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Deloitte
LAO CAI CITY PEOPLE'S COMMITTEEMEDIUM CITIES DEVELOPMENT PROJECTPART A: SUPPORT TO LAO CAI CITY
Credit Agreement No.5031-VN
AUDITED FINANCIAL STATEMENTSAND MANAGEMENT LETTER
For the year ended 31 December 2017
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LAO CAI CITY PEOPLE'S COMMITTEEMEDIUM CITIES DEVELOPMENT PROJECTPART A: SUPPORT TO LAO CAI CITYCredit Agreement No. 5031-VN
TABLE OF CONTENTS
CONTENTS PAGE(S)
PARTI FINANCIAL STATEMENTS
Statement of the Project Management Unit 2 - 3
Independent Auditors' Report 4- 5
Balance Sheet 6
Statement of Incomes and Expenditures 7
Statement of Sources and Uses of Funds 8
Statement of Designated Account 9
Statement of Withdrawals 10
Notes to the Financial Statements 11 - 13
PART II REPORT OF INDEPENDENT AUDITORS ON INTERNAL CONTROL 14OVER FINANCIAL REPORTING
a PART III INDEPENDENT ASSURANCE REPORT ON COMPLIANCE 15
I PARTIV MANAGEMENT LETTER 16-22
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■ ＿____一 PART 1.. FINANCIAL STATEMENTS
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LAO CAI CITY PEOPLE'S COMMITTEEMEDIUM CITIES DEVELOPMENT PROJECTPART A: SUPPORT TO LAO CAI CITYCredit Agreement No. 5031-VN
STATEMENT OF THE PROJECT MANAGEMENT UNIT
The Project Management Unit of the Medium Cities Development Project - Part A: Support to Lao CaiCity (the "Project Management Unit") presents this report together with the financial statements of theMedium Cities Development Project - Part A: Support to Lao Cai City (the "Project") for the year ended31 December 2017.
The Proiect Management Unit
The members of the Project Management Unit who managed the Project during the year and to thedate of this report are as follows:
Mr. Phi Cong Hoan Project Director (appointed on 18 May 2018)
Mr. Nguyen Quang Binh Project Director (resignedon 01 May 2018)
Mr. Le Ngoc Minh Deputy Project Director
Ms. Phan Thi Hong Diep Project Accountant
The Proiect Management Unit's Statement of Responsibility
The Project Management Unit is responsible for preparing the financial statements including theBalance Sheet as at 31 December 2017, Statement of Sources and Uses of Funds, StatementIncomes and Expenditures, Statement of Designated Account, Statement of Withdrawals for the ye, r*then ended and Notes to the Financial Statements, which give a true and fair view of the financiaposition as at 31 December 2017 as well as of the receipts, disbursements and expenditures of theProject for the year then ended, in accordance with the accounting convention and the accountingpolicies set out in Note 2 and Note 3 of the Notes to the financial statements and the covenantscontained in Credit Agreement No. 5031-VN. In preparing these financial statements, the ProjectManagement 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 Project will continue in operation; and
Design and maintain 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.
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 thefinancial statements comply with the accounting invention and the accounting policies set out in Note2 and 3 of the Notes to the financial statements. The Project Management Unit is responsible forensuring that the funds have been used as intended for the Project and for complying with CreditAgreement No. 5031-VN 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 takingreasonable steps for the prevention and detection of frauds and other irregularities.
2
LAO CAI CITY PEOPLE'S COMMITTEEMEDIUM CITIES DEVELOPMENT PROJECTPART A: SUPPORT TO LAO CAI CITYCredit Agreement No. 5031-VN
STATEMENT OF THE PROJECT MANAGEMENT UNIT (Continued)
The Project Management Unit confirms that they have complied with the above requirements inpreparing these financial statements.
