zI REVOLUTIONARY GOVERNMENT OF ZANZIBAR OFFICE OF THE CONTROLLER AND AUDITOR GENERAL ZANZIBAR z 0 AUDIT REPORT OF THE CONTROLLER AND AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE ZANZIBAR ENERGY SECTOR TRANSFORMATION AND ACCESS (ZESTA) PROJECT FOR THE PERIOD ENDED 30TH JUNE 2023 z Office of Controller and Auditor General, Maisara, Street, P.O. Box 258, *Tel: +255 24 2234009 Fax: +255 24 2234009 a E-mail: info@ocaqz.go.tz * Website: ww.cq.ot DECEMBER,2023 REPORT OF THE CONTROLLER AND AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE ZANZIBAR ENERGY SECTOR TRANSFORMATION AND ACCESS (ZESTA) PROJECT FOR THE PERIOD ENDED 30TH JUNE 2023 Unqualified Opinion In our opinion ZESTA's financial statements give a true and fair view of the financial position as at 30th June 2023, financial performance and cash flows for the year then ended in accordance with International Public Sector Accounting Standards (IPSASs), the results of its operations and comply with the Loan Agreement. We have audited the accompanying financial statements of Zanzibar Energy Sector Transformation and Access Project (ZESTA) for the year ended 30 June 2023, which comprise the statement of financial position, the statement of financial performance, statement of changes in net Asset and statement of cash flows for the year then ended, and a summary of significant Accounting Policies and other explanatory notes. Basis of Opinion We conducted our audit in accordance with International Standards on Supreme Auditing Institutions (ISSAIs). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. The audit was conducted in all aspects such as other procedures that requires to obtain reasonable assurance whether the financial statements are free of material misstatements of the ZESTA Project. It is also includes assessing the significant estimates and judgments made in the preparation of the financial statements, assessing whether the internal control system and the accounting policies are appropriate to the circumstances of the Project consistently applied and adequately disclosed. We are independent of the Project in accordance with the International Ethics Standards Board for Accountants, Code of Ethics together with the ethical requirements that are relevant to our audit of the financial statements, and we have fulfilled our other ethical responsibilities in accordance with these requirements. 1 I Page I believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in my professional judgment, were of most significance in my audit of the financial statements of the current period. These matters were addressed in the context of my audit of financial statements as a whole and in forming my opinion thereon, and I do not provide a separate opinion on these matters. I have determined that there are no key audit matters to communicate in my report. Other Information Management is responsible for the other information. The other information comprises the report to those charged with governance and the Declaration by the Head of Finance but does not include the financial statements and my audit report thereon. My opinion on the financial statements does not cover the other information, and I do not express any form of assurance conclusion thereon. In connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work I have performed on the other information that I obtained prior to the date of this audit report, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard. Responsibilities of Management for the Financial Statements Management of the Project (ZESTA) is responsible for the preparation and fair presentation of the financial statements in accordance with IPSAS and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. 