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STATEMENT OF THE BOARD OF GENERAL DIRECTORS 98

INDEPENDENT AUDITORS’ REPORT 100

BALANCE SHEET 101

INCOME STATEMENT 103

CASH FLOW STATEMENT 104

NOTES TO THE FINANCIAL STATEMENTS 106

NEW POSITION NEW OPPOTUNITIES

FINANCIAL STATEMENTS

The Board of General Directors of Imexpharm Corporation (the “Company”) presents this report together with the Company’s financial statements for the year ended 31 December 2014.

THE BOARDS OF MANAGEMENT AND GENERAL DIRECTORS

The members of the Boards of Management and General Directors of the Company who held office during the year and to the date of this report are as follows:

BOARD OF MANAGEMENT

Mr. Nguyen Quoc Dinh Chairman

Ms. Tran Thi Dao Vice Chairman

Mr. Vo Huu Tuan Member

Mr. Phan Hoang Minh Tri Member

Ms. Nguyen Kiem Phuong Member

Mr. Huynh Van Nhung Member

Mr. Nguyen Ọuy Son Member

Mr. Tran Anh Tuan Member

Ms. Nguyen Thi Thu Hong Member (resigned on 7 May 2014)

BOARD OF GENERAL DIRECTORS

Ms. Tran Thi Dao General Director

Mr. Nguyen Ọuoc Dinh Deputy General Director

Mr. Huynh Van Nhung Deputy General Director

Ms. Nguyen Thi Thu Hong Deputy General Director (resigned on 7 May 2014)

Mr. Tran Hoai Hanh Chief Accountant (appointed on 23 July 2014)

Mr. Phan Hoang Minh Tri Chief Accountant (resigned on 23 July 2014)

BOARD OF GENERAL DIRECTORS’ STATEMENT OF RESPONSIBILITY

The Board of General Directors of the Company is responsible for preparing the financial statements, which give a true and fair view of the financial position of the Company and of its results and cash flows for the year in accordance with Vietnamese Accounting Standards, accounting regime for enterprises and legal regulations relating to financial reporting. In preparing these financial statements, the Board of General Directors is required to:

• Selectsuitableaccountingpoliciesandthenapplythemconsistently;

• Makejudgmentsandestimatesthatarereasonableandprudent;

• Statewhetherapplicableaccountingprincipleshavebeenfollowed,subjecttoanymaterialdeparturesdisclosedandexplainedinthefinancialstatements;

• PreparethefinancialstatementsonthegoingconcernbasisunlessitisinappropriatetopresumethattheCompanywillcontinueinbusiness;and

• DesignandimplementaneffectiveintemalcontrolSystemforthepurposeofproperlypreparingandpresentingthefinancialstatementssoastominimizeerrorsandfrauds.

The Board of General Directors is responsible for ensuring that proper accounting records are kept, which disclose, with reasonable accuracy at anytime, the financial position of the Company and that the financial statements comply with Vietnamese Accounting Standards, accounting regime for enterprises and legal regulations relating to financial reporting. The Board of General Directors is also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of frauds and other irregularities.

The Board of General Directors confirms that the Company has complied with the above requirements in preparing these financial statements.

For and on behalf of the Board of General Directors,

Nguyen Quoc Dinh

Deputy General Director

25 March 2015

INDEPENDENT AUDITORS’ REPORT

98 99Conquering commitment of each height II Imexpharm - 2014 Annual Report

To: Shareholders, Boards of Management and General Directors Imexpharm Corporation

We have audited the accompanying financial statements of Imexpharm Corporation (the “Company”), prepared on 25 March 2015 as set out from page 101 to page 128, which comprise the balance sheet as at 31 December 2014, the statement of income, the statement of cash flows for the year then ended and a summary of significant accounting policies and other explanatory information (collectively referred to as the “financial statements”).

BOARD OF GENERAL DIRECTORS ’ RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Board of General Directors is responsible for the preparation and fair presentation of these Financial statements in accordance with Vietnamese Accounting Standards, accounting regime for enterprises and legal regulations relating to financial reporting and for such intemal control as the Board of General Directors determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

AUDITORS’ RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Vietnamese Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of General Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OPINION

In our opinion, the accompanying financial statements give a true and fair view of, in all material respects, the financial position of the Company as at 31 December 2014, and its financial performance and its cash flows for the year then ended in accordance with Vietnamese Accounting Standards, accounting regime for enterprises and legal regulations relating to financial reporting.

Vo Thai HoaAudit PartnerAudit Practising Registration Certificate No. 0138-2013-001-1For and on behalf of Deloitte Vietnam Company Limited25 March 2015Ho Chi Minh City, S.R. Vietnam

Bui Quoc AnhAuditorAudit Practising Registration Certificate No. 2133-2013-001-1

Unit: VND

ASSETS Codes Notes 31/12/2014 31/12/2013

A. CURRENT ASSETS 100 719,282,481,026 560,035,978,919(100=110+120+130+140+150)

I. Cash and cash equivalents 110 5 178,550,050,326 192,255,383,5111. Cash 111 50,050,050,326 75,255,383,5112. Cash equivalents 112 128,500,000,000 117,000,000,000

II. Short-term financial investnients 120 3,283,181,020 2,825,975,2601. Short-term investments 121 6 6,600,735,680 6,600,735,6802. Provision for impairment of short-term investments

129 7 (3,317,554,660) (3,774,760,420)

III. Short-term receivables 130 227,003,498,046 155,159,684,279 1. Trade accounts receivable 131 207,324,365,361 165,773,936,997 2. Advances to suppliers 132 20,426,902,833 3,357,942,351 3. Other receivables 135 7,444,225,565 1,447,264,084 4. Provision for short-term doubtful debts 139 (8,191,995,713) (15,419,459,153)

IV. Inventories 140 8 294,566,944,991 199,704,966,193 1. Inventories 141 295,598,899,143 200,020,643,727 2. Provision for devaluation of inventories 149 (1,031,954,152) (315,677,534)

V. Other short-term assets 150 15,878,806,643 10,089,969,676 1. Short-term prepayments 151 1,887,284,251 1,750,933,712 2. Value added tax deductibles 152 2,761,662,333 3,271,538,103 3. Other receivables from the State budget 154 92,585,780 170,876,528 4. Other short-term assets 158 11,137,274,279 4,896,621,333

B. NON-CURRENT ASSETS 200 310,256,152,226 309,804,425,798(200=220+250+260)

I. Fixed assets 220 246,036,409,815 258,489,435,840 1. Tangible fixed assets 221 9 172,621,789,202 189,299,401,538 - Cost 222 387,020,599,372 367,457,688,691 - Accumulated depreciation 223 (214,398,810,170) (178,158,287,153) 2. Intangible assets 227 10 68,992,079,705 67,137,349,360 - Cost 228 80,209,606,136 73,791,971,132 -Accumulaled amortisation 229 (11,217,526,431) (6,654,621,772) 3. Construction in progress 230 11 4,422,540,908 2,052,684,942

II. Long-term financial Investments 250 46,228,154,700 34,251,674,7001. lnvestments in associates 252 12 37,610,486,700 25,584,006,7002. Other long-term investments 258 13 8,799,668,000 8,849,668,0003. Provision for impairment of long-termfinancial investments

259 (182,000,000) (182,000,000)

