PSA_GROUP_REGISTRATION_DOCUMENT_2017

GROUPE PSA Risk Management and internal Control Procedures

The acquisition of Opel Vauxhall, effective at 1 August 2017, constitutes an opportunity for accelerating the Groupe PSA growth plan, under the benefit of: the leveraging of operational excellence over a widened Group; „ a higher R&D capacity; „ volume and synergy gains; „ new automotive brands, with considerable synergy by their image „ and geographical footprint. The PACE! plan presented on 9 November 2017 is designed to sustain Opel Vauxhall’s competitiveness, setting as operational targets: a recurring operating margin (1) of 2% for Opel Vauxhall by 2020 „ and a target of 6% by 2026; positive free operating cash flow (2) by 2020. „

It is based on four fundamental pillars: the path set by the European Union for reducing CO 2 „ the range; improved competitiveness through optimised process efficiency, „ reduction of costs and Group synergy gains of €1.1 billion p.a. by 2020, reaching €1.7 billion p.a. by 2026; a high positioning of the Opel Vauxhall brands, to improve pricing „ power while emphasising quality and services in keeping with customer expectations; lastly, a vigorous drive by Opel Vauxhall to boost its sales growth „ by accelerating the rollout of new models, with a total of 9 launches by 2020, and international development at a pace of 20 new markets by 2022. emissions de CO 2 , which will be achieved among others by electrification of

RISK MANAGEMENT AND INTERNAL 1.4. CONTROL PROCEDURES

To begin with, it should be specified that Section 1.4 gives details on institutes to reduce that exposure. Lastly, Section 1.6. and 2. are the Groupe PSA global risk management policy. Section 1.5 designed to comply with regulatory requirements concerning the discusses the major risks, termed the “Top Group Risks” to which processing of environmental, social and societal risks. the Group is exposed, and the remedial measure the Group

Internal control objectives for the Group

1.4.1.

To prevent and limit the effect of internal and external risks, the Group has implemented risk management and internal control systems to ensure: compliance with laws and regulations; „ application of the Executive Committee’s instructions and „ guidelines; efficient internal processes, particularly those that help to „

Groupe PSA sets up effective Internal Audit mechanisms based on: engagement at the highest level; „ accountability of all actors at all levels of the organisation; „ reliance on self-assessments of compliance and deployment of „ processes; analysis of self-assessment findings to improve efficiency and „ compliance of Group activities. More generally, these procedures and processes help manage the Group’s businesses, boost the effectiveness of its operations and ensure efficient use of its resources. Nevertheless, internal controls cannot give an absolute guarantee that the Company’s objectives will be achieved.

safeguard the assets of Group companies; reliable financial and operational reporting. „

Reference framework 1.4.2.

The Group’s risk management and internal control system complies institutions that complies with Regulation 97-02 of the French with and functions according to the rules of the eighth directive on Banking and Financial Regulations Committee concerning internal Statutory Audits, the Autorité des Marchés Financiers (AMF) control in credit institutions.

Reference Framework for Risk Management and Internal Control Systems issued in January 2007, and the report of the working group on Audit Committees published by the AMF on 22 July 2010. The Group’s banking arm uses a specialised system for credit

Faurecia’s shares are traded on a regulated market and it acts under the responsibility of its own Board of Directors; it has a separate internal control system which it applies independently from other Group divisions.

Recurring operating income as a percentage of revenue. (1) Defined as recurring operating income + depreciation and impairment - restructuring costs - capital expenditure and capitalised R&D - (2) fluctuations in working capital.

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GROUPE PSA - 2017 REGISTRATION DOCUMENT