PROJECT <<PREPARATION OF NEW PROJECT
<<LIVESTOCK SECTOR DEVELOPMENT PROJECT
IN THE REPUBLIC OF UZBEKISTAN> >
(GRANT AGREEMENT N2TF0A3025-UZ)
INDEPENDENT AUDITOR'S REPORT AND
SPECIAL FINANCIAL STATEMENTS FOR
THE PERIOD FROM 01 JANUARY 2018 TO 31 MAY 2018


CONTENTS
INDEPENDENT AUDITOR'S REPORT                                       1
SPECIAL BALANCE SHEET _4
FINANCIAL STATEMENTS ON THE SOURCES AND USES OF FUNDS OF GRANT AGREEMENT  5
REPORT ON THE USE OF FUNDS BY CATEGORY                            6
DESIGNATED ACCOUNT IN USD RECONCILIATION STATEMENT                7
DESIGNATED ACCOUNT IN UZS RECONCILIATION STATEMENT                8
NOTES TO FINANCIAL STATMENTS                                     9


GrantThornton
An instinct for growth
AO 000 ((Grant Thornton))
Pecny6nMKa Y36eKMCaH,
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yn. A6as. 1A
Ten.: +998 (71) 230-45-43
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Republic of Uzbekistan
Tel.: +998 (71) 230-45-43
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INDEPENDENT AUDITOR'S REPORT                                                      W: www.grantthornton.uz
in              To the Management of the Agency for implementation of projects in
the field of agroindustry and food security
Opinion
We audited the special financial statements (hereinafter referred to as the financial statements) of the
(<Preparation of a new Project <<Livestock Sector Development Project in the Republic of Uzbekistan>)
(hereinafter referred to as the Project) financed by the World Bank International Development Association
(hereinafter - IDA) from the funds of the Trust Fund for Institutional Development of the Countries of the
Europe and Central Asia Region (hereinafter referred to as the Trust Fund) Grant No. TF0A3025-UZ under
the Grant Agreement dated 3 November 2016 (hereinafter referred to as the Grant Agreement) for the period
from 01 January 2018 to 31 May 2018. The special financial statements include: Special balance sheet, Financial
statements on the sources and uses of funds of Grant Agreement, Report on the use of funds by category,
Designated account in USD and UZS reconciliation statement, Notes to the special financial statements.
The special financial statements are prepared by the management of the Agency for implementation of projects in
the field of agroindustry and food security (previously named Rural Restructuring Agency) (hereinafter -
UZAIFSA) under the cash basis of accounting, in accordance with the International Public Sector Accounting
Standards (hereinafter referred to as IPSAS) issued by the International Public Sector Accounting Standards
Board of the International Federation of Accountants.
In our opinion, the accompanying financial statements present fairly, in all material respects, the sources and
uses of funds of the Project as at and for the period from 01 January 2018 to 31 May 2018 in accordance with
the terms of the Grant Agreement and IPSAS.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISA). Our responsibilities
under those standards are further described in the "Auditor's responsibility for the audit of financial statements"
section of our report. We are independent of the Project in accordance with the ethical requirements that are
-      ~       relevant to our audit of the financial statements in the Republic of Uzbekistan, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Member of Grant Thornton International                                                 it   ID 5 100 7829