III. Other long-term assets 260 17,991,587,711 17,063,315,258 1. Long-term prepayments 261 14 17,771,288,971 16,919,261,258 2.Other long-term assets 268 220,298,740 144,054,000

TOTAL ASSETS (270=100+200) 270 1,029,538,633,252 869,840,404,717

INDEPENDENT AUDITORS’ REPORT

BALANCE SHEETAs at 31 December 2014

No. 418/VN1A-HC-BC FORM B 01-DN


Unit: VND

RESOURCES Codes Notes 31/12/2014 31/12/2013

A. LIABILITIES ( (300=310+330) 300 232,902,181,007 143,987,007,224

I. Current liabilities 310 200,327,394,051 119,682,930,224 1. Trade accounts payable 312 112,795,081,350 61,086,041,318 2. Advances from customers 313 760,122,040 2,703,082,828 3. Taxes and amounts payable to the State budget

314 15 8,823,501,596 16,857,919,032

4. Payables to employees 315 29,206,785,697 15,020,347,691 5. Accrued expenses 316 16 46,055,241,368 20,026,483,055 6. Other current payables 319 923,144,647 998,128,171 7. Bonus and welfare funds 323 1,763,517,353 2,990,928,129

II. Long-term liabilities 330 32,574,786,956 24,304,077,000 1. Other long-term payables 333 17 5,077,000,000 5,097,000,000 2. Scientific and technological development fund

339 18 27,497,786,956 19,207,077,000

B. EQUITY (400=410) 400 796,636,452,245 725,853,397,493I. Owner’s equity 410 19 796,636,452,245 725,853,397,493 1. Share Capital 411 263,114,860,000 167,058,100,000 2. Share premium 412 238,957,833,609 315,192,059,609 3. Other owner’s capitall 413 2,420,789,142 2,420,789,142 4. Treasury shares 414 - (11,838,266,000) 5. Investment and development fund 417 206,362,374,388 196,596,495,300 6. Financial reserve fund 418 5,551,390,000 16,705,810,000 7. Retained earnings 420 80,229,205,106 39,718,409,442

TOTAL RESOURCES (440=300+400) 440 1,029,538,633,252 869,840,404,717

OFF BALANCE SHEET ITEMS 31/12/2014 31/12/2013

1. Bad debts written off 7,570,450,028 30,975,000

2. Foreign currency

- United States Dollar (USD) 158,811,00 1,332,909,22

Duong Hoang VuPreparer

Tran Hoai HanhChief Accountant

Nguyen Quoc DinhDeputy General Director25 March 2015

BALANCE SHEET (Continued)As al 31 December 2014

FORM B 01-DN

INCOME STATEMENTFor the year ended 31 December 2014

FORM B 02-DN

Unit: VND

ITEMS Codes Notes 2014 2013

1. Gross revenue 01 21 907,338,298,242 852,756,264,9422. Deductions 02 21 10,202,577,089 11,439,849,8573. Net revenue (10=01-02) 10 21 897,135,721,153 841,316,415,0854. Cost of sales 11 22 478,268,587,502 451,468,196,3475. Gross profit (20=10-11) 20 418,867,133,651 389,848,218,7386. Financial income 21 24 9,560,926,831 6,206,625,8117. Financial expenses 22 25 8,257,073,479 7,723,523,5638. Selling expenses 24 244,363,050,548 227,616,788,4899. General and administration expenses 25 64,640,040,183 62,689,510,43710. Operating profit 30 111,167,896,272 98,025,022,060

(30=20+(21-22)-(24+25)) 11. Other income 31 808,720,874 4,148,564,87912. Other expenses 32 1,694,643,055 6,616,390,76113. Loss from other activities (40=31-32) 40 26 (885,922,181) (2,467,825,882)14. Accounting profit before tax 50 110,281,974,091 95,557,196,178

(50=30+40) 15. Current corporate income tax expense 51 27 24,503,296,985 34,932,976,73616. Net profit after corporate income tax

(60=50-51-52)60 85,778,677,106 60,624,219,442

17. Earnings per share 70 28 3,421 2,449





SUPPLEMENTAL NON-CASH DISCLOSURES

Cash outflows for purchases of fixed assets and other long-term assets during the year exclude an amount of VND 385,786,965 (as at 31 December 2013: VND 1,131,593,935), representing an addition in fixed assets during the year that has not yet been paid. Consequently, changes in accounts payable have been adjusted by the same amount.

CASH FLOW STATEMENT For the year ended 31 December 2014

CASH FLOW STATEMENT (Continued)For the year ended 31 December 2014

FORM B 03-DN

Unit: VND

ITEMS Codes 2014 2013

I. CASH FLOWS FROM OPERATING ACTIVITIES

1. Profit before tax 01 110,281,974,091 95,557,196,178 2. Adjustments for: Depreciation and amortisation 02 37,443,719,332 36,896,662,852

Provisions 03 (6,968,392,582) (4,943,464,233)

Unrealized foreign exchange (gain)/ loss 04 (140,915,117) (50,746,885)

(Gain)/ loss from investing activities 05 (7,988,716,758) (1,519,612,520)

3. Operating profit before movements in working capital 08 132,627,668,966 125,940,035,392 (Increase)/ decrease in receivables 09 (58,440,088,735) 42,956,828,745

(Increase)/ decrease in inventories. 10 (95,578,255,416) 44,927,943,714

Increase/ (decrease) in accounts payable (not including accrued interest and corporate income tax payable)

11 88,417,259,151 (49,677,059,742)

(Increase)/ decrease in prepaid expenses 12 (1,064,622,992) 1,176,842,033

Corporate income tax paid 14 (32,402,689,230) (24,466,729,513)

Other cash inflows 15 35,167,500 4,000,225,000

Other cash outflows 16 (17,990,253,944) (16,817,871,699)

Net cash from/ (used in) operating activities 20 15,604,185,300 128,040,213,930 II. CASH FLOWS USED IN INVESTING ACTIVITIES1. Acquisition and construction of fixed assets 21 (31,445,790,321) (36,344,914,456)

2. Proceeds from sale, disposal of fixed assets 22 224,660,000 2,209,772,727

3. Cash recovered from lending 24 - 2,350,000,000

4. Investments in other entities 25 (12,026,480,000) (540,000,000)

5. Cash recovered from investments in other entities 26 50,000,000 2,377,639,758

6. Interest earned, desvidends and profits received 27 6,836,401,202 4,882,199,483

Net cash used in investing activities 30 (36,361,209,119) (25,065,302,488)III. CASH FLOWS FROM FINANCING ACTIVITIES1. Proceeds from issuing stocks, receiving capital from owner 31 31,660,800,000 -

2. Dividends and profits paid 36 (24,608,187,000) (32,811,620,000)

Net cash from (used in) financing activities 40 7,052,613,000 (32,811,620,000)Net increase (decrease) in cash (50=20+30+40) 50 (13,704,410,819) 70,163,291,442 Cash and cash equivalents at the beginning of the year 60 192,255,383,511 122,127,216,023 Effect of changes in foreign exchange rates 61 (922,366) (35,123,954)

Cash and cash equivalents at the end of the year (70=50+60+61)

70 178,550,050,326 192,255,383,511





NOTES TO THE FINANCIAL STATEMENTSFor the year ended 31 December 2014

FORM B 09-DN

1. GENERAL INFORMATION

Structure of ownership

Imexpharm Corporation (the “Company”), formerly Dong Thap Pharmaceautical Union incorporated under the Decision No. 284/TCCQ dated 28 September 1983 issued by the Health Department of Dong Thap Province, was transformed from a state enterprise into a joint stock company under Business Registration Certificate No. 1400384433 dated 01 August 2001 issued by the Department of Planning and Investment of Dong Thap Province and other amendment certificates thereafter with the latest amendment (the twenty-third amendment) dated 12 January 2015. The Company’s stocks were listed in Ho Chi Minh Stock Exchange under the Decision No. 76/UBCK-GPNY on 4 December 2006 with code IMP.

