Groupe Renault - 2020 Universal Registration Document

417 GROUPE RENAULT I UNIVERSAL REGISTRATION DOCUMENT 2020 04 STATUTORY AUDITORS’ REPORTS 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 Valuation of equity investments Risk identified At December 31, 2020, equity investments are accounted for in Renault balance sheet for 14,296 million euros, representing one of the most significant caption of the total assets. Investments are valued at acquisition cost at the date of entry, and their recoverable value is then assessed by management as described in note 2.1 to the notes to the individual financial statements of Renault. With respect to Renault’s investments in fully controlled companies, Renault has opted for the equity method. The value of these investments is determined based on their contribution to the consolidated equity of Renault, and the change in the overall share of shareholders’ equity corresponding to these interests is recorded in shareholders’ equity under “Equity valuation difference”. The other investments mainly relate to Renault’s equity investment in Nissan. This investment is valued at the lower amount between the book value and the value, which takes into account the share of net assets and profitability prospects of Nissan. The assessment of the recoverable value of Renault’s investment in Nissan requires judgement from management. In this context, we consider that the valuation of the investments was a key audit matter. Our audit response In order to assess the reasonableness of the value-in-use of equity investments, we mainly relied on the work performed for the purposes of the audit of Renault's consolidated financial statements. Our work mainly consisted in: Regarding Renault’s investments in controlled companies: check that the shareholders’ equity in each of these investments corresponds to their contribution to the consolidated equity of Renault; P check that Renault has performed the necessary adjustments, if any, to take into account potential impairment losses accounted for in the P group’s consolidated financial statements. Regarding Renault’s investment in Nissan: assess the reasonableness of the main assumptions used by Renault in the impairment test performed to assess the recoverable value of its P investment in Nissan, by referring to Nissan’s stock market value, mid-term plan and historical performance and the growth prospects of the Automotive sector. Specific Verifications We have also performed, in accordance with professional standards applicable in France, the specific verifications required by laws and regulations. Information given in the management report and other documents with respect to the financial position and the financial statements provided to the shareholders We have no matters to report as to the fair presentation and the consistency with the financial statements of the information given in the management report of the Board of Directors and in the other documents with respect to the financial position and the financial statements provided to the shareholders. We attest the fair presentation and the consistency with the financial statements of the information relating to payment deadlines mentioned in Article D. 441-4 of the French Commercial Code ( Code de commerce ). Report on corporate governance We attest that the Board of Director's report on corporate governance sets out the information required by Articles L. 225-37-4, L. 22-10-10 and L. 22-10-9 of the French Commercial Code ( Code de commerce ). Concerning the information given in accordance with the requirements of Article L. 22-10-9 of the French Commercial Code ( Code de commerce ) relating to remunerations and benefits received by or awarded to the directors and any other commitments made in their favor, we have verified the consistency with the financial statements, or with the underlying information used to prepare these financial statements and, where applicable, with the information obtained by your company from controlled companies included in the scope of consolidation. Based on these procedures, we attest the accuracy and fair presentation of this information. With respect to the information relating to items that your company considered likely to have an impact in the event of a public takeover bid or exchange offer, provided pursuant to Article L. 22-10-11 of the French Commercial Code, we have agreed this information to the source documents communicated to us. Based on these procedures, we have no observations to make on this information.