98315 WATER USERS ASSOCIATION DEVELOPMENT SUPPORT PROJECT IBRD LOAN AGREEMENT 8039-AZ AND RELEVANT FINANCING AGREEMENT IDA CREDIT 4913-AZ Special purpose project financial statements for the year ended December 31, 2014 WATER USERS ASSOCIATION DEVELOPMENT SUPPORT PROJECT IBRD LOAN AGREEMENT 8039-AZ AND RELEVANT FINANCING AGREEMENT IDA CREDIT 4913-AZ TABLE OF CONTENTS Page STATEMENT OF MANAGEMENTS RESPONSIBILITIES FOR THE PREPARATION AND APPROVAL OF THE SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTS INDEPENDENT AUDITOR'S REPORT 2-3 SPECIAL PURPOSE PROJECT STATEMENT OF CASH RECEIPTS AND PAYMENTS 4 SPECIAL PURPOSE PROJECT STATEMENT OF FINANCIAL POSITION 5 NOTES TO THE SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTS 6-12 WATER USERS ASSOCIATION DEVELOPMENT SUPPORT PROJECT IBRD LOAN AGREEMENT 8039-AZ AND RELEVANT FINANCING AGREEMENT IDA CREDIT 4913-AZ STATEMENT OF MANAGEMENT'S RESPONSIBILITIES FOR THE PREPARATION AND APPROVAL OF THE SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31,2014 Project management is responsible for the preparation of the special purpose project financial statements that present fairly the financial position of the Water Users Association Development Support Project (the "Project") as at December 31 , 2014, the related cash receipts and payments for the year ended December 31, 2014, in accordance with the International Public Sector Accounting Standards ("IPSAS- Cash Basis"). In preparing the special purpose project financial statements, project management is responsible for: • properly selecting and applying accounting policies; • presenting information, including accounting policies, in a manner that provides relevant, reliable , comparable and understandable information; and • stating whether the IPSAS have been followed , subject to any material departures disclosed and explained in the special purpose project financial statements. Project management is also responsible for: • designing, implementing and maintaining an effective and sound system of internal controls; • maintaining proper accounting records that disclose, with reasonable accuracy at any time, the financial position of the Project, and which enable them to ensure that the special purpose project financial statements of the Project comply with the IPSAS - Cash Basis; • maintaining statutory accounting records in compliance with Azerbaijani legislation; • taking those actions as are reasonably available to them to safeguard the assets of the Project; and • preventing and detecting fraud and other irregularities. The special purpose project financial statements for the year ended December 31 , 2014 were approved by management on June 29, 2015. Akif Gulbahar Mam~ Chief Accountant Baku, the Republic of Baku, the Republic of Azerbaijan June 29, 2015 June 29, 2015 Deloitte. Delottte & Touche LLC 96 Ntzamt St Baku AZ1010 AzerbaoJan Tel +994 (12) 404 1210 Fax +994 (12) 404 1211 www delottte az INDEPENDENT AUDITOR'S REPORT To the Management of the Water Users Association Development Support Project: We have audited the accompanying special purpose project financial statements of the Water Users Association Development Support Project (the "Project") , financed under the International Bank for Reconstruction and Development ("IBRD") Loan agreement 8039-AZ, between the IBRD and Government of Republic of Azerbaijan ("GOA") dated October 25, 2011 , and relevant financing agreement of International Development Association ("IDA") Credit 4913-AZ agreement, between the IDA and Government of Republic of Azerbaijan ("GOA") dated October 25, 2011 , which comprise the special purpose project statement of financial position as at December 31 , 2014 and the related special purpose project statement of cash receipts and payments for the year ended December 31 , 2014 and cumulatively through December 31 , 2014, and a summary of significant accounting policies and other explanatory information (collectively referred to as the "special purpose project financial statements"). The special purpose project financial statement has been prepared by management using the International Public Sector Accounting Standards ("IPSAS- Cash Basis"). Management's responsibility for the special purpose project financial statements Management is responsible for the preparation and fair presentation of these special purpose project financial statements with the basis of accounting described in Note 2. This includes determining that the IPSAS - Cash Basis of accounting is an acceptable basis for the preparation of the financial statement in the circumstances, and