For and on behalf of the Project Management Unit,
Le Ngoc MinhDeputy Project Director
Lao Cai City, 12 June 2018
3
uCông ty TNHH Deloitte Viät Nam
Täng 15, Tòa nhà Vinaconex,34 Lång Ha, P. Lång Ha,Q. Ð6ng Da, Hå Nôi, Viêt NamÐiên thoai:+84 24 6288 3568Fax :+84 24 6288 5678
56': Oå /VN1A-HN-BC Website: www.deloitte.com/vn
BÁO CÁO KIEM TOÁN DC LÂP
Kinh qtYi: Ban Quàn Iý DLf ån Phåt trién cåc dö thi Ioai vi'a - Ph'n A: Ho trd% cho thånh ph'
Lào Cai
Ý kië'n
Chöng tåi då kiém toån båo cåo tåi chinh cåa Du' ån Phåt trién cåc dô thi loai vfa - Phän A: H trö cho
thånh phö Låo Cai (goi tåt lå "Du' ån"), bao gom Bång Cân d6i Ké toán tal ngåy 31 thång 12 näm
2017, Båo cåo Thu nhåp - Chi phi, Båo cåo Ngun vän vå SC' dung vän, Båo cåo Tåi khoån chi dinh,Båo cåo rút vän cho näm tåi chinh két thúc cùng ngåy vå Thuyét minh båo cåo tåi chinh, bao gbm
bån tóm tåt cåc chinh såch ké toån chå yéu.
Theo ý kién cåa chúng tôi:
b Båo cåo tåi chinh kém theo dä phån ånh trung thu'c vå höp lý tinh hinh tåi chinh cåa Dif ån tai
ngåy 31 thång 12 näm 2017 cüng nhu' thu nhâp vå chi phi, ngun vän nhån dudc vå se tiån
då giåi ngån cåa Du' ån cho näm tåi chinh két thúc cöng ngåy, phù hdp vål cd s6 lâp båo cåo
tåi chinh vå cåc chinh såch ké toån du'c trinh båy trong Thuyét minh så 2 vå Thuyét minh s6
3 phän Thuyét minh båo cåo tåi chinh.
a Båo cåo Tåi khoån chi dinh dä phån ånh trung thu'c vå hdp lý s6 du' Tåi khoån chi dinh tai
ngåy 31 thång 12 näm 2017 cOng nhu' cåc khoån thu, chi cåa Du` ån thång qua Tåi khoån chi
dinh cho näm tåi chinh két thúc cùng ngåy phö hdp vdi cåc diäu khoån ién quan cåa Hiêp
dinh tåi trö s6 5031-VN vå các quy dinh hiên hånh có lên quan cåa Ngån hång Thé gidi.
* Các ddn röt vän du'dc tham chigu båi các Sao ké chi tiêu (SOEs) do Ban quån 19 Du' ån lâp chonäm tåi chinh két thúc ngåy 31 thång 12 nåm 2017 vå cåc SOEs nåy du'dc chåYng minh d'y dö
båi cåc chö'ng tù' ké toån.
Cd så du'a ra † kin
Chöng tôi dä thu'c hién cång viéc kiém toån theo cåc chuan mic kiém toån Qu6c té. Tråch nhiêm cåa
chöng tåi theo cåc chuan mu'c nåy dudc trình båy tai phän "Tråch nhiém cöa Kigm toån vién" trên båo
cåo nåy. Chöng tåi dåm båo tinh dôc låp cöa minh våi Du' ån theo cåc quy dinh vé dao döc nghénghiêp lên quan dn cuåc kiém toån båo cåo tåi chinh, vå chöng tåi då thu'c hién cåc tråch nhiêm
khåc theo cåc quy dinh nåy. Chöng tåi tin tu'ång rång cåc bång chöfng kiém toån må chöng tåi då thu
thâp duöc lå day dö vå thich hdp låm cd så cho ý kién kigm toån cåa chöng tål.
Cd sd läp båo cáo
Chöng tåi xin liu'u ý tåi Thuyét minh så 2 vå Thuyét minh sd 3 phän Thuyét minh båo cåo tåi chinh må
tå cd så låp båo cåo tål chinh vå t6m tåt cåc chinh såch ké toån chö yéu. Båo cåo tåi chinh du'dc låp
phö höp vdi cd så låp båo cåo tåi chinh vå cåc chinh såch ké toån duffc trinh båy trong Thuyét minh
s6 2 vå Thuyét minh s6 3 phän Thuygt minh båo cåo tåi chinh vå cåc yêu cåu cöa Ngån hång Thé gidi.
