TRANSPORT REFORM AND REHABILITATION CENTER FOURTH EAST-WEST HIGHWAY IMPROVEMENT PROJECT LOAN No.8263-GE NOTES TO THE SPECIAL PURPOSE PROJECT FINANCIAL STATEMENT FOR THE PERIOD FROM 1 JANUARY 2019 TO 15 JULY 2020 (in US Dollars) The Project consists of the following main components:  Upgrading of approximately 12 km of the existing 2-lane E60 East-West Highway through the construction of a 2-lane dual carriageway from Agara to Zemo Osiauri including interchanges, two bridges, several overpasses and underpasses and approximately 3.4 km of riverbank protection  Institutional support to the Road Department of the Ministry of Regional Development and infrastructure (RDMI) of Georgia and the Center related to the Project Management, financial audits and Project monitoring and evaluation through the provision of goods and consultant’s services. The categories of expenditures incurred are presented in line with the categories specified in the Agreement. Each components of the Project are further divided into four types of expenses for the SOE purposes: civil works, goods, consultants’ services and operating costs. 9. COMMITMENTS AND CONTINGENCIES Management is not aware of any commitments and contingencies which would have a material impact on this special purpose project financial statements as at 15 July 2020 and for the period from 1 January 2019 to 15 July 2020. 10. GEORGIAN OPERATING ENVIRONMENT The Center’s operations are located in Georgia. Consequently, the Center is exposed to the economic and financial markets of Georgia, which display characteristics of an emerging market. The legal, tax and regulatory frameworks continue development, but are subject to varying interpretations and frequent changes which together with other legal and fiscal impediments contribute to the challenges faced by entities operating in Georgia. The special purpose project financial statements reflect management’s assessment of the impact of the Georgian operating environment on the operations of the Center. The future operating environment may differ from management’s assessment. 11. EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE There were no significant events subsequent to the balance sheet date. 12. APPROVAL OF SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTS These special purpose project financial statements were authorized for issue by the management of the Center on 25 September 2020. 14 TRANSPORT REFORM AND REHABILITATION CENTER FOURTH EAST-WEST HIGHWAY IMPROVEMENT PROJECT LOAN No.8263-GE NOTES TO THE SPECIAL PURPOSE PROJECT FINANCIAL STATEMENT FOR THE PERIOD FROM 1 JANUARY 2019 TO 15 JULY 2020 (in US Dollars) 7. RECONCILIATION OF AMOUNTS SHOWN AS RECEIVED FROM THE IBRD TO ACTUAL EXPENDITURES OF THE PROJECT 15 July 2020 Application of Withdrawals Schedule Expenses incurred for the period from 1 January 2019 to 15 July 2020 as per the Applications of 4,492,529 Withdrawals Schedule Expenses incurred in 2019 without Applications of Withdrawals Schedule - 4,492,529 IBRD funds received in 2019 (replenishments) 4,290,750 IBRD funds returned in 2019 (789,365) GoG funds returned in 2019 (2,691) 3,498,694 Add: Opening Balance Designated account 993,835 993,835 Less: Closing Balance Designated account - - TOTAL EXPENDITURES INCURRED IN 2019 4,492,529 31 December 2018 Application of Withdrawals Schedule Expenses incurred in 2018 as per the Applications of Withdrawals Schedule 6,741,278 Expenses incurred in 2018 without Applications of Withdrawals Schedule 326,332 7,067,610 IBRD funds received in 2018 4,998,785 Foreign exchange difference in 2018 2,689 5,001,474 Add: Opening Balance Designated account 3,059,972 3,059,972 Less: Closing Balance Designated account 993,836 993,836 TOTAL EXPENDITURES INCURRED IN 2018 7,067,610 11