* 0 GrantThornton U U U * Combined financial statements and U Independent Auditors' Report Vietnam Inclusive Innovation Project U Credit Agreement No.5249-VN For the year ended 31 December 2016 U U U U a U U U U U U 30 AUN 2017 BY:----------- Grant Thornton (Vietnam) Limited A member of Grant Thorntn nternational Ltd (GTIL GTIL and the mem e 'rms are riot a worldwice Dartnership Services are deliverec independet by the member fns Vietnam Inclusive Innovation Project Credit Agreement No.5249-VN U P Contents a U U U U * Part I Combined financial statements1 Report of the Project Management Unit 2 Independent Auditors' Report 4 Balance sheet 6 Statement of Sources and Uses of funds 7 Statement of Designated accounts 8 Statement of loan withdrawals 10 Notes to the combined financial statements 11 Part II Auditors' Report on the Compliance 19 Part III Auditors' Report on the Internal Control 22 U U U U U U U U U U U U U U U U 図v.emam.nc.us.v。,nn。va,.0。Project 1 園crodlt Agmmont N。.放49-vN . . . . . . . . . . . Part 1 . 一-・・一”& . しomblned tmanclat statcments . . . . . . . ■ . . . - . . . . . . . Vietnam Inclusive Innovation Project 2 Credit Agreement No.6249-VN Report of the Project Management Unit The Project Management Unit CTMU") submits its report together with the audited combined financial statements of the Vietnam Inclusive Innovation Project - Credit Agreement No.5249-VN, C'theprojece,) for the year ended 31 December 2016. Auditors Ile combined financial statements for the year ended 31 December 2016 have been audited by Grant Thornton (Vietnam) Limited. Project Management Unit Ile members of the PMU responsible for overall direction arid management of the Project during the year and to the date of this report were: Name Position Date appointed Mr Nguyen Hoa Cuong Director 28 March 2013 Ms Bui Thu Thuy Deputy Director 28 March 2013 Nfr Nguyen Quang Vinh Senior Accountant 28 March 2013 Ms Trinh Thi Huong Member 28 Match 2013 Ms Nguyen Thi Le Quyen Member 28 March 2013 Subsequentevent On 28 March 2017, the Ministry of Planning and Investment issued Decision No.418/QD- BKHDT to cease operations of the Vietnam Inclusive Innovation Project. Accordingly the Project was closed on 30 April 2017. Statement of the Project Management Unit The Project Management Unit is responsible for preparing combined financial statements for the year ended 31 December 2016 which give a true and fair view of: 9 the financial position of the Project, # the funds received and expended for the year; 0 the activities of the designated accounts for the year and the balance of these accounts as at 31 December 2016; and 0 the funds withdrawn for the year. In preparing those combined financial statements, the Project Management Unit is required to- " select suitable accounting policies and then apply them consistently in accordance with the Credit Agreement No.5249-VN between Socialist Republic of Vietnam and International Development Association ("ID.\") and the Project's Financial Management Manual; 0 make judgements and estimates that are reasonable and prudent-, " state whether applicable accounting principles have been followed, subject to any material departures disclosed and explained in the combined financial statements; and " design and implement an effective internal control system for the purpose of property preparing and presenting the combined financial statements so as to minimise errors and frauds. U Vietnam inclusive innovation Project 3 Credit Agreement No.5249-VN U The Project Management Unit confirms that they have complied with the above requirements in preparing the combined financial statements. 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 to ensure that the accounting records comply with the accounting system as described in the Project Implementation Manual. They are 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. Approval of the combined financial statements We hereby approve the accompanying combined financial statements on pages 6 to 18 which give a true and fair view of the fund balance of the Project as at 31 December 2016, the movement and balance of the designated accounts for the Credit fund as at 31 December 2016 and the funds U received and disbursed for the year then ended, in accordance with the accounting policies as described in Note 2 to the combined financial statements and in the opinion of the PMU the loan withdrawals have been adequately reconciled to the statements of expenditure prepared by the borrower during the period, and