2 | Page This responsibility includes, selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances. Auditors' Responsibility for the Audit of the Financial Statements My 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 and to issue an audit report that includes my opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISSAIs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Specifically, I am required to satisfy myself whether the funds contributed to the Project were exclusive and judiciously meet eligible expenditure with due regard to economy efficiency and effectiveness. As part of an audit in accordance with ISSAIs, I exercise professional judgment and maintain professional skepticism throughout the audit. I also: * Identify and assess the risks of material misstatement of the 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 my 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 entity's internal control. * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. 3 Page * Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit. I also provide those charged with governance with a statement that I have complied with relevant ethical requirements regarding independence and to communicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards. HAMAD A. HAMAD /CONTROLLER AND AUDITOR GENERAL, ZANZIBAR. 4 | Page ZANZIBAR El LCIRJCIY CORPORATION (/IECO) ZAN/IBAR ENERGY SECTFOR TfRANSIORMATION AND ACCESS IN /AN/IIIAR CORPORATION PROJ[CT FUNDED BY WORLD BANK Table of Contents R EPO RT O F M ANNAAG IMN TN ........................................-..................... ................... ,.......? 1. INCORPORATION, PRINCIPAL ACTIVITIES AND BACKGROUND...................2 2. ZECO MISSIONS.SI 3 . Z E C O V IS IO N ... .......................................................................................................2 4. ZANZIBAR ENERGY SECTOR TRANSFORMATION AND ACCESS PROJECT IN ZANZIBAR ELECTRICITY CORPORATION............................................................2 5. PR O JEC T O BJEC T IVE......................................................................................... 2 6 . P R O JE C T L IF E S PA N ...............................................................................................4 7. B O A R D O F D IREC T O R S ..........................................................................................4 8. Z EC O M A N A G M EN T T EA M ...................................................................................4 9. STATEMENT OF MANAGEMENT'S RESPONSIBILITIES....................................6 10. FIN A N C IA L ST A T EMEN ' ........................................................................................ 7 10.1 STATEMENT OF FINANCIAL PERFORMANCE FOR THE PERIOD ENDED JU N E 2 0 2 3 ...................................................................................................................7 10.2 STATEMENT OF FINANCIAL POSITION FOR THE PERIOD ENDED JUNE 2 0 2 3 ................................ .. ................ ........................ I.-........................... 8 10.3 STATEM ENT OF CASH FLOW ...............O9.......................................-- 10.4 STATEMENT OF CHANGE IN NET ASSET/EQUITY ...................................10 10.5 STATEMENT OF BUDGET VS ACTUAL FOR THE PERIOD ENDED JUNE 2 0 2 2 ........................................................................................................................l NOTES TO THE FINANCIAL STATEMENT FOR A PERIOD ENDING 301" JUNE 2 0 2 3 ............................................................................ ............ . .................................... 13 1. R E PO R T IN G EN T IT Y ............................................................................................ 13 2. B A SISO F PREPA R A T IO N .............................. ............................................... 13 3. SIGNIFICANT ACCOUNTING POLICIES ............................................................. 13 4. FUNCTIONAL AND PRESENTATION CURRENCY ............................................14 5 . G R A N T IN C O M E .................................................................................................... 