AUDITOR’S REPORT ON FINANCIAL STATEMENTS FOR THE RGP II PROJECT 2018 THE PORT OF RIJEKA AUTHORITY (LUČKA UPRAVA RIJEKA) RIJEKA Rijeka, April 2019 FINANCIAL STATEMENTS FOR THE RGP II PROJECT 2018 THE PORT OF RIJEKA AUTHORITY RIJEKA Rijeka, April 2019 Contents AUDITOR'S REPORT ON FINANCIAL STATEMENTS FOR THE PROJECT, FOR PURPOSES OF THE WORLD BANK (IBRD) ........... 1 FINANCIAL STATEMENTS FOR THE „RGP II“ PROJECT UNDER IBRD LOAN 7638 HR FOR THE YEAR 2018 .............................. 1 DECLARATION OF RESPONSIBILITY FOR THE ENCLOSED FINANCIAL STATEMENTS ............................................................... 1 1. PROJECT IN GENERAL............................................................................................................................................... 2 1.1. OBJECTIVE AND PURPOSE OF THE PROJECT („RGP I“ AND „RGP II“)....................................................... 2 1.2. PROJECT IMPLEMENTATION COURSE TO DATE ................................................................................... 3 1.3. MAIN PROJECT COMPONENTS ........................................................................................................... 4 1.3.1. Container terminal at the Zagreb Wharf.................................................................................... 4 1.3.2. Container Terminal Brajdica ...................................................................................................... 5 1.4. PROJECT FUNDING BY IBRD LOANS ..................................................................................................... 5 1.4.1. Rijeka Traffic Route I Redevelopment Project – IBRD Loan no. 47150 HR ................................... 5 1.4.2. Rijeka Traffic Route I Redevelopment Project – IBRD Loan no. 47151 HR ................................... 6 1.4.3. Rijeka Traffic Route II Redevelopment Project – IBRD Loan no. 7638 HR .................................... 6 1.4.3.1. Project restructuring.................................................................................................................. 7 1.4.3.2. Events after the reporting date.................................................................................................. 8 2. REPORTING FRAMEWORK AND ACCOUNTING BASIS................................................................................................ 9 2.1. REPORTING FRAMEWORK .................................................................................................................. 9 2.2. ACCOUNTING BASIS OF REPORTING ................................................................................................... 9 3. BASIC DEFINITIONS AND CONVENTIONS ................................................................................................................ 10 3.1. DEFINITIONS .................................................................................................................................... 10 3.2. CONVENTIONS ................................................................................................................................. 10 4. SUMMARY OF FUNDS RECEIVED, SHOWING THE WORLD BANK (IBRD) PROJECT FUNDS AND THE COUNTERPART FUNDS (RC BUDGET), AND SUMMARY OF EXPENDITURES BY THE MAIN PROJECT HEADINGS AND BY MAIN CATEGORIES OF EXPENDITURES FOR THE PRECEDING PERIOD CUMULATIVELY, FOR THE CURRENT FISCAL YEAR, AND THOSE ACCUMULATED TO DATE. ................................................................................................................................................ 10 4.1. INTRODUCTION................................................................................................................................ 10 4.2. STATEMENT OF PROJECT SOURCES AND EXPENSES........................................................................... 11 4.3. BALANCE OF IBRD LOAN NO. 7368 HR............................................................................................... 12 4.3.1. Breakdown of changes during the year.................................................................................... 12 4.3.2. Breakdown of loan increases during the year through withdrawals to the Project designated account 13 4.3.3. Breakdown of loan increases during the year through direct Bank remittances ....................... 13 4.4. DETAILED BREAKDOWN OF PROJECT EXPENSES DURING THE YEAR AND CUMULATIVELY AS AT DECEMBER 31ST ............................................................................................................................................. 14 4.4.1. Table disclosure ....................................................................................................................... 14 4.4.2. Table overview of expense payments for the Project by the source/manner of payment.......... 15 5. SUMMARY ON SUMMARY REPORTS (FOR SUBMISSION OF WITHDRAWAL APPLICATIONS) – SUPPORTING DOCUMENTATION – STATEMENT OF EXPENSES (SOE)...................................................................................................... 16 5.1. INTRODUCTION................................................................................................................................ 16 5.1.1. Statement of expenses (SOE) for 2018, by the supplier............................................................. 16 5.1.2. Financing ratio during the reporting period ............................................................................. 19 6. STATEMENT OF THE PROJECT DESIGNATED ACCOUNT 2018 AND OF THE LOCAL PROJECT ACCOUNT ..................... 19 6.1. ACCOUNT DESCRIPTION ................................................................................................................... 19 6.2. STATEMENT OF DESIGNATED ACCOUNT - TABLE............................................................................... 19 6.2.1. Account balance ...................................................................................................................... 20 6.3. DETAILED BREAKDOWN ................................................................................................................... 20 6.3.1. Table of individual inflows to the Project Designated Account during the year......................... 20 6.3.2. Table of individual payments from the Project Designated Account during the year including types of contracts and paid costs ............................................................................................................. 20 6.4. PROJECT ACCOUNT REPORT – RC STATE BUDGET.............................................................................. 23 6.4.1. Account description ................................................................................................................. 23 6.4.2. Breakdown of withdrawals and payments from the RC Designated Project Account ................ 24 2 AUDITOR'S REPORT ON FINANCIAL STATEMENTS FOR THE PROJECT, FOR PURPOSES OF THE WORLD BANK (IBRD) The Port of Rijeka Authority Riva 1 Rijeka - CROATIA Director We audited the attached financial statements of the project for 2018 prepared by the Port Authority of Rijeka (Entity), including the Summary of Incomes and Expenses for the Project, Summary of Summary Reports - Statement of Expenses, Summary of the Designated Account for the Project with respective Notes and Clarifications regarding the Project of Redevelopment of the Rijeka Traffic Route II (Project) funded by the International Bank for Restructuring and Development (IBRD) (Bank). Our Reports are presented on pages 1 – 26. Responsibility of the Director The Director is responsible for compilation of financial statements for the Project in compliance with the instructions, guidelines, and requirements set by the Bank. Director's responsibilities include: determining, introducing and maintaining internal controls relevant for the compilation and fair presentation of the financial statements for the Project to be free of any material misstatements due to fraud or error, and for the selection of appropriate accounting bases. The accounting basis selected for the purpose of these financial statements is the cash flow method whereby cash inflows are recognised at the moment they have taken place and cash outflows when they were paid instead of when they had incurred. Responsibility of the Auditor and the scope of the audit We have conducted our audit in conformity with the International Auditing Standards (IAS) and with the IBRD guidelines ''Annual financial reporting and auditing for financial activities of the World Bank'' of June 30th 2003, contract requirements RGP/LCS/O93/2014 FOR CONSULTANTS' SERVICES (Contract) of May 13th 2015 and Addendum no.1 of June 2018 and special requirements from contracts concerning Summary Reports and Designated Account. In addition, we have also respected the requirements and instructions from the following manuals: - Manual for loan withdrawals for clients of the World Bank, May 2006; - Guidelines for loan withdrawals for projects, May 2006; - Guidelines: Procurement of goods, works and non-consulting services within the IBRD loans and IDA loans by the World Bank borrowers, January 2011 (as revised, July 2014); - Guidelines: Selection and employment of consultants by the World Bank borrowers, January 2011 (as revised, July 2014). 