MInD1.X rASt roNtTiI APRICA rt'iAluCr 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 Year Ended December 31, 2016 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 I leritage 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 Heritage and Urban Development Project) Notes to the Financial Statements/ Project Expenditures 6-9 MENAF milni VA*-t NE1TIt AFRICA FINAWCF 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 year ending and cumulatively as at December 31, 2016. 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, 2016. 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 opinon: (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 Projectfor the year ending December 31, 2016 and showing cumulative balances as at December 31, 2016 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 ie. expenditures reimbursed on the basis of Statements of Expenditures can be relied upon to support the related withdrawals as of December 31, 2016; (c) The project was in all material respects in compliance with the laws, regulations, guidelines and provisions governed by the Loan agreement. May 17, 2017 MENAF Jihad Anouti Managing Partner Council for Development and Reconstruction Cultural Heritage and Urban Development Project - Additional Financing, Loan 8137 LE Financial Statements 31 December 2016 4 Statement of Special Account (8137 LE) Note USD Balance as ofJanuary 1, 2016 1,577,878 Add: World Bank replenishments 4,675,218 Direct Payment 65,520 Deduct: Payments for project expenditures funded by the loan: Works, Goods and Equipment, Consultant's Services 3 (5,024,942) (5,024,942) Balance December 31, 2016 1,293,673 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 31 December 2016 Statement of Project Expenditures Note USD Works, Goods and Services 3 5,024,942 5,024,942 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 31 December 2016 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 Un.an 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 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. 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 areJanuary 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. 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 31 December 2016 7 3. Details of Expenditures Expenditures paid from the Additional Financing for the Cultural I leritage and Urban Development Special account and direct payments paid during the year 2016 are detailed as follows: Gesco~.n ainnde afeome lean proG roccPHAEs Contractor's Name DescriptionAmutfncefrmlnpocd Works, Goods and Services Building Facades and Parkig m6 Al Bonan Engmnenng and Contractmn Baalbeck Old City Phase 2 - lot 1 1.02,081 Nabil h anu Archiect P'lanner 5,350 Ba2lbak and Tyr archeological Gesco and atcher jean Loup project PHASE 1 949,150 Comp Works for the Rch of abo ah M.A. contractmng and tradmng Est River and Tnpolh old eity 764,466 Copy Tech Purchase of Plhotocopy Machmne 14,830 Children and Youth Development for Khan El Askar Cormunity and Enjaz Lebanon Development project 36,(KX) Production for Documentary film Vantascope Production for CHUD Project 69,035 Michel Labban financial Officer 3.210 Lana Shhade Archeological program officer 3,014 Complementary Works for the Rchabilitation of Abou Ali River MA. contracting and trading Est Banks in Tripoli Old City 44.370 loseph Gaouch Municipal Engneer in Byblos 4.066 Maher Bakir MIU-Procurement/c specialist 5,350 Ahmad El Meshed Municipal Engineer in Tripoli 4,013 Adnan Khanfour Municipal Engnneer in Baalbak 4,013 Municipal Engineer in NidalShhayeb Baalbak/Saida and Sour 4.013 Consultation and reaserch institute Opening Survey 65,7(X) )ean Yasnn PlU/DGA Project Manager 5,350 1-21ADeghayli Procurement Specialist 4.60) Supervision of Bawabe Square in RaficKhoury 3 IYR 23,432 Women Capacity Building and Souk Al tayeb Income Gencration 36,0X00 Middle East Development Co.Sal Supply of 2 water tank trucks 1017() UDC Rehabilitation of Bybos Old City 861,686 Rehabilitation of Bawabe Square Ward 2 and Parking in Tyr - Phase 3 547,993 Amount paid from special account 4,959,422 Direct Payment Payments io Dr. David Thrsby Dr David Throsby for the assessment of the economic impact of the cultural hentage and 65,520 urban deveopment project Direct Payment 65,520 Total 5,024,942 Council for Development and Reconstruction Cultural Heritage and Urban Development Project - Additional Financing- Loan 8137 LE Financial Statements 31 December 2016 4. S.O.E Withdrawals During the Year 2016 Withdrawal Works, Goods and Services USD 27 78,731 28 9,450 31 121,044 43 36,000 S.O.E withdrawals 31.12.2016 245,225 5. Cumulative Statement of Special Account The cumulative drawings and payments made in this account since inception up to December 31, 2016 are 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 Payments for project expenditures funded by the Loan: Works (10,432,146) Consultants' services and training (269,124) (10,701,270) Balance - December 31, 2016 1,293,673 Council for Development and Reconstruction Cultural Heritage and Urban Development Project - Additional Financing- Loan 8137 LE Financial Statements 31 December 2016 9 6. Cumulative Statement of Project Expenditures USD Works, Goods and Services 21,237,164 21,237,164