Intercos — Audit Report / Information 2018

Apr 3, 2019

Annual Financial Statements

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2018

CRB SA Address : Route du Verney 1, CH-1070 Puidoux , Switzerland Company reg. (IDE) : CHE-101.362.179 VAT Nr CHE-101.362.179 VAT

CRB SA

(company with a sole shareholder) Registered Office in Route du Verney 1, 1070 Puidoux Share Capital CHF 100/000.00 Subject to direction and coordination by INTERCOS S.p.A. Company Register and Tax Code IDE\UID CHE-101.362.179

Separate Financial Statements for the year ended December 31, 2018 REPORT ON OPERATIONS

To the shareholders,

CRB SA, a leading company in the manufacture of Skincare cosmetics for the most important brands worldwide, closed the year 2018 with a profit of CHF 5'977 thousand.

The key highlights for the year 2018 as the following:

(in CHF thousands)	2018	2017	Change
Revenues	62'145	49,538	12'607
Adjusted EBITDA (1)	9'432	10.260	(828)
Operating profit	6'879	8'200	(1'321)
Pre-tax profit	6.890	8,331	(1'441)
Profit for the year	5,978	7'087	(1'110)
(in CHF thousands)	12/31/2018	12/31/2017	Change
Net invested capital (2)	13'779	14'429	(649)
Equity	11'300	12'322	(1'022)
Net financial position	(6'469)	(1,510)	(4.959)
(in CHF thousands)	2018	2017	Change
Capital expenditures	842	850	(8)
Employees (number at year-end)	142	118	24

(1) Adjusted EBITDA is calculated as Profit/Loss for the year before depreciation and writedowns, impairment reversals (losses), accruals and non-recurring expenses, finance income and expenses, dividends and income taxes.

(2) Net invested capital is calculated as (4) total non-current assets (4) inventories (4) other current assets (-) provisions (-) deferred tax liabilities (-) trade payables (-) other payables

Market scenario

Amidst a relatively stable economic, political and social, the beauty industry continues to generally perform well, experiencing yet again in 2018 a growth. The Skincare market in particular has shown a growth of 7.2% versus the previous year, driven mainly by face care (+6,7%).

This positive business sentiment reinforces the high propensity for trading up in the industry at a time when surging global middle and upper middle classes are willing to invest in new-found luxury, emerging disruptive and digital players are luring in younger consumer cohorts and ageing populations are identifying beauty with new means to healthy ageing and a more youthful appearance.

The standout story for 2018 has been the continued successful performance of the premium sector over mass growth as consumers express an increased willingness to invest in luxury products. All regions showed an increase on the previous year.

The trend towards healthier lifestyles is prompting a revived interest in skin-care, with sales seeing a 6% increase. The move towards healthier living is reflected in a significantly greater interest in skin-care which has positively impacted sales of sun protection, cleansers, facial moisturizers as well as anti-agers. Younger consumers, although not concerned with anti-ageing properties, are buying based on prevention, health and wellness. These younger consumers are no longer impressed by slick promotional campaigns relying on aesthetics alone, but are now looking for products that also provide proven health benefits.

The skin care industry has witnessed a shift from demand from older consumers to a growing younger consumer base. People are beginning to use skin care at an increasingly young age in a bid to delay the signs of aging.

Growing awareness about health, wellness, and personal grooming is compelling brands to innovate in some key areas; clean and pure formulations, skin protection (including ingestible products aimed at wellness) and mental health.

Skin care is also increasingly driven by the same digital and social media influences as colour cosmetics as well as disruption from innovative start-up brands.

Fast-growing niche brands climbed the rankings leading to various acquisitions by large multinationals. Consumers' desire for high-efficacy skin care has helped niche brands flourish in a crowed space as they are viewed as specialists in their field.

The Asia Pacific market accounted for the largest share of the market in 2018. It is expected to witness a significant gain in revenue share on account of its large population and the popularity of the e - commerce

2

distribution channel across various industries in this region. Additionally, Japan, China, are expected to be the key contributors to the growth of the organic products segment in the region over the forecast period.

Asia Pacific remains thus the most important region in both value terms and as the key origin for skin care trends. The introduction of novel products such as essence and emulsion, the revival of skin care categories such as face masks, and the expansion of Asian brands to the West are shifting the balance between East and West. This what is called "Asianification"

By 2050, the population over 60 years of age is expected to reach 2.09 billion. The life expectancy for women is predicted to rise from 82.8 years in 2005 to 86.3 years in 2050. Whereas for men, the expected increase for men in the corresponding period is from 78.4 to 83.6 years. Notably, the share of elderly people for cosmetic products is on rise.

