MENAF MtRIV VAITNORTI1 AFRICA "NANCE Financial Statements of Projects Funded By the International Bank For Reconstruction and Development - Loan #8137 LE (Additional Financing for the Cultural Heritage and Urban Development Project) And Auditor's Report Council for Development and Reconstruction June 20, 2017 Contents Page Independent Auditor's Report 3 Statement of Special Account of Projects Funded by the International Bank For Reconstruction and Development - Loan #8137 LE (Additional Financing for the Cultural Heritage and Urban 4 Development Project) Statement of Project Expenditures of Projects Funded by the International Bank For Reconstruction and Development - Loan #8137 LE (Additional Financing for the Cultural 5 Heritage and Urban Development Project) Notes to the Financial Statements/ Project Expenditures 6.9 MENA1F M~Iumu.m ca 1NUEaTn AFrnacA fl!*ce INDEPENDENT AUDITOR'S REPORT President Council for Development and Reconstruction World Bank Loan No. 8137 LE Cultural Heritage and Urban Development Project - Additional Financing 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, Loan #8137 LE for the period ending and cumulatively as at June 20, 2017. 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 as ofJune 20, 2017. 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 "Additional Financing for the Cultural Heritage and Urban Development 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 Additional Financing for the Cultural Heritage and Urban Development Project for the period ended June 20, 2017 and showing cumulative balances as at June 20, 2017 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 i.e. expenditures reimbursed on die basis of Statements of Expenditures can be relied upon to support the related withdrawals as of June 20, 2017; (c) The project was in all material respects in compliance with the laws, regulations, guidelines and provisions governed by the Loan agreement. June 30, 2017 MENAF Jihad Anouti Managing Partner Council for Development and Reconstruction Cultural Heritage and Urban Development Project - Additional Financing- Loan 8137 LE Financial Statements 20 June 2017 Statement of Special Account (8137 LE) Note USD Balance as of January 1, 2017 1,293,673 Add: World Bank replenishments . Direct Payment 4,312,730 Deduct: Payments for project expenditures funded by the loan: Works 3 (5,320,098) (5,320,098) Balance as of June 13, 2017 286,305 Transfer to WB 4 (286,305) Balance as ofJune 20, 2017 See accompanying notes to the financial statements. Council for Development and Reconstruction Cultural Heritage and Urban Development Project - Additional Financing- Loan 8137 LE Financial Statements 20 June 2017 Statement of Project Expenditures Note USD Works, Good and Services 3 5,320,098 5,320,098 See accompanying notes to the financial statements. Council for Development and Reconstruction Cultural Heritage and Urban Development Project - Additional Financing- Loan 8137 LE Financial Statements 20 June 2017 6 Notes to the Financial Statements 1. Project Background A LOAN #8137 LE (Additional Financing for the Cultural Heritage and Urban Development Project) for the amount of USD 27,000,000 was signed on August 9, 2012 between the International Bank for Reconstruction and Development and the Lebanese Republic (the borrower) for the purpose of providing additional financing for the original project "Cultural Heritage and Uran Development Project). The objective of the Project are o assist the borrower in: (a) creating the conditions for increased local economic development and enhanced quality of life in the historic centers of the cities of Baalback, Byblos, Saida, Tripoli and Tyre; and (b) improving the conservation and management of the country's cultural heritage. The table below sets forth categories of items to be financed out of the proceeds of the Loan under CDR's management (USD 27,000,000) and the allocation of the amounts of the loan to each category: Category USD Works, Goods and non-consulting Consultants' service and training services, Consultants' services and training and In. operating Costs 26,932,500 Front-end Fee 67,500 Interest Rate Cap 0 27,000,000 The front-end fee amounting to USD 67,500; being 0.25% of loan amount under CDR's management was settled to the Lender as of February 13, 2013 (the effective date) in the form of deduction from the loan proceeds booked in the accompanying statement of project expenditures. The Payment Dates are January 15 and July 15 in each year. The effectiveness Deadline is the date one hundred and eighty (180) days after the date on this agreement. The closing date for this Loan is December 31, 2016 as per the amendment signed on January 5, 2016, with a Grace period of four months. 