such statements of expenditure were adequately supported. rt on behalf of the P ct Management Unit, *'en Hoa Cuong Director Hanoi, Vietnam 29 June 2017 U U U U U U U U U U U U U U U * GrantThornton Independent Auditors' Report on the combined financial statements of Vietnam Inclusive Innovation Project Credit Agreement No.5249-VN for the year ended 31 December 2016 Grant Thonkrn (V[etnam) Urmited I15h Floor, Hoa inhl ntematona10fficeaBoking 106 Hoong Quoo Viet Street Cau Giay Dstrit, Hani Vietnam Tt+4 (24) 3850 1686 F +84 (24) 3850 1688 wwwgraniomrton.cosn No. 14-11-197-03 To: The Project Management Unit We have audited the accompanying combined financial statements of Vietnam Inclusive Innovation Project ("the Project"), prepared on 29 June 2017, including the balance sheet as at 31 December 2016, and the statement of sources and uses of funds, the statement of'designated account and the statement of loan withdrawals for the year then ended and the notes thereto (collectively referred to as "the Financial Statements") as set out on pages from 6 to 18. In our opinion, in all material respects: - The accompanying combined financial statcments give a true and fai view of the financial position as at 31 December 2016 as well as of the funds received and expenditures of the Project for the year then ended in conformity with the accounting policies described in Note 2 of the Notes to the combined financial statements. - The accompanying statements of designated accounts give a true and fair view of the balance of the designated accounts as at 31 December 2016 and the Project's receipts and disbursements via these designated accounts for the year ended 31 December 2016 in conformity with the relevant covenants of Credit Agreement No.5249-VN, the Project Financial Management Manual and relevant regulations established by the Word Bank. S- Withdrawal Applications were adequately reconciled to the statements of expenditures ("SOEs") prepared by the Project Management Unit for the year ended 31 December 2016 and those SOEs were adequately supported by accounting vouchers. Basis of opinion We conducted our audit in accordance with International Standards on Auditing ('ISA"). Our responsibilities under those standards are farther described in the Auditor'r Responsibilitiesfor the Audit qft1he FinandalStalements section of our report. We are independent of the Project in accordance wilth the ethical requixements that are relevant to our audit of the Fmancial statements in Vietnam, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Grant Thornton (Vietnam) Limited A memb e of Grant Thonton International Ltd ('GTIL'. GTIL and the mem ber f irms are not a worldmde partnershp. Services are delivered independently by the member firms. .0 GrantThornton 5 U U N Project Management Unit's responsibility for the financial statements The Project Management Unit is responsible for the preparation and fair presentation of these financial statements mn accordance wvtth accounting , policies as described mn Note 2 and for such 3 internal controls that managemnti detiermines necessary to unlable the preparation of financial statemenits that are free from matenalM misstatement, whether due to fraud or error. U Auditors' responsibility for the audit of the financial statements UOur objectives are to obtain reasonable assurance about whether the financial s taitemn-t-tts as a whole are free f rom material msteen,w thrdue to fraud or error, anti to issue an auditor's 3report that inicludes, our opinion. Reasonable asst ,rance is a high level of assur-Anice, but is not a guarantee that an auldit COndUCted in accordance%withi 1 As wvill always detect a material Umisstatement when it exis ts. MNisstaltments Can airise from fraud or error and are considered material if, individually Or inl theC agg regate, they could reaisonably be expected to influence the U economic decisions of users taken on the basis of thesec financial statements. U As part of an audit in accordance with ISAs, wve exercise professional judgment and maintain professional scepticism dirou1ghouLt the audit, We also: Identify and assess thec risks, of materia misstatement of the financial statements, whether U clue to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit eVidence that is sufficient andl appropriate to provide a basis for our opinion. Thei risk of not detcting a material mniss:tatemrent resulting from, fraud is higher than for one resulting fromn error, as fraud may invol()ve collusion, forgery, intentional