JUDICIAL SERVICES AND SMART INFRASTRUCTURE PROJECT OF THE REPUBLIC OF AZERBAIJAN LOAN NUMBER 8407 AZ Special-Purpose Financial Statements and Independent Auditors' Report For the Year Ended December 31, 2018 JUDICIAL SERVICES AND SMART INFRASTRUCTURE PROJECT OF THE REPUBLIC OF AZERBAIJAN TABLE OF CONTENTS Page INDEPENDENT AUDITORS' REPORT 1-2 SPECIAL-PURPOSE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018: Special-purpose balance sheet 3 Statement of cash receipts and payments 4-5 Statement of project activities 6-10 Statement of designated and project accounts 11 Statement of expenditure and summary sheet withdrawal schedule 12-13 Notes to the special-purpose financial statements 14-20 *R bakertilly Dernirchi Tower, 16th floor 37 Khojaly Avenue Baku, AZI 025 Azerbaijan T: 4994 (12) 4047 666 F: +994 (12) 404 7 667 office@bakertilly.az www.bakertilly.az INDEPENDENT AUDITORS' REPORT To the Management of the Judicial Services and Smart Infrastructure Project of the Republic of Azerbaijan: Opinion We have audited the Special-Purpose Financial Statements of the Judicial Services and Smart Infrastructure Project of the Republic of Azerbaijan (the "Project"), which comprise the Special-Purpose Balance Sheet as at December 31, 2018, and the Statement of Cash Receipts and Payments, the Statement of Project Activities, the Statement of Designated and Project Accounts and the Statement of Expenditure and Summary Sheet Withdrawal Schedule ("SOE and SSWS") for the year ended December 31, 2018, and a summary of basis of accounting and other explanatory notes (collectively referred to as the "Special-Purpose Financial Statements") financed under the International Bank for Reconstruction and Development (the "IBRD") through loan agreement 8407 AZ (the "Loan Agreement"). In our opinion, the accompanying Special-Purpose Financial Statements present fairly, in all material respects, the financial position of the Project as at December 31. 2018, the cash receipts and disbursements on behalf of the Project and transactions passed through the Project's special accounts for the year ended December 31, 201 8 in accordance with IPSAS "Financial Reporting under the Cash Basis of Accounting" and relevant provisions of the Loan Agreement as described in Note 2 to the Special-Purpose Financial Statements. In addition, with respect to the SOE and SSWS, all payments reported are eligible for financing under the respective Loan Agreement and adequate documentation have been maintained to support the claims for withdrawal. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Special- PurposeFinancial Statements>section of.our report. We are independent of the Project in accordance with.the iteiatonal Ethid, Staudards o-Bo-d for Accritants Code of Ethicif6 Pi6fessidial A ciihtaits (ESBA zCode), aid -we-havefulfilledtour-other ethical responsibilities in>accordance with-thee requiremnitstand the- IESBA.Code We believe that thepaudipevidericeiwethave obtainedl§ lsufficient riate tprovide a basis,fobr"our opmnion. ASSURANCE ADVISORY TAX LEGAL PakerTilly Audit Azerbaijan CJSC trading as Baker Tilly isa memberof the global networkof Baker Tilly Jnternational Ltd., the members of which are separate and independent legal entities *ObakertilLy Emphasis of Matter-Basis ofAccounting and Restriction on Distribution and Use We draw attention to Note 2 to the Special-Purpose Financial Statements, which describes the basis of accounting. The Special-Purpose Financial Statements are prepared to assist the Project's Implementation Unit in complying with the financial reporting provisions of the Loan Agreement referred to above. As a result, the Special-Purpose Financial Statements may not be suitable for any other purpose. Our report is intended solely for the Project Management Team, the Government of the Republic of Azerbaijan and the IBRD and should not be distributed to or used by parties other than Project's Implementation Unit and the IBRD. Our opinion is not modified in respect of this matter. Responsibilities of Management for the Special-Purpose Financial Statements Management is responsible for the