Z 2a, Chust street, Tashkent, 100077, Uzbekistan 2 Tel/Fax: (998-71) 262-50-70, 262-50-90, 262-08-47 EE-mail: reception(ciar.uz; reception@ciarroup.net www.ciar.uz 1 IDA CREDIT No.5679-UZ "REGIONAL ROADS DEVELOPMENT PROJECT" INDEPENDENT AUDITOR'S REPORT ON SPECIAL PURPOSE FINANCIAL STATEMENTS FOR THE PERIOD FROM 28 OCTOBER 2016 TO 31 DECEMBER 2017 2 CONTENTS C O N TENTS ............................................................................................................................ 2 INDEPENDENT AUDITOR'SREPORT........................................................................................ 3 STATEMENT OF SOURCES AND USES OF FUNDS..................................................................... 5 STATEMENT OF USES OF FUNDS BY PROJECT CATEGORIES ................................................... 6 STATEMENTOF SOE E............................................................................................................. 7 BALANCE SHEET................................................................................ ........... 8 RECONCILIATION STATEMENT FOR THE BALANCE OF THE PROJECT'S ACCOUNTS................... 9 STATEMENT OF PROJECT'S USD DESIGNATED ACCOUNT...................................................... 10 STATEMENT OF PROJECT'S UZS DESIGNATED ACCOUNT .................................................... 11 NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS................................................. 12 1. PROJECT BACKGROUNO.UN.......................................................................................... 12 2. PROJECT ACCOUNTINGPOLICY ...........................PLC................................................... 13 3. PRESENTED FINANCIAL STATEMENTS .......................................................................... 15 4. CASHANDCASH EQUVALENTS .................................................................................... 16 5. FIX ED A SSETS ............................................................................................................. 17 6. PROJECT'S RETROACTIVE EXPENSES........................................................................... 17 7. STATEMENT OF EXPENDITURE (SOE) PROCEDURES....................................................... 18 8. PROJECTBUDGETPERFORMANCE ............................................................................... 18 9. BUDGET PERFORMANCE ON THE FINANCING THE PROJECT EXPENDITURESDISBURSEMENTS ....................................................................................... 19 10. CUMULATIVE EXPENDITURES ..................................................................................... 19 11. TAXES .......1..................... ........................................................................................ 19 12. STATEMENT OF PROJECT'S CO-FINANCING ACCOUNT ................................................... 20 3 INDEPENDENT AUDITOR'S REPORT To the Management of Regional Roads Development Project Implementation Unit under Republican Road Fund under the Cabinet of Ministers of the Republic of Uzbekistan We have audited the accompanying Special Purpose Financial Statements (hereinafter - Financial Statements) of the "Regional Roads Development Project" (hereinafter - Project) financed against the Financing Agreement of the International Development Association (hereinafter - IDA) and against budget funds of the Government of the Republic of Uzbekistan (hereinafter - Government, GOU), based on the provisions of the Financing Agreement No.5679-UZ dated 28 October 2016 (hereinafter - the Financing Agreement), for the period from 28 October 2016 to 31 December 2017. The Special Purpose Financial Statements comprise Statement of Sources and Uses of Funds, Statement of Uses of Funds by Project Categories, Statement of SOE, Balance Sheet, Reconciliation Statement for the Balance of the Project's Accounts, Project's Designated Accounts Statements for the period from 28 October 2016 to 31 December 2017, and a summary of significant accounting policies and other explanatory information (Notes to the Special Purpose Financial Statements). The Special Purpose Financial Statements have been prepared by the Regional Roads Development Project Implementation Unit under Republican Road Fund under the Cabinet of Ministers of the Republic of Uzbekistan (hereinafter - PIU) according to the International Public Sector Accounting Standards (hereinafter - IPSAS), based on the cash flow method, issued by the International Public Sector Accounting Standards Board of the International Federation of Accountants. Responsibility of the managers for drawing up financial statement The management of the PIU is responsible for preparation and fair presentation of these Special Purpose Financial Statements based on the cash flow basis in accordance with IPSAS. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the Special Purpose Financial Statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor's responsibility Our responsibility is to express an opinion on the accompanying Special Purpose Financial Statements based on our audit. We conducted our audit in accordance with International Standards on Auditing (ISA), published by International Federation of Accountants. Those standards require that we should follow ethical norms, plan and perform the aud t to obtain reasonable assurance that there is no incorrect or false data in the Special Purpose Financial Statements. Audit stipulates carrying out the procedures, which are aimed to get audit proofs as regards numeric data and information, contained in the Special Purpose Financial Statements. Choosing the procedures is based on auditor's professional judgment, including the estimation of risks of substantial misrepresenting of financial statement as a result of fraud or mistakes. In the process of estimation of above-mentioned risks, Auditor considers internal control system related to the preparation and authentic submission of financial statement of the organization to develop audit procedures, which are necessary in the present circumstances, but not to express opinion on the effectiveness of organization's internal control system. An audit also includes evaluating principles of accounting policies used and estimates made by the management, as well as evaluating the overall presentation of the Financial Statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 4 Auditor's opinion In our opinion, the above-stated Special Purpose Financial Statements give a true and fair view of the sources and uses of the "Regional Roads Development Project" funds for the period from 28 October 2016 to 31 December 2017 and complies with conditions of the Financing Agreement and IPSAS. Moreover, (a) with respect to SOEs, adequate supporting documentation has been maintained to support claims to the Association for reimbursement of expenditures incurred; and (b) the expenditures comply with objectives stipulated in the Financing Agreement No.5679-UZ. Basis of Accounting We draw attention to Note 2 to the Special Purpose Financial Statements, which describes the basis of accounting. The Special Purpose Financial Statements are prepared to assist the Project to comply with the financial reporting provisions on the requirements conditions of the Financing Agreement and IPSAS, As a result, the Special Purpose Financial Statements may not be suitable for another purpose. This audit report is only for information purpose and for internal use by IDA and the Government of the Republic of Uzbekistan, as well as the PIU, and should not be distributed to or used by other parties. Auditor: TSIAR-FINANS LLC 2A, Chust Street, 6 ' b/ /t Tashkent, 100077, Uzbekistan 31 May 2018 "Regional Roads Development Project IDA Credit No.5679-UZ 5 STATEMENT OF SOURCES AND USES OF FUNDS for the period from the 28 October 2016 to 31 December 2017 (USD) Cumulative Indicator Note Actual 2017 Actual 2016 from the beginning of the Project Financing IDA Funds Replenishment to Project USD Designated 3, 7 0,00 300 000,00 300 000,00 Account Total IDA Funds 0,00 300 000,00 300 000,00 Government Funds GOU counterpart financing in cash 3,12 24 379,96 18 576,72 42 956,68 Total Government Funds 24 379,96 18576,72 42 956,68 Total on direct financing 24 379,96 318 576,72 342 956,68 TOTAL FINANCING 24 379,96 318 576,72 342 956,68 Expenses Direct Financing Funds 1. Rehabilitation of Regional Roads 0,00 0,00 0,00 2. Road sector Institutional Strengthening 0,00 0,00 0,00 3. Project Management 3 145 223,30 128 465,73 273 689,03 4. Unallocated 0,00 0,00 0,00 Total 3 145 223,30 128 465,73 273 689,03 TOTAL EXPENSES 145 223,30 128 465,73 273 689,03 Excess of Receipts over Payments (120 843,34) 190 110,99 69 267,65 Opening Balance Project's UZS Designated Account 371,99 0,00 Project's USD Designated Account 189 739,00 0,00 Total 4 190 110,99 0,00 Net Available Funds 69267,65 190 110,99 69267,65 Closing Balance Project's UZS Designated Account 1 068,65 371,99 1 068,65 Project's USD Designated Account 68 199,00 189 739,00 68 199,00 Total 4 69 267,65 190 110,99 69 267,65 Signed by management on 07 May 2018 N. A. Fayzullaev M. F. 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(р � �� 6] пi О аэ п! аи й� V ГС � р д'� _ П% �с5 О U. О_ +.. �� � - � й � �� U � � �О � � 4i 4а 4} �',�. П3 'С7 S] . С? гiЭ R5 ' OU � LC ��, .а? � ��Е а � �а � j 1 4 �7 с � Ш � � си � � а � � 7 р � � � � з �� �� Nгл � �r i�.