for such internal control as management determines is necessary to enable the preparation of the special purpose project financial statements that are free from material misstatement, whether due to fraud or error. Auditors' responsibility Our responsibility is to express an op1mon on these special purpose project financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the special purpose project financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the special purpose project financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the special purpose project financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity's preparation and fair presentation of the special purpose project financial statements 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 controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the special purpose project financial stateme nts. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. DeiOille refers to one or more of Del01tte Touche Tohmatsu Ltmoted a UK pnva te company limtlad by guarantee, and ots network of member forms each of whiCh is a legally separate and on dependent entoty Please see www deloltte com/about for a detaoled descnptoon of the legal structure of Oelootte Touche Tohmatsu Lomoted and its member firms Please see www delootte com/ru/about f()( a detaoled descnpbon of the legal structure of Deloitte CIS C 2015 DelooUe & Touche LLC All n ghts reserved Opinion In our opinion, the accompanying special purpose project financial statements present, in all material respects, the financial position of the Project as at December 31, 2014 and the related cash receipts and payments for the year ended December 31, 2014, in accordance with the IPSAS- Cash Basis, as further detailed in Note 2. Emphasis of matter Limitation of use We draw attention to Note 2 to the special purpose project financial statements which describe the basis of accounting. The special purpose project financial statements are prepared to assist the Project to comply with the requirements of IBRD and IDA. As a result, the special purpose project financial statements may not be suitable for other purposes. Our report is intended solely for the use of management of the Project, IBRD, IDA and GOA and should not be distributed or used by anyone other than these specified parties. Going concern We draw attention to Note 2 to the special purpose project financial statements, which indicates that the expected Project completion date is June 30, 2016 according to terms specified in loan agreements with IBRD and IDA. The special purpose project financial statements for the year ended December 31, 2104 were prepared on a basis that is consistent with the International Public Sector Accounting Standards ("IPSAS - Cash Basis"), but were not amended to reflect the fact that going concern assumption is not appropriate. Our opinion is not qualified in respect of these matters. j)~.;btte o( llfl-tlAt-- June 29, 2015 Baku, the Republic of Azerbaijan 3 WATER USERS ASSOCIATION DEVELOPMENT SUPPORT PROJECT IBRD LOAN AGREEMENT 8039-AZ AND RELEVANT FINANCING AGREEMENT IDA CREDIT 4913-AZ SPECIAL PURPOSE PROJECT STATEMENT OF CASH RECEIPTS AND PAYMENTS FOR THE YEAR ENDED DECEMBER 31,2014 AND CUMULATIVE THROUGH THE YEAR ENDED DECEMBER 31 , 2014 (in US Dollars) Direct IDA Direct IDA Total Total Direct IDA Direct IDA Total Total payments payments project for project payments payments project for project for the year cumulative the year cumulative for the year cumulative the year cumulative ended to ended to ended to ended to December December December December December December December December Note 31 , 2014 31, 2014 31 , 2014 31,2014 31, 2013 31, 201 3 31 , 2013 31,2013 FINANCING: IDA funds: - designated account advances 3,000,000 3,000,000 - designated account replenishment 4, 7 22,413,528 44,316,802 17,662,671 21 ,903,274 - SOE reimbursement 4, 6 1,063,075 3,598,365 1,680,505 2,535,290 - direct payments 939,129 2,377,635 939,129 3,570,059 1,438,506 2,630,930 1,438,506 2,630,930 Total IDA funds 939,129 2,377,635 24,415,732 54,485,226 1.438,506 2,630,930 20,781,682 30,069,494 IBRD funds: - front-end fee 8 ,000 8,000 TotaiiBRD funds 8 ,000 8,000 Azerbaijan government funds 8,924,400 22,821 ,192 9,253,065 13,896,792 TOTAL FINANCING 33,340,132 77,314,418 30,034,747 43,974,286 LESS PROJECT EXPENDITURE: Works. goods, consulting services, training and operating cost 939,129 2,377,635 32,187,376 75,119,652 1,438,506 2,630,930 29,862,758 42,932,276 Front-end fee 8,000 8,000 Foreign exchange difference (9) (2,932) (401) (2,923) TOTAL PROJECT EXPENDITURE 939,129 2,377,635 32,187,367 75,124,720 1,438,506 2,630,930 29,862,357 42,937,353 Advances to region support units 16,265 16,265 Excess of financing over expenditure 1,152,765 2,173,433 172,390 1,020,668 A k if Gulbahar Mammad~ Chief Accountant Baku, the Republic of Azerbaijan Baku, the Republic of Azerbaijan June 29, 2015 June 29, 2015 The notes on pages 6 to 12 form an integral part of these special purpose project financial statements. 