Annual Report for the Year 2019/20 PHOENIX PIB Dutch Finance B.V

PHOENIX PIB Dutch Finance B.V.

Annual Report for the year 2019/20 PHOENIX PIB Dutch Finance B.V.

Contents

Directors’ report 1

Financial statement 2019/20 7

Balance sheet as at 31 January 2020 8

Statement of income for the year 2019/20 9

Cash flow statement for the year 2019/20 10

Notes to the 2019/20 financial statements 11

Other information 27

i PHOENIX PIB Dutch Finance B.V.

Directors’ report The Board of Directors of PHOENIX PIB Dutch Finance B.V. (the “Company”) is pleased to present you its financial statements for the financial year ended 31 January 2020. All amounts in the directors’ report are stated in EUR 1,000, unless indicated otherwise. General information on the legal entity PHOENIX PIB Dutch Finance B.V., with its statutory seat and its office in Maarssen, the Netherlands, serves as a financing company for the affiliated company PHOENIX PIB Finance B.V. (registered with the trade register of the Chamber of Commerce under number 57769435) and was founded on 17 April 2013. PHOENIX PIB Dutch Finance B.V. is a fully-owned subsidiary of PHOENIX PIB Dutch Holding B.V., Maarssen, the Netherlands and is ultimately owned by PHOENIX Pharma SE, Mannheim, Germany (“PHOENIX”). The Company is part of a fiscal unity for corporate income tax purposes together with the principal of the fiscal unity, PHOENIX PIB Dutch Holding B.V. and PHOENIX PIB Finance B.V., a fully-owned subsidiary of PHOENIX PIB Dutch Holding B.V. The Company recognizes its current tax result in the financial statements. The company has signed an advanced pricing agreement with the Dutch tax authorities. The current tax position is settled by bank via PHOENIX PIB Dutch Holding B.V. Financial position as at balance sheet date and the statement of income during the financial year Due to the fact that the Company serves as financing company for the PHOENIX group companies, the Company’s income relates to interest income from related parties. As the net financial result of the Company for the year 2019/20 was a profit of EUR 1,445 (2018/19: EUR 1,396) and the Company incurred EUR 126 (2018/19: EUR 107) general and administrative expenses this resulted in an operating profit before taxation for the year 2019/20 of EUR 1,319 (2018/19: EUR 1,289). The company had a positive cash flow of EUR 90 (2018/19: EUR 17 positive) mainly as a result of positive interest inflows. The Company’s solvency (equity / total balance sheet value) increased to a level of 4.0% (2018/19: 1.1%), as a result of an informal capital contribution. The Company’s current ratio (total current assets / current liabilities) improved to 1.02 (31 January 2019: 0.79) as a result of switch of loans receivable and loans payable from long term to short term, which resulted in an improved current ratio. Per 31 January 2020 the Company’s assets almost fully consists of loans issued to the affiliated party PHOENIX International Beteiligungs GmbH, there were per 31 January 2019 the assets almost fully consisted out of loans issued to the affiliated party PHOENIX PIB Finance BV. By the end of the fiscal year (January 2020) the issued loan facilities were repaid by PHOENIX PIB Finance BV and were at the same time issued to PHOENIX International Beteiligungs GmbH. The loans were repaid and issued at the same time, with the same interest conditions and the same maturity dates. Although the financing structure of the company therewith remained the same, according to Dutch GAAP the newly issued loans have to be valued at fair value since these are newly issued to another party. The fair value of the loans were per end of the fiscal year EUR 635,265 in comparison to the nominal value of EUR 616,800. This difference of EUR

1 PHOENIX PIB Dutch Finance B.V.

18,465 is recorded in the equity as informal capital contribution (share premium) and will reverse via the upcoming years via the statement of income until maturity of the loans. The Company recognizes its tax result in the financial statements which is based on an advanced pricing agreement which has been agreed with the Dutch tax authorities. Corporate Governance The Board of Directors, which is responsible for the corporate governance structure of the Company, believes that the principles and best practice provisions of the Dutch Corporate Governance Code that are applicable, are interpreted by the Board of Directors and implemented. Corporate Social Responsibility To ensure the effectiveness of the PHOENIX's commitment to Corporate Social Responsibility, the Company contributes to the economy in an ethical manner. This economic responsibility has two main aspects: long-term financing for PHOENIX and business ethics. The Company influences its relationships with both external (long-term financing) financers and PHOENIX. Business ethics for the Company mainly contain the compliance with fiscal requirements in cooperation with the tax authorities and ethical standards. The Law ‘Wet Bestuur en Toezicht’ requires large-sized legal entities to have a balanced composition of their Board of Directors in terms of gender, with at least 30% of the seats occupied by women and at least 30% by men. The composition of the Board of Directors per 31 January 2020 deviated from the above-mentioned percentages, since the board existed of 2 male directors. Per 29 February 2020 / after Balance Sheet date these (two) male board members both retired and were replaced by two new (male) board members. Although in such small board it is unlikely to occur an imbalance, in order to achieve a balance between male and female members a female candidate was preferred. The new male board members were however selected based on the fact that: A) One of the new board members was the successor of the former board member for all his functions within PHOENIX, where thought it was preferable to have him on this position for his PHOENIX-knowledge; B) The other board member is working for the Company since 2013 and was selected from one of the two employees (both male) for his knowledge on the Company. In order to achieve a balance between male and female members in the future, as soon as a vacancy occurs, and the suitability of the candidates is equal, a female candidate is preferred. Finance As per 31 January 2020 the Company’s assets were for 96% (31 January 2019: 98%) financed by long-term bonds, of which one bond is presented as short-term as it matures within one year. These bonds, with each a nominal value of EUR 300,000, have been issued during fiscal year 2014/15 (30 July 2014) and during fiscal year of 2013/14 (27 May 2013) respectively. Both bonds are listed on the EURO MTF, a non-regulated market operated by the Luxembourg Stock Exchange, and represent notes issued and guaranteed, jointly and severally by PHOENIX Pharmahandel GmbH & Co KG and certain of its subsidiaries. On 6 November 2017 the direct parent company of the Company, PHOENIX PIB Dutch Holding B.V., purchased bonds with a nominal value of EUR 100,000 and still owns these bonds per the date of these financial statements.

