"Electricity Supply Accountability and Reliability Improvement Project" Grant No. H972-KG, Credit No. 5515-KG Special purpose project financial statements for the year ended December 31, 2017 and independent auditors' report "ELECTRICITY SUPPLY ACCOUNTABILITY AND RELIABILITY IMPROVEMENT PROJECT" GRANT NO. H972-KG, CREDIT NO. 5515-KG TABLE OF CONTENTS Page STATEMENT OF MANAGEMENT'S RESPONSIBILITIES FOR THE PREPARATION AND APPROVAL OF THE SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2017 2 INDEPENDENT AUDITORS' REPORT 3-5 SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2017: Statement of cash proceeds and disbursements 6 Statement of uses of funds by project components 7 Notes to the special purpose project financial statements 8-19 STATEMENT OF MANAGEMENT'S RESPONSIBILITIES FOR THE PREPARATION AND APPROVAL OF THE SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2017 The following statement, which should be read in conjunction with the independent auditors' responsibilities stated in the independent auditors' report, is made with a view to distinguish the respective responsibilities of management and those of the independent auditors in relation to the special purpose project financial statements of the Project "Electricity supply accountability and reliability improvement project", Grant No. H972-KG and Credit No. 5515-KG (the "Project"). The Project Management is responsible for the preparation of the special purpose project financial statements that present fairly, in all material respects, the statement of cash proceeds and disbursements and the statement of uses of funds by project components of the Project for the year ended December 31, 2017 in accordance with International Public Sector Accounting Standard "Financial Reporting Under the Cash Basis of Accounting" (the "IPSAS") issued by the International Public Accounting Standards Board of the International Federation of Accountants and the World Bank's Financial Management Sector Board's "Guidelines: Annual Financial Reporting and Auditing for World Bank Financed Activities" (the "WB Guidelines"). In preparing the special purpose project financial statements, management is responsible for: • selecting suitable accounting policies and applying them consistently; • making judgments and estimates that are reasonable and prudent; • stating whether IPSAS and WB Guidelines have been followed, subject to any material departures disclosed and explained in the special purpose project financial statements; and • preparing the special purpose project financial statements on a going concern basis, unless it is inappropriate to presume that the Project will continue its activity for the foreseeable future. Management is also responsible for: • designing, implementing and maintaining effective and sound system of internal control and for revealing risks in system of internal control in the Project; • 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 IPSAS and WB Guidelines; • compliance with laws and regulations of the Kyrgyz Republic, accounting system of the Project and the requirements of the World Bank; • taking such steps as are reasonably available to them to safeguard the assets of the Project; and • detecting and preventing fraud and other irregularities. The special purpose project financial statements for the year ended December 31, 2017 were approved and authorized for issue on May 4, 2018 by the management of the Project. May 4, 2018 May 4, 2018 Bishkek, the Kyrgyz Republic Bishkek, the Kyrgyz Republic 2 103 lbraimova str. T: + 996 (312) 90 05 05 ~AKER TILLY BC "Victory", 7th floor F: + 996 (312) 91 05 05 Bishkek, 720011 contact@bakertilly.kg BISHKEK Kyrgyz Republic www.bakertilly.kg INDEPENDENT AUDITORS' REPORT To the management of the Project "Electricity supply accountability and reliability improvement project" under the Open Joint-Stock Company "Severelectro": Opinion We have audited the special purpose project financial statements of the Project "Electricity supply accountability and reliability improvement project" (the "Project") which comprise the statement of cash proceeds and disbursements and the statement of uses of funds by project components for the year ended December 31, 201 7, and a summary of significant accounting policies and other explanatory information (the "special purpose project financial statements"). In our opinion, the accompanying special purpose project financial statements present fairly, in all material respects, cash proceeds and disbursements and uses of funds by project components of the Project for the year ended December 31, 201 7 in accordance with International Public Sector Accounting Standard "Financial Reporting Under the Cash Basis of Accounting" (the "IPSAS") issued by the International Public Sector Accounting Standards Board of the International Federation of Accountants, and the World Bank's Financial Management Sector Board's "Guidelines: Annual Financial Reporting and Auditing for World Bank Financed Activities" (the "WB Guidelines"). Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs ). Our responsibilities under those standards are further described in the Auditor's responsibilities for the special purpose project financial statements section of our report. We are independent of the Project in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the special purpose project financial statements, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IE SBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of matter Without qualifying our opinion, we draw attention to Note 2 to the special purpose project financial statements which describe the basis of accounting. These special purpose project financial statements were prepared for complying with the appropriate World Bank Guidelines and Financing agreement requirements. Other matter The special purpose project financial statements are prepared to assist the Project to comply with the requirements of the World Bank. As a result the special purpose project financial statements may not be suitable for another purpose. 3 Responsibilities of management and those charged with governance for the special purpose project financial statements Management is responsible for the preparation and fair presentation of the special purpose project financial statements in accordance with International Public Sector Accounting Standard "Financial Reporting Under the Cash Basis of Accounting" (the "IPSAS") issued by the International Public Accounting Standards Board of the International Federation of Accountants, and the World Bank' s Financial Management Sector Board' s "Guidelines: Annual Financial Reporting and Auditing for World Bank Financed Activities" (the "WB Guidelines"), 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. Auditor's responsibilities for the audit of the special purpose project financial statements Our objectives are to obtain reasonable assurance about whether the special purpose project 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 ISAs 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 the special purpose project 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 the special purpose project 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 Project's internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management's 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 Project' 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 special purpose project 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 Project to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the special purpose project financial statements, including the disclosures, and whether the special purpose project financial statements represent the underlying transactions and events in a manner that achieves fair presentation. 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 our audit. 4 We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. Kubat Alymkulov Certified accountant, FCCA Certificate of auditor of the Kyrgyz Republic No. A 0069 Audit Director, Baker Tilly Bishkek LLC "Baker Tilly Bishkek" LLC, License Series A No. 0049 issued by the State Committee on Review and Regulation of the financial market of the Kyrgyz Republic May 4, 2018 Bishkek, the Kyrgyz Republic 5 "ELECTRICITY SUPPLY ACCOUNTABILITY AND RELIABILITY IMPROVEMENT PROJECT" GRANT NO. H972-KG, CREDIT NO. 5515-KG STATEMENT OF CASH PROCEEDS AND DISBURSEMENTS FOR THE YEAR ENDED DECEMBER 31, 2017 (in US dollars) Notes For the year Cumulative For the year Cumulative ended ended December 31, December 31, 2017 2016 Opening balance 4 340,655 Funds received Grant No. H972-KG 5 6,515,781 10,166,567 3,650,786 3,650,786 Credit No. 5515-KG 5 4,604,661 4,604,661 Total funds received 11,120,442 14,771 ,228 3,650,786 3,650,786 Other income 6 10,553 15,177 4,624 4,624 Total receipts 11 ,130,995 14,786,405 3,655,410 3,655,410 Project expenses Goods 7 2,200,003 4,559,618 2,359,615 2,359,6 15 Works 7 8,375,592 9,22 1,592 846,000 846,000 Consultants' services 7 67,278 131,946 64,668 64,668 Operating costs 7 57,956 102,138 44,182 44,182 Total project expenses 10,700,829 14,015 ,294 3,314,465 3,314,465 Other expenses 1,336 1,598 262 262 Foreign exchange rate (gain)/loss (149) (121) 28 28 Closing balance 4 769,634 769,634 340,655 340,655 Zayn v . Financi management consultant May 4, 2018 May 4, 2018 Bishkek, the Kyrgyz Republic Bishkek, the Kyrgyz Republic The notes on pages 8- 19 fom1 an integral part of the special purpose project financial statements. The independent auditors' report is on pages 3-5. 