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Jacob Holm & Sons AG

Annual Report for 2014

Contents

Page

Auditor’s Report

Independent Auditor's Report on Consolidated Financial Statements 2

Consolidated Financial Statements

Consolidated Income Statement 1 January - 31 December 4

Consolidated Statement of Comprehensive Income 1 January - 31 December 4

Consolidated Balance Sheet at 31 December 5

Statement of Changes in Equity, Group 1 January - 31 December 7

Consolidated Cash Flow Statement 8

Notes to the Annual Report, Group 9

Auditor’s Report

Independent Auditor's Report on Parent Company Financial Statements 42

Parent Company Financial Statements

Parent Company Income Statement 1 January - 31 December 43

Parent Company Statement of Comprehensive Income 1 January - 31 December 43

Parent Company Balance Sheet at 31 December 44

Statement of Changes in Equity, Parent Company 1 January - 31 December 46

Parent Company Cash Flow Statement 47

Notes to the Annual Report, Parent Company 48

PricewaterhouseCoopers AG, St. Jakobs-Strasse 25, Postfach, CH-4002 Basel, SwitzerlandTelefon: +41 58 792 51 00, Telefax: +41 58 792 51 10, www.pwc.ch

PricewaterhouseCoopers AG is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity.

Report of the auditorto the Board of Directors ofJacob Holm & Sons AGBasel

Report of the auditor on the consolidated financial statements

On your instructions, we have audited the consolidated financial statements of Jacob Holm & Sons AG,which comprise the balance sheet, income statement, statement of comprehensive income, cash flowstatement, statement of changes in equity and notes, for the year ended 31 December 2014.

The Board of Directors is responsible for the preparation and fair presentation of the consolidatedfinancial statements in accordance with the International Financial Reporting Standards (IFRS). Thisresponsibility includes designing, implementing and maintaining an internal control system relevantto the preparation and fair presentation of consolidated financial statements that are free from materi-al misstatement, whether due to fraud or error. The Board of Directors is further responsible for select-ing and applying appropriate accounting policies and making accounting estimates that are reasonablein the circumstances.

Our responsibility is to express an opinion on these consolidated financial statements based on ouraudit. We conducted our audit in accordance with the International Standards on Auditing. Thosestandards require that we plan and perform the audit to obtain reasonable assurance whether theconsolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures

including the assessment of the risks of material misstatement of the consolidated financial state-ments, whether due to fraud or error. In making those risk assessments, the auditor considers the

financial statements in order to design audit procedures that are appropriate in the circumstances, but

An audit also includes evaluating the appropriateness of the accounting policies used and the reasona-bleness of accounting estimates made, as well as evaluating the overall presentation of the consolidat-ed financial statements. We believe that the audit evidence we have obtained is sufficient and appro-priate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements for the year ended 31 December 2014 give a trueand fair view of the financial position, the results of operations and the cash flows in accordance withthe International Financial Reporting Standards (IFRS).

3

PricewaterhouseCoopers AG

Thomas Brüderlin Korbinian Petzi

Audit expert

Basel, 29 May 2015

Enclosure:

- Consolidated financial statements (balance sheet, income statement, statement of comprehensiveincome, cash flow statement, statement of changes in equity and notes)

Consolidated Income Statement 1 January - 31 December

Note 2014 2013

CHF '000 CHF '000

Revenue 5 217'742 96

Cost of goods sold 6 -194'980 -25

Gross profit 22'762 71

Sales and marketing expenses 6 -2'908 0

Administrative expenses 6 -11'335 -2'242

Operating profit 8'519 -2'171

Other operating income and expenses 11 2 2'290

Profit before financial income and

expenses and special items 8'521 119

Special items, net 7 -7'371 0

Financial income 12 10'940 13

Financial expenses 13 -7'968 0

Profit before tax 4'122 132

Tax on profit for the year 14 1'980 14

Net profit for the year 2'142 118

Consolidated Statement of Comprehensive Income 1. January -

31 December

2014 2013

CHF '000 CHF '000

Statement of Comprehensive Income

1 January - 31 December


Items that may be subsequently reclassified to profit or loss

Exchange adjustment, foreign companies 2'994 0

Comprehensive income 5'136 118

4

Consolidated Balance Sheet at 31 December

Assets

Note 2014 2013 1/1 2013

CHF '000 CHF '000 CHF '000

Goodwill 13'463 0 0

Customer lists, know-how, patents,

licenses and trademarks 4'413 0 0

Software 152 0 0

Intangible fixed assets under construction 667 122 0

Intangible fixed assets 15 18'695 122 0

Land and buildings 30'757 0 0

Plant and machinery 58'636 0 0

Other fixtures and fittings, tools and

equipment 1'403 203 276

Property, plant and equipment under

construction 50'810 0 0

Property, plant and equipment 16 141'606 203 276

Other receivables 144 46 46

Deferred tax asset 22 5'865 0 0

Financial fixed assets 6'009 46 46

Non-current assets 166'310 371 322

Inventories 17 30'256 0 0

Receivables from related companies 31 0 39 472

Corporation tax 18 7 0 0

Trade receivables 19 55'123 0 0

Bonds at fair value through profit and loss 9'031 0 0

Other receivables 19 9'938 14 13

Prepayments 528 0 0

Receivables 74'627 53 485

Cash at bank and in hand 10'560 355 251

Current assets 115'443 408 736

Assets 281'753 779 1'058

5

Consolidated Balance Sheet at 31 December

Equity and liabilities Note 2014 2013 1/1 2013

CHF '000 CHF '000 CHF '000

Share capital 20 250 100 100

Exchange adjustments 2'994 0 0

Retained earnings 56'061 169 467

Equity 59'305 269 567

Bond 21 79'926 0 0

Credit institutions 25 38'463 0 0

Provisions for deferred tax 22 11'358 0 0

Provisions for other staff obligations 23 904 0 0

Provisions for other liabilities and charges 24 989 0 0

Non-current liabilities 131'640 0 0

Current portion of non-current liabilities 6'406 0 0

Credit institutions 25 23'631 0 0

Trade payables 37'158 83 17

Payables, plant and machinery 8'579 0 0

Payables to related companies 31 181 87 47

Corporation tax 26 1'978 35 45

Other payables 12'875 305 382

Current liabilities 90'808 510 491

Liabilities 222'448 510 491

Equity and liabilities 281'753 779 1'058

Fee to auditors appointed at the annual

general meeting 9

Contingent liabilities and other financial

obligations 29

Financial risks 30

Related parties 31

Development costs 32

Post balance sheet events 33

Business Combinations 34

6

Statement of Changes in Equity, Group 1 January - 31 December

Share capital

Exchange

adjustments

Retained

earnings Total

CHF '000 CHF '000 CHF '000 CHF '000

Equity

Equity at 1 January 2014 100 0 169 269

Additions from contribution in

kind 150 0 53'750 53'900

Comprehensive income for the

year 0 2'994 2'142 5'136

Dividends 0 0 0 0

Equity at 31 December 2014 250 2'994 56'061 59'305

Equity at 1 January 2013 100 0 467 567

Comprehensive income for the

year 0 0 118 118

Dividends 0 0 -416 -416

Equity at 31 December 2013 100 0 169 269

7

Consolidated Cash Flow Statement

Note 2014 2013

CHF '000 CHF '000


Adjustments of non-cash items 27 8'050 75

Change in working capital 28 -2'922 -12

7'270 181

Financial income 10'940 13

Financial expenses -7'968 0

Corporation tax paid -68 -24

Cash flows from operating activities 10'174 170

Purchase of intangible fixed assets -688 -122

Purchase of property, plant and equipment -43'828 -3

Purchase of financial fixed assets -1'351 0

Sale of property, plant and equipment 70 2

Change in bonds at fair value through profit and loss -9'101 0

Acquisition of business combinations -63'095 0

Cash flows from investing activities -117'993 -123

Change in accounts with related parties 96 473

Raising of non-current loans 107'676 0

Repayment of non-current loans -7'337 0

Dividend paid 0 -416

Cash flows from financing activities 100'435 57

Change in cash and cash equivalents -7'384 104

Cash and cash equivalents at 1 January 355 251

Cash and cash equivalents via contribution in kind -5'347 0

Exchange adjustment of cash at bank and in hand at 1 January -695 0

Cash and cash equivalents at 31 December -13'071 355

specified as follows:

Cash at bank and in hand 10'560 355

Credit institutions (current liabilities) -23'631 0

-13'071 355

Cash flows from operating activities before financial income

and expenses and tax

8

9

Notes to the Annual Report, Group

1 Accounting Policies

The Annual Report of Jacob Holm & Sons AG for 2014 is prepared in accordance with InternationalFinancial Reporting Standards (IFRS).

The Annual Report for 2014 is presented in CHF ’000.

The applied accounting policies are unchanged compared to the previous year.

First time adoption of IFRSThis is the first annual report prepared in accordance with IFRS. The Group has been established in2014. Therefore, the Group did not prepare consolidated financial statements in prior years.

