Interim seperate financial statement 30 June 2014

CONTENTS General information Report of management Report on review of interim separate financial statements Interim separate balance sheet Interim separate income statement Interim separ

Interim separate financial statements

30 June 2014

CONTENTS

General information

Report of management

Report on review of interim separate financial statements

Interim separate balance sheet

Interim separate income statement

Interim separate cash flow statement

Notes to the interim separate financial statements

Pages

The current principal activities of the Company are to trade gold, silver, jewelry and gemstones, and

to import and export jewelry in gold, silver and gemstones

The Company's head office is located at 170E Phan Dang Luu Street, Phu Nhuan District, Ho Chi Minh City, Vietnam in addition, the Company also has one hundred and fifty three (153) retail shops located in various provinces in Vietnam

BOARD OF DIRECTORS

Members of the Board of Directors during the period and at the date of this report are:

Mrs Cao Thi Ngoc Dung Chairwoman

Mr Nguyen Vu Phan Vice Chairman

Mr Nguyen Tuan Quynh Member

Mrs Nguyen Thi Bich Ha Member

Mrs Pham Vu Thanh Giang Member

Mrs Nguyen Thi Huong Giang Member appointed 3 March 2014

BOARD OF SUPERVISION

Members of the Board of Supervision during the period and at the date of this report are:

Mr Pham Van Tan Head of the Board of Supervision

MANAGEMENT

Members of the Management during the period and at the date of this report are:

Mrs Cao Thi Ngoc Dung General Director

Mr Le Huu Hanh Deputy General Director

Mrs Nguyen Thi Cuc Deputy General Director

Mr Nguyen Vu Phan Deputy General Director

Mrs Pham Thi My Hanh Deputy General Director

» select suitable accounting policies and then apply them consistently;

> make judgements and estimates that are reasonable and prudent;

> state whether applicable accounting standards have been followed, subject to any material

departures disclosed and explained in the interim separate financial statements; and

» prepare the interim separate financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue its business

Management is responsible for ensuring that proper accounting records are kept which disclose, with reasonable accuracy at any time, the interim separate financial position of the Company and to ensure that the accounting records comply with the applied accounting system It is also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities

Management confirmed that it has complied with the above requirements in preparing the accompanying interim separate financial statements

and presentation of interim separate financial statements

The Company is a parent company with subsidiaries and it is in the process of completing the interim consolidated financial statements of the Company and its subsidiaries (“the Group”) for the six-month period ended 30 June 2014 to meet the prevailing regulatory reporting requirements Users of these interim separate financial statements should read them together with the said interim consolidated financial statements in order to obtain full information on the interim consolidated financial position, interim consolidated results of operations and interim consolidated cash flows of

He Chi Mine City, Vietnam

Reference: 60984835/16997233

REPORT ON REVIEW OF INTERIM SEPARATE FINANCIAL STATEMENTS

To: The Shareholders of Phu Nhuan Jewelry Joint Stock Company

We have reviewed the interim separate financial statements of Phu Nhuan Jewelry Joint Stock

Company ("the Company”), as set out on pages 4 to 35 which comprise the interim separate balance

sheet as at 30 June 2014, and the interim separate income statement and interim separate cash flow statement for the six-month period then ended, and the notes thereto

The preparation and presentation of these interim separate financial statements are the responsibility

of the Company's management Our responsibility is to issue a report on these interim separate

financial statements based on our review

We conducted our review in accordance with Vietnamese Standard on Auditing No 910 —

Engagements to Review Financial Statements This standard requires that we plan and perform the review to obtain moderate assurance as to whether the interim separate financial statements are free from material misstatement A review is limited primarily to inquiries of the Company's personnel and analytical procedures applied to financial data and thus provides less assurance than an audit We have not performed an audit and, accordingly, we do not express an audit opinion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim separate financial statements do not give a true and fair view, in all material respects, of the interim separate financial position of the Company as at 30 June 2014, and of the interim separate results of its operations and its interim separate cash flows for the six-month period

then ended in accordance with Vietnamese Accounting Standards, Vietnamese Enterprise Accounting

System and the statutory requirements relevant to the preparation and presentation of interim separate financial statements

As disclosed in Note 2.1 to the interim separate financial statements, the Company is a parent

company with subsidiaries and it is in the process of completing the interim consolidated financial statements of the Company and its subsidiaries ("the Group") for the six-month period ended 30 June

2014 to meet the prevailing regulatory reporting requirements Users of these interim separate

financial statements should read them together with the said interim consolidated financial statements

in order to obtain full information on the interim consolidated financial position, interim consolidated results of operations and interim consolidated cash flows of the Group as a whole

