement, which presents the inflows and

outflows of cash and cash equivalents classified under

operating, investing or financing activities.




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The format of the cash flow statement has been rearranged

in order to show the flows associated with La Banque

Postale and the flows associated with non-banking business

activities on a separate basis.

The cash flow statement presents the change in cash and

cash equivalents of non-banking activities.

La Banque Postale sub-group’s cash flows are disclosed on

a separate line in the balance sheet. Changes in those cash

flows are reflected in the “Decrease (increase) in cash and

cash equivalents from Banking activities before impact of

changes in consolidation scope” line, positioned under cash

flows from financing activities.

In addition, cash flows relating to variations of banking

assets and liabilities are combined on a separate line in

the cash flow statement (“Change in balance of banking

sources and uses”) in net cash flows from operating

activities, which specifically includes:

flows from deposits collected from Banking activities

customers;

Banking activities cash flows relating to liabilities to

credit institutions, provided these liabilities have not

been contracted for the purpose of acquiring non-

current assets;

acquisitions and disposals of securities in the Banking

activities investment portfolio;

cash flows relating to Banking activities loans and

advances;

changes in the fair value of financial instruments from

Banking activities.

Operating activities are the main revenue-generating

activities and any other activities other than those defined

as investing or financing activities.

Cash flows from operating activities are determined using

the indirect method whereby the share in profits of equity

associates is adjusted for all non-cash transactions (e.g.

net increases in depreciation, amortisation and provisions

other than those relating to current assets, changes in

deferred taxes and changes in the operating working capital

requirement), deferrals or adjustments relating to past or

future operating cash inflows or outflows, and all income

and expenses associated with cash flows from investing and

financing activities.

Investing activities relate to the acquisition or disposal

of non-current assets and to any other investments not

included in cash and cash equivalents.

Le Groupe La Poste’s cash flows from investing activities

consist mainly in acquisitions or disposals of the following:

intangible and tangible assets, adjusted for non-cash

transactions (accounts receivable or payable on non-

current assets);

equity investments in other companies;

other financial assets (guarantees and deposits, and

receivables on investments, etc.).

The impact of changes in the consolidation scope on cash

flows is presented on a separate line “Impact of changes in

consolidation scope”.

Financing activities relate to transactions that affect the

amount and composition of equity and debt.

Cash flows from financing activities include sources

of financing (new borrowings) and related outflows

(distribution of dividends to minority shareholders, La Poste

savings bond redemptions and debt repayments), other than

those related to the banking operations of the La Banque

Postale sub-group, which are included in “Change in the

balance of banking sources and uses” (see above).

The concept of cash and cash equivalents includes very

short-term liquid investments that can be readily converted

into known amounts of cash and are subject to a negligible

risk of change in value.

Le Groupe La Poste’s cash and cash equivalents include

cash in hand, bank debit balances, term deposits and

marketable securities that do not carry any material risk

of changes in value and can be readily converted into cash

(particularly money-market UCITS), and the portion of bank

credit balances and related interest accrued relating to

temporary overdrafts.

Regardless of their characteristic features, securities in the

“Banking activities investment portfolio” are never classified

as cash. The flows pertaining to them are included in the

“Change in the balance of banking sources and uses” line

in the cash flow statement (see above).



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NOTE 4 Changes in the consolidation scope

4.1 Main newly-consolidated companies

4.2 Deconsolidated companies

4.3 Income statement at constant scope and exchange rates

The scope of consolidation is shown in Note 41.

4.1 Main newly-consolidated companies

Acquisition of BPE

Acquisition of 100% of BPE (formerly Banque Privée

Européenne) on 2 April 2013 after the spin-off of wealth

management activities at Crédit Mutuel Arkéa, for an

acquisition cost of €115 million. Since the valuation at fair

value of the assets and liabilities acquired has not been

completed, the goodwill presented in the accounts (nearly

0) is provisional in nature. This acquisition is part of the

development of the Bank's private banking area and will

boost the range of the offer for this segment.

4.2 Deconsolidated companies

None.

4.3 Income statement at constant scope and exchange rates

(€ million)

Reported net profit/(loss)

Restated net profit/(loss) excluding scope

and exchange rate effects

2013 2012 2013 2012

Revenues and NBI 22,084 21,658 21,741 21,524

Purchases and other expenses (7,362) (7,108) (7,124) (7,014)

Personnel expenses (12,524) (12,599) (12,434) (12,573)

Taxes and levies (236) (235) (234) (235)

Depreciation, amortisation and provisions (1,306) (1,175) (1,294) (1,173)

Other current operating revenue and expenses 130 224 127 224

Pre-tax gains and losses on asset disposals (16) 52 (15) 52

Net operating expenses (21,314) (20,842) (20,974) (20,717)

Operating profit/(loss) 770 816 767 807

The restated net profit/(loss) eliminates the effect of all acquisitions made during the current year and the prior year’s

acquisitions concluded during the year. It also shows foreign currency transactions from the prior year at the average rate

during the current year.




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NOTE 5 Segment reporting

5.1 Definition of operating segments

5.2 Operating segment reporting

5.3 Geographical information

5.1 Definition of operating segments

The definition of operating segments for the purpose

of segment reporting is based on Le Groupe La Poste’s

current management organization. A business segment is

a distinguishable component for which separate financial

information is available and regularly reviewed by Group

Management for the purpose of allocating resources to the

segment and assessing its performance.

The criteria selected to define business segments

specifically include:

the nature of the products distributed;

the type or class of customer for whom they are

intended;

the production process and distribution network;

the regulatory environment.

Le Groupe La Poste has seven operating segments: Mail,

Parcels, Express, Banking activities, Real estate, La Poste

Retail Brand, and Shared Services. For the presentation

of its segment reporting, the Group chose to combine the

“Parcels” and “Express” segments, as these have similar

economic characteristics.

Mail

The Mail Business Line includes all of La Poste’s Mail

business (i.e. pick-up, sorting and delivery of letter

posts, advertising and press publications), as well as the

companies of the Sofipost sub-group.

Parcels & Express

The Parcels Business Line corresponds to all activities

carried out by La Poste under the ColiPoste brand.

The Express Business Line includes the GeoPost sub-

group’s brands, primarily DPD, Chronopost, Exapaq and

Seur.

Banking activities

The Banking activities segment includes the Banking and

Insurance activities of the La Banque Postale sub-group,

as well as the services provided by some La Poste staff to

La Banque Postale under service agreements.

La Poste Retail Brand

The La Poste Retail Brand segment encompasses the

sale and distribution activities intended for the general

public, the La Poste Mobile activities, Le Groupe La Poste’s

products and services, and other non-Group products.

Real estate

This segment manages all of the Group’s real estate assets

held by the Poste Immo sub-group, and also includes the

activities of the La Poste real estate Department.

Shared Services

This segment includes the “Corporate” activities of the

Group’s head office and Support Services Departments.

5.2 Operating segment reporting

The accounting principles applied to segment reporting

are the same as those used for the consolidated financial

statements, as described in Note 3.

The profits (losses), assets and liabilities that have been

allocated to the business segments are those profits

(losses), assets and liabilities that can be allocated directly

and indirectly to business segments.

The amounts unallocated to the business segments

primarily correspond to:

the net cost of regional development;

the cost of the accessibility constraint imposed on

La Poste (since 2011 and the complete end of postal

monopoly). This cost was previously allocated to the Mail

Business Line;

financial profit/(loss) and tax.

Segmentation of revenues: the segmentation of La Poste’s

revenue between the Mail and Parcels businesses is based

on accounting data and on a statistical analysis of the mail

and parcel volumes transported and delivered by the two

businesses.



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No Group customer accounts for more than 10% of

consolidated revenues.

Segmentation of operating expenses: given that the Mail,

Parcels, Banking activities and La Poste Retail Brand

segments coexist within La Poste, and that their production

processes are highly inter-connected, La Poste has set out

cost accounting principles in order to allocate shared costs

between these various segments and thereby determine

each segment’s profit (loss).

La Poste’s management accounting system operates on the

basis of the following principles:

The main services shared between the Mail and Parcels

segments (collection, sorting, transportation and

delivery) are re-invoiced on the basis of a price per item

or a lump sum.

The expenses for the La Poste Retail Brand post office

counters are re-invoiced to the businesses that use the

network on the basis of service agreements, where the

pricing mechanisms are based on measurable operating

metrics (revenues, and statistics measuring the time

required to perform various transactions, etc.).

Segmentation of non-current assets: intangible and

tangible assets are divided based on the allocation of the

corresponding assets for each business in La Poste’s

accounting system. The real estate assets held by La Poste

and the Poste Immo sub-group are allocated to the real

estate segment in their entirety.

A. Income statement by operating segment

2013

(€ million) Mail

Parcels &

ExpressBanking

activitiesRetail Brand

Real estate

Shared Services

Unalloca-ted (a) Eliminations Total

Non-Group revenue and NBI 10,461 5,947 5,522 92 62 22,084

Inter-segment revenue and NBI 642 41 17 4,138 845 825 (6,509)


Operating profit/(loss) 471 419 708 34 135 (211) (719) (67) 770

Financial profit/(loss) (223) (223)


Share in profits

of equity associates 10 3 200 2 215

Consolidated net profit/(loss) 635

Depreciation, amortisation,

provisions and impairment (221) (147) (485) (72) (241) (140) 0 (1,306)

(a) Primarily includes the contribution to regional development (including the costs relating to the accessibility constraint), financial profit/(loss) ,

and income tax.




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2012

(€ million) Mail

Parcels &

ExpressBanking

activitiesRetail Brand

Real estate

Shared Services

Unalloca-ted (a) Eliminations Total

Non-Group revenue and NBI 10,774 5,538 5,217 88 41 21,658

Inter-segment revenue and NBI 636 42 24 4,143 809 840 (6,496)


Operating profit/(loss) 684 403 621 16 109 (188) (832) 3 816

Financial profit/(loss) (284) (284)


Share in profits

of equity associates (3) 6 176 1 180

Consolidated net profit/(loss) 481

Depreciation, amortisation,

provisions and impairment (237) (162) (335) (73) (223) (145) (1,175)

(a) Primarily includes the contribution to regional development (including the costs relating to the accessibility constraint), financial profit/(loss) , and

income tax.



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B. Balance sheet by operating segment

As at 31 December 2013

ASSETS

(€ million) MailParcels &

ExpressBanking

activities


Real estate

Shared Services Eliminations Total

Intangible and tangible assets 1,100 2,214 1,005 138 3,350 550 (12) 8,345

Equity associates 11 69 2,522 31 2,634

Other non-current assets 26 46 203 10 (11) 4,229 (3,410) 1,094

Current assets 1,792 1,071 196,066 669 759 3,689 (1,442) 202,604

Total 2,930 3,401 199,796 818 4,129 8,468 (4,864) 214,677

Investments (a) 180 266 (525) 34 246 985 1,187

LIABILITIES


ExpressBanking

activities


Real estate


Shareholders’ equity 8,516 8,516

Bonds and other financial debt

(current and non-current) 308 784 3 26 1,657 7,309 (2,985) 7,103

Other non-current liabilities 828 248 217 517 56 67 1,933

Other current liabilities 2,204 976 193,341 692 366 987 (1,441) 197,125

Total 3,340 2,008 193,561 1,235 2,079 16,880 (4,426) 214,677(a) Purchase of intangible and tangible assets, and impact of changes in the scope of consolidation.




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ASSETS


ExpressBanking

activities


Real estate


Intangible and tangible assets 1,181 2,084 883 157 3,616 541 (12) 8,450

Equity associates 15 71 2,327 33 2,446

Other non-current assets 28 66 109 10 9 3,660 (2,875) 1,007

Current assets 1,750 936 192,152 784 652 3,938 (1,570) 198,641

Total 2,973 3,156 195,471 951 4,311 8,139 (4,457) 210,544

Investments (a) 270 197 205 37 302 173 1,184

LIABILITIES


ExpressBanking

activities


Real estate


Shareholders’ equity 7,535 7,535

Bonds and other financial debt

(current and non-current) 316 786 18 1,661 7,805 (2,934) 7,652

Other non-current liabilities 856 201 209 556 47 77 1,947

Other current liabilities 2,191 842 189,492 691 388 946 (1,140) 193,410

Total 3,363 1,829 189,701 1,265 2,096 16,363 (4,074) 210,544(a) Purchase of intangible and tangible assets, and impact of changes in the scope of consolidation.



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5.3 Geographical information

Revenues are broken down on the basis of paying customers’ location.

Le Groupe La Poste’s net non-current assets have been broken down by geographical area based on the location of the legal

entities that own the assets.


(€ million) FranceEuropean Union

(excluding France) Other Total

Revenues from commercial activities 12,678 3,276 608 16,562

Net Banking Income 5,522 - - 5,522

Operating revenue 18,200 3,276 608 22,084

Segment assets 214,028 478 171 214,677

Investments 1,056 124 7 1,187


(€ million) FranceEuropean Union

(excluding France) Other Total

Revenues from commercial activities 12,875 3,065 500 16,441

Net Banking Income 5,217 - - 5,217

Operating revenue 18,093 3,065 500 21,658

Segment assets 210,062 386 95 210,544

Investments 1,041 133 10 1,184




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Notes to the income statement

NOTE 6 Revenues

6.1 Mail revenue

6.2 Parcels & Express revenue

6.3 Other revenues

Le Groupe La Poste’s revenues from commercial activities are generated by the Mail (domestic and international), Express

and Parcels segments as well as by the La Poste Retail Brand and the real estate segment. These revenues broke down

as follows:

(€ million) 2013 2012


Of which Domestic mail 9,692 9,993

Of which International mail 770 781

Express revenue 4,379 4,016


La Poste Retail Brand revenue 92 88


Total 16,562 16,441

6.1 Mail revenue

Domestic Mail revenue broke down as follows:

(€ million) 2013 2012

Correspondence and other La Poste products and services 6,688 6,928

Advertising mail 1,401 1,514

Press 679 701

Other products and services of the subsidiaries 923 851

Total 9,692 9,993

“Press” revenue include contractual compensation paid

in consideration for the reduced tariffs granted to press

organizations as well as the compensation of press

operators.

“Other Products and Services” of the subsidiaries consist

mainly of the following companies’ revenues:

€351 million from Mediapost, the leader in unaddressed

advertising mail and a specialist in geo-marketing

(€343 million in 2012);

€66 million from Docapost BPO IS (formerly Dynapost),

a specialist in the integrated processing of business mail

(€64 million in 2012);

€106 million from Docapost DPS (formerly Asphéria) and

Orsid, which specialise in electronic publishing solutions

and industrial document processing (€112 million in

2012);

€163 million from Docapost BPO SAS (formerly Extelia),

which specialises in industrial document and data

processing (€163 million in 2012).



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International Mail revenue broke down as follows:

(€ million) 2013 2012

Terminal fees 162 179

Mail franked at post office counters 120 129

Other International Mail products 488 473

Total 770 781

Terminal fees are the payments received by La Poste for

delivering mail from abroad in France. They are determined

on the balance-sheet date based on estimates of the weight

and number of items delivered known at that date.

Other international Mail products consisted of:

€220 million in revenue earned from businesses and the

public sector for La Poste (€206 million in 2012);

€268 million in revenue from the international unit

companies (€266 million in 2012).

6.2 Parcels & Express revenue

Revenue from the Express segment is earned entirely by the GeoPost sub-group, and is broken down as follows:

(€ million) 2013 2012

Express France 1,089 1,016

Express Rest of World 3,291 2,999

Total 4,379 4,016

Revenue from the Parcels segment broke down as follows:

(€ million) 2013 2012

Parcels franked at post office counters 462 455

Other Parcels products 1,105 1,066

Total 1,567 1,522

The other Parcels products are generated by the ColiPoste

business, the La Poste parent company in-house operator,

with companies and local authorities.

6.3 Other revenues

La Poste Retail Brand revenue include the revenues of

La Poste Mobile, as well as commissions received on third-

party sales (excluding Mail, Parcels and Financial Services)

carried out at post office counters (such as telephone card

sales) and on sales of miscellaneous products.

Real estate revenue corresponds to the rentals agreed with

non-Group tenants.




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NOTE 7 Net Banking Income

The Group’s Net Banking Income broke down as follows:

(€ million) 2013 2012

Interest and similar income 5,656 6,103

Interest and similar income on treasury and inter-bank transactions 2,037 2,427

Interest and similar income on customer transactions 2,095 1,856

Interest on available-for-sale financial assets held to maturity, and on hedging

transactions 1,524 1,820

Interest and similar expenses (2,380) (3,287)

Interest and similar expenses on treasury and inter-bank transactions (35) (23)

Interest and similar expenses on customer transactions (2,084) (2,722)

Interest on debt evidenced by a certificate and hedging transactions (261) (542)

Commission income 2,279 2,144

Commission expenses (231) (237)

Net gains and losses on financial instruments at fair value through profit or loss 23 244

Net gains and losses on available-for-sale assets 129 163

Margin on insurance activities 85 76

Income and expenses from other activities (39) 11

Total 5,522 5,217

Total income 8,248 8,815

Total expenses (2,726) (3,597)

NOTE 8 Purchases and other external expenses

Purchases and other expenses broke down as follows:

(€ million) 2013 2012

External services and general sub-contracting 1,539 1,523

Purchases 634 652

Outsourced transport 3,216 2,995

International mail delivery services 160 173

Rental expenses 744 690

Maintenance and repair costs 401 398

Telecommunications expenses 134 139

Travel and assignments 187 183

Other expenses 346 357

Total 7,362 7,108



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NOTE 9 Personnel expenses and headcount

9.1 Personnel expenses

9.2 Headcount

9.1 Personnel expenses

A breakdown of personnel expenses by type of cost is provided below:

(€ million) 2013 2012

Wages and salaries, bonuses and allowances 8,640 8,521

Pension contributions 1,398 1,367

Other social security contributions 1,789 1,751

Employee welfare costs 210 203

CICE revenue (255)

Change in post-employment provisions 1 (6)

Change in provisions for social security contingencies and staff litigation 22 3

Change in other employee provisions (96) (47)

Compensation-based taxes and duties 814 807

Total 12,524 12,599

The “Pension contributions” line item corresponds

to contributions paid in to post-employment defined

benefits plans. Following the implementation of the new

funding arrangements for the pensions of government

employees, this line item primarily includes the full

discharge contribution provided for by law.

The “CICE revenue” line item corresponds to the Tax

Credit to promote Competitiveness and Employment

(CICE) which was implemented in 2013 (see Note 1.2).

9.2 Headcount

The Group’s average headcount has changed as follows:

(full-time employee equivalents per year) 2013 2012

Average headcount 266,369 266,618




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NOTE 10 Taxes and levies

Taxes and levies consist of the following items:

(€ million) 2013 2012

Local taxes 152 150

Other taxes and levies 84 86

Total 236 235

La Poste benefits from favourable local tax treatment

in consideration for La Poste’s obligation to serve the

entire French territory, and its contribution to regional

development (Act of 2 July 1990, as rearranged by the Act

of 9 February 2010).

In this regard, La Poste enjoyed an 85% reduction in its

corporate tax base in the property tax base for its business

premises, as well as a 78% reduction on the added value

used for the purposes of calculating the Corporate Value-

Added Contribution (CVAE) (Article 1635 sexies of the French

General Tax Code and Decree No.2012-1480 of 27 December

2012).

Local business tax (CET) is recognised under “Local taxes”.

NOTE 11 Depreciation, amortisation, provisions and impairment

Changes in depreciation, amortisation, provisions and impairment that had an impact on operating profit/(loss) broke down

as follows:

(€ million) 2013 2012

Net depreciation and amortisation

Intangible assets 269 251

Tangible assets 727 708

996 960

Net provisions and impairment

Goodwill 19

Other non-current assets 10 18

Inventories 0 1

Accounts receivable 4 8

Losses on unrecoverable receivables 24 19

Provisions for contingencies and losses 118 (3)

156 63

Cost of risk (Banking activities)

Cost of risk and other impairments charges and risks (Banking activities) (a) 50 (45)

Banking activities cost of risk—unrecoverable receivables 105 197

154 152

Total 1,306 1,175(a) Including €15 million in impairments related to the Greek sovereign debt crisis in 2012.



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The impairment of goodwill is broken down in Note 15.3.

A description of the changes in the depreciation,

amortisation and impairment of non-current assets is

provided in Notes 16 and 17.

A breakdown of changes in the impairment of inventories

and accounts receivable is provided in Notes 21 and 22.

Changes in provisions for contingencies and losses are

detailed in Note 26.

NOTE 12 Other operating revenue and expenses

Other operating revenue and expenses broke down as follows:

Income/(expenses)(€ million) 2013 2012

Capitalised production 102 112

Production transferred to inventories (14) 40

Royalties (26) (22)

Revenue recorded following an acquisition of control (a) 1 14

Accretive effect of the CNP Assurances capital increase (b) 8 14

Other current operating revenue and expenses 59 65

Total 130 224(a) In 2012, this amount included €7 million relating to the acquisition of control over Seur SA and €6 million relating to the acquisition of control over IBC.

(b) See Note 18.1.

Capitalised production primarily consists of IT development costs recognised as intangible assets.

NOTE 13 Financial profit/(loss)

13.1 Cost of net financial debt

13.2 Other financial items

13.1 Cost of net financial debt

(€ million) 2013 2012

Interest expense on financing transactions (a) (194) (193)

Change in the fair value of borrowings and debt-related swaps (b) (24) (61)

Income from cash and cash equivalents (c) 20 33

Total (198) (221)(a) Including interest and proceeds from the termination of debt-related derivatives.

(b) Including fair value hedges on borrowings.

(c) Including changes in the fair value of cash or financial assets.




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The measurement of the bonds recognised at fair value

through profit or loss using the fair value option as at

31 December 2013 takes into account the decrease in the

cost of credit risk experienced in 2013. This change resulted

in an increase in the fair value of the bonds recognised in

the financial statements according to the fair value through

profit or loss method and, had a negative €51 million impact

on 2013 financial profit/(loss).

The decrease in the cost of credit risk in 2012 had a negative

€45 million impact on financial profit/(loss) in that year.

13.2 Other financial items

Discounting expenses

(€ million) 2013 2012

Provisions for employee benefits and return on plan assets (37) (67)

Other provisions (0) (1)

Total (37) (68)

Other financial income and expenses

(€ million) 2013 2012

Net foreign exchange gains 4 0

Additions to and reversals of provisions 6 2

Other financial income and expenses 2 3

Total 12 5

NOTE 14 Income tax

14.1 Income tax expense recognised in income

14.2 Tax on other comprehensive income

14.3 Tax proof

14.4 Deferred tax recognised on the balance sheet

14.5 Breakdown of deferred tax by type

14.6 Unrecognised deferred tax assets

14.1 Income tax expense recognised in income

(€ million) 2013 2012

Current tax (expense) (139) (235)

Deferred tax income/(expense) 11 4

Total tax income/(expense) (127) (231)



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The current tax expense represents the amount paid or payable in the short-term to the tax authorities in respect of the

financial year, based on the rules prevailing in the various countries and on specific tax conventions.

14.2 Tax on other comprehensive income

(€ million) 2013 2012

Change in unrealised gains and losses on financial instruments

Amount before tax 41 344

Tax impact (8) (128)

Amount net of tax 32 216

Translation adjustments

Amount before tax (31) 7

Tax impact

Amount net of tax (31) 7

14.3 Tax proof

The explanation of the tax reconciliation is as follows:

(€ million) 2013 2012

Net profit/(loss), Group share 627 479

Share in profits of equity associates (215) (180)

Corporation tax 127 231

Non-controlling interests 8 2

Consolidated profit (loss) before tax and share in profits of equity associates 548 532

Theoretical tax expense (at 38% in 2013 and 36.10% in 2012) (a) (208) (192)

Prior tax-loss carry forwards deducted during the financial year 3 2

Unused tax losses created during the financial year (12) (21)

Limitation and creation of deferred tax assets 0 (32)

Limitation and creation of deferred tax assets on the Home Loan Savings provision 4 (49)

Tax rate differential for foreign subsidiaries 30 24

Tax benefits, tax credits and foreign tax allowances 12 13

Impairment (7)

Contribution revaluations and gains 16

Cancellation of internal gains/(losses) 11

Tax on distributed revenue (5)

Permanent differences 51 3

Other Items (2)

Tax restatements 81 (39)

Actual tax charge (127) (231)(a) Including the 3.3% social solidarity contribution and the one-off contribution of 10.7% in 2013 and 5% in 2012.




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14.4 Deferred tax recognised on the balance sheet

(€ million)Deferred

tax assetsDeferred

tax liabilities Total

31/12/2011 205 103 102

Impact on net profit/(loss) (2) (6) 4

Reclassifications 26 26

Impact on equity (118) 12 (130)

Change in consolidation scope 2 7 (5)

31/12/2012 113 142 (29)

Impact on net profit/(loss) 31 20 11

Reclassifications (3) (3) 0

Impact on equity 7 7

Change in consolidation scope 4 7 (3)

31/12/2013 153 166 (14)

Net tax assets are limited to each tax entity’s ability to recover its assets in the near future.

14.5 Breakdown of deferred tax by type

(€ million) 31/12/2013 31/12/2012

Deferred tax assets

Employee benefits 394 377

Other non-deductible provisions 45 47

Other timing differences 95 101

Swaps and similar 20 30

Tax loss carry-forwards 3 2

Other tax timing differences 14 7

Asset/liability offsets (a) (419) (452)

Total assets 153 113

Deferred tax liabilities

Regulated provisions 117 120

Revaluation of contributions to Poste Immo 162 170

IAS 32-39 Financial instruments 93 119

Deductible goodwill 129 113

Other tax timing differences 84 72

Asset/liability offsets (a) (419) (452)

Total liabilities 166 142(a) Deferred tax assets and liabilities are offset for each tax entity or tax consolidation group.



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14.6 Unrecognised deferred tax assets

Type and amount of unrecognised deferred tax asset bases

(€ million)

31/12/2013

French companies in the tax

consolidation group

Non-consolidated French

companiesForeign

companies Total

Home Loan Savings Provision 293 293

Employee benefits 828 828

Other timing differences 3 2 7 12

Ordinary tax losses 179 58 237

Total 1,124 181 65 1,370

Unrecognised deferred tax asset bases amounted to €1,330 million as at 31 December 2012.




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Notes to the balance sheet

NOTE 15 Goodwill

15.1 Breakdown of goodwill

15.2 Change in the net book value of goodwill

15.3 Impairment

15.1 Breakdown of goodwill

(€ million)CGU Segment

Net book value as at 31/12/2013

Net book value as at 31/12/2012

GeoPost Central Europe Express 466 462

Exapaq Express 334 334

GeoPost Spain Express 248 238

GeoPost UK Express 130 133

Mediapost Mail 115 120

Sogec 44 44

Adverline 23 27

Mediapost 24 24

Media Prisme 15 15

Cabestan 9 9

Docapost Mail 82 82

Docapost BPO formerly Extelia) 47 47

Orsid 22 22

Sefas 8 8

Other Docapost unit companies 6 6

DPD Laser Finance Express 39 50

Viapost Mail 39 45

Morin 28 34

Orium 11 11

Asendia Mail 30 30

Tocqueville Group Banking activities 27 27

Tigers Express 23

DTDC Express 19

Other Express companies Express 26 32

Other banking companies Banking activities 8 8

Other 2 2

Total 1,587 1,562

Mail 266 277

Express 1,284 1,249

Banking activities 36 36

Other 2 2



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15.2 Change in the net book value of goodwill

(€ million) 2013 2012

Opening balance 1,562 1,417

Of which:

Gross amount 1,698 1,534

Impairment (136) (117)

Acquisitions 53 167

Disposals (1)

Reclassifications and other (9) (2)

Translation adjustments (19) 1

Impairment (19)

Closing balance 1,587 1,562

Of which:

Gross amount 1,722 1,698


The main addition to goodwill during the financial year

relates to the acquisition of Tigers, a company specialised

in freight forwarding that is based in Hong Kong, resulting

in goodwill of €23 million.

15.3 Impairment

Le Groupe La Poste tests goodwill for impairment annually

or more frequently if events or changes indicate that it may

be impaired. This annual impairment test is carried out in

the last quarter of each year.

Impairment tests are also carried out on intangible and

tangible assets where there is an indication they may have

been impaired.

Impairment of goodwill

Goodwill is allocated to Cash Generating Units as follows:

Mail segment: one CGU for each business unit and for

certain subsidiaries;

Express segment: one CGU per geographical area, and

one CGU for the Exapaq group;

Banking activities segment: one CGU per business unit.

This impairment test involves comparing the net book value

of the CGUs, including any goodwill, to their recoverable

value.

To determine the recoverable value of a CGU, the Group

calculates its value-in-use, based on the valuation of the

discounted cash flows the CGU will generate in future years.

This assessment reflects the most recent information that

the Group has used for its in-house planning processes

and drawing for up its budget. It is also based on discount

rates that reflect the CGU’s credit profile and risk profile.

This approach is supplemented by a valuation using the

multiples method to the extent that sufficient information

is available.

If the CGU’s recoverable value falls below its net book

value, an impairment is recognised and initially charged to

goodwill.




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The main assumptions used for the Group’s impairment tests are as follows:

Discount rate Standard growth rate

Number of projected yearsSegment Euro zone Other

2013

Mail 7% to 7.8% 7.0% 2% 5

Express 6.4% to 9% 7.1% to 10.9% 2% 5

Banking activities 7.7% - 1% 5

2012

Mail 7% to 8.6% - 2% 5

Express 7% to 10% 7% to 12.6% 2% 5

Banking activities 10.3% - 2% 5

The tests performed on the Group’s goodwill in 2013 did not

lead to the recording of any impairment.

For the year ended 31 December 2012, the Group had

recognised impairment on GeoPost Spain (Express

segment) for an amount of €19 million.

Sensitivity analysis

A one point increase in the discount rate or a half point

decrease in the growth rate in perpetuity would not have

had a material impact on the results of the impairment

tests as at 31 December 2013.

Impairment of intangible and tangible assets

An impairment test was carried out on La Poste’s Mail

CGU as at 31 December 2013, following the identification

of indications of impairment. This test did not reveal any

impairment as at 31 December 2013.



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NOTE 16 Intangible assets

(€ million)

Software, patents and

licences

Intangible assets in progress

Other intangible

assets Total

GROSS AMOUNT

Balance as at 31/12/2011 1,252 159 702 2,113

Acquisitions 65 144 56 266

Disposals (14) (1) (6) (21)

Change in consolidation scope 40 0 34 75

Transfers 79 (104) 27 2

Balance as at 31/12/2012 1,424 198 814 2,435

Acquisitions 52 147 40 239

Disposals (310) (26) (10) (346)

Change in consolidation scope 6 (0) 13 18

Transfers 101 (140) 56 17

Balance as at 31/12/2013 1,272 179 912 2,364

DEPRECIATION AND IMPAIRMENT

Balance as at 31/12/2011 (929) N/A (397) (1,326)

Depreciation for the year (162) (89) (251)


Reversals on disposals 14 5 19

Change in consolidation scope (32) (6) (38)

Balance as at 31/12/2012 (1,122) N/A (488) (1,610)

Depreciation for the year (172) (97) (269)

Impairment 0 0

Reversals on disposals 323 10 332

Change in consolidation scope (1) 0 (1)

Balance as at 31/12/2013 (973) N/A (575) (1,547)

NET AMOUNT

As at 31/12/2012 301 198 326 825

As at 31/12/2013 299 179 338 816

The “transfer” lines relate to the commissioning of assets.




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NOTE 17 Tangible assets

(€ million)Land and buildings

Machinery and

equipment VehiclesOther tangible

assetsAssets under construction Total

GROSS AMOUNTBalance as at 31/12/2011 4,723 2,363 777 2,764 289 10,915Acquisitions 27 78 145 183 387 820

Disposals (135) (205) (105) (174) (8) (626)

Change in consolidation scope 17 34 3 27 0 80

Transfers 226 42 18 117 (424) (22)

Translation adjustments 4 2 (0) 1 2 9

Balance as at 31/12/2012 4,861 2,315 838 2,918 245 11,176Acquisitions 17 106 168 157 321 769

Disposals (92) (65) (126) (173) (1) (456)

Change in consolidation scope 12 9 1 10 0 33

Transfers 90 144 2 89 (382) (57)

Translation adjustments (4) (2) (5) (2) (1) (12)

Balance as at 31/12/2013 4,884 2,508 878 3,000 183 11,453

DEPRECIATION AND IMPAIRMENTBalance as at 31/12/2011 (968) (1,568) (367) (1,916) N/A (4,820)Depreciation for the year (186) (181) (88) (253) (708)

Impairment (8) (5) (12)

Reversals of impairment 7 (0) 0 7

Reversals on disposals 29 197 78 161 465

Change in consolidation scope (7) (22) (2) (23) (55)

Transfers 13 1 (0) (2) 12

Translation adjustments (1) (1) (0) (1) (3)

Balance as at 31/12/2012 (1,122) (1,575) (383) (2,034) N/A (5,114)Depreciation for the year (198) (181) (91) (257) (727)

Impairment (23) (5) (28)

Reversals of impairment 18 (0) 0 0 18

Reversals on disposals 32 62 91 164 350

Change in consolidation scope (3) (17) (1) (2) (23)

Transfers 25 (17) 1 (1) 8

Translation adjustments 1 1 2 1 5

Balance as at 31/12/2013 (1,269) (1,726) (388) (2,129) N/A (5,512)

NET AMOUNTAs at 31/12/2012 3,739 740 454 884 245 6,062As at 31/12/2013 3,614 782 491 871 183 5,941

Of which finance leases

As at 31/12/2012 51 20 13 7 91

As at 31/12/2013 48 27 12 5 92

The transfer lines correspond to the commissioning of assets and to the reclassification of certain tangible assets to “assets

held for sale” (see Note 24).



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NOTE 18 Equity associates

18.1 Change in investments in associates

18.2 Summary of financial information on CNP Assurances

18.1 Change in investments in associates

(€ million)CNP

Assurances XangeOPCI

AkateaYurtici Kargo Other Total

Balance as at 31/12/2011 1,945 17 18 38 29 2,048

Group share in the profits of equity associates 176 (3) 1 5 1 180

Dividend payments(a) (3) (3) (2) (8)

Net change in the fair value of financial

instruments and AFS securities 221 1 (0) 222

Change in consolidation scope (0) 2 2

Capital increase (2) 10 1 10

Transfers and reclassifications 7 7

Translation adjustments (23) 1 0 (22)

Accretive effect of the capital increase 14 14

Other (7) (7)

Balance as at 31/12/2012 2,327 14 33 41 32 2,446

Group share in the profits of equity associates 200 11 2 4 (1) 215

Dividend payments (1) (4) (4) (1) (9)

Net change in the fair value of financial

instruments and AFS securities 26 (4) 0 22

Impairment

Change in consolidation scope 9 9

Capital increase (13) 3 (11)

Transfers and reclassifications 0 0

Translation adjustments (36) (8) 0 (44)

Accretive effect of the capital increase 8 8

Other (2) (2)

Balance as at 31/12/2013 2,522 8 31 33 40 2,634(a) The Group chose to receive the stock dividend from CNP Assurances in 2013 (as in 2012), which resulted in the acquisition of 17,504,455 new shares

of CNP Assurances, thus causing its interest to rise to 20.15% (compared to 19.98% as at 31 December 2012). This transaction resulted in a profit of

€8 million being recognised in income, compared to €14 million in 2012 (see Note 12).




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18.2 Summary of financial information on CNP Assurances

(on a 100% basis, in € million) 31/12/2013 31/12/2012

Revenue from ordinary activities 42,627 43,524

Profit for the year (Group share and non-controlling interests) 1,323 1,258

Equity (Group share and non-controlling interests) 15,994 15,588

Total assets 365,984 353,216

The fair value of the Group’s investment in CNP Assurances as at 31 December 2013, based on the market price at that date,

was €2,060 million.

NOTE 19 Other financial assets

(€ million)

31/12/2013 31/12/2012

Current Non-current Current Non-current

Unconsolidated investments 185 164

Provisions for unconsolidated investments (30) (33)

Deposits and guarantees paid 39 17 53 15

Financial derivatives 129 290 87 464

Loans for local authority housing 4 76 4 79

Provisions for loans for local authority housing (33) (36)

Financial assets held for investment purposes 252 404 629 186

Other financial assets 7 43 9 64

Provisions for other financial assets (0) (8) (2) (9)

Total 430 942 781 891

Unconsolidated equity investments

(€ million)

31/12/2013 31/12/2012

Percentage held Gross amount Net amount Net amount

Crédit Logement 6% 98 98 81

Xange Capital 2 40% 12 12 12

Asset Management LAB 100% 5 5 5

Other 70 39 32

Total 185 155 131

The wholly-owned unconsolidated investments comprise wholly-owned dormant companies, companies in the process of

being liquidated or companies with non-material balance sheets and income statements.



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Deposits and guarantees

This line primarily corresponds to the security deposits paid

in respect of financial instruments put in place to manage

bond debt (€35 million as at 31 December 2013, compared

with €48 million as at 31 December 2012).

Financial derivatives

The financial derivatives line represents instruments put

in place to manage the interest rate and currency risks on

debt. They must therefore be looked at together with “Bonds

and other financial debt”. A breakdown of these derivatives

can be found in Note 27.4.

Financial assets held for investment purposes

These are assets acquired as part of the cash management

process, where the original maturity is greater than three

months. These financial assets consist primarily of bonds

(€555 million as at 31 December 2013, and €353 million as

at 31 December 2012), and negotiable debt securities where

the maturities usually range between three and 12 months

(€100 million as at 31 December 2013 and €205 million as

at 31 December 2012). As at 31 December 2012, this line

item also comprised term deposits accessible after more

than three months, for an amount of €250 million.

Loans for local authority housing

These loans primarily consist of loans to construction

entities with very long-term maturities.




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NOTE 20 Banking activities financial assets

20.1 Customer loans and receivables

20.2 Receivables from credit institutions

20.3 Securities portfolio

20.4 Other banking financial assets

20.5 Banking accruals

20.1 Customer loans and receivables

(€ million) 31/12/2013 31/12/2012

Ordinary customer receivables 679 572

Other customer receivables 66 41

Doubtful receivables 155 158

Provisions (138) (138)

Customer sight loans and receivables 763 633

Short-term credit facilities 3,271 2,625

Home loans 49,646 44,993

Loans to legal entities 3,370 666

Securities received under repurchase agreements 350 140

Doubtful receivables 474 244

Provisions (172) (78)

Term customer loans and receivables 56,939 48,591

Finance lease transactions 561 172

Securities equivalent to customer loans and receivables 942 526

Total 59,204 49,922

This line primarily consists of home loans, which are

continuing to expand.

Short-term credit facilities primarily include:

€3,234 million in consumer loans;

deferred amounts on customers’ Carte Bleue cards.

An assessment of the risk exposure of customer loans

(primarily home loans) and of impairments is shown in

Note 33.7.

The “Securities equivalent to customer receivables and

loans” line primarily corresponds to certain financial

assets classified in the “available for sale” category, which

were reclassified to “loans and receivables” on 1 July 2008

pursuant to the IAS 39 amendment published in October

2008 (see Note 34.5).



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20.2 Receivables from credit institutions

(€ million) 31/12/2013 31/12/2012

Ordinary accounts receivable 136 240

Overnight deposits and loans 12 12

Sight loans and receivables—credit institutions 148 252

Term accounts and loans 78,560 77,207

Securities received under repurchase agreements 1,654 408

Subordinated and participating loans 191 183

Term deposits and loans—credit institutions 80,404 77,798

Securities equivalent to loans and receivables due from credit institutions 2,342 3,204

Total 82,894 81,254

Term accounts and loans primarily include accounts opened

at Caisse des Dépôts in connection with the centralisation

of regulated products, primarily Livret A passbook savings

accounts, Sustainable Development, and Popular savings

accounts.

In the "Securities equivalent to loans and receivables due

from credit institutions" line, securities from the Held-

for-sale assets category only amounted to €5.2 million,

following the reclassifications performed on 1 July 2008 and

authorised by the amendment to IAS 39 in October 2008.

An assessment of credit risks on receivables due from

credit institutions (Banking activities) is set out in Note 33.7.

20.3 Securities portfolio

(€ million) 31/12/13 31/12/12

Government securities and similar 28,889 33,162

Bonds and other fixed-income securities(a) 3,377 3,874

Financial assets held to maturity 32,266 37,036

Government securities and similar 2,086 1,960

Bonds and other fixed-income securities 8,751 6,925

Equities and other variable-income securities(b) 1,061 1,008

Available-for-sale financial assets 11,898 9,892

Government securities and similar 105 289


Equities and other variable-income securities 40 47

Financial assets held for transaction purposes 5,239 6,791

Interest-rate derivatives 241 265

Foreign exchange derivatives 3 3

Equity and index derivatives 7 2

Derivatives/Positive Fair Value 250 270

Financial assets at fair value through profit or loss 5,489 7,061

Revaluation adjustment on hedged portfolios (fair value hedges) 130 293

Total 49,784 54,281(a) FI: fixed income.

(b) VI: variable income.




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The general principles governing the recognition of

securities and derivatives for the Banking activities are set

out in Notes 3.L.2 to 3.L.5.

The fair value calculation methods for Banking activities

financial instruments are set out in Note 34.2.

An assessment of credit risks for the main items in the

Banking activities securities portfolio can be found in

Note 33.7.

20.4 Other banking financial assets

(€ million) 31/12/2013 31/12/2012

Deposits and guarantees paid 490 552

Other miscellaneous receivables(a) 514 549

Accrued income 196 204

Total 1,200 1,305(a) Other receivables primarily consist of ongoing transactions with customers. The change in this line should be considered together with that of liability

accruals.

20.5 Banking accruals

Banking activities accruals primarily consist of accounts pending settlement of transactions with retail customers.

Accruals—Assets

(€ million) 31/12/2013 31/12/2012

Prepaid expenses 30 32

Collection accounts 93 61

Settlement accounts for securities transactions 10 7

Other insurance assets 213 173

Other accruals—Assets 838 2,114

Total 1,185 2,387

Accruals—Liabilities

(€ million) 31/12/2013 31/12/2012

Settlement accounts for securities transactions 11 10

Other accruals—Liabilities 1,992 3,483

Total 2,003 3,493



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NOTE 21 Inventories and work-in-progress

(€ million)

31/12/2013 31/12/2012

Gross amount Provisions Net amount Net amount

Raw materials and supplies inventories 21 (1) 20 19

Goods inventories 7 (1) 6 6

Other supplies inventories 81 (4) 78 89

Finished and semi-finished product inventories 31 (0) 31 34

Property works in progress 1 1 56

Total 142 (6) 136 203

Inventories primarily consist of:

spare parts for technical facilities;

finished products sold in the post office network (primarily stamp-collecting products);

property works in progress (property development activity).

NOTE 22 Trade and other receivables

(€ million) 31/12/2013 31/12/2012

Advances and deposits paid 36 32

Trade receivables and related accounts 1,936 1,795

Provisions on trade receivables and related accounts (88) (83)

International mail receivables 494 437

CICE tax credit receivable 255

Other receivables 333 302

Provisions on other receivables (29) (29)

Total 2,936 2,453

International Mail receivables (€494 million) are primarily

owed by foreign post offices for the delivery of the mail that

they have passed on in France.

Likewise, trade and other payables include an international

mail service liability (see Note 31) of €488 million owed to

foreign postal operators for mail to be delivered outside of

France passed on by La Poste to these post operators for

delivery.

Other receivables as at the end of December 2013 primarily

included:

a €37 million recoverable VAT receivable from the French

government for VAT credits from major refurbishment

work on the property portfolio performed in 2013;

€8 million in receivables on disposals of tangible and

intangible assets.




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NOTE 23 Cash and cash equivalents

23.1 Cash and cash equivalents

23.2 Cash and central bank deposits (Banking activities)

23.1 Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, bank balances and short-term investments in monetary instruments.

These investments, which were initially due to mature in less than three months, are readily convertible into a known amount

of cash and are exposed to a negligible risk of a change in value.

(€ million) 31/12/2013 31/12/2012

Cash equivalents 1,973 2,011

Cash at bank 183 149

Cash on hand 7 7

Total 2,163 2,167

Cash and cash equivalents consisted mainly of units in

money-market units for an amount of €1,045 million

(€1,051 million as at 31 December 2012), and term deposits

accessible at any time, or within three months, for an

amount of €875 million (€925 million as at 31 December

2012).

Cash held at post offices

Cash held at post offices is not included in the “Cash and

cash equivalents” line item. Because of the low availability

of cash held at post offices, which is needed for the running

of the post offices, and because it bears no interest, the

Group treats it as a current use and includes it on a specific

balance sheet line. Cash held at post offices amounted

to €612 million as at 31 December 2013, compared with

€719 million as at 31 December 2012.

In the cash flow statement, cash held at post offices is also

excluded from cash at the beginning and end of the period.

Changes in cash held at post offices are shown under “Cash

flows from operating activities”.

23.2 Cash and central bank deposits (Banking activities)

(€ million) 31/12/2013 31/12/2012

Cash on hand 274 247

Central banks 1,296 2,478

Central bank related receivables 0 1

Total 1,570 2,726

NOTE 24 Assets and liabilities held for sale

The assets held-for-sale as at 31 December 2013 and 2012 corresponded to properties under promise of sale.



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NOTE 25 Share capital

As at 31 December 2013, the share capital amounted to

€3.8 billion, divided into 950 million ordinary shares with a

par value of €4 each. As at that date, 73.7% of the capital

was owned by the French government and 26.3% was owned

by Caisse des Dépôts.

Background

On 1 March 2010, La Poste became a public limited

company, with a share capital set at €1 billion, split into

500 million fully paid-up shares with a par value of €2 each.

This share capital is, by law, wholly-owned by the French

government or government-owned entities, except for any

portion reserved for La Poste employees.

Prior to that date, La Poste was an independent

government-owned company, with no share capital within

the legal meaning of the term.

April 2011 capital increase

At its 10 February 2011 meeting, the Board of Directors

approved the planned €2.7 billion capital increase, to which

the French government was to subscribe €1.2 billion and

Caisse des Dépôts €1.5 billion.

The Extraordinary General Meeting of 6 April 2011 approved

the following resolutions:

share capital increase of €1 billion through an increase

of the par amount of the existing shares from €2 to €4,

via the incorporation of reserves;

issue of 350 million new shares with equity warrants

(ABSA) with a unit price of €6, including a par value of

€4 and an issue premium of €2, i.e. a total of €2.1 billion

including €1.4 billion in capital and €700 million in issue

premiums;

an equity warrant (BSA) is attached to each new share.

The BSAs will entitle their holders to subscribe to

100 million new shares between 1 March and 30 April

2013 for a total amount of €600 million, including

€400 million in capital and €200 million in issue

premiums. The government and Caisse des Dépôts have

made an irrevocable commitment to exercise all of their

BSAs no later than the last day of the exercise period

(i.e. 30 April 2013);

inclusion of Caisse des Dépôts in the Group’s governing

bodies, with three representatives on the Board of

Directors.

A first payment of €1.05 billion for the capital issued was

made in April 2011, and included €467 million from the

government and €583 million from Caisse des Dépôts. The

second payment of €1.05 billion, which was identical to the

first, was paid in April 2012.

In April 2013, the French government and Caisse des

Dépôts exercised the 350 million in equity warrants they

were holding, which resulted in the issuance of 100 million

new shares at a unit price of €6, €2 of which was an issue

premium.




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NOTE 26 Provisions for contingencies and losses

26.1 Specific provisions for the Insurance and Banking activities

26.2 Other provisions for contingencies and losses

26.1 Specific provisions for the Insurance and Banking activities

As at 31 December 2013, underwriting provisions for the Insurance and Banking activities, classified as current provisions

for contingencies and losses, broke down as follows:

(€ million)

Home Loan

Savings risk

Insurance underwriting

provisions Total

Non-current provisions

Current provisions 194 530 724

Balance as at 31/12/2011 194 530 724

Addition for the year 137 601 738

Reversal for use (489) (489)

Net reversal of the Home Loan Savings provision

Other movements 31 31


Current provisions 331 674 1,005

Balance as at 31/12/2012 331 674 1,005

Addition for the year 0 734 734

Reversal for use (23) (586) (609)

Net reversal of the Home Loan Savings provision

Other movements 0 (5) (5)


Current provisions 308 817 1,126

Balance as at 31/12/2013 308 817 1,126

The provision for Home Loan Savings risk is intended to cover the negative impact of Home Loan Savings deposits for lending

institutions authorised to accept them, given the commitments that they imply (see Note 3.Q).



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This provision was subject to a net decrease of €23 million over the financial year, which broke down as follows:

(€ million)Amounts collected

PEL and CEL amounts granted

2013 provisions

2012 provisions

Net movements 2012/2013

Age

Over 10 years 7,630 96 118 (22)

4 to 10 years 6,872 100 35 65

Under 4 years 6,787 39 115 (76)

Total Home Loan Savings Plans (PEL) 21,289 155 235 268 (33)

Total Home Loan Savings Accounts (CEL) 5,699 882 73 63 10

Total 26,988 1,037 308 331 (23)

26.2 Other provisions for contingencies and losses

As at 31 December 2013, the other provisions for contingencies and losses broke down as follows:

(€ million)Employee-related

disputes Other disputes Other Total

Non-current provisions 19 34 41 94

Current provisions 52 54 264 371

Balance as at 31/12/2011 71 88 305 464

Addition for the year 39 30 49 118

Reversal for use (19) (8) (23) (49)

Reversal of provisions no longer required (17) (31) (15) (62)

Discounting 0 1 1 3

Other movements (0) (1) 2 1



Balance as at 31/12/2012 75 81 319 475

Addition for the year 75 56 180 311

Reversal for use (26) (18) (48) (93)

Reversal of provisions no longer required (29) (37) (11) (77)

Discounting (0) 0 (1) (1)

Other movements 2 (1) 4 5



Balance as at 31/12/2013 97 80 443 620

Provisions for employee disputes cover all employee

disputes (industrial tribunal, etc.) and ongoing disputes with

social security bodies.

Provisions for other disputes relate to disputes brought

before administrative, civil or commercial courts.

As at 31 December 2013, other provisions included a

€119 million provision intended to cover the guarantee

granted by La Banque Postale to guaranteed-performance

funds (compared with €127 million as at 31 December 2012).




es,ernts 20

NOTE 27 Bonds and other financial debt

27.1 Breakdown of financial debt

27.2 Breakdown of debt by maturity

27.3 Bonds

27.4 Bond derivatives

27.5 Other financial debt

27.1 Breakdown of financial debt

31/12/2013 31/12/2012

(€ million) Short-termMedium-and

long-term Short-termMedium-and

long-term

Financial debt at amortised cost 673 3,461 1,346 3,226

Bonds 3,380 726 3,128

Finance leases 21 44 6 58

La Poste savings bonds 63 66

Commercial paper 150

Current bank facilities 32 23

Deposits and guarantees received 368 26 486 25

Other borrowings at amortised cost 39 10 40 15

Borrowings designated at fair value 207 2,015 2,294

Borrowings subject to fair value hedging 530 546

Financial derivative liabilities relating to bonds 42 27 80 9

Other derivatives 7 9 5 9

Interest accrued not due on borrowings 131 136

Medium and long-term bonds and other financial debt (non-current) 6,043 6,085

Short-term bonds and other financial debt (current) 1,060 1,567

Total current and non-current 7,103 7,652



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27.2 Breakdown of debt by maturity

Maturity of < 1 year

Maturity of 1 to 5 years

Maturity of > 5 years Total

(€ million) 2013 2012 2013 2012 2013 2012 2013 2012

Financial debt at amortised cost

Bonds 726 163 164 3,217 2,964 3,380 3,853

Finance leases 21 6 2 28 42 30 65 64

La Poste savings bonds 63 66 63 66

Commercial paper 150 150

Current bank facilities 32 23 32 23

Deposits and guarantees received 368 486 25 24 1 2 394 512

Other borrowings at amortised cost 39 40 10 15 50 55

Borrowings at fair value

Bonds 207 1,341 1,023 674 1,271 2,222 2,294

Borrowings subject to fair value hedging

Bonds 530 546 530 546

Financial derivative liabilities relating to bonds 42 80 27 9 69 90

Other derivatives 7 5 9 9 16 14

Accrued interest not due 131 136 131 136

Total 1,060 1,567 2,109 1,819 3,934 4,266 7,103 7,652

27.3 Bonds

Bond debt, excluding accrued interest, changed as follows:

(€ million)Borrowings at

amortised costBorrowings at fair value

Hedged borrowings Total

Balance as at 31/12/2011 3,108 2,176 539 5,822

New borrowings 750 750

Redemptions

Issue premium (5) (5)

Change in credit risk 45 45

Other changes 73 7 80

Balance as at 31/12/2012 3,853 2,294 546 6,694

New borrowings 250 250

Redemptions (726) (726)

Issue premium 3 3

Change in credit risk 51 51

Other changes (123) (16) (139)

Balance as at 31/12/2013 3,380 2,222 530 6,133




es,ernts 20

New bond issue

In November 2013 La Poste issued a new €250 million bond

by reopening the existing €750 million bond issue maturing

in 2024 at a nominal rate of 2.75%.

Debt repayment

The bond issued in 2006 maturing in 2013, with a nominal

value of €726 million, was redeemed in November 2013.

Change in credit risk

The fair value measurement of the borrowings designated

at fair value through profit or loss reflects the decrease

in the cost of credit risk over the year. This change had a

€51 million positive impact on the fair value of the bonds

as at 31 December 2013, compared with 31 December 2012

(as opposed to a €45 million positive impact in 2012). See

paragraph M1 in Note 3 on Accounting rules and methods.

The other changes primarily related to:

the decrease in the fair value of borrowings designated

at fair value through profit or loss at inception mainly

due to the increase in long-term interest rates in 2013;

the change in the fair value of hedged loans. See below.

A loan with a nominal value of €500 million has been hedged at fair value since February 2009. The effect of this hedge on

the income statement is as follows:

(€ million) 31/12/2013 31/12/2012

Revaluation of hedged borrowings through profit or loss (16) 7

Revaluation of hedges on borrowings through profit or loss 16 (7)

Net impact on profit or loss 0 0

As at 31 December 2013, the Group bonds, which have a nominal value of over €500 million, broke down as follows:

Issue date Maturity CurrencyNominal

rate

Nominal value

(millions of currency units)

Accounting treatment

2003 2023 Euro 4.375% 580 Fair value

2008 2018 Euro 4.500% 500 Fair value

Other bonds at fair value 884

Total bonds at fair value 1,964

2004 2019 Euro 4.750% 580 Amortised cost

2006 2021 Euro 4.250% 1,000 Amortised cost

2012-2013 2024 Euro 2.750% 1,000 Amortised cost

Other bonds at amortised cost 800

Total bonds at amortised cost 3,380

2009 2016 Euro 4.750% 500 Fair value hedge

Total bonds subject to fair value hedging 500



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The breakdown of the bond-rate by type of rate as at 31 December 2013 was as follows:

Debt breakdown before fixed-for-floating swaps

Impact of fixed-for-floating transactions

Debt breakdown after fixed-for-floating swaps

(€ million) Amount % Amount Amount %

Fixed-rate borrowings 6,133 100% (2,752) 3,380 55%

Floating-rate borrowings 2,752 2,752 45%

Of which borrowings covered by

partial or total rate-refixing swaps

(see Note below) 1,514

Total borrowings 6,133 100% 6,133 100%

The fixed-for-floating-rate swaps mentioned above are used

at any time after issuance, in order to turn the fixed rate

into a floating rate up until the maturity of the borrowings

in question.

Furthermore, swaps allow the refixing of a portion of these

borrowings at fixed rates with short maturities ranging from

one to five years.

As at 31 December 2013, the portion of floating-rate

borrowings covered by these “rate refixing” swaps

amounted to €1,514 million, i.e. 25% of total borrowings.

These borrowings are still shown on the “Floating-rate

borrowings” line.

“Rate-refixing” swaps represent a nominal amount of

€1,320 million.

As at 31 December 2013, the breakdown of bond debt by currency was as follows:

Debt structure before currency swaps

Impact of currency swaps

Debt structure after currency swaps

(€ million) Amount % Amount Amount %

Euro 5,657 93% 475 6,133 100%

Pound Sterling 268 4% (268)

Swiss Franc 207 3% (207)

Total 6,133 100% - 6,133 100%

Bonds denominated in foreign currencies are backed by swaps that allow the currency risk to be fully hedged.




es,ernts 20

27.4 Non-banking activities derivatives

Fair value as at 31/12/2013 Fair value as at 31/12/2012

(€ million) Assets Liabilities Assets Liabilities

Trading derivatives at fair value through profit or loss

Fixed-for-floating derivatives 362 27 480 9

Floating-for-fixed derivatives 42 79

Total 362 69 480 88

Hedging derivatives

Fair value hedges 50 67

Total derivatives relating to bonds 412 69 547 88

Other

Currency swaps 6 2

Cash management funds derivatives 16 3 14

Total Non-banking activities derivatives 419 85 551 102

Amortisable balance on interrupted hedging derivatives

Cash flow hedging derivatives 10 13

27.5 Other financial debt

Finance leases

Liabilities relating to assets held under finance leases

primarily involve properties and sorting machines.

La Poste savings bonds

This line represents La Poste’s savings bond liabilities.

All of the bonds had matured by the end of 2013.

Commercial paper

In October 2013, La Poste issued €150 million in

commercial paper maturing, within three months.

Deposits and guarantees paid

This line primarily relates to security deposits received in

respect of financial instruments put in place to manage

bonds.



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NOTE 28 Net debt

28.1 Net debt position

28.2 Changes to net debt

28.1 Net debt position

(€ million) Note 31/12/2013 31/12/2012Cash and cash equivalents (balance sheet line) 23 2,163 2,167

Debt-related derivative assets 19 419 551

Investment securities with initial maturities of over 3 months 19 655 815

Security deposits paid in connection with derivatives, recognised as

assets 19 35 48

Net financial receivable against La Banque Postale 53 611

Cash and other asset items (1) 3,325 4,192Medium and long-term bonds and other financial debt 27 6,043 6,085

Short-term bonds and other financial debt 27 1,060 1,567

Gross debt (2) 7,103 7,652Net debt (2)-(1) 3,778 3,460Decrease in net debt as at 31 December 2013 318

28.2 Changes to net debt

(€ million) Cross-references 31/12/2013 31/12/2012Cash flows from operating activities CFS (a) 1,056 1,195

Cash flows from investing activities CFS (1,403) (876)

Cancellation of the change in cash management financial assets CFS (157) 148

Cash flow from investing activities excluding the acquisitions and disposals of cash management financial assets (b) (1,561) (728)Capital increase CFS 600 1,053

Dividends paid to the government CFS (171) (144)

Purchase of non-controlling interests CFS (9) (25)

Net financial interest expense (164) (164)

Change in the fair value of financial instruments (28) (58)

Impact of changes in consolidation scope on gross debt (15) (32)

Increase in finance lease liabilities (17) (7)

Bond issue redemption premium and issuance expenses (5)

Other items (c) (8) (1)

Cash flows and change in debt from financing activities 187 617Decrease (Increase) in net debt since 1 January (318) 1,084Net debt at the beginning of the period (3,460) (4,544)

Net debt at the end of the period (3,778) (3,460)

(a) "CFS” refers to the non-banking column of the Cash Flow Statement in the consolidated financial statements.

(b) The cash flows from investing activities stand out from CFS due to the exclusion of the "change in cash management financial assets",

assets deducted from the net debt calculation.

(c) The “Other items” line includes the impact of currency fluctuations on net debt and dividends paid to non-controlling interests.




es,ernts 20

NOTE 29 Employee benefits

29.1 Change in provisions for employee benefits

29.2 Description of employee benefits

29.3 Actuarial assumptions

29.4 Change in post-employment benefit commitments

29.5 Analysis of post-employment benefit expenses

29.6 Expected cash outflows

29.1 Change in provisions for employee benefits

It became mandatory to apply revised standard IAS 19 at 1 January 2013 (see Note 2.1.A). Provisions for post-employment

employee benefits have been restated as follows as at 31 December 2012:

31/12/2012 as reported 31/12/2012 restated

(€ million) CurrentNon-

currentApplication

of IAS 19 Revised CurrentNon-

current

Post-employment benefits

for La Poste’s government employees 17 443 17 17 460

Retirement benefits

for the Group’s contract staff 4 149 65 4 214

Pension plans for employees

of foreign subsidiaries 25 26 51

Total 21 617 108 21 725



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20

Provisions for employee benefits have changed as follows during 2013:

31/12/2012 31/12/2013

(€ million) CurrentNon-

current IncreaseDecrease

for useInterest

costOther

changes CurrentNon-

current

Post-employment benefits

for La Poste’s government employees 17 460 6 (16) 12 (29) 17 433

Retirement benefits

for the Group’s contract staff 4 214 20 (4) 5 (9) 6 224

Pension plans for employees

of foreign subsidiaries 0 51 2 (6) 2 6 55

Total 21 725 28 (26) 19 (32) 24 712

End-of-career arrangements 340 886 237 (322) 15 0 382 775

Severance payments 82 26 6 (1) (0) 81 32

Long-term sick leave/

long-term paid leave 64 52 1 (11) 0 61 45

Accrued leave 108 110 5 (11) 2 0 114 101

Other long-term benefits 2 23 3 (6) (0) 2 21

Total 256 211 16 (29) 2 (0) 258 199

Total 617 1,821 281 (376) 36 (32) 663 1,685

29.2 Description of employee benefits


defined benefit plans, together with their related costs,


accordance with IAS 19. Annual actuarial appraisals are

carried out.

The appraisal calculations involve taking third-party

actuarial economic assumptions into account (discount

rates, inflation rates, and the rate of increase in pensions,

etc.), as well as assumptions that are specific to Le Groupe

La Poste (employee turnover rates, mortality rates, and the

rate of increase in salaries, etc.).




es,ernts 20

A. Pension commitments for government employees at La Poste

Article 150 of the 2006 Amending Finance Act, published

in the Journal officiel of 31 December 2006, sets out the

pension funding plan for government employees working

at La Poste. This plan changes the previous funding plan

so as to gradually put La Poste on an equal footing with

competitors.

The reform implemented in December 2006, and approved

by the European Commission in 2007, includes:

the implementation of an employer contribution aimed

at discharging all of the employer’s pension liabilities as

from 1 January 2006. This rate was gradually reduced

down to a so-called “competitively fair” rate in 2010, i.e.

a level that brings the mandatory salary-based social

security and tax charges at La Poste down to the level

at other companies in the postal and banking sectors.

