I I I I I I I RENEWABLE ENERGY DEVELOPMENT PROJECT Credit No. 4564 - VN Grant No. TF98460 and Grant No. TF97238 AUDITED FINANCIAL STATEMENTS For the period from 01 January 2018 to 31 October 2018 I 23 0 1 I I I I I I I I I Renewable Energy Development Project The Credit No. 4564 - VN Grant No. TF98460 and Grant No.TF97238 I I I I I CONTENTS Page PART I INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS Report of the Project Management Unit 3 Independent Auditors' Report on the Financial statements 4-5 Audited Financial statements Statement of Funds and Expenditures 6 Statement of Funds balance 7 Statement of Designated accounts 8 Statement of Withdrawals and Reconciliation of Funds 09-10 Notes to the Financial statements 11-16 PART II INDEPENDENT AUDITORS' REPORT ON 17-18 THE INTERNAL CONTROL SYSTEM PART III INDEPENDENT AUDITORS' REPORT ON 19-20 THE COMPLIANCE PART IV MANAGEMENT LETTER 21 I I I I I * 2 I I Renewable Energy Development Project The Credit No. 4564 - VN Grant No. TF98460 and Grant No.TF97238 REPORT OF THE PROJECT MANAGEMENT UNIT The Management Unit of ODA funded Electricity and Renewable Energy Projects of the Ministry of Industry and Trade ("the Project Management Unit") presents this report and the Financial Statements of the Renewable Energy Development Project ("the Project") for the period from 01 January 2018 to 31 October 2018. The Project I The Project is implemented under the Credit No. 4564 - VN signed on June 16th, 2009, the Grant No.TF98460 signed on December 20th, 2010 and the Grant No. TF97238 signed on July 1st, 2010 between the Socialist Republic of Vietnam and the World Bank. Total budget of the Project under the Credit No. 4564 - VN, the Grant No. TF98460 and the Grant No. TF97238 are SDR 136,900,000 (equivalent to USD 202 million), USD 2,272,550 and USD 257,000 respectively. The Project came to effectiveness since 11 September 2009 and closed on 30 June 2018 and disbursement before 31 October 2018. The Project Management Unit 1 Members of the Project Management Unit in the year and to the reporting date are: Mr. Phuong Hoang Kim Project Director Ms. Nguyen Thi Tam Dieu Financial Officer Auditors The auditors of AASC Limited have taken the audit of financial statements of the Project. Responsibilities of the Project Management Unit I The Project Management Unit is responsible for preparation of the project financial statements, including Statement of Funds and Expenditures, Statement of Funds balance, Statement of Designated Accounts and Statement of Withdrawals and Reconciliation of Funds, which comply with accounting policies described in the attached Notes to the Financial Statements. The Project Management Unit assures that the accounting policies are appropriately selected and consistently applied. * The Project Management Unit assures that the accounting records were fully maintained to prepare the financial statements in accordance with applied accounting policies and to disclose, with I reasonable accuracy at any time, the financial position of the Project. The Project Management Unit is also responsible for maintaining an effective internal control as management determines necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and comply with relevant laws, regulations and other provisions of the Financing Agreement and Grant that could have a direct and material financial effect on the Project financial statements. The Project Management Unit Phuong Hoang Kim Project Director Hanoi, 26 June 2019 I * 3 I aasc No.: 260619.001/BCTC.FIS2 I INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS To: The Management Unit of ODA funded Electricity and Renewable Energy Projects Opinion We have audited the accompanying financial statements of the Renewable Energy Development Project ("the Project") which comprise Statement of Funds balance as at 31 October 2018, Statement of Funds and Expenditures, Statement of Designated Accounts, Statement of Withdrawals and Reconciliation of Funds for the period from 01 January 2018 to 31 October 2018, and Notes to the Financial Statements, including a summary of