2007 Interactive Registration Document - Renault

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07 CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL STATEMENTS The unrecognised actuarial gains and losses resulting from revisions of the underlying assumptions are included in equity, as allowed under the option contained in the amendment to IAS 19 (see note 2-A). The net expense for the year, corresponding to the sum of the current period service costs, the discount cost less the expected return on fund assets and a portion of deferred past service costs, is charged in full to the operating margin. Restructuring measures/Termination benefits The estimated cost of restructuring and the cost of workforce adjustment measures is recognised as soon as a detailed plan has been defi ned and is either announced or in progress. S – Financial assets The Group recognises a financial asset when it becomes a party to the contractual provisions of the instrument. Financial assets comprise investments in non-controlled companies in which Renault does not exercise signifi cant infl uence, securities, loans, and derivative assets related to fi nancial transactions (note 2-V). These instruments are presented as non-current assets, apart from those maturing within 12 months of the closing date, which are classifi ed as current assets or cash equivalents as appropriate. Securities: investments in non-controlled companies in which Renault does not have significant influence Dividends from such companies are recorded in the year of distribution. These investments are considered to be “available for sale”, and are accordingly stated at their fair value at the fi nancial reporting date, with any changes in fair value included directly in consolidated reserves. The amounts recorded in consolidated reserves are transferred to the income statement upon disposal of the investment. Impairment is calculated and recognised in the income statement when there is objective evidence that these investments are impaired. One indicator providing objective evidence of impairment is a signifi cant or prolonged fall in the fair value of investments below their acquisition cost. The fair values of such investments are determined by reference to the market price when possible. Securities that do not represent a share in another entity’s capital These securities are short-term investments undertaken as part of the Group’s cash surplus management policy, and are initially stated at fair value. The valuation methods and subsequent accounting treatment vary according to whether such securities are considered “available for sale” or designated from the outset as “assets stated at fair value through profi t or loss”. The relevant category is determined on a case-by-case basis and depends on the underlying management strategy. Securities intended for sale in the short term are classifi ed as “assets stated at fair value through profi t or loss”; all other securities are classifi ed as “available for sale”. Securities intended for sale in the short term are stated at fair value at the reporting date, with changes in fair value taken to income. < TABLE OF CONTENTS > Available-for-sale securities are stated at fair value at the reporting date, and changes in this fair value are recorded directly in equity. The amounts included in equity are taken to income upon derecognition of the asset. Impairment losses are recorded in the income statement when there is objective evidence of signifi cant long-term depreciation in value. Fair values of securities are mainly determined by reference to the market price. Loans Loans include interbank loans for investment of cash surpluses and loans to non-controlled companies in which Renault holds investments. Loans are initially recognised at fair value, plus directly attributable transaction costs. At each closing date, loans are valued at amortised cost. Impairment is recognised in the income statement when there is objective evidence of depreciation in value caused by an event that occurred after the initial recognition of the asset. T – Cash and cash equivalents Cash includes cash on hand and bank deposits, with the exception of bank overdrafts, which are included in fi nancial liabilities. Cash equivalents are investments held for the purpose of meeting short-term cash commitments. For an investment to qualify as a cash equivalent, it must be readily convertible for a known amount of cash and be subject to an insignifi cant risk of change in value. U – Financial liabilities and sales financing debts The Group recognises a fi nancial liability (for the Automobile division) or a sales fi nancing debt when it becomes a party to the contractual provisions of the instrument. Financial liabilities and sales fi nancing debts comprise redeemable shares, bonds, other interest-bearing borrowings and derivative liabilities related to fi nancial transactions (note 2-V). Redeemable shares In accordance with IAS 39, the Group considers that the variable interest on redeemable shares is an embedded derivative which cannot be valued separately. Consequently, the Group has stated all its redeemable shares at fair value. For these shares, fair value is equal to market value. Changes in fair value are recorded in fi nancial income and expenses. Bonds and other interest-bearing borrowings Bonds and other interest-bearing borrowings are initially recorded at fair value, less any directly attributable transaction costs. At each reporting date, apart from specifi c hedge accounting methods (note 2-V), these fi nancial liabilities are restated at amortised cost using the effective interest rate method. The fi nancial expense calculated in this way includes issuance expenses and issuance or redemption premiums, together with the impact of debt renegotiations when the old and new terms are not substantially different. 200 Registration Document Renault 2007 Find out more at www.renault.com 01 02 03 04 05 06 07 08
