consolidated project financial statements...

Report on the

CONSOLIDATED PROJECT FINANCIAL STATEMENTS

of the

ENHANCING SMALL AND MEDIUM ENTERPRISES ACCESSTO FINANCE PROJECT

of the Ministry of Finance and Treasury of Bosnia and Herzegovina

financed by:

- IBRD Loan No. 7839-BA- IBRD Loan No. 81670-BA

FOR THE YEAR ENDED DECEMBER 31, 2016

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ENHANCING SMALL AND MEDIUM ENTERPRISES ACCESS TO FINANCE PROJECTof the Ministry of Finance and Treasury of Bosnia and Herzegovina

CONTENTS

1 Introduction 1

2 Independent Auditor's Report 5

3 Consolidated project financial statements for the year 2016 7

4 Notes to the consolidated project financial statements 13

APPENDICES

A. 1 Designated account statement - IBRD Loan No. 7839-BA - FB&H 14

A.2 Local bank account statements - IBRD Loan No. 7839-BA - FB&H 15

A.3 Designated account statement - IBRD Loan No. 81670-BA- FB&H 16

A.4 Designated account statement - IBRD Loan No. 81670-BA - RS 17

B.1 SoE Withdrawal Schedule of IBRD Loan No. 7839-BA for the year ended December 31, 2016 18

B.2 SoE Withdrawal Schedule of IBRD Loan No. 81670-BA for the year ended December 31, 2016 19

C.1 Reconciliation between World Bank's disbursement statements in EUR and IBRD Loan account

in EUR according to the balance sheet as of December 31, 2016; SoE Withdrawal Schedule of

IBRD Loan No. 7839-BA 20

C.2 Reconciliation between World Bank's disbursement statements in EUR and IBRD Loan account

in EUR according to the balance sheet as of December 31, 2016; SoE Withdrawal Schedule of

IBRD Loan No. 81670-BA 21


1. Introduction

1.1 Objectives and activities of the Project

The State of Bosnia and Herzegovina (the "State"), through its Ministry of Finance and Treasury

obtained a loan from the International Bank for Reconstruction and Development (IBRD) - the World

Bank Group towards the costs of the Enhancing SMEs Access to Finance Project (the "Project").

Although there are long term structural issues that to be addressed to improve the business

environment and competitiveness of the enterprise sector, the current global financial instability implies

a focus on dealing with the access to term finance, as the most critical short-term vulnerability for the

SME sector.

The project development objective is to enhance access to finance for small and medium enterprises

in Bosnia and Herzegovina in the context of global financial crisis. Primary beneficiaries of the project

would be small and medium enterprise contributing to growth of regional economy and export, which

would benefit from improved access to finance. The project would also help the banking sector in

Bosnia and Herzegovina to withstand the global economic downturn that has triggered financing

difficulties for the enterprise sector.

In general, the outcomes of the Project will be measured by two groups of key indicators: (i) number of

loans and the amount of medium and long-term credit extended to SMEs in Bosnia and Herzegovina,including exporters, (ii) the payment performance of the sub-borrowers in the project - the number and

volume of non-performing sub-loans, and (iii) the investment and export performance of the sub-

borrowers, and the impact on their employment level. Performance indicators of SMEs - final

beneficiaries would be monitored throughout the project to offer lessons which may be helpful in

designing future crisis response schemes for SMEs in Bosnia and Herzegovina and elsewhere.

1.2 Components and activities of the Project

The project has one component:

A. Credit Line Component

B. Project Management and Monitoring Component (the Federation of Bosnia and

Herzegovina only)

A. Credit Line Component

The Credit Line Component will include funding through PFIs to creditworthy private enterprises for

viable projects. The eligible financing will cover investments and/or incremental working capital in

industry, agro-processing and the related service sectors. Loan funds will be on-lent by the Entities'

MoFs via their respective PlUs to participating financial institutions (PFIs). The sub-loans to PFIs will

be extended back-to-back to PFIs loans to final borrowers and under the similar terms and conditions.

