1 mekong-ntegratedwate&res0urces the … · 2019-09-06 · nguyen thanh tung nguyen truong minh...

l

II

月園園l1 MEKONG-NTEGRATEDwATE&REs0URcES-MANAGEMENT PROJECT

THE PROJECT MANAGEMENT UNIT1 CreditAgreementNO・5319-VNAUDITED FINANCIAL STATEMENTS1 Forthe&Scalyearendedasat31December2018

園I国田l

lI園園l園

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Mekong Integrated Water Resources Management Project

The Project Management UnitCredit Agreement No. 5319 - VN

CONTENTS Page

PARTI INDEPENDENT AUDITORS'REPORT ONTHE FINANCIAL STATEMENTS

Report of The Project Management Unit 2

Independent Auditors' Report on the Financial 3-4

statementsAudited Financial statements

Statement of Funds and Expenditures 5

Statement of Funds balance 6

Statement of Designated Account 7

Statement of Withdrawals and Reconciliation of 8-9Funds

Notes to the Financial statements 10-16

PARTII INDEPENDENT AUDITORS'REPORT ON 17-18THE INTERNAL CONTROL SYSTEM

PART III INDEPENDENT AUDITORS'REPORT ON 19-20THE COMPLIANCE

PART IV MANAGEMENT LETTER 21-24

IMekong Integrated Water Resources Management ProjectThe Project Management UnitCredit Agreement No. 5319 - VN

REPORT OF THE PROJECT MANAGEMENT UNIT

The Project Management Unit of the Mekong Integrated Water Resources Management Project("the Project") presents this report and the Financial Statements of the Project for the fiscal yearended as at 31 December 2018.

The Project

The Project is implemented under the Credit Agreement No. 5319-VN dated 06/01/2014 ("theAgreement") between the Government of the Socialist Republic of Vietnam and the World Bank.

I The Project Management Unit

Members of the Project Management Unit in the year and to the reporting date are:

Mr. Le Duc Trung DirectorMr. Nguyen Anh Duc Deputy DirectorMr. Hoang Van Bay Deputy DirectorMr. Tran Hong Thai Deputy DirectorMs. Le Thi Doan Trang Chief Accountant

I Auditors

The auditors of AASC Auditing Firm Company Limited have taken the audit of financialstatements of the Project.

Responsibilities of The Project Management Unit

The Project Management Unit is responsible for preparing the project financial statements,including Statement of Funds and Expenditures, Statement of Funds balance, Statement ofDesignated Account and Statement of Withdrawals and Reconciliation of Funds, which complywith the accounting policies described in the attached Notes to the Financial Statements. TheProject Management Unit assures that the accounting policies are appropriately selected andconsistently applied.

The Project Management Unit assures that the accounting records were fully maintained toprepare the financial statements in accordance with the applied accounting policies and todisclose, with reasonable accuracy at any time, the financial position of the Project.

The Project Management Unit are also responsible for maintaining an effective internal control asmanagement determines necessary to enable the preparation of financial statements that are freefrom material misstatement, whether due to fraud or error, and comply with relevant laws,regulations and other provisions of the funding agreement that could have a direct and materialfinancial effect on the Project financial statements.

On behalf of the Project Management Unit

ILe Due TrungDirectorI Hanoi, 30 May 2019

I2

I

, aasCNo.: 300519.006/BCTC.KT5

INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS

To: The Project Management UnitMekong Integrated Water Resources Management Project

Opinion

I We have audited the accompanying financial statements of the Mekong Integrated WaterResources Management project ("the Project"), which comprise Statement of Funds balanceas at 31 December 2018, Statement of Funds and Expenditures, Statement of DesignatedAccount, Statement of Withdrawals and Reconciliation of Funds and Notes to the FinancialStatements for the year then ended, as set out from page 05 to page 16.