Responsibiity of the Management and Those Charged with Corporate Governance for the Financial
Statements
Management of the UZAIFSA is responsible for the preparation and fair presentation of these financial
statements in accordance with IPSAS: "Financial reporting on the cash basis of accounting" and for the internal
control system that management considers necessary for the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, management of the UZAIFSA is responsible for assessing the project's
ability to continue with the project, disclosing, where applicable, issues related to ongoing activities and the use of
the basis for accounting, unless management intends to complete or terminate the Project or not have a realistic
alternative for doing so.
The persons responsible for the management are responsible for overseeing the preparation of the financial
statements of the Project.
Auditor's Responsibiflty for the Audit ofFinancial Statements
Our objective is to obtain reasonable assurance that the financial statements are free from material misstatement,
whether due to fraud or error, and in the issuance of an audit report that contains our opinion. Reasonable
confidence is a high degree of certainty, but it is not a guarantee that an audit conducted in accordance with
International Standards on Auditing always reveals significant distortions if they exist. Misstatements can be the
J -result of unfair acts or mistakes and are considered significant if one can reasonably assume that individually or
collectively they can affect the economic decisions of users made on the basis of these financial statements.
As part of an audit conducted in accordance with International Standards on Auditing, we apply professional
judgment to retain professional skepticism throughout the audit. In addition, we perform the following:
-   identify and assess the risks of material misstatement of financial statements due to fraud or error;
develop and conduct audit procedures in response to these risks; we obtain audit evidence that is
sufficient and appropriate to serve as a basis for expressing our opinion. The risk of non-detection of
material as a result of unfair acts is higher than the risk of not detecting a significant distortion as a result
of an error, since unfair acts may include conspiracy, fraud, intentional omission, misrepresentation of
information or actions bypassing the internal control system;
-   get an understanding of the internal control system that is relevant to the audit, in order to develop audit
procedures that are appropriate for the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Project's internal control system;
-   assess the proper nature of the accounting policies applied and the reasonableness of accounting
estimates and the corresponding disclosure of information prepared by management;
-   make a conclusion about the legitimacy of management's use of the assumption of business continuity,
and on the basis of the obtained audit evidence - the conclusion whether there is a significant uncertainty
in connection with events or conditions that may raise significant doubts in the ability of the Project to
continue its business continuously. If we conclude that there is significant uncertainty, we must draw
attention to our disclosure in the financial statements, or, if such disclosure is inappropriate, modify our
opinion. Our conclusions are based on the audit evidence received before the date of our audit report.
L                      However, future events or conditions may lead to the Project losing the ability to continue its business
continuously;
-   assess the presentation of the financial statements in general, its structure and content, including
disclosure of information, as well as whether the financial statements present the underlying operations
and events in a manner that ensures their reliable representation;
-   obtain sufficient appropriate audit evidence relating to the financial information of the organization or
activities within the Project in order to express an opinion on the financial statements. We are responsible
for the management, control and conduct of the Project's audit. We are main fully responsible for our
audit opinion.


L
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 that we
identify during the audit.
Partner:                               N.    imov
Auditor:                                 . Abdullahodjaev
28 August 2019
Tashkent, Uzbekistan
Ew
t:


gPreparation of a New Project ( Livestock Sector Development Project in the Republic of Uzbekistano o
(Grant Agreement No. TF0A3025-UZ)
Special Financial Statements under the cash basis of accounting for the period from 01 January 2018 to
31 May 2018 (in US dollars, unless otherwise stated)                                        4
SPECIAL BALANCE SHEET
For the period from 01 January 2018 to 31 May 2018
As at 01.01.2018        As at 31.05.2018
ASSETS
Cash and cash equivalents                                        34 587                    88
TOTAL ASSETS                                                     34587                      88
OWN FUNDS/FINANCING
IDAFinancing                                                    338570                 135006
including: Opening cash balance at01.01.2018                         -                  34587
Total expenditure, net                                         (303983)               (134918)
including: Exchange rate difference                                182                    142
TOTAL OWN FUNDS/RNANCING                                         34587                      88
Signed on behalf of the UZAIFSA Management on 28 August 2019.
Deputy General   ector                          Chief Accountant
G. Ganiev                                       G. Gubieva
Notes to the financial statements on pages from 9 to 12 are an integralpart of these statement.


