Kiri

Deloitte Audits Latvia SIA Gredu iela 4a Our Ref: 25.08.2022 No 25-4/22-94-1 LV-1019, Riga Representations by Management This representation letter is provided in connection with your procedures agreed with you under the terms of reference dated 30 January 2020 with RB Rail AS, regarding the costs declared in the:  Connecting Europe Facility (CEF) individual Financial Statements of financial years 2020 and 2021 of the Ministry of Economic Affairs and Communications of the Republic of Estonia (Beneficiary) concerning the grant agreement INEA/CEF/TRAN/M2019/2098073;  Connecting Europe Facility (CEF) individual Financial Statements of financial years 2020 and 2021 of the Ministry of Economic Affairs and Communications of the Republic of Estonia (Beneficiary) concerning the grant agreement INEA/CEF/TRAN/M2019/2098304 for the purpose of providing your Independent Reports of Factual Findings using the compulsory report format provided by European Climate, Infrastructure and Environment Executive Agency (CINEA) and agreed with you. We acknowledge that the procedures were performed in accordance with CINEA Terms of Reference (Annex VII to Grant Agreements) and that you have performed the procedures and reported to us based on ISRS 4400 (Engagements to Perform Agreed-upon Procedures Regarding Financial Information). We acknowledge our responsibility for the fair presentation of the financial statements in accordance with CINEA requirements. We confirm, to the best of our knowledge and belief, the following representations: 1. Our responsibility for the design, implementation, and operation of internal control that is designed to prevent and detect fraud and error; 2. The completeness of information provided regarding the results of our assessment of the risk that the Financial Statements may be materially misstated as a result of fraud; 3. The completeness of information provided regarding our knowledge of fraud or suspected fraud affecting the Beneficiary involving the following: a. Management, b. Employees who have significant roles in internal control, or c. Others if the fraud could have a material effect on the Financial Statements. Suur-Ameerika 1 / 10122 Tallinn / ESTONIA Phone: +372 625 6342 / Fax: +372 631 3660 / E-mail: [email protected] / http://www.mkm.ee  4. The completeness of information provided regarding our knowledge of any allegations of fraud, or suspected fraud, affecting the Beneficiary’s financial statements communicated by employees, former employees, analysts, regulators, or others; 5. To our knowledge, there have been no irregularities involving management or employees of the Beneficiary who have a significant role in internal control or that could have a material effect on the financial statements; 6. We have made available to you all books of account and supporting documentation; 7. The financial statements are free of material misstatements, including omissions; 8. The Beneficiary has complied with all aspects of contractual agreements that could have a material effect on the financial statements in the event of non-compliance; 9. We have disclosed all known actual and possible noncompliance with laws and regulations, the effect of which should be considered when preparing financial statements; 10. No claims in connection with litigation have been or are expected to be received; 11. We confirm that there were no subcontracting costs in line with Article II.10.2 of the Grant Agreement; 12. The Procedures were carried out solely to assist CINEA in evaluating whether the Beneficiary’s costs in the Financial Statement(s) were declared in accordance with the agreement. CINEA draws its own conclusions from the Report and any additional information it may require. The report is not to be used in parts or for any other purposes without prior notification of Deloitte Audits Latvia. 13. We acknowledge that procedures carried out constitute neither an audit nor a review made in accordance with International Standards on Auditing or International Standards on Review Engagements, the Auditor does not give a statement of assurance on the Financial Statements. Had the Auditor carried out additional procedures or an audit of the Beneficiary’s Financial Statements in accordance with International Standards on Auditing or International Standards on Review Engagements, other matters might have come to its attention and would have been included in the Report. 14. The agreed upon procedures require the Auditor to establish whether the Beneficiary provided adequate evidence that the services/ works were provided by the contractors. We acknowledge that for this purpose the Auditor:  in order to ascertain the fact of provision of the goods or services, inspects invoices, acceptance acts, delivery notes, and contracted deliverables,  establishes that the subject of the deliverables corresponds to the one as stipulated per the contract, and  that the deliverables have reasonable indication that the purchased services or goods were provided. We acknowledge that although the Auditor checks the overall reasonableness of the documentation related to selected contracts, it is out of Auditor’s work scope to exercise a judgement as to whether the technical substance (e.g. technical characteristics and specifications of goods or services rendered) of the documentation and deliverables corresponds to the contracts awarded in nature, volume, quality, or value. 