W W Deloitte W W W U W U U W U U CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT - GIA LAI PROVINCE Financing Agreement - Credit number Cr. 5330-VN AUDITED FINANCIAL STATEMENTS, ASSURANCE REPORTS AND MANAGEMENT LETTER For the year ended 31 December 2018 CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT - GIA LAI PROVINCE Financing Agreement - Credit number Cr. 5330-VN TABLE OF CONTENTS CONTENTS PAGE(S) PART I FINANCIAL STATEMENTS Statement of the Project Management Unit 2 Independent Auditors' Report 3 4 Balance Sheet 5 Statement of Incomes and Expenditures 6 Statement of Sources and Uses of Funds 7 Statement of Designated Account 8 Statement of Withdrawals 9 Notes to the financial statements 10 - 12 INDEPENDENT AUDITORS' ASSURANCE REPORT ON PART II INTERNAL CONTROL 13-14 PART III INDEPENDENT AUDITORS' ASSURANCE REPORT ON COMPLIANCE Statement of the Project Management Unit on Compliance 15 Independent Auditors' Assurance Report on Compliance 16 - 17 PART IV MANAGEMENT LETTER 18 - 24 . , . . • . . • . . . . PARTI ．、… .FINANCIALSTATE間ENTS日 個 .- . . ．發 ．〞 .- ．珍－ . . . . . . 目 . . • . • CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT - GIA LAI PROVINCE Financing Agreement - Credit number Cr. 5330-VN STATEMENT OF THE PROJECT MANAGEMENT UNIT The Project Management Unit of the Central Highlands Poverty Reduction Project - Gia Lai Province (the "Project Management Unit") presents this report together with the financial statements of the Central Highlands Poverty Reduction Project - Gia Lai Province (the "Project") for the year ended 31 December 2018. The Project Management Unit The members of the Project Management Unit who held office during the year and to the date of this report are as follows: Mr. Ho Phuoc Thanh Director Mr. Le Quang Dat Deputy Director Ms. Truong Thi Nhung Chief Accountant The Proiect Management Unit's Statement of Resl2onsibility The 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 Incomes and Expenditures, Statement of Sources and Uses of Funds, Statement of Designated Account, 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 of the Project and designated account balances as at 31 December 2018 as well as of the incomes and expenditures, the receipts and disbursements of the Project, 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 - Credit number Cr. 5330-VN. In preparing these financial statements, the Project Management Unit is required to: 0 Select suitable accounting policies and then apply them consistently; 0 Make judgments and estimates that are reasonable and prudent; a State whether applicable accounting principles have been followed, subject to any material departures disclosed and explained in the financial statements; 0 Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Project will continue in business; and 0 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 mininnise errors and frauds; and take responsibility for its assertions as to the effectiveness of such internal control. The Project Management Unit is responsible for ensuring that proper accounting records are kept, which disclose, with reasonable accuracy at any time, the financial position of the Project and 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 Project Management Unit is responsible for ensuring that the funds have been used as intended for the Project and for complying with Financing Agreement Credit number Cr. 5330-VN as well as laws and regulations applicable to the Project. The 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 Project Management Unit confirms that they have complied with the above requirements in pr financial statements. the Pr ct Management Unit, fib Pll- 7aetljail'h D , ire-ctQE----- Gia Lai, 18 lune 2019 2 Deloitte Vietnam