Project “Vietnam Climate Innovation Center” Audited Financial Statements Under Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN between the World Bank and the Government of the Socialist Republic of Vietnam Period from 1 January 2020 to 30 November 2020 1 Project “Vietnam Climate Innovation Center” Under Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN between the World Bank and the Government of the Socialist Republic of Vietnam Contents STATEMENT OF THE PROJECT MANAGEMENT BOARD ......................................... 3 INDEPENDENT AUDITORS’ REPORT .................................................................... 6 BALANCE SHEET .............................................................................................. 12 STATEMENT OF FUNDS AND EXPENDITURES .................................................... 13 STATEMENT OF SOURCES AND USES OF FUNDS ............................................... 14 STATEMENT OF DESIGNATED ACCOUNT........................................................... 15 SOE WITHDRAWAL SCHEDULE – ACCOUNT NO. 110.01.37.000325.7 ................. 16 NOTES TO THE FINANCIAL STATEMENTS ......................................................... 18 2 Project “Vietnam Climate Innovation Center” Under Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN between the World Bank and the Government of the Socialist Republic of Vietnam STATEMENT OF THE PROJECT MANAGEMENT BOARD The Management Board of the Project “Vietnam Climate Innovation Center” (“the Project Management Board”) was responsible for the Financial Statements of the Project “Vietnam Climate Innovation Center” (“the Project”) for the period from 01 January 2020 to 30 November 2020. The Project The Project “Vietnam Climate Innovation Center” (“the Project”) was funded by the World Bank under Grant Agreement No. TF0A1407-VN dated 15th December 2015 with the total committed funds of USD3,800,000 and counterpart funds from the Government of the Socialist Republic of Vietnam of USD380,000. The Project was implemented by the Government of Vietnam through the Ministry of Science and Technology – National Agency for Technology Entrepreneurship and Commercialization Development under the initiative of the World Bank’s Climate Change Adaptation Technology Development Program with supports of the British and the Australian Governments through the World Bank. On 28 December 2018, the World Bank approved an additional grant of USD800,000 along with the addition of activities belonging to “Component 4 – Global business partnerships for technology transfer and diffusion” under Additional Grant Agree ment No. TF0A9280-VN. The total investment of the Project after amendments was USD5,121,875, in which funds from the World Bank was USD4,600,000 and the counterpart funds from the Government of Vietnam was USD521,875. The Project’s initial implementation d uration was from 5 October 2015 to 31 December 2018 and was extended to 30 June 2020 according to the World Bank Extension Letter dated 28 th December 2018. The Project was entitled to four (4) months of grace period and a one-month extension (until 30 November 2020) since the closing date of the Project. The objective of the Project was 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 consisted of four (4) main following components: - Component 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; - Component 2 – Enterprise incubation and technology commercialization services, including activities: Develop the idea of clean technology start-up (incubate ideas and organize contests); Service of training, supporting, connection and promotion of investment, and support for commercialization through contests and awards (the “Sub -Projects”); - Component 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; and - Component 4 – Global business partnerships for technology transfer and diffusion: Providing operational and analytical support to VCIC for building partnerships between foreign and local climate technology firms through: (i) development of local market insights and generating local market knowledge and expertise; (ii) organizing workshops on market opportunities and local business linkages for foreign firms, carrying out researches on firm-specific needs, and assessing the impact of potential matches between firms; (iii) facilitating business matches between firms on the basis of their goals, viability and impact; and (iv) promoting deals between matched firms by identifying matched businesses and their challenges and offering firm-level advisory, business development and/or innovation grant as appropriate. 