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Mega Lifesciences PCLInvestor PresentationTHAILAND FOCUS 201429 August 2014

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1. Business Overviewi. The journeyii. Business Segments

b) MaxxcareTM distribution businessa) Mega We CareTM branded products business

c) OEM business

2. 1H14 Financial Overview3. Appendix

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The journey so far….

1982

Incorporated

1985-86

1993-94

1995-96

20022012

•Received approval from Thai FDA for Samut Prakarnfacility in Thailand

•Began manufacturing nifedipine for Berlin Pharmaceutical Industry Co. Ltd

•Expanded into Vietnam, Myanmar and Cambodia to sell branded products and operate distribution business

•Established manufacturing plant in Australia

•Market leading branded products in key Southeast Asian markets

•Leading distributor of pharmaceutical and OTC products

•Announced acquisition of Eugica

•Commenced branded products business

•Acquired Medicrafts brand

We have evolved from an OEM player into a leading international consumer healthcare and pharmaceutical company

Started as an OEM manufacturer

Entered branded products and distribution business;

geographical expansion

Emerged as a leading branded and distribution company

2013

•Commissioning of new plant in Australia

•Planned manufacturing expansion in Thailand

• Successful IPO on SET

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MEGA is a leading participant in the health and wellness industry in developingcountries. Our business may be categorized into three segments:1. Mega We CareTM branded products business: We develop, manufacture,

market and sell our own brand of market leading nutraceutical products,prescription pharmaceutical products and OTC products which are sold in 29developing countries

2. MaxxcareTM distribution business: We market, sell and distribute variousbranded prescription pharmaceutical products, OTC and consumer products.We operate our MaxxcareTM distribution business in three countries, namely,Myanmar, Vietnam and Cambodia. Our clients for this business segmentinclude leading domestic and international pharmaceutical and consumergoods companies

3. OEM business: In addition to manufacturing our own branded products, ourmanufacturing facilities in Thailand and Australia accept various productionorders from third-party customers.

Our business segments …..

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Geographical overview of our operations We derive majority of our revenue from Southeast Asia

Thailand, Vietnam and Myanmar are our key geographies which accounted for 75.7% of our operating revenue in FY2013

1.Revenues exclude other income

Philippines

Indonesia

MalaysiaSingapore

Myanmar

Cambodia

VietnamThailand

Azerbaijan

Sri Lanka

Uzbekistan

YemenUnited Arab Emirates

Mongolia

Hong Kong

GhanaKenya

Nigeria

TanzaniaUganda

KazakhstanUkraine

Russia

Belarus

Peru

Denmark

Legend

Countries with sales of our branded products

Countries with manufacturing or product development capabilities

Ausralia

IndiaTrinidad

Rwanda

Kuwait

South East Asia 84.8%

Rest of World 15.2%

Southeast Asia accounts for majority of revenues1

Revenue Breakdown by Region (FY2013)

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Distribution BusinessBranded Products Business

What our business segments contribute…..

OEM Business

Mega Lifesciences PCL

Branded Products Business

Distribution Business

OEM Business

THB 3,428 mn48.8%

THB 3,132 mn44.5%

THB 473 mn

6.7%

Sales ContributionFY2013 Total Sales: THB 7,034 mn

Branded Products Business

Distribution Business

OEM Business

Gross Profit ContributionFY2013 Gross Profit: THB 2,959 mn

THB 2,179 mn73.6%

THB 700 mn23.7%

THB 81 mn2.7%

1 1

1 Revenue reclassified between Mega We Care TM and Maxxcare TM

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The future of our past and present …. 20141994 2018

Became the largest OEM supplier of soft gel caps out of Southeast Asia

Mega We CareTM Branded Products Business

MaxxcareTM Distribution Business

1985

OEM Business

Achieved leadership position in Indochina markets

Became leading international distribution company in Myanmar, Vietnam and Cambodia

Expect to double revenue and profits

2013

Expect to double revenue and profits

Nutraceutical, OTC and Prescription products

Pharma and consumer products

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The future of our past and present ….

AchievedCAGR of 19.1% (2010 -13)

Net profit CAGR of 19.2% (2010 -13)

Expect to double CAGR of 15.0% (2014 -18)

Revenue

Profits AchievedCAGR of 19.2% (2010 -13)


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Mega We CareTM branded products business:• Products sold in 29 underpenetrated markets with significant growth opportunities.• 205 existing products, 715 product registrations across the world.• Market leading positions in Indochina and the new markets in Africa.• Going by emerging trends in consumer health care, prevention of disease rather than

cure is the way forward ….. a sunrise industry.• Strong pipeline of 78 products under registrations and 80 products under

development.• No major capex planned as manufacturing capacity recently doubled to meet growth

requirements for the next 5 years.• A strong balance sheet.• Fundamental growth drivers are already in place to help deliver the expected growth

organically. Any acquisitions would help further accelerate the growth.

