enugu state commercial agriculture development...

ENUGU STATE COMMERCIALAGRICULTURE DEVELOPMENT PROJECT

(CADP)(WORLD BANK ASSISTED)

AUDITED ACCOUNTS REPORT FOR THE YEAR ENDED

3 1 sT DECEMBER, 2016

EZECHUKWU NWAIWU & CO.CHARTERED ACCOUNTANTS

NIGERIA

APRIL 2017

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ENUGU STATE COMMERCIAL AGRICULTURE DEVELOPMENT PROJECT

(WORLD BANK ASSISTED)

TABLE OF CONTENT PAGE

Corporate Information 3

Auditor's Report 4

Accounting Policies 6

Balance Sheet 8

Statement of Expenditure 9

Statement of Receipts and Payments 10

Cash flow Statement 11

Notes to the accounts 12

Special Account 14

Statement of Funding 15

Schedule of Fixed Assets 16

2

ENUGU STATE COMMERCIAL AGRICULTURAL DEVELOPMENT PROJECT


Corporate Information

Address: No, 11/13 Ubosi Street,Behind Fire Service,New Haven,Enugu.

Project Credit Number: Credit No. 45390 - UNICurrency: USD

Bankers: Diamond Bank Plc.No 1 Garden Avenue, Enugu.

Auditors: Messrs. Ezechukwu Nwaiwu & Co.(Chartered Accountants)111 Chime Avenue, New HavenZandas PlazaEnugu, NigeriaTel: 08035472045, 07032098883Email: nwaiwuezechukwuagmailcom

Key Project Officers:Nduaguba .I. Robinson State Project CoordinatorEze J. I Head, PFMUAnukwe Edwin Project AccountantNgene Afamefuna Procurement OfficerChristain Nwosu Project Internal AuditorIkechukwu Okechukwu Monitoring & Evaluation OfficerOgbuisi Stephen Environmental OfficerOgbuenyi Sunday CBDOEgnr. Ogbuh Emmanuel RIOElizebeth .R. Chime CommunicationNjoku Jacinta APAEze Perpetua Cashier

3

EZECHUKWU NWAIWU AND CO.(CHARTERED ACCOUNTANTS)Head office: iii Chime Avenue New Haven, Enugu Nigeria,Branch Ottice: Block 3, 69 (A) 32 Road, Off Sixth Avenue, Team 7 Gwarinpa II Estate, Abuja

08035472045,08035472431e-mail: [email protected]; [email protected]

REPORT. OF THE AUDITORS TO THE -MEMBERS OF ENUGU STATECOMMERCIAL AGRICULTURE DEVELOPMENT PROJEC(WORLD BANK ASSISTED)

We have audited the accompanying Financial Statements of the Enugu State CommercialAgriculture Development Project for the year ended 31 st December, 2016 as set out on pages 8 to13, prepared on the basis of the accounting policies on pages 6 to 7. The project is financed byIDA credit number 45390.

RESPECTIVE RESPONSIBILITES OF THE PROJECT MANAGEMENT ANDAUDITORSThe Enugu State Project Financial Management Unit (PFMU) coordinates the activities of theproject and as such is responsible for the preparation of the financial statement. It is ourresponsibility as Auditors to express an independent opinion, based on our audit on our audit ofthese financial statements and to report our opinion to you.

BASIS OF OPINIONWe conducted our audit in accordance with Generally Accepted Auditing Standards and WorldBank Guidelines. The Standards and World Bank Guidelines require that we plan and performthe audit to obtain reasonable assurances that the financial statements are free from materialmisstatements. An Audit includes examination, on a test basis, of evidence relevant to theamount and disclosure in the financial statements. It also includes an assessment of theestimates and judgments made by the project officers in the preparation of the financialstatements and whether the accounting policies are appropriate to the project circumstances,consistently applied and adequately disclosed

We planned and performed our audit so as to obtain all the information and explanations whichwe considered necessary in order to provide us with sufficient evidence to give reasonableassurance that the financial statements are free from misstatement, whether caused by fraud,other irregularity or error.In forming our opinion, we also evaluated the overall adequacy of the presentation of thefinancial statements.

OPINIONIn our opinion, the project financial statements give a true and fair view of the financial positionand of the sources and application of funds of the Enugu State Commercial Agriculture andDevelopment Project for the year ended 31 st December 2016 in accordance with InternationalAccounting Standards and National Accounting Standards issued by the Nigeria AccountingStandards Board.

