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Deloitte.

IMEXPHARM PHARMACEUTICAL JOINT STOCKCOMPANY

(Incorporated in Socialist Republic of Vietnam)

REVIEWED INTERIM FINANCIALSTATEMENTS

For the 6-month period ended 30 June 2017

IMEXPHARM PHARMACEUTICAL JOINT STOCK COMPANYNo.4 Street 30/4, Cao Lanh CityDong Thap Province, Vietnam

TABLE OF CONTENTS

CONTENTS PAGE(S)

1STATEMENT OF THE BOARD OF GENERAL DIRECTORS

REPORT ON REVIEW OF INTERIM FINANCIAL STATEMENTS 2

INTERIM BALANCE SHEET 3 - 4

INTERIM INCOME STATEMENT 5

INTERIM CASH FLOW STATEMENT 6

NOTES TO THE INTERIM FINANCIAL STATEMENTS 7 - 25

IMEXPHARM PHARMACEUTICAL JOINT STOCK COMPANYNO.4 Street 30/4, Cao Lanh CityDong Thap Province, Vietnam

STATEMENT OF THE BOARD OF GENERAL DIRECTORS

The Board of General Directors of Imexpharm Pharmaceutical Joint Stock Company (the"Company") presents this report together with the Company's interim financial statements for the6-month period ended 30 June 2017.

THE BOARDS OF MANAGEMENT AND GENERAL DIRECTORS

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

Board of Management

Mr. Nguyen Quoc DinhMs. Tran Thi DaoMr. Vo Huu TuanMr. Huynh Van NhungMr. Nguyen Quy SonMr. Tran Anh TuanMr. Ngo Minh TuanMr. Truong Viet Vu

ChairmanVice ChairmanMemberMemberMemberMemberMemberMember

Board of General Directors

Ms. Tran Thi DaoMr. Nguyen Quoc DinhMr. Huynh Van NhungMr. Ngo Minh TuanMr. Le Van Nha PhuongMr. Tran Hoai Hanh

General DirectorDeputy General DirectorDeputy General DirectorDeputy General DirectorDeputy General Director (appointed on 04 January 2017)Chief Accountant

BOARD OF GENERAL DIRECTORS' STATEMENT OF RESPONSIBILITY

The Board of General Directors of the Company is responsible for preparing the interim financialstatements, which give a true and fair view of the financial position of the Company as at 30 June2017 and of its results and cash flows for the 6-month ended period in accordance with VietnameseAccounting Standards, accounting regime for enterprises and legal regulations relating to financialreporting. In preparing these interim financial statements, the Board of General Directors isrequired to:

• Select suitable accounting policies and then apply them consistently;• Make judgments and estimates that are reasonable and prudent;• State whether applicable accounting principles have been followed, subject to any material

departures disclosed and explained in the interim financial statements;• Prepare the interim financial statements on the going concern basis unless it is inappropriate

to presume that the Company will continue in business; and• Design and implement an effective internal control system for the purpose of properly

preparing and presenting the interim financial statements so as to minimise errors and frauds.

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

~=:=:!:••..Board of General Directors confirms that the Company has complied with the aboveents in preparing these interim financial statements.

be:Te Boardof~neral Directors,

1

Deloitte. Deloitte Vietnam Company Ltd.18th Floor, Times Square Building,57-69F Dong Khoi Street, Ben Nghe Ward,District 1, Ho Chi Minh City, VietnamTel:+848 3910 0751Fax:+848 3910 0750www.deloitte.com/vn

No. ))1 /VN1A-HC-8C

REPORT ON REVIEW OF INTERIM FINANCIAL STATEMENTS

To: The ShareholdersThe Boards of Management and General DirectorsImexpharm Pharmaceutical Joint Stock Company

We have reviewed the accompanying interim financial statements of Imexpharm PharmaceuticalJoint Stock Company (the "Company") prepared on 11 August 2017 as set out from page 3 to page25, which comprise the interim balance sheet as at 30 June 2017, the interim income statementand interim cash flow statement for the 6-month period then ended and a summary of significantaccounting policies and other explanatory information.

The Board of General Directors' Responsibmty for the Interim Financial Statements

The Board of General Directors is responsible for the preparation and fair presentation of theseinterim financial statements in accordance with Vietnamese Accounting Standards, accountingregime for enterprises and legal regulations relating to interim financial reporting, and for suchinternal control as the Board of General Directors determines is necessary to enable the preparationof interim financial statements that are free from material misstatement, whether due to fraud orerror.

Auditors' Responsibility

Our responsibility is to express a conclusion on the accompanying interim financial statementsbased on our review. We conducted our review in accordance with Vietnamese Standard on ReviewEngagements (VSRE) 2410 - "Review of Interim Financial Information Performed by theIndependent Auditor of the Entity".

A review of interim financial statements consists of making inquiries, primarily of personsresponsible for financial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted in accordance withVietnamese Standards on Auditing and consequently does not enable us to obtain assurance thatwe would become aware of all significant matters that might be identified in an audit. Accordingly,we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that theaccompanying interim financial statements do not present fairly, in all material respects, theinterim financial position of the Company as at 30 June 2017, and of its interim financialperformance and its cash flows for the 6-month period then ended in accordance with VietnameseAccounting Standards, accounting regime for enterprises and legal regulations relating to interim

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.251

,I NJNI~HIELO~TI

inh ThaoAudit PartnerAudit Practising Registration CertificateNo. 1902-2013-001-1BRANCH OF DELOITTE VIETNAM COMPANY LIMITED11 August 2017Ho Chi Minh City, S.R. Vietnam

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee("DTTL"), its network of member firms, and their related entities. DTTL and each of its member firms are legallyseparate and independent entities. DTTL (also referred to as "Deloitte Global") does not provide services to clients.Pleasesee www.deloitte.com/about for a more detailed description of DTTL and its member firms.

2

IMEXPHARM PHARMACEUTICAL JOINT STOCK COMPANY FORM BOla-ONNO.4 Street 30/4, Cao Lanh City Issued under Circular No.200/2014/TI-BTCDong Thap Province, Vietnam dated 22 December 2014 of the Ministry of Finance

INTERIM BALANCE SHEETAs at 30 June 2017

Unit: VND

ASSETS Codes Notes Closing balance Opening balance

A. CURRENTASSETS 100 1,088,311,248,814 721,079,359,147

I. Cash and cash equivalents 110 4 57,771,905,003 100,127,453,6861. Cash 111 37,771,905,003 100,127,453,6862. Cash equivalents 112 20,000,000,000

II. Short-term financial investments 120 285,528,335,260 15,392,915,2601. Trading securities 121 5 6,235,578,160 6,235,578,1602. Provision for impairment 122 5 (2,707,242,900) (2,842,662,900)

of trading securities3. Held-to-maturity investments 123 6 282,000,000,000 12,000,000,000

III. Short-term receivables 130 433,975,565,492 367,177,121,5421. Short-term trade receivables 131 7 205,293,663,001 226,338,284,0232. Short-term advances to suppliers 132 8 205,425,017,863 121,056,182,1373. Short-term loan receivables 135 9 4,550,000,0004. Other short-term receivables 136 10 34,675,286,141 35,082,573,3515. Provision for short-term doubtful 137 11 ( 15,968,401,513) ( 15,299,917,969)

debts

IV. Inventories 140 12 302,739,619,724 234,563,410,0701. Inventories 141 303,570,042,918 235,661,420,0362. Provision for devaluation of 149 (830,423,194) (1,098,009,966)

inventories

V. Other short-term assets 150 8,295,823,335 3,818,458,5891. Short-term prepayments 151 13 343,619,799 449,584,1912. Value added tax deductibles 152 6,551,170,568 2,495,941,1893. Taxes and other receivables 153 14 1,401,032,968 872,933,209 ~

from the State budget Ol<,

B. NON-CURRENTASSETS 200 516,278,446,746 434,765,676,610 HIiY

I. Long-term receivables 210 80,244,740 80,244,740 lit1. Other long-term receivables 216 80,244,740 80,244,740 TI

II. Fixed assets 220 272,394,256,143 270,023,540,401 ;111-/

1. Tangible fixed assets 221 15 199,916,184,667 199,269,755,019 ·C- Cost 222 497,823,718,209 484,505,024,840 :;;;

- Accumulated depreciation 223 (297,907,533,542) (285,235,269,821)2. Intangible assets 227 16 72,478,071,476 70,753,785,382- Cost 228 90,476,453,094 88,196,453,094- Accumulated amortisation 229 (17,998,381,618) (17,442,667,712)