1 Our audits are required by standards, instructions, guidelines and requirements to be planned and conducted properly as to provide reasonable assurances that financial statements are free ofany material misstatements. Auditing also includes testing and procedures for collecting audit evidence relevant to the amounts and disclosures oresented in the financial statements for the Project. We are confident that the auditing evidence obtained has been sufficient and has provided the appropriate basis for our auditing opinion. Opinion In our opinion, the attached financial statements for the Project present a fair presentation of the Project sources, expenditures, statements of expenses (SOE) for the purpose of loan withdrawal and changes in the Project Designated Account for 2018 i.e. as at December 3l'r 2018, with regard to the Project funded by the IBRD loan no. 7638 HR and by the RC State Budget, in compliance with the required reporting framework provided by the World Bank. Emphasis of Malter With reference to loan under repayment, loan no. 47151, mentioned under point 1.4.2., users are referred to Auditors'Report on financial statements for the Entity for 2018, whereby the loan was disclosed and their position as at December 3l't 2018 confirmed by the audit. HLB Inienjerski biro d.o.o. Rijeka, Aprit 26th 2019 Strossmayerova I I 51 000 Rijeka Croatia ofHLB InZenjerski biro d.o.o. Romdna Zmirid President of the Certified Auditor Management Board G)rNzeHJEnsxr erno \.J d.o.o. Strossfiayerova 11, Rijeka THE PORT OF RUEKA AUTHORITY - RUEKA FINANCIAL STATEMENTS FOR THE ,,RGP II' PROIECT UNDER IBRD LOAN 7638 HR FOR THE YEAR 2078 Decloration of responsibility for the enclosed financial statements Legal representative of non-profit organisation is responsible for organisation, lawful business operation and accountinB and for assuring that financial statements for each fiscal year are prepared in compliance with provisions of the Law and/or contracts. Likewise, legal representative is responsible for the structure and proper functioning of the project implementation unit and the project financial reporting system that the project financial statements derive from. In compliance with the defined financial reporting framework, Project financial statements consist of: a) Summary of Project Sources and Expenses bl Summary of Summary Reports- Statement of Expenses (SOEI c) Summary of designated account The Project financial statements disclosed on pages 1to 25 have been approved by the legal representative on April I'r 2019 and signed by: I Director \ :, Financial Statements for the RGP ll Project THE PORT OF RIJEKA AUTHORITY - RIJEKA 1. PROJECT IN GENERAL 1.1. OBJECTIVE AND PURPOSE OF THE PROJECT („RGP I“ and „RGP II“) The Government of the Republic of Croatia, in cooperation with the International Bank for Reconstruction and Development (IBRD), has launched the Project of Redevelopment of the Rijeka Traffic Route - “Rijeka Gateway Project” and accordingly, based on the Guarantee Agreement between the RC and IBRD and the Loan Agreement between the Rijeka Port Authority (Loan no. 4715 HR), Hrvatske ceste (Loan no. 4716 HR), Hrvatske autoceste (Loan no. 4714 HR) as borrowers and IBRD, the funds for implementation of the mentioned Project were secured in 2003. In addition to modernization of the port area, the Project envisages construction of road connections to the port of Rijeka and purchase of the required port equipment. Redevelopment and modernization of the port area includes modernization of the general cargo terminal, relocation of the timber terminal from the Delta and Porto Baross area as well as the development of a nautical/passenger terminal. The purpose of the Project is to increase Croatia’s economic competition by upgrading the international transport chain through the Rijeka traffic route for the transport of cargo and passengers, as well as through modernization of connections between the port and the road networks, and the revival of port activities. The project consists of the following components: 1. port restructuring and modernization through a) infrastructure redevelopment in the western part of the port and construction of a terminal at the Zagreb Wharf and b) acquisition of modern heavy cargo handling devices, by installing a navigation management system and an electronic data exchange system; 2. development of the borderland area between the port and the town, which includes redevelopment of the port area and construction of passenger terminal; 3. improvement of the international road traffic route, precisely: a) by construction of the southern lane of the Rijeka ring-road and of connecting roads and of the Zagreb-Macelj motorway, repair of the Krk bridge and elimination of accident black spots, and b) by introduction of the roadways and bridges management system and of small-sized equipment and management software. The Rijeka Gateway Project II (RGP II) is the continuation of the Rijeka Gateway I (RGP I) programme aiming at increasing the competitiveness of Rijeka as a port town, strategically located at the beginning of the Vb traffic corridor, one of the major pan-European traffic corridors. The programme envisages modernization of port facilities, increase in the private sector presence in the port, improvement of the Rijeka Port Authority financial activities and upgrading the quality of coexistence between the town and the port with simultaneously better integration of Rijeka in international traffic corridors. The Rijeka Gateway Project has been also designed to support the Croatian economy, to render it more dynamic and competitive and to increase attractiveness of the port town of Rijeka by balancing the town development, linking it to the traffic corridor and developing the port at the same time. Besides being strategically positioned both as a port and a tourist and business destination, on one of the major European traffic corridors, the Vb corridor Rijeka is also the leading Croatian international port, the only one in Croatia provided with a container terminal of significant capacity. Financial Statements for the RGP II Project 2 THE PORT OF RIJEKA AUTHORITY - RIJEKA 1.2. PROJECT IMPLEMENTATION COURSE TO DATE Following cancellation of an additional EUR 15 million loan, the value of the Rijeka Traffic Route I and II Redevelopment Projects port component totalled EUR 177 million, out of which EUR 145 million were the World Bank (IBRD) loans and EUR 32 million represented the national counterpart share, out of the Republic of Croatia budget. Reduced by the unwithdrawn part of the additional loan of EUR 1,2 million, the total Project value was decreased to EUR 175,8 million. In consequence of the obligation for VAT to apply to free zone investments as of July 1st 2013, pursuant to the new Act on VAT (Official Gazette no. 73/2013.), the estimated Project investment value, for the period up to the end of the project, increased by EUR 20,6 million whereby the overall Project value increased to EUR 196,4 million. Given the subsequently defined requirement for VAT to apply to the part of the contracted value for the ZCT as well, that had been paid by advance before July 01st 2013, the total Project value has increased by EUR 2,57 million, thus reaching the total value of EUR 198,9 million. Early in 2015, the Rijeka Port Authority submitted an application for funding, which received, on 10th July, positive opinion from the CEF-a (Connecting Europe Facility) Coordination Committee in respect of the list of activities proposed for funding, and lead to the Grant Agreement within the framework of CEF, which was signed on November 23rd 2015 between the European Commission INEA Agency (Innovation and Networks Executive Agency) and the grant beneficiaries: the Rijeka Port Authority and HŽ Infrastruktura d.o.o.Zagreb. Activities approved for financing from this donation refer mostly to the reconstruction of the railway station, industrial rail