21 Project "Vietnam Energy Efficiency for Industrial Enterprises" Audited Financial Statements Under IBRD Loan Agreement No. 8739-VN between the International Bank for Reconstruction and Development and the Government of the Socialist Republic of Vietnam and IDA Financing Agreement No. 6011-VN between International Development A Association and the Government of the Socialist Republic of Vietnam !M Period from 1 January 2022 to 30 November 2022 of7 Project "Vietnam Energy Efficiency for Industrial Enterprises" Under IBRD Loan Agreement No, 8739- VN between the International Bank for Reconstruction and Development and the Government of the Socialist Republic of Vietnam Under IDA Flnancing Agreement No. 6011- VN between the International Development Assocdation and the Government of the Socialst Republic of Vietnam Contents STATEMENT OF THE PROJECT MANAGEMENT BOARD.................................................................2 INDEPENDENT AUDITORS' REPORT.........................................--........---.. .................................4 CONSOLIDATED STATEMENT OF SOURCES AND USES OF FUNDS............................................... 10 CONSOLIDATED STATEMENT OF FUND BALANCE ................................................ ................ 11 STATEMENT OF SOURCES AND USES OF FUNDS AND FUND BALANCE - Component 1 - BIDV......12 STATEMENT OF SOURCES AND USES OF FUNDS AND FUND BALANCE - Component 2 - PMB....... 13 STATEMENT OF DESIGNATED ACCOUNT - COMPONENT 1 - BIDV ............................................. 14 STATEMENT OF DESIGNATED ACCOUNT - COMPONENT 2 - PMB ............................................. 15 SOE WITHDRAWAL SCHEDULE - ACCOUNT NO. 220402001.....................................................16 SOE WITHDRAWAL SCHEDULE - ACCOUNT NO. 188840070000012........................................... 17 NOTES TO THE FINANCIAL STATEMENTSAMS............................................................................ 18 r7 Project "Vietnam Energy Efficiency for Industrial Enterprises" Under IBRD Loan Agreement No. 8739- VN between the International Bank for Reconstruction and Development and the Government of the Socialst Republic of Vietnam Under IDA FInancing Agreement No. 6011-VN between the International Development Association and the Government of the Socialist Republic of Vietnam STATEMENT OF THE PROJECT MANAGEMENT BOARD The Project Management Board of Vietnam Energy Efficiency for Industrial Enterprises Project ("the Project Management Board") under the Ministry of Industry and Trade was responsible for the Financial Statements of the Project "Vietnam Energy Efficiency for Industrial Enterprises" ("the Project") for the period from 1 January 2022 to 30 November 2022. The Project The Project "Vietnam Energy Efficiency for Industrial Enterprises" was implemented by the Ministry of Industry and Trade (MOIT) - the Socialist Republic of Vietnam, and funded by the World Bank's credits through International Bank for Reconstruction and Development ("IBRD") under Loan Agreement No. 8739-VN dated 18th August 2017 and through International Development Association ("IDA") under Financing Agreement No. 6011-VN dated 18th August 2017, with amounts of USD100,000,000 and 1,300,000 Special Drawing Rights ("SDR"), respectively, and the counterpart funds from the Project Financial Institutions ("PFIs"), the Industrial Enterprises, and the Government of the Socialist Republic of Vietnam. The Project involved the participation of commercial banks including the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) and the Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB) under the Project Agreement dated 18tn August 2017 among International Bank for Reconstruction and Development ("IBRD"), BIDV and VCB. On 6 November 2020, Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB) has issued Document No. 31351/VCB-VTDQT to the Department of Energy Saving and Sustainable Development - Ministry of Industry and Trade and the Ministry of Finance to propose to cancel the undisbursed credits of the World Bank to VCB because VCB encountered difficulties and obstacles during the project implementation. The Ministry of Industry and Trade and the Ministry of Finance have completed the procedures to cancel VCB's unused credit limit with the World Bank in 2021. The Project became effective on 29 December 2017 and was completed by 31 July 2022. The Project had four (04) month grace period since the closing date of the Project until 30 November 2022. The eligible expenditures incurred by the closing date of the Project would be disbursed from the World Bank's sources by 30 November 2022. The development objective of the Project was to improve energy efficiency in industrial sector, thereby contributing to achieving the government's energy saving targets and greenhouse gas emissions reduction objectives. The Project consisted of two (2) components: - Component 1 - Energy Efficiency Investment Lending has been managed by two (2) banks, Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) and Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB). The Component's objective was to carry out an energy efficiency investment lending program through the provision of a credit line for the Project Financial Institutions (PFIs) providing Energy Efficiency Sub-loans to Industrial Enterprises (IEs) or Energy Services Companies; and - Component 2 - Project Implementation Support was implemented by the Project Management Board under the MOIT. This Component's objective was to provide technical assistance and capacity building support to the MOIT on Project monitoring and supervision, including audits of Project activities and safeguards implementation. 