The decision to extend a sub-loan to final borrowers will be left to PFIs. The PFIs will bear the full

credit risk. The credit decisions would be based on thorough financial appraisal of borrower's financial

condition and prospects. The sub-loans would be available in EUR or in BAM referenced to EUR.


1. Introduction

1.2 Objectives and activities of the Project (continued)

A. Credit Line Component (continued)

Subsidiary financing to PFIs will be extended on variable interest rate basis adjusted semi-annually.

Interest rates will be market determined, based on preceding six-months LIBOR rates plus a spread for

a selected IBRD loan product.

The entities' Ministries of Finance will add a spread needed to cover the cost of project implementation

and the related risks which will be reflected in Subsidiary Financing Agreements with PFIs. The spread

will be reviewed, from time-to-time, and could be adjusted in line with market dynamics.

PFIs will determine the principal, amortization and interest payment schedules for sub-loans to final

borrowers on a case-by-case basis, based on cash-flow projections. PFI sub-loans to final borrowers

will be extended at domestic credit market rates, and will include a by borrowers to PFIs would

generally be made according to typical repayment schedules used by the respective PFI. There will be

no sub-loan prepayment penalties, and interest will be charged on a declining balance formula.

The final beneficiaries must be privately owned and duly licensed and registered with the tax

authorities. They should be active in manufacturing, food production or agro-processing, or in related

services. Enterprises will be required to demonstrate prior operating experience in the activity to be

financed and should be in a sound financial condition. The creditworthiness of final borrowers will be

assessed by the PFIs.

Sub-loans would finance investments, repair or modernization, and/or incremental working capital.

Sub-loans proceeds could be used for the equipment and raw materials, repairs to facilities and only

minor construction. Each credit application would be accompanied by a viable business plan, financial

statements before and after the project, and cash-flow projections.

B. Project Management and Monitoring Component

The Project Management and Monitoring Component finances costs of the project management and

monitoring, including financial management, audits, procurement, environmental compliance

supervision and other activities related to a project management and coordination in the Federation of

Bosnia and Herzegovina ("FB&H").

1.3 Financing of the Project

1.3.1 IBRD Loan No. 7839-BA

The State is the borrower of the International Bank for Reconstruction and Development (IBRD) Credit

No. 7839-BA, amounting to the equivalent of EUR 47,800,000.

Under the terms of the subsidiary finance agreements between the State, on one side, and FB&H and

Republika Srpska ("RS"), on the other side, funds of the equivalent of EUR 28,680,000 have been lent

to FB&H and funds of the equivalent of EUR 19,120,000 have been lent to RS.

2


1. Introduction (continued)

1.3 Financing of the Project (continued)

1.3.1 IBRD Loan No. 7839-BA (continued)

Categories of cost items to be financed out of the proceeds of the Credit, the allocation of the amounts

of the Credit to each category and the percentage of expenditure for cost items so to be financed in

each category are as follows:

Amount of the % of expenditure to beItem Loan allocated financed

(in EUR)

(1) Sub-loans under Part 1.A of the Project 27,900,000 100%

Goods, consultants' services and operatingcosts under Part 1.B of the Project

(3) Unallocated under Part 1 of the Project 300,000 100%

(4) Sub-loans under Part 2.B of the Project 19,072,200 100%Amount payable pursuant to

Section 2.03 of this Agreement(5) Front-end fee 119,500 in accordance with Section 2 07

(b) of the General Conditions

Subtotal 47,800,000

On October 15, 2012 the proceeds of the Credit was reallocated (Part A - FB&H) as follows: EUR

300,000 from Category 3: Unallocated under Part 1 of the Project to Category 2: Goods consultants

services and operating costs under Part 1.B of the Project.

