Groupe Renault - 2019 Universal Registration Document

RENAULT: A RESPONSIBLE COMPANY

ANNUAL GENERAL MEETING OF RENAULT ON APRIL 24, 2020

FINANCIAL STATEMENTS

GROUPE RENAULT

CORPORATE GOVERNANCE

RENAULT AND ITS SHAREHOLDERS

ADDITIONAL INFORMATION

CONSOLIDATED FINANCIAL STATEMENTS

In the event of volatile macroeconomic situations that may arise in emergent countries and potentially affect their banking systems, the Group introduces an action plan to step up counterparty risk monitoring, and makes adjustments to the counterparty limits if necessary. The exposure on each banking group is assessed monthly on a consolidated basis, with the Automotive and Sales Financing entities. The Group is not subject to any significant risk concentration for its operations on the financial and banking markets. No losses due to default by a banking counterparty were recorded in 2019.

COUNTERPARTY RISK ON OTHER FINANCIAL ASSETS All entities of the Automotive and Sales Financing segments use a fully-coordinated counterparty risk management procedure involving a scoring system, based principally on the counterparties’ long-term credit rating and equity level. For each of these entities with significant exposure, compliance with authorized limits is monitored on a daily basis under strict internal control procedures. The Group produces a consolidated monthly report covering all its bank counterparties, organized by credit rating. This report provides a detailed analysis of compliance with limits in terms of amount, maturity and type, as well as a list of the main exposures. Most deposits are contracted with large network banks and generally have terms shorter than 90 days, as this allows a good spread of the risk and lowers the systemic risk.

04

IMPAIRMENT AND PROVISIONS ESTABLISHED TO COVER COUNTERPARTY RISKS

Reversals

December 31, 2019

December 31,

Notes

2018 Impairment

For application Of unused residual amounts

Other

(€ million)

Impairment of Sales Financing receivables impairment of financing for end-customers

15 15 15 16 17 22 20

(780) (669) (111) (779) (320)

(373) (295)

198 153

108

(1) (1)

(848) (747) (101) (815) (339)

65 43

impairment of dealership financing Impairment of Automotive receivables Impairment of other receivables Impairment of other financial assets Provisions (commitments given)

(78) (20) (19)

45

-

5

11 (32)

- -

- -

- - -

(11)

6

(5)

5

11

(1)

(9)

6

TOTAL COVERAGE OF COUNTERPARTY RISKS

(1,885)

(395)

202

110 (33)

(2,001)

Management of AVTOVAZ Group financial 25 – C – risks The AVTOVAZ Group’s principal financial liabilities comprise bank loans, lease liabilities, trade payables and loans received. The main purpose of these financial liabilities is to raise finance for AVTOVAZ Group’s operations. It has various financial assets such as trade receivables, cash, short-term deposits and loans issued, which arise directly from its operations. No trading in derivatives was undertaken in 2019. The main risks arising from the Group’s financial instruments are foreign currency risk, credit risk and liquidity risk. The AVTOVAZ Group is not exposed to any equity price risk.

Foreign exchange risks C1 The AVTOVAZ Group carries out sales both inside and outside the Russian Federation. As a result, the AVTOVAZ Group has currency exposures. Such exposure arises from sales in currencies other than AVTOVAZ’s functional currency, i.e. the Russian rouble. Almost 97% of sales and 94% of costs are denominated in roubles. Risk management is carried out by PAO AVTOVAZ Finance Department, which identifies, evaluates and manages foreign exchange risks by analyzing the net position in each foreign currency. It has not entered into any hedging arrangements in respect of its foreign currency. The following table demonstrates the sensitivity to a change in the US dollar, euro, Japanese yen, exchange rates of AVTOVAZ Group’s profit before tax.

% increase/(decrease) in exchange rate Effect on profit before tax

(€ million)

2019 EUR/RUB JPY/RUB USD/RUB EUR/RUB JPY/RUB USD/RUB

13,00 13,00 13,00 -11,00 -13,00 -13,00

(3)

0 0 2 0 0

407

GROUPE RENAULT I UNIVERSAL REGISTRATION DOCUMENT 2019