Deloitte. ..- IMEXPHARM PHARMACEUTICAL JOINT STOCK COMPANY AUDITED FINANCIAL STATEMENTS - (Incorporated in Socialist Republic of Vietnam)

Transcription

1 Deloitte... IMEXPHARM PHARMACEUTICAL JOINT STOCK COMPANY (Incopoated in Socialist Republic of Vietnam) AUDITED FINANCIAL STATEMENTS Fo the yea ended 31 Decembe 2016

2 No.4 Steet 30/4, Cao Lanh City Dong Thap Povince, Vietnam TABLE OF CONTENTS CONTENTS STATEMENT OF THE BOARD OF GENERAL DIRECTORS page(s) 1 INDEPENDENT AUDITORS' REPORT 2 BALANCE SHEET 34 INCOME STATEMENT CASH FLOW STATEMENT 5 6 NOTES TO THE FINANCIAL STATEMENTS 7 27,...,...

3 No.4 Steet 30/4, Cao Lanh City Dong Thap Povince, Vietnam STATEMENT OF THE BOARD OF GENERAL DIRECTORS,... The Boad of Geneal Diectos of Imexpham Phamaceutical Joint Stock Company (the "Company") pesents this epot togethe with the Company's financial statements fo the yea ended 31 Decembe THE BOARDS OF MANAGEMENT AND GENERAL DIRECTORS The membes of the Boads of Management and Geneal Diectos of the Company who held office duing the yea and to the date of this epot ae as follows: Boad of Management M. Nguyen Quoc Dinh Ms. Tan Thi Dao M. Vo Huu Tuan M. Huynh Van Nhung M. Nguyen Quy Son M. Tan Anh Tuan M. Ngo Minh Tuan M. Tuong Viet Vu Chaiman Vice Chaiman Membe Membe Membe Membe Membe Membe,..., :,,... I Boad of Geneal Diectos Ms. Tan Thi Dao M. Nguyen Quoc Dinh M. Huynh Van Nhung M. Ngo Minh Tuan M. Le Van Nha Phuong M. Tan Hoai Hanh Geneal Diecto Deputy Geneal Diecto Deputy Geneal Diecto Deputy Geneal Diecto Deputy Geneal Diecto (appointed on 04 Januay 2017) Chief Accountant BOARD OF GENERAL DIRECTORS' STATEMENT OF RESPONSIBILITY The Boad of Geneal Diectos of the Company is esponsible fo pepaing the financial statements, which give a tue and fai view of the financial position of the Company as at 31 Decembe 2016, and its financial pefomance and its cash flows fo the yea, then ended in accodance with Vietnamese Accounting Standads, accounting egime fo entepises and legal egulations elating to financial epoting. In pepaing these financial statements, the Boad of Geneal Diectos is equied to: Select suitable accounting policies and then apply them consistently; Make judgments and estimates that ae easonable and pudent; State whethe applicable accounting pinciples have been followed, subject to any mateial depatues disclosed and explained in the financial statements; Pepae the financial statements on the going concen basis unless it is inappopiate to pesume that the Company will continue in business; and Design and implement an effective intenal contol system fo the pupose of popely pepaing and pesenting the financial statements so as to minimise eos and fauds. The Boad of Geneal Diectos is esponsible fo ensuing that pope accounting ecods ae kept, which disclose, with easonable accuacy at any time, the financial position of the Company and that the financial statements comply with Vietnamese Accounting Standads, accounting egime fo entepises and legal egulations elating to financial epoting. The Boad of Geneal Diectos is also esponsible fo safeguading the assets of the Company and hence fo taking easonable steps fo the pevention and detection of fauds and othe iegulaities. has complied with the above 1 NHI ing II\EN Uil 1, TP.',... I,..., 1

4 Oeloitte. No. LtJ=J /VN1AHC8C Oeloitte Vietnam Company Ltd. 18 th Floo, Times Squae Building, 5769F Dong Khoi Steet, Ben Nghe Wad, Distict 1, Ho Chi Minh City, Vietnam Tel: Fax: INDEPENDENT AUDITORS' REPORT To: The Shaeholdes The Boads of Management and Geneal Diectos Imexpham Phamaceutical Joint Stock Company We have audited the accompanying financial statements of Imexpham Phamaceutical Joint Stock Company (the "Company"), pepaed on 15 Mach 2017 as set out fom page 03 to page 27, which compise the balance sheet as at 31 Decembe 2016, and the statement of income and statement of cash flows fo the yea then ended, and a summay of significant accounting policies and othe explanatoy infomation. Boad of Diectos' Responsibility fo the Financial Statements The Boad of Diectos of the Company is esponsible fo the pepaation and fai pesentation of these financial statements in accodance with Vietnamese Accounting Standads, accounting egime fo entepises and legal egulations elating to financial epoting and fo such intenal contol as the Boad of Diectos detemines is necessay to enable the pepaation of financial statements that ae fee fom mateial misstatement, whethe due to faud o eo. Auditos' Responsibility Ou esponsibility is to expess an opinion on these financial statements based on ou audit. We conducted ou audit in accodance with Vietnamese Standads on Auditing. Those standads equie that we comply with ethical equiements and plan and pefom the audit to obtain easonable assuance about whethe the financial statements ae fee fom mateial misstatement. An audit involves pefoming pocedues to obtain audit evidence about the amounts and disclosues in the financial statements. The pocedues selected depend on the auditos' judgment, including the assessment of the isks of mateial misstatement of the financial statements, whethe due to faud o eo. In making those isk assessments, the auditos conside intenal contol elevant to the Company's pepaation and fai pesentation of the financial statements in ode to design audit pocedues that ae appopiate in the cicumstances, but not fo the pupose of expessing an opinion on the effectiveness of the Company's intenal contol. An audit also includes evaluating the appopiateness of accounting policies used and the easonableness of accounting estimates made by the Boad of Diectos as well as evaluating the oveall pesentation of the financial statements. 00;."'" JIH TV iju n ;AN /c.\ We believe that the audit evidence we have obtained is sufficient and appopiate to povide a basis fo ou audit opinion. Opinion Tan Kim Long Hai Audito Audit Pactising Registation Cetificate No Deloitte efes to one o moe of Deloitte Touche Tohmatsu Limited, a UK pivate company limited by guaantee ("DTTL"), its netwok of membe fims, and thei elated entities. DTTL and each of its membe fims ae legally sepaate and independent entities. DTTL (also efeed to as "Deloitte Global") does not povide sevices to clients. Please see fo a moe detailed descipon of DTTL and its membe fims.

5 FORM B 020N No.4 Steet 30/4, Cao Lanh City Issued unde Cicula No.200/2014/TTBTC Dong Thap Povince, Vietnam dated 22 Decembe 2014 of the Ministy of Finance. BALANCE SHEET As at 31 Decembe 2016 Unit:.. ASSETS Codes Notes Closing balance Opening balance A. CURRENTASSETS ,079,359, ,701,467,114 I. Cash and cash equivalents ,127,453,686 87,841,659, Cash ,127,453,686 42,841,659, Cashequivalents ,000,000,000. II. Shottem financial investments ,392,915, ,568,325, Tading secuities ,235,578,160 6,619,485, Povisionfo impaiment of tading secuities (2,842,662,900) (3,051,160,420) 3. Heldtomatuity investments ,000,000, ,000,000,000,. III. Shottem eceivables ,177,121, ,541,396, Shottem tade eceivables ,338,284, ,893,207, Shottem advancesto supplies ,056,182,137 54,729,704, Othe shottem eceivables ,082,573,351 33,626,931, Povisionfo shottem doubtful debts (15,299,917,969) (14,708,446,327),.. IV. Inventoies ,563,410, ,718,867, Inventoies ,661,420, ,410,602, Povisionfo devaluation of inventoies 149 (1,098,009,966) (691,735,723) V. Othe shottem assets 150 3,818,458,589 5,031,218, Shottem pepayments ,584, ,468, Value added tax deductibles 152 2,495,941,189 3,707,500, Taxesand othe eceivables fom the State budget ,933, ,249,599./',... B. NONCURRENTASSETS ,765,676, ,013,281,318 I. Longtem eceivables ,244,740 76,244, Othe longtem eceivables ,244,740 76,244,740 II. Fixed assets ,023,540, ,381,208, Tangible fixed assets ,269,755, ,041,437,356 Cost ,505,024, ,128,772,252 Accumulated depeciation 223 (285,235,269,821) (251,087,334,896). 2. Intangible assets ,753,785,382 71,339,770,811 Cost ,196,453,094 87,127,046,094 Accumulated amotisation 229 (17,442,667,712) (15,787,275,283) Ill. Longtem assets in pogess ,033,490,844 15,229,088,635 I 1. Longtem constuction in pogess ,033,490,844 15,229,088,635 IV. Longtem financial investments ,916,689,150 48,601,654, Investments in associates ,581,576,700 39,956,986, Equity investments in othe entities ,526,668,000 8,826,668, Povisionfo impaiment of longtem financial investments 254 (191,555,550) (182,000,000) V. Othe longtem assets ,711,711,475 20,725,085, Longtem pepayments ,711,711,475 20,725,085,076 I TOTAL ASSETS(270= ) ,845,035,757 1,092,714,748,432 I The accompanying notes ae an integal pat of these financial statements 3 '1J /.. j7