((Preparation of a New Project ( Livestock Sector Development Project in the Republic of Uzbekistan> 
(Grant Agreement No. TF0A3025-UZ)
Special Financial Statements under the cash basis of accounting for the period from 01 January 2018.
31 May 2018 (in US dollars, unless otherwise stated)                                        5
FINANCIAL STATEMENTS ON THE SOURCES AND USES OF FUNDS OF GRANT
AGREEMENT
For the period from 01 January 2018 to 31 May 2018
In US dollars                                        Budget    As at 31.05.2018  Cumulative total
Opening cash balance
Designated account in USD - UZAlFSA                                    34264            34264
Designated account in UZS - UZAlFSA                                      323               323
Total cash available as at1 January, 2018                              34587            34587
SOURCES OF FUNDS
Designated Account Replenishment                          -                 -          240141
Direct Payments                                           -           107605           171 473
Interbank comission fee                                   -             (182)            (208)
Return of funds to the World Bank                                     (7 004)           (7 004)
Total replenished                                         -           100419           404402
Total funds                                               -           135006           438989
USE OF FUNDS BY CATEGORY
PartA Goods, works, consultants' serices, (including
auditing services)
Part B: Trainings                                     1 000                 -                -
Part C: Incremental Operating Costs                   1 000                 -             (766)
Total expensed                                       500 000         (135 060)        (439 225)
Exchange rate difference                                  -              142               324
Excess of the amount of funds received over the                           88                88
amount of payments
Closing cash balance
Designated account in USD - UZAJFSA                                       88                88
Designated account in UZS - UZAlFSA                                        0                 0
Total funds as at 31 May, 2018                            -88                               88
Signed on behalf of the UZAIFSA Management on 28 August 2019.
Deputy General De tor                           Chief Accountant
G. Ganiev                                       G. Gubieva_
-Notesr to thefiuvaniastatementf o;7 pages fivmn 9 to 12 a.~ -ea inltegralparl! of lbei-estafenloil.r


(Preparation of a New Project a Livestock Sectortevelopment Project in the Republic of Uzbekistan>>
(Grant Agreement No. TF0A3025-UZ)
Special Financial Statements under the cash basis of accounting for the period from 01 January 2018 to
31 May 2018 (in US dollars, unless otherwise stated)                                         6
REPORT ON THE USE OF FUNDS BY CATEGORY
For the period from 01 January 2018 to 31 May 2018
Actual                 Budget         Variance
In the US dollars
As at 31.05.2018  Cumulative      Cumulative      Cumulative
CATEGORY
Part A: Goods, works, consultants' services,
(inludngaudtin srvies            (135 060)     (438 459)       (498 000)        (59 541)
(including auditing services)
Part B: Trainings                               -             -           (1 000)         (1 000)
Part C: Incremental Operating Costs             -          (792)          (1 000)          (208)
Total expenditure                        (135 060)      (439 251)       (500 000)        (60 749)
Signed on behalf of the UZAIFSA Management on 28 August 2019.
Deputy General irector                          Chief Accountant
G. Ganiev                                       G. Gubieva
Notes to the financial statements on pages frm 9 to 12 are an integral pat of these statements.


<<Preparation of a New Project ( Livestock Sector Development Project in the Republic of Uzbekistan))
(Grant Agreement No. TF0A3025-UZ)
Special Financial Statements under the cash basis of accounting for the period from 01 January 2018 to
31 May 2018 (in US dollars, unless otherwise stated)                                         7
DESIGNATED ACCOUNT IN USD RECONCILIATION STATEMENT
For the period from 01 January 2018 to 31 May 2018
AccountNL                                                                 22696 84010 39656 37010
Depositary Bank                                                   Tashkent city branch JSCB "Asaka"
Address                                                                       Tashkent, Uzbekistan
Source of financing                                                  Related loan/grant: TFDA3025-UZ
Currency                                                                             In US dollars
Balace as atI January, 2018                                                              34264
Receipts:
Replenishment from WB IDA(SOE)                                                                -
Total cash available                                                                     34264
Payments:
Return of unused funds to the WB                                                         (7004)
Paymentto UZAJFSAdesignated account                                                    (27 172)
Total payments                                                                          (34 176)
Balance as at 31 May, 2018                                                                  88
Signed on behalf of the UZAIFSA Management on 28 August 2019.
Deputy General Director                         Chief Accountant
G. Ganiev_                                      G. Gubieva__
Notes to thefinancial statements on pages from 9 to 12 are an integpart of these .tatements.


