THE WORLD BANK GROWTH AND EMPLOYMENT PROJECT (FEDERAL MINISTRY OF INDUSTRY, TRADE AND INVESTMENT) FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 5 T DECEMBER, 2017 AUDITED BY OFFICE OF THE AUDITOR-GENERAL FOR THE FEDERATION Plot 273, Central Business District, Abuja FINANCIAL STATEMENT FOR THE PERIOD ENDED 31 5T DECEMBER, 2017 Table of Contents Contents Page Project Information/Profile 3 Statement of Financial Position 5 Statement of Financial Performance 6 Statement of Cash Flow 7 Statement of Change In Financial Activities 8 Notes to the Account 9-13 I P ;:i i;, P PROJECT INFORMATION/PROFILE FOR THE YEAR ENDED 2017 Growth and Employment (GEM) Project is a Federal Government of Nigeria Project supported by the World Bank through IDA credit of $160m The Project is domicile in the Federal Ministry of Industry, Trade and Investment, and will run for a period of five (5) years The project objective is "To increase firm growth and employment in participating firm in Nigeria" The focus of the project is on two main sector of the economy, * Service ICT, Entertainment, Tourism and Hospitality construction * manufacturing: Light manufacturing( Agro-processing and other manufacturing Member of national steering committee National competitive council of Nigeria Federal ministry of finance Federal Ministry of Agriculture Federal Ministry of Communication Technology Federal Ministry of Information and Culture Nigeria economic summit Group Principal Officers of the Project as at 31 st December 2017 Ugo Ikemba Project co-ordinator Mr. Ndah Abu Ali Assistant project co-ordinator Mrs Aigba Ilesanmi Project accountant Mrs. Uche Aneke Project Auditor Mr Agonsi Ikechukwu Procurement officer IPrlPP All the principal officers held office throughout the year except Mr. Ugo Ikemba who was appointed in February 15 th, 2017. He took over from Mr. Y.S.Labaran who retired from the service of the Federal Government of Nigeria and by implication that of the Project. He was also appointed as the interim for a period of three (3) months covering January to March 2017. Project Head Office and Implementing Agency: Growth and Employment (GEM) Project, Federal Ministry of Industry, Trade and Investment Old Federal Secretariat, Area 1, Abuja Project Banker: Central Bank of Nigeria Central Business District, P. M. B 0187, Abuja. Project Financier: The World Bank Project Auditor: Office of the auditor-General for the Federation Plot 273, Samuel Ademulegun Street, Central Business District, P. M. B 28, Garki Abuja Web site:www.oaugf. ng e-mail: info@oaugf.ng OFFICE OF THE AUDITOR-GENERAL FOR THE FEDERATION -------DEPARTMENT HEADQUARTERS: LAGOS OFFICE : Audit House, 5, Sir Mobolaji Bank Anthony Street, Plot 273, Samuel Ademulegun Street, P.M.B. 12503 Central Business District, Lagos , Nigeria P.M.8. 128,Garki-Abuja, Nigeria Tel:+234(1) 2632335 Date ......................... . REPORT OF THE INDEPENDENT AUDIT ON THE FINANCIAL STATEMENTS OF THE GROWTH AND EMPLOYMENT PROJECT (WORLD BANK ASSISTED) We have audited the Financial Statements of the Growth and Employment Project (World Bank Assisted) for the year ended 31 st December, 2017 as set out on pages 5 to 8 which have been prepared on the basis of the Accounting Policies set out in Note 1 on page 9. MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS The Management of the Project is responsible for the preparation and fair presentation of the Financial Statements in accordance with the International Public Sector Accounting Standards (IPSAS) accrual and also for instituting such internal controls as the