2 PHOENIX PIB Dutch Finance B.V.

Per 31 January 2020 the Company’s assets almost fully consists of loans issued to the affiliated party PHOENIX International Beteiligungs GmbH, there were per 31 January 2019 the assets almost fully consisted out of loans issued to the affiliated party PHOENIX PIB Finance BV. By the end of the fiscal year (January 2020) the issued loan facilities were repaid by PHOENIX PIB Finance BV and were at the same time issued to PHOENIX International Beteiligungs GmbH. Going Concern The Company has per 31 January 2020 a positive working capital and over the fiscal year 2019/20 the Company had a positive result and shareholder’s equity. Based on these figures and on the refinancing measures taken and implemented by the PHOENIX Group we believe that the going concern assumption is valid. PHOENIX Pharmahandel GmbH & Co KG, as (intermediate) beneficial owner of the Company, is in compliance with debt covenants of its Syndicated Multicurrency Term Loan and Revolving Credit Facilities Agreement and will act as a guarantor for external debts (including the bonds) when necessary, together with PHOENIX International Beteiligungs GmbH and PHOENIX PIB Finance B.V. The Company considers the COVID-19 Pandemic as a significant event after closing the closing date of 31 January 2020. The Company’s main risk concerns the credit risk on outstanding loans. The outstanding loans are issued to PHOENIX International Beteiligungs GmbH which is the direct and indirect owner of nearly all PHOENIX subsidiaries. Since PHOENIX mainly acts on the pharmaceutical market – a market in which the influence of the COVID-19 Pandemic is minimal – the risk has not increased strongly. Therewith also for upcoming years we expect positive results and cash flows, with the result that the Company’s management has prepared the PHOENIX PIB Dutch Finance B.V. financial statements on a going concern basis. Personnel The Company had two part-time directors during the fiscal year 2019/20 (2018/19: two). Furthermore the Company had two part-time employees (2018/19: two). No significant change is expected for the year 2020/21. The directors Mr. J.P. Eeken and Mr. N. van Esschoten retired per 29 February 2020 and were respectively succeeded by Mr. B.E. Tolhuisen (1 March 2020) and Mr. R. van Leuveren (10 March 2020). Risk management The risk management policies and procedures are key to ensure proper management of the Company. The Company is a small entity with 2 directors and 2 employees, who all know and understand that risk management is an important process. The risk management system is embedded in the organization from the level of the directors to the operations and finance department (soft controls). All employees contribute to identifying risks and the associated control measures. The Company analyses and controls its risks. To this end it divides them into categories which are mentioned below. The control measures are subsequently defined for each identified risk. Where possible, a qualitative description is included of the expected effectiveness of the measures taken. The Company has put measures in place for the majority of the risks and uncertainties identified.

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Operating activities In the conduct of its operating activities the Company enters into several financial instruments, such as loan facilities and bonds. Due to the use of these instruments, the Company is among others exposed to interest rate risk. Interest rate risks exist as a result of potential changes in the market interest rate and may lead to fluctuations in interest payments of variable interest-bearing financial instruments. The Company estimates the interest rate risk as low as the interest on loan facilities to related parties as well as the interest rate on bonds are fixed. The interest rate on loan facilities to related parties bear an interest which is calculated by reference of the refinancing possibilities of the Company including a margin for administration and equity at risk in line with the advanced pricing agreement with Dutch tax authorities. As the amounts of the loan facilities and bonds are almost equal in amount, the maturity dates are equal to each other and the interest rates correlate with each other, the interest rate risk is assessed as low. a) Strategy The Company’s main activities consists of (re-) financing of related parties. Management is therefore on regular basis in close contact with the PHOENIX’ board to anticipate on any changes in financing structure. Based on the long term financing contracts and management actions, strategic risks are estimated as a low risk.