4 WATER USERS ASSOCIATION DEVELOPMENT SUPPORT PROJECT IBRD LOAN AGREEMENT 8039-AZ AND RELEVANT FINANCING AGREEMENT IDA CREDIT 4913-AZ SPECIAL PURPOSE PROJECT STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31,2014 (in US Dollars) December 31, December 31 , Note 2014 2013 ASSETS Cash at bank: IDA designated account 4 1,481,807 8,853 Project account 691,626 1,0 11 ,815 Advances to region support units 16,265 16,265 Cumulative Project Expenditure 75,124,720 42,937,353 TOTA L ASSETS 77,31 4,418 43,974,286 LIA BILITIES AND FUNDS Project financing IDA 54,485,226 30,069,494 Project financing IBRD 8,000 8,000 Project financing GOA 22,821 ,192 13,896,792 TOTAL LIABILITIE S AND FUNDS 77,314,418 43,974,286 Gulbahar Mam~ Chief Accountant Baku, the Republic of Azerbaijan Baku, the Republic of Azerbaijan June 29, 20 15 June 29, 2015 T he notes on pages 6 to 12 form an integral part of these special purpose project financial statements. 5 WATER USERS ASSOCIATION DEVELOPMENT SUPPORT PROJECT IBRD LOAN AGREEMENT 8039-AZ AND RELEVANT FINANCING AGREEMENT IDA CREDIT 4913-AZ NOTES TO THE SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014 (in US Dollars) 1. BACKGROUND The objectives of the Water Users Association Development Support Project (the "Project") are to improve the effectiveness and financial viability of on-farm irrigation water distribution and management of the project area. The Project is financed by the International Bank for Reconstruction and Development ("IBRD") Loan 8039-AZ and relevant financing agreement of International Development Association ("IDA") Credit 4913-AZ (collectively referred to as the "Agreement") between the IBRD, IDA and Government of Republic of Azerbaijan ("GOA") dated October 25. 2011 for USD 3,200,000 and Special Drawing Rights ("SDR") 48,900,000, respectively with funds availability period till June 30, 2016. According to the financing agreement with IDA repayment dates of the principal amount of the credtt are semi-annually on April 15 and October 15, commencing October 15, 2021 to and including April 15, 2031. The maximum commitment charge rate payable by the recipient on the unwithdrawn financing balance equals to one-half of one percent (1/2 of 1%) per annum. The service charge payable by the recipient on the withdrawn credit balance equals to three-quarters of one percent (3/4 of 1%) per annum. According to the loan agreement with IBRD. the repayment dates of the principal amount of the loan are June 15 and December 15 semi-annually commencing in 2015. The front-end fee payable by the borrower equals to one quarter of one percent (0.25%) of the loan amount. The interest payable by the borrower for IBRD loan for each interest period defined at a rate equal to the reference rate for the loan currency plus the variable spread. The Project has three components: i) Institutional strengthening and capacity building, ii) On-farm irrigation and drainage rehabilitation, iii) Project management, monitoring and evaluation. The Institutional strengthening and capacity building provides provision of: • finance institutional strengthening and capacity building of Azerbaijan Amelioration and Irrigation Open Joint Stock Company ("AIOJSC"), the Central Support Unit, the Region water users associations support units ('WUA"s) in 27 regions. and the regional support centres through the provision of goods, consultants' services; • capacity building and provision of operational and maintenance equipment and management facilities to eligible WUAs activities pursuant to the Law on "Amelioration and Irrigation" through the provision of goods, consultants' services and training; • strengthening of the capacity of AIOJSC for the state supervision of the activities of water users associations; and • preparation of selected studies, research and demonstration pilots in irrigation and drainage, integrated water resource management and related institutional areas. The On-farm component provides finance on rehabilitation of on-farm irrigation and drainage systems for about 34 eligible WUAs in 15 regions, selected on irrigated area and agricultural production potential through the carrying out of works and the provision of consultants' services. The Project management, monitoring and evaluation component finances project management and implementation activities, including monitoring and evaluation through the provision of goods, consultants' services and training by a Project implementation unit established within AIOJSC. 