III. Long-term assets in progress 240 147,794,732,304 76,033,490,8441. Construction in progress 242 17 147,794,732,304 76,033,490,844

IV. Long-term financial investments 250 65,333,504,700 60,916,689,1501. Investments in associates 252 18 53,868,876,700 49,581,576,7002. Equity investments in other entities 253 19 11,526,668,000 11,526,668,0003. Provision for long-term 254 (262,040,000) (191,555,550)4. Held-to-maturity investments 255 6 200,000,000

V. Other long-term assets 260 30,675,708,859 27,711,711,4751. Long-term prepayments 261 13 30,675,708,859 27,711,711,475

TOTALASSETS (270=100+200) 270 1,604,589,695,560 1,155,845,035,757

The accompanying notes are an integral part of these interim financial statements3

IMEXPHARM PHARMACEUTICAL JOINT STOCK COMPANY FORM B Ola-DNNO.4 Street 30/4, Cao Lanh City Issued under Circular NO.200/2014/TI-BTCDong Thap Province, Vietnam dated 22 December 2014 of the Ministry of Finance

INTERIM BALANCE SHEET (Continued)As at 30 June 2017

Unit: VND

RESOURCES Codes Notes Closing balance Opening balance

C. LIABILITIES 300 245,152,577,134 219,928,625,146

I. Current liabilities 310 224,687,205,440 198,130,931,2281. Short-term trade payables 311 20 123,957,941,235 88,702,890,9962. Short-term advances from customers 312 297,545,099 669,447,3703. Taxes and amounts payable to the 313 14 9,645,511,230 14,452,346,308

State budget4. Payables to employees 314 3,460,491,866 18,858,730,1875. Short-term accrued expenses 315 21 44,869,448,987 68,530,614,3726. Short-term unearned revenue 318 22 19,237,037,2677. Other short-term payables 319 23 2,565,760,566 2,478,972,1818. Short-term loans and obligations 320 24 20,000,000,000

under finance leases9. Bonus and welfare funds 322 653,469,190 4,437,929,814

II. Long-term liabilities 330 20,465,371,694 21,797,693,9181. Other long-term payables 337 50,000,000 77,000,0002. Scientific and technological 343 25 20,415,371,694 21,720,693,918

development fund

D. EQUITY 400 1,359,437,118,426 935,916,410,611

I. Owners' equity 410 26 1,359,437,118,426 935,916,410,6111. Owners' contributed capital 411 429,781,510,000 289,426,460,000- Ordinary shares carrying voting 411a 429,781,510,000 289,426,460,000

rights2. Share premium 412 601,241,079,354 297,713,719,0493. Other owners' capital 414 2,420,789,142 2,420,789,1424. Treasury shares 415 (123,600,000) (123,600,000)5. Investment and development fund 418 265,916,890,689 254,924,234,9206. Retained earnings 421 60,200,449,241 91,554,807,500- Retained earnings accumulated 421a 400,481,853 395,462,853

to the prior year end- Retained earnings of the current 421b 59,799,967,388 91,159,344,647period/year

TOTAL RESOURCES (440 = 300 + 400) 440 1,604,589,695,560 1,155,845,035,757

~--Duong Hoang VuPreparer

Tran Hoai HanhChief Accountant

guyen Quoc DinhDeputy General Director11 August 2017


IMEXPHARM PHARMACEUTICAL JOINT STOCK COMPANY FORM B 02a-DNNO.4 Street 30/4, Cao Lanh City Issued under Circular No.200/2014/TI-BTCDong Thap Province, Vietnam dated 22 December 2014 of the Ministry of Finance

INTERIM INCOME STATEMENTFor the 6-month period ended 30 June 2017

Unit: VND

ITEMS Codes Notes Current period Prior period

1. Gross revenue from goods sold and01 521,728,440,630 451,615,734,485services rendered

2. Deductions 02 21,582,085,278 22,509,972,3753. Net revenue from goods sold and 10 29 500,146,355,352 429,105,762,110

services rendered (10=01-02)4. Cost of sales 11 30 286,759,915,442 263,491,148,5325. Gross profit (20=10-11) 20 213,386,439,910 165,614,613,5786. Financial income 21 32 9,893,280,968 6,135,309,0377. Financial expenses 22 33 6,450,238,461 5,444,468,184

- In which,' Interest expense 23 259,336,250 55,154,4398. Selling expenses 25 34 105,368,203,328 89,476,903,0379. General and administration expenses 26 34 35,784,597,278 25,406,427,20410. Operating profit 30 75,676,681,811 51,422,124,190

(30= 20+ (21-22 )-(25+ 26»11. Other income 31 317,807,810 468,797,40112. Other expenses 32 1,369,904,800 1,286,892,55813. Loss from other activities 40 ( 1,052,096,990) (818,095,157)

(40=31-32)14. Accounting profit before tax 50 74,624,584,821 50,604,029,03315. Current corporate income tax expense 51 35 14,824,617,433 9,984,849,80716. Net profit after corporate income tax 60 59,799,967,388 40,619,179,226

(60=50-51)17. Basic earnings per share 70 36 1,466 1,085

,Lf/-Duong Hoang VuPreparer



IMEXPHARM PHARMACEUTICAL JOINT STOCK COMPANY FORM B 03a-DNNo.4 Street 30/4, Cao Lanh City Issued under Circular No.200/2014/TT-BTCDong Thap Province, Vietnam dated 22 December 2014 of the Ministry of Finance

INTERIM CASH FLOW STATEMENTFor the 6-month period ended 30 June 2017

Unit: VND

ITEMS Codes Current period Prior period

I. CASH FLOWS FROM OPERATING ACTIVITIES1. Profit before tax 01 74,624,584,821 50,604,029,0332. Adjustments for:Depreciation and amortisation of fixed assets 02 16,043,038,831 19,966,147,604Provisions 03 335,961,222 300,996,851Foreign exchange loss/(gain) 04 (439,487,099) 229,500,547Gain from investing activities 05 (8,704,366,610) (5,069,744,722)Interest expense 06 259,336,250 55,154,4393. Operating profit before movements in 08 82,119,067,415 66,086,083,752working capitalDecrease in receivables 09 112,084,231,022 58,213,665,640(Increase)/Decrease in inventories 10 (67,908,622,882) 11,893,277,389Decrease in accounts payable 11 ( 11,397,628,628) (26,415,064,809)Increase in prepaid expenses 12 (2,858,032,992) (3,382,535,128)Decrease in trading securities 13 383,907,520Interest paid 14 (259,336,250) (55,154,439)Corporate income tax paid 15 (16,084,125,575) (11,936,813,276)Other cash outflows 17 (7,212,570,872) ( 10,654,285,156)Net cash generated by operating activities 20 88,482,981,238 84,133,081,493

II. CASH FLOWS FROM INVESTING ACTIVITIES1. Acquisition of fixed assets and investment

21 (253,204,654,180) (69,309,932,042)in construction in progress2. Proceeds from sale, disposal of fixed assets 22 61,136,364 301,000,0003. Cash outflow for lending, saving in bank 23 (270,200,000,000) ( 1,000,000,000)

~4. Cash recovered from lending 24 100,000,000,000 ~x'<S5. Investments in associates 25 (4,287,300,000) /I6. Interest earned, dividends and profits 27 2,853,198,023 4,508,231,330Net cash used in investing activities 30 (524,777,619,793) 34,499,299,288 RAe

0III. CASH FLOWS FROM FINANCING ACTIVITIES

~1. Proceeds from owners' contributed capital 31 405,195,685,0002. Proceeds from borrowings 34 20,000,000,000

v,3. Dividends and profits paid 36 (31,249,711,200) (57,885,292,000)

~Net cash generated/(used in) by 40 393,945,973,800 (57,885,292,000)financing activities

Net decrease in cash during the period 50 (42,348,664,755 ) 60,747,088,781(50=20+30+40)Cash and cash equivalents at the 60 100,127,453,686 87,841,659,460beginning of the period

Effects of changes in foreign exchange rates 61 (6,883,928) (43,082,682)

Cash and cash equivalents at the end of 70 57,771,905,003 148,545,665,559the period (70=50+60+61)

6~--------Preparer

~=:=;::;:~guyen Quoc DinhDeputy General Director11 August 2017



IMEXPHARM PHARMACEUTICALJOINT STOCKCOMPANY FORM B 03a-DNNO.4 Street 30/4, Cao Lanh City Issued under Circular No.200/2014/TI-BTCDong Thap Province, Vietnam dated 22 December 2014 of the Ministry of FinanceNOTES TO THE INTERIM FINANCIAL STATEMENTSThese notes are an integral part of and should be read in conjunction with the accompanying interim financial statements

1. GENERALINFORMATION

Structure of ownership

Imexpharm Pharmaceutical Joint Stock Company (the "Company"), formerly known as DongThap Pharmaceautical Union incorporated under Decision No. 284/TCCQ dated 28 September1983 issued by the Health Department of Dong Thap Province, was transformed from a stateenterprise into a joint stock company under Business Registration Certificate No. 1400384433dated 01 August 2001 first issued by the Department of Planning and Investment of DongThap Province and subsequent amendments certificates thereafter with the latest amendment(the twenty-sixth amendment) dated 15 June 2017. The Company's stocks are listed in HoChi Minh Stock Exchange under Decision No. 76/UBCK-GPNY dated 04 December 2006 withcode IMP.

