audited project financial statements...prepared by the ministry of water resources and meteorology...

Audited Project Financial Statements

Project Number: 48409-002Loan Numbers: 3661 and 8346 and Grant Number: 0579Period covered: 1 October 2018 to 31 December 2019

CAM: Climate-Friendly Agribusiness Value Chains Sector Project

Prepared by the Ministry of Water Resources and Meteorology

For the Asian Development Bank

Date accepted by ADB: 2 December 2020

The audited project financial statements are documents owned by the borrower. The views expressed herein do not necessarily represent those of ADB’s Board of Directors, Management, or staff. These documents are made publicly available in accordance with ADB's Access to Information Policy and as agreed between ADB and the Ministry of Water Resources and Meteorology.

Ministry of Water Resources and Meteorology

Climate-Friendly Agribusiness Value Chains Sector Project

ADB Loan No. 3661 – CAM (COL)/Loan No. 8346 – CAM (EF)/Grant No. 0579 – CAM (EF)

Notes to the financial statements for the period from 1 October 2018 to 31 December 2019

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1. Background and activities

The Climate-Friendly Agribusiness Value Chains Sector Project (“the Project”) was established under the Loan Agreement No. 3661 – CAM (COL), Loan Agreement No. 8346 – CAM (EF) and Grant Agreement No. 0579 – CAM (EF), signed on 6 July 2018 between the Asian Development Bank (“ADB”) and the Royal Government of Cambodia (“RGC”) (represented by the Ministry of Economy and Finance).

The Project was approved by ADB on 6 July 2018 and declared effective date on 1 October 2018, whereby Loan Agreement No. 3661 – CAM (COL), Loan Agreement No. 8346 – CAM (EF) and Grant Agreement No. 0579 – CAM (EF) grant the proceeds amounting to US$90 million, US$10 million and US$30 million, respectively.

The Loan Agreement No. 3661 – CAM (COL) has a principal repayment period of 24 years, and a grace period of 8 years with an interest rate of 1% per annum during the grace period, and 1.5% per annum thereafter on the amount of the loan withdrawn from the loan account and outstanding from time to time. The interest charge and any other charge on the Loan shall be payable semi-annually on 15 June and 15 December in each year.

The Loan Agreement No. 8346 – CAM (EF) has a principal repayment period of 24 years, and a grace period of 8 years, and service charge 0.25% per annum thereafter on the amount of the loan withdrawn from the loan account and outstanding from time to time. The service charge and any other charge on the Loan shall be payable semi-annually on 15 June and 15 December in each year.

The objective of the Project is to develop productive and resource efficient agribusiness value chains.

The Ministry of Agriculture, Forestry and Fisheries (“MAFF”) is the Project’s Executing Agency (“PEA”) to assume overall supervision and guidance on implementation of the Project. The Ministry of Rural Development (“MRD”) and Ministry of Water Resources and Meteorology (“MOWRAM”) are the Implementing Agencies (“IAs”).

The Project comprises of 3 components as the following:

Component 1: Improvement and enhancement of climate resilience of critical agribusiness value chain infrastructure

This includes rehabilitating water management infrastructure, upgrading agriculture cooperative value chain infrastructure, improving connectivity to cooperatives and markets, strengthening infrastructure for agricultural quality and safety testing at the National Agricultural Laboratory, and promoting renewable energy;




Notes to the financial statements (continued) for the period from 1 October 2018 to 31 December 2019

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1. Background and activities (continued)

Component 2: Promotion of "climate smart" agriculture and agribusiness

This includes deploying climate resilient varieties, strengthening capacity in climate friendly production practices and technologies, and promoting farm mechanization and extension; and

Component 3: Enhancement of enabling environment for climate friendly agribusiness

This includes formulating climate friendly agribusiness policies and standards, promoting green finance and risk sharing mechanisms, and supporting climate risk management through information and communication technologies.

The Project will provide Consulting Services for capacity building, seed variety development, project implementation, and feasibility studies and detailed design for Subprojects. The Project is expected to be completed by 30 September 2024.

The table below sets forth the categories of items of expenditure to be financed out of the proceeds of the ADB Loan and Grant and the allocation of amounts of the Loan and Grant each such category:

ADB Loan No. 3661 – CAM (COL)

* Exclusive of taxes and duties imposed within the territory of the borrower.

