ALAT AND KARAKUL WATER SUPPLY PROJECT
(IDA LOAN N 5189-UZ)
THE "KOMMUNKHIZMAT" AGENCY'S
WORLD BANK PROJECTS COORDINATION GROUP
INDEPENDENT AUDITOR'N RFPORT AND
FINANCIAL STATEMENTS
FOR TIE YEAR ENDED 31 DECEMBER, 2018


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP
TABLE OF CONTENT
INDEPENDENT AUDITOR'S REPORT                                        2
STATEMENT OF CASH RECEIPTS AND PAYMENTS                             4
STATEMENT USES OF FUND BY COMPONENT EXPENDITURE TYPE                5
1. PROJECT DESCRIPTION                                              6
2. SIGNIFICANT ACCOUNTING POLICIES                                  9
A. CORRECTIONS OF ERRORS OF THE SOURCE OF IDA                      15
B. CORRECTIONS OF ERRORS OF THE SOURCE OF THE UZBEKISTAN           15
3. RECONCILIATION OF IDA FINANCING                                 15
4. THE WORLD BANK'S DIRECT PAYMENTS                                16
5. DIRECT PAYMENTS OF CO-FINANCING OF THE UZBEKISTAN               17
6. REPLENISHMENT AND ADVANCE                                       18
7. ERROR RECEIPTS (PAYMENTS) AND REFUND OF THEM                    18
8. CASH OUTFLOWS BY COMPONENTS AND CATEGORIES                      19
9. OTHER RECEIPTS AND OTHER PAYMENTS                               19
10. FOREIGN EXCHANGE DIFFERENCE                                    20
11. DESIGNATED AND OTHER ACCOUNTS                                  20
12. DESIGNATED ACCOUNT IN ITSD - PCG                               21
13. DESIGNATED ACCOUNt i1N 1-)uKu - rLt                           22
14. DESIGNATED ACCOUNT IN UZS - PCG                                23
15. CONVERSION ACCOUNT IN UZS - BVK                                25
16. DESIGNATED ACCOUNT IN UZS - BVK                                26


Management of "Kommunkhizmat" Agency's World Bank Projects coordination group (hereinafter - the "PCG")
is responsible for the preparation of the financial statements, that fairly present, in all material respects, Financial
reporting under the cash basis of accounting for the year ended 31 December, 2018, prepared in accordance with
International Public Sector Accounting Standard under the cash basis of accounting (hereinafter - the "IPSAS")
and notes to the financial reporting, including a summary of significant accounting policies.
In preparing the financial statements, management is responsible for:
-     selecting of proper accounting principles and its consistent application;
-     presenting information, including accounting policies, in a manner that provides relevance, reliability,
comparability and understandability of such information;
-     using of reasonable and appropriate estimates and assumptions;
-     providing additional disclosures when compliance with the requirements of IPSAS is insufficient for users
of the financial statements to understand the impact of particular transactions; and
cassessni. of die PCCL ability to continue as a going coiicCrII in the foreseable future.
Management is also responsible for:
-     overall coordination of the projects, imoniitoring, evaluation, reporting and support for engineering,
pronirement 'nel financial managemente
-     use of funds in accordance with financing agreement and Operational Manual;
-     designing, implementing and maintaining the effective and reliable functionality of the internal control
system;
-     maintaining adequate accounting system, allowing the preparation of information about the PCG's cash
flows and non-cash activities at any time with reasonable accuracy, and to ensure compliance of financial
statements with IPSAS;
-     maintaining accounting records in accordance with the legislation of the Republic of Uzbekistan;
-     adopting measures within its competence to safeguard assets of the PCG; and
-     detecting and preventing fraud and other irregularities.
The Financial reporting under the cash basis of accounting for the year ended 31 December, 2018 were approved
by management of the PCG on June 30, 2019.
PCG coordinator
a or Sh.
Accountant of PCG
Khakimova G.


GrantThornton
An instinct for growth'
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INDEPENDENT AUDITOR'S REPORT                                                Tashkent, 100128,
Republic of Uzbekistan
Tel.: +998 (71) 230-45-43
Fax: +998 (71) 244-47-43
To management of "Kommunkhizmat" Agency's                                   W: +998a(t1hor44-47-4
World Bank Projects coordination group
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of the "Kommunkhizmat" Agency's World Bank Project coordination
group (hereinafter - the "PCG") "Alar and Karakul Water Supply Project" (hereinafter - the "Project") which
comprise the Statement of cash receipts and payments. the Statement uses of funds by component expenditure
type for the year ended December 31, 2018, and notes to the financial statements including summary of
significant accounting policies.
In our opinion, the accompanying financial statements present fairly, in all material respects, the statement of
cash receipts and payments, and the statement uses of funds by component expenditure type for the year ended
December 31, 2018 in accordance with International Public Sector Accounting Standard, "Financial reporting
under the cash basis of accounting" (hereinafter - the "IPSAS'".
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (hereafter - the "ISAs'". Our
responsibilities under those standards are further described in the Auditor's R,sponsib1i,s /or lbeAm/lit o/J`inancrd
section of our report. We are independent of the PCC in aord'<aenct with rh ecthical reuirements
that arc relevant to our audit of the financial statcmcnts in the Republic of Uxbekistan, and w L ha\ L fUlfilCd out
other ethical responsibilities in accordance with rhese requirements. \ e believe that the audit evidence we have
ohtained i nqiffienrt Anr pprpriate rn pro-VidC a basis fur our qualified npinion.
Emphasis of Matter
We draw attention to that the financial statements are prepared in accordance with IPSAS "Financial reporting
under cash basis of accounting". The financial statement is prepared to provide information to Management of
PCG. As a result, the statement may not be suitable for another purpose. Our opinion is not modified in
respect of this matter.
Member of Grant Thornton International


Grant Thornton
An instinct for growth
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance
with IPSASs and for such internal control as management determines is necessary to enable the preparation of
financial statements that are free from material misstatement, whether dlue to fraud or error.
In preparing the financial statements, management is responsible for assessing the PCGs ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless management either intends to liquidate the PCG or to cease operations, or has no realistic
alternative but to do so.
Those charged with governance are responsible for overseeing the PCG's financial reporting process.
Auditor's Responsibilities for the Audit of Financial Statements
Our obicctive is to obtain reasonable assLranc AbOUIt wlethcr the 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 it is not a guarantee that an audit conducted in
accordance with ISAs will always detect a material misstatement when it exist. Material 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 financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional
skepticiEm throughout the audit. We also:
-   Identify and assess the risks of material misstatement of financial statements, whether due to fraud or
error; design and perform audit procedures responsive to those risks; and obtain audit evidence that is
liufficient and appr .priat (- pL-vi& a LAs fAut ouipitioti. Th- ii  uf not dtuLtintg A ituILL11
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omission, misrepresentations, or 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 PCG's internal control.
-   Evaluiate the appropriateness of accounting policies used and reasonableness of accounting estimates and
the 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 PCG'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 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 PCG to cease to continue as a going concern.