14 /ANZiBAR ELECTRICITY CORPORATION (ZECO) /ANZIBAR ENRGY SI:CT ORI RANSFORMATION AND ACCESS IN ZANZBAR CORPORATION PROJECT RtNDEID BY WORI) BANK REPORT OF MANAGEMENT 1. INCORPORATION, PRINCIPAL ACTIVITIES AND BACKGROUND Zanzibar Electricity Corporation (ZECO) was incorporated in Zanzibar under Act No 3 of 2006. ZECO is wholly owned by the Revolutionary Government of Zanzibar and is under the Ministry of Water, Energy and Minerals. ZECO generates. purchases. transmit, distribute, supplies and sells electricity to both Uinguja and Pemba Islands. ZECO imports power from national grid of mainland Tanzania though submarine cables. Unguja has two sub marine cables, which starts from Ras Kiromoni (Tanzania Mainland) and Ras Fumba (Zanzibar) with total capacity of 132 Kilovolt. 45Megawatts (MW) and 132 Kilovolt, I00MW that was installed 1980 and 2013 respectively. Pemba has one submarine cable with capacity of 33 Kilovolt, 20MW which starts from Mnyanjani in Tanga (Tanzania Mainland) to Ras MkumbuU in Pemba. ZECO has standby generators with capacity of 25MW in Unguja. 2. ZECO MISSION To supply electricity so as to meet the national demand in an effective, safe, reliable and sustainable manner. 3. ZECO VISION To be efficient and commercially sound electric utility supporting the development of the economy in Zanzibar. 4. ZANZIBAR ENERGY SECTOR TRANSFORMATION AND ACCESS PROJECT IN ZANZIBAR ELECTRICITY CORPORATION. The World Bank project is the first support in the energy sector in the Revolutionary Government of Zanzibar (RGoZ). The project adopts a comprehensive value chain approach to support the RGoZ in achieving its stated goals of developing renewable energy resources to improve reliability and security of electricity supply and to scale up access to affordable and reliable electricity service. The project is intended to support the transformation of the Zanzibar power sector by accelerating the efforts towards universal electricity access, and the transition of ZECO from a distribution utility to one managing a modern system with integrated variable renewable energy and Battery Energy Storage System (BESS), and a grid wide Supervisory Control and Data Acquisition (SCADA) system. 5. PROJECT OBJECTIVE The objectives of the Project are to expand access to reliable and efficient electricity services and to scale up renewable energy generation in Zanzibar. Project Components The project is structured in three components: (i) Renewable Energy and Energy Storage infrastructure development, ZANZIBAR FITCTRICITY CORPORA[ION (ZEC0) ZANZIBAR ENERGY SECTFOR 'TRANSIORMAlON AN!) ACCESS IN /AN/IIIAR CORPORATION PROJECIT FUNDED BY WORlD BANK (ii) Grid Modernization and access scale up, and (iii) Sector institutional strengthening and project implementation support. Detailed description of the component is provided below: - a) Component 1. Renewable Energy and Storage Infrastructure Development This component will support the RGoZ to develop the island's first large grid-scale renewable energy power generation plant and battery energy storage infrastructure. The publicly owned solar PV plant will help meet the growing electricity demand in the near term, while paving the way for future scale-tIp of renewable energy power generation, this component will be implemented by ZECO and comprises of the following sub-components: - i) Sub-component . 1. Battery Energy Storage System (BESS) for Grid. This sub- component will support the design, supply, installation, and initial operation of a centralized publicly owned BESS. ii) Sub-component 1.2. Solar Photovoltaic (PV) Plant. This sub-component will finance the design, construction, and initial operation of a solar PV power generation plant. iii) Sub-component 1.3. Technical Assistance for Renewable Energy. This sub- component will support (a) the necessary technical and supervision consultancies for the BESS and solar PV plant, and (b) technical assistance for the development of future renewable energy projects in Zanzibar, including through private sector participation. b) Component 2. Grid modernization and access scale-up This component is aimed at addressing key constraints in the electricity grid in Unguja and will finance investments that are in line with the latest ZECO Electrification Master Plan (EMP). Below are sub-components of components 2: i) Sub-component 2.1. 