Effect of IFRS is described in note 2 in Notes to the Annual Report, Group and note 1 in Notes tothe Annual Report, Parent Company.

New standards, amendments and interpretations adopted by the GroupThe following standards, which are relevant to the Group have been adopted by the Group for thefirst time for the financial year beginning on or after 1 January 2014:

Amendment to IAS 32, ‘Financial instruments, introduces further guidance on when offset-ting is allowed.

Amendments to IAS 36, ‘Impairment of assets’, on the recoverable amount disclosures fornon-financial assets. This amendment removed certain disclosures of the recoverable amount ofCGUs which had been included in IAS 36 by the issue of IFRS 13.

IFRIC 21, ‘Levies’, sets out the accounting for an obligation to pay a levy that is not income tax.The interpretation addresses what the obligating event is that gives rise to pay a levy and whenshould a liability be recognised. The Group is not currently subjected to significant levies so the im-pact on the Group is not material.

New standards, amendments and interpretations not yet adoptedA number of new standards and amendments to standards and interpretations are effective for an-nual periods beginning after 1 January 2014, and have not been applied in preparing the consoli-dated financial statement.

IFRS 9, ‘Financial instruments’, addresses the classification, measurement and recognition offinancial assets and financial liabilities. Reduces the number of categories of financial assets to two;amortised cost and fair value. In cases where the fair value option is taken for financial liabilities,the part of a fair value change due to an entity’s own credit risk is recorded in other comprehensiveincome rather than the income statement. Furthermore, hedge accounting is simplified and netpositions can be hedged.

10


1 Accounting Policies (continued)

IFRS 15, ‘Revenue from contracts with customers’ deals with revenue recognition and es-tablishes principles for reporting useful information to users of financial statements about the na-ture, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contractswith customers. Revenue is recognised when a customer obtains control of a good or service andthus has the ability to direct the use and obtain the benefits from the good or service. The standardreplaces IAS 18 ‘Revenue’ and IAS 11 ‘Construction contracts’ and related interpretations. Thestandard is effective for annual periods beginning on or after 1 January 2017 and earlier applicationis permitted. The group is assessing the impact of IFRS 15.

The IASB has approved further new standards and interpretations that are not relevant to JacobHolm & Sons AG and will have no effect on the Financial Statements.

Consolidated Financial Statements

The Consolidated Financial Statements comprise the Parent Company Jacob Holm & Sons AG andgroup companies in which the Parent Company holds more than 50% of the share capital.

The Consolidated Financial Statements are prepared on the basis of the Financial Statements of theParent Company and the group companies by combining items of a uniform nature, and elimina-tion is made of intercompany income and expenses, intercompany accounts as well as profits andlosses on transactions between the consolidated companies. The results of foreign group companiesare translated into Swiss Franc at average exchange rates. The balance sheets are translated intoSwiss Franc at the exchange rates at the balance sheet date. Exchange adjustments in this connec-tion are made over the statement of comprehensive income.

Business combinationsOn acquisition of subsidiaries including acquisition of subsidiaries under common control, the pur-chase method is applied.

Purchase price of acquired assets, liabilities and contingent liabilities are initially measured at fairvalue at the time of acquisition. Identifiable intangible fixed assets are recognised if they can beseparated and the fair value can be measured reliably. Deferred tax is recognised on re-measurements made. Any remaining positive differences between the cost and the fair value of as-sets, liabilities and contingent liabilities acquired are recognised in intangible fixed assets in thebalance sheet as goodwill. Goodwill is not amortised, but is tested for impairment on an annual ba-sis.

Acquired companies are recognised in the Consolidated Financial Statements from the time whencontrol is achieved, while sold companies are recognised until the time of surrender of control.

Profit or loss on the sale of subsidiaries are calculated as the difference between the selling price netof selling expenses and the carrying amount of net assets with addition of goodwill and accumulat-ed exchange adjustments recognised in equity at the time of sale.

11



Foreign currencies

Transactions in foreign currencies are initially recognised at the exchange rates at the dates oftransaction. Exchange differences arising due to differences between the transaction date rates andthe rates at the dates of payment are recognised in financial income and expenses in the incomestatement.

Receivables, payables and other monetary items in foreign currencies are translated at the ex-change rates at the balance sheet date. Differences between the exchange rates at the balance sheetdate and the rates at the time of the establishment of the receivable or payable or recognition in themost recent Financial Statements are recognised in financial income and expenses in the incomestatement.

Balance sheet items including goodwill for consolidated companies that do not have CHF as theirfunctional currency are translated into CHF at the exchange rates at the balance sheet date, where-as the income statements of these companies are translated at average exchange rates for themonth. Exchange adjustments arising on the translation of the opening equity at year-end rates andnet profit for the year at year-end rates are recognised directly in equity under a separate reservefor exchange adjustments.

Income Statement

Revenue and recognition of income

Revenue consists of the fair value of goods sold excluding VAT and net of provisions for returns,discounts, etc.

Income is recognised when realised or realisable and earned. Income from the sale of goods is rec-ognised in the income statement when the sale is considered effected based on the following crite-ria:

delivery has been made before year end;

a binding sales agreement has been made;

the sales price has been determined; and payment has been received or may with reasona-ble certainty be expected to be received.

Cost of goods sold

Cost of goods sold comprises costs incurred to achieve revenue for the year. Cost comprises rawmaterials, consumables, direct labour costs and indirect production costs such as maintenance anddepreciation, etc, as well as operation, administration and management of factories and distribu-tion expenses including salaries to distribution staff.

Cost of goods sold also includes research and development costs that do not qualify for capitalisa-tion as well as amortisation of capitalised development costs.

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Sales and marketing expenses

Sales and marketing expenses comprise costs in the form of salaries to sales staff, advertising andmarketing expenses as well as operation of motor vehicles, depreciation, etc.

Administrative expenses

Administrative expenses comprise expenses for Management, administrative staff, office expenses,depreciation, etc.

Other operating income and expenses

Other operating income and other operating expenses comprise items of a secondary nature to thecore activities of the companies, including gains and losses on disposals of intangible fixed assetsand property, plant and equipment as well as subsidies received which do not directly relate to thepurchase of non-current assets.

Special items

Special items comprise income and expenses outside normal operations which are at the same timenon-recurring income and expenses.

Financial income and expenses

Financial income and expenses comprise interest, financial expenses in respect of finance leases,realised and unrealised exchange adjustments, price adjustment of securities and amortisation offinancial assets and liabilities.

Financial expenses directly attributable to purchases, construction or production of a qualifyingasset are included as part of the expenses relating to the asset. All other financial expenses are rec-ognised in expenses in the financial year in which they were incurred.

A qualifying asset is an asset for which considerable time is required to make it ready for its intend-ed use or for sale.

Tax on profit for the year

Tax for the year consists of current tax for the year and deferred tax for the year. The tax attributa-ble to the profit for the year is recognised in the income statement, whereas the tax attributable toequity transactions is recognised directly in equity.

Any changes in deferred tax due to changes to tax rates are recognised in the income statement.

13



Balance Sheet

Intangible fixed assets

Goodwill represents the excess of the cost of an acquisition over the fair value of identifiable netassets of the acquired enterprise. Goodwill is measured at historical cost less accumulated impair-ment losses. Goodwill is not amortised. The carrying amount of goodwill is allocated to the Group’soperating segments. The allocation is completed no later than at the end of the reporting periodfollowing the acquisition.

Goodwill is tested for impairment annually or on indication of impairment In the event of impair-ment, the carrying amount is written down to the value in use. Impairment charges on goodwill arenot reversed.

Customer lists, know-how, patents and licenses, trademarks and software are measured at cost lessaccumulated amortisation. Amortisation is made on a straight-line basis over the expected usefullife, which are;

Customer lists, know-how, patents and licenses 3-10 yearsTrademarks 20 yearsSoftware 3-5 years

Property, plant and equipment

Property, plant and equipment are recognised at cost less accumulated depreciation and less anyaccumulated impairment losses.

Cost comprises the cost of acquisition and expenses directly related to the acquisition up until thetime when the asset is ready for use. In the case of assets of own construction, cost comprises directand indirect expenses for labour, materials, components and sub-suppliers. Income from the sale ofproducts during a possible run-in period until the asset is fully ready for use is set off against thecost of the asset.

State subsidies received are set off against the cost of assets qualifying for the subsidy.

Financial expenses directly attributable to purchases, construction or production of a qualifyingasset are included as part of the cost relating to the asset. A qualifying asset is an asset for whichconsiderable time is required to make it ready for its intended use or for sale.

Depreciation based on cost reduced by any residual value is calculated on a straight-line basis overthe expected useful lives of the assets, which are:

Buildings 30-50 yearsPlant and machinery 10-15 yearsOther fixtures and fittings, tools and equipment 3-10 years

Spare parts included in plant and machinery are depreciated over 5 years.

