a ~ GrantThornton U . Financial Statements and Independent Auditors' Report a Da Nang - Quang Ngai Expressway Development Project (Component 2B funded by the World Bank- U Financial Agreements No. 4942-VN and No.4941-VN) g For the period from 1 January 2018 to 28 February 2019 2;U C Da Nang - Quang Ngai Expressway Development Project (Component 2B funded by the World Bank- Financial Agreements No. 4942-VN and No.4941-VN) U Contents U U Page Part I - Financial Statements I Report of the Thang Long Project Management Unit 2 Independent Auditors' Report 4 Statement of sources and uses of funds 6 Balance sheet 7 Statement of designated account 8 Statement of grant withdrawals 9 Notes to the financial statements 10 Part II -Auditors' Report on the Internal Control 13 3 Part III - Auditors' Report on the Compliance 16 Management letter 19 C U (V Z U U U a Da Nang - Quang Ngai Expressway Development Project (Component 2B funded by the World Bank- Financial Agreements No. 4942-VN and No.4941-VN) U U S I S U U I I * Part S Financial Statements U I II I1 a U Da Nang - Quang Ngai Expressway Development Project (Component 2B funded by the World Bank- Financial Agreements No. 4942-VN and No.4941-VN) a Report of the Thang Long Project Management Unit-Ministry of Transport UY U Thang Long Project Management Unit-Ministry of Transport (hereinafter referred as "PMU") submits its report together with the audited financial statements of the Da Nang - Quang Ngai Expressway Development Project - Component 2B funded by the World Bank - Financial Agreements No. 4942-VN and No.4941-VN ("the Project") for the period from 1 January 2018 to 28 February 2019 ("the period"). * Auditors The Project's financial statements for the period from 1 January 2018 to 28 February 2019 have been audited by Grant Thornton (Vietnam) Limited. Thang Long Project Management Unit-Ministry of Transport The member of PMU is responsible for overall direction and management of the Project during the period and to the date of the report are: Name Position Mr Duong Viet Roan Director Mr Nguyen Xuan Lam Deputy of Director 4K Mr Phung Tuan Son General Planning Department Manager Mr Tran Van Chien Chief accountant 3 Statement of Thang Long Project Management Unit-Ministry of Transport PMU is responsible for preparing the Project's financial statements for period from 1 January 2018 to 28 February 2019 ("the period") which give a true and fair view of: * the financial position of the Project; * the funds received and expended for the year; * the activities of the designated account for the year and the balance of this account as at 28 February 2019; and * the funds withdrawn for the year. In preparing those financial statements, the Thang Long Project Management Unit-Ministry of Transport is required to: * select suitable accounting policies and then apply them consistently in accordance with the Financial Agreements No.4942-VN and No.4941-VN between Socialist Republic of Vietnam and International Development Association ("IDA") and the Project Administration Manual; * make judgements 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; and * design and implement an effective internal control system for the purpose of properly preparing and presenting the financial statements so as to minimise errors and frauds. 0 The Thang Long Project Management Unit-Ministry of Transport confirms that they have complied with the above requirements in preparing the Financial Statements. The Thang Long Project Management Unit-Ministry of Transport 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 to ensure that the accounting records comply with the accounting system as described in the Project Implementation Manual. They are also responsible for safeguarding the assets of the Project and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. 2 S U Da Nang - Quang Ngai Expressway Development Project (Component 2B funded by the World Bank- Financial Agreements No. 4942-VN and No.4941-VN) Approval of the financial statements We hereby approve the accompanying financial statements on pages 6 to 12 which give a true and fair view of the fund balance of the Da Nang-Quang Ngai Expressway Development Project - Component 2B funded by the World Bank - Financial Agreements No. 4942-VN and No.4941-VN as at 28 February 2019, the movement and balance of the designated account for the Credit fund as at 28 February 2019 and the funds received and disbursed during the period from 1 January 2018 to 28 February 2019, in accordance with the accounting policies as described in Note 2 to the financial statements and in the opinion of the PMU, the loan withdrawals have been adequately reconciled to the statement of expenditures during the year, and such statement of expenditures was