3 Project “Vietnam Climate Innovation Center” Under Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN between the World Bank and the Government of the Socialist Republic of Vietnam STATEMENT OF THE PROJECT MANAGEMENT BOARD (CONTINUED) Project Management Board The members of the Project Management Board who held office during the year and at the date of this report were as follows: Mr. Pham Duc Nghiem Director of the Project Management Board Ms. Le Thi Tuyet Nga Chief Accountant of the Project Management Board Auditors The accompanying Financial Statements for the period from 01 January 2020 to 30 November 2020 have been audited by NEXIA STT Co., Ltd. Responsibility of the Project Management Board in respect of the Financial Statements The Project Management Board was responsible for the Financial Statements which gave a true and fair view of the financial position and balance of the Designated Account of the Project as at 30 November 2020 and of its funds and expenditures, sources and uses of funds, operations of the Designated Account and total funds withdrawn for the period from 1 November 2020 to 30 November 2020. In preparing the Financial Statements, the Project Management Board was required to select suitable accounting policies and then apply them consistently. The Project Management Board was responsible for ensuring that proper accounting records were kept which enabled the Financial Statements to be prepared in compliance with the basis of accounting set out in Note 2 to the Financial Statements. The Project Management Board was 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 assumed 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. 4 Project “Vietnam Climate Innovation Center” Under Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN between the World Bank and the Government of the Socialist Republic of Vietnam STATEMENT OF THE PROJECT MANAGEMENT BOARD (CONTINUED) Approval of the Financial Statements We hereby approve the accompanying Financial Statements of the Project “Vietnam Climate Innovation Center” on pages 12 to 29 which give a true and fair view of financial position and balance of the Designated Account as of 30 November 2020, and funds and expenditures, the sources and uses of funds, operations of the Designated Account and total funds withdrawn during the period from 01 January 2020 to 30 November 2020 in accordance with the accounting policies as described in Note 2 to the Financial Statements and grant withdrawals have been adequately reconciled to the Statement of Expenditures (“SOE”) Withdrawal Schedules prepared by the Project Management Board during the period, and such SOE Withdrawal Schedules were adequately supported. The Financial Statements were prepared in compliance with the applicable provisions of Grant Agreements and other guidance from the World Bank. On behalf of the Project Management Board Pham Duc Nghiem Director Hanoi, 30 December 2020 5 INDEPENDENT AUDITORS’ REPORT On the Project Financial Statements To: The Project Management Board of “Vietnam Climate Innovation Center” Audit opinion We have audited the accompanying Balance Sheet as at 30 November 2020, the Statement of Funds and Expenditures, the Statement of Sources and Uses of Funds, the Statement of Designated Account, and the SOE Withdrawal Schedules for the period from 01 January 2020 to 30 November 2020, summary of significant accounting policies and other explanatory information of the Project “Vietnam Climate Innovation Center” (“the Project”) implemented by the World Bank’s credits and counterpart funds. In our opinion, in all material respects: a) the Balance Sheet, the Statement of Funds and Expenditures, and the Statement of Sources and Uses of Funds give a true and fair view of the financial position of the Project as at 30 November 2020 and of its funds and expenditures, sources and uses of funds for the period from 01 January 2020 to 30 November 2020 in conformity with the accounting policies described in Note 2; b) the Statement of Designated Account and the SOE Withdrawal Schedules give a true and fair view of the designated account balance as at 30 November 2020 and of operations of the designated account, and of the funds withdrawn for the period from 1 January 2002 to 30 November 2020, 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 Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-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’ 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 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. 6 Responsibilities of Management for the Financial Statements 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 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 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 are included in Appendix I of this auditors’ report. This description, which is represented at page 30, forms part of our auditors’ report. ____________________________________ NEXIA STT Co., Ltd. Nguyen Viet Nga Deputy General Director Audit Practicing Registration Certificate No. 2041-2018-225-1 Audit report No.: 01/2020/HĐ-VCIC-NEXIA Hanoi, 30 December 2020 7 INDEPENDENT AUDITORS’ REPORT On Compliance with the Applicable Laws, Regulations, Procurement Procedures and Other Provisions of Grant Agreements To: The Project Management Board of “Vietnam Climate Innovation Center” Audit opinion We have audited the Compliance with the Applicable Laws, Regulations, Procurement Procedures and Other Provisions of Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280- VN of the Project “Vietnam Climate Innovation Center” (“the Project”) implemented by the World Bank’s credits and counterpart funds for the period from 01 January 2020 to 30 November 2020. In our opinion, the Project was, in all material respects, in compliance with the applicable laws, regulations, the procurement procedures and other provisions of Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN that could have a direct and material effect on the Project’s Financial Statements for the period from 01 January 2020 to 30 November 2020. Basis for Opinion 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. 