Company Ltd. 15rFloor, Vinaconex Tower, SD elonitte 34 Lang Ha Street, Lang Ha Ward, Dong Da District, Hanoi, Vietnam Tel :+84 24 6288 3568 Fax:+84 24 6288 5678 No.:642 /VN1A-HN-BC Website: www.deloitte.corn/vn INDEPENDENT AUDITORS' REPORT To: The Project Management Unit of the Central Highlands Poverty Reduction Project - Gia Lai Province Opinion We have audited the financial statements of the Central Highlands Poverty Reduction Project - Gia Lai Province (the "Project") prepared on 18 June 2019, as set out from page 05 to page 12, which comprise the Balance Sheet as at 31 December 2018, Statement of Incomes and Expenditures, Statement of Sources and Uses of Funds, Statement of Designated Account, 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 of the Project and designated account balances as at 31 December 2018 as well as of the incomes and expenditures, the receipts and disbursements of the Project, 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 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, 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. Emphasis of Matter - 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 Note 3 of the Notes to the financial statements and the requirements of the World Bank. Our opinion is not modified in respect of this matter. Responsibilities of the Project Management Unit and those charged with governance for the Financial Statements The 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 Project Management Unit 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, the Central Project Coordination Office 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 Coordination Office 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. Deloitte refers to one or more of Deloitte Touche Tohmatsu Ltd., a UK private company limited by guarantee ("DTTL"), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities, DTTL (also referred to as "Deloitte Global") does not provide services to clients. Please see www.deloitte.corn/about for a more detailed description of DTTL and its member firms. 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 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 Project Management Unit. We communicate with those charged with governance and the Project Management Unit regarding, arncng othermatters, the planned scope and timing of the audit and significant audit findings, including any signiflcant deficiencies in internal control that we identify during our audit. Vu Du guyen Nguyen Tien Quoc Deputy General Director Auditor Audit Practising Registration Certificate Audit Practising Registration Certificate No. 0764-2018-001-1 No. 3008-2019-OO1-1 DELOITTE VIETNAM COMPANY LIMITED 18 June 2019 Hanoi, S.R. Vietnam 4 3 U CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT - GIA LAI PROVINCE FINANCIAL STATEMENTS * Financing Agreement - Credit number Cr. 5330-VN For the year ended 31/12/2018 BALANCE SHEET As at 31 December 2018 Notes 31/12/2018 31/12/2017 VND VND ASSETS Current assets 18,227,743,789 16,891,957,184 Cash 5 15,460,816,090 13,268,253,184 Cash on hand 387 387 Cash in bank 15,460,815,703 13,247,699,618 Cash in treasury 20,553,179 Receivables 2,766,927,699 3,623,704,000 Prepayments to suppliers 6 2,766,259,000 3,623,428,000 Other receivables 668,699 276,000 Total assets 18,227,743,789 16,891,957,184 LIABILITIES Current liabilities 32,559,146,643 4,525,621,647 Payables to suppliers 7 32,510,946,626 4,478,986,774 Payables to employees 8,051,760 968,760 Other payables 8 40,148,257 45,666,113 Total liabilities 32,559,146,643 4,525,621,647 NET ASSETS (14,331,402,854) 12,366,335,537 Exchange differences 9,421,645,616 4,904,127,854 (Deficit)/Surplus of incomes over expenditures (23,753,048,470) 7,462,207,683 