ANNUAL REPORT - Remei · new one. My handing over business responsibility ... Remei AG will primarily be in charge of sales, in . addition to its current responsibility for production

ANNUAL REPORTREMEI AG 2015/16

Publishing details

Board of DirectorsPatrick HohmannHelmut HälkerBeat Bernet

ManagementHelmut HälkerMarion Röttges (Deputy CEO)

Edited byRemei AGLettenstrasse 9CH-6343 Rotkreuz, Switzerlandphone +41 41 798 32 32fax +41 41 798 32 00

[email protected]

Managing editor: Martina Amsler, Remei AGProof-reading & translation: René MuhmenthalerDesign & layout: Tanja Gschwandl, Remei AGPicture editor: Tanja Gschwandl, Remei AGFotos: ©Naturaline, ©FLOCERT: Sala Lewis, ©Marius Born Printed by: Triner Media + Print

Cover: Naturaline by Melanie Winiger. In August 2015 Melanie Winiger has scheduled her fourth coup. After three successful women‘s collections for Coop Naturaline: her first collection for the trendy and eco-conscious man.

Deutsche Fassung? Einfach den Geschäftsbericht umdrehen!

ANNUAL REPORTREMEI AG 2015/16

August 2016

Every phase comes to an end one day, unless the forces of change are strong enough to trigger a new one. My handing over business responsibility to Helmut Hälker has brought to an end the phase of build-up. The bioRe® farming businesses are more stable today but continue to be faced with challenges every year. Markets tend to be difficult time and again, and went through stormy patches last year. Swiss suppliers had a particularly difficult time as exchange rates worsened dramatically within a single year. All the above could be ample reason to drop targets and find easier ways. Not in our case, though. Helmut Hälker and his team have taken up the challenge and added to and implemented the values Remei AG stands for, such as compliance with human rights. Over and beyond this, Remei AG has managed to win major customers. Against this background, we are confident in tackling the future even though we will have to step up investment in acquisitions next year.

Our foundation is solid because we probably are one of very few suppliers capable of delivering organic cotton from India free from any GMOs. This is a team achievement we are proud of.Dear shareholders, customers, suppliers, and staff, I would like to thank you very cordially for your support.

Patrick Hohmann, Chairman of the Board & Founder of Remei AG

CHAIRMAN’S EDITORIAL

TABLE OF CONTENTS

CEO’s report - Where the difference lies ............................................................................................... 2Outlook - How to make added value visible ........................................................................................... 3Financial result - No surprise: Stable financial situation ........................................................................ 4Staff - What we are connected by .......................................................................................................... 6bioRe® values - What ‘Respectful Organic Cotton’ means .................................................................... 7Risk and quality management - How we safeguard sustainable textile production .......................... 10

Farming - How we produce genuine organic cotton ............................................................................ 13Spinning - Where bioRe® cotton is spun into yarn ............................................................................... 17Ready-to-Wear - Increase in sales for more flexibility in the supply chain ............................................ 20Clients - What value is worth ............................................................................................................... 22

Financial statementsBalance sheet ....................................................................................................................................... 28Income statement ................................................................................................................................. 29Cash-flow statement ............................................................................................................................. 30Statement of change in equity ............................................................................................................... 31Notes to the financial statements ........................................................................................................... 32Proposed appropriation of available earnings ........................................................................................ 40Statutory auditor’s report....................................................................................................................... 42

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1720

22

2 Annual Report Remei AG 2015/16

More than a year has passed already since I took up office as Remei AG’s CEO. This company is embedded in a cultural variety of partnerships. I have paid great attention to absorbing, processing and structuring the views, needs and requirements of the various stakeholders.In the 2015/16 financial year, Remei AG’s business performance was subdued. Our room for manoeuvre did not allow for quick and effective transformation. Consequently I focused on examining promising approaches to market treatment, doing some collective thinking with my colleagues, and grasping opportunities. This helped open up some new avenues we want to embark on.

The market for trading and services companies is fiercely contested every day. Some service providers were faced with ruinous situations, and even established and traditional businesses engaged in vertical sourcing had to post considerable loss of revenue. Remei AG offers a wide range of services of added value to the retail industry and brands. So these services are worth their price. And yet, our unique selling proposition, i.e. the value of our work and our textiles, is being diluted by competitors. Marketing-driven competitors successfully advertise the largely unprotected concepts of ‘organic’ and ‘fair’ even though their chains of production would not meet our standards. For our business customers and, in particular, our end users, the difference between the bioRe® quality label and other supposedly sustainable initiatives often remains unclear. And this is what we must prevent by taking appropriate measures.

We need to reinforce the power of our business model and our philosophy. To this end, we have drafted a mission statement for sustainability

based on three pillars, i.e. organic cotton farming, social support for workers, and profitability. The well-being of bioRe® India and Tanzania is in the interests of both the bioRe® Foundation and Remei AG. Pursuing the objective of striking a sustainable balance between input and output (bioRe® cotton and farming vs. finished products, service, and retail) and expanding on it, Remei AG plays the role of network manager. Funding and process control across the bioRe® value chain are important drivers when it comes to maintaining this balance.

With a view to our mission based on human rights, we will define the right approach and principles. This is how human rights will penetrate the bioRe® values, objectives and processes yet more systematically and powerfully.

Taking these steps, we are filled with hope and confidence on our path towards a community of persons acting across the bioRe® value chain with courage, ownership and responsibility.

WHERE THE DIFFERENCE LIESCEO’s report

Helmut Hälker, CEO

3

HOW TO MAKE ADDED VALUE VISIBLEOutlook

Helmut Hälker, CEO

In the current financial year, we are implementing various communication measures aimed at making our services and their added value yet more easily understood for customers. This applies to both clothing and yarn. In an attempt to communicate to the outside world more convincingly, we want to give bioRe® priority over the Remei AG company name so as to make sure bioRe® is always the first point of contact for our stakeholders. In terms of content, we will clearly emphasize our unique added values such as full retraceability of our bioRe® cotton and ‘organic & fair’, strengthening the significance of those values by emotional communication. As far as human resources are concerned, we have not only added to our marketing and sales department but also created a situation enabling our sales and product managers to focus on their market segments.

In future, Remei AG will attach more significance to the yarn segment. We believe that an appealing yarn label is a strong selling proposition and, thus, an essential feature for our business-to-customer clients. In addition we will widen our yarn portfolio so as to be able to sell to markets beyond our traditional scope.

We will also attach more significance to the Naturaline brand as we are striving to internationalise the brand in a joint effort with COOP.

In the process of internationalise Naturaline, Remei AG will primarily be in charge of sales, in addition to its current responsibility for production and design, while COOP will continue to manage the brand. The ‘Naturaline international’ project is

designed to multiply the collection’s success in Switzerland at international level. Initially we are going to focus on German speaking countries and the Scandinavian market. We are currently planning on launching products in these markets and together with Coop we have already produced some communication material. Sales activities are due to begin a few weeks from now.

We believe that brands in particular will continue to show great potential. To many brands, our experience and great variety of services represent true added value. This is why we have stepped up sales activities in this field, in which we are expecting moderate growth.

In financial terms, 2016/17 is expected to require considerably higher expenditure at moderately higher sales, resulting in diminished profit.


In the 2015/16 financial year, Remei AG generated profit in the amount of CHF 547,138 which is in line with the average value over the past five years. The severe drought in Tanzania had a strong impact on production of organic cotton.

The 2015/16 financial result is in line with the average value over the past five years, with net profit slightly exceeding the average. Poor cotton crops in India and Tanzania turned out to be a special challenge in terms of yarn management and warehousing. Production of organic cotton in Tanzania suffered from an extraordinary event. The severe drought in Tanzania allowed for only a very small crop at relatively high cost. At the same time, organic-cotton farming in India steadily improved following the GMO case in 2013, but remained far behind output in 2013. The raw-cotton and yarn segments declined by 25% and 14% respectively.

In the 2014/15 financial year, we benefited from extraordinary Coop Naturaline revenues owing to the Naturaline anniversary. This was no longer the case in the past business year, which had a strong

impact on sales of both garments and yarn, and was a major driver of the decline of total sales of

21% down to CHF 18.3 m. The strong revaluation of the Swiss franc also contributed to the decline in sales.

In order to contain the impact on profit, we responded to such decline in sales by active cost management. As a result of the poor crops, farmer premiums decreased from CHF 549,100 to CHF 446,105. The resulting profit of CHF 547,138 was 26% below the prior year.

The assessment of the risks has been carried out, but showed no significant changes to the previous year. The order situation is at the same level as the previous year, as well as the number of full-time equivalents.

In appreciation of their commitment and the result produced, our employees receive a share of our profit in the amount of half a monthly salary.

