“PREPARATION GRANT FOR ADVISORY SUPPORT FOR THE REGIONAL TRADE INIATIVES PROJECT” MULTI-DONOR TRUST FUND, IBRD AND IDA GRANT PART A NO.TFOA4614-KG GRANT PART В NO.TFOB2766-KG The project financial statements for the year ended December 31, 2022 and independent auditor’s report “PREPARATION GRANT FOR ADVISORY SUPPORT FOR THE REGIONAL TRADE INIATIVES PROJECT” MULTI-DONOR TRUST FUND, IBRD MAND IDA GRANT PART A NO. TF0A4614-KG, GRANT PART В NO. TF0B2766-KG TABLE OF CONTENTS Page STATEMENT OF MANAGEMENT’S RESPONSIBILITIES FOR THE PREPARATION AND APPROVAL OF THE PROJECT FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022 2 INDEPENDENT AUDITOR'S REPORT 3-5 THE PROJECT FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022 Sum m ary of funds received and expenditures paid 6-7 Summary of expenditures paid by project parts 8 Notes to the project financial statements 9-16 PREPARATION GRANT FOR ADVISORY SUPPORT FOR THE REGIONAL TRADE INITIATIVES PROJECT MULTI DONOR TRUST FUND, IBRD AND IDA GRANT PART A NO. TF0A4614-KG, GRANT PART В NO. TF0B2766-KG STATEMENT OF MANAGEMENT’S RESPONSIBILITIES FOR THE PREPARATION AND APPROVAL OF THE PROJECT FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022 The following statement, which should be read in conjunction with the independent auditor’s responsibilities is made with a view to distinguish the respective responsibilities of management and those of the independent auditor in relation to the project financial statements of the “Preparation grant for advisory support for the regional trade iniatives project” (the “Project”), financing in accordance with agreement between Kyrgyz Republic and International Bank of Reconstruction and Development and international Development Association Part A Grant No. TF0A4614-KG, Part В Grant No. TF0B2766-KG . Management of the Project is responsible for the preparation of the project financial statements that present fairly, in all material respects, the summary of funds received and expenditures paid and the summary of expenditures paid by project parts of the Project for the year ended December 31, 2022 in accordance with International Public Sector Accounting Standard “Financial Reporting Under the Cash Basis of Accounting” (the “ IPSAS”) issued by the International Public Accounting Standards Board of the International Federation of Accountants and the World Bank’s Financial Management Sector Board’s “Guidelines: Annual Financial Reporting and Auditing for World Bank Financed Activities” (the “W B Guidelines”). In preparing the project financial statements, management is responsible for: • selecting suitable accounting policies and applying them consistently; • making judgments and estimates that are reasonable and prudent; • stating whether IPSAS and WB Guidelines have been followed, subject to any material departures disclosed and explained in the project financial statements; and • preparing the project financial statements on the assumption that the Project will be implemented in accordance with the established period. '.'anagement of the Project is also responsible for: • designing, implementing and maintaining effective and sound system of internal control and for revealing risks in system of internal control; • maintaining proper accounting records that disclose, with reasonable accuracy at any time, the Project financial position, and which enable them to ensure that the financial statements of the Project comply with IPSAS and W B Guidelines; ■ compliance with laws and regulations of the Kyrgyz Republic, and the requirements of the operational manual of the Project and the requirements of the W orld Bank; taking such steps as are reasonably available to them to safeguard the assets of the Project; and ■ detecting and preventing fraud, error and other irregularities. ~~e project financial statements for the year ended December 31, 2022 were approved and authorized for ssue on June 29, 2023 by the management of the Project. Diusheeva Gulzada Financial Specialist of Central Asia South Asia Electricity Transmission and Trade Project =: onal Electric Grid of Kyrgyzstan OJSC _-e 29, 2023 June 29, 2023 E s - -:ek, the Kyrgyz Republic Bishkek, the Kyrgyz Republic 2 103, Ibraimovstr. bakertilly ВС “Victory”, 7mfloor Bishkek, 720011 T: +996 (312) 90 05 05 F: +996 (312)91 05 05 contact@bakertiliy.kg Kyrgyz Republic www.bakertillv-ca.com INDEPENDENT AUDITOR'S REPORT To the management of the