significant accounting policies. In our opinion: The accompanying financial statements give a true and fair view of the financial position of the Project, including the balance of the Designated Accounts as at 31 October 2018, funds received and expenditures incurred, movements of the Designated Accounts for the period from 01 January 2018 to 31 October 2018 in accordance with the basis of the principal accounting policies described in the Notes to the Financial. Statements and the provisions of the Credit No. 4564 - VN signed on June 16th, 2009, the Grant No.TF98460 signed on December 20th, 2010 I and the Grant No. TF97238 signed on July 1st, 2010. In addition, with respect to Statements of Expenditure, adequate supporting documents have been fully maintained to support to the replenishment requests submitted to the World Bank. The expenditures are eligible and in right purposes of the Credit No. 4564 - VN signed on June 16th, 2009, the Grant No.TF98460 signed on December 20th, 2010 and the Grant No. TF97238 signed on July 1st, 2010. Basis of 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 Project Management Unit in accordance with the international Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants ("IESBA Code"), and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of the Project Management Unit for the Financial Statements The Project Management Unit is responsible for the preparation of the financial statements in accordance with the principal accounting policies described in Notes to the Financial Statements, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Project's ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless management either intends to cease operations, or has no realistic alternative but to do so. I T: (84)24 3824 1990 1 F: (84)24 3825 3973 1 Le Phung Hieu, Hanoi, V etnam A member of International HANG KIM TOAN AAsc 4 I I I I Auditor's 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 auditor's 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 these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain I 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 I effectiveness of the Project's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. U Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Project's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Project to cease to continue as a going concern. Evaluate the 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 the Project Management Unit regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. AASC Limited Do Manh Cuong Nguyen Pham Hung 3Depty General Director Auditor in-charge CPA Registered No.: CPA Registered No.: 0744-2018-002-1 2893-2015-002-1 Hanoi, 26 June 2019 I 1 5 I I Renewable Energy Development Project Credit No. 4564 - VN Financial Statements Grant No. TF98460 and Grant No. TF97238 The period from 01/01/2018 to 31/10/2018 STATEMENT OF FUNDS AND EXPENDITURES For the period from 01/01/2018 to 31/10/2018 Accumulated Period ended Accumulated Note to 31/12/2017 31/10/2018 to 31/10/2018 USD USD USD 1. Funds 1 Funds received from the World Bank 3 148,086,817.16 50,407,663.52 198,494,480.68 2 Counterpart funds 4 179,602,035.95 39,128,553.10 218,730,589.05 3 Others - Foreign exchange rate 1,102,568.85 1,237,914.66 2,340,483.51 328,791,421.96 90,774,131.28 419,565,553.24 II. Expenditures Part I-A 5a 325,262,016.25 90,544,637.32 415,806,653.57 1 Works 188,127,237.65 50,692,508.27 238,819,745.92 2 Goods 76,395,938.91 24,335,354.83 100,731,293.74 3 Consultants' services 13,332,958.95 3,145,894.93 16,478,853.88 4 Incremental operating costs 31,179,910.63 5,768,014.32 36,947,924.95 5 Others 16,225,970.11 6,602,864.97 22,828,835.08 Part I-B, I and 11N 5b 3,426,425.69 332,473.98 3,758,899.67 I 6 Goods 231,539.16 - 231,539.16 7 Consultants' services 2,768,269.18 332,105.32 3,100,374.50 8 Training and Workshop 103,258.52 - 103,258.52 9 Incremental operating costs 323,358.83 368.66 323,727.49 328,688,441.94 90,877,111.30 419,665,553.24 Ill. Surplus/(Deficit) 102,980.02 (102,980.02) - I I I I I I I I I 6 I I Renewable Energy Development Project