The number of employes of the Company as at 31 December 2014 was 962 (as at 31 December 2013: 880).

Principal activities

The principal activities of the Company are manufacturing, processing, trading, import and export pharmaceutical products; import and export of equipment and medical equipment, chemicals, packaging materials for manufacturing drugs, sterilizing and disinfecting chemicals (exception from products list regulated at Point A Part II Appendix No. 04 accompanying with the Decision No. 10/2007/QD-BTM dated 21 May 20007 issued by Ministry of Trading); trading of cosmetics; growing traditional medicines; trading of food, functional foods, beverages, alcoholic drinks, fizzy drinks; manufacturing of milks; financial investment; providing maintenance storage system of medicines, medicine materials; retailing of medicines, medical equipment, cosmetics and hygiene article at specialized stores.

2. ACCOUNTING CONVENTION AND FINANCIAL YEAR

Accounting convention

The accompanying financial statements, expressed in Vietnam Dong (“VND”), are prepared under the historical cost convention and in accordance with Vietnamese Accounting Standards, accounting regime for enterprises and legal regulations relating to financial reporting.

The accompanying financial statements are not intended to present the financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Vietnam.

Financial year

The Company’s financial year begins on 1 January and ends on 31 December.

3. NEW ACCOUNTING GUIDANCE IN ISSUE NOT YET ADOPTED

On 22 December 2014, the Ministry of Finance issued Circular No. 200/2014/TT-BTC (“Circular 200”) guiding the application of accounting regime for enterprises. This Circular is effective for financial years beginning on or after 1 January 2015. Circular 200 will supersede the regulations for accounting regime promulgated under Decision No. 15/2006/QD-BTC dated 20 March 2006 issued by the Ministry of Finance and Circular No. 244/2009/TT-BTC dated 31 December 2009 issued by the Ministry of Finance. The Board of General Directors is considering the extent of impact of the adoption of this Circular on the Company’s financial statements for future accounting periods.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies, which have been adopted by the Company in the preparation of these financial statements, are as follows:

Estimates

The preparation of financial statements in conformity with Vietnamese Accounting Standards, accounting regime for enterprises and legal regulations relating to financial reporting requires the Board of General Directors to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the financial year. Although these accounting estimates are based on the Board of General Directors’ best knowledge, actual results may differ from those estimates.

Financial instruments

Initial recognition

Financial assets: At the date of initial recognition, financial assets are recognized at cost plus transaction costs that are directly attributable to the acquisition of the financial assets. Financial assets of the Company comprise cash and cash equivalents, trade and other receivables, short-term and long-term financial investments and deposits.

Financial liabilities: At the date of initial recognition, financial liabilities are recognized at cost plus transaction costs that are directly attributable to the issue of the financial liabilities. Financial liabilities of the Company comprise trade and other payables, accrued expeneses and deposits received.

Subsequent measurement after initial recognition

Currently, there are no requirements for the subsequent measurement of the financial instruments after initial recognition.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Provision for doubtful debts

Provision for doubtful debts is made for receivables that are overdue for six months or more, or when the debtor is in dissolution, in bankruptcy, or is experiencing similar difficulties and so may be unable to repay the debt.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted average method. Net realisable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in marketing, selling and distribution.

The evaluation of necessary provision for inventory obsolescence follows current prevailing accounting regulations which allow provisions to be made for obsolete, damaged, or sub-standard inventories and for those which have costs higher than net realisable values as at the balance sheet date.

Tangible fixed assets and depreciation

Tangible fixed assets are stated at cost less accumulated depreciation. The costs of purchased tangible fixed assets comprise their purchase prices and any directly attributable costs of bringing the assets to their working condition and location for their intended use.

Tangible fixed assets are depreciated using the straight-line method over the following estimated useful lives:

Years

Buildings and structures 10 - 25

Machinery and equipment 6 - 15

Motor vehicles 6 - 10

Office equipment 3 - 8

Leasing

Leases where substantially all the rewards and risks of ownership of assets remain with the leasing company are accounted for as operating leases. Rentals payable under operating leases are charged to the income statement on a straight-line basis over the term of the relevant lease.


NOTES TO THE FINANCIAL STATEMENTS (continued)For the year ended 31 December 2014


FORM B 09-DN



Intangible assets and amortisation

Intangible assets represent land use rights, copyright and computer software that are stated at cost less accumulated amortisation. Indefinite land use rights are not amortised. Definite land use rights are amortised using the straight-line method over the duration specified in the land use right certificate. Copyright and computer software are amortised using the straight-line method over 3 years.

Construction in progress

Properties in the course of construction for production, rental or administrative purposes, or for the purposes not yet determined, are carried at cost. Cost includes professional fees, and for qualifying assets and other costs dealt with in accordance with the Company’s accounting policy. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

Other long-term investments

Investments in associates: An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor an interest in joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but not control or joint control over those policies. Investments in securities are recognised on a trade date basis and are initially measured at cost including directly attributable transaction costs. At the subsequent reporting dates, investments in securities are measured at cost, less the amount of impairment of investments in securities.

Other long-term investments: Other long-term investment presents investments in other companies on which the Company does not have any control, co-control or no significant influence. These investments are initially measured at cost, including directly attributable transaction costs. At the subsequent reporting dates, other long-term investments are measured at cost, less the amount of diminution in value of long-term investments.

Provision for impairment of long-term financial investments is made when the economic organizations that the Company has investments are in loss position and provision for diminution in value of investments in securities is made for freely traded securities whose book values are higher than market prices as at the balance sheet date.

Long-term prepayments

Long-term prepayments comprise prepaid land rentals and store rentals. Prepaid land and store rentals are charged to the income statement using the straight-line method over the lease term.

Revenue recognition

Revenue from the sale of goods is recognised when all five (5) following conditions are satisfied:

(a) The Company has transferred to the buyer the significant risks and rewards of ownership of the goods;

(b) The Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

(c) The amount of revenue can be measured reliably;

(d) It is probable that the economic benefits associated with the transaction will flow to the Company; and

(e) The costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue of a transaction involving the rendering of services is recognised when the outcome of such transactions can be measured reliably. Where a transaction involving the rendering of services is attributable to several periods, revenue is recognised in each period by reference to the percentage of completion of the transaction at the balance sheet date of that period. The outcome of a transaction can be measured reliably when all four (4) following conditions are satisfied:

(a) The amount of revenue can be measured reliably;

(b) It is probable that the economic benefits associated with the transaction will flow to the Company;

(c) The percentage of completion of the transaction at the balance sheet date can be measured reliably; and

(d) The costs incurred for the transaction and the costs to complete the transaction can be measured reliably.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the applicable interest rate.Dividend income from investments is recognised when the Company’s right to receive payment has been established.