om-issions, 5 misrepresentations, or tespons override of internal control; 5 Obtain an understaitdinig of internal control relevant to the audit in order to design audit procedures that are appropriate in the eirepmstances; Evaluate rIe appropriatencess oFaccountng policies used and the reasonabness Of accoiting estimates ant rulated disclosures made bly the Project oanagement Unit. We communicat eth the project ianagement hit regar(dig, amoirg other matters, the planned scope and timing of the alit and significant audit findings, including any signiit deficiencies in wle \ arei\ frnrom ateify m ing our audit. * flH1'1INTON (VIETNAM) LIMITED hNguyen Hong Ha Pham Thu Trang Auditor s Pictising Certificate Auditor's Practising Certl Fcate *No. 1710-2014-068-1 No. 2072-2014-068-1 Deputy General Director Auditor Hanoi, Vietnam * 29 June 2017 U i 3 5 U 206GatTono Venm Lmtd l 8PI eesd U Vietnam inclusive Innovation Project 6 Credit Agreement No.5249-VN U * Balance sheet U U U Note 31 December 2016 31 December 2016 USD VND US VND ASSETS Cash Cash on hand 571.79 12,996,750 567.74 12,796,750 Cash at bank 9 311,718.72 7,085,386,438 4,632,212,68 104.410,073,689 312,290.51 7,098,383,188 4,632,780.42 104,422.870.639 Current assets 5 Other receivables 10 - 21.651,62 488,027.610 TOTAL ASSETS 312,290.61 7,098,363,188 4,654,43204, 104,910,898,249 RESOURCES Liabilities Tax payable to the State budget 838.98 18,070,000 1,124.91 25,355,610 Other payables 11 866.35 19,692,236 1,108.48 24985 048 1,705.33 38,762,236 2,233.39 50,340,658 Fund balance Fund balance brought forward from prior year 4,652,198.65 104,860,557,591 640,896.67 13,699,061,386 (Deficit) Surplus of resources over uses of funds (4,341,613.47) (97,800,956,639) 4,011,301.98 91,161,496.205 Fund balance carried forward 310,585.18 7,059,800,952 4,652,198.56 104,860,557.591 TOTAL RESOURCES 312,290.51 7,098,363,188 4,654,432.04 104,910,898.249 Soi, Vietnam >l, 2017 N en Hoa Cuong Doan Thi Thanh Ha nector Senior Accountant 5 U U 5 U A 8 The notes set out on pages from 11 to 18 an integral part of these combined fInancial statements. U 3 U Vietnam Inclusive Innovation Project 7 Credit Agreement No.5249-VN U * Statement of Sources and Uses U . of funds B U I 3Note Year ended Accumulated to 31 December 2016 31 December 2016 USD VND USD VND * SOURCES Credit fund 3 (4,000,000) (90,160,000,000) 1,614,118.30 34,823,068,085 5Counterpart fund 4 111,081.55 2,524,883,605 340,058.85 7,608,500,770 Others 5 323.21 7,346.610 1,055.58 23,500,284 5(3,888,595.24) (87,627,769,985) 1,955,230.73 42,453,06,1 39 USES OF FUNDS 6 3Consultant 247,134.28 5,418,778,484 679,044.87 14,821o541,594 Workshop and training 46,48949 1,037,103,000 430,345,00 9,420,272,300 £Equipment 1,258.25 28,600,000 81,620.98 1,351,722,600 Operating costs 162,037.58 3,662,704,770 485,089.46 10,470,672,729 3Bank charges and costs of bid evaluation 521.86 11,609,916 1,272.10 27,966,100 467,441.26/i 10,166,796,170 1,657,372.23 36,092,375,323 3Foreign exchange difference 4,423.03 (18,390,484) 12,726.68 698,907.136 (Deficit) Surplus of sources over uses of funds (4,341,p613.47) (97,800,956,639) 310,685-16 7,059,600,952 5 o1, Vietrn~ ye o un Doan Thi Thanh H-a 3Director Senior Accountant T U S 5 3 U Th te stou o pgs ro 1 o nitega Yearo thseob n ded ancallatedmento 31DcmeU063 eebr21 3S N S N UORE Vietnam inclusive innovation Project 8 Credit Agreement No.5249-VN U U * Statement of Designated account . Project Management Unit For the year period From 1 January 2016 to 31 December 2016 Account Number: 1003950622 Depository Bank: Saigon - Hanoi Commercial Joint Stock Bank - Thang Long Branch Address: No 91 Nguyen Chi Thanh Street, Dong Da District, Hanoi City, Vietnam Credit Agreement: No. 5249-VN Currency: USD U U IJSD Part A- Account activity Opening balance as at 1 January 2016 546,357.04/ Less: Amount withdrawn from Designated accounts (307,512.38 Closing balance as at 31 December 2016 238,844,66 U Part B- Account reconciliation £ Amount advanced by World Bank at 1 January 2016 1,100,000 Outstanding amount advanced to the Designated accounts at 31 December 2016 1,100,000 Account balance as at 31 December 2016 (Note 9) 238,844.66 Add: Amount withdrawn in 2016 but not yet claimed 307,612.38 Amount withdrawn in 2015 but not yet claimed 552,488.77 Amount withdrawn in 2014 but not yet claimed 1,154.19 / Outstanding amount advanced to the Designated accounts at 31 December 2016 1,100,000.00 V etnam Donan Thi Thanh Ha Director Senior Accountant U U U U The notes set out on pages from 11 to 18 an integral part of these combined financial statements. 