NO SURPRISE: STABLE FINANCIAL SITUATIONFinancial result

Helmut Hälker, CEO

2011/12 2012/13 2013/14 2014/15 2015/16Diff. to prior

year (%)

Sales (CHF) 19‘824‘767 19‘709‘457 20‘684‘913 23‘033‘520* 18‘348‘809 -20%

Profit (CHF) 340‘976 -180‘161 277‘743 740‘603 547‘138 -26%

Product breakdown of total sales (CHF)

bioRe® cotton 20% 3‘525‘069 4‘592‘384 5‘377‘046 4‘978‘287* 3‘730‘870 -25%

bioRe® yarn 23% 5‘879‘839 6‘115‘972 5‘274‘220 4‘881‘797* 4‘179‘213 -14%

bioRe® garments 57% 10‘419‘859 9‘001‘101 10‘033‘647 13‘173‘436* 10‘438‘726 -21%

*Correction: Because we want to present the annual accounts in a transparent way, inventory change of not billed services as of accounting year 2015/16 will be reported in profit and loss account as separated positions. Up to now it has been declared as part of the turnover. The figures of the accounting year 2014/15 has been adapted accordingly. The other previous years which are reported in this annual report, have not been adapted.

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20%

23%

57%

bioRe® Baumwolle

bioRe® Garn

bioRe® Bekleidung

Product breakdown of total sales (%)

60%

7%

5%

2%

26%

Schweiz

Deutschland

Japan

Türkei

Diverse

Total sales by country (%)

-

5'000'000

10'000'000

15'000'000

20'000'000

25'000'000

2011/12 2012/13 2013/14 2014/15 2015/16

bioRe® Baumwolle

bioRe® Garn

bioRe® Bekleidung

Datenreihen4

Sales over time 2011/12 - 2015/16 (CHF)

Total sales by country

2011/12 2012/13 2013/14 2014/15 2015/16Diff. to prior

year (%)

Switzerland 10'080 11'170 11'232 12‘560 10‘945 -13%

Germany 2'050 1'349 1'255 1‘678 1‘339 -20%

Japan 651 1'162 905 1‘014 977 -4%

Turkey 18 1'188 985 1‘045 304 -71%

Various 7'026 4'841 6'308 6‘737* 4‘784 -29%

Total (TCHF) 19'825 19'709 20'685 23‘033* 18‘349 -20%

* Correction

bioRe® cotton

bioRe® yarn

bioRe® garments

Total

bioRe® cotton

bioRe® yarn

bioRe® garments

Switzerland

Germany

Japan

Turkey

Various


Remei AG’s employees share a mission and are proud to work towards completing it every day. This situation also inspires young persons to join Remei AG.

Humans and humanenessThe essential resources we need for our business include not only natural resources such as fertile soil and water, or state-of-the-art machinery for industrial processing of organic cotton, but also employees whose skills we need to promote in a sustainable manner. We believe that an employer can only be as good as the employees who contribute their energy, knowledge and talent, and identify with the objectives and actions of the company.Over the past five years, we have managed to build up a team of persons who take ownership and work autonomously, having fully adopted the bioRe® values and applying them naturally when taking decisions or action. We have a team of employees who have made themselves acquainted with their responsibilities, and enjoy the freedom of growing beyond the scope of their function.With a team of only 22, we provide the international supply chain with textiles that satisfy the highest

demands for quality, ecological compatibility and fairness. Humans and humaneness, marked by a shared mission: this is our core potential for a successful future as a powerful enterprise.*

Young persons joining the teamBeginning in August 2015, another young person has had the opportunity of getting basic vocational training with us and entering the business world. Mrs Melanie Iten is completing a three-year commercial apprenticeship with us. In January 2016, Mrs Salome Tscheulin joined our team as an assistant in Marketing. She provides all types of support to our marketing department and is in charge of office management.Mrs Kathy Bättig in office management and Mr Neeraj Sing, Supply Chain Manager/Cotton & Yarn, left the company at the end of August 2015 and the end of March 2016 respectively. We would like to thank these two employees very cordially for their work at Remei, and wish them all the best.* From the bioRe® magazine 02|15

2011/12 2012/13 2013/14 2014/15 2015/16

Number of staff 18 21 21 22 22

Full-time positions 11 14 14 13 13

Part-time positions 7 7 7 9 9

Full-time equivalent 15.2 18.1 18.2 19.3 19.9

Percentage of women (%) 83% 82% 81% 77% 82%

Number of staff departed 8 1 4 3 2

Number of staff joining 7 4 4 4 2

Average age 34.7 35.5 36.0 36.3 36.2

Average years of service 5.6 5.6 5.9 5.8 5.5

Days of absence for sickness 18 19 67 66 86.5

Average days of absence for sickness per person 1 1 3 3 4

Number of persons affected 10 11 13 15 14

Ratio between lowest and highest pay 4.1 4.4 4.9 4.6 3.8

Cost of further training CHF 10'133 8'107 22'804 14‘276 21‘346

As a percentage of total payroll 0.6% 0.5% 1.2% 0.60% 0.98%

Internal training courses 7 7 12 10 3

Internal training courses on SA8000 2 2 2 2 2

WHAT WE ARE CONNECTED BYStaff

Monika Bircher, Head of Finance, IT & Human Resources

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What is the essence of our philosophy and our actions? We really mean it as we are essenti-ally driven by respectful interaction with humans and nature in the production of textiles from organic cotton. Organic cotton from the bioRe® businesses in India and Tanzania, to be pre-cise. In order to safeguard long-term supply of the raw material that is fundamental to us, the bioRe® Foundation goes as far as to invest in seeds research. Thus our bioRe® values ranging from the core to delivery of finished textiles determine the way all partners work in the spirit of ‘respectful organic cotton’. Organic cotton: For healthy and self-determined living conditions for farmer families, and major biological diversity.bioRe® processes organic cotton from the bioRe® farming businesses in India and Tanzania. bioRe® farmers work their cotton fields in agreement with nature. They use natural fertilizer and pesticides made of farm-grown raw material, and preserve soil fertility by means of crop rotation.

Fair production: For respectful co-operation with farmer families and textile workers.bioRe® practices respectful co-operation with its partners across the entire value chain. Farmers receive from bioRe® a purchase guarantee and a premium on the conventional market price. Workers involved from ginning to sewing enjoy safe and fair working conditions.

Ecological and skin-friendly: For healthy skin and an intact environment. bioRe® and its subcontractors meet the highest degree of requirements in textile dyeing and printing. Dyeing and printing shops ensure monitored input management as well as monitored waste-water treatment, which helps protect the environment and the health of textile workers and consumers.

CO2-neutral: For climate protection.bioRe® offsets any CO2 emissions generated from farming through shipping to sewing by building biogas plants and efficient stoves for farmer families in the farming regions in India and Tanzania.

Retraceable back to farming: For closeness with those who have bought a particular piece of clothing. bioRe® fits each piece of textile with a traceability number. The bioRe® Traceability Tool serves to retrace the textiles online from sewing back to farming. This is made possible on the back of strong partnerships maintaining traceability during production by means of transparent and structured work procedures.

WHAT ‘RESPECTFUL ORGANIC COTTON’ MEANS

bioRe® values

Martina Amsler, Marketing & Product Manager Corporate Wear

Respectful Organic Cotton:

• Organic cotton• Fair production• Ecological and gentle on the skin• CO2-neutral• Traceable right back to farming


Farming 2011/12 2012/13 2013/14 2014/15 2015/16

Farming companies certified according to EU 834/2007 2 (100%)

2 (100%)

2 (100%)

2 (100%)

2 (100%)

Farming companies certified according to NOP standard 2 (100%)

1 (50%)*

1 (50%)*

1 (50%)*

1 (50%)*

Ginning plants certified according to EU 834/2007 2 (100%)

2 (100%)

2 (100%)

2 (100%)

2 (100%)

Total number of enrolled farmers 8‘341 7‘954 4‘877 5‘598 5‘924

Tanzania: farmers enrolled (incl. satellite project) 2‘808 2‘674 1'644 1‘896 2‘017

India: farmers enrolled (satellite project) 5‘533 5‘280 3‘233 3‘702 3‘907

Farmers’ premium (CHF) 630'410 620'190 465'298 549‘100 446‘105

Remei AG’s contribution to the bioRe® Foundation (CHF) 92'177 65'319 104'791 192‘200 140‘010

Other donations (CHF) 28'630 19'905 11'833 13‘460 13‘375

Industry

Number of production sites used 36 (100%)

36(100%)

41(100%)

33(100%)

31

Number of production sites certified according to SA8000 17 (47%)

16(44%)

20(49%)

13(39%)

16 (52%)

Number of production sites audited according to BSCI 10 (28%)

10(28%)

12(29%)

10(30%)

7 (23%)

Number of production sites in non-risk countries 1 (3%)

1(3%)

1 (2%)

1 (3%)

1 (3%)

Number of production sites yet unaudited (authorised exceptions) 8 (22%)

10 (28%)

9(22%)

10(30%)

8 (26%)

Output in SA8000-certified sewing works (% of sales) 83% 79% 79% 87% 94%

Output in SA8000-certified dye works (% of sales) 69% 75% 83% 74% 75%

Output in SA8000-certified knitting/weaving works (% of sales) 94% 95% 91% 74% 70%