tracks, construction of a new sidetrack rail for the Brajdica container terminal that was planned to be financed within the Rijeka Traffic Route II Project in earlier financial projections. Due to aforementioned, according to the request for the project restructuring from 2016 the total value of the project is decreased by EUR 12,1 million and now totals EUR 186,8 mil. RGP II has been restructured twice during the implementation: Through the first restructuring of the Project, approved by IBRD in 2014, the deadline for loan utilisation has been extended, funds have been redistributed between loan categories and the percentage of financing the Project from the loan has been changed in accordance with the updated contribution from the State Budget for domestic participation of Port Authority Rijeka. The second restructuring was approved in May 2016 partially in such manner that the retroactive changes in financing ratio from the loan i.e. State Budget from January 2016 was approved and redistribution of funds between loan categories was approved, due to decreased interest expenses resulting from delayed loan utilisation. The second part of that restructuring request (extending the loan utilisation deadline) was approved in June 2017. Changes and amendments in the Loan Contract and Guarantee Contract define the deadlines for the completion of activities by the borrower i.e. Rijeka Port Authority and the Republic of Croatia as a guarantor, with the goal of completing the Project within the deadline that has been extended by seventeen and a half months (Dec 31st 2018) by the aforementioned restructuring. Financial Statements for the RGP II Project 3 THE PORT OF RIJEKA AUTHORITY - RIJEKA 1.3. MAIN PROJECT COMPONENTS The main Project components are the construction of a new container terminal at the Zagreb Wharf and upgrading of the Brajdica container terminal capacity. 1.3.1. Container terminal at the Zagreb Wharf The most significant component of the Rijeka Gateway Project is the construction of a new container terminal at the Zagreb Wharf. The first stage includes construction of a 400 m long wharf and the second one the construction of additional 280 m, up to the total length of 680 m. Construction funding has been defined as a combination of the World Bank loan funds, EU Funds, and private investment funds. In this connection, construction of a new wharf has been envisaged for funding by the World Bank loan, while the infrastructure on the existing segment of the terminal, the supractructure and equipment to be funded by private investment. On May 22nd 2014, based on the RC Government Decision, the project of construction of the Zagreb Wharf terminal was proclaimed to be a strategic project of the Republic of Croatia. In April 2015, work started with the construction and installation of caissons at the construction site zone, marking the starting point of intensive works on the construction of the wharf infrastructure. The first 4 caissons were produced in the port of Brindisi, Italy, and the remaining 45 ones will be produced at the construction site at the port of Rijeka. In order to accelerate the works, the caisson-production plant has been relocated to the Bratislava Wharf, for better protection from possible sea effects. Demolition works on a portion of warehouse No. 23 at the Bratislava Wharf were completed in August 2015 and on a portion of the Bratislava Wharf the initial caissons for the new wharf will be installed. During 2017 the construction is moving forward and all 49 caissons were produced and installed in final positions for the first phase of the new wharf. In May of 2017 work has begun on the suprastructure of caissons i.e. final wharf construction above caissons. At the same time the space behind the caissons is being filled up for the purpose of connecting the new wharf wall with the existing land. Late in 2015, location permit was obtained for reconstruction of the shunting station Rijeka – Cargo through the construction of a wagon transhipment station for the Zagreb pier container terminal. Further elaboration of technical documentation and obtaining of the construction permit took place during 2016 and 2017, while in 2018 the tender was published and the procedure for selecting the contractor was carried out. In October 2017 a contract was signed with the company MTBS for consulting services for preparation and implementation of concessionaire selection contest. Financial Statements for the RGP II Project 4 THE PORT OF RIJEKA AUTHORITY - RIJEKA The intention to grant a concession will be announced in March 2019. Publication of a tender for granting a concession is among the requirements of the IBRD accepted by the borrower as part of the last restructuring of the Project. The competition will be conducted in two rounds in accordance with the Public Procurement Act and the signing of the concession contract is planned for the third quarter of 2019. 1.3.2. Container Terminal Brajdica With a view to increasing the capacity of the Brajdica container terminal, and in compliance with the turnover growth plan, the 2nd stage of the terminal has been constructed, including wharf extension for an additional berth and adequately extended storage areas as well as the construction of a new entrance-exit point. The objective of the terminal expansion was also to allow for accommodation of considerably larger- sized vessels and to redouble the transhipment capacity. With the same objective, new wharf and storage equipment and wagon transhipment cranes were installed by concessionaires Jadranska vrata d.d. (Adriatic Gate). The 2nd stage of the construction was successfully completed in the past plan period. The construction of the transhipment station for railway wagons i.e. railway interface at the Brajdica container terminal is remaining. The total value of construction for the railway interface amounts to EUR 35,5 million. The financing will be realised by the funds from the Connecting Europe Facility (CEF) in the amount of EUR 30,2 million, and EUR 5,3 million are secured by the Rijeka Port Authority and HŽ Infrastruktura (HŽI), and if necessary these funds will be provided from the RC State Budget. The start of construction is expected in the second half of 2018 and the completion deadline is 24 months. During 2017 the project documentation was completed and eight construction permits were obtained. In June of 2017 a contract for project management was signed and the decision to select the most economically advantageous tender for the professional supervision of works was issued on March 27, 2018. Public procurement for construction work was published in August 2017 and the deadline for offers was extended multiple Times. Four offers were received. The examination and selection of the offers was done in cooperation with HŽI and Rijeka Port Authority. The decision on the selection of the most favourable tender was not appealed within the prescribed deadline. The contract was signed on 19.04.2018. The construction began with the date 30.05.2018. 1.4. PROJECT FUNDING BY IBRD LOANS 1.4.1. Rijeka Traffic Route I Redevelopment Project – IBRD Loan no. 47150 HR Pursuant to the RC Government Decision on initiating the process for the conclusion of a Guarantee Agreement for the Rijeka Traffic Route Redevelopment Project (Rijeka Gateway Project) between the Republic of Croatia and the International Bank for Reconstruction and Development, the Rijeka Port Authority has signed Loan Agreement no. 4715 - HR, whereby in July 2003 the IBRD granted a loan to the Rijeka Port Authority in the amount of USD 55.100.000,00 USD for repayment period of 15 years, including 5 year grace period. Financial Statements for the RGP II Project 5 THE PORT OF RIJEKA AUTHORITY - RIJEKA In compliance with IBRD regulations on the funding percentage in respect of particular cost categories, the RC Government has provided a national share in the Project of about HRK 320 million, as additional financial support to the Rijeka Port Authority. The repayment term is 15 years, including a 5-year grace period, and a variable interest rate (six months' LIBOR on USD). The interest falls due on a semestral basis, precisely on June 15th and December 15th each year. Taking into account the grace period, the first principal repayment amount fell due on 15th December, 2008 and the last one with interest will fall due on June 15th 2018. Repayment of the loan principal has been scheduled for payment by 20 equal semestral instalments, amounting to USD 2.755.000,00 USD each. Loan no 4715 HR has been used in full, with the last withdrawal made in 2011. In 2018, the loan was fully repaid. 