The market is expected to gain prominence in the Asian Counties (Indie Beauty) and MEA countries, such as UAE, Saudi Arabia, and Israel.

In fact, India and Indonesia look set to become the real drivers for growth in the beauty market in the coming years. India is expected to outperform Germany, France and the UK to become the fifth largest beauty market by 2022 while Indonesia looks set to be third for revenue generation after the US and China. While most of the growth will come from mass market, increasing middle-class demand will see a move upwards to premium brands that place emphasis on quality.

2. Significant Events in 2018 for CRB

A brief description of the significant events that took place in 2018 is as follows:

· Previous Year last quarter showed a delay in Order Booking activities and Operations execution. For this reason, the first months of the year 2018 were low in terms of Turnover, not growing as fast as expected. In addition, CRB faced continually growing Backlog, delay in orders delivery to customers. Main reason for such delay, was driven by planning activities as well production scheduling organizational issues.

A new and enhanced organization was then put in place in order to face the issue and recover the delay. In the second half of the year, CRB has started accelerating production (both Buk and Finished Products) in order to satisfy customers' request. In order to ensure such production acceleration CRB has:

• Obtained the permission for the third production shift for the Bulk
• Outsourced assembly activities for some specific customers

At the end of December 2018, the backlog was significantly reduced.

The second half of the year is impacted by a serious increase of costs for additional personnel, as well for the management of the complex and very high production rates that characterized this period (ie external warehouse). An important acceleration has impacted as well purchases, with a consequent increase of the Inventory and a change on the Cash Flow.

• · In 2018 CRB has started the cooperation with the newly acquired company Cosmint, with the aim to serve customers with lower target price. In particular, CRB has developed some projects for the customer Douglas/Nocibe with Filling&Assemby activites done by Cosmint group.
• · Following the departure of Mrs Rochat in Q4 2017, CRB has experienced some more organizational changes during 2018, in order to better adjust the Operations organization and to adapt the organization itself to the needs expected, based on 2018 planned growth.

In particular, the short term mandate of Mr Pezzoli (temporarily assigned by the Corporate) ended early Q1 and the Supply Chain organization was reinforced and Mr Bertelli was named COO, in order to define and drive the new organization. Especially the Supply Chain area was reinforced (Planning, Purchasing, Customer Service).

· Finally, the at the end of 2018, the construction of the Canteen for Production employees has started and is ongoing.

3. 2018 Profit and Financial Performance

2018 Gross Revenue from sales and services was total CHF 59'565 thousand, on Budget and strongly growing vs Prior Year (+22%).

As the year ended with some delays in shipping orders to the customers, the potential Turnover would have been even better than Budget and growing more vs Prior Year.

New Projects are basically flat vs Prior Year, representing 18% of Total yearly turnover.

CRB performance was driven by reorders.

Revenues by geographical area based on the territory of residence of the customers on the sales invoice are presented below.

(in CHF thousands)

	2018	2017	Change
EMEA	40'544'665	34'539'309	6,005,356
USA	5'344'607	4'189'410	1'155'197
ASIA	13'676'242	9'956'447	3'719'796
TOTAL	59'565'514	48'685'165	10'880'349

All regions have contributed to such growth vs Prior Year.

In particular:

• · Asia overall shows a growth of 37% vs PY, characterized by a stable growth of Hong Kong region (driven by Well Honest, Colourmix and SaSa), as well Bonjour and Greenleaf.
• · EMEA grew by 17% towards Prior Year (in a quite flat market) thanks Charlotte Tillbury (UK), CVL Valmont (CH), Cosswiss (Project Watson), LaPrairie (CH), José Eisenberg (FR), Foam&Substance (UK), overcompensating for Douglas (delays), Boots and Skincode.
• · U.S.A., driven by Chantecaille has registered a 28% growth.

As a result of the main market trend "Asianification", we can affirm that also CRB growth is linked to customers growing in the Asian region, both local companies and international companies developing their business in Asia.

In terms of market segment, Prestige customers still represent 55% of total CRB sales, growing compared to Prior Year (50%), thanks to Charlotte Tilbury, CVL Valmont and Chantecaille mostly. Private Label still represents 32%, very important market segment, flat vs PY due to Douglas.