Over the period between 2006 and 2009, the law had set

an additional rate (16.3% in 2006, 6.8% in 2007, 3.7%

in 2008, and 1.3% in 2009), which was added to the

competitively fair rate;

the transfer of the task of centralising and distributing

the flow of retirement benefits to La Poste’s government

employees between the French government, La Poste

and any other relevant bodies to the EPNFRLP

(Établissement public national de financement des retraites

de La Poste, the French government agency for the

funding of La Poste’s pensions), which was established

beforehand via the Decree of 19 December 2006. The

EPNFRLP is actually responsible for negotiating financial

agreements provided for under Title II, Book II and under

Title II, Book IX of the French Social Security Code;

the payment of a one-time fixed contribution of €2 billion

to this public agency by La Poste in 2006.

With the implementation of this plan, and given that the

employer contribution is made in full discharge of the

obligation, no provision is recorded in La Poste’s financial

statements in respect of government employees’ retirement

benefits.

Under the previous plan set forth in the Act of 2 July 1990,

La Poste was responsible for reimbursing the cost of

pensions granted to government employees working for

La Poste in accordance with the French Civil and Military

Pensions Code, where payment and cover were provided by

the French government.

B. Post-employment benefits granted to retired government employees attached to La Poste

Other commitments for post-employment benefits include:

employee welfare services provided to government

employees, primarily including home help and holiday

vouchers;

a loyalty bonus granted to retired state employees who

hold their pension in a current account at La Banque

Postale;

granting assistance to voluntary organizations that

provide services to retired government employees.

C. Retirement benefits for the contract staff of La Poste and the Group’s French subsidiaries

Employees retiring from the Company and eligible for a

pension receive retirement benefits, the amount of which

is based on length of service and final salary.

D. Pension plans for employees of the Group’s foreign subsidiaries

Pension commitments for the Group’s foreign subsidiaries

primarily relate to the GeoPost sub-group and the GeoPost

UK subsidiary. GeoPost UK’s commitments are partially

covered by a pension fund.

E. End-of-career arrangements

La Poste employees may benefit from an early end-of-

career arrangement scheme called Adjusted Part Time

Scheme for Seniors (APTSS) described below under some

certain circumstances. These arrangements are offered

to some people who meet the relevant minimum-age

requirement (government employees and contract staff) and

number of years of service. This scheme was implemented

in 2011, and its characteristic features are adjusted each

year according to the demographic and economic conditions

of the company, as well as to the laws applicable to

retirement. The main characteristic features of the scheme

applicable in 2014, which were set in December 2013, are

as follows:

Enrolment in the scheme is possible as from 56 and a

half years of age (government employees and staff in

office roles), and as from 53 and a half years of age

(government employees in active roles) for persons in

a position that is physically demanding, or who were

previously in such a position for at least 10 years.



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Persons who are not in a physically demanding position

may benefit from this scheme as from 58 and a half

years of age (government employees and staff in office

roles) or as from 54 and a half years of age (government

employees in active roles).

This scheme is open to employees who have worked for

La Poste for at least 10 years, and who will be able to

benefit from a full pension once they have reached the

legal retirement age.

The length of participation in the plan is fixed upon

enrolment and is not subject to change. Participation is

for a minimum of one year and the maximum age at the

end of the scheme corresponds to the pension eligibility

age set by law.

During the term of the scheme, the state employee

works part-time (70%) in an administrative position, with

a proportional reduction in remuneration.

The work performed by the employee during the term of

the scheme is split between an operational activity and

a consulting role.

This scheme is open to all La Poste staff who meet the

above conditions in 2014.

The provisions relating to the APTSS recognised as at

31 December 2013 factor in the expected enrolments to

the scheme available in 2014, as well as enrolments to the

schemes operating from 2011 to 2013.

Furthermore, the following end-of-career arrangements

have been available in the past, and continue to be the

subject of provisions for the persons still benefiting from

them as at 31 December 2013:

Part-Time Consulting (PTC): employees eligible for the

PTC scheme enjoy reduced working hours in exchange

for a proportional reduction in their remuneration.

This scheme is open to employees who have turned 56,

provided that it is followed up by part-time mentoring

and consulting (PTMC) or a new part-time mentoring and

consulting (NPTMC) scheme (see definitions below) by

the time they turn 58 and a half.

These reduced working hours may involve performing

training activities. It is up to the section head to decide

on the nature of activities and how they are organised

(working conditions). The PTC scheme is an irreversible

arrangement, which must subsequently be followed by

a PTMC or NPTMC scheme.

Part-Time Mentoring and Consulting (PTMC): employees eligible for the PTMC scheme can leave

their operational position from the age of 57 and receive

partial remuneration in return for remaining available for

mentoring and/or consulting assignments.

New Part-Time Mentoring and Consulting (NPTMC): employees eligible for the NPTMC scheme can leave

their operational position from the age of 58 and a half

and receive partial remuneration in return for remaining

available for mentoring and/or consulting assignments.

Adjusted end-of-career arrangements (AECA): employees who benefit from AECA enjoy a period during

which they work part-time in return for a proportionally

lower pay cut, followed by a work exemption up to the

legal retirement age. A benefit is paid on retirement. This

scheme is available to government employees aged 56

and 57.

Exemption from Work (EW): this scheme, which was

introduced by La Poste, is offered to certain government

employees in active roles who meet the age criteria

and are affected by regional agreements linked to

restructuring programmes.

The employees concerned, who have 15 years of active

service and are aged between 53 and a half and 55 years,

are exempt from any work from the age of 53 and a half,

subject to their taking retirement as from age 55. When

they retire at age 55, the employees receive an End-of-

Career Bonus.

F. Other long-term benefits

These are paid leave schemes:

Accrued leave: accrued leave is a scheme that allows

employees to accrue part of their unused earned leave

beyond the period for using earned paid leave. The

provision for Accrued Leave corresponds to the value of

the leave rights included in this scheme.

Supplementary leave: government employees from

the overseas departments or who work in the overseas

departments benefit from paid supplementary leave, as

well as from paid travel expenses. The provision covers

these supplementary leave and travel rights.

Long-term sick leave/long-term paid leave: the

provision for long-term sick leave and long-term paid

leave is designed to cover the costs relating to future

leave incurred as at the balance-sheet date. This

provision is measured at every balance-sheet date

for every employee concerned, on the basis of future

entitlements, as expressed by a number of payable index

points.




es,ernts 20

29.3 Actuarial assumptions

The actuarial assumptions used to measure employee

benefits are reviewed and updated once a year at the annual

balance-sheet date.

The main assumptions selected as at 31 December 2013

were as follows:

likelihood of retaining working staff within the Group, life

expectancy and estimates of future salary increases;

retirement age assumptions for employees of foreign

companies and employees governed by foreign collective

bargaining agreements, which take account of local

economic and demographic factors;

an assumed average benefit increase of 2% (no change

compared with 2012);

provisions for retirement commitments relating to end-

of-career arrangements that form part of agreements

are calculated on the basis of the definite enrolments

in these schemes as at the balance-sheet date, as

well as of Management’s best estimate of likely future

enrolments up until the expiry date of these agreements.

A one-point increase in the expected rate of enrolment

would have increased the provision by €19 million as at

31 December 2013;

the discount rates used for actuarial appraisals as at

the balance-sheet date, determined with reference

to a basket of AA-rated corporate bonds published by

Reuters, were as follows:

Maturity 5 years 10 years 15 years 20 years

2013

Euro zone 1.4% 2.5% 2.8% 3.1%

UK zone 2.3% 3.5% 3.9% 4.2%

2012

Euro zone 1,2% 2.2% 2.6% 2.7%

UK zone 2% 3% 3.5% 4.1%

29.4 Change in post-employment benefit commitments

The tables below show the change in the commitment and in the plan assets for the Group’s post-employment benefit plans

as at 31 December 2013 and 31 December 2012.

Change in commitments

(€ million) 2013 2012

Commitment at the beginning of the period 887 704

Cost of services provided 25 21

Discount unwinding costs 23 31


Curtailment and settlement of plans

Benefits paid (26) (29)

Employee contributions 1

Actuarial (gain) loss relating to changes in assumptions (a) (12) 170

Actuarial (gain) loss due to experience adjustments (11) (18)


Commitment at the end of the period 886 887(a) Mainly due to changes in the discount rate.

There was no change in the post-employment plans in 2013 and 2012.



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Change in plan assets

(€ million) 2013 2012

Plan assets at the beginning of the period 141 133

Expected return on assets 5 6

Employer contributions 6 7

Employee contributions 1 1

Benefits paid (7) (10)


Actuarial differences 4 (1)


Plan assets at the end of the period 150 141

The plan assets primarily relate to GeoPost UK’s pension commitments.

Net commitment

(€ million) 31/12/2013 31/12/2012

Commitments 886 887

Plan assets (150) (141)

Net commitment 736 746

of which non-current provision 712 725

of which current provision 24 21

Change in actuarial differences (recognized in “other comprehensive income”)

(€ million) 2013 2012

Actuarial (gain) loss at the beginning of the period 110 (47)

Actuarial (gain) loss relating to changes in assumptions (a) (12) 164

Actuarial (gain) loss due to experience adjustments (11) (16)

Actuarial differences on plan assets (4) 1


Other (2) 8

Actuarial (gain) loss at the end of the period 80 110(a) Mainly due to changes in the discount rate.




es,ernts 20

Breakdown of plan assets

31/12/2013 31/12/2012

Equities 34% 30%

Government bonds 21%

Corporate bonds 20%

Diversified investment funds 32% 29%

LDI fund (Liability-Driven Investment) 10%

Insurrance contracts 24%

Discount rate sensitivity

A 50 basis point reduction in the discount rate would increase the Group’s net post-employment benefit commitment by

around €53 million.

29.5 Analysis of post-employment benefit expenses

(€ million) 2013 2012

Cost of services provided 25 18

Discount unwinding costs 23 31

Expected return on assets (5) (6)


Expense (Income) for the period 43 43

29.6 Expected cash outflows

The table below presents an estimate of the benefits

payable over the next five years in respect of defined-benefit

post-employment benefits:

(€ million) Benefits paid

2014 30

2015 27

2016 28

2017 28

2018 28

Benefits paid correspond to Group cash outflows, except

for the GeoPost UK and DPD Schweiz pension plans, which

are covered by an assets fund (benefits of approximately

€7 million paid per year).



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NOTE 30 Banking activities financial liabilities

30.1 Liabilities to credit institutions

30.2 Liabilities to customers

30.3 Debt evidenced by a certificate and other banking financial liabilities

30.1 Liabilities to credit institutions

(€ million) 31/12/2013 31/12/2012

Ordinary accounts payable 81 58

Overnight deposits and borrowings

Other amounts due 29 19

Sight liabilities to credit institutions 110 77

Securities given under repurchase agreements 12,080 14,948

Term deposits and loans 2,567 787

Term liabilities to credit institutions 14,647 15,734

Total 14,757 15,811

Securities given under repurchase agreements correspond to inter-bank and similar transactions.

The subordinated debt corresponds to La Banque Postale’s bond issues.

The maturity schedule for liabilities to credit institutions is as follows:




(€ million) 2013 2012 2013 2012 2013 2012 2013 2012

Sight liabilities to credit

institutions 110 77 110 77

Term liabilities to credit

institutions 12,194 15,551 2,084 369 183 14,647 15,734

Total 12,304 15,628 2,084 369 183 14,757 15,811




es,ernts 20

30.2 Liabilities to customers

This item primarily represents deposits by customers of the Banking activities plus accrued interest not due on these deposits.

(€ million) 31/12/2013 31/12/2012

Livret A passbook savings accounts 64,314 61,756

Home Loan Savings Plans (PEL) 21,287 20,185

Home Loan Savings Accounts (CEL) 5,699 6,282

PSP accounts 340 396

Popular savings accounts 8,681 9,375

Sustainable Development (LDD) accounts 7,191 6,431

Youth passbook savings accounts 753 817

Livret B (savings passbook) accounts 2,514 2,347

Stock Savings Plan Liquidity Accounts 404 309

Other special accounts 2,684 3,516

Special savings accounts 113,866 111,414

Ordinary trade payables 47,670 45,383

Customer borrowings 1 (0)

Other amounts due to customers 231 256

Sight liabilities to customers 47,901 45,639

Customer borrowings 259 12

Term deposits 548 453

Equities and securities given under repurchase agreements 4,008 2,875

Term liabilities to customers 4,815 3,341

Total 166,583 160,393

Since 1 January 2009, the funds in La Banque Postale’s Livret A passbook savings accounts, which were previously held by

Caisse Nationale d’Épargne, have been taken over directly by La Banque Postale. This is pursuant to the deregulation of the

distribution of Livret A passbook savings accounts, which resulted in the winding up of Caisse Nationale d’Épargne.



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30.3 Debt evidenced by a certificate and other banking financial liabilities

(€ million) 31/12/2013 31/12/2012

Subordinated debt 829 850

Bonds 1,536 273

Certificates of deposit 2,763 4,264

Debt evidenced by a certificate 5,129 5,387

Guarantee deposits received 478 386

Financial liabilities at fair value through profit or loss 118 111

Hedging derivatives 372 563

Other financial liabilities 694 739

Total 6,790 7,185

The “financial liabilities at fair value through profit or loss” correspond primarily to interest rate derivatives.

The maturity schedule for debt evidenced by a certificate is as follows:




(€ million) 2013 2012 2013 2012 2013 2012 2013 2012

Debt evidenced by a certificate 2,999 4,537 150 1,980 850 5,129 5,387

NOTE 31 Trade and other payables

(€ million) 31/12/2013 31/12/2012

Trade payables and related accounts 1,375 1,367

Tax and social security liabilities 1,841 1,834

Payable to suppliers of non-current assets 242 241

International mail payables 488 463

Customer advances and deposits 214 165

Other operating payables 264 278

Total 4,424 4,349




es,ernts 20

Additional information

NOTE 32 Information on risks excluding Banking activities

32.1 Credit risk

32.2 Liquidity risk

32.3 Interest-rate risk

32.4 Currency risk

La Poste takes a prudent approach to risk management,

which is based on a system of notional limits for each

financial risk to which it is exposed as part of its financial

activities. This system of limits is set out in a “Limits

Handbook” that is updated regularly, according to the

changes in the Treasury and Financing Department’s

activities, and is presented to the La Poste Audit Committee

every year.

An execution report for the Limits Handbook is also

presented to La Poste’s Audit Committee every year.

32.1 Credit risk

In the course of its non-banking financial activities, La Poste

is primarily exposed to two types of credit risk:

the risk of its issuers defaulting on their investment

securities;

the risk of its market counterparties defaulting.

La Poste’s cash is invested in money-market UCITS, term

deposits and Negotiable Debt Securities (NDS) with a

minimum short-term rating of A2/P2. The credit risks are

controlled by a system of limits representing the maximum

nominal amount not to exceed for each UCITS or issuer.

Moreover, in view of its operations in derivative markets,

La Poste is exposed to the risk of its market counterparties

defaulting. This risk is also controlled via a system of limits,

which constitute absolute upper limits for risks arising from

the derivative portfolio.

The exposure relating to these instruments is assessed

through the net market value of the derivatives for each

counterparty, after taking into account guarantees received

or given under collateralisation agreements.

The commitments to La Poste’s counterparties are subject

to systematic collateralisation agreements that enable the

risk of default to be reduced at the franchise level.

Considering the high amount of its investments, in 2013

La Poste implemented an indicator designed to assess the

maximum statistical risk of financial loss on its investment

securities portfolio, with a 97.5% confidence interval. This

indicator is based on one year CDS for each of the issuers in

its portfolio, weighted with the investment’s current amount

and residual maturity.

32.2 Liquidity risk

Liquidity risk is assessed through forecast cash flows,

calculated as a moving average every day during the first

month and then monthly for the rest of the year.

Any liquidity gaps are refinanced through the issue of

French commercial paper or Euro Commercial Paper (ECP).

In addition, La Poste has negotiated confirmed credit

facilities with financial institutions and has access to

a €650 million syndicated credit facility, as well as to an

additional €75 million credit facility granted by BNPP (see

Note 36.4.B).

A liquidity warning is sounded when the one-month forecast

cash flow statement reveals that total short-term financial

resources used exceed 50% of all available financial

resources (confirmed credit facilities).



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The table below shows the contractual cash flows relating to non-derivative financial liabilities, as well as the contractual

flows relating to debt management derivatives, regardless of whether they are shown as liabilities or assets. These flows are

not discounted and their total may therefore differ from the amount recognised on the balance sheet.

Balance sheet

amount 2014 flows 2015 flows 2016-2018 flows2019 flows and beyond

(€ million) 31/12/13 Interest Principal Interest Principal Interest Principal Interest Principal

Bonds 6,133 249 204 242 623 1,810 549 3,800

Borrowings at amortised cost 3,380 135 135 396 160 422 3,220

Borrowings at fair value 2,222 90 204 83 203 1,150 127 580

Borrowings subject

to fair value hedging 530 24 24 24 500

Other financial debt 753 673 18 55 8

Finance leases 65 21 9 27 8


Commercial paper 150 150

Current bank facilities 32 32

Deposits and guarantees received 394 368 6 20

Other borrowings at amortised

cost 50 39 3 8

Derivatives (333) (70) (60) (74) (162) 52 (47)

Derivative liabilities 85 18 4 (6) 52

Derivative assets (419) (88) (60) (78) (156) (47)

Total 6,553 179 817 168 18 461 1,917 502 3,808


La Poste has pursued an active management strategy for

its bond debt since 1999, based on the use of derivatives to

reduce the coupon rate of its bonds.

This hands-on management generates a unidirectional

interest-rate risk linked to an unfavourable change in

the yield curve. The interest-rate risk is controlled by a

percentage limit representing the maximum cost of the

bond debt according to a four-year horizon. This limit, which

is reviewed every year based on the residual maturity of the

bond debt, is monitored on a weekly basis.

The forecast cost of debt is determined on the basis of

projected cash flows for all instruments used to manage

the debt, i.e. borrowings and derivatives.

The cash flows from floating-rate coupons are assessed

using an industry tool that enables expected future coupons

to be determined based on the yield curve.




es,ernts 20

In order to anticipate the impact of a rise in interest rates,

the cost of debt is simulated every week based on a parallel

shift of 50 basis points in the yield curve. If the result of this

test exceeds the authorised interest rate limit, preventive

transactions are carried out to re-price the cost of the debt.

Sensitivity analysis

A uniform sudden 50-basis point increase in the market

yield curve would result in a €5.9 million increase in the

Group’s annual financial expense, after taking into account

debt management derivatives (compared with €5.4 million

as at 31 December 2012).

A uniform sudden 50-basis point increase in the market

yield curve would result in a €3.2 million profit in income

(compared with €13.1 million as at 31 December 2012),

resulting from the change in the fair value of the debt

recognised at fair value through profit or loss and of the

debt management swaps.

32.4 Currency risk

La Poste cautiously assesses currency risk by systematically

hedging borrowings and investment securities denominated

in foreign currencies via the setting up of currency swaps or

forward purchases and sales.

As at 31 December 2013, there were no significant foreign

currency-denominated investment securities. Some bonds

are denominated in pounds sterling and Swiss francs.

These borrowings are fully protected by a foreign exchange

hedge, as detailed in Note 27.

NOTE 33 Information on risks relating to Banking activities

33.1 Risk management policy

33.2 General organization of La Banque Postale’s Risk Department

33.3 Structural risk factors

33.4 La Banque Postale’s risk exposure

33.5 Liquidity risk


33.7 Credit risk

33.8 Market risk

33.1 Risk management policy

La Banque Postale’s guidelines for internal controls and

risk management are primarily based on regulations

including:

CRBF Regulation 97-02, amended regarding internal

controls;

prudential regulations (Order of 20 February 2007

regarding shareholders’ equity requirements;

Regulation 93-05 regarding major risks; Order of 5 May

2009 regarding the management of liquidity risk; and

Regulation 2000-3 regarding consolidated prudential

oversight);

the AMF General Regulations, for activities linked to

investment services.

The regulatory framework is translated into internal rules,

validated by the Bank’s Executive Board:

“the Risk Management Policy of La Banque Postale”

where risk management is concerned, and “The Charter

of the risk management organization”;

the “Audit Charter” where periodic control is concerned,

as well as into reference documents distributed to the

Departments of the bank, in order to implement the rules,

in particular:

standards issued by the Group Standards Validation

Committee;

“key elements of an internal control system”;

procedure for implementing the “products review”.



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33.2 General organization of La Banque Postale’s Risk Department

The Executive Board sets the common fundamental

guidelines (strategic directions, values, risk appetite

and governance), based on which each Business Line

implements its action priorities, and the related risk

management system under the supervision of the Group

Risk Department (GRP). These fundamental guidelines are

specifically applied in the Risk Management Policy.

The Risk Management system is in keeping with three lines

of defence which constitute the general internal control

framework, namely:

a first line within the operating Business Lines

responsible for implementing the risk management

system that they have defined beforehand together with

the GRP;

a second line, which is embodied by the Group Risk

Department, which guarantees the existence of a

favourable and consistent general framework for

defining and amending risk management systems;

a final line across the internal control functions

responsible for providing an independent assessment of

the effectiveness of the risk management implemented.

Internal control at La Banque Postale comprises permanent

control and periodic control. It is based on a Risks

Management Policy and a Charter of the Risk Management

Organization, issued by the Group Risk Management

Department of La Banque Postale to all Departments.

It establishes a series of risk management and control

principles that each entity responsible for a process must

apply. Each Department defines, formalises and keeps

updated a manual of its policies. These policies define the

control points that are necessary to ensure the quality of

their operations:

The responsibility of all actors, which constitutes the

basis of an efficient risk management and control

system. Each employee must ensure that his activity

and the operations he processes follow the existing

procedures and have the required quality level. He must

be able to report at any time on his proper control of

his activity and risks. This principle relies on a strong

involvement of the management.

The proportionality of controls to the level of risk to be

managed. Each manager performs a risks analysis and

implements a control system accordingly, in order to

gain a reasonable assurance that his activities are under

control, and comply with internal and external standards

and rules of the company.

The completeness of the scope of the control system.

This scope covers all activities of La Banque Postale.

It includes risks of all natures, all direct employees as

well as others working in the company’s name and on its

behalf, and all entities of La Banque Postale Group. The

internal control system also applies to essential services

which have been externalised.

The GRP is in charge of the essential tasks of risk

management, which ensure:

the cohesiveness, homogeneity, eff iciency and

completeness of risk assessment;

the monitoring and management of risks.

It is also in charge of risk management at a consolidated

Group level.

The GRP is in charge of formulating a coordinated risks

management policy for the Group, subject to the approval

of the Executive Board.

Each entity is responsible for its own risks management and

internal control policy, subject to the approval of the GRP.

The GRP ensures that the risks management policies of

the subsidiaries are consistent with the policy of the parent

company, and that they are correctly applied.

33.3 Structural risk factors

La Banque Postale has reviewed the risks that could have

a material adverse effect on its business, its financial

position and its results (or its ability to achieve its targets),

and considers that there are no significant risks other than

those shown.

The structural risk factors that affect La Banque Postale are

primarily related to its retail banking business, i.e. liquidity

and interest-rate risk linked to converting short-term

customer deposits to longer-term use, credit risk on the

loans granted to its customers, and the operational risk

relating to the Banking activities.

Market risk also represents a structural risk factor, which

La Banque Postale monitors closely.




es,ernts 20

33.4 La Banque Postale’s risk exposure

(€ million) 2013 2012


Trading derivatives 128 109



Loans and receivables—Credit institutions 82,894 81,254

Customer loans and receivables 59,212 49,931


Balance sheet exposure net of impairment 191,803 184,354

Financing commitments given 20,197 17,383

Guarantee commitments given 3,690 3,154

Off-balance sheet exposure 23,887 20,536

Total net exposure 215,690 204,890

In 2013, contrary to 2012, UCITS are included in the above figures.

The following risks are described below:

33.5 Liquidity risk


33.7 Credit risk

33.8 Market risk

33.5 Liquidity risk

The ALM Committee is primarily responsible for monitoring

liquidity risk. Chaired by a member of the Executive Board,

the Committee consists of the Head of Retail Banking, the

Head of Risk, and the Head of Management Control, along

with the Head of Financial Transactions, who runs it.

The ALM Committee reviews customer deposit models

on a regular basis, and formally validates the outflow

assumptions produced.

It monitors the liquidity risk performance indicators, and

anticipates their future development, in light of the Bank’s

commercial policy, and of observations on customer

behaviour.

Assessment of risk

As at 31 December 2013, La Banque Postale continued

to show excess customer resources compared with its

uses. However, the proportion of loans to customers has

increased, and now represents 33% of customers’ deposits,

due to the development of loans to legal entities.

La Banque Postale is primarily exposed to liquidity risk

arising from putting its sources of funding, which consist

mainly of overnight deposits, to longer-term use, either in

the form of home loans to private individuals or loans to

legal entities, or in the form of debt securities.



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20

The portion of resources not used for held-to-maturity

investments or consumer loans can be used to build the

portfolio of available-for-sale financial assets. These

securities are effectively marketable and can be sold quickly

if needed.

Risk management and limits

La Banque Postale’s risk management policy defines

two kinds of liquidity risk with two different monitoring

approaches:

Cash liquidity risk

Relating to the institution’s cash management.

Operational limit that enables cash management funding

requirements to be capped.

The amount and observation period are set by the Risk

Committee.

The short-term liquidity limit is set in accordance with

the future Basel 3 guidelines. It involves a 30-day limit

that compares liquidity requirements over 30 days with a

cushion of liquid assets. This liquidity requirement must

not exceed the liquid asset cushion available.

Structural liquidity risk

Relating to changes in the structure of the Bank’s

balance sheet.

Takes the outflow agreements approved by the ALM

Committee into account.

Management of this risk is assigned to the ALM

Committee in accordance with the principles and limits

laid down by the Risk Committee.

Currently measured through the medium-to-long-term

liquidity gap, which corresponds to a static outflow of

liabilities (through outflow agreements) and assets. The

Bank has a guarantee that the liquidity represented by

the gap will be made available to it, based on an almost

certain confidence interval.

The net liquidity gap (sources—uses) is zero for the 1, 3 and

5-year segments. The Bank sets itself an excess liability

obligation.

The outflow assumptions used to measure structural

liquidity risk involve modelling the outflow of undated

liabilities, loans extended and recognised off-balance sheet,

and taking the potential conversion of the sovereign debt

portfolio into account.

The assumptions used for the medium and long-term liquidity gap are:

Shareholders’ equity net of non-current assets In fine

Debt Contractual date or call date

Sight deposits, savings accounts, CEL and CAT Outflow agreement

Home loan savings plan Certain outflow (see Home Loan Savings provision)

Term deposits Contractual date

Home loans Contractual schedule + early structural repayments

Home loan savings loan options Likely generation over the average maturity observed

Bond securities and Deposits Contractual payment schedule that is not eligible for ECB refinancing,

net of the cash repo limit

Off-balance sheet commitments Outflow agreement

Standard outflow agreements for liabilities with no fixed

maturity are reviewed on a regular basis, in order to reset

them at the minimum levels required by changes in the

deposit volatility trend (behavioural changes, etc.).

Off-balance sheet loans are subject to a liquidation process

based on a behavioural model that takes account of the rate

of product changes, payment periods, and the effective life

of the new loans generated (early redemption).

Risk exposure

La Banque Postale continued to manage its liquidity on

a prudent basis in 2013. This was reflected in surpluses

throughout the year, underpinned by the quality of the

financial assets owned.

La Banque Postale’s one-month liquidity ratio was 224%

as at 31 December 2013, which is once again at a level

that is significantly higher than the minimum regulatory

requirement of 100%.




es,ernts 20

The short term liquidity risk is measured by an internal

indicator, which confirmed the Bank’s excess short-term

liquidity position. It relies on new Basel indicators (LCR).

Further stress tests were performed in 2013 in order to

check the Bank’s strength in terms of liquidity risk.

Structural liquidity risk is measured via the medium and

long-term liquidity gap resulting from the difference

between stressed static liability outflows (outflow

agreement) and assets. The structural liquidity limit was

complied with at all times in 2013.

The maturities covered by the calculation are as follows:

1 month, 3 months, 6 months, 1 year, 2 years, 3 years,

4 years, 5 years, 7 years, 10 years, and 15 years. The gap is

measured monthly and presented at Risk Committee and

ALM Committee meetings.

LIQUIDITY GAP, AS MEASURED

AT 31 DECEMBER 2013 AND 31 DECEMBER 2012(€ million)

31/12/2013

-10,000

-5,000

0

5,000

10,000

15,000

20,000

15 years10 years7 years5 years4 years3 years2 years1 year1 month

31/12/2012

A positive gap for a given maturity indicates that the Bank

has more resources than uses with a greater maturity.

The positive liquidity gap for maturities of under five years

reflects La Banque Postale’s surplus liquidity. Furthermore,

this surplus liquidity is strengthened by the quality of the

financial assets held and their accounting classification,

which is taken into account in order to manage the Bank’s

structural liquidity.

The decline in structural liquidity on the 5-year segment

is explained by the increase in customer uses, notably by

legal entities.

The liquidity limit system is supplemented by stress tests,

which include a drying-up of the securities repo market.

The aging of resources and uses by residual maturity is

presented in Note 37.2.

Short term liquidity risk

The short-term liquidity limit is set in accordance with

the future Basel 3 guidelines. It involves a 30-day limit

that compares liquidity requirements over 30 days with

a cushion of liquid assets available after LCR type stress

on deposits mass withdrawals. The liquidity requirement

must not exceed the liquid asset cushion available. As at

31 December 2013, La Banque Postale holds an excess in

liquid securities of around €8 billion.

In addition to the prudent liquidity risk management

guidelines implemented by the ALM Committee and the

Risk Committee, La Banque Postale has established

diversified sources of funding:

a €20 billion certificates-of-deposit programme, of which

the amount of securities issued varies between 15% and

40% of the programme, with the goal of maintaining

La Banque Postale’s presence in the short-term market,

and to satisfy institutional clients;

a €10 billion EMTN programme set up in late 2006, and

updated in the summer of 2012. Less than 10% of this

programme had been used as at the end of 2013;

a €10 billion EMTN programme set up to issue Home

Lending Bonds (OFH). Up to 11% of this programme had

been used as at the end of 2013;

a portfolio of held-to-maturity securities, which mainly

consists of high-quality government bonds, which are

rapidly convertible. As at the end of 2013, this liquidity

reserve amounted to €31 billion, and provided a

permanent source of eligible securities granting access

to the ECB’s refinancing transactions or to the repo

market;

access to the inter-bank market.


The ALM Committee is primarily responsible for monitoring

interest-rate risk.

It monitors the interest-rate risk performance indicators,

and anticipates their future development, in light of the

Bank’s commercial policy, and of observations on customer

behaviour.

Assessment of risk

Interest rate risk represents the likelihood of seeing the

Bank’s future margins or economic value affected by

fluctuations in interest rates.



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La Banque Postale has two different types of indicators for

monitoring interest rate risk:

indicators that support the hedging decision-making

process;

indicators aimed at assessing the institution’s ability to

withstand external stress.

Sensitivity indicators form part of the first category.

They involve both future income schedules (sensitivity to

future margins) and the net present value of future cash

flows (NPV sensitivity).

These sensitivities are established using deterministic

interest rate scenarios. In fact, it is always necessary to

model customer behaviour, and in the present case to

model that behaviour in light of changes to the interest

rate environment. Among the implicit options available

to customers, the most important, both in terms of their

impact on the balance sheet and on margins, are:

the risk of early redemption of outstanding loans in the

event that interest rates fall;

the risks relating to home loan savings, where deposits

are collected at a higher fixed rate than expected if

market interest rates fall, and take-up of the entitlement

to low fixed-rate home loans is higher than expected,

if market interest rates rise. These risks are actually

covered by a special provision, the amount of which is

determined on the basis of the same behavioural model

for home loan savings account customers as the model

used in future margin simulations.

The second family of indicators includes the measurement

of economic equity capital (EEC) linked to global interest-

rate risk.

Measuring EEC enables an institution to demonstrate

its capacity to withstand adverse market developments

within a given confidence interval provided on the basis

of its equity capital.

Stress scenarios, based on historical or hypothetical

situations, provide a clearer understanding of the

institution’s risk profile, and are especially useful for

anticipating the measures that would need to be adopted

if such a scenario were to materialise.

Risk management

Interest-rate risk is managed either through the investing

in financial assets, by selecting maturity dates and coupon

indexation terms for those assets, or via fixed or optional

derivatives.

Risk exposure

-800

-600

-400

-200

0

200

400

Sens

itivi

ty to

equ

ity (i

n %

)

NPV

sen

sitiv

ity

-7.91%

-0.73%

-4.61%

-2.53%

-1.06%

0.79%

-6.70%

-10.21%-10.92%

-12.51%

-8.42%

-6.69%-7.43%

- 41 M€ -258 M€ - 142 M€ - 59 M€ -376 M€ -574 M€ - 613 M€ - 702 M€ - 473 M€ - 376 M€ - 432 M€ - 539 M€

44 M€

Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 June-13 July-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13-14%

-12%

-10%

-8%

-6%

-4%

-2%

2%

0%




es,ernts 20

In accordance with the recommendations of the Basel

Committee, a sudden and parallel 200-basis point increase

in interest rates was used to calculate the economic value

sensitivity of the balance sheet. This indicator is calculated

on a static balance sheet, without taking new generation

into account. Assets and liabilities with no contractual

maturity date are liquidated in accordance with the

scenarios approved by the Bank’s ALM Committee.

Sensitivity to global interest rate risk peaked in August

2013, when the interest rate liquidity gap reached 12.5%

compared with an internal limit of 15% (this limit is set at

20% in the Basel Regulations).

The level of volatility displayed by this indicator is due first

to the size of the Group’s shareholders’ equity, and second

to a significant downward movement in the yield curve,

which had a significant impact on outflow models and on

the amounts invested in 2013.

33.7 Credit risk

The Risk Department reports to the Risk Committee on the

drafting and implementation of the system for monitoring

and managing credit risk relating to the retail and corporate

banking businesses.

In terms of risk monitoring procedures, the Risk

Department defines the monthly credit risk monitoring

indicators approved by the Risk Committee.

The Risk Department covers credit risk, as defined in

Article 4 of Regulation 97-02 (amended), namely the risk

incurred in the event that a counterparty or counterparties

considered as a single beneficiary within the meaning of

Article 3 of Regulation 93-05 defaults.

33.7.1 Credit risk on transactions with retail customers

In terms of retail customers lending, La Banque Postale’s

activities that give rise to a credit risk include:

home loans to individuals and SCI property investment

companies (La Banque Postale and its subsidiary BPE);

overdrafts and means of payment extended to individuals

(La Banque Postale and its subsidiary BPE);

consumer loans (La Banque Postale Financement, BPE,

as well as La Banque Postale for previous loans granted

to Le Groupe La Poste staff);

personal micro-loans (La Banque Postale).

Risk management

Within the La Banque Postale Group, the Group Risk

Department is in charge of defining the risk-taking rules

and the tools used for managing the generated risks, of

overseeing the effective application of the rules and the

proper functioning of the tools.

It monitors changes in risk thanks to the indicators that it

has defined, examines the most significant commitments

and makes sure that the Commitment Committees work

properly; it also performs a regulatory oversight role and

provides assistance to operational staff in the credit branch.

In order to fulfil its assignments within the La Banque

Postale Group successfully, the Group Risk Department

manages a “credit risk arm”, which includes a network

of correspondents in the Operations Department, in the

financial centres, in the Retail Banking Department and in

La Banque Postale’s subsidiaries.

Directly by La Banque Postale

The Risk Department amends the rules for granting and

committing to loans after receiving advice from the Retail

Banking Department, the Marketing Department, and the

Operations Department, with the aim of:

supporting the development of La Banque Postale’s

product range, and the businesses involved in granting

loans;

ensuring the control of the cost of risk on its loan

balances and new loans;

guaranteeing compliance with current regulations in the

customer loans area;

where management of inherent risk is concerned,

the Risk Department is responsible for the rules on

recovery, working together with the Legal Department

and the Operations Department, and with the Accounting

Department for the rules governing provisions for

accounts receivable.

Beyond the scope of its own remit, the Risk Department has

the credit risk “game plan” approved by the Risk Committee

(chaired by a member of the Executive Board), or by the

Executive Board, if requested by the Chairman of the Risk

Committee.

The Group Risk Department defines and implements tools

(scorecards and expert systems) for granting and managing

loans and overdrafts; it makes sure that they work properly,

assumes responsibility for any adjustments necessary, and

carries out regular back-testing.

It is responsible for credit risk standards, and informs the

Bank Marketing Line and the financial centres of the main

developments on a regular basis.



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By the subsidiary BPE

The lending policy of BPE is written by the Operations

Management and Commitments Department, approved

by the Executive Management, and is communicated to

BPE’s Board of Directors. It is approved by the Group Risk

Management Department.

The Operat ions Management and Commitments

Department is responsible for updating it, and reports to

La Banque Postale’s Group Risk Management Department.

The major evolutions of the risks management policy are

submitted for approval to the Group Risk Management

Department.

The most significant commitments of BPE are now

under the delegating responsibility of LBP’s Group Retail

Customers Lending Committee.

By La Banque Postale Financement

The distribution of consumer loans is performed by the

La Banque Postale Financement (LBPF) subsidiary, in

accordance with the guidelines from the parent company.

La Banque Postale Financement’s product range includes

a large variety of amortising loans (new and second-hand

vehicle loan, house works loan, project loan, buy-back loan).

This range was completed in late 2012 by a revolving credit

facility offer, intended to be different from other offers

on the market while respecting the Bank’s customers

interests, and offering a controlled solution to a temporary

cash need. This offer is exclusively reserved to those who

are already customers of La Banque Postale, and is granted

on the basis of a rating allowing to select risks.

Consumer loans are granted using a pre-targeting rating,

which includes the lowest default probabilities for each

segment of customers, and an acceptance rating applied

on receipt of the customer application.

The major evolutions of LBPF’s risks management policy,

notably concerning issue and rating rules, are guided by

La Banque Postale’s Group Risk Management Department

towards keeping cost of risk in line with the expectations

of La Banque Postale’s Executive Board. Thus, harder

conditions aimed at prospects, project loans, pre-targeting

rating can be decided as needed by the Group Risk

Management Department.

The surveillance of consumer loans risks is performed

at a consolidated level by the Group Risk Management

Department, in particular via a regular report to the Group

Risks Committee.

La Banque Postale’s loan guarantee system

General principle

The general principle is that any financing must be 100%

hedged by an “eligible” guarantee, i.e. offering a sufficient

hedging level:

asset-backed mortgage of the first rank or equivalent,

privilege of the money-lender, mortgage, pledge of

mortgage assets granted by a third party guaranteeing

the borrower’s debt;

pledge of financial products (life insurance contracts,

securities accounts, REIT units), in accordance with

the hedging ratio of the loan by the pledged savings,

as specified in the issuance conditions, depending of

the nature of the pledged assets (securities, bonds,

currency…);

guarantees provided by a guarantee body, authorised

by the Guarantee Providers Referencing Committee of

La Banque Postale.

By exception to the above principles

Some low amount house works loans are granted without

a guarantee.

Bridging loans can be granted without an “eligible”

guarantee, when the sale agreement or the promise of sale

for the asset that is the subject of the loan has been signed

and the conditions precedent in favour of the buyer of the

asset have been lifted. In that case, the bank can settle for

a simple promise to pledge the sold asset.

If the quality of the application file justifies it, La Banque

Postale can accept the guarantee provided by a private

individual as principal guarantee, within the limits set in

the issue conditions.




es,ernts 20

Exposure to credit risk on transactions with retail customers

2013

(€ million)

Gross book value as at 31/12/2013

Gross off-balance sheet amount as at 31/12/2013

Total exposure as at 31/12/2013

Amounts outstanding

As a % of total exposure

Amounts outstanding


Amounts outstanding % total

Home loans 49,985 96% 2,280 4% 52,265 76%

Consumer loans 3,404 92% 310 8% 3,714 5%

Ordinary accounts receivable 687 5% 12,069 95% 12,756 19%

Total 54,076 79% 14,659 21% 68,735 100%

In 2013, deferred debit card accounts are included in ordinary accounts receivable, whereas they were included on the line

“Other short-term facilities in 2012.

2012

(€ million)




Amounts outstanding


Amounts outstanding


Amounts outstanding % total

Home loans 45,155 95% 2,303 5% 47,458 75%

Consumer loans 2,643 98% 50 2% 2,693 4%

Ordinary accounts receivable 724 6% 11,941 94% 12,665 20%

Other short-term credit facilities 92 100% 92

Total 48,614 77% 14,294 23% 62,908 100%

The exposure position was relatively stable compared with the previous financial year.

The relative value of the "home loans" exposure remains stable at 76%. Conversely, La Banque Postale Financement’s

consumer loans business continued its expansion, and rose from 4% to 5% of total exposure, whereas the exposure of ordinary

accounts receivable decreased by 1 point.



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20

Guarantees obtained

2013

(€ million)

Asset-backed guarantee

Guarantee from a legal entity

Guarantee from an individual Unguaranteed


Amounts outstanding %





Home loans

Performing 12,552 25% 35,623 72% 765 2% 707 1% 49,647 99%

Impaired 194 58% 132 39% 11 3% 337 1%

Total 12,746 35,755 765 718 49,984

Consumer loans

Performing 5 0% 8 0% 1 0% 3,257 100% 3,271 96%

Impaired 1 1% 132 99% 133 4%

Total 5 9 1 3,389 3,404

2012

(€ million)










Home loans

Performing 9,707 22% 33,808 75% 749 2% 727 2% 44,990 100%

Impaired 82 50% 73 44% 10 6% 165 0%

Total 9,789 33,881 749 737 45,155

Consumer loans

Performing 1 0% 2,566 100% 2,566 97%

Impaired 1 1% 76 99% 77 3%

Total 1 1 2,642 2,643

The percentage of home loans guaranteed by a company

decreased notably (72% in December 2013, compared with

75% in December 2012). This difference was transferred in

favour of asset-backed guarantees.

Virtually all consumer loans outstanding are unguaranteed.




es,ernts 20

Credit quality of assets that are neither in arrears nor impaired on an individual basis

2013

(€ million)Amounts

outstanding %

Performing home loans not in arrears 49,474 100%

in arrears 173

Total performing loans 49,647

Performing consumer loans not in arrears 3,243 99%

in arrears 28 1%


2012

(€ million)Amounts

outstanding %

Performing home loans not in arrears 44,855 100%

in arrears 135


Performing consumer loans not in arrears 2,540 99%

in arrears 26 1%


The percentage of performing home loans with no arrears remained stable (99.7%). The percentage of consumer loans in

arrears remains at 1% of performing loans outstanding.

Financial assets in arrears

2013

(€ million)

Unimpaired amounts outstanding in arrears

Doubtful loans

Guarantees

<30 d

30 d to

60 d

60 d to

90 d

90 d to

180 d >180 d Total

Asset-

backed

guarantees

Guaranteed

by a legal

entity

Indivi-

duals

Ungua-

ranteed

Home loans 69 45 27 22 10 173 338 287 206 5 13

Consumer loans 17 11 28 133 1 160

Total 86 56 27 22 10 201 471 287 207 5 173



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20

2012

(€ million)


Doubtful loans

Guarantees

<30 d

30 d to

60 d

60 d to

90 d

90 d to

180 d Total

Asset-

backed

guarantees

Guaranteed

by a legal

entity

Indivi-

duals

Ungua-

ranteed

Home loans 67 33 17 18 135 165 134 150 4 11

Consumer loans 14 12 26 77 1 102

Total 81 45 17 18 161 242 134 151 4 113

Doubtful home loans outstanding increased by €170 million,

of which half (€86 million) stems from the entry of BPE into

the scope of consolidation.

The amount of unimpaired consumer loans in arrears and

doubtful loans increased by €56 million in 2013 compared

with 2012.

Analysis of assets impaired on an individual basis

2013

(€ million) Type of guaranteeAccounts

receivable

Applied guaranteed

amountDiscounted provisions

Discounted provisioning

rate

Doubtful home loans Asset-backed guarantee 163 110 56 35%

Guarantee from a legal entity 80 73 7 10%

Guarantee from an individual

Unguaranteed 14 2 12 86%

Doubtful by contagion not in arrears 80 70 10 12%

Total 337 255 85 25%

Consumer loans 133 1 68 51%

Doubtful ordinary accounts receivable 127 110 87%




es,ernts 20

2012

(€ million) Type of guaranteeAccounts

receivable

Applied guaranteed

amountDiscounted provisions

Discounted provisioning

rate

Doubtful home loans Asset-backed guarantee 66 58 12 19%

Guarantee from a legal entity 41 40 1 3%

Guarantee from an individual 100%

Unguaranteed 9 9 100%

Doubtful by contagion not in arrears 49 47 7 13%

Total 165 145 29 18%

Consumer loans 77 27 35%

Doubtful ordinary accounts receivable 131 110 84%

The home loan provision rate increased from 18% to 25%

compared with the previous year (this increase is partly due

to the first-time consolidation of BPE).

The provision rate on ordinary accounts increased from 84%

to 87%. For consumer loans the rate went to 51%, compared

to 35% in the previous year.

33.7.2 Credit risk on transactions with legal entity customers

La Banque Postale’s activities that give rise to a credit risk

are on two levels:

as part of its commercial activity aimed at financing

the economy: La Banque Postale was granted a licence

to offer financing to Legal Entities from the French

Prudential Control Authority in September 2011.

The main customer segments served by the range

of products offered are currently: Companies, Local

Authorities, Public Health Companies, social housing

associations and Non-profit Associations;

as part of its intervention on the financial markets,

La Banque Postale is also required to manage the

credit risk arising on inter-bank cash transactions,

like deposits, loans, repos (which therefore relates to

financial institutions) and the issuer risk arising on the

debt securities traded in the trading room (Companies,

financial institutions, sovereign entities, and Local

Authorities).

These risks take the form of balance sheet, and off-balance

sheet commitments (guarantees, collateral, investments

made by La Banque Postale’s insurance subsidiaries, and

the undrawn portion of loans granted, etc.).

La Banque Postale has opted for a prudent approach and

gradual expansion.

The range of financing offered by La Banque Postale

currently includes: cash facilities, equipment leases,

medium-term loans for setting up and buying out

companies, bilateral or syndicated loans for Key Accounts,

and property leases.

In the 2013 financial year, La Banque Postale’s product

offering was extended to factoring, to medium-terms loans

for VMCs, SMCs and MSCs and to interest-rate hedging

transactions on behalf of third parties.

In 2012, La Banque Postale developed a financing offering

aimed for customers in the Social and Local Economy

(social housing associations, cooperative companies,

local and regional authorities, management voluntary

organizations, and local organizations): cash facilities (since

June 2012), and medium-term financing (since November

2012).

In the 2013 financial year, the product offering aimed at the

Local Public Sector was extended to:

loans with an early cash availability phase, personalised

amortisation loans, bridging loans;

social renting-buying loans (PSLA) aimed at social

housing operators with a PSLA agreement.

Lastly, La Banque Postale offers since June 2013 loans to

Public Health Companies (cash facilities, medium and long

term loans)



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20

Counterparty risk management

General provisions

La Banque Postale’s rules for granting and committing

to loans have been drawn up in compliance with CRBF

Regulation 97-02 (amended) on internal controls. They

specifically take the requirements of Articles 7 and 21.

The review and decision-making process is based on:

eligibility conditions, a review, and determining a financial

rating, as well as obtaining guarantees in some cases.

The aim of the risk management system selected for the

activity involving the financing of legal entities is to make

it possible to detect risks at all levels for each of the

activity’s processes (granting, management, collection and

provisioning). It is based on the following factors:

setting up a comprehensive credit committee system at

various levels within the Bank;

individual risk monitoring procedures and a management

platform for global risk:

- control procedures for delegations of authority,

- creation of a national Special Affairs and Disputes

unit, which is dedicated to the financing activities

dedicated to these non-Retail customer segments.

This unit assesses the customer’s situation and

their ability to recover, negotiates a voluntary

liquidation plan with the customer, takes part in

potential “banking pool” meetings, and manages the

relationship with administrators or court-appointed

liquidators, and mediators or ad hoc agents.

For SMEs, micro-businesses and voluntary organizations,

the general review and decision-making process is

supplemented by:

a specific banking behaviour score;

a delegation chain based on: (i) the quality of the

counterparty as measured by a La Banque Postale

rating (specific rating scales for these counterparties);

(ii) the overall balance outstanding for this customer

(or this group); (iii) the nature of the financing under

consideration.

For the Local Public Sector, supplementary provisions are

also set in place:

a specific rating system for each market (Local

Authorities, social housing associations, and Public

Health Companies);

a delegation chain based on the type of the counterparty,

its internal rating and the nature of the financing under

consideration;

the ability for La Banque Postale to refinance with the

Caisse Française de Financement Local its production of

medium and long term loans granted to Local Authorities

and Public Health Companies.

Transactions in an amount equal to or in excess of

€10 million must be approved by a member of the Executive

Board. The same applies of overruns of individual limits.

In terms of investment

In terms of investment, third parties are systematically

rated and assigned an individual limit designed to cap the

total amount of the commitment. Where applicable, these

individual limits are supplemented by so-called group

limits, which govern exposure to a group of third parties that

are considered as a single beneficiary within the meaning of

Article 3 of CRBF Regulation 93-05 (amended).

La Banque Postale’s universe is usually restricted to

investment grade counterparties and issuers, which

therefore have an internal rating of at least BBB-.

The minimum rating limit is lowered to BB- (according to

the ACP cross-reference tables, BB- corresponds to the

4: BB-to BB+ grade at Fitch and S&P; to the Ba1 to Ba3

grade at Moody’s; to the 4 to 5 grade at Coface; and to the

4 to 5+ grade at Fiben) in certain specific cases, primarily

as part of the expansion of the Major Corporate Customers

financing business, as long as the Bank maintains an

ongoing commercial relationship.

La Banque Postale can only perform repo, or stock or

fixed derivative lending transactions that expose it to a

counterparty risk, if there is a prior ISDA or FBF Framework

Agreement in place that includes collateralisation clauses.

The quantitative factors included in such agreements

(instruments concerned, threshold and frequency of margin

calls, and exemptions, etc.) are subject to approval by the

Risk Department.

The individual limits are supplemented by a set of limits

designed to control the risks of concentration on groups of

counterparties, which are classified in accordance with their

country of origin, their business sector and their internal

rating. The Risk Committee may review these diversification

limits on a monthly basis.

For Local Authorities only, an Annual Review of Risk

Authorizations has been put in place in the last quarter of

2013. This procedure allows a collective and comprehensive

review of the largest local authorities and sets annual

individual limits for each counterparty.




es,ernts 20

Exposure to credit risk on market transactions with legal entities

2013

Category(€ million) Sovereign Bank Corporate

Public authority Securitisation Total

Financial assets at fair value through profit

or loss 157 4,698 384 5,239

Available-for-sale financial assets 3,022 7,098 1,644 74 5 11,843

Loans and receivables—Credit institutions 558 81,912 12 400 82,882

Customer loans and receivables 655 225 2,763 1,489 227 5,361

Assets held to maturity 30,345 1,921 32,266

Balance sheet exposure net of impairment 34,737 95,854 4,803 1,563 632 137,591

Rating(€ million) AAA AA A Other Total

Financial assets at fair value through profit or loss 61 1,383 2,981 814 5,239

Available-for-sale financial assets 1,847 2,601 4,324 3,071 11,843

Loans and receivables—Credit institutions 77,424 3,284 1,151 1,023 82,882

Customer loans and receivables 837 478 648 3,396 5,361

Assets held to maturity 2,791 27,307 549 1,619 32,266

Balance sheet exposure net of impairment 82,960 35,053 9,653 9,923 137,591

Geographical area(€ million) France

Euro zone

Non-euro zone Total

Financial assets at fair value through profit or loss 2,827 1,677 735 5,239

Available-for-sale financial assets 6,311 4,015 1,517 11,843

Loans and receivables—Credit institutions 82,565 215 102 82,882

Customer loans and receivables 4,721 640 5,361

Assets held to maturity 24,797 6,606 863 32,266

Balance sheet exposure net of impairment 121,221 13,153 3,217 137,591



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20

2012

Category(€ million) Sovereign Bank Corporate

Public authority Securitisation Total

Financial assets at fair value through

profit or loss 848 5,392 551 6,791

Available-for-sale financial assets 2,714 5,422 1,708 10 1 9,855

Loans and receivables—Credit institutions 711 80,125 12 407 81,254

Customer loans and receivables 172 1,002 112 254 1,540

Assets held to maturity 34,668 2,280 88 37,036

Balance sheet exposure net of impairment 39,112 93,219 3,362 122 662 136,476

Rating(€ million) AAA AA A Other Total

Financial assets at fair value through profit or loss 387 2,382 3,624 398 6,791

Available-for-sale financial assets 2,824 2,974 2,576 1,481 9,855

Loans and receivables—Credit institutions 861 77,055 2,865 473 81,254

Customer loans and receivables 141 193 133 1,073 1,540

Assets held to maturity 3,081 29,341 2,461 2,152 37,036

Balance sheet exposure net of impairment 7,295 111,945 11,659 5,577 136,476

Geographical area(€ million) France

Euro zone

Non-euro zone Total

Financial assets at fair value through profit or loss 4,355 2,003 432 6,791

Available-for-sale financial assets 6,348 2,792 716 9,855

Loans and receivables—Credit institutions 79,361 1,771 122 81,254

Customer loans and receivables 1,456 84 1,540

Assets held to maturity 27,006 8,585 1,444 37,036

Balance sheet exposure net of impairment 118,526 15,235 2,714 136,476

Financial assets held to maturity

These are high-quality assets that consist mainly of loans

issued or guaranteed by euro zone Member States, as

shown in the tables above. Sovereign issuers amount to 94%

of the portfolio. Furthermore, issuers with a Tier 1 rating

(AAA to A-) account for 93% of the positions in the portfolio.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include

both securities and derivatives. Bank issuers account for

the bulk of financial assets at fair value through profit or

loss (90% of the positions in the portfolio).

As shown in the three tables above, these are high quality

assets.

Loans and receivables—Credit institutions

La Banque Postale enters into inter-bank transactions (both

deposits and securities borrowing/lending) in the normal

course of its business.

The counterparty risk relating to inter-bank deposits is

managed in the same way as issuer risk (these transactions

are included in individual, group and diversification limits).




es,ernts 20

As at the end of December 2013, La Banque Postale’s inter-

bank deposits amounted to €81.9 billion.

These deposits are mainly deposits made with the

Caisse des Dépôts as backing for the funds gathered on

Sustainable Development, Livret A passbook savings

accounts and Popular savings accounts. The remainder of

inter-bank deposits is with French banks that are rated at

least A+.

The counterparty risk relating to securities lending and

repurchase is limited by the fact that La Banque Postale

only works with these instruments after it has finalised

a framework agreement requiring the arrangement of

collateral. As a result, the credit risk on repo and reverse

repo transactions as at 31 December 2013 was extremely

low.

Commitments to financial institutions increased by 2.8%

to €18.1 billion.

Exposure to credit risk on commercial transactions with legal entities

2013

(€ million)




Amounts outstanding

As a % of total

exposureAmounts

outstanding

As a % of total

exposureAmounts

outstanding % total

Finance lease operations 562 89% 67 11% 629 21%

Local public sector loans 2,185 37% 3,676 63% 5,861 192%

Loans to other legal entities 1,185 45% 1,427 55% 2,612 85%

Factoring 9 100% 9 0%

Ordinary accounts receivable 128 26% 363 74% 491 16%

Other 52 100% 52 2%

Total 4,069 42% 5,585 58% 9,654 100%

2012

(€ million)




Amounts outstanding

As a % of total

exposureAmounts

outstanding

As a % of total

exposureAmounts

outstanding % total

Finance lease operations 172 71% 69 29% 241 8%

Local public sector loans 181 10% 1,578 90% 1,759 58%

Loans to other legal entities 485 46% 576 54% 1,061 35%

Total 838 27% 2,223 73% 3,061 100%



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20

Risk relating to Local Public Sector

The risks concern primarily Local Public Authorities, as

La Banque Postale made them a priority when it launched

this financing activity in June 2012. The financing activity

aimed at social housing associations was progressively

launched during the year 2013.

As at 31 December 2013, loans amounting to €5.961 billion

had been authorised for the local sector, of which

€2.185 billion had been drawn down.

Nearly one billion euros in medium and long term loans

have been sold to CAFFIL in 2013, and thus do not appear

in these figures.

Risk relating to companies

As at 31 December 2013, La Banque Postale’s exposure

to the Corporate segment had greatly increased. This

substantial change reflects the launch of the corporate

lending business and the rise in authorizations given for

legal entities financing.

La Banque Postale’s exposure to companies consists mainly

of exposure to large French corporates.

Guarantees obtained on the loans granted to legal entities

2013

(€ million)










Finance leases

Performing 25 4% 142 25% 3 1% 390 70% 560 100%

Doubtful 1 100% 1

Total 25 142 3 391 561

Local public sector loans

Performing 2,185 100% 2,185 100%

Doubtful

Total 2,185 2,185

Other legal entities loans

Performing 117 10% 228 19% 838 71% 1,183 100%

Doubtful 2 100% 2

Total 117 228 840 1,185

Factoring

Performing 9 100% 9 100%

Doubtful

Total 9 9




es,ernts 20

2012

(€ million)










Finance leases

Performing 8 5% 57 33% 3 2% 104 60% 172 100%

Doubtful

Total 8 5% 57 33% 3 2% 104 60% 172 100%

Local public sector loans

Performing 21 12% 160 88% 181 100%

Doubtful

Total 21 12% 160 88% 181 100%

Other legal entities loans

Performing 115 370 76% 485 100%

Doubtful

Total 115 24% 370 76% 485 100%

Credit quality of financial assets that are neither in arrears nor impaired on an individual basis

(€ million)

31/12/2013 31/12/2012



Finance lease operations not in arrears 560 100% 172 100%

in arrears 1

Total 561 172

Local public sector loans not in arrears 2,132 98% 181 100%

in arrears 53 2%

Total 2,185 181

Loans to legal entities not in arrears 1,183 100% 485 100%

in arrears

Total 1,183 485

Factoring not in arrears 9 100%

in arrears

Total 9



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20

Financial assets in arrears

2013

(€ million)


Doubtful loans

Guarantees

<30 d30 d to

60 d60 d to

90 d90 d to

180 d >180 d Total

Asset-backed

guarantees

Guaranteed by a legal

entityIndivi-duals

Ungua-ranteed

Finance lease

operations 1 1 2

Local public

sector loans 20 22 8 3 53 53

Factoring

Loans to other

legal entities 2 2

Total 20 23 8 3 56 57

As at 31 December 2012, doubtful loans to legal entities

outstanding amounted to €495,000, i.e. 0.7% of the total

outstanding amount. The provisions amounted to €228,000,

i.e. a provision rate of 46%.

Securitisations

La Banque Postale’s securitisation exposure amounted

to €632 million, which broke down between loans and

receivables—Credit institutions (€400 million), customer

loans and receivables (€227 million), and financial assets

available for sale (€5 million).

An investment was made with Oséo Financement in 2011,

in order to back Livret A passbook savings accounts

and Sustainable Development (LDD) accounts. Two

further investments were agreed by La Banque Postale’s

trading room, the first one where the underlying assets

are receivables due from the Greater Paris Transport

Association, the second one where the underlying assets

are receivables due from Italian drugstores.

Lastly, the other investments in this asset class were

transferred to La Banque Postale when it was founded in

2006 and are gradually phased out since that date.

For these reasons, the securitisation portfolio is of a high

quality: all the tranches in which La Banque Postale has

invested are of a rank 1 rating, and nearly 91% of the

positions are held in France.

The geographical breakdown of La Banque Postale’s

securitisations are as follows:

BREAKDOWN OF OUTSTANDING DEPOSITS

AS AT 31 DECEMBER 2013

0%Netherlands

1%Spain8%Italy 91%

France

As at 31 December 2013, La Banque Postale was not aware

of any significant deterioration in the credit quality of the

underlying assets in its securitisation portfolio. These

underlying assets consist mainly of home and residential

property loans, and receivables due from French institutions

and companies.




es,ernts 20

The bulk of the securitisation portfolio balances consists of

receivables due from institutions and companies linked to

the Oséo Financement securitisation process.

The breakdown of La Banque Postale’s securitisation

portfolio by type of underlying asset was as follows:



0%Personalloans

7%Residentialpropertyloans

93%Loans to

institutionsand companies

Exposure to counterparty risk

In the terminology used at La Banque Postale, counterparty

risk stems primarily from transactions involving futures.

Exposure is assessed via the present value method.

These transactions take place primarily with banking

counterparties. In this context, they are systematically

performed as part of agreements that provide for the

netting of exposure and the putting up of collateral with

regular margin calls.

The residual risk, which is subject to limits and is

periodically monitored by the Corporate Credit, Public

Sector and Institutional Risk Department, is not material.

La Banque Postale is exposed to counterparty risk primarily

in connection with transactions using fixed derivatives.

This risk is limited by the fact that La Banque Postale

only works with top-tier institutions, with which it has

signed a netting and collateral agreement. In addition, the

instruments used are mainly “plain-vanilla” interest rate

swaps.

As at the end of 2013, net exposure to those counterparties,

after taking any collateral in place into account, was

€19.7 million. These counterparties are all rated A or above.

(€ million) 31/12/2013 31/12/2012

Geographical area

Euro Zone 19.0 22.6

Non-euro zone 0.7 3.0

Total 19.7 25.6



4%Non-euro zone

96%Euro zone

Concentration risk for each beneficiary

The regulations on major risks are applied in accordance

with the Decree of 25 August 2010, which specifies that

institutions must comply with the following limit: the total

amount of risks incurred in respect of a single beneficiary

must not exceed 25% of the Group net shareholders’ equity.

No beneficiary exceeded this limit as at 31 December 2013.

In addition, pursuant to Instruction 2010-I-01 issued by

the Prudential Control Authority, La Banque Postale has

declared 41 counterparties under the gross risk monitoring

framework, of which only 9 are considered as major risks.

33.7.3 Additional information on sovereign exposure

The list of sovereign exposures was prepared in accordance

with the scope defined by the European Banking Authority

(EBA), in other words by including the exposure data relative

to regional authorities, central authorities and businesses

guaranteed by the French government.

The exposure shown below summarises the exposure for

subsidiaries in which La Banque Postale owns an interest

of 50% or more.