� � vз га: йс� "Regional Roads Development Project," IDA Credit No.5679-UZ 7 STATEMENT OF SOE for the period from the 28 October 2016 to 31 December 2017 (USD) No. of Withdrawal Application Amount Category application 3. Project Management WA-1* 300 000,00 300000,00 Total 300000,00 300000,00 WA-1 submitted to IDA to receive Advance Payment Signed by management on 07 May 2018 N. A. Fayzullaev M. F. Sattorova PJU Director Accounting specialist of PlU Statement of SOE is to be read in conjunction with Notes (Pages from 12 to 20) thereto forming an integral part of the Special Purpose Financial statements. "Regional Roads Development Project" IDA Credit No.5679-UZ 8 BALANCE SHEET for the period from the 28 October 2016 to 31 December 2017 (USD) Indicator Note as at 31 December as at 31December 2016 2017 ASSETS Cash and cash equivalents 4 190 110,99 69267,65 TOTAL ASSETS 190 110,99 69267,65 U FUNDING IDA financing 3 300 000,00 300 000,00 p GOU financing 3 18576,72 48 567,34 Project cumulative expenditures 10 (128 465,73) (279 299,69) TOTAL FUNDING 4 190110,99 69267,65 M M M N N Signed by management on 07 May 2018 N. A. Fayzullaev M. F. Sattorova PlU Director Accounting specialist of PIU Balance Sheet is to be read in conjunction with Notes (Pages from 12 to 20) thereto forming an integral part of the Special Purpose Financial statements. N m "Regional Roads Development Project IDA Credit No.5679-UZ 9 RECONCILIATION STATEMENT FOR THE BALANCE OF THE PROJECT'S ACCOUNTS for the period from the 28 October 2016 to 31 December 2017 (USD) Indicator Note 2017 2016 Current cash balance on the Project Designated Accounts Opening Balance according to the Balance Sheet 4 190 110,99 0,00 Financed by IDA to USD Designated Account of the Project 0,00 300 000,00 Expenditures incurred on the Project from Designated Accounts (120 843,34) (109 889,01) Current cash balance on the Project Designated Accounts 3 69267,65 190110,99 Closing Balance according to the Balance Sheet Current cash balance on the Project Designated Accounts 4 69267,65 190110,99 Closing Balance according to the Accounts Difference 0,00 0,00 Signed by management on 07 May 2018 N. A. Fayzullaev M. F. Sattorova PIU Director Accounting specialist of PIU Reconciliation Statement for the Balance of the Project's Accounts is to be read in conjunction with Notes (Pages from 12 to 20) thereto forming an integral part of the Special Purpose Financial statements. N U "Regional Roads Development Project" IDA Credit No.5679-UZ 10 STATEMENT OF PROJECT'S USD DESIGNATED ACCOUNT for the period from the 28 October 2016 to 31 December 2017 Account No: 2021 0840 9004 9184 8001 Depositary bank: National Bank of Uzbekistan Address: 101, A.Temur street, Tashkent, Uzbekistan Related Credit 5679-UZ Currency: USD USD Balance as at 24 December, 2016 (account opening date) 0,00 Inflow: IDA Financing 300 000,00 Total inflow: 300 000,00 Outflow: Sale of foreign currency 231 790,00 Expenses on related categories 11,00 Total Outflow: 231 801,00 Balance as at December 31, 2017 68199,00 U Signed by management on 07 May 2018 N. A. Fayzullaev M. F. Sattorova PIU Director Accounting specialist of PIU Statement of Project's USD Designated Account is to be read in conjunction with Notes (Pages from 12 to 20) thereto forming an integral part of the Special Purpose Financial statements. H "Regional Roads Development Project" IDA Credit No. 5679-UZ STATEMENT OF PROJECT'S UZS DESIGNATED ACCOUNT for the period from the 28 October 2016 to 31 December 2017 Account No: 2021 0000 8004 9184 8001 Depositary bank: National Bank of Uzbekistan Address: 101, A.Temur street, Tashkent, Uzbekistan Related Credit 5679-UZ Currency: UZS USD 000' UZS Balance as at 28 October, 2016 85 23 712,11 Inflow: Proceeds from sale of foreign currency 231 790,00 937 210,98 Total Inflow: 231 790,00 937 210,98 Outflow: Retroactive Project costs before the date of first IDA disbursement 7241,40 23400,44 Expenses on related categories 145626,12 653549,92 Reimbursement of retroactive costs to the Uzbekistan Road Fund 85 191,68 275295,21 Total Outflow: 230 817,80 928 845,13 Balance as at December 31, 2017 1 068,65 8677,52 N N N N Signed by management on 07 May 2018 N. A, Fayzullaev M. F. Sattorova PiU Director Accounting specialist of PlU Statement of Proect's UZS Designated Account is to be read in conjunction with Notes (Pages from 12 to 20) thereto forming an integral part of the Special Purpose Financial statements. "Regional Roads Development Project" IDA Credit No.5679-UZ 12 NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS for the period from the 28 October 2016 to 31 December 2017 1. Project background On June 23, 2015 the Board of Directors of the World Bank (hereinafter - WB, Bank) has approved the financing of the "Regional Roads Development