TOTAL (14,331,402,854) 12,366,335,537 oc Thanh Truong Thi Nhung Director Chief Accountant/Preparer Gia Lai, 18 June 2019 The accompanying notes are an integral part of these financial statements 5 CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT - GIA LAI PROVINCE FINANCIAL STATEMENTS Financing Agreement - Credit number Cr. 5330-VN For the year ended 31/12/2018 STATEMENT OF INCOMES AND EXPENDITURES For the year ended 31 December 2018 Accumulated to 31 December 2018 VND VND INCOMES IDA funds 9 183,387,655,804 469,302,244,493 Fund disbursed in cash 183,387,655,804 464,971,244,493 Fund disbursed by fixed assets - 4,331,000,000 Counterpart funds 4,724,941,827 25,249,733,216 Other funds 11,839,221 39,683,704 TOTAL INCOMES 188,124,436,852 494,591,661,413 EXPENDITURES Part I: Village and Commune Infrastructure 90,693,063,590 196,418,913,083 Development Part II: Sustainable Livelihoods Development 36,155,838,356 103,213,014,973 Part III: Connective Infrastructure Development, 84,344,823,925 171,215,234,622 Capacity Building, and Communications Part IV: Project Management 8,140,604,319 47,465,922,073 Others (Bank charges) 5,362,815 31,625,132 TOTAL EXPENDITURES 219,339,693,005 518,344,709,883 trEIICT OF INCOMES OVER EXPENDITURES (31,215,256,153) (23,753,048,470) HuPtroc Thanh Truong Thi Nhung Director Chief Accountant/Preparer Gia Lai, 18 June 2019 The accompanying notes are an integral part of these financial statements 6 � � (%� � I � 7i ® � м м г,� г� v� . 7..Р :ч V N п N Ш �D ' N С7 Оч� 1� � i ы rn rn о,-а о ,р� м т гч м м,1 м � 2 С� � О V `? tт о N п а,-, п �t er .-, ву ш и1 о ш n, W N Ii -. ~! w� 'S '�' с] r'� +''� р' о и г�. N tЛ р �? �L Ш ф t� г.1 � �(} � 'S L� м 'Л О V N ц N Q' _ �`''-; и г,� гv о г� �а 4^,� rn в. �; _ и� `°- м ��=� Ш �' � � т1 � � �I 'у о R �� м �� rn о � м 6i N л о о Н � '��, Q'� r� �д rv� ry С+ гч гц л ra tЛ п N �Ii v � � II и �, � � � и � ® � п и � �, Н' � � � lFJ V` fV (� н О � � и и � � i'1i i О1 � р UJ +--4 тi. `�°�. .� � V' ' J � р I � (3 � Np � � , , е , е � � � , , � � � � й 4 L � � iA т N Р i1'1 и � Z� � � tD � tO � р р L н 09 V ,�, � м � м о:э b5 �7 О � L� , v � � � р � "' � -. ...... ... . . � � ,..., .-г � � , , � � м... � � � �' i м а= N �! ги`д �_ Q � � й � � � j � .� � t�м] � н п пм � .а-г .�-� i71 � I11 � n ev и и I а� - - с � � сп �� о rv о tG' ьQ �_ I� U � п�i, � м v ° м rч ���' �+�.+ � ......... � и - м � � г i II , � з гИч `� ги`г ~ `ч , --`"� а � U � Д �. . ... SЛ U� �О�д Q 4 � � � й � � � � р ,., ~ U I � у. -а v о н�г г� м и � ш ® _'Q � � Q�h N�� 4 � � rn � с � � n, �� н 1 N о R г��ъ h п�ч т п � i+П пв цэ...... F U Z с� м U, м, v г� r.i м т и v г` � з м `Т' 'т V: м п о .м м б� р}� м � Т�U t:�. м г� О ц} rJ и И цs ЕТ V ьG � � ,-1 � � [} Ci � � ~ � .ч л о � !�[ � Г°, м м fo lf5 М l!3 пР г1 [V � (v у. и} b д пг гц и н н N т �--I пi 'J h м р,. рр � т гч ,_.� � --в г�_ о т® � О и � ш � Н,� N �,; .-,, о, „� О м � ср N м н r+i ьа (,� а ,... м � vЭ 7� М р б О СЛ �fJ �} ьD М � � ct �'�? rn т,д, ш � и м г-�, ,� и са м s't п� `г .-ч ггi т с м ,_Nn. �� .-^-, N,ы О � � сА r+�j гN-` д' ц 47 д� сл � и N N СГ N sY ш 'Z � со' м� � р' п м � ^ м � м и � Q Q w '� � � � .i .-i � н 111 г"1 7 W и м � � � , .-, и � � � � н tO ' �б N 'Q V � G tV г`i Gfl т tl' .�-� Й � � � � � !1 � С w ai �' N' ��д га' о0 tr� м �О у, н 4i ar со °' м "' v и О � = � � О L` rt+ н .-, и7 � t0 н рр fi у 1.' .�_ а LL > � р ~ а1 ,,,, а v ��' н '"' и i. , � � ,� , ,д ,-, � п . т � � о, р . rц . , . � �. G гр й N п� р xs rv rn Gh м �р а� ._. � F, ,��, �. dV ц С рр т р о °S r 1� .-6 Т . ц1 � � ,,. м F- � � _� � -и�+ � гv й � й о й �s � Ч � � з� �; nvi4 и са аз � и �� �M1 �' . п г ш и и ©� F ^ � M1.д и N и м �_ �4 i' � � а � �`' �v � о ' Q е, �- гМ � �и о Ф � � � � т м � rnrn т � со .