A revision of the table set forth in Schedule 1 to the Development Credit Agreement incorporating

these changes is follow:


(in EUR)

(1) Sub-loans under Part I.A of the Project 27,900,000 100%

Goods, consultants' services and operating(2) 708,300 100%

costs under Part 1.B of the Project

(3) Unallocated under Part 1 of the Project -


(5) Front-end fee 119,500 Section 2 03 of this Agreementin accordance with Section 2.07


Subtotal 47,800,000

3


1. Introduction (continued)

1.3 Financing of the Project

1.3.2 IBRD Loan No. 81670-BA

The State is the borrower of the International Bank for Reconstruction and Development (IBRD) Credit

No. 81670-BA, amounting to the equivalent of EUR 90,100,000.

Under the terms of the project agreements between the State, on one side, and FB&H and RS, on the

other side, funds of the equivalent of EUR 54,060,000 have been lent to FB&H and funds of the

equivalent of EUR 36,040,000 have been lent to RS.

Categories of cost items to be financed out of the proceeds of the Credit, the allocation of the amounts

of the Credit to each category and the percentage of expenditure for cost items so to be financed in

each category are as follows:


(in EUR)

(1) Sub-loans under Part 1.A of the Project 53,924,850 100%


Section 2.03 of this Agreement(3) Front-end fee 225,250 in accordance with Section 2.07


Subtotal 90,100,000

4

Deloitte d.o.o.Zmaja od Bosne 12c

71000 SarajevoBosnia and Herzegovina

Tel: +387 (0) 33 277 560Fax: +387 (0) 33 277 561www.deloitte.com/ba

2. Independent Auditor's Report

To the State of Bosnia and Herzegovina,

Ministry of Finance and Treasury

Attn. of Minister of Finance and Treasury H.E. Mr. Vjekoslav Bevanda

Report on the consolidated project financial statements

We have audited the accompanying consolidated project financial statements of the Enhancing Small

and Medium Enterprises Access to Finance Project (the "Project"), which comprise of Summary of

sources and uses of funds, Balance sheet, Designated account statements, Statements of Credit

withdrawals as of and for the year ended December 31, 2016, and a summary of significant accounting

policies and other explanatory notes for the years then ended, financed under IBRD Loan No. 7839-BA

and IBRD Loan No. 81670-BA. These project financial statements have been prepared on the cash

basis of accounting based on International Public Sector Accounting Standard ("IPSAS"), as described

in Note 4.1.

Responsibility for the consolidated project financial statements

The State of Bosnia and Herzegovina, i.e. the management of the implementing foundation 'OdRaz' in

the Federation of Bosnia and Herzegovina and of the project implementation unit in Republika Srpska

(the "Management") is responsible for the preparation and fair presentation of these consolidated

project financial statements on the cash basis of accounting based on IPSAS, as described in Note

4.1, and on "Guidelines: Annual Financial Reporting and Auditing for World Bank - Financed Activities"

issued by Financial Management Sector Board ("FMSB"), and for such internal control as the

Management determines is necessary to enable the preparation of the consolidated project financial

statements that are free from material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express an opinion on the consolidated project financial statements based on

our audit. We conducted our audit in accordance with the International Standards on Auditing and

"Guidelines: Annual Financial Reporting and Auditing for World Bank - Financed Activities" issued by

FMSB. Those Standards and Guidelines require that we plan and perform the audit to obtain

reasonable assurance about whether the consolidated project financial statements are free of material

misstatement.

An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the

special purpose consolidated project financial statements. An audit also includes assessing of the

accounting principles used and significant estimates made by the Management, as well as evaluating

the overall statement presentation.

We believe that our audit provides a reasonable basis for our opinion.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK prvate company limited by guarantee ("DTTL" or "Deloitte Global"), its network of

member firms, and their related entities (collectively, the "Deloitte Network") DTTL and each of its member firms are legally separate and independent entities,

DTTL does not provide services to clients. Please see www deloitte com/ba/about for a more detailed description of DTTL and its member firms.