GrantThornton
An instinct for growth
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 audit.
Partner:                                         arimov
/
Senior manager:                           N. N. Yulchiev
28 June, 2019                                                Li 0  6
Tashkent, the Republic of Uzbekistan


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP
STATEMENT OF CASH RECEIPTS AND PAYMENTS
For year ended December 31, 2018
in US dollars                    Notes         2018     Cumulative        2017    Cumulative,
(revised)     (revised)
OPENING CASH BALANCES
Designated account in USD - PCG     12      2 637 210           -       142 541
Designated account in EUR - PCG     13             -            -           -
Designated account in UZS - PCG     14            13                        -
Designated account in UZS - PCG     14             1            -            1
Conversion account in UZS - BVK     15            -             -        88640
Designated account in UZS - BVK     16         6 070           -             -
Total opening cash balance                  2 643 294           -       231 182
RECEIPTS
Direct Payments:
-the source of IDA                 4      9352280      31 933095    14582343      22580815
-the source of IDA                 5      4 891 247     7 618 676    1 869 680     2 727 428
Designated Account Replenishment:                               -
the source of IDA                  6            -       5 599 571    4 729 012     5 599 571
the source of Co-financing         6       535638       3162844      2531 395      2627206
Refunds Application (IDA)           4             -      (2655661)   (2655661)     (2655661)
Receipts from other Projects' accounts  7     26 392        26 592         200           200
Othor roooipto                      0         10 Z43        10 43
Total receipts                             14822100      45701 660   21 056969     30879559
Total cash available                       17465 394     45 701 660  21 288 151    30 879 559
PAYMENTS
Part A. Improvement of Water Supply      (14 704 965)  (41 877 877)  (17 733 530)  (27 172 912)
Infrastructure
Part B. Institutional Strengthening and           -             -            -            -
Capacity Building
Part C. Feasibility Studies for Future      (157 679)     (157 679)          -            -
Investments
Part D. Project Management                  (124 199)     (276 549)    (10 643)      (152 350)
Bank charges                                  (3 279)      (20 001)    (16 723)       (16 723)
Transfer of funds to other Projects'  7        (200)       (28 342)    (24 992)       (28 142)
accounts
Total payments                           (14 990 321)  (42 360 448)  (17 785 888)  (27 370 126)
Effect of changes in foreign exchange  10      1 997      (864 144)    (858 971)     (866 141)
CLOSING CASH BALANCES
Designated account in USD - PCG     12     2475 026       2475 026    2637210       2637 210
Designated account in EUR - PCG     13            -             -            -             -
Designated account in UZS - PCG     14            -             -           13            13
Designated account in UZS - PCG     14            -             -            1             1
Conversion account in UZS - BVK     15            -             -            -             -
Designated account in UZS - BVK     16         2 042         2 042        6 070         6 070
Total closing cash balance                  2 477 068     2 477 068   2 643 294     2 643 294
PCG coordinator                                 Accountant of PCG
Sh. Gulornov                                    G. Khakimova           .
June 28, 2
TaAhkcnt, lic Rpublic of UzbckisLan
Notes to the financial statements on pages 6 to 31 are integral part of these statement  / 4


ALAT AND KARAKUL WAER SU: PLY PRO,,ECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT" AGENCY'S 'WORLC EAN14 PROJECTS COORDINATION GROUP
STATEMENT USES OF FUND BY 2OMPONENT EXPENDITURE TYPE
For year ended Decembcr 31., 2IL8
Actual                        Budget                         Variance
In US dollars
2018      Cunulative           2018      cumulative          2018       Cumulative
COMPONENTS
Part A. Improvement of Wa-ar SIppy Infras-ricture     (14 704 965)   (41 77 877)    :25 585 000)   (60 976 000)    (10880035)      (19 098 123)
Part B. Institutional Strengtheniing and CapaGty Building        -              -               -              -
Part C. Feasibility Stud es fcr Future nvestTents         (157 679)      ( 57 679)       (200 000)      (200 000)       (42 322)        (42 322)
Part D. Project Managemerl                                (124 199)      (27E 549)       (436 449)    (2182243)        (312 250)      (1 905 694)
Bank charges (Source Df Cc-finanang)                       (3279)          21 00')              -              -          3279           20001
Transfer to other projects' accounts                         (200)         2E 342)              -              -            200          28 342
Total                                                  (14 990 321)   (42 .6 3 448)  _26 221 449)    (63 358 243)    (11 231 127)    (20 997 795)
PCG coordinator                                                          A.mzoT_tant -f F C:G
Sh. Gulornw~r         *G tZiakinicla-
June 28, 2019
Tashkent, thz Republic of UJ±eki4an
Notes to the financial statemtm on -aes .i o 31- at integral part of these statement                                                5


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
1. PROJECT DESCRIPTION
Introduction
The Republic of Lzbckistan (hereinafter - the "izbekistan') has received the approval Of [lie International
Development Association (hereinafter - the "IDA") [or a credit to improve the coverage, qualiV and efficiency
of piblic water su1pply services in districts of Alat and Karakul in the Bukhara region through the
implementation of the Alat and 1Karakul Water Supply Project (hereina ter - the "Project"). The project include
rehabilitation, replacement, and limited expansion of water supply intrasruciure and the illstittionll capacity
building of Bukhara Regional Suvokaxa PBYK) utility.
The total cost of the project is [S) 138.9 million. In accordance with aitnacing agrement signed between IDA
and Lzbekistan No. 5189-!Z on 18 l- 213 the Project financed bV the loans of I1\ in amoui  of  3.2
million SDR (fifN three million two hutidred thotusand Special Drawing Riglts) eluivaletl to 88.0 million I_S
dollars) and remaining amlount of fuids l inanced by the source of 1he  bekistan in cash and kind forms of
contribu tio Ins.
The Mlini:are (if hinanci of thu RpuibliW o I ' khckistaln is p'inibl  I  iepA lng lie 10.\ I.  on  hll
the L'zbekistan in coince will Ih' financing agreement Th interest rate on lf)ans of ID .\ colisls Interest
rate Iof .75', per annum of lie pritncipal amunt and int 1 e'ir c raw U.5" pir 1n111  should be paid nII tle
I Itiwever, thereL Is ai  tgreeiieit in iOin-lending11 betweenl the ,\Iiistry. of, Hti:11ee of, the 1Republtc oft iL zektst;I1
and the llukhara SL I "S\v'Lava'" (hereindler - B oK l on accepting the obligaItioins specified in the IMacin
Agreemient.
Plvlro,ljc cmlls'if,  11  In  illti pat's eptlts:
Part A: Improvement of water supply infrastructure
1. Engineering-design and operational technical assistance services to support the PCG, at the level of the
Project Implementing Entity, in the following tasks of Project implementation: (a) review of the available
feasibility study and preparation of optimized preliminary designs; (b) preparation of detailed designs and
bidding documents, construction supervision, and reporting; and (c) improvement utility operation,
maintenance and management, all through the provision of goods and consultants' services.
2. Rehabilitation and expansion of water production and bulk transmission systems through: (a) the
construction of a new expanded water treatment plant in Dvoinik, including the rehabilitation of the existing
intake and pre-sedimentation ponds; (b) the renewal and expansion of transmission systems including the 24
km trunk line from Dvoinik to Alat-town; (c) the rehabilitation of the 13 km trunk line from Alat-town to
Karakul town; and (d) the rehabilitation and expansion of the transmission pumping stations and related water
tanks to upgrade the production and transmission capacity to 49,800 m3 per day, all through the carrying out of
works and the provision of goods and consultants' services.
3. Rehabilitation and expansion of urban and rural water networks through: (a) the rehabilitation and expansion
of existing water distribution systems in Alat-town and Karakul-town, including treated water tanks, treated
6


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER, 2018
1. PROJECT DESCRIPTION (CONTINUED)
Part A: Improvement of water supply infrastructure (continued)
water pumping stations, disinfection systems, distribution networks, installation of meters on about 7,200
existing household connections and installation of about 1,600 new household connections and meters; and (b)
construction of new rural water transmission and distribution systems, including pumping, storage, networks
and metered connections in about 120 of the surrounding villages based on the optimized feasibility study and
preliminary design cost estimates, all through the carrying out of works and the provision of goods and
consultants' services.
Part B: Institutional strengthening and capacity-building
1. Institutional strengthening and capacity building through the carrying out of institutional assessments of the
capacity, organization and training needs of the Project Implementing Entity to improve its management and
operational performance for a sustainable water supply service in the Alat and Karakul districts.
2. Strengthening the capacity of utility management and operationstal y providig local and inerniational
training on management and technical operations, through the provision of consultants' services and raining
3. Strengthening the management and operational capacity of Project Implementing Entity through: (a) the
establishment of modem procedures and systems, including hardware and software, for billing, collection,
customer service, internal auditing, accounting and record keeping; (b) the provision of operations and
maintenance equipment and machinery; and (c) the provision ot laboratory equipment and supplies, all through
the provision of goods, consul tai ts' services and Training,
4. Developing a communications strategy and carnving out of public consultations and awareness campaign,
consumer satisfaction and gender surveys, through the provision of consultants' services.
Part C: Studies for Future Investments
Preparation of a feasibility study of sewerage and on-site sanitation investments necds in the towns and districts
of Alat and Karakul, to accompany the increased provision of water supply services, through the provision of
consultants' services.
Part D: Project Management
Strengthening the capacity of the PCG, at level the Project Implementing Entity, in Project management,
monitoring and coordination capacity, through the provision of goods, consultants' services, including Project
financial and technical audits, and Training, and financing of Incremental Operating Costs.
7