Project" (hereinafter - Project).On October 28, 2016 the International Development Association(hereinafter - IDA, Association) and Republic of Uzbekistan have signed the Financing Agreement and IDA lent to Uzbekistan Credit No.5679-UZ to facilitate implementation of "Regional Roads Development Project" for the amount 145 million Special Drawing Rights (hereinafter - SDR) which is USD 200 million. Pursuant to the Sub-lending Agreement dated December 2, 2016 and signed between the Ministry of Finance on behalf of the Republic of Uzbekistan and Republican Road Fund under the Cabinet Ministry of Republic of Uzbekistan (hereinafter - Road Fund) the whole amount was sub-lent to the Agency (Subsidiary Loan). Subsidiary loan funds are made available to the Republic of Uzbekistan for Project financing shall only be used for the Intention and on the Terms and Conditions of the Financing Agreement. Pursuant to the Sub-lending Agreement, the Road Fund is organization in charge for the repayment of loan * and interest. The Project aims to have two broad objectives: (i) reduce road user costs on the Project roads; and (ii) develop a sustainable investment program for regional road asset management. The Project oblasts are Tashkent, Ferghana, Andijan and Namangan oblasts. Project financing plan is as follows: Source of financing USD IDA200 00000 R IDA NGovernment 40000000 Total 240000000 1 On the basis of Decree No.2611 of the President of the Republic of Uzbekistan dated 23 September 2016 "On measures of implementation of "Regional Roads Development Project" with participation International Development Association "the Road Fund is an executive agency responsible for the target and effective use of credit proceeds and Project implementation, and Khokimiyats of Tashkent Namangan Ferghana and Andijan oblasts are responsible for the timely and effective implementation of the Project. In order to optimize logistics and economic effectiveness Regional Roads Development Project Implementation Unit under Republican Road Fund under the Cabinet of Ministers of the Republic of Uzbekistan (hereinafter - PIU) was created. The PIU is registered by the Resolution 010290-10 dated 12 August 2015 of the Khokim of Yunus-Abad district of Tashkent City. PIU is a public non-commercial enterprise with the following main objectives: * To achieve the goals and objectives of the Project; * To establish and enable Monitoring and Evaluation system for the project implementation; * To ensure the targeted and effective timely disbursement of project funds for the project implementation; N* Management of the procurement of goods and services, in line with the IDA and national regulatory requirements, and others. PIU is located at: 29, Istiqlol Street, Tashkent, Republic of Uzbekistan. The Project consists of the following parts: Part 1: Rehabilitation of Regional Roads Rehabilitating and improving selected sections of existing priority regional roads in the Project Oblasts, and integrating road safety measures into the design of said sections. All through the provision of goods, works and consultants' services. N N "Regional Roads Development Project" IDA Credit No.5679-UZ 13 Part 2: Road Sector Institutional Strengthening () Currying out a review of the Uzbekistan's existing road asset management capacity; (ii) Supporting the development of regional roads rehabilitation programs; (iii) Supporting the economic development of the road construction industry (including, inter alia, training programs for road construction and technical design institutes); (iv) Strengthening the technical capacity of the Republican Road Fund; and (v) Currying out a review of the Uzbekistan road sector policy and institutional framework. Al through the provision of goods, consultants' services, training, and incremental operating costs. Part 3: Project Management Providing support to the PIU for the purposes of inter alia, Project management, monitoring and evaluation (including, inter alia, procurement, financial management and safeguards supervision). All through the provision of goods, consultants' services, training, and incremental operating costs. The expected duration of the Project defined from September 2015 to September 2021. IDA credit proceeds under the Project implementation are available to cover the following eligible costs: 1 -- ------- IDA Financing No. Category In SDR In USD In % (exclusive of i taxes and duties) 1 Rehabilitation of Regional Roads 131 81 048 276 100% of all expenditures 2 Road sector Institutional Strengthening 3620000 4 993103 100% of all expenditures 3 Project Management 6 740000 9296552 100% of all expenditures 4--- Unllcae 3 380 000 4 662 069 100% of all expenditures Total 145 000 000 200 000 000 Government proceeds under the Project implementation are available to cover the following eligible costs: No. Categr - GOU Financing In USD In % 1 Other costs, including 2 296 400 100% of all expenditures 1 Rehabilitation of Regional Roads 2 296 400 -.