((Preparation of a New Project a Livestock Sector Development Project in the Republic of Uzbekistan>
(Grant Agreement No. TF0A3025-UZ)
Special Financial Statements under the cash basis of accounting for the period from 01 January 2018 to
31 May 2018 (in US dollars, unless otherwise stated)                                         8
DESIGNATED ACCOUNT IN UZS RECONCILIATION STATEMENT
For the period from 01 January 2018 to 31 May 2018
Account N2                                                                22696 00050 39656 37006
Depositary Bank                                                    Tashkent city branch JSCB "Asaka"
Address                                                                       Tashkent, Uzbekistan
Source of financing                                                   Related loanlgrant: TFDA3025-UZ
Currency                                                 In thousand soums           In US dollars
Balace as at 1 January, 2018                                         2623                   323
Receipts:
Transfer from designated account in USD - UZAIFSA                  221 157                27 172
Total cash available                                               223 780                27 495
Payments:
Payment of wages                                                 (158945)               (19416)
Payment to suppliers of goods and materials and services          (64 832)               (8220)
Total payments                                                   (223 777)               (27 636)
Exchange rate difference                                                -                   142
Balance as at 31 May, 2018                                              3                     0
Signed on behalf of the UZAIFSA Management on 28 August 2019.
Deputy General Director                         Chief Accountant
G. Ganiev                                       G. Gubieva      e
Notes to the financial statements on pages from 9 to 12 are an integraljpart of these statements


<<Preparation of a New Project << Livestock Secto Development Project in the Republic of Uzbekistan)
(Grant Agreement No. TF0A3025-UZ)
Special Financial Statements under the cash basis of accounting for the period from 01 January 2018 to
31 May 2018 (in US dollars, unless otherwise stated)                                        9
NOTES TO FINANCIAL STATEMENTS
1      PROJECT DESCRIPTION
In accordance with Grant Agreement No. TF0A3025-UZ dated November 3, 2016, signed between the World
Bank International Development Association (hereinafter - IDA) and on behalf of the Government of the
Republic of Uzbekistan, the Ministry of Agriculture and Water Resources (hereinafter - MAWR), from IDA
from funds The Institutional Development Trust Fund of the countries of the Europe and Central Asia region
(hereinafter - the Trust Fund, ECAPDEV) a grant of 500 thousand dollars was allocated to the Republic of
-             Uzbekistan for the new project "Development of the livestock sector in the Republic of Uzbekistan"
(hereinafter - the Project).
I -             To provide coordination of work and services performed under the Grant Agreement, the responsibility for
managing the Project, monitoring and accounting for the use of funds in accordance with the procedures of
the World Bank and the legislation of the Republic of Uzbekistan is assigned to the Agency for Restructuring
of Agricultural Enterprises.
The aim of the project is to finance the development of a feasibility study and project documents for the new
project "Development of the livestock sector in the Republic of Uzbekistan".
The total cost of the grant is estimated at 500 000 USD. The funds allocated for the implementation of the
Project under the Loan Agreement are intended to finance the following categories of expenses:
In US dollars                                                                       Grant of IDA
Category
PartA Goods, works, consultants' services, (including auditing services)               498 000
Part B: Trainings                                                                        1 000
PartC: Incremental Operating Costs                                                       1 000
Total expenditure                                                                      500 000
Going concern
According to the Grant Agreement N2TF0A3025-UZ dated November 3, 2016 and the World Bank letter
N20435o/17 dated November 3, 2017 the Closing date is January 18, 2018, or the date of effectiveness of the
Livestock Sector Development Project, whichever comes first. The actual Closing date is January 11, 2018 the
date of effectiveness of the Livestock Sector Development Project.
In accordance with the World Bank's practice, disbursements from the Grant were made for Withdrawal
Applications received at the World Bank's office in Zagreb, Croatia by close of business four months after the
Closing Date in respect of eligible expenditures made before the Closing Date (i.e., payments made or
payments due for goods, works and services that have been provided prior to the Closing Date).
2      ACCOUNTING POLICY
These financial statements of the Project have been prepared in accordance with the International Financial
Reporting Standards for the Public Sector (hereinafter referred to as IPSAS) issued by the Council for
International Financial Reporting Standards in the Public Sector of the International Federation of
Accountants, based on the cash basis and relevant recommendations of the World Bank.
Basis of presentation of financial statements
The Special balance Sheet, Financial statements on the sources and uses of funds Grant Agreement, the Report
on the use of funds by category, Designated account in USD and UZS reconciliation statement, Notes to the
special financial statements are prepared on a cash basis to reflect operations performed within the framework