�а ,,`вр сра � _ � ._.. О й с у ео о� tvF r, .ч гч �га cv г� �у р � ._._ � . � ц1 вл цj � �vj 7 м и� о и п_ ri м � � U � ��и � �� г? т n � � N А 4 � г� 1r h N г-� � 01 н д., � �`'� у н Р w о� N�v д� о ef Ф L. � v ад м г.� сз7 т о о7 о` � и и г� � гр (j у�., м м пj ш. г�l д п �- �,®у r "'i м , 4.. �у м т о� й п м п м и . �,` � � I д0 -i а4 ч н н ��'i 1 � �� � � (Y � ....... . _ .... . ... _. . . и .. и 5 �.. � ш� � г i� � � аг �ъ ш __ � � �� д � v v у о L.� и �, � � О � �� � � �' � � � У v и � � с о � = e�i ш 4' а а- t6 � Q sn � С3 С ..�, .- t� Е с � '° n' G ц� ° а' � v � ci �. ^� 4л �-., ifi и о �. �� z � �. и И U� ш N г�'о � ггvл а р а�э i.7 V г�'�а в�i � Q � д1 о -с л в t- -о са -д '-' � и�_ � � ш ш 4 Q v го � iЛ ® L"J � и � �аэ � ш ъ © � ы �_ о � и � '�. .� а .� ш �, � `iC. N С М+Е R� рл и т vи ш� j й а R ш'° о г�в " 4П :°р ц5 бI �_ _�j � 3 г: `. �+ �',,:. ,.� �,� . г и � �� - а�; -о -� а� а= i � tз � со ,.�., м ш а�^ � � � � га � н � а ? � �. �� ГСi j " l3 w а' н н � /�`�j ,�5 �� }�С 1 �. � � С ш � � � � � т .� � ь. v .^ � Е � � � ш �о Z и 'о � �, � � U o �i fi СС сз ш а t v з s +л � у� �� Е;� � и, а.а й"' О v �' � i? е , О,�. р � ш � � 7 р а. н ъ � гв � ъ 4' б ъ у С3 ш х д1 ..� � и?,� � ��. �� �.F7 О .,� U � � � � ... ';�. �4 U С�� ❑ с� .д а о. о� П�. U. ш. . С� ... [С ... ш . Gi l? Й �� � � '-; . � -i i V гь � г� . 2' и� ly 1i ) г]) ---� lц _ � L ' U Ч- Z н,-i rv rt н ы г.� м � ал н� R�i го :++� / .�j � L_ Г_р 41 � � °�1 н а V `С' } � . .- � вW � ❑ �' I� � `-` - � CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT - GIA LAI PROVINCE FINANCIAL STATEMENTS Financing Agreement - Credit number Cr. 5330-VN For the year ended 31/12/2018 STATEMENT OF DESIGNATED ACCOUNT For the period: From 0110112018 to 3111212018 Account Number: 5000201005946 Depositary Bank.- Vietnam Bank for Agriculture and Rural Development - Gia Lai Branch Address: No. 25, Tang Bat Ho Street, Pleiku City, Gia Lai Province Financing Agreement: Credit number Cr. 5330-VN Currency: USD PART A: ACCOUNT ACTIVITIES Amount Opening balance (01/01/2018) 576,366.65 Add: 8,094,880.17 Total amount replenished by the World Bank to the Designated Account 8,094,810.17 for the year Returns of money transfer fees 70.00 Deduct: 7,998,082.75 Total amount withdrawn from the Designated Account 7,998,022,75 Total bank charges incurred for the year 60.00 Closing balance (31/12/2018) 673,164.07 PART B: ACCOUNT RECONCILIATION 1 Opening balance of advances by the World Bank 2,845,135.94 2 Add: Amount advanced by the World Bank to the Designated Account in 3,930,754.57 the year (Withdrawal application No. 28-GIA LAI, 3 I-GIA LAI and 34-GIA LAI) Deduct: Expenses accepted by the World Bank for disbursement by deducting 3 from Designated Account (Withdrawal application No. 27-GIA LAI, 29-GIA LAd and 3,276,309.15 35-GIA LAI) 4 Total advances to the Designated Account as at 31/12/2018 3,499,581.36 5 Closing balance of the Designated Account as at 31/12/2018 673,164.G7 Add: Amount claimed but not yet replenished by the World Bank 6 (withdrawal application No. 38-GIA LAI) 1,516,323.21 7 Add: Amount withdrawn but not yet claimed for reimbursement 1,310,047.27 8 Add: Bank charges (if not included in line 7 above) 46.81 9-Tot a[ advances to the Designated Account as at 31/12/2018 3,499,581-36 Ho PiTudc Tharth Truong Thi Nhung Director Chief Accountant/ Preparer Gia Lai, 18 lune 2019 The accompanying notes are an integral part of these financial statements � � и'з сг�' � � � � � II =_ _. �, �. � ° I о � `�! г `� v . � ш�' , , , , , , � j� '�' а н ri � t7 ^! ^ н 1� n с � в� �`..! и rv �ц о и �� � f+f И [р ,� ■ Fл1I у т � � т� т � И � о � м I L ni � �^, о эл ги �„у И rv �.а I а ^л �,р м г� �. т ,и о� в С L 41Ii w iU t�1 н н'J � а � р'� � С+ ..