- 2 Single Social Payment* including 193 500 100% of all expenditures 3 Project Management 193500 3 Exemptions from taxes and duties 24812 500 100% of all expenditures 1 Rehabilitation of Regional Roads 22 312500 2 Road sector Institutional Strengthening 12 400 000 3 Project Management100 000 4 Financial costs in the investment period 12 697 600 100% of all expenditures Total 40 000 000 The Source of financing of Single Social Payment is funds of Republican Road Fund 2. Project Accounting Policy These Special Purpose Financial Statements have been prepared, in accordance with requirements of International Public Sector Accounting Standards (hereinafter - IPSAS) issued by the International Public Sector Accounting Standards Board of the International Federation of Accountants, following the cash flow basis and compliant with the World Bank recommendations. "Regional Roads Development Project IDA Credit No.5679-UZ 14 2.1. Basis for the preparation of the Special Purpose Financial Statements Statement of Sources and Uses of Funds Statement of Uses of Funds by Project Categories, Statement of Accoun.ts Statements and Notes to the Financial Statements are developed to reflect operations conducted in the Project's framework. Statement of Sources and Uses of Funds, Statement of Uses of Funds by Project Categories, Statement of SOE, Balance Sheet, Reconciliation Statement for the Balance of the Project's Account sand Designated Accounts Statements are developed based on cash flow basis in accordance with below-stated principles. 2.2. Financing Financing of the Project is considered as actual in the following cases: 1. IDA Financing: * when suppliers of material resources or services are paid by the IDA from the Credit Account (hereinafter - Credit Account) under Direct payment procedures or by the Letter of Credit; "when the funds from the IDA's Credit Account were transmitted to the Project Designated accounts (hereinafter - the Designated Account) opened with Central Operating Department of the National Bank Foreign Economic Activity of the Republic of Uzbekistan (hereinafter - National Bank of N Uzbekistan). 2. Government financing: a Once the funds are transferred from the Road Fund accounts to the PIU accounts (Co-financing Account) opened in the Treasury Ministry of Finance of the Republic of Uzbekistan; * By Funds for financing and expenses on Single Social Payment (SSP) before the first financing date of IDA - when funds are transferred accounts of Republican Road Fund to the Project's Designated account opened in the National Bank of Uzbekistan; * In kind of tax and duty exemptions accounted on the basis of the certificates (notes/letters) furnished by the Project suppliers and subcontractors subjected to the general taxation requirements (VAT, mandatory contributions and fees to the public ear-marked funds, customs fees). N 2.3 Expenditures The Project expenditures are recognized as such and stated in the financial statements when the payment is made to suppliers of goods, works and/or services. The payments are made either directly from Credit account administered by the IDA, or by the Letter of Credit, or from Designated accounts, and Co-financing account. 2.4. Comparative information The corresponding figures in the Special Purpose Financial Statements for 2016 are presented for the period from 24 December 2016 to 31 December 2016, whereas the corresponding figures for 2017 are presented for the period fromlJanuary 2017 to 31 December 2017. As a result, the corresponding figures may not be comparable to the figures for the period ended 31 December 2017. 2.5. Reporting currency and exchange rate methodology Uzbekistan's national currency is Uzbek Soum (UZS). IDA Fund's Project financing are budgeted in United States Dollars (USD). Hence, USD is functional and reporting currency in which the Project Special Purpose Financial Statements are presented (presentation currency). Itemization in the Financial Statements is * exercised in the functional currency. The Project has two Designated Accounts: USD and UZS (IDA Credit No.5679-UZ) for financing eligible expenditures within IDA's share, The Project also has Co-financing Account for financing Project's 5 expenditures by GOU. Pursuant to the Presidential Decree No.51 77 dated 02 September 2017 as of 05 September 2017 the foreign exchange can be freely purchased for the national currency. Commercial banks are free to charge exchange I commissions at their discretion. "Regional