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Deloitte U U MINISTRY OF SCIENCE AND TECHNOLOGY U VIETNAM CLIMATE INNOVATION CENTER PROJECT Financing Agreement No. TF OA1407-VN AUDITED FINANCIAL STATEMENTS, g ASSURANCE REPORTS AND MANAGEMENT LETTER U FoUh eredd3 eebr21 VIETNAM CLIMATE INNOVATION CENTER PROJECT Financing Agreement No. TF OA1407-VN TABLE OF CONTENTS CONTENTS PAGE(S) PARTI FINANCIAL STATEMENTS Statement of the Project Management Unit 2 Independent Auditors' Report 3 -4 Balance sheet 5 Statement of Income and Expenditures 6 Statement of Sources and Uses of funds 7 Statement of Designated Account 8 Statement of Withdrawals 9 Notes to the Financial Statements 10 - 13 PART II INDEPENDENT AUDITORS' ASSURANCE REPORT ON 14 - 15 INTERNAL CONTROL PART III INDEPENDENT AUDITORS' ASSURANCE REPORT ON COMPLIANCE Statement of the Project Management Unit on Compliance 16 Independent Auditors' Assurance Report on Compliance 17- 18 PART IV MANAGEMENT LETTER 19-23 U1 . • . ■ . • . , . ■ . ■ PARTI . 口FINANcIAL sTATE間ENTS . . ■ . • ■ ■ ■ . • . . • . • . . • • . VIETNAM CLIMATE INNOVATION CENTER PROJECT Financing Agreement No. TF OA1407-VN STATEMENT OF THE PROJECT MANAGEMENT UNIT The Project Management Unit of Vietnam Climate Innovation Center Project (the "Project Management Unit") presents this report together with the financial statements of Vietnam Climate Innovation Center Project (the "Project") - Financing Agreement No. TF OA1407-VN for the year ended 31 December 2018. The Project Management Unit The members of the Project Management Unit of the Project who held office during the year and to the date of this report are as follows: Mr. Pham Duc Nghiem Director Ms. Dang Thi Tuyet Chief Accountant The Project Management Unit's Statement of Responsibility The Project Management Unit is responsible for preparing the financial statements, which comprise the balance sheet as at 31 December 2018, the statement of income and expenditures, the statement of sources and uses of funds, statement of designated account, statement of withdrawals for the year then ended and the notes to the financial statements, including a summary of significant accounting policies, which give a true and fair view of the financial position of the Project and designated account balances as at 31 December 2018 as well as of the income and expenditures, the receipts and disbursements of the Project, designated account movements and fund withdrawals for the year then ended, in accordance with the accounting convention and the accounting policies set out in Note 2 and Note 3 of the notes to the financial statements and the covenants contained in Financing Agreement No. TF OA1407-VN. In preparing these financial statements, the Project Management Unit is required to: 0 Select suitable accounting policies and then apply them consistently; 0 Make judgments and estimates that are reasonable and prudent; 0 State whether applicable accounting principles have been followed, subject to any material departures disclosed and explained in the financial statements; Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Project will continue in operation; and Design and maintain effective internal control over compliance with requirements that could have a direct and material financial effect on the financial statements as well as over financial reporting for the purpose of properly preparing and presenting the financial statements so as to minimise errors and frauds; and take responsibility for its assertions as to the effectiveness of such internal control. The Project Management Unit is responsible for ensuring that proper accounting records are kept, which disclose, with reasonable accuracy at any time, the financial position of the Project and that the financial statements are prepared in accordance with the accounting convention and the accounting policies set out in Note 2 and Note 3 of the notes to the financial statements. The Project Management Unit is responsible for using the Project's funds as intended for the Project and for complying with Financing Agreement No. TF OA1407-VN as well as laws and regulations applicable to the Project. The Project Management Unit is also responsible for safeguarding the assets of the Project and hence for taking reasonable steps for the prevention and detection of frauds and other irregularities. The Project Management Unit confirms that they have complied with the above requirements in preparing these financial statements. For and on behalf of the Project Management Unit, Pham Duc Nghiern