2007 Interactive Registration Document - Renault

13 – INVESTMENT IN NISSAN
A – Nissan consolidation method
Renault holds 44.3% ownership in Nissan. Renault and Nissan have chosen
to develop a unique type of alliance between two distinct companies with
common interests, uniting forces to achieve optimum performance. The Alliance
is organised so as to preserve individual brand identities and respect each
company’s corporate culture.
Consequently:
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Renault does not hold the majority of Nissan voting rights;
the terms of the Renault-Nissan agreements do not entitle Renault to appoint
the majority of Nissan directors, nor to hold the majority of voting rights at
meetings of Nissan’s Board of Directors; at December 31, 2007 as in 2006
and 2005, Renault supplied 4 of the total 9 members of Nissan’s Board of
Directors;
Renault-Nissan b.v., owned 50% by Renault and 50% by Nissan, is the
Alliance’s joint decision-making body for strategic issues concerning either
group individually. Its decisions are applicable to both Renault and Nissan.
This entity does not enable Renault to direct Nissan’s fi nancial and operating
strategies, and cannot therefore be considered to represent contractual
control by Renault over Nissan. The matters examined by Renault-Nissan b.v.
since it was formed have remained strictly within this contractual framework,
and are not an indication that Renault exercises control over Nissan;
Renault can neither use nor infl uence the use of Nissan’s assets in the same
way as its own assets;
C – Changes in the investment in Nissan
(€ million)
✦ Global Reporting Initiative (GRI) Directives
BEFORE
NEUTRALISATION
(SEE RIGHT)
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FINANCIAL STATEMENTS 07
CONSOLIDATED FINANCIAL STATEMENTS
Renault provides no guarantees in respect of Nissan’s debt.
In view of this situation, Renault is considered to exercise signifi cant infl uence
in Nissan, and therefore uses the equity method to include its investment in
Nissan in the consolidation.
B – Nissan consolidated financial statements included
under the equity method in the Renault consolidation
The Nissan accounts included under the equity method in Renault’s fi nancial
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 fi nancial statements quarterly, and annually at
March 31. For the purposes of the Renault consolidation, Nissan results are
included in line with the Renault calendar (the results for the period January to
December are consolidated in Renault’s annual fi nancial statements). The threemonth
difference in Nissan’s consolidation of certain entities in its group (mainly
in Europe and Mexico) has been absorbed over 2007. This has given rise to a
profi t of some €50 million , included in Nissan’s contribution to Renault’s net
income for 2007.
Following Nissan’s equity transactions, Nissan held 2.7% of its own shares at
December 31, 2007, compared to 2.1% at December 31, 2006 and 3.0% at
December 31, 2005. Consequently, Renault’s percentage interest in Nissan was
45.6% at December 31, 2007, compared to 45.3% at December 31, 2006
and 45.7% at December 31, 2005.
NEUTRALISATION OF
44.3% OF NISSAN’S
INVESTMENT
IN RENAULT (1) NET
< TABLE OF CONTENTS >
SHARE IN NET ASSETS NET GOODWILL TOTAL
At December 31, 2005 10,590 (962) 9,628 813 10,441
2006 net income 1,888 - 1,888 - 1,888
Dividend distributed (431) - (431) - (431)
Translation adjustment (1,093) - (1,093) (92) (1,185)
Other changes (2) 144 - 144 (80) 64
At December 31, 2006 11,098 (962) 10,136 641 10,777
2007 net income 1,288 - 1,288 - 1,288
Dividend distributed (456) - (456) - (456)
Translation adjustment (587) - (587) (31) (618)
Other changes (2) (6) - (6) (19) (25)
At December 31, 2007 11,337 (962) 10,375 591 10,966
(1) At December 31, 2007 and 2006, Nissan held 15% of Renault.
(2) Other changes include Renault dividends received by Nissan, the change in actuarial gains and losses on pension obligations, the change in the financial instruments revaluation reserve and changes in
Nissan treasury shares.
Nissan’s contribution to Renault net income for 2006 included an exceptional profi t of €82 million due to fi nalisation of the transfer of part of Nissan’s pension
obligations to the Japanese state (€450 million in 2005).
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Registration Document Renault 2007 207