Roads Development Project" IDA Credit No.5679-UZ 15 For preparing Project's financial statements the following principles of foreign exchange rate conversion used: F for receipts and expenses in local currency (UZS) attributed to co-financing, the rate of Central Bank of Uzbekistan (CBU) effective at the date of receipt. N Co-financing of UZS expenditures from the Project Designated Account through USD exchange at the CBU exchange rate effective on the date of payment. * for IDA funds, expenses in UZS are restated in USD at the CBU exchange rate - to 5 September 2017 and acquiring commercial bank exchange rate - from 5 September 2017, effective on the date of conversion. * for IDA funds, retroactive expenses in UZS are recalculated in USD at the CBU exchange rate, effective on the date of conversion (27 December 2016). * UZS balances of Project bank accounts are revalued at the official exchange rate of PIU effective at the reporting date. As at 31 December 2016 the CBU's UZS to USD official exchange rate was UZS 3,231.48 ! USD 1 and as at 31 December 2017 - UZS 8,120.07 / USD 1. 3. Presented financial statements Project Financial Statements are prepared by the Management of the PIU, which coordinates implementation of the Project based on the Uzbekistan Presidential Resolution No.2611 dated 23 September 2016. The Project Special Purpose Financial Statements have been signed for and on behalf of PlU Director Mr. N. Fayzullaev, and Accounting specialist of PlUMs. M. Sattorova on 7 May 2018. The Project Financial Statements have been prepared in line with IPSAS based on the cash flow method: 3.1. Statement of Sources and Uses of Funds This Statement details information of the reporting period on financing and uses of funds of the Project by sources controlling by PIU. During the reported period, the Project was funded: / by IDA in the amount of USD 300 000.00 - financing USD 300 000.00 replenishment of the Project USD Designated Account under the SOE Procedure (pls, see Note7) by GOU counterpart financing for the amount of USD 42 956.68 in cash funds to cover the Project recurrent costs. The total Project expenditures for the reporting period amount USD 273 689.03 including IDA Funds USD 230 732.35 and GOU Funds USD 42 956.68. 3.2. Statement of Uses of Funds by Project Components This Statement has detailed the information on the Expenditures of the Project Reported Period by the Project categories by all sources of revenues. During the reported period, the Project was expended: V by IDA in the amount of USD 230 732.35 - expenses USD 230 732.35 incurred under the SOE Procedure (pis. see Note 7) / by GOU co-financing for total of USD 48 567,34: Project Management costs (Single Social Payment) for total of USD 42 956,68 and financial costs for total of USD 5 610,66. 3.3. Statement of SOE This Statement has detailed the information Statement of Expenditures of the Project Reported Period withdrawn to IDA. 3.4. Balance Sheet This report includes data on the accumulated Project funds, financing and cumulative Project expenditures as on December 31, 2016 and December 31, 2017. "Regional Roads Development Project" IDA Credit No. 5679-UZ 16 3.5. Reconciliation Statement for the Balance of the Project's Accounts This report documents information on the verification of IDA-financed with actual Project expenditures. M 4. Cash and cash equivalents The PIU opened two bank accounts in the National Bank of Uzbekistan. The Project's accounts and their * purposes are listed below: 4.1. Project's Designated Accounts The Project has two Designated Accounts: USD and UZS (IDA Credit No.5679-UZ) for financing eligible expenditures within IDA's share. The Project's Designated Accounts purposes are listed below: Project's USD Designated Account USD Designated Account was opened by PIU on 24 December 2016 - on the date of the first IDA disbursement. From 24 1h December 2016 through 31st December 2017 the total IDA disbursement was USID 300 000,00. USD Designated account USD 299 989,00 which is minus bank charges of USD 11,00. USD 1 790,00 was transferred to the Project Designated Account in UZS (exchange transaction) to cover eligible Project costs. Project's UZS Designated Account PUs UZS Designated account was opened on 21st August 2015 for financing Project eligible costs. From 30th September 2015 to 24th December 2016 the PUs UZS Designated account was used for co-financing retroactive (eligible) Project expenditures before the first IDA disbursement (p-s. see Note 6). From 30th September 2015 to 24th December 2016 the PfU's UZS Designated account was also used for Project expenditures co-financed by the Government of Uzbekistan. Over this period total tax cost (Single Social Payment) financed by the Republican Road Fund was USD 16 576,72. Total costs covered from the PIUs UZS Designated account over the reporting period was USD 230 721,35, including retroactive costs of USD 85 095,23 reimbursed to the Republican Road Fund on 27th December 32016 including unused US1D 96,45. 