moldova 27125) project financial statements ida gef...

MOLDOVA AGRICULTURAL COMPETITIVENESS PROJECT(P118518 and P1 27125)

PROJECT FINANCIAL STATEMENTS

IDA Credit 5095-MDGEF TF012145SIDA TF014946

IDA Credit 5639-MD

FOR THE YEAR ENDED31 DECEMBER 2015

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CONTENTS: PAGE:

INDEPENDENT AUDITOR'S REPORT 1-2

STATEMENT OF FINANCIAL POSITION 3

SUMMARY OF SOURCES AND USES OF FUNDS 4-5

STATEMENT OF DESIGNATED ACCOUNTS 6-11

NOTES TO THE PROJECT FINANCIAL STATEMENTS 12-29

Deloitte & Touche SRLBd. $tefan cel Mare. 65,Deloitte. Office 300Chi inhu, MD-2001Moldova

Tel: + 373 222 70310Fax: + 373 222 70311www.deloitte.md

To the Management ofMoldova Agricultural Competitiveness ProjectChisinau, Republic of Moldova

INDEPENDENT AUDITORS' REPORT

1. We have audited the accompanying financial statements of the Moldova AgriculturalCompetitiveness Project (the "Project"), which comprise the balance sheet as at 31 December2015, the summary of sources and uses of funds and the statements of designated accountsfor the year ended 31 December 2015, and a summary of significant accounting policies andother explanatory notes.

2. The financial statements have been prepared on a basis of cash accounting according towhich income and expenditures are recognized when cash is actually received or paid outrather than incurred.

Management's Responsibility for the Financial Statements

3. Management is responsible for the preparation of these financial statements in accordancewith the requirements of the financing agreement International Development Association("IDA") Credit no. 5095-MD signed between the Republic of Moldova and InternationalDevelopment Association dated 28 May 2012, grant agreement TF012145 signed betweenRepublic of Moldova and Global Environmental Facility ("GEF") dated 28 May 2012, grantagreement TF014946 signed between Republic of Moldova and Swedish InternationalDevelopment Cooperation Agency ("SIDA") dated 15 November 2013 and financingagreement International Development Association ("IDA") Credit no. 5639-MD signedbetween the Republic of Moldova and International Development Association dated 21 May2015, and for such internal control as management determines is necessary to enable thepreparation of financial statements that are free from material misstatement, whether due tofraud or error.

Auditor's Responsibility

4. Our responsibility is to express an opinion on these financial statements based on our audit.We conducted our audit in accordance with International Standards on Auditing. Thosestandards require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance whether the financial statements are free from materialmisstatement.

5. An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, the auditorconsiders internal control relevant to the entity's preparation and fair presentation of thefinancial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of theentity's internal control. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of accounting estimates made by management, as wellas evaluating the overall presentation of the financial statement.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited byguarantee, and its network of member firms, each of which is a legally separate and independententity. Please see www.deloitte/md/com/about for a detailed description of the legal structure ofDeloitte Touche Tohmatsu Limited and its member firms

6. We believe that the audit evidence we have obtained is sufficient and appropriate to providea basis for our qualified audit opinion.

Basis for Qualified Opinion

7. The expenses for the year ended 31 December 2015 in amount of USD 97,247 financed underthe provision of IDA Credit 5639-MD and as described in note 7, the amount of USD 334,305for the year ended 31 December 2014 financed under the provision of IDA Credit 5095-MDare not eligible for financing under the provisions of these financing agreements. Since ouraudit work was carried out on a sample basis and the Project expenses do not represent ahomogenous population, we were unable to quantify the total amount of expenses for the yearended 31 December 2015 and respectively the cumulative Project expenses as at 31December 2015 that might not be eligible for financing.

Qualified Opinion

8. In our opinion, except for the possible effects of the matter described in the Basis for QualifiedOpinion paragraph, the financial statements of the Project, present fairly, in all materialrespects, the financial position as at 31 December 2015, the funds received anddisbursements made during the year ended 31 December 2015, in accordance with therequirements of cash accounting and the financing agreements referred to in the paragraph3.

9. In addition, our tests indicate based on sample selected that, except for the effects of thematter described in the Basis for Qualified Opinion paragraph, adequate documentation hasbeen maintained to support (a) the expenditures incurred during the year ended 31 December2015; and (b) that such expenditures are eligible for financing under the applicable financingagreements referred to in the paragraph 3.

