2007 Interactive Registration Document - Renault

02 RISK
MANAGEMENT REPORT
MANAGEMENT
2.3.3 RCI BANQUE CUSTOMER AND NETWORK RISK
Risks linked to customer loan quality are assessed using a scoring system
and monitored according to customer segment, i.e. consumer, enterprise or
dealer.
The procedures for granting loans to individual and corporate customers are
based on credit-scoring systems and searches of external databases. Disputes
are managed on a case-by-case basis, in accordance with a strict set of
procedures that comply with the regulatory requirements set down by banking
supervisors. The aim of these procedures is to recover quickly the outstanding
sums or the vehicles, either amicably or through the courts The cost of retail
risk in 2007 is 0.01 point below target (0.69%). The Group’s target for the cost
of retail risk in 2008 is 0.61% of outstandings.
Financing is granted to the network on the basis of an internal rating system
that takes into account the fi nancial position of dealers. A policy of standardizing
the rules for network risk (notably as regards provisioning) has been in place
for several years. This has made it possible to strengthen the monitoring and
provisioning of risk. The cost of retail risk has taken account since 2002 of
2.3.4 LEGAL RISKS
2.3.4.1 DESCRIPTION OF THE INTERNAL
CONTROL PROCESS
From the legal standpoint, internal control is based on two main guidelines:
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responsive reporting, which relies on the networking and meshing of the legal
function within the Renault group via a dual system of line and staff reporting.
Attorneys are selected on the basis of qualitative criteria and cost/delivery
ratios. The enforcement of these selection criteria is reviewed annually;
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the precautionary principle, which stems from two factors:
each member of the legal function has a highly developed sense of
responsibility and is used to working on a collaborative, cross-functional
and ethical basis at all times,
legal teams are brought in at a very early stage for major cases and play
a proactive role in solving subsequent disputes.
2.3.4.2 GRANTING OF LICENSES FOR
INDUSTRIAL PROPERTY RIGHTS
The Group may use patents held by third parties under licensing agreements
negotiated with such parties.
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the new European regulation on car distribution as well as the downturn in the
economic situation.
RCI BANQUE: TOTAL LOSSES ON CUSTOMER FINANCING
(% of total average loans oustanding)
0.90
0.80
0.70
0.60
0.78
0.50
0.40
0.30
0.20
0.10
0.00
0.54 0.52
2000 2001 2002
2006 2007
76 Registration Document Renault 2007
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0.68
2003
0.54
2004
IFRS
0.72
2005
IFRS
Each year, Renault s.a.s. files several hundred patents (see c hapter 2.2,
Research and Development), some of which are included in fee-paying licenses
granted to third parties.
As part of the sale of Renault V.I. to Volvo, Renault granted a license to use
the Renault brand name to the Volvo group in a contract signed on January 2,
2001 regarding commercial vehicles (3.5 tons and over). This is a perpetual
worldwide license used by the Volvo group at its own risk.
Furthermore, under an agreement signed on August 5, 2000 Samsung granted
Renault Samsung Motors a worldwide non-exclusive license to use the Samsung
brand name on the vehicles that it assembles and manufactures in South Korea.
This license initially runs until 2010, but may be renewed by an amendment.
On September 14, 2004 the European Commission issued recommendations
for amending Directive 98/71 concerning the protection of designs and models.
These recommendations call for the abrogation of protection of spare parts
under design law. This proposal has been approved by the European Parliament
with an amendment providing for a fi ve-year transition period, and it must now
be discussed by the European Council of Ministers. The sale of copies of spare
parts after this date could have a negative impact on the earnings of the Group,
which currently generates around 1.5% of its revenues from the sale of so-called
captive parts, which are protected under design law.
0.61
0.68
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