Director Hanoi, 21 lune 2019 2 Deloitte Vietnam Company Ltd. D5thFloor, Vinaconex Tower, D elo itte 34 Lang Ha Street, Lang Ha Ward, Dong Da District, Hanoi, Vietnam Tel :+84 24 6288 3568 Fax:+84 24 6288 5678 Website: www.deloitte.com/vn No.: DO {) /VN1A-HN-BC INDEPENDENT AUDITORS' REPORT To: The Project Management Unit of Vietnam Climate Innovation Center Project Opinion We have audited the financial statements of Vietnam Climate Innovation Center Project - Financing Agreement No. TF 0A1407-VN (the "Project"), prepared on 21 June 2019, as set out from page 05 to page 13, which comprise the balance sheet as at 31 December 2018, the statement of income and expenditures, statement of sources and uses of funds, statement of designated account, statement of withdrawals for the year ended 31 December 2018, and the notes to the financial statements, including a summary of significant accounting policies. In our opinion the accompanying financial statements give a true and fair view of the financial position and designated account balances of the Project as at 31 December 2018 as well as of the income and expenditures, the receipts and disbursements of the Project, designated accotnt movements and fund withdrawals for the year then ended, in accordance with the accounting convention and the accounting policies set out in Note 2 and Note 3 of the Notes to the financial statements. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Project in accordance with the ethical requirements that are relevant to our audit of the financial statements, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our unmodified opinion. Emphasis of Matter - Basis of Accounting We draw attention to Note 2 and Note 3 of the Notes to the financial statements, which describes the accounting convention and the summary of the significant accounting policies. The financial statements are prepared in accordance with the accounting convention and the accounting policies set out in Note 2 and Note 3 of the Notes to the financial statements and the requirements of the World Bank. Our opinion is not modified in respect of this matter. Responsibilities of Management and those charged with governance for the Financial Statements Management is responsible for the preparation of the financial statements in accordance with the accounting convention and the accounting policies set out in Note 2 and Note 3 of the Notes to the financial statements, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Project's ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless management either intends to liquidate the Project, or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Project's financial reporting process. Deloitte refers to one or more of Deloitte Touche Tahmatsu Ltd., a UK private company limited by guarantee ("DTTL"), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as "Deloitte Global") does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms. 3 Deloitte INDEPENDENT AUDITORS' REPORT (Continued) Auditors' Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that inculdes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing (ISAs) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: * Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. * Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. * Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Project's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Project to cease to continue as a going concern. * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates, if any, and related disclosures made by management. We communicate with those charged with governance and the Project Management Unit regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Dang Chi Dung Nguy nAnhTuan Deputy General Director Auditor Audit Practising Registration Certificate Audit Practising Registration Certificate No. 0030-2018-001-1 No. 1472-2018-001-1 DELOITTE VIETNAM COMPANY LIMITED 21 June 2019 Hanoi, S.R. Vietnam U 4 VIETNAM CLIMATE INNOVATION CENTER PROJECT Financial Statements Financing Agreement No. TF OA1407-VN For the ended 31 December 2018 BALANCE SHEET As at 31 December 2018 Notes Closing balance Opening balance VND VND * ASSETS Current assets Cash 5 611,513,751 984,038,502 Advances to subprojects 6 14,374,529,830 8,749,774,090 Other receivables - 603,309,887 Total assets 14,986,043,581 10,337,122,479 LIABILITIES Payables to employees - 472,876,855 Taxes and amounts payable to the State budget - 56,873,085 Other payables 7 55,100,250 115,729,444 Total liabilities 55,100,250 645,479,384 NET