Foreign currencies The Company applies the method of recording foreign exchange differences in accordance with Vietnamese Accounting Standard No. 10 (VAS 10) “Effects of changes in foreign exchange rates” and Circular No. 179/2012/TT-BTC dated 24 October 2012 of the Ministry of Finance providing guidance on recognition, measurement and treatment of foreign exchange differences in enterprises. Accordingly, transactions arising in foreign currencies are translated at exchange rates ruling at the transaction date. The balances of monetary items denominated in foreign currencies as at the balance sheet date are retranslated at the exchange rates on the same date. Exchange differences arising from the translation of these accounts are recognised in the income statement. Unrealised exchange gains as at the balance sheet date are not treated as part of distributable profit to shareholders.

Borrowing costsBorrowing costs are recognised in the income statement when incurred.

ProvisionsProvisions are recognised when the Company has a present obligation as a result of a past event, and it is probable that the Company will be required to settle that obligation. Provisions are measured at the Board of General Directors’ best estimate of the expenditure required to settle the obligation as at the balance sheet date.

Scientific and technological development fundScientific and technological development fund is appropriated to generate fund for scientific and technological development activities of the Company. The fund is set up on the basis of maximum 10% of taxable income and is recognised in the income statement in the year.

TaxationCorporate income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years (including loss carried forward, if any) and it further excludes items that are never taxable or deductible.

Deferred tax is recognised on significant differences between carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using balance sheet liability method. Deferred tax liabilities are generally recognised for all temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilised.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same tax authority and the Company intends to settle its current tax assets and liabilities on a net basis.

The determination of the tax currently payable is based on the Company’s current interpretation of tax regulations. However, these regulations are subject to periodic variation and their ultimate determination depends on the results of the tax authorities’ examinations.

Other taxes are paid in accordance with the prevailing tax laws in Vietnam.


FORM B 09-DN



5. CASH AND CASH EQUIVALENTS

31/12/2014 31/12/2013VND VND

Cash on hand 697,684,120 978,424,005

Cash in bank 49,352,366,206 74,276,959,506

Cash equivalents 128,500,000,000 117,000,000,000

178,550,050,326 192,255,383,511

Cash equivalents represent time deposits in banks in Vietnam Dong with the term of 1 month and earn interest rates from 4.9% to 5.7% per annum (2013: from 6% to 7% per annum)

6. SHORT-TERM INVESTMENTS

31/12/2014 31/12/2013

Amount as at 31/12/2014

and 31/12/2013(Share) (Share) VND

Mekorphar Chemical Pharmaceutical Joint Stock Company 60,000 60,000 5,589,637,900

Bach Tuyet Cotton Joint Stock Company 10,000 10,000 239,465,000

DHG Pharmaceutical Joint Stock Company 4,265 4,265 239,510,000

Domesco Medical Import-Export Joint Stock Corporation 7,500 7,500 383,907,520

OPC Pharmaceutical Joint Stock Company 7,500 5,000 148,215,260

89,265 86,765 6,600,735,680

7. PROVISION FOR IMPAIRMENT OF SHORT-TERM INVESTMENTS

Name of IssuerAs at 31/12/2014 As at 31/12/2013

Number of Shares

Amount Number of Shares

Amount

Share VND Share VND

Domesco Medical Import Export Joint Stock Corporation

7,500 76,407,520 5,000 147,407,520

Bach Tuyet Cotton Joint Stock Company

10,000 239,465,000 10,000 239,465,000

Mekorphar Chemical Pharmaceutical Joint Stock Company

60,000 3,001,682,140 50,000 3,387,887,900

77,500 3,317,554,660 65,000 3,774,760,420

8. INVENTORIES

31/12/2014 31/12/2013VND VND

Goods in transits 15,851,974,998 21,399,349,064

Materials 156,441,310,006 97,028,943,635

Tools 7,653,989,632 3,122,759,558

Work in progress 16,914,315,650 15,025,411,539

Finished goods 98,737,308,857 63,444,179,931

295,598,899,143 200,020,643,727

Provision for devaluation of inventories (1,031,954,152) (315,677,534)

294,566,944,991 199,704,966,193

During the year, VND 716,276,618 was provided for provision of devaluation of inventories (2013: VND 2,911,150,210 was reversed to provision for devaluation of inventories).



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ear e

nded

31

Dec

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er 2

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FORM

B 0

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9.

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s tha

t hav

e be

en fu

lly d

epre

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ed b

ut a

re st

ill in

use

.

10. INTANGIBLE ASSETS

Land use rights CopyrightComputersoftware

Total

VND VND VND VND

COSTAs at 01/01/2014 60,761,360,233 744,712,823 12,285,898,076 73,791,971,132

Purchases 3,740,187,504 - - 3,740,187,504

Tranfer from CIP 2,677,447,500 - - 2,677,447,500

As at 31/12/2014 67,178,995,237 744,712,823 12,285,898,076 80,209,606,136

ACCUMUNLATED AMORTISATIONAs at 01/01/2014 2,906,931,465 744,712,823 3,002,977,484 6,654,621,772

Charge for the year 528,533,000 - 4,034,371,659 4,562,904,659

As at 31/12/2014 3,435,464,465 744,712,823 7,037,349,143 11,217,526,431

NETBOOK VALUEAs at 31/12/2014 63,743,530,772 - 5,248,548,933 68,992,079,705As at 31/12/2013 57,854,428,768 - 9,282,920,592 67,137,349,360

11. CONSTRUCTION IN PROGRESS

31/12/2014 31/12/2013VND VND

Office in Ba Ria - Vung Tau branch 731,272,727 -

Office in Dong Nai branch 700,000,000 -

Office in Can Tho branch 1,563,795,454 1,800,000,000

Purchase of fixed assets 1,402,927,272 -

Orther 24,545,455 252,684,942

4,422,540,908 2,052,684,942


12. INVESTMENTS IN ASSOCIATES

Details about the Company’s associates as at 31 December 2014 are as follows:

Name of associates

Proportion of

Proportion of voting

Principal activity

Place of incorporation

ownership interest power held

and operation % %

Gia Dai Pharmaceutical Company Limited Ho Chi Minh 26.00% 26.00% Manufacturing and trading pharmaceutical products

Agimexpharm Pharmaceutical Joint Stock Company

An Giang 33.99% 25.86% Manufacturing and trading pharmaceutical products

Spharm Pharmaceutical Joint Stock Company

Soc Trang 29.48% 29.48% Manufacturing and trading pharmaceutical products

Dong Thap Muoi Research Conservation and Development Pharmaceutical Joint Stock Company

Đong Thap 20.00% 20.00% Researching, conserving and developing traditional medicine

Details of the Company’s contributed Capital in associates as at the balance sheet date as follow:

Contributed capital Contributed capital 31/12/2014 31/12/2013 VND VND

Gia Dai Pharmaceutical Company Limited 182,000,000 182,000,000

Agimexpharm Pharmaceutical Joint Stock Company 26,419,806,700 14,393,326,700

Spharm Pharmaceutical Joint Stock Company 8,668,680,000 8,668,680,000

Dong Thap Muoi Research Conservation and Development Pharmaceutical Joint Stock Company

2,340,000,000 2,340,000,000

37,610,486,700 25,584,006,700

Provision for devaluation of investment in Associates (182,000,000) (182,000,000)

37,428,486,700 25,402,006,700

13. OTHER LONG-TERM INVESTMENTS

31/12/2014 31/12/2013VND VND

Central Pharmaceutical Joint Stock Company - No.25 114,550,000 114,550,000

TV.Pharm Pharmaceutical Joint Stock Company 581,428,000 581,428,000

Vidipha Central Pharmaceutical Joint Stock Company 476,000,000 476,000,000

Southern Commercial Joint Stock Bank 127,690,000 127,690,000

Dong Thap Tourist Joint Stock Company - 50,000,000

Danang Pharmaceutical Medical Equipment Joint Stock Company

7,500,000,000 7,500,000,000

8,799,668,000 8,849,668,000

14. LONG TERM PREPAYMENTS

31/12/2014 31/12/2013VND VND

As at 01/01/2014 16,919,261,258 14,591,241,755 Increases 2,559,169,215 3,937,498,840

Charge for ther year (1,707,141,502) (1,004,254,618)

other dedutions - (605,224,719)

As at 31/12/2014 17,771,288,971 16,919,261,258

Long-term prepayments represent the land rentals which have been paid in advance during the period of lease but the land use rights were not issued. These rentals were allocated according to the lease time.