5 U M Vietnam Inclusive Innovation Project 9 Credit Agreement No.5249-VN U Statement of Designated account . NAFOSTED For the year period From 1 January 2016 to 31 December 2016 Account Number: 1004328460 Depository Bank: Saigon - Hanoi Commercial Joint Stock Bank - Thang Long Branch Address: No 91 Nguyen Chi Thanh Street, Dong Da District, Hanoi City, Vietnam Credit Agreement: No. 5249-VN Currency: USD U Part A- Account activity Opening balance as at 1 January 2016 3,999,996.00 5 Add: Amount transferred from interest account 4.00 Less: Amount refunded to World Bank (4,000,000.001 3 Closing balance as at 31 December 2016 £ Part B- Account reconclilation Amount advanced by World Bank at 1 January 2016 4,000,000.00 5 Less: Refund to World Bank (4,000,000.00) lOutstandIng amount advanced to the Desited accounts at 31 December 2016 Account balance as at 31 December 201 (Note 9) 4,000,000.00 Less: Amount refunded to World Bank (4,000,000.00) Outstanding amount advanced to the Designated accounts at 31 December 2016 *oa Cuong Doan Thi Thanh Ha irector Senior Accountant The notes set out on pages from 11 to 18 an Integral part of these combined financial statements. ~s *: I II" £ ufl B I E I I2 a i > no' *E * ~ IA * E- aa 60 *£5'E~' 0 Vietnam inclusive Innovation Project 11 Credit Agreement No.5249-VN U x Notes to the combined financial U * statements U B U 1 The Project information The Vietnam Inclusive Innovation Project ("the Project") operates under Financing Agreement - Credit No. 5249-VN dated 6 September 2013 signed between the Socialist Republic of Vietnam and the International Development Association (IDA). B The objectives of the Project are to adopt, upgrade and develop inclusive innovations for the benefit of the Base of Pyramid population. 5 Enterprises Development Agency is in charge of the Project (tie Project owner), to be responsible for the overall planning, coordination, implementation and management of the Project. The Project Management Unit established by Enterprises Development Agency under the Decision No U 59/QD-PTD)N dated 28 March 2013, is to assist the Project owner in overaUl coordination and management of the Project implementation. The Project Management Unit (CTMU") is located at No. 6B, Hobang Dieu Street, Quan Th-anh 1 Ward, Ba Dinli District, H-anoi City, Vietnamn. U The Project consists of four components as follows: a Component 1: Developing Inclusive Innovation Technologies * Component 11: Upgrading and Commercialization of Innovation Technologies * * Component III: Capacity Building and Global Knowledge Transfer * Component IV-. Project Management and Monitoring & Evaluation (M&E) U Project Management Unit of the Department of Business Development is responsible for coordinating and managing the entire operation of the Project. National Foundation for Science and Technology Development (NAFOSTED) takes -accounted for implementation of the Part I and the grant from the Component II. Commercial banks nominated will credit for the remaining a loan of the Component IL. U Under the Financing Agreement No.5249-VN signed on 6 September 2Q13, total fund undertaken for the Project is USD55.625 million, of which IDA will finance USD55 maillion and the remaining 1NrND12 billion (equivalent to USD0-625 million) is to be financed by counterpart government u funding for Enterprises Development Agency. On 28 March 2017, the -Ministry of Planning -and Investments issued the Decision -No.418/QD- U BK.HDT to cease operations of the Vietnam Inclusive Innovation Project. Accordingly the Project was closed on 30 April 2017. f I U U U U I Vietnam Inclusive Innovation Project 12 Credit Agreement No.5249-VN U B *2 Principal accounting policies Basis of combination of combined financial statements The combined financial statements are prepared by combining the financial statements of the Project Management Unit and National Foundation for Science and Technology Development (NAFOSTED). In this combined financial statements, all receipts and disbursements are added £ together line by line. Transactions and balances between Project Management Unit and NAFOSTEDI (if -any) are eliminated on combination. Basis of accounting The combined financial statements are expressed in Vietnamese Dong (VN D"), except for the 5 statements of designated accounts and statement of withdra-wals which are expressed in United States Dollar ("USD'D. These combined financial statements