1.4.2. Rijeka Traffic Route I Redevelopment Project – IBRD Loan no. 47151 HR Pursuant to the RC Government Decision dated April 26th 2007 on approval to be issued in respect of the Loan Agreement between the Rijeka Port Authority and IBRD intended for funding of additional expenses related to the Rijeka Traffic Route Redevelopment Project, and the RC Government Conclusion on approval of Reports on completed negotiations for signing the Guarantee Agreement between RC and IBRD and the Loan Agreement between the Rijeka Port Authority and IBRD dated May 16th 2007, the following documents were signed on June 11th 2007: - Loan Agreement no. 4715 – 1 HR between the International Bank for Reconstruction and Development (IBRD) and the Rijeka Port Authority, whereby IBRD granted an additional loan of EUR 35,3 million (equivalent to USD 48,0 million) to the Rijeka Port Authority, for funding of additional costs of the Rijeka Traffic Route Redevelopment Project, and - Guarantee Agreement no. 4715 – 1 HR between the International Bank for Reconstruction and Development (IBRD) and the Republic of Croatia for an additional loan for the Rijeka Traffic Route Redevelopment Project. The repayment term is 13 years including a 4-year grace period, and variable interest (EURIBOR + variable margin). Interest falls due on a semestral basis, precisely on April 15th and October 15th of each year. With the grace period taken into account, the first principal amount was due on October 15th 2011, and the last repayment of loan principal and interest will fall due on April 15th 2020. Loan no. HR 47151 has been used in full, with the last loan withdrawal made in 2012. The Loan has been under repayment and as at reporting date, December 31st 2018, the balance amounted to EUR 3.425.848,11 as disclosed in the financial statements for the Entity, which have been the subject of a separate audit. 1.4.3. Rijeka Traffic Route II Redevelopment Project – IBRD Loan no. 7638 HR Pursuant to RC Government Decision dated October 24th 2008 on approval for the conclusion of the Loan Agreement between the Rijeka Port Authority and the International Bank for Reconstruction and Development IBRD for the «Rijeka Traffic Route Redevelopment Project II», and the RC Government Conclusion on approval of Reports on completed negotiations for signing the Guarantee Agreement Financial Statements for the RGP II Project 6 THE PORT OF RIJEKA AUTHORITY - RIJEKA between RC and IBRD and the Loan Agreement between the Rijeka Port Authority and IBRD dated 14th November, 2008, the following documents were signed on April 17th 2009: - Loan Agreement no. 7638 HR between the International Bank for Reconstruction and Development (IBRD) and the Rijeka Port Authority, whereby IBRD granted a loan to the Rijeka Port Authority in the amount of EUR 84 million for funding the expenses of the Rijeka Traffic Route II Redevelopment Project, with the repayment term of 23 years including 10-year grace period and - Guarantee Agreement no. 7638 HR between the International Bank for Reconstruction and Development (IBRD) and the Republic of Croatia for the Rijeka Traffic Route II Redevelopment Project. The repayment term is 23 years including a 10-year grace period, and a variable interest rate (EURIBOR+variable margin). The interest falls due on a semestral basis, precisely on March 15th and September 15th each year thereafter. With the grace period taken into account, the first principal amount falls due on March 15th 2019, and the last one on September 15th 2031. 1.4.3.1. Project restructuring On November 7th 2013 the Rijeka Port Authority applied before the Ministry of Maritime Affairs, Transport and Infrastructure for project restructuring, which included: - request for prolongation of loan utilization term to June 15th 2017 - request for reclassification of loan categories, and - request for amendment in respect of the funding percentage by Loan from 95% to 75% and of the dynamics of the RC State Budget participation in Project funding. Total State Budget funds required for the national share in the Rijeka Traffic Route II Redevelopment Project (RGP II) amounted to EUR 17,5 million, precisely EUR 13,5 million of unutilised funds from Loans no. 47150 HR and 47151 HR (RGP I) and the national share of EUR 4 million related to Loan no 7638 HR. The amendment concerning the funding percentage by Loans no. 47150 HR and 47151 HR followed after the World Bank Letter (Amendment Letter) of February 2010, which allowed for 100% funds withdrawal from the main as well as from the additional loan up to their full utilization, meaning that in the course of 2010 and 2011 the funds from the State Budget amounting to EUR 13,5 million were not utilized. Pursuant to the Bank Letter, the utilization of the State Budget funds was delayed until the utilization of the third loan (Loan no. 7638 HR) has begun. Besides, due to the mandatory application of VAT on investments in the free zone as of July 1st 2013, pursuant to the new Act on VAT (Official Gazette No. 73/2013.), the estimated Project investment value for the period to the end of the Project has increased by EUR 20.6 million, and since the Port Authority is a non-profit organisation and VAT is not a deductible item, the overall Project value has increased from EUR 175,8 milion to EUR 196.4 million and in 2014, VAT in the amount of EUR 2,57 million for paid advance payment pursuant to Zagreb Wharf construction Contract the total Project value has increased to EUR 198.9 million. Following amendments to the Loan Agreement from February 4th 2014, the application for the Project and Loan 7638 HR restructuring was approved by the World Bank. A new loan utilization term was fixed, loan categories were reallocated (from funds intended for interest add-up to the category of works, equipment and services), and the loan funding percentage was changed from 95% to 75% of investments in the Project to apply as of February 4th 2014. Project monitoring indicators have also been revised. In January 2016 a request for new restructuring was submitted requesting the loan funding percentage to be increased from 75% to 95%, thus changing the dynamics of the RC State Budget funds participation in Financial Statements for the RGP II Project 7 THE PORT OF RIJEKA AUTHORITY - RIJEKA Project funding, in addition to reclassification of loan categories and prolongation of the loan utilization period. In July 2016 Amendment no. 2 to Loan Agreement was signed and with it the loan funding percentage was changed and loan categories were reclassified and the Amendment no. 3 to the Loan Agreement from June 2016 extended the loan closing date to Dec 31st 2018. In mid 2017, due to additional funds approved from the RC State budget for 2017 and in agreement with the World Bank, the loan funding percentage was decreased from 95% to 20% and in December 2017 the investment was funded entirely (100%) from the RC State Budget without utilizing the IBRD loan. By the end of the loan closing date in 2018 another change in loan financing percentage is planned: IBRD loan 95%: RC State Budget RH 5%. In 2018, until the end of the loan term, the financing ratio was IBRD loan 95% : State Budget of the Republic of Croatia 5%. In 2018, was withdrawn from a loan to a special account the amount of 4.852.042,33 EUR, direct payments to the contractor amounted to 6.452.801,54 EUR and additional withdrawal for the cost occurred in 2017 amounted to 4.557.832,30 EUR. So, the total amount withdrawn from the IBRD loan no. 7638 HR, in 2018, was 15.862.676,17 EUR. In 2018, an additional withdrawal of the loan was made in the amount of 4.557.832,30 EUR. The funds were allocated to the benefit of the project account - State Budget of the Republic of Croatia. An additional withdrawal refers to a retrospective withdrawal due to a change in percentage of eligible costs from 2017. Changes in the percentage of eligible costs have been applied to refund requests number 50 and 51. Applied percentages of the stated requirements for reimbursement were 20% i.e. 0%, and retroactively, according to the approval of the World Bank, applied the percentage of financing from the loan changed of 95%. The balance of the used part of the loan at 31 December 2018 is 82.584.364,43 EUR. The unused portion of the loan at 31 December 2018 amounts to 1.415.635,57 EUR. (84.000.000 – 82.584.364,43). After 31.12.2018. when the term of the loan expired was extinguished, another EUR 1.366.961,94 was withdrawn in respect of costs incurred up to 31 December 2018. and paid in a grace period of 4 months after the expiry of the loan term. The amount of the used part of the loan increased to EUR 83.951.326,37 and the unused portion of the loan amounted to EUR 48.673,63. 