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20

Sovereign exposures 2013

La Banque Postale does not have any exposure to Cyprus, Hungary and Egypt.

(€ million)Bank

portfolio

Assets at fair value through

profit or lossTotal direct exposure (a)

Off-balance sheet

Total direct and indirect exposure (b)

Exposure (as a %)

Greece

Ireland 1 1 95 96 0.3%

Italy 1,276 2 1,278 192 1,470 4.3%

Portugal 36 36 0.1%

Spain 1,184 1,184 1,184 3.4%

Total GIIPEs 2,461 2 2,463 323 2,786 8.1%

Germany 2,964 2,964 2,964 8.6%

Austria 16 16 16

Belgium 1,625 13 1,638 20 1,658 4.8%

France 24,523 142 24,665 21 24,686 71.7%

United Kingdom

Luxembourg 46 46 46 0.1%

Netherlands

Poland 11 11 11

Slovakia 1 1 1

Slovenia 3 3 3

Switzerland 3 3 3

Supra-national 1,387 1,387 1,387 4.0%

Total Europe 30,579 155 30,734 41 30,775 89%

Rest of the World 876 876 876 2.5%

Total 33,916 157 34,073 364 34,437 100%(a) Direct exposure: net book value (including impairment) of the Bank’s proprietary exposure.

(b) Direct and indirect exposure: direct exposure, plus indirect exposure through the guarantees granted to some of the Group’s UCITS.




es,ernts 20

Change in exposure to GIIPS

Change in direct exposure (a)

(€ million)

December 2012 December 2013

Nominal value

Book value Impairment Maturity Disposals Transfer (c) Acquisitions

Nominal value

Book value

Greece

Ireland 1 1 1 1

Italy 27 27 50 77 81

Portugal (1,063) 1,063

Spain 3 2 711 713 751

Available-for-sale financial assets 31 31 (1,063) 1,774 50 791 833

Greece

Ireland

Italy 1,747 1,798 (585) 1,162 1,195

Portugal 1,144 1,156 (81) (1,063)

Spain 1,147 1,166 (5) (711) 431 433

Financial assets held to maturity 4,037 4,120 (671) (1,774) 1,593 1,628

Greece

Ireland

Italy

Portugal

Spain

Loans and receivables

Greece

Ireland

Italy (250) (550) 802 2 2

Portugal

Spain

Financial assets at fair value through profit or loss (b) (250) (550) 802 2 2

(a) Direct exposure: outstanding balances (including impairment) of proprietary exposure, not including the indirect exposure represented by the

guarantees granted to Group UCITS.

(b) Amounts representing the initial fair value on acquisition.

(c) La Banque Postale has modified in September 2013 its intention to hold a portion of its exposures to some countries until maturity. This change

resulted in the reclassification of €1,774 million in held-to-maturity investments to available-for-sale financial assets, in particular for Spain and

Portugal investments.



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20

Additional information on exposure to certain countries

As the Insurance sector exposures were immaterial, they have not been detailed below.

Breakdown by category

(€ million)Loans and

receivables

Available-for-sale

assets

Assets held to

maturityBank

portfolio (a)

Assets at fair value

through profit or loss (a)

Balance sheet

total after impairment

Off-balance sheet(b) Total

Greece

Ireland 1 1 1 95 96

Italy 81 1,195 1,276 2 1,278 192 1,470

Portugal 36 36

Spain 751 433 1,184 1,184 1,184

Total 833 1,628 2,461 2 2,463 323 2,786(a) The amounts shown are expressed at their net book value on the balance sheet.

(b) Off-balance sheet amounts correspond to indirect exposure through guarantees given, primarily to Group UCITS.

Breakdown of unrealised gains and losses recorded in reserves

(€ million)Available-for-sale

assetsLosses and gains

recorded in reservesFV

ranking

Greece

Ireland 1 N1

Italy 81 1 N1

Portugal

Spain 751 20 N1

Total 833 21

Impact of impairment

(€ million) TotalOf which

impairmentTotal before impairment

Greece

Ireland 96 96

Italy 1,470 1,470

Portugal 36 36

Spain 1,184 1,184

Total 2,786 2,786




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Breakdown by maturity

(€ million) Total

Remaining life in years

1 2 3 4 5 <10 >10

Greece

Ireland 96 95 1

Italy 1,470 208 686 197 298 75 6

Portugal 36 36

Spain 1,184 10 373 442 216 140 3

Total 2,786 313 1,095 640 514 215 9

Non-sovereign exposure to GIIPS 2013

(€ million) Bank CorporatePublic

authority Securitisation Total

Greece

Ireland 103 76 179

Italy 102 203 305

Portugal

Spain 470 110 580

Available-for-sale financial assets 675 389 1,064

Greece

Ireland

Italy

Portugal

Spain

Financial assets held to maturity

Greece

Ireland

Italy

Portugal

Spain

Loans and receivables

Greece

Ireland

Italy 343 52 395

Portugal

Spain 172 48 220

Financial assets at fair value through profit or loss 515 100 615



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33.8 Market risk

Even though La Banque Postale does not have a trading

business as such, it is exposed to market risk via its

Cash Management and Asset and Liability Management

activities (portfolio of available-for-sale assets and hedging

transactions).

The market portfolio, which includes all transactions that

are subject to market risk, not only covers the transaction

portfolio, as defined in Articles 298 and 299 of the

French Ministerial Decree of 20 February 2007 regarding

shareholders’ equity requirements for credit institutions

and investment firms, but also covers bank portfolio

transactions, including securities held for sale and certain

lending and borrowing transactions.

In terms of market risk management, La Banque Postale

is first and foremost exposed to interest-rate risk. Its credit

spread and equity market risk is lower, and its currency

risk, primarily the risk linked to international mandates and

financial activities, and commodities risk, is low.

Assessment of risk

The Bank has decided to apply a Value at Risk indicator

(1-day, 99%) to all its marked-to-market positions as a

cautionary measure. The limit of the indicator is reviewed

by the Risk Committee on a monthly basis.

VaR is a risk indicator that is widely used in the banking and

financial sector, in order to assess a portfolio of financial

instruments’ level of exposure to market risk.

This indicator seeks to project the amount of the loss

that a portfolio may incur. For instance, a 1-day 99% VaR

represents the amount of loss that would be statistically

exceeded in 1% of cases. This indicator can predict the

amount of potential loss in 99% of cases, but does not give

any indication of the amount of loss that would happen

in the remaining 1% of cases, and it assumes that the

positions could be unwound, or at least immunised, in

less than a day. Furthermore, this indicator does not take

some aspects of the financial markets into account, such

as asymmetrical distribution, fat tails, and correlated

movements, or the risk relating to intra-day movements.

La Banque Postale’s VaR indicator not only covers the

transaction portfolio (impact on fair value through profit

or loss), but also covers positions recognised as assets

available for sale (impact on shareholders’ equity).

The VaR implemented at La Banque Postale is a parametric

VaR, which is calculated based on a variance-covariance

matrix covering interest-rate risk, spread risk, currency

risk and the risk of fluctuations in the equity indices to

which the bank is exposed. In terms of risk factors, the

main approximation concerns the “specific interest-rate

risk”: the credit spread risk (to which bonds are sensitive)

is taken into account via a sector-rating approach which

only captures a portion of this type of risk.

This matrix is calculated with a scaling factor designed to

overweight recent changes compared with earlier ones.

Therefore, La Banque Postale’s implementation does not

cover second tier risks (convexity), which are actually a rare

occurrence for the Bank.

The VaR calculated in this way partially covers option risk,

although second-tier risks are not taken into account. The

development of option positions, which are currently not

material, could result in the Risk Department using a more

appropriate method.

The Risk Department back-tests the results of the model

used to calculate the VaR, in order to assess its quality.

This analysis is based not just on counting the number

of over-runs, but also assesses compliance with certain

assumptions, primarily the normality and Markovian

character of the distributions.

The VaR measurements are supplemented by monthly

stress tests designed to measure the Bank’s exposure to

market situations outside the confidence interval used to

calculate the VaR.




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Change in VaR (Value at Risk)

GLOBAL VAR

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

50,000,000

Dec-13Nov-13Oct-13Sep-13Aug-13Juky-13June-13May-13Apr-13Mar-13Feb-13Jan-13

Global VaR

Limit

La Banque Postale reclassified Portuguese and Spanish

investments in September 2013 from its held-to-maturity

investment portfolio to its available-for-sale portfolio, in

order to be able to actively manage its positions.

Simultaneously, the market risks limits were increased by

the Executive Board in order to account for this additional

exposure.

As of today, the Portuguese investments have all been sold.

The exposure to Spanish investments is now managed by

the trading room as part of its usual interest rate and credit

delegate management activity.

(€ million) 31/12/2013 31/12/2012

Global VaR 11.6 8.7

VaR of transactions recorded in the trading portfolio 2.4 2.0

Risk factor contribution to global VaR

(€ million) 31/12/2013 31/12/2012

Interest rates 7.3 1.9

Credit spreads 1.4 5.0

Currency 0.7 (0.2)

Equity markets 2.3 1.2

Volatility (0.1) (0.1)

Total 11.6 8.3



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Statistics for the 2013 financial year

(€ million) Moyenne Minimum Maximum

Global VaR 11.4 6.1 26.3

VaR of trading portfolio transactions 2.6 1.3 5.5

In 2013, the main event that had an impact on the VaR

was the announcement by the American Federal Reserve

that it would start to withdraw its exceptional cash supply

program. Markets volatility quickly decreased later on, and

the VaR returned to its previously observed levels.

The stress scenarios applied at 31 December 2013 show a

potential loss of €205 million, in the worst case.

NOTE 34 Additional information on financial instruments

34.1 Fair value of financial instruments by category

34.2 Methods for calculating the fair value of financial instruments

34.3 Impact of financial instrument on net profit/(loss) and equity

34.4 Financial hedging instruments

34.5 Reclassification of financial assets




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34.1 Fair value of financial instruments by category

The tables below show the fair value of the financial instruments on the balance sheet, and their breakdown according to

the IAS 39 categories:


(€ million)

31/12/2013 Book value according to the IAS 39 categories

Book value

Fair value

Fair value

through profit

or loss Trading

Designated as fair value

through profit or

loss

Available-for-sale

assetsLoans and

receivables

Assets held to

maturity

Borrowings at

amortised cost Hedge

ASSETS

Bank assets

Customer loans and receivables 59,204 61,633 59,204

Receivables from credit institutions 82,894 83,102 82,894

Securities portfolio 49,784 52,110 5,366 11,898 32,266 253

Other current financial assets 1,200 1,200 1,102 99

Non-bank assets

Other non-current financial assets 942 942 548 269 94 31

Trade and other receivables 2,936 2,936 2,936

Other current financial assets 430 430 252 109 49 20

Cash held at post offices 612 612 612

Cash and cash equivalents 2,163 2,163 1,288 875

LIABILITIES

Bank liabilities

Liabilities to credit institutions 14,757 14,840 14,757

Customer transactions 166,583 166,602 166,583


and other 6,790 6,845 112 6 6,301 372

Non-banking liabilities

Bonds and other financial debt 7,103 7,587 85 2,222 4,795

Trade and other payables 4,424 4,424 4,424



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(€ million)

31/12/2012 Book value according to the IAS 39 categories

Book value

Fair value

Fair value

through profit

or loss Trading

Designated as fair value

through profit or

loss

Available-for-sale

assetsLoans and

receivables

Assets held to

maturity

Borrowings at

amortised cost Hedge

ASSETS

Bank assets



Securities portfolio 54,281 57,446 6,900 9,891 37,036 454

Other current financial assets 1,305 1,305 1,179 126

Non-bank assets

Other non-current financial assets 894 894 595 139 114 47

Trade and other receivables 2,453 2,453 2,453

Other current financial assets 781 781 427 269 64 20

Cash held at post offices 719 719 719

Cash and cash equivalents 2,167 2,167 2,167

LIABILITIES

Bank liabilities


Customer transactions 160,393 160,395 160,393


and other 7,185 7,185 105 6,544 536

Non-banking liabilities

Bonds and other financial debt 7,652 8,217 90 2,294 5,268

Trade and other payables 4,349 4,349 4,349

34.2 Methods for calculating the fair value of financial instruments

A. Financial instruments excluding Banking activities

The fair value of the bond debt and of the related swaps is

measured using a calculation method based on observable

data, which corresponds to Level 2 of the fair value ranking

established in IFRS 7. Details of this calculation method

are provided below.

Every financial product is assessed as a series of future

cash flows regardless of whether they are determined at

the calculation date. The fair value calculation is based on

discounting these future cash flows. The discounting factors

are deduced from a zero coupon curve, which is itself

determined based on a benchmark of interest-rate products

spread over more than 40 due dates. To calculate the fair

value of the bond debt, La Poste’s credit spread is added

to the zero coupon curve. La Poste’s implied credit spread

is determined based on price brackets supplied by various

market participants (brokers), which are adjusted for data

observed in the market (price and bracket dispersion).




es,ernts 20

In the case of cash flows dependent on a floating-rate not

yet determined at the calculation date, future rates are

estimated based on the future structure of interest rates.

In the case of financial products with cash flows in different

currencies, the cash flows are discounted for each currency

based on discounting factors specific to each currency.

The currency market values obtained are then translated

into euros at the ECB exchange rate on the day of the

calculation.

Option products are determined by factoring in implied

market volatility, in view of the option exercise dates.

The fair value of current financial assets and liabilities

is deemed equivalent to their book value, in view of their

short-term maturity.

The fair value of bonds and UCITS units is determined

according to listed prices.

B. Financial instruments used in Banking activities

Fair value is the amount for which an asset could

be exchanged, or a liability extinguished between

knowledgeable and willing parties operating under normal

competition conditions. When an instrument is first

recognised, its fair value is usually the transaction price.

IAS 39 recommends initially using a listed price on an active

market to determine the fair value of a financial asset or

liability. A market is considered to be active if prices are

easily and regularly available from a stock exchange, a

broker, a trader or a regulatory agency, and if these prices

represent actual transactions carried out at arm’s length.

In the absence of an active market, fair value must be

determined using valuation techniques.

These techniques include the use of recent arm’s length

transactions. They are based on market data, the fair values

of substantially identical instruments, discounted cash

flow models or option pricing models, and use recognised

valuation methods. The aim of a valuation technique is to

establish what the instrument’s price would have been in

a normal market.

For example, the fair value of bonds, variable-income

securities and futures is determined according to listed

prices. Valuation techniques are used for over-the-counter

derivatives, discount securities (e.g. commercial paper, and

certificates of deposit, etc.) and repo deposits.

The market value of unlisted equity investments classified

as available-for-sale financial assets is determined with

reference to certain criteria such as net assets, the earnings

outlook and discounted future cash flows.

Unconsolidated investments where the fair value cannot be

measured reliably are valued at cost.

The listed price for an asset held or a debt to be issued is

usually the bid price, and the ask price for a debt held or an

asset to be acquired.

Fair value of loans

The scope applied is that of all loans drawn down and

included on La Banque Postale’s balance sheet. Loans

that have been granted but not yet released are not taken

into account, as it is assumed that, since their rate has just

been fixed, their value will not be different from the amount

advanced.

For the types of loans sold by the Bank, the main

assumptions underlying the calculation are as follows:

The fair value of overdrafts on sight accounts is assumed

to correspond to the accounting value. This seems a

conservative assumption given the interest rate charged

to customers (12%) and the very short length of the loans

(less than one month).

The fair value of loans is determined on the basis of

internal models, which consist in discounting future

recoverable capital and interest flows over the residual

maturity, which are discounted based on opportunity

interest rates.

Fair value of deposits

The main underlying assumptions for the calculation are

as follows:

For deposits where the remuneration rate is regulated,

Livret B (savings passbook) accounts, Youth passbook

savings accounts, National Savings Accounts and term

deposits accounts, fair value is assumed to correspond

to the net book value of the amount outstanding.

The fair value of sight deposits is assumed to correspond

to the net book value of the amount outstanding, net of

the fair cost value of the swaps used to hedge overnight

deposits (via the carve-out option).



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Fair value of held or issued debt instruments

The fair value of listed financial instruments corresponds to

the closing market price. The fair value of unlisted financial

instruments is determined by discounting future cash flows

at the market rate in effect at the closing date.

All of these instruments are deemed level 2, and the most

significant parameters with regard to the market value of

these instruments are considered indirectly observable.

C. Ranking of fair value assessments recognised on the balance sheet

The fair value ranking levels defined in IFRS 7 are as

follows:

Level 1: valuation determined by prices listed on an

active market;

Level 2: valuation determined by techniques using

observable data;

Level 3: valuation determined by techniques using

unobservable data.




es,ernts 20


(€ million) Level 1 Level 2 Level 3

Banking activities assets

Government securities and similar 105


Equities and other variable-income securities 40


Interest-rate derivatives 118

Foreign exchange derivatives 3

Equity and index derivatives 7

Trading derivatives 128


Fair value hedging derivatives 129


Cash flow hedging derivatives 92

Government securities and similar 2,049 36

Bonds and other fixed-income securities 8,658 93

Equities and other variable-income securities 1,061

Unconsolidated investments 0 127

Available-for-sale financial assets 11,769 129 127

Non-banking activities assets

Other non-current financial assets 304 638

Trade and other receivables 2,936

Other current financial assets 252 179

Cash held at post offices 612

Cash and cash equivalents 1,061 1,102

Banking activities liabilities

Debt evidenced by a certificate 6

Financial liabilities designated at fair value through profit or loss 6



Other derivative instruments 20





Non-banking activities liabilities

Bonds and other financial debt 7,103

Trade and other payables 4,424

Reclassifications from Level 1 to Level 2: Assets: €2.2 million, Liabilities: none.

Reclassifications from Level 1 to Level 3: Assets: €3.9 million, Liabilities: none.

Reclassifications from Level 2 to Level 1: Assets: €130 million, Liabilities: none.



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(€ million) Level 1 Level 2 Level 3

Banking activities assets

Government securities and similar 289


Equities and other variable-income securities 47









Cash flow hedging derivatives 126

Government securities and similar 1,919 41

Bonds and other fixed-income securities 6,468 456

Equities and other variable-income securities 1,007

Unconsolidated investments 4 0 108

Available-for-sale financial assets 9,398 497 108

Non-banking activities assets

Other non-current financial assets 187 707

Trade and other receivables 2,453

Other current financial assets 328 453

Cash held at post offices 719

Cash and cash equivalents 1,054 1,113

Banking activities liabilities

Debt evidenced by a certificate 6

Financial liabilities designated at fair value through profit or loss 6



Other derivative instruments 16





Non-banking activities liabilities

Bonds and other financial debt 7,652

Trade and other payables 4,349




es,ernts 20

LEVEL 3 FAIR VALUES: RECONCILIATION OF OPENING AND CLOSING BALANCES

(€ million)

Assets at fair value

through profit or

loss

Assets designated

at fair value through profit

and lossTrading

derivativesHedging

derivatives

Available-for-sale

assets Total

Opening balance 108 108

Gains and losses recorded in income (1) (1)

Gains and losses recorded in equity 15 15

Purchases

Sales (1) (1)

Issues

Redemptions

Other movements

Reclassifications to or from Level 3 4 4

Closing balance 127 127

LEVEL 3 FAIR VALUES: PROFITS AND LOSSES FOR THE PERIOD RECOGNISED IN INCOME

None.



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34.3 Impact of financial instrument on net profit/(loss) and equity

Non-banking activities

The impact of the Group’s financial instruments on income (excluding Banking activities) is described in Note 13 “financial

profit / (loss)”.

Banking activities

The table below details the impact of the Banking activities financial instruments on income and equity.

2013

(€ million)

Interest income

(expense)

Changes in fair value

ImpairmentDeconsolidation

and dividendsNet gain

(loss)

Fair value through

profit or loss

Fair value through

equity

Loans, receivables and payables 1,899 (154) 1,745

Assets held to maturity 1,127 1,127

Available-for-sale assets 246 28 129 403

Financial instruments at fair

value through profit or loss 23 23

Total 3,272 23 28 (154) 129 3,298(a) (b) (c) (d) (e)

2012

(€ million)

Interest income

(expense)

Changes in fair value

ImpairmentDeconsolidation

and dividendsNet gain

(loss)

Fair value through

profit or loss

Fair value through

equity

Loans, receivables and payables 1,278 (60) 1,218

Assets held to maturity 1,324 108 1,432

Available-for-sale assets 209 216 5 163 593

Financial instruments at fair

value through profit or loss 244 244

Total 2,811 244 216 53 163 3,487(a) (b) (c) (d) (e)

(a) Corresponds to the net difference between “Interest and similar income” and “Interest and similar expenses” included in NBI (see Note 7).

(b) Corresponds to the “Net gains and losses on financial instrument transactions at fair value through profit or loss” line in NBI.

(c) Corresponds to the amount recognised in the change in equity for the year.

(d) + (e) Corresponds to the “Net gains or losses on available-for-sale assets” line in NBI.




es,ernts 20

34.4 Financial hedging instruments

Non-banking activities

The effects of hedging the fair value of the bonds on the consolidated financial statements are shown in Note 30.

Banking activities

Hedging derivatives used in the Banking activities (see Note 3.L.6) broke down as follows:

(€ million)

Fair value hedges Cash flow hedges

Hedging of net investments in foreign

currencies Total

Positive fair value

Negative fair value

Positive fair value

Negative fair value

Positive fair value

Negative fair value

Positive fair value

Negative fair value

Interest rate derivatives

31/12/2012 161 563 125 286 563

31/12/2013 129 372 92 221 372

The table below presents a breakdown of the impact of Banking activities hedging transactions on income:

(€ million)

2013 2012

Fair value hedges

Cash flow hedges

Hedging of net investments

in foreign currencies

Fair value hedges

Cash flow hedges

Hedging of net investments

in foreign currencies

Interest income

on hedging transactions 151 287

Interest expense

on hedging transactions (210) (437)

Net interest income (expense) on hedging transactions (59) (150)

Net change in the fair value

of hedged and hedging

instruments (12) 1

Inefficiency

Net change in fair value on hedging transactions (12) 1



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34.5 Reclassification of financial assets

In 2008, La Banque Postale chose the option provided by

the 13 October 2008 amendment to IAS 39 and IFRS 7 to

reclassify certain available-for-sale financial assets under

“loans and receivables”.

This amendment allows financial assets other than

derivatives and financial assets designated at fair value

through profit or loss to be reclassified outside the fair value

through profit or loss category in exceptional circumstances.

It also enables financial assets to be transferred from the

available-for-sale category to loans and receivables if they

meet the definition for those assets on the reclassification

date, and the entity intends and is able to hold them for the

foreseeable future, or to maturity.

The transfer of part of the securities in the available-

for-sale financial assets portfolio that no longer had the

expected liquidity to the loans and receivables category

enables the financial statements to provide a better view of

La Banque Postale’s allocation of resources.

The reclassifications were carried out at fair value on 1 July

2008.

There were no further reclassifications in 2013 and 2012.

Amounts reclassified

Amounts before tax(€ million)

31/12/2013 31/12/2012

Balance sheet

amountFair

value

Balance sheet

amountFair

value

Available-for-sale assets reclassified to the loans and receivables category 5 4 25 24

The maturity of these two assets ranges between 2028 and 2036.

Amounts recognised in income and in equity in respect of the reclassified assets


31/12/2013 31/12/2012

Income Equity Income Equity

Available-for-sale assets reclassified to the loans and receivables category - - - -

Interest and similar expenses on treasury and inter-bank transactions - - - -

Impairment - - - -

Unrealised gains and losses on available-for-sale assets - - - -

Amounts that would have been recognised in income and equity had these assets not been reclassified


31/12/2013 31/12/2012

Income Equity Income Equity

Available-for-sale assets reclassified to the loans and receivables category

Impairment

Unrealised gains and losses on available-for-sale assets (1) (1)




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34.6 Offsetting of financial instruments

The following disclosures present the information required by IFRS 7 on financial instruments that are offset on the balance

sheet, as well as on financial instruments that are not offset on the balance sheet, but are subject to an enforceable master

netting arrangement or a similar agreement.

Non-banking derivative instruments

2013(€ million)

Gross amount

Offset amount

on balance sheet

Net amount

on balance sheet

Amounts not offset on balance sheet

Net amounts

A B C=A-BDerivative

instruments DCollateral

cash E F=C-D-E

Derivative assets 419 419 52 365 1

Derivative liabilities 69 69 52 17 0

Derivative assets on cash management

funds

Derivative liabilities on cash management

funds 16 16 14 2

2012(€ million)

Gross amount

Offset amount

on balance sheet

Net amount

on balance sheet


Net amounts

A B C=A-BDerivative


cash E F=C-D-E

Derivative assets 549 549 52 486 11

Derivative liabilities 88 88 52 36 0

Derivative assets on cash management

funds 3 3 3 0 0

Derivative liabilities on cash management

funds 14 14 3 9 2

La Poste has put framework agreements in place with all of

its market counterparties in order to reduce its exposure if

its market counterparties default. These agreements result

in the losing counterparty paying a guarantee deposit to

the winning counterparty in cash, equivalent to the net

position of the derivatives. Margin calls occur weekly or

daily, according to the counterparties. These agreements

do not comply with the criteria in IAS 32 governing the offset

of derivative assets and liabilities on the balance sheet. They

do, however, fall within the scope of disclosures under the

IFRS 7 standard on offsetting.



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Banking financial instruments

2013(€ million)

Gross amount

Offset amount

on balance sheet

Net amount

on balance sheet


Off-balance sheet

securitiesNet

amounts

A B C=A-BFinancial


Cash D E F=C-D-E

Financial assets

Derivatives 349 349 145 147 57

Repos and securities loans 4,828 2,832 1,996 6 1,985 5

Other financial assets 2 2 1 1

Financial liabilities

Derivatives 463 463 145 229 89

Repos and securities loans 18,914 2,832 16,082 111 15,765 206

Other financial liabilities 1 1 1

2012(€ million)

Gross amount

Offset amount

on balance sheet

Net amount

on balance sheet


Off-balance sheet

securitiesNet

amounts

A B C=A-BFinancial


cash D E F=C-D-E

Financial assets

Derivatives 396 396 172 116 108

Repos and securities loans 2,226 1,686 540 399 140 0

Other financial assets

Financial liabilities

Derivatives 652 652 172 390 90

Repos and securities loans 19,509 1,687 17,823 399 4 17,068 351

Other financial liabilities




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NOTE 35 Related party transactions

35.1 Relations with the French government and public sector companies


35.3 Remuneration of administration and management bodies

35.1 Relations with the French government and public sector companies

Relations with the French government



telecommunications public service, La Poste has been

a public limited company overseen by the Minister for

Industry under the Minister for the Economy, Industry and

Employment, and subject to economic and financial control

by the French government, and to the control procedures

of the French Court of Auditors and the French Parliament.

A new business contract was signed on 1 July 2013 between

La Poste and the French government for the 2013-2017

period. This contract updates the respective commitments

of La Poste and the French government for the next five

years, in particular:

maintaining the public service missions that have been

entrusted to La Poste: Universal Postal Service, Press

transportation and delivery, Banking Accessibility and

Regional Planning, maintaining the cost compensation

principle for these three latter missions;

a reinforcement of quality of service commitment;

missions adapted to users' expectations and technological

advancements;

The introduction of citizen commitments to promote the

development of corporations and territories, act in favour

of disadvantaged people, develop a digital society and

engage in corporate social responsibility.

The French Postal Regulation Act of 20 May 2005 provided

ARCEP with the power to regulate pricing for the Universal

Postal Service on a multi-year basis, after reviewing

La Poste’s proposals. The Act also confirmed and clarified

La Poste’s regional development responsibilities.

In the case of the Group’s Banking activities, the French

government sets the commission rates on regulated

savings products, i.e. Livret A passbook savings accounts,

Sustainable Development savings accounts and Popular

Savings accounts. The change in these rates has a direct

impact on La Banque Postale’s Net Banking Income.

Relations with public sector companies

Le Groupe La Poste enters into transactions, under market

conditions, with public sector companies in the normal

course of its business.


Transactions performed between fully consolidated

Group companies are eliminated on consolidation and are

therefore not discussed in this Note.

Transactions with equity associates primarily relate to CNP Assurances, with which La Banque Postale has signed a

commercial partnership agreement, resulting in the payment of commissions. The impact on the Group’s financial statements

of transactions with CNP Assurances of transactions are summarised in the table below:

(€ million) 31/12/2013 31/12/2012

Income 516 538

Expenses

Accounts receivable 92 47

Liabilities 65 52

Transactions with other equity associates and joint ventures are not material.



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35.3 Remuneration of administration and management bodies

The remuneration of Le Groupe La Poste senior executives

amounted to €5.8 million in total for the year ended

31 December 2013 (€5.1 million in 2012). Senior executives

do not benefit from any specific post-employment benefits.

The Group’s main senior executives are the members of the

Board of Directors and of the Executive Committee.

NOTE 36 Off-balance sheet commitments and contingent liabilities

36.1 Lease commitments

36.2 Banking activities commitments

36.3 Other commitments given

36.4 Other commitments received

36.5 Other commitments

36.6 Contingent liabilities

36.1 Lease commitments

The minimum future payments for operating leases where the Group is the lessee broke down as follows:

(€ million) 31/12/2013 31/12/2012

Less than 1 year 520 495

1 to 5 years 915 878

Over 5 years 423 422

Total 1,858 1,795

Operating lease payments amounted to €668 million in 2013 (€623 million in 2012).




es,ernts 20

36.2 Banking activities commitments

The contractual value of commitments given and received as part of La Banque Postale’s business activities is as follows:

(€ million) 31/12/2013 31/12/2012

Financing and guarantee commitments and commitments on securities given

Financing commitments

to credit institutions 305 70

to customers 20,197 17,312

Guarantee commitments

to credit institutions 412 383

to customers (a) 3,278 2,771

Commitments on securities to be delivered 2,072

Financing and guarantee commitments and commitments on securities received

Financing commitments

from credit institutions (b) 3,316 2,038

from customers 970

Guarantee commitments

from credit institutions 29,516 25,727

from customers 8,543

Commitments on securities to be received 236 3

Other commitments given (b)(c) 5,021 1,677(a) Guarantee commitments on UCITS losses.

(b) Commitments given (€2,505 million) and received (€2,336 million) as part of the “3 G” guarantee management arrangement with the Banque de

France, which allows banks to jointly manage all collateral relating to their refinancing transactions with Banque de France.

(c) In 2013, this includes commitments of €2,370 million relating to home loans given in guarantees of bonds issued by La Banque Postale Home Loan

SFH, the housing financing company of the Group.

Commitments related to Crédit Logement

Le Groupe La Poste has undertaken to maintain Crédit

Logement’s basic equity, in proportion to its 6% interest,

so that Crédit Logement can meet its solvency ratio.

The Group has undertaken, where applicable, to

replenish Crédit Logement’s mutual guarantee fund,

which covers borrower default on the loans held on

Crédit Logement’s books. This commitment, which

corresponds to the proportion of loans distributed by

La Poste’s network, amounted to €412 million as at

31 December 2013.

36.3 Other commitments given

A. Guarantees and endorsements

Total guarantees and endorsements given amounted to


B. Vendor warranties

When Chronopost SA sold Taxicolis and Mat Courses to

Flash Europe International, it stood as guarantor for tax

and social security liabilities, as well as for any shortfalls

in the assets or liabilities provisioned in the financial

statements for the year ended 31 December 2007. This

warranty will expire once the relevant tax, customs and

social security risks have lapsed.



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C. Commitments relating to the acquisition of Seur

Under the shareholders’ agreement signed on 10 March

2008 with Seur franchisees who were shareholders in Seur

SA, GeoPost granted each shareholder an individual put

option with the following terms and conditions:

sale of all the shares in Seur S.A. to GeoPost. The Group

recorded the corresponding debt;

sale of the shares in the franchises owned;

the option exercisable over a period of 20 years as from

10 March 2008, subject to the acquisition of a franchise

by GeoPost subsequent to this agreement;

the purchase obligation guaranteed by GeoPost is

subject to an annual ceiling of €100 million.

These options have been in place since the acquisition of

the Teruel franchise by GeoPost in March 2009.

D. Commitment to acquire non-current assets

In 2011, La Poste made a commitment to Renault to order

10,000 electrical vehicles by 2015. As at 31 December 2013,

this commitment represented an amount of €129 million.

E. Other

On 8 March 2012, La Poste signed an agreement to promote

the employment of disabled people over the period between

2012 and 2014. The financial commitment relating to

disability as part of this agreement amounted to €38 million

as at the end of December 2013.

36.4 Other commitments received

A. Guarantees and endorsements

Total guarantees and endorsements received amounted to

€45 million as at 31 December 2013, including €37 million

for La Poste.

B. Credit facilities

La Poste has a five-year, €650 million revolving credit

facility expiring in October 2018, under the terms of

which it has received commitments from the nine banks

in the banking pool. This facility had not been used as at

31 December 2013.

In October 2013, BNPP granted a firm 5-year credit

facility to La Poste for an amount of €75 million. This

facility had not been used as at 31 December 2013.

C. Property sale commitments

La Poste has entered into property sale commitments that

are expected to be completed in 2014. As at 31 December

2013, the total amount of commitments received in this

respect amounted to €124 million.

D. Call options on securities

On 21 December 2000, Caisse d’Épargne Group granted

Le Groupe La Poste an unreserved irrevocable call option

on CNP Assurances shares and additional securities

representing 2% of the share capital of CNP Assurances.

E. Commitments relating to the acquisition of Seur

Pursuant to the acquisition of 10 Seur franchises in

2009 (Teruel, Cordoba, Albacete, Cartagena, Palencia,

Lugo, Segovia, Parcel Vallès, Orense and Badalona),

seller warranties were given for a period of two years

from the companies’ handover. This period extends to

five years for tax and social security liabilities. There is

no limit on the amount of guarantees provided. These

commitments include bank guarantees for all of the

franchises acquired from Seur S.A., except Badalona.

As at 31 December 2013, only the guarantees relating to

the tax and social security risks remained.

As part of the contribution of Guadalpack to GeoPost

Spain in July 2012, the contract included guarantees

given by the vendor for a period of 18 months as from

taking control or until the underlying risk lapses

(primarily in respect of tax risks).

For the acquisition of Transvaleria by GeoPost España

Parcel on 2 March 2012, the sellers made a deposit of

€80,000 as a liabilities guarantee, decreasing €20,000

each year. This guarantee will end on 2 March 2016.

As part of the acquisition of Transportes Urgentes

Guadalajara on 10 July 2013, guarantees were granted

by the sellers, in accordance with legal time frames

and obligations, for a duration of 52 months for tax and

social obligations and for a duration of 18 months for

other guarantees, starting from the signature date. The

sellers also made a deposit of €500,000 as a liabilities

guarantee, the amount of which decreases €100,000

each year. This guarantee will end on 10 July 2018.

Under the acquisition of Transcoba on 26 July 2013, the

contract provides for guarantees agreed to by the sellers,

in accordance with legal time frames and obligations, for

a duration of 52 months for tax and social obligations

and for a duration of 18 for other guarantees, starting

from the signature date. Additionally, the sellers made a

deposit of €600,000 as a liabilities guarantee, decreasing

€150,000 each year, which will end on 26 July 2017.




es,ernts 20

F. Commitments relating to the acquisition of Yurtiçi Kargo

As part of GeoPost’s acquisition of minority interests in

Yurtiçi Kargo in February 2007, the vendors granted GeoPost

unlimited warranties for two years from the acquisition

date. The length of these warranties may be adjusted in

specific circumstances, i.e.:

in the event of tax litigation, one year as from the tax

assessment notice;

in the event of litigation regarding the warranties

between Yurtiçi Kargo and the vendors, 10 years as from

the acquisition date.

G. Commitments relating to the acquisition of Pegasus

The agreement for the purchase of Pegasus shares by

Armadillo Holding GmbH, which was signed in 2008,

included guarantees given by ADL, the vendor, for two years

as from taking control or until the underlying risk lapses,

(primarily in respect of tax risks).

H. Commitments relating to the acquisition of DPD Croatia and DPD Slovenia

As part of GeoPost’s 2008 acquisition of shares in the DPD

Adriatic entities, warranties were given by the vendor.

These warranties run for two years as from the acquisition,

except with regard to the legal status and legal capacity of

the seller (five years) and in the event of a tax assessment

(until the statute of limitations lapses).

I. Commitments relating to the acquisition of Biocair

When IBC Inc. acquired Biocair in August 2012, guarantees

were granted by the vendors for a period that depends

on the litigation in question (seven years as from the

date of notification of tax litigation, and no later than

31 December 2013 for other litigation). The guarantee can

only be triggered if the total amount of the dispute exceeds

GBP100,000, and is capped at 75% of the amounts in

dispute.

J. Commitments relating to the acquisition of BPO (formerly Extelia)

As part of the acquisition of Extelia in 2008, the vendor

granted an unlimited warranty with respect to regulatory

compliance risks for a period of 10 years.

K. Commitments relating to the acquisition of Sogec

As part of the December 2010 acquisition of the Sogec

Group, the vendor granted the following warranties, which

were limited to a percentage of the €42 million enterprise

value as at the acquisition date: 15% in the first year, then

10%, 5% and 1.5%. This warranty runs until 28 February

2014 with respect to tax liabilities, until 28 February 2015

with respect to social security liabilities and expired on

12 June 2012 for all other liabilities.

L. Commitments relating to the acquisition of Media Prisme

As part of the acquisition of the Media Prisme Group in

March 2011, a price reduction clause covering potential

damages was granted by the vendor, for a maximum

amount that decreases every year: €2 million for the first

year, then €1.33 million, €660,000, and finally €330,000.

This cover runs for the entire duration of the statutory

period of limitations plus two months for tax and social

security liabilities and for three years for all other liabilities.

M. Commitments relating to the acquisition of Cabestan

As part of the acquisition of Cabestan in July 2012, a price

reduction clause covering potential damages was granted

by the vendor, for a maximum amount that decreases every

year: €1 million for the first year, then €667,000, and finally

€330,000. This cover runs for the entire duration of the

statutory period of limitations plus two months for tax and

social security liabilities and for three years for all other

liabilities.

N. Commitments relating to the acquisition of MixCommerce

As part of the acquisition of MixCommerce in October 2012,

a price reduction clause covering potential damages was

granted by the vendor, for a maximum amount of €800,000.

This cap only applies to the claims relating to the ownership

of shares by the vendors and the transferability of these

shares. The guarantee will remain in place until 30 June

2014.

O. Commitments relating to the acquisition of Adverline

As part of the acquisition of the Adverline Group in June

2012, a price reduction clause covering potential damages

was granted to the buyer by the vendor, for a maximum

amount of €1.5 million for general risk and for an amount

of €1 million for specific risks relating to employer and

employee contributions (free share allocations). This

clause runs for the entire duration of the statutory period



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20

of limitations plus one month for tax and social security

liabilities and for two years for all other liabilities.

P. Commitments relating to the acquisition of Orium

As part of the acquisition of Orium in August 2012, a

price reduction clause covering damages arising from an

inaccuracy, a breach or an omission in the representations

and guarantees given by the vendor, and to a decrease in

the asset or an increase in the liability was granted by the

vendor, based on the following mechanism:

1st year: 20% of the sale price (€8.9 million) and of any

potential earn-outs (ceiling 1);

2nd year: the higher of the following two amounts: 15% of

the sale price and of any potential earn-outs, or the total

amount of the claims made by the buyer in connection

with the price reduction clause that have not been finally

settled during the first year up to the limit of the ceiling

(ceiling 2);

3rd year: the higher of the following two amounts: 10% of



with the price reduction clause that have not been

definitively settled during the first two years up to the

limit of the ceilings 1 and 2 (ceiling 3);

4th year: the higher of the following two amounts: 5% of



with the price reduction clause that have not been finally

settled during the first three years up to the limit of the

ceilings 1, 2 and 3 (ceiling 4).

This cover runs for three years as from the acquisition date,

and for the length of the statutory limitation period plus

three months for tax and social security issues.

Q. Commitments relating to the acquisition of Morin Logistic

As part of the acquisition of Morin Logistic in December

2012, a price reduction clause covering damages arising

from an inaccuracy, a breach or an omission in the

representations and guarantees given by the vendor, and

to a decrease in the asset or an increase in the liability was

granted to the buyer by the vendor up until 31 December

2016, based on the following terms:

the claims made until 30 April 2014 will be capped at

€2.5 million for general risks;

claims after this date shall only apply to employee-

related or tax risks, and shall be capped at €1.5 million.

This guarantee was used in 2013 for a total amount of

€565,000.

R. Commitments relating to the Asendia joint-venture

As part of the foundation of Asendia, a joint-venture

with Swiss Post, the Group granted a price reduction

clause capped at €5 million (except for pensions, tax and

competition law risks, for which there is no limit on the

amount of guarantees provided). In return, Swiss Post

granted a similar price reduction clause to Le Groupe

La Poste.

These clauses run for a period of three to 10 years starting

in July 2012, depending on the nature of the risks covered.

S. Commitments relating to the acquisition of Worldnet Shipping Express

When the acquisition by GeoPost SA of Worldnet Shipping

Express took place on 13 June 2012, guarantees were given

by the sellers of up to GBP300,000 for a duration of six

years, on tax disputes.

T. Commitments relating to the acquisition of DTDC

At the time of the equity investment in DTDC on 4 July 2013,

guarantees were given by the sellers for a duration of one

year and for up to 5% of the purchase price, i.e. INR 79

million. These guarantees cover any dispute or violation that

took place prior to the purchase by GeoPost SA.

U. Commitments relating to the acquisition of Colizen

When Chronopost SA purchased Colizen securities on

27 February 2013, guarantees were given by the sellers

for inaccuracies or breaches in the tax or social security

information provided. The compensation will be effective

for damages greater than €40,000 and for up to €800,000

for any claim within two years following the transfer, then

€400,000 beyond two years.

36.5 Other commitments

A. Shareholders’ agreement regarding CNP Assurances

The French government, Caisse des Dépôts, Caisse

Nationale des Caisses d’Épargne et de Prévoyance (CNCE),

Le Groupe La Poste and Sopassure have entered into a

shareholders’ agreement regarding CNP Assurances.

The agreement, which was set to expire on 31 December

2008, was extended to 31 December 2015 as part of the

agreements entered into by the partners in June 2006. The

commercial agreements between CNP Assurances and

Caisses d’Épargne and La Banque Postale have also been

extended until the end of 2015.




es,ernts 20

Pursuant to the asset transfer agreement between La Poste

and La Banque Postale, La Poste’s rights and obligations

under this shareholders’ agreement were taken over by

La Banque Postale.

B. Commitments relating to the acquisition of a portion of the SAS Carte Bleue shares

As part of SF2’s acquisition of an interest in SAS Carte

Bleue, La Poste has undertaken to retain a majority interest

in its SF2 subsidiary.

In addition, SF2 has granted La Poste a call option over

all of the shares and related rights to the SAS Carte Bleue

share capital that La Poste could exercise should it become

a minority shareholder in SF2. In this event, the purchase

price of the SAS Carte Bleue shares shall be jointly agreed

upon between La Poste and SF2.

Pursuant to the asset transfer agreement between La Poste

and La Banque Postale, La Poste’s rights and obligations

under this shareholders’ agreement were taken over by

La Banque Postale.

C. Individual Training Rights (DIF or Droit individuel à la formation)

Rights earned and not used by Group staff in respect of

Individual Training Rights amounted to:

over 12.3 million hours for contract staff;

over 12.1 million hours for government employees.

36.6 Contingent liabilities

The Group is not aware of any material risks for which no

provision has been recorded in the consolidated financial

statements.

NOTE 37 Banking activities balance sheet

37.1 La Banque Postale sub-group balance sheet (in banking format)

37.2 Banking assets and liabilities by residual maturity

37.1 La Banque Postale sub-group balance sheet

ASSETS

(€ million) 31/12/2013 31/12/2012

Cash on hand and at central banks 1,570 2,726




Loans and receivables—Credit institutions 82,894 81,254

Customer loans and receivables 59,204 49,922

Revaluation adjustment on interest-rate hedged portfolios 130 293


Tax assets 138 138

Accruals and other assets 2,295 3,576

Investments in equity associates 2,522 2,327

Tangible and intangible assets, and investment properties 969 848

Net goodwill—Assets 36 36

Elimination of investments (3,419) (3,191)

Total 196,974 192,838



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LIABILITIES

(€ million) 31/12/2013 31/12/2012

Financial liabilities at fair value through profit or loss 118 111


Inter-bank and similar transactions: Liabilities to credit institutions 14,757 15,812

Customer transactions 166,583 160,393

Debt evidenced by a certificate 4,300 4,537

Revaluation adjustment on interest-rate hedged portfolios 9

Tax liabilities 34 22

Accruals and sundry liabilities 3,593 5,035

Underwriting reserves of insurance companies 817 674

Provisions 678 557

Subordinated debt 829 850

Non-controlling interests (20) (20)

Equity, Group share 4,147 3,783

Consolidated reserves and other 3,576 3,258

Net profit/(loss) Group share 571 525

Balance of intra-group transactions—Impact on income

Balance of intra-group transactions—Impact on the balance sheet 758 522

Total 196,974 192,838

37.2 Banking assets and liabilities by residual maturity

(€ million)Maturities of under 1 year

Maturities of over 1 year or indefinite Total

Assets by residual maturity

Cash and central bank deposits 1,570 - 1,570

Securities portfolio 10,329 40,306 50,635



Liabilities by residual maturity

Other financial liabilities 49 441 489


Liabilities to customers 157,568 9,015 166,583

Debt evidenced by a certificate 3,000 1,301 4,300




es,ernts 20

NOTE 38 Notes to the consolidated cash flow statement

38.1 Reconciliation between net profit/(loss) and cash flows from operating activities before the cost of net financial debt and tax

38.2 Depreciation, amortisation and impairment

38.3 Change in working capital requirement

38.4 Change in balance of banking sources and uses

38.5 Outflows for acquisitions of tangible and intangible assets

38.6 Proceeds from new borrowings

38.7 Redemption of borrowings

38.8 Other cash flows from financing activities

38.9 Change in net cash of Banking activities

38.1 Reconciliation between net profit/(loss) and cash flows from operating activities before the cost of net financial debt and tax


Consolidated net profit/(loss) 635 481

Share in profits of equity associates (215) (180)

Unrealised gains and losses on fair value adjustments (excluding Banking activities) 28 58

Gains and losses on disposal (including dilution) 13 (63)

Net changes in provisions 214 271

Depreciation, amortisation and impairment Note 38.2 1,002 993

Other non-cash income and expenses (9) (15)

Operating cash flow after the cost of net financial debt and tax 1,668 1,544

Cost of net financial debt (a) 167 164

Corporation tax (including deferred taxes) 127 231

Cash flows from operating activities before cost of net debt and taxes 1,962 1,939(a) Excluding change in unrealised gains and losses on fair value adjustments.

38.2 Depreciation, amortisation and impairment

(€ million) 2013 2012

Additions to and reversals of amortisation of operating profit/(loss) 1,006 978

Additions to and reversals of amortisation of financial profit/(loss) (4) (4)

Impairment of goodwill 19

Total 1,002 993



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38.3 Change in working capital requirement

(€ million) 2013 2012

Change in inventories and work-in-progress 70 (49)

Change in operating receivables (155) 45

Change in operating payables and other operating assets and liabilities 76 139

Total 12 136

38.4 Change in balance of banking sources and uses

(€ million) 2013 2012

Change in Banking activities securities portfolio 4,497 1,756

Change in Banking activities loans and receivables (6,770) (4,885)

Change in credit institution receivables (Banking activities) (1,440) (6,123)

Change in other Banking activities current financial assets 113 255

Change in liabilities to credit institutions (Banking activities) (3,238) 5,040

Change in customer transactions (Banking activities) 5,447 4,157

Change in other financial liabilities (Banking activities) (385) (383)

Change in accruals (Banking activities) (371) (99)

Total (2,149) (281)

38.5 Outflows for acquisitions of tangible and intangible assets

(€ million) 2013 2012

Acquisitions of intangible assets (239) (265)

Acquisitions of tangible assets (752) (811)

Change in payables to suppliers of non-current assets (6) 12

Total (997) (1,065)

38.6 Proceeds from new borrowings

(€ million) 2013 2012

Bonds 250 750

Borrowings from credit institutions 2 2

Commercial paper 150

Other borrowings and similar debt

Total 402 752




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38.7 Redemption of borrowings

(€ million) 2013 2012

Bonds (726)

Borrowings from credit institutions (14) (8)

La Poste savings bonds (2) (5)

Commercial paper (666)

Other borrowings and similar debt (1) (1)

Borrowings on finance leases (15) (18)

Total (759) (698)

38.8 Other cash flows from financing activities

(€ million) 2013 2012

Collection of deposits and guarantees received 1 116

Repayment of deposits and guarantees received (120) (6)

Other 22 (47)

Total (97) 63

38.9 Change in net cash of Banking activities


Cash and central bank deposits (assets) 2,726 2,644

Sight loans and receivables—credit institutions (assets) 252 92

Sight loans and receivables—credit institutions (liabilities) (77) (166)

Opening 2,901 2,570

Cash and central bank deposits (assets) 23.2 1,570 2,726

Sight loans and receivables—credit institutions (assets) 30.1 148 252

Sight loans and receivables—credit institutions (liabilities) 30.1 (110) (77)

Closing 1,608 2,901

Net decrease (increase) in cash and cash equivalent from Banking activities (1,293) 331

of which impact of changes in consolidation scope 287

Net decrease (increase) in cash and cash equivalent from Banking activities before impact of changes in consolidation scope (1,580) 331



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NOTE 39 Fees paid to the Statutory Auditors

Pursuant to Decree No.2008-1487 of 30 December 2008, the fees paid to the Statutory Auditors recognised by La Poste and

its consolidated companies in the income statement are set out below.

2013

(€ million excl. tax) KPMG % Mazars %

Statutory audit, certification, review of separate and consolidated financial statements

parent company 0.6 25% 0.7 18%

fully consolidated subsidiaries 1.7 70% 2.4 63%

2.3 95% 3.1 81%

Other due diligence and services relating directly to the Statutory Auditors’ assignment

parent company 0.1 2%


0.1 4% 0.4 10%

Other services provided to fully consolidated companies by the partnership 1% 0.4 9%

Total 2.5 100% 3.8 100%

2012

(€ million excl. tax) KPMG % Mazars %

Statutory audit, certification, review of separate and consolidated financial statements



2.0 91% 3.2 83%

Other due diligence and services relating directly to the Statutory Auditors’ assignment


fully consolidated subsidiaries

0.2 8% 0.3 8%

Other services provided to fully consolidated companies by the partnership 1% 0.4 10%

Total 2.2 100% 3.9 100%

NOTE 40 Post-balance sheet events

None.




es,ernts 20

NOTE 41 Scope of consolidation

Company Country

% of interest

% of control

Method of consolidation

2012 2013 2012 2013 2012 2013

Consolidating company

La Poste

44, boulevard de Vaugirard

75757 Paris Cedex 15

Parcels & Express segment

GeoPost France 100.00 100.00 100.00 100.00 FC FC

GeoPost SI France 100.00 100.00 100.00 100.00 FC FC

Sodexi France 25.00 35.00 25.00 35.00 EM EM

Télintrans France 100.00 100.00 100.00 100.00 FC FC

Pickup Services France 82.47 82.47 82.47 82.47 FC FC

La Navette Pickup France 100.00 100.00 FC

La Consigne France 100.00 100.00 FC

GeoPost Intercontinental sub-group

GeoPost Americas Inc United States 100.00 100.00 100.00 100.00 FC FC

Tigers limited United States 71.11 65.88 FC

Chronopost International Burkina Faso Burkina Faso 40.00 40.00 40.00 40.00 EM EM

Chronopost International Côte d'Ivoire Ivory Coast 50.00 50.00 50.00 50.00 FC FC

Chronopost International Niger Niger 50.00 50.00 50.00 50.00 FC FC

Chronopost International Algérie Algeria 100.00 100.00 100.00 100.00 FC FC

IBC Inc United States 70.00 70.00 70.00 70.00 FC FC

IBC Trinidad Trinidad & Tobago 61.60 61.60 88.00 88.00 FC FC

DPD Laser South Africa 75.00 75.00 75.00 75.00 FC FC

DPD Continental India India 60.00 100.00 60.00 100.00 PC FC

DTDC India 42.53 42.53 PC

Lenton Group Ltd Hong Kong 30.00 30.00 30.00 30.00 EM EM

Chronopost sub-group

Chronopost France 100.00 100.00 100.00 100.00 FC FC

Colizen France 40.00 40.00 EM

Chronopost International Cameroun Cameroon 100.00 100.00 100.00 100.00 FC FC

Chronopost International Portugal Portugal 100.00 100.00 100.00 100.00 FC FC

Maroc Chrono INTL Morocco 34.00 34.00 34.00 34.00 EM EM

Sci Intel immo France 100.00 100.00 100.00 100.00 FC FC

GeoPost Central Europe sub-group

GeoPost IMDH GmbH Germany 100.00 100.00 100.00 100.00 FC FC

GeoPost Immobilien (merger with DPD GeoPost

Gmbh) Germany 100.00 100.00 FC

GeoPost Service Germany 100.00 100.00 100.00 100.00 FC FC

FC: Full consolidation EM: Equity Method PC: Proportional consolidation NC: Non-consolidated company



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Company Country

% of interest

% of control


2012 2013 2012 2013 2012 2013

Chronopost International Deutschland Germany 100.00 100.00 100.00 100.00 FC FC

DPD GeoPost Gmbh Germany 100.00 100.00 100.00 100.00 FC FC

DPD Aschaffenburg Germany 84.04 84.04 84.04 84.04 FC FC

Iloxx AG Germany 100.00 100.00 100.00 100.00 FC FC

Versandtarif Gmbh (merger with Chronopost

International Deutschland) Germany 100.00 100.00 FC

B2C Russia holding Gmbh Germany 24.50 24.50 24.50 24.50 EM EM

Tiramizoo Gmbh Germany 20.29 20.29 EM

DPD Belgium NV Belgium 100.00 100.00 100.00 100.00 FC FC

DPD Luxembourg SA Luxembourg 100.00 100.00 100.00 100.00 FC FC

DPD Netherland BV Netherlands 100.00 100.00 100.00 100.00 FC FC

DPD Czech Republic Czech Republic 100.00 100.00 100.00 100.00 FC FC

DPD Ukraine Ukraine 25.50 25.50 25.50 25.50 PC PC

DPD Schweiz AG Switzerland 100.00 100.00 100.00 100.00 FC FC

DPD Betriebsgesellschaft Germany 84.04 84.04 100.00 100.00 FC FC

DPD Vertriebsgesellschaft Germany 84.04 84.04 100.00 100.00 FC FC

DPD Delicom Germany 84.04 84.04 100.00 100.00 FC FC

DPD Polska Poland 100.00 100.00 100.00 100.00 FC FC

DPD strefa paczki Poland 100.00 100.00 100.00 100.00 FC FC

DPD Slovakia Sro Slovakia 100.00 100.00 100.00 100.00 FC FC

GeoPost YK Servisi AS Turkey 51.00 51.00 51.00 51.00 FC FC

DPD Hungaria Hungary 100.00 100.00 100.00 100.00 FC FC

GTR logistic (merger with DPD Hungaria) Hungary 100.00 100.00 FC

DPD Croatia doo Croatia 100.00 100.00 100.00 100.00 FC FC

DPD Estonia Estonia 100.00 100.00 100.00 100.00 FC FC

DPD Latvija Latvia 100.00 100.00 100.00 100.00 FC FC

DPD Lithuania Lithuania 100.00 100.00 100.00 100.00 FC FC

DPD Belarus Belarus 50.00 50.00 50.00 50.00 PC PC

Armadillo Bizpak Russia 50.00 50.00 50.00 50.00 PC PC

Armadillo One (merger with Armadillo Bizpak) Russia 50.00 50.00 PC

B2C Russia 24.50 24.50 24.50 24.50 EM EM

Armadillo Holding Gmbh Germany 50.00 50.00 50.00 50.00 PC PC

GeoPost Bulgaria ood Bulgaria 50.51 50.51 100.00 100.00 FC FC

Air Cargo Poland Poland 100.00 100.00 100.00 100.00 FC FC

TD Express services SARL France 100.00 100.00 100.00 100.00 FC FC

DPD Austria Austria 25.57 25.57 25.57 25.57 EM EM

DPD RO SA Romania 50.99 50.99 99.98 99.98 FC FC

DPD SA (formerly DPD SRL) Romania 50.00 50.00 50.00 50.00 PC PC

DPD Kazakhstan Kazakhstan 50.00 50.00 50.00 50.00 PC PC

DPD Slovenien Slovenia 100.00 100.00 100.00 100.00 FC FC





es,ernts 20

Company Country

% of interest

% of control


2012 2013 2012 2013 2012 2013

Yurtiçi Kargo Servisi AS Turkey 25.00 25.00 25.00 25.00 EM EM

GeoPost Spain sub-group

GeoPost Espagne Spain 91.39 91.90 91.39 91.90 FC FC

Seur GeoPost Spain 91.39 91.90 100.00 100.00 FC FC

Menexpres Spain 91.39 91.90 100.00 100.00 FC FC

GeoPost Espana Parcel (merger with Seur

GeoPost) Spain 91.39 100.00 FC

Seur SA Spain 54.36 59.47 52.04 61.18 FC FC

Seur Internacional Spain 91.39 91.90 100.00 100.00 FC FC

Seur Espana Operaciones Spain 54.36 59.47 52.04 100.00 FC FC

Seur Gerencia de Riesgos Spain 54.36 59.47 52.04 100.00 FC FC

Seur Integracion Logistica Spain 54.36 59.47 52.04 100.00 FC FC

Correduria de Seguros Spain 54.36 59.47 52.04 100.00 FC FC

Integracion Logistica Valencia Spain 54.36 59.47 52.04 100.00 FC FC

Barcino Pack Spain 24.19 26.46 24.18 44.50 EM EM

Transjaen Spain 51.61 59.47 52.04 100.00 FC FC

Guadalpack SL (merger with Seur GeoPost) Spain 91.39 100.00 FC

Transp, Urgente Guadalajara SL Spain 91.90 100.00 FC

Transcoba SL Spain 91.90 100.00 FC

GeoPost UK sub-group

GeoPost Intermediate Holding United Kingdom 100.00 100.00 100.00 100.00 FC FC

GeoPost Uk Ltd United Kingdom 100.00 100.00 100.00 100.00 FC FC

UK Letter Limited United Kingdom 100.00 100.00 100.00 100.00 FC FC

DPD Uk Ltd United Kingdom 100.00 100.00 100.00 100.00 FC FC

Interlink Express Plc United Kingdom 100.00 100.00 100.00 100.00 FC FC

Interlink Express Parcels Ltd United Kingdom 100.00 100.00 100.00 100.00 FC FC

Castlegate United Kingdom 100.00 100.00 100.00 100.00 FC FC

DPD Ireland Ltd (formerly Interlink Ireland Ltd) Ireland 100.00 100.00 100.00 100.00 FC FC

GeoPost Ireland Limited Ireland 100.00 100.00 100.00 100.00 FC FC

GeoPost Holding Ltd United Kingdom 100.00 100.00 100.00 100.00 FC FC

Parceline Ltd United Kingdom 100.00 100.00 100.00 100.00 FC FC

DPD Limited United Kingdom 100.00 100.00 100.00 100.00 FC FC

Mail Plus Limited United Kingdom 100.00 100.00 100.00 100.00 FC FC

Worldnet Shipping Express ltd United Kingdom 20.00 20.00 20.00 20.00 PC PC

Biocair United Kingdom 70.01 70.00 100.00 100.00 FC FC

Exapaq sub-group

SCI EXALAB France 100.00 100.00 100.00 100.00 FC FC

SCI EXA Immo France 100.00 100.00 100.00 100.00 FC FC

SCI EXAMURS PARIS France 100.00 100.00 100.00 100.00 FC FC

Exapaq SAS France 100.00 100.00 100.00 100.00 FC FC




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20

Company Country

% of interest

% of control


2012 2013 2012 2013 2012 2013

Mail segment

Sofipost France 100.00 100.00 100.00 100.00 FC FC

Mix commerce France 100.00 100.00 100.00 100.00 FC FC

Docapost BPO IS France 65.00 65.00 65.00 65.00 FC FC

Gescomail France 65.00 65.00 100.00 100.00 FC FC

Somepost France 100.00 100.00 100.00 100.00 FC FC

Docapost Suisse Switzerland 74.13 74.13 FC

STP France 100.00 100.00 100.00 100.00 FC FC

SCI STP Immo France 100.00 100.00 100.00 100.00 FC FC

Sérès France 66.00 66.00 66.00 66.00 FC FC

Sérès Allemagne Germany 66.00 100.00 FC

Docapost BPO SAS France 100.00 100.00 100.00 100.00 FC FC

Docapost BPO on line France 100.00 100.00 100.00 100.00 FC FC

CNPT Docapost BPO France 66.00 66.00 66.00 66.00 FC FC

Sefas France 100.00 100.00 100.00 100.00 FC FC

Sefas Inc United States 100.00 100.00 100.00 100.00 FC FC

Sefas Ltd United Kingdom 100.00 100.00 100.00 100.00 FC FC

Sefas Espana Spain 100.00 100.00 FC

CER Docapost BPO sas France 50.98 50.98 50.98 50.98 FC FC

Sofadev Docapost BPO Morocco 50.98 50.98 100.00 100.00 FC FC

T2IS Docapost BPO Morocco 50.98 50.98 100.00 100.00 FC FC

Sérès Espagne Spain 66.00 66.00 100.00 100.00 FC FC

Asendia Switzerland 50.00 50.00 50.00 50.00 PC PC

Docapost DPS France 100.00 100.00 100.00 100.00 FC FC

Docapost CSP France 100.00 100.00 100.00 100.00 FC FC

Maileva France 100.00 100.00 100.00 100.00 FC FC

Certinomis France 100.00 100.00 100.00 100.00 FC FC

Mediapost sa France 100.00 100.00 100.00 100.00 FC FC

Mediaprisme sas France 81.68 81.68 81.68 81.68 FC FC

Matching sas France 81.67 81.67 81.67 81.67 FC FC

Media prisme SP Spain 81.68 81.68 100.00 100.00 FC FC

Media prisme UK United Kingdom 81.68 100.00 FC

Media prisme BE Belgium 81.68 81.68 100.00 100.00 FC FC

Cabestan France 100.00 100.00 100.00 100.00 FC FC

Orium France 100.00 100.00 100.00 100.00 FC FC

Orium Gmbh Germany 100.00 100.00 100.00 100.00 FC FC

Financière Adverline France 86.06 90.00 86.06 90.00 FC FC

Adverline France 85.20 89.41 98.87 99.22 FC FC

Société France 85.20 89.41 100.00 100.00 FC FC





es,ernts 20

Company Country

% of interest

% of control


2012 2013 2012 2013 2012 2013

KP Média France 85.20 89.41 100.00 100.00 FC FC

Maison France 85.20 89.41 100.00 100.00 FC FC

Oxeva France 59.66 62.61 70.03 70.03 FC FC

Vertical Mail France 85.20 89.41 100.00 100.00 FC FC

CKFD France 86.06 90.00 100.00 100.00 FC FC

Mediapost Publicité France 100.00 100.00 100.00 100.00 FC FC

SMP France 100.00 100.00 100.00 100.00 FC FC

SOGEC Marketing France 100.00 100.00 100.00 100.00 FC FC

SOGEC Datamark Services France 100.00 100.00 100.00 100.00 FC FC

SOGEC Informatique France 100.00 100.00 100.00 100.00 FC FC

SOGEFINAD France 100.00 100.00 100.00 100.00 FC FC

SOGEC Deutschland Germany 100.00 100.00 100.00 100.00 FC FC

SOGEC Gestion France 100.00 100.00 100.00 100.00 FC FC

Budget Box France 40.01 40.01 40.01 40.01 EM EM

Mediapost SGPS Portugal 51.00 100.00 51.00 100.00 FC FC

Mediapost Distribuiçao Postal Portugal 51.00 100.00 100.00 100.00 FC FC

Mediapost Galex Distribucion y Logistica Portugal 51.00 100.00 100.00 100.00 FC FC

