I est п nancing for the project ВУ
Transcript of I est п nancing for the project ВУ
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� �5tate Bnterprise "Belcomtehinr�est"
Special-purpose fina пcial statements of Additional � nancing for the project
� � "Water supply апд sa пitation project" No. 8352- ВУfor the period from 4 Ju1y 2014 to 31 December 2015
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ADDITIONAL FINANCING FQR THE WATER SUPPLY AND SANITATION PROJECT
LOAN No. 8352-BY
CONTENTS
STATEMENT ON MANAGEMENT'S RESPONSIBILITY FOR PREPARATION AND APPROVAL OFSPECIAL-PURPOSE FINANCIAL STATEMENTS OF THE PROJECT FOR THE PERIOD FROM1 JULY 2014 TO 31 DECEMBER 2015 ........................................................................................................ 3
INDEPENDENT AUDITORS' OPINION ................... I .................................................................................... 4
PROJECT SOURCES AND USES OF FUBDS STATEMENT FOR THE PERIOD FROM 1 JULY 2014TO 31 DECEM BER 2015 .............................................................................................................................. 6
USES OF FUNDS STATEMENT FOR THE PERIOD FROM I JULY 2014 TO 31 DECEMBER2015 ............................................................................................................................................................... 7
STATEMENT OF WITHDRAWAL FOR THE PERIOD FROM I JULY 2014 TO 31 DECEMBER 2016..10
SPECIAL ACCOUNT STATEMENT FOR THE PERIOD FROM 1 JULY 2014 TO 31 DECEMBER 201511
NOTES TO SPECIAL-PURPOSE FINANCIAL SATEMENTS FOR THE PERIOD FROM 01 JULY 2014TO 31 DECEM BER 2015 ............................................................................................................................ 12
ADDITIONAL FINANCING FOR THE WATER SUPPLY AND SANITATION PROJECT
LOAN No. 8352-BY
STATEMENT ON MANAGEMENT'S RESPONSIBILITY FOR PREPARATION AND APPROVAL OFSPECIAL-PURPOSE FINANCIAL STATEMENTS OF THE PROJECT FOR THE PERIOD FROM 01JULY 2014 TO 31 DECEMBER 2015Management of State Enterprise "Belcomtehinvest" ("the Management") is responsible for preparation ofSpecial-purpose Financial Statements of Additional financing for the Water Supply and Sanitation Project('the Project") being implemented by the Enterprise. The Special-purpose Financial Statements give a fairpresentation of financial position of State Enterprise "Belcomtehinvest" ("the Enterprise") in all materialaspects as of 31 December 2015 and of all funds on the Project received and used for the period from 1July 2014 to 31 December 2015 in accordance with International Accounting Standards for Public Sector(IASPS).11 While preparing the Special-purpose Financial Statements on the Project the Management is responsibleII for:
* adequate choice and application of accounting policies' principles;
presentation of information including that on accounting policies in a form which ensuresrelevance, reliability, comparability and transparency of such information; and
* compliance with the requirements of IASPS and disclosure of all significant deviations fromIASPS in the Notes to the Special-purpose Financial Statements of the Project.
The Management is also responsible for:
* developing, implementing and maintaining of effective and reliable internal control system on theProject;
* maintenance of accounting records in a form which can reveal and explain the transactions of theProject, provide information of sufficient accuracy on financial position of the Project at any dateand ensure compliance with IASPS;
* taking all possible reasonable steps to safeguard the assets of the Project; and
* preventing and detecting facts of financial and other irregularities.
The present Special-purpose Financial Statements on the project for the period from 1 July 2014 to 31December 2015 were approved by the Management on 15 June 2016.
On behalf of the Management:
_ aV L JMorozov M.E. Obrazova
QirectorC Chief Accountant
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FBK-Bel LLC PKFAccountants &business advisers
To Management of Additional financing for the Project "Water supply and sanitation project" and StateEnterprise "Belcomtehinvest"
Our ref. No. 05-01158 of ((15)) June 2016
Independent auditors' opinion
We have audited the accompanying Special-purpose Financial Statements of the Project "Water supplyand sanitation project" financed by International Bank for Reconstruction and Development ("IBRD") inaccordance with a Loan Agreement No. 8352 BY of 8 April 2014 between the Republic of Belarus andIBRD ("the Agreement*). These Financial Statements are comprised of: Statement of Sources andApplication of Funds; Statement of Funds Application by Types of Project's Activities; Statement ofWithdrawal; Statement of Special-purpose Account as of 31 December 2015 and for the period from 1July 2014 to 31 December 2015; Disclosure of fundamental principles of accounting policies and othernotes (the Special-purpose Financial Statements on the Project).