The number of employees of the Company as at 30 June 2017 was 1,022 (as at 31 December2016: 1,020).

Principal activities

The principal activities of the Company are manufacturing pharmaceutical products,processing pharmaceutical materials, trading, importing and exporting pharmaceuticalproducts, medical equipment and supplies, chemicals, materials for medicine manufacturingand packaging, chemicals used for sterilization or disinfection in humans (except for thoselisted under Point A, Part II, Appendix No. 04 accompanying Decision No. 10/2007/QD-BTMdated 21 May 2007 issued by Ministry of Trade, currently known as Ministry of Industry andTrade); other activities include trading cosmetics; growing traditional medicines; tradingfoods, functional foods, beverages, alcoholic drinks, fizzy drinks; manufacturing milks;financial activities; producing functional foods, nutritional food; providing storage systemservices for medicine, pharmaceutical materials; retailing medicines, medical equipment,cosmetics and hygiene products in specialized stores.

Normal production and business cycle

The Company's normal production and business cycle is carried out for a time period of 12months or less.

=

The Company's structure

Company has 24 branches and 4 associates as at 30 June 2017. Details of associates aredisclosed in Note 18. -.

'2500

NHJNG'/lelllonr N~

Disclosure of information comparability in the financial statements

The comparative figures of the balance sheet are the figures of the Company's auditedfinancial statements for the year ended 31 December 2016. The comparative figures of theincome statement and cash flow statements are the figures of the reviewed interim financialstatements for the 6-month period ended 30 June 2016.

2. ACCOUNTING CONVENTION AND FINANCIAL YEAR

Accounting convention

The accompanying interim financial statements, expressed in Vietnam Dong ("VND"), areprepared under the historical cost convention and in accordance with Vietnamese AccountingStandards, accounting regime for enterprises and legal regulations relating to interim financialreporting.

The accompanying interim financial statements are not intended to present the financialposition, results of operations and cash flows in accordance with accounting principles andpractices 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. The interiminterim financial statements are prepared for the period from 1 January to 30 June annually.

7

IMEXPHARM PHARMACEUTICAL JOINT STOCK COMPANYNOTES TO THE INTERIM FINANCIAL STATEMENTS (Continued) FORM B 09a-DN

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Estimates

The preparation of financial statements in conformity with Vietnamese AccountingStandards, accounting regime for enterprises and legal regulations relating to interimfinancial reporting requires the Board of General Directors to make estimates andassumptions that affect the reported amounts of assets, liabilities and disclosures ofcontingent assets and liabilities at the date of the financial statements and the reportedamounts of revenues and expenses during the period. Although these accounting estimatesare based on the Board of General Directors' best knowledge, actual results may differ fromthose estimates.

Financial instruments

Initial recognition

Financial assets: At the date of initial recognition, financial assets are recognized at costplus 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 otherreceivables, short-term and long-term financial investments.

Financial liabilities: At the date of initial recognition, financial liabilities are recognized atcost plus transaction costs that are directly attributable to the issue of the financialliabilities. Financial liabilities of the Company comprise trade, other payables, accruedexpenses and borrowing.

Subsequent measurement after initial recognition

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

Financial investments

Cash and cash equivalents

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

Trading securities

Trading securities are those the Company holds for trading purpose. Trading securities arerecognized from the date the Company obtains the ownership of those securities andinitially measured at the fair value of payments made at the transaction date plus directlyattributable transaction costs.

In subsequent periods, investments in trading securities are measured at cost less provisionfor impairment of such investments.

Provision for impairment of investments in trading securities is made in accordance withprevailing accounting regulations.

Held-to-maturity investments

Held-to-maturity investments comprise investments that the Company has the positiveintent or ability to hold to maturity, including term deposits with the terms over 3 months.Post-acquisition interest income from held-to-maturity investments is recognized in theincome statement on accrual basis.

8


Investments in associates

An associate is an entity over which the Company has significant influence and that isneither a subsidiary nor an interest in joint venture. Significant influence is the power toparticipate in the financial and operating policy decisions of the investee but not control orjoint control over those policies.

Interests in associates are initially recognized at cost including acquisition price and directtransaction cost (if any). The Company's share of the net profit of the investee afteracquisition is recognized in the income statement. Other distributions received other thansuch profit share are deducted from the cost of the investments as recoverable amounts.

Equity investments in other entities

Equity investments in other entities represent the Company's investments to the entitieswhich the Company has no control, joint control or significant influence.

Investments are carried at cost less provision for impairment. Provisions for impairment ofinvestments are made in accordance with Circular No. 228/2009/TT-BTC dated 7 December2009 issued by the Ministry of Finance on "Guiding the appropriation and use of provisionsfor devaluation of inventories, loss of financial investments, bad debts and warranty forproducts, goods and construction works at enterprises", Circular No. 89/2013/TT-BTCdated 28 June 2013 by the Ministry of Finance amending and supplementing Circular No.228/2009/TT-BTC and prevailing accounting regulations.

Receivables

Receivables represent the amounts recoverable from customers or other debtors and arestated at book value less provision for doubtful debts.

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

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises directmaterials and where applicable, direct labour costs and those overheads that have beenincurred in bringing the inventories to their present location and condition. Cost iscalculated using the cweiqhted average method. Net realisable value represents theestimated selling price less all estimated costs to completion and costs to be incurred inmarketing, selling and distribution.

The evaluation of necessary provision for inventory obsolescence follows current prevailingaccounting 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 atthe interim balance sheet date.

Tangible fixed assets and depreciation

Tangible fixed assets are stated at cost less accumulated depreciation. The costs ofpurchased tangible fixed assets comprise their purchase prices and any directly attributablecosts 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 followingestimated useful lives:

Buildings and structuresMachinery and equipmentMotor vehiclesOffice equipment

10 - 506 - 156 - 103 - 8

Loss or gain resulting from sales and disposals of tangible fixed assets is the differencebetween profit from sales or disposals of assets and their residual values and is recognisedin the interim income statement.

9


Leasing

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

Intangible assets and amortization

Intangible assets represent land use rights, copyright and computer software that arestated at cost less accumulated amortization. Indefinite land use rights are not amortizedin accordance with prevailing regulations. Definite land use rights are amortized using thestraight-line method over the duration specified in the land use right certificate. Copyrightand computer software are amortized using the straight-line method within 3 years.

Construction in progress

Properties in the course of construction or production for administrative purposes arecarried at cost. Cost includes professional fees, and for qualifying assets and other costsdealt with in accordance with the Company's accounting policy. Depreciation of theseassets, on the same basis as other assets, commences when the assets are ready for theirintended use.

Prepayments

Prepayments are expenses which have already been paid but relate to results of operationsof multiple accounting periods, including land rentals, store rental and other types ofprepayments.

Prepaid land rentals are charged to the income statement using the straight-line methodover the lease term.

Other types of long-term prepayments comprising store rental are allocated to the interimincome statement using the straight-line method over the lease term.

Payable provisions.'il ~;ONNH/jLO~T

Payable provisions are recognized when the Company has a present obligation as a resultof a past event, and it is probable that the Company will be required to settle thatobligation. Provisions are measured at the Board of General Directors' best estimate of theexpenditure required to settle the obligation as at the balance sheet date.