In Bosnia and Herzegovina, the services are provided by Deloitte Ltd and Deloitte Advisory Services Ltd (jointly referred to as "Deloitte Bosnia and Herzegovina")which are affiliates of Deloitte Central Europe Holdings Limited Deioitte Bosnia and Herzegovina is one of the leading professional services organizations in the

country providing services in audit, tax, consulting, financial advisory and legal services through over 45 national and specialized expatriate professionals.

Q 2017 Deloitte Bosnia and Herzegovina

Report on the consolidated project financial statements (continued)

Opinion

In our opinion, the accompanying consolidated project financial statements present fairly, in all material

aspects, the financial position of the Project as of December 31, 2016, and of the funds received and

disbursed during the years then ended, in accordance with basis of accounting described in Note 4.1.

Report on other requirements

In addition, with respect to the Statements of Expenditure, adequate supporting documentation has

been maintained to support claims to the World Bank for reimbursements of expenditures incurred;

and all expenditures included in withdrawal applications and reimbursed against are eligible for

financing under the Project.

Deloitte d.o.o.

Sead Bahtanovi, director and licensed auditor Adna Valjevac, licensed auditor

Sarajevo, Bosnia and Herzegovina

June 23, 2017

6

ENHANCING SMALL AND MEDIUM ENTERPRISES ACCESS TO FINANCE PROJECTof the Ministry of Finance and Treasury of Bosnia and HerzegovinaConsolidated project financial statements for the year ended December 31, 2016(all amounts in EUR, unless otherwise stated)

3. Consolidated project financial statements for the year 2016

3.1 Summary of sources and uses of funds under the IBRD Loan No. 7839-BA, IBRD LoanNo. 81670-BA, Government contribution and Other income

Actual Cumulative Cumulative Cumulative CumulativeRef. 2016 2016 2015 budget variance

FINANCING

IBRD Loan No. 7839-BA 3.1.1 - 47,800,000 47,800,000 47,800,000 -

IBRD Loan No. 81670-BA 3.1.2 731,989 74,772,888 74,040,899 90,100,000 15,327,112Covernment contribution - IBRD LoanNo 7839-BA (RS only) 3.1.3 1,280 7,776 6,496 - (7,776)

Other income (FB&H only) 3.1.4 - 213 213 - (213)

TOTAL FINANCING 3.2 733,269 122,580,877 121,847,608 137,900,000 15,319,123

PROJECT EXPENDITURE

By Category

Sub-loans under Part 1.A of theProject (76,694) 81,740,650 81,817,344 81,824,850 84,200

Goods, consultants' services andoperating costs under Part 1.B of theProject - 716,019 716,019 708,300 (7,719)Sub-loans under Part 1.A of theProject 1,804,862 39,771,682 37,966,820 55,022,100 15,250,418

Front-end fee - 344,750 344,750 344,750 -

Bank charges - 7,776 7,776 - (7,776)

TOTAL EXPENDITURE 3.2 1,728,168 122,580,877 120,852,709 137,900,000 15,319,123

PROJECT EXPENDITURE

By Component

Credit line component 1,728,168 121,650,151 119,921,983 136,984,850 15,334,699

Project management and monitoringcoordination - 930,726 930,726 915,150 (15,576)


7


3. Consolidated project financial statements for the year 2016 (continued)

3.1.1 Summary of sources and uses of funds under the IBRD Loan agreement No. 7839-BA


FINANCING

IBRD Loan No. 7839-BA 47,800,000

Initial deposit - 5,800,000 5,800,000

Direct payments - 13,780,856 13,780,856

SoE replenishments - 28,099,644 28,099,644

Front-end fee - 119,500 119,500

TOTAL FINANCING 3.1 - 47,800,000 47,800,000 47,800,000 -

PROJECT EXPENDITURE

By Category

Sub-loans under Part 1.A of theProject - 27,892,281 27,892,281 27,900,000 7,719

Goods, consultants' services andoperating costs under Part 1.B ofthe Project - 716,019 716,019 708,300 (7,719)Sub-loans under Part 2.B of theProject - 19,072,200 19,072,200 19,072,200

