| 1

we live sustainability

2 |

creativity for ecologyCEO Statement

Our passion for innovation is the energy that shapes our company. At drom, developing extraordinary fragrances and unique scent experiences means exploring new paths, setting new benchmarks, and achieving success with pioneering creations. With creative centers in Europe, the USA, Brazil, and China, along with our global state-of-the-art organization, we serve leading brand manufacturers all over the world and create on average more than 100 fragrances per day.

Our declared goal is to produce and successfully market safe, high-quality products. As we pursue these activities, the health and safety of the people and the protection of the environment always take precedence over any economic benefits. Our innovative strength comes into play here, too.

We have developed our own environmental and sustainability strategies, implemented them within our organization, and made them top management responsibilities. By doing so, we ensure maximum support for our sustainability concept throughout the entire company. Furthermore, our certification in accordance with the globally accepted DIN EN 14001:2005 standard additionally provides external, independent validation of our compliance with all environmental standards.

For us, the financial commitment associated with these decisions is simply a part of modern entrepreneurship that goes without saying.

Together with our employees, we continuously optimize and examine all business processes. All environmental aspects of our work are recorded and assessed on an ongoing basis. Through inspections, surveys, and examinations of records and documents, we focus on reducing the consumption of raw materials, water, energy, and waste. In some cases, this has allowed us to reduce the consumption of resources in these areas by more than half.

Our five creative centers in New York, Paris, Munich, Guangzhou, and São Paulo, our four international production facilities, and our branches in 43 countries have been networked across all cultural borders for years. We also

integrate our customers into our state-of-the-art communication technologies. As a result, we reduce the environmental impact generated by transcontinental flights, spare our employees the stress associated with travel, and save time for both ourselves and our customers.

Our product range itself reflects the sustainability orientation of our company – with our completely all-natural pureganic® scented oils leading the way. Not only are they exclusively derived from certified organic plants, they are also obtained using a specially developed, patented distillation method that extracts the plant-based raw materials in an extremely gentle and efficient manner (cf p. 18).

We regard sustainability as an end-to-end strategy that includes all people with whom and for whom we work, as well as all process

| 3

stages – from product design and manufacture to distribution logistics.

Our innovative power that is emerging in these areas, too, is not just apparent in the world of perfumery. In an international ranking of innovative small and medium-sized enterprises, drom was named “Top Employer” in 2002 by the initiative TOP 100. In 2006, we were then recognized as a “Top Employer” by the initiative TOP JOB. We are particularly proud of these two honors.

We strive to always live up to these honors and to find new ways of improvement while continuously advancing our own performance at the same time.

4 |

- top ten power witH tHe mentality of a start-up

Brief Company Profile

For us, tradition has always been an ideal basis for innovation. drom is a third-generation family business, managed by brothers Dr. Ferdinand and Dr. Andreas Storp. We rank among the top ten manufacturers of fragrances but still maintain the mentality and flexibility of a start-up company.

| 5

At drom, Creativity And High TechGo Hand In Hand

With its above-average percentage of creative minds at its five creative centers worldwide, its pioneering initiatives such as the New York Fragrance Design Studio open to everyone, and its global network of state-of-the-art communication technology, drom repeatedly sets new standards – creatively, flexibly, and fast.

drom Expertise Has Many Facets

drom is successful in creating fine fragrances. Our second area of expertise, however, is no less important: the development of scents for cosmetics, toiletries, hair care, and home care. Future-oriented segments such as fragrances for multimedia and entertainment are also part of our range of offerings.

Presence And Service On A Global Scale

With 165 employees at its headquarters near Munich and its own high-tech plants in Europe, the USA, China, and Brazil, drom has a production capacity of nearly 35,000 metric tons of perfume oils per year and generates sales of more than USD 100 million. Uniform, stringent production standards ensure a consistently high quality worldwide.

drom subsidiaries and representative offices around the globe provide maximum customer proximity and comprehensive, detailed service. It is an ideal foundation for holding one’s own in the tough competition with major enterprises in the sector and for continuously expanding one’s own market presence in the future, too.

