ADDITIONAL FINANCING FOR SOCIAL INVESTMENT AND LOCAL DEVELOPMENT PROJECT IBRD LOAN NUMBER 9060-AM IMPLEMENTED BY ARMENIAN TERRITORIAL DEVELOPMENT FUND SPECIAL PURPOSE FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR'S REPORT For the period from 01 January 2023 to 31 December 2023 YEREVAN June 2024 CONTENT Page STATEMENT OF MANAGEMENT RESPONSIBILITY FOR THE PREPARATION OF THE FINANCIAL STA T EM EN T S .............................................................................................................................................. 3 INDEPENDENT AUDITOR'S REPORT........................................................................................................ 4 STATEMENT OF CASH RECEIPTS AND PAYMENTS ................................................................................. 6 STATEMENT OF USES OF FUNDS BY PROJECT ACTIVITY...................................................................... 7 NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS............................................................... 8 ANNEX 1. RECONCILIATION BETWEEN THE AMOUNTS SUBMITTED BY THE ATDF AND DISBURSED BY THE W O RLD BANK .......................................................................................................... 15 STATEMENT OF MANAGEMENT RESPONSIBILITY FOR THE PREPARATION OF THE FINANCIAL STATEMENTS The management of the Armenian Territorial Development Fund ("ATDF") is responsible for the preparation of the special purpose financial statements for the year ended 31 December 2023 of "Additional Financing for Social Investment and Local Development Project" ("Project") financed by Loan Agreement IBRD Loan Number 9060-AM dated 21 April 2020 ("Loan Agreement"), in compliance with the International Public Sector Accounting Standard "Additional Financing for Financial Reporting under the Cash Basis of Accounting" (IPSAS-Cash Basis) issued by the International Public Sector Accounting Standards Board (IPSASB) and the Financial Management Manual for World Bank Financed Investment Operations (WB Guidelines). In preparing the special purpose financial statements, ATDF'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 2023. ATDF'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 IPSAS - Cash Basis and the W8 Guideines; * 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 Loan Agreement, and World Bank related guidelines, with due attention to economy and efficiency, and only for the purposes for which the financing was provided; * Maintaining the Designated Accounts in accordance with the provisions of the Loan Agreement, and World Bank related guidelines; * Procuring financed Works, Goods and Services in accordance with the Loan Agreement and World Ban uidelines; and * Prev e raud and other errors. The speci ts for the year ended 31 December 2023 were signed on 28 June 202 Sargis Baghinya t4'29n Karine Shahbazyan Executive Director of Head of Financial Management and Armenian Territorial Development Fund Accounting Department re 60 C 28899 23/6, Davit Anhaght Str., I o do-arnena.am 5th Floor, office 7 www.boarmenia.am Yerevain Armenia INDEPENDENT AUDITOR'S REPORT To the Management of the Armenian Territorial Development Fund Opinion We have audited the special purpose financial statements of "Additional Financing for Social Investment and Local Development Project" ("Project") financed by Loan Agreement IBRD Loan Number 9060-AM dated 21 April 2020 ("Loan Agreement"), and implemented by Armenian Territorial Development Fund ("ATDF"), which comprise of the statement of cash receipts and payments and the statement of expenditures per components for the year ended 31 December 2023, and notes to the special purpose financial statements, including a summary of significant accounting policies. In our opinion, the accompanying financial statements for the year ended 31 December 2023 are prepared, in all material respects, in accordance with International Public Sector Accounting Standards: Financial Reporting Under the Cash Basis of Accounting, (IPSAS-Cash Basis) and the Financial Management Manual for World Bank Financed Investment Operations (W5 Guidelines). Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs) as issued by international Auditing and Assurance Standards Board (IAASB). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Project and of the ATDF in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code), and we have fulfilled our other ethical requirements in accordance with 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- Cash Basis of Accounting Without modifying our opinion, we draw your attention to Note 2 to the financial statements, which describes that financial statements are prepared in accordance with cash basis framework, as a result, they may not be suitable for another purposes. Responsibilities of the Management for the Financial Statements Management of the ATDF is responsible for the preparation of the special purpose financial statements in accordance with IPSAS-Cash Basis issued by the International Public Sector Accounting Standards Board (IPSASB) and 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 a high level of assurance but is not a guaranty that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements arise from fraud and error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these special purpose financial statements. 28899 2316, Davit Anhaght Str. E- nait: -obea rmenia.amt 5th Floor, office 7 www.bdoarmenia.am Yerevan., Armenia As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also: * Identify 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 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 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. 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. Report on Other Legal Requirements To comply with the terms of the Loan Agreement, the ATDF management shall insure that: 1. funds have been used in accordance with the conditions of the Loan Agreement concluded between the International Bank for Reconstruction and Development (IBRD) and the Republic of Armenia, and WB Guidelines, with due attention to economy and efficiency, and only for the purposes for which the financing was provided; 2. supporting documents, records and accounts have been maintained to support claims for reimbursement of expenditures incurred. Reimbursed expenditures included in the withdrawal applications are eligible for financing under the Loan Agreement; Interim Unaudited Financial Reports (IFRs) issued by ATDF during the Reporting year are in agreement with the underlying books of accounts; 3. the Designated Accounts have been maintained in accordance with the provisions of the Loan Agreement, and World Bank related guidelines; 4. Financed Works, Goods and Services have been procured in accordance with the Loan Agreement and World Bank related guidelines. In our opinion, the Project management has complied with the above requirements for the year ended 31 December 2023. "BDO Armenia" CJSC 28 June 2024 Vahagn Sahakyan, FCCA Managing partner �.: °' � � ..,, � м О � N � и М ���..... , 4 � С�Л �с � I м � i� ш гч ni � гд � 0ь � и ,� t.,y --° Р А �.' С С� ��� � сл � о` а�сй � б и �С Е М N �D N г+� г � � т7 � �.1 г�Ф .... об N � , � � � С И � С � .аь v� +"n I q � � �� � � � > � м сз � 1�. � � ов � � Q `�п°� с�лR rv а � � � с= � ��� � � С � � � Е ^n о�.� � N ii !ь.? lIi М `Li М Т� т' �• 'v уΡ, � � гс +С м � Q � +� `,рΡ 1i д � � 4 'R { � � � �С � G � и4� � Q � гц .