SA8000-certified spinning mills (% of output) 100% 100% 88% 81% 88%

BSCI-audited spinning mills (% of output) 0% 0% 12% 19% 12%

SA8000-certified ginning (% of output) 46% 5% 12% 22% 30%

* Due to the crop failure in India only bioRe® Tanzania was certified

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CO2-neutrality 2011/12 2012/13 2013/14 2014/15 2015/16

CO2 emissions entire supply chain Remei AG 1 6'950 4'792 5'928 7‘269.1 5‘615

CO2 emissions Naturaline (without suppliers of Remei AG) 3'129 2'866 3'187 2‘598 2‘781

CO2 emissions production of bioRe® Cotton Inside 0 0 69 194.8 198

Total CO2 emissions (t CO2) 10'079 7'658 9'183 10‘062 8‘594

Total CO2 compensation (t CO2) 2 8'522 12'182 12'694 10‘781.6 8‘811

Goal achievement for carbon neutrality 84.6% 159.1% 138.2% 107.15% 102.52%

1 CO2 emissions entire supply chain Remei AG (Detailed calculation)

Quantity (t lint)

Emission factor (kg CO2 eq/kg lint) Data quality

CO2 emissions (t CO2eq)

bioRe® India Ltd. 444 2.0 ** 888

bioRe® Tanzania Ltd. 1‘422 0.2 ** 284.4

Farming and ginning total 1‘866 1‘172.4

Average emissions to produce 1 kg of lint (kg CO2 eq/kg lint): 0.6

Quantity (t yarn)

Emission factor (kg CO2 eq/kg yarn) Data quality


Eurotex IN 594 2.6 ** 1‘544.4

Sunflag TZ 97 1.6 * 155.2

Baltas TR 106 3.9 ** 413.4

RSWM (Mélange) IN 70 4.6 ** 322

Spinning total 867 2‘435

Average emissions to produce 1 kg of yarn (kg CO2 eq/kg yarn): 2.8

Quantity (t textile)

Emission factor (kg CO2 eq/kg textile) Data quality


Century IN 56.9 13.7 * 778.9

Utenos LT 58.6 9.6 *** 562.9

Wellknit IN 50.1 9.9 * 496.2

Kaytee IN 8.1 8.9 * 72.2

Andere 1.8 13.7 * 24

Industrial processing total 175.5 1‘934.2

Average emissions to produce 1 kg of textile (kg CO2 eq/kg textile): 11

Total energy consumption (kWh)

Energy (kWh/m2) Data quality


Consumption of electricity 28‘249 26.13 *** 0

Heating energy 28‘686 29.96 *** 9.1

Business trips (flights only) *** 62.4

Print media *** 1.6

Remei AG total 73.1

Data quality: * Uncertainty in excess of 20% | **Uncertainty between 10% and 20% | ***Uncertainty below 10%

2 Total CO2 compensation

on 1.04.2015Reduction/plant

(t CO2/plant*year)CO2 compensation

(t CO2)

Number of biogas plants 3‘277 2.25 7‘325

Number of efficient stoves (Tanzania) 424 3.39 1‘437

Total 8‘811


The bioRe® control system’s holistic approach is a courageous way of sustainable textile pro-duction building on co-operation with strong partners and enabling genuine process reliabi-lity.

Public attention continues to be focused on the conditions of industrial textile production and the obvious consequences of global trade and worldwide activities. Governments and companies find themselves under increasing pressure to deal with the problems resulting from global trade.The bioRe® control system is a holistic approach in the face of complex challenges in the global textile value chain, and it is a potential solution to the problems arising. On the long path from organic-cotton farming to finished garments, we co-operate with our long-standing partners in the industry, with each and every one of our partners making an essential contribution towards implementing our bioRe® values, i.e. organic cotton; fair production; ecological and skin-friendly; CO2-neutral; and retraceable back to farming.

We ensure continuous improvement and further development primarily by means of GMO monitoring in cotton farming, input and process inspections in the textile industry, and active promotion of human rights. Man and the environment constitute an inseparable unity both in farming and across the chain of textile production. This means we work towards both defending human rights and ensuring environmental protection and restoration of nature.

Full retraceability of bioRe® textiles satisfies demands from the retail trade and consumers for transparency with regard to finished textiles. Retraceability of our products is a logical consequence of our controlled input and supply-chain management. What does this mean? In many cases of conventional trading of textiles, suppliers management only starts with piece goods whereas we feed bioRe® organic cotton into the controlled bioRe® supply chain right from unprocessed fibres, and coordinate and monitor

inputs and outputs in every single process step. The bioRe® control system also covers technical product design by planning and anticipating inputs, processes and production units involved. This is how we are capable of consistently identifying potential offset early on, which enables us to choose appropriate solutions or introduce changes. This is precisely the holistic type of planning and control with which we secure sustainable production of bioRe® textiles. Our approach is based on a powerful network of genuine partners continuously meeting the requirements and mastering the challenges. In the past business year, our long-standing partners in the industry have continued to work with us towards achieving our shared objectives and introducing the necessary measures. In this value chain, Remei AG plays the role of network manager, which means that we reconcile customer requirements with the needs of production and our objectives.

In the past business year, we achieved good process reliability across the bioRe® supply chain. For example, we successfully completed initial environmental audits and waste-water samples for zero-discharge and Detox-campaign of Greenpeace analysis in the dyeworks in India and Lithuania.

HOW WE SAFEGUARD SUSTAINABLE TEXTILE PRODUCTION

Risk and quality management

Marion Röttges, Head Quality & Risk Management

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2011/12 2012/13 2013/14 2014/15 2015/16

Number of implemented production sites in bioRe® control system 48 (100%)

36 (100%)

41 (100%)

33 (100%)

31 (100%)

Number of production sites audited under bioRe® control system 26 (54%)

23 (64%)

32 (78%)

22 (67%)

21 (68%)

Number of production sites unaudited under bioRe® control system * 22 (46%)

13 (36%)

9 (22%)

11 (33%)

10 (32%)

Expenditure for bioRe® control system (labs, inspections, audits, cost of local monitoring of farming)

55‘435 38‘794 79‘914 105‘333 68‘138

Total control expenditure as a percentage of total sales 0.27% 0.20% 0.38% 0.46% 0.37%

Number of sessions of bioRe® Traceability Tool www.biore.ch 0 0 7‘946 11‘725** 12‘311

* Inspected and approved exceptions are subject to risk management and the process of continuous improvement.

** Correction

The bioRe® control systemThe bioRe® control system and its continuous management constitute the foundation for ensuring production in agreement with the bioRe® values. The system is fully operational across the entire value chain. The bioRe® control system includes bioRe® product specifications, input, quality and environmental management as well as traceability. Audits, lab tests, and process and product inspections are carried out based on the risks identified and the periods defined.


Why have you decided to go into bioRe®

organic farming? When I joined bioRe® in 1996, I thought I was a late-comer because I heard about other farmers who had joined as early as 1994 and were enjoying many benefits. My main aim is to protect the environment, and I appreciate the regular training I get in the fields of organic farming and seeds. Thanks to crop rotation, we can harvest maize, millet, peanuts, sweet potatoes, beans and pawpaws.

What are the benefits of co-operating with bioRe?bioRe® provides us with first-rate seeds at any time, and the soil has improved as a result of crop rotation. Thanks to the farmer premium, I can make essential investments: I started out with 25 cattle; today I have 58. I also doubled my sheep and goats to 100. Thanks to support from bioRe®, I was able to build a large house with an aluminium roof, and to add to the land I own.

What is your standard working day like?A normal working day is always well-planned and dependent on the season. When we prepare the

land for seeding and begin with it, we start out early in the morning and stay out on the field into the afternoon. When weeding, we spend the entire day on the field. At harvest time, we are on the field only in the morning because it gets too hot later in the day.

How do you spend your spare time?In my spare time, I like to relax at home and weave baskets to keep foodstuffs such as millet or maize in. Apart from that, I have 18 grandchildren. We play football or a local game hitting dried fruits (hard as stone) to and fro.

What do you wish to see changed in your life in the years to come?I would like to own more land and build a larger house for me, my 19 children and 18 grandchildren. I’m also planning to get more cattle and to continue with my children’s education. I think it is very important to give them a sound foundation for their future.