Front-end fee - 119,500 119,500 119,500

TOTAL EXPENDITURE 3.2 - 47,800,000 47,800,000 47,800,000 -

8



3.1.2 Summary of sources and uses of funds under the IBRD Loan agreement No. 81670-BA


FINANCING

IBRD Loan No. 81670-BA 90,100,000

Initial deposit - 11,000,000 11,000,000

Direct payments - - -

SoE replenishments 808,683 63,624,332 62,815,649

Front-end fee - 225,250 225,250

Refund to World Bank (76,694) (76,694) -

TOTAL FINANCING 3.1 731,989 74,772,888 74,040,899 90,100,000 (15,327,112)

PROJECT EXPENDITURE

By CategorySub-loans under Part 1.A ofthe Project (76,694) 53,848,156 53,924,850 53,924,850 76,694Sub-loans under Part 2.B ofthe Project 1,804,862 20,699,482 18,894,620 35,949,900 15,250,418

Front-end fee - 225,250 225,250 225,250 -

Bank charges * - - 1,280 1,280 -- - (1,280)


* These bank charges were not claimed from the World Bank as they are illegible expenses-

9



3.1.3 Summary of sources and uses of funds under Government contribution (IBRD Loan No.7839-BA) - RS only


FINANCING

Government contribution 1,280 7,776 6,496 - (7,776)

TOTAL FINANCING 3.1 1,280 7,776 6,496 - (7,776)

PROJECT EXPENDITURE

By Category

Bank charges - 6,496 6,496 - (6,496)

TOTAL EXPENDITURE 3.2 - 6,496 6,496 - (6,496)

10



3.1.4 Summary of sources and uses of funds under Other income (FB&H only)


FINANCING

Interest- IBRD Loan No.7839-BA - 213 213 ___ - _(213)

TOTAL FINANCING 3.1 - 213 213 - (213)

PROJECT EXPENDITUREBy Category

Sub-loans under Part 1.A of theProject - 213 213 - (213)

TOTAL EXPENDITURE 3.2 - 213 213 - (213)

11



3.2 Consolidated balance sheet as of December 31, 2016 showing accumulated funds of theProject and bank balances concerning World Bank funding

December 31, December 31,Ref. 2016 2015

ASSETS

Project expenditure under IBRD Loan No. 7839-BA 3.1.1 47,800,000 47,800,000

Project expenditure under IBRD Loan No. 81670-BA 3.1.2 74,774,168 73,046,000

Project expenditure under Government contribution 3.1.3 6,496 6,496

Project expenditure under Other income 3.1.4 213 213

122,580,877 120,852,709

Designated account - IBRD Loan No. 7839-BA - FB&H A.1 - -

Designated account - IBRD Loan No. 81670-BA - FB&H A.3 - -

Designated account - IBRD Loan No. 81670-BA - RS A.4 - 994,899

- 994,899

Total assets 122,580,877 121,847,608

LIABILITIES

IBRD Loan No. 7839-BA C.1 47,800,000 47,800,000

IBRD Loan No. 81670-BA C.2 74,772,888 74,040,899

Other income - FB&H 3-1-4 213 213

Expenditure under IBRD Loan No. 7839-BA paid by 'OdRaz' A.2 - -

Government contribution - IBRD Loan No. 7839-BA - RS 3.1.3 7,776 6,496

Total liabilities 122,580,877 121,847,608

12

ENHANCING SMALL AND MEDIUM ENTERPRISES ACCESS TO FINANCE PROJECTof the Ministry of Finance and Treasury of Bosnia and HerzegovinaConsolidated project financial statements for the year ended December 31, 2016(all amounts in EUR, unless othenvise stated)

4. Notes to the consolidated project financial statements

4.1 Basis of preparation and accounting records

These project financial statements have been prepared in accordance with the International Public

Sector Accounting Standard: "Financial Reporting under the Cash Basis of Accounting" issued by the

Public Sector Committee of the International Federation of Accountants, and incorporate the

accounting policies below, which have been consistently followed in all material respects and comply

with the "Guidelines: Annual Financial Reporting and Auditing for World Bank - Financed Activities",

issued by the Financial Management Sector Board.

