Regional Disaster Vulnerability Reduction Project (RDVRP) IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 Saint Vincent and the Grenadines Special Purpose Project Financial Statements and Independent Auditor’s Report For the period 01 January 2021 to 31 May 2022 Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 CONTENTS Table of Contents Page Statement of Management’s responsibilities for the preparation and approval of the 3 Special Purpose Project Financial Statements for the period 01 January 2021 to 31 May 2022 Independent Auditor’s Report 8 Special Purpose Project Financial Statements for the period 01 January 2021 to 31 May 2022 Statement of Designated Account 11 Statement of Sources and Uses of Funds 13 Statement of Cumulative Investments 18 Notes to Special Purpose project financial statements 20 2 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 Statement of Management’s responsibilities for the preparation and approval of the Special Purpose Project Financial Statements for the period 01 January 2021 to 31 May 2022 3 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 4 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 5 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 6 Privileged Privileged Information Information SARB & Associates CHARTERED ACCOUNTANTS 404, Second Floor, Patparganj Industrial Area, New Delhi - 110092, India Tel: +91-11-45639681 | Email: info@sarb.co.in | Website: www.sarb.co.in INDEPENDENT AUDITOR’S REPORT To The Director of Economic Planning Ministry of Finance, Economic Planning, Sustainable Development and Information Technology Kingstown, Saint Vincent and the Grenadines Report on the Special Purpose Project Financial Statements Opinion We have audited the special purpose project financial statements of "Regional Disaster Vulnerability Reduction Project", (the "Project") which comprise the statement of designated account reconciliation, statement of sources and uses of funds and statement of cumulative investments for the period 01 January 2021 to 31 May 2022, and a summary of significant accounting policies and other explanatory information (the "special purpose project financial statements"). In our opinion, the accompanying special purpose financial statements present fairly, in all material respects, cash proceeds and disbursements and uses of funds by project components of the Project for the period 01 January 2021 to 31 May 2022, in accordance with International Public Sector Accounting Standard "Financial Reporting Under the Cash Basis of Accounting" (the "IPSAS") issued by the International Public Sector Accounting Standards Board of the International Federation of Accountants, and the World Bank's Financial Management Sector Board's "Guidelines: Annual Financial Reporting and Auditing for World Bank Financed Activities" (the "WB Guidelines"). Basis of Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Project in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the special purpose project financial statements in Saint Vincent and the Grenadines, 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 All the expenditure reviewed for the period in our opinion satisfied the eligibility criteria except for the following expenditures 8 Privileged Privileged Information Information SARB & Associates CHARTERED ACCOUNTANTS 404, Second Floor, Patparganj Industrial Area, New Delhi - 110092, India Tel: +91-11-45639681 | Email: info@sarb.co.in | Website: www.sarb.co.in 1. VAT and Withholding Tax amounting to USD 6,672.15 has not been paid and recognized as expenses. (Refer section 2.2.2 of the Management Letter). Our opinion is not qualified in respect of this matter. Further, we draw attention to Note 2 to the special purpose project financial statements which describe the basis of accounting. These special purpose project financial statements were prepared for complying with the appropriate World Bank Guidelines and Loan agreement requirements. Other matters The special purpose project financial statements are prepared to assist the Project to comply with the requirements of the World Bank. As a result, the special purpose project financial statements may not be suitable for another purpose. Responsibilities of Management and Those Charged with Governance for the special purpose project financial statements. Management is responsible for the preparation and fair presentation of the special purpose project financial statements in accordance with International Public Sector Accounting Standard "Financial Reporting Under the Cash Basis of Accounting" (the "IPSAS") issued by the International Public Accounting Standards Board of the International Federation of Accountants, and the World Bank's Financial Management Sector Board's "Guidelines: Annual Financial Reporting and Auditing for World Bank Financed Activities" (the "WB Guidelines"), and for such internal control as management determines is necessary to enable the preparation of the special purpose project financial statements that are free from material misstatement, whether due to fraud or error. Auditor's responsibilities for the audit of the special purpose project financial statements Our objectives are to obtain reasonable assurance about whether the special purpose project financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the special purpose project financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:  Identify and assess the risks of material misstatement of the special purpose project 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 9 Privileged Privileged Information Information SARB & Associates CHARTERED ACCOUNTANTS 404, Second Floor, Patparganj Industrial Area, New Delhi - 110092, India Tel: +91-11-45639681 | Email: info@sarb.co.in | Website: www.sarb.co.in our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Project's internal control.  Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.  Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Project's ability to continue as a going concern.  If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the special purpose project 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 auditor's report. However, future events or conditions may cause the Project to cease to continue as a going concern.  