15-5-20 Annual Report Traphaco2014

Developing corporate CULTURE
Adding value
ANNUAL REPORT 2014

CONTENTS
THE WAY OF GREEN HEALTH

Vision, Mission, Core Values 04
Message from the Chairwoman 06
RESPONSIBILITY GROWTH CONVENIENCE SATISFACTION SUSTAINABILITY DEVELOPMENT

from AN UNDERSTANDING HEART from QUALITY CREDIBILITY from NATIONWIDE SCALE from ENERGETIC PASSION from LONG-TERM COMMITMENT from WIN-WIN PRINCIPLE
RESPONSIBILITY GROWTH - CONVENIENCE SATISFACTION SUSTAINABILITY DEVELOPMENT

from AN UNDERSTANDING HEART from QUALITY CREDIBILITY from NATIONWIDE SCALE from ENERGETIC PASSION from LONG-TERM COMMITMENT from WIN-WIN PRINCIPLE
ORGANIZATION AND HUMAN RESOURCE FINANCIAL REPORTS

Organization structure of Traphaco joint stock company Report by the General Director
Subsidiaries and affiliated companies Independent Auditor’s Report
Organization chart of Traphaco joint stock company SUSTAINABLE DEVELOPMENT REPORT Consolidated balance sheet
CORPORATE GOVERNANCE
Introduction of the Board of Directors REPORT OF OPERATION ACTIVITIES Consolidated Income Statement
GENERAL INFORMATION Introduction of the Management Team DURING THE YEAR Number of members and structure of the Board of Directors and supporting sub-committees Corporate governance Consolidated Cash Flow Statement
and Board of Supervisory Activities of the Board of Directors and the Board of Supervisors Responsibilities to counterparts Notes to the consolidated financial statements
General information Labor Report (as of 31 December 2014) Report by the Board of Directors Responsibilities in product quality
Activities to enhance the corporate governance capacity
Scope of business Report on the business performance results in 2014 Supply chain management
Risk management report
Geographic area of business Assessment on the activities of the management team in 2014
Report on environmental impacts
Establishment and development history Report by the Management Team
Chartered capital increase progression Directions for business activities in 2015
Shareholder structure Report by the Supervisory Board
Flagship products Notable events in 2014
S.W.O.T Analysis Prestigious awards and recognitions
General information 08 Organization 20 Report of Operation 34 Corporate governance 66 Sustainable development 80 Financial reports 110
and human resource Activities during the year report
General information 10 Organization structure of 22 Report by the Board of Directors 36 Number of members and structure of 68 Corporate governance 83 Report by the General Director 113
Scope of business 11 Traphaco joint stock company Report on the business 36 the Board of Directors and supporting Responsibilities to counterparts 84 Independent Auditor’s Report 114
Subsidiaries and affiliated companies 24 performance results in 2014 sub-committees
Geographic area of business 11 Responsibilities in product quality 92 Consolidated balance sheet 115
Organization chart of 26 Assessment on the activities of 42 Activities of the Board of Directors 70
Establishment and development history 12 Supply chain management 101 Consolidated Income Statement 117
Traphaco joint stock company the management team in 2014 and the Board of Supervisors
Chartered capital increase progression 14 Report on environmental impacts 102 Consolidated Cash Flow Statement 118
Introduction of the Board of Directors 28 Report by the Management Team 44 Activities to enhance the corporate 72
Shareholder structure 15 governance capacity Notes to the consolidated financial 119
Introduction of the Management Team 30 Directions for business activities in 2015 52 statements
Highlighted Products 16 Risk management report 74
and Board of Supervisory Report by the Supervisory Board 56
S.W.O.T Analysis 18
Labor Report (as of 31 December 2014) 32 Notable events in 2014 62
Prestigious awards and recognitions 64
VISION, MISSION, CORE VALUES
VISION CORE VALUES

By 2020, Traphaco will become a strong economic group which provides healthcare products The quality of the products and services is decisive to the existence of the Enterprise
and services with research & development capabilities to develop high-tech products from The added values for society, customers, employees and shareholders are the goals and
natural ingredients. drivers for a sustainable development
MISSION Creative labor is the foundation for development
Provides and contributes to society the products and services which are modern yet enriched Cooperative relationships, sharing, commitments and honoring commitments are the
with traditional values, with the sole intention of improving the quality of life. foundations of the corporate culture.
Always be organized around customers’ satisfaction, creates meaningful jobs and provides Being modern and traditional at the same time is Traphaco’s uniqueness.
employees with career-advancement opportunities.
Maximizes shareholders’ value for investors.
4 ANNUAL REPORT 2014 5

MESSAGE FROM THE CHAIRWOMAN
Dear shareholders, customers, investors and all Employees.
The reform of the distribution system has been successful. The company has conquered
the pharmaceutical retail market, closely linked up with 18,000 customers, reduced
percentage of sales to wholesalers, moved closer to the consumers, fully grasped the law
of supply and demand, and opened many development opportunities for Traphaco.
Ladies and Gentlemen,
In 2014, Traphaco continues to be honored as the “National General director, the great cooperation of our customers,
Brand - Vietnam Value 2014” title, with the slogan “Quality the best efforts of all staffs and employees – reform in the
– Innovation, creativity – Pioneering capacity”. In the past, distribution system has been successful. The company has
Traphaco intentionally set revenue growth target below conquered the pharmaceutical retail market, closely linked
other sustainable values; implemented reforms to build a up with 18,000 customers, reduced percentage of sales to
modern and professional distribution network. One year full wholesalers, moved closer to the consumers, grasped the
of concerns and struggles, Traphaco fiercely pursued its goal law of supply and demand, and opened many development
of price stabilization, enhanced customer relationships, and opportunities for Traphaco.
thoroughly implemented its business philosophy, “Integrity,
win-win, mutual development” - Confirmed its position as Ladies and gentlemen,
the number 1 pharmaceutical brand in Vietnam.
Difficulties are expected to continue in 2015, which require
Ladies and gentlemen, us to be more active, more creative, more aggressive and
more dedicated to turn the possibilities, opportunities
As 2014 has come to an end, Traphaco confirmed its firm created in 2014 into a reality. 2015 is the year of corporate
competitive capacity after 15 years of equitization. It is a culture development at Traphaco: “Cooperation, sharing,
pioneering enterprise: in implementation of the National commitment and honoring commitments”. The strength of
medicine strategy; in application of information technology in corporate culture, the strength of the strategy: “Traphaco –
the entire system, especially the distribution system; continues the way of green health”, Traphaco’s green value chain will
to be the forerunner in research and development, promotes steadily promote efficiency. We firmly believe that Traphaco
the advantages to make a difference. Traphaco is the first will have a spectacular take-off to achieve the 5-year strategic
enterprise to be granted certification by the Ministry of Health objectives (2011-2015).
for 04 medicinal plants which applied GACP - WHO technology
(Good practice for cultivation and collection of medicinal On this occasion, on behalf of the Board of Directors, I would
plants as recommended by the World Health Organization). It like to thank our dear customers for their companionship and
is the enterprise with the most stars of Vietnamese medicines high support; I share and appreciate the determination of the
of the whole industry (6/63 stars of the entire industry). entire Board of Directors and employees of the Company to
overcome tough challenges in the process of reform; We also
Implementing the sustainable development approach, appreciate the trust and encouragement of the shareholders
linking the development strategy with the objectives of the and investors.
Green Economy. Traphaco applies advanced management
system (GPs, ISO 9001: 2008, ISO 14001: 2004, the Japanese We always respect your views and we wish to have your
Kaizen 5S, KPI). Traphaco actively expands cooperation and companionship in the path of achieving sustainable
uses international services to gain market information, legal development.
advisory and staff training, enhances transparency, improves
risk management, continues to bring Traphaco to the “TOP Thank you very much.
50 best listed companies in Vietnam’s stock exchange
market “ (as recognized by Forbes magazine). Chairwoman of the Board
Ladies and gentlemen,
Traphaco has bravely reformed, dared to think, dared to do,

dared to change to develop. Despite these very difficult times,
it is Traphaco’s corporate culture that creates the strength
for the Company to overcome all obstacles. With the active
leadership of the Board, the strong management of the Vu Thi Thuan, Msc.
6 ANNUAL REPORT 2014 7

RESPONSIBILITY
from AN UNDERSTANDING HEART
GENERAL INFORMATION
General information
Scope of business
Geographic area of business
Establishment and development history
Chartered capital increase progression
Shareholder structure
Flagship products
S.W.O.T Analysis
GENERAL INFORMATION SCOPE OF BUSINESS
Producing and trading of pharmaceutical products, chemicals and medical equipment.

Official/
TRAPHACO JOINT STOCK COMPANY Purchasing, cultivating and processing pharmaceutical herbal ingredients.
International name
Abbreviated name Traphaco Manufacturing of prescription medicines.
Chartered capital VND246,764,330,000 Providing consulting services to the production of pharmaceutical products and cosmetics.
Stock symbol TRA Importing and exporting pharmaceutical materials and products.
Official address 75 Yen Ninh Street, Ba Dinh District, Hanoi Producing and trading cosmetics.
Telephone (+84-4) 3683 0751
Producing and trading foods.
Fax (+84-4) 3681 5097
Providing consulting services and technology transfer in medical and pharmaceutical fields.
Website www.traphaco.com.vn
Producing and trading liquors, beers and beverages (excluding bar operation).
Business Registration No. 0100108656 issued first by Hanoi Department of Importing and exporting of products manufactured by the company.
Planning and Investment on 24 December 1999 and last updated for 20th
time on 10 June 2014.
GEOGRAPHIC AREA OF BUSINESS
0.2%
23 %
77 % 99.8%
OTC ETC Domestic Export
10 ANNUAL REPORT 2014 GENERAL INFORMATION 11

ESTABLISHMENT AND DEVELOPMENT HISTORY
1972 A medicine production workshop of the railway health

authority was set up.
1993 Railway pharmaceutical factory (RAPHACO).
1998 Set up the manufacturing factory in Phu Thuong – First GMP-
certified manufacturing in the North.
2000 At the founding General Shareholder Meeting. Traphaco
became one of the first pharmaceutical companies to be
equitized.
2001 Renamed Traphaco joint stock company, with diversified
business objectives, to stay relevant to a new economy.
2002 Set up the first branch in Ho Chi Minh City. Set up Traphaco 2010 Traphaco proudly received the Labor Hero title.
Sapa Limited Liabilities Company with 2 members: Traphaco
The only one enterprise to receive the Wipo award from the World
and Lao Cai Pharmaceutical Company.
Intellectual Property Organization. Won 3rd prize for corporate social
2004 Commenced and put into full operation Hoang Liet manufacturing responsibilities to the environment.
factory – Hoang Mai – Hanoi (The factory was certified GMP-WHO
2011 Traphaco proudly won the Top 10 enterprise for corporate social
in 2007 by the Drug Administration of Vietnam).
responsibilities award.
2006 Set up the branch in the Central region in Da Nang
2012 Celebrated the 40th anniversary of the company, proudly received the
Set up Traphaco High-Technology Joint Stock Company Labor Award First Class.
(Traphaco CNC).
2013 Named TOP 10 Vietnam’s Gold Star, TOP 10 Corporate with Social
2007 Successfully conducted the IPO.
Responsibilities. Asia-Pacific’s Global Performance Excellence Award.
Commenced operation of the joint-venture traditional
medicine manufacturing factory in Van Lam – Hung Yen 2014 Won “the Star of Vietnamese medicines” Award for Traphaco brand and
with GMP-WHO accreditation. 5 of Traphaco’s products were selected by the Ministry of Health.
2008 On 26 November 2008, the company’s TRA stock ticker became Won the Vietnam Value Award 2014.
officially listed on the Ho Chi Minh Stock Exchange (HOSE).
2009 Traphaco was recognized as the No. 1 pharmaceutical
brand in Vietnam. Introduced Traphaco Sapa Single Member
Limited Liabilities Company in Lao Cai, of which Traphaco
owned 100%.
CHARTERED CAPITAL INCREASE PROGRESSION SHAREHOLDER STRUCTURE
Ownership
Shareholders Restricted Unrestricted Total
(%)
1 2 3 4=2+3 5
I. Significant shareholders 0 2,434,621 2,434,621 9.87
After 15 years of being a joint stock company, Traphaco has had breakthrough
growths. Currently, the company’s chartered capital amounts to VND246,764, Board of Directors 0 1,257,189 1,257,189 5.09%
330,000. Traphaco is not only the leader in the Vietnamese traditional medicine but also Of which: - Local 0 1,257,189 1,257,189 5.09%
the most recognized Brand, the pioneer in safe, GACP-WHO-certified ingredients sourcing - International 0 0 0 0
(excluding shares on behalf of institutions)
to ensure sustainable development and for the health of the community.
Board of Management
0 1,077,424 1,077,424 4.37
(excluding members of the Board of Directors)
Supervisory Board 0 26,152 26,152 0.11%
Chief Accountant 0 32,968 32,968 0.13%
Authorized spokesperson 0 40,888 40,888 0.17%
II. Treasury shares 443 2,690 3,133 0.03%
III. Company’s Labor Union 0 0 0 0
Timeline of Purpose of Pre-issuance Post-issuance
issuance issuance chartered capital Capital raised chartered capital IV. Other shareholders 5,560 22,233,119 22,238,679 90.12%
Issuance to existing 1. Local 5,560 10,967,521 10,973,081 44.5%
T9/2006 9,900,000,000 10,100,000,000 20,000,000,000
shareholders
1.1 Individual 5,560 1,951,563 1,957,123 7.93%
Bonus share issuance for
T3/2007 20,000,000,000 800,000,000 20,800,000,000
employees 1.2 Institutional 0 214,462 214,462 0.9%
Share dividend issuance to Of which State: 0 8,801,496 8,801,496 35.67%
T4/2007 20,800,000,000 41,600,000,000 62,400,000,000
existing shareholders 2. Foreign 0 11,265,598 11,265,598 45.7%
Initial Public Offering, issuance 2.1 Individual 0 42,647 42,647 0.17%
T11/2007 to existing shareholders, and 62,400,000,000 17,600,000,000 80,000,000,000
employees 2.2 Institutional 0 11,222,951 11,222,951 45.5%
Bonus share issuance for TOTAL: 6,003 24,670,430 24,676,433 100%

T12/2008 80,000,000,000 1,585,200,000 81,585,200,000
employees
Issuance to existing LIST OF SHAREHOLDERS WITH OWNERSHIP OF ABOVE 5% SHAREHOLDER
T10/2009 81,585,200,000 20,396,300,000 101,981,500,000
shareholders
Issuance to existing Identification
T4/2010 101,981,500,000 20,395,790,000 122,377,290,000 Number Ownership
shareholders No. Shareholder number/Business Address
of shares (%)
Certificate number
Bonus share issuance for
T12/2010 122,377,290,000 1,020,950,000 123,398,240,000
employees State Capital Investment 117 Tran Duy Hung street, Trung Hoa
1 0101992921 8,801,496 35.67
Issuance to existing Corporation Ward, Cau Giay district, Hanoi.
T9/2013 123,398,240,000 123,366,090,000 246,764,330,000
shareholders VIETNAM AZALEA FUND 8 Floor Capital Place Building, 06 Thai Van
2 CS6153 6,167,492 24.99
LIMITED Lung, District 1, Ho Chi Minh City.
Card Corporate Services Ltd,, Second
VIETNAM HOLDING Floor, Zephyr House, 122 Mary PO Box
3 CS1077 2,573,748 10.43
LIMITED 709 GT, George Town, Grand Cayman,
Cayman Islands
Source: List of shareholders as of 6 February 2015.

HIGHLIGHTED PRODUCTS
Brain tonic
Healthy brain for a happier life Liver tonic - Enhancing detoxification For effective treatment of
Liver purifier For effectively managing and preventing
THE GASTRO-DUODENAL ULCERS NATURAL BALANCED NUTRITIONAL DRINK
ACUTE HEMORRHOIDS
Relief pain and irritation
Shrink hemorrhoids
HONORED THE TITLE HONORED THE TITLE HONORED THE TITLE
“THE STAR OF “THE STAR OF “THE STAR OF Preventing from symptoms returning
VIETNAMESE MEDICINE” VIETNAMESE MEDICINE” VIETNAMESE MEDICINE”
Four divisions (四駕馬車) related to The China-Denmark Milk Technology The Arla Foods (愛氏晨曦) brand Started the new Five-Year Strategic
Cough
quality management medicine
were established and Cooperation Centre was officially MOUTHWASH FOR Plan to illustrate Mengniu’s future
was launched in China.
to enhance quality control across the inaugurated. ALL FAMILY MEMBERS
direction.
DU HUO JI SHENG TANG
NOURISHMENT FOR HEALTHY BONE
trengthening tendons and bones Stop coughing, loosing mucus
reating rheumatism Relief of allergy symptoms, help for breathing easier
Non-sedating with tablet dosage
HONORED THE TITLE HONORED THE TITLE

“THE STAR OF “THE STAR OF
VIETNAMESE MEDICINE” VIETNAMESE MEDICINE”

S.W.O.T ANALYSIS
S STRENGTHS
O
Good production capacity: 02 GMP-WHO certified manufacturing facilities (including
1 traditional medicine factory and 01 Western medicine factory); various dosage forms; OPPORTUNITIES
sufficient capacity to meet the demands of the market.
A nationwide distribution system with the formation of 3 main distribution centers

in 3 regions: Hanoi, Da Nang and Ho Chi Minh City. From 03 centers, the distribution Vietnam’s National Strategy for developing the pharmaceutical industry to 2020, a vision
system has reached the entire country through 18 branches, 6 subsidiaries and affiliated to 2030. The specific objectives until the year 2020 stated in the strategy are: 100%
companies and 18,000 customers nationwide. drugs timely supplied to meet the needs of disease prevention and treatment; strive to
produce 20% of raw materials for domestic production; domestic drugs production to
Our team is consisted of professional and dynamic staffs, highly qualified technicians;
account for 80% of total annual drug consumption, in which, herbal medicines account
dedicated managers who have been with the company for a long time.
for 30%. This creates a great opportunity for the domestic manufacturing enterprises,
In 2014, the success of the “customer-centric” OTC policy changed the whole view of including Traphaco.
pharmacies across the country toward Traphaco products. The pharmacies indeed
In Vietnam, there is a growing trend of “green consumption”, in which consumers are
granted their trust and support to Traphaco, because: Selling Traphaco products is
fond of brands with good attitudes toward environmental protection, especially green
selling high quality products with reasonable profit.
products. This opens up a new market for products such as Hoat huyet duong nao,
Modern management model in sales management: Equipping tablet for each Boganic from Traphaco.
salesperson to manage sales in an accurate and timely manner, with adequate data
system for customers care.
Environmentally friendly Green Technology. Using more than 90% of pharmaceutical
T
ingredients from domestic market.
THREATS
Focus on developing medicinal products with outstanding quality will lead to higher
W
costs, it would be difficult for Traphaco to compete in the tender processes at treatment
WEAKNESSES facilities as price competition is important and prerequisite.
The choice to focus on developing products derived from natural, safe, high quality
ingredients requires pharmaceutical supply stability and quality control. So, to ensure
regular maintenance of GACP – WHO procedures (Good practice for cultivation and
The people believe in Traphaco products. However, in previous years, Traphaco only
harvesting of medicinal plants as recommended by the World Health Organization) in
developed its revenue in two key products: Hoat huyet duong nao and Boganic.
farming areas is a challenge to Traphaco.
Drug supply service to customers was not good, and many deliveries still took 36 hours
Customers could rarely distinguish between products with green ingredients and
to get to customers.
other normal products.
No business has ever developed clean pharmaceutical ingredient areas. Therefore, the
development of the clean pharmaceutical ingredient areas require a lot of resources,
especially training costs and training the people to comply with the clean planting
procedures.

GROWTH
from QUALITY CREDIBILITY
ORGANIZATION AND HUMAN RESOURCE

Organization structure of Traphaco joint stock company
Subsidiaries and affiliated companies
Organization chart of Traphaco joint stock company
Introduction of the Board of Directors
Introduction of the Management Team
and Board of Supervisory
Labor Report (as of 31 December 2014)
TRAPHACO’S ORGANIZATION STRUCTURE
GENERAL SHAREHOLDERS ASSEMBLY
Hoang Liet factory

BOARD OF DIRECTORS: 7 members Board of Management: 04 members
1. Tablet – Fluid Workshop
1. Ms. Vu Thi Thuan Chairwoman of the Board 1. Mr. Tran Tuc Ma General Director 2. Gel – Soft Capsule Workshop
2. Mr. Tran Tuc Ma Deputy Chairman of the Board 2. Ms. Hoang Thi Ruoc Deputy General Director 3. Packaging Workshop
3. Mr. Nong Huu Duc Member of the Board of Directors 3. Mr. Nguyen Huy Van Deputy General Director 4. Western Medicine Workshop
4. Ms. Nguyen Thi Lan Member of the Board of Directors 4. Ms. Nguyen Thi Lan Deputy General Director
5. Mr. Le Tuan Member of the Board of Directors Retail locations in Hanoi
Technical Directors: 02 members
6. Mr. Tran Manh Huu Member of the Board of Directors 1. Store No. 2 – 1st floor, 168 Ngoc Khanh, Ba Dinh, Hanoi
7. Mr. Phan Quoc Cong Member of the Board of Directors 1. Mrs. Nguyen Thi Hau Production Director 2. Store No. 207 – 2nd floor, Hapu Pharmaceuticals and Medical Equipment Distribution Center,
2. Mr. Nguyen Van Bui Director of Sales 1 Nguyen Huy Tuong, Thanh Xuan District, Hanoi.
Board of Supervisors: 3 members
1. Ms. Pham Thi Thanh Duyen Chairwoman Traphaco’s 100% owned subsidiaries
2. Ms. Do Khanh Van Member
1. Sapa Single Member Limited Liabilities Company
3. Ms. Nguyen Thi Luong Thanh Member
2. Traphaco Hung Yen Limited Liabilities Company
Affiliated companies
18 Branches
1. Traphaco High-Technology Joint Stock Company (CNC - 51% ownership)
2. Dak Lak Pharmaceuticals and Medical Equipment Joint Stock Company (58% ownership)
3. Quang Tri Pharmaceuticals and Medical Equipment Joint Stock Company (43% ownership)
1. Ho Chi Minh city 10. Quang Ngai
4. Thai Nguyen Pharmaceuticals and Medical Equipment Joint Stock Company (51% ownership)
2. Central provinces 11. Khanh Hoa
3. Nam Dinh 12. Can Tho Social political organization
4. Nghe An 13. Gia Lai
5. Thanh Hoa 14. Quang Ninh Company’s Party committee: includes 6 party sub-units
6. Vinh Long 15. Hai Duong
Committee’s General Secretary: Mr. Tran Tuc Ma
7. Hai Phong 16. Tien Giang
Committee’s Deputy Secretary: Ms. Hoang Thi Ruoc
8. Dong Nai 17. Phu Tho
9. Binh Thuan 18. Lao Cai Labor Union: includes 6 division labor union
11 Departments
Chairwoman of the company’s labor union: Ms. Hoang Thi Ruoc
Deputy Chairman: Mr. Nguyen Duy Vinh
Deputy Chairwoman: Ms. Tran Thi Anh Phuong
1. Human Resources Department 7. Exports – Imports and Procurement Department
2. Administration – Management Department 8. Quality Control Department Ho Chi Minh Communist Youth Union at Traphaco: includes 6 division unions
3. Research and Development Department 9. Quality Assurance Department
4. Financial – Accounting Department 10. Marketing Department General Secretary: Ms. Do Thi Hanh Le
5. Business Department 11. Risk Management Department Deputy General Secretaries: Ms. Nguyen Thi Chinh
6. Planning Department Mr. Le Minh Duc
22 ANNUAL REPORT 2014 ORGANIZATION AND HUMAN RESOURCE 23

SUBSIDIARIES AND AFFILIATED COMPANIES
TRAPHACO SAPA SINGLE MEMBER LIMITED LIABILITIES COMPANY DAK LAK PHARMACEUTICALS AND MEDICAL EQUIPMENTS JOINT STOCK COMPANY (BAMEPHARM)
Headquarter: Section 9, Sapa Town, Sapa District, Lao Cai Province Headquarter: 9A Hung Vuong, Buon Ma Thuot City, Dak Lak province
Chartered Capital: VND6,700,000,000 Chartered capital: VND19,415,880,000
TRAPHACO’s ownership: 100% TRAPHACO’s ownership: 58%
Main functions: Main functions:
TRAPHACO Sapa specializes in the processing of ingredients and input Dak Lak Pharmaceutical and Medical Equipment joint stock company has over
herbal ingredients as well as the researching of GACP for TRAPHACO. At the 35 years of history, specializing in distributing pharmaceutical products and
same time, it serves as the center for developing farming areas for herbal medical equipments in the two provinces Dak Lak and Dak Nong. In addition,
ingredients for TRAPHACO. The TRAPHACO SAPA factory started in 1998 with the company has a sales network of 400 retail points and 20 branches, locating
an extraction assembly line, processing the input herbal ingredients and in many townships and mountainous communes in the region. Dak Lak
with more than 4 ha of land for the test-farming of medicinal herbs. TRAPHACO’s ownership 100 % Pharmaceuticals and Medical Equipments joint stock company is a reputable TRAPHACO’s ownership 58 %
brand to the people of the Central Highland region. In line with the general
trend of development and integration, the company has opened a GPP-certified
TRAPHACO HUNG YEN LIMITED LIABILITIES COMPANY pharmacy chain in the two provinces Dak Lak and Dak Nong to meet the
requirements of the Ministry of Health and the growing demand of customers.
Headquarter: Tan Quang Commune, Van Lam district, Hung Yen Province
Chartered Capital: VND150,000,000,000 THAI NGUYEN PHARMACEUTICALS AND MEDICAL EQUIPMENTS
Traphaco’s ownership: 100%
Headquarter: 477 Luong Ngoc Quyen St., Thai Nguyen Province
Main functions: manufactures medicines, pharmaceutical ingredients
Chartered capital: 4.323.000.000 VND
and inputs.
TRAPHACO’s ownership: 51%
Main functions:
TRAPHACO’s ownership 100 % Thai Nguyen Pharmaceuticals and Medical Equipments Joint Stock Company
engages in the following business activities: productions and trading of
pharmaceuticals, medical equipment and cosmetics, trading of foods,
TRAPHACO HIGH-TECHNOLOGY JOINT STOCK COMPANY (TRAPHACO CNC) functional foods and pharmaceutical ingredients, trading of biomedical
products, testing chemicals
Headquarter: Tan Quang Commune, Van Lam district, Hung Yen Province
TRAPHACO’s ownership 51 %
Chartered Capital: VND94,703,570,000
TRAPHACO’s ownership: 51%
QUANG TRI PHARMACEUTICALS AND MEDICAL EQUIPMENT JOINT STOCK COMPANY
Main functions:
TRAPHACO specializes in processing and manufacturing of TRAPHACO’s Headquarter: 185 Le Duan, Dong Ha Township, Quang Tri Province
products. The factory of TRAPHACO CNC, which is located at Van Lam,
Chartered capital: 2.929.300.000 VND
Hung Yen, was first constructed in October 2004 and put into operation in
January 2007. With over 10,000m2 of facilities and warehouses, the factory is TRAPHACO’s ownership: 43%
comprised of 01 facility producing compressed pills for traditional medicines, Main functions:
01 facility for preliminary processing, 01 tea processing facility, 01 facility TRAPHACO’s ownership 51% Quang Tri Pharmaceuticals and Medical Equipment Joint Stock Company
for tubed medicines and another one for powdered medicines. The Van specializes in manufacturing of traditional medicines, trading of pharmaceuticals,
Lam Factory specializes in traditional medicines and has been certified with food supplements, cosmetics, medical equipment, chemicals and biologicals,
GPs-WHO standards in 2008. It is the first, largest and most technologically- export-import of pharmaceuticals, cosmetics and medical equipment. TRAPHACO’s ownership 43 %
advanced traditional medicine manufacturing facility in Vietnam.

