technicolor - 2019 Universal registration document

3 RISKS, LITIGATION, AND CONTROLS INTERNAL CONTROL

In 2020, the Internal Audit Department will continue to focus on processes and efficiency improvements, testing of operational effectiveness of key controls and enhancing the overall review process. Internal control procedures 3.2.4 relating to the preparation and treatment of accounting and financial information GRI [103-2 Economic performance] 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 four segments (Home Entertainment Services, Production Services, Connected Home and Corporate & Other), 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. BUDGETARY PROCESS The budgetary process is mandatory for all of the Group’s segments and businesses. The principal stages in the budgetary process are the following: in September and October, preparation by each business of a budget • of the following year, based on market analysis and projections, analyses trends, costs base structure, customers & suppliers base analysis, and capex needs. It includes also key strategic initiatives and their financial impact in the budget (and going forward) and a risks and opportunities analysis;

in November and December, review and approval by Senior • Executive management and corporate finance teams of proposed Action Plans and budgets prepared at the business level; approval of the budget by the Board of Directors; at the latest, at the • beginning of the following year; split of the budget into monthly periods and by legal entities to serve • as a reference for the Group’s monthly reporting. In the context of the budgetary procedure, Key Performance Indicators (KPIs) are presented by each business, and analyzed and monitored on a monthly basis. PERIODIC PERFORMANCE REVIEW The Controlling organization reviews the Group financial performance periodically: on a monthly basis: • the reporting on actual performance is managed by the Controlling • organization and a detailed review, performed during the closing period of the financial accounts (analysis of variance vs . budget, previous forecast and last year), is presented to management including a review of risks and opportunities of each business vs . Budget. on a quarterly basis: • reporting of operational performance through a business review • with management (review of major KPIs, risks and opportunities, market trend and competition, customer portfolio analysis, strategic programs and key initiatives) and closing of financial statements, the forecasting of the current and next three quarters is performed at • the beginning of each quarter by each business (including main income statement indicators such as revenue and Adjusted EBITDA as well as Free Cash Flow items) and reviewed at Group level. ACCOUNTING, MANAGEMENT REPORTING AND CLOSING PERIODWORK AT THE GROUP LEVEL The Group accounting and financial data are consolidated into one Group reporting system. At the end of each month, the Group’s entities report their financial data into this system. The Group reporting system uses a common chart of accounts, which is regularly updated. The main accounting and financial figures of the operational and functional departments consolidated at the Group level are analyzed by the Group’s financial controlling team and reviewed by the Group’s Executive Committee. The closing process for the half-year and annual consolidated financial statements occurs in two steps. The first step consists of a “hard close” completed for the May and October closings. This review is initiated by the circulation of instructions prepared by the Group’s Accounting Department. Procedures define the controls and actions which must be undertaken at the entity level (entries in accounting books, reconciliations, etc.) and the persons authorized to implement them.

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TECHNICOLOR UNIVERSAL REGISTRATION DOCUMENT 2019