Credit No. 4564 - VN Financial Statements Grant No. TF98460 and Grant No. TF97238 The period from 01/01/2018 to 31/10/2018 STATEMENT OF FUNDS BALANCE As at 31 October 2018 31/10/2018 31/12/2017 USD USD Surplus/(Deficit) Surplus as at beginning 102,980.02 59,467.80 Surplus/(Deficit) in the year (102,980.02) 43,512.22 I Surplus as at closing - 102,980.02 Represented by: Current assets 1,040.82 104,283.11 Cash at bank (*) 1,040.82 104,283.11 I Current liabilities 1,040.82 1,303.09 Payables to contractors - 120.99 Other payables (*) 1,040.82 1,182.10 Net worth - 102,980.02 I (*) Bank interest 37 I I I I I I I 1 7 I I Renewable Energy Development Project Credit No. 4564 - VN Financial Statements Grant No. TF98460 and Grant No. TF97238 The period from 01/01/2018 to 31/10/2018 STATEMENT OF DESIGNATED ACCOUNT For the period: From 01 January 2018 to 31 October 2018 Account No.: 17702-000000176-1-USD Bank: Vietnam Joint Stock Commercial Bank for Industry and Trade Eastern Hanoi Branch Agreement No.: 4564-VN I PART A: ACTIVITIES Note USD USD Opening balance 103,101.01 Add: Total amounts deposited by the World Bank 268,618.96 The interest transferred from interest account 700.00 269,318.96 Deduct: Total amounts withdrawn Total amounts withdrawn (332,594.97) Amount refunded to the World Bank (39,125.00) Bank charges paid from interest (98.18) The interest transferred to interest account (500.00) (372,318.15) Closing balance 101.82 PART B: RECONCILIATION 1. Amount advanced by the World Bank 300,000.00 2. Dedduct: Amount recovered by the World Bank (1) (260,875.00) 3. Amount refunded to the World Bank (2) (39,125.00) 4. Present outstanding amount advanced to - 5. Closing balance as at 31/10/2018 101.82 6. Deduct: bank interest (101.82) 7. Total advances accounted for (1) Document replenishment of application at 13 IDA MOIT dated 24/10/2018 (2) Repayment date 29/10/2018 of USD 39,125.00. I I I I I 8 I mmw mW mmm M m m m M M M m Renewable Energy Development Project Credit No. 4564 - VN Financial Statements Grant No. TF98460 and Grant No. TF97238 The period from 01/01/2018 to 31/10/2018 STATEMENT OF WITHDRAWALS AND RECONCILIATION OF FUNDS Credit No. 4564 - VN For the period from 01/01/2018 to 31110/2018 Withdrawal applications Amount claimed Amount received Goods, Subsidiary consultants' Loans to services, Participating training and Banks workshops and Equivalent No Date Currency under Part I-A incremental Total to USD Date Amount Variances NotE (a) (b) (b-a) Designated account - 529,493.96 529,493.96 529,493.96 268,618.96 (260,875.00) 11 IDA MOlT 21/02/2018 USD - 149,125.70 149,125.70 149,125.70 05/03/2018 149,125.70 - 12 IDA MOlT 05/06/2018 USD - 119,493.26 119,493.26 119,493.26 18/06/2018 119,493.26 - 13 IDA MOIT 24/10/2018 USD - 260,875.00 260,875.00 260,875.00 - (260,875.00) (1) Replenishment 1,159,036,795,404 - 1,159,036,795,404 50,178,169.56 1,159,036,795,404 - 10-SHB-IDA 05/02/2018 VND 14,409,482,929 - 14,409,482,929 634,485.50 07/02/2018 14,409,482,929 - 9-SHB-IDA 05/02/2018 VND 97,462,077,060 - 97,462,077,060 4,293,294.45 08/02/2018 97,462,077,060 - 06-VTB-IDA 09/02/2018 VND 86,017,881,239 - 86,017,881,239 3,780,922.68 02/03/2018 86,017,881,239 - 07-VTB-IDA 02/05/2018 VND 27,320,346,252 - 27,320,346,252 1,199,839.53 11/05/2018 27,320,346,252 - 11-SHB-IDA 10/05/2018 VND 10,000,000,000 - 10,000,000,000 438,875.60 21/05/2018 10,000,000,000 - 15-VCB-IDA 16/05/2018 VND 36,879,747,091 - 36,879,747,091 1,619,557.20 22/05/2018 36,879,747,091 - 17-VCB-IDA 08/05/2018 VND 36,446,610,588 - 36,446,610,588 1,600,536.21 22/05/2018 36,446,610,588 - 18-VCB-IDA 16/05/2018 VND 46,606,859,000 - 46,606,859,000 2,040,803.90 30/05/2018 46,606,859,000 - 12-SHB-IDA 05/06/2018 VND 108,212,927,948 - 108,212,927,948 4,747,638.67 11/06/2018 108,212,927,948 - 46-BIDV-IDA 24/07/2018 VND 39,000,000,000 - 39,000,000,000 1,673,388.83 06/08/2018 39,000,000,000 - 47-BIDV-IDA 24/07/2018 VND 79,477,614,000 - 79,477,614,000 3,409,958.73 07/08/2018 79,477,614,000 - 48-BIDV-IDA 24/07/2018 VND 40,522,386,000 - 40,522,386,000 1,738,225.66 16/08/2018 40,522,386,000 - 9 wmmm m M m mmmmmmMm- Renewable