Project “Preparation Grant for advisory Support for the Regional Trade Initiatives project” National Electric Grid of Kyrgyzstan OJSC as Project executive agency: Report on the project financial statements Opinion W e have audited the accompanying project financial statements of the “Preparation Grant for advisory Support for the Regional Trade Initiatives project” (the “Project”) which comprise the summary of funds received and expenditures paid and the summary of expenditures paid by project parts for the year ended December 31, 2022, and a summary of significant accounting policies and other explanatory information (the "project financial statements”). In our opinion, the accompanying project financial statements present fairly, in all material respects, the summary of funds received and expenditures paid and the summary of expenditures paid by project parts of the project for the year ended December 31, 2022 in accordance with International Public Sector Accounting Standard “Financial Reporting Under the Cash Basis of Accounting” (the “IPSAS”) issued by the International Public Sector Accounting Standards Board of the International Federation of Accountants, and the World Bank’s Financial Management Sector Board’s “Guidelines: Annual Financial Reporting and Auditing for World Bank Financed Activities” (the “WB Guidelines”). Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the project financial statements section of our report. We are independent of the Project in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the project financial statements, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of matter W ithout qualifying our opinion, we draw attention to Note 2 to the project financial statements, which describe the basis of accounting. These project financial statements were prepared for complying with the appropriate World Bank Guidelines and Grant agreement requirements. These circumstances do not lead to modification of the auditor’s opinion. Other matter The project financial statements for the year ended December 31, 2021 were audited by another auditor, who expressed an unmodified opinion on the project financial statements on May 23, 2022. The project financial statements are prepared to assist the Project to comply with the requirements of the World Bank. As a result, the project financial statements may not be suitable for another purpose. 3 Responsibilities of management and those charged with governance for the project financial statements Management is responsible for the preparation and fair presentation of these project financial statements in accordance with International Public Sector Accounting Standard “Financial Reporting Under the Cash Basis of Accounting” (the “IPSAS") issued by the International Public Accounting Standards Board of the International Federation of Accountants, and the World Bank’s Financial Management Sector Board’s “Guidelines: Annual Financial Reporting and Auditing for W orld Bank Financed Activities” (the “WB Guidelines”), and for such internal control as management determines is necessary to enable the preparation of the project financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s responsibilities for the audit of the project financial statements Our objectives are to obtain reasonable assurance about whether these project 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 a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or 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 project financial statements. As part of an audit in accordance with ISAs, we exercise professional judgm ent and maintain professional skepticism throughout the audit. W e also: • Identify and assess the risks of material misstatement of the project 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 an 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 Project’s internal control; • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management; • Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Project’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the project financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Project to cease to continue as a going concern; • Evaluate the overall presentation, structure and content of the project financial statements, including the disclosures, and whether the project financial statements represent the underlying transactions and events in a manner that achieves fair presentation. 