6 FORM B 02DN No.4 Steet 30/4, Cao Lanh City Issued unde Cicula No.200/2014[1TBTC Dong Thap Povince, Vietnam dated 22 Decembe 2014 of the Ministy of Finance BALANCE SHEET (Continued) As at 31 Decemeb 2016,.. Unit: RESOURCES Codes Notes Closing balance Opening balance C. LIABILITIES ,928,625, ,883,740,216 I. Cuent liabilities ,130,931, ,439,039, Shottem tade payables ,702,890,996 56,005,703, Shottem advances fom customes ,447,370 1,982,940, Taxes and amounts payable to the State budget ,452,346,308 13,002,004, Payables to employees ,858,730,187 21,957,790, Shottem accued expenses ,530,614,372 41,823,288, Shottem uneaned evenue ,053,818,688, Othe shottem payables ,478,972,181 1,747,203, Bonus and welfae funds 322 4,437,929,814 7,866,289,645,. II. longtem liabilities ,797,693,918 29,444,700, Othe longtem payables ,000, ,000, Scientific and technological development fund ,720,693,918 29,317,700,576 D. EQUITY ,916,410, ,831,008,216 I. Ownes' equity ,916,410, ,831,008, Ownes' contibuted capital ,426,460, ,426,460,000 Odinay shaes caying voting ights 411a 289,426,460, ,426,460, Shae pemium ,713,719, ,733,719, Othe ownes' capital 414 2,420,789,142 2,420,789, Teasuy shaes 415 (123,600,000) 5. Investment and development fund ,924,234, ,200,344, Retained eanings ,554,807,500 85,049,695,558 Retained eanings accumulated to the pio yea end 421a 395,462, ,179,117 Retained eanings of the cuent peiod 421b 91,159,344,647 84,909,516,441, TOTALRESOURCES(440 = ) 440 1,155,845,035,757 1,092,714,748,432 "J. Duong Hoang Vu Pepae Tan Hoai Hanh Chief Accountant guyen QUOC Dinh Deputy Geneal Diecto 15 Mach 2017 The accompanying notes ae an integal pat of these financial statements 4

7 FORM B 02DN No.4 Steet 30/4, Cao Lanh City Issued unde Cicula No.200/2014/TTBTC Dong Thap Povince, Vietnam dated 22 Decembe 2014 of the Ministy of Finance oo INCOME STATEMENT Fo the yea ended 31 Decembe 2016,...,... Unit: ITEMS Codes Notes Cuent yea Pio yea 1. Goss evenue fom goods sold and sevices endeed ,058,636,217,384 1,012,732,462, Deductions ,290,039,079 48,413,617, Net evenue (10=0102) ,010,346,178, ,318,844, Cost of sales ,293,119, ,059,144,497,.. 5. Goss pofit (20=1011) ,053,059, ,259,700, FinancialIncome ,095,901,535 17,837,370, Financialexpenses ,235,695,127 15,230,727,129 In which: Inteest expense 23 55,154, ,820, Sellingexpenses ,874,154, ,149,502, Geneal and administation expenses ,262,508,964 72,788,824, Opeating pofit (30=20+(2122)(25+26) ) ,776,602, ,928,015, Othe Income ,600,144, ,830, Othe expenses ,860,688,559 2,182,318, Lossfom othe activities (40=3132) 40 (260,544,304) (1,249,488,383) 14. Accountingpofit befoe tax (50=30+40) ,516,058, ,678,527, Cuent copoate income tax expense ,356,713,448 25,769,011, Net pofit afte copoate income tax ,159,344,647 92,909,516, Basiceanings pe shae ,076 2,825 Duong Hoang Vu Pepae Tan Hoai Hanh Chief Accountant yen Quoc Dinh =='f eputy Geneal Diecto 15 Mach 2017 The accompanying notes ae an integal pat of these financial statements 5

8 IMEXPHARM PHARMACEUTICALJOINT STOCKCOMPANY FORM B 03DN No.4 Steet 30/4, Cao Lanh City Issued unde Cicula No.200/2014/TTBTC Dong Thap Povince, Vietnam dated 22 Decembe 2014 of the Ministy of Finance CASH FLOW STATEMENT Fo the yea ended 31 Decembe 2016 Unit: ITEMS Codes Cuent yea Pio yea I. CASH FLOWS FROM OPERATING ACTIVITIES 1..Pofit befoe tax 2. Adjustments fo: Depeciation Povisions Foeign exchange Gain fom investing Inteest and amotisation loss/(gain) activities expense fo advances fom customes Scientific and technological development fund 3. Opeating pofit befoe movements in woking capital Incease in eceivables Decease in Inventoies Decease in accounts payable Incease in pepaid expenses Decease, incease in tading Inteest paid secuities Copoate income tax paid Outflows fo Scientific and technological development fund Othe cash outflows Net cash geneated by opeating activities II. CASH FLOWS FROM INVESTING ACTIVITIES 1. Acquisition of fixed assets and Investment in constuction in pogess 2. Poceeds fom sale, disposal of fixed assets 3. Cash outflow fo lending 4. Cash ecoveed fom lending 5. Investments in othe entities 6. Inteest eaned, dividends and pofits eceived Net cash used in investing activities III. CASH FLOWS FROM FINANCING ACTIVITIES 1. Poceeds fom ownes' contibuted capital 2. Buyback of Issued shaes 3. Dividends and pofits paid Net cash (used in)/geneated activities by financing Net decease in cash duing the yea (50= ) Cash and cash equivalents at the beginning of the yea Effects of changes in foeign exchange ates Cash and cash equivalents (70= ) at the end of the yea ,51.6,058,095 37,320,990, ,803, ,230,615 (7,950,716,023) 55,154,439 14,000,000, ,706,521.,575 (8,928,274,802) 10,749,182,912 (25,111,605,021) (6,916,742,468) 383,907,520 (55,154,439) (22,380,008,319) (14,000,000,000) (20,797,176,903) 84,650,650,055 (103,904,028,053) 1,351,000,000 (12,000,000,000) 100,000,000,000 (12,324,590,000) 12,536,832,829 (1.4,340,785,224) (123,600,000) (57,885,292,000) (58,008,892,000) 12,300,972,831 87,841,659, (15,178,605) 100,127,453, ,678,527, ,402,557,093 5,909,837,945 (255,283,736) (13,966,939,106) 605,820,692 13,000,000, ,374,520,500 (67,603,937,266) 49,188,296,195 (36,890,804,770) (8,856,776,311) (18,750,000) (605,820,692) (26,090,729,363) (13,000,000,000) (13,696,525,838) 44,799,472,455 (75,389,386,749) 584,545,454 (100,000,000,000) (2,373,500,000) 8,679,738,858 (1. 68,498,602,437) 85,087,485,440 (52,096,762,800) 32,990,722,640 (90,708,407,342) 178,550,050,326 16,476 87,841,659,460 III NI CONG HNHI ao llet I = I" Duong Hoang Vu Pepae The accompanying Tan Hoai Hanh Chief Accountant notes ae an integal pat of these financial statements 6 Nguyen Quoc Dinh Deputy Geneal Diecto 15 Mach 2017