Tråch nhim cåa Ban quån Iý DLf ån vå Ddn vi giåm såt lén quan dgn båo cåo tåi chinh
Ban quån Iý Du' ån chiu tråch nhiém vé viêc låp båo cåo tåi chinh cåa Du' ån phù hdp våi cd så lâp båo
cåo tål chinh vå cåc chinh såch ké toån duc trinh båy trong ThuyEt minh s6 2 vå Thuyét minh s6 3
phän Thuyét minh båo cåo tåi chinh vå chiu tråch nhiém v'ê kiém soåt nôi bô må Ban quån Iý D' ån
xåc dinh lå can thiét dé dàm båo cho viêc låp båo cåo tåi chinh khång có sai sót trong yéu do gian lân
hoåc nhäm lån.
Trong viêc låp båo cåo tåi chinh nåy, Ban quån li Du' ån chiu tråch nhiém dånh giå khå nång hoatdông lên tuc cöa Du' ån, trInh båy cåc vän d- lên quan dén khå nång hoat dông lên tuc khi can thiét,
vå lâp båo cåo tåi chinh trên cd så hoat dông lén tuc trù' tru'ong hdp Ban quån 1ý Dif ån có ý dinh
dóng Du' ån, chäm dút hoat dông, hoåc bi buåc chäm döút hoat dông.
E Ðdn vi giámn sát chiu trách nhiêm giámn sát quá trInh läp báo cáo tài chinh cåa Du' án.
Tén Deloitte du`dc dùng d9 chi môt hoäc nhiäu thånh vién cöa Deloitte Touche Tohmatsu Ltd. môt cöng ty TNHH có tru så tai Anh,vå mang lrdi các häng thånh vién - moi thånh viên lå môt t6 chú'c dôc låp vä mät pháp 19. Deloitte Touche Tohmatsu Ltd.
(hay "Deloitte Toån cu") khång cung cäp dich vu cho các khách hàng. vul lòng xem tai website www.deloitte.com/about
d9 biét thêm thông tin chi tigt vä cd cäu pháp 19 cåa Deloitte Touche Tohmatsu Ltd. vå các häng thånh vién.
4
U
* DeloitteINDEPENDENT AUDITORS' REPORT (Continued)
In preparing the financial statements, the Project Management Unit is responsible for assessing the
Project's ability to continue as a going concern, disclosing, as applicable, matters relating to going
concern and using the going concern basis of accounting unless the Project Management Unit either
intends to liquidate the Project or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Project's financial reporting
process.
Auditors' Responsibilities for the Audit of 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 auditors' 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 International Standards on Auditing (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 judgement 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 reponsive 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 if 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.
* Conclude on the appropriateness of the Project Management Unit'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 auditors' 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 auditors' 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 the Project Management Unit.
We communicate with those charged with governance and the Project Management Unit regarding,
among other matters, the planned scope and timing of the audit and significant audit findings,
inciuding any significant deficiencies in internal control that we identify during our audit.
khuc Thi Lan Anh Nguyen Luong Tam
UDeputy General Director AuditorAudit Practising Registration Certificate Audit Practising Registration Certificate
No. 0036-2018-001-1 No. 2303-2018-001-1
DELOITTE VIETNAM COMPANY LIMITED
12 June 2018Hanoi, S.R. Vietnam
5
LAO CAI CITY PEOPLE'S COMMITTEEMEDIUM CITIES DEVELOPMENT PROJECTPART A: SUPPORT TO LAO CAI CITY FINANCIAL STATEMENTSCredit Agreement No. 5031-VN For the year ended 31 December 2017
BALANCE SHEET
As at 31 December 2017
Closing balance Opening balance
ASSETS Notes VND VND
Current assets 24,742,719,138 88,191,627,344
Cash 5 23,520,659,138 47,159,843,619
Cash on hand 84,183,000 107,164,000
Cash in bank 23,436,476,138 47,052,679,619
Receivables 1,222,060,000 41,031,783,725
Prepayments to suppliers 6 1,222,060,000 41,005,615,534
Other receivables 26,168,191
Total assets 24,742,719,138 88,191,627,344
RESOURCES
Current liabilities 76,275,595,045 54,060,838,345
Payables to suppliers 7 76,275,174,262 53,916,859,044
Payables to employees - 143,624,000
Other payables 420,783 355,301
Total liabilities 76,275,595,045 54,060,838,345
NET ASSETS (51,532,875,907) 34,130,788,999
