z Interest rate risk: the leverage ratio cannot be calculated because the company does not have any long-term loans, which does not imply an interest rate risk. z Liquidity risk: it is defined by the ability of our company to meet its financial obligations when they become due. REWE (România) S.R.L. has contracted together with REWE Projektentwicklung Romania S.R.L. a credit facility for working capital financing purposes in the maximum amount of 15 million Euros that can be used until March 31, 2024. Also, the company has concluded a multi-currency/multiproduct credit facility with Romanian Commercial Bank, the maximum amount of 84 million Rons divided as follows: 50 million Rons can be used as current refinancing – overdraft and up to 34 million Rons as bank letters of guaranteed issue, together with REWE Projektentwicklung Romania S.R.L.. z Inflation rate: we recorded an increase in revenues from the sale of goods throughout the network during 2023 by 25.41% higher than in 2022, managing to mitigate the effect of the increase in the inflation rate of 12.9%. z Currency risk: occurs when future transactions, assets and recognized liabilities are denominated in a currency that is not the functional currency of PENNY Romania. We are involved in merchandise and equipment purchase transactions with foreign partners outside Romania, but we managed to honor our debts on the contractual payment terms. In 2023, we also made investments that support sustainability and help us contribute to reducing negative impacts on the environment and society, while contributing to the achievement of the EU's overall climate and energy targets for 2030 and the European Green Deal. Pursuant to Regulation (EU) 2020/852 of the European Parliament and of the Council and related delegated acts (hereinafter referred to as the EU Taxonomy), PENNY Romania is obliged to disclose information to the public to what extent its activities are associated with environmentally sustainable economic activities. The main field of activity in which the company operates is: 4711: Retail trade in non-specialized stores with predominant sales of food, beverages and tobacco products. This activity is not currently included in the list of eligible activities in the EU taxonomy for the reporting year 2023. Therefore, the main activity of PENNY Romania does not fall within the scope of the current reporting in the EU Taxonomy. However, being involved in secondary economic activities that support retail activities, such as the transport of goods, the ownership and rental of buildings, the renovation of buildings, investments in energy efficiency equipment and infrastructure for the mobility of employees, we consider these economic activities to be eligible for the EU Taxonomy in accordance with the EU Taxonomy legislation. We are considering the reporting of green investments according to the EU Taxonomy and we are in the process of aligning the methodology in a unitary and structured way at Group level. At the same time, we are tracking the operational costs aligned with these investments that we will have to report in the future. We are taking steps in mapping the relevant activities that are subject to Taxonomy to be able to clearly highlight the revenues attracted from green investments and we will be able to make the ratio by total revenues, nature and value in green investments (CAPEX), as well as the total value of the operational costs for these green investments (OPEX). We examined all eligible EU Taxonomy activities together with the REWE Group to identify how they align with the EU Taxonomy technical selection criteria and whether they contribute substantially to climate change mitigation and adaptation. At the same time, we assessed compliance with the "do no significant harm" (DNSH) criteria, compliance with the minimum social protection conditions. On the principles of equal opportunities and diversity, the prevention of corruption and the Code of Business Conduct lay the foundations for PENNY Romania’s compliance with the minimum social safeguards defined in the EU Taxonomy. PENNY Romania will not submit detailed information regarding the activities identified as aligned with the EU Taxonomy, before they are published by the REWE Group. However, as sustainability is part of our business strategy and operational activities, we continued in 2023 the capital investments for green projects that bring added value to our business and community, which we would like to mention briefly. The most important sustainability investments in the period 2020-2023 targeted the following projects: z Thermal insulation of buildings, with priority given to logistics centers z Replacing old equipment with more energy-efficient equipment z Further development of remote energy monitoring system in stores and logistics centers z Developing energy management practices, such as increasing the number of annual audits and additional training for employees z Improvement of lighting systems z Expansion of the photovoltaic panel systems z Completion of the replacement of methane gas or other fossil fuel heating systems with high-efficiency electrical or heat recovery systems from cooling z Completion of the installation of doors to all cooling cabinets SUSTAINABILITY REPORT PENNY ROMANIA 2023 68/256 MESSAGE FROM THE GENERAL DIRECTORS SUSTAINABILITY STRATEGY AND GOVERNANCE ABOUT US AND OUR VALUE CHAIN ABOUT THE REPORT THE FUTURE IS MADE TODAY SUSTAINABILITY MILESTONES CONTENTS
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