Special Purpose Project Financial Statements for the period ended December 31, 2021 Sint Maarten Airport Terminal Reconstruction Project/Grant no. P167974 Project Financial Statement For the period ended December 31, 2021 Sint Maarten Airport Terminal Reconstruction Project/Grant no. P167974/ TF B0760 Sint Maarten Special Purpose Project Financial Statements for the period ended December 31, 2021 Sint Maarten Airport Terminal Reconstruction Project/Grant no. P167974 Table of contents of the Special Purpose Project Financial Statements for the period ended 2 December 31, 2021 3 Special Purpose Project Financial Statements for the period ended December 31, 2021 Designated Account Reconciliation Statement 8 Sources and Uses of Funds 9 Statement of Cumulative Investments (Expenditures) 10 Statement of Uses and Funds by Components 10 Notes to the Special Purpose Project Financial Statements 11 Supplementary information 17 Page 1 Special Purpose Project Financial Statements for the period ended December 31, 2021 Sint Maarten Airport Terminal Reconstruction Project/Grant no. P167974 Special Purpose Project Financial Statements for period ended December 31, 2021 Management of the National Recovery Program Bureau, Sint Maarten Airport Terminal Reconstruction Project/Grant no. P167974 Credits Grant no. P167339 and TF B0760 implemented by the National Recovery Program Bureau during the period 01-01-2021 to 31-12-2021 acknowledges and understands that have responsibility: for the preparation and fair presentation of the special purpose project financial statements in accordance with the financial reporting provisions outlined in the respective legal agreements with the World Bank. for such internal control as management determines is necessary to enable the preparation of the special purpose project financial statements that are free from material misstatement, whether due to fraud or error; and In preparing the special purpose project financial statements, management is responsible for: selecting suitable accounting principles and apply them consistently. making judgements and estimates that are reasonable and prudent. stating whether the reporting framework have been followed, subject to any material departures disclosed and explained in the special purpose financial statements; and preparing the special purpose project financial statements on a going concern basis, unless it is inappropriate to presume that the Project will continue its activity for the foreseeable future. Management is also responsible for: designing, implementing, and maintaining effective and sound of internal control and for identifying risks in the internal control system. maintaining proper accounting records that disclose, with reasonable accuracy at any time, the financial position of the Project, and which enable them to ensure that the special purpose project financial statements of the Project comply with the reporting framework. compliance with laws and regulations applicable in Sint Maarten, accounting system of the Project and the requirements of the World Bank. taking such steps as are reasonably available to them to safeguard the assets of the Project; and Detecting and preventing fraud and other irregularities. The special purpose financial statements for the period ended December 31, 2021, were approved and authorized for issue on June 14th, 2022, by the Director of the NRPB representing, Sint Maarten Airport Terminal Reconstruction Project/Grant no. P167974 ------------------------------------------ Mr. Claret Connor (Director NRPB) Page 2 Independent Auditor’s Report To the Implementing Entity National Recovery Program Bureau P167974/ TF B0760 - Sint Maarten Airport Terminal Reconstruction Project St. Maarten Reference: HEB/67.004.0/47264 Opinion on the special purpose project financial statements 2021 contained in the annual report Report on the project financial statements included in the annual report In our opinion, • The project financial statements, present fairly, in all material respects the financial position of P167974/ TF B0760 - Sint Maarten Airport Terminal Reconstruction Project (the “Project”) as at December 31, 2021, the funds received and the expenditures spent for the period ended December 31, 2021 and cumulative investments as at and for the period ended December 31, 2021 in accordance with the financial reporting provision outlined in the terms of the financing and legal agreements and applicable laws and regulations related to the Project's financial activities as set out by the World Bank. • The reported expenditures are eligible and that these expenditures were incurred and paid for only for specific project purposes and applying the principles of correct use of the funds as provided under the relevant financing agreements. • In cases of expenditures