While we expect the revenue and profits to double in 5 years, due to the nature of the industry andthe markets we are in, growth may not be a straight line up but with occasional disruptions that maybe caused by economic, political and other factors.

How to achieve our 5-year target revenue & earnings

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MaxxcareTM distribution business :• Well poised to capture the strong growth potential offered by Myanmar, given MEGA’s

leadership position as a distributor of pharma and consumer products.• Leading multinational and regional companies as its principals.• Other markets are growing with the industry.• MEGA has adequately invested in infrastructure, latest technology and other resources

to meet the growth requirements.

While we expect the revenue and profits to double in 5 years, due to the nature of the industry andthe markets we are in, growth may not be a straight line up but with occasional disruptions that maybe caused by economic, political and other factors.

How to achieve our 5-year target revenue & earnings

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Continue OEM• Helps service our long standing

customers and helps improve the productivity and efficiency of our manufacturing processes

Grow our market leading brands• Leverage brand strength and

recognition to increase demand• Expand specialized sales and

marketing team to increase our coverage of the market

Launch new branded products• Launch new products and line

extensions• Leverage on speed to market

competitive advantage

Expand distribution business• Strengthen relations with existing

principals, add new principals and invest in infrastructure

Enter new markets• Selectively enter new markets

where we can compete effectively• Identified new markets in Africa,

Middle East, CIS and South America as new frontier markets

Expand margins and profitability• Minimize manufacturing and

distribution cost inefficiencies • Improving yield on

manufacturing processes

Selective acquisitions• Selectively assess complimentary

acquisitions• For e.g. the Eugica acquisition

helped us add a leading brand to our portfolio

The road map ahead…..

Our strategies for the branded and distribution business will drive future growth

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Key investment highlights

Leading distributor of pharmaceutical and OTC products in select frontier markets of Myanmar, Vietnam and Cambodia (Refer to slide 23)

2

Focused on fast growing markets including a unique established and market leading presence in the Myanmar market (Refer to slide 24)

3

High quality products manufactured in world-class manufacturing facilities accredited by international regulatory agencies (Refer to slide 16)

4

Strong product pipeline driven by an efficient and targeted product development strategy (Refer to slide 19)5

Proven track record of delivering growth and profitability (Refer to slide 31)6

Experienced management team instrumental in building the business is significantly invested in the Company (Refer to slide 46)

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Market leading own consumer health and pharmaceutical brands in fast growing developing markets (Refer to slide 15)1

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c) OEM business


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TM Branded products business

Categories Description Key Brands

Nutraceutical

Products

• Products which provide health benefits in addition to the basic nutritional value found in normal diet

• Regulation varies across jurisdictions but generally regulated for their manufacturing, safety, efficacy, labeling and marketing

• Dermatology , general health/Immunity, gastroenterology, men’s/women health and orthopedics are the key therapeutic categories

Prescription Products

• Medicines only available for purchase by consumers with a medical prescription

• Strictly regulated by authorities as to their manufacturing, safety, efficacy, labeling and marketing

• Diabetology, dermatology , gastroenterology and orthopedics are the key therapeutic categories

OTC

Products

• Medicines sold directly to consumer without a prescription from a healthcare professional

• Analgesics , gastroenterology and cough and cold are the key therapeutic categories

We sell nutraceuticals, prescription and OTC products within our branded business

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Own Brand Rank Therapeutic Category (TC)

Nat C

#1 Vitamin C

Nat B

#1 Vitamin B Complex

Fish oil

#1 Anti-atheromaNatural

Gofen

#4 Anti-rheumatics Non-steroidal


Ferrovit

#1 Haematinics

Enat

#1 Vitamin E

Calcivita

#1 Calcium Supplements

Livolin Forte

#1 Hepatoprotectant

Prenatal

#2 Prenatal

Nutrivita

#2 MVMM


Enat

#1 Vitamin E

Eugica

#1 Herbal Cough Sedative

Acnotin

#2 Oral Anti-acne Preparation

Ferrovit

#5 Iron Combination Products

Giloba

#4Cerebral and

Peripheral Vascular

NNO

#3 Emollients and Protectives

Our market leading nutraceutical, branded generic and OTC brands

Source: IMS Health Dec 2013, Myanmar estimates based on Myanmar import customs data and Company assumptions

Thailand Vietnam Myanmar

Acnotin

#1 Oral Anti-acne Preparation

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Thailand Manufacturing Facility 1 – Soi 6, Samutprakarn• Commenced production in 1985• Manufactures: Soft gels, Hard gels and Sachets• Approved by German health authorities, the Thai FDA and the Australian TGA

Thailand Manufacturing Facility 2 – Soi 8, Samutprakarn• Commenced production in 2009• Manufactures: Soft gels, Hard gels, Tablets and Sachets• Approved by German health authorities, the Thai FDA and the Australian TGA

Australian Manufacturing Facility – Pakenham Facility• Facility replaces the manufacturing facility established in Dandenong, Melbourne• Commenced production in 2nd quarter 2013• Manufactures: Hard capsules, Tablets and Powders• Approved by Australian TGA

World-class manufacturing facilities subordinated to Mega We CareTM branded products

Post expansion, combined capacity of both manufacturing facilities in Thailand is 3.8bn soft gel capsules p.a.

