98233 Statement of the Project's management 1-2 Independent auditor's report of and Disbursements 5 of and Accumulated balance of counterpart funds The Rural Electrification Phase II Project ("The Project") which is funded by International Development Association ("IDA") under Grant Agreement Number H538-LA dated 8 February 2010. This project is implemented by Electricite Du Laos ("EDL"). According to the Development Grant Agreement, the IDA has agreed to provide assistance in an principle amount equivalent to 12,600,000 or 20,000,000 . The project agreement entered into between IDA, the International Bank for Reconstruction and has obligations to the principal amount under sub-loan agreement and its capitalized interests to Ministry of Finance at 4.5°/o per annum commencing from 15 January 2012 to 15 July 2030. The main purpose of the Rural Electrification Project II ("the Project") is to improve the living standards and increase the income of rural households, which is continue carrying out the Rural Electrification Phase I Project ("the Project"). The Project's management is responsible for the Project's financial statements which comprise of the statement of cash receipts and disbursements, and statement of fund balance together with the notes thereto as at and for the year ended 31 December 2014 ("the financial statements"). The financial statements are prepared solely to report the funds received from the IDA, the funds disbursed for period 1 January to 31 December 2014, and there fund balance as at 31 December 2014. The financial statements are the responsibility of the Project management. The following are the components of the financial statements: 1 Statement of cash receipts and disbursements Statement of fund balance Notes to the financial statements As the responsible officials of the Rural Electrification Phase II Project funded by the International Development under Instrument H538-LA, we do hereby that the financial statements, to the of our knowledge and with IDA' financing requirements with basis In addition, the Project's management is responsible for ensuring that proper accounting records and supporting are well maintained, with any time on funds requested, authorized for and received as well as the funds disbursed by the Project. The Project's management is also responsible for safeguarding the of the Project, and for taking for the prevention and detection of fraud and other irregularities. We also hereby state that the statement of cash receipts and disbursements only includes costs which are eligible for financing under IDA Financing Agreement No. IDA H538-LA and adequate supporting documentation has been maintained for these costs On behalf of the Project's management. Managing Director Manager of Project-Loan Accounting Office Electricite Du Laos Electricite Du Laos Vientiane, Lao PDR Vientiane, Lao PDR Date: 30 June 2015 Date: 30 June 2015 2 We have audited the accompanying f1nancial statements ("the financial statements") of the Electrification ("the statement disbursements and statement as at and a summary of UL~Lll"'-L'-''-'-L"' Management is responsible for the preparation of the financial statements in accordance with the accounting policies described in Note 2 to the financial statements and for such internal control as management determines necessary to enable the preparation of the Financial Statements that are free from material misstatement, whether due to fraud or error. Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply vvith ethical requirements and plan and perform the audit to obtain reasonable assurance about 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 the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the Project's preparation of the 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 controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by 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 audit opinion (\/ :··········································································································································································································································:-:~ ~ PricewaterhouseCoopers (Lao) Co., Ltd. 4th Floor, ANZ Commercial Building, 33 Lane Xang Avenue, PO Box 7003, Telephone : + 856 21 222718-9, Facsimile: + 856 21 222723, www.pwc.com/la In our opinion, the financial statements of the Rural Electrification Phase II Project ("the Project") for the year ended and as at 31 December 2014 are prepared, in all material respects, in accordance with the basis set out in Note 2 to the financial statements. report is intended for the information of the Project and the IDA/the World for no other purpose. However, upon release by the IDA/the World Bank, this report will be a matter of public record and its distribution will not be limited. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come, except where expressly agreed by our consent For PricewaterhouseCoopers (Lao) Co., Ltd. ByPaiboon Partner Vientiane, Lao PD R 30 June 2015 . ..........................................................................................................................................................................................................................................!.:: l PricewaterhouseCoopers (Lao) Co., Ltd. 4th Floor, ANZ Commercial Building, 33 Lane Xang Avenue, PO Box \ 7003, Telephone : + 856 21 222718-9, Facsimile: + 856 21 222723, www.pwc.com/la 3.1 220,000 '170 3.2 4.1 1 1 1, 6 4,154,483 Consultant services 1,301,315 77,000 Equipment and installation 4,591,420 7 8 Managing Director Manager of Project-Loan Accounting Office Electricite Du Laos Electricite Du Laos Vientiane, Lao PDR Vientiane, Lao PDR Date: 30 June 2015 Date: 30 June 2015 The accompanying notes on pages 7 to 22 form an integral part of the financial statements. 5 Fund balance at the beginning of the year 255,216 12,976,560 Net receipts/( Disbursements) 432,458 ( 12,721,344) Fund balance at the end of the year Managing Director Manager of Project-Loan Accounting Office Electricite Du Laos Electricite Du Laos Vientiane, Lao PDR Vientiane, Lao PDR Date: 30 June 2015 Date: 30 June 2015 The accompanying notes on pages 7 to 22 form an integral part of the financial statements. 6 The Rural Electrification Phase II Project ("The Project") which is funded by International Development Association ("IDA") under Grant Agreement Number H538-LA dated 8 February 2010. This project is implemented by Electricite Du Laos ("EDL"). According to the Development Grant Agreement, the IDA has agreed to provide in an aggregate principle amount equivalent to 12,600,000. The project into IDA, International for an obligations to principal amount under sub-loan capitalised interests to Ministry of Finance at 4.5°/o per annum commencing from 15 January 2012 to 15 July 2030. -The amount of the grant and the principal amount of the loan shall be made available in United States Dollars (determined on the date, or respective dates), of withdrawal from the Financing account) of the value of the currency or currencies so withdrawn. -Repayment of the proceeds of the loan over a period of twenty (20) years, inclusive of a race period of five (5) years. -Payment of interest on the principal amount of the loan withdrawn and outstanding from time to time at the rate of 4.5 °/o per year or any other rate which may be agreed to between the Government of Laos and EDL and which is satisfactory to the Association. The main purpose of the Rural Electrification Project Phase II ("the Project") is to improve the living standards and increase the income of rural households, which is continue carrying out the Rural Electrification Phase I Project. 2 a. The statement of cash receipts and disbursements and fund balance expressed in United State Dollar ("USD"), have been prepared under the historical cost convention and the cash receipts and disbursements basis of accounting. Under the cash receipts and disbursements basis of accounting transactions are recorded when cash is paid or received rather than when incurred by the Project. The Project maintains its accounting records in USD. The Project maintains supporting documentation, with respect to the financial statements, to support the cash received and paid by the Project. 7 IDA funds-direct disbursements related to payments made by International Development Association ("IDA"), Norwegian Agency for Development Cooperation ("NORAD") and Global Environment Facilities ("GEF") directly to the Projects' suppliers and consultants. payments are accounted for and when by upon in the bank. NORAD funds are as when is to bank account that is managed by the Project, and recognized as the disbursement when the cash is credited from project bank account from payment implemented by IFC funds are recognized as receipt when the cash is debited to the Project's bank account, and recognized as the disbursement when the cash is credited from project bank account from the payment to suppliers implemented by Remaining of IFC funds are