Nguyen Thanh Sang

Audit Practicing Registration Certificate Audit Practicing Registration Certificate

152 2 Value-added tax deductible 4,719,741,120 6,740,452,800

154 3 Tax and other receivables

158 4 Other current assets 8 42,739,982,919 11,637,562,458

323 8 Bonus and welfare fund 40,439,417,255 35,940,716,947

330 | Il Non-current liabilities 141,819,414,219 130,009,327,149

440 | TOTAL LIABILITIES AND

OFF BALANCE SHEET ITEM

25 August 2014

INTERIM SEPARATE INCOME STATEMENT

for the six-month period ended 30 June 2014

VND

For the six-month For the six-month period ended 30 period ended 30

01 1, Revenue from sale of goods

and rendering of services 19.4 3,652,395,985,767 3,827,286,806,501

10 | 3 Net revenue from sale of

goods and rendering of

411 | 4 Cost of goods sold and

services rendered 20 {3,226,869,125,817) | (3,500,494,942,330)

20 | 5 Gross profit from sale of

goods and rendering of

50 | 14 Profit before tax 156,343,869,833 110,683,007,589

51 15 Current corporate income

52 | 16 Deferred income tax benefit | 23.2

2B August 2014

INTERIM SEPARATE CASHFLOW STATEMENT

for the six-month period ended 30 June 2014

VND For the six-month For the six-month period ended period ended

1 CASH FLOWS FROM

14 Corporate income tax paid 23.1 (45,501,519,643) (22,951,501,889)

16 Other cash outflows from

27 Interest and dividends received 11,665,344,342 629,223,314

30 | Net cash flows from (used in)

INTERIM SEPARATE CASHFLOW STATEMENT (continued)

for the six-month period ended 30 June 2014

VND For the six-month For the six-month

period ended period ended

50 | Net decrease in cash and cash

25 August 2014

NOTES TO THE INTERIM SEPARATE FINANCIAL STATEMENTS

as at and for the six-month period ended 30 June 2014

21

CORPORATE INFORMATION

Phu Nhuan Jewelry Joint Stock Company (‘the Company’) is a shareholding company incorporated under the Law on Enterprise of Vietnam pursuant to the Business Registration Certificate No 0300521758 issued by the Department of Planning and Investment of Ho Chi Minh City on 2 January 2004, as amended

The Company was listed on the Ho Chi Minh City Stock Exchange ("HOSE") from 23 March

2008 pursuant to the Decision No 129/DKNY issued by the General Director of HOSE on

26 December 2008

The current principal activities of the Company are to trade gold, silver, jewelry and gemstones, and to import and export jewelry in gold, silver and gemstones

The Company's head office is located at 170E Phan Dang Luu Street, Phu Nhuan District,

Ho Chi Minh City, Vietnam In addition, the Company also has one hundred and fifty three (153) retail shops located in various provinces in Vietnam

The number of the Company's employees as at 30 June 2014 was 2,494 (31 December

2013: 2,172)

BASIS OF PREPARATION

Accounting standards and system

The interim separate financial statements of the Company, expressed in Vietnam dong ("VND"), are prepared in accordance with Vietnamese Enterprise Accounting System, Vietnamese Accounting Standard No 27 - Interim Financial Reporting and other Vietnamese Accounting Standards issued by the Ministry of Finance as per:

® Decision No 149/2001/QD-BTC dated 31 December 2001 on the Issuance and Promulgation of Four Vietnamese Accounting Standards (Series 1);

> Decision No 165/2002/QD-BTC dated 31 December 2002 on the Issuance and Promulgation of Six Vietnamese Accounting Standards (Series 2);

» Decision No 234/2003/QD-BTC dated 30 December 2003 on the Issuance and Promulgation of Six Vietnamese Accounting Standards (Series 3);

> Decision No 12/2005/QD-BTC dated 15 February 2005 on the Issuance and Promulgation of Six Vietnamese Accounting Standards (Series 4); and

» Decision No 100/2005/QD-BTC dated 28 December 2005 on the Issuance and Promulgation of Four Vietnamese Accounting Standards (Series 5)

Accordingly, the accompanying interim separate balance sheet, interim separate income statement, interim separate cash flow statement and related notes, including their utilisation are not designed for those who are not informed about Vietnam's accounting principles, procedures and practices and furthermore are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries other than Vietnam

The Company is a parent company with subsidiaries and it is in the process of completing the interim consolidated financial statements of the Company and its subsidiaries (‘the Group") for the six-month period ended 30 June 2014 to meet the prevailing regulatory reporting requirements Users of these interim separate financial statements should read them together with the said interim consolidated financial statements in order to obtain full information on the interim consolidated financial position, interim consolidated results of operations and interim consolidated cash flows of the Group as a whole