4 We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control Certificate of auditor of the Kyrgyz R Certified accountant, ACCA No. A 0069 dated October 19, 2009 Certificate of auditor of the Kyrgyz Republic Audit Partner, No. AD 0033 dated December 23, 2021 Director of Baker Tilly Bishkek LLC Audit Director Baker Tilly Bishkek LLC, License Series A No. 0049 dated July 1, 2011 issued by the State Committee on Review and Regulation of the financial market of the Kyrgyz Republic June 29, 2023 Bishkek, the Kyrgyz Republic PREPARATION GRANT FOR ADVISORY SUPPORT FOR THE REGIONAL TRADE INITIATIVES PROJECT MULTI-DONOR TRUST FUND, IBRD AND IDA GRANT PART A No. TF0A4614-KG, GRANT PART В No. TF0B2766-KG SUMMARY OF FUNDS RECEIVED AND EXPENDITURES PAID FOR THE YEAR ENDED DECEMBER 31, 2022 (in US dollars)_____ ________________________________ Actual Budget Variance Notes For the year For the year Cumulative For the year For the year Cumulative For th e year For the year Cumulative ended ended ended ended ended ended Decem ber 31, D ecem ber 31, Decem ber 31, Decem ber 31, D ecem ber 31, Decem ber 31, 2022 2021 2022 2021 2022 2021 Opening balance 4 6,360 67,722 Funds received Designated Account Grant (IBRD and IDA, Grant Part A No. TF0A4614-KG) 5 790,734 581,600 1,881,015 Direct payments 5 92,869 185,218 940,217 - - - - - - Designated Account Grant (IBRD and IDA, Grant Part В No. TF0B2766-KG) 5 Direct payments 5 - - - - - - - - - Total funds received 883,603 766,818 2,821,232 . . . Other income 215 _ 215 . . . . . Total receipts 883,818 766,818 2,821,447 .. .. . . Expenses IBRD and IDA, Grant Part A No. TF0A4614- KG Consultant engineering services 6 668,714 554,938 1,354,338 668,714 554,938 1,354,338 Incremental operating costs 6 81,586 71,250 386,310 81,631 71,414 387,367 (45) (164) (1,057) 6 PREPARATION GRANT FOR ADVISORY SUPPORT FOR THE REGIONAL TRADE INITIATIVES PROJECT MULTI-DONOR TRUST FUND, IBRD AND IDA GRANT PART A No. TF0A4614-KG, GRANT PART В No. TF0B2766-KG SUMMARY OF FUNDS RECEIVED AND EXPENDITURES PAID FOR THE YEAR ENDED DECEMBER 31, 2022 (CONTINUED) (in US dollars)_______________________________________________________________________________________________________ Actual Budget Variance Notes For the year For the year Cumulative For the year For the year Cumulative For the year For the year Cum ulative ended ended ended ended ended ended Decem ber 31, D ecem ber 31, Decem ber 31, Decem ber 31, D ecem ber 31, Decem ber 31, 2022 2021 2022 2021 2022 2021 Audit services 6 67,200 67,200 336,000 67,200 67,200 336,000 - - Local consulting services 6 65,789 134,792 737,910 65,789 134,792 737,910 IBRD and IDA, Grant Part В No. TF0B2766- KG Total expenses 883,289 828,180 2,814,558 883,334 828,344 2,815,615 (45) (164) (1,057) O ther expenses 8 - 8 Closing balance 4 6,881 6,360 6,881 - - - - - On behalf of the Diusheeva Gulzada Financial Specialist of Central Asia South Asia external Electricity Transmission and Trade Project National Electric OJSC June 29, 2023 June 29, 2023 Bishkek, the Kyrgyz Republic Bishkek, the Kyrgyz Republic The notes on pages 9-16 form an integral part of the project financial statements. The independent auditor’s report is on pages 3-5. 7 PREPARATION GRAN Г FOR ADVISORY SUPPORT FOR THE REGIONAL TRADE INITIATIVES PROJECT IBDR AND IDA MULTI-DONOR TRUST FUND, GRANT PART A No. TF0A4614-KG, GRANT PART В No. TF0B2766-KG SUMMARY OF EXPENDITURES PAID BY PROJECT PARTS FOR THE PERIOD FOR THE YEAR ENDED DECEMBER 31, 2022 (in US d o l l a r s ) _____________________________________________________________________________________ Actual Budget Variance For the year For the year Cum ulative For the year For the year Cumulative For the year For the year Cum ulative ended ended ended ended ended ended Decem ber 31, Decem ber 31, Decem ber 31, Decem ber 31, D ecem ber 31, Decem ber 31, 2022 2021 2022 2021 2022 2021 Part B. Technical Assistance and Project Im plementation Support High Voltage AC Transmission Engineers 588,199 554,938 1,273,822 588,199 554,938 1,273,822 - - - Environm ent and Social M anagem ent Support 88,548 74,713 700,590 88,548 74,713 700,590 - - - Project M anagem ent Support 81,586 68,773 383,834 81,631 68,937 384,891 (45) (164) (1,057) Audits and Financial and Revenue Management 67,200 67,200 336,000 67,200 67,200 336,000 - - - Project Com munication 57,756 57,756 115,512 57,756 57,756 115,512 - - - Coordination - 2,477 2,477 - 2,477 2,477 - - - Capacity building - 2,323 2,323 - 2,323 2,323 - - - Total expenditures 883,289 828,180 2,814,558 883,334 828,344 2,815,615 (45) (164) (1,057) On behalf of the Management: Diusheeva Gulzada Director o f projects Financial Specialist of Central Asia South Asia external relations departi Electricity Transmission and Trade Project National Electric Grid of K; stan OJSC June 29, 2023 June 29, 2023 Bishkek, the Kyrgyz Republic Bishkek, the Kyrgyz Republic The notes on pages 9-16 form an integral part of the project financial statements. The independent auditor's report is on pages 3-5. 