Evaluate the overall presentation, structure and content of the special purpose project financial statements, including the disclosures, and whether the special purpose project financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance 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. Bhushan Agrawal, Partner Membership Number: 408037 SARB & Associates CHARTERED ACCOUNTANTS Firm Registration Number: 017437C Date: 24/October/2022 Place: Delhi UDIN: 22408037BAXUGT8635 10 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 Special Purpose Project Financial Statements for the period 01 January 2021 to 31 May 2022 Bank of Saint Vincent and the Grenadines (Account Number 9016 & 9064– US Dollar Designated Accounts and Account number 135155 & 143363– Eastern Caribbean Dollar Accounts) For the period 01 January 2021 to 31 May 2022 Source of financing USD US$ IDA IDA TF TF TF TF Interest/ 4986 10206 11132 Misc. Total (50%) 5450 (35%) (15%) 016733 0A3698 Income 1 Total advanced by World Bank 62,072,416 8,731,975 31,339,861 7,000,000 3,000,000 5,000,000 7,000,580 2 Less: eligible expenditure for the period 01- 23,960,188 4,563,526 16,862,780 - - - 2,533,881 Jan-2021 to 31-May-2022 documented by World Bank Less: cumulative eligible expenditure for the 36,730,408 4,168,449 13,095,261 7,000,000 3,000,000 5,000,000 4,466,699 prior periods ended on 31 December 2020 documented by World Bank 3 Present outstanding amount advanced to the 1,381,820 - 1,381,820 - - - - designated account (1 - 2) 4 Balance of USD designated account per bank 1,522,818 - 1,345,827 - - - - 176,991 reconciliation statement as at 31 May 2022 Balance of project account per bank 128,570 - 61,753 - - - - 66,818 reconciliation statement as at 31 May 2022 5 Plus: Eligible expenditure for the current year (25,759) - (25,759) - - - - documented after the year end (Audit fees) 6 Plus: Total amount withdrawn and not yet - - - - - - claimed Reason: ______________________________ 7 Plus: Amounts claimed in previous - - - - - - applications not yet credited at date of bank statements Subtotal of previous applications not yet - - - - - - credited 8 Less: Interest earned / Misc. Income (243,809) - - - - - - 9 Total advance accounted for (no. 4 through no. 1,381,820 - 1,381,820 - - - - 243,809 9) 10 difference (3 - 9) - - - - - - - Note: Audit fees amounting to USD 25,759 has been included in the final IFR but is still outstanding to be paid. 11 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 Statement of Designated Account Bank of Saint Vincent and the Grenadines (Account Number 9016 & 9064– US Dollar Designated Accounts and Account number 135155 & 143363– Eastern Caribbean Dollar Accounts) For the year ended 31 December 2020 (Expressed in United States Dollars) Source of financing USD US$ IDA IDA TF TF TF TF Interest/ 4986 10206 11132 Misc. Total (50%) 5450 (35%) (15%) 016733 0A3698 Income 1 Total advanced by World Bank 46,873,313 4,168,449 20,711,284 7,000,000 3,000,000 5,000,000 6,993,580 2 Less: eligible expenditure for the current 15,666,325 - 12,616,113 - 905,607 11,815 2,132,790 year ended 31 December 2020 documented by World Bank Less: cumulative eligible expenditure for the 21,064,083 4,168,449 479,148 7,000,000 2,094,393 4,988,185 23,33,909 prior periods ended on 31 December 2019 documented by World Bank 3 Present outstanding amount advanced to the 10,142,904 - 7,616,023 - - - 2,526,881 designated account (1 - 2) 4 Balance of USD designated account per bank 3,944,920 - 3,478,926 - - - 309,093 156,901 reconciliation statement as at year end 31 December 2020 Balance of project account per bank 1,873,754 - 1,640,837 - - - 178,525 54,392 reconciliation statement as at year end 31 December 2020 5 Plus: Eligible expenditure for the current 4,535,523 - 2,496,260 - - - 2,039,263 year documented after the year end 6 Plus: Total amount withdrawn and not yet - - - - - - claimed Reason: ______________________________ 7 Plus: Amounts claimed in previous - - - - - - applications not yet credited at date of bank statements Subtotal of previous applications not yet - - - - - - credited 8 Less: Interest earned / Misc. Income (211,292) - - - - - - 9 Total advance accounted for (no. 4 through 10,142,904 0 7,616,023 - - - 2,526,881 211,292 no. 9) 10 difference (3 - 9) - - - - - - - 12 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 Statement of Sources and Uses of Funds For the period 01-Jan-2021 to 31-May-2022 Part A – Current Period (01-Jan-2021 to 31-May-2022) (Expressed in United States Dollars) RECEIPTS Current Period (USD) – Actuals 01-Jan-2021 to 31-May-2022 IDA 4986 TF 11132 TF 10206 Other IDA 5450 Source of Financing Total (50%) (15%) (35%) TF 016733 TF 0A3698 Income World Bank Designated Account 15,199,103 4,563,526 10,628,577 - - - 7,000 - Direct Payment - - - - - - - Retroactive Financing - - - - - - - Other Income 57,910 - - - - - 57,910 Total Receipts (A) 15,257,013 4,563,526 10,628,577 - - - 7,000 57,910 LESS EXPENDITURES Component 1 4,435,571 621,316 3,542,129 - - - 272,126 - Component 2 14,442,041 3760586 10,459,059 - - - 222,395 - Component 3 - - - - - - - - Component 4 547,053 181,624 365,332 - - - 98 Bank charges (Interest Exp. & Ex. Loss) 30,230 - - - - - - 30,230 Accounts receivable (4,837) - - - - - - (4,837) Total Expenditures (B) 19,450,058 4,563,526 14,366,520 - - - 494,618 25,393 RECEIPTS LESS EXPENDITURES Net Change in Cash (A - B) (4,193,045) - (3,737,943) - - - (487,618) 32,516 Foreign Exchange Adjustment BANK BALANCES Opening Cash Balances Designated Account 9016 3,635,887 - 3,478,926 - - - - 156,961 Project Account 135155 1,680,527 - 1,640,837 - - - - 39,690 Designated Account 9064 309,032 - - - - - 309,093 (61) Project Account 143363 193,227 - - - - - 178,525 14,702 Total Opening Balance 5,818,674 - 5,119,763 - - - 487,618 211,292 Closing Cash Balances Designated Account 9016 1,522,818 - 1,345,827 - - - - 176,991 Project Account 135155 128,570 - 61,753 - - - - 66,818 Total Closing Balance 1,651,388 - 1,407,580 - - - - 243,809 Note: The above expenditure of USD 14,366,520 (IDA 5450) includes the provision of Audit Fees for the period amounting to USD 25,759 13 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 Part B – Current Period End Cumulative Current Period End Cumulative (USD) RECEIPTS Actual Total IDA 4986 TF 11132 TF 10206 EDF GRANT Other IDA 5450 Source of Financing (50%) (15%) (35%) TF 016733 TF 0A3698 Income World Bank Designated Account 62,072,416 8,731,974 31,339,861 3,000,000 7,000,000 5,000,000 7,000,580 - Direct Payment 1,292,980 1,292,980 - - - - - - Retroactive Financing - - - - - - - - Other Income 275,039 - - - - - - 275,039 Total Receipts (A) 63,640,435 10,024,954 31,339,861 3,000,000 7,000,000 5,000,000 7,000,580 275,039 LESS EXPENDITURES Component 1 25,339,018 2,045,954 9,707,045 1,771,436 4,265,019 3,697,355 3,852,209 - Component 2 31,124,727 5,248,309 19,264,112 886,411 1,774,090 807,816 3,143,989 - Component 3 1,905,352 1,905,352 - - - - - - Component 4 3,614,522 825,382 986,884 342,154 960,891 494,828 4,383 - Bank charges (Interest Exp. & Ex. 31,189 (42) - - - - - 31,231 Loss) Total Expenditures (B) 62,014,807 10,024,954 29,958,041 3,000,000 7,000,000 5,000,000 7,000,580 31,231 RECEIPTS LESS EXPENDITURES Net Change in Cash (A - B) 1,625,629 - 1,381,820 - - - - 243,809 Note: The above expenditure of USD 29,958,041 (IDA 5450) includes the provision of Audit Fees for the period amounting to USD 25,759 14 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 Part C – Previous Year End Cumulative Previous Year End Cumulative (USD) RECEIPTS Actual Total IDA 4986 TF 11132 TF 10206 EDF GRANT Other IDA 5450 Source of Financing (50%) (15%) (35%) TF 016733 TF 0A3698 Income World Bank Designated Account 46,873,312 4,168,448 20,711,284 3,000,000 7,000,000 5,000,000 6,993,580 - Direct Payment 1,292,980 1,292,980 - - - - - - Retroactive Financing - - - - - - - - Other Income 217,129 - - - - - - 217,129 Total Receipts (A) 48,383,422 5,461,428 20,711,284 3,000,000 7,000,000 5,000,000 6,993,580 217,129 LESS EXPENDITURES Component 1 20,903,446 1,424,638 6,164,915 1,771,436 4,265,019 3,697,355 3,580,083 - Component 2 16,681,075 1,487,723 8,803,441 886,411 1,774,090 807,816 2,921,594 - Component 3 1,905,352 1,905,352 - - - - - - Component 4 3,069,080 643,758 623,164 342,154 960,891 494,828 4,285 - Bank charges (Interest Exp. & Ex. Loss) 959 (42) - - - - - 1,001 Accounts receivable 4,837 4,837 Total Expenditures (B) 42,564,749 5,461,428 15,591,521 3,000,000 7,000,000 5,000,000 6,505,962 5,838 RECEIPTS LESS EXPENDITURES Net Change in Cash (A - B) 5,818,674 - 5,119,763 - - - 487,618 211,293 15 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 Statement of Sources and Uses of Funds For the period 01-Jan-2021 to 31-May-2022 with comparative figures of year ended 2020(Expressed in United States Dollars) RECEIPTS Current Period (USD) – Actuals 01-Jan-2021 to 31-May-2022 IDA 4986 TF 11132 TF 10206 Other IDA 5450 Source of Financing Total (50%) (15%) (35%) TF 016733 TF 0A3698 Income World Bank Designated Account 15,199,103 4,563,526 10,628,577 - - - 7,000 - Direct Payment - - - - - - - Retroactive Financing - - - - - - - Other Income 57,910 - - - - - 57,910 Total Receipts (A) 15,257,013 4,563,526 10,628,577 - - - 7,000 57,910 LESS EXPENDITURES Component 1 4435,571 621,316 3,542,129 - - - 272,126 - Component 2 14,442,041 3760586 10,459,059 - - - 222,395 - Component 3 - - - - - - - - Component 4 547,053 181,624 365,332 - - - 98 Bank charges (Interest Exp. & Ex. Loss) 30,230 - - - - - - 30,230 Accounts receivable (4,837) - - - - - - (4,837) Total Expenditures (B) 19,450,058 4,563,526 14,366,520 - - - 494,618 25,393 RECEIPTS LESS EXPENDITURES Net Change in Cash (A - B) (4,193,045) - (3,737,943) - - - (487,618) 32,516 Foreign Exchange Adjustment BANK BALANCES Opening Cash Balances Designated Account 9016 3,635,887 - 3,478,926 - - - - 156,961 Project Account 135155 1,680,527 - 1,640,837 - - - - 39,690 Designated Account 9064 309,032 - - - - - 309,093 (61) Project Account 143363 193,227 - - - - - 178,525 14,702 Total Opening Balance 5,818,674 - 5,119,763 - - - 487,618 211,292 Closing Cash Balances Designated Account 9016 1,522,818 - 1,345,827 - - - - 176,991 Project Account 135155 128,570 - 61,753 - - - - 66,818 Total Closing Balance 1,651,388 - 1,407,580 - - - - 243,809 Note: The above expenditure of USD 14,366,520 (IDA 5450) includes the provision of Audit Fees for the period amounting to USD 25,759 16 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 (Expressed in United States Dollars) RECEIPTS Previous Period (USD) – Actuals 2020 IDA 4986 TF 11132 TF 10206 Other IDA 5450 Source of Financing Total (50%) (15%) (35%) TF 016733 TF 0A3698 Income World Bank Designated Account 17,127,516 - 14,848,234 - - - 2,279,282 - Direct Payment - - - - - - - Retroactive Financing - - - - - - - Other Income 69352 - - - - - 69,352 Total Receipts (A) 17,196,868 - 14,848,234 - - - 2,279,282 69,352 LESS EXPENDITURES Component 1 6,281,658 - 4,742,144 - - - 1,539,514 - Component 2 9,581,778 - 7,657,660 - - - 1,924,118 - Component 3 - - - - - - - - Component 4 534,653 - 528,680 1,989 - - 3,984 Bank charges (Interest Exp. & Ex. Loss) 137 - - - - - - 137 Accounts receivable (1,865) - - - - - - (1,865) Total Expenditures (B) 16,396,361 - 12,928,484 1,989 - - 3,467,615 (1,728) RECEIPTS LESS EXPENDITURES Net Change in Cash (A - B) 800,507 - 1,919,750 (1,989) - - (1,188,333) 71.080 Foreign Exchange Adjustment BANK BALANCES Opening Cash Balances Designated Account 9016 2,942,982 - 2,819,924 1,753 - - - 121,305 Project Account 135155 390,121 - 380,090 236 - - - 9,794 Designated Account 9064 1,277,955 - - - - - 1,277,996 (41) Project Account 143363 407,109 - - - - - 397,956 9,153 Total Opening Balance 5,018,167 - 3,200,014 1,989 - - 1,675,952 140,212 Closing Cash Balances Designated Account 9016 3,635,887 - 3,478,926 - - - - 156,961 Project Account 135155 1,680,527 - 1,640,837 - - - - 39,690 Designated Account 9064 309,032 - - - - - 309,093 (61) Project Account 143363 193,227 - - - - - 178,525 14,702 Total Closing Balance 5,818,674 - 5,119,763 - - - 487,618 211,292 17 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 Statement of Cumulative Investments For the period 01 January 2021 to 31 May 2022 (Expressed in United States Dollars) Source of finance: IDA Credit Number 4986-VC For the period 01-Jan-2021 to 31-May-2022 Current Period Previous Current Period Prior Year Categories (USD) Year (USD) Cumulative (USD) Cumulative (USD) Actual 2021/22 Actual 2020 Actual Actual Category 1: Goods, works, Non-Consulting Services, Consultants Services, Training 4,563,526 - 8,119,645 3,556,119 and Operating Costs for parts A, B and D of the project Category 2: Goods, Works, Non-Consulting Services and Consultants Services for - 1,905,352 1,905,352 Emergency Recovery and Reconstruction subprojects under Part C of the Project Total 4,563,526 - 10,024,997 5,461,471 