Usage of Report

10. The financial statements are prepared to assist the Moldova Agricultural CompetitivenessProject to comply with the financial reporting provisions of the financing agreements referredto in paragraph 3. As a result, the financial statements may not be suitable for anotherpurpose.

he&, -d SL

Deloitte & Touche S.R.L.Chisinau, Moldova20 June 2016

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited byguarantee, and i networh of member firma, aorh of which is a legally separate and independententity Please see www.deloitte.com/md/about for a detailed description of the legal structure ofDeloitte Touche Tohmatsu Limited and its member firms

MOLDOVA AGRICULTURAL COMPETITIVENESS PROJECTBALANCE SHEET

AS AT 31 DECEMBER 2015(all amounts are expressed in USD, unless otherwise mentioned)

December 31, December 31,Notes 2015 2014

ASSETS

Cash and cash equivalentsDesignated account IDA 5095-MD 132,195 175,005Designated account GEF TF012145 707,804 94,310Designated account SIDA TF014946 73,887 168,762Designated account IDA 5639-MD 958,994 -

Total cash and cash equivalents 1,872,880 438,077

Undisbursed balanceUndisbursed balance IDA 5095-MD 4,775,920 13,414,672Undisbursed balance GEF TF012145 546,349 2,343,398Undisbursed balance SIDA TF014946 469,177 2,180,976Undisbursed balance IDA 5639-MD 4,255,049 -

Total undisbursed balance 10,046,495 17,939,046

Cumulative project expensesSpent IDA 5095-MD 4, 5 11,522,897 3,359,698Spent GEF TF012145 4, 5 3,181,347 1,997,792Spent SIDA TF014946 4,5 1,724,154 92,059Spent IDA 5639-MD 4, 5 6,895,993 -

Total cumulative project expenses 23, 324,391 5,449,549

TOTAL ASSETS 35,243,766 23,826,672

FUNDS AND LIABILITIES

FundingFinancing agreement IDA 5095-MD 16,431,012 16,949,375Grant agreement GEF TF012145 4,435,500 4,435,500

Grant agreement SIDA TF014946 2,267,217 2,441,797Financing agreement IDA 5639-MD 12,110,037 -

Total funds 35,243,766 23,826,672

TOTAL FUNDS AND LIABILITIES 35,243,766 23,826,672

The financial statements attached were signed and approved on behalf of the Project'smanagement on 20 June 2011-b$

Liviu Gumovschi, / Marina Botnaru,Executive Director Chief Accountant

3

MOLDOVA AGRICULTURAL COMPETITIVENESS PROJECTSUMMARY OF SOURCES AND USES OF FUNDS

FOR THE YEAR ENDED 31 DECEMBER 2015(all amounts are expressed in USD, unless otherwise mentioned)

For the yearended

31 December CumulativeNotes 2015 to date

Opening cash balancesCAPMU Designated AccountsDesignated account IDA 5095-MD 175,005Designated account GEF TF012145 94,310Designated account SIDA TF01 4946 168,762Designated account IDA 5639-MD -A/PA Designated AccountsDesignated account GEF TF012145Designated account IDA 5639-MD - -

Total opening cash balances 438,077 -

Add: Sources of fundsCAPMUIDA Credit 5095-MD 3 2,804,802 5,607,424GEF Grant TF012145 3 260,435 2,352,537SIDA Grant TF014946 3 1,537,219 1,798,040IDA Credit 5639-MD 3 381,844 381,844A/PAIDA Credit 5095-MD 3 5,315,587 6,047,668GEF Grant TF01 2145 3 1,536,614 1,536,614IDA Credit 5639-MD 3 4,609,778 4,609,778Retroactive financing IDA Credit 5639-MD 3 2,863,366 2,863,366

Total Sources of Funds 19,309,645 25,197,271

Less: Uses of FundsIDA Credit 5095-MD

(1) Goods, works, non-consulting services,consultants' services, training and operatingcosts for the project 4, 5 2,847,612 5,475,229(2) Matching Investments Grants for Sub-Projects under Part B.2 and C.2 4, 5 5,315,587 6,047,668

Total: 8,163,199 11,522,897

GEF Grant TF012145(1) Goods, non-consulting services,consultants' services, training andoperational costs under Parts A.1 (iii), C andD of the Project 4, 5 297,034 2,294,826(2) Matching Investments Grants for Sub-Projects under Part C.2 4, 5 886,521 886,521

Total: 1,183,555 3,181,347

SIDA Grant TF014946(1) Goods, works, consultants' services,training and operating costs 4, 5 1,632,095 1,724,154

Total: 1,632,095 1,724,154

4

MOLDOVA AGRICULTURAL COMPETITIVENESS PROJECTSUMMARY OF SOURCES AND USES OF FUNDS


(continued)IDA Credit 5639-MD

(1) Goods, non-consulting services,consultants' services (including Projectaudits), Training and Operational Costsunder Part D of the Project 4, 5 313,006 313,006(2) Compensatory sales support grantsunder Part E of the Project 4, 5 3,719,452 3,719,452(3) Exchange rate differences 169 169(4) Retroactive financing through Ministry ofFinance 6 2,863,366 2,863,366

Total 6,895,993 6,895,993

TOTAL USES OF FUNDS 17,874,842 23,324,391

Closing cash balancesCAMPU Designated AccountsDesignated account IDA 5095-MD 132,195 132,195Designated account GEF TF012145 57,711 57,711Designated account SIDA TF014946 73,887 73,887Designated account IDA 5639-MD 68,837 68,837AIPA Designated AccountsDesignated account GEF TF012145 650,093 650,093Designated account IDA 5639-MD 890,157 890,157

