Public Disclosure Authorized s2car GROUP TS -F S,LLC 2 Uzbekistan, Tashkent, 100077, 2a, Chust street Tel/Fax: (998-71) 262-50-70; 262-50-90 E E-mail: reception(dciar.uz; reception(dciarqroup.net www.ciar.uz Public Disclosure Authorized Public Disclosure Authorized JONT STOCK COMPANY ((UZBEKSTON TEMR YOLLAR THE ((PAP-ANGREN RALWAY)) PROJECT NDEPENDENT AUDTOR'S REPORT ON THE SPECAL PURPOSE FNANCAL STATEMENTS FOR THE PEROD FROM JULY 18, 2014 TO JANUARY 29, 2016 The (Pap-Angren railway)> Project Public Disclosure Authorized has received copy(ies) (in writing) % h(surname and initials) Seal(sgaue of the ndependent Auditors Report 2016 ndependent Member of GENEVA GROUP NTERNATONAL -1 'J o
4 CAR GROUP etsf N L 2 CONTENT CONTENT 2 NDEPENDENT AUDTOR'S REPORT 2 STATEMENT OF SOURCES AND USES OF FUNDS 5 STATEMENT OF USES OF FUNDS BY CATEGORES 6 NOTES TO PROJECT SPECAL PURPOSE FNANCAL STATEMENTS 7 1. Description of the Project 7 2. Going concern 7 2 2 5 6 7 3. Project's Accounting policy 8 4. Presented Financial Statements 8 5. Statement of Expenditure (SOE) procedures 9 6. Direct Payment procedures 9 7. Training and ncremental Operating Costs 9 8. Legal Status, Taxes and Levies 11 7 7
<TSlAR-HNANS, &'CAR GROUP - LC _3 NDEPENDENT AUDTOR'S REPORT Addressees: Project mplementation Unit under the JSC <<Uzbekiston Temir Yollarib We have audited the accompanying Special Purpose Financial Statements of the ((Pap-Angren Railway>> Project (hereinafter - Project) under JSC (<Uzbekiston Temir Yollari>> (hereinafter - UTY) financed by the nternational Bank for Reconstruction and Development / nternational Development Association (hereinafter - the Bank) against the proceeds of the Grant No.TF017692 provided by the Europe and Central Asia Region Capacity Building Development (ECAPDEV) Trust Fund, for the period from July 18, 2014 to January 29, 2016, that are: (i) Statement of Sources and Uses of Funds, (ii) Statement on Uses of Funds by Project Categories, and (iii) Notes to the Special Purpose Financial Statements. The Special Purpose Financial Statements have been prepared by the management of the Project according to the nternational Public Sector Accounting Standards (hereinafter - PSAS) under the Cash Basis of Accounting and the World Bank's requirements. Management's Responsibility for the Special Purpose Financial Statements The management of the Project is responsible for preparation and fair presentation of these Special Purpose Financial Statements in accordance with PSAS under the Cash Basis of Accounting. 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 nternational Standards on Auditing (SA), issued by nternational Auditing and Assurance Standards Board of the nternational Federation of Accountants. Those standards require that we should follow ethical norms, plan and perform the audit 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. n 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 Special Purpose Financial Statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion n our opinion, the above-stated Special Purpose Financial Statements give a true and fair view of the sources and uses of funds of the "Pap-Angren Railway" Project for the period from 18 July 2014 to 29 January 2016 and complies with conditions of the Grant Agreement No.TF017692 and PSAS under the Cash Basis of Accounting. Moreover, (a) adequate supporting documentation has been maintained to support claims to the ECAPDEV Trust Fund for reimbursement of expenditures incurred; and (b) the expenditures comply with objectives stipulated in the Grant Agreement No.TF017692.
N *~' CAR GROUP TARN S,LC 4 Basis of Accounting Without modifying our opinion, we draw attention to Note 3 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 Grant Agreement No.TF017692 and PSAS under the Cash Basis of Accounting. 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 the Bank, the Government of the Republic of Uzbekistan, as well as the management of UTY, and should not be distributed to or used by other parties. Auditor: TJ)AR- F//VAAV TSAR-FNANS LLC 2a, Chust Street, Tashkent, 100077, Republic of Uzbekistan SARFNANS fc., 29 January 2016
S The <<Pap-Angren Railway)) Project 5 S.-.- Add: Sources of Funds STATEMENT OF SOURCES AND USES OF FUNDS for the period from July 18, 2014 to January 29, 2016 USD --- -. Current period Cumulative.Actual ndicator - - - - Funds of ECAPDEV Trust Fund 700 000 700 000 Total 700 000 700 000 Foreign Exchange Difference 0 0 Total 0 0 S Less: Uses of Funds by categories Training and ncremental 700 000 700 000 pera.ting Csts 5 Total 700000 700 000 Dekhkanov Davron Tulkunovich The First Deputy of Chairman Babahalov Norbuta Eshnazarovich The Head of Finance Department Statement of Sources and Uses of Funds" to be read in conjunction with Notes (pages from 7 to 11) thereto forming an integral part of the Project special purpose financial statements.