6 2. BASIS OF PRESENTATION Accounting basis These special purpose project financial statements are prepared on the cash basis of accounting based on International Public Sector Accounting Standards Financial Reporting under the Cash Basis of Accounting issued by the International Public Sector Accounting Standards Board and incorporate the following principal accounting policies, which have been consistently followed in all material respects. Project financing is recognised as a source of project funds when the cash is received. Project expenditure are recognised as a use of project funds when the payments are made. The reporting currency is United States dollars ("US dollars" or "USD"). Items included in the special purpose project financial statements are measured using the currency that best reflects the economic substance of the underlying events and circumstances relevant to that entity (the "functional currency"). The functional currency of the Project is United States dollars ("US dollars" or "USD"). The exchange rates used by the Project management in the preparation of the special purpose project financial statements as at year-end are as follows: December 31, December 31, 2014 2013 AZN/1 USO 0.7844 0.7845 SOR/1 USO 1.4488 1.5452 Project duration According to the agreement. the expected Project completion date is June 30, 2016. As stated in Note 3 below, at completion of the Project, Cumulative Project Expenditure, together with the liabilities on loans to finance them will revert to the State. Reporting entity The special purpose project financial statements are only intended for the use of the Water Users Association Development Support Project financed under the International Bank for Reconstruction and Development ("IBRD") and International Development Association ("IDA"). 3. ACCOUNTING POLICIES Cash Cash comprises cash on the Designated and Project Accounts. The Designated account is a disbursement account of the Project maintained in US Dollars at the International Bank of the Republic of Azerbaijan. The Project Account is maintained by the Project in local currency (Azerbaijan Manat) and to be used for financing the Government contribution to the Project's expenditure. Recognition of funding and expense Project financing is recognised as a source of funds when the cash is received. Project expenditure is recognised as a use of funds when payment is made. Cumulative Project Expenditure Cumulative Project Expenditure generally comprises capital spend on the rehabilitation of on-farm irrigation and drainage systems throughout the country, accumulated from the establishment of the Project. At completion of the Project, Cumulative Project Expenditure, together with the liabilities on loans to finance them will revert to the State. 7 Foreign currency translation Transactions in other currencies are converted to US dollars at the exchange rate prevailing at the date of the transaction. Cash balances in other currencies are converted to US dollars at the period end exchange rate. The resulting foreign exchange gain/losses are recorded separately in the special purpose statement of cash receipts and payments. Project financing transactions denominated in other currencies are converted to US dollars at the exchange rate prevailing at the date of the transaction. Project financing provided under the agreement with IDA is denominated in USD in the equivalent of Special Drawing Rights. 4. FINANCING AND EXPENDITURE THROUGH THE DESIGNATED ACCOUNT Financing Financing consists of the contributions made by the IBRD and IDA either in the form of direct payments made to the contractors, suppliers and consultants or in the form of designated account replenishments. The Project periodically requests withdrawal of loan proceeds through submission of a statement indicating expenditure for certain items referred to in the Agreement. Expenditure Payments out of the designated account are made for eligible expenditure in accordance with the provisions of the Agreement. Disbursements from designated account are made either for direct payments or to reimburse for project expenditure already paid by the Project. The IDA then replenishes the designated bank account on the