preparation and fair presentation of the Special-Purpose Financial Statements in accordance with IPSAS and relevant provisions of the Loan Agreements as described in Note 2 to the Special- Purpose Financial Statements, and for such internal control as management determines is necessary to enable the preparation of Special-Purpose Financial Statements that are free form material misstatement, whether due to fraud or error. Auditor's Responsibilities for the Audit of the Special-Purpose Financial Statements Our objectives are to obtain reasonable assurance about whether the Special-Purpose Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. 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 Special- Purpose Financial Statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: * Identify and assess the risks of material misstatement of the Special-Purpose Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; * Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Project's internal control; * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. 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 our audit. June 14, 2019 Baku, the Republic of Azerbaijan JUDICIAL SERVICES AND SMART INFRASTRUCTURE PROJECT OF THE REPUBLIC OF AZERBAIJAN SPECIAL-PURPOSE BALANCE SHEET AS AT DECEMBER 31, 2018 (Amounts expressed in the United States Dollars unless otherwise indicated) Note December 31, December 31, 2018 2017 ASSETS AND CUMULATIVE USES OF FUNDS Cash and cash equivalents 3 2,779,270 2,036,665 Project expenditure 145,752,699 114,987,642 Accumulated foreign exchange rate differences 208,946 208,932 TOTAL ASSETS AND CUMULATIVE USES OF FUNDS 148,740,915 117,233,239 SOURCES OF FUNDS Cumulative IBRD Funds 8 1,506,282 73.528,017 Cumulative Government Funds 67,232,960 43,703,549 Other Funds 1,673 1,673 TOTAL SOURCES OF FUNDS 148,740,915 117,233,239 Approved and signed on behalf of the Judicial Services and Smart Infrastructure Team: Azer Jafarov Zaur Nasrullayev Project Director Finance Manager June 14, 2019 June 14, 2019 Baku, the Republic of Azerbaijan Baku, the Republic of Azerbaijan The notes on pages 14-20 form an integral part of these Special-Purpose Financial Statements. 3 JUDICIAL SERVICES AND SMART INFRASTRUCTURE PROJECT OF THE REPUBLIC OF AZERBAIJAN STATEMENT OF CASH RECEIPTS AND PAYMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 (Amounts expressed in the United States Dollars unless otherwise indicated) Year ended Year ended Cumulative December 31, December 31, December 31, 2018 2017 2018 OPENING BALANCE Cash on hand 3,489 372 IBRD Designated Account 2,033,176 108,321 TOTAL OPENING BALANCE 2,036,665 108,693 ADD: FUNDS RECEIVED IBRD Loan Number 8407 AZ Initial deposit to the IBRD Designated Account - 5,000,000 Direct funding - 25,539,690 33,228,979 SOE replenishment 7.978,265 13,579,858 43,027,303 Front-end fee - - 250,000 Subtotal IBRD Loan funds 7,978,265 39,119.548 81,506,282 Government funding for Loan Number 8407 AZ Advances to the Project Account 23.529,411 11,638,911 67,232,960 Subtotal Government of Azerbaijan funds 23,529,411 11,638,911 67,232,960 Other funds Tender fees accumulated in the IBRD Designated Account - - 1-673 Subtotal other funds - - 1,673 TOTAL FUNDS RECEIVED 31,507,676 50 758,459 148.740,915 Cash withdrawals/IBRD Loan Number 8407 AZ Cash withdrawn from the IBRD Designated Account - (28,201) (1,556,547) Total cash withdrawals - (28,201) (1,556,547) LESS: EXPENDITURE IBRD Loan Number 8407 AZ (bank payments) Civil works (1,259,829) (5.834,009) (18,981,720) Goods (185-281) (23,597,163) (30,664,376) Consultants' services (4,107,889) (6.716,845) (23,175,794) .Trinriig . . (47952), (8,121) (312,347); Incremental operating costs (1,631,206) ,34) (3,808162) ... Subtotad IBIP DLoineipeioir (ethxpkid e ankp iits) 7232,157- (37472) (772192,3 IBRD Loan Number 8407 AZ (cash payments) Consultants' services (3,489) (24,321) (260.,679) Training - (12.178) Incremental operating costs - (763) (1,265,559) Subtotal IBRD Loan expenditure (cash payments) (3,489) (25,084) (1,538,416) Total IBRD Loan expenditure (7,235,646) (37,191.556) (78,730,815) 4 JUDICIAL SERVICES