一 一■De■O面tte 一• 一■ 一． . . . . ■ • ■ • CENTRAL HIGHLANDS POVERTY REDUCTION •PRoJEcT一oAK NoNG PRov:Nc。 .Financ面ngAg『”ement一credit&Umb&rCr·5330一vN • .AUDITEDFINANCIALSTATE間ENTS .AND間ANAGEMENTLETTER .FO『theyea『“nded31&ece,ber2016 • 卜． ．〕 .- .- .- .- ■― .- .- •― ,- ,- •l CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT - DAK NONG PROVINCE Financing Agreement - Credit number Cr. 5330-VN TABLE OF CONTENTS CONTENTS PAGE(S) PARTI FINANCIAL STATEMENTS Statement of the Project Management Unit 2 Independent Auditors' Report 3-4 Balance Sheet 5 Statement of Incomes and Expenditures 6 Statement of Sources and Uses of Funds 7 Statement of Designated Account 8 Statement of Withclrawa s 9 Notes to the financial statements 10-12 PARTII REPORT OF INDEPENDENT AUDITORS ON INTERNAL CONTROL 13 PART III INDEPENDENT ASSURANCE REPORT ON COMPLIANCE 14 PARTIV MANAGEMENT LETTER 15-21 U AR FIACAUSAEET U U U U U U CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT - DAK NONG PROVINCE Financing_Agreement - Credit number Cr. 5330-VN STATEMENT OF THE PROJECT MANAGEMENT UNIT The Project Management Unit of the Central Highlands Poverty Reduction Project - Dak Nong Province (the "Project Management Unit") presents this report together with the financial statements of the Central Highlands Poverty Reduction Project - Dak Nong Province (the "Project") for the year ended 31 December 2016, The Proiect Mananement Unit The members of the Project Management Unit who held office during the year and to the date of [his report are as follows: Mr. Tran Xuan Hai Director (resigned on 16 June 2016) Mr. Le Van Quang Director (appointed on 11 November 2016) Mr. Nguyen Anh Son Deputy Director Ms. Cao Thi Ha Bac Chief Accountant The Project Management Unit's Statement of Responsibility The Project Management Unit is responsible for preparing the financial statements of the Proeicct, which comprise the Balance Sheet as at 31 December 2016, the Statement of Incomes and Expenditures, Statement of Sources and Uses of Funds, Statement of Designated Account, Statement of Withdrawals for the year then ended and the Notes to the financial statements, which give a true and fair view of the financial position as at 31 December 2016 as well as of the incomes and expenditures, the receipts and disbursements of the Project for the year, in accordance with thn accounting convention and the accounting policies set out in Note 2 and Note 3 of the Notes to the financial statements and the covenants contained in Financing Agreement - Credit number Cr. 533(0- VN. In preparing these financial statements, the Project Management Unit is required to: * Select suitable accounting policies and then apply them consis-ently; * Make judgments and estimates that are reasonable and prudent; * State whether applicable accounting principles have been followcd, subject to any matrni departures disclosed and explained in the financial statements; and * Design and maintain effective internal control over compliance with requirements that cou d have a direct and material financial effect on the financial statements as well as over financial reportiing for the purpose of properly preparing and presenting the financial statements so as to minimise errors and frauds; and take responsibility for its assertions as to the effectiveness of such internal control. The Project Management Unit is responsible for ensuring that proper accounting records are kept, which disclose, with reasonable accuracy at any time, the financial position of the Project and that the financial statements are prepared in accordance with the accounting convention and the accounting policies set out n Note 2 and Note 3 of the Notes to the financial statements. ihe Prolect Management Unit is responsible for ensuring that the funds have been used as intendcd for the Project and for complying with Financing Agreement - Credit number Cr. 5330-VN as well as laws and regulations applicable to the Project. The Project Management Unit is also responsilb -o safeguarding the assets of the Project and hence for taking reasonable steps for the prekmnlion a: d detection of frauds and other irregularities. The Pro]ect Management Unit confirms that they have compl ed with the above