JSC MCD Independent Auditor's Report on the financial statements of CIS Statcommittee structured according to special rules under the Grant Agreement with International Bank for Reconstruction and Development for the period from 1 April 2016 to 31 December 2018 Saint Petersburg 2019 Independent Auditor's Report Opinion To the Chairman of CIS Statcommittee We have audited special-purpose financial statements of the Interstate Statistical Committee of the Commonwealth of Independent States (CIS Statcommittee, OGRN: 1027700427534, 39 bldg. 1 ul. Myasnitskaya, Moscow 103450) prepared in respect of financing under the project "Improvement of CIS Statistical Infrastructure and Development of CIS-STAT Web-Portal" pursuant to Grant Agreement No. TF-019222 dated 24.06.2015 and the Supplementary Agreement thereto dated 20.04.2017 between the International Bank for Reconstruction and Development and CIS Statcommittee (hereinafter, the Grant and the Grant Agreement), comprising: * Financial Statement Summary Sources and Uses of Funds with Expenditure Detail, including expense items for the period from 01.04.2016 to 31.12.2018 and as of 31.12.2018; * SOE Withdrawal Schedule for the period from 01.04.2016 to 31.12.2018; * Special Account (SA) Statement (for the period from 01.04.2016 to 31.12.2018) as at 31.12.2018; * Notes to the financial statements under the Grant Agreement, including summary of significant accounting policies. In our opinion, the accompanying special-purpose financial statements for the period from 1 April 2016 to 31 December 2018 is prepared, in all material respects, in accordance with generally accepted accounting principles and practice and requirements to financial statements as per section 2.06 of the Standard Conditions for Grants Made by the World Bank dated 15 February 2012. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further disclosed in section "Auditor's Responsibility for the Audit of the Financial Statements under the Grant Agreement" of our report. We are independent of CIS Statcommittee in accordance with the Independence Rules for Auditors and Audit Firms and the Code of Ethics for Professional Auditors which comply with the IESBA Code of Ethics for Professional Accountants, and the ethical requirements applicable to our audit of the financial statement in the Russian Federation; 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. Emphasis of Matter: Accounting Principles and Restriction on Distribution Please, refer to par. 2 and 3 of the Notes to the Financial Statements under the Grant Agreement describing the principles used in preparation of the financial statements. The financial statements under the Grant Agreement were prepared in order to confirm the proper disbursement of the Grant funds for the purposes set out in the Grant Agreement and the preparation of fair financial statements in the form approved by the International Bank for Reconstruction and Development (IBRD) and their presentation to the said bank. Therefore, the accompanying financial statements may be not applicable for any other purposes. Our report is intended solely for CIS Statcommittee and International Bank for Reconstruction and Development and may not be distributed to or used by any third parties (other than CIS Statcommittee and IBRD). We do not express a modified opinion in relation to the above. Responsibility of the Management in Charge of the Financial Statements under the Grant Agreement Management of CIS Statcommittee is responsible for the preparation and presentation of the above financial statements in accordance with the guidelines for preparation of financial statements approved by the International Bank for Reconstruction and Development; the generally accepted accounting principles and practices; and the requirements to financial statements as per section 2.06 of the Standard Conditions for Grants Made by the World Bank dated 15 February 2012; and for the internal control system the management believes necessary to prepare financial statements free from material misstatements due to fraud or er In preparing the financial statements, the management is responsible for assessing the ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, except where the management intends to liquidate the Company, or