adequately supported. For and on behalf of the Thang Long Project Management Unit-Ministry of Transport, Hanoi, Vietnam 28 June 2019 3 8 SA0 GrantThornton U Independent Auditors' Report on the financial statements of the Da Nang - Quang Ngai Expressway Development Project Grant Thornton (Vietnam) Limited (Component 2B funded by the World Bank- 1811 Floor Financial Agreements No. 4942-VN and No.4941-VN) Hoa Binh International Office Building for the period from 1 January 2018 to 28 February 2019 106 Hoang Quoc Viet Street Cau Giay District, Hanoi Vietnam 3 T +84 24 3850 1686 F +84 24 3850 1688 No. 16-11-237-PMU-1 8 To: The Thang Long Project Management Unit-Ministry of Transport International Development Association Auditors' opinion We have audited the accompanying financial statements of the Da Nang - Quang Ngai Expressway Development Project (Component 2B funded by the World Bank - Financial Agreements No. 4942-VN and No.4941-VN) ("the Project") for the period from 1 January 2018 to 28 February 2019, prepared on 28 June 2019, including the Statement of fund balance as at 28 February 2019, the Statement of sources and uses of funds, the Statement of designated account, and a summary of significant accounting policies and other explanatory notes as presented on pages 6 to 12. In our opinion, in all material respects: * The accompanying financial statements give a true and fair view of the funds received and expenditures of the Project for the period from 1 January 2018 to 28 February 2019 in conformity with the accounting policies described in Note 2 of the Notes to the financial statements; * The accompanying statement of designated account gives a true and fair view of the balance of the designated account as at 28 February 2019 and the Project's receipts and disbursements via this designated account for the period from 1 January 2018 to 28 February 2019 in conformity with the relevant covenants of the Component 2B funded by the World Bank- Financial Agreements No. 4942-VN and No.4941-VN, the Project Implementation Manual and relevant regulations established by the World Bank; and * Withdrawal Applications were adequately reconciled to the statements of expenditures ("SOEs") prepared by Thang Long Project Management Unit - Ministry of Transport for the period from 1 January 2018 to 28 February 2019 and those SOEs were adequately supported by accounting vouchers. Basis for auditors' opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Project in accordance with the ethical requirements that are relevant to our audit of the financial statements in Vietnam, 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. Grant Thornton (Vietnam) Limited grantthornton.com.vn Company code and tax: 0101476557. Registered In Vietnam. S Responsibility of the Thang Long Project Management Unit-ilinistry of Transport for the financial statements Thang Long Project Management Unit-Ministry of Transport is responsible for the preparation and fair presentation of these financial statements in accordance with accounting policies as described in Note 2 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. Auditors' responsibility Our objectives are to obtain reasonable assurance about whether the financial statements of the Project 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 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 scepticism 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; and * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Thang Long Project Management Unit - Ministry of Transport. We communicate with Thang Long Project Management Unit - Ministry of Transport, 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. GRANT THORNTON (VIETNAM) LIMITED U Nguyen Hong Ha Bui Tran Phuong Minh CPA Vietnam Practising Certificate CPA Vietnam Practising Certificate No: 1710-2018-068-1 No: 2595-2018-068-1 Deputy General Director Auditor Hanoi, Vietnam 28 June 2019 *5 U Da Nang - Quang Ngai Expressway Development Project (Component 2B funded by the World Bank- Financial Agreements No. 4942-VN and No.4941-VN) U * Statement of sources and uses of funds * for the period from 1 January 2018 to 28 February 2019 a Note Period from 1 January 2018 Year ended Accumulated to to 28 February 2019 31 December 2017 28 February 2019 VND VND VND Sources of funds Grant fund from World Bank 3 29,303,289,863 16,137,063,928 45,440,353,791 Counterpart Fund 999,791,817 - 999,791,817 30,303,081,680 16,137,063,928 46,440,145,608 Uses of funds Component 2(b) Consulting services (25,241,605,810) (21,608,680,834) (46,850,286,644) Tools and supplies (2,596,414,417) - (2,596,414,417) Project management (925,000,000) - (925,000,000) Bank charge (682,050) (681,750) (1,363,800) 4 (28,763,702,277) (21,609,362,584) (50,373,064,861) Surplus/(Deficit) of