6 "ELECTRICITY SUPPLY ACCOUNTABILITY AND RELIABILITY IMPROVEMENT PROJECT" GRANT NO. H972-KG, CREDIT NO. 5515-KG STATEMENT OF USES OF FUNDS BY PROJECT COMPONENTS FOR THE YEAR ENDED DECEMBER 31, 2017 (in US dollars) For the year Cumulative For the year Cumulative ended ended December 31, December 31, 2017 2016 Component 1: Distribution infrastructure strengthening 10,575,595 13,78 1,210 3,205,615 3,205,615 Component 2: Customer service and corporate management system Component 3: Institutional strengthening and project implementation support 125,234 234,084 108,850 108,850 10,700,829 14,015,294 3,314,465 3,314,465 Kadyrkulov I. Zaynalo General Director of OJ Financial management consultant May 4, 2018 May 4, 2018 Bishkek, the Kyrgyz Republic Bishkek, the Kyrgyz Republic The notes on pages 8-19 form an integral part of the special purpose project financial statements. The independent auditors' report is on pages 3-5. 7 "ELECTRICITY SUPPLY ACCOU NTABILITY AND RELIABILITY IMPROVEMENT PROJECT" GRANT NO. H972-KG, CREDIT NO. 5515-KG NOTES TO THE SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2017 (in US dollars) 1. GENERAL INFORMATION According to the Financing Agreement between the Kyrgyz Republic and the International Development Association (the "IDA") signed on April 7, 2015, the IDA provided a Grant No. H972- KG in amount of 7,300,000 Special Drawing Rights and Credit No. 5515-KG in amount of 8,900,000 Special Drawing Rights to the Kyrgyz Republic. According to the decree No.606-p of the Government of the Kyrgyz Republic dated December 11 , 2015 in order to implement Financing Agreement between the Kyrgyz Republic and the International Development Association (the "IDA") signed on April 07, 2015 in Bishkek ratified by the Law of the Kyrgyz Republic No.158 dated July 14, 2015, the Ministry of Finance of the Kyrgyz Republic was instructed to provide IDA funds in amount of 16,200,000 Special Drawing Rights, which is equivalent to 25,000,000 US dollars, in the form of loan to OJSC "Severelectro" for the implementation of the "Electricity supply accountability and reliability improvement project". The Grant and Credit were provided for the Project "Electricity supply accountability and reliability improvement project" (the "Project"). Effective date of the Project is December 29, 2015, initial financing was provided to the Project on June 2, 2016 in the form of advance. Project completion date is December 31, 2019. Project purpose The objective of the Project is to improve the reliability of electricity supply by OJSC "Severelectro" (the "Company") and strengthen the governance of the Company's operations. The Project comprises the following components: Component 1: Distribution infrastructure strengthening; Component 2: Customer service and corporate management system improvement; Component 3: Institutional strengthening and project implementation support. Component 1: Distribution infrastructure strengthening This component will help to reduce technical losses and improve power supply reliability by supporting investments that strengthen the distribution infrastructure of the Company. The scope of this component is defined based on Company's five year investment plan, which identifies a comprehensive set of investments in high-, medium- and low- voltage cables, overhead lines, substations, power transformers, circuit breakers, meters and other assets of the power distribution infrastructure operated by the Company. The plan includes investments in new assets to eliminate overloads, as well as rehabilitation and upgrading of existing assets. 8 Component 2: Customer service and corporate management system improvement This component will provide the Company with management information tools to improve quality of services provided to its customers (electricity supply and commercial matters), and to enhance overall efficiency, transparency and accountability of its performance in all business areas. To that end, the component will finance supply, installation and commissioning of the Management information systems (the "MISs") and training of the Company's staff to apply them. The MISs will be set-up company-wide and will cover all three key areas of the Company's operations: commercial function, corporate management, and power network planning and operations. The incorporation of the MISs will be accompanied by reengineering