SYRDARYA WATER SUPPLY PROJECT (IDA LOAN N 4869-UZ) THE "KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP INDEPENDENT AUDITOR'S REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2018. SYRDARYA WATER SUPPLY PROJECT (IDA loan 4869-UZ) "KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP TABLE OF CONTENT STATEMENT OF MANAGEMENT'S RESPONSIBILITIES FOR THE PREPARATION AND APPROVAL OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31,2018 INDEPENDENT AUDITOR'S REPORT STATEMENT OF CASH RECEIPTS AND PAYMENTS 2 STATEMENT USES OF FUND BY COMPONENT EXPENDITURE TYPE 3 1. PROJECT DESCRIPTION 4 2. SIGNIFICANT ACCOUNTING POLICIES 7 A. CORRECTIONS OF ERRORS OF THTE FUNDS OF TDA 13 B. CORRECTIONS OF ERRORS OF THE FUNDS OF THE UZBEKISTAN 13 3. RECONCILIATION OF IDA FINANCING 13 4. THE WORLD BANICS DIRECT PAYMENTS 14 5. THE WORLD BANK'S SPECIAL COMMITMENT PAYMENTS 15 6. DIRECT PAYMENTS BY FUNDS OF CO-FINANCING OF UZBEKISTAN 15 7. REIMBURSEMENT AND ADVANCE 16 8. ERROR RECEIPTS AND PAYMENTS 17 9. CASH OUTFLOWS BY COMPONENTS AND CATEGORIES 17 10. OTHER RECEIPTS 18 11. FOREIGN EXCHANGE DIFFERENCE 19 12. DESIGNATED ACCOUNTS 19 13. DESIGNATED ACCOUNT IN USD - PCG 20 14. DESIGNATED ACCOUNT IN UZS - PCG 22 STATEMENT OF MANAGEMENT'S RESPONSIBILITIES FOR THE PREPARATION AND APPROVAL OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 Management of "Kommunkhizmat" Agency's World Bank Projects coordination group (hereinafter - the "PCG") is responsible for the preparation of the financial statements, that fairly present, in all material respects, Financial reporting under the cash basis of accounting for the year ended 31 December, 2018, prepared in accordance with International Public Sector Accounting Standard under the cash basis of accounting (hereinafter - the "IPSAS") and notes to the financial reporting, including a summary of significant accounting policies. In preparing the financial statements, management is responsible for: * selecting of proper accounting principles and its consistent application; * presenting information, including accounting policies, in a mannur that provides rclcvancc, reliability comparability and understandability of such information; * using of reasonable and appropriate estimates and assumptions; * providing additional disclosures when compliance with the requirements of IPSAS is insufficient for users of the financial statements to understand the impact of particular transactions; and * assessment of the PCG's ability to continue as a going concern in the foreseeable future. Management is also responsible for: * overall coordination of the projects, monitoring, evaluation, reporting, supporting for procurement, and financial management; * use of funds in accordance with financing agreement and Operational Manual; * designing, implementing and maintaining the effective and reliable functionality of the internal control system; * maintaining adequate accounting system, allowing the preparation of information about the PCG's cash flows and non-cash activities at any time with reasonable accuracy, and to ensure compliance of financial statements with IPSAS; * maintaining accounting records in accordance with the legislation of the Republic of Uzbekistan; * adopting measures within its competence to safeguard assets of the PCG; and * detecting and preventing fraud and other irregularities. The Financial reporting under the cash basis of accounting for the year ended 31 December, 2018 were approved by management of the PCG on June 28, 2019. PCG coordinator Accountant of PCG G. Kh4mova G. Tashkent, the Republic of Uzbekistan 1 GrantThornton An instinct for growth AO 000 (Grant Thornton)) Pecny6nIKa Y36eKWCTaH, 100128, TauKeHT, yn. A6a. 1A Ten.: +998 (71) 230-45-43 OaKc: +998 (71) 244-47-43 "Grant Thornton" AO LLC 1A, Abay Str., Tashkent, 100128, Republic of Uzbekistan Tel.: +998 (71) 230-45-43 Fax: +998 (71) 244-47-43 1A! w"PAgranltthlerntc'Iui] INDEPENDENT AUDITOR'S REPORT To the Owner and Management of "Komrnmunkhizmat" Agency's World Bank Projects coordination group Report on the Audit of the Financial Statements Opinion We have audited the financial statements of the "Kommunkhizmat" Agency's World Bank Project coordination group (hercinafter - the "PCG") "Syrdarya Water Supply Project" (hereinafter - the "Project") which comprise the Statement of cash receipts and payments, the Statement uses of funds by component expenditure type for the year ended December 31, 2018, and notes to the financial statements including summary of significant accounting policies. In our opinion, the accompanying financial statements present fairly, in all material respects, the Statement of Cash Receipts and Payments, and the Statement Uses of Funds by Component Expenditure type for the year ended December 31, 2018 in accordance with International Public Sector Accounting Standard, "Financial reporting under the cash basis of accounting" (hereinafter - the "IPSAS"). Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (hereafter - the "ISAs"). Our responsibilities under those standards are further described in the-Iudi/or' Reponsibities Jorthe Audit of+nauia/ Slatements section of our report. We are independent of the PCG in accordance with the ethical requirements that are relevant to our audit of the financial statements in die Republic of Uzbekistan, 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. Member of Grant Thornton International E GrantThornton An instinct for growth Emphasis of Matter We draw attention to that the financial statements are prepared in accordance with IPSAS "Financial reporting under cash basis of accounting". The financial statement is prepared to provide information to Management of PCG. As a result, the statement may not be suitable for another purpose. Our opinion is not moditied in respect of this matter. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with IPSASs and foi such internal conifol as iiiatageineit dleteniLies is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the PCGs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the PCG or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the PCG's financial reporting process. Auditor's Responsibilities for the Audit of Financial Statements Our objective is to obtain reasonable assurance about whether the financial statements asa 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 it is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exist. Material 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 skepticism throughout the audit. We also: * Identify and assess the risks of material misstatement of 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 omission, misrepresentations, or 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, but not for the purpose of expressing an opinion on the effectiveness of the PCG's internal control. * Evaluate the appropriateness of accounting policies used and reasonableness of accounting estimates and the related disclosures made by management. GrantThornton An instinct for growth Auditor's Responsibilities for the Audit of Financial Statements (Continued) * Conclude on the appropriateness of managements 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 PCG's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's 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 auditor's report. However, future events or conditions may cause the PCG to ccasc to continue as a going concern. We communicate with those charged with governance regarding, 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 audit. Partner: N F. Karimov Senior manager: N. N. Yulchiev Auditor: A. KH. Abdullahodjaev June 28, 2019 Tashkent, the Republic of Uzbekistan SYRDARYA WATER SUPPLY PROJECT (IDA LOAN 4869-UZ) "KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP STATEMENT OF CASH RECEIPTS AND PAYMENTS For year ended December 31, 2018 i .n US dollars Notes 2018 Cumulative 207 Cmltv (revised) (revised) OPENING CASH BALANCES Designated account in USD- PCG 12 4089 - 2736072 - Designated account in UZS - PCG 12 1 - 21 - Designated account in UZS - SVK 12 391 565 - 777 544 - Total opening cash balance 12 395655 - 3513637 - RECEIPTS Direct Payments: the funds of IDA 4 11 039469 47064609 9234743 36025140 the funds of Co-financing 6 1 136167 2315921 883 546 1 179754 Reimbursement and Advance: the funds of IDA 7 2881 236 15554249 281 670 12673013 the funds of Co-financing 7 4399 361 9091 819 2493594 4 692 458 Special Commitment - funds of IDA 5 - 325 480 - 325 480 Error receipts from other projects of PCG 8 200 70392 24992 70192 the source of IDA Other receipts 10 - 958 - 958 Total receipts 19456433 74423428 12918545 54966995 Total cash available 19852088 74423428 16432182 54966995 PAYMENTS Part A. Improvement of Water Supply 9 (16 506 633) (69 372 563) (15 296 577) (52 865 930) Infrastructure Part B. Institutional Strengthening and (34423) (199511) (83484) (165088) Capacity Building Part C. Feasibility Studies for Future - (54672) - (54672) Investments Part D. Project Management 9 (80 242) (796 909) (97 205) (716 667) Bank charges 9 (1 198) (98 310) (75 312) (97 112) Refund of error receipts from other 8 (24992) (70192) (200) (45200) projects of PCG - funds of IDA Total payments (16 647 488) (70 592 157) (15 552 778) (53 944 669) Effect of changes in foreign exchange 11 (146 231) (772 902) (483 749) (626 671) rates on cash, net CLOSING CASH BALANCES Designated account in USD - PCG 12 2 435 800 2 435 800 4 089 4 089 Designated account in UZS - PCG 12 - - 1 1 Designated account in UZS - SKV 12 622 569 622 569 391 565 391 565 Total closing cash balance 12 3 058 369 3 058 369 395 655 395 655 PCG coordinator Accountant of PCG SH. Gulo ov G. Khakimova June 28, 2019/ Tashkent, the Republ of Uzbekistan Notes to the financial statements on pages 4 to 23 are integral part of these statement 2 SYRDARYA WATER SiJFF LY PROJECT 0DA LOAN 4869-UZ) "KOMMUNKHIZMA" AGENCY'S WORLD BAWK PROJECTS COORDINATION GROUP STATEMENT L: ES OF FUND BY COMPONENT EXPENDITURE TYPE For year ended rece'mer 31, 2018 In U dolarsActual Final budget Variance 2018 Cumulative 2018 Cumulative 2018 Cumulative COMPONENTS Part A. Improvemem ci3 Wter Supply lnfras:ruc-ure (16 506 633) (69 372 56:) (9 820 000) (63 070 000) 6 686 633 6 302 563 Part B. Institutional Strargthe-ing and Capacity Building (34 423) 19951 ) (64 000) (250 000) (29 577) (50 489) Part C. Feasibility liciesfr Fulre Inves--ent3 - (54 672) - (55000) - (328) Part D. Prcject Maragemert (80 242) 796 90) (120 000) (1 270 000) (39758) (473091) Bank charges (1 198) (98 31C) - - 1 198 98310 Refund of error rece pts rom other projects Df P-G (IDA) (24992) (70 '92) - - 24992 70192 Total (16 647488) (70 592 157) (10 004 000) (64 645 000) 6643488 5947157 PCG coordinator Accountant of PCG SH. Gulomov G. Khakimova C June 28, 2019 Tashkent, the RepL D1 c Uzbe'-tan Notes to the financial statements ,i pages -to 23 are integral part of these statement 3 SYRDARYA WATER SUPPLY PROJECT (IDA LOAN 4869-UZ) "KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 1. PROJECT DESCRIPTION Introduction The Republic of Uzbekistan (hereinafter - the "Uzbekistan") has received the approval of the International Development Association (hereinafter - the "IDA") for a credit to improve the coverage, quality and efficiency of public water supply services in Syrdarva Region of Republic of Uzbekistan (hereinafter - the "Syrdarya region") through the implementation of the Syrdarva Water Supply Project (hereinafter - the "Project"). The project include rehabilitation, replacement, and limited expansion of water supply infrastructure and the institutional capacity building of the Syrdarva region. The total cost of the project is USD 138.6 million. In accordance with financing agreement signed between IDA and Uzbekistan No. 4869-UZ on 16 September 2011 the Project financed by IDA loan in amount of 57,2 million SDR (fifty seven million two hundred thousand Special Drawing Rights) (equivalent to 88,0 million US dollars) and remaining amount of funds financed by the fund of the Uzbekistan in cash and kind forms of contributions. Part of the loan in amount of 5,0 million SDR was cancelled by the IDA. In this regard, the amount of Loan available for financing reduced LP to the equivalent of USD 72.5 million due to exchange rate fluCtuatIons. Tfhe Miniatry ot inanec of the Repulic of Lxbki;taw I rCponAiblc for IpIying the 1U,' lkoa on bell the Uzbekistan in accordance with the financing agreement. The interest rare on loans of IDA consists interest rate of 0.75% per