■ · ■ ■ ■ . ■ ■ ■ ■ ■ ■ ―… ■ I READINESSPREPARATIoNINVIETNAM-PHAsEZ I ■ I GrantNO.TFOAn22 jJ ■ lAUDITDFINANCIALSTATEMENTSANDMANAGEMENTLETTERl ■ l… r . ■ 硼二 －泌 觸 ■ . ■ ■ ■ ■ ■ ■ ■ ■ . . ■ . …－-－…．--．■－.----.-----－ㅑ－－■－-－■－－…■… ■ H汕oi, June 2019 ■ PROJECT ON SUPPORT FOR T14E REDD+ READINESS PREPARATION IN VIETNAM - PHASE 2 Grant No. TFOA1122 TABLES OF CONTENTS CONTENTS PAGE PARTI: INDEPENDENT AUDITORS'REPORT ON THE FINANCIAL STATEMENTS REPORT OF THE PROJECT MANAGEMENT UNIT 2 INDEPENDENT AUDITORS' REPORTS ON THE FINANCIAL 3-4 STATEMENTS AUDITED FINANCIAL STATEMENTS Balance sheet 5 Statement of Funds and Expenditures 6 Statement of Funds balance 7 Statement of Designated account 8 Statement of Withdrawals 9 Notes to the Financial statements 10-17 PARTH: INDEPENDENT AUDITORS' REPORT 18 ON THE INTERNAL CONTROL SYSTEM PART III: INDEPENDENT AUDITORS'REPORT ON THE COMPLIANCE 19 PARTIV: MANAGEMENT LETTER 20-27 U U U U U U U U U U U U PART I * INDEPENDENT AUDITORS' REPORT * ON THE FINANCIAL STATEMENTS U U U U U U U U U U U U U U U U U U U PROJECT ON SUPPORT FOR THE REDD+ REPORT OF THE PROJECT MANAGEMENT UNIT READINESS PREPARATION IN VIETNAM - PHASE 2 attached to Financial Satanients Grant No. TFOA 1l22 for the fiscal year ended December 31, 2018 REPORT OF THE PROJECT MANAGEMENT UNIT The Project Management Unit of the Project on Support for the REDD+ Readiness Preparation in Vietnam - Phase 2 ("the Project") presents this report and the Financial Statements of the Project for fiscal year ended December 31, 2018. The Project Mana2ement Unit The Project Management Unit was established according to the Decision No. 101 5/QD-BNN-TCCB dated March 28, 2017 of Ministry of Agriculture & Rural Development Members of the Project Management Unit in the year and to the reporting date are: Mrs. Nguyen Thi Thu Thuy Director Mr. Nguyen Viet Hung Deputy Director Responsibilities of the Project Manag!ement Unit The Project Management Unit is responsible for preparing the financial statements of the Project, which comprise Balance sheet, Statement of Funds and Expenditures, Statements of Funds balance, Statements of Designated Account, Statement of Withdrawals 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 as at December 3 1, 2018 as well as its receipts, disbursements and expenditures of the Project for the fiscal year then ended, in accordance with the accounting convention and accounting policies set out in Note 2 of the Notes to the financial statements. In preparing these financial statements, the Project Management Unit is required to: - Select suitable accounting policies and then apply them consistently; - Make judgments and estimates that are reasonable and prudent; - 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 Subproject will continue in operation; and - Design and maintain an 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 of7 properly preparing and presenting the financial statements so as to minimise errors and frauds; and take responsibility for its assertion as to the effectiveness of such internal control. The Project Management Unit is responsible for ensuring that proper accounting records are kept, which disclose, with reasonable accuracy at any time, the financial position of the Project and that the financial statements comply with the accounting convention and accounting policies set out in Note 2 of the Notes to the Financial statements. The Project Management Unit is responsible for using the Project's funds as intended for the Project and for complying with convenants contained in Grant agreement No. TFOA 1l22 as well as laws and regulations applicable to the Project. The Project Management Unit is also responsible for safeguarding the assets of the Project and hence for taking reasonable steps for the prevention and detection of frauds and other irregularities. The Project Management Unit confirms that they have complied with the above requirements in preparing these financial statements. For and on behalf of, MANAGEMENT BOARD FOR FORESTRY PROJECTS / Vu Xuan Then General Director Hanoi, June 18, 2019 U2 U COITP% I INI VIET NAM AUDITING AND EVALUATION COMPANY LIMITED INDEPENDENT MEMBER OF LEA