15. TAxES AND AMOUNTS PAYABLE TO THE STAGE BUDGET

31/12/2014 31/12/2013VND VND

Value added tax 1,538,847,534 1,070,545,520

Corporate income tax 6,950,733,552 14,549,943,359

Personal income tac 323,038,828 172,564,358

Others 10,881,682 1,064,865,795

8,823,501,596 16,857,919,032

16. ACCRUES ExPERSES

31/12/2014 31/12/2013VND VND

Royalty fee 9,828,926,303 6,983,498,725

Accured expenses for sales activities 30,198,041,275 7,468,048,831

Others 6,028,273,790 5,574,935,499

46,055,241,368 20,026,483,055

17. OTHER CURRENT PAYABLES

These are long-term deposits of customer to purchase goods from the company. The principle contract is effective until liquidation date and annually renewed unless there is any change in contract terms. These long-term deposits bear an interest rate at 8% per annum within the effective period of the contract.

FORM B 09-DN




18. SCIENTIFIC AND TECHNOLOGICAL DEVELOPMENT FUND

2014 2013VND VND

Opening balance 19,207,077,000 11,500,000,000

Additions 12,200,000,000 10,500,000,000

Utilization (3,909,290,044) (2,792,923,000)

Closing balance 27,497,786,956 19,207,077,000

19. OWNER’S EQUITY

Details of the Company’s par value and shares as folows:

31/12/2014 31/12/2013

Number of authorized shares 26,311,486 16,705,810

Number of Issued and fully paid shares 26,311,486 16,705,810

Number of outstanding shares in circulation 26,311,486 16,405,810

Number of treasury shares - 300,000

Par value (VND) 10,000 10,000

The Company has one class of ordinary share which carries no right to fixed income with par value of VND 10,000/share. The shareholders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at the Company’s shareholders’ meetings. All shares rank equally with regard to the Company’s residual assets.

Actual charter Capital contributed by shareholders as at 31 December 2014 as follows :

Shares and held ratio as at 31/12/2014

Capital contributed as at 31/12/2014

Shares % VND

Vinapharm 6,874,447 26.13% 68,744,470,000

Balestrand Limited 1,746,669 6.64% 17,466,690,000

Franklin Templeton Investment 2,456,820 9.34% 24,568,200,000

Funds-Templeton Frontier Markets Fund

Kwe Beteiligungen AG 2,317,503 8.81% 23,175,030,000

Others 12,916,047 49.09% 129,160,470,000

26,311,486 100% 263,114,860,000

According to Resolution No. 15/ĐHQT-IMEX issued on 19 April 2014 by General Shareholders of Imexpharm Corporation, the shareholders have approved the plan for issuing of 12,236,965 shares with par value VND 10,000/share to increase charter Capital, details as follows:

(a) The Company would issue more 8,352,905 shares in terms of bonus share from share premium for existent shareholders at ratio 2:1 and the Company has been approved by the State Security Commission of Vietnam (“SSC”) under the Official Letter No. 4589/UBCK-QLPH dated 11 August 2014. The Company has completed the issuance of 8,352,776 shares according to the Official Letter No. 214/IMEX dated 08 September 2014 submitted to SSC regarding to report on share issuance to increase share capital by share premium. The number of additionally issued shares have been listed in stock exchange in according to Decision No. 373/QD-SGDHCM dated 26 September 2014 issued by Ho Chi Minh Stock Exchange (“HOSE”).

(b) The Company would issue more 1,252,900 shares to its employees according to Employee Stock Ownership plan (“ESOP”) and the Company has been approved by SSC under the Official Letter No. 5715/UBCK-QLPH dated 21 October 2014. The Company has completed the issuance of 1,252,900 shared according to the Official Letter No. 276/IMEX dated 10 November 2014 and SSC hads approved the report of share issuance under ESOP program by Official Letter No. 6484/UBCK-QLPH dated 21 November 2014. The number of additionally issued shares had been listed in stock exchanged according to Decision No. 483/QD-SGDHCM dated 09 December 2014 issued by HOSE.

(c) And the Company would issue 2,631,160 shares to strategic shareholders. According to Resolution No. 63/HDQT-IMEX dated 18 December 2014 issued by the Company’s Board of Management, the Board of Management has approved to issue more 2,631,160 shares (equivalent to 10% of outstanding shares in circulation) to strategic shareholders with par value of VND 10,000/share in order to increase share capital. They would expect that the issuance price of its share would be equally with selling price belong to 10 market-day on an average of stock market (before the selling date of separate share) and discounted at maximum of 20% average selling price mentioned above but it could not be less than VND 30,000 per share, and the Company has been approved by SSC under the Official Letter No. 7281/UBCK-QLPH dated 31 December 2014. The Company had completed the issuance of 2,631,160 shares according to the Official Letter No. 04/IMEX dated 06 January 2015 reported on result of share issuance to strategic shareholders and SSC has approved the issuance on 09 January 2015. The number of additionally issued shares has been listed in stock exchange according to Decision No. 26/QD-SGDHCM dated 27 January 2015 issued by HOSE.

FORM B 09-DN




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25,0

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00). According to Decision No. 2234/ỌD-CT dated 19 September 2014 and Official Letter No. 2591/TTCP-V.lll dated 27

October 2014 issued by the Government Inspector regarding to purchase of Tamiflu and medicine with active element of Oseltamivir phosphate for preventing influenza A virus subtype (H5NI), the Company was reclaimed an amount of VND 11,154,420,000. Persuant to Resolution No. 42/NQ-HDQT-IMEX dated 23 September 2014, the Board of Managament decided to use the Company’s financial reserve fund to pay for the reclaimation above.

During the year, funds and Board of Management’s remuneration have been appropriated adequately and dividend by cash has been paid to shareholders according to the Resolution of General Shareholders mentioned above.

20. BUSINESS AND GEOGRAPHICAL SEGMENTS

Business segments

The Company’s Principal activities are to manufracture and purchase materials used for Processing pharmaceutical Products and other Products by the Company. Other business activities make up minor ratio in total revenue and operating result of Company in this period as well as previous fiscal years. Hence, the financial information presented in balance sheet as at 31 December 2014 and 31 December 2013 as well as revenues, expenses presented in the income statement for the fiscal year then ended and previous fiscal years are relevant to Principal activities. Consequently, the Company did not prepare the report by business segment.