Energy Development Project Credit No. 4564 - VN Financial Statements Grant No. TF98460 and Grant No. TF97238 The period from 01/01/2018 to 31/10/2018 STATEMENT OF WITHDRAWALS AND RECONCILIATION OF FUNDS Credit No. 4564 - VN For the period from 01/01/2018 to 31/10/2018 (Continued) Withdrawal applications Amount claimed Amount received Goods, Subsidiary consultants' Loans to services, Participating training and Banks workshops and Equivalent No Date Currency under Part I-A incremental Total to USD Date Amount Variances NOtE 19-VCB-IDA 09/07/2018 VND 26,481,816,059 - 26,481,816,059 1,137,779.42 23/08/2018 26,481,816,059 - 13-SHB-IDA 31/08/2018 VND 44,324,994,992 - 44,324,994,992 1,898,408.69 27/09/2018 44,324,994,992 - 14-SHB-IDA 25/09/2018 VND 120,000,000,000 - 120,000,000,000 5,143,371.48 02/10/2018 120,000,000,000 - 49-BIDV-IDA 16/09/2018 VND 61,000,000,000 - 61,000,000,000 2,614,547.17 02/10/2018 61,000,000,000 - 22-VCB-IDA 23/10/2018 VND 19,525,330,309 - 19,525,330,309 836,238.40 25/10/2018 19,525,330,309 - 51-BIDV-IDA 14/10/2018 VND 34,601,088,486 - 34,601,088,486 1,481,908.81 25/10/2018 34,601,088,486 - 50-BIDV-IDA 04/10/2018 VND 40,223,607,039 - 40,223,607,039 1,722,712.21 25/10/2018 40,223,607,039 - 15-SHB-IDA 23/10/2018 VND 25,000,000,000 - 25,000,000,000 1,070,640.88 26/10/2018 25,000,000,000 - 21-VCB-IDA 25/10/2018 VND 112,400,369,412 - 112,400,369,412 4,814,545.06 02/11/2018 112,400,369,412 - 20-VCB-IDA 23/10/2018 VND 53,123,657,000 - 53,123,657,000 2,280,490.48 09/11/2018 53,123,657,000 - Total in USD - 529,493.96 - 50,707,663.52 268,618.96 (260,875.00) Total in VND 1,159,036,795,404 - 1,159,036,795,404 1,159,036,795,404 - (1) Amount recovered by the World Bank. 10 Renewable Energy Development Project Credit No. 4564 - VN Financial Statements Grant No. TF98460 and Grant No. TF97238 The period from 01/01/2018 to 31/10/2018 NOTES TO THE FINANCIAL STATEMENTS For the period from 01/01/2018 to 31/10/2018 1. Background The Renewable Energy Development Project is implemented under the Credit No. 4564 - VN signed on June 16th, 2009, the Grant No.TF98460 signed on December 20th, 2010 and the Grant No, TF97238 signed on July 1st, 2010 between the Socialist Republic of Vietnam and the International Development Association through the World Bank. Total budget of the Project under the Credit No. 4564 - VN, the Grant No. TF98460 and the Grant No. TF97238 are SDR 136,900,000 (equivalent to USD 202 million), USD 2,272,550 and USD 257,000 respectively. The Project came to effectiveness since 11 September 2009 and closed on 30 June 2018, disbursement before 31 October 2018. The main objectives of the Project is to increase the supply of electricity with cheapest costs to the national grid from renewable energy sources, on a commercially, environmentally and socially sustainable basis. The Project includes components as follows: Part 1: Renewable Energy Investments A. Establish a refinancing facility for commercial loans provided by Participating Banks' in support of eligible renewable energy sub-projects. B. Strengthen the capacity of: (i) Ministry of Industry and Trade (MOIT) to review and evaluate renewable sub-project proposals and re-financing applications; and monitor the eligibility of Participating Banks and developers2 and the implementation of eligible sub-project; (ii) Participating Banks and developers to prepare re-financing applications and implement sub- project; and (iii) MOIT to manage and coordinate Project implementation, including the audit of Project accounts; and disseminate knowledge and information regarding renewable energy development. Part 2: Regulatory Development A. Build the regulatory infrastructure for renewable energy development, including: (i) prepare laws and regulations on renewable energy and carry out studies to support the application of power purchase agreements and avoided cost tariff; (ii) develop mechanisms for the transparent allocation to developers of renewable energy development sites; (iii) formulate technical standards for renewable energy technologies; and (iv) develop environmental and social safeguard guidelines for the implementation of renewable energy projects. B. (i) Strengthen the institutional capacity of central and local government entities to evaluate and monitor renewable energy projects; and (ii) disseminate information and strengthen public understanding of the regulatory infrastruture, technical standards, and environmental and social safeguard guidelines for renewable energy. 