Common use of Financial and Other Covenants Clause in Contracts

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) The Borrower shall maintain a financial management system, including records and accounts, and prepare financial statements in a format acceptable to the Association, adequate to reflect the operations, resources and expenditures related to the Project. (b) The Borrower shall: (i) have its records, accounts and financial statements referred to in paragraph (a) of this Section and the records and accounts for the Special Account for each Fiscal Year audited, in accordance with appropriate auditing standards acceptable to the Association, consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than six (6) months after the end of each such year, (A) certified copies of the financial statements referred to in paragraph (a) of this Section, for such year as so audited, and (B) an opinion on such statement and report of such audit, by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records, accounts and financial statements, and the audit thereof, and concerning said auditors, as the Association may from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Credit Account are were made on the basis of statements of expenditureexpenditure or Project Management Reports, the Borrower shall: (i) maintain or cause to be maintained maintained, in accordance with sound accounting practicesparagraph (a) of this Section, records and separate accounts reflecting such expenditures; (ii) ensure that retain, until at least one (1) year after the Association has received the audit report for the Fiscal Year in which the last withdrawal from the Credit Account was made, all records and documents (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; andexpenditures; (iii) enable the BankAssociation’s representatives to examine such records.records and documents; and (biv) The Borrower shall: (i) have the records ensure that such records, documents and accounts are included in the annual audit referred to in paragraph (a)(ib) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year that the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal yearFiscal Year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. Section 4.02. (a) Without limitation upon the provisions of Section 4.01 of this Agreement, the Borrower shall carry out a time-bound action plan acceptable to the Association for the strengthening of its financial management system for the Project in order to enable the Borrower, not later than November 15, 2001, or such later date as the Association shall agree, to prepare quarterly Project Management Reports, acceptable to the Association, each of which shall: (i) (A) set forth actual sources and applications of funds for the Project, both cumulatively and for the period covered by said report, and projected sources and applications of funds for the Project for the six-month period following the period covered by said report, and (B) show separately expenditures financed out of the proceeds of the Credit during the period covered by said report and expenditures proposed to be financed out of the proceeds of the Credit during the six-month period following the period covered by said report; (A) describe progress in Project implementation, both cumulatively and for the period covered by said report, and (B) explain variances between actual and previously forecast implementation targets; and (iii) furnish to set forth the Bank such other information concerning said records status of procurement under the Project and accounts and expenditures under contracts financed out of the audit thereof proceeds of the Credit, as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning end of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such reviewperiod covered by said report.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Credit Account are were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank Association has received the audit report for the fiscal year in which the last withdrawal from the Loan Credit Account was made; and (iii) enable the BankAssociation’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) (i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six nine months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank Association such other information concerning said records and accounts and the audit thereof as the Bank Association shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) The Borrower shall maintain a financial management system, including records and accounts, and prepare financial statements in a format acceptable to the Association, adequate to reflect the operations, resources and expenditures related to the Project. (b) The Borrower shall: (i) have its records, accounts and financial statements referred to in paragraph (a) of this Section and the records and accounts for the Special Account for each Fiscal Year audited, in accordance with appropriate auditing standards acceptable to the Association, consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than six (6) months after the end of each such year, (A) certified copies of the financial statements referred to in paragraph (a) of this Section, for such year as so audited, and (B) an opinion on such statement and report of such audit, by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records, accounts and financial statements, and the audit thereof, and concerning said auditors, as the Association may from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Credit Account are were made on the basis of statements of expenditureexpenditure or Project Management Reports, the Borrower shall: (i) maintain or cause to be maintained maintained, in accordance with sound accounting practicesparagraph (a) of this Section, records and separate accounts reflecting such expenditures; (ii) ensure that retain, until at least one (1) year after the Association has received the audit report for the Fiscal Year in which the last withdrawal from the Credit Account was made, all records and documents (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; andexpenditures; (iii) enable the BankAssociation’s representatives to examine such records.records and documents; and (biv) The Borrower shall: (i) have the records ensure that such records, documents and accounts are included in the annual audit referred to in paragraph (a)(ib) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year that the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal yearFiscal Year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. Section 4.02. (a) Without limitation upon the provisions of Section 4.01 of this Agreement, the Borrower shall carry out a time-bound action plan acceptable to the Association for the strengthening of its financial management system for the Project in order to enable the Borrower, not later than June 30, 2001, or such later date as the Association shall agree, to prepare quarterly Project Management Reports, acceptable to the Association, each of which shall: (i) (A) set forth actual sources and applications of funds for the Project, both cumulatively and for the period covered by said report, and projected sources and applications of funds for the Project for the six-month period following the period covered by said report, and (B) show separately expenditures financed out of the proceeds of the Credit during the period covered by said report and expenditures proposed to be financed out of the proceeds of the Credit during the six-month period following the period covered by said report; (A) describe progress in Project implementation, both cumulatively and for the period covered by said report, and (B) explain variances between actual and previously forecast implementation targets; and (iii) furnish to set forth the Bank such other information concerning said records status of procurement under the Project and accounts and expenditures under contracts financed out of the audit thereof proceeds of the Credit, as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning end of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such reviewperiod covered by said report.

Financial and Other Covenants. (a) For all expenditures with respect The Borrower shall maintain records and accounts adequate to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained reflect in accordance with sound accounting practices, records practices its operations and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsfinancial condition. (b) The Borrower shall: (i) have its records, accounts and financial state- ments (balance sheets, statements of income and expenses and related statements) and the records and accounts referred to in paragraph (a)(i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate appro- priate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year: (A) certified copies of its financial statements for such year as so audit- ed, and (B) the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records, including accounts and financial statements as well as the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account or payment out of the Special Account was made, all records (contracts, orders, in- voices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are in- cluded in the annual audit referred to in para- graph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure expen- diture submitted during such fiscal year, together to- gether with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and. (iiia) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure thatproduce, during Project implementationfor each of its fiscal years after its fiscal year ending on December 31, NHA will: 1991, funds from internal sources equivalent to not less than twenty percent (20%) of the annual average of the Borrower’s capital expenditures incurred, or expected to be incurred, for that year and the two next following fiscal years. (b) For purposes of fulfilling the requirements set out in paragraph (a) of this Section the Borrower shall, on the basis of forecasts satisfactory to the Guarantor and the Bank, starting in fiscal year 1992, carry out an annual review of the adequacy of its investment rates and maintenance program charges in compliance with respect of the MTBF; (b) consult with following fiscal year and the next following two fiscal years and, at least six months before the beginning of the following fiscal year, furnish to the Bank on a timely basis each year on for its annual investment review and maintenance plancomment its proposed budget and proposed rates and charges for such fiscal year, giving due consideration to any comments and suggestions made by together with financial projections for the Bank on such plan in the course of such consultation; and next following two fiscal years. (c) If any such review shows that the Borrower would not meet the requirements set forth in particularparagraph (a) for the Bor- rower’s fiscal years covered by such review, fully implement the National Highway Improvement ProgramBorrower shall promptly take all necessary measures (including, without limita- tion, adjustments of the structure or levels of its rates or charges) in order to meet such requirements. Section 4.03. The Borrower shall(d) For the purposes of this Section: (a) at the beginning of FY2004/05, take a decision regarding; (i) The term "funds from internal sources" means the treatment of existing stock of NHA debt; and difference between: (iiA) the mode sum of revenues from all future NHA funding provided through the Borrower’s annual Public Sector Development Programsources related to operations, all with a view to making NHA financially sustainable commencing FY 2004/05consumer deposits and consumer contributions in aid of construction, net non-operating income and any reduction in working capital other than cash; and (bB) the sum of all expenses related to opera- tions, including administration, adequate maintenance and taxes and payments in lieu of taxes (excluding provision for depreci- ation and other non-cash operating charg- es), debt service requirements, all cash dividends and other cash distributions of surplus, increase in working capital other than cash and other cash outflows other than capital expenditures. (ii) The term "net non-operating income" means the difference between: (A) revenues from all sources other than those ends related to operations; and (B) expenses, including taxes and not later payments in lieu of taxes, incurred in the generation of revenues in (A) above. (iii) The term "working capital other than April 30cash" means the difference between current assets, 2004excluding cash and current liabilities, carry out a review at the end of available options each fiscal year. (iv) The term "current assets excluding cash" means all assets other than cash which could in the ordinary course of business be converted into cash within twelve months, including accounts receivable, marketable securities, inventories and prepaid expenses properly chargeable to operating expenses within the next fiscal year. (v) The term "current liabilities" means all liabil- ities which will become due and payable or could under circumstances then existing be called for financing NHA’s investment program on a sustainable basispayment within twelve months, under terms including accounts payable, customer advances, debt service re- quirements, taxes and payments in lieu of reference satisfactory to the Banktaxes, and provide dividends. (vi) The term "debt service requirements" means the Bank with a prior opportunity to comment on the findings aggregate amount of repayments (including sink- ing fund payments, if any) of, and recommendations of such reviewinterest and other charges on, debt.

Financial and Other Covenants. (a) The Borrower shall establish and maintain or cause to be maintained a financial management system, including records and accounts, and prepare financial statements in a format acceptable to the Association, adequate to reflect, in accordance with sound accounting practices the operations, resources and expenditures related to the Project. (b) The Borrower shall: (i) have the records, accounts and financial statements referred to in paragraph (a) of this Section including those for the Special Accounts for each Fiscal Year semiannually audited, in accordance with appropriate auditing principles acceptable to the Association, consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than four months after the end of each such audit period: (A) certified copies of the financial statements referred to in paragraph (a) of this Section for such audit period as so audited; and (B) an opinion on such statements, records and accounts and report of such audit, by said auditors, of such scope and in such detail as the Association shall have reasonably requested, including, as part of the information to be provided in each such report, a management letter concerning the Borrower’s internal controls; and (iii) furnish to the Association such other information concerning said records and accounts and the audit thereof, and concerning said auditors, as the Association may from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account are Financing Accounts were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained maintained, in accordance with sound accounting practicesparagraph (a) of this Section, records and separate accounts reflecting such expenditures; (ii) ensure that retain, until at least one year after the Association has received the consolidated audit report for the Fiscal Year in which the last withdrawal from the Financing Accounts was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; andexpenditures; (iii) enable the BankAssociation’s representatives to examine such records.; and (biv) The Borrower shall: (i) have the ensure that such records and accounts are included in the annual audit referred to in paragraph (a)(ib) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year that the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. (a) Without limitation upon the Borrower’s reporting obligations set forth in Part C of Schedule 4 to this Agreement, the Borrower shall prepare and furnish to the Association a Financial Monitoring Report, in form and substance satisfactory to the Association, which: (i) sets forth actual and projected sources and uses of funds for the Project, both cumulatively and for the period covered by said report, showing separately funds provided under the Financing, and explains variances between the previously forecast and actual uses of such funds; (ii) describes physical progress in Project implementation, both cumulatively and for the period covered by said report, and explains variances between the previously forecast and actual Project implementation; and (iii) furnish to sets forth the Bank such other information concerning said records and accounts and status of procurement under the audit thereof Project, as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning end of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; andperiod covered by said report. (b) The first FMR shall be furnished to those ends and the Association not later than April 3045 days after the end of the first calendar quarter after the Effective Date, 2004and shall cover the period from the incurrence of the first expenditure under the Project through the end of such first calendar quarter; thereafter, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory each FMR shall be furnished to the BankAssociation not later than 45 days after each subsequent calendar quarter, and provide the Bank with a prior opportunity to comment on the findings and recommendations of shall cover such reviewcalendar quarter.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Credit Account are were made on the basis of statements of expenditure, the Borrower shall: (i) maintain maintain, or cause to be maintained maintained, in accordance with sound accounting practicesparagraph (a) of this Section, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank Association has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was madeCredit Account; and (iii) enable the Bank’s Association's representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph paragraph (a)(ia) (i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as availablepossible, but in any case not later than six (6) months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank Association such other information concerning said records and accounts and the audit thereof as the Bank Association shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect The Borrower shall maintain, and shall cause NEPRA, OGRA and PTA to which withdrawals from the Loan Account are made on the basis of maintain, a financial management system, including records and accounts, and prepare financial statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound consistently applied accounting practicesstandards acceptable to the Association, records adequate to reflect the operations, resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after related to the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject. (b) The Borrower shall: (i) have the records and accounts financial statements referred to in paragraph (a)(ia) of this Section and those for the Special Account for each fiscal year (or other period agreed to by the Association), audited, in accordance with appropriate consistently applied auditing principles consistently appliedstandards acceptable to the Association, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six months after the end of each such year (or such other period agreed to by the report Association), (A) certified copies of the financial statements referred to in paragraph (a) of this Section for such audit year (or other period agreed to by the Association), as so audited, and (B) an opinion on such statements by said auditors, of such in scope and in such detail as satisfactory to the Bank shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawalsAssociation; and (iii) furnish to the Bank Association such other information concerning said such records and accounts accounts, and the audit thereof of such financial statements, and concerning said auditors, as the Bank shall Association may from time to time reasonably request. Section 4.02. Except as (c) For all expenditures with respect to which withdrawals from the Bank shall otherwise agreeCredit Account were made on the basis of statements of expenditure, the Borrower shall: (i) retain, until at least one year after the Association has received the audit report for, or covering, the fiscal year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (ii) enable the Association’s representatives to examine such records; and (iii) ensure that such statements of expenditure are included in the audit for each fiscal year (or other period agreed to by the Association), referred to in paragraph (b) of this Section. (a) Without limitation upon the Borrower’s progress reporting obligations set out in paragraph 5 (b) of Schedule 4 to this Agreement, the Borrower shall ensure thatprepare and furnish to the Association a financial monitoring report, during in form and substance satisfactory to the Association, which: (i) sets forth sources and uses of funds for the Project, both cumulatively and for the period covered by said report, showing separately funds provided under the Credit, and explains variances between the actual and planned uses of such funds; (ii) describes physical progress in Project implementation, NHA will: both cumulatively and for the period covered by said report, and explains variances between the actual and planned Project implementation; and (aiii) carry out its investment and maintenance program in compliance with sets forth the MTBF; status of procurement under the Project, as at the end of the period covered by said report. (b) consult with The first Financial Management Report shall be furnished to the Bank on a timely basis each year on its annual investment Association not later than 45 days after the end of the first calendar quarter after the Effective Date, and maintenance plan, giving due consideration to any comments and suggestions made by shall cover the Bank on such plan in period from the course incurrence of the first expenditure under the Project through the end of such consultationfirst calendar quarter; thereafter, each Financial Management Report shall be furnished to the Association not later than 45 days after each subsequent calendar quarter, and (c) in particular, fully implement the National Highway Improvement Programshall cover such calendar quarter. Section 4.03. The Borrower shall: (a) at shall annually review with the beginning of FY2004/05Association the CSR Agenda and progress in carrying it out, and, thereafter, take a decision regarding; (i) all measures required to ensure its efficient future implementation and completion and achievement of its objectives, taking into account the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the BorrowerAssociation’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment views on the findings and recommendations of such reviewmatter.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, resources and expenditures in respect of the Project of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof, including, without limitation, separate records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsof UDD. (b) The Borrower shall, through UDD: (i) have the records and accounts referred to in paragraph paragraph (a)(ia) of this Section and including those for the Special Account for f or each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, including the Borrower shall, through UDD: (i) maintain, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made, all records (contracts, orders, invoices bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the The Borrower shall ensure that, during Project implementation, NHA willat all times: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) cause the treatment facilities provided under Part A (3) of existing stock of NHA debtthe Project to be operated and maintained and from time to time, promptly as needed, all--necessary repairs and renewals thereof to be made, all in accordance with sound engineering and financial practices; and (ii) ensure the mode timely and adequate provision of all future NHA funding provided through funds, facilities and other resources required for the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such reviewpurpose.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained separate records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after in respect of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, including the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, or cause to be retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account or payment out of the Special Account was made, all records contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure thatshall, during Project implementationthrough the Apex Unit, NHA will: (a) carry out its investment and maintenance program in compliance with respect of repayments of principal of, respectively, the MTBF; (b) consult with portions of the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan Subsidiary Finances utilized in the course making of such consultation; Sub-loans under Part B of the Project, and, separately, the portions of the Subsidiary Finances utilized in the making of Sub-loans under Part C of the Project: and, thereafter, maintain, in a bank, acceptable to the Bank, a separate account on terms and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference conditions satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.; and