requiremens n eprearIng these financial statements. PErahd onT' beh'glf of the Project Management Unit, Nguyen Anh Son Deputy Director Dak Nong, 8 June 2017 2 Deloitte Vietnam Company Ltd. D elo itte 34 Lang Ha Street, Lang Ha Ward, Dong Da Di,trict, Hanoi, Vietnam Te :A84 24 6288 3568 Fax:+84 24 6288 5678 No.: I /VNA-HWN-BC Website: www.deloitte.Corn/vn INDEPENDENT AUDITORS' REPORT To: The Project Management Unit of the Central Highlands Poverty Reduction Project - Dak Nong Province Opinion We have audited the financial statements of the Central Highlands Poverty Reduction Project - Dak Nong Province (the "Project"), which comprise the Balance Sheet as at 31 December 2016, the Statement of Incomes and Expenditures, Statement of Sources and Uses of Funds, Statement of Designated Account, Statement of Withdrawals for the year then ended, and the Notes to the financial statements, including a summary of significant accounting policies. In our opinion: * The accompanying financial statements give a true and fair view of the financial position of the Project as at 31 December 2016 as well as of its incomes and expenditures, receipts and disbursements for the year then ended in accordance with the accounting convention and the accounting policies set out in Note 2 and Note 3 of the Notes to the financial statements. * The Statement of Designated Account gives a true and fair view of the balance of the Designated Account as at 31 December 2016 and the Project's receipts and disbursements via the Designated Account for the year then ended in accordance with the relevant covenants of Financing Agreement - Credit number Cr. 5330-VN and prevailing relevant regulations established by the World Bank. * The withdrawal applications were reconciled to the statements of expenditures (SOEs) prepared by the Project Management Unit for the year ended 31 December 2016 and those SOEs were adequately supported. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Project in accordance with the ethical requirements that are relevant to our audit of the financial statements, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of Matter - Basis of Accounting We draw attention to Note 2 and Note 3 of the Notes to the financial statements, which 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. As a result, the financial statements may not be suitable for another purpose, Our opinion is not modified in respect of this matter. Responsibilities of the Project Management Unit and those charged with governance for the Financial Statements The Project Management Unit is responsible for the preparation of the financial statements in accordance with the accounting convention and the accounting policies set out in Note 2 and Note 3 of the Notes to the financial statements, and for such internal control as the Project Management Unit determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Dlrit refers t fne or more of Delatte Touche Tohmatsu Ltd-, a UK pivaItL company limiiiterd by quarantee ("DTT '), itsretwrk of rnernber firms, and thir related -enities. DTTL and each of its rnember firms are legally separiae and indepencdnt entiti-s. DTTL (alto referred to as FDe oi(t Global') does not provide servics to cliers. Please see A w 1dloitte .orn/about lor a more delaflled deScrip tin of DI11L anc its menber firms. 3 Deloitte INDEPENDENT AUDITORS' REPORT (Continued) In preparing the financial statements, the Project Management Unit is responsible for assessing the Project's ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the Project Management Unit either intends 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' Responsibilies for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing (ISAs) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements, As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: * Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. * Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. * Conclude on the appropriateness of the Project Management Unit's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Project's ability to continue as a going concern, If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Project to cease to continue as a going