132kV Backbone Transmission Infrastructure. This sub- component will finance the construction of the first 132kV High Voltage (HV) transmission backbone infrastructure, including 100km of transmission line which start double circuit from Unguia town (Welezo) to central of Unguja (Ubago) and then one line going to North of Unguja (Matemwe) and another line to south (Makunduchi), at the end of each line (Matemwe and Makunduchi) will construct substations. The main function of the line is to evacuate power from the proposed solar PV power plant financed under component 1, and to enable future integration of VRE power generation to meet the growing power demand in the island. i) Sub-component 2.2. Distribution Network Strengthening and Access Scale-up. This sub-component will finance the extension and strengthening of the electricity distribution network, including metering systems., and expand household electricity access. iii) Sub-component 2.3. Installation of a SCADA System. This sub-component will finance the design, supply, and installation of the SCADA and Energy Management System (EMS), and a control center to enhance ZECO's oversight and control of network operations. 3 ZANZIBAR I'LECTRICITY CORPORATION (ZECO) ZAN/I BAR ENIIRGY SECTOR TRANSFORMATION AND ACCESS IN ZANZIBAR CORPORATION PROJLCT FUNDID BY WORLD BANK c) Component 3. Sector Institutional Strengthening and Project Implementation Support This component will support project implementation, necessary capacity strengthening of sector institutions, including ZECO, MoWEM, and ZURA, design and implementation of key planning, strategy and regulatory frameworks, including those on energy efficiency and gender. i) Sub-component 3. 1. Technical Assistance and Project Implementation Support to ZECO This sub-component will support technical assistance to ZECO to strengthen institutional, operational and project management capacity. ii) Sub-component 3.2. Technical Assistance and Project Implementation Support This sub-component will support sector institutional capacity strengthening and the development of necessary planning and strategic frameworks for the Zanzibar power. iii) Sub-component 3.3. Energy Efficiency Improvements. This sub-component will support the design of priority interventions and strategies for the efficient use of electricity in Zanzibar and will also inform their subsequent implementation. iv) Sub-component 3.4. Closing the Gender Gap in the Energy Sector. This sub- component will support the design and implementation of interventions to close the gender gap in employment opportunities and career advancement in the energy sector. 6. PROJECT LIFE SPAN The life span for the project is six years in this particular year the project is enable to: - * To finalize the technical and financial evaluation for the main three activities (Consulting Service for the 132 Backbone Infrastructure, SCADA and Solar PV and BESS) * Finalizing and acceptance of the Environmental and Social Impact Assessments. 7. BOARD OF DIRECTORS The Directors. all Tanzanians, who served ZECO during the year are as follows. S/N Name of Board Member Title Date of Appointement 1 Retired MJ.GEN. S.S.Othaman Chairperson 01/12/2021 2 Mr. Aziz Said Ali Member 15/02/2022 3 Mr. Abdulla Abdi Mohammed Member 15/02/2022 4 Mr. Hafidh Suleiman Makame Member 15/02/202 2 5 Mr. Mshenga Haidar Mshenga Membere 1202/2022 8. ZECO MANAGMENT TEAM Zanzibar Electricity Corporation team is responsible for all aspects of project management for component I (Renewable Energy and Energy Storage Infrastructure)., component 2 (Grid Modernization Access scale-up) and subcomponent 3.1 (Sector Strengthening and Project Implementation Support). including engineering aspects, 4 ZANZIBAR ELECTRICITY CORPORATION (ZECO) ZAN/IBAR ENTRGY SECTOR TRANSFORMATION AND ACCESS IN ZANZIBAR CORPORAT