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER, 2018
1. PROJECT DESCRIPTION (CONTINUED)
Part D: Project Management (continued)
The following table specifies the categories of Eligible Expenditures that are financed by IDA and by the source
of Uzbekistan:
'Percentage of expenditures
Amount of Financing ai Training
an Specm Drawing Rights (SDR)                                                 by the source
Allocated          byt th
of the Republic of
source of A                    I
Uzbekistan
Works                                         18960000           69,20%              30,80%
Goods                                         26540 000         69,20%              30,80%
Consultants' services including audit, Training
and Incremental Operating Costs                7700000            100%                   -
53200000
1lowever, in accordanc e lete aoe World Bank's letter #05610/IS fro  November 08, 2018 the percentage of
Ihxpendciures to be financed by IDA changed in the following order:
Amount of the            Percentage of Fxpenditurje
in Specilf Drawing    dMights (SDR)
Financing Allocated                     to be Financed
69,2% up to September 9, 2018
Works                                         42e290l000       and 100% from September 10, 2018
onwards
69,2%/ up to September 9, 2018
Goods                                          3 210 000       and 100%/ trom September 1U, 2U18
onwards
Consultants' services including audit, Training  7 700000                             100%
and Incremental Operating Costs
53 200 000
Also, according to the letter above, the World Bank established _June 30, 2020 as the later date of loan
completion,
Project management
According to Presidential Decree Project Coordination Group (hereafter - he "PCG") is established in
Tashkent city under the executive board of the "Kommunkhixmat" Agency (hereinafter - the "Agency"). PCG
13 ACCOumableI)I to 11he auoi(ze11'd persion dhc Cuncruil Dircutut of dic ArecPC iL, guiddi in) its ctiiyb
Decree of the President of Uzbekistan Ne4PP-1610 dated 28 August, 2011, the Financinig and Project
Agreements, applicable World Bank guidelines, sub credit agreements, as well as the Constitution and laws of
the Republic of Uzbekistan, decrees and instructions of the Cabinet of Min-isters, regulatory acts of the Ministry
of Finance oE Republic of Uzbekistan and the established Operational Ma.nual.
PCC is rcsponsible for overall Project coordination and reporting. The PCG will be reqponsible For provi.sion
of assistance to the BVKC in implementation of the Project in procurement, financial management, and other
aspects to the extent required, in direct coniiunnication w'ith the World Bank-
8


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
'KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER, 2018
1. PROJECT DESCRIPTION (CONTINUED)
Project management (continued)
Adso, PCG is responsible to:
supevise and rake part in day-ro-day opeLraioniil acvites rAing     the Projet. inclding
procurements and financial management
o- incorpora[iion of financial Wonitoring system or ccoinrol and accounting for disbursement and inds of
co-fiancing olrgaizations, for providing adequate monjtoing and providing recoimmendaotio to the
PCG Coo irdinator regarding avalability and payvout of Ul  and the  ovemrnment of Låbekistan funkds
prNiepare statements of all tinancial ransactions in Projecl Co-tnancig:
keep reconrds ( all financial tnisactions wihin the Pr-oject franework: and
keeping all Prtoject aecunts, dhe targeted use of funds vithin the Project framework, preparing inancial
reports and conducting titincial comr-ol ii contIormity with the exising nonrs and regulatins of the
Republe of Lzbekistan nd the World Bank financial riptrti guiielncs.
\  ienc  i:m ageniiy'm ithle iiirnmental level. ie:pu:lble for t coordin.iuin of wir .mdi .mii,,n in i
labekistan. Ihe 1C  was established by the Agency for he control and ionrdination ot f projects inaincd bY
the \\'irld Bank.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis for presentation of financial statenents
1he fnancial surcents have been preparcd on a cash basis of accotunig by PC(, m1i accordance vitli te
Iermational PIibliC Secir \ccouming Standard (ereinaftr - he "iPSÄS") "inanicial RepoIrMtig nder ( Cas
Basis of Acconting"', issied by the International lP1blic Secio etrint n S tandads  <aor tnienei iaer  lie
Th1e inancial statements prepared and prcesentred general purtpm  financial statemenis which inchude tie
following Cominiplionemt ts:
r   statememr of cash reCeipts and payients which recognizes all cish yeCeips, cash paymems and cash
balances controlled by the ,C(G and BV E:
Accounling policis and exphlnatio iioes; and
\ppoxed budget, a cotmparison of budge and actual amounts.
The financial siaterlents prepared in Ltited States io Anerica dollars (lereinafter - dhe ~US dollars") with
rounditig to dollar. Reportitg period of financial sLatemenis - is the calendar vear from Janary 1 uo iDecember
31
9


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER, 2018
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The cash basis accounting
Tbe cash basis of accounting recognizes transactions and evnts onkl when casli inding cash equiWalents) is
received and paid by the PCG and BVY    regarding the Project. The \nancia staemnrts provide wxiih
in formaotn abot tbe sorce of cash receivd durig the period. tbe purposus for whiih cash was used and the
cash balances at Ile reporting date regarding the ]Project.
The ntiatncial statemntls consist onl] cash and cash equivalets inlos and ;oulows as requtired IPS\S
iFinancial Reporting under Cash Basis of Accounting". \on-monetary assets are nti inicluded and disclosed in
the 6nancial statineems.
Cash
in accordatie wxth IPS AS "inancial Reprting under (Csh Basis of Acvonting casli is controlled lby in entir
w    ien the etitity Can os dth vash for the achiveme  of < s iw ibjectives (Ir othrwisv benent froi tlie cash
ind  xcli il  or rl u l lii  ear  of i rhers  1 thi  beni i
DuiIdug i th  e:ii PCG i- 1roilled (lIl init]iwt eilI omhitti  and ik  cali blances oi lhe bankl accountits
(hiiater - the "esignatred .\veo1ms - ICN    p     in the JSC  ":dnkorbank" Tashkent branch,
Republic oL zbekistli . These l)esignaied .\counts -( pCGoened for te purpose ut inancig t  ijet by
the source of IDA.. .\1l Cash nlows and cash ouliws of- the Designated  ccountls  PC  occur duie lo Tl
ID:\ source.
In ai-ddiin, tr the purpose t ining the lrtject by the soure of the Lzbekistai (hereinaner - ie 'Co-
Lanctin) the-  V  utses tle bank accoims (herinier l "Designated :\ccounts - IW\K  in ie [SC13
"I lankorankt Bukhara region brancv, rhe Rpule If mzbekistn. irinig the year BV  conrolled cash
iiliw  cashi italws aid cash balanes nf these Design;ned \ccllots - B\K. '\ll cash inlws and cash
oulIs of Ihe Designated \ccunts - BV occur -e to tie Co-financing soire.
Going concern
\ccording to the Protocol No. 229 of tle Iieeitig of thIe interdeparlmetieal Cuil i cioperaliol witli
timleriational nillaincial i osritionl11i s,org ianiza tionis and donor countries,  e imipleientation  f larg invesilment
pirjects under the Cabine of Ministers F the Republic of Lzbekistan dared on 1W June 2M, eumplvn dare
of the loati  s extended to 31 June 2<19. Howver, in accordance MWit Ihe \krld Bank's leter #15610118
Ii mii 5, eRinber S 2 , te rkld Bank csYdblihkd Jm, 3X 212.i  dith ltiti  0aoh  ildin.
The- fiianiial staiemnents prtepareil n rhe basis nf a-ina conicemi] ndl h¼nV is inot eniiOrdl 111 li1
10