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b) Financial position In the conduct of its normal activities the Company enters into several financial instruments such as payables, cash balances with banks and bonds issued. Due to the use of these instruments, the Company is exposed to credit risk and liquidity risk. As per 31 January 2020 the Company’s assets were for 96% (31 January 2019: 98%) financed by long-term bonds, of which one bond is presented as short-term since it matures within one year. Both issued bonds for which PHOENIX Pharmahandel GmbH & Co KG, PHOENIX International Beteiligungs GmbH and PHOENIX PIB Finance BV are guarantors. This position is covered by two issued loans with similar due dates as the bonds, resulting in a reduced risk on the financial position of the Company. Credit risk represents the risk of default on a receivable that may arise from a counterparty failing to meet the required payments as agreed up on. Per 31 January 2020 the Company’s receivables represents amounts due from related parties, mainly from the affiliated company PHOENIX International Beteiligungs GmbH. PHOENIX International Beteiligungs GmbH is directly wholly-owned by PHOENIX Pharmahandel GmbH & Co KG and ultimately by PHOENIX Pharma SE, Mannheim, Germany. PHOENIX International Beteiligungs GmbH is the direct and indirect owner of nearly all PHOENIX subsidiaries; especially all PHOENIX entities outside Germany are held directly or indirectly by PHOENIX International Beteiligungs GmbH. Per 31 January 2020 this entity had a solvency of 42.5% (31 January 2019: 50.0%) and issues loans to affiliated companies within PHOENIX, PHOENIX International Beteiligungs GmbH also has the ability to make use of a SFA loan facility of EUR 1.25 billion. The credit risk of PHOENIX International Beteiligungs GmbH is therewith expected to be low. Liquidity risk is the risk that the Company cannot meet her obligations pursuant to settle in cash or other financial assets and financial obligations. The basic principles of the liquidity risk management includes that there are sufficient facilities maintained as needed to meet the current and future financial liabilities, in normal and difficult circumstances, and without unacceptable losses. The majority of the short-term liabilities however relates to the accruals for interest expenses, which are guaranteed by several PHOENIX companies. Also the maturity of loans payable are matched to the maturity dates of the loans receivable, resulting in a reduction of the liquidity risk. c) Laws, rules and regulations All decisions are made by the Board of Directors and all decisions are made in line with the code of conduct which both directors signed. Not meeting the tax regulation is the main risk in the field of laws, rules and regulations. The Company therefore has on a regular basis contact with the Dutch tax authorities and acts in line with an advanced pricing agreement with Dutch tax authorities. Outlook The Company’s management expects for the year 2020/21 no significant changes in activities. For the fiscal year 2020/21 it is however expected that the non-current loan issued to PHOENIX International Beteiligungs GmbH with the due date of 27 May 2020 will be repaid and with the received cash the repayment of a bond - with as well the due date of per 27 May 2020 - will be financed. In line with the decrease in issued and granted loans it is expected that the net income for the year 2019/20 will decrease as well.

5 PHOENIX PIB Dutch Finance B.V.

Subsequent events On May 19th 2020, the direct shareholder of the Company (PHOENIX PIB Dutch Holding BV) merged into its direct parent (PHOENIX Noweropa Beteiligungs GmbH). The merger has no direct consequences for the Company. The Company considers the COVID-19 Pandemic as a significant event after closing the closing date of 31 January 2020. The Company’s main risk concerns the credit risk on outstanding loans. The outstanding loans are issued to PHOENIX International Beteiligungs GmbH which is the direct and indirect owner of nearly all PHOENIX subsidiaries. Since PHOENIX mainly acts on the pharmaceutical market – a market in which the influence of the COVID-19 Pandemic is minimal – the risk has not increased strongly. There have been no significant subsequent events between 1 February 2020 and the date of issuance of these financial statements. Maarssen, 25 May 2020 Board of Directors:

Mr. B.E. Tolhuisen

Mr. R. van Leuveren

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Financial statement 2019/20

7 PHOENIX PIB Dutch Finance B.V.

Balance sheet as at 31 January 2020 (before appropriation of net income)

Note 31 January 2020 31 January 2019 EUR 1,000 EUR 1,000 EUR 1,000 EUR 1,000

Non-current assets Financial non-current assets 3 317,311 606,311

Total non-current assets 317,311 606,311

Current assets Other receivables and prepaid expenses 4 318,690 9,726

318,690 9,726 Cash and cash equivalents 5 116 26

Total current assets 318,806 9,752

Total assets 636,117 616,063

Note 31 January 2020 31 January 2019 EUR 1,000 EUR 1,000 EUR 1,000 EUR 1,000

Shareholder’s equity 6 Share capital 250 250 Share premium 22,965 4,500 Retained earnings 980 1,001 Result for the year 989 967

25,184 6,718

Non-current liabilities 7 298,958 597,076

Current liabilities 8 311,975 12,269

Total shareholder’s equity and liabilities 636,117 616,063

8 PHOENIX PIB Dutch Finance B.V.

Statement of income for the year 2019/20

Note 2019/20 2018/19 EUR 1,000 EUR 1,000 EUR 1,000 EUR 1,000

Interest - and other financial income 12 23,273 23,168 Interest - and other financial expenses 12 (21,828) (21,772) Financial Result 1,445 1,396

General and administrative expenses 13 (126) (107)

Operating income/(loss) before provision for income taxes 1,319 1,289

Income tax benefit/ (expense) 15 (330) (322)

Net income/(loss) 989 967

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Cash flow statement for the year 2019/20

2019/20 2018/19*

note EUR 1,000 EUR 1,000 EUR 1,000 EUR 1,000

Operating income/(loss) before income taxes 1,319 1,289

Adjustment for: Amortization bonds 1,578 1,522

Change in net working capital: Receivables from group companies 4 8,990 2,995 Accrued and other liabilities 8 (1) 1 Payables 8 3 (3)

10,570 4,515

Income tax paid (322) (370)

Cash flow from Operating activities 11,567 5,434

Loan repayments 3/4 606,311 - Loan withdrawal 3/4 (616,800) (3,917)

Cash flow from Investing activities (10,489) (3,917)

Dividend payment 6 (988) (1,500)

Cash flow from Financing activities (988) (1,500)

Change in Cash and cash equivalents 90 17

Cash and cash equivalents at 1 February 26 9

Cash and cash equivalents at 31 January 116 26

* Comparable figures adjusted in line with 2019/20 cashflow statement

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Notes to the 2019/20 financial statements