Unearned revenue --TP.I

Unearned revenue is the revenue corresponding to the value of goods and services to beprovided free of charge or subject to sales discount under the traditional customer program.The Company recognizes unearned revenue in accordance with the portion of its liabilitiesthat might be incurred in the future.

Revenue recognition

Revenue from the sale of goods is recognized when all five (5) following conditions aresatisfied:

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

(b) the Company retains neither continuing managerial involvement to the degree usuallyassociated 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.

10

IMEXPHARM PHARMACEUTICAL JOINT STOCK COMPANYNOTES TO THE INTERIM FINANCIAL STATEMENTS (Continued) FORM B 09a-ON

Revenue of a transaction involving the rendering of services is recognized when theoutcome of such transactions can be measured reliably. Where a transaction involving therendering of services is attributable to several periods, revenue is recognized in each periodby reference to the percentage of completion of the transaction at the balance sheet dateof 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 andat the applicable interest rate.

Dividend income from investments is recognized when the Company's right to receivepayment has been established.

Revenue arising from the traditional customer program is recognized as the total amountreceivable or collected minus the fair value of the goods or services to be provided free ofcharge or subject to sales discount. The value of the goods or services to be provided freeof charge or subject to sales discount is recognized as unearned revenue. Upon theprogram end, if the customers fail to meet the prescribed conditions and are not entitledto free goods or services of charge or sales discount, the unearned revenue shall betransferred to the revenue from goods sold and services rendered in the year.

When a customer meets the prescribed conditions under the program and in case theCompany directly provides goods or services free of charge or at a discount to thecustomer: the unearned revenue corresponding to the fair value of the goods or servicesto be provided free of charge or a discount to the customer is recognized as revenue fromgoods sold and services rendered when the customer has received the goods or servicesfree of charge or at a discount as prescribed.

When a customer meets the prescribed conditions under the program and in case thethird party is obliged to provide goods or services free of charge or at a discount to thecustomer: if there is no agency agreement between the Company and the third party,when the third party provides goods or services free of charge or at a discount to thecustomer, the unearned revenue is transferred to the revenue goods sold and servicesrendered. If if there isan agency agreement between the Company and the third party,only the difference between the relevant unearned revenue recorded and the amountpayable to the third party is recognized as revenue. The amount payable to the thirdparty is treated as a payable.

Foreign currencies

Transactions arising in foreign currencies are translated at exchange rates ruling at thetransaction date. The balances of monetary items denominated in foreign currencies as atthe balance sheet date are retranslated at the exchange rates on the same date. Exchangedifferences arising from the translation of these accounts are recognized in the interimincome statement.

Scientific and technological development fund

Scientific and technological development fund is appropriated to generate fund for scientificand technological development activities of the Company. The fund is set up on the basisof maximum 10% of taxable income before corporate income tax calculation andrecognized in operation cost during the period.

Taxation

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 period. Taxable profit differsfrom profit before tax as reported in the income statement because it excludes items ofincome or expense that are taxable or deductible in other periods (including loss carriedforward, if any) and it further excludes items that are never taxable or deductible.

11


Deferred tax is recognized on significant differences between carrying amounts of assetsand liabilities in the financial statements and the corresponding tax bases used in thecomputation of taxable profit and is accounted for using balance sheet liability method.Deferred tax liabilities are generally recognized for all temporary differences and deferredtax assets are recognized to the extent that it is probable that taxable profit will be availableagainst which deductible temporary differences can be utilized.

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

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

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

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

Funds approriation

Investment and development fund

Investment and development fund is appropriated from the profit after tax of the Companyas proposed by the Board of Management and approved by shareholders at the GeneralMeeting of Shareholders. This fund is approriated for expansion or investment activities ofthe Company.

Bonus and welfare funds

Closing balanceVND

Opening balanceVND

Bonus and welfare funds are appropriated from the profit after tax of the Company asproposed by the Board of Management and approved by shareholders at the GeneralMeeting of Shareholders. This fund is approriated for reward and incentives, benefits andraising general welfare for the Company's management and public employees.

4. CASH AND CASH EQJ)IVALENTS

Cashon handDemand depositCashequivalent

2,036,027,98435,735,877,019

2° ,0°° ,0° ° ,0° ° _:-::-:::--:-=---::-:::-::--::-::--=-57,771,905,003 100,127,453,686

2,879,967,66697,247,486,020

Cash equivalent at 30 June 2017 comprise term deposits with the terms 3 months at AnBinh Bank - Dong Thap Branch, of which interest rate is 5.5% annually.

5. TRADING SECURITIESProvision

'llill

Opening balanceClosing balanceCost Fair Value'llill 'llill

Cost Fair Value'llill 'llill

Provision'llill

Mekophar Chemical PharmaceuticalJoint-Stock Company 5.589.637.900 3.121.860.000 2.467.777.900 5.589.637.900Bach Tuyet Cotton Corporation 239.465.000 239.465.000 239.465.000DHGPharma Corporation 239.510.000 239.510.000 239.510.000 239.510.000OPC Pharmaceutial Joint Stock Company--=~16=,,"6~,9~65,,:,2~6~0-=--=,1~6~6.:".:96,=!5~.2~60~=-==-==-=-=-----=--=1~6~6.:!::96!'::'5~.2~60~=_='1~6~6.~96'=!5~.2~60~::-::-,=-::-=-=-=-=-

6.235.578.160 3.528 .33 5.260 2.707 •242. 9 ° ° ....••.6 •..::,23::.:5",.5::.,:7""8••••1""60"--3"'.""39""'2"'.9""1""5•••••2""60"--,2"".8",4:;.,:2",,,,.6""6.:;.c2.,,,90=0

2.986.440.000 2.603.197.900239.465.000

6. HELD-TO-MATURITY INVESTMENTS

Short-term and long-term held-to-maturity investments at 30 June 2017 comprise termdeposits with the terms 6 - 18 months at commercial banks, of which interest rate is 6,2 -7% annually (as 31 December 2016: 6.9% annually).

12

IMEXPHARM PHARMACEUTICAL JOINT STOCK COMPANYNOTES TO THE INTERIM FINANCIAL STATEMENTS (Continued)

7. SHORT-TERM TRADE RECEIVABLES

Agimexpharm Pharmaceutical Joint Stock CompaS.Pharm Pharmaceutical Joint Stock CompanyReceivables from other customers

Closing balance~

8,498,768,1751,041,069,750

195,753,825,076205,293,663,001

FORM B 09a-DN

Opening balance~

11,485,487,1081,925,733,834

212,927 ,063,081226,338,284,023

Provision for doubtful debts are made in accordance with Circular 228/2009/TT -BTC andare presented in Note 11.

8. SHORT-TERM ADVANCES TO SUPPLIERS

Hoa Viet Mechanical Refrigeration Electrical Co, Ltd.Rieckermann GmbhJoy-Maitreya Int'l Ltd.Others

9. SHORT-TERM LOAN RECEIVABLES

Closing balance~

Opening balance~

55,597,471,500 4,036,734,80048,232,591,368 46,738,971,78534,448,116,725 21,356,168,62567 ,146 ,838,2 70 _--,4=8.L:.' 9:...=2,--,4:...<.:,3=..;0=-.:6::...<.,=-92=7:....

205,425,017,863 121,056,182,137

Short-term loan receivables at 30 June 2017 comprise lending to employees of theCompany with the terms 12 months, of which interest rate is 7.5% annually.

12,064,815,493 12,672,021,2299,437,195,800 12,935,584,2235,939,427,223 36,225,0007 ,2 33 ,847 ,62 5 __ -=9...L.,4-,-,3=-.:8::...<.,.:....74-,-,2=,=8-=..9.=....9

34,675,286,141 35,082,573,351

11. PROVISION FOR SHORT-TERM DOUBTFUL DEBTS

10. OTHER SHORT-TERM RECEIVABLES

Advances to employeesReceivables from employeesAccrued interest incomeOthers

Closing balance

Closing balanceVND

Opening balance

Opening balanceVND

Cost Provision Recoverable amountll..tiD. ll..tiD. ll..tiD.

279,773,836924,204,255889,560,000

744,042,572728,917,996

1,167,648,507

644,430,419889,560,000

372,021,286364,458,998817,353,955

Cost Provision Recoverable amountll..tiD. ll..tiD. ll..tiD.

