Ajanta Pharma Limited

Subsidiary Accounts

Sr No Names of Subsidiaries

1 Ajanta Pharma Philippines Inc.

2. Ajanta Pharma Mauritius Limited

3. Ajanta Pharma Nigeria Limited

4. Ajanta Pharma USA Inc.

IaJanta phalmg

il0ltl Uh tu'ldr

1286 S0r. Gil htd Ati o.. lindolo Stel

0r!y. 5{i tuMio, il*di By I m Phililpitr'

r&4 1350, 844 N056

10443580.hdt@oF oitom&tur

STATS"IENT OF IIANAGEMEIIT'S RESFONSIBILITYFORANNUAL ll.lCOME TAX RETURN

The management oI Ajanta Pha.ma Phlllpplnet, Inc. (A Whollyowned Subsidiary of Ajanta Pha.maLlmil€d) is responsible tor all informaton snd €plesenlations contain€d in lhe Annual Income TaxReturn for the year €nded Dac€mber 31. 2015. Manag€ment is likewise tesponsablo for all informationand ropres€ntations contiained in lhe nnanclal Stalements accompanying lhe Annual Income TaxRetlin coverlng the same reponing p€.iod- Fqrth€rmorc, lhe management ls responsible fd allinformaton and rcpresentations contained In allthe oiher tax retums iled for lhs reporting pedod,

including, but not limited, to the value added tax ard/ or percantage iax retums, witfiholding taxrelums, doclm€ntary stamp tar retums. atd any and 6ll other tax retums.

In this rcgad, the Management affims that th€ attached auditEd fnanohl statements lor the yearended December 31. 2015 and the accompanying Annual Income Tax R€lum are in accordance wjlhthe books and rscords of Alanta Pharma PhilipplnE3, Inc (A \ryholly-Owned subsidiary ot AjartaPharma Limited), complets and correct in all material r€sp€cts. Mahagement likewis€ affms thal:

a. the Annual Income Tax R6tum has been prepared in accordance wilh the provigions of theNalional Internal Revenue Code, as amended, and pertlnent iax regulations and other issuanc€sof the Departmont otFinsnco and the Bureau of InlemalRevenue;

b. any dispadly of ligures in the subtnitted reporb arising ftom tho prepa.ation ol financialstalements puisuant 1o financial accountinq stEndards and he prepa€ljon ot the lncome TaxReiurn purcuant lo tax accounting rules has be€n teported as €oonciling ltemsand rnainlained in

the company's books and records In accordance wilh the requiremenls of Revenle RegllationsNo. 8-2007 and other relevant issttancas;

c- the Al.nta Phantta Phlllpplnas, lnc. (A Wholly4wtled Subsidiary of Ajanla Pharma Limiled) has

,iled all applicable hx retums, reports and ltatehents requircd to be fil6d under Phi!:ppins taxlaws for lh€ rspoiing period, and all la(es and other inpositlons sholvn thereon io bs duo andpayable have been paid for fie r€lorti.g peiod, except those conteslgd in glod failh-

'%**ARAJESH MANI'IALAL AGRAWALChai.man of lhe Board and President

6/.,

saM s. GlosKosTreasu.erlchlef Finaroisl Offi cef

March 2,2016

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CPA

SEoQdrfissblild{er P cd@ rlb &125.f (O.(lp 0)Nderir ?6, mlt ltnd 0d Uadsi..20t3

RIPORT OF INDEPENDENT AUDfTONSTO ACCOMPANY FINANCIA1 STATEMENTS FOR FILING WITH THEBURTAU OF INTERNAL REVENUE

Tho Boad of 0irsctor6 and Sbckhotdo6Aenta Pharma Philippines, Inc.(Awholfoer€d SubSldlary of Aanta Pharma Limited)Unlt 710 tr,(A Life BIdg. 128 S€n- Gil Puyat Ave.Makati City

We havs audited the financial statoments of Aanh Phama Phitipptnes, hc. (AWholllao'rned Subsidhry of Ajanta Pharma Limiled), for the year endedDecember 31, 2015, on whic+t ws have rendered lhe atiachsd report dabdMerch 2.2016.

In cornplaance witt Revenle R€gulatons V-20, no partner of ou. frm is related by

K"No- 55001ol Accreditalion PA Control tlo. 8-726-A (croup B)

Novembq{ 26, 2015, Valid untll March 31, 2016Tar ldenfficalbrit']o. 1 01499-695BIR C€nificaFaPAcc.€dihtion No. 08-00354&o0t-2013- Aplil 01. rol3, Valtd unlil l\4arch 3't, 2016

PTR No. 5323997Janlary06.2016Mal€li City

March 2,2016

a} o**cANDAssocwr'ssinzruot trdEadY.TffiI

!.n,elh'r Av.@t2$r*rd cllt

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PfC.&A CsiLd. orRl$tand N.. @30Md.tr a.2d16v.ld lhd t)..dl$. 31, 201?

s€6 C.rfu. olAdffir Pl cdt lilt &1?*(amp Euhils 26, 2015, \'t& ul l&d 3t, m$

REPORT OF INDEPENDB{T AUDITORS

The 8o€rd ot Dirccto6 and StocthgldersAjsnta Pharma Phillpphes, lnc.(A Whollyo$,i6d Suhldiory of Ajanta Phama Limlted)Unit 710 AxA Lifo Bhs. 128 sen. Gil Puyat Ave.Makali Cify

Rcpod on lho Flnanclal Stateme.tg

We haw audi@ the ascompanyirE flnarchl sbt€tnents of Aianta Phafna Phillppines,Inc. (A Whollrowned Subsldhry of AJanta Pharma tlnitgd), wftiah compdse theslatements of financial positian as al December 31, 2015 6nd 2014, and the relatodstatements of cqnpli.hdnsive ihcdme, statem€nts of changes in stockhold€rs equityand stat€mentg of cash ioa€ for &|e yeaB thon €ndod, and summary of slgnificantacrounling pollci* and othor expbnatory notes.

lranagemerfs RerFonelbility for lhe Flnanclel Stat3ner|l3

Management is rs6ponsible for thg pr€paaation and fair pres€ntalioh of lhose linanclalstatsmenls in accordanc€ wih Phllippins Financial Reporting Stendar&, and for suchinlornal codrol as managemont doleminos b n€cigaaiy to enaue lhe preparaion ollinancial sLatements that arg fl€g fiom matedal misstabm€nl whslher du€ to fraud oreraor.

AuditoE' R63pon8ibility

Our responsibility is to €xpress an opinlm qn thes€ llnanclal statemenb based on olraudits. W€ conducted our auditsln arcordsnca with Philippino thndgdg On Audlting.Those standards requiF that r/s comply \,l,itr €thlcal roqulrcments and plan €ndperlonn tr|e audil to obtain t€asooalilg €ssllance lvholli€r tho financial staternents arsf s€ frcm material misslaiemonl

An audit Involve$ perbrmilg praaedures tg ot aln audit evidenaq about fie amauntsand disclosures in lhe finsncial staiomonts. The procsdur€s selected depehd on lhoaqdito/s judgmeni, lhcludlng lhe asi€ssmont of the riskt of matsrial inlgstatemenl offte financial sEtgmonls, whelhat dus b fraud ql enor. In making thos€ riskass€ssrnenb. tho. audiloa considers intemal conttol relevant to tlie enlitys preparalionaM falr p.€contaton of th€ ffnartid statemEnt in otder to deslgn audil pmcodua€s lhataie appropdate in tho ciBJmstanc€s, but not for lhe PUiPE € of erpressing an oplhion

on the effectiv€nBs of the entitys int€rnsl control. An audit stso indudes evaluatnqthe appropriateness of accounting polic€s used and th€ r€asonableness of accounhd6timales made ry managem6r*; as w€ll as e\ralualing lhg overall presentation ot thefinancial statEm€nb.

We boli€v€ that lhe audit evidenco ws hsve obtained is $rifficient and apprcpiate toprovida a basis foa our audit aDinbn.

Opihlon

In our opinlon, (hq financial gtatemsnG refened to above prssen! l€'rry, ln all materialrespects. he fimncial position of Aante Phama Phllipplnes, Inc. (A WhotlFownedSubidiary of Ajanh Pharma Limitsd) as of Decernber e1, m15 and 2014, and of jtsfinancial performance and ils cash fows tor the yeare then ended in accodance wjlhPhlllppins Financial Reporling Standards-

Report on lhe SupplomentaBf Information Requircd Udder Rlvenue Regulalionit$.20 !0

Our audit v{as conducted tor lhe purpose of forming an opinion on the basic finanalalstatem€oF baken as a whole. The supplemenlary infomalbn on bxes and lic€Dsefe€s in No.ts 25 to the financial statements is presented fdr puapo€€s of liling with theBur€au of liternal Revenue and is not a required part qf thg besir finanqial stEtemenb.The information is also not r6quired by Sec{dties Regulatlon Code Rulo 68- Suchinformation ie the responsibility of management of the Aahta Pharma PNlippines, Inc.(A Whouyowned Subsidiary of Aanta Phama Umlted). Thq info(madon h€s b€€nsubjecied b the audiiing pmcedures applied jn our aldit of the baslc fmancialstatemenls. In ou. oplnion, the information is fuirly stated in all matedal rcspecis inr€laton to lhe basic linancial stat€m€nts tak€n as {/hole.

CPA No. 55001SEocertjfidto of:Aecieditation PA Contml No. &,72GA (croup B)

NoGmb€46, 2olqvalid until March 31, 2016Tax ldentlficatFntrio. 1 01.49q695BIR C€rtift&tlofjccredlqtbn No. 08{0354&001.201 3

Apdl0l,2013, Valid until March 31,2016PTRNo,5323997Januatt 05,2016Makat Clty

March 2,2016

AJANTA PHARMA PHILIPPINES, INC.(A Whollv-Owned Subsidiary of Alanta Pharma Limited)STATEMENTS OF FINANCIAL POSMON

OEC:TIBER 31ffiASSETS

CashTrad6 and othar roc€ivablesInv€ntofles

210,491,t30161,4$,4,4

1,174,811

150.936,39591,705,470

F 15,3r6,14t P 17,322,350

Other d]frenl assetsTotEl Curent A56els

721

386,417,666 260,164,936

tilonourent A3set3Prop€iy and equipment-netIntangible assets

42,366,829 97,329,9322t0,tr0 452,431

Defen€d tax as€eb ,r 1,728,747 845,758Total Noncunqnt As56ts 44305,086 38,828,121

7 425,723,352 P 298,993,057

LIABILITIES AND STOCKHOLOERS' EOUITY

Curent LlabllruesA€count6 paFble and accrued liabilitbsLong term obligations under ffnance

laa6€ - curenl porliongtuid€nds peyable

NoncuFent LiabllityLong t6m obligations undea linanc€

Ieas€ - non.llllent portioiAdvances from a |€lated paiy

41t,2322 2 138,022,44:! P 87,149.118

Income tax payau€ 7,994,301 1 3392,525Tota! Cunent Liabililies 194.?82,5.14 104,e,60,ef0

3,6{5,9!O 4.018,99547,15OJ0O

6,f79,682 8,018.71631,0?3,/6:| 29,294,@1

To{al Noncunent Liabilllies 37,853,135 37,312,m

Tdalliabilidos 21r,645,779 141,973,413

Stockholders' EqultyCapital slockRotained eamings

Appropd€ted

8300,00o 8,200.000

185'a3r,,[2:t 145,800,000uneppropriared s 3,,453i15o 3.019,644

Toial SiockhaldeG' Equity 197,087,573 157,019.444

? t4t,723,352 P

Sr.Ic.@r.rrxrotro0a ra tilfuDr arrt d,t&

Wholly.Owned Subsidlarv of Pharma LimSTATEMENTS OF COMPREHENS tNconE

NET SALES ! 88.1,886,t09 533275,582

COST OF SALES '5 308,995,74.4 240,602,811

YeatE Endod Deccmlr€r ll" --,- 2014

372,890356 252,672,771

'6 1161,252,4151 1132,U2,fi1)

5 (236,i83)

GROSS tt{COME

AELLING AI{D MARKETIXG EXPENSES

GENERAL AID ADMINISTRATIVE EXPEI{SEs

INTEREST EXPENSES

FOREtGt't EXC]|ANGE GArlt {LOAS}

I!'9AIRIIE!'T LOSS ON RECEIVABLES

PROVISION FOR lt'tVEl{TORy OBSOLESCEXCE

GAII{ ON SAIE OF TRANSPORTATIOI{ EQUIPM€I{T

IMTERESTINCOME

(30,180,556) (32,342,544)

{1,0s9,827)

0q,417,513)

11,152.2711

8,283.815

{2.561,345)

368,273

93,843

AJANTA PHARMA PHIIIPPINES, INC.