14



Gains or losses from the sale of property, plant and equipment are calculated as the difference be-tween the selling price net of selling expenses and the carrying amount at the time of the sale. Gainsor losses from current replacement of property, plant and equipment are recognised in other oper-ating income and expenses in the income statement.

Impairment of fixed assets

The carrying amounts of intangible assets and property, plant and equipment are reviewed on anannual basis to determine whether there is any indication of impairment other than that expressedby amortisation and depreciation. If so, an impairment test is carried out to determine whether therecoverable amount is lower than the carrying amount, and the asset is written down to its lowerrecoverable amount.

The asset is written down to its recoverable amount if this is lower than the carrying amount. Therecoverable amount of the asset is calculated as the higher of net selling price and value in use.Where a recoverable amount cannot be determined for the individual asset, the assets are assessedin the smallest group of assets for which a reliable recoverable amount can be determined based ona total assessment.

Impairment losses are reversed to the extent that changes have taken place in the assumptions orestimates leading to the write-down for impairment. Impairment losses are only reversed to theextent that the new carrying amount of the asset does not exceed the carrying amount which theasset would have had, had it not been written down for impairment. Impairment on goodwill is notreversed.

Financial fixed assets

Other receivables

Receivables are non-derivative financial assets with fixed or determinable payments that are notquoted in an active market. They are included in current assets, except for maturities greater than12 months after the end of the reporting period. These are classified as non-current assets.

Investments in subsidiaries and associates

Investments in subsidiaries and associates are measured at cost in the Parent Company FinancialStatements.

Inventories

Inventories are measured at the lower of cost under the FIFO method and net realisable value. Thenet realisable value of inventories is calculated at the amount expected to be generated by sale inthe process of normal operations with deduction of selling expenses and costs of completion. Thenet realisable value is determined allowing for marketability, obsolescence and development in ex-pected sales sum.

The cost of goods for resale, raw materials and consumables equals landed cost.

15



The cost of finished goods and work in progress comprises the cost of raw materials, consumablesand direct labour as well as directly attributable labour and production costs. These costs also com-prise maintenance and depreciation of the machinery, factory buildings and equipment used in themanufacturing process as well as costs of production management.

Receivables

Receivables are measured in the balance sheet at the lower of amortised cost and net realisable val-ue, which corresponds to nominal value less provisions for bad debts. Provisions for bad debts aredetermined on the basis of an individual assessment of each receivable.

Dividend

Dividend is recognised as a liability at the time of adoption at the Annual General Meeting. Divi-dend expected to be paid for the year is disclosed as a separate equity item.

Corporation tax and deferred tax

Current tax liabilities and receivables are recognised in the balance sheet as tax calculated on thetaxable income for the year adjusted for tax on taxable income for prior years and for taxes paid onaccount.

Deferred tax is measured according to the balance-sheet liability method in respect of all temporarydifferences between the carrying amount and the tax base of assets and liabilities.

However, deferred tax is not recognised in respect of temporary differences concerning goodwillnot deductible for tax purposes and other items where temporary differences – apart from businessacquisitions – have arisen at the time of acquisition without affecting the profit for the year or thetaxable income. In cases where the computation of the tax base may be made according to alterna-tive tax rules, deferred tax is measured on the basis of the intended use of the asset and settlementof the liability, respectively.

Deferred tax assets, including the tax base of tax loss carry-forwards, are recognised at the value atwhich they are expected to be utilised, either by elimination in tax on future earnings or by set-offagainst deferred tax liabilities within the same legal tax entity and jurisdiction.

Deferred tax is measured on the basis of the tax rules and tax rates in the respective countries thatwill be effective under the legislation at the balance sheet date when the deferred tax is expected tocrystallise as current tax. Any changes in deferred tax due to changes to tax rates are recognised inthe income statement unless the deferred tax relates to equity entries.

16



Staff obligations

Wages and salaries, social security contributions, paid absence and sickness absence, bonuses andnon-monetary contributions are recognised in the financial year in which the Group’s employeeshave performed the related work. Expenses relating to the Group’s long-term staff benefits are ac-crued so that they follow the performance of work by the employees concerned.

The Group’s pension schemes comprise defined contribution plans.

Moreover, provisions are made for seniority based bonuses earned over the employment period.

Provisions

Provisions are recognised when – as a result of an event occurred before or on the balance sheetdate – the Company has a legal or constructive obligation and it is probable that economic benefitsmust be given up to settle the obligation.

Provisions are measured at Management’s best estimate of the amount at which the liability is ex-pected to be settled. At the measurement of provisions, discounting is made of the expenses neces-sary to settle the liability if this has a material effect on the measurement of the liability.

Financial liabilities

Mortgage credit loans and loans from credit institutions are initially recognised at fair value net oftransaction expenses incurred. Subsequently, the financial liabilities are measured at amortisedcost corresponding to capitalised value by use of the effective rate of interest so that the differencebetween the proceeds and the nominal value is recognised in the income statement over the loanperiod.

Other liabilities comprising trade payables and other liabilities are also measured at amortised cost.

Cash Flow Statement

The cash flow statement shows cash flows for the year broken down by operating, investing andfinancing activities, changes for the year in cash and cash equivalents as well as cash and cashequivalents at the beginning and end of the year.

Cash flows from operating activities

Cash flows from operating activities are calculated as the net profit for the year adjusted for non-cash operating items, changes in working capital, financial income/expenses and corporation taxpaid.

Cash flows from investing activities

Cash flows from investing activities comprise cash flows from acquisitions and disposals of intangi-ble fixed assets, property, plant and equipment as well as financial fixed asset investments.

17



Cash flows from financing activities

Cash flows from financing activities comprise cash flows from the raising and repayment of non-current liabilities as well as payments to and from shareholders.

Cash and cash equivalents

Cash and cash equivalents comprise the item "Cash at bank and in hand" under current assets netof current credits with banks that constitute an integrated part of the Group’s current cash man-agement.

The cash flow statement cannot be immediately derived from the information provided in thesefinancial statements.


2 First time adoption of IFRS

This is the first annual report prepared in accordance with IFRS. The Group has been established in 2014.

Therefore, the Group did not prepare consolidated financial statements in prior years.

As of 31 December 2013 there were no differences between Swiss GAAP and IFRS for stand-alone entity

Jacob Holm & Sons AG.

3 Significant accounting estimates

Estimates and judgements are continually evaluated and are based on historical experience and other factors,

including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates

will, by definition, seldom equal the related actual results. The estimates and assumptions that have a

significant risk of causing a material adjustment to the carrying amounts of assets within the next financial

year are addressed below.

Deferred tax asset

The Group has recognised a deferred tax asset of CHF 6m primarily relating to a tax loss carry-forward in

France. The French plant has improved the productmix and expects to improve effeciency by upgrading the

productionlines. On basis of this the Group expects to be able to utilise the tax loss carry-forward within the

next 5 - 10 years.

Business Combinations

For acquisitions of entities, the assets, liabilities and contingent liabilities of the acquiree are recognised using

the acquisition method.

No active market exists for the majority of the acquired assets and liabilities, in particular in respect of

acquired intangible assets. Accordingly, Management makes estimates of the fair value of acquired assets,

liabilities and contingent liabilities. Depending on the nature of the item, the fair value of an item as determined

in the purchase price allocation may be associated with uncertainty and possibly adjusted subsequently.

The unallocated purchase price (positive amount) is recognised in the statement of financial position as

goodwill, which is allocated to the Group’s cash-generating units. Only the TWIG acquisition resulted in

recognition of goodwill. The TWIG Group forms one operating segment, and hence, goodwill has not been

allocated across cash generating units.

Goodwill is not amortised but is subject to an annual impairment test. The impairment test as of 31 December

2014 is, due to the fact that the acquisition took place in 2014 based on a re-assessment of the fair value of

the TWIG Group determined by an independent third party as a basis for the purchase price. In

Management’s view, the assumptions applied reflect the market conditions existing as of 31 December 2014.

Hence, there is, in Management’s view, no significant uncertainty associated with valuation of goodwill as of

31 December 2014.

18


4 Segment information

The reportable segments are based on the segmentation in the internal financial reporting received by Group

Management. The reportable segments are divisions offering customers different products and services.

The Jacob Holm Industries segment produces and sells non-woven roll-goods.

The Sontara segment produces and sells non-woven in converted and roll-goods form.

The TWIG segment sells non-woven by-products.

The "Other" segment consists of the holding and management companies Jacob Holm & Sønner A/S,

Jacob Holm & Sønner Holding A/S and Jacob Holm & Sons AG.

The Group consisted of only one segment in 2013 and as such no segment information are given.

The Group is managed and decisions are made on basis of EBITDA.