� � � н н rn L 7 09 С� �` i. � I qy в� с г� � а11 н � н н н � � ь'С.+ Q СО G7 � � dII, � С � � �` ш v' +' Сз о г�. � f� v с*� .-� р � , � � � �,, +'�'�.^ с�i- _п __ � I 3 С �i � � � С б д 1Л {(у rn н� w t0 .-4 ...� гВ Q1 _.---° 't .�и L'I 0 д о�i' � о r3 пС IП G � т � Z С � а о о �n И ;. т гх, и � s� п � � ��... S Е J д г~ R н �п � Су ��. � Z О а Q р г'Г, ,..� К'� цr� т �, О F- U L V( Ct П! д д О Ln � а' о�� CJ С � � � � ,т`,^ �' 05 � J- �- � С til � а 7 ц.. Vэ CS 'С W й� � Q� и '� С }„ L1 i .'� � � ц а х с4 с:, w, о ctr аз аз еа �з п �� � F t,1 i ++ н v-i .-1 иЧ н ,-k .-1 н .-Э '(� з т о О о о О С7 о : д rJ О о сп р 0 ^а "-v -v п: �v rv r+i гv -v гv Ш у� � � \ ti. L \ •� \ -, � �. < < � О с н s.@ н н О н n; , Г"1 N н С �'' Q ^ '° н о : ^� ^ .. "� .1 д � Q � � � -�. v -�. -,. \ а \ -.. с_ L1 н г�,} � и' tn д tГ н о t� CL О � ы N (V н н.г� н N д �- � � о с ш � � Q 3 о � w .� � �"'� д.. а а ч � ч � о � т.--! Q � и гti !� н 4D 4р L"~ � П7 tЛ � Г'} � И., U� т м..-� t$у О �^. и гv [+1 G1 �� СО С � � �'.�... С са rn ;�г �rj � о н т ct r9�� N h г� о+`� °р � Q lL '' �.., f0 у� t� д СО И `� ц1 С L^ N f+I i4 +� � и � С �^� L>� н т �л о pi г-� rv г� м tG и7 сз � о ач �� н .. � .''�'- у..'Я а � tJ М С Na .� н и? С iЛ Т7 .�. `S � у 4�г о с-� �^, �'а+ rn v rv ,� N цi С n� � � !' J � ,` �., � �t СЛ � U н ,-, ы'Л V) =� ��. И а �°' � Q1 � `.'•�-�� Q ш �`„ � н н � � ,� ., н M1 � � ш � ?� L � � � ��� � � н и � � �: рр � � � +-� � -.:. С7 ��' �го � ш�� I.� i Ц! � ц Q� й � � � а J D t` н др � S] i � Ci ��] с� � �1.��� � F � v � � � � е � � � / () � Q� V о О и7 гv��� ,�] ` ш i Е' � 0 = о д� м � _ ` n С7 � и С � � ©� j � �� о о � м ^ а n rл ш г� ,� ,. ,' � t о _ v м г и И � � I'i � д �n v гv � � � Й ^ � � Ш о � � � М1 д т и эл � 3 � с L� а � � �� 1 N н И И И ��. � � t7 Г�3 ��I� � �� � � II � �L �а в� =° �I о. � � 0 � х С� �, � С ;� = ш�' � � �` а�'т �� 1I с�т, �� I С д С� � G = д�] с т д д` д � � Q� ш � ��. * � iЛ U} t17 U1 � lfi И lП И U] UF iЛ q N Ш sa '� � Н у! �„�� �� ®� � з п з � С С � z � � Q _ ш`С И U � й о с с с� � го ? i о �у G � о о г� � а, � i7 i+ д=л :ы С '� р�. � й �� т со се � со � т � г� т� о гв га го о гц -i н н н н н,-i у� н н.-i ыi и� �� И � 1� � i% О о О о � д Ct С7 С7 р О �J' Q f3 i1 � 91 � �[,' а а N N N N � i'4 N N �' N N N N Q�у �.и "�"'' ц i+ \ \ \ О CI1 \ \ \ .%i \ \ \ 1 � '� Q� а G С н Z н.-�-i � �. �.-� '6 н О н н � Q Q Q *-i С ti о \\, а h\. е fe! ы\�.. \ f6 (6 г0 q '�Л � � а � � т rv �i in б н � г� +� оз о ш �t ��� Q � N д � 4) � И н д N N О С1 н ("1 Q N П} гg гО д = � �, � L � р �' U йй-о с, � �',� � � � = Q "� С Q а 4 � Q С Q � < Q с а � r.С � � �"' '� Q � у уа, J J J J � J J J и � � J J +-, +1 .,� .. �. � �, �i Q3 � а� а Q а¢� и д�t д а а¢ а¢ �� -г' �..�'� 5'. `1i � �.^� •. Q ту о ■ а �' � г с � � l7 tз � :7 �7 са � С7 l7 l7 l7 ' - ';- � �+ �� � Z[Q' ' w н v о а rч т �:7 а г- с5 и аа � , г.- '�', �N т v U iв_ � rv м rз � � т т м ш г� rv т м ���'� - �� �Z} > tЭ С� k�- � '� � � CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT - GIA LAI PROVINCE FINANCIAL STATEMENTS Financing Agreement - Credit number Cr. 5330-VN For the year ended 31/12/2018 NOTES TO THE FINANCIAL STATEMENTS (These notes are an integral part of and should be read in con]unction with the accompanying financfal statements) 1. GENERAL INFORMATION The Central Highlands Poverty Reduction Project operates under Financing Agreement - Credit number Cr. 5330-VN dated 24 April 2014 signed between the Socialist Republic of Vietnam and the International Development Association ("IDA"). The objective of the Central Highlands Poverty Reduction Project is to improve living standards through improved livelihood opportunities for poor communes in the project area by improving infrastructure systems and communal villages and hamlets; increased autonomy and livelihood