9 FORM B 09DN NO.4 Steet 30/4, Cao Lanh City Issued unde Cicula No.200/2014/TTBTC Dong Thap Povince, S.R Vietnam dated 22 Decembe 2014 of the Ministy of Finance NOTES TO THE FINANCIAL STATEMENTS These notes ae an integal pat of and should be ead in conjunction with the accompanying financial statements 1. GENERAL INFORMATION Stuctue of owneship Imexpham Phamaceutical Joint Stock Company (the "Company"), fomely known as Dong Thap Phamaceautical Union incopoated unde Decision No. 284/TCCQ dated 28 Septembe 1983 issued by the Health Depatment of Dong Thap Povince, was tansfomed fom a state entepise into a joint stock company unde Business Registation Cetificate No dated 01 August 2001 fist issued by the Depatment of Planning and Investment of Dong Thap Povince and subsequent amendments cetificates theeafte with the latest amendment (the twentyfouth amendment) dated 06 Mach The Company's stocks ae listed in Ho Chi Minh Stock Exchange unde Decision No. 76/UBCKGPNY dated 04 Decembe 2006 with code IMP. The numbe of employees of the Company as at 31 Decembe 2016 was 1,020 (as at 31 Decembe 2015: 1,012). Pincipal activities The pincipal activities of the Company ae manufactuing phamaceutical poducts, pocessing phamaceutical mateials, tading, impoting and expoting phamaceutical poducts, medical equipment and supplies, chemicals, mateials fo medicine manufactuing and packaging, chemicals used fo steilization o disinfection in humans (except fo those listed unde Point A, Pat II, Appendix No. 04 accompanying Decision No. 10/2007/QDBTM dated 21 May 2007 issued by Ministy of Tade, cuently known as Ministy of Industy and Tade); othe activities include tading cosmetics; gowing taditional medicines; tading foods, functional foods, beveages, alcoholic dinks, fizzy dinks; manufactuing milks; financial activities; poducing functional foods, nutitional food; poviding stoage system sevices fo medicine, phamaceutical mateials; etailing medicines, medical equipment, cosmetics and hygiene poducts in specialized stoes. Nomal poduction and business cycle The Company's nomal poduction and business cycle is caied out fo a time peiod of 12 months o less. Disclosue of infomation compaability in the financial statements Compaative figues ae the figues of the audited financial statements fo the yea ended 31 Decembe ( :ANH'\ TV 'lhuuhi TTE 2. ACCOUNTING CONVENTION AND FINANCIAL YEAR. Accounting convention The accompanying financial statements, expessed in Vietnam Dong (""), ae pepaed unde the histoical cost convention and in accodance with Vietnamese Accounting Standads, accounting egime fo entepises and legal egulations elating to financial epoting. The accompanying financial statements ae not intended to pesent the financial position, esults of opeations and cash flows in accodance with accounting pinciples and pactices geneally accepted in counties and juisdictions othe than Vietnam. Financial yea The Company's financial yea begins on 01 Januay and ends on 31 Decembe. 7

10 NOTES TO THE FINANCIAL STATEMENTS (Continued) FORM B 09DN 3. ADOPTION OF NEW ACCOUNTING GUIDANCE On 21 Mach 2016, the Ministy of Finance issued Cicula No. 53/2016/TTBTC ("Cicula 53/1) amending and supplementing cetain aticles of Cicula 200/2014/TTBTC dated 22 Decembe 2014 of the Ministy of Finance guiding the accounting egime fo entepises. Cicula 53 is effective fothe financial yeas beginning on o afte 1 Januay Accodingly, the Company has applied Cicula 53 in the pepaation and pesentation of the Company's financial statements fo the Company's accounting peiod fom 1 Januay 2016 to 31 Decembe Howeve, the adoption of Cicula 53 does not have significant impact on the compaability of the figues in the Company's financial statements. I"" 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES oo I"" I"" I"" The significant accounting policies, which have been adopted by the Company in the pepaation of these financial statements, ae as follows: Estimates The pepaation of financial statements in confomity with Vietnamese Accounting Standads, accounting egime fo entepises and legal egulations elating to financial epoting equies the Boad of Geneal Diectos to make estimates and assumptions that affect the epoted amounts of assets, liabilities and disclosues of contingent assets and liabilities at the date of the financial statements and the epoted amounts of evenues and expenses duing the financial yea. Although these accounting estimates ae based on the Boad of Geneal Diectos' best knowledge, actual esults may diffe fom those estimates. Financial instuments Initial ecognition Financial assets: At the date of initial ecognition, financial assets ae ecognized at cost plus tansaction costs that ae diectly attibutable to the acquisition of the financial assets. Financial assets of the Company compise cash and cash equivalents, tade and othe eceivables and shottem financial investments. Financial liabilities: At the date of initial ecognition, financial liabilities ae ecognized at cost plus tansaction costs that ae diectly attibutable to the issue of the financial liabilities. Financial liabilities of the Company compise tade and othe payables and accued expenses. Subsequent measuement afte initial ecognition Cuently, thee ae no equiements fo the subsequent measuement of the financial instuments afte initial ecognition. Cash and cash equivalents Cash and cash equivalents compise cash on hand, demand deposits and shottem, highly liquid investments that ae eadily convetible to known amounts of cash and which ae subject to an insignificant isk of changes in value. Financial investments Tading secuities Tading secuities ae those the Company holds fo tading pupose. Tading secuities ae ecognized fom the date the Company obtains the owneship of those secuities and initially measued at the fai value of payments made at the tansaction date plus diectly attibutable tansaction costs.,... In subsequent peiods, investments in tading secuities ae measued at cost less povision fo impaiment of such investments. Povision fo impaiment of investments in tading secuities is made in accodance with pevailing accounting egulations. 8

11 NOTES TO THE FINANCIAL STATEMENTS (Continued) FORM B 090N Heldtomatuity investments Heldtomatuity investments compise investments that the Company has the positive intent o ability to hold to matuity, including tem deposits with the tems ove 3 months. Postacquisition inteest income fom heldtomatuity investments is ecognized in the income statement on accual basis. Investments in associates An associate is an entity ove which the Company has significant influence and that is neithe a subsidiay no an inteest in joint ventue. Significant influence is the powe to paticipate in the financial and opeating policy decisions of the investee but not contol o joint contol ove those policies. Inteests in associates ae initially ecognized at cost including acquisition pice and diect tansaction cost (if any). The Company's shae of the net pofit of the investee afte acquisition is ecognized in the income statement. Othe distibutions eceived othe than such pofit shae ae deducted fom the cost of the investments as ecoveable amounts. Investments in associates ae caied in the balance sheet at cost less povision fo impaiment of such investments (if any). Povisions fo impaiment of investments in associates ae made in accodance with Cicula No. 228j2009mBTC dated 7 Decembe 2009 issued by the Ministy of Finance on "Guiding the appopiation and use of povisions fo devaluation of inventoies, loss of financial investments, bad debts and waanty fo poducts, goods and constuction woks at entepises", Cicula No. 89j2013mBTC dated 28 June 2013 by the Ministy of Finance amending and supplementing Cicula No. 228j2009mBTC and pevailing accounting egulations. Equity investments in othe entities Equity investments in othe entities epesent the Company's investments to the entities which the Company has no contol, joint contol o significant influence. Equity investments in othe entities ae caied at cost less povision fo impaiment. Povisions fo impaiment of investments in othe entities ae made in accodance with Cicula No. 228j2009mBTC dated 7 Decembe 2009 issued by the Ministy of Finance on "Guiding the appopiation and use of povisions fo devaluation of inventoies, loss of financial investments, bad debts and waanty fo poducts, goods and constuction woks at entepises", Cicula No. 89j2013mBTC dated 28 June 2013 by the Ministy of Finance amending and supplementing Cicula No. 228j2009mBTC and pevailing accounting egulations. Receivables Receivables epesent the amounts ecoveable fom customes o othe debtos and ae stated at book value less povision fo doubtful debts. Povision fo doubtful debts is made fo eceivables that ae ovedue fo six months o moe, o when the debto is in dissolution, in bankuptcy, o is expeiencing simila difficulties and so may be unable to epay the debt. Inventoies Inventoies ae stated at the lowe of cost and net ealisable value. Cost compises diect mateials and whee applicable, diect labou costs and those oveheads that have been incued in binging the inventoies to thei pesent location and condition. Cost is calculated using the weighted aveage method. Net ealisable value epesents the estimated selling pice less all estimated costs to completion and costs to be incued in maketing, selling and distibution. The evaluation of necessay povision fo inventoy obsolescence follows cuent pevailing accounting egulations which allow povisions to be made fo obsolete, damaged, o substandad inventoies and fo those which have costs highe than net ealisable values as at the balance sheet date. 9

