I I I GL4NA CLIMATE VENTURE FACILITY (A WORLD BANK PROJECT) FINANCIAL REPORT FOR FOR THE FIFTEEN MONTH PERIOD ENDED 31 DECEMBER 2019 I I I I I I I I I I I I I I I 1 I GHANA CLIMATE VENTURE FACILITY I FOR THE FIFTEEN MONTH PERIOD ENDED 31 DECEMBER 2019 INDEX Pages Project Information 2 Report on the Project Activities 3 Statement of Project Management Team's Responsibility 4 I Independent Auditor's Report 5-7 Statement of Receipt and Payment 8 Statement of Accumulated Fund Balance 9 I Statement of Financial Position 10 Note to the Project Financial Report 11-13 I I I I I I I I I I I I I GHANA CLIMATE VENTURE FACILITY REPORT ON THE PROJECT ACTIVITIES FOR THE FIFTEEN MONTH PERIOD ENDED 31 DECEMBER 2019 Background to the Project Innohub Foundation, with support from the World Bank and other stakeholders, is sponsoring the launch of an evergreen investment company in Ghana, Wangara Green Ventures ("Wangara"). The World Bank, with support from the governments of Denmark and the Netherlands, is providing initial capitalization and establishment costs for Wangara through the Ghana Climate Venture Facility (GCVF) grant, managed by Innohub Foundation. The GCVF grant was initiated to promote Ghana's economic development, job creation and industrial competitiveness through support for climate (clean) technology businesses which represent some of the most promising and important sectors of the 21st century. Wangara will have a specific focus on early to growth stage climate-related SMEs (such as clean energy, climate resilient agriculture, clean water, and sanitation) and SMEs in other sectors with best-in-class climate practices. Through the provision of investment capital and non-financial services, Wangara will support Ghanaian entrepreneurs that develop innovative technologies and business models which create positive climate impact. Wangara will invest in SMEs using equity and quasi-equity instruments ranging from 50,000 USD to 500,000 USD. Additionally, Wangara will selectively offer pre- and post- investment technical assistance support to the SMEs in its pipeline and portfolio. The GCVF is supported by the governments of Denmark and the Netherlands under the InfoDev Climate Technology Program. I I I I I I I I I I 1 I 4. GHANA CLIMATE VENTURE FACILITY STATEMENT OF PROJECT MANAGEMENT TEAM'S RESPONSIBILITY Innohub Foundation is to prepare Project financial report for each financial period which gives a true and fair view of the state of affairs of the Ghana Climate Venture Facility Project and of its Receipt and Payment for that period. In preparing those Project Financial Report Management is required to: * Select suitable accounting policies and apply them consistently; * Make judgments and estimates that are reasonable and prudent; * State whether applicable accounting standards have been followed, subject to any material department disclosed and explained in the Project financial report; and * Prepare the Project financial report on the going concern basis unless it is inappropriate to presume Project will continue Management is responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Project which enable them to ensure that the Project financial report comply with the requirements of the contract. Management is also responsible for safeguarding the assets of the Project and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The above statements, which should be read in conjunction with the statement of the Auditor's responsibility set out on pages 5 - 7, are made with a view to showing the respective responsibilities of the Ghana Climate Venture Facility and the Auditor in relation to the Project financial report. I I I I I I I I I I I mMAZARS 5. INDEPENDENT AUDITORS' REPORT TO DONORS OF GHANA CLIMATE VENTURE FACILITY Report on the Audit of the Financial Statement Opinion We have audited the financial statements of Ghana Climate Venture Facility, which comprise, the statement of receipt and payment, the statement of accumulated fund balance, the statement of financial position as at 31 December 2019, and notes to the Financial Statements, including a summary of significant accounting policies. In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Project as at the year ended 31 December 2019, and its financial performance for the period then ended in accordance with International Public Sector Accounting Standards (IPSAS) and in the manner required by the Grant Contract. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Project in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with Mazars Code of Conduct for Objectivity and Independence (CCOI), we have fulfilled our other ethical responsibilities in accordance with the IESBA Code and the CCOI. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other Information Our opinion on the financial statements does not cover other information and we do not express any form of I assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. I I I No 7& gNYAME ADOM COURTS ADONAI LANE ADjIRINCANOR EASTLECON* P.OM C P 2957 AcCRA GHANA TIL: +233 302 520 94 3 * FAX: +233 302 500 038 * contact@mazars.com.gh * www.mazars.com.gh OaCIrALAooRISS-CD]65-5957 Praxit : 4KCiSTATSON - C0454711X anOA cHARTIRE ACCOUNTANTS AND IUSIN ESs ADVISORS 010 a AL TIAC R PARTNERS: ET AKONOR I N A,WODANKO, AMPI M-DARKO, R. AJKTUNMOI I 1 I MAZARS INDEPENDENT AUDITORS' REPORT 6. TO DONORS OF GHANA CLIMATE VENTURE FACILITY Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Public Sector Accounting (IPSAS) and in a manner required by the Grant Contract 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. In preparing the financial statements, management is responsible for assessing the Project's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Project financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements Our 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 auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs 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. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We 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 our 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 Project internal control; * Evaluate the appropriateness of accounting policies used and the reasonablness of accounting estimates and related disclosures made by management; * Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Project ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in cur auditor's report to th related: I Praxity GODAL AWLANC~E OF MEMBER INDEPENOEN FInNI 1 I MAZARS I 7. INDEPENDENT AUDITORS' REPORT TO DONORS OF GHANA CLIMATE VENTURE FACILITY disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Project to cease to continue as a going concern; * 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 manner that achieves fair presentation; and I Obtain sufficient appropriate audit evidence regarding the financial information of the entities and business activities within the Project to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit I opinion. Report on Other Legal and Regulatory Requirements The Project management team has complied in all material respects, with provision stated in the contract. The engagement partner on the audit resulting in this independent auditors' report is Kwame Ampim-Darko I (ICAG/P/1453). For and on behalf of: Mazars (ICAGIF/2020/079) Chartered Accountants and Business Advisors 7/9 Nyame Adorn Courts, Adonai Lane Adjiringanor, East Legon, Accra GD-165-5957 PMB LG DTD 20014 P. O. Box GP 295 Accra I I .......7v . 22 Praxity GLOBAL ALLANCE OF IND PENDENT FIRMS I I GHANA CLIMATE VENTURE FACILITY RECEIPT AND PAYMENT STATEMENT I FOR THE FIFTEEN MONTH PERIOD ENDED 31 DECEMBER 2019 (All amount are expressed in United State Dollars unless otherwise stated) Note 2019 Receipt Grant Income Receipt 3 1,955,653 1,955,653 Less: Payment Direct Fund Expense 4 832,685 Indirect Expense 5 2,983 3 835,668 Excess of Receipt over Payment 1,119,985 I I I Grant Manager Director I I 2020 I I The policies and notes on page 11 to 13 are an integral part of these financial statements I I I 1 I GHANA CLIMATE VENTURE FACILITY STATEMENT OF ACCUMULATED FUND BALANCE FOR THE FIFTEEN MONTH PERIOD ENDED 31 DECEMBER 2019 (All amount are expressed in United State Dollars unless otherwise stated) 1 2019 Opening Balance Excess of Receipt over Payment 1,119,985 Balance as at 31/12/2019 1,119,985 I I I I I I I I I I I The policies and notes on page 11 to 13 are an integral part of these financial statement I I I1 I I I GHANA CLIMATE VENTURE FACILITY 10. STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019 (All amount are expressed in United State Dollars unless otherwise stated) Note 2019 I Assets Current Assets Cash at Bank 6 1,119,985 I TaC rtst119 Total Current Assets 1,119,985 Total Assets 1,119,985 Reserves and liabilities Reserves Accumulated Fund Balance 1,119,985 I Total Reserves 1,119,985 Total Reserves and Liabilities 1,119,985 I I. . . .. . . Grant Manager Director I I . .....2020 I The policies and notes on page 11 to 13 are an integral part of these financial statements I I 1 I I 11. GHANA CLIMATE VENTURE FACILITY NOTES TO THE PROJECT FINANCIAL REPORT FOR THE FIFTEEN MONTH PERIOD ENDED 31 DECEMBER 2019 I 1 BASIS OF PREPARATION OF PROJECT FINANCIAL STATEMENTS 1.1 Statement of Compliance The financial statements have been prepared in accordance with International Public Sector Accounting (IPSAS) and also in compliance with the terms and conditions of the contract. 