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after in respect of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six three months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, including the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account or payment out of the Special Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at The Borrower shall, by December 31, 1994, issue the beginning relevant decrees and regulations to further facilitate the liberalization of FY2004/05, take international trade with wood and wood products in a decision regarding; (i) manner agreed between the treatment of existing stock of NHA debt; Borrower and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; andBank. (b) to those ends The Borrower shall establish, by December 31, 1994 a trading facility for wood, wood products and not later than April 30the related services with Articles of Association, 2004policies and supporting regulations agreed between the Borrower and the Bank. (c) The Borrower shall establish, carry out by October 31, 1994 a review of available options stumpage and royalty policy for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to wood as agreed between the Borrower and the Bank, which need not affect direct budgetary support for the Ministry of Forestry, for implementation beginning January 1, 1995. (d) The Borrower shall issue or caused to be issued, before December 31, 1994 the relevant decrees and provide regulations for the Bank with further liberalization of the domestic market in wood and wood products except for the procurement of wood and wood products required under the system of state orders, in a prior opportunity to comment on manner agreed between the findings Borrower and recommendations of such reviewthe Bank.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after in respect of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph para- graph (a)(ia) of this Section and Section, including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information con- cerning said records and accounts and the audit thereof as the Bank shall from time to time reason- ably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, including the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit con- tains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures proce- dures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; cause (i) each institution included in the treatment of existing stock of NHA debt; Project to be operated and managed in accordance with sound administrative, financial, technical and public health practices, and (ii) each such institution at all times to be staffed with qualified and experienced administrators, medical personnel and other competent staff, in adequate numbers; (b) cause the mode buildings, furniture and equipment provided under Part A (a) of the Project to be operated and maintained, and from time to time, promptly as needed, cause all future NHA funding provided through the Borrower’s annual Public Sector Development Programnecessary repairs and renewals thereof to be made, all in accordance with a view to making NHA financially sustainable commencing FY 2004/05sound administrative, financial, technical and public health practices; and (bc) to those ends provide, promptly as needed, the funds, facilities, services and not later than April 30, 2004, carry out a review of available options other resources required for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such reviewpurposes.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of The Borrower shall establish and maintain a financial management system, including records and accounts, and prepare financial statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound consistently applied accounting practicesstandards in a format acceptable to the Association, records adequate to reflect the operations, resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contractsexpenditures related to Parts A, ordersB.4, invoicesB.5, bills, receipts C and other documents) evidencing such expenditures are retained until at least one year after D of the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject. (b) The Borrower shall: (i) commencing with the FY in which the Effectiveness Date falls to and including the FY in which the last withdrawal from the Credit Account is made, have the records records, accounts and accounts financial statements referred to in paragraph (a)(ia) of this Section and those the records and accounts for the Special Account for each fiscal year Fiscal Year or other period agreed upon by the Association, audited, in accordance with appropriate consistently applied auditing principles consistently appliedstandards acceptable to the Association, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six months after the end of each such year or other period agreed upon by the Association, (A) certified copies of the financial statements referred to in paragraph (a) of this Section for such year or other period agreed upon by the Association as so audited, and (B) an opinion on such statements and a report of such audit audit, by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning such financial statements, including and the audit thereof, and concerning said auditors, as the Association may from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Financing Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain, or cause to be maintained, in accordance with paragraph (a) of this Section, records and separate accounts reflecting such expenditures; (ii) retain, until at least one year after the Association has received the audit report for the FY in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association’s representatives to examine such records; and (iv) ensure that such records and accounts concerning the statements of expenditures are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit for each FY or other period agreed upon by the Association contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal yearFY or other period agreed upon by the Association, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. Section 4.02. (a) Without limitation upon the provisions of Section 4.01 of this Agreement, and the Borrower’s progress reporting obligations set out in paragraphs 3, 4 and 5 of Schedule 4 to this Agreement, the Borrower shall prepare and furnish to the Association a Financial Monitoring Report, in form and substance satisfactory to the Association, which: (i) sets forth sources and uses of funds for the Project, both cumulatively and for the period covered by said report, and projected sources and applications of funds for the Project for the six-month period following the period covered by said report; (ii) describes physical progress in Project implementation, both cumulatively and for the period covered by said report, and explains variances between the actual and planned implementation targets; and (iii) furnish to sets forth the Bank such other information concerning said records and accounts and status of procurement under the audit thereof Project as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning end of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such reviewperiod covered by said report.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after in respect of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association, as soon as available, but in any case not later than six months after the end of each such year year, a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested; and (iii) furnish to the Association such other infor- xxxxxx concerning said records, including accounts and the audit thereof as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expen- ditures; (ii) retain, until at least one year after the Association has received the audit report for the fiscal year in which the last withdrawal from the Credit Account or payment out of the Special Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the The Borrower shall ensure thatby January 31, during Project implementation1995, NHA will: (a) carry out its investment an action plan satisfactory to the Association for implementing the respective roles and maintenance program in compliance with responsibilities of the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment DT and maintenance planCD, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particularas defined under Schedule 2, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; Part A 1 (i) the treatment and Part A 2 (i) of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such reviewthis Agreement respectively.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after in respect of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six nine months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, including the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account or payment out of the Special Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as In order to ensure the Bank shall otherwise agreeachievement of the objectives of the Project and to make full economic and productive use of the investments included in the Project, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) prepare, under terms of reference agreed with the treatment Bank, and furnish to the Bank, by October 31, 1994, two master plans, with indicative budgets, one for the carrying out of existing stock agricultural research and one for the carrying out of NHA debt; forestry research, and for the carrying out of programs for capital and operating investments and for improving research staff career structure, training and performance incentives, over the ten years period following such date, (ii) finalize said plans after taking into consideration the mode Bank’s comments thereon, and (iii) maintain arrangements agreed with the Bank, for the updating of all future NHA funding provided through said plans, by December 31 of each year, and for the Borrower’s efficient carrying out thereof during each such year, including for ensuring annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05allocations of funds therefore adequate for the carrying out thereof; and (b) to those ends provide adequate budgetary resources each year for the proper operation and not later than April 30, 2004, carry out a review maintenance of available options for financing NHA’s investment program on a sustainable basis, the facilities provided under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such reviewProject.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditureThe Borrower shall maintain a financial management system, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, including records and separate accounts accounts, and prepare financial statements in a format acceptable to the Association, adequate to reflect the operations, resources and expenditures related to the Project, including those reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsGrants. (b) The Borrower shall: (i) have the records records, accounts and accounts financial statements referred to in paragraph (a)(ia) of this Section and those the records and accounts for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles standards acceptable to the Association, consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of the financial statements referred to in paragraph (a) of this Section for such year the as so audited, and (B) an opinion on such statements, records and accounts and report of such audit audit, by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning such records and accounts, including and the audit thereof, and concerning said auditors, as the Association may from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of Project Management Reports, or statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and separate accounts reflecting such expenditures; (ii) retain, until at least one year after the Association has received the audit report for the fiscal year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the Project Management Reports or statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. Section 4.02. The Borrower shall, by or before September 30 of each calendar year from the Effective Date until the furnishing of the first Project Management Report, have its internal financial control system and the management supervision of said system audited by the auditors referred to in Section 4.01 (b) of this Agreement and address any deficiencies indicated in said audits with due diligence. (a) Without limitation upon the provisions of Section 4.01 of this Agreement, the Borrower shall carry out a time-bound action plan acceptable to the Association for the strengthening of the financial management system referred to in paragraph (a) of said Section 4.01, in order to enable the Borrower, not later than eighteen months after the Effective Date, or such later date as the Association shall agree, to prepare quarterly Project management reports, acceptable to the Association, each of which: (i) (A) sets forth actual sources and applications of funds for the Project, both cumulatively and for the period covered by said report, and projected sources and applications of funds for the Project for the six-month period following the period covered by said report, and (B) shows separately expenditures financed out of the proceeds of the Credit during the period covered by said report and expenditures proposed to be financed out of the proceeds of the Credit during the six-month period following the period covered by said report; (ii) (A) describes physical progress in Project implementation, both cumulatively and for the period covered by said report, and (B) explains variances between the actual and previously forecast implementation targets; and (iii) furnish to sets forth the Bank such other information concerning status of procurement under the Project and expenditures under contracts financed out of the proceeds of the Credit, as at the end of the period covered by said records and accounts and the audit thereof as the Bank shall from time to time reasonably requestreport. (b) Upon the completion of the action plan referred to in paragraph (a) of this Section 4.02. Except as the Bank shall otherwise agree4.03, the Borrower shall ensure thatprepare, during Project implementationin accordance with guidelines acceptable to the Association, NHA will: (a) carry out its investment and maintenance program in compliance with furnish to the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not Association no later than April 30, 2004, carry out 45 days after the end of each calendar quarter a review of available options Project Management Report for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such reviewperiod.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) , through the Treasury and the SPO, maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contractsexpenditures in respect of Parts B, ordersC, invoices, bills, receipts D and other documents) evidencing such expenditures are retained until at least one year after E of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and including those for the its Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, including the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account or payment out of its Special Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at by October 31 of each year submit to the beginning Bank for review and comment a proposed work program for the carrying out of FY2004/05Parts B, take a decision regarding; (i) C, D and E of the treatment of existing stock of NHA debt; and (ii) Project during the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05following calendar year; and (b) by November 30 of each year, submit evidence to those ends and not later than April 30the Bank that said work program, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, has been duly approved by all appropriate action. Section 4.03. The Borrower shall carry out by October 31, 1995, together with the Bank, a comprehensive mid-term review of implementation of the Project on the basis of criteria satisfactory to the Bank. Section 4.04. The Borrower shall prepare, through the Treasury and provide the SPO, and furnish to the Bank with a prior opportunity to comment detailed quarterly reports on the findings execution and recommendations operation of such reviewParts B, C, D and E of the Project and on other matters, pursuant to Section 9.07 of the General Conditions, of a scope and within a timetable satisfactory to the Bank.

Financial and Other Covenants. Section 4.01. (a) For all expenditures with respect to which withdrawals from the Loan Account are were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) (i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) The Borrower shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) The Borrower shall and shall cause relevant ministries and agencies of the Borrower responsible for carrying out the Project or any part thereof to: (i) have the records and accounts referred to in paragraph (a) of this Section, including those for the Special Account, for each fiscal year audited in accordance with appropriate auditing principles consistently applied by independent auditors satisfactory to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than four months after the end of each such year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account are were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained maintained, in accordance with sound accounting practicesparagraph (a) of this Section, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contractsretain, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account or payment out of the Special Account was made; and, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records.; and (biv) The Borrower shall: (i) have the ensure that such records and accounts are included in the annual audit referred to in paragraph (a)(ib) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year that the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and. (iiia) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall, in respect of any repayments of principal and advances, payment of commitment fees, interest and other payments to be made by the Sub-borrowers under their respective Subsidiary Loan Agreements and Advance Agreements, if applicable: (i) open, by the date on which the Borrower shall ensure thatreceive the first such payment, during Project implementationand thereafter maintain, NHA will: in a bank satisfactory to the Bank, a NPAF account (athe NPAF Account), on terms and conditions, including auditing conditions, satisfactory to the Bank; and (ii) carry out its investment promptly upon receipt of such repayments and maintenance program in compliance with payments, credit the MTBF; same to the NPAF Account. (b) consult with Each March 1 and September 1, the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (ai) withdraw from the NPAF Account an amount equivalent to the amount of interest and commitment charge due from the Borrower to the Bank under Article II of this Agreement with respect to NPAF Sub-Loans and, if no such amounts are available in the NPAF Account, the amounts due herein shall accrue for the benefit of the Borrower and be withdrawn out of the NPAF Account at such time as sufficient funds are available in the beginning of FY2004/05NPAF Account; (ii) utilize the amounts, take a decision regarding; if any, remaining in the NPAF Account following withdrawals under Section 4.02 (b) (i) of this Agreement, excluding the treatment amounts equivalent to the repayment of existing stock principal under the NPAF Sub-loans and Investment Project Preparation Advances, for the operating expenses of NHA debtthe NPAF expected to be incurred during the next six months; (iii) utilize the amounts, if any, remaining in the NPAF Account following withdrawals under Section 4.02 (b) (i) and Section 4.02 (b) (ii) of this Agreement, excluding the amounts equivalent to the repayment of principal under the NPAF Sub-loans and Investment Project Preparation Advances, as follows: (A) thirty percent (30%) shall be used by the Borrower for payments due from the Borrower to the Bank under this Agreement; and (iiB) seventy percent (70%) shall be available to the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view NPAF for loans to making NHA financially sustainable commencing FY 2004/05Russian sub-borrowers for high priority recovery/pollution abatement projects; and (iv) utilize the amounts, if any, remaining in the NPAF Account following withdrawals under Section 4.02 (b) (i), Section 4.02 (b) (ii) and Section 4.02 (b) (iii) of this Agreement for loans and advances to those ends Russian sub-borrowers for high priority recovery/pollution abatement projects. (c) The Borrower shall select a bank satisfactory to the Bank and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basisenter into an arrangement, under terms of reference and conditions satisfactory to the Bank, with such a bank to administer the Sub-loans and provide manage the Bank with a prior opportunity to comment on the findings and recommendations of such reviewNPAF Account.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Credit Account are were made on the basis of statements of expenditure, the Borrower shall: (i) cause CAMRAIL to maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained by CAMRAIL until at least one year after the Bank Association has received the audit report for the fiscal year in which the last withdrawal from the Loan Credit Account was made; and (iii) enable the BankAssociation’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) (i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank Association such other information concerning said records and accounts and the audit thereof as the Bank Association shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the The Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment maintain the Special Retirement Fund on terms and maintenance program in compliance with conditions satisfactory to the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement ProgramAssociation. Section 4.03. The Borrower shall take all necessary measures, satisfactory to the Association, to ensure that fuel used by locomotives and other rail motive power shall be exempted from user charges to the Road Fund. Section 4.04. The Borrower shall: : (a) at carry out a study on the beginning price structure of FY2004/05, take a decision regarding; (i) petroleum products supplying the treatment northern part of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05territory; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from The Borrower, through the Loan Account are made on the basis of statements of expenditureMOEIEI, the Borrower shall: (i) shall maintain or cause to be maintained in accordance with sound accounting practicesa financial management system, including records and separate accounts reflecting such expenditures; (ii) ensure that all records (contractsaccounts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year prepare financial statements in which the last withdrawal from the Loan Account was made; and (iii) enable a format acceptable to the Bank’s representatives , adequate to examine such recordsreflect the operations, resources and expenditures related to the Project. (b) The Borrower Borrower, through the MOEIEI, shall: (i) have the records records, accounts and accounts financial statements referred to in paragraph (a)(ia) of this Section and those the records and accounts for the Special Account for each fiscal year Fiscal Year audited, in accordance with appropriate auditing principles standards acceptable to the Bank, consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six (6) months after the end of each such year: (A) certified copies of the financial statements referred to in paragraph (a) of this Section for such year the as so audited; and (B) an opinion on such statements, records and accounts and report of such audit audit, by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning such records and accounts, including and the audit thereof, and concerning said auditors, as the Bank may from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, the Borrower, through the MOEIEI, shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and separate accounts reflecting such expenditures; (ii) retain, until at least one (1) year after the Bank has received the audit report for the Fiscal Year in which the last withdrawal from the Loan Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal yearFiscal Year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. (a) The Borrower, through the MOEIEI, shall prepare and furnish to the Bank a financial monitoring report (FMR), in form and substance satisfactory to the Bank, which: (i) sets forth sources and uses of funds for the Project, both cumulatively and for the period covered by said report, showing separately funds provided under the Loan, and explains variances between the actual and planned uses of such funds; (ii) describes physical progress in Project implementation, both cumulatively and for the period covered by said report, and explains variances between the actual and planned Project implementation; and (iii) furnish sets forth the status of procurement under the Project, as of the end of the period covered by said report. (b) The first FMR shall be furnished to the Bank not later than forty-five (45) days after the end of the first semester after the Effective Date, and shall cover the period from the incurrence of the first expenditure under the Project through the end of such other information concerning said records and accounts and the audit thereof as first semester; thereafter, each FMR shall be furnished to the Bank not later than forty-five (45) days after each subsequent semester, and shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on cover such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Programsemester. Section 4.03. The Borrower shall: (a) at not later than October 31, 2005, submit for the beginning consideration of FY2004/05, take a decision regarding; the Verkhovna Rada (iParliament) the treatment proposed legislative framework for on-line transactions, as such framework has been identified in agreement with the Bank under Part B of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through Project as necessary to legalize on-line business transactions in the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05territory and thereby complement and ensure the achievement of the objectives of the Project; and (b) to those ends and not later than April June 30, 20042006, carry out take all action required to amend and/or adopt the regulatory and administrative acts necessary for the proper implementation of the legislative framework referred to in the preceding paragraph (a) so as to enable on- line business transactions in the Borrower’s territory in a review manner consistent with the objectives of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such reviewProject.

