MEKONG DELTA INTEGRATED CLIMATE RESILIENCE AND SUSTAINABLE LIVELIHOODS PROJECT Financing Agreement No. 5845-VN and Grant Agreement No. TFA8261 TABLE OF CONTENTS CONTENTS PAGE(S) PART I FINANCIAL STATEMENTS Statement of the Central Project Management Unit 2 Independent Auditors' Report on Financial Statements 3-5 Balance Sheet 6 Statement of Income and Expenditures 7 Statement of Resources and Uses of Funds Statement of Designated Accounts 9-11 Statement of Withdrawals 12-16 Notes to the Financial Statements 17-23 PART II INDEPENDENT AUDITORS' ASSURANCE REPORT ON 24-25 INTERNAL CONTROL PART Ill INDEPENDENT AUDITORS' ASSURANCE REPORT ON COMPLIANCE Statement of the Central Project Management Unit on Compliance 26 Independent Auditors' Assurance Report on Compliance 27-28 PART IV MANAGEMENT LETTER 29-32 U U U W U 1 U E E gC gD g g MEKONG DELTA INTEGRATED CLIMATE RESILIENCE AND SUSTAINABLE LIVELIHOODS PROJECT Financing Agreement No. 5845-VN and Grant Agreement No. TFA8261 STATEMENT OF THE CENTRAL PROJECT MANAGEMENT UNIT The Central Project Management Unit of Mekong Delta Integrated Climate Resilience and Sustainable Livelihoods Project (the "CPMU" or "Central Project Management Unit") presents this report together with the financial statements of Mekong Delta Integrated Climate Resilience and Sustainable Livelihoods Project (the "Project") for the year ended 31 December 2020. 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. Pham Dinh Van Head of the Central Project Office ("CPO") Mr. Nguyen Dinh Hau Director of the Project Mr. Dang The Luong Chief Accountant - Head of Accounting and Finance Department Central Project Management Unit's Statement of Responsibility The CPMU is responsible for preparing the financial statements of the Project, which comprise the Balance Sheet as at 31 December 2020, the Statement of Income and Expenditures, the Statement of Resources and Uses of Funds, the Statement of Designated Accounts, the 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 its designated account balances as at 31 December 2020 as well as its income and expenditures, 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 No. 5NC 5845-VN and Grant Agreement No. TFA8261. In preparing these financial statements, the CPMU is required to: TNV * Select suitable accounting policies and then apply them consistently; ,LO * Make judgments and estimates that are reasonable and prudent; .ET * 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 that 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 minimize errors and frauds; and take responsibility for its assertions as to the effectiveness of such internal control. The CPMU 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 CPMU is responsible for ensuring that the funds have been used as intended for the Project and for complying with Financing Agreement No. 5845-VN and Grant Agreement No. TFA8261 as well as laws and regulations applicable to the Project. The CPMU 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 CPMU confirms that they have complied with the above requirements in preparing these financial statements. r an alf of the CPMU, BAN QlUAN LY CC n e Central Project Office 15 September 2021 U2 Deloitte Vietnam Co., Ltd DELOITTE 15th Floor, Vinaconex Tower, D e lo itte o JVIETNAM 34 Lang Ha Street, Lang Ha Ward, Dang Da District, Hanoi, Vietnam Tel: +84 24 71050000 Making an impact since 1991 Fax: +84 24 6288 5678 www.deloitte.com/vn No.: O /VN1A-HN-BC INDEPENDENT AUDITORS'REPORT ON FINANCIAL STATEMENTS To: The Central Project Office (CPO) The Central Project Management Unit of Mekong Delta Integrated Climate Resilience and Sustainable Livelihoods Project (CPMU) Qualified opinion We have audited the financial statements of Mekong Delta Integrated Climate Resilience and Sustainable Livelihoods Project (the "Project"), which comprise the Balance Sheet as at 31 December 2020, Statement of Income and Expenditures, Statement of Resources 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, except for the effects of the matter described in the "Basis for Qualified Opinion" section, the accompanying financial statements give a true and fair view of the financial position of the Project and its designated account balances as at 31 December 2020, 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 Z accordance with the accounting convention and the accounting policies set out in Note 2 and Note 3 of the Notes ; TN to the financial statements. MH IT'T Basis for Qualified Opinion NA As presented in Note 5 of the Notes to the financial statements, some Project implementing units had not reconciled the balances of cash in bank, State treasury belonging to the counterpart funds of the Project with the total balance as at 31 December 2019 of VND 6,603,065,012. We were unable to obtain sufficient appropriate audit evidence regarding the amount of cash in bank, State treasury as at 31 December 2019 of these Project implementing units, which caused us to qualify our audit opinion on the financial statements for the year ended 31 December 2019. We were also unable to obtain sufficient appropriate audit evidence regarding the balance of cash in bank, State treasury of some Project implementing units with the total balance as at 31 December 2020 of VND 27,260,960,251. Therefore, we were unable to determine whether any adjustments to "Cash in bank, State treasury" and related line items in the financial statements were necessary. 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 qualified opinion. Basis of Accounting We draw attention to Note 2 and Note 3 of the Notes to the financial statements which describe 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. 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. 3 DELOITTE Deloitte. VIETNAM Makmog an impact since 1991 INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS (Continued) Responsibilities of the CPMU and those charged with governance for the Financial Statements The CPMU 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 CPMU 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 CPMU 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 CPMU 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 Finapcial 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 C 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 E 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 CPMU'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 CPMU. 4 U *DELELTT Deloitte. VIETNAM Making an impact since 1991 INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS (Continued) We communicate with those charged with governance and the CPMU 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. 