1.2 Basis of Measurement The financial statements have been prepared under historical cost. 1.3 Functional and Presentation Currency The financial statements are presented in United State Dollars ($). The functional currency of the Project is also presented in United State Dollars ($) and the financial information presented has been rounded off to the nearest United State Dollars. 2 SIGNIFICANT ACCOUNTING POLICIES The applied accounting principles are based on the historical cost convention. Unless stated otherwise, assets and liabilities are shown at nominal value. An asset is disclosed in the statement of financial position when it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost of the asset can be measured reliably. A liability is recognized in the statement of financial position when it is expected to result in an outflow from the entity of resources embodying economic benefits and the amount of the obligation can be measured with sufficient reliability. 2.1 Receipt Receipt is recognized in the statement of receipt and payment when an increase in future economic potential related to an increase in an asset or a decrease of a liability has arisen, the size of which can be measured reliably 2.2 Payment Payment is recognized when a decrease in the economic potential related to a decrease in an asset or an increase of a liability has arisen, the size of which can be measured with sufficient reliability. 1 If a transaction results in a transfer of future economic benefits and or when all risks relating to assets or liabilities transfer to a third party, the asset or liability is no longer included in the balance sheet. Assets and liabilities are not included in the statement of financial position if economic benefits are not probable and/or cannot be measured with sufficient reliability. The receipt and payment are allocated to the period to which they relate I I 1 1 I GHANA CLIMATE VENTURE FACILITY 12. NOTES TO THE PROJECT FINANCIAL REPORT FOR THE FIFTEEN MONTH PERIOD ENDED 31 DECEMBER 2019 (All amount are expressed in United State Dollars unless otherwise stated) 2.3 Cash at Bank This represents the total amount of cash available to the Project received from the funding partners and held in trust on behalf of the Project by the implementing partner 2.4 Transactions in Foreign Currencies Transactions denominated in foreign currency are translated into the relevant functional currency at the exchange rate applying on the transaction date. Monetary assets and liabilities denominated in foreign currency are translated at the statement of financial position date into the functional currency at the exchange rate applying on that date. 2.5 Receipt and Payment The receipt and payment are allocated to the period to which they relate. Receipt is matched to Project payment. I I I I I I I I I I I 1 I GHANA CLIMATE VENTURE FACILITY 13. NOTES TO THE PROJECT FINANCIAL REPORT FOR THE FIFTEEN MONTH PERIOD ENDED 31 DECEMBER 2019 (All amount are expressed in United State Dollars unless otherwise stated) 3. Receipts This represents funds received from the World Bank, the Project donor partner 2019 Grant Income Receipt 1,955,653 4 Direct Fund Expense 1 Pipeline Building support (Dedicated pre-Investment TA Services) 8,000 Legal Consultants (Fund Structuring & Licensing) 30,000 Financial Management, Procurement, M&E & Reporting 109,000 Operating Partner Cost 31,277 Operating Partner - Travel 8,736 Training and other services and activities 19,171 Working Capital Support (Stipends - Governance members) 1,500 Working Capital Support (Operational Expenses) 128,924 Working Capital Support (Salaries - Core Team) 173,263 Pre - Launch Set-up Expenses (Rent) 40,912 Pre - Launch Set-up Expenses (Investment Team Salaries) 55,373 Pre - Launch Set-up Expenses (Investment Team - Overheads) 10,221 Pre - Launch Set-up Expenses (Investment Team - Training) 17,151 I & P - Fund Design Support 170,764 Capital Expenses (Wangara Green Ventures) - Furniture & Fixtures 18,465 Capital Expenses (Wangara Green Ventures) - Office Equipment 8,929 Total 832,685 I 5. Indirect Fund Expense Bank charges 2,983 1 6 Cash at Bank I Cash at Bank 1,119,985 I 1 I