1 General a) Activities PHOENIX PIB Dutch Finance B.V. (the “Company”) with its statutory seat and its office in Maarssen, the Netherlands (registered with the trade register of the Chamber of Commerce under number 57769435), serves as a financing company for the affiliated companies. PHOENIX PIB Dutch Finance B.V. is a wholly-owned subsidiary of PHOENIX PIB Dutch Holding B.V., Maarssen, the Netherlands, which is ultimately owned by PHOENIX Pharma SE, Mannheim, Germany. The financial figures of the Company are included in the consolidated annual accounts of PHOENIX Pharma SE, Mannheim, Germany. b) Basis of preparation The accompanying financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles in the Netherlands and comply with the financial requirements included in Part 9 of Book 2 of the Netherlands Civil Code. All amounts in the financial statement are stated in EUR 1,000, unless indicated otherwise. c) Going concern The Company has per 31 January 2020 a positive working capital and over the fiscal year 2019/20 the Company had a positive result and shareholder’s equity. Based on these figures and on the refinancing measures taken and implemented by the PHOENIX Group we believe that the going concern assumption is valid. PHOENIX Pharmahandel GmbH & Co KG, as (intermediate) beneficial owner of the Company, is in compliance with debt covenants of its Syndicated Multicurrency Term Loan and Revolving Credit Facilities Agreement and will act as a guarantor for external debts (including the bonds) when necessary, together with PHOENIX International Beteiligungs GmbH and PHOENIX PIB Finance B.V. The Company considers the COVID-19 Pandemic as a significant event after closing the closing date of 31 January 2020. The Company’s main risk concerns the credit risk on outstanding loans. The outstanding loans are issued to PHOENIX International Beteiligungs GmbH which is the direct and indirect owner of nearly all PHOENIX subsidiaries. Since PHOENIX mainly acts on the pharmaceutical market – a market in which the influence of the COVID-19 Pandemic is minimal – the risk has not increased strongly. Therewith also for upcoming years we expect positive results and cash flows, with the result that the Company’s management has prepared the PHOENIX PIB Dutch Finance B.V. financial statements on a going concern basis.

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2 Principles for the valuation of assets, liabilities and determination of the result a) General An asset is included in the balance sheet when it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost of the asset can be reliably measured. A liability is included in the balance sheet when it is expected to result in an outflow from the entity of resources embodying economic benefits and the amount of the obligation can be measured with sufficient reliability. Income is recognised in the profit and loss account when an increase in future economic potential related to an increase in an asset or a decrease of a liability has arisen and of which the size can be measured reliably. Expenses are recognised when a decrease in the economic potential related to a decrease in an asset or an increase of a liability has arisen, of which the size can be measured with sufficient reliability. If a transaction results in a transfer of future economic benefits and/or when all risks relating to assets or liabilities transfer to a third party, the asset or liability is no longer included in the balance sheet. Assets and liabilities are not included in the balance sheet if economic benefits are not probable or cannot be measured with sufficient reliability. The income and expenses are accounted for in the period to which they relate. The preparation of the financial statements requires management to form opinions and to make estimates and assumptions that influence the application of principles and the reported values of assets and liabilities and of income and expense. The actual results may differ from these estimates. The estimates and the underlying assumptions are periodically assessed. Revisions of estimates are recognised in the period in which the estimate is revised and in future periods for which the revision has consequences. The accounting principles of the Company are summarised below. These accounting principles have been applied consistently throughout the year and the preceding year. The financial statements are presented in euros, the Company’s functional currency. All financial information in euros has been rounded to the nearest thousand.

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b) Foreign currencies Transactions denominated in foreign currency are converted into the functional currency of the Company at the exchange rate applying on the transaction date. Monetary assets and liabilities denominated in foreign currency are converted at the balance sheet date into the functional currency at the exchange rate applying on that date. Non-monetary assets and liabilities in foreign currency that are stated at historical cost are translated into euros at the applicable exchange rates applying on the transaction date. Foreign currency gains and losses are recorded to the statement of income as income / expense. c) Related-party transactions For the purpose of these accounts, parties are considered to be related to the Company, if: (a) A person or a close member of that person's family is related to a reporting entity if that person: (i) has control or joint control over the reporting entity; (ii) has significant influence over the reporting entity; or (iii) is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.

(b) An entity is related to a reporting entity if any of the following conditions applies: (i) The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others). (ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member). (iii) Both entities are joint ventures of the same third party. (iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity. (v) The entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity. (vi) The entity is controlled or jointly controlled by a person identified in (a). (vii) A person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity). d) Financial instruments Financial instruments include loan facilities and other receivables, loans and other financing commitments, and trade and other payables. Financial instruments initially recognized at fair value plus directly attributable transaction costs. After initial recognition, financial instruments are valued in the manner described below.

Financial non-current assets and other receivables and prepaid expenses Financial non-current assets and other current receivables are carried at amortised cost on the basis of the effective interest method, less impairment losses if applicable.