INCOME BEFORE INCOIIIE TAX

IICOME TAX EXFE SE (BENEFIT)Cun€ntDefened

172,s!44{a

5r,71O.008

133,319,982

40.745,535

39,977,131

nET ['rcoit€

OTHER COIIPREHEI{SIVE I}ICOMEllel7ts to be rcelassified to proflt or /oss rh

srDsegrenf periods,tons nof ic t€ recragsfied 1o proin orbss

i|, subsequenl psdods

121,005,429 93,342,851

OTHER COMPRENENSIVE INCO!'E

TOTAL COMPREHEiISIVE IXCOME

s€.r4@rrrnrs Jvots i! 8rh&t , sar.ftrlt

of Aianta Pharma Lim

STATTMENTS OT CUANGES IN SHAREHOLDERS' EOUITY

AJANTA PHARMA PHILIPPINES, INC.

oAPITA! sTocK - F 100 par value

ComrDn Sha.$ - P10o Par valu€Authorized - 82.000 sh€res

000 shores

RETAINED EARNIT'IGSBalance at bsginning of lho ysarCash dividends

1,183t 9,6,t4(80,937,5O0)

17 2c6,794(21 .730,000)

1s!,0!!i1! l_ _l!z!Ega

Nei income 121.005/29 93.342 851

Rstatnsd eamrngs et end @Approe qtion t: (18!'€,a4?1) (1a?'990r9qq)-B;l"n-;;G;atr' 3,,153,150 3,01e,644

sr.lc@r-yiralrot t to FrrdcrrstLa.'6

AJANTA PIIARMA PHILIPPlNES, INC.(A Wholly-Owned Subsidiary of Ajarta Pharma Llmited)STATEMENTS OF CASH :LOWS

rs EIdsd Docembar 3'l20t6

CASH FIOWS FROM OPERAIING AqNUNESIncome bQfore ancom€ lax

Gain on sale offansponation equiBnehtInt6re6t incolneInt€reat expsdseslmpainr€nt lo6a on receivablesPlovision ior inventolyobsolgscan@

Trad€ aod oth€r rec€ivabbs

Other curent sssetsIncre€se (d€cresse) in:

P 172,432,44 B .133,319.982

s {'t28,881)

" 1.099.8276 3q483

(368,273)(93,843)

1,152,271

2,fit.u5Depr€ciation a6d anortization erelTrrs 7,128,690 7,270,29€

Op6latin9 incofto boforgMrklnO c€pitalchanges 181,168,567 143,U1,7A1

Accounts payable €nd ac!rued liabilitios 1r 48,373,324 (,18,571,7€4)Cash.g€nBraied fr.m operations 1031A2,954 e8.030,133

lncoft€ lax psid

lnierest received

(85,5s4,734) (22,829,149)(59,730,08ii) (4311.333)

1E74,1frt (99/412)

,, {68,i00,9€7} {3s,896,003)843

CASH FLOWS FROM INVESTING ACTIVITIESPaoc€eds flom sale of Aanspo.tation equipmentAdditions to properly and equipment

Net casi flows from acuviti€s

Addition of illet cash flows used in

Cash dividendsNel cash us€d in fin acllviti€3

CASH FLOWS FROM FI}IANCING ACTIMTIESN€t availment (payment) of long lerm obligations

under flnanc€ l€asehte.€el pakt

11,u2,129t({,099,827)

({,006,209)

17,32,,350

368,273(6,357,070)

734,565

11,152,271\

5,601.841

11,720,509

N€'T I}IAREASE (OECREASE) IIi CASH

CA€}' AT BEGINI{I}.IG OF THE YEAR

CASI AT END OF YEAR

s.a edrrp.rttv ro'.! ro FraE .r srr.rdIt,

AJANTA PHARMA PHILIPPINES, INC.(A Wholly Owned Sub3ldiary of Ajanta Phsnna LlmitedlNOTEA TO FINANCIAI STATEMENT!}

t. Co.poratelnfonna0on

Ajanta Phdme Philipplnes, Inc. (a Whdy€wfled Subsidiary of Ajanta PhamE Limited)(tho Company) was incorporated in the Philippin63 and regist€r€d with lhe Securities andExchangg commission (Src) on Apfll 11, 2008. Tho Company was organizod primarilyto manufaclure, impott, s€ll or olherwlse disfibute on wholesale, dru99, m€dicines, andphamaceutical products of all klfits and d€6cllption9, and to estabibh and maintainfaciliti€s for rnanufacfurq importalion, salg, distdbufon and prornoti\tn on a commercialbasis of such dn-rgs and pharmaceutical pEdqcF and to provide technical know-how andconsuft€noy in relation to the manutudurq oJ drugs, medicinee and pharmaceutical

Produclt.

The principal ofnce of the Company b Unit 710 A)(A Life Bldg,, 1286, SEn. Gil PuyalAve., Makatl Cily.

Tho aocompanying fnanchl statomenb of the ComFny as of year ended D€cember 31 ,

2015 vre,€ authorized Jor issue by the Boad of DirectoB (BOD) on March 2, 2016.

2. B|gis ot Prgparatlon and Statomont of Gompllance

Basis of PreoaBtionThe financial slatemenls of lhe Company ha/e b€en prepared using histodaal co€t basis.

Funclional and Pr€6enlation CunencvThe finanaial statements have been prcs€nted in Philipfino Prso wl{ch is the Companysfunctional and presentration curency. All amounts are roundod !t the nearesl peso,

unless othen^,iso ind;caH.

Exembtion trom $e Mardatorv Adoptbn of PFRS for SMESEven if the Company did nol meet the threshoh in lerms !f iF assets and liabilities as ofyear ended December 31, 2014, the Compary falls on lie o@mption for the MandatoryAdoption oI PFRS for SMEs 6lnc6 it is a subsidisry of the paaenl compsny r€portiag undorthe full PFRS. Hence, the company sdopt€d full PFRS.

As of year end€d December 31, 2015, fte Company already met the tir68hold in terms ofits asseb and liabilities.

Stateriert of Compll€iceThe accornpaMng financlal st€ternenb haw been prepat€d in e@rdance wiih PhilippineFinancial Repdrthg Standa.ds (PFRS) Esued by t1|e Philippine Financlal Reporlinggtandards Council (FRSC) and adopted by he SEC, includ:ng the SEC provisions.

The financial reponing f,arne{,ork indudes PFRS, Phillppine Accounting Saltdards (PAS)and Philippino Interpretal-rons fom l.$emational Flnancial Reporting lnterpretalionsCommitee (lFRlC).

The accolirting policies set out below have been applied consistently to all pEdodspresented in th€s€ financbl dtatements, €xc6pl for th6 chang@ In accounting policiGs asoxplained below:

Adootidn of ltlE / and Revised PFRS

Th€ accoufilng pollcies edopted are consistent wlth lho6€ of the previous tilancial year,except lor lhg adoption of ihe tollou/ing new and amended PFRS end Philippin6Interp|etat-ron from lnlemalional Financiel Reporling Inlerpretation Committee (lFRlC)which the Conipany adopied efective for anoual periods begjnning on or after January 1 ,2015:

. Amendment to PAS 16, Propgdy, Plant and Equipt@nt - Revaluation Method -Ptoponbnate Restat6.m6nt ol A@umuhted Deryociation and PAS 38, ,nt rgibleAssots - Revarratior liethod - Ptolr,tlfo,nate Restatonunt of A@umulabdAno&'zalion- The amendmenl darifies hor| $e grogs canying amount and heacciJrnulgted depreciation / amodiza{on a|6 irealsd whsn an entity uses therevaluation model.

. Amendmenb to PAS '19, €/rproyog Benefrts - Deftned Benelft Plans: EnplopeContribrfbrs - Th€ am€ndm€nts cladry he requiremenls on how contdbutions fromemployees or third partjes thai are linked to setuice should be attributed to periods ofseNice. In paaticulaa, conlribulions thal are independent of the number of year ofseflice can be r€cognized as a aeduction in tho seryice cbst in the period in whichthe related service is rendered (lnstead of altribuling lhem to the periods of servlc6).

. Amendmo&t to PAs 24, Re/ated Parfy Dl:sc/osoas - Key Mdnagenenl Pol"som€l-The amendment clarifies how payments !o enlilkrs provktirE key managementpersonnel serviees are to be disclosed.

. Amendment to PAS 40, hvost ert Ptcp9tty - Ciarilying the lnte elationshipbetwoen PFRS 3, Businogs Conbioation, dtd PAg 40 Meh ClassiMng Pro@ny asivestnant Pmpeny or Owner-c(f'upied Prcpedy- the amendment cladfies $eapplication of PFRS 3 and PAS 40 ln respect of 6cqllsitonE 0l Investrnent property.PAS 40 distinguishes investmerl property from ownor-occupied property andPFRS 3 dotermines whether lhe acq,.risition of an inveslment property is a businesscombination.

t Amendrnont t0 PFRS 3, Business Cotnblnalions - The amendment excludes ftom itsscope the accounting foa tho fornation of any joint anangement in the fnancialslatements of the joi arrangement itself,

. Amendment to PFRS 8, OpeBling Seg,nents - AggBgation of Oqrating Segmentsand Recorciliation of the Total ot tt6 Repoftable Segrronls' Assets to tho E ttlybA$efs - The amendmenl requirca lhe disclosure of managernont judgments inapplying lhe aggregation ({lteda to opeaating segments, and'rcquires re@nciliationsof the total of lhe reporhble segments' ass€ts to the entitys assets are required onlyif lhe 6egment assets ale leponed rcgularly.

Amendment to PFRS 13, Fait vdue Maasutement - Short-ierm Recetnablea andPayebJes and Potttulb Excaptbn - Th6 am€ndment clarities thet ihe portfolloexception in PFRS t3- allowing an entlty to m€alure the fsir value of a group oftinarEial agsets and finsnclal ljabilities on a ng! tlasis - applies to all contrac'16(incfudlng noo-fnancial) wiihin lhe 6cop6 of PAS 39, Finahcial lnsbun1€,nls:Reeog,nilion and Measurcme'tl or PFRS I, FinaDaial lnstunents.

The adopuon of tho foregoing new 6nd rovis€d PFFIS did not have any mat€tlal €ffecl onlhe linancial statoments. Additional di6doguBs have been included in tho noi6s tofinanoial statemenb, as applicable.

New and Revised PFRS Not Yel Adoot€d

Relsvanl nelv and revised PFRS whch a.€ not yel effect'vs for the yoar ondingDecernber 31, 2015 and have not b€en applied in prepadng the financial statements aregummarized beloll,.

Effective for annual p€rlods beginning on or affer January 1,20161

. Amendmentr to PAS 1, Plgsenlatbr of Fhancial Statengrfs - The amondmentsclarify gulJance on matedality snd aggregation, the presontation of sublotals, lheslnrcturc of financial statehonlq and the disclocure of accountlng polici€s.

. Arn€ndm€nb to Pr\s 16, Pto@tly, Plant and Equipnent - Claification oI Aocopf€'bleMotpds of Deprccialion, and PAS 3E, ,nhngrble Assets - dartrpalbr ofAcrepfabbMalhods ofAnoftisation - The amendmenb add guidance and clariry $at (l) the useof revenuB-bas€d methods to calculate lhe deDreclalion of an asset is notappmpriale because revenue genoaated by an aclivity that includ69 tho use of anasset g€neElly reflects factors other than lho consumption of lh€ economic benelltsenbodied in lhe asset, and (ii) r€venue i6 generally pr€6umed to be an inappropriaiobasb for measuring the consumpllon ot th€ economlc benofiti embodkrd in anintangible assot hor /€ver, thie presumption oan bo rebutled in celtain limlteddrcum$ances.

. Amendmenls to PAS 16 and PAS 41, Agrbur&rc:B€arer P/anls- The amendmenisdefine bearer planls - i.e. lMag plantg which are used solely to grow produce ov6tsevere periods and usually scrapped ai the End ot tish productive lives (o.9. grapovines. rubber ue€s, oil palms) - and incllde lhem wilhin PAS 10's sclpe whilo lhoproduce grcwing on bearel plants r€tnains wiirin tho sc,ope ot PAS 41.

. Amendment to PAS 19, Enpbyaa Banafrt- The amendment darmes thal lhe highquality corporaie bonds trg€d in estimating the discount rat€ for post-€ilploytneribenefits should b€ dehomlnaled in tha s6in6 curency as th€ benefits to be pald,

. Amendrnents to PAS 27, Separcb Fhonchl Stdten'€,nts - Equily Met6d ln SoparctoFinancial Statenwts - the amendmenb rein3taie the equity meihod oplio allowingenlities lo use O|e equity method to accounl toa invostrnents in 9qb€idbri68, jointvenlules and a6sociates in lheir E€paraie financial statemenla.

. Arnendmont to PFRS 5, Norfcr.rtenl Assets Held for Sab and DiscontinuedOperaficns - The amendment adds sp€cifio guidance lvhen 6n erilty ech6sifies snass€t (or a disposal $oup) i'om hdd tor sale to hold tor dislribution to owners, orvice veasa. and for cases v'rhere heH-for{istribulion accouding is discontinued.

. Amendmenl lo PFRS7, Finaraial Inst,.,nents. Disclrsures - Th6 amendm€nl oddsguidance to clarit whelher a !e lcing conkact is conlinuing Invofuenont in akansfered asset

. Amendments to PFRS 10, Consalidated Financlal Slatetnents, and PAS 28,Investlnents rh Assqcialas and Joint Ventu'es - Salo u Contibution of Assetshotween an lnvestor and its Associai€ or Joial Ventur€ - The amendments addrcss ac!..gnt conflicl between tb6 lwo standard8 and chriry that lh9 96in Or loss frorn saleor oonlribrdion of assets betlvo€n ar invsslor €nd its associale or ioinl yonture shouldbe recognlzed tlrlly when the trans€ction invofues a busin€69, aid padially if itinvolves assets that do not constiMe a business.