<<Preparation of a New Project < Livestock Sector Development Project in the Republic of Uzbekistan) )
(Grant Agreement No. TF0A3025-UZ)
Special Financial Statements under the cash basis of accounting for the period from 01 January 2018 to
31 May 2018 (in US dollars, unless otherwise stated)                                          10
2      ACCOUNTING POLICY (Continue)
of the Project, in accordance with the following principles.
Financing
Project financing is recognized when the payment of funds to suppliers of material resources or services is
made by the Bank under the Direct Payments procedure (see Note 6). Financing is also recognized when
transferring funds from an IDA account to the Special Project Account in US dollars, opened at the Tashkent
city branch of Asala Bank (see Note 4).
Disbursement Procedures
Project expenses are recognized as such and are reflected in the Special Financial Statements prepared under
the cash basis of accounting when the payment is made to suppliers of goods, works and / or services. Such
payments are made directly from the accounts of the Bank, or from the Designated Accounts of the Project.
Currency of financial statements and translation methodology
Currency of financial statements is US dollars (USD). In preparing the special financial statements, the
following principles of exchange rate translation were used:
+ For the purpose of preparing specialized financial statements, revenues and expenses in Uzbek soums
are converted into US dollars at the corresponding rate of the Central Bank of Uzbekistan (CBU),
which is in effect at the time of conversion;
+  IDA funds spent on direct payment procedures in a currency other than the US dollar are converted
into US dollars in accordance with the exchange rate indicated in the "Client Connection" section,
which is in effect at the time of payment of specific expenses;
+ The cash balances in Uzbek soums on the bank accounts of the Project are revalued at the official
exchange rate of the Central Bank of the Republic of Uzbekistan on the reporting date. As of May 31,
2018, the official exchange rates of the Central Bank of the Republic of Uzbekistan amounted to UZS
7 982,25 / USD 1.
3      PRESENTED FINANCIAL STATEMENTS
Special financial statements have been prepared by the Agency in accordance with IPSAS on a cash basis. The
special financial statements of the Project were signed on February 25, 2018 by the Deputy General Director
of the Agency G. Ganiev and the Chief Accountant of the Agency G. Gubieva
Special financial statements of the Project involves the following reports:
Balance sheet
This report provides information on the accumulated funds of the Project, financing, as well as the total costs
of the Project as at May 31, 2018.
Financial statements on the sources and uses of funds Grant Agreement
This report details information on the sources of financing and expenses of the reporting period of the Project
by categories. In the reporting period, IDA financed the Project expenses from the funds of the ECAPDEV
Trust Fund in the amount of 107 604,9 USD, of which the amount of 107 604,9 USD are direct payments (see
Note 6).
Report on the use of funds by category
This report details the information on expenditure by categories. The total amount of expenses under the
Project for the period fromJanuary 1, 2018 to May 31, 2018 amounted to 135 060,3 US dollars in the
following categories:


