I I I I I U I MANAGEMENT UNIT OF FOSTERING INNOVATION THROUGH RESEARCH, I SCIENCE AND TECHNOLOGY PROJECT Fostering Innovation through Research, Science and Technology Project Financing Agreement No. 5257-VN AUDITED FINANCIAL STATEMENTS, ASSURANCE REPORTS AND MANAGEMENT LETTER For the year ended 31 December 2018 I I I I I I I I I FOSTERING INNOVATION THROUGH RESEARCH, SCIENCE AND TECHNOLOGY PROJECT Financing Agreement No. 5257-VN I I I TABLE OF CONTENTS CONTENTS PAGE(S) PART I FINANCIAL STATEMENTS Statement of the Central Project Management Unit 2 Independent Auditors' Report 3- 4 Balance Sheet 5 I Statement of Sources of Funds and Expenditures 6 Statement of Sources and Uses of Funds 7 Statement of Designated Account 8 I Statement of Withdrawals 9 Notes to the financial statements 10 - 13 I PART II INDEPENDENT AUDITORS' ASSURANCE REPORT ON INTERNAL 14-15 CONTROL I PART III INDEPENDENT AUDITORS' ASSURANCE REPORT ON COMPLIANCE Statement of the Central Project Management Unit on Compliance 16 Independent Auditor's Assurance Report on Compliance 17 - 18 PART IV MANAGEMENT LETTER 19 - 22 I I I I 1 1 I I I I l I I 1 ZABI」 FINANCIAL STATEMENTS l I ■ 園 l l ■ l 図 l I l l FOSTERING INNOVATION THROUGH RESEARCH, SCIENCE AND TECHNOLOGY PROJECT Financing Agreement No. 5257-VN STATEMENT OF THE CENTRAL PROJECT MANAGEMENT UNIT The Central Project Management Unit of Fostering Innovation through Research, Science and Technology Project (the "Central Project Management Unit" or "CPMU") submits its report together with the financial statements of Fostering Innovation through Research, Science and Technology Project - Financing Agreement No. 5257-VN (the "Project") for the year ended 31 December 2018. The Central Project Management Unit The members of the Central Project Management Unit who held office during the year and to the date of this report are as follows: Mr. Luong Van Thang Director Ms. Nguyen Thi Thu Oanh Deputy Director Mr. Doan Hong Quan Chief Accountant (appointed on 28 November 2018) Ms. Nguyen Hong Van Chief Accountant (resigned on 28 November 2018) The Central Project Management Unit's Statement of Responsibility The Central Project Management Unit is responsible for preparing the financial statements of the Project, which comprise the Balance sheet as at 31 December 2018, the Statement of Sources of Funds and Expenditures, Statement of Sources and Uses of Funds, the Statement of Designated account, he Statement of Withdrawals for the year then ended and the Notes to the financial statements, including a summary of significant accounting policies, which give a true and fair view of the financial position and designated account of the Project as at 31 December 2018, as well as of its receipts, disbursements and expenditures, designated account movements and fund withdrawals for the year then ended, in accordance with the accounting convention and the accounting policies set out in Note 2 and Note 3 of the Notes to the financial statements and the covenants contained in Financing Agreement No. 5257-VN. In preparing these financial statements, the Central Project Management Unit is required to: Select suitable accounting policies and then apply them consistently; Make judgments 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 financial statements; Prepare the financial statements on the going concern basis unless it is inappropriate to presume rhat the Project will continue in operation; and Design and maintain effective internal control over compliance with requirements that could have a direct and material financial effect on the financial statements as well as over financial reporting for the purpose of properly preparing and presenting the financial statements so as to minimise errors and frauds; and take responsibility for its assertions as to the effectiveness of such internal control. The Central Project Management Unit is responsible for ensuring that proper accounting records are kept, which disclose, with reasonable accuracy at any time, the financial position of the Project and that the financial statements comply with the accounting convention and the accounting policies set out in Note 2 and Note 3 of the Notes to the financial statements. The Central Project Management Unit is responsible for using the Project's funds as intended for the Project and for complying with covenants contained in Financing Agreement No. 5257-VN as well as laws and regulations applicable to the Project. The Central Project Management