8 PREPARATION GRANT FOR ADVISORY SUPPORT FOR THE REGIONAL TRADE INITIATIVES PROJECT MULTI-DONOR TRUST FUND, IDRD AND IDA GRANT PART A No. TF0A4614-KG GRANT PART В No. TF0B2766-KG NOTES TO THE PROJECT FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022 in US dollars) _________________________________________________________________________________ 1. GENERAL INFORMATION The Grant Agreement was concluded on August 2, 2017 between the National Electric Grid of Kyrgyzstan OJSC and the International Development Association (the “IDA”) and the International Bank for Reconstruction and Development (the “IBRD”) (together the “World Bank”) acting as Administrator of the CASA-1000 Multi-Donor Trust Fund, according to which the World Bank provided Grant No. TF0A4614-KG to the National Electric Grid of Kyrgyzstan OJSC in the amount of 1,000,000 US dollars. The Grant was provided for the implementation of “Preparation Grant for advisory Support for the Regional Trade Initiatives project” (the “Project”). According to the letter from the World Bank dated July 24, 2019 the total amount of the project's financing was increased to 3,000,000 US dollars. According to the letter from the World Bank dated June 22, 2020 the Project received a notification from IDA and IBRD on extending the Closing date of the Grant until March 31, 2022 and allocation of additional remaining funds from Multi-Donor Trust Fund in the amount of 1,566,820 US dollars as Part В of the Grant No. TF0B2766-KG. The total amount of financing amounted to 4,566,820 US dollars. According to the letter from the World Bank dated July 12, 2022 the Project received a notification on extending the Closing date of the Grant until June 30, 2024. Project purpose The objective of the Project is to create the conditions for sustainable electricity trade between the Central Asian countries of Tajikistan and Kyrgyzstan and the South Asian countries of Afghanistan and Pakistan. The Project consists of the following parts, of which that portion of Part В within the territory of the Recipient may be financed pursuant to this Agreement: Part A “Construction of High Voltage Transmission Infrastructure”. 1. High Voltage DC Transmission Line. Construction of about 750 km of 500 kV high voltage DC overhead transmission line to interconnect the electricity network of Tajikistan, from the Sangtuda converter station, to the Pakistan network, at the Peshawar converter station, and the Afghanistan network at the Kabul converter station. 2. High Voltage DC Converter Stations. Engineering design, construction, and commissioning of three high voltage DC converter stations: (i) Sangtuda converter station (1,300 MW) in Tajikistan; (fi) Kabul converter station (300 MW) in Afghanistan; and (ill) Peshawar converter station (1,300 MW) in Pakistan, including specialized AC and DC equipment. 3. High Voltage AC Transmission Interconnection between Kyrgyzstan and Tajikistan. Construction of about 475 km of 500 kV high voltage AC overhead transmission line to interconnect the electricity network of Kyrgyzstan, from Datka substation, to the Tajikistan network at the Khujand substation, along with associated substation equipment. 4. Tajikistan Grid Reinforcement. Reinforcements, including construction of 500 kV line from Regar substation to Sangtuda converter station and other parts of the network necessary to ensure transfer of Tajikistan and Kyrgyz export power to Sangtuda. 9 Part В “Technical Assistance and Project Implementation Support”. 1. High Voltage DC and High Voltage AC Owner's Engineers. Provision of consultancy services of two owner's engineers for the high voltage DC and high voltage AC portions of the Project, including for third-party monitoring and supervision during construction. 