Management determines it necessary to enable the Financial Statements that are free from material misstatement. AUDITORS' RESPONSIBILITY Our responsibility is to express an independent opinion on the Financial Statements based on our audit. We conducted the audit of Growth and Employment Project in accordance with the International Standards of Supreme audit Institutions (ISSAls) as promulgated by the International Organisation of Supreme Audit Institutions (INTOSAI). These standards require that we comply with ethical requirement, plan and perform the audit so as to obtain reasonable assurance about whether the Financial Statements were free from material misstatements, whether caused by fraud or other irregularity or error. The procedures selected for obtaining assurance and evidence to support audit opinion depends on the auditors' judgment, including assessment of the risk of material misstatement of the Financial Statements. In making those risk assessment, we considered the Internal Control relevant to Growth and Employment Project preparation and fair presentation of the Financial Statements. We also evaluated the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by Management, as well as the overall presentation of the Financial Statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. OPINION In our opinion, the Financial Statements, which are in agreement with the books of account, present a true and fair view of the financial position of Growth and Employment Project (World Bank Assisted) as at 31 st December, 2017, and of its performance of its operations, changes in net assets, its cash flows for the year ended 31 st December, 2017 and have been prepared in accordance with the International Public Sector Accounting Standards (IPSAS) accrual, accounting principles generally *~..s--'> accepted in Nigeria and in the manner required by the World Bank. I. A. ADELEYE For: Auditor-General for the Federation 28th t June, 2018 STATEMENT OF FINANCIAL POSITION AS AT 31ST DECEMBER 2017 GROWTH AND EMPLOYMENT PROJECT FEDERAL MINISTRY OF INDUSTRY TRADE AND INVESTMENT STATEMENT OF FINANCIAL POSITION AS AT 31st DECEMBER 2017 2017 2016 EMPLOYMENT OF FUNDS CURRENT ASSET Cash & Cash equivelent 11,680,569,217.02 3,148,857,374.28 Cash Advance Inventory 3 42,965,991.00 11,723,535,208.02 3,148,857,374.28 Non-Current Asset Development Capital Expenditure 4 2,890,797,338.95 2,126,043,081.89 Development Operating Expenditure 5 161,162,642.38 218,348,462.13 Office Furniture and Equipments 13 4,981,343.00 90,877,859.03 3,056,941,324.33 2,435,269,403.05 Total Asset 14,780,476,532.35 5,584,126,777.33 LIABILITIES Current liabilities Payables 56,367,086.89 Short Term borrowings Short Term provisions Employee Benefit Total Current Liabilities 56,367,086.89 Non Current Liabilities Long term borowings Long term provisions Employee benefits Total Non Current liabilities Total Liabilities 56,367,086.89 Net Assets 14,724,109,454,46 FINANCED BY IDA Credit 14,724,109,454.46 5,584,126,777.33 14,724,109,454.46 5,584,126,777.33 --· ________ ------·-----Ndah Abu Ali (Project Coordinator) -------- -E.:::.!