NATIONAL PRIMARY HEALTH CARE DEVELOPMENT AGENCY NIGERIA POLIO ERADICATION SUPPORT PROJECT (NPESP) - AF3 FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 TABLE OF CONTENTS Contents Page Corporate information 2 Results at a glance 3 Independent auditor's report 4 Statement of accounting policies 5-6 Statement of income and expenditure 7 Statement of financial position 8 Statement of changes in equity 9 Statement of cashflows 10 Notes to the financial statements 11 - 13 Receipt and payment account 14 NPHCDA/NPESP 2019 FINANCIAL STATEMENTS IDA CREDIT - 62890 1 CORPORATE INFORMATION Project team: Pharm. Bello Abdulkadir Aladie - Project Coordinator Mr. Hassan Ibrahim - Project Accountant Mr. Oladimeji Oluwatosin - Project Internal Auditor Mr. Adamu Ahmed - Project Procurement Officer Dr. Wilson E Chidama - Project Technical Officer Office address: NPHCDA Corporate Headquarters Plot 681/682 Port Harcourt Crescent Off Gimbiya Street Area 11 Garki Abuja. Auditors: Nexia Agbo Abel & Co 43 Anthony Enahoro Street Utako Abuja. Banker: Central Bank of Nigeria NPHCDA/NPESP 2019 FINANCIAL STATEMENTS IDA CREDIT - 62890 2 RESULTS AT A GLANCE 2019 2019 Per financial position $ N Total assets 96,546,510 31,377,615,837 Equity 96,536,327 31,374,306,313 Total liabilities 10,183 3,309,524 Per income and expenditure Income 122,644,266 39,859,386,452 Expenditure 26,107,939 8,485,080,138 Surplus for the year 96,536,327 31,374,306,313 NPHCDA/NPESP 2019 FINANCIAL STATEMENTS IDA CREDIT - 62890 3 ~Nexia Enahoro 43 Anthony UtakoDistrict Street ~ Agbo Abel & Co Abuja- Nigeria. T: +234 (0) 809. 238. 4074 E: info@nexianigeria.com REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF NATIONAL PRIMARY HEALTH CARE DEVELOPMENT AGENCY NIGERIA POLIO ERADICATION SUPPORT PROJECT (NPESP) - AF3 We have audited the accompanying financial statements of National Primary Health Care Development Agency - Nigeria Polio Eradication Support Project AF3 as at 31 December 2019 set out on pages 7 to 10 which have been prepared on the basis of the significant accounting policies on pages 5 to 6 and other explanatory notes on page 11 to 13. Project implementing unit's responsibility for the financial statement The project implementing unit is responsible for the preparation and fair presentation of these financial statements in accordance with Financial Reporting Council of Nigeria and with the requirements of the Companies and Allied Matters Act. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances. Auditors'responsibility Our responsibility is to express an independent opinion on the financial statements based on our audit. We conducted our audit in accordance with the International Standard on Auditing. Those standards require that we comply with ethical requirements and plan and perform our audit to obtain reasonable assurance that the financial statements are free from material misstatements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgement, including assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors considers internal control relevant to the project implementing unit's preparation and fair presentation of the financial statements 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 implementing unit's internal controL An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the project implementing unit, as well as evaluating the overall presentation of the financial statements. Opinion In our opinion, the project implementing unit has kept proper accounting records and the financial statements are in agreement with the records in all material respects and give in the prescribed manner, information required by the Companies and Allied Matters Act, CAP C20 LFN 2004. The financial statements give a true and fair view of the financial position of National Primary Health Care Development Agency - Nigeria Polio Eradication Support Project AF3 as at 31 December 2019, and of its financial performance and its cash flows for the period then ended in accordance with the Statement of Accounting Standards issued by the Financial Reporting Council of igeria. Abel Onyeke, FCA- FRCj2012jICANj00000000119 for: Nexia Agbo Abel & Co Chartered Accountants Abuja, Nigeria Nexia Agbo Abel & Co, is a member firm of the "Nexia Intemational'" network. Nexia International Limited does not deliver services in its own name or otherwise. Nexia International Limited and the member firms of the Nexia International network are not part of a worldwide partnership. Member firms of the Nexia International network are independently owned and operated. Nexia International Limited does not accept any responsibility for the commission of any act, or omission to act by, or the liabilities of, any of its members. . The trademarks NEXIA INTERNATIONAL, NEXIA and the NEXIA Jogoareowned by Nexia International Umited and used under licence. STATEMENT OF ACCOUNTING POLICIES The significant accounting policies applied in the preparation of these financial statements are set out below: 1. Basis of preparation and key assumptions The financial statements are prepared in compliance with the International Public Sector Accounting Standards (IPSAS). The financial statements are presented in the functional currency, Nigerian Naira (N) and