12 NOTES TO THE FINANCIAL STATEMENTS (Continued) FORM B 090N Tangible fixed assets and depeciation Tangible fixed assets ae stated at cost less accumulated depeciation. The costs of puchased tangible fixed assets compise thei puchase pices and any diectly attibutable costs of binging the assets to thei woking condition and location fo thei intended use. Tangible fixed assets ae depeciated using the staightline method ove the following estimated useful lives: Buildings and stuctues Machiney and equipment Moto vehicles Office equipment Loss o gain esulting fom sales and disposals of tangible fixed assets is the diffeence between pofit fom sales o disposals of assets and thei esidual values and is ecognised in the income statement. Leasing Leases whee substantially all the ewads and isks of owneship of assets emain with the leasing company ae accounted fo as opeating leases. Rentals payable unde opeating leases ae chaged to the income statement on a staightline basis ove the tem of the elevant lease. Intangible assets and amotization Intangible assets epesent land use ights, copyight and compute softwae that ae stated at cost less accumulated amotization. Indefinite land use ights ae not amotized in accodance with pevailing egulations. Definite land use ights ae amotized using the staightline method ove the duation specified in the land use ight cetificate. Copyight 4 and compute softwae ae amotized using the staightline method ove 3 yeas. %!.( Constuction in pogess Popeties in the couse of constuction o poduction fo administative puposes ae caied at cost. Cost includes pofessional fees, and fo qualifying assets and othe costs dealt with in accodance with the Company's accounting policy. Depeciation of these assets, on the same basis as othe assets, commences when the assets ae eady fo thei intended use. Pepayments Pepayments ae expenses which have aleady been paid but elate to esults of opeations of multiple accounting peiods, including land entals, stoe ental and othe types of pepayments. Pepaid land entals ae chaged to the income statement using the staightline method ove the lease tem. Othe types of longtem pepayments compising stoe ental ae allocated to the income statement using the staightline method ove the lease tem. Payable povisions Payable povisions ae ecognized when the Company has a pesent obligation as a esult of a past event, and it is pobable that the Company will be equied to settle that obligation. Povisions ae measued at the Boad of Geneal Diectos' best estimate of the expenditue equied to settle the obligation as at the balance sheet date..traci Of l' VI 1,_ Uneaned evenue Uneaned evenue is the evenue coesponding to the value of goods and sevices to be povided fee of chage o subject to sales discount unde the taditional custome pogam. The Company ecognizes uneaned evenue in accodance with the potion of its liabilities that might be incued in the futue. 10

13 NOTES TO THE FINANCIAL STATEMENTS (Continued) FORM B 09DN Revenue ecognition Revenue fom the sale of goods is ecognized when all five (5) following conditions ae satisfied: (a) the Company has tansfeed to the buye the significant isks and ewads of owneship of the goods; (b) the Company etains neithe continuing manageial involvement to the degee usually associated with owneship no effective contol ove the goods sold; (c) the amount of evenue can be measued eliably; (d) it is pobable that the economic benefits associated with the tansaction will flow to the Company; and (e) the costs incued o to be incued in espect of the tansaction can be measued eliably. Revenue of a tansaction involving the endeing of sevices is ecognized when the outcome of such tansactions can be measued eliably. Whee a tansaction involving the endeing of sevices is attibutable to seveal peiods, evenue is ecognized in each peiod by efeence to the pecentage of completion of the tansaction at the balance sheet date of that peiod. The outcome of a tansaction can be measued eliably when all fou (4) following conditions ae satisfied: (a) the amount of evenue can be measued eliably; (b) it is pobable that the economic benefits associated with the tansaction will flow to the Company; (c) the pecentage of completion of the tansaction at the balance sheet date can be measued eliably; and (d) the costs incued fo the tansaction and the costs to complete the tansaction can be measued eliably. Inteest income is accued on a time basis, by efeence to the pincipal outstanding and at the applicable inteest ate. Dividend income fom investments is ecognized when the Company's ight to eceive payment has been established. Revenue aising fom the taditional custome pogam is ecognized as the total amount eceivable o collected minus the fai value of the goods o sevices to be povided fee of chage o subject to sales discount. The value of the goods o sevices to be povided fee of chage o subject to sales discount is ecognized as uneaned evenue. Upon the pogam end, if the customes fail to meet the pescibed conditions and ae not entitled to fee goods o sevices of chage o sales discount, the uneaned evenue shall be tansfeed to the evenue fom goods sold and sevices endeed in the yea. HI NHA ONG 1 HHIEIIH.!OIT T NA When a custome meets the pescibed conditions unde the pogam and in case the Company diectly povides goods o sevices fee of chage o at a discount to the custome: the uneaned evenue coesponding to the fai value of the goods o sevices to be povided fee of chage o a discount to the custome is ecognized as evenue fom goods sold and sevices endeed when the custome has eceived the goods o sevices fee of chage o at a discount as pescibed. When a custome meets the pescibed conditions unde the pogam and in case the thid paty is obliged to povide goods o sevices fee of chage o at a discount to the custome: if thee is no agency ageement between the Company and the thid paty, when the thid paty povides goods o sevices fee of chage o at a discount to the custome, the uneaned evenue is tansfeed to the evenue goods sold and sevices endeed. If if thee is an agency ageement between the Company and the thid paty, only the diffeence between the elevant uneaned evenue ecoded and the amount payable to the thid paty is ecognized as evenue. The amount payable to the thid paty is teated as a payable. Foeign cuencies Tansactions aising in foeign cuencies ae tanslated at exchange ates uling at the tansaction date. The balances of monetay items denominated in foeign cuencies as at the balance sheet date ae etanslated at the exchange ates on the same date. Exchange diffeences aising fom the tanslation of these accounts ae ecognized in the income statement. 11

14 NOTES TO THE FINANCIAL STATEMENTS (Continued) FORM B 090N Scientific and technological development fund Scientific and technological development fund is appopiated to geneate fund fo scientific and technological development activities of the Company. The fund is set up on the basis of maximum 10% of taxable income befoe copoate income tax calculation and ecognized in opeation cost duing the yea. Taxation Income tax expense epesents the sum of the tax cuently payable and defeed tax. The tax cuently payable is based on taxable pofit fo the yea. Taxable pofit diffes fom pofit befoe tax as epoted in the income statement because it excludes items of income o expense that ae taxable o deductible in othe peiods (including loss caied fowad, if any) and it futhe excludes items that ae neve taxable o deductible. Defeed tax is ecognized on significant diffeences between caying amounts of assets and liabilities in the financial statements and the coesponding tax bases used in the computation of taxable pofit and is accounted fo using balance sheet liability method. Defeed tax liabilities ae geneally ecognized fo all tempoay diffeences and defeed tax assets ae ecognized to the extent that it is pobable that taxable pofit will be available against which deductible tempoay diffeences can be utilized. Defeed tax is calculated at the tax ates that ae expected to apply in the peiod when the liability is settled o the asset ealized. Defeed tax is chaged o cedited to pofit o loss, except when it elates to items chaged o cedited diectly to equity, in which case the defeed tax is also dealt with in equity. Defeed tax assets and liabilities ae offset when thee is a legally enfoceable ight to set off cuent tax assets against cuent tax liabilities and when they elate to income taxes levied by the same tax authoity and the Company intends to settle its cuent tax assets and liabilities on a net basis. The detemination of the tax cuently payable is based on the cuent intepetation of tax egulations. Howeve, these egulations ae subject to peiodic vaiation and thei ultimate detemination depends on the esults of the tax authoities' examinations. Othe taxes ae paid in accodance with the pevailing tax laws in Vietnam. Funds appoiation Investment and development fund Investment and development fund is appopiated fom the pofit afte tax of the Company as poposed by the Boad of Management and appoved by shaeholdes at the Geneal Meeting of Shaeholdes. This fund is appoiated fo expansion o investment activities of the Company. Bonus and welfae funds Bonus and welfae funds ae appopiated fom the pofit afte tax of the Company as poposed by the Boad of Management and appoved by shaeholdes at the Geneal Meeting of Shaeholdes. This fund is appoiated fo ewad and incentives, benefits and aising geneal welfae fo the Company's management and public employees. 12