Jacob Holm

2014 Industries Sontara TWIG Other Eliminations Group

Income statement CHF '000 CHF '000 CHF '000 CHF '000 CHF '000 CHF '000

Revenue

Inter-segment revenue 688 0 0 3'748 -4'436 0

External revenue 150'407 64'938 2'397 0 0 217'742

EBITDA 10'047 7'989 700 -842 587 18'481

Depreciation, amortization and impairment losses 8'362 1'363 5 143 0 9'873

Special items 0 6'022 74 1'275 0 7'371

Financial income 410 0 14 13'404 -2'888 10'940

Financial expenses 1'333 3'382 3 6'138 -2'888 7'968

Income tax income/expense 160 -54 82 1'648 144 1'980

Profit or loss 507 -2'724 550 3'366 443 2'142

Balance sheet

Non-current assets

- including investment in property, plant and equipment 122'989 40'155 57 282'309 -279'200 166'310

Additions to non-current assets 48'965 2'779 23 401 0 52'168

Current assets 35'252 112'945 1'573 65'468 -99'795 115'443

Non-current liabilities 50'547 33'717 0 91'196 -43'820 131'640

Current liabilities 49'936 87'500 666 9'122 -56'416 90'808

19


2014 2013

CHF '000 CHF '000

4 Segment information (continued)

Geographic allocation

Revenue

Switzerland 101 0

EU 69'077 0

USA/Canada 102'513 96

APAC 31'353 0

Other 14'698 0

Total revenue 217'742 96

Non-current assets other than deferred tax assets, by area

Switzerland 19'246 371

EU 28'382 0

USA/Canada 112'796 0

APAC 17 0

Other 5 0

Total non-current assets other than deferred tax assets 160'446 371

5 Revenue

Sale of goods 217'742 96

217'742 96

6 Expenses classified by type

Production costs 185'096 25

Distribution costs 9'884 0

Cost of goods sold 194'980 25

Sales and marketing expenses 2'908 0

Administrative expenses 11'335 2'242

Other income and expenses -2 -2'290

Special items, net 7'371 0

216'592 -23

Classified by type as follows:

Expenses for raw materials and consumables 125'474 0

Other external expenses 55'475 -1'338

Staff expenses 25'770 1'239

Depreciation and amortisation 9'873 76

216'592 -23

20


2014 2013

CHF '000 CHF '000

7 Special items, net

Special items, costs:

Due dilligence costs regarding acquisitions of business 3'128 0

Integration costs regarding acquired businesses 4'012 0

Restructuring projects 231 0

7'371 0

Special items, are all external expenses.

8 Staff expenses

Staff expenses are included in the Group's production costs, distribution costs, sales and marketing and

administrative expenses as follows:

Wages and salaries 19'632 1'086

Pensions defined contribution plans 996 75

Other social security expenses 5'142 78

25'770 1'239

Average number of full-time employees 331 5

Staff expenses are distributed on the individual cost groups as follows:


Sales and marketing expenses 1'625 0


25'770 1'239

21


2014 2013

CHF '000 CHF '000

9 Fee to auditors appointed at the general meeting

Audit fee 276 5

Tax consultancy 847 101

Non-audit services 288 0

Total 1'411 106

Fee to other audit firms

Non-audit services 23 0

10 Depreciation and amortisation

Depreciation and amortisation for the year are specified as follows:

Customer lists, know-how, patents, licences and trademarks 158 0

Software 114 0

Buildings 1'405 0

Plant and machinery 7'764 0

Other fixtures and fittings, tools and equipment 432 76

9'873 76

Depreciation and amortisation are distributed

on the individual cost groups as follows:


Sales and marketing expenses 207 0

Administrative expenses 326 76

9'873 76

11 Other operating income and expenses

Other operating income:

Subsidies 17 0

Gains on disposals of non-current assets 9 2

Management fee 79 2'281

Other 5 7

110 2'290

Other operating expenses:

Loss on disposals of non-current assets -59 0

Other -49 0

-108 0

2 2'290

22


2014 2013

CHF '000 CHF '000

12 Financial income

Interest 716 6

Exchange adjustments 10'224 7

10'940 13

13 Financial expenses

Interest 5'675 0

Exchange adjustments 2'293 0

7'968 0

14 Tax on profit for the year

Current tax on profit for the year 1'880 14

Change in deferred tax 111 0

Change in tax previous years -11 0

1'980 14

Tax on profit for the year is specified as follows:

Calculated 11% tax on profit for the year before tax 453 14

Tax effect of:

1'318 0

106 0

Adjustment of valuation deferred tax 114 0

Adjustment of tax previous years -11 0

1'980 14

Effective tax rate for the year 48.03% 10.61%

Higher/lower tax rate in foreign companies

Tax on nondeductible expenses and nontaxable income

Interest and exchange adjustments relate to loans granted and receivables measured at amortised cost.

Interest and exchange adjustments relate to loans received and payables measured at amortised cost.

23


Customer lists, know- Intangible fixed

how, patents, licenses assets under

Goodwill and trademarks Software construction

CHF '000 CHF '000 CHF '000 CHF '000

15 Intangible fixed assets

2014

Cost at 1 January 0 0 0 122

0 0 155 0

13'463 4'571 0 0

0 12 2'549 0

Additions for the year 0 0 141 545

Cost at 31 December 13'463 4'583 2'845 667

Amortisation at 1 January 0 0 0 0

0 0 154 0

0 12 2'425 0

Amortisation for the year 0 158 114 0

0 170 2'693 0

13'463 4'413 152 667

Amortised over 10 years 3-5 years

2013



Cost at 31 December 0 0 0 122

Amortisation at 1 January 0 0 0 0

Amortisation for the year 0 0 0 0

Amortisation at 31 December 0 0 0 0

0 0 0 122

Amortised over 10 years 3-5 years

Exchange adjustment at

year-end rate

Additions from contribution

in kind

Exchange adjustment at

year-end rate

Carrying amount at 31

December


in kind

Additions from business

combination

Amortisation at 31

December


December

24


15 Intangible fixed assets (continued)

The Group has performed impairment test of Goodwill per 31 December 2014. Goodwill was recognised

in April 2014 as part of the acquisition of the TWIG Group.

The Group has performed the impairment test on basis of overall valuation of the TWIG Group prepared by

Credit Suisse. The Group has evaluated that assumptions have not changed and as such there are no need

for impairment of Goodwill.

Valuation of the Companies was prepared on basis of the business plan for 2014 - 2018 and evaluated

by comparing valuation according to DCF model, comparable trading companies and comparable transactions.

When calculating value according to DCF model, a WACC of 8.1 - 9.7 % and expected terminal growth

of 0 - 0.5 % was evaluated as true and fair.

At year-end Management has assessed that the key assumptions used to determinate fair value at

the time of the aquisition still reflects the market conditions at year-end. As a consequense there is no

impairment of goodwill at 31 December 2014.

25


Other fixtures Property, plant

and fittings, and equip-

Land and Plant and tools and ment under

buildings machinery equipment construction3'351

CHF '000 CHF '000 CHF '000 CHF '000

16 Property, plant and equipment

2014


Exchange adjustment

at year-end rate 1'994 3'840 127 835

6'470 16'647 1 0

37'183 100'617 5'230 8'146

Additions for the year 606 11'603 815 51'941

Disposals for the year 0 -155 -287 -10'112

Cost at 31 December 46'253 132'552 6'731 50'810

Depreciation at 1 January 0 0 642 0

Exchange adjustment

at year-end rate 450 1'841 108 0

13'641 64'389 4'385 0

Depreciation and

impairment losses for the year 1'405 7'764 432 0

Disposals for the year 0 -78 -239 0

Depreciation at 31 December 15'496 73'916 5'328 0

Carrying amount

at 31 December 30'757 58'636 1'403 50'810

Depreciated over 30-50 years 5-15 years 3-10 years

The carrying amount of plant and machinery at 31 December 2014 includes interest of CHF 434k.

During the year, the Group has capitalised borrowing costs amounting to CHF 816k on qualifying assets.

Additions from business

combination


in kind


in kind

The carrying amount of buildings at 31 December 2014 includes interest of CHF 587k.

26


Other fixtures Property, plant

and fittings, and equip-

Land and Plant and tools and ment under

buildings machinery equipment construction

CHF '000 CHF '000 CHF '000 CHF '000


(continued)

2013


Exchange adjustment

at year-end rate 0 0 0 0


Disposals for the year 0 0 -14 0

Cost at 31 December 0 0 845 0

Depreciation at 1 January 0 0 580 0

Exchange adjustment

at year-end rate 0 0 0 0

Depreciation and

impairment losses for the year 0 0 76 0

Disposals for the year 0 0 -14 0

Depreciation at 31 December 0 0 642 0

Carrying amount

at 31 December 0 0 203 0

Depreciated over 30-50 years 5-15 years 3-10 years

The carrying amount of buildings at 31 December 2013 includes interest of CHF 550k.

The carrying amount of plant and machinery at 31 December 2013 includes interest of CHF 333k.

During the year, the Group has capitalised borrowing costs amounting to CHF 50k on qualifying assets.

