OFFICIAL USE

TERMS OF REFERENCE

Albanian Railways – Assistance with IFRS Reporting

1. BACKGROUND

EBRD is currently considering a sovereign loan of up to EUR 36.87 million to the Government of Albania (the “Borrower” or “GoA”) to be on-lent to Hekurudha Shqiptare (the “Albanian Railways”, the “Company” or “HSH”). The loan will be used to finance the rehabilitation of the 34.17 km railway line between the Tirana Public Transport Terminal (“PTT”) and the city of Durres and the construction of a new railway line approximately 5 km in length and its interchange connecting the Tirana-Durres line with the Tirana International Airport (the “Project”). The Bank’s loan will be used to co-finance the construction works related to the Project.

The Project is part of Route 2 of the Western Balkans Core Network connecting the cities of Podgorica in Montenegro and Vlore in Albania and has been established as an indicative extension to the Trans-European Transport Networks (“TEN-T”) to the Western Balkans core railway network.

The Project forms part of the Connectivity Agenda of the European Union (“EU”) which promotes transport connectivity in the Western Balkans as an important factor for the economic development, regional cooperation and EU integration.

Implementation of the Project will be overseen by a Project Implementation Unit (“PIU”) comprising members of the Company, Ministry of Transport and Infrastructure (the “Ministry”, “MTI”) and other relevant stakeholders.

Currently the Company’s accounting policies and procedures are not compliant with International Financial Reporting Standards (“IFRS”). As such a consultant (the “Consultant”) is required to review HSH’s accounting policies and procedures to ensure they are consistent with IFRS, provide advice regarding amendments required to ensure their consistency with IFRS and support the Company in preparing fully IFRS compliant financial records and reporting.

2. OBJECTIVES

The Consultant shall review HSH accounting policies and procedures and advise amendments to ensure their consistency with IFRS and support the Company in preparing fully IFRS compliant financial records and reporting. Moreover, the Consultant will advise on other reports and special analyses, as part of the Management Information System, which are needed to facilitate effective financial management. Furthermore, the Consultant will train the Chief Financial Officer and its team on the application of the new IFRS compliant policies and procedures.

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3. SCOPE OF WORK

In order to achieve the objective the Consultant will carry out the following activities:

1. Review Company’s accounting policies and procedures and advise amendments to ensure their consistency with IFRS;

2. Review Company’s accounting manual in line with the new IFRS compliant policies and procedures;

3. Review Company’s Management Information System in regard to financial reports and advise on the required reports and special analyses, including reporting and analysis templates and guidelines, that are needed to answer management’s questions about the financial statements or financial information for the purpose of facilitating management decision making;

4. Review Company’s Assets register, including Company’s property and equipment, and support its update with necessary and accurate information for the purpose providing accurate financial information in the preparation of IFRS Financial Statements. Moreover, advise and support preparing clear guidelines for accurate and IFRS compliant maintenance of the asset records;

5. Review Company’s cost accounting system and advise on the methodology, including analysis templates and guidelines, necessary for the management decision making;

6. Review Company’s historical financial statements and advise and support the management in compiling fully IFRS compliant financial statements (including: Balance Sheet; Profit and Loos statement, Cash Flow statement and the Statement of Changes in Equity), for the financial year 2014, including necessary restatements for the previous financial years;

7. The Consultant will ensure the transfer of skills to the relevant HSH staff for the purpose of developing in-house capacities for the preparation of fully compliant IFRS financial statements as well as other relevant management financial information going forward. The Consultant will provide training workshops as well as on-the-job trainings to the Chief Financial Officer and its team and other relevant HSH staff for the implementation of the newly developed policies, procedures and other business information processes that are developed under the project.

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4. IMPLEMENTATION ARRANGEMENTS

The Consultant shall report to HSH management on all aspects of the assignment

The assignment will be closely monitored by EBRD’s Operation Leader. The Operation Leader will also be in close contact with HSH and the Consultant.

The Consultant will be provided with all necessary support by HSH management and staff.

The Consultant will generally work in an advisory capacity, although more direct and hands-on responsibilities will be assigned in some critical areas. Training of the relevant HSH staff, particularly in the new IFRS procedures and other business information processes that are developed under the project, will form an important part of the Consultant’s duties.

5. REPORTING AND DELIVERABLES

The Consultant shall report directly to HSH, with a copy to EBRD, providing documentation of assignment plans and progress of work. At a minimum the Consultant will prepare and review with HSH management the following:

 An inception report, including the working plan and the implementation schedule;

 Summary progress reports on quarterly basis, including documenting findings, conclusions, recommendations, results, issues and proposed next steps.

The Consultant will submit a Final Report that will sum up the work done and the achievements accomplished during the assignment. The final report should also include recommendations for further action. All the reports will be prepared in English and the Consultant shall ensure that the quarterly reports are received by the Bank within three weeks after the end of each quarter and the final report not latter than 30 days after the end of the assignment.

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