2. Environment and Social Management Support. Strengthening of the Project Implementing Entities" capacity to develop and supervise environmental and social safeguards documents, including country-specific Environmental and Social Impact Assessments and Resettlement Action Plans. 3. Audits and Financial and Revenue Management. Carrying out of annual audits of the Project accounts in the four Participating Countries and of entity audits of the Project Implementing Entities where such audits are not financed from other sources, and supporting transparent financial management of revenues generated by the Project, including the implementation of a financial management improvement program. 4. Project Management Support. Provision of: (i) Project management support to Project Implementing Entities, including procurement and contract management, financial management, monitoring and evaluation of Project performance and results as well as Incremental Operating Costs; (ii) training and capacity building focusing on High Voltage DC operations and maintenance, power dispatch; and (ill) commercial and legal advisory services on the commercial transactions. 5. Coordination. Strengthening of the Inter-Governmental Council through financing of technical, commercial and legal services and Incremental Operating Costs. 6. Project Communications. Carrying out of communications campaign and information-sharing activities directed at relevant stakeholders, particularly communities, within the Project area. 7. Capacity building. Building capacity of personnel of the Project Implementing Entities and relevant government officials in order to develop a regional electricity market. Part С “Community Support Program”. Carrying out the Community Support Program for the benefit of the communities living in the area of the Project. Project implementation The Project is implemented by National Electric Grid of Kyrgyzstan OJSC (the “NEGK”). Project management is carried out by the General Agreem ent of the Intergovernmental Council, the Agreement on the purchase of electricity, Credit agreements with donor organizations, Debt obligations with the Ministry of Finance of the Kyrgyz Republic, the Secretariat of the Project, and in accordance with Decrees and Orders of the Government of the Kyrgyz Republic. Implementation of the Project is carried out by the National Electric Grid of Kyrgyzstan OJSC. 2. PRESENTATION OF THE PROJECT FINANCIAL STATEMENTS Basis of preparation These project financial statements have been prepared in accordance with the International Public Sector Accounting Standard (the “IPSAS”) “Financial Reporting under the Cash Basis of Accounting” issued by the Public Sector Committee of the International Federation of Accountants, and incorporate the following principal accounting policies, which have been consistently followed in all material respects and comply with the World Bank’s Financial Management Sector Board’s “Guidelines: Annual Financial Reporting and Auditing for World Bank Financed Activities” (the “WB Guidelines”). 10 Under the cash basis system income (or expenditure) is recognized when cash is received (or paid) irrespective of when goods or services are received or provided. The Project's approved budget disclosed by categories of expenses is not publicly available and as such comparison of budget and actual amounts is not presented. These project financial statements consist of: • Summary of funds received and expenditures paid; • Summary of expenditures paid by project parts; • Notes to the project financial statements, including short description of main statements of accounting policy and other descriptive notes. The reporting currency of these project financial statements is US dollars (the - “USD”). 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash basis of accounting Project financial statements are prepared on a cash basis of accounting. The cash basis of accounting recognizes transactions and events only when cash (including cash equivalents) is received or paid, project financial statements prepared under the cash basis provide readers with information about the sources of cash raised during the period, the purposes for which cash was used and the cash balances at the reporting date. The measurement focus in the project financial statements is balances of cash and changes therein. Foreign currency Operations in foreign currency initially are counted in functional currency using the currency exchange