Financial Statements 2022 – Roche Finance Europe B.V.

Roche Finance Europe B.V. -

Financial Statements 2022

Financial Statements 2022 – Roche Finance Europe B.V.

Management Report

1. Review of the year ended 31 December 2022

General

Roche Finance Europe B.V., a company registered in the Netherlands (hereinafter ‘the Company’), is 100% indirectly owned by

Roche Holding Ltd, a public company registered in Switzerland and parent company of the Roche Group. The main activity of the

Company is the provision of financing to other affiliates of the Roche Group. The refinancing is in the form of bond or loan from

the financial markets.

Financial position and performance

In the financial year 2022, the company made a net profit of EUR 456 thousand (2021: loss of EUR 169 thousand). Interest income

on loans was EUR 32,453 thousand (2021: EUR 32,630 thousand), interest expense on debt instruments was EUR 16,747 thousand

(2021: EUR 16,926 thousand), amortisation cost of debt discount was EUR 1,474 thousand (2021: EUR 1,471 thousand) and

guarantee fees to the parent company were EUR 13,613 thousand (2021: EUR 13,613 thousand).

No investments were made during the financial year 2022 (2021: none).

The credit rating of Roche Holding Ltd is AA by Standard & Poor’s, Aa2 by Moody’s and AA by Fitch, based on the most recent

available ratings. Except from Moody’s upgrade from Aa3 to Aa2 on 15 September 2022, these ratings have not changed since

the COVID-19 pandemic. The future cash flows of the intercompany loans is sufficient in order to meet the liquidity needs and the

future obligations of the Company.

Employees

The Company has no employees. Roche Pharmholding B.V., Woerden, performs all administrative activities on behalf of the

Company.

Diversity and Inclusion

Since 1 May 2022, the Board of Directors of Roche Finance Europe B.V. (‘the Board’) consists of 4 members, all of which are male.

The Board of Directors recognises the benefits of diversity, including gender balance. The Board of Directors will continue to be

selected on the basis of wide-ranging experience, backgrounds, skills, knowledge and insights and the gender diversity

objectives will be taken into account as much as possible. In order to achieve gender diversity, the Board of Directors aims

towards a balanced representation of at least 30% women and at least 30% men. These targets are deemed appropriate and

ambitious for the Company. The Company did not meet the gender diversity target for 2022.

Future outlook

The Company will continue its current activities in 2023 with no changes expected. The Company expects to redeem the two

issued notes and to receive payment for two intercompany loans (all with the same due dates) on 27 February 2023 and 29

August 2023, respectively. The Company expects to issue new notes/bonds and to issue new intercompany loans in the first

quarter of 2023.

2. Principal risks and uncertainties

Strategy

The financing activities of the Company will develop in line with the strategy of the Roche Group. Depending on the future

financing needs of the Roche Group, the Board of Directors of the Company may decide to issue new debt securities and/or

borrow funds to finance affiliates of the Roche Group. Consequently, the Board of Directors is responsible for the long-term

Financial Statements 2022 – Roche Finance Europe B.V.

strategy of the Company. The Company meets all of the requirements with respect to Corporate Governance by complying with

requirements as set out in the relevant regulation, including those of the Luxembourg Stock Exchange.

Operational activities

The Company has no employees. Roche Pharmholding B.V., Woerden, performs all administrative activities on behalf of the

Company. The Board of Directors is responsible to ensure all activities, including the ones performed outside the IT infrastructure,

are performed considering adequate segregation of duties. This is also in order to mitigate the risk of fraudulent activities. The

risk of fraud mainly arise from payment cycle and financial reporting. Both are covered by ensuring adequate segregation of

duties in the payments and administration processes. The Board is also responsible for managing the interest, liquidity and credit

risks of the Company. Whenever the Company is unable to manage these risks adequately, or is unable to meet compliance with

applicable regulations, this would directly affect the reputation of the Company and the Roche Group.

Risks

The Company is exposed to various financial risks arising from its financing activities.

Credit Risk

The Company is exposed to potential default of payment of any of its loans receivable from other affiliates of the Roche Group.

Therefore the credit risk ultimately depends on the financial position of the Roche Group.

The Company has assessed certain accounting matters that generally require consideration of forecasted financial information

taking into account the potential future impacts of the COVID-19 pandemic. The accounting matters assessed included, but were

not limited to, the Company’s financial assets. No impairment issues were noted for financial assets of the Company. At 31

December 2022 the Company has no financial assets which are past due.

Market and Liquidity Risk

The exposure to interest rates and foreign exchange rates is limited, because contractual interest rates, duration and terms of

financial assets and liabilities as well as their currency are generally matching. Therefore, the liquidity risk is reduced as well.

Moreover, the Company’s obligations to third parties on the bond markets are guaranteed by Roche Holding Ltd, the parent

company of the Roche Group and covered by loans receivable from other members of the Roche Group that have the same

maturity. The Roche Group did not observe a significant increase in liquidity risk in 2022 due to the COVID-19 pandemic.

The Company’s financial risk management is described in more detail in Note 15 to the Annual Financial Statements for the year

ended 31 December 2022.

Uncertainties

The main activity of the Company is to provide financing to other members of the Roche Group and to refinance this on the bond

or loan markets. Depending on decisions of management, the Company may potentially issue new debt securities and/or borrow

funds to finance other members of the Roche Group.

While there was no significant impact from the areas assessed on the Company’s Financial Statements, the Company will

continue to monitor the areas of increased judgements and risk for material changes. Based on our current knowledge and

available information, it is not expected that that current macroeconomic conditions, including the COVID-19 pandemic will have

an impact on the ability of the Company to continue as a going concern.

The other various known and unknown risks, uncertainties and other factors could lead to substantial differences between the

current and future results, financial position and performance of the Company and the historical results given in the Management

Report and the Financial Statements.

Financial Statements 2022 – Roche Finance Europe B.V.

3. Responsibility statement

The directors of Roche Finance Europe B.V. confirm that, to the best of their knowledge as of the date of their approval of the

audited financial statements as at 31 December 2022:

 the audited financial statements as at 31 December 2022, which have been prepared in accordance with the applicable

set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of Roche

Finance Europe B.V. taken as a whole; and

 the management report gives a true and fair view of the development and performance of the business and the position

of Roche Finance Europe B.V. together with a description of the principal risks and uncertainties that it faces.

Woerden, 31 January 2023

The Board of Directors

Peter Eisenring Maturin Tchoumi

Mark Ekelschot Rahul Doshi

Financial Statements 2022 – Roche Finance Europe B.V.

Roche Finance Europe B.V. Financial Statements

Roche Finance Europe B.V., statement of comprehensive income in millions of EUR

Year ended 31 December

2022

2021

Income

Financial income – related parties

3, 14

Total Income

Expenses

Financing costs

(18)

Guarantee fees – related parties

3, 14

(14)

Changes in impairment losses on financial instruments

(1)

Total expenses

(32)

(33)

Profit (loss) before taxes

Income tax

Net profit (loss)

Other comprehensive income, net of tax

Total comprehensive income

Financial Statements 2022 – Roche Finance Europe B.V.