Thuan Hoa StoreMinistry of HealthDTNPharma Co., Ltd.Thien Kim II StoreStore No. 64Khanh Son HealthCenter (Khanh Hoa)Others

924,204,255889,560,000 -

694,042,572658,917,996

1,167,648,507

924,204,255889,560,000

485,829,800442,297,266841,234,625

208,212,772216,620,730326,413,882

1,765,007,419 1,765,007,41927 ,048.927 .585 10,620.268,148 16,428.659,437

18,458,326,76333,148,308,334 15,968,401,513 17,179,906,821

12. INVENTORIESClosing balance

Cost~

ProvisionJl.N.!2

Goods in transitRaw materialsWork in progressFinished goodsMerchandisesSpare parts

37,883,315,884124,004,309,997 (830,423,194)21,350,341,818

111,213,428,0966,334,564,6352,784,082,488

303,570,042,918 (830,423,194)

13

1,915,188,437 1,522,383,70926,828,200,525 10,689.709,602

33,758,244,732 15,299,917,969

372,021,286364,458,998350,294,552

392,804,72816,138,490,923

Opening balanceCost~

Provision~

23,200,408,491110,381,978,623 (1,098,009,966)

19,133,768,11670,599,456,51310,090,513,617

2,255,294,676235,661,420,036 (1,098,009,966)


13. PREPAYMENTS

a. Short-term prepaymentsAdvertising expenseOthers

b. Long-term prepaymentsLand rentalOffice interiorBranch 2 - Ho Chi Minh City renovation expenseInsurance premium for fight, explosion and risksPMU3 Project Binh Duong FactoryTools and suppliersRenovation expense of Non workshop's coolingsystemVinh Loc High-tech FactoryMaintenance fee of Xuong Non BetalactamConsulting fee for setting up the payroll systemBinh Duong High-Tech Factory ProjectFees for monitoring and speeding updocumentation verificationRenovation & repairing expense of Vinh Loc BranchOthers

Closing balanceVND

FORM B 09a-DN

Opening balanceVND

110,000,000233,619,799 __ ----::-4-',-4'::"9'-'::,5::::,8~4:...L,=-19:=...c1~

343,619,799 4..;.4..;.9;:;"'1,.;;5;.;;8;.;4.,1~9;;,;1~

12,513,360,9735,174,024,201

297,921,053136,039,675

2,648,179,1202,634,429,220

438,604,221

1,080,000,000233,422,249309,111,110

2,260,000,000290,404,041

12,689,559,5915,034,373,422

655,426,316266,947,957

2,648,179,120740,564,757558,223,555

1,080,000,000289,443,589380,444,444

2,220,000,000366,161,617

714,698,2321,945 ,514 ,764 __ ---'7....;:8:..::2'-'"',3::...;8::....;7..•.,=-10::...;7,-

30,675,708,859 27,711,711,475

14. TAXES AND OTHER RECEIVABLES FROM/PAYABLES TO THE STATE BUDGET

Payable PaidOpening balance during the year during the year Closing balance

VND VND VND VND

a. ReceivablesPersonal income tax 872,933,209 2,709,663,869 3,237,763,628 1,401,032,968for employee

872,933,209 2,709,663,869 3,237,763,628 1,401,032,968 ~b. Payables "\),\25::.--Value added tax 4,109,686,001 9,400,472,519 13,431,772,852 78,385,668 CHI IICorporate income tax 9,605,720,489 14,824,617,433 16,084,125,575 8,346,212,347 CONjPersonal income tax 706,579,780 3,810,055,886 3,311,894,925 1,204,740,741 HNHfEfor customers, EtO,shareholders

I~TIImport-export tax 4,232,203,832 4,216,031,358 16,172,474Others 30,360,038 1,390,777,860 1,421,137,898 '---

rp.•.14,452,346,308 33,658,127,530 38,464,962,608 9,645,511,230 :=;

15. INCREASE, DECREASE TANGIBLE FIXED ASSETSBuildings and Machinery and Motor

structures equipment vehicles'll.JIID. 'll.JIID. 'll.JIID.

Officeequipment

'll.JIID.Total'll.JIID.

COSTOpening balance 181,062,010,629 214,609,129,497 71,996,951,039 16,836,933,675 484,505,024,840Purchases 5,884,099,231 1,581,118,500 2,867,154,545 2,079,492,763 12,411,865,039Transfer from CIP 2,673,954,550 95,222,500 996,045,818 3,765,222,868Disposals (2,858,394,538) (2,858,394,538)Closing balance 189,620,064,410 213,427,075,959 75,860,151.402 18,916,426,438 497,823,718,209

ACCUMULATED DEPRECIATIONOpening balance 86,282,552,962 147,542,846,791 43,918,069,615 7,491,800,453 285,235,269,821Charge for the period 4,281,131,655 6,505,882,394 3,340,573,613 1,403,070,597 15,530,658,259Disposals (2,858,394,538) (2,858,394,538)Closing balance 90,563,684,617 151.190,334,647 47,258,643,228 8,894,871.050 297,907,533,542

NET BOOK VALUEClosing balance 99,056,379,793 62,236,741,312 28,601,508,174 10,021,555,388 199,916,184,667

Opening balance 94,779,457,667 67,066,282,706 28,078,881,424 9,345,133,222 199,269,755,019

The cost of the Company's tangible fixed assets as at 30 June 2017 includes VND192,513,276,194 (as at 31 December 2016: VND 111,260,219,611) of assets that havebeen fully depreciated but are still in use.

14


16. INCREASES, DECREASES INTANGIBLE ASSETS

Land use rightsVND

Copyright Computer softwareVND VND

OtherVND

TotalVND

COSTOpening balancePurchasesClosing balance

74,049,435,195 744,712,823 13,402,305,076 88,196,453,0941,500 ,000 ,000 !...:78~0~,~0~00~,~0~0~02,280,000,000

75,549,435,195 744,712,823 13,402,305,076 780,000,000 90,476,453,094

ACCUMULATED AMORTISATIONOpening balance 4,492,530,465 744,712,823 12,205,424,424 17,442,667,712Charge for the period 264,266,500 248,114,072 43,333,334 555,713,906Closing balance 4,756,796,965 744,712,823 _~1~2c.,4~5~3~,,,,,5~3~8~,4=9~6__ -=4~3~,,-,,3~3~3~,~3~3=417,998,381,618

NET BOOK VALUEClosingbalance 70,792,638,230 _ 948,766,580 736,666,666 72,478,071,476

Openingbalance 69,556,904,730 _ 1,196,880,652 - 70,753,785,382

17. LONG-TERM CONSTRUCTION IN PROGRESSClosing balance

'lLI':illOpening balance

'lLI':ill

Can Tho branch's officePurchase of fixed assetsBinh Duong high-tech pharmaceutical factoryOthers

1,563,795,454 1,563,795,45484,751,758,279 41,190,469,93759,960,820,122 33,096,709,090

1,518,358 ,449 =-:18~2=.,.,=!.5=.:16~,~3~6~3147,794,732,304 76,033,490,844

18. INVESTMENTS IN ASSOCIATESClosing balance Opening balance

Cost ProvisionVND VND

Cost ProvisionVND VND

Gia Dai PharmaceuticalCompany LimitedAgimexpharm PharmaceuticalJoint Stock CompanySpharm Pharmaceutical JointStock CompanyDong Thap Muoi ConservationResearch and Development ofMedicinal

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

36,044,396,70015,302,480,000

36,044,396,70011,015,180,000

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

49,581,576,700 (182,000,000)53,868,876,700 (182,000,000)

Place of Proportion of

Name of associatesincorporationand operation

ownership Proportion of votinginterest power held Principal activity

Gia Dai Pharmaceutical CompanylimitedAgimexpharm Pharmaceutical JointStock Com panySpharm Pharmaceutical Joint StockCompanyDong Thap Muoi ResearchConservation and DevelopmentPharmaceutical Joint Stock Company

26.00% Manufacturing and tradingpharmaceutical products



20.00% Researching, conserving anddeveloping traditionalmedicine

Ho Chi Minh 26.00%

An Giang 33.99%

Soc Trang 27.47%

Dong Thap 20.00%

19. EQUITY INVESTMENTS IN OTHER ENTITIES

Closing balance~

Opening balance~

Central Pharmaceutical Joint Stock Company - No.25TV.Pharm Pharmaceutical Joint Stock CompanyVidipha Central Pharmaceutical Joint Stock CompanySaigon Thuong Tin Commercial Joint Stock BankDanang Pharmaceutical Medical Equipment JointStock Com pany

