SUSTAINABILITY

EU Taxonomy Report 2023

This is AddLife's EU Taxonomy Report, based on the EU regulation establishing a framework to facilitate sustainable investment (the "EU Taxonomy"). The purpose of the EU taxonomy is to establish common definitions and reporting on which economic activities are in line with the EU's 2030 sustainability goals. The EU taxonomy describes which sectors should report, which economic activities 'should be covered by the taxonomy' (are within its scope) and which activities fulfil the technical screening criteria to be 'taxonomy compliant ' in line with EU objectives.

Identification and assessment of activities covered by the taxonomy
AddLife has reviewed its financial activities in accordance with the EU Taxonomy Regulation (EU 2020/852) and related provisions, known as the Taxonomy. The distribution and manufacturing of products within Life Science, which is AddLife's main activity, does not fall within the scope of the current version of the taxonomy. To assess relevant economic activities, a threshold is used based on external revenue, i.e. net sales in the group's income statement. Internal consumption that does not generate external revenue is not considered to be part of the economic activities in the taxonomy. Economic activities related to climate change adaptation have not been considered relevant as they do not generate external revenue, operating costs or investments. Two relevant financial  activities related to capital expenditure were identified during the review. No relevant economic activities were identified for sales or operating expenditure. AddLife lacks sufficient data to determine the requirements for substantial contribution or the principles of not causing significant harm (DNSH) are met for the relevant economic activities. Consequently, a conservative assessment has been made to report these activities as non-aligned.

Accounting principles - denominator
The proportion of the business operations that are environmentally sustainable according to the EU Taxonomy Regulation should be reported using three financial metrics. To calculate the three ratios, turnover, capital expenditure (CapEx) and operational expenditure (OpEx) must be identified according to the taxonomy.

Turnover
The Group's total turnover equals net sales (note 5) in the consolidated income statement under IFRS.

Capital expenditure
Reporting of total capital expenditure refers to additions to tangible assets during the year before depreciation, revaluation and impairment and excluding changes in fair value. Also included are property, plant and equipment arising from business combinations. See Notes 15 and 16.

Operational expenditure
In the framework of the EU taxonomy and according to the Regulation, operational expenditure is defined as direct non-capitalised costs that relate to research and development (R&D), building renovations, short-term leases, maintenance and repairs, as well as direct expenditure related to the day-to-day maintenance of the assets, i.e. not the total operating costs, but only costs related to the maintenance of the assets. This report only includes R&D, repairs and maintenance, as the other areas are considered to be of negligible importance.

Transport by motorbikes, passenger cars and light commercial vehicles
Several companies in the Group use leased cars in their operations, where the investment costs related to these vehicles become relevant from a taxonomy standpoint. No assessment has been made to determine whether these are aligned environmentally sustainable activities.

Acquisition and ownership of buildings
AddLife leases premises that are recognised as right-of-use assets in Note 15, which is covered by the taxonomy. No assessment has been made to determine whether these are aligned environmentally sustainable activities.

Tables EU taxonomy