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER, 2018
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Principles and standards of financial manageinent system
The !iancial M lanageient Manual conprises of poliics and proceires to assist in enuring ille oritrl and
efficient managenent and control of all project resources, anid to render proper accounrabilit ro all
siakeholders. It is concernwciih efecti(e tInancial control over project assets. liailities, finds, and
expenditure together xvid the systems reqtired a accon[ing for ihe tinancial øperatons o the projecl. The
mainual sets Forth the policies ani procedures for the guidaneu of all personnel involved in fhnancal
inanagenent.
Ihe polieies and guidebnes cnve standards for sond financial management and administratin for the
project, and are designei lo:
promowt orderly, eco-iniollic. epcienlt :tni etftective perations consistent with projeer objectives;
r prevent and detet fraud and errors;
ensure accuracy and compleieness of tle aucconting records;
faheilirtate tinely preparatioin of 1inancial inf,oriation and ensure thal Aineial staments art fairly ai
accura tely presenteil
saftguard Projeci asscts: and
ensure ccompliance wih applcalble lavs, ponicies and regtlai4ns.
Changes in accounling poliy xill be   hefri     dat    amndmnient and wil ni  have roaclive
.ip li1do [J ik  luoiak l < ho  w  ill li,)  1bi  linide  fo k th 'le  lý,kakt i[liilg  pkled
PrimarN aCcounting dloentnis - t basis tor relectmin eac business transacion in the accontling recoris is a
pri eryac ontin  doc en ti  irie lh d ct I  h l      e 1per> s  n11 d il 4- <liso l of  i  hei :i   I r 4    uil
dcenctsi is not ermtit o ed to ailtnt, is not eunfirnd bV  phes    isiness transaction, ltle
bank and cashmnetary instrunt[s corrietions are no[ -alltwed.
Aln orignal documents siotuldl be ild ani kiiept in Ite appropriate folders.
Measurtment of operational lransal ions- all comied transactions are Illeasured l tlheir bistic cost at ile
date  i- Ite  transatin.
Currencies reilect t hsiness trainsactions in thv: accntiiing rec(rd  - all iommitted iranactin<s in the
fraiexwork of the project are relected in the acconng recoris in two curreies: LS dollar and LZS.
Withdrawal procedure through Statenent of Expenditure use
Along \with te appiakion of the Speial Account procedure, the Borrowver ma1 indeiendenty nance Project
explentiditnres, antd then receive reimbursement from credit proceeds.
According to this nehod, PCG  sends to the World Bank tr subseqluent delivery to the relevant disbursenment
divison an appheanmon tor reimbursement of expenses incurred suAng application form # 23M, filled ouit on the.
hac oF Smernt nf [ipinni   herpiintrr th  "eFI") In rbi i i [rm i    th. ,ct;l;
documents.   e WVorld Bank sends SOE Forms to PCU along xit the disbursement letter For the Projeet. The
letter contains Lxplana~ of the [lau ni uf d> dIsburlemiuiL
1l


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER, 2018
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Withdrawal procedure through Statement of Expenditure use (Continued)
'Ie SOE witbdrawal procedure is uised for the follkwing expentliture categories:
I  gotos procured under contracts with a valuc less thian 100 000 1 -SI) caeh:
-  works under contracs with a value of kess than 5KOM M liSD cahe:
r  services uinder contracts with a alue of Iess tbati lit) 10000 U) Ceach for consuln  cmipanies and
50 () LSD) cach for individual consuilrants anl
e current expenditures on conditots agreecd with te Bank.
Taxes and Duties
In accordance with Decree uf the Preside ou the Repulic of Uzbekistan No. PD-20t1 of 15 JIty 21M3 "0On
measures Cor be irnplementation uf the "Alat and Karakul \aer Supp alti iect with tbh participation of
[D:\" and joint Resolution of tbe MEnistry of linance of the Republie of tzbekistan No. 64 olf 16 April 2(i(i4
it'  'fw\    iioniiinili' of hiie RIpubh0 lekttit  N. Ve n4-15  f ut (\pril 1uM4 and rie Miuis
miintc( (5i 11t   lc l ll   t bL k m  . o- t'3-22 \t  l Ä ljil 2luui4  1 >11 atplional olt dli khtRguliuiot
kilt thll k ul11011 oi g~6d  jutkb, huttucs) tnpnued.id1 acinired  i  ith  irliory ot Ripi u
at tbc exptnse f bof)rro\el funds and guatratntecd byI th Republic of 1 zbekistai txitin tic franework of
intvestmtil  projCeCIs ivolving  tirnational  inancial institutiis and  foreigi gmxrnmimal finanial
organizanons' goods, w torks anc services, provided and paid for in the ter'itory of the Republic of 1zbekistan
and financed by Il \ 1l ians, are exenpt from taxes and due:. The:c tax andx duty privilege:: are part of the Co
itancmgl ut L z kiii  i  hnil  fltim .
TIis normn statres that pi'jete partieipants in 1he framework of their activities it tbe expense of loans of
Inernational Financial linsmtitions (hereinafter - ite 'IIIs') do n  pa:
- v'alne added lax:,
excise dulties:
custons dItLies:
Sfc'cs to tce Repulblcau Road [11und( ot te cosit fthe vebieles puirehas'd under tbc project, paid by
buyers wbhen registerilng With] tbe bodies of tbe Ministry of Inrernal Mfairs of the Repfblic of
zbäekistan; and
mandat contr'ibudouns to the extra budgetary Pension hund, the Repullican Road 1tund and te extra
budget ary 1und for tbhe developiment t school educition.
'This norrn applies both to imported goods (works, services), and to goods (works, servics) purchased in tIe
territorY of the Repubbc of Uzbelistan at the expense of Ilfs' LMans.
The project participat in tie tramewti'ork of tbe implernettation of acticiies at the expense of the 1  l ans
include:
the project executive (project iåplementation group or project nmanagement group, etc.):
legal contractors thar pertvtrm projects, including "turnkey" upon dclvery of the volime of work
performed by then to the customer - the projet executive body: and
legal entices (subcontractors, suppliers) sellinggoods Yorks, services) to the project executive body, as
well as contractors who won the tender for project inmplementation in accordance with the concluded
agrcements.
12


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER, 2018
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Reporting currency and methodology of conversion
The financial statenents prepared in the LS dollar. A significant portion oC the Project's cash intlows and
outflmys made in L"S dollars. Nevertheless, the Project has accounts in Uzbek Soums (hereinafter the - "'ZS"),
which are used to receive funds and pPn expenses, including for payment to foreign contractors and suppliers.
Cash inTloiws anId outlOws in ZS were converted to US dollars using the following conversion principles:
Cash inflows and outflovs in VZS were converted to VS cllar using the following conversion prin ciples:
>   Ior the source of i)A. cash inflows and Outilows were cot nveried intf  S dollars usin list orical
exclhalge rate oF he Cieniral Bank of the ReptbliC of L.ibekisran (hereinafter -the "CiRL  from 2014
to 2017 and for 2018 commercial exchange rate ls used on the date of conversion oc US dollars int
L/S (1(11 ) method):
1 or Ihe sOutre of LIzbekistan, cash in t1os and outflows were converted inro tS dollar using the
official exchange rate C3RU  oin the date of transaction and the balance 2mni nt of he IDesignated
AccounAt - BV  mcinverted inti I.S dlar tusing the exchange rate n the date Of IDecember 31, 2018.
Correction of errors
\h'n n error arises in relation to catl balance reported in the financal talteilmeltc, the iamoutii of [lie error
that relates to prior periods, PCG reported by adjusting the cash at the beginning of the period. Also, PCG
restates comparative information and disclosed in the notes to the financial statements the following:
r The nature of the error;
> The amount of the correction; and
r The fact that comparative information has been restated or that it is impracticable to do so.
In the following table PCG describes amount of adjustments made to the prior years (cumulative) and to 2017.
Also, in the notes (Note A and B) to the financial statements, PCG disclosed the nature of the errors arose.
13