are prepared in accordance with requirements of the World Bank and Decision 19/2006/QD-BTC dated 30 March 2006 issued by Uk the Ministry of Finance of Vietnam and International Public Sector Accounting Standards. U The statements are prepared in accordance with the World Bank's financial reporting requirements, the requirements of the above mentioned Credit Agreement and the following 5 accounting principles. U The combined financial statements are prepared under the historical cost convention and on cash basis of -accounting for financial reporting. Accordingly,teceipt is recognized when received rather U than when the right to receive the income arises and expenditures are recognised when paid rather than when the obligation to pay them arises. Except for bank interest which is recognized when 5 the obligation to pay them anises. 5 Foreign currency translation Foreign exchange differences are not cash flows. However, the effect of exchange rate changes on if cash and cash equivalents is reported separately in the statement of sources and uses of funds in order to reconcile Rind balances at the beginning and the end of the period. U Bank interest payable * In accordance with Circular No. 108/2007/TT-BTC dated 07 September 2007 issued by the Ministry of Finance, the Project can use bank interest earned from the Credit fund to pay for bank 5 charges. The remaining interest earned from the Credit fund accounts after deduction of bank charges is payable to the Government rather than treated as a source of income for the Project. Bank charges and interest used to finance bank charges are recorded as the Project's expenditure 1 and in-come respectively. 1 Accounting period * The Project's accounting period is from I January to 31 December. 3 Credit fund from IDA YaeddYa ne 31 December 2016 31 December 2015 UUSD VND UISD VND Advanced to Designated accounts (net) -- 4,000,000.00 90,160.000,000 URefunded to IDA (4,000,000) (90,160,000,000)/ Rep4enishment to DesIgnated accounts -- 614,118.30 13,787,068,085 U(4,000,000) (90,160,000000O) 4,648l,8. 103,947,068,085_ B' U U U U U U U Vietnam inclusive Innovation Project 13 Credit Agreement No.6249-VN U 4 Counterpart fund Year ended Year ended 31 December 2016 31 December 2015 VND VND OperatIng costs 2,524,803,506 2.661,962,100 5 Other fund Year ended Year ended 31 December 2016 31 December 2015 VND VND Bank interest () 7,346,510 11,200,919 (*) Bank interest from the Designated accounts is used to cover bank charges. / U 5 U 5 U 5 U U U £ U m.umW mm. M.m MMUmm...ma.. em.M Vietnam Inclusive Innovation Project 14 Credit Agreement No.5249-VN 6 Expenses by activities and by sources of fund for the year ended 31 December 2016 For the year ended 31 December 2016 Credit fund Counterpart Other Credit fund Counterpart Other from IDA fund fund Total from IDA fund fund Total VND VND VND VND USD USD USD USD Expenditures by categories Technical assistance, consultants 5,398,958,484 17,820,000 - 5,416,778,484 246,350.28 784.00 - 247,134.28 Workshops and trainings 1.037,103,000 - - 1,037,103,000 46,489.49 - - 48,489.49 Equipment - 28,600,000 - 28,600,000 - 1,258.25 - 1,258.25 Operating costs 1,184,681,265 2,478,023,505 - 3,662,704,770 53,017.63 109o019.95 - 162,037.58 Bank charges and costs of bid evaluation 11,000 440,000 11,158,916 11,609,916 0.50 19.34 501.82 521.66 7,620,753,749 2,524,883,505 11,158,916 10,156,796,170 345,857.90 111,081.54 501.82 457,441.26 Expenditures by activities Component ill: Capacity Building and Global Knowledge Transfer 2,234,474,000 36,240,000 - 2,270,714,000 100,008.15 1,594.37 - 101,602.52 Component IV: Project Management and Monitoring & Evaluation (M&E) 5,386,279,749 2,488,643,505 3,661,242 7,878,584,496 245,849.75 109,487.17 163.02 355,499.94 Others - 7,497,674 7,497,674 - - 338.80 338.80 7,620,753,749 2,524,883,505 11,158,916 10,156,796,170 345,857.90 / 111,081.54 501.82 457,441.26 *muummmwmmWWmmmmummummmummmuumum Vietnam Inclusive Innovation Project 15 Credit Agreement No.5249-VN 7 Expenses by activities and by sources of fund for the year ended 31 December 2016 - PMU For the year ended 31 December 2016 Credit fund Credit fund from IDA Counterpart fund Other fund Total from IDA Counterpart fund Other fund Totat VND VND VND VND USD USO USD USD Expenditures by categories Technical assistance, consultants 4,666,422,332 17,820,000 - 4,684,242,332 208,840.08 784.00 - 209,624.08 Workshops and trainings 1,037,103,000 - - 1,037,103,000 46,489.49 - - 46,489.49 Equipment ~ 28,600,000 - 28,600,000 - 