Contents

  • 1. MESSAGE FROM THE PRESIDENT AND CHIEF EXECUTIVE OFFICER ON THE FINANCIAL YEAR 2020 .... 4

  • 2. CORPORATE OVERVIEW .......................................................................................................................... 6

    2.1. HISTORY AND DEVELOPMENT OF STMICROELECTRONICS .................................................................................. 6

    2.2. STRATEGY & OBJECTIVES ......................................................................................................................... 6

    2.3. ORGANIZATIONAL STRUCTURE ................................................................................................................... 7

    2.4. PRODUCTS AND ACTIVITIES ....................................................................................................................... 7

    2.5. SALES, MARKETING AND DISTRIBUTION ....................................................................................................... 8

    2.6. RESEARCH & DEVELOPMENT .................................................................................................................... 8

    2.7. SUSTAINABILITY ..................................................................................................................................... 9

  • 3. REPORT OF THE MANAGING BOARD ...................................................................................................... 10

    3.1. STATEMENT OF THE SOLE MEMBER OF THE MANAGING BOARD ......................................................................... 10

    3.2. BUSINESS OVERVIEW & PERFORMANCE ....................................................................................................... 10

    3.2.1. Results highlights for the year 2020 ......................................................................................... 10

    3.2.2. Business overview .................................................................................................................... 11

    3.2.3. Key announcements ................................................................................................................. 20

    3.2.4. Financial outlook: Capital investment ...................................................................................... 23

    3.2.5. Liquidity and financial position ................................................................................................ 23

    3.2.6. Financial risk management ...................................................................................................... 27

    3.3. RISK MANAGEMENT AND INTERNAL CONTROL ............................................................................................... 29

    3.3.1. Risk Management .................................................................................................................... 29

    3.3.2. Internal Control ........................................................................................................................ 49

  • 4. REPORT OF THE SUPERVISORY BOARD ................................................................................................... 50

    4.1. COMPOSITION OF THE SUPERVISORY BOARD ................................................................................................. 50

    4.2. MEETINGS AND ACTIVITIES OF THE SUPERVISORY BOARD ................................................................................. 54

    4.3. AUDIT COMMITTEE ................................................................................................................................ 56

    4.4. COMPENSATION COMMITTEE .................................................................................................................... 56

    4.5. STRATEGIC COMMITTEE ........................................................................................................................... 56

    4.6. NOMINATING AND CORPORATE GOVERNANCE COMMITTEE .............................................................................. 57

    4.7. SECRETARIAT AND CONTROLLERS ............................................................................................................... 57

    4.8. REMUNERATION REPORT .......................................................................................................................... 57

    4.8.1. Supervisory board remuneration ............................................................................................. 58

    4.8.2. Senior Management remuneration .......................................................................................... 59

    4.8.3. Managing Board remuneration ............................................................................................... 61

    4.8.4. Share ownership ....................................................................................................................... 69

    4.8.5. Stock awards and options ........................................................................................................ 69

  • 5. CORPORATE GOVERNANCE ..................................................................................................................... 70

5.1. COMMITMENT TO THE PRINCIPLES OF GOOD CORPORATE GOVERNANCE ............................................................... 70

5.2. GENERAL MEETING OF SHAREHOLDERS ....................................................................................................... 72

5.3. SUPERVISORY BOARD .............................................................................................................................. 74

5.4. MANAGING BOARD ................................................................................................................................ 75

5.5. INDEMNIFICATION OF MEMBERS OF OUR MANAGING BOARD AND SUPERVISORY BOARD ......................................... 79

5.6. RISK MANAGEMENT AND CONTROL SYSTEMS ............................................................................................... 79

5.7. REQUIRED INFORMATION ARTICLE 10 TAKEOVER DIRECTIVE ............................................................................ 79

5.8. CODE OF ETHICS .................................................................................................................................... 82

5.9. DEVIATIONS FROM THE CODE ................................................................................................................... 82

5.10. MAJOR SHAREHOLDERS .......................................................................................................................... 83

5.11. SHAREHOLDERS' AGREEMENTS .................................................................................................................. 85

5.11.1. STH Shareholders' Agreement ............................................................................................... 85

  • 6. DIVIDEND POLICY ............................................................................................................................... 87

  • 7. CONSOLIDATED FINANCIAL STATEMENTS ........................................................................................ 88

7.1. CONSOLIDATED INCOME STATEMENT .......................................................................................................... 88

7.2. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ............................................................................... 89

7.3. CONSOLIDATED STATEMENT OF FINANCIAL POSITION ........................................................................................ 90

7.4. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ........................................................................................ 91

7.5. CONSOLIDATED STATEMENT OF CASH FLOWS ............................................................................................... 93

7.6. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ................................................................................. 94