annum of the principal amoUnt and interest rate 0.5% per annum should be paid on the unused loan amounts. The principal amount of the loan must be repaid every six months for 35 years, including a grace period of 10 years starting in 2021. I However, there is an agreement subsidiary lending between the Minstry of hnanec of the Republic of Uzbekistan, the Syrdarva Unitary Enterprise "Suvoqova" (hereinafter - SVI) and Khokimiyat of Syrdarya Rugbio (utLui i ) on ULping LI ubligai L beifiLd ini the fitnlitiw geemeit. The Project consists of the following parts (components): Part A. Improvement of Water Supply Infrastructure Relabiliaion ;uid limited e pamsion of water supply s 1)rui f in tivi disrict In rh SIrdarVa t'i.10on namely ALa LI11, Dagiti t, M zoabad, -adoba and Khava-t, 1iCludiII: (1) civil w,korks; nd (2) priion ot: * related design and supervision services; * operations and maintenance equipment; * spare parts; * information systems; * a pilot for supervisory control and data acquisition system (SCADA); and * water quality laboratories, through the carrying out of works and the provision of goods and consultants' services. 4 SYRDARYA WATER SUPPLY PROJECT (IDA LOAN 4869-UZ) "KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2018 1. PROJECT DESCRIPTION (CONTINUED) Introduction (continued) Part B. Institutional Strengthening and capacity building Institutional strengthening and capacity building of the Project Implementing Entity through: * the improvement of utility management and operational practices; * the preparation of an assessment of the institutional capacity of the Project Implementing Entity and a study for private sector participation; * the provision of local and international rraining on management and operations; * the provision of utility management equipment and software; * the development of communications strategies and public awareness campaigns; and * the preparation of customer satisfaction surveys, all through the provision of goods, consultants' services and Training. Part C. Feasibility Studies for Future Investments Financing of feasibility studies for future priority investments in the sewerage sector in the Syrdarya Region, through the provision of consultants' services. Part D. Project Management Strengthening the PLs Vroject management, monitoring and coordination capacity as well as its branches in the Syrdarya region, through the provision of goods, consultants' services, including Project audit, and Training, and financing of Operating Costs. The following table specifics the categorics of Eligible Expenditures that are financed by IDA and by the fund of Uzbohictan: Percentage of expenditures CoStsRAmount of the nCredit Allocated by the of the Republic of source of IDA UEbokistan' wul kb 16 360 066 70,64%291% Goods under: (a) Parts A2 (b) through (f) of thie Project 30 980 000 70,84% 29,16% (b) Other parts of the Project 150 000 83,33% 16,67% Consultants' services, Training and Operating5700833%1,% Costs of the Project Unallocated 4 000 000 57 200 000 5 SYRDARYA WATER SUPPLY PROJECT (IDA LOAN 4869-UZ) "KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2018 1. PROJECT DESCRIPTION (CONTINUED) Introduction (continued) However, in accordance with The World Bank's letter #05390/18 from October 30, 2018 the percentage of Expenditures to be financed by IDA changed in the following order: In Special Drawing Rights (SDR) Am ou nt of the Percentage of Expenditures Credit Allocated to be Financed 70,84% up to September 9, 2018 Works 45 101 774 and 100% from September 10, 2018 onwards r,nnrfs linrier 70,84% up to September 9, 2018 (a) Parts A2 (b) through (f) of the Project 1 200 000 and 100% from September 10, 2018 onwards 83,33% up to September 9, 2018 (b) Other parts of the Project 150 000 and 100% from September 10, 2018 onwards Consultants' services, Training and Operating Costs of 83,33% up to September 9, 2018 the Project 5710000 and 100% from September 10, 2018 onwards Amount cancelled as of December 11, 2015 5038226 57 200 000 Also, according to Protocol No. 229 of the meeting of the Interdepartmental Council on cooperation with international financial institutions, organizations and donor countries, de implementation of large investment projects under the Cabinet of Ministers of the Republic of Uzbekistan dated 10 June 2017, completion date of the Project was extended up to 30 June 2019. Project management According to Presidental Decree Project Coordination Group (hereafter - the "PCG") is established in Tashkent city under the executive board of the "Kommunkhizmat" Agency (hereinafter - the "Agency"). PCG is accountable to the authorized person - the General Director of the Agency. PCG is guided in its activity by Decree of the President of Uzbekistan NPP-1610 dated 28 August, 2011, the Financing and Project Agreements, applicable World Bank guidelines, sub credit agreements, as well as the Constitution and laws of the Republic of Uzbekistan, decrees and instructions of the Cabinet of Ministers, regulatory acts of the Ministry of Finance of Republic of Uzbekistan and the established Operational Manual. PCG is responsible for overall Project coordination and reporting. The PCG will be responsible for provision of assistance to the SVK in implementation of the Project in procurement, financial management, and other aspects to the extent required, in direct communication with the World Bank. 6 SYRDARYA WATER SUPPLY PROJECT (IDA LOAN 4869-UZ) "KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2018 1. PROJECT DESCRIPTION (CONTINUED) Project management (continued) Also, PCG is responsible to: * supervise and take part in day-to-day operational activities relating to the Project, including procurements and financial management; * incorporation of financial monitoring system for control and accounting- for disbursement and funds of co-financing organizations, for providing adequate monitoring and providing recommendation to the PCG Coordinator regarding availability and payout of IDA and the Government of Uzbekistan funds; * prepare statements of all financial transactions in Project co-financing; * keep records of all financial transactions within the Project framework; and * keeping all Project accounts, the targeted use of funds within