ASSETS 14,930,943,331 9,691,643,095 Surplus of income over expenditures 14,685,064,082 9,574,180,691 Foreign exchange differences 245,879,249 117,462,404 TOTAL 14,930,943,331 9,691,643,095 OFF BALANCE SHEET ITEMS Closing balance Opening balance USD USD Designated Account 3,248.75 33,312.78 3,248.75 33,312.78 Do Minh Vui Danghi Tuyet Pham Duc Nghiem Preparer Chief Accountant Director 21 June 2019 The accompanying notes are an integral part of these financial statements 5 VIETNAM CLIMATE INNOVATION CENTER PROJECT Financial Statements Financing Agreement No. TF OA1407-VN For the year ended 31 December 2018 STATEMENT OF INCOME AND EXPENDITURES For the year ended 31 December 2018 Accumulated Notes Current year to 31/12/2018 VND VND * INCOME Funds received from the World Bank 8 21,809,245,274 51,067,470,406 Counterpart fund 2,059,900,936 8,021,692,618 TOTAL INCOME 23,869,146,210 59,089,163,024 EXPENDITURES Part 1 - Establishment and Operation of the VCIC 8,599,204,103 28,889,676,019 Part 2 - Climate Technology Business Incubation Services, Including Sub-grants to Companies Part 3 - E-portal, Database and Business Support 6,525,966,000 6,525,966,000 Services TOTAL EXPENDITURES 18,758,262,819 44,404,098,942 SURPLUS OF INCOME OVER EXPENDITURES 5,110,883,391 14,685,064,082 Do Minh Vui tang Thi Tuyet Pham Duc Nghiem Preparer Chief Accountant Director 21 June 2019 The accompanying notes are an integral part of these financial statements 6 , . 〕〕〕:化:!!!〕一 . . VIETNAM CLIMATE INNOVATION CENTER PROJECT Financial Statements Financing Agreement No. TF OA1407-VN For the year ended 31 December 2018 STATEMENT OF DESIGNATED ACCOUNT For the year ended 31 December 2018 Account Number 110-01-37-000325-7 Depository Bank Vietnam Maritime Commercial loint Stock Bank - Head Office Address VID Tower, 115 Tran Hung Dao street, Cua Nam ward, Hoan Kiem district, Ha Noi Financing Agreement No. TF OA1407-VN dated 05 November 2015 Currency unit USD PART A - ACCOUNT ACTIVITY Amount Opening balance 33,312.78 Add: Total amount replenished by the World Bank in the year 953,822.46 Deduct: Total amount withdrawn 983,886.49 Closing balance 3,248.75 PART B - ACCOUNT RECONCILIATION 1. Amount advanced by the World Bank 450,000.00 2. Add: Total amount advanced by the World Bank in the year - Present outstanding amount advanced to Designated Account as at 31 December 3. 450,000.00 2018 4. Closing balance of Designated Account as at 31 December 2018 3,248.75 Add: Amount claimed but not yet credited 5. 100,893.07 (Withdrawal application No. 0010) 6. Add: Amount withdrawn but not yet claimed 345,798.18 7. Add: Overseas bank remmitance charges 60.00 08. Total advance to Designated Account accounted for as at 31 December 2018 450,000.00 L4SOL Do Minh Vui Dang Thi Tuyet Pham Duc Nghiem Preparer Chief Accountant Director 21 June 2019 The accompanying notes are an integral part of these financial statements � � � 00 О " � � _ '� г �о � �и ■ L � i i 1 r\ 3 � � V � (в ►� � й � � м о о � ' _ � Q, м м � а� w � � � � � �- о � � � � о о ._ __ м v'�' v p1 и � LL апi г о � ++ М(V М 0� � lD l0 � � у. 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GENERAL INFORMATION Vietnam Climate Innovation Center Project (the "Project") is implemented under the Financing Agreement No. TF OA1407-VN dated 05 November 2015 (effective form 15 December 2015) between the World Bank and the Government of Socialist Republic of Vietnam. The Project follows the initiative of the World Bank's Climate Change Adaptation Technology Development Program and is supported by the British government and the Australian government, managed by the World Bank, and implemented by the Government of Vietnam through the Ministry of Science and Technology - National Agency for Technology Entrepreneuship and Commercializtion Development. The objective of the Project is to increase green growth business innovations by supporting entrepreneurs and SMEs involved in developing technological solutions through the establishment and operation of the Vietnam Climate Innovation Center ("VCIC"). The Project consists of three main following parts: Part 1: VCIC establishment and participation in policies dialogue, including activities: Do activities to establish the VCIC, support the improvement of related policies, promote public- private partnership in the field of climate technology innovation and establish business incubation and commercialization of technology fund Part 2: Enterprise incubation and technology commercialization services, including activities: Develop the idea of clean technology