sources over use of funds 1,539,379,403 (5,472,298,656) (3,932,919,253) Foreign exchange difference 285,872,442 254,862,605 540,735,047 Fund balance at the beginning of the period/year (5,217,436,051) - Fund balance at the end of the period/year (3,392,184,206) (5,217,436,051) (3,392,184,206) Hanoi, Vietnam 28 June 2019 Thang Long Project Management Unit-Ministry of Transport Tran Van Chien Chief Accountant Th e notes set out on pages from, 10 to 12,an integral par-, of these financial statements 6 Da Nang - Quang Ngai Expressway Development Project (Component 2B funded by the World Bank- Financial Agreements No. 4942-VN and No.4941-VN) 8 8 * Balance sheet * as at 28 February 2019 a 8 Notes 28 February 2019 31 December 2017 VND VND ASSETS Cash 142,280,935 3,261,733,689 Cash (Foreign currency - USD) 5 142,280,935 3,261,733,689 Receivables 19,262,766 977,609,535 Advances to contractors - 958,739,649 a Other receivables 19,262,766 18,869,886 TOTAL ASSETS 161,543,701 4,239,343,224 RESOURCES Liabilities 3,553,727,907 9,456,779,275 Payables to contractors 6 3,553,727,907 9,111,338,535 Taxes and payables to State Budget 345,440,740 Fund balance (3,392,184,206) (5,217,436,051) Fund balance carried forward (3,392,184,206) (5,217,436,051) TOTAL RESOURCES 161,543,701 4,239,343,224 Hanoi, Vietnam 28 June 2019 Thang Long Project Management Unit-Ministry of Transport Tran Van Chien Chief Accountant T S 8 U 3 ~ The notes set out on oages from 102 to 12 an integral part or these firnncia statements 7 Da Nang - Quang Ngai Expressway Development Project (Component 2B funded by the VVorld Bank- Financial Agreements No- 4942-VN and No.4941-VN) a Statement of designated account Reporting period: For the period from 1 January 2018 to 28 February 2019 Account number 01101370002405 Bank Maritime Commercial Joint Stock Bank Address No 54A Nguyen Chi Thanh, Lang Thuong Ward, Dong Da District, Hanoi, Vietnam Credit Agreement 4942-VN and 4941-VN Currency USD 8 For the period from 1 January 2018 Note to 28 February 2019 USD Part A- Account activity Beginning balance as at 1 January 2018 145,271.81 I Add: Amount advanced to Designated Account - Amounts disbursed by World Bank 624,077.75 Less: Amount withdrawn from the Designated Account (763,059.95) Bank charge (30.00) Ending balance as at 28 February 2019 6,259.61 Part B: Account reconciliation Amount advanced by World Bank 300,000.00 Less: Amount recovered by World Bank (155,411.36) Outstanding amount advanced to designated account as at 28 February 2019 144,588.64 Balance of designated account as at 28 February 2019 6,259.61 Add: Amounts withdrawn but not yet claimed 7 137,421.57 Bank charge 907.46 Total advances to designated account as at 28 February 2019 144,588.64 Hanoi, Vietnam 28 June 2019 Thang Long Project Management Unit-Ministry of Transport Tran Van Chien Chief Accountant The notes set out on pages from 10 to 12 an integral part of these financial statements 8 U s У С � , т а о т � С С � С С С С л д Е � Е Е � Е а � л л л л л�, т гв � сц т т го n Q ш n ti ti Q > n о ш ш а о с°� ш й ы ш � F�' � � � � О� � � � 0 о � � � � � � � � � с� д � С ш � � о и и� и со оо v с� и С о � v т м м о и и с� � � о М N О (О 1� Г V' о аО N й Е со � м и со v � v v � а v м о оо й v о и v_ п о v c�i ао г Г о с� сд ао � и с� � cv v Nm й �_ пi пi пi � ш т т т т со со со т и и � � Ё � т го а � U.- � �.- � л > b ti ё � а �� а� о z° о о�� � с° °�� Г N и N°cv° N � rn и г� и<- ш оо v с� и � о r v ао м Г о и и Г р о с� с� F- М N 1� СО 1� �Г б� м N СО f� М и (О V !� V V v.- ``� о со й v� о и v_ � о v с� оо Г Г о c�i сд оо N N � N О Ор Ф О�_ N N N � �+ � � � i i i i i i С � ы � w � ы � � и � U Z ш � � � _и ы_�о �� � � � '� rn п� и и � и со со v cv и V о � � U � s � � С С_ о � v� м м о и и с� С с) о U � С М N О (О 1� Г д' б� а0 N � U � Z � С й � W 1� М и СО V I� 'V' V ¢ 'в О С И- v м О оо и v О и V � П7 .. 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Da Nang - Quang Ngai Expressway Development Project (Component 2B funded by the World Bank-Financial Agreements No. 4942-VN and No.4941-VN) bo NotE-;s to thte. fil lancial state, , ents for the period from 1 January 2018 to 28 February 2019 1 The Project background Da Nang - Quang Ngai Expressway Development Project operates under the following agreements: 0 Loan Agreement No. VN 1 O-P8 dated 15 June 2011 signed between the Socialist Republic of Vietnam and the Japan International Cooperation Agency (JICA); 0 Financing Agreements No. 4942-VN and No. 4941-VN dated 12 January 2012 signed between the Socialist Republic of Vietnam and the International Development Association (IDA); and 0 Loan Agreement No. 8049-VN dated 12 January 2012 signed between the Socialist Republic of Vietnam and the International Bank for Reconstruction and Development (IBRD). The loans from IDA and IBRD are implemented through the World Bank ("WB"). The objectives of the Project are to construct an expressway that will enhance efficiency and safety for road users travelling between Da Nang city and Quang Ngai province and build institutional capacity for expressway development in the Ministry of Transport. 