NOTES TO THE INTERIM SEPARATE FINANCIAL STATEMENTS (continued)

as at and for the six-month period ended 30 June 2014

BASIS OF PREPARATION (continued)

Applied accounting documentation system

The Company's applied accounting documentation system is the General Journal system Fiscal year

The Company's fiscal year applicable for the preparation of its separate financial statements starts on 1 January and ends on 31 December

Accounting currency

The interim separate financial statements are prepared in VND which is also the Company's

accounting currency

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, cash at banks, gold, and short-term, highly liquid investments with an original maturity of less than three months that are readily convertible into known amounts of cash and that are subject to an insignificant risk of change in value

Inventories

inventories are stated at the lower of cost incurred in bringing each product to its present

location and condition, and net realisable value

Net realisable value represents the estimated selling price in the ordinary course of business less the estimated costs to complete and the estimated costs necessary to make the sale

The perpetual method is used to record inventories, which are valued as follows:

Merchandises, consumables, and - cost of purchase on a weighted average basis raw materials

Finisned goods and work-in process - cost of direct materials and labour plus

attributable manufacturing overheads based on the normal operating capacity on a weighted average basis

Provision for obsolete inventories

An inventory provision is created for the estimated loss arising due to the impairment of value (through diminution, damage, obsolescence, etc.) of merchandise goods, raw materials, finished goods, and other inventories owned by the Company, based on appropriate evidence of impairment available at the balance sheet date

increases and decreases to the provision balance are recorded into the cost of goods sold

account in the interim separate income statement

10

NOTES TO THE INTERIM SEPARATE FINANCIAL STATEMENTS (continued)

as at and for the six-month period ended 30 June 2014

The cost of a fixed asset comprises its purchase price and any directly attributable costs of

bringing the fixed asset to working condition for its intended use

Expenditures for additions, improvements and renewals are added to the carrying amount of the assets and expenditures for maintenance and repairs are charged to the interim separate income statement as incurred

When fixed assets are sold or retired, their cost and accumulated depreciation or amortization are removed from the interim separate balance sheet and any gain or loss resulting from their disposal is included in the interim separate income statement

Land use rights

Land use right is recorded as an intangible fixed asset on the interim separate balance sheet when the Company obtained the land use right certificates The costs of land use right comprise all directly attributable costs of bringing the land lot to the condition available for intended use and is not amortized due to its indefinite useful life

Depreciation and amortization

Depreciation of tangible fixed assets and amortization of intangible fixed assets are calculated on a straight-line basis over the estimated useful life of each asset as follows: Buildings and structures 3-25 years

Machinery and equipment 3-15 years

The useful life of the fixed assets and depreciation and amortization rates are reviewed periodically to ensure that the method and the period of the depreciation and amortisation are consistent with the expected pattern of economic benefits that will be derived from the

use of fixed assets

Borrowing costs

Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds and are recorded as expense during the period in which they are incurred,

Prepaid expenses

Prepaid expenses are reported as short-term or long-term prepaid expenses on the interim separate balance sheet and are amortized over the period for which the amounts are paid or the period in which economic benefits are generated in relation to these expenses

The following types of expenses are recorded as long-term prepaid expense and are amortised to the interim separate income statement

> Prepaid rental includes land and shop rental prepaid for many years under operating lease contracts and are amortized over the lease term;

» Tools and consumables with large value issued in use and can be used for more than one year; and

> Others are amortized to the interim separate income statement over 2 to 3 years

11

NOTES TO THE INTERIM SEPARATE FINANGIAL STATEMENTS (continued)

as at and for the six-month period ended 30 June 2014

Investments in subsidiaries over which the Company has control are carried at cost

Distributions from accumulated net profits of the subsidiaries arising subsequent to the date

of acquisition are recognized in the interim separate income statement Distributions from sources other than from such profits are considered a recovery of investment and are

deducted to the cost of the investment

investments in associates

Investments in associates over which the Company has significant influence are accounted for under the cost method of accounting Distributions from the accumulated net profits of

the associates arising subsequent to the date of acquisition by the Company are recognized

in the interim separate income statement Distributions from sources other than from such profits are considered a recovery of investment and are deducted to the cost of the investment

Investments in securities and other investments

Investments in securities and other investments are stated at their acquisition costs