Unit is also responsible for safeguarding the assets of the Project and hence for taking reasonable steps for the prevention and detection of frauds and other irregularities. The Central Project Management Unit confirms that they have complied with the above requirements in preparing these financial statements. For and on behalf of the Central Project Management Unit, Luong Van Thang Director Hanoi, 28 3une 2019 2 I Deloitte Vietnam Co., Ltd. 15th Floor, Vinaconex Tower, 34 Lang Ha Street, Lang Ha Ward, Dong Da District, Hanoi, Vietnam Tel: +84 24 6288 3568 No.: 0I vNA-HN-BC Fax: +84 24 6288 5678 www.deloitte.com/vn INDEPENDENT AUDITORS' REPORT To: The Central Project Management Unit of Fostering Innovation through Research, Science and Technology Project ("Central Project Management Unit") Opinion We have audited the financial statements of the Fostering Innovation through Research, Science and Technology Project (the "Project"), which comprise the Balance sheet as at 31 December 2018, the Statement of Sources of Funds and Expenditures, Statement of Sources and Uses of Funds, the Statement of Designated account, the Statement of Withdrawals for the year then ended, and the Notes to the financial statements, including a summary of significant accounting policies. In our opinion, the accompanying financial statements give a true and fair view of the financial position and designated account balance of the Project as at 31 December 2018, as well as of its receipts, disbursements and expenditures, designated account movements and fund withdrawals for the year then ended, in accordance with the accounting convention and the accounting policies set out in Note 2 and Note 3 of the Notes to the financial statements. 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 Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Project in accordance with the ethical requirements that are relevant to our audit of the financial statements, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Basis of Accounting We draw attention to Note 2 and Note 3 of the Notes to the financial statements, which describes the accounting convention and the summary of the significant accounting policies. The financial statements are prepared in accordance with the accounting convention and the accounting policies set out in Note 2 and Notes 3 of the Notes to the financial statements and the requirements of the World Bank. Responsibilities of the Central Project Management Unit and those charged with governance for the Financial Statements The Central Project Management Unit is responsible for the preparation of the financial statements in accordance with the accounting convention and the accounting policies set out in Note 2 and Note 3 of the Notes to the financial statements, and for such internal control as the Central Project Management Unit determines is necessary to enable the preparation of financial statements that are free from material 3 misstatement, whether due to fraud or error. In preparing the financial statements, the Central Project Management Unit 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 the Central Project Management Unit either intends to liquidate the Project or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Project's financial reporting process. I Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited ("DTTL"), its global network of member firms, and their related entities. DTTL (also referred to as "Deloitte Global") and each of its member firms and their affiliated entities are legally separate and independent entities. DTTL does not provide services to clients. Please see www.deloitte.com/about tojearn more. I I * Deloitte INDEPENDENT AUDITORS' REPORT (Continued) Auditors' Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing (ISAs) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: * Identify and assess the risks of material misstatement of the financial statements whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. * Conclude on the appropriateness of the Central Project Management Unit's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Project's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Project to cease to continue as a going concern. * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates, if any, and related disclosures made by the Central Project Management Unit. We communicate with those charged with governance and the Central Project Management Unit regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any I signficafk deficiencies in internal control that we identify during our audit. DangChi Dung Nguyen Thanh Huong Deputy General Director Auditor Audit Practising Registration Certificate Audit Practising Registration Certificate No. 0030-2018-001-1 No. 1415-2018-001-1 DELOITTE VIETNAM COMPANY LIMITED I 28 June 2019 Hanoi, S.R. Vietnam I I 4 I FOSTERING INNOVATION THROUGH RESEARCH, SCIENCE AND FINANCIAL STATEMENTS TECHNOLOGY PROJECT For the year ended Financing Agreement No. 5257-VN 31 December 2018 BALANCE SHEET As at 31 December 2018 Closing balance Opening balance ASSETS Notes VND VND A. CURRENT ASSETS 233,317,418,824 141,738,893,689 I. Cash 5 5,050,716,440 38,635,162,712 Cash on hand 11,956,968 11,956,968 Cash in bank, State treasury 5,038,759,472 38,623,205,744 II. Receivables 228,266,702,384 103,103,730,977 Prepayments to suppliers 2,429,672,734 3,134,608,955 Other receivables 6 225,837,029,650 99,969,122,022 B. PROJECT IMPLEMENTING EXPENDITURES 339,207,677,556 121,038,760,114 Project implementing expenditures 7 339,207,677,556 121,038,760,114 TOTAL ASSETS 572,525,096,380 262,777,653,803 RESOURCES A. CURRENT LIABILITIES 192,987,957 1,787,332,886 Payables to suppliers 8 53,312,500 1,595,143,679 Taxes and amounts payable to the State - 52,513,750 Budget Other payables 9 139,675,457 139,675,457 B. RESOURCES 572,332,108,423 260,990,320,917 Foreign exchange differences 13,102,853,359 5,434,168,709 Counterpart funds 33,827,430,548 28,494,848,448 IDA funds 10 525,380,525,137 227,040,004,381 Other funds 21,299,379 21,299,379 TOTAL RESOURCES 572,525,096,380 262,777,653,803 I Vu Hoang Giang Doan Hong Quan - uong Van Thang Preparer Chief Accountant Director 3 Hanoi, 28 June 2019 I I I The accompanying notes are an integral part of these financial statements 5 I FOSTERING INNOVATION THROUGH RESEARCH, SCIENCE AND FINANCIAL STATEMENTS TECHNOLOGY PROJECT For the year ended Financing Agreement No. 5257-VN 31 December 2018 STATEMENT OF SOURCES OF FUNDS AND EXPENDITURES For the year ended 31 December 2018 Accumualated to Accumualated to Year 2018 31/12/2018 31/12/2017 VND VND VND SOURCES OF FUNDS IDA funds 298,340,520,756 525,380,525,137 227,040,004,381 Counterpart funds 5,332,582,100 33,827,430,548 28,494,848,448 Other funds - 21,299,379 21,299,379 I 303,673,102,856 559,229,255,064 255,556,152,208 I EXPENDITURES Component 1: Knowledge and Policy 7,802,160,653 26,149,364,447 18,347,203,794 Development Component 2: Supporting Government 195,361,738,541 227,731,380,038 32,369,641,497 Research Institutes reform and Enterprises innovation (GRIs) Component 3: Project Management 15,003,480,343 85,301,870,607 70,298,390,264 Others (Bank charges) 1,537,905 25,062,464 23,524,559 218,168,917,442 339,207,677,556 121,038,760,114 Foreign exchange rate differences 7,668,684,650 13,102,853,359 5,434,168,709 SURPLUS OF SOURCES OF FUNDS 93,172,870,064 233,124,430,867 139,951,560,803 OVER EXPENDITURES I I Vu Hoang Giang Doan Hong Quan Lu Thang Preparer Chief Accountant Director Hanoi, 28 June 2019 I I I I I The accompanying notes are an integral part of these financial statements I6 � � и00 О ;с ��vo�°�' °vй � °v й �о й � т �й � F- Z р О _ и м а о о w v t� м сЛ � v г� = F uj и о и ^ о� и о пi �''� r,j � О `� й � i .'-; Nй7� Ом v пмi о л И С �ш О% � 01 � N N �1 д' !� � N � N .-1 �� I � � S� � ry м о� N о� о� ш г+ О н о� i'� ,� � а� N и м д' й й г� н н Oi и... ���\ � у оi�м �� � � м tf 1 И v й й � н J � т ', н т1 � ц n � �� � � � � а, �� � V М � с м м с,.� м � � � � � � Q у v w о; � oi � i £ � N � N н ', -L ; t�i. у у р N N N N � •• � � у о и ар � т � рр � � со � � � � � `� .� � ��Ii � . . � м� � й � й й �' F? р� w о �°., О' ° ��, � � s а � � � `� � >� � � N � N у !а р N о� N т �,� �: U � Ф � м v м v s. р � � оо �.., о0 м а. 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F- � ��� О � � и � = а �о го с � � � � tL Z н С�" н �i > > > G. = 4�- � , FOSTERING INNOVATION THROUGH RESEARCH, SCIENCE FINANCIAL STATEMENTS AND TECHNOLOGY PROJECT For the year ended Financing Agreement No. 5257-VN 31 December 2018 STATEMENT OF DESIGNATED ACCOUNT For the period For the financial year ended 31 December 2018 Account Number: 16010370005607 Depositary Bank: Joint Stock Com m ercial Bank for Investm ent and Developm ent of Vietnam - Exchange No. 3 Branch Address: No. 20 Hang Tre Street, Hoan Kiem District, Ha Noi, Viet Nam Financing Agreement: 5257-VN Currency: USD Amount PART A: ACCOUNT ACTIVITIES Opening balance (01/01/2018) 1,712,909.40 