001A12500, TE IET NAM Nguyen Thanh Huong Deputy General Director Auditor Audit Practising Registration Certificate Audit Practising Registration Certificate No. 0891-2018-001-1 No. 1415-2018-001-1 DELOITTE VIETNAM COMPANY LIMITED 15 September 2021 Hanoi, S.R. Vietnam 5 MEKONG DELTA INTEGRATED CLIMATE RESILIENCE FINANCIAL STATEMENTS ANDSUSTAINABLE LIVELIHOODS PROJECT For the year ended Financing Agreement No. 5845-VN and Grant Agreement No. TFA8261 31 December 2020 BALANCE SHEET As at 31 December 2020 Notes 31/12/2020 31/12/2019 - VND VND ASSETS 1. Current assets 627,918,092,282 535,789,844,796 Cash 5 204,083,254,306 396,987,435,660 Cash on hand 112,070,778 119,609,546 Cash in bank, State treasury 203,971,183,528 396,867,826,114 Accounts receivable 423,831,837,976 138,757,409,136 Prepayments to suppliers 6 420,938,713,866 136,467,687,444 Internal receivables 7 2,152,000,000 2,289,721,692 Other receivables 741,124,110 - Other current assets 3,000,000 45,000,000 Advances to employees 3,000,000 45,000,000 TOTAL ASSETS 627,918,092,282 535,789,844,796 RESOURCES 1. Liabilities 94,784,849,241 170,658,790,76 Current liabilities 94,784,849,241 170,658,790,764 Trade payables 8 94,343,844,651 170,315,258,438 Taxes and amounts payable to the 245,700,000 37,170,00 State budget Payables to employees - 296,230,000 Other payables 195,304,590 10,132,326 TOTAL RESOURCES 94,784,849,241 170,658,790,764 NET ASSETS 533,133,243,041 365,131,054,032 SURPLUS OF INCOME OVER EXPENDITURES 533,133,243,041 365,131,054,032 * VnDang The Luong Duong CQuocCun 3 Head of the Central Project Office Chief Accountant - Head of Preparer URN Accounting and Finance Department 155September 2021 The accompanying notes are an integral part of these financial statements 6 ME.E....E..W.mEW.WW..W.Nm.mWm.EEE MEKONG DELTA INTEGRATED CLIMATE RESILIENCE FINANCIAL STATEMENTS AND SUSTAINABLE LIVELIHOODS PROJECT For the year ended Financing Agreement No. 5845-VN and Grant Agreement No. TFA8261 31 December 2020 STATEMENT OF INCOME AND EXPENDITURES For the year ended 31 December 2020 2020 Accummulated to Accummulated to Notes 31/12/2020 31/12/2019 VND VND VND INCOME IDA fund - Financing Agreement No.5845-VN 9 755,820,089,918 1,787,868,514,199 1,032,048,424,281 Counterpart fund 11 213,227,226,680 575,880,544,369 362,653,317,689 Grant Fund - Grant Agreement No.TFA8261 10 6,658,706,253 6,658,706,253 TOTAL INCOME 975,706,022,851 2,370,407,764,821 1,394,701,741,970 EXPENDITURES Component 1: Enhancing Monitoring, Analytics and Information Systems 95,338,789,028 275,113,784,031 179,774,995,003 Component 2: Managing Floods in the Upper Delta 130,054,727,298 191,767,639,871 61,712,912,573 Component 3: Adapting to Salinity Transitions in the Delta Estuary 137,266,730,362 710,294,596,129 573,027,865,767 Component 4: Protecting Coastal Areas In the Delta Peninsula 435,562,040,737 568,033,553,891 132,471,513,154 Component S: Project Management and Implementation Support 5,737,084,736 97,601,489,452 91,864,404,716 TOTAL EXPENDITURES 12 803,959,372,161 1,842,811,063,374 1,038,851,691,213 SURPLUS OF INCOME OVER EXPENDITURES 171,746,650,690 527,596,701,447 355,850,050,757 Foreign exchange differences (3,744,461,681) 5,536,541,594 9,281,003,275 SURPLUS OF INCOME OVER EXPENDITURES AT THE BEGINNING OF THE YEAR 365,131,054,032 SURPLUS OF INCOME OVER EXPENDITURES AT THE END OF THE YEAR 533,133,243,041 533,133,243,041 365,131,054,032 Represented by the balances: Cash 204,083,254,306 396,987,435,660 Advances 3,000,000 45,000,000 Accounts receivable 423,831,837,976 138,757,409,136 ent liabilities (94,784,849,241) (170,658,790,764) ,411 PH141 BA o QUA ZTRUNGI/CNGz 9 CAG 0 ANTH L (CPC m fr Van Dang The Luong Duong Quoc Cuong (CP e Central Project Office Chief Accountant - Head of Accounting Preparer A and Finance Department 15 September 2021 The accompanying notes are an integral part of these financial statements 7 49Cl! ;v>\ ....EE..EENEE..EEE.EwWW EWWWW. .UWE MEKONG DELTA INTEGRATED CLIMATE RESILIENCE FINANCIAL STATEMENTS AND SUSTAINABLE LIVELIHOODS PROJECT For the year ended Financing Agreement No. 5845-VN and Grant Agreement No. TFA8261 31 December 2020 STATEMENT OF RESOURCES AND USES OF FUNDS For the year ended 31 December 2020 Unit: VND No. Contents Year 2020 Accumulated to 31/12/2020 IDA Fund Counterpart Fund Grant Fund Total IDA Fund Counterpart Fund Grant Fund Total I. RECEIPTS 755,820,089,918 213,227,226,680 6,652,706,253 975,706,022,851 1,787,868,514,199 575,880,544,369 6,658,706,253 2,370,407,764,821 1 IDA fund - Financing Agreement No,5845-VN 755,820,089,918 - - 755,820,089,918 1,787,868,514,199 - - 1,787,868,514,199 2 Counterpart fund - 213,227,226,680 213,227,226,680 - 575,880,544,369 - 575,880,544,369 3 Grant Fund - Grant Agreement No.TFA8261 - - 6,658,706,253 6,658,706,253 - - 6,658,706,253 6,658,706,253 II. DISBURSEMENTS 917,815,090,028 243,888,419,742 2,785,00,600 1,164,489,512,370 1,626,034,699,376 540,340,530,613 2,785,002,600 2,169,160,232,589 1 Component 1: Enhancing Monitoring, Analytics and 88,489,459,102 42,349,926,409 - 130,839,385,511 257,882,326,028 68,571,264,223 - 326,453,590,251 Information Systems 2 Component 2: Managing Floods in the Upper Delta 107,128,523,573 107,069,450,168 214,197,973,741 117,198,580,733 164,808,780,611 - 282,007,361,344 3 Component 3: Adapting to Salinity Transitions in the 268,706,551,638 31,596,372,844 - 300,302,924,482 679,929,531,638 167,510,992,051 - 847,440,523,689 Delta Estuary 4 Component 4: Protecting Coastal Areas in the Delta 430,272,532,517 84,279,154,547 - 514,551,687,064 494,207,143,069 118,077,338,096 - 612,284,481,165 5 Component 5: Project Management and 23,219,023,198 (21,406,484,226) 2,785,002,600 4,597,541,572 76,817,117,908 21,372,155,632 2,785,002,600 100,974,276,140 Ill. SURPLUS OF RECEIPT OVER DISBURSEMENT (161,996,000,110) (30,661,193,062) 3,873,703,653 (188,783,489,519) 161,833,814,823 35,540,013,756 3,873,703,653 201,247,532,232 Foreign exchange differences (3,746,789,898) - 2,328,217 (3,744,461,681) 5,534,213,377 - 2,328,217 5,536,541,594 IV. SURPLUS OF INCOME OVER EXPENDITURES AT 333,110,818,208 66,201,206,818 - 399,312,025,026 - - - V. SURPLUS OF INCOME OVER EXPENDITURES AT 167,368,028,200 35,540,013,756 3,876,031,870 206,784,073,826 167,368,028,200 35,540,013,756 3,876,031,870 206,784,073,826 Represented by the closing balances at the year end: Cash 204,083,254,306 Internal receivables 2,152,000,000 Other receivables 741,124,110 Advances to employees 3,000,000 1 Other payables (195,304,590) kBAN. CDQUAN Lp___ __ TFRUNG Lfq G__ _ _ __ _ _ __ _ _ _ 0 CAC Odl AN TFWi¶d?Fnh Van Dang The Luong Duong Quoc Cuong t (CPCIe of the Central Project Office Chief Accountant - Head of Accounting Preparer S * eemand Finance Department ow eptember 2021 The accompanying notes are an integral part of these financial statements 8 .M.E.MEM.E.EW.W.W.Eu.E..NW MEKONG DELTA INTEGRATED CLIMATE RESILIENCE FINANCIAL STATEMENTS AND SUSTAINABLE LIVELIHOODS PROJECT For the year ended Financing Agreement No. 5845-VN and Grant Agreement No. TFA8261 31 December 2020 STATEMENT OF DESIGNATED ACCOUNTS For the period From 01 January 2020 to 31 December 2020 Financing Agreement 5845-VN Currency unit : USD Account Number : 21210371236666 21210370366366 21210376666666 74110370676868 75010370012963 Project Coordination Unit/Project Management Unit CPMU Sub project Management of Irrigation Kien Giang Management Unit Construction Investment Provincial 6 - Ministry of Investment Projects - Construction Agriculture and Planning and Ministry of Natural Resources and Rural Development Investment Resources and Management Board Works Investment Environment No. 10 and Construction PMU PART A - ACCOUNT ACTIVITIES Amount Amount Amount Amount Amount Opening balance (01/01/2020) 87,642.16 