О О н ! � � Q '� .� �„- � � ,gQ �м�у-NУ'f � О+ � е���� � ` � � � � � м р R Q, ОРЬ'� � сА � 0� ц) iЛ Р. 1'`� � � L1. � ����q �� �+, `С О�му ^�� е- т 00 1П ��st � G r Ci �( G7 ', �1 г С t,1 ns � � м�- .� и� мч' �л � � I�t � й � �' �© � � Е r е�' `` а� .с v �� м м 1сТ+ р` `О А г� � Р о�0 �+�..� +.� +.� с н са � ао г� г Р д� � н � оо � 0� О ''^� ��.г � N r[i N и А� � т � � сТ N'� CQ ,� �,,, Q и пs ё= м м� tч сР н ги со Gy ч�i °- h,- �..л '� � а � м� ю N'еТ' сТ и д� N �гь '�' о� ��" � ,� � � С �� ч� у 'Ct р `г�'� � С "'� г� � N ,� С v�i ��'., � н рΡрΡ N `1' м м д► и � R •'�-� СО N � г.1 гё С! ..... � т С ''G r '� � � � � 4 ��� ьл��*'i*`у.� � ti мигt�+г�. �'и +.+ f� CL 7� .. LГr N' W'iV .�t0 �,,^ Р'.'р т ��.r -.. a.r `''� � р. О` ьD в0 ® h.� О � гч � р • С � Cf � ��$ . .-.r"аамunг� а� Р м+ ц��r�-г4'г и� й � � � � Q � � � � � �- .о �. •С н и ш ��� м�з г о � гг �` с о , ���,, � лr �q "� О .�� т '"' ! �;_г- _ ,)г- . `х°�s1' ! �� � � �� � J � �.. � ,.�-ч , ; Yk ` ,��*�'�, . . �. Z ti !'л г3' �1" :' ��.. ` L .. � ал �'та1 '7 'К. � ',а и,� � � �, �, ,� и �, `�у�- �'; � -е+ -о � � t., , 1 � � � � � � w �' ytu ._.� �г':: ,�/ � �у р� � и й w С= а'. � \'• �� ii z и 4 Е � �' v ��6 - � �' ±� t �+ � � � 4 � � �`- �' � � о ,'� .c% ,� i ; f аг wл -' Е � о � а с с G� �� 4,�'�� k о ш� Oi �_ ,� J ц а,�у '� I �у W R;�'�`ъ � а+ f.ы1 � � � `� и и � v а � И "� � С +' р � i � � � С. .С �� � е� v1� �� i � _� г+Fг1 y�,i � ,� С О О �, 3 с � Ф "� � .., и О iб и ал G GF � J � �о с � � � in С,а; ь- �С � • � С �" � 07 С ...�- ��� Я� у�р 'мG .�Q '� � и и з� й� А � V RCS й� � � ц�? 4г .z 7 � с С � а �рΡ7 '[¢] иt 'L ' v ,�, � Ф �'+ LU � � С � 0Т О. ,� Г� О С i3 1- ii о�с�. `' с '" с` г�" 6� 3�с rn.v ал �, °и ��� а� ш?� й'а, :с о F- г �i Q' `Si с��`а �' -° ti с`U' с'� ш и '� ого е+ с � ау с ш i� С�� � �s с с v w �. °' й го г� „ и � -� cs � > пs � С о 4� �' с р� � > � й. ш е `� � ° � О о и � о � � с т � � Ci °а +' �С a�i о-� � '� •� и с� Е у и- '� гL о а о+= r� т � � С1 � � й9 Е ш L #^���� r�i '� Q��4��L���� � � � д 't3 � � W q� рΡ � О р Ои'tm�V F-E-F^���еЧа+мi пlvйhlilJ Q.� � С7 й Lil4 йQ�L�. � � ti v � о N с v г�.i м N�� р�. ��� � й ti� �� � Q� �� � `О Q. 1t! �' м'r 1*�. � � � f`' 1� 00 �О г oD �О � � _ � oro `''а�сг й � n 'гг^ `ё� � � `"� '�' '_ tt' � С � а +� j � � � � � � а. � го ,,с, � ,n �у � `��. � � � м r, � t � � � и �� urs" йэ �� са � и Q' h c�v � *�о 6 � Р с"? С7 Q �'� М �л. � 9+ � � � � °' и � � � ,� � с� � г �, о�, аа � � � � `� `° � в �. � _ с .Cr. 1.+� М � ! 4 � �... �,�i `� R3 п3 I Qp �- � .� ,О �' Q�y � 1� � �. �� '� � й СТ б? гэ � � � М�.. N 1� � _ � Li N � N � � � Q} р. � Р��- (iI 'rd' �- ' �- W� А С и w� � "� и т аз � ао гиi ц? м `�р `r '� `с� а � г�°а �. � i[j � � � й У � r � � � б7 tU � г � � S G t..? м � _ � Ф а t о � о. аг+ Г �.- � �-, � г.' , � � � � � � � � � � С � 'G Са � СО е- f`- !�- О г CV �" ,� � � С! �. с ra � �'- й а�`г � й м о �'. ,а ,�, ,� �° аа м о ,r с7� .. � v �� h1 C�,i 1[j г д" � � � С С � м � с� +, � сь О � � ^ � fl1. 4 � � � й о�о � q, I � � м � � '� а "' '�7 N Q f] � f� � �' ,� �О qy `�j с�! � м „�р '�д' � � � � а�� Q„ Ор r� rC r br} Q. .и 4, �+ � . ,ы Q Q � м � ,оцi �г � а о � �_ � �� '�'-� а � и G7 С, а' а ° с `� � � �у� �-уΡ,нn�n `г� � �С G Сkэ �- �"°��" V Ci .: 'r � �.'�i �%� � л С�й а с, д. гд .� ф у ,� �,1,�� G ~�i � � о п� а � �а � ,�. � � , Q �+ > �` � � �с ё �- � � ; � �, s � Q � м � ,� уу � � � й Я7 :� � � �} + , �'.� р � н } � а г�ц h'i .� -"--' � � � � , ц С . �'д,.!' '� +F эn � 1:.r дд °э � .5г � _� � С � I � `° с .а � r �д' _ � а� ш � � RU � � � � � ++ .,�� С_ � ?. � �°��_У - , 3;�f. � � 4 � � � 'U .С � i+ � .'С V1 U� i's�i "`"�'` '99 �'�wk� CS L� С� й и'J �i � �'� J� н� г� С- '� '�`?1' М ti'� �{�+ � Ф� !l � 4 � �% � � Q -�9 :� � С �.