Financial and Other Covenants. (a) The Borrower shall maintain records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of activities related to the Project, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) For all expenditures with respect to which withdrawals from the Loan Credit Account are were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank Association has received the audit report for the fiscal year in which the last withdrawal from the Loan Credit Account was made; and (iii) enable the BankAssociation’s representatives to examine such records. (bc) The Borrower shall: (i) have the records and accounts referred to in paragraph paragraph (a)(ia) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six nine months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure expendi- ture submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank Association such other information concerning con- cerning said records and accounts and the audit thereof as the Bank Association shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after in respect of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph para- graph (a)(ia) of this Section and including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information con- cerning said records and accounts and the audit thereof as the Bank shall from time to time reason- ably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, including the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit con- tains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures proce- dures and internal controls involved in their preparationprep- aration, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the The Borrower shall cause MOE to ensure thatthat designs for construction of compulsory level schools conform to space, during Project implementationarea, NHA will: (a) carry out its investment class size, structure and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration teacher standards agreed to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement ProgramMOE. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contractsexpenditures in respect of the Project of the departments or agencies of the Borrower, ordersincluding the ports of Massawa and Assab, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after responsible for carrying out the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association, as soon as available, but in any case not later than six months after the end of each such year year, a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records, including accounts and the audit thereof as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Association has received the audit for the fiscal year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after in respect of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and Section, including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, including the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account or payment out of the Special Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall, by June 30, 1998: (a) at develop and initiate the beginning implementation of FY2004/05programs similar to the programs referred to under Part A (2) (a) of the Project, take a decision regarding; (i) to improve the treatment of existing stock of NHA debt; quality and (ii) the mode of all future NHA funding provided through effectiveness of, and access to, primary health care in the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05provinces other than the Project Provinces; and (b) to those ends ensure that disposal of medical materials and not later than April 30waste and protection of X-ray facilities and staff are undertaken at all times in conformity with the Borrower’s applicable regulations and in accordance with safety, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference health and environmental standards satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Credit Account are were made on the basis of statements of expenditureexpenditures, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank Association has received the audit report for the fiscal year in which the last withdrawal from the Loan Credit Account was made; and (iii) enable the BankAssociation’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) (i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank Association such other information concerning said records and accounts and the audit thereof as the Bank Association shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Credit Account are or payments out of a Special Account were made on the basis of statements of expenditureexpenditures, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are be retained until at least one year after the Bank Association has received the audit report for the fiscal year in which the last withdrawal from the Loan Credit Account or payment out of a Special Account was made; and (iii) enable the BankAssociation’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) (i) of this Section and those for the Special Account Accounts for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six months after the end of each such year year, the report reports of such audit audits by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested, including a separate opinion opinions by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank Association such other information concerning said records and accounts and the audit audits thereof as the Bank Association shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the The Borrower shall take such steps as shall be necessary on its part to ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance that ONATRA comply with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment provisions of Section 3.01 and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.Sections

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained separate records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after in respect of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six (6) months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, including the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account or payment out of the Special Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as In order to ensure the Bank shall otherwise agreebalanced and environmentally sound development of the northern Sahara region of the Borrower’s territory, the Borrower shall take all measures necessary to ensure that, during Project implementation, NHA will: : (a) carry out its investment and maintenance program The use of the groundwater resources in compliance said region shall be planned in accordance with the MTBF; recommendations of the Study on Water Resources in the Sahara; (b) consult with All future development of said region shall be undertaken on the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration of: (i) the development plans referred to any comments and suggestions made by in Part A(4)(b) of the Bank on such plan in the course of such consultationProject; and (ii) the program to be developped and carried out under Part A(2)(a) of the Project, in respect of monitoring and managing ground water resources in said region; and (c) Prior to the preparation and carrying out of said development plans and program: (i) the further development of irrigation systems within said region shall be limited to the land areas previously allocated; and (ii) the allocation of new lands for irrigation purposes shall be regulated so as to ensure consistency with the exploitable potential of the water resources in particular, fully implement said region pursuant to the National Highway Improvement Programrecommendations of the Study on Water Resources in the Sahara. Section 4.03. The In order to ensure the proper operation and maintenance of the irrigation and drainage systems included in the Project Area, and the recovery of a reasonable portion of the costs associated with said systems from the farmers and other beneficiaries of said systems, the Borrower shall: (a) Take all measures necessary to ensure that the contracts for the rehabilitation of each date palm plantation shall be awarded only after arrangements acceptable to the Bank shall have been concluded between the Borrower, through the Project Area Agency, and the beneficiaries of the irrigation and drainage systems in respect of at least seventy-five percent (75%) of the beginning area subject of FY2004/05each such contract, take a decision regarding; so as to ensure the proper operation and maintenance by said beneficiaries of said systems and the recovery from said beneficiaries of the costs referred to in paragraph (b) of this Section which are allocable thereto, all in accordance with the provisions of said paragraph; (i) Establish and, through the treatment Project Area Agency, collect, commencing not later than December 31, 1996, charges sufficient to recover (A) from the beneficiaries of existing stock the drainage network, included in the Project Area, which is common to more than one oasis, not less than 100% of NHA debtthe recurrent costs of operating and maintaining said network, and (B) from the beneficiaries of the well drilling and construction works and related drilling and pumping equipment and irrigation and drainage works, carried out under Part B of the Project, a reasonable part of the investment costs of said works; and (ii) to that end, furnish to the mode Bank, not later than December 31, 1992, for its consideration and comment, the proposed schedule of all future NHA funding provided through such charges to be applied and collected as aforesaid, together with any explanatory material, data or other information pertaining thereto which may be reasonably required by the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05Bank; and (c) Until such time as the charges referred to in paragraph (b) of this Section are established, provide or cause to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory be provided to the Bank, Project Area Agency financial and provide other resources adequate to enable it to properly operate and maintain the Bank with a prior opportunity to comment on main drainage system included in the findings and recommendations of such reviewProject Area.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) (i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six nine (9) months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. (a) The Borrower shall cause the RWA for Beirut and Mount Lebanon, and the RWA for South Lebanon, and their respective successor companies to be established pursuant to Section 4.02. Except 3.06 of this Agreement, to maintain, for the Fiscal Year 1999 and thereafter, records and accounts adequate to reflect in accordance with sound accounting practices their operations and financial condition. (b) The Borrower shall cause the authorities and their successor companies referred to in paragraph (a) of this Section to: (i) have its records, accounts and financial statements (balance sheets, statements of income, expenses and related statements) for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than nine (9) months after the end of each such year, (A) certified copies of its financial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05have reasonably requested; and (biii) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory furnish to the BankBank such other information concerning such records, accounts and provide financial statements and the audit thereof as the Bank with a prior opportunity shall from time to comment on the findings and recommendations of such reviewtime reasonably request.

Financial and Other Covenants. (a) For The Borrower shall establish, not later than December 31, 2001, and thereafter at all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expendituretimes maintain, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practicesa financial management system, including records and separate accounts reflecting such expenditures; (ii) ensure that all records (contractsaccounts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year prepare financial statements in which the last withdrawal from the Loan Account was made; and (iii) enable a format acceptable to the Bank’s representatives , adequate to examine such recordsreflect the operations, resources and expenditures related to the Project. (b) The Borrower shall: (i) have the records records, accounts and accounts financial statements referred to in paragraph (a)(ia) of this Section and those the records and accounts for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles standards acceptable to the Bank, consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six (6) months after the end of each such year: (A) certified copies of the financial statements referred to in paragraph (a) of this Section for such year the as so audited, and (B) an opinion on such statements, records and accounts and report of such audit audit, by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning such records and accounts, including and the audit thereof, and concerning said auditors, as the Bank may from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and separate accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. Section 4.02. Without limitation upon the provisions of Section 4.01 of this Agreement, the Borrower shall carry out a time-bound action plan acceptable to the Bank for the strengthening of the financial management system referred to in paragraph (a) of said Section 4.01 in order to enable the Borrower, not later than February 15, 2002, or such later date as the Bank shall agree, to prepare quarterly Project Management Reports, acceptable to the Bank, each of which: (i) (A) sets forth actual sources and applications of funds for the Project, both cumulatively and for the period covered by said report, and projected sources and applications of funds for the Project for the six-month period following the period covered by said report, and (B) shows separately expenditures financed out of the proceeds of the Loan during the period covered by said report and expenditures proposed to be financed out of the proceeds of the Loan during the six-month period following the period covered by said report; (ii) (A) describes physical progress in Project implementation, both cumulatively and for the period covered by said report, and (B) explains variances between the actual and previously forecast implementation targets; and (iii) furnish to sets forth the Bank such other information concerning status of procurement under the Project and expenditures under contracts financed out of the proceeds of the Loan, as at the end of the period covered by said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Programreport. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April December 31, 2001, prepare and submit to the Bank a Financial Management Procedure Manual for the Project. Section 4.04. In order to achieve the objectives of Part A of the Project, the Borrower shall, not later than October 31, 2003, take all measures required on its part, including regulatory measures, to restructure the MOF, in accordance with specific ways and means agreed upon between the Borrower and the Bank and with Part B of Schedule 4 to this Agreement. Section 4.05. In order to achieve the objectives of Part A of the Project, the Borrower shall, not later than October 31, 2003, take all measures required on its part, including regulatory measures, to implement reforms aiming at improving and streamlining expenditure execution procedures including, inter alia, the clarification of roles and prerogatives of persons involved in such procedures, in accordance with guidelines agreed upon between the Borrower and the Bank and with Part B of Schedule 4 to this Agreement. Section 4.06. In order to achieve the objectives of Part A of the Project, the Borrower shall, not later than December 31, 2003, take all measures required on its part, including regulatory measures, to enable the presentation of its annual budget for the year 2004 on the basis of a Multiyear Expenditures Framework, in accordance with guidelines agreed upon between the Borrower and the Bank and with Part B of Schedule 4 to this Agreement. Section 4.07. In order to achieve the objectives of Part A of the Project, the Borrower shall take all measures required on its part, including regulatory measures, to, not later than June 30, 20042003, carry out a review of available options for financing NHA’s investment program on a sustainable basisadopt and implement its New Public Sector Accounting Standards, under terms of reference satisfactory to in accordance with guidelines agreed upon between the Borrower and the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after in respect of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph paragraph (a)(ia) of this Section and including those for the Special Account Accounts for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, including the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account or payment out of the Special Accounts was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the The Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult exchange views with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration prior to any comments and suggestions made by modification to the Bank on such plan Memorandum of Policy or to any of the memoranda of agreement referred to in the course of such consultation; and paragraphs (cd) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i), (d) the treatment of existing stock of NHA debt; and (ii) and (e) of Section 3.01 of this Agreement, that would materially and adversely affect the mode carrying out of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such reviewProject.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) (i) of this Section and Section, including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agreeBy June 30, 1996, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment will cause the Ministry of Environment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment Regional Development to prepare an environmental mitigation and maintenance monitoring plan, giving due consideration to any comments and suggestions made by including an implementation timetable for the Bank on such plan in the course of such consultation; and (c) in particularProject, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity thereafter take all actions necessary to comment on the findings and recommendations of ensure that such reviewplan is carried out.

Financial and Other Covenants. (a) The Borrower shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of Parts B.1 and C of the Project of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) The Borrower shall: (i) have its records, accounts and financial statements (balance sheets, statements of income and expenses and related statements) and the records and accounts for the Special Accounts for each semester audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than two months after the end of each such semester: (A) certified copies of its financial statements for such semester as so audited; and (B) the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; (iii) consolidate the semiannual audit reports for the fiscal year and furnish to the Association as soon as available, but in any case not later than three months after the end of its fiscal year, the said consolidated audit report; and (iv) furnish to the Association such other information concerning such records, accounts and financial statements and the audit thereof as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Credit Account are were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained maintain, in accordance with sound accounting practicesparagraph (a) of this Section, records and separate accounts reflecting such expenditures; (ii) ensure that retain, until at least one year after the Association has received the consolidated audit report for the fiscal year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; andexpenditures; (iii) enable the BankAssociation’s representatives to examine such records.; and (biv) The Borrower shall: (i) have the ensure that such records and accounts are included in the consolidated audit report referred to in paragraph (a)(ib) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year that the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. Section 4.02. (a) Without limitation upon the provisions of Section 4.01 of this Agreement, the Borrower shall carry out a time-bound action plan acceptable to the Association for the strengthening of its financial management system for the Project in order to enable the Borrower, not later than January 1, 2001, or such later date as the Association shall agree, to prepare quarterly Project Management Reports, acceptable to the Association, each of which: (i) (A) sets forth actual sources and applications of funds for the Project, both cumulatively and for the period covered by said report, and projected sources and applications of funds for the Project for the six-month period following the period covered by said report; and (B) shows separately expenditures financed out of the proceeds of the Credit during the period covered by said report and expenditures proposed to be financed out of the proceeds of the Credit during the six-month period following the period covered by said report; (ii) (A) describes physical progress in Project implementation, both cumulatively and for the period covered by said report; and (B) explains variances between the actual and previously forecast implementation targets; and (iii) furnish to sets forth the Bank such other information concerning said records status of procurement under the Project and accounts and expenditures under contracts financed out of the audit thereof proceeds of the Credit, as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning end of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such reviewperiod covered by said report.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) (i) of this Section and those for the Special Account Accounts opened in its name for MI and in the names of SODEFOR and of DCGTx, respectively, for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as availablepracticable, but in any case not later than six months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out SODEFOR shall maintain records and accounts adequate to reflect in accordance with sound accounting practices its investment operations and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Programfinancial condition. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditureThe Borrower shall maintain, the Borrower shall: (i) maintain or cause to be maintained maintained, separate records and accounts and consolidated accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after in respect of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out any part of the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and those for Section, including the Special Account Accounts, for each fiscal year auditedyear, audited in accordance with appropriate auditing principles consistently applied, applied by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year year, a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said accounts and the audit thereof and said records as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, including the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, separate records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such separate accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report thereof contains, in respect of such separate accounts, a separate opinion by said auditors as to whether the statements of expenditure expenditures submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as The Borrower shall cause CUD, CUY and the Bank shall otherwise agreeSecondary Cities to develop and carry out a program of road and drain maintenance satisfactory to the Bank. For this purpose, the Borrower shall ensure thatcause said entities to prepare and furnish, during Project implementationbeginning March 31, NHA will: 1989, and thereafter (a) carry out its a report on municipal finances for the current year, including current and investment expenditures; and maintenance program in compliance with the MTBF; (b) consult with a work plan and draft budget for the Bank on a timely basis each year on its annual following year’s road and drain maintenance work, including current and investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Programexpenditures. Section 4.03. The Borrower shall: , through MINUH: (a) at not later than March 31, 1989, prepare and furnish to the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debtBank for its review and comments its three-year urban investment program; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30by March 31 of each year thereafter, 2004, carry out a review of available options for financing NHA’s update said urban investment program on a sustainable basis, under terms of reference satisfactory and furnish it to the Bank, Bank for its review and provide the Bank with a prior opportunity to comment on the findings and recommendations of such reviewcomments.