Source of finance : IDA Credit Number 5450-VC For the period 01-Jan-2021 to 31-May-2022 Current Period Previous Current Period Prior Year Categories (USD) Year (USD) Cumulative (USD) Cumulative (USD) Actual 2021/22 Actual 2020 Actual Actual Category 1: Goods, works, Non-Consulting Services, Consultants Services, Training and Operating Costs for parts A, B and D of the project 14,366,520 12,928,484 29.958.040 15,591,519 Category 2: Goods, Works, Non-Consulting Services and Consultants Services for Emergency Recovery and Reconstruction subprojects under Part C of the Project Total 14,366,520 12,928,484 29.958.040 15,591,519 Note: The above expenditure of USD 14,366,520 (IDA 5450) includes the provision of Audit Fees for the period amounting to USD 25,759 Source of finance : Grant Agreement Number SCF-PPCR Grant Number TF 011132 For the period 01-Jan-2021 to 31-May-2022 Current Period Previous Current Period Prior Year Categories (USD) Year (USD) Cumulative (USD) Cumulative (USD) Actual 2021/22 Actual 2020 Actual Actual Category 1: Goods, works, Non-Consulting Services, Consultants Services, Training and Operating Costs for parts A, B and D of the project - 1,989 3,000,000 3,000,000 Total - 1,989 3,000,000 3,000,000 18 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 Source of finance : Grant Agreement Number SCF-PPCR Grant Number TF010206 For the period 01-Jan-2021 to 31-May-2022 Current Period Previous Current Period Prior Year Categories (USD) Year (USD) Cumulative (USD) Cumulative (USD) Actual 2021/22 Actual 2020 Actual Actual Category 1: Goods, works, Non-Consulting Services, Consultants Services, Training and Operating Costs for parts A, B and D of the project - - 7,000,000 7,000,000 Total - - 7,000,000 7,000,000 Source of finance : Grant Agreement Number SCF-PPCR Grant Number TF 016733 For the period 01-Jan-2021 to 31-May-2022 Current Period Previous Current Period Prior Year Categories (USD) Year (USD) Cumulative (USD) Cumulative (USD) Actual 2021/22 Actual 2020 Actual Actual Category 1: Goods, works, Non-Consulting Services, Consultants Services, Training and Operating Costs for parts A, B and D of the project - - 5,000,000 5,000,000 Total - - 5,000,000 5,000,000 Source of finance : Grant Agreement Number EDF Grant Number TF 0A3698 For the period 01-Jan-2021 to 31-May-2022 Current Period Prior Year Current Period Previous Year Cumulative Cumulative (USD) (USD) Categories (USD) (USD) Actual 2021/22 Actual 2020 Actual Actual Category 1: Goods, works, Non-Consulting Services, Consultants Services, Training and Operating Costs for parts A, B and D of the project 494,618 3,467,615 6,505,962 Total 494,618 3,467,615 6,505,962 19 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 Notes to the Special Purpose Project Financial Statements For the period 01 January 2021 to 31 May 2022 1. BACKGROUND The main objective of the Saint Vincent and the Grenadines Regional Disaster Vulnerability Reduction Project (SVG RDVRP) is to measurably reduce vulnerability to natural hazards and climate change impacts in Saint Vincent and the Grenadines and in the Eastern Caribbean Sub-region. The SVG RDVRP in the amount of USD 20.9 million (USD 10.9 million International Development Agency (IDA) credit; USD 7.0 million Strategic Climate Fund Pilot (SCF) Program for Climate Resilience (PPCR12) grant; USD 3.0 million SCF loan) was approved by the Executive Board of Directors on June 23, 2011 and became effective on October 18, 2011, with an original Project closing date of December 31, 2016 . In the wake of the December 2013 floods disaster, the Project funding was scaled up by USD 40.6 million (PPCR grant – USD 5 million, unallocated national IDA 16 funds – USD 16.6 million; IDA Crisis Response Window – USD 19 million), effective November 12, 2014. The government of SVG subsequently signed agreements with the European Union (EU) and the World Bank to implement the 11th European Development Fund: B-envelope allocations through the RDVRP with a further expansion of the Project funding by USD 6.8 million grant; effective July 31, 2017. The Project finances the following four components: a. Component 1: Prevention and Adaptation Investments, which finances a combination of risk reduction investments and emergency reconstruction activities, prioritized in light of the December 2013 floods; b. Component 2: Regional Platforms for Hazard and Risk Evaluation and Applications for Improved Decision Making, which supports institutional strengthening and capacity building to better collect, manage, and apply climate risk and spatial information in development and planning decision making; c. Component 3: Natural Disaster Response Investments, which is a provisional component that would finance emergency recovery and reconstruction subprojects in the event of a disaster; and d. Component 4: Project Management and Implementation Support, which finances institutional capacity strengthening and operating costs for project management and implementation. 20 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 Project management The RDVRP is being implemented by the Public Sector Investment Programme Management Unit (PSIPMU) of the Economic Planning and Sustainable Development Division (EPSDD), Ministry of Finance, Economic Planning, Sustainable Development and Information Technology (MFEP), formerly the Central Planning Division (CPD). Program Cost and Financing for the Regional Disaster Vulnerability Reduction Project Part Component Activity Estimated Cost (USD) A Prevention and Adaptation Investments 36,111,869 B Regional Platform for Hazard and Risk Evaluation, 27,300,000 and Applications for Improved Decision Making C Natural Disaster Response Investments 2,000,000 D Project Management and Implementation Support 2,400,000 Total Project Financing 67,811,869 Source of Finance Source of finance Reference Amount (USD/million) IDA 4986-VC 10.92 IDA 5450-VC 35.6 CIF/PPCR Grant TF010206 7.0 CIF/PPCR Grant TF016733 5.0 SCF Loan TF011132 3.0 EU grant 11th European Development Fund 6.8 21 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 2. PRESENTATION OF THE SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTS Basis of preparation These special purpose project financial statements have been prepared in accordance with the International Public Sector Accounting Standard (the "IPSAS") "Financial Reporting under the Cash Basis of