ALAT AND KARAKU- WATER SUPPLY PRC-JECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT' 4GENCY'S WORLD BANK PROJECTS COORDINATICN GROUP
NOTES TO FINANC LL,. STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2013
2. SIGNIFICANT ,CCOUNTING POLICIES (CONTINUED)
Correctiii of err.:r! 'cantinued)
in US dollars                                         Notes         2017   Cumulative         2017    Cumulative       2017    Cumulative
(revised)   (revised) (adjustments) (adjustments) (initial record) (initial record)
OPENING CASH B ANCES
Designated accourr in USD - PCG                         A        142541           -            -            -       142541
Designated accoinr in EUR - PCG                         A            -                         -            -            -
Designated accoirr in UZS - PCG                         A            --                        -            -            -
Designated accourn in UZ3 - PCG                         B             1           -            -            -            1
Conversion account in UZ3 - BVK                         B         88640           -         88640            -                        -
Designated accoin in UZS3 - BVK                        B            -            -            -            -            -
Total opening cash 7alance                                       231 182          -         88640            -      142 542          -
RECEIPTS
Source of IDA                                           A     16 655 E94  25524925          (105)        (107)   16655999    25525032
Source of Co-finani -g                                  B      4 401 075    5 354 634    4 401 075    5 354 634          -           -
Total receipts                                                21 056 969   30 879 559    4 400 970    5 354 527   16 655 999  25 525 032
Total cash availab e                                          21 288151    30879559      4489610      5354527     16798541    25525032
PAYMENTS
Source of IDA                                           A     (14 161 213:  (22 887 703)       58           58   (14161271)   (22887761)
Source of Co-finanzi-g                                  B      (3 624 675:  (4 482423)   (3624675)    (4482423)          -
Total payments                                                (17 785 888)  (27 370 126)  (3 624 617)  (4482 365)  (14 161 271)  (22 887 761)
Effect of zhanges i  e  exchange rates or cash, net    A,B      (858 9711   (866 141)     (858 924)    (866 094)       (47)         (47)
CLOSING CASH BALANCES
Designated account in USD - PCG                         A      2637210      2637210            -            -       2637210     2637210
Designated accourif in EU R - PCG                       A            -            -            -            -            -
Designated accourn in UZS - PCG                         A            13          13            -            -            13           13
Designated accourn in UZ3 - PCG                         B             1           1                   -                   1            1
Conversion accouri ti UZS - BVK                         B            -            -            -            -            -
Designated account in UZ3 - BVK                         B          6 070       6070         6070          6070           -
Total closing cash rdance                                      2643294      2643294         6070          6070     2637224     2637224
14


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
A. CORRECTIONS OF ERRORS OF THE SOURCE OF IDA
In previous financial statements PCG did not use historical exchange rate in conversion to US dollars, amounts
paid in UZS from IDA funds (Designated Account in UZS - PCG).
In the previous years there were erroneously payments and receivables from other PCG's Project which was not
disclosed separately in the notes to the financial statements (Note 8).
Substantially adjustments arose in respect of recognizing payments and refunds made in UZS using historical
exchange rates.
B. CORRECTIONS OF ERRORS OF THE SOURCE OF THE UZBEKISTAN
In previous year there were not recognized by PCG cash balances, cash receipts and payments made by the
source of Co-financing of Uzbekistan. PCG made adjustments of financial statements in respect of fairly
presentation of financial statements and recognized all cash balances, cash receipts and payments which was
reflected in adjustments of the financial statements.
3. RECONCILIATION OF IDA FINANCING
The reconciliation of financing between IDA's data on the website at www.worldbank.org in the Client
Connection section and the Project data as of December, 31 2018 is shown in the table bclow:
In US dollars                 Notes     Client Connection data    Project data        Variance,
(www.worldbank.org)
Direct paymenta                 4                (31 033 005)    (31 033 006)
Replenishments and advances     7                 (5 599 571)     (5 599 571)
Refunds Application             4                  2 655 661       2 655 661
Total                                            (34 877 005)    (34 877 005)
The following table summarizes the official exchange rates of UZS to one US dollars established by Central
Bank of the Republic of Uzbekistan and Commercial Bank:
Exchange rate commercial  IExchange rate CBRU        Changes(%
December 31, 2018                           8348,00               833955                 3%
December 31, 2017                            8 120,00             8120,07               151%
December 31, 2016                                  -              3231,48                15%
In accordance with Decree of the President No. UP-5177 "On Priority Measures to Liberalize Monetary Policy"
dated 2 September 2017, legal entities are free to purchase foreign currency to pay for current operations
(import of goods and services, repayment of loans, travel expenses and etc.) in commercial banks from 5
September 2017.
15


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
'KOMWUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
4. THE WORLD BANK'S DIRECT PAYMENTS
The W3rld Bank made payments, at the borrower's request, directly to a third party for eligible expenditures. In the following table described Direct Payments made
during the year by the World Bank to the counterparties from the source of IDA.
In US dollars                                                       Category               2018      Cumulative207                  Cmatv
(revised)       (revised),
MESMER EAST LLC                                                      1-Works         (2 996 908)     (6 795 627)     (3 798 718)    (3 798 718)
SHIMBAR P.J.S.C.                                                     1-Works         (2281 849)      (3 642 241)     (1 360 392)     (1 360 392)
QURIL SH KOCHMA KOLON NA 017 LLC                                    1-Works          (2 275 197)     (3 304 848)     (1 029 651)    (1 029 651)
JV KOGON REMSTROYKOMPLEKT                                            1-Works          (904 192)      (4087 760)      (1 813 258)    (3 183 568)
AQUANIUNDO GMBH                                                     3-Services        (521 297)      (6 286 322)     (1 335 806)    (5 765 025)
01 HAYOT ENGINEERING LLC                                            1-Works          (189 128)      (2911 754)       (972 445)     (2 722 626)
SUNIR LLC                                                           1-Works            (92 270)      (2 950 626)     (2 858 356)    (2 858 356)
GRAN THORNTON LLC                                                   3-Services         (60 835)        (60 835)              -               -
GlJDUVON ZAMONA QURILSH                                             1-Works           (30 603)        (87 139)        (56 536)        (56 536)
CHINA PETROLEUM PIPELINE BUREAU                                      1-Works                  -      (1 357 181)     (1 357 181)    (1 357 181)
CRANES AND SPECIAL TRUCKS LTD                                       2-Goods                   -        (241 162)             -        (241 162)
TONG SUV QURILISH                                                   2-Goods                   -        (207 600)             -        (207 600)
Total                                                                                (9 352 280)    (31 933 095)    (14 582 343)   (22 580 815)
Not6: Additionally, there were Refunds Application for the amount of 2 655 661,00 US dollars in 2017 from the source of International Development Association.
16


ALAT AND KARAKJL WATER. SLPLY    O JECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT' AGENC CS VRLD BANK PROJECTS COORDINAT ON GROUP
NOTES TO FINANCIAL STATE1E3TS
FOR THE YEAR ENCED DSEEMER .1. 2018
5. DIRECT PAYMENTIS OF CO-FINANCING OF THE UZBEKISTAN
During the year the UzbeiLti- Co-Fanaiced eligible expenses of the Prorect thiough Direct Payments of the Treasury account. In the following table stated the amounts
of Direct Payments cf Co-ft-rwng of the _Lzbekistan which were not contnr1led by the PCG:
In US dollars                                                   Category             2018      Cumulative          .07       Cmltv
(revised)      (revised)
MESMER EAST LLC                                                  1-Works        (1 658 460)    (1 912 046)      (253 586)     (253 586)
OBI HAYOT ENGINEERING L_Z                                       1-Works           (47 968)     (1 522143)       (798 478)    (1 474 175)
JV KOGON REMSTP:DYKOIPLE.T                                     1-Works         (1 058 182)    (1 422 912)      (364 730)      (364 730)
SHIMBAR P.J.S.C.                                                 1-Works          (964 070)    (1 249 658)      (285 589)      (285 589)
QURILISH KOCHMA KOLC IA C 17 LLC                               1-Works         (1 153 707)    (1153 707)             -              -
GIJDUVON ZAMONA QUFILIS-I                                      1-Works                  -       (199600)       (160307)       (199600)
CRANES AND SPEC AL TRUCK LTD                                   2-Goods            (8 861)       (158 609)        (6990)       (149 748)
Total                                                                            (4 891 247)   (7 618 676)    (1 869 680)    (2 727 428)
17