to discontinue its operations, or has no realistic alternative but to do so. Auditor's Responsibility of the Audit of the Financial Statements under the Grant Agreement Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with International Standards on Auditing, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: a) Identify and assess the risks of material misstatement of the 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 omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of CIS Statcommittee. - Evaluate the appropriateness of accounting policies used, the reasonableness of accounting estimates calculated by the Management and related disclosures. - Conclude on the appropriateness of CIS Statcommittee 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 ability of CIS Statcommittee 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 CIS Statcommittee to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with the management of CIS Statcommittee, acting as those charged with governance in respect of the accompanying financial statements, 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 our audit. Deputy General Director for Audit - Head of Audit Department of JSC MCD Artur V. Gazaryan Qualification certificate No. 02-000238 of September 10, 2012 CIO ORNZ: 21606070950 Auditing Firm JSC MCD OGRN: 1027810263579 Office 1054 Premises 2H 60A Bolshoy Sampsonievsky Pr., St. Petersburg, Russia, 194044 JSC MCD is a member of the self-regulatory organization Auditing Association Sodruzhestvo ORNZ: 11606048526 19 June 2019 PKF MCD is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms. Interstate Statistical Committee of the Commonwealth of Independent States Grant for Improvement of CIS Statistical Infrastructure and Development of CIS-S TAT Web-Portal Trust FundNJl TF019222 Summary of Sources and Uses of Funds with the Expenditure Detail As of December 31, 2018. (for the period 2016.04.01-2018.12.31) in USD Proquremeut ACTUAL BUDGET VARIANCE Plan Note Current Cumulative Current Cumulative Current Cumulative period period Proqurement Plan period Proqurement Plan Opening account balances Special Account 0,00 0,00 Project Account 0,00 0,00 Total 0,00 0,00 Financing IBRD Trust Fund 669213,12 669213,12 0,00 1 400000,00 669213,12 -730786,88 Total 669 213,12 669 213,12 0,00 1 400 000,00 669 213,12 -730 786,88 Total financing 669 213,12 669 213,12 0,00 1 400 000,00 669 213,12 -730 786,88 1 400 000,00 Uses of Grant Funds Category (1), including: 660 216,30 660 216,30 0,00 1 334 000,00 660 216,30 -673 783,70 1 334 000,00 1. I tmprovement of CIS Statistical Infrastructure and Development of CIS-STAT Web-Portal 620 475,01 620 475,01 0,00 1 208 100,00 620 475,01 -587 624,99 1 208 100,00 1.2 Audit of grant 0,00 0,00 0,00 15 000,00 0,00 -15 000,00 15000,00 1.3 Procurement consultant services 571,95 571,95 0,00 572,00 571,95 -0,05 572,00 1.4 Procurement consultant services 15 347,32 15 347,32 0,00 25965,00 15 347,32 -10 617,68 25 965,00 1.5 Financial consultant services 15 124,91 15 124,91 0,00 26697,00 15 124,91 -11 572,09 26697,00 1.6 Operating costs 8697,11 8697,11 0,00 50000,00 8697,11 -41 302,89 50000,00 1.7 Unallocated amount 0,00 0,00 0,00 7 666,00 0,00 -7666,00 7 666,00 Category (2) Subgrants 0,00 0,00 0,00 66 000,00 0,00 -66 000,00 66 000,00 Total uses of Grant Funds 660 216,30 660 216,30 0,00 1 400 000,00 660 216,30 -739 783,70 1 400 000,00 Ending account balances Special Account 8 970,00 8 970,00 Project Account 26,82 26,82 Total 8996,82 8996,82 A;" Chairman' Interstate Statistical Committee of the CIS /J4 4kV Interstate Statistical Committee of the Commonwealth of Independent States Grant for Improvement of CIS Statistical Infrastructure and Development of CIS-STA T Web-Portal Trust Fund .N TF019222 SOE Withdrawal Schedule for the period from April 01,2016 to December 31, 2018 Disbursement Category in USD dollars Category 1 Category 2 SOE W/D Application Payment 1.Improvement of CIS Sub-Grants Statistical Infrastructure and 3.Procurement 4.Procurement 5.Financial Development of CIS- 2.Audit consultant consultant consultant Operation Number Number Date Date STAT Web-Portal of Grant services services services costs Total 1 TF-019222-2 06.23.2016 571,95 571,95 86,10 1 230,00 Total Withdrawals Total Withdrawals FY 2016 - IBRD - IBRD - - 571,95 - 571,95 86,10 - - - 1 230,00 1 TF-019222-3 01.17.17 1 747,63 116,55 1 864.18 2 TF-019222-4 05.22.17 6323,22 985,03 285,35 7593.60 3 TF-019222-6 10.12.2017 3 940,10 3 018,62 300,31 7 259,03 Total Withdrawals Total Withdrawals FY 2017 - IBRD - IBRD - - - 10 263,32 5 751,28 702,21 16 716,81 1 TF-019222-8 02.12.2018 2 955,08 1 747,63 198,81 4 901,52 2 TF-019222-11 06.14.2018 1 461,65 1 906,50 143,55 3 511.70 3 TF-019222-12 09.17.2018 667,27 1 588,75 62,71 2318,73 4 TF-019222-13 12.06.2018 - 1 398,10 6 888,14 8 286,24 Total Withdrawals FY 2018 - IBRD Withdrawals - IBRD - - 5 084,00 6 640,98 7293,21 14 116,67 1 TF-019222-15 03.12.2019 38 226,89 2 160,70 2 160,70 661,22 43 209,51 Total IBRD Total Withdrawals 38 226,89 - 571,95 17 508,02 15 124,91 8 742,74 - - - 75 272,99 Chairman, Interstate Statistical Committee of the CIS Cj Vladimir Sokolin Russian Federation Grant for Improvement of CIS Statistical Infrastructure and Development of CIS-STAT Web-Portal Trust Fund JN TF019222 Special Account (SA) Statement (for the period 2016.04.01-2018.12.31) As at December 31, 2018 in US Dollars /i I Opening balance as at the FIRST DAY OF THE PERIOD la USD Designated Account 50 000,00 lb DA Funds on Rouble Account (USD equivalent) Ic DA Funds - USD - funds in transit 50 000,00 2 Add: Cumulative unexplained discrepancy 3 IBRD advance during the period -_36 965,00 36 965,00 4 Less: Refund to IBRD from SA during the period - 5 Present outstanding amount advanced to SA 86965,00 6 SA closing balance as at THE END OF THE Period carried forward to next period /iv 8 996,82 6a USD Special Account 8 970,00 6b SA Funds on Rouble Account(USD equivalent) 26,82 7 Add: Amount of eligible expenditures paid during period /v 77 968,18 8 Service charges (if debited into SA) - 77968,18 86 965,00 9 Less: Interest earned (if credited into SA) _ 10 Total advance accounted for 86965,00 11 Funds in transit 12 Discrepancy (5) - (10) to be explained /vi Chairman, Interstate Statistical Committee of the CIS Vladimir Sokolin ' .~. C' 61,7C) CIS Statcommittee OGRN: 1027700427534, 39 bldg. 1 ul. Myasnitskaya, Moscow 103450 18 June 2019 Notes to the financial statements of CIS Statcommittee structured according to special rules under the Grant Agreement with International Bank for Reconstruction and Development for the period from 1 April 2016 to 31 December 2018 1. General Information In accordance with Grant Agreement No. TF-019222 signed on 24 June 2015 and the Supplementary Grant Agreement signed on 20 April 2017 between the International Bank for Reconstruction and Development (hereinafter, the IBRD) and the Interstate Statistical Committee of the Commonwealth of Independent States (hereinafter, CIS Statcommittee) for the upgrade of statistical infrastructure in CIS and development of a web portal for CIS Statcommittee (hereinafter, the Project), CIS Statcommittee is the Administrator of the Grant funds in the amount of 1 400 000,00 US dollars. The Interstate Statistical Committee of the Commonwealth of Independent States is a legal entity established in the form of inter-state entity, pursuant to the Regulation issued and affirmed by Board of Heads of Government of the Commonwealth dated April 12, 1996. It was included into the Uniform State Register of Legal Entities dated 13 November 2002 under basic state registration number 1027700427534. The objective of the Project is to improve the statistical infrastructure in the CIS and develop a web portal for CIS Statcommittee. Activities under the Project include the following: * Engaging a company to develop a web portal for the Statcommittee under a contract for the supply of relevant software, provision of rights to use the software, training and other accompanying services; * Arranging for discussions among the stakeholders and training the statistics personnel in the CIS countries as part of workshops and working meetings; * Arranging for discussions and workshops for stakeholders in order to broaden the knowledge and skills of the statistics personnel in the CIS countries and disseminate new methods; * Provision of sub-grants for CIS countries to be able to take part in such workshops and meetings. It had been envisaged that all the Grant funds in the amount of 1 400 thousand US dollars should