+----Aigba Ilesanmi (Project Accountant) SIPag:p GROWfH AND EMPLOYMENT PROJECT FEDERAL MINISTRY OF INDUSTRY TRADE AND INVESTMENT STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31st DECEMBER 2017 2017 2016 INCOME IDA Credit 4 14,724,109,445.55 6,998,905,358.83 Interest 13,954,622.81 14,738,064,068.36 6,998,905,358.83 EXPENDITURE Consultancy 7 1,147,908,293.24 896,082,318.42 Workshop 8 74,695,321.61 114,479,632.44 Training 9 77,294,650.85 35,103,272.00 Operating Cost 161,162,642.38 218,348,462.13 Depreciation 14 553,487.00 1,461,614,395.08 2,435,269,403.05 Excess Income Over Expenditure 13,276,449,173.28 4,563,635,955.78 f;IP::ioP GROWfH AND EMPLOYMENT PROJECT FEDERAL MINISTRY OF INDUSTRY TRADE AND INVESTMENT STATEMENT OF CASH FLOW FOR THE YEAR ENDED 31ST DECEMBER, 2017 2017 2016 Cash Flow from Operating Activities Excess of income over Expenditure 13,276,449,673.28 4,563,635,955.78 Depreciation 553,487.00 Net Cash Flow From Operating Activities 13,277,003,160.28 3,148,857,374.28 Cash Flow From Investment Activities Purchase of Asset (5,534,870.00) other Expenditure Net Cash Flow From Investment Activities 13,271,468,290.28 Cash Flow From Financing Activities Grants 1,590,899,073.25 Net Cash Flow From Financing Activities 11,680,569,217.03 Cash & Cash Equivalent for the Year 8,531,711,842.75 3,148,857,374.28 Cash & Cash Equivalent B/F 3,148,857,374.28 Cash & Cash Equivalent C/F 11,680,569,217.02 3,148,857,374.28 7 I P r1 g P GROWfH AND EMPLOYMENT PROJECT FEDERAL MINISTRY OF INDUSTRY TRADE AND INVESTMENT STATEMENT OF CHANGE IN FINANACIAL ACTIVITIES AS AT 31ST DECEMBER 2017 Accumulated Reserv Exchange Surplusf(Defidt Capital Grant e Difference s) Total N'000 N'000 N'000 N' 000 N'000 Balance at 1st January, 2017 7,023,177,749.49 7,023,177,749.49 Additional Grant/Fund 7,714,886,318.87 7,714,886,318.87 Surplus on Revaluation of PPE Exchange Rate Gain Surplus for the period from Operating activities Balance at 31 December 2016 14,724,109,445.55 14,724,109,445.55 GROWTH AND EMPLOYMENT (GEM) PROJECT FEDERAL MINISTRY OF INDUSTRY, TRADE AND INVESTMENT NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST DECEMBER 2017 1. STATEMENT OF COMPLIANCE WITH IPSAS The preparation and contents of these Financial Statements are in accordance with the requirements of the International Public Sector Accounting Standards (IPSAS) accrual basis, except that statement of Budget and Actual of the Coordinating Unit was excluded because it has not been made publicly available as required by IPSAS 24. 2. ACCOUNTING POLICIES The following is the summary of the significant Accounting policies adopted in the preparation of the Project's financial statements. a. BASIS OF PREPARATION The financial statements have been prepared under the historical cost convention and in accordance with the accrual basis of international public sector accounting standards (IPSAS) FUNDS All contributions by the Financier were only recognized when received and capitalized as IDA credit/ fund. This fund is subsequently increased or reduced by surplus or deficit from the statement of financial performance. b. RECOGNITION OF REVENUE & EXPENDITURE Revenue and expenditure were recognized when they become receivable or incurred. c. NON-CURRENT ASSETS a. Non-current assets acquired during the year (if any) were stated at cost b. Depreciation: No depreciation was provided on the Non-current Assets c. In the opinion of the principal officers, non-current assets will be transferred to the implementing Agency - Federal Ministry of Industry, Trade and Investment at the end of the Project's life, at cost. d. REPORTING/FOREIGN CURRENCY The financial statements were prepared in Nigerian Naira version. Transactions in foreign currency were translated at the average rate for the period, while all foreign accounts balances were translated at the rate of exchange at the reporting date. 3. INVENTORY: Inventory is valued at accrual of cost and net realizable value. • Stationeries 40,060,230 • Giant Stapler 1,235,661 • Office Pins 1,670,100 42,965,991 4. REVENUE These are IDA Credit denominated in USD ($) and are translated into Naira at the ruling exchange rate for the period January to December, 2017. No interest was recorded in respect of the project Fund Account (Naira) maintained with the Central Bank of Nigeria. The Revenue is made up of: Cumulative IDA as at 01/01/17 7,023,177,749.48 IDA Credit for the year: 7,700,931,696.07 Total 14,724,109,445.55 1nlD1rtrt,. 