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 in accordance with International Ethics Standards, 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 Management The Project Management Board is responsible for compliance with the Applicable Laws, Regulations, Procurement Procedures and Other Provisions of Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN that could have a direct and material effect on the Project’s Financial Statements for the period from 01 January 2020 to 30 November 2020. 8 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 o n 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 . _________________________________ NEXIA STT Co., Ltd. Nguyen Viet Nga Deputy General Director Audit Practicing Registration Certificate No. 2041-2018-225-1 Audit report No.: 01/2020/HĐ-VCIC-NEXIA Hanoi, 30 December 2020 9 INDEPENDENT AUDITORS’ REPORT 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 of internal control over financial reporting To: The Project Management Board of “Vietnam Climate Innovation Center” Audit Opinion We have audited, in accordance with the International Standards on Auditing, the Financial Statements of the Project “Vietnam Climate Innovation Center” (“the Project”) implemented by the World Bank’s credits and counterpart funds for the period from 01 January 2020 to 30 November 2020 and issued the auditors’ report thereon expressing an unqualified opinion on the Audited 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. 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 the Financial Statements as well as of internal control over financial reporting for the period from 01 January 2020 to 30 November 2020. Basis of 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 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. 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 internal control purposes in preparation of 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 evidence we have obtained is sufficient and appropriate to provide a basis for our unqualified opinion. Responsibilities of Management The 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. 10 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 unqualified 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.: 01/2020/HĐ-VCIC-NEXIA Hanoi, 30 December 2020 11 Project “Vietnam Climate Innovation Center” Under Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN between the World Bank and the Government of the Socialist Republic of Vietnam BALANCE SHEET As at 30 November 2020 As at As at Note 30/11/2020 31/12/2019 VND VND ASSETS Current assets 257,406,515 20,447,098,561 Cash 3 162,842,145 842,811,811 Advances to Sub-Projects 4 86,479,370 19,551,552,750 Other receivables 5 8,085,000 52,734,000 TOTAL ASSETS 257,406,515 20,447,098,561 RESOURCES Current liabilities - 515,354,307 Payables to consultants - 470,705,307 PIT payable to the State Budget - 44,649,000 Fund balance 257,406,515 19,931,744,254 (Deficit)/surplus of funds against expenditures (35,351,251) 19,277,352,596 Foreign exchange differences 292,757,766 654,391,658 TOTAL RESOURCES 257,406,515 20,447,098,561 Prepared by: Approved by: Le Thi Tuyet Nga Pham Duc Nghiem Chief Accountant Director Hanoi, 30 December 2020 The accompanying notes form an integral part of the Financial Statements 12 Project “Vietnam Climate Innovation Center” Under Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN between the World Bank and the Government of the Socialist Republic of Vietnam STATEMENT OF FUNDS AND EXPENDITURES Period from 01 January 2020 to 30 November 2020 Note Period from 1/1/2020 Year ended Accumulated to 30/11/2020 31/12/2019 30/11/2020 VND VND VND Funds Funds received from the World 6 28,754,755,240 71,089,866,249 99,844,621,489 Bank Counterpart funds 1,344,732,117 9,927,114,636 11,271,846,753 30,099,487,357 81,016,980,885 111,116,468,242 Expenditures Component 1 – Establishment 15,084,621,193 39,734,951,394 54,819,572,587 and operation of the VCIC Component 2 – Climate technology business 29,324,832,329 15,383,120,895 44,707,953,224 incubation services, including sub-grants to companies Component 3 – E-portal, database and business 1,131,171,000 6,621,556,000 7,752,727,000 support services Component 4 – Market connection and technology 3,871,566,682 - 3,871,566,682 transfer 7 49,412,191,204 61,739,628,289 111,151,819,493 (Deficit)/surplus of funds (19,312,703,847) 19,277,352,596 (35,351,251) against expenditures Prepared by: Approved by: Le Thi Tuyet Nga Pham Duc Nghiem Chief Accountant Director Hanoi, 30 December 2020 The accompanying notes form an integral part of the Financial Statements 13 Project “Vietnam Climate Innovation Center” Under Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN between the World Bank and the Government of the Socialist Republic of Vietnam STATEMENT OF SOURCES AND USES OF FUNDS Period from 01 January 2020 to 30 November 2020 Period from 1/1/2020 to 30/11/2020 Accumulated to 30/11/2020 Description Note Counterpart Counterpart World Bank fund Total World Bank fund Total VND VND VND VND VND VND SOURCES Funds received from the World Bank 6 28,754,755,240 - 