15 NOTES TO THE FINANCIAL STATEMENTS (Continued) FORM B 09DN 5. CASH AND CASH EQUIVALENTS Cash on hand Cash in bank Cash equivalents Closing balance 2,879,967,666 97,247,486, ,127,453,686 Opening balance 1,584,162,663 41,257,496,797 45,000,000,000 87,841,659, TRADING SECURITIES Cost Closing balance Fai Value Povision Cost Opening balance Fai Value Povision. Mekopha Chemical Phamaceutical 5,589,637,900 2,986,440,000 2,603,197,900 5,589,637,900 2,850,600,000 2,739,037,900 JointStock Company Bach Tuyet Cotton Copoation 239,465, ,465, ,465, ,465,000 DHG Phama Copoation 239,510, ,510, ,510, ,510,000 Domesco Mediad Impot Expot 383,907, ,250,000 72,657,520 Joint'stock Copoation OPC Phamaceutial Joint Stock 166,965, ,965, ,965, ,965,260 6,235,578,160 3,392,915,260 2,842,662,900 6,619,485,680 3,568,325,260 3,051,160, HELDTOMATURITY INVESTMENTS Heldtomatuity investments at 31 Decembe 2016 compise tem deposits with the tems 12 months at Sacombank Dong Thap Banch, of which inteest ate is 6.9% annually (as 31 Decembe 2015: 6% 7% annually). 8. SHORTTERM TRADE RECEIVABLES.. Agimexpham PhamaceuticalJoint Stock Company S.Pham PhamaceuticalJoint Stock Company Receivablesfom othe customes Closinq balance 11,485,487,108 1,925,733, ,927,063, ,338,284,023 Openinc balance 10,905,006,141 1,884,767, ,103,433, ,893,207,143 Povision fo doubtful debts ae made in accodance with Cicula 228j2009(TTBTC and ae pesented in Note SHORTTERM ADVANCES TO SUPPLIERS Tenwell LLC Dong Thap Hydaulic JSC Hoa Viet Mechanical Refigeation Electical Co, Ltd. Romaco Phamatechnik Gmbh Geensol Co, Ltd. APS Electical Engineeing Co, Ltd. Novacat Fama SA T&T Tading Co, Ltd. Rieckemann Gmbh JoyMaiteya Int'I Ltd. Dong Thap Hydaulic constuction JSC Nhat Hoa Industial Constuction & Tading Co,Ltd. Thien Long Dien Co, Ltd. Othes Closing balance 1,791,350,000 7,500,000,000 4,036,734,800 2,548,207,200 6,029,317,500 2,105,015,000 46,738,971,785 21,356,168,625 28,950,417, ,056,182,137 Opening balance 9,220,750,000 7,322,378,400 3,723,408,000 1,592,629,500 1,534,500, ,840,000 17,100,000,000 2,402,992,000 1,525,691,436 9,664,515,317 54,729,704;653 13

16 NOTES TO THE FINANCIAL STATEMENTS (Continued) FORM B 09DN 10. OTHER SHORTTERM RECEIVABLES Closing balance Opening balance Advances to employees Deposits and motgages Othes Outside pesonal income tax eceivables 12,672,021,229 90,000,000 22,320,552,122 35,082,573,351 11,479,901, ,789,401 21,332,173, ,066,310 33,626,931, PROVISION FOR SHORTTERM DOUBTFUL DEBTS... Closing balance Opening balance Cost Povision Recoveable amount Cost Povision Recoveable amount 'it:lq '&'ll '&'ll 'it:lq '&'ll 'mi2. Cal Nuoc Hospital 674,890, ,992, ,898,704 Thuan Hea Stoe 924,204, ,430, ,773, ,204, ,589, ,614,687 Binh Tan Hospital 169,412,040 38,916, ,495,428 Ministy of Health 889,560, ,560, ,560, ,560,000 DTN Phama Co., Ltd. 744,042, ,021, ,021, ,042, ,212, ,829,800 Thien Kim II Stoe 728,917, ,458, ,458, ,271, ,155, ,115,929 Stoe No. 64 1,167,648, ,353, ,294,552 1,167,648, ,824, ,824,253 Khanh Son Health Cente (Khanh Heal 1,915,188,437 1,522,383, ,804,728 1,765,547,419 1,061,198, ,348,896 Othes 26,828,200,525 10,689,709,602 16,138,490,923 72,362,314,618 10,653,997,145 61,708,317,473 33,758,244,732 15,299,917,969 18,458,326,763 79,787, ,708,446,327 65,079, INVENTORIES Closing balance Cost Povision Opening balance Cost Povision. Goods in tansit Raw mateials Wok in pogess Finished coeds Mechandises Shottem spae pats 23,200,408, ,381,978,623 (1,098,009,966) 19,133,768,116 70,599,456,513 10,090,513,617 2,255,294, ,661,420,036 (1,098,009,966) 4,713,418, ,611,409,123 (691,735,723) 15,759,932,962 99,261,151,085 3,628,676, , ,410,602,948 (691,735,723) 13. PREPAYMENTS a. Shottem pepayments Advetisinq expense House ental Othes b. Longtem pepayments Land ental Office funitue Banch 2 Ho Chi Minh City enovation expense Insuance pemium fo fight, explosion and isks PMU3 Poject Binh Duonq Factoy Tools and supplies Renovation expense of Non wokshop's cooling system Vinh Loc Hlqhtech Factoy Maintenance fee of xuono Non Betalactam Consulting fee fo setting up the payoll system Binh Duong HighTech Factoy Poject Fees fo monitoing and speeding up documentation veification Insuance fee fo CEFA Factoy in Binh Duong Othes 14 Closing balance 449,584, ,584,191 12,689,559,591 5,034,373, ,426, ,680,633 2,648,179, ,564, ,223,555 1,080,000, ,443, ,444,444 2,220,000, ,161, ,267, ,387,107 27,711,711,475 Opening balance 115,135,622 72,000, ,332, ,468,122 13,005,710,469 3,536,429,370 1,370,436, ,723,916 1,605,094, ,690, ,000,000 20,725,085,076

17 NOTES TO THE FINANCIAL STATEMENTS (Continued) FORM B 09DN ' 14. TAXES AND OTHER RECEIVABLES FROM/PAYABLES TO THE STATE BUDGET Payable Paid Opening balance duing the yea duing the yea Closing balance a. Receivables Pesonal income tax 289,034,099 5,662,861,618 6,246,760, ,933,209 Othes 515,215,500 3,571,748,798 3,056,533, ,249,599 9,234,610,416 9,303,294, ,933,209 b. Payables Value added tax 5,680,683,487 18,660,426,369 20,231,423,855 4,109,686,001 Copoate income tax 6,629,015,360 25,356,713,448 22,380,008,319 9,605,720,489 Pesonal income tax 692,305,938 5,756,699,263 5,742,425, ,579,780 Impotexpot tax 5,089,752,021 5,089,752,021 Othes 486,355, ,995,586 30,360,038 13,002,004,785 55,349,946,725 53,899,605,202 14,452,346, INCREASES, DECREASES TANGIBLE FIXED ASSETS Buildings and Machiney and Moto Office stuctues equipment vehicles equipment Total COST Opening balance 171,184,838, ,157,818,496 61,523,628,659 9,262,487, ,128,772,252 Puchases 13,451,311,001 13,159,347,568 7,574,446,673 34,185,105,242 Tansfe fom CIP 9,877,172,534 9,877,172,534 Disposals (2,686,025,188) (2,686,025,188) Closing balance 181,062,010, ,609,129,497 71,996,951,039 16,836,933, ,505,024,840 ACCUMULATED DEPRECIATION Opening balance 77,821,458, ,533,728,987 37,299,582,360 5,432,565, ,087,334,896 Chage fo the yea 8,461,094,447 17,009,117,804 9,113,472,946 2,059,235,419 36,642,920,616 Disposals (2,494,985,691) (2,494,985,691) Closing balance 86,282,552, ,542,846)91 43,918,069,615 7,491,800, ,235,269,821 ) NET BOOK VALUE Closing balance 94, ,667 67,066,282,706 28,078, ,345,133, ,755,019 s M' {!YJ The cost of the Company's tangible fixed assets as at 31 Decembe 2016 includes 111,260,219,611 (as at 31 Decembe 2015: 110,734,209,529) of assets that have been fully depeciated but ae still in use. Opening balance 93,363, , ,509 24,224,046,299 3,829,921, , , INCREASES, DECREASES INTANGIBLE ASSETS Land use ights Copyight Compute softwae Total COST Opening balance 74,049,435, ,712,823 12,332,898,076 87,127,046,094 Puchases 1,069,407,000 1,069,407,000 Closing balance 74,049,435, ,712,823 13,402,305,076 88,196,453,094 ACCUMULATED AMORTISATION Opening balance 3,963,997, ,712,823 11,078,564,995 15,787,275,283 Chage fo the yea 528,533,000 1,126,859,429 1,655,392,429 Closing balance 4,492,530, ,712,823 12,205,424,424 17,442,667,712 NET BOOK VALUE Closing balance 69,556,904,730 1,196,880,652 70,753,785,382 Opening balance 70,085,437,730 1,254,333,081 71,339,770,811 IUHAN 15