startup (incubate ideas and organize contests); Service of training, supporting, connection and promotion of investment, and support for commercialization through contests and awards (the "Sub-Project"). Part 3: E-portal, database and business support services, including activities: Build the portal; Set up technology database; Seek market opportunities, businesses and experts on climate change; Exploit and effectively use these databases. The Project funds include: USD equivalent - ODA fund that the World Bank committed to donor 3,800,000 - Vietnamese's Government's counterpart fund 380,000 Total 4,180,000 The Project officially came into operation since 05 October 2015 and is expected to complete on 31 December 2018. According to the Financing Agreement, the grant closing date is 31 December 2018. According to the World Bank's Letter dated 27 December 2018 and Decision No.2478/QD- CTN dated 26 December 2018 of the President, the grant closing date is extended to 30 June 2020. 10 VIETNAM CLIMATE INNOVATION CENTER PROJECT Financial Statements Financing Agreement No. TF 0A1407-VN For the year ended 31 December 2018 NOTES TO THE FINANCIAL STATEMENTS (Continued) 2. ACCOUNTING CONVENTION AND FINANCIAL YEAR Accounting convention The accompanying financial statements, prepared under the historical cost convention, are expressed in Vietnam Dong (VND), except for the statement of designated account and statement of withdrawals which are expressed in original currencies. These financial statements are prepared on the going concern basis, in accordance with the accounting policies set out in Note 3 of the notes to the financial statements and requirements of the World Bank. Financial year The Project's financial year begins on 01 January and ends on 31 December. These financial statement are prepared for the financial year ended 31 December 2018. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies, which have been adopted by the management in the preparation of these financial statements, are as follows: Recognition of funds and expenditures Funds: - Funds received from the World Bank are recorded when remittances are made into Designated Account. - Counterpart funds are recorded when payments are made directly from the Vietnamese's Government to contractors/suppliers of the Project or funds are remitted to the Project Management Unit to pay for the Project's activities. Expenditures: - Expendiures are recorded when incurred. Foreign currency translation Funds received from the World Bank in the foreign currency is translated into VND at the exchange rate announced by the Vietnam Maritime Conmmercial Joint Stock Bank at the date of remittance made into the Designated Account. Transactions in foreign currencies are translated to VND at the exchange rate of Vietnam Maritime Commercial Joint Stock Bank at the date of transaction. The balances of monetary items denominated in foreign currencies are revalued at the buying exchange rate of Vietnam Maritime Commercial Joint Stock Bank. All exchange differences arising from these transactions are recorded into foreign exchange rate difference account. 4. DESIGNATED ACCOUNT Designated account under Financing Agreement No. TF 0A1407-VN is deposit account in USD opened at the Vietnam Maritime Commercial Joint Stock Bank for implementation of the Project's activities. Payments out of the designated account are for expenditures in accordance with the relevant covenants of Financing Agreement No. TF 0A1407-VN and relevant regulations established by the World Bank. 11 VIETNAM CLIMATE INNOVATION CENTER PROJECT Financial Statements Financing Agreement No. TF OA1407-VN For the year ended 31 December 2018 NOTES TO THE FINANCIAL STATEMENTS (Continued) Interest of the Designated Account is considered as receipts of the State Budget and initially recorded as other funds in Statement of income and expenditures, Statement of sources and uses of funds and used to cover bank charges. At the end of the Project, outstanding interests will be returned to the Vietnamese Government. 