Geographical segments

The Company’s revenue are generated by consumption the finished goods in domestic whereas the revenue generated by exporting makes up minor ratio in total revenue and operating result of Company in the year ended 31 December 2014 and previous years. Consequently, the Company did not prepare the report by geographical segment.

21. NET REVENUE

2014 2013VND VND

RevenueExported sales 11,678,164,159 14,486,146,826

Manufactured goods sales 747,432,589,237 715,388,922,451

Frachising sales 110,946,042,974 109,827,477,868

Imported goods trading - 3,678,246,544

Other revenue 37,281,501,872 9,375,471,253

907,338,298,242 852,756,264,942

Deductions to salesSales return - (5,406,492,798)

Sales rebeates (1,704,785,835) -

Sales discount (8,497,791,254) (6,033,357,059)

(10,202,577,089) (11,439,849,857)

897,135,721,153 841,316,415,085

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATEM

ENTS

(con

tinue

d)

For t

he y

ear e

nded

31

Dec

emb

er 2

014

FORM

B 0

9-DN



22. COST OF SALES

2014 2013VND VND

Cost of exported goods 8,331,220,556 6,792,141,424

Cost of manufactured goods 352,892,561,033 346,072,118,332

Cost of franchising goods 83,002,531,466 84,329,692,477

Cost of imported goods - 3,183,649,788

Cost of other sales 34,042,274,447 11,090,594,326

478,268,587,502 451,468,196,347

23. OPERATING COST BY NATURE

2014 2013VND VND

Raw materials and consumables 376,783,895,538 346,324,135,339

Labour 146,886,197,887 110,297,654,493

Deprecỉation and amortization 37,443,719,332 32,607,673,607

Out-sourced Services 76,790,909,410 85,202,734,539

Other expenses 137,166,956,066 156,842,297,295

775,071,678,233 731,274,495,273

24. FINANCIAL INCOME

2014 2013VND VND

Bank interest 6,495,439,158 4,276,654,039

Realised foreign exchange gain 1,649,390,956 835,428,345

Unrealised foreign exchange gain 140,179,117 50,746,885

Dividend received 1,268,617,600 952,001,000

Others 7,300,000 91,795,542

9,560,926,831 6,206,625,811

25. FINANCIAL ExPENSES

2014 2013VND VND

Interest expense due to advances from customers 389,764,998 558,888,889

Realised foreign exchange loss 533,648,342 1,097,368,999

Reversal of provision for impairment of financial investments (457,205,760) (4,389,562,562)

Payment discount 7,697,613,899 10,444,828,237

Others 93,252,000 12,000,000

8,257,073,479 7,723,523,563

26. LOSS FROM OTHER ACTIVITIES

2014 2013VND VND

Proceeds from disposals of fixed assets 204,236,364 2,220,090,909

Others 604,484,510 1,928,473,970

Other income 808,720,874 4,148,564,879

Book value of disposed assets - 1,516,989,594

Depreciation of Pennicilin factory in Binh Duong - 4,288,989,245

Others 1,694,643,055 810,411,922

Other expenses 1,694,643,055 6,616,390,761

Loss from other activities (885,922,181) (2,467,825,882)

FORM B 09-DN




27. CURRENT CORPORATE INCOME TAx ExPENSE

2014 2013VND VND

Profit before Scientific and technological developmentfund

122,481,974,091 106,057,196,178

Scientific and technological development fund 12,200,000,000 10,500,000,000

Accounting profit before tax 110,281,974,091 95,557,196,178

Add back: non-deductible expenses 2,429,622,890 45,126,711,765

Less: non-assessable income (1,332,974,324) (952,001,000)

Assessable income 111,378,622,657 139,731,906,943 In which:+ Assessabỉe income of Principal aclivities 111,378,622,657 139,731,906,943

+ Assessable income of land use right transferring - 1,241,525,000

Tax rate 22% 25%

Current Corporate Income Tax Expense 24,503,296,985 34,932,976,736 + Corporate Income Tax of Principal activities 24,503,296,985 34,622,595,486

+ Corporate Income Tax of land use right transferring - 310,381,250

The Company is obliged to pay corporate income tax at the rate of 22% of its assessable (2013: 25%).

No deferred tax assets and liabilities are recognized as there are no significant temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax base used in the computation of taxable profit.

28. BASIC EARNINGS PER SHARE

The calculation of the basic and diluted earnings per share attributable to the ordinary equity holders of the parent is based on the following data:

20142013

(Restated)VND VND

Profits attributable to the Company’s shareholders 85,778,677,106 60,624,219,442

Eamings for the purposes of basic eamings per share calculation 85,778,677,106 60,624,219,442

Weighted average number of ordinary shares 25,074,336 24,758,586

Basic earnings per share 3,421 2,449

For purpose of presenting the comparative fugure of financial statements for the year ended 31 December 2014, basic earnings per share for the year ended 31 December 2013 has been restated because the Company issued more 8,352,776 shares in terms of bonus share from share premium for current shareholders at ratio 2:1. Details are as belows:

Weighted average Basis earningsnumber of ordinary

sharesper share

(VND)

Previously reported amount 16,405,810 3,695

Adjustment for the effect of bonus share issuance 8,352,776 (1,246)

Amount after adjustment 24,758,586 2,449

29. OPERATING LEASE COMMITMENTS

2014 2013VND VND

Minimum lease payments under operating leases recognised in the income statement for the year 562,571,626 535,322,909

At the balance sheet date, the Company had outstanding commitments under non-cancelable operating leases, which fall due as follows:

31/12/2014 31/12/2013VND VND

On demand 150,000,000 138,000,000

ln the second to fifth year inclusive 270,000,000 -

After five years 2,500,000 -

422,500,000 138,000,000

Operating lease payments represent the total rentals payable by the Company for renting premises to organize drug store over the country.

30. FINANCIAL INSTRUMENTS

Capital risk management

The Company manages its capital to ensure that the Company will be able to continue as a going concern while maximising the return to owner through the optimization of the debt and equity balance.

The capital structure of the Company consists of net debts and equity of shareholders (comprising share capital,share premium, other owner’s capital, treasury share, reserves and retained earnings).

Significant accounting policies

Details of the significant accounting policies and methods adopted (including the criteria for recognition, the bases of measurement, and the bases for recognition of income and expenses) for each class of financial asset and financial liability are disclosed in Note 4.

FORM B 09-DN




FORM B 09-DN



Categories of financial instruments

Carrying amount

31/12/2014 31/12/2013 VND VND

Financial assets Cash and cash equivalents 178,550,050,326 192,255,383,511

Short-term investments 3,283,181,020 2,825,975,260

Trade and other receivables 206,576,595,213 151,801,741,928

Deposits 1,414,709,121 2,348,720,667

Long-term financial investments 8,617,668,000 8,667,668,000

Total 398,442,203,680 357,899,489,366

Einancial liabilitics

Trade and other payables 118,373,756,553 66,764,253,595

Accrued expenses 46,055,241,368 20,026,483,055

Deposits - 300,000,000

Total 164,428,997,921 87,090,736,650

The Company has not assessed fair value of its financial assets and liabilities as at the balance sheet date since there are no comprehensive guidance under Circular 210/2009/TT-BTC issued by the Ministry of Finance on 6 November 2009 (“Circular 210”) and other relevant prevailing regulations to determine fair value of these financial assets and liabilities. While Circular 210 refers to the application of International Financial Reporting Standards (IFRS) on presentation and disclosures of financial instruments, it, however, did not give the equivalent guidance on assessment and recognition of financial instruments, including application of fair value, in accordance with IFRS.