Management responsibility for preparation of the Special-purpose Financial Statements on the Project
Management of the Project is responsible for preparation and fair presentation of these Special-purposeFinancial Statements in accordance with International Accounting Standards for Public Sector (IASPS)"Financial Statement on a cash basis" developed by Public Sector Committee of the InternationalFederation of Accountants ("IFAC"); and also for development of internal control system which theManagement considers necessary for preparation of the Special-purpose Financial Statements of theProject that are free from material misstatement, whether due to error or fraud.
Independent auditors' responsibility
Our responsibility is to express our opinion on reliability of these Special-purpose Financial Statements ofthe Project based on our audit. We performed our audit in accordance with International Standards onAuditing. Those standards require that we comply with professional ethical requirements, so that we planand perform the audit to obtain reasonable assurance whether the financial statements are free ofmaterial misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures inthe Special-purpose Financial -Statements of the Project. The selection of audit procedures was carriedout on the basis of professional judgment including the assessment of risks of material misstatement ofthe Special-purpose Financial Statements of the Project whether due to fraud or error. In making thoserisk assessments, we considered a system of internal control for preparation and reliability of thesespecial financial statements in order to design audit procedures appropriate in the circumstances, but notfor the purpose of expressing an opinion on the effectiveness of that system. An audit also includedevaluating the appropriateness of accounting policies used and the reasonableness of accountingestimates gained by the Management, as well as evaluating the overall presentation of the Special-purpose Financial Statements of the Project.
IDirect tel +375 (17) 262 5223 1 Direct fax +375 (17) 280 3843E-mail fbk@fbk by I www-fbk byFBK-Bel LLC Logoisky highway 22A-201 Minsk | 220090 Belarus
Fi1K-l LLC is a member firn oi the PKF International Limited family of legally Widependent firms and does not accept any responsibility or liability for the actions or inactions ofany individual member or correspondent firm or firms.I
FBK-BeILLC PKFAccountants &business advisers
We believe that in the course of our audit we have obtained sufficient and appropriate evidence to providea reasonable basis for our opinion.
Opinion
In our opinion, the Special-purpose Financial Statements of the Project present fairly in all materialrespects the financial position of the Project as of 31 December 2015 as well as of funds of the Projectreceived and used for the period from 1 July 2014 to 31 December 2015 in accordance with InternationalAccounting Standards for Public Sector (IASPS) "Financial Statement on a cash basis" developed byPublic Sector Committee of the International Federation of Accountants.
Restriction on distribution and use
The present report is intended solely for the use by SE "Belcomtehinvest" upon presentation ofinformation by the World Bank on the received and used funds of the Project. This report is not intendedfor the use by third parties, and we do not bear any responsibility or liability to any other parties exceptSE "Belcomtehinvest" in respect of this report. In the eve f taking a decision by the third parties relatedto the contents of this report, the third parties are liable uch decisions,
A
Head of the auditing company: 0 +
Director a Alexey G. Reneisky
Manager: w 1110KBeVII!0 j
Deputy Director on Audit a Sergei V. Velyaminov
Auditors' opinion received on "15" June 2016 K
Director of SE "Belcomtehinves' V.L. Morozov
Director of FBK-Bel LLC I 0 a A.G. Reneisky
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ADDITIONAL FINANCING FOR THE WATER SUPPLY AND SANITATION PROJECT
LOAN No. 8352-BY
PROJECT SOURCES AND USES OF FUBDS STATEMENT FOR THE PERIOD FROM 1 JULY 2014 TO31 DECEMBER 2015
(in US dollars)Period from Cumulative
1 July 2014 to31 Dec 2015
