technicolor - 2020 Universal Registration Document

6 FINANCIAL STATEMENTS STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2020

Valuation of shares in subsidiaries Note 7 to the financial statements

RISK IDENTIFIED Shares in subsidiaries, in the net amount of €1,664 million represent one of the most significant line items of the December 31, 2020 balance sheet, i.e. 61% of total assets. They are recorded initially at acquisition cost and impaired based on their value in use. Shares in subsidiaries comprise the securities of the companies held by Technicolor for €971 million and the rights representing the net assets held in the fiducies for €693 million. One impact of the Group’s financial restructuring was the reorganization of the Group’s legal structure and in particular the subsidiaries whose shares are held by the entity as described in Note 1.1 to the financial statements. As indicated in Note 7 to the financial statements, the value in use of the shares in subsidiaries is defined, according to the case, based on their share of equity or their recoverable amount. In particular, the value in use of the rights representing the net assets held in the fiducies is defined according to their recoverable amount. If the carrying amount exceeds the value in use, an impairment loss is recognized for the difference. In the event of a negative net cash position, provisions for the impairment of current accounts are recorded. In addition, a contingency provision covers the residual negative balance. The economic environment in which the Group operates changes rapidly. Subsidiaries can therefore experience changes in their activity with a negative impact on their operating income and expected outlook. In this context and given the materiality of shares in subsidiaries in the company’s financial statements, we considered the measurement of the value in use of shares in subsidiaries to be a key audit matter. OUR RESPONSE To assess the reasonableness of the estimated value in use of shares in subsidiaries, based on the information communicated to us, our work mainly consisted in: obtaining an understanding of the processes set up by Management to conduct impairment tests, particularly changes to processes following • the legal reorganization of the subsidiaries, assessing the methods used to implement these tests and verifying the validity of the methods used according to the tested line of securities; for securities valued at their recoverable amount, particularly fiducie assets, obtaining the cash flow forecasts prepared by Management, assessing • the underlying assumptions adopted by Management and verifying their consistency with the forecast data used for impairment tests in the consolidated financial statements; for securities valued according to the share of equity in the entity, verifying that the equity used matches the financial statements of the entity • and was subject to an audit or analytical procedures and that any adjustments to this equity were based on supporting documentation; testing the mathematical accuracy of the value calculations adopted by the company. • We also assessed the appropriateness of the disclosures in Note 7 to the financial statements. Specific Verifications We have also performed, in accordance with professional standards applicable in France, the specific verifications required by laws and regulations. INFORMATION GIVEN IN THE MANAGEMENT REPORT AND IN THE OTHER DOCUMENTS WITH RESPECT TO THE FINANCIAL POSITION AND THE FINANCIAL STATEMENTS PROVIDED TO SHAREHOLDERS We have no matters to report as to the fair presentation and the consistency with the financial statements of the information given in the management report of the Board of Directors and in the other documents with respect to the financial position and the financial statements provided to the shareholders. We attest the fair presentation and the consistency with the financial statements of the information relating to payment deadlines mentioned in Article D.441-6 of the French Commercial Code (code de commerce). We attest that the non-financial statement required by Article L.225-102-1 of the French Commercial Code (code de commerce) is included in the management report, it being specified that, in accordance with Article L.823-10 of this code, we have verified neither the fair presentation nor the consistency with the financial statements of the information contained therein. This information should be reported on by an independent third party. verifying that shares in subsidiaries acquired during the period were initially recorded at acquisition cost; • obtaining an understanding of the new organization and verifying the accounting treatment for the fiducies; •

TECHNICOLOR UNIVERSAL REGISTRATION DOCUMENT 2020 310