7.6.1. Corporate information ........................................................................................................... 94

7.6.2. Basis of preparation ............................................................................................................... 94

7.6.3. Statement of compliance ....................................................................................................... 94

7.6.4. Basis of consolidation ............................................................................................................. 95

7.6.5. Changes in accounting policies .............................................................................................. 96

7.6.6. Standards issued but not yet effective ................................................................................... 96

7.6.7. Summary of significant accounting policies ........................................................................... 97

7.6.8. Critical accounting estimates and judgments ........................................................................ 111

7.6.9. Investments in subsidiaries .................................................................................................... 116

7.6.10. Business Combination ............................................................................................................ 117

7.6.11. Property, plant and equipment .............................................................................................. 119

7.6.12. Leases ..................................................................................................................................... 121

7.6.13. Intangible assets .................................................................................................................... 122

7.6.14. Goodwill ................................................................................................................................. 124

7.6.15. Other financial assets and financial liabilities ........................................................................ 126

7.6.16. Other non‐current assets ....................................................................................................... 142

7.6.17. Inventories ............................................................................................................................. 143

7.6.18. Trade accounts receivable ..................................................................................................... 143

7.6.19. Other receivables and assets ................................................................................................. 145

7.6.20. Cash and cash equivalents ..................................................................................................... 146

7.6.21. Equity ..................................................................................................................................... 146

7.6.22. Provisions ............................................................................................................................... 151

7.6.23. Employee benefits .................................................................................................................. 152

7.6.24. Trade accounts payable, other payables and accrued liabilities ........................................... 157

7.6.25. Significant categories of income ............................................................................................ 157

7.6.26. Revenues ................................................................................................................................ 158

7.6.27. Segment information ............................................................................................................. 159

7.6.28. Expenses by nature ................................................................................................................ 161

7.6.29. Other income / expenses ....................................................................................................... 162

7.6.30. Finance income / costs ........................................................................................................... 163

7.6.31. Components of other comprehensive income ........................................................................ 164

7.6.32. Income tax ............................................................................................................................. 164

7.6.33. Earnings per share ................................................................................................................. 168

7.6.34. Related party ......................................................................................................................... 168

7.6.35. Commitments, contingencies, claims and legal proceedings ................................................. 172

7.6.36. Financial risk management objectives and policies ............................................................... 174

  • 8. COMPANY'S FINANCIAL STATEMENTS ............................................................................................. 178

    8.1. COMPANY'S STATEMENT OF FINANCIAL POSITION ......................................................................................... 178

    8.2. COMPANY'S INCOME STATEMENT ............................................................................................................. 179

    8.3. NOTES TO COMPANY'S FINANCIAL STATEMENTS .......................................................................................... 179

    8.3.1. General ................................................................................................................................... 179

    8.3.2. Basis of Presentation .............................................................................................................. 179

    8.3.3. Summary of significant accounting policies ........................................................................... 180

    8.3.4. Lease right‐of‐use assets ........................................................................................................ 180

    8.3.5. Intangible assets .................................................................................................................... 182

    8.3.6. Investments in subsidiaries .................................................................................................... 182

    8.3.7. Other financial assets and financial liabilities ........................................................................ 184

    8.3.8. Cash and cash equivalents ..................................................................................................... 188

    8.3.9. Group companies interest‐bearing short‐term loans ............................................................... 188

    8.3.10. Other Group companies receivables and payables ................................................................ 188

    8.3.11. Equity ..................................................................................................................................... 189

    8.3.12. Other payables and accrued liabilities ................................................................................... 191

    8.3.13. Interest‐bearing loans and borrowings .................................................................................. 191

    8.3.14. Other non‐current liabilities ................................................................................................... 195

    8.3.15. Guarantees and contingencies ............................................................................................... 195

    8.3.16. General and administrative expenses .................................................................................... 195

    8.3.17. Financial income and expenses .............................................................................................. 196

    8.3.18. Other income (expenses) ....................................................................................................... 196

    8.3.19. Contractual obligations .......................................................................................................... 197

    8.3.20. Related party transactions ..................................................................................................... 197

    8.3.21. Auditors' fees ......................................................................................................................... 197

    8.3.22. Proposed cash dividend ......................................................................................................... 197

  • 9. OTHER INFORMATION ........................................................................................................................... 199

    9.1. AUDITORS' REPORT .............................................................................................................................. 199

    9.2. APPROPRIATION OF RESULTS - PROVISIONS IN COMPANY'S ARTICLES OF ASSOCIATION .......................................... 199

    9.3. BRANCHES ......................................................................................................................................... 199

  • 10. IMPORTANT DATES .............................................................................................................................. 210

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STMicroelectronics NV published this content on 25 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 March 2021 21:00:05 UTC.