ORGANIZATION CHART OF TRAPHACO JOINT STOCK COMPANY
GENERAL SHAREHOLDERS
ASSEMBLY
BOARD OF
SUBSIDIARIES AND AFFILIATED COMPANIES BOARD OF DIRECTORS SUPERVISORS
GENERAL DIRECTOR
DEPUTY GENERAL DIRECTOR DEPUTY GENERAL DIRECTOR DEPUTY GENERAL DIRECTOR
DIRECTOR OF PRODUCTION DIRECTOR OF SALES
DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT BRANCH BRANCH
RESEARCH EXPORTS, FINANCE

HOANG LIET QUALITY QUALITY HUMAN RISK HO CHI MINH
PLANNING & IMPORTS & MARKETING ADMINISTRATIVE AND SALES CENTRAL
FACTORY ASSURANCE TESTING RESOURCES MANAGEMENT CITY
DEVELOPMENT PROCUREMENTS ACCOUNTING
PRODUCTION
LABORATORIES
Newsletter: AFFILIATED AFFILIATED AFFILIATED
WORKSHOPS BRANCHES BRANCHES BRANCHES
: Direct management
: Supervise

PROFILES OF MEMBERS OF BOARD OF DIRECTORS
Born: 1967 Years with the company: 22 years 3 months
Education: Bachelor Degree in Pharmacy Management experience at the company: 19 years
Born: 1956 Number of years with the company: 35 years
Education: Master of Pharmacy Management experience at the company: 33 years Work profile: January 1998 – December 1999: Deputy Head of
January 1993 – March 1994: Bachelor in Pharmacy, Planning Department, the Pharmaceuticals and Medical
manager of production workshop, Gel workshop, Railway Equipment Company of the Ministry of Transportation.
Work Profile: Pharmaceutical Workshop. January 2000 – December 2006: Head of Planning and
March 1994 – December 1994: Bachelor in Pharmacy, Procurement Department, Traphaco Joint Stock Company.
January 1980 – January 1982: Technical Staff, of the Ministry of Transportation, Chairwoman of the
Railway medicine production factory Company’s Union. manager of production workshop, Tablet workshop, the January 2007 – April 2011: Head of Planning
Pharmaceuticals and Medical Equipment Company of the Department, Traphaco Joint Stock Company.
January 1982 – April 1989: Workshop supervisor, Deputy March 2000 – March 2003: Executive General Ministry of Transportation. April 2011 – September 2014: Member of the Board of Director,
Director of the Railway medicine production factory. Director, Deputy Chairwoman of the Board of January 1996 – December 1997: manager of production Head of Planning Department, Traphaco Joint Stock Company.
May 1989 – October 1993: Deputy Director of the Directors of Traphaco workshop, Fluid workshop, the Pharmaceuticals and Medical
Ms. NGUYEN THI LAN September 2014 – now: Member of the Board of Director,
Railway Pharmaceuticals Company, Chairwoman of April 2003 – April 2011: Chairwoman of the Board Equipment Company of the Ministry of Transportation. Deputy General Director, Traphaco Joint Stock Company.
Member of the BoD, cum Deputy General Director
the Company’s Union. of Directors of Traphaco, General Director of Traphaco
October 1993 – March 2000: Deputy Director of the April 2011 – now: Chairwoman of the Board of Born: 1984
Pharmaceuticals and Medical Equipment Company Directors Education: Bachelor of Economics Bucknell University, USA
Ms. VU THI THUAN
Chairwoman of the Board of Directors
Work Profile: April 2011 - present: Senior Associate at Mekong
2007 – 2009: Analyst at Macquarie Bank, New York Capital, member of the Board of Directors at
Born: 1965 Years with the company: 23 years 7 months Traphaco Joint Stock Company, member of the Board
Office, USA
Degree: Master of Pharmacy Management experience at the company: 17 years 9 months of Directors at Real Estate Investments and Trading
2009 – April 2011: Senior Associate at Mekong
Joint Stock Company (Interco).
Capital
Work Profile: November 200 – March 2004: Head of Sales
March 1990 – August 1992: Staff at the Quality Department, Traphaco Joint Stock Company Mr. LE TUAN
Test Institute March 2004 – January 2005: Member of the Board Member of the Board of Directors
September 1990 – December 1993: Staff at of Directors, Head of Sales Department, Traphaco
Joint Stock Company. Born: 1978
Railway medicine production factory Education: Bachelor of Credit and Finance
January 1994 – April 1997: Staff at the January 2005 – March 2006: Member of the Board
Pharmaceuticals and Medical Equipment Company of Directors, Deputy Director in charge of Sales,
Traphaco Joint Stock Company. Work Profile:
of the Ministry of Transportation.
March 2006 – April 2011: Member of the Board of 2001 – August 2002: Associate in the Finance and 5/2012 - 12/2013: Member of the Board, Deputy General
May 1997 – October 2000: Deputy Department
Directors, Deputy General Director in charge of Sales, Account, Machineries and Equipment General Company Director of JSC Cam Pha Cement
Head of the Quality Assurance Department of the
Pharmaceuticals and Medical Equipment Company Traphaco Joint Stock Company. September 2002 – August 2003: Head of Finance and 01/2014 - present: Deputy Head of Risk Management
of the Ministry of Transportation. April 2011 – present: Vice Chairman of the Board of Mr. TRAN TUC MA Accounting Department, Machino Steel Pipe Production State Capital Investment Corporation (SCIC), Member of
Directors, General Director, Traphaco Joint Stock Company. Vice Chairman of the BoD cum General Director and Trading Enterprise the Board of Directors of Traphaco JSC.
September 2003 – July 2004: Associate
April 2012 – May 2012: Deputy Head of Finance and
Born: 1971 Years with the company: 19 years Accounting SCIC
Education: Master of Business Administration, Management experience at the company: 12 years
Mr. TRAN MANH HUU
Bachelor of Pharmacy
Member of the Board of Directors
Year of birth: 1970

Work Profile: Qualifications: Doctor of Business Administration
1994 – 2000: Sales staff, the Pharmaceuticals and 2002 – 2008: Director of Ho Chi Minh City Branch,
Medical Equipment Company of the Ministry of Traphaco Joint Stock Company Work experience:
Transportation. 2008 – present: Member of the Board of Directors, 1995 - 1997: Head of Business Division, Electrolux 2004 – March 2014: General Director of International
2001 – 2002: Sales manager in the Ho Chi Minh City Director of Ho Chi Minh City Branch, Traphaco Joint Vietnam Consumer Products (ICP) JSC
area, Traphaco Joint Stock Company Stock Company 1998 - 2000: Director of Glaxo Smithkline Category March 2014 – February 2015: General Director of
(GSK) International Consumer Products (ICP) JSC; Board
2000 - 2004: Director of Marketing, Nestle Member Traphaco JSC.
Mr. NONG HUU DUC
Member of the Board of Directors, Director of Mr. PHAN QUOC CONG
Ho Chi Minh Branch Member of the Management Board

PROFILES OF THE SUPERVISORY BOARD AND MANAGEMENT TEAM
Born: 1974 Years with the company: 16 years

Education: Master of Pharmacy, Bachelor of Economics Management experience at the company: 12 years
See the section Profiles of Members of Board of Directors
Work profile:
March 1998 – December 1999: Sales staff, February 2010 – April 2011: Head of Administration
Pharmaceuticals and Medical Equipment Company Department, Traphaco joint stock company
of the Ministry of Transportation April 2011 – present: Head of Supervisory Board,
January 2000 – February 2002: Sales staff, Traphaco Head of Administration Department, Traphaco joint Mr. TRAN TUC MA
joint stock company stock company. Vice Chairman of the Board of Directors
cum General Director
March 2002 – January 2010: Production Manager,
Western medicine workshop and compressed tablet Born: 1962 | Education: Master of Business Years with the company: 31 years 5 months
workshop, Traphaco joint stock company Administration, Bachelor of Pharmacy. Management experience at the company: 14 years 4 months
Ms. PHAM THI THANH DUYEN
Chairwoman of the Board of Supervisors Work Profile:
Department Head, Administration Department January 1982 – April 1983: Staff at Lien Co Hospital – Administration department, Traphaco joint stock company.
subsidiary of Petrolimex company region 1 January 2005 – March 2006: Head of Administration
May 1983 – October 1995: Staff at the Railway medicine product Department, Traphaco joint stock company
Born: 1981 workshop (predecessor of Traphaco Joint Stock Company) March 2006 – March 2010: Member of the Board of Directors,
Education: Bachelor of Corporate Finance, ACCA October 1995 – August 1998:Training at Hanoi University of Pharmacy Head of Administration Department, Traphaco joint stock company
September 1998 – November 2000: Staff in the Quality March 2010 – March 2011: Member of the Board of
Assurance Department, Traphaco joint stock company Directors, Deputy General Director, Head of Administration
Work profile: November 2000 – September 2004: Deputy Head of Sales and HR Departments, Traphaco joint stock company
2002 – 2003: Associate Auditor, Vietnam Accounting, 2008 – April 2011: Senior Financial Consultant at Department, Traphaco joint stock company March 2011 – present: Deputy General Director, Traphaco Ms. HOANG THI RUOC
September 2004 – January 2005: Deputy Head of joint stock company. Deputy General Director
Auditing and Consulting Company Mekong Capital
2003 – 2007: Associate Auditor, then Senior Auditor, April 2011 – present: Senior Associate at Mekong
Born: 1967 Years with the company: 20 years 8 months
Ernst & Young Vietnam Capital, member of the Supervisory Board, Traphaco
Education: Master of Pharmacy, Bachelor of Laws Management experience at the company: 19 years 7 months
2007 – 2008: Deputy Head of Research Department, joint stock company.
FPT Securities Joint Stock Company January 2000 – December 2014: Member of the Board of
Work profile: Directors, Head of Research and Development Department,
October 1990 – May 1994: Assistant lecturer and Traphaco Joint Stock Company
researcher at Hanoi University of Pharmacy January 2005 – March 2006: Member of the Board of
Ms. DO KHANH VAN June 1994 – June 1995: sales staff at the Pharmaceuticals and Directors, Deputy Director, in charge of Research and
Medical Equipment Company of the Ministry of Transportation Development Department, Traphaco Joint Stock Company
Member of the Board of Supervisors
July 1995 – June 1996: Deputy Head of Marketing April 2006 – April 2011: Member of the Board of Directors,
Department, Pharmaceuticals and Medical Equipment Deputy General Director, in charge of Research and
Year of birth: 1978 Company of the Ministry of Transportation Development Department, Traphaco Joint Stock Company
Qualifications: BA in Finance and Accounting July 1999 – December 1999: Head of Research and May 2003 – present: Chairman of Traphaco Sapa limited
Mr. NGUYEN HUY VAN Development Department, Pharmaceuticals and Medical liabilities company (Traphaco Sapa single member limited
Deputy General Director Equipment Company of the Ministry of Transportation liabilities company).
Work experience:
February 2001 – August 2005: Accountant, Hoang March 2014 - present: Officer, Investment Capital
Dao Co., Ltd. Management 3, State Capital Business and
August 2005- October 2009: Chief Accountant, Investment Corporation; Member of the Supervisory
Hoang Dao Investment JSC Board Traphaco JSC. See the section Profiles of Members of Board of Directors
November 2009 – March 2014: Officer, Investment
Capital Management 3, State Capital Business and
Investment Corporation
Ms. NGUYEN THI LUONG THANH Ms. NGUYEN THI LAN

Member of the Supervisory Board Member of the BoD, cum Deputy General Director
LABOR REPORT (AS OF 31 DEC 2014)
TOTAL NUMBER OF EMPLOYEES 742
GENDER EDUCATION LEVEL
5%
51 % 26 % 26 %
49 % 43 %
Male 365 49 % Post graduate 38 5%

Female 376 51 % University degree 192 26 %
High school and vocational training 317 43 %
Primary education, worker 195 26 %
BY DEPARTMENTS
25.5 %
53.6 %
TRAPHACO
TRAPHACO WITH
WITH THE
THE WAY
WAY OF
OF
Sales division
Production division
397
155
53.6 %
20.9 %
GREEN HEALTH
Admin division 189 25.5 % Traphaco’s “the way of green health” strategy has delivered
economic, environmental and social results. Throughout our
journey, Traphaco is resolute with our ultimate goal of providing
“green health to the community”, which is a pervasive and long
20.9 % term strategy that asserts the company’s development philosophy:
for a green environment, for the health of the community and for the
prosperity of the country.
• Appointed: 5 (01 Deputy General Director, 03 Branch Director, 01 Deputy Branch Director
• Recruited: 72 (Sales Department: 66, Admin Department: 06)

- CONVENIENCE
from NATIONWIDE SCALE
REPORT OF OPERATION ACTIVITIES

DURING THE YEAR
Report by the Board of Directors
Report on the business performance results in 2014
Assessment on the activities of the management team in 2014
Report by the Management Team
Directions for business activities in 2015
Report by the Supervisory Board
Notable events in 2014
Prestigious awards and recognitions
REPORT BY THE BOARD OF DIRECTORS
ACTIVITIES OF SUBSIDIARIES AND AFFILIATED COMPANIES

Unit: Billion VND
Target Revenue Profit Compared to 2013 Sales of Traphaco’s products
REPORT ON THE BUSINESS No.
Company 2013 2014 2013 2014 Revenue Net Profit Revenue
% of
revenue
PERFORMANCE RESULTS IN 2014 1 Traphaco 1,414 1,329 136.8 133 94% 97.2%
2 Traphaco CNC 303 299.5 35.2 31.8 99% 90%
3 Traphaco Sapa 28.5 36.5 1.4 1.5 128% 107%
In 2014, Traphaco drastically transformed to build a professional and 4 Daklak 317 362 8.7 9.8 114% 112.6% 32 tỷ 9.6%
modern distribution network and relentlessly pursue the objective 5 Thai Nguyen 73 65.2 0.3 1 89.3% 233% 27 tỷ 44%
6 Quang Tri 49 47 0.6 0.2 96% 33% 11 tỷ 23%
of stabilizing retail prices – Re-affirmed the products’ position as No.1
traditional medicines in Vietnam, enhanced customer relationships, and Source: Unconsolidated financial reports of parent company, subsidiaries and affiliated companies
thoroughly execute on the company’s business philosophy “Integrity, HUMAN RESOURCE MANAGEMENT
win-win, and mutual development”.
2,731
The total number of employees in 2014: 742 (increased
by 6.3%, compared to 2013). Of which: employees with
REPORT ON ACHIEVING THE TARGETS SET BY THE RESOLUTION OF THE ANNUAL SHAREHOLDER
post-graduate degrees 5%, university 26%, high school
and vocational training 43%, primary worker level 26%. employees
Newly recruited: 72 (sales team: 66, office staffs: 06).
MEETING IN 2014
Incomes, as well as bonuses and other benefits for the
Compared to Compared to employees were ensured.
65 COURSES OF TRAINING FOR EMPLOYEES
No. Targets per resolution Actual
target actual 2013
Started to apply KPI in specific action plans for
Total revenue VND1,860 billion 1,650 billion 88.7% 98.2% outputs in order to increase productivity, all products
all departments with the intention to achieve
met with 100% of registered quality standards,
Revenue from manufactured products: 1,280 bil 1,090 bil 85.2% 99.4% management objectives.
1 • reduced cost by 4.1% compared to 2013, contributed
• Revenue from trading: 320 bil 255 bil 80% 91% PRODUCTION AND QUALITY MANAGEMENT to the overall business results of the Company.
• Consolidated revenue from subsidiaries: 260 bil 305 bil 117% 104% Maintained the implementation of the procedures
The factories complied with GMP’s guidelines.
within quality control system by GPs (GMP WHO, GSP,
2 Net Profit After Tax: 162 bil 146 bil 90% 98%
Effectively utilized factories, equipment, manpower, GLP, GDP) standards, ISO standards and 5S Kaizen
3 Employees’ incomes rise by 10%, compared to 2013. Employees’ incomes were ensured. raw materials and energy, while ensured quality and toolkit.
4 Open two more distribution branches. Opened two more distribution branches: Tien Giang, Phu Tho.
Total investments in 2014 : VND 60 bil / 70 bil target, including

the following items:
Total investments deployed for Vietnam • Compensation for crops; ground levelling, fencing for phase 2;
5
Pharmaceutical Factory: VND70 billion. • Hired architecture consultants to design the master plan for the
factory and appraise the design.
• ut down the deposit for the eye drop automatic production line.
Increase ownership at Thai Nguyen

Increased ownership at Thai Nguyen Pharmaceuticals and
6 Pharmaceuticals and Medical Equipment
Medical Equipment Joint Stock Company to 51%.
Joint Stock Company to at least 51%.
Complete payment of compensation for the Board Executed the Resolution of the Annual Shareholder Meeting
7
of Directors and the Supervisory Board. in 2014.
Source: Audited Consolidated Financial Reports.
36 ANNUAL REPORT 2014 REPORT OF OPERATION ACTIVITIES DURING THE YEAR 37

REPORT BY THE BOARD OF DIRECTORS (continued)
REPORT ON THE BUSINESS

PERFORMANCE RESULTS IN 2014 (continued)
INVESTMENT ACTIVITIES – FINANCE MANAGEMENT R&D ACTIVITIES AND LAUNCHING
OF NEW PRODUCTS
POLYSCIAS
Investment activities Increased
Increased chartered capital
At Traphaco CNC: Increased chartered capital from

63,135,720,000 to 94,703,570,000 from retained profit.
ownership
from 49% to 51% R&D activities
Researched and developed 45 new products and

ideas, renovated 14 products.
FRUTICOSA
AT THAI NGUYEN PHARMACEUTICALS

AND MEDICAL EQUIPMENT JOINT STOCK GreenPlan Project: Building a sustainable model CONVOLVU- GACP ARTICHOKE
At Traphaco Hung Yen Limited Liabilities Company: for developing pharmaceutical ingredient sources. LACEAE WHO
COMPANY
Increased chartered capital from VND20 billion to In June 2014, the Company was granted the GACP –
VND150 billion. WHO (Good Agricultural Collection Practices by WHO)
Increased ownership at Thai Nguyen Pharmaceuticals and

Medical Equipment Joint Stock Company from 49% to 51%. 104% certification for the farming areas of 4 important
medicinal plants (Artichoke, Polyscias fruticosa,
Convolvulaceae and Molluginaceae) by the Selection
Committee within the Ministry of Health.
MOLLUGINA-
CEAE
Deployed capital to build the factory within the project

TOTAL CASH COLLECTION
Traphaco Hung Yen Limited Liabilities Company: State-level project: Successfully defended the project “Fine-
FROM CUSTOMERS AT PARENT tune the production process for the soft capsule Cebraton”.
Completed land handover for phase 2 and completed COMPANY REACHED 104.1% OF
ground leveling and fencing for phase 2. REVENUE (1,400 BIL/1,345 BIL) Developing new products
Approved the design and budget for the construction Built the marketing plan to launch 04 new products to
of Vietnam Pharmaceutical Factory. Reviewed and the market. Revenue from new products reached 88
evaluated raising the total investment size for the Finance Management billion/79 billion target, or 11% (accounting for 8.1% of
project from VND300 bil to VND420 bil. revenue from manufactured products).
Changing the OTC sales policy in 2014 in payment
Acquired the automatic equipment for the eye drop terms (from allowing customers to buy on credit to
production line . collect payments on delivery for retail customers,
collect payments within one month for wholesalers)
Made the investment to build the project Traphaco helped enhance the effectiveness of working capital
Sapa Single Member Limited Liabilities Company utilization, reduced risks in payments.
Implemented the project “Pharmaceutical Ingredient Effectively managed cash flow, put the idle cash in
Processing and extracting factory in Lao Cai” in an area effective use through making short term investments
of 7,666m2, the factory is expected to be operational (short-terms deposits to reputable banks), which
in 4th quarter 2015. Total investment for the project: generated income from financial activities. In 2014,
22 billion. In 2014, we received the land use right and the total cash collection from customers at the parent
design solution for the factory. Company reached 104.1% revenue (1,400 bil/1,345 bil),
receivable days declined from 54 days in 2013 to 44
Improved the distribution network days in 2014.
Acquired land and office buildings for branches in Tien Enhance risk management activities, proactively
Giang, Bac Giang and Phu Tho. collect outstanding receivables: Coordinate with TNS
to monitor the compliance to the new sales policy;
Equipped sales team staffs with tablets examined and managed payments at provinces; Paid
discounts and commissions; Provided legal support in
Implemented the sale management software DMS for signing the contracts with customers.
the whole distribution network.

Building, promoting and protecting the brand
REPORT ON THE BUSINESS Maintained the title: “The No.1 pharmaceutical brand in
PERFORMANCE RESULTS IN 2014 (continued) Vietnam”. In 2014, Traphaco received 18 recognitions and awards
for the Company’s corporate brand, product brands and business leaders.
DISTRIBUTION NETWORK MANAGEMENT
Traphaco’s brand communication accompanied with the program “the Way of Vietnamese Medicines”.
The distribution channel The program contributed to enhance to credibility and further confirmed Traphaco’s brand in the
pharmaceutical industry as well as in the eyes of regulating authorities. Built the image of Traphaco’s
Given the effective operation of the established 16 branches, has succeeded in transforming and establishing a brand – A representative brand of Vietnamese medicines for Vietnamese.
the Company opened 02 more branches Tien Giang and modern distribution network, with the use of high
Phu Tho. technology in distribution network management.
Accordingly, Traphaco has set up direct access and
Notable awards in 2014:
Maintained the sales channel OTC and ETC. There was timely customer care to over 18,000 pharmacies
a drastic change in the OTC channel: reduced the nationwide. THE TITLE “THE STAR OF VIETNAMESE MEDICINE”
proportion of revenue to wholesalers to below 20%, GRANTED BY THE MINISTRY OF HEALTH: Traphaco
developed the retail customer base. We organized trips for groups of customers to visit the Traphaco was proud to be granted 06 titles “The Star of
Company’s factory so that the customers can gain a Vietnamese Medicines” by the Ministry of Health (01 title for
Customer care activities better understanding of the product quality; held the Traphaco brand and 05 titles for its products: Hoat Huyet
customer conference to share about the intention of
Implemented the new OTC sales policy from Duong Nao, Boganic, Didicera, Duong cot hoan, Ampelop).
the new sales policy and develop a stronger bond
01/01/2014: After a year of implementation, Traphaco between customers and the company.
Representative company in the pharmaceutical sector to

be recognized as THE NATIONAL BRAND – VIETNAM
VALUE 2014 (the Trade promotion program hosted by the
Government of Vietnam).
Was recognized by Forbes Magazine as TOP 50 LISTED

COMPANIES IN VIETNAM.
Proud winner of the representative “GREEN BRAND” Award

MARKETSHARE, BRAND AND CORPORATE CULTURE by the Ministry of Planning and Investments & Economic
Review and Forecast Magazine.
Market share
According to IMS report by end of 4th quarter 2014, Traphaco had 2 products, which were No.1 in their
Traphaco had a 1.2% market share of the overall respective therapy categories. In which, Hoat Huyet TOP 20 best annual reports
pharmaceutical market in Vietnam and was ranked 14 Duong Nao was No. 1 in the nervous system category;
among the top 20 pharmaceutical companies in term Boganic was No. 1 among liver function medicines.
of revenue (Leading Corporation). In OTC segment, Both Hoat Huyet Duong Nao and Boganic were Directly promoted the brand to consumers through healthcare consulting activities for the senior,
Traphaco’s market share was 3.3% and the company is among the top 20 bestselling OTC products in the women and professional and vocation organizations. In 2014, the company organized 363 seminars
the 3rd largest in term of revenue. market (Leading OTC product). – conferences nationwide with different healthcare topics.

Corporate culture INVESTOR RELATION
2014 was the year when the company built the Strictly complied with required procedures of
corporate culture based on the customer-centric government authorities: State Securities Commission, Ho
approach. The company’s party unit initiated the Chi Minh Stock Exchange, Vietnam Securities Depository
contest “For a customer-centric Traphaco” to bolster to accommodate shareholders register their shares for
the cooperation between different departments with transactions in the stock exchange in a timely manner.
the intention to satisfy the needs of customers, nurture
customer relationships and maximize sales. The company proactively and openly met with many
institutional investors, provided sufficient information
To celebrate the Company’s 42nd anniversary, Traphaco to welcome the interest of investors in Traphaco;
organized many events to strengthen its corporate disclosed information accurately, authentically and in
culture. Particularly, the contest The Voice of Traphaco a timely manner, contributing to building TRA into a
2014 attracted performances from over 300 employees. very reputable stock in the exchange. Actively engaged
in dialogues at forums, investment newspapers and
Promoted the activities of political and social investor conferences.
organizations within the company. Ensured incomes
and jobs for the employees. The entire staffs are united
with the Leadership to overcome hardships and
achieve objectives.
ASSESSMENT ON THE ACTIVITIES OF

THE MANAGEMENT TEAM IN 2014
The positive results achieved in 2014
Courageously transformed the sales policy to be more customer-centric, with more added value to
customers, hence gained stronger support from customers.
Drastically strengthened the distribution network: more professionally organized sales team, thorough
communication to sales staffs about customer approach, about the new sales policy, and enhanced
monitoring and more effective management of the sales team.
Significantly increased revenue from OTC market, which grew by 12% compared to 2013, was a major
achievement in a difficult business environment where all leading pharmaceutical companies struggled.
Successfully integrated the ISO – GPs quality control systems with KPI implementation.
04 main pharmaceutical ingredients were granted GACP-WHO accreditations.
05 products and Traphaco brand were recognized as “the Stars of Vietnamese medicines”.
Traphaco was among the notable pharmaceutical companies to receive the National Brand – Vietnam
Value 2014 Award.
Unfulfilled objectives
Did not achieved the revenue and net profit targets.
The project to build the Vietnam Pharmaceutical Factory was behind schedule.

