―。e■긱TS &: MINISTRY OF PLANNING AND INVESTMENT CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT Financing Agreement - Credit number Cr. 5330-VN TABLE OF CONTENTS CONTENTS PAGE(S) PARTI FINANCIAL STATEMENTS Statement of the Central Project Coordination Office 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 Accounts 8 Statement of Withdrawals 9-12 Notes to the financial statements 13 -17 PARTII REPORT OF INDEPENDENT AUDITORS ON INTERNAL CONTROL is PART III INDEPENDENT ASSURANCE REPORT ON COMPLIANCE 19 PARTIV MANAGEMENT LETTER 20-40 l. -, ―■ 一■ 一• 一■ . . . ■ . • ■ PARTI • .FINANCIALSTATE間ENTS • . ■ • , . . • . • . . . ■ . ■ ■ ■ ■ MINISTRY OF PLANNING AND INVESTMENT CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT Financial Agreement - Credit number Cr. 5330-VN STATEMENT OF THE CENTRAL PROJECT COORDINATION OFFICE The Central Project Coordination Office of the Central Highlands Poverty Reduction Project (the "Central Project Coordination Office" or "CPO") presents this report together with the financial statements of the Central Highlands Poverty Reduction Project (the "Project") for the year ended 31 December 2017. The Central Proiect Coordination Office The members of the Central Project Coordination Office who held office during the year and to the date of this report are as follows: Mr. Tran Ngoc Hung Director Mr. Do Thanh Trung Deputy Director Ms. Dao Thi Hong Lien Chief Accountant The Central Proiect Coordination Office's Statement of Responsibility The Central Project Coordination Office is responsible for preparing the financial statements of the Project, which comprise the Balance Sheet as at 31 December 2017, the Statement of Incomes and Expenditures, Statement of Sources and Uses of Funds, Statement of Designated Accounts, 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 as at 31 December 2017 as well as of the incomes and expenditures, receipts and disbursements of the Project for the year, 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 Central Project Coordination Office is required to: Select suitable accounting policies and then apply them consistently; 0 Make judgments and estimates that are reasonable and prudent; 0 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 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 Coordination Office 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 Coordination Office 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 Central Project Coordination Office 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 Pr)* --t-C-0ord'nation Office confirms that they have complied with the above requirements in preparii e nanci statements. ng ( 5,e -fi 0 , I 6' t ntr Project Coordination Office, For and o Cb e dWlc g e5 LAN TRUNG LfONG A JNG L D ti A "i t4 AN GIAM NGHEO r P D L b t' U TA r 0 11KHU V C TAY 14G Y rf \ 201' - Tran Ngoc Hzhit * Director Hanoi, 20 lune 2017 2 Deloitte Vietnam Company Ltd. 15thFloor, Vinaconex Tower, 34 Lang Ha Street, Lang Ha Ward, Dong Da District, Hanoi, Vietnam Tel :+84 24 6288 3568 Fax:+84 24 6288 5678 No.: /VN1A-HN-BC Website: www.deloitte.com/vn INDEPENDENT AUDITORS' REPORT To: The Central Project Coordination Office of the Central Highlands Poverty Reduction Project Opinion We have audited the financial statements of the Central Highlands Poverty Reduction Project (the "Project") prepared on 20 June 2018, as set out from page 05 to page 17, which comprise the Balance Sheet as at 31 December 2017, the Statement of Incomes and Expenditures, Statement of Sources and Uses of Funds, Statement of Designated Accounts, 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 as at 31 December 2017 as well as of its incomes and expenditures, receipts and disbursements for the year then ended in accordance with the accounting convention and the accounting policies set out in Note 2 and the Note 3 of the Notes to the financial statements. * The Statement of Designated Accounts gives a true and fair view of the balances of the Designated Accounts as at 31 December 2017 and the Project's receipts and disbursements via the designated accounts for the year then ended 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 reconciled to the statements of expenditures (SOEs) prepared by the Central Project Coordination Office and Project Management Units for the year ended 31 December 2017 and those SOEs were adequately supported. 