AND SMART INFRASTRUCTURE PROJECT OF THE REPUBLIC OF AZERBAIJAN STATEMENT OF CASH RECEIPTS AND PAYMENTS (Continued) FOR THE YEAR ENDED DECEMBER 31, 2018 (Amounts expressed in the United States Dollars unless otherwise indicated) Year ended Year ended Cumulative December 31, December 31, December 31, 2018 2017 2018 Government of Azerbaijan expenditure for IBRD Loan Number 8407 AZ (bank payments) Civil works (6,646,954) (2,042,734) (29,665,180) Goods (16,220,359) (7,597,575) (32,330,176) Consultants' services (377,689) (857,232) (2,908,734) Training - (112,101) Incremental operating costs (284,409) (156,658) (498,102) Other costs financed fully by the Government - (802,198) (1,507,591) Total Government of Azerbaijan expenditure (23,529,411) (11,456,397) (67,021,884) TOTAL EXPENDITURE (30,765,057) (48,647,953) (145,752,699) FOREIGN EXCHANGE DIFFERENCE Cash on hand - 2.230 Project Account - (182,514) (211,075) IBRD Designated Account (14) (20) (101) TOTAL FOREIGN EXCHANGE DIFFERENCE (14) (182,534) (208,946) CLOSING BALANCE IBRD Designated Account 2.779,270 2.033.176 Cash on hand - 3.489 TOTAL CLOSING BALANCE 2,779,270 2,036,665 Approved and signed on behalf of the Judicial Services and Smart Infrastructure Team: Azer Jafarov Zaur Nasrullavev Project Director Finance Manager June 14, 2019 June 14. 2019 Baku, the Republic of Azerbaijan Baku, the Republic of Azerbaijan The notes on pages 14-20 form an integral part of these Special-Purpose Financial Statements. 5 JUDICIAL SERVICES AND SMART INFRASTRUCTURE PROJECT OF THE REPUBLIC OF AZERBAIJAN STATEMENT OF PROJECT ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2018 (Amounts expressed in the United States Dollars unless otherwise indicated) PROJECT COMPONENTS/ACTIVITIES Year ended Year ended Cumulative December 31, December 31, December 31, 2018 2017 2018 1 Judicial Service Delivery Improvements 1.1 Expanding Access to Justice for All Consultants' services Barriers to access to justice for internally displaced persons, women, juveniles, minorities and other vulnerable groups - policy and operational analysis and recommendations for improvement - 215,253 Legal aid: needs analysis, review of policy options and technical support for improving policy and institutional framework and policy capacity - 285,798 Removing barriers to expansion of alternative dispute resolution: (a) needs analysis. (b) review of policy options and (c) technical support for improving policy and operational framework and institutional capacity 35,947 - 274,786 Analysis of the extent and causes of gender based violence and preparation of a national strategy and action plan for improving support for victims of such violence 70.144 - 317,028 Juvenile justice: introducing a legal and institutional framework: (a) needs analysis, (b) review of policy options, (c) preparation ofnational strategy for prevention of offences by juveniles - 160.000 200,000 Piloting Innovative Provision of Legal Aid Services in Azerbaijan--University, Law Faculty or Legal Scientific Institute 160,700 - 160,700 Piloting Innovative Provision of Legal Aid Services in Azerbaijan-Non-governmental Organizations 159,960 - 159,960 Piloting Innovative Provision of Legal Aid Services in Azerbaijan -Private Practitioners 175,680 175.680 (a) Introducing Mediation (h) Strengthening Legal Profession 236,168 - 236,168 Subtotal 838,599 160,000 2,025,373 1.2 Expanding e-justice services across the Republic of Azerbaijan Goods Supply, Installation and Support of ICT Equipment and Related Software for Primary and Reserve Data 7,194,021 14,798,050 21,992,071 Enhancementpf Electronic ?bou ient,MPinagetimept System (DMS), Case Management System (CMS) and e-bailiff a.. Istllation0of -.ifrsucture t c and bailiff,,. offices 8,765,430 8,173,563 16,938,993 Accelerating electronic filing in selected high-volume courts and court complexes through digitization - - 1,426.168 Subtotal 15,959,451 25,394,785 42,780,404 Consultants' services Upgrading and modernizing court web portal 10,909 57,267 250,484 Electronic Document Management System (DMS) and Case Management System (CMS) software in selected Phase - 705,846 