1.4.3.2. Events after the reporting date No significant events occurred by the date of publication of these financial statements that would require changes in the previously stated. Here follows the summary of the Financial Statements for the RGP II Project with relation to Loan no. 7638 HR. Financial Statements for the RGP II Project 8 THE PORT OF RIJEKA AUTHORITY - RIJEKA 2. REPORTING FRAMEWORK AND ACCOUNTING BASIS 2.1. REPORTING FRAMEWORK The reporting framework for the financial statements for the Project is presented under item 15. FINANCIAL MONITORING REPORTS FOR WORLD BANK-FINANCED PROJECTS: GUIDELINES FOR BORROWERS providing the possibility of reporting based either on the cash flow or on the accrual basis. The Contract on auditing of financial statements (CONTRACT NO: RGP/LCS/O93/2014 FOR CONSULTANTS' SERVICES), Annex ‘A’ dealing with Terms of Reference and Scope of Services, the contents of the Project Financial Statements is disclosed for Project reporting purposes: a) Summary of funds received, showing the World Bank, Project funds from other donors, and counterpart funds separately b) Summary of Expenditures shown under the main project headings and by main categories of expenditures, both for the current fiscal year and accumulated to-date c) Summary of Summary Reports used as the basis for the submission of withdrawal applications, d) Statement of Designated Account, e) Balance Sheet showing Accumulated Funds of the Project, bank balances, other assets of the Project, and liabilities, if any. 2.2. ACCOUNTING BASIS OF REPORTING For reporting purposes, the reporting basis applied to these Project financial statements is the accounting cash flow basis. For practical reasons, for financial reporting purposes, the Summary of sources and the Summary of Expenses have been combined into the Summary of Project sources and expenses and, considering the cash flow reporting basis, neither the Project liabilities nor the Project Balance sheet have been disclosed as a separate report since all data on the property being the object of investments have been disclosed in the Summary of Project sources and expenses. In compliance with the above mentioned, the financial statements consist of the following: a) Summary of Project sources and expenses b) Summary of summary reports (SOE) c) Summary of the designated account. Financial Statements for the RGP II Project 9 THE PORT OF RIJEKA AUTHORITY - RIJEKA 3. BASIC DEFINITIONS AND CONVENTIONS 3.1. DEFINITIONS The abbreviation IBRD will be used hereinafter for the World Bank – International Bank for Reconstruction and Development. Project will be used as abbreviation of the Rijeka Gateway II (RGP II) Project. The following expressions: Entity, Organisation, Non-profit organisation, where referring to the Rijeka Port Authority as a whole in the context of this report, will represent the synonym or the abbreviated name for the Rijeka Port Authority. 3.2. CONVENTIONS All amounts will be expressed in the agreed Euro monetary unit (EUR) or another monetary unit, where the report so requires. The amounts will not be rounded up or down but will be presented in full amount together with smaller units of the basic monetary unit - cents in the case of Euro. The monetary units so disclosed will be marked as EUR, as the basic contractual currency. Other currency units will be marked with their international currency code – e.g. Croatian kuna as HRK. If any amount needs to be disclosed in a different way, this will be noted in the text. 4. SUMMARY OF FUNDS RECEIVED, SHOWING THE WORLD BANK (IBRD) PROJECT FUNDS AND THE COUNTERPART FUNDS (RC BUDGET), AND SUMMARY OF EXPENDITURES BY THE MAIN PROJECT HEADINGS AND BY MAIN CATEGORIES OF EXPENDITURES FOR THE PRECEDING PERIOD CUMULATIVELY, FOR THE CURRENT FISCAL YEAR, AND THOSE ACCUMULATED TO DATE. 4.1. INTRODUCTION The Summary of sources disclosing the fund sources, namely listing the funds received from IBRD Loan No. 7638 HR separately from those received from other sources, from the RC Budget in the case of this Project. The Summary of Project expenses discloses expenses by their main categories. For the purpose of practical disclosures and their logical and accounting correlation, these two reports are disclosed integrally, as following below. Financial Statements for the RGP II Project 10 THE PORT OF RIJEKA AUTHORITY - RIJEKA 4.2. STATEMENT OF PROJECT SOURCES AND EXPENSES Cumulative at end of 2017. During 2018. Cumulative at end of 2018. DESCRIPTION source Source Source Note IBRD RC Budget Total % IBRD RC Budget Total % IBRD RC Budget Total % of Project Funding A) Total sources of funds: 66.721.688,26 14.234.380,96 80.956.069,22 100% 11.304.843,87 5.238.894,41 16.543.738,28 100% 78.026.532,13 19.473.275,37 97.499.807,50 100% Local funds 0 14.234.380,96 14.234.380,96 18% 681.062,11 681.062,11 4% 0,00 14.915.443,07 14.915.443,07 15% IBRD funds - 7638 (Loan account) 4.3. 66.721.688,26 0,00 66.721.688,26 82% 11.304.843,87 4.557.832,30 15.862.676,17 96% 78.026.532,13 4.557.832,30 82.584.364,43 85% B) Total uses of funds 4.4. 65.370.875,54 14.228.984,41 79.599.859,95 12.591.974,01 681.259,81 13.273.233,82 77.962.849,55 14.910.244,24 92.873.093,79 Fee refund 210.000,00 0,00 210.000,00 0 0 0 210.000,00 0 210.000,00 Capitalization of interest and 70.314,09 0,00 70.314,09 0 0 0 70.314,09 0 70.314,09 other charges Works: 60.616.250,35 13.107.972,05 73.724.222,40 10.943.609,33 594.388,96 11.537.998,29 71.559.859,68 13.702.361,02 85.262.220,70 Goods: 480.183,08 94.713,26 574.896,34 0 0 0 480.183,08 94.713,27 574.896,35 Consulting services: 3.994.128,02 1.026.299,11 5.020.427,13 1.648.364,68 86.870,85 1.735.236 5.642.492,70 1.113.169,95 6.755.662,65 % of funds used 82% 18% 100% 95% 5% 100% 84% 16% 100% C) Closing Cash Balance 1.350.812,72 1.356.209,27 -1.287.130,14 3.270.504,46 63.682,58 4.626.713,71 (A-B) Project Designated Account (DA) 6.2. 1.350.812,72 1.350.812,72 -1.287.130,14 -1.287.130,14 63.682,58 63.682,58 * Project local account: 5.396,55 4.557.634,60 4.562.996,77 - exch. rate diff. during the year (5.363,29) 5.362,17 - exch. rate diff. as at 31 Dec. st 1,10 Account balance as at 31st Dec. 1.350.812,72 34,36 1.350.847,08 -1.287.130,14 4.562.996,77 3.275.866,63 63.682,58 4.563.031,13 4.626.713,71 * Note: The local project account is denominated in national currency, HRK, and has been converted for this report requirements applying the exchange rate ruling as at the transaction date, ultimately showing the actual balance as at December 31st applying the closing exchange rate for that day. Financial Statements for the RGP II Project 11 THE PORT OF RIJEKA AUTHORITY - RIJEKA 4.3. BALANCE OF IBRD LOAN NO. 7368 HR 4.3.1. Breakdown of changes during the year Withdrawal Type of from the loan payment from DESCRIPTION Note Date main account the loan main in EUR account Cumulative at the end of 2017 66.721.688,26 Withdrawal to DA (Appl.no.51) 4.3.2 1-Feb-18 730.720,42 Reimbursement Direct payments through IBRD (Appl.no. 52) JV G.Lavori 4.3.3 23-Mar-18 757.260,04 Works Withdrawal to DA (Appl.no.53) 4.3.2 3-May-18 1.347.521,55 Reimbursement Withdrawal to DA (Appl.no.54) 4.3.2 6-Jun-18 1.649.384,91 Reimbursement Direct payments through IBRD (Appl.no. 55) JV G.Lavori 4.3.3 20-Jun-18 926.657,85 Works Direct payments through IBRD (Appl.no. 56) JV G.Lavori 4.3.3 9-Aug-18 1.433.004,24 Works Direct payments through IBRD (Appl.no. 57) JV G.Lavori 4.3.3 6-Sep-18 1.086.570,20 Works Withdrawal to DA (Appl.no.58) 4.3.2 11-Sep-18 1.124.415,45 Reimbursement Direct payments through IBRD (Appl.no. 59) JV G.Lavori 4.3.3 11-Sep-18 1.084.503,84 Works Retroact.reimb.due to change of elig.% (Appl.no.50,51) 4.3.3 23-Oct-18 4.557.832,30 Reimbursement Direct payments through IBRD (Appl.no. 62) JV G.Lavori 4.3.3 29-Nov-18 608.022,56 Works Direct payments through IBRD (Appl.no. 63) JV G.Lavori 4.3.3 21-Dec-18 556.782,81 Works Total for the year 2018 15.862.676,17 TOTAL (Cumulative by end 2018) 82.584.364,43 Loan balance as at December 31st 2018 amounted to EUR 82.584.364,43 (2017.: EUR 66.721.688,26). *** OVERVIEW OF LOAN CHANGE IN 2019: At the date of the preparation of these financial statements, the amount of the loan used is 83.951.326,37 EUR and the unused portion of the loan is 48.673,63 EUR. Loan increase in 2019 refers to: - direct payment to Grandi Lavori in the amount of 868,654.21 EUR, - refunded funds on the request for withdrawal no. 66 in the amount of 448.097,94 EUR – on date March 6th 2019 - refunded funds on the request for withdrawal no. 66 in the amount of 50.209,79 EUR – on date March 26th 2019 Financial Statements for the RGP II Project 12 THE PORT OF RIJEKA AUTHORITY - RIJEKA 4.3.2. Breakdown of loan increases during the year through withdrawals to the Project designated account Withdrawal from the loan Type of payment from DESCRIPTION Date main account the loan main account in EUR Withdrawal to DA (Appl.no.51) 1-Feb-18 730.720,42 Reimbursement Withdrawal to DA (Appl.no.53) 3-May-18 1.347.521,55 Reimbursement Withdrawal to DA (Appl.no.54) 6-Jun-18 1.649.384,91 Reimbursement Withdrawal to DA (Appl.no.58) 11-Sep-18 1.124.415,45 Reimbursement Retroact.reimb.due to change of elig.