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. As a result, the financial statements may not be suitable for another purpose. Our opinion is not modified in respect of this matter. Responsibilities of the Central Project Coordination Office and those charged with governance for the Financial Statements The Central Project Coordination Office is responsible for the preparation of these 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 Coordination Office determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. U n 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 n 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. n 3 Deloitte INDEPENDENT AUDITORS' REPORT (Continued) 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. 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 Coordination Office'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 and related disclosures made by the Central Project Coordination Office. We communicate with those charge with governance and the Central Project Coordination Office 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. khuc Thi Lan Anh Nguye nh Tuan Deputy General Director Audito Audit Practising Registration Certificate Audit ractising Registration Certificate No. 0036-2018-001-1 No. 1472-2018-001-1 DELOITTE VIETNAM COMPANY LIMITED 20 June 2017 Hanoi, S.R. Vietnam 4 MINISTRY OF PLANNING AND INVESTMENT CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT FINANCIAL STATEMENTS Financing Agreement - Credit number Cr. 5330-VN For the year ended 31/12/2017 BALANCE SHEET As at 31 December 2017 ASSETS Notes 31/12/2017 31/12/2016 VND VND Current assets 98,493,357,965 91,667,393,393 Cash 5 81,554,574,161 76,627,362,039 Cash on hand 210,458,517 115,023,982 Cash in bank 80,078,669,244 75,700,921,183 Cash in state treasury 1,265,446,400 811,416,874 Receivables 16,938,783,804 15,040,031,354 Prepayments to suppliers 6 16,824,202,399 15,009,936,100 Other receivables 7 114,581,405 30,095,254 Total assets 98,493,357,965 91,667,393,393 LIABILITIES Current liabilities 191,838,852,312 101,695,236,519 Payables to suppliers 8 189,531,402,485 99,872,519,829 Tax and amount payables to State budget 42,376,700 36,119,899 Payables to employees 1,055,315,721 84,145,654 Other payables 9 1,209,757,406 1,702,451,137 Total liabilities 191,838,852,312 101,695,236,519 NET ASSETS (93,345,494,347) (10,027,843,126) Exchange differences 22,630,835,490 12,029,390,182 (Deficit) of incomes over expenditures (115,976,329,837) (22,057,233,308) (93,345,494,3 0,027,843,126) Vo Trinh Vinh Dao Thi Hong Lien Tran N-oc Hung Preparer Chief Accountant Director Hanoi, 20 June 2017 The accompanying notes are an integral part of these financial statements I 5 MINISTRY OF PLANNING AND INVESTMENT CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT FINANCIAL STATEMENTS Financing Agreement - Credit number Cr. 5330-VN For the year ended 31/12/2017 STATEMENT OF INCOMES AND EXPENDITURES For the year ended 31 December 2017 Accumulated to Year 2017 31/12/2017 VND VND INCOMES IDA funds 10 737,394,941,859 1,354,677,830,658 Counterpart funds 32,538,242,301 103,750,460,745 Other funds 414,975,144 2,327,526,756 TOTAL INCOMES 770,348,159,304 1,460,755,818,159 EXPENDITURES Part I: Village and commune infrastructure development 309,233,598,954 502,014,876,934 Part II: Sustainable livelihoods development 188,434,608,738 347,970,507,552 Part III: Connective infrastructure development, capacity 276,760,589,839 471,943,285,671 building, and communications Part IV: Project management 89,357,704,282 253,993,488,538 Others (Bank charges) 480,754,020 809,989,301 TOTAL EXPENDITURES 864,267,255,833 1,576,732,147,996 SURPLUS/(DEFICIT) OF INCOMES OVER EXPENDITURES (93,919,09 115,976,329,837) Vo~~~ ~~3 Trin Vin Da Thi Hon Lie TrnNoun /DUANTHUNG&c 'DU N GIA M NGP Vo Trinh Vinh Dao Thi Hong Lien Tran Ngoc Hungv Preparer Chief Accountant Director Hanoi, 20 June 2017 The accompanying notes are an integral part of these financial statements U6 � ■ и 1� � R rn и и и ^ .-, о г� �о .-. rv о � N .-� � F� г1 � о ,.и.� й � � � т .�-� п^�i +чт о м � � �г о� ■ Z О � F-- �р о о й � � о ш .-� rn � й ,у v т N W N ^' � v й ° й `� w � о�, '•' т и +,�i й� �\ i ° r; о г� � � v г� w т � о N � v°J ш N � й г� и � ti � rn о � о v ш � iи °� й ■ и � г� м о N о� .-� .� F" ri � ^ � `ч � °� н w r о `� � а\ о_ о '+ о м оо пi .-а т и о v v и оо � � � � н . и м н , н й п й , , � � � � � °о ш n � � � ■ t� н �о и О о U о ^ � ^ ш rn ai � а �r-'_",-'-_.�..� о г Ф о N � � о н rrv rv !� �.