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e) Impairment of financial assets Financial assets are tested for impairment in case of changes or circumstances arise that lead to an indication that the carrying amount of the asset will not be recovered. The recoverability of assets in use is determined by comparing the carrying amount of an asset with the estimated present value of the future net cash flows which the asset is expected to generate, discounted at the effective rate of the financial instrument determined on the initial recognition of the instrument. If the carrying amount of an asset exceeds the estimated present value of the future cash flows, impairment charge is recorded which is the difference between the carrying amount and the recoverable amount. f) Other receivables and prepaid expenses The accounting policies applied for the valuation of other receivables and prepaid expenses are described under the heading ‘Financial instruments’. g) Cash and cash equivalents Cash and cash equivalents are carried at face value. h) Non-current liabilities Non-current liabilities are recognised initially at fair value, net of transaction costs incurred. Non-current liabilities are subsequently stated at amortised cost, any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method. i) Recognition of income Interest income: Interest income is recognized pro rata in the profit and loss account. The effective interest rate for the asset concerned is taken into account, provided the income can be measured and the income is probable to be received. Interest expense: Interest expense is allocated to successive financial reporting periods in proportion to the outstanding principal. Premiums and discounts are treated as annual interest charges so that the effective interest rate, together with the interest payable on the bonds, is recognized in the profit and loss account, with the amortized (net) cost of the liabilities being recognized in the balance sheet. Period interest charges and similar charges are recognized in the year in which they fall due. j) Income tax Corporate income tax comprises the current corporate income tax payable and deductible for the reporting period. Corporate income tax is recognised in the profit and loss account, based on the commercial profit or loss for the financial year . Current tax comprises the expected tax payable or receivable on the taxable commercial profit or loss for the financial year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to the tax payable in respect of previous years.

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The Company is part of a fiscal unity for corporate income tax purposes together with the principal of the fiscal unity, PHOENIX PIB Dutch Holding B.V. and PHOENIX PIB Finance B.V., a wholly-owned subsidiary of PHOENIX PIB Dutch Holding B.V. The Company has agreed with the Dutch tax authorities an advanced pricing agreement on the minimum taxable amount related to the Company’s financing activities. Since the Company forms a fiscal unity together with PHOENIX PIB Dutch Holding B.V., all deferred tax assets and/or liabilities are accounted for at PHOENIX PIB Dutch Holding B.V. level when applicable. Therefore there are no deferred tax assets or liabilities accounted in the financial statements of the Company. Tax assets and/or liabilities will be settled with tax authorities by PHOENIX PIB Dutch Holding B.V. and the current account with PHOENIX PIB Dutch Holding B.V. is settled by way of payment. k) Cash flow statement The cash flow statement has been prepared using the indirect method. l) Determination of fair value A number of accounting policies and disclosures in the Company’s financial statements require the determination of the fair value for financial assets and liabilities. For measurement and disclosure purposes, fair value is determined on the basis of the following methods. Where applicable, detailed information concerning the principles for determining fair value are included in the section that specifically relates to the relevant asset or liability.

Financial assets The fair value of investments held to maturity is estimated at the present value of the future cash flows. The future cash flows are based on fixed interest receipts and repayments of loans issued, discounted at the discount rate per end of the fiscal book year. To determine the present value of the future cash flows a refinancing rate is determined, which consist of the yield to maturity (YTM) of the underlying bond that the company used to acquire the funding. A margin for group financing is added to the YTM that reflects the difference between the payable coupon rate and the receivable interest rate on the issued loan.

Other receivables and prepaid expenses The fair value of other receivables and prepaid expenses is only determined for the benefit of the disclosures. The fair value is estimated at the present value of future cash flows.

Non-derivative financial commitments The fair value of non-derivative financial commitments is calculated on the basis of the net present value of future repayments and interest payments discounted at the refinancing rate at the reporting date. The fair value of non-derivative financial commitments traded on active markets as at the balance sheet date is determined by reference to quoted market prices, without deduction of transaction costs. m) Use of estimates The preparation of the financial statements requires management to form opinions and to make estimates and assumptions that influence the application of principles and the reported values of

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assets and liabilities and of income and expense. Actual results may differ materially from these estimates. The estimates and the underlying assumptions are constantly assessed. Revisions of estimates are recognised in the period in which the estimate is revised and in future periods for which the revision has consequences. Management identified the fair value determination of the loan facilities to related parties as a higher risk estimate.

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3 Financial non-current assets Loan facilities to related parties

EUR 1,000

Balance as per 31 January 2018 602,394 Settlement with interest receivable (non-cash, note 4) 5,788 Loan repayments from related parties (22,246) Loan facilities drawn by related parties 20,375

Balance as per 31 January 2019 606,311

Loan repayments from related parties (638,574) Loan facilities drawn by related parties 32,263 New issued loans to related parties 317,311

Balance as per 31 January 2020 317,311

Loan facilities to related parties The issued loans to related parties per 31 January 2019 were fully issued to the affiliated PHOENIX PIB Finance BV and have been repaid during January 2020. There was no penalty clause applicable for the early repayment of the facilities by the affiliated PHOENIX PIB Finance BV. At the same time the loans were repaid by PHOENIX PIB Finance BV new loans, with the same interest conditions and the same maturity dates were issued to the affiliated company PHOENIX International Beteiligungs GmbH. The (non-current) loan facility to related parties as per 31 January 2020 was therewith fully issued to the affiliated company PHOENIX International Beteiligungs GmbH and is limited until 30 July 2021, with a maximum facility of EUR 310,000. The loan bears an interest which is determined by reference of the refinancing possibilities of the Company plus a margin for administration and equity at risk, which is in line with the advanced pricing agreement with the Dutch tax authorities. As per end of the fiscal year 2019/20 the calculated interest rates was 4.00%. The loan – with a nominal value of 301,800 – is recognized at it’s fair value of EUR 317,311 based on the current market value.

