EUROPE AND CENTRAL ASIA REGION CAPACITY
DEVELOPMENT TRUST FUND GRANT #TF018007 (ECAPDEV)
FOR THE PREPARATION OF REGIONAL ROADS
DEVELOPMENT PROJECT(RRDP)
INDEPENDENT AUDITOR'S REPORT AND
SPECIAL PURPOSE FINANCIAL STATEMENT
FOR THE PERIOD FROM 24 SEPTEMBER 2014 TO 31 OCTOBER
OF THE YEAR
I


CONTENT
INDEPENDENT AUDITORS' REPORT                                       1
SUMMARY OF SOURCES AND USES OF FUNDS                               5
STATEMENT OF EXPENDITURE DETAILS ON PROJECT COMPONENTS             6
1 PROJECT DESCRIPTION                                              7
2 ACCOUNTING POLICIES _
3 PRESENTATION OF FINANCIAL STATEMENTS                             8
4 RECONCILIATION OF ECAPDEV GRANT UNUSED FUNDS                     12


0 GrantThornton
An instinct for growth
AO 000 <<Grant Thornton>
Pecny6nLKa Ya6eKMCTaH,
100128, TaWKeHT,
yn. A6as. 1A
Ten.: +998 (71) 244-47-45/46
OaKc: +998 (71) 244-47-43
INDEPENDENT AUDITORS' REPORT                                             "Grant Thornton" AO LLC
1A, Abay Str.,
Tashkent, 100128,
Management of Republican Road Fund under                                 Republic of Uzbekistan
Ministry of Finance of the Republic of Uzbeldstan                        Tel.: +998 (71) 244-47-45/46
Fax: +998 (71) 244-47-43
We have audited the accompanying special purpose financial statements
(hereinafter the financial statements) of the Grant of Europe and
Central Asia Region Capacity Development Trust Fund (hereinafter-
ECAPDEV) for the preparation of "Regional Roads Development
Project"(hereinafter - RRDP), financed by the Grant agreement of
ECAPDEV Grant #TFO18007 dated of 24 September 2014 (hereinafter
- Agreement) for the period from 24 September 2014 to 31 October
2016. The financial statements include: "Summary of sources and uses of
funds", "Statement of expenditure details on project components",
"Summary of direct payments", "Special purpose balance sheet" and
notes to the special purpose financial statements.
The financial statements have been prepared by management of the Republican Road Fund under Ministry of
Finance of the Republic of Uzbekistan (hereinafter - RR$) on a cash basis, in accordance with International
Financial Reporting Standards for the Public Sector ( hereinafter - the IPSAS) issued by the International
Accounting Standards Board in the public sector, the International Federation of Accountants
Management 's Responsibilty for Financial Reporting
Responsibility for the preparation and fair presentation of these financial statements which are accordance with
IPSAS "Financial Reporting on Cash Basis of Accounting" are levied on the management of RRF. This
responsibility includes: designing, implementing and maintaining internal control system properly ensures the
preparation and fair provision of financial statements that are free from material misstatement, whether due to
fraud or error; as well as selecting and applying appropriate accounting policies.
Auditor   's Responsibiity
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our
audit in accordance with International Standards on Auditing (ISA). Those standards require that we comply
with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor's judgment, including the assessment of
therisks of material misstatement of the financial statements, whether due to fraud or error. In making those
risk assessments the auditor considers internal control relevant to the preparation and fair presentation of the
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 Project's internal control. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
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Opinion
In our opinion, the above stated Special Purpose Financial Statements give a true and fair view of the sources
and uses of the funds of Grant of ECAPDEV on preparation of "Regional Roads Development Project" for
the period from 24 September 2014 to 31 October 2016 and complies with conditions of Agreement and
IPSAS.
Moreover, (a) direct payments are confirmed by adequate supporting documentation; (B) the expenditures
comply with objectives stipulated in the Agreement.
Restricdon on Distribudon and Use
This report is intended solely for presentation of information and use by Management of the Republican Road
Fund under the Ministry of Finance of the Republic of Uzbekistan, and the World Bank, and cannot be used by
any third party o  iwajpovementioned.
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Grant ECAPDEV #TF018007 for the preparation ofProject "Regional Roads Development"            7
1 PROjECT DESCRIPTION
1.1.   Project
According to the Grant agreement of 24 September 2014, the International Bank for Reconstruction and
Development / International Development Association ("World Bank"), acting as administrator of grant funds,
provided by the Europe and Central Asia Region Capacity Building Development Trust Fund ("Donor") has
provided a recipient with a grant in an amount not to exceed four hundred thousand United States dollars (US
$ 400,000) ("Grant").
ECAPDEV Grant #TF018007 was provided for the preparation of "Regional Roads Development Project"
(the "Project").
By Grant Agreement the closing date was set September 30, 2015. According to the letter of the World Bank
on October 5, 2015, the closing date of Grant ECAPDEV is extended to June 30, 2016.
Disbursement deadline date for submitting withdrawal application for expenditures incurred before the closing
date is four months after the closing date - October 31, 2016.
12.     Objecdves and description of the project
The objectives of the Project is to: 1) improve the quality of the project preparation by mobilizing the relevant
consultants' services to review the deliverables; 2) Identify of priority activities to strengthen the institutional
capacity of regional road asset management; and 3) build capacity of PIU and the "Uzavtoyul".
The project consists of the following three components:
Part 1. Preparation of RRDP Appraisal Activities
Provision of consultants' services to: i) carry out and prepare necessary social and environmental assessments
and instrument for the RRDP; ii) carry out audit of project design documents; iii) carry out assessment of
institutional capacity and prepare terms of reference for safety capacity building; and iv) prepare baseline data
and the Project Operational Manual and a procurement plan for the RRDP.
Part 2: Capacity building and training
Provision of consultancy services and training for the PIU staff.
Part 3. Financial audit
Provision of consultants' services
1.3.   Budget and Financing
Special accounts for Grant proceeds were not opened in Uzbek sums (UZS) and in US dollars (USD) and no
cash receipts are made.
The project is fully financed by the Grant ECAPDEV NQ TF018007 for the preparation of the project,
includin taxes.
(1) Consulting services, Seminars and financial audit               400,000
Total                                                                  400,000