REPORT BY THE MANAGEMENT TEAM
CUSTOMERS CENTRICITY BUSINESS RESULTS

“Generate mutual benefits – enhance satisfaction”
NOTABLE RESULTS
IN 2014, TRAPHACO HAD THE ADVANTAGES FROM THE SUCCESS OF
PREVIOUS CONSECUTIVE YEARS, IN TERMS OF BRANDING, FINANCE, REVENUE AND GROWTH OF
LISTED PHARMACEUTICAL COMPANIES IN 2014
MANAGEMENT, PRODUCTION DEVELOPMENT AND THE TRUST OF THE 2014 WAS THE FIRST IN
Unit: billion dong Net revenue Growth 2014/2013
MANY YEARS THAT THE
CONSUMERS TOWARDS THE COMPANY’S PRODUCTS. IN ORDER TO CREATE A
COMPANY DID NOT GROW IN 4,500 20 %
FOUNDATION FOR SUSTAINABLE DEVELOPMENT, THE EXECUTIVE BOARD HAS
TERMS OF REVENUE AND NET 4,000
CHOSEN 2014 AS THE YEAR OF “CUSTOMERS CENTRICITY”.
PROFIT. HOWEVER, THE FINANCIAL
3,500
RESULTS IN 2014 HIGHLIGHTED
In 2014, Traphaco had the advantages from the a lot of expenses and resources, the market needs 10.9 % 10.4 %
NOTABLE ACHIEVEMENTS IN 3,000 10 %
success of previous consecutive years, in terms time to adjust to the new policy, may affect revenue 8.6 %
of branding, finance, management, production and profitability of the Company. Internally, the CASH FLOW MANAGEMENT AND 2,500 6.5 %
development and the trust of the consumers Company has conducted deployment programs REVENUE FROM NEW PRODUCTS,
towards the company’s products. In order to to strengthen cooperation between departments 4.0 %
WHICH CONFIRMED THAT THE 2,000 5.2 %
create a foundation for sustainable development, to increase operational efficiency, reduce
the executive board has chosen 2014 as the year management costs and production costs and NEW OTC SALES POLICY WAS 1,500 0%
of “customers centricity”. According to that, on the prioritize investments for the distribution system.
OTC market, Traphaco will make a revolutionary
ABSOLUTELY IN THE RIGHT
1,000
change regarding the sales approach: switching Employed flexibility in managing the enterprise, DIRECTION AND WITH IT, THE -2.4 %
from focusing on wholesale customers to taking combined unanimous solidarity with the spirit COMPANY CAN BE CONFIDENT TO 500
care of retail customers; from products promotion of determination to contribute to the success of
to push products to the market to price stability by the Revolution in sales policy, helping to make SET HIGHER GROWTH TARGETS 0 -10 %
limiting and controlling supply, increase benefits Traphaco a pharmaceutical manufacturer with the STARTING IN 2015. DHG TRA DMC IMP DHT DCL OPC
for pharmacies; from salesman performing “Sales strongest and most modern distribution system in
representation and taking orders” to “Products Vietnam. Results from: “ Generate mutual benefits
introduction and customers persuasion”. – enhance satisfaction” have increased the value
of Traphaco and created a solid foundation for
We were aware that the Revolution in changing Traphaco to have breakthroughs in revenue and NET PROFIT AND GROWTH OF TRAPHACO’S EBITDA OVER THE YEARS
the sales policy in the early stages might consume profit growth in the coming years. LISTED PHARMACEUTICAL COMPANIES IN 2014
Unit: billion dong
Unit: billion dong 2014 Net profit Growth 2014/2013
IMPROVEMENTS IN ORGANIZATION STRUCTURE AND MANAGEMENT POLICY 300
600 50 % 273.5
In 2014, Traphaco set out short-term targets, branches, implement the new sales policy to 41.1 % 250 240.7
500 40 % 228.6
specifically: by 2017, the company will have a new replace the outdated previous policy; implement 200
27.4 % 30 %
factory for Western medicines, a strong distribution the new management tool to evaluate 400 23.3 %
16.8 % 20 % 150 157.7
network both in depth and coverage nationwide; performance through KPIs; develop action plans 300
a strong and safe financial standing, a completed with a “Customer-centric” approach, apply high 10 %
200
100
green value chain, GACP-WHO certified farming technology in distribution network management, -2.2 % 0%
areas of pharmaceutical ingredients (for 04 install the DMS software, tablets, hire the trade -7.1 % 50
100 -10.0 % -10 %
recognized pharmaceutical ingredients). auditing firm, TNS, with the goal to stabilize 0
0 -20 %
retail prices, prevent horizontal channel conflicts,
Based on those targets, Traphaco conducted ensure financial safety, expand the retail customer DHG TRA DMC IMP OPC DCL DHT 2011 2012 2013 2014
several renovations in terms of organization base and manage customers effectively, better
structure and management policy in order to monitor of sale staffs, enhanced risk management,
achieve the following objectives: expand and more proactive collection of receivables, cash
develop subsidiaries & affiliated companies, collection on delivery...

REPORT BY THE MANAGEMENT TEAM (continued)
REVENUE Revenue breakdown Traditional medicines
Revenue generating business activities are included in 3 segments: In term of value, revenue from traditional medicines declined by 3.2%
REVENUE BREAKDOWN compared to 2013, mainly because of 2 reasons:
BY PRODUCTS
In-house manufactured products (incl. Trading products (Licensed Consolidated revenue from Ending the old sales policy, there was a large amount of unsold
traditional and western medicines), imports, ingredients and subsidiaries.
100 01 products from quarter 4/2013, piled up at customer level;
sold through two channels: hospitals raw materials, exclusive 18.6 % 18.1 %
and treatment facilities (ETC) and distributions). Scarcity of ingredients led to reduced outputs of a number
80
retail pharmacies (OTC). of key products. Contribution of revenue from Traditional
15.7 % 16.7 % 02 medicines in 2014 was only 51% of total revenue and 77% of
60 revenue from manufactured products.
Consolidated revenue in 2014 only achieved 89% of target and declined 1.8% compared to 2013, primarily because 15.1 % 11.4 %
revenue from in-house products only achieved 85% of target. Although revenue from traditional medicines declined, Traphaco’s two flagship
40 products, Hoat Huyet Duong Nao product series and Boganic, still maintained
Revenue was behind target due to 3 reasons, subjective and objective: market share. According to IMS reports, these two products were still among
the Top 20 bestselling OTC products (Leading OTC Product) – Boganic was
50.6 % 53.8 % ranked 5 and Hoat huyet duong nao was ranked 9. The ranking demonstrated
The new sales policy was first implemented in 1st quarter 2014 and required time for the market 20
that Traphaco’s product quality and brand credibility have established their
to adapt. On the other hand, due to the old sales policy, there was a large amount of unsold
01 products piled up at customer level from 4th quarter 2013, as such revenue from manufactured
positions in the medicine consumption habit of Vietnamese.
products was very low during quarter 1/2014, only 173 billion, or 67% for the same period in 2013. 0
Western medicines
2014 2013
Revenue from traditional medicines In 2014, revenue from western medicines achieved a growth rate of 28.6%
Due to the new decrees and guidelines regarding the tender process at hospitals, which compared to 2013 because Traphaco implemented policies to promote
Revenue from western medicines
give preferential treatment to inexpensive medicines. Therefore, for branded products Western medicines which were competitive and of high profit margin (such
02 of high quality and credibility such as Traphaco’s, it is very difficult to win the tenders. Revenue from imports and trading as Methorphan in syrup and film-coated forms;…). Revenue from Western
In 2014, ETC revenue only reached 296 billion, down by 90 billion compared to 2013. Consolidated revenue from subsidiaries medicines contributed 15% of total revenue and 23% of revenue from
manufactured products.
Imports, trading and retail activities
03
Revenue from trading activities reached 255 billion, or 80% of target, which led to a 65
billion downfall in total net revenue. 255 BILLION VND Revenue from imports, trading and retail activities reached 255bil, or 80% of
target and down 9% compared 2013, primarily due to the poor performance
of trading partners, trading partners for imports cut down on orders because
REVENUE FROM IMPORTS, they did not win tenders for hospital procurement contracts; the selling
TRADING AND RETAIL of ingredients and excipients in domestic market faced many difficulties
Consolidated as partners switched to using inputs, which were not compatible with the
For Traphaco, although the revenue target was not
achieved, it was still a major success as the main
objectives of the new policy were achieved: support
revenue from
subsidiaries 305 BILLION
VND
products imported by the company and several previous partners decided to
import themselves.
Consolidated revenue from subsidiaries

from customers, stabilized retail prices, expanded
retail customer base and better managed customer Revenue from
relationships, effective management of sales staffs
and ensured financial safety. In addition, OTC revenue
still grew by 5% compared to 2013. Revenue from
new products
reached 88 BILLION VND
Consolidated revenue from subsidiaries maintained at 305 billion in 2014,
implying stable business activities at subsidiaries (particularly Dak Lak).
Revenue from new products

manufactured products in the 4th quarter, when the
ACCOUNTED FOR 8.2% OF
new sales policy had been thoroughly and consistently
REVENUE FROM MANUFACTURED In 2014, Traphaco launched 2 new products. Unlike in the previous years, the
implemented with discipline, grew very strongly and
PRODUCTS, REACHED 111.4% OF strategy to launch new products in 2014 is more focused but the achieved
was maintained at a very stable level of about 108
TARGET OF 79 BILLION. result was more impressive. Revenue from new products reached 88 billion,
billion per month.
or 8.2% of revenue from manufactured products, or 111.4% of target.

The plan to launch new products in 2014 was implemented alongside the
REVENUE BREAKDOWN In 2014, the Company’s selling
new sales policy with much progress, ahead of target by 11.4%; high coverage
BY REGIONS expense was 332 billion,
ratio, ability to track customers who order new products, bigger role for sales
accounting for 20.1% of revenue. SELLING EXPENSE RATIOS
reps in distributing products since they are now selling directly to pharmacies,
100 Selling expense ratio therefore
consistent brand messages were conveyed from the Company to sales staffs, Selling expense/Net revenue General and Administrative expense/Net revenue
showed improvement from 2013.
then to pharmacist nationwide. 13.3 % 13.5 % 13.5 %
Although in 2014, the company 25.0 %
80 implemented the new sales
Revenue breakdown by regions
23.1 % 23.2 % 23.2 % policy, which incurred additional 20.3% 20.1%
20.0 % 19.0 %
expenses, but selling expense
The revenue structure by regions did not change much compared to 2013 17.1 %
60 ratio was still maintained at a
although the Northern and Central regions had negative growths while the 15.0 %
sustainable level. Over the coming 13.7 %
Southern region still grew by 10%. The North still accounted for the largest
years, Traphaco projected to
portion of revenue, 60.3% of total revenue, the Central accounted for 13.5% 10.0 %
40 maintain the selling expense ratio
of total revenue while the South grew stronger than the national average and 7.9 % 8.1 % 7.8 %
at the above level, to be in line 6.8 %
currently contributed 26.2% of total revenue. The target of bringing revenue 63.6 % 63.3 % 63.3 % 5.5 %
with its strategy to commercialize 5.0 %
in the South to contribute 40% of total revenue has not been achieved.
20 differentiated products and sell
This is a mission as well as a growth opportunity for Traphaco. The senior
directly to retailers. 0.0 %
leadership of Traphaco prioritizes allocating the resources to the sales team
and developing the Southern market. 2010 2011 2012 2013 2014
Administrative expense was at
0
128 billion and 7.8% of revenue.
Revenue breakdown by sales channels 2012 2013 2014
North Central South The administrative expense ratio in 2014 was at the lowest Based on the above revenue and expense structures,
In 2014, over 77% of the revenue from manufactured products of Traphaco
level in 3 years. In order to achieve such a significant profit before tax came at 211 billion. Net profit after tax
came from OTC market. Total OTC revenue in 2014 increased by 12%
improve, the Company demonstrated improved expense reached 146 billion, or 90% of target, and declined by 2%
compared to 2013. OTC revenue from all regions increased by 4-9%. ETC
management and cost saving capabilities at different levels. compared to 2013.
revenue, meanwhile, declined by 11% compared to 2013. The OTC market REVENUE
will still the Traphaco’s main market in the coming years. BY SALES CHANNELS
ASSESSMENTS OF FINANCIAL STRUCTURE AND RESULTS FROM FINANCIAL ACTIVITIES
EXPENSES AND PROFIT 100
Financial Structure
The Company’s gross profit came to 714 billion, or 43.3% of revenue, which
is the highest gross profit margin to date. That result is an outcome of 80 34.6 % 23 % The company’s total resources as of 31 December 2014 was also the highest level over the past 4 years. As such,
maintaining an appropriate product portfolio and focusing on selling high- amounted to VND1,132 billion, of which total equity with the new OTC sales policy in 2014, which requires
margins products. The production coordination between Traphaco and was VND787 billion and total liabilities reached almost immediate payment after sales, payment and receivable
Traphaco CNC is getting more and more effective and resulting in more 60 VND261 billion. Liabilities as percentage of total resources collection activities were very effective, the financial safety
efficient utilization of the modern product lines at the two factories and the ratio was 23% and total equity accounted for 70%. As was ensured. The Company was able to provide financial
economies of scale of the whole enterprise. such, there was significant change to Traphaco’s balance support to its subsidiaries and affiliated companies, at the
40 sheet compared to 2013 as the Company utilized the same time accumulated VND190 billion in cash for major
HISTORICAL GROSS PROFIT MARGINS 65.4 % 77 %
cash on hand and from business activities to continue investment activities in 2015 and contributed positively
reducing the debt level. to incomes from financial activities.
46.0 % 20
44.0 %
On the asset side, short-term assets was 803 billion, long-
42.0 %
40.0 %
term asset was over 329 billion. There was little change to
38.0 %
36.0 %
34.0 %
32.0 %
30.0 %
OTC
0
2013
ETC
2014
the balance between short term and long term assets in
2014, compared to 2013
Operational Efficiency
1.132 BILLION VND
28.0 % THE COMPANY’S TOTAL

26.0 % The company’s operational efficiency continued to be RESOURCES AS OF 31 DECEMBER
24.0 % improved significantly, especially in receivable turnover. 2014 , OF WHICH TOTAL EQUITY
22.0 % Receivable turnover in 2014 was 8.3 times, compared
20.0 %
WAS VND787 BILLION .
to 6.8 times in 2013. Meanwhile, inventory turnover was
2010 2011 2012 2013 2014 maintained at a stable level of 3.5 times as in 2013, which

TRAPHACO’S WORKING CAPITAL INDICATORS OVER THE YEARS Unit: times

TRAPHACO’S LIQUIDITY RATIOS OVER THE YEARS
Inventory turnover Receivable turnover Payable turnover Liquidity Ratios
Unit: times Current Ratio Quick Ratio
10.0 Starting from a strong
9.0 8.8
In comparison to the 8.3 3.50 financial position by end of
8.0
5 largest listed pharmaceutical 7.2 3.08 2013 and thanks to effective
7.0 3.00
companies, Traphaco was 7.7 working capital management
6.0 5.6 6.8
among the top 2 with the best 5.2
2.50 throughout 2014, Traphaco’s
5.0 2.32
ratios. Traphaco was only behind 5.4 liquidity ratios as of 31
4.0 3.9 2.07
DMC in inventory turnover. 4.2 2.00 December 2014 were at the
3.0 1.67
Traphaco’s receivable turnover 2.0
3.6 3.5 3.5 1.58 2.06 highest level in 5 years, which
2.7 1.50 demonstrated a strong ability
was second to OPC. Meanwhile, 1.0
2.6
Traphaco and OPC had the best 0.53 to meet its short term debt
0.0 1.00 1.28
payable turnover among peers. obligations, ensuring financial
2010 2011 2012 2013 2014 0.50 0.95 safety and flexibility in paying
0.79
customers.
WORKING CAPITAL INDICATORS OF COMPARABLE LISTED PHARMACEUTICAL COMPANIES 0.00
Unit: days Inventory days Receivable days Payable days 2010 2011 2012 2013 2014
300.0
250.0 241.7
19.8 %
RETURN ON EQUITY (ROE)
200.0 187.1
157.5
150.0 141.2
100.0
50.0
59.5
105.5
74.9 75.9
65.4
38.8
112.7
103.0
54.8
PROFITABILITY RATIOS OF COMPARABLE LISTED PHARMACEUTICAL COMPANIES
ROE ROA
13.2 %
54.2 55.3 52.2
0.0 32.3 35.4 RETURN ON ASSETS (ROA)
30.0 %
DHG DMC IMP OPC DCL TRA
25.0 % 24.8 % Profitability ratios
Overall, Traphaco demonstrated
superior working management CASH CONVERSION CYCLES OF COMPARABLE LISTED PHARMACEUTICAL COMPANIES 20.0 % 19.8 % 19.6 %
17.5 % Return on Equity (ROE) was
capability through its Unit: days at 19.8% and Return on
outperforming cash conversion 15.0 % 13.0 %
11.2 % Assets (ROA) was 13.2% in
cycle. This indicator shows how 16.2 % 2014. Based on these two
300.0 10.0 % 13.7 %
long a manufacturer takes to 13.2 % 12.3 % profitability metrics, Traphaco
convert cash into materials, 250.0 248.1 5.0 % 9.0 % was still among the top 3 listed
products and back to cash. 218.6 6.4 % pharmaceutical companies.
The lower the cash conversion 200.0 197.6 0.0 %
cycle means higher operational 162.8
150.0
DHG TRA DMC IMP OPC DCL
efficiency. Traphaco’s cash 125.0
conversion cycle was the lowest 105.6
100.0
among industry peers.
50.0
0.0
DHG DMC IMP OPC DCL TRA

DIRECTIONS FOR BUSINESS ACTIVITIES IN 2015
GENERAL CONDITIONS CTION FOR BUSINESS ACTIVITIES IN 2015
Entering 2015, the global and domestic economy is forecasted to see certain pick-ups Targets
compared to 2014, but there are still latent risks. Our local economy continues to experience
greater integration and face fiercer competition. Given the results achieved in implementing the new sales policy during 2014,
successful rolling out the performance evaluation system based on KPIs, while
Given the higher birth rate and population aging over the recent years, while healthcare and
expenditure consumption per capita are still low, and access to healthcare services is still
constrained, therefore, the pharmaceutical and healthcare sectors in Vietnam are expected to
continuously building and developing the corporate culture “Cooperation,
Sharing, Commitment and Honoring commitment”, the Company targets
revenue growth of 13%, of which growth in revenue from manufactured
1,860 BILLION VND
maintain similar growth rates as in the recent years. product of 22%, net profit growth of 30% and strives toward achieving the
milestones within the 5 year strategy (2011 – 2015). TOTAL REVENUE: GROW BY 13%
For Traphaco, there are the favorable conditions and challenges as follows: COMPARED TO 2014
Specific targets
Favorable conditions
Total revenue: VND1,860 billion (excluding VAT), growth of 13% compared
Traphaco is the No. 1 pharmaceutical brand in Vietnam, the company has large
manufacturing scale and distribution capabilities as well as strong financial standing.
to 2014, in which:
» Revenue from in-house manufactured products and exclusive distribution:

1,330 BILLION VND
Within the company’s value chain, Traphaco has been able to secure a stable and high VND1,330 billion, increase 22% compared to 2014. REVENUE FROM MANUFACTURED
quality raw material supply for its flagship products, at the same time fully leveraged its PRODUCTS AND EXCLUSIVE
nationwide distribution network » Revenue from imports, trading and retail: 230 billion. DISTRIBUTION: GROW BY 22%
COMPARED TO 2014
Many of the company’s products are consumers’ preferred choices. » Consolidated revenue from subsidiaries: 300 billion.
Traphaco possesses an energetic and high quality team, with enhanced management Net profit after tax: 190 billion, increase by 30% compared to 2014.
capability and strong determination to achieve the targets for 2015.
Challenges
Average employee’s income: increase by at least 10%, ensure full
employment for the employees.
190 BILLION VND
NET PROFIT AFTER TAX: GROW

The procurement tender processes at treatment facilities pose great challenges as price Develop corporate culture: “Cooperation, Sharing, Commitment and
BY 30% COMPARED TO 2014
competitiveness is the most important and prerequisite factor while ensuring product Honoring Commitment”
quality requires higher cost.
Successfully roll out the KPI system in the whole Company.
Set up a bonus and compensation scheme for employees to motivate contribution to the
enterprise, at the same time in harmony with the interests of the shareholders Action plan to achieving the targets
Since revenue did not grow in 2014, the progress to achieving the 2011-2015 milestones Human resource management
encounters great difficulties.
Evaluate the quality of the human resource,
allocate suitable tasks, provide training and
develop the team, improve the quality
and effectiveness of performances, recruit
qualified professionals to meet the growing
demand of the business activities.
Carry out the compensation and benefit

policy for the employees in a full, timely
and suitable manner; effectively use the
compensation and welfare budget to
motivate employees.

DIRECTION FOR BUSINESS ACTIVITIES IN 2015 (continued)
Production management and quality control
Ensure production output target;
Maintain full compliance activities to quality

management systems such as GPs (GMP WHO, GSP,
TOP 50
GLP, GDP), ISO 9001:2008 standards, ISO 14001:2004, 5S
KAIZEN and KPI.
Finished products meet with 100% of registered quality

standards, reduce costs of products
Investment activities - Finance management
Investment activities TOP 50 LEADING BRAND

IN VIETNAM » Develop solutions to increase revenue in ETC market. stay true to the business philosophy “Integrity, win-
» Proactively execute the approved modules of the Van win and mutual development”.
Lam – Hung Yen factory by deadlines. » Train and develop a professional sales team to be
suitable to the new sales policy and enhance the Brand and corporate development
» Complete the infrastructure for the distribution channel effectiveness of sales management.
in order to achieve the 5 year strategic objectives. Brand
Build upon the existing farming areas and apply for the Customer care activities
» Improve the equipment to ensure normal production GACP – WHO certification for another medicinal plants. » Maintain the title “No.1 pharmaceutical brand in
at Hoang Liet factory. » Improve the quality of the customers and increase Vietnam”. Be among the top leading brand in Vietnam.
Research and develop new products for the new the number of customers to over 20,000 pharmacies.
Finance management factory so that the company can start production as Apply thoroughly the OTC sales policy across the » Enhance the IR activities to increase the value of TRA
soon as the production line is installed. whole system, persistent in stabilizing retail prices, stock.
» Continue to leverage on the superior payment scheme avoid channel conflict, ensure financial safety, and
of the 2015 OTC sales policy to further enhance the Develop policies and marketing strategy to promote
effectiveness of working capital management. the “opportunity” products to achieve 350 billion (incl.
VAT) of revenue from these products.
» Ensure timely and sufficient capital disbursement for the CORPORATE CULTURE
project to build the Pharmaceutical Factory in Vietnam. Further expand the distribution network
» Manage and save costs in administrative activities. Distribution network 2015 IS SELECTED TO“DEVELOP THE CORPORATE CULTURE”
R&D activities and launching of new products to » Maintain the effective operation of the existing 18 ON THE FOUNDATION: “COOPERATION AT WORK;
market branches. Open 04 new branches. Continue to improve the
infrastructure and necessary equipment, train and develop SHARING OF BENEFITS; COMMITMENT TO FULFILLING
Roll out and put into production 2 new products. a professional sales team to be suitable to the new sales
policy and enhance the effectiveness of sales management. THE OBJECTIVES; HONORING ALL COMMITMENTS”.
Continue with the strategy The Way of Green Health
(green raw materials, green/environment-friendly » For subsidiaries and affiliated companies: strengthen
technology, green products, green services as the basis management activities to maximize the distribution
for sustainable development, which contributes to capabilities in the local areas, hence promote the
promote green growth). selling of Traphaco’s products in those areas.

EPORT BY THE SUPERVISORY BOARD
In accordance to:
Enterprise Law No. 60/2005/QH11, approved by the Reviewed the consolidated financial statements, the
National Assembly of the Socialist Republic of Vietnam quarterly and 2014 financial reports of the parent
on 29 November 2005; company after they have been audited by Deloitte
Limited Liabilities Company. Based on the audited
Charter of TRAPHACO joint stock company; reports, we formed our independent opinions on the
financial statements.
Governance guidelines of TRAPHACO joint stock
company; Specifically:
Resolutions of TRAPHACO’s Annual Shareholders » Reviewed the legality, order and procedures to circulate
Meeting, held on 28 March 2014; the resolutions and decisions by the Board of Directors,
Board of Management based on Enterprise laws and
Guidelines and Working Agenda of the Supervisory the Company’s charter;
Board in 2014.
» Supervised the fulfillment of the 2014 Annual
Shareholder Meeting’s resolutions with regard to
The Supervisory Board would like to report our 2013
dividend payments, completing investment projects
activities as follows:
and achieving of business targets.
ACTIVITIES OF THE SUPERVISORY BOARD » Examined the compliance of the company in its activities
to Enterprise laws, decrees, guidelines and stipulations
In 2014, the Supervisory Board held regular meetings for joint stock companies as well as pharmaceutical
per guidelines and participated in all Traphaco’s companies.
Board of Director meetings.
» Examined the compliance to the company’s guidelines in compliance with Enterprise laws and the Company’s Mr. Phan Quoc Cong.
and charter in normal business activities. charter:
Examined and monitored business operation
and management, execution of the 2014 Annual » Examined the compliance to guidelines relating to » The General Director decided to hire TNS to act as an
Shareholder Meeting’s resolutions, the fulfillments of information disclosure activities of the company based » The Board of Directors passed the decisions to appoint independent trade auditor to audit the compliance
2014 business objectives by the Board of Directors on existing laws. senior positions: Appointed Ms. Nguyen Thi Lan to to the new sales policy, implemented the distribution
and the Board of Management. We examined the the Deputy General Director position, appointed the management software DMS after having reported to
» Reviewed the implementation of the new sales policy
reasonableness and legality of all business operations Chairman of the Traphaco Hung Yen Single Member and sought approval from the Board of Directors;
by the Company and at the Ho Chi Minh City branch.
of the company in the past year, reviewed the report Limited Liabilities Company, appointed the Branch
on business performance by the Board of Directors » Monitored the compliance to accounting rules, Directors at Can Tho, Khanh Hoa, Phu Tho and Tien » The Board of Management passed all decisions and
to be submitted at the Annual Shareholder Meeting. tax guidelines and accounting invoices during the Giang branches; signed all contracts within its accountabilities.
implementation of the new Sales policy.
» The Board of Directors approved the investment Members of the Board of Directors and Board of
» Examined the quarterly and full year financial reports.
projects: Approved investments to complete the Management organized around executing on the
» Discussed, interviewed and provide inputs to senior modules within the Pharmaceutical Factory in Vietnam; resolution of the Annual Shareholder Meeting in 2014
managers at the Company, discussed with the auditor acquired land and office spaces for the offices of Bac with the following targets: revenue, net profit after tax,
Giang and Phu Tho branches; approved the investment average income for employees, payment to state budget,
FINDINGS OF THE SUPERVISORY BOARD ON THE to install the DMS sales management software; investment projects, dividend payments, distribution of
ACTIVITIES OF MEMBERS OF THE BOARD OF net profit after tax…
DIRECTORS AND MANAGEMENT TEAM » The Board of Directors approved and circulated
guidelines for the authorized representatives of the The Board of Directors, the Board of Management
The Board of Directors held regular and extra-ordinary Company at the subsidiaries and affiliated companies. conducted sufficient reports and information disclosure
meetings in compliance with the Charter and the in accordance to existing laws.
company’s activities. » The Board of Directors temporarily approved the
budgets for 2015. Members of the Board of Directors attended all Board
The resolutions and decisions of the Board of Directors meetings and provided opinions according to guidelines,
and the Board of management were passed following the » The Board of Directors approved the resignation except for Mr. Phan Quoc Cong, who, because of personal
procedures, within the respective accountabilities and letter of a member of the Board of Directors: reasons, could not attend all Board meetings.