Opening Cash BalancesSpecial account
Total Opening Cash Balances
Sources of fundsIBRD/ IDA 6,773,590.41 6.773,590.41Total Financing 6,773,590.41 6,773,590.41
Less: Expenditures by components
Additional financing for Water Supply and Sanitation Project 6,204,422.26 6,204,42226Support to the Preparation and Sustainability of 12,933.41 12,933,41InvestmentsCapacity Building, Project Implementation andManagement, Monitoring and EvaluationFront-end Fee 225,000.00 225,000.00
Total Expenditures 6,442,355.67 6,442,355.67
Closing Cash Balances
Special account 330,234.73Current BYR Account Statement 1,000,01
Total Closing Cash Balances 331,234.74
0 behalf of the Management:
VIL Morozov M.E. Obrazova
Director Chief Accountant
IIIII
The notes on pages 12-13 form an integral part of these Special-purpose Financial Statements on the Project 6
ADDITIONAL FINANCING FOR THE WATER SUPPLY AND SANITATION PROJECT
LOAN No. 8352-BY
IUSES OF FUNDS STATEMENT FOR THE PERIOD FROM 1 JULY 2014 TO 31 DECEMBER 2015
(in US Dollars)
Project componentl Subcomponentl Activity Period from Cumulative1 July 2014 to
31 Dec 2015Component I :Additional financing for WaterSupply and Sanitation Project1.1. Rehabilitation of Water Supply and SanitationSystems1.1.1. Reconstruction of treatment facilities in 2.052,177.73 2,052,177.73Gantsevichi, Brest Oblast, 2nd start-up complex.1.1.2. Sewerage in Verkhnedvinsk 525,669.97 525,669.971.1.3. Sewerage system in Glubokoe1.1.4. Reconstruction and expansion of water supplynetworks and facilities in Rogachev. Ist start-up 641,989.13 641,989.13complex (stage 2)1.1.5. Reconstruction and expansion of water supplynetworks and facilities in Rogachev. 2nd start-upcomplex (stage 2)1.1.6. Reconstruction of the sewerage system of thesewer basin No.4, Grodno. 2nd start-up complex.1.1.7. Construction of waste water treatment facilitiesin Berezino1.1.8. Construction of water intake with iron removal 2,691,579.15 2,691,579.15station in Smolevichi. 2nd Construction Phase11.9. Construction of the main sewerage collector inMogilev1.1.10. Reconstruction of water supply networks and 293,006.28 293,006.28facilities in Shklov. Construction phase 2 and 31.2 Bank commission1,2.1. Bank commissionTotal Component 1 6,204,422.26 6,204,422.26Component 2 :Support to the Preparation andSustainability of Investments2.1. Development of Feasibility Sudy, all atages ofdesign and cost-estimate documentation andBidding Documents, assistance in conduct ofBidding procedure and Bid evaluation2.1.2, Treatment facilities of Pinsk. Modernization ofwaste water sludge treatment system
2.1.3. Treatment facilities of Orsha
2.1.4. Engineering and economical comparison ofwaste water treatment in Borovuha (construction ofwaster water treatment plants in Borovuha andpressure pipes for waste water transfer at SPS-1 inNovopolotsk) and further development of design andcost-es2.1.5. Reconstruction of water supply system of urban-type settlement Oktiabrsky, Gomel Oblast2.1.6. Reconstruction and expansion of water supplynetworks and facilities in Rogachev. 1st start-upcomplex (stage 2). 2nd start-up complex.2.1.7. Construction of sewage treatment facilities inOshmiany
The notes on pages 12-13 form an Integral part of these Special-purpose Financial Statements on the Project. 7
IADDITIONAL FINANCING FOR THE WATER SUPPLY AND SANITATION PROJECT
LOAN No. 8352-BY
Project component/ Subcomponentl Activity Period from Cumulative1 July 2014 to31 Dec 2015
2.1.8. Construction of facilities complex for waste watersludge utilization in Grodno (Municipal Utility UnitaryEnterprise "Grodnovodokanal")2.1.9. Reconstruction and expansion of treatmentfacilities and sewage systems in Slutsk2.1.10. Reconstruction of treatment facilities inSoligorsk2.1.11. Reconstruction of water supply system withconstruction of water intake and iron removal plant inCherven2.1.12. Construction of treatment facilities in Zaslavl2.1.13. Reconstruction of sewage networks andfacilities in Byhov2.2. Investment Component Management andMonitoring of its implementation2.2.1. Investment Component Management and 12,933.01 12,93301Monitoring of its implementation2.3. Activities aimed at increasing the efficiency ofthe work of water and sewage utilities2.3.2. Analysis of engineering design norms withregard to practices of implementation of similar normsin European countries and development of the drafts ofthe relevant documents2.3.3. Design and supervision of activities for theimplementation of a water and sewerage utilitiesbenchmarking system.' Development ofbenchmarketing methodology2.3.4. Energy audit with potential analysis at 6 Housingand Utilities enterprises2.4 Bank commission2.4.1 Bank commission 0,40 0.40