Grant ECAPDEV #TF018OO7 for the preparation of Project "Regional Roads Developnent"
Continuing operations
The date of completion of financing of the ECAPDEV Grant TF01 8007 for the preparation of the project is 31
October 2016.
2 ACCOIUNTING POLICIES
Basis of presentation of financial statements
Special purpose financial statements are prepared on the basis of International Financial Reporting Standards
for the Public Sector (IPSAS), "Financial Statements for the Cash Basis of Accounting".
The summary of "Sources and types of use of grant funds", "Statement of expenditure details on project
components", as well as "Special balance sheet" were prepared on a cash basis, and are in accordance with the
following principles.
Financing
Funding for the project is recognized in the following cases:
* when the payment is for suppliers, or consulting services are made when services are rendered by the
World Bank ( "direct payments" procedure).
Disbursement
Project costs are recognized as such and reflected in the financial statements prepared on a cash basis, in cases
when:
Reporting currency and exchange rate translation method
Since financing of Grant proceeds were carried out in US dollars, the financial statements are presented in US
dollars (USD), which is the functional and presentation currency of special purpose financial statements. Items
included in the special purpose financial statements are measured using functional currency.
3 PRESENTATION OF FINANCIAL STATEMENTS
The special purpose financial statements were prepared by the Project Implementation Unit (PIU) for the
"Regional Roads Development Project."
The special purpose financial statements for the reporting period have been prepared in accordance with IPSAS
on a cash basis, consisting of the following forms:
(1) Summary of sources and uses of funds.
*   In the period beginning from the financing the date till 31 December 2014 - no funding was
made;
*   In the period beginning from January 01 to December 31, 2015 financing expenditure was
made in the amount of 30 000 USD.;
*   In the period from January 01 to October 31, 2016 financing expenditure was made in the
amount of 322.040 USD.
The total amount of the Grant expenditures for the period from January 1, 2015 on October 31, 2016
amounted to 352,040 USD.


GrantECAPDEV #TFO180907for the preparation of Project "Regional Roads Development" 9
The total amount of the Grant expenditures for the period from January 1, 2015 on October 31, 2016
amounted to 352,040 USD.
Payments under the grant were made only through direct payment, no other methods of disbursement available
in the Disbursement Letter were used.
During the reporting period, a negative exchange rate difference was not formed.
(2) Details of expenditure in the context of the Grant components.
This report details the information on the costs of the reporting period in the context of the Grant components.
*   In the period beginning from the date of funding to date December 31, 2014 -- no funding
was made;
*  In the period from January 01 to December 31, 2015 was an expense of consulting services
(Part 1) in the amount of 30 000 USD;
*  In the period from 01 January to 31 October 2016 were the costs of consulting services (Part
1) in the amount of 282.480 USD, Training expenditure (Part 2) in the amount of 29.569 USD
and Audit (Part 3) in the amount of 9,991 USD. Total expenditure were made in the amount of
322.040 USD.
The total amount of funds by categories during the period from September 24, 2014 till October 31, 2016
amounted to 352.040 USD. The report provides information on the costs directly related to the ECAPDEV
Grant.