rate settled by commercial bank on a date of operation. All payments made in local currency are translated into US dollars at the official exchange rate defined by serving commercial bank at the date of transaction. All exchange differences arising from the redemption or revaluation of monetary items are included in the summary of funds received and expenditures paid. Cash and cash equivalents Cash and cash equivalents include cash due from banks, which can be converted to the corresponding amount of cash in the short term. Taxes The calculation and payment of income tax on income of local employees and consultants, as well as insurance contributions to the Social fund of the Kyrgyz Republic, is made in accordance with the requirements and rates set forth in the Tax Code of the Kyrgyz Republic and relevant the Kyrgyz Republic legislation. Project expenses The expenses are recorded in the period when they were actually paid. Sources of funds The funds were provided by the W orld Bank and IBRD to the Project by direct payment, initial deposit and replenishment of designated account. Other income Other income represents interest income accrued by the servicing commercial bank on cash balances of the designated account. 11 Other expenses Other expenses comprise payments for bank services. Budget The project budget is formed on the basis of Procurement Plan approved by the World Bank. Grant financing and uses of funds is carried out according to the Grant Agreement with the International Development Association (the “IDA”) and the International Bank for Reconstruction and Development (the “IBRD”). The procurement plan is monitored in real time through the World Bank’s secure website “Client Connection” and the electronic procurement planning and monitoring system “STEP”. The project budget presented in the summary of funds received and expenditures paid and in the summary of expenditures paid by project parts was based on the budget included in the interim financial reports, which was submitted to the W orld Bank. 4. CASH AND CASH EQUIVALENTS Cash and cash equivalents as at December 31, 2022 and 2021 are presented as follows: Source of Currency December 31, Decem ber 31, financing 2022 2021 Grant Part A No. Designated account TF0A4614-KG US dollar 6,618 6,190 Grant Part A No. Transit Account TF0A4614-KG Kyrgyz som 30 144 Grant Part A No. Transit Account TF0A4614-KG Euro 26 26 Interest account Other US dollar 207 - 6,881_____________ 6,360 5. FUNDS RECEIVED The funds received were provided by the following methods and sources of financing: For the year ended December 31, 2022 Grant Part A No. Grant Part В No. Total TF0A4614-KG TF0B2766-KG R eplenishm ent of designated account 790,734 - 790,734 D irect payment 92,869 - 92,869 883,603 883,603 For the year ended December 31, 2021 Grant Part A No. Grant Part В No. Total TF0A4614-KG TF0B2766-KG Replenishm ent of designated account 581,600 - 581,600 D irect payment 185,218 - 185,218 766,818 766,818 Cumulative Grant Part A No. Grant Part В No. Total TF0A4614-KG TF0B2766-KG Initial deposit/ replenishment of designated account 1,881,015 - 1,881,015 Direct payment 940,217 - 940,217 2,821,232 _ 2,821,232 12 6. EXPENSES Breakdown o f Project expenses by categories and sources of financing is presented as follows: For the year ended For the year ended Cumulative Decem ber 31, 2022 December 31, 2021 Grant Part A No. Grant Part В No. Grant Part A No. Grant Part В No. G rant Part A No. Grant Part В No. TF0A4614-KG TF0B2766-KG TF0A4614-KG TF0B2766-KG TF0A4614-KG TF0B2766-KG Consulting services Consultant engineering services 668,714 554,938 1,354,338 Local consulting services 65,789 134,792 737,910 A udit services 67,200 67,200 336,000 801,703 756,930 2,428,248 Increm ental operating costs and trainings Salary o f local consultants 61,390 47,046 216,250 Travel expenses 19,041 - 18,658 - 128,906 Bank commission 307 - 278 - 1,141 Acquisition o f furniture and office equipm ent _ _ . . 