1,258.25 - 1,258.25 Operating costs 1,184,681,265 2,346,049.505 - 3,630,730,770 53,017.63 103,213.79 - 156,231.42 Bank charges and costs of bid evaluation 11,000 440,000 3,661,242 4,112,242 0.50 19.34 163.02 182.86 6,888,217,597 2,392,909,505 3,661,242 9,284,788,344 308,347.70 105,275.38 163.02 413,786.10 Expenditures by activities Component Ill; Capacity Building and Globat Knowledge Transfer 2,218,815,000 - - 2,218,815,000 99,308.15 - - 99,308.15 Component IV: Project Management and Monitoring & Evaluation (M&E) 4,669,402,597 2,392,909,505 3,661,242 7,065,973,344 209,039.55 105,275.38 163.02 314,477.95 Others 6,888,217,597 2,392,909,505 3,661,242 9,284,788,344 308,347.70 105,275.38 163,02 413,780.10 ammmwmmmmmummmummmmmummemmWmmmm Vietnam Inclusive Innovation Project 16 Credit Agreement No.5249-VN 8 Expenses by activities and by scurces of fund for the year ended 31 December 2016 - NAFOSTED For the year ended 31 December 2016 Credit fund Credit fund from IDA Counterpart fund Other fund Total from IDA Counterpart fund Other fund Total VND VND VND VND USD USD USD USD Expenditures by categories Technical assistance, consultants 732,536,152 - 732,536,152 37,51020 - - 37,510.20 Workshops and trainings - Equipment - - - Operating costs - 131,974,000 131,974,000 5,806.16 - 5,806.16 Bank charges and costs of bid evaluation - - 7,497,674 7,497,674 - - 338.80 338.80 732,536,162 131,974,000 7.497,674 872,007,826 37,510.20 5,806.16 338.80 43,655.16 Expenditures by activities Component III: Capacity Building and Global Knowledge Transfer 15,659,000 36,240,000 - 51,899,000 700.00 1,594.37 - 2,294.37 Component IV: Project Management and Monitoring & Evaluation (M&E) 716,877,152 95,734,000 - 812,611,152 36,810.20 4,211.79 - 41,021.99 Others - 7,497,674 7,497,674 - - 338.80 33810 732,536,162 131,974,000 7,497,674 872,007,826 37,510.20 S,806.16 338.80 43,655.16 Vietnam Inclusive innovation Project 17 Credit Agreement No.5249-VN 9 Cash at bank 31 December 2016 31 December 2015 Original currency Original currency (USD) VND (USD) VND Designated accounts of the Credit fund - PMU 238,844.66 5,428,939,122 546,357.04 12,314,887,682 Designated accounts of the Credit fund - NAFOSTEO - 3,999,996.00 90,159,909,840 Bank account - NAFOSTED 71,850.29 1,633,167,069 84,493.70 1,904,488o071 Interest account in USD - PMU 381.36 8,668,313 54436 12,269,874 Interest account in USD - NAFOSTED 426.99 9,682,753 768.79 17,328,527 Interest account in VND - NAFOSTED 216.42 4,919,181 52.79 1,189,895 311,718.72_, 7,085,366,438 4,632,212.68 104,410,073,889 10 Other short-term receivables 31 December 2016 31 December2016 VND VND Personal income tax receIvables - 18,677,610 Receivables from NAFOSTED () - 469350,000 - 488,027,610 (*) Receivables from NAFOSTED represents expenses for Technical Council in 2015 that were approved and recorded as expenses for the year ended 31 December 2016. 11 Other payables 31 December2016 31 December 2015 VND VND Bank interest () 19,392,236 23,518,198 Others 300,000 1,466.850 19,692,236 24,985,048 (*) Bank interest is payable to the State Budget at end of the Project, details as below: Year ended Year ended 31 December 2016 31 December2015 USD VND USD VND Opening balance of bank interest account 1,36594 30,788,296 505,65 10,808,269 Bank interest earned 409.42 8,896,692 1,164.45 25,948,030 Deduction for bank charges (747.59) (16,238,842] (189.16) (4,156,221) Transferred from interest account to designated accounts - Remittance fee for one time advance (4.00) (87,480) (115.00) (2,479,400) Foreign exchange differences - (237.144) - 667.618 Closing balance of bank interest account 1,023.77 23,121,522 1,365.94 30,788,296 Bank charge paid by designated accounts - International bank chage - - (10.00) (225,400) - Bank charge paid by designated accounts (171.62) (3,729,286) (312.54) (7,044,698) (171.62) (3,729,286) (322.54) (7,270,098) Payable to the State Budget 852.15 19,392,236 1,043.40 23,518,195 U A U U U U Vietnam inclusive Innovation Project 18 Credit Agreement No.5249-VN U U *12 Amounts withdrawn and not yet claimed As at 31 December 2016, certain expenditures were paid from designated accounts but have not been claimed yet as below: Amount In USD 3 Amount withdrawn in 2016 but not yet claimed 307,512.38 Amount withdrawn in 2015 but not yet claimed 552,488.77 UAmount withdrawn In 2014 but not yet claimed 1,1$4.19 a Those expenditures will be claimned under applications in 2017. I13 Reconciliation of amount on the statement of IDA loan withdrawal to * expenditures 2016 3Loan USD Total amount per Statemnent of Loan withdrawals U Add: Amount withdrawn not yet claimed In the current year (Note 12) 861,155.34 - IAmount receivable from NAFOSTED recorded as expenses of current year 20,822.98 Les,Tax payables 838.98 Amount advanced from World Bank (459,006.82) Am ount withndrawn a nd adva nced to NAFOSTED (71,850.29) Exchange rate differences (6,102.29) Total expenditure of credit fund (Note 6) 345,867.90 U 14 Subsequent event * On 28 March 2017, the Ministry of Planning and Investment issued Decision No.41 8/QD- BKHDT to cease operations of the Vietnamn Inclusive Innovation Project. Accordingly the Project * was closed on 30 April 2017. 