4

STATEMENT OF EXPENDITURE (SOE)

The statements of expenditure (SOE) incurred within the year are in agreement with thebooks of account and adequate supporting documentation have been maintained to supportclaims to the World Bank for reimbursing of expenditures incurred, and whichexpenditures are eligible for financing under the credit agreement.

SPECIAL ACCOUNT

The Statement of Special Account (SA) of the project on Page ii has been prepared on thebasis of cash deposit and transfers for purposes of complying with the credit loanagreement and gives a true and fair view of the beginning and ending balances and theaccount activity for the year ended 3 1 st December, 2016.

COUNTERPART FUND ACOUNT

The counterpart funds have been provided in accordance with financing agreement, andhave been properly used for projects purposes. All payments from this account wereproperly supported by relevant documents and were all properly recorded in the books ofaccounts.

FOR: EZECHUKWU NWAIWU & CO.

3 6/ICAN4

01353805EZECHUKWU NWAIWU, FCA ENUGU, NIGERIA

MAY, 2017

ENUGU STATE COMMERICAL AGRICULTURAL DEVELOPMENT PROJECT(WORLD BANK ASSISTED)

ACCOUNTING POLICIESThe following are the significant accounting policies, which have been adopted in thepreparation of these financial statements.

ACCOUNTING CONCEPTS:These accounts have been prepared on cash basis of accounting as is practiced by theGovernment of Nigeria.

ACCOUNTING CONVENTIONThe accounts are prepared under the historical cost convention.

FIXED ASSETS:Fixed assets are accounted for at cost and capitalized as an integral part of the projectsaccumulated development cost. However, expenditure of capital nature are isolated andtracked by means of assets register.

a) In applying the capitalization policy, all related (landed) cost and installation costare included in the acquisition cost of the fixed assets item.

b) Capital expenditure on contract works was included on the basis of valuationcertificates including retention.

c) No depreciation is charged on the project's fixed assets as there are no revenues to bematched against such changes and because the cash basis of accounts is in effect.

DEVELOPMENT COST:All costs incurred by the project are considered Development costs and are thereforedeferred to be matched against future benefits.

INVENTORYInventory is valued at the lower cost and net realizable value.

FOREIGN CURRENCYIncome and expenditure items in foreign currency were converted to naira at the ratesruling at the transaction dates. Assets and liabilities expressed in foreign currencies wereconverted to naira at the rates ruling at the balance sheet date and gain or losses on suchconversions were credited or charged top reserve in the period which they arose.

6

GOING CONCERNThe project is assumed to continue to operate in the foreseeable future.

CONSISTENCYThere will be consistency of accounting treatment of likely items within each accountingperiod to the next.

7


(WORLD BANK ASSISTED PROJECT)

BALANCE SHEET AS AT 31ST DECEMBER 2016

NOTES 2016 2015 CUMULATIVEASSETS N N

Project Cost 1 586,716,864 197,862,829 2,902,460,228CURRENT ASSETS

Cash and Bank Balances 2 77,211,943 91,o69,440 168,281,383

663,928,807 288,932,269 3,070,741,611

FINANCED BY:

IDA Credit 590,880,765 184,265,845 2,686,751,303State Government Contribution - 20,000,000 308,188,998Other Income - Interest Received 103,158 - 2,375,108Exchange Rate Difference - 481,319 481,318Surplus/Deficit 72,944,885 84,185,105 72,944,885

663,928,807 288,932,269 3,070,741,611

Approved by: Project Financial Management Unit on 2nd May, 2017 and signed on its behalf by:

...... ........ ... . ... ..................... Project Coordinator

Mr. Nduaguba .I. Robinson

........... ... .............. d PFM U

Eze J. I

.... ... .P ............................ Project Accountant

Mr. Ed n.I. Anukwe

The accounting policies on pages 6-7 and the attached notes 1-3 form an integral part of thesefinancial statements

8

ENUGU STATE COMMERCIAL AGRICULTURE DEVELOPMENT PROJECT(WORLD BANK ASSISTED)

STATEMENT OF EXPENDITURE FOR THE YEAR ENDED 31ST DECEMBER 2016

NOTES 2016 2015 CUMULATIVEPROJECT COST N N N

Fixed Assets 4,760,467 6,296,190 72,438,830

Training /Workshop 112,880,280 60,841,366 438,987,616

Civil Works 15,430,408 31,700,425 913,766,867

Grants 326,268,891 - 614,538,780

Consultancy 892,500 8,296,820 82,128,336Project cost for the period 460,232,546 107,134,801 2,121,860,429