GLOBAL Specialized in Auditing, Evaluation, Consultancy on Finance, Accounting and Tax No:- J -19/BC-TC/VAE Hanoi, June 25, 2019 INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS To: The Project Management Unit of Project on Support for the REDD+ Readiness Preparation in Vietnam - Phase 2 Opinion We have audited the financial statements of the Project on Support for the REDD+ Readiness Preparation in Vietnam - Phase 2 ("the Project"), which comprise Statement of Funds balance as at December 31, 2018, Statement of Funds and Expenditures, Statements of Funds balance, Statement of Designated Account, Statement of Withdrawals for the fiscal year ended December 3 1, 2018 and Notes to the Financial Statements including a summary of significant accounting policies. In our opinion: * The Financial Statements give a true and fair view, of the financial position of the Project, including the balance of the Designated Account as at December 31, 2018, funds received and expenditures incurred, movements of the Designated Account for the fiscal year then ended in accordance with the basis of the principal accounting policies described in the Notes to the Financial Statements and the provision of the Grant No. TF0A 1122 dated November 18, 2016. * In addition, with respect to Statements of Expenditures, adequate supporting documents have been fully maintained to support to the replenishment requests submitted to the World Bank. The expenditures are eligible and in right purposes of the Grant No. TF0A 122 dated November 18. 2016. 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 Project Management Unit in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants ("IESBA Code"), and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management 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 of the Notes to the financial statements, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. n In preparing the financial statements, management is responsible for assessing the Project's ability to continue as a going concern, discosing, as applicable, matters relating to going concern and using te going concern basis of accounting unless management either intends to liquidate the Project or to cease operations, or has no realistic alternative but to do so. Auditor's Responsibilities for the Audit of the Financial Statement 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 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 Head Office: 11: Floor Song Da Building Branch: No. 1713 Nguyen Huy Tuong No 165 Cau Giay Street Cau Giay Dist., Ha Noi Ward 6. Binh Thanh Dist Ho Chi Minh City Tel 024 62 670 491/492/493 Fax: 024 62 670 494 DT 028 6294 1117/6252 1818 Fax 028 6294 1119 Website: www.vae.com.vn INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS (Continued) 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 statement, 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, but not for the purpose of expressing an opinion on the effectiveness of the Project's internal control. * 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 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 appropriateness of accounting policies used and the reasonableness of accounting estimates, if any, and related disclosures made by management. We communicate with the Project Management Unit regarding 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. U Tran Quoc Tuan Nguyen Thi Hong Van General Director Auditor Certificate ofAudit practice Registration Certificate ofAudit practice Registration No.: 0148-2018-034-1 No.: 0946-2018-034-1 For and on behalf of VIETNAM AUDITING AND EVALUATION CO., LTD U4 PROJECT ON SUPPORT FOR THE REDD+ FINANCIAL STATEMENTS READINESS PREPARATION IN VIETNAM - PHASE 2 for the fiscal year ended December 31, 2018 Grant No. TF0A1122 BALANCE SHEET As at December 31, 2018 Unit: VND Notes 31/12/2018 31/12/2017 A - ASSETS Current assets 322,034,491 4,022,275,083 Cash on hand 3,000,000 80,780,700 Cash in bank 9. 3,050,593 3,765,939,720 Advance 11. 315,983,898 175,554,663 Total assets 322,034,491 4,022,275,083 B - LIABILITIES Current liabilities 4,916,938,082 2,066,450,592 Trade accounts payable 10. 