18 NOTESTO THE FINANCIAL STATEMENTS(Continued) FORM B 090N ( LONGTERM CONSTRUCTION IN PROGRESS Sa Ria Vunq Tau banch's office Can Tho banch's office Puchase of fixed assets Sinh Dinh banch's office Sinh Duong hightech phamaceutical factoy Othes Closing balance 'inq 1,563,795,454 41,190,469,937 Opening balance 'inq 731,272,727 1,563,795,454 5,951,535, ,374,545 6,880,110,909 33,096,709, ,516,363 76, ,844 15,229,088, INVESTMENTS IN ASSOCIATES Gia Dai Phamaceutical Company Limited Agimexpham Phamaceutical Joint Stock Company Spham Phamaceutical Joint Stock Compay Dong Thap Muoi Consevation Reseach and Development Medicinal of Closing balance Opening balance Cost Povision Cost Povision 182,000,000 (182,000,000) 182,000,000 (182,000,000) 36,044,396,700 26,419,806,700 11,015,180,000 11,015,180,000 2,340,000,000 2,340,000,000 49,581,576,700 (182,000,000) 39,956,986,700 (182,000,000) Gia.. Name of associates Dal Phamaceutical Company Limited Agimexpham Phamaceutical Joint Stock Company Spham Phamaceutical Joint Stock Company Dong Thap Muoi Reseach Consevation and Development Phamaceutical Joint Stock Company Place of Incopoation and opeation Popotion of owneship Popotion of voting inteest powe held Pincipal activity Ho Chi Minh 26.00% 26.00% Manufactuing and tading phamaceutical poducts An Giang 33.99% 33.99% Manufactuing and tading phamaceutical poducts Soc Tang 29.48% 29.48% Manufactuing and tading phamaceutical poducts Dong Thap 20.00% 20.00% Reseaching, conseving and developing taditional medicine 19. EQUITY INVESTMENTS IN OTHER ENTITIES Cental Phamaceutical Joint Stock Company No ,550, ,550,000 lv.pham Phamaceutical Joint Stock Company 581,428, ,428,000 Vldlpha Cental Phamaceutical Joint Stock Company 503,000, ,000,000 Saigon Thuong Tin Commecial Joint Stock Bank 127,690, ,690,000 Danang Phamaceutical Medical Equipment Joint Stock Company 10,200,000,000 7,500,000,000 11,526,668,000 8,826,668,000 Closing balance Opening balance 16

19 Closing IMEXPHARM PHARMACEUTICAL JOINT STOCK COMPANY NOTES TO THE FINANCIAL STATEMENTS (Continued) 20. SHORTTERM TRADE PAYABLES balance FORM B 09DN Opening balance a) Shottem tade payables: Novatis (Singapoe) PTE Alcapham B. V Othe supplies 37,446,394,833 14,344,682,400 36,621,175, , ,954,189,210 2,020,653,800 34,463,795, ,638,878 b) Tade payables to elated paties Agimexpham Phamaceutical Joint Stock Company S.pham Phamaceutical Joint Stock Company 290,638, ,530 88,702,890, ,064, ,064,350 56,005,703,228 All shottem tade payable balances wee able to be paid off as at 31 Decembe 2016 and 31 Decembe SHORTTERM ACCRUED EXPENSES Closlnc balance Ooenino balance Closinq Royalty fee Accued selllnq expenses Othes 22. SHORTTERM UNEARNED REVENUE 14,918,613,998 43,794,265,351 9,817,735,023 68,530,614,372 12,427,561,290 26,200,101,455 3,195,625,825 41,823,288,570 Shottem uneaned evenue is the evenue coesponding to the value of goods and sevices subjected to discounts fo customes in the taditional custome pogams that the Company has not caied out at the end of the financial yea. 23. OTHER SHORTTERM PAYABLES Payables to the State budqet Shottem deposits eceived Othes balance 856,381, ,000, ,590,927 2,478,972,181 Openlnq balance 479,868,594 50,000, , ,747,203,710 ; CHI! co ',CHNH Del VIE' / T 24. SCIENTIFIC AND TECHNOLOGICAL DEVELOPMENT FUND Openlno balance Additions Utilisation Closing balance Cuent yea 29,317,700,576 14,000,000,000 ( ,658) 21,720,693,918 Pio yea 27,497,786,956 13,000,000,000 (11.180,086,380) 29,317,700,576 17

20 IMEXPHARM PHARMACEUTICAL JOINT STOCK COMPANY NOTES TO THE FINANCIAL STATEMENTS (Continued) 25. OWNER'S EQUITY Details of the Company's pa value and shaes ae as folows: Closing balance FORM B 090N...;;O;.,l;p;..;e;.;..n;.;.;i n.;.jgo:..,;;.b,;;;,a I;.;;;a;.;.;n..;.ce,;;;.. Numbe of authoized shaes Numbe of issued and fully paid shaes Numbe of outstanding shaes in ciculation Teasuy shaes Pa value () 28,942,646 28,942,646 28,942,646 28,942,646 28,932,346 28,942,646 10,300 ===========1=0'=0=00============1=0='0=0=0 The Company has one class of odinay shae which caies no ight to fixed income with pa value of 10,000/shae. The shaeholdes of odinay shaes ae entitled to eceive dividends as declaed fom time to time and ae entitled to one vote pe shae at the Company's shaeholdes' meetings. All shaes ank equally with egad to the Company's esidual assets. Actual chate capital contibuted by the shaeholdes as at 31 Decembe 2016 and 31 Decembe 2015 was as follows: Closing balance Opening balance Shae % Capital Shae % Capital Vietnam Phamaceutial Copoaation 6,874, % 68,744,470,000 6,874, % 68,744,470,000 ==::::::: Balestand Limited 2,631, % 26,311,600,000 2,631, % 26,311,600,000 JOoo.;::; Fanklin Templeton Investment lhani Templeton Fontie Makets Fund 2,456, % 24,568,200,000 2,456, % 24,568,200,000 :G TY Kwe Beteiligungen AG 2,382, % 23,821,300,000 2,117, % 21,170,000,000 ;EMHil Pha No Phamaceutical Joint Stock ' Din Company 1,764, % 17,640,290,000 1,764, % 17,640,290,000 othes % % , HAl < 28,942, % , % ,000 =, Accoding to Resolution No. 20/DHQTIMEX dated 26 Apil 2016 by Annual Geneal Shaeholde's meeting of Imexpham Phamaceutical Joint Stock Company, the Geneal shaeholdes appoved the issuance of 10,129,793 shaes with the pa value is 10,000 / shae to incease the capital contibution of the owne. In which, a) 1,447,000 shaes wee issued unde the Employee Stock Option Pogam ("ESOP") and the Company has been appoved by the State Secuities Commission of Vietnam in the Official Lette No. 946/UBCKQLPH on 23 Febuay The Company has completed the issuance of 1,447,000 shaes in accodance with the Official Lette No. 71/IMEX on the Repot of shae issuance to the company's employees on 15 Mach b) 8,882,793 shaes wee issued in the fom of shaes to existing shaeholdes at a atio of 10:3 and the Company has been appoved by the State Secuities Commission of Vietnam in the Official Lette No. 79/GCNUBCK on 01 Decembe The Company has completed the issuance of 8,662,793 shaes in accodance with the Official Lette No. 44/IMEX on the Repot of shae issuance to incease shae capital on 28 Febuay