. Amendmenlg la PFRS 10, IFRS 12, D/scloslrg of ,r,feresls.ir other Ehtitias, a.dPAs 28 - lnveshtent Entities: Applying the Consolidation Ey@plb, - Theamendments clariry the application of the conaolidation exc€pton for invesunentenlitils and lheir substdiafies.

Amondments lo PFRS l'1, Joitl Arangenents ',46c!rundng for Acquisitions oflhtercsts in Joht Opeftthns - The anenaknents aequire an acquirer of an interest ina joint op€retion in which lhe aclivity constitutes a businesG (as d€tined in PFRS 3) toapply all of the busine$s combinations aacounling principlas and disclo6ure in PFRS3 and other PFRSS, ercept Jor those prlrciples thal confli..t wih the guidance inPFRS 1 1 - The amendments apply bolh io the initial acquisiiion of an inter€st in a Fintoperation, and the acquisition of an additional Inle.est in a joint operalion (in lhe latlercas€, previously held inteaests ar€ not remeasured).

Efieclive for amual pedods b€ginning on or after I January 201 8:

. PFRS 9, Finaneial lns'lJn'€nts - This slandad will replace PAS39 (and all lheprevious versions ot PFRS 9). lt prcvides requirements for tho ctassmcatun andmeasuremenl of financial assels and financial fiabilfties, impaiment, hedgeaccounting and derecognition.

PFRS I requifes all recognized financral assets lo be subsequenfly meagurcd alamorlized cost o. falr value (through profit or los6 or througl other compteh€rciwincom€), depending on their classilicaiion by.efe.ence to the busine€s model withinwhich they are held and lh6ir conh€ctual c€sh flov char€claristics.

Far tinancial liabilid€€, lhe most signifiQant 6ffec't of PFRS 9 relates to cas€s.wherelhe fah value option b taken: ths amounl of chan96 in lai. value of a financial liabilitydesignated as at fair value lhrough profrl or loss that is attibutable to changes In thecredit risk of ttat liability is r9€rgnized in other eomprehondve income (ralher lhan inprofit or loss), unbss ihis e.sate€ an accountng fiisdratch.

For the impairment of financlal assets, PFRS I infodloes ar '€xpect€d credit loss'mod€l basod on the concept of providing for oxpectod los€€s at inc€ption of acontract; it will be no lotgef nece$ary ior gbiective evidonco of impairmenl befo.e acredit lo€s

-ls recognized.

For hedge accounling, PFRS 9 inlroduces a substantal overhaul allo$rlng tinancialslatemenls to befler reflect how dsk management aclivilies aa€ undertaken whenhedging financial and non-financiral dsk exposur€s.

The detecognition p{ovisiona ara oattbd ovor alrnost unchang€d frorn PAS 39'

Under p.evEiting circumstances, the adoPtton of the foregoing new and revls€d PFRS is

not exigat€d td hav€ any matenat offect on lh€ financial sEtements of the CompanyAdditidnal di6closures wil|b€ included in he financial statements, as applicable.

Clrenl versus Non.cunent Cla$iticalionThe Company pr€sents assetd and liabilitis6 in statemeni oI financial position basod on

cuaenunon-cur€nt classific€tio||. An ass€t is cunent when it isa

. Exp€ciad lo be realized or intended to be sold ot consum€d in the nornal op€ratingcycle

. Held prlmarily forthe pu.poso oft'ading

. Expected to be Galized within ttvelve monlhs atiea the roporling period, or

. CAsh or cash eqlivalent unle€g resficted from being exchanged or used io sette aliability for at least twelve monlhs afier the repo lng psriod.

All other es6€ls are classifi€d as non-curent.

A liability is clnent when:. lt is €xpected to be sottl€d in the normal operating cycle. lt ls heE primarily for ihs purpose of trading. lt is due to be setded lvithln t\Nelve months der the roportng perlod' or. Th€re is no lnco.ditional dghl to defer the settlement ofthe Iability for at leasit t$,elve

monlh3 after the regor{ng period.

The Comparry class les allother liabilities as non-cunent

FirIancial :nstrumentsFlnancial instruments are t€cognized hitially at fair value, Transaction costs 3re irrclud€d

in the initial mesurem€nl of all fnancial €gsets and liabilltles, except for financial

instrumenls measwed at lair value through profit or loss (FVPL)

The Company recognizes a fimncial ass€t or a finarcial liability In the stalemeni offinancral position when il b€com€s a pa.ty lo the contractu€l pro/iaiohs of the instrum€ntIn the csse of a reguhr way p!rch€s€ or sal6 of financial asseis, rocoOnition andderecognilion, as applicable, is done usino s€td€mgnt date accountng.

Financial insltuments are olassilied a3 liabilitles or equity in accordance with ihe6ub6idrco of the conttaotual gnangefioit Int€rest, dividendg' geins 6nd losses r€latngto a financial instrument or a component lhat is a financhl .liability, are report€d asexoense or ihcome. Disttibuuons io holdeas of financial instruments classified a5 equilyare charg€d diEctly to oquity net of any .elated incom€ tat b€nefits.

Financial assets aro clEssited into th€ lollorring catsgo.ies: Financlal assets at FVPL,

loans and r€ceivables, h€ld{emat'rdty (HTM) investtnents and availablefor€ale (AFS)

liMncial ass€ts while financial liabilit€ a€ cb€sltied as €ith€r financial liabilltlos at FVPL

or other filancial llabilities. The alssslfcalion depends on the purpose tor which thefinancial Instumenls were acquired and whother lh€y are quoted in an active mafiet.The Company delermines the cla6sfficatlon ai initial rooognitlon €nd, where allo{ed andapprop atq re-evaiual* this dFignalbn at every repoating dato'

Financial Assets at FVPLA fnancbl assei is cls6sified in hb c€tegory if acquir€d prlncipally for lhe pu.poso ol

selling or repurEhasing in tho near term or upon initial recognfionj A is designated by f|emanagemenl al FVPL. Derivatives are abo categorized as held at FVPL. er€€pt thosedarivatives designated and considered as €ffe.tjve hedging instruments. Ass€ts ch6sifbdunder lhis calagory are c€fiied at fah value in th6 statgmenl o{ financial pGition.Changes in the fak value of such ass€ts ar6 accounl€d fd imn€dlat€ly in the statemer ofcomptehensive lncort€. Financhl as8€t3 at FVPL a€ da€sltied as current assets if theyare spected to be realized withln 1 2 month6 from the repodlng date.

Flnancial assetE may bo de6lgnated at lnilhl reoognltlon as at FVPL if ttle following criterjaaro rnot (i) the desigmtion eliminates d signiflcantly roduc€s lhe inconsistenl treatnenlthat no{rld olherwise arlse from meosuring lhe a8s'els or r€cognizing gEins or losses onlhern on a difiefent basb: or (ii) ths a6s€ts are part of a group of financial ai96b wh:ch arenanaged and their pe.fo.mancg oEbated on a fair value basb, h accq(lance wilh adocunenled risk rmnagement slrategf or (iij) the finanobl assets coilrin an embeddedderivaiive that would ne€d to be separately reco.ded.

The Company has no fimncial assds 6t FVPL as ot December 31 , 201 5 and 2014.

Loans and Recei\€bleoLaans and recei\rables arc nonderivalive financial assets with fixed ol de{eranlnaNepaytterts and arc nirt quoled in an active rnarkd, Such assol! are caried d smontedcoot using th€ eff€c1ive interest mathod, Gabs and lo88s are r€cognizrd in lhesliatement of comprehensiv€ income when th6 bans and recelvables are dorecognized orimpaiaed, as wall ?$ lhrough th€ amortization F}roce€s. Loans and recei\rebls ar6includ€d in currenl as6ets if nEturity is within 12 mor{hs from the repor:in! date.Ofiefluise. lhese ale daisifiod as noncufeil assets.

Chssifed as bans and receivables are fte Oof'1pany'g cash, t€de and other receivabl€s(exclqding advances lo slilpliers and advances srrbject to liquldatbn) {see Notes 5 and6).

HIM lnvestmentsHTM investments are quoted nond€.ii/alive financial ass€ts with fixed or dete.minauepaymer{s and fxed nEturilie€ which thg Co pany h6s the positive ir{eniion and ability !ohold to matudty. HTIII assds are cafiied a( cost or amortized co8t in the slatement offinoncial position. Amoatization ls ddeamined using the effeclive ideaesl rate rnethod.

The Company has no HtM investme|lls as cf D€cember 3l , 2015 and 2014 .

AFS Financial AssetsAFS fnancial assets are those nonderiuative financial assets that are de€ignated as AFSor a€ noi classified in any qfthe thre p.ecedhg categories. Afref Inftial recognltlon, AFSfinancbl assets ar€ nFasured at fat yalue wnh g6ins or b6se3 being rec€nized as paddf other clinprehensive incane udil lho inv€stment i9 derecogrized or until th€inveslfteit is dderrnined to be impaiied at whbh lime the cllmllative gain or lossprevio{rst r€ported ln €quily b includ€d in the statemer( of ooriifirbh€nsive income. AFSfinancial assets are dassilied as currsnt if thev ar€ exoect€d lo b€ r€elized within 12nbnths trom th€ reporting dat€.

The Ca.npany has nq AF6 linancial ass€lr as of December 31, 2015 and 2014.

Financial Lbbililies al FVPLFimncial liabilities at FVPL Include financbl liabilitie€ held for trading and finarEialliabilities des(rnated lpon inidal rccognitlon as al FVPL. Financial liabittlies ar€ classilied

as held for trading it th6y are acquired for the purpose of selling in the near termD6rivatives, inctuding sepa€ted embedded derlvatives are also cb$med as held fortrading unle6s they are designated as efiective hedging instruments. Gains or lcses onlhbllities held for trading a.e r6cognized as profit and loss.

Firiencial liabilities may be d€eignalgd st initial reoogn|ion as at FVPL if tt|€ aollowingcriteria are mel (i) the de6ignation oliminates of eignilloantly reduces the incansbtenttr€atment that wolld otherwiso arise ftom m.aguring tho liabiliti€ or recognizing galns o.lo€ses on them on a difterent basiE; or (it lho liabilities €re pa.t ot a group of financialliabllfties vrhich are fitan:rged and thelr p€dormance evaluatod on a loir value basis, inaccordance with a doclmenled risk management gtrategy; or (iii) the limncial liabilitycontains an embedded derivative thal would need to be separately recorded.

The Company has no financial liabilities at FVPL as of December 31, 2015 and 2014.

Othef Financial LiabilitiesThese include liabiliti€s that sre not caried at FVPL. The86 liabiliues are recognizedinitislly ai iair valu€ ard canied at arEortized cost with amortization determined using theeffeclive ir(erest mdhod.

Classifi€d as other financial liabiliti€s are the Companya accounts payabls and accruBdliabilities (excluding stratutory payebles), long lefin obligations under finance lease,dividends payable and advanc€s lrom a related pariy (s€€ Notes 11, '12, 13 and 21).

Financial GuaranteesA financial guarantee is classified in ihie category if the entjty must provide lor paymetts tob€ made if and only it the debio. failr ta mako payment v/hen due. In order for a confaclto meet tbe d€finition of a guaranle6 it would be necessary th€t the gua.ante€d party onlyreceive the exact amourt lost dle to the default of thE debtof. Such a contracl colld bestruclured jn two ways: (i) lhe guarantor purchases the delaulted loan for its nominalamount in6tead of makilg a payment for th€ best estimate of loss; or (li) on settlement ofthe linal lo$, there is a further payment between the guarenior and guaftrniBed pa.ty forany difierence betwegn that amount and lhe initial loss estimate that was paid.

Such eootraots are recognized initialty at fajr value and subsoquently car.ied at the highorof the initial valle and ths value that would be r€cognized if PAS 37, Provis,bns,Contingenl Uaullties and Cordingetta Assels, or PAS 1 E, Rdvet{re, vraa appli€d.

The Company has no financial guaran:ees as of December 31, 2015 and 2014.

Ogrecoonition oi Financial Assets aad LiabiliiiesFirancial Assets. A financial asset {or, wh6r€ applicable a part ot a linancial aEset or partof a group of shllar finencial assets) is deiecognized wh€n:

. the rightg to receive cash flows tsm the sset have expir€d:

. the company r€tains the right lo reeive cash flows fiom lhe asset, but has asslmedan obligation to pay them in fullwr-thout material delay to a thid party under a 'pass-throwh' ai.angemenq or

. the Company has transfen€d its rights to recaive cash flows from the asret and either(a) ha6 fansfened sub6lantially all tho risks and r€werda of the asBet, or (b) hasneither transfened nor retained substantially all the risk$ gnd rewardE of the asset, buthas transferred conro: of thE assel.

Wllen th€ Conpany has transfened lts rights to recoive cash tloM/s from an asset and hasneith€r lransfen€d nor retain€d sub6tantially sll the riekg and a€werd3 of lhe assel nortranstened confol of the asset, the assel b recognized lo the exto't ot lhe Company'6continujng invoiv€menl in lh6 asget. Conlinuing ilwolvemenl that €kes the form oJ aguarar*ee owr lhe tansferred a6aet b meaBured at lhe lolver of the odginal carryingemounl of lh6 ass6t and the maximum amount of oonsidsratlon that the Compar\a @uldbe required to rePay.