Add: 13,546,028.45 Total amount deposited by the World Bank 13,195,028.45 Amount refunded to Designated Account by Sub-projects due to liquidation of 160,000.00 agreements with CPMU Amount refunded to Designated Account by the Bank due to transferred to 191,000.00 wrong account Ded u ct: 15,048,751.00 Total amount withdrawn 15,048,751.00 Closing balance (31/12/2018) 210,186.85 PART 13: ACCOUNT RECONCILIATION 1 Total amount advanced by the World Bank 6,596,818.49 2 Add: Total amount advanced by World Bank to Designated Account in the year 3,403,000.00 3 Total advances to the Designated Account as at 31 December 2018 9,999,818.49 4 Closing balance of the Designated Account as at 31 December 2018 210,186.85 5 Add: Amount withdrawn but not yet claimed 9,790,334.87 6 Add: Overseas remittance service charge 170.00 7 Add: Foreign exchange differences 106.62 8 Deduct: Amount withdrawn claimed in excess and refunded 979.85 9 Total advances to the Designated Account as at 31 December 2018 9,999,818.49 Vu Hoang Giang Doan Hong Quan -tuong Van Thang Preparer Chief Accountant Director Hanoi, 28 June 2019 The accompanying notes are an integral part of these financial statements 8 � � и ° � � , , � Н � Z ° аз ш N с� � �д � а� � � L � ао � �� - и J 0 � � � ��� � � г � `й\ Q т 'в с� о �л г� и \,.�Л Z п Ф N О б� N � � \A� �� � н С ,иу N О г�'� О �р � . �.а �- lL у = сГ О I� О� � � �\,� � i. � гV О LП гV 0 � ���.�. 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GENERAL INFORMATION Fostering Innovation through Research, Science and Technology Project (the "Project") is implemented under Financing Agreement No.5257 dated 25 July 2013 signed between the Socialist Republic of Vietnam and the International Development Association ("IDA"). Under the Financing Agreement No. 5257-VN, total budget of the project is USD 110 million, include USD 100 million from IDA and USD 10 million from Counterpart Fund of Vietnamese Government. The objectives of the Project is to support science, technology and innovation in Vietnam by designing and piloting STI (Science, Technology and Innovation) Policies, enhancing the effectiveness of Project-aided research and development institutions, and encouraging the development of innovative technology enterprises. The Project consists of three components with details as follows: Component 1: Knowledge and Policy Development Component 2: Supporting Government Research Institutes reform and Enterprises innovation (GRIs) Component 3: Project Management The Ministry of Science and Technology ("MOST") is responsible for execution of the Project; the Central Project Management Unit ("CPMU") is established by MOST to coordinate the overall project and to be responsible for the day to day management of project activities; and other departments under MOST will also support the implementation of the project as required through the establishment of specific technical task forces within the CPMU office. The Project star-Led its operations on 23 October 2013 (the effective date of the Financing Agreement No. 5257-VN) to complete on 30 June 2019 (extended to 31 December 2019). 2. ACCOUNTING CONVENTION AND FINANCIAL YEAR Accounting convention The financial statements, expressed in Vietnamese Dong ("VND"), are prepared under the historical cost convention, except for the statement of designated account and the statement of withdrawals, which are expressed in original currencies. These financial statements are prepared on the going concern basis of accounting, in accordance with requirements of the World Bank and the Ministry of Finance of Vietnam's Circular No. 107/2017/TT-BTC dated 10 October 2017 providing accounting guidance for public sector entities and the accounting policies set out in Note 3 of the Notes to the financial statements. These financial statements are inclusive of figures related to IDA funds and counterpart funds from the State Budget incurred by CPMU and Sub-Project Management Unit of National Agency for Science and Technology Information ("NASATI"), not inclusive of self-financing funds incurred by Sub-Project Management Units. Financial year The Project's financial year begins on 01 January and ends on 31 December. 