2 Project "Vietnam Energy Efficiency for Industrial Enterprises" Under IBRD Loan Agreement No. 8739- VN between the International Bank for Reconstruction and Development and the Government of the Socialist RepublIc of Vietnam Under IDA Financing Agreement No. 6011- VN between the International Development Association and the Government of the Socalst Republic of Vietnam STATEMENT OF THE PROJECT MANAGEMENT BOARD (CONTINUED) Project Management Board The members of the Project Management Board responsible for the management of the Project for the period from 1 January 2022 to 30 November 2022 and at the date of this report are as follows: Mr. Phuong Hoang Kim Director Mr. Trinh Quoc Vu Deputy Director Ms. Dang Thi Thuc Project Accountant Auditors The accompanying Financial Statements for the period from 1 January 2022 to 30 November 2022 have been audited by NEXIA STT Co., Ltd. Responsibility of the Project Management Board in respect of the Financial Statements The Project Management Board is responsible for the Financial Statements which give a true and fair view of the financial position and designated account balances of the Project as at 30 November 2022 and of its sources and uses of funds, operations of designated accounts and total funds withdrawn for the period from 1 January 2022 to 30 November 2022. In preparing the Financial Statements, the Project Management Board is required to select suitable accounting policies and then apply them consistently. A The Project Management Board is responsible for ensuring that proper accounting records are kept which enable the Financial Statements to be prepared in compliance with the accounting policies set out in Note A 2 to the Financial Statements. The Project Management Board is also responsible for safeguarding the assets of the Project and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Project Management Board assumes the responsibility to provide, and has provided, the auditors with all accounting records, supporting and other documents, minutes, any pertinent information and explanations, either orally or by written confirmation, necessary for the audit. Approval of the Financial Statements We hereby approve the accompanying Financial Statements of the Project "Vietnam Energy Efficiency for Industrial Enterprises" on pages 10 to 21 which give a true and fair view of the financial position and designated account balances as at 30 November 2022 and its sources and uses of funds, operations of designated accounts and total funds withdrawn for the period from 1 January 2022 to 30 November 2022 in accordance with the accounting policies as described in Note 2 to the Financial Statements and grant withdrawals have been adequately reconciled to the statements of expenditures prepared by the Project during the year, and such statements of expenditures were adequately supported. The Financial Statements were prepared in compliance with the Applicable Provisions of the Loan and Financing Agreements and other Guidance from the World Bank. On behalf of the Project Management Board Mr. Phuong Hoang Kim Director Hanoi, 6 December 2022 3 Hanoi Office 9 Fl. C LIn Tower 15X? Dn , Dong Da Han P:245 (24 31 3 90- :+4(4)39 509 Hai Phong Office 245 Bach Dane, Thuon e L, Hon Bag H-ihon P:+84 (225 539969/66/55 F F+4225) 9 Hoechirninhi City 0ffice I. N n ThiMnh KI Di i H i n C. 2ity E: ner stDei mvn W: 1ww nexav INDEPENDENT AUDITORS' REPORT On Project Financial Statements To: The Management Board of the Project "Vietnam Energy Efficiency for Industrial Enterprises" Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) Audit opinion We have audited the accompanying Consolidated Statement of Fund balance as at 30 November 2022, the Consolidated Statement of Sources and Uses of Funds, the Statements of Sources and Uses of Funds and Fund balance by Component, the Statements of Designated Accounts and the SOE Withdrawal Schedules for the period from 1 January 2022 to 30 November 2022 (collectively referred to as the "Financial Statements") of the Project "Vietnam Energy Efficiency for Industrial Enterprises" ("the Project") implemented by the International Bank for Reconstruction and Development's credits ("IBRD") and the World Bank's credits through International Development Association ("IDA"), and summary of significant accounting policies and other explanatory information. In our opinion, in all material respects: a) the Consolidated Statement of Fund balance and the Consolidated Statement of Sources and Uses of Funds give a true and fair view of the financial position as at 30 November 2022 and of its funds and expenditures for the period from 1 January 2022 to 30 November 2022 of the Project in conformity with the accounting policies described in Note 2; b) the Statements of Designated Accounts and the SOE Withdrawal Schedules give a true and fair view of designated account balances as at 30 November 2022 and of operations of designated accounts, and of the funds withdrawn for the period from 1 January 2022 to 30 November 2022, in conformity with the accounting policies described in Note 2; and c) the Statements of Expenditures and Summary Sheets are fully prepared and maintained with adequate supporting documents to support for the replenishment requests submitted to the World Bank. Funds disbursed through the statements of expenditures and summary sheets are utilized for purposes defined in IBRD Loan Agreement No. 8739-VN and IDA Financing Agreement No. 6011- VN. 