PSA_GROUP_REGISTRATION_DOCUMENT_2017

PEUGEOT S.A. FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 Notes to Peugeot S.A. financial Statements

APPENDIX The following disclosures constitute the notes to the balance sheet at 31 December 2017, before appropriation of net profit for the year, which shows total assets of €22,694.8 million and to the income statement for the year then ended, which shows net profit of €416.3 million. The financial statements cover the twelve-month period from 1 January to 31 December 2017. Notes are an integral part of the financial statements. All amounts are in millions of euros unless otherwise specified. The financial statements for 2017 including explanatory notes were approved for issue by the Managing Board of Peugeot S.A. on 19 February 2018 with the Note 27, taking into account events that occurred in the period up to the Supervisory Board Meeting on 28 February 2018. These financial statements are included in the consolidated financial statements of PSA Group.

ACCOUNTING POLICIES AND METHODS

NOTE 1

General accounting principles intended to provide a true and fair view of the business have been applied, including the principle of prudence and the following basic assumptions: the going concern; „ the continuity of accounting methods from one year to the next; „ segregation of accounting periods; „ in accordance with the general rules for the preparation and „ presentation of annual financial statements (Regulation ANC 2014-03 of 5 June 2014, validated by a Decree of 8 September 2014). Items recorded in the accounts are stated in accordance with the historical cost convention. The main accounting policies applied are as follows: A. Property, plant and equipment are stated at acquisition cost, including incidental expenses but excluding transaction costs. As an exception to this principle, assets acquired before 31 December 1976 that were included in the legal revaluation are stated at valuation. These assets are fully amortised using the straight-line method over an estimated useful life of 10 years. B. AND AFFILIATES Since 2007, the cost of shares in subsidiaries and affiliates includes transaction costs. In prior years, these investments were stated at purchase cost excluding transaction costs, except for investments acquired before 31 December 1976 that were included in the legal revaluation. Investments in subsidiaries are estimated at their value in use, generally based on the economic value of the consolidated shareholders’ equity of the business they represent, or, where this is not available, on the share of equity calculated in accordance with IFRS (International Financial Reporting Standards) as adopted by the European Union. The economic value of consolidated equity is measured by the future cash flows as arising from the latest medium-Term Plan. The forecast data used to determine the future cash flows for purposes of impairment testing of CGUs and the PROPERTY, PLANT AND EQUIPMENT SHARES IN SUBSIDIARIES

individual assets of the Peugeot Citroën DS and Opel Vauxhall automotive segments were updated in December 2017. These data are derived from the latest plan passed by the Managing Board and submitted to the Supervisory Board, with assessment of the principal risks inherent in that plan. The automotive market forecasts used are the Group’s most recent estimates, which are based on external forecasts. In the case of a prolonged decline in the value in use of an investment to below cost, a provision is recorded for the difference. If an investment has a negative value in use and circumstances warrant it, a provision for contingencies is booked. If sold, shares are valued using weighted average cost (WAC). Units in FCPR investment funds Units in FCPR investment funds are recorded in “Other investments” in full for the amount booked under “Due to suppliers of fixed assets”. The liability is gradually cancelled as payments are made. If the units’ net asset value is below cost, a provision is recorded. D. Loans and receivables are stated at their nominal amount. A provision is booked to cover any probable losses. LOANS AND RECEIVABLES Treasury shares Shares allocated to performance share grants and likely to be delivered at the end of the vesting period are recorded at a new gross value equal to the carrying amount at the day on which their allocation was decided. Shares allocated to performance share grants and not likely to be delivered, and those allocated to future grants, are recorded at their purchase cost. A provision for impairment is recorded when the market value is less than the carrying amount. OTHER INVESTMENTS C. MARKETABLE SECURITIES E.

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GROUPE PSA - 2017 REGISTRATION DOCUMENT