1,164,867.89 167,813.71 1,725,126.05 3,410,857.75 Add: - Total amount replenished by the World Bank to Designated Account 992,200.00 2,900,000.00 1,758,369.06 4,237,262.06 3,643,000.00 for the year Deduct: - Total amount withdrawn 726,831.58 2,453,379.55 1,564,275.73 5,857,196.19 6,400,024.27 Closing balance (31/12/2020) 353,010.58 1,611,488.34 361,907.04 105,191.92 653,833.48 PART B - ACCOUNT RECONCILIATION 1. Total amount replenished by the World Bank to Designated Account 2,673,550.00 5,886,526.00 8,172,110.08 21,102,252.21 9,818,000.00 2. Deduct: Total amount claimed and accepted for advance clearance 2,073,193.69 4,192,371.65 6,752,417.98 20,338,322.40 9,068,035.52 3. Total advances to Designated Account as at 31/12/2020 600,356.31 1,694,154.35 1,419,692.10 763,929.81 749,964.48 4. Closing balance of Designated Account as at 31/12/2020 353,010.58 1,611,488.34 361,907.04 105,191.92 653,833.48 5. Add: Amount claimed but not yet accepted - - 914,917.92 177,540.02 - 6. Add: Amount withdrawn but not yet claimed 247,345.73 82,666.01 142,867.14 481,197.87 96,131.00 7. Total advances to Designated Account as at 31/12/2020 600,356.31 1,694,154.35 1,419,692.10 763,929.81 749,964.48 The accompanying notes are an integral part of these financial statements 9 MEKONG DELTA INTEGRATED CLIMATE RESILIENCE FINANCIAL STATEMENTS AND SUSTAINABLE LIVELIHOODS PROJECT For the year ended Financing Agreement No. 5845-VN and Grant Agreement No. TFA8261 31 December 2020 STATEMENT OF DESIGNATED ACCOUNTS (Continued) For the period : From 01 Jan ury 2020 to31 December 2020 Financing Agreement : 5845-VN Currency unit : USD Account Number : 74210370011138 69110370012920 72110370019704 78510370003271 78010370008642 70110000358966 Project Coordination Unit/Project Management Unit Soc Trang PPMU Dong Thap Ben Tre Provincial Bac Lieu Provincial Ca Mau Provincial An Giang Provincial Provincial ICRSL Sub Agriculture and Agriculture and ODA and NGO Agriculture and Project Rural Development Rural Development Project Rural Development Management Unit works investment works Investment Management Unit works Investment and Construction and Construction and Construction PMU PMU PMU PART A- ACCOUNT ACTIVITIES Amount Amount Amount Amount Amount Amount Opening balance (01/01/2020) 179,322.42 429,284.76 3,330,000.00 2,484,890.00 1,425,178.00 Add: - Total amount replenished by the World Bank to Designated Account 4,556,000.00 190,000.00 - 1,999,000.00 6,462,210.30 5,600,000.00 - Amount refunded to designated account - - - 110.00 - Deduct: - Total amount withdrawn 3,348,292.08 491,954.54 2,287,269.84 4,424,399.59 7,781,433.87 4,034,964.31 Closing balance (31/12/2020) 1,387,030.34 127,330.22 1,042,730.16 59,600.41 105,954.43 1,565,035.69 PART B - ACCOUNT RECONCILIATION 1. Total amount replenished by the World Bank to Designated Account 7,323,000.00 1,054,838.00 3,330,000.00 4,484,000.00 7,887,388.30 5,600,000.00 2. Deduct: Total amount claimed and accepted for advance clearance 5,548,584.64 519,069.04 1,731,890.73 3,564,749.36 4,398,837.76 3,805,713.65 3. Total advances to Designated Account as at 31/12/2020 1,774,415.36 535,768.96 1,598,109.27 919,250.64 3,488,550.54 1,794,286.35 4. Closing balance of Designated Account as at 31/12/2020 1,387,030.34 127,330.22 1,042,730.16 59,600.41 105,954.43 1,565,035.69 5. Add: Amount withdrawn but not yet claimed 387,385.02 408,438.74 555,379.11 859,650.23 3,382,596.11 229,250.66 6. Total advances to Designated Account as at 31/12/2020 1,774,415.36 535,768.96 1,598,109.27 919,250.64 3,488,550.54 1,794,286.35 The accompanying notes are an integral part of these financial statements 10 MEKONG DELTA INTEGRATED CLIMATE RESILIENCE FINANCIAL STATEMENTS AND SUSTAINABLE LIVELIHOODS PROJECT For the year ended Financing Agreement No. 5845-VN and Facility Grant Agreement No TFA8261 31 December 2020 STATEMENT OF DESIGNATED ACCOUNTS (Continued) For the period : From 01 January 2020 to 31 December 2020 Financing Agreement : TFAB261 Currency unit : USD Account Number 122000062014 Project Coordination Unit/Project Management Unit CPMU PART A - ACCOUNT ACTIVITIES Amount Opening balance (01/01/2020) Add: - Total amount replenished by the World Bank to Designated Account for the year 288,353.72 Deduct: - Total amount withdrawn 120,712.85 Closing balance (31/12/2020) 167,640.87 PART B - ACCOUNT RECONCILIATION 1. Total amount replenished by the World Bank to Designated Account 288,353.72 2. Deduct: Total amount claimed and accepted for advance clearance 108,353.72 3. Total advances to Designated Account as at 31/12/2020 180,000.00 4. Closing balance of Designated Account as at 31/12/2020 167,640.87 5. Add: Amount withdrawn but not yet claimed 12,359.13 6. Total advances to Designated Account as at 31/12/2020 180,000.00 * ~ BAN 0 UAN LY am inh Van Dang The Luong Duong Quoc Cuong Head of the Central Project Office Chief Accountant - Head of Preparer Accounting and Finance Department 15 September 2021 The accompanying notes are an integral part of these financial statements 11 U *EEEEEEEEEEEEWEEEEEMEEEEEEuEEEmONg MEKONG DELTA INTEGRATED CLIMATE RESILIENCE FINANCIAL STATEMENTS AND SUSTAINABLE LIVELIHOODS PROJECT For the year ended Financing Agreement No. 5845-VN and Grant Agreement No. TFA8261 31 December 2020 STATEMENT OF WITHDRAWALS Financing Agreement No.5845-VN For the year ended 31 December 2020 Withdrawal Application Amount disbursed/accepted for advance clearance Difference Aonc o Amount claimed fr Amount accepted Amount Amount accepted Amount claimedforAmount foAmount oravac Nt No. Date Currency disbursement for advance Date disbursed for advance disbursed for advance Note clearance clearance d clearance 1.Deslgnated account CPMU CPO-14 30/12/2020 USD 2,351,710.00 - - - 2,351,710.00 - (*) CPO-13 17/12/2020 USD 170,000,00 60,996.61 28/12/2020 170,000.00 60,996.61 - - CPO-12 14/10/2020 USD - 84,024.64 03/11/2020 - 84,024.64 - - CPO- 11 07/09/2020 USD 335,000.00 123,659.89 28/09/2020 335,000.00 123,659.89 - CPO-10 21/07/2020 USD - 63,964.35 07/09/2020 - 63,964.35 - - CPO-09 16/03/2020 USD 400,000.00 435,062.17 26/03/2020 400,000.00 435,062.17 - CPO-08 25/12/2019 USD 87,200.00 - 15/01/2020 87,200.00 - . - Sub project Management Unit 6 - Ministry of Planning and Investment 07-5845(TDA6) 14/12/2020 USD 1,400,000.00 1,330,714.38 21/12/2020 1,400,000.00 1,330,714.38 - - 06-5845(TDA6) 03/09/2020 USD 1,500,000,00 1,059,675.80 09/10/2020 1,500,000.00 1,059,675.80 - Management of Construction Investment Projects - Ministry of Natural Resources and Environment DA-C11 17/12/2020 USD 463,000.00 914,917.92 - 463,000.00 914,917.92 (*) DA-C10 07/07/2020 U5D 1,315,000.00 - 04/09/2020 1,315,000.00 - - DA-CO9 08/06/2020 USD - 734,528.88 19/08/2020 - 734,528.88 - - DA-CO 20/12/2019 USD 443,369.06 680,086.09 06/01/2020 443,369.06 680,086.09 Irrigation investment Construction Resources and Management Board No. 10 ICMB10-02(TDA1) 21/12/2020 USD 2,035,590.00 - - - 2,035,590.00 - (*) ICMB1O-024(TDA6) 16/12/2020 USD - 177,540.02 - - 177,540.02 (*) ICMB10-023(TDA6) 05/10/2020 USD - 61,281.60 16/10/2020 - 61,281.60 - - ICMB10-022(TDA6) 10/08/2020 USD - 459,775.44 28/08/2020 - 459,775.44 ICMB10-021(TDA6) 09/07/2020 USD - 233,082.15 06/08/2020 - 233,082.15 - - ICMB10-020(TDA6) 18/05/2020 USD 1,031,916.09 569,653.66 22/06/2020 -1,031,916.09 569,653.66 - . ICMB1O-019(TDA6) 20/04/2020 USD - 400,491.43 22/06/2020 - 400,491.43 - ICMB10-018A(TDA6) 25/03/2020 USD 1,456,297.97 3,059,788.72 31/03/2020 1,456,297.97 3,059,788.72 ICMB10-017A(TDA6) 20/01/2020 USD 1,749,048.00 718,253.58 24/01/2020 1,749,048.00 718,253.58 ICMB10-014(TDA6) 31/12/2019 USD - 318,004.32 22/01/2020 - 318,004.32 - - The accompanying notes are an integral part of these financial statements 12 WOWNOMENNuNmguumu gmmmumuummNuuMnu MEKONG DELTA INTEGRATED CLIMATE RESILIENCE FINANCIAL STATEMENTS AND SUSTAINABLE LIVELIHOODS PROJECT For the year ended Financing Agreement No. 5845-VN and Grant Agreement No. TFAB261 31 December 2020 STATEMENT OF WITHDRAWALS (Continued) Financing Agreement No.5845-VN For the year ended 31 December 2020 Withdrawal Application Amount disbursed/accepted for advance clearance Difference Amount claimed for Amount accepted Amount Amount accepted Amount claimedforAmount foAmount oravac Nt No. Date Currency disbursement cadvance Date disbursed for advance disbursed for advance Note clearance clearance clearance 1.Designated account Kien Giang Provincial Agriculture and Rural Development Works Investment and Construction PMU KIENGIANG-005 03/11/2020 USD 743,000.00 1,227,439.86 08/12/2020 743,000.00 1,227,439.86 - - KIENGIANG-004 25/08/2020 USD 1,200,000.00 1,717,080.25 21/09/2020 1,200,000.00 1,717,080.25 - - KIENGIANG-003C 03/03/2020 USD 1,700,000.00 3,359,373.16 24/03/2020 1,700,000.00 3,359,373.16 - - Soc Trang PPMU SOCTRANG.08 02/12/2020 USD 1,734,000.00 1,210,320.87 17/12/2020 1,734,000.00 1,210,320.87 - - SOCTRANG. 07 17/11/2020 USD 1,250,000.00 10,124.50 30/11/2020 1,250,000.00 10,124.50 - - SOCTRANG.06 27/09/2020 USD - 575,913.65 16/10/2020 - 575,913.65 - - SOCTRANG.05 21/05/2020 USD 582,000.00 736,575.85 23/06/2020 582,000.00 736,575.85 - - SOCTRANG.04 29/04/2020 USD 500,000.00 428,082.19 01/05/2020 500,000.00 428,082.19 - - SOCTRANG.02 14/01/2020 USD 490,000.00 2,587,567.58 22/01/2020 490,000.00 2,587,567.58 - - Dong Thap Provincial ICRSL Sub Project Managemen - DONGTHAP-07 (TDA3) 27/10/2020 USD - 283,041.71 09/11/2020 - 283,041.71 - - DONGTHAP-06 (TDA3) 26/08/2020 USD 190,000.00 - 28/09/2020 190,000.00 - - - DONGTHAP-03 (TDA3) 17/04/2020 USD - 143,544.01 28/04/2020 - 143,544.01 - - Ben Tre Provincial Agriculture and Rural Development works investment and Construction PMU 03-BENTRE 07/10/2020 USD - 1,666,973.05 16/10/2020 - 1,666,973.05 - - 02 - BENTRE 26/04/2020 USD - 64,917.68 27/05/2020 - 64,917.68 - The accompanying notes are an integral part of these financial statements 13 WW.Mm"HME..EEga EaE.aM ....a.aggag. MEKONG DELTA INTEGRATED CLIMATE RESILIENCE FINANCIAL STATEMENTS AND SUSTAINABLE LIVELIHOODS PROJECT For the year ended Financing Agreement No. 5845-VN and Grant Agreement No. TFA8261 31 December 2020 STATEMENT OF WITHDRAWALS (Continued) Financing Agreement No.5845-VN For the year ended 31 December 2020 Withdrawal Application Amount disbursed/accepted for advance clearance Difference Amount claimed Amount accepted Amount accepted No. Date Currency for advance DateAmount for advance for advance Note disbursementaance disbursed c le a ra n c e disbursed c l e a r a n c e 1.Designated account Bac Lieu Provincial Agriculture and Rural Development works investment and Construction PMU 03-BACLIEU 16/09/2020 USD - 1,517,746.36 09/10/2020 - 1,517,746.36 - - 04-BACLIEU 16/09/2020 USD 919,000.00 - 07/10/2020 919,000.00 - - BACLIEU-02 07/05/2020 USD 1,080,000.00 2,047,003.00 17/06/2020 1,080,000.00 2,047,003.00 - - Ca Mau Provincial ODA and NGO Project Management Unit CAMAU-05{TDA8) 23/10/2020 USD - 306,222.33 27/10/2020 - 306,222.33 - - CAMAU-06(TDA8) 18/10/2020 USD 3,447,384.30 - 27/10/2020 3,447,384.30 - - - CAMAU-04(TDA8) 19/07/2020 USD 234,826.00 - 14/08/2020 234,826.00 - - - PPMUCAMAU-03(TDA8) 12/07/2020 USD - 2,896,762.00 07/08/2020 - 2,896,762.00 - - CAMAU-002 20/03/2020 USD 2,780,000.00 1,195,853.43 26/03/2020 2,780,000.00 1,195,853.43 - - An Glang Provincial Agriculture and Rural Development works Investment and Construction PMU 02 ANGIANG-HP2-TDA2 10/09/2020 USD - 3,805,713.65 27/09/2020 - 3,805,713.65 - - ANGIANG-01 07/04/2020 USD 5,600,000.00 - 05/05/2020 5,600,000.00 - - - 37,188,341.42 37,265,756.78 32,338,041:42 36,173,298.84 4,850,300.00 1,092,457.94 The accompanying notes are an integral part of these financial statements 14 mmmgEgmmmMmmEuswWamumgmaggmamumm MEKONG DELTA INTEGRATED CLIMATE RESILIENCE FINANCIAL STATEMENTS AND SUSTAINABLE LIVELIHOODS PROJECT For the year ended Financing Agreement No. 5845-VN and Grant Agreement No. TFAB261 31 December 2020 STATEMENT OF WITHDRAWALS (Continued) Financing Agreement No.5845-VN For the year ended 31 December 2020 Withdrawal Application Amount disbursed Difference Original Amount claimed Amount claimed Amount disbursed Amount (USD NDaefor disbursement Date Note e Currency for disbursement (USD equipvalent) equlpvalent) (USD equipvalent) 2. Direct payment DONGTHAP-09(TDA3) 29/12/2020 VND 43,376,923,000 1,874,461.91 - 1,874,461.91 (*) DONGTHAP-08 (TDA3) 17/11/2020 VND 4,036,344,000 174,341.05 03/12/2020 174,341.05 47,413,267,000 2,048,802.96 174,341.05 1,874,461.91 (*) The withdrawal application was submitted in 2020 but disbursed or accepted for advance clearance in 2021. 3AN QUA ZTRLIAa O o CAR IDy THUY L61 o0 (C Pha h Van Dang The Luong Duong Quoc Cuong Head of the Central Project Office Chief Accountant - Head of Accounting Preparer and Finance Department 15 September 2021 The accompanying notes are an integral part of these financial statements 15 MEKONG DELTA INTEGRATED CLIMATE RESILIENCE FINANCIAL STATEMENTS AND SUSTAINABLE LIVELIHOODS PROJECT For the year ended Financing Agreement No. 5845-VN and Grant Agreement No. TFA8261 31 December 2020 NOTES TO THE FINANCIAL STATEMENTS These notes are on integral part of and should be read in conjunction with the accompanying financial statements 1. GENERAL INFORMATION Mekong Delta Integrated Climate Resilience and Sustainable Livelihoods Project (the "Project") operates under Financing Agreement No. 5845-VN dated 11 July 2016 signed between the Socialist Republic of Vietnam and the International Development Association (IDA) and Grant Agreement No. TFA8261 dated 12 October 2018 signed between the Socialist Republic of Vietnam and the International Bank for Reconstruction and Development, who acts as the implementing agency of the Global Environment Facility (GEF). The objective of the Project is to strengthen tools to make plans for adapting with climate change, enhance the climate change resilience for land and water management and usage in selected provinces in the Mekong Delta area. The Project consists of the following parts: Part 1: Enhancing Monitoring, Analytics and Information Systems; Part 2: Managing Floods in the Upper Delta; Part 3: Adapting to Salinity Transitions in the Delta Estuary; Part 4: Protecting Coastal Areas in the Delta Peninsula; Part 5: Project Management and Implementation Support. The Project is implemented in 9 provinces of the Mekong Delta area and is separated into 3 ecological zones: (a) upstream areas including An Giang, Dong Thap and Kien Giang; (b) Peninsulas including Ca Mau and Bac Lieu; (c) coastal areas including Ben Tre, Tra Vinh, Soc Trang and Vinh Long. Total Project's fund is USD 384,979,000. In which: IDA fund: USD 310,000,000 GEF grants fund (GEF) USD 6,090,831 Central Counterpart fund: USD 72,693,450 Provincial Counterpart fund: USD 2,432,000 The Project started on 11 July 2016 (the signing date of the Financing Agreement) and is expected to be completed by 31 December 2022. 