PSA - 2019 Universal Registration Document

PEUGEOT S.A. FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 Statutory Audit Report on the financial statements

VALUATION OF INVESTMENTS IN SUBSIDIARIES

Riskidentified

Ourresponse

As at 31 December 2019, investments in subsidiariesare recorded on the balance sheet for a net carryingamount of M€ 18,740, i.e. approximately 75% of totalassets. As statedin Note 1.Ato the financialstatements, investmentsare recognized at acquisition cost at their entry date. For each investment, in theeventof a sustainedreduction in its valuein use and if its value in use is less than its gross carrying amount, a provision for impairment is recognized for the shortfall. Thevaluein useof investments is determinedbasedon oneof the followingmethods: themarketvalueof the shares,the economic valueof theconsolidated shareholders’ equityof thebusinessthat theyrepresent, in turnestablishedbasedon the futurecashflows takenfromthe latestmedium-term planupdatedeachyear,or on the shareof adjustednet equitycalculated in accordancewiththe Group’s accounting principles. The estimationof the valuein use of certaininvestments is based on complexvaluationmodels, in particularfor subsidiarieswho themselves own numerous subsidiaries, and Management is required to exercise judgment to determine the cash flow assumptions. Giventhe significanceof the investments in thebalancesheet,the complexityof themethodsusedand theirsensitivityto variations in the data and assumptionson which the estimatesare based, we considered the valuation of investments as a key audit matter.

We assessed, with our valuation specialists, the methods implementedby Managementto determinethe value in use of

investments in subsidiaries. Ourwork notably consisted in:

assessing,based on the informationprovidedto us, whether > Management’sestimation of values in use is based on a justificationof the valuationmethodand the figures used; analyzingthe cash flow projectionsused, with regard to the > latest operating forecasts established by Management and subject to approval of thegovernancebodies; comparing the datausedto perform impairmentestsperformed > byManagement with the sourcedatabyentity; testing,by sampling,thearithmeticalaccuracyof theCompany’s > calculations of valuesin use.

SPECIFIC VERIFICATIONS

We have also performed,in accordancewith professionalstandardsapplicablein France,the specificverificationsrequiredby laws and regulations. Informationgivenin themanagement reportand in the otherdocumentswith respectto the financialpositionand the financialstatements providedto theshareholders We have no mattersto reportas to the fair presentationand the consistencywith the financialstatementsof the informationgiven in the ManagingBoard’s managementreport and in the other documentswith respect to the financial position and the financial statements providedto theshareholders. We attest the fair presentationand the consistencywith the financial statementsof the informationrelating to payment deadlines mentioned inarticle D. 441-4of theFrenchCommercial Code ( Codede commerce ). We attest that the SupervisoryBoard’sReport on CorporateGovernancesets out the informationrequiredby Articles L. 225-37-3 and L. 225-37-4of the FrenchCommercial Code (Code de commerce). Concerningthe informationgiven in accordancewith the requirementsof Article L. 225-37-3of the FrenchCommercialCode (Code de commerce) relatingto remunerationsandbenefitsreceivedby, or allocatedto themembersof theManagingBoardandof the Supervisory Board and any other commitmentsmade in their favour, we have verified its consistencywith the financial statements,or with the underlyinginformationused to preparethesefinancialstatementsand, whereapplicable,with the informationobtainedby your Company fromcontrolling and controlled companies. Basedon these procedures, we attest the accuracy and fair presentationof thisinformation. With respectto the informationrelatingto itemsthat your Companyconsideredlikelyto have an impactin the eventof a takeoverbid or exchangeoffer, providedpursuantto Article L. 225-37-5 of the FrenchCommercialCode ( Code de commerce ), we have agreedthese to the source documents communicated to us. Based ontheseprocedures, we have no observations tomakeon thisinformation. OTHER INFORMATION In accordancewith French law, we have verified that the requiredinformationconcerningthe purchaseof investmentsand controlling interestsand the identityof the shareholdersand holdersof the votingrightsand the cross-shareholdings has been properlydisclosedin the management report. REPORT ON CORPORATE GOVERNANCE

288

GROUPE PSA - 2019 UNIVERSAL REGISTRATION DOCUMENT