TOTAL CLOSING CASH BALANCES 1,872,880 1,872,880

The financial statements attached were signed and approved on behalf of the Project'smanagement o 20 June 2016 by:

Liviu Gumovschi, Marina Botnaru,Executive Director Chief Accountant

IN 5

5

MOLDOVA AGRICULTURAL COMPETITIVENESS PROJECTDESIGNATED ACCOUNT STATEMENT


For the year ended: 31 December 2015Account no.: 2272240184021Depository Bank: Ministry of Finance - State TreasurySWIFT code: TREZMD2X

Source IDA 5095-MD

For the year endedNotes 31 December 2015

Opening balance - 01 January 2015 175,005

Add:Sources of funds (excluding direct 3

payments) 313,565

Deduct:Uses of funds 356,375

Closing balance - 31 December 2015 132,195

The financial statements attached were signed and approved on behalf of the Project'smanagement on 20 June 2016 by:

Liviu Gumovschi, > K>Marina Botnaru,Executive Director a Chief Accountant

6



For the period ended 31 December 2015Account No. 227130184018Depository Bank Ministry of Finance - State TreasurySWIFT code TREZMD2X

Source GEF TF012145



Add:Sources of funds (excluding direct 3payments) 80,690





7




Source SIDA TF014946 MD







Liviu Gumovschi, C Marina Botnaru,Executive Director Chief Accountant

8




Source IDA 5639-MD


Opening balance - 01 January 2015 -






9


FOR THE YEAR ENDED 31 DECEMBER 2015

(all amounts are expressed in USD, unless otherwise mentioned)


Source GEF TF01 2145 (AIPA)



Add:Sources of funds (excluding direct 3payments) 1,536,614





N0

10




Source IDA 5639-MD (AIPA)



Add:Sources of funds (excluding direct 3payments) 4,609,778

Deduct:Uses of funds 3,719,453Exange rate differences 169




Nn 0

MOLDOVA AGRICULTURAL COMPETITIVENESS PROJECTNOTES TO THE FINANCIAL STATEMENTS


GENERAL INFORMATION

Project description

The Agricultural Competitiveness Project is regulated by the: (i) Financing Agreement 5095-MDbetween International Development Association and Government of Moldova in amount of SDR11.6 mln, signed on May 28, 2012, (ii) Grant Agreement TF012145 between Global EnvironmentFacility and Government of Moldova in amount of USD 4.4 mln, signed on May 28, 2012, bothdeclared effective on September 20, 2012, (iii) Grant Agreement TF014946 between SwedishInternational Development Cooperation Agency and Republic of Moldova in the amount of SEK18.8 mln., signed on November 15, 2013, declared effective on the same day and (iv) FinancingAgreement 5639-MD signed between the Republic of Moldova and International DevelopmentAssociation in amount of SDR 8.7 mln., signed on May 21, 2015 and declared effective on July07, 2015.

The objective of the Project is to enhance the competitiveness of the country's agro-food sectorby supporting the modernization of the food safety management system; facilitating marketaccess for farmers; and mainstreaming agro-environmental and sustainable land managementpractices.

The Project consists of the following parts:

Part A: Enhancing food safety management

Provision of goods, works and consultants' services, including training for:

A.1 Providing regulatory and institutional support to the Receipient for enhancing the food safetymanagement system through:

(i) supporting the process of legislative harmonization of the national legislation with therelevant EU regulations;

(ii) strengthening the institutional capacity of MAFI and the Food Safety Agency (FSA) through:(a) staff training; and (b) support for increasing awareness of relevant private entitiesregarding the application of the new food safety legislation; and

(iii) developing methodological and analytical work for soil quality and land degradation risk-assessment, land quality certification and standard setting to ensure that best soilmanagement practices are integrated in the policy and regulatory framework for food safetymanagement.

A.2 Providing technical enhancement support to the Receipient for the food safety managementthrough:

(i) Rehabilitation of the designated building facility for the FSA; procurement of office,communication and computing equipment for the building; and design of an integratedsystem for the interoperability of various FSA divisions; and

(ii) Strengthening of animal and plant health and food safety laboratory network and BorderInspection Points (BIPs) through:

(a) Rehabilitation of two central reference laboratories for: (i) animal health and foodsafety for products of animal origin, and (ii) food safety for products of vegetableorigin; and

12



(b) Rehabilitation of four BIPs, namely: on the Eastern border (Tudora), on the Southernborder (Giurgiulesti); on the Northern border (Criva) and on the Western border(Leuseni).

Part B: Enhancing market access potential

Provision of goods, works, consultants services, including training to MAFI for:

B.1 Providing for a business development support for productive partnerships for primaryhorticultural producers through: (i) public information and promotion campaign; (ii)development support for identifying , setting up and providing training for new productivepartnerships; and (iii) specialized technical assistance support on an ad-hoc basis for thenewly created productive partnerships.