2. ACCOUNTING CONVENTION AND FINANCIAL YEAR Accounting convention The financial statements, expressed in Vietnam Dong (VND), are prepared under the historical cost convention except for the Statement of Designated Account and Statement of Withdrawals which are expressed in original currencies. These financial statements are prepared in accordance with the accounting policies set out in Note 3 and requirements of the World Bank. 17 U MEKONG DELTA INTEGRATED CLIMATE RESILIENCE FINANCIAL STATEMENTS AND SUSTAINABLE LIVELIHOODS PROJECT For the year ended Financing Agreement No. 5845-VN and Grant Agreement No. TFA8261 31 December 2020 NOTES TO THE FINANCIAL STATEMENTS (Continued) These notes are on integral part of and should be read in conjunction with the accompanying financial statement The financial statements were prepared on the basis of aggregation of figures of Project implementing units, including CPMU, Irrigation Investment and Construction Management Board No.10 under the Ministry of Agriculture and Rural Development ("ICMB 10"), Sub-project Management Unit 6 of Mekong Delta Comprehensive Infrastructure Development Scheme for Climate Change Adaptation and Socio- Economic Development under the Ministry of Planning and Investment (PMU 6 - Ministry of Planning and Investment), Management of Construction Investment Projects - Ministry of Natural Resources and Environment ("MONRE") and Provincial Project Management Units (PPMU An Giang, PPMU Dong Thap, PPMU Kien Giang, PPMU Ca Mau, PPMU Bac Lieu, PPMU Ben Tre, PPMU Tra Vinh, PPMU Soc Trang and PPMU Vinh Long). 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 CPMU 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 ng at the transaction date. From 2020 onwards, Closing balances of monetary items denominated in f eign currencies are retranslated as the guidance of the Accounting system applicable to Project Management Unit using public investment capital issued in conjunction with Circular No. 79/2019/TT-BTC dated 14 November 2019 by the Ministry of Finance. Circular No. 79/2019/TT/BTC takes effect from 01 January 2020 and applies from 2020 onwards, replacing Circular No. 195/2012/TT-BTC dated 15 November 2012 of the Minister of Finance on accounting guidelines applicable to the investor unit. Foreign exchange differences are not cash flows. However, the effect of changes in foreign exchange rates is reported separately in the Statement of Income and Expenditures and Statement of Resources 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 recognized on cash basis. Expenditures are recognized on accrual basis. 4. DESIGNATED ACCOUNTS Designated Accounts are bank accounts in United States Dollar (USD) opened at Joint Stock Commercial Bank for Investment and Development of Vietnam for the implementation of the Project's activities. Payments out of the Designated Accounts are for expenditures in accordance with the relevant covenants of Financing Agreement No. 5845-VN, Grant Agreement No. TFA8261 and relevant regulations established by the World Bank. According to the Disbursement Letter on 11 July 2016 from the World Bank, there are 11 designated accounts to be opened for the implementation of the Project's activities, including those opened for the CPMU, ICMB10, PMU 6 - Ministry of Planning and Investment, Management of Construction Investment Projects - Ministry of Natural Resources and Environment, PPMU An Giang, PPMU Dong Thap, PPMU Ben Tre, PPMU Soc Trang, PPMU Bac Lieu, PPMU Ca Mau and PPMU Kien Giang. 18 U BI MEKONG DELTA INTEGRATED CLIMATE RESILIENCE FINANCIAL STATEMENTS AND SUSTAINABLE LIVELIHOODS PROJECT For the year ended Financing Agreement No. 5845-VN and Grant Agreement No. TFA8261 31 December 2020 NOTES TO THE FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying financial statement As of 31 December 2020, there is one designated account related to Grant Agreement No. TFA8261 of PPMU opened and traded, and eleven designated accounts related to Financing Agreement No. 5845-VN opened and traded, including those of CPMU, PMU 6 - Ministry of Planning and Investment, ICMB10, Management of Construction Investment Projects - Ministry of Natural Resources and Environment, PPMU Kien Giang, PPMU Soc Trang, PPMU Ben Tre, PPMU An Giang, PPMU Dong Thap, PPMU Bac Lieu and PPMU Ca Mau. 5. CASH 31/12/2020 31/12/2019 VND VND Cash on hand 112,070,778 119,609,546 PPMU Dong Thap 19,312,778 6,556,778 PPMU Kien Giang 80,980,000 97,052,768 PPMU Ca Mau 11,778,000 16,000,000 Cash in bank, State treasury 203,971,183,528 396,867,826,114 CPMU 12,036,782,163 2,010,834,391 Sub project Management Unit 6 - Ministry of Planning and 37,474,277,178 26,750,133,632 Management of Construction Investment Projects - Ministry of 8,945,058,175 4,211,871,994 Natural Resources and Environment (MONRE) In which: cash in State treasury at MONRE (*) 617,578,170 366,248,526 ICMB 10 2,496,017,727 41,905,145,393 In which: cash in bank at ICMB10 (*) 50,547,000 2,050,647,000 PPMU DongThap 3,607,154,420 10,078,255,495 PPMU Ca Mau 5,483,400,939 35,793,070,966 in which: cash in bank and State treasury at PPMU Ca Mau (*) 3,020,795,219 PPMU Bac Ueu 11,199,310,603 58,836,775,000 In which: cash in bank and State treasury at PPMU Bac Lieu (*) 9,828,799,175 PPMU Kien Giang 15,168,637,613 78,987,283,093 PPMU An Giang 49,722,233,263 56,950,312,150 In which: cash in bank and State treasury at PPMU An Giang (*) 13,710,762,036 PPMU Tra Vinh 1,907,773,000 PPMU Soc Trang 31,929,533,100 4,237,994,000 PPMU Ben Tre 24,001,005,347 77,106,150,000 In which: cash in State treasury at PPMU Ben Tre (*) 7,784,365 204,083,254,306 396,987,435,660 (*) MONRE, ICMB10, PPMU Ca Mau, PPMU Bac Lieu, PPMU Ben Tre and PPMU An Giang have not reconciled the balances of Cash in bank, State treasury with the total amount as at 31 December 2020 of VND 27,260,960,251 (as at 31 December 2019 with total amount of VND 6,603,065,012 at MONRE, ICMB10, PPMU Ca Mau and PPMU Bac Lieu and PPMU Kien Giang). The Central Project Management Unit has prudently assessed and believed that there were no material misstatements to the Financial statement of the Project. 