processed through statement of requests for replenishment (IFRs) submitted to the World Bank for the period audited, that (i) expenditures submitted are eligible, (ii) the control procedures for preparing the IFRs were observed, and (iii) the principles of correct use of the funds were applied. • The designated account reconciliation statements (DA) for the period audited adequately reflects the flow of funds for the DA during the period audited, and the reported activities have been only for purposes of the project. What we have audited We have audited project financial statements 2021 of P167974/ TF B0760 - Sint Maarten Airport Terminal Reconstruction Project, implemented in St. Maarten by the National Recovery Program Bureau (the “Implementing Entity”). © Grant Thornton Sint Maarten. All rights reserved. Grant Thornton in Aruba, Bonaire, Curaçao and Sint Maarten is a member firm of Grant Thornton International Limited (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another’ s acts or omissions. For more information, please visit our website www.grantthornton.sx. The project financial statements comprise: 1. designated account reconciliation statement as at December 31, 2021 2. statement of sources and uses of funds for the period ended December 31, 2021 3. cumulative investments as at and for the period ended December 31, 2021 4. Statement of Uses and Funds by Components for the period ended December 31, 2021 5. notes to the project financial statements, which include a summary of significant accounting policies and other explanatory information. The financial reporting framework that has been applied in the preparation of the project financial statements is the financial reporting provision outlined in the terms of the financing and legal agreements and applicable laws and regulations related to the Project's financial activities as set out by the World Bank. Basis for our opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the project financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the implementing entity in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code). Furthermore we have complied with the ‘Verordening gedrags - en beroepsregels accountants’ (VGBA – Code of Ethics for Professional Accountants, a regulation with respect to rules of professional conduct). Report on the other information included in the annual report In addition to the project financial statements and our auditor’s report thereon, the annual report contains other information that consists of: • statement of management’s responsibilities for the preparation and approval of the special purpose project financial statements for period ended December 31, 2021; • supplementary information; Based on the procedures performed as set out below, we conclude that the other information is consistent with the project financial statements and does not contain material misstatements. We have read the other information. Based on our knowledge and understanding obtained in our audit of the project financial statements or otherwise, we have considered whether the other information contains material misstatements. By performing our procedures, we comply with the requirements of International Standards on Auditing 720. The scope of such procedures was substantially less than the scope of those performed in our audit of the financial statements. The management of the implementing entity is responsible for the preparation of the other information. Restriction on use and distribution The project financial statements and our audit report thereon are intended solely for the World Bank and are not suitable for other purposes. Description of responsibilities regarding the project financial statements Responsibilities of the management of the implementing entity for the project financial statements Management is responsible for the preparation and fair presentation of these project financial statements, in accordance with the financial reporting provision outlined in the terms of the financing and legal agreements and applicable laws and regulations related to the Project's financial activities as set out by the World Bank and for such internal control as management determines necessary to enable the preparation of project financial statements that are free from material misstatement, whether due to fraud or error. As part of the preparation of the project financial statements, management is responsible for assessing the Project’s ability to continue as a going concern. Based on the financial reporting frameworks mentioned, management should prepare the project financial statements using the going-concern basis of accounting unless management either intends to liquidate the project or to cease operations or has no realistic alternative but to do so. Management should disclose events