Finaicial Liabilltes. A financial liability is dereclgnizod when the obligation under trleliability is discharged. cancelled or has expired. Vvhere an existjng fnancial liabillty i6replaced by anoih€r fro.n lhe samo lande. on substantialv different tems, or the terms ofan erlEting liability aae subgtantially modiired, suoh ar oxchange or modification ls treatodas a derccognitlon of lhe original liability and the Ecognition ot a new llabilily. and thedifference in the respectiv€ ca.rying amounls is recognized in he statBment ofcomorehensivs income.

lmraiment of Financia, AsselsTha Company assess,€a at reporting date $/hether I tinancial asset or group of financialaggets ls impaited.

A tinancial asset or a group of tinancial assets is deemed to be impaired if, and onv if,there is objective evidence of impairment a9 a rc3ult of gne or more svents that haveoccured afrer the initial rocognition of the 6sel (an indned loss evenl) 6nd that losgevent has an impoct on the e.stimated tulure cash tlor,{a of the linancial asset or lhe groupof financial sssets that can be reliably estimaled.

Asse.ts Caried at Amoftlzed Cosl For ass6b carded at amortized co6t such as loans andreceivables, the Company filsl assoss€s whethor objeclive ovidence ot impairmenl erjstsIndividually for financiat assets that are individually significant or collectively torflnanclal assots that are not individually signifcant. lf no objedive evidence oflmpairme l ha8 b€en identifled for a particular finarrial asset that was ind:viduallyassesse4 fte qompany includes the asset as part ot a group of financial asset€ pooledaccording to their cred:t risk characleristlcs and collectively agsesses the grcup jo.impairment. Assetg lhat are individually assessed for impairment and tor wliich animpairment loss ls, or contnuea lo bs, recogniod are not included in the collectivelmDa:ament €saessment.

Evuence ot impairmenl toa sp€ctftc impgirnent purposes may include indications that theboro/ver or a group ot borrow€rB is erperiencing finarcial djfiicllty, delallt or dolinqu€ncyin pdncipal or Inleresl payments, or may enter into bankrupicy or olher form of financialreorgankation intended to alleviate the financial condition of the borower. For collectiveimpairment purposes. evidence of Impaimeni may Include obs€rv€blt daia on oxislngoconomic conditions or indlstry-wirje developments indicating that there ls a measurabl€decrease in the estimaled fufure cash tlo$/s of th6 r€latod aggets.

lf there h obieclivo gvidence of impairn€nt, tho amouni of lo6s is messured as lhedifforcnce belween the assefg carrying amounl and th€ present va,ue of estimated fulurecash llous (sxcluding future cr€dit lo65es) discolnted at the fnancia! as.e€fs originaleffectivEinterest rate (i.6., tho off€oilve interGt rate compuled at initial fecognition). llmevalue ia gen€rally nol con6ider6d when the dfec't of dlscounling lhe cash fo,vs is notmabaial. tf a loan or rocoivablg ha3 a variable rate, lh6 discount rate for m€asu.ing anyimpairment loss i6 the cu.renl offoctive inlerost rato, adjusted tor thg originel caedit dskpremium. For colbctive impaimenl purpo66q impeirment lose t9 co.nput€d bas€d ofltheir resp€ctive default and hlstotical lo6s expedonc€.

8

The carrylng amounl of lha .asaet ahall be raduc€d eiher directly or through u8e of anallot/vance aocount The impaifinent loss for the pedod shall be recognhed In profit orloss. lf, in a €ubsequenl period, lhe amount of the impei.ment loss d€a.6ares and thedecrease can be relatsd ob.iectively to an ev6nt occunihg attsr lhe impairmeni wasrccognized, the previously recognked impairment loss b reversed. Any subs€quent€ve6al of an impairment loss is recognized in profit or loss, to $e e,dEnt that the caryingamount of lh€ assel does nol gxcted fts emorlized cosl at the eversal date,

Ofisqfthg Financisl lnslumenls. Financial esseb and financlal liabilities are offset and then€l amounl is reported in the atate6enb of financial position lf, and only it, thEre isa cun€ntly onforceablg bgal dghl t9 ofrel the recognlzed amolnts and lhere is anintention la selde on a nat basis, o. to r€alke the a$set and setde fre abllltysimultan€ougly. This is not gonorally the oage wlth master neting agre€mignls, and therelated asset6 ?nd liabilities ar€ present€d gross in Ure slatemenb of financlal position.

lnventode9lnvenlodes include medicine6 and olher pharmaceutical producb,

lnventories are initialry mrrasu,ed at co€l. Costs include pu.chdse price and all incidenlaloo€t neceggary io b.ing the inventory io its saleable condition. Subseqlently, lhese aroreported In lhe stalemont6 in financial position at the low€r of co€t and nel realizablevalro (NR\4. Cost is calcuhed using lhe weighted aveEge method.

NRV is lhe estlmaled selling price in th€ ordinary course of business, |ess ihe c6ts ofcompleton, ma*eting and distribulion.

An allorance for inveniory obsolercence 16 provided for slot!.moving, gbsolete, delbotir€shd damaged inv€nto.i€s bes€d on physical inSpeclion and managernert evah€ on.

When lhe net realizable value of the invenlories 'F lou/er than th€ cost, lhe Crrnpanyrecognizes an inpaiment los6 lor lhe d€cline in lhe varue oI lhe inventory. The anbunt ofsny rcversal of any writedo\,vn of in\&ntories, ariglno fom an increage in net reallzablevalue, is recogniz€d in paofit or loeg i|l f|E padod in which lhg revelgal ooc1lr9.

When inventodeg are sold, lhe canying qmou Ofthoee inventori6 is .e@lrized as anexpense in tho freriod in which lhg relatod lovenue is r€cognizod. '

Prooertv and EouiDmerdProperty and equipment are initially meagured at cost and are presenled in the financialstaiem€nb at cost less accumulated deprecialion ahd amorlizgtion and any aocumulaledimpaimgnl in value. Such cost indudog th€ coqt of replacing part of ths prqperty. plar{and €quipmeht at the time that cost is incuned, if tho recognition cdteda are met, andexclud6 the costs of day-to{ay seNicing.

The inital cost of properg and aquiprnent compri6es lts p!rchase price, including impoftduties, laxes and any direc{y attribdsble cosi8 of bringing tt|e asset to lts workingcondilion and location lor ils lntended use. oost also includes arry rehted aes€l rotirementobligation (ARO) and interest incuaed during th€ consfucdon poliod on tunds borrc','/edto finance lhg construclion of th6 proj€cts. Exp€nditlre5 incurred after lhs firod assetshave b€en put into operalian, sudr as repairs and maintenancg and oveftaul costs, arcnormally charg€d to deferred d€velopment co€t in th€ pe*ld lhe cost are incuned. Majorrepair5 are capil,alized as part of property and €quipment only when it is probablo tltat

i r:r.r:.tr, :rrt, ._ :'-'

fulurg €oonomic beoofits agsoclaigd rrr'lh the lioms will flow !o the Company and the cosloI the itemg can be m6asured reliably.

Depr€clalion is calculated an a straightline b€6b over the 6dimal6d lives ot theolo!€atres aE follows:

Condominiun Unil€ 20 y€atsTr€nsportation oqulpmentOflco EquipmentOffice Flrnilure and FixtuaeCommunicalion equipmenl

5 yeara2 yearB2 years2 yea6

The carrying amounk o{ prop€rty €nd equipmed gre rsvieued for iinpaitment vtlienevents or changes in circumslances indicate lhat the carryino amoud may not berecovorablg,

Fully depreciated assols are .etained in lhg accounts unlil they ars no long$ in use andno fqrthar depreciatiOn and amortizaiion are aecognked in prcf4 of.loss.

An item of properiy and equipmed is deracognized when either lt hag beendigporod of or when it i9 permanenlt wilhdfawn ftom use and no fufure economicbeiefits are €xpgcted tom its use or disposal. Ant oain or loss arising on the etirementand dispGal of an item of property and eqlipment (calculated as lhe diffe.eneo bat/veentho net disposal procosds and the ca.rying amouri of lhe aseet) ls included in p.ofit orlo53 in the period of rcliremenl or diqposal,

lntanoablo Assetshbngible assets ar6 lniliafiy measu6d at cosl a.d are subsequently moasu.ed at @s1less acoumulaled amortiz€tion and any accumulated lmpakment loss. Th€se areamortized ovei €stimated useful life of 3 y6ars using the straight--line method. lf there isan indicatbn that there has been a srgnifcant change in amortizalion late, u6etul nt€ orresidual value of an intrangiblo a€gel the amortization is rov'r6ed prospectively to reiectlhe now oxpoctatiom.

Intangiblo assets are de.e@gniz€d wh€n thesdaggets are dlspos€d ot or when no futureecoromic benefits ar€ expectod from lhe6e Easots.

lmoairnent oI Non-fi.anoial AssetsTh6 canying valuqg ot propetq and equiprnent and intalgiblo a$sets aa6 rcvierired foriifipafument whenevet evenls or ahangog ln circutnstanced lnd;aate that he carayingv6lues may nol be aecoverab,e. lf any slrch indicalioh e{stS and where the carryingvalues Q(ceed lhe gslimated recoverable amount, the assels ot cash-generating unitrs are!,!fitt€R down to their aecoverable anolnl. The aeooverable amount of the asget is thegr€sioa ot fair value less cosl to sell and value in use. The fak value less costg to sell islhe amour* oblainable from the sale ot an asset in an arn's length hansaction belwoonknowledgeable, willing parties, le66 co€ts of disposal. ln ass€ssing value in use, theostimatgd luture cash tor ls 6re discounM to their present value using a pro-tax discounlrate thal reflects curent markot 6sre8anent of the lime {elue of money and thg nlksspecinc to the asset. For an assel that dodd not generatd larqely :ndependent cashinflows, the recoverable amount is delermined for lhe csh€eneiating unit to which theasset blongs, lmpairment losses of conlinuing op€rations al6 recognized in prolit or lossin lhos€ €xpsnse cat€gorles conslstent wilh the function of the impaired asset,

l0

An ags6ssm6nl i9 made at each reporting date as to wheihet theie is any Indlcaton thatpGviously recognized impalrment loss€s may no lOnger exist or may have d€creased, lfsuch indlcation exisls, ths recoveEble amount b 6:lmatsd. A provio$ly rocognizedimpairment loss i9 reversed only f there haE been a ciange in lhg $timates u$d todolermine lhe assets recoveEbb amounl sinc€ lhe lagt imp€innent lo6s waa Gcogni2od.ll th6t is the case, th6 csrrying amalit of tho asset i6 inffeased to ha recoveGble amount.That inca6als6d arnount cehiol €)@od lh€ carying amount lhat would have beendet€ftined, net of depreciauion and amortlzalion, had no lhpairm€nt loss beenr€cognized foa the asgel In pdor ye€ls. 6!ch reve€al ls recoglnlzed In prcfit or loss. AIt€rsuch a revorsal, lhe depreciation ancl alnorl?ltlon charge i9 adjusted in fulurc pedods loallacate th€ asset's revised carrylng amount, loss any rcsldual valu€, on a systomalicbasis over its remalning ugetul life.

ProvisionsProvisions ale rccognized when: (a) tlE Cornpany has a preaenl obligalion (legal orconslruclive) as a r€sult of past ever*; (b) ft is probable (i.e., hore likely than !ot) that anoutflo'w ot resources embodying economlc beneftte $/ill be requhod to a3tue the obligationland (c) a rcliable estimate can bg made of lhe smount of the obligalion. ll lhe effec1 ofthe time value of money ls matei€I, provlslons are detsrminod by discolnting theexp€cled fulure cash florr€ at a pret?x rale that leflects current martet assessment ot thetime value of money and hose n'sk3 specmc to the liebility. Where dieoouting is used,the increaso in the provision due to the passage of lime is recognized as interestereens6. Where some or all of the exponditure required to settl€ € provision b expecledlo be reimbursed !y another pa.ty, lhe reimbursement shall be recognLod u/hen, and onlywhen, it is virtually ccrtain that reimbursem€nt $/ill be received if the €ntity settles theobligation. The reinbursen€nt shell b€ trealed as a separate assst. The amolntrbcognized for the leimbursement 3hall not exceed the amounl of lhe provision.Provisions ar6 rsvl€ued at oach repoiting dala and adiusted to reflect the crrent bestestimat6.

EquitvCspnaf Stoc/4 Capital sbck reBfES€ntE par value ot lhe i65ued shar€s. Incremental costsdheclly atltibutable to lhe issuE of capital Stock ale rccognlzed as a deduction fomequity, net of any tax effecls.

Rslairsd E€rnings- Retained eamings tepresent the cumubti€ balance of nel income netof divftJend dechrations.

Revenle ReooonitionRevenle is recog0ized to the extsnt that it is p.obable that lhe economic b€nofits will id,,tg the Company and the revenue can be reliably meagured. The tollgwing specifior€cognit'ron crit€ria must also be met before rcvsnue is recognized:

Sales ot GoodJ. Revenus from salE af goods in the ordinaly activitiet is moasured at lhefah value of lhe oorBld€ration received or receivnble, nel of applicable VAT, discounts,rebates 9nd returns. Revenue is recogdzed when the glgnificant nlsks and ro$,ards ofownershlp 9f the goods hav€ lass€d to the blyer ahd thgre i6 acural delivery mEdE andthe sar|e b acc€pted by lhe cuatqner-

/nferesf ,n@Illg. Rev€nu€ is l€cognLed as lhe lnterest ecc{ve5 taking into accour theeffective ybld ol tho as.set,

ll

Exp€nse RecoonitionExpen6e6 aae d€cteas6s in €crnomic benef s in lhe fom ot decreas€g in a€6€b oaIncur.ence oI llat lities that result in alecr€ases in equity, other than thos€ relating lodiglribulions to equity paalicipants. Ftpen8ea fi6 gonerally reoogn'Ead wh€n th€ servicesare €cdved or when lhe ereenses ate incur€d.