B.2 Set-up of an investment support for post-harvest technologies for Sub-projectson emerging productive partnerships for the modernization of post-harvest technologies in thehorticultural sector, all through competitive scheme and in accordance with the GrantOperational Manual.

Part C: Enhancing land productivity through sustainable land management

Provision of goods, works and consultants' services, including training to MOE for:

C.1 Strengthening the sustainable land management capacity building of MOE through, interalia: (i) developing a methodological work on general technical and economic options forfarm-based interventions; (ii) strengthening the farmers capacity to monitor economic andenvironment benefits; (iii) organizing awareness raising and training activities to improvefarmers' land management skills and public policy response with respect to sustainable landmanagement issues.

C.2 Providing financial support for piloting SLM for Sub-projects for farmers forfarm-level investments in soil conservation practices and technologies, all in accordance withthe Grant Operational Manual.

C.3 Providing support for rehabilitation of shelterbelts by investments in machinery for thecreation of two mobile mechanized squads for the rehabilitation of anti-erosion shelterbelts.

Part D. Project management

Provision of goods, consultants' services training and operational costs for: (a) Projectmanagement and implementation, including monitoring and evaluation and Project audits; (b) theestablishment and implementation of a grievance redress mechanism; and (c) the design andimplementation of a public information campaign to inform the potential Affected Farmers aboutCompensatory Sales Support Grants, including its eligibility criteria and application procedures.

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Part E. Compensatory Sales Support Grants

Provision of Compensatory Sales Support Grants to Affected Farmers.

The project has two implementation agencies: The Ministry of Agriculture and Food Industry shallcarry out Parts A and B and E of the Project; Ministry of Environment shall carry out Part C ofthe Project; and (iii) Part D of the Project through jointly MAFI and MOE. The two institutions relyon Component Coordinators as local consultants to manage and implement project activitieswithin their fields.

The project's grant delivery mechanism (across components) relies on MAFI's Agency forInterventions and Payments in Agriculture (AIPA) for disbursements, financial management andpartially monitoring of grant implementation. For other activities CAPMU is providing fiduciarybackstopping for all components to support enhancements of the financial managementdisbursement and procurement functions, as well as monitoring and evaluation.

Project management

World Bank

Task Team Leader - Anatol GobjilaThe World Bank, Moldova OfficeE-mail: aqoblila()worldbank.orq

Project Fiduciary Unit

Consolidated Agricultural Projects Management Unit (CAPMU)Executive Director - Liviu GumovschiTel/fax + 373 22 221 142/ +373 22 226 994E-mail: [email protected]

In accordance with the financing agreements, the Project closing date is 30 June 2017. TheProject Steering Committee is responsible for deciding on the policy and programs of CAPMU.The structure of Steering Committee for the decisions made for the year of 2015 was as follows:

1. Sula Ion - Minister of Agriculture and Food Industry, Chairman;2. Munteanu Valeriu - Minister of Environment, Co-Chairman (since July 30, 2015);

between February 18 and July 30, 2015 - Sergiu Palihovici, Minister of Environment,Co-Chairman; June 6, 2014 - February 18, 2015 - Valentina Tapis)

3. Caraus Maria - Deputy Minister of Finance;4. Calmic Octavian - Deputy Minister of Economy;5. Sturzu Ion - Deputy Governor of the National Bank of Moldova;6. Gluscenco Oxana - Main consultant in the general direction of policy coordination,

foreign assistance and public administration reform, the State Chancellery;7. Plcint5 Anatolii - member of Republican council of the Association of Fruit Producer.

14



2. SIGNIFICANT ACCOUNTING POLICIES

Basis of accounting

The Project Financial Statements have been prepared in accordance with generally acceptedaccounting principle and practices and relevant World Bank guidelines.

The cash basis of accounting was used in the preparation of these Project Financial Statementssince the recording of cash receipts and payments is the primary interest. Under the cash basis

system income (or expenditure) is recognized when cash is received (or paid) irrespective of when

goods or services are received.

The amounts are expressed in USD and financial statements are prepared for the year ended 31December 2015.

Designated account

The designated account (opened at National Bank of Moldova), is the account through which thereplenishments are drawn. All payments for eligible expenses are made from these DAs and if

the payment is in local currency it is made through transitory account.

Transitory accounts

The transitory accounts are held at State Treasury for the converted amount in MDL, since the

payments within the country can be done only in the local currency (MDL).

Exchange rates

The Exchange rate used to convert the USD amounts in MDL is the official exchange rate ofNational Bank of Moldova on the date of payment.

Direct payments

The direct payments are disbursements by the World Bank from the loan account, at the

borrower's request, directly to a third party (e.g., supplier, contractor, consultant) for eligibleexpenditures.

Sources of funds

The sources of funds are the amounts transferred by the World Bank from the loan account, to

the Designated Account of the Project.

Uses of funds

The uses of funds are the amounts spent for covering eligible expenditures for the needs of the

Project.

Matching Investment Grant

The grant made to a Beneficiary for a Sub-project under Parts B.2 or C.2 of the Project in

accordance with the requirements set forth of refferes to the Grant Operation Manual.