19 MEKONG DELTA INTEGRATED CLIMATE RESILIENCE FINANCIAL STATEMENTS AND SUSTAINABLE LIVELIHOODS PROJECT For the year ended Financing Agreement No. 5845-VN and Grant Agreement No. TFA8261 31 December 2020 NOTES TO THE FINANCIAL STATEMENTS (Continued) These notes are on integralpart of and should be read in conjunction with the accompanying financial statement 6. PREPAYMENTS TO SUPPLIERS 31/12/2020 31/12/2019 VND VND CPMU 10,776,664,188 9,297,793,732 HaskoningDHV Vietnam Co., Ltd. 4,168,829,790 2,334,563,698 HaskoningDHV Holland Co., Ltd. 1,719,728,158 5,508,810,794 Others 4,888,106,240 1,454,419,240 Management of Construction Investment Projects - 48,321,214,170 21,993,113,737 Ministry of Natural Resources and Environment AirBus DS Geo SA 19,119,380,000 4,390,900,000 Swing Water Vietnam Co., Ltd. 14,446,715,820 Center for land fund development in Binh Thuy district 7,618,197,224 7,141,297,724 Others 7,136,921,126 10,460,916,013 ICMB 10 321,997,000 597,471,000 PPMU Soc Trang 113,874,631,889 91,049,895,000 Cu Lao Dung District Council for Compensation and Site Clearance 38,959,226,389 31,251,208,000 Thai Son Construction Investment and Trading Joint Stock Company 21,577,927,000 22,721,463,000 703 Construction and Investment Joint Stock Company 10,790,369,000 14,728,769,000 116 Infrastructure Development Joint Stock Company 9,365,011,000 11,811,347,000 Others 33,182,098,500 10,537,108,000 PPMU Ben Tre 34,561,825,395 - Hassyu Vietnam Joint Stock Company 15,740,773,255 -U Dai Thien Truong Joint Stock Company 12,434,863,415 - Others 6,386,188,725 - PPMU Dong Thap 5,061,538,000 6,541,094,000 PPMU Kien Giang 18,022,377,606 4,182,959,975 Tran Tran One Member Co., Ltd. 3,924,902,071 Hassyu Vietnam Joint Stock Company 3,860,724,000 - Southern Institute Water Resources Research 3,613,266,723 800,000,000 Others 6,623,484,812 3,382,959,975 PPMU Ca Mau 31,131,750,000 1,563,500,000 Thoi Binh Trading Construction Joint Stock Company 15,953,000,000 CADACO Construction Investment Joint Stock Company 5,639,000,000 Due Tam Hiep Co., Ltd. 3,191,000,000 Others 6,348,750,000 1,563,500,000 PPMU An Giang 89,408,025,123 757,860,000 Tu Lap Construction Co., Ltd. 26,877,628,483 - Nhac Son Co., Ltd 17,358,387,000 Hung Yen Irrigation Construction Joint Stock Company 16,114,775,462 - Others 29,057,234,178 757,860,000 PPMU Tra Vinh 3,356,064,000 274,000,000 PPMU Bac Lieu 66,102,626,495 210,000,000 Sea Construction Engineering Joint Stock Company in Hanoi 20,588,234,259 - Hassyu Vietnam Joint Stock Company 13,770,869,732 - Construction and Trading Service 555 Joint Stock Company 11,486,791,941 - Thao Nguyen Joint Stock Company 8,964,498,582 - Others 11,292,231,981 210,000,000 B 420,938,713,866 136,467,687,444 U 3 20 U MEKONG DELTA INTEGRATED CLIMATE RESILIENCE FINANCIAL STATEMENTS AND SUSTAINABLE LIVELIHOODS PROJECT For the year ended Financing Agreement No. 5845-VN and Grant Agreement No. TFA8261 31 December 2020 NOTES TO THE FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying financial statement 7. INTERNAL RECEIVABLES Internal receivables mainly include the cost of project management allocated to the Mekong Delta Integrated Climate Resilience and Sustainable Livelihoods Project belonging to the counterpart fund which has been advanced to the account of the Central Project Office in 2020, but not yet used up. Such amount will be recovered through the allocation of project management costs in 2021. U 8. TRADE PAYABLES 31/12/2020 31/12/2019 VND VND CPMU 5,703,988,950 3,527,013,900 Vietnam Investment and Development Consulting Limited Company 1,286,654,500 Center for sustainable community development 1,494,495,000 3,394,214,900 Others 2,922,839,450 132,799,000 Management of Construction Investment Projects - Ministry - 6,208,904,000 of Natural Resources and Environment ICMB 10 6,252,696,000 115,877,602,000 PPMU Kien Giang - 26,563,452,736 26,236,679,028 6i Tran Tran One member Company Limited 13,278,741,235 1,984,254,806 T Dai An Investment Construction JSC. 5,070,608,556 9,960,956,967 276 Mechanical and Construction JSC. 1,206,539,848 11,550,749,441 Hassyu Vietnam JSC. 1,384,010,995 1,086,620,672 Others 5,623,552,102 1,654,097,142 PPMU Bac Lieu 21,394,134,713 13,169,000,000 319 Bombs, Mines and Explosives Handling One Member Co., Ltd. 13,421,633,458 Thao Nguyen Joint Stock Company 5,532,467,856 Others 2,440,033,399 PPMU Ben Tre 5,780,353,611 1,503,493,447 PPMU Dong Thap 1,335,283,000 1,935,024,400 PPMU An Giang 391,861,150 152,104,550 PPMU Ca Mau 23,033,639,378 837,622,000 Pham Trang Co., Ltd. 4,810,983,600 - 319 Bombs, Mines and Explosives Handling One Member Co., Ltd. 4,469,000,000 Truong Son Construction Corporation 4,421,000,000 - Others 9,332,655,778 837,622,000 PPMU Soc Trang 3,888,435,113 867,815,113 94,343,844,651 170,315,258,438 U U U U 1 21 U 3 MEKONG DELTA INTEGRATED CLIMATE RESILIENCE FINANCIAL STATEMENTS AND SUSTAINABLE LIVELIHOODS PROJECT For the year ended Financing Agreement No. 5845-VN and Grant Agreement No. TFA8261 31 December 2020 NOTES TO THE FINANCIAL STATEMENTS (Continued) These notes are an integral port of and should be read in conjunction with the accompanying financial statement 9. IDA FUND U Accumulated to 31/12/2020 Accumulated to 31/12/2019 USD VND equivalent USD VND equivalent Designated Accounts 77,331,664.59 1,783,832,170,199 44,993,623.17 1,032,048,424,281 Direct payment 174,341.05 4,036,344,000 77,506,005.4 1,787,868,514,199 44,993,623.17 1,032,048,424,281 10. GRANT FUND Accumulated to 31/12/2020 Accumulated to 31/12/2019 USD VND equivalent USD VND equivalent Designated Account 288,353.72 6,658,706,253 288,353.72 6,658,705,253 - - 11. COUNTERPART FUND !G TY Accumulated to Accumulated to JHH 31/12/2020 31/12/2019 ')ITT) VND VND e NAN CPMU 31,585,299,951 22,881,611,400 p Management of Construction Investment Projects - Ministry of 72,513,456,578 56,970,686,413 Natural Resources and Environment PMU 6 - Ministry of Planning and Investment 4,173,442,506 3,517,480,985 ICMB 10 45,685,000,000 36,881,625,000 PPMU Kien Giang 33,796,039,269 22,533,587,269 PPMU An Giang 122,331,490,786 77,639,681,094 PPMU Dong Thap 40,537,192,000 24,500,000,000 PPMU Soc Trang 116,267,144,389 77,300,000,000 PPMU Vinh Long 8,929,186,915 8,929,186,915 PPMU Ca Mau 39,611,622,560 24,306,058,613 PPMU Bac Lieu 57,600,361,668 6,000,000,000 PPMU Tra Vinh 1,698,532,000 698,400,000 PPMU Ben Tre 1,151,775,747 495,000,000 575,880,544,369 362,653,317,689 B U U U 3 22 U MEKONG DELTA INTEGRATED CLIMATE RESILIENCE FINANCIAL STATEMENTS AND SUSTAINABLE LIVELIHOODS PROJECT For the year ended * Financing Agreement No. 5845-VN and Grant Agreement No. TFA8261 31 December 2020 NOTES TO THE FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying financial statement 12. PROJECT IMPLEMENTING EXPENDITURES U Project implementing expenditures by implementing unit Accumulated to 31/12/2020 VND VND CPMU 25,632,252,317 77,687,848,674 PMU 6 - Ministry of Planning and Investment 57,097,800,336 102,885,258,018 Management of Construction Investment Projects - Ministry of 19,511,615,501 204,704,863,801 Natural Resources and Environment ICMB 10 37,123,407,000 538,658,809,000 PPMU Kien Giang 145,688,461,751 254,062,697,815 PPMU An Giang 92,099,666,246 112,183,279,740 PPMU Dong Thap 31,836,372,662 61,598,769,121 PPMU Soc Trang 95,558,001,692 141,906,887,113 PPMU Vinh Long - 8,929,186,915 PPMU Ca Mau 187,903,767,378 208,629,962,452 PPMU Bac Lieu 87,708,313,624 105,340,893,624 PPMU Ben Tre 23,144,618,654 25,143,112,101 PPMU Tra Vinh 655,095,000 1,079,495,000 803,959,372,161 1,842,811,063,374 13. COMMITMENTS As at 31 December 2020, the total value of significant contracts for construction, installation of the Project which have been signed but not yet paid was about VND 939 billion (as at 31 December 2019: VND 623 billion). 