Eurobussula LDA Portugal 51.00 100.00 100.00 100.00 FC FC

Celeris LDA Portugal 51.00 100.00 100.00 100.00 FC FC

Orbitroad LDA Portugal 51.00 100.00 100.00 100.00 FC FC

Xange Capital France 34.87 34.87 34.87 34.87 EM EM

Docapost Conseil France 100.00 100.00 100.00 100.00 FC FC

Orsid SAS France 100.00 100.00 100.00 100.00 FC FC

ViaPost (ex SF18) France 100.00 100.00 100.00 100.00 FC FC

Neolog France 100.00 100.00 100.00 100.00 FC FC

Neopress France 100.00 100.00 100.00 100.00 FC FC

Média-Presse France 100.00 100.00 100.00 100.00 FC FC

Neopress Direct France 100.00 100.00 100.00 100.00 FC FC

Greenovia France 100.00 100.00 100.00 100.00 FC FC

Nouvelle Attitude SAS France 66.01 100.00 66.01 100.00 FC FC

NA Handena France 64.69 98.00 FC

Morin développement France 100.00 100.00 100.00 100.00 FC FC

Morin logistic France 100.00 100.00 FC

Morin GPM France 100.00 100.00 FC

Morin logistic sud France 100.00 100.00 FC

Neopress Routage France 66.00 66.00 66.00 66.00 FC FC

Médiapost holding France 100.00 100.00 100.00 100.00 FC FC

Doc@post France 100.00 100.00 100.00 100.00 FC FC

La Poste Global Mail France 100.00 100.00 100.00 100.00 FC FC




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20

Company Country

% of interest

% of control


2012 2013 2012 2013 2012 2013

Fret GV France 50.00 50.00 PC

Mobigreen France 100.00 100.00 100.00 100.00 FC FC

Mediapost Espagne Spain 51.00 51.00 51.00 51.00 FC FC

Mediapost Hit Mail Romania 60.02 60.02 60.02 60.02 FC FC

Creat Direct Romania 60.02 60.02 100.00 100.00 FC FC

Inbox Marketing Romania 59.06 59.06 98.40 98.40 FC FC

Interactions Marketing Romania 48.01 48.01 80.00 80.00 FC FC

Hit Mobile Marketing Romania 54.01 54.01 90.00 90.00 FC FC

Bretagne Routage France 100.00 100.00 100.00 100.00 FC FC

La Vosgienne industrielle de Mailing France 100.00 100.00 100.00 100.00 FC FC

Banking activities segment

La Banque Postale France 100.00 100.00 100.00 100.00 FC FC

La Banque Postale Gestion privée France 51.00 100.00 51.00 100.00 FC FC

Banque Privée Européenne France 99.99 99.99 FC

La Banque Postale Collectivités Locales France 65.00 65.00 FC

LBP Home Loan SFH France 100.00 100.00 FC

SCI Tertiaire Saint Romain France 100.00 100.00 100.00 100.00 FC FC

SCI CRSF DOM France 99.94 100.00 99.94 100.00 FC FC

SCI CRSF Metropole France 100.00 100.00 100.00 100.00 FC FC

SF2 France 100.00 100.00 100.00 100.00 FC FC

La Banque Postale Prévoyance France 50.00 50.00 50.00 50.00 PC PC

La Banque Postale Asset Management France 100.00 100.00 100.00 100.00 FC FC

La Banque Postale Structured Asset

Management France 100.00 100.00 100.00 100.00 FC FC

La Banque Postale Conseil en Assurances France 100.00 100.00 100.00 100.00 FC FC

Sopassure France 50.02 50.02 50.02 50.02 PC PC

CNP Assurances France 19.98 20.15 35.96 36.25 EM EM

La Banque Postale Financement France 65.00 65.00 65.00 65.00 FC FC

La Banque Postale Crédit aux entreprises France 100.00 100.00 100.00 100.00 FC FC

FCT Elise 2012 France 95.00 95.00 95.00 95.00 FC FC

La Banque Postale Assurances IARD France 65.00 65.00 65.00 65.00 FC FC

Tocqueville Finance Holding France 90.97 92.52 90.97 92.52 FC FC

Tocqueville Finance France 90.87 92.42 99.89 99.89 FC FC

OFC Finance France 100.00 100.00 100.00 100.00 FC FC

Easybourse France 100.00 100.00 100.00 100.00 FC FC

La Banque Postale Assurance Santé France 65.00 65.00 65.00 65.00 FC FC

Real estate segment

Poste Immo France 100.00 100.00 100.00 100.00 FC FC

Loca Poste S.A.S. France 100.00 100.00 100.00 100.00 FC FC





es,ernts 20

Company Country

% of interest

% of control


2012 2013 2012 2013 2012 2013

ImmoStoc SAS France 100.00 100.00 100.00 100.00 FC FC

SCI Tertiaire France 100.00 100.00 100.00 100.00 FC FC

SCI Logement France 100.00 100.00 100.00 100.00 FC FC

SCI Centres de Loisirs France 100.00 100.00 100.00 100.00 FC FC

SCI Activités Annexes France 100.00 100.00 100.00 100.00 FC FC

SCI DOM France 100.00 100.00 100.00 100.00 FC FC

SCI 44 Vaugirard France 100.00 100.00 100.00 100.00 FC FC

SCI Activités Courrier Local France 100.00 100.00 100.00 100.00 FC FC

SCI BP France 100.00 100.00 100.00 100.00 FC FC

SCI BP Mixte France 100.00 100.00 100.00 100.00 FC FC

SCI Activités Courrier Industriel France 100.00 100.00 100.00 100.00 FC FC

SCI Activités Courrier de Proximité France 100.00 100.00 100.00 100.00 FC FC

SCI Activités Colis France 100.00 100.00 100.00 100.00 FC FC

SCI Tertiaire Mixte France 100.00 100.00 100.00 100.00 FC FC

CIPOSTE SAS France 100.00 100.00 100.00 100.00 FC FC

SAS PI Développement France 100.00 100.00 100.00 100.00 FC FC

SAS PI Energies renouvelables France 100.00 100.00 100.00 100.00 FC FC

SCCV 56, rue CLER France 49.00 49.00 49.00 49.00 PC PC

TPF2 Sppicav France 20.02 20.02 20.02 20.02 EM EM

AKATEA TPF2 France 20.02 20.02 20.02 20.02 EM EM

Fréjorgues Energy SAS France 49.00 49.00 49.00 49.00 EM EM

Arkadéa SAS France 50.00 50.00 50.00 50.00 PC PC

SCI Bataille France 35.00 35.00 35.00 35.00 PC PC

SCI Villeneuve LB France 49.00 49.00 49.00 49.00 EM EM

SCI ARKADEA Fort-de-France France 49.00 49.00 EM

SCI ARKADEA Toulouse-Lardenne France 30.00 30.00 PC

SCI ARKADEA Lyon Croix-Rousse France 30.00 30.00 PC

PI Energy 2 France 20.00 20.00 EM

AKATEA 2—TPF2 SAS France 20.02 20.02 20.02 20.02 EM EM

SCI ARKADEA La Rochelle France 30.00 30.00 PC

SAS ARKASOLIA France 50.00 50.00 50.00 50.00 PC PC

PI Energy France 20.00 20.00 20.00 20.00 EM EM

La Poste Retail Brand segment

LP Télécom France 51.00 51.00 51.00 51.00 PC PC

Unallocated

Sofrepost France 99.99 99.99 99.99 99.99 FC FC

Véhiposte SAS France 100.00 100.00 100.00 100.00 FC FC

GIE Véhiposte France 100.00 100.00 100.00 100.00 FC FC




fi

20

20.1.2 Statutory Auditors’ report on the consolidated financial statements (Year ended 31 December 2013)

To the Shareholders,

In compliance with the assignment entrusted to us by the Ministerial Decree of 29 June 2009 and pursuant to Article 14 of

the Act of 12 January 2010 on La Poste state-owned company and the postal business, we hereby report to you, for the year

ended 31 December 2013, on:

the audit of the accompanying consolidated financial statements of La Poste;

the justification of our assessments;

the specific verification required by law.

These consolidated financial statements have been approved by the Board of Directors. Our role is to express an opinion on

these consolidated financial statements based on our audit.

1 Opinion on the consolidated financial statements

We conducted our audit in accordance with professional standards applicable in France; those standards require that we

plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of

material misstatement. An audit involves performing procedures, using sampling techniques or other methods of selection,

to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. An audit also includes

evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made, as well

as the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is

sufficient and appropriate to provide a basis for our audit opinion.

In our opinion, the consolidated financial statements give a true and fair view of the assets and liabilities and of the financial

position of the Group as at 31 December 2013 and of the results of its operations for the year then ended in accordance with

International Financial Reporting Standards as adopted by the European Union.

Without qualifying our opinion, we draw your attention to the matter set out in Notes 2.1.A and 29 to the consolidated financial

statements which set out the change in accounting policies from the application of the revised standard IAS 19, related to

employee benefits.

2 Justification of our assessments

In accordance with the requirements of article L.823-9 of the French Commercial Code (Code de commerce), we bring to

your attention the following matters:

Paragraphs L and M of Note 3 to the consolidated financial statements describe the measurement and impairment terms

of banking assets and liabilities, bonds and related financial derivatives, and guarantee commitments. As part of our

assessment of the accounting principles applied by your company, we verified the appropriateness of the aforementioned

accounting policies and of the disclosures in the notes to the financial statements.

Paragraph L1 of Note 3 to the consolidated financial statements sets out the principles and procedures applied in the

impairment of banking activities loans and receivables. We have reviewed impairment methods, credit risk management

procedures, the assessment of default risks and their coverage with individual and collective impairments.

Paragraph J of Note 3 and Note 15 of the notes to the consolidated financial statements set out the principles and

procedures applied for the purposes of testing the impairment of goodwill, other intangible assets and property, plant

and equipment. These are tested for impairment whenever there are indications of impairment losses, and at least once

a year for goodwill, in accordance with the procedures set out in Paragraph J of Note 3. We reviewed the procedures for

carrying out these impairment tests as well as the cash flow forecasts and assumptions used. We also verified that the

notes to the consolidated financial statements provide appropriate information.




es,uernts 20

Paragraph R of Note 3 and Note 29 in the notes to the consolidated financial statements set out the principles and

procedures applied to measure and record pension plans, other post-employment benefits, early retirement plans and

other long-term benefits awarded to employees. We have reviewed the methods used for calculating these obligations,

assessed the data used and the assumptions on which these assessments are based, and verified the appropriateness

of disclosures in the notes to the consolidated financial statements.

These assessments were made as part of our audit of the consolidated financial statements taken as a whole, and therefore

contributed to the opinion we formed which is expressed in the first part of this report.

3 Specific verification

As required by law we have also verified, in accordance with professional standards applicable in France, the information

presented in the group's management report.

We have no matters to report as to its fair presentation and its consistency with the consolidated financial statements.

Paris La Défense and Courbevoie, on the 21 February 2014

The Statutory Auditors

French original signed by

KPMG AuditA department of KPMG S.A.

Mazars

François Caubrière Isabelle Goalec Guy Isimat-Mirin Dominique Muller

Partner Partner Partner Partner



fi

20



Separate financial statements

es, ernts 20

20.2 Separate financial statements

20.2.1 Annual financial statements as at 31 December 2013 (Board of Directors’ meeting of 20 February 2014)

Values in the tables are generally stated in euro millions. Rounding may on occasion result in slight differences in totals or

changes.

Income statement

(€ million) Reference notes 31/12/2013 31/12/2012



La Poste Retail Brand revenue 1,138 1,080


Revenue Note 1 12,089 12,373

Other operating income 2,536 2,607


Purchases (492) (495)

Other external expenses Note 2 (3,805) (3,757)

Miscellaneous taxes and dues Note 3 (828) (837)

Personnel expenses Note 4 (9,600) (9,878)

Depreciation, impairment and provisions Note 5 (449) (382)

Operating expenses (15,174) (15,349)

Operating profit/(loss) (549) (369)

Net financial income (loss) Note 6 340 286

Underlying net profit (209) (83)

Non-recurring items Note 7 (21) (26)

Profit before tax (230) (109)

Income tax Note 8 314 175

Net profit 84 66


Financial information regarding the assets and liabilities, financial position and results of the issuer Separate financial statements

fiS20

Balance sheet

ASSETS

31/12/2013 31/12/2012

(€ million) Notes Gross

Depreciation, impairment

and provisions Net Net

Intangible assets Note 9 828 (584) 244 277

Land and buildings 328 (171) 157 160

Other P, P&E 3,604 (2,633) 971 1,059

Property, plant and equipment Note 10 3,932 (2,804) 1,128 1,219

Financial assets Note 11 10,450 (26) 10,424 9,566

Fixed assets 15,210 (3,414) 11,796 11,062

Inventory and work in progress Note 12 118 (4) 114 127

Trade receivables 1,466 (30) 1,436 1,394

Other accounts receivable 613 - 613 290

Operating receivables Note 13 2,079 (30) 2,049 1,684

Other debtors Note 15 37 (28) 9 13

Accrual accounts Note 16 181 - 181 185

Marketable securities and cash Note 17 3,558 - 3,558 4,364

Current assets 5,973 (62) 5,911 6,373

Grand total 21,183 (3,476) 17,707 17,435




es, ernts 20

Balance sheet

LIABILITIES AND SHAREHOLDERS' EQUITY

(€ million) Reference notes 31/12/2013 31/12/2012

Share capital 3,800 3,400

Share premium account 900 700

Reserves 481 478

Retained earnings (losses) 193 302

Net profit for the year 84 66

Shareholders' equity Note 19 5,458 4,946

Regulated provisions Note 20 111 106

Provisions for contingencies and charges Note 20 1,703 1,673

Bonds 5,951 6,431

Miscellaneous loans and borrowings 626 602

Bank accounts and bills of exchange payable 37 30

Financial debt Note 21 6,614 7,063

Trade and other accounts payable 1,132 1,143

Tax and employee-related payables 1,240 1,289

Other operating payables 445 386

Operating payables Note 13 2,817 2,818

Miscellaneous creditors Note 15 727 588

Accrual accounts Note 16 277 241

Payables 10,435 10,710

Grand total 17,707 17,435



fiS20

Statement of cash flows

(€ million) Notes 31/12/2013 31/12/2012

Net profit / (loss) 84 66

Elimination of non-cash and non-operating items

Gains and losses on asset sales/disposals 13 8

Net changes in provisions Note 26 35 21

Change in CICE provision Note 26 (36)

Depreciation, amortisation and impairment Note 26 381 337

Other non-cash income and expenses 3 2

Cash flow before cost of debt and tax 480 434

Cost of debt 41 41

Tax (314) (175)

Cash flow after cost of debt and tax 207 300

Change in working capital Note 27 94 310

CICE tax credit received in the year (234)

Change in cash balances at post offices 108 (88)

Taxes paid 242 179

Cash flows from investing activities 417 701

Purchase of intangible and tangible assets Note 28 (283) (315)

Purchase of financial assets (1,066) (425)

Inflows from sale of intangible assets and P, P&E Note 29 3 28

Inflows from sale of financial assets Note 29 188 457

Deconsolidation of subsidiaries, less any disposals of cash - 1

Cash flows used in investing activities (1,158) (254)

Capital increase 600 1,050

Dividends paid (171) (145)

Interests paid (44) (43)

Issuance of debt Note 30 400 750

Repayments of borrowings Note 31 (728) (670)

Other cash flows from financing activities (103) 73

Cash flows from financing activities (46) 1,015

Change in cash and cash equivalents (787) 1,462

Opening cash and cash equivalents (a) 3,262 1,800

Closing cash and cash equivalents (a) Note 32 2,475 3,262

(a) Excluding cash receipts of post offices for which the change appears under "Cash flows from operating activities".




es, ernts 20

La Poste general information

Legal status of La Poste

La Poste is a public limited company governed by legal

and regulatory provisions applicable to public limited

companies, including the French Commercial Code in the

absence of any special provisions such as French Act No.83-

675 dated 26 July 1983 relating to the democratization of the

public sector and Act No.90-568 dated 2 July 1990 relating

to organization of the mail and telecommunications public

service.

The Company operates under a public service mission

and general interest role and conducts other activities in

accordance with aforementioned French Act dated 2 July

1990 and legislation governing each of its Business Lines.

The public service mission and general interest role

includes:

a Universal Postal Service;

contribution, through its network of public outlets, to



banking accessibility under the terms set out in Articles

L. 221-2 and L. 518-25-1 of the French Monetary and

Financial Code.

Following normal rules, the Company collects, sorts,

transports and delivers all kinds of mail, parcels and goods.

Highlights

1. La Poste capital increase €600 million

In accordance with the 6 April 2011 Extraordinary

General Meeting resolutions relating to the La Poste

capital increase, in April 2013 the French government

and the Caisse des Dépôts exercised the $350 million of

share warrants they held, which resulted in the issue of

100 million new shares at a price per share of €6, including

€2 share premium.

Following this transaction, La Poste's share capital amounts

to €3.8 billion while the "share premium" account stands

at €900 million.

2. Increase in La Banque Postale's

shareholders' equity

This transaction was carried out as follows:

Poste Immo sold 63,996,107 shares in SCI Tertiary SCI

Saint-Romain, which holds the La Banque Postale head

office, to La Poste for €117 million and its current account

receivable of €111 million, in return for a €228 million

capital reduction by cancellation of 228,000 shares.

La Poste sold the entire SCI Tertiaire Saint-Romain share

capital (amounting to 64,001,500 shares) to La Banque

Postale for €117 million, and its current account receivable

of €111 million. As consideration for this transaction,

La Banque Postale issued La Poste with 1,982,608 new

shares, with nominal value of €115 per share and

€227,999,920 in total, as well as paying La Poste a balancing

payment of €80.

La Banque Postale issued €800 million of low ranking

convertible bonds with unlimited duration, which were fully

taken up by La Poste.

3. Changes to Le Groupe La Poste bond

portfolio

The 2006 €726 million bond was repaid on 8 November

2013. On 14 November 2013 the €750 million bond portion

was increased by €250 million at a 2.75% interest rate and

maturing on 26 November 2024.

4. CICE (French tax credit for competitiveness

and employment) tax credit

Article 66 of Act No.2012-1510 dated 29 December 2012

introduced a tax credit for competitiveness and employment

("CICE"), as from 1 January 2013. This new law represents

the first step taken in conjunction with the French

National Growth Pact dated 6 November 2012 to boost

competitiveness and jobs.

This tax credit amounted to 4% in 2013 and 6% in 2014

applied to remunerations up to 2.5 times the French

minimum wage paid to employees during the calendar year.

CICE is accounted for as a deduction from personnel

expenses. CICE had no impact on 2013 Group cash flow

because it cannot be set off against corporate income tax

payables (in respect of 2013) until 2014.



fiS20

5. Public service contract




and signed by participating parties on 1 July 2013.

Post balance sheet events

There has been no event likely to have a material impact on

the La Poste financial statements since the balance sheet

date.

Accounting policies

I. Underlying accounting standards

The La Poste annual financial statements are drawn up

under the principles of prudence, consistency, the accruals

concept, materiality and on a going concern basis, pursuant

to the French 1999 General Chart of Accounts.

II. Accounting principles

A. Use of estimates

When preparing the financial statements, the Group is

required to make the best possible estimates and to

make assumptions that affect the values of assets and

liabilities in the balance sheet, the contingent assets and

liabilities disclosed in the notes to the consolidated financial

statements and the income and expenses in the income

statement. Actual amounts may subsequently differ from

these estimates and assumptions.

B. Revenue

Revenue arising from the sale of goods or services is

recognized when the risks and rewards of ownership are

transferred to the customer. Revenue is recognized in

proportion to deliveries of the related goods or services

("percentage-of-completion" accounting method), with the

exception of postage stamps and prepaid envelopes, for

which income is recorded when sold.

Consequently, the mail and parcels delivery time needs to

be taken into account when calculating revenues at the

balance sheet date.

C. Distinction between underlying earnings and non-recurring items

Only unusual and one-off income and expenses are re

posted to non-recurring items. La Poste has decided to

classify the following under non-recurring items:

sale/disposal of non-current assets;

impairment provisions in respect of long-term diminution

in value of non-current assets;

income and expense caused by force majeure (e.g. fire,

storms etc.).

D. Income tax

La Poste has opted for a tax consolidation regime in which

it is the parent company.

VAT taxation rules

The provisions of Article 261-4-11 of the French General

Tax Code provide a VAT exemption for services rendered

by the provider of the Universal Postal Service in France

falling within the scope of the Universal Postal Service as

defined by Article L. 1 of the French Postal and Electronic

Communications Code, as specified in Article L. 2 of the

same Code.

As the French provider responsible for the Universal Postal

Service, La Poste exempts all postal products falling within

the scope of the Universal Postal Service that it sells from

VAT. The postal products sold by La Poste and not falling

within the scope of the Universal Postal Service are subject

to VAT in line with ordinary legal provisions (application

of the normal VAT rate subject to the application of the

regional VAT rules on services).

CET (contribution économique territoriale—regional

economic contribution)

In 2013, Decree 2013-1288 dated 27 December 2013

established the direct tax bases allowance rates enjoyed

by La Poste for its regional development mission. The

allowance was set at 85% on the basis of the CFE (cotisation

foncière des entreprises—business property tax) payable as

part of the CET and at 80% for tax on corporate value added.

E. Intangible assets

CRC Regulation 2004-06 defines an intangible asset as an

identifiable non-monetary asset without physical substance,

i.e. an asset arising from legal or contractual rights, or from

separable rights.




es, ernts 20

Intangible assets primarily consist of software and

leasehold rights.

Software is amortized over a period of between one to five

years. Leasehold rights held by the real estate Department

have been amortized since 2010.

The rules for impairment of intangible assets are set out in

Section G below.

Research and development costs

Development costs are expensed as incurred, except for:

equipment costs, where construction is sufficiently

advanced to demonstrate certain usefulness for

La Poste.

These expenses are capitalized as intangible assets and

amortized over a five-year period as soon as they are

commissioned;

expenditure relating to internal software development

to the extent that:

- it is highly likely that the project will be technically

feasible,

- management has sufficient human and material

resources to produce the software,

- there is a clear intention to produce the software

and use it on a long-term basis for La Poste’s own

requirements or those of its customers.

These expenses are capitalized as intangible assets and

amortized over a three-year period as soon as they are

commissioned.

The amount of research and development costs recognized

as expenses for the year is provided in Note 9.

F. Property, plant and equipment

F.1. Breakdown of cost of non-current assets by

component

A component is a part of a non-current asset that has a

different useful life, or that generates economic benefits at

a rate that differs from that of the overall asset.

La Poste has identified the following components:

Real estate assets: Six components

Structural frame;

Roof;

Joinery and exterior work;

Large-scale equipment;

Small equipment and fixtures and fittings;

Land.


Sorting machines: three components (mechanical

parts, intelligence and peripherals). A fourth component

(feeders and measuring instruments) is identified for

parcel sorting machines;

Sorting-area equipment: two components (mechanical

parts and intelligence);

TGV railcars: three components (frame, servicing, and

interior fittings).

F.2. Depreciation periods

P, P&E is depreciated on a straight-line basis over the

useful life of the assets.

As part of the implementation of the accounting regulations

for assets, the useful lives of non-current assets were

reviewed in 2005, which primarily resulted in a lengthening

of the average depreciation periods. The changes mainly

involved:

real estate assets, especially the main structural frame

components;

the main mechanical component of sorting machines.

The depreciation periods applied are as follows:

Buildings

The useful life depends on the technical and/or architectural

category to which the building belongs (La Poste has

defined seven categories):

Structural frame: 20 to 80 years

Roof: 20 to 60 years

Joinery and external work: 20 to 40 years

Large-scale equipment: 15 to 20 years

Small equipment and fixtures and fittings: 5 to 10 years



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Sorting machines: 5 to 15 years

Sorting-area equipment: 5 to 8 years

Office and computer equipment: 3 to 5 years

Office furniture: 10 years

TGV railcars: 15 to 30 years

Given that Tax Instruction BOI 4A-13-05 retained the

option for an entity to depreciate non-current asset

components over their useful life, La Poste has recognized

an accelerated depreciation charge on the following assets:

the main structural frame component for buildings, in

order to set the useful life of this component at 40 years

for depreciation purposes;

the main mechanical component for sorting machines, in

order to set the useful life of this component at six years

and eight months for depreciation purposes.

F.3. Acquisition cost of a non-current asset

Only expenses giving rise to a controlled resource as

a result of past events from which La Poste expects to

generate future economic benefits are capitalized.

In accordance with the option provided under CRC

Regulation 2004-06, acquisition costs that are directly

attributable to the acquisition of a non-current asset or to

bringing it into working order are not included in the cost

of the tangible asset.

Borrowing costs are not included in the acquisition cost of

non-current assets.

Investment subsidies received in respect of the acquisition

of a non-current asset are recorded as balance sheet

liabilities and recognized in income over the useful lives of

the underlying assets for which they were awarded.

G. Impairment of P, P&E and intangible assets

P, P&E and intangible assets are tested for impairment

whenever there is evidence of impairment.

Impairment tests consist of comparing the net book value

of each asset to its current value, which is the higher of the

realizable value and the value-in-use. Where the current

value of an asset or group of assets falls below its net book

value and the asset continues to be used, then its net book

value is reduced to this current value via an impairment

charge.

Realizable value represents the amount that could be

obtained by selling an asset at the balance-sheet date in

an arms’ length transaction, net of sale costs.

The value-in-use of an asset, or group of assets, is the

value of future economic benefits expected from their use

and/or sale.

Impairment charges are recognized for assets held for sale

where the market value falls below the net book value and

a decision has been taken to sell the asset.

H. Equity investments

Shares in La Poste’s subsidiaries are recognized at cost less

any potential provisions for impairment.

Such impairment reflects the difference between the

acquisition cost of the equity investments and their

book value at the balance-sheet date, which is usually

determined by using discounted future cash flows or the

potentially consolidated share in the Shareholders’ equity

of the relevant unit. Where a disposal decision has been

taken, the book value is determined with reference to the

realizable value, as defined in Section G above.

Dividends received are recorded as financial income in the

year in which the decision to distribute them is made.

I. Other non-current financial assets

These are primarily loans extended by La Poste to its

subsidiaries.

Other non-current financial assets also include loans

made in connection with social housing schemes, which

are recognized at their nominal value. Provisions are

recorded so as to take the maturities, repayment terms and

estimated bad debt risk of these loans into account.

J. Inventories and work-in-progress

La Poste applies the Weighted Average Unit Cost method

to measure the initial cost of inventory, except for finished

products, which are valued at production cost.

At the balance-sheet date and in accordance with CRC

Regulation 2004-06 regarding assets, which has been

applicable since 1 January 2005, inventories are valued at

the lower of their initial cost and current value. The current

value is the higher of the realizable value (market value)

or the value-in-use, which usually corresponds to the

discounted expected net cash flows.

Where the current value is the lower of the two, an

impairment charge must be recognized in order to bring

the initial cost in line with the current value.




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K. Operating receivables

K.1. Trade receivables

When they are initially recognized, trade receivables on

commercial activities are recorded at face value.

Impairment rules for trade receivables

Receivables due from customers who are subject to a

court-ordered settlement or compulsory liquidation are

written off in full, regardless of how long they have been

outstanding.

For other receivables, impairment is based on how long

they have been outstanding and the risk of non-recovery:

- outstanding for over one year: the value of the

receivable is fully written down;

- outstanding for between three months and one year:

The provisioning rate is calculated on the basis of

an average “loss rate”. The loss rate represents the

difference between receivables as at 1 January in a

given year and the amounts received during that year.

K.2. Other accounts receivable

When they are initially recognized, other accounts receivable

are recorded at face value. They are impaired depending on

the length of time they have been outstanding or the bad

debt risk.

L. Miscellaneous debtors and creditors and accruals accounts

Miscellaneous debtors and creditors and accruals accounts

primarily concern accounts in the process of being settled

at the balance-sheet date, including Le Groupe La Poste’s

intercompany transactions.

M. Marketable securities and cash

Marketable securities are valued at the lower of acquisition

cost and market value.

N. Foreign currency transactions

Payables, receivables, and cash and cash equivalents

denominated in foreign currencies are translated into euros

at the closing exchange rate. If the closing exchange rate

changes the historical value of payables and receivables,

the resulting differences are then recorded in the balance

sheet under unrealized foreign exchange gains or losses.

At La Poste, unrealized foreign exchange gains or losses are

mainly related to financing transactions (bonds and related

hedging transactions).

O. Provisions for contingencies and losses

Provisions are recorded where (i) at the balance sheet date

La Poste has a legal or implicit liability towards a third party

as a result of a past event, (ii) it is likely that an outflow

of resources representing future economic benefits will be

required to settle the liability, and (iii) a reliable estimate can

be made of the liability.

The provisions are assessed on the basis of La Poste’s

expectation of the expenditure required to settle the liability,

based on management data from the information system

and on assumptions selected by La Poste, supplemented,

where necessary, by experience of similar transactions

and, in some cases, by reports from independent experts

or supplier quotes. These various assumptions are reviewed

at each balance-sheet date.

P. Pension plan and end-of-career arrangements

P.1. Pension plan

State employees

The 2006 Amending Finance Act reformed pension funding

for La Poste’s state employees, backdated to 1 January

2006, as described in Note 24 to the financial statements.

Under the plan introduced in 2006, La Poste pays an

employer contribution, which discharges it of its liabilities.

As a result, no provision for the retirement of state

employees is recorded in the financial statements.

Contract staff

The pension plan for La Poste’s contract staff is a defined

contribution scheme, which is funded by contributions

to organizations that release the employer from any

subsequent liability, while the organization undertakes

to pay employees the amounts accruing to them.

Consequently, once the contributions are paid, no liabilities

or obligations are recognized in La Poste’s balance sheet.

Contributions paid to independent bodies are expensed in

the period concerned.



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P.2. Retirement benefits (contract staff)

These liabilities are covered by a provision in the balance

sheet.

The main assumptions used and the assessment of the

liability are set out in Note 24 to the financial statements.

P.3. End-of-career arrangements

La Poste records a provision for the costs of the end-of-

career arrangements made for its employees. The persons

included in the assessment of the provision are all those

who were enrolled in the scheme at the balance-sheet date.

The existing end-of-career arrangements are described in

Note 24 to the financial statements.

Q. Debt evidenced by a certificate (i.e. bonds and La Poste savings bonds)

Debt evidenced by a certificate is recognized at face value

under Debt in balance sheet liabilities. It is broken down

by type in the notes to the financial statements: bonds and

La Poste savings bonds.

Interest accrued not due on these securities is included in

a related payables account and taken to income.

Bond issue and redemption premiums are amortized on a

straight-line basis over the life (time) of the bonds, while

issuance expenses are deferred on a straight-line basis over

the same period.

Such issue and redemption premiums are recognized as

balance sheet assets under “Miscellaneous debtors” (see

Note 15).

R. Futures

Futures transactions are disclosed under off-balance sheet

commitments in Note 23.

Transactions entered into by La Poste (mainly interest-rate

swaps) with a view to debt issues fall under the hedging

transactions included in “uncommitted but highly probable,

clearly defined future transactions.” Gains and losses

are therefore deferred over the commitment period and

subsequently recognized over the life (time) of the debt

issued.

Balancing cash adjustments recognized when hedging

instruments are terminated are deferred over the remaining

term of the underlying liability.

Balancing cash adjustments recognized when instruments

classified as isolated open positions for accounting

purposes are terminated are recognized under net financial

income (loss).

Instruments used in transactions classified as an isolated

open position for accounting purposes are measured at

market value as at the balance-sheet date. Unrealized

losses are recognized via a provision for contingencies and

losses in net financial income (loss).

S. Share capital

Following the introduction of Decree 2010-191 dated

27 February 2010, La Poste became a public limited

company on 1 March 2010, with a share capital set at

€1 billion, divided into 500 million fully paid-up shares

with a par value of €2 each. This share capital is, by law,

wholly-owned by the French government or Government-

owned entities, except for any portion reserved for La Poste

employees.

Prior to that date, La Poste was an independent State-

owned company, without share capital as legally defined,

but with equity of €2,467 million, split between:

an initial capital contribution of €2,258 million (including

€1,039 million from the transfer of CNE’s business

activities in 2005);

an additional capital contribution of €209 million.

By virtue of La Poste’s change in status in 2010,

€1,467 million was allocated to various reserves, in addition

to the creation of €1 billion share capital. Lastly, following

the first General Meeting of La Poste, which was held on

12 May 2010, €1,513,000 was allocated to the legal reserve.

The planned capital increase adopted by the Board of

Directors on 10 February 2011 was approved at the General

Meeting of 6 April 2011 and resulted in:

a €1 billion capital increase via capitalization of reserves;

a first payment of €1.05 billion for the capital issued in

April 2011, including €467 million from the Government

and €583 million from Caisse des Dépôts;

the second payment of €1.05 billion was made in April

2012, including €467 million from the Government and

€583 million from Caisse des Dépôts.

La Poste received the last payment from the Government

(€267 million) and the Caisse des Dépôts (€333 million)

totalling €600 million, thereby increasing share capital to

€3,800 million divided into 950,000,000 shares, while the

"issue premium" account stands at €900 million.




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T. Off-balance sheet commitments

Commitment accounts are defined in the French General

Chart of Accounts separately from balance sheet and off-

balance sheet accounts, as rights and obligations that may

change the value or substance of a company’s assets, where

the effects of such rights and obligations are contingent on

the fulfilment of conditions or the completion of subsequent

transactions.

Commitments may only be listed under off-balance sheet

commitments if they pertain to transactions occurring after

the balance-sheet date (commitments made in the normal

course of business), or if they relate to contingent assets or

liabilities (guarantee commitments).

Contingent liabilities result:

- either from the existence of a liability that is not likely

or certain to cause an outflow of resources;

- or from a potential liability, which will only crystallize

if one or more uncertain future events not entirely

under the Company’s control occur.

A contingent asset is a potential asset resulting from

past events, the existence of which will only be confirmed

by the occurrence (or non-occurrence) of one or more

uncertain future events that are not entirely under the

Company’s control.

U. Cash flow statement

La Poste prepares a cash flow statement, which shows the

inflows and outflows of cash and cash equivalents classified

under operating, investing and financing activities.

Operating activities are the main revenue-generating

activities, and any activities other than those defined as

investing or financing activities.

Cash flows from operating activities are determined based

on the indirect method whereby the net profit/(loss) for

the year is adjusted for all non-cash transactions (i.e. net

charges to depreciation, amortization and provisions other

than those relating to current assets plus business-related

changes in working capital), deferrals or adjustments

relating to past or future operating cash inflows or outflows

and all income and expenses associated with cash flows

from investing or financing activities.

Investing activities correspond to the purchase or sale of

non-current assets and any other investments not included

in cash and cash equivalents.

La Poste’s cash flows from investing activities primarily

consist of the purchase or sale of the following items:

P, P&E and intangible assets, adjusted for non-

cash transactions (non-current asset payables and

receivables);

share of equity investments in other companies;

other financial assets (guarantees and deposits, and

receivables on equity investments, etc.).

Financing activities relate to transactions that affect the

value and breakdown of the Shareholders’ equity and debt.

Cash flows from financing activities include inflows from

new borrowings and outflows from redemptions of La Poste

savings bond and other debt.

The concept of cash and cash equivalents covers very liquid

short-term investments that can be readily converted into

known amounts of cash and are subject to a negligible risk

of a loss in value.

La Poste’s cash and cash equivalents include cash in

hand, cash at bank and marketable securities that do not

carry any material risk of loss in value and can be readily

converted into cash (particularly money-market UCITS),

and the portion of bank credit balances and related interest

accrued relating to overdrafts.

V. Consolidated financial statements

Consolidated financial statements are prepared for

Le Groupe La Poste, for which La Poste is the parent

company.



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Notes to the annual financial statements

Notes to the income statement 391Note 1 Revenue and other operating income 391Note 2 Other external expenses 394Note 3 Taxes and levies 395Note 4 Personnel expenses 395Note 5 Depreciation, amortization, provisions and impairment 396Note 6 Net financial income (loss) 397Note 7 Non-recurring items 397Note 8 Income tax 398

Notes to the balance sheet 399Note 9 Intangible assets 399Note 10 Property, plant and equipment 400Note 11 Non-current financial assets 401Note 12 Inventories and work-in-progress 403Note 13 Operating receivables and payables 403Note 14 Accrued income and expenses 404Note 15 Miscellaneous receivables and payables 405Note 16 Personnel expenses 406Note 17 Marketable securities and cash 407Note 18 Impairment of assets 408Note 19 Equity 409Note 20 Provisions for contingencies and charges 410Note 21 Financial debt 412Note 22 Information regarding transactions with related parties 414

Off-balance-sheet commitments 415Note 23 Financial derivatives 415Note 24 Employee benefit commitments 415Note 25 Other off-balance sheet commitments 419

Notes to the statement of cash flows 421Note 26 Charges and reversals in impairment, depreciation and provisions for contingencies and losses 421Note 27 Change in working capital 421Note 28 Outflows from purchase of non-current assets 421Note 29 Proceeds from disposals of non-current assets 422Note 30 Issuance of debt 422Note 31 Repayments of borrowings 422Note 32 Closing cash and cash equivalents 422Note 33 List of subsidiaries and equity investments 423




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Notes to the income statement

NOTE 1 Revenue and other operating income

1.1 Mail revenue

1.2 Parcels revenue

1.3 La Poste Retail Brand revenue

1.4 La Poste real estate revenue

1.5 Other operating income

La Poste generates revenues from its Mail (domestic and international) and Parcels business activities, as well as from the

activities of the La Poste Retail Brand and real estate segments. These revenues broke down as follows:

(€ million) 31/12/2013 31/12/2012





Total 12,089 12,373

As at 31 December 2013, revenues broken down by geographical regions were as follows:

France and domestic sales: 97.0%;

European Union: 2.0%;

Other: 1.0%.

The breakdown by geographical region was unchanged compared with 2012.

1.1 Mail revenue

The breakdown of Mail revenue by activity was as follows:

(€ million) 31/12/2013 31/12/2012

Correspondence 6,322 6,557

Advertising (direct marketing and A(a)) 1,431 1,538

Press 432 439

International 534 561

Other Mail services 632 641

Total 9,351 9,736(a) Advertising (direct marketing and AI).



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"Correspondence" revenue include:

€4,711 million in business correspondence (companies

and other legal entities) compared with €4,856 million

in 2012;

€1,611 million in single-item mail (individuals)

(compared with €1,701 million in 2012.

International Mail revenue broke down as follows:

(€ million) 31/12/2013 31/12/2012

Mail franked at post office counters 120 129

Terminal dues 162 179

Other International Mail services 252 253

Total 534 561

International revenue correspond to international business

correspondence and terminal fees.

Terminal fees are the remunerations received by La Poste for

delivering mail from abroad in France. They are determined at

the end of the financial year on the basis of estimates for the

weight and number of items distributed known at that date.

Other Mail income primarily includes revenue from

collecting and delivering letters to homes.

1.2 Parcels revenue

(€ million) 31/12/2013 31/12/2012

B to C (Business to Customers) 1,092 1,055

C to C (Customers to Customers) 449 442

Other 37 34

Total 1,578 1,531

1.3 La Poste Retail Brand revenue

(€ million) 31/12/2013 31/12/2012


Total 1,138 1,080

Pursuant to current service agreements, La Poste invoices

La Banque Postale for services relating to the financial

activities provided by the post offices, which primarily

include:

counter staff’s activities relating to “Financial Services”

transactions;

installation and operational management of ATMs.

These two services amounted to €1,074 million in 2013,

compared with €1,020 million in 2012.

The La Poste Retail Brand revenue also include

commissions received on third-party sales (excluding

mail and parcels) carried out at post office counters (e.g.

telephone card sales) and remunerations received for use of

its commercial network (Chronopost and LP Mobile).




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1.4 La Poste real estate revenue

(€ million) 31/12/2013 31/12/2012


Total 22 26

Real estate revenue primarily consist of the services provided by La Poste to its Poste Immo subsidiary.

1.5 Other operating income

(€ million) 31/12/2013 31/12/2012

Press revenue 248 262

Banking services 2,042 2,082

Capitalised production 61 63

Services performed with subsidiaries 71 69

Other operating income 114 131

Total 2,536 2,607

A tripartite agreement signed between the Government,

La Poste and newspaper publishers on 23 July 2008 sets out

the conditions for the postal transportation of newspapers

between 2009 and 2015, and provides for a financial

contribution from the Government, in order to help fund

this public service mission. The contribution was fixed for

the period between 2009 and 2011 at €242 million, and falls

gradually as from 2012.

The amount of the contribution was set at €217 million

in 2013, in addition to €31 million received from the

Government under the EGP(1) measures.

Banking activities services include the reimbursement of expenses and income invoiced to La Banque Postale in respect

of the Banking activities carried out by La Poste. They broke down as follows:

(€ million) 31/12/2013 31/12/2012

"Financial services" personnel expenses 1,004 1,007

La Poste Retail Brand banking advisory costs 1,038 1,075

Total 2,042 2,082

(1) EGP measures (Etats généraux de la presse): governmental help received as part of the scheme to freeze press prices.



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Services performed for subsidiaries were as follows:

(€ million) 31/12/2013 31/12/2012

Services charged to subsidiaries 26 25

Personnel cost recharges 2 2

Management fees charged to leading subsidiaries 43 42

of which La Banque Postale 26 25

Misc. income 1 -

Total 71 69

NOTE 2 Other external expenses

The “external services” item consists mainly of outsourced

services (€733 million) and of intermediaries’ expenses and

fees (€193 million).

"Rentals" primarily include property lease payments

(€722 million) and vehicle rentals (€128 million).

The “transportation” item includes national and

international mail transportation (€682 million) as well

as the costs of the sub-contracted transportation of funds

(€37 million).

Other external expenses broke down as follows:

(€ million) 31/12/2013 31/12/2012

External services 1,440 1,411

Transport 725 749

International mail delivery services 160 173

Rental expenses 914 866

Maintenance and repair costs 295 288

Telecommunications costs 72 72

Travel and assignments 124 122

Customer transaction costs 75 76

Total 3,805 3,757




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NOTE 3 Taxes and levies

Taxes, levies and similar payments broke down as follows:

(€ million) 31/12/2013 31/12/2012

Payroll taxes 519 522

Travel expenses 77 76

Local taxes 44 51

Voluntary apprenticeship tax payments 50 51

F.N.A.L. charges 30 30

Vocational training tax charge 48 44

Employer construction tax charge 30 31

Other taxes and duties 30 32

Total 828 837

In accordance with Article 13 of the 2013 Social Security

Funding Act, the 2013 payroll tax base was expanded

and aligned to the CSG payroll rules. It now includes

employee remuneration in respect of incentive bonuses,

corporate savings plans and employer contributions for

supplementary pension plans and supplementary casualty

insurance.

The “local taxes” item primarily consists of the Regional

Business Tax (€42 million). La Poste has benefited from

a reduction in this contribution since 2011, pursuant to

Postal Act 2010-123 of 10 February 2010. La Poste's 2013

contribution was set at 80% as published in Decree 2013-

1288 dated 27 December 2013.

Other taxes and levies primarily consisted of the Corporate

Social Solidarity Contribution (€22 million).

NOTE 4 Personnel expenses

Personnel expenses broke down as follows:

(€ million) 31/12/2013 31/12/2012

Salaries, bonuses and allowances 6,792 6,821

State employee pension contributions 1,187 1,172

Social contributions 1,546 1,528

Employee welfare costs 203 199

Other personnel costs 141 158

Employment competitiveness tax credit (269) -

Total 9,600 9,878



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The reduction in personnel expenses (down €8 million,

excluding CICE) largely arose from:

a €29 million decrease, in “Wages and salaries, bonuses

and allowances";

a €15 million increase in the contribution to the state

employees’ pension fund due to an increase in the

voluntary contribution rate from 37.10% in 2012 to

39.05% in 2013;

an €18 million increase in social security contributions,

primarily due to a proportionate increase in the number

of La Poste employees in relation to La Poste's total

headcount;

a €17 million decrease in other personnel expenses,

which was primarily due to a reduction in employee

incentive costs pursuant to the new incentive agreement

for the period between 2012 and 2014, which was signed

on 18 June 2012.

The amended 2012 Finance Act dated 29 December

2012 introduced a tax credit for competitiveness and

employment ("CICE") as from 1 January 2013. The CICE

tax credit amounted to 4% of paid remunerations under

2.5 times the French 2013 minimum wage. This rate will be

increased to 6% from 1 January 2014. The CICE tax credit

is accounted for as a deduction personnel expenses in the

Group accounts.

Consequently:

a €269 million tax credit was recorded as a reduction in

2013 personnel expenses, including personnel expenses

payable and provisions (accrued leave, end-of-career

mechanisms, etc.);

in view of their very long-term nature, no tax credit

is taken into account to calculate the employee post-

retirement benefits.

The breakdown of headcount was as follows (on the basis

of equivalent employees/year):

Number of employees 31/12/2013 31/12/2012

Total 218,941 221,656

NOTE 5 Depreciation, amortization, provisions and impairment

The breakdown of depreciation and amortization is

shown in Notes 9 and 10 to the balance sheet.

The breakdown of 2013 net reversals of provisions for the

impairment of assets is shown in Note 18.

The breakdown of 2013 additions to and reversals of

provisions for contingencies and losses is shown in

Note 20.

Depreciation, amortization, provisions and impairment broke down as follows:

(€ million) 31/12/2013 31/12/2012

Net depreciation/impairment 379 390

Deferred expense charge 1 1

Net asset impairment charges/reversals 5 3

Net charges/reversals on provisions for contingencies and charges 64 (12)

Total 449 382




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NOTE 6 Net financial income (loss)

Net financial income (loss) broke down as follows:

(€ million) 31/12/2013 31/12/2012

Net exchange gains (losses) - 1

Net gains (losses) on loans, borrowings and other fixed asset investments (62) (67)

Income from equity investments 348 286

Other financial income and expenses 54 66

Total 340 286

2013 financial items primarily consisted of:

interest expense on borrowings mainly on bonds issued

by La Poste;

other financial income and expenses mainly comprising

a €35 million provision reversal on financial instruments;

income from equity associates, which broke down as

follows:

(€ million) 31/12/2013 31/12/2012

La Banque Postale 258 186

GeoPost 77 72

Poste Immo 8 13

Sofipost 5 8

Véhiposte SAS - 7

Total 348 286

NOTE 7 Non-recurring items

Non-recurring items broke down as follows:

(€ million) 31/12/2013 31/12/2012

Net gains / (losses) from asset disposals (13) (8)

Net building impairment (1) 5

Net accelerated depreciation (5) (9)

Miscellaneous income and expenses (2) (14)

Total (21) (26)



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NOTE 8 Income tax

(€ million) 31/12/2013 31/12/2012

Tax group expense (19) (126)

Tax group benefit 341 301

Other (8) -

Total 314 175

Taxable income of the La Poste tax group for the year ended

31 December 2013 amounted to €216 million.

Tax consolidation income represents the total tax charges of

profit-making subsidiaries in the tax group, and amounted

to €341 million.

The amount of subsidiaries’ losses used by La Poste

under the tax consolidation group regime amounted to

€47 million, as at 31 December 2013.

Under the La Poste tax group agreement, subsidiaries

returning to profit retain the option of using loss carry-

forwards arising during the tax group period to calculate

the tax expense owed to the parent company. The use of

such tax losses by subsidiaries results in an expense for the

Group in the financial year in which such losses are used,

as long as the subsidiaries remain part of the tax group.

The tax group included 92 subsidiaries as at 31 December

2013 (compared with 88 as at 31 December 2012). The

French corporate income tax rate for 2013 was 38%.

(€ million) 31/12/2013 31/12/2012

Items that reduce the future tax liability

Timing differences 1,322 1,282

Of which:

Provisions for early retirement and retirement benefits 1,110 1,043

Non-deductible provisions 55 69

Swaps and similar 53 78

Other timing differences (including exchange gains) 104 92

Total 1,322 1,282

Items that increase the future tax liability

Poste Immo—Rollover relief on capital contribution 427 472

Other 111 106

Total 538 578




es, ernts 20

Notes to the balance sheet

NOTE 9 Intangible assets

9.1 Gross

9.2 Depreciation and impairment

Movements in intangible assets and the corresponding amortisation break down as follows:

9.1 Gross

(€ million)Balance at

31/12/2012 Acquisitions Disposals ReclassificationsBalance at

31/12/2013

Research and development costs 88 2 (7) - 83

Licenses, patents and similar rights 39 11 - - 50

Software 825 10 (295) 54 594

Leasehold rights 14 - - - 14

Business goodwill 3 - - - 3

Intangible assets in progress 81 69 (11) (54) 85

Total 1,050 92 (313) - 828

The “reclassifications" column corresponds to non-current assets commissioned during the year.

9.2 Amortisation and impairment


31/12/2012 Charges Reductions ReclassificationsBalance at

31/12/2013

Research and development costs 64 10 (7) - 67

Licenses, patents and similar rights 15 8 (1) - 22

Software 683 94 (294) - 483

Leasehold rights 11 1 - - 12

Total 773 113 (302) - 584

Research and development costs expensed during 2013 amounted to €15.4 million.



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NOTE 10 Property, plant and equipment

10.1 Gross


Movements in property, plant and equipment and the corresponding depreciation break down as follows:

10.1 Gross


31/12/2012 Acquisitions Disposals ReclassificationsBalance at

31/12/2013

Land 100 - (1) - 99

Buildings 225 8 (2) (2) 229

Land and buildings 325 8 (3) (2) 328

Plant and machinery 1,385 26 (52) 33 1,392

Vehicles 112 5 (3) 2 116

IT equipment 599 38 (55) 3 585

Other P, P&E 1,445 54 (42) 38 1,495

P,P&E in progress 41 48 - (74) 15

Other P, P&E 3,581 171 (151) 2 3,604

Total 3,906 179 (154) - 3,932

The “machinery, equipment and tooling” acquisitions

primarily relate to video-surveillance equipment

(+€12 million) and machinery (+€9 million).

"Other P, P&E" purchases primarily consist of furniture

(+€22 million).

The asset disposals primarily correspond to scrapped

sorting machines (€39 million) and IT equipment

(€55 million), which were substantially fully written down.




es, ernts 20


Balance at 31/12/2012 Charges

Disposals / Reversals

ReclassificationsBalance at

31/12/2013(€ million) Used not used

Buildings 157 8 (1) - - 163

Plant and machinery 985 103 (49) - (1) 1,038

Vehicles 87 9 (2) - - 94

IT equipment 505 53 (55) - - 503

Other P,P&E 945 93 (42) - 1 997

Other P,P&E 2,679 266 (149) - - 2,795

Land and building impairment 8 6 - (5) - 9

Total 2,687 272 (149) (5) - 2,804

NOTE 11 Non-current financial assets

This item breaks down as follows:

(€ million) 31/12/2012 Increase Reduction 31/12/2013

Equity investments 6,434 351 (346) 6,439

Impairment on equity investments (1) - - (1)

Net equity investments 6,433 351 (346) 6,438

Dividends receivable - - - -

Intercompany loans receivable 3,027 254 (184) 3,097

Other loans receivable 83 1 (4) 80

Impairment on loans (25) - - (25)

Net loans receivable 3,085 255 (188) 3,152

Other non-current financial assets 49 804 (19) 834

Impairment on other financial assets - - - -

Net other non-current financial assets 49 804 (19) 834

Total 9,566 1,410 (553) 10,424

La Poste’s equity investments are predominantly grouped

within the Sofipost, GeoPost, Poste Immo, La Banque

Postale and Véhiposte holding companies, which are wholly-

owned by La Poste.

The main changes recorded for La Poste’s investments

resulted from: a €4.8 million increase in Sofipost’s share

capital for cash on 14 July 2013 via an increase in the

nominal value of the shares.

In addition, the La Banque Postale share capital increased

by a €117 million addition of SCI Tertiaire Saint-Romain

shares and by a €111 million addition of current account

receivables owing from SCI Tertiaire Saint-Romain.



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In return, La Banque Postale issued 1,982,608 new shares,

fully taken up by La Poste, at a nominal value of €115 each.

Prior to this transaction, Poste Immo sold its entire

holding of SCI Tertiaire Saint-Romain shares and the

current account receivable to La Poste for €117 million and

€111 million respectively, in exchange for a €228 million

share capital reduction by cancellation of shares.

Impairment of equity investments relates only to

€1 million for Sofrepost.

Other non-current financial assets consist of collateralisation

guarantee deposits paid as part of bond hedging transactions,

which amounted to €20 million, and advances granted to

tobacco retailers for the sale of postage stamps amounting

to €9 million (unchanged since December 2010).

In addition, La Poste purchased all convertible subordinated

bonds with an unlimited term issued by La Banque Postale

on 13 December 2013 amounting to €800 million.

These bonds may be repaid under certain conditions.

Furthermore La Poste is obliged to convert the bonds into

La Banque Postale shares in the event of non-compliance

with certain regulatory ratios.

Accrued interest included under the subordinated bonds at

31 December 2013 amounted to €3.2 million.

The “loans” line consists mostly of loans granted by La Poste to its subsidiaries.

The main changes in intra-group loans recorded in 2013 break down as follows:

(€ million)Increase

(loans granted)Reduction

(loans repaid)

Poste Immo - -

GeoPost - 9

Sofipost 18 13

Véhiposte GIE 33 73

Véhiposte SAS 121 6

Change in accrued interest (a) 82 83

Total 254 184(a) AIND: Accrued interest not due.

The breakdown of loans and other non-current financial assets by maturity was as follows:

Maturity date

(€ million) 31/12/2013 < 1 year1 to

5 years > 5 years 31/12/2012

Equity investments 6,439 - - 6,439 6,434

Dividends receivable - - - - -

Gross loans receivable 3,176 534 1,683 959 3,108

Other non-current financial assets 834 23 11 800 50

Total 10,449 557 1,694 8,198 9,592

Impairment on loans relates solely to loans to construction entities (included in “Other loans”).




es, ernts 20

NOTE 12 Inventories and work-in-progress


31/12/2013

31/12/2012(€ million) Gross value Provisions Net value

Raw materials, supplies, traded goods

and other supplies 87 (4) 83 93

Finished goods and components 31 - 31 34

Total 118 (4) 114 127

NOTE 13 Operating receivables and payables

13.1 Operating receivables

13.2 Operating payables

13.1 Operating receivables

Operating receivables break down as follows:

Maturity date

31/12/2012(€ million) 31/12/2013 < 1 year1 to

5 years > 5 years

Trade receivables 998 998 - - 978

Impairment of trade receivables (30) (30) - - (26)

Accounts receivable for international mail 468 468 - - 442

Trade receivables 1,436 1,436 - - 1,394

Tax and employee-related receivables 482 206 276 - 165

Other operating receivables 131 131 - - 125

Other accounts receivable 613 337 276 - 290

Total 2,049 1,773 276 - 1,684

Tax and social security receivables primarily consist of a €285 million Government receivable in respect of a tax credit for

competitiveness and employment ("CICE") (see Highlights).



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13.2 Operating payables

Operating payables break down as follows:

Maturity date

(€ million) 31/12/2013 < 1 year1 to

5 years > 5 years 31/12/2012

Trade and other accounts payable 768 768 - - 787

Accounts payable for international mail 364 364 - - 356

Tax and employee-related payables 1,240 1,240 - - 1,289

Other operating payables 445 445 - - 386

Total 2,817 2,817 - - 2,818

Receivables and payables on international mail transactions are mostly incurred with foreign postal operators in connection

with terminal fees. Terminal fees are charges for services performed by post offices in order to process mail arriving from

other foreign operators.

NOTE 14 Accrued income and expenses

14.1 Assets

14.2 Equity and liabilities

14.1 Assets

31/12/2013 31/12/2012

(€ million) Ref.Accrued income

Accrued balance

Accrued income

Accrued balance

Intercompany loans receivable Note 11 83 3,097 83 3,027

Other non-current financial assets Note 11 3 834 49

Trade receivables Note 13 74 998 73 978

Other international mail receivables Note 13 425 468 403 442

Tax and employee-related receivables Note 13 118 482 75 165

Other operating receivables Note 13 86 131 91 125

Total 790 725




es, ernts 20


Ref.

31/12/2013 31/12/2012

(€ million)Accrued

expensesAccrued balance

Accrued expenses

Accrued balance

Financial debt Note 21 131 6,614 136 7,063

Trade and other accounts payable Note 13 552 768 543 787

Other international mail payables Note 13 344 364 333 356

Tax and employee-related payables Note 13 919 1,240 963 1,289

Other operating payables Note 13 257 445 226 386

Total 2,205 2,201

Interest accrued not due on financial debt is described in detail in Note 21, “Financial debt”.

Accrued tax and employee-related expenses primarily include the provision for paid leave (2013 expense of €366 million

compared with €398 million in 2012).

NOTE 15 Miscellaneous receivables and payables


(€ million)

31/12/2013 31/12/2012

AssetsEquity and

liabilities AssetsEquity and

liabilities

Current accounts - 435 - 353

Receivables / payables with La Banque Postale - 241 - 181

Other debtors / creditors 37 51 41 54

Total 37 727 41 588

The current account position presents La Poste’s position

in the context of the central corporate treasury system set

up with the Group’s subsidiaries.

Receivables and payables with La Banque Postale arose

due to:

customer transactions carried out in cash (primarily Post

Office Checking Accounts [CCP] (1) and National Savings

Accounts [CNE] (2)), transactions in foreign currencies,

and domestic and international money orders) in the

banks and operations to load and unload ATMs;

cash transactions with Banque de France aimed at

supplying and collecting cash from post offices;

the balance of the weekly advances paid by La Banque

Postale pending adjustment.

(1) CCP: Postal cheque accounts (comptes-chèques postaux).

(2) CNE: National savings bank (Caisse Nationale d’Épargne).



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The balance of other receivables consists mainly of:

€22 million in third-party receivables;

€6 million in deferred debt issuance expenses.

The other payables balance mostly consisted of:

repayable cash amounts received on behalf of third

parties: €40 million in 2013 (compared with €43 million

in 2012), which correspond to sales made by La Poste on

behalf of third parties (telecoms operators, Chronopost,

etc.);

the unpaid portion of the subscription to the XAnge2

fund, which amounted to €9 million.

NOTE 16 Accrual Accounts

16.1 Assets


16.1 Assets

(€ million) 31/12/2013 31/12/2012

Exchange losses (a) 113 107

Prepaid expenses 65 72

Other transactions 3 6

Total 181 185(a) Unrealised foreign exchange relates mainly to the bond debt; in effect, the bond debt is backed by currency swaps to fully cover the exchange rate risk.

Prepaid expenses include:

prepaid expenses on bond equalisation payments, which

amounted to €23 million (compared with €26 million as

at 31 December 2012);

prepaid operating expenses of €42 million (31 December

2012: €45 million), which primarily corresponded to

property rents invoiced in advance.


(€ million) 31/12/2013 31/12/2012

Exchange losses (a) 149 144

Deferred income 120 96

Other transactions 8 1

Total 277 241(a) Unrealised foreign exchange relates mainly to the bond debt; in effect, the bond debt is backed by currency swaps to fully cover the exchange rate risk.

Prepaid income consisted of:

prepaid income on bond equalisation payments, which

amounted to €30 million (compared with €35 million as

at 31 December 2012);

prepaid operating income, which amounted to

€90 mill ion (compared with €62 mill ion as at

31 December 2012).

Other transactions primarily correspond to various

transfers between entities.




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NOTE 17 Marketable securities and cash


(€ million) 31/12/2013 31/12/2012

Marketable securities 1,692 1,607

Impairment of marketable securities - -

Marketable securities 1,692 1,607

Cash 1,248 2,031

Petty cash 618 726

Total 3,558 4,364

Marketable securities are made up of short-term

investments, which are easily convertible into known

amounts of cash and where the risk of a loss in value is

negligible.

At 31 December 2013, marketable securities comprised:

- negotiable debt securities, which amounted to

€100 million (down €105 million compared with

31 December 2012);

- investment funds and/or mutual funds amounting

to €1,492 million (up €142 million compared with

31 December 2012);

- and bonds amounting to €100 million (up €49 million

compared with 31 December 2012).

Unrealised gains on marketable securities (UCITS only)

as at 31 December 2013 amounted to €11.7 million

(compared with €9.9 million as at 31 December 2012).

Cash at bank includes bank accounts, bills of exchange

receivable and cash investments.

The €550 million reduction in cash investments was

primarily due to:

several term investments amounting to €1,025 million

maturing;

taking out several term deposits during 2013 totalling

€475 million.

In addition, La Poste invested €150 million in interest-

bearing sight accounts at 31 December 2013, down €250

million compared with 31 December 2012.