Roche Finance Europe B.V., balance sheet (before result appropriation) in millions of EUR

31 December 2022

31 December 2021

Non-current assets

Long-term loans receivable – related parties

7, 14

997

1,732

Deferred income tax assets

Total non-current assets

997

1,732

Current assets

Short-term loans receivable – related parties

7, 14

731

Accounts receivable – related parties

Current income tax assets

Cash and cash equivalents

Total current assets

767

Total assets

1,764

1,767

Non-current liabilities

Long-term debt

(999)

(1,738)

Total non-current liabilities

(999)

(1,738)

Current liabilities

Short-term debt

(736)

Current income tax liabilities

Accrued interest on debt instruments

(12)

Total current liabilities

(748)

(12)

Total liabilities

(1,747)

(1,750)

Total net assets

Equity

Share capital

Retained earnings

Unappropriated result

Total equity

Financial Statements 2022 – Roche Finance Europe B.V.

Roche Finance Europe B.V., statement of cash flows in millions of EUR

Year ended 31 December

Cash flows from operating activities

2022

2021

Net profit (loss after tax)

Adjustments:

- Interest income – related parties

(32)

(33)

- Changes in expected loss allowance on loans

- Financing costs

- Guarantee fees expense – related parties

- Income taxes expense

- Unrealised exchange (gains) losses on loan receivables

(6)

- Unrealised exchange (gain) losses on debt

(4)

Total

Proceeds from repayment of loans receivable – related parties

Interest received – related parties

(Increase) decrease of cash pool balance with related parties

(1)

(2)

Total cash flow from operating activities

Cash flows from investing activities

Total cash flow from investing activities

Cash flows from financing activities

Repayment and redemption of notes

Guarantee fees paid – related parties

(14)

Interest paid

(17)

Total cash flow from financing activities

(31)

Increase (decrease) in cash and cash equivalents

Cash and cash equivalents at 1 January

Cash and cash equivalents at 31 December

Financial Statements 2022 – Roche Finance Europe B.V.

Roche Finance Europe B.V., statement of changes in equity in millions of EUR

Share capital

Retained earnings

Unappropriated result

Total

Year ended 31 December 2021

At 1 January 2021

Net income

Other comprehensive income

Total comprehensive income

Appropriation of result

(1)

At 31 December 2021

Year ended 31 December 2022

At 1 January 2022

Net income

Other comprehensive income

Total comprehensive income

Appropriation of result

At 31 December 2022

The retained earnings represents the Company’s cumulative net result at the beginning of the period after accounting for

dividend payments. Unappropriated result represents the Company’s net result for the period.

Financial Statements 2022 – Roche Finance Europe B.V.

Notes to the Roche Finance Europe B.V. Financial Statements

1. Summary of significant accounting policies

Basis of preparation

These financial statements are the audited annual financial statements (hereafter ‘the Annual Financial Statements’) of Roche

Finance Europe B.V., Chamber of Commerce Number 30186306, a company incorporated in the Netherlands (‘the Company’). The

Company is controlled by the immediate parent company Roche Pharmholding B.V. and 100% indirectly owned by Roche Holding

Ltd, a public company registered in Switzerland and parent company of the Roche Group, and therefore the Company is part of

the Roche Group. The main activity of the Company is the provision of financing to other affiliates of the Roche Group. The

refinancing is in the form of bond or loan from the financial markets.

Statement of compliance

The Annual Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as

adopted by the European Union and with Part 9 of Book 2 of the Netherlands Civil Code. They have been prepared using the

historical cost convention except for items that are required to be accounted for at fair value (currently none). They were

approved for issue by the Board of Directors on 31 January 2023.

Going concern

Management has assessed that it is appropriate to prepare the Company’s financial statements on a going concern basis. The

Company’s obligations to third parties on the bond markets are guaranteed by Roche Holding Ltd, the parent company of the

Roche Group and covered by loan receivables from other members of the Roche Group that have the same contractual maturities.

The Company expects to redeem the two issued notes and to receive payment for two intercompany loans (all with the same due

dates) on 27 February 2023 and 29 August 2023, respectively.

Key accounting judgements, estimates and assumptions

The preparation of the Annual Financial Statements requires management to make judgements, estimates and assumptions that

affect the reported amounts of revenues, expenses, assets, liabilities and related disclosures. Actual outcomes could differ from

those management estimates. The estimates and underlying assumptions are reviewed on an ongoing basis and are based on

historical experience and various other factors. Revisions to estimates are recognised in the period in which the estimate is

revised.

There are currently no key assumptions about the future and no key source of estimation uncertainty that the Company’s

management believe have a significant risk of causing a material adjustment to the carrying value of assets and liabilities within

the next twelve months.

Impairment of financial assets.

At 31 December 2022 the Company had EUR 3 million in allowance for doubtful accounts for loans receivables (2021: EUR 3

million) (see Note 7). The allowance for doubtful accounts is based on assumptions about risk of default and expected loss rates.

The Company uses judgement in making these assumptions and selecting the inputs to the calculation of the allowance for

doubtful accounts, based on the company’s past experience, existing market conditions as well as forward-looking estimates at

the end of each reporting period.

Impact of the COVID-19 pandemic

The Company has assessed certain accounting matters that generally require consideration of forecasted financial information

taking into account the potential future impacts of the COVID-19 pandemic. The accounting matters assessed included, but were

not limited to, the Company’s financial assets. No impairment issues were noted for financial assets of the Company. At 31

December 2022 the Company has no financial assets which are past due.

While there was no significant impact from the areas assessed on the Company’s Financial Statements, the Company will

continue to monitor the areas of increased judgements and risk for material changes. Based on our current knowledge and

available information, it is not expected that COVID-19 pandemic will have an impact on the ability of the Company to continue as

a going concern.

Financial Statements 2022 – Roche Finance Europe B.V.

Changes in accounting policies adopted by the Roche Group and, consequently, by the Company

In 2022 Roche Group has implemented various minor amendments to existing standards and interpretations. None of these new

and revised standards and interpretations has a material impact on the Company’s overall results and financial position.

Future new and revised standards

The Roche Group and consequently the Company are currently assessing the potential impacts of the various new and revised

standards and interpretations that will be mandatory from 1 January 2023 which the Roche Group, and consequently, the

Company has not yet applied. Based on an analysis to date, the Company does not anticipate that these will have a material

impact on the Company’s overall results and financial position. The Roche Group and the Company are also assessing other new

and revised standards which are not mandatory until after 2023.

Foreign currency translation

The functional currency of the Company is Euro (EUR). Transactions in other currencies are initially reported using the exchange

rate at the date of the transaction. Foreign currency monetary assets and liabilities are translated at the rates ruling at the

reporting date. The exchange differences arising from the translation of the unsettled monetary assets and liabilities or upon their

settlement are recognised in profit or loss.