28,754,755,240 99,844,621,489 - 99,844,621,489 Counterpart funds - 1,344,732,117 1,344,732,117 - 11,271,846,753 11,271,846,753 28,754,755,240 1,344,732,117 30,099,487,357 99,844,621,489 11,271,846,753 111,116,468,242 USES OF FUNDS Component 1 – Establishment and operation of 14,210,594,383 1,344,732,117 15,555,326,500 43,555,810,834 11,271,846,753 54,827,657,587 the VCIC Component 2 – Climate technology business incubation services, including sub-grants to 9,859,758,949 - 9,859,758,949 44,794,432,594 - 44,794,432,594 companies Component 3 – E-portal, database and 1,131,171,000 - 1,131,171,000 7,752,727,000 - 7,752,727,000 business support services Component 4 – Market connection and 3,871,566,682 - 3,871,566,682 3,871,566,682 - 3,871,566,682 technology transfer 29,073,091,014 1,344,732,117 30,417,823,131 99,974,537,110 11,271,846,753 111,246,383,863 DEFICIT OF SOURCES AGAINST USES OF (318,335,774) - (318,335,774) (129,915,621) - (129,915,621) FUNDS FUND BALANCE, BEGINNING OF THE PERIOD 842,811,811 - 842,811,811 - - - FOREIGN EXCHANGE DIFFERENCES, LOSSES (361,633,892) - (361,633,892) 292,757,766 - 292,757,766 FUND BALANCE, END OF THE PERIOD 3 162,842,145 - 162,842,145 162,842,145 - 162,842,145 Prepared by: Approved by: Le Thi Tuyet Nga Pham Duc Nghiem Chief Accountant Director Hanoi, 30 December 2020 The accompanying notes form an integral part of the Financial Statements 14 Project “Vietnam Climate Innovation Center” Under Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN between the World Bank and the Government of the Socialist Republic of Vietnam STATEMENT OF DESIGNATED ACCOUNT Period from 01 January 2020 to 30 November 2020 Account No.: 110.01.37.000325.7 Account holder: Project Management Board of “Vietnam Climate Innovation Center” Bank: Vietnam Maritime Commercial Joint Stock Bank – Head of Transaction Address: VID Building, 115 Tran Hung Dao, Cua Nam ward, Hoan Kiem district, Hanoi Grant Agreement No.: TF0A1407-VN and TF0A9280-VN Part A – Account activities Note USD Balance as at 01 January 2020 17,562.82 Add: Total amount advanced to the Designated Account 6 258,000.00 Total amounts replenished to the Designated Account 6 630,664.05 Deduct: Total amounts withdrawn (904,269.32) Bank charges incurred at intermediate bank (150.00) Balance as at 30 November 2020 3 1,807.55 Part B – Account reconciliation Amount advanced from the World Bank 450,000.00 Add: Amount advanced by the World Bank 258,000.00 Deduct: Amount recovered by the World Bank (108,560.19) Outstanding amount advanced to the Designated Account as at 30 November 2020 599,439.81 Balance of the Designated Account as at 30 November 2020 3 1,807.55 Add: Amounts claimed and documented and not yet recovered 8 596,955.92 Amounts withdrawn and not yet claimed 9 406.34 Bank charges incurred at intermediate bank 270.00 Total advances to the Designated Account as at 30 November 2020 599,439,81 Prepared by: Approved by: Le Thi Tuyet Nga Pham Duc Nghiem Chief Accountant Director Hanoi, 30 December 2020 The accompanying notes form an integral part of the Financial Statements 15 Project “Vietnam Climate Innovation Center” Under Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN between the World Bank and the Government of the Socialist Republic of Vietnam SOE WITHDRAWAL SCHEDULE – ACCOUNT NO. 110.01.37.000325.7 Period from 01 January 2020 to 30 November 2020 Unit: USD Withdrawal applications Amount claimed and documented Amount received Grant Variance Note No. Date Advance Reimbursement Documentation Total Date Amount Agreement (USD) TF A9280 APP1 25/12/2019 50,000.00 - - 50,000.00 14/01/2020 50,000.00 - TF A1407 APP13 05/03/2020 - 296,453.37 - 296,453.37 16/03/2020 296,453.37 - TF A1407 APP15 12/07/2020 - 118,110.94 - 118,110.94 15/07/2020 118,110.94 - TF A9280 WA2 12/07/2020 - 49,999.53 - 49,999.53 20/07/2020 49,999.53 - TF A9280 WA3 16/08/2020 - 49,952.17 - 49,952.17 27/08/2020 49,952.17 - TF A1407 APP16 25/08/2020 - 66,156.90 - 66,156.90 27/08/2020 66,156.90 - TF A1407 APP17 30/08/2020 - - 78,160.74 78,160.74 31/08/2020 - 78.160,74 TF A1407 APP18 30/08/2020 - - 30,399.45 30,399.45 31/08/2020 - 30.399,45 TF A9280 WA4 30/08/2020 - 49,991.14 - 49,991.14 01/09/2020 49,991.14 - TF A9280 WA5 30/08/2020 78,000.00 - - 78,000.00 01/09/2020 78,000.00 - TF A9280 WA6 31/08/2020 30,000.00 - - 30,000.00 01/09/2020 30,000.00 - TF A9280 WA15 29/10/2020 100,000.00 - - 100,000.00 30/10/2020 100,000.00 - TF A9280 WA22 30/11/2020 - - 255,957.63 255,957.63 03/12/2020 - 255.957,63 TF A1407 APP28 30/11/2020 - - 340,998.29 340,998.29 10/12/2020 - 340.998,29 Total advance/replenish/documented 258.000,00 630,664.05 705,516.11 1,594,180.16 888,664.05 705,516.11 (*) amount (*): Withdrawal applications No. APP17, APP28, WA22, and APP28 represented total documented amount of USD707.516,11 for disbursements recognised for the period from 2 December 2019 to 30 November 2020. The accompanying notes form an integral part of the Financial Statements 16 Project “Vietnam Climate Innovation Center” Under Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN between the World Bank and the Government of the Socialist Republic of Vietnam SOE WITHDRAWAL SCHEDULE – ACCOUNT NO. 110.01.37.000325.7 (CONTINUED) Period from 01 January 2020 to 30 November 2020 Withdrawal applications Categories Grant Original