of relevant business processes of the Company in all key areas, aimed to maximize the use of functionalities provided by the new management tools, make the company operations more customer-oriented and efficient, and their execution transparent and accountable, both internally and to external stakeholders. Component 3: Institutional Strengthening and Project Implementation Support This component will support two key activities for the smooth implementation of the project and sustainability of project outcomes: (i) implementation support for project management, including monitoring and evaluation of project results and incremental operating expenses of the PIU under the Company; and (ii) technical assistance to the Company to strengthen company-wide procurement and financial management capacity, improve the business processes of the Company and make it more customer-focused. The technical assistance will complement the incorporation of the relevant MISs, help to improve governance within the Company and include: (a) strengthening the institutional framework and performance related to corporate procurement functions; (b) strengthening the Company's capacity in accounting and financial management functions; (c) business process improvements related to the commercial management function of the Company to ensure customer- focused execution of all the commercial activities. Project management OJSC "Severelectro" is the implementing entity of the Project. The daily implementation of the Project is performed by Project Implementation Unit (the "PIU") of OJSC "Severelectro" based on Operation Manual. The staff of PIU was selected based on technical requirements approved by the World Bank. During implementation of the Project the PIU will attract appropriate experts from OJSC "Severelectro". 2. PRESENTATION OF THE SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTS Basis of preparation These special purpose project financial statements have been prepared in accordance with the International Public Sector Accounting Standard (the "IPSAS") "Financial Reporting under the Cash Basis of Accounting" issued by the Public Sector Committee of the International Federation of Accountants, and incorporate the following principal accounting policies, which have been consistently followed in all material respects and comply with the World Bank's Financial Management Sector Board's "Guidelines: Annual Financial Reporting and Auditing for World Bank Financed Activities" (the "WB Guidelines"). Under the cash basis approach income (or expenditure) is recognized when cash is received (or paid) irrespective of when goods or services are received or provided. The Project's approved budget disclosed by categories of expenses is not publicly available and as such comparison of budget and actual amounts is not presented. 9 These special purpose project financial statements consist of: • Statement of cash proceeds and disbursements; • Statement of uses of funds by project components; • Notes to the special purpose project financial statements, including short description of main statements of accounting policy and other descriptive notes. The reporting currency of these special purpose project financial statements is US dollars (the "USD"). 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash basis of accounting The special purpose project financial statements are prepared on a cash basis of accounting. The cash basis of accounting recognizes transactions and events only when cash (including cash equivalents) is received or paid by the Project. The special purpose project financial statements prepared under the cash basis provide readers with information about the sources of cash raised during the period, the purposes for which cash was used and the cash balances at the reporting date. The measurement focus in the special purpose project financial statements is balances of cash and changes therein. Foreign currency Operations in foreign currency initially are accounted in functional currency using the official currency exchange rate settled by commercial bank on a date of operation. Funds received are converted to US dollars (the "USD") at World Bank official exchange rate of Special Drawing Rights (the "SDR") on a date of receiving funds. All payments made in local currency are translated into USD at official exchange rate defined by commercial bank at the date of transaction. Monetary assets and liabilities expressed in foreign currency are converted to functional currency at official exchange rate on a date settled by commercial bank. All foreign exchange differences resulted from maturity or recounting are