ION PROJECT FUNDED B3Y WORLD BANK project procurement, financial management and Accounting, monitoring and evaluation, Environmental Safeguard, Social Safeguards Occupational Health and Safety to ensure achievement of the project development objectives. Management team that managed the project for the period ended 30 June 2023 is as follows: S/N POSITION I Mshenga lidar Mshenga Ag. General Manager 2 Thabit Salum Khamis Commercial Manager 3 Maulid Shiraz Ilassan Planning and Research Manager 4 Kauthar Jumaane Karama Finance Manager 5 Nassor A. Haasan I lead of Procurement 6 Moh'd Juma Othman Pemba Branch Manager 7 Kassim AbdUlla Ali Chief Internal Auditor 8 Farid Mabrouk Juma Human Resource Manager 9 Yakoub Ahmed Mohamed Operation Manger 10 Faina Idarous Faina Ag. Public Relation 12 liaji Shelia Wazir IT Manager 13 Mohamed Idrissa [lussein Legal Officer 14 Aishe Said Yabya Project Accountant To make its efficiency and effective of the project implementation, the project employed 5 individual consultants to support implementation of the ZESTA project as follows: * Assistance Project Manager - Three years contract * Procurement specialist - Three years contract * Social and Safeguard Specialist - Three years contract * Occupational Health and Safety Specialist - Three years contract * Gender Specialist - Two years contract 5 ZANZIBAR ELECTRICITY CORPORATION (1ECO) ZANZIBAR ENERGY SECTOR TRANSFORMATION AND ACCESS IN ZANZIBAR CORPORATION PROJECT FUNDI'D BY WORLD 13ANK 9. STATEMENT OF MANAGEMENT'S RESPONSIBILITIES The management of Zanzibar Electricity Corporation is responsible for the preparation of the financial statements of the project titled "Zanzibar Energy Sector Transformation and Access in Zanzibar Electricity Corporation", which comprises the statement of Financial Position/ Balance sheet as at 30 June 2023, and the Statement of Financial Performance /Cash Receipts and payment for the period ended 30 June 2023. Cash Flow Statement for the Period ending June 2023, In supporting the above statements, notes to the financial statements which include a summary of significant accounting policies and other explanatory notes, in accordance with the accounting policies set out in note 3 to the financial statements. The management is also responsible for such internal control as the management determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error. and for maintaining adequate accounting records and an effective system of risk management. Procurement of goods. works and consultancy and non-consultancy service to the extent that they are reflected in these financial statements have been done in accordance with the Public Procurement Act of 2016 and its Regulations of Zanzibar. In our opinion, these financial statements present fairly all-material respect of the operations of the Project for the Period ended 30th June, 2023. Khamis Ahmad Fakih Acting General Manager Zanzibar Electricity Corporation Zanzibar 6 ZANZIBAR ELECTRICITY CORPORATION (ZECO) ZANZIBAR ENERGY SECTOR TRANSFORMATION AND ACCESS IN ZANZIBAR CORPORATION PROJECT NIFUNDlD BY WORLD BANK Zanzibar Electricity Corporation in the presences of its project of ZESTA has responsible to prepare Financial statements each year as required by law. ZESTA is responsible to prepare the following financial statements: i) Statement of Financial Performance /Cash Receipts and payment for the period ended 30 June 2023. ii) The statements of Financial Position/ Balance sheet as at 30 June 2023. iii) Cash Flow Statement for the Period ending June 2023, 10. FINANCIAL STATEMENT 10.1 STATEMENT OF FINANCIAL PERFORMANCE FOR THE PERIOD ENDED JUNE 2023 STATEMENT OF FINANCIAL PERFORMANCE For the period ended 30 th June 2023 DESCRIPRION NOTES 2023 ( USD) 2022 (USD) Receipt Donors Fund (Receipt) 6 10,000,000.00 1,337,100,00 Total Receipt 10,000,000.00 1,337,100.00 Payment Operating Expenses 7 221,924.06 18,596.00 Finance Expenses 8 1,083.61 839 Hired Consultancy 9 473,088.32 72,000.00 Foreign Exchange Loss 0.00 2,766.30 Depreciation