Accounting" issued by the Public Sector Committee of the International Federation of Accountants, and incorporate the following principal accounting policies, which have been consistently followed in all material respects and comply with the World Bank's Financial Management Sector Board's "Guidelines: Annual Financial Reporting and Auditing for World Bank Financed Activities" (the "WB Guidelines"). Under the cash basis approach income (or expenditure) is recognized when cash is received (or paid) irrespective of when goods or services are received or provided . a. Statement of compliance These special purpose project financial statements consist of  Statement of Designated Account  Statement of Sources and Uses of Funds  Statement of Cumulative Investments  Significant accounting policies and other explanatory information The reporting currency of these special purpose project financial statements is US Dollars ("USD"). b. Basis of measurement These special purpose project financial statements have been prepared on the historical cost basis. c. Functional and presentation currency The functional currency is United States Dollars (USD). The amounts expended in Eastern Caribbean Dollars (XCD) are converted to United States Dollars (USD) at exchange rate of 2.6882 for XCD. The reporting currency of the project is United States Dollars (USD) Transactions were made in other currencies also like Euro. 3. SIGNIFICANT ACCOUNTING POLICIES a. Cash basis of accounting The special purpose project financial statements are prepared on a cash basis of accounting. The cash basis of accounting recognizes transactions and events only when cash (including cash equivalents) is received or paid by the Project. The special purpose project financial statements prepared under the cash basis provide readers with information about the sources of cash raised during the period, the purposes for which cash was used and the cash balances at the reporting date. The measurement focus in the special purpose project financial statements is balances of cash and changes therein . 22 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 b. Foreign Currencies Transactions in foreign currencies other than USD and XCD are translated into United States dollars (USD) at the rate of exchange ruling (Bank of Saint Vincent and the Grenadines) at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated into United States dollars at the exchange ruling at the date. Foreign currency differences arising on retranslation are generally recognized income / expenditure. c. Funds received Funds received are recognized on the cash basis that is at the time when are received. d. Expenses Expenses are recorded on cash basis that is at the time of payment instead of when incurred except for the audit fee for the period 01 January 2021 to 31 May 2022. e. Round off The figures have been rounded off to the nearest whole digit. f. Sources of funds The funds were provided by the World Bank to the Project by replenishment of special account or through direct payment to the end supplier of goods and/or services. g. Restricted use of funds and other assets The Credit, Loan and Grant agreements require that the funds available in the Designated Account be restricted to the Project use only. Any project funds available at the end of the Project should be returned to the World Bank. h. Cash and cash equivalents Cash and cash equivalents include cash on hand and due from banks, which can be converted to the corresponding amount of cash in the short term. Cash and cash equivalents as at 31 May 2022 comprise: Account held at: Bank of Saint Vincent and the Grenadines Expressed in United States dollars (USD) Net IDA TF TF TF TF Interest / Total IDA 5450 4986 11132 10206 016733 0A3698 other income Designated Account 1522818 - 1,345,827 - - - - 176,991 (Account Number – 9016) USD Project Account 128570 - 61,753 - - - - 66,818 (Account Number – 135155) XCD Designated Account - - - - - - - - (Account Number – 9064) USD Project Account - - - - - - - - (Account Number – 143363) XCD Total 1,651,388 - 1,407,580 - - - - 243,809 23 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 Cash and cash equivalents as at 31 December 2020 comprise: Account held at: Bank of Saint Vincent and the Grenadines Expressed in United States dollars (USD) Net IDA TF TF TF TF Interest / Total IDA 5450 4986 11132 10206 016733 0A3698 other income Designated Account (Account 3,635,887 - 3478926 - - - - 156,961 Number – 9016) USD Project Account (Account 1,680,527 - 1640837 - - - - 39,690 Number – 135155) XCD Designated Account (Account 309,032 - - - - - 309,093 (61) Number – 9064) USD Project Account (Account 193,227 - - - - - 178,525 14,702 Number – 143363) XCD Total 5,818,674 - 5,119,763 - - - 487,618 211,292 i. Miscellaneous income Amounts represents non-refundable proceeds paid by bidders for bidding documents and cashing of bid security: Amounts represents non-refundable proceeds paid by Interest Bank Exchange Net Other bidders for bidding Year earned Charges rate loss Income documents and (B) (C.) (D) (A+B-C-D) cashing of Bid Security (A) 2012 2,207 390 18 - 2,579 2013 2,024 1,328 111 - 3,241 2014 - 1,407 55 - 1,352 2015 730 2,178 125 - 2,783 2016 2,182 2,206 124 - 4,264 2017 - 3,283 120 42 3,121 2018 10,857 126 - 10,731 2019 105,989 12,997 143 - 118,843 2020 - 69,352 137 - 69,215 2021/2022 57,910 30,230 - 27,680 Total 113,132 161,908 31,189 42 243,809 Bank charges are expensed for issuing monthly bank statements, transfer between accounts and bank balance confirmations. Exchange rate loss occur when cheques / wire transfer denominated in Eastern Caribbean dollars amounts are expensed from United States dollar denominated bank account or vice-versa. 