6 |

our employees embody our company’s culture

„be different“

Social Aspects, Work Environment, And Reward System

The creativity, competence, and professionalism of our employees are the basis for our success in the international perfume and beauty industry. We want the best people to want to work for us. We want them to feel good at our company and stay with us for a long time. Their motivation is just as important to us as their qualifications.

| 7

We Live Team Success

Our employees feel and live our philosophy to “be different.” Filled with this awareness, they inspire the drom-typical teamwork, which we encourage by creating ideal conditions marked by flat hierarchies and openness and fairness between colleagues and superiors.

This intercontinental teamwork is one of our company’s strengths. Team compatibility is therefore just as important to us as expertise.

We Motivate Creativity

Each one of our creative centers – New York, Paris, Munich, Guangzhou, and São Paulo – contributes ideas and inspiration to each project. The creative minds form part of an interdisciplinary team and work hand in hand with specialists of other departments.

Top performances achieved in this manner are rewarded with incentive payments and a share in the company’s success. Moreover, our employees can choose between components from four different areas for their company pension plan.

We Reward Innovative Spirit

Our employees share our passion for innovation, and we do everything we can to promote their innovative spirit and innovative strength. We encourage thinking outside the box, initiate maximum creative communication, and reward unconventional concepts.

Ninety-five percent of ideas submitted by our employees through our internal suggestion system are implemented and rewarded. No good idea gets lost at drom! This makes our corporate culture remarkable – and our results so remarkably successful.

8 |

our open-source pHilosopHy creates opportunities for every age group and every etHnicity

Social Aspects, Development Prospects For Employees Of All Age Groups And Ethnicities, Top Job

| 9

We Encourage Personal Development

Everyone who works for us can take advantage of our extensive training offerings to further his or her personal and professional development. Students from the age of 13 and college students have the opportunity to get to know all areas of our company and to complete internships at drom – eight percent of our positions are made available to interns.

On the other end of the spectrum, three percent of our employees have exceeded the retirement age and delight and inspire us with their individual combination of innovative strength and experience.

Four percent of our workforce have disability status, and we gladly draw on offers from workshops for the disabled when it comes to select everyday items.

“Be Different” Also Means Respecting Ethnic And Cultural Differences

“Be different” is more than just a maxim for motivating our employees. For us, it also means respecting the differentness of other ethnic groups and incorporating it into our company’s code of conduct. This begins with cultural training for our employees to prepare them for the collaboration with our branches on other continents and has long been part of the daily routine at our company headquarters where 13 nationalities work together.

Top Employer

We are delighted that our work ethics evoke positive responses both within and outside the company. We are particularly proud of being named “Top Employer” by Top Job. An independent German jury of experts chose our company in 2006 as one of the best in Germany in all categories and awarded drom first place in “Culture and Communication.”

10 |

production at drom goes Hand in HandwitH solutions benefiting tHe environment

Facts And Figures Of Sustainability Optimization

At our headquarters near Munich, we are able to produce 800 metric tons of fragrances per month in over 3,000 square meters of production space. We utilize all stages of the value chain to conserve resources and to minimize environmentally relevant emissions. From raw materials to the finished product, at drom, the reduction of waste, energy use, water consumption, and CO2 emissions plays an important role.

| 11

Gas and Oil – 2007/2009 –38% and –22%Reducing the use of fossil fuels and the sources of harmful CO2 emissions is at the very top of our sustainability agenda. By converting our headquarters’ entire heating system and installing state-of-the-art heating thermostats, we were able to decrease our consumption of gas by 38 percent within three years and reduce our oil consumption by nearly a quarter (22%).

Electricity – 2007/2009 –11%As a result of our initiatives “GreenLight” (cf p. 12) and “Green IT” (cf p. 14), we reduced power consumption at our headquarters by 11 percent.

Metal Packaging – 2007/2009 –53%In collaboration with our suppliers, we switched to using reusable perfume oil containers in our distribution logistics. Although rising sales figures typically lead to an increase in metal packaging, we were able to reduce this amount by more than half (–53%), despite growing sales.