Cash in hand primarily consisted of cash required for the

operation of post offices, which amounted to €612 million

as at 31 December 2013, compared with €720 million as at

31 December 2012.



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NOTE 18 Impairment of assets

Changes in asset impairment during 2013 were as follows:

Balance at 31/12/2012

Charges 2013

2013 reversals

ReclassificationsBalance at

31/12/2013(€ million) used not used

Intangible assets - - - - - -

Property, plant and equipment 8 6 - (5) - 9

Impairment on P, P&E and intangible assets 8 6 - (5) - 9

Equity investments 1 - - - - 1

Loans receivable 25 - - - - 25

Impairment on non-current financial assets 26 - - - - 26

Inventories and work-in-progress 3 4 (3) - - 4

Trade receivables 26 12 (4) (4) - 30

Other debtors 28 3 (2) (1) - 28

Impairment on current assets 57 19 (9) (5) - 62

Total 91 25 (9) (10) - 97

Impairment charges on property, plant and equipment are recorded in accordance with the principles defined in Section G

Accounting Policies.

Additions and reversals of impairment charges over the year broke down as follows:

Charges Reversals

(€ million)Operating

earningsFinancial

items

Non-recurring

itemsOperating

earningsFinancial

items

Non-recurring

items

Intangible assets and property, plant

and equipment - - 6 - - (5)

Equity investments - - - - - -

Loans receivable - - - - - -

Inventories and work-in-progress 4 - - (3) - -

Trade receivables 12 - - (8) - -

Other debtors 3 - - (3) - -

Total 19 - 6 (14) - (5)

Grand total 25 (19)




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NOTE 19 Equity

2013 changes in equity broke down as follows:

(€ million)Share

capitalShare premium

account ReservesRetained

earnings (losses)Net profit

for the yearTotal

equity

Balance at 31/12/2011 3,400 700 469 276 179 5,024

Appropriation of earnings 9 26 (35) -

Dividend payments (144) (144)

Net income (loss) for the period 66 66

Balance at 31/12/2012 3,400 700 478 302 66 4,946

Capital increase 400 200 600

Appropriation of earnings 3 (3) -

Dividend payments (109) (63) (171)

Net income (loss) for the period 84 84

Balance at 31/12/2013 3,800 900 481 193 84 5,458

As at 31 December 2013, the share capital amounted to

€3.8 billion, divided into 950 million ordinary shares with a

nominal value of €4 each. As at that date, 73.7% of share

capital was owned by the Government and 26.3% was owned

by Caisse des Dépôts.

Background

On 1 March 2010, La Poste became a public limited

company, with a share capital set at €1 billion, split into

500 million entirely paid-up shares with a nominal value of

€2 each. This share capital is, by law, wholly-owned by the

French Government or Government-owned entities, except

for any portion reserved for La Poste employees.

Prior to that date, La Poste was an independent State-

owned company, with no share capital as legally defined.

At its 10 February 2011 meeting, the Board of Directors

approved a planned €2.7 billion capital increase, to which

the French government was to subscribe €1.2 billion and

Caisse des Dépôts €1.5 billion.

The extraordinary general assembly of 6 April 2011 approved

the following resolutions:

share capital increase of €1 billion through an increase

in the nominal value of the existing shares from €2 to €4,

by capitalisation of reserves;

issue of 350 million new shares with equity warrants

(ABSA) at a price per share of €6, including €4 nominal

value and €2 issue premium, amounting to a total of

€2.1 billion including €1.4 billion share capital and

€700 million issue premium;

an equity warrant (BSA) is attached to each new

share. The BSAs issued will entitle their holders to

subscribe to 100 million new shares between 1 March

and 30 April 2013 for a total amount of €600 million,

including €400 million share capital and €200 million

issue premiums. The French government and Caisse

des Dépôts have made an irrevocable commitment to

exercise all their BSAs no later than the last day of the

exercise period (i.e. 30 April 2013);

inclusion of Caisse des Dépôts in the Group’s corporate

governance, with three representatives on the Board of

Directors.

A first tranche of €1.05 billion for the capital issued was

made in April 2011, and included €467 million from the

Government and €583 million from Caisse des Dépôts.

The second €1.05 billion tranche was paid in 2012

and included €467 million from the Government and

€583 million from Caisse des Dépôts.



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Position as at 31 December 2013

In accordance with the resolutions relating to La Poste's

capital increase taken at the 6 April 2011 Extraordinary

General Meeting, in April 2013 the Government and Caisse

des Dépôts exercised the 350 million equity warrants they

held, which resulted in the issue of 100 million new shares

at a price per share of €6 including €2 issue premium.

In 2013, La Poste paid its shareholders a dividend of €0.18

per share amounting to a total of €171 million broken down

as follows:

French government: €126 million;

CDC: €45 million.

NOTE 20 Provisions for contingencies and charges

The following changes in provisions for contingencies and losses were recorded during 2013:

Balance at 31/12/2012

Charges 2013

2013 reversals Balance at 31/12/2013(€ million) used not used

Early retirement plans 878 383 (322) - 939

Employee severance pay on retirement 165 6 - - 171

Long-term sick leave / paid holiday / local taxes 353 11 (16) - 348

Legal risks 52 22 - (35) 39

Refurbishment 33 1 - (4) 30

Employee-related claims 55 64 (19) (25) 75

Contingencies 12 7 (5) (3) 11

Other contingency and loss provisions 125 2 (35) (3) 90

Total 1,673 496 (397) (69) 1,703

Accelerated depreciation 106 17 (12) - 111

The main assumptions used to measure provisions for

early retirement plans for state employees and retirement

benefits for contract employees are described in Note 24.

The provisions for legal contingencies relate to claims

brought before administrative, civil or commercial courts.

The refurbishment programme provision is intended to

cover the losses incurred on the return of vehicles used

under a lease agreement with Véhiposte, which amounted to

€30 million (compared with €33 million as at 31 December

2012).

Provisions for employee-related disputes cover all

employee disputes (industrial tribunals, etc.) and the risk of

adjustments demanded by URSSAF (French social security

body).




es, ernts 20

The schedule for provisions for contingencies and losses as at 31 December 2013 was as follows:


31/12/2013Balance at





31/12/2018

Early retirement plans 939 324 271 182 114 48

Employee severance pay

on retirement 171 5 3 4 4 155

Long-term sick leave / paid holiday /

local taxes 348 172 88 75 11 2

Legal risks 39 33 6 - - -

Refurbishment 30 19 4 3 2 2

Employee-related claims 75 33 33 9 - -

Contingencies 11 2 3 2 1 3

Other contingency and loss

provisions 90 87 3 - - -

Total 1,703 675 411 275 132 210

Additions and reversals over the year broke down as follows:

Charges Reversals

(€ million)Operating

earningsFinancial

items

Non-recurring

itemsOperating

earningsFinancial

items

Non-recurring

items

Early retirement plans 383 - - (322) - -

Employee severance pay on retirement 6 - - - - -

Long-term sick leave / paid holiday /

local taxes 11 - - (16) - -

Legal risks 22 - - (35) - -

Refurbishment 1 - - (4) - -

Employee-related claims 64 - - (44) - -

Contingencies 7 - - (8) - -

Other contingency and loss provisions 1 1 - (2) (35) -

Total 495 1 - (431) (35) -

Grand total 496 (466)

Accelerated depreciation - - 17 - - (12)



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NOTE 21 Financial debt

Financial debt breaks down as follows:

(€ million) 31/12/2013 31/12/2012

Bonds excluding accrued interest 5,842 6,318

Accrued interest 109 113

Bonds 5,951 6,431

La Poste savings bonds ex accrued interest 63 66

Accrued interest 21 23


Deposits and guarantees received 390 513

Short-term borrowings 150 -

Bank accounts and bills of exchange payable 37 30

Total 6,614 7,063

The reduction in net financial debt is explained by a

€726 million redemption of 2006 bonds and a €250 million

addition to the bonds maturing on 26 November 2024) at a

coupon of 2.75%.

The October 14, 2013, La Poste issued three €50 million

notes with identical terms and conditions (maturing on

14 January 2014).

The debt maturity schedule (excluding bank accounts and bills of exchange payable) was as follows:

Maturity < 1 year

Maturity 1 to 5 years

Maturity > 5 years Total

(€ million) 31/12/2013 31/12/2012 31/12/2013 31/12/2012 31/12/2013 31/12/2012 31/12/2013 31/12/2012

Bonds excluding accrued interest 151 726 1,891 2,042 3,800 3,550 5,842 6,318

La Poste savings bonds ex

accrued interest 63 66 - - - - 63 66

Deposits and guarantees received 367 491 23 22 - - 390 513

Short-term borrowings ex accrued

interest 150 - - - - - 150 -

Accrued interest 130 136 - - - - 130 136

Total 862 1,419 1,914 2,064 3,800 3,550 6,576 7,033




es, ernts 20

Bonds

The change in bond debt, excluding accrued interest not due, was as follows:

(€ million) 31/12/2012 Increase ReductionTranslation

adjustments 31/12/2013

Bonds 6,318 250 726 5,842

As at 31 December 2013, the breakdown of the outstanding bond debt by interest-rate type was as follows:

Debt structure before interest rate swaps

Impact of interest rate swaps

Debt structure after interest rate swaps

(€ million) Balance % Balance Balance %

Borrowings at fixed rates 5,842 100% (2,464) 3,379 57.8%

Borrowings at variable

rates - - 2,464 2,464 42.2%

Total borrowings 5,842 100% - 5,842 100%

As at 31 December 2013, the breakdown of the outstanding bond debt by currency was as follows:


Impact of currency swaps


(€ million) Balance % Balance Balance %

Euro 5,400 92% 442 5,842 100%

Pound Sterling 291 5% (291) - 0%

Swiss Franc 151 3% (151) - 0%

Total borrowings 5,842 100% - 5,842 100%

Issue premium on bonds

Unamortised issue premiums stemming from the difference

between the issue price received and the redemption price

amounted to €0.1 million for all bonds (premiums paid) as

at 31 December 2013, compared with €4 million (premiums

paid) as at 31 December 2012.

La Poste savings bonds

This item corresponds to La Poste’s savings bonds liability.

The balance of this line item is decreasing because all the

La Poste savings bonds are reaching maturity, since the last

issue dates back to November 2001.

Deposits and guarantees received

This item principally consists of collateral security deposits

received in conjunction with bond hedging transactions

amounting to €367 million as at 31 December 2013 and


Short-term borrowings

Short-term borrowings relate to three treasury notes issued

in October 2013.



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NOTE 22 Information regarding transactions with related parties

Relations with the French government and public sector companies

Relations with the French government



telecommunications public service, La Poste has been

a public limited company overseen by the Minister for

productive turnaround responsible for SMEs under the

Minister for the Economy, Industry and Employment, and

subject to economic and financial control by the French

government, and the control procedures of the French Court

of Auditors and the French Parliament.




and signed by all participating parties on 1 July, 2013.

This agreement provides for:

maintaining a broad scope of public service missions


transportation and delivery, banking accessibility mission

and regional development mission. with the latter three

missions giving rise to compensation for costs incurred;

progress in strengthening quality of service;

missions adapted to users' expectat ions and

technological advances;

implementation of corporate citizenship commitments

in favour of the development of regions and companies,

the most disadvantaged persons, the development of

the digital society and corporate social responsibility

initiatives.

The French Postal Regulation Act of 20 May 2005 provided

Arcep (French electronic communications and postal

services regulator) with the power to regulate, on a multi-

year basis, the Universal Postal Service's rates, after

reviewing Le Groupe La Poste’s proposals. In addition, this

Act confirmed and clarified La Poste’s regional planning

mission.

Relations with public sector companies

Le Groupe La Poste enters into transactions with public

sector companies in the normal course of its business. They

are entered into under market conditions.

Relations with companies falling within the scope of consolidation

Transactions carried out between consolidated companies are carried out under market conditions.

The impact of these transactions on La Poste’s financial statements was as follows:

(€ million) 31/12/2013 31/12/2012

Non-current financial assets 10,317 9,442

Financial debt (8) (6)

Operating receivables 153 148

Operating payables (400) (362)

Other debtors - 21

Miscellaneous creditors (695) (545)

Cash and marketable securities 300 800

Operating expenses (1,469) (1,493)


Financial expenses (1) (9)

Financial income 472 452

Non-recurring expenses - (7)

Non-recurring income - 7

Related companies are deemed to be companies that are fully consolidated by Le Groupe La Poste.




es, ernts 20

Off-balance-sheet commitments

NOTE 23 Financial derivatives

31/12/2013 31/12/2012

(€ million) Notional value Fair value Notional value Fair value

Hedging transactions 2,733 391 2,576 523

Individual hedge open positions 2,520 (42) 2,546 (63)

Total 5,253 349 5,122 460

The financial instruments used by La Poste are shown

according to their hedging purpose.

Hedging swaps used for financial management purposes

relate to transactions aimed at controlling the cost of

La Poste’s debt.

In accordance with Group accounting principles, a provision

may be recorded on swaps in isolated open positions

relating to La Poste’s bonds, in order to cover unrealised

losses on financial instruments.

As at 31 December 2013, the provision amounted to

€40 million (compared with €75 million as at 31 December

2012).

Counterparty risk management

Market transactions are only carried out with top-tier banks

or financial institutions within the rating terms and the

authorization limits set for each counterparty by La Poste’s

Executive Management.

NOTE 24 Employee benefit commitments

24.1 Measurement methods

24.2 Main actuarial assumptions used to measure all employee benefit commitments

24.3 Pension plan for State employees attached to La Poste

24.4 Post-employment benefits granted to retired state employees

24.5 Retirement allowances for La Poste’s contract staff

24.6 Staff early retirement plans

24.7 Other long-term benefits

24.8 Individual Training Rights

All details about La Poste’s post-employment and long-term benefit commitments are given in this note.



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The following table summarises the accounting treatment of the various existing plans:

Balance sheet Off-balance sheet

2013 2012 2013 2012

Post-employment benefits granted to retired state employees X X

Retirement allowances for La Poste’s contract staff X X

Staff early retirement plans X X

Other long-term benefits (paid leave) X X

24.1 Measurement methods

Post-employment long-term benefits


defined benefit plans, together with the related costs


accordance with IAS 19 revised. Actuarial appraisals are

carried out every year.

The calculations are based on independent economic

actuarial assumptions for the discount rate, inflation

rate, and the rate of increases in pensions, etc., and on

assumptions specific to La Poste including employee

turnover, mortality rate, and the rate of increases in

salaries, etc.

24.2 Main actuarial assumptions used to measure all employee benefit commitments

Discount rate

The gross discount rates used for 2013, which were

determined in reference to top-tier corporate bonds, were

as follows:

Length of the commitments 5 years 20 years

Discount rate (Euro zone) 1.6% 3.2%

Inflation rate

The inflation rate used to measure employee benefit

commitments as at 31 December 2013 was 2% (the same

rate as at 31 December 2012).

Change in pensions and remunerations

Pension increases are linked to inflation. The long-

term trend selected for wages and salaries is based on

reasonable assumptions regarding inflation.

24.3 Pension plan for state employees attached to La Poste

Description of La Poste's liability

Article 150 of the amended 2006 Finance Act (LFR),

published in the Official Journal on 31 December 2006,

established the system for funding pensions of State

employees attached to La Poste. This plan changes the

previous funding plan so as to gradually put La Poste on an

equal footing with competitors.

The reform implemented in December 2006, and approved

by the European Commission in 2007, includes:

the implementation of an employer contribution aimed at

discharging all the employer’s pension liabilities as from

1 January 2006. This rate was gradually reduced down

to a so-called “competitively fair” rate in 2010, i.e. a level

that brings the mandatory salary-based social security

and tax charges at La Poste down to the level at other

companies in the postal and banking sectors. Over the

period 2006 to 2009, the law set an additional rate (16.3%

in 2006, 6.8% in 2007, 3.7% in 2008, and 1.3% in 2009)

which was added to the competitively fair rate;

the transfer of the task of centralising and distributing

the flow of retirement benefits to La Poste’s State

employees between the French government, La Poste

and any other relevant bodies to the EPNFRLP

(Établissement Public National de Financement des

Retraites de La Poste, the French government agency

for the funding of La Poste’s pensions), which was

established beforehand via the Decree of 19 December

2006. The EPNFRLP is responsible for negotiating

financial agreements provided for under Title II, Book II

and under Title II, Book IX of the French Social Security

Code;




es, ernts 20

payment of a one-time contribution of €2 billion to this

public agency by La Poste in 2006.

With the implementation of this plan, and given that the

employer contribution is made in full discharge of the

obligation, no provision is recorded in La Poste’s financial

statements in respect of state employees’ retirement

benefits.

24.4 Post-employment benefits granted to retired State employees

Other commitments for post-employment benefits include:

employee welfare services provided to retired state

employees, which primarily include home help and

holiday vouchers;

a loyalty bonus granted to retired state employees who

have their pension in a current account at La Banque

Postale;

granting assistance to voluntary organizations that

provide services for retired state employees.

Measurement of the commitment

The total value of post-employment benefit commitments

was estimated at €451 million as at 31 December 2013,

compared with €477 million as at 31 December 2012.

In accordance with the option provided under Article L. 123-13

of the French Commercial Code, no provisions have been

recorded in respect of these post-employment benefits.

24.5 Retirement allowances for La Poste’s contract staff

Description of existing schemes

Employees who retire from La Poste and are eligible for a

pension receive a retirement benefit, which is determined

on the basis of their length of service and final salary.

Amount recognized on the balance sheet

The provision recorded for retirement benefits payable

to La Poste’s contract staff (shown under “Provisions for

contingencies and losses” in balance sheet liabilities) was

€171 million as at 31 December 2013 (€165 million as at

31 December 2012).

24.6 Staff early retirement plans

Arrangements for part-time senior employees ("TPAS")

Under certain conditions, La Poste employees may benefit

from arrangements for part-time senior employees

("TPAS"). This scheme is offered to some people

(state employees and contract staff) who meet the age

requirements. The scheme was introduced in 2011, and its

terms are updated every year based on demographic trends,

the Company's financial health and pensions legislation.


The value of the provision for this scheme (appearing under

"Provisions for contingencies and losses" as a liability in the

balance sheet) was €576 million as at 31 December 2013

(€261 million at 31 December 2012).

This provision covers staff who joined the scheme prior to

the balance sheet date.

The main terms of this programme, which were established

in December 2013 in respect of 2014, are as follows:

Enrolment in the scheme is open to employees aged at

least 56 and a half (for state employees and office staff)

or 53 and a half (active State employees) for people who

work (or have worked for at least 10 years in the past) in

harsh conditions.

People who do not work in harsh conditions may join

the scheme once they reach 58 and a half (for state

employees and office staff) or 54 and a half (active state

employees).

This scheme is reserved for state employees and

employees who have worked for at least 10 years with

La Poste, and who will be eligible for full pension

benefits at the legal retirement age.

The length of participation in the plan is fixed upon

enrolment and is not subject to change. Participation is

for a minimum of one year and the maximum age at the

end of the scheme corresponds to the pension eligibility

age set by law.

During the term of the scheme, State employees work

part-time (70%) in an administrative position, with a

proportional reduction in their remuneration.

Work performed during the scheme is split between

operational and advisory activities.

As from 2014 all La Poste staff, who meet the above

conditions, may enrol in the scheme.

This new agreement has no impact on the La Poste

company financial statements.



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Furthermore, the following early retirement plans have

been available in the past, and continue to be the subject of

provisions for the persons still benefiting from them as at

31 December 2012. A minimum seniority of 15 years as a

Government employee is also required.

Part-Time Consulting (PTC)

Employees eligible for the PTC scheme enjoy reduced

working hours in exchange for a proportional reduction in

their remuneration.

This scheme is open to employees who have turned 56,

provided that it is followed up by part-time mentoring

and consulting (PTMC) or a new part-time mentoring and

consulting (NPTMC) scheme (see definitions below) by the

time they turn 58 and a half.

These reduced working hours may involve performing

training activities. It is up to the department manager to

decide on the nature of activities and how they are organised

(working conditions). The PTC scheme is an irreversible

arrangement, which must subsequently be followed by a

PTMC or NPTMC scheme.

Part-Time Mentoring and Consulting (PTMC)

Employees eligible for the PTMC scheme can leave

their operational position from the age of 57 and receive

partial remuneration in return for remaining available for

mentoring and/or consulting assignments.

New Part-Time Mentoring and Consulting (NPTMC)

Employees eligible for the NPTMC scheme can leave

their operational position from the age of 58 and a half

and receive partial remuneration in return for remaining

available for mentoring and/or consulting tasks.

Adjusted end-of-career arrangements (AECA)

Employees who benefit from AECA enjoy a period during

which they work half-time in return for proportionally lower

remuneration, followed by a work exemption up to the legal

retirement age. A bonus is paid on retirement. This scheme

is available to state employees aged 56 and 57.

Exemption from Work (EW)

This scheme, which was introduced by La Poste, is offered

to certain state employees in active roles who meet the age

criteria and are affected by regional agreements linked to

restructuring programmes.

The employees concerned, who have 15 years of active

service and are aged between 53 and a half and 55 years are

exempt from any work from the age of 53 and a half, subject

to their taking retirement as from age 55. When they retire

at age 55, the employees receive an End-of-Career Bonus.


The value of the provision for this scheme (appearing under

"Provisions for contingencies and losses" as a liability in the

balance sheet) was €363 million as at 31 December 2013

(€617 million at 31 December 2012).

24.7 Other long-term benefits

Description of existing schemes

These are paid leave schemes:

Accrued leave: Accrued leave is a scheme that allows

employees to accrue part of their unused earned leave

beyond the period for using earned paid leave.

Supplementary leave: state employees from the overseas

departments or who work in the overseas departments

benefit from paid supplementary leave, as well as from

paid travel expenses.

Long-term sick leave.


The provision for long-term sick leave (included within

"Provisions for contingencies and losses") was €348 million

as at 31 December 2013 (€353 million at 31 December

2012). These provisions are designed to cover the costs as

at the balance-sheet date of individual members of the paid

leave schemes described above.

24.8 Individual Training Rights (DIF or Droit individuel à la formation)

Rights earned and not used by Group staff in respect of

Individual Training Rights at 31 December 2013 amounted

to:

over 12.4 million hours for contract staff;

over 12.1 million hours for state employees.




es, ernts 20

NOTE 25 Other off-balance sheet commitments

25.1 Off-balance sheet commitments received

25.2 Off-balance sheet commitments given

25.1 Off-balance sheet commitments received

a) Off balance sheet commitments received in relation to the consolidated Group

Commitments received in connection with the Company’s share capital: Not applicable.

Commitments relating to the disposal of Business Lines: Not applicable.

b) Off balance sheet commitments received in relation to the Company’s financing

Unused credit facilities and other potential sources of cash:

On 20 October 2011, La Poste arranged a €650 million

five-year renewable credit facility for an amount of

€650 million, for which it received commitments from

nine banks in a banking pool. This facility had not been

used as at 31 December 2013, and the agreement was

extended by one year (to October 2018).

In 2008, La Poste was granted a tacitly renewable

€300 million overdraft facility by La Banque Postale.

€8 million of this facility had been drawn down as at

31 December 2013. On 31 December 2013, €292 million

remains from this overdraft facility.

In 2009, La Poste was granted a €200 million renewable

five-year credit facility. This facility had not been drawn

down as at 31 December 2013.

In 2013, La Poste was granted a further €75 million

renewable five-year credit facility by BNP. This facility

had not been drawn down as at 31 December 2013.

Financial instruments arranged:

There were no financial instruments held and exercisable

at a date after the balance-sheet date.

c) Off balance sheet commitments received as part of the Company's business operations

Guarantees received as part of La Poste’s everyday business:

Total guarantees, endorsements and sureties received

by La Poste as part of its everyday business amounted

to €38 million as at 31 December 2013.

Property sale commitments: not applicable.

The total value of propertyrental commitments received

by La Poste from its subsidiaries (Poste Immo and

La Banque Postale) amounted to €1 million as at

31 December 2013.

25.2 Off-balance sheet commitments given

a) Off balance sheet commitments given in relation to the consolidated Group

Unrecognised investment commitments: Not applicable.

Commitments relating to the disposal of Business Lines: Not applicable.

b) Off balance sheet commitments given in relation to the Company’s financing

Financial instruments arranged:

The financial instruments held and exercisable at a date

after the balance-sheet date amounted to €200 million.

c) Off balance sheet commitments given in relation to the Company's business operations

Future rental payment commitments:

La Poste’s internal commitments with Group companies

amounted to €1,399 million, including €1,032 million

for property rentals (Poste Immo) and €367 million for

vehicle leases (Véhiposte).



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La Poste has made payment commitments amounting to

€446 million in connection with non-Group leases.

La Poste’s miscellaneous commitments (photocopiers,

maintenance, upkeep and cleaning of buildings, security

services, and IT services, etc.) amounted to €54 million.

Obligation to employ disabled workers:

On 8 March 2012, La Poste signed an agreement to

promote the employment of disabled people over the

period 2012 to 2014. The financial commitment relating

to disability as part of this agreement amounted to


Finance leases: Not applicable.

Investment commitments:

As part of a grouped purchases initiative coordinated by

UGAP, the French Central Public Procurement Authority,

La Poste has undertaken to order 10,000 electric vehicles

from Renault by 2015. As at 31 December 2013, the

remaining commitment was for 5,437 vehicles for a total

amount of €129 million.

Orders to non-current assets suppliers as at

31 December 2013 amounted to €18 million.

Miscellaneous commitments:

Commitments to purchase carbon credits: La Poste has

undertaken to purchase 1,005 metric tonnes of carbon

equivalent based on a price of €5.86 per tonne.

Commitments given in relation to donations and corporate sponsorship:

La Poste has made a commitment amounting to

€3 million to transfer funds to La Fondation d’Entreprise

La Poste from 2014 to 2016.

La Poste’s other commitments relate to corporate

sponsorship initiatives for education (€1 million) and

sports sponsorship (€2 million).




es, ernts 20

Notes to the statement of cash flows

NOTE 26 Charges and reversals in impairment, depreciation and provisions for contingencies and losses

(€ million) 31/12/2013 31/12/2012

Charges/Reversals to operating profit/(loss) 444 377

Change in CICE provision (36)

Charges/Reversals to financial items (34) (37)

Charges/Reversals to non-recurring items 6 18

Total 380 358

NOTE 27 Change in working capital

(€ million) 31/12/2013 31/12/2012

Change in inventories and work-in-progress 13 6

Change in operating receivables (38) 95

Change in operating payables 22 77

Change in other operating assets and liabilities 97 132

Total 94 310

NOTE 28 Outflows from purchase of non-current assets

(€ million) 31/12/2013 31/12/2012

Purchase of intangible assets (93) (89)

Purchase of P, P&E (179) (220)

Change in accounts payable of non-current asset suppliers (11) (6)

Total (283) (315)



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NOTE 29 Proceeds from disposals of non-current assets

(€ million) 31/12/2013 31/12/2012

Disposal of intangible assets and P, P&E 3 28

Impairment on non-current financial assets 188 457

Disposal of investments - -

Total 191 485

NOTE 30 Issuance of debt

(€ million) 31/12/2013 31/12/2012

Bonds 250 750

Commercial paper 150 -

Other borrowings - -

Total 400 750

NOTE 31 Repayments of borrowings

(€ million) 31/12/2013 31/12/2012

Bonds (726) -

La Poste savings bonds (2) (4)

Other borrowings - (666)

Total (728) (670)

NOTE 32 Closing cash and cash equivalents

(€ million) 31/12/2013 31/12/2012

Marketable securities and cash 2,947 3,645

Credit bank accounts (37) (30)

Bank accounts of subsidiaries (435) (353)

Total 2,475 3,262




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NOTE 33 List of subsidiaries and equity investments

(€ million)Share

capital

Equity other than

share capital

% equity

interest

Book value of investment

Balance of loans and advances

granted by the parent

company

Pledges and

guarantees given

by the Company

2013 net revenue

2013 earnings

Dividends received

by La PosteGross Net

Details of companies in

which the gross value of the

investment exceeds 1% of

La Poste's share capital:

Subsidiaries (over 50% interest)

GeoPost2, rue Louis-Armand

75015 Paris 702 1,105 100 1,240 1,240 705 - 43 225 77

Sofipost111, bd Brune

75670 Paris Cedex 14 218 43 100 263 263 250 - 13 15 5

La Banque Postale115, rue de Sèvres

75275 Paris Cedex 06 3,414 1,154 100 3,419 3,419 803 - 5,135 311 258

Poste Immo35-39, bd Romain-Rolland

75014 Paris 1,471 100 100 1,493 1,493 1,654 - 114 86 8

Equity investments (10% to 50% interest)

Not applicable

General information

on companies in which

the gross value of the

investment does not exceed

1% of La Poste's share

capital:

Subsidiaries / Equity investments 3,004 (213) 24 23 488 - 861 66

Total 6,439 6,438 3,900 - 6,165 703 348



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20.2.2 Report of the Statutory Auditors on the annual financial statements (For the year ended 31 December 2013)


In compliance with the assignment entrusted to us by to us by the Ministerial Decree of 29 June 2009 and pursuant to Article

14 of the Act of 12 January 2010 on La Poste state-owned company and the postal business, we hereby present our report

on the year ended 31 December 2013 on:

The audit of the accompanying LA POSTE SA annual financial statements;

The justification of our assessments;

The specific verifications and information required by law.

These annual financial statements have been approved by the Board of Directors. Our role is to express an opinion on these

financial statements based on our audit.

I - Opinion on the annual financial statements

We conducted our audit in accordance with professional standards applicable in France. Those standards require that we

plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material

misstatement. An audit involves performing procedures, using sampling techniques or other methods of selection, to

obtain audit evidence about the amounts and disclosures in the financial statements. An audit also includes evaluating the

appropriateness of accounting policies used and the reasonableness of accounting estimates made, as well as the overall

presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate

to provide a basis for our audit opinion.

In our opinion, the annual financial statements give a true and fair view of the assets and liabilities and of the financial

position of the Company as at 31 December 2013 and of the results of its operations for the year then ended in accordance

with French accounting principles.

II - Justification of our assessments

In accordance with the requirements of article L. 823-9 of the French Commercial Code (« Code de commerce ») relating to

the justification of our assessments, we bring to your attention the following matters:

Each year, LA POSTE tests the value of its equity investments, which represent a net amount of € 6,438 million as of

31 December 2013, in accordance with the method described in paragraph H of the “accounting policies” in the notes to

the separate financial statements. In assessing these valuations, we did not uncover anything likely to call into question

the reasonableness of the assumptions made and the resulting calculations.

Paragraph G of the “accounting policies” in the notes to the separate financial statements sets out the principles and

procedures applied for the purposes of testing the impairment of intangible assets and property, plant and equipment.

These are tested for impairment whenever there are indications of impairment losses, in accordance with the procedures

set out in paragraph G of the notes. We reviewed the procedures for carrying out this impairment test and verified that the

notes to the separate financial statements contain appropriate disclosures.

Paragraph P of the “accounting policies” and Note 24 on “employee benefit obligations” to the separate financial

statements sets out the principles and procedures applied to measure and record retirement benefit plan, early retirement

plans and other long-term benefits awarded to employees. We have reviewed the methods for calculating these obligations,

assessed the data used and the assumptions on which these assessments are based, and verified the appropriateness

of disclosures in the notes to the annual financial statements.

These assessments were made as part of our audit of the annual financial statements taken as a whole, and therefore

contributed to the opinion we formed which is expressed in the first part of this report.




es, ernts 20

III. Specific verifications and disclosures

We have also performed, in accordance with professional standards applicable in France, the specific verifications required

by French law.

We have no matters to report as to the fair presentation and the consistency with the financial statements of the information

given in the management report of the Board of Directors and in the documents addressed to shareholders with respect to

the financial position and the annual financial statements.

Concerning the information given in accordance with the requirements of article L. 225-102-1 of the French Commercial

Code (“Code de commerce”) relating to remunerations and benefits received by the directors and any other commitments

made in their favour, we have verified its consistency with the annual financial statements, or with the underlying information

used to prepare these financial statements and, where applicable, with the information obtained by your company from

companies controlling your company or controlled by it. Based on this work, we attest the accuracy and fair presentation of

this information.

Paris La Défense and Courbevoie, on 21 February 2014



Mazars




Financial information regarding the assets and liabilities, financial position and results of the issuer Dividend distribution policy

fiD20

20.3 Dividend distribution policy

The amount of the dividend to the title of the exercise 2013

will be proposed to a next Board of directors and will be

approved by the General assembly before June 30, 2014.

For 2012, La Poste distributed a dividend representing a

total amount of €171 million.

For 2011, Le Groupe La Poste distributed a dividend

representing a total amount of €144.5 million.

20.4 Legal and arbitration proceedings

Le Groupe La Poste is involved in a certain number of

arbitration, legal or administrative during the normal course

of its business activities. A provision is only recorded for the

expenses that may result from these proceedings where

they are likely and their amount may be either quantified,

or estimated within a reasonable range. In the last case,

the amount of the provision corresponds to the Group

Management’s best estimate. The nature of these disputes

is varied, and they occur in the Group’s various subsidiaries.

The amount of the provisions for contingencies recorded

for all the disputes in which the Group is involved amounted

to €177 million at 31 December 2013 and 159 million at

December 2012; these provisions are shown on the balance

sheet items "Non-current provision for contingencies

and charges" and "Non-current provisions for risks and

charges".

The proceedings launched against French banks by the

French Competition Authority in 2010, which related to a

breach of the competition rules at the time of the switch

to the electronic processing of checks, resulted in a

€33 million fine for La Banque Postale. This decision of the

French Competition Authority was overturned by a Paris

Court of Appeal ruling on 23 February 2012, and therefore

granted La Banque Postale the right to recover the full

amount of the fine. The French Competition Authority is

currently appealing said proceedings in the French Court

of Cassation, which results in a risk that has led La Banque

Postale to record a provision of €16.4 million with regard to

this dispute for the 2013 financial year.

At this time, there are no other government, legal or

arbitration proceedings—including any proceedings that are

pending or threatened of which the Company is aware—

that could have a material effect on the Group’s financial

position or profitability, or have had such an effect over the

last 12 months.

20.5 Material change in the Company’s financial

or commercial position

None.


21

21.1 Share capital 428

21.2 Memorandum of association and articles of association 430

Additional information


Additional information Share capital21

21.1 Share capital

21.1.1 Amount of issued share capital as at 31 December 2013

As at 31 December 2013, the Company’s share capital broke down as follows:

Number of fully paid up shares issued: 950,000,000

Nominal value of shares: €4

Type of shares issued: ordinary shares

Issue premium of fully paid-up shares: €2

Value of share capital: €3,800,000,000, fully paid up

21.1.2 Shares not representing capital

Not applicable.

21.1.3 Shares held by the issuer or its subsidiaries

Not applicable.

21.1.4 Other securities giving access to share capital

Not applicable.

21.1.5 Terms of any acquisition rights and/or bonds attaching to subscribed but unpaid share capital

Not applicable.


Additional information Share capital 21

21.1.6 Information on the share capital of any Group company subject to an option or conditional or unconditional agreement

There are no options or conditional or unconditional agreements to buy or sell the shares of Le Groupe La Poste subsidiaries.

21.1.7 History of the share capital

Until its conversion to a public limited company, La Poste—

as an industrial/commercial public entity—had no share

capital. On the day of its conversion to a public limited

company on 1 March 2010, the share capital was set at one

billion euros (€1,000,000,000).

At 31 December 2009, the amount the French government

had paid in capital to the public sector company represented

€2,258,000,000; in the first half of 2010, €1,258,000,000 was

reclassified from “Share capital/initial equity” to “Other

reserves”.

A decision was made that the French government and

Caisse des Dépôts et Consignations (CDC) would contribute

€1.2 billion and €1.5 billion respectively to the capital

increase of €2.7 billion. A subscription agreement setting

out the terms of the transaction and the commitments of

each party was signed with the French government, Caisse

des Dépôts and La Poste on 11 February 2011.

The terms of La Poste’s share capital increase are as

follows:

i. Prior transaction: capital increase for La Poste through

the capitalisation of reserves and an increase in the

nominal value:

- At the time of conversion to a public limited company,

La Poste’s share capital was initially set at €1 billion,

divided into 500 million ordinary shares with a

nominal value of €2 each.

- The share capital was increased by the Extraordinary

General Meeting on 6 April 2011, which approved

the transaction through an increase in the nominal

value per share and the capitalisation of €1 billion

in reserves, bringing the share capital to €2 billion

divided into 500 million shares with a nominal value

of €4 each.

ii. Signature of a capital increase subscription agreement

between La Poste, Caisse des Dépôts et Consignations

and the French government.

This contract formalises the irrevocable commitment to

subscribe to up to €2.7 billion in shares.

iii. Capital increase in the form of shares with equity

warrants (ABSA).

The capital increase involved the issue of 350 million

equity warrants (ABSA) and the exercise of 350 million

shares with equity warrants (BSA) granting access to

100 million shares, i.e. a total of 450 million shares

issued at €6 per share (i.e. €4 nominal value and €2

issue premium), thereby allowing the €2.7 billion capital

increase to take place. The capital increase was carried

out in three stages:

- Issue of 350 million equity warrants: on 6 April 2011,

the French government and Caisse des Dépôts et

Consignations subscribed to 350 million shares with

equity warrants, taking 44% (i.e. 155,555,556 shares)

and 56% (i.e.194,444,444 shares) respectively.

The issue amount, €2.1 billion, was paid in two

instalments, including €1.050 billion on 6 April 2011.

- Called up share capital: on 8 March 2012, the

Company’s Board of Directors called in payment of the

remaining share capital not yet paid up amounting to

€1,050,000,000, which was subsequently paid by the

French government (€466,666,668) and by Caisse des

Dépôts (€583,333,332). At its meeting held on 11 May

2012, the Company’s Board of Directors confirmed

the payment of the remaining share capital, which

led to an amendment to Article 6 of the articles of

association “Share Capital”, which was carried out by

the Extraordinary General Meeting on 7 June 2012.

- Exercise of equity warrants: on 15 April 2013, the

350 million equity warrants attached to shares were

exercised, leading to the issue of 100 million new

shares subscribed for by the French government up

to 44% and by Caisse des Dépôts et Consignations

up to 56%. These shares have the same value as

those issued in 2011, i.e. €6 (including €2 in issue

premium). The total amount of this subscription


Additional information Memorandum of association and articles of association21

amounted to €600 million for a nominal amount

of €400 million, coupled with an issue premium of

€200 million, and was fully paid-up at the time of

subscription. The meeting of the Board of Directors

of 22 April 2013 paid the amount of issued shares

following the exercise of equity warrants, the capital

increase and the correlating revision of Article 6 of the

articles of association entitled, Share capital.

21.1.8 Pledging of Company securities

To the best of La Poste’s knowledge, none of the ordinary shares making up the share capital is included in any pledge.

21.2 Memorandum of association and articles of association

21.2.1 Corporate purpose

The Company fulfils a public service mission and general

interest role and conducts other business activities in

accordance with Act 90-568 of 2 July 1990, its articles of

association and legislation governing each of its areas of

business activity.

The public service mission and general interest role

includes:

the Universal Postal Service;

the contribution, through its network of public outlets, to



banking accessibility under the terms set out in Articles

L. 221-2 and L. 518-25-1 of the French Monetary and

Financial Code.

Following normal rules, the Company collects, sorts,

transports and delivers all kinds of mail, parcels and goods.

The Company is authorised—in France and abroad,

independently or through subsidiaries or associated

companies—to carry out any business activity that directly

or indirectly relates to its legally defined obligations and

business activities, as well as any other business activity

covered by its articles of association.

This includes any kind of involvement in any operations or

business activities relating to any of the aforementioned

objectives or likely to increase the value of the Company’s

assets through the creation of new enterprises, the

contribution, subscription or purchase of any kind of shares,

rights, interests or equity investments in any existing or

future company or enterprise, mergers, partnerships or

any other association, and more generally the execution

of any commercial, industrial, technical, financial, service,

real estate or securities transaction—on behalf of third

parties, on a proprietary basis or as part of a joint venture—

directly or directly, in whole or in part, relating to any of the

aforementioned objectives, any similar, complementary or

connected objectives, or any objectives likely to contribute

towards the Company’s business development.


Additional information Memorandum of association and articles of association 21

21.2.2 Management bodies

The Company is administered by a Board of Directors,

membership of which complies with the provisions of Act

83-675 of 26 July 1983.

However, by exception to Article 5 of this Act, the

Board of Directors comprises 21 members, with seven

representatives of each of the categories listed in

paragraphs 1, 2 and 3 of said Article. A representative

of municipalities and groups of municipalities, and a

representative of La Poste users are among the individuals

chosen for their specific skills.

Furthermore, by exception to Article 5 of the Act dated

26 July 1983 and the aforementioned provisions, and in

accordance with Article 10 of the Act of 2 July 1990, from

the date of Caisse des Dépôts et Consignations’ arrival, the

Board of Directors will be composed as follows:

for one third, by staff representatives elected under the

conditions set out in Chapter II of Title II of Act 83-675

of 26 July 1983;

for two thirds, by a representative of municipalities

and groups of municipalities, a representative of users

appointed by decree, and representatives appointed

by the shareholders’ General Meeting to ensure

representation that reflects their share of the share

capital and enables them to collectively hold the majority

of voting rights on the Board of Directors.

The term of office for Board of Directors members is five

years. The end of all Company Board members’ terms

of office coincides with those of the Board members

representing staff on the Board of Directors.

Staff representatives’ terms of office on the Board were

unaffected by La Poste’s conversion to a public limited

company, and run for a full five years, except in cases of

early termination as provided for by law.

By exception to the five-year period, the Company’s first

Board members’ term of office appointed by decree, and

that of any Board member elected at the General Meeting

as a replacement for a Board member appointed by decree

or vice versa, end on the same date as those of the Board

members representing staff on the Board of Directors.

Should a member of the Board of Directors leave his or her

position for any reason, a replacement will sit only for the

remainder of the term of office, until the entire Board of

Directors is renewed.

During their term of office, Board members who are not

appointed by the General Meeting provide their services free

of charge, with the possible exception of Board members

appointed in accordance with the third paragraph (2°) of

Article 5 of the Act of 26 July 1983. The General Meeting

determines the amount of any directors’ fees to be paid, if

appropriate, to the other Board members.

The Company reimburses any costs that Board members

may incur in the course of their term of office on production

of receipts.

Staff representatives are allowed to spend half of their

working week on Board matters.

The General Meeting may dismiss of any Board member

it appoints.

Should one or more seats of Board members elected by the

General Meeting fall vacant through death or resignation,

the Board of Directors may make temporary appointments

between two General Meetings. These appointments must

be ratified at the next Ordinary General Meeting. If this

ratification is not forthcoming, the decisions and actions

previously taken by the Board will still be valid.

The Chairman of the Company’s Board of Directors is

appointed from among the Board members by decree,

following a proposal by the Board members. His term

carrying out such duties may not exceed his term of office

as a Board member. These terms may be renewed under

the same conditions. They may also be terminated in

accordance with the aforementioned Article 10 of the Act

of 26 July 1983.

The Chairman of the Board of Directors also serves as

Chief Executive Officer of the Company. He has the title of

Chairman and Chief Executive Officer.

No person may be appointed Chairman of the Board of

Directors or Chief Executive Officer if aged 68 or more

on the date of the appointment. If the incumbent Board

of Directors Chairman or Chief Executive Officer reaches

the age of 68, his/her duties will end after the first General

Meeting held after his/her sixty-eighth birthday.

At the suggestion of the Chairman and Chief Executive

Officer, the Board of Directors may appoint one or more

individuals to the supporting position of Executive Officer.

There can be a maximum of five executive officers. The

Board of Directors determines the duration of the position,

the remuneration and any limits on the powers of each

executive officer.

If the Chairman and Chief Executive Officer terminates

or is prevented from performing his/her duties, the

executive officers retain their positions and duties until

the appointment of the new Chairman and Chief Executive

Officer, unless the Board decides otherwise.



21.2.3 Rights attached to shares

Each share gives a right to the profits and Company assets

proportionate to the percentage of the share capital that

it represents. It also confers the right to vote and be

represented at General Meetings under normal legal

conditions. Each share confers a right to information and

communication as provided for in Articles L. 225-115 et seq.

of the French Commercial Code. Ownership of a share

automatically implies compliance with the articles of

association and the decisions of the General Meeting.

Shareholders’ losses are limited to their investments.

Heirs, creditors, assignees or other representatives of a

shareholder may not require the sealing of the Company’s

property or securities, nor request a division or sale, nor

interfere in the work of the directors. To exercise their

rights, they must refer to the statements of Company assets

and liabilities and the decisions of the General Meeting.

Whenever ownership of more than one share is necessary

to exercise any right, in the event of an exchange,

consolidation or grant of shares, or as a result of a capital

increase or reduction, merger or any other corporate

procedure, owners of single shares or a number lower than

the required amount may exercise this right only if acting

on behalf of a group or by buying or selling the necessary

amount of shares.

La Poste has issued only one category of shares.

21.2.4 Actions required to change the rights of shareholders

The Extraordinary General Meeting alone is authorised to

amend any of the provisions of the articles of association.

However, it may not increase shareholders’ commitments,

except through transactions resulting from a lawful

grouping of shares.

La Poste has issued only one category of shares.


Additional information Memorandum of association and articles of association 21

21.2.5 General Meetings

21.2.5.1 Access to, participation in and voting at General Meetings

On proof of identity and share ownership, all shareholders

have the right to attend General Meetings and take part

in discussions under applicable legal and regulatory

conditions.

Shareholders may authorise their spouse or another

shareholder to represent them at a General Meeting.

They may also vote by letter post under the conditions as

provided for by law. The Company must receive the voting

form no later than three days before the date of the General

Meeting.

The authorizations and forms to vote by letter post may be

sent electronically if signed in accordance with applicable

legal and regulatory provisions.

21.2.5.2 Notification of General Meetings

General Meetings are called by the Board of Directors or,

failing this, the Statutory Auditors or any authorised person

in accordance with applicable laws and regulations. They

are held at the head office or any other place shown in the

notice.

They may be held by video conference or other means

of telecommunication that enable shareholders to be

identified in accordance with applicable legal and regulatory

provisions. In this case, individuals using these means are

deemed present when calculating the quorum and majority

of shareholders.

The notice is sent at least two weeks before the date of the

meeting. If the meeting cannot be held with the necessary

quorum, a second meeting and if necessary, an extension

to the second meeting will be called with at least 10 days’

notice, under the same conditions as the first.

21.2.5.3 Agenda and conduct of General Meetings

The agenda appears on the notice of the meeting and is

approved by the person convening the meeting. The meeting

may only discuss issues on the agenda.

An attendance register is kept at each meeting, containing

all legally required information.

Meetings are chaired by the Chairman and Chief Executive

Officer or, in his absence, a Board member authorised to do

so by the Board. Failing this, the shareholders elect their

own Chairman.

The positions of scrutineers are held by the two members of

the meeting, present and accepting the role, who personally

or as proxies receive the highest number of votes.

The Committee, comprising the Chairman and two

scrutineers, appoints the secretary who does not have to

be a shareholder.

The role of Committee members is to check, certify and

sign the attendance register, ensure debates run smoothly,

rule on any incidents, supervise voting and ensure voting is

lawful, and draw up the minutes.

The minutes are produced and copies of decisions are

certified and issued in accordance with the law.

21.2.5.4 Ordinary General Meeting

The Ordinary General Meeting is called to make all

decisions that do not alter the articles of association. It is

held at least once a year, within six months of each financial

year-end, to approve the annual financial statements. A

legal ruling may grant an extension to this deadline.

When first called, its decisions will only be valid if those

shareholders present or represented, or having voted by

letter post, hold at least one fifth of the shares to which

voting rights are attached. If a second meeting is held, no

quorum is required. Decisions are made on the basis of

a majority of votes cast by those shareholders present,

represented or having voted by letter post.



21.2.5.5 Extraordinary General Meeting

Only the Extraordinary General Meeting is authorised to



except through transactions resulting from a lawful merging

of shares.

Subject to any legal provisions to the contrary, decisions will

only be valid if those shareholders present or represented,

or having voted by letter post, hold at least one quarter of

the shares to which voting rights are attached at the first

meeting, or one fifth at the second. If the latter is inquorate,

the second meeting may be adjourned for up to two months

from the date when it was convened.

Subject to any legal provisions to the contrary, decisions

require a two-thirds majority of votes cast by those

shareholders present, represented or having voted by letter

post.

21.2.6 Provisions that could delay or prevent a change of control

In accordance with the provisions of the aforementioned

Article 1-2 of the Act of 2 July 1990, the share capital is held

by the French government—the majority shareholder—and

other publicly owned legal entities, with the exception of the

percentage of the share capital that may be held by staff

under the conditions set out in the same Act.

21.2.7 Provisions setting the threshold above which all equity investments must be disclosed

Not applicable.

21.2.8 Conditions governing changes in share capital

The share capital may be increased, reduced or written down under the conditions set forth by law.


22Material contracts


Material contracts 22

To the best of La Poste’s knowledge, there are no material contracts other than those agreed in the normal course of

business, presented in Chapter 5 on the Group’s business activities.


23Third-party information, statements

by experts and declarations of interest


Third-party information, statements by experts and declarations of interest 23

Not applicable.


24Publicly available documents


Publicly available documents 24

All documents made available to the public under normal

legal conditions may be obtained from the head office of

Le Groupe La Poste at 44, boulevard de Vaugirard, 75015

Paris.

The articles of association of Le Groupe La Poste are

available on its website www.legroupe.laposte.fr (access

via the header "Profil" [Profile] then "L’organisation"

[Organization] then "Le conseil d’administration" [Board of

Directors]).

Le Groupe La Poste’s consolidated financial statements

pertaining to the last three financial years (at least) are

also available on this website (access through the header

"Finance", then "Publications").


25Information on equity investments


Information on equity investments 25

Le Groupe La Poste does not have any non-consolidated

equity investments likely to have a material impact on the

appraisal of its assets and liabilities, financial position or

results. The main non-consolidated equity investments

are presented in Note 19 to the consolidated financial

statements (“Other Financial Assets”).

Equity investments in consolidated companies are shown in

Chapter 6, "Simplified organization chart", and in Note 41 on

the scope of consolidation in the notes to the consolidated

financial statements.


A

Appendice 1: Chairman report on corporate government, internal control procedures and risk management in the respect of 2013 . . . . . .445

Appendice 2: Auditors’ report, prepared in accordance with article L. 225-235 of the French Commercial Code, on the report of the Chairman of the Board of Directors of the company La Poste . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 489

Appendice 3: Summary of information pertaining to the social and environmental consequences of the business activities, and societal commitments in favour of sustainable development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 493

Appendice 4: Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 509

Appendice 5: Cross reference table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 519

Appendices


A1

Introduction 446

1 Corporate governance 446

2 Internal control and risk management procedures 455

Appendix 481

Chairman's report on corporate

government, internal control

procedures and risk management

in respect of 2013


Chairman's report on corporate government, internal control procedures and risk management in respect of 2013IntroductionA1

Introduction

Pursuant to the provisions of Article L. 621-18-3 of the

French Monetary and Financial Code, amended by the Act

of 3 July 2008 and the ordinance of 22 January 2009, as

well as the provisions of Article L. 225-37 of the French

Commercial Code, amended by Ordinance 2009-80 of

22 January 2009—Article 7, the purpose of this document

is to report on the conditions for preparing and organising

the Board of Directors’ work, as well as on the internal

audit and risk management procedures implemented by

Le Groupe La Poste in 2013.

The Chairman asked the Group Audit and Risk Department

and the Group Finance Department to jointly take care of

the preparatory work required for the writing of this report,

based on the mapping of the risk management system

and the self-assessment of the maturity of internal audit

systems and their contribution to risk management within

the Group's main entities.

The necessary information was collected from the main

players of internal audit and risk management.

This report was presented to the Audit Committee on

18 February 2014 and approved by the La Poste Board of

Directors on 20 February 2014.

1 Corporate governance

1.1 Legal and regulatory framework

1.1.1 Policies and procedures

The Board’s by-laws specify the principal directors of

its operations and the procedures according to which it

performs its engagement, as well as those of its specialised

Committees. Lastly, it refers to the La Poste Director’s

Code, which specifies the rights, obligations and principles

applicable to members of La Poste’s Board of Directors.

This regulation was adopted by La Poste's Board of

Directors by deliberation on 10 February 2011. Regulating

procedures for the adoption and modification of the

regulation are provided for therein.

1.1.2 Code of corporate governance

At its meeting on 10 March 2011, the La Poste Board of

Directors decided to refer to the provisions of the Code

of Corporate Governance drawn up by Afep-Medef (1) for

purposes of preparing the report mentioned in Article

L. 225-37 of the French Commercial Code. Said Code of

Corporate Governance is compatible with the legislative and

regulatory provisions governing La Poste.

In accordance with legal and regulatory provisions

specific to La Poste, out of its 21 members, the Board of

Directors has 19 directors (12 of whom are shareholder

representatives and seven employee representatives)

who by definition cannot meet the independence criteria

applied by the Afep-Medef Code of Corporate Governance,

revised in June 2013. However, the Company believes that

each of the directors has skills and professional experience

useful to the Company, as well as complete freedom and

independence of judgement.

Moreover, some of the recommendations of the Afep-

Medef code are not applicable to La Poste as a result of

the specific laws and regulations under which it falls (Act

No.90-568 of 2 July 1990 as amended):

the dissociation of the duties of the Chairman of the

Board of Directors and the Chief Executive Officer:

Article 11 of the 2 July 1990 Act as amended, referred to

in Article 14 of the articles of association states that the

positions of Chairman and Chief Executive Officer may

be combined;

the terms of appointment and removal of the Chairman

and Chief Executive Officer: Article 10 of the Act of

26 July 1983 referred to in Article 14 of the articles of

association states that the Chairman and Chief Executive

Officer is appointed and removed by decree;

(1) The Afep/Medef code is available on their respective websites.


Chairman's report on corporate government, internal control procedures and risk management in respect of 2013

Corporate governance

res 13

nce A1

the establishment of the Chairman and Chief Executive

Officer's remuneration (1): the decree dated 9 August

1953 states that the decision comes from the relevant

ministers and the decree dated 26 July 2012 defines a

ceiling;

representation within the Board of Directors of specific

categories of directors does not apply to La Poste: the

composition of the Board of Directors is fixed by the

Act of 26 July 1983 (Article 5) and the Act of 2 July 1990

(Article 10), the provisions of which are contained in

Article 13 of the articles of association;

the term of office for members of La Poste’s Board of

Directors is set at five years. The Board of Directors

members are all reappointed at the end of this term, for

which the procedures are specified in Article 11 of the

Act of 26 July 1983 and are referred to in Article 13 of the

articles of association;

Board members cannot hold shares personally as law

No.2010-123 dated 9 February 2010 lays down that the

share capital of La Poste shall be held by the French

government or by other publicly-owned legal entities

with the exception of share capital that may be held as

employee shareholding.

1.2 Composition and powers of the Board of Directors

1.2.1 Composition of the Board of Directors

La Poste’s Board of Directors comprises 21 members, in

accordance with Act 90-568 of 2 July 1990 as amended,

which relates to the organization of La Poste and France

Télécom’s public services, with Decree No.2010-191 dated

26 February 2010 as amended, which sets out La Poste’s

initial articles of association and includes various provisions

relating to La Poste, and with Article 13 of the Company’s

articles of association (2):

12 directors appointed by the General Meeting: at the

proposal of the French government and Caisse des

Dépôts et Consignations;

two directors appointed by Decree;

seven staff-elected directors.

As at 31 December 2013, the Board’s membership was as

follows:

Directors appointed by the General Meeting

At the proposal of the French government and Caisse des Dépôts et Consignations

Philippe Wahl, the Chairman and Chief Executive Officer

of La Poste (3)—designated by co-optation by the Board

of Directors on 1 August 2013, replacing Guillaume

Gaubert. The General Meeting on 15 October 2013

ratified his appointment;

At the proposal of the French government

Éric Delzant, inter-ministerial delegate for regional

planning and regional attractiveness—designated

by co-optat ion by the Board of D irectors on

26 September 2013, replacing Emmanuel Berthier.

The General Meeting on 15 October 2013 ratified his

appointment;

Laurence Franceschini, Director General for the

Media and Cultural Sectors, Ministry of Culture and

Communications;

Jean-Michel Hubert, Deputy Chairman of the Digital

Strategy Committee and a member of the Supervisory

Board for the future investments programme until

February 2013;

Philippe Lemoine, Chairman and Chief Executive Officer

of LaSer;

Françoise Malrieu, Chairperson of the Board of Directors

of Société de Financement de l’Économie Française;

Sophie Mantel, Head of the Department, assistant to

the Director of Budget was appointed via co-optation by

the Board of Directors on 26 September 2013, replacing

Jean-Paul Bailly. The General Meeting on 15 October

2013 ratified her appointment;

Christian Martin, Master of the Court of Auditors—

designated by co-optation by the Board of Directors on

24 January 2013, replacing Pascal Faure. The General

Meeting on 18 June 2013 ratified his appointment;

Antoine Saintoyant, Director of Investments for the

Government Investment Agency, Deputy Direction

in charge of "Services, Aeronautics, and Defence"—

(2) The appendix “Directors' biographies and terms of office” in the current report details the information concerning the members of the Board of Directors.

(3) Philippe Wahl was appointed, at the proposal of the French government, Chairman and Chief Executive Officer of Le Groupe La Poste, by Decree of the

Council of Ministers by the Chairman of the French Republic on 26 September 2013.

(1) Refer to chapter 15.1 of the registration document.


Chairman's report on corporate government, internal control procedures and risk management in respect of 2013Corporate governanceA1

designated by cogoptation by the Board of Directors on

22 April 2013, replacing Olivier Bourges. The General

Meeting on 18 June 2013 ratified his appointment.

At the proposal of Caisse des Dépôts et Consignations

Caisse des Dépôts et Consignations represented by

Jean-Pierre Jouyet, Chief Executive Officer of Caisse des

Dépôts et Consignations;

Odile Renaud-Basso, Deputy Managing Director of the

Caisse des Dépôts group and Director of Savings Funds—


12 December 2013, replacing Lorraine Donnedieu de

Vabres-Tranié;

Franck Silvent, Director of "Finance, Strategy and

Equity Investments" of the Caisse des Dépôts group—


22 April 2013, replacing Sabine Schimel. The General

Meeting on 18 June 2013 ratified his appointment.

Board members appointed by decree

Jacques Pélissard, representative of local authorities:

Chairman of the French Mayors Association and a

member of the Local Finance Committee;

Elyane Zarine, user representative: Chairman of

France’s General Organization of Consumers (Orgeco)

and Chairman of the Commission on Mediation and

Consumption.

Staff-elected directors

Régis Blanchot, Production Team Leader at the Greater

Paris financial centre, sponsored by the SUD trade union;

Florence Derouard, human resources management

agent at the Rouen centre for human resources,

sponsored by the SUD trade union;

Bernard Dupin, senior executive of La Poste and

member of the regional Economic and Social Council

of Languedoc-Roussillon, sponsored by the CGT trade

union;

Sylvie Féola, customer relations manager at the

Marseille financial centre, sponsored by the CGT trade

union;

Michel Lersy, level-one technical and management agent

at an Industrial Mail Platform of Lorraine, sponsored by

the CGT trade union;

Marie-Pierre Liboutet, Communications Director in the

Limousin Mail Department, sponsored by the CFDT trade

union;

Michel Pesnel, senior executive for the General Secretary

at the Head office, sponsored by the FO trade union.

1.2.2 Powers of the Board of Directors

As specified in Article 1 of the by-laws, the Board lays down

and directs the general policy of Le Groupe La Poste. In this

regard, the Board:

lays down the Group’s broad strategic outlines and is

consulted on all other major Group transactions;

examines, at the same time as the separate financial

statements of La Poste and the consolidated financial

statements, the documents concerning forward-looking

management, the results regarding the financial and

service quality goals set; reviews and approves the

Group’s annual budget and main financial management

goals;

receives quarterly reports on the Group’s business

activities and operational results, and a semi-annual

report on the Group’s top-level subsidiaries, as well as

regular updates on its financial position and material

commitments;

is consulted for prior approval regarding major

Group f inancial t ransact ions (e.g. long-term

borrowings, sureties, endorsements or guarantees,

asset securitisation, debt or financial risk hedging

management activities and a policy of dividend

distribution) as well as Group acquisitions and disposals,

and new strategic direction of La Poste's activity and one

of its subsidiaries, all major internal capital expenditure

programmes and any capital increases involving

subsidiaries greater than €30 million;

is notified of internal audit procedures established by the

Group, significant risks which would be exposed by these

controls and risk management policies being considered

or put in place;

ensures the truth and accuracy of the financial

statements and checks the quality of internal accounting

controls and of the financial information disclosed or

made available to the public;

carries out an annual assessment on its internal

operations.

1.2.3 Powers of the Chairman and Chief Executive Officer

In accordance with the resolution of the La Poste's

Board of Directors of 26 September 2013, the Chairman

and Chief Executive Officer is fully empowered to act in

all circumstances on the Company’s behalf, within the

corporate purpose and subject to the powers of the General

Meeting and those reserved for the Board of Directors

by law, La Poste’s articles of association, as well as the

Board’s by-laws (Article 1.4).




res 13

nce A1

Consequently, the Chairman and Chief Executive Officer

must obtain the prior authorization of the Board of Directors

for the following transactions:

acquisitions, equity investments, asset disposals, and

capital restructuring: any transaction (including any

material change thereto) involving acquisitions, equity

investments, asset disposals (including financial,

excluding day-to-day treasury management), capital

restructuring (in particular mergers, spin-offs or asset

transfers, with the exception of Le Groupe La Poste

internal transactions) for a unit amount of over

€30 million, this threshold including, as the case may be,

the price, the net debt of the target, the amount of any

purchase or subscription guarantee made by La Poste

and any off-balance sheet commitments given;

any transaction involving strategic or capitalistic

partnership, of disposal of issue of securities which give

access to capital: any transaction (including any material

change thereto) involving a business combination,

disposal or issue of equity securities or financial

instruments convertible to share capital carried out by

La Poste (or to which La Poste is party), for a unit amount

of over €30 million, this threshold including, as the case

may be, the price, the net debt of the target, the amount

of any purchase or subscription guarantee made by

La Poste and any off-balance sheet commitments given;

any strategic partnership with average annual revenue

over the time frame of its business plan of more than

€30 million (including the renewal of any partnership);

investment or divestment transactions: any capital

expenditure or divestment transaction (including any

material change thereto) not covered in the above

paragraph, carried out by La Poste (or to which La Poste

is party) for a unit amount of over €200 million, this

threshold including, as the case may be, any given off-

balance sheet commitments;

debt management or treasury management: any

transaction (including any material change thereto)


day-to-day management) carried out by La Poste for a


securitisation: any transaction (including any material

change thereto) involving the securitisation of financial

or commercial assets carried out by La Poste for a unit

amount of over €100 million per transaction;

new strategic direction: any new direction for La Poste’s

business or a change in its object, or any material

transaction reflecting a new direction for the business

or a strategic refocusing of La Poste;

bringing legal proceedings or reaching a settlement

agreement: any decision to bring legal (including

arbitration), regulatory or administrative proceedings

by La Poste or to enter into a settlement agreement or

arbitration agreement with respect to legal, regulatory

or administrative proceedings to which La Poste is party,

for a unit amount of over €50 million, it being added that

where a number of such actions are based on the same

or a related event, this threshold is assessed based on


offering of financial securities to the public: any decision

to carry out a public offering of financial instruments

issued by La Poste outside programmes that were

already authorised as part of the budget approval by the

Board of Directors;

change in accounting practices: any material change

or planned material change to Le Groupe La Poste’s

accounting practices.