14. COMPARATIVE FIGURES Comparative figures are the figures of the Project's audited financial statements for the year ended 31 December 2019. E N 0 is au N HYLI0 Pham Dinh Van Dang The Luong Duang Quoc Cuong Head of the Central Project Office Chief Accountant - Head of Preparer Accounting and Finance Department 15 September 2021 U U 23 U U U UATI UNEEDN UIOS SUAC EOTO INENLUOTO U U U U U U U U K AR! INEEDN UIOS SUAC EOTO INENL OTO Deloitte Vietnam Co., Ltd DELOITTE 15th Floor, Vinaconex Tower, D e lo itte o VIETNAM 34 Lang Ha Street, Lang Ha Ward, Dong Da District, Hanoi, Vietnam Tel: +84 2471050000 Making an impact since 1991 Fax: +84 24 6288 5678 www.deloitte.com/vn INDEPENDENT AUDITORS' ASSURANCE REPORT ON INTERNAL CONTROL To: The Central Project Office (CPO) The Central Project Management Unit of Mekong Delta Integrated Climate Resilience and Sustainable Livelihoods Project (CPMU) We have audited, in accordance with International Standards on Auditing, the financial statements of Mekong Delta Integrated Climate Resilience and Sustainable Livelihoods Project (the "Project") for the year ended 31 December 2020 and issued the Independent auditors' report on financial statements thereon dated 15 September 2021 expressing a qualified 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 the 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 C 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 D takes responsibility for its assertions as to the effectiveness of such internal control. V 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. 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. 24 DELOITTE Deloitte. VIETNAM Making an impact since 1991 INDEPENDENT AUDITORS' ASSURANCE REPORT ON INTERNAL CONTROL (Continuted) 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 qualified opinion, as well as our findings as presented in the Management Letter. Basis for Qualified Opinion Some Project implementing units inclusive of MONRE, ICMB10, PPMU Ca Mau, PPMU Ben Tre, PPMU Bac Lieu and PPMU An Giang have not reconciled the balances of cash in bank, State treasury belonging to Counterpart fund at 12 the year end. Accordingly, the above mentioned Project implementing units have not maintained effective controls over the balances of cash in bank, State treasury of the Project. 5NC TNI Qualified Opinion In our opinion, excepted for the effect of the matter described in "Basis for Qualified Opinion" section, 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 Project's financial statements as well as internal control over financial reporting for the year ended 31 December 2020. ,0112500'C TrcNG T N TN H D S NAM Tran Huy Cong Nguyen Thanh Huang Deputy General Director Auditor Audit Practising Registration Certificate Audit Practising Registration Certificate No. 0891-2018-001-1 No. 1415-2018-001-1 DELOIlTTE VIETNAM COMPANY LIMITED 15 September 2021 Hanoi, S.R. Vietnam 25 ■― 園 鵬 . . . ■ . & ■ . ■ . . PART 111 . なミ 園INDEPENDENTAUDITORS,ASsURANCE R印ORT ON COMPLIANCE ミ ■，J 、T& . NA ．て . . ■ . . ■ . ■ . ■ & & . ■ ■ MEKONG DELTA INTEGRATED CLIMATE RESILIENCE AND SUSTAINABLE LIVELIHOODS PROJECT Financing Agreement No. 5845-VN and Grant Agreement No. TFAB261 STATEMENT OF THE CENTRAL PROJECT MANAGEMENT UNIT ON COMPLIANCE The Central Project Management Unit is responsible for complying with Financing Agreement No. 5845-VN, Grant Agreement No. TFA8261, laws and regulations applicable to the Project. The Central Project Management Unit confirms the following: 0 An effective internal control has been designed and maintained over compliance with Financing Agreement No. 5845-VN, Grant Agreement No. TFA8261, laws and regulations applicable to the Project; 0 The Project has complied with Financing Agreement No. 5845-VN, Grant Agreement No. TFA8261, laws and regulations that could have a direct and material financial effect on the Project's financial statements for the year ended 31 December 2020; a The Project's receipts and disbursements via the designated accounts for the year ended 31 December 2020 are in accordance with the relevant covenants of Financing Agreement No. 5845-VN, Grant Agreement No. TFA8261 and prevailing relevant regulations established by the World Bank; 0 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 2020 and those SOEs were adequately supported; The proceeds of the loan, grant were used only for the purpose(s) of the Project. For and on behalf of the Central Project Management Unit, N PH4,r BAN QUAN L TRUNG Lf G 1 0) 0 CAC DU iN TH Y Ldl (CPO Pham Dinh Van Head of the Central Project Office 15 September 2021 26 0 Delaitte Vietnam Co., Ltd DELOITTE 15(h Floor, Vinaconex Tower, D e lo itte o VIETNAM 34 Lang Ha Street, Lang Ha Ward, Dong Da District, Hanoi, Vietnam Tel: +84 24 7105 0000 Making an impact since 1991 Fax: +84 24 6288 5678 www.deloitte.com/vn INDEPENDENT AUDITORS' ASSURANCE REPORT ON COMPLIANCE To: The Central Project Office (CPO) The Central Project Management Unit of Mekong Delta Integrated Climate Resilience and Sustainable Livelihoods Project (CPMU) We have audited, in accordance with International Standards on Auditing, the financial statements of Mekong Delta Integrated Climate Resilience and Sustainable Livelihoods Project (the "Project") for the year ended 31 December 2020 and issued the independent auditors' report thereon on financial statements dated 15 September 2021 expressing a qualified 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 No. 5845-VN, Grant Agreement No. TFA8261, laws and regulations that could have a direct and material financial effect on the Project's financial statements for the year ended 31 December 2020 (the "requirements"). Responsibilities of Central Project Management Unit Central Project Management Unit is responsible for complying with Financing Agreement No. 5845-VN, Grant Agreement No. TFA8261, 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. A 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 qualified opinion as well as our findings as presented in the Management Letter. 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. 27 * S E L LDELOITTE Deloitte. VIETNAM Making an impact since 1991 INDEPENDENT AUDITORS' ASSURANCE REPORT ON COMPLIANCE (Continued) Basis for Qualified Opinion Some Project implementing units inclusive of MONRE, ICMB10, PPMU Ca Mau, PPMU Ben Tre, PPMU Bac Lieu and PPMU An Giang have not reconciled the balances of cash in bank, State treasury belonging to Counterpart fund at the year end. Accordingly, the abovementioned Project implementing units have not adequately complied with the regulations on management of cash in bank, State treasury of the Project. Qualified Opinion In our opinion: * Except for the effects of the matter described in the "Basis for Qualified Opinion" section, the Project has complied, in all material respects, with Financing Agreement No. 5845-VN, Grant Agreement No. TFA8261, laws and regulations that could have a direct and material financial effect on the Project's financial statements for the year ended 31 December 2020; * The Project's receipts and disbursements via the designated accounts for the year ended 31 December 2020 are in accordance with the relevant covenants of Financing Agreement No. 5845-VN, Grant Agreement No. TFA8261 and prevailing relevant regulations established by