Portrait of a farmer

P. Shogolo, Farmer of bioRe® Tanzania

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P. Shogolo, Farmer of bioRe® Tanzania

The bioRe® farmers in Tanzania are faced with a severe drought while the market in India continues to be dominated by GMO seeds. The bioRe® Foundation supports farmer families in both countries, securing production of genuine organic cotton.

bioRe® TanzaniaFrom March to April 2015, there was no rain in Tanzania despite all the hopes for the one thing agriculture depends on fundamentally. The drought caused not only a poor cotton crop but also scarcity of food among farmer families, putting their health at risk. In this difficult period of time, the bioRe® Foundation was able to make available one bag of maize to all farmers at half the sales price thanks to numerous donors.As a result of the small crop in Tanzania, Remei AG was faced with bottlenecks in delivering products. For this reason, the company was granted extraordinary permission to purchase additional organic cotton from Biosustain, an organisation of Tanzanian producers of organic cotton, upon a comprehensive check.The current situation is promising. More than 1,100 bioRe® farmers have received the new UKM08 seed. Consistent application of methods of organic farming as well as line sowing have contributed to a promising crop. In optimum weather conditions, we can expect to get the largest crop in five years.

bioRe® IndiaThe bioRe® Foundation has managed to bring down contamination with GMO seeds in India to approx. 1%, which is a good result in an environment in which GMO cotton is grown on up

to 96% of cotton-farming surfaces. Such a result can be achieved only through implementation of a comprehensive control system that is subject to regular optimisation. The control system intervenes in three stages: regarding input, during farming, and following the harvest.bioRe® India Ltd. purchases seeds directly from manufacturers providing guarantees of GMO absence. Additionally, bioRe® India Ltd. carries out GMO tests. Farmers make exclusive use of these seeds for organic farming. Seed volumes per farmer are distributed according to farming surface areas. In a second step, all farmers are subject to regular monitoring. Finally, all cotton delivered by any farmer is tested for GMO before bioRe® India Ltd. concludes the purchase. This accounts for a full inspection of incoming organic cotton. Thanks to continuous monitoring and direct purchasing, we can keep a precise documentation of seed volumes, farmed surface areas, crops and sales by bioRe® India Ltd. Furthermore, bioRe® India Ltd. makes sure that there is no contact between bioRe® cotton and cotton from other origins. Along the same lines, the ginning plant processes bioRe® cotton only.We are pleased to note that bioRe® India Ltd. is building its own ginning plant planned to be inaugurated in November 2016.

HOW WE PRODUCE GENUINE ORGANIC COTTON

Farming

Markus Kunz, Supply Chain Management

2011/12 2012/13 2013/14 2014/15 2015/16

bioRe® India

Farmers enrolled (incl. satellite project) 5'533 5'280 3'233 3‘702 3‘907

Output of seed cotton (t) 4'660 0 1'138 1‘897 2‘293

Output of cotton lint (t Lint) 1'537 0 390 647 796


bioRe® Tanzania


Output of seed cotton (t) 5'413 8'829 9'115 6‘565 4‘986

Output of cotton lint (t Lint) 1'840 2'984 2'487 2‘310 1‘827


Total number


Output of seed cotton (t) 10'073 8'829 10'253 8‘462 7‘279

Output of cotton lint (t Lint) 3'377 2'984 2'877 2‘957 2‘623

Number of staff 151 141 104 109 112


With a view to ensuring availability of non-GMO seeds for organic farming in India, a team of the bioRe® Foundation has conducted research into suitable seeds in co-operation with FiBL, the Research Institute of Organic Agriculture, and the University of Dharwad in India since 2010. We are receiving little support from local authorities, certification agencies and competitors for our efforts for the benefit of true organic cotton in India. And yet, the continuous progress of our research efforts inspires us with confidence working towards a GMO-free future together with our loyal bioRe® farmers.

0

1'000

2'000

3'000

4'000

5'000

6'000

7'000

8'000

9'000

2011/12 2012/13 2013/14 2014/15 2015/16

Insgesamtregistrierte Bauern

bioRe® farmers over time 2011/12 - 2015/16

Total number of bioRe® farmers enrolledIndia: bioRe® farmers enrolled

Tanzania: bioRe® farmers enrolled

15

51%

27%

8%

8%

6%

Indien

Schweiz

Deutschland

Türkei

Diverse

Sales of bioRe® cotton by country (%)

Purchase and sale of bioRe® cotton

2011/12 2012/13 2013/14 2014/15 2015/16Diff. to prior

year (%)

bioRe® Tanzania 2'842 4'484 4'386 4‘171 2‘992 -28%

Sunflag 108 99 126 75 52 -31%

Various 43 53 186 108 144 33%

Total purchase (TCHF) 2'994 4'636 4'697 4‘354 3‘188 -27%

Eurotex IN 0 624 1'299 2‘029 1‘787 -12%

Reinhart CH 0 2‘596 1‘678 997 988 -1%

Baltas TR 0 533 965 864 304 -65%

Pelz DE 0 0 0 89 219 146%

Various 3‘525 839 1‘435 999 433 -57%

Total sales (TCHF) 3'525 4'592 5'377 4‘978 3‘731 -25%

Sales by country (TCHF)

India 1'275 624 1'636 2‘451 1‘891 -23%

Switzerland 157 2‘756 1‘679 998 988 -1%

Germany 214 151 89 93 308 231%

Turkey 0 533 785 1‘044 304 -71%

Various 1‘879 528 1'188 329 240 -39%

India

Switzerland

Germany

Turkey

Various


When did you join Eurotex, and what are your responsibilities? I joined Eurotex in 1989. My main responsibilities include planning, executing and monitoring yarn production.Spinning yarn from organic cotton, we need to take into account special things such as labelling and retraceability throughout the entire process. In case of a complaint, we are able to identify the yarn and the individual steps of its production. Retraceability activities enable us to strictly distinguish between organic and conventionally farmed types of cotton. Such variety of tasks makes my job exciting and challenging.

What is your working day like? On most days, I have to enter and check machine settings. Sometimes, I have to remedy a congestion or some other machine trouble. Depending on the situation, I may need to react spontaneously. On a given day, we may be producing Nm 50* yarn when an urgent order for Nm 80 yarn comes in requiring fast response and a machine adjustment to satisfy the customer request.

What do you like about your work?To be faced with challenges every day, and to look for solutions. It is very gratifying to me to be assigned difficult tasks and to master them successfully.

What are the challenges you need to master?We are required to meet production and delivery deadlines according to plans, and to safeguard product quality. This means we need to review customer expectations regularly and assess to what extent we can meet them. We do this on the basis of either one-off complaints or general feedback from purchasers.

What do you wish to see changed in your life in the years to come?I want to achieve my personal and business objectives and lead a happy and balanced life.

*Nm stands for ‘Number metric’ and indicates how many metres of a single yarn weigh 1 gramme

Portrait from spinning

S.B. Kulkuarni, Spinning Foreman Eurotex, India

17

S.B. Kulkuarni, Spinning Foreman Eurotex, India

The past year confirmed that we had chosen the right subcontractor strategy in 2013/14. The production site in Turkey raised its performance again to become a significant partner of ours.

Baltas, Turkey Great flexibility, good quality and very good service make Baltas a good supplier. We slightly increased yarn production last year. To us, Baltas is becoming more of a strategically important partner with whom we are going to intensify co-operation.

Eurotex, IndiaOnce more, Eurotex turned out to be a very reliable partner last year, enabling us to overcome production bottlenecks. Eurotex also provided crucial support in getting BLP, our smaller partner spinning mill, SA8000-certified within six months.

Sunflag, TanzaniabioRe® production decreased slightly. Sunflag is confronted increasingly with price and quality

issues. The challenges are due to very high energy cost on the one hand and frequent power failures in production on the other.

RSWM, IndiaRSWM, a ‘speciality’ spinning business, provides us with small quantities of melange and flame yarns. RSWM offers a great variety of innovation in the yarn range. Together with our garments unit, we want to look into RSWM’s interesting novelties in the year to come.

Otto, GermanyOtto Dietenheim is going to spin Ne 50/1 and Ne 60/1 yarns for us for the first time ever. We intend to maintain this co-operation and look into more possibilities.

Yarn output

2011/12 2012/13 2013/14 2014/15 2015/16

Eurotex IN 0 0 225'942 423‘526 407‘616

Baltas TR 0 0 142'141 186‘539 114‘347

Sunflag TZ 311‘897 299‘845 426‘529 271‘092 86‘394

RSWM IN 0 0 36‘160 49‘180 35‘076

bioRe® India Ltd. 704‘383 571‘070 104‘462 26‘901 0

Total (kg) 1'016'280 870'915 935'234 957‘238 643‘433

Tanzania’s share 31% 34% 46% 28% 13%

WHERE BIORE® COTTON IS SPUN INTO YARNSpinning

Simon Hohmann, Product & Supply Chain Manager Cotton & Yarn


Purchase and sale of bioRe® yarn

2011/12 2012/13 2013/14 2014/15 2015/16Diff. to prior

year (%)

Eurotex IN 0 0 1'064 1‘813 1‘676 -8%

Baltas TR 0 0 550 869 481 -45%

Sunflag TZ 1‘313 1‘348 1‘751 1‘107 364 -67%

RSWM IN 0 0 243 353 236 -33%

Various 3‘591 2‘875 702 469 534 14%


Panoco JP 577 1'148 906 964 926 -4%

Far East Knitting BD 725 406 419 596 633 6%

Utenos LT 534 850 1'005 737 563 -24%

Erko-Textil DE 117 99 416 409 282 -31%

Various 3‘927 3‘612 2‘528 2‘175 1‘775 -18%

Total sales (TCHF) 5'880 6'116 5'274 4‘881 4‘179 -14%


Germany 1'031 837 915 932 728 -22%

Lithuania 534 850 873 869 563 -35%

Japan 577 1'148 857 1‘014 926 -9%

Switzerland 665 346 411 300 477 59%

Various 3'072 2'934 2'218 1‘766 1‘485 -16%

Sales of bioRe® yarn by country (%)

17%

14%

22%11%

36% Deutschland

Litauen

Japan

Schweiz

Diverse

Germany

Lithuania

Japan

Switzerland

Various

19

When did you join Wellknit Industries, and what are your responsibilities? I have worked as an inspector for Wellknit Industries since 2006. I check the pieces of clothing according to our quality requirements.