Royalties invoiced are growing in line with the growth of BU Skincare abroad, growing by 16,5%.

Costs for Materials grew more than Turnover vs PY in percentage on Net Sales, driven by increased prices on the market, as well project mix.

Costs for services and leases and rents in 2018 amount to CHF 774.6 thousand compared to CHF 672.3 thousand in 2017, slightly increasing vs Prior Year due to higher utilities costs (consumption driven by higher production volumes) and cleaning costs.

Employee benefit expenses in 2017 total CHF 16'397 thousand, increasing almost by 35% versus Prior Year (CHF 12'174 thousand). Personnel costs directly related to production equals CHF 6'741 thousand, of which CHF 4'999 thousand relates to temporary work, driven by increased production. Indirect personnel costs have increased from CHF 7'645 thousand to CHF 9'656 thousand, as per adjustment of the organization. Despite growth, indirect personnel costs still represent 15% of Net Sales.

Other Operating Expenses such as maintenance costs, insurances, external analysis, administration costs and sales commissions grew by 14% (less than Turnover), still representing 9,6% of Net sales.

Corporate Charges total CHF 3'959 thousand, increasing by 23% versus Prior Year.

Adjusted EBITDA is a positive CHF 9'432 thousands, declining towards 2017 due to increased operations costs as well organization. EBITDA rate has declined to 15% of Net Sales. In addition, provisions for ongoing discussions with customers have been taken in 2018.

Operating profit is CHF 9'889 thousand, lower compared to the prior year reflecting the EBITDA trend.

Profit margin is 9.6%.

Capital expenditures in property, plant and equipment and intangible assets amount to CHF 842 thousand and relate mainly to the purchase of new production machinery/accessories (Bulk and Filling&ASssembly) as well to the construction of the new Cafeteria.

Operating Working Capital is strongly impacted by the increase in Trade Receivables driven by volumes and customers mix. Also DSO increase is an important contributor to the AR increase. In particular, CRB has suffered from payment delays due to low service level on one side and on strong customer's growth on the other side. Trade Receivables total CHF 16'422 thousand, growing 56% versus Prior Year. Inventory passed from CHF 5'609 thousand to CHF 7'514 thousand, driven by growth on Turnover as well to a different purchasing policy, according to which purchases have been anticipated, in order to ensure availability at the moment of production. On the other side Trade Payables have also increased up to 11'027 thousand from CHF 5'009 thousand, mainly due to CHF 4'500 thousand for Dividends. Due to Inventories and Receivables increase, there was a worsening of Working Capital, compared to the year before.

Net financial position totals CHF 5'964 thousand compared to CHF 1'509 thousand at December 31, 2016. This is driven by still unpaid dividends (2017) for CHF 4'500 thousand as well a slight decline of cash.

Total Equity is CHF 11'300 thousand, down by CHF 1'022 thousand from CHF 12'322 thousand at December 31, 2017, mainly driven by 2018 result. Over the course of 2018 the Company has been able to repay 2'500 dividends out of a total of 7'000, due cash unbalance.

For purposes of commenting on the changes in financial position, a reclassified statement of financial position is presented below:

(in CHF thousands)	2018	2017	Change
Fixed assets	7'884	7 893	-g
Inventories	7'514	5'609	1 905
Trade receivables	16'422	10'534	5,888
Trade payables	-11'027	-5'009	-6'018
Trade working capital	12'909	11'134	1 775
Other current receivables and payables	-1.888	-902	-986
Net working capital	18,905	18'126	779
Other provisions and Non-current assets and liabilities	-5'126	-3'697	-1 429
Invested Capital	13779	14'429	-649

(in CHF thousands)	2018	2017	Change
Equity	-11'300	-12'322	1'022
Cash	3,348	4'009	-661
Financial payables	-5'827	-6,115	288
Net Financial Position	-2'479	-2'106	-373
Total sources	-13'779	-14'429	649

Fixed Assets / Invested Capital	57%	રેટર્ન્ડ
Net Financial Position / Equity	22%	17%
Invested Capital / Equity	-122%	-117%
Trade Working Capital / Revenues	21%	22%
Net Working Capital / Revenues	30%	37%

Share Capital 4.

The share capital at December 31, 2018 totals CHF 100.000 and consists of 200 ordinary shares of par value CHF 500 each.