Accounting policies for assets and liabilities

Accounts receivable

Accounts receivable are carried at the original invoice amount less allowances made for doubtful accounts. The Company applies

the simplified approach prescribed by IFRS 9, which requires the use of the lifetime expected loss provision from initial

recognition of the receivables. The Company measures an allowance for doubtful accounts equal to the credit losses expected

over the lifetime of accounts receivable.

Cash and cash equivalents

Cash and cash equivalents include cash on hand and time, call and current balances with banks and similar institutions. Such

balances are only reported as cash equivalents if they are readily convertible to known amounts of cash, are subject to

insignificant risk of changes in their fair value and have a maturity of three months or less from the date of acquisition.

Fair values

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between

market participants at the measurement date. It is determined by reference to quoted market prices or by the use of established

valuation techniques such as the discounted cash flow method if quoted prices in an active market are not available (‘Fair value

hierarchy’). Valuation techniques will incorporate observable market data about market conditions and other factors that are

likely to affect the fair value of a financial instrument. The fair values of financial assets and liabilities at the reporting date are not

materially different from their reported carrying values unless specifically mentioned in the Notes to the Financial Statements.

Financial assets at amortised cost

Financial assets are measured at amortised costs.

Loans and receivables are non-derivative financial assets that are held for collection of contractual cash flows where those cash

flows represent solely payments of principal and interest. Loans and receivables are initially recorded at fair value and

subsequently carried at amortised cost using the effective interest rate method, less any impairment losses.

For loans to related parties carried at amortised cost, the Company applies the general expected credit loss model.

Allowances for expected credit losses for loans to related parties are recognised based on a forward looking expected credit loss

model. The methodology used to determine the amount of the allowance is based on whether there has been a significant

increase in credit risk since initial recognition of the financial asset. The Company uses the 30 days past due criteria as a

backstop rather than a primary driver to considering exposures to have significantly increased credit risk since the initial

recognition.

Financial Statements 2022 – Roche Finance Europe B.V.

For those where the credit risk has not increased significantly since initial recognition of the financial asset, twelve months of

expected credit losses along with gross interest income are recognised. For those for which credit risk has increased significantly,

lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit

impaired, lifetime expected credit losses along with interest income on a net basis are recognised.

The Company considers the probability of default upon initial recognition of an asset and whether there has been a significant

increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in

credit risk the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as

at the date of initial recognition. The following indicators are incorporated: internal credit rating, significant increases in credit risk

on other financial instruments of the same borrower, actual or expected significant adverse changes in business, financial and

economic conditions that are expected to cause a significant change to the borrower’s ability to meet its obligations.

Debt instruments

Debt instruments are initially recognised at fair value, net of transaction costs incurred, which is equal to the net proceeds

received. Subsequently they are reported at amortised cost. Any discount between the net proceeds received and the principal

value due on redemption is amortised over the duration of the debt instrument and is recognised as part of financing costs using

the effective interest rate method. The Company derecognises a financial liability when its contractual obligations are discharged,

cancelled or expired.

Accounting policies for profit or loss

Finance income and finance costs

Finance income comprises interest income on funds invested. Interest income is recognised as it accrues in profit or loss, using

the effective interest method.

Finance costs comprise guarantee fee expenses, interest expense on borrowings and impairment losses recognised on financial

assets. Guarantee fee to Roche Holding Ltd. are recognised as it accrues and calculated as a fixed percentage of nominal value

of outstanding Euro notes. Interest expenses are recognised using the effective interest method. Allowance for credit losses on

financial assets to related parties are recognised based on a forward looking expected credit loss model.

Taxation

Income taxes include all taxes based upon the taxable profits of the Company, including withholding taxes payable on the

distribution of retained earnings within the Roche Group. Other taxes not based on income, such as property and capital taxes,

are included within other expenses.

Deferred tax assets and liabilities are recognised on temporary differences between the tax bases of assets and liabilities and

their carrying values. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available

against which the unused tax losses can be utilised.

Current and deferred tax assets and liabilities are offset when the income taxes are levied by the same taxation authority and

when there is a legally enforceable right to offset them. Deferred taxes are determined based on the currently enacted tax rates

applicable in each tax jurisdiction where the Company operates.

Classification of cash flows

The Company has elected to present cash flow from operating activities using the indirect method, by adjusting the Company’s

net profit or loss after tax for any non-cash income and expense items in order to derive the cash generated from operations. The

Company classifies the cash flows from the issuance of, or proceeds from, loans receivables and the interest received to

‘operating activities’. The cash pool balances with related parties are also presented within cash flows from operating activities.

The Company believes that, for a finance entity, presenting the aforementioned items within operating activities provides more

relevant information. The cash flows from interest paid and repayment or redemption of notes and guaranteed feed paid are

classified as financing activities.

Financial Statements 2022 – Roche Finance Europe B.V.

2. Operating segment information

The Company has only one operating segment and undertakes its operations in the Netherlands. The vast majority of income

relates to interest on loans received from related parties

Financial income by locations of debtors in millions of EUR

2022

2021

Germany

Total

3. Financial income and financing costs

Financial income – related parties in millions of EUR

2022

2021

Interest income – related parties

Changes in impairment losses on financial instruments

(1)

Total financial income – related parties

Financing costs in millions of EUR

2022

2021

Interest expense on debt instruments

(17)

Amortisation of debt discount

(1)

Guarantee fees – related parties

(14)

Total financing costs

(32)

4. Auditors remuneration

For the financial year 2022, BDO Audit & Assurance B.V. charged net EUR 55,000 to the Company for the audit of Statutory

Financial Statements and review of the Interim Financial Statements (2021: BDO Audit & Assurance B.V. charged net EUR 55,000).

No other services have been provided by the auditor.

5. Income taxes

Income tax expenses in millions of EUR

2022

2021

Current income taxes

Deferred income taxes

Total income (expense)

Financial Statements 2022 – Roche Finance Europe B.V.

Income tax assets (liabilities) in millions of EUR

31 December

2022

31 December

2021

Current income taxes

- Assets

- Liabilities

Net current income tax assets (liabilities)

Deferred income taxes

- Assets

- Liabilities

Net deferred income tax assets (liabilities)

The Company is a member of the fiscal unity for corporate income tax (see Note 13). The Company’s local statutory tax rate is

25.8% (2021: 25.0%) and this is also the effective tax rate in these Annual Financial Statements. The Company’s effective tax rate

can be reconciled to the Company’s applicable tax rate as follows:

6. Employee benefits

The Company has no employees. Roche Pharmholding B.V., Woerden, performs all administrative activities on behalf of the

Company.

