MENAF MIDI V VAST NORTI( AVICA FINANC Financial Statements of Projects Funded By the International Bank For Reconstruction and Development - Loan #8705 LE (Roads and Employment Project) And Auditor's Report Yeari fore Deveme and 2018 Year Ended December 31, 2018 Contents Page Independent Auditor's Report 3 Statement of Special Account of Projects Funded by the International Bank For Reconstruction and Development Loan #8705 LE (Roads and Employment Project) Statement of Project Expenditures of Projects Funded by the International Bank For Reconstruction and Development -Loan #8705 LE (Roads and Employment Project) Statement of Expenditures of Projects Funded by the International Bank For Reconstruction and Development -Loan #8705 LE (Roads and Employment Project) Notes to the Financial Statements/ Project Expenditures 7 9 MENAF MiDS L K(ANIT NOATI APIRiA 11ANCV INDEPENDENT AUDITOR'S REPORT President Council for Development and Reconstruction World Bank Loan No. 8705 LE Roads and Employment Project Beirut, Lebanon We have audited the accompanying financial statements comprising of the statement of Special Account, Project Expenditures, and Statement of Expenditures of Project Funded by the International Bank for Reconstruction & Development, CDR's share of Loan #8705 LE, for the year ending and cumulatively as at December 31, 2018. The Project financial statements are the responsibility of the Council for Development and Reconstruction's management. Our responsibility is to express an opinion on these financial statements based on our audit. We have also audited compliance with the laws, regulations, guidelines and provisions governed by the Loan Agreement for the year ended December 31, 2018. We conducted our audits in accordance with International Standards on Auditing. Those Standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and about whether the "Roads and Employment Project" has complied with the laws, regulations, guidelines and provisions governed by the Loan Agreement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion: (a) The accompanying Financial Statements present fairly, in all material respects, the cash receipts and payments of the Roads and Employment Project for the year ending December 31, 2018 and showing cumulative balances as at December 31, 2018 in accordance with the International Public Sector Accounting Standards(IPSAS), under the cash basis of accounting, (b) Internal control over financial reporting involved in the preparation of replenishments, direct payments, payments through special commitments, and reimbursements Le. expenditures reimbursed on the basis of Statements of Expenditures can be relied upon to support the related withdrawals as of December 31, 2018; (c) The project was in all material respects in compliance with the laws, regulations, guidelines and provisions governed by the Loan agreement. June 10, 2019 MENAF Jihad Anoutt Managing Partner Council for Development and Reconstruction Roads and Employment Project - Loan No 8705 Financial Statements 31 December 2018 Note USD Balance as ofJanuary 1, 2018 Add: World Bank replenishments 10,000,000 Cash Receipt Deduct: Payments for project expenditures funded by the Grant Goods,Works, Non Cons Ser&Cons Ser Tr & IncOC 3 Balance December 31, 2018 10,000,000 See accompanying notes to the financial statements. Council for Development and Reconstruction Roads and Employment Project - Loan No 8705 Financial Statements 31 December 2018 Note USD Goods,Works, Non Cons Ser&Cons Ser Tr & IncOC 3 53,900 53,900 See accompanying notes to the financial statements. Council for Development and Reconstruction Roads and Employment Project - Loan No. 8705 Financial Statements 31 December 2018 No withdrawals against the statement of expenditures were made during 2018 Council for Development and Reconstruction Roads and Employment Project - Loan No 8705 Fmncial Statements 31 December 2018 The objectives of the Projects are to: . Improve transport Connectivity along select paved Road Sections, and ii. Create short term jobs for Lebanese and Syrians Part A. Roads Rehabilitation and Maintenance 1. Carrying out a program of activities to rehabilitate, upgrade and maintain selected primary, secondary and tertiary roads, including road safety and spot improvements("Sub-projects") 2. Provision of technical assistance for the design, procurement and supervision of said Sub- projects and for preparation of safeguards Instruments for the Project. Part B. Improving Road Emergency Response Capacity Strengthening the capacity of MoPWT to respond to weather and other emergencies affecting the road networks, through: 1. Provision of emergency road works related tools, equipment and vehicles; and 2. Provision of technical assistance for updating its emergency response systems and procedures Part C. Capacity Building and Implementation Support 1. Strengthening national road asset management through, inter aha, the establishment of a national road asset database for the trunk network, review and updating of road network sign and maintenance standards, preparation of a routine and periodic maintenance manual for small contractors, preparation of bidding documents for small contractors, and provision of training on performance based contracts for periodic and routine road maintenance. 2. Strengthening implementation of road safety measures though, inter alia, preparation and implementation of a national strategy and action plan on road safety. 3. Undertaking required feasibility studies, technical designs, financial, environmental and social impact studies. 4. Provision of training for key CDR and MoPWT Staff, workers and small contractors on: a. Proper routine and periodic maintenance standards, environmental and social safeguards measures as well as health and safety measures and, b. Preparation of supervision manual 5. Strengthening the Capacity of the CDR for project implementation and management (including monitoring and evaluation), through the provision of technical assistance, operating costs and acquisition of goods for the purpose. The accompanying statement of special account, project expenditures and statement of expenditures are prepared on the cash basis of accounting. On this basis, disbursements from loan are recognized when received and expenses are recognized when paid rather than when incurred. Council for Development and Reconstruction Roads and Employment Project Loan No 8705 Financial Statements 31 December 2018 Expendsitures paid from the Roads and Employment Project Special account and direct payments paid during the year 2018 are detailed as follows Amount financed Contractor's Name Description from loan proceeds (100%) Goods,Works, Non Cons Ser&Cons Ser Tr & IncOC Simon Mouawad Procurement officer 53,900 Amount paid from special account Direct Payment 53,900 Total 53,900 Council for Development and Reconstruction Roads and Employment Project Loan No. 8705 Financial Statements 31 December 2018 The cumulative drawings and payments made in this account since inception up to December 31, 2018 are detailed as follows: USD World Bank initial deposit 10,000,000 World Bank replenishments Increase of the special account Interest earned 10,000,000 D.educt Payments for project expenditures funded by the Loan Goods,Works, Non Cons Ser&Cons Ser Tr & IncOC Balance - December 31, 2018 10,000,000 Council for Development and Reconstruction Roads and Employment Project - Loan No. 8705 Fmancul Statements 31 December 2018 USD Goods,Works, Non Cons Ser&Cons Ser Tr & IncOC 53,900 53,900