OPERATING COSTS

Office Running Cost 3 126,484,318 90,728,028 740,385,232Operating cost for the period 586,716,864 197,862,829 2,862,245,661

The accounting policies on pages 6-7 and the attached notes 1-3 form an integral part of thesfinancial statements

9


(WORLD BANK ASSISTED)STATEMENT OF RECIEPTS AND PAYMENTS FOR THE YEAR ENDED 31ST DECEMBER 2016

NOTES 2016 2015 CUMULATIVE

RECIEPTS

IDA Credit 590,880,765 184,265,845 2,650,979,524State Government Contribution - 20,000,000 308,188,998

Other Income - Interest received 103,158 481,319 2,375,108

590,983,922 204,747,164 2,961,543,629

LESS: PAYMENTS

Fixed Assets 4,760,467 6,296,190 77,607,737Grants 326,268,891 614,538,780Training /Workshop 112,880,280 60,841,366 438,987,616Operating Cost 126,484,318 90,728,028 740,385,271Civil Works 15,430,408 31,700,425 913,766,867Consultancy 892,500 8,296,820 82,128,336

586,716,864 197,862,829 2,867,414,607

4,267,058 6,884,335 2,284,964,801

Balance for the year 4,267,058 6,884,335 4,267,058

Balance brought forward 91,o69,440 84,185,105 91,o69,440Balance carried forward 95,336,498 91,o69,440 95,336,498

The accounting policies on pages 6-7 and the attached notes 1-3 form an integral part of these

these financial statements

10

ENUGU STATE COMMERCIAL AGRICULTURE DEVELOPMENT PROJECT(WORLD BANK ASSISTED)

CASHFLOW STATEMENT FOR THE YEAR ENDED 31ST DECEMBER 2016

2016 2015 CUMULATIVE

Cash flow from Operating Activities:

Project Development Cost for the year (586,716,864) (197,862,829) (2,704,597,439)

Net Cash flow from Operating Activities (586,716,864) (197,862,829) (2,704,597,439

Cash flow from Financing Activities:

Funds Received 590,983,922 204,747,164 2,450,571,608

Net Increase/(Decrease) on Cash & Cashequivalent 4,267,058 6,884,335 4,267,05

Cash and Cash Equivalents 1/1/2016 91,o69,440 84,185,105 91,o69,44(

Cash and Cash Equivalents 31/12/2016 95,336,498 91,o69,440 95,336,49f

RECONCILIATION

Bank 95,336,498 91,o69,440 95,336,49k

11


FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER 2016

NOTES TO THE ACCOUNTS 2016 2015 CUMULATIVE

1. PROJECT COST

Fixed Assets 4,760,467 6,296,190 77,607,737Grants 326,268,891 - 614,538,780Training/ Workshop 112,880,280 60,841,366 438,987,616Civil Works 15,430,408 31,700,425 913,766,867Consultancy 892,500 8,296,820 82,128,336Operation Cost 126,484,318 90,728,028 740,385,232

586,716,864 197,862,829 2,867,414,568

2. BANK BALANCES

IDA Special Account 69,184,910 84,356,355 69,184,910Counterpart Fund 1,943,378 167,808 1,943,378Naira Interest Account 2,531,828 2,531,828 2,531,828Dollar Interest Account 1,001,452 652,226 1,001,452

Drawdown Account 2,550,375 3,361,223 2,550,375

77,211,943 91,o69,440 77,211,943

3. OPERATION COSTS

Advertising and Media 19,280,804 6,243,410 69,182,956Postages and Telephone 3,928,310 2,397,785 17,237,762Imprest 297,105 1,o86,200 5,929,815PFMU Running Cost 1,843,800 2,407,229 15,o69,329

Staff Incentives/Allowance 11,163,259 22,501,645 198,393,003Meetings 35,260,020 30,144,533 146,o84,366Monitoring & Evaluation 15,775,950 - 23,225,850Prepayment

175,000Insurance 1,099,250 1,614,710 19,523,129

12


FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER 2016NOTE TO THE ACCOUNTS CONT'D

Office Expenses 1,822,620 1,742,745 15,950,309Electricity and Lighting 200,000 200,000 744,000Printing and Stationery 4,024,565 3,070,518 21,489,676Asset Maintenance Cost - 2,028,875 17,66o,044Bank Charges 755,597 - 2,410,901Exchange Difference - 122,668Demo & Dissement of Tech 1,560,856 3,015,856Office Rent 700,000 1,400,000

Transport, Travelling & Diesel 29,413,391 15,029,523 181,150,921QPR & Mt'ce of Vehicles 1,186,825 - 2,975,675QPR & Mt'ce of Equipment 432,823 - 680,473

126,484,318 90,728,029 742,421,732

13


(WORLD BANK ASSISTED)SPECIAL ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER 2016

2016 2015 CUMULATIVE

Depository Bank

Diamond Bank Plc

Related Loan Credit: IDA 45390 Unit .

