TECHNICOLOR_REGISTRATION_DOCUMENT_2017

3 - RISKS, LITIGATION AND CONTROLS Internal control

INTERNAL AUDIT 3.3.3 [G4-49] [G4-50] GRI

INTERNAL CONTROL 3.3.4

PROCEDURES RELATING TO THE PREPARATION AND TREATMENT OF ACCOUNTING

As defined in the “Internal Audit Charter”, Internal Audit performs independent and objective assurance, and consulting roles that are dedicated to adding value and improving Technicolor’s performance. It conducts risk assessments at any level within the Group, identifies and proposes improvements in financial and operational processes, and helps the organization define Action Plans to mitigate risks and reinforce the control environment and governance principles. The Internal Audit Department reports its results to the Group’s management. The Audit Committee reviews and approves the annual Internal Audit Plan based on the pluri-annual Internal Audit Plan, and is informed of the main audit results. The Internal Audit Department provides support in the Technicolor Risk Management process. Since 2013, Internal Audit and Internal Control Central Departments have been regrouped under the responsibility of the Chief Audit Executive to increase coordination and integration. It allows Internal Audit recommendations to be better embedded in the Internal Control framework, and deficiencies reported during the 8TIC’S campaign to be closely followed up by Internal Audit. The Internal Audit Department consists of approximately 12 auditors who have past experience in a large range of domains like information systems, engineering, finance or marketing. The team is located in three key sites for the Group: Issy-les-Moulineaux (France), Los Angeles, California (U.S.) and Lawrenceville, Georgia (U.S.). The Chief Audit Officer is located in Issy-les-Moulineaux. He reports to the Chief Financial Officer, and functionally to the Audit Committee. The Internal Audit Department conducts audits in various domains, covering operational and financial processes, at transversal or local levels, financial audits, review of contracts or projects, compliance and security audits, and follow-up audits. In direct link with the Secretary of the Investment Committee, the Internal Audit Department is regularly performing audits on post-investments. In 2017, 23 audit engagements were performed (both assurance and assistance types) compared to 24 audits in 2016.

AND FINANCIAL INFORMATION

The internal control related to the preparation and treatment of accounting and financial information relies on the Controlling organization with its processes and controls (budgetary process, monthly reporting and forecasting, quarterly reporting of financial and operational performance review) as well as on the Group’s Accounting Department (regrouping accounting standards and methods and share services centers teams) and the Internal Audit Department. Under the authority of the Group’s Chief Financial Officer, the dedicated teams are responsible for: the establishment of the Group’s consolidated financial statements ■ and Technicolor’s statutory accounts; the preparation of the budget and the analysis of its execution ■ through monthly management and performance reporting; and the implementation of the Group’s accounting and Controlling ■ methods, procedures and standards and their adaptation in accordance with changes. The Group’s financial organization follows its operational organization, based on three segments (Entertainment Services, Connected Home and Corporate & Other), comprising five Businesses and Corporate, organized in several activities. Each one of these businesses and activities is under the responsibility of a controller and is assisted by a controlling supporting team, in charge of budget, reporting follow-up, performance analysis and estimates. Accounting operations within the legal entities are for the most part managed through two internal shared services centers. The accounting teams work according to Group accounting standards and methods and liaise with the Controlling organization through Services Level Agreements.

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TECHNICOLOR REGISTRATION DOCUMENT 2017