Verofarm : OJSC «VEROPHARM» ANNOUNCES FINANCIAL RESULTS OF FIRST QUARTER OF 2014

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FOR IMMEDIATE DISTRIBUTION

JUNE 05, 2014 OJSC «VEROPHARM» ANNOUNCES FINANCIAL RESULTS OF 2013

June 05, 2014, MOSCOW - OJSC «VEROPHARM» [RTS:VRPH, MICEX:VFRM] announces its unaudited financial results of the first quarter of 2014 in accordance with the International Financial Reporting Standards (IFRS).

SALES

o Sales in the first quarter of 2014 amounted to RUR 1,311 mln. The share of product segments in OJSC "Veropharm" sales is as follows:

Group of pharmaceutical products

 Rx drugs sales amounted to RUR 948 mln. The Rx drugs sales made 72.3% of total sales of the Company;

 OTC drugs sales amounted to RUR 187 mln. The OTC drugs sales made 14.2% of total sales of the Company;

 Traditional drugs sales amounted to RUR 2 mln. The traditional drugs sales made

0.2% of total sales of the Company;

Group of non-pharmaceutical products

 Non-pharmaceutical products sales made RUR 174 mln, which corresponds to 13.3%

of total sales of the Company.

o Under the Federal Reimbursement Program (FRP) Veropharm's sales amounted to RUR 17.6 mln according to the results of the first quarter of 2014, which corresponds to 1.3% of the Company's total sales.

o The Russian Federation is the main market and ensures 97.5% of the Company's sales. During the first quarter of 2014 the Company has exported 2.5% of its

products.

119530, Moscow, Russia, Ochakovskoe shosse, 10-2-1, tel.: [phone]

PROFIT

o In the first quarter of 2014 the gross profit of OJSC "Veropharm" amounted to RUR

644 mln. The gross profit ratio in the first quarter of 2014 made 49.1%. The gross
profit ratio of the segments of OJSC "Veropharm" is as stated:

Group of pharmaceutical products

 In relation to Rx drugs it made 44.8% in the first quarter of 2014;

 In relation to OTC drugs it made 57.0% in the first quarter of 2014;

 In relation to traditional products it made 42.7% in the first quarter of 2014.

Group of non-pharmaceutical products

 In relation to non-pharmaceutical products it made 64.4% in the first quarter of

2014.

o In the first quarter of 2014 EBITDA amounted to RUR 310 mln. EBITDA margin made

23.7%.

o Operating profit in the first quarter of 2014 made RUR 276 mln. Operating profit margin made 21.1% in the first quarter of 2014.

o Net profit for the reporting period amounted to RUR 30 mln. Net profit margin made

2.3%.

FACILITIES INVESTMENTS

o In the first quarter of 2014 the amount of investments assigned for modernization and equipment of the main production facilities of the Company made RUR 404 mln.

DEBT

o As at March 31, 2014 the debt of OJSC "Veropharm" amounted to RUR 2,852 mln, which makes 31% of the Company's net assets value.

RUR mln	Segment sales		Gross profit
	3m2014	3m2013	% growth		3m2014	3m2013	% growth
Pharmaceutical products	1,137	1,114	2%		532	745	-29%
Non-pharmaceutical products	174	86	102%		112	49	129%
Total	1,311	1,200	9%		644	794	-19%

119530, Moscow, Russia, Ochakovskoe shosse, 10-2-1, tel.: [phone]

For further information please call OJSC "Veropharm":

Maksutova Nadiya,

Chief Financial Officer

[e-mail]. [phone]

Or visit the web-site of the Company www.veropharm.ru

Notes to the Editor:

VEROPHARM OJSC is one of the largest Russian pharmaceutical manufacturers.

Shares of the Company are traded at MICEX (ticker: VFRM). Market capitalization of the Company as of June

02, 2014 totaled RUR 11,031 billion (according to RTS).

The charter capital of the Company makes 10 million ordinary shares.

VEROPHARM OJSC is the market leader in Russia for production of plasters and oncological medicines. The

Company's production facilities comprise 3 pharmaceutical plants in Belgorod, Voronezh and Pokrov. The

Company's product portfolio includes more than 300 items. VEROPHARM OJSC employs more than 1,700 people.

In the annual research conducted by the portal SuperJob.ru among Russian companies OJSC "VEROPHARM" is recognized as one of the most attractive employers in the labor market and is awarded the status of "Attractive employer-2012".

According to DSM Group, following the results of the first quarter of 2014 Veropharm occupies the 4th position in

the rating "Russian pharmaceutical manufacturers in production volume terms".

According to DSM Group, following the results of the first quarter of 2014, as compared to the same period of the previous year, Veropharm takes the following positions among Russian and foreign manufacturers in the rating "Oncology drugs manufacturers":

o 4th place in monetary terms

o 1st place in physical terms (occupies the leading position).

THIS DOCUMENT IS NOT AN ADVERTISEMENT OF SECURITIES IN THE RUSSIAN FEDERATION, AND IS NOT AN OFFER TO SELL, OR AN INVITATION TO MAKE OFFERS TO PURCHASE, ANY SECURITIES IN THE RUSSIAN FEDERATION.

NOT FOR RELEASE, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN.