114,550,000581,428,000503,000,000127,690,000

10,200,000,000

114,550,000581,428,000503,000,000127,690,000

10,200,000,000

11,526,668,000 11,526,668,000

As at 30 June 2017, according to Circular 228/2009/TT-BTC, Company make provision ofVND 80,040,000 for the investment in Central Pharmaceutical Joint Stock Company -No.25 (as at 31 December 2016: VND 9.555.550)

15


20. SHORT-TERM TRADE PAYABLESClosing balance

VND

a) Short-term trade payables:Novartis (Singapore) PTEAlcapharm B. VHoa Viet Mechanics & Electronics Co. LtdOther suppliers

18,272,264,22435,326,280,97513,061,650,00051,498,613,220

118,158,808,419

b) Trade payables to related partiesAgimexpharm Pharmaceutical Joint Stock CompanyS.pharm Pharmaceutical Joint Stock Company

5,799,132,816

5,799,132,816

FORM B 09a-DN

Opening balance~

37,446,394,83314,344,682,400

18,150,00036,603,025,23388,412,252,466

290,638,530290,638,530

123,957,941,235 88,702,890,996

All short-term trade payable balances were able to be paid off as at 30 June 2017 and 31December 2016.

21. SHORT-TERM ACCRUED EXPENSES

Closing balanceVNP

Royalty feeAccrued selling expensesOthers

13,721,513,96724,507,528,503

6,640,406,51744,869 ,448, 987

22. SHORT-TERM UNEARNED REVENUE

Opening balanceVND

14,918,613,99843,794,265,351

9,817,735,02368,530,614,372

Short-term unearned revenue is the revenue corresponding to the value of goods andservices subjected to discounts for customers in the traditional customer programs that theCompany has not carried out at the end of the period.

23. OTHER SHORT-TERM PAYABLESClosing balance

'iND.

Payables to the State budgetShort-term deposits receivedOthers

536,881,906150,000,000

1,878,878,6602,565,760,566

24. SHORT-TERM LOANS AND OBLIGATIONS UNDER FINANCE LEASES

Opening balance'iND.

856,381,254100,000,000

1,522,590,9272,478,972,181

Short-term loan as at 30 June 2017 represent unsecured loan from Saigon Hanoi Bank -Dong Thap Branch bearing the interest rate 6.8% annually, with the term 21 days from 16June 2017 to 06 July 2017.

25. SCIENTIFIC AND TECHNOLOGICAL DEVELOPMENT FUND

Current periodVND

Opening balanceAdditionsUtilisationClosing balance

21,720,693,918

(1,305,322,224)20,415,371,694

16

Prior periodY'.N.P

29,317,700,57614,000,000,000

(21,597,006,658)21,720,693,918


26. OWNER'S EQUITY

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

CIosinq baIance __ ~O-"p-,=e,,-!n.:.:in.:..:q,,----,=,b-,=,a-,-,Ia:..:.n-,-,c=e

Number of authorized sharesNumber of issued and fully paid sharesNumber of outstanding shares in circulationTreasury sharesParvalue (VND)

42,978,151 28,942,64642,978,151 28,942,64642,967,851 28,932,346

10,300 10,300__~=--=~~1~0~,~00~0~===========~1~0~,~00~0~

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

According to Resolution No. 20/DHQT-IMEX dated 26 April 2016 by Annual GeneralShareholder's meeting of Imexpharm Pharmaceutical Joint Stock Company, the Generalshareholders approved the issuance of 10,129,793 shares with the par value is 10,000VND/ share to increase the capital contribution of the owner. In which,

a) 1,447,000 shares were issued under the Employee Stock Option Program ("ESOP") andthe Company has been approved by the State Securities Commission of Vietnam in theOfficial Letter No. 946/UBCK-QLPH on 23 February 2017. The Company has completedthe issuance of 1,447,000 shares in accordance with the Official Letter No. 71/IMEX onthe Report of share issuance to the company's employees on 15 March 2017.

b) 8,882,793 shares were issued in the form of shares to existing shareholders at a ratioof 10:3 and the Company has been approved by the State Securities Commission ofVietnam in the Official Letter No. 79/GCN-UBCK on 01 December 2016. The Companyhas completed the issuance of 8,662,793 shares in accordance with the Official LetterNo. 44/IMEX on the Report of share issuance to increase share capital on 28 February2017.

According to Resolution No. 26/NQ-IMEX approved on 15 April 2017 at the GeneralShareholder's Meeting of Imexpharm Pharmaceutical Joint Stock Company, Companyapproved the 2016 profit after tax distribution in which dividends under bonus issue is3,905,712 shares at at ratio of 10:1

As at 30 June 2017, Company completed the additional issuance of 14,035,505 sharesabove.

Actual charter capital contributed by the shareholders as at 30 June 2017 and 31 December2016 was as follows:

Closing balanceShare % Capital

~

Opening balanceShare % Capital

~Vietnam Pharmaceutial Corporation 9,830,459 22.87% 98,304,590,000 6,874,447 23.75% 68,744,470,000Balestrand Umited 2,522,560 5.87% 25,225,600,000 1,764,029 6.09% 17,640,290,000Franklin Templeton Investment - 3,513,252 8.17% 35,132,520,000 2,456,820 8.49% 24,568,200,000Templeton Frontier Markets FundKwe Beteiligungen AG 4,345,372 10.11 % 43,453,720,000 2,382,130 8.23% 23,821,300,000Pha No Pharmaceutical Joint Stock 2,894,658 6.74% 28,946,580,000 2,631,160 9.09% 26,311,600,000CompanyOthers 19,871,850 46.24% 198,718,500,000 12,834,060 44.34% 128,340,600,000

42,978,151 1000/0 429,781,510,000 28,942,646 1000/0 289,426,460,000

17

IMEXPHARM PHARMACEUTICAL JOINT StOCK COMPANYNOTES TO THE FINANCIAL STATEMENTS (Continued) FORM B 09a-DN

Movement in owners equity:

Owner's Other owner's I nvestment andcontributed capital Share premium capital Treasury shares development fund Retained earnings Total

Y:JiQ 'iIiQ ~ ~ ~ Y:JiQ Y:JiQ

For the 6-month period ended 30 June 2016As at 01/01/2016 289,426,460,000 297,733,719,049 2,420,789,142 232,200,344,467 85,049,695,558 906,831,008,216Profit for the period 40,619,179,226 40,619,179,226Dividends declared (57,885,292,000) (57,885,292,000)Fund appropriation 22,723,890,453 (25,842,398,378) (3,118,507,925)Remuneration to the (926,542,327) (926,542,327)As at 30/6/2016 289,426,460,000 297,733,719,049 2,420,789,142 254,924,234,920 41,014,642,079 885,519,845,190

For the 6-month period ended 30 June 2017As at 01/01/2017 289,426,460,000 297,713,719,049 2,420,789,142 (123,600,000) 254,924,234,920 91,554,807,500 935,916,410,611Share issuance 101,297,930,000 303,891,755,000 405,195,685,000Profit for the period 59,799,967,388 59,799,967,388Dividends by cash (31,249,711,200) (31,249,711,200)Dividends by share 39,057,120,000 (39,057,120,000)Fund appropriation 17,696,779,643 (19,835,901,001) (2,139,121,358)Bad debts written off (6,704,123,874 ) (6,704,123,874 )Remuneration to the (1,011,593,446) (1,011,593,446)Other (370,394,695) (370,394,695)As at 30/6/2017 429,781,510,000 601,241,079,354 2,420,789,142 (123,600,000) 265,916,890,689 60,200,449,241 1,359,437,118,426

According to Resolution No. 26/NQ-IMEX approved on 15 April 2017 at the General Shareholder's Meeting of Imexpharm Pharmaceutical Joint StockCompany, the 2016 profit after tax distribution has been approved as follows:

a) Distribution to the Bonus and Welfare fund with the amount ofVND 12,139,121,358 (including the temporary distribution ofVND 10,000,000,000in 2016 and the additional distribution of VND 2,139,121,358 in 2017 as officially approved);

b) Distribution to the Investment and Development Fund with the amount of VND 17,696,779,643;c) Remuneration of the Boards of Management and Supervisory due to the achievement of profit target according to Article 11 Clause 25 of the

Company Charter with the amount of VND 1,011,593,446;d) Declaration of cash and share issue (at a ratio of 10: 1) dividends with the amount of VND 31,249,711,200 and VND 39,057,120,000

respectively which has been fully paid to shareholders in the period.