27


2014 2013

CHF '000 CHF '000

17 Inventories

Raw materials and consumables 7'419 0

Finished goods 22'837 0

30'256 0

206'095 0

Inventories expected to be sold after more than 1 year amount to 0 0

Write-down on inventories for the year amounts to 497 0

Reversed write-down on inventories for the year amounts to 302 0

18 Corporation tax

0 0

0 0

Tax refunded/paid 7 0

Corporation tax receivable at 31 December 7 0

19 Receivables

Trade receivables 55'382 0

Bad debt provision -259 0

Trade receivables, net 55'123 0

Other receivables 9'938 14

65'061 14

Bad debt provision

Bad debt provision at 1 January 0 0

Additions for the year 259 0

Disposals for the year:

- Applied 0 0

Bad debt provision at 31 December 259 0

Raw materials and consumables expensed for the year

Subsequent sales have shown that there was no need for the write-down.

Corporation tax receivable at 1 January

Exchange adjustment at year-end rate

28


2014 2013

CHF '000 CHF '000

20 Share capital

Share capital has developed as follows:

1 January 100 100

Increase via contribution in kind 150 0

31 December 250 100

21 Bond

The Group Company Jacob Holm & Sønner Holding A/S has decided to issue a series of bonds in the

amount of SEK 650m in 2014.

The Issuer shall pay interest on the par value of the Bonds from and including, the issue date at three

months STIBOR plus a margin of 5,25 %.

The Bond matures in full on 3 April 2019. The Company may redeem the bond issue in whole or in part at

any time.

The Bond is subject to three covenants:

- Debt/EBITDA ratio

- Interest coverage ratio

- liquidity of minimum USD 5m

29


2014 2013

CHF '000 CHF '000

22 Deferred tax

Deferred tax at 1 January 0 0

Exchange adjustment at year-end rate 465 0

Additions from contribution in kind 4'917 0

Change in deferred tax, see note 14 111 0

Deferred tax at 31 December 5'493 0

Deferred tax relates to:

Inventories -579 0

Other current assets 53 0

Other liabilities -119 0

Current part -645 0

Property, plant and equipment 8'978 0

Other liabilities -105 0

Tax loss carry-forward -9'959 0

Retaxation relating to utilised losses in foreign subsidiary 7'224 0

Non-current part 6'138 0

Deferred tax, net 5'493 0

which breaks down as follows:

Deferred tax asset -5'865 0

Provisions for deferred tax liability 11'358 0

5'493 0

Management has prepared detailed forecasts for the coming financial years for the entity in question and has

reassessed the expected time frame for utilisation of the tax loss carry-forward.

The Group’s tax loss is subject to varying conditions and is expected fully utilised for set-off against positive

taxable income within a 5-10 year period.

One of the entities to which the tax loss carry-forward relates to, realised a tax loss for assessment year 2014.

It is Management’s assessment that the taxable income will increase in the coming financial years due to

increasing earnings.

Management has therefore chosen to recognise the full tax base of the tax loss carry-forwards based on the

expectation that tax loss carry-forwards may be fully set off against future taxable income within the specified

time frame.

30


23 Other staff obligations

2014 2013

CHF '000 CHF '000

Balance at 1 January 0 0

Exchange adjustment at year-end rate -15 0

Additions from contribution in kind 802 0

Disposals for the year -98 0

Discount effect 103 0


Balance at 31 December 904 0

24 Provisions for other liabilities and charges

The liability relates to an estimated liability regarding dismantling of assets held on leased land.

2014 2013

CHF '000 CHF '000

Balance at 1 January 0 0

Exchange adjustment at year-end rate 33 0


Balance at 31 December 989 0

25 Credit institutions

Payment due later than 5 years 0 0

Payment due 1-5 years 38'463 0

Non-current credit institutions 38'463 0

Payment due within 1 year 30'037 0

68'500 0

The Group offers the employees to participate in pension schemes in the form of defined contribution plans.

The provision for other staff obligations primarily includes seniority based bonuses for employees calculated

by an actuary taking into account the expected turnover among employees, wage increases etc. A discount

factor of 1,80% has been used against 3,00% in 2013.

As the obligation is uncertain as regards the time of settlement, no breakdown of time of maturity can be

made. The entire obligation has therefore been classified as a non-current liability.

31


2014 2013

CHF '000 CHF '000

26 Corporation tax

35 45

Addition from acquisition of subsidiaries 141 0

-6 0

Tax on operating profit, see note 14 1'869 14

Tax paid -61 -24

Accrued corporation tax at 31 December 1'978 35

27 Cash flow statement - adjustments non-cash items

Financial income -10'940 -13

Financial expenses 7'968 0

Depreciation, amortisation and impairment losses, including

losses and gains on disposals of intangible fixed assets and property, 9'923 74

plant and equipment

Tax on profit for the year 1'980 14

Exchange gain/loss on intercompany accounts -881 0

8'050 75

28 Cash flow statement - change in working capital

Change in inventories -2'457 0

Change in receivables -29'487 -1

Change in other provisions 92 0

Change in payables 28'930 -11

-2'922 -12

Accrued corporation tax at 1 January

Exchange adjustment at year-end rate

32


2014 2013

CHF '000 CHF '000

29 Contingent liabilities and other financial obligations

Mortgages

As security for credit institution, mortgage deeds registered

to the mortgagor have been issued totalling 87'813 0

As security for credit institution, a mortgage on movable property

has been issued totalling 2'284 0

Contractual obligations

The Group has entered into agreements on delivery of property, plant

and equipment with a remaining obligation of 13'818 0

Obligations under operating leases

Obligations under operating leases break down as follows according to due date:

Minimum payments 2014 2013

CHF '000 CHF '000

0-1 year 21 0

1-5 years 3 0

>5 years 0 0

24 0

The mortgage deed on movable property is secured on intangible

fixed assets and property plant and machinery at a carrying amount

of CHF 13.005k (at 31 December 2013: CHF 14,891k).

The mortgage deeds registered to the mortgagor are secured on

land and buildings as well as the related plant and machinery at a

carrying amount of CHF 59,013k (at 31 December 2013: CHF

51,649k).

Obligations under operating leases primarily comprise agreements entered into concerning the lease of

operational equipment. The leases run until 2016 at the latest.

As security for credit institutions, security has moreover been

provided in current assets at a carrying amount of CHF 26,589k (at

31 December 2013: CHF 20,753k).

33


29 Contingent liabilities and other financial obligations (continued)

Obligations under rental agreements

Obligations under rental agreements break down as follows according to due date:

Minimum payments 2014 20130 0

CHF '000 CHF '000

0-1 year 112 91

1-5 years 449 252

>5 years 28 0

589 343

30 Financial risks

Credit risk

The Group is exposed to credit risks on receivables.

Credit insurance has been taken out in respect of a part of the Group's trade receivables as part of a factoring

agreement not qualifying for derecognition. At the balance sheet date the outstanding amount is approx.

CHF 13m.

The overdue balance on trade receivables is specified as follows at 31 December 2014:

There were no trade receivables at the end of 2013.

Current follow-up is made on outstanding accounts in accordance with the Group's trade receivables

procedures. Where uncertainty arises as to a customer's ability or willingness to pay, and it is estimated that

the trade receivable is subject to risk, a bad debt provision is made.

Obligations under rental agreements primarily comprise agreements entered into concerning the rent of office

space. The leases run until 2020 at the latest.

CHF '000

0-15days 16-30 days 31-45 days > 45 days Total

Overdue receivables

not subject to impairment 4'872 3'201 240 2'183 10'496

Overdue receivables

subject to impairment 0 0 0 93 93

4'872 3'201 240 2'276 10'589

Bad debt provision 0 0 0 -93 -93

4'872 3'201 240 2'183 10'496

34


30 Financial risks (continued)

Liquidity risk

The cash need is expected covered by the current liquidity surplus from operations as well as unutilised

credits.

Fair value of the Bond is based on an indicative price published by a Broker (level 2).

The covenants comprise measurements on specific financial ratios, including solvency, EBITDA in relation to

fixed charges (interest, instalments, income tax, dividend and capital expenditure) and the cover of revolving

credit by working capital.

The analysis of due dates is stated on the basis of category and class broken down on due date. The

calculation of interest payments on floating-rate obligations is based on the interest rate on the balance sheet

date.

In the event of breach of a covenant the Group has the right to remedy without undue delay, respectively is

the bank entitled to terminate part or all of the outstanding loan facilities, should the Group not be able to do

so.

Some of the Group's credit facilities are variable due to the fact that some of the Group's credit lines are

based on the amount of the Group's trade receivables and inventory.

The Group ensures sufficient cash resources by entering into framework agreements for current overdraft

facilities. Existing agreements with agreed upon repayment terms cannot be terminated by the banks unless

there is a breach of the covenants stated in the loan agreements.