and circumstances that may cast significant doubt on the project’s ability to continue as a going concern in the project financial statements. Auditor’s responsibilities for the audit of the project financial statements Our responsibility is to plan and perform an audit engagement in a manner that allows us to obtain sufficient and appropriate audit evidence to provide a basis for our opinion. Our audit opinion aims to provide reasonable assurance about whether the project financial statements are free from material misstatement. Reasonable assurance is a high but not absolute level of assurance which makes it possible that we may not detect all misstatements. Misstatements may arise due to fraud or error. They are considered to be material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. Materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion. We have exercised professional judgement and have maintained professional scepticism throughout the audit in accordance with International Standards on Auditing (ISAs), ethical requirements and independence requirements. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error. Our audit consisted, among other things of the following: - Identify and assess the risks of material misstatement of the project financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the project’s internal control; - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management; - Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the project’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the project financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the entity to cease to continue as a going concern; - Evaluate the overall presentation, structure and content of the project financial statements, including the disclosures, and evaluate whether the project financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with the management of the implementing entity regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. St. Maarten, 14 June 2022 Grant Thornton St. Maarten Herbert Beldman AA RA CIA Special Purpose Project Financial Statements for the period ended December 31, 2021 Sint Maarten Airport Terminal Reconstruction Project 1/Grant no. P167974 Designated Account Reconciliation Statement for the period ended on December 31, 2021 (Expressed in United States Dollars) DESIGNATED ACCOUNT RECONCILIATION STATEMENT DA-A 3913030070 LOAN/CREDIT/PPF/COFINANCIER NUMBER P167974 - Sint Maarten Airport Terminal Reconstruction Project US$ 1 TOTAL ADVANCED BY WORLD BANK 10,545,730 2 LESS: ELIGIBLE EXPENDITURE FOR THE CURRENT YEAR ENDED DECEMBER 31, 2021 DOCUMENTED BY WORLD BANK 4,550,155 LESS: CUMULATIVE ELIGIBLE EXPENDITURE FOR THE PRIOR PERIODS ENDED DECEMBER 31, 2020 DOCUMENTED BY WORLD BANK 75,574 3 PRESENT OUTSTANDING AMOUNT ADVANCED TO THE DESIGNATED ACCOUNT (1 - 2) 5,920,002 4 BALANCE OF DESIGNATED ACCOUNT PER BANK RECONCILIATION STATEMENT AS AT PERIOD END 12/31/2021 BALANCE OF PROJECT ACCOUNT PER BANK RECONCILIATION STATEMENT AS AT PERIOD END 12/31/2021 5,433,826 5 PLUS: ELIGIBLE EXPENDITURE FOR THE CURRENT YEAR DOCUMENTED AFTER THE PERIOD END 12/31/2021 WA 015 (see note 7.2) 444,480 PLUS: ELIGIBLE EXPENDITURE FOR THE CURRENT YEAR DOCUMENTED AFTER THE PERIOD END 12/31/2021 WA 015 (see note 7.2) 41,696 6 PLUS: TOTAL AMOUNT WITHDRAWN AND NOT YET DOCUMENTED REASON: INCORRECT AMOUNT DOCUMENTED AFTER THE PERIOD END 12/31/2021 7 PLUS: AMOUNTS CLAIMED IN PREVIOUS APPLICATIONS NOT YET CREDITED AT DATE OF BANK STATEMENTS APPLICATION NO. WA # XX SUBTOTAL OF PREVIOUS APPLICATIONS NOT YET CREDITED 8 LESS: INTEREST EARNED 9 TOTAL ADVANCE ACCOUNTED FOR (NO. 4 THROUGH NO. 9) 5,920,002 10 DIFFERENCE (3 - 9) - 11 EXPLANATION OF ANY DIFFERENCE SHOWN IN LINE 10: The accompanying notes are an integral part of these special purpose project financial statements. Page 8 Special Purpose Project Financial Statements for the period ended December 31, 2021 Sint Maarten Airport Terminal Reconstruction Project 1/Grant no. P167974 Statement of Sources and Uses of Funds for the period ended December 31, 2021 (Expressed in United States Dollars) P167974 - Sint Maarten Airport Terminal Reconstruction Project Sources and Uses of Funds For the Period Ending December, 2021 Current Year End Cumulative Current Period Prior Year End Cumulative US$ RECEIPTS US$ Counterpart PJIA 910,000 910,000 - European Investment Bank 6,443,475 6,443,475 - World Bank Designated account C1 +C2 236,365 10,545,730 10,309,365 Designated account C3 - - Reimbursements C4 7,747,477 10,938,642 3,191,165 Total WB receipts 7,983,842 21,484,372 13,500,530 Total Project Receipts 15,337,317 28,837,847 13,500,530 EXPENDITURES (A) Component 1 WB 4,898,344 4,898,344 - Component 1 EIB 4,898,344 4,898,344 - Component 2 WB 137,986 213,660 75,574 Component 2 PJIA 144,981 144,981 - Component 3 - - - Component 4 7,747,477 10,938,642 3,191,165 Total Expenditures (A) 17,827,132 21,093,971 3,266,739 RECEIPTS LESS EXPENDITURES Net Change in Cash (A - B) (2,489,815) 7,743,876 10,233,791 Opening Cash Balances WIB Designated Account -A: 391303070 - - - EIB Designated Account - - - Project Account C1 8408 (WB+EIB+Counterpart) 10,190,920 - - Project Account C2 8201 42,871 - - Project Account C3 - - - Total Opening Balance 10,233,791 - - Closing Cash Balances WIB Designated Account -A: 391303070 - - - EIB Designated Account - - - Project Account C1 8408 (WB+EIB+Counterpart) 7,602,672 7,602,672 10,190,920 Project Account C2 8201 141,304 141,304 42,871 Project Account C3 Total Closing Balance 7,743,976 7,743,976 10,233,791 The accompanying notes are an integral part of these special purpose project financial statements Page 9 Special Purpose Project Financial Statements for the period ended December 31, 2021 Sint Maarten Airport Terminal Reconstruction Project 1/Grant no. P167974 Statement of Uses of Funds by Components for the period ended December 31, 2021 (Expressed in United States Dollars) P167974 - Sint Maarten Airport Terminal Reconstruction Project Use of Funds by Cumulative Investments For the Period Ending December 31, 2021 Current Period Current Year End Cumulative Prior Year End Cumulative Counterpart - Counterpart - Counterpart - Actual EIB Actual WB Total Actual EIB Actual WB Total Actual EIB Actual WB Total PJIAE PJIAE PJIAE Component 1 - 4,898,344 4,898,344 9,796,688 - 4,898,344 4,898,344 9,796,688 - - - - Component 2 144,981 - 137,986 282,967 144,981 - 213,560 358,541 - - 75,574 75,574 Component 3 - - - - - - - - - - - - Component 4 - - 7,747,477 7,747,477 - - 10,938,642 10,938,642 - - 3,191,165 3,191,165 Total 144,981 4,898,344 12,783,807 17,827,132 144,981 4,898,344 16,050,546 21,093,871 - - 3,266,739 3,266,739 The accompanying notes are an integral part of these special purpose project financial statements. Statement of Cumulative Investments (Expenditures) for the period ended December 31, 2021 (Expressed in United States Dollars) P167974 - Sint Maarten Airport Terminal Reconstruction Project Use of Funds by Cumulative Investments For the Period Ending December 31, 2021 Current Period Current Year End Cumulative Prior Year End Cumulative Counterpart - Counterpart - Counterpart - Actual EIB Actual WB Total Actual EIB Actual WB Total Actual EIB Actual WB Total PJIAE PJIAE PJIAE 1. G.W. NCS -Comp.1 - 4,898,344 4,898,344 9,796,688 - 4,898,344 4,898,344 9,796,688 - - - - 2. G.W. NCs. CS, TR.Opex -Comp.2 144,981 - 137,986 282,967 144,981 - 213,560 358,541 - - 75,574 75,574 3. G.W. NCs. CS, TR.Opex -Comp.3 - - - - - - - - - - - - 4. Select Opex - Comp4. - - 7,747,477 7,747,477 - - 10,938,642 10,938,642 - - 3,191,165 3,191,165 Total 144,981 4,898,344 12,783,807 17,827,132 144,981 4,898,344 16,050,546 21,093,871 - - 3,266,739 3,266,739 The accompanying notes are an integral part of these special purpose project financial statements. Page 10 Special Purpose Project Financial Statements for the period ended December 31, 2021 Sint Maarten Airport Terminal Reconstruction Project 1/Grant no. P167974 Notes to the Special Purpose Project Financial Statements for the period ended December 31, 2021 (Expressed in United States Dollars, unless otherwise stated) 1.1 Project Background Following the devastation caused by hurricanes Irma, the Government of Sint Maarten prepared a consolidated National Recovery and Resilience Plan (NRRP) that prioritizes immediate, short-, medium- and long-term needs for the recovery, reconstruction, and resilience of Sint Maarten. This Plan includes estimates of the financial requirements, costs and investments that are necessary to build Sint Maarten back better. Since January 2018, the World Bank has been assisting the Government of Sint Maarten in the establishment and implementation of a recovery and reconstruction program to implement the NRRP. A significant component of this program is financed through a Trust Fund financed by the Netherlands, managed by the World Bank, and implemented by Sint Maarten. In parallel to the establishment of the Trust Fund and the execution of the NRRP, the Government of Sint Maarten developed an institutional structure for the implementation of Trust Fund financed projects. This structure is materialized in the National Recovery Program Bureau (NRPB) and serves as the Project Implementation Unit (PIU) for Trust Fund projects for which the Government of Sint Maarten enters into a Grant Agreement Sint Maarten Airport Terminal Reconstruction Project/Grant no. P167974. As such, the NRPB represents the Government of Sint Maarten vis-a-vis the World Bank. The Sint Maarten Airport Terminal Reconstruction Project/Grant no. P167974 (USD72 million) approved on September 18, 2019, signed on December 9, 2019, and became effective on April 7, 2020 contributes to restoring the passenger capacity of Princess Juliana International Airport (PJIAE) to pre-Hurricane Irma levels with improved resilience towards hurricanes. The Project is a USD 129 million operation financed by a USD 72 million World Bank managed Trust Fund Grant (TF), USD 50 million European Investment Bank (EIB) loan, through an on-lending agreement with the Government of Sint Maarten and Princess Juliana International Airport Operating Company N.V. (PJIAE) as well as Counterpart Funds of USD 7 million financed directly by PJIAE. 