Renegotiations of the terms of borrowings and similar operations are recorded as an extinction of the former liability with recognition of a new liability only if there are substantial differences between the old and new terms. When this is the case, the costs borne for renegotiation are included in the fi nancial expenses for the period during which the negotiation takes place. V – Derivatives and hedge accounting Measurement and presentation Derivatives are initially recognised at fair value. This fair value is subsequently reviewed at each closing date. n n n The fair value of forward exchange contracts is based on market conditions. The fair value of currency swaps is determined by discounting future cash fl ows, using closing-date market rates (exchange and interest rates); The fair value of interest rate derivatives is the amount the Group would receive (or pay) to settle outstanding contracts at the closing date, taking into account any unrealised gains or losses based on current interest rates and the quality of the counterparty to each contract at the closing date. This fair value includes accrued interest; The fair value of commodity derivatives is based on market conditions. The Automobile division’s derivatives are reported in the balance sheet as current if they mature within 12 months and non-current otherwise. All Sales fi nancing division derivatives are reported in the balance sheet as current. Hedge accounting The treatment of derivatives designated as hedging instruments depends on the type of hedging relationship: n n n fair value hedge; cash fl ow hedge; hedge of a net investment in a foreign operation. The Group identifi es the hedging instrument and the hedged item as soon as the hedge is set up, and documents the hedging relationship, stating the hedging strategy, the risk hedged and the method used to assess the hedge’s effectiveness. This documentation is subsequently updated, such that the effectiveness of the designated hedge can be demonstrated. Hedge accounting uses specifi c measurement and recognition methods for each category of hedge. n n Fair value hedges: the hedged item is adjusted to fair value in view of the risk hedged and the hedging instrument is recorded at fair value. As changes in these items are recorded in the income statement simultaneously, only the ineffective portion of the hedge has an impact on net income. It is recorded in the same income statement item as changes in the fair value of the hedged item and the hedging instrument. Cash fl ow hedges: no adjustment is made to the value of the hedged item; only the hedging instrument is adjusted to fair value. Following this adjustment, the effective portion of the change in fair value attributable to the hedged risk is recorded, net of taxes, in equity, while the ineffective portion is included in the income statement. The cumulative amount included in ✦ Global Reporting Initiative (GRI) Directives n FINANCIAL STATEMENTS 07 CONSOLIDATED FINANCIAL STATEMENTS equity is transferred to the income statement when the hedged item has an impact on net income. Hedge of a net investment in a foreign operation: the hedging instrument is adjusted to fair value. Following this adjustment, the effective portion of the change in fair value attributable to the hedged exchange risk is recorded, net of taxes, in equity, while the ineffective portion is included in the income statement. The cumulative amount included in equity is transferred to the income statement at the date of liquidation or sale of the investment. The interest rate component of fi nancial instruments used to hedge the investment in Nissan (forward sales and fi xed/fi xed c ross c urrency s waps) is treated as an ineffective portion and consequently recorded directly in fi nancial income and expenses. Derivatives not designated as hedges Changes in the fair value of derivatives not designated as hedges are recognised directly in fi nancial income, except in the case of derivatives entered into exclusively for reasons closely related to business operations. In this case, changes in the fair value of derivatives are included in the operating margin. 3 – CHANGES IN THE SCOPE OF CONSOLIDATION AUTOMOBILE SALES FINANCING TOTAL Number of companies consolidated at December 31, 2005 Newly consolidated companies 122 48 170 (acquisitions, formations, etc) Deconsolidated companies (disposals, 35 2 37 mergers, liquidations, etc) (4) (1) (5) Number of companies consolidated at December 31, 2006 Newly consolidated companies 153 49 202 (acquisitions, formations, etc) Deconsolidated companies (disposals, 3 1 4 mergers, liquidations, etc) (7) (8) (15) Number of companies consolidated at December 31, 2007 149 42 191 The main newly consolidated entities are the following. 2007 < TABLE OF CONTENTS > Somaca (Société marocaine de construction) was fi rst consolidated at January 1, 2007 after Renault brought its investment in the company to 80% through successive acquisitions of shares. Under an agreement with the Japanese group NTN, Renault sold 35% of the capital of SNR on March 31, 2007. In application of this agreement, Renault has deconsolidated its investment in SNR. In July 2007, the Group raised its interest in Renault Financial Services Ltd. (RFS) from 50% to 100% and now fully consolidates the investment (which was proportionately consolidated up to the date of the transaction). This generated goodwill of €32 million. 01 02 03 04 05 06 07 08 Registration Document Renault 2007 201