15



3. WITHDRAWAL SCHEDULE

3.1 IDA CREDIT 5095-MD

(1) Goods, works,non-consulting

services, (2) Matchingconsultants' Investment

services, training Grants for Sub-and operating projects under Advance to

costs for the Part B.2 and C.2 DesignatedWID Number Project of the Project Account Total

0026 15,681 - - 15,6810027 22,878 - - 22,8780028 20,114 - - 20,114

0029 119,419 - - 119,419

0030 26,402 - - 26,4020031 - - 24,995 24,9950032 45,371 - - 45,3710033 46,771 - - 46,7710034 94,853 - - 94,8530035 46,315 - - 46,3150036 54,061 - - 54,061

0037 77,593 - - 77,593

0038 - - 58,357 58,3570039 44,210 - - 44,2100040 41,935 - - 41,935

0041 - 208,731 - 208,7310042 - 231,993 - 231,9930043 - 172,781 - 172,7810044 - 350,000 - 350,0000045 - 350,000 - 350,0000046 74,322 - - 74,3220047 20,400 - - 20,400

0048 32,318 - - 32,318

0049 162,383 - - 162,383

0050 - - 100,442 100,442

0051 62,858 - - 62,8580052 71,854 - - 71,854

0053 - 79,154 - 79,154

0054 282,959 - 282,959

0055 - 183,944 - 183,944

0056 37,835 - - 37,835

0057 35,458 - - 35,4580058 71,583 - - 71,5830059 - 315,250 - 315,250

0060 - 350,000 - 350,0000061 39,586 - - 39,586

0062 62,557 - - 62,5570063 - 1,686 - 1,6860064 220,464 - - 220,464

0065 - 190,913 - 190,9130066 109,100 - 109,100

16



(continued)0067 187,496 - - 187,496

0068 - 46,165 - 46,165

0069 - 296,385 - 296,385

0070 62,878 - - 62,878

0071 54,537 - 54,537

0072 313,236 - - 313,236

0073 - 278,000 - 278,000

0074 - 129,771 129,771

0075 - 63,914 - 63,914

0076 65,456 - - 65,456

0077 39,117 - - 39,117

0078 50,391 - - 50,391

0079 120,600 - - 120,600

0080 - 291,678 - 291,678

0081 50,305 - - 50,305

0082 - 350,000 - 350,000

0083 - 350,000 - 350,000

0084 - 350,000 - 350,000

0085 - -0086 - 202,552 - 202,552

0087 - 260,382 - 260,382

Total 2,491,237 5,315,587 313,565 8,120,389

Out of which:Payments in designated account: 313,565Direct payments: 7,806,824

8,120,389

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3.2 GEF Grant TF012145

(1) Goods,non-

consultingservices,

consultants' (2)services, Matching

training and Investmentoperating Grants forcosts for Sub-

the Project projectsunder Parts under Part Advanceto

A.1 (iii), C C.2 of the Advance DesignatedWID Number and D Project Recovery Account Total

0016 30,000 - - - 30,000

0017 53,300 - - - 53,300

0018 - - - 80,690 80,690

0019 - - - 1,536,614 1,536,614

0020 56,445 - - - 56,445

0021 - - - --

0022 - 745,235 (745,235) -

0023 - - - --

0024 40,000 - - - 40,000

0025 - - - -

Total 179,745 745,235 (745,235) 1,617,304 1,797,049

Out of which:Payments in designated account: 1,617,304Direct payments: 179,745

1,797,049

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FOR THE YEAR ENDED 31 DECEMBER 2015

(all amounts are expressed in USD, unless otherwise mentioned)


3.3 SIDA Grant TF014946

(1) Goods, works,consultants' services Advance to

WID (including audit), Training and DesignatedNumber Operating costs Account Total

0006 190,396 - 190,396

0007 13,140 - 13,140

0008 - 131,238 131,238

0009 118,204 - 118,204

0010 234,810 - 234,810

0011 350,000 - 350,000

0012 - 16,737 16,737

0013 270,846 - 270,846

0014 - -

0015 20,164 - 20,164

0016 - 141,789 141,789

0017 19,600 - 19,600

0018 30,295 - 30,295

Total 1,247,455 289,764 1,537,219

Out of which:Payments in designated account:289,764Direct payments: 1,247,455

1,537,219

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3.4 IDA Credit 5639-MD

(1) Goods,non-

consultingservices,

consultants'services,

training and (2)operating Compensatorycosts for sales support

the Project grants under Advance tounder Part Part E of the Advance Designated

WID Number D Project Recovery Account Total

0001 - 2,863,366 - 2,863,366

0002 52,350 - - - 52,350

0003 -- - 100,000 100,000

0004 -- - 2,102,143 2,102,143

0005 52,350 - - - 52,350

0006 41,880 - - - 41,880

0007 - - 50,000 50,000

0008 - 1,870,680 (1,870,680) 2,507,635 2,507,6350009 22,444 - - - 22,444

0010 62,820 - - - 62,820

Total 231,844 4,734,046 (1,870,680) 4,759,778 7,854,988

Out of which:Payments in designated account: 4,759,778

Direct payments: 3,095,210

7,854,988

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4. EXPENDITURE BY PROJECT ACTIVITY

