Financial Statements for the Year 2006/2007

PHOENIX PIB Dutch Finance B.V.

Financial statements for the year 2015/16

PHOENIX PIB Dutch Finance B.V.

Contents

Directors’ report 1

Balance sheet as at 31 January 2016 6

Statement of income for the year 2015/16 7

Cash flow statement for the year 2015/16 8

Notes to the 2015/16 financial statements 9

Other information 25

Independent auditor’s report 26

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 2016. 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 certain PHOENIX Group companies and was founded on 17 April 2013. PHOENIX PIB Dutch Finance B.V. is a wholly-owned subsidiary of PHOENIX PIB Dutch Holding B.V., Maarssen, the Netherlands and is ultimately owned by PHOENIX Pharmahandel GmbH & Co KG, 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 wholly-owned subsidiary of PHOENIX PIB Dutch Holding B.V.. The Company recognizes its tax result in the financial statements. The taxable result is based on a draft advanced pricing agreement which is currently under discussion with Dutch tax authorities. It is expected that the tax authorities will sign the draft advanced pricing agreement without any (major) adjustments. 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 2015/16 was a gain of EUR 1,664 (2014/15: EUR 1,338) and the Company incurred EUR 99 (2014/15: 116) general and administrative expenses this resulted in an operating profit before taxation for the year 2015/16 of EUR 1,565 (2014/15: EUR 1,222). The company had a positive cash flow of EUR 36 (2014/15: 204 negative) mainly due to a withdrawal of loan facilities. The Company’s solvability remained on an equal level of 1.2% (2014/15: 1.2%), mainly as the two issued bonds and the related interest payable remained stable and as there were no large movements in the equity. The current ratio improved to 73.3% (2014/15: 28.3%) as the current assets increased due to higher interest receivables. Since the Company forms a fiscal unity together with PHOENIX PIB Dutch Holding B.V. and PHOENIX PIB Finance B.V., all deferred tax assets and/or liabilities are accounted for at the principal of the fiscal unity, PHOENIX PIB Dutch Holding B.V. 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 is directly settled with Phoenix PIB Dutch Holding B.V. 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.

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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 has influence in 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.. As of 1 January 2013, the Law ‘Wet Bestuur en Toezicht’, a new Management and Supervision Act came into effect. The new Act 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 current composition of the Board of Directors deviates from the above-mentioned percentages, since the board exists of 2 male directors. 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 woman candidate is preferred. Finance As per 31 January 2016 the Company’s assets were for 97% (31 January 2015: 97%) financed by long-term financing with two issued bonds. These bonds with each a nominal value of EUR 300,000 have been issued during the fiscal year 2014/15 (30 July 2014) and during the fiscal year of 2013/14 (27 May 2013) respectively. Both bonds are listed on the EURO MTF, the 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. Going Concern The Company has a positive result and shareholder’s equity for the year 2015/16, but a negative working capital as per end of the fiscal year. Although the Company has a negative working capital as per 31 January 2016 we believe however that the going concern assumption is based on the refinancing measures taken and implemented by the PHOENIX Group. PHOENIX Pharmahandel GmbH & Co KG, as ultimate parent 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 when necessary. 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 has 2 part-time directors (2014/15: 2) and 3 part-time employees (2014/15: 3). No significant change is expected for the year 2016/17. Risk management The risk management policies and procedures are key to ensure proper management of the Company. However the Company is a small company with 2 directors and 3 employees, 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

2 PHOENIX PIB Dutch Finance B.V.

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 here 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 draft advanced pricing agreement which is currently under discussion with Dutch tax authorities. As

3 PHOENIX PIB Dutch Finance B.V.

the amounts of the loan facilities and bonds are in line with each 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 based on 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 2016 the Company’s assets were for 97% (31 January 2015: 97%) financed by long-term financing with two issued bonds for which the ultimate parent, PHOENIX Pharmahandel GmbH & Co KG, and certain of its subsidiaries are guarantors. This position is covered by two issued loans with similar due dates as the bonds, resulting in a reduced risks on the financial position of the Company. Credit risk represents the loss that would be recognised at the reporting date should counterparties fail to perform as contracted. As of 31 January 2016, the majority of the Company’s receivables represents amounts due from related parties. PHOENIX, as a beneficial owner of the Company, ensures that any PHOENIX Group Company can meet its contractual and other obligations to third parties under the guarantee structure. The credit rating of PHOENIX Group is “BB+“, by Standard and Poors and “BB” by Fitch, with each an expected stable outlook. Therefore, the risk of a credit loss on the group lending is limited. 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 a draft advanced pricing agreement which is currently under discussion with Dutch tax authorities. Outlook The Company’s management expects for the year 2016/17 no significant changes in activities, therefore it is expected that the net income for the year 2016/17 will be in line with the net income of 2015/16.