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2007 REGISTRATION DOCUMENT
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TABLE OF CONTENTS 01 RENAULT AND TH
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01 Renault and the Group < TABLE OF
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1.1.2 BACKGROUND AND HIGHLIGHTS 189
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1.1.3 MAIN ACTIVITIES Since the fi
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I n the luxury E segment, Renault l
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PRODUCTION OF THE MAIN MANUFACTURIN
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HIGHLIGHTS IN GROUP NETWORK STRATEG
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In April 2007, in addition to an or
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n n in Morocco, Renault signed a me
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RENAULT RETAIL GROUP SA 117-199, av
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* REAL ESTATE AND IT FINANCING FOR
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1.3 THE RENAULT-NISSAN ALLIANCE On
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RENAULT SHARE PRICE FROM MARCH 29,
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These two entities are free to acce
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Interchangeable components Compleme
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MANUFACTURING Renault and Nissan ha
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1.3.4.1 NISSAN’S STRATEGY AND GRO
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1.3.4.2 NISSAN’S 2007 CONTRIBUTIO
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SALES IN WESTERN EUROPE RENAULT AND
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GLOBAL SALES AND PRODUCTION SITES
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02 Management report < TABLE OF CON
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FRANCE & EUROPE REGIONS - GROUP SAL
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for 67.1% of the Group’s sales in
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INTERNATIONAL ROLLOUT OF THE LOGAN
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In 2007, RCI Banque also launched f
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RENAULT GROUP - REGISTRATIONS IN EU
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Renault g roup’s new geographical
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Renault g roup - R&D expenses* Glob
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2.1.3 FINANCIAL INFORMATION ON THE
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2.1.4 PROGRESS REPORT ON RENAULT CO
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The Renault [T] (“square T”) te
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2.2.3 2007 R&D HIGHLIGHTS 2.2.3.1 A
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Industrial risk The decision to set
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MANAGEMENT PROCEDURES Between 1990
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MANAGEMENT PROCEDURES Import subsid
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Renault Finance also trades for its
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In early 2005 RCI Banque also secur
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2.3.5 OTHER RISKS 2.3.5.1 OFF-BALAN
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03 Sustainable development < TABLE
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of employee commitment remains one
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Over the past three years, incentiv
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For 2007, Group turnover totaled 7%
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3.1.2.5 TRAINING Vocational trainin
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Efforts continued in 2007 to extend
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The agreement on teleworking was si
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TEST LABORATORY Renault’s test la
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COMPARATIVE INVENTORY AND PROGRESS
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Renault is implementing a three-pro
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Liquefied Petroleum Gas (LPG) and C
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USE Use-phase waste is generated by
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3.2.3 CROSS-FUNCTIONAL MANAGEMENT O
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VEHICLE DESIGN AND DEVELOPMENT PROC
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ENVIRONMENTAL MANAGEMENT IN THE VEH
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SHARING RENAULT’S KNOW-HOW WITH O