of the Asset 10 49,242.73 0.00 Total Expenditure 745,338.72 94,201.30 Surplus or Deficit during the Year 9,254,661.28 1,242,898.70 Notes I to 14 Form part of these Financial Statements The financial statements on pages 7 to 9 were approved and authorized for issue by Managemen 2023 nd signed by: Maulid Shiraz Hassan Aishe Said Yahya Project Manager Project Accountant Zanzibar Electricity Corporation Zanzibar Electricity Corporation ZESTA Project /ESTA Project 7 ZANZIBAR LECTRICI Y CORPORATION (/1 CO) ZANZIBAR LNI:RGY SECTOR TRANSFORIA IION AND ACCI SS IN ZANZIBAR CORPORAT ION PROJECT 1U INDIED BY WORIJ) BANK 10.2 STATEMENT OF FINANCIAL POSITION FOR THE PERIOD ENDED JUNE 2023 STATEMENT OF FINANCIAL POSITION AS AT 30th June, 2023 DETAILS Notes 2023 (USD) 2022 (USD) ASSETS Non Current Assets 11 Property, plant and equipment 125,938.27 0 Intangible asset 0 0 Total Non Curent Assets 125,938.27 0 Current Assets Cash and Cash Equivalents 12 10,407,622.17 1,263,866.34 Total Current Assets 10,407,622.17 1,263,866.34 TOTAL ASSETS 10,533,560.44 1,263,866.34 LIABILITY Non - Curent Liability 0 Total Non - Curent Liability 0 Current Liabilities Hired Consultancy 13 36,000.00 Total Current Liabilities 36,000.00 - TOTAL LIABILITIES 36,000.00 20,967.64 TOTAL NET ASSETS 10,497,560.00 1,242,898.70 NET ASSETS/EQUITY Accumulated Surplus 10,497,560.00 1,242,898.70 TOTAL NET ASSET/EQUITY 10,497,560.00 1,242,898.70 Notes I to 14 Form part of these Financial Statements The financial statements on pages 7 to 9 were approved and authorized for issue by Management on --/-/ 2023 and signed by: Maulid Shiraz Hassan Aishe Said Yahya Project Manager Project Accountant Zanzibar Electricity Corporation Zanzibar Electricity Corporation ZESTA Project ZESTA Project 8 ZANZIBAR ElEICTRICFlY CORPORATION (ZlCO) ZANZIBAR ENERGY SE(T FOR TRANSIORMAIION AND ACCESS IN ZANZIBAR CORPORATION PROJIIC RIlNDED 13Y WORDI) BANK 10.3 STATEMENT OF CASH FLOW Statement of cash flow for the Period Ending 30th June,2023 STATEMENT OF CASH FLOW For the Period Ending 30th June, 2023 Notes 2023 (USD) 2022 (USD) CASHF FLOWS FROM OPERATING ACTIVITIES Receipts Revenue From World Bank 6 10,000,000.00 1,337,100.00 Total Cash Receipt 10,000,000.00 1,337,100,00 Payments Individual Consultancy 437,088.00 51,032.00 Operating Expenses 7 221,924.06 19435 Bank Charges 8 1,084.00 0 Outstanding Expenses 20,967.64 0.00 Total Cash Payments 681,063.70 70,467.00 Net Cash Flow from Operating Activities 9,318,936.30 1,266,633.00 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of Property Plant and Equipment 12 175,181.00 0 Net Cash Flow From Investing Activities 9,143,755.30 1,266,633.00 CASH FLOW FROM FINANCING ACTIVITIES Cash Pow From Financing Activities 0 0 Net Increase/(Decrease) in Cash and Cash Equivalent 9,143,755.30 1,266,633.00 Add:Cash and Cash Equivalent at the beginning of the Period 1,263,866.34 Total cash and Cash Equivalent at the end of the Reporting Period 10,407,622.00 1,263,866.34 Notes I to 14 Form part of these Financial Statements. The financial statements on pages 7 to 9 were approved and authorized for issue by Management on--/-/ 2023 and signed by: Maulid Shiraz Hassan Aishe Said Yahya Project Manager Project Accountant Zanzibar Electricity Corporation Zanzibar Electricity Corporation ZESTA Project ZESTA Project 9 ZANZIB1AR EL ,ECTFRICI T Y CORPORA ION (ZEIC O) ZANZIBAR ENIERGY SE(CTOR TRANSFORMA ION A) ACCESS IN ZANZIBAR CORPORAT ON PRO.JFCT 1'U:(NIDED1 BY WORLD BANK 10.5 STATEMENT OF BUDGET VS ACTUAL FOR THE PERIOD ENDED JUNE 2022 ACTIVITY NAME ACTUAL BUDGET VARIANCE % of actual to budgeted CONSULTING SERVICES Safeguard Support Consultancy 20,000 - _______ _______ (200,000.00) 0 Consultancy for the Birds and Bats Study 160,000 111088 (48,911.68) 69.43% Consultancy services for supervision and monitoring of the SCADA 200,000 (200,000.00) 0 Csultancyservicesforsuperv[siorandmonitonngofthe132ky backbone transmission and substation infrastructure works 12,0M (220,000.00) 0 Consultancy services for design, procurement support