technicolor - 2018 Registration document

FINANCIAL STATEMENTS

STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018

OUR RESPONSE We reviewed the various legal documents relating to the sale. We examined the methods implemented by the Group to recognize the disposal transaction and focused our procedures on the calculation of the net gain on disposal, the accounting treatment of the potential earn-out and the valuation of the license granted by InterDigital to Technicolor relating to patent user rights sold to InterDigital. To verify the determination of the capital gain on disposal, our work consisted in: 1.Testing the arithmetical accuracy of the difference between the disposal price and the carrying amount of the assets removed from the balance sheet, net of transaction costs and testing the existence and valuation of transaction costs; 2.Analyzing the items selected by Technicolor leading to the valuation of a zero-price earn-out, based on an analogy with the provisions of IFRS 15 "Revenue from Contracts with Customers" relating to variable consideration treatment; 3.Assessing the reasonableness of the main estimates and the relevance of Management's approach, by verifying the consistency of the assumptions used by Management for the valuation as of July 30, 2018 and December 31, 2018 of the license granted by InterDigital to Technicolor on patents sold to InterDigital compared to: sales volume projections and the discount rate with the cash flows used in the asset impairment tests, as detailed in the Key Audit Matter relating to • Goodwill Impairment Testing the royalty rates used by comparing them notably with the rates historically recorded in the Patent Licensing activity. • 4.And, concerning the research cooperation agreement used for the determination of the transfer price, on one hand assessing the consistency with the historical data of the flows used for the valuation of the services to be provided under the agreement and, on the other hand, checking the consistency with the contractual pricing conditions of the consideration to be received for future research services. In addition, we examined the flows for the period from January 1, 2018 to July 30, 2018 presented in discontinued operations and verified the correct presentation of the transfer entries in the financial statements. Specific verifications As required by law and in accordance with professional standards applicable in France, we have also verified the information pertaining to the Group presented in the management report of the Board of Directors. We have no matters to report as to its fair presentation and its consistency with the consolidated financial statements. We attest that the consolidated non-financial performance statement provided for in Article L. 225-102-1 of the French Commercial Code is included in the disclosures relating to the Group presented in the management report, it being specified that, in accordance with Article L. 823-10 of the Code, we have not verified the fair presentation and the consistency with the consolidated financial statements of the information contained therein which should be reported on by an independent third party. Report on Other Legal and Regulatory Requirements APPOINTMENT OF THE STATUTORY AUDITORS We were appointed as Statutory Auditors of Technicolor by the Shareholders’ Meeting held on May 29, 1985 for Mazars and on June 20, 2012 for Deloitte & Associés. As at December 31, 2018, Deloitte & Associés were in the 7 th year of total uninterrupted engagement and Mazars were in the 34 th year of total uninterrupted engagement, including 20 years since the securities were admitted to a regulated market. Responsibilities of Management and those charged with Governance for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the European Union, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless it is expected to liquidate the Company or to cease operations.

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TECHNICOLOR REGISTRATION DOCUMENT 2018