According to Resolution No. 32/NQ-HDQT-IMEX on 27 July 2017, Board of Management approved to write-off irrecoverable debt of Mr. Phan VanLiet - Director at Ca Mau Branch with the amount of VND 6,704,123,874 by Investment and development fund. Company continue to managesuch debt in off-balance sheet and record as other income when outstanding is collected.

18

IMEXPHARM PHARMACEUTICAL JOINT STOCK COMPANYNOTES TO THE FINANCIAL STATEMENTS (Continued) FORM B 09a-DN

27. OFF BALANCE SHEET ITEMS

Foreign currency:

United States Dollar (USD)Euro (EUR)

Bad debts written off:

Closing balance66,593

Opening balance71,731

485

Closing balanceVND

Opening balanceVND

Bad debts written off 14 A2 6 ,289 ,314 __ ......;.7.,7;..;2;;.;2;.1".;;.16;;;5;"j,..;.4..;.40,;;.

28. BUSINESS AND GEOGRAPHICAL SEGMENTS

Business segments

The Company's principal activities are to manufacture and purchase materials used forprocessing pharmaceutical products and other products by the Company. Other businessactivities make up minor ratio in total revenue and operating result of Company in thisperiod as well as the previous ones. Hence, the financial information presented in balancesheet as at 31 December 2017 and 31 December 2016 as well as revenues, expensespresented in the income statement for the period from 1 January 2017 to 30 June 2017and previous periods are relevant to principal activities. Consequently, the Company didnot prepare the report by business segment.

Geographical segments

The Company's revenue are generated by consumption the finished goods in domesticwhereas the revenue generated by exporting makes up minor ratio in total revenue andoperating result of Company for the period from 01 Jannuary 2017 to 30 June 2017 andthe previous periods. Consequently, the Company did not prepare the report bygeographical segment.

29. NET REVENUE

DeductionsSales returnSales discountSales rebates

~Current period Prior period .OO·OG

~VND VND 'IHANI'G TV

2,198,558,439 7,664,503,009 EMHUl441,485,177,829 388,351,188,881 JITT'

56,388,125,186 39,594,571,689 NAN21,656,579,176 16,005,470,906~521,728,440,630 451,615,734,485 ~~

(10,755,955,770) (6,379A23,125)(10,704A11,773) (16,130,549,250)

(121,717,735)(21,582,085,278) (22,509,972,375)500,146,355,352 429,105,762,110

Current period Prior period"iNJ2 VND

1,815,702,163 3,758,018,530199,497,318,990 185,611,392,412

35,390,929,201 29,325,654,38932,937,710,377 31A54,033,70717,118,254,711 13,342,049,494

286,759,915,442 263,491,148,532

Sales of goodsSales of exported goodsSales of manufactured goodsSales of franchised qoodsOther revenues

30. COST OF SALES

Cost of exported goodsCost of manufactured goodsCost of franchised goodsCost of promotion goodsCost of other sales

19

IMEXPHARM PHARMACEUTICAL JOINT STOCK COMPANYNOTES TO THE FINANCIAL STATEMENTS (Continued)

31. OPERATING COST BY NATURECurrent period

VND

Raw materials and consumablesLabourDepreciation and amortizationOut-sourced servicesOther expenses

219,200,638,40381,406,285,743

16,086,372,16531,543,723,93979,675,695,798

FORM B 09a-DN

Prior periodVND

193,807,426,81871,012,601,58919,966,147,60427,701,738,49856,821,498,265

427,912,716,048 369,309,412,774

32. FINANCIAL INCOME

Current period~

Bank interestForeign exchange gainDividend incomeOthers

Prior periodJLIiQ

6,190,245,946 2,326,293,0581,136,880,722 1,175,608,1992,452,984,300 2,423,889,000

113,170,000 209,518,7809,893,280, 968 _---:6;,!;,,;;;,1.:.3.:.5r.::,3~0;.::9;.c.,0;:.;3;:.;7:..

33. FINANCIAL EXPENSES

Current period~

Interest expenseForeign exchange lossReversal of provision for impairmentof financial investmentsPayment discountOthers

Prior periodJLIiQ

259,336,250 55,154,4391,192,696,374 355,712,860

(64,935,550) (122,577,520)

5,028,141,387 5,105,083,40535,000,000 51,095,000

6,450, 238,461 _--=5:,!,'..:,4~4..:.4,~4~6;.:8;.c.' 1:.;8~4.=.

Prior periodJLIiQ

34. SELLING EXPENSES AND GENERAL AND ADMINISTRATION EXPENSES

Current periodVND

a) General and administration expensesManagement staff expenseDepreciation expensesOutsourced service expensesScientific and technological fund distributionTravelling, entertainment and training expensesOthers

9,102,840,8102,669,780,538

12,190,927,064

9,865,745,0661,955,303,800

35,784,597 ,278

b) Selling expensesStaff expenseOutsourced expensesMarket research and development expensesOthers

7,740,650,1622,572,548,3655,695,779,461

7,537,966,7121,859,482,504

25,406,427,204

32,105,418,685 30,191,718,8987,491,301,248 6,428,187,980

57,848,893,850 44,947,569,0877,922,589, 545 _----::-~7L:.,9~0,-=,9:L,4:,-!2=-<7~,",-07,::-,2=-

105,368,203,328 89,476,903,037

20


35. CURRENT CORPORATE INCOME TAX EXPENSECurrent period

VND

Current corporate income tax expensesCorporate income tax based on taxable income inthe current period

FORM B 09a-ON

Prior periodVND

14,824,617,433 9,984,849,807

14,824,617,433 9,984,849,807

The current corporate income tax expense for the period was computed as follows:

Current periodVND

74,624,584,8211,951,486,642

(2,452,984,300)74,123,087,163

20%

Accounting profit before taxAdd back: non-deductible expensesLess: non-taxable profitTaxable profitTax rateCurrent corporate income tax expense 14,824,617,433

Prior periodVND

50,604,029,0331,744,109,000

(2,423,889,000)49,924,249,033

20%9,984,849,807

The Company is obliged to pay corporate income tax at the rate of 20% of its assessableincome (Year 2016: 20%).

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

Corporate income tax expenses for the period from 1 January 2017 to 30 June 2017 arethe temporary figures. Corporate income tax expense for the financial year ending as at 31December 2017 will be calculated at the end of the financial year.

36. BASIC EARNINGS PER SHARE

The calculation of the basic and diluted earnings per share attributable to the ordinaryequity holders of the Company is based on the following data:

Current periodVND

Profits attributable to the Company's shareholdersDeductions from Bonus and welfare fundEarnings for the purposes of basic earnings perWeighted average number of ordinary sharesBasic earnings per share

59,799,967,388(7,175,996,087)52,623,971,301

35,891,7741,466

Prior periodVND

40,619,179,226(6,069,560,679)34,549,618,547

31,836,9111,085

Basic earnings per share for the period ended 30 June 2017 are calculated based on theprofit attributable to the Company's shareholder for the above period and estimated figuresof bonus and welfare fund will be deducted from profit after tax with the same rate withyear 2016 at the rate 12%. The purpose of this calculation is for the comparability betweenfigures of two periods because the Company has not had any plan for bonus and welfarefund appropriation from profit after tax of 2016.

During the period, the Company has also distributed dividends by issuing 3,905,712 sharesfor the shareholders from retained earnings of year 2016 in accordance with the ResolutionNo. 26/NQ-IMEX of Annual General Shareholders' Meeting dated 15 April 2017. This eventled to a retrospective adjustment to the weighted average number of ordinary shares andearnings per share for the period ended 30 June 2016 as follows:

Prior period(after restated)

Weighted average number of ordinary sharesEarnings per share

31,836,9111,085

21

Prior period(before restated)

28,942,6461,235


37. OPERATING LEASE COMMITMENTS

FORM B 09a-ON

Current period"L!'iQ

Prior periodVND

Minimum lease payments under operatingleases recognized in the interim incomestatement for the period 224,240,000 271,745,898

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

Current period"L!'iQ

Prior period~

On demand or within one yearIn the second to fifth year inclusive

232,703,000 65,000,0005° ,0° ° ,0° ° --'6::..:5<..1..,-"'-0 0",-,0"-,,-,<-0-,,,-0o~

282, 703,000 ~~=1,:;.3,;;,0b'0;.;;0;.;0.,0;;;.0;;;.0;;;.