� - _ а L N � _ м н и �---- � � � `n � � гv rn rn ,�'' �' �у ' � U . г Ф л � м `"' м `�" ^ `^мJ ^ ` а ш � О �"� � Е н `�' н � :+:' о r� s_, � т L � Ф � � � � � _ � \'�+ о � S о , , , , . �� �.� х ;.н��,с � з � г aVi � �"� .О � д' N Q� � М М N � � С°'} о L L м с г� � г� и г� - с? _ -- L О S .�' о о � � м г� й а �� г���','� � F' С ■ � -о � v v_ г°,� rn_ � й ^ N � � � `_ � г � �' Q, �' .ь�+ � О о м � Гч м 1� 1� � `'� �� у / i° °' и � N °г� т со iO N N � _' ��. � � ш` ^ М v � м м Э�� � Е с мо о � rn v v _ / й р н а `'' ■ и ор о� � � N w о и и � ао о � �о v и и н N v г� v � и м с ао ш р� о v г� v rv � ■ и м о � � ° и а� ° м N а ° о� ^ ш rn rn о т а, � 0 � � й м v и N о N ^ о N мо rn rn о и мш о_о г ^ ■ � v ~ о о � � со- � п`�i � �� и м о д- v и ^ � � м м `tь LL ti '� '' ■ и N � д' rn .-ч v [V т г� и и г� т rV tV ш о и о � ор v " т г� и оо о н и . � р м т м р� о о� v о и ^ м N рр -О F- �.ч п? й � г� � й v v � �п п ,..i � ■ _ � и v v г� � и и м и о с rn и н rn г� и N ш со и v � р� с ар N v т н v и пi rn о о Q U v м и v о ш N и �� � ° N ^ ' ■ � м 1� N ° и М и О <{ О м � О М М и � Оз ifJ Ш К1 н г о ^ � ^ � � V ^ � а � ^ ^ _ , и о _ш = г\ � м , , , , , , .� � , . � ;' - U � с н � й й о о J,� � Ш w ьл � г� � v v р1 = . ^ и O1 т й n = 3 И � � � н � Й � rn rn ° о с � Ш � � v � v v г^� = v Ш � и L � ш `� � sa v О � о F� ь� +., N и н � � ор м � � rn.-� м � о м О� � ■ � -С ш с °м � �_ � w о°о й v о , f0 S И г �.' 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Q= т � � г ° а � � v � � 1° а °' а - с `° °+ а а т fO С L N_ Ov И� V i о, � а rn � ° � с о' т � -- .. -- ��,, 's� fG . U � М i� С !O ¢ и с i а с �о т ;° `° с т п-�° ш о ° v� � о Е- С' О� Z Z � о � 'о � с ���� i°- � й ~ о а� о � с� а а а и- Ф� QJ �"� Ш= ш v � й й а Q ° а - - � � - - О а' г0 -С � U ti. о � � а и а о а с � а.: � м � и и п и о; � д Т f- � ■ � MMMMMMNNM N MENEM MMMMMMMMMMMNMMMMMMM MINISTRY OF PLANNING AND INVESTMENT CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT FINANCIAL STATEMENTS Financing Agreement - Credit number Cr. 5330-VN For the year ended 31/12/2017 STATEMENT OF WITHDRAWALS For the year ended to 31 December 2017 Withdrawal Application Amount claimed Amount disbursed No. Date Currency Advance Advance Total Date Amount Difference Note clearance Designated Account Advanced to Designated Account tb CPO-17 17/01/2017 USD 1,000,000.00 1,000,000.00 24/01/2017 1,000,000.00 - CPO-21 18/12/2017 USD 500,000.00 500,000.00 28/12/2017 500,000.00 - 1,500,000.00 21 - QUANG NAM 24/02/2017 USD 363,060.46 363,060,46 10/3/2017 363,060.46 - 25 - QUANG NAM 16/6/2017 USD 348,531.32 348,531.32 19/6/2017 348,531.32 - 711,591.78 22-GIA LAI 29/5/2017 USD 1,700,000.00 1,700,000.00 15/6/2017 1,700,000.00 - 26-GIA LAI 01/12/2017 USD 558,000.00 558,000.00 21/12/2017 558,000.00 - 2,258,000.00 15 - QUANG NGAI 20/02/2017 USD 400,000.00 400,000.00 03/3/2017 400,000.00 - 19 - QUANG NGAI 02/6/2017 USD 1,300,000.00 1,300,000.00 15/6/2017 1,300,000.00 - 1,700,000.00 17-KON TUM 05/01/2017 USD 1,173,588.89 1,173,588.89 23/01/2017 1,173,588.89 - 20-KON TUM 24/4/2017 USD 498,661.26 498,661.26 16/5/2017 498,661.26 - 1,672,250.15 18-DAKLAK 26/12/2016 USD 1,400,000.00 1,400,000.00 10/01/2017 1,400,000.00 - 22-DAKLAK 06/6/2017 USD 1,432,554.73 1,432,554.73 14/6/2017 1,432,554.73 - 2,832,554.73 20-DAK NONG 09/01/2017 USD 73,000.00 73,000.00 23/01/2017 73,000.00 - 23-DAK NONG 13/02/2017 USD 1,000,000.00 1,000,000.00 22/02/2017 1,000,000.00 - 26-DAK NONG 01/6/2017 USD 885,000.00 885,000.00 13/6/2017 885,000.00 - 30-DAK NONG 29/12/2017 USD 446,846.00 446,846.00 - 446,846.00 1,958,000.00 USD 13,079,242.66 13,079,242.66 12,632,396.66 446,846.00 The accompanying notes are an integral part of these financial statements 9 MINISTRY OF PLANNING AND INVESTMENT CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT FINANCIAL STATEMENTS Financing Agreement - Credit number Cr. 5330-VN For the year ended 31/12/2017 STATEMENT OF WITHDRAWALS (Continued) For the year ended 31 December 2017 Withdrawal Application Amount claimed Amount disbursed No. Date Currency Advance Advance Total Date Amount Difference Note clearance Replenished to Designated Account CPO-18 10/3/2017 USD - 531,341.84 531,341.84 24/3/2017 531,341.84 - 531,341.84 19-GIA LAI 28/02/2017 USD - 762,319.17 762,319.17 13/3/2017 762,319.17 - 20-GIA LAI 20/4/2017 USD - 431,251.97 431,251.97 27/4/2017 431,251.97 - 21-GIA LAI 05/5/2017 USD - 881,165.95 881,165.95 16/5/2017 881,165.95 - 23-GIA LAI 16/6/2017 USD - 1,344,904.16 1,344,904.16 21/6/2017 1,344,904.16 - 24-GIA LAI 17/7/2017 USD - 1,240,111.57 