the World Bank; * The withdrawal applications were adequately reconciled to the statements of expenditures (SOEs) prepared by Central Project Management Unit for the year ended 31 December 2020 and those SOEs were adequately q supported; * The proceeds of the loan, grant were used only for the purpose(s) of the Project. .0112500 CNG TY T NAMo Tran Huy Cong Nguyen Thanh Huong Deputy General Director Auditor Audit Practising Registration Certificate Audit Practising Registration Certificate No. 0891-2018-001-1 No. 1415-2018-001-1 DELOITTE VIETNAM COMPANY LIMITED 15 September 2021 Hanoi, S.R. Vietnam U U U 28 U PART IV MANAGEMENT LETTER ZO Deloitte Vietnam Co., Ltd DELOITTE 15th Floor, Vinaconex Tower, D e lo itte o VIETNAM 34 Lang Ha Street, Lang Ha Ward, Dong Da District, Hanoi, Vietnam Tel: +84 24 7105 0000 Making an impact since 1991 Fax: +84 24 6288 5678 www.de!oitte.com/vn MANAGEMENT LETTER To: The Central Project Office ("CPO") The Central Project Management Unit of Mekong Delta Integrated Climate Resilience and Sustainable Livelihoods Project ("CPMU") U Dear Sirs, We have audited, the financial statements of Mekong Delta Integrated Climate Resilience and Sustainable Livelihoods Project (the "Project") for the year ended 31 December 2020 in accordance with International Standards on Auditing and issued the Independent auditors' report on financial statements thereon dated 15 September 2021 expressing a qualified opinion. In connection with our audit, we noted certain matters concerning the Project's management which we wish to bring to your attention. We enclose our comments and recommendations on the matters noteworthy to assist the CPMU in overcoming the outstanding weaknesses in management. We would like to note, however, that the matters raised herein are part of an ordinary audit designed to enable us T to express an opinion on the Project's financial statements. Therefore, these comments and recommendations do :EI not cover all the weaknesses that may exist in management. AE The matters raised in this letter have been discussed with the CPMU, whose comments are presented in "CPMU's responses". We would like to take this opportunity to express our sincere thanks to the members of the CPMU for their co- operation and courtesies extended to us during the course of our audit. Your 40112500.C <7CNG TY TNHH D .T AM Tran Huy Cong Deputy General Director DELOllTE VIETNAM COMPANY LIMITED 15 September 2021 Honoi, S.R. Vietnam Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited ("DTTL"), its global network of member firms, and their related entities. OTTL (also referred Wto as "Deloitte Global") and each of its member firms and their affiliated entities are legally separate and independent entities. DTTL does not provide seryices to clients. Please see www.deloitte.com/about to learn more. 29 MEKONG DELTA INTEGRATED CLIMATE RESILIENCE AND SUSTAINABLE LIVELIHOODS PROJECT Financing Agreement No. 5845-VN and Grant Agreement No. TFA8261 TABLE OF CONTENTS CONTENTS PAGES 1. CURRENT STATUS OF PRIOR YEAR'S FINDINGS 31 II. LIST OF CURRENT YEAR'S FINDINGS 1. Expense recognition in incorrected accounting period 32 2. Revaluation of year-end foreign exchange rate 32 325o %JG TY 0ITT T NAA 30 * MEKONG DELTA INTEGRATED CLIMATE RESILIENCE AND SUSTAINABLE MANAGEMENT LETTER LIVELIHOODS PROJECT For the year ended Financing Agreement No. 5845-VN and Grant Agreement No. TFA8261 31 December 2020 1. CURRENT STATUS OF PRIOR PERIOR'S FINDINGS Prior year's findings Current year's status Issue related to accounting management The Management of Construction investment Projects - Remained outstanding. Ministry of Natural Resources and Environment (MONRE) has not set up a separate accounting book for the Project. Liability management Some PPMUs failed to adequately check the liability balances Remained outstanding in MONRE, with the contractors at the balance sheet date (MONRE, PPMU PPMU Bac Lieu, PPMU Ca Mau and An Giang, PPMU Soc Trang, PPMU Bac Lieu, PPMU Ben Tre). PPMU Soc Trang. Management of cash in bank, State treasury Some PPMUs failed to adequately reconcile balances of cash in Remained outstanding in MONRE, bank, State treasury with banks, State treasury at the balance sheet date (MONRE, ICMB10, PPMU Ca Mau, PPMU Bac Lieu iCB, PPMU Ca au, PPMU Bac and PPMU Kien Giang) Lieu, PPMU An Giang and PPMU Ben * Tre. Bidding progress Remained outstanding. Some bidding In 2019, based on the approved procurement plan, we have packages of The Management of- found that some packages were behind schedule. Construction Investment Projects - Ministry of Natural Resources and Environment still be behind schedule. Issue related to misstatement to invoices in payment At the ICMB10 - Can Tho, we found some invoices lacked the Resolved. buyer's signature or tax code, had incorrect buyer addresses or were handwritten with blank space that was not crossed out Disbursement progress The actual disbursement rate of the Project as at 31 December The actual disbursement rate of the 2019 reached approximately 11% of the total project capital although 2019 is the fourth year of implementation and the end rectes a t 1 D m 202 of Project is expected on 31 December 2022. The project reaches approximately 24% of the implementation schedule should be accelerated to ensure the total project capital. completion of the project's overall plan with the expected completion on 31 December 2022. U U U 31 U U MEKONG DELTA INTEGRATED CLIMATE RESILIENCE AND SUSTAINABLE MANAGEMENT LETTER LIVELIHOODS PROJECT For the year ended Financing Agreement No. 5845-VN and Grant Agreement No. TFA8261 31 December 2020 II. LIST OF CURRENT YEAR'S FINDINGS 1. Expense recognition in incorrected accounting period Observation Through reviewing the supporting documents at the some units (ICMB10, PPMU Ca Mau, PPMU Bac Lieu), we see that expenses of some work volume have been accepted for completion in 2020 but are accounted for in financial statements of 2021 while expenses of some work volume that are accepted for completion in 2021 have been recorded in the financial statements of 2020 (ICMB10). Auditors' recommendations The Project Management Inits need to review the point of time when expenses of some work volume are accepted for the completion to record expenses and liabilities in proper accounting period. The misstatement have been corrected the Project's financial statements. CPMU's responses Agree with the recommendations of the auditors. 2. Revaluation of year-end foreign exchange rate Observation Some Project Management Units have not revalued or revalued incorrectly the year-end foreign exchange rate for the foreign currency denominated balance of designated account at balance sheet date of 31 December 2020 under the guidance of Circular No. 79/2019/TT-BTC dated 14 November 2019 of the Ministry of Finance. Auditors' recommendations Project Management Units need to evaluate the foreign exchange rate for foreign currency denominated balance at the balance sheet date under the guidance of Circular No. 79/2019/TT-BTC dated 14 November 2019 of the Ministry of Finance to present properly items on the Financial statements. CPMU's responses Agree with the recommendations of the auditors. U U U3