TECHNICOLOR_REGISTRATION_DOCUMENT_2017

- 3 RISKS, LITIGATION AND CONTROLS Risk factors

CORPORATE SOCIAL RESPONSIBILITY AND COMPLIANCE

Impairment of certain tangible and intangible assets, including goodwill Risk description If management’s estimates change or market conditions adversely evolve, the estimate of the recoverable value of the Group’s assets could decrease significantly. If the Group does not generate revenues from its businesses as anticipated, the businesses may not generate sufficient positive operating cash flows. This, or other factors, may lead to a decrease in the value of the Group’s intangibles assets, including goodwill, resulting in impairment charges, which could have a material adverse effect on the Group’s results of operations or financial position. At December 31, 2017, the Group’s accounted for €942 million of goodwill and €625 million of intangible assets. Of the €942 million of goodwill at December 31, 2017, €337 million relate to DVD Services, for which any significant change in assumptions as described in note 4.4.2 to the Group’s 2017 Consolidated Financial Statements could have an immediate impact on impairment calculations and lead to further impairments. Worse than anticipated market conditions could result in additional impairment charges in the Group’s consolidated statement of operations. The discounted cash flows of DVD Services are computed over a finite life of circa twenty years and accordingly the goodwill will be impaired over this period depending on the evolution of the fair value as determined through the discounted cash flows. The Group’s may experience significant further impairment charges in future periods, particularly in the event the markets for the Group’s products and services experience further deterioration. For additional information on the impairment tests, see note 4.4 to the Group’s consolidated financial statements. Risk management The Group’s management periodically assesses the carrying amount of the tangible and intangible assets using certain key assumptions, including budgeted data, cash flow projections and growth rates. The Group assesses the carrying amount of these assets more frequently if events or changes in circumstances indicate that their carrying amounts may not be recoverable.

3.1.4

Environment

[G4-DMA Compliance] [G4-DMA Overall]

GRI

Risk description The Group is subject to various environmental protection, manufacturing and health and safety laws and regulations governing among other things the generation, storage, handling, use, disposal and transportation of materials, the emission and discharge of materials into the ground, air or water, and the health and safety of the Group’s employees. A certain number of the Group’s current and previously-owned manufacturing sites have an extended history of industrial use. Soil and groundwater contamination, which have occurred at some sites, may occur or be discovered at other sites in the future. Industrial pollution at sites that the Group has constructed or acquired expose it to additional costs for control, assessment, clean-up, or remediation of unintended pollution, and the Group has identified certain sites at which chemical contamination has required or will require remedial measures. Specifically in the frame of emerging climate change policies throughout the world, energy consumption performance of Connected Home devices is subject to increasingly face more stringent regulations or requirements. Also, most of the indirect and direct green-house gas emissions of the Group come from Connected Home products’ use. Risk management Through the implemented Environmental Management Systems (EMS), the ISO 14001 certification of its industrial sites, the training of employees in Environment, Health and Safety (EH&S) and the enforcement of EH&S policies, the Group is able to monitor the environmental changes. Regarding the potential occurrence of unforeseen events, the development and periodic review of Emergency Preparedness and Response Plans is critical along with associated testing, EH&S site audits and training. EH&S organization designs and monitors the Mitigation Plans in case of pollution. The Significant Business Incident (SBI) system implemented throughout the Group enables timely communication and involvement of top management and ensures the quick and effective allocation of appropriate resources with consistent crisis management measures throughout the world.

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TECHNICOLOR

REGISTRATION DOCUMENT 2017