Operating lease payments represent the total rentals payable by the Company for rentingpremises to organize drug stores of some branches in the country.

38. FINANCIAL INSTRUMENTS

Capital risk management

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

The capital structure of the Company consists of net debts and equity of shareholders(comprising owner's contributed captital, share premium, other owner's capital,investment and development fund and retained earnings).

Significant accounting policies

Details of the significant accounting policies and methods adopted (including the criteriafor recognition, the bases of measurement, and the bases for recognition of income andexpenses) for each class of financial asset and financial liability are disclosed in Note 3.

Categories of financial instrumentsCarrying amount

Closing balance Opening balanceVND ~

Financial assetsCash and cash equivalentsShort-term financial investmentsTrade and other receivablesLong-term financial investments

57,771,905,003285,528,335,260421,912,609,071

65,333,504,700

100,127,453,68615,392,915,260

233,529,162,91660,916,689,150

830,546,354,034 409,966,221,012

Financial liabilitiesTrade and other payablesBorrowingsAccrued expenses

126,036,819,89520,000,000,00044,869,448,987

91,181,863,177

68,530,614,372190,906,268,882 159,712,477,549

The Company has not assessed fair value of its financial assets and liabilities as at thebalance sheet date since there are no comprehensive guidance under Circular No.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 assetsand liabilities. While Circular 210 refers to the application of International FinancialReporting Standards (IFRS) on presentation and disclosures of financial instruments, it didnot adopt the equivalent guidance for the measurement and recognition of financialinstruments, including application of fair value, in accordance with IFRS.

22


Financial risk management objectives

The Company has set up risk management system to identify and assess the risks exposedby the Company and designed control policies and procedures to manage those risks at anacceptable level. Risk management system is reviewed on a regular basis to reflect changesin market conditions and the Company's operations.

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

Market risk

The Company's activities expose it primarily to the financial risks of changes in foreigncurrency exchange rates and prices. The Company does not hedge these risk exposuresbecause the Board of General Directors assessed that the costs to be incurred to hedgethese risks may exceed the inherent cost due to the fluctuation of the foreign exchangerates 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 assetsand monetary liabilities at the end of the period/year are as follows:

LiabilitiesAssetsOpening balance Closing balance

VND VND2,593,574,639 2,543,314,810

11.463.154 _

Opening balanceVND

60,462,317,2231.040.765.739

Closing balanceVND

69,054,062,0473.527,475.803

United States Dollar (USD)Euro (EUR)

Foreign currency sensitivity analysis

The Company is mainly exposed to the United States Dollar.

The following analysis details the Company's sensitivity to a 3% (2016: 3%) increase anddecrease in Vietnam Dong against United States Dollar. As rate 3% (2016: 3%) is thesensitivity rate used when reporting foreign currency risk internally to the Board of GeneralDirectors and represents the Board of General Directors' assessment of the reasonablypossible change in foreign exchange rates. The sensitivity analysis includes onlyoutstanding foreign currency denominated monetary items and adjusts their translation atthe period end for a 3% (2016: 3%) change in foreign currency rates. For a 3% (2016:3%) increase/decrease in United States Dollar against Vietnam Dong, the profit before taxduring the period would decrease/increase by VND 1,995,322,417 (2016: VND1,736,062,278).

Commodity price risk management

The Company purchases materials, commodities from local and foreign suppliers forbusiness purpose. Therefore, the Company is exposed to the risk of changes in sellingprices of materials, commodities.

Share price risk management

Shares held by the Company are affected by market risks arising from the uncertaintyabout future prices of such shares. The Company manages this risk exposure by setting upinvestment limits. The Company's Board of Management also assesses and approvesdecisions on share investments such as operating industry, investees, etc. The Companyassesses the share price risk to be immaterial.

Credit risk

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

23

~500,£--...;:NHA~IGT';~I/HUJITlNA~

~.~


Liquidity risk management

The purpose of liquidity risk management is to ensure the availability of funds to meetpresent and future financial obligations. Liquidity is also managed by ensuring that theexcess of maturing liabilities over maturing assets in any period is kept to manageablelevels relative to the amount of funds that the Company believes can generate within thatperiod. The Company's policy is to regularly monitor current and expected liquidityrequirements to ensure that the Company maintains sufficient reserves of cash, borrowingsand adequate committed funding from its shareholders to meet its liquidity requirementsin the short and longer term.

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

Closing balance Less than 1 year More than 1 year TotalVND 'i.N.Q VND

Financial assetsCash and cash equivalents 57,771,905,003 57,771,905,003Short-term financial investments 285,528,335,260 285,528,335,260Trade and other receivables 421,832,364,331 80,244,740 421,912,609,071Long-term financial investments 65,333,504,700 65,333,504,700

765,132,604,594 65,413,749,440 830,546,354,034

Closing balance Less than 1 year More than 1 year TotalVND VND VND

Financial liabilitiesTrade and other payables 125,986,819,895 50,000,000 126,036,819,895Borrowings 20,000,000,000 20,000,000,000Accrued expenses 44,869,448,987 44,869,448,987

190,856,268,882 50,000,000 190,906,268,882

Net liquidity gap 574,276,335,712 65,363,749,440 639,640,085,152

Opening balance Less than 1 year More than 1 year TotalVND VND VND :::::

Financial assets 1

Cash and cash eq uivalents 100,127,453,686 100,127,453,686 ;~Short-term financial investments 15,392,915,260 15,392,915,260Trade and other receivables 233,448,918,176 80,244,740 233,529,162,916 HILong-term financial investments 60,916,689,150 60,916,689,150

348,969,287,122 60,996,933,890 409,966,221,012/

Opening balance Less than 1 year More than 1 year Total ~'.~VND VNP VND

Financial liabilitiesTrade and other payables 91,104,863,177 77,000,000 91,181,863,177Accrued expenses 68,530,614,372 68,530,614,372

159,635,477,549 77,000,000 159,712,477,549

Net liquidity gap 189,333,809,573 60,919,933,890 250,253,743,463

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

39. RELATED PARTY TRANSACTIONS AND BALANCES

List of related parties

Related parties Relationship

Gia Dai Pharmaceutical Company LimitedAgimexpharm Pharmaceutical Joint Stock CompanyS.pharm Pharmaceutical Joint Stock CompanyDong Thap Muoi Research Conservation andDevelopment Pharmaceutical Joint Stock Company

AssociateAssociateAssociateAssociate

24


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

Closing balanceVND

Opening balanceVND

Trade receivables

Agimexpharm Pharmaceutical Joint Stock CompanyS.pharm Pharmaceutical Joint Stock Compay

8,498,768,1751.041.069.750

11,485,487,1081.925.733.834

Trade payablesAgimexpharm Pharmaceutical Joint Stock Company 5,799,132,816S.pharm Pharmaceutical Joint Stock Compay 290.638.530

During the period, the Company entered into the following significant transactions with itsrelated parties:

Current period'il'ID.

Prior period1L.I':iQ

SalesAgimexpharm Pharmaceutical Joint Stock CompanyS.pharm Pharmaceutical Joint Stock Compay

11,912,855,5262.911.111.113

12,990,391,7322.537 .278.428

PurchaseAgimexpharm Pharmaceutical Joint Stock Company 14,944,185,530 5,514,175,275S.pharm Pharmaceutical Joint Stock Compay 679.114.800 746.001.900

Remuneration of the Board of Management and Board of General Directors

Remuneration paid to members of the Board of Management and Board of GeneralDirectors of the Company during the period was as follows:

Current periodVND

Prior periodVND

Salaries, bonus and benefits in kind 7,373,906,500 6,083,340,200

40. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash outflows for purchases of fixed assets and construction in progress during the periodexclude an amount of VND 22,079,058,554 (at 31 December 2016: VND 6,018,113,998),representing an addition in fixed assets during the period that has not yet been paid.Consequently, changes in accounts payable have been adjusted by the same amount.

Company declared dividends by share issues at the ratio of 10: 1 from the 2016 profit aftertax with the value of VND 39,057,120,000. Such dividends distribution does not representin financing cashflows during the period.

~==P"S,uyen Quoc DinhDeputy General Director11 August 2017

D'Gong Hoang VuPreparer


25

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