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'Responsibihties 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 in accordance with International Ethics Standards, 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 opinion. 1 N } iI L 1, I lL s IM lS. teei oemar-NiAiNCltTiEiiNATIALNXA n.cN *iEX.Inlon ndbyNex alternatoiLirnte.Nin ter natinali . a ltenrb imi-i.ra no-oaaidw.ideatefip ilmb-tin rmno-Nex'intentleraiamicnepnenilwiieda cnd .rte..Nxitlntefreni n l snote tan yresponseclityth, e onh rni' ionoanyct.arai-ssionty ribt ie MHENA41 Ln.1ithnnv,-I Responsibilities of the Project Management for the Financial Statements The Project Management is responsible for the preparation and fair presentation of the Financial Statements in accordance with Note 2 and for such internal control as management determines is necessary to enable the preparation and presentation of Financial Statements that is free from material misstatement, whether due to fraud or error. Auditors' Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the Financial Statements of the Project as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with 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 the Financial Statements. A further description of the auditors' responsibilities for the audit of the Financial Statements is included in Appendix I of this auditors' report. This description, which is represented at page 22, forms part of our auditors' report. NEXIA STT Co., Ltd. Nguyen Viet Nga Deputy General Drector Audit Practicing Registration Certificate No. 2041-2018-225-1 Audit report No.: 261/2022/HN-AUD/WB VEEIE Hanoi, 6 December 2022 0 0cni OFice INDEPENDENT AUDITORS' REPORT On Compliance with the Applicable Laws, Regulations, Procurement Procedures and Other Provisions of the Loan and Financing Agreements To: The Management Board of the Project "Vietnam Energy Efficiency for Industrial Enterprises" Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) Audit opinion We have audited the Compliance with the Applicable Laws, Regulations, Procurement Procedures and Other Provisions of Loan Agreement No. 8739-VN and Financing Agreement No. 6011-VN of the Project "Vietnam Energy Efficiency for Industrial Enterprises" implemented by the International Bank for Reconstruction and Development's credits ("IBRD") and the World Bank's credits through International Development Association ("IDA") for the period from 1 January 2022 to 30 November 2022. In our opinion, the Project was, in all material respects, in compliance with the applicable laws, regulations, the procurement procedures and other provisions of Loan Agreement No. 8739-VN and Financing Agreement No. 6011-VN that could have a direct and material effect on the Project's Financial Statements for the period from 1 January 2022 to 30 November 2022. Basis for Opinion We conducted our engagement in accordance with International Standards on Assurance An Engagements 3000, "Assurance Engagements other than Audits or Reviews of Historical Financial Information", issued by the International Auditing and Assurance Standards Board. Our responsibility is to express an opinion on the Project's compliance with the requirements, based on our procedures. We are independent of the Project in accordance with the ethical requirements that are relevant to our audit of the compliance with the applicable laws, regulations and other provisions, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of the Project Management The Project Management Board is responsible for compliance with the Applicable Laws, Regulations, Procurement Procedures and Other Provisions of Loan Agreement No. 8739-VN and Financing Agreement No. 6011-VN that could have a direct and material effect on the Financial Statements for the period from 1 January 2022 to 30 November 2022. A ' AI I, I O0i'i..nlr,r'tn IL int 2 1 ' 11 1, cr1: & ' 1 Ttti't L'it,'a.'i i Icor.c.'r 1u'' I t20. iri il tl ,i .l 1r' .1 lit,ir'not t l ,rtI2 tt Auditors' Responsibilities Our responsibility is to express an opinion on the Project's compliance with the requirements, based on our procedures. We conducted our engagement in accordance with International Standards on Assurance Engagements 3000, "Assurance Engagements other than Audits or Reviews of Historical Financial Information", issued by the International Auditing and Assurance Standards Board. That standard requires that we comply with ethical requirements, plan and perform our procedures to obtain reasonable assurance about whether, in all material respects, the Project has complied with the