2007 Interactive Registration Document - Renault

DECEMBER 31, 2005
(€ million)
✦ Global Reporting Initiative (GRI) Directives
FINANCIAL ASSETS OTHER ASSETS
FINANCIAL STATEMENTS 07
CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL LIABILITIES AND SALES
FINANCING DEBTS
OTHER
LIABILITIES
NON-CURRENT CURRENT CURRENT NON-CURRENT CURRENT CURRENT
Cash flow hedges - - - - - -
Fair value hedges - - - - - 6
Hedge of the net investment in Nissan
Derivatives not classified as hedges and derivatives held
103 53 - - - -
for trading - 79 6 - 87 -
TOTAL FOREIGN EXCHANGE RISKS 103 132 6 - 87 6
Cash flow hedges 25 - 23 12 109 -
Fair value hedges
Derivatives not classified as hedges and derivatives held
53 - 61 - 2 -
for trading 208 129 87 159 188 -
TOTAL INTEREST RATE RISKS 286 129 171 171 299 -
Cash flow hedges - - - - - -
Fair value hedges
Derivatives not classified as hedges and derivatives held
- - - - - -
for trading - - 82 - - 7
TOTAL COMMODITY RISKS - - 82 - - 7
TOTAL 389 261 259 171 386 13
The specialist subsidiary Renault Finance handles the Automobile division’s
short-term interbank investments. It is also Nissan’s counterparty in derivatives
trading to hedge exchange, interest rate and commodity risks.
The fair values of derivatives reported in the Group’s consolidated balance sheet
assets and liabilities mainly relate to Renault Finance’s business conducted on
its own behalf and its transactions with Nissan.
B – Management of financial risks
Given their nature, the fi nancial instruments held by the Group are exposed to
the following fi nancial risks:
n
n
n
n
market risks (foreign exchange, interest rate, equity and commodity risks);
counterparty risks;
liquidity risks;
credit risks (see notes 16 and 17).
The sensitivity analyses refl ect the accounting sensitivity generated by fi nancial
instruments. This information does not therefore represent the Group’s economic
sensitivity.
B1 – Foreign exchange risks
Management of foreign exchange risks
The Automobile division is exposed to foreign exchange risks in the course of its
industrial and commercial business. These risks are monitored and centralised
by Renault’s Cash and Financing department.
It is Renault’s general policy not to hedge future operating cash fl ows in foreign
currencies.
The s ubsidiaries’ fi nancing cash fl ows in foreign currencies are hedged in the
same currencies when they are managed by Renault SA.
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Equity investments are not hedged, except for the portion of Nissan’s
shareholders’ equity expressed in yen, totalling ¥824 billion at December 31,
2007 (note 13-G).
Renault Finance m ay undertake operations unrelated to operating cash fl ows
on its own behalf. This has no signifi cant impact on Renault’s consolidated
results.
The Sales fi nancing division has low exposure to foreign exchange risks since
its policy is to provide refi nancing for subsidiaries in their own currencies.
The Group made no major changes to its foreign exchange risk management
policy in 2007.
Analysis of the sensitivity of financial instruments to foreign exchange risks
This analysis concerns the sensitivity to foreign exchange risks of monetary
assets and liabilities (including inter-company balances) and derivatives in a
currency other than the currency of the entity that holds them. However, it does
not take into account items covered by fair value hedges (hedged assets or
liabilities and derivatives), for which changes in fair value of the hedged item
and the hedging instrument almost totally offset each other in the income
statement.
The Group’s exposure essentially concerns fi nancial instruments in Japanese
yen.
Impacts are estimated solely on the basis of instant conversion of the fi nancial
assets and liabilities concerned at year-end after application of the 1% variation
in the Euro exchange rate.
The impact on equity concerns the 1% variation in the Euro against other
currencies applied to available-for-sale fi nancial assets and cash fl ow hedges
and the partial hedge of the investment in Nissan. All other impacts affect net
income.
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Registration Document Renault 2007 227