5. CASH Closing balance Opening balance VND VND Cash on hand 26,804,643 221,504,718 Bank demand deposit 584,709,108 762,533,784 611,513,751 984,038,502 6. ADVANCE TO SUB-PROJECTS Closing balance Opening balance VND VND Pham Gia Trade and Technology Co., Ltd. 1,119,555,000 621,975,000 Truong Xuan Agricultural Cooperative 918,000,000 - Green Wind Company Limited 872,352,000 - Viet Linh Bamboo Processing Enterprise 779,275,000 779,275,000 RYNAN Joint Stock Company 737,425,000 - Ha Yen Joint Stock Company 714,735,000 - Institute of Technologies and Education Development 701,347,500 701,347,500 Phuong Nam Biotechnology Co., Ltd. 701,347,500 701,347,500 Vietnam Eco Solutions Co., Ltd. 701,342,550 701,342,550 Tam Viet Service and Trading Joint Stock Company 634,900,000 - TEN Innovation Design Vietnam Company Limited 567,253,000 - Tien Phong Management and Creative Company Limited 566,877,000 - Hachi Vietnam Technology Joint Stock Company 510,525,000 Tri Nam Technology Development Investment Joint Stock Company 510,525,000 - S3 Technology, Joint Stock Company 453,613,000 453,613,000 International Consulting Services and Administrative Management Company Limited 408,247,000 - MAWAPO Joint Stock Company 389,637,500 389,637,500 Vietnam Food Hau Giang, Joint Stock Company 357,525,000 357,525,000 Khanh Hoang Technology Science One Member Company Limited 316,000,000 - Elegance Co., Ltd. 311,710,000 311,710,000 Quang Tri Trading Co., Ltd. 300,577,500 300,577,500 Solar Serve Center Enterprise 300,576,020 300,576,020 Aquaculture Service and Technology One Member Co., Ltd. 282,991,000 - Sao Moi Technology Co., Ltd. 280,917,000 280,917,000 Dichung, Joint Stock Company 233,738,260 233,738,260 Tue Minh Commercial and Technology Co., Ltd. 222,614,000 222,614,000 Solar ESCO, Joint Stock Company 133,590,000 133,590,000 Lam An Investment Joint Stock Company 133,590,000 133,590,000 Green Street Enterprise 106,872,000 106,872,000 I-Nature Co., Ltd. 106,872,000 106,872,000 Micro Technology and Environment Joint Stock Company - 1,302,502,500 Ho Hoan Cau Co., Ltd. - 610,151,760 14,374,529,830 8,749,774,090 12 VIETNAM CLIMATE INNOVATION CENTER PROJECT Financial Statements Financing Agreement No. TF OA1407-VN For the year ended 31 December 2018 NOTES TO THE FINANCIAL STATEMENTS (Continued) 7. OTHER PAYABLES Closing balance Opening balance Salary payables to experts 55,100,250 105,850,800 Social insurance - 6,630,000 Health insurance - 1,170,000 Unemployment insurance - 696,960 Other payables (not relating to expenses) - 1,381,684 55,100,250 115,729,444 8. FUNDS RECEIVED FROM THE WORLD BANK Current year Accumulated to 31 December 2018 USD VND USD VND equivalent equivalent Advance - - 450,000.00 10,019,250,000 Replenishment to designated account 953,882.46 21,809,245,274 1,825,054.61 41,437,857,906 Refund of amount double claimed in - - (17,469.07) (389,637,500) the prior year (Refund application No. 0004) _________________________________ N 0953,882.46 21,809,245,274 2,257,585.54 51,067,470,406 U 9. COMPARATIVE FIGURES Comparative figures are the figures of the Project's audited financial statements for the year ended 31 December 2017. Do Minh Vui ganig Thi Tuyet Pham Duc Nghiem Preparer Chief Accountant Director 21 June 2019 13 ■ ■ ■ ■ ■ • ■ ■ ■ ■ . ■PART 11 .iNoEPENoENTAuoiToRs,AssuRANcEREPoRToNINTERNAL •CONTROL . •· . • . . • . • ■ • ■ ■ • ■ ■ 個 ■ ■ • Deloitte Vietnam Co., Ltd. D elo itte 1 51h Floor, Vinaconex Tower, 34 Lang Ha Street, Lang Ha Ward, Dong Da District, Hanoi, Vietnam Tel: +84 24 6288 3568 Fax: +84 24 6288 5678 www.deloitte.com/vn INDEPENDENT AUDITORS' ASSURANCE REPORT ON INTERNAL CONTROL To: The Project Management Unit of Vietnam Climate Innovation Center Project Report on internal control We have audited, in accordance with International Standards on Auditing, the financial statements of Vietnam Climate Innovation Center Project - Financing Agreement No. TF OA1407-VN (the "Project") for the year ended 31 December 2018 and issued the independent auditors' report thereon dated 21 June 2019 expressing an unmodified opinion on those financial statements. In connection with our audit of the Project's financial statements, we also examined the effectiveness of internal control over compliance with requirements that could have a direct and material financial effect on the financial statements as well as of internal control over financial reporting, and issue the Report of Independent Auditor on internal control. Responsibilities of the Project Management Unit As stated in the Statement of the Project Management Unit on page 2, the Project Management Unit is responsible for designing and maintaining effective internal control over compliance, with requirements that could have a direct and material financial effect on the financial statements as well as over financial reporting for the purpose of properly preparing and presenting the financial statements so as to minimise errors and frauds; and take responsibility for its assertions as to the effectiveness of such internal control. Our Independence and Quality Control We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants, which is founded on fundamental principles of integrity, objectivity, professional competence and due ca.