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Subsequent events There have been no significant subsequent events between 1 February 2016 and the date of issuance of these financial statements. Maarssen, 31 March 2016 Board of Directors:

Mr. J.P. Eeken

Mr. K.H. Loges

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Balance sheet as at 31 January 2016 (before appropriation of net income)

Note 31 January 2016 31 January 2015 EUR 1,000 EUR 1,000 EUR 1,000 EUR 1,000

Fixed assets Financial fixed assets 3 603,048 607,830

Total fixed assets 603,048 607,830

Current assets Other receivables and prepaid expenses 4 8,866 3,419

8,866 3,419 Cash and cash equivalents 5 176 140

Total current assets 9,042 3,559

Total assets 612,090 611,389

Note 31 January 2016 31 January 2015 EUR 1,000 EUR 1,000 EUR 1,000 EUR 1,000

Shareholder’s equity 6 Share capital 250 250 Share premium 4,500 6,000 Retained earnings 1,137 220 Result for the year 1,174 917

7,061 7,387

Long term liabilities 7 592,696 591,440

Short term liabilities 8 12,333 12,562

Total shareholder’s equity and liabilities 612,090 611,389

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Statement of income for the year 2015/16

Note 2015/16 2014/15 EUR 1,000 EUR 1,000 EUR 1,000 EUR 1,000

Interest - and other financial income 12 26,966 20,026 Interest - and other financial expenses 12 (25,302) (18,688) General and administrative expenses 13 (99) (116)

Operating income/(loss) before provision for income taxes 1,565 1,222

Income tax benefit/ (expense) 15 (391) (305)

Net income/(loss) 1,174 917

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Cash flow statement for the year 2015/16

2015/16 2014/15 EUR 1,000 EUR 1,000 EUR 1,000 EUR 1,000

Net income/(loss) 1,174 917

Operating results from financial (income)/losses (1,664) (1,338) Income tax 391 305

Change in net working capital (746) (223)

Interest received 21,518 16,751 Interest paid (20,251) (11,031) Guarantee fee paid (3,668) (2,759)

(2,401) 2,961

Cash flow from Operating activities (3,246) 2,622

Loan facilities - (607,830) Withdrawal of loan facilities 4,782 304,525

Cash flow from Investing activities 4,782 (303,305)

Capital increase - 2,750 Repayment of share premium (1,500) - Cash received from the issue of bonds and loans - 297,729

Cash flow from Financing activities (1,500) 300,479

Change in Cash and cash equivalents 36 (204)

Cash and cash equivalents at 1 February 140 344

Cash and cash equivalents at 31 January 176 140

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Notes to the 2015/16 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, serves as a financing company for certain PHOENIX group 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 Pharmahandel GmbH & Co KG, Mannheim, Germany. The financial figures of the Company are included in the consolidated annual accounts of PHOENIX Pharmahandel GmbH & Co KG, Mannheim, Germany. b) Basis of preparation The accompanying financial statements have been prepared under the historical cost convention in accordance with accounting principles generally accepted 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 a positive result and shareholder’s equity for the year 2015/16, but a negative working capital as per end of the fiscal year. Although the Company has a negative working capital as per 31 January 2016 we believe however that the going concern assumption is based on the refinancing measures taken and implemented by the PHOENIX Group. PHOENIX Pharmahandel GmbH & Co KG, as ultimate parent 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 when necessary. 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 the 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 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. 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 Assets and liabilities denominated in foreign currencies are translated into euros at the rates of exchange prevailing at year-end. Transactions denominated in foreign currency are translated into the relevant functional currency of the group companies at the exchange rate applying on the transaction date. Monetary assets and liabilities denominated in foreign currency are translated at the balance sheet date into to 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. Translation income and losses are taken 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 investments in subsidiaries, loan facilities and other receivables, cash items, loans and other financing commitments, and trade and other payables. Financial instruments initially recognized at acquisition cost. After initial recognition, financial instruments are valued in the manner described below.