basis of appropriate withdrawal applications submitted for these disbursements as described in the preceding paragraph. The designated account is a disbursement account for the Project, denominated in US dollars, maintained at the International Bank of Azerbaijan (Account # AZ331BAZ38190028409330119120 USD, address: 67 Nizami street, Azerbaijan, Baku AZ1005) during the year ended December 31, 2014, so as to ensure the payment of eligible expenditure, as defined by the Agreement. The summary of the movements of the designated account were as follows: Balance as at January 1, 2013 55,041 ADD receipts: -Advance replenishments* (Note 7) 17,662,671 - SOE reimbursements* (Note 6) 1,680,505 Total cash receipt 19,398,217 DEDUCT disbursements: Amount of eligible expenditure paid (19,389,364) Balance as at December 31, 2013 8,853 ADD receipts: -Advance replenishments (Note 7) 22,413,528 - SOE reimbursements (Note 6) 1,063,075 Total cash receipt 23,485,456 DEDUCT disbursements: Amount of eligible expenditure paid (22,003,649) Balance as at December 31, 2014 1,481,807 8 No withdrawal on International Bank for Reconstruction and Development ("IBRD") Loan 8039-AZ and relevant financing agreement of International Development Association ("IDA") Credit 4913-AZ agreement was made from the start of project activities until January 1, 2014 (Note 6, 7). 5. BUDGET AND BASIS OF FUNDING According to the terms of the Agreement with the IBRD and IDA, the Project is financed by proceeds received from different sources of finance as follows: IBRD loan agreement 8039-AZ: Budget, Financed by Financed by category Description USD IBRD Loan,% GOA Funds,% Works, Goods, Consultants' services including Audit, Training and Operating Costs 3,192,000 83% 17% 2 Front-end fee 6,000 TOTAL 3,200,000 IDA credit 4913-AZ: Budget, Financed by Financed by Category Description USD" IDA Loan,% GOA Funds,% Works, Goods, Consultants' services including Audit, Training and Operating Costs 77,301 '120 83% 17% TOTAL 77,301,120 • The total budget of the Project comprises SDR 48,900,000, equivalent to USD 77,301,120 as at the agreement date October 25, 2011, per the official exchange rate as of Central Bank of Azerbaijan USD/1 SDR 1.5808. 6. STATEMENT OF EXPENDITURE WITHDRAWAL SCHEDULE The IDA has disbursed advance payments to the Designated Account of the Project of USD 3,000,000 for the year ended December 31, 2012. The following funds were disbursed through the Statement of Expenditure ("SOE"): For the year ended December 31, 2014: Works, goods, consulting services, Reimbursed SOE training and expenditure Application # operating cost {Note 4! Balance 26 61,658 (61,658) 27 73,513 73,513 (73,513) 28 60,963 60,983 (60,963) 29 120,219 120,219 (120,219) 30 75,755 75,755 (75,755) 31 80,860 80,860 (80,860) 32 107,304 107,304 (107,304) 33 98,383 98,383 (98,383) 34 76,101 76,101 (76,101) 35 66,361 66,361 (66,361) 36. 75,866 75,866 75,866 Total 917,003 917,003 (841 '137! 75,866 • Application #36 was submitted for expenditure incurred and paid in 2014 and reimbursed subsequent to the reporting period in year 2015 by IDA. 9 For the year ended December 31,2013: Works, goods, consulting services, SOE training and Reimbursed Application# reimbursement oeerating cost exeenditure Balance 15 74,730 74,730 (74,730) 16 522,556 522,556 (522,556) 17 211,797 211,797 (211,797) 18 197,855 197,855 (197,855) 19 179,355 179,355 (179,355) 21 146,266 146,266 (146,266) 22 63,397 63,397 (63,397) 25** 165,976 165,976 165,976 26** 55,962 55,962 55,962 Total 1,617,894 1,617,894 (1,395,956) 221,938 **Application #25 and #26 were submitted for expenditure incurred and paid in 2013 and reimbursed subsequent to reporting period in 2014 by IDA. 7. DESIGNATED ACCOUNT EXPENDITURE REPLENISHMENT SCHEDULE The following funds for expenditure were disbursed through replenishment of the Designated account for the year ended December 31, 2014: Works, goods, Designated consulting account services, Reimbursed expenditure training and expenditure Application# reimbursement oeerating cost (Note4) Balance 26 1,512,681 1,512,681 (1,512,681) 27 2,280,101 2,280,101 (2,280, 101) 28 1,559,995 1,559,995 (1,559,995) 29 2,166,405 2,166,405 (2, 166,405) 30 1,855,039 1,855,039 (1 ,855,039) 31 1,663,878 1,663,878 (1,663,878) 32 2,714,516 2,714,516 (2,714,516) 33 2,086,134 2,086,134 (2,086,134) 34 2,386,698 2,386,698 (2,386,698) 35 1,432,372 1,432,372 (1.432,372) 36* 1,428,827 1,428,827 1,428,827 Total 21,086,646 21,086,646 (19,657,819) 1,428,827 * Application #36 was submitted for expenditure incurred and paid in 2014 and reimbursed