Equivalent to No. Date Component 1 Component 2 Component 3 Component 4 Total Agreement currency USD TF A1407 APP22 29/10/2020 USD 8,820.00 - - - 8.820.00 8,820.00 TF A9280 WA9 29/10/2020 USD - - - 68,704.00 68.704.00 68,704.00 TF A1407 APP20 27/10/2020 VND 3,431,760,893 - - - 3.431.760.893 148,048.36 TF A1407 APP21 29/10/2020 USD 24,265.00 - - - 24,265.00 24,265.00 TF A9280 WA10 29/10/2020 VND - - - 1,361,301,747 1,361,301,747 58,740.10 TF A9280 WA11 29/10/2020 VND 141,085,800 - - - 141,085,800 6,087.84 TF A9280 WA14 29/10/2020 VND 124,200,000 - - - 124,200,000 5,359.23 TF A9280 WA16 29/10/2020 VND - - - 144,000,000 144,000,000 6,213.59 TF A9280 WA8 29/10/2020 VND 191,684,900 - - - 191,684,900 8,271.01 TF A9280 WA17 27/11/2020 VND - - - 135,000,000 135,000,000 5,835.31 TF A9280 WA18 27/11/2020 VND - - - 117,000,000 117,000,000 5,057.27 TF A9280 WA19 27/11/2020 VND - - - 144,000,000 144,000,000 6,224.34 Total direct payments 351,626.05 These withdrawal applications are for direct payments from the World Bank to the Project’s contractors/consultants. Prepared by: Approved by: Le Thi Tuyet Nga Pham Duc Nghiem Chief Accountant Director Hanoi, 30 December 2020 The accompanying notes form an integral part of the Financial Statements 17 Project “Vietnam Climate Innovation Center” Under Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN between the World Bank and the Government of the Socialist Republic of Vietnam NOTES TO THE FINANCIAL STATEMENTS Period from 01 January 2020 to 30 November 2020 1. Project background The Project “Vietnam Climate Innovation Center” (“the Project”) was funded by the World Bank under Grant Agreement No. TF0A1407-VN dated 15th December 2015 with the total committed funds of USD3,800,000 and counterpart funds from the Government of the Socialist Republic of Vietnam of USD380,000. The Project was implemented by the Government of Vietnam through the Ministry of Science and Technology – National Agency for Technology Entrepreneurship and Commercialization Development under the initiative of the World Bank’s Climate Change Adaptation Technology Development Program with supports of the British and the Australian Government through the World Bank. On 28 December 2018, the World Bank approved an additional grant of USD800,000 along with the addition of activities belonging to “Component 4 – Global business partnerships for technology transfer and diffusion” under Additional Grant Agreem ent No. TF0A9280-VN. The total investment of the Project after amendment was VND5,121,875, in which funds from the World Bank was USD4,600,000 and the counterpart funds from the Government of Vietnam was USD521,875. The Project’s initial implementation duration was from 5 October 2015 to 31 December 2018 and was extended to 30 June 2020 according to the World Bank Extension Letter dated 28 th December 2018. The Project was entitled to four (4) months of grace period and a one-month extension (until 30 November 2020) since the closing date of the Project. The objective of the Project was 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 consisted of four (4) main following components: - Component 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; - Component 2 – Enterprise incubation and technology commercialization services, including activities: Develop the idea of clean technology start-up (incubate ideas and organize contests); Service of training, supporting, connection and promotion of investment, and support for commercialization through contests and awards (the “Sub-Projects”); - Component 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; and - Component 4 – Global Business Partnerships for Technology Transfer and Diffusion: Providing operational and analytical support to VCIC for building partnerships between foreign and local climate technology firms through: (i) development of local market insights and generating local market knowledge and expertise; (ii) organizing workshops on market opportunities and local business linkages for foreign firms, carrying out researches on firm-specific needs, and assessing the impact of potential matches between firms; (iii) facilitating business matches between firms on the basis of their goals, viability and impact; and (iv) promoting deals between matched firms by identifying matched businesses and their challenges and offering firm-level advisory, business development and/or innovation grant as appropriate. 18 Project “Vietnam Climate Innovation Center” Under Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN between the World Bank and the Government of the Socialist 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: Reporting currency The Balance Sheet, the Statement of Funds and Expenditures, and the Statement of Sources and Uses of Funds are expressed in Vietnam Dong (“VND”). The Statement of the Designated Account and SOE Withdrawal Schedules are expressed in United States Dollar (“USD”). Basis of accounting The Financial Statements are prepared and presented by the Project, complying with Circular No. 107/2017/TT-BTC dated 10 October 2017 (“Circular 107”) issued by the Ministry of Finance. The financial statements are prepared on modified accruals basis. This basis of accounting is considered appropriate to the operation of Project by the management. Funds