included in statement of cash proceeds and disbursements. Non-monetary items are valued according to their historic cost m foreign currency, which are recalculated on rates of the initial operation date. Cash and cash equivalents Cash and cash equivalents include cash on hand and due from banks, which can be converted to the corresponding amount of cash in the short term. Taxes Calculation and payment of personal income tax and social security contributions from income of local staff and consultants is made in accordance with the requirements and rates of the Tax Code of the Kyrgyz Republic and relevant legislation of the Kyrgyz Republic. Project expenses The expenses are recorded in the period when they were actually paid. 10 Sources of funds The funds were provided by the World Bank to the Project by advance, replenishment of designated account or through direct payment to the end supplier of goods and/or services. 4. CASH AND CASH EQUIVALENTS Cash and cash equivalents as at December 31, 2017 and 2016 comprise: Currency December 31, December 31, 2017 2016 Designated account of Grant No. H972-KG USD 155,915 336,300 Designated account of Credit No. 5515-KG USD 600,000 Transit account of Grant No. H972-KG KGS 1 Interest account USD 7,376 2,302 Tender account USD 3,359 1,269 Tender account EUR 120 Tender account KGS 2,864 783 769,634 340,655 11 5. FUNDS RECEIVED The funds received are presented by the following financing methods and sources of financing: For the year ended December 31, 2017 Cumulative Grant Credit Total Grant Credit Total No. H972-KG No. 5515-KG No. H972-KG No. 5515-KG Special commitment 1,262 ,144 1,262 ,144 Direct payments 4,782,981 4,004,661 8,787,642 5,899 ,223 4,004,661 9,903 ,884 Advance / Initial deposit 458 ,569 600,000 1,058 ,569 1,321 ,336 600,000 1,921 ,336 Replenishment of designated account ("DA") I Statement of expenditures ("SOE") 1,274,231 1,274,231 1,683 ,864 1,683 ,864 6,515,781 4,604,661 11 ,120,442 10,166,567 4,604,661 14,771,228 For the year ended Cumulative December 31, 2016 Grant Total Grant Total No. H972-KG No. H972-KG Special commitment 1,262 ,144 1,262 ,144 1,262 ,144 1,262,144 Direct payments 1,116,242 1,116,242 1,116,242 1,116,242 Advance / Initial deposit 862,767 862,767 862,767 862,767 Replenishment of designated account ("DA") I Statement of expenditures ("SOE") 409,633 409,633 409,633 409,633 3,650,786 3,650,786 3,650,786 3,650,786 12 6. OTHER INCOME Other income of the Project comprises of the following: For the year Cumulative ended December 31, 2017 Interest income 6,411 8,969 Sale of tender documents 4,142 6,208 10,553 15,177 For the year Cumulative ended December 31, 2016 Interest income 2,558 2,558 Sale of tender documents 2,066 2,066 4,624 4,624 13 7. PROJECT EXPENSES Project expenses on major categories are presented in the statement of cash proceeds and disbursements. Project expenses by components are presented in the statement of funds by project components. The breakdown of project expenses by sub-categories and sources of financing is presented as follows: Goods, works, non-consulting services, consultants' services, training and incremental operating costs for the project For the year ended December 31, 2017 Cumulative Grant Credit Total Grant Credit Total No. H972-KG No. 5515-KG No. H972-KG No. 5515-KG Goods 779,203 1,420,800 2,200,003 3,138,818 1,420,800 4 ,559,618 Works 5,791 ,731 2,583 ,861 8,375 ,592 6,637,731 2,583 ,861 9,221 ,592 Consultants' services 67,278 67,278 131 ,946 131 ,946 Operating costs: Payroll and related taxes 35,487 35,487 73,349 73,349 Audit expenses 9,520 9,520 9,520 9 ,520 Accounting software 1C 5,700 5,700 5,700 5,700 Advertising expenses 3,797 3,797 7,596 7,596 Stationery 392 392 1,493 1,493 Bank fees 4 4 647 647 Other 3,056 3,056 3,833 3,833 6,696,168 4,004,661 10,700,829 10,010,633 4,004,661 14,015,294 14 Goods, works, non-consulting services, consultants' services, training and incremental operating costs for the proj ect For the year Cumulative ended December 31, 2016 Grant Grant No. H972-KG No. H972-KG Goods 2,3 59,615 2,359,615 Works 846,000 846,000 Consultants' services 64,668 64,668 Operating costs: Payroll and related taxes 37,862 37,862 Advertising expenses 3,799 3,799 Stationery 1,101 1,101 Bank fees 643 643 Other 777 777 3,314,465 3,314,465 8. FINANCIAL POSITION Financial position as at December 31, 2017 and 2016 comprise: December 31, December 31, 2017 2016 ASSETS AND EXPENSES Cash and cash equivalents 769,634 340,655 Cumulative project expenses 14,015 ,294 3,314,465 Foreign exchange loss 28 Other expenses 1,598 262 TOT AL ASSETS AND EXPENSES 14,786,526 3,655,410 FINANCING Funds received 