Groupe Renault - 2019 Universal Registration Document

04

RENAULT SA ANNUAL FINANCIAL STATEMENTS FINANCIAL STATEMENTS

Foreign exchange gains and losses 4.4.2.4 Foreign exchange gains and losses in 2019 amount to €1 million (€1 million in 2018), and comprise the following: A foreign exchange gain of €1 million on treasury notes (mainly in P US dollars and pounds sterling).

Other financial income and expenses 4.4.2.5 In 2019, the financial income and expenses, amounting to a net loss of €132 million (loss of €120 million in 2018) principally comprise interest paid and similar expenses totaling €122 million, €13 million for impairment on treasury shares and a gain of €5 million in accretion of tax receivables sold during the year.

Details of interest paid and other similar expenses are as follows:

2019

2018

(€ million)

Net accrued interest after swaps on bonds*

(66)

(73)

Net accrued interest after swaps on borrowings from credit institutions Accrued interest on termination of borrowings from subsidiaries

(4)

(5) (9)

(19) (20)

Accrued interest on redeemable shares

(21)

Other financial expenses

(1)

Other (treasury notes and brokers’ commissions)

(13)

(14)

TOTAL (123) The net interest on bonds comprises accrued and paid interest amounting to €66 million (€74 million in 2018); there was no accrued and received interest on swaps (€1 * million in 2018). (122)

Income tax 4.4.2.7 As Renault SA elected to determine French income taxes under the domestic tax consolidation regime when it was formed, this regime has applied to the group in which Renault SA is taxed in France since January 1, 2004. French subsidiaries that are more than 95% owned by Renault SA pay their income taxes directly to the Company as head of the tax group under this regime. Each entity included in the domestic tax consolidation records its theoretical taxes as if it was taxed separately. The tax saving generated by this system is treated as income for Renault SA, the company heading the tax group. The Renault tax group applies the principle of neutrality, Renault SA is not obliged to reallocate or reimburse the subsidiaries for the tax savings resulting from utilization of their tax losses. The maximum allowable amount of losses carried forward against taxable income is €1 million plus 50% of the taxable income above that amount. The balance can be carried forward indefinitely. These rules are applicable: for determining the income/loss of the tax consolidation group; P by convention, for determining the income/loss of each company P included in the tax consolidation serving as a base for their calculation of income tax. These rules on tax loss carryforwards apply to all losses existing at the year-end, whatever their origin. In practice, Renault SA has not charged deficits for the determination of its 2019 taxable income which amounts to -€1,358 million. In 2019, the tax consolation group waived the reduced rate on industrial royalties as permitted by Article 39 terdecies of the CGI. The income generated by income taxes in 2019 was €85 million, corresponding to the income tax paid by the subsidiaries of Renault SA, including any tax adjustments, as if they were taxed separately.

In 2019, the €66 million of interest received or paid mainly comprised: €16 million on the EMTN 44 bond issued on March 5, 2014, P €15 million on the EMTN 53 bond issued on September 28, 2018, P €7.5 million on the EMTN 49 bond issued on March 8, 2017, P €7.5 million on the EMTN 51 bond issued on November 21, 2017, P €7 million on the EMTN 52 bond issued on April 18, 2018, P €7 million on the EMTN 54 bond issued on June 24, 2019, P €2 million on the Samurai 19 bond issued on July 6, 2017, P €1 million on the Samurai 20 bond issued on July 9, 2017, P €1 million on the Samurai 21 bond issued on July 3, 2018, P €1 million on the EMTN 55 bond issued on October 04, 2019. P The net interest receivable on the swapped portion of bonds and borrowings from credit institutions amounted to €1 million: €2 million on the paying leg and €3 million on the receiving leg. 4.4.2.6 In 2018, the Share the Future plan generated an extraordinary loss of €11 million for Renault SA. There were no extraordinary operations in 2019. Extraordinary items

428 GROUPE RENAULT I UNIVERSAL REGISTRATION DOCUMENT 2019

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