There were no changes during the year as illustrated in the following table at December 31, 2018:

Shareholders	Beginning balance	Ending balance	%
Intercos S.p.A.	100.000	100.000	100.00%
SHARE CAPITAL	100.000	100.000	100.00%

A statement is made to the effect that the Company neither holds nor has purchased or sold shares of the parent during the course of the year under examination, not even through fiduciaries or trustees.

In addition, the Company neither holds nor has purchased or sold treasury shares during the course of the year under examination, not even through fiduciaries or trustees.

No changes on Company shares versus December 31, 2017:

	31.12.2018
Company, legal form and registered office	Share	Share
	capital	of voting rights
Vitalab SRL, Milano	EUR 160'060	75%
Share capital directly hold by CRB SA (75%):	EUR 120'060
CRB Benelux BV, Maastrischt	EUR 18'000	100%
Share capital directly hold by CRB SA (100%) :	EUR 18'000

5. Related Party Transactions

Related party transactions do not qualify as either atypical or unusual but fall under the ordinary course of the business operations of the Group companies. Such transactions, when not concluded at standard conditions or dictated by specific laws, are nevertheless carried out on an arm's length basis.

6. Risk Management and Uncertainties

Financial risk management is an integral part of Intercos Europe S.p.A.'s activities.

In fact CRB SA's business operations are exposed to various types of risk: market risk (including exchange rate and interest rate risks), credit risk and liquidity risk. The coordination and monitoring of the main financial risks is centralized at the corporate offices. The risk management policies are approved, in concert with the administrative bodies, by the Finance, Administration and Control function, which writes the policies for the management of the above risks and for the use of appropriate financial instruments.

At the end of 2018 it has been decided to make a provision to cover eventual settlement of a litigation with the client Cosswiss (for the project Watson) and a litigation with Douglas Nocibe, for which a negotiation is going on in the first months of 2019. The Company's risk management strategy focuses on the unpredictability of the markets and aims to minimize any potential adverse effects on the results of its operation.

7. Environment and Employees

The headcount of CRB SA at December 31, 2017 is 142 fixes employees (excluding temporaries in production) compared to 118 at year-end 2017, with an increase of 24 headcounts. This change is driven by business increase in the year 2018 forecasted as well in 2019. Main areas concerned are Direct and Indirect personnel, mainly in Supply Chain, Purchasing and Customer Service.

lssues related to safety in the workplace, the environment and safeguarding the environment have always been of major concern to the Intercos Group. The activities performed by the Company in these areas have ensured that over the course of the year no accidents occurred in the workplace causing serious injury to employees nor have damages to the environment been attributed to the Company.

8. Subsequent Events

Year 2019 has started with a backlog value from prior year to be delivered. Order Entry is expected as same level as last months of 2018, in order to ensure to deliver the Budget.

Budget is flat versus PY, mainly due to the transfer of the customer Douglas/Nocibe entirely to Cosmint.

CRB capacity is considered enough to achieve the expected turnover assuming to have a regular even monthly split.

It is foreseen to start important in order to improve the Filling&Assembly area as well to renew entirely the Bulk area, with the aim to be compliant with most recent GMP rules. The Project has been approved by Corporate and is foreseen for the second half of the year.

In terms of organization, it is expected to remain stable, with the exception of the new VP of Operations, Mr. Patrick Koglin, who will fully replace the role of Mrs Rochat (left at the end of 2017).

9. Appropriation of the Profit for the Year

To the Shareholders,

We ask you to approve the Directors' Report on Operations for the year 2018 and the financial statements for the year ended December 31, 2018 as submitted to you, appropriating the profit for the year of CHF 5'977'603 as follows: CHF 5'500'000 dividends distribution, CHF 477'603 to the extraordinary reserve.

Puidoux, 20 March 2019

CRB SA On behalf of the Board of Directors

Ernst & Youna Ltd Avenue de la Gare 39a P.O. Box CH-1002 Lausanne

Phone: +41 58 286 51 11 +41 58 286 51 01 Fax: www.ey.com/ch

To the General Meeting of

CRB S.A., Puidoux

Lausanne, 25 March 2019

Report of the statutory auditor on the financial statements

As statutory auditor, we have audited the accompanying financial statements of CRB S.A., which comprise the balance sheet, income statement, cash flow statement and notes, for the year ended 31 December 2018.