21 NOTES TO THE FINANCIAL STATEMENTS (Continued) Details of majo shaeholdes of the Company and the contibution as of 15 Mach 2017: FORM B 09DN of those shaeholdes Popotion 0/0 Shaes Capital,... Vietnam Phamaceutial Copoaation,... Pha No Phamaceutical Joint ,936,781 89,367,810, Stock Company, Fanklin Templeton Investment Templeton Fontie Makets Fund KWE Beteiligungen AG 7.93 Balestand Limited 5.87, Othes ,... Total ,420,508 3,193,866 3,096,769 2,293,237 18,131,278 39,072,439 34,205,080,000 31,938,660,000 30,967,690,000 22,932,370, ,312,780, ,724,390,000 19

22 NOTES TO THE FINANCIAL STATEMENTS (Continued) FORM B 090N Movement in ownes equity: Pio yea's opening balance Shae issuance Pofit fo the yea Dividends declaed Fund appopiation Fund utilization Remuneation to the Boad of Management Dividend of teasuy shae Cuent yea's opening balance Owne's contibuted Othe owne's Investment and capital Shae pemium capital Teasuy shaes development fund 263,114,860, ,957,833,609 2,420,789, ,913,764,388 26,311,600,000 58,775,885,440 19,839,575,511 (3,523,432) 450,528, ,426,460, ,733,719,049 2,420,789, ,200,344,467 Retained eanings Total 80,229,205, ,636,452,245 85,087,485,440 92,909,516,441 92,909,516,441 (52,096,762,800) (52,096,762,800) (34,685,350,209) (14,845,774,698) (3,523,432) (856,384,980) (856,384,980) (450,528,000) 85,049,695, ,831,008,216 Pofit fo the yea Dividends declaed Fund appopiation Buyback of teasuy shaes Remuneation to the Boad of Management Othe Cuent yea's closing balance (20,000,000) 289,426,460, ,713,719,049 (123,600,000) 22,723,890,453 2,420,789,142 (123,600,000) 254,924,234, ,159,344, ,159,344,647 (57,885,292,000) (57,885,292,000) (35,842,398,378) (13,118,507,925) (123,600,000) (926,542,327) (926,542,327) (20,000,000) 91,554,807, ,916,410,611 Accoding to Resolution No. 20/NQIMEX appoved on 26 Apil 2016 at the Geneal Shaeholde's Meeting of Imexpham Phamaceutical Joint Stock Company, the 2015 pofit afte tax distibution has been appoved as follows: a) Distibution to the Bonus and welfae fund with the amount of 11,118,507,925 (including the tempoay distibution of 8,000,000,000 in 2015 and the additional distibution of 3,118,507,925 in 2016 as officially appoved); b) Distibution to the Investment and development fund with the amount of 22,723,890,453; c) Remuneation of the Boads of Management and Supevisoy due to the achievement of pofit taget accoding to Aticle 11 Clause 25 of the Company Chate with the amount of 926,542,327; d) Declaation of cash dividends with the amount of 57,885,292,000 which has been fully paid to shaeholdes in the yea. Besides, the tempoay distibution of 10,000,000,000 fom 2016 pofit afte tax to the Bonus and welfae fund was also appoved.

23 ... Closingbalance Closingbalance IMEXPHARM PHARMACEUTICAL JOINT STOCK COMPANY NOTES TO THE FINANCIAL STATEMENTS (Continued) FORM B 09DN 26. OFF BALANCE SHEET ITEMS Foeign cuency: Openingbalance United States Dolla (USD) 71,731 2,027 Euo(EUR) Bad debts witten off: Openingbalance Baddebts witten oft 7,722, , , BUSINESS AND GEOGRAPHICAL SEGMENTS Business segments The Company's pincipal activities ae to manufactue and puchase mateials used fo pocessing phamaceutical poducts and othe poducts by the Company. Othe business activities make up mino atio in total evenue and opeating esult of Company in this peiod as well as the pevious ones. Hence, the financial infomation pesented in balance sheet as at 31 Decembe 2016 and 31 Decembe 2015 as well as evenues, expenses pesented in the income statement fo the peiod fom 1 Januay 2016 to 31 Decembe 2016 and pevious peiods ae elevant to pincipal activities. Consequently, the Company did not pepae the epot by business segment. Geogaphical segments Cuent 28. REVENUE Cuent yea Pio yea Sales of goods Sales of expoted goods 17,191,991,786 3,706,760,020 Sales of manufactued goods 932,039,106, ,352,962,453 Sales of fanchised goods 73,557,498, ,263,699,610 Othe evenues 35,847,620,679 31,409,040,402 1,058,636,217,384 1,012,732,462,485 Deductions Sales etun (11,470,968,525) (7,147,905,279) Sales discount (36,819,070,554) (41.265,712,690) (48,290,039,079) (48,413,617,969) 1,010,346,178, ,318,844, COST OF SALES yea Pio yea Cost of expoted goods 7,682,541,359 1,792,135,320 Cost of manufactued goods 513,037,598, ,373,326,264 Cost of fanchised goods 52,761,027, ,954,897,978 Cost of othe sales 31,811,952,213 27,938,784, ,293,119, ,059,144,497 "'" The Company's evenue ae geneated by consumption the finished goods in domestic wheeas the evenue geneated by expoting makes up mino atio in total evenue and opeating esult of Company fo the peiod fom 01 Jannuay 2015 to 31 Decembe 2016 CHIN and the pevious peiods. Consequently, the Company did not pepae the epot by CON geogaphical segment. 'HNHli 21 He liet ' '=

24 ... IMEXPHARM PHARMACEUTICAL JOINT STOCK COMPANY NOTES TO THE FINANCIAL STATEMENTS (Continued) 30. OPERATING COST BY NATURE FORM B 09DN Cuent yea Pio yea Raw mateials and consumables 425,711,764, ,327,178,927 Labou 160,852,359, ,473,740,018 Depeciation and amotization 37,320,990,534 38,402,557,093 Outsouced sevices 72,568,329,577 40,801,227,737 Othe expenses 183,976,338, ,047,807, ,782, ,052, , FINANCIAL INCOME Cuent yea Pio yea,.. Y.NQ Y.NQ Bank inteest 2,785,538,198 9,008,477,569 Foeign exchange gain 1,750,063,026 4,219,245,574 Dividend income 4,319,075,000 4,609,647, Othes 241,225,311,.. 9,095,901,535 17,837,370, FINANCIAL EXPENSES Cuent yea Pio yea ')OOG Inteest expense 55,154, ,820,692 HANI Foeign exchange loss 1,584,052,466 3,749,985,083!TY Revesal of povision fo impaiment (198,941,970) (266,394,240) IIHVt of financial investments Payment discount 10,706,990,114 10,984,402,934 ITT Othes 88,440, ,912,660 NAN 12,235,695, ! :::;;; 33. SELLING EXPENSES AND GENERAL AND ADMINISTRATION EXPENSES Cuent yea Pio yea Y.NQ YNQ b) Othes a) Geneal and administation expenses Management staff expense 17,499,467,305 15,733,053,106 Depeciation expenses 5,100,194,946 5,120,187,990 Outsouced sevice expenses 13,455,265,426 10,396,761,059 Scientific and technological fund distibution 14,000,000,000 13,000,000,000 Othe monetay expenses 4,650,789,086 10,997,105,824 Othes 16, ,201 17, ,262,508,964 72,788,824,688 Selling expenses Staff expense 68,948,033,534 68,427,390,992 Pomotion expenses 6,029,614,098 Maket eseach and development expenses 40,546,931,493 32,086,291,067 88,349,575,069 92,635,820, ,874,154, ,149,502,750 22