The <<Pap-Angren Railway)) Project.6 STATEMENT OF USES OF FUNDS BY CATEGORES for the period from July 18, 2014 to January 29, 2016 USD Actual Budget Variance Description of category.-..---.- Current Cumulative Current C Cumulative Current Cumulative period period period Consultants' services (including. audit), Training and ncremental operatig cos 700 000 700 000 700 000 700 000 0 0 Total 700 000 700000 700 000 700 000 0 0 - Dekhkanov Davron Tulkunovich Babahalov Norbuta Eshnazarovich The First Deputy of Chairman The Head of Finance Department Statement of Uses of Funds by Categories" to be read in conjunction with Notes (pages from 7 to 11) thereto forming an integral part of the Project special purpose financial statements.
The <Pap-Angren Railway)) Project 7 NOTES TO PROJECT SPECAL PURPOSE FNANCAL STATEMENTS for the period from July 18, 2014 to January 29, 2016 1. Description of the Project nternational Development Association (hereinafter - DA) and JSC (<Uzbekiston Temir Yollari> (hereinafter - UTY) on 18 July 2014 have signed Grant Agreement No.TF017692 (hereinafter - Grant Agreement) for total USD 700 000 for implementation of the ((Pap-Angren Railway>) Project (hereinafter - the Project). According to the Grant Agreement the Project will be implemented on the account of the Europe and Central Asia Region Capacity Building Development Trust Fund (hereinafter - ECAPDEV Trust Fund). The main objective of the ECAPDEV Trust Fund is to support improvements in the quality and speed of project preparation complemented by focused capacity development in the ECA Region. UTY is entrusted in the execution and supervision of the implementation. Project mplementation Unit (hereinafter - PU) under UTY is established to ensure the effective Project implementation. The objectives of the Project is: (i) to support the UTY in preparing a feasible project aiming at reducing costs and providing connectivity to and from the portion of the Fergana Valley located in the territory of the Republic of Uzbekistan; and (ii) to build capacity of local institutional and the Project mplementation Unit to implement the Project. The Project consists of the following parts: Part 1: Technical. Economic. Financial. Social and Environment Assessment and nstitutional Strateqv and Roadmap Provision of consultants' services to: (i) prepare technical, economic, financial, fiduciary, social and environmental assessments for the proposed Project; (ii) carry out necessary Trainings for UTY staff, and prepare an institutional assessment and institutional roadmap reports (iii) prepare grant implementation documents, procurement plan for the proposed Project; Project Operational Manual; and carry out audit. Part 1: Capacity Building Provision of consultants' services. ncremental Operating Costs, and Training for the PU staff. The table specifies the categories of Eligible Expenditures that may be financed out of the proceeds of the Grant, the allocations of the amounts of the Grant, and the percentage of expenditures to be financed for Eligible Expenditures: Amount of the Grant Allocated Percentage of Expenditures to be Category (expressed in USD) Financed (inclusive of Taxes) Training and ncremental Operating Costs............... TOTAL AMOUNT 700 000 100%......... 2. Going concern According to the Grant Agreement, the planning Project Completion date is 30 November 2014. The World Bank Letter dated 3 November 2014 has approved the extended Project Closing Date and Grace Period after Closing that were moved from 30 November 2014 to 30 June 2015 and to 31 October 2015 respectively. Further, the World Bank Letter dated 24 August 2015 has approved the extended Project Closing date and Grace Period after closing that were moved to 30 September 2015 and to 31 January 2016 respectively.
