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Da Nang - Quang Ngai Expressway Devel)lopment Project

* (Component 2B funded by World Bank - Financing

Agreements No. 4942-VN and No. 4941-VN)

For the year ended 31 December 2016

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Auditors' memorandumon the audit of the special purpose financial statement ofThe Da Nang- Quang Ngai Expressway Development Project(Component 2B funded by the World Bank-Financial Agreements No. 4942-VN and No.4941-VN)for the year ended 31 December 2016

Grant Thornton (Vietnam) Limited

18th Fbor. Hoa Binh lnterrational Olice ]uldg

10k Hrang 000cr Viet Street,Cau Giuy Distrd, HanoiV:eutnlam

T +84 f24) 3850 1686F 44 (24) 3850 1688

To: Vietnam Expressway CorporationThe Project Management Unit 1

The International Development Associate

rhis memoraidut is provided in connection with the Contract No.03/I ID'IV- VEC/2017between Vietnam Ixpressway Corporation and Grant Thornton (Vietnai) Limited for theaudit of the special purpose financial statements of the Da Nang- Quang Ngal I "x)rsswayDeveloptment Pro:ect- Component 2B implemented by the Project Management Unit("1PMU" anld fumnded by World Bank- Financial Agreements No, 4942- VN and No. 4941 -VNfor the year ended 31 December 2016 ("the Project")-

Audit of the special purpose financial statementsDuring the year eided 31 December 2016, no activities under Component 21B of the Projectimplemented by PMIL1 were carried out. In particular in 2016 there were nao receipts ordisbursetment from any sources of fund in relation to this Component and there w,as no"ransaction through 1 he designated accouint. hle Project also had no balance of' cash and bankand other assetis, as at 31 December 2016.

We, therefore, do not provide ain audit opion O 10 I hespecial pirpose tiranrcial statemenis,which efluctively carry all nil balances.

Review of the design and operating effectiveness of the internal controlsystemDuring the year ended 31 December 2016, the Project has not have additional internal control

procedures as well as any activities to apply those procedures, therefore, we coold not

performed alay proceduires to confirm the design of the internal conitrol system as well as the

operating effectiveliess of such system. We have therefore expressed no Opition on this matter

for the year ended 31 December 2016.

Review of the compliance with laws, regulations and funding agreementsThe compliance requiremienits can only be addresses when the Project implemented its activities.

During the year ended 31 December 2016, no activities under Component 211 of the Project

were implemented, therefore no compliance requirements were applicable. We therefore do not

express our opinion on this matter for the year ended 31 December 201 6.

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Grant Thornton (Vietnam) LimitedA member of Grant Thorrton International Ltd ('GTIL1 GTIL and the member firms are not a worldwide partnership. Serices are deliveredindependently by the mrnmber firms.

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\\t wouklikc to iake this oppor11uty ttthak t P¡t< <C ?'ianagen1m L'nit I and 1lheir stffI tfor t cooperatIon we re ceivedi duing the course> ot ur audliL shoi you ha,Le anylquelti

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GRANT THORNTON (VI EITNAM) LIMITIA)

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Ngtu I long HLXpurv GtntfAl I )nt-cn r

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I5 Juni 2<017

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Auditors' reporton the internal controlof the Da Nang- Quang Ngai Expressway Development Project(Component 2B funded by the World Bank-Financial Agreements No. 4942-VN and No.4941-VN) GrintThumton(Vienam)Limitedfor the year ended 31 December 2016 18th Ploor Hoa tinh ntvnai;ona Office Building

106 Hoang Qucc Vie! S1reet,Cau Giay Distic, Hanoi'Ais111am

T 84 (24) 3850 1686F +64 (24) 3850 1655wA&w.gicorvn

No. 03/1 I1YI'V- VEC

To: The Project Management Unit 1The International Development Associate

As part of our aninal adit for the special purpose financial statements for the Da Nang- QuangNgai Expressway Development Project (Component 2B fuinded by World Bank- i1nancing\greemeni No.1942- VN and No,4941- VN) ("the Project") we are requested to give our

opinion on Ite design and operation of the internal control ovet compliance that could have adirect and material effect on the special purpose finanacial stal emeints as well as internal controlover iilicicial repoirtinog.

Project Management Unit 1's responsibility for design and operatingeffectiveness of the internal systemPMUI is responsible for establishing and nitntaining effective internal contrl systems in orderto ensure complian ce as well as financial reporting to fairly prsc'ent tle special purpose financialstatements iti accordance with the World Bank's financial reporting recquirements. T'Ihisresponsibility includes designing, implenieniig and maintainiig internai contrl relevant io lhe

preparation and fair presentation of special purpose nantcial staterneits.

Auditors' responsibilitiesOur responsibiility is to express an opinion on the design operating effect iveness of internalcontrol over compliance that could have a direct anld material effect on Ole special purposefinancial statenents as well as internal control over financial reporting based on our auditf.