3 Part 3: Pipeline Development Carry out a program to facilitate the large-scale development of renewable energy through: A. Support the preparation of feasibility studies on potential renewable energy sub-projects through the provision of cost-sharing grants to potential developers; 1 Participating Banks (PBs) means, collectively, Bank for Investment and Development of Vietnam, Joint Stock Commercial Bank for Foreign Trade of Vietnam and Saigon Thuong Tin Commercial Joint Stock Bank, Vietnam Joint Stock Commercial Bank for Industry and Trade as such list may be amended from time by mutual agreement between the Recipient and the Association; and selected banks be able to obtain refinancing from IDA of loans for renewable energy projects if these projects meet the refinancing requirements; 2 Developers prepare and implement eligible renewable energy investment sub-project incompliance with provisions of Financing agreement Including 3 universities participating the Project: Hanoi Universities of Science and Technology, Electric Power University and Thuyloi Universities 11 3 I Renewable Energy Development Project Credit No. 4564 - VN Financial Statements Grant No. TF98460 and Grant No. TF97238 The period from 01/01/2018 to 31/10/2018 B. Building the capacity of potential developers3 of renewable energy sub-projects and of financial institutions in regard to anaylysis of investment risks, implementation of safeguard requirements, formulation of credit policies and appraisal of sub-projects, through the provision of small grants to develop training programs; and I C. Carry out strategic studies on systemic barries to and long-term potential for renewable energy development. The Project is managed by the Management unit of ODA funded Electricity and Renewable Energy Projects, and its office is located at 23 Ngo Quyen street, Hoan Kiem district, Hanoi. I 2. Principal Accounting Policies a. Basis of preparation of the Financial Statements I The annual accounting period commences from 1st January and ends at 31st December. The last accounting period is from 01 January 2018 to October 31, 2018 The financial statements are prepared in accordance with requirements of the World Bank and presented in United State Dollar (USD), except for the Statement of Withdrawals and Reconciliation of Funds, which are prepared in Vietnam Dong (VND) and United State Dollar (USD). Participating Banks and Developers (related to Part I-A) maintain their accounting books in Vietnam Dong (VND). For the purpose of reporting to the World Bank, the Statement of Funds and Expenditures are translated to United States Dollar (USD) at average rate of foreign exchange announced by the Ministry of Finance (in which the rate for this year ended 31 October 2018 is VND 22,542.3/USD). Funds reimbursed by the World Bank are translated at the Bank's exchange rate on the date of reimbursement. The exchange differences from the recognition of funds and expenditures reimbursed by the World Bank are recorded into exchange rate difference account and presented as other funds on the Statement of Funds and Expenditures. The Renewable Energy Projects Management Board (relates to Part I-B, II and Ill) maintains its accounting books in United States Dollar (USD). Expenditures funded by the World Bank in Vietnam Dong for technical assistant activities (Part I- B, II, Ill) are converted to United State Dollar under the exchange rate at the date of withdrawal from the Designated Account. Principal accounting policies are summarized as below: I b. Funds and Expenditures 3 Funds: Funds received from the World Bank are recorded when actual payment made to the Participating Banks or remittance made into the Designated