1.2 Grant Agreement Sint Maarten (“Recipient”), represented by its Minister of General Affairs, and the International Bank for Reconstruction and Development (‘World Bank”) acting as the administrator of the Sint Maarten Hurricane Irma Reconstruction Recovery and Resilience Trust Fund signed the agreement on September 18, 2019. The Recipient declared its commitment to the objective of the project described in Schedule I to this Agreement ("Project"). To this end, the Recipient shall carry out the Project in accordance with the provisions of Article II of the Standard Conditions. Without limitation upon the provisions of Section 2.01 of the Grant Agreement, and except as the Recipient and the World Bank shall otherwise agree, the Recipient shall ensure that the Project is carried out in accordance with the provisions of Schedule 2 of the Grant Agreement. The World Bank agrees to extend to the Recipient, on the terms and conditions set forth or referred to in this Agreement, a grant in an amount not to exceed Seventy-Two million United States Dollars (USD72,000,000) ("Grant") to assist in financing the Project. 1.3 Project Objective The Project Development Objective (PDO) of the Sint Maarten Airport Terminal Reconstruction Project is to restore the passenger capacity of Princess Juliana International Airport (PJIAE) to pre-Hurricane Irma levels with improved resilience towards hurricanes. Page 11 Special Purpose Project Financial Statements for the period ended December 31, 2021 Sint Maarten Airport Terminal Reconstruction Project 1/Grant no. P167974 1.4 Project Description To achieve its objective: The project will contribute to the reconstruction program of the Princess Juliana International Airport (PJIAE) through restoring the passenger terminal function. PJIAE’s reconstruction program aims at restoring the airport function with improved resilience to the future hurricanes and safety of the airport. The program includes the reconstruction of the passenger terminal as well as the other key airport facilities. As requested by the Government of Sint Maarten the project will focus on the terminal reconstruction, which is the most critical and the biggest work to recover the passenger capacity of the PJIAE. The Project will reconstruct the terminal facilities damaged by the hurricanes while keeping the existing building structure. While the terminal facilities inside the building were seriously damaged by wind and rain intruded through destroyed doors and roof, the building structure1 itself has sustained practically with no damage except the roof. Accordingly, Princess Juliana International Airport Operating Company (PJIAE) is implementing a series of the works, including: (i) Partial (first phase) internal cleaning and demolition (completed); (ii) Terminal Building roof emergency repair works (completed) with betterment to enhance resilience (completed in September 2019); (iii) Partial terminal reconstruction projects (Package 1 and 1A) to reopen limited areas of the ground floor of the terminal (completed in December 2018 and November 2019 respectively); (iv) mold remediation of the non-operational areas in the terminal building for Package 2 (to be completed by April 2021); and (v) full terminal reconstruction (Package 2). The works under (i) - (iv) are fully financed from PJIAE’s own financing resources and concluded before the (v) Package 2 will commence. The Project will support PJIAE and the Government of Sint Maarten in implementing the Terminal Reconstruction Program, focusing on Package 2 works. The Project is a USD 129 million operation financed by a USD 72 million World Bank managed Trust Fund Grant (TF), USD 50 million European Investment Bank (EIB) loan and USD 7 million of counterpart funds. The project encompasses four main components, as described below: Component 1: Reconstruction of the PJIAE terminal facilities (USD 107 million, of which USD 50 million will be financed by the World Bank managed Trust Fund, USD 50 million by European Investment Bank loan and USD 7.0 million by the counterpart funds). The component supports the reconstruction of the PJIAE terminal facilities to restore airport function and to improve its resilience to hurricanes. The component will support, among others, the Package 2 works of the terminal reconstruction, consisting of terminal facility restoration and equipment reinstallation. The planned works will include, inter alia, passenger boarding bridges, entrance doors, dry walls, furniture/counters, electrical, mechanical and IT systems, baggage handling system, security installations and sprinkler system. Passenger boarding bridges and entrance doors will be replaced with better resilience to hurricanes. 