Total Component 2 12,933.41 12,933.41
Component 3 :Capacity Building, ProjectImplementation and Management, Monitoring andEvaluation3.1. Training
3.1.1. Training of PCT specialists3.2. Auditing3.2.1. Audit of Reporting3.3. Strengthening of Social Accountabilityregarding water and sanitation services3.3.1. Strengthening of Social Accountability regardingwater and sanitation servicesTotal Component 3
Total Expenditure 6,217,355.67 6,217,355.67
Front-end Fee 225,000.00 225,000.00
Total Project Expenditure 6,442,355.67 6,442,355.67
The notes on pages 12-13 form an integral part of these Special-purpose Financial Statements on the Project. 8
IADDITIONAL FINANCING FOR THE WATER SUPPLY AND SANITATION PROJECT
LOAN No. 8352-BY
On behalf of the Management: ,f
V.L. Morozov M.E. ObrazovaDirector Chief Accountant /
The notes on pages 12-13 form an integral part of these Special-purpose Financial Statements on the Project. 9
ADDITIONAL FINANCING FOR THE WATER SUPPLY AND SANITATION PROJECT
LOAN No. 8352-BY
STATEMENT OF WITHDRAWAL FOR THE PERIOD FROM 1 JULY 2014 TO 31 DECEMBER 2015
(in US dollars)Withdrawal Date of Replenishment Total Tansactionapplication, withdrawal from of Special
No. the loan account Account
10 18.12.2015 623,823-52 Direct payment9 15.12.2015 1,000,000.00 1,000,000.00 DA-B8 17.11.2015 - 664,202.44 Direct payment7 09.11.2015 600,000.00 600,000.00 DA-B6 15.10-2015 600,000.00 600,000.00 DA-B
5 09.09.2015 600,000.00 600,000.00 DA-B4 24.07.2015 - 660,564.45 Direct payment3 17.07.2015 600,000.00 600,000.00 DA-B
2 10.06.2015 600,000.00 600,000.00 DA-B1 01.12.2014 600,000.00 600,000.00 DA-B- 04.09.2014 - 225,000.00 Front-end fee
Total 4,600,000.00 6,548,590.41
On behalf of the Management,
V. L. Morozov M.E. Obrazova
Director Chief Accountant
The notes on pages 12-13 form an integral part of these Special-purpose Financial Statements on the Project. 10
ADDITIONAL FINANCING FOR THE WATER SUPPLY AND SANITATION PROJECT
LOAN No. 8352-BY
SPECIAL ACCOUNT STATEMENT FOR THE PERIOD FROM 1 JULY 2014 TO 31 DECEMBER 2015
(in US dollars)
Account No. 3620935806043Bank JSC Belinvesbank
Opening balance at 01.07.2014IBRD advance during the period 4,600,000,00Amount of eligible expenditures paid during thepresent period 4,269,765.27Calculated DA closing balance 330,234.73DA closing balance as at 31.12.2015 carriedforward to next period - per bank statements
On behalf of_the Management:
VL. Morozo(, M, ObrazovaDirector Chief Accountant
The notes on pages 12-13 form an integral part of these Special-purpose Financial Statements on the Project, 11
ADDITIONAL FINANCING FOR THE WATER SUPPLY AND SANITATION PROJECT
LOAN No. 8352-BY
NOTES TO SPECIAL-PURPOSE FINANCIAL SATEMENTS FOR THE PERIOD FROM 01 JULY 2014 TO31 DECEMBER 2015
1. DISCRIPTION
In accordance with a Loan Agreement, signed on April 8, 2014 between the Republic of Belarus andthe International Bank for Reconstruction and Development, the Republic of Belarus was granted aloan in the amount of U.S. 90 (ninety) million for the development of water-supply and wastewatersystems in the Republic of Belarus ("the Project").The project consists of the following sectors:
Part A: Rehabilitation of Water-Supply and Sanitation SystemsProvision of goods, works and consultants' services for: (a) rehabilitation and construction of deepwells, pumping stations, transmission mains, distribution network, ground and elevated reservoirs andiron removal plants, and other water supply facilities; and (b) rehabilitation and construction ofwastewater collection systems and wastewater treatment plants including upgrade of monitoringstations and laboratories, and other water sanitation facilities.