opportunities through strengthening food security and nutrition, and promote diversification of livelihoods, developing market linkages; improve infrastructure conditions connected at the district level; staff capacity building at all levels, Total fund of the Central Highlands Poverty Reduction Project is USD 165,000,000. The Fund includes the State budget of the Government of Vietnam and ODA loans from the World Bank. The Project Management Unit of the Central Highlands Poverty Reduction Project - Gia Lai Province (the "Project Management Unit") was established under Decision No. 1089/QD-UBND dated 07 November 2013. The Project started its operations on 07 November 2013 (the establishment date of the Project Management Unit) and is expected to be completed in 2019. 2. ACCOUNTING CONVENTION AND FINANCIAL YEAR Accounting convention The accompanying financial statements, expressed in Vietnam Dong (VND), are prepared under the historical cost convention except for the Statement of Designated Account and the Statement of Withdrawals which are prepared in original currency. The financial statements are prepared in accordance with the accounting policies set out in Note 3 and the requirements of the World Bank. Financial year The Project's financial year begins on 01 lanuary and ends on 31 December. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies, which have been adopted by the Project Management Unit in the preparation of these financial statements, are as follows: Foreign currency translation Transactions arising in foreign currencies are translated into Vietnam Dong (VND) at exchange rates ruling on the transaction date. The balances of monetary items denominated in foreign currencies at the Balance Sheet date are retranslated at the December exchange rates announced by the Ministry of Finance. Foreign exchange differences are not cash flows. However, the effect of exchange rate changes is reported separately in the Statement of Sources and Uses of Funds in order to reconcile with balances of assets and liabilities in the Balance Sheet. Recognition of funds and expenditures Funds are recognised on the receipt of credit notes from the serving bank and the state treasury regarding the amount received. 10 CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT - GIA LAI PROVINCE FINANCIAL STATEMENTS Financing Agreement - Credit number Cr. 5330-VNFor the year ended 31/12/2018 NOTES TO THE FINANCIAL STATEMENTS (Continued) (These notes are an integral part of and should be read in conjunction with the accompanying financial statements) Expenditures are recognised on an accrual basis. 4. STATEMENT OF DESIGNATED ACCOUNT Designed Account is a deposit account in USD opened at Vietnam Bank for Agriculture and Rural Development - Gia Lai Branch to serve the Project's activities. Payments out of the Designated Account are made in accordance with the relevant covenants of Financing Agreement - Cred[t number Cr. 5330-VN and relevant regulations established by the World Bank. 5. CASH 31/12/2018 31/12/2017 VND VND Cash on hand 387 387 Gia Lai Provincial Project Management Unit 387 387 Cash in bank 15,460,815,703 13,247,699,618 Gia Lai Provincial Project Management Unit 15,305,578,361 12,940,007,210 Ia Pa District Project Management Unit 93,757,721 227,699,451 Krong Pa District Project Management Unit 1,390,593 2,874,908 Mang Yang District Project Management Unit 42,011,670 55,777,076 Kong Chro District Project Management Unit 5,602,779 7,787,707 Kbang District Project Management Unit 12,474,579 13,553,266 Cash in treasury - 20,553,179 Kong Chro District Project Management Unit 20,553,179 15,460,816,090 13,268,253,184 6. PREPAYMENTS TO SUPPLIERS 31/12/2018 31112/2017 VND VND Krong Pa District Project