Cosa ofsales. Cosi of sales a|e recognlzed in gtdtemenlB of compEhensivo income in thep€riod tho goods are aold.

Se/tV dnd na,kating expensea, geneftl ahd administrative expgrisos. Selling andmarkoling qlpens66 are costE incun€d lO 6ell or distribulg Ooodg. General andadminislrative oxpenses arc costs of administering lhe business that caanot beassociated directly to lh€ good€ gold. These costg ale expensed when incto?d.

Botrwing eosts, Eorrowino cost3 clmprite intgresl expensg on borowings and otherbank charges. Bo.rowing cosls incuned in connedion willi lhe conslruction or productimof a qualifying a*ot aro c€pitalked as pa of the cost ot lhe a$et consAuc,ted. All otherbo.ror,,ing cosis ate recognked in statemenls of comprehensiye in@me under financ€coal accounl

!gEe9ThE deteminslion of whether an arIa gement i6, or contalns a lease is bag€d on thesubslance of the anangement and rcquires an assessrEnt of whethea the fumllmer{ oflhe aranqement ls dependent on lh€ use of a sp€cifio 6ael or assets and thearrang€mont conveys a right to !6e the a6set. A eassessment ia made elter the inceptionof the lease only if one of the following applie"sl

a. there is a change in conlractual tems, other lhan a reneivat or exlension of lheaarangefnent:

b. a rcnewd oplion is exercised or exteNion granted. unless the term of the rene\dalor odension was initially included in the lease !erm;

c. there is a change in the deteminatlon of whefter tuffilhent is dependent on asoecifio assel or

d. ther€ i9 a 8ubotantial change to the asEet.

Where a r€ass€ssmgnt is made, lease aocounting shall comm€nce or cease from thedate when the change in circumstanqeg gives rise to ih€ teassessment foa scenarios (a),(c) or (d) above, and al the date of rEnevral or g)donsion period tor scenario (b).

Finaco LeaseFinance ieaseg, whloh transfer to the Company sub€tantially all lhe rlsk3 and bonelitsinoidontal to ownership of lhe leased itefir, arg. captlalized at lie inceptlon of the lease allhe fair value ot the

'€ased prcporly o[ t leti,i'qa, at the prosqnt €llra of the minimum lease

paymenb, Obligalions arlsing fro$ ti€nspotlation equipmgnt lnder finance leas6agreement aro cbssified in the Elateoents oJ financial posr'lion as long term obligationsunderfimnce lease.

Lease payments are apportion€d betw€en financing charges anal rcduction of the leaseliability so as t0 achieve a conElant rale of irderest on the Ienaining balance ol theliability. Finanoing charges are recognized in piolit or loss.

t2

Ooaratino LeaseCompany as Lessee. L66s6s whlch do not tr€nster to the Company subtentblly all lherisks and benefitE of ownershh o{ the assel ar€ clasgilied a9 ope|a ng l€seg. Operailnglease payments are recognked a9 an oxpens€ jn profit or loss on a sfua-rght-line basisover tho leaae l€rm. Asrocialed coats such aB maintEnance ac| expensed aa incurr€d.

Forehn Cun€ncv Transactbns and Tra6hiohsTransacllons in foreign cunenoies aro initlally recorded in Philipling pe6o using lhofunctional cu ency exchange rate at lh6 dat6 of lhe lfandaction, Exchange galns orlosses ad6ing from difbrences b61w€n €xohange ralos prevailing at the time ot lhetransac'tion and e,(chanOe rat99 on se{lement dat6 are cradtod lo or charged againslincome. Outslanding rhoneiary assets and liabilities denominaGd In foreign cunenciesdre r€stated rJslng lhe closlng €xchange €te at b€lance sheet date. All diffefences aretaken to the glatemed ot comprehensive inolme.

Income TaxCrtt4nt Tax, Cufisnt tax b the exp€ct€d tex pa!/'abb or recejvabb on lhe tarable Incomeor l6s for the year using tax €tes enacted or substantively enacted at th6 reporting date.and any adjusimenl to tax payable in resp€ct ot prEvious years.

Dobrad Tax. Delerr€d tax is provided, using the liabllity msthod, on all lompoGrydiffeenc€s at lhe balanoe sheet date bolw€en lhe ta( bases of assets and liabiliti68 andthair caraying amount6 for financial rsporting purpcges.

Defefled tax assets a|€ recognized for a[ d€dudible temporary differonces, canyto&adbenefils of unused tax losses faom net ope€ling losg carryovor (NOLCO), to the €xlentlhat it is probable that taxable income will be available a€ainst wbich th€ dedqctibletemporary difforences can be utilized.

The caarylng amounl of defened tax as5etg ia feviewed at each balance sheet date andreduced to lhe extent that it ls no lcinger prob€bl€ lhat sufiicie t.t€D€ble income will b€availablo to allow all or part of the de{ened bx as6et to be utilized. Un.ecognized dofenedlax assets are rgassesged at €ach .eporting dat6 and are recognized to lhe Bxlent lhat lthas bocome probable lhat futurc latable prollt wlll allow the defered tax ass€t to ber€covered.

Defeffed ta( assets and liabiliues are ntqa€ur€d ai the lax raleg tiat arq expect€d toapply to the period when thE ass€l is real'rz€d or the liabilily b gettbd, based on the tiarrates (and lax laws) that have been enacted or substantively enacted at lhe balancesheet dale.

Valuo.ad&d Tax IVAT)Rewnue, expenseE and ass€t€ ara rocaonlzBd., net of the amolnt 9f VAT, except:

. where lhe VAT incunEd on 6 ourchaso oI ass€ts or s€rvlc€6 is not r€6overable ftomthe tartion authority, in .which case rhe VAT b r€cognizGd as part ol the cost ofacquisjtion oJ the asset oa ac part oflhs sxpens€ it€in a3 applicable; and

. recelvablesand payables that a.e stated with lhe amolrnt of VAT included,

Emolov€es BenefitsShod-term Bere,tts. The Cornpany recogntses a liability n€t of amounts already pald andan exp€nse for seNices rendered by employe€3 during the accounting pgaiod. Shoal-t6rm

b€n€fits giv€n by th€ Company to its employees includs salariss and w€ges, eocials€cutity contdbutions, thorlterm cdnp€n66led abs€ncea, bonuses and olher non-monetary benefits.

Post+mployhent Benefrts. The Company does not have a formal relir€ment beneft plan.How€ve., lh6 Company is subjoct lo lhe pfovision ot R€Fblic Act No. 7641 &no$/n as theRetkemont Law). ThiB r€quires lhat in the absence of a rotiremenl plan of agro€|nenlprovidiag lor retirem€nt benefits of employees in the private secior, an employos uponreaching lhe age of 60 yoars or more, bui not bgyoird 65 yea6, who has served for aileast five (5) years In a prfuate company, may rctire and shall be entided lo r€tirom€nt pay.No actuarial computation was made considering that there are no more Ihan len (10)omployees who had served at leasl live lrears and th€ tumover of emplqyees lS high.

Compensated AbsencesCompensated absence6 are recognized for the number of paid leave days (includingholiday entitlement) re.nainjng at the ond ot the reporling peiod. Those arg hcluded in th€salades and wages account and are ecognized when avalled of by lhe employeas.

Related Paities Relationshio and TraNactionsRelated p6rty transaclion€ cgnsbt of transfers of resourcos, services or oblig3tiorbetween the Company and lts r€lated padoe.

Partles are considered b b€ retated if one party has the abllity. directly or IndilEctly, toconkol the other party oa exercise significaht inffuehce over ille other party In makinglinarclial and operating deeidons. This iicludes: (6) indavlduals frho, by owning dir€ody orindirec y through one or more intermediaiies, @nbol or are controlled by, or undercommon controlwith tho Comp€ny: (b) associates; and (c) individual i6 owning, dlrec{y orindirecty, an interest in the votihg po{er of tie Cornpany ihat gives them signrlcantInfluence over the Company and close rnernbers of the family of arry sr.rch indivldual.

In conilderlng each possible relabd party lehtionshiA atloolion is dir€cted iO thesubstance.of the relalion$hii and noi merely on leqal foin.

ContinoenciesCo.|tingent liabiliiies a.e nql r€cognked in the jinancial stat€ments. They are disclosed inlhe notes io financial slateneris unleqs the possibility ol ai oumow of .esourcesembodying economic benefts ie remote- A conting€r asset is not recognized in thefiaancial ststements bll disclosed in t|9 notes to finaacial slat€menls when an innow ofeconomic benefit6 ie probable,

Events Afte. thg Reoortino DatePost year+nd events that provide €dditional information about the Companys positjon atthe rporting 'date (adjustirlg oyents) are refl€clgd in lh6 financial Et€tements. Post y€aFond elents thal are not adjustiog evenls are disclosed In th6 nolgs to financial statementswhen tnalefal.

4. Slgnmcant Accounting Judgma 6, Es&nat6!, and Assumptlqir

The Compqnys financbl stat€aients prepared in accordanee with PFRS requires theCompanyto make judgments, etstinEtes and asEumptions that afiect amounts reported inihe linancial statements and rolated nd€6.

t4

..a.:i,.,,_,--.-.

Judgrren s. ln lhe proc€ss of applylng the Compsny's acoourfing policies, rmnageftEnthas rnsde judgm€nb, apart tom Oo6e involvlng GtirYEtions, $/hicfr have the mostsbnificant effecl on the amour{s rocognized In the financjel slalernents:

D€tennination of the dassifrcatton ot rsas€s. The Company has entared into leaseagr6€m€nt as € lesse€. The Company acaounts fot lgase anangemonts as tinanc€ leasewhen tho loasg tetu is ior tho major part ot lhe lifs of the asset and the Company has theoption to purchaso lhe a$€t at a pdo€ lhsl ls expoclgd to be sufficiently lowEr than thsfeir valug at the date the optio i6 exercigable. Olherwi6€, the l€ases a.e accounted tor esope€ling lea6e8.

Finance Lease - Compeny as a Le6see. Tho ComFny'a managenont has made aiudgmed that it has subslantially acqLrired all the rirks and reu,ards incidental toownership of the transportation equipment under lease agre€ment with various elomesticbanks. Accordlngly, the Company accounted far lhs agreements as financs lease andrecognized the tansportation equipmenl and long t9m obligations under finadce lease atthe prosentvaluoof lh6agreed rionthly p€ym€nts (Notes gand'12).

Long tom obligat-rons under finance l9as6 rccognlzed ir lhe stalomenls of fnancialposition amounted to P10.40 Million and F'12.04 Million as al Decembs 3,|, 2015 and2014, respectively (see Note 12). The Interest expenses under finance lease amountedto P1.10 Milllon and Pl.15 Mallion in 20't5 and 2014, rssrectively, The carryjng amount oflransportaton oquipment under fngoce lgas€ amounted b P11.02 Million and F12.67Million as al December 31, 2015 and 2014, rosp€qtively (s€€ Note 12).

Operating Lesse - comp€ny as a Less€€. The Company has entered inlo various leas€agreements as a lessee. The Comprrry hsd determlned lhal lhp l€5sor r€tains all thesignificart risks and ra^rards of ownershlp of tha Otperdeg ledsed out on opeEtngleases.

Reni exp€ns! chaBed to pmlit and 1096 amounted to m.47 Million ln 2015 and m14,(s€€ Notes 17 and 19).

Estimates and AssumolonsThe key eslimates and aGsumptiohs used in the finandal stralements are trased uponmanagement's evallalion of relevant tacts and circumstanc€s as of tha date of thefinancial statemenls. Actral resufts could difier ftom such estlmates.

Allowan@ fo( /nvenldi Larssts. The Company provides €n albwance lor invenlorylosses when€ver net realizable valu€ becomes lowor than cost due to damag€, physlc€l

delerioration, obsoioscance, ohanges in pdce levels or other causes

Eslimat8s of net realizable value arc bag€d on the rnost reliable evidence avaibble al thelime lhe estimatas afe rnade ot lhe amount lhe Inventories are orp€cied io be realiz€d.These e€timates take into consideration tluctuations of price or cosl dir€ctly relallng toovents o@uffing afler reporting date lo the extent lhat suoh events confirm condilionsexiEtng at reporting date, The allowance account i5 rovi{twqd periodically to refleot theaccuiatc valualion in the lirancial records.

The allowance firr inventory losses amountod lo P2.82 Mlllion aS' ot December 31 , 201 5and 2014. The crariying amount of invento es amounted to P151.44 Millbn and P9171Million as of December 3l, 2015 and 2014, respoctvety (see Notes 7 & 15).