1,240,111.57 01/9/2017 1,240,111.57 - 4,659,752.82 22 - QUANG NAM 28/02/2017 USD - 376,596.45 376,596.45 10/3/2017 376,596.45 - 23 - QUANG NAM 17/4/2017 USD - 298,890.74 298,890.74 08/5/2017 298,890.74 - 26 - QUANG NAM 15/6/2017 USD - 304,905.81 304,905.81 29/6/2017 304,905.81 - 27 - QUANG NAM 09/7/2017 USD - 331,579.66 331,579.66 09/8/2017 331,579.66 - 28 - QUANG NAM 25/9/2017 USD - 428,260.79 428,260.79 07/11/2017 428,260.79 - 29 - QUANG NAM 30/10/2017 USD - 412,022.81 412,022.81 30/11/2017 412,022.81 - 2,152,256.26 16 - QUANG NGAI 11/4/2017 USD - 221,382.79 221,382.79 25/4/2017 221,382.79 - 17 - QUANG NGAI 29/5/2017 USD - 317,549.68 317,549.68 05/6/2017 317,549.68 - 18 - QUANG NGAI 30/5/2017 USD - 606,763.11 606,763.11 07/6/2017 606,763.11 - 20 - QUANG NGAI 31/8/2017 USD - 592,741.81 592,741.81 18/9/2017 592,741.81 - 1,738,437.39 16-KON TUM 03/01/2017 USD - 480,739.14 480,739.14 23/01/2017 480,739.14 - 19-KON TUM 24/4/2017 USD - 581,730.56 581,730.56 08/5/2017 581,730.56 - 21-KON TUM 13/7/2017 USD - 100,170.33 100,170.33 08/8/2017 - 100,170.33 (iii) 22-KON TUM 14/8/2017 USD - 665,304.43 665,304.43 24/8/2017 665,304.43 (iii) 23-KON TUM 11/9/2017 USD - 821,382.42 821,382.42 06/10/2017 1,586,857.18 (765,474.76) (iii) 24-KON TUM 18/12/2017 USD - 221,924.38 221,924.38 - 221,924.38 (i) 25-KON TUM 18/12/2017 USD - 509,213.87 509,213.87 - 509,213.87 (i) 2,649,326.88 The accompanying notes are an integral part of these financial statements 10 MINISTRY OF PLANNING AND INVESTMENT CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT FINANCIAL STATEMENTS Financing Agreement - Credit number Cr. 5330-VN For the year ended 31/12/2017 STATEMENT OF WITHDRAWALS (Continued) For the year ended 31 December 2017 Withdrawal Application Amount claimed Amount disbursed Advance No. Date Currency Advance Arance Total Date Amount Difference Note clearance Replenished to Designated Account (continued) 20-DAKLAK 07/3/2017 USD - 1,668,342.38 1,668,342.38 09/3/2017 1,668,342.38 - 21-DAKLAK 12/4/2017 USD - 673,128.46 673,128.46 08/5/2017 673,128.46 - 23-DAKLAK 06/6/2017 USD - 794,442.66 794,442.66 15/6/2017 794,442.66 - 25-DAKLAK 30/8/2017 USD - 1,440,028.67 1,440,028.67 01/9/2017 1,440,028.67 - 26-DAKLAK 03/11/2017 USD - 3,039,008.63 3,039,008.63 09/11/2017 3,039,008.63 - 27-DAKLAK 07/12/2017 USD - 1,261,199.47 1,261,199.47 - 1,261,199.47 (i) 7,614,950.80 19-DAK NONG 20/12/2016 USD - 250,735.65 250,735.65 11/01/2017 250,735.65 - 22-DAK NONG 10/02/2017 USD - 492,302.65 492,302.65 09/3/2017 492,302.65 - 24-DAK NONG 07/3/2017 USD - 292,393.11 292,393.11 22/3/2017 292,393.11 - 27-DAK NONG 31/5/2017 USD - 516,260.31 516,260.31 05/6/2017 516,260.31 - 1,551,691.72 USD - 22,890,095.43 22,890,095.43 20,897,757.71 1,992,337.72 Expenses accepted by World Bank for disbursement by deducting from Designated Account CPO-16 17/01/2017 USD - 122,412.99 122,412.99 25/01/2017 - 122,412.99 (ii) CPO-19 24/7/2017 USD - 466,478.26 466,478,26 8/9/2017 - 466,478.26 (ii) CPO-20 18/12/2017 USD - 433,426.72 433,426.72 - 433,426.72 (ii) 1,022,317.97 21- QUANG NGAI 30/11/2017 USD - 690,808.62 690,808.62 21/12/2017 - 690,808.62 (ii) 22- QUANG NGAI 20/12/2017 USD - 399,762.60 399,762.60 - 399,762.60 (ii) 1,090,571.22 20 - QUANG NAM 22/02/2017 USD - 363,060.46 363,060.46 24/02/2017 - 363,060.46 (ii) 24 - QUANG NAM 9/6/2017 USD - 348,531.32 348,531.32 16/6/2017 - 348,531.32 (ii) 30 - QUANG NAM 19/12/2017 USD - 408,252.18 408,252.18 29/12/2017 - 408,252.18 (ii) 31 - QUANG NAM 26/12/2017 USD - 310,564.63 310,564.63 - 310,564.63 (ii) 1,430,408.59 25-GIA LAI 03/11/2017 USD - 1,212,864.06 1,212,864.06 06/11/2017 - 1,212,864.06 (ii) 27-GIA LAI 18/12/2017 USD - 1,193,351.06 1,193,351.06 - 1,193,351.06 (ii) 2,406,215.12 18-KON TUM 09/02/2017 USD - 498,661.26 498,661,26 13/3/2017 - 498,661.26 (ii) 498,661.26 The accompanying notes are an integral part of these financial statements 11 1H' ■ � и� � L � !- +-� ш � о м Z О о = _ _ - - - �, `� N � ш г� г .� .� ._.. �.. � � _ -о � � о, aJ о ш N 'й Q z �i ■ Q\ � v м о й й 00 р� с т-� и V о V% м д й м гNV н O�i м � � г6 г�'6 ■ �"� � и ш .-� о ,-+ о � .ь� о с� а Ф у г.i и м й й п� s- '� � м N г� со и г� �о � Ш i2 U= � v г� м о� v м � О � С1 � г Ф ''_ � О � (,� / � -v , !� G1 L � ,,..i 01 f а� � z i`B ":� о�. з ■ 1~L � � ��..з Rч;з _s`з т __ % � _ Ф � �..` = гз `� t' V _ _ � � � � � � � � ; � � � А ° ` р L � ++ 7 -р � S '�ш � � �,`_,z ; -э � О L о -о , ' �`� $ � �� Р' Z ++ о � � ���?