Basis of opinionWe conducted out audit in accordance with laternational Standards on1 Auditing. Thosestandards require that we comply with ethical requirements and plan and perform our

procedures to obtain reasonable assurance about Whether, in all iaterial respects, Ie Project'sinternal control systems related to compliance with requiremietIMIs thalt could have a direct andmaterial effect on4 the special purlipose financial statements as well as itteral coniitrols oaverfinancial reporting are suitably designed and effectively operFtiog

The auditor's work in this area is in addition to lie consideration of internal control over

compliance and financial reporting that is part of the special puposc1 oiuacital statements audit.

Grant Thornton (Vietnam) LimitedA member of Grant Thornton nternational Ltd ( GTIL'f. GTIL and the member tirrms are not a worldwide partnership. Serv;ces are deliveredncependently by the member firms.

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1In 2D16, tihcre were no additional urnal control as well as an activities carrled out by PMU1timpleinented and no signiicant issues were identmined, therefore, our audit included receiving ofthe design and operation of the internal cont roi systens could not been implemented. We couldnot obtain sufl Icient. and appropriate evidence to provide a basis for our opinion.

OpinionWe do not render an opinton on the design and operating efteciveness of lie inlerna] coni rolsystel due l the fact that no fiiacial transatins were carried out durlig tlie period.

This report is intended for tbc use and information of no parties other than PM11 and tlie

World Bank.

GRANT THORNTON (VIETNAM) LIMITED

Nguycn Ilong IfaDeputy ( eneral Director

Hlanoi, Viem1am15 June 2017

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Auditors' reporton the compliaticeof the Da Nang- QLuang Ngai Expressway Development Project(Cornponent 2B funded by the World Bank-Financial Agrecnents No. 4942-VN and No.4941-VN)for the year ended 31 Decenber 2016 Grant Thomtiri (Vietnam)Limited

1dh Fleeoo Hoa tinh Internatioinal Omice Bildirgi C6 Hoing Quac Viet Street,C u Giy District, Hanoi

Vietnarn

T 84 {4)

No. 03/ 1l V V C

ITo: The Project Management Unit 1

The International Development Associate

As part -iur annual audit for the speeil purposc fimancial statemen it for ite Da Nang- Quang

Ngat Lxpressway Deve]opment Project (Component 213 funded by \orld Bank- IFinancing

Agreenent NoA1942- VN aod No.4941- VN) ("the Pt ojec1") w are rcquicsted to provide an

opinion oi weicLhci tlle IPrujet comifplied with laws, regulations and porsion of contracts or

funding agreements that have a dircet and material effect on tlhe Projel's special purpose

lnancial statements

Project Management Unit I's responsibility for the compliance with laws,

regulations and funding agreementsPM1 i rtonie for ensuring coipliance with relevant Lavs, regulation adIl funding

areement s. T,hat responsibility enompassed the identificalltio apIicable laws, regulations

and fundilig agreements aid the establishteniit of internal conirol designedI toireasonable assuran.e that te Piroject complics with tise laws, regulti and funding

agreemtentrs.

Auditors' responsibilitiesOur responsibiity is to express an opinion o tih Project's c>mpliancc with laws, regu1ions

and fundingagreerieni based on our procedures.

Basis of opinionWe conducted ur autditi acc>rdatnce With InternatIonal Standardsu on Auditing. Those

standards require that we comply wirh etical requirements and plan and perfor ut

proeedures to obtin reasonable assurnce about whether, in all material respects, the Project

hau coniplied with as, egulatitos oand ftuding agretments.

An assutrantce engagemient to report on ihe compliance with regulatir aid contraetual

requirements ar the Project involves pelrfring procedures to obtain evidence about whether

the Project's activi[tes are free of materal nn- comrpliance with laws, regulauons and fundingagreenienis. The suelected proedue depend on the i auditor's judgmeni including the assessment

Grait Thornton (Vietnam) LimitedA member of Grant Thornton Irternational ltd GTILt. GTIL and the rnernber firms are not awor:dwidte partnership Services are deliveredinependently by the member firrns.

*0 GrantThornton

of risks that the Project doses nout Coply wit t ie laws, regulations and fundin agreemenitsand whether such non compliancce coild have a direct and material effeet on the Projec[ s

special purpose financial statements.

In 2016, 1 here was no financial transactions carried out by IM' I1 implem nented, therefore, 11o

compliaice rejuirements required and no signiflicant issle were identified, therefore, we did nothave sufficient and appropriate evidence on compliance with the apphcable laws, regulationsand the procurement procedures and other provision of finding agreement- 1 '1iancial

A\greement No4912- VN and No.4941-VN to provide a basis for our opinion.

OpinionWe do , not render an opinion on compliance with the apphiable ilaws, regulations and the

procurem nct pcaedlres and other proviston of funding agreentm- Vinancial AgreemaentsNo.4942 VN and No.4941- VN that could have a dirtct and material effeec on the Projeetsspecial purpose financial statement for the vear ended 31 December 2016.

This repo,rt is intended for the tuse and information of nto parties other than PL IU 1 and theWord Bank

GRANT THORNTON (VIETNAM) LIMITED

Ngiien I HongIlaDTieputy General Director

1Hanol, Vietamn

15 Juie 2017

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