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
6. REPLENISHMENT AND ADVANCE
The World Bank may replenish the Designated Account - PCG for expenditures eligible for financing pursuant
to the Financing Agreement (eligible expenditures) that the borrower has pre-financed.
The World Bank may advance funds from the Financing Account into the Designated Account - PCG to
finance eligible expenditures as they are incurred and for which supporting documents will be provided at a later
date.
The Republic of Uzbekistan may advance payment into the Designated Account - BVK for the purpose of Co-
financing the Project's eligible expenditures.
In the following table described replenishment of designated account and advance payments by the sources of
IDA and Co-financing of the Uzbekistan:
2017   Cumulative'
In US dollars                                     2018   Cumulative    (rvsd.rIeie)
RECEIPTS
Designated account replenishment, source of IDA      -     5 599 571  4 729 012    5 599 571
Advances from Co-financing of the Uzbekistan    535 638    3 162 844  2531 395     2627 206
Total                                           535638     8762415    7260407      8226777
7. ERROR RECEIPTS (PAYMENTS) AND REFUND OFT HEM
During the year the PCG had the following refunds of the error receipts and payments made in the previous
years by the source of IDA in the following order:
In US dollars                                     2018   Cumulative       21       uuaie
(revised)    (revised)
RECEIPTS
BSS project                                      1400         1400         -            -
SWS project                                     24992        25192        200          200
Sub-total                                       26 392       26 592        200         200
REFUND/PAYMENTS
BSS project                                        -           -           -            -
SWS project                                       (200)     (28 342)   (24 992)     (28 142)
Sub-total                                         (200)     (28 342)   (24 992)     (28 142)
Total                                            26 192      (1 750)   (24 792)     (27 942)
18


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
8. CASH OUTFLOWS BY COMPONENTS AND CATEGORIES
nUS dollars                                     2018   Cumulative207            Cmltv,
(revised)   (revised)
COMPONENTS
Payments by the source of IDA:
Part A. Improvement of Water Supply infrastructure  (9258791)  (31 966 003)  (14 125 578)  (22707211)
Part B. Institutional Strengthening and Capacity    -            -            --
Building
Part C. Feasibility Studies for Future Investments  (157 679)  (157 679)      -           -
Part D. Project Management                   (124 199)    (276 549)    (10 643)    (152 350)
Sub-total                                   (9 540 669)  (32 400 230)  (14 136 220)  (22 859 562)
Payments by the source of Co-financing:
Part A. Improvement of Water Supply Infrastructure  (5446 174)  (9911 874)  (3607 952)  (4465700)
Sub-total                                   (5446 174)   (9 911 874)  (3607 952)  (4465700)
Total                                      (14 986 843)  (42 312 104)  (17 744 172)  (27 325 262)
* Note: Additionally, there were expenditures incurred in 2018 for the amount of 3 279,00 US dollars in the
form of bank charges (source of co-financing) and 200,00 US dollars as the funds transferred to other Projects'
accounts (source of IDA).
'2017  Cumulativei
In US dollars                                    2018   Cumulative
(revised)   (revised),
CATEGORIES
Payments by the source of IDA:
1-Works                                     (8 820 618)  (25 095 696)  (12 775 508)  (16 275 079)
2-Goods                                       (74 555)    (667 798)     (14 263)   (593 243)
3-Consulting services                         (645 496)  (6 636 736)  (1 346 449)  (5 991 240)
Sub-total                                   (9 540 669)  (32 400 230)  (14 136 220)  (22 859 562)
Payments by the source of Co-financing:
1-Works                                     (5437313)    (9 115 033)  (3534962)   (3677720)
2-Goods                                        (8 861)    (796 840)    (72 990)    (787 980)
Sub-total                                   (5 446 174)  (9 911 874)  (3 607 952)  (4465 700)
Total                                      (14986843)   (42312104)   (17744172)  (27325262)
9. OTHER RECEIPTS AND OTHER PAYMENTS
In the following table described other receipts and other payments made by the source of IDA and Co-
financing of Uzbekistan through the Designated Accounts of PCG and BVK.
in US dollars                                     2018   Cumulative       2017   Cumlative
(revised)    (evised )
Other receipts the source of Co-financing       16 543       16 543        -           -
Sub-total                                       16543        16543         -            -
Other payments                                     -           -
Sub-total                                          -
Total                                           16543       16543--


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
10. FOREIGN EXCHANGE DIFFERENCE
The foreign exchange difference by the sources of IDA and Co-financing of Uzbekistan described in the
following table:
.         2017   Cumutve
In 'US dollars                                      2018 Cumulativei
(revised)    (revised)
Foreign exchange difference, the source of IDA          -       -          -             -
Foreign exchange difference, the source of          1 997   (864144)   (858971)     (866141)
Co-financing
Total                                               1 997   (864 144)  (858 971)    (866 141)
* Note: The value of foreign exchange difference on co-Financing funds relates to exchange rate changes, and
especially to liberalization of UZS in September 1, 2017.
11. DESIGNATED AND OTHER ACCOUNTS
The balances of the designated accounts of the PCG and BVK were as follows:
ar               Sorc of Notes                            -        -
US dollrnoreo                          oe      Balance as at  Balance as at  Balance as a
financing          December 31,  DeCeMber 31,   December 31
2018          2017           2016-1
Designated account in USD - PCG    IDA      12         2475026       2637210         142541
Designated account in EUR - PCG    IDA      13                -             -              -
Designated account in UZS - PCG    IDA      14                -            13
Designated account in UZS - PCG    IDA      14                -             1              1
Conversion Account in UZS - BVK    IDA      15                -             -         88640
Designated account in UZS - BVK*   IDA      16            2 042         6 070
Total                                                  2477068       2643294         231 182
Designated Account in USD - PCG and Designated Accounts in UZS - PCG opened in JSCB "Hamkorbank"
Tashkent branch in Uzbekistan. These Designated Accounts are for the purpose of financing the Project's
eligible expenditures by the source of IDA.
The international rating agency Moody's affirmed the ratings of the JSCB "Hamkorbank", forecast is Stable.
The ratings of deposits in national currency B1 and foreign currencies at B2 (www.hamkorbank.uz).
Designated account in UZS - BVK opened in JSCB "Hamkorbank" Bukhara region branch in Uzbekistan, for
the purpose of financing the Project, by the source Co-financing of Uzbekistan.
These Designated Account is controlled by the BVK.
* Note. Designated account - BVK described only Co-financing funds of the Republic of Uzbekistan. Due to
the fact that there are other inflows and outflows, which are not Co-financing funds, amount of closing cash
balance as at December 31, 2018 may be differ than stated.
20


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
12. DESIGNATED ACCOUNT IN USD - PCG
In the following table shown transactions made during 2018 and 2017 by designated account in USD - PCG.
Account No                                                              22626840904262646001
Depositary Bank                                                          JSCB "HAMKORBANK"
Address                                                                    Tashkent, Uzbekistan'
,ource of financing                                                       IDA loan No.5189-UZ
Notes                        In US dollars
Openning balance as at January 1, 2017                11                             142541
RECEIPT:
World Bank IDA Replenishment                           6                            4729 012
Sub-total                                                                           4 729 012
Total cash available                                                                4 871 553
PAYMENTS:
Transfer to designated 1arni nt in Furn              13                           (1 390000)
Work3                                                                               (794 633)
Transfer to designated account of AKWS PCG in UZS     14                             (24 486)
Erroneous transfer to designated account of SWS PCG in UZS  7                         (24 992)
Bank charges                                                                            (233)
Total payments                                                                     (2 234 343)
Closing balance as at December 31, 2017                                             2637210
Openning balance as at January 1, 2018                                              2637210
RECEIPTS:
Refund of erroneously transferred amount from designated  6                           24992
account of SWS PCG in UZS
Transfer from designated account of AF BSSP in UZS     7                                1 400
Sub-total                                                                             26392
Total cash available                                                                2 663 602
PAYMENTS:
Transfer to designated account of AKWS PCG in UZS     14                             (187 961)
Incremental operating costs of PCG                     7                                (415)
Refund of erroneously transferred amount to designated account                          (200)
of SWS PCG in UZS
Total payments                                                                       (188 576)
Closing balance as at December 31, 2018               11                            2475026
21