4P2. Project's Co-financing Account Co-financing account is used to cover expenditures, funded by the Government. This account receives remittances from the Republican Road Fund accounts. Total amount of Government financing of the Single Social Payment expenses for the period from 01 January 2017 to 31 December 2017 comprised USD 24 379,96 in UZS equivalent. The total amount of expenditures, incurred for the reporting period from the Co-financing account is USD 24 379,96. fl Balances of the Project's bank accounts are reflected in the following table: Account .. I 1 000' UZS USD Balance as at October 28, 2016* 31,1.. . 355 Project's UZS Designated Account 231,1 23 712,117358 Project's USD Designated Account . ___ 0,0 _010 0,00 Balance as at December 31, 21 Project's UZS Designated Account 1 1202,1120 371,99 I..-.- ______...--.Project's USD Designated Account 189 739,0 613 13,8 1897?39OOj 5Tota Project Funds as at December 31, 2016 614 339,9 190 110,99 -_- - - - -I- - - -- - - - - - - - - - "Regional Roads Development Project" IDA Credit No.5679-UZ 17 Balance as at December 31, 2017 Project's UZS Designated Account 8677,5 8 677,5 1 1 068,65 Project's USD Designated Account 68 1990 5 0,7 68871,58607 Total Project Funds as at December 31, 2017 562 458,2 69_267,65 * 5. Fixed Assets The fixed assets of the Project consist of office equipment, furniture and other purchased for the use of PIU for the period of the Project implementation. Cost of the fixed assets includes purchase price and other direct acquisition costs (custom duties and consumables),Costs of current refurbishment and maintenance are accounted when they occur and entered in the Accounts as Project expenditures. Fixed assets administered by the PIU and procured from the Project funds are structured as following: 1 Office equipment Furniture i Others Total At 30 September 2015 Purchase 4462,60 488,94 - 4 951,54 Disposal i At 28 October 2016 4 462,60 488,94 4 951,54 Purchase 5856,00 5 519,77 232,67 11 608,44 Disposal At 31 December 2017 10 318,60 6 008,71 232,67 16 559,98 During the reporting period, the Project has procured mono-blocks and printer in amount USD 5 856,00, shelves and chairs in amount USD 5 519,77 and microwave in amount USD 232,67. 6. Project's Retroactive Expenses Retroactive Project expenditures are the eligible reimbursable Project expenditures occurred before the Financing Agreement effectiveness. Retroactive Project expenditures occurred from 30 September 2015 through 24 December 2016. Retroactive Project expenditures were covered by the Republican Road Fund in UZS to the Project Designated Account. Total revenues for financing retroactive Project expenditures from 30th September 2015 through 24h December 2016 was USD 85 191,68 (UZS 275 295,2 thousand). Total retroactive Project expenditures was USD 85 095,23 (UZS 274 983,5 thousand). Amount of USD 96,45 (UZS 311,7 thousand) were unused. Below is information on retroactive Project expenditures from the 30th September 2015 through 24th December 2016 by the cost break-down: 5 ~Payment details In LUSPDnOO Z il nUSDIn 000'UZS Pl-a r ------ - PIL..Salary.40 850,01 132 006,0 Income Tax 10 695,5 : 34 563,5 - -- -- -- --- -- -- - -- Social contributions of citizens 4487,52 14501,3 Contributions to the Individual Pension Saving Accounts 582,67 1 882,9 Office Rent L 2 20211,4 65 12,7 Communication and internet services 1 392,78 45007 Acqusiton Fixed Assets 4795174 16000, Total trip x50,23 27 Other expenses. 1 772,76 __5728,6 Total Retroactive Expenses 85 095,23 _I 274 983,5 "Regional Roads Development Project" IDA Credit No.5679-UZ 18 On 27Ih December 2016 the Republican Road Fund was reimbursed cost of financing its retroactive Project expenditures for total of USD 85 191,25 (including unused USD 96,45). 7. Statement af Expenditure (SOE) procedures SOE procedure used by the Project to replenish funds to the Designated Account in accordance with the conditions of the Financing Agreement and IDA Guidelines' requirements. Summary of expenditures under the SOE procedures for the period 24 December 2016 til[ 31 December 2017 is stated in the following table: 2016 2017 Total --- -- -- ---- -- - -- - - -- - - - - Total Amount reported under SOEs 109 889,01 120 843,34 230 732,35 es31 eependtures no .submtted to /DA (109 889,01) (120 843,34) (230 732,35) on 31December 2017* Subtotal 0,00 0,00 0,00 2. .....