REPORT BY THE SUPERVISORY BOARD (continued)
FINDINGS BY THE SUPERVISORY BOARD ON THE COMPANY’S BUSINESS ACTIVITIES AND FINANCIAL
HEALTH
The Company’s business results
Major targets
Unit: billion dong
Compared to
No. Targets per resolution 2014 Target 2014 Actual % of target
2013
Total consolidated revenue 1,860 1,650 88.7% 98.2%
Traphaco’s total revenue 1,600 1,345 84.1% 97.6%
1 Revenue from manufactured products: 1,280 1,090 85.2% 99.4%
Revenue from imports, trading and 320 255 79.7% 90.7%
services
2 Consolidated net profit after tax 162 146 90.0% 97.6%

Executing on the project The pharmaceutical Factory in Vietnam at Van
3
Net profit of Traphaco parent company
Average income per employee

138
+10%
133 96.4% 97.3%
Ensured income to employees

Lam: Chartered capital was raised to 150 billion; Investment license
was revised to reflect the updated total investment cost of 420 billion;
completed construction design and divided up the project into several
02 new branches
tender contracts; invited bids for a number of the tender contracts;
4 Payment to state budget 95.9 tỷ đồng WERE SET UP: TIEN GIANG
02 new branches were set up: Tien Giang and Phu Tho branches. AND PHU THO BRANCHES
Business results in 2014
Unfulfilled objectives:
Achieved results:
Revenue: did not achieve target, declined by 1.8% compared to 2013.
The new sales policy was developed and successfully implemented:
» The number of customers who have signed direct sales contracts with the
company increased from 6,000 in quarter 1 2014 to 18,133 customers by 31
Dec 2014. Contribution of OTC revenue to total revenue from manufactured
77 % Net profit: did not achieve target, declined by 2.4% compared to 2013.
Those two targets were not achieved as an expected outcome of the new
sales policy being implemented since 1 Jan 2014.
products increased from 65% in 2013 to 77% in 2014; CONTRIBUTION OF OTC REVENUE
TO THE TOTAL REVENUE FROM » Many changes in the contracts with customers including cash payment
» The overall sales system was modernized and more closely monitored: MANUFACTURED PRODUCTS on deliver in order to ensure the Company’s sales policy was consistently
receivables, inventory, number of customers, discount and bonus to customers… IN 2014 implemented nationwide… caused customers to be skeptical, hence
were updated accurately on a real time basis; the support rate was low during the first quarters. However, revenue in
the fourth quarter increased by 77% compared to the first quarter, 20%
» The parent company’s cash flow was significantly improved: receivable days compared to the 2nd quarter and 25% compared to the 3rd quarter. This
was reduced from 54 days in 2013 to 44 days in 2014. The total cash collected
from customers of the parent Company reached 104.1% of total sales (1,400
billion/1,345 billion). As such, the company saved on average 89 billion in
working capital.
51 % meant that customers’ support grew quickly and it was the most notable
achieved result during 2014.
» A number of selling expense items in 2014 increased significantly: the cost

OWNERSHIP OF TRAPHACO to hire TNS to conduct a trade audit: 18 billion, investment cost for the DMS
Employees’ incomes were ensured; AT THAI NGUYEN software 3.5 billion, payment discount expense according to the new policy
PHARMACEUTICALS AND increased by 41 billion.
Increased Traphaco’s ownership at Thai Nguyen Pharmaceuticals and Medical MEDICAL EQUIPMENTS JOINT
Equipment Joint Stock Company to 51%; STOCK COMPANY

REPORT BY THE SUPERVISORY BOARD (continued)
Financial activities In 2014, the Company welcomed the tax audit team from Review of 2014 financial reports
the Tax Authority of Hanoi for the period from 2009 to
Key financial indicators in 2014 compared to 2013: 2013. According to the conclusion of the inspection team, The Supervisory Board reviewed, verified and agreed
the Company has to pay an amount of 4.05 billion in tax with the consolidated financial reports and the financial
Cost of goods sold/net revenue ratio declined by 0.4% arrears and 2.18 billion in late payment penalty, in which: reports of parent company in 2014, which were audited
by Deloitte Limited Liabilities Company. The financial
Administrative expense/ net revenue ratio declined Tax arrears from using invoices from enterprises which statements for the period ended 31 December 2013, the
by 0.3% have ceased operation accounted for 55% of the total half year and quarter financial reports in 2013 present
amount, equivalent to 2.2 billion. reasonably and accurately all key aspects of the financial
Interest expense/net revenue ratio declined by 0.99% position, business activities and cash flow activities of the
Tax arrears from advertising and conference expenses company.
Selling expense /net revenue ratio declined by 0.2% exceeding the regulated cap accounted for 28% of the
total amount due, equivalent to 1.1 billion (the amount The company fully complied with accounting standards
Other financial expense (other than interest expense)/ exceeding the regulated cap: 4.5 billion over 4 years). and regulations as well as existing financial management,
net revenue increased by 2.4% (including payment accounting and tax requirements in their accounting and
discount expense per the new sales policy in 2014) Tax arrears from bad debt provisions without proper financial reporting activities. The financial reports in 2014
documentations per regulations and other categories were completed accurately and in a timely manner.
accounted for 17%.
OPERATING BUDGET FOR THE SUPERVISORY BOARD
Compensation and operating budget for the Supervisory

Board in 2014 was allocated and disbursed according to
the Resolution of the Annual Shareholder Meeting dated
28 March 2013. Big4 auditing firms to be the auditor for the fiscal year
ended 31 December 2015
ASSESSMENTS OF COORDINATION BETWEEN
SUPERVISORY BOARD WITH THE BOARD The management team and the accounting
OF DIRECTORS, MANAGEMENT TEAM AND department coordinate with subsidiaries to
SHAREHOLDERS do necessary preparations for having monthly
consolidated financial reports.
The Board of Directors and management team
coordinated closely with and accommodated the The Company maintains cost saving policies and
Supervisory Board in fulfilling our duties, provided optimizes the operation of the whole system in order
sufficient information, Board meeting minutes and to further reduce the cost of goods sold/Net revenue
other required information. ratio.
In 2014, there was no request from the General The Company conducts tax finalization with tax
Shareholders, group of shareholders or shareholder(s) authorities more regularly to get timely update and
in regard to clause 2, article 79 of Enterprise Law for implement the guidelines by state governing agencies
the Supervisory to examine any particular issue in in finance and accounting activities.
management activities and operation of the company.
The finance and accounting department works more
RECOMMENDATIONS closely with the auditor and tax consultants to improve
the internal capability in finance and accounting
The Supervisory Board recommends the followings in activities.
2015:
The Company sets a roadmap to apply the ERP system
General Shareholder Assembly selects one of the thoroughly within the company.

NOTABLE EVENTS IN 2014
GMP-WHO AND THE PIONEERING ROLE IN PHARMACEUTICAL DEVELOPMENT CUSTOMER CENTRICITY CONTEST 2014
As the first Pharmacy business in the North recognized by the Selection The contest aimed promoting customer centricity 2014 was launched by the
Committee of the Ministry of Health to have 4 medicinal plants with GACP- Party committee of the company, with the goal of helping employees in each
WHO standards (Good practice in cultivation and collection of medicinal plants department “have the right understanding of customers; Share, collaborate
as recommended by the World Health Organization), Traphaco has confirmed to create optimal products - services; Continue to commit to always meeting
its pioneering role in the developing sustainable pharmaceuticals. This customer demands”; it aimed to increase the value of the enterprise as well as to
achievement has important implications, it does not only set pharmaceutical build Traphaco brand image to be more and more trusted and loved by customers.
standards for Traphaco in particular, but also creates a common standard
for the pharmaceutical market in Vietnam, in accordance with international There were 114 registered projects, bringing in tens of billions of profit for
standards. From the success of Traphaco, various pharmaceutical companies the enterprise. The Organizing Committee also awarded the outstanding
started to invest and develop farming areas of medicinal plants, contributing projects with a total prize value of VND567 million dong.
to the sustainable development of the country’s traditional medicine.
TRAPHACO SPONSORED THE PROGRAM “THE WAY OF VIETNAMESE SUCCESSFULLY IMPLEMENTED THE NEW SALES POLICY
MEDICINES”
2014 marked a turning point in Traphaco’s development history, when the
Traphaco is honored to be chosen by the Ministry of Health to be the official company successfully implemented the new OTC sales policy to set up and
sponsor of the program “The way of Vietnamese medicines “. The PR campaign transform a modern distribution network with direct access and timely care
called “The way of Vietnamese medicines” was launched to propagandize, to over 18,000 pharmacies nationwide. The new policy also helped manage
campaign and disseminate to all subjects, so that physicians and consumers better working capital, reduce receivables and inventories, reset the planning
would have the right understanding, and become more confident in the and manufacturing activities to be in line with market demand, mitigate
quality of Vietnamese medicine, encourage the people to use Vietnamese many business risks and especially create many opportunities for Traphaco
medicines, build confidence in Vietnamese medicines, and all of their values to cooperate and distribute many products from reputable international
and efficiencies while being more affordable than foreign medicines. companies.
THE STAR OF VIETNAMESE MEDICINES IMPLEMENTED THE PROGRAM TO INTEGRATE ISO, GPS
Is the most prestigious recognition granted by Ministry of Health to Traphaco The program to integrate ISO, GPs during the year was a breakthrough in
– A pharmaceutical manufacturer and 05 of the Company’s products quality – environment impact management system through systemizing
including: Hoat Huyet Duong Nao, Boganic for liver function, Duong cot and connecting consistently the processes and guidelines. This result set
hoan for joint diseases, Didicera and Ampelop for stomachaches. The 05 up a strong foundation for the operation of the whole system and served
products, which received “The Star of Vietnamese medicines” recognition, as a platform for future improvement and efficiency enhancement to meet
are all made from herbal plants and among the Top 10 revenue generators the rising demand from the customers, the Company’s leadership and
of Traphaco. These are the products that the Company researches, develops regulations.
and manufactures comprehensively. They are the results of full and proper
scientific research projects.
VIETNAM VALUE 2014 2014 TRAPHACO SINGING CONTEST
Businesses that are recognized as a National Brand not only achieve the criteria This was a meaningful activity, attracting nearly 300 contestants and
of growth, firm size, but also meet their tax obligations, social obligations, received great response from the majority of employees through 18
implement social insurance and welfare schemes for employees, responsible performances from all departments, Hoang Liet factory, CNC factory.
for community ... Being selected as “National Brand 2014” (Vietnam Value The contest has brought a lot of values for employees, for the enterprise,
2014) for the second consecutive time is the recognition of the Government created a great connection between the leaders and the staffs. The contest
and people of Vietnam for Traphaco’s efforts in the process of innovation also created opportunities for team work, working together toward
and continuous improvement of quality products to offer “green” products common goals, awakened the desire of each individual to contribute more,
suitable for the modern society - the Vietnamese medicinal products for the encouraged the participation of employees in the company, contributing
Vietnamese people. to building a growing Traphaco’s corporate culture.

PRESTIGIOUS AWARDS
AWARDS AND ACHIEVEMENTS
2014
2012 Vietnam Value Award.
The Star of Vietnamese Medicines Title for
2010
Received the “First Class Labor Medal”
Traphaco brand and 05 of the company’s
from the President of the Socialist
products by the Ministry of Health.
Republic of Vietnam.
1998 - 2011 2005 Won the title “Labor Hero”. “The Third-Class Labor Medal”
from the President of the Socialist
TOP 50 Best listed companies in
Vietnam by Forbes Magazine.
2008
Received the WIPO award from
Republic of Vietnam granted to the
the World Intellectual Property
Received the recognition “Enterprise Company’s labor union. Representative “Green brand” Award
Organization.
For 14 consecutive years received the for women’s progress” – the by the Ministry of Planning and
National Quality Gold Prize Award.
“Consumers’ Choice for High quality KOVALEVSKAIA award for the female Gold cup for the most recognized Won the award for corporate social Investments & Economic Review and
Vietnamese products” award. science workers of Traphaco. Traphaco brand. responsibilities. Vietnam Value Award 2012. Forecast Magazine.
NATIONAL QUALITY GOLD PRIZE AWARD WPO AWARD 2009 THE SECOND-CLASS LABOR MEDAL LEADING BRAND IN VIETNAM LABOR HERO TITLE TOP 10 VIETNAM’S GOLD STARS FIRST CLASS LABOR MEDAL ASIA- PACIFIC GLOBAL PERFORMANCE EXCELLENCE THE STAR OF VIETNAMESE
VIETNAM VALUE AWARD
AWARD 2013 MEDICINES TITLE
Won the “Vietnam’s Gold Star” award “The Second-Class Labor Medal” Was recognized with “the Most Received the commemorative medal Asia- Pacific Global Performance
(in the TOP 100 consecutively from the President of the Socialist Recognized Pharmaceutical Brand in “Representative Party Unit”. Excellence Award 2013.
throughout the period 2008-2011, Republic of Vietnam, “The Third-Class Vietnam”
TOP 10 enterprises with Corporate
TOP 10 in 2013). Labor Medal” from the President of TOP 10 Enterprise with Social
Social Responsibilities.
the Socialist Republic of Vietnam Responsibilities (Vietnam’s Gold Star
2003 - 2011
granted to the Company’s labor
union. The only pharmaceutical 2009 Leading brand in Vietnam.
Vifotec’s first prize for Boganic.
Award), TOP 10 Most recognized
brands in Vietnam.
company which received the
“Techmart Gold Cup”.
2013
2007 2011

SATISFACTION
from ENERGETIC PASSION
Number of members and structure of the Board of Directors and supporting sub-committees
Activities of the Board of Directors and the Board of Supervisors
Activities to enhance the corporate governance capacity
Risk management report
NUMBER OF MEMBERS AND STRUCTURE OF THE BOARD OF
DIRECTORS AND THE FUNCTIONAL SUPPORTING COMMITTEES
THE BOARD OF DIRECTORS AGENDA OF THE BOARD OF DIRECTORS’ MEETINGS
Compared to 2013, the number of members of the Board of Directors increased by 02 with the addition of inde- During 2014, the Board of Directors conducted 8 meetings through physical attendance and sending documented
pendent Board members. As of 31 Dec 2014, the Board of Directors was consisted of 07 members, including 01 opinions:
Chairwoman, 01 Chairman and 05 members.
Members Number of
No. Titles Percentage Reason for absence
2013 2014 of the board meetings attended
Number of members 5 7 1 Vu Thi Thuan Chairwoman 08/08 100%
2 Tran Tuc Ma Deputy Chairman 08/08 100%
By genders
3 Nguyen Thi Lan Member 08/08 100%
Number of female members 2 2
4 Nong Huu Duc Member 08/08 100%
Number of male members 3 5
5 Le Tuan Member 08/08 100%
Executive, non-executive, independent 6 Tran Manh Huu Member 08/08 100%
Executive Board members (*) 4 4 7 Phan Quoc Cong Member 02/08 25% On oversea business trip
Independent Board members 1 3
Agenda of the Board of Directors’ meetings in 2014
(*) Board members cum executive roles include General Director, and Deputy General Director.
Meeting Agenda
FUNCTIONAL COMMITTEES TO SUPPORT THE BOARD OF DIRECTORS First quarter 2014
28/02/2014 • Report on business results in the first 2 months
On 30 May 2011, The Board of Directors of Traphaco Joint Stock Company circulated Decision numbered 68/2011/
HDQT to set up functional commitments to support the Board of Directors as well as guidelines on accountabilities, • Approve the proposed agenda of the Annual Shareholder Meeting
responsibilities and rights of the committees. 26/3/2014 • Preparation activities for the Annual Shareholder Meeting
28/3/2014 • Review and take lessons learned from organizing the Annual Shareholder Meeting
Committees:
• Tasks and accountabilities allocation for new Board members
Second quarter 2014

No. Committee Main functions Number of members
16/5/2014 • Report on the master plan design for the Pharmaceutical Factory of Vietnam.
Advise and support the Board of Directors in the
1 Human Resource Committee 4 • Report on the Company’s business results from 01/01/2014 – 4/30/2014, report on
areas of administration and human resource.
implementing the new sales policy
Research and Development Advise and support the Board of Directors in the • Report on the resolutions of the Annual Shareholders Meeting of subsidiaries and affiliated companies
2 4
of New Products Committee areas of research and development of new products.
• Proposal on selection of auditor for fiscal year 2014.
Investment and Finance Advise and support the Board of Directors in • Report on investments in equipment for automatic production line to manufacture eye and nasal drops
3 4
Committee investment and finance activities.
Third quarter 2014
Business Development Advise and support the Board of Directors in
4 5 29/7/2014 • Report on business results in the first half of 2014; report on implementing the new policy
Committee business development activities.
and working with TNS
• Report on business activities for the Southern market
• Report on the progress of completing the project Pharmaceutical Factory of Vietnam
• Approve and circulate the guidelines for Traphaco joint stock company’s authorized repre-
sentatives at subsidiaries and affiliated companies
Fourth quarter 2014

15/10/2014 • Report on the progress of completing the project Pharmaceutical Factory of Vietnam
• Report on business results in October and November/2014
25/11/2014 • Report on achieving the targets for 2014
26/12/2014 • Discussion on proposed targets for 2015
• Discussion on timeline for the Annual Shareholder Meeting and allocation of accountabilities
to complete the Annual Report.
68 ANNUAL REPORT 2014 CORPORATE GOVERNANCE 69

ACTIVITIES OF THE BOARD OF DIRECTORS AND SUPERVISORY BOARD
ACTIVITIES OF SUPPORTING COMMITTEES FOR quarterly and 2014 financial reports of the parent STOCK TRADING ACTIVITIES BY INSIDERS AND CONNECTED PERSONS
THE BOARD OF DIRECTORS company after they have been audited by Deloitte
Limited Liabilities Company. Based on the audited
Reason to add/
ported the Board of Directors, prepared the agenda, reports, we formed our independent opinions on the
Opening holding Ending holding divest (buy, sell,
discussion materials and related topics for Board of financial statements. Persons Persons transfer, bonus…)
Directors’ meetings. No. conducted conducted
Specifically: transactions transactions Number Number
ACTIVITIES OF NON-EXECUTIVE, INDEPENDENT of shares Percentage of shares Percentage
BOARD MEMBERS » Reviewed the legality, order and procedures to circulate transacted transacted
the resolutions and decisions by the Board of Directors,
Deputy General
Contributed opinions during the meetings. Board of Management based on Enterprise laws and 1 Hoang Thi Ruoc 104,840 0.42% 24,840 0.1% sell
Director
the Company’s charter;
Supervised and supported the Board of Directors, Daughter of
2 Nguyen Thi Bao Van 102,000 0.41% 70,000 0.28% sell
Board of Management in specific activities within the » Supervised the fulfillment of the 2014 Annual Chairwoman
assigned accountabilities between the two meetings. Shareholder Meeting’s resolutions with regard to Sister of Deputy
dividend payments, completing investment projects 3 Nguyen Thi Thuy 5,928 0.024% 8 0.0000% sell
General Director
Attended events and meetings at the requests of and achieving of business targets.
Chairwoman or General Director. Spouse of the
4 Pham Duong Minh 2,080 0.008% 0 sell
» Examined the compliance of the company in its Spokesperson
ACTIVITIES OF THE BOARD OF SUPERVISORS activities to Enterprise laws, decrees, guidelines and
stipulations for joint stock companies as well as TRANSACTIONS BY MAJOR SHAREHOLDERS
For the term 2011 – 2015, the Board of Supervisors pharmaceutical companies.
is consisted of 03 members, by November 2013, one
Reason to add/divest
member resigned and one new member was added at » Examined the compliance to the company’s guidelines No. Transacting party Opening holding Ending holding
(buy, sell, transfer, bonus…)
the Annual Shareholder Meeting in 2014. and charter in normal business activities.
1 Vietnam Holding Limited 2,173,748 2,573,748 Bought: 400,000
In 2014, the Supervisory Board held regular meetings » Examined the compliance to guidelines relating to 2 Citigroup Global Markets Ltd 1,315,760 1,170,760 Sold: 145,000
per guidelines and participated in all Traphaco’s Board information disclosure activities of the company based
of Director meetings. on existing laws.
Examined and monitored business operation » Reviewed the implementation of the new sales policy
and management, execution of the 2014 Annual by the Company and at the Ho Chi Minh City branch.
COMPLIANCE TO CORPORATE GOVERNANCE GUIDELINES
Shareholder Meeting’s resolutions, the fulfillments of
The Company’s regulations, guidelines and activities are in compliance with all laws and regulations for enterprises.
2014 business objectives by the Board of Directors » Monitored the compliance to accounting rules,
and the Board of Management. We examined the tax guidelines and accounting invoices during the
At the Annual Shareholder Meeting in 2014, Traphaco proposed and obtained approval by the General Shareholder
reasonableness and legality of all business operations implementation of the new Sales policy.
Assembly to amend the Company’s Charter to be more in line with the sample charter, decree 121/2012/TT-BTC dated
of the company in the past year, reviewed the report
26 July 2012 by Ministry of Finance and existing regulations.
on business performance by the Board of Directors to » Examined the quarterly and full year financial reports.
be submitted at the Annual Shareholder Meeting.
» Discussed, interviewed and provide inputs to senior
Reviewed the consolidated financial statements, the managers at the Company, discussed with the auditor .
COMPENSATION OF THE BOARD OF DIRECTORS AND SUPERVISORY BOARD
Compensation of the board of directors and supervisory board was accounted as administrative expense and paid out
according to the resolution of the Annual Shareholder Meeting in 2014: VND4,100,000,000, specifically:
• Compensation of the Board of Directors: VND3,500,000,000
• Compensation of the Supervisory Board: VND600,000,000

CORPORATE GOVERNANCE ENHANCEMENT ACTIVITIES
The Board of Directors maintained a system to meet Acquired land and office spaces for the offices of Bac
regularly once per month and held extra-ordinary Giang and Phu Tho branches;
meetings once issues arose, delegated tasks and
accountabilities to each member. During 2014, the Board Set up 2 branches in Tien Giang and Phu Tho
of Directors held 8 meetings with the following agenda:
Increased the ownership at Thai Nguyen
Pharmaceuticals and Medical Equipment Joint Stock
Administration activities
Company from 49% to 51%.
The Board of Directors passed the decisions to appoint
Supervision of the management team by the Board
senior positions: the Deputy General Director position,
of Directors
appointed the Branch Directors at Can Tho, Khanh
Hoa, Phu Tho and Tien Giang branches, appointed the
The Board of Directors is a body representing
Chairman of the Traphaco Hung Yen Single Member
shareholders to guide the operation of the Company in a
Limited Liabilities Company;
way that is consistent with strategic objectives, supervise
The Board of Directors met and assigned specific the management team in overcoming difficulties and
accountabilities to newly added Board members by achieving targets, specifically:
the Annual Shareholder Meeting in 2014.
Supervised the execution of the company’s business
The Board of Directors approved and circulated targets.
guidelines for the authorized representatives of the
Instructed the management team in organizing the
Company at the subsidiaries and affiliated companies.
2014 Annual Shareholder Meeting on 28 March 2014.
During 2014, Mr. Phan Quoc Cong, a member of the
Guided, supervised and supported the Management
Board, could not attend all Board meetings because of
team in executing the resolution of the Annual
personal reasons. As such, Mr. Phan Quoc Cong submitted
Shareholder Meeting, the resolutions and decisions
his resignation letter, which was then approved by the
by the Board of Directors; worked closely with and
Board effective since 12 February 2015.
provided guidance for the management team in
implementing the new sales policy through the reports
Investment activities
from the General Directors and directly surveying of
the market and distribution network.
Approved the implementation of the DMS sales
management software for the sales team. Approved the business targets for 2015
Adjusted the investment amount for the project the Disclosed information and submitted reports in
Pharmaceutical Factory in Vietnam from 300 billion to accordance with existing regulation of government
420 billion. agencies.
Increased the chartered capital of Hung Yen Single Managed risks and conducted activities in accordance
Member Limited Liabilities Company. with Enterprise laws.
Approved the master plan design for the construction
of the Pharmaceutical Factory in Vietnam
Collection of Ampelopsis cantoniensis at Muong Hum – Bat Xat – Lao Cai using GACP WHO practice
(Good agriculture and collection practice based on guidelines by the World Health Organization).
RISK MANAGEMENT REPORT
LEGAL documents will lead to legal risks for

the Enterprise. Specifically, legal risks
OVER THE RECENT Specification of risks associated with executing business
PERIOD, THE contracts, ownership, intellectual
Currently, Vietnam has been making properties and taxes.
GOVERNMENT CIRCULATED efforts to develop and complete
the legal framework. The legal Risks associated with incompliance
MANY SOLUTIONS
documentation system in Vietnam to policies which are about to be
AND DECISIONS TO has not caught up with the pace of promulgated by Ministry of Health
economic growth. The government to govern the pharmaceutical and
EXPEDITE THE PROCESS
constantly circulates sub-law food supplement industry.
OF RESTRUCTURING THE documents and guidelines to revise
and adjust existing policies. As the company strengthens its
ECONOMY, FOCUSED ON
international trade activities, there
IMPROVING THE BUSINESS Over the recent period, the would be a higher level of legal
government circulated many risks. The risks could arise from every
ENVIRONMENT, PROMOTED
solutions and decisions to expedite step of negotiation, signing and
REFORMS AND PROVIDED the process of restructuring the executing export-import contract
economy, focused on improving the processes.
SUPPORT TO GROW
business environment, promoted
ENTERPRISES, ESPECIALLY reforms and provided support to Implication of risks
grow enterprises, especially small
SMALL AND MEDIUM
and medium enterprises. Changes in existing laws could Designated officers within the grew, imports grew, inflation was development of the global
ENTERPRISES. lead to unexpected risks and direct Company proactively and thoroughly maintained at a low level, trade economy. The higher growth rate of
Failures to update in time and negative impact on the company’s study the new legal documents surplus grew by 4.1% in 2014. Lending public debts over the recent years
strictly follow the revised legal business activities. and guidelines to effectively apply interest rate declined, exchange rate has been a growing concern, which
and implement in the best interest stabilized and consumer price index could lead to potential liabilities
Lawsuits and legal disputes could of the Company, at the same time declined, energy prices declined, a and risks. Vietnamese enterprises
arise in many transactions. At work closely with Risk Department stronger current account balance are still facing potential downsides
different level, conflicts in economic to review the legality of documents helped Vietnam increase its foreign of the economy, including inflation,
transactions could lead to damages and contracts throughout the currency reserves. Those positive devaluation and weak domestic
in terms of time consumption, Company’s business activities. economic development contributed consumption.
financial loss or total cancellation of to improve the national credit risk
the transactions. In regular discussions and follow closely ranking of Vietnam. The improving Other risks in the Company’s
the legal consultations from lawyers in trend in the global economy also business environment could
Mechanism to mitigate risks handling business relationships with helped bolster Vietnam’s trading come in many forms such as lack
international parties. activities. of information, incidents arising
For Traphaco, legal muscle is one of from investing in subsidiaries and
the prerequisites for the company MACRO-ECONOMIC However, Vietnam’s economic affiliated companies. The company’s
to develop sustainably, therefore growth is dependent on the sources of capital also have unstable
the Company has hired a Legal Specification of risks following external factors and risks because of the complicated
Consulting Firm to work closely exposed to the following risks: The development of the global
with the company’s compliance In 2014, the macro economy slow progress of restructuring state economy.
division to get updated regularly showed more signs of stability, the enterprises and banking system
on new legal documents, especially overall growth rate was maintained could have negative impacts on the Implication of risks
the state policies which are applied at a stable and relatively high rate. macro financial system; Vietnam’s
specifically for taxations and the GDP growth in Vietnam reached strongly pro-export growth could Negatively impact the business
pharmaceutical industry. 5.6%, FDI investments into Vietnam be impacted by the unfavorable activities of the Company.