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Long-term liabilities Long-term liabilities which the Company intends to hold to maturity (and is capable of doing so), are measured at amortised cost on the basis of the effective interest method, less impairment losses if applicable.

Financial fixed assets and other current receivables Financial fixed assets and other current receivables are carried at amortised cost on the basis of the effective interest method, less impairment losses if applicable. e) Impairment of financial assets Financial assets should be tested for impairment in case of changes or circumstance 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. 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) Long term liabilities Long term liabilities are recognised initially at fair value, net of transaction costs incurred. Long term 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 Income and expenses are recorded in the period to which they relate. j) Income tax Corporate income tax comprises the current and deferred corporate income tax payable and deductible for the reporting period. Corporate income tax is recognised in the profit and loss account except to the extent that it relates to items recognised directly to equity, in which case it is recognised in equity.

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Current tax comprises the expected tax payable or receivable on the taxable 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. Since the Company forms a fiscal unity together with PHOENIX PIB Dutch Holding B.V. and PHOENIX PIB Finance B.V., all deferred tax assets and/or liabilities are accounted for at the principal of the fiscal unity, PHOENIX PIB Dutch Holding B.V. 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. Cash flows in foreign currency are translated into euros at the average weighted exchange rates at the dates of the transactions. 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 both financial and non-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 only determined for the benefit of the disclosures. The fair value is estimated at the present value of the future cash flows. 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 only determined for disclosure purposes and is calculated on the basis of the net present value of future repayments and interest payments, discounted at the market interest 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.

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m) Use of estimates The preparation of the financial statements requires the 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. Actual results may differ 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. In particular, information about assumptions and estimation uncertainties and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements are described in note 3. Loan facilities which are tested for impairment in case of changes or circumstance arise that lead to an indication that the carrying amount of the asset will not be recovered.

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3 Financial fixed assets Loan facilities to related parties

EUR 1,000

Balance as per 31 January 2014 304,525 Loan repayments from related parties (304,525) Loan facilities to related parties 607,830

Balance as per 31 January 2015 607,830 Use of loan facilities by related parties (26,300) Withdrawal of loan facilities by related parties 21,518

Balance as per 31 January 2016 60 3,048

Loan facilities to related parties The loan facilities to related parties as per 31 January 2016 of EUR 603,048 are fully issued to PHOENIX PIB Finance BV and concern loan facilities which are limited until 27 May 2020 (EUR 301,997 with a maximum facility of EUR 310,000) and 30 July 2021 (EUR 301,051 with a maximum facility of EUR 315,000) respectively. PHOENIX PIB Finance BV is allowed to increase the issued loans with a minimum of EUR 10,000 up to the maximum loan facility. The loans bear an interest which is calculated by reference of the refinancing possibilities of the Company including a margin for administration and equity at risk and which is in line with the draft advanced pricing agreement. As per end of the fiscal years the calculated interest rates were 4.17% (EUR 301,997) and 4.60% (EUR 301,051) respectively.

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 2016 2015 EUR 1,000 EUR 1,000

Receivables from related parties 8,866 3,419

8,866 3,419

Receivables from related parties consists of intercompany receivables for interest charges on the loan facilities and are presented under current assets as they mature within one year.

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5 Cash and cash equivalents Cash and cash equivalents amount to EUR 176 (31 January 2015: EUR 140). No restriction on the usage of cash exists.

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

Issued and Share Retained Unallocated Total paid-in capital premium earnings result

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

Balance as per 31 January 2014 250 3,250 - 220 3,720 Capital contribution - 2,750 - - 2,750 Appropriation of net income 2013/14 - - 220 (220) - Net income for the year 2014/15 - - - 917 917

Balance as per 31 January 2015 250 6,000 220 917 7,387

Appropriation of net income 2014/15 - - 917 (917) - Repayment of share premium - (1,500) - - (1,500) Net income for the year 2015/16 - - - 1,174 1,174

Balance as per 31 January 2016 250 4,500 1,137 1,174 7,061

The authorised share capital consists of 250,000 common shares of which 250,000 shares are issued and outstanding at 31 January 2016. The shares have a nominal value of 1 EURO each. The Company received on 1 October 2014 a capital contribution of EUR 2,750 from its (immediate) parent PHOENIX PIB Dutch Holding B.V. The Company repaid a share premium in amount of EUR 1,500 to its (immediate) parent PHOENIX PIB Dutch Holding B.V. on 27 November 2015.