4,595,690,785 1,076,615,140 Taxes and payables to the State budget 12. 321,247,297 335,860,452 Payables to employees 13. - 653,975,000 Total liabilities 4,916,938,082 2,066,450,592 NET ASSETS (A- B) (4,594,903,591) 1,955,824,491 NET FUNDS Difference of income over expenditures (4,594,903,591) 1,955,824,491 TOTAL NET FUNDS (4,594,903,591) 1,955,824,491 Hanoi, June 18, 2019 MANAGEMENT BOARD FOR FORESTRY PROJECTS U Accountant General Director U Nguyen Hoang Nam Vu Xuan Thon U5 PROJECT ON SUPPORT FOR THE REDD+ FINANCIAL STATEMENTS READINESS PREPARATION IN VIETNAM - PHASE 2 for the fiscal year ended December 31, 2018 Grant No. TFOAll22 STATEMENT OF FUNDS AND EXPENDITURES The period from January 01, 2018 to December 31, 2018 Unit: VND Accumulated to The period ended Accumulated to December 31, 2017 December 31, 2018 December 31, 2018 I. Funds 1. Funds from the World Bank 22,442,000,000 30,186,690,467 52,628,690,467 2. Counterpart funds 3,115,755,671 3,995,857,327 7,111,612,998 3. Others funds (*) 187,945,978 732,448,071 920,394,049 Total 25,745,701,649 34,914,995,865 60,660,697,514 II. Expenditures 1. Goods 4,141,981,000 3,463,400,000 7,605,381,000 2. Consulting service 7,926,956,468 14,887,598,478 22,814,554,946 3. Training and Workshops 5,939,148,114 15,117,605,000 21,056,753,114 4. Incremental Operating Costs 5,781,791,576 7,997,120,469 13,778,912,045 Total 23,789,877,158 41,465,723,947 65,255,601,105 III. Surplus/(Deficit) 1,955,824,491 (6,550,728,082) (4,594,903,591) (*) Foreign Exchange rate differences and receipts from sales of bidding documents. Hanoi, June 18, 2019 MANAGEMENT BOARD FOR FORESTRY PROJECTS Accountant General Director Nguyen Hoang Nam Vu Xuan Thou 6 PROJECT ON SUPPORT FOR THE REDD+ FINANCIAL STATEMENTS READINESS PREPARATION IN VIETNAM - PHASE 2 for the fiscal year ended December 31, 2018 Grant No. TFOAl122 STATEMENT OF FUNDS BALANCE As at December 31, 2018 Unit: VND 31/12/2018 31/12/2017 Difference of income over expenditures Difference of income over expenditures as at beginning 1,955,824,491 - Difference of income over expenditures in the period (6,550,728,082) 1,955,824,491 Difference of income over expenditures as at closing (4,594,903,591) 1,955,824,491 Represented by: Current assets (1) 322,034,491 4,022,275,083 Cash on hand 3,000,000 80,780,700 Cash in bank 3,050,593 3,765,939,720 Advance 315,983,898 175,554,663 Current liabilities (2) 4,916,938,082 2,066,450,592 Trade accounts payable 4,595,690,785 1,076,615,140 Personal income tax 321,247,297 335,860,452 Payables to employees - 653,975,000 U Net worth (3) = (1) - (2) (4,594,903,591) 1,955,824,491 U Hanoi, June 18, 2019 MANAGEMENT BOARD FOR FORESTRY PROJECTS Accountant General Director Nguyen Hoang Nam Vu Xuan Thon U7 PROJECT ON SUPPORT FOR THE REDD+ FINANCIAL STATEMENTS READINESS PREPARATION IN VIETNAM - PHASE 2 Jbr the fiscal year ended December 31, 2018 Grant No. TFOA1122 STATEMENT OF DESIGNATED ACCOUNT For the period: From Janua7y 01, 2018 to December 31, 2018 Account No.. 1504 201035231 At. Vietnam Bank for Agriculture and Rural Development - Dong Da Branch Address: No. 21 Xa Dan Street, Nam Dong Ward, Dong Da district, Hanoi Grant No.: TFOA 1122 Part A: ACTIVITIES USD Opening balance 167,740.40 Add: Total amounts deposited by the World Bank 1,336,063.71 Deduct: Total amounts withdrawn (1,503,669.90) Amout refunded to the World Bank Bank charges Closing balance 134.21 Part B: RECONCILIATION 1. Amount advanced by the World Bank 1,000,000.00 2. Deduct: Amount recovered by the World Bank 3. Deduct: Amount refunded to the World Bank 4. Total amounts withdrawn but not yet claimed (999,865.79) 5. Closing balance 134.21 6. Total advance as at period end 1,000,000.00 Hanoi, June 18, 2019 MANAGEMENT BOARD FOR FORESTRY PROJECTS Accountant General Director Nguyen Hoang Nam Vu Xuan Thon I ■ и G, .� ■ � � N О ■ �, � Z д � ■ Н �; � , , , � и � �, F � �' � ^ д � � � г,.-V.� ■ -� � � �, Z � � ^ О ■ z � А � ?, � � С ■ п г-1 И V� �--i Е"' N � � � 0\ � � � ;� с М о cv м °,r � � � ^ U = О М OOV' О О ь."'�.. О ^ ■ ± й ?. cS V 00 t� V^ N О � .�. сэ � М cv о м �э у � о и..д м �t о� м � �„�ч Е-+ . ;' ед с�. ,-i .� �, р А ^ � .