�, =v � Q с6 N�,� �"г - 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' �.., �, �+ -а -а о � р�:ы "' � �� о г�'о а ш � с о � о � � � Q п � 'S '� �о � �` г� ^ v_ ±' с О U � т � о \ о о о Ly t� � Q о � C7 т .� � ,-� � � � � Q � � � г а � р � о и о v\ � т �+, Q н � � м � о rn о г� го ._ Т_ И И�,, о о ,-� о г� о м � 3�.р го ,а; го= 3 � �о3 � о � Q г � ° � ��� с г�о � с �, д ш �_ � ° � .�_ �:..�� о о, а и � �� ш�� `�' а � и.� L - а с и � t_ ш � еС� � с О � а � г � z z z z ����� z� > L � о, � а = 3 И Q Q о о о о �- F-Q-o1-� sФ ° о iII �•V i И У У У У У У �L (0 N U ►-+ F- _ � = LL О � � Z Z с6 +_+ ё. о о о о о � ~ Ф � Ш н W = х о� v .� iл т и .-. ^ - О i г0 � V LL � ш -ч ги гч гv п, c�l � � _, > а г � ■ � ■ MINISTRY OF PLANNING AND INVESTMENT CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT FINANCIAL STATEMENTS Financing Agreement - Credit number Cr. 5330-VN For the year ended 31/12/2017 NOTES TO THE FINANCIAL STATEMENTS These notes are an integral part of and should be read in conjunction with the accompanying financial statements 1. GENERAL INFORMATION The Central Highlands Poverty Reduction Project (the "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"). With the support from the World Bank ("WB"), the Government of Vietnam has been implementing the Central Highlands Poverty Reduction Project (GNTN) in the form of a community driven development project in the Central and Highlands Region of Vietnam. The Project focuses on 130 communes in 26 poor districts of 6 provinces which are Dak Lak, Dak Nong, Gia Lai, Kon Turn, Quang Nam and Quang Ngai. The development objective of the Project is to improve livelihood opportunities for poor households and communities in the Central and Highlands of Vietnam through: (i) improve accessibility to basic services in community level, particularly concerning agricultural production and income increase; (ii) resolve difficulties in approach to natural resources and market opportunities; and (iii) provide investment support for local (district level and below) to strengthen linkages. 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 includes four parts: 0 Part 1: Development of communal and village infrastructure, with a total value estimated at USD 45 million from World Bank's borrowing fund (or 85% of borrowing amount, equivalent to VND 945 billion), consisting of two subparts: (i) Development of communal and village infrastructure, (ii) Operation and maintenance. The Project decentralizes commune as an investor for the sub-projects in this part and discourages infrastructure works requiring land acquisition and land clearance. The sub-projects will be selected through the planning process with the participation of the community. 0 Part 2: Sustainable livelihoods development, with a total value estimated at USD 30.24 million from World Bank's borrowing fund (or 85% of borrowing amount, equivalent to VND 635 billion) consisting 02 subparts: (i) Autonomy and income diversification and (ii) market linkages development. The sub-project of Autonomy and income diversification includes activities which are strengthening food security & nutrition, and income diversification for beneficiaries by improving and promoting the livelihood models. The sub-project of market linkages development includes activities focus on the development of market linkages for some potential livelihoods modes, advancing partner relationship between farmers and enterprises through the project's supports. The Project's supports for the people in this part are done through support forms for livelihood enhancement group (LEG), including: (i) LEG of food security, (ii) LEG of livelihood diversity, (iii) LEG of market linkages. Each LEG has scale of 10-20 households, founded on the basis of voluntary participation of member households. 0 Part 3: District-level connective infrastructure development, capacity building and communication, with a total estimated value of USD 44.2 million from World Bank's borrowing fund (or 85% of borrowing amount, equivalent to VND 928 billion), including 03 subparts: (i) district connective infrastructure development, (ii) capacity building, (iii) Communications. Capacity building at district level and connective infrastructure include the selection of inter-commune and district infrastructure which will support the inherent production connection and relate to local economic sectors. The part will also support district socio-economic integrated planning and technical capacity building for district staff to assist the planning and implementation of building infrastructure at communal level. 