Nkwance tot lanpatt@nf df Re@,ytbl9s. Allo{'rance tor impairmenl of rec€i\rablF is

maintained at a levd eonsidered adequate to povide for .pot6ntally uncollectibl€receivables- A provision {or impairmenl of r€c€fuables b €stabli6hed v,/hen there isobjeclive eviderlce that thg Company will not be abl6 lo collecl all amolnls due accordinglo lhe original ierms ot roceivables. The amount of the provision is lh6 difforgncebetween the assefs carying amount €nd lhe pGsent value of estjmaled tuture c€s:1flows, dbcounted at the effeclivs inte.esl rale. Managemenfs judgme.t is required in theeslimalion of the amount and liming of tuturo cash flows when determining the level o{allowanc€ reglircd. Stlch estiftates are based on asslmplions on a rumbo. of lactorsand actual results may differ, resuhing in future changeE io lhe allowance. Ths paoLis-Krn

b recognized in the statem€nt of cofipreh€nsive income.

The aggregdta. carrying v€lues of lrade and olh€r roceivables amounted 10

F216.34 Milfioll. lnd P150.79 lvillion as of Dec€mber 31, 2015 and 2014, re6p€ctiv€ly.The allorrance iof impaiament of receivablas amounled to P0.24 Million and Nil as otDecember 3'l, 2015 and 2014, respectively (Eee Nole 6).

Estimation of rssidual valuos and useu lives of bpedy and equiryent. lhe Co'r.panyestinlales the residral value and usetul life qt dgpreciablg property and equipmett basedon a c{tl6cliv9 asgeBstiront of slniilai businesses, .intehal te)hnical evalualign andexperience with sln lar ass6b. Eslimat€d useful lives are based on the periods overwh'lch th€ assets ere exDected to be available fot use. The estimated useful lives arereviewed periodically and are updated if expectalions differ from previous estinates dleto physical wea. .ard iear. technical and commercial obsolesaerce and legal or olherlimits on tho use of the a59eb. lt i9 po$ible, how€ver, thal tuture resuhs ot operatbnscould b€ maletially affuctad by changes in fie amountsand timing of recofded exp€ns€€broughl aboul by chgnges in lhe faciors mentioned above. A reduclion in the estimateduseful life of any item of properv and equipment !rculd increase lhs reco.ded ope.atngexpenses and decrease lhe canying vabe of the assets and vioe versa.

The aaryjng y€lues of prop€rq and €quipment amounted 10 P12.37 Million and Pii7.33Millirt'r ds df December 31, ?015 and 2014, respgctiwly (sse Note 9).

The usetul lives of ihe propert and equipmenl range lrom two (2) to twenty (20) years.

lmpainonl of Nonfrnaocial Agsels. PFRS rcquhes that an impaiment revigw bepertorr€d when ce.lain impairmenl indicators ale present. Detepnining the fair value olassets requiGs the estimatian ol irfure aash liows expected {a be g€nerated frorn thecon{nusd use and ullimato disposition of such.assets.

While it :,s beliqved tfEt th€ as5umptims us€d in the estimatjor'i of tair values reflected inthe Cot|panfs financbl srabrionb are appropriate and reasonable, signilicant dranges inlhese assumplions may maiedalv affed the asress.nent of recovehble values and anyresulting irrp€irment loss could have a mat€rial adverso impad on lhe results ofope€tions.

No impai.meflt loss on propgrty and equipmenl and inbngible asseb were recognized in2015 and 2014.

l6

The canyiru valles o{ nonfinancial a6seG that a.o subjeded to impaifineri testing whenimpalrment lndlcators ar6 present follows:

2015

Ropedy ald EripmentIniangble 6sels

P 42,368,E29 I 37,329,932

fio,flo 652,431

Defeoed Tax Assets. The oarrying amount of defelred tax asseis is rcvie$/ed at eachraporling date €nd reduced through valuatlon €llowance to the e)d€n! that it.is no longerprobable that sufiicient laxable proft rrill be available to allow all or pad of the defon€dtax assets lo be utjlizod. Signifhant maragement ludgment is rcquircd to determine thoamount of dEterrcd tax as8ets that can be tocogn'rzed, based upon the likely liming andlevel of futlre lAxable profit6 tggelher wilh future tax planning strategies.

The defened tax a$91 recognLed in the statements of financial position amounted toP1.73 Million and P0.85 Million as at Dec€mber 31, 2Oa5 and 2014, rospectively (seeNote 22).

6, Cash

This account coneistg ofi

2015 2014

C€sh on handCash in banks

P-P16,316,1,fi

11,309

17,311,M'

P 'f5,316,141 P 17,322,350

Cash in banks earns interest at ihe |€sp€div€ bank deposit rates. lr*erest income ea.nedamounted to P128,881 and F93,843In 20'15 and 2014, respeclively.

6. Trade aad other eceivables

This account consists of:

2015 20 t4

Tl"ade

Advanc€s to officers and employeasAdvances to suppliersOthers

F 2rd259,924 P2,120,O71

t46,45t2A\167

149,163,5571,518,542

14't,501

92,795

Allowance tor impairment losses216,727,613 150,936,395

(236,483)

F 216,49t,t30 P '150,936,395

Trade receivables mainly rcp€Bent cuatomers' acoounts arising f.om Ihe sale of thegood6 colledible generally on 30 to 90 days' terms and are non-interest be€dng.

t7

Advan@s to employees are colleclod lhru payroll deductions or thru expense liquidat:ons:Advanoes lo suppliers aepr6enta remaining amount advanced fot the lepairs andimprovement oI the Comlany's oftioe.

Othef recdvables are non-inlerest bearing and are due and demandable.lmpairment rgcognlzgd amounted to P 0,24 Mllion and Nil in 2015 and 2014, rBp€ctively.

Movemenb ot allowance for impairment lossEs of recgivabtes are aa follows:

2015 2014Betanee at beginning of the yearAllg.varce for impairment losser for the year

P-Pzd,:Aa

Balance at end ofthe year 236,,183 P

7. lnvgntorlea

Thg coBb of inventories as at December 3l are as follov/s:

Cost of inventorie6l

Sibsequently, canied at not realizabJe value as at Decembar3'l are as follovr6:

2515 2t14At Net Realizable Valuq:

Finished goods P 151,i135,554 P 91,705,470

The Company's finished goods !^/hich repEsenl imponed medicines and otherpharmaceutical products are pur€ly purchases made from a rqlaled party (see Note 21).

lmpalrtnont loss on inv€ntory gbsolescenoe due to expiraton of the goods amounting toNil and P2.56 Mlllion in 2015 and 2014, respeotively, is recognized in tho statements ofcomprshgnajve income. Allowance for inventory obsolescenc€ amourtod to P2.82 Milliona6 at Decenbe.3't, 2015 and 2014 (see Note '15).

Movemetts in lhe allowance lor inventory obsolescence

20,5

arc as follows:

2014Finished goods:

Ai January 01Provision for the year (see Note 14)

2,819,193 P 257,U42,561,U5

At Oecember 31 2,819,{93 P 2,819,193

& Ofi6r current a€sets

This account represents deferred inputamounted to P1.17 Million and P0.20respeclively.

VAT, rental depo8its andMillion as of DecembEr

other curent asset831,2015 and 2014,

l8

r --{ '!

is Et6-t3l89.3;g:.

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6

10. Intanglble assets

This account con€ists otl

2015 m14CostAt Janualy 01Additional

P 1,044,39t F03,386

554,762489,629

At December 31 1,737,7n 1,U4,391

Accurnulaled amortizationAl January 0lAdditional

39t,9606i]6,708 39t,960

,667 391,960

Intangible as6€ts represert cost. of accounting and payroll gofrxaro purchased by theCompany.

No impairment losses was recognized in 2015 and 2014.

l'1, Acoounts payable and .ccrued liabtlities

This account consisis of:

2015 2014Tlade (NotE 21 )

Accrued gxpenses

VAT PayablE

Statutory p?yablesOthers

? 121,427,9t1 P4,2&,9473,218,041

925,,{Ec9,97'

79,657,663

3,473,1983,283.698

724,5AO9,977

P 136,022,,t43 F 87,149,116

Forterms and conditions relating to related pa.ty pa!'ables, refef to Note 21.

VAT pay"ble and statutory payables are measured initially at lheir nominal values and€ubsequently bejng .educed by sottlement paymeris. VAT payable and statutorypayables are r€mitted on ihe following month afier being withheld from vatioua incomeleciolenls.

Accrued oxpenses and other payabl€s cansigt of unpaid expeases of the Company'srelated to prolessional fee, office supplies, utilities and other expenses. Accru€dgxpenses and other payableE ale non-intereBt bearing and due aad demandable which€fs exp€cted io be setued withiil the next 12 months.

20

I 2, Long term obligadons sndot inenco l€.ao

The Comirany leases trarsportatlon equipment under a numbe. of flnance leasoagreeftenb tor a tern of 5 years. Transpodation €quipment undef finanae loasoarangements, shown as pa.t ot 'Propedy and equipmenf account in the staiemenl9 offinancial position, tollows:

20,t5 2014

cost P 29,197,103 P 26,2s6,667

LessrAccumulateddepr€cietionandamoltization 18,17,1,905 13,622,186

P 1,J22J9A P 12,674,441

The aggregate fufur€ midmum paymentg under financa leases arc as follows:

2015 2014

ltlnlmum Leaa€ ObligaiongNot laio. than one year

Late. tian one year andnot later than five yeaG

Later than five y€ars

4229,329 P

8,344521

4,210,479

11,094,8&4

L6ss: Amounts representing interest 2,1?8,268 3,267,651

Pf€ent value ofmlnlmum lsale pNyment8 I 10,3t5,582 P 12,037,712

Total minirnlm lease obligationg 12,573,81t0 15,305,363

6,ns,6a2 8,0'18,7'16Later lhan one year and

nol later than fNe years

L6!er lhan five yearsP 10,395,582 P 12,037,71'l

Present value of mlnlmum lease obligations p.esented as 'long term obligatiorc underllnancs l€ase' in the slat€menb offinancial position as at December 31 consists oi

2015 2014

CuneniNoncunent

t 3,615,900 P6,779;682

4,018,9958.014,716

10,395,582 12,037,711

Intarest expenses recognized In the statem€nts of comprehen6ive income amounted toP1.'10 Million and P1.15 Million in 2015 and 2014, resp€clively. ll|€ Company's ini6r63trates on long t€rm obligalions und6r tinance lease ranges 5.17 % lo 10% p6r annum (seeNote 24).

2l

13. Eqllty

a. CaDital6tock

The Company ls autho.ized to issue eighty two thousand (82,OOO) common shareswith a par value of P 1 00 per share.

Th€ movoments in the number ot i$!ed and qutsianding ghares of common sharesare as follows:

Shares Anount

Reacquisrit'on

Outslandlng at the end of the y€ar a4{}(x) p a,2OO,OOO

b. Retained eamings

Oatails of relain€d earnings tollow:

2015 2014

Balance al bgginning oI ths year

Appropriation for th6 yearF 1,15,800,000 P 75,800,000

ir8,000,000 70,@0,000

Unapproiriat dBalance al beginning ol the yearNet income

Cash dividendsApFopriation for the year

Reversalof lhe year

3,019,644ra,005129(E0,937,500)(48,000,000)

I,!$6,79493,342,851

(21,730,000)(70,000,000)

3,453,150

B 188887,573 P 148,819,644

In 2014, the BOD ol lhe Company approved the retention oJ the p75.80 Miltionappropriated reiained earnjngs as at December 31, 2013 for the payment ot anaxisting loans and advances fiom a related pg.ty amounting to P15.OO Mitlion; andP60.80 Mlllion for additional investment in working capitai and to linance fltureoffices and produc{ warehousa expansion which are €xpected to bt completed withinthe next five years commencing on January, 2015.

On December 10, 2014, the EIOD approved a regolutio.t tor an additionalappropriatiom from rctained esrnings amounting toP 70.00 Million for: (a) addilionalworking capiial operalions; (b) to cover a losses oocu ing it the fqtu.e such asappropriation for poss:ble future decline in inventories, impairment losses on trade

22

recelvables and gimilat olher happenings; and (c) to finance futur6 plant expamionr4rfrich is exp€ct€d to be completed vi4thin th€ next ten..yeaas commencng on

Jaouary, 2017.

ln 2015, the Company had commenced its offl63 and product warehouse exr,ansionby acquiring condominjum unlts amou.firig to P8.37 Million for the Company's useand the amounts related to such appropriations were rev€rted back {o theunappropdated retained €arrings.

On D6c6mber '18, 2015, th€ BOD approved a resolution for en additionalappropd€tions from .etained eamings amounting to P 48-00 Million for: (a) additionalworking capital operations; (b) lo cover losses occuring in lhe fdure such as

appropriation for possible future decline in inventoties, impairment losses on tradercceivables and similar other happenings; and (c) an addftion lo tinanc€ futu.e plant

expansion which is expected to be tompleted withi! lhe next five years commencingon Januaay,2017.

Divid€nds Declaration

Cash divldends declared by the BOD of the Company to common stockhohe6 In

2015 amounted to P 57100 and P 412.04 per thare ; 6nd P 265.00 per share in 2014.Cash dividends declared againot lhe unappropriated fetained eamlngs are as follows:

Stockhokiers ofoate Apptoved Per Shere TolelAmount Record Date oate Payable

39!!December 18,2015 P 575.00 P 47,150,000 February 15,2016 lMarch 11,2016

June23.2015 412.04 33.787,500 May31,2015 Juy02,2015F 80.337,500

n14Jult 21,2014 P 265.00 P 21,730,000 April07,2014 July3'1,2014

Divll€nds payable amounted to F 47.15 Million and Nil as at Decembe.31, 2015 and2014, r€spectively.

