NIDWLE EAST NORTW l

Financial Statements of Projects Funded By the International BankFor Reconstruction and Development - Grant #TF017510(Municipal Services Emergency Project)

And Auditor's Report

Council for Development and ReconstructionYear Ended December 31, 2015

TIF: +961 1 346659 1 M: +961 3 493176 1 P.O. Box: 13-5653 Beirut - LebanonE: info@menaf.com I W: www.menaf.com

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Contents

Page

Independent Auditor's Report 3

Statement of Special Account of Projects Funded by the International Bank For Reconstruction 4and Development - Grant #TF017510 (Municipal Services Emergency Project)

Statement of Project Expendirures of Projcts Funded by the Internatonal Bank For 5Reconstruction and Development -Grant#' F017510 (Municipal Services Emergency Project,

Statement of Expenditures of Projects Funded by the International Bank For Reconstruction 6and Development -Grant#TF017510 (Municipal Services Emergency Project)

Notes to the Financial Statements./ Project I xpenditures 7.8

IIDILE EAST NORTI A F a

INDEPENDENT AUDITOR'S REPORT

PresidentCouncil for Development and ReconstructionWorld Bank Grant No.TF017510Municipal Services Emergency ProjectBeirut, Lebanon

We have audited the accompanying financial statements comprising of the statement of Special Account,Project Expenditures, and Statement of Expenditures of Project Funded by the International Bank forReconstruction & Development, Grant #TF017510 for the year ending and cumulatively as at December31, 2015. The Project financial statements are the responsibility of the Council for Development andReconstruction's management. Our responsibilitA is to express an opinion on these financial statementsbased on our audit.

We have also audited compliance with the laws, regulations, guidelines and provisions governed by theGrant Agreement for the year ended December 31, 2015.

We conducted our audits in accordance with International Standards on Auditing. Those Standardsrequire that we plan and perform the audits to obtain reasonable assurance about whether the financialstatements are free of material misstatement and about whether the "Municipal Services EmergencyProject" has complied with the laws, regulations, guidelines and provisions governed by the GrantAgreement. An audit includes examining, on a rest basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing the accounting principles used, aswell as evaluating the overall financial statement presentation. We believe that our audits provide areasonable basis for our opinion.

In our opinion:

(a) The accompanying Financial Statements present fairly, in all material respects, the cash receipts andpayments of the Municipal Services Emergency Project for the year ending December 31, 2015 andshowing cumulative balances as at December 31, 2015 in accordance with the International PublicSector Accounting Standards(I PSAS), under the cash basis of accounting,

(b) Internal control over financial reporting involved in the preparaton of replenishments, directpayments, payments through special commitments, and reimbursements i.e. expenditures reimbursedon the basis ofStatements of Expenditures can be rehed upon to support the related withdrawals as ofDecember 31, 2015;

(c) The project was in all material respects in compliance with the laws, regulations, guidelines andprovisions governed by the Grant agreement.

July 4, 2016r MENAF

Jihad AnoutiManaging Partner

T/F: +961 1 346659 I M: +961 3 493176 I P.O. Box: 13-5653 Beirut - LebanonE: info®@menaf.com I W: www.menaf.com

Council for Development and ReconstructionMunicipal Services Emergency Project - Grant TFOO510Financial Statements31 December 2015

Statement of Special Account (TF017510)

Note USD

Balance as ofJanuary 1, 2015

Add:World Bank replenishments 1,500,000

Ded.uct:Difference in Foreign Exchange (6,440)

Payments for project expenditures funded by the Grant:

Works 3 (401,427)

Goods & Equipment 3 (157,020)

Consultant's Services 3

(558,447)

Balance December 31, 2015 935,113

See accompanying notes to the financial statements.

Council for Development and ReconstructionMunicipalcnices Emergency Project - Granr TFOI510Financial Statements31 December 2015

Statement of Project Expenditures

Note USD

Works 3 401,427Goods & Equipment 3 283,620Consultants' services and training 3

685,047

See accompanying notes to the financial statements.

Council for Development and Reconstruer1mnMunicipal Services Emergency Project - Grant TF017510Financial Statements31 December 2015

ri

Statement of Expenditures

No wuhdrawals against the staement of expenditures were made during 2015.

Council for Development and ReconstructionMunicipal Services Emergency Project - Grant TFOI7510Financial Statements31 December 2015

Notes to the Financial Statements

1. Project Background

A Grant #TF017510 (Municipal Services Emergency Project) for the amount of USD 10,000,000 wassigned on September 12, 2014 between the international Bank for Reconstruction and Development andthe Lebanese Republic (the borrower) to address urgent community priorities in selected municipalservices, targetig areas most affected by the influx of Syrian refugees. The project consists of thefollowing parts;

Part 1: Emergency Response: Supporting high priority municipal services and initiatives that promotesocial interaction and collaboration in the Participating Unions, including-

a- Service Delivery: Carrying out sub-projects to improve service delivery in the ParticipatingUnions, including inter alia, in the areas of water supply and wastewater, solid wastemanagement, roads improvement, and recreational facilities and community centers.

b. Community Activities: Enhancing social cohesion by facilitating interaction andcollaboration among local communities and refugees, including, inter alia, establishment ofsport teams/leagues, study groups or courses, play groups, skills exchange, organization ofawareness campaigns and collective action.

Part II: Rehabilitation of Critical Infrastructure: Carrying out sub-projects to rehabilitate and/or developcritical infrastructure to increase self-reliance of communities, including inter aba; water supply, solidwaste management, roads improvement, water and sanitation, recreational facilities and communityinfrastructure.

Part 1I: Project Implementation Support: Strengthening the capacity of the PMU in the management ofthe project, including coordination, reporting, financial management, procurement, social andenvironmental safeguards; and supporting activities conductive to the decentralized decision making andconsultative processes for sub-project identification.

The table below sets forth categories of items to be Financed out of the proceeds of the grant underCDR's management (USD 10,000,000) and the allocation of the amounts of the grant to each category;

Category USD

Works, Goods and non-consulting Consultants' service and training services,Consultants' services and training and incremental operating Costs 10,000,000Front-end Fee .

10,000,000

The closing date for this grant is December 30, 2017.

Council for Development and ReconstrucrionMunicipal Services Emergency Project - Grant'l FOI -510Financial Statements31 December 2015

2. Summary of Significant Accounting Policies

The accompanying statement of special account, project expenditures and statement of expenditures areprepared on the cash basis of accounting. On this basis, disbursements from grant are recognized whenreceived and expenses are recognized when paid rather than when incurred.

3. Details of Expenditures

Expenditures paid from Municipal Services Emergency ProectSpecial account and direct payments paidduring the year 2015 are detailed as follows:

Amount financedfrom grant

Contractor's Name Description proceeds (100%)

WorksHammoud Est for Trading Emergency works in jabal el sheikh, calaat eland Contracting istiklal, al sahel and al buhavra 212,422Al Bonyan Co. for Eng and Imp of Civil works in geog areas of unions MunCont of Baalbeck, Central Bekaa and zablecaza 189,005Amount paid from special account 401,427Total Works 401,427

GoodsSupply of 5 backhoe loaders, 15 slud steer and 1

Someco International S.A.L Agr Tractor 111,300Bassoui&Heneine Supply of 4 utility Panel Vehicle 45,720Amount paid from special account 157,020

Supply of i backboe loaders, 15 skid steer and 1Someco International S.A.L Agr Tractor - Direct Payment 126,600Direct Payment 126,600Total Goods 283,620Total 685,047

4. S.O.E Withdrawals During the Year 2015

No withdrawals against the statement of expenditures were made during 2015