2014

CHF '000

Repayment

not finally Carrying Fair

< 1 year 1-5 years >5 years Total agreed amount value

Measured at amortised cost:

Bond 5'798 98'915 0 104'713 0 82'536 82'536

Credit institutions 30'038 38'463 0 68'501 0 68'501 68'501

Payables to related

companies 181 0 0 181 0 181 181

Trade payables 37'159 0 0 37'159 0 37'159 37'159

Other short-term liabilities 23'430 0 0 23'430 0 23'430 23'430

Financial liabilities 96'606 137'378 0 233'984 0 211'807 211'807

Loans and receivables:

Bonds at fair value through profit and

loss 9'031 0 0 9'031 0 9'031 9'031

Trade receivables 55'382 0 0 55'382 0 55'382 55'123

Other receivables 9'938 0 0 9'938 0 9'938 9'938

Cash at bank and in hand 10'560 0 0 10'560 0 10'560 10'560Finansielle aktiver

84'911 0 0 84'911 0 84'911 84'652

Net cash outflow -11'695 -137'378 0 -149'073 0 -126'896 -127'155

Unutilised credits 6'856 6'856

35



Market risk

No derivative financial instruments are used to hedge interest rate risk.

The Group's currencies used for payment are mostly distributed between EUR and USD. No financial

instruments are used to hedge positions in foreign currency.

Based on interest-bearing debt at the balance sheet date, an increase in the market rate by 1% would

decrease the profit for the year before tax of CHF 1,510k (2013: CHF 0k).

The Group's credits are floating-rate credits, which exposes the Group to fluctuations in interest rates. It is

Group policy that all financing of working capital and investments in non-current assets take place at floating

interest rate.

*Information on fair value hierarchy is not relevant as the debt is subject to variable interest and no transaction

expenses have been paid.

2013

CHF '000

Repayment


< 1 year 1-5 years >5 years Total agreed amount value


Credit institutions 0 0 0 0 0 0 0

Payables to related

companies 87 0 0 87 0 87 87

Trade payables 83 0 0 83 0 83 83

Other short-term liabilities 340 0 0 340 0 340 340

Financial liabilities 510 0 0 510 0 510 510


Receivables from related

companies 39 0 0 39 0 39 39Trade receivables 0 0 0 0 0 0 0Other receivables 14 0 0 14 0 14 14

Cash at bank and in hand 355 0 0 355 0 355 355

Financial assets 408 0 0 408 0 408 408

Net cash outflow -102 0 0 -102 0 -102 -102

Unutilised credits 0 0

36



Exposure at 31 December 2014

Exposure at 31 December 2013

As the individual group companies primarily operate in their individual functional currencies, the Group’s profit

is primarily sensitive to changes in exchange rates due to intercompany accounts and receivables/ payables

denominated in other currencies than the functional currency.

CHF '000

Currency Bond, bank Purchase/

Payment/ and credit- sales Net

expiry Receivables Payables institutions orders position

USD < 1 year 113'462 -102'588 -13'598 9'370 6'646

USD > 1 year 0 -5'843 -36'756 0 -42'599

EUR < 1 year 24'727 -23'231 -7'362 -2'003 -7'869

EUR > 1 year 0 0 -1'707 0 -1'707

JPY < 1 year 1'187 -487 672 -11 1'361

SEK < 1 year 0 -1'181 1'233 0 52

SEK > 1 year 0 0 -82'536 0 -82'536

Other < 1 year 2'146 -3'599 -80 0 -1'533

141'522 -136'929 -140'134 7'356 -128'185

CHF '000

Currency Bond, bank Purchase/

Payment/ and credit- sales Net

expiry Receivables Payables institutions orders position

USD < 1 year 0 0 18 0 18

EUR < 1 year 37 -22 25 0 40

Other < 1 year 0 0 1 0 1

37 -22 44 0 59

37



Capital management

31 Related parties

Basis

Controlling interest

Poul M. Mikkelsen, Rebstockrain 16, CH-6006 Luzern Controlling shareholder

Ammon Ammon AG, Meierhofstrasse 5, FL-9490 Vaduz Ultimate parent company

PMM Holding (Luxembourg) AG, 5, rue Guillaume Kroll, Parent company

L-1882 Luxembourg

Other related parties

PMM Holding AG, Rebstockrain 16, CH-6006 Luzern Sister company

Dønnerup A/S, c/o Bech-Bruun Advokatfirma, Langelinie Allé 35 Sister company

DK-2100 København Ø

Transactions

A 10% increase in USD compared to the exchange rate at 31 December 2014 towards all other currencies will

entail a negative change of profit for the year before tax of CHF 3,595k (2013: CHF 0k) and a similar effect on

equity.

The Group's capital management is also partly governed by loan agreements which include requirements to

financial ratios. These financial ratios are affected by the size of the capital, that a reduction will reduce the

ratios.

The objective of the Group's capital management is to ensure the Group's ability to continue as a going

concern in order to yield return on investment to the shareholders and to create and maintain an optimal

capital structure in order to reduce the costs of capital and maintain a basis of continued growth in the Group.

Total capital makes up the equity shown in the consolidated balance sheet.

Purchases of management services amounted to CHF 643k (2013: CHF 0k) in financial year 2014.

A 10% increase in SEK compared to the exchange rate at 31 December 2014 towards all other currencies will

entail a negative change of profit for the year before tax of CHF 8,248k (2013: of CHF 0k) and a similar effect

on equity.

Besides intercompany transactions that have been elimiated in the Consolidated Financial Statements,

related party transactions comprise purchases of management services from the related company PMM

Holding (Luxembourg) AG.

38


31 Related parties (continued)

The Group has earned interest income of CHF 3k from PMM Holding AG (2013: CHF 0k).

All transactions have been effected on an arm's length basis.

Receivables from related companies

2014 2013

CHF '000 CHF '000

PMM Holding AG 0 2

TWIG Trading GmbH 0 37

0 39

Payables to related companies

Ammon Ammon AG 0 87

PMM Holding (Luxembourg) AG 181 0

181 87

32 Development costs

33 Post balance sheet events

There have been no material events after the balance sheet date.

The Group has charged management services in the amount of CHF 79k (2013: CHF 0k) to Dønnerup A/S.

Dønnerup A/S has charged rental expenses in the amount of CHF 62k (2013: CHF 0k).

Development costs for the year recognised in the income statement under production costs amount to CHF

741k in 2014 against CHF 648k in 2013.

39


34 Business Combination

Sontara was acquired as an asset purchase from DuPont and TWIG was acquired from a related party.

Acquired shares Acquisition date Acq. Price

CHF '000

Sontara, asset purchase 01.09.2014 50'323

TWIG SAS 100% 26.03.2014 314

TWIG Trading (Switzerland) GmbH 100% 26.03.2014 1'368

TWIG Trading GmbH 100% 26.03.2014 12'063

Sontara is disclosed as a stand alone business combination. TWIG SAS, TWIG Trading (Switzerland) GmbH

and TWIG Trading GmbH are disclosed as one business combination, TWIG.

Fair value on acquisition date Sontara TWIG Total

CHF '000 CHF '000 CHF '000

Patents 457 0 457

Trademarks 1'829 0 1'829

Know-how 1'828 0 1'828

Customer lists 457 0 457

Intantigble fixed assets 4'571 0 4'571

Fixed assets 22'525 20 22'545

Inventory 18'674 1 18'675

Accounts receivable 18'593 269 18'862


Long-term liabilities -943 0 -943

Accounts payable -11'904 -295 -12'199

Other short-term liabilities -1'861 -256 -2'117

Identifiable net assets 49'655 282 49'937

Goodwill 0 13'463 13'463

Acquisition price 49'655 13'745 63'400

Acquisition price is divided as follows:

Cash 49'655 13'745 63'400

Contingent consideration 0 0 0

49'655 13'745 63'400

Transaction costs included in special items 3'128 0 3'128

Fair values are translated from transaction currency to reporting currency with spot-rate as of the acquisition

date. Therefore, based on FX changes these values cannot be reconciled to the balance sheet as of

December 31, 2014.

In 2014, the Group performed an acquisition and a business combination of entities under common control,

whereby both are accounted for by the purchase method. The results of the acquired and combined

businesses are included in the consolidated financial statements as from the respective dates of acquisition.

40


34 Business Combination (continued)

Sontara

Description of acquired activities

TWIG

Description of acquired activities

Information on full-year net result effect from acquired activities

Due to the acquisition of Sontara being an asset purchase, the company is unable of calculating the full-year

net result.

Contribution to profit and loss for the year for each acquired business are disclosed in note 3.

As of 1 September 2014, the Sontara® business unit has been acquired from E.I. du Pont de Nemours and

Company and one or more of its Affiliates through an asset purchase and sale agreement. As part of the

acquisition, Jacob Holm will operate Sontara® assets in Asturias, Spain, and Old Hickory, TN, United States,

for which relevant authorizations and licenses have been received. Sontara® is a global nonwovens business

that produces products used in a variety of medical and specialty wipes applications. The acquisition is in line

with Jacob Holms strategy and will strengthen the Groups competitive position in the nonwovens industry. As

of April 2015, Sontara® has been fully integrated into the Group. The purchase price of CHF 50 million was

paid in cash and pertains mainly to net working capital (CHF 25 million), fixed assets (CHF 23 million) and

intangible assets (CHF 5 million). In 2014, the acquired business contributed revenues of CHF 65 million.