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High quality products manufactured in world-class facilities accredited by international regulatory bodies

State of the art quality control laboratoryInternationally accredited manufacturing facilities

Manufacturing facilities in Australia and Thailand

These facilities are accredited and regularly inspected by:• German health authorities• Australian TGA• Thai FDA • Additional GMP

certifications from 12 countries

• Australian TGA approved since 1992• Amongst the few manufacturers globally,

who apply the same standards for the manufacturing of nutraceutical products as with pharmaceutical products

• Team of 160 professionals in our Quality Assurance and Quality Control teams to ensure our products comply with the highest quality standards

• State of the art QC laboratory with world class Quality Assurance (“QA”) systems and EU GMP standard manufacturing facilities make us amongst the leading such facility in its category in Thailand and in Southeast Asia

Internationally accredited facilities Sizeable and dedicated teams monitor quality Significant investment made into infrastructure

We manufacture our nutraceutical products to pharmaceutical standards

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Science-based sales and marketing approach to build awareness of the safety and efficacy of our brands

“Science-based” sales and educational approach catering to medical customers

Overview

• Customers of branded products business include:

– Pharmacies

– Hospitals

– Clinics

– Health practitioners

– Physicians

• Direct promotion to these channels to strengthen market recognition and build brand loyalty

• Sales representatives and product consultants promote products through

– Educational seminars

– Trade shows

– Product information and promotional material

– Academic trainings

– Informational sessions for medical professionals

• Sales force includes members with a medical background

Sales and product consultants promoting Mega products

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Product development strategy

Efficient and targeted product development strategy drives a strong product pipeline

Nutraceuticals

• Identify new clinically-effective and safe product candidates

• Create line extensions of existing established products

Prescription Pharmaceuticals

• Review effective pharmaceutical compounds which have been successful for major originator companies

• Products with expired or due to expire patents

OTC

• Develop products which offer the following: faster relief, are easy to use, have better formulations for self medication, and will be recommended by pharmacies

Our objective is to develop new products which offer consumers health and wellness benefits

Active Products - Key information as at 30 June 2014Existing:# of Unique formulations 205 # of Product registrations 715 Application for registrations:# of Unique formulations 78 # of Product registrations 389 # of unique formulation under development 80# of poroduct launches (Jan 2008 to June 2014) 112

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Growing population (mn) Increasing health expenses per capita (USD)

% of private spending on health• Population in our key markets continue to grow.

• Health expenses per capita in Thailand increased from USD 183 in2010 to USD 215 in 2012 or at a CAGR of 8.4%; 55% of suchspending was from ones’ own pocket.

• Health expenses per capita in Myanmar increased from USD 15 in2010 to USD 20 in 2012 or at a CAGR of 14.1%; 93% of suchspending was from ones’ own pocket.

• Health expenses per capita in Vietnam increased from USD 83 in2010 to USD 102 in 2012 or at a CAGR of 11.3%; 85% of suchspending was from ones own pocket.

Source: IMF, WEO Database, April 2014, World bank development indicators

Healthy outlook for key markets

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The future of our past and present ….Mega We CareTM branded products business



Revenue

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c) OEM business


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Key Distribution Markets Myanmar Vietnam Cambodia

Market Positioning

• Leading international distributor of pharmaceutical and OTC products

• Among top 2 distributors of consumer products



Distribution Infrastructure

• 8 warehouses strategically located across Yangon, Mandalay, Mawlamyaing, Naypyidaw, Taungyyi and Lashio

• Distribute to more than 27,204 outlets representing c.85% geographical coverage

• 3 warehouses strategically located in Hanoi, Danang, Ho Chi Minh, with 2 feeder warehouses in Can Tho

• Distribute to more than 12,280 outlets across 48 out of 58 provinces

• 1 warehouse located in Phnom Penh

• Distribute to more than 5,700 outlets

Number of principals (30 June 2014) 33 17 10

% of Distribution Sales (FY2013) 63.0% 31.1% 5.9%

We are a leading distributor of pharmaceutical and OTC products in select frontier markets

Distribution business

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58.9

23.8

6.0

ThailandVietnamMyanmar

Mega is well-positioned to capitalize on this developmentMyanmar is expected to enjoy significant GDP growth

Myanmar GDP at current prices in USD bns

… With a leading position in MyanmarA key market with significant growth potential

53

73

2012E 2016EAnd this is set to benefit its significantly underpenetrated health care market

Myanmar pharma and consumer health market size per capita (USD)

