technicolor - 2019 Universal registration document

6 FINANCIAL STATEMENTS SCOPE OF CONSOLIDATION

Translation of foreign currency transactions Transactions in foreign currency are translated at the exchange rate effective at the trade date. Monetary assets and liabilities in foreign currency are translated at the rate of exchange prevailing at the consolidated statement of financial position date. The differences arising on the translation of foreign currency operations are recorded in the consolidated statement of operations as a foreign exchange gain and loss. The non-monetary assets and liabilities are translated at the historical rate of exchange effective at the trade date.

TRANSLATION 1.2.4 Translation of foreign subsidiaries

For the financial statements of all the Group’s entities for which the functional currency is different from that of the Group, the following methods are applied: the assets and liabilities are translated into euro at the rate effective at • the end of the period; the revenues and costs are translated into euro at the average • exchange rate of the period. The translation adjustments arising are directly recorded in Other Comprehensive Income.

The main exchange rates used for translation (one unit of euro converted to each foreign currency) are summarized in the following table:

Closing rate

Average rate

2019 1.1234

2019 1.1206 0.8776 1.4878

2018 1.1427 0.9011 1.5571

2018 1.1805 0.8869 1.5338

U.S. Dollar (U.S.$) Pound sterling (GBP) Canadian Dollar (CAD)

0.8508 1.4598

The average rate is determined by taking the average of the month-end closing rates for the year, unless such method results in a material distortion.

Scope of consolidation

NOTE 2

GRI [102-45]

Scope and consolidation method

2.1

SUBSIDIARIES All the entities that are controlled by the Group (including special purpose entities) i.e . in which the Group has the power to govern the financial and operating policies in order to obtain benefits from the activities, are subsidiaries of the Group and are consolidated. Control is presumed to exist when the Group directly or indirectly owns more than half of the voting rights of an entity (the voting rights taken into account are the actual and potential voting rights which are immediately exercisable or convertible) and when no other shareholder holds a significant right allowing veto or the blocking of ordinary financial and operating decisions made by the Group. Consolidation is also applied to special purpose entities that met the criteria of IFRS 10, whatever their legal forms are, even where the Group holds no shares in their capital.

ASSOCIATES An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policies decisions of the investee without having either control or joint control over those policies. Investments in associates are accounted for under the equity method in accordance with IFRS 11. The goodwill arising on these entities is included in the carrying value of the investment. JOINT VENTURES A joint venture is a contractual arrangement whereby the Group and other parties undertake an economic activity that is subject to joint control. Investments in joint ventures are consolidated under the equity method in accordance with IFRS 11 since January 1, 2012.

TECHNICOLOR UNIVERSAL REGISTRATION DOCUMENT 2019 210