24 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 j. Applications to Designated Account Current period (01-Jan-2021 to 31-May-2022) request for reimbursement Request for funds IDA 4986-VC Date Request Number Amount - USD 12-Mar-2021 RDVRP MF139 4,563,526 4,563,526 IDA 5450-VC Date Request Number Amount - USD 01-Jun-2021 RDVRP MF141 4,600,000 09-Dec-2021 RDVRP MF155 6,028,577 10,628,577 EDF GRANT TF 0A3698 23-Mar-2021 RDVRP TF MF 19 7,000 7,000 Total request for funds 15,199,103 Total received from World Bank 15,199,103 25 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 Previous year request for reimbursement (2020) Request for funds IDA 5450-VC Date Request Number Amount - USD 09-Mar-2020 RDVRP MF128 14,848,234 14,848,234 EDF GRANT TF 0A3698 24-Mar-2020 RDVRP TF MF11 663,802 14-Jul-2020 RDVRP TF MF13 663,802 15-Sep-2020 RDVRP TF MF119 810,679 06-Nov-2020 RDVRP TF MF116 141,000 2,279,282 Total request for funds 17,127,516 Total received from World Bank 17,127,516 26 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 (Expressed in United States Dollars) NOTES TO THE SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTS k. Cumulative Investment (Sub-categories) for the period 01 January 2021 to 31 May 2022 with previous year (2020) comparatives For the year ended 31 December 2020 Part A (Expressed in United States Dollars) Cumulative as at 31 December 2020 Investment Cost EDF IDA 4986 IDA 5450 TF 11132 TF 10206 TF 016733 GRANT TF Total 0A3698 USD USD USD USD USD USD USD Goods 3,116,798 2,602,618 345,357 867,991 32,148 - 6,964,913 Non consulting services 5,618 764 1,600 9,233 2,923 - 20,138 Consulting services 1,830,507 2,196,335 1,045,480 2,800,019 2,232,715 1,440,587 11,545,643 Trainings 128,542 3,571 37,161 149,873 12,247 - 331,394 Monitoring and Evaluation - - - 889 411 - 1,300 Operating costs 30,649 45,658 15,225 35,826 24,091 1,456 152,903 Works 349,195 10,742,506 1,555,030 3,135,928 2,695,403 5,063,822 23,541,884 Bank charges - - - - - - 679 Ineligible expenditure (CARCIP) - - - - - - - Bank charges on replenishment 120 68 147 240 62 98 735 Exchange Loss 42 - - - - 42 Total investment costs 5,461,471 15,591,520 3,000,000 7,000,000 5,000,000 6,505,962 42,559,632 27 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 (Expressed in United States Dollars) NOTES TO THE SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTS Part B (Expressed in United States Dollars) For the period 01 January 2021 to 31 May 2022 Investment Cost EDF TF IDA 4986 IDA 5450 TF 11132 TF 016733 GRANT TF Total 10206 0A3698 USD USD USD USD USD USD USD Goods 281,930 2,818,250 - - - - 3,100,180 Non consulting services - 2,232 - - - - 2,232 Consulting services 938,142 1,911,606 - - - 52,273 2,902,020 Trainings - - - - - - - Monitoring and Evaluation - - - - - - - Operating costs 11,174 43,192 - - - 98 54,463 Works 3,332,281 9,565,483 - - - 442,248 13,340,012 Bank charges - - - - - - Ineligible expenditure (CARCIP) - - - - - - Bank charges on replenishment - - - - - - Exchange Loss - - - - - - Total investment costs 4,563,526 14,340,762 - - - 494,618 19,398,907 28 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 (Expressed in United States Dollars) NOTES TO THE SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTS Part C (Expressed in United States Dollars) Cumulative as at 31 May 2022 Investment Cost EDF IDA 4986 IDA 5450 TF 11132 TF 10206 TF 016733 GRANT TF Total 0A3698 USD USD USD USD USD USD USD Goods 3,398,728 5,420,868 345,357 867,991 32,148 - 10,065,093 Non consulting services 943,760 2,996 1,600 9,233 2,923 - 960,512 Consulting services 1,830,507 4,107,940 1,045,480 2,800,019 2,232,715 1,492,859 13,509,521 Trainings 128,542 3,571 37,161 149,873 12,247 - 331,394 Monitoring and Evaluation - - - 889 411 - 1,300 Operating costs 41,823 88,849 15,225 35,826 24,091 1,553 207,366 Works 3,681,476 20,307,989 1,555,030 3,135,928 2,695,403 5,506,070 36,881,896 Bank charges - - - - - - 679 Ineligible expenditure (CARCIP) - - - - - - - Bank charges on replenishment 120 68 147 240 62 98 735 Exchange Loss 42 - - - - - 42 Total investment costs 10,024,997 29,932,282 3,000,000 7,000,00, 5,000,000 7,000,580 61,958,538 29 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 (Expressed in United States Dollars) NOTES TO THE SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTS l. Commitments In normal course of activities, the Project concludes agreements with suppliers of goods, works and service in accordance with the established budget and procurement plan. As at 31 May 2022, the Project had the following commitments: All amounts in USD Expenditure to May Remaining on Activity Procurement Activity Contract Date Contract Value 31, 2022 Contract Rehabilitation of roads, bridges and fords SVGRDVRP - W - NCB - 17 01-11-18 3,274,998.46 3,018,606.39 256,392.07 at Longline Road Coastal works - Sans Souci SVGRDVRP - W - ICB - 6 26/2/2020 3,168,857.00 2,863,069.62 405,079.15 Design and supervision of roads, bridges and fords rehabilitation at Grand Sable SVGRDVRP - C - QCBS - 28 01-05-18 1,297,511.24 1,161,114.56 136,396.68 River and Longline Road (Originally USD 798,337.16) Milton Cato Memorial Hospital: Technical SVGRDVRP - C- -QCBS - 5 01-11-17 1,402,605.40 1,296,760.00 39,374.08 Designs - Combined with LCS- 3 Project audits SVGRDVRP - C-LCS-8 24-09-18 210,885.67 168,772.18 42,113.49 Slope stabilisation works - Belle Isle SVGRDVRP-W-CW-RFB-7A 05-12-21 646,020.05 567,599.91 78,420.15 30 Privileged Privileged Information Information Regional Disaster Vulnerability Reduction Project (RDVRP) IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 Saint Vincent and the Grenadines Additional Information to the Special purpose Project Financial Statements For the period 01 January 2021 to 31 May 2022 31 Privileged Privileged Information Information CONTENTS Table of Contents Page Independent Auditor’s Report on Internal Controls 31 Independent Auditor’s Report on Compliance 33 Independent Auditor’s Report on Paid Application for Withdrawal 34 Independent Auditor’s Report on Designated Account Statement 35 Summary of Main Procedures Performed 36 32 Privileged Privileged Information Information SARB & Associates CHARTERED ACCOUNTANTS 404, Second Floor, Patparganj Industrial Area, New Delhi - 110092, India Tel: +91-11-45639681 | Email: info@sarb.co.in | Website: www.sarb.co.in Independent Auditors’ Report on Internal Controls To the GOSVG Ministry of Finance and Economic Planning Regional Disaster Vulnerability Reduction Project, IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 We have completed our audit of the financial resources managed during the period 01 January 2021 to 31 May 2022 under the Regional Disaster Vulnerability Reduction Project, IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 (the project). Our responsibility is to express an opinion on the Project’s Internal Control based on our audit. We conducted our audit in accordance with International Standards on Auditing, the World Bank Guidelines on the Project and the Terms of Reference for the engagement. International Standards on Auditing and World Bank Guidelines require that we plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatement. In planning and performing our audit, we considered the Project’s internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the Statement of Sources and Uses of Funds and not to provide assurance on the internal control structure. The project’s management is responsible for establishing and maintaining an adequate internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of an internal control structure are to provide management with reasonable but not absolute assurance that assets are safeguarded against losses from non-authorized uses or disposition and that transactions are executed according to management authorization and are adequately recorded in order to permit preparation of the financial statements in conformity with International Financial Reporting Standards and the project Agreement. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. For the purpose of this report, we have classified significant policies and procedures relative to the Project’s internal control structure into the entity level controls, which is the overall general control environment and specific control procedures which relates in various systems and application controls. These included controls over procurement of goods and services, receipts and disbursements, cashbook and bank account maintenance, the maintenance of proper accounting records and timely reporting of management and financial information. 33 Privileged Privileged Information Information SARB & Associates CHARTERED ACCOUNTANTS 404, Second Floor, Patparganj Industrial Area, New Delhi - 110092, India Tel: +91-11-45639681 | Email: info@sarb.co.in | Website: www.sarb.co.in Independent Auditors’ Report on Internal Controls (Cont’d) For each of the categories listed above, we obtained an understanding of the design and implementation of controls and the relevant policies and procedures and guidelines established by management in respect of the various controls in order to determine whether they have functioned efficiently during the period under review and assess the control risks. In our opinion, the Project's internal controls which existed during the period 01 January 2021 to 31 May 2022, in all material respects, were adequately designed for the purpose of the Project and operated in an effective manner, based on the assessment criteria above. Internal control deficiencies identified during the audit have been included in our internal control memorandum (management letter). These internal control deficiencies have no direct and material financial effect to the financial statements of the Project. The management letter also provides the current status of recommendations made in prior audits. This audit involved a historic evaluation of the effectiveness of internal control at a specific point of time. Thus, this audit does not provide assurance for future periods due to the risk that internal control may become inappropriate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate. Bhushan Agrawal, Partner Membership Number: 408037 SARB & Associates CHARTERED ACCOUNTANTS Firm Registration Number: 017437C Date: 24/October/2022 Place: Delhi UDIN: 22408037BAXUGT8635 34 Privileged Privileged Information Information SARB & Associates CHARTERED ACCOUNTANTS 404, Second Floor, Patparganj Industrial Area, New Delhi - 110092, India Tel: +91-11-45639681 | Email: info@sarb.co.in | Website: www.sarb.co.in Independent Auditors’ Report on Compliance To the GOSVG Ministry of Finance and Economic Planning Regional Disaster Vulnerability Reduction Project, IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 We have completed our audit of the financial resources managed during the period 01 January 2021 to 31 May 2022 under the Regional Disaster Vulnerability Reduction Project, IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 (the project). Our responsibility is to express an opinion on the Project’s compliance with the terms of the Project Agreement based on our audit. We conducted our audit in accordance with International Standards on Auditing, the World Bank Guidelines on the Project and the Terms of Reference for the engagement. International Standards on Auditing and World Bank Guidelines require that we plan and perform the audit to obtain reasonable assurance about whether the Project has complied with the terms of the Project Agreements. In our opinion, the project has in all material respects complied with the terms of the Project agreements for the period 01 January 2021 to 31 May 2022. Bhushan Agrawal, Partner Membership Number: 408037 SARB & Associates CHARTERED ACCOUNTANTS Firm Registration Number: 017437C Date: 24/October/2022 Place: Delhi UDIN: 22408037BAXUGT8635 35 Privileged Privileged Information Information SARB & Associates CHARTERED ACCOUNTANTS 404, Second Floor, Patparganj Industrial Area, New Delhi - 110092, India Tel: +91-11-45639681 | Email: info@sarb.co.in | Website: www.sarb.co.in Independent Auditors’ Report on Paid Applications for Withdrawal To the GOSVG Ministry of Finance and Economic Planning Regional Disaster Vulnerability Reduction Project, IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 We have completed our audit of the financial resources managed during the period 01 January 2021 to 31 May 2022 under the Regional Disaster Vulnerability Reduction Project, IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 (the project). Our responsibility is to express an opinion on the Project’s Paid Applications for Withdrawal based on our audit. We conducted our audit in accordance with International Standards on Auditing, the World Bank Guidelines on the Project and the Terms of Reference for the engagement. International Standards on Auditing and World Bank Guidelines require that we plan and perform the audit to obtain reasonable assurance about whether the Project has complied with the terms of the Project Agreements. As part of obtaining reasonable assurance as to whether the financial statements are free of material misstatement, we performed tests on the expenditure included in the Paid Applications for Withdrawal. These included testing eligibility, compliance with applicable Project Agreements and internal control procedures. In our opinion, the expenditures included in the Paid