1.763.705 E-library services - design and implementation of a pilot e- library under the Supreme Court - 12,151 227,626 6 JUDICIAL SERVICES AND SMART INFRASTRUCTURE PROJECT OF THE REPUBLIC OF AZERBAIJAN STATEMENT OF PROJECT ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2018 (Amounts expressed in the United States Dollars unless otherwise indicated) Consultancy services for location-specific site surveys of judicial infrastructure in Baku city Bine - 35,812 Consultancy services for location-specific site surveys of judicial infrastructure - 885,900 Development of Framework to Implement the e-Court Information System 90,000 - 90.000 Subtotal 100,909 775,264 3,253,527 Total Judicial Service Delivery Improvements 16,898,959 26,330,049 48,059,304 2 Strengthening Institutional Capacity, Efficiency and Monitoring and Evaluation ("M&E") 2.1 Improving Sector Efficiency, Performance and M&E Consultants' services Development of the key perfornance indicators and pilot management dashboard for c-court system - 217,460 Strengthening Justice Sector M&E Capacity and Quality: (a) assessment of sector M&E capacity, quality 542,548 732,830 1,275,378 Design and conduct of user surveys 70,472 176,170 352,070 Senior judicial information systems advisor - 15,575 218,837 Sector Efficiency and Expenditure Review (SEER): conduct, dissemination of findings and recommendations 83,167 - 83,167 Analysis of status of courts' physical and electronic archiving and retrieval policies and practices 159.514 - 159.514 Subtotal 855,701 924,575 2.306,426 2.2 Strengthening IT Management and Operational Capacity Goods Procurement of Information Technology Service Management (ITSM) software solutions for MOJ IT Helpdesk - 93,080 Subtotal 93,080 Consultants' services- Short-ferm baacityaugmen6aibin for1 MJ IT D &artiient a..d aH km9 526 '689 526 Policy analysis and'options,for sourcing and employment of skilledTT i6 fessiorials asM9iisfry ofJusfice ("WVOJ. personnel - 321,388 ICT Development and capacity building manager 15,632 15436 47,701 ICT Infrastructure specialist 13,547 13.378 41.340 ICT Operation Head 23,125 22,835 57,827 Project Controller (Deputy Project Manager) - 13,163 29,833 IT Trainer and support specialist 10,421 10,271 28,966 ICT support specialists 24,859 27.732 72,632 Sinior IT Infrastucture (NOC) Specialist 10.702 7,777 18,479 Interim chief information officer for MOJ 226.268 278,300 985,823 Information Systems Support Specialist# 6,908 - 6,908 IT System Administration Specialist 11,141 - 11,141 7 JUDICIAL SERVICES AND SMART INFRASTRUCTURE PROJECT OF THE REPUBLIC OF AZERBAIJAN STATEMENT OF PROJECT ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2018 (Amounts expressed in the United States Dollars unless otherwise indicated) e-Court Development Specialist #1 4.750 4,750 e-Court Development Specialist #2 4,750 - 4,750 e-Court Development Specialist #3 6,650 - 6,650 Subtotal 358,753 1,078,418 2,327,714 2.3 Communications, Outreach and Change Management Consultants' services Audio-Visual Media Preparation - 77,186 122,539 Subtotal - 77,186 122,539 2.4 Strengthening Professionalization and Knowledge Consultants' services Improving the quality of judicial decisions in economic and commercial disputes: analysis and recommendations 178,367 1501l16 328.483 Improving the quality ofjudicial decisions in first-instance courts - analysis and recommendations; 156,346 106,086 262,432 ICT training for judges, court staff and staff of other justice institutions, Phase 3 687,146 222,136 1,609.953 Overcoming Gender Barriers in Justice Professions 184,979 - 184,979 Justice Academy: Institutional and Training Needs Analysis Update 29,495 - 29,495 Subtotal 1,236,333 478,338 2,415,342 Total Strengthening Institutional Capacity, Efficiency and Monitoring and Evaluation 2,450,787 2,558,517 7,265,101 3 Expansion and Modernization of Justice Infrastructure Civil Works Construction of Sumgait Court Complex 3,338,112 3.203,221 18,640,622 Construction of Baku City Narimanov District Court 2,435,750 3.056,149 10,499,812 Construction of Surakhani District Court 2,132,921 139,298 5,612,031 Construction of Masalli District Court - 1,478,075 3,553,128 Construction of annex in Sheki Court Complex and capital repair of current Sheki District Court building for further location of the Sheki City Bailiff department - - 10,341.308 Subtotal 7,906,783 7,876,743 48,646,901 ICTandotherecnicaequipmentforSumgai Court-..