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4 Other receivables and prepaid expenses The other receivables and prepaid expenses as presented under current assets mature within one year. Other receivables and prepaid expenses consist of:

Balance as per 31 January 2020 2019 EUR 1,000 EUR 1,000

Loan issued to related parties 317,954 - Interest receivable from related parties 736 9,726

318,690 9,726

Movement of other receivables and prepaid expenses:

2020 2019 EUR 1,000 EUR 1,000

Opening balance receivables from related parties 9,726 12,721 Interest receivable during the year (note 12) 23,273 23,168 Interest paid during the year (note 3) (32,263) (20,375) Interest receivable added to loan facilities (note 3) - (5,788) New issued loans to related parties 317,954 -

318,690 9,726

The loan facility to related parties as per 31 January 2020 was fully issued to the affiliated company PHOENIX International Beteiligungs GmbH and is limited until 27 May 2020, with a maximum facility of EUR 316,000. The loan bears an interest which is determined by reference of the refinancing possibilities of the Company plus a margin for administration and equity at risk, which is in line with the advanced pricing agreement with the Dutch tax authorities. As per end of the fiscal year the calculated interest rates was 3.57%. The loan – with a nominal value of 315,000 – is recognized at it’s fair value of EUR 317,311 based on the current market value. Interest receivable from related parties are presented under current assets as they mature within one year.

5 Cash and cash equivalents Cash and cash equivalents amount to EUR 116 (31 January 2019: EUR 26). There are no restriction on the usage of cash exists.

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6 Shareholder’s equity The movements in shareholder’s equity have been as follows:

Issued and Share Retained Result for the Total paid-in capital premium earnings year

EUR 1,000 EUR 1,000 EUR 1,000 EUR 1,000 EUR 1,000

Balance as per 31 January 2018 250 4,500 1,391 1,110 7,251 Appropriation of net income 2017/18 - - 1,110 (1,110) - Dividend payment - - (1,500) - (1,500) Net income for the year 2018/19 - - - 967 967

Balance as per 31 January 2019 250 4,500 1,001 967 6,718

Appropriation of net income 2018/19 - - 967 (967) - Dividend payment - - (988) - (988) Net income for the year 2019/20 - - - 989 989 Informal capital contribution - 18,465 - - 18,465

Balance as per 31 January 2012 250 22,965 980 989 25,184

The authorised share capital consists of 250,000 common shares of which 250,000 shares are issued and outstanding at 31 January 2019 (31 January 2019: 250,000 common shares of which 250,000 shares are issued and outstanding). The shares have a nominal value of 1 EURO each. On 28 November 2019 the Company paid out EUR 988 dividend to its (immediate) parent PHOENIX PIB Dutch Holding B.V.

The informal capital contribution relates to issued loans to the affiliated company PHOENIX International Beteiligungs GmbH (note 3 and 4). The value is calculated at the difference between the fair value and the nominal value of the newly issued loans.

7 Non-current liabilities

note Balance as per 31 January 2018 595,554 Amortization costs bonds 12 1,522

Balance as per 31 January 2019 597,076 Amortization costs bonds 12 1,578 Repost to current liabilities 8 (299,696)

Balance as per 31 January 2020 298,958

19 PHOENIX PIB Dutch Finance B.V.

As per 31 January 2020 the non-current liability concerns an issued bond with a nominal value of EUR 300,000. This bonds was issued during the fiscal year of 2014/15 (30 July 2014) and is listed on the EURO MTF, a non-regulated market operated by the Luxembourg Stock Exchange. The bonds represent notes issued and guaranteed, jointly and severally by PHOENIX Pharmahandel GmbH & Co KG and certain of its subsidiaries. The bond bears an interest of 3.625% (effective interest rate: 3.859%) with a due date on 30 July 2021 respectively. On 6 November 2017 the direct parent of the Company, PHOENIX PIB Dutch Holding B.V., purchased bonds with a nominal value of EUR 100,000 and still owns these bonds per the date of these financial statements.

8 Current liabilities Liabilities with a remaining maturity of one year are presented under short-term liabilities. Short-term liabilities consist of:

Balance as per 31 January 2020 2019 EUR 1,000 EUR 1,000

Bond issued (reposted from non-current liabilities) 299,696 - Payables to related parties 330 322 Interest payable 11,907 11,908 Other liabilities 42 39

311,975 12,269

As per 31 January 2020 the current liabilities includes an issued bond with a nominal value of EUR 300,000. This bonds was issued during the fiscal year of 2013/14 (27 May 2013) and is listed on the EURO MTF, a non-regulated market operated by the Luxembourg Stock Exchange. The bonds represent notes issued and guaranteed, jointly and severally by PHOENIX Pharmahandel GmbH & Co KG and certain of its subsidiaries. The bond bears an interest of 3.125% (effective interest rate: 3.444%) with a due date on 27 May 2020. The issued bond is presented as under current liabilities as it matures within one year. Interest payable relates to accrued interest in relation to the bonds (note 7 and note 8). The payables to related parties relate to the (corporate) tax payable to the principal of the fiscal unity, PHOENIX PIB Dutch Holding B.V.

