technicolor - 2020 Universal Registration Document

3 RISKS, LITIGATION, AND CONTROLS INTERNAL CONTROL

General Electric paid nearly the full amount of the decision in December 2019. On March 5, 2020, the Taiwan High Court ruled on the 246 remanded claims and awarded NTD54.7 million (c. €1.59 million at the exchange rate as of December 31, 2020) in damages plus interest. This ruling is on appeal to the Taiwan Supreme Court. In 2016, the association brought a second lawsuit against Technicolor and certain of its subsidiaries and General Electric on behalf of additional former workers making virtually identical allegations as were made in the first lawsuit. The Taipei District Court announced its ruling on December 27, 2019 and awarded approximately NTD2.3 billion (c. €66.83 million at the exchange rate as of December 31, 2020) plus interest. Technicolor and General Electric were held jointly and severally

liable. Technicolor filed its appeal of this decision to the Taiwan High Court in January 2020. Technicolor and its subsidiaries claim, among other reasons, that TCETVT operated for less than four years after its purchase from General Electric, while General Electric and its predecessor-in-interest RCA Corporation, ultimately owned TCETVT for approximately twenty years of operations. Should the Group or any of the subsidiaries ultimately be held liable or settle the claims, the amounts of any such liability or settlement could be high. There are currently too many uncertainties to assess the extent of any liability that Technicolor or its subsidiaries may incur as a consequence of this lawsuit. Technicolor also has various avenues to mitigate any risk, including contractual indemnities owed to it by General Electric and others.

INTERNAL CONTROL 3.2

GRI [102-29] [102-30] [102-33] [103-1 Socioeconomic compliance] [103-2 Socioeconomic compliance] [103-3 Socioeconomic compliance] [205-1]

The internal control procedures mentioned in the present Chapter apply to the Company and to all its subsidiaries and are under the responsibility of each Technicolor employee. The major components underlying the preparation of this report are: the French Loi de sécurité financière (Law regarding Financial (i) Security); the Ordinance No. 2008-1278 of December 8, 2008; (ii) the AMF guidelines on risk management and internal control; and (iii) Article R. 225-105-1 of the French Commercial Code about (iv) disclosure of non-financial information related to Corporate Social Responsibility.

In March 2011, the Company voluntarily delisted from the New York Stock Exchange (NYSE). As a consequence, it is no longer subject to the Sarbanes Oxley Act obligations (SOX). Following the delisting, the Group decided to maintain high standards of financial reporting discipline, capitalizing on the work undertaken previously. The internal control program, called 8TIC’S, was launched at the beginning of 2011 with the objective to maintain and expand the internal control scope beyond financial reporting through a risk-based approach. The 2020 annual campaign has been successfully performed and completed, and a new campaign will commence in January 2021.

Objectives of internal control procedures and implementation 3.2.1 OBJECTIVES OF INTERNAL CONTROL PROCEDURES The Group’s internal control framework is designed to achieve the following main objectives: The internal control framework aims at preventing and mitigating risks arising from the Group’s management of business along with the risks of error or fraud, in particular, in areas of accounting, finance and social responsibility. As for every control system, it cannot provide an absolute guarantee that these risks are completely eliminated.

application of the instructions and directional guidelines fixed by • the Group’s management bodies in line with the Group’s overall objectives and the inherent risks; correct functioning of internal control procedures, such as the ones • pertaining to the security of its assets, as well as, the operational, industrial, commercial and financial processes; compliance with applicable laws and regulations; • reliability of financial and non-financial information obtained through • the implementation of internal control procedures.

INTERNAL CONTROL METHODOLOGY The internal control methodology is based on three pillars:

a risk-based approach which starts from the Group Risk Management • program (see paragraph below “Risk Management”) and allows internal control to deploy its methodology on the main Group risks. In 2020, despite the unexpected events of the pandemic (Covid-19), the risk and control referential was revisited and updated together with the evolution of risks; along with a clear classification distinction on Tier 1 and Tier 2 risks;

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TECHNICOLOR UNIVERSAL REGISTRATION DOCUMENT 2020