In our opinion:

The accompanying Financial Statements give a true and fair view, of the financial positionof the Project, including the balance of the Designated Account as at 31 December 2018,funds received and expenditures incurred, movements of the Designated Account for theyear then ended in accordance with the basis of the principal accounting policiesdescribed in the Notes to the Financial Statements and the provisions of the CreditAgreement No. 5319 - VN dated 06/01/2014.

In addition, with respect to Statements of Expenditure, adequate supporting documentshave been fully maintained to support to the replenishment requests submitted to theWorld Bank. The expenditures are eligible and in right purposes of the Credit AgreementNo. 5319 - VN dated 06/01/2014.

Basis of Opinion

We conducted our audit in accordance with International Standards on Auditing ("ISAs"). Ourresponsibilities under those standards are further described in the Auditors' Responsibilitiesfor the Audit of the Financial Statements section of our report. We are independent of ProjectManagement Unit in accordance with the international Ethics Standards Board forAccountants' Code of Ethics for Professional Accountants ("IESBA Code"), and we havefulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis for ourI opinion.

Responsibilities of Management for the Financial Statements

The Project Management Unit is responsible for the preparation of the financial statements inaccordance with the principal accounting policies described in Notes to the FinancialStatements, and for such internal control as management determines is necessary to enablethe preparation of financial statements that are free from material misstatement, whether due

to fraud or error.In preparing the financial statements, management is responsible for assessing the Project'sability to continue as a going concern, disclosing, as applicable, matters relating to goingconcern and using the going concern basis of accounting unless management either intendsto cease operations, or has no realistic alternative but to do so.

IT: (84)24 3824 1990 1 F: (84)24 3825 3973 | 1 Le Phung Hieu, Hanoi, Vietnam A member of International

HANG KIM TOAN AAsc 3

I

II

Auditor's responsibilities for 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

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 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, andobtain 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 Project's preparation and fair

I presentation of 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 uncertaintyexists related to events or conditions that may cast significant doubt on the Project's ability

3 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 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 goingconcern.

Evaluate the overall presentation, structure and content of the financial statements,including the disclosures, and whether the financial statements represent the underlyingtransactions 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

I deficiencies in internal control that we identify during our audit.

AASC Limited

Nguyen Thanh Tung Nguyen Truong MinhGeneral Director Auditor in-chargeCPA Registered No.: CPA Registered No.:

0063-2018-002-1 2290-2018-002-1

Hanoi, 30 May 20194

'

# ц � " а 00 р 00 б ) д ' � о г (i � д ' о мС о � г Z N д ' N О и о г О 00 �д �у � О � N 00 СО h О О 00 и д � �

� Е � � N оо cfl и et м_ v v � � - м и°r.Q � г и оо оо N и ш � � � °'+� + � V � м О CU е- О д ' о f � N �и N � м � t ш оо т о v � и r э оо� � Q о N N f` N N f � t1 � о � �

� .� р о и г о о м � о Г мС_ .« `- � с -LL �

� и� 00 р f � t � и О � о г г О � О С �� Ш г z г О м и СО б � и f � О� СО� " й 0 � � и и 00 О и г г 0� 00

"D Ш N О СО г 00 м f � 00 СО � М� ` с� г� и м и г � t ао о и о� � � м ti �о а� rn с� � cfl и �

' L ш г оо г� сл rn о о м и й � tсв }- м о rn м м oS-г г� о мN и о О � � CV СV г СО N CV

� оо � r � о c � i � м о <tL ш ti с� с� с� г��о�

'

L

-а г� р г NrnN � О и и О иШ г z г д ' 00 '[F О Ci� N м� О � СО о О 00 и СО м 'et �

' � N г� и оо и с� cfl и оо N� � � о о м ° � � со� �и г и М С̀� е- � ON 1� иQ м rм-N � a�̀о й � N с~чО �

� � м г м г N и � ~

N

I�

р м etг

' и

�

д' �.�ОL

�

ад �� и ��а� ш °'� � � �

'

о � �

� ~ � �° �ш� 0 о � с а-- соai Ш N � � й

'

v � . � т � из Х � -� °с� � йо z ш � о � � �

� _ ? г Ш > х С �

� i � o Q � � С U Q.1L+� с м и м � о � с� Е и 0 �_, Е

ы � й °- � о � Ео �

� � oz ш � � � � и и в�п с � � ш > � и � � о с� � ш О а '� с� -� � ° � �� св� g Е �... с о °- � п о и°3 ,... � г � и ш � , � � ` � � }, �

' ш

� �о Q � � = с � � � . с ' � с �оQ.