>-.K pmpl - 2,280,145 - fieequ4pinent anIiittLJLieXorULikNU City 1a'aov-1i 8 ,59,609< Office equipment and furniture for Baku City Surakhani District Courts - 172,900 1,422,181 ICT and other technical equipment for Baku city Binagady District Court 121,382 1-086,068 1,207,450 ICT and other technical equipment for Imishli District Court - 422,293 527,486 ICT and other technical equipment for Zagatala District Court 55,283 373,960 535,668 ICT and other technical equipment for Qabala District Court - 560,691 560,691 Office equipment and frniture for Baku City Binagadi District Court - 672,958 1468.995 Office equipment and firniture for Imishli District Court - 101.751 222,112 Office equipment and furniture for Zagatala District Court - 138,360 302,025 8 JUDICIAL SERVICES AND SMART INFRASTRUCTURE PROJECT OF THE REPUBLIC OF AZERBAIJAN STATEMENT OF PROJECT ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2018 (Amounts expressed in the United States Dollars unless otherwise indicated) Office equipment and furniture for Gabala District Court - 118,441 258,543 ICT and other technical equipment for Masalli District Court - - 188.570 ICT and other technical equipment for Baku City Narimanov 103,098 - 1,049,471 ICT and other technical equipment for Baku Surakhani District Courts -- 860,194 ICT and other technical equipment for annexes in Sheki Court Complex - - 885,659 Office equipment and furniture for Sumgait Court Complex - 1,970,748 4,249,578 Office equipment and furniture for annexes in Sheki Court Complex - - 1,771411 Office equipment and furniture for Masalli District Court - 569,844 Provision of additional furnishing materials and office supplies to Baku city Binagadi District 93,603 - 93,603 Provision of additional furnishing materials and office supplies to Zagatala District Court 72.823 - 72,823 Subtotal 446,189 5,799,953 20,086,058 Consultants' services Updating and refinement of courthouse and justice institution buildings designs 135.460 1.831,270 6.,202,249 Author supervision of courts to be constructed 253,454 158,635 987,068 Independent technical review of technical designs for selected courts - 1,362,732 3.276,016 Independent Teclmical Review (ITR) of JSSIP civil works for Baku Grave Crimes Courts - 108,515 561,336 Technical supervision of courthouse construction 132.217 112,865 511,493 e-Court System (Data Entry) Operator 56.274 35,715 91,989 Subtotal 577,405 3,609,732 11,630,151 Total Expansion and Modernization of Justice Infrastructure 8,930,377 17,286,428 80,363,110 9 JUDICIAL SERVICES AND SMART INFRASTRUCTURE PROJECT OF THE REPUBLIC OF AZERBAIJAN STATEMENT OF PROJECT ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2018 (Amounts expressed in the United States Dollars unless otherwise indicated) 4 Project Management and Coordination Goods Vehicle for Project Implementation Unit ("PlU") - - 35,011 Subtotal - - 35,011 Consultants' services Remunerations 521,367 494,884 2,370,786 Subtotal 521,367 494,884 2,370,786 Training Training for PIU and MOJ staff and relevant government officials 47,952 88,121 329,971 Subtotal 47,952 88,121 329,971 Incremental operating costs Operating costs 1,878,016 1.061.559 5,709,031 Salaries of the employees 37.599 26,197 115,560 Subtotal 1,915,615 1,087,756 5,824,591 Other costs financed fully by the Government 802,198 1,254,825 Total Project Management and Coordination 2,484,934 2,472,959 9,815,184 5 Front-end-fee - - 250,000 TOTAL PROJECT ACTIVITIES 30,765,057 48,647.953 145,752,699 * ICT- Information and Coiunications Technology. Approved and signed on behalf of the Judicial Services and Smart Infrastructure Team: Azer Jafarov Zaur Nasrullaye Project Director Finance Manager June 14, 2019 June 14, 2019 Baku, the Republic of Azerbaijan Baku. the Republic of Azerbaijan The notes on pages 14-20 form an integral part of these Special-Purpose Financial Statements. 