% (Appl.no.50,51..) 23-Oct-18 4.557.832,30 Reimbursement TOTAL 9.409.874,63 4.3.3 Breakdown of loan increases during the year through direct Bank remittances Withdrawal Type of from the loan payment from DESCRIPTION Date main account in the loan main EUR account Direct payments through IBRD (Appl.no. 52) JV G.Lavori 23-Mar-18 757.260,04 Works Direct payments through IBRD (Appl.no. 55) JV G.Lavori 20-Jun-18 926.657,85 Works Direct payments through IBRD (Appl.no. 56) JV G.Lavori 9-Aug-18 1.433.004,24 Works Direct payments through IBRD (Appl.no. 57) JV G.Lavori 6-Sep-18 1.086.570,20 Works Direct payments through IBRD (Appl.no. 59) JV G.Lavori 11-Sep-18 1.084.503,84 Works Direct payments through IBRD (Appl.no. 62) JV G.Lavori 29-Nov-18 608.022,56 Works Direct payments through IBRD (Appl.no. 63) JV G.Lavori 21-Dec-18 556.782,81 Works TOTAL 6.452.801,54 Financial Statements for the RGP II Project 13 THE PORT OF RIJEKA AUTHORITY - RIJEKA 4.4. DETAILED BREAKDOWN OF PROJECT EXPENSES DURING THE YEAR AND CUMULATIVELY AS AT DECEMBER 31st 4.4.1. Table disclosure Changes in 2018 Cumulatively by end 2018 Project Project Project expenses IBRD RC Budget IBRD RC Budget expenses expenses Fee refund 0,00 0,00 0 210.000,00 0,00 210.000,00 Capitalization of interest 0,00 0,00 0 70.314,09 0,00 70.314,09 and other expenses Works: 10.943.609,33 594.388,96 11.537.998,29 71.559.859,68 13.702.361,02 85.262.220,70 - Construction of Brajdica CT 9.495.858,21 696.637,04 10.192.495,25 Extension - Section A - Construction of Brajdica CT - 52.209,42 17.357,20 69.566,62 Section B - Works on installation of new 653.048,02 34.265,16 687.313,18 custom fence in Rijeka basin Construction of Zagreb berth D&B 10.943.609,33 594.388,96 11.537.998,29 60.958.672,40 12.821.068,08 73.779.740,48 - Upgrading of BCT new berth - 400.071,63 133.033,55 533.105,18 Buoy Goods: 480.183,08 94.713,27 574.896,35 - ID cards & Video CCTV (Rijeka 184.475,54 9.707,35 194.182,89 basin) - ID cards & Video CCTV (Brajdica 295.707,54 85.005,92 380.713,46 new entrance) Consultant's services: 1.648.364,68 86.870,85 1.735.235,53 5.642.492,70 1.113.169,95 6.755.662,65 - TA for analysis of the PCS in 7.494,92 42.259,12 49.754,04 ports of Ploče and Rijeka - Project doc's for works on sea 33.641,56 1.776,33 35.417,89 88.325,42 87.084,91 175.410,33 bottom deepening - Design doc's for railway station 68.349,65 3.602,58 71.952,23 276.411,17 31.882,98 308.294,15 on Brajdica CT - Design doc's for railway station 107.086,71 5.638,27 112.724,98 216.933,83 25.666,00 242.599,83 on Zagreb CT - Supervision of services for the 14.239,11 4.715,48 18.954,59 Buoy for prow mooring on BCT - Audit services (2015-2017) 12.730,70 669,74 13.400,44 37.987,15 1.995,15 39.982,30 - Audit services (2012 – 2014) 43.890,06 9.792,52 53.682,58 Port Environmental Protection Plan (EIA) for Zagreb pier & 41.729,03 13.893,55 55.622,58 Brajdica Container Terminal - Legal assistance 14.809,51 774,47 15.583,98 101.117,30 10.529,58 111.646,88 Financial Statements for the RGP II Project 14 THE PORT OF RIJEKA AUTHORITY - RIJEKA - Project (Feasibility Study) & BD - 66.770,29 22.194,32 88.964,61 waste coll.ship - Environmental monitoring in the 23.676,72 1.242,58 24.919,30 113.575,21 14.619,14 128.194,35 PRA area Supervising works Brajdica CT 351.000,96 24.207,74 375.208,70 Designer's supervising works 37.459,88 1.968,86 39.428,74 Brajdica CT Supervising works ZCT 717.571,84 37.743,16 755.315,00 3.040.606,38 694.677,03 3.735.283,41 - Implementation of Environmental Management 45.603,18 2.393,28 47.996,46 System Preparation of design documentation for port road 64.108,81 3.375,43 67.484,24 64.108,81 3.375,43 67.484,24 connection to road D-403 Environm.Perf.Assesment (EPA) 36.884,91 1.943,35 38.828,26 36.884,91 1.943,35 38.828,26 for Bulk Cargo Term.Bakar Selection of concess./devel.(Delta 63.515,00 13.440,71 76.955,71 - P. Baros) TA in selection of concessionaire 569.504,27 30.104,94 599.609,21 569.504,27 30.104,94 599.609,21 on ZCT Technical assist.in impl.of EU 160.397,22 25.872,93 186.270,15 projects - Zagreb Wharf concession 138.900,00 12.544,28 151.444,28 arrangements - Options for Impr.Rail Freight Services to the Rijeka Port Area- 62.167,10 17.071,14 79.238,24 Logistic/Market - Options for Improving Rail Freight Services to the Rijeka port 63.871,50 20.937,51 84.809,01 area - Rail Spec Total Uses of Funds 12.591.974,01 681.259,81 13.273.233,82 77.962.849,55 14.910.244,25 92.873.093,80 4.4.2. Table overview of expense payments for the Project by the source/manner of payment DESCRIPTION AMOUNT Direct payment to suppliers from the Loan account - see point 4.3.3. 6.452.801,54 Payments from the Project designated account - see point 6.3.2. 6.139.172,47 TOTAL 12.591.974,01 Financial Statements for the RGP II Project 15 THE PORT OF RIJEKA AUTHORITY - RIJEKA 5. SUMMARY ON SUMMARY REPORTS (FOR SUBMISSION OF WITHDRAWAL APPLICATIONS) – SUPPORTING DOCUMENTATION – STATEMENT OF EXPENSES (SOE) 5.1. INTRODUCTION As provided for by the Loan Contract No. 7638 HR (Additional Instructions; Disbursement; Item III. Reporting on Use of Loan Proceeds) the supporting documentation needs to be submitted along with the loan withdrawal application, precisely for eligible costs paid from the designated account in respect of: - works of contractual value equivalent to or exceeding the amount of USD 5.000.000; - equipment of contractual value equivalent to or exceeding the amount of USD 1.000.000.; - consulting services of contractual value equivalent to or exceeding USD 100.000 as well as - individual consultants’ services of contractual value equivalent to or exceeding USD 50.000. For any other payments the use of the Statement of Expenses - SOE form has been prescribed. In 2018, the Statement of Expenses (SOE) form was used for submitting the Withdrawal Application, as follows: ITEM DESCRIPTION AMOUNT Withdrawal application no. 51 7.896,80 Withdrawal application no. 53 2.569,32 Withdrawal application no. 54 36.884,91 Withdrawal application no. 58 12.730,70 TOTAL 60.081,73 Here follows a breakdown of the Statement of Expenses used in 2018, disclosed by the supplier. 5.1.1. Statement of expenses (SOE) for 2018, by the supplier Financial Statements for the RGP II Project 16 THE PORT OF RIJEKA AUTHORITY - RIJEKA Contractor/ Contract number/ Works/ Invoices Amount paid Date of supplier date Services Eligible IBRD from payment Currency Total contract invoice Total Paid loan designated from clause amount amount invoice invoice funded account designated (HRK) amount amount (EUR) account (HRK) (HRK) 1 2 3 4 5 6 7 8 9 10 11 Contract no. 5.000,00 5.000,00 95 1.000,00 € 133,96 26.10.2017 Law Firm Vukić, RGP/SSS/110/2016 legal 5.000,00 5.000,00 95 1.000,00 € 133,96 26.10.2017 HRK 225.000,00 Jelušić,... dtd. August assistance 01.2016. 5.000,00 5.000,00 95 1.000,00 € 133,96 26.10.2017 TOTAL € 401,88 Contract no. 70.250,00 70.250,00 95 14.050,00 € 1.884,64 19.10.2017 RGP/CQS/098/2014 126.450,00 126.450,00 95 25.290,00 € 3.369,75 16.11.2017 INFO-NAD consultant dtd. June 29,2017 HRK 374.625,00 j.d.o.o. services & Addendum no.1 84.300,00 84.300,00 95 16.860,00 € 2.240,53 23.11.2017 dtd.October 2017. TOTAL € 7.494,92 5.000,00 5.000,00 95 4.750,00 € 642,33 12.02.2018 Contract no. Law Firm Vukić, RGP/SSS/110/2016 legal 5.000,00 5.000,00 95 4.750,00 € 642,33 12.02.2018 HRK 225.000,00 Jelušić,... dtd. August assistance 5.000,00 5.000,00 95 4.750,00 € 642,33 12.02.2018 01,2016. 5.000,00 5.000,00 95 4.750,00 € 642,33 12.02.2018 TOTAL € 2.569,32 Contract no. Dvokut Ecro RGP/CQS/109/2016 consultant HRK 286.537,50 286.537,50 286.537,50 95 272.210,63 € 36.884,91 11.05.2018 d.o.o. Zagreb dtd. January services 31,2018. TOTAL € 36.884,91 Financial Statements for the RGP II Project 17 THE PORT OF RIJEKA AUTHORITY - RIJEKA Contract no. HLB Inženjerski RGP/LCS/093/2014 biro d.o.o. audit services HRK 404.875,00 98.750,00 98.750,00 95 93.812,50 € 12.730,70 30.05.2018 dtd. May 13, 2015.; Rijeka Add. No.1 TOTAL € 12.730,70 Aggregate total € 60.081,73 Financial Statements for the RGP II Project 18 THE PORT OF RIJEKA AUTHORITY - RIJEKA 5.1.2. Financing ratio during the reporting period For payments made to suppliers in 2018, financing ratio of 95% : 5% was applied. 