As of 26 March 2014, the TWIG Group, including TWIG Trading (Switzerland) GmbH, TWIG Trading GmbH

and TWIG SAS, has been acquired from PMM Holding (Luxembourg) AG through the acquisition of 100% of

the shares in each company. TWIG is the largest player within spunlace by-products for wipes, medical,

hygiene, automotive and specialized industrial applications. The acquisition enables the Group to expand the

marketing of spunlace by-products to all its manufacturing facilities in Europe and the US to the EMEA and

NAFTA regions. The purchase price of CHF 14.8 million was paid in cash and pertains mainly to goodwill

(CHF 13.5 million). A goodwill was recognized to reflect the Group´s access to customer contracts to generate

future earnings, the know-how around sorting, pricing and treatment of by-products, and the business

processes associated with value-adding activities for upgrading the product sold. In 2014, the acquired TWIG

Group contributed revenues of CHF 2.5 million.

41

PricewaterhouseCoopers AG, St. Jakobs-Strasse 25, Postfach, CH-4002 Basel, SwitzerlandTelefon: +41 58 792 51 00, Telefax: +41 58 792 51 10, www.pwc.ch

PricewaterhouseCoopers AG is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity.

Report on the Review ofFinancial statementsto the Board of Directors ofJacob Holm & Sons AGBasel

Introduction

We have reviewed the accompanying financial statements (balance sheet, income statement, cash flowstatement, statement of changes in equity and notes) of Jacob Holm & Sons AG for the period ended 31December 2014. The Board of Directors is responsible for the preparation and presentation of thisfinancial statements in accordance with International Financial Reporting Standards. Our responsibilityis to express a conclusion on this financial statements based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2400,statements r-

ily of persons responsible for financial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted in accordance with Interna-tional Standards on Auditing and consequently does not enable us to obtain assurance that we wouldbecome aware of all significant matters that might be identified in an audit. Accordingly, we do notexpress an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanyingfinancial statements have not been prepared, in all material respects, in accordance with InternationalFinancial Reporting Standards.

PricewaterhouseCoopers AG

Thomas Brüderlin Korbinian Petzi

Basel, 29 May 2015

Enclosure:

- Financial statements (balance sheet, income statement, cash flow statement, statement of changesin equity and notes)

Parent Company Income Statement 1 January - 31 December

Note 2014 2013

CHF '000 CHF '000

Revenue 2 3'362 2'377

Cost of goods sold 3 -23 -25

Gross profit 3'339 2'352

Sales and marketing expenses 3 -141 0

Administrative expenses 3 -3'858 -2'242

Operating profit -660 110

Other operating income and expenses 14 9

Profit before financial income and

expenses and special items -646 119

Special items, net 4 -1'275 0

Financial income 6 391 13

Financial expenses 7 -162 0

Profit before tax -1'692 132

Tax on profit for the year 8 -183 14

Net profit for the year -1'509 118

Parent company Statement of Comprehensive

Income 1 January - 31 December


Comprehensive income -1'509 118

43

Parent Company Balance Sheet at 31 December

AssetsNote 2014 2013 01/01 2013

CHF '000 CHF '000 CHF '000

Patents and trademarks 2'240 0 0

Software 23 0 0

Intangible fixed assets under construction 130 122 0

Intangible fixed assets 9 2'393 122 0

Other fixtures and fittings, tools and

equipment 486 203 276

Property, plant and equipment 10 486 203 276

Investments in subsidiaries 11 122'850 0 0


Deferred tax asset 13 185 0 0

Financial fixed assets 123'081 46 46

Non-current assets 125'960 371 322

Receivables from related companies 1'975 39 472

Corporation tax 4 0 0

Other receivables 1'468 14 13

Receivables 3'447 53 485

Cash at bank and in hand 368 355 251

Current assets 3'815 408 736

Assets 129'775 779 1'058

44

Parent Company Balance Sheet at 31 December

Equity and liabilitiesNote 2014 2013 01/01 2013

CHF '000 CHF '000 CHF '000

Share capital 14 250 100 100

Retained earnings 121'360 169 467

Equity 121'610 269 567

Loan due to related company 3'490 0 0

Non-current liabilities 3'490 0 0

Credit institutions 340 0 0

Trade payables 1'389 83 17

Payables to related companies 1'545 87 47

Corporation tax 0 35 45

Other payables 1'401 305 382

Current liabilities 4'675 510 491

Liabilities 8'165 510 491

Equity and liabilities 129'775 779 1'058

Contingent liabilities 17

Financial risks 18

Related parties 19

45

Statement of Changes in Equity, Parent Company

1 January - 31 December

Share Retained

capital earnings Total

CHF '000 CHF '000 CHF '000

Equity

Equity at 1 January 2014 100 169 269

Additions from contribution in kind 150 122'700 122'850

Comprehensive income for the year 0 -1'509 -1'509

Dividends 0 0 0

Equity at 31 December 2014 250 121'360 121'610

Equity at 1 January 2013 100 467 567

Comprehensive income for the year 0 118 118

Dividends 0 -416 -416

Equity at 31 December 2013 100 169 269

46

Parent Company Cash Flow Statement

Note 2014 2013

CHF '000 CHF '000


15 -278 75

Change in working capital 16 947 -12

-840 181

Financial income 391 13

Financial expenses -162 0

Corporation tax paid -42 -24

Cash flows from operating activities -653 170

Purchase of intangible fixed assets -32 -122

Purchase of property, plant and equipment -425 -3

Sale of property, plant and equipment 57 2

Acquisition of business combinations -2'286 0

Cash flows from investing activities -2'686 -123

Change in accounts with group companies 2'916 482

Change in accounts with related companies 96 -9

Dividend paid 0 -416

Cash flows from financing activities 3'012 57

Change in cash and cash equivalents -327 104

Cash and cash equivalents at 1 January 355 251

Cash and cash equivalents at 31 December 28 355

specified as follows:

Cash at bank and in hand 368 355

Credit institutions (current liabilities) -340 0

28 355

Adjustments of non-cash items

Cash flows from operating activities before financial income

and expenses and special items

47

Notes to the Annual Report, Parent Company

1 First time adoption of IFRS

This is the first annual report prepared in accordance with IFRS. Financial Statements were previously

prepared according to Swiss GAAP.

There are no differences between Swiss GAAP and IFRS in prior years and therefore no further first time

adoption effects according to IFRS.

2014 2013

CHF '000 CHF '000

2 Revenue

Royalty fee 0 96

Management fee 3'362 2'281

3'362 2'377

48


2014 2013

CHF '000 CHF '000

3 Expenses classified by type

Production costs 23 25

Distribution costs 0 0

Cost of goods sold 23 25



Other income and expenses -14 -9

Special items, net 1'275 0

5'283 2'258

Classified by type as follows:

Other external expenses 2'993 943

Staff expenses 2'147 1'239

Depreciation and amortisation 143 76

5'283 2'258

4 Special items, net

Special items, costs:

Integration costs regarding acquired businesses 1'044 0

Restructuring projects 231 0

1'275 0

Special items, are all external expenses.

5 Staff expenses

Wages and salaries 1'881 1'086

Pensions 97 75

Other social security expenses 169 78

2'147 1'239

Average number of full-time employees 7 5

Staff expenses are distributed on the individual cost groups as follows:



2'147 1'239

49


2014 2013

CHF '000 CHF '000

6 Financial income

Interest 0 6

0 7

Interest/commission intercompany accounts 391 0

391 13

7 Financial expenses

Interest/provision intercompany accounts 18 0

Interest 1 0

143 0

162 0

8 Tax on profit for the year

Current tax on profit for the year 0 14

Change in deferred tax -185 0

Adjustment tax previous years 2 0

-183 14

Tax on profit for the year is specified as follows:

Calculated 11% tax on profit for the year before tax -186 14

Tax effect of:

Adjustment of valuation deferred tax 1 0

Adjustment tax previous years 2 0

-183 14

Effective tax rate for the year 10.82% 10.61%

Exchange adjustments

Interest relates to loans received and payables measured at amortised cost.