The <Pap-Angren Railway)) Project 8 3. Project's Accounting policy These Special Purpose Financial Statements have been prepared, in accordance with requirements of nternational Public Sector Accounting Standards (hereinafter - PSAS) under the Cash Basis of Accounting, issued by the nternational Public Sector Accounting Standards Board of the nternational Federation of Accountants, following the World Bank recommendations. 3.1. Basis of presentation Statement of Sources and Uses of Funds, Statement on Uses of Funds by Project Categories and Notes to the Project Special Purpose Financial Statements were prepared based on the cash flow basis to reflect operations conducted in the Project's framework, in accordance with below-stated principles. 3.2. Financing The Project financing is recognized when the funds from the ECAPDEV Trust Fund's Grant Account were transmitted to the Project's Special Accounts. The Project financing is recognized also when suppliers of material resources or services are paid the ECAPDEV Trust Fund's Grant Account under Direct payment procedures. 3.3. Expenditures Project expenditures are recognized as such and stated in the Project Special Purpose Financial Statements, when the payment is made to suppliers of goods, works and/or services. The payments are made either directly from the ECAPDEV Trust Fund's Grant Account administered by the World Bank, either from Special Accounts of Project. 3.4. Reporting currency and exchange rate methodology Financing from ECAPDEV Trust Fund are carried out in United States Dollars (USD). The Special Purpose Financial Statements also presented in USD, which is the functional and presentation currency of Project. tems included in the Financial Statements are measured using that functional currency. Project Financial Statements are generated using the following exchange arrangements: * On the ECAPDEV Trust Fund Grant funds provided in the National currency "Uzbek Soum" (UZS) are converted into USD at the respective CBU exchange rate effective on the date of payment receipt or specific payment transactions and disbursement of the sub-loans; * UZS balances in Project's bank accounts are revalued at the rate of CBU effective at the reporting date. 4. Presented Financial Statements Project Special Purpose Financial Statements for the reporting period are prepared in accordance with PSAS based on the cash method. The Project Special Purpose Financial Statements have been prepared by PU under UTY. The Project Special Purpose Financial Statements have been signed by Mr. Dekhkanov D.T., the First Deputy Chairman of the JSC <<Uzbekiston Temir Yollari>> and by Mr.Babahalov N.E., the Head of Finance Department of the JSC ((Uzbekiston Temir Yollai>>. The Project Special Purpose Financial Statements comprise the following statements: 4.1. Statement of Sources and Uses of Funds Statement of Sources and Uses of Funds includes data on the funds provided by the ECAPDEV Trust Fund. During the reported period the Project was funded by ECAPDEV Trust Fund Grant for USD 700 000. Received funds are used for financing Training and ncremental Operating Costs.
9 The <<Pap-AngrenRailway)) Project Statement of Uses of Funds by Categories 4.2. Statement of Uses of Funds by Categories includes break-down by Project expenditures for each financing entity, category of expenditures, as well as Project budget for the reporting period and difference between actual expenditures and budgeted. The Project Budget is presented in the Grant Agreement. Statement of Expenditure (SOE) procedures 5. Statement of Expenditure (SOE) procedure has not been used by the Project in the current year because of the financing was provided by direct payments. Direct Payment procedures 6. The List of Direct payments made in the framework of the Project for the period of 18 July 2014 to 29 January 2016 is summarized below. No. Appliai ppier (expenditure MAR CON.SULTNG, 4 do.1.4 1 dd 01.10.14 dd 01.10.14 Training and ncremental Operating Costs dd 01.10.14 Training and ncremental Operating Costs AL MAR CONSULTNG, Vadimirovich, Ukraine Nazarov Anatoliy Training and ncremental Operating Costs Consultants services (including audit),50,0 dd130512014 dd 01.10.14 1 Training and ncrerntal ncremental Operating Costs AP-CS-2 AP-CS-4 Enlatnal Liitd dd 02.06.15 Training and ncremental Operating Costs Auditing company13"tsarfnans" LLC, Uzbekistan AP-CS-3 ddgbh, 29.05.15 Consultants' services (including audit),2100 Trainingerma249232,0 and ncremental Operating Costs Engineering Bureau Franke 1425000 ddap-cs-4 01.10.14 Vladmiroich Ukrine Consultants' services (including audit), 1Training and ncremental Operating Costs dd 0.2.614 AP-CS-2 270 Training and ncremental Operating Costs 2491,0 Gmiroich Germain u17tndecon CONSULTNG GmbH,UGerman Chn AL MAR CONSULTNG, dd 260.1.1 AP-CS-5 dd26.108.15 Training and Consultants' Training and Consultants' 15~~~~~~2 Engineering Bureau Franke nternational 5 Limited, AP-CS-4 dd 02.06.15 trainllmtd13500,0 Consultants services (including audit), 16 England AL MAR CONSULTNG, 16 dd 010.14 Training and ncremental Operating Costs 7. ~ DCO 13 Na 14 onan t 5, Training and ncremental perating Cost AL MAR CONSULTNG, AL MAR CONSULTNG, AL MAR CONSULTNG, Franke Bureau Engineering... 