Excess of incomes over expenditures (54,043,439,529) 31,382,277,724
Exchange differences 2,510,563,622 2,748,511,275
TOTAL (51,532,875,907) 34,130,788,999
OFF BALANCE SHEET ITEMS Closing balance Opening balance
USD USD
Foreign currencies:
USD 1,033,153.56 2,069,143.55
Le Ngoc Minh Phan Thi Hong DieDeputy Project Director Project Accountant
Lao Cai City, 12 June 2018
The accompanying notes are an integral part of these financial statements
6
LAO CAI CITY PEOPLE'S COMMITTEEMEDIUM CITIES DEVELOPMENT PROJECTPART A: SUPPORT TO LAO CAI CITY FINANCIAL STATEMENTSCredit Agreement No. 5031-VN For the year ended 31 December 2017
STATEMENT OF INCOMES AND EXPENDITURES
For the year ended 31 December 2017
U - AccumulatedNo. Contents Notes Year 2017 toc31/2/201
to 31/12/2017
I. INCOMES
1 IDA Funds 8 134,276,493,562 924,617,253,869
2 Counterpart funds 8,848,919,943 241,719,050,593
3 Other funds 364,130 90,374,678
TOTAL INCOMES 143,125,777,635 1,166,426,679,140
II. EXPENDITURES
1 Urban Basic Infrastructure Upgrading and (482,068,847) 219,252,825,442Service Improvement
2 Urban Water Supply and Environmental 124,296,321,395 289,144,029,661Sanitation
3 Urban Roads and Bridges 65,587,364,087 386,459,284,881
4 Project Management Support and Technical 37,488,117,814 134,739,568,153Assistance
5 Land acquisition, Resettlement and other 1,606,045,191 190,682,681,478consultation expenses
6 Others (Bank charges) 55,715,248 191,729,054
TOTAL EXPENDITURES 228,551,494,888 1,220,470,118,669
III. EXCESS OF INCOMES OVER EXPENDITURES (54,043,439,529)
Le Ngoc Minh Phan Thi Hong DiepDeputy Project Director Project Accou tant
Lao Cai City, 12 June 2018
The accompanying notes are an integral part of these financial statements
7
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LAO CAI CITY PEOPLE'S COMMITTEEMEDIUM CITIES DEVELOPMENT PROJECTPART A: SUPPORT TO LAO CAI CITY FINANCIAL STATEMENTSCredit Agreement No. 5031-VN For the year ended 31 December 2017
STATEMENT OF DESIGNATED ACCOUNT
For the period: From 0110112017 to 3111212017
Account Number: 8800 201 00 5261
Depositary Bank: Vietnam Bank for Agriculture and Rural Development - Lao Cai Province Branch
Address: No. 03A, Hoang Lien Street, Coc Leu District, Lao Cai City, Lao Cai Province
Credit Agreement No.: 5031 -VN
Currency: USD
PART A: ACCOUNT ACTIVITIES Amount.
Opening balance (01/01/2017) 2,069,143.55
Add: 5,915,285.34
Total amount transferred by the World Bank to the Designated Account in the year 5,915,285.34
Deduct: 6,951,275.34
Total amount withdrawn 6,951,267.34
Total bank charges incurred for the year 8.00
Interest transferred to interest account -
Closing balance (31/12/2017) 1,033,153.56
PART B: ACCOUNT RECONCILIATION
1 Opening balance of advances by the World Bank 5,000,000.00
2 Add: Total amount transferred by the World Bank to the Designated Account in the 5,915,285.34
year
3 Deduct: Total amount claimed for advance clearance and approved by the World 9,214,595.97
Bank4 Total advances to the Designated Account as at 31/12/2017 1,700,689.37
5 Closing balance of the Designated Account as at 31/12/2017 1,033,153.56
6 Add: Amount withdrawn but not yet claimed 667,443.81
7 Add: Bank charges 92.00
8 Total advances to the Designated Account as at 31/12/2017 1,700,689.37
Le Ngoc Minh Phan Thi Hong I tiep
Deputy Project Director Project Accountant
Lao Cai, 12 June 2018
The accompanying notes are an integral part of these financial statements
9
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LAO CAI CITY PEOPLE'S COMMITTEEMEDIUM CITIES DEVELOPMENT PROJECTPART A: SUPPORT TO LAO CAI CITY FINANCIAL STATEMENTSCredit Agreement No. 5031-VN For the year ended 31 Decernernber 2017
NOTES TO THE FINANCIAL STATEMENTS(These notes are an integral part of and should be read in conjunction with the accompanyingfinancial statements)
1. GENERAL INFORMATION
The Medium Cities Development Project operates under Credit Agreement No. 5031-VN dated12 January 2012 signed between the Socialist Republic of Vietnam and the InternationalDevelopment Association ("IDA").