Financial and Other Covenants. (a) The Borrower shall maintain or cause to be maintained a financial management system, including records and accounts and prepare financial statements in a format acceptable to the Association, adequate to reflect the operations, resources and expenditures in respect of all parts of the Project (with the exception of Part A.3 of the Project), for which the departments or agencies of the Borrower responsible. (b) The Borrower shall: (i) have the records, accounts and financial statements referred to in paragraph (a) of this Section and the records and accounts for the Special Account for each Fiscal Year audited, in accordance with auditing standards acceptable to the Association, consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than six months after the end of each such year: (A) certified copies of the financial statements referred to in paragraph (a) of this Section for such year as so audited; and (B) an opinion on such statements, records and accounts and report of such audit, by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning such records and accounts, and the audit thereof, and concerning said auditors, as the Association may from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Credit Account are were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained maintained, in accordance with sound accounting practicesparagraph (a) of this Section, records and separate accounts reflecting such expenditures; (ii) ensure that retain, until at least one year after the Association has received the audit report for the fiscal year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; andexpenditures; (iii) enable the BankAssociation’s representatives to examine such records.; and (biv) The Borrower shall: (i) have the ensure that such records and accounts are included in the annual audit referred to in paragraph (a)(ib) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year that the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal yearFiscal Year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as To the Bank shall otherwise agreelimit of its ability pursuant to the Agreement Establishing ATI and the Participation Agreement, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shallcause ATI to: (a) at the beginning of FY2004/05maintain a financial management system, take a decision regarding; (i) the treatment of existing stock of NHA debt; including records and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Programaccounts, and prepare financial statements, all in accordance with a view accounting standards acceptable to making NHA financially sustainable commencing FY 2004/05; andthe Association, consistently applied, adequate to reflect its operations and financial condition and to register separately the operations, resources and expenditures related to the Project; (b) have its records, accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with auditing standards acceptable to those ends and the Association, consistently applied, by independent auditors acceptable to the Association; (c) furnish to the Association as soon as available, but in any case not later than April 30, 2004, carry out a review six months after the end of available options each such year: (A) certified copies of the financial statements referred to in paragraph (a) of this Section for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.year as so audited; and

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Credit Account are were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained maintained, in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank Association has received the audit report for the fiscal year in which the last withdrawal from the Loan Credit Account was made; and (iii) enable the Bank’s representatives to examine such records.; (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) (i) of this Section and those for the Special Account Accounts for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association, as soon as available, but in any case not later than six months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank Association such other information concerning said records and accounts and the audit thereof as the Bank Association shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts expenditures in respect of Parts D and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and E (iii) enable of the Bank’s representatives to examine such recordsProject of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association, as soon as available, but in any case not later than six twelve months after the end of each such year year, a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records, including accounts and the audit thereof as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account for the Project were made on the basis of statements of expenditure, the Borrower shall, and, where appropriate, shall cause NEA to: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Credit Account or payment out of the Special Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except The Borrower shall, in connection with any and all future on-lending by it to NEA, and irrespective of the source of the Borrower’s funds, undertake to duly enter, and cause NEA to duly enter, into such subsidiary loan agreements as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment be required to lawfully and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on accurately document such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Programfuture on-lending transactions. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of hereby undertakes to cause all future NHA funding provided through projects in the Borrower’s annual Public Sector Development power sector that shall be financed solely by the Borrower to be included in the Investment Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after in respect of the Bank has received Project of the audit report departments or agen- cies of the Borrower responsible for carrying out the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph para- graph (a)(ia) of this Section and Section, including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year year, the report of such audit by said auditorsaudi- tors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concern- ing said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, including the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit con- tains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures proce- dures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; cause: (i) each institution included in Parts A and B of the treatment of existing stock of NHA debt; Project and (ii) each entity responsible for carrying out the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development ProgramProject to be operated and managed in accordance with sound admin- istrative, all with a view to making NHA financially sustainable commencing FY 2004/05financial, technical and educational practices; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditureSindh shall maintain a financial management system, the Borrower shall: (i) maintain or cause to be maintained including records and accounts, and prepare financial statements, in accordance with sound consistently applied accounting practicesstandards acceptable to the Association, records adequate to reflect its operations and separate accounts reflecting such expenditures; (ii) ensure that all records (contractsfinancial condition and to register separately the operations, orders, invoices, bills, receipts resources and other documents) evidencing such expenditures are retained until at least one year after related to the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject. (b) The Borrower Sindh shall: (i) have the records its financial statements (statements of income and accounts referred to in paragraph (a)(iexpenses and related statements) of this Section and those for the Special Account for each fiscal year (or such other period agreed to by the Association) audited, in accordance with appropriate consistently applied auditing principles consistently appliedstandards acceptable to the Association, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six months after the end of each such year (or such other period agreed to by the report Association), (A) certified copies of the financial statements referred to in paragraph (a) of this Section, for such audit year (or such other period agreed to by the Association), as so audited, and (B) an opinion on such statements by said auditors, of such in scope and in such detail as satisfactory to the Bank shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawalsAssociation; and (iii) furnish to the Bank Association such other information concerning said such records and accounts and the audit thereof of such financial statements, and concerning said auditors, as the Bank shall Association may from time to time reasonably request. Section 4.02. Except as (a) Without limitation upon Sindh’s reporting obligations set out in, paragraph 16 of Schedule 2 to this Agreement, Sindh shall prepare and furnish to the Bank shall otherwise agreeAssociation a financial monitoring report, in form and substance satisfactory to the Borrower shall ensure thatAssociation, during which: (i) sets forth sources and uses of funds for the Project, both cumulatively and for the period covered by said report, showing separately funds provided under the Credit, and explains variances between the actual and planned uses of such funds; (ii) describes physical progress in Project implementation, NHA will: (a) carry out its investment both cumulatively and maintenance program in compliance with for the MTBF; (b) consult with period covered by said report, and explains variances between the Bank on a timely basis each year on its annual investment actual and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05planned Project implementation; and (iii) sets forth the status of procurement under the Project, as at the end of the period covered by said report. (b) The first FMR shall be furnished to those ends and the Association not later than April 30forty- five (45) days after the end of the first calendar quarter after the Effective Date, 2004and shall cover the period from the incurrence of the first expenditure under the Project through the end of such first calendar quarter; thereafter, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory each FMR shall be furnished to the BankAssociation not later than forty-five (45) days after each subsequent calendar quarter, and provide shall cover the Bank period not covered by the previous FMR until the end of such calendar quarter. Section 3.03. Sindh shall, jointly with a prior opportunity the Association, annually review its uniform policy on capital cost sharing for watercourse improvement adopted on December 20, 2003, and, thereafter, take all measures required to comment ensure the efficient implementation of the said policy and the achievement of the objectives thereof, based on the findings conclusions and recommendations of such reviewthe said review and the Association’s views on the matter.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditureThe Borrower shall maintain, the Borrower shall: (i) maintain or cause DNE to be maintained in accordance with sound accounting practicesmaintain, a financial management system, including records and separate accounts reflecting such expenditures; (ii) ensure that all records (contractsaccounts, ordersand prepare financial statements in a format acceptable to the Association, invoicesadequate to reflect the operations, bills, receipts resources and other documents) evidencing such expenditures are retained until at least one year after related to Part B and G.1 of the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject. (b) The Borrower shall: (i) have the records records, accounts and accounts financial statements referred to in paragraph (a)(ia) of this Section and those the records and accounts for the Special Account for each fiscal year Fiscal Year audited, in accordance with appropriate auditing principles standards acceptable to the Association, consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of the financial statements referred to in paragraph (a) of this Section for such year the as so audited, and (B) an opinion on such statements, records and accounts and report of such audit audit, by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning such records and accounts, including and the audit thereof, and concerning said auditors, as the Association may from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain, or cause to be maintained, in accordance with paragraph (a) of this Section, records and separate accounts reflecting such expenditures; (ii) retain, until at least one year after the Association has received the audit report for the fiscal year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal yearFiscal Year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. Section 4.02. (a) Without limitation upon the provisions of Section 4.01 of this Agreement, and the Borrower’s progress reporting obligations set out in paragraph 2 (b) and 3 (b) of Schedule 4 to this Agreement, the Borrower shall prepare and furnish to the Association a Financial Monitoring Report, in form and substance satisfactory to the Association, which: (i) sets forth sources and uses of funds for the Project, both cumulatively and for the period covered by said report, and projected sources and applications of funds for the Project for the six-month period following the period covered by said report; (ii) describes physical progress in Project implementation, both cumulatively and for the period covered by said report, and explains variances between the actual and planned implementation targets; and (iii) furnish to sets forth the Bank such other information concerning said records and accounts and status of procurement under the audit thereof Project as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning end of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such reviewperiod covered by said report.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) , at all times, maintain or cause to be maintained in accordance with sound accounting practicesa financial management system, including records and separate accounts reflecting such expenditures; (ii) ensure that all records (contractsaccounts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year prepare financial statements in which the last withdrawal from the Loan Account was made; and (iii) enable a format acceptable to the Bank’s representatives , adequate to examine such recordsreflect the operations, resources and expenditures related to the Project. (b) The Borrower shall: (i) have the records records, accounts and accounts financial statements referred to in paragraph (a)(ia) of this Section and those the records and accounts for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles standards acceptable to the Bank, consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six (6) months after the end of each such year: (A) certified copies of the financial statements referred to in paragraph (a) of this Section for such year the as so audited, and (B) an opinion on such statements, records and accounts and report of such audit audit, by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning such records and accounts, including and the audit thereof, and concerning said auditors, as the Bank may from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and separate accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. Section 4.02. (a) Without limitation upon the provisions of Section 4.01 of this Agreement, the Borrower shall carry out a time-bound action plan acceptable to the Bank for the strengthening of the financial management system referred to in paragraph (a) of said Section 4.01 in order to enable the Borrower, not later than June 30, 2002, or such later date as the Bank shall agree, to prepare semi-annual Project Management Reports, acceptable to the Bank, each of which: (i) (A) sets forth actual sources and applications of funds for the Project for the period covered by said report, and (B) shows separately expenditures financed out of the proceeds of the Loan during the period covered by said report; (ii) describes physical progress in the implementation of the Project for the period covered by said report; and (iii) sets forth the status of procurement under the Project and expenditures under contracts financed out of the proceeds of the Loan, as at the end of the period covered by said report. (b) Upon the completion of the action plan referred to in paragraph (a) of this Section, the Borrower shall prepare, in accordance with guidelines acceptable to the Bank, and furnish to the Bank not later than 45 days after the end of each calendar semester a semi-annual Project Management Report for such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Programperiod. Section 4.03. The In order to achieve the objectives of Part B.1 of the Project, the Borrower shall: , not later than June 30, 2003: (a) at the beginning submit to its Chamber of FY2004/05Representatives a draft law, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference in substance satisfactory to the Bank, for the establishment of a single agricultural research institute; and provide (b) take all measures required on its part, including regulatory measures, to revise the Bank with a prior opportunity mandate of IRESA accordingly. Section 4.04. In order to comment achieve the objectives of Part C of the Project, the Borrower shall take all measures required on its part, satisfactory to the findings Bank, including regulatory measures, to, not later than June 30, 2002, grant adequate administrative and recommendations of such reviewfinancial management flexibility to IRVT laboratories.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts expenditures in respect of Parts B and other documents) evidencing such expenditures are retained until at least one year after C.1 of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for the fiscal year in which the last withdrawal from the Loan Account was made; carrying out Parts B and (iii) enable C.1 of the Bank’s representatives to examine such recordsProject. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and Section, including those for the Special Account Accounts, audited for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAdministrator; (ii) furnish to the Bank Administrator, as soon as available, but in any case not later than six months after the end of each such year year, the report reports of such audit by said auditors, of such scope and in such detail as the Bank Administrator shall have reasonably requested; and (iii) furnish to the Administrator such other information concerning said records, including accounts and the audit thereof as the Administrator shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Interim Fund Credit Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Administrator has received the audit report for the fiscal year in which the last withdrawal from the Interim Fund Credit Account or payment out of a Special Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Administrator's representatives to examine such records, and (iii) ensure that such records and accounts be included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contain a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as The Borrower and the Bank shall otherwise agreeAdministrator shall, from time to time, at the Borrower shall ensure thatrequest of either party, during Project implementation, NHA will: (a) carry out exchange views with regard to the Borrower’s water pricing policies and its investment and maintenance program plans in compliance with respect of the MTBF; (b) consult with overall development of the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Programwater sector. Section 4.03. The Borrower shall: shall take all measures required on its part to enable: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view SONEG to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basisits obligations set forth in Sections 4.03, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.4.04 and