^. сб р � � сС � � � � � � 0 � � ■ � и � � . � � й р � д � � > о ° � � � О U" � � r v 3 й � ~ �'' с� � � � Z г. ■ � '�.+ р � з.р. ;.] N р U `л . ^ 6,�-а ,--i � � ■ � � Q � � � � ■ � � о cov � й °3 с`� �' ■ � а� г� � L А Са �л � ■ � �. r. � � � р � о � `� 3 N w и • Г� о � аИ, � � о` ■ ° � � � .�° � ° � � [-� _ �� р � О м � о ■ � оо [� � Z � й� � М N О М "�"'� СС г'�j •^- N-� М д' О� М Г� Е � р' °Л ^° �• ~ ~ ■ Н � •v О '� и � ^ Q� ,ь+ � и `� � � . Е.у `� С v� и р'ч.х. � . - ■ гл •.°- о � о � 3 � � 3 �, ■ с; д � � � й U � Е'� О ? .'р ■ � tз й .= и ■ у �jCQ ^1 {.у Fв ■ + л `� �л А д й Q р � о ■ � � � .=� � � � � > ° � � � ■ F, z '� о сх " � z Z " °° � ■ � О с. о о Е.•� Е- � N N „•+�., д .� г� `л r.� ■ р ~ � � �„ �, `� :. Q с� � С� �- д _ N � � и ■ � G.] ,✓ .� О СД t� � д � V � � Z С• р � Q, V.., Q� ■ оЛ`� 3 � �- � `" � с� z z � ■ � р ^ о by, N м О д � z • о о г ■ : N С7 А F� � PROJECT ON SUPPORT FOR THE REDD+ FINANCIAL STATEMENTS READINESS PREPARATION IN VIETNAM - PHASE 2 For thefiscalyear ended December 31, 2018 Grand No. TFOA1122 NOTES TO THE FINANCIIAL STATEMENTS (Notes are an integral part of these Financial Statements and they shall be read in conjunction ivith such enclosed Financial Statements) 1. Background The Project on Support for the REDD+ Readiness Preparation in Vietnam (the "Project") is implemented under the Grant No.TF0A1 122 dated November 18, 2016 (the "Ageement") between the Government of the Socialist Republic of Vietnam and the World Bank. The objective of the Additional Readiness Preparation Activities is to support Vietnam to become ready for future REDD+ implementation by preparing the key elements, systems, and policies needed in a socially and environmentally sound manner. The Pro ect consists of the following components: Component 1: Analytical studies and development of capacities for the effective and efficient REDD+ implementation at national and provincial levels Component 2: Policies and technical support on SFC and FMB reform for REDD+ service provision; private sector engagement and support for FLEGT Component 3: Development of the Strategic Environmental and Social Assessment national and sub- national REDD+ strategy options; stakeholder consultation and participation Component 4: Project management and monitoring and evaluation The Project officially came into force since November 18, 2016 and closed on December 31, 2019. The Project is implemented by the Central Project Managerment Unit located at Room 043, No. 14 Thuy Khue, Tay Ho, Hanoi and 6 Provincial Project Managen-nent Unit (PPMU) of Thanh Hoa, Nghe An, Ha Tinh, Quang Binh, Quang Tri and Thua Thien Hue. 2. Principal Accounting Policies a. Basis of preparation of the Financial Statements The annual accounting period commences from January 01 and ends December 3 1. =M' The financial statements are prepared in accordance with the requirements of the World Bank and Y presented in Vietnam Dong (VND), except for the Statement od Designated Account and Statement of Withdrawals, which are prepared in United State Dollar (USD). The principal accouting policies are summarized as bellow: b. Foreign currencies Funds received from World Bank in foreign currency is translated into VND using the exchange rates announced by the Ministry of Finance at the date of receiving the funds or at the date of direct payment made to contractors/suppliers. Transactions in foreign currencies are translated into VND using the actual exchange rate at the date of transaction announced by the Vietnam Bank for Agriculture and Rural Development - Dong Da Branch. Z Monetary assets and liabilities denominated in foreign currencies are revalued at the actual exchange rate announced by the Ministry of Finance in December 2018. All differences on foreign exchange are recorded into exchange rate differences account and presented as other funds on Statement of Funds and Expenditures. c. Funds and Expenditures Funds: Funds received from the World Bank are recognized when remittance made into the Designated Account or direct payment made to contractors/suppliers. 