The World Bank’s funds are recorded when credited to the Designated Account of the Project. The counterpart funds of the Vietnamese Government are recorded when payments are made directly from the Vietnamese Government to contractors/suppliers of the Project or when received. Expenditures Expenditures are recorded when the obligation to pay them arises rather than when actually paid. Foreign exchange differences Funds received from the World Bank in United States Dollar (“USD”) are converted into Vie tnam Dong (“VND”) using exchange rates announced by the Vietnam Maritime Commercial Joint Stock Bank at the date of remittance into the Designated Account or date of direct payments to contractors. Transactions incurred in the year via the Designated Account are converted into VND at actual exchange rates of the Project’s Bank at transaction payment dates for expenditures denominated in VND. Transactions incurred in the year in USD are translated into VND using exchange rates announced by the Vietnam Maritime Commercial Joint Stock Bank at transaction dates and subsequently adjusted by using exchange rates announced by the Vietnam Maritime Commercial Joint Stock Bank at payment dates for transactions paid before the balance sheet date. Foreign exchange differences are taken up in the Statement of Sources and Uses of Funds. 19 Project “Vietnam Climate Innovation Center” Under Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN between the World Bank and the Government of the Socialist Republic of Vietnam Designated Account The Designated Account is a deposit account in USD opened at Vietnam Maritime Commercial Joint Stock Bank for settlements of the Project’s activities. Payments made via the Designated Account are for eligible expenditures of the Project in accordance with provisions of Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN. Fixed assets All purchases of fixed assets are recorded as expenditures in the Statement of Funds and Expenditures and the Statement of Sources and Uses of Funds during the period. Therefore, fixed assets are not presented in the Balance Sheet at the end of the year. Memorandum listings are kept for control and management purposes. 3. Cash As at As at 30/11/2020 31/12/2019 VND VND Cash on hand - 26,632,708 Cash at bank – the Designated Account (*) 41,931,545 719,189,570 Cash at bank – the Current Account 120,910,600 96,989,533 162,842,145 842,811,811 (*) This represented the designated account balance of the Project Management Board at Vietnam Maritime Commercial Joint Stock Bank – Head of Transaction, which was converted into Vietnam Dong (“VND”) as at 30 November 2020. The original currency balance of this account as at 30 November 2020 was USD1,807.55 (31/12/2019: USD17,562.82). 20 Project “Vietnam Climate Innovation Center” Under Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN between the World Bank and the Government of the Socialist Republic of Vietnam 4. Advances to sub-projects As at As at 30/11/2020 31/12/2019 VND VND RYNAN Technologies Vietnam Joint Stock Company - 1,327,365,000 Pham Gia Technology Co., Ltd. - 1,119,555,000 TEN Innovation Design Vietnam Co., Ltd. 44,601,003 1,021,055,400 The First Innovation and Management Organization Co., Ltd. - 1,020,379,000 (*) Tri Nam Technology Development Investment Joint Stock - 918,945,000 Company Truong Xuan Agricultural Cooperative - 918,000,000 NTT Green Wind Energy Co., Ltd. - 872,352,000 S3 Technology Corporation - 816,503,000 Ha Yen Joint Stock Company - 714,735,000 (*) TA Water Treatment Technology Co., Ltd. - 707,850,000 (*) VES Clean Tech Co., Ltd. 6,389,150 701,342,550 Tam Viet Service and Trading Joint Stock Company - 634,900,000 Maru Science and Technology Research and Development Joint - 598,950,000 Stock Company Quy Phuong Hotel Services Co., Ltd. - 566,280,000 Dai Viet Developing New Technologies Joint Stock Company - 525,000,000 (*) Hachi Vietnam High Technology Joint Stock Company - 510,525,000 Aquaculture One-member Co., Ltd. - 509,384,000 Hung Dung QT One-member Co., Ltd. - 479,750,000 Vietnam Food Hau Giang Co., Ltd. - 459,675,000 Quang Ninh Technology Science Development and Investment Joint - 446,758,000 Stock Company Midle Region Technology Science Development and Investment - 445,000,000 Joint Stock Company Agricultural Technology Quality Limited Company - 411,650,000 (*) International Trading and Administration Service Consulting Co., - 408,247,000 Ltd. Song Anh Equipment Technology and Chemistry Co., Ltd. - 400,323,000 Nami Agricultural Microbiological Technology Joint Stock Company - 377,489,400 1 PLANT LIMITED COMPANY - 373,000,000 BIO Green STC Co., Ltd. - 326,700,000 (*) Tan Nguyen Investment and Trading Joint Stock Company - 324,000,000 (*) Khanh Hoang Science and Technology Co., Ltd. - 316,000,000 Quang Tri General Trading Joint Stock Company - 300,577,500 Nguyen Khoi Green Joint Stock Company - 272,250,000 Nova Vietsand Material Co., Ltd - 246,969,900 (*) MGreen Social Services Joint Stock Company - 239,580,000 Lam An Investment Joint Stock Company - 133,590,000 Green Street Trade and Service Joint Stock Company 11,016,500 106,872,000 Viet Linh Bamboo Processing Enterprise 24,472,717 86,479,370 19,551,552,750 The advances to sub-projects were recovered in December 2020. (*) Detailed statements of