concern. * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates, if any, and related disclosures made by management. We communicate with the those charged with governance and the Project Management Unit regarding, among other matters, the planned scope and timing of the audit and significant audit findings including any significant deficiencies in internal control that we identify during our audit. Khuc Thii Lan Anh Ngu n Anh Tuan Deputy General Director Audor Audit Practising Registration Certificate Audit Practising Registration Certificate No. 9036-2013-001-1 No. 1472-2013-001-1 DELOITTE VIETNAM COMPANY LIMITED 8 June 2017 Hanof, S.R. Vietnam 4 CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT - FINANCIAL STATEMENTS DAK NONG PROVINCE For the year ended Financing Agreement - Credit number Cr. 5330-VN 31 December 2016 BALANCE SHEET As at 31 December 2016 Notes 31/122016 31/12/2015 ASSETS VND VND Current assets 2,730,098,395 9,684,621,212 Cash 5 2,726,088,090 9,370,061,212 Cash on hand 290,283,000 Cash in bank 2,726,088,090 9,079,778,212 Receivables 4,010,305 314,560,000 Prepayments to suppliers - 314,560,000 Other receivables 4,010,305 - Total assets 2,730,098,395 9,684,621,212 LIABILITIES Current liabilities 29,791,173,505 11,172,386,238 Payables to suppliers 6 29,317,152,986 10,371,335,712 Other payables 7 474,020,519 801,050,526 Total liabilities 29,791,173,505 11,172,386,238 NET ASSETS (27,061,075,110) (1,487,765,026) Exchange differences 1,629,112,954 378,243,077 Deficit of incomes over expenditures (28,690,188,064) (1,866,008,103) TOTAL (27,061,075,110) (1,487,765,026) 8-~ Nguyen Anh Son Cao Thi Ha Bac Tran Thi Thao Deputy Director Chief Accountant Preparer Dak Nong, 8 June 2017 The accompanying notes are an integral part of these financial statements 5 CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT - FINANCIAL STATEMENTS DAK NONG PROVINCE For the year ended Financing Agreement - Credit number Cr. 5330-VN 31 December 2016 STATEMENT OF INCOMES AND EXPENDITURES For year ended 31 December 2016 Accumulated to Note Year 2016 31/12/2016 VND VND IDA funds 8 52,807,552,758 74,085,049,190 - Fund disbursed in cash 50,902,552,758 71,680,049,190 - Fund disbursed by fixed assets 1,905,000,000 2,405,000,000 Counterpart funds 4,555,306,105 11,514,456,999 Other funds 38,367,335 52,905,269 TOTAL INCOMES 57,401,226,198 85,652,411,458 * EXPENDITURES Part I: Village and Commune Infrastructure 33885034700 40,310,453,700 Development Part II: Sustainable Livelihoods Development 13,888,691,600 20,890,158,738 Part III: Connective Infrastructure Development, 23,741,289,135 27,733,736,697 Capacity Buliding, and Communications Part IV: Project Management 12,672,023,389 25,355,325,118 Others (Bank charges) 38,367,335 52,905,269 TOTAL EXPENDITURES 84,225,406,159 114,342,599,522 DEFICIT OF INCOME OVER EXPENDITURES (26,824,179,961) (28,690,188,064) Nguyen Anh Son Cao Thi Ha Bac Tran Thi Thao Deputy Director Chief Accountant Preparer Dak Nong, 8 June 2017 The accompanying notes are an integral part of these financial statements 6 � � И (G L�] -� OD е� ® Q гл rn кr а со г. .... ® ач....... q• �v , рр са и м .� гл :��'+ т с rn ш Q о м rv г+ ш и и � с+ о са � �'•1� � С Q^! 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Add: Amount advanced by the World Bank to the Designated Account 430,OOC.00 3. Total advances to the Designated Account as at 31/12/2016 1,230,000.00 4. Closing balance of the Designated Account as at 31/12/2016 9,063.43 5. Add: Amounts withdrawn and claimed but not yet replenished 250,735.65 6 Add: Amounts withdrawn but not yet claimed for reimbursement 970,200.92 7. Total advances to the Designated Account as at 31/12/2016 1,230,000.00 Nguyen Anh Son -- Cao Thi Ha Bac Tran Thi Thao Deputy Director Chief Accountant Preparer Dak Nong, 8 June 2017 The accompanying notes are an integral part of these financial stiatements 8 � � а� � -. а � ш r� � :., ■ g �. ur � s� _ 1 � 1 f 1 1 t 1 1� 1 1 � r�АΡ1 � Pt � м//уΡ �. $ U � .�в+I t� �1Iв}.� �вR �i s � V W (у � l.П � t] v r�'„ м м .�--�' С � � w � � tв 1в -�.=г пз г"' � r`�'ч и°л й , ы r � Z �р � " .1 � � � QЯ � h"`- i' С L9. � 1� ... L ++ С7 ... Q f"�. 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