RISK MANAGEMENT REPORT (continued)
14001:2004, ISO 9001:2008, 5S Kaizen not yet suitable to and compatible The Company also researched
toolkits from Japan – Commercialize with Traphaco’s quality standards, and developed several cultivation,
products through a socially and that impacted production and processing and preserving protocols
responsible distribution network. led to understock and losing market for a number of herbal ingredients.
share by the Company
Enhance the value chain based on COMPETITION AND
production renovation, stronger Negatively affected the Company’s COUNTERFEITED PRODUCTS
ties between production and net profit.
commercialization, application of Specification of risks
bio-technology in research and Affected productivity, quality,
development of new products. concentration, activeness of main Upon entering AFTA (ASEAN Free
substances, stability and toxication of Trade Area), Vietnam will be under
Control receivables and inventories, the ingredients in the farming areas. pressure from the free flow of goods,
enhance working capital management. most of the tax codes will be reduced
Mechanism to mitigate risks to 0% by 2015, the remaining few
Increase budgets for training and will be reduced by 2018.
developing a high quality human On an annual basis, the Company
resource, build a comprehensive proactively and thoroughly The business community will face
working relationship between evaluates capabilities of suppliers many difficulties in capturing
departments, factories and workshops. and proceeds to sign procurement market opportunities. Goods and
Develop and apply KPI system to contracts with suppliers with products from other countries in
evaluate performances at Traphaco. reasonable prices and input quality ASEAN will flood the market starting
that meets the required standards of in 2015 when the regional market
RAW MATERIALS Traphaco. will be opened for free trade. Not to
mention, starting in 2018, Vietnam
Specification of risks The ingredients are stocked will have to completely open its
and preserved in GSP-qualified market according to WTO accession
Unstable raw material supply and warehouses. commitments, thus pressure from
reliance on the quality of the suppliers. competition will be huge.
Weak domestic demand, which Traphaco has proactively developed
DEVELOP SHORT AND LONG-TERM INVESTMENT PRO- leads to reduced consumption, The prices of raw material inputs a complete GACP-certified farming Furthermore, given the low barrier to
will directly affect the Company’s are always fluctuating and hugely areas to secure an ingredient supply entry of the pharmaceutical sector,
GRAMS AND PLANS, IMPLEMENT SOLUTIONS TO EN- outputs and hence, incomes of the influenced by exchange rate for the Company’s production Traphaco is facing fiercer and fiercer
SURE THE ACHIEVEMENT OF ALL OBJECTIVES, CONSISTENCY Company’s employees. fluctuation. The prices tend to be activities. With a business model competition from domestic and
boosted up during scarcity. based on the alliance of 4 entities: international players with diverse
IN EXECUTING THE LONG TERM DEVELOPMENT STRATEGY Mechanism to mitigate risks the State – Farmers – Scientists – array of products in dosage forms,
“THE WAY OF GREEN HEALTH” WITHIN THE COMPANY. GACP implementation at remote Enterprise within the Greenplan quality and price.
Develop short and long-term and mountainous areas where project. Connecting: Production
Weakening of the dong will increase investment programs and plans, the farmers are less educated is a – Processing – Commercialization Implication of risks
the input costs but the prices of the implement solutions to ensure great challenge for the enterprise. – Consumption to establish a
Company’s products cannot increase the achievement of all objectives, The farmers’ understanding of breakthrough for the enterprise. The Company faces threats of
accordingly due to the price control consistency in executing the long organization and technical skills losing market share, the Company’s
mechanism applied by the State to term development strategy “the way is very limited, compliance to Develop periodic implementation products can be easily substituted
the pharmaceutical industry. of green health” within the company. the technical requirements per plan based on the principles and by similar products by competitors.
contracts is poor. Furthermore, there standards of GACP – WHO to
Increasing participation of foreign Develop the resources along are potential risks such as: seed apply to the cultivation, growing Traphaco’s products sold through
pharmaceutical companies will the value chain: Research and quality risk, soil risk, climate risk and and collecting of herbal plants by ETC system face greater difficulties
reduce market shares of the develop products – Develop raw material preservation risk… farmers who are participating in the from price competition (as a direct
domestic companies, Consequently farming areas of clean ingredients project so that they could be fully outcome of the Inter-ministerial
the company will face immense – Manufacture at factories using Implication of risks equipped with technical skills, at decree 01/2012TTLT-BYT-BTC).
pressure to expand its market, both GPs-WHO best practices which the same time engaging long-term
from capturing more domestic are also environmentally friendly – Quality standards of inputs by partnership with the Company and There are more and more
market share and increasing export. Apply quality-control systems ISO several packaging suppliers were earning stable incomes. counterfeited products and fakes

RISK MANAGEMENT REPORT (continued)
counterfeited products to minimize distribution channel, aggressively consequences of hacking and

damages in business activities. collected outstanding debts confidentiality infringement.
and maximized the operational
FINANCIAL efficiency of the Company’s working Implication of risks
capital cycle.
Specification of risks Creates the “loopholes” in
Maintained an appropriate balance confidentiality which could lead
Overdue receivable risk, especially in between loans with fixed and to unrepairable damages. This not
OTC market floating interest rates. only results in financial loss to the
business activities but also could
Exchange rate risk associated with Developed a suitable and regularly- undermines the Company’s brand
PLAN RISK ACT transactions with international adjusted credit policy based on and creditability.
ASSESSENT counterparties and interest rate risk analyses, revaluation and with
for interest-bearing loans with pre- solutions to minimize the impact When incidents happen and there
determined rates (based on floating of credit risks on the Company’s is no team or solution to respond
and fixed interest rates). business results. to the incidents, data might be
Capital-cost risk from investments

and equity-linked instruments.
THE COMPANY’S LEADERSHIP HAS PLANS TO ALLOCATE
Credit risk arises when customers and SUFFICIENT BUDGETS FOR AND SELECTS OPTIMAL
counterparts could not fulfill their
obligations in business contracts,
SOLUTIONS FOR ENHANCING THE INFORMATION SECURITY
which will result in financial loss for OF THE WHOLE ORGANIZATION.
the company.
Liquidity risk Regularly monitored current and permanently lost without ways to
future liquidity requirements to be retrieved.
in the market, which undermine and stable incomes for its employees the advantages and develops the Implication of risks ensure a sufficient level of cash
the products’ brands and reduce and further solidifies its vertical distribution network. Improves the reserve, liabilities and shareholders’ Mechanism to mitigate risks
customers’ trust in the Company’s integration. distribution network in terms of Incurs bad debts and reduces equity to meet all the guidelines for
products. Reduced consumption human resource, infrastructure and working capital turnover. short-term and long term liquidity. The Company’s IT system staffs are
will directly impact business In order to strengthen the necessary equipment to enhance sufficiently trained in information
performance. Company’s competitiveness in the effective operation of the Negatively impacts the Company’s profit. CONFIDENTIAL security. There should be clearly
the market, in 2014, Traphaco whole system. Employs the DMS guidelines and responsibilities for
Mechanism to mitigate risks completely restructured its sales software and monitors closely the Leads to insufficient funding to Specification of risks end-users.
strategy, business direction and implementation of the OTC sales fulfilling current and future financial
The Company prioritizes market approach. The Company policy in the Northern, Central and obligations. During 2014, over 6,500 “.vn” The IT department should regularly
strengthening the competitiveness implements the new OTC sales Southern markets. websites in Vietnam were hacked review and have plan for periodic
of its products and brands policy based on a win-win Mechanism to mitigate risks and taken control. That trend rang system upgrade. In addition, the
through enhancing investment in principle and brings more benefits Strengthens and promotes Traphaco a warning bell for enterprises. whole organization should comply
modern technology at its factories, to its customers, which are the brand as well as GACP accreditation The Company implemented the Currently, most Vietnamese with confidentiality guidelines to
improving management capabilities distribution intermediaries, creating directly to consumers, pharmacists- new OTC sales policy starting from enterprises have not prioritized avoid loopholes for hackers to abuse.
and quality of the human resource more added values for its customers sales staffs at pharmacies, doctors 01 January 2014 based on a win-win internet security and confidentiality.
for the distribution network, and incentivizing greater customers’ through health consultation principle, at the same time stipulated The Company’s leadership has not The Company’s leadership has plans
management tools, increasing support, hence increases revenue activities. clearly credit terms for collecting prioritized investing resources into to allocate sufficient budgets for
productivity and product quality. and net profit. receivables: cash on delivery for retail internet security and confidentiality. and selects optimal solutions for
Traphaco also bolsters its financial The Company always prioritizes distribution channel and less than In addition, IT staffs historically enhancing the information security
strength, ensures sustainably high Captures the opportunity, utilizes protecting its brands against fakes and 01 month credit term for wholesale have been playing down the of the whole organization.

SUSTAINABILITY
from LONG-TERM COMMITMENT
SUSTAINABLE DEVELOPMENT REPORT

Corporate governance
Responsibilities to counterparts
Responsibilities in product quality
Supply chain management
Report on environmental impacts
2014 sustainable development report is the first report done by Traphaco on sustainable development focusing Viewing that only through sustainable development will long-term brand value
on 5 key areas: Corporate Governance, Responsibilities to counterparties, Products’ responsibilities, Supply chain and stable growth be achieved, Traphaco has adopted the development strategy
management and Environment- impact report. “The way of Green Health” to contribute to the development of a “Green Economy”.
Reporting period: for the fiscal year 2014 starting from 01 Jan 2014 to 31 Dec 2014. In addition, Traphaco has engaged in many activities to continuously upgrade
the Corporate governance system in order to create more values for shareholders,

Frequency of report: one per annum consumers and other stakeholders.
Contact point in case of inquiry: Ms. Dao Thuy Ha – Spokesperson. Tel: 04 3683 0751. Email: ir@traphaco.com.vn
Scope and areas of report: The report was made in Vietnam, within the pharmaceutical sector for business
(See Corporate Governance Section in page 68-72)
activities of Traphaco Joint Stock Company and its subsidiaries and affiliated companies, which were specified in
Structure – Organization – Human Resource Section.
List of contents: The report was conducted based on the Guideline for Sustainable Development Report,
published by the State Securities Commission in collaboration with IFC (International Finance Corporation)
including the follows:
01 Corporate
governance 02 Responsibilities
to counterparties 03 Product-based
responsibilities 04 Supply chain
management 05 Environment
impact report
–
82 ANNUAL REPORT 2014 SUSTAINABLE DEVELOPMENT REPORT 83

RESPONSIBILITIES TO STAKEHOLDERS
TO THE STATE’S BUDGET 2014 could be considered a firm, to evaluate the compliance
landmark year with many important of sales reps and customers to
The Company consistently complies with policies and guidelines from the
Government and existing laws in its business activities.
Each year, the Company strictly fulfills its tax obligations and other payments
95,9 billion VND
2014 COULD BE
CONSIDERED A
LANDMARK YEAR WITH
turning points for traphaco. Traphaco
completely overhauled the sales
policy and market approach with
the implementation of the new
the new sales policies, evaluate
the status and operation of the
distribution network as well
as customers’ support. During
required by laws to the State. In 2014, the Company paid in full and timely TOTAL PAYMENTS BY THE otc sales policy based on a win-win 2014, Traphaco organized 02
COMPANY TO THE STATE’S
MANY IMPORTANT TURNING
its obligations to the State with a total amount of: 95,900,000,000 dong principle starting from 01 jan 2014. Customer conferences in Lao Cai
(according to consolidated financial statements). BUDGET IN 2014 POINTS FOR TRAPHACO. Given the pioneering measures and Thai Nguyen; 08 customer
in restricting the sales strategy as appreciation trips for customers
TRAPHACO COMPLETELY
TO THE SHAREHOLDERS well as investment in technology, to visit the Company; hosted 04
Annual Shareholder Meeting.
OVERHAULED THE SALES Traphaco continued to establish trips (ETC customers, delegations
itself as “the leader”. from hospitals and treatment
POLICY AND MARKET
Provide annual reports, financial information and other relevant facilities) from the Central and the
information to shareholders and investors on the Company’s website.
APPROACH WITH THE In order to Traphaco’s new sales South to visit the Company and
Shareholders are important policy to gain more supports, the Company’s manufacturing
Strictly comply with information disclosure requirements. IMPLEMENTATION OF THE
stakeholders of the company. The Traphaco organized many field facilities. Through those
relationship between Traphaco Welcome visits by the investors and shareholders to the Company’s
NEW OTC SALES POLICY trips to survey the market as well conferences and trips, customers
and its shareholders is especially as many customer conferences gained more knowledge about
headquarter, factories and farming areas… BASED ON A WIN-WIN
valued. The Company’s IR activities to share the intention of the new Traphaco, our products’ quality as
are conducted in a flexible manner PRINCIPLE STARTING FROM sales policies and build a stronger well as the new sales policy, hence
Answer all inquiries, provide all requested information to shareholders
and to accommodate investors tie between customers and the strengthened their confidence in
and investors through telephones and emails. 01 JAN 2014.
to the most extent in gaining company; coordinated with TNS – the Company’s products.
information about the Company in a multinational market consulting
the following forms: Readily receive and coordinate to address all concerns as well as provide
information directly to shareholders and investors, who visit the Company.
Listen authentically to and share with shareholders and investors

about the discussed issues for the development of the enterprise.
Traphaco has been proactively maintaining a good working relationship with

government regulatory agencies, customers, shareholders and investors.
In order to ensure the value-added to shareholders, Traphaco has always
maintained a minimum dividend ratio of 20% per annum.
18 branches
Given the growing strength of Traphaco, over the past year, many investors,
including securities companies, intentional and domestic investment funds,
have visited and held working sessions at the Company. Throughout these
subsidiaries and
working sessions, we have learned that the value of TRA stock does not
only come from the underlying business performance but also comes from
what we have done for our community, for our shareholders, customers and
employees, as well as what we will do for the future sustainable development
6 affiliated companies
of the enterprise.
TO THE CUSTOMERS
Keeping in mind the responsibility of a leading brand in the pharmaceutical

industry, Traphaco has bravely and relentlessly renovated its governance.
Most notably in 2014, Traphaco successfully transformed and implemented a
18,000
modern distribution system, employing high-technology in managing its RETAIL CUSTOMERS NATIONWIDE
distribution network. Accordingly, Traphaco could directly access and care
for over 18,000 customers nationwide.

RESPONSIBILITIES TO STAKEHOLDERS (continued)
In parallel to changing the sales policy, over the recent period, Traphaco has
also enhanced the governance at the provincial pharmaceutical distributors, The contributor and sponsor of the “For the poor” fund, the “Reaching arms” program for 10 consecutive
TRAPHACO ALWAYS which they gained ownership through the M&A activities in order to achieve years. The company contributes hundreds of millions dong per year.
the original intentions. Currently, Traphaco has had 18 branches (expects to
“SETS THE WELL- increase to 22 branches in 2015), 03 subsidiaries and affiliated companies
Traphaco is the sponsor of the program “One Hear – One World” program for 8 consecutive years.
BEING OFTHE COMMUNITY (focusing on distribution) and is currently the listed pharmaceutical company
with the 2nd largest distribution network in Vietnam.
AS THE ORIGIN FOR ALL
sponsor of the program “The Spring for you” for 7 consecutive years..
ACTIONS”. AS SUCH, TO COMMUNITY
TRAPHACO COMMITS Reaffirmed its pioneering position as the leading pharmaceutical Brand Traphaco also supports the war veterans and invalids, victims of Orange Agents by
TO CONTRIBUTE TO THE for sustainable development. Traphaco boldly reached out to the farmers cash or medicines produced by the company.
in remote and mountainous areas to work together in building and
STABLE AND SUSTAINABLE developing farming areas of herbal ingredients. In 2014, Traphaco is the first Set aside 8 billion worth of products and materials for the program “Free health consultation
DEVELOPMENT OF THE pharmaceutical company in the North to be granted the GACP – WHO (Good and gifts for the elderly and women nationwide”, which are conducted annually.
Agricultural Collection Practices by WHO) certification for the farming areas of
COMPANY THROUGH 4 important medicinal plants (Artichoke, Polyscias fruticosa, Convolvulaceae Donates money and gifts to the Youth Volunteer Union and provides care for
ENHANCING THE QUALITY and Molluginaceae) by the Selection Committee within the Ministry of Health. Vietnamese Heroic Mother and orphans annually.
Being the pioneer in developing farming areas is not only a step toward
OF LIFE OF THE EMPLOYEES Traphaco’s sustainable development, but also a competitive advantage for
AND THEIR LOVED ONES, OF the Company in the local and international market, at the same time creates
thousands of jobs. Other annual charity works also include: free meals for poor patients of serious
THE COMMUNITY AND THE illnesses at hospitals, donations to people in areas suffering from natural
OVERALL SOCIETY. In addition to taking the best care of the employees, the Company also fulfills disasters, contribution to build houses of gratitude; warm clothes for students
all the requirements for environment protection, sustainable development in remote and mountainous areas…which are conducted annually.
and creating jobs for farmers through farming of herbal plants. Traphaco is also
a role model for proactively engaging in humanitarian and charitable works, The budget for community activities each year is about 1-3% of revenue.
as well as appreciation activities, with the intention to contribute to a higher For 2014, the total expense for community activities is over VND20
quality standard of living and happiness for the people. Therefore, charitable billion.
and social activities have been conducted as regular, inevitable works and
warmly welcomed by the entire management team and employees.Cụ In addition to providing high quality medicines, the consultation and guide
for effective medicine consumptions are areas of services in which Traphaco
were the pioneer in and has been maintaining for many years. In 2014,
Traphaco is honored to be chosen by the Ministry of Health to be the official
sponsor of the program “The way of Vietnamese medicines “. The PR campaign
called “The way of Vietnamese medicines” was launched to propagandize,
campaign and disseminate to all subjects, so that physicians and consumers
would have the right understanding, and become more confident in the
quality of Vietnamese medicine, encourage the people to use Vietnamese
medicines, build confidence in Vietnamese medicines, and all of their values
and efficiencies while being more affordable than foreign medicines.
Given the responsibilities of an enterprise operating in healthcare sector,

over the past 15 years, Traphaco has been active in healthcare consultation
activities, distribute free medicines and Healthy Living Magazine for millions
of members of the senior citizen club – women union nationwide, especially
20 billion VND
in rural, remote and mountainous areas where people do not have sufficient TOTAL EXPENSE FOR
access to information and healthcare. In addition to Healthcare Consultation COMMUNITY ACTIVITIES
Conferences for direct end-users, Traphaco also has other conferences DURING 2014

projects, 116 of those were approved to be implemented,

to introduce the Company and sufficient information on the Company’s
products for pharmacists and sales staffs at the pharmacies and doctors at
hospitals. In 2014, Traphaco organized 363 of such conferences and seminars
(307 conferences for senior citizen clubs – women unions, 19 seminars for
11billion VND 114 projects submitted final result report, 20 projects
won prizes, the total award amount was VND500 billion.
20 individuals with excellent achievements during the
treatment facilities, 37 seminars for pharmacists). year were acknowledged at the Company’s anniversary
FOR THE WELFARE AND
ceremony and awarded with a training trip to Japan. The
BONUS FUND
For its social and charity works, Traphaco has been recognized by Company organized many sporting events and art shows special care for female employees, anti-heat in-kind
organizations and community as an enterprise with social responsibilities and such as the Company’s art show, soccer tournament, allowances, holidays and lunar new year bonus, gifts for
a “compassionate” company – “Charitable business – businessmen”. tennis tournament to enhance work-life balance of the employees who are children of war heroes and invalids,
employees, hence strengthen motivation at work. gifts for employees’ children during Mid-autumn festival,
TRAPHACO HAS BEEN RECOGNIZED THROUGH: International Children’s Day (01 June); maintained
The employees’ welfare scheme was always ensured: acknowledgment ceremony for children of employees
Acknowledgment certificate “For excellent Compensation for employees working in hazardous with excellent academic achievement…Total budget for
Top 10 notable enterprises for social
achievement in the campaign “Vietnamese environments, gas and mobile phone allowances, welfare fund in 2014 was VND11 billion.
responsibilities.
prefer using Vietnamese products”.
Education and training policies
Acknowledgment certificate “For many
Top 10 notable enterprises for community. positive and effective contributions in Traphaco’s employees are responsible for improving their skills, qualifications and capabilities to keep up with
educating and training the youths”. the growth of the Company. The human resource is considered as the vital energy of the enterprise.
Corporate social responsibility (CSR) award Acknowledgment certificate from the tax Employees in the category to be accommodated with training and education to improve their specialized skills
for environment protection. authorities. and qualifications.
For staffs who are groomed for management positions, the Company sent them to applicable professional
training programs and sponsored all training expenses.
“For community’s cultural development” Acknowledgment certificate for contribution
award. to the development of traditional medicines.
TO THE EMPLOYEES
Compensation, bonus and welfare policies
He Company has a policy to pay compensation based on

labor hour and performance:
During 2014, the Company’s management team aggressively

and bravely implemented the new sales policy, although at the
beginning of the transformation, there were great difficulties,
but by year end when the new policy had been implemented
thoroughly and effectively, the livelihood, jobs and incomes of
the employees were ensured. The compensation and bonus for
employees were paid in full and in time. As employees’ incomes
were ensured, morale was boosted, productivity was increased
and the employees started to feel more secured in their jobs.
In addition, the Company organized many contests and

campaigns with prizes and awards to motivate and encourage
the employees work hard, contribute more and be more
determined in implementing successfully the new sales
policy to achieve the Company’s objectives: Organized the
“Traphaco’s customer focus” contest, which attracted 100%
participation from the employees with over 133 registered

In 2014, the Company organized 65 training events for 2,731 employees Transparency and democracy
with a total budget of VND1.89 billion, giving priority to skillset and
motivational training for sales staffs on the new sales policy, KPI setting
and accounting…In which, soft skill and professional trainings for
1.9 billion VND Developed internal working guidelines and provided
instruction to all employees
of the collective labor agreement and the use of the
welfare fund; departmental representatives were
encouraged to voice up their opinions; at the seminars,
employees accounted for 52%, management skill trainings accounted
for 43% and the remaining 5% was for periodic training. Managers were TRAINING BUDGET IN 2014 Monthly public announcements were made on the management team addressed all questions,
sent to trainings provided by reputable domestic and international business results and the implementation of policies concerns and proposals from the employees.
organizations, customer-focus was the consistent intention for all the related to the employees’ rights and obligation. Regular
trainings throughout the organization, from management team to discussions were conducted with the Labor Union to Approved and circulated the guidelines for Traphaco’s
factory workers. align around business targets, the Enterprise’s strategy authorized representatives at subsidiaries and affiliated
and measures to achieve these targets in 2014. companies, the new salary system based on Decree
49/CP, labor policy, job descriptions for accountants at
Employee healthcare
Employee forums were also organized to: review past branches, developed guidelines for organizing Employee
year’s business results, discuss the implementation Conference, guidelines for dialogues in the workplace,…
Initial health check-ups were provided to: 1,505 employees.
The Company conducted initial healthcare and annual medical check-ups for its entire staffs.
In addition to the mandatory Health Insurance, Social Security, Unemployment Insurance, which the
Company paid in full and in strict compliance with labor laws, Traphaco has been buying physical
hazard insurance for employees since 2004.
Provided trainings on first aids and preventative measures for seasonal diseases to local sanitation
workers.
Ensure labor safety and production safety
Protective gears: two sets per person per year.
Sanitizing the working environment: 02 times per year, 04 times of spraying chloramine B at the water-
waste treatment and WC areas.
Regular safety checks for electrical equipment and machineries, new equipment for production facilities.
Regular training on GMP, Labor Safety and Sanitation.

RESPONSIBILITIES IN PRODUCT QUALITY
MANUFACTURED PRODUCTS 3 trademarks, along with 200

product labels. Traphaco brand is
Non-beta-lactam antibiotic medicines include pill, tablet, hard capsule, soft not only protected in Vietnam but
capsule, syrup, liquid solution, topical, powder, solid, eye drop and nasal also registered to be protected
spray, cream and gel. Medicines from active ingredients or herbal plants. in 10 countries such as: Japan,
U.S., Australia, Laos, Thailand,
Singapore, Malaysia, Cambodia,
China and Indonesia. 2014 was
AlWAYS ENSURING THE PRODUCTS DELIVERED TO the 6th consecutive year in which
Traphaco was granted the award
CUSTOMERS ARE SAFE AND QUALITY PRODUCTS IS THE “Top 10 leading brands in Vietnam”
PRODUCT-BASED RESPONSIBILITY, WHICH TRAPHACO HAS by Vietnam Intellectual Property
Association. Traphaco is always
ALWAYS BEEN UNDERSTAKING IN ORDER TO PROTECT THE proactive in working with the
RIGHTFUL BENEFITS OF CUSTOMERS, FROM INTERMEDIATE Inspection Agency of Ministry
of Science and Technology, to
CUSTOMERS IN THE SUPPLY CHAIN (PHARMACIES, HOSPITALS) perform strong measures against
TO END-USERS. violations trademarks and product
label designs in order to protect the
rightful interests of the consumers.
In order to ensure consumers have

Being a manufacturer and Roquette - France, Eastman-
all the basic information to select,
distributor at the same time does Estonia - USA, Merck – Germany…
consume and safely use the products,
have responsibilities which are not In addition, the Company also has
from packaging, labeling, and
apparent: the tangible value that Asian suppliers such as South Korea,
writing instruction, Traphaco always
we bring such as good quality and Japan, China…
ensure all necessary information is
highly effective medicines, as well as
provided on the products, such as
intangible value such as the privilege Most of the Company’s suppliers
ingredients, dosage forms, effects,
of consuming protected products, are long-term partners with long-
benefits of products, side effects
responsibilities to provide sufficient standing business relationships with
or caution about usage. Each year,
and appropriate information, Traphaco.
Traphaco organized, solely or in
responsibilities to the workers and INTELLECTUAL PROPERTY partnership with media outlets,
environment in the production of Because of the unique characteristics AND INVESTMENT IN BRAND healthcare consultation activities
those products (ISO, GPs)… of domestic production, the quality BUILDING to help consumers distinguish
of the raw materials depends largely
between protected products
RAW MATERIAL SUPPLY on external factors such as weather, INTELLECTUAL PROPERTY and unhealthily competitive
Given our strength in Traditional
seasonality, geographic location,
as well as the farming techniques TOP10 Understanding that it is the
products, organized seminars with
professional associations to provide
medicines, most of the Company’s of the farmers. However, compared consumers’ right to be able to detailed and timely information
raw materials come from herbal to other traditional medicine use protected products and it about the Company, our products as
plants which were grown and manufacturers, Traphaco has clear is necessary to help consumers well as our sustainable development
harvested by GACP standards advantages in terms of raw material identify protected products, hence strategy based on respect for the
(90%). The remaining (10%) raw supply, including weather advantage become loyal customers of those well-being and safety of customers,
materials used for producing of being based in the North (which products, the Company has been help customers understand more
Western medicines were imported is more conducive to grow and actively engaging in intellectually about GACP and clean Vietnamese
directly from branded and reputable expand certain unique medicinal TOP 10 LEADING BRANDS
property protection and up until herbal ingredients, the value of
international manufacturers and plants) and transportation/logistical IN VIETNAM
now has owned exclusively 10 clean herbal ingredients produced
distributors such as: Univar – UK, and procurement advantages. patents and industrial design, by the farmers for safe consumption.