�+ с и� Q вн Вп д'д,t� w�. w � � �- �р G � `" ,� *' `�' а и р й � fis р� �� "' а� и, ат ц � �t+ �^' о� _ �С Q •� (�j у � `�Q U у � � � � � � и � � � '�'� � Lt fб �у С � t. "С7 О•� s' 9' '0 � :б Gi ��'/i qуΡ �'+ L О ��� iлу �' 3 � аи' �у q' °J' й� � с ш, С U,� й,у s б� � � z �'- � � �и �т � � aLV] ° � � Е � о с с Q c � � гСгs W го �, 'г!* �' о .� `r'. �Е о � ,. Ф � �- а;, ?+ 4 ct +� �с F- � � � �1 ,� �+ �р i .� и � � у� ' �с'i "' а' С �'"'+ О С1 С #�+ 4J � � � � а � � ; � � � парΡ о о � ; � о Q с а ° � а � о .с й г� ц� tл д.� �� f� � V S г� V Ci и� � сз. t1 �� � 67 4� h 1-- а v+ �7 д NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS Additional Financing for Social Investment and Local Development Project ISRD Loan 9060-AM For the year ended 31 December 2023 1. General information 1. 1. The Project financing According to the Loan Agreement between the Republic of Armenia and the International Bank for Reconstruction and Development ("113RD", "WB") on 21 April 2020, IBRD provided Loan Number 9060-AM in the amount of 17,900,000 Euros (EUR) to the Republic of Armenia. The Loan was provided for implementation of "Additional Financing for Social Investment and Local Development Project" (hereinafter Project). The Loan Agreement became effective on 08 December 2020. The Closing date for the Loan Number 9060-AM financing is set on 31 May 2025 (as extended). The Grace period for submitting the expenditures incurred before the Closing date is set four months after the Closing date 30 September 2025. 1.2. The Project's objective The objective of the Project is to improve quality and use of, and access to, community and inter- community infrastructure. The Project consists of the following parts: Part A: Support Lo Socio-Economic Development and Capacity Building at Local Level 1 . Carrying out community micro-projects (Microprojects), with the assistance of Project Implementation Committees ("PICs"), including, inter-atia: (i) the construction, renovation, rehabilitation, and/or expansion of key social infrastructure covering education, health, and social services; (ii) the installation I rehabilitation of water supply and sanitation systems; (iii) execution of minur irrigation and rural electrification works and (iv) the installation of energy efficiency solutions for public infrastructure. 2. Providing: (i) technical assistance to ensure proper design, and supervision of Microprojects; and (ii) institutional and financial capacity building at community level. 3. Providing furniture and equipment for infrastructure investments benefited by Microprojects, such as rehabilitated schools, kindergartens and community centers; as well as for other social infrastructure in accordance with criteria set forth in the Operational Manual. Part B: Support to Inter-Community Social and Economic Development Initiatives 1 . Supporting to Armenia's territorial reform through carrying out of innovative development initiatives (Subprojects), involving consolidated communities. 2. Providing: (i) technical assistance to ensure proper design and supervision of Subprojects; and (ii) institutional and financial capacity building at community level. 3. Providing furniture and equipment for infrastructure investments benefited by Subprojects. Part C: Institutional Strengthening and Project Management Providing institutional support, capacity building, assessments, evaluations and technical I assistance to ATDF for Project Management, fiduciary oversight, safeguards oversights, the provision of training, and operating costs, required therefore. 