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
12. DESIGNATED ACCOUNT IN USD - PCG (CONTINUED)
During 2017, the PCG transfers cash to designated account of BVK for the purpose of financing the following
counterparties:
in US dollars  Source of  Benificiary For counterparty           Category      Anmount
financing
AKWSP/0054   IDA        BVK       OBI HAYOT ENGINEERING LLC      1-Works      (170 009)
AKWSP/0053    IDA       SVK       GIJDUVON ZAMONA QURILISH       1-Works       (18 645)
AKWSP/0057    IDA       BVK       GIJDUVON ZAMONA QURILISH       1-Works       (57 674)
AKWSP/0058    IDA       BVK       OBI HAYOT ENGINEERING LLC      1-Works      (262 701)
AKWSP/0064   IDA        BVK       GIJDUVON ZAMONA QURILISH       1-Works       (46 860)
AKWSP/0067   IDA        BVK       GIJDUVON ZAMONA QURILISH       1-Works       (45 109)
AKWSP/0066    IDA       BVK       JV KOGON REMSTROYKOMPLEKT      1-Works       (66 751)
AKWSP/0071    IDA       BVK       MESMER EAST LLC                1-Works      (126 883)
Total                                                                          (794633)
13. DESIGNATED ACCOUNT IN EURO - PCG
Ac-count No                                                         20210978804262646001
Depositary Bank                                                    JSCB "HAMKORBANK"
Address                                                              Tashkent, Uzbekistan
Source of financing                                                  IDA loan No.5189-UZI
Openning balance as at January 1, 2017        11                 -                 -
12             1168948          1390000
Transfer from designated account of AKWS PCG in USD
Sub-total                                                   1168948           1 390000
Total cash available                                        1168948           1 390000
PAYMENTS:
Works                                                      (1168 948)        (1 390 000)
Total payments                                             (1 168 948)       (1 390 000)
Closing balance as at December 31, 2017        1-
22


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
14. DESIGNATED ACCOUNT IN UZS - PCG
In the following tables shown transactions made by the Designated Accounts in UZS - PCG.
Account No                                                             2262600104262640001
Depositary Bank                                                        JSCB "HAMKORBANK"
Address                                                                Tashkent, Uzbekistan,
Source of financing                                                     IDA loan No.5189-UZi
Notes   In thousands of UZS      In US dollars
Openning balance as at January 1, 2017          li                  -                  -
RECEIPTS:
12              160625               24486
Transfer from designated account of AKWS PCG in USD
Erroneous transfer from designated account of SWS PCG  7          1 612                200
in USD
Sub-total                                                       162 238             24686
Total cash available                                            162238              24686
PAYMFNTS-
Tiaiisfei to designated account of BVK in UZS                   (118365)           (14931)
Incremental operating costs of PCG                               (32 396)           (7 653)
Tiaiisrei lu speial pui pose account of euu in uz.b              (11 3/3)           (2 090)
Total payments                                                  (162 134)          (24 673)
Closing balance as at December 31, 2017                             103                13
Oeenning balance as at January 1, 2018                              103                13
RECEIPTS:
12             1 544649             187961
Transfer from designated account of AKWS PCG in USD
Transfer of remaining balance from secondary account of               4                0,45
AKWS PCG in UZS
Total cash available                                           1 544 756           187974
PAYMENTS:
Transfer to designated account of BVK in UZS                   (1 171231)         (141 719)
Incremental operating costs of PCG                              (369 316)          (45 728)
Bank charges                                                      (4209)              (527)
Total payments                                                (1 544756)          (187974)
Closing balance as at Deces bui 31, 2018        11
23


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
14. DESIGNATED ACCOUNT IN UZS - PCG (CONTINUED)
During 2018 and 2017, the PCG paid cash through the Designated Account of BVK for the purpose of
financing the following counterparties:
Year    Source of Benificiary For counterparty           Category      In US  In thousands
financing                                                      dollars     Of UZS
2018    IDA        BVK       Gijduvon Zamona Qurilish LLC  1-Works     (50 482)   (419 915)
2018    IDA        BVK       -lF1 CaKiMHaftHy A0aen       2-Goods       (1 429)    (11 468)
2018    IDA        BVK       Li1 Delfin Plus              2-Goods      (24 317)   (197 105)
2018    IDA        BVK       000 ToHr Cyi Kypwnmw        2-Goods       (48 808)   (406 810)
2018    IDA        BVK       JSCB Hamkorbank              3-Services  (16 580)    (135 046)
Sub-total                                                            (141 615)  (1 170 344)
2017    IDA        BVK       Cranes and Special Trucks LTD  2-Goods    (14 263)   (115679)
2017    IDA        BVK       Bank charges                 3-Services     (667)      (2 686)
Sub-total                                                             (14931)     (118365)
Total                                                                 (156 546)  (1 288 709)
Account*N 226220000904262646002
Depositary Bank                                                        JSWB "HAMKRHUANK"'
Address                                                                 Tavhkeiit, UzWuki.%t#6
Source of financing                                                      IDA loan No0.5189-UtL
Currency                                    Notes     In thousands of UZS      In US dollars
Balance as at January 1, 2018                 11                      4                  1
Payments:
Transfer to designated account of AKWS PCG in UZS                     4                  1
Total payments                                                        4                  1
Balance as at December 31, 2018               11-                                        -
24


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
15. CONVERSION ACCOUNT IN UZS - BVK
In the following tables shown transactions made during 2017 and 2018 by the Conversion account in UZS -
BVK.
Account No                                                            29801000000309412001
Depositary Bank JSCB "HAMKORBANK"
Address -Bukhara, Uzbekistan
Source of financing                                    Government of Uzbekistan (Co-financing)
Notes   In thousands of UZS      In US dollars
Openning balance as at January 1, 2017
RECEIPTS:
Replenishment from the Treasury account                        6035190            1 586390
Sub-total                                                      6035 190           1 586 390
Total cash available                                           6 035 190          1 586 390
PAYMENTS:
Transfer to the bank account                                   (3 012 693)        (868 517)
Nn. 2080 1000 0003 0011 2803
Transfer to the bank account                                   (3 022 497)        (373 511)
No. 2261 3000 9003 0941 2001
Total payments                                                (6035190)           1 242 027)
Effect of changes in foreign exchange rates on cash, net
- (344 362)
Closing balance as at December 31, 2017                                                -
Account No                                                            29801000900309412803
Depositary Bank                                                        JSCB "HAMKORBANK",
Address                                                                  Bukhara, Uzbekistan!
Source of financing                                    Government of Uzbekistan (Co-financing)
Notes   In thousands of UZS      In US dollars
Openning balance as at January 1, 2017          11              286440              88640
RECEIPTS:
Transfer from the bank account                                 3012693             868517
No. 2980 1000 0003 0941 2001
Total cash available                                           3299133             957157
PAYMENTS:
Transfer to the bank account                                   (3 030 857)        (374 544)
No. 2261 3000 9003 0941 2002
Goods                                                           (268 276)          (66 000)
Total payments                                                (3 299 133)         (440 544)
Effect of changes in foreign exchange rates on cash, net            -              (516 613)
Closing balance as at December 31, 2017         11                                     -
~25


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
16. DESIGNATED ACCOUNT IN UZS - BVK
In the following tables shown transactions made during 2017 and 2018 by designated accounts in UZS - BVK.
AcutNo                                                            226130009003094i 100
Depositary Bank JSCB "HAMKORBANK
Address Bukhara, Uzbekis,tan
Source of financing Government of Uzbekistan (Co-financing
Notes   In thousands of UZS      In US dollars
Openning balance as at January 1, 2017 --
RECEIPTS:
Transfer from the bank account 3 030 857 374 544
No. 2980 1000 9003 0941 2803
Total cash available 3 030 857 374 544
PAYMENTS:
Transfer to the bank account                                 (3 030 857)         (374 544)
No. 2261 3000 9003 0941 2001
Total payments (3 030 857) (374 544)
Effect of changes in foreign exchange rates on cash, net           -
Closing balance as at December 31, 2017--
26