RESPONSIBILITIES IN PRODUCT QUALITY (continued)
During the campaign “Vietnamese a mission to care the health of recognition while maintaining high Highlighted Products
prefer using Vietnamese medicines” the community. The Company level of revenue and profit is not an
by Ministry of Health, Traphaco was not only strives to meet the high easy task. This system of activities is Clinical trials on patients with chronic liver
the only enterprise to be selected technical requirement, high called IMC – Integrated Marketing infection at Thai Binh General Hospital (In Duong Assessment of clinical effects by Duong cot
as the Sponsor of the PR campaign standards of product quality Communication – a full-force April 2011, the project “Research to produce the cot hoan on elderly patients with osteoporosis
“The Way of Vietnamese Medicine”, and function, but also creates a Marketing dialogue – has been set Boganic liver-detoxicating Boganic from Vietnamese hoan at Vietnam-USSR Friendship Hospital.
to help raise awareness for people credible and familiar image to up and implemented gradually medicinal herbs” by Traphaco won the first
to use locally-produced medicine, customers. With those objectives, within the Company’s development prize by the Vietnam Fund for Supporting Sang
at the same time, enhance the role over the past years, the Company strategy. Technological Creations – VIFOTEC). Research on clinical effects by Bright eye pill
mat
and responsibility of the medicine conducted many activities to in treatments of various eye diseases at the
vien
practitioners in prescribing safe and within its brand building and In addition, Traphaco is one of the Hoat Assessment of clinical effects by Hoat huyet Central Traditional Medicine Hospital.
nang
effective use of medicine. promoting strategy. pioneers in creating a company huyet duong nao on patients with cerebral flood
logo to distinguish itself in the eyes duong flow degeneration and Parkinson diseases at
INVESTMENT IN BRAND BUILDING In a context of fierce competition, of consumers through illustrating nao Military 103 and 108 Hospitals.
Bat Assessment of clinical effects by bat vi
a brand building strategy to the Company’s unique corporate
Clinical trials at gastroenterology department at vi que phu pills on patients with back pains
Traphaco’s strategic direction is access and attract customers in a culture.
Bach Mai General Hospital, the Central Traditional que associated with kidney failure at the Central
to become a public brand, an convincing way through increasing
Ampelop Medicine Hospital, Thanh Hoa General Hospital, Ha phu Traditional Medicine Institute.
enterprise for consumers with product brand awareness and With the pioneering steps in
restructuring and investments in Tay General Hospital, gastroenterology department E
technology, Traphaco continues Hospital, gastroenterology department, 108 Hospital.
to establish itself as “the Leading
Brand in the pharmaceutical industry” INVESTMENT IN SCIENCE AND TECHNOLOGY
and is proudly recognized by
the Government of Vietnam as a With the motto “science-technology as the core, market as the direction, growth
“National Brand”. as the motivation, quality as the commitment to customers”, the strategy of
industrializing and modernizing production processes has always manifested
IN-DEPTH RESEARCH in the Company’s scientific and technological missions. Traphaco currently
employs production processes using modern technology, which are in
In combining science with practice compliance with GPs standards from WHO (GMP, GSP, GLP, GDP), ISO 9001:2000,
and employing a humanitarian ISO14001:2004 standards, 5S KAIZEN from Japan and KPI management system.
scientific approach, Traphaco’s
products from herbal plants are
not only the result of State and
Ministry-level research projects, but
also from the traditional medical
knowledge which has been used
for thousands of years. In parallel
to modernization, Traphaco
confirmed effectiveness, safety
WITH THE PIONEERING STEPS IN RESTRUCTURING AND and quality of its products through
conducting clinical trials and
INVESTMENTS IN TECHNOLOGY, TRAPHACO CONTINUES toxicity tests in cooperation with
TO ESTABLISH ITSELF AS “THE LEADING BRAND IN THE major hospitals such as K Hospital,
108 Military General Hospital, Bach
PHARMACEUTICAL INDUSTRY” AND PROUDLY RECOGNIZED BY Mai General Hospital, Friendship
THE GOVERNMENT OF VIETNAM AS A “NATIONAL BRAND”. Hospital, etc..

ensuring that their sourcing practices promote the conservation of biodiversity, respect
827 ha
traditional knowledge and assure the equitable sharing of benefits all along the supply chain.
Traphaco also coordinated with scientists to screen and select the most effective medicine
formulae.
OF FARMING AREAS On“the Way of Green Health”, Traphaco applies green technology (technology with minimum
FOR MEDICINAL impacts on the environment) in extraction and manufacturing through optimizing processes
PLANTS WHICH ARE to reduce energy consumption (electricity, coal) and minimizing the use of inorganic
PLANTED, MONITORED solvents, reducing dust emissions, at the same time enhancing environmental performance
AND HARVESTED of the company through increasing packing productivity, automation and replacement
BASED ON GACP-WHO of hazardous materials, reducing cost and optimizing the efficiency of extracting active
STANDARDS ingredients and ensuring product safety as well as ensuring a good working environment for
the Company’s employees: 40% green coverage for the factories.
The Company has conducted dozens of research projects on medicines from herbal plants, 2
The Company has always prioritized the use of chemicals and pesticides, State-level projects in utilizing the gene pools of two important medicinal plants Dioscorea
R&D (research and development) selecting the areas with clean soil and persimilis and Rhizoma Dioscorea persimilis; improving the production technology for
TRAPHACO SAPA
BECAME A MEMBER
OF THE UNION FOR
activities. Over the recent years,
Traphaco has invested heavily its
human and financial resources in R&D
activities, with the intention to establish
water and good irrigation conditions to
ensure the supply of safe ingredients.
By September 2014, Traphaco has
827 ha of farming areas for medicinal
04 MEDICINAL
PLANTS
Cebraton soft capsule;…Currently the top 10 products of Traphaco, accounting for 80%
of revenue, were the results of in-house scientific research and production technology
improvement projects.
Traphaco brand as the leader in research plants which are planted, monitored Notable projects:
ETHICAL BIOTRADE (UEBT) WHICH HAD BEEN
and development of medicines from and harvested based on GACP-WHO RECOGNIZED BY
WITH COMMITMENTS TO Boganic: Funded by the Ministry of Science and Technology, Key State-level key science
herbal ingredients, specifically: standards, 04 medicinal plants which THE SELECTION & technology Program, KC10.DA09/06-10. Won the 2010 Vietnam Science and Technology
GRADUALLY ENSURING had been recognized by the Traditional COMMITTEE – Innovation Award (First prize VIFOTEC award for the project “Research to produce the liver-
As the pioneer in developing farming Medicine Administration – Ministry MINISTRY OF HEALTH
THAT THEIR SOURCING detoxicating Boganic from Vietnamese medicinal herbs”).
areas of medicinal plants in compliance of Health as GACP-WHO certified AS GACP-WHO
PRACTICES PROMOTE with GACP-WHO standard (good including Artichoke, Polyscias fruticosa, CERTIFIED INCLUDING Ampelop: State-level scientific research project Code. KC.10.DA.11 “Improving the
practice for cultivation and collection Convolvulaceae and Molluginaceae. ARTICHOKE, production process of Ampelop to produce treatment medicine for gastro and duodenal
THE CONSERVATION OF of medicinal plants as recommended The percentage of main herbal POLYSCIAS FRUTICOSA, disorders”. Ministry of Science and Technology, 2006. Ampelop, State-level scientific research
BIODIVERSITY, RESPECT by the World Health Organization), ingredients, which Traphaco could CONVOLVULACEAE project “Safe cultivation of Ampelopsis for the production of Ampelop and other finished
Traphaco has produced reputable and reliably secure, out of the total herbal AND MOLLUGINACEAE. products to prevent and treat gastricitis and duodenitis”. Ministry of Science and Technology,
TRADITIONAL KNOWLEDGE quality products, at the same time ingredient inputs for production is 90%. 2007.
AND ASSURE THE enhanced the Company’s brand value. At the same time, Traphaco has created
The Company is working closely with jobs and stable incomes for hundreds Bat vi que phu: Ministry-level scientific research project “Research to produce Aconite and
EQUITABLE SHARING OF farmers and local regulatory authorities of households, this is a business model condensed-Aconite from Aconitum tree in Sapa as an ingredient to produce Bat Vi Que Phu”.
BENEFITS ALL ALONG THE as well as scientists in researching for in cooperation with low-income
seeds and developing GACP-WHO families, which is of great interest to Cebraton – Hoat huyet duong nao: Approved by Ministry of Industry and Trade (within
SUPPLY CHAIN. qualified farming processes, which are many countries in the world. As such, the national scientific research program to develop the pharmacological technology from
environment-friendly such as using rare Traphaco sapa became a member of now to 2020) project ”Enhance the production process for the soft-capsule Cebraton” (higher
earth to minimize the use of inorganic the union for ethical biotrade (UEBT) dosage, more modern, easier to use, faster – stronger effect). Coded: 007/2011/HĐ-DACNHD.
fertilizer, rotational farming to eliminate with commitments to gradually

PRODUCT AND SERVICE QUALITY CONTROL PROCESS
Understanding the importance of stage to distribution stage. The WHO GMP/GLP/GSP (certified by the The company encourages and facilitates for staffs In general, all products are Traphaco must undergo
product quality control, Traphaco set quality control system is regularly Drug Administration of Vietnam), within these two function hone and update advanced a rigorous quality inspection process both in terms
up and effectively applied a quality updated and upgraded to be in ISO 9001:2008 (certified by Bureau knowledge in product quality management, in order labeling and packaging, before being distributed to
control system from production compliance with GPs standards from Veritas). to best ensure the quality of each medicinal pill before the market. The company’s quality assurance processes
reaching the hands of the consumers. is illustrated through the following diagram:
The Company’s quality control system is illustrated in the following flowchart:
QUALITY ASSURANCE SYSTEM FLOWCHART

QUALITY CONTROL SYSTEM FLOWCHART
INGREDIENTS
PHARMACEUTICAL GUIDELINE SYSTEM QUALITY POLICY GPs INSTRUCTION
SAMPLE STORAGE ANTIGEN INGREDIENTS

GMP
UNQUALIFIED (DISCARDED) QUALIFIED (ACCEPTED)
GLP
PRODUCTION ORDER GSP
QUALITY CONTROL SYSTEM
DISCARDED PRODUCTION GDP
RECYCLED
QUALITY CONTROL
QUALITY CONTROL
RE-TESTING HALF-FINISHED PRODUCT SAMPLE STORAGE ANTIGEN HALF-FINISHED PRODUCTS
QUALITY ASSURANCE QUALITY TESTING
UNQUALIFIED QUALIFIED (ACCEPTED)
TECHNICAL PLANNING – RESEARCH AND PACKAGING

DISTRIBUTION PRODUCTION
EQUIPMENTS PROCUREMENT DEVELOPMENT
FINISHED PRODUCT SAMPLE STORAGE ANTIGEN FINISHED PRODUCTS

Note:
Direct UNQUALIFIED QUALIFIED (ACCEPTED)
As illustrated in the above chart, the Company’s responsible for testing quality of ingredients, input OUTPUT
quality control system is consisted two functions: packaging, half-finished products, finished goods,
Quality Assurance function and Quality Testing assessing the stability of the medicines, environment
function. testing… to ensure that the finished products meet all DISTRIBUTION
the registered standards.
Quality assurance function (QA): is tasked with
managing systematically all functions related to the The quality assurance and testing functions operate In order to meeting the requirement for sufficiency, timeliness and accuracy of the testing activities, the Company has
quality of the products. independent of each other (except for certain purchases modern and suitable analytic equipment, which are properly installed and set up. All the testing equipment
coordination during the assurance and control are operated, appraised/fine-tuned according to approved processes.
Quality testing function (QT): is GLP certified and processes) and independent of production system.

RESPONSIBILITIES IN PRODUCT QUALITY (continued) VALUE CHAIN MANAGEMENT
HANDLING OF PRODUCT INQUIRIES AND COMPLAINTS
Receiving inquiries and complaints is the responsibility treatment, mixing of medicines…), retail and wholesale
of every employee at Traphaco, which is stipulated in the pharmacies (on the policies, pricing, GACP…) or doctors
Process to handle inquiries and complaints circulated by and physicians (on therapeutic information, points of
the Company. Not only product inquiries and complaints sale),…in many forms: direct conversation, through
are received, Traphaco also addresses inquiries and sale reps, marketing staffs, or calls to customer care call
complaints regarding services and policies. center, letters, email, online interactions on website,
fanpage…Depending on the complaints, the Company
The Company also proactively measures customers’ either addresses immediate or set up a committee to
satisfaction to fix the outstanding issues in a timely review, delegates a staff to resolve right away or reports
manner and improve customers’ satisfaction. to relevant regulatory authorities.
The Company obtains feedbacks from every customers The Company discloses in a timely fashion information
from end-users (on dosage, instruction, frequency of regarding misunderstanding about its products.
PRODUCT RECALL
The Company recalls defect products (in terms of and submit proposal to recall products, announces the
packaging and presentation, information in the recall of products, recalls all products, archives relevant
packaging, manner of packaging, product presentation documents. Subsequently, the Company take remedial
or other defects including products manufactured or and preventative actions at relevant departments.
distributed by the Company when customers discover
from the sale reps or stability monitoring staffs, market For cases in which consumers’ health is at stake, the
monitor staffs or regulatory authorities. Company will immediately notifies through telephones
In order to secure its raw material training farmers on cultivation and
all distribution outlets and through other media
supply, the Company employs a processing techniques derived
The Company sends its designated staffs or coordinates outlets…to send the messages to the end-users, at the
long term cooperation principle to from those scientific research. This
with the distributors, specialists to investigate in parallel same time submits reports to regulatory authorities.
establish a strong position vis-a-vis program has set up a number
its raw material suppliers. Specifically, of farming areas which produce
the Export/Import – Procurement standardized qualify ingredients
Department has developed a such as Ampelopsis in Lao Cai,
Standard Operating Procedure Polyscias fruticosa in Nam Dinh,
(SOP) for selecting suppliers and Artichoke in Sapa, Molluginaceae
vendors for the Company, based in Phu Yen and Convolvulaceae in
on which long term suppliers Hoa Binh…etc. Developing farming
are selected. Depending on the areas help the Company secure the
harvest time of the ingredients, the supply for 90% of its raw material
Company signs 3-5 years contract need, ensuring stable price, volume
with the suppliers, at the same and quality for its inputs.
time signs principle contracts
which specify volume by year with In addition, in 2014, the Company
international counterparts. This equipped tablets for its sales staffs
practice also helps suppliers have and installed the sales management
more predictability to production software system, DMS, for its entire THE COMPANY COULD
and sales. distribution network. As such, sales PROCURE ITSELF
staffs could receive orders online
In addition to signing long-term
raw material supply contracts with
suppliers, Traphaco also has a long
term outlook for developing a
from customers and transfer back
to distribution centers in each
province/city quickly and timely
(sales orders are now delivered to
90 %
stable supply through organizing customers in less than 36 hours OF TOTAL RAW MATERIAL
geological research projects and nationwide). NEEDS

INVIRONMENT-IMPACT REPORT
Traphaco Joint Stock Company has a system of modern certified laboratories. The Company has also received
warehouses and production lines, advanced technology award for corporate social responsibility in the area of
with GMP-WHO, GLP, GSP accreditations granted by environment protection (CSR award Vietnam).
the Drug Administration of Vietnam; an ISO 9001:2008
certified quality control system, an ISO 14001:2010 Total area: 10,000 m2 (the factory in Ngoc Hoi lane, Hoang
certified environment impact control system and GLP- Liet ward, Hoang Mai district, Hanoi).
CONSUMPTION OF WATER, ELECTRICITY AND PAPER
During 2014, total electricity consumption for offices declined by 6% compared to 2013, maintained water and electricity
conservation, stabilized the water and electricity consumption in production, paper consumption for the whole Company.
Expense
Consumption
Indicators per year Measures to reduce consumption/cut costs
per year
(VND mill)
• Using LED lighting system in replacement of fluorescent lighting system
• Using modern production lines and technology which consume less
energy and with less impact on the environment.
Electricity 2,632,280 kW 4,600
• Raising awareness in conserving electricity in production among employees
• Arranging shifts more appropriately to reduce waste in operating the
backup system of GMP factories.
• Practicing water conservation by each employee.
• Optimizing processes for: cleaning tubes and bottles, machineries and warehouses
• Using the after-treatment water for the right purposes: RO water, distilled
water for production
• Maintaining water pipeline system to all areas, installing new odometers
water 19,964 m3 189
which have been inspected by the city water authority
• Upgrading the water purification system to increase purification efficiency
and reduce waste water.
EMISSION
• Increasing lot size, maintaining planned production for sales campaign –
reducing the number of cleaning per product transfer. Emission from the production process is mainly dust: is Company has an active plan in place to re-arrange the
• Recycling one-sided paper handled through the GMP-WHO-certified air treatment production schedule as soon as we notice the outage.
systems (HVAC). When the system operates, it takes in
• Using the internal document management system: converting to elec-
paper 1,682 ram 80 air from the external environment around the plant, Emissions from local air conditioning system: the
tronic means for communication…
the air will follow pipes to the processing system (the Company’s energy conservation practice includes
• Minimizing the use of paper during meetings. AHU), which includes 3 filtration stages: pre- filter - guidelines on occasions, operating time, the minimum
intermediate - refined filter; it is a circulatory system, outdoor temperature, entering and leaving air-
meaning when air is added to the production room, an conditioned rooms... for every function, department,
equivalent amount of air is taken from the production and employee.
room back through the pipes to the membrane and
sucked out through the venting system. Emission from the transporting vehicles to the factories
(employees’ vehicles, trucks to transport materials
Emission from laboratories will be processed through and products to and from the facilities) is minimized,
the HOOD cabinet system, which is a system that will controlled by measures:
neutralize and absorb the emission two times through
absorbing solution and charcoal treatment tower, » Watering to moisture the wall during dry days.
output air therefore is not harmful to the environment.
» Setting environment-protection commitments with
Emission from generators: only use generators in contracts, according which there are guidelines for
emergency situations such as power failures, power vehicles to transport materials and products to and
outages. To ensure energy saving, emission reduction, the from the Company’s facilities.

ENVIRONMENT-IMPACT REPORT (continued)
SEWAGE WATER
C Value (QCVN
Analysis
No. Unit Sample 1 Sample 2 Sample 3 Sample 4 40:2011/ BTNMT,
Waste water from daily activities: transferred to septic tank, then to water Indicator
column B)
treatment system along with waste water from production.
17. Mercury mg/L 0.0008 KPHĐ <0.0002 0.0002 ≤ 0.01
Waste water from production: All waste water generated from production process
is collected to the central waste water treatment system, which is QCVN 40: 2011/ 18. Nickel mg/L 0.0073 KPHĐ <0.001 0.0021 ≤ 0.4
BTNMT-certified before being discharged to the sewer system of the city.
19. Chloride mg/L 31.3 34.03 ≤ 1000
Table 1: Analysis results of waste water sample (coordinates of the sampling
location: 20057’44’’; 105050’43’’) MPN/
20. Coliforms 9 30 200 9.3x102 5000
100mL
C Value (QCVN 21. Fluoride mg/L 0.03 KPHĐ <0.1 10

Analysis
No. Unit Sample 1 Sample 2 Sample 3 Sample 4 40:2011/ BTNMT,
Indicator Sulfur (calculated
column B) 22. mg/L 0.17 <0.05 <0.04 0.5
based on H2S)
Sampling date 19/03/2014 20/06/2014 8/9/2014 10/10/2014
23. Phenol mg/L KPHĐ <0.001 0.5
Result date 2/4/2014 3/7/2014 23/09/2014 20/01/2015
(Source: Environment Assessment Result Report at Hoang Liet Factory - 2014)
1. pH
- 7.92 6.04 7.2 8.05 5.5 – 9
Assessment: Waste water sample at final discharge point before being discharged
2. COD
mg/L 19.68 6.7 9 21.2 ≤ 150 into the environment taken at the time of the year meets QCVN 40: 2011/BTNMT
standards for industrial waste water.
3. BOD
5 mg/L 12.07 2.1 1 14.8 ≤ 50
Suspended SOLID WASTE

4. mg/L 16.6 11 4 13 ≤ 100
solids (SS)
Regular solid waste in 2014 includes:
5. Total
nitrogen mg/L 4.04 3.11 1.9 3.15 ≤ 40
» Waste from daily activities 9,600 kg per annum.
Total
phosphorous » Recycled waste includes discarded materials, packing carton; the amount of
6. mg/L 0.15 - 0.44 0.12 ≤6
(calculated waste is about 36.642 million kg / year is managed by following measures:
based on P)
7. Cyanide
mg/L <0.05 <0.002 0.02 ≤ 0.1 • Sorting at source: dissemination and implementation of provisions
to classify waste as either waste scrap and disposed waste to each
8. Mineral
oil mg/L 3.2 KPHĐ 1.2 <3 ≤ 10 department and function.
9. Ammonium
(N) mg/L 1.82 0.42 0.42 1.68 ≤10 • Bins are put in discharge places and convenient for classification and
storage. Over 70% of waste is usually classified as waste scrap, contributing
10. Arsenic mg/L 0.0121 0.0013 0.002 0.0026 ≤ 0.1 to minimizing environmental impact.
11. Lead mg/L 0.0097 KPHĐ 0.005 0.0036 ≤ 0.5 • Perform regular transport of normal and recyclable waste as per the
Company’s guidelines.
12. Manganese mg/L 0.153 0.063 0.006 <0.005 ≤1
Signs contract to handle recycled waste with Tien Dung Investment Limited
13. Copper mg/L 0.018 0.023 0.017 0.005 ≤2 Liabilities Company.
14. Iron mg/L 0.09 0.255 0.09 0.24 ≤5 Signs contract to handle daily waste with Kim Thuy private company.
15. Cadmium mg/L 0.0012 KPHĐ <0.0002 0.0003 ≤ 0.1
16. Zinc mg/L 0.116 0.248 0.045 0.178 ≤3

Hazardous waste: the Company fully complies with Government’s guidelines for
Form Average volume Hazardous waste
handling hazardous waste: No. Waste
(solid/liquid/sludge) (kg/year) code
» Regularly collecting, sorting, storing waste in separate containers, with proper Discarded chemicals and chemical
identification of hazardous waste codes as prescribed by Circular 12/2011 13 mixtures from lab rooms which contain solid/liquid 96 19 05 02
/ BTNMT 14/04/2011. The regulations, guidelines were disseminated to all hazardous components
employees in the Company.
Total amount 1,152 (kg)
» Storage places have roofs, walls, door locks and appropriate warning signs
according to TCVN 6707: 2009. (Source: Master hazardous waste discharge book Traphaco JSC 01.000054T issued the 3rd time 26 November 2014)
» Assigning specific function to be responsible for monitoring and management NOISE AND VIBRATION
of hazardous waste and daily waste within the Company.
* Sources
» Performing contract with Urban Environment and Industries 10 JSC - Urenco10
to transport and handle hazardous waste periodically. Operation of machineries and equipment in the production lines. Currently, the Company has used modern
machineries and technology, therefore the impacts due to noise from the equipment has been significantly
Table 2: List of approved regularly discharged hazardous waste reduced.
According to the results from monitoring the working environment, noise level is in the range from 64.5 to
Form Average volume Hazardous waste
No. Waste 84.5 dBA and lower than the allowed standards. Therefore, noise in the production process does not adversely
(solid/liquid/sludge) (kg/year) code
affect workers’ health.
Sludge with hazardous components
1 Sludge 60 03 05 08 * Measures to control/mitigate
from the waste water treatment process
Solid wastes containing hazardous In order to ensure noise level is within the allowed standards and factory workers’ health is protected, the Company
2 Solid 120 03 05 09
components has implemented the following measures to reduce noises and vibration:
08 02 04 » Design muffler parts when installing machineries and equipment.
Discarded ink toner box with the
3 Solid 24
hazardous components
» Installs anti-vibration cushions for machines which make noises and vibrate
Charcoal used from emission treatment » Periodically maintain equipment (especially equipment which require regular maintenance)
4 Solid 96 12 01 04
process
» Measure corrosion, lubricate or replace parts (if necessary)
Discarded fluorescent lightbulbs and
5 Solid 24 16 01 06
the activated glasses » Provide protection gears to workers.
6 Discarded batteries Solid 24 16 01 12
Discarded engine oils, gear and other

7 Liquid 48 17 02 04
lubricants
8 Discarded soft packaging Solid 132 18 01 01
9 Discarded rigid metal packaging Solid 12 18 01 02
10 Discarded rigid plastic packaging Solid 24 18 01 03
Discarded rigid packaging of other

11 Solid 444 18 01 04
materials (glass,…)
Rags and protection cloths
12 contaminated by hazardous Solid 48 18 02 01
components

MONITORING OF THE WORKING ENVIRONMENT POLICIES FOR ENVIRONMENT POLUTION PROTECTION,

SAFETY AND RISK CONTROL
Sample date: 20 June 2014 Sample date 10 Oct 2014
TRAPHACO strictly adheres to anti-pollution regulations based on ISO 9001:2008, ISO
Result date: 03 July 2014 Result date 20 January 2015
Comparison 14001 and GMP, GLP and GSP standards.
Indicator Unit Value Bordering Water Bordering Waste water
basis Soft capsule Liquid medicine
location treatment location treatment Identifies threats, unsafe practices, risks in environment management and puts into
workshop workshop training and response drills.
(gate) area (staircase) area
Temperature C degree QCVN 26- - 31.7 32 31.9 24.5 26.7 22.9 Implements pollution prevention and environmental protection according to the
2010/BTNMT detailed environmental protection project approved in Decision No. 42 / QD-STNMT by
Moisture % - 65.3 68.7 67.2 61.2 69 55.4
the Department of Natural Resources and Environment of Hanoi on 01/25/2013.
Wind Speed m/s (from 6am - 0.21-1.02 0.41-1.12 0.19-0.98 0.5 0.5 0.24
– 9pm), » Conducts environmental monitoring twice annually. The results of monitoring of
Noise dBA 3733/2002 85 69.3 62.1 60.9 78 60.7 71.4 environmental quality is assessed according to current Vietnam standards (TCVN) and
QĐ-BYT regulations Vietnam (QCVN).
Dust µg/m3 300 297 255 243
» Waste water quality assessment: once every 3 months on all required criteria.
SO2 µg/m3 QCVN 350 154 149 150 ND 32 ND
05:2013/BT-
NO2 µg/m3 200 45 48 51 ND 176 ND ASSESSMENT OF COMPLIANCE WITH LEGAL REQUIREMENTS
NMT
CO µg/m3 30000 1280 1175 1153 ND 355 ND Assign staffs to survey and update the legal requirements being implemented at the
Company.
(Source: Environment survey result report Hoang Liet factory – 2014)
Ensure compliance with all relevant legal requirements.
Note:
ND : Not discernable
- : Note regulated
Assessment: At each observation time, the micro-climate indicators and toxic air measurements at the observation locations
were within the permissible limits of QCVN 05: 2013 / BTNMT and QCVN26: 2010 (from 6am – 9pm), and achieved levels
permitted under labor hygiene standards of Decision 3733/2002 / QD-BYT.

DEVELOPMENT
from WIN-WIN PRINCIPLE
FINANCIAL REPORTS
Report by the General Director
Independent Auditor’s Report
Consolidated balance sheet
Consolidated Income Statement
Consolidated Cash Flow Statement
Notes to the consolidated financial statements
STATEMENT OF THE BOARD OF DIRECTORS
The Board of Directors of Traphaco Joint Stock Company (the “Company”) presents this report together with the Company’s
consolidated financial statements for the year ended 31 December 2014.
THE BOARDS OF MANAGEMENT AND DIRECTORS
The members of the Boards of Management and Directors of the Company who held office during the year and to the date of this report
are as follows:
TRAPHACO JOINT STOCK COMPANY
(Incorporated in the Socialist Republic of Vietnam) Board of Management
Ms. Vu Thi Thuan Chairwoman

AUDITED CONSOLIDATED FINANCIAL STATEMENTS
Mr. Tran Tuc Ma Vice Chairman
FOR THE YEAR ENDED 31 DECEMBER 2014
Mr. Nong Huu Duc Member
March 2015 Mr. Le Tuan Member
Ms. Nguyen Thi Lan Member
Mr. Tran Manh Huu Member (appointed on 07 March 2014)
Mr. Phan Quoc Cong Member (appointed on 28 March 2014)
TABLE OF CONTENTS
Board of Directors
CONTENTS PAGE(S)
Mr. Tran Tuc Ma General Director
Mr. Nguyen Huy Van Deputy General Director
STATEMENT OF THE BOARD OF DIRECTORS 113
Ms. Hoang Thi Ruoc Deputy General Director
Ms. Nguyen Thi Lan Deputy General Director (appointed on 8 September 2014)
INDEPENDENT AUDITORS’ REPORT 114
BOARD OF DIRECTORS’ STATEMENT OF RESPONSIBILITY
CONSOLIDATED BALANCE SHEET 115 - 116 The Board of Directors of the Company is responsible for preparing the consolidated financial statements, which give a true and
fair view of the financial position of the Company and of its results and cash flows for the year, in accordance with Vietnamese
accounting standards, accounting regime for enterprises and legal regulations relating to financial reporting. In preparing these
CONSOLIDATED INCOME STATEMENT 117
consolidated financial statements, the Board of Directors is required to:
» make judgments and estimates that are reasonable and prudent;
CONSOLIDATED CASH FLOW STATEMENT 118
» select suitable accounting policies and then apply them consistently;
» state whether applicable accounting principles have been followed, subject to any material departures disclosed and explained
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 119 - 138 in the consolidated financial statements;
» prepare the consolidated 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 consolidated
financial statements so as to minimize errors and frauds.
The Board of 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 and that the consolidated financial statements comply with
Vietnamese accounting standards, accounting regime for enterprises and legal regulations relating to financial reporting. The
Board of Directors is also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the
prevention and detection of frauds and other irregularities.
The Board of Directors confirms that the Company has complied with the above requirements in preparing these consolidated
financial statements.
For and on behalf of the Board of Directors,
Tran Tuc Ma
General Director
06 March 2015
112 ANNUAL REPORT 2014 CONSOLIDATED FINANCIAL STATEMENTS 113
CONSOLIDATED BALANCE SHEET
INDEPENDENT AUDITORS’ REPORT As at 31 December 2014
FORM B 01-DN/HN
Unit: VND
ASSETS Codes Notes 31/12/2014 31/12/2013
No.: 658/VN1A-HN-BC
A. CURRENT ASSETS (100 = 110+120+130+140+150) 100 803,375,163,715 776,212,347,308
I. Cash and cash equivalents 110 5 292,169,010,449 256,584,762,183
To: The shareholders
The Board of Management and Board of Directors 1. Cash 111 97,169,010,449 96,084,762,183
Traphaco Joint Stock Company 2. Cash equivalents 112 195,000,000,000 160,500,000,000
We have audited the accompanying consolidated financial statements of Traphaco Joint Stock Company (the “Company”), prepared II. Short-term investment 120 1,988,845,000 256,983,146
on 6 March 2015, as set out from page 115 to page 138, which comprise the consolidated balance sheet as at 31 December 2014,
1. Short-term investment 121 1,988,845,000 256,983,146
and the consolidated statement of income, and consolidated statement of cash flows for the year then ended, and a summary of
significant accounting policies and other explanatory information (collectively referred to as the “consolidated financial statements”). III. Short-term receivables 130 223,298,407,001 240,161,029,284
Management’s Responsibility for the Consolidated Financial Statements 1. Trade accounts receivable 131 182,470,133,670 218,106,878,513
2. Advances to suppliers 132 32,850,665,248 18,015,319,301
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with
Vietnamese accounting standards, accounting regime for enterprises and legal regulations relating to financial reporting and for 3. Other receivables 135 12,213,414,669 11,071,518,583
such internal control as management determines is necessary to enable the preparation of consolidated financial statements that 4. Provision for short-term doubtful debts 139 (4,235,806,586) (7,032,687,113)
are free from material misstatement, whether due to fraud or error.
IV. Inventories 140 6 264,740,415,866 263,884,036,371
Auditors’ Responsibility
1. Inventories 141 265,376,881,292 264,568,685,236
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit 2. Provision for devaluation of inventories 149 (636,465,426) (684,648,865)
in accordance with Vietnamese Standards on Auditing. Those standards require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material V. Other short-term assets 150 21,178,485,399 15,325,536,324
misstatement. 1. Short-term prepayments 151 2,615,021,410 3,178,813,956
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated 2. Value added tax deductibles 152 5,292,488,599 5,933,223,534
financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material 3. Taxes and other receivables from the State budget 154 752,607,942 1,387,567,546
misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditors
consider internal control relevant to the Company’s preparation and fair presentation of the consolidated financial statements in 4. Other short-term assets 158 7 12,518,367,448 4,825,931,288
order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
B. NON-CURRENT ASSETS (200=220+250+260+269) 200 328,674,268,205 311,502,313,944
the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the I. Fixed assets 220 283,199,321,367 265,228,485,766
consolidated financial statements.
1. Tangible fixed assets 221 8 198,372,415,569 188,072,342,095
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. - Cost 222 371,948,373,887 338,048,992,141
Opinion - Accumulated depreciation 223 (173,575,958,318) (149,976,650,046)