requirements. An assurance engagement to report on the compliance with regulatory and contractual requirements at a Project involves performing procedures to obtain evidence about whether the Project's activities are free of material noncompliance 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 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 iequIrments are complied by the Project. ~NEXIA STT Co., Ltd. Nguyen Viet Nga Deputy General Director Audit Practicing Registration Certificate No. 2041-2018-225-1 Audit report No.: 261/2022/HN-AUD/WB VEEIE Hanoi, 6 December 2022 19 FI CE Lan Tow'er, 155 Xa Dran ig Ft. Hanrol P* 3i4 24)J 93C099 - F: +84 4 3~ 935D099 aIIc Phourg 0ffice 245 B c Dag ThuangLy, Hongv Bang.E- H ihon P' F 84 K {22 ) G96 5/5 SN-- F ) Hichimri C:ty ffirc 1 i Il,N .8 Ng yni i nh Khair Ditic 3 c Chii 'Minh C y E:rnexiasttGie xi vn W:'www nexir.vn INDEPENDENT AUDITORS' REPORT On the effectiveness of internal control over the 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 To: The Management Board of the Project "Vietnam Energy Efficiency for Industrial Enterprises" Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) Audit opinion We have audited, in accordance with International Standards on Auditing, the Financial Statements of the Project "Vietnam Energy Efficiency for Industrial Enterprises" ("the Project") implemented by the International Bank for Reconstruction and Development's credits ("IBRD") and the World Bank's credits through International Development Association ("IDA") for the period from 1 January 2022 to 30 November 2022 and issued the auditors' report thereon expressing an unqualified opinion on those Financial Statements. In connection with our audit of these Financial Statements, we also examined the effectiveness of internal control over the compliance with requirements that could have a direct and material financial effect on these Financial Statements as well as of internal control over financial reporting. In our opinion, the Project has maintained, in all material respects, effective internal control over compliance with requirements that could have a direct and material financial effect on these Financial Statements as well as of internal control over financial reporting for the period from 1 January 2022 to 30 November 2022. Basis for Opinion We conducted our engagement in accordance with International Standards on Assurance Engagements 3000. Our responsibility is to express an opinion on the effectiveness of internal control over the compliance with requirements that could have a direct and material effect on these Financial Statements as well as internal control over financial reporting based on our examination. We are independent of the Project in accordance with the ethical requirements that are relevant to the audit to evaluate the effectiveness of internal controls on the compliance of the requirements that may directly and materially affect the financial statements as well as of internal control in preparation of financial statements, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of the Project Management The Project management is responsible for designing and maintaining effective internal control over compliance with requirements that could have a direct and material 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 minimize errors and frauds; and take responsibility for its assertions as to the effectiveness of such internal control. I - M W 'cr ~ ~ AZxv Ve C. 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 effect on the Financial Statements as well as internal control over financial reporting based on our examination. Our examination was conducted in accordance with International Standard on Assurance Engagement 3000, accordingly, included obtaining an understanding of internal control over compliance with requirements that could have a direct and material 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 prevented or detected on a regular basis. 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. NEXIA,STT Co., Ltd. Nguyen Viet Nga Deputy General Director Audit Practicing Registration Certificate No. 2041-2018-225-1 Audit report No.: 261/2022/HN-AUD/WB VEEIE Hanoi, 6 December 2022 Project "Vietnam Energy Efficiency for Industrial Enterprises" Under IBRD Loan Agreement No. 8739- VN between the International Bank for Reconstruction and Development and the Government of the Socialist Republic of Vietnam Under IDA Financing Agreement No. 6011- VN between the International Development Association and the Government of the Socialist Republic of Vietnam CONSOLIDATED STATEMENT OF SOURCES AND USES OF FUNDS Period from 1 January 2022 to 30 November 2022 Period Accumulated Accumulated from 1/1/2022 from 1/1/2018 from 1/1/2018 Note to 30/11/2022 to 31/12/2021 to 30/11/2022 USD USD USD Sources Funds received from the 3 18,255,524.65 34,420,297.69 52,675,822.34 World Bank Refunds to the World Bank 4 (7,793.44) - (7,793.44) Other income - 7.70 7.70 18,247,731.21 34,420,305.39 52,668,036.60 Uses of funds 1. Energy Efficiency Sub- loans under 5 28,969,065.84 23,241,695.24 52,210,761.08 Component 1 of the Project 2. Goods, Works, non- consulting services, consultants' services, and Incremental 6 156,886.80 