Annual Report Renault 2003
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Annual Report Renault 2003 ■ Renault group and strategy ■ Corporate governance ■ Renault’s performance in 2003 ■ Consolidated fi nancial statements ■ Main subsidiaries and group organization chart ■ Draft resolutions of the general meeting of shareholders on April 30, 2004 ■ Supplemental information Annual Report Renault 2003 Management report approved by the Board of Directors on February 24, 2004. Contents 1. RENAULT GROUP STRATEGY 7 1.1. Presentation of the company and the Group 9 1.1.1. Background and highlights 9 1.1.2. Renault shareholders on December 31, 2003 10 1.1.3. 5-year consolidated figures 11 1.1.4. Main activities 11 1.1.4.1. Automobile Division 12 1.1.4.2. Sales Financing Division 19 1.1.4.3. Strategic shareholdings 19 1.2. The Renault-Nissan Alliance 21 1.2.1. Aims and governance 21 1.2.1.1. The phases and aims of the Alliance 21 1.2.1.2. Governance and operational structure of the Alliance 23 1.2.2. Areas of Renault-Nissan cooperation 25 1.2.2.1. Operational steering bodies and their scope 25 1.2.2.2. Sharing industrial resources 26 1.2.2.3. Close commercial fit 29 1.2.2.4. Staff exchanges 30 1.2.3. Nissan's results 30 1.2.3.1. Sharp increase in earnings 30 1.2.3.2. Nissan makes a growing contribution to Renault’s results 32 1.2.4. Overall performance and financial indicators 32 1.2.4.1. Industrial and commercial presence 32 1.2.4.2. Value of joint operations 35 1.2.4.3. Alliance financial indicators 35 1.3. The profitable growth strategy 38 Goal 1 : Build recognition for our brand identity 38 Goal 2 : Be the most competitive manufacturer on our markets in terms of quality, costs and delivery times 39 Goal 3 : Extend our international reach 40 Goal 4 : Develop Renault's core values 41 Goal 5 : Translate success into financial performance 43 This symbol indicates informations for relating to the guidelines of the Global Reporting Initiative (GRI) on sustainable development reports. See page 250, for a cross-index of GRI indicators. This @ symbol means that more information is available from Renault's sustainable development website, at the following address : http : //www.sustainability.renault.com, "The men and women of Renault". Annual Report 2 Renault 2003 2. CORPORATE GOVERNANCE 45 2.1. Composition and operating procedures of the Board of Directors 48 2.1.1. Composition and operating procedures of the Board of Directors 48 2.1.2. Audit of the Board of Directors 54 2.1.3. Assessment of director independence 54 2.1.4. Internal regulation and Directors' Charter 55 2.1.5. Specialized committees of the Board of Directors in 2003 55 2.1.6. Directors' fees 57 2.2. Composition and operating procedures of management bodies 58 2.2.1. Group Executive Committee 58 2.2.2. Renault Management Committee 58 2.2.3. Group Executive Committee and Management Committee at January 1, 2004 58 2.3. Audits 60 2.3.1. Auditors 60 2.3.2. Fees paid to statutory auditors and their networks 61 2.4. Interest of senior executives 62 2.4.1. Remuneration of senior executives and corporate officers 62 2.4.2. Stock options granted to senior executives and the company's corporate officers 63 2.5. Renault and its shareholders 66 2.5.1. Capital and voting rights 66 2.5.2. Share ownership 66 2.5.3. Market Trading of Renault shares 68 2.5.4. Dividends 70 2.5.5. Disclosure policy 70 2.6. Risk management 72 2.6.1. Financial risk 72 2.6.2. Operational risk 78 2.6.3. Legal risk 81 2.6.4. Distribution 83 2.6.5. Human resources 83 2.6.6. Other risks 83 2.7. Chairman’s report on internal control procedures 84 2.7.1. Introduction 84 2.7.2. General control and management environment 85 2.7.3. Management of principal risks 87 2.7.4. Organization of procedures for preparing financial and accounting information 87 2.7.5. The Renault-Nissan Alliance 88 2.8. Auditors’ report on the report of the Chairman 89 Annual Report 3 Renault 2003 3. RENAULT’S PERFORMANCE IN 2003 90 3.1. Economic performance and results in 2003 92 3.1.1. Sales performance and results in 2003 92 3.1.2. Financial results in 2003 101 3.1.3. Outlook 107 3.2. Employee relations performance 108 3.2.1. Workforce 108 3.2.2. Human resources policy 109 3.2.2.1. Forward thinking 109 3.2.2.2. Attracting and motivating employees 111 3.2.2.3. Promoting involvement 117 3.3. Environmental performance 119 3.3.1. The challenges 120 