translated in US Dollar ($) based on the prevailing exchange rate for the year and prepared on a modified cash basis under the historical cost convention for the revaluation of available assets. The cash flow statement is prepared using the indirect method. The financial statements are prepared on an accrual basis, except the statement of budget and actual of NPESP was excluded because it has not been made publicly available as required by IPSAS 24. The preparation of financial statements in conformity with IPSAS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Although, these estimates are based on the best knowledge of current events and actions, actual results ultimately may differ from those estimates. Key estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both the period of revision and future periods. 2. Revenue and other income Funds received from International Development Agencies (IDAs) are recognised as income when received. Interest earned on deposits in bank account is recognised in the statement of income and expenditure when cash is received. 3. Expenditure All expenditure are accounted for on a modified cash basis and have been classified under headings that aggregate all costs of similar nature. Expenditure is recognised: - When goods or services are received and cash paid. - When advances to project partners are retired. - When accruals are made for unpaid expenses at year end. 4. Foreign currencies Transactions in foreign currencies are translated into Naira at the rates ruling on the dates of the transactions. Assets and liabilities in foreign currencies are translated at the rates of exchange ruling at the statement of financial position date. All profits and losses on exchange whether realised or unrealised are accounted for in operating results. NPHCDA/NPESP 2019 FINANCIAL STATEMENTS IDA CREDIT - 62890 5 STATEMENT OF ACCOUNTING POLICIES (CONT'D) 5. Cash and cash equivalents Cash at bank and cash in hand are classified as cash and cash equivalents on the statement of financial position and statements of cash flows. 6. Property, plant and equipment All property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure directly attributable to the acquisition of the asset. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits or service potential associated with the item will flow to NPHCDA-NPESP and the cost of the item can be measured reliably. The carrying amount of a replaced part is derecognized. All repair and maintenance is charged to the statement of financial performance during the financial period in which it is incurred. Depreciation on assets is charged on a straight-line basis at rates calculated to allocate the cost or valuation of the asset less any estimated residual value over its remaining useful life. The rates are as follows: % Years Building 2 50 Plant and machinery 10 10 Motor vehicles 20 5 Furniture and fixtures 20 5 Office equipments 25 4 Computer equipments 33.3 3 Specific cultural and heritage assets - Unlimited The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount or recoverable service amount if the asset’s carrying amount is greater than its estimated recoverable amount or recoverable service amount. 7. Intangible assets Intangible assets are stated at historical cost less accumulated amortization and any impairment losses. Amortization is provided over the estimated useful life using the straight line method. The estimated useful life for intangible assets are as follows: % Years Software acquired externally 33.3 3 Licenses and rights, copyrights and other intangible assets 25 4 NPHCDA/NPESP 2019 FINANCIAL STATEMENTS IDA CREDIT - 62890 6 STATEMENT OF INCOME AND EXPENDITURE FOR THE YEAR ENDED 31 DECEMBER 2019 Note 2019 2019 $'000 N’000 Income IDA Credit 2 122,634,438 39,856,192,493 Other income 3 9,828 3,193,959 122,644,266 39,859,386,452 Expenditure Direct costs 4 (25,456,989) (8,273,521,500) Consultancy, training and workshop 5 (568,325) (184,705,608) Operating expenses 6 (63,212) (20,543,957) Depreciation and amortisation (19,413) (6,309,073) Surplus for the year 96,536,327 31,374,306,313 NPHCDA/NPESP 2019 FINANCIAL STATEMENTS IDA CREDIT - 62890 7 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2019 Accumulated Total Total fund equity equity N N $ Balance as at 1 January 2019 - - - Surplus for the year 31,374,306,313 31,374,306,313 96,536,327 Balance as at 31 December 2019 31,374,306,313 31,374,306,313 96,536,327 NPHCDA/NPESP 2019 FINANCIAL STATEMENTS IDA CREDIT - 62890 9 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2019 2019 2019 Note $ N Cash flow from operating activities Surplus for the year 96,536,327 31,374,306,313 Adjustments: Depreciation and amortisation 7 19,413 6,309,073 96,555,740 31,380,615,386 Changes in assets and liabilities: Increase in inventory (92,635,388) (30,106,501,243) Increase in withholding tax payable 10,183 3,309,524 Net cash generated from operating activities 3,930,535 1,277,423,667 Cash flow from investing activities Purchase of property, plant and equipment 7 (660,963) (214,812,824) Purchase of intangible assets 8 (77,192) (25,087,397) Net cash used in investing activities (738,155) (239,900,221) Net increase in cash and cash equivalent 3,192,380 1,037,523,446 Cash and cash equivalent at 1 January - - Cash and cash equivalent at 31 December 10 3,192,380 1,037,523,446 NPHCDA/NPESP 2019 FINANCIAL STATEMENTS IDA CREDIT - 62890 10 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 1. The Project National Primary Health Care Development Agency (NPHCDA) is the implementing agency of the Nigeria Polio Eradication Support Project (NPESP) whose primary objectives is to strengthen routine immunization and complete the last mile in eradicating polio, and as part of a global polio eradication effort, to achieve and sustain at least 80 percent coverage with oral polio vaccine immunization in every state in the recipient’s territory, and sustain national routine immunization coverage. 