15 Approval for Issuance of the combined financial statements The combined financial statements were approved by the Board of Management and authorised 5 for issue. *H, Vietnam U, BA017 * 'Y ti yen Hoa Cuong?~ Doan Thi Thanh Ha 3Director Senior Accountant U U U U U U I U 1 Vietnam Inclusive Innovation Project 19 Credit Agreement No.5249-VN U U U U U U U U S U Part II * Auditors' Report on the * Compliance U U U I U U U U 8 U U U U I GrantThornton 20 Independent Auditors' Report on the Compliance the Vietnam Inclusive Innovation Project Credit Agreement No.5249-VN for the year ended 31 December 2016 U Grant Thornton (Vietnam) Limited 18th Floor, Hoa Binh Intemadonal Offce Building 106 Hoang oc Viet Street Cai Gly DIstrict, Hanoi Vietnam 5 T +84 (24) 3850 1686 F +84 (24) 3850 1688 www.grantitorfton.com.vn To: The Project Management Unit We have audited the accompanying combined financial statements of Vietnam Inclusive Innovation Project ("the Project'" under Credit Agreement No.5249-VN between the Socialist Republic of Vietnam and International Development Association ("IDA"), including the balance sheet as at 31 December 2016, the statement of sources and uses of funds, statement of designated accounts and statement of loan withdrawals for the year then ended and the notes thereto (collectively referred to as "Combined financial statements") and have issued our report thereon dated 29 June 2017. We conducted our audit in accordance with International Standards on Auditing. The Project Management Unit's responsibility The Project Management Unit is responsible for complying with Applicable Laws, Regulations and the Procurement Procedures and other Provisions of the Grant Agreement and other Guidance from World Bank. * Auditors' responsibility Our responsibility is to express an opinion on the Project's compliance with the requirements, 5 based on our procedures. We conducted our engagement in accordance \vith the International Standards on Assurance Engagement 3000, 'A ssurance Engagements other than Audits or 5 Reviews of Hi-istorical Financial Information", issued by the International Auditing and Assurance Standards Board. Those standards requires that we comply wvith ethical requirements and plan and 5 perform our procedures to obtain reasonable assurance about whether, in -all mraterial respects, the Project has complied wvith the requirements. U An assurance engagement to report on the comnpliancevwith regulatory and contractual 5 requirements at a project involves perforrming procedures to obtain evidence about whether the project's activities are free of material non-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 non-compliance could have a direct and 5 material effect on the Project's combined financial statements. Our procedures included testing the compliance with the requirements that we consider necessary to provide reasonable assurance that 5 the requirements are complied by the Project. U We believe that the evidence we have obtatied is su fficient and appropriate to provide a basis for our opinion. U U Grant Thornton (Vietnam) Limited A me mb er of G ra nt Tho rn ton [inte rnationaI Ltd ('GIL'). GTI L a nd th e me mbe r fi rm s are niot a worldwvide p artne rsh;:p. Services are de8ive red i ind ependentltybylthse mnbe rfirms * 0 GrantThornton 21 U U U * Auditors' opinion In our opinion, the Project was, in all maternal respects, in complince wvithi Applicable Laws, a Regulations and the Procurement procedures andi other Provisions of the Credit Xgreement No. 5249-VN and other Guidance from the World Banik that could h ave a direct and material financial 1 effect on the Projece's Combined financial statements for the year ended 31 December 2016. aThis re ort is intended for the information of the PMIU of the project and the World Bank. HoTON (VIETNAM) LIMITED * CONGT 61 >GRANT 110 r- * Auditor s racticing Certificate No, 1710-2014-0)68-1 Deputy Generail Director U 8 Phamn Thu Ttang * Auditor's Practicing Certificate No, 2072-2014-068-1 Auditor U H anoi, \Vietnam * 29 June 2017 U U U U U U U Auios5pno Unoroiin h rjc a,i l aea epcs ncmlac ihApial as 206Gt hron ta nten ed. ) rgt ifrmains ftheMrovhePojenddedod ak 8Vietnam inclusive Innovation Project 2 Credit Agreement No.5249-VN U U S U U 8 U U S * Part III s Auditors' Report on a the Internal Control U U U S U U 5 I U U S U U U U U U : GrantThornton U a Independent Auditors' Report 3 on the Internal Control over financial reporting the Vietnam Inclusive Innovation Project Credit Agreement No.5249-VN for the year ended 31 December 2016 U Grant Thornton (Vietnam) Limited 1th Floor, Hoa Binh Inlernational firce Builoing 106 Hoang Quoc Viet Street Cau Giay Districl, Hanoi Vietnam T +84 (24) 3850 1686 F +84 (24) 3850 1688 www.gran(fthornton.conivn To: The Project Management Unit * We have audited the accompanying combined financial statements of Vietnam Inclusive Innovation Project ("the Project") under Credit Agreement No.5249-VN between the Socialist Republic of Vietnam and International Development Association ("IDA"), including the balance sheet as at 31 December 2016, the statement of sources and uses of funds, statement of designated accounts and statement of loan withdrawals for the year then ended and the notes thereto (collectively referred to as "Combined financial statements") and have issued our report thereon dated 29 June 2017. We conducted our audit in accordance with International Standards on Auditing. The Project Management Unit's responsibility 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 combined financial statements as well as over financial reporting for the purpose of properly preparing and presenting the combined financial statements so as to minimise errors and frauds; and take responsibility for its assertions as to the effectiveness of such internal control. Auditors' responsibility Our responsibility is to express an opinion on the Project's combined financial statements and on the design and operation of controls over financial reporting, based on our procedures. We conducted our engagement in accordance with the International Standards on Assurance Engagement 3000, "Assurance Engagements other than Audits or Reviews of Hlistorical Financial Information", issued by the International Auditing and Assurance Standards Board. That standard requires that we comply with ethical requirements and plan and perform our procedures to obtain reasonable assurance about whether, in all material respects, the Project's combined financial S statements are fairly presented and the controls are suitably designed and operating effectively An assurance engagement to report on the description, design and operating effectiveness of controls at a project involves performing procedures to obtain evidence about the disclosures in the project's description of its system and design and operating effectiveness of controls. The procedures selected depend on the auditor's judgment, including the assessment of risks that the Project's Combined financial statements is not fairly presented, and that controls are not suitably designed or operating effectively. Our procedures included testing the operating effectiveness of those controls that we consider necessary to provide reasonable assurance that the control objectives were achieved. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Grant Thornton (Vietnam) Limited A member of Grant Thornton International Ltd (GTIL'). GTIL and the member firms are not a worldwide partnersh:p. Services are dehvered 2; independently by the member firms. * 0 GrantThornton 24 W U 5 Auditors' opinion 3InI our opinion, in all material respects, the Project's internal controls over financial reporting %Nere suitably designed throughout the year ended 31 December 2016 and the controls tested, which were those necessary to provide reasonable assurance that the control objectives were achieved, operated effectively throughout the year. U This report is intenided for the information of the PMU of the Project and the World Bank. 5 cr'T TON (VIETNAM) IMITED If a *Auiditor's racticing Certificate No. 1710-2014-068-1 Deputy General Director 8 *Pham Thu Trang Auditor's Practicing Certificate No. 2072-2014-068-1 Auditor F lanoi, Vietnam I 29 June 2017 U U U U U U U U U U we6 rn thosntcVeary Lted l pright resoner asrnevhttecotoebecie eecivd