14, Net sales

Net sales represent gross sales less applicable VAT, discounts, r"bates and returns,Gross sales amounted lo F750.15 Million and P580.61 Million in 2015 and 2014,respec{ively. Sales discounts, rebates and retums amgunted to P68.26 Million andp17.34 Mjllion in 2015 ard 2014, respedively. Net sales amounted to F681-89 Million andF533.28 Million in 2015 and 2014. resoedivelv.

:-1'a:i:-...11t --Y ;: .,{, _-

t 5. goal of sal€a

Thls accounl consisls ofiu5 2014

Finbhed Gondg - At Januaru 0lCo3t F 94,524,663 F 90,213,33?Less: Allo\mnce Jor inventory obsotescenc€ (Note 7) 2,Oi9,t9g 257,Ue

PurEhase3 (3ee Not6 21) 388,725,828 242,952,7*I oul goods avaflaDre tor a:rtg 460r3t,298 332,309,281

Flnlshed Goods - At December 3tCost 15/,25,.747 94,524,663Le$; Allowanco

At January 01

Provision for the year2,819,t93 267,U8

2,561,3452,819,{93 2,819,1S3

At Dscemb$ 3l (s€e Notee 7 & 21 ) 151,435,554 9'r.705.470

P 308,S95,744 F 240,692.311

'l 6. Sglling and marketing gxpsnss6

This accoud consists of:20't5 2014

Personnel costs (Notss 18 & 20) P 56,800,378 P43,275,t993O,379,4521e,F7,6384,224,444,154,000{,687,596

90'|,945691,,t 60

47,238,05034,44O,47124,905,35613,799,2234,395,8384,943,4411,705,775

416,929177,O54

Adv€rtisemenl and promotionsDistribution costsTranspo*ation and travelDopreciation and amortization (No!$ I & 18)CommissionSemina6 and meetingsReprgsentation and entertainmentOthe16

P 154,252,419 P 132,942,561

24

'17. General and administratlve expens€s

Thi6 account consists of:

2015 2014Peraonnelcosts (Noles 18 & 20)Hiring and recruitment costsTax€s and licenses (Note 24)Depfeciation and amortization (Note6 I & 16)

Transpoft ation. gial iravelPrcfe6sioaal feesBFAD and other regist.ation feesRepairs and maintenanceCommunications, lighl and wat€rOfflce suppliesMembership, dues and subscriptionsRentals (Note 19)

R€search and developmentOthers

F lt,t75,ls7 F3,1644583,2/(},5583,|J47,7522,298J921,315,1901,190,7671,007,420

967,160882,On792,117466,814255,712399,138

2,104,&22,491,3032.474,461

59't,7911,e/,6,224

7'17,669997,300E50,329857,751466,814

6,837.908317,U2

P 30,180,556 P ?2,342,544

18, Additional infoimatlon on Erpense Accolnlg

Persgnnel costs:2016 2014

Salaaes and wagesEmployee beneflsSS6, HDMF, PHIC

I 5t,136,695 F13,557,5983,n1,z12

42,124,&312,016,5212,932,0,18

The above amountE are distriblted as follows:

2014

Selling and marksling expens€s (Not616) P 56,800,378 P 47,2n,0&General and administrglive expens6 (Note '17) 11,176,187 9,835,352

P 67,9?5,565 P 57,073,42

25

Depreoiation and amodizataon ot property and equipment and intangible a$sets:

2Aa5 2014Selling and marketing expens€s (Note 16) P 4,221,64s p 4,395,838Gen€raf and administ.ative exp€nses (Note 17) I,O47,792 2,914,481

7,272,437 P 7,270,299

19. Opsratirlg lr.ee

The Company ente.ed into lease agreement under operating leese, with monthly fixedrental of P38,901. Thg l9e€e for a period of one year and reneweble every year uponmutual consent of th€ panies. Rertal payments for the pedod charged to general andadministrative expenses amounted to P466,8'14 in 2015 and 2014 (see Note 17).

20. Employee b€netitr

Short-le,tm emplo@e tgrrefds. These benefts include selaies and wageg and oih€rgovemment contaibrjtions which are due within tw€lve months after the end of the Deriodin lihich the emdolee renders the relatsd service. Tho company's short tenh €mployeebenefits amounted io P67.98 Million and P57.07 Million in 2015 and 2014, respectively(6ee Notes 16, 17 &'18).

Retirefient plen. TI:€ Company did nol yet set up a retirement plan sinoe it do€s not havemore than ten (10) employe€ who had S€rved at loa8t five years. Retirement expensesarc rec€n2ed upan adual availment ol qualified employoos which will be delemined bythe CompEny based on the actual number of years ot gErvico in compliance with RA No.7641 . No retirement cosls wers recognized in 2015 aad 2014.

2l , Rolated party t"ansactlong

The Company, in the normal cguIse qf b{sins6s, had the follo\,vitg transactions with itgrelated tarties:

a. Purchase of inventories from 4a a Ptrarma Umited (APL), a p€rent company. Totalamount of purchases from APL amouted to R368.73 Million and F242.35 Million in2015 and 2014, respectively (see Note 15). Outstandlng. lrad6 payable to APLincluded under "ac@unts payable and accrued liabilities' accounts in the statementsof financial position amounted to F12263 Milliot and P79.66 Mill:on as at December31,20't5 and 2014, rosp6c{ively. Purchases are subject to normal terms aMconditions.

b. Availments of unsecured and noninterest-bearing cash advances from Ajanta PharmaMauritius Limited (APML), an affiliate (which is lnder common control), mainly torworking capilal r€quiremenls with no flxed repayment terms. In 2013, tho Companypaid poriion ot the advances amounting to P17.22 Million. Net outstanding adva.oesamounted to P31.07 Million and P29.29 Million as of Decamber 31,2015 and 2014,respectively.

the Company does not expect to pay lhe remaining advanc€s in the nexl 12 months.

26

Details ot amsunts due to related padies as at Docember 31, 2015 and 2014 are asfollows:

lnlErl'Ui4bta Otbl|BhGtlqqy R!do.di' r!r! Onliitr t l}l{ lill !l

n Pidrclri!.r thlir|&bli! lhrcrd P ttqx! P (sutsql Otl,,!ql I nS?nB

|al lfrib-cdmli&iroi &is*lidng ullord | -t .F lrn,6l? tsa6r

The above advances are exDectod to be settled in cash.

The coinpensation of the Cqmpaiy's key management pertsonnel which are puroly 6hodterm benefits amounted to P+.02 Millio. and P3.50 Million in 2015 and 2014, respectively.

22.Income tax

lncome tax expense for the years ended December 3'1 consiets ot:

2015 2014CurrentDeiened

F 52,710,008 P 40,745,535(882,989) (768,404)

P 51,827,019 P 39,977,131

The cornponent of the Company's defered tax assets tollow:2015 2014

Daf6arod Tax AssotaAllowance tor:

Inventory obsolescence P 845,758 P 845,758lmpairmenl loss on receivables 70,9.t5

Net un.ealized forex loss 812.1144

P \724,747 P 845,758

27

The reconciliation of th6 provision tor lncomolax computed at statltory tax rate to actualprovision foa income tax shown in the statement of comprehensivo Income j6 as follows:

2015 2014lncomo b€forE incom€ tax p ir.$2/.43 F--T3331c

At qtatulory income tex rateAdditions lo (reducliohs in) income lax resulting from:from the tar effect of

Nondeductible interest exp€nse3InterEst income subjeAt lo finaltax

51,849,73,1 39,995,995

{5,949(39,684)

9290e4,154\

P 51,827,019 P 39,977.131

23. Financial Assetr and Liabilities

Fair value is defined as the amount at which th6 financial instrumenl could be oxchangedin a cunent transaction belween knowledgeable willing paiies in an arm'slengthtransaclio., other than in forced liqlidation or sale. Fair values are obtained from ouotedmarket pric€s, dbcounted cash flow models and option pricing models, as appfopriate.

Tho following table, presents the carrying amounts and fair values of the Company'sassets and liabilities measufed at fah valuo and for which fair valugs are disc,oeed. andthe coraesponding fair valug hierarchy.

F.iaV,lre

Carrying

ftro$1

ouobd Ddces

inactiYe !.{n[E1llt. oGtlvalF

mano|a

{t€vol0 Inpus llew ll

Sigrifit rluno!samble

inpubltsvoi 3)

tirranchl Assob

LoaN and Eaeivablls

Casir

lmde fld otw nili,€bles'

16,316,1t1 P

163

23?,897J03

P 't6,316,t41 P

2r6,581,r83

n2,w,303

fin ickl Liabilid6

0$s Fnanoal Lhblilies

krounls payable aid a{dud liahlilies"

ItiieMr payable

Advances tom a Ehkd pafly

under fineice btle

l|l,8m,9r6

{7,150,00t)

3t,0?3,453

t3lB?8,916

47,150,000

3r,0?3y'53

tici/&8 advdncet l0 srpCbr'

'E dmq VAT pa$h a it|/.ory paya&s

23

N14

frhVNlli

Crnylng

Atnounl

silr icant

!ao!6er*tlohpub [3w13]

ouotedPdc$ $lnrffcant

m aaweoErshE!tg

afiets

{Lav€ll) mPUl! llov€r zJ

tlnanci.l ls6€6

L@B ard Bcei!€Ueg

Cash

Tde and otis nceiiabb'

P 17,311,011 P

150,?s1.8s5

. P 17,311,041 P

- 150:794,635

1E8,105,935 1S,105,335

Fr'mndil Llabililiis

oher Fimn&l tiabiltia'

4...!nb payabb ad .ccrud bbfii€s"

Advances tun a Elal€d paty

lc'[ brn obbalirs r{dE tBm hae

83,140,&i8

29,294,m1

!aA?l11

E3,140,E3E

29,294,61

12,037,711

P 124.172.610 P P 124.472.610 P

Edxepdraicos b s,lpters

"&d{r{ l/Arpfrlib sd Sfr'orypaydbt

The carrying amounts of its cash, trade and other rec€ivables and accounts payablg andaccrued liab:lities appfoximate their fair values due to short-term ratu.e of thesekansactions.

lhe fair value of advances trom a stockholder and related party, and long-term obligationsunder finance l€as€ arg ba6ed qn the discounled value ot tuture cash flolrs using theapplicable rates for similar types of loans.

24- Financi.l Ri3k ltlgnag€ment Obr€ctvas 6nd Pollcleg Flnanclal Alsets

The Company's principal financial ins*umentg lnclude nonderivetlvs :nEtruments such asoash on hand and in banks, other recaivables, long-term obligations underfinanc€ l€ase,and advanc€! from a stockholder The main purpose of these financial instrum€ntgincludes raising funds for the Company's operations and managing idgnlified financialrisks. The company has vaious other linancial assets and flnancial liabillties such aB

kad6 receivabks and trade accounts payable which adse direclly from its operalions. Themain risks arising from the use of financial instruments are credit risk, liguidity risk,inte.est rate dsk and foreign exchange.isk.

Credit RiekCompany's credit risk is minimal. Th6 trad6 receivebles ar:se mainly from tramactionswith it's approved cusiomers. The mafmum exposure to credit on these transadaons isequal to the carrying amount ot these financial irstruments. Customers are subject tostringent tinancial, qredit and legal verification pfoces€. In addition, fsde receivable

29

balanFs are monitored on an ongoing basie to ensure timely colleciioas. Accordingly, theCompany's exposure to bad debts is not significan:.

Wjth respoct to credit risk arlsjng from other financial es€ets of th€ Coinpany. whicho9Biprise cash and rocaivables (except for advances to supplier6), the Company'sexpogure to cfedit risk 8ri6e5 from default of the counterparlyj with a maximum exposureoqual to the carying amount of th€s€ inakumont8. The Company limits its exposure tocrcdit risks by depositing its cash only with financial in€litutions duly evaluat€d andapproved by the BOD. The Company's receivables is minlftal slnce no defuuh paymentsw0re mad6 by the courterparties.

The maximum gxposure to credit risk as ot December 31, 20'15 and 2014 for rnecomponeols of lhe statemonts of financial position before the effect of mitigation throughthe use of mastdlitetting and cgllateral agreements follows:

2016 2014CashTrade and other lecoivables

F 15,316,14r P 17,311,041216,541,162 150,794,894

P 232,897,302 F 108,105,934

\Mere Jinancial instruments are recofdsd al fair iahe the amounts shown aboverepreser* the q.rrer( credit risk exposure but not the marimum risk exposUre thal couldArlse in the future as a result of changes in values.

The credit quality of financial asset8 is managed by the Company using internal creditratings. The credit quality by clasg of a6set tor loan-relaied balance sheet llnes as ofDecember 31, 2015 and 2014, based tn thg Companys credit rating system follows:

A! ot D,c.ohr3{, AXSr Paddw

blt no(

h!{indl{oitlw ra6l dro nor i|n!.ird

Lofr lodaalo H{l ln!.irdCa!h

Carh on hdrd.ndlnhdnk F

Tl.d, aid o$u ocei\rbls

Tiad,

AdEnc$ b ofiaa rd r0phyee3

olh€B

. P 15,3t8,111 P . P t6,315,111

214123#,

2,120,071

201,16?