-rp, confidentiality, and professional behavior. We apply International Standard on Quality Control 1 and accordingly maintain a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. Auditors' Responsibilities Our responsibility is to express an opinion on the effectiveness of internal control over compliance with requirements that could have a direct and material financial effect on the financial statements as well as internal control over financial reporting based on our examination based on the evidence we have obtained. We conducted our reasonable assurance engagement in accordance with International Standard on Assurance Engagements 3000, Assurance Engagements other than Audits and Reviews of Historical Financial Information ("ISAE 3000"), issued by the International Auditing and Assurance Standards Board. That standard requires that we plan and perform this engagement to obtain reasonable assurance about whether, in all material respects, the management has maintained effective internal control over compliance with the requirements that could have a direct and material financial effect on the financial statements as well as internal control over financial reporting. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited ("DTTL"), its global network of member firms, and their related entities. DTTL (also referred to as "Deloitte Global") and each of its member firms and their affiliated entities are legally separate and independent entities. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more. 14 U * Deloitte REPORT OF INDEPENDENT AUDITORS ON INTERNAL CONTROL (Continued) Our examination included obtaining an understanding of internal control over compliance with requirements that could have a direct and material financial effect on the financial statements as well as of internal control over financial reporting, testing, and evaluating the design and operating effectiveness of the internal control, and performing such other procedures as we considered necessary in the circumstances to obtain sufficient appropriate evidence on which to base our opinion. Because of inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not to be detected. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion, as well as our findings as presented in the Management Letter on page 21 to page 23. Opinion In our opinion, the Project Management Unit has maintained, in all material respects, effective internal control over compliance with requirements that could have a direct and material financial effect on the Project's financial statements as well as over financial reporting for the year ended 31 Dang Chi Dung Ngu n Anh Tuan Deputy General Director Audior Audit Practising Registration Certificate Audit Practising Registration Certificate No. 0030-2018-001-1 No. 1472-2018-001-1 DELOITTE VIETNAM COMPANY LIMITED 21 June 2019 Hanoi, S.R. Vietnam 15 II II II PATUI INEEDNUUIO' SUAC EOTO COPIAC II II U W * STATEMENT OF THE PROJECT MANAGEMENT UNIT ON COMPLIANCE The Project Management Unit is responsible for complying with Financing Agreement No. TF 0A1407-VN, laws and regulations applicable to the Project. The Project Management Unit confirms the following: * An effective internal control has been designed and maintained over compliance with Financing Agreement No. TF 0A1407-VN, laws and regulations applicable to the Project; * The Project has complied with Financing Agreement No. TF 0A1407-VN, laws and regulations that could have a direct and material financial effect on the Project's financial statements for the year ended 31 December 2018; * The Project's receipts and disbursements via the designated account for the year ended 31 December 2018 are in accordance with the relevant covenants of Financing Agreement No. TF 0A1407-VN and prevailing relevant regulations established by the World Bank; * The withdrawal applications were adequately reconciled to the statements of expenditures (SOEs) prepared by the Project Management Unit for the year ended 31 December 2018 and those SOEs were adequately supported; * The proceeds of the loan were used only for the purpose(s) of the Project. For and on behalf of the Project Management Unit, Pham Duc Nghiem Director Hanoi, 21 June 2019 16 Deloitte Vietnam Co., Ltd. D elo it0 11 5th Floor, Vinaconex Tower, 34 Lang Ha Street, Lang Ha Ward, Dong Da District, Hanoi, Vietnam Tel: +84 24 6288 