2. Intangible assets 227 9 37,297,899,658 28,412,121,582
In our opinion, the accompanying consolidated financial statements give a true and fair view of, in all material respects, the financial
position of the Company as at 31 December 2014 and the results of its operations and its cash flows for the year then ended in - Cost 228 38,857,990,745 29,637,105,733
accordance with Vietnamese accounting standards, accounting regime for enterprises and legal regulations relating to financial
- Accumulated amortisation 229 (1,560,091,087) (1,224,984,151)
reporting.
3. Construction in progress 230 10 47,529,006,140 48,744,022,089
II. Long-term financial investments 250 6,528,078,540 6,190,480,105
1. Investments in associates 252 12 6,028,078,540 5,690,480,105
2. Other long-term investments 258 500,000,000 500,000,000
III. Other long-term assets 260 6,029,742,487 2,510,036,332
1. Long-term prepayments 261 3,996,424,658 1,786,977,337
Dang Chi Dung Do Trung Kien
Deputy General Director Auditorn 2. Deferred tax assets 262 1,051,003,719 723,058,995
Audit Practising Registration Certificate Audit Practising Registration Certificate
3. Other long-term assets 268 982,314,110 -
No. 0030-2013-001-1 No. 1924-2013-001-1
For and on behalf of IV. Goodwill 269 32,917,125,811 37,573,311,741
DELOITTE VIETNAM COMPANY LIMITED
06 March 2015 TOTAL ASSETS (270=100+200) 270 1,132,049,431,920 1,087,714,661,252
Hanoi, S.R. Vietnam
The notes set out on pages 119 to 138 are an integral part of these consolidated financial statements
CONSOLIDATED BALANCE SHEET CONSOLIDATED INCOME STATEMENT
As at 31 December 2014 For the year ended 31 December 2014
FORM B 01-DN/HN FORM B 02-DN/HN

Unit: VND Unit: VND
RESOURCES Codes Notes 31/12/2014 31/12/2013 ITEMS Codes Notes 2014 2013
A. LIABILITIES (300=310+330) 300 261,287,002,621 334,741,827,599
1. Gross sales 01 18 1,660,275,159,181 1,691,084,220,534
I. Current liabilities 310 261,111,002,621 333,610,322,421
2. Deductions 02 9,553,337,567 8,720,094,110
1. Short-term loans and liabilities 311 13 34,437,749,427 114,061,473,364
3. Net sales (10=01-02) 10 1,650,721,821,614 1,682,364,126,424
2. Trade accounts payable 312 126,292,508,292 116,900,152,262
3. Advances from customers 313 1,343,068,441 506,622,737 4. Cost of sales 11 19 936,340,734,687 961,230,322,194
4. Taxes and amounts payable to the State budget 314 14 35,783,630,767 43,079,627,098 5. Gross profit from sales (20=10-11) 20 714,381,086,927 721,133,804,230
5. Payables to employees 315 33,903,689,496 32,918,844,609 6. Financial income 21 20 5,495,740,891 5,617,837,404
6. Accrued expenses 316 15 12,955,005,299 10,734,319,616
7. Financial expenses 22 21 45,283,528,203 22,126,999,958
7. Other current payables 319 16 12,473,865,180 11,897,967,693
Including: Interest expense 23 3,913,566,637 20,612,227,436
8. Bonus and welfare fund 323 3,921,485,719 3,511,315,042
8. Selling expenses 24 331,656,848,718 341,998,801,193
II. Long-term liabilities 330 176,000,000 1,131,505,178
1. Long-term loans and liabilities 334 - 118,000,000 9. General and administration expenses 25 128,310,104,599 135,951,817,285
2. Unearned revenue 338 176,000,000 1,013,505,178 10. Operating profit (30=20+(21-22)-(24+25)) 30 214,626,346,298 226,674,023,198
B. EQUITY (400=410+430) 400 788,600,646,381 683,995,501,690 11. Other income 31 2,981,870,874 3,990,957,680
I. Owners' equity 410 17 787,286,212,503 683,250,010,404
12. Other expenses 32 7,037,771,068 514,124,378
1. Charter capital 411 246,764,330,000 246,764,330,000
13. (Loss)/Profit from other activities (40=31-32) 40 (4,055,900,194) 3,476,833,302
2. Share premium 412 153,747,160,000 153,747,160,000
14. Share of profit in associates 45 12 590,330,534 757,916,304
3. Treasury shares 414 (3,593,000) (3,593,000)
4. Foreign exchange reserve 416 179,264 179,264 15. Accounting profit before tax (50=30+40+45) 50 211,160,776,638 230,908,772,804
5. Investment and development fund 417 241,490,719,768 155,887,618,612 16. Current corporate income tax expense 51 48,124,062,116 59,713,180,058
6. Financial reserve fund 418 15,573,685,480 15,426,539,765 17. Deferred corporate tax expense 52 (327,944,724) 2,645,862
7. Retained earnings 420 129,713,730,991 111,427,775,763
18. Net profit after corporate income tax (60=50-51-52) 60 163,364,659,246 171,192,946,884
II. Other resources and funds 430 1,314,433,878 745,491,286
18.1. Net profit after tax attributable to minority interest 61 17,546,200,083 21,770,784,584
1. Subsidised fund 432 399,473,286 669,891,286
18.2. Net profit after tax attributable to holding company’s
2. Funds for fixed assets acquisition 433 914,960,592 75,600,000 62 145,818,459,163 149,422,162,300
shareholders
C. MINORITY INTEREST 439 82,161,782,918 68,977,331,963 19. Basic earnings per share 70 23 5,910 6,255
TOTAL RESOURCES (440=300+400+439) 440 1,132,049,431,920 1,087,714,661,252
OFF BALANCE SHEET ITEMS 31/12/2014 31/12/2013

1. Foreign currencies (USD) 47,801.69 2,408.41
Nguyen Ngoc Thuy Dinh Trung Kien Tran Tuc Ma

Preparer Chief Accountant General Director
Nguyen Ngoc Thuy Dinh Trung Kien Tran Tuc Ma 06 March 2015
06 March 2015

The notes set out on pages 119 to 138 are an integral part of these consolidated financial statements The notes set out on pages 119 to 138 are an integral part of these consolidated financial statements
CONSOLIDATED CASH FLOW STATEMENT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2014 These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN
FORM B 03-DN/HN 1. GENERAL INFORMATION

Unit: VND
Structure of ownership
ITEMS Codes 2014 2013
I. CASH FLOWS FROM OPERATING ACTIVITIES Traphaco Joint Stock Company was transformed from a State-owned enterprise into a Joint Stock Company under
1. Profit before tax 01 211,160,776,638 230,908,772,804 Decision No. 2566/1999/QD-BGTVT dated 27 September 1999 issued by the Minister of Transport. The Company was
granted Business Registration Certificate for joint stock company with enterprise code No. 0100108656 replacing its
2. Adjustments for: former Certificate No. 058437 dated 24 December 1999. The Company’s 20th amended Business Registration Certificate
Depreciation and amortisation 02 25,584,365,308 22,156,243,959 was dated on 10 June 2014.
Provisions 03 (2,845,063,966) (427,600,465)
As at 31 December 2014, the Company had branches as follow:
Unrealized foreign exchange (gain) 04 (2,053,521) (61,917,559)
(Gain) from investing activities 05 (5,344,695,269) (1,695,232,641)
Name Location Principal operating activities
Interest expense 06 3,913,566,637 20,612,227,436
3. Operating profit before movements in working capital 08 232,466,895,827 271,492,493,534 Branch Traphaco Joint Stock Company Ho Chi Minh City
Changes in receivables 09 17,214,330,331 72,045,437,588
Central branch Da Nang City
Changes in inventories 10 (808,196,056) 23,284,999,434
Changes in accounts payables (not including accrued interest and cor- 11 (2,975,614,970) (65,126,562,471) Nam Dinh branch Nam Dinh
porate income tax payable)
Changes in prepaid expenses 12 (1,645,654,775) (2,873,091,950) Nghe An branch Nghe An
Interest paid 13 (4,471,096,717) (21,349,390,791)
Thanh Hoa branch Thanh Hoa
Corporate income tax paid 14 (54,823,747,329) (49,131,898,685)
Net cash from operating activities 20 184,956,916,311 228,341,986,659 Vinh Long branch Vinh Long
II. CASH FLOWS FROM INVESTING ACTIVITIES Trade of pharmaceutical
Hai Phong branch Hai Phong City
1. Acquisition and construction of fixed assets and other long-term assets 21 (45,012,168,456) (57,537,560,677) products, food, cosmetics,
chemicals, medical supplies
2. Proceeds from disposal of fixed assets and other long-term assets 22 95,454,545 197,999,999 Quang Ninh branch Quang Ninh
and equipment, import and
3. Cash outflow for lending, selling debt instruments of other entities 23 (1,788,845,000) - export of medical materials and
Dong Nai branch Dong Nai
pharmaceutical products.
4. Cash recovered from lending, selling debt instruments of other entities 24 56,983,146 867,314,815
5. Investments in other entities 25 (337,598,435) (4,369,823,618) Binh Thuan branch Binh Thuan
6. Interest earned, dividends and profits received 27 5,012,121,038 4,484,256,430 Quang Ngai branch Quang Ngai
Net cash (used in) investing activities 30 (41,974,053,162) (56,357,813,051)
III. CASH FLOWS FROM FINANCING ACTIVITIES Khanh Hoa branch Khanh Hoa
1. Proceeds from issuing stocks, receiving capital from owners 31 - 123,366,090,000 Can Tho branch Can Tho
2. Proceeds from borrowings 33 37,878,628,574 272,917,347,693
3. Repayment of borrowings 34 (117,620,352,511) (388,934,158,532) Gia Lai branch Gia Lai
4. Dividends and profits paid 36 (27,656,890,946) (27,077,743,745) Hai Duong branch Hai Duong
Net cash (used in) financing activities 40 (107,398,614,883) (19,728,464,584)
Net increase in cash 50 35,584,248,266 152,255,709,024 As at 31 December 2014, the Company had 04 subsidiaries namely Traphaco High-tech Joint Stock Company,
Traphacosapa One Member Company Limited, Dak Lak Pharmaceuticals Medical Equipment Joint Stock Company
Cash and cash equivalents at the beginning of the year 60 256,584,762,183 104,329,053,159
and Traphaco Hung Yen One Member Company Limited.
Cash and cash equivalents at the end of the year 70 292,169,010,449 256,584,762,183
The total number of employees of the Company and its subsidiaries as at 31 December 2014 was 1,341 (31 December
2013: 1,314).
Operating industry and principal activities

Operating activities of the Company include manufacturing and trading food and cosmetics; export and import
of pharmaceutical materials and products; consultancy on manufacturing of medicines and cosmetics; dispensing
prescription drugs; production and trade of medicines, chemicals and medical supplies and equipment, production
and trade of alcohol, beer, soft drinks (not including bar operating); advisory services on medical technology transfer;
Nguyen Ngoc Thuy Dinh Trung Kien Tran Tuc Ma purchasing, planting, processing herbal medicines.
The principal activities of the Company are manufacturing and trading pharmaceutical products, chemicals, medical
06 March 2015 supplies and equipment.

The notes set out on pages 119 to 138 are an integral part of these consolidated financial statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN
2. ACCOUNTING CONVENTION AND FINANCIAL YEAR Minority interests in the net assets of consolidated subsidiaries are identified separately from the Company’s equity
therein. Minority interests consist of the amount of those interests at the date of the original business combination (see
Accounting convention below) and the minority’s share of changes in equity since the date of the combination. Losses applicable to the minority
in excess of the minority’s interest in the subsidiary’s equity are allocated against the interests of the Company except to
The accompanying consolidated financial statements, expressed in Vietnam Dong (VND), are prepared under the historical the extent that the minority has a binding obligation and is able to make an additional investment to cover the losses.
cost convention and in accordance with Vietnamese accounting standards, accounting regime for enterprises and legal
regulations relating to financial reporting. Business combinations
The accompanying consolidated financial statements are not intended to present the financial position, results of On acquisition, the assets and liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date
operations and cash flows in accordance with accounting principles and practices generally accepted in countries and of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised
jurisdictions other than Vietnam. as goodwill. Any deficiency of the cost of acquisition below the fair values of the identifiable net assets acquired is credited
to profit and loss in the period of acquisition.
Financial year
The interest of minority shareholders is initially measured at the minority’s proportion of the net fair
The Company’s financial year begins on 01 January and ends on 31 December. value of the assets, liabilities and contingent liabilities recognised.
3. NEW ACCOUNTING GUIDANCE IN ISSUE NOT YET ADOPTED Investments in associates
On 22 December 2014, the Ministry of Finance issued Circular No. 200/2014/TT-BTC (“Circular 200”) guiding the An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor an interest
application of accounting regime for enterprises and Circular No. 202/2014/TT-BTC (Circular 202) guiding the preparation in joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the
and presentation of consolidated financial statements. These circulars are effective for financial years beginning on or investee but not control or joint control over those policies.
after 01 January 2015. Circular 200 will supersede the regulations for accounting regime promulgated under Decision
No. 15/2006/QD-BTC dated 20 March 2006 issued by the Ministry of Finance and Circular No. 244/2009/TT-BTC dated 31 The results and assets and liabilities of associates are incorporated in these financial statements using the equity method
December 2009 issued by the Ministry of Finance. Circular 202 will supersede section XIII in Circular No. 161/2007/TT- of accounting. Interests in associates are carried in the balance sheet at cost as adjusted by post-acquisition changes in
BTC dated 31 December 2007 of the Ministry of Finance guiding the preparation and presentation of consolidated the Company’s share of the net assets of the associate. Losses of an associate in excess of the Company’s interest in that
financial statements in accordance with Vietnamese Accounting Standard No. 25 “Consolidated Financial Statements and associate (which includes any long-term interests that, in substance, form part of the Company’s net investment in the
Accounting for Investments in Subsidiaries”. associate) are not recognised.
The Board of Directors is considering the extent of impact of the adoption of these circulars on the Company’s consolidated Where a group entity transacts with an associate of the Company, unrealised profits and losses are
financial statements for future accounting periods. eliminated to the extent of the Company’s interest in the relevant associate.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Goodwill
The significant accounting policies, which have been adopted by the Company in the preparation of these consolidated Goodwill represents the excess of the cost of acquisition over the Company’s interest in the net fair value of the identifiable
financial statements, are as follows: assets, liabilities and contingent liabilities of a subsidiary, associate or jointly controlled entity at the date of acquisition.
Goodwill is recognised as an asset and is amortised on the straight-line basis over its estimated period of benefit from 8
Estimates years to 10 years.
The preparation of consolidated financial statements in conformity with Vietnamese accounting standards, accounting Goodwill arising on the acquisition of associates and jointly controlled entities is included in the carrying amount of the
regime for enterprises and legal regulations relating to financial reporting requires management to make estimates and associates and jointly controlled entities. Goodwill arising on the acquisition of subsidiaries is presented separately as an
assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the intangible asset in the consolidated balance sheet.
date of the consolidated financial statements and the reported amounts of revenues and expenses during the financial
year. Although these accounting estimates are based on the management’s best knowledge, actual results may differ On disposal of a subsidiary, associate or jointly controlled entity, the attributable amount of unamortised goodwill is
from those estimates. included in the determination of the profit or loss on disposal.
Basis of consolidation Financial instruments
The consolidated financial statements incorporate the financial statements of the Company and enterprises controlled by Initial recognition
the Company (its subsidiaries) up to 31 December each year. Control is achieved where the Company has the power to
govern the financial and operating policies of an investee enterprise so as to obtain benefits from its activities. Financial assets: At the date of initial recognition, financial assets are recognized at cost plus transaction costs that are
directly attributable to the acquisition of the financial assets. Financial assets of the Company comprise cash and cash
The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement equivalents, short-term and long-term investments, trade receivables and other receivables and short-term collaterals,
from the effective date of acquisition or up to the effective date of disposal, as appropriate. deposits.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used Financial liabilities: At the date of initial recognition financial liabilities are recognized at cost plus transaction costs that are
in line with those used by the Company. directly attributable to the issue of the financial liabilities. Financial liabilities of the Company comprise trade payables and
other payables, borrowings and accrued expenses.
All inter-company transactions and balances between group enterprises are eliminated on consolidation.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Intangible assets and amortisation
Subsequent measurement after initial recognition Intangible assets represent land use rights and accounting software that are stated at cost less accumulated amortisation
and are amortised using the straight-line method over the estimated useful life.
Currently there are no requirements for the subsequent measurement of the financial instruments after initial recognition.
Construction in progress
Cash and cash equivalents
Properties in the course of construction for production, rental or administrative purposes, or for the purposes not yet
Cash and cash equivalents comprise cash on hand, demand deposits and short-term, highly liquid investments that are determined, are carried at cost. Cost includes professional fees, and for qualifying assets, borrowing costs dealt with in
readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. accordance with the Company’s accounting policy. Depreciation of these assets, on the same basis as other property
assets, commences when the assets are ready for their intended use.
Provision for doubtful debts
Long-term prepayments
Provision for doubtful debts is made for receivables that are overdue for six months or more, or when the debtor is in
dissolution, in bankruptcy, or is experiencing similar difficulties and so may be unable to repay the debt. Long-term prepayments comprise costs of small tools, supplies and spare parts issued for consumption which are
expected to provide future economic benefits to the Company for one year or more. These expenditures have been
Inventories capitalised as long-term prepayments, and are allocated to the consolidated income statement using the straight-line
method over the estimated useful life.
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and where applicable,
direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and Revenue recognition
condition. Cost is calculated using the weighted average method. Net realisable value represents the estimated selling
price less all estimated costs to completion and costs to be incurred in marketing, selling and distribution. Revenue from the sale of goods is recognised when all five (5) following conditions are satisfied:
The evaluation of necessary provision for inventory obsolescence follows current prevailing accounting regulations which a. the Company has transferred to the buyer the significant risks and rewards of ownership of the goods;
allow provisions to be made for obsolete, damaged, or sub-standard inventories and for those which have costs higher
b. the Company retains neither continuing managerial involvement to the degree usually associated with ownership
than net realisable values as at the balance sheet date.
nor effective control over the goods sold;
Tangible fixed assets and depreciation c. the amount of revenue can be measured reliably;
Tangible fixed assets are stated at cost less accumulated depreciation. 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.
The costs of purchased tangible fixed assets comprise their purchase prices and any directly attributable costs of bringing
the assets to their working condition and location for their intended use. Revenue of a transaction involving the rendering of services is recognised when the outcome of such transactions can
be measured reliably. Where a transaction involving the rendering of services is attributable to several periods, revenue
The costs of self-constructed or manufactured assets are the actual construction or manufacturing cost plus installation is recognised in each period by reference to the percentage of completion of the transaction at the balance sheet date
and test running costs. of that period. The outcome of a transaction can be measured reliably when all four (4) following conditions are satisfied:
Tangible fixed assets are depreciated using the straight-line method over their estimated useful lives as follows: (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;
2014 (c) the percentage of completion of the transaction at the balance sheet date can be measured reliably; and
Years (d) the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.
Buildings and structures 15 - 25 Interest income is accrued on a time basis, by reference to the principal outstanding and at the applicable interest rate.
Machinery and equipment 06 - 07 Dividend income from investments is recognised when the Company’s right to receive payment has been established.
Motor vehicles 05 - 08 Foreign currencies

Office equipment 03 - 06
The Company applies the method of recording foreign exchange differences in accordance with Vietnamese Accounting
Others 05 - 15 Standard No. 10 (VAS 10) “Effects of changes in foreign exchange rates” and Circular No. 179/2012/TT-BTC dated 24
October 2012 by the Ministry of Finance providing guidance on recognition, measurement and treatment of foreign
Loss or gain resulting from sales and disposals of tangible fixed assets is the difference between profit from sales or exchange differences in enterprises. Accordingly, transactions arising in foreign currencies are translated at exchange rates
disposals of assets and their residual values and is recognized in the consolidated income statement. ruling at the transaction date. The balances of monetary items denominated in foreign currencies as at the balance sheet
date are retranslated at the exchange rates on the same date. Exchange differences arising from the translation of these
accounts are recognised in the consolidated income statement. Unrealised exchange gains at the balance sheet date are
not treated as part of distributable profit to shareholders.
Borrowing costs
All other borrowing costs are recognised in the consolidated income statement when incurred.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 6. INVENTORIES
Provisions
31/12/2013
31/12/2014
(Reclassified)
Provisions are recognised when the Company has a present obligation as a result of a past event, and it is probable that
the Company will be required to settle that obligation. Provisions are measured at the management’s best estimate of the VND VND
expenditure required to settle the obligation at the balance sheet date.
Goods in transit 2,323,587,109 2,682,490,115
Taxation Raw materials 123,445,698,563 113,815,515,956
Tools and supplies 26,922,555 57,567,014
Income tax expense represents the sum of the tax currently payable and deferred tax.
Work in process 24,871,873,581 31,065,854,129
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the Finished goods 75,895,304,980 90,095,208,939
income statement because it excludes items of income or expense that are taxable or deductible in other years (including Merchandise 29,216,723,572 17,697,809,977
loss carried forward, if any) and it further excludes items that are never taxable or deductible.
Goods on consignment 9,596,770,932 9,154,239,106
Deferred tax is recognised on significant differences between carrying amounts of assets and liabilities in the financial Total 265,376,881,292 264,568,685,236
statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using balance
sheet liability method. Deferred tax liabilities are generally recognised for all temporary differences and deferred tax assets Provision for devaluation of inventories (636,465,426) (684,648,865)
are recognised to the extent that it is probable that taxable profit will be available against which deductible temporary Net realisable value 264,740,415,866 263,884,036,371
differences can be utilised.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset 7. OTHER CURRENT ASSETS
realised. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to
equity, in which case the deferred tax is also dealt with in equity. 31/12/2014 31/12/2013
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against VND VND
current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company Advances to employees 9,499,001,840 2,682,962,066
intends to settle its current tax assets and liabilities on a net basis.
Input value added tax over declarations 250,157,729 250,157,729
The determination of the tax currently payable is based on the current interpretation of tax regulations. However, these Short-term collaterals, deposits 2,769,207,879 1,892,811,493
regulations are subject to periodic variation and their ultimate determination depends on the results of the tax authorities’
12,518,367,448 4,825,931,288
examinations.
Other taxes are paid in accordance with the prevailing tax laws in Vietnam.
5. CASH AND CASH EQUIVALENTSN
31/12/2014 31/12/2013
VND VND
Cash on hand 12,347,197,566 8,935,185,253
Cash in bank 84,821,812,883 86,333,523,426
Cash in transit - 816,053,504
Cash equivalents (*) 195,000,000,000 160,500,000,000
292,169,010,449 256,584,762,183
(*) Cash equivalents represent time deposits with terms within 03 (three) months at commercial banks.

9. INTANGIBLE FIXED ASSETS
The cost of the Company’s fixed assets as at 31 December 2014 includes VND 65,701,182,199 (31 December 2013: VND 64,687,129,229) of equipment which has been fully
As noted further in Note 13, the Company has pledged its tangible fixed assets, which had a carrying value of approximately VND 59,676,743,034 as at 31 December 2014 (31
Total
VND
338,048,992,141
15,897,281,612
19,748,591,052
(1,607,880,373)
(138,610,545)
371,948,373,887
149,976,650,046
25,249,258,372
(1,511,339,555)
(138,610,545)
173,575,958,318
198,372,415,569
188,072,342,095
Land use rights (i) Software Others Total
VND VND VND VND
COST
As at 01/01/2014 29,252,589,263 101,187,570 283,328,900 29,637,105,733
Other assets
VND
3,652,737,954
-
-
-
3,652,737,954
2,829,999,383
222,493,412
-
-
3,052,492,795
600,245,159
822,738,571
Additions 8,055,485,012 1,165,400,000 - 9,220,885,012
As at 31/12/2014 37,308,074,275 1,266,587,570 283,328,900 38,857,990,745
ACCUMULATED DEPRECIATION
As at 01/01/2014 1,005,346,249 58,330,322 161,307,580 1,224,984,151
Charge for the year 164,282,568 127,757,700 43,066,668 335,106,936
Office equipment
VND
11,201,914,349
1,382,491,001
(167,551,607)
47,990,000
12,464,843,743
9,246,175,722
835,946,841
(167,551,607)
11,657,845
9,926,228,801
2,538,614,942
1,955,738,627
As at 31/12/2014 1,169,628,817 186,088,022 204,374,248 1,560,091,087
NET BOOK VALUE
As at 31/12/2014 36,138,445,458 1,080,499,548 78,954,652 37,297,899,658
As at 31/12/2013 28,247,243,014 42,857,248 122,021,320 28,412,121,582
(i) As at 31 December 2014, the Company has land use rights as follows:
Motor vehicle
VND
40,660,824,159
6,367,347,806
(679,062,266)
-
46,349,109,699
22,323,189,857
3,227,683,416
(595,537,673)
-
24,955,335,600
21,393,774,099
18,337,634,302
Details Area Value Useful life
(m2) VND
- Land use right at 255 Ton Duc Thang, Lien Chieu, Da Nang City 283 2,618,528,525 Permanent
December 2013: VND 72,583,410,883), to secure banking facilities granted to the Company. - Land use right at Phuoc Kien, Nha Be, Ho Chi Minh City (*) 876 7,795,378,640
- Land use right at Hoa Vuong New City, Nam Dinh 289 2,350,425,000 Permanent
Machinery and
equipmen
VND
127,825,840,540
8,061,737,805
14,388,825,560
(761,266,500)
(47,990,000)
149,467,147,405
66,035,407,120
14,131,523,452
(748,250,275)
(11,657,845)
79,407,022,452
70,060,124,953
61,790,433,420
- Land use right at Vinh Tan, Vinh (Lot 581) 307 1,290,240,000 Permanent
- Land use right at Vinh Tan, Vinh (Lot 582) 302 1,267,560,000 Permanent
- Land use right at Vinh Diem Trung Urban Area, Nha Trang City 306 1,873,777,089 Permanent
- Land use right at Cao Xanh New Urban Area, Ha Long City 340 3,049,800,000 Permanent
- Land use right at Western New Urban Area, Thanh Binh, Hai Duong 250 3,518,560,000 Permanent
Buildings and structure
VND
154,707,675,139
85,705,000
5,359,765,492
-
(138,610,545)
160,014,535,086
49,541,877,964
6,831,611,251
-
(138,610,545)
56,234,878,670
103,779,656,416
105,165,797,175
- Land use right at Van Lam, Hung Yen (**) 31,047 4,972,028,674 Permanent
- Land use right in Dak Lak - 516,291,335 Permanent
- Land use right at K1, K2, zone 4, the North of Le Loi Avenue, 518 3,500,078,454 Permanent
Dong Huong Ward, Thanh Hoa City
- Land use right at D37, My Thanh Hung, Ward 6, My Tho City, Tien Giang 151 2,710,406,558 Permanent
- Land use right at No. 2, Dinh Ke Ward, Bac Giang City 178 1,845,000,000 Permanent
34,847 37,308,074,275
ACCUMULATED DEPRECIATION
Transfers from construction in
depreciated but is still in use.