14,771 ,228 3,650,786 Foreign exchange gain 12 1 Other income 15,177 4,624 TOTAL FINANC ING 14,786,526 3,655 ,410 15 9. WITHDRAWAL APPLICATIONS Withdrawal applications for the year ended December 31 , 2017 comprise: Sources of financing No. Date Advance payments Direct payments Goods, works, non- Total consulting services, consultants' services, Training and Incremental Operating Costs for the Project Grant No. H972-KG 9* May 18, 2017 10 June 7, 2017 458 ,569 458 ,569 11 June 28 , 2017 230,850 230,850 12 June 28, 2017 143,654 143,654 13 August 2, 201 7 1,392,000 1,392,000 16 August 17, 2017 600,131 600,131 17 August 21, 2017 475,705 475 ,705 15 August 25 , 2017 224,000 224,000 14 August 28 , 2017 2,336,000 2,336,000 18 September 13 ,2017 524,872 524,872 23 November 15, 2017 130,000 130,000 26* December 18, 2017 458 ,569 4,782,981 1,274,231 6,515,781 * Withdrawal applications No. 9 and No. 26 under Grant No. H972-KG were provided as reports of spend funds for total amount of 521,335.14 US dollars and 214,226.26 US dollars, respectively. There were not requests for reimbursement of funds, as results no payments were made by World Bank. 16 Sources of financing No. Date Advance payments Direct payments Goods, works, non- Total consulting services, consultants' services, Training and Incremental Operating Costs for the Project Credit No. 5515-KG 19 October 2, 2017 800 ,000 800,000 20 October 3, 2017 399,500 399,500 21 October I 0, 2017 1,260,800 1,260,800 22 October I 0, 2017 298 ,393 298 ,393 24 November 21 , 2017 217,240 217,240 25 December 6, 2017 221 ,850 221 ,850 27 December 8, 2017 160,000 160,000 28 December 26, 2017 600,000 600,000 29 December 26, 2017 93 ,578 93 ,578 30 December 26, 2017 553 ,300 553 ,300 600,000 4,004,661 4,604,661 1,058,569 8,787,642 1,274,231 11 ,120,442 17 10. DESIGNATED ACCOUNT Designated account for the year ended December 31, 201 7 and 2016 comprise: Source offinancing Credit No. 5515-KG Grant No. H972-KG Bank "Optima Bank", OJSC "Optima Bank", OJSC Currency US Dollars US Dollars Bank account 1091528235570138 1091528235570138 Bank's location 493 Zhibek Zholu str., Bishkek, the Kyrgyz Republic Balance as at December 1, 2016 Advance / Initial deposit 862,767 Replenishment of DA / SOE 409,633 Total funds received to the designated account 1,272,400 Expenses paid 936,100 Balance as at December 31, 2016 336,300 Advance / Initial deposit 600,000 458 ,569 Replenishment of DA / SOE 1,274,23 1 Total funds received to the designated account 600,000 1,732,800 Expenses paid 671 ,183 Transferred to transit accounts 1,242,002 Balance as at December 31, 2017 600,000 155,915 11. UNDRAWN FUNDS As at December 31, 2017 undrawn funds are presented as follows: Grant Credit No. H972-KG No. 5515-KG inSDR inSDR Approved financing 7,300,000 8,900,000 Disbursed amount from June 2, 2016 to December 31, 2017 7,297,675 3,260,607 Undrawn amount 2,325 5,639,393 Grant Credit No. H972-KG No. 5515-KG inSDR inSDR Financing received as at January 1, 2017 2,679,752 Disbursed during 2017 4,617,923 3,260,607 Financing received as at December 31, 2017 7,297,675 3,260,607 18 12. COMMITMENTS In the normal course of activities, the Project concludes agreements with suppliers of goods and services in accordance with the established budget and procurement plan. As at December 31, 201 7 the Project had following commitments: Counterparty Contract No. Currency Contract Paid up to Remaining value December 31, amount to be 2017 paid Pestech & Speco Joint IDA-ESARIP-ICB-CW- Venture 2014-1 US dollars 8,850,243 8,099,204 751 ,039 "Er Ust" LLC IDA-ESARIP-ICB- 2014-3 Kyrgyz som 16,200,000 15,637,403 562,597 Ningbo Sanxing IDA-ESARIP-ICB- Medical & Electric Co 2014-8 LTD US dollars 1,600,000 1,580,800 19,200 "Estralin Power IDA-ESARIP-ICB-CW- Systems" LLC 2014-6 US dollars 3,995,000 399,500 3,595,500 "Baker Tilly Bishkek" IDA-ESARIP-LSC- LLC 2014-4 US dollars 38,080 9,520 28,560 Carlos Garsia Sposto IDA-ESARIP-IC-2016-3 US dollars 50,778 40,000 10,778 Jurgen Faullstich- IDA-ESARIP-IC-2016-1 Sallmann US dollars 57,944 10,339 47,605 Murod Sattarov IDA-ESARIP-CS-IC- 2014-1 US dollars 86,556 75,607 10,949 Veaceslav Sochin IDA-ESARIP-IC-2016-4 US dollars 23,944 6,000 17,944 Dmitry Shamanov IDA-ESARIP-IC-2016-7 US dollars 26,222 26,222 Askhat Kutmanov IDA-ESARIP-IC-2017-1 Kyrgyz som 186,000 132,092 53,908 13. LEGAL CASES There were no any legal cases related to the Project. 14. EVENTS AFTER THE REPORTING DATE During 2018 until the date of issue of these special purpose project financial statements no significant events or transactions occurred which should be disclosed in the special purpose project financial statements. 19