For the year ended Cumulative

IDA CREDIT 5095-MD 31 December 2015 to date

A. Enhancing food safety management 2,561,243 3,990,437

A.1 - Providing regulatory and institutionalsupport to MAFI for enhancing the foodsafety management system 35,923 212,499

A.2 - Providing technical enhancements supportto MAFI for the safety management 2,525,320 3,777,938

B. Enhancing market access potential 5,413,393 6,340,089

B.1 - Providing a business development supportfor productive partnerships for primaryhorticultural producers 97,806 292,421

B.2 - Set-up of an investment support for post-harvest technologies through matchinginvestment grants for Sub-projects onemerging productive partnerships for themodernization of post-harvest technologies inthe horticultural sector 5,315,587 6,047,668

C. Enhancing land productivity throughsustainable land management 33,755 828,799

C.1 - Strengthening the sustainable landmanagement capacity building of MOE 33,755 33,755

C.2 - Providing financial support for piloting SLMfor Sub-projects for farmers for farm-levelinvestments in soil conservation andtechnologies

C.3 - Providing support for rehabilitation ofshelterbelts by investments in machinery forthe creation of two mobile mechanizedsquads - 795,044

D. Project Management 154,808 363,572

TOTAL 8,163,199 11,522,897

For the year ended CumulativeIDA CREDIT 5639-MD 31 December 2015 to date

E. Compensatory sales support grantsunder Part E of the Project 6,582,987 6,582,987


TOTAL 6,895,993 6,895,993

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4. EXPENDITURE BY PROJECT ACTIVITYFor the year ended Cumulative

GEF GRANT TF012145 31 December 2015 to date

A. Enhancing food safety management - 38,700

A.1 - Providing regulatory and institutionalsupport to MAFI for enhancing the foodsafety management system 38,700

A.2 - Providing technical enhancements supportto MAFI for the safety management _ _ _

C. Enhancing land productivity throughsustainable land management 1,162,771 2,943,394

C.1 - Strengthening the sustainable landmanagement capacity building of MOE 166,505 454,198

C.2 - Providing financial support for piloting SLMfor Sub-projects for farmers for farm-levelinvestments in soil conservation andtechnologies 886,521 886,521

C.3 - Providing support for rehabilitation ofshelterbelts by investments in machinery forthe creation of two mobile mechanizedsquads 109,745 1,602,675


TOTAL 1,183,555 3,181,347

For the year ended CumulativeSIDA GRANT TF014946 31 December 2015 to date

A. Enhancing food safety management 117,442 117,442

A.1 - Providing regulatory and institutionalsupport to MAFI for enhancing the foodsafety management system 87,147 87,147

A.2 - Providing technical enhancements supportto MAFI for the safety management 30,295 30,295

B. Enhancing market access potential 1,442,594 1,533,803

B.1 - Providing a business development supportfor productive partnerships for primaryhorticultural producers 265,198 356,407

B.2 - Set-up of an investment support for post-harvest technologies through matchinginvestment grants for Sub-projects onemerging productive partnerships for themodernization of post-harvest technologies inthe horticultural sector 1,177,396 1,177,396


TOTAL 1,632,095 1,724,154

TOTAL PROJECT EXPENDITURES 17,874,840 23,324,390

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5. SUMMARY OF SUMMARY REPORTS USED AS THE BASIS FOR THE SUBMISSION OF QUARTERLY WITHDRAWAL APPLICATIONS

5.1. PART I BY SOURCESFor the year

ended 31Q1 Q2 Q3 Q4 December Cumulative

2015 2015 2015 2015 2015 to date

Opening Cash Balance(s)Designated Accounts (CAPMU)

Bank: USD Credit 5095-MD 175,005 141,643 99,558 120,229 175,005Bank: USD GEF TF12145MD 94,310 123,086 96,413 80,400 94,310

Bank: USD SIDA TF14946MD 168,762 263,263 198,781 58,211 168,762Bank: USD Credit 5639-MD - - - 100,000 -

Designated Accounts (AIPA)Bank: USD GEF TF12145MD - 791,379 791,379 791,379

Bank: USD Credit 5639-MD - - - 227,554 - -

Total opening cash balance(s) 438,077 1,319,371 1,186,131 1,377,773 438,077 -

Add: Sources of Funds (by financiers and implementingagency)

for CAPMUFunding: IDA Credit 5095-MD 229,489 467,530 1,033,996 1,073,787 2,804,802 5,607,424

Designated Account 24,995 58,357 100,442 129,771 313,565 1,451,464

Direct Payments 204,494 409,173 933,554 944,016 2,491,237 4,155,960

Funding: GEF TF12145MD 163,990 56,445 - 40,000 260,435 2,352,537Designated Account 80,690 - - - 80,690 502,862