What do you like about your work?I like the pleasant working climate in which health and safety are very important factors. There is a variety of training courses we can attend, such as first aid, fire-fighting exercises, or health and safety. These courses help us to add to our knowledge and also benefit from it outside work.

What is your working day like? Each day begins with strict planning. In the morning, I take care of my family before going off to work. At work, I need to be very cautious safeguarding the quality of the materials. When I discover a mistake, I trace it back to production and will respond spontaneously depending on the situation.

What are the challenges you need to master?We encourage each other to achieve our goals within our production deadlines. The biggest challenge is not to lose our drive for perfection under pressure for time.

How do you spend your spare time?I like staying at home and watching television. On most holidays, such as Vesakha*, we celebrate in a big family gathering.

What do you wish to see changed in your life in the years to come?I want to make sure my son can go to college. And I want to collect jewellery and precious stones for my daughter’s wedding.

* Vesakha is the most important Buddhist holiday. It commemorates the birth, enlightenment (Nirvana) and death (Parinirvana) of Buddha and thus Buddha’s exiting the cycle of rebirth (Samsara).

Portrait from ready-to-wear

R. Shanti, Inspector Wellknit Industries, India


A difficult economic situation resulted in a decline in ready-to-wear sales. However, measures have already been taken to raise the volume of orders.

A generally difficult situation in the Swiss economy has not failed to have an impact on Remei AG. We posted a decline in piece numbers and sales in the ready-to-wear business. The main reasons are less sales in the textile trade of our existing customers. However, we managed to win new customers whose initial orders in the year under review were still of low volume.

The decreasing volumes led to restrictions in the supply chain involved. For example, we renounced

on an additional certified dyeing shop, which diminished our subcontractors’ flexibility and increased the risk of delays.

To counteract this downward trend, we have taken measures aimed at increasing ready-to-wear sales. We are confident that these measures will be effective and bring about first improvements in the new financial year.

Purchase of bioRe® garments

2011/12 2012/13 2013/14 2014/15 2015/16Diff. to prior

year (%)

Utenos LT 2'276 2'199 3'168 3‘657 2‘658 -27%

Wellknit IN 2'018 1'690 1'492 2‘056 1‘922 -7%

Century IN 0 9 804 1‘963 1‘259 -36%

Kaytee IN 444 281 101 167 265 59%

Sunflag TZ 27 10 14 262 0 -100%

Various 906 463 224 370 212 4%


Purchase by country (pieces)

India 904'226 721'147 584'773 869‘030 697‘314 -20%

Lithuania 283'209 280'512 375'159 415‘349 343‘345 -17%

Tanzania 7‘580 2‘810 3‘925 56‘128 0 -100%

Various 10‘720 16‘530 400 1‘027 52 -93%

INCREASE IN SALES FOR MORE FLEXIBILITY IN THE SUPPLY CHAIN

Ready-to-Wear

Markus Kunz, Supply Chain Management

21

When did you join Coop? In 1997. What is your co-operation with Remei AG focused on? I think that the combination of organic-cotton farming with the variety of social benefits in the bioRe® businesses in India and Tanzania really is the core of our partnership. It’s what makes Naturaline unique. What are the benefits of co-operation with Remei AG? Together with Remei AG, Coop has completed pioneering work and developed an entirely new market. Today, Naturaline means around 500 models made of organic cotton, from basics through T-shirts and men’s shirts to seasonal and trendy fashion. What challenges will the near future bring? Sustainable services are the engine for future growth. As Coop invested in this market early on, it is no surprise that Coop has been rated

the world’s most sustainable retailer. Coop is going to continue to meet the demands for these products that have become widely accepted in the meantime. What does the Naturaline brand mean to you personally? I’m fascinated with the social history of Naturaline. Whether we are talking about training in organic farming, self-help groups or the building of schools, Naturaline has been an all-encompassing and sustainable approach for Coop. No label is more consistent than ours. For nearly 20 years, we have been committed to environmentally and socially compatible production, demonstrating that it is perfectly possible to enjoy life and be sustainable all at the same time.

Portrait from retail

P. Wyss, Marketing and Procurement Manager Coop, Switzerland


Values are the talk of the town. At the same time, reasonably priced textiles made in a sustainable manner are to found ever more frequently. This is a challenging situation in the fashion market.

‘Ecological’ is a big catchword, today and for the future. It is mentioned every day, in the media and in consumer debates. Textiles made from organic cotton are now available at the POS everywhere, from discounters to premium brands. They have become a main advertising item. The 2015 issue of our bioRe® magazine was devoted to the question of what value is worth, very much hitting the zeitgeist of the challenges retail and brand companies are faced with. In the segment of sustainable textiles, we have never had a debate on values like this, nor as much competitive pressure from European and Far-Eastern suppliers as today. Like never before, we have been challenged in our daily activities to persuade existing and prospective customers of the difference between bioRe® and other standards.

Even though the claim of sustainability is spreading, what consumers want first and foremost is fashion at a good price. The big players in the industry realised a long time ago and have begun to offer a wide range of reasonably-priced textiles made in a sustainable manner. Of course, there is black sheep among the suppliers, hiding behind an ‘ecological’ façade for marketing purposes. Strictly speaking, ‘greenwashing’ would be a more appropriate term for what they do.

But then there are many positive examples of companies that really mean what they say, reconciling contemporary design with respect for man and the environment.

Many retailers have allocated more space at the POS to green fashion across the board. Kastner&Öhler, an Austria ‘house of experience’, creates entire theme islands devoted to green fashion, the idea being that customers look for styles first before seeing the added value. Ecological fashion is a USP for fashion houses trying to come up with something special, but only at the right look and price-performance ratio. At the same time, brands and houses of experience want to continue to place orders monthly and get the merchandise delivered fast to the POS. This is a challenge for a consistently sustainable supply chain such as bioRe® because our flexibility is diminished by our control system and the limited number of our subcontractors.

Despite these circumstances, we regularly experience customers realising how unique the bioRe® philosophy is and what our values really are. For example, we have won Galeries Lafayette and Gerry Weber as new customers, and this inspires us with optimism going into the new business year.

WHAT VALUE IS WORTHClients

Diane Gerth, Product Manager Brands

23

Sales bioRe® garments

2011/12 2012/13 2013/14 2014/15 2015/16Diff. to prior

year (%)

Coop Switzerland CH 7'284 6'813 8'120 9‘541 8‘062 -16%

Mammut CH 1'753 1'096 939 1‘471 1‘259 -14%

Grüne Erde AT 34 295 461 641 453 -29%

Globetrotter DE 208 104 130 82 107 30%

Various 1'141 693 384 1‘438 558 -61%

Total sales (TCHF) 10‘240 9‘001 10‘034 13‘173 10‘439 -21%


Switzerland 9'224 8'036 9'100 11‘109 9‘460 -15%

Austria 34 295 466 660 453 -31%

Germany 804 361 247 650 297 -54%

Various 358 309 221 754 229 -70%

77%

12%

4%

1%

6%

Coop Schweiz CH

Mammut CH

Grüne Erde AT

Globetrotter DE

Diverse

Sales bioRe® garments by customers (%) Sales bioRe® garments by countries (%)

91%

4%3%

2% Schweiz

Österreich

Deutschland

Diverse

Coop Switzerland CH

Mammut CH

Grüne Erde AT

Globetrotter DE

Various

Switzerland

Austria

Germany

Various


Department Stores: Galeries Lafayette as new client of bioRe®

Helmut Hälker, CEO

Brands: It’s a long haul in a short-lived business

Diane Gerth, Product Manager Brands

Our co-operation with luxury department store Galeries Lafayette testifies to the potential of the Department Stores target group. In the 2015/16 financial year, we managed to win Galeries Lafayette as a new customer. The ‘Fashion Integrity by Galeries Lafayette’ collection will be available under its private label in 60 stores from 24 August 2016. The styles stand out for simple and modern design. Galeries Lafayette is particularly interested in the retraceability of styles and aims to build up a retraceability system of their own. We will provide support and develop a joint solution in close co-operation with the persons in charge at Galeries Lafayette. Such advisory service could be additional future business for us.

At the same time, we have built up a comprehensive database including prospective department stores in the German-speaking and Scandinavian markets. However, Galeries Lafayette has tied up a great deal of our capacity for the Department Stores target group, which is why we have not taken any other measures to acquire more customers.

Based on our new target-group strategy, we have terminated our joint venture with Ragman for distribution of a privat label.