7. Loans receivable – related parties

Loans receivables: movements in carrying value in millions of EUR

2022

2021

At 1 January

1,732

1,727

Proceeds from repayments of loans receivables – related parties

Issuance of long-term loans receivables – related parties

Changes in impairment losses on financial instruments

(1)

Currency translation effects

(4)

At 31 December

1,728

1,732

Reported as

- Long-term loans receivables

997

1,732

- Short-term loans receivables

731

Total loans receivables

1,728

1,732

Reconciliation of the Company’s effective tax rate

2022

2021

Applicable tax rate

25.80%

25.00%

Company’s effective tax rate

25.80%

25.00%

Financial Statements 2022 – Roche Finance Europe B.V.

GBP denominated loans

Loans receivable – related parties in millions of EUR

31 December 2022

31 December 2021

Long-term loans

Roche Diagnostics Limited, United Kingdom, due 29 August 2023,

outstanding principal GBP 71 million (2021: GBP 71 million), interest

rate 5.67%

Total loans receivable due in more than 1 year – related parties

Short-term loans

Roche Diagnostics Limited, United Kingdom, due 29 August 2023,

outstanding principal GBP 71 million (2021: GBP 71 million), interest

rate 5.67%

Total loans receivable due in less than 1 year – related parties

EUR denominated loans

Loans receivable – related parties in millions of EUR

31 December 2022

31 December 2021

Long-term loans

Roche Deutschland Holding GmbH, Germany, due 25 February 2025,

outstanding principal EUR 1.0 billion, interest rate 1.80%

1,000

Roche Deutschland Holding GmbH, Germany, due 27 February 2023,

outstanding principal EUR 650 million, interest rate 1.515%

650

Total loans receivable due in more than 1 year – related parties

1,000

1,650

Short-term loans

Roche Deutschland Holding GmbH, Germany, due 27 February 2023,

outstanding principal EUR 650 million, interest rate 1.515%

650

Total loans receivable due in less than 1 year – related parties

650

Reported as

- Long-term loans receivable – related parties

1,000

1,735

- Short-term loans receivable – related parties

731

Total loans receivable – related parties

1,731

1,735

Expected credit loss – IFRS 9

(3)

Total loans receivable – related parties (Net)

1,728

1,732

Financial Statements 2022 – Roche Finance Europe B.V.

Asset available for the repayment of liabilities

Movements in carrying value of recognised asset in millions of EUR

At 1

January

Cash flows

(Inflow)/ Outflow

Financing

Income

Foreign Exchange

Adjustments

At 31

December

2021

Loan (including interest receivable)

1,752

(33)

1,757

Total assets available for the repayment

of liabilities

1,752

(33)

1,757

2022

Loan (including interest receivable)

1,757

(32)

(4)

1,753

Total asset available for the repayment

of liabilities

1,757

(32)

(4)

1,753

8. Accounts receivable - related parties

The Company deposits surplus funds with Roche Finance Ltd in its function as corporate cash pool leader for numerous Roche

affiliates (see Note 15).

At 31 December the Company also had interest receivables from Roche affiliates in respect of the loans given (see Note 7).

Accounts receivable – related parties in millions of EUR

31 December 2022

31 December 2021

Accounts receivable with cash pool leader

Interest receivables – related parties

Total accounts receivable – related parties

9. Cash and cash equivalents

At 31 December 2022 the Company had no cash in its bank account (2021: none). Any funds deposited by the Company with the

corporate cash pool leader, Roche Finance Ltd, are readily available.

10. Accrued interest

Accrued interest in millions of EUR

31 December 2022

31 December 2021

Interest payable

Total accrued interest

Financial Statements 2022 – Roche Finance Europe B.V.

11. Debt

Debt: movements in carrying value of recognised liabilities in millions of EUR

2022

2021

At 1 January

1,738

1,731

Proceeds from issue of notes

Repayment and redemption of notes

Amortisation of debt discount

Currency translation effects

(4)

At 31 December

1,735

1,738

Consisting of

- Notes

1,735

1,738

Total debt

1,735

1,738

Reported as

- Long-term debt

999

1,738

- Short-term debt

736

Total debt

1,735

1,738

Recognised liabilities and effective interest rates of notes in millions of EUR

Effective

interest rate

31 December 2022

31 December 2021

Long-term debts

0.875% notes due 25 February 2025, principal EUR 1.0

billion (ISIN: XS1195056079)

0.93%

999

998

0.5% notes due 27 February 2023, principal EUR 650

million (ISIN: XS1371715118)

0.63%

649

5.375% notes due 29 August 2023, principal GBP 250

million, outstanding GBP 76 million (ISIN:

XS0175478873)

5.46%

Total debt payable in more than 1 year

999

1,738

Short-term debts

0.5% notes due 27 February 2023, principal

EUR 650 million (ISIN: XS1371715118)

0.63%

649

5.375% notes due 29 August 2023, principal

GBP 250 million, outstanding GBP 76 million

(ISIN: XS0175478873)

5.46%

Total debt payable in less than 1 year

736

Total debt

1,735

1,738

The fair values of the notes issued at 31 December 2022 are stated below. These are calculated based on observable market

prices of the notes (Level 1 fair value hierarchy). There are no pledges on the Company’s assets in connection with the debt. All

issued notes are guaranteed by Roche Holding Ltd, the parent company of the Roche Group.

Financial Statements 2022 – Roche Finance Europe B.V.

Fair value of notes in millions of EUR

31 December 2022

31 December 2021

0.875% notes due 25 February 2025, principal EUR 1.0 billion

(ISIN: XS1195056079)

965

1,031

0.5% notes due 27 February 2023, principal EUR 650 million

(ISIN: XS1371715118)

649

655

5.375% notes due 29 August 2023, principal GBP 250 million,

outstanding GBP 76 million (ISIN: XS0175478873)

Total debt payable

1,701

1,784

Issuance of notes

The Company did not issue any new bonds or notes during 2022 and 2021.

Redemption and repurchase of notes

The Company did not redeem or repurchase any bonds or notes during 2022 and 2021.

Liabilities arising from financing activities

Movements in carrying value of recognised liabilities in millions of EUR

At 1

January

Cash flows

Inflow (Outflow)

Financing

Costs

Foreign Exchange

Adjustments

At 31

December

2021

Debt (including interest payable)

1,743

(17)

1,750

Total liabilities arising from

financing activities

1,743

(17)

1,750

2022

Debt (including interest payable)

1,750

(17)

(4)

1,747

Total liabilities arising from

financing activities

1,750

(17)

(4)

1,747

12. Equity

Share Capital

The authorised share capital of the Company amounts to EUR 10 million, consists of 100,000 shares with a nominal value of EUR

100 each of which 20,000 ordinary, voting shares have been issued and fully paid in. Roche Pharmholding B.V., a company

registered in the Netherlands, is the sole shareholder.

Dividends

There were no dividend payments in 2022 (2021: none).

Retained earnings and unappropriated result

The retained earnings represents the Company’s cumulative net result at the beginning of the period after accounting for

dividend payments. Unappropriated result represents the Company’s net result for the period.