Board of Directors' responsibility

The Board of Directors is responsible for the preparation of the financial statements in accordance with the requirements of Swiss law and the company's articles of incorporation. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The Board of Directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.

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 Swiss law and Swiss Auditing Standards require that we plan and perform the audit to obtain reasonable assurance 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 the internal control system relevant to the entity's preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an the effectiveness of the entity's internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, 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 for the year ended 31 December 2018 comply with Swiss law and the company's articles of incorporation.

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Balance Sheet

CRB SA, Puidoux

Assets	Notes	31.12.2018	%	31.12.2017	%	Gap	જુર
		CHF		CHF		CHF
Current assets Cash and cash equivalents		3,347,632	10.2	4,008,596	14.4	-660,963	-16.5
Trade receivables	2.a.	15,013,962	45.8	9,621,665	34.6	5,392,297	56.0
Other current receivables	2.b.	1,551,028	4,7	1,615,825	5.8	-64,798	-4.0
Inventories		4,919,970	15.0	3,739,922	13.4	1,180,048	316
Accrued income and prepaid expenses	2. C.	43,805	0.1	963,396	3.5	-919,591	-ਰੇਟ
CURRENT ASSETS		24,876,396	75.9	19,949,403	71.7	4,926,993	24.7
Non-current Assets
Financial assets		170,847	0.5	135,847	0.5	35,000	25.8
Shareholding	ಗ	607,832	1.9	607,832	2.2
Tangible assets - Facilities and equipment		1,371,471	4.2	1,610,587	5.8	-239,117	-14.8
Tangible assets - Land and buildings		5,579,732	17.0	5,363,353	19.3	216,379	4.0
Intangible assets		154,231	0:5	175,711	0.6	-21,480	-12-2
NON-CURRENT ASSETS		7,884,113	24.1	7,893,330	28.3	-9,217	-0.1
ASSETS		32,760,509	100.0	27,842,733	100.0	4,917,776	17.7
LIABILITIES AND EQUITY		31.12.2018	9/8	31,12.2017	%	Gop	%
		CHF		CHF		CHF
Trade payables	2.d	11,026,865	33.7	5,009,329	18.0	6,017,536	120.1
Current liabilities (Interest bearing)		383,836	1.2	383,836	1.4
Advances from customers		1,529,246	4.7	1,518,492	5.5	10,753	0.7
Deferred income and accrued liabilities		1,896,443	5.8	1,911,683	6.9	-15,240	-0.8
Current liabilities		14,836,390	45,3	8,823,340	31.7	6,013,050	68.1
Non-current liabilities (Interest bearing)	2.e.	5,443,189	16.6	5,731,066	20.6	-287,877	-5.0
Other non-current liabilities	2.f.
Provisions		1,181,000	3.6	966,000	3.5	215,000	22,3
Non-current liabilities		6,624,189	20.2	6,697,066	24.1	-72,877	-1.1
LIABILITIES		21,460,579	દર્દ ર	15,520,406	55.7	5,940,173	38.3
Share capital		100,000	0.3	100,000	0.4
Legal reserve		50,000	0.2	50,000	0.2
Retained earnings		5,172,327		5,085,137		87,191
Profit of the year		5,977,603		7,087,191		-1,109,587
Available earnings		11,149,931	34.0	12,172,327	43.7	-1,022,397	-8.4
EQUITY		11,299,931	34.5	12,322,327	44.3	-1,022,397	-8 3