Grant ECAPDEV#TF0180O7for the preparation ofProject "'Regional Roads Development"  10
(3) The list of direct payments under the Grant.
Application                                                    Currency
Date               Expenses by category                       Total
number                                                       of payment
1-WA       26.10.2015  Consulting services in preparation of the project  USD  30000
Total for 2015                                                              30 000
2-WA       11.06.2016  Consulting services in preparation of the project  USD  19260
3-WA       28.03.2016  Consulting services in preparation of the project  USD  30120
4-WA       30.03.2016  Consulting services in preparation of the project  USD  12 840
5-WA       23.05.2016  Software expenses                          USD        18355
6-WA       02.06.2016  Consulting services in preparation of the project  USD  9135
7-WA       03.06.2016  Consulting services in preparation of the project  USD  32 100
9-WA       22.06.2016  Training expenses                           USD       21 980
10-WA      22.06.2016  Training expenses                          USD         7589
11-WA      23.06.2016  Software expenses                          USD        11 645
12-WA      23.06.2016  Consulting services in preparation of the project  USD  18630
13-WA      27.06.2016  Consulting services in preparation of the project  USD  57744
14-WA      11.08.2016  Consulting services in preparation of the project  USD  38 496
15-WA      09.09.2016  Finance audit                              USD         1 499
16-WA      05.10.2016  Consulting services in preparation of the project  USD  34155
17-WA      28.10.2016  Finance audit                              USD         8492
Total for 2016                                                             322 040
Grand Total                                                                 352 040
This report shows the amount of funds by category, which has been withdrawn from the Grant Account,
administered by WB under the procedure of "direct payments" for the period ended October 31, 2016.


Grant ECAPDEV #TF#18O07 for the preparation ofProlect "Regional Roads Development"       11
Amount ofPamn
Detilsof  Contractor     Subject of contract   contract in               Deliverables
contract                                             UD      contract in    Dlvrbe
USDD
US
Preparation of Environmental
RRDP/CQ-1, Almar      Impact Assessment,Social                          EIA, RPF, RAP and
dated    Consulting  Action Plan and RAP, to proceed  60 120  60 120  Grievance Redress
02.03.2015  LTD       with public disclosure and                      Mechanism are prepared
consultation with interested                     and publicly disclosed
stakeholders
To assist prepare Environmental
RRDP/CQ-2, Almar      Impact Assessment, to proceed                     EIA, RPF, RAP and
dated    Consulting  with public disclosure and  96 240      96 240   Grievance Redress
20.04.2016  LTD       consultation with interested                    Mechanism are prepared
stakeholders                                     and publicly disclosed
Detail design of the
project roads in
Individual  To provide technical assistance                   Tashkent region
Contract dated Consultant to the Project Management Unit                 reviewed, POM and
14.09.2015  Alexandra  (PMU) to improve the quality of  64200   64200       current road
Spernol    the project preparation                          management practices
and action plan for
improvement are
performed
FS and Design for
Fergana valley
Addendum #1 Individual  To provide technical assistance                   reviewed,Bidding
dated       Consultant to the Project Management Unit  62100    61 920      documents,
24.03.2016  Alexandra  (PMU) to improve the quality of                     Specification for
Spernol    the project preparation                             equipment and
Institutional component
activity are prepared
Central    Training on the use of innovative
RRDP/06,    Bohemia    technologies to improve the                      Certificates under the
dated       Bohemia    efficiency of construction,   21 980     21 980  training are provided
20.06.2016    niversity  maintenance and safety of
O]~5    roads.
Contract 144, 000 "Easy                                                  Training by Central
dated       Tour"      Airtickets for business trip   7 589      7 589  Bohemia University in
17.06.2016                                                                Prague provided
RRDP/SH-3,                                                              1 C Accounting software
dated       000 Fides Installation, development and  30000      30000 is installed and modified
05.05.2016  Solution   implementation of software                           according to
requirements of WB
RRDP/CQ-6, 000 Grant Financial Audit                  9 991      9 991  Independent auditor's
datedThrtn             FnnilAdt99991rpt
24.06.2016  Thornton                                                           report
Total                                               352 220    352 040


Grant ECAPDEV#TF018007for the preparation of Project "Regional Roads Development"       12
(4) Special purpose balance sheet
as atDctober31.2016'
Assets
Cash and cash equivalents
Designated account (USD)
Project cost                                                                       352 040
Total assets                                                                       352040
Accumulated funds
Financing
Grant funds                                                                        352 040
Total liabilities                                                                  352040
The Special balance sheet provides information about the use and funding sources of Grant for the preparation
of the "Regional Roads Development Project". Special balance sheet is drawn up on a cash basis and show:
*   by means of accumulation - the total amount of funds received from the funding of Grant
(ECAPDEV).
*   the balance sheet assets - payments made from Grant proceeds for the preparation of Regional Roads
Development Project.
Indicator "Project Expenditures" includes the amount of costs incurred for the preparation of the Regional
Roads Development.
4 RECONCILIATION OF ECAPDEV GRANT UNUSED FUNDS
Reconciliation of financial resources between the World Bank website at
htpl2/ /cienconnectionworldbank.org in the section Client Connection and Grant data on October 31, 2016 is
shown in the following table:
According to World Ba k website
(https://clientconnectionworldbank.org    By Grant data       Variance
Grant Funds 47 960 47 960-