TECHNICOLOR_REGISTRATION_DOCUMENT_2017

- 6 FINANCIAL STATEMENTS Statutory Auditors’ report on the financial statements for the year ended December 31, 2017

JUSTIFICATIONOF ASSESSMENTS - KEY AUDIT MATTERS In accordance with the requirements of Articles L. 823-9 and R. 823-7 of the French Commercial Code (code de commerce) relating to the justification of our assessments, we inform you of the key audit matters relating to risks of material misstatement that, in our professional judgment, were of most significance in our audit of the financial statements of the current period, as well as how we addressed those risks. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on specific items of the financial statements. ASSESSMENT OF INVESTMENTS IN SUBSIDIARIES Note 7 to the financial statements Risk identified Investments in subsidiaries represent the most significant line items of the December 31, 2017 balance sheet with a net amount of €2,085 million. They are recorded at their historical acquisition cost and impaired based on their value in use. As indicated in Note 7 to the financial statements, the value in use of investments in subsidiaries is defined, either based on their equity value, the revalued net asset or the recoverable amount. If the carrying amount exceeds the value in use, an impairment loss is recognized for the difference. The economic environment in which the Group operates is rapidly changing. The affiliates can therefore experience changes in their activity with a negative impact on operating income. The Thomson Licensing SAS affiliate, whose contribution to the balance sheet is significant, is the subject of a disposal plan as of December 31, 2017. In this context, we considered that the valuation of investments and loans to affiliates, and contingency provisions to be a key audit matter. The value in use of Thomson Licensing SAS investment as of December 31, 2017, in connection with the sale of Technicolor’s patent licensing business, is determined based on the revalued net asset by taking into account the probable disposal value of the patents, which includes the estimate of an earn-out. Until the announcement of the disposal of the patent license activity in December 2017, the recoverable amount of the Thomson Licensing SAS securities had been determined based on future discounted cash flows adjusted with the cash available. Our response To assess the reasonableness of the value in use of the shares in subsidiaries, based on the information communicated to us, our work mainly consisted in verifying that management’s estimate of the values was based on an apppropiate justification of the valuation method and key figures used, and specifically: For the Thomson Licensing SAS investment, our work consisted in verifying the consistency of the carryng amount with the valuation of the ■ revalued net asset arising from negotiations that were ongoing as of December 31, 2017, and reviewing the sensitivity analysis disclosed in Note 7 to the financial statements; For the other Group companies, our work consisted in verifying that the equity retained agrees with the acounts of the entities that were ■ audited or the subject of analytical procedures. In addition to assessing the value in use of the shares in subsidiaries, our work also consisted in: Assessing the recoverability of the loans to affiliates with respect to the participating interest analyses; ■ Verifying that a contingency provision is recorded when the company is deemed required to bear the losses of a negative net equity affiliate. ■

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REGISTRATION DOCUMENT 2017