10 I FOSTERING INNOVATION THROUGH RESEARCH, SCIENCE AND TECHNOLOGY PROJECT I Financing Agreement No. 5257-VN NOTES TO THE FINANCIAL STATEMENTS (Continued) 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies, which have been adopted by the Central Project Management Unit in the preparation of these financial statements, are as follows: Foreign currency translation I Fund receipts from World Bank in United States dollar (USD) are translated to Vietnamese Dong (VND) at the exchange rate quoted by the Ministry of Finance in the month receiving funds. Payment for transactions incurred in United States dollar made out of the Project's designated account are translated to Vietnamese Dong at the buying exchange rates quoted by commercial bank ruling on the transaction dates. The closing balances of monetary items denominated in foreign currencies at the balance sheet date are not retranslated. Exchange rate difference is neither a receipt nor an expense. However, exchange rate differences are presented separately on the Statement of sources and Uses of funds for the purpose of reconciliation of balances of assets and liabilities at the beginning and the end of the accounting 3 period. Recognition of funds and expenditure Funds of the Project are recognized on a cash basis. Expenditures financed by IDA funds are recognized when incurred and as certified by the local State Treasury where CMPU incurs transactions via its approval of the list of receipts and disbursements accompanying CPMU's requests. Expenditures financed by counterpart fund are recognized when incurred and as approved by the local State Treasury where CMPU and Sub-Project Management Unit of National Agency for Science and Technology Information ("NASATI") incur transactions. 4. DESIGNATED ACCOUNT Designated Account is a deposit account in USD opened at Joint Stock Bank for Investment and Development of Vietnam - Transaction Center No. 3 for the implementation of the Project's activities. Payments out of the Designated Account are for expenditures in accordance with the relevant covenants of Financing Agreement No. 5257-VN relevant regulations established by the World Bank. I 5. CASH Closing balance Opening balance VND VND Cash on hand 11,956,968 11,956,968 Cash in bank, State treasury 5,038,759,472 38,623,205,744 I Designated Account - USD 4,899,084,015 38,483,530,287 Interest on Designated Account - USD 139,675,457 139,675,457 5,050,716,440 38,635,162,712 3 6. OTHER RECEIVABLES Other receivables balance represents the balance of funds granted to the Sub-Project Management Units which had not settled at the end of the financial year. I I 11 I U 3 FOSTERING INNOVATION THROUGH RESEARCH, SCIENCE AND TECHNOLOGY PROJECT Financing Agreement No. 5257-VN NOTES TO THE FINANCIAL STATEMENTS (Continued) Closing balance Opening balance VND VND Institute of Microbiology & Biotechnology 36,682,231,000 5,970,100,000 Institute for Nanotechnology 21,886,144,267 6,469,500,000 Rang Dong Light Source & Vacuum Flask 3SC. 15,683,050,269 National Keylaboratory for Refining and Petrochical 13,486,606,884 6,968,900,000 Technologies Agricultural Genetics Institute 12,792,908,943 5,970,100,000 Research Intitute for Aquaculture No. 1 12,117,857,701 6,968,900,000 Field Crops Research Institute 11,536,234,096 4,971,300,000 Fruit and Vegetable Research Institute 11,480,146,070 4,971,300,000 Center For Environmental Fluid Dynamics 10,688,450,000 2,973,700,000 Vietnam Biochemical Technology Joint Stock Company 7,156,169,037 - National Agency for Science and Technology Information 6,658,101,461 6,761,905 Stem Cell Institute (SCI) 6,503,600,000 - Vietnam Research Institute of Electronics, Informatics 16,026,574 24,724,256,850 and Automation Vietnam National University of Agriculture 5,922,815,360 3,187,084,589 Maize Research Institute (MRI) 5,231,150,000 VNU University of Science 3,981,324,218 3,970,230,000 Institute of Forestry Research and Development (IFRAD) 3,945,900,000 Huong Tra Joint Stock Company 3,792,000,000 Institute of Geophysics (IGP) 3,723,200,000 Hanoi University Science Technology 3,267,339,668 2,198,197,825 Hanoi National University of Education 2,863,382,900 2,222,330,000 Institute of Materials Science 2,703,069,160 2,142,880,000 Hai Hoa Software Technology Joint Stock Company 2,620,994,250 367,500,000 Le Quy Don Technical University 1,958,492,000 - T Hanoi Medical University 1,716,120,000 1,716,120,000 q Center for Microelectronics and Information Technology 1,628,900,000 - T The National Key Laboratory of River and Coastal 1,600,218,220 - Engineering VNU University of Education 1,366,674,750 - Bach Mai Hospital 1,347,019,600 - Cuu Long Delta Rice Research Institute 6,976,945 7,865,066,653 Institute of Information Technology (IOIT) 1,163,500,000 Northern mountainous