kept in form of cash deposited in bank and Letter of Credit (BCEL). Counterpart funds relate to payments made by EDL directly to the Project's suppliers and staff. These payments are accounted for as both direct receipts and disbursements upon receipt of advice from EDL. Expenditure under each category is recognized when documents substantiating the Project's transactions are submitted and approved of by the Project's management, and payments are made. h. Remaining cash balance for over payments, no movement of cash balance or project closure date require to refund. Refund is recognised once the project transfer related balance from project designated amount to the World Bank. i. Foreign currency The measurement and presentation currency of the Project is USD. Transactions arising in currencies other than USD are translated to USD using the average rates of each month that transactions occurred. The exchange rate was used 8,078 KIP/USD on 31 December 2014 from BCEL. 8 EDL-028 28-Jul-14 220,000 18-Dec-13 111,300 EDL-025 16-Dec-13 1,061,500 1 25-Nov-13 255,614 EDL-024 25-Nov-13 258,680 3 EDL-022 9-Sep-13 985,656 EDL-014(1) 30-May-13 33,278 EDL-014(2) 22-Jan-13 300,058 EDL-029 04-Nov-14 84,011 EDL-027 03-Mar-14 428,109 replenishment 2014 2013 Withdrawal application No. Date of receipt USD USD EDL-006 03-Mar-14 44,471 EDL-005 13-Aug-13 42,011 Total 44,471 42,011 9 28-Jul-14 1 3 Fund transfer 12-May-14 1,308,869 4 1 1 * The amount received USD 1,562 is from the gaining on exchange rate for transferring money to supplier for consultant service (amount to be paid is EUR and the project paid is USD, so the Project gained from exchange rate from USD to EUR) Administrative costs 150,263 335,688 Salary 104,419 65,422 Construction, equipment and others 2,938,023 825,318 Interests on loans charged by GOL 279,108 654,590 Unexploded Ordinance clearance (UXO) 682,670 901,952 Counterpart funds are the contribution funds made by EDL to this Project, the costs consist of unexploded ordinance clearance (UXO) at rural country and around transmission line area, and survey, construction, and equipment of the construction transmission line, administrative expenses mainly consists of transportation costs, project staff's salary, fuel and other maintenance costs of vehicles and other assets used in the Project of EDL's working team. 10 RURAL ELECTRIFICATION (FUNDED BY NOTES TO THE 31 DECEMBER 2014 7. Disbursements For the year ended 31 December -----·--- Consultants' services 5 1 5 Construction and Equipment installation. 220,000 84,000 93 3,305,855 Administrative Expenses 32 27 323,728 323,787 UXO clearance 682,670 Interests on loans charged by GOL 279, 279, 08 Total 220,000 ;~·~·---------------------------------------------------------------------------------------------------------- 11 ELECTRIFICATION (FUNDED BY INTERNATIONAL NOTES TO THE FINANCIAL 31 DECEMBER 2014 7. Disbursements (Continued) For the year ended 31 December 3 12 The Project has closed bank account and transferred money No TF098662 since there was no movement for this account for 8 months. Thus, the Project decided to refund those money back to and if is any occur the Project will request directly to GEF until the end of the project agreement on 30 June 2015. The request for refunding no. 5161/EDL amount Bank name Fed ABA Number : 026005092 Account Name : International Bank for Reconstruction and Development (IBRD) Address : 1818 H N.W, Washington, Account Number : IBRT 2000192003489 IDA H538 LA- Special Account 10.1 499,990 71,892 098662 -Special Account 10.2 5,530 NORAD- Bank 10.3 9,900 IFC- Cash at bank BCEL 10.4 177,784 177,794 6 Cash in Special account- IDA of Grant No. H538-LA AccountNo. 0000010092830106 Depository. Bank of Lao PDR Address Yonnet Street, Vientiane, Lao PDR Related Credit Grant No. H538-LA Type of account Current account Currency USD Cash in Special account- GEF TF 098662 Account No. 0000010092860141 Depository. Bank of Lao PDR Address Yonnet Street, Vientiane, Lao PDR Related Credit Grant TF 098662 Type of account Current account Currency USD 13 Cash in account IFC and IFC-LC Account No. 010110100407210001 Depository. Banque Pour Le Commerce public Address Pangkham 1, Vientiane, Lao PDR Related Credit Loan I Type of account : Current account Type of account : Currency The designated accounts are maintained in USD at the Bank of Lao PDR for grant H538- LA and TF-098662, NORAD and public for IFC account which are non-interest bearing. 