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditureThe Borrower shall establish and maintain a financial management system, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, including records and separate accounts reflecting such expenditures; (ii) ensure that all records (contractsaccounts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year prepare financial statements in which the last withdrawal from the Loan Account was made; and (iii) enable a format acceptable to the Bank’s representatives , adequate to examine such recordsreflect the operations, resources and expenditures for and in connection with the carrying out of the Project. (b) The Borrower shall: (i) have the records records, accounts and accounts financial statements referred to in paragraph (a)(ia) of this Section and those the records and accounts for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles standards acceptable to the Bank consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of the financial statements referred to in paragraph (a) of this Section for such year the as so audited, and (B) an opinion on such financial statements, records and accounts and a report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning such records and accounts and the audit thereof, including and concerning said auditors, as the Bank may from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain, or cause to be maintained, in accordance with paragraph (a) of this Section, records and separate accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such each fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) Each Borrower shall maintain records and accounts adequate to reflect in accordance with sound accounting practices its operations and financial condition. (b) Each Borrower shall: (i) have its records, accounts and financial statements (balance sheets, statements of income and expenses and related statements) and the records and accounts for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by the Social Accounting Service or another competent and experienced independent auditing organization acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than nine months after the end of each such year (A) certified copies of its financial statements for such year as so audited, and (B) the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records, accounts and financial statements as well as the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account are were made on the basis of statements of expenditure, the each Borrower shall: (i) maintain or cause to be maintained maintain, in accordance with sound accounting practicesparagraph (a) of this Section, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contractsretain, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records.; and (biv) The Borrower shall: (i) have the ensure that such records and accounts are included in the annual audit referred to in paragraph (a)(ib) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year that the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. Section 5.02. Without limitation upon the provisions of Section 5.01 of this Agreement, each Borrower shall, not later than March 15 and September 15 of each year, furnish a report to the Bank prepared in a format satisfactory to the Bank, on the financial performance of the Borrower during the previous calendar semester. Section 5.03. Each Borrower shall: (a) not later than December 31, 1992, carry out, on the basis of terms of reference satisfactory to the Bank, a study on its tariff structure; (b) not later than March 31, 1993, consult with the Bank on the findings and recommendations of such study; and (iiic) promptly thereafter, take all measures necessary to obtain approval of the agreed recommendations of such study and put into effect a revised tariff structure. (a) Except as the Bank shall otherwise agree, each Borrower shall maintain, for each of its fiscal years after its fiscal year ending in 1988, a ratio of total operating expenses to total operating revenues not higher than eighty percent (80%). (b) Before March 15 in each of its fiscal years, each Borrower shall, on the basis of forecasts prepared by each Borrower and satisfactory to the Bank, ascertain whether it would meet the requirements set forth in paragraph (a) in respect of such year and the next following fiscal year, and shall furnish to the Bank the results of such review upon its completion. (c) If any such review shows that the Borrower would not meet the requirements set forth in paragraph (a) for the Borrower’s fiscal years covered by such review, the Borrower shall promptly take all necessary measures (including, without limitation, adjustments of the structure or levels of its tariffs) in order to meet such requirements. (d) For the purposes of this Section: (i) The term "total operating expenses" means all expenses related to operations, including administration, adequate maintenance, taxes and payments in lieu of taxes, and provision for depreciation on a straight-line basis at a rate of not less than 2 5% per annum of the average current gross value of the Borrower’s fixed assets in operation, or other information concerning said records basis acceptable to the Bank, but excluding interest and accounts other charges on debt. (ii) The term "total operating revenues" means revenues from all sources related to operations. (iii) The average current gross value of the Borrower’s fixed assets in operation shall be calculated as one half of the sum of the gross value of the Borrower’s fixed assets in operation at the beginning and at the audit thereof end of the fiscal year, as the Bank shall valued from time to time reasonably requestin accordance with sound and consistently maintained methods of valuation sati- sfactory to the Bank. Section 4.025.05. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at Istrian Water Works shall exclude from its investment program for any fiscal year capital expenditures (excluding expenditures for the beginning Project) that would cause its average annual expenditures from 1989 to the fiscal year in question to exceed the equivalent of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05$2,500,000; and (b) Pula Water Works shall exclude from its investment program for any fiscal year capital expenditures (excluding expenditures for the Project) that would cause its average annual expenditures from 1989 to those ends and the fiscal year in question to exceed the equivalent of $2,000,000. Section 5.06. Pula Water Works shall, not later than April 30December 31, 20041994, carry out an action plan, on the basis of a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference format and schedule satisfactory to the Bank, to reduce the level of unaccounted-for water. Section 5.07. Without limitation upon the provisions of Section 9.07 of the General Conditions, the Borrowers shall, in conjunction with Butoniga Water Works, not later than March 15 and provide September 15 of each year, furnish to the Bank with a prior opportunity report, prepared in a manner satisfactory to comment the Bank, on progress in implementation of the findings and recommendations of such reviewProject during the preceding calendar semester.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditureThe Borrower shall maintain a financial management system, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, including records and separate accounts reflecting such expenditures; (ii) ensure that all records (contractsaccounts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year prepare financial statements in which the last withdrawal from the Loan Account was made; and (iii) enable a format acceptable to the Bank’s representatives , adequate to examine such recordsreflect the operations, resources and expenditures for and in connection with the carrying out of the Project. (b) The Borrower shall: (i) have the records records, accounts and accounts financial statements referred to in paragraph (a)(ia) of this Section and those the records and accounts for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles standards acceptable to the Bank consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of the financial statements referred to in paragraph (a) of this Section for such year the as so audited, and (B) an opinion of such financial statements, records and accounts and a report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning such records and accounts and the audit thereof, including and concerning said auditors, as the Bank may from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and separate accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the The Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on in respect of any proposal to modify its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the Ten-Year National Highway Improvement Early Childhood Development Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts (including the Special Accounts, the FMOH Project Accounts and the Federal Drug Revolving Fund Account) reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph paragraph (a)(ia) (i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after in respect of Part D of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, including the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Borrower and the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; by December 31 each year commencing in 1996: (i) review with the treatment Bank: (A) its current power sector development program, (B) the least cost planning analysis and parameters, including the planning power generating capacity reserve margin used to formulate the said program; (C) the realized power generating capacity reserve margin; (D) the roles of existing stock of NHA debtPLN, PLN’s Subsidiaries and the private sector in the said program; and (E) the transparency and appropriateness of the business environment for private power participation; and (ii) review with the mode of all future NHA funding provided through Bank and PLN, PLN’s and PLN’s Subsidiaries’ consolidated current development and investment programs with respect to: (A) their consistency with the Borrower’s annual Public Sector Development Programpower sector development program; (B) the balance among generation, all with a view to making NHA financially sustainable commencing FY 2004/05transmission and distribution investments; and (C) the balanced development of regions; and (b) ensure that PLN and PLN’s Subsidiaries have access to those ends sufficient funds to finance capital expenditures for their consolidated development and not later than April investment programs pursuant to the said reviews. For purposes of this Section, the term "power generating capa-city reserve margin" means the difference between the total ins-talled power generating capacity and the highest load reached by the system in the fiscal year ("peak load") divided by the peak load. (a) The Borrower shall: (i) by June 30, 20041996, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory furnish to the Bank, for its review and provide comments, draft rules and procedures to govern private sector participation in the Bank with a prior opportunity to comment on power sector, including the findings solicitation and recommendations evaluation of such review.all forms of proposals for private sector power supply; and

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Credit Account are were made on the basis of statements of expenditure, the Borrower shall: (i) maintain maintain, or cause to be maintained maintained, in accordance with sound accounting practicesparagraph (a) of this Section, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank Association has received the audit report for the fiscal year in which the last withdrawal from the Loan Credit Account, or payment out of the Special Account was made; and (iii) enable the BankAssociation’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) (i) of this Section and Section, including those for the Special Account for each fiscal year Account, audited, in accordance with appropriate appro- priate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as availablepossible, but in any case not later than six (6) months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank Association such other information concerning said records and accounts and the audit thereof as the Bank Association shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the The Borrower shall ensure that, during Project implementation, NHA willshall: (a) carry out not later than December 31, 1997, ensure that all arrears due to EDM from its investment ministries and maintenance program in compliance with other agencies, are reduced to not more than the MTBFamount billed for the previous three months, and maintain such arrears at not more than that level thereafter; and (b) consult with the Bank on a timely basis each year take all action necessary on its annual investment and maintenance plan, giving due consideration part to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement ProgramEDM Financial Restructuring Plan. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) (i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six four months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect CIB shall maintain procedures and records adequate to which withdrawals from monitor and report the Loan Account are made on progress of the basis Project and of statements of expenditure, each Investment Project (including its cost and the Borrower shall: (i) maintain or cause benefits to be maintained derived from it) and to reflect in accordance with consistently maintained sound accounting practices, records practices and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts operations and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsfinancial condition of CIB. (b) The Borrower CIB shall: (i) have the records its records, accounts and accounts referred to in paragraph financial statements (a)(ibalance sheets, statements of income and expenses and related statements) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank Bank, as soon as available, available but in any case not later than six months after the end of each such year, (A) certified copies of its financial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and records, accounts and financial statements as well as the audit thereof as the Bank shall from time to time reasonably request. Section 4.023.02. Except as the Bank shall otherwise agree, CIB shall not incur or permit any Subsidiary to incur any debt if, after the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course incurrence of such consultation; debt, the aggregate principal amount of the consolidated debt of CIB and (c) in particular, fully implement all its Subsidiaries then incurred and outstanding would be greater than five times the National Highway Improvement Program. Section 4.03consolidated capital and surplus of CIB and all its Subsidiaries. The Borrower shallFor this Section: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after of the Bank has received departments or agencies of the audit report Borrower responsible for carrying out the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall, with the appropriate assistance of the Privatization Center as shall have been set forth in the Subsidiary Project Management Arrangements: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, including the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain or cause to be retained, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account or payment out of the Special Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) ensure access by the Bank’s representatives to the appropriate facilities for purposes of examining such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) The Borrower shall maintain a financial management system, including records and accounts, and prepare financial statements, in a format acceptable to the Association, adequate to reflect its operations and financial condition and to register separately the operations related to the Project. (b) The Borrower shall: (i) have the records, accounts and financial statements referred to in paragraph (a) of this Section and the records and accounts for the Special Account for each Fiscal Year audited, in accordance with auditing standards acceptable to the Association, consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than four (4) months after the end of each such year, (A) certified copies of its financial statements referred to in paragraph (a) above for such year as so audited, and (B) an opinion on such statements, records and accounts and a report of such audit, by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning such records, accounts and financial statements, and the audit thereof, and concerning said auditors, as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Credit Account are were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained maintained, in accordance with sound accounting practicesparagraph (a) of this Section, records and separate accounts reflecting such expenditures; (ii) ensure that retain, until at least one (1) year after the Association has received the audit report for the fiscal year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; andexpenditures; (iii) enable the BankAssociation’s representatives to examine such records.; and (biv) The Borrower shall: (i) have the ensure that such records and accounts are included in the annual audit referred to in paragraph (a)(ib) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year that the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. (a) Without limitation upon the Borrower’s progress reporting obligations set out in Schedule 4 to this Agreement, the Borrower shall prepare and furnish to the Association a Financial Monitoring Report, in form and substance satisfactory to the Association, which: (i) sets forth sources and uses of funds for the Project, both cumulatively and for the period covered by said report, showing separately funds provided under the Credit, and explains variances between the actual and planned uses of such funds; (ii) describes physical progress in Project implementation, both cumulatively and for the period covered by said report, and explains variances between the actual and planned Project implementation; and (iii) furnish to sets forth the Bank such other information concerning said records and accounts and status of procurement under the audit thereof Project, as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning end of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; andperiod covered by said report. (b) The first Financial Monitoring Report shall be furnished to those ends and the Association not later than April 30forty five (45) days after the end of the first calendar semester after the Effective Date, 2004and shall cover the period from the incurrence of the first expenditure under the Project through the end of such first calendar semester; thereafter, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory each Financial Monitoring Report shall be furnished to the BankAssociation not later than forty five (45) days after each subsequent calendar semester, and provide the Bank with a prior opportunity to comment on the findings and recommendations of shall cover such reviewcalendar semester.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after in respect of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association, as soon as available, but in any case not later than six nine months after the end of each such year year, a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records, including accounts and the audit thereof as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Association has received the audit report for the fiscal year in which the last withdrawal from the Credit Account or payment out of the Special Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30October 31 of each year, 2004commencing in calendar year 1994, carry out a review of available options exchange views with the Association annually on Viet Nam’s development strategy for financing NHA’s investment program on a sustainable basisthe transport sector, under terms of reference satisfactory to the Bank, including planned investments and provide the Bank with a prior opportunity to comment on the findings and recommendations of such reviewrelated policies.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after in respect of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and Section, including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, including the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account or payment out of the Special Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and. (iiia) furnish to During each year of execution of the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agreeProject, the Borrower shall ensure thattake all necessary measures to make available the funds in accordance with the core road expenditure program, during Project implementationas agreed with the Bank, NHA will: for the purpose of maintenance, repair and rehabilitation works and debt servicing. (b) By January 15 of each year of execution of the Project, the Borrower shall provide to the Bank its total expenditure and financing plan for the road sector for that year after the Bank has been provided a reasonable opportunity to comment on the draft of such plan. (c) During execution of the Project, no activity estimated to cost the equivalent of US$5 million or more shall be initiated by the Borrower under the total expenditure and financing plan for the road sector, which is not part of the core road expenditure program referred to in paragraph (a) carry out its investment and maintenance program in compliance with of this Section, unless the MTBF; (b) consult with Borrower shall establish that it will yield an economic rate of return of at least 12% or the Bank on a timely basis agreed otherwise. (d) During the execution of the Project, the Borrower undertakes to regularly review road user charges and take necessary measures in order to ensure that receipts from each year on its annual investment and maintenance plan, giving due consideration vehicle class reflect at least the road cost attributable to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Programthat vehicle class. Section 4.03. The During 1993 the Borrower shall have 15% of the aggregate surface dressing work carried out by contractors whose contracts have been awarded on the basis of competitive bidding procedures; such percentage to be increased to 25% during 1994 and 40% during 1995 and each year thereafter during execution of the Project. Section 4.04. By December 31, 1993, the Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; through MTCWM, complete and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory provide to the Bank, Bank a strategic medium- and provide the Bank with a prior opportunity to comment on the findings and recommendations of such reviewlong-term plan for road maintenance.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts expenditures in respect of the Project of the departments or agencies of the Borrower and other documents) evidencing such expenditures are retained until at least one year after of the Bank has received respective Project Provinces responsible for carrying out the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association, as soon as available, but in any case not later than six months after the end of each such year year, a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records, including accounts and the audit thereof as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Association has received the audit report for the fiscal year in which the last withdrawal from the Credit Account or payment out of the Special Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at implement the beginning Resettlement Plan in a manner acceptable to the Association; (b) ensure that the xxxxxx dam constructed under the Xiaolangdi Multipurpose Project is not closed unless the resettlement program under the Resettlement Plan remains synchronized with the construction program under Part A of FY2004/05the Xiaolangdi Multipurpose Project and, take a decision regarding; (i) to that end, if construction of the treatment dam is progressing faster than the rate of existing stock of NHA debt; construction progress anticipated in the Resettlement Plan by four months or more, the Borrower shall make revisions in the schedules for resettlement and (ii) construction, satisfactory to the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05Association; and (bc) ensure that the water level of the dam constructed under the Xiaolangdi Multipurpose Project is not permitted to rise beyond 265 meters before the details of the resettlement arrangements proposed for those who are to be resettled in the last stage (between the year 2010-2011) under the Resettlement Plan have been provided to, and approved by, the Association. Section 4.03. The Borrower (acting through MWR) shall: (a) establish by December 31, 2000 and thereafter maintain a Reservoir Area Support Fund in an amount which is sufficient to provide minimum incomes to those ends and not later than April 30who are resettled under the Project, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to or whose incomes or livelihood are adversely affected by the BankProject, and provide the Bank with a prior opportunity who are unable to comment on the findings and recommendations of such review.achieve or to maintain their pre-Project income levels; and

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained main- tained separate records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after expendi- tures in respect of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph paragraph (a)(ia) of this Section and including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six (6) months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, including the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, or cause to be retained until at least one (1) year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account or payment out of the Special Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expendi- tures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure thatshall, during Project implementationthrough the Apex Unit, NHA will: (a) carry out its investment and maintenance program in compliance with respect of repayments of principal of the MTBF; (b) consult with portions of the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan Subsidiary Finances utilized in the course making of such consultation; Sub-loans under Parts A and (c) in particular, fully implement B of the National Highway Improvement Program. Section 4.03. The Borrower shallProject: (a) at open, by the beginning of FY2004/05date on which it shall receive the first such repayment, take and, thereafter, maintain, in a decision regarding; (i) bank, acceptable to the treatment of existing stock of NHA debt; Bank, a separate account on terms and (ii) conditions satisfactory to the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05Bank; and (b) to those ends and not later than April 30upon receipt of each such repayment, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory credit the same to the Banksaid separate account. All amounts to be so credited shall be utilized, to the extent they are not yet required to meet the Borrower’s repay- ment obligations under this Agreement, exclusively to finance, through the PFIs, specific projects on similar terms and provide conditions as those applicable to the Bank with a prior opportunity to comment on the findings and recommendations of such reviewSub-loans.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the Borrower shall: (i) The Recipient shall establish and maintain or cause to be established and maintained a financial management system, including records and accounts, and prepare financial statements in accordance with sound consistently applied accounting practicesstandards acceptable to the Association, records adequate to reflect the operations, resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts expenditures related to Parts A and other documents) evidencing such expenditures are retained until at least one year after C of the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject. (b) The Borrower Recipient shall: (i) have the records and accounts financial statements referred to in paragraph (a)(ia) of this Section and those for the Special Account for each fiscal year Fiscal Year (or other period agreed to by the Association), commencing with the Fiscal Year in which the first withdrawal under the Project Preparation Advance was made, audited, in accordance with appropriate consistently applied auditing principles consistently appliedstandards acceptable to the Association, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six months after the end of each such year (or such other period agreed to by the report Association): (A) certified copies of the financial statements referred to in paragraph (a) of this Section for such audit year (or other period agreed to by the Association) as so audited; and (B) an opinion on such statements by said auditors, of such in scope and in such detail as satisfactory to the Bank shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawalsAssociation; and (iii) furnish to the Bank Association such other information concerning said such records and accounts accounts, and the audit thereof of such financial statements, and concerning said auditors, as the Bank shall Association may from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particularFor all expenditures with respect to which withdrawals from the Grant Account were made on the basis of statements of expenditure, fully implement the National Highway Improvement Program. Section 4.03. The Borrower Recipient shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) retain, until at least one year after the treatment of existing stock of NHA debt; Association has received the audit report for, or covering, the Fiscal Year in which the last withdrawal from the Grant Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (ii) enable the mode of all future NHA funding provided through the BorrowerAssociation’s annual Public Sector Development Program, all with a view representatives to making NHA financially sustainable commencing FY 2004/05examine such records; and (iii) ensure that such statements of expenditure are included in the audit for each Fiscal Year (or other period agreed to by the Association), referred to in paragraph (b) of this Section. (a) Without limitation upon the Recipient’s progress reporting obligations set out in Section III of Schedule 4 to those ends this Agreement, the Recipient shall prepare and furnish to the Association a Financial Monitoring Report, in form and substance satisfactory to the Association, which: (i) sets forth sources and uses of funds for Parts A and C of the Project, both cumulatively and for the period covered by said report, showing separately funds provided under the Grant, and explains variances between the actual and planned uses of such funds; (ii) describes physical progress in implementation of Parts A and C of the Project, both cumulatively and for the period covered by said report, and explains variances between the actual and planned implementation of Parts A and C of the Project; and (iii) sets forth the status of procurement under Parts A and C of the Project, as at the end of the period covered by said report. The first FMR shall be furnished to the Association not later than April 3045 days after the end of the first calendar quarter after the Effective Date, 2004and shall cover the period from the incurrence of the first expenditure under the Project through the end of such calendar quarter; thereafter, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory each FMR shall be furnished to the BankAssociation not later than 45 days after each subsequent calendar quarter, and provide the Bank with a prior opportunity to comment on the findings and recommendations of shall cover such reviewcalendar quarter.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after in respect of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association, as soon as available, but in any case not later than six months after the end of each such year year, a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records, including accounts and the audit thereof as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Association has received the audit report for the fiscal year in which the last withdrawal from the Credit Account or payment out of the Special Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association’s representatives to examine such records; and (iv) ensure that such records and accounts are included inthe annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at The Borrower shall update its three-year public investment program in the beginning health sector on the basis of FY2004/05the policy priorities and strategies of the Program and, take a decision regarding; (i) not later than December 31, 1996, xxxxxxx said updated public investment program to the treatment of existing stock of NHA debt; Association for its review and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05comments; and (b) until the completion of the Project, the Borrower shall: (i) each year update said public investment program for the following calendar year; (ii) by October 1 of each year, xxxxxxx said program to those ends the Association for its review; and not later than April 30(iii) promptly thereafter, 2004, adopt and carry out a review said program, taking due account of available options for financing NHAthe Association’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such reviewcomments thereon.

