Public Disclosure Authorized JSDF GRANT FOR THE SUPPORT TO COMMUNTY SEED FUNDS PROJECT - JSDF GRANT NO.TF014029 TABLE OF CONTENTS Page Public Disclosure Authorized STATEMENT OF MANAGEMENT'S RESPONSBLTES FOR THE PREPARATON AND PRESENTATON OF THE SPECAL PURPOSE FNANCAL STATEMENTS 3 NDEPENDENT AUDTOR'S REPORT 4-5 SPECAL PURPOSE FNANCAL STATEMENTS For the year ended 31 December 2016: Statement of cash receipts and payments 6 Statement of expenditures per components 7 Public Disclosure Authorized Public Disclosure Authorized 2 2 Notes to the special purpose financial statements 8-12 ANNEX 1. RECONCLATON BETWEEN THE AMOUNTS SUBMTTED BY THE ABCC AND DSBURSED BY THE WORLD BANK 13 *2
STATEMENT OF MANAGEMENT'S RESPONSBLTES FOR THE PREPARATON AND PRESENTATON OF THE SPECAL PURPOSE FNANCAL STATEMENTS FOR g THE YEAR ENDED 31 DECEMBER 2016 The management of the Agribusiness Competitiveness Center (hereinafter: ABCC) is responsible for the preparation of the special purpose financial statements of "JSDF Grant for the Support to Community Seed Funds Project" (hereafter: the Project) financed by Letter Agreement JSDF Grant No.TF014029 dated 7 March 2014, that present fairly the Project's cash receipts and payments for the year ended 31 December 2016, in compliance with the nternational Public Sector Accounting Standard "Financial Reporting under the Cash Basis of Accounting" (PSAS-Cash Basis) issued by the nternational Public Sector Accounting Standards Board (PSASB) within the nternational Federation of Accountants (FAC) and the Financial Management Manual for World Bank Financed nvestment Operations (WB Guidelines). n preparing the special purpose financial statements, ABCC's management is responsible for: * Properly selecting and applying accounting policies; Presenting information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; Providing additional required disclosures for the year ended 31 December 2016. ABCC's Management is also responsible for: * Designing, implementing and maintaining an effective and sound system of internal controls, throughout the Project; * Maintaining adequate accounting records that are sufficient to show and explain the Project's transactions, and which enable them to ensure that the special purpose financial statements of the Project comply with PSAS- Cash Basis and the WB Guidelines; * Taking such steps that are reasonably available to them to safeguard the assets of the Project and to affirm that funds received have been used in accordance with the Letter Agreement JSDF Grant No.TF014029 dated 7 March 2014, and World Bank related guidelines, with due attention to economy and efficiency, and only for the purposes for which the financing was provided; and * Preventing and detecting fraud and other errors. The special purpose financial statements for the year ended 31 December 2016 were authorized for issue on 22 March 2017 by the ABCC's Management. On behalf of the ABCC's Management: oobk,directo, Januzakova Aigul Financial Manager 3
* "UOU-LtflHTS" U "SOS-AUDT" LTD NDEPENDENT AUDTOR'S REPORT To the management of the Agribusiness Competitiveness Center Opinion We have audited the special purpose financial Seed Munds statements Projeter of "JSDF ("Project") Grant financed for Support by to Letter Community March 2014 Agreement (Letter JSDF Grant No. TF014029 (-ABCC"), Agree sent") and implemented dated which by 7 comprise the statement of Agribusiness cash receipts Competitiveness and payment, and Center expenditures per components for the the year ended statement 31 December 2016, of and notes to the special financial purpose statements, including a summary of significant accounting policies. n our opinion,. the accompanying financial statements present fairly, in all material respects and the payment cash for receipts the year ended 31 December 2016 in accordance with nternational Public Sector Accounting Standard: Financial Reporting Under the Cash Basis (PSAS-Cash of Accounting, Basis); 2, funds have been used in accordance with nternational the conditions Development of the Letter Association Agreement (DA) between and the the Kyrgyz Republic, and WB with Guidelines, due attention to economy and financing efficiency, and only for was the purposes provided; fir which the 3. Supporting documents records and accounts reimbursednt have been of maintained to support claims and expenditures incurred. Expenditures for reimbursed against are eligible included for financing in the withdrawal under the applications Unaudited Letter Financial Agreement. Statements (FSs) issued nterim by PU during the reporting period are agreement in with the underlying books of account; 4. The Designated accounts used Letter have Agreement been maintained and WB in Guidelines; accordance with the provisions of the 5. Goods and Services financed have been World procured Bank related in accordance guidelines. with the Letter Agreement and Basis for Opinion We conducted nternational our audit in Auditing accordance and with Assurance nternational Standards Standards (AASB3) on Auditing of (SAs) the nternational as issued by Accoutants (FAC) Federation OUr responsibilities of Responsibey under those standards r the Audit are further of de described Financial in Statements the Auditor's Coe Pofeths fr section of our report. We are Code P ein accordaince with the (nernational independent 0/fEthit-s of for Profissional Accountanis Ethics (ESYBA Standards Code), and Board we for have Accountants' requirements in accordance fulfilled with ESBA Code. out We other believe that ethical the audit evidence we have sufficient obtained and is appropriate to provide a basis for our opinion. 91; l.bptwlu 0037, UL Shqpwlujwl 38155; 9tr2' (+37410) 20 11 51; www. sosaudit.am; TL-num fnfo@sosaudit.am 38/55 A. Tigranyan, 0037 Yerevan, RA; Tel.: (+37410) 211 51; www sosauditam; E-mail: ino@sosaudita