and supervision of the solar PV generation plant and battery energy system (BESS) (240,000.00) 0 Consultancy services for distribution network investments and access scale-up activities 70,0000 Sub Total 1: Consulting Services 1090000 111,088 (978,911.68) 10.19% SALARIES FOR INDIVIDUAL CONSULTANTS EXCL. 20% ZSSF AND 25% GRATUITY Asst. Project Manager 96.000 88,000 __________________________________ _______ _______ 8,000.00 91.57% Procurement Specialist 72,000 66,000 6,000 00 91.67% Social Specialist 72,000 66,000 6,000.00 91.67% OHS Expert 72,000 66,000 6,000.00 91.67% Gender5Specialist 57,600 40,000 17,600.00 69.44% Sub Total 2: Salaries for Individual Consultants 369,600 326,000 43,600.00 88.20% TRAINING AND CAPACITY BUILDING 5on-term training courses and capacity bul ding 266,000 175,597 (90,40294) 64.52% Sub Total 3: Training and Capacity Building 266,000 175,597 90,403 64.52% OPERATING COSTS Motor vehice - 4 (4 double cabin pickup) 240,000 - 240,000 0 Transport and motorvehicle operation cost 33,600 1,188 32,412 3,53% Office Space forproject staff 12,000 12,000 0 Video ConfErence facilities 100,000 55,203 44,797 56.10% Furnitures 100,000 68,632 31,368 67.89% IC1 Equipment 61,200 51,346 9,854 83% Communication cost 16,100 13,217 2,883 82% Office refreshment 15,000 7,928 7,072 52.85% Sanitaries 6,000 1,469 4,531 24.48% Greviances Redressing Mechan sm (GRM) 15,000 9,990 5,010 66.60% Office stationery 6,000 1,693 4,307 28.22% Sub Total 4: Operating Costs 604,900 210,665 394,235 34.7 % GRANDTOTAL 2,330,500 823,351 1,507,149 35.14% ZANZIBAR l,lCTRICIFY CORPORATION (7ECO) ZANZIBAR ENERGY SECTOR TRANSFORMATION AND ACCESS IN ZANZIBAR CORPORATION PROJECTUNDDI) BY WORLD BANK 10.4STATEMENT OF CHANGE IN NET ASSET/EQUITY For the Period Ending 30t1i June,2023 (In USD) Details Taxpayers F Accumulated Surplus/ Revaluation Res Total Balance at 30 June, 2022 0 1,242,898.70 0 1,242,898.70 Changes in net equity for 2023 Equity contribution from government 0 0 Valuation gains and losses 0 0 Total surplus/(deficit) for the period 9,305,475.88 9,305,475.88 Balance at 30 June, 2023 0 10,548,374.58 0 10,548,374.58 STATEMENT OF CHANGE IN NET ASSET/EQUITY For the Period Ending 301h June,2022 (In USD) Details Taxpayers' F Accumulated Surplus/ Revaluation Res Total Baance at 30 June, 2021 0 0 0 0 Changes in net equity for 2022 Equity contribution from government 0 0 Valuation gains and losses 0 0 Total surplus/(deficit) for the period 1,242,898.70 1,242,898.70 Balance at 30 June, 2022 0 1,242,898.70 0 1,242,898.70 Notes I to 14 Form part of these Financial Statements MaLlid Shiraz Hassan Aishe Said Yahya Project Manager Project Accountant Zanzibar Electricity Corporation Zanzibar Electricity Corporation ZESTA Project ZESTA Project 10 ZANZIBAR JLLCTRICIY CORPORATION (ZECO) /ANZIBAR ENERGY SECTOR TRANSFORMAlION AND ACCESS IN ZANZiBAR CORPORAI ON PROJECT FUNDED BY WORLD BANK Variance Explanation The Zanzibar Energy Sector Transformation and Access Project spent $ 823.35 1.00 equal to 35.32% of the budgeted amount of $ 2,330,500 due to the following three reasons: - * Delay the process on the five (5) consulting service procurement. * Delay on deliver of the Office Motor Vehicles. * Social tr g was ot condLIcted because contractors were not on ground. Maulid Shiraz Hassan Aishe Said Yahya Project Manager Project Accountant Zanzibar Electricity Corporation Zanzibar Electricity Corporation ZESTA Project ZESTA Projec 12 ZANZIBAR 1:LECTRICITIY CORPORATION (ZECO) ZANZIBAR ENERGY SECTOR TRANSFORMATION AND ACCESS IN ZANZIBAR CORPORATION PROJECT FUNDEID BY WORLD BANK NOTES TO THE FINANCIAL STATEMENT FOR A PERIOD ENDING 30'"JUNE 2023 1. REPORTING ENTITY Zanzibar Electricity Corporation (ZECO) (the "Conpany") is a Company domiciled in Zanzibar incorporated under Company's Act No 3 of 2006. The "Energy Sector Transformation Access in Zanzibar Electricity Corporation is a Project finded by the World Bank (WB) through IDA CREDI TFUNDS and TRUST Fund. 2. BASIS OF PREPARATION The financial statements have been prepared in accordance with the requirement of Word Bank, emphasizing IPSAS accrual basis of accounting and applying the accounting policies explained under note 3 below. 