subsequent to reporting period in 2015 by IDA. 10 For the year ended December 31, 2013: Works, goods, Designated consulting account services, expenditure training and Reimbursed Application # reimbursement operating cost exeenditure Balance 15 2,658,871 2,658,871 (2,658,871) 16 1,677,575 1,677,575 (1,677,575) 17 1,494,519 1,494,519 (1,494,519) 18 2,355,188 2,355,188 (2,355, 188) 19 2,161,586 2,161,586 (2, 161 ,586) 21 2,822,865 2,822,865 (2,822,865) 22 1,845,157 1,845,157 (1,845,157) 25*" 2,116,545 2,116,545 2,116,545 26** 639,164 639,164 639,164 Total 17,771,470 17,771,470 (15,015,761) 2,755,709 ** Application #25 and #26 were submitted for expenditure incurred and paid in 2013 and subsequently reimbursed in 2014 by IDA. 8. TOTAL AMOUNTS PAID BY IDA The total direct disbursements by IDA on behalf of the Project were USD 939,129 and USD 1,438,506 for the year ended December 31, 2014 and for the year ended December 31, 2013, respectively. Payments controlled and paid by IDA to the Project for the year ended December 31, 2014 and for the year ended December 31, 2013 were USD 24,981,296 and USD 22,320,823, respectively. 9. OPERATING ENVIRONMENT Country risk Emerging markets such as Azerbaijan are subject to different risks than more developed markets, including economic, political and social, and legal and legislative risks. Laws and regulations affecting businesses in Azerbaijan continue to change rapidly; tax and regulatory frameworks are subject to varying interpretations. The future economic direction of Azerbaijan is heavily influenced by the fiscal and monetary policies adopted by the government, together with developments in the legal, regulatory, and political environment. Because Azerbaijan produces and exports large volumes of oil and gas, its economy is particularly sensitive to the price of oil and gas on the world market. 10. RISK MANAGEMENT Currency risk The Project is exposed to currency risk on cash at bank and funds received that are denominated in currencies other than AZN. The currency in which these transactions primarily are denominated are US Dollars (USD) and Special Drawing Rights (SDR). 11 Exposure to currency risk The Project's exposure to foreign currency risk was as follows based on notional amounts: December 31, 2014 December 31, 2013 SDRdeno- USD deno- SDRdeno- USD deno- minated minated minated minated Cash at bank 1,481,807 8,853 liabilities and funds (54,485,226) (8.000) (30,069.494) (8.000) Net exposure (53,003,419) (8,000) (30,060,641) (8,000) Sensitivity analysis A weakening of the AZN for USD-denominated instruments and USD for SDR-denominated instruments, as indicated below, against the following currencies at December 31, 2014 and 2013 would have increased cumulative project expenditure by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Project considered to be reasonably possible at the end of the reporting period. The analysis assumes that all other variables, in particular interest rates, remain constant. Project expenditure Year ended Year ended December 31, December 31, 2014 2013 AZN I USD 35% weakening (2013: 35% weakening) (2,800) (2,800) USD I SDR 5% weakening (2013: 5% weakening) (2,650, 171) (1 ,503,032) A strengthening of the AZN and USD against the above currencies would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant. 11. EVENTS SUBSEQUENT TO THE SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTS DATE Subsequent to the reporting period IDA reimbursed application #36 in the amount of USD 1 ,504,693 (Note 6, 7). As of June 10, 2015 the Project raised additional funds from IDA, IBRD and Government of the Republic of Azerbaijan in amount of USD 4,855,910, USD 791,636 and USD 1,862,322, respectively. The only asset of the Entity is cash, which is not subject to fair value review and write down as the fair value of cash is its book value. On February 21, 2015, the Central Bank of the Republic of Azerbaijan devalued the Azerbaijani Manat (AZN). As a result, the official exchange rate of AZN to the U.S. dollar fell to AZN 1.05 per U.S. dollar, and the official exchange rate of AZN to the Euro fell to AZN 1.19 per Euro, i.e. by approximately 34% from the exchange rates at the balance sheet date. To prevent the destabilisation of the financial market and economy as a whole, the Central Bank plans to set a daily exchange rate for the AZN against a dual currency basket comprised of the U.S. dollar and the Euro. 12. APPROVAL OF FINANCIAL STATEMENTS These special purpose project financial statements were authorised for issue by the Management of the Project on June 29, 2014. 12