0 Part 4: Project Management, with a total estimated value of USD 8.4 million from World Bank's borrowing fund (or 85% of borrowing amount, equivalent to VND 176.4 billion) consists the basic objectives: (i) ensure the effective management of project activities is under the design and (ii) monitoring and evaluation system provides sufficient information on activities, results and impacts of the Project. 13 MINISTRY OF PLANNING AND INVESTMENT CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT FINANCIAL STATEMENTS Financing Agreement - Credit number Cr. 5330-VN For the year ended 31/12/2017 NOTES TO THE FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying financial statements 1. GENERAL INFORMATION (Continued) The Central Project Coordination Office was established under Decision No. 1618/QD-BKDT dated 05 November 2013 issued by the Ministry of Planning and Investment. Duties and authorities of the Central Coordination Project include: * Support leaders of the Ministry of Planning and Investment in direct contact with the World Bank and other relevant agencies to coordinate, implement and manage the Project. * Guide the provinces' project management units to manage and implement the Project. * Periodically report the results of the entire project to the World Bank, the Ministry of Planning and Investment, and the Ministry of Finance as required. The Project started its operations since the establishment of the Central Project Coordination Office and Province Project Management Units ("PPMU") and is expected to be completed in 2019. UO 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 Accounts 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. The financial statements were prepared on the basis of aggregation and offsetting of figures and internal transactions and balances of seven (07) Project implementing units, including the Central Project Coordination Office and Provincial Project Management Units (PPMUs) of Kon Tum, Gia Lai, Dak Lak, Dak Nong, Quang Nam and Quang Ngai. Financial year The Project's financial year begins on 01 January and ends on 31 December. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies, which have been adopted by the Central Project Coordination Office 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. Expenditures are recognised on an accrual basis. 14 MINISTRY OF PLANNING AND INVESTMENT FINANCIAL STATEMENTS CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT For the year ended Financing Agreement - Credit number Cr. 5330-VN 31 December 2017 NOTES TO THE FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying financial statements 4. DESIGNATED ACCOUNTS Designated Accounts are deposit accounts in USD opened at Vietnam Bank for Agriculture and Rural Development - Cau Giay Branch and branches in Kon Turn, Gia Lai, Dak Lak, Dak Nong, Quang Nam and Quang Ngai provinces to serve the Project's activities. Payments out of the Designated Accounts are made in accordance with the relevant covenants of Financing Agreement - Credit number Cr. 5330-VN and relevant regulations established by the World Bank. 5. CASH 31/12/2017 31/12/2016 VND VND Cash on hand 210,458,517 115,023,982 Cash on hand at Provincial and District, Commune Project 65,000,000 22,000,000 Management Units of Kon Turn Province Cash on hand at Provincial and District, Commune Project 387 387 Management Units of Gia Lai Province Cash on hand at Provincial and District, Commune Project 110,034,000 71,530,196 Management Units of Dak Lak Province Cash on hand at Provincial and District, Commune Project 1,534,130 - Management Units of Dak Nong Province Cash on hand at Provincial and District, Commune Project 33,500,000 - Management Units of Quang Nam Province Cash on hand at Provincial and District, Commune Project 390,000 21,493,399 Management Units of Quang Ngai Province Cash in bank 80,078,669,244 75,700,921,183 Cash in bank at Central Project Coordination Office 11,528,388,012 115,968,557 Cash in bank at Provincial and District, Commune Project Management 22,665,037,230 7,970,560,359 Units of Kon Tum Province Cash in bank at Provincial and District, Commune Project Management 13,247,699,618 23,343,669,709 Units of Gia Lai Province Cash in bank at Provincial and District, Commune Project Management 24,255,802,050 16,132,406,696 Units of Dak Lak Province Cash in bank at Provincial and District, Commune Project Management 125,473,036 