3. SIGNIFICANT ACCOUNTING POLICIES a) Grant income Grant income comprises of cash receipts from the Word Bank (WB). and deposited into the Project's USD bank account and is accounted for in the period in which it is received. b) Expenditures An expenditure in respect of goods and service is recognised in the statement of receipts and expenditures at the time when they incurred. c) Fixed assets and inventory Expenditure of capital nature such as acquisition of fixed assets solely used in the running/operation of the project are capitalized and accounted for in accordance with IPSAS 17, while that capital expenditure used in constructions of the project activities are expensed in the period of acquisition. d) Foreign currency translations The financial statements have been prepared in United States Dollar (USD). Grants arc received in the United States Dollar (USD) account and expenditure transactions incurred in USD and the Tanzanian Shilling (TZS). TZS transactions translated into the USD at prevailing exchange rate. Fxchange differences arising on translation are recognized in the Statement of Receipts and Expenditures. e) Cash and cash equivalents Cash and cash equivalents comprise cash in hand and deposits held at banks with maturities of less than three nonths. 13 ZANZIBAR ELFCTRICITY CORPORATION (ZECO) ZANZIBAR EN:RGY SECTOR TRANSFORMATION AND ACCESS IN ZANZIBAR CORPORATION PROJEC F 'UN[DED BY WORLD BANK f) Depreciation of Asset According to Organization policy depreciation of the asset are charged on full year straight line basis 4. FUNCTIONAL AND PRESENTATION CURRENCY The Financial statements are presented in United States Dollars (USD), which is the Project's functional currency. 5. GRANT INCOME During the period ended 30 June 2023., the Project receive grants from the World Bank amounting to USD 10,000,000.00 NOTE NO.6 Grant Income Donors Fund (Receipt) Received from WB 10,000,000 Total 10,000,000 NOTE NO. 7 Operating Expenses Operating Expenses WB Facilitation Costs 10,842 WB Grievance Redredd Mechanism 9,990 WB Office Refreshment 7,928 WB Office Stationeris 1,693 WB Operation & Maintance of Motor Vehicle 1,188 WB Sanitaries 1,469 WB Short Term Trainings 175,597 WB- Communication 13,217 Total 221,924 14 ZANZIBAR LLECTRICITY CORPORATION (ZCO) ZANZIBAR LNERGY SE;CTOR IRANSFORMATION AND ACCISS IN ZAN/BAR CORPORAL ION a PROEXCT FUNDED113Y \WORLD BANK NOTE 8 Financial Expenses WB Bank Operation Charges 1,084 Total 1,084 NOTE 9 Salaries for Hired Consultancies WB Assistant Project Manager 97,000 WB Gender Specialist 46,000 WB Consultancy for the Birds and Bats Study 111,088 WB Occupational Health & Safety 73,000 WB Procurement Specialist 73,000 WB Social Specialist 73,000 Total 473,088 NOTE 10 Depreciation of Assets DEPRECIATION ASSET COST DEPRECIATION NETBOOKVALUE WB FURNITURES 68,632 13,726.40 54,905.60 WB Video Conference Faclities 55,203 18,401.00 36,802.00 WB ICT Equipment 51,346 17,115.33 34,230.67 175,181.00 49,242.73 125,938.27 NOTE 11 NON CURRENT ASSET WB FURNITURES 68,632 WB Video Conference Facilities 55,203 WB ICT Equipment 51,346 Total 175,181 NOTE 12 Bank and Cash balances USD DESIGNATED A/C 125,275.00 OPERATIN ACCOUNT 10,282,347 Total 10,407,622 15 ZANZIBAR ELECTRICITY CORPORATION (ZECO) ZANZIBAR ENERGY SECTOR TRANSFORMATION AND ACCESS IN ZANZIBAR CORPORA I ION PROJECT TUNDEI BY WORLD BANK NOTE 13 Payable WB Assistant Project Manager 9,000 WB Gender Specialist 6,000 WB Occupational Health & Safety 7,000 WB Procurement Specialist 7,000 WB Social Specialist 7,000 36,000 NOTE: 14 Comparative Figures Previous year's figures have been entered in order to make them comparable with those of the current year. NB : The Special drawing right (SDR) amount at the time of signing the contract was 82,600,000 equivalent to USD I 17 million for the exchange rate of 0.705982 and 30h June 2023 was 0.756 16