TANGIBLE FIXED ASSETS
(*) This land use right in Phuoc Kien, Nha Be, HCM City covers 2 lots: Lot 647 with the area of 652 m2 and permanent useful
life and lot 646 with the area of 224 m2 and the useful life until 27 August 2016.
Charge for the year
NET BOOK VALUE

As at 01/01/2014
As at 31/12/2014
As at 01/01/2014
As at 31/12/2014
As at 31/12/2014
As at 31/12/2013
(**) According to Certificate of land use right No. AI 073651 issued by Hung Yen People’s Committee dated 15 June 2007,
Other decreases
Other decreases
land use right for land lot No. 228 in Tan Quang commune, Van Lam district, Hung Yen province has a term of 35 years,
from 03 April 2003 to 03 April 2038 with an area of 31,047 m2.
Purchases
Disposals
Disposals
progress
COST
As noted in Note 13, the Company has pledged its land use rights, which has the carrying value of approximately
VND 4,968,953,525 as at 31 December 2014 (31 December 2013: VND 4,968,953,525) to secure banking facilities granted
to the Company.
8.

10. CONSTRUCTION IN PROGRESS Details of the Company’s associates as at 31 December 2014 are as follows:
31/12/2014 31/12/2013 Proportion Proportion

Name Location of ownership of voting Principal operating activities
VND VND
interest power held
Construction in progress 45,757,200,097 41,353,410,761
Quang Tri Pharmaceutical
Traphaco pharmaceutical plant construction (*) 39,625,039,554 31,053,543,886 Medical Equipment Joint Quang Tri 43% 43% Produce and trade pharmaceutical
Thai Nguyen office construction 201,939,091 201,939,091 Stock Company
Gia Lai office construction 1,616,180,092 1,616,180,092 Thai Nguyen
Can Tho office construction 2,479,653,636 2,479,653,636 Pharmaceutical Medical
Thai Nguyen 49% 49% Produce and trade pharmaceutical
Equipment Joint Stock
Thanh Hoa office construction - 3,460,545,454 Company
Others 1,834,387,724 2,541,548,602
Purchasing fixed assets 1,771,806,043 7,390,611,328 Summarised financial information in respect of the Company’s associates is set out below:
47,529,006,140 48,744,022,089
31/12/2014 31/12/2013
(*) The Company founded Traphaco Hung Yen One Member Limited Company (Traphaco Joint Stock Company’s ownership VND VND
interest was 100%) to implement the project of investing and building hi-tech pharmaceutical plant in the 4.6-hectare
Total assets 36,194,261,849 42,222,651,216
land in Tan Quang commune, Van Lam district, Hung Yen province. Total estimated investment value of the project is VND
400 billion and the deploying time is 5 years. This project implementation was permitted by People’s Committee of Hung Total liabilities 25,514,881,790 31,320,614,670
Yen province, and the balance of construction in progress regarding the project represents site clearance expenses which Net assets 10,679,380,059 10,902,036,546
have been paid up to 31 December 2014.
Company's share of associate's net assets 4,996,280,809 5,048,097,089
11. INVESTMENTS IN SUBSIDIARIES
2014 2013
Details of the Company’s subsidiaries as at 31 December 2014 are as follows:
VND VND
Proportion Proportion Sales 111,833,792,894 85,155,303,175

Name Location of ownership of voting Principal operating activities
Net profit 1,232,978,486 1,719,804,016
interest power held
Plant, process pharmaceutical materials, Company's share of associate's net profit 590,330,534 757,916,304
Traphacosapa One Member agriculture and forestry products, food,
Lao Cai Province 100% 100% 13. SHORT-TERM LOANS AND LIABILITIES
Limited Company Produce and trade pharmaceutical
products, pharmaceutical materials, food.
Traphaco Hi-tech Joint Stock Hung Yen 31/12/2014 31/12/2013
51% 51% Produce eastern medicines.
Company Province VND VND
Produce and trade pharmaceutical Short-term borrowings
Dak Lak Pharmaceutical and
products, functional foods; export and - Vietnam Joint Stock Commercial Bank for Industry and 16,587,749,427 81,299,473,364
Medical Equipment Joint Dak Lak Province 58% 58%
import medicines, pharmaceutical Trade - Ba Dinh branch (i)
Stock Company
materials and medical equipment.
- Borrowings from individuals (ii) 17,850,000,000 32,240,000,000
Traphaco Hung Yen One Hung Yen
100% 100% Produce eastern medicines. Current portion of long-term loans
Member Limited Company Province
- Vietnam Joint Stock Commercial Bank for Industry and - 472,000,000
Trade - Ba Dinh branch
12. INVESTMENTS IN ASSOCIATES
- Borrowings from individuals - 50,000,000
31/12/2014 31/12/2013 34,437,749,427 114,061,473,364
VND VND As at 31 December 2014, short-term loans represent the following short-term loans:
Cost of investments in associates 20,813,622,400 20,813,622,400
(i) Dated 15 April 2013, the credit agreement No. 34-2013/HDTD-CNC from Vietnam Joint Stock Commercial Bank for
Goodwill (15,877,771,401) (15,877,771,401) Industry and Trade - Ba Dinh Branch to supplement working capital for the Traphaco CNC’s operation plan. The credit
limit of VND 55,000,000,000, this limit includes the actual balance up to 14 April 2013 of the loan under credit agreement
Profit arising after the date of investment excluding dividends 1,092,227,541 754,629,106
No. 37-2012/HDTD-CNC dated 11 April 2012. Loan term is specified on each debenture note within six months from
6,028,078,540 5,690,480,105 the disbursement date. The credit limit is maintained in 12 months from the agreement date. The loans bear floating
rates, which are monthly adjustable on the 25th day of each month from the disbursement date, and are secured by
tangible fixed assets.

131
17. OWNER’S EQUITY

CONSOLIDATED FINANCIAL STATEMENTS
Movement in owner’s equity

Foreign exchange Investment and Financial reserve Retained
Chartered capital Share premium Treasury shares reserve development fund earnings Total
VND VND VND VND VND VND VND VND
Balance as at 01/01/2013 123,398,240,000 92,063,700,000 (3,593,000) 179,264 134,786,888,790 14,609,795,594 85,380,715,911 450,235,926,559
Capital increase 123,366,090,000 61,683,460,000 - - - - - 185,049,550,000
Profit for the year - - - - - - 149,422,162,300 149,422,162,300
2013 interim dividends
- - - - - - (24,930,812,000) (24,930,812,000)
declared
Management's bonus - - - - - - (2,202,950,745) (2,202,950,745)
Fund allocations - - - - 82,783,369,822 816,744,171 (95,638,871,222) (12,038,757,229)
Remuneration of Board of
Management and Board of - - - - - - (583,000,085) (583,000,085)
Supervisor
Payment out of Investment
and development fund for - - - - (61,682,640,000) - - (61,682,640,000)
share bonus to shareholders
Others - - - - - - (19,468,396) (19,468,396)
Balance as at 01/01/2014 246,764,330,000 153,747,160,000 (3,593,000) 179,264 155,887,618,612 15,426,539,765 111,427,775,763 683,250,010,404
Profit for the year - - - - - - 145,818,459,163 145,818,459,163
Dividends declared - - - - - - (24,673,294,300) (24,673,294,300)
Management's bonus - - - - - - (2,754,829,596) (2,754,829,596)
Fund allocations - - - - 85,502,601,156 147,145,715 (99,839,895,852) (14,190,148,981)
Remuneration of Board of
Management and Board of - - - - - - (237,074,701) (237,074,701)
Supervisor
Others - - - - 100,500,000 - (27,409,486) 73,090,514
Balance as at 31/12/2014 246,764,330,000 153,747,160,000 (3,593,000) 179,264 241,490,719,768 15,573,685,480 129,713,730,991 787,286,212,503
In 2014, the Company’s Board of Directors has decided to pay dividends to shareholders and make allocations to funds according to relevant Resolutions of the General Meetings of
Shareholders of the Company and its subsidiaries.
FORM B 09-DN/HN
(ii) Borrowings from individuals represent borrowings from employees of Traphaco CNC to supplement working capital for
production and business activities. These unsecured loans have term 12 months and bear interest rates from 0.833% per
31/12/2013
VND
37,177,672,085
4,668,577,099
1,233,377,914
-
43,079,627,098
31/12/2013
VND
-
2,669,025,974
933,882,455
2,500,000,000
1,196,009,323
3,435,401,864
10,734,319,616
31/12/2013
VND
5,035,739,200
3,656,819,589
622,521,311
770,960,328
576,931,109
90,007,512
56,367,134
1,088,621,510
11,897,967,693
These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
31/12/2014
VND
30,477,986,872
4,365,851,654
939,546,241
246,000
35,783,630,767
31/12/2014
VND
5,336,700,000
1,438,571,754
376,352,375
-
-
5,803,381,170
12,955,005,299
31/12/2014
VND
4,723,342,000
2,512,008,790
2,237,213,404
542,193,278
322,140,588
43,423,898
28,638,879
2,064,904,343
12,473,865,180
TAXES AND AMOUNTS PAYABLE TO THE STATE BUDGET
SHORT-TERM LOANS AND LIABILITIES (Continued)
Research team led by Mr. Nguyen Khac Vien
Board of Management's remuneration

OTHER SHORT-TERM LIABILITIES
Expenses for survey on sales policy
Dividends payable to shareholders

month to 1.2% per month.
Unemployment insurance
ACCRUED EXPENSES
Corporate income tax
Personal income tax
Collaborators cost
Custom club cost
Health insurance
Interest expense
Advertising cost
Social insurance
Value added tax
Other expenses
130 ANNUAL REPORT 2014

Union fee
Others
Others
13.
14.
15.
16.
18. GROSS SALES 23. BASIC EARNINGS PER SHARE
The calculation of the basic earnings per share attributable to the ordinary equity holders of the parent is based on the
2014 2013
(Reclassified) following data:
VND VND
Sales of finished goods 914,051,730,956 1,333,793,072,649 Unit 2014 2013
Sales of merchandise 745,409,888,895 355,790,947,635 Earnings for the purposes of calculating basic earnings
VND 145,818,459,163 149,422,162,300
per share
Sales of rendering services 813,539,330 1,500,200,250
Weighted average number of ordinary shares for the
1,660,275,159,181 1,691,084,220,534 Share 24,673,300 23,889,871
purposes of calculating basic earnings per share
19. COST OF SALES Basic earning per share VND 5,910 6,255
24. BUSINESS AND GEOGRAPHICAL SEGMENTS

2013
2014 (Reclassified)
The principal activities of the Company are manufacturing and trading pharmaceutical products, chemicals and medical
VND VND supplies and equipment. The Company has no significant other business activities, therefore, the financial information
Cost of finished goods sold 419,301,922,727 661,138,546,257 presented in the consolidated balance sheet as at 31 December 2014 and all the income and expenses presented in
Cost of merchandise sold 516,989,565,292 299,679,654,379 the consolidated income statement for the year ended 31 December 2014 related to manufacturing and trading
pharmaceutical products, chemicals and medical supplies and equipment.
Cost of services rendered 49,246,668 412,121,559
936,340,734,687 961,230,322,194 The Company has no business activities outside Vietnam, therefore, the Company has no geographical segments outside
Vietnam.
20. FINANCIAL INCOME
25. OPERATING LEASE COMMITMENTS
2014 2013
VND VND 2014 2013
Bank and loan interest 5,012,121,038 3,791,788,710 VND VND
Unrealized foreign exchange gain 2,053,521 61,917,559 Minimum lease payments recognised in the consolidated income
3,613,546,029 4,608,926,433
Interest on installment sales - 692,467,720 statement for the year
Payment discount 361,138,732 759,012,490
At the balance sheet date, the Company had outstanding commitments under non-cancelable operating leases, which
Realized foreign exchange gain 120,427,600 312,650,925 fall due as follows:
5,495,740,891 5,617,837,404
31/12/2014 31/12/2013
21. FINANCIAL EXPENSES
VND VND
2014 2013 Within one year 4,507,341,567 3,228,476,230
VND VND
In the second to fifth years inclusive 11,655,940,998 10,110,122,358
Interest expense 3,913,566,637 20,612,227,436
After five years 28,691,052,816 31,126,618,875
Realised foreign exchange loss 352,266,615 1,502,808,519
Payment discount for customers 41,017,694,951 - 44,854,335,381 44,465,217,463
Others - 11,964,003
26. FINANCIAL INSTRUMENTS
45,283,528,203 22,126,999,958
Capital risk management
22. PRODUCTION COST BY NATURE
The Company manages its capital to ensure that the Company will be able to continue as a going concern while
2014 2013
maximising the return to shareholders through the optimisation of the debt and equity balance.
VND VND
Raw materials expenses 382,800,597,230 443,465,463,872 The capital structure of the Company consists of net debt (borrowings offset by cash and cash equivalents) and equity
attributable to equity holders of the parent (comprising capital, reserves and retained earnings).
Labour 269,646,347,842 283,370,840,142
Depreciation and amortization 25,442,255,232 22,156,243,959
Out-sourced services 111,318,459,227 168,677,436,867
Other expenses 146,472,370,823 92,298,093,842
935,680,030,354 1,009,968,078,682

26. FINANCIAL INSTRUMENTS (Continued) Market risk
Gearing ratio The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates, interest
rates and prices. The Company does not hedge these risk exposures due to the lack of any market to purchase financial
The gearing ratio of the Company as at the balance sheet date was as follows: instruments.
Foreign currency risk management

31/12/2014 31/12/2013
VND VND The Company undertakes certain transactions denominated in foreign currencies; consequently, exposures to exchange
Borrowings 34,437,749,427 114,179,473,364 rate fluctuations arise.
Less: Cash and cash equivalents 292,169,010,449 256,584,762,183 The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary
Net debt - - liabilities at the end of the year are as follows:
Equity 787,286,212,503 683,250,010,404
Net debt to equity ratio - - Liabilities Assets
31/12/2014 31/12/2013 31/12/2014 31/12/2013
Significant accounting policies VND VND VND VND
United States Dollar (USD) 56,899,694,250 26,024,329,930 2,694,258,259 1,316,577,552
Details of the significant accounting policies and methods adopted (including the criteria for recognition, the bases of
measurement, and the bases for recognition of income and expenses) for each class of financial asset, financial liability and Euro (EUR) 28,540,253 - 525,932,400 -
equity instrument are disclosed in Note 4.
Foreign currency sensitivity analysis
Carrying amounts
The Company is mainly exposed to United States Dollar. 10% is the sensitivity rate used when reporting foreign currency risk
31/12/2014 31/12/2013 internally to key management personnel and represents management’s assessment of the reasonably possible change in
VND VND foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items
Financial assets and adjusts their translation at the period end for a 10% change in foreign currency rates. For a 10% increase/decrease in
the following foreign currencies against Vietnam Dong, the profit before tax in the year would decrease/increase by the
Cash and cash equivalents 292,169,010,449 256,584,762,183 following amount billion VND 5.4 billion (2013: VND 2.5 billion).
Trade and other receivables 189,200,578,846 212,529,725,076
Interest rate risk management
Short term investments 1,988,845,000 256,983,146
Short term collaterals, deposits, mortgages 2,769,207,879 1,892,811,493 The Company has significant interest rate risks arising from interest bearing loans which are arranged. The risk is managed
Other long-term investments 500,000,000 500,000,000 by the Company by maintaining an appropriate level of borrowings and analyzing market competition to enjoy favorable
interest rates from appropriate lenders.
Total 486,627,642,174 471,764,281,898
Financial liabilities Interest rate sensitivity
Borrowings 34,437,749,427 114,179,473,364
The loan’s sensitivity to interest rate changes which may arise at an appropriate level is presented in the following table.
Trade and other payables 135,860,161,317 124,417,994,611 Assuming all other variables were held constant, if interest rates applicable to floating interest bearing loans had been 200
Accruals 12,955,005,299 10,734,319,616 basis points higher/lower, the Company’s profit before tax as at 31December 2014 would have (decreased)/increased VND
Total 183,252,916,043 249,331,787,591 688,754,989 (31 December 2013: VND 2,283,589,467).
The Company has not assessed fair value of its financial assets and liabilities as at the balance sheet date since there are Commodity price risk management
no comprehensive guidance under Circular No. 210/2009/TT-BTC issued by the Ministry of Finance on 06 November 2009
(“Circular 210”) and other relevant prevailing regulations to determine fair value of these financial assets and liabilities. The Company purchases materials, commodities from local and foreign suppliers for business purpose.
While Circular 210 refers to the application of International Financial Reporting Standards (“IFRS”) on presentation and Therefore, the Company is exposed to the risk of changes in selling prices of materials, commodities.
disclosures of financial instruments, it did not adopt the equivalent guidance for the recognition and measurement of
financial instruments, including application of fair value, in accordance with IFRS. Credit risk
Financial risk management objectives Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the
Company. The Company has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. The
The Company has set up risk management system to identify and assess the risks exposed by the Company and designed Company does not have any significant credit risk exposure to any counterparty because receivables consist of a large
control policies and procedures to manage those risks at an acceptable level. Risk management system is reviewed on a number of customers, spread across diverse industries and geographical areas.
regular basis to reflect changes in market conditions and the Company’s operations.
Financial risks include market risk (including foreign currency risk, interest rate risk and price risk), credit risk and liquidity risk.

26. FINANCIAL INSTRUMENTS (Continued) 27. RELATED PARTY TRANSACTIONS AND BALANCES
Liquidity risk management List of related parties:
The purpose of liquidity risk management is to ensure the availability of funds to meet present and future financial
obligations. Liquidity is also managed by ensuring that the excess of maturing liabilities over maturing assets in any year Related party Relationship
is kept to manageable levels relative to the amount of funds that the Company believes can generate within that year.
The Company policy is to regularly monitor current and expected liquidity requirements to ensure that the Company
maintains sufficient reserves of cash, borrowings and adequate committed funding from its shareholders to meet its Quang Tri Pharmaceutical and Medical Equipment Joint Stock Company Associate
liquidity requirements in the short and longer term.
Thai Nguyen Pharmaceutical and Medical Equipment Joint Stock Company Associate
The following table details the Company’s remaining contractual maturity for its non-derivative financial assets and
financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows
of financial assets and undiscounted cash flows of financial liabilities based on the earliest date on which the Company During the year, the Company entered into the following significant transactions with related parties:
can be required to pay. The inclusion of information on non-derivative financial assets is necessary in order to understand
the Company’s liquidity risk management as the liquidity is managed on a net asset and liability basis. 2014 2013
VND VND
Less than 1 year From 1- 5 years Total Sales
VND VND VND
Quang Tri Pharmaceutical and Medical Equipment Joint Stock Company 10,287,782,175 9,225,545,241
31/12/2014
Thai Nguyen Pharmaceutical and Medical Equipment Joint Stock Company 24,849,862,376 25,447,429,357
Cash and cash equivalents 292,169,010,449 - 292,169,010,449
Purchases
Trade and other receivables 189,200,578,846 - 189,200,578,846
Thai Nguyen Pharmaceuticals and Medical Equipment Joint Stock 2,347,339,080 -
Short-term investments 1,988,845,000 - 1,988,845,000 Company
Short term collaterals, deposits, mortgages 2,769,207,879 - 2,769,207,879 Dividends received
Other long-term investments - 500,000,000 500,000,000 Quang Tri Pharmaceutical and Medical Equipment Joint Stock Company 125,710,000 -
Total 486,127,642,174 500,000,000 486,627,642,174 Thai Nguyen Pharmaceutical and Medical Equipment Joint Stock Company 127,022,099 -
31/12/2014 Capital contribution
Borrowings 34,437,749,427 - 34,437,749,427 Thai Nguyen Pharmaceuticals and Medical Equipment Joint Stock - 16,539,482,000
Trade and other payables 135,860,161,317 - 135,860,161,317 Company
Accruals 12,955,005,299 - 12,955,005,299 Dividends paid to shareholders 24,902,061,350 24,617,275,000
Total 183,252,916,043 - 183,252,916,043
Related party balances at the balance sheet date are as follows:
Net liquidity gap 302,874,726,131 500,000,000 303,374,726,131
31/12/2014 31/12/ 2013

Less than 1 year From 1- 5 years Total VND VND
VND VND VND
Receivables
31/12/2013
Quang Tri Pharmaceuticals and Medical Equipment Joint Stock Company 3,340,286,362 2,617,370,528
Cash and cash equivalents 256,584,762,183 - 256,584,762,183
Thai Nguyen Pharmaceuticals and Medical Equipment Joint Stock 918,426,976 3,446,219,869
Trade and other receivables 212,529,725,076 - 212,529,725,076 Company
Short-term investments 256,983,146 - 256,983,146 Dividends payable to shareholders 542,193,278 770,960,328
Short term collaterals, deposits, mortgages 1,892,811,493 - 1,892,811,493
Other long-term investments - 500,000,000 500,000,000 Remuneration paid to the Company’s Board of Directors during the year was as follows:
Total 471,264,281,898 500,000,000 471,764,281,898

2014 2013
31/12/2013 VND VND
Borrowings 114,061,473,364 118,000,000 114,179,473,364 Salaries 1,680,580,354 1,459,215,000
Trade and other payables 124,417,994,611 - 124,417,994,611 Bonus and benefits in kind 1,610,441,930 1,583,890,192
Accruals 10,734,319,616 - 10,734,319,616 3,291,022,284 3,043,105,192
Total 249,213,787,591 118,000,000 249,331,787,591
Net liquidity gap 222,050,494,307 382,000,000 222,432,494,307
The Board of Directors assessed the liquidity risk at low level. The Board of Directors believes that the Company will be able
to generate sufficient funds to meet its financial obligations as and when they fall due.

28. SUBSEQUENT EVENTS
According to Decision No. 05/QD-HDQT dated 19 January 2015, the Company increased the proportion of its ownership
interest in Thai Nguyen Pharmaceutical Medical Equipment Joint Stock Company from 49% of the investee’s charter
The star of
capital (equivalent to 21,182 shares) to 51% of the charter capital (equivalent to 22,052 shares). Therefore, Thai Nguyen
Pharmaceutical Medical Equipment Joint Stock Company has become a subsidiary of the Company and is no longer its
associate.
Vietnamese Medicine
29. COMPARATIVE FIGURES
Comparative figures are those of Company’s audited consolidated financial statements for the year ended 31 December 2013.
Certain reclassifications have been made to the prior year’s figures to enhance their comparability with the figures of the
current year, details are as follows:
As at 31/12/2013 As at 31/12/2013
Before reclassification Reclassification After reclassification
VND VND VND
Note 6 - Inventories
Finished goods 89,649,200,221 446,008,718 90,095,208,939
Merchandise 18,143,818,695 (446,008,718) 17,697,809,977
2013 2013
Before reclassification Reclassification After reclassification
VND VND VND
Note 18 - Gross sale
Sales of finished goods 1,105,202,737,561 228,590,335,088 1,333,793,072,649
Sales of merchandise 584,381,282,723 (228,590,335,088) 355,790,947,635
Note 19 - Cost of Sales
Cost of finished of goods sold 423,235,903,317 237,902,642,940 661,138,546,257
Cost of merchandise sold 537,994,418,877 (238,314,764,498) 299,679,654,379
Cost of services - 412,121,559 412,121,559
Nguyen Ngoc Thuy Dinh Trung Kien Tran Tuc Ma

06 March 2015
138 BÁO
ANNUAL
CÁOREPORT
THƯỜNG2014
NIÊN 2014
TRAPHACO JOINT STOCK COMPANY
75 Yen Ninh Street, Ba Dinh District, Hanoi, Vietnam
T : (84-4) 3734 1797/ (84-4) 3683 0751
F :(84-4) 3681 4910/ (84-4) 3681 5097
E : info@traphaco.com.vn
www. traphaco.com.vn

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Developing corporate CULTURE

ANNUAL REPORT 2014

THE WAY OF GREEN HEALTH

RESPONSIBILITY GROWTH CONVENIENCE SATISFACTION SUSTAINABILITY DEVELOPMENT

RESPONSIBILITY GROWTH - CONVENIENCE SATISFACTION SUSTAINABILITY DEVELOPMENT

ORGANIZATION AND HUMAN RESOURCE FINANCIAL REPORTS

VISION CORE VALUES

MISSION Creative labor is the foundation for development

4 ANNUAL REPORT 2014 5

Dear shareholders, customers, investors and all Employees.

Ladies and Gentlemen,

Ladies and gentlemen,

Traphaco has bravely reformed, dared to think, dared to do,

6 ANNUAL REPORT 2014 7

Producing and trading of pharmaceutical products, chemicals and medical equipment.

GEOGRAPHIC AREA OF BUSINESS

OTC ETC Domestic Export

10 ANNUAL REPORT 2014 GENERAL INFORMATION 11

1972 A medicine production workshop of the railway health

Bonus share issuance for TOTAL: 6,003 24,670,430 24,676,433 100%

Source: List of shareholders as of 6 February 2015.

14 ANNUAL REPORT 2014 GENERAL INFORMATION 15

Non-sedating with tablet dosage

HONORED THE TITLE HONORED THE TITLE

16 ANNUAL REPORT 2014 GENERAL INFORMATION 17

A nationwide distribution system with the formation of 3 main distribution centers

Environmentally friendly Green Technology. Using more than 90% of pharmaceutical

18 ANNUAL REPORT 2014 GENERAL INFORMATION 19

ORGANIZATION AND HUMAN RESOURCE

GENERAL SHAREHOLDERS ASSEMBLY

Hoang Liet factory

22 ANNUAL REPORT 2014 ORGANIZATION AND HUMAN RESOURCE 23

24 ANNUAL REPORT 2014 ORGANIZATION AND HUMAN RESOURCE 25

DEPUTY GENERAL DIRECTOR DEPUTY GENERAL DIRECTOR DEPUTY GENERAL DIRECTOR

DIRECTOR OF PRODUCTION DIRECTOR OF SALES

RESEARCH EXPORTS, FINANCE

26 ANNUAL REPORT 2014 ORGANIZATION AND HUMAN RESOURCE 27

Year of birth: 1970

28 ANNUAL REPORT 2014 ORGANIZATION AND HUMAN RESOURCE 29

Born: 1974 Years with the company: 16 years

Ms. NGUYEN THI LUONG THANH Ms. NGUYEN THI LAN

Male 365 49 % Post graduate 38 5%

32 ANNUAL REPORT 2014 ORGANIZATION AND HUMAN RESOURCE 33

REPORT OF OPERATION ACTIVITIES

ACTIVITIES OF SUBSIDIARIES AND AFFILIATED COMPANIES

Total investments in 2014 : VND 60 bil / 70 bil target, including

Increase ownership at Thai Nguyen

Source: Audited Consolidated Financial Reports.

36 ANNUAL REPORT 2014 REPORT OF OPERATION ACTIVITIES DURING THE YEAR 37

REPORT ON THE BUSINESS

At Traphaco CNC: Increased chartered capital from

Researched and developed 45 new products and

AT THAI NGUYEN PHARMACEUTICALS

Increased ownership at Thai Nguyen Pharmaceuticals and

Deployed capital to build the factory within the project

38 ANNUAL REPORT 2014 REPORT OF OPERATION ACTIVITIES DURING THE YEAR 39

Building, promoting and protecting the brand

Representative company in the pharmaceutical sector to

Was recognized by Forbes Magazine as TOP 50 LISTED

Proud winner of the representative “GREEN BRAND” Award

40 ANNUAL REPORT 2014 REPORT OF OPERATION ACTIVITIES DURING THE YEAR 41

Corporate culture INVESTOR RELATION

ASSESSMENT ON THE ACTIVITIES OF

04 main pharmaceutical ingredients were granted GACP-WHO accreditations.