Management Unit 2,766,259,000 3,623,428,000 2,766,259,000 3,623,428,000 7. PAYABLES TO SUPPLIERS 31/1212018 31/12/2017 VND VND Gia Lai Provincial Project Management Unit 3,575,040 3,575,040 Ia Pa District Project Management Unit 6,579,464,756 1,112,168,000 Krong Pa District Project Management Unit 11,700,583,000 Mang Yang District Project Management Unit 7,143,290,830 1,906,994,734 Kong Chro District Project Management Unit 3,464,102,000 1,455,793,000 Kbang District Project Management Unit 3,619,931,000 456,000 32,510,946,626 4,478,986,774 11 U U CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT - GIA LAI PROVINCE FINANCIAL STATEMENTS W Financing Agreement - Credit number Cr. 5330-VN For the year ended 31/12/2018 NOTES TO THE FINANCIAL STATEMENTS (Continued) (These notes are an integral part of and should be read in conjunction with the accompanying financial statements) W 8. OTHER PAYABLES 31/12/2018 31/12/2017 VND VND Bank interest 40,148,257 45,666,113 Gia Lai Provincial Project Management Unit 4,559,050 - Ia Pa District Project Management Unit 7,748,421 10,333,890 Krong Pa District Project Management Unit 1,390,593 2,874,908 Mang Yang District Project Management Unit 8,436,136 11,572,342 Kong Chro District Project Management Unit 5,602,779 7,787,707 Kbang District Project Management Unit 12,411,278 13,097,266 40,148,257 45,666,113 9. IDA FUNDS 2018 Accumulated to 31 December 2018 USD VND equivalent USD VND equivalent Added to the Designated Account 8,094,810.17 183,387,655,804 20,791,967.26 464,971,244,493 Fund disbursed by fixed assets 198,049.59 4,331,000,000 8,094,810.17 183,387,655,804 20,990,016.85 469,302,244,493 10. COMPARATIVE FIGURES Comparative figures are the figures of the Project's audited financial statements for the year F , -de-1 December 2017. Ho Phuoc Thanh Truong Thi Nhung Director Chief Accountant/ Preparer Gia Lai, 18 June 2019 12 U U U U U U U U U U PART II U INDEPENDENT AUDITORS' ASSURANCE REPORT ON * INTERNAL CONTROL * ;C N U * ~ U U U U U U * U U U U U U U U U U U U Deloitte Vietnam Company Ltd. OsthFloor, Vinaconex Tower, SD elo itte 34 Lang Ha Street, Lang Ha Ward, Dong Da District, Hanoi, Vietnam Tel :+84 24 6288 3568 Fax:+84 24 6288 5678 Website: www.deloitte.com/vn INDEPENDENT AUDITORS' ASSURANCE REPORT ON INTERNAL CONTROL To: The Project Management Unit of the Central Highlands Poverty Reduction Project - Gia Lai Province Report on internal control We have audited, in accordance with International Standards on Auditing, the financial statements of the Central Highlands Poverty Reduction Project - Gia Lai Province (the "Project") for the year ended 31 December 2018 and issued the Independent auditors' report thereon dated 18 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 Project Management Unit As stated in the Statement of the Project Management Unit on page 2, the Project Management Unit is responsible for designing and maintaining effective internal control over compliance with requirements that could have a direct and material financial effect on the 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. 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 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 evatuating 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 deteri orate. Deloite reers to one or more of Deloitte Touche Tohmatsu Ltd., a UK private company limited by guarantee ("DTTL"), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as "Deloitte Global") does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms, 13 Deloitte INDEPENDENT AUDITORS' 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 18 to page 24. Opinion In our opinion, the 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 Project's financial statements as