Income statement

CRB SA, Puidoux

Title Notes	31.12.2018	లిం	31.12.2017	%	Gap	96
	CHF		CHF		CHF
Revenue from sales of products manufactured	57,889,609	93.2	47,142,578	95.2	10,747,031	-2.0
Revenue from sales of services	1,579,485	2.5	1,531,645	3.1	47,840	-0 6
Other revenue - Royalties	806,752	1.3	692,490	1.4	114,262	-0.1
Variation in inventories of finished products and semi-finished	2,415,165	3.9	523,843	1.1	1,891,321	28
Rebates on sales	-546,168	-0.9	-352,643	-0.7	-193,525	-0.2
NET SALES	62,144,842	100.0	49,537,913	100.0	12,606,929
Material and merchandise expense	-22,298,981	-35.9	-15,963,744	-32.2	-6,335,237	-3.7
Transport costs	-2,712,870	-4.4	-1,776,223	-3.6	-936,647	-0.8
Direct costs	-8,125,242	-13.1	-5,465,733	-11.0	-2,659,509	-2.0
Direct expenses	-33,137,093	-53-3	-23,205,700	-46.8	-9,931,393	-6.5
GROSS PROFIT I	29,007,749	46.7	26,332,213	53.2	2,675,536	-6.5
Indirect wages and salaries	-9,655,806	-15.5	-7,645,252	-15.4	-2,010,554	-01
GROSS PROFIT II	19,351,943	31.1	18,686,960	37-7	664,983	-6.6
General expenses	-9,920,214	-16.0	-8,426,943	-17.0	-1,493,271	1-0
Operating profit (EBITDA)	9,431,730	15.2	10,260,018	20.7	-828,288	-5,5
Total amortization and depreciation	-886,110	-1.4	-867,225	-1.8	-18,885	0.3
Variation des provisions	-1,428,697	-2.3	-1,010,719	-2.0	-417,978	-03
Operating profit (EBIT)	7,116,923	11.5	8,382,074	16.9	-1,265,151	-5,5
Financial cost	-261,312	-0.4	-205,080	-0.4	-56,231	-0.0
Financial income	23,433	0.0	22,907	0.0	525	-0.0
Operating profit (EBT I)	6,879,044	11.1	8,199,901	16.6	-1,320,857	-5.5
Extraordinary costs / income 7.	10,567	0.0	130,993	0.3	-120,426	-02
Profit before tax (EBT II)	6,889,611	11.1	8,330,894	16.8	-1.441.283	-5,7
Taxes	-912,008	-1.5	-1,243,704	-2.5	331,696	1.0
Profit of the year	5,977,603	916	7,087,191	14:3	-1,109,587	-4.7

Cash flow statement

CRB SA, Puidoux

Title	2018	%
	CHF
Profit of the year	5,977,603
Amortization and depreciation	886,110
Variation of provisions	215,000
Variation of trade receivables	-5,392,297
Variation of other receivables	64,798
Variations of inventories	-1,180,048
Variation of accrued income and prepaid expenses	919,591
Variation of trade payables	1,517,536
Variation of short term payables
Variation of advances and other short term payables	10,753
Variation of accrued liabilities	-15,240
Cash flow from operating activities	3,003,807	-454.5
Investments in financial assets	-35,000
Divestments in financial assets
Investments in participations
Divestments in participations
Investments in tangible assets	-766,271
Divestments in tangible assets
Investmenst in intangible assets	-75,622
Divestmenst in intangible assets
Cash flow from investing activity	-876,893	132.7
Variation of non-current liabilities (Interest bearing)	-287,877
Variation of other non-current liabilities
Dividends paid	-2,500,000
Payments from capital increase
Cash flow from financing activities	-2,787,877	422
NET VARIATION OF CASH AND CASH EQUIVALENT	-660,964	100.0
Net cash as of 1. January	4,008,596
Net cash as of 31. December	3,347,632
NET VARIATION OF CASH AND CASH EQUIVALENT	-660,963

Notes

1. Information on the principles used in the annual statements

These financial statements have been prepared in accordance with the provisions on commercial accounting laid down in articles 957 – 963b Swiss Code of Obligations (CO). These financial statements are the first application of the new

accounting law. The presentation of the figures for the previous year was adjusted.

The following principles were used in the financial statements

Trade receivables

Trade receivables are valued at nominal value and converted into Swiss Franc at closing rates fixed by the group. A provision for bad debts is calculated following the rules determined by law : 5% for swiss customers, 10% for foreign customers and 100% for known risks.

Inventories

Inventories are valued at purchase price.

The purchase price of the goods are determined by the tracking method of inventories at weighted average cost. The actual cost of good is determined by the tracking method of inventories at standard cost.

Upon delivery of goods, benefits realization occurs during the transfer to the buyer of the profits and risks related to the ownership the transfer of benefit and risk is determined by international trade clauses underlying the operation (Incoterms).

A provision for inventory writedowns is calculated following the rules determined by law : 1/3 of the inventory.

Shareholding

Shareholdings are valued at acquisition cost.

Tangible and Intangible assets :

Tangible and intangible assets are amortized indirectly. Depreciation is calculated using the declining balance method. Possible immediate depreciation are made within the tax limits allowed by decision of the Board.