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7 Long term liabilities

Balance as per 31 January 2016 2015 EUR 1,000 EUR 1,000

Bonds 592,696 591,440

592,696 591,440

As per 31 January 2016 the long term liabilities consisted out of two issued bonds each with a nominal value of EUR 300,000. These bonds have been issued during the fiscal year of 2013/14 (27 May 2013) and during the fiscal year of 2014/15 (30 July 2014) and are listed on the EURO MTF, the 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 bonds bear an interest of 3.125% (effective interest rate: 3.444%) with a due date on 27 May 2020 and 3.625% (effective interest rate: 3.859%) with a due date on 30 July 2021 respectively. On behalf of the issued bonds the ultimate parent of the Company, PHOENIX Pharmahandel GmbH & Co KG, and certain of its subsidiaries act jointly and severally as guarantor.

8 Short term 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 2016 2015 EUR 1,000 EUR 1,000

Interest payable 11,908 11,908 Payables to related parties 391 424 Other liabilities 34 230

12,333 12,562

Interest payable relate to accrued interest in relation to the bonds as mentioned in note 7. The payables to related parties relate to the (corporate) tax payable to the principal of the fiscal unity, PHOENIX PIB Dutch Holding B.V.

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9 Risk Section The risk management policies and procedures are key to ensure proper management of the Company. However the Company is a small company with 2 directors and 3 employees, 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 here 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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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 draft advanced pricing agreement which is currently under discussion with Dutch tax authorities. As the amounts of the loan facilities and bonds are in line with each 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 based on 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 2016 the Company’s assets were for 97% (31 January 2015: 97%) financed by long-term financing with two issued bonds for which the ultimate parent, PHOENIX Pharmahandel GmbH & Co KG, and certain of its subsidiaries are guarantors. This position is covered by two issued loans with similar due dates as the bonds, resulting in a reduced risks on the financial position of the Company. Credit risk represents the loss that would be recognised at the reporting date should counterparties fail to perform as contracted. As of 31 January 2016, the majority of the Company’s receivables represents amounts due from related parties. PHOENIX, as a beneficial owner of the Company, ensures that any PHOENIX Group Company can meet its contractual and other obligations to third parties under the guarantee structure. The credit rating of PHOENIX Group is “BB+“, by Standard and Poors and “BB” by Fitch, with each an expected stable outlook. Therefore, the risk of a credit loss on the group lending is limited. 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 a draft advanced pricing agreement which is currently under discussion with Dutch tax authorities.

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10 Fair value The fair value of most of the financial instruments stated on the balance sheet, including receivables, loan facilities, cash and cash equivalents and current liabilities, is approximately equal to their carrying amount. 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 2016 2016 2015 2015 EUR 1,000 EUR 1,000 EUR 1,000 EUR 1,000

Financial fixed assets Loan facilities to related parties 626,674 603,048 643,917 607,830

626,674 603,048 643,917 607,830

Other receivables and prepaid expenses Receivables from related parties 8,866 8,866 3,419 3,419

8,866 8,866 3,419 3,419

Long term liabilities Bonds issued 617,120 592,696 621,663 591,440

617,120 592,696 621,663 591,440

11 Off-balance sheet commitments Commitments The Company is part of a fiscal unity for corporate income tax purposes together with PHOENIX PIB Dutch Holding B.V. and PHOENIX PIB Finance 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 2016.

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

2015/16 2014/15 EUR 1,000 EUR 1,000

Interest income - related parties 26,966 20,026

26,966 20,026

Interest income from related parties concerns interest on loan facilities to related parties as reported under note 3. Increase in interest income is the effect of average higher outstanding credit facilities.