300,388.72 457,275.52 Operating costs under Component 2 of the Project 29,125,952.64 23,542,083.96 52,668,036.60 (Deficit)/Surplus of sources aganstuss o fuds(10,878,221.43) 10,878,221.43- against uses of funds Fund balance, beginning of the 10,878,221.43 period Fund balance, end of the period- 10,878,221.43- period Prepared by: Approved by: Dang Thi Thuc Phuong Hoang Kim Project Accountant DIrector Hanoi, 6 December 2022 The accompanying notes form an integral part of the Financial Statement 10 Project "Vietnam Energy Efficiency for Industrial Enterprises" Under IBRD Loan Agreement No. 8739- VN between the International Bank for Reconstruction and Development and the Government of the Socialist Republic of Vietnam Under IDA Financing Agreement No. 6011-VN between the International Development Association and the Government of the Socia/ist Republic of Vietnam CONSOLIDATED STATEMENT OF FUND BALANCE As at 30 November 2022 As at As at 30/11/2022 31/12/2021 USD USD FUND BALANCE, END OF THE PERIOD Represented by: Cash at bank - Designated account (USD) - 10,844,065.84 at BIDV Cash at bank - Designated account (USD) 34,155.59 at the Project Management Board (PMB) 3- 10,878,221.43 Prepared by: Approved by: Dang Thi Thuc Phuong Hoang Kim Project Accountant Director Hanoi, 6 December 2022 The accompanying notes form an Integral part of the Fnancial Statement Project "Vietnam Energy Efficiency for Industrial Enterprises" Under IBRD Loan Agreement No. 8739- VN between the International Bank for Reconstruction and Development and the Government of the Sociaist Republic of Vietnam Under IDA Financing Agreement No. 6011- VN between the International Development Association and the Government of the Socialist Republic of Vietnam STATEMENT OF SOURCES AND USES OF FUNDS AND FUND BALANCE Component 1 - BIDV Period from 1 January 2022 to 30 November 2022 Period Accumulated Accumulated from 1/1/2022 from 1/1/2018 from 1/1/2018 Note to 30/11/2022 to 31/12/2021 to 30/11/2022 USD USD USD Sources Funds received from the 3 18,125,000.00 31,500,000.00 49,625,000.00 World Bank 18,125,000.00 31,500,000.00 49,625,000.00 Uses of funds 1. Energy Efficiency Sub- loans under Component 1 of the Project Goods 28,969,065.84 20,655,934.16 49,625,000.00 5 28,969,065.84 20,655,934.16 49,625,000.00 (Deficit)/Surplus of sources (10,844,065.84) 10,844,065.84 against uses of funds Fund balance, beginning of the 10,844,065.84 period Fund balance, end of the 10,844,065.84 period Represented by, Cash at bank - Designated - 10,844,065.84 account (USD) Prepared by: Approved by Dang Thuy Linh Nguyen Thi Kim Ngan 9 Manager, International Entrusted Funds Director, International Entrusted Funds Hanoi, 6 December 2022 The accompanying notes form an integral part of the Financial Statement 12 Project "Vietnam Energy Efficiency for Industrial Enterprises" Under IBRD Loan Agreement No. 8739-VN between the International Bank for Reconstruction and Development and the Government of the Socialist Republic of Vietnam Under IDA Financing Agreement No. 6011-VN between the International Development Association and the Government of the Socialist Republic of Vietnam STATEMENT OF SOURCES AND USES OF FUNDS AND FUND BALANCE Component 2 - PMB Period from 1 January 2022 to 30 November 2022 Period Accumulated Accumulated Note from 1/1/2022 from 1/1/2018 from 1/1/2018 to 30/11/2022 to 31/12/2021 to 30/11/2022 USD USD USD Sources Funds received from the 3 130,524.65 334,536.61 465,061.26 World Bank Refunds to the World Bank 4 (7,793.44) - (7,793.44) Other income 7.70 7,70 122,731.21 334,544.31 457,275.52 Uses of funds 1. Goods, Works, non-consulting services, consultants' services, and Incremental Operating costs under Component 2 of the Project Goods Consultants' services 156,856.80 300,276.02 457,132.82 Training/workshops Bank charges incurred at 30.00 112.70 142.70 intermediate banks 6 156,886.80 300,388.72 457,275.52 (Deficit)/Surplus of sources (34,155.59) 34,155.59 - against uses of funds Fund balance, beginning of the 34,155.59 - period Fund balance, end of the period - 34,155.59 Represented by: Cash at bank - Designated 34,155.59 account (USD) 34,155.59 Prepared by: Approved by: Dang Thi Thuc { Phuong Hoang Kim Project Accountant Director Hanoi, 6 December 2022 The accompanying notes form an integral part of the Financial Statement 13 Project "Vietnam Energy Efficiency for Industrial Enterprises" Under IBRD Loan Agreement No. 8739- VN between the International Bank for Reconstruction and Development and the Government of the Socialist Republic of Vietnam Under IDA Financing Agreement No. 6011- VN between the International Development Association and the Government of the Socialist Republic of Vietnam STATEMENT OF DESIGNATED ACCOUNT COMPONENT 1 - BIDV Period from 1 January 2022 to 30 November 2022 Account No.: 220402001 Account holder: Joint Stock Commercial Bank for Investment and Development of Vietnam Bank: Joint Stock Commercial Bank for Investment and Development of Vietnam Address: BIDV Tower, 194 Tran Quang Khat, Hoan K/em distnit, Hanoi Loan Agreement No.: 8739- VN Part A - Account activities Note 30/11/2022 USD Opening balance 10,844,065.84 Add: Total amounts advanced to the Designated Account 3 18,125,000.00 Deduct: Total amounts