2.	Information and comments on specific positions of the balance sheet and P&L	31 12 2018	31.12.2017
		CHF	CHF
a.	Trade receivables
	from third parties	15,507,024	9,698,036
	from group companies and shareholders	857,988	785,590
	Correction value	-1,351,051	-861,961
	Total of trade receivables	15,013,962	9,621,665
b.	Other short-term receivables
	from third parties	947,751	1,019,020
	from participations	603,277	596,805
	Total of other short-term receivables	1,551,028	1,615,825
C	Accrued income and prepaid expenses
	from third parties	-230,388	806,735
	from group companies and shareholders	274,192	156,660
	Total of other short-term receivables	43,805	963,396
d.	Trade payables
	to third parties	4,451,656	4,059,422
	to group companies and shareholders	6,575,209	949,907
	Total of trade payables	11,026,865	5,009,329
e.	Non-current liabilities bearing interests
	to third parties	5,443,189	5,731,066
	to group companies and shareholders
	Total of non-current liabilities bearing interests	5,443,189	5,731,066
f.	Other non-current liabilities
	to group companies and shareholders	-
	Total of other non-current liabilities

CRB SA, Puidoux

3. Shares and interests in other companies

Notes

		31.12.2018		31.12.2017
	Company, legal form and registered office	Share	Share	Share	Share
		capital	of voting rights	capital	of voting rights
	Vitalab SRL, Milano	EUR TE0,060	75%	EUR 160 060	75%
	Share capital directly hold by CRB SA (75%)	EUR 120'060		EUR 120'060
	CRB Benelux BV, Maastrischt	EUR 18'000	100%	EUR 18,000	100%
	Share capital directly hold by CRB SA (100%) :	EUR 18,000		EUR 18'000
4.	Total amount of guarantees provided to third parties		31.12.2018	31.12.2017
			CHF	CHF
	Guarantee in favor of the Federal Customs Administration		90,800	55,800
	Rental guarantee in favor of Four Ever Immobilier SA		80,047	80,047
5.	Total assets pledged as collateral for business debts or subject to reservation of title
	Mortgage notes in 1st row pledged at UBS
	Mortgage notes in 1st row pledged at BCV		2,590,000	2,590,000
	Mortgage notes in 1st row pledged at BCV		4,330,000	4,330,000
	Book value of assets subject to a mortgage		5,132,915	5,363,353
e.	Financial commitments and leases
	Rentals		281,812	539,992
	Leases		86,347	57,470
	CRB SA is entered as additional guarantor in the credit facilities of EUR 80'000 -
	agreed between Intercos Spa as original borrower an guarantor, Intercos Europe Spa
	as original borrower and guarantor, Banca IMI Spa as Arranger, Agent, Security and
	original lender, and Banca Unicredit Spa as arranger and original lender.
7.	Explanation of extraordinary cost / income
	Various insignificant extraordinary costs		10,567	125,919
	Total of extraordinary cost		10,567	125,919
	Surplus value on asset sale			5,074
	Various insignificant extraordinary incomes
	Total of extraordinary income			5,074
	Total income resulting from extraordinary income and cost		10,567	130,993
8.	Maturity of long-term interest-bearing debts
	Expiring within 1 to 5 years		1,535,344	1,535,344
	Expiring within more than 5 years		3,811,886	4,195,722
	Total of long-term interest-bearing debts		5,347,230	5,731,066
	Details of the interest-bearing depts
	1. BCV SA, initial amount CHF 2'500'000 interest rate 1.85% until 2020, to be re-negotiated for a new term
	2. BCV SA, initial amount CHF 5'095'697 interest rate 2.18% until 2025, to be re-negotiated for a new term
ல்	Fees paid to the auditors
	Fees for auditing services		50,828	40,228
	Fees for other services

10.

The annual average of full-time jobs is not more than 250.

11. Significant events after balance sheet date

All material elements known at the closing were considered. At the date of preparation of these financial statements, no new event that could affect the financial position of the company has occurred.

Proposal of the Board regarding the use of earnings

Title	2018	2017
At the disposal of the general meeting:
Retained earnings	5,172,327	5,085,137
Profit of the year	5,977,603	7,087,191
Available earnings	11,149,931	12,172,327
Proposal of the Board:
Available earnings	11,149,931	12,172,327
./. Dividends payables	-5,500,000	-7,000,000
Solde à reporter	5,649,931	5,172,327

The general reserve has reached 50% of the share capital. No additional attribution is required.

CRB SA General Manager Ch

Puidoux,