20 PHOENIX PIB Dutch Finance B.V.

9 Risk Section The risk management policies and procedures are key to ensure proper management of the Company. The Company is a small entity with 2 directors and 2 employees, who all know and understand that risk management is an important process. The risk management system is embedded in the organization from the level of the directors to the operations and finance department (soft controls). All employees contribute to identifying risks and the associated control measures. The Company analyses and controls its risks by dividing them into categories which are mentioned below. The control measures are subsequently defined for each identified risk. Where possible, a qualitative description is included of the expected effectiveness of the measures taken. The Company has put measures in place for the majority of the risks and uncertainties identified.

a) Operating activities In the conduct of its operating activities the Company enters into several financial instruments such as loan facilities and bonds. Due to the use of these instruments, the Company is among others exposed to interest rate risk. Interest rate risks exist as a result of potential changes in the market interest rate and may lead to fluctuations in interest payments of variable interest-bearing financial instruments. The Company estimates the interest rate risk as low as the interest on loan facilities to related parties as well as the interest rate on bonds are fixed. The interest rate on loan facilities to related parties bear an interest which is calculated by reference of the refinancing possibilities of the Company including a margin for administration and equity at risk in line with the advanced pricing agreement with Dutch tax authorities. As the amounts of the loan facilities and bonds are

21 PHOENIX PIB Dutch Finance B.V.

almost equal in amount and the interest rates correlate with each other, the interest rate risk is assessed as low. b) Strategy The Company’s main activities consists of (re-) financing of related parties. Management is therefore on regular basis in close contact with the PHOENIX’ board to anticipate on any changes in financing structure. Based on the long term financing contracts and management actions, strategic risks are estimated as a low risk. c) Financial position In the conduct of its normal activities the Company enters into several financial instruments such as payables, cash balances with banks and bonds issued. Due to the use of these instruments, the Company is exposed to credit risk and liquidity risk. As per 31 January 2020 the Company’s assets were for 96% (31 January 2019: 98%) financed by long-term bonds, of which one bond is presented as short-term as it matures within one year. Both issued bonds for which PHOENIX Pharmahandel GmbH & Co KG, PHOENIX International Beteiligungs GmbH and PHOENIX PIB Finance BV are guarantors. This position is covered by two issued loans with similar due dates as the bonds, resulting in a reduced risk on the financial position of the Company. Credit risk represents the risk of default on a receivable that may arise from a counterparty failing to meet the required payments as agreed up on. Per 31 January 2020 the Company’s receivables represents amounts due from related parties, mainly from the affiliated company PHOENIX International Beteiligungs GmbH. PHOENIX International Beteiligungs GmbH is directly wholly-owned by PHOENIX Pharmahandel GmbH & Co KG and ultimately by PHOENIX Pharma SE, Mannheim, Germany. PHOENIX International Beteiligungs GmbH is the direct and indirect owner of nearly all PHOENIX subsidiaries; especially all PHOENIX entities outside Germany are held directly or indirectly by PHOENIX International Beteiligungs GmbH Per 31 January 2020 this entity had a solvency of 42.5% (31 January 2019: 50.0%) and issues loans to affiliated companies within PHOENIX, PHOENIX International Beteiligungs GmbH also has the ability to make use of a SFA loan facility of EUR 1.25 billion. The credit risk of PHOENIX International Beteiligungs GmbH is therewith expected to be low. Liquidity risk is the risk that the Company cannot meet her obligations pursuant to settle in cash or other financial assets and financial obligations. The basic principles of the liquidity risk management includes that there are sufficient facilities maintained as needed to meet the current and future financial liabilities, in normal and difficult circumstances, and without unacceptable losses. The majority of the short-term liabilities however relates to the accruals for interest expenses, which are guaranteed by several PHOENIX companies. d) Laws, rules and regulations All decisions are made by the Board of Directors and all decisions are made in line with the code of conduct which both directors signed. Not meeting the tax regulation is the main risk in the field of laws, rules and regulations. The Company therefore has on a regular basis contact with the Dutch tax authorities and acts in line with an advanced pricing agreement with Dutch tax authorities.

22 PHOENIX PIB Dutch Finance B.V.

10 Fair value The fair value of the other financial instruments stated on the balance sheet can be specified as follows:

Balance as per 31 January: Fair value Carrying Fair value Carrying amount amount 2020 2020 2019 2019 EUR 1,000 EUR 1,000 EUR 1,000 EUR 1,000

Financial non-current assets Loan facilities to related parties 317,311 317,311 633,856 606,311

317,311 317,311 633,856 606,311

Other receivables and prepaid expenses

Loan issued from related parties 317,954 317,954 - - Interest receivable from related parties 736 736 9,726 9,726

318,690 318,690 9,726 9,726

Non-current liabilities Bond issued 315,144 298,958 626,898 597,076

315,144 298,958 626,898 597,076

Current liabilities Bond issued 302,670 299,696 - - Interest payable 11,907 11,907 11,908 11,908 Payables to related parties 330 330 322 322 Other liabilities 42 42 39 39

314,949 311,975 12,269 12,269

The Company has changed the determination of the discount rate for discounting future cashflows of the loan facilities to related parties from using a market interest rate to a refinancing rate. The impact on the comparative figures is not material, however for consistency reason the comparative figure is adjusted. Both the loan facilities to related parties as well as the bonds show fair values which are higher than the carrying amount. The higher values are mainly the effect of the interest percentages which are above the market level.

23 PHOENIX PIB Dutch Finance B.V.

11 Off-balance sheet commitments Commitments The Company issued loan facilities to related parties with a total value of EUR 626,000, of which EUR 616,800 (note 3 and note 4) have actual been issued. If loans are drawn up to their maximum this would result in an increase in issued loans by EUR 9,200. The Company is part of a fiscal unity for corporate income tax purposes together with the principal of the fiscal unity, PHOENIX PIB Dutch Holding B.V. and PHOENIX PIB Finance B.V., a fully-owned subsidiary of PHOENIX PIB Dutch Holding B.V. As such the Company is jointly and severally liable for the corporate income tax payable by all companies belonging to the fiscal unity. No other off-balance sheet commitments are outstanding as per 31 January 2020.