withdrawn (28,969,065.84) Closing balance Part B - Account reconciliation Amounts advanced from the World Bank 31,500,000.00 Add: Amounts replenished by the World Bank 3 18,125,000.00 Deduct: Amounts recovered by the World Bank (49,625,000.00) Outstanding amounts advanced to the Designated Account as at 30 November 2022 Closing Balance of the Designated Account Add: Amounts withdrawn and not yet claimed Total advances to the Designated Account as at 30 November 2022 Prepared by: Approved by: Dang Thuy Linh Nguyen Thi Kim Ngan n Manager, International Entrusted Funds Director, International Entrusted Fund Hanoi, 6 December 2022 The accompanying notes form an integral part of the Financial Statement 14 Project "Vietnam Energy Efficiency for Industrial Enterprises" Under IBRD Loan Agreement No. 8739- VN between the International Bank for Reconstruction and Development and the Government of the Socialist Republic of Vietnam Under IDA Financing Agreement No. 6011- VN between the International Development Association and the Government of the Socialist Republic of Vietnam STATEMENT OF DESIGNATED ACCOUNT COMPONENT 2 - PMB Period from 1 January 2022 to 30 November 2022 Account No.: 188640070000012 Account holder: PMB of the Vietnam Energy Efficiency for IndustrIal Enterprises Project Bank: Ho Chi Minh City Development Joint Stock Commercial Bank (HD Bank) - Hoan Klein Branch Address: No. 32 Tran Hung Dao, Hoan Klem district, Hanoi Loan Agreement No.: 6011- VN Part A - Account activities Note 30/11/2022 USD Opening balance 34,155.59 Add: Total amounts advanced to the Designated Account 3 130,524.65 Deduct: Total amounts withdrawn (156,856.80) Total amounts refunded to the World Bank 4 (7,793.44) Bank charges incurred at intermediate banks (30.00) Closing balance - Part B - Account reconciliation Amounts advanced from the World Bank 334,536.61 Add: Amounts replenished by the World Bank 3 130,524.65 Deduct: Amounts recovered by the World Bank (457,132.82) Amounts refunded to the World Bank 4 (7,793.44) Bank charges incurred at intermediate banks (135.00) Outstanding amounts advanced to the Designated Account as at 30 November 2022 Closing Ba ance of the Designated Account Add: Amounts withdrawn and not yet claimed Total advances to the Designated Account as at 30 November 2022 Prepared by: Approved by: ~--Dang iThuc Phuong Hoang Kim Project Accountant . Director Hanoi, 6 December 2022 The accompanying notes form an integral part of the Financial Statement 15 Project "Vietnam Energy Efficiency for Industrial Enterprises" Under IBRD Loan Agreement No. 8739- VN between the International Bank for Reconstruction and Development and the Government of the Soca/ist Republic of Vietnam Under IDA Financing Agreement No. 6011- VN between the International Development Assocation and the Government of the Socialist Republic of Vietnam SOE WITHDRAWAL SCHEDULE - ACCOUNT NO. 220402001 Period from 1 January 2022 to 30 November 2022 Unit: U5D Withdrawal applications Amounts claimed Amounts received and documented Energy Efficiency No. Date Advances Sub-loans under Date Arnount Component 1 BIDV-05 10/01/2022 - 2,689,070.48 08/05/2022 - BIDV-06 12/05/2022 - 2,900,147.53 09/06/2022 - BIDV-07 25/05/2022 - 681,850.50 20/06/2022 - BIDV-08 14/06/2022 - 3,322,482.64 27/06/2022 - BIDV-09 06/07/2022 18,125,000.00 3,872,387.74 18/07/2022 18,125,000.00 BIDV-10 06/09/2022 - 18,192,197.43 03/10/2022 Total18,125,000.00 31,658,13632 18,125,000.00 documented amounts Withdrawal applications from No. 05 to No. 10 represented the total documented amounts for expenditures incurred during the period from 16 September 2021 to 31 July 2022. Prepared by: Approved by: Dang Thuy Linh Nguyen Thi Kim Ngan '- Manager, International Entrusted Funds Director, International Entrusted Funds Hanoi, 6 December 2022 The accompanying notes form an integral part of the Financial Statements 16 Project "Vietnam Energy Efficiency for Industrial Enterprises" Under IBRD Loan Agreement No. 8739- VN between the International Bank for Reconstruction and Development and the Government of the Socialist Republic of Vietnam Under IDA Financing Agreement No. 6011- VN between the International Development Association and the Government of the Sociahst Republic of Vietnam SOE WITHDRAWAL SCHEDULE - ACCOUNT NO. 188840070000012 Period from 1 January 2022 to 30 November 2022 Unit., USD Withdrawal applications Amounts claimed and Amounts received documented Goods, consultants' services, training No. Date Advances and workshops Date Amount and incremental costs under the Component 2 08 30/03/2022 67,238.79 45,423.80 19/04/2022 67,238.79 09 02/06/2022 - 14,895.21 20/06/2022 10 12/07/2022 63,285.86 58,731.91 25/07/2022 63,285.86 11 21/11/2022 - 79,504.86 01/12/2022 - Total130,524.65 198,555.78 130,524.65 documented amount Withdrawal applications from No. 08 to No. 11 represented the total documented amounts for expenditures incurred during the period from 1 July 2021 to 30 November 2022. Prepared by: Approved by: Dang Thi Thuc Phuong Hoang Kim Project Accountant Director Hanoi, 6 December 2022 The accompanying notes form an integral part of the Financial Statements 17 Project "Vietnam Energy Efficiency for Industrial Enterprises" Under LBRD Loan Agreement No. 