have been paid by 30 June 2018; in a letter dated 20 April 2017 the Bank confirmed its consent to extend the Grant up to 31 May 2020. All the Grant funds are special-purpose and should be used as described in the budget set out in Section III (par. 3.01) of the Grant Agreement and for the purposes referred to therein. In accordance with the Grant disbursement budget (Grant Procurement Plan), CIS Statcommittee shall: * purchase goods and services under the existing contract No. CIS- STAT_ICB-1 for the development of a web portal aimed at upgrading the statistical infrastructure in the CIS; * conduct audits of Grant funds disbursement; * purchase consulting services; * provide Sub-Grants to the statistical agencies in CIS countries participating in the project. The Grant Agreement further provides for financing the operating expenses. Contract No. CIS-STAT_ICB-1 dated 5 September 2017 for the provision of services involving the upgrade of the statistical infrastructure in CIS and development of a web portal for CIS Statcommittee was concluded with 000 Systematica. As of 31 December 2018, the Grant funds were used to pay an advance payment and payment for the goods and services delivered in the amount of 620 475,01 US dollars as per the terms and conditions of Contract No. CIS- STAT_ICB-1. Payment for consulting services, including the allocations to extra-budgetary funds, amounts to 39 741,29 US dollars. The "Operating Expenses" section of the Procurement Plan includes payment of banking fees for the total of 2 047,11 US dollars and payment for equipment supplied (touchscreen LED-panel and accessories) under Contract CIS-STAT_SH- 01 dated 27 September 2018 for the total of 6 650,00 US dollars. No Sub-Grants were provided to statistical agencies in CIS in the reporting period. 2. Accounting policies The financial statements were prepared using the cash basis of accounting as required by IBRD. These financial statements were prepared in US dollars, unless specified otherwise. Cash flow transactions are translated into US dollars at the exchange rate established by the Russian Central Bank at the date of the transaction. 3. Summary of Sources and Uses of Funds with the Expenditure Detail Financing from the IBRD Grant proceeds represents the amount of the original deposit transferred from the Grant Account to the Special Account in USD, funds received on the basis of Statement of Expenditures (SOE) presented to the IBRD in the reporting period. 4. Statement of Expenditures (SOE) SOEs are required to confirm eligible use of funds for the Project purposes under the Gtant Agreement. They are submitted to the IBRD together with applications for withdrawal of the Project funds. Information about expenditures documented by SOE is in the Report "SOE Withdrawal Schedule for the period from April 01,2016 to December 31, 2018" It needs to be noted that application # TF-019222 included in this report contains expenses made after the reporting date in 2019, their total amount being 2 207, 72 US dollars (including consulting fees of 2 160,70 US dollars and banking fees of 47,02 US dollars). 5. Special Grant Account Special-purpose US dollar account No. 40807840300000045083 was opened with PAO VTB of the Russian Federation under the Grant Agreement. Considering that payment for the services provided by Russian suppliers is made in Russian rubles, the major part of funds from the special-purpose account is converted by VTB Bank into Russian rubles. After the conversion, funds in Russian rubles are transferred to a special ruble account. 6. Special Grant Account in Rubles Special-Purpose Grant Account in rubles No. 40807810000000045083 was also opened with the Moscow branch of PAO VTB. Funds of the World Bank converted from US dollars into Russian rubles are debited to this account from the Special-Purpose Project Account and are used to pay for the goods, work and services under the contracts concluded as part of the Project. Detailed information on the Grant cash flows and balances of accounts at 31 December 2018 is presented in the Special Account Statement as December 31,2018. Chairman of CIS Statcommittee okolin June / , 2019 In the given Auditor's Report sealed nd s numbered (A w/ Deputy General Director f Audit Head of Aup a Ft§nt Gazaryan A,.V.