2. Summary of Significant Accounting Policies 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 Cultural Heritage and Urban Development Project - Additional Financing- Loan 8137 LE Financial Statements 20 June 2017 7 3. Details of Expenditures Expenditures paid from the Additional Financing for the Cultural Heritage and Urban Development Special account and direct payments paid during the period ended 20 June 2017 are detailed as follows: Amount Contractor's Name Description financed from loan proceeds (100%) Works, Good and Services Infrastructure, Building facades and parking in Al Bonyan Engineering and Contracting SAlU. Baalbak old city phase 2 lot 1 273,187 The Supply of 4 high altitude operational boom lift Bazerji Motors SAL vehicles. 34,320 Assessment to the Economic Impact of the cultural Dr David Thorsby Heritage and Urban Development Project 21,780 Jesco Contracting Trading & Enterprising Atelier Jean Loup Bouvier Baalbak and Tyre archaeological project - Phase I 198,529 United Development and Contracting co Byblos old city -phase 3 234,428 The Rehabilitation of Bawabeh Square and parking- Water Resources and Development co SAlU. Tyre Phase 3. 443,104 Supply of 4 high altitude operational boom lift Bazerji Motors SAL vehicles 120,120 Assessment to the Economic Impact of the Cultural Dr. David Thorsby elritage and Urban Development Proicct 9,700 General Construction and Contracting SARL Saida old city phase 2 996,116 Jesco Contracting Trading & Enterprising Archer jean Loup Bouvier Baalbak and Tyre archaeological project phase I 433,064 United Development and Contracting co Byblos old city phase 3 153,205 Rehabilitation of Bawabeh square and parking of Water Resources and Development co SAMU Tyre phase 3 1,395,178 Amount Paid from Direct Payment 4,312,731 Special Account ARS PROGETTI SPA ARS Prolei 148,517 Consultation and research institute Opinion Survey 86,087 Environmental management plan in Baalbak, Byblos, ELARD SAL Saida, Trpoli andTyr 118,405 Ever East Mcd SAL Supply of data man software to DGA 100,869 Fantascope Production Fantascope production 36,341 Works for the rehabihitatLon of Abm u nirver in M.A contracting and trading Est. 2 Tnpoli old city 50,000 Midware Data system SAL Supply of data storage solution for the DGA 69,000 Someco International Supplyof skid steer loaders with boom attachment 69,300 Technomania SAL Supply of office equipment for the DGA 75,300 Ever East Med SAL Ever East Med SAL 17,800 Injaz Lebanon Injaz Lebanon Works for the rehahibitation of Abu Ali river in M,A contracting and trading Est. 2 Tripol ol city 204,448 Middle East Development Co SAL Supply of 2 water tank trucks middle east 11,300 Amount Paid from Special Accounts 1,007,367 Total Works, Good and Serices 5,320,098 Council for Development and Reconstruction Cultural Heritage and Urban Development Project - Additional Financing- Loan 8137 LE Financial Statements 20june 2017 4. Transfer to World Bank Subsequent to loan closing date, the remaining balance of special account at central bank for an amount of USD 286,305 was transferred to the World Bank on June 13, 2017. 5. S.O.E Withdrawals During the Year 2017 Withdrawal Works, Goods and Services USD 47 29,100 48 18,915 51 20,000 59 197,265 61 113,343 62 11,867 S.O.E withdrawals 20.6.2017 390,490 6. Cumulative Statement of Special Account The cumulative drawings and payments made in this account since inception up to June 13, 2017are detailed as follows: USD World Bank initial deposit 2,000,000 World Bank replenishments 9,994,943 Increase of the special account Interest earned 11,994,943 Deduct: Payments for project expenditures funded by the Loan: Works, Goods and Equipment, Consultants' services and training (11,708,638) (11,708,638) Balance - June 13, 2017 286,305 Transfer to WB (286,305) Balance - June 20, 2017 Council for Development and Reconstruction Cultural Heritage and Urban Development Project - Additional Financing- Loan 8137 LE Financial Statements 20 June 2017 7. Cumulative Statement of Project Expenditures USD Works, Goods and Services 26,557,262 26,557,262