Financial and Other Covenants. (a) For all expenditures with respect The Borrower shall maintain records and accounts adequate to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained reflect in accordance with sound accounting practices, records practices its operations and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsfinancial condition. (b) The Borrower shall: (i) have its records, accounts and financial statements (balance sheets, statements of income and expenses and related statements) and the records and accounts referred to in paragraph (a)(i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year: (A) certified copies of its financial statements for such year as so audited; and (B) the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records, including accounts and financial statements as well as the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and. (iiia) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure thatproduce, during Project implementationfor each of its fiscal years after its fiscal year 1994, NHA will: (a) carry out its investment and maintenance program in compliance with funds from internal sources equivalent to no less than 30% of the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course average of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Programcapital expenditures incurred, all with a view or expected to making NHA financially sustainable commencing FY 2004/05; andbe incurred, for that year, the previous fiscal year and the next following year. (b) to those ends Before October 31 in each of its fiscal years, the Borrower shall, on the basis of forecasts prepared by the Borrower and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, review whether it would meet the requirements set forth in paragraph (a) in respect of such year and provide the next following fiscal year and shall furnish to the Bank with a prior opportunity to comment on the findings and recommendations copy of such review upon its completion. (c) If any such review shows that the Borrower would not meet the requirements set forth in paragraph (a) for the Borrower’s fiscal years covered by such review, the Borrower shall promptly take all necessary measures in order to meet such requirements. (d) For the purposes of this Section: (i) The term "funds from internal sources" means the difference between: (A) the sum of revenues from all sources related to operations, consumer deposits and consumer contributions in aid of construction, net non-operating income and any reduction in working capital other than cash; and (B) the sum of all expenses related to operations, including administration, adequate maintenance and taxes and payments in lieu of taxes (excluding provision for depreciation and other non-cash operating charges), debt service requirements, all cash dividends and other cash distributions of surplus, increase in working capital other than cash and other cash outflows other than capital expenditures. (ii) The term "net non-operating income" means the difference between: (A) revenues from all sources other than those related to operations; and (B) expenses, including taxes and payments in lieu of taxes, incurred in the generation of revenues in (A) above. (iii) The term "working capital other than cash" means the difference between current assets excluding cash and current liabilities at the end of each fiscal year. (iv) The term "current assets excluding cash" means all assets other than cash which could in the ordinary course of business be converted into cash within twelve months, including accounts receivable, marketable securities, inventories and pre-paid expenses properly chargeable to operating expenses within the next fiscal year. (v) The term "current liabilities" means all liabilities which will become due and payable or could under circumstances then existing be called for payment within twelve months, including accounts payable, customer advances, debt service requirements, taxes and payments in lieu of taxes, and dividends. (vi) The term "debt service requirements" means the aggregate amount of repayments (including sinking fund payments, if any) of, and interest and other charges on, debt.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) (i) of this Section and those for the Special Account Accounts for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as The Borrower shall, from time to time, at the Bank shall otherwise agreerequest of any one of them, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult exchange views with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment CIB on the findings interest rates to be charged by CIB in its lending operations in light of CIB’s cost of funds and recommendations of such reviewprofitability and interest and inflation rates in China and internationally.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Credit Account are were made on the basis of statements of expenditureexpenditures, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank Association has received the audit report for the fiscal year in which the last withdrawal from the Loan Credit Account was made; and (iii) enable the BankAssociation’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six (6) months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank Association such other information concerning said records and accounts and the audit thereof as the Bank Association shall from time to time reasonably request. Section 4.02. Except as In order to facilitate the Bank shall otherwise agreeachievement of the Borrower’s objective of eliminating iodine deficiency disorders by the year 2000, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; carry out NIDDEP with due diligence and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; andefficiency; (b) maintain policies and procedures adequate to those ends enable it to monitor and not later than April 30evaluate on an ongoing basis, 2004in accordance with indicators acceptable to the Association, carry the carrying out a review of available options for financing NHA’s investment program on a sustainable basisNIDDEP and the achievement of the objectives thereof; (c) prepare, under terms of reference satisfactory acceptable to the BankAssociation, and provide furnish to the Bank with Association on or about March 15 in each fiscal year, commencing March 15, 1996, a prior opportunity report integrating the results of the monitoring and evaluation activities performed pursuant to comment paragraph (b) of this Section, on the findings progress achieved in the carrying out of NIDDEP during the twelve months preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of NIDDEP and the achievement of the objectives thereof during the twelve months following such date; and (d) review with the Association on or about June 30 in each fiscal year, commencing June 30, 1996, each report referred to in paragraph (c) of this Section, and promptly take all measures required to ensure the efficient carrying out of NIDDEP during the following twelve month period and the achievement of the objectives thereof, based on the conclusions and recommendations of such reviewsaid report and the Association’s views on the matter.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after in respect of Part A of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out Part A of the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any subpart thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, including the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account or payment out of the Special Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agreeIn accordance with its policy to rationalize domestic energy prices, the Borrower shall ensure thatcontinue to maintain the producer prices, during Project implementation, NHA will: (a) carry out its investment as calculated and maintenance program established in compliance accordance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment criteria and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference guidelines satisfactory to the Bank, and provide of locally produced: (a) crude oil at levels equivalent to the Bank with a prior opportunity to comment on the findings and recommendations average FOB price level of such review.similar quality crude oil; and

Financial and Other Covenants. (a) For ADS shall establish and thereafter at all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expendituretimes maintain a financial management system, the Borrower shall: (i) maintain or cause to be maintained including records and accounts, and prepare financial statements, all in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable standards acceptable to the Bank’s representatives , consistently applied, adequate to examine such recordsreflect its operations and financial condition and to register separately the operations, resources and expenditures for and in connection with the carrying out of the Project. (b) The Borrower ADS shall: (i) have its records, accounts and financial statements, and the records and accounts referred to in paragraph (a)(i) of this Section and those for the Special Account for each fiscal year Fiscal Year audited, in accordance with appropriate auditing principles standards acceptable to the Bank, consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six (6) months after the end of each such year, (A) certified copies of its financial statements referred to in Paragraph (a) above for such year the as so audited, and (B) an opinion on such statements and a report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records such records, accounts and accounts financial statements, and the audit thereof thereof, and concerning said auditors, as the Bank shall from time to time reasonably request. (a) Without limitation upon the provisions of Section 4.02. Except 3.01 of this Agreement, ADS shall carry out a time-bound action plan, acceptable to the Bank, for strengthening the financial management system referred to in Paragraph (a) of said Section 3.01 in order to enable ADS, not later than six (6) months after the effectiveness of this Agreement, or such later date as the Bank shall otherwise agree, to prepare semi-annually a Financial Monitoring Report (the Borrower shall ensure thatFinancial Monitoring Report), as agreed with the Bank, each of which: (i) (A) sets forth actual sources and applications of funds for the Project, both cumulatively and for the period covered by said report, and projected sources and applications of funds for the Project for the six-month period following the period covered by said report, and (B) shows separately expenditures financed out of the proceeds of the Credit during the period covered by said report and expenditures proposed to be financed out of the proceeds of the Credit during the six-month period following the period covered by said report; (ii) (A) describes physical progress in Project implementation, NHA will: (a) carry out its investment both cumulatively and maintenance program in compliance with for the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance planperiod covered by said report, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (cB) in particular, fully implement explains variances between the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; actual and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05previously forecast implementation targets; and (iii) sets forth the status of procurement and Partnership Agreements under the Project, and expenditures, contracts and Partnership Agreements financed out of the proceeds of the Loan, as at the end of the period covered by said report. (b) Upon the completion of the action plan referred to those ends in paragraph (a) of this Section, ADS shall prepare, in accordance with guidelines acceptable to the bank, and furnish to the Bank not later than April 30, 2004, carry out forty-five (45) days after the end of each six (6) months period a review of available options Financial Monitoring Report for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such reviewperiod.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after in respect of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any Part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and including those for the Special Account Accounts for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six four months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records and accounts and the audit thereof as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditure, including the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Association has received the audit report for the fiscal year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association’s representatives to examine such records; (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iiiv) furnish to the Bank Association such other information concerning said records and accounts and the audit thereof as the Bank Association shall from time to time reasonably request. Section 4.02. Except as Section 4.02. (a) Without limitation upon the Bank shall otherwise agreeprovisions of Section 4.01 of this Agreement, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with a time-bound action plan acceptable to the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; Association designed to: (i) strengthen its financial management system for the treatment of existing stock of NHA debtProject; and (ii) develop, no later than twenty-four months following the mode Effective Date, or such later date as the Association shall agree, a system acceptable to the Association for the preparation of all future NHA funding provided through three separate Project Management Reports at each quarter as follows: (i) the Borrower’s annual Public Sector Development Programfinancial management report setting forth actual sources and applications of funds for the Project, all with a view to making NHA financially sustainable commencing FY 2004/05both cumulatively and for the period covered by said report, and projected sources and applications of funds (work program and budget) for the Project for the six-month period following the period covered by said report; (ii) the physical Project implementation report describing physical progress in Project implementation, both cumulatively and for the period covered by said report, and explains variances between the actual and previously forecast implementation targets; and (biii) to those ends the Project procurement report setting forth the status of procurement under the Project and not later than April 30expenditures under contracts financed out of the proceeds of the Credit, 2004, carry out a review as at the end of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such reviewperiod covered by said report.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) (i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as The Borrower shall at all times maintain a policy environment satisfactory to the Bank shall otherwise agreeand conducive to the growth of an efficient and internationally competitive cement industry. To this end, the Borrower shall ensure thatcontinue to review and modify, during Project implementationas necessary, NHA will: (a) carry out its investment the relevant policies, insofar as these pertain to the cement sub-sector, and maintenance program in compliance with the MTBF; (b) consult with shall give the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior reasonable opportunity to comment on the findings and recommendations of such reviewin connection therewith.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) (i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the The Borrower shall ensure thattake or cause to be taken all actions, during Project implementationincluding the provisions of funds, NHA will: (a) carry out its investment facilities, services and maintenance program other resources, necessary or appropriate for the construction of the connection between Yangjia and Baijiazhai in compliance Henan Province in accordance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment standards and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory specifications acceptable to the Bank, and provide such construction to be completed no later than December 31, 1999, or such other date as the Bank may establish, in accordance with a prior opportunity to comment on the findings construction schedule of the High-grade Highway between Weinan and recommendations Tongguan in Shaanxi Province under Part A (1) of such reviewthe Project.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained maintained, in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) (i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles princi- ples consistently applied, by independent auditors audi- tors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted submit- xxx during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning con- cerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditureThe Recipient shall maintain, the Borrower shall: (i) maintain or cause the ANPE to be maintained maintain, records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after in respect of the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject. (b) The Borrower shallRecipient: (i) have shall have, or cause ANPE to have, the records and accounts referred to in paragraph (a)(ia) of this Section and Section, including those for the Special Account Account, for each fiscal year Fiscal Year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankTrustee; (ii) furnish shall furnish, or cause ANPE to furnish, to the Bank Trustee as soon as available, but in any case not later than six (6) months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank Trustee shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish shall furnish, or cause ANPE to furnish, to the Bank Trustee such other information concerning con-cerning said records and accounts and the audit thereof as the Bank Trustee shall from time to time reasonably request. Section 4.02. Except as (c) For all expenditures with respect to which withdrawals from the Bank shall otherwise agreeOTF Grant Account were made on the basis of statements of expenditure, the Borrower Recipient: (i) shall ensure thatmaintain, during Project implementationor cause ANPE to maintain, NHA will: in accordance with paragraph (a) carry out its investment of this Section, records and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on accounts reflecting such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program.expenditures; Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) shall retain, or cause ANPE to retain, until at least one year after the mode of all future NHA funding provided through Trustee has received the Borrower’s annual Public Sector Development Programaudit report for the Fiscal Year in which the last withdrawal from the OTF Grant Account was made, all with a view records (contracts, orders, invoices, bills, receipts (iii) shall enable, or cause ANPE to making NHA financially sustainable commencing FY 2004/05enable, the Trustee’s representatives to examine such records; and (biv) shall ensure, or cause ANPE to those ends ensure, that such records and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory accounts are included in the annual audit referred to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.in paragraph

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Credit Account are were made on the basis of statements of expenditure, the Borrower shall: (i) maintain maintain, or cause to be maintained maintained, in accordance with sound accounting practicesparagraph (a) of this Section, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank Association has received the audit report for the fiscal year in which the last withdrawal from the Loan Account Credit Account, or payment out of the Special Accounts was made; and (iii) enable the Bank’s Association's representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) (i) of this Section and Section, including those for the Special Account for each fiscal year Accounts, audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as availablepossible, but in any case not later than six (6) months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank Association such other information concerning said records and accounts and the audit thereof as the Bank Association shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (iiexpenditures in respect of Parts A(2) ensure that all records (contracts, orders, invoices, bills, receipts and other documentsA(3) evidencing such expenditures are retained until at least one year after of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out Parts A(2) and A(3) of the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and including those for the Borrower’s Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, including the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the The Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment cause all federal and maintenance program in compliance with provincial governmental agencies and departments to settle all bills for the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made supply of electricity by the Bank on such plan in the course WAPDA within three months of receipt of such consultation; and (c) in particular, fully implement the National Highway Improvement Programbills. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05shall ensure that, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Programwith effect from September 30, 1995, all with flat tariffs charged by WAPDA for tubewells will include a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such reviewmetered energy charge component.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause NBM and the Apex unit to be maintained maintain separate records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after in respect of the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such records.Project: (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six (6) months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, including the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, or cause to be retained until at least one (1) year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account or payment out of the Special Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure thatshall, during Project implementationthrough the Apex Unit, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to respect of any comments and suggestions made by the Bank on such plan repayments of principal of Subsidiary Finances utilized in the course making of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shallSubloans: (a) at open, by the beginning of FY2004/05date on which it shall receive the first such repayment, take and, thereafter, maintain, in a decision regarding; (i) bank, acceptable to the treatment of existing stock of NHA debt; Bank, a separate account on terms and (ii) conditions satisfactory to the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05Bank; and (b) to those ends and not later than April 30upon receipt of each such repayment, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory credit the same to the Banksaid separate account. All amounts so credited shall be utilized, to the extent they are not yet required to meet the Borrower's repayment obligations under this Agreement, exclusively to finance, through the PFIs, specific Sub-projects on similar terms and provide conditions as those applicable to the Bank with a prior opportunity to comment on the findings and recommendations of such reviewSub-loans.