8739- VN between the International Bank for Reconstruction and Development and the Government of the Socia/st Republic of Vietnam Under IDA Financing Agreement No. 6011- VN between the International Development Association and the Government of the Socia/st Repub/c of Vietnam NOTES TO THE FINANCIAL STATEMENTS Period from 1 January 2022 to 30 November 2022 1. Project background The Project "Vietnam Energy Efficiency for Industrial Enterprises" was implemented by the Ministry of Industry and Trade (MOIT) - the Socialist Republic of Vietnam, and funded by the World Bank's credits through International Bank for Reconstruction and Development ("IBRD") under Loan Agreement No. 8739-VN dated 18th August 2017 and through International Development Association ("IDA") under Financing Agreement No. 6011-VN dated 18th August 2017, with amounts of USD100,000,000 and 1,300,000 Special Drawing Rights ("SDR"), respectively, and the counterpart funds from the Project Financial Institutions ("PFIs"), the Industrial Enterprises, and the Government of the Socialist Republic of Vietnam. The Project involved the participation of commercial banks including the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) and the Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB) under the Project Agreement dated 18th August 2017 among International Bank for Reconstruction and Development ("IBRD"), BIDV and VCB. On 6 November 2020, Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB) has issued Document No. 31351/VCB-VTDQT to the Department of Energy Saving and Sustainable Development - Ministry of Industry and Trade and the Ministry of Finance to propose to cancel the undisbursed credits of the World Bank to VCB because VCB encountered difficulties and obstacles during the project implementation. The Ministry of Industry and Trade and the Ministry of Finance have completed the procedures to cancel VCB's unused credit limit with the World Bank in 2021. The Project became effective on 29 December 2017 and was completed by 31 July 2022. The Project had four (04) month grace period since the closing date of the Project until 30 November 2022. The eligible expenditures incurred by the closing date of the Project would be disbursed from the World Bank's sources by 30 November 2022. The development objective of the Project was to improve energy efficiency in industrial sector, thereby contributing to achieving the government's energy saving targets and greenhouse gas emissions reduction objectives. The Project consisted of two (2) components - Component 1 - Energy Efficiency Investment Lending has been managed by two (2) banks, Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) and Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB). The Component's objective was to carry out an energy efficiency investment lending program through the provision of a credit line for the Project Financial Institutions (PFIs) providing Energy Efficiency Sub-loans to Industrial Enterprises (IEs) or Energy Services Companies; and - Component 2 - Project Implementation Support was implemented by the Project Management Board under the MOIT. This Component's objective was to provide technical assistance and capacity building support to the MOIT on Project monitoring and supervision, including audits of Project activities and safeguards implementation. 18 Project "Vietnam Energy Efficiency for Industrial Enterprises" Under IBRD Loan Agreement No. 8739- VN between the International Bank for Reconstruction and Development and the Government of the Socialst Republic of Vietnam Under IDA Financing Agreement No. 6011-VN between the International Development Association and the Government of the Socia/lst Republic of Vietnam 2. Summary of significant accounting policies The significant accounting policies, which have been adopted by the Project Management Board in the preparation of the Financial Statements, are as follows: Basis of preparation of the Financial Statements The Financial Statements were prepared under the cash basis of accounting, This basis of accounting is considered appropriate to the operation of Project by the management. Funds Funds received from the World Bank were recorded when actual payments were made to the Project Financial Institutions ("PFIs") or remittances were made into the Designated Accounts or direct payments were made to contractors/suppliers. Expenses Expenditures of Component 1 were recorded when the Project Financial Institutions' ("PFIs") branches disbursed funds upon procedures to the Industrial Enterprises ("IEs") for the lending purpose of the Project. In details, the loan disbursements upon procedures included the following main documents: original payment orders made by PFIs' branches to IEs or its contractors, summary of withdrawals, credit agreements and its appendices between the PFIs' branches and IES, and copies of payment records related to the IEs' energy saving items. Expenditures of Component 2 were recorded when actually paid rather than the obligation to pay them arose. Reporting currency and foreign currency transactions and translation The Financial Statements, which were expressed in United States Dollar ("USD"), were prepared considering the requirements of the World Bank. The