1995

10.3%

85%

8

9

63.0%

Source: IMF, WEO Database, April 2013, ADB Study 2012, Estimates based on Myanmar import customs data and Company assumptions| Note: (1) Suffix ‘E’ represents IMF estimate, (2) as at 31Dec 2013

1 1

Establishment date testament to our long-standing presence in the country

% of 2013 branded revenues (before inter-segment charges) generated in Myanmar

% of 2013 distribution revenues generated in Myanmar

# of our branded products ranked as leading brands in their respective therapeutic category

# of strategically located warehouses

Extensive distribution reach covering 85% of the country

Myanmar significantly lags behind Vietnam

and Thailand in healthcare spend

c.1,4502 # of employees in Myanmar

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Our value-added distribution business models for pharmaceutical and consumer products

Conventional distribution services (CDS)• Our integrated approach lends enhanced efficiency and quality control of our

products at every stage of our operations from procurement to delivery to our end consumers

• We purchase products from our principals, subject them to a quality control inspection, then warehouse the products in a climate-controlled environment until receipt of end customer orders. We arrange for logistics services and ensure the timely delivery of products

1

2

3

Sales and conventional distribution services (SCDS)• In addition to our conventional distribution services, we also provide sales support

to our principals• Our sales channels include pharmacies, hospitals and clinics for pharmaceutical

products and supermarkets, department stores, key accounts, wholesalers and dealers for FMCG products

Marketing, sales and conventional distribution services (MSCDS)• Our pharmaceutical and FMCG teams provide a complete package of marketing,

sales and distribution services tailored to our principals and their products• The teams market directly and engage in marketing activities through available

channels

Principals can choose from any of our three service models to help meet their distribution needs

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Advanced information technology systems provide valuable business intelligence for our principalsOverview

• Our advanced IT systems allow us to collect, analyze and derive business intelligence across each of our distribution markets

• We offer a broad range of value-added services, including:– Inventory tracking systems– Inventory management systems– Access to valuable market data– Real-time information sharing

• Our principals can leverage on the array of value-added services we offer in order to:– Increase operational efficiency– Reduce inventory cost, fulfillment cost and operational

expenses– Tailor their marketing activities to target their

customers– Improve overall efficiency of their businesses

• We believe this is a key competitive advantage and it strengthens the existing principal and customer relationships

Through our advanced IT systems we can provide value-added services to help our principals increase operational efficiency, reduce inventory cost, fulfillment cost and operational expenses, and tailor their marketing activities

Our teams collecting real time data on the field

We capture all aspects of our relationship

with customers,

providing us with current

market insights which

we use for effective sales & marketing

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The future of our past and present ….MaxxcareTM distribution business



Revenue

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c) OEM business


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OEM Business

In addition to manufacturing our own branded products, our manufacturing facilities in Thailand and Australia accept production orders from third-party customers

• OEM Business contributed 7% and 3% to our operating revenues and gross profits, respectively for FY2013

• We provide contract manufacturing of nutraceuticals, prescription pharmaceuticals and OTC products for third-party customers

• We have 39 customers located in 9 countries• Most are long standing customers of the business• OEM Business provides us productivity and efficiency benefits through the utilization of

unused manufacturing capacity• It also allows us to diversify our revenue sources• The contribution of OEM to overall business of MEGA is expected to remain at current levels

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c) OEM business


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• Revenue and net profit grew at a CAGR of 19.1% and 19.2%, respectively during 2010-2013. Historically MEGA hasdoubled top line and bottom line in less than 5 years and we expect to double the 2013 levels in ensuing 5 years;expect the growth trajectory to be non linear.

• Despite 1H14’s revenue growth of 11.3% YoY, net profits declined by 36.8% YoY to THB 185.7 mn, given the flatgrowth in Mega We CareTM branded products revenue, extra overheads due to capacity expansion, spending in newmarkets, expanding logistics resources in Myanmar and the net forex loss of THB 33.1 mn.

• With a marked QoQ improvement in net profits in 2Q14 and a stronger Mega We CareTM branded products revenueexpected in 2H14, we look for net profits to fare better in 2H14.

Summarized income statement

Figures inTHB mn 2010 2011 2012 2013 CAGR 1H13 1H14 YoY Gr.

Operating Revenue 4,158.7 4,856.8 5,964.8 7,033.5 19.1% 3,293.5 3,664.0 11.3%Gross profit 2,011.3 2,308.8 2,633.3 2,959.4 13.7% 1,401.0 1,416.9 1.1%Selling and Admin. exp (SGA) 1,461.4 1,755.7 1,980.0 2,235.8 15.2% 1,061.9 1,194.9 12.5%SGA (% to revenue) 35.1% 36.1% 33.2% 31.8% - 32.2% 32.6% -EBITDA 558.3 657.3 799.8 887.6 16.7% 411.9 283.9 (31.1%)EBIT 490.3 588.6 723.4 788.7 17.2% 364.3 218.7 (40.0%)Net Profit 368.0 455.9 577.7 624.0 19.2% 293.7 185.7 (36.8%)Net profit (% to revenue) 8.8% 9.4% 9.7% 8.9% - 8.9% 5.1% -EPS (in THB) 0.51 0.63 0.79 0.84 18.2% - - -Return on equity 47.4% 41.6% 38.2% 23.1% - - - -Return on assets 15.8% 16.6% 15.2% 11.5% - - - -

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Consolidated revenue (THB mn) Revenue mix (%) across segments

Segment wise revenue4 (THB mn)

• Mega We CareTM branded products business and MaxxcareTM

distribution business grew at a healthy CAGR of 22.2% and 21.6%during 2011-2013.