9 According to Decision No. 220/QD-BGTVT issued by the Ministry of Transport dated 22 January 2010, Vietnam Expressway Corporation (VEC) is the PMU for Component 1 and 2A of the Da Nang - Quang Ngai Expressway Development Project. According to the Decision No. 1903/QD-BGTVT dated 13 August 2012 and the Aide Memoire of the World Bank from 15 October 2012 to 13 November 2012, the Directorate for Roads of Vietnam is appointed as C the Project Owner and Project Management Unit 1 (PMU1) is appointed as Agency of implementing and contract management for the Component 26 - "Building capacity and support for expressway network planning and management". M .1-1 According to Decision No. 1956/QD-BGTVT issued by the Ministry of Transport dated 31 May 2017, the Project V/Y Management Unit 1 and Thang Long Project Management Unit had been reorganised as Thang Long Project Management Unit under the Ministry of Transport since 1 July 2017. The Project is implemented by the Thang Long Project Management Unit-Ministry of Transport directly under the Ministry of Transport. The Thang Long Project Management Unit-Ministry of Transport is located at group 23, Linh Nam Ward, Hoang Mai District, Hanoi, Vietnam 2. Principle accounting policies 2.1 Basis of preparation of the financial statements The financial statements are prepared for the Project operations of Component 2B funded by the World Bank under Financing Agreements No. 4942-VN and No. 4941-VN, implemented by the Thang Long Project Management Unit- Ministry of Transport. Therefore they only present income, expenditures, fund balance, loan withdrawals, and the designated account for this component. 2.2 Basis of accounting The financial statements are prepared in accordance with the World Bank's financial reporting requirements, the requirements of the above mentioned Agreements and the following accounting principles. The financial statements are prepared under the historical cost convention and on a modified cash basis of accounting. Accordingly, receipts are recognised when received rather than when the right to receive them arises, and expenditures are recognised when incurred. 10 Da Nang - Quang Ngai Expressway Development Project (Component 2B funded by the World Bank-Financial Agreements No. 4942-VN and No.4941-VN) 2.3 Reporting currencies The accounting records of the Project are maintained in Vietnamese Dong ("VND"). The financial statements are prepared in Vietnamese Dong except for the statement of designated account and the statement of loan withdrawals, which are prepared in the original currency of United States Dollars ("USD") as required by the World Bank. 2.4 Accounting period The Project's accounting period is from 1 January to 31 December. Current accounting period from 1 January 2018 to 28 February 2019 under the Contract No. 03/HDTV- VEC/2017 dated 10 February 2017. 3. Grant Fund from World Bank For the period from 1 January 2018 Accumulated to to 28 February 2019 28 February 2019 USD VND equivalent USD VND equivalent Funds received from World Bank 1,296,657.83 29,303,289,863 2,020,620.50 45,440,353,791 4. Expenses by activities and by sources of fund For the period from 1 January 2018 Year ended to 28 February 2019 31 December 2017 Technical assistance in managing of highway VND VND network (CSM1) 5,632,530,617 14,659,420,950 Capacity building of policy support for Ministry of Transport in managing projects (CSM4, CS9) 19,609,075,193 6,949,259,884 Tools and supplies for officers of Ministry of Transport (MOT-G-7, MOT-TD, MOT- TT) 2,596,414,417 - Project management 925,000,000 - N1 Bank charge 682,050 TH 28,763,702,277 21,609,362,584 T 5. Cash at bank H( 28 February 2019 31 December 2017 USD VND equivalent USD VND equivalent Designated account 6,259.61 142,280,935 145,271.81 3,261,733,689 6,259.61 142,280,935 145,271.81 3,261,733,689 6. Payables to consulting contractors 28 February 2019 31 December 2017 VND VND Getinsa Ingenieria 4,368,602,238 Transport Engineering Consultant International JSC 1,373,819,163 EY Solutions LLP (Singapore) 3,368,917,134 PricewaterhouseCoopers (Vietnam) Limited 2,561,495,560 ISC Investment and Consulting Co Ltd 944,498,708 Maritime bank 47,733,639 3,553,727,907 9,111,338,535 Da Nang - Quang Ngai Expressway Development Project (Component 2B funded by the World Bank-Financial Agreements No. 4942-VN and No.4941-VN) 8 a 7. Amount withdrawn but not yet claimed 28 February 