10 PROJECT ON SUPPORT FOR THE REDD+ FINANCIAL STATEMENTS READINESS PREPARATION IN VIETNAM - PHASE 2 For the fiscal year ended December 31, 2018 Grand No. TFOA1l22 NOTES TO THE FINANCIAL STATEMENTS (continued) (Notes are an integral part of these Financial Statements and they shall be read in conjunction with such enclosed Financial Statements) - Counterpart funds are recognized when payments are made directly from the State Treasury to contractors/suppliers of the project or funds are withdrawn to the PMU for settlement of project's activities. Expenditures: - Expenditures are recorded when it is actually inccurred. d. Designated account Designated account is the deposite account in USD opened at Vietnam Bank for Agriculture and Rural Development - Dong Da Branch for the Project's activities. Payments made via the Designated Account are for eligible expenditures of the Project in accordance with the provisions of the Grant No. TFOAl 122 dated November 18, 2016. 11N U PROJECT ON SUPPORT FOR THE REDD+ FINANCIAL STATEMENTS READINESS PREPARATION IN VIETNAM - PHASE 2 for the fiscal year ended December 31, 2018 Grant No. TFOA1l22 NOTES TO THE FINANCIAL STATEMENTS (continued) (These notes are an integral part of and should be read in conjunction with the accompanying Financial Statenents) 3. Funds received from the World Bank Accumulated to December 31, 2018 Accumulated to December 31, 2017 USD VND equivalent USD VND equivalent Designated Account 2,336,063.71 52,628,690,467 1,000,000.00 22,442,000,000 Advance 1,000,000.00 22,442,000,000 1,000,000.00 22,442,000,000 Refund 1,336,063.71 30,186,690,467 Total 2,336,063.71 52,628,690,467 1,000,000.00 22,442,000,000 4. Counterpart funds The period Accumulated to ended December December 31, 31, 2018 2018 VND VND Counterpart funds were granted at: State Treasury - Tay Ho branch 1,081,402,434 1,724,988,325 State Treasury - Thanh Hoa Province 442,577,000 950,577,000 State Treasury - Nghe An Province 999,590,658 2,017,576,288 State Treasury - Ha Tinh Province 500,000,000 500,000,000 State Treasury - Quang Binh Province 200,000,000 400,000,000 State Treasury - Quang Tri Province 550,327,157 1,169,327,157 State Treasury - Thua Thien Hue Province 221,960,078 349,144,228 Total 3,995,857,327 7,111,612,998 5. Expenditures The period Accumulated to ended December December 31, 31, 2018 2018 VND VND Expenditures covered by: The World Bank 37,469,866,620 58,143,988,107 CPMU 27,764,495,855 44,633,472,005 Thanh Hoa PPMU 2,228,465,956 2,997,162,605 Nghe An PPMU 1,977,414,800 2,700,405,065 Ha Tinh PPMU 160,897,500 415,197,560 Quang Binh PPMU 1,886,271,730 2,706,717,730 Quang Tri PPMU 1,676,346,825 2,353,577,325 Thua Thien Hue PPMU 1,775,973,954 2,337,455,817 The Counterpart funds 3,995,857,327 7,111,612,998 CPMU 1,081,402,434 1,724,988,325 Thanh Hoa PPMU 442,577,000 950,577,000 Nghe An PPMU 999,590,658 2,017,576,288 Ha Tinh PPMU 500,000,000 500,000,000 Quang Binh PPMU 200,000,000 400,000,000 Quang Tri PPMU 550,327,157 1,169,327,157 Thua Thien Hue PPMU 221,960,078 349,144,228 Total 41,465,723,947 65,255,601,105 Grant No. TFOA 1122 dated November 18, 2016 fund 100% of the project's expenditures (including tax). g 12 � М � � � oNC � N � �V�'i о � й с� � �" и д� с� •-; д- G� г� со cr j`�`� � c�i `л с� оо t� `л �r � м м � .� ^ N t� оо со [� оо о о� м N ��,-, н � о� о� о о� Go � и � v `л [ r г=� . 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U L2. �� г� .^� -. . _ ' � ..� �] � �"� ш ,'r� о О� О � О � � О О О О� О � О � � О О � � w а. о� W V U с� U и U��. U Н U U е� U и U� �^.. U t-+ . ^�. CG V � � V � mummum mmomm OEM Emmumme Oman MEMO MEMEN PROJECT ON SUPPORT FOR THE REDD+ FINANCIAL STATEMENTS READINESS PREPARATION IN VIETNAM - PHASE 2 for thefiscal year ended December 31, 2018 Grant No. TFOA1122 NOTES TO THE FINANCIAL STATEMENTS (continued) (These notes are an integral part of and should be read in conjunction with the accompanying Financial Statements) 6. Expenditures by components (continued) Un it: VND Accumulated to December 31, 2018 Components Funds received Counterpart Other funds Total from the World funds Component 1: Analytical studies and development of capacities for the effective and 21,020,508,582 - 21,020,508,582 efficient REDD+ implementation at national and provincial levels Component 2: Policies and