Applications for Withdrawal are eligible, the funds have been used only for Project purposes in accordance with the requirements established in the Project Agreement, and the internal control procedures used in the preparation of the Paid Applications for Withdrawal are adequate. Bhushan Agrawal, Partner Membership Number: 408037 SARB & Associates CHARTERED ACCOUNTANTS Firm Registration Number: 017437C Date: 24/October/2022 Place: Delhi UDIN: 22408037BAXUGT8635 36 Privileged Privileged Information Information SARB & Associates CHARTERED ACCOUNTANTS 404, Second Floor, Patparganj Industrial Area, New Delhi - 110092, India Tel: +91-11-45639681 | Email: info@sarb.co.in | Website: www.sarb.co.in Independent Auditors’ Report on the Designated Account Statement To the GOSVG Ministry of Finance and Economic Planning Regional Disaster Vulnerability Reduction Project, IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 We have audited the accompanying Designated Account for the period 01 January 2021 to 31 May 2022 under the Regional Disaster Vulnerability Reduction Project, IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 (the project). Our responsibility is to express an opinion on the Project’s Special Account based on our audit. We conducted our audit in accordance with International Standards on Auditing, the World Bank Guidelines on the Project and the Terms of Reference for the engagement. Those standards and the World Bank Guidelines require that we plan and perform the audit to obtain reasonable assurance as to whether the Project has complied with the terms of the Agreement. An audit includes examining appropriate evidence on a test basis. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the Designated Account Statement presents fairly in all material respects, the financial position of the Designated Account of Regional Disaster Vulnerability Reduction Project, IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 as of 31 May 2022 and of the Sources and Uses of Funds for the period 01 January 2021 to 31 May 2022. Bhushan Agrawal, Partner Membership Number: 408037 SARB & Associates CHARTERED ACCOUNTANTS Firm Registration Number: 017437C Date: 24/October/2022 Place: Delhi UDIN: 22408037BAXUGT8635 37 Privileged Privileged Information Information SARB & Associates CHARTERED ACCOUNTANTS 404, Second Floor, Patparganj Industrial Area, New Delhi - 110092, India Tel: +91-11-45639681 | Email: info@sarb.co.in | Website: www.sarb.co.in Summary of Main Audit Procedures Performed Regional Disaster Vulnerability Reduction Project, IDA Credit No. 4986-VC; IDA Credit No. 5450-VC; SCF-PPCR Grant No. TF010206; SCF-PPCR Loan No. TF011132; SCF-PPCR Grant No. TF016733; EDF Grant No. TF0A3698 1. Planning a) We performed the followings:  Understanding the project and its environment by going through Project Appraisal Document, Operational Manual; and World Bank Procurement Guidelines.  Understanding the nature and characteristics of internal controls relevant to the audit and components of internal controls.  Assessed the risk of material misstatement at both financial statements level and assertion level. b) Conducted entrance and exit meetings with senior staff and management of the Project Coordinating Unit. c) Development of overall audit strategy and audit plan, determining the nature, timing and extent of the audit procedures for each class of transactions, accounts and disclosures. d) We held interviews with the Project Coordinator, Senior Financial Management Analyst, Procurement Specialist, and Engineer - PSIPMU. 2. Evaluating Internal Control We performed the test of controls on the following areas: a) Compliance with applicable legislation b) Receipt and disbursements of project funds c) Designated and Project Bank account reconciliations d) Safeguarding of assets e) Data retention and supporting documentation f) Procurement of goods, works and services 3. Substantive audit procedures performed We performed the following substantive audit procedures in order to verify the existence, accuracy and completeness of the following: I. Cash and bank balances a) Confirmed bank balances at 31 May 2022. 38 Privileged Privileged Information Information SARB & Associates CHARTERED ACCOUNTANTS 404, Second Floor, Patparganj Industrial Area, New Delhi - 110092, India Tel: +91-11-45639681 | Email: info@sarb.co.in | Website: www.sarb.co.in b) Obtained copies of bank reconciliation statements for all bank accounts at 31 May 2022 and performed the following audit procedures:  We tested each bank reconciliation for mathematical accuracy;  Agreed general ledger balance as per reconciliation statement to general ledger for each bank account; and  Agreed bank balance shown on the bank reconciliation statement to the bank statement. II. Verification of funds received from the World Bank a) Examined credit advices for funds received during the period under review. b) Examined monthly bank statements to verify whether amounts received were credited to the appropriate account and included in the bank balance. c) Confirmed funds disbursed by the World Bank. d) Trace the amount received to the bank statement. III. Verification of expenditure a) We verified 91% of the expenditure listed in the financial statements to their supporting documentation. b) The items examined were agreed to invoices, receipts and forms of external documentation except as disclosed in the Report on Internal Controls Memorandum (Management Letter). c) We have reviewed all requests for reimbursements during the period. IV. Verification of other income a) We examined the bank statements to verify all interest earned during the period and tested the accuracy of interest earned. b) Reviewed all external supporting documentation for miscellaneous income. V. Verification of the procurement process a) We examined the World Bank Procurement Guidelines. b) Tested the procurement procedures for contracts tendered during the period. VI. Follow up on the status of findings of previous audit reports 39 Privileged Privileged Information Information SARB & Associates CHARTERED ACCOUNTANTS 404, Second Floor, Patparganj Industrial Area, New Delhi - 110092, India Tel: +91-11-45639681 | Email: info@sarb.co.in | Website: www.sarb.co.in We verified that audit recommendations of previous audits are being corrected/ not corrected. 40 Privileged Privileged Information Information