Groupe Renault - 2019 Universal Registration Document

04

STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL STATEMENTS

RECOVERABLE VALUE OF SALES FINANCING RECEIVABLES (RCI)

Risk identified The sales financing activity is managed by RCI Banque with dedicated offers for individuals and companies as well as the financing of dealer networks. RCI Banque sets aside provisions to cover the risk of losses resulting from the inability of its clients to meet their financial commitments. Since January 1, 2018, RCI Banque applies IFRS 9 "Financial Instruments", which defines in particular a new methodology for estimating provisions based on a prospective model, moving from a provisioning of ascertained credit losses to a provisioning model for expected losses based on a 3-bucket approach: loans without signs of impairment (bucket 1), loans that have signs of impairment (bucket 2) and loans with serious credit impairment or arreage (bucket 3). We consider the amount of credit loss provisioning as a key point of the audit, due to the size of the amount of customer and network loans in the assets of the Group’s balance sheet, the use of numerous parameters and assumptions in the calculation models and the use of judgment made by management in estimating expected credit losses. The provisions related to IFRS 9 are detailed in Note 15 to the consolidated financial statements and amounts to 848 M€ for an outstanding amount of 46 222 M€. Assessing the methodological principles followed for the construction of the models, in order to check their compliance, in their significant aspects, P with the principles of IFRS 9; Assessing the governance established in terms of validation of the key parameters and assumptions applied in these models or included in the ex post P review of actual losses over the past financial year (back-testing); Evaluating key controls over processes, IT applications, management accounting data transfers from the customer and dealer network loan portfolio P and its breakdown by category, and interfaces between applications involved in calculating expected credit losses. In this objective, our audit teams have integrated members with specific skills in auditing information systems and modelling credit risk; On the retail customer credit perimeter: P Testing, and assessing on the basis of a representative sample of customer credit agreements, the appropriateness of the "Probability of Default" P and "Loss in the event of Default" parameters with the corresponding agreements; On the dealer network credit perimeter: P Calculating the « Expected losses » on Germany, Brazil, Spain, France, Italy and Great Britain as at December 31st, 2019, based on the determined P parameters and loss given default exposure at in the event of default; Assessing the methodology applied to determine the prospective component of ECL (forward looking) estimation, in particular on the assumptions P used in the establishment of the scenarios macro-economic factors, the weighting of these scenarios and their impact on risk parameters; Carrying out analytical procedures on the evolution of outstanding retail customer and dealer network loans and credit risk impairment; P Assessing the appropriateness of the information presented in Notes 2-G and 15 to the consolidated financial statements. P Specific Verifications We have also performed, in accordance with professional standards applicable in France, the specific verifications required by laws and regulations of the Group’s information given in the management report of the Board of Directors . We have no matters to report as to their fair presentation and their consistency with the consolidated financial statements. We attest that the consolidated non-financial statement required by Article L. 225-102-1 of the French Commercial Code (Code de commerce), is included in the Group’s management report, it being specified that, in accordance with the provisions of Article L. 823-10 of this Code, we have verified neither the fair presentation nor the consistency with the consolidated financial statements of the information contained therein. Report on Other Legal and Regulatory Requirements Appointment of the Statutory Auditors We were appointed as statutory auditors of Renault by the Annual General Meeting held on April 30, 2014 for KPMG S.A. and on by Order from the Ministry of the Economy of March 27, 1979 for Ernst & Young Audit. As at December 31, 2019, KPMG S.A. was in the sixth year of total uninterrupted engagement and Ernst & Young Audit was in the forty first year of total uniterrupted engagement, of which twenty-six year since securities of the Company were admitted to trading on a regulated market. Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the European Union and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless it is expected to liquidate the Company or to cease operations. The Audit, Riks and Compliance Committee is responsible for monitoring the financial reporting process and the effectiveness of internal control and risks management systems and where applicable, its internal audit, regarding the accounting and financial reporting procedures. The consolidated financial statements were approved by the Board of Directors. Our audit response Our procedures mainly consisted in:

336 GROUPE RENAULT I UNIVERSAL REGISTRATION DOCUMENT 2019

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