с � Ш � � о � х о а о L �о а = t- � u.wUO wUwU� иУ у � Q �и

� L � г N м � г N CrJ � ' �� v й �

�

Mekong Integrated Water Resources Management ProjectThe Project Management Unit Financial StatementsCredit Agreement No. 5319 - VN Year ended 31 December 2018

STATEMENT OF FUNDS BALANCEAs at 31 December 2018

Note 31/12/2018 31/12/2017

Surplus/ Deficit

VND VND

Surplus as at beginning (7,425,902,648) 14,824,826,512Surplus/ (Deficit) in the year 4,234,403,869 (22,250,729,160)Surplus as at closing 3,191,498,779) (7,425,902,648)

Represented by:

Current assets 21,864,925,781 4,001,109,269

Cash on hand 85,600,000 11,600,000Cash at bank 5 1,579,095,279 3,435,697,135Other receivables 708,137 227,167Advances to contractors 6 20,199,522,365 553,584,957

Current liabitities 25,066,424,560 11,427,011,907

Payables to contractors 7 24,761,824,560 11,238,411,907Tax payables and statutory obligations 8 10,108,520 6,908,520Payables to employees 198,891,480 170,091,480Other payables 9 85,600,000 11,600,000

Net worth (3,191,498,779) (7,426,902,648)

6

II Mekong Integrated Water Resources Management Project

The Project Management Unit Financial StatementsCredit Agreement No. 5319 - VN Year ended 31 December 2018

STATEMENT OF DESIGNATED ACCOUNT

For the period: From 0110112018 to 31/12/2018Account No: 170114851031286Bank: Viet Nam Export Import Commercial Joint Stock Company - Long Bien BranchAddress: 558 Nguyen Van Cu Street, Long Bien District, Hanoi.Agreement No: 5319 - VN dated 06/01/2014.

PART A: ACTIVITIES Note USD USD

Opening balance 151,552.59

Add:Total amounts deposited by the World Bank 3,014,886.36

Deduct:Total amounts withdrawn 3,098,286.37

Closing balance 68,152.58

PART B: RECONCILIATION

1. Amount advanced by the World Bank 1,902,816.672. Deduct: Amount recovered by the World Bank 204,301.493. Present outstanding amount advanced to 1,698,515.18

4. Closing balance 68,152.585. Add:Amounts withdrawn and not yet claimed (1) 1,630,331.59Interest differences in 2015 of USD 3.99; bank 31.01charge in 2017 of USD 14.00 and bank charge in2018 of USD 21.00

1,630,362.60

7. Total advances accounted for 1,698,615.18

(1) Including:USD

Construction 202,946.33Equipment 1,180,462.85Consultancies and technical assistance 227,414.63Project management expenses 19,507.78

1,630,331.69

II

7

I

Ml l m M MmM - m m m


STATEMENT OF WITHDRAWALS AND RECONCILIATION OF FUNDSCredit Agreement No. 5319 - VNFor the fiscal year ended 31 December 2018

Advance

Withdrawal applications Amount claimed Amount received Variances Note

No. Date Currency Advance Total Date Amount

(a) (b) (b)-(a)