10 JUDICIAL SERVICES AND SMART INFRASTRUCTURE PROJECT OF THE REPUBLIC OF AZERBAIJAN STATEMENT OF DESIGNATED AND PROJECT ACCOUNTS FOR THE YEAR ENDED DECEMBER 31, 2018 (Amounts expressed in the United States Dollars unless otherwise indicated) Project Designated Account Cash on Account, Main IBRD USD- Hand State Treasury AZ491BAZ38160018 Account 402017559205 "Iniernational Bank of Azerbaijan " OJSC, Nagliyvat branch Opening balance as at January 1, 2017 - 108,321 372 Add: Project finds received 11,638,911 13,579,858 - Other funds received - - Cash received from the IBRD Designated Account 8407 AZ - - 28,201 Total receipts 11,638,911 13,579,858 28,201 Deduct: Project eligible expenditure (11,456.397) (11,626,781) - Cash withdrawn from the IBRD Designated Account- (28201) - Cash expenditure - - (25,084) Total deductions (11,456,397) (11,654,982) (25,084) Effect of foreign exchange rate IBRD share (20) - Government share (182.514) - - Cash on hand - - - Total effect of foreign exchange rate (182,514) (20) - Closing balance as at December 31, 2017 - 2,033,176 3,489 Add: Project funds received 23,529.412 7 978,265 - Other funds received Cash received from the IBRD Designated Account 8407 AZ - - - Total receipts 23,529,412 7,978,265 - Deduct: Project eligible expenditure (23,529,412) (7,232,157) - Cash withdrawn from the IBRD Designated Account Cash expenditure - (3,489) Total deductions (23,529,412) (7,232,157) (3,489) Effect of foreign exchange rate IBRD share (14) - Government share - Cash on hand Total effect of foreign exchange rate - (14) - Closing balance as at December 31, 2018 2,779,270 - Approved and signed on behalf of the Judicial Services and Smart Infrastructure Team: Azer Jafarov Zaur Nasrullayev Project Director Finance Manager June 14, 2019 June 14, 2019 Baku, the Republic of Azerbaijan Baku, the Republic of Azerbaijan The notes on pages 14-20 form an integral part of these Special-Purpose Financial Statements. 11 JUDICIAL SERVICES AND SMART INFRASTRUCTURE PROJECT OF THE REPUBLIC OF AZERBAIJAN STATEMENT OF EXPENDITURE AND SUMMARY SHEET WITHDRAWAL SCHEDULE FOR THE YEAR ENDED DECEMBER 31, 2018 (Amounts expressed in the United States Dollars unless otherwise indicated) Application No. Advance Category I Category 2 Category 3 Category 4 Category 5 Total Total payment Required Replenished Civil Goods Consultants' Training IOC works services Total applications reimbursed as at (te inception date* - - - - - - - 2.000,000 - - - - 2,000.000 2,000,000 Total applications reimbursed during the year ended December 31, 2014 2.000,000 - - - - - 2.000000 2,000,000 3 3,000,000 - - - - 3,000,000 3,000,000 4 - - - 95,603 - 110.140 205,743 2051743 5 - - 785,918 689,840 - 103,941 1579.699 1,579.699 II - 472.543 382.141 2,338,565 30,791 463.536 3,687,566 3,687.566 13 - 770.230 376.204 1,749.031 16.076 559.209 3.470,750 3,453.857 Total applications reimbursed during the year ended December 31. 2015 3.000,000 1.242,773 1.544.263 4.873,039 46.857 1.236.826 11.943.758 11.926.865 Total applications reimbursed as at December 31, 2015 500.000 1,242,773 1.544,263 4,873.039 46,857 1,236,826 13.943,758 13,926.865 14 - 322,104 - 2,438.675 30,805 693058 3.484,642 3.484,642 15 - 347,564 1,868,465 1816,190 15,456 230,252 4.277.927 4277.927 16 - 1175.728 2.135,9(4 1.238,920 23,987 205J47 4.779,746 4,779-746 Total applications reimbursed during the year ended December 31. 2016 - 1,845.396 4,004.429 5.493.785 70.248 1,128.457 12.542,315 12.542.315 Total applieations reimbursed as at December31,2016 5,000.000 3.088.169 i,548.692 10366,824 117,105 2,365,283 26,486,073 26,469,180 18 - 1,752,785 1,208.647 1.699,121 75,009 157.356 4,892,918 4,892,918 22 - - 1,369,141 2.961,371 75.009 149,899 4.555.420 4,555,420 25 - 112.958 3,144.082 548,553 49,336 276,591 4,131,520 4,131,520 Total applications reimbursed during Iie year ended ecember 31, 2017 - 1.865,743 5.721,870 5.209,045 199,354 583846 13,579,858 13579,858 lotal applications. December 31,1017 5,000.000 ,453912 11270,562, 1,575,869. 