Bulky Waste – 2007/2009 –39%We have steadily optimized our waste separation in all departments without exception since 2007. As a result, we were able to record a 39 percent reduction in bulky waste.

Paper – 2007/2009 –32%Within the scope of our “Green IT” initiative (cf p. 14), we completely overhauled our printing system. As a result, paper is now often printed on both sides at drom. We also increasingly conduct our correspondence electronically, up to and including offers. This allowed us to reduce our paper consumption by one third (–32%).

Solvents – 2006/2009 –100%Environmental pollution caused by the chemical solvent APV 2-(2-ethoxyethoxy)ethanol no longer exists at drom. We switched all cleaning processes in our production facilities to steam cleaning in 2007. The wastewater generated by this method is filtered, and any remaining oil is separated. The purified water is then returned to the cleaning cycle without any wastage.

CO2 EmissionsThe 2,000 square meters of roof surface at our headquarters in Baierbrunn were brought up to date with the latest insulation technology in 2010. As a result of this measure, we were able to prevent 16 kilograms of CO2 emissions per square meter; this alone adds up to 32 metric tons per year.

Partnership in SustainabilityWe also set high standards when it comes to the environmental behavior of our suppliers and service providers. All partner companies must meet drom’s environmental standards - for example, for packaging and cleaning agents. We continuously reassess their technical knowledge, as well as their reliability. In addition, we also inform our customers about how they can help protect the environment through the correct use of our products, including the disposal of remainders.

12 |

“greenlight” -less energy, more efficiency

Sustainability Optimization “GreenLight”

Minimizing the footprint we leave on the environment is of great importance to us. We were able to take a significant step toward this goal by drastically reducing our power consumption.

In collaboration with professional lighting experts, every room and workstation were diligently analyzed, and precise optimization measures were defined. This resulted in a highly efficient lighting concept with a sustained internal and external impact.

| 13

Impressive In Every Aspect

• By implementing the new energy-saving system, power consumption was reduced by 11 percent.

• The ergonomic lighting in all rooms and at all workstations allowed us to optimize the working conditions for our employees and protect their health.

• Due to the long life span of the new technology, maintenance costs are reduced in the long term.

• Additionally, we qualified as an official partner of the “GreenLight Program.” This initiative for energy-efficient lighting is promoted by the European Union with the goal of sustainably reducing CO2 emissions in the European Community.

14 |

green it – low use of resources, HigH-Quality communication

Sustainability Optimization “Green IT”

The key to drom’s capacity for growth on a global scale lies in the intense intercontinental communication between our creative centers in New York, Paris, Munich, Guangzhou, and São Paulo, our four production facilities worldwide, and our branches in 43 countries.

Products and production processes are initiated or optimized without the need for our employees to travel.

| 15

Video Replaces Traveling

At drom, transcontinental flights and time-consuming business trips, which are a burden on both people and the environment, have been replaced by videoconferences based on state-of-the-art communication technology since 2007. We were the first company to establish a high-performance network in China and are a reference customer for Deutsche Telekom.

High Tech Optimizes Ecobalance

Thanks to our global network, we bring more creative minds together than all of our competitors. Our employees from Hong Kong, Sydney, New York, and Paris virtually gather around one table to develop ideas and solutions. Customers, too, can be directly involved without being on-site. The quality of the communication remains the same, and all participants save time and resources. The positive ecobalance of an avoided round-trip flight from Munich to Guangzhou, for example, amounts to 1.8 metric tons of CO

2, or 1.9 metric tons for a round-trip flight to New York, and even three metric tons for a round-trip flight to São Paulo.

Pioneers In Virtualization

We consistently work toward making our IT even greener on all levels. By regularly upgrading our server parks, we continuously minimize our power consumption, while maximizing performance and energy efficiency at the same time. The virtualization of our server environment contributes to this as well and allowed us to reduce our hardware by half within two years. We consolidated and reduced our storage environment in 2006 by using highly specialized storage area networks – an additional successful energy-saving measure that puts us in a leading position among other companies our size.