No. Item

Total amount allocated for ADB financing (US$)

Basis for withdrawal from the loan account

Category Subcategory

1 Works 67,630,590

1A Irrigation and roads 60,537,190 76.8% of total expenditure claimed

1B Warehouses and laboratory 5,762,800 100% of total expenditure claimed

1C Other infrastructure 1,330,600 92.1% of total expenditure claimed

2 Equipment, materials, goods and project implementation services

16,757,700 100% of total expenditure claimed*

3 Incremental operating cost 4,187,100 100% of total expenditure claimed

4 Interest charge 1,424,610 100% of amount due

Total 90,000,000





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1. Background and activities (continued)

ADB GCF Loan No. 8346 – CAM (EF)

ADB Grant No. 0579 – CAM (EF)

* Exclusive of taxes and duties imposed within the territory of the recipient.

No. Item Total amount allocated for

ADB financing (US$) Basis for withdrawal

from the loan account

1 Civil works - Irrigation 9,963,900

12.7% of total expenditure claimed

2 Service charge 36,100 100% of amount due

Total 10,000,000

No. Item

Total amount allocated for ADB financing (US$) Basis for withdrawal

from the grant account Category Subcategory

1 Works 11,263,860

1A Irrigation and roads 8,295,660 10.5% of total expenditure claimed

1B Warehouses and laboratory 114,050 7.9% of total expenditure claimed

1C Other infrastructure 2,854,150 100% of total expenditure claimed

2 Equipment, materials, goods and project implementation services

10,785,430 100% of total expenditure claimed*

3 Trainings, workshops and demonstration

7,456,780 100% of total expenditure claimed

4 Incremental operating cost 493,930 100% of total expenditure claimed

Total 30,000,000





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2. Significant accounting policies

(a) Basis of accounting

The financial statements, which are expressed in United States Dollars (“US$”), have been prepared in accordance with a modified cash receipts and disbursements basis of accounting. This is a basis of accounting that is designed to meet the requirements of the Project; it is not designed to produce financial statements that are compatible with International Financial Reporting Standards. Under this basis of accounting, income is recognised when funds are received in cash and expenditure is recognised when payments are made rather than when it is incurred, except for the advanced payments made to suppliers that are initially recognised as a receivable and only recognised as payments when they have been liquidated by supporting invoices.

(b) Statement of advance account

The statement of advance account is prepared in accordance with the Loan and Grant Agreements and is purely used to receive and disburse for expenditure financed by the ADB.

(c) Non-expendable equipment

The cost of non-expendable equipment is charged to the statement of receipts and expenditure upon acquisition. For control and management purposes, a memorandum account for non-expendable equipment is maintained by way of a non-expendable equipment listing.

(d) Foreign currency transactions

The Project transacts its operations and maintains its accounting records primarily in United States Dollars (“US$”). Transactions in currencies other than US$ are converted into US$ at the rates of exchange prevailing on the transaction dates. Cash and bank balances in currencies other than US$ are translated into US$ at the open market rates of exchange at the period end. All foreign exchange differences are recognised in the statement of receipts and expenditure.





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2. Significant accounting policies (continued)

(e) Interest charge/Service charge

The interest charge and service charge by the ADB are accounted for in the statement of receipts and expenditure as receipts and corresponding expenditure.

(f) In-kind contribution

All in-kind contribution by RGC to the Project are not accounted for in the statement of receipts and expenditure. In-kind contribution is disclosed in the Notes to the financial statements for information only.

3. Cash and bank balances

As at 31 December 2019 ADB Loan No. 3661 RGC Total US$ US$ US$

Cash at banks 448,000 40,000 488,000

This represents current account maintained at the National Bank of Cambodia and Acleda Bank and earmarked specifically for the use of the Project.

4. Receipts

(a) Asian Development Bank

Period from 1 October 2018 to

31 December 2019

ADB Loan

No. 3661

US$

Initial advance 448,000





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4. Receipts (continued)

(a) Asian Development Bank (continued)

Receipts from ADB was paid into the designated advance account held by the Ministry of Water Resources and Meteorology at the Acleda Bank. This is a separate bank account held for ADB funds earmarked specifically for the use of the Project.

During the period, the Project only received fund from ADB Loan No. 3661 – CAM (COL).

(b) Royal Government of Cambodia

Period from 1 October 2018 to

31 December 2019 US$

Initial advance 40,000





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5. Statement of withdrawal

Withdrawal

Application number Date Currency Works

Equipment, materials, goods

and project implementation

services

Incremental operation cost

Interest charge Initial advance Total

ADB Loan No. 3661

Advance account

M0001 (A) 20-Dec-18 US$ - - - - 448,000 448,000

RGC Fund Advance account

C0001(B) 6-Jun-19 US$ - - - - 40,000 40,000

Total (C=A+B) - - - - 488,000 488,000

audited project financial statements...prepared by the ministry of water resources and meteorology...

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