the Project framework, preparing financial reports and conducting financial control in conformity with the existing norms and I-egulations of the Republic of Uzbekistan and the World Bank financial reporting guidelines. Agency is an agency at the governmental level, responsible for the coordination of water supply and sevagc projects in Uzbekistan. The PCG was established by the Agency for the control and coordination of projects financed by the World Bank. 2. SIGNIFICANT ACCOUNTING POLICIES Basis for presentation of financial statements The financial statements have been prepared on a cash basis of accounting by PCG, in accordance with die International Public Sector Accounting Standard (hereinafter - the "IPSAS") "Financial Reporting under Cash Basis of Accounting", issued by the International Public Sector Accounting Standards Board (hereinafter - the "IPSASB"'). The inancial statements prepared and presented general purpose financial statements which include the following components: * A statement of cash receipts and payments which recognizes all cash receipts, cash payments and cash balances controlled by the PCG and SVK; * Accounting policies and explanatory notes; and * Approved budget, a comparison of budget and actual amounts. The financial statements prepared in United States of America dollars (hereinafter - the "US dollars") with rounding to dollar. Reporting period of financial statements - is the calendar year from January 1 to December 31. 7 SYRDARYA WATER SUPPLY PROJECT (IDA LOAN 4869-UZ) "KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2018 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The cash basis accounting The cash basis of accounting recognizes transactions and events only xvhen cash (including cash equivalents) is received and paid by the PCG and SVK regarding the Project. The financial statements provide with Zb 01 information about the fund of cash received during the period, the purposes for which cash was used and de cash balances at the reporting date regarding the Project. The financial statements consist only cash and cash equivalents infows and outflows as required IPSAS "Financial Reporting under Cash Basis of Accounting". Non-monetary assets are not included and disclosed in the financial statements. Cash In accordance with IPSAS "Financial Reporting under Cash Basis of Accounting" cash is controlled by an entity when the entity can use the cash for the achievement of its own objectives or otherwise benefit from the cash and exclude or regulate the access of others to that benefit. During the year PCG controlled cash inflows, cash outflows and cash balances of the hank accounts (hereinafter - the "Designated Accounts - PCG") opened in the JSCB "1AMJKORBANK" Tashkent branch, Republic of Uxbekistan. These Designated Accounts - PCG opened for the purpose of financing the Project by the fund of IDA. All cash inflows and cash outtlows of the Designated Accounts - PCG occur due to the IDA fund. In addition, for the purpose of financing the Project by the fund of Uzbekistan (hereinafter - the "Co- financing) the SVK opened the bank accounts (hereinafter - the "Designated Accounts - SVK") in the "Ipoteka-Bank" JSCMB Syrdana region branch, Republic of Uzbekistan. During the year SVK controlled cash inflows, cash outflows and cash balances of these Designated Accounts - SVK. All cash inflows and cash utilows of l iC DcsignaLcd AccoutiU 3VK utuL due to Ie Cu lthiaiiciil fund. However, duing the year there wert Direct Paym]ents made by the fund of IDA and Co-finanring through Treasure account of Ministry of Finance of the Republic of Uzbekistan, which did not control the PCG and SVK. Going concern According to Protocol No. 229 of the meeting of the Interdepartmental Council on cooperation xvith international financial institutions, organizations and donor countries, the implementation of large investment projects under the Cabinet of Ministers of the Republic of Uzbekistan dated on 10 June 2017, completion date of the Project was extended up to June 30, 2019. The PCG also managed other Projects, Additional Financing Bukhara Samarkand Sewage Project IDA Loan No. 5698 (hereinafter - the "BSSP") and Alat Karakul Water Supply Project IDA Loan No. 5189 (hereinafter - the "AKWSP"). The financial statements prepared on the basis of going concern and the Agency is not considered to liquidate the PCG on the foreseeable future or there is no significant doubt upon the PCG's ability to continue as a going concern. 8 SYRDARYA WATER SUPPLY PROJECT (IDA LOAN 4869-UZ) "KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2018 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Principles and standards of financial management system The Financial Management Manual comprises of polcies and procedures to assist in ensuring the orderly and efficient management and control of all project resources, and to render proper accountability to all stakeholders. It is concerned with effective financial control over project assets, liabilities, funds, and expenditure together with the systems required accounting for the financial operations of the project. The manual sets forth the policies and procedures for the guidance of all the staff involved in financial management. The policies and guidelines convey standards for sound financial management and administration for the project, and are designed to: * promote ordery, economic, efficient and effective operations consistent with project objectives; * prevent and detect fraud and errors; * ensure accuracy and completeness of the accounting records; * facilitate timely preparation of financial information anti ensure that financial statements are fairly and accurately presented; * safeguard Project assets; and * ensure compliance with applicable laws, policies and regulations. Changes in accounting policy will he applied from the date of amendment and \will not have retroactive aplui1iion and the financial rcsultm will not be aineoid for the past accounting periods. Primary accounting documents - the basis for reflection each business transaction in the accounting records is a primary accounting document recording the fact of the operations and the disposal of tie head to carn' it out. Primary accounting documents shall be created at the time of the business transaction. The primary accounting documents is not permitted to amend, is not confirmed bv the participants of the hiadinea transrtion The bank and cash monetary instruments corrections are not allowed. All original documents should be filed and kept in the appropriate folders. Measurement of operational transactions- all committed transactions are measured at their historical cost at -he Is Ic l e ,M-lsMAu1u 1. 