1.3. Budget The Project is financed by: * IBRD Loan Number 9060-AM, * Government of the Republic of Armenia (Government of RA) cofinancing, * Community Contributions (CC) IBRD Loan Percentage Number Government of Community Total Expenditure um6er RoA Contribution to be financed Category ~ 9060-AM ______ Category EUR EUR equivalent EUR EUR by the Loan equivalent (inclusive of Taxes) 1. Works, goods and consultants' 4,480,000 1,370,025 359,320 6,209,345 72.15% services under Part A of the Project 2. Works, goods and consultants' 12,530,250 3,351,846 825,309 16,707,405 75% services under Part B of the Project 3. Goods, consultants' services (including for Project audits) and 186,000 70,729 - 256,729 72.15% Training under Part C of the Project 4. Operating costs under Part C of 659,000 1,537,667 2,1%,667 30% the Project 5. Front-end fee 44,750 . 44,750 100% Total 17,900,000 6z330,267 1,184,629 25,414,896 1.4. Project Implementation The Project is implemented by the Armenian Territorial Development Fund (ATDF) - formerly; Armenian Social Investment Fund (the ASIF). The ASIF has been established by a Decree N 162 dated 11.04.2000 of the Government of the Republic of Armenia, the sole founder, as an autonomous non-profit agency to assist in the rehabilitation of small-scale infrastructure through community initiated and demand-based activities. The ATDF implements projects financed by the WB and other donors including contribution to: * welfare development of population through improving quality and accessibly of social and economic infrastructure and public services, employment, investment activity, * Institutional and financial strengthening of regions of the Republic of Armenia. The Board is the supreme governing body of the ATDF. The ATDF registered address is: 31 K. Ulnetsi Street, Yerevan, 0037, Republic of Armenia. 2. Summary of significant accounting policies 2.1 Preparation and presentation of financial statements The special purpose financial statements are prepared in accordance with the International Public Sector Accounting Standards: Financial Reporting Under the Cash Basis of Accounting (IPSAS-Cash Basis), issued by the International Public Sector Accounting Standards Board (IPSASB), and presented in accordance with Financial Management Manual for World Bank Financed Investment 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. These policies have been consistently applied to all the periods presented. 2.2 Cash basis of accounting The special purpose financial statements are prepared and presented using the cash basis of accounting. Cash basis means a basis of accounting under which transactions and other events are recognized only when cash or its equivalent is received or paid. Financial statements prepared under the cash basis provide information about the sources of cash raised during the period, the purpose for which cash was used and the cash balances at the reporting date. 2.3 Reporting currency The Project financial statements are presented in European monetary unit (EUR). 2-4 Foreign currency transactions Foreign currency is a currency other than the reporting currency of the Project. Project accounts are maintained in EUR and Armenian Drams (AMD). Transactions in foreign currencies are translated to presentation currency at exchange rates at the dates of these transactions. The exchange rate: For the infLows is used the foreign exchange purchase rate as of the transaction date set by the Central Bank of the RA. For outflows is used the foreign exchange selling rate as of the transaction date set by the Central Bank of the RA. 2.5 Budgeting Annual budgets for funding and expenditures are based on approved budget of the project agreement (Note 1.3.). The expenditure budget is created based on actual accumulated expenditures for the last period plus the updated procurement plans for the period. 