((Preparation of a New Project a Livestock Sec  Development Project in the Republic of Uzbekistan))
(Grant Agreement No. TF0A3025-UZ)
Special Financial Statements under the cash basis of accounting for the period from.01 January 2018 to
31 May 2018 (in US dollars, unless otherwise stated)                                      11
3      PRESENTED FINANCIAL STATEMENTS (Continue)
In US dollars                                                                As at 31.05.2018
Category
Part A Goods, works, consultants' services, (including auditing services)            135 060
Part B: Trainings                                                                         -
Part C: Incremental Operating Costs                                                       -
Total expenditure                                                                    135060
--            4       DESIGNATED ACCOUNT
The Agency has opened two Designated accounts to finance eligible costs for the implementation of the
Project: the Designated account in US dollars and in Uzbek soums:
Designated account of the Project in the USD
For the period from January 1, 2018 to May 31 the Designated account in US dollars was not financed. The
opening balance was in the amount of 34 264 US dollars, of which an amount of 7 003,91 US dollars was sent
back to the World Bank and in 27 172,09 was transferred to the Designated Account in Uzbek soums.
Designated account of the Project in the UZS
The Agency opened a Designated Project account in Uzbek soums to pay for service providers and inventory
items. For the period from January 1, 2018 to May 31, 2018, an amount of 19 416,31 USD is directed to pay
wages, taxes and deductions from wages and an amount of 8 820,09 USD is directed to pay bills of suppliers of
goods and materials and services.
The balances on the bank accounts of the Project are shown in the following tables:
US dollars                                                  Balance as at      Balance as at
31.05.2018        31.12.2017
Designated account in USD - UZAlFSA         IDA                        88             34 264
Designated account in UZS - UZAlFSA         IDA                         0                323
Total                                                                  88             34587
5      EXPENDITURE STATEMENT PROCEDURE
The Expenditure Statement procedure is used by the Project to replenish funds in the Designated Project
Account in US dollars, in accordance with the Agreement and IDA guidelines.
A summary of the credited and reimbursed funds of the Spending Statement procedure is presented below,
including by categories of expenditure:
Borrower                  Category of expenses            Total refundable   Replenishment
amount of designated
Reference                                                     amount
1                    2                                 account
10                    8220                   -                 8220                    8220
4                     19416                                   19416                   19416
Total                 27636                                   27636                   27636


<<Preparation of a New Project << Livestock Sector Development Project in the Republic of Uzbekistan))
(Grant Agreement No. TF0A3025-UZ)
Special Financial Statements under the cash basis of accounting for the period from 01 January 2018 to
31 May 2018 (in US dollars, unless otherwise stated)                                             12
6      THE USE OF DIRECT PAYMENT PROCEDURE
The list of direct payments made by the PIU from the Loan Account for the period from January 1, 2018 to
May 31, 2018 is shown in the following table:
Total payment
Currency of the  Total in paymentToapymn
Borrower Reference Date         Beneficiar              Current        Tai     yent    amount in US
payment             currency        dollars
15               February 13, 2018 Organization of International  USD          40105        40105
Epizootic (OIE)
17001068         February 8,2018  International Livestock  USD                 15000        15000
Research Institute
17001069         March 9, 2018  International Livestock  USD                   22500        22500
Research Institute
17001070         March 9, 2018  International Livestock  USD                   18 750       18 750
Research Institute
International Limestock US
17001071         March 9, 2018                          USD                    11 250       11250
Research Institute
Total                                                                         107605       107605
7      TOTAL EXPENDITURE
The total costs of the Project include the amount of payment of funds to advisory service providers under the
"Direct Costs" procedure, the expenditure of funds from the Designated Accounts of the Project to suppliers
of goods (works and services), as well as the amount of negative exchange rate differences.
In US dollars                                                    As at 31.05.2018  Cumulative total
PartA Goods, works, consultants' services, (including auditing services)  (135 060)       (438 459)
Part B: Trainings                                                              -                 -
Part C: Incremental Operating Costs                                            -             (792)
Exchange rate difference                                                     142              324
Total expediture                                                        (134 918)         (438 927)
8      LEGAL STATUS AND TAXES
Services and goods purchased through IDA are exempt from all taxes and fees, in accordance with the Tax
Code of the Republic of Uzbekistan.