Financial Criteria Metropolitan Areas and Areas with Local Restrictions Several of the Peugeot UK Selection Criteria include a provision that the requirements of the criterion will be subject to review by the Peugeot Franchise Validation Committee. Metropolitan Areas These aredefined within the Peugeot UK Network Plan as those major cities of the UK and their surrounding urban and suburban areas with a population of 500,000 or more. Areas with Local Restrictions These are defined as areas where there are natural or legal restrictions imposed on either the buildings or the environment of the contract site which prevent the contract holder from achieving compliance with the Peugeot UK Selection Criteria. For example, abnormally low planned volumes as a consequence of operating in an isolated market, or listed buildings, preservation orders, local government restrictions,etc. AF1 BUSINESS PLAN. REQUIREMENT New contract applicants are required to present a business plan, in the Peugeot format, in detail for Peugeot operations and in outline for all other brands for the next three years. The business plan will be assessed against the following criteria: • Coherence and development of the whole business plan. • Coherence and legitimacy of investment projects. • Level of profitability coherent with market trends. MINIMUM VALUE The business plan should be approved by a representative from Peugeot who will assess both the plan as a whole and the coherence of the forecast level of profitability with market trends. AF2 COMMUNICATION OF FINANCIAL STATEMENTS. REQUIREMENT Balance sheets for the last three years must be supplied along with the composition of shareholdings and the balance sheets for the last three years of any parent shareholder companies (holding 25% or greater). If the company has just been started, the opening balance sheet must be supplied. MINIMUM VALUE The company or any parent shareholder company must not be or have been in bankruptcy during the last five years. AF3 COMMUNICATION OF FINANCIAL STATEMENTS. REQUIREMENT There must be the ability to produce accounts and balance sheets for the manufacturer on an annual basis or at any time on request,which are certified by an auditor or equivalent. MINIMUM VALUE Must be able to submit audited accounts annually or at any time on request. AF4 COMMUNICATION OF FINANCIAL STATEMENTS. REQUIREMENT There must be the ability to regularly produce and send management accounts identifying data specific to Peugeot activity and summary data related to all brands. MINIMUM VALUE Must be able to make Business Trends Analysis submissions in accordance with the Business Reporting Input Guide and timing plan communicated by Peugeot. AF5 HOLDING COMPANIES. REQUIREMENT Where the contract applicant company depends on other parent shareholder companies (holding 25% or greater), the parent company must have a minimum level of working capital. MINIMUM VALUE The ratio of current assets to current liabilities must be at least 0.85 to 1. AF6 HOLDING COMPANIES. REQUIREMENT Wherethe contract applicant company depends on other parent shareholder companies (holding 25% or greater), the parent company must have a minimum equity to permanent capital ratio. MINIMUM VALUE Equity to total liabilities ratio,after taking due regard of any parent company guarantees and the level of securities given,must be at least 12.5%.