2,726,088,090 Units of Dak Nong Province Cash in bank at Provincial and District, Commune Project Management 7,889,182,308 12,775,437,539 Units of Quang Nam Province Cash in bank at Provincial and District, Commune Project Management 367,086,990 12,636,790,233 Units of Quang Ngai Province Cash in state treasury 1,265,446,400 811,416,874 Cash in state treasury at Provincial and District, Commune Project 989,852,742 3,002,478 Management Units of Dak Lak Province Cash in state treasury at Provincial and District, Commune Project 20,553,179 - Management Units of Gia Lai Province Cash in state treasury at Provincial and District, Commune Project 253,546,399 739,807,166 Management Units of Quang Nam Province Cash in state treasury at Provincial and District, Commune Project 1,494,080 68,607,230 Management Units of Quang Ngai Province 81,554,574,161 76,627,362,039 15 MINISTRY OF PLANNING AND INVESTMENT FINANCIAL STATEMENTS CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT For the year ended Financing Agreement - Credit number Cr. 5330-VN 31 December 2017 NOTES TO THE FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying financial statements 6. PREPAYMENT TO SUPPLIERS 31/12/2017 31/12/2016 VND VND Provincial and District, Commune Project Management Units of Gia Lai 3,623,428,000 7,170,769,650 Province Provincial and District, Commune Project Management Units of Kon 921,143,399 Tum Province Provincial and District, Commune Project Management Units of Dak Lak 1,310,624,500 856,638,150 Province Provincial and District, Commune Project Management Units of Dak 10,552,000 Nong Province Provincial and District, Commune Project Management Units of Quang 6,598,431,500 6,056,652,000 Nam Province Provincial and District, Commune Project Management Units of Quang 4,360,023,000 925,876,300 Ngai Province 16,824,202,399 15,009,936,100 7. OTHER RECEIVABLES 31/12/2017 31/12/2016 VND VND Other receivables related to expenditures 30,022,198 Other receivables not related to expenditures 84,559,207 30,095,254 114,581,405 30,095,254 8. PAYABLES TO SUPPLIERS 31/12/2017 31/12/2016 VND VND Central Project Coordination Office 2,192,821,133 8,289,759,572 Provincial and District, Commune Project Management Units of Kon 62,487,540,205 11,881,317,314 Tum Province Provincial and District, Commune Project Management Units of Gia Lai 4,478,986,774 985,049,523 Province Provincial and District, Commune Project Management Units of Dak Lak 36,555,302,449 35,498,597,909 Province Provincial and District, Commune Project Management Units of Dak 52,584,227,323 29,317,152,986 Nong Province Provincial and District, Commune Project Management Units of Quang 3,374,648,171 3,293,828,980 Nam Province Provincial and District, Commune Project Management Units of Quang 27,857,876,430 10,606,813,545 Ngai Province 164 99,872,519,829 16 MINISTRY OF PLANNING AND INVESTMENT FINANCIAL STATEMENTS CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT For the year ended Financing Agreement - Credit number Cr. 5330-VN 31 December 2017 NOTES TO THE FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying financial statements 9. OTHER PAYABLES 31/12/2017 31/12/2016 VND VND Other payables related to expenditures 1,042,875,890 1,408,010,965 Central Project Coordination Office 4,178,173 21,410,629 Provincial and District, Commune Project Management Units of Dak 543,687,314 520,202,150 Lak Province Provincial and District, Commune Project Management Units of Dak 139,470,725 441,099,332 Nong Province Provincial and District, Commune Project Management Units of Quang 162,976,000 182,378,965 Nam Province Provincial and District, Commune Project Management Units of Quang 192,563,678 242,919,889 Ngai Province Other payables not related to expenditures 166,881,516 294,440,172 Provincial and District, Commune Project Management Units of Kon 66,567,538 45,518,238 Tum Province Provincial and District, Commune Project Management Units of Gia Lai 45,666,113 59,369,934 Province Provincial and District, Commune Project Management Units of Dak - 119,708,467 Lak Province Provincial and District, Commune Project Management Units of Dak - 32,921,187 Nong Province Provincial and District, Commune Project Management Units of Quang 54,647,865 36,922,346 Nam Province 1,209,757,406 1,702,451,137 10. IDA FUNDS Year 2017 Accumulated to 31/12/2017 USD VND equivalent USD VND equivalent Designated 33,530,154.37 737,394,941,859 61,762,348.66 1,354,677,830,658 Account 33,530,154.37 737,394,941,859 