1 The original building was designed according to the Dutch building codes and standards. Page 12 Special Purpose Project Financial Statements for the period ended December 31, 2021 Sint Maarten Airport Terminal Reconstruction Project 1/Grant no. P167974 Component 2: Capacity Building and Project Management for PJIAE (USD 0.5 million financed by the World Bank managed Trust Fund) The component supports activities related to project management and capacity building for PJIAE. The component will support PJIAE in (a) project implementation, management, monitoring and evaluation, including in respect to the environmental, social, and fiduciary aspects of the Project, such as the project audits; and (b) capacity building activities to PJIAE to improve airport resilience and air traffic safety. The activities will be defined based on the need’s assessment during the implementation. The component will also finance training and operating costs required for these activities. Operating Costs means reasonable incremental expenses directly incurred on account of the implementation, management, and monitoring of the Project, including office supplies, publication of procurement notices, office and equipment maintenance and repair, communication, translation and interpretation, travel and supervision costs, banking charges, audits, as relevant, and other miscellaneous expenses directly associated with the Project and agreed to by the World Bank. Component 3: Capacity Building and Project Management for the Government of Sint Maarten (USD 0.5 million financed by the World Bank managed Trust Fund) The component will support capacity building and project management activities for the Government of Sint Maarten. This component is implemented by the National Recovery Program Bureau (NRPB). The component will support the Government of Sint Maarten on matters of project management and on capacity building in areas including airport governance and air traffic regulation, determined based on needs assessed during Project implementation. The component will also finance training and operating costs required for these activities. Component 4: Support of PJIAE Operation (USD 21 million financed by the World Bank managed Trust Fund) The component will provide support to the operations of PJIAE through the financing of Select PJIAE Operating Expenditures so that PJIAE can continue PJIAE’s operations without interruption during the reconstruction period. The PJIAE operating expenditures financed by this component will be limited to expenditures incurred for the salaries and benefits of PJIAE personnel and other non-procurable operating expenditures including utilities up to the amount of part of the debt service payments that the PJIAE’s earnings before interest, taxes, depreciation, and amortization (EBITDA) cannot cover during the terminal construction works under Component 1 of the Project: The maximum amount of the OPEX support for each quarter will be capped by the amount of the debt service in the same period. This means that the threshold of the OPEX support will not surpass the debt service amount, which is currently USD3,506,859 per quarter, even if the EBITDA is negative. PJIAE will notify the World Bank and the NRPB via email of a request made to the Government of Sint Maarten for support for salaries under the government employment support program within one week after submission of such a request and of the subsequent result within one week after PJIAE receives the result from the Government of Sint Maarten. 1.5 Cumulative figures The figures published in this report represent the second published reporting of the Sint Maarten Airport Reconstruction Project. The published figures do represent cumulative figures for the project. Page 13 Special Purpose Project Financial Statements for the period ended December 31, 2021 Sint Maarten Airport Terminal Reconstruction Project 1/Grant no. P167974 1.6 Activities The activities of the Projects consist of the following classified components of financing: Table 1: Project Financing by Component Component USD Source (Million) 50.0 Trust Fund Component 1 - Reconstruction of the PJIAE terminal facilities 50.0 EIB 7.0 PJIAE Component 2 - Capacity Building and Project Management for PJIAE 0.5 Trust Fund Component 3 - Capacity Building