101289 KENYA CLIMATE INNOVATION CENTER infoDev CITE GRANT NUMBERTF011840 SPECIAL PURPOSE FINANCIAL STATEMENTS FOR THE YEAR 1 JULY 2013 TO 30 JUNE 2014 KENYA CLIMATE INNOVATION CENTER (Kenya CIC) SPECIAL PURPOSE FINANCIAL STATEMENTS FOR THE YEAR 1JULY2013 TO 30 JUNE 2014 Table of contents Page No. Background information 2-3 Statement of Kenya CIC Consortium responsibilities 4 Report of the independent auditors 5-6 Statement of income and expenditure 7 Statement of financial position 8 Notes to the financial statements 9-11 l. L l [_: l. l~ I L I ,~ KENYA CLIMATE INNOVATION CENTER BACKGROUND INFORMATION Institutional Details/Information The Kenya Climate Innovation Center (KCIC)) is a World Bank-infoDev initiative, the first in a global network of CI Cs being launched by infoDev to support the development and scale up of locally relevant climate technologies. Funded by UK Aid and DANIDA, the Kenya CIC provides I incubation, capacity building services and financing to Kenyan entrepreneurs and small-and medium-sized enterprises (SMEs) that are developing innovative renewable energy, agribusiness r and water solutions. The Center is being implemented by a consortium (Kenya CIC consortium) comprising GVEP International, PricewaterhouseCoopers (PwC) Ltd, Strathmore University and the Kenya Industrial Research and Development Institute (KIRDI). The KCIC has a secretariat housed at KCIC offices at Strathmore Business School Members of the Project Management Team Kenya Climate Innovation Center (KCIC) Project secretariat is headed by the Chief Executive Officer (CEO) . The CEO is assisted by three managers; the Innovation and Entrepreneurship Manager, the Outreach and Partnership Manager, and the Finance and Administration Manager. The Project On 15 May 2012, the Kenya CIC Consortium members signed an agreement with International Bank for Reconstruction and Development (World Bank) to establish a Climate Innovation Centre in Nairobi . The agreement provided a budget of US$ 4,500,000 over a four year period. The project operations started in October 2012. The Kenya CIC aims to increase the growth of innovative climate technologies in Kenya and, as a result, one of its main social, economic and environmental impacts is in the provision of financial services to the projects it supports. l_ The Kenya CIC provides a range of services to support entrepreneurs developing climate mitigation and adaptation solutions to grow their ideas and take their businesses to the next level. These services include: L 1. Advisory and mentoring: L The Kenya CIC provides business and technical expertise and mentorship to equip SMEs with the skills and knowledge they need to turn appropriate technologies into viable businesses. l 2. Technical Facilities: Through the Kenya Industrial Research and Development Institute (KIRDI) and other paitners, the Kenya CIC provides access to technical facilities for product testing and demonstration. L Page 2 KENYA CLIMATE INNOVATION CENTER BACKGROUND INFORMATION (CONTINUED) 3. Office Space/Access to facilities: Housed at Strathmore Business School in Nairobi, the Kenya CIC provides a working space with access to desk space and other office facilities including meeting rooms and Wi-Fi for startup companies. 4. Policy Advice and Advocacy: The Kenya CIC works closely with the government and other interested groups/parties to develop policies that support the development and scale up of green technologies in Kenya. 5. Technology transfer and joint research and development: The Kenya CIC acts as the focal point for international arrangement of technology transfer and joint collaborative arrangement on Research and Development through local institutions. 6. Financing: The Kenya CIC aims to facilitate access to finance to fund clean technology businesses through their growth cycle. f [ L L L. L !_ L L Page 3 ) ' KENYA CLIMATE INNOVATION CENTER STATEMENT OF KENYA CIC CONSORTIUM'S RESPONSIBILITIES The Kenya CIC Consortium is responsible for the preparation and presentation of the special purpose financial statements of the Kenya CIC comprising the statement financial position as at 30 June 2014, the statement of income and expenditure, and notes to the financial statements, which include a summary of significant accounting policies and other explanatory notes on the basis of accounting policies described in Note 1. The Kenya CIC Consortium's responsibility includes: determining that the basis of accounting described in Note 1 is an acceptable basis for preparing and presenting the financial statements in the circumstances, preparation and presentation of financial statements in accordance with accounting policies of the Kenya CIC and for such internal control as Project management determines is necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error. The Kenya CIC Consortium accepts responsibility for the financial statements, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgements and estimates, in conformity with the accounting policies and requirements of the Kenya CIC. The Kenya CIC Consortium is of the opinion that the financial statements have been properly prepared, in all material respects, in accordance with the basis of accounting described in Note 1. The Kenya CIC Consortium further accepts responsibility for the maintenance of accounting records, which may be relied upon in the preparation of financial statements, as well as adequate systems of internal financial control. L In addition, the Kenya CIC Consortium is responsible for ensuring compliance with the terms of the grant agreement between Grant Agreement with International Bank for Reconstruction and Development and Kenya CIC Consortium with respect to the use offunds provided under the grant. l Approval of the special purpose financial statements L The financial statements of the Kenya CIC, as indicated above, were approved on 10 December 2014 and are signed on their behalf by: L l. Simon Mutinda Project Director Chief Executive Officer L l L Page 4 l. KPMG Kenya Teleph one +254 20 2806000 Certified Public Accountants Fax +254 20 22 15695 8th Floor, A BC Tow ers Email info@kpmg. co .ke WaiyakiWay Internet www.kpmg. com/eastafrica PO Box 40612 00100 GPO Nairobi, Kenya REPORT OF THE INDEPENDENT AUDITORS TO THE KENYA CIC CONSORTTIJM We have audited the accompanying special purpose financial statements of the Kenya Climate Innovation Center (Kenya CIC) set out on pages 7 to 11 , which comprise the statement of financial n position at 30 June 2014, statement of income and expenditure and notes to the financial statements, which include a summary of significant accounting policies and other explanatory notes. The financial statements have been prepared by Kenya CIC Consortium in accordance with the accounting policies set out in Note 1. Kenya CIC Consortium's responsibility for the financial statements The Kenya CIC Consortium is responsible for the preparation of these special purpose financial statements in accordance with the accounting policies set out in Note 1 and for such internal control as the consortium determines necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error. The Kenya CIC Consortium is also responsible for determining that the basis of accounting described in Note 1 is an acceptable basis for preparing the financial statements in the circumstances. Auditors' responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We l. conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with relevant ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. L An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's L judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity' s preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing l an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating 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. L. Opinion ln our opinion, the special purpose financial statements of Kenya CIC, for the year I July 2014 to 30 June 2014 are prepared, in all material respects, in accordance with the accounting policies set out in Note I. Partners EE Aholi Page 5JLMwaura KPMG Kenya is a registered pa rtnership and a membe r PC Appleton• RB Ndung'u firm of the KPMG network of independent member firms !British") BC D'Souza JM Ndunyu affiliated with KPMG International Cooperative rKPMG JM Gathecha AW Pringle • lnternationan , a Swiss entity. JI Kariuki n l~ REPORT OF THE INDEPENDENT AUDITORS TO THE KENYA CIC CONSORTIUM