The objective of the Medium Cities Development Project is to increase access to improvedurban infrastructure services in Lao Cai City, Phu Ly City and Vinh City in a sustainable andefficient manner.
The Medium Cities Development Project includes 03 Parts: (i) Part A: Support to Lao Cai City;(ii) Part B: Support to Phu Ly City; and (iii) Part C: Support to Vinh City.
The Medium Cities Development Project - Part A: Support to Lao Cai City (the "Project")includes the following components:
0 Urban Basic Infrastructure Upgrading and Service Improvement: Improvement of urbaninfrastructure and service conditions in existing or newly developed urban areas, andresettlement areas including construction and rehabilitation of basic infrastructure systemssuch as water supply and sanitation, drainage, power supply, lighting, roads, schools.
0 Urban Water Supply and Environmental Sanitation: Construction and rehabilitation ofprimary and secondary infrastructure for water supply, drainage, wastewater collection andtreatment, and flood mitigation, including improving drainage and pavement of roads.
0 Urban Roads and Bridges: Construction of roads and bridges.
0 Project Management Support and Technical Assistance: Provision of support for (a) projectmanagement and supervision; (b) Independent social, environment and financial accountmonitoring; (c) urban planning, asset management, safeguards, and internal audit capacitybuilding; (d) equipment and facilities including the acquisition of one car; (e) training andcapacity building; and (f) management and administration.
The total fund of the Project is USD 68.943 million, including:
IDA funds: USD 57.499 million
Counterpart funds: USD 11.444 million
The Project has been implemented since 12 January 2012 (the date of the Credit Agreement)and the Agreement end date is on 30 December 2017. According to Decision No. 609/QD-CTNdated 19 April 2018 of the President, the closing date of the loan No. 5031-VN for the project"Development of medium cities" has been extended to 31 December 2018.
2. ACCOUNTING CONVENTION AND FINANCIAL YEAR
Accounting convention
The accompanying financial statements, expressed in Vietnam Dong (VND), are preparedunder the historical cost convention, except for the Statement of Designated Account and theStatement of Withdrawals which are expressed in original currency. These financialstatements are prepared in accordance with the accounting policies described in Note 3 of theNotes to the financial statements.
Financial year
The Project's financial year begins on 01 January and ends on 31 December.
11
LAO CAI CITY PEOPLE'S COMMITTEE MEDIUM CITIES DEVELOPMENT PROJECTPART A: SUPPORT TO LAO CAI CITYCredit Agreement No. 5031-VN
NOTES TO THE FINANCIAL STATEMENTS (Continued)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies, which have been adopted by the Project Management Unitin the preparation of these financial statements, are as follows:
Foreign currency translation
Transactions arising in foreign currencies are translated into Vietnam Dong (VND) atexchange rates ruling on the transaction date. The balances of monetary items denominatedin foreign currencies at the balance sheet date are retranslated at the exchange rates on thesame date.
Foreign exchange differences are not cash flows. However, the effect of exchange ratechanges is reported separately in the Statement of Sources and Uses of Funds in order toreconcile with balances of assets and liabilities in the balance sheet.
Recognition of funds and expenditures
The IDA funds are recognised at the time cash is actually received in the designated accountor directly paid out to suppliers. The counterpart funds are recognised on cash basis.
Expenditures are recognised when incurred, except for compensation expenditures forhouseholds which are recognised based on actual payment to beneficiaries and under StateTreasury verification.
4. DESIGNATED ACCOUNT
Designated Account is a deposit account in United States Dollar opened at Vietnam Bank forAgriculture and Rural Development - Lao Cai Province Branch for the implementation of theProject activities. Payments out of the Designated Account are for expenditures in accordancewith the relevant covenants of Credit Agreement No. 5031-VN and prevailing relevant
regulations established by the World Bank.