Direct Payments 83,300 56,445 - 40,000 179,745 1,849,675

Funding: SIDA TF14946 452,978 872,393 - 211,848 1,537,219 1,798,040

Designated Account 131,238 16,737 - 141,789 289,764 474,764

Direct Payments 321,740 855,656 - 70,059 1,247,455 1,323,276

Funding: IDA Credit 5639-MD - - 204,700 177,144 381,844 381,844Designated Account - - 100,000 50,000 150,000 150,000

Direct Payments - - 104,700 127,144 231,844 231,844

for AIPAFunding: Credit 50950 MD - Direct payments - 208,731 2,617,780 2,489,076 5,315,587 6,047,668

Funding: GEF TF12145MD 1,536,614 - - - 1,536,614 1,536,614

Funding: IDA Credit 5639-MD - - 2,102,143 2,507,635 4,609,778 4,609,778

Retroactive financing IDA 5639-MD - - 2,863,366 - 2,863,366 2,863,366

Total Sources 2,383,071 1,605,099 8,821,985 6,499,490 19,309,645 25,197,271

23




(continued)

5.1. PART I BY SOURCES (continued)For the year

ended 31Q1 Q2 Q3 Q4 December Cumulative

2015 2015 2015 2015 2015 to date

Less: Uses of Funds (by expenditure category foreach financier in accordance with FinancingAgreement and by each implementing agency)

IDA 5095-MD 262,852 718,345 3,631,106 3,550,896 8,163,199 11,522,897

CAPMU(1) Goods, works, non-consulting services, consultants'

services, training and operational costs for the Project 262,852 509,614 1,013,326 1,061,820 2,847,612 5,475,229

AIPA(2) Matching Investment Grants for Sub-projects under

Parts B.2 and C.2 of the Project - 208,731 2,617,780 2,489,076 5,315,587 6,047,668

GEF 12145MD 880,449 83,118 16,013 203,975 1,183,555 3,181,347

CAPMU(1) Goods, non-consulting services, consultants'

services, training and operational costs under theProject under Parts A.1 (iii), C and D of the Project 135,214 83,118 16,013 62,689 297,034 2,294,826

AIPA(2) Matching Investment Grants for Sub-projects under

Part C.2 of the Project 745,235 - - 141,286 886,521 886,521

SIDA TF014946 358,477 936,875 140,570 196,173 1,632,095 1,724,154

CAPMU(1) Goods, works, consultants' services (including audit),

Training and Operating costs 358,477 936,875 140,570 196,173 1,632,095 1,724,154

24




(continued)

5.1. PART I BY SOURCES (continued)

For the yearended 31

Q1 Q2 Q3 Q4 December Cumulative2015 2015 2015 2015 2015 to date

IDA 5639-MDCAPMU - - 4,842,655 2,053,338 6,895,993 6,895,993(1) Goods, non-consulting services, consultants'

services (including Project audits), Training andOperational Costs under Part D of the Project - - 104,700 208,306 313,006 313,006

AIPA(2) Compensatory sales support grants under Part E of

the Project - - 1,870,680 1,848,773 3,719,452 3,719,452Exchange rate differences - - 3,909 (3,741) 169 169

Retroactive financing through Ministry of Finances - - 2,863,366 - 2,863,366 2,863,366

Total uses 1,501,778 1,738,338 8,630,343 6,004,382 17,874,842 23,324,391

Closing Cash Balance(s)Designated Accounts (CAPMU)

Bank: USD Account Credit 5095-MD 141,643 99,558 120,229 132,195 132,195 132,195Bank: USD Account GEF TF12145MD 123,086 96,413 80,400 57,711 57,711 57,711

Bank: USD SIDA TF14946MD 263,263 198,781 58,211 73,887 73,887 73,887Bank: USD Account Credit 5639-MD - - 100,000 68,837 68,837 68,837

Designated Accounts (AIPA)Bank: USD Account GEF TF12145MD 791,379 791,379 791,379 650,093 650,093 650,093

Bank: USD Account Credit 5639-MD - - 227,554 890,157 890,157 890,157

Total closing cash balance(s) 1,319,371 1,186,131 1,377,773 1,872,880 1,872,880 1,872,880

25




(continued)

5.2. PART II BY PROJECT'S ACTIVITIESFor the year

Q1 Q2 Q3 Q4 ended 31 Cumulative

Project Components/Activities 2015 2015 2015 2015 December 2015 to date

Consolidated Agricultural Project Management Unit

A. Enhancing food safety management 219,167 459,519 883,310 1,116,689 2,678,685 4,146,579

A.1 - Providing regulatory and institutional support to MAFI forenhancing the food safety management system 5,604 27,820 8,420 81,226 123,070 338,346

IDA 5095-MD 5,604 4,640 7,040 18,639 35,923 212,499

GEF 12145 MD - - - - - 38,700

SIDA TF 14946 - 23,180 1,380 62,587 87,147 87,147

A.2 - Providing technical enhancements support to MAFI forthe food safety management 213,563 431,699 874,890 1,035,463 2,555,616 3,808,233