In addition, the Chairman and Chief Executive Officer is

expressly authorised to provide bonds, guarantees and

endorsements binding La Poste up to an overall annual

limit excluding tax set by the Board of Directors, and a

maximum unit amount excluding tax of €75 million.

The Chairman and Chief Executive Officer is authorised to

delegate these powers.

1.3 Committees of the Board of Directors

In accordance with article 16 of the Articles of association,

four specialised Committees were established within the

Board: their tasks are specified in their respective by-laws.

These Committees are tasked with examining and preparing

certain projects before plenary sessions, either adding them

to the agenda or mentioning them in the report on work

carried out by their Chairman.

The government representative and the head of the French

government’s economic and financial control unit can

attend the meetings of each Committee.



1.3.1 Audit Committee

Role

The duties of the Audit Committee, established in January

2001, are to assist the Board with the analysis of the

financial statements and key financial information, the

mapping of major risks, the policy to manage these risks

and the internal audit systems for La Poste and the Group.

Membership

On 31 December 2013, the Audit Committee is presided

over by Mr Silvent and includes Mr Lersy, Ms Mantel,

Ms Renaud-Basso, and Mr Saintoyant.

The by-laws of the Audit Committee exclude the presence

of the Chairman and Chief Executive Officer of La Poste.

The qualifications of the Audit Committee members are

listed in the appendix "Biographies and mandates of

directors" of this report.

The composition of the Group's Audit Committee reflects

the particularities of the composition of the Board of

Directors of Act No.90-568 of 2 July 1990, as amended,

which do not allow compliance with the recommendations

of the Afep-Medef code. However, the Le Groupe La Poste

believes that, although the Audit Committee does not

include independent directors, its present composition does

not harm the powers of this Committee and its ability to

perform its duties.

Activity

The Audit Committee met five times during the period under

review; the average attendance of directors was 84%.

During 2013, in addition to recurring subjects such as

reviewing the annual and interim financial statements,

mapping of the Group's major risks, and scheduling audits,

the Committee notably reviewed the internal audit and risk

control processes of the Mail Business Line and La Banque

Postale, as well as its revenue model and its allocation of

equity capital.

1.3.2 Strategy and Investment Committee

Role

The duties of the Strategic Committee, established in

February 2004, are to prepare the work of the Board of

Directors with regard to setting strategic development

goals of La Poste and its Group in France and abroad,

proposed strategic agreements and partnership monitoring,

planned major asset acquisitions or disposals, the setting

up of subsidiaries, the acquisition or disposal of equity

investments exceeding €30 million, the long-term business

plan and the monitoring of the broad outlines of the public

service contract entered into with the French government.

Membership

On 31 December 2013, this Committee is presided over

by Ms Malrieu and includes Mr Blanchot, Mr Dupin,

Ms Liboutet, Mr Pesnel, Ms Renaud-Basso, Mr Saintoyant,

and Mr Silvent.

Activity

The Committee met four times during the period under

review; the average attendance of directors was 84%.

In 2013, the Committee essentially worked on the Group's

strategic project, the business contract, the change in

La Banque Postale's equity capital, the international

development of GeoPost and acquisition projects.

1.3.3 Quality and Sustainable Development Committee

Role

Originally named the “Client Quality” Committee in

February 2004, this Committee, helps the Board of Directors

to analyse the quality of services provided by La Poste

and the Group’s companies to their clients, sustainable

development, and well-being in the workplace.

The Board of Directors may also ask the Committee to

carry out any other work relating to quality and sustainable

development; the Committee may even suggest that the

Board consult it on any specific issue that it considers

necessary or relevant.




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Membership

On 31 December 2013, this Committee is presided over by

Mr Hubert and includes Ms Derouard, Mr Martin, Ms Féola,

Ms Renaud-Basso, Mr Silvent, and Ms Zarine.

Activity

The Quality and Sustainable Development Committee

met six times during the period under review; the average

attendance of directors was 79%.

During 2013, the Committee examined the service-oriented

attitude, the systems to measure quality delivered and

perceived quality, the implementation of the agreement

on Quality of life at work, the strategy on the subject of

corporate social responsibility and La Poste's ethics

programme.

1.3.4 Remuneration and Governance Committee

Role

The Committee, created in April 2010, with a view to

preparing the work of the Board of Directors, is tasked

with the following: make recommendations regarding the

remuneration of La Poste’s corporate officers, give an

opinion on any proposals about the general principles of

base salary and additional remuneration of the executive

directors of La Poste and its main subsidiaries. It also gives

an opinion on any planned capital increase reserved for

employees or any free share grant pursuant to Articles 32

and 33 of Act 90-568 of 2 July 1990 as amended, relating to

the organization of the public service provided by La Poste

and France Télécom, and lastly, it coordinates the annual

appraisal of the Board of Directors.

The Chairman of the Board of Directors informs the


replacement of the executives of La Poste and its main

subsidiaries. Where appropriate, the Committee passes on

its observations to the Board of Directors.

The procedure for setting the remuneration of the Chairman

and Chief Executive Officer is subject to Article 3 of Decree

No.53-707 of 9 August 1953 regarding gouvernment control

of public sector enterprises.

Membership

On 31 December 2013, this Committee is presided over by

Mr Lemoine and includes Mr Jouyet, Ms Renaud-Basso and

Mr Saintoyant.

Activity

The Remuneration and Governance Committee met four

times in the year under review; the average attendance of

directors was 75%.

In 2013, the Committee was principally dedicated to its

recurrent assignments: remuneration of the Chairman and

Chief Executive Officer, directors' fees and evaluation of the

Board of Directors' work.

1.4 Activities of the Board of Directors

The Board of Directors meets as often as Company interests

require, and at least six times a year. Furthermore, one

third of the members of the Board of Directors may call a

meeting by setting an agenda if no meeting has been held

for more than two months.

Except in emergencies, a meeting notice must be sent out

at least ten days prior to the scheduled date of the meeting.

The necessary information is provided to directors at the

same time as the meeting notice, or at least three days

prior to the date of the Board meeting.

Minutes are drafted for each meeting and submitted to the

Board for approval.

In 2013, the Board met 11 times. Directors’ average

attendance at these meetings was 84%.

In particular, the Board of Directors reviewed and authorised

the following:

the business contract;

the 2014-2016 local postal coverage agreement;

the increase in La Banque Postale's equity capital;

acquisition projects (La Banque Postale, GeoPost);



the collection of dividends from CNP-Assurances in

shares;

the 2014 budget.

In addition, on 1 August, Board members proposed the

appointment of Philippe Wahl as Chairman of the Board

of Directors.

The Board of Directors also reviewed the corporate balance

sheet, the business progress of first-level subsidiaries, and

the annual report on the management of real estate assets,

as well as the current report. The chairs of the specialised

Committees presented the Board with the synopsis of work

they completed.

Lastly, the Board met for a strategic meeting on 24 January

2013 before adopting a preparatory document for the

strategic plan ("strategic project, financial outlook and

future in-depth projects").

On 28 November 2013, a new strategic meeting was

organised in order to examine La Poste's digital transition,

new services delivered by postmen, La Banque Postale's

challenges with equity capital, the future of the Group's

public service missions and the international development

of GeoPost. On 16 January 2014, a last strategic meeting

was held before the Board of Directors adopted the strategic

plan on 28 January 2014.

1.5 Assessment of the Board of Directors

Once a year since 2006, the Board of Directors has devoted

a part of its agenda to assessing its internal practices, with

particular regard to its by-laws and to any improvements

that could be made. From 2006 to 2009, this annual

appraisal was led by Jean-Michel Hubert; the process is

now led by the Remuneration and Governance Committee

and its Chairman, who presents a summary to the Board

and suggests areas of improvement. La Poste has also

decided to carry out this assessment once every three years

with the help of an external firm.

The assessment of the Board's practices for 2013 and those

of its specialised Committees was therefore conducted

through interviews. The details of this assessment are given

in chapter 16.3 of the registration document.

1.6 Directors

1.6.1 Independence and ethics

The Board members' Code, adopted in December 2004 and

included with each version of the policies and procedures

that the Board of Directors has adopted since, specifies

the rights and principles with which Board members must

comply.

Article 6.1 of this Code specifies that directors must

undertake, under all circumstances, to remain independent

when analysing, judging, making decisions and taking

actions, and to refuse all direct or indirect pressure that

could have an influence on them.

The position of a director representing employees

is incompatible with any other position involving the

representation of employee interests within La Poste or its

subsidiaries.

1.6.2 Conflicts of interest within administrative bodies and Executive Management (1)

To the best of La Poste’s knowledge, and on the date of

approval of this document, there were no potential conflicts

of interest at La Poste between the duties of the corporate

officers and members of the Executive Committee, and their

private interests or other duties.

To the best of La Poste’s knowledge, there are no

arrangements or agreements between shareholders,

customers, suppliers or any other parties under which a

member of the Board of Directors has been appointed to

this position.

(1) Refer to chapter 14.3 of the registration document.




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1.6.3 Duties

The rights and duties of directors, as set out in Articles 7

to 13 of the Act of 26 July 1983 on the democratisation of

the public sector, apply to members of La Poste Board of

Directors.

The by-laws of the Board of Directors note that its members

are subject to the rights and obligations detailed in the

Director’s Code, such as the obligation regarding laws

and regulations and social interest, the degree of personal

involvement of directors during their term, the duty to

express questions and opinions resulting from exercise of

the mandate, the commitment made to avoid all potential

conflicts of interest, as well as the duties with respect to the

confidential nature of information.

1.6.4 Information and training

The Chairman and CEO regularly informs the Board

members of the major facts and significant events

regarding La Poste that have occurred between meetings

of the Board of Directors, allowing them to fully perform

their engagement.

In conformity with Article 6 of the by-laws, each director is

given, upon taking office, a welcome folder that has been

updated according to the modifications.

Each director may furthermore benefit from additional

training regarding the specific features of the Group, its

Business Lines and its sectors of activity.

1.6.5 Remuneration

The Chairman and Chief Executive Officer of La Poste will

not receive directors' fees for his position as a director of

La Poste.

The rules for distributing directors' fees and the amounts

paid for 2013 are set out in Chapter 15.1.2.3 and 16.4.4 of

the registration document.

1.7 General Meetings

1.7.1 Access to, participation in and voting at General Meetings

On proof of identity and share ownership, all shareholders

have the right to attend General Meetings and take part

in discussions under applicable legal and regulatory

conditions.

Shareholders may authorise their spouse or another

shareholder to represent them at a General Meeting.

They may also vote by letter post under the conditions as

provided for by law. The Company must receive the voting

form no later than three days before the date of the General

Meeting.

The authorizations and forms to vote by mail may be sent

electronically if signed in accordance with applicable legal

and regulatory provisions.

1.7.2 Notification of General Meetings

General Meetings are called by the Board of Directors or,

failing this, the Statutory Auditors or any authorised person

in accordance with applicable laws and regulations. They

are held at the head office or any other place shown in the

notice.

They may be held by video conference or other means

of telecommunication that enable shareholders to be

identified in accordance with applicable legal and regulatory

provisions. In this case, individuals using these means are

deemed present when calculating the quorum and majority

of shareholders.

The notice is sent at least two weeks before the date of the

meeting. If the meeting cannot be held with the necessary

quorum, a second meeting and if necessary, an extension

to the second meeting will be called with at least 10 days’

notice, under the same conditions as the first.



1.7.3 Agenda and conduct of General Meetings

The meeting agenda appears on the notice and is approved

by the author. The meeting may only discuss issues on the

agenda.

An attendance register is kept at each meeting, containing

all legally required information.

Meetings are chaired by the Chairman and Chief Executive

Officer or, in his/her absence, a director authorised to do

so by the Board. Failing this, the shareholders elect their

own Chairman.

The positions of scrutiners are held by the two members of

the meeting, present and accepting the role, who personally

or as proxies receive the highest number of votes.

The Committee, comprising the Chairman and two

scrutineers, appoints the secretary who does not have to

be a shareholder.

The role of Committee members is to check, certify and

sign the attendance register, ensure debates run smoothly,

rule on any incidents, supervise voting and ensure voting is

lawful, and draw up the minutes.

The minutes are produced and copies of decisions are

certified and issued in accordance with the law.

1.7.4 Ordinary General Meeting

The Ordinary General Meeting is called to make all

decisions that do not alter the articles of association. It is

held at least once a year, within six months of each financial

year-end, to approve the annual financial statements. A

legal ruling may grant an extension to this deadline.

When first called, its decisions will only be valid if those

shareholders present or represented or who have voted by

mail, hold at least one fifth of the shares to which voting

rights are attached. If a second meeting is held, no quorum

is required. Decisions are made on the basis of a majority

of votes cast by those shareholders present, represented or

having voted by mail.

1.7.5 Extraordinary General Meeting

The Extraordinary General Meeting alone is authorised to



except through transactions resulting from a lawful

grouping of shares.

Subject to any legal provisions to the contrary, decisions will

only be valid if those shareholders present or represented,

or having voted by mail, hold at least one quarter of the

shares to which voting rights are attached at the first

meeting, or one fifth at the second. Without the latter

quorum, the second meeting may be adjourned for up to

two months.

Subject to any legal provisions to the contrary, decisions

require a two-thirds majority of votes cast by those

shareholders present, represented or having voted by letter

post.



Internal control and risk management procedures

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2 Internal control and risk management procedures

Throughout 2013, Le Groupe La Poste strengthened and expanded its work on internal audit and risk management across

all its operations.

2.1 Definition and goals of internal audit and risk management

2.1.1 Reference documents

Le Groupe La Poste employs the COSO 2 (Committee Of

Sponsoring Organizations of the Treadway Commission),

international reference framework for all its operations, for

the purposes of implementing its risk management system,

and draws on the reference framework of AMF (the French

Financial Markets Authority).

In particular, it builds into its approach, the definition of

internal audit and risk management of the reference

framework as amended in July 2010 by the AMF, according

to which risk management is a process implemented by

the Board of Directors, the General Management and all

the organization’s employees. It is taken into account when

drawing up a strategy and in all business activities.

A Group Risk Management Charter, presented to the Audit

Committee of the Board of Directors and signed by the

Chairman, applies to the whole Group as from 2010.

The aim of the risk management process described in the

Charter is to ensure:

respect for the Group’s corporate object and its missions;

legal and regulatory compliance;

application of instructions and guidance provided by

executive and decision-making bodies;

the smooth running of internal procedures, in particular

those helping to safeguard Group assets;

performance and optimisation of operations;

reliability of financial and non-financial information.

The Company’s aims, which the internal audit and risk

management system endeavours to secure, are both

strategic and operational and concern the reliability of

reporting and compliance with laws and regulations.

The Group’s internal audit system includes a series of

resources, approaches, procedures and actions that help

to control its activities, ensure the effectiveness of its

operations and the efficient use of resources, and identify

risks.

In line with AMF recommendations, the risk management

system provides for an organizational framework with a

specific structure. This is a process comprising three steps:

risk identification, risk analysis, and risk treatment. It is an

ongoing process.

La Banque Postale, a wholly-owned subsidiary of La Poste,

is also subject to CRBF Regulation 97-02 as amended,

and the recommendations of the Basel Committee. When

acting in the name and on behalf of La Banque Postale,

La Poste Retail Brand must ensure that it complies with

this regulation.

2.1.2 Scope

The Group’s internal audit and risk management systems

apply to the parent company, the business conducted across

all Retail Brand outlets (including local postal branches and

Poste Relais outlets), the outsourced activities of La Banque

Postale as well as wholly-owned subsidiaries, or over which

it has majority control and which are fully consolidated.


Chairman's report on corporate government, internal control procedures and risk management in respect of 2013Internal control and risk management proceduresA1

2.1.3 Limits of risk management

Risk management is designed to identify events that could

affect the organization or achievement of the Company’s

targets, and to manage risks within its maximum tolerance

of risk. Its aim is to offer Executive Management and

the Board of Directors reasonable assurance that the

organization’s targets will be met. Furthermore, the

internal audit cannot provide an absolute guarantee that

the Company’s targets will be met.

2.2 The Group’s permanent internal audit and risk management systems

2.2.1 General governance principles

The goal of risk management is to ensure, to the extent

possible, that risks within the Group and its various entities

are completely and consistently identified, assessed and

controlled.

Each aspect of internal audit and risk management is

interdependent, helping to cover identified risks—as with

the Group’s policy for insurance.

The Group’s Executive Management relies on the Group’s

Risk Management Department, which reports to the

head of Group risk audit, in order to implement the risk

management system, including permanent internal audit.

The purpose of this Department is to support and

consolidate risk management activities within the

Group; risk management being considered, in line with

the “COSO 2” and AMF reference frameworks, to be a

combination of internal audit and risk management. It

notably maps the Group’s major risks, in relation with the

Departments responsible for risk within the businesses,

subsidiaries and cross-functional areas, coordinates the

work of the Group Risk Committee, as well as internal audit

and risk management activities, and manages the Group’s

policy for insurance.

The Group’s general policy for insurance is based on the

following principles:

pooling of risk: wherever possible, a Group policy is

taken out to provide each entity or subsidiary, regardless

of their financial resources, with optimum coverage

commensurate with its own risks, at minimum cost;

insuring in priority the intensity risk: in general,

frequency risk, for which the cost of insurance would be

too high (deductible, holding, etc.), is kept in-house given

La Poste’s financial resources.

The business and functional Departments, which have

been responsible for identifying and controlling their

specific risks since 2003, have established their own units

for supervising and developing internal audits (principles

and guidelines regarding the management of Group risks—

statement of guidelines of 14 May 2003).

Three bodies aim to organise and plan the Group’s risk

management system:

the Audit Committee of La Poste Board of Directors, whose tasks include ensuring the effectiveness of

internal audit and risk management;

the Group’s Risk Board, a function provided by the

Group’s Executive Committee. Its role is to make all

decisions relating to the Group’s major risks and to the

risks shared across businesses which it monitors;

the Group’s Risk Committee, presided over by the

Executive Officer and led by the Risk Management

Department, is comprised of the Group’s Audit and

Risk Director, the Group Risk Management Director,

the Directors of Risk Management in the Business

Lines and Poste Immo, the Group Director of Taxation

and Accounting, the Director of Human Resources and

Employee Relations, the Group Director of Legal Affairs

and Compliance, the Group Director of Information

Systems and the Group Director of General Security.

It met four times in 2013, mainly to review the Group’s

mapping of major risks as well as its mapping of

sector risks for each Business Line, the main areas

of operations and the monitoring of internal audit

assignments. It is responsible for ensuring consistent

risk management across the Group and prepares the

work of the Executive Committee in this area (the Group’s

Risk Board).




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2.2.2 Internal control system

The Group’s internal audit unit, which reports to the Group’s

Risk Department, ensures adherence to the Group’s Risk

Management Charter. For this purpose, it prepares a map

of the risk management systems for Le Groupe La Poste, in

order to ensure they comply with the Charter.

This Department works towards strengthening internal

audit systems by relying, in particular, on recommendations

from the Audit Department.

The Group’s Internal Control Department contributes to

identifying risks.

It provides support and assistance to Departments, in

particular in order to secure their internal environment. It

distributes applications and methods, in line with market

best practices and provides professional documentation on

risk management, organises its sector and contributes to

its training.

Finally, it coordinates the monitoring of indispensable

oversight points defined by the Risk Committee and actions

aimed at ensuring the coherence of the systems and making

them more efficient.

At its meeting of 15 April 2010, the Board of Directors

of La Poste voted to create the La Poste Purchasing

Committee (CALP), an advisory body positioned alongside

the Chairman and CEO.

This new body issues opinions on the regularity and

economic results of purchasing, including contracts entered

into between the parent company and its subsidiaries. It

ensures the proper application of La Poste's "Rules of

purchase" that were approved by the Board of Directors

and is subject to an update in 2011. These rules explain the

terms of the Ordinance No.2005-649 of 6 June 2005 and

Decree No.2005-1308 of 20 October 2005.

The CALP is presided over by a Master of the Court of

Auditors and is composed of two external experts to

Le Groupe La Poste, chosen for their competences in the

area of purchases, and three other internal members of

La Poste.

The referral of the commission is systematic for any

financial transaction greater than €1.5 million for

intellectual services and €10 million for other purchasing

categories. In addition, the Committee examines 10

contracts involving amounts lower than these thresholds

every year, after a random draw by the Central Purchasing

Department.

The CALP realises its activity once per year by presenting a

progress report before La Poste's Board of Directors.

2.2.3 The risk management and insurance system

The mapping of the Group’s major risks, updated annually,

splits risks into two major categories:

shared major risks, which are namely Group-wide

risks potentially affecting all Business Lines without

distinction, or risks shared across a number of Business

Lines. They are identified by the Group Risk Department

in relation with the Group Audit Department and the

other corporate Departments, in particular concerning

risks relating to information systems, human resources,

financial and legal affairs, with the support of the

Group Information Systems Department, the Human

Resources and Employee Relations Department, the

Group Finance Department, the Group Legal Affairs

and Compliance Department, and the Group’s General

Security Department;

business-specific major risks, namely risks that may

threaten the Group’s strategy (and not just the strategy

of a particular Business Line) and its overall financial

stability. Their census results from an analysis between

the management of the audit and the risks of the Group

and the managers of Business Lines.

Risk mapping gives rise to a risk management plan. A risk

owner, who is a member of the executive Committee and

responsible for drafting an action plan or making a specific

risk supervision proposal, is assigned to each identified

risk. The risk owner looks at areas where risk is incurred

and relies on related master plans drawn up at a corporate

or Business Line level. The risk management plans

incorporate, in addition to appropriate individual actions,

internal audit actions and, where relevant, insurance

coverage.

The main risk factors are described in Chapter 9 of the

registration document.

The Group’s Insurance Department, bound to the

management of Group risks, is in charge of coordinating

insurance policies upon identifying insurable risks and

claims management. It works with the Group’s General

Security Department and the Business Lines on the anti-

fraud system put in place to combat malicious acts in

connection with insurance policies.



2.2.4 Dissemination security

In order to disseminate information, a system used by

all, from executive and strategic managers (Management

Committee, intranet sites and electronic letters) to all

employees (Internal review, “time-space communication”),

allows different news stories to be circulated.

Furthermore, procedures for approving, recording and

spreading professional information are common to all

La Poste entities. In particular, the spreading of information

relies heavily on electronic media adapted to each audience,

helping to apply Company policies and control operations.

The risk management correspondents network is led by the

Group’s Risks Department, which organises and coordinates

inter-business and inter-area exchanges, in particular,

to share methods and practices, and thereby ensure a

consistent framework. Professional documentation on

internal audit at Group level is disseminated through an

Intranet that is accessible to everyone.

2.2.5 Control of systems

The Board of Directors supervises the system, and is

notified by its Audit Committee of the major risks faced by

the Group, and of any increased severity.

The role of the Group Risk Department is to provide

executive and decision-making bodies at La Poste with

an overview of the Group’s major risks and how they are

controlled.

It organises an annual campaign allowing the Business

Lines to describe their internal audit and risk management

system and to formalise their risk management objectives.

This campaign allows the risk management systems to be

mapped at Group level.

The Group’s Risk Department organises a self-assessment

campaign each year on the progress of this internal audit

system, and its contribution to risk management for the

Group as whole.

Lastly, the effectiveness of the system as a whole is

periodically independently audited by the Group’s various

internal audit units, and in particular by the Group Audit

Department.

2.2.6 Summary and outlook

Risk management, internal audit and the insurance

policy contribute to ensuring that the Group achieves its

objectives.

The mapping of major risks was updated in 2013 for 2014.

Plans to control risks relating to risk mapping submitted

to the Audit Committee in December 2012, were presented

at the meeting of the Audit Committee dedicated to risk

management in June 2013. At the same meeting, the

assessment of internal audit, including in particular the

mapping of risk management systems on the "organization

and resources" section, was presented to the Committee.

A self-assessment of the status of the internal audit system

was carried out in December 2013 on all Business Lines

and corporate Departments covering the major fields of

activity, in order to help improve the internal audit system.

It consists of a single questionnaire comprising two main

parts. The first is devoted to the system of permanent

monitoring (operation and coverage of the overall system

of the Group as well as one dedicated to accounting and

finance). The second part includes points of vigilance

determined by the Risk Committee (competition, Quality of

life at work, fraud, ethics, etc.).

In accounting and finance, the approach "Risks and Internal

Audits within the Finance Function" (RECIF) was established

in 2013. The Coordination Committee of risk management

of financing is the coordinating body dedicated to the

control of the approach. Its work focuses on the actions

to be implemented under the points of vigilance and co-

managed by the Finance Department and the Group's Risk

Management Department in close relation to all the players

from the financial sector and that of risk management

of Business Lines and subsidiaries as well as sectors

upstream of the financial sphere.

The project of implementing a reference guide of an internal

audit framework on points of vigilance affecting the Group

was initiated by work on some of the business processes

(purchasing, claims and legal disputes) and the realisation

of a prototype in order to link a panel of members of the

risk management network to co-build the final version of

the application and the terms of its activities.

The renewal and optimisation programme of the

Group's insurance policies was pursued, including the

generalisation of the procedure for selecting brokers and

insurers for all branches of risk, with the establishment of

four pools of brokers.




res 13res A1

With respect to the professionalism of the system,

there were new modules for risk management training

curriculum on this theme, and actions were carried out with

managerial lines to raise awareness. Work for managing

the professional documentation of corporate entities and

the redesign project, optimisation and enhancement of the

Group's information system were undertaken.

The Service Agreement Governance Department, which

reports to the Group’s Risk Department, monitored the

contractual system governing the provision of inter-

company services and performed an annual review for 2012,

which was sent to the Group’s Executive Committee in April

2013.

In 2013, as with previous years, Partnership Committee

meetings were held, attended by the various stakeholders

of the main provisions of contracts between Business Lines.

These Partnership Committees ensured that the signatories

of these contracts were abiding by the commercial,

operational, technical and financial commitments made

under the contract documents, and decided on any

corrective actions necessary for the performance of the

agreements. These Committees are likewise permitted to

define the inter-Business Line cooperation outlook for 2014

in line with the strategic projects of each party.

The contractual documents (framework agreements,

service agreements) that were renegotiated in 2013, were

based on the reference guide to best practices that was

updated and distributed in September 2011.

The reference guide to professional ethics, annexed to

La Poste's by-laws, was mostly distributed in person to all

Group employees: its distribution, initiated in December

2011, continued in 2012 and was completed in 2013. This

reference guide is available online at the Intranet site of the

La Poste (in French and English) and the corporate website

of La Poste for external stakeholders.

The Ethics Committee, chaired by the Group’s executive

officer, is tasked with ensuring the governance of the

La Poste ethics system. It met twice in 2013 in order to

primarily review the progress of the deployment of its

system, the results of the first gauging of the climate of

ethics and the action plan for the prevention of corruption.

These Committees also invite ethics officers of large

companies to exchange the best practices in the field.

In order to strengthen the ethical culture within the

Group, the programme to raise awareness of the system,

which includes information on actions, communication

and training, was completed in 2013 with a new internal

publication, awareness of ethical issues being broadcast on

all internal media and the design of a guide for the swearing

in of La Poste being launched in anticipation of an early

2014 broadcast.

In 2014, the Group will renew its objective to improve

the efficiency of its risk management plans, by boosting

synergies and making additional risk management

improvements through internal audits and insurance.

The Group Risk Department will modernise some

components of the information system that will enable its

Departments to carry out their duties harmoniously with

their correspondents and internal clients.

The period of prototyping the reference guide of the Group's

internal audit will continue for the first six months of the

year before studying the best industrialisation scenarios

while integrating new processes into its content.

As far as training is concerned, focus will be placed on

educating managers, including in particular the redesign

of training of senior Directors newly appointed or promoted.

The interest to invest in distance training solutions will also

be studied.

The Audit Committee of the La Poste Board of Directors will

meet in June 2014 to review the operational efficiency of the

risk management system. It will meet again in December

to examine the 2015 update of the mapping of major risks.

Finally, the Group will establish its second "Ethics and

Conduct" annual report, the presentation of which is

scheduled before the Group Executive Committee and Board

of Directors. In 2014, the Group will continue to develop and

reinforce the main actions carried out in the field of ethics

and conduct.

The ethics division will also accompany the development of

a plan for the prevention of corruption in partnership with

Business Lines and corporate directorates that are party

to this issue.



2.3 Internal control and risk management systems concerning the Group’s accounting and financial information

2.3.1 General supervisory and governance principles for the accounting and finance function

The Group’s Finance Department is in charge of promoting,

in its field, the culture, values and image of the Group, in

particular by coordinating the financial area, defining a

strategy and implementing the accounting, fiscal and

financial policy and to ensure that the Group’s follows its

financial course.

It contributes directly to business development, in particular

by providing accounting and tax advice to the Business

Lines, ensures compliance with legal and regulatory

requirements and contributes to the management of major

risks of the financial area for the Group, in particular by

ensuring that the regulatory framework is applied.

Within the Group’s Finance Department:

the establishment of accounting, tax and financial

information of Le Groupe La Poste is the responsibility

of the Group’s Accounting and Tax Department, which

notably oversees compliance with laws, regulations

and norms. Internal control procedures are also

implemented in the Business Lines and sub-groups as

part of first and second level controls intended to ensure

the reliability of the accounting and financial information

produced;

the Group’s Financial Control Department provides the

financial coordination for the Group, notably covering

financial planning and performance monitoring;

the Treasury and Financing Department provides the

Group’s cash management, simultaneously guaranteeing

it daily liquidity and long-term financial resources. This

Department is organised around a traditional division of

tasks between front office and back office services, which

ensures the security of financial transactions as well as

a “book of limits” that limits the risks taken on these

transactions, particularly in terms of the cost of debt and

the type of investments;

the Financial Information System Coordination

Department defines the governance and provides

supervisory services in this area, in connection with the

Business Lines and the Group’s Information Systems

Department, and manages the organizational and

financial frameworks of the Group;

the Financial Communications Department oversees

the Group’s compliance with its obligations as concerns

financial disclosure;

the General Secretariat Financial Officer accompanies

the management as a whole in tasks related to daily

operations, primarily human resources, ensures its

cross-functional missions, is responsible for the internal

communication of the CFO and represents management

in relations with the Group Audit and Risk Department.

2.3.2 Internal control and risk management procedures concerning the reliability the Group’s accounting and financial information

2.3.2.1 Group financial statements

Accounting principles and standards

The corporate and consolidated financial statements are

prepared by the Group’s Accounting and Tax Department

on the basis of the financial statements that are prepared

locally within each entity (Business Lines and subsidiaries)

and adjusted in line with Group accounting standards.

This Department also determines the consolidated Group

profit and prepares all the tax returns of the La Poste tax

group.

Each interim and annual closing gives rise to the

preparation of a detailed schedule and work plan,

documented via the audit and consolidation instructions

sent out to the subsidiaries and Business Lines. For interim

and annual closings, packages enabling an analytical

review of the accounting and financial information are

prepared at both the holding company level and at the level

of the parent company’s Businesse Lines. The Business

Lines and subsidiaries use consolidation software with a

standard financial statement format based on the Group’s

accounting principles manual. Intercompany transactions

are reconciled using a special system.

With regard to controls, the Group’s Tax and Accounting

Department analyses the difficulties encountered during

the production phase of the corporate and consolidated

financial statements in order to steadily improve the process

of producing and analysing the financial statements.

The Group’s Accounting Committee, comprised of all of

the accounting directors from the Business Lines and

sub-groups (holding companies), as well as La Poste’s

Accounting Committee, on which in particular the

accounting production directors from the Business Lines




res 13res A1

participate, meet monthly and quarterly respectively to

ensure the management and quality of separate and

consolidated financial information.

Internal quality control of accounting and risk management within the Group

The internal audit processes implemented by the Group’s

Tax and Accounting Department are intended to promote

the following objectives:

Company accounting principles and IFRS are known

by all those involved in producing the separate and

consolidated financial statements;

Group Executive Management ensures that they are fully

aware of all major options. The difficulties of applying

principles are thought through in advance so that they

can be applied without problems;

accounting and consolidation systems work properly

to ensure proper implementation of consolidation

procedures;

separate financial statements are adjusted to IFRS

ensuring that restatements are accurate;

all intercompany transactions are eliminated in the

Group financial statements;

all financial data necessary to establish and analyse

consolidated financial statements are accurately

provided in the consolidation system within the deadlines

set by the Finance Department;

the separate and consolidated financial statements are

properly supported and explained, backed by an audit

trail;

the consolidation system processes data ensuring

a reliable and complete company and consolidated

package can be establ ished within the Group

management’s deadlines;

the compilation of consolidation system data and

various information regarding operations in the period

allows fair and relevant reporting in order to present the

various components of the Group’s governance within

its deadlines.

Internal controls of accounting processes are largely

based on a detailed analysis of risks and formal processes

through detailed and explanatory closure procedures, Group

manuals and policies, memos on accounting principles

and policies distributed to the entities and detailed internal

procedures.

2.3.2.2 Group financial control

Organization and principles

The Group’s Financial Control Department provides

strategic management control for the Group. It ensures

standard management rules and policies.

The management control of the Business Lines and

sub-groups are in charge of their business sector. Within

their area of responsibility, they focus on Group guidelines

and work together with the Group’s financial control on

this. They also oversee for their business segment the

operational management control adopted in the regions,

which is carried out for each operational entity.

Le Groupe La Poste entities are structured in “centres

of responsibility”. A centre of responsibility is a level of

delegating authority within the business, to which objectives

and resources are allocated. These centres have all received

a delegation of authority to perform a specific assignment

within the Group’s overall strategy.

The models of responsibility may be defined based on the

following four criteria: capacity to take action on external

sales, capacity to take action on costs, capacity to quantify

services performed and capacity to take action on cash flow.

The coordination process is split into three major

management phases: a financial planning phase, an interim

and annual estimation phase and a completion analysis

phase, which give rise to correspondence between the

Business Lines and sub-groups and the Group Financial

Control Department. The results of each of these phases

are covered in a presentation to the Chairman and CEO and

to the executive Committee.

Internal quality control of financial information and risk management within the Group

In addition to the controls performed by the financial

auditors in the context of their ongoing activities on the

data collected by the Business Lines, support and sub-

group Departments, in particular during the financial

planning process and performance monitoring, the Group’s

Financial Control Department thus pursues the objectives

in terms of risk management under the "Risks and Internal

Audits within the Finance Function" (RECIF) project, in a

continuous approach. The latter in particular provides for

the implementation of risk mapping of this management

field.



2.3.3 Disclosure of accounting and financial information

Every month, the Chairman’s financial summary is

presented by the Group’s Chief Financial Officer to the

Executive Committee. This document summarises the

financial data of all Group entities based on the reporting

process, as well as physical and non-financial indicators.

This information is presented monthly to the Operational

Management Committee, which along with the members

of the Group Executive Committee, includes the key

operational managers of Business Lines.

The Statutory Auditors examine and certify the annual

financial statements published by the Group and make a

report to La Poste’s Audit Committee.

The Financial Communications Department is in charge

of reporting regular financial information to the various

external stakeholders, and organising relations with

external contacts, in particular credit rating branches,

the AMF, the French financial markets authority and bond

investors. The "Finance" section of the laposte.fr website

includes all the regulatory and financial publications of the

Group.

2.3.4 Summary and outlook

The governance of the financial management information

system was strengthened with particular consideration

of the scope of the direction of the national and European

regulation and Central Purchasing Department. The

Financial Information System Department proceeded to the

review of authorizations, roles and profiles of its integrated

management software package, thus ensuring optimal

separation of roles.

The Governance Charter of the Tax Department's

information system was established and distributed to all

users of the software group.

With regard to professional documentation, the Accounting

Department of cross-functional fields continued its project

to redesign and update its procedures initiated in 2012. First

and second level controls as well as the recommendations

of the internal audit service of the Group have been

incorporated into procedures and more generally within

the processes analysed.

Regarding plans for business continuity and recovery of

financial management, the Financial Information System

Department completed their terms of implementation

and the process of crisis management was defined in

partnership with the management of central information

systems.

The Risk Committee put on the record the objectives of

the RECIF project (Finance Risk and Internal Control), now

within a continuous process. A body co-chaired by the Group

Finance Department and the Group Risk Management

brings together, quarterly, representatives of the two

sectors.

The 2014 outlook is primarily oriented towards the

continuation of work begun in 2013 in terms of risk

management, especially on the topics of consolidation of the

operative continuity and recovery of activity, the finalisation

of work to overhaul its professional documentation, and

the implementation of action plans to control the risks

identified under the RECIF process.

2.4 Internal control and risk management systems in the Business Lines

2.4.1 Mail

2.4.1.1 Organization and resources

Mail Department

At a national level, internal audit and risk management

expertise is found within the Mail General Control, Audit

and Risk Department.

Reporting to the Mail General Secretary, it is responsible for

defining methods and resources, functionally coordinating

the management network of risks in relation to the

corresponding "risks and internal audit" of the Mail support

Departments, monitoring inspections and audits, ensuring

the monitoring of inspections and audits, and approving

and distributing the rules and regulations relating to Mail’s

business activities.

At a local level, each Mail regional operational director

has a team dedicated to risk management, the “quality”

campaign, safety and security, responsible development,




res 13res A1

plans of continued business activity, the spirit of service and

client commitments, this team is composed of:

a risk, quality, safety and environment director who

is responsible for assuring the operational director

that material risks of its entity and all the associated

units are identified and appropriately covered, and that

operations are carried out in compliance with applicable

laws, regulations and legal, environmental, ethical and

professional standards;

operational auditors responsible for carrying out second

level controls and helping branch managers to draw up

and monitor their risk control plans, taking part in the

control of the implementation of national programmes,

controlling approvals and participating in the roll-out of

the risk control policy. Some of these auditors ensure

compliance with competition rules and the standards of

the postal regulations defined by the ARCEP.

Furthermore, national operational Departments as well

as all Mail subsidiaries have appointed internal audit

correspondents charged with organising and relaying the

approach within their respective entities.

Mail’s policy is built on the principle of managerial

responsibility. At each of the three management levels

(head office, regional and branch), the manager has full

responsibility for controlling the risks within his or her

remit. The risk control plan, comprising a risk mapping, a

risk coverage plan that includes action plans and a control

plan, is integrated into each entity's management system

and is regularly monitored.

The Mail Department performs the self-assessment of the

maturity of the internal audit system in a decentralised

manner. National operational Departments and subsidiaries

carry out a self-assessment each year in order to report on

their system and identify areas of improvement.

Subsidiaries

Mail’s internal audit policy applies to the other subsidiaries

controlled by the Sofipost group, which itself comprises four

operational holding companies. With the support of the Mail

General Control, Audit and Risk Department, the internal

audit contacts within Sofipost and the operational holding

companies provide the necessary expertise to deploy this

policy.

2.4.1.2 Permanent internal audit procedures

At the Mail Department head office, the business control

plan is decentralised in each functional Department and

the associated control plan is coordinated during its internal

audit meeting.

At the regional level, the plan is developed and monitored

for each entity at the end of the identification process of

the entity's major risks. Each of the support Departments

at the regional operational Department implements

monitoring systems of its business by selecting the checks

to perform on its scope. They contribute to the identification

of emerging risks and the update of the risk control plan.

The Mail Security Department is in charge of the fight

against all malicious acts characterised by internal

or external fraud. To do this, it puts in place systems to

prevent and discourage these offences and, if necessary,

punish the perpetrators identified. The scope of action of

this Department consists in the protection of the product

that clients entrust to Mail, and also to protecting Mail’s

tangible and intangible assets.

2.4.1.3 Risk management procedures

The identification of the Mail's major risks is carried out via

individual meetings with each member of the Mail's General

Management Committee. The risks are then assessed

with a view to develop the mapping of the major risks of

the Mail, the risk owners working on the construction of

corresponding coverage plans.

The Mail risk, audit and general control Department

draws up and distributes the list of risks that it has

identified and analysed to all the regional stakeholders

and national directors to enable them to identify their level

of vulnerability to these risks and to adapt their mapping

accordingly.

In 2013, it enhanced the risk identification process by

requesting the regional operating Departments to benefit

from a closer perception of transactions and which is

consistent with the decentralisation programme of the Mail.

Within the subsidiaries, the parent company system is also

adopted. Each subsidiary prepares an annual risk control

plan, approved by its governing body. The operational

holding companies ensure that the system is properly

implemented within their associated subsidiaries and also

prepare a risk control plan that is adapted to their own area

of responsibility.



2.4.1.4 Internal control and risk management

procedures concerning the Group’s accounting

and financial information

Mail’s Accounting Department carries out its work on the

basis of La Poste’s accounting Department’s organizational

and operational principles so as to ensure the preparation

of Mail’s and the Group’s financial statements.

It has updated its risk mapping on six pre-identified cycles

(suppliers, fixed assets, customers, payroll, cash flows and

management accounting) and completed it with actions on

stocks and off-balance-sheet commitments.

Within La Poste, it contributes to the “Financial Risks and

Internal Control” approach.

2.4.1.5 Summary and outlook

In 2013, actions linked to risk management and internal

auditing aimed to accompany the Mail's decentralisation

programme by ensuring to secure branch managers.

Updating the professional literature and enriching the

features of their consultation tool helped improve the

support provided to branch managers regarding their

identification of their control environment work.

A training course for those responsible for transactions and

the quality of the facility is being finalised.

A second-level new tool for internal auditing has been

deployed to all regional operational Departments to

standardise checklists and simplify the analysis of

consolidated results at national level.

As part of the Group RECIF process (Financial Risks and

Internal Control), the Mail conducted specific actions

regarding the securitisation of receivables from staff and

economic issues surrounding claims.

2014 heralds a particularly constrained economic

environment, requiring an acceleration of the pace of the

transformation of the Mail as well as the strengthening of

the internal audit system related to decentralisation.

In this context, the actions of the "Risks and internal audit"

division of the Department of Risk, Audit and General

Control will aim to accompany regional operational

directions more closely as part of mastering their control

activities as a priority, which will be the drivers of their

performance.

2.4.2 Parcels (ColiPoste)/Express (GeoPost)


ColiPoste's risk management activities are based on

the Group's risk management Charter. It is managed by

the Quality and Sustainable Development Department

in conjunction with the Administrative and financial

Department and is placed under the responsibility of

ColiPoste's general management.

Each of the general managers of the GeoPost group is

responsible for setting up a relevant and reliable internal

audit system that fits into the organizational framework

defined by the Chairman and Chief Executive Officer of

GeoPost and complies with Le Groupe La Poste's Risk

Management Charter.

The Executive Management Committee includes risk

management and organization in its coordination of

operational entities.

The Accounts and Audit Committee of the Board of Directors of GeoPost monitors the effectiveness of internal audit and risk management systems.

Each subsidiary is managed based on the corporate

governance principles established by the Executive

Management Committee and legal bodies, in accordance

with the regulations applicable in each country.


The internal audit goals are driven by each ColiPoste

Department and generally factored into each executive’s

performance management. The Quality and Sustainable

Development Department coordinates the development

of methods and tools that are placed at the disposal of

managers.

Its three main systems to fight against fraud are:

- the act ions of the Directorate of Securi ty :

investigations conducted in the field make tracking

and identifying potential perpetrators of fraud

and spoliation of packages possible, based on the

statistical surveys of lost parcels by branch and




res 13res A1

region. If evidence is established, the perpetrators are

systematically brought before justice, with La Poste

as civil plaintiff. ColiPoste teams work in coordination

with the police and gendarmerie;

- the improvement of information systems: as part of

the management plan, ColiPoste develops information

systems to improve the traceability of packages and

allows for a control at each stage of their treatment;

- security and safety systems implemented at branch

level (sorting centres, ColiPoste branches).

GeoPost's operational subsidiaries organise their

business control themselves by using the delegations of

authority defined by the governance, and in compliance

with the rules set out by the GeoPost general

management. The coordination of level one internal audit

systems is thus placed under the direct responsibility of

the Directors of operational subsidiaries and of the legal

bodies organising these entities’ governance.

The main decisions made by the General Management

Committee and the European Operational Committee are

subject to reports. This formalises the GeoPost Executive

Management’s control over the Group’s strategic goals

and communicated to the relevant managers for

implementation.

The Executive Management Committee asks the GeoPost

Audit Department to examine the governance and

internal audit systems of subsidiaries. In this connection,

the Audit Department works with the legal Department's

assessors to evaluate the compliance of subsidiaries

with the laws and regulations that concern them.

The GeoPost Security Department coordinates the anti-

fraud system at the holding level and each subsidiary has

an organization identified with respect to security as well

as a security-related action plan. The objectives of this

action plan are integrated into the subsidiary's business

plan and monitored through a monthly report.

The GeoPost Department of Legal Affairs is responsible

for the dissemination of information on compliance,

particularly with regard to anti-money laundering and

anti-corruption regulations, and drives the adaptation

of reference guides in these areas with GeoPost

subsidiaries. Each subsidiary is responsible for enforcing

them in connection with local regulations.


Each year, ColiPoste's general management identifies

and updates its risks at the level of its Management

Committee. The Legal Risk Committee organises and

manages risks in the field of law, principally by reviewing

all legal risks and their action plans and preventing

those associated with developments in legislation or with

jurisprudences which may apply to ColiPoste activities.

ColiPoste's Risk Committee integrates legal risks into

human resources.

Regional Operational Departments draw up their risk

control plans that are then consolidated at corporate

level. The risks identified at Regional Operational

Departments are referred to the Department of Quality

and Sustainable Development at ColiPoste prior to

defining budgets and carrying out the annual update of

the national map.

Risk control plans are regularly monitored by the entities

that bear the risks themselves. They are reviewed

annually by the "Quality and Sustainable Development"

system and approved with the ColiPoste Management

Committee.

The risk analysis of GeoPost is carried out at the GeoPost

group level for events likely to affect the achievement of

the latter’s goal, and at a local level for risks relating to

the achievement of each subsidiary’s goals.

Prior to the budget drafting process and the process of

updating of the strategic plans of subsidiaries, members

of the General Management Committee compile and

analyse with subsidiary managers the potential strategic

risks related to activities placed under their responsibility

and liable to have an impact on the GeoPost group.

Mapping risks, a result of this process, allows GeoPost’s

annual audit plan to be established. This annual audit

plan is approved by GeoPost's Executive Management

before being presented to GeoPost’s Audit and Accounts

Committee, in conjunction with preparing the work of

GeoPost’s Board of Directors.




The setting-up and control of ColiPoste's accounting and

financial information are based on:

- procedures concerning closing, reconciliation and

control points, analysis of defect status as well as a

cost-based accounting manual;

- monthly publication and analysis of detailed

performance indicators;

- budget management for making sure that the actual

figures correspond to the commitments taken and

past results;

With respect to GeoPost, financial information is

processed on the basis of management standards

applicable in all the subsidiaries and of a shared

reporting and accounting system.



GeoPost’s Finance Department carries out management

control, centralised cash management, accounting and

tax assignments. The responsibilities of the financial

auditors are split by subsidiary and by major processes.

They include permanent monitoring reviews of the

financial processes of operational entities.

Each subsidiary has a dedicated financial and accounting

structure with resources that vary depending on size, and

each has its own accounting system.

The accounting and financial reporting between the

subsidiaries and GeoPost’s Finance Department

includes:

- with regard to financial control—monthly financial

reporting covering each component of operating

profit and identifying the risk factors that may hamper

achievement of the goal. Monthly reports on quality of

service and security, supplemented by weekly volume

reporting;

- with regard to accounting—monthly closing of the

consolidated financial statements, in line with

the accounting standards drawn up by Le Groupe

La Poste.

GeoPost’s Finance Department presents the Executive

Management Committee with a monthly report on the

financial position of GeoPost and its subsidiaries, and

analyses its performance vis-à-vis the budgetary goals.

Financial control reporting is sent monthly to Le Groupe

La Poste’s Finance Department.

When closing the financial statements, GeoPost’s

Finance Department checks the consistency of the

figures directly provided to it by each subsidiary. The

Boards of Directors at the subsidiaries approve their

separate financial statements, and the consolidated

financial statements are presented to GeoPost’s Board

of Directors.


In 2013, ColiPoste particularly enhanced its management

of activities by deploying training courses and awareness

raising projects in the following specific fields:

competition law, the transfer of funds via La Poste Retail

Brand offices and the prevention of verbal and physical

aggressions which may take place during delivery.

The design of standard models of risk management

plans were finalised for ColiPoste branches and centres.

ColiPoste appointed a dedicated focal point for

coordinating the business continuity plans of Business

Lines and their branches.

The main actions conducted by GeoPost in 2013 led

to carrying out specific audits on projects or themes

proposed in the Le Groupe La Poste risk mapping or that

of GeoPost. They particularly concerned sales, purchases

of transport systems, management of cash and payroll,

as well as issues related to the security of information

systems.

In addition, a new audit cycle was introduced in 2013 to

cover issues relating to the safety of transactions. This

new process includes the review of internal audit related

to secure transactions and the performance review

processes to ensure the safety of the goods, facilities

and safety of persons and compliance with standards

related to safety.

In addition, the cash audit cycle was enhanced this year

by a new audit methodology based on a self-assessment

questionnaire.

In 2014, the deployment system of risk management

plan models will be defined for all branches and

continued activity development plans will follow.

ColiPoste's financial information system will enhance the

start of production of the dematerialisation of supplier

invoices and the automatisation of control works and

analysis of monthly accounts.

GeoPost will continue to develop its audit cycles, and

deploy Le Groupe La Poste's information system security

policy to all its entities.

2.4.3 La Banque Postale


The global system of risk management of La Banque

Postale is structured according to the following three lines

of defence:

The operational Business Lines responsible for adapting

the risk management system.

La Banque Postale group's r isk management

guarantees the existence of a framework which is

generally favourable and homogeneous, allowing the

risk management systems in the bank to be defined and

developed.

Constitutive functions of the internal audit system tasked

with giving an independent assessment of the efficiency

of the risk control system in place.




res 13res A1

The risk management system in place at La Banque Postale

is based on:

a policy of risk management and a Charter of the

"Risks" sector developed by the La Banque Postale

Risk Management group: for all Departments of the

bank, these two documents set out the principles of risk

management and control that must be respected and be

subject to a collection of procedures;

the responsibility of all stakeholders: all employees

must ensure that the transactions they process as part

of their activity and the operations that they handle are

executed according to the procedures provided and with

the required quality level, they must be able to carry out

the correct command of their activity and their risks;

the adjustment of controls to the level of risk to be

managed: each manager analyses his/her risks and

sets up the control system required to control them

in compliance with La Banque Postale's external and

internal standards and rules;

the exhaustiveness of the scope of the control system:

this system covers all the business activities of

La Banque Postale. It applies to risks of all kinds,

to all employees acting in the name and on behalf of

La Banque Postale and to all the group's entities.

The internal audit system also applies to all essential

services that are outsourced.

The control and risk management system deployed

by La Banque Postale covers all banking and financial

activities, whether carried out in the bank in the strict sense,

in financial centres, in the contact points of the network of

La Poste Retail Brand or in subsidiaries constituting the

group La Banque Postale. This project also extends to the

provisions of essential outsourced services.

The outsourcing of certain provisions of services is placed

under the responsibility of the Department or the subsidiary

in charge of the activity and is subject to contracts which

meet the standards set by La Banque Postale.

Three bodies aim to organise and drive the risk

management of La Banque Postale:

the Audit Committee, part of the Supervisory Board,

monitors the preparation and control of the Bank’s

financial and accounting information, and assesses the

quality of internal audit and risk management;

the Risk Committee of La Banque Postale, led by the

Director of Risks, defines the bank's risk control policy,

examines credit, market and operational risks and

monitors the principal commitments. It also approves

risk control systems and is informed that they are being

complied with;

the Committee for the Coordination of Internal Audit and Ethics, ensures the coherence and efficacy of

the internal audit project, following the application of

ethics regulations and their compliance with regard to

regulatory developments.

Two Departments, also reporting directly to La Banque

Postale’s Management Board, coordinate the permanent

monitoring and risk management system:

the Compliance and Permanent Control Department is tasked with the management of non-compliance

risk as defined in Article 4 of Regulation CRBF 97-02,

as amended, namely the risk of non-compliance with

legislative and regulatory provisions, professional

and ethical standards, as well as the guidelines of

the Supervisory Board and the instructions of the

Management Board. It also ensures the coordination of

all second level controls;

La Banque Postale Risk Department is tasked with

the development of the risk policy which is included

in the management policies of operational activities,

of the evaluation and prevention of risks as well as

the permanent monitoring and consolidated risk

management.

The subsidiaries develop their own risk management

policy, which they have validated by La Banque Postale

group's Risk Department, guaranteeing the coherence of

all policies.


The internal audit of La Banque Postale is organised based

on the following provisions:

CRBF 97-02 Regulation, as amended;

the Prudential Regulation, principally including

the decree of 20 February 2007 relating to capital

requirements, Regulation 93-05 relating to major risks,

the decree of 5 May 2009 related to the management

of liquidity risk and Regulation 2000-3 relating to the

prudential supervision on a consolidated basis;

the General Regulations of the AMF (the French Financial

Markets Authority) for activities related to investment

services.

All of the ongoing control plans of the second level control

bodies are prepared using the risk map established by the

entities concerned.

At La Poste Retail Brand, the permanent monitoring of

banking activities completed in its points of contact, on



the base of the framework agreement which links it to

La Banque Postale, is organised as follows:

The branch managers of the Retail Brand ensure first

level controls by supplementing the self-control system

based on specifications drawn up by the Department of

Permanent Monitoring.

Bank operational auditors provide these controls in post

offices under the hierarchical responsibility of regional

bank representatives and the functional control of the

Department of Permanent Monitoring.

La Banque Postale has created control guidelines that

contain grids concerning each of the themes or operations

selected, as well as a form for tracking all the corrective

measures taken by branch managers after the weaknesses

are observed. These guidelines are updated twice a year

and the themes or operations chosen are in line with the

assessment of the risks.

In financial centres, permanent monitoring is managed

by the Department of Transactions at La Banque Postale,

under the functional authority of the Department of

Permanent Monitoring.

The first level control is based on self-control and

hierarchical control, the teams of Internal Audit

Departments and the compliance of financial centres

ensuring second level controls.

In business centres, first level controls, based on a control

plan elaborated by the Department of Businesses and

Regional Development, are ensured by the managers of

business centres.

With regard to second level controls, operational bank

auditors who carry them out rely on a control plan designed

by the Permanent Monitoring Department.

Fraud is monitored by La Banque Postale Risk Management

group, which coordinates the fight against fraud, either

directly or through more operational teams.

Since February 2013, to cope with the increase in fraud

and ever-changing techniques of perpetrators, a cross-

functional project, a major issue for the bank, is led by the

Secretary General of La Banque Postale and its governance

has been entrusted to the Department of Performance and

Change.

Anti-money laundering prevention and the fight against

corruption is, for its part, in charge of financial transactions

within the Security Department that is attached to the

Department of Compliance and Permanent Control.


Risk management is organised in accordance with banking

and prudential regulations.

The policy of risk management as well as the Charter of the

Risk Sector of La Banque Postale define, in compliance with

the Risk Management Charter of Le Groupe La Poste, the

risk management system.

Risk management includes the identification, measuring

and management of risks. The policy of risk management

also aims to determine the tolerance of risks compatible

with the strategy, the level of equity capital and the financial

trajectory of the bank.

The risks identified by each entity are described in mapping,

allowing La Banque Postale group Risk Management

Department to ensure the implementation of the system,

to conduct analyses, to supply exchanges with its sector

and to produce a consolidated view of risk at La Banque

Postale group level, of their severity and action plans both

underway and planned.

This identification is based on the development of risk maps

drawn up according to different types of risks identified as

credit risk, market risk and operational risk.




Responsibility for preparing and processing accounting

information lies with La Banque Postale’s Accounting

Department. Its work notably consists of establishing rules

and ensuring the production and distribution of quality

accounting information, on the basis of coordination of the

bank's accounting activities.

The Accounting Department defines and coordinates the

first and second level justification and control programmes

and follows their execution. Permanent control is ensured

in the following manner.

First level controls

The operational accounting services of financial centres,

national centres, the teams of the Department of Financial

Operations and Accounting Services and general resources

of the bank ensure first level control for accounting

information. Control programmes are reviewed on the basis

of the risk analysis that is carried out when checking and

preparing financial statements.




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Second level controls

The accounting auditors carry out second level controls

related to accounting information in the form of cross-

functional controls that make it possible to ensure the

quality and completeness of the first level controls

performed by the operational entities. The results of these

controls are documented by summaries, by cycles and are

supported by scorecards in place on all the control cycles

(retail banking accounts, market transactions and general

resources).

The Accounting Department also coordinates the

consolidation of companies which La Banque Postale

is composed of via special instructions. The accounting

information control process is formalised by means of

control manuals and is also based on procedures relating

to documentation supporting financial statements and the

drafting of closing packages as provided for in the audit

programmes.


La Banque Postale's risk management system developed

towards the constitution of three lines of defence as

recommended by international standards applied to risk

management in 2013.

The Department of Risks became the Department of

Risks of La Banque Postale group. This development

was accompanied with the distribution of a new risk

management policy and the implementation of the "risks"

sector of the Charter.

With regard to internal audit, La Banque Postale

experienced a significant development in its control system

with the creation of the Permanent Monitoring Department.

Related to the bank's Department of Compliance and

Permanent Monitoring, it henceforth ensures second level

coordination and management.

In addition, the permanent monitoring system of the

headquarters, branches, and essential outsourced services

was integrated into the Permanent Monitoring Department.

The number of staff dedicated to risk management was

significantly increased in the bank to attain 678 employees

at the end of 2013.

These actions were accompanied over the course of the year

by the implementation of numerous new training courses

from which the players involved in risk management and

internal audit management of La Banque Postale benefited.

In 2014, the Permanent Monitoring Department will revise

all control grids in order to adapt and cover each new

activity deployed by La Banque Postale. The organization of

controls will be adapted to the organization developments

of operational processes in place.

The self-assessments completed in the head office,

subsidiary and essential outsourced services Departments

will be transformed into control activities in order to

homogenise the system.

Moreover, La Banque Postale group Risk Department is

strongly mobilised with the aim to roll-out the programme

for the transition to the internal Basel II models, which is

accompanied by important training measures and will lead,

all things being equal, to a substantial saving of the bank's

equity funds.

Finally, in the face of growth of new kinds of fraud, work

which aims to strengthen operational anti-fraud systems

will be pursued. With this in mind, La Banque Postale will

be equipped with means of predictive analysis and will

reinforce its coordination with La Poste Retail Brand.

2.4.4 Retail Brand


Within the executive management of La Poste Retail Brand,

the Audit and Risk Control Department is responsible for

promoting and developing—at all La Poste Retail Brand

entities—the permanent monitoring and risk management

system in accordance with the major risks and operational

factors identified across its operations.

Operational risks included in the activities completed in

all points of network contact, and in particular in all post

officers, constitute the core scope to be covered using its

system.

The provisions provided by La Poste Retail Brand for

the account of different Business Lines of the Group

are governed by service agreements which define the

regulations applicable to matters of control in particular.

Regarding the partner contact point network of La Poste

Retail Brand, the agreements define the conditions in which

the activities are organised.

The governance of La Poste Retail Brand risks has a

dedicated body: the National Risk Committee. Previously

chaired by the Deputy Chief Executive Officer in charge of

the organization and resources of La Poste, the Committee

identifies major and operational risks of La Poste Retail

Brand, decides major guidelines for risk management and

follows up on risks following the implementation of the

permanent monitoring plan and the audit programme.



The organization and management of risks, at regional

level, is structured upon three bodies:

The Regional Risk Committee is responsible for

managing operational risks of non-banking activities,

analysing the activities or branches that are most at

risk and defining the action plans required for better

risk control.

The Regional Banking Control Monitoring Committee

manages operational risks for banking activities.

The Risk Committee in the Regional Support

Departments ensures the monitoring of risks included

in cross-functional activities and fields for its part.


Branch managers, sales managers in their capacity as line

managers and the staff of permanent monitoring bodies

of La Banque Postale respectively ensure first and second

level controls of banking activities.

Operation managers, and in particular branch managers, as

well as permanent monitoring bodies and specific control

bodies of the Retail Brand, are respectively in charge of

first and second level controls of non-banking activities

and fields.

In Support and Regional Support Departments, the controls

target cross-functional activities which pose risks: hygiene,

health and safety at work, road safety, the processing of

claims, monitoring of banking authorizations, purchasing

procedures, in addition to the compliance of facilities,

equipment and their maintenance in the real estate domain.

The "risk management" sector implements the permanent

monitoring plan prepared by the Audit and Risk

Management Department by adapting it to the specific

needs of the regions and communicates its results to

regional managers.

The Audit and Risk Management Department works in close

synergy with the Security Department of La Poste Retail

Brand in order to coordinate the actions implemented for

anti-fraud matters. In the banking field, these actions are

decided upon jointly with the concerned Departments of

La Banque Postale. The anti-fraud system is based on two

management and decision bodies which unite the experts

involved with La Poste Retail Brand and other Business

Lines of the Group. A specific Management Committee is

in charge of fraud related to mobile telephony. Its action in

2013 was particularly significant and caused a significant

decrease in the number of fraudulent acts.

The national investigation unit of La Poste Retail Brand is

dedicated to the detection of malicious acts with an origin

of internal fraud.

Finally, the La Poste Accounting Department established

tools and procedures to aid in the detection of wrongdoing

based on the analysis of accounting data from post offices.


