Groupe Renault - 2020 Universal Registration Document

409 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 OFF-BALANCE SHEET COMMITMENTS AND CONTINGENT ASSETS AND LIABILITIES NOTE 28 In the course of its business, Renault enters into a certain number of sheet commitments and contingent liabilities are provided below commitments, and is involved in litigations or subject to (note 28-A). investigations by competition and automotive regulation authorities. Any liabilities resulting from these situations ( e.g. pensions and other employee benefits, litigation costs, etc .) are covered by provisions. Details of other commitments that constitute off-balance Renault also receives commitments from customers (deposits, mortgages, etc .) and may benefit from credit lines with credit institutions (note 28-B). Off-balance sheet commitments given and contingent liabilities 28 - A - Ordinary operations A1 The Group is committed for the following amounts: (€ million) 2020 2019 Financing commitments in favour of customers (1) 2,437 2,583 Firm investment orders 984 1,572 Assets pledged, provided as guarantees or mortgaged 4 2 Sureties, endorsements and guarantees given and other commitments (2) 970 696 Commitments in favour of customers by the Sales Financing segment will lead to outflows of liquidities during the three months following the year-end of a maximum (1) amount of €2,328 million at December 31, 2020 (€2,488 million at December 31, 2019). Other commitments notably include guarantees granted to administrations, share subscription commitments, and lease commitments relating to leases that are outside (2) the scope of IFRS 16 or exempt from the accounting treatment prescribed by IFRS 16. Assets pledged as guarantees by the Sales Financing segment for management of the liquidity reserve are presented in note 15-B. Contingent liabilities A2 Group companies are periodically subject to tax inspections in the countries in which they operate. Accepted tax adjustments are recorded as provisions in the financial statements. Contested tax adjustments are recognized on a case-by-case basis, taking into account the risk that the proceedings or appeals undertaken may be unsuccessful. Tax liabilities are recognized via provisions when there are uncertainties over the determination of taxes. RESA (Renault España SA) was notified of a tax reassessment for transfer prices, amounting to €212 million at December 31, 2020, which the Groupe Renault is contesting. A procedure for amicable settlement between France and Spain will be started in 2021. No provision has been recognized in connection with this notification, since Renault considers that it has good chances of winning its case. A deposit of €135 million was paid to the Spanish tax authorities in December 2020, recognized in non-current financial assets and presented in cash flows from investing activities (under Decrease (Increase) in loans of the Automotive segments) in the consolidated cash flow statement. Another payment, of €77 million, is due to be made during the first quarter of 2021 and will be recognized in the same way. Disposals of subsidiaries or businesses by the Group generally include representations and warranties in the buyer’s favour. At December 31, 2020, the Group had not identified any significant risk in connection with these operations. Group companies are periodically subject to investigations by the authorities in the countries in which they operate. When the resulting financial consequences are accepted, they are recognized in the financial statements via provisions. When they are contested, they are recognized on a case-by-case basis, based on estimates that take into account the risk that the proceedings or appeals undertaken may be unsuccessful. The main investigations by the competition and automotive regulations authorities in progress at December 31, 2020 concern illegal agreements and the level of vehicle emissions in Europe. On January 9, 2019 the Italian Competition Authority (Autorità Garante della Concorrenza e del Mercato – AGCM) fined RCI Banque €125 million, with Renault SA jointly liable for payment of the fine. The Group is contesting the grounds for this fine and has appealed against the decision. Renault considers that the probability of the decision being cancelled or fundamentally amended by a court order is high. Due to the large number of variables affecting the amount of the fine, if upheld, it is impossible to reliably estimate the amount that could be payable at the end of the proceedings. On April 3, 2019 Renault’s application for suspension of the payment was accepted, with arrangement of a bank guarantee. On October 21, 2020 the court cancelled the AGCM’s decision in its entirety, and the AGCM filed an appeal against that ruling on December 23, 2020. No provision was recognized in connection with this matter at December 31, 2020. In the ongoing “emissions” affair in France, Renault is aware that a formal legal investigation was opened on January 12, 2017 at the request of the Paris public prosecution office. This stage in the procedure was seen as an indication that the French prosecution office wished to pursue this matter. No provision was recognized at December 31, 2020 nor December 31, 2019. In the proceedings concerning the request for a preliminary ruling regarding another carmaker, the Court of Justice of the European Union (CJEU) issued its interpretative judgment on December 17, 2020. This ruling is binding for national laws. The potential consequences of the next steps in these ongoing proceedings cannot be reliably estimated at this stage, and no provision was recognized in connection with this matter at December 31, 2020.