4.2 Accounting policies

The Project's fiscal year is January 1 to December 31 for the recording of all transactions.

Cash basis of accounting

All receipts and expenses under IBRD Loan are recorded on actual receipt and payment basis of

accounting as per approved categories.

Project expenditure is stated at original cost on the balance sheet.

Direct payments

Direct payments concern the amounts paid directly from the IBRD Loan accounts of the World Bank.

Statement of Expenditure (SoE)

Statements of Expenditure are used to state the expenditure under IBRD Loans during a certain

period. These statements are sent to the World Bank's disbursement department who authorises the

payment of the expenditure through the Designated accounts.

Currency conversions

The reporting currency is Euro (EUR). Sources and use of funds (payments to suppliers and

contractors) in currencies other than EUR have been converted to EUR using the currency rate at the

moment of the transaction.

Bank balances, recorded on the balance sheet at year-end, have been converted at year-end rate.

Designated accounts

This is the total amount of the withdrawals from the IBRD Loan accounts for the Project. IBRD Loan

accounts are in EUR.

Interest on Designated account

Interest earned on the Designated account belongs to the Borrower.

13


APPENDIX A.1 DESIGNATED ACCOUNT STATEMENT - FB&H

Account owned by: Ministry of Finance and Treasury of Bosnia and Herzegovina

Account No.: 10000463101

Depository Bank: UniCredit Bank d.d.

Address: Kardinala Stepinca b.b., Mostar

Related Credit: IBRD Loan No. 7839-BA

Currency: EUR

Ref. EUR

Opening balance January 1, 2016 3.2

Add:

Deduct

Ending balance December 31, 2016 3.2 -

14


APPENDIX A.2 LOCAL BANK ACCOUNT STATEMENT - FB&H

Account owned by: Foundation for Sustainable Development 'OdRaz'

Account No.: 3389002205893403

Depository Bank: UniCredit Bank d.d.

Address: Kardinala Stepinca b.b., Mostar


Currency: BAM

Ref. BAM EUR

Opening balance January 1, 2016 3.2 - -

Add:

Deduct:

Ending balance December 31, 2016 3.2 - -

This account represents expenditure for common departments for all projects implemented by 'OdRaz"

15


APPENDIX A.3 DESIGNATED ACCOUNT STATEMENT - FB&H


Account No.: 5551101010452067

Depository Bank: Nova banka a.d.

Address: Kralja Alfonsa XIII 37 a, Banja Luka


Currency: EUR

Ref. EUR

Opening balance January 1, 2016 3.2 -

Add:Refund of ineligible expenditure from Privredna banka 72,757

Contribution from Government of FB&H 3,937

76,694

Deduct:

Payments to IBRD - Refund under IBRD Loan No. 81670-BA 76,694

76,694

Ending balance December 31, 2016 3.2 -

16


APPENDIX A.4 DESIGNATED ACCOUNT STATEMENT - RS


Account No.: 5551101010451873

Depository Bank: Nova Banka a.d.

Address: Kralja Alfonsa XIII 37 a


Currency: EUR

Ref. EUR

Opening balance January 1, 2016 994,899

Add:

World Bank replenishments B.2 808,683

Government contribution* 3.1.1 1,280

809,962

Deduct:

Payments to suppliers - Expenditure under IBRD Loan No. 81670-BA 1,804,862

Bank charges -

1,804,862

Ending balance December 31, 2016 3.2 _

*Government contribution is related to reimbursement of bank charges withdrawn by the bank duringwithdrawal of loan funds.