technical support on SFC and FMB reform for REDD+ 5,837,681,483 - 5,837,681,483 service provision; private sector engagement and support for FLEGT Component 3: Development of the Strategic Environmental and Social Assessment 16,348,788,183 - 16,348,788,183 national and sub-national REDD+ strategy options; stakeholder consultation and participation Component 4: Proiect management and monitoring and evaluation 14,937,009,859 7,111,612,998 - 22,048,622,857 Total 58,143,988,107 7,111,612,998 - 65,25501,105 14 unmWWWwWWWWwWaWsWUUWWWWWWWWWWWWWWW PROJECT ON SUPPORT FOR THE REDD+ FINANCIAL STATEMENTS READINESS PREPARATION IN VIETNAM - PHASE 2 for the fiscal year ended December 31, 2018 Grant No. TFOA1122 NOTES TO THE FINANCIAL STATEMENTS (continued) (These notes are an integral part of and should be read in conjunction with the accompanying Financial Statements) 7. Expenditures by categories Unit: VND Accumulated to December 31, 2017 Categories Funds received Counterpart Other funds Total from the World funds Goods 4,141,981,000 - 4,141,981,000 Consulting services 7,926,956,468 - 7,926,956,468 Training, workshops 5,939,148,114 - 5,939,148,114 Incremental costs 2,666,035,905 3,115,755,671 - 5,781,791,576 Total 20,674,121,487 3,115,755,671 - 23,789,877,158 The period ended December 31, 2018 Categories Funds received Counterpart Other funds Total from the World funds Goods 3,463,400,000 - 3,463,400,000 Consulting services 14,887,598,478 - - 14,887,598,478 Training, workshops 15,104,909,500 12,695,500 - 15,117,605,000 Incremental costs 4,013,958,642 3,983,161,827 - 7,997,120,469 Total 37,469,866,620 3,995,857,327 - 41,465,723,947 Accumulated to December 31, 2018 Categories Funds received Counterpart Other funds Total from the World funds Goods 7,605,381,000 - 7,605,381,000 Consulting services 22,814,554,946 - - 22,814,554,946 Training, workshops 21,044,057,614 12,695,500 - 21,056,753,114 Incremental costs 6,679,994,547 7,098,917,498 - 13,778,912,045 Total 58,143,988,107 7,111,612,998 - 65,255,601,105 15 \-A, PROJECT ON SUPPORT FOR THE REDD+ FINANCIAL STATEMENTS READINESS PREPARATION IN VIETNAM - PHASE 2 for the fiscal year ended December 31, 2018 Grant No. TFOA1122 NOTES TO THE FINANCIAL STATEMENTS (continued) (These notes are an integral part of and should be read in conjunction with the accompanying Financial Statements) 8. Summary of actual disbursement by items accumulated to December 31, 2018 (Fund from the World Bank) Category TFOA1122 Accumulated to Difference Percentage December 31, 2018 USD USD USD % [1] [2] [1]- [2] Goods, works, non- 5,000,000.00 2,335,929.50 2,664,070.50 46.72% consulting services, consulting services, incremental costs and training, workshops Total 5,000,000.00 2,335,929.50 2,664,070.50 46.72% 9. Cash in bank 31/12/2018 31/12/2017 USD VND equivalent USD VND equivalent Designated Account 134.21 3,050,593 167,740.40 3,765,939,720 Total 134.21 3,050,593 167,740.40 3,765,939,720 10. Trade accounts payable 31/12/2018 31/12/2017 VND VND ATP Trading and Investment Co., Ltd 872,500,000 Mr Fabien Monteils 635,407,603 GFA Certification GmbH 579,544,082 - Bach Minh Thai Trading and Travel JSC. 443,778,000 6,795,000 Vietlevel Group JSC. 254,660,000 - Nguyen Khang Printing Technology Development JSC. 219,700,000 190,900,000 Dai Bang Travel and Trading JSC. 125,600,000 - International Media Travel and Hotel Business JSC. 36,400,000 148,400,000 Phu Dong hotel branch - Phu Dong JSC. - 183,590,000 Ngan Ha Trading and Investment JSC. - 100,260,000 Others 1,428,101,100 446,670,140 Total 4,595,690,785 1,076,615,140 11. Advance 31/12/2018 31/12/2017 VND VND Thanh Hoa PPMU 26,737,395 3,303,351 Nghe An PPMU 9,194,935 9,735 Ha Tinh PPMU 239,802,440 60,699,940 Quang Binh PPMU 1,282,270 92,554,000 Quang Tri PPMU 14,722,675 4,469,500 Thua Thien Hue PPMU 24,244,183 14,518,137 Total 315,983,898 175,554,663 16 PROJECT ON SUPPORT FOR THE REDD+ FINANCIAL STATEMENTS READINESS PREPARATION IN VIETNAM - PHASE 2 for the fiscal year ended December 31, 2018 Grant No. TFOA1122 NOTES TO THE FINANCIAL STATEMENTS (continued) (These notes are an integral part of and should be read in conjunction with the accompanying Financial Statements) 12. Taxes and payables to the State budget 31/12/2018 31/12/2017 VND VND Personal income tax 321,247,297 335,860,452 Total 321,247,297 335,860,452 13. Payables to employees 31/12/2018 31/12/2017 VND VND Dinh Quang Tuan - 270,000,000 Nguyen Viet Dung - 117,000,000 Others - 266,975,000 Total - 653,975,000 14. Subsequent events There have been no significant events occurring after the reporting date, which would require adjustments or disclosures to be made in the Financial Statements. 