Agriculture and Forestry Science 1,143,843,600 Institute The University of Da Nang 1,051,277,730 Vietnam National Space Center 1,021,500,000 1,021,500,000 University of Transport and Communications - Campus in 1,013,554,500 Ho Chi Minh City Designing, Pilot manufacturing and testing center SATI 1,006,607,750 1,834,160,000 Thai Nguyen University of Technology 980,083,360 - New Research and Technology Transfer Center - Leather 947,472,840 - and Shoes Research Institute John Von Neumann Institute 936,520,200 - Nong Lam University - Ho Chi Minh City 634,482,300 - Center for Information Technology and Network Security 625,075,000 625,075,000 Monitoring University of Technology - Hanoi National University 343,340,860 National Institute of Medicinal Materials 312,218,137 1,600,350,000 Ho Chi Minh City University of Sciences 294,450,000 294,450,000 Minh Viet Joint Stock Company - 929,358,201 Hidumi Pharma Joint Stock Company 999 225,837,029,650 99,969,122,022 12 I I FOSTERING INNOVATION THROUGH RESEARCH, SCIENCE AND TECHNOLOGY PROJECT Financing Agreement No. 5257-VN NOTES TO THE FINANCIAL STATEMENTS (Continued) I 7. PROJECT IMPLEMENTING EXPENDITURES Accumulated to Accumulated to Year 2018 31/12/2018 31/12/2017 VND VND VND IDA funds 212,836,335,342 305,358,947,629 92,522,612,287 Counterpart funds 5,332,582,100 33,827,430,548 28,494,848,448 Other funds - 21,299,379 21,299,379 218,168,917,442 339,207,677,556 121,038,760,114 8. PAYABLES TO SUPPLIERS Closing balance Opening balance VND VND I Payables for Consultant - 1,356,084,497 Others 53,312,500 239,059,182 53,312,500 1,595,143,679 9. OTHER PAYABLES Other payable balances reflect balance of bank interest payable to the State budget. 10. IDA FUNDS I Current year Accumulated to 31/12/2018 USD VND equivalent USD VND equivalent Designated Account 13,195,096 298,340,520,756 23,550,322 525,380,525,137 13,195,096 298,340,520,756 23,550,322 525,380,525,137 11. COMPARATIVE FIGURES Comparative figures are figures of the Project's audited financial statements for the year ended 31 December 2017. Vu Hoang Giang Doan Hong Quan - hang Preparer Chief Accountant Director Hanoi, 28 June 2019 I I 13 I l 図 l 月 l l I l PART 11 園INoEPEN。ENT AuoIToRs・AssuRANcE REPoRT oN INTERNAL CONTROL 園 l I l l I l 園 l I l 図 Deloitte Vietnam Co., Ltd. D e lo itte 15th Floor, Vinaconex Tower, 34 Lang Ha Street, Lang Ha Ward, Dong Da District, Hanoi, Vietnam Tel: +84 24 6288 3568 Fax: +84 24 6288 5678 www.deloitte.com/vn INDEPENDENT AUDITORS' ASSURANCE REPORT ON INTERNAL CONTROL To: The Central Management Unit of Fostering Innovation through Research, Science and Technology Project (the "Central Project Management Unit" or "CPMU") Report on internal control We have audited, in accordance with International Standards on Auditing, the financial statements of the Fostering Innovation through Research, Science and Technology Project - Financing Agreement No. 5257- VN (the "Project") for the year ended 31 December 2018 and issued the independent auditor's report thereon dated 28 June 2019 expressing an unmodified opinion on those financial statements. In connection with our audit of the Project's financial statements, we also examined the effectiveness of internal control over compliance with requirements that could have a direct and material financial effect on the financial statements as well as of internal control over financial reporting, and issue the Report of Independent Auditor on internal control. Responsibilities of Central Project Management Unit As stated in the Statement of the Central Project Management Unit on page 2, the Central Project Management Unit is responsible for designing and maintaining effective internal control over compliance with requirements that could have a direct and material financial effect on the financial statements as well as over financial reporting for the purpose of properly preparing and presenting the financial statements so as to minimise errors and frauds; and take responsibility for its assertions as to the effectiveness of such internal control. Our Independence and Quality Control We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality, and professional behavior. We apply International Standard on Quality Control 1 and accordingly maintain a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. Auditor's Responsibilities Our responsibility is to express an opinion on the effectiveness of internal control over compliance with requirements that could have a direct and