Designated account

08/CV-DATNNMC 22/01/2018 USD 1,550,000.00 1,550,000.00 31/01/2018 1,549,883.00 (7.00) (1)14/09/2018 110.00

Total 1,550,000.00 1,550,000.00 1,549,993.00

(1) Bank charge of USD 7.00

8


Reimbursement

Withdrawal applications Amount claimed Amount received Variances NoteConsultancies

and ProjectNo. Date Currency Construction Equipment chn management Total Date Amount

technicalassistance expenses

(a) (b) (b)-(a)Designated account

1O/CV-DATNNMC 24/01/2018 USD - 175,478.57 28,823 204,301.49 - (204,301.49) (3)64/CV-DATNNMC 26/04/2018 USD 261,854.69 258,840.04 21,916.34 542,611.07 19/05/2018 542,494.07 (7.00) (2)

- 14/09/2018 110.00174/CV-DATNNMC 22/10/2018 USD 443,851.95 - 449,295.90 29,148 922,296.29 13/11/2018 922,289.29 (7.00) (2)

Total 261,854.69 883,614.51 79,887.70 1,669,208.85 1,464,893.36

(2) Bank charge of USD 14.00.(3) Recovered by the World Bank of USD 204,301.49.

9

UI Mekong Integrated Water Resources Management Project


NOTES TO THE FINANCIAL STATEMENTSFiscal year ended 31 December 2018

1. Background

The Mekong Integrated Water Resources Management Project is implemented under theCredit Agreement No. 5319-VN dated 06/01/2014 (the "Agreement") between theGovernment of the Socialist Republic of Vietnam and the World Bank. Total project fund isestimated at USD 30 million, in which IDA funding of USD 25 million and counterpart fundingby the Government of Vietnam of USD 5 million.

The main objectives of the Project are to strengthen integrated water resources managementin the Lower Mekong Basin for sustainable economic, social and environmentaldevelopment. The Project includes components as follows:

- Component 1: Assisting the institutional development in integrated water resourcesmanagement, including (a) Establishment of a River Basin Organization; (b) Provision ofSupport for River Basin Planning and Studies; (c) Provision of Support for Monitoring; and(d) Capacity Development..

- Component 2: Establishing a water resources monitoring network at border areas withCambodia and Lao PDR in Mekong River Basin and advanced water resourcesinformation system for the Mekong River Basin in Viet Nam, including (a) Establishmentof water resources monitoring network at the border areas with Cambodia and Laos in theMekong Delta and the Central Highlands to monitor and analyze data on water qualityand quantity; (b) Development of an Integrated Water Resources Information System forthe Mekong river basin in Viet Nam.

- Component 3: Strengthening of Hydro-meteorological information network, floodforecasting and flood warning systems in the Central Highland, including (a)Strengthening and modernization of Hydrometeorology Observation Network andForecasting Services; (b) Institutional Strengthening and Capacity Building; and (c)Regional Integration for Forecasting and Early Warning Systems in the Lower MekongBasin; and

- Component 4: Project Management, supporting the project management, including PMUestablishment and operation; estabIshing and operating functions of coordination andevaluation (including external audit); Consultant recruiment;Capacity strengthening,monitoring and evaluation, technical assistance for collaboration with riparian countries ofthe Mekong River, global exchange on Mekong Delta management.

The Project officially came into effect from 07 April 2014 and is expected to close on 30 April2020.

The Project is managed by the Management Unit of Mekong Integrated Water ResourcesManagement Project, and its office is located at 23 Hang Tre Street, Hoan Kiem District,Hanoi.

I 2. Principal Accounting Policies

a. Basis of preparation of the Financial Statements

The annual accounting period commences from 1st January and ends at 3 1st December.

I10

I

II Mekong Integrated Water Resources Management Project


The financial statements are prepared in accordance with the requirements of the WorldBank and presented in Vietnam Dong (VND), except for the Statement of DesignatedAccount and Statement of Withdrawals and Reconciliation of Funds, which are prepared inUnited State Dollar (USD) and Vietnam Dong (VND).

The principal accounting policies are summarized as below:

b. Foreign currencies

Funds received from the World Bank in the foreign currencies are translated into VND underexchange rates announced by the service bank (mentioned at Note 2d) at the transactiondates.

