r 99582 l ENVIRONMENTAL GOVERNANCE, INCLUSION AND TRANSPARENCY IN MINING SECTOR PROJECT l IDF GRANT No. TF013658 IMPLEMENTED BY ENVIRONMENTAL PROJECT IMPLEMENTATION UNIT STATE AGENCY UNDER THE MINISTRY OF NATURE PROTECTION OF THE REPUBLIC OF ARMENIA Special Purpose Project Financial Statements and Independent Auditor's Report For the years ended 31 December 2013 and 31 December 2014 lJ [ l YEREVAN June 2015 [ [ [ ENVIRONMENTAL GOVERNANCE, INCLUSION AND TRANSPARENCY IN MINING r SECTOR PROJECT IDF GRANT No. TF013658 TABLE OF CONTENTS Page INDEPENDENT AUDITOR'S REPORT 3-4 SPECIAL PURPOSE FINANCIAL STATEMENTS For the years ended 31 December 2013 and 31 December 2014: Statement of cash receipts and payments 5 Statement of uses of funds by Project activity 6 Notes to the special purpose financial statements 7-11 ANNEX 1. RECONCILIATION BETWEEN THE AMOUNTS SUBMITTED BY THE EPIU SA AND DISBURSED BY THE WORLD BANK 12 l 2 [ r [ "UOU-Ufil'l}.:PS" UtllC "SOS-AUDIT" LTD [ INDEPENDENT AUDITOR'S REPORT N 65 On the special purpose financial statements of the Environmental Governance, Inclusion and Transparency in Mining Sector Project for the years ended 31 December 20/3 and 3/ December 2014 To the Management of the Environmental Project Implementation Unit State Agency under the Ministry of Nature Protection ofthe Republic of Armenia (hereafter: the EPIU SA) We have audited the accompanying special purpose financial statements ofthe Environmental Governance, Inclusion and Transparency in Mining Sector Project (hereafter: the Project) financed by IDF Grant No. TFOJ3658, and implemented by the EPIU SA, which comprise the statement of cash receipts and payments, and the statement of uses of funds by Project activity for the years ended 3 1 December 20 13 and 31 December 20 14, and a summary of significant accounting policies and other explanatory notes. Management's Responsibility for the Special Purpose Financial Statements The management of EPIU SA is responsible for the preparation and fair presentation of these special purpose financial statements in accordance with International Public Sector Accounting Standard: Financial Reporting Under the Cash Basis of Accounting, (IPSAS- Cash Basis) issued by the International Public Sector Accounting Standards Board (IPSASB) within the International Federation of Accountants (IF A C), and Financial Management Manual for World Bank Financed Investment Operations (WB Guidelines), and for such internal control as management determines is necessary to enable the preparation of special purpose financial statements that are free from material misstatements, whether due to fraud or error. [ Auditor's Responsibility Our responsibility is to express an opinion on these special purpose financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing (ISAs) as issued by International Auditing and Assurance Standards Board (IAASB) within the IF AC. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the special purpose financial statements are free from material misstatement. An audit involves performing procedures to obtain reasonable audit evidence about the amounts and disclosures in the special purpose financial statements. The procedures selected depend on the auditor's judgment including the assessment of the risk of material misstatement of the special purpose financial statements, whether due to fraud or error. In making those assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the special purpose financial statement 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 entity's internal control. c 12rmm 1nn4.w~ Pflqubu Uuwuun Uungflwg4_w6 uo 11wu ~~; Q. bfll.wO 0037, U.S~qflWOjwO 38/55; ~b12.' (+3741 0) 20 11 51 ; !bwQU) (+37410) 20 11 50; www.sosaudit.am; tL-4muu1" info@sosaudit.am L An Associate of the Crowe Horwath Business Alliance 38/55 A.Tigranyan, 0037 Yerevan , RA; Tel.: (+3741 0) 20 11 51; Fax: (+3741 0) 20 11 50; www.sosaudit.am; E-mail: info@sosaudit.am f r "UOU-Ufi~L}.P.S" Uti}(! [ "80S-AUDIT" LTD An audit also includes the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation ofthe special purpose financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Opinion In our opinion, 1. the special purpose financial statements present fairly in all material respects the cash receipts and payments of the Project for the years ended 31 December 2013 and 31 December 20 14 in accordance with IPSAS-Cash Basis and World Bank related guidelines; 2. funds have been used in accordance with the conditions of the Letter agreement No. TF013658 dated 29 May 2013 between the International Bank for Reconstruction and Development (IBRD) and the Republic of Armenia, and World Bank related guidelines, with due attention to economy and efficiency, and only for the purposes for which the financing was provided; 3. supporting documents, records and accounts have been maintained to support claims for reimbursement of expenditures incurred. Expenditures included in the withdrawal applications and reimbursed against are eligible for financing under the IDF Grant No. TF013658 dated 29 May 2013; 4. The Designated account used has been maintained in accordance with the provision of the IDF Grant No. TF013658 dated 29 May 2013, and World Bank related guidelines. [ "SOS-Audit" LLC 24 June 2015 [ l2rmm 1nrntwp PtJqGbu Uuwuur UungtJwgLj_wo UGrJ.wli [ =!=!; f!. l::ifluwO 0037, U.StJqflWOJwO 38/55; "ltm." (+3741 0) 20 11 51; !bwf!u4 (+37410) 20 11 50; www.sosaudit.am; tL-Ltmulll· info@sosaudit.am An Associate of the Crowe Horwath Business Alliance [ 38/55A.Tigranyan, 0037 Yerevan, RA; Tel.: (+37410) 2011 51; Fax: (+37410) 20 11 50; www.sosaudit.am; E-mail: info@sosaudit.am r ~ .------. ,.....---.: ~ ~ ~ ~ __, Environmental Governance, Inclusion and Transparency in Mining Sector Project IDF Grant No. TF013658 Statement of cash receipts and payments For the years ended 31 December 2013 and 31 December 2014 (Amounts are shown in US dollars) Actual Planned Variance PAD Year ended Year ended Cumulative as at ICumulative as at 311 Cumulative as at 31 31 Dec 2013 I 31 Dec 2014 31 Dec 2014 Dec 2014 Dec 2014 !OPENING CASH BALANCE Designated Account (IDF Grant) -. 72,906.36 Project Account (GOA) -' 5,505.51 rroTAL OPENING CASH -' 7~411.93 ~ources of Funds - IDF Grant No. TF013658 8.1 1 75,000.00 49,451.03 124,451.03 385,000.00 Government of RoA 8.21 6,959.01 31,472.25 38,431.26 154,000.00 t!'OT AL FUNDS 81,959.01 80,923.28 162,882.29 539,000.00 Fore_igl)_~rren~l' loss (5.12) (3,265.07) (3,270.19) Uses of funds 7 I. Goods, consultant's services including audit, raini11g_ and workshop 3,541.96 64,174.67 67,716.63 68,541.96 (825.33) 539,000.00 rroTAL PROJECT EXPENDITURES 3,541.96 64,174.67 67,716.63 68,541.96 (825.33) 539,000.00 icLOSING CASH BALANCE 6 IQ_esignated Account (IDF Grant) 72,906.36 74,097.33 74,097.33 !Project Account (GOA) 5,505.51 17,798.14 17,798.14 rroTAL CLOSING CASH 78,411.93 91,895.47 91,895.47 L_V ~ ~4a