9 SYRDARYA WATER SUPPLY PROJECT (IDA LOAN 4869-UZ) "KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2018 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Withdrawal procedure through Statement of Expenditure use Along with the application of the SOE procedure, the Borrower may independently finance Project expenditures, and then receive reimbursement from credit proceeds. According to this method, PCG sends to the World Bank for subsequent delivery to the relevant disbursement division an application for reimbursement of expenses incurred suing application form # 2380 filled out on the basis of Statement of Expenditure (hereinafter - the "SOE"). In this case SOE forms are the only auxiliary documents. The World Bank sends SOE forms to PCG along with the disbursement letter for the Project. The letter contains explanations of the mechanism of funds disbursement. The SOE withdrawal procedure is used for the following expenditure categories * goods procured under contracts with a value less than 100 000 USD each; * works under contracts with a value of less than 500 000 USD each; * services under contracts with a value of less than 100 000 USD each for consulting companies and 50 000 USD each for individual consultants; and * CuIrot UxpCtndi tuE on conditionc agreed vith the bank. Taxes and Duties In accordance with Decree of the President of the Republic of Uzbekistan No. PP-1 610 of 28 August 2011 "On measures for implementation of the "Syrdarya Water Supply Project" with the participation of IDA" and joint Resolution of the Ministry of Finance of the Republic of Uxbekistan No. 64 of 16 Apnil 2004, the, State Tax Committee of the Republic of Uzbekistan No. 2004-15 of 16 April 2004 and State Customs Committee of the Republic of Uzbekistau No. 01-02/19-22 of 16 April 2004 "Ou approval of the Regulation on the (axatiun of goods (works, rervices) imported and acquired in the territory of the Republic of U:bekistau at the exp se of borrowed funds and guaranteed by the Republic of Uzbekistan within the framework of investment projects involving international financial institutions and foreign governmental financial organizations", goods, works and services, provided and paid for in the territory of the Republic of Lzbckistan and financed by IDA loans, are exempt from taxes and duties. These tax and duty privileges are part of the Co-financing of Uzbekistan in form of kind. This norm states that project participants in the framework of their activities at the expense of loans of International Financial Institutions (hereinafter - the "IFis") do not pay: * value added tax; * excise duties; * customs duties; * fees to the Republican Road Fund of the cost of the vehicles purchased under the project, paid by buyers when registering with the bodies of the Ministry of Internal Affairs of the Republic of Uzbekistan; and * mandatory contributions to the extra budgetary Pension Fund, the Republican Road Fund and the extra budgetarv Fund for the development of school education. 10 SYRDARYA WATER SUPPLY PROJECT (IDA LOAN 4869-UZ) "KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2018 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Taxes and Duties (continued) This norm applies both to imported goods (works, services), and to goods (works, services) purchased in the territory of te Republic of Uzbekistan at the expense of IFIs' loans. The project participants in the framework of the implementation of activities at the expense of the IFis' loans include: * the project executive (project implementation group or project management group, etc.); * legal contractors that perform projects, including "turnkey" upon deli-ery of the volume of work performed by them to the customer - the project executive body- and * legal entities (subcontractors, suppliers) selling goods (works, services) to the project executive body, as well as contractors who won the tender for project implementation in accordance xvith the concluded agreements. Reporting currency and methodology of conversion The financial statements prepared in the US dollar. A significant portion of the Project's cash inflows and outflows made in US dollars. Nevertheless, the Project has accounts in Uzbek SoLms (hereinafter the - "UZS"), which are used to receive funds and pay expenses, including for payment to foreign contractors and suppliers. Cash inflows and outflows in UZS were converted to US dollar using the following conversion principles: * For the fund of IDA, cash inflows and outflows were converted into US dollars using historical exchange rate of the Central Bank of the Republic of Uzbekistan (hereinafter -the "CBRU") and Commercial bank on the date of conversion of US dollar into UZS (FIFO method); * For the fund of Uzbekistan, cash inflows and outflows were converted into US dollar usin" the official exchange rates of CBRU and Commercial bank on the date of transaction and the balance amount of the I )reQntrl Arrolinr - '< n'rvd¶t" S childr,1.1 lliflr[ sh 'har at 1 B?I.I h daite cwI December 31, 2018. * The effect of changes in foreign exchange rates from the transfer of cash inflows and outflows recognized as foreign exchange gain or loss. Correction of errors When an error arises in relation to cash balance reported in the financial statements, the amount of the error that relates to prior periods, PCG reported by adjusting the cash at the beginning of the period. Also, PCG restates comparative information and disclosed in the notes to the financial statements the following: * The nature of the error; * The amount of the correction; and * The fact that comparative infoirmation has been restated or that it is impracticable to do so. In the following table PCG describes amount of adjustments made to the prior years (cumulative) and to 2017. Also, in the notes (Note A and B) to the financial statements, PCG disclosed the nature of the errors arose. 