61,762,348.66 1,354,677,830,658 11. COMPARATIVE FIGURES Comparative figures are the figures of the Project's audited fina stateni s for the year ended 31 December 2016. G30 DI f) 4bi BAND EUPHO,JN i,,,,"2013 -201 Vo Trinh Vinh Dao Thi Hong Lien Tran Ngoc Hung Preparer Chief Accountant Director Hanoi, 20 June 2017 17 U U U U U U U U U U U PART II * REPORT OF INDEPENDENT AUDITORS ON INTERNAL 0 N CONTROL U n * U U U U B 3 U U U U U U 3 U U U U U Deloitte Vietnam Company Ltd. .ethFloor, Vinaconex Tower, SD elo itte 34 Lang Ha Street, Lang Ha Ward, Dong Da District, Hanoi, Vietnam Tel :+84 24 6288 3568 REPORT OF INDEPENDENT AUDITORS Fax:+84 24 6288 5678 ON INTERNAL CONTROL Website: www.deloitte.com/vn To: The Central Project Coordination Office of the Central Highlands Poverty Reduction Project We have audited, in accordance with International Standards on Auditing, the financial statements of the Central Highlands Poverty Reduction Project (the "Project") for the year ended 31 December 2017 and issued the Independent auditors' report thereon dated 20 June 2017 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. As stated in the Statement of the Central Project Coordination Office on page 2, the Central Project Coordination Office and Project Management Units are 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 minimize errors and frauds; and take responsibility for its assertions as to the effectiveness of such internal control. 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. Our examination was conducted in accordance with International Standard on Assurance Engagements (ISAE) 3000. 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 Central Project Coordination Office and Project Management Units have maintained 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 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. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. In our opinion, the Central Project Coordination Office and Project Management Units have maintained, in al material respects, effective internal control over compliance with requirements that could have a direct and mate ril financial effect on the Project's financial statements as well as internal control over financial reporting for the year ended 31 December 2017. Khuc Thi Lan Anh Nguye4Anh uan Deputy General Director Audit Audit Practising Registration Certificate Audit ractising Registration Certificate W No. 0036-2018-001-1 No. 1472-2018-001-1 DELOITTE VIETNAM COMPANY LIMITED 20 June 2017 Hanoi, S.R. Vietnam 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. 18 . . . . • • . . . . 口PART 111 .，。二。。。。．。二，。。。二。。。．。二。二。。r,，。k．。。．0.to．。二 11甩口jL『，〔I瀾口j匹必I閑•戶甩•〕•〕鳥j『k戶甩•，k＇〔日『k區必奮→｀j『k，鳥j■廈鳥＇kj,，•「→亂•甚r他，甩｀&‘■ , . , . . . , . . . . • . . • . . . . . ■ ■ Deloitte Vietnam Company Ltd. 15thFloor, Vinaconex Tower, D e lo 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 ASSURANCE REPORT ON COMPLIANCE To: The Central Project Coordination Office of the Central Highlands Poverty Reduction Project We have audited, in accordance with International Standards on Auditing, the financial statements of the Central Highlands Poverty Reduction Project (the "Project") for the year ended 31 December 2017 and issued the Independent auditors' report thereon dated 20 June 2017 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 2017 (the "requirements"). The Central Project Coordination Office and Project Management Units are responsible for complying with Financing Agreement - Credit number Cr. 5330-VN, laws and regulations applicable to the Project. 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 International Standard on Assurance Engagements (ISAE) 3000. 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 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 auditors' 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. In our opinion, the Central Project Coordination Office and Project Management Units have 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 Decel-Per 2017. Khuc Thi Lan Anh Nguye Anh Tuan Deputy General Director Audit Audit Practising Registration Certificate Audit actising Registration Certificate No. 0036-2018-001-1 No. 1472-2018-001-1 DELOITTE VIETNAM COMPANY LIMITED 20 June 2017 Hanoi, S.R. Vietnam 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 "DeloitiEgGlobal") does not provide services to clients. Please see www.deloitte.com/a bout for a more detailed description of DTTL and its member firms.