• SEA2 and Indochina3 contributed 85.7% and 80.6%, respectivelyof our total operating revenue in 1H14.

• Operating revenue in 1H14 was THB 3,664.0 mn, up 11.3% YoY,driven by a 25.7% YoY growth in MaxxcareTM distribution revenue.Mega We CareTM branded products revenue remained flat YoY;with improvement of 17% QoQ and demand in Thailand pickingup, we expect a better growth for Mega We CareTM brandedproducts revenue in 2H14. OEM revenue was down by 4.6% YoY.

CAGR 3.4%

Gr: 0.2%

CAGR 21.6%

4,857

5,965

7,034

3,2933,664

CAGR 22.2%

Gr:25.7%

Gr:(4.6%)

Driven by growth of 25.7 % YoY ,in MaxxcareTM

business

Consolidated revenue1

1.Operating revenue 2. Thailand, Myanmar, Vietnam, Cambodia, Malaysia, Philippines, Indonesia and Singapore. 3. Thailand, Myanmar, Vietnam and Cambodia. 4. Revenue reclassified between Mega We Care TM and Maxxcare TM for FY2013

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Consolidated Gross Profit (THB mn)

Consolidated Net Profit (THB mn)

• Net profit grew at a healthy CAGR of 17.0% during 2011-2013, drivenby stable gross profits and economies of scale as selling andadministration (SGA) expenses declined from 36.2% of operatingrevenue in 2011 to 31.8% in 2013.

• Net profit in 1H14 was THB 185.7 mn in comparison to THB 293.7 mnin 1H13, down 36.8% YoY, given the flat growth in Mega We CareTM

branded products revenue, additional overheads from the capacityexpansion, spending in new markets, expanding logistics resources inMyanmar and net forex loss of THB 33.1mn.

• With a marked QoQ improvement in net profits in 2Q14 and a strongerMega We CareTM branded products revenue expected in 2H14, we lookfor net profits to fare better in 2H14.

• Gross profit grew at a healthy CAGR of 13.2% during 2011-2013.

• Gross profits in 1H14 came in at THB 1,416.9 mn, an increase of THB15.9 mn or 1.1% YoY. Overall gross margin was 38.7%, compared to 42.5%in 1H13.

• Slight decline in overall gross margin was mainly due to change inrevenue mix ( MaxxcareTM distribution business growing at a higher pacewhile Mega We Care branded products business remained flat) andlower gross margins reported by Mega We CareTM branded productsowing to additional overheads from capacity expansion.

• We expect improvement in gross profits with the growth for the brandedproducts in 2H14.

Flat growth in Mega We CareTM branded products, net forex losses and additional overheads suppressing profits in short run

Change in revenue mix and lower gross margins in Mega We CareTM impacted growth

Consolidated profits

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Revenue1 (THB mn) Revenue split by geography (THB mn)

Steady contribution of top brands to revenue• Strong CAGR of 22.2% during 2011-2013, driven by volumes of our

existing market leading brands and new product launches.

• The low per capita consumption and penetration levels for our productsin these markets vs. developed markets enable us to sustain the goodgrowth rates by expanding the user base.

• SEA and Indochina contributes 78.2% and 67.4% of total Mega We CareTM

branded products revenue in 1H14. Thailand was the largest market,followed by Vietnam and Myanmar.

• Revenue in 1H14 was THB 1,602.0 mn, up by only 0.2% YoY, a result ofslowdown in Thailand and Ukraine. With Thailand showing signs ofrecovery, we expect Mega We CareTM branded products revenue growthto pick up in 2H14.

• Historically the second half of the year has been better than first half,wherein almost 55% of the year’s revenue is generated.

Gr :0.2%

Slowdown in Thailand and Ukraine impacted growth

2011 2012 2013 CAGR 1H13 1H14 YoY Gr.

Southeast Asia 1,836 2,077 2,676 20.7% 1,227 1,253 2.2%

Africa 193 262 330 30.8% 157 191 21.4%

CIS 149 218 226 23.1% 115 90 (21.4%)

Others 119 144 196 28.2% 100 68 (32.0%)

Total 2,297 2,700 3,428 22.2% 1,598 1,602 0.2%

1. Revenue reclassified between Mega We Care TM and Maxxcare TM for FY2013

Mega We CareTM branded products revenue

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Revenue1 (THB mn) Revenue contribution by geography

• We provide distribution business to third-party principals in Myanmar, Vietnam and Cambodia. (The operations in Nigeria wasdiscontinued since 2013.) Pharma is the largest product category, contributing 65.5 % of 1H14 MaxxcareTM distribution businessrevenue.