Financial risk management objectives

The Company has set up risk management system to identify and assess the risks exposed by the Company and designed control policies and procedures to manage those risks at an acceptable level. Risk management system is reviewed on a regular basis to reflect changes in market conditions and the Company’s operations.

Financial risks include market risk (including foreign currency risk and price risk), credit risk and liquidity risk.

Market risk

The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and prices. The Company does not hedge these risk exposures because the Board of General Directors assessed that the costs to be incurred to hedge these risks may exceed the inherent cost caused by the fluctuation of the foreign exchange rates and interest rates of these financial instruments.

Foreign currency risk management

The Company undertakes certain transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the end of the year are as follows:

Assets Liabililies

31/12/2014 31/12/2013 31/12/2014 31/12/2013

VND VND VND VND

United states Dollar (USD)

9,581,205,757 28,098,771,883

87,559,798,877 45,689,234,804

Euro (EUR) - - 1,682,003,405 971,072,355

Foreign currency sensitivity analysis

The Company was mainly exposed to the United States Dollar.

The following analysis details the Company’s sensitivity to a 5% increase and decrease in Vietnam Dong against United States Dollar. 5% is the sensitivity rate used when reporting foreign currency risk internally to the Board of General Directors and represents the Board of General Directors’ assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in foreign currency rates. For a 5% increase/decrease in United States Dollar against Vietnam Dong, the profit before tax in the year would decrease/increase by VND 3,898,929,656 (2013: VND 879,523,146).

Commodity price risk management

The Company purchases materials, commodities from local and foreign suppliers for business purpose. Therefore, the Company is exposed to the risk of changes in selling prices of materials, commodities.

Share price risk management

Shares held by the Company are affected by market risks arising from the uncertainty about future prices of such shares. The Company manages this risk exposure by setting up investment limits. The Company’s Board of Management also assesses and approves decisions on share investments such as operating industry, investees, etc. The Company assesses the share price risk to be immaterial.

Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. The Company does not have any significant credit risk exposure to any counterparty because receivables consist of a large number of customers, spread across diverse industries and geographical areas.

Liquidity risk management

The purpose of liquidity risk management is to ensure the availability of funds to meet present and future financial obligations. Liquidity is also managed by ensuring that the excess of maturing liabilities over maturing assets in any period is kept to manageable levels relative to the amount of funds that the Company believes can generate within that period. The Company’s policy is to regularly monitor current and expected liquidity requirements to ensure that the Company maintains sufficient reserves of cash, borrowings and adequate committed funding from its shareholders to meet its liquidity requirements in the short and longer term.


FORM B 09-DN



The following tables detail the Company’s remaining contractual maturity for its non-derivative financial assets and financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial and undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. The inclusion of information on non-derivative financial assets is necessary in order to understand the Company’s liquidity risk management as the liquidity is managed on a net asset and liability basis.

Less than 1 year More than 1 year Total VND VND VND

As at 31/12/2014Cash and cash equivalents 178,550,050,326 - 178,550,050,326

Short-term investments 3,283,181,020 - 3,283,181,020

Trade and other receivables 206,576,595,213 - 206,576,595,213

Deposits 1,414,709,121 - 1,414,709,121

Long-term financial investments - 8,617,668,000 8,617,668,000

Total 389,824,535,680 8,617,668,000 398,442,203,680


As at 31/12/2014 Trade and other payables 113,296,756,553 5,077,000,000 118,373,756,553

Accrued expenses 46,055,241,368 - 46,055,241,368

Total 159,351,997,921 5,077,000,000 164,428,997,921

Net liquidity gap 230,472,537,759 3,540,668,000 234,013,205,759


As at 31/12/2013 Cash and cash equivalents 192,255,383,511 - 192,255,383,511

Short-term investments 2,825,975,260 - 2,825,975,260

Trade and other receivables 151,801,741,928 - 151,801,741,928

Deposits 2,348,720,667 - 2,348,720,667

Long-term financial investments - 8,667,668,000 8,667,668,000

Total 349,231,821,366 8,667,668,000 357,899,489,366


As at 31/12/2014Trade and other payables 61,667,253,595 5,097,000,000 66,764,253,595

Accrued expenses 20,026,483,055 - 20,026,483,055

Deposits 300,000,000 - 300,000,000

Total 81,993,736,650 5,097,000,000 87,090,736,650

Net liquidity gap 267,238,084,716 3,570,668,000 270,808,752,716

The Board of General Directors assessed the liquidity risk at low level. The Board of General Directors believes that the Company will be able to generate sufficient funds to meet its financial obligations as and when they fall due.

31. RELATED PARTY TRANSACTIONS AND BALANCES

List of related parties:

Related party Relationship

Gia Dai Pharmaceutical Company Limited Associate

Agimexpharm Pharmaceutical Joint Stock Company Associate

Spharm Pharmaceutical Joint Stock Company Associate

Related party balances at the balance sheet date were as follows:

31/12/2014 31/12/2013VND VND

Trade receivables

Gia Dai Phamiaceutical Company Limited 16,995,023 6,944,814,539

Agimexphartn Pharmaceutical Joint Stock Company 21,488,191,822 747,884,064

Spharm Pharmaceutica Joint Stock Company 1,071,068,211 -

31/12/2014 31/12/2013VND VND

Trade payahlesSpharm Pharmaceutical Joint Stock Company 145,284,300 -

Agimexpharm Pharmaceutical Joint Stock Company 805,996,275 -


During the year, the Company entered into the following significant transactions with its related parties:

2014 2013VND VND

SalesAgimexpharm Pharmaceutical Joint Stock Company 34,810,862,998 11,954,183,471

Spharm Pharmaceutical Joint Stock Company 3,701,879,419 182,995,021

Purchase

Agimexpharm Pharmaceutical Joint Stock Company 15,080,185,260 11,028,655,155

Spharm Pharmaceutical Joint Stock Company 928,447,380 951,302,100

Remuneration of the Board of Management and Board of General Directors

Remuncration of the Board of Management and Board of General Dircctors

Remuneration paid to members of the Board of Management and Board of General Directors of the Company during the year was as follows:

2014 2013VND VND

Salaries, bonus and benefits in kind 10,324,923,050 8,200,000,000


Tran Hoai HanhChief Accoutant

Nguyen Quoc DinhDeputy General Director

25 March 2015

On September 23, 2014, Imexpharm Pharmaceutical JSC announced: “On September 19, 2014, The Government General Inspector, based on Document No. 1001/VPCP-VI on June 9, 2014 gave “Notice of steering opinion of Prime Minister Nguyen Tan Dung on disposal after inspecting Tamiflu medicine reserve” to promulgate Decision No: 2234/QD-TTCP. The Content of the decision is as follows:

“Imexpharm Pharmaceutical JSC must pay 697,500 USD (In words: Six hundred ninety-seven thousand five hundred USD) within a period of 30 days in the custody account of Government Inspector”.