Currency: USD

Opening Balance 423,906.31 312,228.o6 -

World Bank Replenishments 2,133,186.34 928,904.98 11,470,508.21

Interest Earnings 846.83 867.62

2,557,939.48 1,242,000.66 11,470,508.21

Deduct:

Transfer/ Conversions (2,179,994.65) (817,944.27) (11,102,008.55)

Bank Charges (191-71) (150.08) 1,447.94(2,180,186.36) (818,094.35) (11,1oo,56o.61)

Balance as at 31/12/2016 377,753.12 423,906.31 377,753.12

14



STATEMENT OF FUNDING DURING THE YEAR 2016

APPLICATIONDATE NO DESCRIPTION AMT IN USD EXC. RATE AMT IN NAIRA

17 2016 EN CADP 068 1 REPLENISHMENT 17 , 82. 196.6

17 2016 EN/CADP/o6g/1 REPLENISHMENT _262,o42.44 199.oo 2,1 6,4 . 6

21 / 2016 EN CADP070/15 REPLENISHM ENT 7 ,9 6 9 .01 80 0 .

2 6 2016 EN CADP o 1 1 REPLENISHMENT 6 , 01.1 1 .oo 12, 1 , 28.8

2 6 2016 EN CADP o 2 1 REPLENISHMENT 16 ,2o . 280.00 , , 2 .20

8 8 2016 EN CADP o 1 REPLENISHMENT 20 , 10.00 6 , 1, 8. 0

17/8/2016 ENZCADP/074 15 REPLENISHMENT 179,852-78 315.oo665,257

2 2016 EN CADP o 1 RELNSMNT 248,78.42_ o0.oo0,86 218.10

11 10 2016 EN/CADP/076 i ADDITIONAL ADV. 6oo,ooo.oo 31o.oo 186,ooo,ooo.oo

2oZ12/2016 ENZCADP/o7 i ADDITIONAL ADV. 1 o,91 0 .oo 6,o22,791.7

TOTAL 2 113186.3 2,621.oo o806.

The accounting policies on pages 6-7 and the attached notes 1-3 form an integral part of thesefinancial statements

15

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一淤

ENUGU PFIVIU OPERATING COST ACCOUNTSTATEMENT OF ACCOUNT FOR THE PERIOD JAN. I- DEC. 31,2016.

TRIAL BALANCE2016 2016 2015

RECEIPTS:- NGN NGN NGN-Opening bal.(Cash & Bank) 157,482.20 444,165.70

HSDP 11 -CADP 1,603,800.00 1,278,750.00CSDPHIV\AIDS 1,635,150.00 1,291,867.50NEWMAP 1,630,200.00 1,285,234.50FADAIVIA 11 1,313,400.00 961,950.00RAMP 1,626,025.00 1,291,042.50OTHERS 3,000.00

7,811,575.00 7,811,575.00TOTAL 7,969,057.20 6,553,010.20

PAYMENTS-Printing & Stationery 1,389,780.00 1,508,550.00Internet Services 1,163,000.00 840,000.00Repairs and Maintenance of Office Equipmt 447,990.00 810,250.00Tokuns Int. Ltd(Accounting Software Provider)Frainings 1,146,190.00Telephones, Fax and GSIVI 940,800.00 942,600.00Office Supplies 790,700.00 658,939.00Travelsk LT & T 420,500.00 305,889.00Bank Charges(Cost of Chq BK) 6,464.68 2,100.00Fuel and Gas Expenses 433,400.00 443,500.00Maintenace of Office Building. 165,500.00 341,500.00Maintenace of Vehicle 198,750.00 302,200.00Wages 220,000.00 240,000.00

Total Payments 7,323,074.68 7,323,074.68 6,395,528.00Excess Receipts over Payments 645,982.52 157,482.20

CLOSING BALANCES:Bank 579,982.52 13V,202.20Cash 66,000.0(y F,_280.00

Total 645,982.E(2 f57,482.20

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