Own equity instruments

As of 31 December 2022, the Company holds none of its own shares (31 December 2021: none).

Financial Statements 2022 – Roche Finance Europe B.V.

13. Contingent liabilities

The Company is a member of the fiscal unity for corporate income tax led by the parent, Roche Pharmholding B.V. Based on the

Tax Collection Act, the Company and the parent are jointly and severally liable for the taxes payable of the fiscal unity.

The income corporate tax as recognized in the financial statement of the Company is based on the statutory result of the

company. The Company settles the corporate income tax through its current account with the parent.

As of 31 December 2022, the Company does not have any material contingent liabilities (2021: none).

14. Related parties

Parent and other related parties

As a member of the Roche Group, all of the Company’s related party transactions are with Roche Group affiliates. The

transactions include interest on and issues/repayments of loans given by the Company. The Company pays guarantee fee to the

ultimate parent company Roche Holding Ltd. In addition the Company has a current account with Roche Finance Ltd, the

corporate cash pool leader, as described in Note 7.

Subsidiaries and associates

The Company has no subsidiaries or associates.

Related party transactions in millions of EUR

2022

2021

Interest income – related parties

Guarantee fees – related parties

(14)

(Increase) decrease of cash pool balance with related parties

(1)

(2)

Related party balances in millions of EUR

31 December

2022

31 December

2021

Long-term loans receivable – related parties

1,000

1,735

Short-term loans receivable – related parties

731

Accounts receivable – related parties

Key management personnel

The purpose of the Company is to act as a financing company for the operations of the Roche Group. The members of the

Company’s Board of Directors act as the chief operating decision-maker.

Board of Directors of Roche Finance Europe

Peter Eisenring

Member of the Board

Appointed 31 January 2003

Sheri L. Morin

Member of the Board

Appointed 15 August 2016

Mark Ekelschot

Member of the Board

Resigned 1 July 2021

Appointed 15 June 2018

Hafsa Shamsie

Member of the Board

Appointed 1 May 2019

Maturin Tchoumi

Member of the Board

Resigned 1 September 2021

Appointed 1 September 2021

Rahul Doshi

Member of the Board

Appointed 1 May 2022

The directors did not receive remuneration or payment from the Company for their time and expenses related to their services

during 2022 and 2021.

Financial Statements 2022 – Roche Finance Europe B.V.

15. Risk management

Roche Group risk management

Risk management is a fundamental element on all levels of the Roche Group and encompasses different types of risks. The

Company is also part of this business practice. At a group level, risk management is an integral part of the business planning and

controlling processes. Material risks are monitored and regularly discussed with the Corporate Executive Committee and the

Audit Committee of the Board of Directors.

Financial risk management

The Company is exposed to financial risks arising from its corporate finance activities of providing financing to other affiliates of

the Roche Group and obtaining refinancing on the bond markets. There are two Roche Group affiliates representing

approximately 100% of the Company’s interest revenues in 2022 (2021: 100%). The Company’s financial risk exposures are related

to changes in interest rates and the creditworthiness and solvency of the Company’s counterparties.

Financial risk management within the Roche Group is governed by policies reviewed by the Board of Directors. These policies

cover credit risk, liquidity risk and market risk and are also applicable to the Company. These policies provide guidance on risk

limits, type of authorised financial instruments and monitoring procedures. As a general principle, the policies prohibit the use of

derivative financial instruments for speculative trading purposes. Policy implementation and day-to-day risk management are

carried out by the relevant treasury functions and regular reporting on these risks is performed by the relevant accounting and

controlling functions within Roche.

Credit risk

The credit rating of Roche Holding Ltd is AA (Standard & Poor's). The credit rating of loans receivables from related parties are

internally rated within the range of BBB to BB, which the Company assessed internally that corresponds to investment grade.

For financial assets at amortised cost, the Company applies the general expected credit loss model. As loans receivables at

amortised cost are assessed to be low risk, the impairment allowance is determined at 12-month expected credit losses (ECL)

with a reference to internal credit ratings of the counterparties. The Company considers the probability of default upon initial

recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each

reporting period. To assess whether there is a significant increase in credit risk, the Company compares the risk of a default

occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition.

Evidence that a financial asset is credit-impaired also includes the following observable data:

 significant financial difficulty of the borrower;

 a breach of contract;

 the restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise;

 it is probable that the borrower will enter bankruptcy or other financial reorganisation; or

 the disappearance of an active market for a security because of financial difficulties.

The ECL is the sum of the value of all possible losses, each multiplied by the probability of that loss occurring and calculated as

follows: ECL = EAD × LGD × PD. Exposure at Default (EAD) is the gross carrying value of loans receivable; Loss Given Default

(LGD) is the portion of loans receivable that the Company shall lose if a borrower defaults; Probability of Default (PD) is the

likelihood of a default of a counterparty over an observed period. There were no loans receivables for which the Company

observed a significant increase in the credit risk which would require the application of the lifetime expected credit losses

impairment model. There were no material movements in the loss allowance in 2022. The Company assesses a significant

increase in credit risk using the delta in the lifetime default probability, internal ratings and arrears. The Company evaluates

qualitative information on the borrower’s other cash flow obligations (including to other debt providers), its liquidity position and

business performance and on the regulatory, economic, and technological environment of the borrower. The Company uses the

Financial Statements 2022 – Roche Finance Europe B.V.

30 days past due criteria as a backstop rather than a primary driver to considering exposures to have significantly increased

credit risk since the initial recognition.

Credit risk arises from the possibility that counterparties to transactions may default on their obligations, causing financial losses

for the Company. The objective of managing counterparty credit risk is to prevent losses of liquid funds deposited with or

invested in such counterparties. The maximum exposure to credit risk resulting from financial activities, without considering

netting agreements and without taking account of any collateral held or other credit enhancements, is equal to the carrying value

of the Company’s financial assets.

The Company considers a financial asset to be in default when the counterparty is unlikely to pay its obligations to the Company

in full. In assessing whether a counterparty is in default, the Company considers both qualitative and quantitative indicators (e.g.

overdue status) that are based on data developed internally and for certain financial assets also obtained from external sources.

The following indicators are incorporated: internal credit rating, significant increases in credit risk on other financial instruments

of the same borrower, actual or expected significant adverse changes in business, financial and economic conditions that are

expected to cause a significant change to the borrower’s ability to meet its obligations.

The Company is exposed to potential default of payment of any of its loan receivable from other affiliates of the Roche Group.

Even though no binding agreement between Roche Group and the related counterparties to the loan receivables has been

entered into, it is Roche Group intent at all times to provide its affiliates with sufficient liquidity to honour their payment

obligations to Roche Finance Europe. The credit rating of Roche Holding Ltd, the parent company of Roche Group and the

ultimate parent of the counterparties to the loan receivable is AA (Standard & Poor's), based on the most recent available ratings,

which corresponds to an investment grade credit rating. On the basis of the information available, the management determined

that any risk that the intercompany counterparties to the transactions may default on their obligations is clearly remote. Therefore

the management considers that the credit risk of the loan receivable from other affiliates of the Roche Group is low.