The Company has accepted the decision above and used financial reserve fund to pay the amount of 11,154,420.000 dong (Government accepted the conversion at the exchange rate in 2006 of 15,992 VND/USD)

On April 29, 2014, Imexpharm JSC also received the opinion sent to Government General Inspector on this decision. The full text of opinion as follows:

IMExPHARM SOCIALIST REPUBLIC OF VIETNAM PHARMACEUTICAL JSC Independence – Freedom - Happiness

-------- ------------------------------------ No.237/YK-IMP Cao Lanh City, September 24, 2014

LETTER OF OPINIONSFor Decision No.: 2234/QD-TTCP on September 19, 2014

of Government General Inspector

----------------------

Respectfully addressed to: Government General Inspector

Organization in concerned: IMEXPHARM PHARMACEUTICAL JSC

Address: No. 4, street 30/4, Ward 1, Cao Lanh City, Dong Thap Province.

Legal representative: Pharmacist Tran Thi Dao – General Director.

On September 22, 2014 Imexpharm Pharmaceutical JSC received Decision No.: 2234/QD-TTCP on September 19, 2014 of Government General Inspector, including the following content:

“Imexpharm Pharmaceutical JSC must pay 697,500 USD (In words: Six hundred ninety-seven thousand five hundred USD) within a period of 30 days into the custody account of Government Inspector according to address: Account name: Prime Minister Office; Account: 3949.1090978 at State treasury, Cau Giay, Hanoi”.

Today, Imexpharm JSC official has opinion with some content as follows:

1. First: As a public company with large scale in the stock market (According to Circular 52/2012/TT-BTC), in the Top-5 of Vietnam Pharmaceutical Industry, Imexpharm Pharmaceutical JSC executes Decision No.: 2234/QD-TTCP on September 19, 2014 of Government General Inspector: about the payment of the amount of 697,500 USD (In words: Six hundred ninety-seven thousand five hundred USD) into custody account of Government Inspector as stated therein, although we do not realize there are violation of economic management regime prescribed by law. We would like to interpret in detail in part 2 below.

FORM B 09-DN


APPENDIXEXPLANATION FOR THE PENALTY RELATING TO TAMIFLU


EXPLANATION FOR THE PENALTY RELATING TO TAMIFLU EXPLANATION FOR THE PENALTY RELATING TO TAMIFLU

2. Second: Imexpharm JSC states that: Imexpharm Pharmaceutical JSC does not violate economic management regime prescribed by law; and Imexpharm does not violate any provision in Economic Contract No.: 01/HDMS-BQLTHPCDCA-2006 on January 17, 2006 signed with Ministry of Health on manufacturing and selling capsules of seltamivir 75mg to prevent flu A (H5N1).

This determination content of Imexpharm Company is based on the following legal bases:

- Economic nature of Contract No.: 01/HDMS-BQLTHPCDCA-2006 on January 17, 2006 signed between Ministry of Health and Imexpharm Pharmaceutical JSC as finished product purchase contract (not related to raw materials). The purchase price per Oseltamivir 75mg capsule is 27,765.5 dong (excluding VAT) was assessed and approved by Ministry of Finance in Document 07/BTC-QLG on January 16, 2006. The Economic Contract was liquidated on May 29, 2007.

- In Clause 2, Notification No. 07/TB-VPCP on January 20, 2011 of Government Office informs opinion of Prime Minister Nguyen Tan Dung in Government Permanent meeting on inspection results to buy Tamiflu medicine and medicine with active Oseltamivir phosphate to prevent of flu A(H5N1): Assign Ministry of Finance to chair and coordinate with Prime Minister and Ministry of Health to determine the amount of 2,846,000USD transferred by Stada Import/Export Hong Kong Company to 3 companies of Stada Vietnam, Imexpharm and Pymepharco due to discount raw materials or subsidized, based on that to propose treatment as prescribed by law.

- Before the loss and damage due to participate in production project of Oseltamivir 75mg capsule with Joint Ministry Finance – Health, Imexpharm Company was based on actual damages during production and based on Article 04 of Technology transfer agreement, negotiated with Stada Import/Export Hong Kong Company on the proposal for compensation for damage caused by: Actual output was lower than the agreed output in Technology Transfer Agreement; and actual cost was higher than the approved price of Ministry of Finance. With international trade practice and agreements in the Technical Transfer Agreement, Stada Import/Export Hong Kong Company has accepted to compensate the damages to Imexpharm Company with the amount of 986,000 USD, equivalent to 15,699,092,000 dong. Stada Import/Export Hong Kong Company had document to confirm the amount of 986,000 USD that Stada Import/Export Hong Kong Company agreed to compensate to Imexpharm, this amount was not the discount for raw material of Oseltamivir phosphate.

- Imexpharm Company has accounted the amount of 986,000 USD into price cost decrease in the settlement quarter I, 2006 to compensate the damages due to perform production project of Oseltamivir 75mg capsule according to Decision No. 04/QĐ-BYT of Ministry of Health. The Financial settlement statement in 2006 of the company was certified by Audit Company and approved by the General Meeting of Shareholders in 2006. In addition, Imexpharm JSC also performed full tax obligation with State budget on the amount of this damage compensation.

- Over the interpretation above, it can confirm that: The amount that Stada Import/Export Hong Kong Company compensated for damages has accounted transparently and in accordance with principles and production and business results during the period in the year 2006 by Imexpharm Company and approved by General Meeting of Shareholders with the approval of investors and shareholders of the company.

Third: Proposals of Imexpharm Pharmaceutical JSC

If Imexpharm JSC must pay immediately the amount of 697,500 USD, it will be affect strongly the business capital of the Company in general difficult situation at present and this will also be risks that may occur to the share of shareholders and investors of Imexpharm. Therefore, we would like to propose as follows:

- The amount that Stada Import/Export Hong Kong Company compensated Imexpharm JSC has already converted and paid according to the current exchange rate at the time of 2006. Therefore, Imexpharm JSC respectfully request Government General Inspector reviews so that Imexpharm may pay the amount that is converted into Vietnam dong according to exchange rate in 2006 as 15,992 VND/1USD and be deferred this payment to the end of December 31, 2016 (divided into several stages) to reduce losses and risks for Imexpharm.

- Respectfully request Government General Inspector to direct Ministry of Health to pay Imexpharm JSC 02 debts: 1/. The debt of 889,560,000 dong of Economic Contract No. : 01/HDMS-BQLTHPCDCA-2006 on purchase Oseltamivir 75mg capsules and Minutes of Contract liquidation No.: 01/BBTL-BQLTHKHPCDCA-2007 on May 29, 2007; 2/. The debt from purchasing insurance during storage of 278,074,706 dong.

We hope that Government General Inspector early considers creating conditions to Imexpharm JSC to comply with the period of Decision No.: 2234/QĐ-TTCP.

Sincerely thanks and best regards./.

Recipients: GENERAL DIRECTOR

- As above; (Signed)

- Government office

- Ministry of Health

- Ministry of Finance

- On File with Company


EXPLANATION FOR THE PENALTY RELATING TO TAMIFLU EXPLANATION OF ABBREVIATIONS USED IN THE REPORT

EU-GMP : Good manufacturing practice according to European standards

WHO-GMP : Good manufacturing practice according to World Health Organization standards

WHO-GLP : Good laboratory practice according to World Health Organization standards

WHO-GSP : Good storage practice according to World Health Organization standards

HOSE : HCMC Stock Exchange

ROS : Return on sales (Profit after tax)/net revenue

ROE : Return on Equity (Profit after tax)/Average equity

ROA : Return on Assets (Profit after tax)/Total average assets

OTC : Non-prescription drug

ETC : Prescription drug

BSC : Balance scorecard

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