advance – settlement of some sub-projects (“POC”) as at 30 November 2020 were as follows: 21 Project “Vietnam Climate Innovation Center” Under Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN between the World Bank and the Government of the Socialist Republic of Vietnam 4.1. The First Innovation and Management Organization Co., Ltd. Grant contract No. 03/2018/HD-VCIC dated 9 January 2019 Contract value: VND2,078,871,000 In which: - Funds for implementing the Project (VCIC’s funds) : VND1,133,755,000 - Enterprise’s counterpart funds: VND945,116,000 VND Balance of advances as at 01 January 2020 1,020,379,000 Advance from VCIC during the period - Expenditures settled by VCIC during the period (899,468,400) Surplus of advances against settled expenditures 120,910,600 Amount recovered (120,910,600) Balance of advances as at 30 November 2020 - 4.2. Ha Yen Joint Stock Company Grant contract No. 81/2017/VCIC-HD dated 15 December 2017 Contract value: VND3,008,800,000 In which: - Funds for implementing the Project (VCIC’s funds): VND794,150,000 - Enterprise’s counterpart funds: VND2,214,650, 000 VND Balance of advances as at 01 January 2020 714,735,000 Advance from VCIC during the period - Expenditures settled by VCIC during the period (784,503,850) Deficit of advances against settled expenditures (69,768,850) Subsequent clearance by VCIC 69,768,850 Balance of advances as at 30 November 2020 - 22 Project “Vietnam Climate Innovation Center” Under Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN between the World Bank and the Government of the Socialist Republic of Vietnam 4.3. TA Water Treatment Technology Co., Ltd. Grant contract No. 16/2019/HD-VCIC dated 1 July 2019 Contract value: VND1,904,046,000 In which: - Funds for implementing the Project (VCIC’s funds) : VND1,415,700,000 - Enterprise’s counterpart funds: VND488,346,000 VND Balance of advances as at 01 January 2020 707,850,000 Advance from VCIC during the period 566,280,000 Expenditures settled by VCIC during the period (1,415,700,000) Deficit of advances against settled expenditures (141,570,000) Subsequent clearance by VCIC 141,570,000 Balance of advances as at 30 November 2020 - 4.4. Dai Viet Developing New Technologies Joint Stock Company Grant contract No. 10/2019/HD-VCIC dated 1 July 2019 Contract value: VND1,556,000,000 In which: - Funds for implementing the Project (VCIC’s funds): VND1,050,000,000 - Enterprise’s counterpart funds: VND506,000,000 VND Balance of advances as at 01 January 2020 525,000,000 Advance from VCIC during the period 420,000,000 Expenditures settled by VCIC during the period (1,050,000,000) Deficit of advances against settled expenditures (105,000,000) Subsequent clearance by VCIC 105,000,000 Balance of advances as at 30 November 2020 - 23 Project “Vietnam Climate Innovation Center” Under Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN between the World Bank and the Government of the Socialist Republic of Vietnam 4.5. Agricultural Technology Quality Limited Company Grant contract No. 17/2019/HD-VCIC dated 5 July 2019 Contract value: VND1,751,530,000 In which: - Funds for implementing the Project (VCIC’s funds) : VND823,300,000 - Enterprise’s counterpart funds: VND928,230,000 VND Balance of advances as at 01 January 2020 411,650,000 Advance from VCIC during the period 329,320,000 Expenditures settled by VCIC during the period (806,386,000) Deficit of advances against settled expenditures (65,416,000) Subsequent clearance by VCIC 65,416,000 Balance of advances as at 30 November 2020 - 4.6. BIO Green STC Co., Ltd. Grant contract No. 11/2019/HD-VCIC dated 6 August 2019 Contract value: VND1,016,373,700 In which: - Funds for implementing the Project (VCIC’s funds): VND653,400,000 - Enterprise’s counterpart funds: VND362,973,700 VND Balance of advances as at 01 January 2020 326,700,000 Advance from VCIC during the period 261,360,000 Expenditures settled by VCIC during the period (653,243,874) Deficit of advances against settled expenditures (65,183,874) Subsequent clearance by VCIC 65,183,874 Balance of advances as at 30 November 2020 - 24 Project “Vietnam Climate Innovation Center” Under Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN between the World Bank and the Government of the Socialist Republic of Vietnam 4.7. Tan Nguyen Investment and Trading Joint Stock Company Grant contract No. 15/2019/HD-VCIC dated 20 July 2019 Contract value: VND909,164,000 In which: - Funds for implementing the Project (VCIC’s funds): VND648,403,000 - Enterprise’s counterpart funds: VND260,761,000 VND Balance of advances as at 01 January 2020 324,000,000 Advance from VCIC during the period 260,000,000 Expenditures settled by VCIC during the period (646,403,000) Deficit of advances against settled expenditures (62,403,000) Subsequent clearance by VCIC 62,403,000 Balance of advances as at 30 November 2020 - 4.8. Nova Vietsand Material Co., Ltd Grant contract No. 09/2019/HD-VCIC dated 16 July 2019 Contract value: VND675,112,500 In which: - Funds for implementing the Project (VCIC’s funds): VND445,292,500 - Enterprise’s counterpart funds: 229.820.000 VND VND Balance of advances as at 01 January 2020 246,969,900 Advance from VCIC during the period 329,293,200 Expenditures settled by VCIC during the period 823,233,700 Deficit of advances against settled expenditures (246,970,600) Subsequent clearance by VCIC 246,970,600 Balance of advances as at 30 November 2020 - 5. Other receivables This represented overpayment of personal income tax of Mr. Vu Van Son to the State Budget with an amount of VND8,085,000. 