Carrying value and fair value of financial assets in millions of EUR

31 December 2022

31 December 2021

By line items in notes

Asset class

Carrying

amount

Fair value

Carrying

amount

Fair value

Long-term loan receivable – related parties

Amortised cost

1,000

946

1,735

1,769

Short-term loan receivable – related parties

Amortised cost

731

728

Accounts receivable – related parties

Amortised cost

Total

1,767

1,710

1,769

1,804

The fair value for loan receivable – related parties disclosed in the above table was calculated based on the present value of the

future cash flows of the loans, discounted at an adjusted market rate for instruments with similar credit status, maturity periods

and currency. The decrease in the fair value of the loan receivable in 2022 compared to 2021 is due to increase in the market

rates. The counterparties to the Company’s financial assets are members of the Roche Group and therefore the credit risk

ultimately depends on the financial position of the Roche Group. The fair value of the long-term loan receivables is classified as

Level 2 in the fair value hierarchy.

At 31 December 2022 the Company has no financial assets which are past due but not impaired (2021: none) and no financial

assets whose terms have been renegotiated (2021: none). The maximum exposure to credit risk at the reporting date is the

carrying value of each class of financial assets disclosed in Note 7. The gross carrying amount of a financial asset is written off

and derecognised only when the Company has no reasonable expectation of recovering the financial asset, after all reasonable

efforts and enforcement procedures for recovery have been exhausted. The Company individually makes an assessment with

respect to the timing and amount of write-off based on the individual facts and circumstances. The Company expects no

significant recovery from the amount written off and derecognised.

Financial Statements 2022 – Roche Finance Europe B.V.

Expected credit loss allowance in millions of EUR

2022

2021

At 1 January

Changes in impairment losses on financial instruments

At 31 December

Liquidity risk

Liquidity risk arises through a surplus of financial obligations over available financial assets due at any point in time. The

Company’s obligations to third parties on the bond markets are guaranteed by Roche Holding Ltd, the parent company of the

Roche Group and covered by loan receivables from other members of the Roche Group that have the same contractual maturities.

The remaining undiscounted cash flow contractual maturities of financial liabilities, including estimated interest payments,

are shown in the table below.

Contractual maturities of financial liabilities in millions of EUR

Within one year

Between two and five years

More than 5 years

31 December 2021

Debt

1,741

Future interest cash flow

31 December 2022

Debt

737

1,000

Future interest cash flow

There are no other contractual cash flows from financial liabilities.

Market risk

Market risk arises from changing market prices, mainly foreign exchange rates and interest rates, of the Company’s financial

assets or financial liabilities which affect the Company’s financial result and equity.

At 31 December 2022 and 31 December 2021, the Company’s exposure to cash flow interest rate risk was insignificant, as the

outstanding principal amount on the Company’s debt (see Note 11) and the loans receivable from related parties (see Note 7) are

both at fixed interest rates. The Company’s variable interest-bearing financial assets are the receivable balance with the corporate

cash pool leader (see Note 8) referenced to Euro Short-Term Rate (ESTR) for EUR and Sterling Overnight Index Average (SONIA)

for GBP. The rate of interest in credit balance on the cash pool account will be the reference rate for the relevant currency less a

margin of 0.075%. The rate of interest in debit balance on the cash pool account will be the reference rate for the relevant

currency plus a margin of 0.075%. If the reference rate falls below 0.075%, credit balances will receive no interest and debit

balances will be charged 0.150% for the respective period.

The Company accounts the loans at amortized cost. Therefore, movements in the market-rate only impact the fair value

disclosure of the loans.

The foreign exchange risk was also insignificant as the terms of financial assets and liabilities as well as the currency are

matching.

Financial Statements 2022 – Roche Finance Europe B.V.

Capital

The capital management of the Company is managed within the Roche Group. The Company’s objectives when managing capital

are:

 To safeguard the Company’s ability to continue as a going concern, so that it can continue to provide financing activities

on behalf of the Roche Group.

 To maintain sufficient financial resources to mitigate against risks and unforeseen events.

Capital is monitored on the basis of the capitalisation, which is calculated as being debt plus equity. Information on the

Company’s debt and equity is reported to senior management as part of the Roche Group’s regular internal management

reporting. The Company’s capitalisation is shown in the table below.

Capital in millions of EUR

31 December2022

31 December

2021

Debt

1,735

1,738

Equity

Capitalisation

1,752

1,755

The Company is not subject to regulatory capital adequacy requirements as known in the financial services industry. The

Company’s liability contracts do not contain covenants.

16. Result appropriation

The directors recommend that the entire profit for the financial year of EUR 456 thousand is to be taken to Retained Earnings.

The proposal has not been included in the Company’s 2022 Annual Financial Statements.

17. Subsequent events

There are no subsequent events to be reported.

Woerden, 31 January 2023

The Board of Directors

Peter Eisenring Maturin Tchoumi

Mark Ekelschot Rahul Doshi

Financial Statements 2022 – Roche Finance Europe B.V.

Other information

Independent auditor’s report

The independent auditor’s report is added to the next pages.

Appropriation of results

In accordance with Article 21 of the Articles of Association the result for the year is at the disposal of the shareholder.

Article 21 excerpt:

 The allocation of profits earned in a financial year shall be determined by the General Meeting.

 Distribution can only take place up to the amount of the distributable part of the net assets.

 Distribution of profits shall take place after the completion of the Annual Accounts from which it is approved.

 The General Meeting may, subject to due observance of the provision of the law, resolve to pay an interim dividend.

 The General Meeting may, subject to due observance of the paragraph 2, resolve to make payments to the charge of any

reserve which need not to be maintained by virtue of the law.

 A claim of a shareholder of payment of a dividend shall be barred after five years have elapsed.

Independent auditor’s report

To: the shareholders of Roche Finance Europe B.V. and Audit Committee of the ultimate

parent company Roche Holding Ltd

A. Report on the audit of the financial statements 2022 included in the annual

report

Our opinion

We have audited the financial statements 2022 of Roche Finance Europe B.V. based in

Woerden.

WE HAVE AUDITED

OUR OPINION

The financial statements comprise:

1. the statement of financial position as at

31 December 2022;

2. the following statements for 2022: the

income statement, the statements of

comprehensive income, changes in equity

and cash flows; and

3. the notes comprising material accounting

policy information.

In our opinion, the accompanying financial

statements give a true and fair view of the

financial position of Roche Finance Europe

B.V. as at 31 December 2022 and of its

result and its cash flows for 2022 in

accordance with International Financial

Reporting Standards as adopted by the

European Union (EU-IFRS) and with Part 9

of Book 2 of the Dutch Civil Code.

Basis for our opinion

We conducted our audit in accordance with Dutch law, including the Dutch Standards on

Auditing. Our responsibilities under those standards are further described in the ‘Our

responsibilities for the audit of the financial statements’ section of our report.