25 23

26 FORM IMEXPHARM PHARMACEUTICAL JOINT STOCK COMPANY NOTES TO THE FINANCIAL STATEMENTS (Continued) B 090N Basic eanings pe shae fo the yea ended 31 Decembe 2016 ae calculated based on the pofit attibutable to the Company's shaeholde fo the above fiscal yea and estimated figues of bonus and welfae fund will be deducted fom pofit afte tax with the same ate with yea 2015 at the ate 12%. The pupose of this calculation is fo the compaability between figues of two peiods because the Company has not had any plan fo bonus and welfae fund appopiation fom pofit afte tax of OPERATING LEASE COMMITMENTS Cuent yea Pio yea Minimum lease payments unde opeating leases ecognized in the income statement fo the yea =========44=4=,9=0=0=,0=00========5=00,=38=0=,4=5=5 At the balance sheet date, the Company had outstanding commitments unde noncancelable opeating leases, which fall due as follows: Cuent yea Pio yea On demand o within one yea In the second to fifth yea inclusive Afte five yeas 65,000,000 65,000, ,300, ,000,000 5,000, ,000,000 ===547,300,000 Opeating lease payments epesent the total entals payable by the Company fo enting pemises to oganize dug stoes of some banches in the county. 39. FINANCIAL INSTRUMENTS. Capital isk management The Company manages its capital to ensue that the Company will be able to continue as a going concen while maximising the etun to the owne though the optimization of the debt and equity balance. The capital stuctue of the Company consists of net debts and equity of shaeholdes (compising owne's contibuted captital, shae pemium, othe owne's capital, investment and development fund and etained eanings). Significant accounting policies Categoies Details of the significant accounting policies and methods adopted (including the citeia fo ecognition, the bases of measuement, and the bases fo ecognition of income and expenses) fo each class of financial asset and financial liability ae disclosed in Note 4. of financial instuments Financial assets Cash and cash equivalents Shottem financial investments Tade and othe eceivables Longtem financial investments Caying amount Closing balance Opening balance Y.NQ 100,127,453,686 15,392,915, ,529,162,916 60,916,689, ,966,221,012 87,841,659, ,568,325, ,408,035,188 48,601,654, ,419,674,608 Financial liabilities Tade and othe payables Accued expenses 91,181,863,177 68,530,614, ,712,477,549 57,752,906,938 41,823,288,570 99,576,195,

27 , IMEXPHARM PHARMACEUTICAL JOINT STOCK COMPANY NOTES TO THE FINANCIAL STATEMENTS (Continued) FORM B 090N The Company has not assessed fai value of its financial assets and liabilities as at the balance sheet date since thee ae no compehensive guidance unde Cicula No. 210/2009/TTBTC issued by the Ministy of Finance on 6 Novembe 2009 ("Cicula 210") and othe elevant pevailing egulations to detemine fai value of these financial assets and liabilities. While Cicula 210 efes to the application of Intenational Financial Repoting Standads (IFRS) on pesentation and disclosues of financial instuments, it did not adopt the equivalent guidance fo the measuement and ecognition of financial instuments, including application of fai value, in accodance with IFRS. Financial isk management objectives The Company has set up isk management system to identify and assess the isks exposed by the Company and designed contol policies and pocedues to manage those isks at an acceptable level. Risk management system is eviewed on a egula basis to eflect changes in maket conditions and the Company's opeations. Financial isks include maket isk (including foeign cuency isk and pice isk), cedit isk and liquidity isk. Maket isk The Company's activities expose it pimaily to the financial isks of changes in foeign cuency exchange ates and pices. The Company does not hedge these isk exposues because the Boad of Geneal Diectos assessed that the costs to be incued to hedge these isks may exceed the inheent cost due to the fluctuation of the foeign exchange ates and inteest ates of these financial instuments. Foeign cuency isk management The Company undetakes cetain tansactions denominated in foeign cuencies; consequently, exposues to exchange ate fluctuations aise. The caying amounts of the Company's foeign cuency denominated and monetay liabilities at the end of the peiod/yea ae as follows: United States Dolla (USD) Euo (EUR) Assets Opening balance 45,610,132 11,832,463 Closing balance 2,593,574,639 11,463,154 Opening balance 36,936,157,481 1,194,620,000 monetay assets Liabilities Closlnq balance 60,462,317,223 1,040,765,739 Foeign cuency sensitivity analysis The Company is mainly exposed to the United States Dolla. The following analysis details the Company's sensitivity to a 3% (2015: 3%) incease and decease in Vietnam Dong against United States Dolla. As ate 3% (2015: 3%) is the sensitivity ate used when epoting foeign cuency isk intenally to the Boad of Geneal Diectos and epesents the Boad of Geneal Diectos' assessment of the easonably possible change in foeign exchange ates. The sensitivity analysis includes only outstanding foeign cuency denominated monetay items and adjusts thei tanslation at the peiod end fo a 3% (2015: 3%) change in foeign cuency ates. Fo a 3% (2015: 3%) incease/decease in United States Dolla against Vietnam Dong, the pofit befoe tax in the yea would decease/incease by 1,736,062,278 (2015: 1,106,716,420). Commodity pice isk management The Company puchases mateials, commodities fom local and foeign supplies fo business pupose. Theefoe, the Company is exposed to the isk of changes in selling pices of mateials, commodities. Shae pice isk management Shaes held by the Company ae affected by maket isks aising fom the uncetainty about futue pices of such shaes. The Company manages this isk exposue by setting up investment limits. The Company's Boad of Management also assesses and appoves decisions on shae investments such as opeating industy, investees, etc. The Company assesses the shae pice isk to be immateial. 25

28 NOTES TO THE FINANCIAL STATEMENTS (Continued) FORM B 090N Cedit isk Cedit isk efes to the isk that countepaty will default on its contactual obligations esulting in financial loss to the Company. The Company has a cedit policy in place and the exposue to cedit isk is monitoed on an ongoing basis. The Company does not have any significant cedit isk exposue to any countepaty because eceivables consist of a lage numbe of customes, spead acoss divese industies and geogaphical aeas. Liquidity isk management The The pupose of liquidity isk management is to ensue the availability of funds to meet pesent and futue financial obligations. Liquidity is also managed by ensuing that the excess of matuing liabilities ove matuing assets in any yea is kept to manageable levels elative to the amount of funds that the Company believes can geneate within that yea. The Company's policy is to egulaly monito cuent and expected liquidity equiements to ensue that the Company maintains sufficient eseves of cash, boowings and adequate committed funding fom its shaeholdes to meet its liquidity equiements in the shot and longe tem. following tables detail the Company's emaining contactual matuity fo its nondeivative financial assets and financial liabilities with ageed epayment peiods. The tables have been dawn up based on the undiscounted cash flows of financial assets and undiscounted cash flows of financial liabilities based on the ealiest date on which the Company can be equied to pay. The inclusion of infomation on nondeivative financial assets is necessay in ode to undestand the Company's liquidity isk management as the liquidity is managed on a net asset and liability basis. Less than 1 yea YNQ Closing balance Cash and cash equivalents 100,127,453,686 Shottem financial investments 15,392,915,260 Tade and othe eceivables 233,448,918,176 Longtem financial investments 348,969,287,122 Opening balance Tade and othe payables Accued expenses Less than 1 yea 91,104,863,177 68,530,614, ,635,477,549 Moe than 1 yea YNQ 80,244,740 60,916,689,150 Total 100,127,453,686 15,392,915, ,529,162,916 60,916,689,150 60,996,933, ,966,221,012 Moe than 1 yea YNQ Total YHQ 77,000,000 91,181,863,177 68,530,614,372 77,000, ,712,477,549 <" 'HAHH.1TY IIHVUHA ITTE' Net liquidity gap 189,333,809,573 60,919,933, ,253,743,463 Opening balance Cash and cash equivalents Shottem financial investments Tade and othe eceivables Longtem financial investments Less than 1 yea YNQ 87,841,659, ,568,325, ,331,790, ,741,775,168 Moe than 1 yea YNQ 76,244,740 48,601,654,700 48,677,899,440 Total YNQ 87,841,659, ,568,325, ,408,035,188 48,601,654, ,419,674,608 Net Opening balance Tade and othe payables Accued expenses Less than 1 yea YNQ Moe than 1 yea YNQ 57,625,906, ,000,000 57,752,906,938 Total YNQ 41,823,288,570...;4.;;.11.::,8.;;.2;;.!3,..=.28;;.;8;.L,,5;;.;70 99,449,195, ,000,000 99,576,195,508 liquidity gap 328,292,579,660 48,550, , ,100 The Boad of Geneal Diectos assessed the liquidity isk at low level, The Boad of Geneal Diectos believes that the Company will be able to geneate sufficient funds to meet its financial obligations as and when they fall due, 26