• CAGR of 21.6% during 2011-2013 included an impact of change in distribution business model for one our principals in Myanmar.

• Revenue in 1H14 was THB 1,843.2 mn, up by 25.7% YoY, driven by Myanmar. Myanmar is the largest market, contributing 68.5% oftotal MaxxcareTM distribution business revenue in 1H14, followed by Vietnam (26.2%) and Cambodia (5.3%).

• As at 30 June, 2014, we provided distribution services to 33 principals in Myanmar (including 14 FMCG principals), net addition of 2principals from 31 December 2013. In 4Q14, we expect to see one new principal replace an existing one. This change will affect the topline in the short term with limited impact on bottom line. In Vietnam and Cambodia, the number of principals remained unchanged at17 and 10 principals, respectively, as at 30 June 2014.

Growth driven by Myanmar

1. Revenue reclassified between Mega We Care TM and Maxxcare TM for FY2013

MaxxcareTM distribution business revenue

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Gross Profits (THB mn)

• Gross profits grew at a healthy CAGR of 13.2% during2011-2013.

• Gross profit in 1H14 was THB 996.9 mn, down by 4.1% YoYdriven by lower gross margins .

• Gross margins remained steady between 62% – 65%during 2011 – 1H14; the slight YoY decline in 1H14 grossmargin was caused by additional overheads from capacityexpansion. With the extra capacity being taken up by thegrowth in brands the impact of these additionaloverheads on gross margins will be offset.

Gross margin (%)

COGS elements % to Mega We Care TM revenue

Raw material is largest cost elements in COGS (23.5% of revenue)

36.1 35.8 36.4 35.037.8

Gross profits – Mega We CareTM branded products

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• Gross profits are driven by principal/service mix.

• Gross profit CAGR during 2011-2013 was impacted by change in business model for one of our principal in Myanmar.

• Normalized gross margins reflects the gross fee earned by distribution business adjusted for the impact of change in business model for oneof our principal in Myanmar. These have remained steady over 20% during 2011-2013.

• Gross profits for 1H14 was THB 391.6 mn in comparison to THB 333.6 mn in 1H13, up 17.4% YoY, driven by revenue growth in Myanmar.

Gross Profits (THB mn) Gross margins

CAGR : (2.3%)

Gross profits – MaxxcareTM distribution business

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Revenue (THB mn) Revenue mix % by geography

Gross Profits and margins (THB mn))

• Revenue grew at CAGR of 3.4 % during 2011 – 2013. In 1H14 revenue wasTHB 218.8 mn, down by 4.6% YoY, driven by slowdown in Thailand.

• Australia is the largest market contributing 57.1% of total OEM revenuein 1H14.

• Gross margins improved from 12.2% in 1H13 to 13.0% in 1H14 driven byhigher sales in Australia.

• With the added capacity we are on the lookout for more OEM clients tofill up capacity in the short term while branded products grow to take upmore capacity.

Lower growth driven byslowdown in Thailandbusiness

OEM business

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SGA expense has reduced as a % to operating revenue Administrative expenses (THB mn)

Selling expenses (THB mn) • On overall basis SGA expenses have been declining YoY, between 2011 and2013, from 36.2% of operating revenue in 2011 to 31.8% in 2013 or areduction of 4.4 percentage points

• Advertisement is the largest component of selling expense, followed byhuman resource, contributing 50.3% and 30.6% respectively, of the totalselling expenses in 1H14.

• SGA was THB 1,194.9 mn, in 1H14 representing 32.6% of operating revenue,compared to 32.2% in 1H13. Spending in 1H14 was towards marketing forMega We CareTM branded products in certain markets, business expansionactivities in Africa and expanding logistics resources in Myanmar.

• We expect SGA for FY2014 to be in line with FY2013 levels, at around 32% ofoperating revenue.

1,082 1,153

1,373

639718

674

827 863

423477

SGA benefiting from increased scale

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Balance sheet and key elements – significant investments to boost capacity incurred already

Note : Balance sheets elements of previous years are based on restated financials

• MEGA commissioned new plant in Australia in 2013 andinvested in the expansion of its manufacturing capacity inThailand during 2012-1H14.

• MEGA’s current manufacturing capacity will be sufficientfor its businesses for the next 3 – 5 years.

• Rise in equities in 2013 was driven by fresh issue ofordinary shares as part of IPO.

Consolidated Balance sheet for the period ending :

Cash cycle saw a marginal improvement from 131 days in2013 to 128 days in 1H14 as the increase in receivabledays and inventory days were offset by higher payabledays. Inventory as at 30 June 2014 was 142 days, out ofwhich inventory of finished goods and raw material atfactory accounted for 33 days. The increase in inventorywas in line with business requirements.