We are independent of Roche Finance Europe B.V. in accordance with the EU Regulation on

specific requirements regarding statutory audit of public-interest entities, the Wet toezicht

accountantsorganisaties (Wta, Audit firms supervision act), the Verordening inzake de

onafhankelijkheid van accountants bij assurance-opdrachten (ViO, Code of Ethics for

Professional Accountants, a regulation with respect to independence) and other relevant

independence regulations in the Netherlands. Furthermore we have complied with the

Verordening gedrags- en beroepsregels accountants (VGBA, Dutch Code of Ethics).

We believe the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our opinion.

2 |

B. Information in support of our opinion

We designed our audit procedures in the context of our audit of the financial statements as a

whole and in forming our opinion thereon. The following information in support of our opinion

was addressed in this context, and we do not provide a separate opinion or conclusion on

these matters.

Materiality

Based on our professional judgement we determined the materiality for the financial

statements as a whole at € 17,600,000. The materiality is based on a benchmark of total

assets (representing 1% of total assets) which we consider to be one of the principal

considerations for users of the financial statement in assessing the financial performance of

the company. We have also taken into account misstatements and/or possible misstatements

that in our opinion are material for the users of the financial statements for qualitative

reasons.

We agreed with the Board of Directors of Roche Finance Europe B.V. that misstatements in

excess of € 880,000, which are identified during the audit, would be reported to them, as

well as smaller misstatements that in our view must be reported on qualitative grounds.

Audit approach going concern

As explained in the section ‘Going concern’ on page 9 of the financial statements and in the

section ‘Uncertainties’ in the management report, the Board of Directors has carried out a

going concern assessment and has not identified any events or circumstances that may cause

reasonable doubt on the entity's ability to continue as a going concern (hereinafter: ‘going

concern risks’).

Our audit procedures to evaluate the board’s going concern assessment included:

 considered whether the board's going concern assessment contains all relevant information

that we have knowledge of and inquired the board on key assumptions and estimates. In

doing so, we have paid attention, among the other things to the recoverability of the loans

and specifically the 2023 redemptions.

 obtained information from the board about its knowledge of going concern risks beyond

the period of the going concern assessment carried out by the board.

Our audit procedures indicated that the going concern assumption used by the board is

appropriate and no going concern risks have been identified.

Audit approach fraud risks

We refer to section “Operational activities” on page 3 of the management report for

management’s fraud risk assessment.

We identified and assessed the risks of material misstatements of the financial statements

due to fraud also. During our audit we obtained an understanding of the entity and its

environment and the components of the system of internal control, including the risk

assessment process and management’s process for responding to the risks of fraud and

monitoring the system of internal control.

We evaluated the design and relevant aspects of the system of internal control and in

particular management’s fraud risk assessment, as well as among others the Roche Group

3 |

code of conduct, whistle blower procedures and incident registration. We evaluated the

design and the implementation and, where considered appropriate, tested the operating

effectiveness, of internal controls designed to mitigate fraud risks.

As part of our process of identifying fraud risks, we evaluated fraud risk factors with respect

to financial reporting fraud, misappropriation of assets and bribery and corruption. We

evaluated whether these factors indicate that a risk of material misstatement due fraud is

present.

We identified the following fraud risks and performed the following specific procedures:

As in all of our audits and based on our professional standards, we identified and

addressed the risk of management override of internal control. We performed procedures

to evaluate key accounting estimates in particular relating to important judgment areas

and significant accounting estimates related to the valuation of the loans, issued to Roche

Group Companies as disclosed in note 7 of the financial statements and the interest

receivables from Roche Group Companies as disclosed in note 8 of the financial

statements. We have also used data analysis to identify and address high-risk journal

entries.

 We have rebutted the presumed fraud risk on revenue recognition, due to the simplicity of

the process and the high predictability, as well as the absence of incentives by the Board

of Directors.

We incorporated elements of unpredictability in our audit. We also considered the outcome

of our other audit procedures and evaluated whether any findings were indicative of fraud or

non-compliance.

We considered available information and made enquiries of directors.

Our audit procedures did not lead to indications or suspicions for fraud potentially resulting in

material misstatements.

Our key audit matters

Key audit matters are those matters that, in our professional judgement, were of most

significance in our audit of the financial statements. We have communicated the key audit

matters to the Board of Directors of Roche Finance Europe B.V. The key audit matters are not

a comprehensive reflection of all matters discussed.

These matters were addressed in the context of our audit of the financial statements as a

whole and in forming our opinion thereon, and we do not provide a separate opinion on these

matters.

VALUATION OF LOANS ISSUED

OUR AUDIT APPROACH

We consider the valuation of the loans,

issued to Roche Group Companies as

disclosed in note 7 of the financial

statements and the interest receivables

from Roche Group Companies as disclosed in

note 8 of the financial statements,

combined representing 99.4% of the balance

sheet total, a key audit matter. We

We have performed detailed audit

procedures addressing the valuation of the

loans issued to and interest receivables from

Roche Deutschland Holding GmbH and Roche

Diagnostics Ltd.

We have performed the following audit

procedures:

4 |

identified this as a key audit matter due to

the size of the loans issued and due to the

material impact a possible impairment may

have on the income statement.

Initially, loans issued to and the interest

receivables from Roche Group Companies

are recognized at its fair value and

subsequently carried at amortized cost

using the effective interest method. The

Board of Directors recognized the expected

credit loss provision with regard to the

loans issued to Roche Deutschland Holding

GmbH and Roche Diagnostics Limited in

accordance with IFRS 9.



Inspected the financial statements as per

31 December 2021 of counterparties

Roche Deutschland Holding GmbH and

Roche Diagnostics Limited.

 Inspected the loan agreements entered

into between the company and Roche

Deutschland Holding GmbH and Roche

Diagnostics Limited and the agreement

with guarantor Roche Holding Ltd.

 Inspected the 2022 interim financial

statements of the guarantor Roche

Holding Ltd and financial statements as

per 31 December 2021 of Roche Holding

Ltd.

 Evaluated the information derived from

credit rating agencies: Standard & Poor's,

Moody's and Fitch Ratings.

 Evaluated the probability of default rate

and the loss given default rate derived

from Moody's.

 Reviewed the market values of the

outstanding notes.

 Reviewed news reports.

 Searched and evaluated the information

for investors on the website of Roche

Holding Ltd.

 Discussed the recent developments in the

financial position and the cash flows with

the Board of Directors.

 Discussed the repayment of the EUR loan

in February 2023.

 Inspected the documentation between

Roche Deutschland Holding GmbH and

Roche Finanz Ag in which is agreed that

Roche Finanz AG will provide Roche

Deutschland Holding GmbH with a loan at

the amount of the maturing loan of

Roche Finance Europe enabling Roche

Deutschland Holding GmbH to repay the

loan to Roche Finance Europe B.V.