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3.3.2 RENAULT AND ITS STAKEHOLDERS
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In 2007, Renault participated as an
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BREAKDOWN OF ACCIDENTS RESULTING IN
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The Safety for All program in Moroc
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“VALUED CITIZENS” PROGRAM IN SO
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MAIN HR OBJECTIVES ✦ Global Repor
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3.4.3 SOCIAL OBJECTIVES KEY OBJECTI
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OEKOM Oekom, one of Germany’s lea
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TABLE OF CONTENTS > SUSTAINABLE DEV
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TABLE OF CONTENTS > 04 Corporate go
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DIRECTORS OFFICES/FUNCTIONS Carlos
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DIRECTORS OFFICES/FUNCTIONS Jean-Cl
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THE ALLIANCE: n took cognizance of
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In compliance with French legal and
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4.2 MANAGEMENT BODIES AT FEBRUARY 1
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ORGANIZATION CHART AT FEBRUARY 1, 2
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4.3.3 FEES PAID TO STATUTORY AUDITO
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The Chairman of the Board of Direct
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Summary of plans The options grante
Page 151 and 152: CORPORATE GOVERNANCE 04 REPORT OF T
Page 153 and 154: PROCEDURES AND OPERATING METHODS Th
Page 155 and 156: 4.5.2.7 ORGANIZATION OF PROCEDURES
Page 157 and 158: CORPORATE GOVERNANCE 04 STATUTORY A
Page 159 and 160: 05 Renault and its shareholders < T
Page 161 and 162: 5.1.2.2 GENERAL MEETINGS OF SHAREHO
Page 163 and 164: 5.2.4 UNISSUED AUTHORIZED CAPITAL 5
Page 165 and 166: 5.3 MARKET FOR RENAULT SHARES 5.3.1
Page 167 and 168: 5.3.2 RENAULT AND DIAC REDEEMABLE S
Page 169 and 170: 5.4 INVESTOR RELATIONS POLICY ✦ S
Page 171 and 172: TABLE OF CONTENTS > RENAULT AND ITS
Page 173 and 174: TABLE OF CONTENTS > 06 Mixed Genera
Page 175 and 176: APPOINTMENT OF A DIRECTOR The seven
Page 177 and 178: CAPITAL INCREASE AUTHORISATION GIVE
Page 179 and 180: TABLE OF CONTENTS > MIXED GENERAL M
Page 181 and 182: TABLE OF CONTENTS > 07 Financial st
Page 183 and 184: ✦ Global Reporting Initiative (GR
Page 185 and 186: 7.2.3 CONSOLIDATED SHAREHOLDERS’
Page 187 and 188: 7.2.4 CONSOLIDATED STATEMENTS OF CA
Page 189 and 190: A2 - CONSOLIDATED BALANCE SHEETS BY
Page 191 and 192: DECEMBER 31, 2005 (€ million) AUT
Page 193 and 194: (€ million) AUTOMOBILE SALES FINA
Page 195 and 196: B - INFORMATION BY GEOGRAPHIC AREA
Page 197 and 198: 7.2.6.1 ACCOUNTING POLICIES AND SCO
Page 199 and 200: F - Translation of foreign currency
Page 201: Useful lives are regularly reviewed
Page 205 and 206: 7 - OTHER OPERATING INCOME AND EXPE
Page 207 and 208: B - Changes during the year (€ mi
Page 209 and 210: 13 - INVESTMENT IN NISSAN A - Nissa
Page 211 and 212: G - Hedging of the investment in Ni
Page 213 and 214: 15 - INVENTORIES DECEMBER 31, DECEM
Page 215 and 216: A dividend distribution of €3.80
Page 217 and 218: The plans have been valued as follo
Page 219 and 220: C3 - Summary ✦ Global Reporting I
Page 221 and 222: B - Breakdown by category ✦ Globa
Page 223 and 224: B - Breakdown by category DECEMBER
Page 225 and 226: C1 - Financial liabilities of the A
Page 227 and 228: B - Impact of financial instruments
Page 229 and 230: DECEMBER 31, 2005 (€ million) ✦
Page 231 and 232: Interest rate derivatives B3 - Equi
Page 233 and 234: 28 - RELATED PARTIES A - Remunerati
Page 235 and 236: 31 - CONSOLIDATED COMPANIES A - Ful
Page 241 and 242: 1. WITH COGERA Credit facility agre
Page 243 and 244: BALANCE SHEET ✦ Global Reporting
Page 245 and 246: E - Marketable securities Marketabl
Page 247 and 248: 7.4.2.7 INVESTMENTS Changes during
Page 249 and 250: 7.4.2.13 PROVISIONS FOR RISKS AND L
Page 251 and 252: Breakdown by maturity ✦ Global Re
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Renault SA uses derivatives to impl
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7.4.2.23 SUBSEQUENT EVENTS No signi
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08 Additional information < TABLE O
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ADDITIONAL INFORMATION 08 INFORMATI
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8.3.1.3 PRESIDENT AND CHIEF EXECUTI
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COMPOSITION, TASKS AND OPERATING PR
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8.3.3.2 USE AND/OR COMMUNICATION OF
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Renault made its fi rst inventory o
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SITE WATER CONSUMPTION (m 3 thousan
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Nature and scope of the audit We pe
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ADDITIONAL INFORMATION 08 CROSS-REF
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GRI INDICATORS (1) ADDITIONAL INFOR
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2007 Interactive Registration Document - Renault

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