2.6 Taxes All applicable taxes are paid in accordance with tax regulations of the Republic of Armenia. if 3. Summary Reports and SOEs IBRD Loan Number 9060-AM For the year ended 31 December 2023 In EUR Expenditure (2) Works, goods cons services (4) Operating cataioe=(1 or good coautdt (including for costs under Toa npiio) Valueorks s services under Project audits) and Part C Total underat se Part B of the Training under Part Project Project Project C of the Project 7 16-Feb-2023 56,548 2,729 - 64,157 123,435 8_ 04- pr-2023 138,556 69,463 30,952 238,971 10 05-Jul-2023 69,118 187,919 57,005 314,041 11 14-Sep-2023 336,934 394,740 14,709 60,474 806,857 12 23-Oct-2023 285,804 920,562 38,363 1,244,730 13 14-Nov-2023 107,861 1,022,215 2,684 1,132,60 14 06-Dec-2023 278,560 986,307 6,433 20,508 1,291,808 Total 1,Z73,382 3,583,935 274,144 5,152,603 4. STATEMENT OF DESIGNATED ACCOUNT Funding IBRD Loan Number 9060-AM Bank account number 900000909417 Bank Central Treasury Bank Location Meliq Adamyan Street 1, Yerevan, Republic of Armenia, 0010 Account currency EUR Year ended 31.12.2023 EUR 1. Opening balance 176,634 2. Add: opening discrepancy 3. WB advance/replenishment 6,352,603 4. Less: Refund to WB from DA 5. Present outstanding amount advanced to DA 6,528,636 6. DA closing balance 233,434 7. Add: Amount of eligibLe expenditures paid 6,295,802 8. Less: interest earned (if credited to DA) 9. Total advance accounted for 6,529,236 10. Closing discrepancy (5)-(9) 5. STATEMENT OF FINANCIAL POSITION The Statement of Financial Position discloses assets, Liabilities, and net assets of the Project as at reporting date. It is prepared on an accrual basis that is transactions are recognized when they occur (and not only when cash is received or paid). Note 31.12.2023 31.12.2022 EUR EUR ASSETS Cash 6 1,181,884 1,176,038 Prepayments and receivables 7 596,436 Total assets 1,778,320 1,176,038 LIABILITIES PayabLes 8 149,172 55,351 Total Liabilities 149,172 55,351 NET ASSETS Cumulative Income Funds 9 IBRD Loan 9060-AM 7,407,791 1,055,188 RA Government 3,075,301 679,422 Community contribution 1,391,114 936,402 11,87 2,671,012 Other infLow* 51,442 50,872 Cumulative expenses Project expenses (10,294,804) (1,671,988) (10,294,804) (1,671,988) Foreign currency gain/(ioss) (1,696) 70,791 Total net assets 1,629,147 1,120,687 EUR 51,442 of communities' co-financing amount was transferred from SILD Project to the SILD AF project. 6. CASH Account Account held Underlying 31.12.2023 31.12.2022 at Currency EUR EUR Designated account (IBRD Treasury EUR 233,434 176,633 Loan 9060-AM) GOA co financing account Treasury AMD 11 Community contribution Treasury AMD 948,450 999,394 account 1,181,884 1,176,038 7. Prepayments and receivables 31.12.2023 31.12.2022 EUR EUR Prepayments on Works* 596,436 Total 596,436_ - (*) Prepayments are paid to contractors up to 20% of the construction contract amount based on bank guarantee provided. 8. Payables 31.12.2023 31.12.2022 EUR EUR On Works (Retentions)* 149,172 55,351 Total 149,172 55,351 (*) Retentions of 5% are held from the completed service invoices as guaranty for the quality of the work. 2.5% is paid after signing the final act, and the remaining 2.5% are kept for up to one year as guaranty for the quality of performed work or paid on the basis of a one-year bank guaranty. 