6. STATEMENT OF THE PROJECT DESIGNATED ACCOUNT 2018 AND OF THE LOCAL PROJECT ACCOUNT 6.1. ACCOUNT DESCRIPTION Account no. 71019000 - 09538488 Account currency EUR Deposit Bank Erste & Steiermärkische banka d.d. Rijeka Address Jadranski trg 3a, Rijeka, Hrvatska Related loan IBRD loan no. 7638 HR from April 17th 2009 Loan amount 84.000.000 EUR 6.2. STATEMENT OF DESIGNATED ACCOUNT - TABLE ITEM DESCRIPTION Note no TURNOVER (EUR) Opening balance as at Jan 1st 2018 1.350.812,72 Add: Cumulative contingent discrepancies IBRD advances during the year 6.3.1. 4.852.042,33 Less: Fees to IBRD during the year Reduction: Amount of eligible expenses paid during the year 6.3.2. (6.139.172,47) Reduction: Earned interest Closing account balance as at December 31st 2018 63.682,58 Financial Statements for the RGP II Project 19 THE PORT OF RIJEKA AUTHORITY - RIJEKA 6.2.1. Account balance As at December 31st the Project Designated Account balance amounted to EUR 63.682,58 and changes during the year are explained in more detail under the following points. In 2019, from the Project Designated Account, other inovices were paid for 2018 in the amount of 63,682.58 EUR and the balance of the Special Account of the Project on February 19, 2019 was reduced to 0 EUR. 6.3. DETAILED BREAKDOWN Here follows a detailed breakdown of incoming and outgoing payments from the Project Designated Account. 6.3.1. Table of individual inflows to the Project Designated Account during the year Withdrawal from Type of payment DESCRIPTION Date main loan account in from main loan EUR account Withdrawal to DA (Appl.no.51) 01.02.18. 730.720,42 Reimbursement Withdrawal to DA (Appl.no.53) 03.05.18. 1.347.521,55 Reimbursement Withdrawal to DA (Appl.no.54) 06.06.18. 1.649.384,91 Reimbursement Withdrawal to DA (Appl.no.58) 11.09.18. 1.124.415,45 Reimbursement TOTAL 4.852.042,33 6.3.2. Table of individual payments from the Project Designated Account during the year including types of contracts and paid costs „Prior-No Payment Withdra Date of obj.“ or „Post amount Type of cost wal No Name of supplier Contract payment appl. review“ from DA in paid from DA no. contract EUR MTBS B.V. Consulting 1 Rotterdam RGP/QBS/083/2016 "No objection" 16-Jan-18 68.450,00 services 51 MTBS B.V. Consulting 2 Rotterdam RGP/QBS/083/2016 "No objection" 16-Jan-18 13.083,14 services 51 Law Firm Vukić i Consulting 3 partn.(2016.) RGP/SSS/110/2016 "No objection" 12-Feb-18 642,33 services 53 Law Firm Vukić i Consulting 4 partn.(2016.) RGP/SSS/110/2016 "No objection" 12-Feb-18 642,33 services 53 Law Firm Vukić i Consulting 5 partn.(2016.) RGP/SSS/110/2016 "No objection" 12-Feb-18 642,33 services 53 Law Firm Vukić i Consulting 6 partn.(2016.) RGP/SSS/110/2016 "No objection" 12-Feb-18 642,33 services 53 Investinženjering Consulting 7 d.o.o. (ZCT) 063/2010 "No objection" 14-Feb-18 4.901,27 services 53 8 HaskoningDHV 063/2010 "No objection" 14-Feb-18 2.226,95 Consulting 53 Financial Statements for the RGP II Project 20 THE PORT OF RIJEKA AUTHORITY - RIJEKA Nederland B.V. (ZCT) services HaskoningDHV Consulting 9 Nederland B.V. (ZCT) 063/2010 "No objection" 14-Feb-18 11.637,08 services 53 Investinženjering Consulting 10 d.o.o. (ZCT) 063/2010 "No objection" 15-Feb-18 26.009,82 services 53 JV Grandi Lavori 11 Fincosit S.p.A. … RGP-CW-050/08-ICB "No objection" 20-Feb-18 461.979,33 Works 53 JV Grandi Lavori 12 Fincosit S.p.A. … RGP-CW-050/08-ICB "No objection" 26-Feb-18 124.581,44 Works 53 ŽPD d.d. Zagreb Consulting 13 (ZCT) 091/2013 "No objection" 14-Mar-18 107.086,71 services 53 Investinženjering Consulting 14 d.o.o. (ZCT) 063/2010 "No objection" 14-Mar-18 33.836,03 services 53 Haskoning DHV Consulting 15 Nederland B.V. (ZCT) 063/2010 "No objection" 14-Mar-18 4.504,36 services 53 Haskoning DHV Consulting 16 Nederland B.V. (ZCT) 063/2010 "No objection" 14-Mar-18 24.086,33 services 53 DARH 2 d.o.o. Consulting 17 Samobor RGP/CQS/102/2015 "No objection" 19-Mar-18 11.832,77 services 53 Investinženjering Consulting 18 d.o.o. (ZCT) 063/2010 "No objection" 12-Apr-18 35.155,65 services 53 Haskoning DHV Consulting 19 Nederland B.V. (ZCT) 063/2010 "No objection" 12-Apr-18 3.287,60 services 53 Haskoning DHV Consulting 20 Nederland B.V. (ZCT) 063/2010 "No objection" 12-Apr-18 17.455,62 services 53 JV Grandi Lavori 21 Fincosit S.p.A. … RGP-CW-050/08-ICB "No objection" 25-Apr-18 476.371,27 Works 53 JV Grandi Lavori 22 Fincosit S.p.A. … RGP-CW-050/08-ICB "No objection" 27-Apr-18 126.535,64 Works 54 JV Grandi Lavori 23 Fincosit S.p.A. … RGP-CW-050/08-ICB "No objection" 08-May-18 228.735,13 Works 54 JV Grandi Lavori 24 Fincosit S.p.A. … RGP-CW-050/08-ICB "No objection" 09-May-18 857.960,28 Works 54 Consulting 25 Dvokut Ecro d.o.o. RGP/CQS/109/2016 "No objection" 11-May-18 36.884,91 services 54 Haskoning DHV Consulting 26 Nederland B.V. (ZCT) 063/2010 "No objection" 14-May-18 4.738,10 services 54 Haskoning DHV Consulting 27 Nederland B.V. (ZCT) 063/2010 "No objection" 14-May-18 25.049,51 services 54 Investinženjering Consulting 28 d.o.o. (ZCT) 063/2010 "No objection" 14-May-18 35.633,24 services 54 ŽPD d.d. Zagreb Consulting 29 (BCT) 091/2013 "No objection" 25-May-18 68.349,65 services 54 Rijekaprojekt d.o.o. Consulting 30 (conn.to road D403) RGP/CQS/111/2017 "Post review" 25-May-18 21.444,73 services 54 MTBS B.V. Consulting 31 Rotterdam RGP/QBS/083/2016 "No objection" 25-May-18 38.703,72 services 54 MTBS B.V. Consulting 32 Rotterdam RGP/QBS/083/2016 "No objection" 25-May-18 205.350,00 services 54 HLB Inženjerski biro Consulting 33 d.o.o. Rijeka RGP/LCS/093/2014 "No objection" 30-May-18 12.730,70 services 58 Investinženjering Consulting 34 d.o.o. (ZCT) 063/2010 "No objection" 14-Jun-18 37.819,61 services 58 Haskoning DHV Consulting 35 Nederland B.V. (ZCT) 063/2010 "No objection" 14-Jun-18 3.448,26 services 58 Haskoning DHV Consulting 36 Nederland B.V. (ZCT) 063/2010 "No objection" 14-Jun-18 18.278,75 services 58 JV Grandi Lavori 37 Fincosit S.p.A. … RGP-CW-050/08-ICB "No objection" 06-Jul-18 246.947,86 Works 58 38 JV Grandi Lavori RGP-CW-050/08-ICB "No objection" 06-Jul-18 379.733,96 Works 58 Financial Statements for the RGP II Project 21 THE PORT OF RIJEKA AUTHORITY - RIJEKA Fincosit S.p.A. … Haskoning DHV Consulting 39 Nederland B.V. (ZCT) 063/2010 "No objection" 12-Jul-18 21.991,23 services 58 Haskoning DHV Consulting 40 Nederland B.V. (ZCT) 063/2010 "No objection" 12-Jul-18 4.125,09 services 58 Investinženjering Consulting 41 d.o.o. (ZCT) 063/2010 "No objection" 12-Jul-18 36.309,31 services 58 Investinženjering Consulting 42 d.o.o. (ZCT) 063/2010 "No objection" 10-Aug-18 36.550,38 services 58 Haskoning DHV Consulting 43 Nederland B.V. (ZCT) 063/2010 "No objection" 10-Aug-18 4.467,29 services 58 Haskoning DHV Consulting 44 Nederland B.V. (ZCT) 063/2010 "No objection" 10-Aug-18 23.952,32 services 58 DARH 2 d.o.o. Consulting 45 Samobor RGP/CQS/102/2015 "No objection" 14-Aug-18 11.843,95 services 58 JV Grandi Lavori 46 Fincosit S.p.A. … RGP-CW-050/08-ICB "No objection" 17-Aug-18 286.216,74 Works 58 Rijekaprojekt d.o.o. Consulting 47 (Sea Bed Deep.) RGP/CQS/106/2015 "No objection" 05-Sep-18 33.641,56 services JV Grandi Lavori 48 Fincosit S.p.A. … RGP-CW-050/08-ICB "No objection" 07-Sep-18 284.258,51 Works Haskoning DHV Consulting 49 Nederland B.V. (ZCT) 063/2010 "No objection" 14-Sep-18 16.441,01 services Investinženjering Consulting 50 d.o.o. (ZCT) 063/2010 "No objection" 14-Sep-18 36.582,78 services Haskoning DHV Consulting 51 Nederland B.V. (ZCT) 063/2010 "No objection" 14-Sep-18 3.070,68 services Law Firm Vukić i Consulting 52 partn.(2016.) RGP/SSS/110/2016 "No objection" 27-Sep-18 6.440,68 services JV Grandi Lavori 53 Fincosit S.p.A. … RGP-CW-050/08-ICB "No objection" 04-Oct-18 202.179,96 Works JV Grandi Lavori 54 Fincosit S.p.A. … RGP-CW-050/08-ICB "No objection" 04-Oct-18 51.301,00 Works Investinženjering Consulting 55 d.o.o. (ZCT) 063/2010 "No objection" 12-Oct-18 22.419,02 services HaskoningDHV Consulting 56 Nederland B.V. (ZCT) 063/2010 "No objection" 12-Oct-18 4.979,07 services HaskoningDHV Consulting 57 Nederland B.V. (ZCT) 063/2010 "No objection" 12-Oct-18 26.463,79 services *** Law Firm Vukić i Consulting 58 partn.(2016.) RGP/SSS/110/2016 "No objection" 17-Oct-18 1.289,88 services Law Firm Vukić i Consulting 59 partn.(2016.) RGP/SSS/110/2016 "No objection" 17-Oct-18 644,94 services Law Firm Vukić i Consulting 60 partn.