Part B: Support to the Preparation of InvestmentsProvision of goods and consultants' services for, inter alia: (a) (i) preparation of feasibility studies,preliminary designs and bidding documents; and (ii) carrying out of bids evaluation; all for activitiesunder Part A of the Project and/or future investments in the water and wastewater sector; (b)construction management, including supervision, monitoring and evaluation of physicalimplementation of activities under Part A of the Project; and (c) development of benchmarkingsystems and review of design norms.
Part C: Capacity Building, Project Management, Monitoring and EvaluationProvision of goods, consultants' services and training to the Project Coordination Team (PCT) to assistin the implementation, management and auditing of the Project; and (b) strengthening socialaccountability mechanisms on water and wastewater services through, inter alia the provision ofsupport to: (i) Selected Water and Wastewater Service Providers to develop communication plans toimprove their communication with their customers through, inter alia: (A) the development and/orupdate of websites; and (B) the enhancement of the information contained in existing websites and/orinformation displayed, publicly in their premises; and (ii) strengthen existing grievance redressmechanisms to enhance service delivery.
The Project is being implemented by State Enterprise "Belcomtehinvest". The Enterprise keepsaccounting records and primary documents regarding the funds transferred to its accounts.
2. ACCOUNTING POLICIES
Fundamental accounting principles - the present Financial Statements of the Project are preparedon a cash basis, which complies with the requirements of International Accounting Standardsdeveloped by the Public Sector Committee of the International Federation of Accountants (IFAC).A project financing is deemed to be a source of the project's funds at the moment of receipt of funds.Project costs is deemed to be an application of project's funds at the moment of payment.Foreign currency transactions - the present Financial Statements are prepared in US Dollars unlessstated otherwise. Transactions in other currency are translated in US Dollars at the rate of transactiondate.
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ADDITIONAL FINANCING FOR THE WATER SUPPLY AND SANITATION PROJECT
LOAN No. 8352-BY
3. SPECIAL ACCOUNT
Special account is an account in US Dollars in GOPERU JSC "Belinvestbank (the Republic ofBelarus), designed to control payments regarding the Project in the established amounts that do notrequire approval from IBRD in accordance with the terms of the Agreement.
4. TRANSACTION ACCOUNT
Transaction account is account in Belarusian rubles for receipt cash that have been received fromconversion of foreign currency (foundation of financing).
5. FOUNDATION OF FINANCING
Expenses of Category 1 (Goods, works and consulting services) equal to 100 per cent are financedfrom proceeds of IBRD Loan.Category 2 represents a commission fee in the amount of USD 225 thousand withheld by IBRD for itsown benefit from the loan account in accordance with the Agreement.A Loan allocation by types of reimbursable expenses is as follows:
Category of expenses Loan amountCategory 1: Goods, works and consulting services 89,775,000.00Category 2: Commission fee 225,000.00Total 2,000,00
90, 000, 000. 00Aforementioned planned indicators are prepared for the whole period of the Project only, thereforethey are not present in the Report in comparison to actual expenses for the period from 1 July 2014 to31 December 2015.
6. WITHDRAWAL METHOD
Withdrawal methods used within the reporting period include: transfers from IBRD to the SpecialAccount with further withdrawal by the Enterprise and direct payments executed by IBRD to theEnterprise on the basis of withdrawal applications,
7. FOUNDATION OF FINANCING
Withdrawal applications
Expenses incurred from 1 July 2014 to 31 December 2015 6,217,355.67Total expenses incurred from 1 July 2014 to 31 December 2015 6,217,355.67Funds received from IBRD from 1 July 2014 to 31 December 2015:Replenishment of the Special Account 4,600,000.00Direct payments 1,948,590.41Front-end fee 225,000.00
Plus: Balance on the Special Account at 1 July 2014Minus: Front-end fee
225,000.00Minus: Balance on the Special Account at 31 December 2015 330,234.73Minus: Current BYR Account Statement 1,000,01Total expenses incurred from 1 July 2014 to 31 December 2015 6,217,355.67
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