Against the background of the debate on values and price, we were able to persuade new companies, such as Maloja, an outdoor and lifestyle brand, or consignors Waschbär (Triaz Group) and Helvetas, of the bioRe® values in the past business year. Also we were able to increase sales, e.g. with Globetrotter, on a small scale. However, we did not succeed in satisfying such customer needs as small-volume orders at appealing prices. As a result, we lost some business to competitors, such as in the case of elkline and Grüne Erde. The question is always the same: how much is a piece of bioRe® textile worth to me compared to a piece that meets other standards? As a brand manufacturer or retailer, how much of my margin am I ready to give up for the benefit of sustainable production? Given the difficult market setting in the textile segment (sales

decreases of up to 20-30%, high inventories, consumers buying outside Switzerland etc.), the challenges for brand and retail companies are not going to ease. Nevertheless, we are optimistic about the new business year as we have won new brand and retail companies such as Gerry Weber for bioRe® production. Consistent market treatment with a view to winning new customers is bearing fruit and makes us convinced that the genuinely sustainable value of bioRe® is going to make the difference. However, we must not forget that, on average, it takes one year from the first acquisition talk to the first booking of sales with a new customer. So we need enough stamina in this short-lived business.

25

Corporate Wear: Who needs T-shirts, min. 400 pieces in 3 months?

Martina Amsler, Marketing & Product Manager Corporate Wear

Coop Naturaline: A strong and successful partnership

Carmen Blättler, Head of Key Account Management & Product Manager Coop Naturaline

In the middle of the 2015/16 financial year, we decided to consistently treat the Corporate Wear market. In the meantime, we have defined a firm range of nine essential styles as well as the internal processes for production. The product range includes unisex, men’s and ladies’ styles such as round and V-neck T-shirts, hoodies, polo shirts and long-sleeves. Customers pick the styles and colour of their choice and define prints and embroideries if they wish to do so. Utenos Trikotazas, our long-standing subcontractor, takes care of production.In various acquisition talks with well-known major companies, we had the opportunity of mirroring our offer and identifying the needs of prospective customers. The conclusion is that we will have to offer partial orders below our minimum order

volume even in case of large order volumes, and this as quickly as possible. The more quickly we move, the safer the orders. It may turn out to be important for us to build up stocks in Switzerland. Based on market feedback, we addressed prospective customers with a long-term planning horizon and high order volumes such as festivals and NGOs. Doing so, we have initiated measures to draw the attention of prospective customers. Building customer awareness of us in this market will be crucial and it will require our full attention. We are confident that the measures will bear fruit in the coming business year.

Carmen Blättler, Head of Key Account Management & Product Manager Coop Naturaline

In 1995, Coop fully adopted organic cotton to its Naturaline brand. At the time, hardly anyone would have thought that this brand was going to be successfully established in the Swiss market within 20 years. Initially, the collection was subsidised to get it off the ground and draw awareness and attention in the fiercely contested textile market. By now, Naturaline has evolved into Switzerland‘s most well-known sustainable brand achieving constant growth on the back of innovation.

In partnership with Coop‘s procurement team, Remei AG managed to maintain sales at the same level as in 2013/14. We consider this a success given the fierce competition in a fast-paced textile market. Unfortunately, we were unable to match

the extraordinary sales increase resulting from the 20-year anniversary in 2014/15, but some novelties in the Naturaline range will serve to secure sales volumes in the long run.For example, Coop launched a great collection for trendy and environmentally aware men on 1st September, following three successful ladies‘ collections by Melanie Winiger. “Naturaline by Melanie Winiger is meant for fashion lovers with a style of their own and for those who care about the environment and working conditions of others,” Melanie Winiger says.In an attempt to raise yet more awareness of sustainability in the textile market and in society, we are working with Coop and Naturaline to develop an approach towards internationalising the Naturaline collection. We are highly motivated by the prospect of our continued partnership with Coop.


27

Balance sheet ....................................................................................................................................... 28Income statement ................................................................................................................................. 29Cash-flow statement ............................................................................................................................. 30Statement of change in equity ............................................................................................................... 31Notes to the financial statements ........................................................................................................... 32Proposed appropriation of available earnings ........................................................................................ 40Statutory auditor’s report....................................................................................................................... 42

FINANCIAL STATEMENTS


reporting year previous year

in CHF No. 31.03.2016 31.03.2015

Cash and cash equivalents 856'477.69 560'805.12

Trade accounts receivable 1 3'374'319.45 3'466'832.46

Advance payments to suppliers 2 2'722'734.57 2'241'431.90

Other short-term receivables 69'206.36 111'538.38

Inventories 3 1'574'226.00 1'994'427.75

Unbilled services 108'000.00 98'805.00

Prepaid expenses 104'867.52 119'462.57

Current assets 8'809'831.59 8'593'303.18

Property, plant and equipment 5 2'198'227.00 2'303'816.00

Financial assets 4 687'435.76 786'460.56

Intangible assets 6 18'177.00 22'131.00

Non-Current assets 2'903'839.76 3'112'407.56

TOTAL ASSETS 11'713'671.35 11'705'710.74

Short-term financial liabilities 2'838'270.00 2'812'636.00

Trade accounts payable 7 237'719.40 488'767.96

Other short-term liabilities 82'413.12 79'431.25

Accrued expenses 635'635.90 682'380.69

Short-term liabilities 3'794'038.42 4'063'215.90

Long-term financial liabilities 9 1'000'000.00 1'000'000.00

Long-term liabilities 1'000'000.00 1'000'000.00

Share capital 1'800'000.00 1'800'000.00

Retained earnings 5'119'632.93 4'842'494.84

Shareholders' equity 6'919'632.93 6'642'494.84

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

11'713'671.35 11'705'710.74

BALANCE SHEET

29


in CHF No. 2015/16 2014/15

Net sales 10 17'912'925.82 22'431'658.46

Other operating income 131'636.89 129'788.89

Income 18'044'562.71 22'561'447.35

Change of inventory of unbilled services 9'195.00 98'805.00

Operating income from sales 18'053'757.71 22'660'252.35

Cost of goods sold 11 -13'462'309.39 -17'256'787.64

Farmers’ premium 11 -446'105.23 -549'099.66

Gross profit 1 4'145'343.09 4'854'365.05

Personnel expenses 12 -2'694'337.42 -3'074'261.55

Gross profit 2 1'451'005.67 1'780'103.50

Depreciation on property, plant and equipment 13 -149'512.66 -160'681.81

Amortisation on intangible assets 13 -16'231.98 -14'764.27

Other operating expenses 14 -447'926.58 -462'700.60

Operating profit 837'334.45 1'141'956.82

Financial expenses -129'132.07 -166'542.72

Financial income 75'363.85 81'741.08

Ordinary profit 783'566.23 1'057'155.18

Extraordinary profit 15 -140'010.44 -192'200.00

Net profit before taxes 643'555.79 864'955.18

Taxes -96'417.70 -124'352.01

NET PROFIT FOR THE YEAR 547'138.09 740'603.17

INCOME STATEMENT



in CHF No. 2015/16 2014/15

Net Profit / Loss 547'138.09 740'603.17

Depreciation and amortisation 13 165'744.64 175'446.08

Value adjustment of financial assets 4 2'444.80 -7'256.09

Increase/decrease in trade accounts receivable 1 92'513.01 -311'482.99

Increase/decrease in advance payments to suppliers 2 -481'302.67 -41'439.47

Increase/decrease in other short-term receivables 42'332.02 43'907.32

Increase/decrease in inventories 3 420'201.75 -895'793.28

Increase/decrease in unbilled services -9'195.00 0.00

Increase/decrease in prepaid expenses 14'595.05 -12'837.95

Increase/decrease in trade accounts payable 7 -251'048.56 -166'078.55

Increase/decrease in other short-term liabilities 2'981.87 956.51

Increase/decrease in short-term provisions 8 0.00 -10'000.00

Increase/decrease in accrued expenses -46'744.79 179'627.33

Cash flow from operating activities 499'660.21 -304'347.92

Investment in property, plant and equipment 5 -58'738.47 -96'988.92

Divestment of property, plant and equipment 5 14'814.81 23'611.11

Investment in financial assets 4 0.00 -388'040.00

Divestment of financial assets 4 96'580.00 5'820.60

Investment in intangible assets 6 -12'277.98 -21'263.98

Cash flow from investing activities 40'378.36 -476'861.19

Dividend payments -270'000.00 -108'000.00

Increase/Repayment of short-term financial liabilities 25'634.00 838'436.00

Disposal of treasury shares 0.00 82'931.00

Cash flow from financing activities -244'366.00 813'367.00

Change in cash and cash equivalents 295'672.57 32'157.89

Statement of cash and cash equivalents

Cash and cash equivalents as of April 1st 560'805.12 528'647.23

Cash and cash equivalents as of March 31st 856'477.69 560'805.12

Change in Cash and cash equivalents 295'672.57 32'157.89

CASH-FLOW STATEMENT

31

in CHF Share capital Capital reserves Treasury shares Retained earnings

SHAREHOLDERS' TOTAL EQUITY

Equity as of April 1st 2014 1'800'000.00 0.00 -82'931.00 4'209'891.67 5'926'960.67

Disposal of treasury shares 82'931.00 82'931.00

Profit for the year 2014/15 740'603.17 740'603.17

Dividends for the year 2013/14 -108'000.00 -108'000.00

Equity as of March 31st 2015 1'800'000.00 0.00 0.00 4'842'494.84 6'642'494.84

Profit for the year 2015/16 547'138.09 547'138.09

Dividends for the year 2014/15 -270'000.00 -270'000.00

Equity as of March 31st 2016 1'800'000.00 0.00 0.00 5'119'632.93 6'919'632.93

Remei AG’s share capital is composed of 180,000 registered shares with restricted transferability, each with a par value of CHF 10.00 (prior year: 180,000 registered shares with restricted transferability, each with a par value of CHF 10.00). Remei AG has neither contingent nor authorised capital. Its non-distributable statutory retained earnings amount to CHF 432'800.00 (previous year: CHF 414'800.00).