10. account 1 Opening balance 71,892 486,144 Add: Special account replenishment (Note 3.2) 512,120 Deduct: Total amount withdrawn (84,000) (414,252) Bank charge (22) Closing balance (Note 9) 14 Opening balance 49,990 Add: 4.1) Total amount withdrawn (86,460) amount refunded to 8) Closing balance (Note 9) Opening balance Add: Fund transfer 1,308,869 Gain from foreign exchange (Note 5) 1,562 Contribution from EDL 784 Deduct: Total amount withdrawn (1 ,301 ,315) Closing balance (Note 9) 15 1 1 ( 11 (1 0) ( 10) Ending I account (Note 9) During the year ended 31 December 2014, the following Statement of Expenditure ("SOE") withdrawal applications have been prepared by the Project's management, approved of by the Ministry of Finance an submitted to IDA for replenishment: 11.1 EDL-027 03-Mar-14 428,109 EDL-029 04-Nov-14 84,011 Consultant services 13,845 Equipment and installation 498,275 512,120 16 Consultant services 35,000 42,011 Equipment and installation 11. 4938/EDL 27-Dec-14 133,408 4816/EDL 17 -Dec-14 137,878 4379/EDL 28-Nov-14 7,500 4022/EDL 07-Nov-14 60,049 3295/EDL 09-Sep-14 142,357 3271/EDL 05-Sep-14 45,362 31 09/EDL 26-Aug-14 53,635 2905/EDL 11-Aug-14 15,000 2042/EDL 10-Jun-14 171,710 014/1163 10-Jun-14 134,501 03466-71 /KN 27-May-14 266,685 1761/EDL 22-May-14 133,230 1,301,315 17 Consultant services 1 5 3 300,000 7-Jun-13 38,357 05-REP 11-1-HNK 7-Jun-13 710,313 1 11-2 6-Jun-13 534,040 1 3 03-REP 11-1-HNK 16-Mar-13 4,224,512 14/REP 11-2 13-Mar-13 193,895 02-REP 11-1-HNK 12-Mar-13 1,457,993 transfer no; 163358 22-Feb-13 2,000,000 10/REP 11-2 31-Jan-13 1,551,163 008640Y 30-Jan-13 313,302 Equipment and installation 12,262,588 18 1 Add: Bank charge amount from 7) Total disbursements included in Statements of Expenditure 86,460 Add: Amount disbursement in Special account, but not yet claim at the ended of year Add: Bank charge 11 Total amount withdraw from the special account 3 Total disbursements included in Statements of Expenditure (Note 11.3) 1,301,315 Total amount withdraw from the special account (7) 1,301,315 19 Total disbursements included in 1 Total amount withdraw from 1 Electrical Construction and Installation Construction 1078 10,286,297 (313,302) 9,972,995 Period due for payment on the above commitment is expected to be performed by the end of 2015. 1 Contract Value Accumulative Company Date of Remaining Description Disbursement name contract No USD balance USD Amount USD Concrete Tang Poles and Chareon Cross- Co.,Ltd ARMS 24/10/2011 Rep 11-3 9,856,562 (8,890,376) 966,186 Low Voltage Hunan Watt Hour Machinery Meters Rep II- (DSM) 29/06/2012 PDSLR-1 333,475 (333,335) 140 10,190,0 Total 37 (9,223, 711) 966,326 20 1 IC•UIIU .A. .L d.ll'l Value rrsement Cuu 11Jcm:lf name Description L . vUUIILICllv~ No USD Amount USD bdlam.-t:: USD Coordinator Services for Demand Side Mr Sypasirth Management Phase II 10/03/2011 2133 16,800 (11 ,200) 5,600 Coordinator Ser v~t.;e::; ~orDemand Side N1rPhonexay - - - Mar19g~m.E3nt Phase II 10/03/2011 2134 16,800 (11 ,200) 5,600 Coordinator Services ifor Demand Side Mr Phanthaphone Management Phase II 10/03/2011 2135 16,800 (1'1,200) 5,600 Coordinator Services or Demand Side Mr Phouvan Management Phase II 10/03/2011 2136 16,800 (11 ,200) 5,600 Coordinator Services or Demand Side Mr Vilaysack Management Phase II 10/03/2011 2137 16,800 (11,200) 5,600 Coordinator Services or Demand Side Mr Souliyong Management Phase II 10/03/2011 2138 16,800 (11 ,200) 5,600 Coordinator Services ifor Demand Side Mr Southalalay Management Phase II 10/03/2011 2139 16,800 (11 ,200) 5,600 Coordinator Services or Demand Side Mr Sengphet Management Phase II 10/03/2011 2140 16,800 (11,200) 5,600 Coordinator Services or Demand Side Mr Sonephet Management Phase II 10/03/2011 2141 16,800 (11,200) 5,600 Coordinator Services or Demand Side Mr Vananon Management Phase II 10/03/2011 2142 16,800 (11,200) 5,600 Total 168,000 (112,000) 56,000 21 22 500,000 replenishment 107,645 512,120 619,765 fund- Initial 50,000 50,000 fund- replenishment 84,021 44,471 128,492 fund- direct disbursements 472,000 133,662 605,662 fund 1,310,431 1 ,310,431 15,000,000 15,000,000 Counterpart funds 4,907,690 4,154,483 9,062,173 Consultant services 209,919 1,301,315 1,511,234 Equipment, installation and others 255,216 432,458 687,674 Note: The figures presented above are for purpose of presenting the accumulated balances from the project commencement date to current year audit. 23 181 '1 Construction, and 125,070 1 2 108 1 Note: The figures presented above are for purpose of presenting the accumulated balances from the project commencement date to current year audit. 24