316,459 1949,129 4 40 Q49,038 1 12 JUDICIAL SERVICES AND SMART INFRASTRUCTURE PROJECT OF THE REPUBLIC OF AZERBAIJAN STATEMENT OF EXPENDITURE AND SUMMARY SHEET WITHDRAWAL SCHEDULE FOR THE YEAR ENDED DECEMBER 31, 2018 (Amounts expressed in the United States Dollars unless otherwise indicated) Application No. Advance Category 1 Category 2 Category 3 Category 4 Category 5 Total Total payment Required Replenished Civil Goods Consultants' Training HOC works services 30 - 148.783 73.362 3,711495 50,238 802,235 4,786,103 4,786,103 31 - 1,259,829 42,812 1,262,417 22,035 605,069 3,192,162 3,192,162 Total applications reimbursed during the year ended December 31, 2018 - 1,408,612 116,174 4.973,902 72,273 1,407,304 7.978,265 7,978,265 Total applications reimbursed as at December 31, 2018 5,000.000 6,362,524 11,386,736 21,549,771 388,732 4,356,433 48,044,196 48,027,303 * The inception date of the Project is October 22, 2014. Approved and signed on behalf of the ludicial Services and Smart Infrastructure Team: Azer Jafarov Zaur Nasrullayev Project Director Finance Manager June 14, 2019 June 14, 2019 Baku, the Republic of Azerbaijan Baku, the Republic of Azerbaijan The notes on pages 14-20 form an integral part of these special-purpose financial statements. 13 JUDICIAL SERVICES AND SMART INFRASTRUCTURE PROJECT OF THE REPUBLIC OF AZERBAIJAN NOTES TO THE SPECIAL-PURPOSE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 (Amounts expressed in the United States Dollars unless otherwise indicated) 1. DESCRIPTION OF THE PROJECT On October 22, 2014 the Republic of Azerbaijan (the "Recipient") has concluded loan agreement with the International Bank for Reconstruction and Development (the "IBRD") in the amount of USD 100,000,000 (the "Loan") to assist in improvement of the access, transparency and efficiency of delivery of selected justice services (the "Project"). The Project's original completion date of December 31, 2018 has been extended to June 30, 2020 on October 22, 2018. The Project consists of the following components: Component 1: Judicial Service Delivery Improvements - Improving access to justice through: (a) piloting innovative, participatory and more efficient ways to provide legal aid services to the vulnerable and marginalized through the provision of goods, consultant services and training to the Ministry of Justice; and (b) analytic and diagnostic studies focusing on: (i) the legal aid system, in particular for vulnerable groups; (ii) the development of alternative dispute resolution systems; (iii) the policies and institutional arrangements on access to justice particularly for vulnerable groups and on gender issues related to justice and (iv) the development of specific interventions to support access to justice for the Internally Displaced Persons, refugees and other vulnerable groups through the provision of consultant services and traininlg. Expanding the provision of electronic access to selected justice services through: (a) the development and rollout of selected justice e-services; (b) the improvement of the infrastructure for the justice sector information and communications technology; and (c) the construction of a data center and the rehabilitation and upgrading of a facility for disaster recovery center, through the provision of goods, consultant services and training and the carrying out of works. Component 2: Strengthening Institutional Capacity, Efficiency and Monitoring and Evaluation - Improving justice sector performance through, interalia: (a) a sector efficiency and expenditure review including analyses of court case backlogs, efficiency, justice system revenues; (b) strengthening justice sector monitoring and evaluation capacity and quality including through the development of a justice sector performance monitoring framework and performance indicators and the preparation of a strategy and action plan to improve such capacity; (c) strengthening sector capacity to undertake and apply poverty and social,impact, analysis toimprove service delivery to conon&ally and socially vulnerabl grouip's sudi as tri&nially Tisplaced Persons and (d) the c6afirilg,olifof peTtodi rtieyof if6fet liseors$l Tilwyersid 7-`-i-tff;ifYfii ~. and'6ther