*1', n4259r21

2,i20,ofl

101,t!?

P n2,660,8fl P F 80.16l I A2.Fr,i[2

30

Pa*da

hrl aol

implld k!tsld Tel

A! ol kcqnbd31, 2{l4l

Irih!.pa$ dle nor hlaildlllod€Elo |l{tr

Cadr

Cash oo tEnd di inbonk! P

TEdB and dlEr na€il/ebles

Tnd6

ldlaft€r b oficeB ald andoyeet

0$eB

P 17311,011 P

149,183,5t

1,518,542

02,?s

P 1?,311,041

149,183,567

1,518,542

92,7S8

P 160.105,935 I . P 16E,105,935

The credit quality of the financial ass€ts was detemined as follows:

. Low Credit Quality

For reoeivables, this covers accounis of slow paying cugtomers and those whosepayments are received upon demard at report date.

. Moderale Credil Quality

For receivables, this covers agcounts of standard paying customers, those whosepayments are withjn the credit tein, and new customers for which surrcient hlstoryhas not b€en established.

. High Credit Quality

This indudes deposits or placements to counterpadies with good cr€dit rating or bankstanding. For receivables, this covers, as of report date, accounts of good peyingcustomers, with good credit standing and wjth no history ot account treatment for 9defined period.

The aging analysis of financial assets as of Decembgr 31, 20'15 and 2014 follows:

|\||lhlrtr 3t Pa3lduobtFtmFid lrpudA!oloecs erli.l0l5: dueloT 1,0..{t r 31b gito olelhrn Fhtncirl

imFlrcd lod.y! 90daF i2odiF m d6F lssets Tobl

Crsh

C.!h oi h.d nd in bink! P 16,316J41 P P P P P I 16,316,141

Tnde and dul ncrlvablos

T6de 21an,l#2I'draltro! b ofrcell,nd efiplota€s 2,m,071

othfiocit$lr. 41,107

,ttilst ,t$59,921. 2,110,0

. 20t,t6r

F '32,660,m

P .P P 236,$ r fl2,M,30t

3l

Atof oecsdrr 31. 2014:

tlellrerg4l

dl]eml Letsfia|l

imp.led $daF

Palt du€ but ml ipaied

31b 91b [b![rll90daF 120daF 120&y!

Inpald

fhan&lfuets

Cash

Cadr o. lErr' ,ndia lrnhTEde dd o0$ilcdyabh

IEdi

F iun,011 P t - P - P..- P P 1 11,011

149,t83,55i 1t9,183,557

Aduaie! h dfn6 dd omd0te.6 1,518,512 . 1J18,5{2qhslqlt4Bes s2,796 0a796

P 1S,1r)5835

Liouiditv Ri6kLiquidity risks is arises from the possibility that lhe Company may oncounter difficultios inraising fund to meet commitmentg from financial instruments.

Management is tasked to minimize liquidity risk through prudent financial planning andexecution to moet tunding reguirementg of th€ varjous operating djvisions withinCompany; aithough long-t€rm loane obtained from financial instr.tutions, lhrough stic{implementation of crodit and collection policies, padicularly in containing tradereceivables; and thfough capital raising, including equity, as may be nec€ssary. presenlythe Company has existing long-tgrm loans that fund capital expenditures, Working capitilrequirements on ltie other hand, are adoqustely addressed by intemally generated tunds.Trade recaivables are kept within manageablE levels.

The matudty profile of the Company's financial liabilitjes as of Decamber 31, 2Ot5 ano2014 bas6d on conhaclual undisoounted r€payment obligations follows;

b dD&&6{3i, $i llsril|{I lDt Sdndb lbl lb5 0,rr5

P 168,105J3t I PPT

36oit8 oafu tllyrar gtr $t! tst! tobJ

|4Nft BFS d rcm|d iiiilli!Tndo I 1,$q1$ i S,?{9,{4 P $#E$t P I t p {?,Ct,$ltuoduFue l,l4l,9[ lNllo0 $6,{l tlt0,Elotft g.qf

9,9n

tld*.6prpu. {?,{5010 0ji0,m0

L0r'lbno$glol8utufil|i6b8d lll{t?1 tA,18 1,t0?,9$ 5,0ufit tit{Xo 10,t!i,$l

,Unnc6tM. E&d Iry ti,o?ta$ 31,0r|,r53

f! dos!d't(31.2011 t4!ltur

lnoh3lo6

mrdlS

6ruif6 !lol 3b5 0r50l

B r0st,& P 1wfi5 r s2!6,96 P rl$r$ i60,$3 2qm

- I F ni6?,ffi

x1til$

TBde

Aeueiqos*ohrN

loi! kn o!Q&r ut{fMm hac

0Bn qsn

1$n$ m7$ 2$9,47 5f{0,0n qm.6 fl$r,filAd,'it6hni'&tdtdly d.d4,fi1 !9t91,$t

! 1{S6,0n P fi,19{,5$ } 5fi8r6 p 5,A,0,6i8 p 13EB r 29$461 I 12{J12f10

and 2014.

A dloqlbs3l, tfl:

Inlerest Rate RiskThe Company's erposure to changes in inierest rat6s relates primarily to the Company'slong+erm debt obligations. Fixed raie financial instrumentg are sublect to fair valueinte€st rats risk.

The following lables 6el out the canying amount, by maturity, of the Comp€ny's linancialinatrumenls that ar9 exposod to interest rate risk for the v€ars ended December 31 . 201 5

I&$o iloift& lqlbiIltft osb llolo lreto flmfEl

fi!$r ImYed! lhto Y66 F!', Yel! Er 1€r Td{ tCrvd'r

hdNqLolllbm olSgdi.rs udefftue lse

Itqitdr&

A d Drat{31, t01{:

P qfi5,lo P ?$4r1r t lriw P rr&t8r P 3ita r 0$5u r us,$2tlBblllli !fialllt lltlbrafi uilb$rd t1|l5{0t

ToH fdltix

{dltn {dstEl dr0rsl

Wn o|Ib T$h Thlob..U@0fli

ftF4 T$Yot! lln! Yets tll YA! fi! Yeis

ftod Rab

l.Ct$odqdrlu{6himl4!. P 101N,S C 11S,7i3 P l1?X$5 P 1,Sa08 P i$.t24 t jemJ11 P trii11hE€dda ifilttt rfilbrut ,ftb|r|| {rihfit{t lrjxitltt

The following lable demonstrateg the sensitivitry analysi6 to a reasonably possible changein interest raies, with all other variablE held constanl, of the Company's income beforeincome tax and equity in 20'15 and 2014. The estimaieg are basod on the outstaMinginterest bearing liabilities of the Compsny with floating interesl rato as at December 31,2015 and2014.

2015

o.50hF656.500C7as.099-o,5 (7As.OgA)

o.5964.6c

464,1.'2$61,1621

2014

(€66,60O)

9a5l3a1965,:J:}a,

Foreion Cuarencv RiskThe Companys foreign €xchange nbk results primarily from movemenls It the Philippinep6go against the US dollar with respect to US dollar4enominated finanoial assets andliabllitie6.

The Company's kansadional curency exposr.rres arlse from it6 invent6ri6 which is 100%purchases from a related party in cunencieg other than the Company's f!/nctionalcurronoy. In additjon,l3% ard 21% of the Company's debt as a( Oecemb€r 31, 2015 and2014. reep€ctively, are densminaled in US dollar. The Company periodicelly reviews thetrend of the toreign exchange ratet and, a6 a practical move, increases lt8 US dotlar-denominatgd time deposits in times when the Ph:lappine p€so is d€preciating ordecreases :t6 uS dollar{enominated time deposiis in times when the Philippine peso isappreclating.

Intomation on th6 Company's foreign currenoydenominated monetary assets andliabllities and their Philippine peso equivalents are as fo:lows:

orc€mb€f 31, 2015

lb Doll etukalenbDecemb€,31.2014

us Do{br Equtlal€ds

Ca.h

Liabililies

Ac.di s peyable and acft€d fabililies

P t53 P 21,359 P 1,251 P 321,100

em5,850 (n,8n,9911 1.78a051 (7S,857,663)

ldvan €s npm 6 slo*holder and plated pafty &$,(a1 (3t,073,153) 659,031 (29,294,061)

Ilol foreign omny d€nominal€d

mon€lary li€lillie6 P 3,366,37 P (r5E,600,0t61 P 2,118,335 P 008,m7.8r6)

2015

Po3o lo IJS Dollar

2011

P€lob US Dolar

Cunenl Yeaa 4215

{t ?0

P 44.70

11!5

The Company reported nel foroign exchange (los8$) gains amounting to (P10.42 Million)and P8.28 Million in 2015 and 2014, respectively. ln tfanslating the foreign cunencydenominated assets end liabilito6 into p€sg amounts, lh6 €xohange |ates usd wereP47.15 and Pt4.70 to US$1.00 as of Dec€mber 31, 2015 and 2014, respectively.

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The following table d€monskatos the sensitivity to a reasonably pgssjble chanqe in meUS dollar exchatge rate, wtth all othe! variabtes hetd constant, ot tho Company'i Incomebgforc tax for the years ended Decembei 31, 2OlS and 2Ol,{ (due to chanoej In the fairvalue of financial asset6 and liabilitjes). There ls no olher impact on th; Company'sequity other than thosg already affecting profit or loss.

lncaease/Decrease IncreaseDecreasein Exchanoe Rate in Exchanqe Rate

December31,2015

December 3'1, 2014

+ 2-1E- 2,15

+ 0.25

-0.25

P 8,155,06s(E,155,065)

Capital Risk ManaqemenlTh€ Company manages its capital strucaure and makes adjustftents to it in lighi ofchanges in oconomic conditon6. To maint"in or adjust tie capital structure, m€Company may isEqe rew common shares or obtain additionel funding from parentCompeny as additional paid in oapilal or debt.

The Company is not exposed to extemally imposed capilal requiremenl since theCompany ganerated suff:cionl net income. The Company maintajns it6 cunont capitalstructurg, and will make adjustments, if necessary, in ord€rrto generete a reasonable tev€lof Istums to shareholders over the long term. NO Chaiges wsre made in the objectves,policies or process for the years ended December 31, 2015 and 2014. As ot Decemoer31, 2015 and 2014, the following are the Campany,s cepital.

P 612,084(61 2,084)

2015 2014Capital slockRetained €afnings

P 8,200,000 pt 88,8Sr,573

8,200,000148,819.644

P 1s7,087,573 P 157,019,644

25. Supplemenlary hfomagon Roquhed by tho BIR

On December 28, 2010, Revenue Regulation (RR) 15-20t0 became effective andamended c€rlain provisions of RR No. 21t002 presqribing the manner of compliancewith any documentary and/or procedural requirements in connaclion wili the prepamtionand subrnission of financial statements and incomo tEx r€tu.nsi €ection 2 of RR No. 21-2002 ra"s further amended to include in the Note-9 to Financial Stalements informa:on ontaxes and llcense fees paid or accrued during the year in addition to what is mandated byPFRS-

Below is the additional infonnation required by RR No. 15-2010. This information ispresented tor plrpos€s of filing wilh lhe BIR and is not a required parl of the basicfinaniial statements.

The Company reported ancuo. paid the following types of taxes for the year:

a. Dotails of lmportation

The Company has importedDecember31,2015.

goods arnounting to F397.24 Mlllion as of

b. Anount of VAT output tax declared and lnput taxes claimed cluring lh€ year

2015

Sates OutputvATVATable Sales and Output VATsales of ooode 681,486,109 P 81,826,333

fra5Purchaa6s lnput VAT

ffigalance at beganning ofthe yeat

Capital goods - less than 1 Million

Capital goods - more than 1 Millbn (used)

Purchase - good6Services

Purch$es - importation

2,183,652 262,038

170,608 20,473

- F 106,083

6,096pr566,299,850

?31,5946,755,982

397,235817 47,668,310VATable Purchas$ ard Input VAT ,{61,986,642 P 55,5it4l480

Net Oulput VAT P 26,281,853

c. Details of taxes and licenses under'genolaland admioistrative expense' accounts:

20't 5

Business permils and licensesCommunity tax cedifi cateAnnual registratjonOthers

I 3,222,50310,500

6007,066

36

d. Summary of taxos withheld for the year

2ot5Witflholding l€x on componsation and benefib (1601€)Withholding tax at source (1601-E)

Final \Mlhholding Tax (1 601-F)

| 7,3s2,175r,2538895,058,fl'4

P 13,674,168

Outstanding Deticiency Tax Cases

On October 01, 2015, the Company had received a Formal Assessmeri Notice (FAh.related to lhe Value Added Tax (VAT) of the Company showing a VAT deficjencytaxes amounting to P6.08 Million. The deficiency tiax assessnent on VAT by theBureau of Internal Revenue (BlR) is based on the reporled VAT retumg ol theCompany subjecting its sales discounts, returns and allowances and sampleinvento.ies from VAT output and disallowing portion of its impodation from VAT input.On December 17, 2015, the Company through its legal corlnsel, tormally prolested theFAN with request for reinvestigation with the submission of the related sourcodocuments to subsiantiate the Company's sales discounts, Etums and allowances,sample invenlories and claim for input taxEs related lo its lmpoftations. As of reporlingdate, the Company has not yet received a decision from the BaR denying or grantingthe Company's protest.

37