I Other transactions in foreign currencies are translated to VND under buying rate of theservice bank at the date of transaction. All exchange differences from these transactions arerecorded as "exchange rate difference" account and presented as other funds on theStatement of Funds and Expenditures.

Monetary assets and liabilities denominated in foreign currencies are revaluated at thereporting date under buying rate of the service bank at the same date.

c. Funds and Expenditures

Funds:

- Funds received from the World Bank are recorded when remittance made into DesignatedAccount or direct payment made to the contractors/ suppliers.

- Counterpart funds of the Vietnamese Government are recorded when payments aremade directly from the Vietnam Government to contractors/ suppliers of the Project orfunds are remitted to the PMU for settlement of project's activities.

Expenditures:

Expenditures are recorded when they are actual incurred and within its approved budget.

d. Designated Account

Designated Account is the deposit accounts in USD opened at Viet Nam Export ImportCommercial Joint Stock Bank - Long Bien Branch for the Project's activities. Payments madevia the Designated Account are for eligible expenditures of the Project in accordance with theprovisions of the Credit Agreement No. 5319 - VN dated 06/01/2014.

I Interests of the Designated Account are considered as receipts of the State Budget andinitially recorded as Other payables in Statement of Funds balance and used to cover bankcharges. At the end of the Project, outstanding interests will be returned to the VietnameseGovernment. In case bank charges are not fully covered by the interests, it will be settled bythe Counterpart funds. (According to Circular No. 11 1/2016/TT-BTC dated 30 Jun 2016).

III

11

I

IMekong Integrated Water Resources Management ProjectThe Project Management Unit Financial StatementsCredit Agreement No. 5319 - VN Year ended 31 December 2018

3. Funds received from the World Bank

Year ended 31/12/2018 Accumulated to 31/12/2018Original Equivalent Original Equivalent

currency to VND currency to VND

Designated 3,014,907.36 68,508,370,417 4,503,176.57 101,243,538,228account (USD)- Advance 1,550,000.00 35,138,500,137 2,550,000.00 56,913,500,137- Reimbursement 1,464,907.36 33,369,870,280 1,953,176.57 44,330,038,091

68,508,370,417 101,243,538,228

4. Expenditures

Year ended Accumulated31/12/2018 to 31/12/2018

VND VND

Expenditures covered by:The World Bank 64,006,309,130 105,359,412,928The Counterpart fund 6,199,245,860 7,123,350,552

70,205,554,990 112,482,763,480

1 Year ended Accumulated31/12/2018 to 31/12/2018

VND VND

Component 1: Assist the institutional development 13,622,904,050 16,670,031,846in integrated water resources managementComponent 2: Establishing a water resources 2,392,453,652 22,036,612,936monitoring network at border areas withCambodia and Lao PDR in Mekong River Basinand advanced water resources informationsystem for the Mekong River Basin in Viet Nam

Component 3: Strengthening of Hydro- 48,478,771,969 55,168,392,515meteorological information network, floodforecasting and flood warning systems in theCentral HighlandComponent 4: Project Management 5,711,425,319 18,607,726,183

70,205,554,990 112,482,763,480

II

12

I


Expenditures including tax are financed as follows:

CounterpartNo. Components IDA Fund fund

USD'000 USD'000

1 Component 1 2,520.84 890.952 Component 2 15,141.39 2,167.553 Component 3 6,162.97 1,435.504 Component 4 1,174.80 506.00

25,000.00 5,000.00

III

-A TOj

IIIIIIII

I

mmm - m m me-m mmomm--

Mekong Integrated Water Resources Management ProjectThe Project Management Unit Financial Statements

Credit Agreement No. 5319 - VN Year ended 31 December 2018

Expenditures by categories:

Year ended 31/12/2018 Accumulated to 31/12/2018

Categories IDA Counterpart fund Total IDA Counterpart fund Total

VND VND VND VND VND VND

Construction 20,200,913,069 - 20,200,913,069 20,200,913,069 - 20,200,913,069

Equipment 22,210,247,591 - 22,210,247,591 34,744,654,091 - 34,744,654,091

Consultancies and technical 19,792,996,170 4,325,791,981 24,118,788,151 43,273,612,835 4,325,791,981 47,599,404,816

assistanceProject management expenses 1,802,152,300 1,873,453,879 3,675,606,179 7,140,232,933 2,797,558,571 9,937,791,504

64,006,309,130 6,199,245,860 70,205,554,990 105,359,412,928 7,123,350,552 112,482,763,480

14


6. Cask at bank

31/12/2018 31/12/2017VND VND

Designated Account 1,579,095,279 3,435,697,135

1,579,095,279 3,435,697,135

6. Advances to contractors

I 31/12/2018 31/12/2017VND VND

Phuc Thanh Viet Nam Joint Stock Company 4,940,052,100 -Redriver Engineering Trading Company Limited 2,581,456,724 -Sai Gon Telecommunication & Technologies 5,463,877,740 -Tan Viet My Trading Service Company Limited 5,134,760,356 -Other Advances to contractors 2,079,375,445 553,584,957

20,199,522,365 553,584,957

7. Payables to contractos

31/12/2018 31/12/2017

VND VND

OSB Investment and Technology Joint Stock 10,275,306,373CompanyN36 Technical Consultancy and Investment Joint 4,278,892,562Stock CompanyD&S Construction and Trading Joint Stock Company 2,682,635,908

Phu Binh Group Investment Joint Stock Company - 4,409,182,800An Phuoc International Corporation - 1,527,062,900Viet Nam Environmental and Hydrometeorological 2,580,437,132Equipment Joint Stock CompanyAsia Project Management Consultanting and - 1,725,887,583Supervising Joint Stock CompanyPAT International Joint Stock Company - 2,336,101,924Other payables to contractors 4,944,552,585 1,240,176,700

24,761,824,560 11,238,411,907

II

15

I

IMekong Integrated Water Resources Management ProjectThe Project Management Unit Financial StatementsCredit Agreement No. 5319 - VN Year ended 31 December 20188. Tax payables and statutory obligations

31/12/2018 31/12/2017VND VND

Personal income tax 10,108,520 6,908,520

10,108,520 6,908,520

9. Other payables31/12/2018 31/12/2017

VND VND

Sale of Bid documents 85,600,000 11,600,000

85,600,000 11,600,000

10. 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.

1 11. Corresponding figures

The corresponding figures are the financial statements for the fiscal year ended as at 31December 2017 which were audited by AASC Limited.

12. Approval of the Financial Statements

The financial statements were approved by Project Management Unit for issuance on 30 May

2019.

Le Duc Trung Le Thi Doan TrangDirector Chief Accountant

Hanoi, 30 May 2019

IIII

16

I

I

No.: 300519.006/BCTC.KT5

IINDEPENDENT AUDITORS' REPORT ON THE INTERNAL CONTROL SYSTEM

ITo: The Project Management UnitMekong Integrated Water Resources Management Project

We have audited, in accordance with the International Standards on Auditing, the financialstatements of the Mekong Integrated Water Resources Management project ("the Project") forthe year ended 31 December 2018 and issued the auditors report there on dated on 30 May2019 expressing an opinion on those financial statements.

In connection with our audit of the financial statements, we also examined the effectiveness ofinternal control over compliance with requirements that could have a direct and materialfinancial effect on the financial statements as well as the internal control over financial reportingfor the year ended 31 December 2018.

Responsibilities of the Project Management Unit

The Project Management Unit is responsible for maintaining an effective internal control overcompliance with requirements that could have a direct and material financial effect on thefinancial statements as well as the internal control over financial reporting.

Auditor's Responsibility

Our responsibility is to express an opinion on the effectiveness of internal control based on ourexamination.

Our examination was conducted in accordance with the International Standard on AssuranceEngagements (ISAE) 3000, accordingly, included obtaining an understanding of the internalcontrol over compliance with requirements that could have a direct and material financial effecton the financial statements as well as of internal control over financial reporting, testing, andevaluating the design and operating effectiveness of the internal control, and performing suchother procedures as we considered necessary in the circumstances to obtain sufficientappropriate evidence on which to base our opinion.