2019 USD VND Payment for contractor for CSM1 50,581.36 1,177,281,061 Payment for contractor for MOT- G7 86,840.21 2,017,298,080 137,421.57 3,194,579,141 S 8. Comparative figures Certain corresponding figures have been reclassified to conform to the current period's presentation, as follows: Statement of sources and uses of funds for the year ended 31 December 2017: As previously reported Reclassification As reclassified VND VND VND Uses of funds Bank charge - 681,750 681,750 Balance sheet as at 31 December 2017 As previously reported Reclassification As reclassified VND VND VND Assets Other receivables 19,551,636 (681,750) 18,869,886 8 9. Subsequent event No significant events have occurred since the reporting date, which would impact on the financial position of the Project as disclosed in the Balance Sheet as at 28 February 2019 or on the result of its operation and its funds received and expenses for the period from 1 January 2018 to 28 February 2019. 10. Approval for issuance of the financial statements The financial statements were approved by Thang Long Project Management Unit-Ministry of Transport to issue. Hanoi, Vietnam 28 June 2019 Thang Long Project Management Unit-Ministry of Transport Tran Van Chien Chief Accountant 1 12 B Da Nang - Quang Ngai Expressway Development Project (Component 2B funded by the World Bank-Financial Agreements No. 4942-VN and No.4941-VN) 8 8 8 U a U 8 a a * Part I " Auditors' Report on the UB Internal Control U S 3 1 W U * 0 GrantThornton a Independent Auditors' Report a on the Internal Control over financial reporting the Da Nang - Quang Ngai Expressway Development Project Grant Thornton (Vietnam) Limited (Component 2B funded by the World Bank- 18", Floor Financial Agreements No. 4942-VN and No.4941-VN) Hoa Binh QnteunationalSOffc Building for the period from 1 January 2018 to 28 February 2019 Cau Giay District, Hanoi Vietnam T +84 24 3850 1686 F +84 24 3850 1688 U 8 No. 16-11-237-PMU-2 a To: The Thang Long Project Management Unit-Ministry of Transport International Development Association Opinion We have audited the accompanying financial statements of the Da Nang - Quang Ngai Expressway Development Project (Component 2B funded by the World Bank- Financial Agreements No. 4942-VN and No.4941 -VN) ("the Project") prepared on 28 June 2019, including the Balance sheet as at 28 February 2019, the Statement of Sources and Uses of funds, the Statement of Designated account and the Statement of Grant withdrawals for the period from 1 January 2018 to 28 February 2019, and a summary of significant accounting policies and other explanatory notes, and have issued our report thereon dated 28 June 2019. We conducted our audit in accordance with International Standards on Auditing. As part of the audit of Financial Statements per the Terms of reference, we are required to examine and express opinion on the design and operation of 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. In our opinion, in all material respects, the Project's internal controls over compliance with requirements that could have a direct and material financial effect on the financial statements as well as over financial reporting were suitably designed throughout the period from 1 January 2018 to 28 February 2019 and the controls tested, which were those necessary to provide reasonable assurance that the control objectives were achieved, operated effectively throughout the period from 1 January 2018 to 28 February 2019. This report is intended for the information of Thang Long Project Management Unit-Ministry of Transport and the World Bank. Thang Long Project Management Unit-Ministry of Transport's responsibility The Project Management 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 minimise errors and frauds; and take responsibility for its assertions as to the effectiveness of such internal control. Auditors' responsibility Our responsibility is to express an opinion on the Project's Financial Statements and on the design and operation of controls over financial reporting, based on our procedures. We conducted our engagement in accordance with the International Standards on Assurance Engagement 3000, "Assurance Engagements other than Audits or Reviews of Historical Financial Information", issued by the International Auditing and Assurance Standards Board. 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's Financial Statements are fairly presented and the controls are suitably designed and operating effectively. 