STATEMENT OF CHANGE IN EQUITY


Accounting principles according to SWISS GAAP FER

Background

INTANGIBLE ASSETSAcquired intangible assets are recognised if they produce a measurable benefit to thecompany for several years. Intangible assets generated inhouse are recognised to theextent to which conditions for recognition are met. Acquired intangible assets and thosegenerate in-house are recognised at purchasing cost and at manufacturing costrespectively. Intangible assets are subject to linear write-off. Software is written offlinearly over a period of three years. As a general rule, write-off over a period of five yearsapplies in case of impossibility to clearly determine useful life.

IMPAIRMENTSOn each reporting date, all assets must be checked for the presence of any indication ofimpairment. In case of sustained impairment, the book value is reduced to therecoverable value. Impairments are recognised in the income statement.

LIABILITIESLiabilities must be recognised on the basis of nominal value of the means of payment.Foreign-currency items by means of the reporting-date method. This means that priceson the reporting date are applied to convert differences are recognised in the incomestatement.

PROVISIONS FOR WARRANTY CLAIMS AND RISKSAny probable liabilities from past events whose amounts, probability of occurrence anddue dates cannot be determined with certainty, are recognised as provisions, irrespectiveof whether those liabilities may be legal or factual in nature. On each reporting date, thevalue of such provisions is established on the basis probable outflow of and cashequivalent.

CONTINGENT LIABILITIESGuarantees, warranty liabilities and any pledging for the benefit of third parties arereported in the notes as contingent liabilities recognised at net market value.

Co-owned property with construction rights 50 yearsOffice extension 15 - 25 yearsFurniture and fittings 8 yearsOffice and IT equipment 3 years

Passenger cars 5 years

FINANCIAL ASSETSThe value of financial assets is established by subtracting any impairment from thepurchasing cost. This means that securities held over the long term are recognised atpurchasing cost or at current value if the latter is lower.

Remei AG considers it important that its financial statements provide to investors, staff and any interested party a comprehensive true and fair view of the company’s assets, financesand earnings. Accounting at Remei AG is performed in agreement with the guidelines specified by FER, the Swiss accounting and reporting recommendations (entire set of SwissGAAP FER rules). The financial statements established in agreement with Swiss GAAP FER also constitute the statutory financial statements required by commercial law, which is whythey do not include any deferred tax liabilities. Compliance with the accounting principles is checked upon by Remei AG’s external auditors. The annual accounts were approved by

Remei AG’s board of directors on June 10th 2016.

Basics and principles of valuation

FOREIGN-CURRENCY TRANSLATIONForeign currencies are converted by means of the reporting-date method. This meansthat current market prices on the reporting date are applied to convert assets. Translation differences are recognised in the income statement.

CASH AND CASH EQUIVALENTCash and cash equivalents are recognised on the basis of nominal value.

TRADE ACCOUNTS RECEIVABLETrade accounts receivable are recognised on the basis of nominal value (market priceson the reporting date). Value adjustments are made on the basis of historical rates, i.e.1%, 5%, 50% and 100% for receivables older than 60, 90, 180 and 360 daysrespectively.

ADVANCE PAYMENTS TO SUPPLIERSAdvance payments to suppliers are recognised on the basis of nominal value, i.e. theface value of the means of payment.

INVENTORIESInventories are recognised according to the principle of lower of cost or market, i.e.purchasing or manufacturing cost vs. net market value. Purchasing or manufacturingcosts includes all expenditure incurred to forward inventories to their current location andachieve their current state. The net market value is established by subtracting any sellingexpenses from the current price in the market. Discounts are considered as reductions ofthe purchasing price. Single-item value adjustments are performed on inventory items ofno value while the following general value adjustment applies to marketable merchandisecurrently in stock: 0% up to 2 years; 20% 3-5 years; and 50% in excess of 5 years.Due to their low risk, cotton inventories are not subject to value adjustment.

PROPERTY, PLANT AND EQUIPMENTThe value of property, plant and equipment is established by subtracting necessaryamortisation from purchasing or manufacturing cost. Assets are subject to linear write-offover their useful life. DERIVATIVE FINANCIAL INSTRUMENTS

Derivative financial instruments are categorised according to their purpose: hedgingtransactions are recognised on the same basis as the underlying business; tradingtransactions are recognised on the basis of market prices on the reporting date;transactions for other purposes are recognised on the basis of market prices on thereporting date or according to the principle of lower of cost or market. Uniform valuationcriteria apply.

PENSION SCHEMERemei AG staffs are insured with CoOpera Sammelstiftung PUK, a group pensionscheme subject to Swiss law. Pension liabilities covering retirement, death and disabilityare funded by contributions from Remei AG and its staff.

TAXESGiven that the financial statements established in agreement with Swiss GAAP FER alsoconstitute the statutory financial statements required by commercial law, there are nodeferred tax liabilities resulting from valuation differences.

NOTES TO THE FINANCIAL STATEMENTS

33


in CHF 2015/16 2014/15No.

1 Trade accounts receivablefrom third parties 3'418'094.00 3'508'733.02

Provision for contingent losses -43'774.55 -41'900.56

Total 3'374'319.45 3'466'832.46

2 Advance payments to suppliers

Advance payment to RSWM India 211'896.52 451'455.27

Advance payment to bioRe® Tanzania 1'245'420.40 1'363'523.37

Advance payment to Eurotex India 1'125'698.33 426'453.26

Advance payment to various suppliers 139'719.32 0.00

Total 2'722'734.57 2'241'431.90

3 Inventories

Cotton 359'289.32 185'549.39

Yarns 1'377'824.90 1'842'381.62

Garments 130'131.48 238'239.70

Value adjustment -293'019.70 -271'742.96

Total 1'574'226.00 1'994'427.75

4 Financial assets

Securities:

CoOpera AG 77'900.00 77'900.00

Tropenhaus at costs 79'500.00 79'500.00

Value adjustment on Tropenhaus -78'500.00 -78'500.00

Various certificates / shares 746.56 723.16

Loan:

bioRe® Foundation 57'948.00 155'216.00

Vivek Kumar 13'521.20 13'581.40

BIBITI Ginneries Ltd. 386'320.00 388'040.00

Investment

bioRe® India Limited 150'000.00 150'000.00

Total CHF 687'435.76 786'460.56

CoOpera AG securities are held over the long term. The financial assets now also include the loan to Bibiti Ginneries Ltd. in Africa, repayment by end of 2016.The investment include our participation in bioRe® India Limited based in Kasrawad, India. The share capital of bioRe India Limited amounts to Indian rupees 32,093,130. Remei AG holds 787,376 shares of a par value of INR 10.00, which accounts for a participation of 24.53%.

NOTES


in CHF

No.

5 Property, plant and equipment Vehicles

Office and

administrative

buildings Total CHF

Net book value as of April 1st 2014 58'820.00 2'293'134.00 2'391'120.00

Purchasing cost

Status on April 1st 2014 73'527.78 3'274'053.00 3'801'763.85

Additions 84'137.50 - 96'988.92

Disposals - -40'555.56 - -40'555.56

Status on March 31st 2015 117'109.72 3'274'053.00 3'858'197.21

Total impairment

Status on April 1st 2014 -14'707.78 -980'919.00 -1'410'643.85

Ordinary depreciation -32'253.39 -102'935.00 -160'681.81

Disposals 16'944.45 - 16'944.45

Status on March 31st 2015 -30'016.72 -1'083'854.00 -1'554'381.21

Net book value as of March 31st 2015 87'093.00 2'190'199.00 2'303'816.00

Property, plant and equipment Vehicles

Office andadministrative

buildings Total CHF

Net book value as of April 1st 2015 87'093.00 2'190'199.00 2'303'816.00

Purchasing cost

Status on April 1st 2015 117'109.72 3'274'053.00 3'858'197.21

Additions 42'592.59 4'675.93 58'738.47

Disposals -32'972.22 - -32'972.22

Status on March 31st 2016 126'730.09 3'278'728.93 3'883'963.46

Total impairment

Status on April 1st 2015 -30'016.72 -1'083'854.00 -1'554'381.21


Disposals 18'157.41 - 18'157.41

Status on March 31st 2016 -42'174.09 -1'187'099.93 -1'685'736.46

Net book value as of March 31st 2016 84'556.00 2'091'629.00 2'198'227.00

-5'580.40 -10'371.55

15'081.00 6'961.00

-

-232'034.58 -224'427.86

-

224'096.31

-226'454.18

16'484.00

-226'454.18 -214'056.31

Furniture and fittings

Office and ITequipment,

communications

6'297.136'554.29

224'096.31

-195'033.18

247'115.58 231'388.86

-

-

7'292.554'177.40

-

16'484.00 10'040.00

242'938.18

-19'023.13

-214'056.31

10'040.00

-

Furniture

and fittings

Office and IT

equipment,

communications

242'938.18

-219'983.89

-6'470.29

16'400.00

236'383.89

-

22'766.00

217'799.18

35

in CHF

No.