Exchange adjustments

50


Intangible fixed

Patents and assets under

trademarks Software construction

CHF '000 CHF '000 CHF '000

9 Intangible fixed assets

2014

Cost at 1 January 0 0 122

Additions from business combination 2'286 0 0

Additions for the year 0 25 8

Disposals for the year 0 0 0

Cost at 31 December 2'286 25 130

Amortisation at 1 January 0 0 0

Amortisation for the year 46 2 0


Amortisation at 31 December 46 2 0

2'240 23 130

Amortised over 10-20 years 3-5 years

2013

Cost at 1 January 0 0 0

Additions for the year 0 0 122


Cost at 31 December 0 0 122

Amortisation at 1 January 0 0 0

Amortisation for the year 0 0 0


Amortisation at 31 December 0 0 0

0 0 122

Amortised over 10-20 years 3-5 years


December


December

51


Other fixtures

and fittings,

tools and

equipment3'351

CHF '000


2014

Cost at 1 January 845

Additions for the year 425

Disposals for the year -168

Cost at 31 December 1'102

Depreciation at 1 January 642

Depreciation and impairment losses for the year 95


Depreciation at 31 December 616

Carrying amount

at 31 December 486

Depreciated over 3-10 years

2013

Cost at 1 January 856

Additions for the year 3


Cost at 31 December 845

Depreciation at 1 January 580

Depreciation and impairment losses for the year 76


Depreciation at 31 December 642

Carrying amount

at 31 December 203

Depreciated over 3-10 years

52


11 Investments in subsidiaries

2014 2013

CHF '000 CHF '000

Cost at 1 January 0 0

Addition from contribution in kind 122'850 0

Cost at 31 December 122'850 0

12 Impairment test relating to investments in subsidiaries

2014 2013

CHF '000 CHF '000

Jacob Holm & Sønner Holding A/S, Denmark 122'850 0

122'850 0

The recoverable amount is based on the value in use at 31 December 2014.

The impairment test proved that there is no need for impairment of investments in subsidiaries.

The value in use is based on future expected cash flows on the basis of budgets and estimates approved by

Management for the financial year 2015. The value is primarily sensitive to the assumptions made regarding

contribution margin and discount rate used.

In the impairment test a discount rate of 8.1% and a growth rate in the terminal period of 1.6% have been

used.

At 31 December 2014, Management reviewed the carrying amount of investments in subsidiaries and

performed impairment tests as required. The carrying amount of investments in subsidiaries is distributed as

follows:

Share Ownership

capital Currency % Equity

'000 CHF '000

Jacob Holm & Sønner Holding A/S, Denmark 1'000 DKK 100% 60'545

60'545

53


2014 2013DKK '000 DKK '000

CHF '000 CHF '000

13 Deferred tax asset

Deferred tax at 1 January 0 0

Change in deferred tax, see note 8 185 0Udskudt skat pr. 31. december

Deferred tax at 31 December 185 0Deferred tax at 31 December

Deferred tax relates to:

Tax loss carry-forward 185 0

Non-current portion 185 0

2014 2013DKK '000 DKK '000

CHF '000 CHF '000

14 Share capital

Share capital has developed as follows:

1 January 100 100

Increase via contribution in kind 150 0

31 December 250 100

15 Cash flow statement - adjustments of non-cash items

Financial income -391 -13

Financial expenses 162 0

Depreciation, amortisation and impairment losses, including

losses and gains on disposals of intangible fixed assets and property,

plant and equipment 134 74

Tax on profit for the year -183 14

-278 75

16 Cash flow statement - change in working capital

Change in receivables -1'455 -1

Change in payables 2'402 -11

947 -12

54


2014 2013DKK '000 DKK '000

CHF '000 CHF '000

17 Contingent liabilities

As security for a bond issued by the Subsidiary, the Company is

guaranteeing 82'536 0

As security for the Bond issued by the Company, all shares

in direct and indirect subsidiaries have been pledged.

6'731 0

Obligations under rental agreements

Obligations under rental agreements break down as follows according to due date:

Minimum payments 2014 2013

CHF '000 CHF '000

0-1 year 112 91

1-5 years 449 252

>5 years 28 0

589 343

As security for credit institution, the Company has provided surety

with a maximum amount of

Obligations under rental agreements primarily comprise agreements entered into concerning the rent of office

space. The leases run until 2020 at the latest.

55


18 Financial risks

Credit risk

For a description of the credit risk, please see note 30 to the Annual Report of the Group.

Liquidity risk

For a description of the liquidity risk, please see note 30 to the Annual Report of the Group.

The analysis of due dates is stated on the basis of category and class broken down on due date. The

calculation of interest payments on floating-rate obligations is based on the interest rate on the balance sheet

date.

2014

CHF '000

Repayment


< 1 year 1-5 years Total agreed amount value


Credit institutions 340 0 340 0 340 340

Payables to group 1'364 3'490 4'854 0 4'854 4'854

companies

Payables to related companies 181 0 181 0 181 181

Trade payables 1'389 0 1'389 0 1'389 1'389

Other short-term liabilities 1'401 0 1'401 0 1'401 1'401

Financial liabilities 4'675 3'490 8'165 0 8'165 8'165


Receivables from group 1'975 0 1'975 0 1'975 1'975

companies

Other receivables 1'472 0 1'472 0 1'472 1'472

Cash at bank and in hand 368 0 368 0 368 368

Financial assets 3'815 0 3'815 0 3'815 3'815

Net cash outflow -860 -3'490 -4'350 0 -4'350 -4'350

56



Market risk

Interest on accounts with related companies are interest bearing.

Exposure at 31 December 2014:

*Information on fair value hierarchy is not relevant as the debt is subject to variable interest and no transaction

expenses have been paid.

The Company's currency used for payment is primarily CHF, USD and EUR. No financial instruments are used

to hedge positions in foreign currency.

2013

CHF '000

Repayment


< 1 year 1-5 years Total agreed amount value

Measured at amortised cost

Payables to related 87 0 87 0 87 87

companies

Trade payables 83 83 0 83 83

Other short-term liabilities 340 0 340 0 340 340

Financial liabilities 510 0 510 0 510 510


Receivables from related 39 0 39 0 39 39

companies

Other receivables 14 14 0 14 14

Cash at bank and in hand 355 0 355 0 355 355

Financial assets 408 0 408 0 408 408

Net cash outflow -102 0 -102 0 -102 -102

CHF '000

Bond, bank

Currency Payment/ Receivables Payables and credit- Net

expiry institutions position

USD < 1 year 16 -55 -108 -147

EUR < 1 year 356 -1'310 150 -804

SEK < 1 year 383 -181 0 202

Other < 1 year 0 0 1 1

755 -1'546 43 -748

57



Exposure at 31 December 2013:

Capital management

The objective of the Company's capital management is to ensure the Company's ability to continue as a going

concern in order to yield return on investment to the shareholders and to create and maintain an optimal

capital structure in order to reduce the costs of capital and maintain a basis of continued growth in the Group.

Total capital makes up the equity shown in the balance sheet.

A 10% increase in USD towards all currencies would mean a negative change in net position of CHF 15k

(2013: a positive change of CHF 2k) respectively, which would affect the profit for the year before tax and

corresponding impact on equity.

A 10% increase in EUR towards all currencies would mean a negative change in net position of CHF 80k

(2013: a positive change of CHF 4k), which would affect the profit for the year before tax and corresponding

impact on equity.

CHF '000

Bond, bank

Currency Payment/ Receivables Payables and credit- Net

expiry institutions position

USD < 1 year 0 0 18 18

EUR < 1 year 37 -22 25 40

Other < 1 year 0 0 1 1

37 -22 44 59

58


19 Related parties

Basis

Controlling interest

Poul M. Mikkelsen, Rebstockrain 16, CH-6006 Luzern Controlling shareholder

Ammon Ammon AG, Meierhofstrasse 5, FL-9490 Vaduz Ultimate parent company

PMM Holding (Luxembourg) AG, 5, rue Guillaume Kroll, Parent company

L-1882 Luxembourg

Other related parties

PMM Holding AG, Rebstockrain 16, CH-6006 Luzern Sister company

Dønnerup A/S, c/o Bech-Bruun Advokatfirma, Langelinie Allé 35 Sister company

DK-2100 København Ø

Transactions

Purchases of management services amounted to CHF 643k (2013: CHF 0) in financial year 2014.

All transactions have been effected on an arm's length basis.

Receivables from related companies

2014 2013

CHF '000 CHF '000

PMM Holding AG 0 2

Jacob Holm & Sønner Holding A/S 197 0

Jacob Holm Industries (Americas), Inc. 21 0

Sontara AG 1'757 0


1'975 39

The company has been charged management services in the amount of CHF 29k (2013: CHF 118k) from

Dønnerup A/S. Dønnerup A/S has charged rental expenses in the amount of CHF 8k (2013: CHF 46k).

Besides intercompany transactions that have been elimiated in the Consolidated Financial Statements, related

party transactions comprise purchases of management services from the related company PMM Holding

(Luxembourg) AG.

Further, the Financial Statements includes a financial income of CHF 391k from guarantee fee charges related

to the guarantee regarding the Bond issued by Jacob Holm & Sønner Holding A/S. The Company is

guaranteeing an amount of up to SEK 650m.

59


19 Related parties (continued)

Payables to related companies

2014 2013

CHF '000 CHF '000

Ammon Ammon AG 0 87

PMM Holding (Luxembourg) AG 181 0

Jacob Holm & Sønner A/S 3'779 0

Jacob Holm Industries (France) SAS 1'064 0


Twig Trading Switzerland GmbH 9 0

5'035 87

60

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