2 (4)  15. The agreed upon procedures require the Auditor to establish that:  the procedure was sufficiently transparent and non-discriminatory (the selection and award criteria enabled fair competition and did not unfairly favor any bidder);  the evaluation was sufficiently documented, with a clear audit trail leading to the selection of the contractor recommended by the evaluation process  in case of tenderers excluded/rejected during the evaluation process the exclusion/rejection was justified and consistent with the requirements in the contract notice / tender specifications (exclusion, selection and award criteria). We acknowledge that for this purpose the auditor inspects Procurement commission session minutes and establishes whether the grounds for rejection/exclusion are supported by an adequate detail and with references to the procurement criteria; checks that the commission decisions are publicized and communicated to the rejected tenderers in accordance with the relevant law or internal rules. We confirm that it is our responsibility to determine appropriate requirements and criteria in the procurement and to evaluate the tenderers against them. We acknowledge that the Auditor’s work scope does not assume an exercise of judgement and evaluation of the appropriateness of procurement criteria and rejection decisions made based on those. 16. The agreed upon procedures require the Auditor to conclude whether amendments to the contracts do not introduce changes which are materially different in character from the conditions of the original contract showing the intention to renegotiate essential terms of the contract. We acknowledge that for this purpose the Auditor inspects if the amended essential terms of the contract reasonably correspond in nature to the initial ones, and the essential terms are those terms, which were included in the tenderers’ assessment criteria. We acknowledge that it is out of Auditor’s work scope:  to determine qualitative or quantitative aspects of the above mentioned materiality and “materially different changes” and exercise judgement as regards to whether those changes are material;  to exercise judgement as to whether the changes to technical substance (e.g. technical specifications of goods or services) of the amended contracts correspond in nature, volume, quality, or value to the original contracts. 17. The agreed upon procedures require the Auditor to conclude whether the amount, duration and conditions of the contract signed following the award process were consistent with the provisions stipulated in the procurement documents. We acknowledge that for this purpose the Auditor inspects the following contracted conditions reasonably correspond to the procurement documents: technical characteristics of the goods/services, deadline, delivery schedule, amount, price per unit, volume, and other conditions, in case they were part of award criteria for the procurement. We acknowledge that it is out of Auditor’s work scope to evaluate all the contract conditions and to exercise judgment on appropriateness of those conditions. 3 (4)  18. The agreed upon procedures require the Auditor to conclude whether the contracted tasks are relevant for the activities (or sub-activities) defined in the Agreement. We acknowledge that although the Auditor checks that the documentation related to selected contracts and the contracted goods or services are reasonably relevant to the activities (or sub-activities) defined in the Agreement, it is out of Auditor’s work scope to exercise a judgement as to whether the substance (e.g. technical characteristics and specifications of the goods or services) of the contracted tasks correspond to the relevant activities. 19. The agreed upon procedures require the Auditor to conclude, whether, in the award of the audited contracts, the principle of sound financial management and basic principles of the Treaty of the Functioning of the European Union are respected (transparency, equal treatment, non-discrimination). We acknowledge that for the purpose of evaluating sound financial management, the Auditor verified whether the scope of the contract is clearly defined and the task is contracted only if the budget for the specific activity is not yet reached. We acknowledge that for the purpose of evaluating respective basic principles of the Treaty, the Auditor:  for contracts outside the scope of National Law – inspected Small procurement form which represents the results of market survey performed and whether the decision taken agrees with the survey results;  for contracts in scope of National Law – basic principles were covered by procedures performed on Standard factual findings section B.1.1. (e.g. publicity, award criteria, determination of the winner of the tender etc.). (signed digitally) Ahti Kuningas Secretary of Transport acting Secretary General of the Ministry of Economic Affairs and Communications 4 (4)