11 SYRDARYA WATER SUPPLY PROJECT (IDA LOAN 4869-UZ "KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Correction of errors (continued) In US dollars Notes 2017 Cumulative 2017 Cumulative 2017 Cumulative (revised) (revised) (adjustments) (adjustments) (initial record) (initial record) OPENING CASH BALANCES Designated account in USD - PCG A 2736072 - - - 2736072 Designated account in UZS - PCG A 21 - (3) - 24 Designated account in UZS - SVK B 777 544 - 777 544 Total opening cash balance 3513637 - 777541 - 2736096 RECEIPTS Funds of IDA A 9541405 49093825 (3001) 42199 9544406 49051626 Funds of Co-financing B 3377140 5872212 3377140 3725317 - 2146895 Other receipts B - 958 - 958 - - Total receipts 12 918 545 54966995 3374 139 3768474 9544406 51 198 521 Total cash available 16432182 54966995 4151680 3768474 12280502 51 198521 PAYMENTS Funds of IDA A (12 273 4D7) (49 090 697) 2 808 629 (12 276 215) (49 091 326) Funds of Co-financing B (3 279 371) (4 853 972) (3 279 371) (2 775 182) - (2 078 790) Total payments (15 552 778) (53 944 669) (3276 563) (2 774 553) (12 276 215) (51 170 116) Effect of changes in foreign exchange rates on cash, net A,B (483 749) (626 671) (483 552) (602 351) (197) (24 320) CLOSING CASH BALANCES Designated account in USD - PCG A 4 039 4089 - - 4089 4089 Designated account in UZS - PCG A 1 1 - - 1 1 Designated account in UZS - SKV B 391 565 391 565 391 565 391 565 - - Total closing cash balance 395 655 395 655 391 565 391 565 4 090 4 090 12 SYRDARYA WATER SUPPLY PROJECT (IDA LOAN 4869-UZ) "KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 A. CORRECTIONS OF ERRORS OF THE FUNDS OF IDA In previous financial statements PCG did not use historical exchange rate in conversion to US dollars, amounts paid in UZS from IDA funds (Designated Account in UZS - PCG). PCG did not disclosed Special Commitment payment separately and was added to the Direct Payments (Note 5). In the previous years there were erroneously payments and receipts from other PCG's Project which were not disclosed separately in the notes to the financial statements (Note 8). Substantially adjustments arose in respect of recognizing payments and refunds made in UZS using historical exchange rates. B. CORRECTIONS OF ERRORS OF THE FUNDS OF THE UZBEKISTAN In previous years there were not recognized by PCG cash balances, cash receipts and payments made by the funds of Co-financing of Uzbekistan. PCG made adjustments of financial statements in respect of fairly presentation of financial statements and recognized all cash balances, cash receipts and payments which was reflected in adjustments of the financial statements. 3. RECONCILIATION OF IDA FINANCING The reconciliation of financing between IDA's data on the website at wwwAworldhank.orr in the Client Connection section and the Project data as of December, 31 2018 is shown in the table below: In US dollars Notes CletCneto aa Project data Varianc (www.worldbank.org) C Direct payments 4 (47 064 609) (47 064 609) Reimbursement and advances 7 (15 554 249) (15 554 249) Special commitment payments 5 (325 480) (325 480) Total (62 944 338) (62 944 338) The following table summarizes the official exchange rates of UZS to one US dollars established by Central Bank of the Republic of Uzbekistan and Commercial bank: Exchange rate Changes (%) CBU currency rate: December 31, 2018 8339,55 3% December 31, 2017 8120,07 151% December 31, 2016 3231,48 15% "Hamkorbank" JSCB rate: December 31, 2018 8348,00 In accordance with Decree of the President No. UP-5177 "On Priority Measures to Liberalize Monetary Policy" dated 2 September 2017, legal entities are free to purchase foreign currency to pay for current operations (import of goods and services, repayment of loans, travel expenses and etc.) in commercial banks from 5 September 2017. 13 SYRDARYA WATER SUPPLY PROJECT (IDA LOAN 4869-UZ) "KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 4. THE WORLD BANK'S DIRECT PAYMENTS The World Bank made payments, at the borrower's request, dire :tly to a third party for digible expenditures. In the flowing table described Direct Payments made during the year by the World Bank to the counterparties from the funds of IDA. The PCG and 3VK was not controlled these Direct Payments. in US dollars Category 2018 Cumulative207 Cmltv (revised) (revised): TEXNO-ATINAK LLC 1-Works (2 883 044) (4 582 354) (1 699 310) (1 699 310) DAEJOO ENT CORP LTD 1-Works (2 530 781) (8483 327) (918 570) (5 952 546) CHINA PETROLIUM PIPELINE BUREAU 1-Works (1 548 111) (1 548 111) - - AMUBUKHOROKANALKURILISH 1-Works (1 275 094) (6 195 787) (655 432) (4 920 693) ALKE INSAAT SANAYI VE TICARET 1-Works (1168 695) (5294732) (3 079 833) (4 126 037) OBI HAYOT INGINEERING LLC 1-Works (456 725) (4994280) (410 357) (4 537 555) HIFAB INTERNATIONAL AB 3-Servics (394294) (2587311) (74055) (2 193017) JV MEGA MEBIKO 1-Works (273135) (2805 102) - (2 531 967) SHARQ QURILISH SERVICE 1-Works (266 418) (498 428) - (232 010) HYUNSUNG CONSTRUCTION CO.LTD. 1-Works (138 130) (2904 691) (866 103) (2 766 561) STEMOURILISH 1-Works (65 148) (294 993) - (229 845) GRANT THORNTON LLC 3-Servics (24711) (40000) (15289) (15289) GWCC INTERIVAL ZT GMBH 3-Servic2s (15 183) (15 183) - CHINA PETROLIEUM PIPELINE BUREAU 1-Works - (1 515794) (1 515794) (1 515794) LRS Planning and Technologies GmbH 1-Works - (5273601) - (5273601) KRANTAS LTD 2-Goocs - (30 915) - (30915) Total (11 039469) (47064609) (9234743) (36025140) 14 SYRDARYA WATER SUPPLY PROJECT (IDA LOAN 4869-UZ) "KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJEC-S COORDINATION GROUP NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2018 5. THE WORLD BANK'S SPECIAL COMMITMENT PAYMENTS In the following stated special commitment payments made b- the World Bank. 2017 Cumulative In US dollars Category 2018 Cumulative (revised) (revised) Hinjiang Qitailong Business CO LTD 2-Gcods - (325 480) - (325 480) Total - (325 480) - (325 480) 6. DIRECT PAYMENTS BY FUNDS OF CO-FINANCING OF UZBEKISTAN During the year Uzbekistan Co-financcd eligible expenses of -he Prac: through Direct Payments of the Treasury account of Ministry of Finance of the Republic of Uzbekistan. In the following table stated the amounts of Dire= Payments