"UOU-Ufl-hS" Uile "SOS-AUDT" LTD Responsibilities of the Managementfor the Financial Statements Management of the ABCC is responsible for the preparation and fair presentation of the special purpose financial statements in accordance with PSAS-Cash Basis issued by the nternational Public Sector Accounting Standards Board (PSASB) of the FAC and Financial Management Manual for World Bank Financed nvestment Operations ("WB Guidelines"), and for such internal control as management determines is necessary to enable the preparation of special purpose financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility for the Audit of the Special Purpose Financial Statements Our objectives are to obtain reasonable assurance about whether the special purpose financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is high level of assurance, but is not a guaranty that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements arise from fraud and error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these special purpose financial statements. As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also: * dentify and assess the risks of material misstatement of the special purpose financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. * Obtain ain understanding of internal control relevant to the audit 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 internal control. * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. * Evaluate the overall presentation, structure and content of the special purpose financial statements, including the disclosures, and whether the special purpose financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with management regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. "SOS-Audit" LLC 22 March 2017 1A Man- OSA 00051 3 Gnel Khachatryan, FCCA Auditor -R; p.bpttlwf 0037, U. Siqpwtuul 38/55; 9bn. (+37410) 20 11 51; www. sosaudit.am; ti-lnuun' info@sosaudit.am 38/55 A. Tigranyan, 0037 Yerevan, RA; Tel,: (+37410) 20 1 51; www. sosaudit.am; E-mail: info@sosaudit.am
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JSDF Grant for the Support to Community Seed Funds Project JSDF Grant No. TF014029 Notes to the special purpose financial statements For the year ended 31- December 2016 1. General inforniation L. The Project n accordance with Letter Agreement dated 7 March 2014, the nternational Development Association ("DA", or """), acting as administrator of grant funds provided by the Japan, under the Japan Social Development Fund (JSDF), provided Kyrgyz Republic a grant in the amount of 2,800,000 United States dollars (). The JSDF Grant No.TF014029 was provided for implementation of "JSDF Grant for the Support to Community Seed Funds Project" (the Project). The Grant became effective on 13 August 2014. The Closing date of the Grant expenditures is set 7 March 2018. The Grace Period for submitting withdrawal application for expenditures incurred before the Closing date is four months following the Closing dates. 1.2. The Project objectives The objective of this project is to increase the agricultural productivity of the beneficiaries in the Project areas through providing support for expansion of the Community Seed Fund system. The Project consists of the following parts: Part A. Support for Expansion of Community Seed Fund System (1) Developing the capacity for expansion of the Community Seed Fund (CSF) and Self-Help Groups (SHG) system through training of non-govemmental organizations such as CSF and SHG mobilizers and trainers, and mobilizing new CSFs and SHGs based on relevant eligibility criteria; (2) Supporting CSFs and SHGs through provision of goods; (3) Providing training and extension services to small and vulnerable farmers on sustainable agricultural practices. Part B: Project Management, Monitoring and Evaluation, and Knowledge Dissemination (1) Monitoring of the Project's progress and results; and (2) Carrying out project management and administration activities. 1.3. The Project Budget and Financing The Project is 100% financed by JSDF Grant No.TFO 14029, inclusive of taxes. JSDF Grant Category No.TF014029 Total (1) Goods, Non-Consulting Services, Consultants' Services, Training and Operating Costs under the PLoject 2,800,000 2,800,000 Total 2,800,000 2,800,0 _Pj 1.4. Project mplementation The Project is implemented by Agribusiness Competitiveness Center (ABCC). ABCC was established on 2004, November 29 by Government Resolution # 873 of the Kyrgyz Republic. The ABCC address is: 114 Chui avenue, Bishkek 720040, the Kyrgyz Republic.