15. Comparative figures Comparative figures are figures in the Project's audited financial statements for the period from November 18, 2016 to December 31, 2017 by Vietnam Auditing and Evaluation Co.,Ltd. 16. Approval of the Financial Statements The Financial Statements have been approved by the Project Management Unit for issuance on June 18, 2019. Nguyen Hoang Nam Vu Xuan Thon Accountant General Director Hanoi, June 18, 2019 1 U1 ·1 .1 購 目 - . • - 騙 口 . . 一工A八且u一州 一1州DLPL州DENT AUDITORS,REPORT‘調 一＿________________________＿日＿- _U州‘r號Ll州rr劍R州AL C ONTROLS¥STEM!U ．州 ．攤 - - . - , .- ．〕 .1 .- - 目‘ - －一 . . . 購 口 . - 8 I'( Mill %IN L I I I I ED 0 VIET NAM AUDITING AND EVALUATION COMPANY LIMITED a INDEPENDENT MEMBER OF LEA GLOBAL S in c 2 0 0 1 Specialized in Auditing, Evaluation, Consultancy on Finance, Accounting and Tax No.: %,l -19IBC-TCIIIAE Hanoi, June 25, 2019 INDEPENDENT AUDITORS' REPORT On the internal control system To: The Project Managerment Unit of Project on Support for the REDD+ Readiness Preparation in Vietnam - Phase 2 We have audited, in accordance with International Standards on Auditing, the Financial Statements of Project on Support for the REDD+ Readiness Preparation in Vietnam - Phase 2 ("the Project") for the fiscal year ended December ) 1, 2018 and issued the Independent Auditor's Report thereon dated June 25, 2019 expressing an opinion on those Financial Statements. In connection with our audit of the Project's Financial Statements, we also examined the effectiveness of internal control over compliance with requirements that could have a direct and material financial effect on the Financial statements as well as of internal control over financial reporting. As stated in the Statement of the Project Management Unit on page 2, the Project Management Unit is responsible for designing and maintaining effective internal control over compliance with requirements that could have a direct and material financial effect on the financial statements as well as over financial reporting for the purpose of properly preparing and presenting the financial statements so as to minirnise errors and frauds; and take responsibility for its assertions as to the effectiveness of such internal control. Our responsibility is to express an opinion oil the effectiveness of internal control over compliance with requirements that could have a direct and material financial effect on the financial statements as well as internal control over financial reporting based on our examination. Our examination was conducted in accordance with International Standard on Assurance Engagements (ISAE) 3000 (revised). That standard requires that we comply with ethical requirements and plan and perform Our procedures to obtain reasonable assurance about whether, in all material respects, the Project Management Unit has maintained effective internal control over compliance with the requirements that could have a direct and material financial effect on the financial statements as well as internal control over financial reporting. Our examination included obtaining an understanding of internal control over compliance with requirements that could have a direct and material financial effect on the financial statements as well as of internal control over financial reporting, testing, and evaluating the design and operating effectiveness of the internal control, and performing such %ther procedures as we considered necessary in the circurnstances 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 tlA the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. In our opinion, the Project Management Unit has maintained, in all material respects, effective internal