well as internal control over financial reporting for the year ended 31 December 2018. Vu Duc Nguyen Nguyen Tien Quoc Deputy General Director Auditor Audit Practising Registration Certificate Audit Practising Registration Certificate No. 0764-2018-001-1 No. 3008-2019-001-1 DELOITTE VIETNAM COMPANY LIMITED 18 June 2019 Hanoi, S.R. Vietnam 14 U U U U PATUI U NEEDN UIOS SUAC EOTO COPIAC U U CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT - GIA LAI PROVINCE Financing Agreement - Credit number Cr. 5330-VN * STATEMENT OF THE PROJECT MANAGEMENT UNIT ON COMPLIANCE The Project Management Unit is responsible for complying with Financing Agreement - Credit number Cr. 5330-VN, laws and regulations applicable to the Project. The Project Management Unit confirms the following: * An effective internal control has been designed and maintained over compliance with Financing Agreement - Credit number Cr. 5330-VN, laws and regulations applicable to the Project; * The Project has complied with Financing Agreement - Credit number Cr. 5330-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 - Credit number Cr. 5330-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 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 purpose(s) of the Project. Fo. andon behalf of the Project Management Unit, HPhuoc Thanh Director Gia Lai, 18 June 2019 U A15 Deloitte Vietnam Company Ltd. 15thFiloor, Vinaconex Tower, SD elo itte 34 Lang Ha Street, Lang Ha Ward, Dong Da District, Hanoi, Vietnam Tel :+84 24 6288 3568 Fax:+84 24 6288 5678 Website: www.deloitte.com/vn INDEPENDENT AUDITORS' ASSURANCE REPORT ON COMPLIANCE To: The Project Management Unit of the Central Highlands Poverty Reduction Project - Gia Lai Province Report on Compliance We have audited, in accordance with International Standards on Auditing, the financial statements of the Central Highlands Poverty Reduction Project - Gia Lai Province (the "Project") for the year ended 31 December 2018 and issued the Independent auditors' report thereon dated 18 June 2019 expressing an unmodified opinion on those financial statements. In connection with the audit of the financial statements, we also performed procedures on the Project's compliance with Financing Agreement - Credit number Cr. 5330-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 "requirements"). Responsibilities of Project Management Unit The Project Management Unit is responsible for complying with Financing Agreement - Credit number Cr. 5330-VN, laws and regulations applicable to the Project. 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 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. Auditors' 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 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. 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 18 to page 24. U Deloitte refers to one or more of Deloitte Touche Tohmatsu Ltd., a UK private company limited by gUarantee ("DTTL"), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as "Deloitte Global") does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms. 16 U Deloitte INDEPENDENT AUDITOR'S ASSURANCE REPORT ON COMPLIANCE (Continued) Opinion In our opinion: * The Project has complied, in all material respects, with Financing Agreement - Credit number Cr. 5330-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 - Credit number Cr. 5330-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 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 purpose(s) of the Project. Vu Duc Nguyen Nguyen Tien Quoc Deputy General Director Auditor Audit Practising Registration Certificate Audit Practising Registration Certificate No. 0764-2018-001-1 No. 3008-2019-001-1 DELOITTE VIETNAM COMPANY LIMITED 18 June 2019 Hanoi, S.R. Vietnam 17 U