of Co-financing of Uzh:kistan which were not controlled by the PCG and SVK: In US dollars Category 2018 Cumulative 2017 Cumulative (revised) (revised) AMUBUKHOROKANALKURILISH 1-Works (982 985) (982 985) - - OBI HAYOT INGINEERING LLC 1-Wors (127 897) (1 082 516) (663 583) (954 619) SHARQ QURILISH SERVICE 1-Wors (12891) (12891) - - STEMQURILISH 1-Wors (12 394) (175 465) (163 070) (163 071) LRS Planning and Technologies GmbH 1-Worls - (33 586) (33 586) (33 586) State Inspectorate of Architecture and Construction in the Sirday regioxi 3-Services - (28 478) (23 307) (28 478) Total (1136 167) (2 315 921) (883 546) (1 179754) 15 SYRDARYA WATER SUPPLY PROJECT (IDA LOAN 4869-UZ) "KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 7. REIMBURSEMENT AND ADVANCE The World Bank may reimburse the Designated Account - PCG for expenditures eligible for financing pursuant to the Financing Agreement (eligible expenditures) that the borrower has prefinanced. The World Bank may advance funds from the Financing Account into the Designated Account - PCG to finance eligible expenditures as they are incurred and for which supporting documents will be provided at a later date. The Republic of Uzbekistan may advance payment into the Designated Account - SVK for the purpose of Co- financing the Project's eligible expenditures. In the following table described reimbursement and advance payments by the funds of IDA and Co-financing of the Uzbekis tan: RECEIPTS Reimbursement and advances the source of IDA 2 881 236 15 554 249 281 670 12673013 Advances from Co-financing of the Uzbekistan 4 399 361 9 091 819 2 493 594 4 692 458 Total 7280597 24646068 2775264 17365471 During 2018 PCG applied Statement of expenditures for reimbursement of Designated Account - PCG in the following order: In US .olr 3-osutn sumte -moun SWSP-1 17 2498383 64060 641 911 3204355 2881 236 Total 2498383 64060 641 911 3204 355 2 881 236 16 SYRDARYA WATER SUPPLY PROJECT (IDA LOAN 4869-UZ) "KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2018 8. ERROR RECEIPTS AND PAYMENTS In the following table described error receipts and refund of them by the funds of IDA: In US dollars 2018 Cumulative 207 Cmltv (revised) (revised) RECEIPTS BSSP (AF) - 45200 - 45200 AKWSP 200 25192 24992 24992 Sub-total 200 70392 24992 70192 REFUND/PAYMENTS - BSSP (AF) - (45 000) - (45 000) AKWSP (24 992) (25 192) (200) (200) Sub-total (24 992) (70 192) (200) (45 200) Total (24 792) 200 24 792 24 992 Remain amount of 200 US dollars were not reimbursed to the BSSP which erroneously receipted in 2014. 9. CASH OUTFLOWS BY COMPONENTS AND CATEGORIES During 2018 and 2017, by the funds of IDA and Co-financing of the Republic of Uzbekistan was financed expenses of the Project by the Components in the following order: In US dollars 2018 Cumulative207 Cmltv (revised) (revised) COMPONENTS Payments by the funds of IDA: Part A Improvement nf Water Siopply InfratnirtirP (11 48 147) (SQ ALO 873) (12 017 ?n8) (A8 144 r41) Part B. Institutional Strengthening and Capacity (63896) (228984) (83484) (165088) Building Part C. Feasibility Studies for Future Investments - (54 672) - (54 672) Part D. Project Management (80 242) (796 909) (97 205) (716 667) Bank charges (1 198) (87 837) (75 312) (86 639) Refund the funds of IDA: - Part A. Improvement of Water Supply Infrastructure - 122 100 - 122 100 Part B. Institutional Strengthening and Capacity 29473 29473 - Building Sub-total (11 464 205) (60 509 702) (12 273 207) (49 045 497) Payments by the funds of Co-financing: Part A. Improvement of Water Supply Infrastructure (5 158 291) (10 001 790) (3279371) (4843499) Bank charges - (10 473) - (10 473) Sub-total (5 158 291) (10 012 263) (3279371) (4853972) Total (16 622 496) (70 521 965) (15 552 578) (53 899 469) 17 SYRDARYA WATER SUPPLY PROJECT (IDA LOAN 4869-UZ) "KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2018 9. CASH OUTFLOWS BY COMPONENTS AND CATEGORIES (CONTINUED) During 2018 and 2017, by the funds of IDA and Co-financing of the Republic of Uzbekistan was financed expenses of the Project by the Categories in the following order: In US dollars 2018 Cumulative207 Cmltv (revised) (revised) CATEGORIES Payments by the funds of IDA: 1-Works (10894342) (50743207) (11 643782) (39848865) 2-Goods - (1 306 710) (64 060) (1 306 710) 3-Consulting services (598138) (8523521) (490053) (7925383) Bank charges (1198) (87 837) (75 312) (86 639) Refund the funds of IDA: 3-Consulting services 29473 151 573 - 122100 Sub-total (11 464 205) (60 509 702) (12 273 207) (49 045 497) Payments by the funds of Co-financing: 1-Works (5158291) (9973312) (3256064) (4815021) 3-Consulting services - (28 478) (23 307) (28 478) Bank charges - (10473) - (10473) Sub-total (5158291) (10 012 263) (3 279 371) (4 853 972) Total (16 622 496) (70 521 965) (15 552 578) (53 899 469) During 2018, the following counterpardes were repaid IDA funds, which was recognized as refund by the PCG: 2017 Cumulativ In US dollars 2018 Cumulative (revised) (revised REFUND HIFAB INTERNATIONAL AB - 122100 - 122 100 Invest loyiha consult LLU 29473 29473 - - Total 29473 151573 - 122100 10. OTHER RECEIPTS In the following table described other receipts to the Designated Accounts of PCG. S01 Cumulativ In US dollars 2018 Cumulative 21 uuaie (revised) (revised) Other receipts - 958 - 958 Total - 958 - 958 18 SYRDARYA WATER SUPPLY PROJECT (IDA LOAN 4869-UZ) "KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2018 11. FOREIGN EXCHANGE DIFFERENCE The foreign exchange difference on the funds of IDA and Co-financing of Uzbekistan described in the following table: . 01 Cmuatv In US dollars 2018 Cumulative207 Cmltv (revised) (revised) Foreign exchange gain/(loss), net, the funds of IDA 2 6 (1) 4 Foreign exchange loss, net, the funds of Co-financing (146 233) (772 908) (483 748) (626 675) Total (146231) (772902) (483 749) (626671) The value of foreign exchange difference on co-Financing funds relates to exchange rate changes, and especially to liberalization of UZS in September 1, 2017. 