6 Intangible assetsBrands /Licences Software Total CHF

Net book value as of April 1st 2014 5'471.00 10'160.29 15'631.29

Purchasing costStatus on April 1st 2014 22'438.00 36'759.75 59'197.75

Additions - 21'263.98 21'263.98

Disposals - - -

Status on March 31st 2015 22'438.00 58'023.73 80'461.73

Total impairmentStatus on April 1st 2014 -16'967.00 -26'599.46 -43'566.46


Disposals - - -

Status on March 31st 2015 -18'334.00 -39'996.73 -58'330.73

Net book value as of March 31 st 2015 4'104.00 18'027.00 22'131.00

Intangible assetsBrands /Licences Software Total CHF

Net book value as of April 1st 2015 4'104.00 18'027.00 22'131.00

Purchasing costStatus on April 1st 2015 22'438.00 58'023.73 80'461.73

Additions 12'277.98 - 12'277.98

Disposals - - -

Status on March 31st 2016 34'715.98 58'023.73 92'739.71

Total impairmentStatus on April 1st 2015 -18'334.00 -39'996.73 -58'330.73


Disposals - - -

Status on March 31st 2016 -23'626.98 -50'935.73 -74'562.71

Net book value as of March 31 st 2016 11'089.00 7'088.00 18'177.00



in CHF 2015/16 2014/15

7 Trade accounts payable

To third parties 237'719.40 488'767.96

Total CHF 237'719.40 488'767.96

8 Short-term provisions

Short-term provisions for restructuring as of April 1st 0.00 10'000.00

Use 0.00 -2'180.00

Reversal 0.00 -7'820.00

Short-term provisions for restructuring as of March 31st 0.00 0.00

9 Long-term liabilities

10 Net sales

Gross sales 18'348'808.65 23'033'519.97

Client complaints -37'716.79 -78'072.69

Commissions -14'072.79 -20'457.33

Sales deductions -384'093.25 -503'331.49

Total 17'912'925.82 22'431'658.46

bioRe cotton 3'730'870.00 4'978'287.00

bioRe yarn 4'179'213.00 4'881'797.00

bioRe garments 10'438'725.65 13'173'435.97

Total 18'348'808.65 23'033'519.97

11 Cost of goods sold and farmers’ premium

Cost of goods sold 12'823'405.55 16'335'029.13

Third-party services 253'663.41 413'313.90

Direct purchasing expenses 472'902.12 631'205.22

Cost of complaints charged to suppliers -21'255.56 -30'373.95

Reduction of purchase price -66'406.13 -92'386.66

Total 13'462'309.39 17'256'787.64

Long-term liabilities are in the form of an unsecured support loan from Alternative Bank Schweiz AG in the amount of CHF 1,000,000.00. This loan is perpetual and may be terminated subject to six weeks' notice.

Remei AG reports sales based on Incoterms agreed upon with its customers. Remei AG generates its sales by trading bioRe® cotton, bioRe® yarn and bioRe® garments. The three segments account for the following shares of gross sales:

37


in CHF 2015/16 2014/15No.

11 Farmers’ premium

Farmers’ premium 446'105.23 549'099.66

Total farmers’ premium 446'105.23 549'099.66

12 Personnel expenses

Salaries 2'096'174.82 2'311'037.44

Employee profit sharing 75'340.00 146'813.50

Social-security contributions 337'128.28 369'852.62

Other personnel expenses 185'694.32 246'557.99

Total 2'694'337.42 3'074'261.55

13 Depreciation and amortisation

Ordinary depreciation on property, plant and equipment 149'512.66 160'681.81

Ordinary amortisation on intangible assets 16'231.98 14'764.27

Total 165'744.64 175'446.08

14 Other operating expensesRent 37'691.00 38'943.45

Maintenance, repair 22'128.75 17'906.03

Vehicles 12'806.46 12'107.08

Property insurance 9'085.99 7'514.55

Charges, levies, permits 2'198.01 1'340.00

Energy and disposal 13'845.93 12'537.40

Administration 129'282.57 119'675.23

IT 14'647.10 16'522.30

Advertisement 192'866.17 222'694.56

Donations and contributions 13'374.60 13'460.00

Total 447'926.58 462'700.60

15 Extraordinary profitDonations to the bioRe® Foundation 140'010.44 192'200.00

Total 140'010.44 192'200.00

Sustainability is fundamental to Remei AG’s mission statement. The cotton premium paid to local farmers is reported as a separate item in the income statement. Amounts paid as a premium depend on crop volumes.


in CHF

No.

16 Pension Benefit Obligations

2015/16 2014/15 2015/16 2014/15 2015/16 2014/15

31'394'772.00 34'995'516.00 0.00 0.00 145'914.80 133'294.35

Total 31'394'772.00 34'995'516.00 0.00 0.00 145'914.80 133'294.35

17 Derivative financial instruments

31.03.2016 31.03.2015 31.03.2016 31.03.2015 31.03.2016 31.03.2015

Foreign exchange Hedge 0.00 1'016'252.60 0.00 26'170.62 0.00 0.00

0.00 1'016'252.60 0.00 26'170.62 0.00 0.00

18 Declaration of employees

19 Transactions with related parties and organisations

2015/16 2014/15 2015/16 2014/15 2015/16 2014/15

Status on March 31st 0 3'317

Purchase of treasury shares 0 0 25.00 25.00

Disposal of treasury shares 0 -3'317 -25.00 -25.00

Status on March 31 st 0 0

Total not recognized in the balance sheet

Surplus coveraccording to FER 26

Economic part of the corporation

Contributions accrued for the period

Surplus and pension benefit expenses

Pension scheme with surplus

Financial instrumentPurpose

Contract value Positive fair value Negative fair value

In the 2015/16 business year, a total of 19.9 full-time equivalents were occupied at Remei AG, compared to 19.3 full-timeequivalents in 2014/15.

The term ‘related parties’ applies to all members of the board of directors and the executive management.In the 2015/16 fiscal year, there were no substantial transactions with related parties. In the 2014/15 fiscal year, Remei AGacquired shares in the amount of CHF 40,000 from one of its directors and of CHF 17'925 from the president. Neither do thebooks carry any credit nor debit items with regard to related parties.

Number of shares

Share priceon reporting date

(CHF/share)

Averagetransaction price

(CHF/share)Information on transactions involving treasury shares:

The average transaction price corresponds to the net market value. There are no contingent liabilities resulting from treasuryshares acquired or sold. The company holds no treasury shares (previous year: CHF 0) as equity instruments of the company.

39


in CHF 2015/16 2014/15

20 Assets pledged as collateral for own liabilities

Cash and cash equivalents 856'477.69 560'805.12

Co-owned property * 2'091'629.00 2'190'199.00

Total CHF 2'948'106.69 2'751'004.12

51'155.00 51'155.00

21 Contingent receivables and liabilities

22 Events after the balance-sheet date

* Subject to first-rank mortgage note for the benefit of the mortgagee

On the balance-sheet date, material contingent liabilities with regard to open letters of credit amounted to CHF 1'437'000 (prior year CHF 486'500) and no warranties vis-à-vis third parties (prior year CHF 0).

No such events were known when the annual accounts were closed.

No further notes are legally required pursuant to art. 959c of the Swiss Code of Obligations.



CHF 2015/16 2014/15

Available earnings before distribution at the disposal of the Annual General Meeting:

Profit carried forward from prior year 497'647.52 445'044.35

Profit for the year 547'138.09 740'603.17

Total 1'044'785.61 1'185'647.52

The board of directors proposes for the Annual General Meeting to appropriate available earnings as follows:

Allocation to statutory retained earnings -13'500.00 -18'000.00

Allocation to voluntary retained earnings -320'000.00 -400'000.00

Dividend paid out12.5% (PY 15%) of the eligible capital of CHF 1'800'000.00 -225'000.00 -270'000.00

Amount carried forward 486'285.61 497'647.52

Statement of retained earnings

Statutory retained earnings 432'800.00 414'800.00

Voluntary retained earnings 3'500'000.00 3'100'000.00

Revaluation reserves 142'047.32 142'047.32

Available earnings 1'044'785.61 1'185'647.52

Retained earnings 5'119'632.93 4'842'494.84

PROPOSED APPROPRIATION OF AVAILABLE EARNINGS

41

STATUTORY AUDITOR’S REPORT


43

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Documents

ANNUAL REPORT - Remei · new one. My handing over business responsibility ... Remei AG will primarily be in charge of sales, in . addition to its current responsibility for production