16 |

product safety and fair tradeHave absolute priority

Seals Of Approval

The uncompromising safety of our employees and our customers is a key aspect when it comes to our products – from product development to manufacturing. Even our raw materials undergo a strict safety evaluation. We examine the toxicological profile of each ingredient and its effect within a formula. In the course of this, we also place great importance on the use of certified natural organic raw materials and their origin from organic farming.

Quality Processing In Accordance With Fair Trade Principles

Our central raw-materials purchasing and our own production locations on all relevant continents ensure the highest quality and product safety, regardless of whether this involves a special concept or a large-scale project.

When purchasing our raw materials, we also follow fair trade principles in order to help farmers and agricultural workers invest in their communities, protect the environment, and improve their occupational qualifications and their ability to compete in the global market.

Quality Management Is Part Of Our Tradition

We certified our QM system as early as 1992 and were one of the first companies in the cosmetics and perfume industry to do so. Today, we still far exceed all statutory provisions. Our wireless system centrally manages and documents our quality control and makes it transparent. We have uncompromising standards: only a zero-error rate is acceptable to us.

Meeting the requirements of internationally recognized seals of approval is an integral part of our product concepts. The following are some examples from the array of seals of approval under which drom products are certified.

| 17

The seal of the BDIH, an association of German specialists for natural products, requires a product to consist of at least 95% certified organic raw materials.

The seal of approval of Ecocert, a certification body authorized by the French government, inspect and certify the CosméBio charter and the CosmEco charter. Among other things, it prescribes that 95% of the final product must be natural and that 10% of the ingredients of the final product must come from organic farming.

Na True is the seal of an European association of experts. Its three levels of certification (natural cosmetics, natural cosmetics with organic portion, and organic cosmetics) follow their own strict standards. They require that the perfume oils used in a product consist of 100% natural ingredients.

EU Flower is a label that promotes environmentally friendly products that provide the consumer with precise and scientifically sound product information and product advice.

The Nordic Ecolabel, the Swan, is among the environmental labels with the most stringent criteria worldwide.

Bra Miljöval is the ecolabel of the Swedish Society for Nature Conservation (SSNC).

18 |

- 100% pure nature on tHe HigHest level

Pureganic

Developing extraordinary fragrance concepts is our trademark. With pureganic®, we anticipated the trend toward eco-based products ten years ahead of time and exceeded the requirements of even the most strict seals of approval. During the development of this collection of scented oils, we embarked on brand-new paths and redefined pureness and purity level at the same time. The result is a clearly noticeable scent difference compared to conventional essential oils – an ideal basis for creating unusual fragrance compositions and natural cosmetics concepts.

| 19

Patented Processing

During the further production process, we consistently apply the same immense care and effort as on the raw-material level. In collaboration with the University of Munich and the Bavarian State Research Center for Agriculture (Bayerische Landesanstalt für Bodenkultur und Pflanzenbau), we developed a revolutionary globally patented method of distillation that is fast, completely pressureless, and exceptionally gentle.

As a result, we were able to successfully produce essential oils that hold a unique position in the world market.

The quality, the one hundred percent purity, and the sensational scents of these pureganic® oils are a dream for perfumers and customers alike. They are the perfect answer to the consumers’ growing requirements – pureganic® oils are quality at the highest level.

Think Global, Act Local

For our pureganic® oils, we only use aromatic plants that grow optimally in the specific soil and climate conditions around our headquarters in Bavaria, thus meaning we can produce top-quality oil concentrates. They are cultivated with great care in accordance with strict ecological specifications. For the harvest, too, only special, gentle processes are employed. The plants are harvested precisely in the growth stage and at the point in time at which the aromatic oils of the particular plant species are at their peak quality.

Pure Nature In Certified Quality

Through exclusive collaborations with farms in Bavaria, we sustainably ensure the availability of unadulterated, all-natural, pure raw materials of a consistently high quality. At the same time, we promote organic farming in our region. This controlled, pesticide-, herbicide-, and fertilizer-free farming was awarded the certificate “For Organically Produced Food” by ABCERT GmbH, an independent, internationally recognized inspection organization for organic farming.

20 |