IDA 5095-MD 213,563 431,699 874,890 1,005,168 2,525,320 3,777,938

SIDA TF 14946 - - - 30,295 30,295 30,295

B. Enhancing market access potential 355,297 912,802 181,065 91,236 1,540,399 1,826,224

B.1 - Providing for a business development support forproductive partnerships for primary horticultural producers 33,557 57,146 181,065 91,236 363,003 648,828

IDA 5095-MD 6,515 6,575 78,142 6,574 97,806 292,421

SIDA TF 14946 27,042 50,571 102,923 84,662 265,198 356,407

B.2 - Set-up of an investment support for post-harvesttechnologies through matching investment grants for Sub-projects on emerging productive partnerships for themodernization of post-harvest technologies in thehorticultural sector 321,740 855,656 - - 1,177,396 1,177,396

SIDA TF 14946 321,740 855,656 - - 1,177,396 1,177,396

26




(continued)

5.2. PART II BY PROJECT'S ACTIVITIES (continued)For the year

ended 31Q1 Q2 Q3 December Cumulative

Project Components/Activities 2015 2015 2015 Q4 2015 2015 to date

C. Enhancing land productivity throughsustainable land management 115,360 95,189 25,641 73,815 310,005 2,885,672

C.1 - Strengthening the sustainable land management(SLM) capacity building of MOE 62,060 38,744 25,641 73,815 200,260 487,953

IDA 5095-MD - 12,144 10,418 11,193 33,755 33,755

GEF 12145 MD 62,060 26,600 15,223 62,622 166,505 454,198

C.3 - Providing support for rehabilitation ofshelterbelts by investments in machinery for thecreation of two mobile mechanized squads for therehabilitation of anti-erosion shelterbelts 53,300 56,445 - - 109,745 2,397,719

IDA 5095-MD - - - 795,044

GEF 12145 MD 53,300 56,445 - - 109,745 1,602,675

D. Project Management 66,718 62,098 184,592 247,249 560,657 948,740

IDA 5095-MD 37,169 54,556 42,837 20,246 154,808 363,572

GEF 12145 MD 19,854 73 789 68 20,784 199,253

SIDA TF 14946 9,695 7,469 36,266 18,629 72,059 72,909

IDA 5639-MD - - 104,700 208,306 313,006 313,006

Sub-total 756,542 1,529,608 1,274,608 1,528,988 5,089,746 9,807,215

27




(continued)

5.2. PART II BY PROJECT'S ACTIVITIES (continued)

For the yearended 31

Q1 Q2 Q3 December Cumulative

Project Components/Activities 2015 2015 2015 Q4 2015 2015 to date

Agency for Interventions and Payment inAgriculture

B.2 - Set-up of an investment support for post-harvesttechnologies through matching investment grantsfor Sub-projects on emerging productivepartnerships for the modernization of post-harvesttechnologies in the horticultural sector - 208,731 2,617,780 2,489,076 5,315,587 6,047,668

IDA 5095-MD - 208,731 2,617,780 2,489,076 5,315,587 6,047,668

C.2 - Providing financial support for piloting SLMthrough matching investment grants for Sub-projects for farmers for farm-level investments insoil conservation practices and technologies 745,235 - - 141,286 886,521 886,521

IDA 5095-MD - - -

GEF 12145 MD 745,235 - - 141,286 886,521 886,521

E - Compensatory sales support grants under Part Eof the Project - - 4,737,954 1,845,033 6,582,987 6,582,987

IDA 5639-MD - 4,734,045 1,848,773 6,582,818 6,582,818

Exchange rate differences IDA 5639-MD - - 3,909 (3,740) 169 169

Sub-total 745,235 208,731 7,355,734 4,475,395 12,785,095 13,517,175

GRAND TOTAL 1,501,778 1,738,338 8,630,343 6,004,382 17,874,842 23,324,391

28



6. RETROACTIVE FINANCING

The amount presented in the financial statements represents retroactive financing to the

Government of Moldova for the compensations distributed to the growers of plums and

apples after October 01, 2014. The amount of these expenditures accounted cumulatively for

MDL 42,258,409 which if converted in US Dollar constitutes 2,863,366. The exchange rate

applied for conversion is the official rate established by the National Bank of Moldova as of

November 01, 2014.

7. Subsequent events note

In respect of the beneficiary Strugurele Auriu, the actual expenditures incurred in 2014 in the

amount of USD 334,305 (disbursement of matching investment grant to the beneficiary) were

considered eligible as per project's legal documents. However, during the implementation of

the subproject, the beneficiary has not fulfilled the conditions of contract with AIPA (has not

ensured the co-financing of at least 50% of the sub-project cost and constantly failed to do

this for almost 2 years already), hence, the amount of this matching investment grant is

considered as non-eligible as per Project's legal covenants, and AIPA as a fiduciary agencyshould request the beneficiary to reimburse in full.

29

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