2017 2016 DEVELOPMENT CAPITAL 5. EXPENDITURE Consultancy 1,147,908,293.24 896,082,318.42 Workshop 74,695,321.61 114,479,632.44 Training 77,294,650.85 35,103,272.00 Grant 1, 590,899,073.25 989,500,000.00 Study Tour 90,877,859.03 GTZ Office Equipment ICT Equipment Office Furniture 2,890,797,338.95 2,126,043,081.89 DEVELOPMENT OPERATING 6. COST Project Management Operating Expenses office rehabilitation Books/ Periodicals/Subscription 1,556,409.00 1,090,472.95 Equipment maintenance 2,393,700 4,270,000.00 PMUCost 1,329,200.00 21,000.00 Telephone Internet Service 1,040,775.00 1,600,000.00 Vehicle Insurance 3,088,858.40 5,315,570.90 Media Expenses 934,225.00 70,846,244.98 Printing and photocopy 1,037,900.00 26,843,375.00 Generator Fuel and Lubricants 8,787,500.00 3,980,550.00 Technical Support 2,025,000.00 Office Stationary 2,602,072.02 4,855,422.20 Computer Consumable 2,312,200.00 Entertainment Publicity and Advertisement 12,728,724.97 Audit Charges 300,000.00 Bank Charges 605,465.05 243,421.50 Local Running 32,444,908.91 6,675,167.00 Security Expenses 9,931,250.00 10,049,375.00 PIU and Other Meeting Expenses 1,570,750.00 45,279,832.30 Vehicle Maintenance 6,917,825.00 Fuel Project Vehicle 2,909,364.00 2,451,025.99 Office Maintenance 12,831,062.50 16,527,980.50 Study Tours and Mapping Evaluation In Hotel Monitoring and Evaluation Driver allowance 2,175,000.00 9,975,000.00 Office Cleaners 8,024,023.81 8,024,023.81 Local Travel 25,041,167.33 WHTFIRS 18,001,261.39 Implementation Support 874,000,00 Workshop 161,162,642.38 218,348,462.13 7. Cash & Bank CBN TSA ACCOUNT ( #Exchange rate@305 7,478,854,410.89 3,148,857,374.28 8. Others - Performance Grant to awardees' A total amount of USD ($) 84m was mandated for payment to grant awardee all over the 36 state and federal capital territory in Nigeria. However, only N2,580,399,073.25 had been disbursed to various beneficiaries.. 9. Consultancy PA U Enterprise Dev Center 19,824,685.63 Project ACT 171,338,098.49 Local Consultancy 637,977,267.27 International Consultancy 210,805,805.95 PWC 4,166,000.00 KPMG 112,796,435.90 TOTAL 1,147,908,293.24 10. Workshop PM Workshops/study tours 74,695,321.61 11. Training Local Training 20,046,799.50 Foreign Training 5,518,436.15 Training/ Capacity Building 51,729,415.20 Total 77,294,650.85 12. Grant Equity Grant 75,420,317.86 Innovative Market Grant 36,600,000.00 Accelerator Grant 470,313,600.00 Skill Placement Window 113,540,000.00 Aso Villa Demo Day(ADDV) Grant 409,058,011.39 Fast Track Grant 485,967,144.00 Total 1,590,899,073.25 13. Payables VAT 19,655,155.36 WHT 36,711,931.53 Total 56,367,086.89 14. Depreciation: The Project adopted a depreciation rate of : Office Equipment 10% ICT Equipment 10% Office Furniture 10% Depreciation Schedule Cost Items Office ICT Office Total Equipment Equipment Furniture 10% 10% 10% 10% Balance as at 0 0 0 0 1/1/17 Addition for the year 4,924,050.00 147,600 463,220 5,534,870 1:\ ID:, a a Total Assts 4,924,050 147,600 463,220 5,534,870 Depreciation - - - - Depreciation 492,405 14,760 46,322 553,487 Total Depreciation for 492,405 14,760 46,322 553,487 the year NBV 4,431,645 132,840 416,898 4,981,383