and Project Management for Government of 0.5 Trust Fund SXM Component 4 - Support of PJIAE Operations 21.0 Trust Fund Project total 129.0 Table 2: Categories of Eligible Expenditures under World Bank Grant Agreement Amount of the Grant Percentage of Expenditures Allocated to be Financed Category (expressed in USD) (inclusive of Taxes) (1) Goods, works, non-consulting services, and 50% consulting services, under Component 1 of until eligible expenditures 50,000,000 the Project incurred under Component 1 reaches USD100,000,000 (2) Goods, works, non-consulting services, consulting services, Training, and Operating 500,000 100% Costs under Component 2 of the Project (3) Goods, works, non-consulting services, consulting services, Training, and Operating 500,000 100% Costs under Component 3 of the Project (4) Select PJIAE Operating Expenditures under 21,000,000 100% Component 4 of the Project TOTAL AMOUNT 72,000,000 Page 14 Special Purpose Project Financial Statements for the period ended December 31, 2021 Sint Maarten Airport Terminal Reconstruction Project 1/Grant no. P167974 2. Presentation of the Special Purpose Project Financial Statements Basis of preparation These special purpose project financial statements have been prepared in accordance with the financial reporting provisions outlined in the respective legal agreements with the World Bank (“reporting framework”) using the cash basis of accounting. Statement of compliance These special purpose project financial statements consist of: · Statement of Designated Account Reconciliation Statement · Statement of Sources and Uses of Funds · Statement of Cumulative Investments (Expenditures) · Notes to the Special Purpose Project Financial Statements The reporting currency of these special purpose project financial statements is US Dollars ("USD"). Basis of measurement These special purpose project financial statements have been prepared on the historical cost basis. Functional and presentation currency The functional currency is United States Dollars (USD). The amounts expended in Netherlands Antillean Guilder (“NAF”) are converted to United States Dollars (“USD”) at exchange rate of 1.8 NAF for 1 USD. The reporting currency of the project is USD. Rounding-off The figures have been rounded off to the nearest whole digit. Going concern The Special Purpose Project Financial Statements have been prepared on a going concern basis, which assumes that the Project will continue in the foreseeable future. 3. Accounting Policies Funds received Funds are recognized on cash basis once received. Expenses Expenses are recorded on cash basis once paid. Sources of funds The funds were provided by the World Bank to the Project by replenishment of special account, reimbursements or through direct payment to the end supplier of goods and/or services. Restricted use of funds and other assets The Credit, Loan and Grant agreement require that the funds available in the Designated Account be restricted to the Project use only. Any project funds available at the end of the Project should be returned to the World Bank. Cash Cash include cash on hand and due from banks, which can be converted to the corresponding amount of cash in the short term. Taxes The Project related taxes and mandatory payments are calculated and paid in accordance with tax regulations applicable in Sint Maarten. NRPB has been granted exemption of the 5% Turnover Tax on sales of goods and services levied by the Government for the Sint Maarten Terminal Reconstruction Project. Page 15 Special Purpose Project Financial Statements for the period ended December 31, 2021 Sint Maarten Airport Terminal Reconstruction Project 1/Grant no. P167974 4. Cash Balances: CLOSING ACCOUNT NUMBER BANK CURRENCY BALANCE USD EQUIVALENT 12/31/2021 DESIGNATED ACCOUNT DA-A 39133070 CBCS USD $ - $ - PROJECT ACCOUNT C1 82068406 (WB+EIB+COUNTERPART) xx WIB USD $ 7,602,672 $ 7,602,672 PROJECT ACCOUNT C1 82068201 WIB USD $ 141,304 $ 141,304 xx The bank balance for the account is broken down as follows: 5. Subsidiary Agreement between NRPB and PJIAE On March 10, 2020, NRPB and PJIAE entered into a Subsidiary agreement which stipulates among others the obligations of the NRPB and PJIAE in the context of the Grant Agreement. Article 2 of the said agreement stipulates that NRPB undertakes to make necessary proceeds available to PJIAE and these resources are made available by way of a loan in accordance with the On-lending Agreement. This On-lending agreement dated December 6, 2019 between PJIAE and the Country Sint Maarten represented by the Minister of Finance stipulates among others terms of loans such as repayments and interest. On April 15, 2022 the Additional Financing Agreement was signed. Subsequently the amendment to the Subsidiary Agreement was signed dated May 9, 2022. 