20,981 Trainings - - - - 1,250 O ther operating expenses 848 - 5,268 - 17,782 81,586 71,250 386,310 883,289 _ 828,180 _ 2,814,558 13 7. FINANCIAL POSITION Financial position as at December 31, 2022 and 2021 is as follows: December 31, Decem ber 31, 2022 2021 ASSETS AND EXPENSES Cash and cash equivalents 6,881 6,360 Cumulative expenses 2,814,558 1,931,269 Other expenses ______________ 8_ _______________ TOTAL ASSETS AND EXPENSES 2,821,447_________ 1,937,629 FINANCING Funds received 2,821,232 1,937,629 O ther income ____________ 215 _______________^ TOTAL FINANCING 2,821,447_________ 1,937,629 8. W ITHDRAW AL APPLICATIONS W ithdrawal applications for the year ended December 31, 2022 comprise: Grant Part A No. TF0A4614-KG Application Date Replenishm ent Direct payment Total of designated account 29 February 2 3 ,2 0 2 2 398,000 - 398,000 33 October 13 ,2 0 2 2 - 67,200 67,200 32 October 2 1 ,2 0 2 2 392,734 - 392,734 34 October 26, 2022 ______________ - _________ 25,669___________ 25,669 790,734___________ 92,869__________ 883,603 Withdrawal applications No. 28, No. 31 and No. 30 for Grant Part A No. TF0A4614-KG dated February 1, 2022, September 7, 2022 and September 5, 2022 in the amount of 6,417 US dollars, 399,000 US dollars and 67,200 US dollars, respectively, were deleted. 14 9. STATEMENT OF DESIGNATED ACCOUNTS Statement of designated account for the years ended December 31, 2022 and 2021 is presented as follows: Grant Part A No. Total Source of Financing TF0A4614-KG Bank account number 1091820100040808 Optima Bank Bank OJSC 104/1 Kiev St., Bishkek, Kyrgyz Bank location Republic, 720040 Account currency US Dollar Opening balance as at January 1, 2021 67,668 67,668 Replenishment 581,600 581,600 Total funds received 581,600 581,600 Expenses paid 643,078 643,078 Сlosing balance as at December 31, 2021 6,190 6,190 Replenishment 790,734 790,734 Total funds received 790,734 790,734 Expenses paid 790,306 790,306 Сlosing balance as at December 31, 2022 6,618 6,618 10. UNDRAWN FUNDS Undrawn funds as at December 31, 2022 are presented as follows: Grant Part A No. Grant Part B No. TF0A4614-KG TF0B2766-KG in USD in USD Approved financing amount 3,000,000 1,566,820 Disbursed from January 5, 2018 to December 31, 2022 2,821,232 - Undrawn amount as at December 31, 2022 178,768 1,566,820 Grant Part A No. Grant Part B No. TF0A4614-KG TF0B2766-KG in USD in USD Funds received as at January 1, 2022 1,927,629 - Disbursed during the year ended December 31, 2022 883,603 - Funds received as at December 31, 2022 2,821,232 - 15 11. COMMITMENTS In the normal course of activities, the Project concludes agreements with suppliers of goods and services in accordance with the established budget and procurement plan. Commitments as at December 31, 2022 are presented as follows: Counterparty Component Contract No. Cost per Contract Paid up to Remaining Contract (in Currency December amount to currency) 31, 2022 (in be paid currency) (in currency) Chui Ecological Part B. Technical TF-CQS-2020-2/23- Laboratory LLC Assistance and 15/0243 Project Implementation Support 26,777 US Dollars 16,066 10,711 Monenco Iran Part B. Technical 23-23/0092 Consulting Assistance and Engineers Co. Project Implementation Support 3,873,295 US Dollars 1,354,337 2,518,958 Akchabar LLC Part B. Technical TF-CQS-2019-1/23- Assistance and 15/0242 Project Implementation Support 128,346 US Dollars 115,511 12,835 12. LEGAL CASES There were no any legal claims related to the Project. 13. EVENTS AFTER THE REPORTING DATE During 2023 until the date of issue of these project financial statements, the World Bank has provided financing to the Project as follows: Financing source Application Date Initial deposit/ replenishment of designated account in US dollars Grant Part A No. TF0A4614-KG 35 February 13, 2023 178,768 Grant Part B No. TF0B2766-KG 2 February 23, 2023 221,000 Grant Part B No. TF0B2766-KG 4 April 20, 2023 179,000 Grant Part B No. TF0B2766-KG 5 May 26, 2023 398,868 977,636 Based on withdrawal application No. 36 for Grant Part A No. TF0A4614-KG dated April 14, 2023 the Project documented expenses in the amount of 178,948 US dollars. Withdrawal applications No. 1 and No. 3 for Grant Part B No. TF0B2766-KG dated January 26, 2023 and April 6, 2023 in the amount of 221,000 US dollars and 178,000 US dollars, respectively, were deleted. As at the date of issue of the project financial statements no other significant events or transactions occurred which should be disclosed in the project financial statements, except for the events described above. 16 ■ Baker Tilly Bishkek LLC trading as Baker Tilly is a member of the global C o n ta c t us network of Baker Tilly International Ltd., the members of which are 103, Ibraimov str., BC "Victor separate and independent legal entities. 7th floor, Bishkek, 720011, Kyrgyz Republic © 2 0 2 3 Baker Tilly www.bakertilly-ca.com m 1 § s i 1 I ш w ■§