12 Interest - and other financial income and expense The detail of interest - and other financial income is as follows:

2019/20 2018/19 EUR 1,000 EUR 1,000

Interest income - related parties 23,273 23,168

23,273 23,168

Interest income from related parties concerns interest on loan facilities to related parties as reported under note 3 and note 4. The detail of interest - and other financial expense is as follows:

2019/20 2018/19 EUR 1,000 EUR 1,000

Interest expense 20,250 20,250 Amortization costs bonds 1,578 1,522

21,828 21,772

Interest expense concerns interest payable on the issued bonds as reported under note 7 and note 8. Bonds are subsequently stated at amortised cost, the difference between the proceeds (net of transaction costs) and the redemption value is recognised as amortization costs bonds. These amortization costs result in a difference between the nominal interest rate and the effective interest rate.

24 PHOENIX PIB Dutch Finance B.V.

13 General and administrative expenses The detail of other operating expenses is as follows:

2019/20 2018/19 EUR 1,000 EUR 1,000

Remuneration 59 53 Professional fees 59 49 Other expenses 8 5

126 107

The remuneration expenses relates to the two part-time directors, two part-time employees and charges by PHOENIX Pharmahandel GmbH & Co KG. Professional fees relates to audit fees, legal- and tax consultants.

14 Transactions with related parties Transactions with related parties occur when a relationship exists between the Company, its participating interests and their directors and key management personnel. In general all transactions are based at arms’ length. In January 2020 the affiliated party PHOENIX PIB Finance BV repaid the loans issued and the Company issued new loans with the same interest conditions and the same maturity dates to the affiliated party PHOENIX International Beteiligungs GmbH. Since the issued loans towards PHOENIX International Beteiligungs GmbH are considered as new loans this transactions is considered not to be at arm’s length. The new issued loans were recognized per end of the fiscal year at their fair value of EUR 635,265 in comparison to the nominal value of EUR 616,800. The difference is caused by the difference between the market interest of respectively 0.68% (EUR 315,000) and 0.588% (EUR 301,800) and the used interest of respectively 3.57% and 4.00%. There are no other transactions with related parties other than disclosed in these financial statements. There have been no transactions outside the normal course of business.

15 Income taxes The Company is part of a fiscal unity for corporate income tax purposes together with PHOENIX PIB Dutch Holding B.V. as the principal of such fiscal unity and with PHOENIX PIB Finance B.V. Since the Company forms a fiscal unity together with PHOENIX PIB Dutch Holding B.V. and PHOENIX PIB Finance B.V., the company applies the principle that the deferred tax assets / liabilities are accounted for at the parent entity of the fiscal unity when applicable, therefore no deferred tax assets or liabilities are accounted in the financial statements of the Company.

25 PHOENIX PIB Dutch Finance B.V.

The statutory corporate tax rate in the Netherlands was 25% (2018/19: 25%). The effective tax rate over 2019/20 also was 25% (2018/19: 25%):

2019/20 2018/19 EUR 1,000 EUR 1,000 Operating income/(loss) before provision for income taxes 1,319 1,289

Income tax benefit/ (expense) (330) (322)

Effective tax rate 25% 25%

16 Auditor’s fees With reference to Section 2:382a (1) and (2) of the Dutch Civil Code, the following fees for the financial year of 2019/20 have been charged by Ernst & Young Accountants LLP to the Company:

2019/20

Ernst & Young Other EY Total EY Accountants network LLP EUR 1.000 EUR 1.000 EUR 1.000

Audit of the financial statements 42 - 42 Other audits - - - Tax advise - - - Other non-audit services - - -

42 - 42

2018/19

Ernst & Young Other EY Total EY Accountants network LLP EUR 1.000 EUR 1.000 EUR 1.000

Audit of the financial statements 38 - 38 Other audits - - - Tax advise - - - Other non-audit services - - -

38 - 38

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17 Remuneration board of directors Remuneration of the board directors took place in the form of salary. The total remuneration for 2019/20 was EUR 38 (2018/19: EUR 38) including social charges, fully related to short term remuneration.

18 Articles of Association provisions governing profit appropriation Awaiting the decision by the shareholders, the net profit of the year is separately included in the shareholder's equity as result of the year.

19 Subsequent events On May 19th 2020, the direct shareholder of the Company (PHOENIX PIB Dutch Holding BV) merged into its direct parent (PHOENIX Noweropa Beteiligungs GmbH). The merger has no direct consequences for the Company. The Company considers the COVID-19 Pandemic as a significant event after closing the closing date of 31 January 2020. The Company’s main risk concerns the credit risk on outstanding loans. The outstanding loans are issued to PHOENIX International Beteiligungs GmbH which is the direct and indirect owner of nearly all PHOENIX subsidiaries. Since PHOENIX mainly acts on the pharmaceutical market – a market in which has the influence of the COVID-19 Pandemic is minimal – the risk has not increased strongly. Maarssen, 25 May 2020 Board of directors:

Mr. B.E. Tolhuisen

Mr. R. van Leuveren

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Other information Appropriation of income The Articles of incorporation provide that the net income for the year is subject to the disposition decided upon at the Annual General Meeting of Shareholders.

Independent auditor’s report The independent auditor’s report is set forth on the following page.