material financial effect on the financial statements as well as internal control over financial reporting based on our examination based on the evidence we have obtained. We conducted our reasonable assurance engagement in accordance with International Standard on Assurance Engagements 3000, Assurance Engagements other than Audits and Reviews of Historical Financial Information ("ISAE 3000"), issued by the International Auditing and Assurance Standards Board. That standard requires that we plan and perform this engagement to obtain reasonable assurance about whether, in all material respects, the management has maintained effective internal control over compliance with the requirements that could have a direct and material financial effect on the financial statements as well as internal control over financial reporting. Our examination included obtaining an understanding of internal control over compliance with requirements that could have a direct and material financial effect on the financial statements as well as of internal control over financial reporting, testing, and evaluating the design and operating effectiveness of the internal control, and performing such other procedures as we considered necessary in the circumstances to obtain sufficient appropriate evidence on which to base our opinion. Because of inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not to be detected. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited ("DTTL"), its global network of member firms, and their related entities. DTTL (also referred to as "Delotte Global") and each of its member firms and their affiliated entities are legally separate and independent entities. DTTL does not provide services to clients. Please see www,deloitte,comlaboul to learn mo,e. 14 I g Deloitte I I INDEPENDENT AUDITOR'S ASSURANCE REPORT ON INTERNAL CONTROL (Continued) We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion, as well as our findings as presented in the Management Letter on page 21 to page 22. Opinion I In our opinion, the Central Project Management Unit has maintained, in all material respects, effective internal control over compliance with requirements that could have a direct and material financial effect on the Projct financial statements as well as over financial reporting for the year ended 31 December 2018. I Dang Chi Dung Nguyen Thanh Huong Deputy General Director Auditor Audit Practising Registration Certificate Audit Practising Registration Certificate No. 0030-2018-001-1 No. 1415-2018-001-1 DELOITTE VIETNAM COMPANY LIMITED 28 June 2019 Hanoi, S.R. Vietnam I I I I I I I I I I 15 I I I I I I I I _ _ _ _ PART III INDEPENDENT AUDITOR'S ASSURANCE REPORT ON COMPLIANCE I I I I I I I I I 1 FOSTERING INNOVATION THROUGH RESEARCH, SCIENCE AND TECHNOLOGY PROJECT Financing Agreement No. 5257-VN I STATEMENT OF THE CENTRAL PROJECT MANAGEMENT UNIT ON COMPLIANCE I The Central Project Management Unit is responsible for complying with Financing Agreement No. 5257-VN, laws and regulations applicable to the Project. The Central Project Management Unit confirms the following: * An effective internal control has been designed and maintained over compliance with Financing Agreement No. 5257-VN, laws and regulations applicable to the Project; * The Project has complied with Financing Agreement No. 5257-VN, laws and regulations that could have a direct and material financial effect on the Project's financial statements for the year ended 31 December 2018; * The Project's receipts and disbursements via the designated account for the year ended 31 December 2018 are in accordance with the relevant covenants of Financing Agreement No. 5257-VN and I prevailing relevant regulations established by the World Bank; * The withdrawal applications were adequately reconciled to the statements of expenditures (SOEs) prepared by the Central Project Management Unit for the year ended 31 December 2018 and those SOEs were adequately supported; * The proceeds of the loan were used only for the purposes of the Project. For and on behalf of the Central Project Management Unit, I I Lu,arnq Van T-a - -- Hanoi, 28 June 2019 I I I I 16 I I Deloitte Vietnam Co., Ltd. 15th Floor, Vinaconex Tower, 34 Lang Ha Street, Lang Ha Ward, Dong Da District, Hanoi, Vietnam Tel: +84 24 6288 3568 ~Fax: +84 24 6288 5678 www.deloitte.com/vn I INDEPENDENT AUDITOR'S ASSURANCE REPORT ON COMPLIANCE To: The Central Management Unit of Fostering Innovation through Research, Science and Technology