The identification of major risks in La Poste Retail Brand is

carried out by the Audit and Risk Management Department

and relies on the expertise of the managers of strategic

activity fields, on executive managers and regional

managers. The National Risk Committee validates the risks

identified in this way and the mapping of La Poste Retail

Brand major risks is updated annually.

At the national level, each risk owner is responsible for

setting up risk management plans. New controls may be

requested and implemented to this effect.

The Regional Department is the priority level for preparing,

coordinating and implementing action plans. Each regional

La Poste Retail Brand director has observations prepared

by the various control bodies.

The general management of the La Poste Retail Brand

has completed this system by developing a comprehensive

business continuity plan that covers Metropolitan France

and the overseas departments.




The accounting and financial information control procedures

are drawn up by the Accounting Department at the La Poste

Retail Brand. They specify, inter alia, all accounting, tax, and

corporate regulations in force.

Revision files composed by the Accounting Department of

La Poste Retail Brand are implemented monthly by regional

accounting services and a national synopsis is completed.

These files:

list the current accounting work assigned to accounting

services, present the issues specific to each of these

works, the roles and responsibilities of each player and

the control activities implemented;

map closing procedures by listing balancing tasks and

their timing, to guarantee shorter closing deadlines;




res 13res A1

present the risks inherent in each process, the controls

put in place by La Poste Retail Brand to mitigate them

and the residual risks in respect of which action plans

are put in place;

list tasks and controls that must be carried out at

each level of the accounting process, formalise their

completion and thus facilitate review by management.

The local accounting units review the revision files to control

the financial statements of La Poste Retail Brand. This

control is checked at first and second level by the Regional

Accounting Departments and the head office of La Poste

Retail Brand’s Accounting Department carries out third

level controls on their work.


The three main guidelines adopted by the National Risk

Committee of La Poste Retail Brand, namely strengthening

the governance and accountability of managers, the level

of professionalism of players and the implementation of a

business continuity plan, were subject to significant actions

in 2013.

The "Risk management plan" approach has been

widespread across all branches, thus contributing to

greater accountability of branch managers in terms of risk

management.

In terms of the professionalism of players, managers and

those responsible for permanent monitoring have benefited

from training courses offered by the Risk Management

Group on risk management and the banking environment.

Training on the management of banking risks has also

been deployed to the 1,800 branch managers. Access to the

information system dedicated to the permanent monitoring

and management of risks was widespread among sales

managers.

In addition, a comprehensive plan for business continuity

of La Poste Retail Brand was established in 2013 and was

expanded with the help of specific training across teams

of local branches and with the help of the distribution of

a reference document as well as an operational guide to

crisis management.

In addition to these three major guidelines, the security

of information systems was strengthened by the

establishment of a Joint Committee between La Banque

Postale and the La Poste Retail Brand and a management

body of accreditations under the anti-fraud programme.

With regard to ethics, La Poste Retail Brand's system

notably included the bank signals concerning ethical

breaches.

In accounting and finance, important work on off-balance

sheet commitment, as part of the Group's RECIF (Finance

Risk and Internal Control) process, in particular led to:

deployment of a first level control of non-financial

information to verify the consistency of the database

information provided by the subsidiaries;

a second level control across players in the Department

of real estate Coordination and the Department of

Support Performance.

At the end of 2013, an Internal Audit Department and

Risk Management Department was created within the

Accounting Department of La Poste Retail Brand.

Work undertaken with La Banque Postale will result in

the organization of regional "risks and controls" bodies

common to banking and non-banking risks in 2014.

The major guidelines of the Risk Committee will always be

the priorities of 2014.

A "Risk manager" feature will be implemented at

Head Office Department level and at La Poste Retail

Brand Regional Departments, thus contributing to the

strengthening of the governance of risk management.

The control duties of La Poste Retail Brand and La Banque

Postale auditors will be coordinated to provide branch

managers with an overview of banking and non-banking

risks that may affect the scope of their activities and

increase their responsibility in this area.

The information system dedicated to permanent monitoring

will be extended to incorporate controls related to the fields

of real estate and human resources, thus contributing to

player professionalism.

Finally, the scope of action and ethics will be extended to

non-banking and communication ethics will be reinforced

across all employees of La Poste Retail Brand.



2.5 Internal control and risk management systems across business areas

In synergy with the Business Lines and the Group’s Risk

Department, the organization of Le Groupe La Poste in

risk management matters is structured within the cross-

business support functions, which particularly cover, in

addition to the accounting and financial areas, the following

key areas: legal affairs, human resources, security,

information systems, real estate and purchasing.

2.5.1 Legal affairs


The Group Legal Affairs and Compliance Department

ensures that principles of governance and legal compliance

are observed at the level of each individual entity. Its cross-

functional view and the daily work of men and women in the

"Legal compliance" sector which it leads, ensure optimal

preservation of the interests of the Group.

It provides legal expertise on the strategic files of the Group,

ensures the homogeneity of practices, the compliance

objectives vis-à-vis its regulatory environment and its

development and has the duty to alert of any major legal

risk, thus contributing to the economic performance of the

Group.

The Group Department of Law and Compliance is

responsible for the management and monitoring of

compliance programmes, in particular, the competition

law compliance programme within the Group, as defined

in accordance with the expectations of the Competition

Authority. Actions conducted are subject to an annual

review.

Finally, the Group’s Legal Affairs and Compliance

Department ensures that the Group fulfils the commitments

and guarantees granted by La Poste to its shareholder



The Group Department of Law and Compliance designs the

legal architecture for the establishment of delegations for

the Group, monitors their up-to-dateness in collaboration

with the internal audit of the Group, and assists Business

Lines Departments in the development of their own sub-

delegations.

The legal compliance of the Group is managed through

the development of reference guides, the action of

corresponding networks of "legal compliance", "competition

compliance" and "off-balance sheet commitments" in the

Legal Departments of Business Lines and subsidiaries, and

its information system that integrates control tools.

The reference guide dedicated to anti-money laundering

and anti-corruption measures and assistance given to the

Ethics Group in its efforts to prevent corruption participate

in the effectiveness of the anti-fraud control group.


Updating the mapping of legal risks of the Group, which

results in a census of the legal Departments of business

Lines and subsidiaries, is controlled and approved by the

Group Department of Law and Compliance as part of its

Plenary Committee. It is then presented to the Group Risk

Committee before being sent to its shareholders: the French

government and the Caisse des Dépôts et Consignations.

The Group Department of Law and Compliance relies

on two software packages to manage risks: the first for

the campaign to update the mapping, the second for the

monitoring of the risks linked to corporate, business

and governmental legal disputes. This software package

monitoring risks linked to legal disputes contributes to the

internal accounting control of services.


In 2013, the Group Department of Law and Compliance

updated certain existing reference guides with regard to the

penal responsibility of heads of branches and discrimination

risk and deployed new compliance reference guides, in

particular in the fields of corporate business responsibility,

the fight against laundering and merger and acquisition

transactions from a competition point of view. An addition

to reference guides with regard to corporate law and

governmental law was also edited.

It also conducted reliability controls and evaluated the

information related to the terms of office and equity

investments. A second level annual control was conducted

in partnership with the Group Financial Department

on the subject of census procedures of off-balance

sheet commitments within the Group. In addition, the

"Competition" Charter of the Group was signed by the

Chairman in November and is in the course of deployment.




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Finally, it formalised its business continuity plan and

implemented the process of establishing the list of Group

insiders.

In 2014, the Group Department of Law and Compliance

will pursue work related to the monitoring process and

the control of off-balance sheet commitments and to the

perfecting of its information tool in order to improve its legal

risk management in a continuous manner.

2.5.2 Human resources


The Group Human Resources Department guarantees the

values, principles and rules that are the foundations of the

corporate social responsibility of Le Groupe La Poste.

In this connection, it is tasked with defining human

resources rules, in particular for the entire Group,

guaranteeing their implementation as well as compliance

with rules and agreements that apply to all postal workers

linked to the Group's strategy and values, which will be

deployed and adapted to the various Business Lines and

cross-cutting activities.

The main principles of these policies also apply to Group

subsidiaries.

The Group Human Resources Department provides design

and management of key strategic directions and policies of

the various areas of human resources: employment policy,

professional development and skills development, training,

wage policy, actions and social relations, governance of the

information system of the field, work organization, health

and safety in the workplace, etc.

It manages and controls the implementation of these

Business Lines and cross-functional activities. It defines

the rules and develops common systems and tools for all

the Business Lines and is responsible for social reporting.

It additionally took the responsibility at the end of the year

for the Group Institut du Management project.

The Group Human Resources Department manages the

employee relations of Le Groupe La Poste parent company,

and in this capacity, negotiates the agreements that apply

to the entire scope, verifies the implementation and

compliance with these agreements.

It is a single point of contact for external institutional

partners on HR matters.

Lastly, it organises and coordinates the management of

risks of the human resources area through the Committee

of the Human Resources Department in order to provide

information and decide on the establishment of preventive

or corrective measures when this proves to be necessary.

It performs its duties as part of its functional authority on

the entire HR activity of Le Groupe La Poste.


With regard to compliance, the Group Human Resources

Department defines the principles of HR management

and contractual policy, manages legislative and regulatory

developments in regulations in coordination with outside

organizations (e.g. URSSAF, Tax authorities, etc.) with

respect to regulations specific to the Group. It is the Group’s

representative at the political and regulatory level with

external bodies and organizations in the field of human

resources.

It determines the common framework (policies, rules,

procedures) within which the Business Lines adapt these

policies to their scope and define the procedures for

implementing changes in laws and regulations as well as

the national or local agreements within their scope.

The Group’s Human Resources Department coordinates

La Poste’s occupational health and safety policy and

advises the Business Lines in its implementation. It defines

La Poste’s operational procedures for occupational health

in compliance with current regulations.

The Department coordinates La Poste’s Occupational

Health Observatory and the systems for cross-functional

prevention, adapting them to the specific features of the

Business Lines.

The Group's Human Resources Department also acquired

an internal management system of various projects initiated

within the framework of an agreement on the Quality of

life at work, allowing a consolidated vision of the effective

deployment of measures decided within the Business Lines

to be obtained.




The mapping of major risks relating to human resources is

approved by the Human Resources Projects Committee, and

then presented to the Group’s Risk Committee.

For each of the major risks identified, risk owners and

contributors are named, formal action plans established

and then tracked by the Human Resources Coordination

Committee. A risk control plan was prepared.


The Group's Human Resources Department signed the

agreement on Quality of life at work on 22 January 2013

following the commitments made in the framework of the

"Major Dialogue."

This agreement established an element structuring the

action of the Group's Human Resources Department

throughout 2013 in terms of the organization of social

dialogue—as agenda topics—and actions implemented.

Successes and areas for improvement were shared with

the trade unions who were signatories of the agreement

in two trailing commissions. Accomplishments include

the significant increase in the number of postal workers

receiving training or significant improvement in access to

an occupational health-care professional.

A change management method was defined and

implemented and a social alarm created.

The agreement also defined topics and the agenda for

social dialogue.

Of the four negotiations opened during the year, those

relating to teleworking and the contract of generations

have resulted in agreements and exchanges will continue

on other topics.

The action of the Group's Human Resources Department

also focused on the transformation of the relationship in

human resources, with the appointment of 1,100 close

human resources correspondents, and on professional

development, aiming to inform each postal worker of

possible careers within the Group to allow him/her to build

his/her own plan. Several very concrete actions which

serve this ambition were implemented: an employment

exchange open to employees of subsidiaries, a definition

of the development route within the Group and Business

Lines, and a holding of the first Professional Development

Week in October 2013.

In 2014, the Group's Human Resources Department plans

to continue its work based on two interrelated principles:

Quality of life at work of each postal worker and the quality

of service provided to customers of Le Groupe La Poste.

In terms of efficiency and control activities, exchanges with

external branches regarding subrogation will be automated

and the monitoring of financial aid on subsidised contracts,

especially for future jobs, is now easier.

In addition, the Group's Human Resources Department

bears the prime strategic project management of time

and activities, pooled across La Poste parent, which

is a significant financial and organizational challenge.

Governance will be shared with the Departments of the

Business Lines concerned and the financial management

of the Group.

This project aims both to concentrate financial efforts of

the Group in this area and to satisfy a request by postal

workers at the "Major Dialogue": to have reliable, updated

and accessible information on their rights to leave.

It will also allow employees in the sector of human

resources to be focused on their support missions,

skills development and support for the definition of the

development route and professional development of postal

workers.

The attention to each postal worker is indeed, more than

ever, a fundamental principle of the action of the Group's

Human Resources Department in 2014.

This principle aims to enable each postman to look calmly

to the future, by allowing him/her to anticipate the changes

that will meet during his/her career at La Poste and

assisting him/her over time, while allowing La Poste to

meet its legal and regulatory obligations as an employer.

This ambition of Quality of life at work throughout his/her

career is shared throughout the Group and supported by the

"human resources" community and managers alike who

will be trained in the human dimension of their duties since

taking office.

It covers many areas of agreement on the Quality of

life at work, relating to health, training or professional

development: adapting his job and his position to his

abilities, exploring the possibility of learning about Business

Lines within the Group and training in order to apply them.




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2.5.3 Security


The Group’s General Security Department ensures

compliance with the policies laid down by the Chairman and

CEO and the Executive Officer as regards general security in

order to protect the Group's human, tangible and intangible

assets. It provides executives with a comprehensive view of

the degree of coverage of the various action plans against

threats and proposes measures to be undertaken to

improve the protection of La Poste and its executive.

The Group's General Security Department guarantees the

working status of the crisis management systems, the

consolidation of business continuity plans and business

recovery plans of the Group. It coordinates the actions to

be implemented in these systems.

It ensures the Group's General Security Department's

management of the information system, the definition of

security policy on information systems and the functional

management of the observatory of information systems

security.

It leads cross-functional work against fraud involving

identity theft, managing IT partners and monitoring the

development of forms of fraud. Governance systems for

reporting incidents is provided by this Department.

The Group General Security Department represents

La Poste across police authorities, defence and civil security

and operates under the central administrative powers

granted by La Poste supervisory authorities in the areas of

defence and operators of vital importance. In this context,

the Director of Group General Security is a Group security

officer and Deputy Group Managing Director of the Group for

the authorization of La Poste operators of vital importance.

The Director of Group General Security is a member of the

Group Risk Committee and the Secretariat of the Group

Security Council, chaired by the Executive Officer.


The Group's General Security Department has an

information system and multi-criteria analysis system

which contribute to the identification, evaluation and

treatment of all weakness in general security.

The operational management of fraud is the responsibility

of the Business Lines. The Group's General Security

Department operates—at their request and in subsidiarity to

their action—with a view to coordinate the cross-functional

actions and to define common policies in the Group.

The Group’s General Security Department functionally

manages the security observatory to strengthen the anti-

fraud system.

In terms of crisis management, the methodological

framework established for the whole Group is kept in

operational condition with regular practices. The Group

is also a stakeholder in operational crisis management

systems run by government authorities (specific plans and

exercises). Furthermore, national crises that do not fall

under national sovereignty (Vigipirate, etc.) are under the

responsibility of the director of the Office of the Chairman

and Chief Executive Officer, with support of the Group's

General Security Department.


The Group’s General Security Department conducts

permanent oversight of events that are liable to have a

significant impact on the Group's security policy and more

particularly on topics related to the protection of employees

and the corporate image.

It collaborates, from the project design phase, with

managers and process leaders to incorporate general

security issues into developments of their operations.

The Group's General Security Department assists the Group

Chairman in organising, ensuring the continued operation

and moderating national crisis management systems.


In 2013, the Group's General Security Department continued

to deploy the management tool for plans for business

continuity of the Group and implemented a governance with

regard to crisis management and business continuity.

Implementing the programme to assess the security of

Group websites will be continued with a special focus on

La Banque Postale websites.

It implemented, at the request of the Executive Committee,

governance on the safety management of the transport of

dangerous goods (all Business Lines).



In 2014, the fraud prevention system will be strengthened

with the creation of an information system which shares

and treats fraud procedures, and deploys pilot sites in

the Business Lines of systems which detect falsified

documents.

The security of information systems and systems against

cybercrime will be strengthened by the deployment of an

information system perimeter protection architecture.

2.5.4 Information systems


The Group's Information System Department aims to lead

strategic activities and monitoring of the Group's information

systems in line with the strategic plan. It illuminates the

general direction of technological developments considered

to be major challenges for the Group, defines common

standards and develops inter-Business Lines on resources

associated with information systems (human resources,

financial and technical systems). In addition, it manages

the strategic transformation programme of the Group's

information systems jointly developed with the Departments

of information systems of Business Lines and corporate

business. The governance and economics of information

systems is part of the logic of the accountability of Business

Lines that also applies to the IT sector.

In coordination with the Group General Security Department,

which is namely in charge of defining the security policy of

information systems and to manage IT security risks, the

Group's Information System Department contributes to

the implementation of the information systems' policy of

security.


In the context of the Group’s information systems security

policy, Charters for all users and directors with IT duties

institute information system security rules and specify each

party’s roles and responsibilities.


IT risks are identified and monitored as part of development

works and mapping the major Group risks.

A set of measures was put in place to protect information

systems from malicious attacks. Therefore, the Group's

telecommunication and data exchange network is under

constant surveillance (an observatory operates 24/7)

and is subject to state of the art preventative measures.

In addition, La Poste is equipped with a CERT (Computer

Emergency Response Team) in its observatory.

In addition, in order to reduce the risk of its information

systems being unavailable after a major disaster, whether

to hardware or software, La Poste and its subsidiaries are

introducing business continuity and business recovery plans

in applications deemed critical.


In a changing regulatory environment, the Correspondant

Informatique et Liberté (Computer and Freedom

Correspondent) in 2013 initiated a new programme to raise

awareness of all internal stakeholders to strengthen the

consideration of data protection into the design of services.

The Commission Nationale Informatique et Liberté (National

Computer and Freedom Commission) has been associated

with the definition of this programme in order to share

expertise and experiences.

A new work environment, the objectives of which primarily

include the incorporation of the Group's security guidelines,

was rolled out within the corporate entities.

Finally, the Group's Information Systems Department, in

collaboration with all Information Systems of Business

Lines Departments and the Group's General Security

Department, initiated discussions in 2013 on the

transformation of information systems as part of the

strategic plan of the Group, and on the following topics:

the workstation of tomorrow, the use of architectures or

outsourced applications for messaging and collaboration

solutions, convergence and sharing of infrastructure

between Business Line and Corporate Business

Departments as well as the development of services related

to networks and telecommunications within the Group. This

work will be pursued in 2014.

2.5.5 Digital field


Le Groupe La Poste's Digital Department, created on

1 October 2012, is tasked with stepping up the Group's

digital transformation.

Its main duties are implementing the management and

governance of Le Groupe La Poste's digital technology

while suggesting the strategy in this field. It is committed

to the completion of business objectives related to digital

technology.




res 13res A1

Pioneer of digital innovation within the Group, it contributes

to the identification and implementation of partnerships and

acquisitions in the digital field and to the design of new

offerings.

It brings its expertise across different Group Business Lines

in particular by helping to implement their changes and

developments of ways of co-operation.


The General Secretariat of the Group's Digital Department

is responsible for the implementation of the internal audit

and risk management system.

Based on the Group's Risk Management Charter, and

particularly in connection with the Financial Performance

Department, the Technical Department and Le Groupe

La Poste's Digital Department, it is tasked with defining

the tools and methods of the service.

The internal audit procedures are currently being defined.

After an analysis phase of the internal environment of

the Group's Digital Department, an identification of risk

areas and their evaluation will allow action plans to be

implemented in the first half of 2014.

As part of the stabilisation of the financial processes of the

Group's Digital Department, the internal audit procedures

and risk management procedures regarding financial and

accounting information will be specified in conjunction with

the Finance Department.


In 2014, the Group's Digital Department will complete the

first version of its risk mapping. It will be shared within its

Management Committee and will be updated annually. This

will also occur for the risk monitoring plan.


2013 is a year of construction for the Group's Digital

Department which now includes six months of effective

operation. The fundamental principles of the system have

been identified; it will be implemented and deployed in 2014.

2.5.6 Real estate


The real estate division manages its risk management

and internal audit systems and adapts them to all its real

estate business activities, including those carried out on its

account by the Group real estate Department in accordance

with the contract that they have signed.

It articulates its internal audit and risk management system

as follows:

the CEO of Poste Immo, Director of the Group's real

estate, defines and guides the strategy. He is responsible

for the means implemented to develop a secure

operation and monitoring of internal audit;

the members of the Audit Committee of the Poste Immo

Board of Directors evaluate the identification procedures

and the risk management internal audit procedures in

place. They annually review the mapping of major risks

and proceed each semester to the monitoring of relevant

action plans;

members of the Management Committee, chaired by

the CEO of Poste Immo, validate the organization of risk

management, the mapping of major risks and associated

actions, the organization and the implementation of the

internal audit system;

the financial and accounting teams guarantee expertise

and control, managing the budget process and the

preparation of financial statements;

the Audit and Risk Control Department is responsible

for the process of risk management. It develops the

Poste Immo mapping and its risk management plan and

contributes to the completion of the Group's mapping;

the Department of the Quality of Internal Audit and the

Work Environment is responsible for developing internal

audit processes, facilitating the integration of the

approach into the projects and identifying sources of risk.


The organization, skills, systems and standards (procedures

and activities) are the base of the internal audit system

of the real estate division. The organization combines

Operational Departments (real estate Business Line) and

the Functional Departments (supports).



The management system of the real estate division is

primarily based on a division of powers and responsibilities

which are clearly defined by the organigrams. In order

to allow the various operational teams to complete their

objectives, the delegations of power, time delegations or

recurring delegations are implemented and regularly

reviewed by the "Internal Audit" division of the Quality

Department, the Internal Audit Department and the work

environment.

The regulations on the segregation of duties were

implemented in the organization and its information system.

Processes and procedures are revised when necessary to

remain consistent with the objectives.

The control plan activities takes into account important

risks, including operational, financial and compliance

risks, and contributes to the help of managers in the

implementation of the most relevant controls.

The formalisation of an internal environment file allows

each responsible entity to manage its control environment.

For anti-fraud, an ethical guide was given to each employee

in the name of prevention and they are provided with an

independent ethics guide. In addition, training sessions are

deployed across the most affected populations and risk

mapping of fraud has been developed by the division of

Financial Management.


Each year, the Poste Immo general management entrusted

the Audit and Risk Control Department with completing the

risk mapping on the entire scope of the real estate division

and making regular reports to the Poste Immo general

management on the implementation of risk management

plans.

Managing Directors, their immediate deputies and the

"Risks" correspondents within the Head Office Department

and Regional Departments, the Executive Committee and

the Audit Committee of the Board of Directors participate

in the updating of the risk mapping.

The business continuity plan and crisis management

plan are defined at a macro level for the unit consisting

of Poste Immo, its subsidiaries and the Group real estate

Department.




The internal audit procedures relating to the preparation

and processing of financial and accounting information

are implemented and documented by the Finance and

Purchasing Department. These documents serve as a

reference guide for financial reporting of the real estate

division.

The risks inherent to accounting and financial activities are

analysed within the framework of risk mapping and are

managed by the internal audit systems pertaining to the

most significant risks.

The reliability of financial information is provided by

inspections carried out in the shared real estate service

centre, then at headquarters, using consistency controls

made by the teams in charge of centralising accounts.

In the closing financial period, accounting information

is subject to review with the Department of Accounting

and Financial Control of the Group. The interim financial

statements are approved by the Audit Committee and the

Poste Immo Board of Directors.

The accounting and financial information is drawn up and

controlled in accordance with applicable standards by Poste

Immo, both relating to legal and internal Group standards.


In 2013, the internal audit process was strengthened,

which has contributed to a better understanding of risk and

control optimisation.

Thus, the "operational risk—controls" matrices were

established with real estate Management Process

Managers, Asset Management Managers, Purchasing

Managers, Accounting Managers and Management Control

Managers. The concern of these matrices is to highlight risk

areas and clarify goals.

As part of the RECIF process of Le Groupe La Poste (Finance

Risk and Internal Control), the Accounting Department and

the "Internal Audit" division of the Department of Quality,

of the Internal Audit and the Work Environment have been

working together to strengthen control systems for the

disposal of non-real estate assets with net book value of

zero and claims management. This has contributed to the




res 13res A1

improvement of the maturity of risk management systems

in the field of accounting and finance.

The Poste Immo Purchasing Department has opted for

the use of the tool for internal management control of the

Central Purchasing Group to secure all of its operations. As

part of this project, internal audit files were developed on

the purchasing and procurement process.

In 2014, the Department of Quality, Internal Control

and Work Environment will monitor ownership by all

Departments of the real estate division of its plans for

business continuity and crisis management.

The "Internal Audit" division will develop and optimise

control activities in order to maintain an acceptable level of

risk that may affect the completion of the Operational and

Functional Departments' objectives.

The internal audit system will be reoriented, thanks to

the definition of a comprehensive internal audit policy, the

development of a reference guide of common internal audit

and ultimately the implementation of an efficacy measure

of controls by means of indicators and a self-evaluation

questionnaire complementary to that of the Group and

adapted to the situation of Poste Immo.

This internal audit development will cause greater manager

autonomy in the execution of operational controls and

additionally a reliability of the reporting of internal audits

of each Department.

2.5.7 Purchases


The Central Purchasing Department represents

"Purchases" for the Group. In this capacity, it coordinates

a global policy as regards purchasing and suppliers

monitored at national level and defines the common rules

and principles governing Group purchasing.

The Central Purchasing Department defines the common

risks for any purchasing sector. It identifies events that may

affect the organization or the activities of the function and

inspires the internal audit policy based on the procurement

strategy, the recommendations of La Poste Purchasing

Committee and the statutes and regulations.

The Central Purchasing Department implements the

internal audit system for purchases made on behalf of

support and cross-functional entities and for the whole

Group when its buyers prepare contracts that apply to the

whole Group.

Coordination, organization, monitoring and evaluation of this

internal audit system on the perimeter of purchases made

by the direction of the Central Purchasing Department is

carried out at the Purchasing Risk Management Committee

that unites, on a semi-annual basis, all Department

managers and managers of the expanded Purchasing

Committee Department.


The operational management of the internal audit system

enters into the scope of the Central Purchasing Department

for purchases made on behalf of support and cross-

functional entities, or on behalf of the Group in the case of

the drawing up of Group contracts. With regard to internal

audit systems of purchasing sectors within the business,

they fall under each Business Line Department. To this end,

tools and methods are provided by the Central Purchasing

Department.

The Central Purchasing Department provides its employees

and purchasing Business Line Departments with a

collection of internal audit procedures which is regularly

updated in the light of developments of purchasing risk

mapping and in particular takes purchasing regulations into

account. It in particular proposes control grids to ensure the

completion of first and second level controls.

The purchasing internal audit activities are integrated into

the Group's internal audit reference guide.

The Purchasing Department's anti-fraud system is

primarily based on the purchasing ethics reference guide,

which aims to enforce the rules of professional conduct,

ethical principles and commitments to the responsible

development of Le Groupe La Poste by all players involved

in the purchasing process, as well as the strict separation

of functions integrated into its information system.


The identification of common and major risks of the

"purchasing" function, the evaluation of their impact at

Group level and their low probability adverse scenario, in

addition to taking the objectives of the function into account,

lead to the development of risk mapping by the Central

Purchasing Department.



These risks are listed in six categories, namely risks

related to non-compliance with procedures, the operation

of Purchasing Departments, supplier relationships,

contractual and buyer issues and, finally, the risks of

damage to its image as a result of a failure to follow the

Group’s responsible development policy.


In 2013, two modules dedicated to risk management were

incorporated into the training curricula of buyers.

In order to limit "supplier" risks in the IT field, discussions

were held with the management of the Group's information

systems and the Audit Department and the Group risks

concerning the terms of reversibility of IT contracts. These

led to the revision of the standard contracts of computer

technology and telecommunications. More generally, with

regard to these risks, the implementation of the credit

rating tool in 2012 was considered effective this year.

During the first half of 2014, the subsidiary Poste Immo will

establish the discussions initiated in 2013 on the subject of

adapting to its internal audit software needs in force at the

direction of central purchasing by deploying this solution.

Finally, the global and cross-functional view of the main

suppliers of the Group will be enhanced.

2.6 Periodic controls

The purpose of internal auditing is to periodically assess the

efficiency of major processes, and the effectiveness of the

Group’s internal audit and risk management.

To attain these objectives, it uses structures that implement

working methods.

2.6.1 Structuring of internal audit services

Given the size and diversity of the Group's businesses, the

audit function has been decentralised since 2003 with:

in each Business Line—Mail, Parcels-Express, Retail

Brand, La Banque Postale—an Audit Department placed

under the authority of the director concerned;

specialised audits in fields requiring specialised

knowledge, such as IT and real estate, have been

placed under the authority of the Executive Officer of

La Poste and the Chief Executive Officer of Poste Immo

respectively. The two officers are likely to carry out audits

across the whole Group, while also providing support to

the Business Line audit units on issues relating to their

area of expertise;

apart from its audit work, which is generally strategic,

Group audit, which reports directly to the Chairman

and Chief Executive Officer of La Poste, ensures the

coordination of audit programmes, the functional

management and professionalism of the internal audit

network, and liaises with La Poste’s governance bodies.

2.6.2 Working methods

Internal auditors comply with professional standards (1),

defined by the IIA (Institute of Internal Auditors).

The IFACI renewed the certifications of four out of the

Group's seven audit units in 2013, based on the internal

auditors’ professional guidelines (RPAI). They were the

Group audit, Mail audit, IT audit and the Poste Immo audit

units.

In 2013, the General Inspectorate of La Banque Postale

has been subject, for the first time, since the creation

of the latter, to an audit. The task, carried out by the

Le Groupe La Poste audit, was to evaluate and monitor

the effectiveness of policies, systems and procedures

put in place under the CRBF 97-02 regulation and more

particularly Article 38, as well as professional standards in

banking and auditing.

(1) Distributed in France by the French Institute of Internal Audits and Control (IFACI).



Appendix

res 13dix A1

The task concluded that the operation of the General

Inspectorate broadly complied with professional standards

and regulations that apply to it.

Each internal audit unit draws up an audit plan based on

the risk mapping of the entity to which it reports. These

plans are finalised, and their implementation monitored

by a collegial body (the Internal Audit Liaison Committee),

which brings together all heads of audit units, the Head

of Group Risk and the Group Director of Taxation and

Accounting at a meeting every two months that is chaired by

the Group Director of Audit and Risk. The consolidated audit

programme for the year, established by the Group audit

unit is first validated by the Group Executive Committee

and then by the Le Groupe La Poste Audit Committee. The

results of this programme are presented to the Company's

management bodies and the Le Groupe La Poste Audit

Committee.

2.6.3 Business activities

The 218 audits carried out in 2013 by all auditing services

enabled a review of operations, processes and major

projects so as to establish that these complied with their

stated aims and objectives and produced the expected

results in the allocated time frames and budgets.

Based on their observations, the auditors, of which there

were 189 in 2013, made recommendations and monitored

progress in implementing actions taken by management

and, as concerns Group audit, by the Executive Committee

in the form of a statement of decisions from the Chairman

and CEO.

The Group audit conducted 19 assignments in 2013, which

concerned the systems of governance, risk management,

the implementation of strategy and major processes, in

particular in the accounting and finance area. Its Director

reports his conclusions and recommendations to the

Group’s Executive Committee and, once a year, presents

the Internal Audit Department’s results to La Poste’s Audit

Committee. The Audit Committee has the broadest powers

to request a particular audit report, recommendations

arising therefrom and management responses.

The Group’s Risk and Audit Director also ensures that

the audit procedures are consistent within the entire

Department, that the auditors are professional in their work

by organising initial and supplementary training courses for

them, and that best practices are distributed and standard

applications are applied.

The Director participates in all meetings of La Poste’s Audit

Committee and maintains frequent contact with the Group’s

Statutory Auditors.

Appendix

Board members’ biographies and positions held

Directors’ biographies and terms of office

As required by Article L. 225-102-1 of the French

Commercial Code, a list of positions held by Directors in

any company appears below. This information is correct to

the best of the Company’s knowledge.

Régis Blanchot has been a member of the Board of

Directors of La Poste since 1 January 2009. He was born

in 1967, and began his career at La Poste as a Controller

at the Paris financial centre in May 1987. He has been the

team leader at this centre since 1995. He was a full-time

employee of Sud-PTT with the status of Federal Secretary

from 1999 to 2008. He re-assumed his position as team

leader in September 2008.

Current term of office within Le Groupe La Poste


Éric Delzant has been a member of the La Poste Board of

Directors since 26 September 2013. Born in 1957, he is a

graduate of Sciences-Po and a former student of ENA (1986-

88, Michel Montaigne Class). Éric Delzant’s career path has

included alternating positions within central Government

(Secretary-General of the French government, Ministry of

Finance, and in particular, at the Ministry of the Interior,

where he was an Advisor to the Minister's Office between

2000 and 2001). He has held regional responsibilities within

local authorities (Advisor to the Chairman of the General

Council, then Managing Director of services for the Pas-

de-Calais Region from 2004-2009, and Managing Director

of the Bordeaux Urban District from 2009 to 2012), and

principally within prefectural authorities. He was specifically

Sub-Prefect of Saint-Girons (Ariège), and Provins (Seine-

et-Marne) and Prefect of Haute-Corse (from 2001 to 2003),

then of Ariège (from 2003 to 2004), and more recently, of the

Auvergne Region (2012 to 2013). Since 12 August 2013, Éric

Delzant has been the inter-ministerial delegate for regional


Chairman's report on corporate government, internal control procedures and risk management in respect of 2013AppendixA1 A

planning and regional attractiveness. He is also in charge of

the State Territory Equality Commission (CGET).

Current terms of office within Le Groupe La Poste


Florence Derouard was elected by the employees on

16 November 2010 from a list sponsored by the SUD-PTT

trade union. She was born in 1963, and holds a bachelor's

degree in law. She joined the PTT in Paris as a Controller

in 1987. After a period in sorting, she worked behind the

counter (as well as at the till and in accounting). In 2000,

she was transferred to the Payroll Department in Rouen,

working on staff pay and family allowances, before moving

to Centre interdépartemental de gestion administrative de

paie (the inter-departmental centre for administrative

management and pay).



Bernard Dupin was elected by the employees on


union. He was born in 1951. After studying law, he left the

country in 1976 to teach at the Collège Français in Montréal.

In 1982, he was a PTT inspector at the main tax receipts

office at Paris Louvre, then at the Financial Services

Department in Paris and, in 1990, Montpellier Rondelet.

Working as a trade unionist, he became Secretary-General

of the CGT labour union's departmental union for postal

and telecom business in Hérault, then member of the

Federal Bureau for international business until 2011. He

was elected to the European Post and Logistics segment

of the UNI Global Union International Federation and

member of the Management Committee for the executive

segment, which includes 157 trade unions representing

2.5 million employees around the world and is a member

of its Management Committee. Bernard Dupin, now a senior

executive at La Poste, is a member of the regional Economic

and Social Council of Languedoc-Roussillon.



Sylvie Féola, was elected by staff on 16 November 2010

from a list sponsored by the CGT. Born in 1961, she started

out at La Poste as a seasonal worker in 1980 and has

since spent her whole career at the Financial Centre in

Marseille. Member of the Joint Technical Committee (comité

technique paritaire) of this centre from 1997 to 2010, she

was elected secretary of the CGT’s departmental union of

finance workers 13 in 1995, then General Secretary from

1997 to 2010. She represented the CGT on Committees of

various social action organizations (Assogeva PACA from

1996 to 2000, CTPC PACA from 2000 to 2007, the Board of

the La Couronne holiday centre from 2006 to 2009), federal

manager and leader of the financial services collective

of the CGT federation since 2004. She was an elected

representative at the CGT labour union Bouches-du-Rhône

departmental union office from 2002 to 2008, before sitting

on its executive Committee until 2010.


Board member of La Poste

Laurence Franceschini has been a member of the

La Poste Board of Directors since 24 June 2009. Born

in 1957, Laurence Franceschini is a graduate from the

Institut d'études politiques de Paris and former student

of the ENA. A Board member of the highest ranking,

she worked as Head of Legal Services on the Conseil

supérieur de l’audiovisuel (CSA), then Assistant Manager of

audiovisual communications at the IT and communications

legal Department. In April 2004, she was appointed

Deputy Director at the office of the Ministry of Culture and

Communications. From January 2007 to January 2010,

she worked as Head of Media Development at the Prime

Minister’s office and was then appointed Managing Director

of media and cultural industries at the Ministry of Culture

and Communications.



Current terms of office outside of Le Groupe La Poste

Board member of France Télévisions

Board member of Radio France

Board member of Foreign Audiovisual

Board member of Agence France-Presse

Board member of the Cinema and Cultural Industry

Financing Institute (IFCIC)

Board member of the National Library of France

Board member of the Arte France TV Channel

Board member of the National Centre of Cinema (CNC)

Board member of the National Centre of Books

Board member of the Bibliothèque publique d’information

Jean-Michel Hubert has been a member of the La Poste

Board of Directors since 20 March 2003. Born in 1939, he

is a former student of the École polytechnique and École

nationale supérieure des télécommunications. The first years

of his career were spent at the Centre National d'Études

des Télécommunications (CENT), then the Délégation à

l’informatique (DINFO). He later worked for nearly 10 years

as Head of Technical Services, then Head of Financial,

Property and Social Affairs at the Ministry of the Interior.

In September 1986, he rejoined the City of Paris where he

became Secretary-General in 1992. In January 1997, he was

appointed Chairman of the Telecom Regulatory Authority

(ART) for a six-year term of office. He was subsequently



Appendix

res 13dix A1

Vice Chairman of the Conseil général des technologies de

l’information (CGTI) as well as Deputy Ambassador for the

World Summit on the Information Society. From 2003 to

2007, he was Deputy Chairman of the Conseil stratégique

des technologies de l’information (Strategic Committee for

Information Technologies) (CSTI). From 2006 to February

2013, he was, alongside the Prime Minister, Deputy

Chairman of the Strategic Committee for Digital Issues

(CSN), and he was also a member of the Supervisory Board

of the future capital expenditure programme.



Jean-Pierre Jouyet has been a member of the Board

of Directors since 19 July 2012. Born in 1954, he holds a

diplôme d'études approfondies (pre-doctorate) in public

law. He is also a graduate of the Institut d'études politiques

de Paris (IEP) and a former student of the École nationale

d'administration (ENA). Appointed as General inspectorate

of Finance upon leaving ENA, he then was Head of the

Tax Legislation Office in the French Ministry of Finance.

From 1988 to 1991, he was the director at the office of

the Ministry of Industry and Regional Planning. In 1991,

he became Deputy Head of the Office of the President of

the European Commission, then Head of the Office from

1994 to 1995. From 1995-1997, he was a partner at the law

firm Jeantet Associés then he was Deputy Director of the

Office of the Prime Minister from 1997 to 2000. He then

held the position of Director of the Treasury, then became

ambassador in charge of international economic affairs in

2004. Briefly Chairman of Barclays France in 2005, he was

then appointed as the Department Head of the General

inspectorate of Finances, a position he held until 2007.

In May 2007, he became Secretary of State in charge of

European affairs with the Minister of Foreign and European

Affairs. At the end of 2008, he took the helm of the Autorité

des marchés financiers (French Financial Markets Authority).

On 19 July 2012, he was appointed as Managing Director of





Managing Director of Caisse des Dépôts et Consignations

Chairman of the Management Board of the Fonds de

réserve pour les retraites

Chairman of the Board of Directors of BPI

Board member of Institut Pasteur


Philippe Lemoine has been a member of the La Poste

Board of Directors since 26 June 2009, after having been

a director of La Poste from 2004 to 2007. Born in 1949, a

graduate of IEP Paris, holding a degree in law, winner of

the civil law open competition, and holding a postgraduate

degree in economics, he started his career as a researcher.

Whilst he was an engineer at the National Institute for

Research in Computer Science and Control (INRIA), he

also studied sociology at the School for Advanced Studies

in the Social Sciences (EHESS). In 1976, he was called to

the Ministry for Industry to assume responsibility for the

“Computerisation of Society” project and helped draw up

the Nora-Minc report. He subsequently joined the office of

Norbert Segard and then Pierre Aigrain (“Technology and

Society” report). In 1981, he was appointed Government

representative at CNIL (1982-1984); in 1982, he took over

the “Technology, Employment, Work” programme, becoming

Vice Chairman of the national Committee at the Ministry

for Research. At the end of 1984, he joined the Galeries

Lafayette group. In 1998, he was named Co-Chairman of

the Group’s Management Board (1998-2005). From 1999

to 2009, he sat as a member with qualified status on the

Board of CNIL. Since 1995, Mr Lemoine has been Chairman

and managing director of the LaSer group, a European

intermediation and customer relations company that

includes loans in its business model. Philippe Lemoine

chairs the Board of Directors of the Collège de France

Foundation, the Maison des sciences de l’homme Foundation

and the Fondation Franco-Américaine. He is also Chairman

of the “Open Innovation Committee” working group at

Medef, Fondation Internet Nouvelle Génération (FING),

Chairman-Founder of the Forum d’Action Modernités (FAM)

and co-chairman of the Supervisory Board of GS1 France.




Chairman and Managing Director of LaSer

Board member of Unincofra

Chairman of the Board of Directors of LaSer Cofinoga

Chairman of the Board of Directors of Sygma Bank

Chairman of GMGL

Vice-chairman of the Supervisory Committee of BHV

Sole board member of GIE Recherche Haussmann

Sole board member of GIE LaSer Archives

Chairman of the Fondation LaSer Initiatives Solidaires

Chairman of the Open Innovation Committee of Medef

Chairman of the FING Foundation

Board member of the Collège de France Foundation

Board member of the Maison des sciences de l’homme

Foundation

Board member of the Fondation Franco-Américaine

Chairman of the Forum d’Action Modernités Foundation

Co-chairman of the Supervisory Board of GS1 France




Board member of Monoprix


Board of Directors of Fidecom

Co-Chairman of the Management Board of the Galeries

Lafayette group

Chairman of the Association Réseau Échangeur


Board of Directors of Médiatis

Board member of Telemarket

Board member of BNP Paribas Personal Finance

Non-voting board member of GDF-Suez

Board member of établissement public de coopération

culturelle Le 104 (cultural cooperation public sector

company)

Michel Lersy was elected by staff on 16 November 2010

from a list sponsored by the CGT. He was born in 1961. After

working at La Poste as a seasonal employee, he passed the

competitive examination for permanent employment and

was posted to the Paris Gare du Nord sorting office in 1982.

Three months later, he passed the AEX-SG competition and

became a postman on the Ambulants de l’Est line, before

returning to Paris Nord in September 1983. He joined the

Metz sorting office in 1985 before being assigned to the

Industrial Mail Platform in Lorraine. He is now a level-one

technical and management agent. An active member of the

CGT since 1982, he was secretary of the union section of

the Metz sorting office from 1987 to 1990, elected General

Secretary of the CGT-PTT departmental union of Moselle

in 1994, then Regional Secretary of Lorraine in 2001—a

position he held until 2010. He was also a member of the

Federal Department from 2001 to 2004, then from 2008

to 2010, and a Director then Chairman (1992-1994) of a

Government canteen in Metz and FNR Regional Delegate

from 1993 to 1997. Elected to the Executive Committee of

the CGT’s departmental union for Moselle until 2010, he

served as Secretary from 2004 to 2008.



Marie-Pierre Liboutet has been a member of the La Poste

Board of Directors since 9 May 2001. Born in 1956 and

holding a degree in English, she joined La Poste as an

inspector in 1979. A business manager in Vesoul until

1984, she was transferred to Haute-Vienne in 1985. At the

CFDT Post Office and Telecommunications Federation, she

was National Secretary for La Poste and Civil Service from

1990 and 1994 and served as General Secretary from 1994

to 2001. She represented the federation at the National

Confederal Office from 1995 to 2001. At this point, she

returned to La Poste as Head of Communications for the

Haute-Vienne region. In 2008, Ms Liboutet became Head of

Communications for the Local Operational Mail Department

of Limousin.



Françoise Malrieu has been a member of the La Poste

Board of Directors since 17 December 2005. Born in 1946, a

graduate of HEC and the Financial Analysis Training Centre

(CFAF), she started her career at BNP in 1969, working as

a financial analyst. Vice President (1974) responsible for

monitoring equity investments in the BNP group’s corporate

banking arm, Banexi, she was appointed Assistant Manager

of the financial analysis Department in 1979, heading this

Department in 1982. At the same time, she was elected

General Secretary then Vice President of the Société

française des analystes financiers (SFAF). She continued

her career in mergers and acquisitions at Lazard Frères

(1987-2001), where she was appointed Director-Manager,

then Partner-Manager leading the M&A team, before

joining Deutsche Bank (2001-2003) as Managing Director

in Paris and London, as head of the corporate finance

team for France and consultant banker, before moving

to Aforge Finance where she was Partner-Manager until

2009. Ms Malrieu was appointed Director (2008) and then

Chairperson of the Board of Directors (2010) of the Société

de Financement de l’Économie Française (SFEF). During

2010, she was the deputy inspector of market professionals’

remuneration. Since May 2013, she has been a member

of the Board of Directors of the Institut Français des

Administrateurs (IFA).




Chairperson of Société de Financement de l’Économie

Française Board of Directors

Board member of Aéroports de Paris

Board member of GDF Suez

Member of the Supervisory Board of Bayard Presse S.A.


Partner-manager of Aforge Finance

Deputy inspector of market professionals’ remuneration



Appendix

res 13dix A1

Sophie Mantel has been a member of the La Poste Board

of Directors since 26 September 2013. Born in 1965, she

is a graduate of the École polytechnique (1987) and the

ENSAE (École nationale de la statistique et de l’administration

économique—1989), Sophie Mantel is the Controller-General

of Economics and Finance. She began her career in the

Forecasting Department (1989-1992), before joining the

Budget Department where she managed the 6C offices

(pension plans, pension funds, etc.), then 2A offices (wage

policy and public sector employment, etc.). She was Special

advisor to the Budget Director in 1999, then in 2001, she

joined the organic law project team and was responsible

for the implementation of organic law pertaining to finance

law (LOLF) in terms of staff expenditure. In 2006, Sophie

Mantel became the Head of the management systems

processes and functionalities Department in the DGME

(State Modernisation Executive Management before joining

the Budgetary Audit and Internal Control Mission (MACIB)

where she took over management in 2011. Since August

2013, she has been Head of the Department, assistant to

the Director of Budget.




Board member of La Française des Jeux

Board member of PMU

Board member of Institut Pasteur

Christian Martin has been a member of the Board of

Directors of La Poste since 24 January 2013. He was born in

1955, and is a graduate of the Institut d’études politiques de

Paris, holds an engineering degree from the École nationale

des ponts et chaussées, and is a former student of the ENA.

Auditor at Cour des comptes/French Court of Auditors (1987-

1991), from 1991-1992 he was deputy director of the Office

of the Ministry of Agriculture, then Board member of the

Office of the Ministry in charge of Parliament Relations,

Government spokesperson (1992-1993). Referendum

Advisor (1991-2004), he was Mayor of Draguignan (Var) from

1995 to 2001, Regional Advisor and Deputy Vice-Chairman

of Culture for the Provence-Alpes-Côte d’Azur region from

1998 to 2010, and Chairman of société d’économie mixte for

the Provence-Alpes-Côte d’Azur region from 1998 to 2004.

He has been Chief-Advisor at the Cour des comptes/French

Court of Auditors since 2004 in the 4th Chamber, responsible

for the "public safety" segment.



Jacques Pélissard has been a member of the La Poste

Board of Directors since 17 December 2005. Born in 1946,

a former student at the Law Faculty in Lyon, and a graduate

of the Institut d’études politiques de Paris (1970), he was

awarded a Bachelor of Arts from the University of Lyon in

1971. From 1971 to 1974, he taught at École supérieure de

commerce in Lyon (economic law) before becoming a lawyer

in Lyon, then Lons-le-Saunier, until July 1993. Since 1989,

he has been mayor of Lons-le-Saunier (Jura prefecture).

He has been Chairman of the communauté d’agglomération

(Conurbation authority) of the Lons-le-Saunier basin

since 2000. He has been a Deputy of Jura (member of the

Finance Commission of the National Assembly) since 1993.

Since 18 November 2004, Jacques Pélissard has been the

Chairman of the French Mayors Association. He is also a

member of the Local Finance Committee.



Michel Pesnel was elected by staff on 16 November 2010.

Born in 1952, he studied philosophy before sitting the

competition to become a Post Office and Telecoms inspector

in 1979. He was subsequently assigned to the Institut

national de gestion in Évry, the La Poste Regional division

in Basse-Normandie and the École nationale supérieure

des postes et des télécommunications (ENSPTT), as head

of ongoing training Mr Pesnel holds a master’s degree in

defence and was a former auditor at IHEDN. He is also a

defence advisor to the Prefecture of Basse-Normandie. A

member of the executive Committee of FO Communication

since 1990, he became National Secretary in 1993, then

Deputy General Secretary. He has sat on the Conseil

supérieur de la fonction publique d’État and Supervisory

Board of La Poste’s employee savings programme.



Odile Renaud-Basso has been a member of the La Poste

Board of Directors since 12 December 2013. Born in 1965,

she is a graduate from the Institut d'études politiques de

Paris and former student of the ENA (class of Jean Monnet).

After beginning her career as an auditor at the Cour des

comptes / French Court of Auditors (1990-94), she joined the

Department of Treasury where she held positions pertaining

to international, industrial and financial issues. In 2005,

she was appointed Director of the European Commission

(Directorate general for economic and financial affairs)

and continued her career in the European spheres. In

early 2010, she became Assistant Head of the office of the

President of the European Council, Herman van Rompuy.

In May 2012, she became Deputy Director of the office of

the Prime Minister, Jean-Marc Ayrault. Since 1 September

2013, she has been Deputy Managing Director of the Caisse

des Dépôts group and Director of Savings funds.







Antoine Saintoyant has been a member of the La Poste

Board of Directors since 22 April 2013. He was born in 1977

and is a graduate of the Institut d’études politiques de Paris;

Antoine was appointed as business advisor in 2003 upon

graduating from ENA (René Cassin class). He was Deputy

Head of Multifin 4 (international financial system) in the

French Treasury and Economic Policy Department in Bercy

(2003-2007), and then acted as an advisor (financial and

institutional services, banks, stock market, and insurance)

for "Financial and Monetary Affairs" at the Permanent

Representation of France at the European Union in Brussels

(2007-2009). While he was head of banks and credit

institutions at the French General Treasury and Economic

Policy Directorate, which became the French Treasury (in

March 2010) between 2009 and 2012, he was also Deputy

Secretary-General of the French Financial Legislation

and Regulation Advisory Council. Since July 2012, Antoine

Saintoyant has been head of the C1 office (La Poste and

Orange) of the Agence des participations de l'État (APE) at the

Ministry of the Economy and Finance, before being named

Director of equity investments, deputy-director of Aviation

and Defence in August 2013.




Board member of Orange


Board member of ODAS


Board member of SPPE

Franck Silvent has been a member of the Board of Directors

of La Poste since 22 April 2013. He was born in 1972, and

is a graduate of Institut d’études politiques de Paris; Frank

joined the General Inspectorate of Finance in 1998 upon his

graduation from ENA (Valmy class). He was seconded as

Deputy Director of Strategy, Finance, Management Control

and Accounting at Caisse des Dépôts et Consignations

(2002-2005). Director of Financial Development Strategy

and member of the Management Board (2005-2009), then

Deputy Chief Executive Officer of Compagnie des Alpes

(March-October 2009), he was then Associate Managing

Director of this group (2009-2012). Since January 2013,

Franck Silvent has been Director of Strategy, Sustainable

Development and Research for Caisse des Dépôts. In May

2013, he was appointed Director of the Finance, Strategy,

Subsidiaries and International division of the Caisse des

Dépôts group. In October 2013, he became Director of the

Finance, Strategy and Equity Investments division of the

Caisse des Dépôts group.




Board member of Bpifrance Participations

Board member of Bpifrance Investissements

Board member of BPI Groupe


Board member of Icade

Board member of Transdev group


Board member of Santoline

Board member of Compagnie du Mont-Blanc

Board member of Lafuma

Board member of Société du Parc du Futuroscope

Associate Managing Director of La Compagnie des Alpes

Chairman of the Supervisory Board of La Compagnie des

Alpes—Domaines Skiables


Skiable de Griffe


Skiable de Flaine

Member of the Supervisory Board of Looping Holding

Board member of Premier Financial Services

Board member of Swissalp

Board member of Belpark

Board member of Grévin et Compagnie

Board member of Musée Grévin

Board member of Safari Africain de Port-Saint-Père

Board member of Valbus

Philippe Wahl has been a member of the La Poste Board

of Directors since 1 August 2013. He was born in 1956,

and is a graduate of Sciences-Po Paris, a former student

of the ENA, and holds a Postgraduate Research Degree in

Economics. He began his career as an auditor and maître

des requêtes (Master of Requests) at the French Council of

State. Special advisor to the Chairman of the COB (1986), in

1989 he joined the office of Michel Rocard, Prime Minister,

as technical advisor for economic, financial and tax affairs.

Advisor to the Chairman of Compagnie Bancaire (1991),

then Deputy Chief Executive Officer (1994), in 1997 he was

appointed Head of Specialist Financial Services at Paribas.

In 1999, he became Managing Director of Caisse Nationale

des Caisses d’Épargne. Through this, he became Chairman

of Sopassure and of the Board of Directors of Écureuil

Assurances IARD, and a member of the Supervisory

Boards of CDC Ixis and CNP Assurances. Philippe Wahl

was appointed Managing Director of the Havas group in

2005, and became Vice-Chairman of the Bolloré group in

2006. After joining the Royal Bank of Scotland as Managing



Appendix

res 13dix A1

Director for France in 2007, he was appointed as an Advisor

to the Global Banking and Markets Board in London and

Managing Director for France, Belgium and Luxembourg in

2008, before being appointed Chairman of the Management

Board of La Banque Postale and Deputy Chief Executive

Officer of Le Groupe La Poste in January 2011. Philippe

Wahl became CEO of Le Groupe La Poste in September

2013, and became Chairman of the Supervisory Board of

La Banque Postale in October of that year.



Chairman of the Supervisory Board of La Banque Postale

Permanent representative of Le Groupe La Poste and

director of GeoPost, Sofipost and Poste Immo

Director of Sopassure


Director of CNP Assurances


Chairman of the Management Board of La Banque

Postale


Chairman of La Banque Postale Financement

Supervisory Board, of XAnge Private Equity, of La Banque

Postale Gestion Privée and of La Banque Postale Asset

Management

Chairman of La Banque Postale Assurance Santé Board

of Directors, of La Banque Postale Prévoyance and of

La Banque Postale Assurances IARD

Chairman and CEO of SF2 and Sopassure

Member of the Supervisory Board of Fonds de Garanties

des Dépôts

Managing Director of Royal Bank of Scotland PLC

Vice Chairman of the Supervisory Board of the Société

Financière de Paiements

Élyane Zarine has been a member of the Board of Directors

of La Poste since 17 December 2005. She was born in 1941.

After working in different administrative positions in film

and credit sales from the age of 20, she joined Air France

in 1968, where she worked as a salesperson, manager,

training officer, coordinator, and head of recruitment at

the Charles-de-Gaulle HR Department for 30 years. In

1998, following a company audit at the Centre of Obstetric

Surgery in Hauts-de-Seine, she took over the running of this

clinic. From 2000 to 2003, she was Head of Administration

and Human Resources at a medical analysis laboratory.

From 2003 to 2011, she sat on the Boards of Directors

of several social housing companies and has been the

Chairperson of housing committees. Chairperson of

the Organization générale des consommateurs (General

Consumer Organization—Orgeco) from 2008 to 23 May

2012, she was chairperson of Orgeco Paris. In October

2010, Minister Hervé Novelli appointed her as chairperson

of the Commission de la médiation de la consommation

(Commission of Consumption Mediation—CMC) and board

member of Credoc.




Chairperson of CMC

Chairperson of ORGECO Paris

Board member of the Institut national de la consommation

Board member of Credoc

Board member of CISS, CNC and CEC


SADIF

ASH, ASH GIE

Orgeco


A2Statutory Auditors’ report, prepared

in accordance with Article L. 225-235

of the French Commercial Code,

on the report of the Chairman

of the Board of Directors

of the company La Poste


Statutory Auditors’ report, prepared in accordance with Article L. 225-235 of the French Commercial Code, on the report of the Chairman of the Board of Directors of the company La PosteA2

Statutory Auditors' report, prepared in accordance

with Article L.225-235 of the French Commercial Code

(“Code de commerce”), on the report prepared by the

Chairman of the Board of Directors of LA POSTE

Year ended 31 December 2013


In our capacity as Statutory Auditors of LA POSTE and in accordance with Article L.225-235 of the French Commercial Code

(“Code de commerce”), we hereby report on the report prepared by the Chairman of your company in accordance with Article

L.225-37 of the French Commercial Code for the year ended 31 December 2013.

It is the Chairman's responsibility to prepare, and submit to the Board of Directors for approval, a report on the internal

control and risk management procedures implemented by the company and containing the other disclosures required by

Article L.225-37 particularly in terms of the corporate governance measures.

It is our responsibility:

to report to you on the information contained in the Chairman's report in respect of the internal control and risk

management procedures relating to the preparation and processing of the accounting and financial information, and

to attest that this report contains the other disclosures required by Article L.225-37 of the French Commercial Code (“Code

de commerce”), it being specified that we are not responsible for verifying the fairness of these disclosures.

We conducted our work in accordance with professional standards applicable in France.

Information on the internal control and risk management procedures relating to the preparation

and processing of accounting and financial information

These standards require that we perform the necessary procedures to assess the fairness of the information provided in

the Chairman's report in respect of the internal control and risk management procedures relating to the preparation and

processing of the accounting and financial information. These procedures consisted mainly in:

obtaining an understanding of the internal control and risk management procedures relating to the preparation and

processing of the accounting and financial information on which the information presented in the Chairman's report is

based and existing documentation;

obtaining an understanding of the work involved in the preparation of this information and existing documentation;

determining if any significant weaknesses in the internal control procedures relating to the preparation and processing of

the accounting and financial information that we would have noted in the course of our engagement are properly disclosed

in the Chairman's report.

On the basis of our work, we have nothing to report on the information in respect of the company's internal control and risk

management procedures relating to the preparation and processing of accounting and financial information contained in the report

prepared by the Chairman of the Board in accordance with Article L.225-37 of the French Commercial Code (“Code de Commerce”).


Statutory Auditors’ report, prepared in accordance with Article L. 225-235 of the French Commercial Code, on the report of the Chairman of the Board

of Directors of the company La Poste A2

Other disclosures

We hereby attest that the Chairman's report includes the other disclosures required by Article L.225-37 of the French

Commercial Code (“Code de commerce”).

Paris La Défense and Courbevoie, on 21 February 2014



Mazars




A3

Scope and methodology of reporting 494

Social information 495

Environmental Information 500

Information pertaining to societal commitments in favour of sustainable development 503

Report by the Statutory Auditors , designated independent third parties,

on the consolidated social, environmental and societal information

contained in the management report 506

Summary of information pertaining

to the social and environmental

consequences of the business

activities, and societal commitments

in favour of sustainable development


Summary of information pertaining to the social and environmental consequences of the business activities, and societal commitments in favour of sustainable developmentScope and methodology of reportingA3

Articles L. 225-100, L. 225-102-1, R. 225-104 and R. 225-105 of the French Commercial Code

Since 2003, the year when it adhered to the United Nations

Global Compact, Le Groupe La Poste has demonstrated

its ongoing commitment to Environmental and Social

Responsibility.

The ambition to “make Le Groupe La Poste a long-term

creator of value and social ties” is now based on two

commitments: conducting our business activities in an

increasingly responsible way, by incorporating Social and

Environmental Responsibility into each stage of the process

and in the everyday behaviour of postal workers, being a

player who is committed to shared sustainable performance

by involving players in society, with a view to take action in

order to make collective projects a success and share this

ambition with stakeholders.

The Group has published a sustainable development

report, or SER report, since 2004, which summarizes its

main commitments in its annual report and, since 2010,

has integrated the summary of its information regarding

the social and environmental consequences of its business

activities in its registration document and management

report.

The assessment of the annual reporting system and

of the update on the progress in the Group's CSR policy

enable the Group to determine the targets that will be

subject to regular monitoring in the Chairman's indicators

(approved by the Executive Committee on an annual basis),

and those that the Chairman and Chief Executive Officer

will apply to the Business Lines. These targets are the

subject of a review three times a year, as part of the extra-

financial results assessment, which has been included in

the financial performance reviews since 2011 (meetings

between the Chairman and Chief Executive Officer, the

Business Line Directors, and the Support Departments,

which aim to review the performance of every department

concerned).

The Group has had its extra-financial indicators checked

since the 2009 financial year; it is gradually broadening both

the scope of the indicators published, as well as the scope

subject to the checks.

Scope and methodology of reporting

Given the delays in producing and checking the indicators,

the consolidation scope for the 2013 financial year is

identical to that of the previous year, and includes La Poste,

La Banque Postale and Mediapost SAS.

The other Group subsidiaries are the subject of projects

aimed at computerizing extra-financial reporting processes,

which will enable the consolidation scope to be broadened

over the coming years. For the 2013 financial year, the

manual inputting of results did not make it possible to

consolidate these subsidiaries in time for the balance sheet

date.

The three companies taken into account, namely La Poste

S.A., La Banque Postale and Mediapost SAS, account for

87% of FTE (Full Time Equivalent) employees and 74% of the

Group's operating income (ratios calculated on the scope of

the fully consolidated companies).

The social indicators are developed in accordance with the

methodology used for the social report.

The environmental indicators are based on the G3 guidelines

for sustainable development reporting guidelines issued

by the Global Reporting Initiative, the methodology used in

the ADEME Bilan Carbone® tool, and on consumption or

emission factors provided by certain transport operators

and the International Electricity Agency.

The indicators are described in a reporting memorandum

drawn up by the Group’s Social and Environmental

Responsibility Department, which is in charge of the

reporting process. This memorandum specifies the

definition of the indicators, the method for gathering the

information, the checks performed, and the data collection

and approval responsibilities.

The methodological additions for indicators relating to

the workforce, the number of days of industrial action, the

frequency and severity of accidents, the number of days

of absence, training hours, remunerations, consumption of

paper, energy and water as well as purchasing amounts

are presented below in the document body and the table

footnotes.