Account or direct payments made to contractors/suppliers. The funds of the Participating Banks are recorded when actually disbursed for the Developers I to pay for the Project's activities or directly pay for contractors/suppliers. V The equity of Developers and Universities are recorded when purchased items or resources are actually used for the sub-project's activities. Equity of Developers can not be less than 20% of total investments of the sub-project. Expenditures of Part I-B, 11 and III are recorded when actually paid, except advances to staff and PIT that are recorded when actually incurred. Expenditures of Part I-A are recorded when payments are made or Developers' resources are actually used for the sub-project's activities. 12 I Renewable Energy Development Project Credit No. 4564 - VN Financial Statements Grant No. TF98460 and Grant No. TF97238 The period from 01/01/2018 to 31/10/2018 I c. Designated accounts and their interest Designated Accounts are the deposit accounts in United States Dollar (USD) opened at Vietnam Joint Stock Commercial Bank for Industry and Trade - Eastern Hanoi Branch for the Project's activities. Payments made via the Designated Accounts are for eligible expenditures of the Project in accordance with provisions of the Credit No. 4564 - VN signed on June 16th, 2009, the Grant No.TF98460 signed on December 20th, 2010 and the Grant No. TF97238 signed on July 1st, 2010. Interests of the Designated Accounts are considered as receipts of the State Budget and initially recorded as Other payables in Statement of Funds balance and used to cover bank charges. At the end of the Project, outstanding interests will be returned to the Vietnamese Government. In case bank charges are not fully covered by the interests, the Project Management Board will plan to settle by the Counterpart funds. (According to Circular No.111/2016/TT-BTC dated 30 June 2016 which comes into force from 01 November 2016). 3. Funds received from the World Bank Period ended Accumulated 31/10/2018 to 31/10/2018 USD USD Financing Agreement No. 4564 - VN 50,407,663.52 196,764,854.44 Advances - 300,000.00 Replenishments 268,618.96 1,544,676.67 Reimbursements to Participating Banks (*) 50,178,169.56 194,959,302.77 Amount refunded to the World Bank (39,125.00) (39,125.00) Grant No. TF98460 - 1,523,974.24 Advances - 1,090,401.00 Replenishments - 275,336.96 Direct payments - 288,685.28 Amount refunded to the World Bank - (130,449.00) Grant No. TF97238 - 205,652.00 Advances - 50,000.00 Replenishments -17,100.00 Direct payments - 138,552.00 50,407,663.52 198,494,480.68 I I I I I 3 13 I I Renewable Energy Development Project Credit No. 4564 - VN Financial Statements Grant No. TF98460 and Grant No. TF97238 The period from 01/01/2018 to 31/10/2018 3 (*) Reimbursements to Participating Banks are as follows: Period ended 31/10/2018 Accumulated to 31/10/2018 Equivalent Equivalent VND to USD VND to USD JSC Bank for 294,824,695,525 12,640,741.41 1,815,646,126,302 83,909,974.17 I Investment and Development of Vietnam I JSC Bank for 331,464,389,459 14,329,950.67 1,081,691,406,534 48,995,374.00 Foreign Trade of Vietnam IK JSC Bank for 113,338,227,491 4,980,762.21 513,351,641,135 22,784,305.36 Industry and Trade of Vietnam Saigon Hanoi 419,409,482,929 18,226,715.27 889,800,000,000 39,269,649.24 Commercial Joint Stock Bank 1,159,036,795,404 50,178,169.56 4,300,489,173,971 194,959,302.77 4. Counterpart funds Period ended 31/10/2018 Accumulated to 31/10/2018 Equivalent Equivalent VND toUSD VND toUSD Funds/Equity from - The PBs 212,965,836,295 9,447,387.19 1,509,047,032,432 73,300,539.26 - The PDs 669,081,746,353 29,681,165.91 3,127,802,949,820 145,206,796.54 - Universities - 4,828,420,890 223,253.25 882,047,582,648 39,128,553.10 4,641,678,403,142 218,730,589.05 5. Expenditures Under the Credit No. 4564 - VN dated 16 June 2009: > Subsidiary Loans under Part I - A: Equity of Developers can not be less than 20% of total investments of the sub-project. > Goods, consultant's services, training and workshops and incremental operating costs other than Part I - A, III - A and Ill - B: 100% payments will be funded from the World Bank. I Under the Grant No. TF98460 dated 20 December 2010: Goods, consultant's services, training and workshops under Part III and incremental operating costs will be financed 100% from the World I Bank. I 14 I MMIMMmImmMm mememm-m Renewable Energy Development Project Credit No. 4564 - VN Financial Statements Grant No. TF98460 and Grant No. TF97238 The period from 01101/2018 to 31/10/2018 5a. Part I - A Period ended 31/10/2018 Accumulated to 31/10/2018 Participating Banks Developers Total Participating Banks Developers Total Equivalent to USD Equivalent to USD Equivalent to USD Equivalent to USO Equivalent to USD Equivalent to USD Works 38,284,246.59 12,408,261.68 50,692,508.27 162,317,892.05 76,501,853.87 238,819,745.92 Goods 19,147,329.03 5,188,025.80 24,335,354.83 84,732,667.14 15,998,626.60 100,731,293.74 Consultants' services 626,852.87 2,519,042.06 3,145,894.93 2,510,255.51 13,968,598.37 16,478,853.88 Incremental operating costs 1,734,922.90 4,033,091.42 5,768,014.32 17,521,892.98 19,426,031.97 36,947,924.95 Others 1,070,120.02 5,532,744.95 6,602,864.97 3,517,149.35 19,311,685.73 22,828,835.08 60,863,471.41 29,681,165.91 90,544,637.32 270,599,857.03 145,206,796.54 415,806,653.57 In which: Reimbursed by the World Bank 50,178,169.56 - 50,178,169.56 194,959,302.77 - 194,959,302.77 5b. Part I-B, II and III Period ended 31/10/2018 Accumulated to 31/10/2018 Equity from Equity from IDA 4564-VN TF98460 TF97238 Universities Total IDA 4564-VN TF98460 TF97238 Universities Total USD USD USD USD USD USD USD USD USD USD Goods - - - - - 4,627.90 90.84 9,840.98 216,979.44 231,539.16 Consultants' 332,105.32 - 332,105.32 1,682,863.98 1,220,264.33 195,436.40 1,809.79 3,100,374.50 services - - Training and - - 98,104.81 5,153.71 - - 103,258.52 Workshop - - Incremental 368.66 - - - 368.66 19,954.98 298,465.36 843.13 4,464.02 323,727.49 operating costs 332,473.98 - - - 332,473.98 1,805,551.67 1,523,974.24 206,120.51 223253.25 3,758,899.67 15 I Renewable Energy Development Project Credit No. 4564 - VN Financial Statements Grant No. TF98460 and Grant No. TF97238 The period from 01/01/2018 to 31/10/2018 I 6. Subsequent events There have been no significant events occurring after the balance sheet date, which would require adjustments or disclosures to be made in the financial statements. 7. Corresponding figures The corresponding figures are the financial statements for the year ended as at 31 December 2017 which were audited by AASC Limited. 8. Approval of the Financial Statements I The financial statements were approved by Project Management Unit for issuance on 26 June 2019. I Phuong Hoang Kim Nguyen Thi Tam Dieu 3roloctDirector Financial Officer Hanoi, 26 June 2019 I I I I I I I I I I 16 I I 0aasc No.: 260619.001/BCTC.FIS2 INDEPENDENT AUDITORS' REPORT ON THE INTERNAL CONTROL SYSTEM To: The Management Unit of ODA funded Electricity and Renewable Energy Projects We have audited, in accordance with the International Standards on Auditing, the financial statements of the Renewable Energy Development Project ("the Project") for the period from 01 January 2018 to 31 October 2018 and issued the auditors' report thereon dated 26 June 2019 with an opinion on those financial statements. In connection with our audit of the 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 the internal control over financial reporting for the period from 01 January 2018 to 31 October 2018. Responsibilities of the Project Management Unit The Project Management Unit is responsible for maintaining an effective internal control over compliance with requirements that could have a direct and material financial effect on the financial statements as well as the internal control over financial reporting. Auditor's Responsibility Our responsibility is to express an opinion on the effectiveness of internal control based on our examination. Our examination was conducted in accordance with the International Standard on Assurance Engagements (ISAE) 3000 (Revised). 