 Inspected the financial statements as per

31 December 2021 of Roche Finanz AG.

 Assessed the adequacy of the disclosures

in the financial statements relating to

both the loans issued to and interest

receivables from Roche Group

Companies, including the accurate

presentation of the short-term loan

which will be repaid in February 2023.

5 |

C. Report on other information included in the annual report

In addition to the financial statements and our auditor’s report thereon, the annual report

contains other information that consists of:

 the management report;

 other information as required by Part 9 of Book 2 of the Dutch Civil Code;

Based on the following procedures performed, we conclude that the other information:

 is consistent with the financial statements and does not contain material misstatements;

 contains the information as required by Part 9 of Book 2 of the Dutch Civil Code for the

management report and the other information.

We have read the other information. Based on our knowledge and understanding obtained

through our audit of the financial statements or otherwise, we have considered whether the

other information contains material misstatements.

By performing these procedures, we comply with the requirements of Part 9 of Book 2, and

the Dutch Standard 720. The scope of the procedures performed is substantially less than the

scope of those performed in our audit of the financial statements.

The Board of Directors is responsible for the preparation of the other information, including

the management report in accordance with Part 9 of Book 2 of the Dutch Civil Code and other

information as required by Part 9 of Book 2 of the Dutch Civil Code.

D. Report on other legal and regulatory requirements and European Single

Electronic Format

Engagement

We were engaged by the Board of Directors as auditor of Roche Finance Europe B.V. as of the

audit for financial year 2017 and have operated as statutory auditor ever since that financial

year.

No prohibited non-audit services

We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU

Regulation on specific requirements regarding statutory audit of public-interest entities.

European Single Electronic Format (ESEF)

Roche Finance Europe B.V. has prepared its annual report in ESEF. The requirements for this

are set out in the Delegated Regulation (EU) 2019/815 with regard to regulatory technical

standards on the specification of a single electronic reporting format (hereinafter: the RTS on

ESEF).

In our opinion, the annual report prepared in XHTML-format, including the financial

statements of Roche Finance Europe B.V. has been prepared in all material respects with

the RTS on ESEF.

6 |

Management is responsible for preparing the annual report including the financial

statements, in accordance with the RTS on ESEF.

Our responsibility is to obtain reasonable assurance for our opinion whether the annual

report complies with the RTS on ESEF.

We performed our examination in accordance with Dutch law, including Dutch Standard

3950N 'Assurance-opdrachten inzake het voldoen aan de criteria voor het opstellen van een

digitaal verantwoordingsdocument' (assurance engagements relating to compliance with

criteria for digital reporting).

Our examination included amongst others:

 obtaining an understanding of the entity's financial reporting process, including the

preparation of the annual financial report in XHTML-format;

 identifying and assessing the risks that the annual report does not comply in all material

respects with the RTS on ESEF and designing and performing further assurance procedures

responsive to those risks to provide a basis for our opinion, including examining whether

the annual financial report in XHTML-format is in accordance with the RTS on ESEF.

E. Description of responsibilities regarding the financial statements

Responsibilities of the Board of Directors and the Audit Committee for the financial

statements

The Board of Directors is responsible for the preparation and fair presentation of the financial

statements in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code.

Furthermore, the Board of Directors is responsible for such internal control as the Board of

Directors determines is necessary to enable the preparation of the financial statements that

are free from material misstatement, whether due to fraud or error.

As part of the preparation of the financial statements, the Board of Directors is responsible

for assessing the company’s ability to continue as a going concern. Based on the financial

reporting frameworks mentioned, the Board of Directors should prepare the financial

statements using the going concern basis of accounting, unless the Board of Directors either

intends to liquidate the company or to cease operations, or has no realistic alternative but to

do so.

The Board of Directors should disclose events and circumstances that may cast significant

doubt on the company’s ability to continue as a going concern in the financial statements.

The Audit Committee is responsible for overseeing the company’s financial reporting process.

Our responsibilities for the audit of the financial statements

Our objective is to plan and perform the audit engagement in a manner that allows us to

obtain sufficient and appropriate audit evidence for our opinion.

Our audit has been performed with a high, but not absolute, level of assurance, which means

we may not detect all material errors and fraud during our audit.

7 |

Misstatements can arise from fraud or error and are considered material if, individually or in

the aggregate, they could reasonably be expected to influence the economic decisions of

users taken on the basis of these financial statements. The materiality affects the nature,

timing and extent of our audit procedures and the evaluation of the effect of identified

misstatements on our opinion.

We have exercised professional judgement and have maintained professional scepticism

throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements

and independence requirements. Our audit included among others:

 identifying and assessing the risks of material misstatement of the financial statements,

whether due to fraud or error, designing and performing audit procedures responsive to

those risks, and obtaining audit evidence that is sufficient and appropriate to provide a

basis for our opinion. The risk of not detecting a material misstatement resulting from

fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,

intentional omissions, misrepresentations, or the override of internal control;

 obtaining an understanding of internal control relevant to the audit 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;

 evaluating the appropriateness of accounting policies used and the reasonableness of

accounting estimates and related disclosures made by the Board of Directors;

 concluding on the appropriateness of the Board of Directors’s use of the going concern

basis of accounting, and based on the audit evidence obtained, whether a material

uncertainty exists related to events or conditions that may cast significant doubt on the

entity’s ability to continue as a going concern. If we conclude that a material uncertainty

exists, we are required to draw attention in our auditor’s report to the related disclosures

in the financial statements or, if such disclosures are inadequate, to modify our opinion.

Our conclusions are based on the audit evidence obtained up to the date of our auditor’s

report. However, future events or conditions may cause a company to cease to continue as

a going concern;

 evaluating the overall presentation, structure and content of the financial statements,

including the disclosures; and

 evaluating whether the financial statements represent the underlying transactions and

events in a manner that achieves fair presentation.

We communicate with the Board of Directors of Roche Finance Europe B.V., among other

matters, the planned scope and timing of the audit and significant audit findings, including

any significant findings in internal control that we identify during our audit. In this respect we

also submit a report to the Audit Committee in accordance with Article 11 of the EU

Regulation on specific requirements regarding statutory audit of public-interest entities. The

information included in this additional report is consistent with our audit opinion in this

auditor’s report.

We provide the Board of Directors and the Audit Committee with a statement that we have

complied with relevant ethical requirements regarding independence, and to communicate

with them all relationships and other matters that may reasonably be thought to bear on our

independence, and where applicable, related safeguards.

From the matters communicated with the Board of Directors of Roche Finance Europe B.V.,

we determine the key audit matters: those matters that were of most significance in the

8 |

audit of the financial statements. We describe these matters in our auditor’s report unless

law or regulation precludes public disclosure about the matter or when, in extremely rare

circumstances, not communicating the matter is in the public interest.

Amstelveen, 31 January 2023

For and on behalf of BDO Audit & Assurance B.V.,

W.J.P. Hoeve RA