Provision for investments

Provision is made for any diminution in value of the investments at the balance sheet date in accordance with the guidance under the Circular No 228/2009/TT-BTC issued by the Ministry of Finance on 7 December 2009 and the Circular No 89/2013/TT-BTC issued by the Ministry of Finance on 28 June 2013 Increases and decreases to the provision balance are recorded as finance expense in the interim separate income statement

Payables and accruals

Payables and accruals are recognised for amounts to be paid in the future for goods and

services received, whether or not billed to the Company

Foreign currency transactions

The Company follows the guidance under Vietnamese Accounting Standard No 10 - Effects

of changes in foreign exchange rates and the Circular No 179/2012/TT-BTC providing guidance on recognition, measurement, treatment for foreign exchange differences issued

by the Ministry of Finance on 24 October 2012 in relation to foreign currency transactions as applied consistently in prior periods,

Transactions in currencies other than the Company's reporting currency of VND are recorded at the exchange rates ruling at the date of the transaction At the end of the period, monetary assets and liabilities denominated in foreign currencies are translated at buying exchange rate announced by the commercial bank where the Company maintains bank accounts ruling at the balance sheet date All realised and unrealised foreign exchange differences are taken to the interim separate income statement

Treasury shares

Own equity instruments which are reacquired (treasury shares) are recognised at cost and deducted from equity No gain or loss is recognised in profit or loss upon purchase, sale, issue or cancellation of the Company's own equity instruments

12

NOTES TO THE INTERIM SEPARATE FINANCIAL STATEMENTS (continued)

as at and for the six-month period ended 30 June 2014

3.75

3.76

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Appropriation of net profits

Net profit after tax is available for appropriation to shareholders after approval in the shareholders’ meeting, and after making appropriation to reserve funds in accordance with the Company's Charter and Vietnam's regulatory requirements

The Company maintains the following reserve funds which are appropriated from the Company's net profit as proposed by the Board of Directors and subject to approval by shareholders at the annual general meeting

» Financial reserve fund

This fund is set aside to protect the Company's normal operations from business risks

or losses, or to prepare for unforeseen losses or damages for objective reasons and

force majeure, such as fire, economic and financial turmoil of the country or elsewhere

> Investment and development fund

This fund is set aside for use in the Company's expansion of its operation or in-depth investments

> Bonus and welfare fund

This fund is set aside for the purpose of pecuniary rewarding and encouraging, common benefits and improvement of the employees’ benefits and is recognised as a liability Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured Revenue is measured at the fair value of the consideration received or receivable, excluding trade discount, rebate and sales return The following specific recognition criteria must also be met before revenue is recognised:

NOTES TO THE INTERIM SEPARATE FINANCIAL STATEMENTS (continued)

as at and for the six-month period ended 30 June 2014

317

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Taxation

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at

the amount expected to be recovered from or paid to the taxation authorities The tax rates and tax laws used to compute the amount are those that are enacted as at the balance

sheet date

Current income tax is charged or credited to the interim separate income statement, except when it relates to items recognised directly to equity, in which case the current income tax is also dealt with in equity

Current income tax assets and liabilities are offset when there is a legally enforceable right for the Company to offset current income tax assets against current income tax liabilities and when the Company intends to settle its current income tax assets and liabilities on a net basis

Deferred income tax

Deferred income tax is provided using the liability method on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes

Deferred income tax liabilities are recognised for all taxable temporary differences, except where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction which at the time of the related transaction affects neither the accounting profit nor taxable profit or loss

Deferred income tax assets are recognised for all deductible temporary differences, carried forward unused tax credit and unused tax losses, to the extent that it is probable that taxable profit will be available against which deductible temporary differences, carried forward unused tax credit and unused tax losses can be utilised, except where the deferred income tax asset in respect of deductible temporary difference which arises from the initial recognition of an asset or liability which at the time of the related transaction, affects neither the accounting profit nor taxable profit or loss

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised Previously unrecognised deferred income tax assets are re-assessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred income tax assets to be recovered

Deferred income tax assets and liabilities are measured at the tax rates that are expected to

apply in the period when the asset is realised or the liability is settled based on tax rates and tax laws that have been enacted at the balance sheet date

Deferred income tax is charged or credited to the interim separate income statement, except when it relates to items recognised directly to equity, in which case the deferred income tax

is also dealt with in the equity account

Deferred income tax assets and liabilities are offset when there is a legally enforceable right for the Company to offset current income tax assets against current income tax liabilities and when they relate to income taxes levied by the same taxation authority on either the same taxable entity or when the Company intends either settle current income tex liabilities and assets on a net basis or to realise the assets and settle the liabilities simultaneously, in

each future period in which significant amounts of deferred income tax liabilities or assets

are expected to be settled or recovered

14