2. Revenue 2019 2019 $ N IDA Credit 122,634,438 39,856,192,493 122,634,438 39,856,192,493 3. Other income Interest income 7,612 2,473,959 Other income 2,215 720,000 9,828 3,193,959 4. Direct costs Polio - provision of operational/technical assistance 20,000,000 6,500,000,000 Polio and RI operational/technical Assistance 4,999,050 1,624,691,250 Performance bonus (NERICC and SERICC) 322,872 104,933,250 Operational logistics support (RIOs) 135,068 43,897,000 25,456,989 8,273,521,500 5. Consultancy, training and workshop Technical assistants - SERICC 510,154 165,799,998 Vaccine management training 54,318 17,653,473 Local training 3,853 1,252,137 568,325 184,705,608 6. Operating expenses Local transport and travels 41,543 13,501,571 Stationeries 1,643 533,950 Servicing of meeting 4,646 1,510,000 World bank mission 5,400 1,754,910 Advert and publicity 2,869 932,400 Printing of documents 6,741 2,190,800 Bank charges 370 120,325 Other cost - - 63,212 20,543,957 NPHCDA/NPESP 2019 FINANCIAL STATEMENTS IDA CREDIT - 62890 11 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 7. Property, plant and Motor Office Cold chain Plant and equipment vehicle equipment equipment machinery Total Total N N N N N $ Cost: At 1 January 2019 - - - - - - Additions 115,546,600 62,188,040 7,803,034 29,275,150 214,812,824 660,963 At 31 December 2019 115,546,600 62,188,040 7,803,034 29,275,150 214,812,824 660,963 Depreciation: At 1 January 2019 - - - - - - Charge for the year 1,925,777 1,507,752 487,690 731,879 4,653,097 14,317 At 31 December 2019 1,925,777 1,507,752 487,690 731,879 4,653,097 14,317 Carrying amount: At 31 December 2019 113,620,823 60,680,288 7,315,344 28,543,271 210,159,727 646,645 At 31 December 2018 - - - - - - Accounting Supply chain 8. Intangible assets software software Total Total N N N $ Cost: At 1 January 2019 - - - - Additions 9,500,000 15,587,397 25,087,397 77,192 At 31 December 2019 9,500,000 15,587,397 25,087,397 77,192 Amortisation: At 1 January 2019 - - - - Charge for the year 790,875 865,101 1,655,976 5,095 At 31 December 2019 790,875 865,101 1,655,976 5,095 Carrying amount: At 31 December 2019 8,709,125 14,722,296 23,431,421 72,097 At 31 December 2018 - - - - 9. Inventory 2019 2019 $ N Drugs and vaccines 92,635,388 30,106,501,243 92,635,388 30,106,501,243 10. Cash and cash equivalent Cash at bank 3,192,380 1,037,523,446 3,192,380 1,037,523,446 NPHCDA/NPESP 2019 FINANCIAL STATEMENTS IDA CREDIT - 62890 12 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 11. Accumulated fund 2019 2019 $ N At 1 January - - Surplus for the year 96,536,327 31,374,306,313 At 31 December 96,536,327 31,374,306,313 12. Contingent liabilities There were no contingent liabilities in respect of legal actions against the Agency with respect to the Project. 13. Events after reporting period .1 COVID-19 On 30 January 2020, the World Health Organisation (WHO) announced Coronavirus as a global health emergency. On 11 March 2020, it announced that COVID-19 was a global pandemic. The COVID-19 pandemic is having significant effects on global markets, supply chains, business and communities. Specific to the Project, COVID-19 will not impact on the financial results for the year ended 2019, however, it may impact various aspects of 2020 operations and financial NPHCDA/NPESP 2019 FINANCIAL STATEMENTS IDA CREDIT - 62890 13 RECEIPT AND PAYMENT ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2019 2019 2019 $ NN Receipts IDA Credit 5,000,000 1,625,000,000 Interest income 7,612 2,473,959 Other income 2,216 720,000 5,009,828 1,628,193,959 Payments Property, plant and equipment 660,963 214,812,824 Software and licences 77,192 25,087,397 Performance bonus (NERICC and SERICC) 322,872 104,933,250 Operational logistics support (RIOs) 135,068 43,897,000 Technical assistants - SERICC 499,971 162,490,475 Vaccine management training 54,318 17,653,473 Local training 3,853 1,252,137 Local transport and travels 41,543 13,501,571 Stationeries 1,643 533,950 Servicing of meeting 4,646 1,510,000 World bank mission 5,400 1,754,910 Advert and publicity 2,869 932,400 Printing of documents 6,741 2,190,800 Bank charges 370 120,325 1,817,448 590,670,513 Surplus of receipts over payments 3,192,380 1,037,523,446 Cash and cash equivalent as at 1 January - - Cash and cash equivalent as at 31 December 3,192,380 1,037,523,446 Represented by: Special Account 3,007,602 977,470,709 Draw Down Account 184,778 60,052,737 Cash balance 3,192,380 1,037,523,446 NPHCDA/NPESP 2019 FINANCIAL STATEMENTS IDA CREDIT - 62890 14