9 azar.. 10 Amount in Category onrac G 0,0 ncremental Operating Costs services (including audit), ncremental Operating Costs audit), services (including Training and ncremental Operating Costs OSLN Consultants' PCservices Tann (including n audit), nrmna prtn ot 36 000,0 Training and ncremental Operating Costs dd 26.08.15 GmbH,Germany ofsthebddn 18 NDECONdetailed... inttui and nalasesments, CONSULTNG environment/socialanin_ AP-CS-5 Consultants' services Operation (including audit), The Gran... fiane GmbH, Germany dd 26.08.15 Training and ncremental Operating Costs preparatio of theutg planguianc R onsftcoeain onralayttunnelriningluand audit., audit), ot services (including Consultants' and nremental Operatn auit),training 7. Cosultnts' ervies (icludngap-cs-3 TSAR-FNANS Auditor 19 Uzbekistan dd 29.05.15 Trinn a d ncementl! Operatin Cost TheGrat inae deaie envronen/soia an intttoa sesetpeatio ofsthebddn Docume N preparation O of-sloisionareinusrtey ans isitionldvlon t ofdithecopay LLC,. plngiaccnsaeyoeainonralwayttunnerineincdludigdt) fsltn thespreparande
The <<Pap-Angren Railway)) Project 10 n order to achieve project objectives some consultancy contracts signed from 18 July 2014 to 29 January 2016. 1) <<AL MAR CONSULTNG),, contract No.AP-CS- dated 1 October 2014 The contract is signed to finance consulting services for preparation of mandatory documents related to environmental and social safeguards policies of the World Bank. The Consultant is expected to carry out a detailed assessment of social and ecological aspects of the Project, preparing and coordinating with the World Bank final project documentation on safeguards in order to minimize negative impact on local population, environment of the Project area and on physical cultural resources. 2) Nazarov Anatoliy Viadimirovich, contract No.AP-CS-2 dated 30 December 2014 According to the Contract the Consultant will implement the following scope of: v Preparing the technical part of tender documentation for procurement of signaling and communication equipment and the application design services based on the feasibility study prepared by the design institute of "Boshtransloyiha"; Ensuring compliance of the prepared Bidding Documents with the involved ministers and departures. The Consultant is required to assist the UTY to address comments on the technical part of the BDs during the approval process with the involved ministers and departments. v/ Ensuring of providing answers to questions of bidders during bidding process. 3) Audit Company "TSAR-FNANS" LLC, Uzbekistan, contract No.AP-CS-3 dated 29 May 2015 According to the signed Contract the Consultant will express a professional opinion on the Project's financial position and of the income and expenditure for the accounting period. 4) Engineering Bureau Franke nternational Limited, England, contract No.AP-CS-4 dated 2 June 2015 According to the Contract, the Consultant will implement the following scope of: V V V Preparing a tunnel operational and maintenance manual;; Preparing a tunnel safety plan for emergency situations, fire cases during construction; Preparing a safety plan for emergency situations during operations; / Developing a comprehensive training course designed for UTY staff responsible for operations, maintenance, inspection and evaluation; / Conducting training of UTY staff based on the idea-brief agreed with UTY; / Preparing of final report that includes the revised tunnel operational manual and safety plans for emergency situations based on training results and UTY comments and suggestions. 5) NDECON CONSULTNG GmbH, Germany, contract No.AP-CS-5 dated 26 August 2015 Under the Consultancy Contract, the Consultant is responsible to ensure the deliverable of the full service performance capacity of the RW line Angren-Pap and in this connection shall implement the following tasks: v/ ((Logistic/Supply)> chain analysis training; V V Preparation of a circular noting the specific financial management and disbursement requirements of the Bank to be followed by its PU for the Project, conducting trainings in the field of asset management systems and financial statements taking into consideration international skills and experience; Marketing strategy, including support to establish a Leading Marketing Unit; / Software development (automated information system) for accounting expenditures for Project and/or loan from the World Bank, and accounting for implementation of Projects contracts.
The <<Pap-Angren Railway)) Project 11 The information about payments to consultants by Contracts for the reporting date is presented in the following table. USD Consultant Contract Paid Contract amount Payable AL MAR CONSULTNG, dd 01.10.14 156 000 156 000 0 Nazarov Anatoliy Vladimirovich, Ukraine AP-CS-2 dd 30.12.14 30 290 30 290 0 Auditor "TSAR-FNANS" LLC, Uzbekistan AP-CS-3 dd 29.05.15 14 000 14 000 0 Engineering Bureau Franke nternational LimitedEng a2d AP-CS-4 dd 02.06.15 250 000 250 000 0 NDECON CONSULTNG GmbH, Germany AP-CS-5 dd 26.08.15 249 710 249 710 0 Total 700 000 700000 0 8. Legal Status, Taxes and Levies PU was established under UTY and is not a legal entity. Services and goods acquired from Grant funds are exempted from all taxes and levies based on Tax Code of the Republic of Uzbekistan.