25 Project “Vietnam Climate Innovation Center” Under Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN between the World Bank and the Government of the Socialist Republic of Vietnam 6. Funds received from the World Bank Period from 1/1/2020 to 30/11/2020 Accumulated to 30/11/2020 Equivalent to Equivalent to USD VND USD VND Advances 258,000.00 6,444,175,263 708,000.00 16,463,425,263 Replenishments to the 630,664.05 14,169,729,937 3,323,991.28 75,629,983,686 Designated Account Direct Payments by World 351,626.05 8,140,850,040 351,596.05 8,140,850,040 Bank Refunds for double claimed - - (17,469.07) (389,637,500) amounts in the prior year 1,240,290.10 28,754,755,240 4,366,118.26 99,844,621,489 Details of funds from the World Bank (“WB”) for the period from 01 January 2020 to 30 November 2020 were as follows: Period from 1/1/2020 to 30/11/2020 Receipts under withdrawal applications Original Equivalent to Grant amount No. Date VND Agreement USD TFA9280 APP1 14/01/2020 50,000.00 1,161,451,460 TFA9280 WA5 01/09/2020 78,000.00 1,807,224,390 TFA9280 WA6 01/09/2020 30,000.00 694,872,390 TFA9280 WA15 30/10/2020 100,000.00 2,317,352,345 Total funds advanced to Designated Account 258,000.00 5,980,900,585 (a) Period from 1/1/2020 to 30/11/2020 Receipts under withdrawal applications Original Equivalent to Grant amount No. Date VND Agreement USD TFA1407 APP13 16/03/2020 296,453.37 6,887,745,527 TFA1407 APP15 15/07/2020 118,110.94 2,738,054,369 TFA9280 WA2 20/07/2020 49,999.53 1,159,041,282 TFA9280 WA3 27/08/2020 49,952.17 1,157,243,978 TFA1407 APP16 27/08/2020 66,156.90 1,532,772,391 TFA9280 WA4 01/09/2020 49,991.14 1,158,147,068 Total funds reimbursed to the Designated Account 630,664.05 14,633,004,615 (b) 26 Project “Vietnam Climate Innovation Center” Under Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN between the World Bank and the Government of the Socialist Republic of Vietnam Period from 1/1/2020 to 30/11/2020 Direct payments under withdrawal applications Original Equivalent to amount No. Date VND USD APP22 04/11/2020 8,820.00 203,697,900 WA9 10/11/2020 68,704.00 1,586,718,800 APP20 12/11/2020 148,048.36 3,431,760,893 APP21 13/11/2020 24,265.00 560,400,000 WA10 13/11/2020 58,740.10 1,361,301,747 WA11 13/11/2020 6,087.84 141,085,800 WA14 13/11/2020 5,359.23 124,200,000 WA16 13/11/2020 6,213.59 144,000,000 WA8 18/11/2020 8,271.01 191,684,900 WA17 07/12/2020 5,835.31 135,000,000 WA18 07/12/2020 5,057.27 117,000,000 WA19 07/12/2020 6,224.34 144,000,000 Total direct payments from the World Bank 351,626.05 8,140,850,040 (c) Total [(a) + (b) + (c)] 1,240,290.10 28,754,755,240 27 Project “Vietnam Climate Innovation Center” Under Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN between the World Bank and the Government of the Socialist Republic of Vietnam 7. Expenditures by Component and Funding source Period from 1/1/2020 to 30/11/2020 Accumulated to 30/11/2020 Content World Bank Counterpart World Bank Counterpart funds Total funds Total VND VND VND VND VND VND Component 1 – Establishment 13,739,889,076 1,344,732,117 15,084,621,193 43,547,725,834 11,271,846,753 54,819,572,587 and operation of the VCIC Component 2 – Climate technology business incubation services, 29,324,832,329 - 29,324,832,329 44,707,953,224 - 44,707,953,224 including sub-grants to companies Component 3 – E-portal, database and business 1,131,171,000 - 1,131,171,000 7,752,727,000 - 7,752,727,000 support services Component 4 – Market connection and technology 3,871,566,682 - 3,871,566,682 3,871,566,682 - 3,871,566,682 transfer 48,067,459,087 1,344,732,117 49,412,191,204 99,879,972,740 11,271,846,753 111,151,819,493 28 Project “Vietnam Climate Innovation Center” Under Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN between the World Bank and the Government of the Socialist Republic of Vietnam 8. Amounts claimed and documented and not yet recovered This represented total documented amount of USD596,955.92 from the World Bank, for which the Project completed the documentation procedures in application forms No. APP28 and WA22 on 30 November 2020 for disbursements recognised for the period from 2 December 2019 to 30 November 2020, which was of USD340,998.29 and USD255,957.63, respectively. 9. Amounts withdrawn and not yet claimed These represented expenses for the Project’s activities which have not yet been recovered by the World Bank. Prepared by: Approved by: Le Thi Tuyet Nga Pham Duc Nghiem Chief Accountant Director Hanoi, 30 December 2020 29 Project “Vietnam Climate Innovation Center” Under Grant Agreement No. TF0A1407-VN and Additional Grant Agreement No. TF0A9280-VN between the World Bank and the Government of the Socialist Republic of Vietnam Appendix I – Auditors’ Responsibilities for the Audit of the 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, but not for the purpose of expressing an opinion on the effectiveness of the Project’s internal control • Evaluate the appropriateness of accounting policies used and related disclosures made by 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. 30