6. On-Lending Agreement The funds PJIA receives from NRPB under the Project are considered a liability for PJIA, given that the Government of Sint Maarten on-lends the Project Funds to PJIA in accordance with an on-lending agreement. Hence, under PJIA Financial Statements World Bank Loan is included under “long term liabilities” Page 16 Special Purpose Project Financial Statements for the period ended December 31, 2021 Sint Maarten Airport Terminal Reconstruction Project/Grant no. P167974 7. Subsequent Events 7.1: Additional Financing Management has evaluated the subsequent events between January 1, 2022, and audit report date on Special Purpose Project Financial Statements. There are no subsequent events that would require adjustment. For disclosure purposes: USD 20 million (Twenty Million US Dollars) was approved for the Additional Financing Sint Maarten Airport Terminal Reconstruction Project on November 12, 2021. Subsequently, Additional Financing Sint Maarten Airport Terminal Reconstruction Project Grant Number TF0B7571 was signed on April 15, 2022. 7.2: Eligible expenditures processed after 2021 Eligible expenses processed after December 31,2021 mentioned in the Designated Account reconciliation for the period ended December 31, 2021, refers to the fact that the expenses are recorded in the Statement of Sources and Uses of Funds for the period ending December 31, 2021, but not as yet recorded in Client Connection as of the above mentioned date of December 31, 2021. Supplementary Information for the period ended December 31, 2021 (Expressed in United States Dollars, unless otherwise stated) Status of Project Tracking implementation status and Annual Workplan (AWP): Since the approval of the project, the NRPB and WB teams have been holding teleconferences on a regular basis to monitor project implementation. Frequent communication and monitoring of start-up activities has been instrumental in developing the projects outlined. The Project Management Unit (“PMU”) of PJIAE together with the National Recovery Program Bureau monitors and regular updates are held to ensure continuance and guidance on all levels together. USD 20 million (Twenty Million US Dollars) was approved for the Additional Financing Sint Maarten Airport Terminal Reconstruction Project on November 12, 2021. Subsequently, Additional Financing Sint Maarten Airport Terminal Reconstruction Project Grant Number TF0B7571 was signed on April 15, 2022. Table A: Key Project Data Financing Approval Effectiveness Closing Date Date Date September 18, 2019 December 31, December 9, 2022. Sint Maarten Hurricane Irma Reconstruction, 2019 Updated Recovery and Resilience Trust Fund; USD 72.00 April 7, 2020 (date of Closing Date million signing of December 31, grant 2023 agreement) Disbursed to Date: USD 13,500,530 Disbursements through reimbursements (Project to date): USD 10,938,642 Projected Disbursement Withdrawals to Designated Account (by the end of December 2022): USD 20,000,000 Projected Disbursements Direct payments (by the end of December 2022): USD 12,000,000 Page 17 Special Purpose Project Financial Statements for the period ended December 31, 2020 Sint Maarten Airport Terminal Reconstruction Project/Grant no. P167974 The Project Development Objective (PDO) of the Sint Maarten Airport Reconstruction Project is to restore the passenger capacity of Princess Juliana International Airport (PJIAE) to pre-Hurricane Irma levels with improved resilience towards hurricanes reconstruction. Table B: Amounts documented per Category expenses from World Bank funds as of December 31, 2021 Type Category Summary Currency Amounts in USD Withdrawal DA DA-A USD 10,545,730 Expenditures 1 USD 4,898,344 Expenditures 2 USD 213,650 Expenditures 3 USD - Expenditures 4 USD 10,938,642 Table C: Designated Account Reconciliation Statement EIB for the period ended on December 31, 2021 (Expressed in United States Dollars) DESIGNATED ACCOUNT RECONCILIATION STATEMENT EIB 39130030080 LOAN/CREDIT/PPF/COFINANCIER NUMBER P167974 - Sint Maarten Airport Terminal Reconstruction Project ACCOUNT NUMBER 391303080 WITH (BANK) CBCS US$ 1 TOTAL ADVANCED BY EIB 6,443,475 2 LESS: TOTAL AMOUNT DOCUMENTED IN QUICKBOOKS 4,898,344 3 PRESENT OUTSTANDING AMOUNT ADVANCED TO THE DESIGNATED ACCOUNT (1 - 2) 1,545,131 Table D: Project Account Reconciliation Statement Funds Deposited by PJIA in Pool Account 82068408 for the period ended on December 31, 2021 (Expressed in United States Dollars) PJIA ADVANCE RECONCILIATION STATEMENT LOAN/CREDIT/PPF/COFINANCIER NUMBER P167974 - Sint Maarten Airport Terminal Reconstruction Project Funds Deposited Project account 82068408 US$ 1 TOTAL ADVANCED BY PJIA TO PROJECT ACCOUNT 82068408 910,000 2 LESS: TOTAL AMOUNT DOCUMENTED IN QUICKBOOKS 144,981 3 PRESENT OUTSTANDING AMOUNT ADVANCED TO PROJECT ACCOUNT 82068408 765,019 Page 18