9 JSDF Grant for the Support to Community Seed Funds Project JSDF Grant No. TF014029 Notes to the special purpose financial statements For the year ended 31 December 2016 2. Summary of significant accounting policies 2.1. Preparation and presentation offinancial statements The special purpose financial statements are prepared in accordance with the nternational Public Sector Accounting Standard: Financial Reporting Under the Cash Basis of Accounting (PSAS-Cash Basis), issued by the nternational Public Sector Accounting Standards Board (PSASB) within the nternational Federation of Accountants (FAC), and presented in accordance with Financial Management Manual for World Bank Financed nvestment Operations (March 2010): RM 3 - Financial Reporting and Auditing. The principal accounting policies applied in the preparation of these special purpose financial statements are set out below. 2.2 Cash basis of accounting Project financing is recognised as a source of project finds when the cash is received. Project expenditures are recognised as a use of project finds when the payments are made. 2.3 Reporting currency The reporting currency of these special purpose financial statements is United States dollars (). The expenditures made in local currency, Kyrgyz Som (KGS), are translated into based at the exchange rate prevailing at the date of the transaction at the Demir Kyrgyz nternational Bank (DKB). The exchange rate defined by the DKB is as follows: 31 December 2015: 1 = 75.50 KGS. 31 December 2016: 1= 69.30 KGS. 2.4. Taxes The taxes are paid in accordance with the tax regulation of the Kyrgyz Republic,
JSDF Grant for the Support to Community Seed Funds Project JSDF Grant No. TF014029 Notes to the special purpose financial statements For the year ended 31 December 2016 3. Summary of Summary Reports and SOEs Payment categories Withdrawal Withdrawal application application (1) Goods, Non-Consulting No value date Services, Consultants' Services, Training and Operating Costs under the Project Total 5 17.Mar.2016 125,777.58 125,777.58 6 28.Apr.2016 223,823.49 223,823.49 7 23.May.2016 157,045.66 157,045.66 8 08.Sep.2016 175,869.60 175,869.60 9 08.Dec.2016 167,183.51 167,183.51 Total _849,699.84 849,699.84 4. Statement of Designated Account Bank account number 1180000057270828 Bank DEMR KYRGYZ NTERNATONAL BANK Bank location Chuy 245, Bishkek, Kyrgyz Republic Currency Grant No. TF014029 Year ended 31 Dec 2016 1. Opening balance as at 01.01.2016 236,296 2. Add: opening discrepancy 3. W13 advance/replenishment 849,700 4. Less: Refund to WB from DA - 5. Present outstanding amount advanced to DA 1,085,996 6. DA closing balance as at 31.12.2016 270,813 7. Add: Amount of eligible expenditures paid 815,183 8. Less: interest earned (if credited to DA) - 9. Total advance accounted for 1,085,996 10. Closing discrepancy (5)-(9) 10
1 JSDF Grant for the Support to Community Seed Funds Project JSDF Grant No. TF014029 Notes to the special purpose financial statements For the year ended 31 December 2016 5. Statement of Financial Position The Statement of Financial Position discloses assets, liabilities and net assets of the Projects as at reporting date. t is prepared in accrual basis that is transactions are recognized when they occur (and not only when cash is received or paid). Note As at As at 31 Dec 2016 31 Dec 2015 ASSETS Cash 6 280,219 241,344 Prepayments.. Total assets 280,219 241,344 LABLTES Payables 3,278 - Total liabilities 3,278. NET ASSETS Cumulative income JSDF Grant No.TF014029 8 1,647,324 797,624 Other income (accrued interest) 10,942 5,827 Cumulative expenses 1,658,266 803,451 Project expenses 7 1,379,788 561,328 Other expenditures 1,535 777 1,381,324 562,105 Foreign exchange gain/(loss) (1) (2) Total net assets 276,941 241,344 6. Cash Underlying As at As at Currency 31 Dec 2016 31 Dec 2015 JSDF Grant No.TF014029 Designated Account 270,813 236,296 Oe Other 270,813 236,296 nterest account 9,394 5,034 nterest account KGS 12 14 9,406 5,048 280,219 241,344 (*) All accounts are held at Demir Kyrgyz nternational Bank (Bishkek, Kyrgyz Republic). 1 11
JSDF Grant for the Support to Community Seed Funds Project JSDF Grant No. TF014029 Notes to the special purpose financial statements For the year ended 31 December 2016 7. Project Expenditures Budget Execution Cumulative Expenditures as at 31 Dec 2016 Total budget Execution Category % (1) Goods, Non-Consulting Services, Consultants' Services, Training and Operating Costs under the Project 1,376,510 2,800,000 49% Total 1,376,510 2,800,000 49% 8. Financing JSDF Grant No.TF014029 Reporting Cumulative as year at 31 Dec 2016 Advances/ (advance recovery) - 300,000 Direct Payments - SOE and Summary Report 849,700 1,347,324 Total 849,700 1,647,324 Total financing budget 2,800,000 Percentage of finance provided as at 31 Dec 2016 59% 1 12
JSDF Grant for the Support to Community Seed Funds Project JSDF Grant No. TF014029 ANNEX 1. RECONCLATON BETWEEN THE AMOUNTS SUBMTTED BY THE ABCC AND DSBURSED BY THE WORLD BANK For the year ended 31 December 2016 (Amounts are shown in US dollars) Expenditure Category Application ABCC No WB Difference (1) Goods, Non-Consulting Services, Consultants 5 125,777.58 Services, 125,777.58 Training and Operating Costs under the 6 223,823.49 223,823.49 Project 7 157,045.66 157,045.66-8 175,869.60 175,869.60-167,183.51 167,183.51 Total 849,699.84 849,699.84 84,9.84 849,699.84 13