colutrol over 'ompliance with requirements that could have a direct and material financial effect on the Ploject's tillancial' statements as well as over financial reporting for the fiscal year ended to December ) 1, 2018. n Tran Quoc Tua Nguyen Thi Hong Van General Director Auditor Certijlcate of azt zt practising registration Certificate of'enidit practising registration No.: 0148-2018-034-1 No.: 0946-2018-034-1 For and on behatf of VIETNAM AUDITING AND EVALUATION CO., LTD Head Office: I I - Floor Song Da Building Branch: No. IT '3 Nguyen Huy Tuong No 165. Can Gjay Street. Cau Gay Dist.. Ha Nei Ward 6. Binh Thanh Dist., He Chi Mind City Tel 024, 62 670 491!,A92;493 Fax 024 62 670 494 18 DT 028 6294 1117;6252 1818 Fax 02& 6294 1119 Website: .vae.conuvn . . · · . . & . · . ．· · _ . _ _ ___ · PART m · INDEPENDENT AUDITORS& REPORT 탭． · ON THE COMPLIANCE & 씻 . 겨 . . . . · · · · · & · . · · . · . · 0 VIET NAM AUDITING AND EVALUATION COMPANY LIMITED a INDEPENDENT MEMBER OF LEA GLOBAL Specialized in Auditing, Evaluation, Consultancy on Finance, Accounting and Tax No.: -19IBC-TCIVAE 11anoi-J1117e 25, 2019 INDEPENDENT AUDITOR'S REPORT On compliance To: The Project Managerment Unit of Project on Support for the REDD+ Readiness Preparation in Vietnam - Phase 2 We have audited, in accordance with International Standards oil Auditing, the Financial statements of Project on Support for the REDD+ Readiness Preparation in Vietnam - Phase 2 ("tile Project") for the fiscal year ended December 3 1, 2018 and issued the Independent Auditor's Report thereon dated June 25, 2019 expressing an opinion on those Financial Statements. In connection with Our audit of the Project's Financial Statements, we also performed procedures oil the Project's compliance with the Grant agreement No. TFOAI 122, laws and regulations that could have a direct and material financial effect oil the Project's Financial Statements for tile fiscal year ended December 3 1, 2018 ("the requirements"). The Project Management Unit is responsible for complying with the requirements. Our responsibility is to e.xpress an opinion oil the Project's compliance with the requirements based oil our procedures. We limited our tests of compliance to the requirements, and we did not test compliance with all laws and regulations applicable to the Project. We performed our work in accordance with International Standard oil Assurance Engagements (ISAE) 3000 (Revised). That standard requires that we comply with ethical requirements and plan and perform Our procedures to obtain reasonable assurance about whether, in all material respects, the Project has complied with the requirements. An assurance engagernent to report oil the compliance with tile requirements at the Project involves performing procedures to obtain evidence about whether the Project's activities are free of material noncompliance with the requirements, including obtaining an understanding of tile internal control relevant to tile Project's compliance with the requirements. The procedures selected depend on the auditors' judgment, including the assessment of risks that the Project does not comply with the 0 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 requirernents that we consider necessary to provide reasonable assurance that the requirements are complied by the Project. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. In our opinio , tthe Project has complied, in all material respects, with Grant agreement No. TFOAI 122, laws and re ilations that Could have a direct and material financial effect oil the Project's Financial Statements fit,1lie fiscal year ended December 3 1, 2018. Tran Quoc Tu n Nguyen Thi Hong Van General Dir cto Auditor Certificate 011 itpraclising registration Certificate of audit praclis ing registration No.: 0148-2018-034-1 No.: 0946-2018-034-1 For and on beha (qf VIETNAM AUDITING AND EVALUATION CO., LTD Head0ffice:11 Floor Song Da Building Branch: No 17'3 Nguyen Huy Tuong No 165, Cau Gioy Street. Can Gjay Dist., Ha Noi 19 Nard 6 Binh Tranh Det., Ho Chi Minh City Tel 024 62 670 491/492493 Fax 024. 62 670 494 DT 028 6294 1117)6252 1818 Fax 028. 6294 1119 Welasite: .vae.coni