All figures in THB mn 31-Dec-11 31-Dec-12 31-Dec-13 30-Jun-14

Cash and cash equivalents 330 354 1,540 1,300

Trade accounts receivable 1,386 1,288 1,724 1,624

Inventories 904 1,442 1,685 1,864

Property, plant and equipment 368 733 970 1,013

Other Assets 301 515 617 746

Total Assets 3,290 4,332 6,536 6,547

Debt 738 1,198 997 994

Trade Payables 787 769 1,145 1,255

Other Liabilities 446 654 702 569

Total Outside Liabilities 1,972 2,621 2,843 2,818

Shareholder Equity 1,318 1,710 3,693 3,729

Total Liabilities 3,290 4,332 6,536 6,547

Key Balance sheet elements

Net cash/(debt) (THB Mn) (408) (845) 543 307

Capex Spent (THB mn) 80 439 352 97

IBD/Equity ( times) 0.56 0.70 0.27 0.27

2011 2012 2013 1H14

Average receivable days 86 81 77 82

Average inventory days 112 127 138 142

Average payable days 90 84 85 96

Cash cycle (days) 109 123 131 128

For the period ending

41We care

Cash flowsCash flows from operations, investments and financing activities (THB mn)

267 342466

6

-77

-626

-396

-9840

304

1,103

(149)

22920

1,172

-241

Operating cashflow Net cash from (used in) investing activities Net cash from (used in) financing activities Net change in cash

2011 2012 2013 1H14

THB 6.1 mn cash was generated from operating activities in 1H14, lower than 1H13’s THB 55.6 mn given lower net profits

In FY2013, net cash used in investing activities was THB 396.2 mm; which mainly include the expansion of production lines at ourmanufacturing facilities in Thailand (THB 256.7 mn) and the expansion of manufacturing facilities in Australia (THB 43.2 mn). Netcash used in investing activities in 1H14 was THB 97.9 mn, out of this amount, THB 61.5 mn was for expansion and maintenancecapex for manufacturing facilities in Thailand, THB 12.8 mn was for leasehold improvement and fixtures in Myanmar and THB 10.7mn was towards improvement in information systems.

In FY2013, net cash generated from financing activities was THB 1.1 bn, which mainly came from IPO issue of 129.79 mn ordinaryshares at THB 17.5 per share, amounting to THB 2.27 bn. Part of IPO proceeds were used for the repayment of term loans andworking capital loans from financial institution amounting to THB 1.14 bn. In 1H14, net cash outflow from financing activities wasTHB 149.0 mn, mainly due to payout of dividends, amounting to THB 156 mn, declared for financial year 2013.

42We care

Taxation and BOI privileges

Board of Investment (“BOI”) privileges

• Exemption from corporate income tax on the net profits derived from the promoted activity (Manufacture of Drugs for Human use) in Thailand

• The amount of tax exemption is not to exceed 100 percent of the total investment (THB339.8 mn), excluding land costs and working capital ; THB 85.9 mn already used

• The period of exemption is for 5 years from the date such income is first derived (Aug 2012 to July 2017)

• Exemption from payment of imported duties on machinery as being approved by BOI and the import should be before Jan 2015

• Exemption from import duties on raw and essential materials imported for use in producing to export, for period of one year after the first import

• Exemption from import duties on items which are imported for re-export, period of one year after the first import

• Exemption from tax on dividend distributed from profits of promoted activity for a period of 5 years (Aug 2012 to July 2017)

Exemption from corporate income tax on profits from the manufacture of drugs in Thailand, for a period of 5 years and for a maximum amount of THB 339.8mn (of which THB 85.9mn has already been used)

THB mn 2011 2012 2013 1H13 1H14

Profit before tax 565.7 698.3 757.4 349.4 209.4

Current tax 107.4 141.2 125.5 58.2 50.6

Deferred tax - (22.1) 7.9 (3.3) (26.9)

Total tax expenses 107.4 119.1 133.4 54.9 23.7

Effective tax rate 19.0% 17.1% 17.6% 15.7% 11.3%

For the period ending

We care



c) OEM business


44We care

Organization structure

Mega Lifesciences Public Company Limited

(Thailand)

Mega Lifesciences Public Company Limited

(Thailand)

99.99% 99.99% 99.96%

99.99%99.99%

99.99%98.99%99.99%99.96% 99.99% 99.99%

99.99%99.99%99.99%99.99% 99.99% 48.99%

Natural Health Foods Ltd.

(Thailand)

Natural Health Foods Ltd.

(Thailand)

Mega Lifesciences PTY. Ltd.

(Thailand)

Mega Lifesciences PTY. Ltd.

(Thailand)

Mega We Care Ltd.(Thailand)

Mega We Care Ltd.(Thailand)

Mega Lifesciences PTY Peru S.A.C.