9. Financing 9.1. IBRD Loan Number 9060-AM Year ended Year ended Cumulative as at 31 31-Dec-22 31-Dec-23 December 2023 EUR EUR EUR Advances/ (advance recovery) - 1,200,000 1,500,000 50E and Summary Sheets 710,438 5,152,603 5,863,041 Front-end Fee - - 44,750 Total 710,438 6,352,603 7,407,791 Total financing budget 17,900,000 Percentage of finance provided as 41% at 31 Dec 2023 9.2. Government of the Republic of Armenia co-financing Year ended Year ended Cumulative as at 31 31-Dec-22 31-Dec-23 December 2023 EUR EUR EUR Contributions in cash 609,886 2,395,879 3,075,301 Total 609,886 2,395,879 3,075,301 Total financing budget 6,330,267 Percentage of finance provided as 48.6% at 31 Dec 2023 9.3. Community Contribution Year ended Year ended Cumulative as at 31-Dec-22 31-Dec-23 31-Dec-23 EUR EUR EUR Contributions in cash 936,402 454,712 1,391,114 Total 936,402 454,712 1,391,114 Total financing budget 1,184,629 Percentage of finance 117% provided as at 31 Dec 2023 10. Project Expenditures 10.1. Project expenditures financing per funds EUJR Year ended 31 Dec 2023 Category IBRD Loan Government of Community Total 9060-AM RoA co-financing contribution 1. Works, goods and consuitants' services 1,556,854 541,639 134,485 2,232,978 under Part A of the Project 2. Works, goods and consultants' services 4,419,517 1,170,928 300,683 5,891,128 under Part B of the Project 3. Goods, consultants' services (including for Project audits) and Training under Part 31,075 11,325 - 42,400 C of the Project4 4. Operating costs under Part C of the 288,356 670,544 25.15 958,925 Project - 5. Front-end fee _ Total 6,295,802 2,394,436 435,193 9,125,431 Cumulative as at 31 Dec 2023 Category IBRD Loan Government of Community Total 9060-AM RoA co-financing contribution 1. Works, goods and consultants' services 2,227,968 762,741 172,720 3,163,429 under Part A of the Project222,676741270 31349 2. Works, goods and consultants' services 4,420,116 1,171,128 300,683 5,891,927 under Part B of the Project 3. Goods, consultants' services (including for Project audits) and Training under Part 33,205 12,462 0 45,667 C of the Project 4. Operating costs under Part C of the 448,318 1,147,952 25 1,596,295 Pro'ect 5. Front-end fee 44,750 0 0 Total 7,174,357 3,094,283 473,428 10,742,068 10.2. Project budget progress Cumulative Budget Implementation Category as at 31.12.2023 EUR EUR 1. Works, goods and consultants' services 3,163,429 6,209,345 50.95% under Part A of the Project 34 2. Works, goods and consultants' services 5,891,927 16,707,405 35.27% under Part B of the Project __________ 3. Goods, consultants' services (including for Project audits) and Training under Part 45,667 256,729 17.79% C of the Project 4. Operating costs under Part C of the 1,596,295 2,196,667 72.67% Project 5. Front-end fee 44,750 44,750 100.00% Total 10,742,068 25,414,896 42.27% it. Events after the reporting date 11.1 Application of compensation The application N 15 amounting 1,266,528 that includes expenditures relating to the Reporting year in the amount of 1,265,635.76 EUR was submitted to WB on 11 January 2024 and approved on 01 February 2024. 14 ANNEX 1. RECONCILIATION BETWEEN THE AMOUNTS SUBMITTED BY THE ATDF AND DISBURSED BY THE WORLD BANK Additional Financing for Social Investment and Local Development Project IBRD Loan 9060-AM For the year ended 31 December 2023 In EUR Expenditure Category ADL ATDF WB Difference Advances 9 1,200,000 1,200,000 - 11 (1) Works, goods and consultants' 7 56,548 56,548 services under Part A of the Project 8 138,556 138,556 - 10 69,118 69,118 - 11 336,934 336,934 - 12 285,804 285,804 - 13 107,861 107,861 - 14 278,560 278,560 - Total 1,273,382 1,273,382 - (2) Works, goods and consultants' 7 2,729 2,729 services under Part B of the Project 8 69463 69463 10 187,919 187,919 - 11 394,740 394,740 - 12 920,562 920,562 - 13 1,022,215 1,022,215 14 986,307 986,307 - Total 3,583,935 3,583,935 - (3) Goods, consultants' services 11 14,709 14,709 - (including for Project audits) and 14 6,433 6,433 - Training under Part C of the Project Total 21,142 21,142 - (4) Operating costs under Part C of the 7 64,157 64,157 - Project 8 30,952 30,952 - 10 57,005 57,005- 11 60,474 60,474 - 12 38,363 38,363 13 2,684 2,684- 14 20,508 20,508 - Total 274,144 274,144 - Total 6 352,603 6,352,603 -