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 has maintained an effective internal control over compliance with requirements that could have a direct and material financial effect on the financial statements as well as internal control over financial reporting. Our examination included obtaining an understanding, testing, and evaluating the design and operating effectiveness of the internal control, and performing other procedures as we considered necessary in the circumstances to obtain sufficient appropriate evidence to provide a basis for our opinion. Because of the 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. In addition, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. I I T: (84)24 3824 1990 1 F: (84)24 3825 3973 1 1 Le Phung Hieu. Hanoi, Vietnam Amemberof International HANG KIM TOAN AASC 17 I 1 I Auditors' opinion In our opinion, the Project has maintained an effective internal control over misstatements that could have a direct and material financial effect on the Project financial statements for the period from 01 January 2018 to 31 October 2018. AASC Umited Do Map Cuong Nguyen Pham Hung ty eneral Director Auditor in-charge I CPA Registered No.: CPA Registered No.: 0744-2018-002-1 2893-2015-002-1 Hanoi, 26 June 2019 I I I I I I I I I I I I 18 I I Iaasc No.: 260619.001/BCTC.FIS2 INDEPENDENT AUDITORS' REPORT ON THE COMPLIANCE To: The Management Unit of ODA funded Electricity and Renewable Energy Projects We have audited, in accordance with International Standards on Auditing, the financial statements of the Renewable Energy Development Project ("the Project") for the period from 01 January 2018 to 31 October 2018 and issued the auditors' report thereon dated 26 June 2019 with an opinion on those financial statements. In connection with the audit of the financial statements, we also performed procedures on the Project's compliance with the Credit No. 4564 - VN signed on June 16th, 2009, the Grant No.TF98460 signed on December 20th, 2010 and the Grant No. TF97238 signed on July 1st, 2010, law and regulations that have a direct and material effect on the Project's financial statements for the period from 01 January 2018 to 31 October 2018 ("the Requirements"). Responsibilities of the Project Management Unit 1 The Project Management Unit is responsible for cQmplying with the Requirements applicable to the Project. Auditor's Responsibility Our responsibility is to express an opinion on the Project's compliance with the Requirements based on our procedures. We limited our tests of compliance to the Requirements, and we did not test compliance with all laws and regulations applicable to the Project. We performed our work in accordance with the International Standard on Assurance Engagements (ISAE) 3000 (Revised). 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 has complied with the Requirements. An assurance engagement to report on the compliance with the Requirements at the Project involves performing procedures to obtain evidence about whether the Project's activities are free of material non-compliance with the Requirements, including obtaining an understanding of the internal control relevant to the Project's compliance with the Requirements. The procedures selected depend on the auditors' 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 material financial effect on the Project's financial statements. Our procedures included testing the compliance with the Requirements we consider necessary to provide a reasonable assurance that the Requirements are complied by the Project. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. I I I T: (84)24 3824 1990 I F: (84)24 3825 3973 1 Le Phung Hieu, Hanoi, Vietnarn A member of International HANG KItM TOAN AASc 19 I I I I Auditors' opinion In our opinion, the Project has complied with the Requirements that could have a direct and material financial effect on the Project's financial statements for the period from 01 January 2018 to 31 October 2018. AASC Limited Do Manh Cuong Nguyen Pham Hung Deputy General Director Auditor in-charge CPA-Registered No.: CPA Registered No.: 0744-2018-002-1 2893-2015-002-1 I Hanoi, 26 June 2019 I I I I I I I I I I I I 20 1