14 Grant Thornton (Vietnam) Limited grantthornton.com.vn Company code and tax: 0101476557. Registered in Vietnam. An assurance engagement to report on the description, design and operating effectiveness of controls at a project involves performing procedures to obtain evidence about the disclosures in the project's description of its system and design and operating effectiveness of controls. The procedures selected depend on the auditor's judgment, including the assessment of risks that the Project's Financial Statements is not fairly presented, and that controls are not suitably designed or operating effectively. Our procedures included testing the operating effectiveness of those controls that we consider necessary to provide reasonable assurance that the control objectives were achieved. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. GRANT THORNTON (VIETNAM) LIMITED Nguyen Hong Ha Bui Tran Phuong Minh CPA Vietnam Practising Certificate CPA Vietnam Practising Certificate No: 1710-2018-068-1 No: 2595-2018-068-1 Deputy General Director Auditor Hanoi, Vietnam 28 June 2019 15 1 Da Nang - Quang Ngal Expressway Development Project u (Component 2B funded by the World Bank-Financial Agreements No. 4942-VN and No.4941-VN) U U 8 PatI AuiosUeotonteCmlac w 0 GrantThornton a independent Auditors' Report on the Compliance the Da Nang - Quang Ngai Expressway Development Project Grant Thornton (Vietnam) Limited (Component 2B funded by the World Bank- 1811 Floor Financial Agreements No. 4942-VN and No.4941-VN) Hoa Binh ntuenatkonalSOffice Building for the period from 1 January 2018 to 28 February 2019 Cau Giay District, Hanoi Vietnam T +84 24 3850 1686 F +84 24 3850 1688 No. 16-11-237-PMU-3 To: The Thang Long Project Management Unit-Ministry of Transport International Development Association Opinion We have audited the accompanying financial statements of the Da Nang - Quang Ngai Expressway Development Project (Component 2B funded by the World Bank-Financial Agreements No. 4942-VN and No.4941-VN) ("the Project") prepared on 28 June 2019, including the Balance sheet as at 28 February 2019, the Statement of Sources and Uses of funds, the Statement of Designated account and the Statement of grant withdrawals for the period from 1 January 2018 to 28 February 2019, and a summary of significant accounting policies and other explanatory notes, and have issued our report thereon dated 28 June 2019. We conducted our audit in accordance with International Standards on Auditing. As part of the audit of Financial Statements per the Terms of reference, we are required to examine and express opinion on the Project's compliance with Applicable Laws, Regulations and the Procurement Procedures and other Provisions of the Financing Agreements and other Guidance from World Bank. In our opinion, the Project was, in all material respects, in compliance with Applicable Laws, Regulations and the Procurement Procedures and other Provisions of the Financing Agreements No. 4942-VN and No. 4941-VN, and other Guidances from the World Bank that could have a direct and material financial effect on the Project's Financial Statements for the period from 1 January 2018 to 28 February 2019. This report is intended for the information of Thang Long Project Management Unit-Ministry of Transport and the World Bank. Thang Long Project Management Unit-Ministry of Transport's responsibility The PMU is responsible for complying with Applicable Laws, Regulations and the Procurement Procedures and other Provisions of the Financing Agreements and other Guidance from World Bank. Auditors' responsibility Our responsibility is to express an opinion on the Project's compliance with the requirements, based on our procedures. We conducted our engagement in accordance with the International Standards on Assurance Engagement 3000, "Assurance Engagements other than Audits or Reviews of Historical Financial Information", issued by the International Auditing and Assurance Standards Board. That standards 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. Grant Thornton (Vietnam) Limited grantthornton.com.vnl 7 Company code and tax 0101476557. Registered in Vietnam. U An assurance engagement to report on the compliance with regulatory and contractual requirements at a project involves performing procedures to obtain evidence about whether the project's activities are free of material non- compliance with the requirements. The procedures selected depend on the auditor's judgment, including the assessment of risks that the Project does not comply with the requirements and whether such non-compliance could have a direct and material effect on the Project's Financial Statements. Our procedures included testing the compliance with the requirements 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 GRANT THORNTON (VIETNAM) LIMITED Nguyen Hong Ha Bui Tran Phuong Minh CPA Vietnam Practising Certificate CPA Vietnam Practising Certificate No: 1710-2018-068-1 No: 2595-2018-068-1 Deputy General Director Auditor Hanoi, Vietnam 28 June 2019