format of the Financial Statements was created by the Project to meet the requirements of the World Bank. Project Financial Institutions ("PFIs") and Industrial Enterprises ("IEs") (implement Component 1) maintain their accounting books in Vietnam Dong ("VND"). For the purpose of reporting to the World Bank, the Statements of Sources and Uses of Funds were translated to USD using exchange rates ruled by the PFIs at transaction dates for expenditures denominated in VND and subsequently adjusted by using the exchange rate ruled by the World Bank at withdrawal dates for withdrawal transactions before the balance sheet date. The Project Management Board Vietnam Energy Efficiency for Industrial Enterprises (implements Component 2) maintains its accounting books in USD. 19 Project "Vietnam Energy Efficiency for Industrial Enterprises" Under IBRD Loan Agreement No. 8739- VN between the International Bank for Reconstruction and Development and the Government of the Socialist Republic of Vietnam Under IDA Financing Agreement No. 6011- VN between the International Development Association and the Government of the Socist Republic of Vietnam Designated Accounts Designated Accounts included 1 deposit account in USD opened at Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) for the Component 1's activities, and 1 deposit account in USD at Ho Chi Minh City Development Joint Stock Commercial Bank (HD Bank) - Hoan Kiem Branch, which was held by the Project Management Board for settlements of the Component 2's activities. Payments made via Designated Accounts are for eligible expenditures of the Project in accordance with provisions of Loan Agreement No. 8739-VN dated 18th August 2017 and Financing Agreement No. 6011-VN dated 18th August 2017. 3. Funds received from the World Bank Period Accumulated Accumulated from 1/1/2022 from 1/1/2018 from 1/1/2018 to 30/11/2022 to 31/12/2021 to 30/11/2022 USD USD USD Loan Agreement No. 8739-VN 18,125,000.00 34,085,761.08 52,210,761.08 Advances 18,125,000.00 31,500,000,00 49,625,000.00 Reinbursements to PFIs - 2,585,761.08 2,585,761.08 Financing Agreement No. 130,524.65 334,536.61 465,061.26 6011-VN Advances 130,524.65 334,536.61 465,061.26 Reimbursements - - 18,255,524.65 34,420,297.69 52,675,822.34 Details of Funds received from the World Bank by designated account for the period from 1 January 2022 to 30 November 2022 were as follows: Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) - Component 1 (funds transferred to Account No. 220402001) Receipts under withdrawal applications No. Date USD BIDV-09 18/07/2022 18,125,000.00 (a) Project Management Board - Component 2 (funds transferred to Account No. 188840070000012) Receipts under withdrawal applications No. Date USD 08 19/04/2022 67,238.79 10 25/07/2022 63,285.86 Total funds advanced to Designated Account 130,524.65 (b) Total [(a) + (b)] 18,255,524.65 20 Project "Vietnam Energy Efficiency for Industrial Enterprises" Under IBRD Loan Agreement No. 8739-VN between the International Bank for Reconstruction and Development and the Government of the Socia/st Republic of Vietnam Under IDA Financing Agreement No. 6011-VN between the International Development Association and the Government of the Socialist Republic of Vietnam 4. Refunds to the World Bank This represented the total amounts refunded by the Project Management Board of the Project "Vietnam Energy Efficiency for Industrial Enterprises" to the World Bank on 25 November 2022. 5. Expenditures - Energy Efficiency Sub-loans under Component 1 of the Project Period Accumulated from 1/1/2022 to 30/11/2022 from 1/1/2018 to 30/11/2022 Equivalent Equivalent VND USD VND USD BIDV 670,677,998,181 28,969,065.84 1,146,231,506,463 49,625,000.00 VCB - 60,000,000,000 2,585,761.08 670,677,998,181 28,969,065.84 1,206,231,506,463 52,210,761.08 6. Expenditures - Goods, Works, non-consulting services, consultants' services, and Incremental Operating costs under Component 2 of the Project These represented expenditures for consultancy contracts, which were covered by the World Bank's funds under Financing Agreement No. 6011-VN dated 18th August 2017. Prepared by: Approved by: Dang Thi Thuc Phuong Hoang Kim Project Accountant Director Hanoi, 6 December 2022 121 Project "Vietnam Energy Efficiency for Industrial Enterprises" Under IBRD Loan Agreement No. 8739-VA between the International Bank for Reconstruction and Development and the Government of the Socia/lt Republic of Vietnam Under IDA Financing Agreement No. 6011-VN between the International DevelopmentAssocation and the Government of the Socia/St Republic of Vietnam Appendix I - Auditors' Responsibilities for the Audit of the Financial Statements Period from 1 January 2022 to 30 November 2022 0-4 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. * Evaluate the appropriateness of accounting policies used and related disclosures made by Project management. * Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with the Project Management Board 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. We also provide those charged with the Project Management Board with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with the Project Management Board, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. W2 22