This document may include statements that are "forward-looking statements", including future operating results of the Company. These forward-looking statements involve risk and uncertainty regarding implementation of future activities. As a result, actual future results may differ materially from the plans, goals and expectations set out in these forward-looking statements. The Company undertakes no obligation to change these statements to reflect actual results.

This document does not contain a public offer to purchase securities in the US. The securities referred to herein have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States or

to US persons.

This communication is being distributed only to and is directed only at (a) persons outside the United Kingdom, (b) persons who have professional experience in matters relating to investments, i.e., investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), and (c) high net worth companies, unincorporated associations and other bodies to whom it may otherwise lawfully be communicated in accordance with Article 49 of the Order (all such persons together being referred to as "relevant persons"). The securities are available only to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be available only to or will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this communication or any of its contents.

119530, Moscow, Russia, Ochakovskoe shosse, 10-2-1, tel.: [phone]

veropharm

OJSC"VEROPHARM"

CONSOLIDATED INCOME STATEMENT FOR THE PERIOD ENDED 31 MARCH 2013

(in millions of Russian Roubles) 3m.2014 3m.2013

REVENUE	1,311		1,200
COST OF SALES	(667)		(405)
GROSS PROFIT	644		794
SELLING, GENERAL ANO ADMINISTRATIVE EXPENSES	(369)		(326)
OPERARING PROFIT	276		468
INTEREST EXPENSE	5		(4)
FOREIGN CURRENCY EXCHANGE GAIN/(LOSS)	(245)		(44)
PROFIT BEFORE INCOME TAX	36		420
INCOME TAX EXPENSE	(6)		(78)
PROFIT FOR THE YEAR	30		343

119530, Moscow, Russia, Ochakovskoe shosse, 10-2-1,tel.: [phone]

veropharm OJSC "VEROPHARM" CONSOLIDATED BALANCE SHEET

AT 31 MARCH 2014

(in millions of Russian Roubles) 31.03.2014 31.12.2013

ASSETS

NON-CURRENT ASSETS: Property, plant & equipment Goodwill

lntangible assets

Other long-term assets

Total non-current assets

CURRENT ASSETS:

lnventories

Trade receivables

Other receivables and prepaid expenses

Loans receivable

Cash and cash equivalents

Total current assets

TOTAL ASSETS

EQUITY ANO LIABILITIES EQUITV:

Share capitai

Reserves

Retained earnings

Total equity

NON-CURRENT LIABILITIES: Long-term borrowings Deferred tax liabilities, net

Total non-current liabilities

CURRENT LIABILITIES: Short-term borrowings Trade payables

Other payables and accrued expenses

Short-term portion of obligations under finance leases

Taxes payable

Total current liabilities

TOTAL LIABILITIES

TOTAL EQUITY ANO LIABILITIES

5,508 5,136

287 287

449 444

6,244 5,868

1,281 957

3,417 3,773

2,738 2,677

208 49

7,644 7,455

13,888 13,323

10 10

1 1

9,126 9, 097

9,137 9,107

2,445 1, 546

168 245

2,613 1,791

407 1'120

1,299 914

285 266

o o

148 125

2,139 2,425

4,752 4,216

13,888 13,323

119530, Moscow, Russia, Ochakovskoe shosse, 10-2-1,tel.: [phone]

veropharm

OJSC "VEROPHARM"

CONSOLIOATEO STATEM ENT OF CASH FLOWS FOR THE 10 2014

(in millions of Russi an Roubles)

OPERATING ACTIVITIES:

Profit for the year

Adjustme nts to profit for the year:

lncome tax lnterest expense lnterest income

Oepreciation and amortization

Loss on disposal of other intangible assets and property, plant and equipment

Change in allowance for doubtful debts Change in inventory obsolescence allowance Foreign currency exchange (gainYioss, net Unused employment benefits

Profit before movements in working capitai

Movements in working capitai:

lncrease in inventories lncrease in trade receivables

Oecrease/(lncrease) in other receivables and prepaid expenses

Oecrease/(lncrease) in trade payables lncrease in other payables and taxes payable

Cash generated from operations

lnterest paid lnterest received lncome taxes paid

Net cash generated by operating activities

INVESTING ACTIVITIES:

Purchase of property , plant, equipment

Proceeds from disposal of property , plant, equipment

Purchase of intangible assets

Cash disposed with sale of subsidiary

Loans given to related parties

Proceeds from repayment of loans given

3m.2014 3m2013

30 343

6 78

41 (5) (36)

35 32

1

12 (1) (48) 14

245 44

275 514

(284) 162

344 (145) (56) (641)

150 (84) (11) 63

418 -132

(42)

(29) (10)

389 -182

(404) (402)

8 (1) (8) (6)

Net cash used in i nvesting activities (404) (408)

FINANCING ACTIVITIES:

Proceeds from borrowings	943		592
Repayment of borrowings and obligations under finance leases	(758)		(203)
Net cash used in financi ng activities	185		389
NET INCREASEICDECREASE) IN CASH ANO CASH EQUIVALENTS	170		(202)
Effect of exchanges in baiance of cash held in foreign currencies CASH ANO CASH EQUIVALENTS, beginning of period	(1 O) 49		308
CASH A NO CASH EQUIVALENTS, end of period	208		98

119530, Moscow, Russia, Ochakovskoe shosse, 10-2-1,tel.: [phone]