* 5. CASHClosing Balance Opening Balance
VND VND
Cash on hand 84,183,000 107,164,000
Cash in bank, treasury 23,436,476,138 47,052,679,619
Designated Account - USD 23,436,055,355 47,052,324,327Interest on bank deposit 420,783 355,292
23,520,659,138 47,159,843,619
6. PREPAYMENTS TO SUPPLIERSClosing Balance Opening Balance
VND VNDVietnam Water and Environment Investment Corporation - 22,363,561,534
An Phat Investment and Construction JSC - 15,875,100,000
Urban Architecture Development Investment and - 2,701,119,000Construction JSC
Construction and Evironmental Engineering JSC - 65,835,000
Institute of Lao Cai Construction Planning Architecture 377,000,000 -
AREP Vietnam Co., Ltd 599,060,000
Lao Cai Industrial Consultant Company Limited 246,000,000
1,222,060,000 41,005,615,534
12
LAO CAI CITY PEOPLE'S COMMITTEE MEDIUM CITIES DEVELOPMENT PROJECTPART A: SUPPORT TO LAO CAI CITYCredit Agreement No. 5031-VN
NOTES TO THE FINANCIAL STATEMENTS (Continued)
7. PAYABLES TO SUPPLIERS
Closing Balance Opening BalanceVND VND
Nhac Son Co., Ltd. 4,464,530,846 4,464,530,846
Vietnam Water and Environment JSC 23,313,473,785
Ha Giang No. 1 Construction Co., Ltd. - 2,364,723,600
CRD Company 3,700,974,036 3,700,974,036
An Phat Investment and Construction JSC 7,200,576,400
Quynh Lan Co., Ltd. 4,225,958,976 11,041,262,350
Cuong Thinh Thi Construction Development 14,173,396,423 22,443,799,421Group Joint Venture
Vica Consultants Ltd. 6,836,667,965 2,726,185,752
Urban Architecture Development Investment and 4,345,303,000Construction JSC
No. VI Construction Company 1,314,857,568 1,635,467,608
Others 6,699,435,263 5,539,915,431
76,275,174,262 53,916,859,044
8. IDA FUNDSYear 2017 Accumulated to 31/12/2017
USD VND equivalent USD VND equivalent
Designated Account 5.915.285,34 134.276.493.562 42.209.497,36 924.617.253.869
5.915.285,34 134.276.493.562 42.209.497,36 924.617.253.869
9. COMMITMENTS
As at 31 December 2017, the outstanding balance of the contracts signed with suppliers wasabout VND 192.603 billion.
10. COMPARATIVE FIGURES
Comparative figures are figures of the Project's audited financial statements for the yearended 31 December 2016.
Le Ngoc Minh Phan Thi Hong DiepDeputy Project Director Project Accountant
Lao Cai City, 12 June 2018
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* REPORT OF INDEPENDENT AUDITORS ON INTERNAL CONTROL
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Deloitte Vietnam Company Ltd.15thFloor, Vinaconex Tower,SD e lo itte 34 Lang Ha Street, Lang Ha Ward,Dong Da District, Hanoi, VietnamTel :+84 24 6288 3568Fax:+84 24 6288 5678Website: www.deloitte.com/vn
REPORT OF INDEPENDENTAUDITORS ON INTERNAL CONTROL
To: The Project Management Unit of the Medium Cities Development ProjectPart A - Support to Lao Cai City
We have audited, in accordance with International Standards on Auditing, the financial statements ofthe Medium Cities Development Project - Part A: Support to Lao Cai City (the "Project") for the yearended 31 December 2017 and issued the Independent auditors' report thereon dated 12 June 2018expressing an unmodified opinion on those financial statements.
In connection with our audit of the Project's financial statements, we also examined the effectivenessof internal control over compliance with requirements that could have a direct and material financialeffect 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 isresponsible for designing and maintaining effective internal control over compliance with requirementsthat could have a direct and material financial effect on the financial statements as well as overfinancial reporting for the purpose of properly preparing and presenting the financial statements so asto minimise errors and frauds; and takes responsibility for its assertions as to the effectiveness ofsuch internal control. Our responsibility is to express an opinion on the effectiveness of internalcontrol over compliance with requirements that could have a direct and material financial effect onthe financial statements as well as internal control over financial reporting based on our examination.