12. DESIGNATED ACCOUNTS The balances of the designated accounts of the PCG and SVK were as follows: Soure ofBalance as at Balance as at Balance as at In US dollars Notes December 31, December 31, December 31, 2018 2017 2016 Desiqnated account in USD - PCG IDA 13 2 435 800 4 089 2 736 072 Designated account in UZS - PCG IDA 14 - 20 Designated account in UZS - PCG IDA 14 1 1 Dut.iyrgiatud ALt;uui ii UZS - SVK IDA 022 569 391 565 777 544 Total 3058369 395655 3513637 Designated Account in USD - PCG and Designated Accounts in UZS - PCG opened in "Hamkorbank" JSCB Tashkenu branch in Uzbekistan. These Designated Accounts are for the purpose of financing the Project's eligible expenditures by the fund of IDA. The international rating agency Moody's affirmed the ratings of the "Hamkorbank" JSCB, forecast is Stable. The ratings of deposits in national currency Bl and foreign currencies at B2 (www.hamkorbank.uz). Designated account in UZS - SVK opened in "Ipoteka-Bank" JSCMB Syrdarya region branch in Uzbekistan, for the purpose of financing the Project, by the fund Co-financing of Uzbekistan. These Designated Account is controlled by the SVK. The international rating agency Moody's affirmed the ratings of the "Ipoteka-Bank" JSCMB, forecast is Stable. The ratings of deposits in national currency B and in foreign currency at B2 (www.ipotekabank.uz). 19 SYRDARYA WATER SUPPLY PROJECT (IDA LOAN 4869-UZ) "KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2018 13. DESIGNATED ACCOUNT IN USD - PCG In the following table shown transactions made during 2018 and 2017 by designated account in USD - PCG. Account No 2021 0840 9042 6264 6014' Depositary Bank JSCB "HAMKORBANK" Address Tashkent, Uzbekistan Source of financing IDA loan No.4869-JZ Notes In US dollars Openning balance as at January 1, 2017 12 2736 072 RECEIPT: Reimbursement the funds of IDA 7 281 670 Sub-total 281 670 Total cash available 3017742 PAYMENTS: Transfer to designated account in USD - SVK (2 632 752) Transfer to designated account in UZS - PCG 14 (380 645) Error transfer to designated account of "AKWS" project 8 (200) Bank charge 9 (56) Total payments (3 013 653) Closing balance as at December 31, 2017 4 089 Openning balance as at January 1, 2018 4089 RECEIPTS: Reimbursement the funds of IDA 7 2 881 236 Receipt from AKWSP Designated Account 8 200 Sub-total 2 881 436 Total cash available 2 885 525 PAYMENTS: Transfer to designated account in UZS - PCG 14 (424 672) Payment to AKWSP Designated Account 8 (24 992) Bank charge 9 (61) Total payments (449 725) Closing balance as at December 31, 2018 12 2435800 20 SYRDARYA WATER SUPPLY PROJECT (IDA LOAN 4869-UZ) "KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2018 13. DESIGNATED ACCOUNT IN USD - PCG (CONTINUED) During 2017, the PCG transfers funds of IDA to the Designated account of SVIC for the purpose of financing the folowing counterparties: Funds of In US dollars fncig Benificiary For counterparty Category Amount SYR/028 IDA SVK AMUBUKHOROKANALKURILISH 1-Works (744 191) SYR/008 IDA SVK AMUBUKHOROKANALKURILISH 1-Works (307 963) SYR/027 IDA SVK OBI HAYOT INGINEERING LLC 1-Works (296 099) SYR/014 IDA SVK OBI HAYOT INGINEERING LLC 1-Works (252 673) SYR/015 IDA SVK AMUBUKHOROKANALKURILISH 1-Works (223 033) SYR/017 IDA SVK DAEJOO ENT CORP LTD 1-Works (143 449) SYR/007 IDA SVK AMUBUKHOROKANALKURILISH 1-Works (142 073) SYR/062 IDA SVK HIFAB INTERNATIONAL AB 3-Services (88 250) SYR/026 IDA SVK STEMQURILISH 1-Works (84 730) SYR/01 1 IDA SVK HIFAB INTERNATIONAL AB 3-Services (76 904) SYR/003 IDA SVK STEMOURILISH 1-Works (76 409) SYR/033 IDA SVK HIFAB INTERNATIONAL AB 3-Services (70 155) SYR/036 IDA SVK STEMQURILISH 1-Works (62 763) SYR/O19 IDA SVK 000 MAGNA MEBEL 2-Goods (37 800) SYR/020 IDA SVK IDS Marketing Company 2-Goods (26 260) Total (2 632 752) 21 SYRDARYA WATER SUPPLY PROJECT (IDA LOAN 4869-UZ) "KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2018 14. DESIGNATED ACCOUNT IN UZS - PCG In the following tables shown transactions made by the Designated Accounts in UZS - PCG. Account No 2021 0000 9042 626460 Depositary Bank JSCB "HAMKORBANK Address Tashkent, Uzbekistan' Source of financing IDA loan No.4869-UZ, Notes In thousands of UZS In US dollars Openning balance as at January 1, 2017 12 63 20 RECEIPTS: Transfer from designated account in USD - PCG 13 2 373 229 380 645 Error receipt from AKWS project 8 101 727 24 992 Sub-total 2 474 956 405 637 Total cash available 2475019 405657 PAYMENTS: Operational expenses of PCG (438 398) (81 916) Transfer to designated account in UZS - SVK (2 029 846) (322 695) Bank charges 9 (6 775) (1 045) Effect of changes in foreign exchange rates on cash, net 11 - (1) Total payments (2 475 019) (405 657) Closing balance as at December 31, 2017- Openning balance as at January 1, 2018 - - RECEIPTS: Transfer from designated account in USD - PCG 13 3 453 699 424 672 Refund 116 652 29473 Total cash available 3570351 454145 PAYMENTS: OpPra4ional arI was of PO( (404 880) (55 532) Transfer to designated account in UZS - SVK (3 158 066) (397 478) Bank charges 9 (7405) (1 137) Effect of changes in foreign exchange rates on cash, net II - 2 Total payments (3 570 351) (454 145) Closing balance as at December 31, 2018 12 - - 22 SYRDARYA WATER SUPPLY PROJECT (IDA LOAN 4869-UZ) "KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2018 14. DESIGNATED ACCOUNT IN UZS - PCG (CONTINUED) During 2018 and 2017, the PCG paid funds of IDA through the Designated Account of SVK for the purpose of financing the following counterparties: Funds of In US In Year Benificiary For counterparty Category thousands of UZS1 2018 IDA SVK OBI HAYOT INGINEERING LLC 1-Works (160 756) (1 314 180) 2018 IDA SVK STEMQURILISH 1-Works (128305) (1049410) 2018 IDA SVK Invest loyiha consult LLC 3-Services (63 896) (436 306) 2018 IDA SVK Y3arpocaHoaT noldMxa LLC 3-Services (5821) (45 813) 2018 IDA SVK individual consultants 3-Services (38 700) (312 357) Sub-total (397 478) (3 158 066) 2017 IDA SVK OBI HAYOT INGINEERING LLC 1-Works (165 000) (1 336 767) 2017 IDA SVK Invest loyiha consult LLC 3-Services (83 484) (405 586) 2017 IDA SVK Bank charge (Note 9) (74 211) (287 493) Sub-total (322 695) (2 029 846) Total (720 173) (5 187 912) Account N2 2262 2000 9042 6264 6001 Depositary Bank JSCB "HAMKORBANK"i Address Tashkent, UzbekIstA Source of financing IDA loan p Currency Notes In thousands of UZS In US dollars Balance as at January 1, 2018 12 12 1 Payments: Transfer to designated account in UZS - PCG (12) (1) Total payments (12) (1) Balance as at December 31, 2018 12 - 23