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
16. DESIGNATED ACCOUNT IN UZS - BVK (CONTINUED)
In the following tables shown transactions made durin 2017 and 2018 by desi ated accounts in UZS - BVK.
AcutNo                                                              22613000900309412001
Depositary Bank JSCB "HAMKORBANK"1
Address                                                                   Bukhara, Uzbekistan
Source of financing                                      Government of Uzbekistan (Co-financing)
Notes   in thousands of UZS      In US dollars
Openning balance as at January 1, 2017                               -                  -
RECEIPTS:
Replenishment from the Treasury account                         7 635 580           945 005
Transfer from the bank account                                  3022497             373511
No. 2980 1000 0003 0941 2001
Transfer from the bank account                                  3 030 857           374 544
No. 2261 3000 9003 0941 2002
Transfer from the bank account                                  6403502             792664
No. 2262 6000 0003 0941 2009
Total cash available                                           20 092 437          2 485 724
PAYMENTS:
Works                                                         (13 504 599)        (1 872272)
Trannfor to the bank annount                                   (6 492 791)          (798742)
No  VAi.  fif 11 I  I 31E i 1 N41 VIiN
Basik uayws                                                    (135040)           (10723)
Tntni pnymrnt                                                (:- 0fl? A37)         47 737
Fffpc.t of change in forpion xrhange rate9 on cah nPt                             2 013
Closing balance as at December 31, 2017
OpennIng balance as at January 1, 2018
RECEIPTS:
Replenishment from the Treasury account                         4326 167            535638
Transfer from the bank account                                   591 989             73 760
No. 2262 6000 2003 0941 2005
Transfer to the bank account                                     184 347             22 582
No. 2262 6000 0003 0941 2009
Transfer to the bank account                                      18164               2263
No. 2262 6000 7003 0941 2002
Total cash available                                            5120667             634244
PAYMENTS:
Works                                                          (4 284 536)          (532 569)
Transfer to the bank account                                     (591 989)           (73 760)
No. 2262 6000 2003 0941 2005
Transfer to the bank account                                     (184347)           (22582)
No. 2262 6000 0003 0941 2009
Transfer to the bank account                                      (28 502)           (3 570)
No. 2262 6000 7003 0941 2002
Bank charges                                                      (24 598)           (3 055)
Transfer to the bank account                                      (6 695)              (834)
No. 2262 6000 5003 0941 2001
Total  yments                                                  (5 120 667)          (635 536)
Effect of changes in foreign exchange rates on cash, net             -2 127
Closing balance as at December 31, 2018
27


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
16. DESIGNATED ACCOUNT IN UZS - BVK (CONTINUED)
In the following tables shown transactions made during 2017 and 2018 by designated accounts in UZS - BVK
Account No                                                             22626000000309412009
Depositary Bank JSCB "HAMKORBANK"
Address Bukhara, U bekista
Source of financing                                     Government of Uzbekistan (Co-financing
Notes   In thousands of UZS      In US dollars
Openning balance as at January 1, 2017          11                   --
RECEIPTS:
Transfer from the bank account                                  6452791             798742
No. 2261 3000 9003 0941 2001
Transfer from designated account in UZS - PCG (source            118 365             14 923
of IDA)
Total cash available                                            6571 157            813666
PAYMENTS:
Transfer to the bank account                                   (6 403 502)         (792 664)
No. 2201 3000 9003 0941 2001
Goods                                                            (114519)           (14120)
Bank charges                                                      (3 835)              (802)
Total payments                                                 (6 521 856)         (807 586)
Effect of changes in foreign exchange rates on cash, net             -                   (8)
Closing balance as at December 31, 2017          11               49 289              6 070
(Co-financing)
Closing balance as at becember 31, 2017 (1A)                          12                 1
Openning balance as at January 1, 2018           11               49301               6 071
RECEIPTS:
Transfer from designated account in UZS - PCG (source           1 171 231           141 684
of IDA)
Transfer from the bank account                                   184347              22582
No. 2261 3000 9003 0941 2001
Refunds                                                            2 558               308
Total cash available                                            1 358136            164574
PAYMENTS:
Goods                                                            (922362)          (111484)
Transfer to the bank account                                     (184 347)          (22 582)
No. 2261 3000 9003 0941 2001
Works                                                            (182 520)          (22 358)
Bank charges                                                      (6944)               (845)
Total payments                                                 (1 296 173)          (157 270)
Effect of changes in foreign exchange rates on cash, net                               (33)
Closing balance as at December 31, 2018                              -
(Co-financing)
Closing balance as at December 31, 2018 (IDA)    11              111 265             13342
* The closing balance on this account includes only the funds from the sources of IDA transferred from
designated account of PCG in UZS.
28


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZMAT" AGENCY'S WORLD BANK PROJECTS COORDINATION GROUP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
16. DESIGNATED ACCOUNT IN UZS - BVK (CONTINUED)
In the following tables shown transactions made during 2017 and 2018 by designated accounts in UZS - BVK.
Depositary Bank JSCB3 "HAMKORBANK
Address Bukhara, Uzbekistan
Source of financing Government of Uzbekistan (Co-financing
Notes  In thousands of UZS      In US dollars
Openning balance as at January 1, 2018                             -                 -
RECEIPTS:
Transfer from the bank account                                   6695                834
No. 2262 6000 5003 0941 2001
Total cash available                                             6 695               834
PAYMENTS:                                                          -                 -
Total payments                                                                       -
Effect of changes in foreign exchange rates on cash, net           -                 (31)
Closing balance as at December 31, 2018                          6 695               803
Account No                                                          2262600070030941200
U606wary Ham                                                         JSCB "HAMVIU1ANK"
Address                                                                 Bukhara, Uzbekistal,
Source of financing                                  Government of Uzbekistan (Co-financing)
Notes  In thousands of UZS      In US dollars
Openning balance as at January 1, 2018                             -                 -
RECEIPTS:
Transfer from the bank account                                  24 598              3 570
No. 2262 6000 5003 0941 2001
Total cash available                                            24 598              3 570
PAYMENTS:
Transfer to the bank account                                    (18164)            (2263)
No :?7R1 0nnn nni 041 2001
Total payments                                                 (18 164)            (2 263)
Effect of changes in foreign exchange rates on cash, net           -                 (67)
Closing balance as at December 31, 2018                          64U4                40
29


ALAT AND KARAKUL WATER SUPPLY PROJECT (IDA LOAN 5189-UZ)
"KOMMUNKHIZ VAT" AGENCY'S WORLD BANK PROJECTS COORDINAT1C GROUP
NOTES TO FINANCIAL STATEMEN7S
FOR THE YEAR ENDED DECEMBER 31, 2018
16. DESIGNATED ACCOUNT IN UZS - BVK (CONTINUED)
During 2017 a-l 2018 the BVK transfer cash to the following courxparties through Designated Account in UZS - BVK by the source of Co-financing of
Uzbekis Lan:
Year Source of financing           Benificiary                                 Category                    In US dollars       In tofUsad
2018 Co-finan=ing the Uzbekistan  CHINA PETROLIUM PIPELINE EU:;EAU             1-Works                             (264 435)     (2 132666)
2018 CD-finan=ing the Uzbekistan  SUNIR CO. & SHAFAB ENGINEERING               1-Works                             (189339)      (1 526828)
2018 Co-finan:ig the Uzbekistan  JV KOGON REMSTROYKOMPLE.                    1-Works                              (22 358)      (182 520)
2018 Co-finan:ig the Uzbekistan  CHINA PETROLIUM PIPELINE EUB:EAU             1-Works                              (75 194)      (596 136)
2018 Co-finan=ing the Uzbekistan  JV KOGON REMSTROYKOMPLEr-                    1-Works                               (3602)        (28 907)
S Lib-totd                                                                                                    (554 927)     (4467 056)
2017 Co-finan:ig the Uzbekistan   SUNIR CO. & SHAFAB ENGINEERING               1-Works                             (503996)      (4 079 848)
2017 Co-finan:ing the Uzbekistan  JV KOGON REMSTROYKOMPLEirn                   1-Works                             (400 333)     (3 224 283)
2017 CD-finan:ig the Uzbekistan   MESMER EAST LLC                              1-Works                             (320 987)     (2 585 229)
2017 Co-finan:ig the Uzbekistan  CHINA PETROLIUM PIPELINE EJ:EAU             1-Works                             (264 435)     (2 144 301)
2017 Co-finan:ig the Uzbekistan  MESMER EAST LLC                              1-Works                             (182 521)     (1 470 938)
2017 Co-finan:ing the Uzbekistan  TONG SUV QURILISH                            2-Goods                              (66 000)      (268 276)
Sub-totai (1 738 272) (13 772 875)
Total                                                                                                       (2293199)      118 239 931)
30