Financial and Other Covenants. Section 3.01. (a) For all expenditures with respect The Province shall maintain records and accounts adequate to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained reflect in accordance with sound accounting practices, records practices its operations and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after financial condition in respect of the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject. (b) The Borrower Province shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and those for including the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six months after the end of each such year year, a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records, including accounts and financial statements as well as the audit thereof, as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditure, the Province shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Association has received the audit for the fiscal year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after in respect of Part D of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph paragraph (a)(ia) of this Section and including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association, as soon as available, but in any case not later than six months after the end of each such year year, a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records, including accounts and the audit thereof as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Association has received the audit report for the fiscal year in which the last withdrawal from the Credit Account or payment out of the Special Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as Without limitation on the Bank shall otherwise agreeprovisions of Section 3.01 (a) (ii) of this Agreement, and to assist BJSC in carrying out its obligations under the Project Agreement, the Borrower shall ensure that, during Project implementation, NHA will: shall: (a) carry out a periodic review of BJSC’s coal prices and take such measures (including, without limitation, regular adjustment pursuant to a plan acceptable to the Association of the structure or level of coal prices charged by BJSC) as shall be necessary to enable BJSC to comply at all times with its investment and maintenance program obligations set out in compliance with Section 4.03 of the MTBF; Project Agreement; (b) consult take all necessary measures to reduce progressively the average collection period for payment for coal supplied by BJSC to Borrower’s combined heat/power plants, in accordance with a plan and timetable acceptable to the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultationAssociation; and and (c) pursuant to the Depreciation Legislation, and in particularaccordance with a timetable acceptable to the Association, fully implement allow BJSC the National Highway Improvement Programfull deduction for tax purposes of the depreciation provisions resulting from the application of international accounting standards. Section 4.03. The Borrower shall, no later than December 31, 1996, adopt a plan, satisfactory to the Association, for the transfer of the authority to exercise all rights and the requirement to fulfill all obligations of the Borrower in its capacity as shareholder of BJSC from MEGM to an entity fully independent from MEGM and any other organization, agency or individual with responsibilities for any aspect of energy or mining sector policy or regulation. Section 4.04. The Borrower shall, through MEGM: (a) at carry out Part D of the beginning Project in accordance with terms of FY2004/05, take a decision regarding; (i) reference and an implementation schedule acceptable to the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05Association; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, prepare under terms of reference satisfactory to the BankAssociation, and provide furnish to the Bank with Association, within one month following December 31 of each calendar year, a prior opportunity to comment report on the findings and recommendations progress achieved in carrying out Part D of the Project during such reviewyear.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with the relevant legislation and sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after in respect of Part C of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the its records and accounts referred to in paragraph (a)(ia) of this Section and Section, including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, including the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.025.02. Except as the Bank shall otherwise agree, the Borrower shall ensure thattransfer to BKV, during Project implementationas and when needed, NHA will: (a) carry out amounts as subsidies adequate to enable BKV to cover 100% of its investment and maintenance program total operating expenses as defined in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and Section 4.02 (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) of the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development ProgramProject Agreement, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends during 1995 and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such reviewthereafter.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are were made on the basis of statements of expenditureexpenditures, the Borrower shall: (i) maintain or cause to be maintained maintained, in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained retained, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) (i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as The Borrower shall, by not later than October 1, 1990, take all necessary action to cover the Bank shall otherwise agree, outstanding debt owed by FC to the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Programinto equity. Section 4.03. The Without any limitation or restriction upon any of its obligations under the Loan Agreement, the Borrower shall: (a) at shall continue to provide to FC all the beginning of FY2004/05funds, take a decision regarding; (i) the treatment of existing stock of NHA debt; facilities and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view other resources required by FC to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory services to the Bank, public on behalf of the Borrower and provide the Bank with a prior opportunity to comment on Borrower shall assume any and all liabilities arising out of the findings and recommendations carrying out of such reviewservices.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Credit Account are made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank Association has received the audit report for the fiscal year in which the last withdrawal from the Loan Credit Account was made; and (iii) enable the BankAssociation’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank Association such other information concerning said records and accounts and the audit thereof as the Bank Association shall from time to time reasonably request. Section 4.02. Except as the Bank Association shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank Association on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank Association on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; : (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the BankAssociation, and provide the Bank Association with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after in respect of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and including those for the Special Account and the Project Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six months after the end of each such year year, a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records, including accounts and the audit thereof as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Association has received the audit report for the fiscal year in which the last withdrawal from the Credit Account or payment out of the Special Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. (a) The Borrower shall cause SAFU to maintain records and accounts adequate to reflect in accordance with sound accounting practices the operations and financial condition of SAF. (b) The Borrower shall cause SAF to: (i) have its records, accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than six months after the end of each such year: (A) certified copies of its financial statements for such year as so audited; and (B) the report of such audit by said auditors of such scope and in such detail as the Association shall have reasonably requested, including a verification that the activities financed meet the agreed eligibility criteria; and (iii) furnish to the Bank Association such other information concerning said records such records, accounts and accounts financial statements and the audit thereof as the Bank Association shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to monitor the progress of the Project and of each Investment Project (including its cost and the benefits to be derived from it) and to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts expenditures in respect of the Project of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsoperation and financial condition of PSIDC and of each Investment Enterprise. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and including those for the Special Account and the financial statements (balance sheets, statements of income and expenses and related statements) of PSIDC and of each Investment Enterprise for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association, as soon as available, but in any case not later than six months after the end of each such year: (A) certified copies of said financial statements for such year as so audited, and (B) the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records, including accounts and financial statements and the audit thereof as the Associa- tion shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Asso- ciation has received the audit report for the fiscal year in which the last withdrawal from the Credit Account was made, all records (con- tracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures pro- cedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all BNDES shall, on behalf of the Borrower, maintain separate records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures of BNDES in respect of the Project: (b) The Borrower shall, through SEMA, maintain separate records and accounts adequate to reflect in accordance with respect to which withdrawals from the Loan Account are made on the basis of statements of expendituresound accounting practices, the Borrower shall:operations, resources and expenditures of SEMA in respect of Part B of the Project; (i) BNDES shall, on behalf of the Borrower, maintain or cause to be maintained in accordance with sound accounting practices, separate records and separate accounts reflecting such all expenditures in respect of which withdrawals are requested from the Loan Account on the basis of statement of expenditures; ; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such records.; and (iv) furnish to each Project Entity, all such information,, including copy of each statement of expenditure submitted to the Bank in respect of withdrawals from the Loan account, as shall be convenient to enable such Project Entity to comply with the auditing requirements of such Project Entity under this Agreement or the Project Agreement, as the case may be; (bd) The Borrower shall: (i) BNDES, on behalf of the Borrower, shall have the records accounts referred to in paragraphs (a) and (c) of this Section, the sub-accounts of FESA and CESA referred to in paragraph (a)(ib) of Section 2.02 of this Agreement and the FESA, and the Borrower shall have the accounts under paragraph (b) of this Section and those for the Special Account CESA, all for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; ; and (ii) BNDES, and the Borrower through SEMA, as the case may be, shall furnish to the Bank as soon as available, but in any case not later than six four months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including a separate opinion by said auditors in respect of the records and accounts referred to in paragraphs (a) and (c) (i) (BNDES), and (b) (SEMA) of this Section as to whether the proceeds of the Loan withdrawn in respect of such expenditures were used for the purposes for which they were provided; and (e) for all expenditures with respect to which withdrawals from the Loan Account for purposes of Part B of the Project were made on the basis of statements of expenditure, the Borrower through SEMA shall: (i) maintain or cause to be maintained, in accordance with paragraph (b) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (d) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except If the Borrower shall have, pursuant to the Federal Pollution Control Legislation and notwithstanding a petition of the State to the contrary, determined, rejected or cancelled the suspension of operations of a plant in the State of Sao Paulo, the Borrower shall, through SEMA, promptly inform the Bank and BNDES of its decision on the case and shall furnish the Bank all information on such case as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Programreasonably request. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) (i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the The Borrower shall ensure that, during Project implementation, NHA willshall: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with by September 30, 1990, furnish to the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration the findings of the study which is currently being undertaken by PBDAC to any comments and suggestions made by the Bank on such plan develop options for enhancing private participation in the course distribution of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05agricultural inputs; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Credit Account are were made on the basis of statements of expenditureexpenditures, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank Association has received the audit report for the fiscal year in which the last withdrawal from the Loan Credit Account was made; and (iii) enable the BankAssociation’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) (i) of this Section and those for the Special Account Accounts for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank Association such other information concerning said records and accounts and the audit thereof as the Bank Association shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after in respect of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association, as soon as available, but in any case not later than six months after the end of each such year year, a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records, including accounts and the audit thereof as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Association has received the audit report for the fiscal year in which the last withdrawal from the Credit Account or payment out of the Special Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. The Borrower shall consult with the Association on its rural road investment plan annually, and shall only undertake a rural road investment with an economic rate of return not less than ten percent (10%), as calculated in accordance with guidelines satisfactory to the Association. Section 4.03. Except as the Bank shall Association may otherwise agree, the Borrower shall ensure thatallocate to GRD for maintenance of roads improved under the Project, during Project implementationamounts not less than $450,000 equivalent in Fiscal Year 1997, NHA will: (a) carry out its investment and maintenance program $500,000 equivalent in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance planFiscal Year 1998, giving due consideration to any comments and suggestions made by the Bank on such plan $550,000 equivalent in the course of such consultation; and (c) Fiscal Year 1999, $600,000 equivalent in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the BankFiscal Year 2000, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review$650,000 equivalent in Fiscal Year 2001.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Credit Account are were made on the basis of statements of expenditureexpenditures, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year two years after the Bank Association has received the audit report for the fiscal year in which the last withdrawal from the Loan Credit Account was made; and (iii) enable the BankAssociation’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph para- graph (a)(ia) (i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures proce- dures and internal controls involved in their preparationpre- paration, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank Association such other information concerning said records and accounts and the audit thereof as the Bank Association shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the The Borrower shall continue to ensure that, during Project implementation, NHA will: (a) carry out its investment that NDDB shall be afforded managerial and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Programfinancial autonomy. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, shall cause concerned states to take a decision regarding; necessary action to ensure that: (i) DCSs, MPUs and State Federations which are beneficiaries under the treatment of existing stock of NHA debt; Project are established, and (ii) carry out their operations in accordance with the mode of all future NHA funding provided through principles set out in Schedule 2 to the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05Project Agreement; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Credit Account are were made on the basis of statements of expenditureexpenditures, the Borrower shall: (i) maintain or cause to be maintained maintained, in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one (1) year after the Bank Association has received the audit report for the fiscal year Fiscal Year in which the last withdrawal from the Loan Credit Account was made; and (iii) enable the BankAssociation’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) (i) of this Section and those for the Special Account for each fiscal year Fiscal Year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six (6) months after the end of each such year Fiscal Year the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure expenditures submitted during such fiscal yearFiscal Year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank Association such other information concerning said records and accounts and the audit thereof as the Bank Association shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the The Borrower shall ensure that, during Project implementation, NHA willshall: (a) carry out not later than December 31, 2001, take all measures necessary on its investment and maintenance program in compliance with part to complete the MTBFconversion of the Sana’a branch of NWSA referred to under Part D.2 of the Project; (b) consult with not later than March 31, 2002, and subject to the Bank on a timely basis each year prior approval of the Borrower’s Council of Ministers and the Association, take all measures necessary on its annual investment and maintenance plan, giving due part to award the contract referred to under Part E.3 of the Project taking into consideration to any comments and suggestions made by the Bank impact of the arrangement provided for under said contract on such plan in the course welfare of such consultationconsumers; and (c) in particulartake all measures necessary on its part to enable NWSA to carry out those obligations of NWSA and NWSA’s Sana’a branch provided for under Sections 2.03 (b) and 4.03 of, fully implement and paragraph 2 (b) of Schedule 2 to, the National Highway Improvement Program. Section 4.03Project Agreement. The Borrower shallfollowing additional events are specified: (a) at NWSA shall have failed to perform any of its obligations under the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; andProject Agreement. (b) As a result of events which have occurred after the date of this Agreement, an extraordinary situation shall have arisen which shall make it improbable that NWSA will be able to those ends perform its obligations under the Project Agreement. (c) The Statutes shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and not later than April 30, 2004, carry out a review adversely the operations or financial condition of available options NWSA or its ability to perform any of its obligations under the Project Agreement. (d) The Borrower or any other authority having jurisdiction shall have taken any action for financing NHA’s investment program on a sustainable basis, under terms the dissolution or disestablishment of reference satisfactory to NWSA or for the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations suspension of such reviewits operations.

Financial and Other Covenants. (a) The Borrower shall maintain records and accounts adequate to reflect in accordance with sound accounting practices the accounts and records of its departments and agencies responsible for the carrying out of the Project or any part thereof. (b) The Borrower shall: (i) have such records and accounts for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than nine months after the end of each such year, the report of such audit by said auditors of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records, accounts and financial statements as well as the audit thereof, as the Association shall from time to time reasonably request. (a) For all expenditures with respect to which withdrawals from the Loan Credit Account are were made on the basis of statements of expenditureexpenditures, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank Association has received the audit report for the fiscal year in which the last withdrawal from the Loan Credit Account was made; and (iii) enable the BankAssociation’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph paragraph (a)(ia) (i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles prin- ciples consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six nine months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure expendi- ture submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank Association such other information concerning con- cerning said records and accounts and the audit thereof as the Bank Association shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) The Borrower shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of the Project of the departments or agencies of the Borrower and the PCIs responsible for carrying out the Project or any part thereof. (b) For all expenditures with respect to which withdrawals from the Loan Credit Account are were made on the basis of statements of expenditureexpenditures, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank Association has received the audit report for the fiscal year in which the last withdrawal from the Loan Credit Account was made; and (iii) enable the BankAssociation’s representatives to examine such records. (bc) The Borrower shall: (i) have the records and accounts referred to in paragraph para- graphs (a)(ia) and (b) (i) of this Section and including those for the Special Account Accounts for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six nine months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures proce- dures and internal controls involved in their preparationpre- paration, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank Association such other information concerning said records and accounts and the audit thereof as the Bank Association shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the The Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment prepare and maintenance program in compliance with implement a plan satisfactory to the MTBF; (b) consult with Association for strengthening and expanding the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Programprocurement system for oilseeds. Section 4.03. The Borrower shall prepare and implement a plan satisfactory to the Association for periodically reviewing and adjusting the regulatory import duty on edible oil. Section 4.04. The Borrower shall prepare and implement a plan satisfactory to the Association for periodically reviewing and adjusting the GCP retail price of ghee. Section 4.05. The Borrower shall ensure that adequate credit will be provided to oilseed farmers under the Project, and, to this end, shall: (a) at permit the beginning of FY2004/05, take a decision regarding; (i) NCBs to provide medium-term credit under the treatment of existing stock of NHA debt; and (ii) Project without regard to the mode of all future NHA funding provided through 15% ceiling on such credit imposed by the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05National Credit Consultative Committee; and (b) cause the State Bank of Pakistan to those ends refinance the short- term credit provided by ADBP under the Project without any restrictions. Section 5.01. Pursuant to Section 6.02 (h) of the General Conditions, the following additional events are specified: (a) The Provinces shall have failed to perform any of their obligations under the Project Agreement. (b) The PCIs shall have failed to perform any of their obli- gations under the Subsidiary Loan Agreements. (c) As a result of events which have occurred after the date of the Development Credit Agreement, an extraordinary situation shall have arisen which shall make it improbable: (i) that the Provinces will be able to perform their obligations under the Project Agreement; and/or (ii) that the PCIs will be able to perform their obligations under the Subsidiary Loan Agreements. (d) The Agricultural Development Bank Ordinance (No. IV) of 1961, the Banking Companies Ordinance (No. LVII) of 1962, the Banks (Nationalization) Act, 1974 or the Companies Ordinance (No. XLVII) of 1984 of the Borrower shall have been amended, suspended, abrogated, repealed or waived so as to affect material- ly and not later than April 30adversely the ability of the PCIs to perform any of their obligations under the Subsidiary Loan Agreements or of PBC to perform any of its obligations under the Administration Agreement. (e) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of the PCIs or of PBC or for the suspension of their opera- tions. Section 5.02. Pursuant to Section 7.01 (d) of the General Conditions, 2004, carry out the following additional events are specified: (a) the events specified in paragraphs (a) and (b) of Section 5.01 of this Agreement shall occur and shall continue for a review period of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory sixty days after notice thereof shall have been given by the Association to the Bank, Borrower; and (b) the events specified in paragraphs (d) and provide the Bank with a prior opportunity to comment on the findings and recommendations (e) of such reviewSection 5.01 of this Agreement shall occur.