---- -0 601111 - - ---------- - ------ Of which: replenished to Designated Account 300 000,00 0,00 300000,00 Including Advance Payment (300 000,00) {300 000,00) Subtotal 0,00 0,00 0,00 Difference 0,00 0,00 0,00 *Reported expenditures submitted to the IDA under SOE 2 for total of USD 230 732,35 are netted off on the account ofadvance payment, including USD100 000 is replenished on the Project DesignatedAccount. 8. Project budget performance Cumulative from the beginning of the Project IDA FUNDS Advance Payment 3 000 00 Total Financing by IDA Funds 300 000,00 I --.---------------- -. - ------------ Total budget by IDA Funds 200 000 000,00 Financing percentage af IDA Funds 0,15% GOU FUNDSi GOU counterpart financing in cash 42 956,68 Financial costs in the investment period 5610,66 GOU in kind contribution 0,00 Total GOU Financing 48 567,34 Total budget in cash 15 187 500,00 Percentage of cash financing 0 32% Total GOU Budget 40 000 000,00 Total Percentage of GOU Financing 0,12% Total Project Financing 348567,34 Total Project Budget 240 000 000,00 TotalJPe-rcentalge of-Projecti Finan-c-ing 15 "Regional Roads Development Project" IDA Credit No.5679-UZ 19 9. Budget performance on the financing the Project expenditures/Disbursements ....... ........c from 2017 2016 the beginning of the Project IDA FUNDS 1,Rehabiitaton of Regional Roads 0,001 2 Road sector Institutional Strengthening _ 0,00 1 0,00 1 0,00 3 Project Management 120843,34 109 889,01 230732,35 4. Unallocated 0,00 000 0,00 Total Project Expenditures by IDA Funds 120 843,34 i 109 889,01 230 732,35 Total budget by IDA Funds 32 839 200,00 270 500,00 200 000 000,00 TIDA Funds disbursement rate 0,37% 0 ,62% 0,12% '-UU D --- - ------- --------- ~~~~ ------- -- . . ----------- ¯GOU FUNDS 1. Rehabilitation of Regional Roads 0,00 0,00 0,00 -- - -- - -- - -- - 3 Project Management 24 379,96 i 18 576,72 42 956,68 Financial costs in the investment period 5610,66 0,-0,0 5 610,66 GOU in kind contribution 0,00 0,00 0,00 Total Project Expenditures by GOU Funds 29990,62 18576,72 48567,34 .. .. [. . --- - - 999 ,62] - 8 7 ,2 48567,34--- Total budget in cash expenditures 1 513 800,00 1 290 200,00 15 187 500,00 Cash disbursement rate 1,98% 1,44% 0,32% Total budget of exemptions from taxes and duties 5 953 100,00 0,00 24812 50000 Non-cash disbursement rate 0,00% 0,00% 0,00% Total budget by GOU Funds 7 466 900,00 1 290 200,00 40 000 000,00 GOU funds disbursement rate 0,40% 1,44% 0,12% Total Project Expenditures 150 833,96 128 465,73 279 299,69 Total Project Budget 40 306 100,00 1 560 700,00 1 240 000 000,00 Project disbursement rate 0,37% 8,23% 0,12% j ------- ------- *In September 2017 due to introduction of the Foreign Exchange Policy by the GOU emerged the need to adjust the cost of capital construction and re-bidding. As an outcome of additional works for contracting new contractors the 2017 budget performance was transferred to the next reporting periods. 10. Cumulative Expenditures On 31 December 2017 cumulative project expenditures include Direct payments to the suppliers of goods (works and services), expenditures from the Project Designated Accounts and from the Co-financing account. - -- - --------------- -- from th---- Project Expenditures Cumulative from the Note i -----begm9ýningq of the Projec;t.... Direct payments Payments from the Project Designated Accounts 7 230 732,35 Expenditures of the counterpart financing 3 48567,3 Total Cumulative Expenditures 279 299,69 .- .. - . . ----- ----- --------------.... Services and goods acquired from IDA funds are exempted from all taxes and levies based on Tax Code of the Republic of Uzbekistan. "Regional Roads Development Project" IDA Credit No.5679-UZ 20 12. Statement of Project's Co-financing Account Account No: 2340 2000 3001 0000 1010 00014 Depositary bank: Treasury Ministry of Finance of the Republic of Uzbekistan Address: 5, Mustakillik Avenue, Tashkent, Uzbekistan Related Credit 5679-UZ Currency: UZS USD 000' UZS Balance as at 01 January, 2017 0,00 0,00 Inflow: Road Fund Financing 24379,96 115 762,79 Total Inflow: 24 379,96 115 762,79 Outflow: Expenses on related categories 24 379,96 115762,79 Total Outflow: 24 379,96 115 762,79 Balance as at December 31, 2017 0,00 0,00 "Regional Roads Development Project" IDA Credit No.5679-UZ 20 12. Statement of Project's Co-financing Account Account No: 2340 2000 3001 0000 1010 00014 Depositary bank: Treasury Ministry of Finance of the Republic of Uzbekistan Address: 5, Mustakillik Avenue, Tashkent, Uzbekistan Related Credit 5679-UZ Currency: UZS USD 000' UZS Balance as at 01 January, 2017 0,00 0,00 Inflow: Road Fund Financing 24 379,96 115 762,79 Total Inflow: 24 379,96 115 762,79 Outflow: Expenses on related categories 24 379,96 115 762,79 Total Outflow: 24 379,96 115 762,79 Balance as at December 31, 2017 0,00 0,00