Our examination was conducted in accordance with International Standard on AssuranceEngagements (ISAE) 3000. The standard requires that we comply with ethical requirements and planand perform our procedures to obtain reasonable assurance about whether, in all material respects,the Project Management Unit has maintained effective internal control over compliance withrequirements that could have a direct and material financial effect on the financial statements as wellas internal control over financial reporting.
Our examination included obtaining an understanding of internal control over compliance withrequirements that could have a direct and material financial effect on the financial statements as wellas of internal control over financial reporting, testing, and evaluating the design and operatingeffectiveness of the internal control, and performing such other procedures as we considerednecessary in the circumstances to obtain sufficient appropriate evidence on which to base our opinion.
Because of inherent limitations of internal control over financial reporting, including the possibility ofcollusion or improper management override of controls, material misstatements due to error or fraudmay occur and not to be detected. Also, projections of any evaluation of the effectiveness of theinternal control over financial reporting to future periods are subject to the risk that controls maybecome inadequate because of changes in conditions, or that the degree of compliance with thepolicies or procedures may deteriorate.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.
In our opinion, the Project Management Unit has maintained, in all material respects, effective internalcontrol ver compliance with requirements that could have a direct and material financial effect onthe Project's fitancial statements as well as over financial reporting for the year ended 31 December
Khuc Thi L Anh Nguyen Luong TamDeputy General Director AuditorAudit Practising Registration Certificate Audit Practising Registration CertificateNo. 0036-2018-001-1 No. 2303-2018-001-1
DELOITTE VIETNAM COMPANY LIMITED
12 June 2018Hanoi, S.R. Vietnam
Deloitte refers to one or more of Deloitte Touche Tohmatsu Ltd., a UK private company limited by guarantee
("DTTL"), its network of member firms, and their related entities. D TL and each of its member firms are legally
separate and independent entities. DTTL (also referred to as "Deloitte Global") does not provide services to clients.Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.
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Delloitte Vietnam Company Ltd.15thFloor, Vinaconex Tower,D e lo itte 34 Lang Ha Street, Lang Ha Ward,Dong Da District, Hanoi, VietnamTel :+84 24 6288 3568Fax:+84 24 6288 5678Website: www.deloitte.com/vn
INDEPENDENT ASSURANCE REPORT ON COMPLIANCE
To: The Project Management Unit of the Medium Cities Development ProjectPart A - Support to Lao Cai City
We have audited, in accordance with International Standards on Auditing, the financial statements of
the Medium Cities Development Project - Part A: Support to Lao Cai City (the "Project") for the year
ended 31 December 2017 and issued the Independent auditors' report thereon dated 12 June 2018
expressing an unmodified opinion on those financial statements.
In connection with the audit of the financial statements, we also performed procedures on the
Project's compliance with Credit Agreement No. 5031-VN, laws and regulations that could have a
direct and material financial effect on the Project's financial statements for the year ended 31December 2017 (the "requirements").
The Project Management Unit is responsible for complying with Credit Agreement No. 5031-VN, laws
and regulations applicable to the Project. Our responsibility is to express an opinion on the Project's
compliance with the requirements based on 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 on Assurance Engagements (ISAE)
3000. 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 engagement to report on the compliance with the 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 the internal control
relevant to the 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
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 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.
In our opinion, the Project Management Unit has complied, in all material respects, with Credit
Agreement No. 5031-VN, laws and regulations that could have a direct and material financial effect on
the Project's financial statements for the year ended 31 December 2017.
Khuc Thi Lan Anh Nguyen Luong Tam
Deputy General Director Auditor
Audit Practising Registration Certificate Audit Practising Registration Certificate
No. 0036-2018-001-1 No. 2303-2018-001-1
DELOITTE VIETNAM COMPANY LIMITED
12 lune 2018
Hanoi, S.R. Vietnam
Deloitte refers to one or more of Deloitte Touche Tohmatsu Ltd., a UK private company limited by guarantee("DTTL"), its network of member firms, and their related entities. DTTL and each of its member firms are legallyseparate and independent entities. DTTL (also referred to as "DeloitJESGlobal") does not provide services to clients.Please see www.deloitte.com/a bout for a more detailed description of DTTL and its member firms.