(Peru)

Mega Lifesciences PTY Peru S.A.C.

(Peru)

Mega Products (Mauritius) Ltd.

(Mauritius)

Mega Products (Mauritius) Ltd.

(Mauritius)

Mega Lifesciences Sdn. Bhd.

(Malaysia)

Mega Lifesciences Sdn. Bhd.

(Malaysia)

PT Mega Lifesciences(Indonesia)

PT Mega Lifesciences(Indonesia)

Mega Lifesciences PTY Ltd.

(Cambodia)

Mega Lifesciences PTY Ltd.

(Cambodia)

E-Sense Ltd.(Thailand)

E-Sense Ltd.(Thailand)

Mega Lifesciences Ltd.(Myanmar)

Mega Lifesciences Ltd.(Myanmar)

Mega Lifesciences(Vietnam) Ltd.

(Vietnam)

Mega Lifesciences(Vietnam) Ltd.

(Vietnam)

Mega LifesciencesNigeria Ltd.

(Nigeria)

Mega LifesciencesNigeria Ltd.

(Nigeria)

Mega Lifesciences Ghana Ltd.

(Ghana)

Mega Lifesciences Ghana Ltd.

(Ghana)

Mega Lifesciences Pvt.Ltd.

(India)

Mega Lifesciences Pvt.Ltd.

(India)

Mega Lifesciences Pte. Ltd.

(Singapore)

Mega Lifesciences Pte. Ltd.

(Singapore)

Mega Lifesciences(Australia) Pty. Ltd.

(Australia)

Mega Lifesciences(Australia) Pty. Ltd.

(Australia)

Mega Product (Yemen) Ltd.

(Yemen)

Mega Product (Yemen) Ltd.

(Yemen)

Note : As at 30 June 2014

45We care

Our Board of Directors

10

1. Mr. Mechai Viravaidya - Chairman of the Board of Directors & Independent Director 6. Mr. Ishaan Shah – Director

2. Mr. Alan Kam - Director / Independent Director / Chairman of Audit Committee 7. Ms. Sameera Shah – Director

3. Mr. Manu SawangJaeng - Director / Independent Director / Audit Committee / Chairman of Remuneration and Nomination Committee 8 Mr. Shiraz Erach Poonevala – Director

4. Mr. Thor Santhisiri - Director / Independent Director / Audit Committee 9. Mr. Vivek Dhawan – Director / Remuneration and Nomination Committee

5. Mr. Kirit Shah - Director / Remuneration and Nomination Committee 10. Mr. Thomas Abraham – Director

1 2

34

5

67 8

9

46We care

Management ably supported by other experienced in-country personnel and teams

Management team instrumental in building the business is significantly invested in the Company

Vivek DhawanChief Executive Officer and Chief coach• Joined Mega in 1986

Thomas AbrahamChief Financial Officer and

Head coach • Joined Mega in 1998

Duangnapa TongsiriPresident and Head coach, Mega We Care , Thailand

(excluding Manufacturing)• Joined Mega in 1993

Girish WadhwaPresident and Head coach,

Mega We Care and Maxxcare, Myanmar

• Joined Mega in 1997

Paramjit SinghPresident International and

Head coach ,Mega We Care and Maxxcare

(excluding Thailand , Myanmar and Manufacturing)Joined Mega in 1993

Management team has a collective history of over 100 years working with the Company. As at 30 June 2014, management holds 11.70% of MEGA shares.

John FarleyManaging Director, Australia, 1989

Apichai ChancharusiriDirector Manufacturing, 1985

Pornchai WongpayakDirector Quality Control, 1990

47

Shareholding Structure as at 30 June 2014

ManagementManagementShah FamilyShah Family

34.53% 11.70%50.08% 0.02% 3.67%

Other InvestorsOther Investors UnistretchCompany Ltd.

UnistretchCompany Ltd.

GloblexCorporation Ltd.

GloblexCorporation Ltd.

Mega Lifesciences PCLMega Lifesciences PCL

Shah group 53.77%

48We care

1093 1,280 1,361

12451,535

1,803

838

947 1,062

19

23

27

Mega We Care Maxxcare Manufacturing Corporate/Others

Number of employees have increased steadily with growth in the business

Human resources

Overview

• Mega prides on its ‘people-first’ culture which focuses on the development of human capital

• We focus on educating and developing skills of managers and employees

• Seek to help all employees capitalise on their strengths and develop to their full potential

• There have been no major labour disputes in the workforce

3,195

3,7854,253

2011 2012 2013

49We care

The presentation contains forward-looking statements which are based onMEGAs’ current expectation, estimates and projections about its industry,management’s beliefs and certain assumptions made by MEGA.These forward-looking statements are subject to various risks anduncertainties. No assurance is given that future events will occur or that ourassumptions are correct. Actual results may differ materially from thoseprojected.

For any further queries please contact:Email : [email protected]: +66 27694222 Ext. 4230Fax: +66 27694244

Disclaimer

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