Because of the inherent limitations of internal control over financial reporting, including thepossibility of collusion or improper management override of controls, material misstatementsdue to error or fraud may occur and not to be prevented or detected on a regular basis. Inaddition, projections of any evaluation of the effectiveness of the internal control over financialreporting to future periods are subject to the risk that controls may become inadequate becauseof changes in conditions, or that the degree of compliance with the policies or procedures mayI deteriorate.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our opinion.

IT: (84)24 3824 1990 F: (84)24 3825 3973 I 1 Le Phung Hieu, Hanoi, Vietnam A member of International

HANG KIM TOAN AASC 17

I

I

IAuditors' opinion

In our opinion, the Project has maintained an effective internal control over misstatements thatcould have a direct and material financial effect on the Project financial statements for the yearI ended 31 December 2018.

AASC LimitedINguyen Thanh Tung Nguyen Truong MinhGeneral Director Auditor in-chargeCPA Registered No.: CPA Registered No.:0063-2018-002-1 2290-2018-002-1

I Hanoi, 30 May 2019

IIIIIIIIIII

18

I

II, aasc

No.: 300519.006/BCTC.KT5

IINDEPENDENT AUDITORS' REPORT ON THE COMPLIANCE

ITo: The Project Management Unit

Mekong Integrated Water Resources Management Project

We have audited, in accordance with the International Standards on Auditing, the financialstatements of the Mekong Integrated Water Resources project ("the Project") for the year ended31 December 2018 and issued the auditors report there on dated on 30 May 2019 expressingan opinion on those financial statements.

In connection with the audit of the financial statements, we also performed procedures on theProject's compliance with the Credit Agreement No. 5319-VN dated 06/01/2014 law andregulations that have a direct and material effect on the Project's financial statements for theyear ended 31 December 2018 ("the Requirements").

Responsibilities of The Project Management Unit

The Project Management Unit is responsible for complying with the Requirements applicableto the Project.

Auditor's Responsibility

Our responsibility is to express an opinion on the Project's compliance with the Requirementsbased on our procedures. We limited our tests of compliance to the requirements, and we didnot test compliance with all laws and regulations applicable to the Project.

We performed our work in accordance with the International Standard on AssuranceEngagements (ISAE) 3000. That standard requires that we comply with ethical requirementsand plan and perform our procedures to obtain reasonable assurance about whether, in allmaterial respects, the Project has complied with the requirements.

I An assurance engagement to report on the compliance with the requirements at the Projectinvolves performing procedures to obtain evidence about whether the Project's activities arefree of material noncompliance with the requirements, including obtaining an understanding ofthe internal control relevant to the Project's compliance with the requirements. The proceduresselected depend on the auditors' judgment, including the assessment of risks that the Projectdoes not comply with the requirements and whether such noncompliance could have a directand material financial effect on the Project's financial statements. Our procedures includedtesting the compliance with the requirements we consider necessary to provide a reasonableassurance that the requirements are complied by the Project.

I We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our opinion.

II

T: (84)24 3824 1990 F: (84)24 3825 3973 [Le Ph-ung HKeu Hanoi, Vietnam A member of International

HANG KI4M TOAN AASC 19

I

III Auditors' opinion

In our opinion, the Project has complied with the Requirements that could have a direct andmaterial financial effect on the Project's financial statements for the year ended 31 December2018.

IAASC Limited

Nguyen Thanh Tung Nguyen Truong MinhDeputy General Director Auditor in-chargeCPA Registered No.: CPA Registered No.:0063-2018-002-1 2290-2018-002-1

Hanoi, 30 May 2019

IIIIIIIIIII

20

I

1 mekong-ntegratedwate&res0urces the … · 2019-09-06 · nguyen thanh tung nguyen truong minh...

Documents