3568 Fax: +84 24 6288 5678 www.deloitte.com/vn INDEPENDENT AUDITORS' ASSURANCE REPORT ON COMPLIANCE To: The Project Management Unit of Vietnam Climate Innovation Center Project Report on Compliance We have audited, in accordance with International Standards on Auditing, the financial statements of the Vietnam Climate Innovation Center Project - parts implemented by the Project Management Unit (the "Project") for the year ended 31 December 2018 and issued the Independent auditors' report thereon dated 21 June 2019 expressing an unmodified opinion on those financial statements. In connection with the audit of the financial statements, we also performed procedures on the Project's compliance with Financing Agreement No. TF 0A1407-VN, laws and regulations that could have a direct and material financial effect on the Project's financial statements for the year ended 31 December 2018 (the "requirements"). Responsibilities of the Project Management Unit The Project Management Unit is responsible for complying with Financing Agreement No. TF 0A1407-VN, laws and regulations applicable to the Project. Our Independence and Quality Control We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality, and professional behavior. We apply International Standard on Quality Control 1 and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. Auditors'Responsibilities Our responsibility is to express an opinion on Project's compliance based on the evidence we have obtained. We limited our tests of compliance to the requirements, and we did not test compliance with all laws and regulations applicable to the Project. We conducted our reasonable assurance engagement in accordance with International Standard on Assurance Engagements 3000, Assurance Engagements other than Audits and Reviews of Historical Financial Information ("ISAE 3000"), issued by the International Auditing and Assurance Standards Board. That standard requires that we plan and perform this engagement to obtain reasonable assurance about whether, in all material respects, the Project has complied with the requirements. An reasonable assurance engagement in accordance with ISAE 3000 to report on the Project's compliance with the requirements involves performing procedures to obtain evidence about whether the Project's activities are free of material noncompliance with the requirements, including obtaining an understanding of the internal control relevant to the Project's compliance with the requirements. The procedures selected depend on the auditor's judgment, including the assessment of risks that the Project does not comply with the requirements and whether such noncompliance could have a direct and material financial effect on the Project's financial statements. Our procedures included testing the compliance with the requirements that we consider necessary to provide reasonable assurance that the requirements are complied by the Project. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion, as well as our findings as presented in the Management Letter on page 21 to page 23. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited ("DTTL"), its global network of member firms, and their related entities. DTTL (also referred to as "Deloitte Global") and each of its member firms and their affiliated entities are legally separate and independent entities. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more. 17 Deloitte INDEPENDENT ASSURANCE REPORT ON COMPLIANCE (Continued) Opinion In our opinion: * The Project has complied, in all material respects, with Financing Agreement No. TF 0A1407-VN, laws and regulations that could have a direct and material financial effect on the Project's financial statements for the year ended 31 December 2018. * The Project's receipts and disbursements via the designated account for the year ended 31 December 2018 are in accordance with the relevant covenants of Financing Agreement No. TF 0A1407-VN and prevailing relevant regulations established by the World Bank. * The withdrawal applications were adequately reconciled to the statements of expenditures (SOEs) prepared by the Project Management Unit for the year ended 31 December 2018 and those SOEs were adequately supported. * The proceeds of the loan were used only for the purpose(s) of the Project. Dang Chi Dung Nguy Anh Tuan Deputy General Director Audi r Audit Practising Registration Certificate Audit Practising Registration Certificate No. 0030-2018-001-1 No. 1472-2018-001-1 DELOITTE VIETNAM COMPANY LIMITED 21 June 2019 Hanoi, S.R. Vietnam W W W W W 18