Groupe Renault - 2020 Universal Registration Document

375 GROUPE RENAULT I UNIVERSAL REGISTRATION DOCUMENT 2020 04 CONSOLIDATED FINANCIAL STATEMENTS GROUPE RENAULT GROUPE RENAULT: A COMPANY THAT ACTS RESPONSIBLY CORPORATE GOVERNANCE FINANCIAL STATEMENTS RENAULT AND ITS SHAREHOLDERS ANNUAL GENERAL MEETING OF RENAULT ON APRIL 23, 2021 ADDITIONAL INFORMATION INVESTMENT IN NISSAN NOTE 12 Renault’s investment in Nissan in the income statement and financial position: (€ million) 2020 2019 Consolidated income statement Share in net income (loss) of associates accounted for by the equity method (4,970) 242 Consolidated financial position Investments in associates accounted for by the equity method 14,618 20,622 Nissan consolidation method 12 - A - Renault and the Japanese carmaker Nissan have developed an alliance between two distinct companies with common interests, uniting forces to achieve optimum performance. The Alliance is organized so as to preserve individual brand identities and respect each company’s corporate culture. Consequently: Renault is not assured of holding the majority of voting rights in P Nissan’s Shareholders’ Meeting; the terms of the Renault-Nissan agreements do not entitle P Renault to appoint the majority of Nissan directors, nor to hold the majority of voting rights at meetings of Nissan’s Board of Directors; Renault cannot unilaterally appoint the Chairman of Nissan; in March 2019, Renault, Nissan and Mitsubishi announced the P creation of the new Alliance Board, a supervisory body to oversee Alliance operations and governance involving Renault, Nissan and Mitsubishi. This Board has four members: the Chairman of the Board of Renault, the Chief Executive Officer of Renault, the Chief Executive Officer of Nissan and the Chief Executive Officer of Mitsubishi Motors. Decisions are taken by consensus. In November 2019, the Board added the post of Alliance General Secretary, who reports to the Alliance Board and the CEOs of the three alliance companies; at December 31, 2020, the Groupe Renault occupied two seats on P Nissan’s Board of Directors and was represented by Jean-Dominique Senard, Chairman of the Renault Board and Pierre Fleuriot, Lead Director in the Groupe Renault; Renault can neither use nor influence the use of Nissan’s assets in P the same way as its own assets; Renault provides no guarantees in respect of Nissan’s debt. P In view of this situation, Renault is considered to exercise significant influence over Nissan, and therefore uses the equity method to include its investment in Nissan in the consolidation. Nissan consolidated financial statements 12 - B - included under the equity method in the Renault consolidation The Nissan accounts included under the equity method in Renault’s financial statements are Nissan’s consolidated accounts published in compliance with Japanese accounting standards (as Nissan is listed on the Tokyo Stock exchange), after adjustments for the requirements of the Renault consolidation. Nissan publishes consolidated financial statements quarterly, and annually at March 31. For the purposes of the Renault consolidation, Nissan's results are included in line with the Renault calendar (the results for the period January through December are consolidated in Renault’s annual financial statements). Nissan held 0.7% of its own treasury shares at December 31, 2020 (0.7% at December 31, 2019). Consequently, Renault’s percentage interest in Nissan is 43.7% (43.7% at December 31, 2019). Renault holds 43.7% of voting rights in Nissan at September 30, 2020 (43.7% at September 30, 2019). Changes in the investment in Nissan as shown in Renault’s statement of financial position 12 - C - (€ million) Share in net assets Goodwill Total Before neutralization Neutralization proportional to Nissan’s investment in Renault (1) Net At December 31, 2019 20,837 (974) 19,863 759 20,622 2020 net income (3) (4,970) - (4,970) - (4,970) Dividend distributed - - - - - Translation adjustment (1,104) - (1,104) (27) (1,131) Other changes (2) 97 - 97 - 97 At December 31, 2020 14,860 (974) 13,886 732 14,618 Nissan has held 44,358 thousand Renault shares since 2002, corresponding to an investment of around 15%. The neutralization is based on Renault’s percentage holding in (1) Nissan. Other changes include the effect of Renault dividends received by Nissan, the change in actuarial gains and losses on pension obligations, the change in the financial (2) instruments revaluation reserve and the change in Nissan treasury shares. The 2020 net income includes impairment of non-current assets and restructuring costs amounting to €4,290 million, €1,934 million of which were recognized during the (3) first half-year and relate to the transition from Japanese GAAP to IFRS (principally for development expenses, which are only capitalized under IFRS).