Financial and Other Covenants. (a) For all expenditures with respect The Borrower shall maintain a financial management system, including records and accounts, and prepare financial statements in a format acceptable to which withdrawals from the Loan Account are made on the basis of statements of expenditureAssociation, the Borrower shall: (i) maintain or cause adequate to be maintained reflect in accordance with sound financial management and accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after related to the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the records records, accounts and accounts financial statements referred to in paragraph (a)(ia) of this Section and including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six months after the end of each such fiscal year, (A) certified copies of the financial statements referred to in paragraph (a) of this Section for such fiscal year the as so audited, and (B) an opinion on such financial statements, records and accounts and a report of such audit audit, by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records, including accounts and financial statements, and the audit thereof, and concerning said auditors, as the Association may from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of Project Management Reports or statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and separate accounts reflecting such expenditures; (ii) retain or cause to be retained, until at least one year after the Association has received the audit report for the fiscal year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the Project Management Reports or statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. Section 4.02. (a) Without limitation upon the provisions of Section 4.01 of this Agreement, the Borrower shall carry out a time-bound action plan acceptable to the Association for the strengthening of the financial management system referred to in paragraph (a) of said Section 4.01 in order to enable the Borrower, not later than July 1, 2001, or such later date as the Association shall agree, to prepare quarterly Project Management Reports, acceptable to the Association, each of which: (i) (A) sets forth actual sources and applications of funds for the Project, both cumulatively and for the period covered by said report, and projected sources and applications of funds for the Project for the six-month period following the period covered by said report, and (B) shows separately expenditures financed out of the proceeds of the Credit during the period covered by said report and expenditures proposed to be financed out of the proceeds of the Credit during the six-month period following the period covered by said report; (ii) (A) describes physical progress in Project implementation, both cumulatively and for the period covered by said report, and (B) explains variances between the actual and previously forecast implementation targets; and (iii) furnish to sets forth the Bank such other information concerning said records status of procurement under the Project and accounts and expenditures under contracts financed out of the audit thereof proceeds of the Credit, as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning end of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such reviewperiod covered by said report.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after in respect of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordscarrying out thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, including the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at ensure that each of the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, studies under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.Part B

Financial and Other Covenants. (a) The Borrower shall maintain, or cause to be maintained, a financial management system, including records and accounts, and prepare financial statements, all in accordance with consistently applied accounting standards acceptable to the Bank, adequate to reflect its operations, resources and expenditures related to the Project. (b) The Borrower, through the project implementing entities, shall: (i) have the financial statements referred to in paragraph (a) of this Section for each fiscal year (or other period agreed to by the Bank), audited, in accordance with consistently applied auditing standards acceptable to the Bank, by independent auditors acceptable to the Bank; (ii) furnish or cause to be furnished to the Bank as soon as available, but in any case not later than six (6) months after the end of each such year (or such other period agreed to by the Bank), (A) certified copies of the financial statements referred to in paragraph (a) of this Section for such year (or such other period agreed to by the Bank), as so audited, and (B) an opinion on such statements by said auditors, in scope and detail satisfactory to the Bank; and (iii) furnish or cause to be furnished to the Bank such other information concerning such records, accounts and the audit of such financial statements, and concerning said auditors, as the Bank may from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account are were made on the basis of statements of expenditure, the Borrower Borrower, through RNCNMR, CFR and Metrorex, shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for for, or covering, the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such records. ; and ensure that such statements of expenditure are included in any audit that the Bank may have requested pursuant to paragraph (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably requestSection. Section 4.02. Except as Without limitation or restriction upon the Bank shall otherwise agreeprovisions of Section 3.01 of this Agreement relating to the provision of funds for CFR for the implementation of the Project, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis provide financing each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan for railway passenger services in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Programaccordance with all applicable Performance Contracts. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Credit Account are were made on the basis of statements of expenditureexpenditures, the Borrower shall: (i) maintain or cause to be maintained maintained, in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank Association has received the audit report for the fiscal year in which the last withdrawal from the Loan Credit Account was made; and (iii) enable the BankAssociation’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) (i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank Association such other information concerning said records and accounts and the audit thereof as the Bank Association shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the The Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year take all measures required on its annual investment and maintenance planpart to enable SRC to meet the requirements of Section 4.02 of the Project Agreement, giving due consideration including the permission of SRC to any comments and suggestions made by adjust the Bank on such plan in the course structure or levels of such consultation; and (c) in particular, fully implement the National Highway Improvement Programits tariffs. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05settle, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Programby June 30, all with a view 1990, any outstanding bills for transportation services rendered to making NHA financially sustainable commencing FY 2004/05it by SRC which are overdue by more than 60 days; and (b) thereafter continue to those ends and not later than April 30, 2004, carry out a review pay for SRC’s services within 60 days after the receipt of available options for financing NHASRC’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such reviewbills.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditureThe Borrower shall maintain a financial management system, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, including records and separate accounts reflecting such expenditures; (ii) ensure that all records (contractsaccounts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year prepare financial statements in which the last withdrawal from the Loan Account was made; and (iii) enable a format acceptable to the Bank’s representatives , adequate to examine such recordsreflect the operations, resources and expenditures related to the Project. (b) The Borrower shall: (i) have the records records, accounts and accounts financial statements referred to in paragraph (a)(ia) of this Section and those the records and accounts for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles standards acceptable to the Bank, consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of the financial statements referred to in paragraph (a) of this Section for such year the as so audited, and (B) an opinion on such statements, records and accounts and report of such audit audit, by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning such records and accounts, including and the audit thereof, and concerning said auditors, as the Bank may from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and separate accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. Section 4.02. Without limitation upon the provisions of Section 4.01 of this Agreement, the Borrower shall carry out a time-bound action plan acceptable to the Bank for the strengthening of the financial management system referred to in paragraph (a) of said Section 4.01 in order to enable the Borrower, not later than June 30, 2001, or such later date as the Bank shall agree, to prepare quarterly Project Management Reports, acceptable to the Bank, each of which: (i) (A) sets forth actual sources and applications of funds for the Project, both cumulatively and for the period covered by said report, and projected sources and applications of funds for the Project for the six-month period following the period covered by said report, and (B) shows separately expenditures financed out of the proceeds of the Loan during the period covered by said report and expenditures proposed to be financed out of the proceeds of the Loan during the six-month period following the period covered by said report; (ii) (A) describes physical progress in Project implementation, both cumulatively and for the period covered by said report, and (B) explains variances between the actual and previously forecast implementation targets; and (iii) furnish to sets forth the Bank such other information concerning status of procurement under the Project and expenditures under contracts financed out of the proceeds of the Loan, as at the end of the period covered by said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Programreport. Section 4.03. The In order to achieve the objectives of Part A of the Project, the Borrower shall take all action necessary on its part to adopt and issue, not later than twelve (12) months following the effectiveness of the Loan Agreement, regulations specific to the telecommunications and postal sectors which shall: : (A) define the organization and functioning of the Telecommunications and Postal Sector Regulatory Authority, the Postal Operator and the Telecommunications Operator; and (B) establish principles for (a) at the beginning of FY2004/05, take a decision regardinginterconnection; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30competition; (c) universal service; (d) tariffs; (e) scarce resources (frequencies, 2004numbering, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.infrastructure sharing); (f) licensing regime;

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Credit Account are were made on the basis of statements of expenditureexpenditures, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank Association has received the audit report for the fiscal year in which the last withdrawal from the Loan Credit Account was made; and (iii) enable the BankAssociation’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) (i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank Association such other information concerning said records and accounts and the audit thereof as the Bank Association shall from time to time reasonably request. Section 4.02. Except (a) The Borrower shall take all such action as may be necessary on its part to ensure that the Bank shall otherwise agreegas operating companies have sufficient internally generated funds to meet operating expenses and debt service requirements, maintain an adequate working capital position, and with the exception of GTCL, self-finance a minimum of 20-30% of their respective investment programs. (b) To meet the requirements set forth in paragraph (a) above, the Borrower shall ensure thatshall, during Project implementationbefore the start of each fiscal year, NHA will: (a) carry out its investment and maintenance program in compliance review with the MTBF; (b) consult with Association the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration margins allowed to any comments and suggestions made by the Bank on such plan gas operating companies in the course respect of such consultation; and (c) in particular, fully implement the National Highway Improvement Programyear. Section 4.03. The Borrower shall: (a) at , prior to the beginning of FY2004/05each fiscal year, take a decision regarding; jointly review with the Association the gas sector’s Priority Investment Program (iPIP) and its implementation in the treatment of existing stock of NHA debt; and (ii) current fiscal year, as well as the mode of all future NHA funding provided through implementation plan for the Borrower’s annual Public Sector Development Programthree succeeding fiscal years. Section 4.04. The Borrower shall, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not by December 31, 1995 or such later than April 30, 2004date as the Association shall agree, carry out a joint review with the Association of available options the Borrower’s action program for financing NHA’s investment strengthening the institutional and regulatory frameworks for the petroleum/gas sector. Section 4.05. The Borrower shall carry out or cause to be carried out a program on a sustainable basis, under terms of reference satisfactory to the Bank, Association to clear public sector consumers’ arrears for gas and provide condensate supplied by the Bank gas operating companies. Section 4.06. The Borrower shall take all such action as may be necessary on its part to enable GTCL and SGFL to comply with a prior opportunity to comment on the findings and recommendations provisions of such reviewSection 4.02 of their respective Project Agreement.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) , through SCT and CAPES, maintain, and cause FINEP and CNPQ to maintain or cause separate records and accounts adequate to be maintained reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contractsexpenditures in respect of the Project of SCT, ordersCAPES, invoices, bills, receipts FINEP and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsCNPQ. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and including those for the Special Account Accounts for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particularFor all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) at the beginning of FY2004/05this Section, take a decision regarding; (i) the treatment of existing stock of NHA debt; records and accounts reflecting such expenditures; (ii) retain, until at least one year after the mode Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account or payment out of all future NHA funding provided through the Borrower’s annual Public Sector Development ProgramSpecial Accounts was made, all with a view records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank’s representatives to making NHA financially sustainable commencing FY 2004/05examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) to those ends of this Section and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to that the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations report of such reviewaudit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the proce-dures and internal controls involved in their preparation, can be relied upon to support the related withdrawals.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditure, the The Borrower shall: (i) shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practicespractices the operations, records resources and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts expenditures in respect of Parts B and other documents) evidencing such expenditures are retained until at least one year after C of the Bank has received Project of the audit report departments or agencies of the Borrower responsible for carrying out the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) of this Section and including those for the Special Account Accounts for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six months after the end of each such year year, the report of such audit by said auditorsauditors including the management letter, of such scope and in such detail as the Bank Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records and accounts and the audit thereof as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditure, including the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Association has received the audit report for the fiscal year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Credit Account are were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained maintained, in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank Association has received the audit report for the fiscal year in which the last withdrawal from the Loan Credit Account was made; and (iii) enable the Bank’s representatives to examine such records.; (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) (i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles princi- ples consistently applied, by independent auditors audi- tors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure expendi- ture submitted during such fiscal year, together with the procedures and internal controls involved in- volved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank Association such other information concerning said records and accounts and the audit thereof as the Bank Association shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are made on the basis of statements of expenditureThe Borrower shall maintain, the Borrower shall: (i) maintain or cause the PMU to be maintained in accordance with sound accounting practicesmaintain, a financial management system, including records and separate accounts reflecting such expenditures; (ii) ensure that all records (contractsaccounts, ordersand prepare financial statements in a format acceptable to the Association, invoicesadequate to reflect the operations, bills, receipts resources and other documents) evidencing such expenditures are retained until at least one year after related to the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such recordsProject. (b) The Borrower shall: (i) have the records records, accounts and accounts financial statements referred to in paragraph (a)(ia) of this Section and those the records and accounts for the Special Account for each fiscal year Fiscal Year audited, in accordance with appropriate auditing principles standards acceptable to the Association, consistently applied, by independent auditors acceptable to the BankAssociation; (ii) furnish to the Bank Association as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of the financial statements referred to in paragraph (a) of this Section for such year the as so audited, and (B) an opinion on such statements, records and accounts and report of such audit audit, by said auditors, of such scope and in such detail as the Bank Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning such records and accounts, including and the audit thereof, and concerning said auditors, as the Association may from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain, or cause to be maintained, in accordance with paragraph (a) of this Section, records and separate accounts reflecting such expenditures; (ii) retain, until at least one year after the Association has received the audit report for the fiscal year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association’s representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal yearFiscal Year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. Section 4.02. (a) Without limitation upon the provisions of Section 4.01 of this Agreement, and the Borrower’s progress reporting obligations set out in paragraph 2 (b) of Schedule 4 to this Agreement, the Borrower shall prepare and furnish to the Association a Financial Monitoring Report, in form and substance satisfactory to the Association, which: (i) sets forth sources and uses of funds for the Project, both cumulatively and for the period covered by said report, and projected sources and applications of funds for the Project for the six-month period following the period covered by said report; (ii) describes physical progress in Project implementation, both cumulatively and for the period covered by said report, and explains variances between the actual and planned implementation targets; and (iii) furnish to sets forth the Bank such other information concerning said records and accounts and status of procurement under the audit thereof Project as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning end of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such reviewperiod covered by said report.

Financial and Other Covenants. (a) The Borrower shall maintain and cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practices its operations, resources and expenditures in respect of the Project of the departments or agencies of the Borrower as well as each Project State or Project Union Territory, responsible for carrying out any part of the Project. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a) of this Section including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than nine months after the end of each such year, a certified copy of the report of such audit by said auditors of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records, accounts and the audit thereof, as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Credit Account are were made on the basis of statements of expenditureexpenditures, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank Association has received the audit report for the fiscal year in which the last withdrawal from the Loan Credit Account was made; and; (iii) enable the BankAssociation’s representatives to examine such records.; and (biv) The Borrower shall: (i) have the ensure that such records and accounts are included in the annual audit referred to in paragraph (a)(ib) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year that the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including auditors contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a)(ia) (i) of this Section and those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.

Financial and Other Covenants. (a) For all expenditures with respect to which withdrawals from the Loan Account are were made on the basis of statements state- ments of expenditure, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made; and (iii) enable the Bank’s representatives to examine such records. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph para- graph (a)(ia) (i) of this Section and those for the Special Account Accounts for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Bank such other information concerning concern- ing said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.02. Except as the Bank shall otherwise agree, the Borrower shall ensure that, during Project implementation, NHA will: (a) carry out its investment and maintenance program in compliance with the MTBF; (b) consult with the Bank on a timely basis each year on its annual investment and maintenance plan, giving due consideration to any comments and suggestions made by the Bank on such plan in the course of such consultation; and (c) in particular, fully implement the National Highway Improvement Program. Section 4.03. The Borrower shall: (a) at the beginning of FY2004/05, take a decision regarding; (i) the treatment of existing stock of NHA debt; and (ii) the mode of all future NHA funding provided through the Borrower’s annual Public Sector Development Program, all with a view to making NHA financially sustainable commencing FY 2004/05; and (b) to those ends and not later than April 30, 2004, carry out a review of available options for financing NHA’s investment program on a sustainable basis, under terms of reference satisfactory to the Bank, and provide the Bank with a prior opportunity to comment on the findings and recommendations of such review.