17


APPENDIX B.1 SoE Withdrawal Schedule of IBRD Loan No. 7839-BA for the year ended December

31, 2016

Goods,consultants'

servicesand

Sub-loans operating Sub-loansunder Part costs under under Part

Initial 1.A of the Part 1.B of 2 of the Front- Total Totaldeposit Project the Project Project end fee application disbursed

Previous years 141,776 27,892,281 716,019 19,072,200 119,500 47,800,000 47,800,000

Total direct payments - -

Total SoE applications - -

Total 2016 - - -

Cumulative 2016 141,776 27,892,281 716,019 19,072,200 119,500 47,800,000 47,800,000

18


APPENDIX B.2 SoE Withdrawal Schedule of IBRD Loan No. 81670-BA for the year ended December

31, 2016

Sub-loansSub-loans under under Part

Initial Part 1.A of the 2.B of the Front- Total Totaldeposit Project Project end fee application disbursed

Previous years 9,305,265 53,924,850 14,890,798**** 225,250 73,044,720 74,040,899

Total Direct payments -

23-F-SME * (2,622,926)

24-F-SME * (1,620,758)

25-F-SME* (61,581) -

6-RS-SME** (4,121,419) 4,121,419*** - - 4,121,419 -

7-RS-SME (878,581) 878,581 - - 878,581 -

8-RS-SME - 808,683 - 808.683 808,683

Total SoE applications (9,305,265) 5,808,683 - - 5,808,683 808,683

Refund to World Bank - (76,694) - - (76,694) (76,694)

Total 2016 (9,305,265) 5,731,989 - - 5,731,989 731,989

Cumulative 2016 - 59,656,839 14,890,799 225,250 74,772,888 74,772,888

* Applications No. 23, 24 and 25 were deducted from Initial deposit in 2016, but expenses were made in 2015.

** Application No.6 included expenses made in both 2015 and 2016 and it was replenished in 2015.

Amount of EUR 4,033,822 for cost category "Sub-loans under Part 2.B of the Project", relates to theexpenditure made in 2015, but claimed through SoE applications in 2016, amount of EUR 117,598 forcost category "Sub-loans under Part 2.B of the Project", relates to the expenditure made and claimed in2016.

* Difference of EUR 4,033,822 for cost category "Sub-loans under Part 2.B of the Project", betweenCumulative 2015 in Note 3.1.2, and Total previous years Appendix B.2, relates to the expenditure made in2015, but claimed through SoE applications in 2016

19


APPENDIX C.1 Reconciliation between World Bank's disbursement statements in EUR

and IBRD Loan account in EUR according to the consolidated balance

sheet as of December 31, 2016; SoE Withdrawal Schedule of IBRD Loan

No. 7839-BA

Changes inIBRD Loan

(in EUR)

Original amount 47,800,000

Disbursed in previous years 47,800,000

Total disbursed in 2016 -

Cumulative disbursements 47,800,000

Calculated undisbursed balance as of December 31, 2016 -

Undisbursed balance as per World Bank Summary for December 2016 -

20


APPENDIX C.2 Reconciliation between World Bank's disbursement statements in EUR

and IBRD Loan account in EUR according to the consolidated balance

sheet as of December 31, 2016; SoE Withdrawal Schedule of IBRD Loan

No. 81670-BA

Changes inIBRD Loan

(in EUR)

Original amount 90,100,000

Disbursed in previous years 74,040,899

8-R-SME 808,683

Refund to World Bank (76,694)

Total disbursed in 2016 731,989

Cumulative disbursements 74,722,888

Calculated undisbursed balance as of December 31, 2016 15,327,112

Undisbursed balance as per World Bank Summary for December 2016 15,327,112

21

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