Summary of information pertaining to the social and environmental consequences of the business activities, and societal commitments in favour of sustainable development

Social information A3

Social information

Employment

Total staff numbers of the Group

Le Groupe La Poste's total staff numbers amounted to 266,369 people on average in 2013, on a full-time equivalent basis,

a 0.1% decrease compared with 2012. La Poste, its subsidiaries and the companies that it controls had 263,032 employees.

This change resulted from normal natural departures, partially replaced.

The workforce is divided up as follows:

BREAKDOWN OF THE GROUP'S HEADCOUNT ON A FULL-TIME EQUIVALENT BASIS, BY CONTINENT (A)

Africa America Asia Europe Oceania Total

0.8% 0.3% 0.0% 98.9% 0.0% 100.0%

FranceOther countries in Western

Europe (b)Eastern European

countries and Russia Total workforce in Europe

92.4% 5.2% 1.3% 98.9%

97.8% of the Group’s workforce is located in Western Europe

BREAKDOWN OF THE GROUP'S HEADCOUNT ON A FULL-TIME EQUIVALENT BASIS, BY COMPANY (A)

Parent company La Poste (c) 83.2%

Subsidiaries consolidated in the social indicators La Banque Postale and Mediapost S.A.S. 3.6%

Scope covered by the social indicators (d) 86.8%

Other subsidiaries 13.2%

Total 100.0%(a) Source: consolidated financial statements of La Poste and of the (fully-consolidated) subsidiaries under its control; the workforce is expressed in

full-time equivalents.

(b) Unesco classification: Andorra, Austria, Belgium, Denmark, Finland, Germany, Greece, Iceland, Ireland, Italy, Liechtenstein, Luxembourg, Malta,

Monaco, the Netherlands, Norway, Portugal, San Marino, Spain, Sweden, Switzerland, United Kingdom, the Holy See, as well as France which is

separate in the table.

(c) Including the employees made available to La Banque Postale under the form of a shared resources unit (6.4% of the Group's employees).

(d) Unless otherwise specified at the level of the indicator.


Summary of information pertaining to the social and environmental consequences of the business activities, and societal commitments in favour of sustainable developmentSocial informationA3

Breakdown of and change in the physical workforce at 31 December 2013

Indicators

La Poste

La Poste, La Banque Postale

and Mediapost SAS.

2011 2012 2013 2013

Total headcount as at 31/12 (individuals) (a) 246,057 243,172 238,699 253,055

Of which on fixed-term contracts 15,770 16,491 16,912 17,496

Women 51.0% 51.2% 51.5% 50.9%

Men 49.0% 48.8% 48.5% 49.1%

Breakdown of workforce by age, excluding

limited-term contracts

Under 25 years 1.7% 1.6% 1.6% 1.7%

25-29 years old 5.9% 5.4% 5.2% 5.3%

30-39 years old 20.1% 19.7% 19.3% 19.3%

40-49 years old 31.5% 30.0% 28.6% 28.4%

50-59 years old 38.5% 40.1% 41.4% 40.5%

60 and older 2.3% 3.2% 3.9% 4.8%

Average number of full-time employees 226,502 221,657 218,941 228,434

Number of recruits on permanent contracts 5,123 5,211 5,298 7,320

Number of redundancies 1,053 885 818 1,478

(a) Comprises civil servants and employees with open-ended and fixed-term contracts. Civil servants seconded to subsidiaries under employment

contracts are counted as permanent employees in these subsidiaries’ headcount by agreement.

Remunerations and their change

Indicators

La Poste

La Poste, La Banque Postale and Mediapost SAS

2011 2012 2013 2013

Average gross annual salary (a) €27,578 €28,098 €28,603 €28,739

Change n/n - 1 + 2.7% + 1.9% +1.8% +2.0%

Amount paid for profit-sharing from the

previous year €54.3 million €94.3 million €73.6 million €76.5 million

Number of employees with a Group savings

plan (PEG) or a collective retirement savings

plan (PERCO) (b) 56,666 59,341 62,452 72,408

Net contribution paid by the Company €14.0 million €14.0 million €16.4 million €18.4 million

Percentage of socially responsible investments

in the PEG and PERCO assets 65.5% 57.0% 47.0% 47.1%

(a) The indicator is now calculated based on basis of the gross remuneration paid. The 2011 amounts have been updated accordingly. The average

remuneration includes remuneration items paid monthly, but does not include variable bonuses. The headcount taken into account is the average

workcount in FTE for the year.

(b) La Poste and some subsidiaries such as Mediapost SAS are members of the Group Savings Plan (PEG) and of the Group's Collective Retirement

Savings Plan (PERCO). La Banque Postale has its own employee savings schemes (PEG and PERCO).




Organization of work

Work organization in the Group's three companies complies with French labour laws and is based on a weekly average of 35 hours

for day workers and 32 hours for night workers. Overnight work does not concern La Banque Postale or Mediapost SAS.

Indicators

La Poste


2011 2012 2013 2013

Percentage of part-time employees in the

workforce at 31/12 (individuals, excluding

fixed-term contracts) 11,25% 11,22% 10.69% 13.89%

Percentage of employees in the workforce

working night shifts at 31/12 (individuals,

excluding fixed-term contracts) (a) 2.92% 2.68% 2.63% 2.48%

Number of days’ absence due to sickness

(in calendar days) 5,033,430 4,978,614 4,999,784 5,178,621

Number of paid overtime hours NA 4,571,137 2,506,114 2,618,473

(a) Only La Poste is concerned by night shifts, regardless of their length.

Employee relations

The way in which the dialogue with employees is organized

meets the requirements of the French Labour Code for

La Poste and its French subsidiaries. The organization

method is the subject of regular negotiations. La Poste’s

employee representative bodies are mostly governed by

public sector legislation, with the exception of CHSCT,

which been governed by the rules of the French Labour

Code since 16 November 2011, in accordance with the law.

In accordance with the Quality of Life at Work Agreement

of January 2013, La Poste is working on setting up a

collective body in 2014, the scope and remit of which will

be determined following the current negotiations with trade

union organizations.

Indicators

La Poste


2011 2012 2013 2013

Number of days lost due to strikes NA NA 143,844 143,844

(a) This is the number of days of work stoppageresulting from local or nationwide strikes recorded in the payroll system.

2013 indicator La PosteLa Banque

PostaleMediapost

SAS

Total number of employee agreements signed

(including amendments) 7 4 5


Summary of information pertaining to the social and environmental consequences of the business activities, and societal commitments in favour of sustainable developmentSocial informationA3

Monitoring of the commitments made as part of the agreements in effect in 2013

La Poste

Goals relating to access to occupational health services

were defined as part of the Quality of Life at Work

Agreement: 90% of postal workers have undergone a

medical check-up in the last two years.

1,390 permanent hires resulting from fixed-term

contracts were made in 2013, out of a commitment of

3,000 hires during the period between 2013 and 2015.

La Banque Postale

A dynamic diploma-based policy that applies to all

employees: over 50% of the graduates are over 45.

Mediapost SAS

33% increase in the number of disabled workers between

the end of June 2012 and the end of June 2013; the total

number is 717.

40.4% of women executives compared with 38% two

years earlier.

Health and safety

The health and safety at work conditions for La Poste and

its French subsidiaries are determined with the framework

of French employment law.

The Quality of Life at Work Agreement signed on 22 January

2013 sets out La Poste’s goals in this area (being an

exemplary company in terms of well-being at work) and

tangible undertakings, which specifically include medical

supervision of postal workers, training for new managers,

the introduction of local HR officers, and the development

of National Health and Safety at Work delegations within

La Poste. Negotiations on health at work were also

launched; these negotiations deal with risk-prevention

issues (physical and psycho-social risks), physical hardship,

maintaining people at work, and supporting people who are

experiencing health problems. The negotiations also deal

with specialized functions (occupational health services,

risk preventers, and social security assistants) and

employee representative bodies. In addition, an agreement

on the implementation of teleworking at La Poste was

signed in June 2013.

Indicators

La Poste


2011 2012 2013 2013

Number of days of absence due to workplace

or route accidents or occupational illness (a) 772,418 773,654 733,120 750,822

Workplace accidents with time off:

Frequency (b) 26.08 26.42 25.2 25.4

Severity (c) 1.28 1.3 1.27 1.28

(a) This indicator is calculated on the basis of the number of individuals employed (excluding fixed-term contracts). The days of absence are counted in

calendar days.

(b) Number of workplace accidents (excluding commuting) per million hours worked. The hours worked are calculated on the basis of the average

workforce multiplied by the number of hours worked per annum.

(c) Number of workplace accidents with time off (excluding commuting) per thousand hours worked. The days lost for workplace accidents are counted in

calendar days.




Training

The changes in jobs and in the Group are leading it to increase training initiatives, which target:

developing skills relating to mastering the position occupied;

supporting professional development projects.

La Poste parent company committed to boosting access to training in 2013. This means that 78.5% of postal workers benefited

from at least one training initiative (52% in 2012).

Indicators

La Poste


2011 2012 2013 2013

Total number of training hours (a) 4,210,752 4,129,997 5,120,801 5,198,652

Number of employees who followed at least

one training course during the year (b) NA NA 78.5% 75.0%

(a) Total number of internal and external training hours followed by all employees (total workforce present during the year, including part-time students).

Training hours under study leave (CIF, CFP) or accredition of prior learning (VAE) and skills audits are not taken into account as training actions.

Courses are taken into account for the year in which they are completed.

(b) The employee base corresponds to the average workforce excluding employees absent for more than six months.

Equal treatment

La Poste and the French subsidiaries concerned regularly negotiate employment agreements setting out the measures taken

to promote gender equality, disabled persons, young people and seniors.

Indicator 2011 2012 2013

Proportion of women on the Management Committee 25.96% 26.97% 31.41%

The members of the Management Committee hold strategic

positions at La Poste and its French subsidiaries, as defined

by the Group’s Executive Committee. The proportion

of women increased significantly in 2013, reflecting

the ongoing efforts of La Poste and its subsidiaries to

encourage diversity at the highest level. The goal is for

women to make up 30% of the Management Committee

by 2015.

Indicator

La Poste


2011 2012 2013 2013

Difference between the remuneration

of men and women (a)

State employees -3.2% -3.2% -3.1% Only applies to La Poste

Employees -1.7% -1.3% -1.2% -2.8%

(a) All staff who are civil servants are included within La Poste.


Summary of information pertaining to the social and environmental consequences of the business activities, and societal commitments in favour of sustainable developmentEnvironmental informationA3

Promotion and compliance with the recommendations of the International Labour Organization’s fundamental agreements

La Poste is a signatory to the United Nations Global

Compact and to the commitments made by Chairmen

& Chief Executive Officers regarding gender equality in

the world; La Poste publishes a progress report on its

commitment every year.

The Group’s business ethics scheme, which was rolled out

in 2013, summarizes these principles. Le Groupe La Poste

primarily operates in Western Europe, where domestic

legislation includes the OECD principles. An assessment

carried out at a subsidiary in Morocco in 2013 did not reveal

any irregularities in employees’ employment situations

where forced labour and child labour are concerned.

To combat any form of discrimination, Le Groupe La Poste

drew up a Hiring Charter in 2010. In this Charter, the

Group specifically commits to equality of opportunity, to

considering all applications, and to objectivity and respect

during the hiring process.

Furthermore, La Poste has been a signatory to the

Corporate Diversity Charter since 2006.

Within the Universal Postal Union, La Poste was recently re-

elected as the CSR working group leader, and is conducting

an active awareness-raising initiative among world-wide

postal services through that working group.

Environmental information

General environmental policy

Due to changes in laws and regulations (resulting in

particular from the Grenelle Environment Forum),

Le Groupe La Poste monitors and analyses the obligations

that may impact its business activities. These obligations

may affect customers or the regions where Le Groupe

La Poste operates, and require the Group to adapt; this is

why the Group has drawn up a legal framework intended for

the CSR division, in order to share that framework.

Environmental responsibility also forms part of the

management process (performance reviews and the

Chairman's performance indicators) and represents one of

the incentive criteria for employees’ remuneration, and for

their variable remuneration portion, where relevant.

La Poste continued to raise the Group’s newly appointed

managers’ (senior, strategic and managing executives)

awareness in 2013, and offered a training course to all the

regional representative teams. The environmentally-friendly

driving courses continued to be rolled out, and a guide

to using IT tools properly was published on the Intranet,

for the attention of employees. Le Groupe La Poste has

identified the main environmental risks resulting from the

products and services that it offers, and the equipment,

transportation and buildings that it uses. These factors

were incorporated into the internal control and reporting

procedures in 2013. The resources dedicated to preventing

environmental risks and pollution are set out below,

although they were not subject to a consolidated financial

valuation at Group level for the 2013 financial year.

The launch of environmental certification procedures fall

under La Poste's Business Line policies. the National

Postage Stamp Printing Facility, and ColiPoste (the

head office, the five regional operating divisions and the

15 parcels platforms) are ISO 14001 certified.

In 2013, Le Groupe La Poste’s business activities did not

give rise to a need for environment-related contingency

coverage or provisions, or give rise to court decisions or

legal actions in this field.



Environmental information A3

Pollution and waste management

The business activities carried out by Le Groupe La Poste

primarily generate three kinds of waste: waste electrical

and electronic equipment, paper and packaging waste,

including cardboard pallets, and plastic, and household

waste.

Waste from electric and electronic equipment is the subject

of national agreements aimed at recovering and recycling

it, and may also be sold or given away.

For other waste, the Group is gradually rolling out action

plans for sorting, processing and material recovery.

Air (other than greenhouse gases), water and soil emissions

are not monitored. However, due to their nature, the Group’s

business activities do not generate substantial amounts of

pollutants other than those relating to the use of internal

combustion vehicles or land use, and represent a very low

risk of water and soil pollution.

Measures to prevent and remedy discharges into the water

and ground, or that affect the environment are set out in the

Paragraphs on “Sustainable use of resources” and “Climate

change”.

The noise nuisance inherent to the Group’s logistics

activities is addressed via three main types of initiatives:

regularly upgrading the internal vehicle fleet to the latest

European standards, and developing alternative means of

transport to air transport, for example combined air-rail

transport, and the purchase of a large number of electric

vehicles.

Because of the nature of its business activities, Le Groupe

La Poste is a significant consumer and carrier of paper.

The offering involving the collection of office paper for

recycling, known as “Recy'go”, which was launched with

VSCs and SMCs and local authorities in early 2012, has now

been rolled out throughout France. 2,987 tons of paper were

collected by the Nouvelle Attitude subsidiary in 2013, either

directly or via La Poste’s postmen.

Indicators

La Poste and La Banque Postale


2011 2012 2013 2013

Waste From Electrical and Electronic Equipment

(WEEE) in tonnes (a) 1,106 799 736 746

Recovery rate for this waste (excluding

donations and sales) (b) 81% 84% 83% 83%

(a) Scope including computer, safety/security and telecommunications equipment that was processed by a specialized division, or that was donated or

sold.

(b) The recovery rate is extrapolated across the entire consolidation scope through reporting the materials that account for 73.4% of the total WEEE

processed by the specialized division.

Sustainable use of resources

The primary raw material used in the Group's processes

is paper. Therefore, the Group has been committed to

monitoring and responsible purchasing since 2007, where

the goal is to reach 100% of responsible paper (recycled,

eco-labeled or from sustainably managed forests).

The portion of responsible paper consumed continued to

increase in 2013, rising to 97.5%, compared with 94.2%

in 2012, i.e. +3.3 points following a 3.6 point increase the

previous year. This increase now results from converting

the last printed materials, such as the Colissimo dispatch

labels or second dispatch labels, and the rolls for cash

machines.

Energy consumption is a challenge for the Group, as it is

a major component of its overheads. The action plans to

reduce this consumption focus on optimizing its vehicle fleet

and its buildings (reducing surface areas and upgrading the

equipment). An identical review for IT systems is underway.


Summary of information pertaining to the social and environmental consequences of the business activities, and societal commitments in favour of sustainable developmentEnvironmental informationA3

Furthermore, the replacement of internal combustion

vehicles by electric vehicles is taking place, as is the use

of renewable energy sources for buildings (since May 2012,

42 solar-power installations have been commissioned on

Poste Immo buildings as part of a partnership).

Le Groupe La Poste's water consumption is for office

purposes, or for collective catering purposes. It does not

consume any water for industrial purposes. The water

supply comes from the general supply network, which is

managed by local authorities, and is not subject to any

specific local constraints. Water consumption has fallen on

a regular basis (-5.6% between 2012 and 2013, and -0.7%

between 2011 and 2012 across La Poste, La Banque Postale

and Mediapost SAS consolidation scope).

The Group’s many facilities have an impact in terms of land

use, primarily due to the surface area that they occupy,

although it was not possible to identify their impact for the

2013 financial year.

Indicators (c)



2011 2012 2013 2013

Paper consumption in tons (a) 21,898 20,039 17,412 17,589

Percentage of environmentally-responsible

paper (a) 90.5% 94.4% 97.5% 97.5%

Buildings’ energy consumption in GWh (b) 1,196 1,154 1,262 1,277

Water consumption in dm3 (d) 1,675 1,663 1,568 1,584

(a) Products (stamps, ready-to-ship, and other packaging sold), cardboard boxes, and mixed items like padded envelopes are not included in the scope of

the indicator.

(b) Energy taken into account are electricity, gas, domestic fuel and district heating.

(c) The methodology used in the reporting of the energy consumption of buildings was changed in 2013 to ensure a more exhaustive coverage. The 2013

results are based on amounts invoiced from 1 December 2012 to 30 November 2013. The average prices used to convert these amounts into kWh

are obtained either from the statistics databases of the Ministry of Sustainable Development (Pégase database) or from calculations made from

representative samples of invoices. For some buildings, consumption was extrapolated from the occupied surfaces. The energy consumption of

buildings disposed of during the year was not included.The consumption of electric vehicles was also included.

(d) A part of the water consumptions is estimated on the basis of the expenses invoiced during the exercise and a middle price descended of the INSEE.

Climate change

Le Groupe La Poste is taking measures to anticipate the

consequences of climate change, like the tightening of

regulations, for instance. To achieve this aim, it measures

and makes efforts to reduce its greenhouse gas (GHG)

emissions and has begun offsetting the residual CO2

emissions relating to the Mail, ColiPoste and GeoPost

offerings since 2012.

The Group’s commitment is to reduce its type 1 and 2

greenhouse gas emissions by 20% between 2013 and 2020

(direct and indirect emissions relating to its consumption

of electricity, steam, heating and cooling).

The greenhouse gas (GHG) emissions within the scope of the

Group’s commitment, (type 1 and 2 emissions) increased by

1.1% in 2013 compared with 2012. The Group is continuing

its efforts in transports and buildings, including renewing

the vehicle fleet and ordering 10,000 electric vehicles,

providing environmentally-friendly driving training to 79,000

employees, developing transportation alternatives to air

transportation, optimizing transport plans, reducing the

surface areas and budgets allocated to energy, renovations,

HEQ buildings, and employee behaviour.

Greenhouse gas emissions relating to buildings do not

include the loss of refrigerant gases, as the number of

buildings under management (11,847 for the Poste Immo

real estate subsidiary alone), makes it hard to survey the

facilities.

Total GHG emissions have dropped 2.5%.



Information pertaining to societal commitments in favour of sustainable development A3

Greenhouse gas Indicators, in CO2 equivalent tons (c)



2011 2012 2013 2013

Scope of the Group’s commitment:

Type 1 and 2 emissions (a) 385,630 367,352 371,590 374,518

Total emissions relating to transport

and buildings (b) - 779,343 759,381 771,769

(a) Type 1 and 2 GHG emissions within the meaning of the GHG Protocol direct and indirect emissions linked to the consumption of energy, steam, heating

or cooling.

(b) Type 1, 2 and 3 GHG emissions, including transport sub-contractors and employees' sub-contracted business travel. Until 2011, this indicator did

not include leased air and sea transport capacity for foreign destinations and the French overseas departments, except for Europ Airpost, and

sub-contracted road transport in Corsica and the French overseas departments; the results for the 2011 financial year cannot therefore be shown

according to this scope.

Leased air transport capacity for foreign destinations and the French overseas departments; the distances take stop-overs into account as from the

2013 financial year.

Work vehicles or "company cars" (1.2% of the internal fleet), and business travel performed by employees who use their own vehicles are excluded

from the scope of the indicator.

The related consumption of electricity and GHG emissions associated for electric vehicles (4,718) light vehicles and quadricycles and 16,236 electric

bicycles at the end of 2013) are recognized at the building level.

(c) The 2012 results were updated to reflect professional trips.

Protection of biodiversity

The potential impact of the Group’s business activities

on biological equilibrium, the natural environment and

protected animal and plant species relate to greenhouse

gas emissions and energy consumption, for which active

policies have been implemented (see above).

Poste Immo, the Group’s real estate company, has mapped

all its buildings in terms of Priority Environmental Areas,

and has audited a few buildings that have been targeted in

terms of their impact on biodiversity.

Furthermore, following an assessment of the services

provided by eco-systems at an Industrial Mail Platform,

Le Groupe La Poste entered into partnerships in 2013

in order to raise awareness of biodiversity, including a

partnership with the national consultation forum in order

to raise school children’s awareness, and a partnership

with the Nicolas Hulot Foundation to inform and involve its

employees. Some flagship urban post office facilities, like

La Banque Postale's head office and the Paris Louvre post

office have chosen to install bee hives.

Information pertaining to societal commitments in favour

of sustainable development

Regional, economic, and social impact of the Company's business activities

Through its activities, the Group occupies an important

role in French regions. It specifically contributes to the

development of the local economy via the services that it

offers to economic and institutional operators. Its regional

development public service agreement requires ongoing

dialogue with regional authorities. Moreover, the Group

is often the largest employers in the region. A number of

initiatives have been developed in deprived urban areas

as part of the policy for towns, and in rural areas, as

demonstrated by the Group's partnership with regional

parks.


Summary of information pertaining to the social and environmental consequences of the business activities, and societal commitments in favour of sustainable developmentInformation pertaining to societal commitments in favour of sustainable developmentA3

Relations maintained with people or organizations interested in the Company's business activities, including integration organizations, teaching institutions, environmental protection organizations, consumer associations, and local residents

STAKEHOLDERS AND RELATIONS WITH THEM

Main direct stakeholders Main dialogue channels Main expectations identified

Shareholders AC and AC committees,

including the Quality and

Sustainable Development

Committee

Financial performance and sustainability of the business model

(long-term value creation)

Managing the risks that may affect the Company’s reputation

Contributing towards fulfilling commitments made to the

government (regulatory compliance in terms of social and

environmental responsibility, and public service obligations)

Customers

and consumer

associations

Group mediator

Structured consultation

of consumer associations

Surveys and opinion-

gathering

Listening to requirements, local nature and responsiveness of the

advice, based on considering the customers and their interests

Providing information on the offerings and the pricing policy

Societal innovation

Accessibility of the offerings to everyone, including marginalized

customers

Useful everyday services with environmental and/or social

added-value

Employees

and their

representatives

Employee representative

bodies

Employee relations survey

Various surveys, qualitative

and quantitative groups,

including CSR surveys

Time and Communications

Forums

Quality of jobs and working conditions (health & safety and well-being)

Boosting employability and supporting professional projects

Equality of opportunity in terms of access to employment and career

paths

Transparency of the dialogue with employees

Recognition of effort and know-how

The Company’s involvement in promoting CSR

Determination to be involved in the roll-out of tangible initiatives to

promote CRS, and especially social solidarity

Local elected

officials

Representative on the

Board of Directors

Departmental Local Postal

Coverage Commissions

(CDPPT)

Surveys and opinion-

gathering

Compliance with public service commitments and regulations

Visible presence in their region, including in underprivileged areas

Welcoming all customers, including the most marginalized

Involvement in their projects to promote sustainable development

(Climate Plan, Agenda 21, SCRAE, city policy, and rural development)

Contributing to their policy for employing marginalized individuals

Suppliers and

sub-contractors

Purchasing Charter, and

purchasing specifications

Co-designing equipment

with suppliers and staff

Long-term business collaboration

Complying with contractual undertakings and payment timeframes

Contract access conditions that give everyone a chance and

recognize CSR commitments

Support with developing more responsible offerings

Supporting innovation in order to anticipate changes in the

regulations



Information pertaining to societal commitments in favour of sustainable development A3

Main direct stakeholders Main dialogue channels Main expectations identified

Partner charitable

organizations

(NGOs or other

organizations)

Partnerships structured by

sponsorship agreements

or arrangements,

joint involvement in

organizations

Openness to dialogue and cooperation in terms of work

Transparency of practices and communications

Guaranteed compliance with the regulations and business ethics

Access to postal and banking services for everyone

The Group’s contribution to advancing CSR and to national and local

social solidarity initiatives

Partnership or sponsorship initiatives

La Poste, La Banque Postale and Mediapost provided

sponsorship funding amounting to €8,174,339 to their

various partners in 2013. The La Poste Foundation

introduced initiatives within the framework of a budget of

€900,000.

The aims of the partnerships formed are access to basic

goods and services, and specifically access to employment,

access to our services (social mediation and interpreting),

access to education, the prevention of exclusion and social

integration (partner arbitrator).

Postal workers are asked to volunteer through coaching

(IMS), and sponsorship initiatives (Nos Quartiers ont des

Talents, Écoles de la seconde chance, Fondation Agir Contre

l’Exclusion).

Sub-contracting and suppliers

La Poste takes social and environmental issues into account

in its purchasing contract, and factors suppliers and sub-

contractors' social and environmental responsibility in its

relations with them, through suggesting that its suppliers

sign a commitment Charter.

It contributes to the development of local jobs by promoting

the availability of its tenders to social insertion and adapted

and protected sector organizations, and to SMCs and

VSCs. It is also developing access to employment through

its partnership with temporary employment agencies for

persons who are being reintegrated into the labour market,

or disabled persons.

It has drawn up a tender code. The Market Committee

reviews the fairness of the supplier selection process for any

intellectual service tender above €1.5 million, excluding tax,

and for any other tender above €10 million, excluding tax.

Indicators (a)

La Poste


2011 2012 2013 2013

Amount of the purchases in € million,

excluding tax - - 3,781.50 NA

of which amount of the purchases in € million,

excluding tax

from the protected sector 6.99 8.56 11.20 NA

from the workforce reintegration sector - 2.28 2.77 NA

Temporary work expenditure, in € million,

excluding tax (b) - - 82.35 89.50

(a) For all purchasing indicators, the results disclosed include purchases of the subsidiary Poste Immo, which are not distinguished from La Poste.

Purchases comprise all goods and services bought from third parties (materials, transport/logistics, IT, overheads, etc.) that were capitalized or

expensed.

(b) Scope of services performed under contracts signed at Group level.


Summary of information pertaining to the social and environmental consequences of the business activities, and societal commitments in favour of sustainable developmentReport by the Statutory AuditorsA3

Fairness of practices and other initiatives launched to promote human rights

In April 2011, the Executive Committee adopted an ethical

system. The Group has specifically singled out various

forms of corruption. This code has been applied at the

various Group companies, and translated into English

for the foreign companies. Specific emphasis was placed

on corruption in 2013, including the publication of an

awareness-raising document, and the trial of a training

course intended for managers.

The measures taken to promote consumers' health and

safety aim to ensure their safety in premises that are open

to the public (prevention of assaults, and compliance with

standards for premises open to the public) and the security

of dispatches.

Report by the Statutory Auditors , designated independent

third parties, on the consolidated social, environmental and

societal information contained in the management report

Year ended 31 December 2013


In our capacity as Statutory Auditors of the La Poste company, designated independent third parties, whose admission

for certification has been granted by COFRAC, we hereby report on the consolidated social, environmental and societal

information presented in the management report (hereinafter “CSR Information”) for the year ended 31 December 2013,

pursuant to the provisions of Article L. 225-102-1 of the French Commercial Code.

Corporate Responsibility

It is the responsibility of the Board of Directors to prepare a management report including the CSR information set out in

Article R. 225-105-1 of the French Commercial Code, prepared in accordance with the standards used by the Company

(hereinafter the “Standards”), a summary of which is given in the management report, available on request at the Company’s

head office.

Independence and quality control

Our independence is set out by regulation, the Code of Professional Ethics and the provisions of Article L. 822-11 of the

French Commercial Code. Furthermore, we have implemented a quality control system that includes documented policies

and procedures aimed at ensuring compliance with rules of professional conduct, professional standards and applicable

laws and regulations.



Report by the Statutory Auditors A3

Responsibility of Auditors

It is our responsibility, based on our work:

to certify that the CSR information required is present in the management report or is subject, if omitted, to explanation

pursuant to the third paragraph of Article R. 225-105 of the French Commercial Code (Certificate of presence of CSR

information);

to express a conclusion giving moderate assurance as to the fact that CSR information, taken as a whole, is presented

sincerely, in all material respects, in accordance with the Standards (Reasoned opinion on the sincerity of CSR information).

Our work was carried out by a team of approximately ten people between November 2013 and February 2014 over a period

of about fourteen weeks. For assistance in the completion of our work, we called on CSR experts.

We conducted the work described below in accordance with professional standards applicable in France, and with the decree

of 13 May 2013 on the conditions pursuant to which independent third parties conduct their missions, and as regards the

certificate of sincerity, with the ISAE 3000 international standard (1).

1. Certificate of presence of CSR information

Based on interviews conducted with the relevant heads of department, we were apprised of guidelines for sustainable

development based on social and environmental consequences linked to the activity of the company and its societal

commitments and, where appropriate, the resulting actions or programmes.

We compared the CSR information presented in the management report with a list referred to in Article R. 225-105-1 of the

French Commercial Code.

In the absence of a number of items of consolidated information, we verified that explanations were provided in accordance

with paragraph 3 of Article R. 225-105 of the French Commercial Code.

We verified that the CSR information covered the scope of consolidation, namely the Company and its subsidiaries within the

meaning of Article L. 233-1 and the companies it controls within the meaning of Article L. 233-3 of the French Commercial

Code, within the limitations detailed in the section of the management report entitled “Scope and methodology of report”.

Based on this work, and given the limitations mentioned above, we confirm the presence in the management report of the

required CSR information.

2. Reasoned opinion on the sincerity of CSR information

Nature and scope of work

We conducted fifteen or so interviews with those responsible for preparing CSR information from the departments in charge of

the information-gathering process and where applicable, responsible for internal control and risk management procedures,

in order to:

assess the appropriateness of the Standards with respect to their relevance, completeness, reliability, neutrality, and ease

of understanding, taking into account industrial best practice, where appropriate;

to verify the implementation of a process to gather, collate, process and monitor aimed at ensuring the completeness and

consistency of CSR information, and to become familiar with internal control and risk management procedures relating

to the establishment of CSR information.

We determined the nature and scope of our tests and inspections according to the the nature and importance of CSR

information relating to the characteristics of the Company, the social and environmental implications of its business, and its

guidelines for sustainable development and industrial best practice.

(1) ISAE 3000 – Assurance engagements other than audits or reviews of historical information.


Summary of information pertaining to the social and environmental consequences of the business activities, and societal commitments in favour of sustainable developmentReport by the Statutory AuditorsA3

Regarding the CSR information we deemed most important (1):

in terms of the reporting entity, we consulted documentary sources and conducted interviews to corroborate qualitative

information (organization, policies, actions), and conducted analytical procedures on quantitative information and verified

calculations and data consolidation by means of survey, and verified their consistency and agreement with the other

information contained in the management report;

in terms of a representative sample of entities we selected (2) according to their business, their contribution to consolidated

indicators, their establishment, and a risk analysis, we conducted interviews to verify the appropriate application of

procedures and implemented in-depth tests based on sampling, which consisted of checking the calculations made and

reconciling them against documentary evidence. The sample selected represents an average of 20% of the workforce and

between 51 and 100% of the quantitative environmental information.

For other consolidated CSR information, we assessed its consistency against our knowledge of the Company.

Lastly, we assessed the relevance of the explanations, where appropriate, relating to the total or partial absence of some

information.

We consider that the sample size and methods we used while applying our professional judgement allow us to express a

conclusion giving moderate assurance; a higher level of assurance would have required more extensive verifications. Due to

the use of sampling techniques and other restrictions inherent in the running of any internal information and control system,

the risk of non-detection of a material misstatement in the CSR information cannot be absolutely ruled out.

Conclusion

Based on our work, we did not observe any material anomalies likely to call into question the fact that CSR information, taken

as a whole, is presented sincerely, in accordance with the Standards.

Paris La Défense, 21 February 2014



Mazars

Philippe Arnaud François Caubrière Emmanuelle Rigaudias Dominique Muller

PartnerClimate Change &

Sustainable Development Department

Partner PartnerSustainable Development

Department

Partner

(2) Social Indicators: Human Resources Service Centres in Clermont-Ferrand, Toulouse and Maisons-Alfort IDF East. Environmental indicators: Véhiposte,

Logistics Network Department, Technical Department for Mail and International Mail/Parcels, Poste Immo, Procurement Department of La Poste and

Mail Department.

(1) Total staff at 31 December in terms of individuals, Staff distribution by gender, Staff distribution by age, Staff distribution by contract type, Average number

of full-time equivalent staff, Number of recruits on permanent contracts, Number of lay-offs, Proportion of part-time staff on 31 December in terms of

individuals (excluding temporary contracts), Number of days lost due to strike action, Total number of social agreements signed, Number of days of sick

leave, Number of days of absence due to occupational or commuting accidents, or occupational illnesses, Accidents at work with time off: frequency

of accidents at work with time off: severity rate, Total number of hours of training, Proportion of staff attending at least one training course during the

year, Proportion of women on the management committee, Total GHG emissions from transport and buildings, Energy consumption of buildings, Paper

consumption, Percentage of environmentally responsible paper, Tonnes of paper collected by postal workers for recycling (Recy’go offer).


A4Glossary


Glossary A4

Addressed letter Type of targeted letter including a specific recipient and address (as opposed to an unaddressed

letter).

Advertising mail Mail that promotes a brand, its products or services. Most often used to recruit new customers and

to encourage existing customers to make new purchases.

Banking

accessibility

Public service and general interest mission entrusted to La Poste by the French government, which

it carries out via La Banque Postale through the Livret A passbook savings account (see 5.3.2.4.1).

AMF Autorité des marchés financiers (French Financial Markets Authority) or French Mayors Association

ANCI Agence nationale de communication et d’information (National Agency for Communication and

Information)—Represents the Group Corporate Communications Department in the regions and, as

such, passes down its strategy for its business activities and its corporate departments.

ANVIE Association nationale de valorisation interdisciplinaire de la recherche en sciences humaines et sociales

auprès des entreprises (National association for the interdisciplinary promotion of research into

human and social sciences in business).

APC/API Local and intercommunal postal agencies—public outlet managed in partnership with a town hall

or group of towns. Postal services are provided in exchange for fees.

APE Agence des participations de l’État (State Equity Investments Agency)

Apprenticeship

Charter

Established in June 2005, its goal is raising awareness among French companies about

apprenticeship being an option for professional integration. The signatory companies commit to

growing the number of apprentices they hire, consistent with their size.

ARCEP Autorité de régulation des communications électroniques et des postes (Electronic Communications

and Post Offices Regulatory Authority).

Bluenove French leader in open and collaborative innovation.

BtoB Business to Business

BtoC Business to Consumer

Business Process

Outsourcing (BPO)

Outsourcing of certain business line processes to an external service provider, a subcontractor.

CAP/CCP Commissions Administratives Paritaires/Commissions Consultatives Paritaires—Joint Administration

Committees (CAP) for state employees and Joint Advisory Committees (CCP) for private-sector

employees and public contractual employees, composed of equal numbers of staff representatives

and Company representatives, responsible for giving an opinion on individual circumstances relating

to mobility, assessment, rules of conduct, and careers.

Carbon Neutrality A process initiated as part of Le Groupe La Poste's policy to reduce its environmental imprint. It is

based on the following method: measuring CO2 emissions related to the Group’s business activities;

introducing actions to reduce these emissions; and offsetting residual emissions in order to neutralise

them, without any additional costs for customers. This process applies to Mail, Parcels and Express

in France and abroad. It recovers emissions generated by transport business activities (subsidiaries

and sub-contractors included), the energy consumption of buildings and IT servers, including those

that have been outsourced.

CCP Centre de Chèques Postaux, Compte Courant Postal or Compte Chèques Postal (Centre for post office

checks, post office current accounts, post office checking accounts).

Catchment areas Commercial area surrounding a sales outlet and in which consumers and/or prospects live. Two types

of data help determine the zone: distance and time to access a public outlet.

CDPPT Commission Départementale de la Présence Postale Territoriale—Departmental Commission

for Regional Post Office Presence. Tasked, in particular, with suggesting the allocation of the

departmental allowance for the national postal territorial compensation funds, negotiating with

La Poste the spending used to improve access to postal services in rural territories, Deprived Urban

Areas and to strengthen postal coverage in French overseas departments, giving an opinion on the

public outlet network and monitoring the application of provisions pertaining to the local postal

coverage agreement.


Glossary A4

CECEI Comité des établissements de crédit et des entreprises d’investissement (Credit Institutions and

Investment Companies Committee). It was merged with the Banking Commission, l’Autorité de

contrôle des assurances et des mutuelles (French Insurance Supervisory Authority) and the Comité

des entreprises d’assurances (Insurance Companies Committee) to form the Autorité de Contrôle

Prudentiel (French Prudential Oversight Authority) in January 2010.

CEL/PEL Compte Épargne Logement/Plan Épargne Logement (Home Ownerships Savings Account/Home

Ownerships Savings Plan—Allows the investor to make a personal contribution while being able to

benefit from a loan at favourable rates (conditions apply).

CESU Chèque emploi service universel—(Universal Service Employer Check) — Created under a policy

to encourage home services, the Universal Service Employer Check has been in force since

1 January 2006. It is offered to private individuals to help them access all of their services to

individuals.

CHSCT Comité d’hygiène, de sécurité et des conditions de travail (Health, Safety and Working Conditions

Board)—specialized committee helping protect the health and safety of employees, and improving

their working conditions.

Charter for

Diversity

Launched in 2004, it encourages companies to ensure the promotion and respect of diversity in their

workforce.

Circular economy The circular economy achieves the goal of moving from an impact reduction model to a value

creation model, which is beneficial socially, economically and environmentally. This model relies

on the creation of positive value chains for each use or reuse of the material or product before

final destruction. In particular, it emphasizes creating new ways to design, produce and consume,

extending the duration of use of products, making the use of an item more important than the

possession thereof, reusing and recycling components.

Le Groupe La Poste is a founding member of the Institute of Circular Economy.

Citizens

conference

As a continuation of the participatory approach, Le Groupe La Poste invited three groups of citizens

(rural, urban and small businesses) from several regions to reflect upon and define new services that

would be useful for customers, territories and the community. The citizens submitted a summary of

their work to the Chairman of La Poste to improve the Group's strategic plan.

Cityssimo space "Cityssimo space", a free service making Colissimo parcels available in an area that is accessible

24/7, based on the principle of automated parcels delivery and operating based on a free subscription

over the Internet. The recipient subscriber has an access card to go and withdraw the parcel from

the Cityssimo chosen when the order was made. As soon as the parcel is available, a text message

and/or mail are automatically sent to the recipient including a collection code. Recipients have five

days to collect their parcel.

Click & Mortar Is used to describe companies from the traditional economy, usually from the distribution sector,

that have developed an online presence in addition to their traditional physical presence (mortar), in

order to grow their commercial business activities.

COGAS Conseil d’orientation et de gestion des activités sociales (Social Activities Orientation and Management

Council)—Established in 1998, COGAS implements the staff policy defined by the Group, distributes

the budget and controls its implementation. It carries out its missions in the framework of shared

management with the trade unions and a strong partnership with the associations of Le Groupe

La Poste.

Collaborative

economy

Collaborative economy refers to a business model where usage takes precedence over ownership:

the use of an item, service, or privilege, can be extended by sharing, exchanging, bartering, selling

or renting it. This practice is closely linked to the boom in on-line exchanges. The collaborative

economy is shaking up older business models by changing not only what people consume, but also

the manner in which they consume it.

CSR Responsabilité Sociale et Environnementale (RSE)—Corporate Social Responsibility (CSR)

CSSPPCE Commission supérieure du service public, des postes et des communications électroniques (Higher

Commission on Public Service, Postal Services and Electronic Communications).


Glossary A4

CT Comité Technique (Technical Committee)—Staff representation body. It is responsible for discussing

issues such as the organization and operation of services, training, skills development and

professional qualifications, professional equality, parity and combating discrimination, etc.

CtoC Consumer to Consumer—Refers to a package sent by a private individual to another private individual.

Customs staff An individual or company carrying out customs formalities on behalf of its customers. Can be main

or secondary business.

Delivery times Time between goods being received by the transporter and delivered to the final recipient. Expressed

in business days, i.e. not including holidays or weekends.

Delivery Slip Postal item awaiting pick-up at public outlets.

Desktop publishing New word referring to all resources, services and IT applications used in publishing documents. In

practice, desktop publishing is especially used to refer to the mass production of business documents

with a fixed general structure (mail shots, contracts, invoices, account statements, etc.) and parts

that vary according to the recipient (addresses, figures, advertising messages, etc.).

Digital identity Digital identity can be defined as a technological link between a real entity (the person) and a virtual

entity (their digital representation(s). Every user now has a "digital identity", which consists of the

information that they have entered and their contributions, and of the traces that they have left on the

websites that they have visited, etc. The development of the Internet, which provides an increasing

number of services to private individuals, corporations and governments, irrevocably results in the

problem of information security, and more specifically personal data security. Digital identity services

are emerging to allow users to prove who they are on the Internet.

Direct marketing Communication skills and sales to individuals and enterprises identified in databases. Advertising

mail is one of the main tools used.

DISF Direction informatique des Services Financiers (IT Department for Financial Services).

DISFE Direction informatique des Services Financiers et de l’Enseigne (Financial Services and La Poste Retail

Brand IT Department).

DOCC Direction Opérationnelle Commerciale Courrier (Business Mail Operations Department).

DOTC Direction Opérationnelle Territoriale Courrier (Local Mail Operations Department).

Discretionary

management

Allows its financial assets to be entrusted to professional managers, with tools and expertise.

D+1 Delivery of mail the day after drop-off.

Eco-driving Style of driving based on modest use of a well-maintained vehicle adapted to the needs of the driver,

to limit CO2 emissions and fuel consumption.

E-commerce pure

players

Company created directly on the Internet with neither a physical presence nor a physical sales

network.

ECM Electronic Content Management, [ECM] or Electronic Document Management[EDM])—The use of IT

resources for the overall management of an electronic document.

EDI Electronic Data Interchange—Generic term defining an automatic data exchange between two entities

with the help of standardized messages. EDI in particular reduces human intervention in information

processing.

EFQM European Foundation for Quality Management—A European foundation that aims to promote a

methodological framework, in order to enable member companies to assess their level of quality

and make improvements. Self-assessment model based on nine principles.

Electronic banking All electronic, computerized and telematic procedures needed to manage bank cards and associated

transactions.

E-mailing Direct marketing campaigns conducted by e-mail.

ESC Espace Service Client (Customer Service area). A post office concept that has been rolled out since

2009, it offers a reception, advice and sales model adapted to the diversity of needs and developing

customer relations, from a consistent service centred on the post office counter to a multi-media

model based on a customized service.


Glossary A4

Expressiste Active operator in the express market.

Express transport Shipping of documents and parcels nationally and around the globe with:

Door-to-door collection and delivery;

Guaranteed delivery times;

Completion of administrative and customs formalities;

Full tracking;

IT solutions to manage shipments (production of slips with bar codes and computerized tracking).

The different levels of service offered for the most frequent destinations distinguish between three

categories of express delivery: early morning, before noon or during the day.

FCPE Fonds commun de placement d’entreprise (Employee mutual funds)—Established to manage the money

invested by employees under the various employee savings plans (which may come from employee

incentive-based pay, equity investments, voluntary payments, company “matching contributions”).

FCPI Fonds commun de placement dans l’innovation (Innovation Mutual Fund)—Type of risk-based mutual

fund that invests at least 60% of its assets in companies, including those that are innovative and

unlisted (non-exhaustive rules).

GDP Gross Domestic Product—An economic indicator which measures a country's production level. It is

defined as the total value of internal goods and services production in a given country over the course

of one given year by staff living inside the national territory.

GIE CESU Groupement d’intérêt économique des Chèques Emploi Service Universel (Universal Service Vouchers

Economic Interest Group)—Owned by La Banque Postale and created with five other partners to

process and pay CESU.

Green IT Approach allowing IT Departments to participate in the sustainable development policy of their

company or community.

Health and Safety

Plan

Aimed at improving the protection of employees on a daily basis and during the changes that

accompany the development of the Company.

Hub Concentration/dispatch platform for a national region. The network, in which the hubs are integrated,

is organized like a spider web: all same-day express letters and parcels are grouped together at

a hub, generally close to an airport, train station or other multi-modal platform, to redistribute to

depots or offices at the destination, or to another hub.

IARD Incendie, accidents et risques divers (Fire, Accident and Miscellaneous Risks)—French abbreviation

used to designate property and casualty insurance, as opposed to personal insurance.

Infini Drive Project aiming to design a standard intelligent control system for charging electric vehicle fleets. It

is led by a consortium of eight partners, including Le Groupe La Poste and its subsidiaries Docapost

BPO and Greenovia. Ademe has selected this project as part of its Future Investments program.

Institute of

management

An internal institute created to help managers overcome current and future challenges by creating

an open space for skills development, sharing and managerial innovation.

Integrated

operator

Global transporters covering the whole shipping chain. They act as airline, customs staff member,

freight staff member and road messenger. Integrators are in direct contact with senders and have

their own fleet of cargo planes. There are four main integrators: DHL, FedEx, TNT Express and UPS.

IPC International Post Corporation.

IRP Institutions représentatives du personnel (Institutions Representing Personnel)—Set up by law, these

institutions are intended to provide information to employees and ensure employee representation

within the general framework of management of the Company. This may be with regard to the

interests of the employees, workplace and employment conditions (employee representatives, union

representatives) or issues related to hygiene and safety (CHSCT).

ISA/Printed

advertising

Imprimé Sans Adresse (no printed address)—Advertisements delivered to mailboxes. Type of mail that

does not include a specific recipient and address (as opposed to an addressed letter).


Glossary A4

ISO certification International Organization for Standardization—A means of certifying a company's ability to provide

a service, product or system in accordance with customer and regulatory requirements, through a

third-party certifier.

Joint venture A jointly held business, or joint venture, created by two or more companies holding shares (equal

or unequal).

Last mile Last link in the logistics chain in delivery, this phase ensures the individual shipping of companies

as well as delivery to private individuals' residence.

Literature for the

blind

Mail or parcel containing documents sent or received by visually impaired persons or support

organizations (charities, specialist education institutions, etc.), and which are delivered at zero or

reduced cost by the postal services of many countries. In France, the Universal Postal Service (see

Universal Service) includes mailing literature for the blind free of charge.

Local Postal

Agencies

General term for all types of local postal coverage, ranging from post offices, local and intercommunal

postal agencies, Relais Poste outlets and all other forms of mutualization, aiming to share resources

between La Poste and other public or private partners and approved by the National Postal Presence

Observatory.

Mail order Buying (or selling) goods and services by mail delivery (VPC).

Mailhouse Company contracted to Le Groupe La Poste for bulk sending of documents provided by a business,

association, party, etc. with special prices for the issuer. The mailhouse ensures that addresses can

be read by Address Recognition Units and comply with the Afnor XP Z 10-011 standard of May 1997.

Major Dialogue A listening cycle and dialogue on life at work, that took place both nationally and locally, launched in

March 2012 by the Chairman at the time Jean-Paul Bailly.

Mutual Real Estate

Investment Fund

Organisme de placement collectif immobilier (type of real estate investment trust—REIT)—Real estate

fund whose setting up is approved by the Autorité des marchés financiers (French Financial Markets

Authority). Its purpose is the distribution of income from property management to unit-holders. Its

assets must be composed of a minimum of 60% investment in real estate.

MVNO Mobile Virtual Network Operator—a virtual mobile network operator with no technical infrastructure

of its own, who enters into agreements with mobile operators having their own network so as to

provide a range of services and technical solutions to its customers under its own brand.

National postal

territorial

equalization fund

Funds that maintain postal presence in less populated areas or areas with less activity, so-called

priority areas (rural areas, mountain areas, deprived urban areas and overseas departments and

territories). It is funded through an allowance granted to Le Groupe La Poste on local tax (Regional

economic contribution and property taxes).

ONPP Observatoire national de la présence postale (National Postal Presence Observatory).

ORIAS Organisme pour le registre des intermédiaires en assurances (French registry of insurance brokers).

Packing units Packing units prepared for shipment.

Parcels Package weighing up to approximately 30 kg and with total dimensions of less than 2 meters; allowing

for industrialized sorting processes and delivery by a single person.

Participatory

approach

During the Major Dialogue, postal workers expressed their desire to be more involved in the

Company's strategy. To respond to this desire, the Company organized a participatory approach. In

practice, 150,000 postal workers from the parent company and subsidiaries were able to discuss the

current situation at Le Groupe La Poste: its strengths and weaknesses, risks and opportunities, so

as to then make contributions to the Group's strategic project—shared trust.

Paylib A simple and secure on-line payment method, which does not require inputting bank card data.

BNP Paribas, La Banque Postale and Société Générale have joined forces to develop this innovative

solution, which can be used on computers, tablets or smartphones.

PEE/PEG Plan d’épargne entreprise or Plan d’épargne Groupe (company savings plan or employee savings

plan)—Allows employees to accumulate savings in the form of a portfolio of securities, with the

help of their company. Blocked for five years minimum, the funds come from voluntary employee

contributions and company contributions.


Glossary A4

PERCO Plan d’épargne pour la retraite collectif (Collective Retirement Savings Plan)—Allows employees to

accumulate savings that are available upon retirement as an annuity or in share capital.

Personal

micro-credit

Loan for individuals who wish to realize a project (excluding start-ups), but who do not have access

to traditional bank credit.

PDC Plateforme de distribution du courrier (Mail delivery platform)

PIC Plateforme Industrielle du Courrier (Industrial Mail Platform)

PIMMS Point intermédiation multiservices (MultiServices inter-mediation point)—A venue open to everyone,

the PIMMS offers local mail services available to inhabitants. An information and mediation outlet,

it facilitates the use of public services.

Postal operator Public or private sector entity handling mail and parcels from collection to delivery (collection,

sorting, transport and distribution).

Postage Transport and distribution of a press media through Le Groupe La Poste's traditional circuit.

PostEurop Association of European public postal operators.

POS advertising Point of Sale Advertising—Advertising inside stores on posters, video, radio, etc.

POS advertising Point of Sale Advertising—Advertising inside stores on posters, video, radio, etc.

PPDC Plateforme de Préparation et de Distribution du Courrier (Mail preparation and delivery platform).

Press distribution This public service mission, entrusted to Le Groupe La Poste, allows press publishers to receive

privileged postal tariffs and a very high level of distribution quality six out of seven days throughout

the territory. A tripartite agreement between the French government, Le Groupe La Poste and all of

the publishing unions specifies the terms under which this public service mission is to be carried out.

The current agreement, which was signed in July 2008, is valid from 1 January 2009 to 31 December

2015. The agreement was under renegotiation at the end of 2013.

Press delivery Distribution of print media at the subscriber’s home or workplace, unlike postage.

PR Poste Relais—Public outlet located inside a shop. This type of private partnership is governed by a

framework agreement between the Assemblée des Chambres françaises de commerce et d’industrie

(ACFCI), Assemblée permanente des Chambres de métiers (APCM), Confédération des débitants de tabac

and La Poste. Postal services are provided in exchange for fees.

Rapid transport Shipping of documents and parcels nationally and around the globe with fast but not guaranteed

delivery times.

Regional planning Public service mission, the contribution to regional planning maintains access to postal service,

including less populated areas. At least 90% of the population of a department must have access

to a Le Groupe La Poste public outlet within at least five km and within no more than a 20 minutes

commute by automobile from one's house. Le Groupe La Poste also commits to maintaining at least

17,000 public outlets at the national level.

REIT Société Civile de Placement Immobilier—SCPI—(type of real estate investment trust—REIT). Mutual

fund investment structure whose purpose is the acquisition and management of real estate assets.

It collects money from the public and redistributes the rents and/or tax benefits to its unit-holders,

the “associates”.

Relationship mail Mail whose purpose is to manage and cultivate a brand or company relationship with customers. It

was still called business correspondence a few years ago.

Reloading Transferring a shipped item to one means of transport or storage to another. Transporters, express

operators and integrators aim to reduce the amount of reloading to minimize any handling risks.

Reverse logistics Process of planning, implementing and controlling performance: of the use of raw materials; of work

in progress: inventory, production, finished products; of managing the information chain from the

customer to the supplier in order to recover, create or make use of the value of products sold and

accompanying packaging, by minimizing the environmental impact and use of resources.

Rural area Town with less than 2,000 inhabitants.


Glossary A4

Scanning Process which consists of scanning (flashing) a package upon drop-off at the post office until delivery

(one parcel is flashed on average four times while en route). Using the tracking number of the

package, the customer can know at all times what the shipping status of the shipment is.

SEPA Single Euro Payment Area—the SEPA project is a European project that is in keeping with the switch

to the euro. The goal is to create a unique range of means of payment in euros, shared between all

European countries. Thanks to these new European means of payment, consumers, companies,

retailers and administrations can make payments in the same conditions throughout Europe, as

easily as in their country.

Shared trust The name of Le Groupe La Poste's 2013-2018 strategic project, drafted in cooperation with postal

workers, elected representatives and consumer associations.

Shipper Customer who pays for the transport.

Single-piece mail Items posted and handled individually, as opposed to bulk mail. Synonymous with individual mail.

Social micro-credit Loan system whose purpose is to promote the social and professional integration of disadvantaged

individuals or those outside the banking system.

Sorting on arrival Sorting of mail by the postmen's rounds—All of the letters received are broken down between the

postmen's rounds, according to their place of delivery.

Sorting on

departure

Sorting mail into order for each delivery round. Once the sorting is performed, a second sorting takes

place in order to classify the letters in the order of each postmen's round.

SRI (Investissement social responsable—ISR) Social Responsible Investments, or Socially Responsible

Investments (SRI)—Investments in financial markets that take non-financial criteria (environmental,

societal and governance) into account in the selection of securities.

Stand Mobile counter specific to the “Customer Service Area” concept.

Think tank Non-profit institution that brings together experts and produces studies and proposals in relation

to public policy.

Top Employer

certification

Issued by the CRF Institute, it identifies leaders in HR management based on international criteria.

TIP Titre interbancaire de paiement (Interbank payment order).

Tracking Service provided by express or rapid transporters, involving the computerized monitoring of an

item’s progress from collection to delivery. Companies all offer this type of service on their website.

Transport companies try to offer the largest number of tracking points (usually at each reload).

Drivers and delivery staff carry electronic handsets for integrated operators to access information

on the final delivery in real time.

UCITS Undertaking for collective investment in transferable securities.

UGAP Union des groupements d’achats publics (public purchasing group union)—Industrial and commercial

public sector company under the supervision of the Minister for the Budget and the Minister for

National Education. This property is a purchasing centre within the meaning of the procurement code.

ULA Espace logistique urbain—(ELU). Urban Logistics Area. An urban area intended for delivering and

collecting express parcels that weigh less than 30kg. It allows the operator to consolidate shipments

by getting as close as possible to recipients. The number of kilometers travelled and polluting

atmospheric emissions are reduced, notably due to the roll-out of electric fleets or alternative

technologies.

UPU Universal Postal Union—Specialized UN agency. Its purpose is to promote the development and

cooperation of existing postal systems.

Urban logistics Method of shipping cargo flows entering, leaving and circulating in a city under the best conditions.

Urban logistics covers multiple, diverse and interdependent components: housing, economic activity,

urban management, transport, etc. Its challenges are difficult to assess since they include security

issues, sharing roads, traffic, noise or pollution.


Glossary A4

US Universal Service—The Universal Postal Service is defined in Articles 3 et seq. of the Directive

No.97/67/CE of 15 December 1997. The European provisions were transposed into French law by

Act No.99-533 of 25 June 1999. It "guarantees all users throughout the country permanent access

to postal services of specified quality. These services are offered at affordable prices for all users”. It

includes national and cross-border transmission of postal items weighing up to 2 kg, postal parcels

of up to 20 kg, registered items and insured items. Collection and delivery services within the scope

of the Universal Postal Service are carried out every working day, save in exceptional circumstances".

VAD Distance sales.

VAE Vélo à assistance électrique (Electrically Assisted Bicycle)

ZRR Zone de revitalisation rurale (Rural Revitalization Area).

ZUS Zone urbaine sensible (Deprived Urban Area).


A5Cross reference table


Cross reference table Sections of appendix I of European Regulation No.809/2004A5

Sections of appendix I of European Regulation No.809/2004

Regulation 809/2004Sections of the registration document Page

Chapter 1 — Person Responsible Chapter 1 6

Chapter 2 — Statutory Auditors Chapter 2 8

Chapter 3 — Selected financial information Chapter 3/3.3 12

Chapter 4 — Risk factors Chapter 9 117-134

Chapter 5 — Information about the Company

5.1 History and development of the Company Chapter 3/3.2 10

Chapter 4/4.1—4.2—4.3—4.4 18

5.2 Capital expenditure Chapter 10/10.5 162-168

Chapter 6 — Overview of business activities Chapter 5

6.1 Main business activities Chapter 5/5.1 20-70

Chapter 5/5.3 77-89

6.2 Primary markets Chapter 5/5.1 20-70

6.3 Exceptional events Chapter 5/5.6 104

6.4 Dependence on patents Chapter 5/5.7 104

6.5 Information on which any warranty from the issuer regarding

their competitive position is based Chapter 5/5.1 20-70

Chapter 7 — Simplified organization chart Chapter 6 105-107

Chapter 8 — Property, plant and equipment

8.1 The Group's assets Chapter 7/7.1 110

8.2 Environment and sustainable development Chapter 7/7.2 111

Chapter 5/5.4 90-104

Chapter 9 — Review of the financial position and results Chapter 10 136-174

Chapter 10 — Cash, cash equivalents and share capital Chapter 11 175

Chapter 11 — Innovation and R&D Chapter 8 114-116

Chapter 12 — Information on trends Chapter 12 177-178

Chapter 13 — Profit forecasts or estimates Chapter 13 179

Chapter 14 — Administrative, management and supervisory bodies and Executive Management

14.1 Board of Directors Chapter 14/14.1 182-188

14.2 Executive Management Chapter 14/14.2 189-192

14.3 Absence of family connections, convictions and conflicts

of interest Chapter 14/14.3 193-194


Cross reference table Sections of appendix I of European Regulation No.809/2004 A5


Chapter 15 — Remuneration and benefits

15.1 Remuneration and benefits paid to corporate officers Chapter 15/15.1 196-199

15.2 Total provisions and amounts recognized for pensions

and other benefits Chapter 15/15.2 200

Chapter 16 — Operation of administrative bodies

16.1 Duties of the Board of Directors Chapter 16/16.1 202-203

16.2 Work performed by the Board of Directors during the 2013

financial year Chapter 16/16.2 204

16.3 Assessment of the operation of the Board of Directors Chapter 16/16.3 204

16.4 Board committees within the Board of Directors Chapter 16/16.4 205-206

16.5 Internal control Chapter 16/16.5 207

16.6 Compliance with the system of corporate governance in force

in France Chapter 16/16.6 208

Chapter 17 — Employees

17.1 Change in staff numbers 210

17.2 A responsible employment policy 210

17.3 Professional development, training and˜promotion policy 211-214

17.4 Diversity and equal opportunity 215-217

17.5 Health and safety—quality of˜life at˜work 218

17.6 Players in HR support 219

17.7 General remuneration policy 220-221

17.8 Staff policy 222-226

17.9 Employee shareholding 227

17.10 Summary of employee information 227-230

Chapter 18 — Principal shareholders

18.1 Shareholders Chapter 18/18.1 232

18.2 Control of La Poste Chapter 18/18.2 232

18.3 Known agreement that could lead to a change of control Chapter 18/18.3 232

Chapter 19 — Related-party transactions

19.1 Relations with the French government and public sector

companies Chapter 19/19.1 234

19.2 Relations with companies falling within the scope of

consolidation Chapter 19/19.2 235

Chapter 20 — Financial information regarding the issuer’s assets and liabilities, financial position and results

20.1 Consolidated documents Chapter 20/20.1 238-378

20.2 Social documents Chapter 20/20.2 379-425

20.3 Dividend distribution policy Chapter 20/20.3 426

20.4 Legal and arbitration proceedings Chapter 20/20.4 426

20.5 Significant change in the financial or commercial position Chapter 20/20.5 426


Cross reference table Annual financial reportA5


Chapter 21 — Additional information

21.1 Share capital Chapter 21/21.1 428-429

21.2 Memorandum of association and articles of association Chapter 21/21.2 430-434

Chapter 22 — Material contracts Chapter 22 435

Chapter 23 — Third-party information, statements by experts and declarations of interest Chapter 23 437

Chapter 24 — Publicly available documents Chapter 24 439

Chapter 25 — Information on equity investments Chapter 25 441

Annual financial report

Sections of the registration document Page

Declaration by the person responsible for the document Chapter 1 6

Management report Chapter 5 (Presentation and

change in business activities,

environmental information)

19-104

Chapter 9 (Risks) 117-131

Chapter 10 (Analysis of the

change in results and financial

position)

135-174

Chapter 15 (Compensation of

corporate officers)

195-200

Chapter 17 (Information

relating to social matters)

209-230

Chapter 18 (Division of share

capital and voting rights)

231-232

Chapter 21 (Share capital) 427-434

Financial statements

Annual financial statements Chapter 20.2 379-425

Statutory Auditors' report on the annual financial statements Chapter 20.2 424

Consolidated financial statements Chapter 20.1 238-375

Statutory Auditors' report on the consolidated financial statements Chapter 20.1 376

Design and production: Photo credits and illustrations: Adam Simpson/heart, Plain pictures, iStockphoto.

Group Finance Department 44 bd de Vaugirard – 75757 Paris Cedex 15 – Tel.: + 33 (0)1 55 44 00 00 – www.legroupe.laposte.fr

��

GROUP FINANCE DEPARTMENT44 BD DE VAUGIRARD — 75757 PARIS CEDEX 15

Tel.: +33 (0)1 55 44 00 00www.legroupe.laposte.fr

La Poste – Société anonyme with a capital of €3,800,000,000 – 356 000 000 RCS PARIS – Head office: 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX 15

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