(2016.) RGP/SSS/110/2016 "No objection" 17-Oct-18 644,94 services Law Firm Vukić i Consulting 61 partn.(2016.) RGP/SSS/110/2016 "No objection" 17-Oct-18 644,94 services Law Firm Vukić i Consulting 62 partn.(2016.) RGP/SSS/110/2016 "No objection" 17-Oct-18 644,94 services Law Firm Vukić i Consulting 63 partn.(2016.) RGP/SSS/110/2016 "No objection" 17-Oct-18 644,94 services Law Firm Vukić i Consulting 64 partn.(2016.) RGP/SSS/110/2016 "No objection" 17-Oct-18 644,94 services MTBS B.V. Consulting 65 Rotterdam RGP/QBS/083/2016 "No objection" 24-Oct-18 205.350,00 services JV Grandi Lavori 66 Fincosit S.p.A. … RGP-CW-050/08-ICB "No objection" 25-Oct-18 477.329,67 Works MTBS B.V. Consulting 67 Rotterdam RGP/QBS/083/2016 "No objection" 26-Oct-18 38.567,41 services 68 Law Firm Vukić i RGP/SSS/110/2016 "No objection" 30-Oct-18 639,99 Consulting Financial Statements for the RGP II Project 22 THE PORT OF RIJEKA AUTHORITY - RIJEKA partn.(2016.) services Rijekaprojekt d.o.o. Consulting 69 (conn.to road D403) RGP/CQS/111/2017 "Post review" 30-Oct-18 42.664,08 services JV Grandi Lavori 70 Fincosit S.p.A. … RGP-CW-050/08-ICB "No objection" 05-Nov-18 124.376,96 Works HaskoningDHV Consulting 71 Nederland B.V. (ZCT) 063/2010 "No objection" 14-Nov-18 19.820,48 services Investinženjering Consulting 72 d.o.o. (ZCT) 063/2010 "No objection" 14-Nov-18 34.626,92 services HaskoningDHV Consulting 73 Nederland B.V. (ZCT) 063/2010 "No objection" 14-Nov-18 3.721,62 services HaskoningDHV Consulting 74 Nederland B.V. (ZCT) 063/2010 "No objection" 13-Dec-18 21.479,38 services HaskoningDHV Consulting 75 Nederland B.V. (ZCT) 063/2010 "No objection" 13-Dec-18 4.050,76 services Investinženjering Consulting 76 d.o.o. (ZCT) 063/2010 "No objection" 13-Dec-18 39.989,91 services Investinženjering Consulting 77 d.o.o. (ZCT) 063/2010 "No objection" 27-Dec-18 36.888,49 services HaskoningDHV Consulting 78 Nederland B.V. (ZCT) 063/2010 "No objection" 27-Dec-18 4.991,62 services HaskoningDHV Consulting 79 Nederland B.V. (ZCT) 063/2010 "No objection" 28-Dec-18 26.582,51 services JV Grandi Lavori 80 Fincosit S.p.A. … RGP-CW-050/08-ICB "No objection" 28-Dec-18 162.300,04 Works TOAL AMOUNT PAID FROM DA DURING THE YEAR: 6.139.172,47 *** Items 47 to 80 in the table are paid to suppliers in 2018. These costs are not refunded. They are submitted to justify initial advance payment received 27.11.2012. in the amount of EUR 2 mil. 6.4. PROJECT ACCOUNT REPORT – RC STATE BUDGET 6.4.1. Account description Account no. 1500016991 Account currency HRK Deposit Bank Erste & Steiermärkische banka d.d. Rijeka Address Rijeka, Jadranski trg 3a, Croatia RC State Budget For counterpart share funds withdrawal (RC State Budget) – initially in HKR counter- value of EUR 4.000.000 EUR; subsequently increased by: - EUR 13.500.000 EUR carried forward from RGP I; - EUR 20.584.000 VAT on free zone investments and - EUR 2.572.000 VAT on advance related to ZCT Construction Loan; - EUR 40.656.000 –non-refundable total -EUR 12.182.915 – reduction under project restructuring application; - EUR 28.473.085 – non- refundable funds after reduction related to project restructuring request from Jan 2016 - during 2017 HRK 43.110.928,97 i.e. EUR 5.746.734,34 were approved and utilised - in 2018 HRK 5,046,267.91 i.e. EUR 681,259.81 were approved and utilised Financial Statements for the RGP II Project 23 THE PORT OF RIJEKA AUTHORITY - RIJEKA 6.4.2. Breakdown of withdrawals and payments from the RC Designated Project Account Date of ITEM DESCRIPTION HRK EUR payment Separate Cumulative Separate Cumulative Opening balance Jan 01st 2018 251,36 34,36 Increase: Remittance 26-Feb-18 348.519,80 Remittance 30-Mar-18 399.007,86 Remittance 30-Apr-18 685.923,24 Remittance 05-Jun-18 621.606,45 Remittance 13-Jul-18 750.283,33 Remittance 14-Sep-18 563.538,91 Remittance 15-Oct-18 674.952,23 Remittance 20-Nov-18 374.540,98 Remittance 14-Dec-18 326.356,07 Remittance 20-Dec-18 301.539,04 5.046.267,91 681.259,81 Remittance 23.10-18 33.832.789,13 4.557.832,30 TOTAL: 38.879.057,04 5.239.092,11 Reduction JV Grandi Lavori Fincosit S.p.A. 7-Mar-18 231.410,01 31.144,54 HaskoningDHV Nederland B.V. (ZCT) 7-Mar-18 5.482,00 737,80 HaskoningDHV Nederland B.V. (ZCT) 7-Mar-18 11.160,30 1.502,02 Investinženjering d.o.o. (ZCT) 7-Mar-18 12.065,30 1.623,82 Investinženjering d.o.o. (ZCT) 7-Mar-18 13.237,01 1.781,52 MTBS B.V. Rotterdam 7-Mar-18 32.271,73 4.343,32 Law Firm Vukić i partn.(2016.) 7-Mar-18 250,00 33,65 Law Firm Vukić i partn.(2016.) 7-Mar-18 250,00 33,65 Law Firm Vukić i partn.(2016.) 7-Mar-18 250,00 33,65 Law Firm Vukić i partn.(2016.) 7-Mar-18 250,00 33,65 ŽPD d.d. Zagreb (ZCT) 7-Mar-18 41.893,45 5.638,27 JV Grandi Lavori Fincosit S.p.A. 3-Apr-18 372.566,64 50.129,89 HaskoningDHV Nederland B.V. (ZCT) 3-Apr-18 8.118,19 1.092,33 Investinženjering d.o.o. (ZCT) 3-Apr-18 13.707,00 1.844,32 DARH 2 d.o.o. 3-Apr-18 4.616,03 621,10 JV Grandi Lavori Fincosit S.p.A. 3-May-18 235.949,62 31.852,77 JV Grandi Lavori Fincosit S.p.A. 3-May-18 424.504,84 57.307,39 Investinženjering d.o.o. (ZCT) 3-May-18 13.825,70 1.866,44 Financial Statements for the RGP II Project 24 THE PORT OF RIJEKA AUTHORITY - RIJEKA Date of ITEM DESCRIPTION HRK EUR payment Separate Cumulative Separate Cumulative HaskoningDHV Nederland B.V. (ZCT) 3-May-18 11.643,08 1.571,79 ŽPD d.d. Zagreb (BCT) 13-Jun-18 26.559,23 3.602,58 MTBS B.V. Rotterdam 13-Jun-18 95.249,87 12.920,02 Rijekaprojekt d.o.o. (D-403) 13-Jun-18 8.332,97 1.130,31 HLB Inženjerski biro d.o.o. Rijeka 13-Jun-18 4.937,50 669,74 Dvokut Ecro d.o.o. 13-Jun-18 14.326,88 1.943,35 Investinženjering d.o.o. (ZCT) 13-Jun-18 14.666,05 1.989,35 JV Grandi Lavori Fincosit S.p.A. 13-Jun-18 457.533,95 62.061,47 HaskoningDHV Nederland B.V. (ZCT) 17-Jul-18 8.468,92 1.146,29 HaskoningDHV Nederland B.V. (ZCT) 17-Jul-18 10.147,72 1.373,52 Investinženjering d.o.o. (ZCT) 17-Jul-18 14.103,30 1.908,91 JV Grandi Lavori Fincosit S.p.A. 17-Jul-18 704.439,75 95.347,58 Rijekaprojekt d.o.o. (Deepening) 17-Jul-18 13.123,75 1.776,33 JV Grandi Lavori Fincosit S.p.A. 17-Sep-18 533.616,95 71.843,35 HaskoningDHV Nederland B.V. (ZCT) 17-Sep-18 11.041,66 1.486,59 Investinženjering d.o.o. (ZCT) 17-Sep-18 14.264,27 1.920,47 DARH 2 d.o.o. 17-Sep-18 4.616,03 621,48 JV Grandi Lavori Fincosit S.p.A. 16-Oct-18 533.001,83 71.932,59 JV Grandi Lavori Fincosit S.p.A. 16-Oct-18 99.044,12 13.366,75 HaskoningDHV Nederland B.V. (ZCT) 16-Oct-18 7.596,87 1.025,25 HaskoningDHV Nederland B.V. (ZCT) 16-Oct-18 12.285,04 1.657,96 Investinženjering d.o.o. (ZCT) 16-Oct-18 14.290,39 1.928,60 Investinženjering d.o.o. (ZCT) 16-Oct-18 8.733,98 1.178,72 Law Firm Vukić i partn.(2016.) 21-Nov-18 250,00 33,68 Law Firm Vukić i partn.(2016.) 21-Nov-18 250,00 33,68 Law Firm Vukić i partn.(2016.) 21-Nov-18 250,00 33,68 Law Firm Vukić i partn.(2016.) 21-Nov-18 250,00 33,68 Law Firm Vukić i partn.(2016.) 21-Nov-18 250,00 33,68 Law Firm Vukić i partn.(2016.) 21-Nov-18 250,00 33,68 Law Firm Vukić i partn.(2016.) 21-Nov-18 500,00 67,36 Law Firm Vukić i partn.(2016.) 21-Nov-18 2.500,00 336,78 Law Firm Vukić i partn.(2016.) 21-Nov-18 250,00 33,68 Rijekaprojekt d.o.o. (D-403) 21-Nov-18 16.665,94 2.245,12 HaskoningDHV Nederland B.V. (ZCT) 21-Nov-18 9.194,88 1.238,67 Investinženjering d.o.o. (ZCT) 21-Nov-18 13.508,14 1.819,72 Financial Statements for the RGP II Project 25 THE PORT OF RUEKA AUTHORIW - RIJEKA Date of HRK paYment Separate Cumulative S€Darate Cumulatlve JV Grandi Lavori Fincosit 5.D.A. 21-Nov-18 235.096,23 3L.670,47 MTBS B.V. Rotterdam 21-Nov-18 qc ?rq 7q 12.841,60 HaskoningDHV Nederland B.V. (zcr) 20-Dec-18 9.968,93 1.346,05 Investin:eniering d.o.o. (ZCT) 20-Dec-18 15.539,24 2.098,18 JVGrandi Lavori Fincosit S.o.A- 20-Dec-18 300.847,90 40.627,86 HaskoningDHV Nederland B.V. (zcr) 20-Dec-18 L2.320,99 t.663,64 Investinienjering d.o.o. (zCT) 20-Dec-18 L4.376,80 1,.947,22 JV Grandi Lavori Fincosit S.D.A. 20-Dec-18 274.847,25 37.170,32 TOTAL: 5.046.267,91 681.2s9,81 ExchanBe rate diff. during the vear 5.764,97 Exchange rate diff. as at Dec 31't -nq closing balance as at Dec 31n 2018 i 33.833.040,49 4.563.031,13 Note: The prcject locol dccount is denominoted in notionol cuftency, HRK, ond converted for this report requirements opplying the exchonge rcte ruling ot tronsoction dote, ond ultimotely showing the occount octuol bdlonce ot ot 37n DecembeL opplying the closing exchonqe tute for thot doy. ' Reimbursed due to misopplied exchonge rote " Adding intercst to occount ond trcnslet on the same doy to the rcgulot occountote not included due to intete.l since it belongs to the subject Rijeka, April 1't 2019 Financial Statements for the RGP ll Proiect zo