3.3.2. Life-cycle environmental management 122 3.3.3. Protecting the environment and remaining competitive 125 3.3.4. Reducing the environmental impact of activities 126 3.3.5. Maintaining the value of our assets 131 3.3.6. Organizing communications 132 3.4. Social performance 134 3.4.1. Code of good conduct 134 3.4.2. Renault and its stakeholders 134 3.4.3. Renault: Architect of Sustainable Mobility 135 3.4.4. Renault and road safety 137 3.4.5. Contribution to civil society 140 3.5. Research and Development policy 144 3.5.1. Innovation across the range 144 3.5.2. Excellence in safety standards 144 3.5.3. Guaranteeing traveling comfort 145 3.5.4. Protecting the environment 145 3.5.5. The Alliance with Nissan, a catalyst for efficiency 146 Annual Report 4 Renault 2003 4. FINANCIAL STATEMENTS 147 4.1. Consolidated Financial statements 148 4.1.1. Auditors' report on the consolidated financial statements 148 4.1.2. Consolidated financial statements 150 4.2. Parent company Financial statements 202 4.2.1. Auditors' report on the financial statements of the parent company only 202 4.2.2. Special report of the Statutory Auditors regarding the data used to calculate the remuneration of the redeemable shares 204 4.2.3. Statutory auditor's report on regulated agreements 205 4.2.4. Renault SA parent company financial statements 206 5. MAIN SUBSIDIARIES & ORGANIZATION CHART 217 5.1. Main subsidiaries 218 5.2. Organization chart 221 6. GENERAL INFORMATION ABOUT RENAULT 223 6.1. Legal information about Renault 224 6.1.1. General information 224 6.1.2. Special provisions of the articles of incorporation 224 6.2. General information about Renault’s share capital 226 6.2.1. Change in share capital 226 6.2.2. Share capital 226 6.2.3. Changes in capital ownership over five years 226 6.2.4. Stock option plan for subscription to or acquisition of Renault shares 227 6.2.5. Capital increase reserved for employees 227 6.2.6. Capital increase by issuance of securities 227 Annual Report 5 Renault 2003 7. MIXED (ORDINARY AND EXTRAORDINARY) GENERAL MEETING OF APRIL 30, 2004 228 7.1. Presentation of resolutions 229 7.1.1. Approval of the annual accounts and appropriation of the income 229 7.1.2. Agreements referred to in article L.225-38 of the Commercial Code 229 7.1.3. Renewal of two directors' terms in office 229 7.1.4. Ratification of the appointment of three directors 230 7.1.5. Release of three directors from liability as may have arisen in the performance of their duties 230 7.1.6. Report of the statutory auditors on equity loans 230 7.1.7. Authorization for the Company to trade in its own shares on the stockmarket 230 7.1.8. Authorization to issue bonds 231 7.1.9. Authorization to cancel holdings of the Company's own shares 231 7.1.10. Maintaining conditions for fixing the issue price of shares 231 7.1.11. Amendments of articles of association 232 7.1.12. Appointment of a director 232 7.1.13. Formalities 232 7.2. Draft resolutions 233 8. SUPPLEMENTAL INFORMATION 238 Internal regulations of the Board of Directors 239 Board of Directors and committees 239 Director's Charter 242 Procedure concerning the use and/or communication of insider information 243 Environmental data 245 Methodological comments concerning the "Environmental performance of Renault group sites" table 2003 245 Environmental performance of Renault group sites 246 Environmental performance of passenger cars 248 Report on the Environmental Data relating to the Renault Group Sites 249 GRI indicators: cross reference table 250 Annual Report 6 Renault 2003 1. Renault group strategy 1 Renault group strategy 1.1. Presentation of the Company and the Group 9 1.1.1. Background and highlights 9 1.1.2. Renault shareholders on December 31, 2003 10 1.1.3. 5-year consolidated figures 11 1.1.4. Main activities 11 1.1.4.1. Automobile Division 12 1.1.4.2. Sales Financing Division 19 1.1.4.3. Strategic shareholdings 19 Annual Report 7 Renault 2003 1. Renault group strategy 1.2. The Renault-Nissan Alliance 21 1.2.1. Aims and governance 21 1.2.1.1. The phases and aims of the Alliance 21 1.2.1.2. Governance and operational structure of the Alliance 23 1.2.2. Areas of Renault-Nissan cooperation 25 1.2.2.1. Operational steering bodies and their scope 25 1.2.2.2. Sharing industrial resources 26 1.2.2.3. Close commercial fit 29 1.2.2.4. Staff exchanges 30 1.2.3. Nissan's results 30 1.2.3.1. Sharp increase in earnings 30 1.2.3.2.