Project (the "Central Project Management Unit" or "CPMU") I Report on compliance We have audited, in accordance with International Standards on Auditing, the financial statements of the Fostering Innovation through Research, Science and Technology Project - Financing Agreement No. 5257- VN (the "Project") for the year ended 31 December 2018 and issued the independent Auditor's report thereon dated 28 June 2019 expressing an unmodified opinion on those financial statements, I In connection with the audit of the financial statements, we also performed procedures on the Project's compliance with Financing Agreement No. 5257-VN, laws and regulations that have a direct and material financial effect on the Project's financial statements for the year ended 31 December 2018 (the "requirements"). Responsibilities of Central Project Management Unit The Central Project Management Unit is responsible for complying with Financing Agreement No. 5257-VN, laws and regulations applicable to the Project. Our Independence and Quality Control I We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality, and professional behavior. We apply International Standard on Quality Control 1 and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. Auditor's Responsibilities Our responsibility is to express an opinion on Project's compliance based on the evidence we have obtained. We limited our tests of compliance to the requirements, and we did not test compliance with all laws and regulations applicable to the Project. We conducted our reasonable assurance engagement in accordance with International Standard on Assurance Engagements 3000, Assurance Engagements other than Audits and Reviews of Historical Financial Information ("ISAE 3000"), issued by the International Auditing and Assurance Standards Board. That standard requires that we plan and perform this engagement to obtain reasonable assurance about whether, in all material respects, the Project has complied with the I requirements. An reasonable assurance engagement in accordance with ISAE 3000 to report on the Project's compliance with the requirements involves performing procedures to obtain evidence about whether the Project's activities are free of material noncompliance with the requirements, including obtaining an understanding of the internal control relevant to the Project's compliance with the requirements. The procedures selected depend on the auditor's judgment, including the assessment of risks that the Project does not comply with the requirements and whether such noncompliance could have a direct and material financial effect on the Project's financial statements. Our procedures included testing the compliance with the requirements that we consider necessary to provide reasonable assurance that the requirements are complied by the Project. I Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited ("DTTL"), its global network of member firms, and their related entities. DTTL (also referred to as "Deloitte Global") and each of its member firms and their affiliated entities are legally separate and independent entities. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more. 17 I * Deloitte I INDEPENDENT AUDITOR'S ASSURANCE REPORT ON COMPLIANCE (Continued) We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion, as well as our findings as presented in the Management Letter on page 21 to page 22. Opinion In our opinion: * The Project has complied, in all material respects, with Financing Agreement No. 5257-VN, laws and regulations that could have a direct and material financial effect on the Project's financial statements for the year ended 31 December 2018; * The Project's receipts and disbursements via the designated account for the year ended 31 December 2018 are in accordance with the relevant covenants of Financing Agreement No. 5257-VN and prevailing relevant regulations established by the World Bank; * The withdrawal applications were adequately reconciled to the statements of expenditures (SOEs) prepared by the Central Project Management Unit for the year ended 31 December 2018 and those SOEs were adequately supported; * The proceeds of the loan were used only for the purposes of the Project. I I7 Dang Chi Dung Nguyen Thanh Huong Deputy General Director Auditor Audit Practising Registration Certificate Audit Practising Registration Certificate No. 0030-2018-001-1 No. 1415-2018-001-1 DELOITTE VIETNAM COMPANY LIMITED 28 June 2019 Hanoi, S.R. Vietnam I I I I I I * 18 I