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

2015/16 2014/15 EUR 1,000 EUR 1,000

Guarantee fees - related parties 3,667 2,759 Interest expense - third parties 20,250 14,886 Amortization costs bonds 1,385 1,043

25,302 18,688

Guarantee fees to related parties relate to the guarantee fees paid to PHOENIX Pharmahandel GmbH & Co KG and certain of its subsidiaries on behalf of the issued bonds as they act jointly and severally as guarantor to the issued bonds. The guarantee fees concerns 0,603% over the outstanding bonds and is based on a Transfer Pricing Documentation which reflects a guarantee fee at arm’s length. Interest expense to third parties concerns interest payable on the issued bonds as reported under note 7. Increase in interest expense is the effect of a new issued bond during the fiscal year of 2014/15 (30 July 2014) and for which the full year effect caused for higher interest expenses during the current fiscal year. 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.

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

2015/16 2014/15 EUR 1,000 EUR 1,000

Remuneration 48 48 Professional fees 45 57 Other expenses 6 11

99 116

The remuneration expenses relates to the 2 part-time directors and 3 part-time employees. 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. On behalf of the issued bonds the ultimate parent of the Company, PHOENIX Pharmahandel GmbH & Co KG, and certain of its subsidiaries act jointly and severally as guarantor. Entities which act as guarantor have been compensated by the Company by way of guarantee fee as mentioned in note 7 and in note 12. 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., all deferred tax assets and/or liabilities are accounted for at principal of the fiscal unity, PHOENIX PIB Dutch Holding B.V. 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 is directly settled with Phoenix PIB Dutch Holding B.V.

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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 2015/16 have been charged by Ernst & Young Accountants LLP to the Company: audit of the financial statements for EUR 22 (2014/15: EUR 22) and no Other Assurance Services. By other EY network other audit related services no amounts have been charged (2014/15: EUR 167 by Ernst&Young GmbH Wirtschaftprüfungsgesellschaft on behalf of the issued bonds by the Company).

2015/16

EY Audit Other EY Total EY network EUR 1.000 EUR 1.000 EUR 1.000

Audit of the financial statements 22 - 22 Other audit related services - - - Fiscal advisory - - - Other non-audit services - - -

22 - 22

2014/15

EY Audit Other EY Total EY network EUR 1.000 EUR 1.000 EUR 1.000

Audit of the financial statements 22 - 22 Other audit related services - - - Fiscal advisory - - - Other non-audit services - 167 167

22 167 189

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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 2015/16 was EUR 20 (2014/15: EUR 20) including social charges, fully related to short term remuneration. Maarssen, 31 March 2016 Board of Directors:

Mr. J.P. Eeken

Mr. K.H. Loges

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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. 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. Subsequent events There have been no significant subsequent events between 1 February 2016 and the date of issuance of these financial statements. Independent auditor’s report The independent auditor’s report is set forth on the following page.

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Independent auditor’s report To: the Annual General Meeting of the Shareholders of PHOENIX PIB Dutch Finance B.V. Report on the financial statements We have audited the accompanying financial statements for the year ended January 31, 2016 of PHOENIX PIB Dutch Finance B.V., Maarssen, which comprise the balance sheet as at January 31, 2016, the profit and loss account for the year then ended and the notes, comprising a summary of the accounting policies and other explanatory information.

Management’s responsibility Management is responsible for the preparation and fair presentation of these financial statements and for the preparation of the directors’ report, both in accordance with Part 9 of Book 2 of the Dutch Civil Code. Furthermore management is responsible for such internal control as it determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the financial statements give a true and fair view of the financial position of PHOENIX PIB Dutch Finance B.V. as at January 31, 2016 and of its result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.

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Report on other legal and regulatory requirements Pursuant to the legal requirement under Section 2:393 sub 5 at e and f of the Dutch Civil Code, we have no deficiencies to report as a result of our examination whether the directors’ report, to the extent we can assess, has been prepared in accordance with Part 9 of Book 2 of this Code, and whether the information as required under Section 2:392 sub 1 at b-h has been annexed. Further we report that the directors’ report, to the extent we can assess, is consistent with the financial statements as required by Section 2:391 sub 4 of the Dutch Civil Code. Eindhoven, 31 March 2016 Ernst & Young Accountants LLP

Signed by W.J. Spijker