NATIONAL PRIMARY HEALTH CARE DEVELOPMENT AGENCY NIGERIA POLIO ERADICATION SUPPORT PROJECT (NPESP) - AF3 FINANCIAL STATEMENTS FOR THE NINETEEN MONTHS ENDED 31 JULY 2021 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 2021 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 2021 FINANCIAL STATEMENTS IDA CREDIT - 62890 2 RESULTS AT A GLANCE Nineteen Nineteen Twelve Twelve Months Months Months Months Change 2021 2021 2019 2019 % Per financial position $ N $ N Total assets 116,109,091 37,735,454,360 96,546,510 31,377,615,837 20 Equity 116,098,320 37,731,954,360 96,536,327 31,374,306,313 20 Total liabilities 10,771 3,500,000 10,183 3,309,524 6 Per income and expenditure Income 21,694,355 7,050,665,348 122,644,266 39,859,386,452 (82) Expenditure 2,132,362 693,017,301 26,107,939 8,485,080,138 (92) Surplus for the period 19,561,993 6,357,648,047 96,536,327 31,374,306,313 (80) NPHCDA/NPESP 2021 FINANCIAL STATEMENTS IDA CREDIT - 62890 3 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 2021 FINANCIAL STATEMENTS IDA CREDIT - 62890 5 STATEMENT OF ACCOUNTING POLICIES (CONTINUED) 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 2021 FINANCIAL STATEMENTS IDA CREDIT - 62890 6 STATEMENT OF INCOME AND EXPENDITURE FOR THE NINETEEN MONTHS ENDED 31 JULY 2021 Nineteen Nineteen Twelve Twelve Months Months Months Months 2021 2021 2019 2019 Note $ N $ N Income IDA credit 2 21,296,259 6,921,284,126 122,634,438 39,856,192,493 Other income 3 398,096 129,381,222 9,828 3,193,959 21,694,355 7,050,665,348 122,644,266 39,859,386,452 Expenditure Direct costs 4 (305,081) (99,151,413) (25,456,989) (8,273,521,500) Consultancy, training and workshop 5 (1,128,173) (366,656,090) (568,325) (184,705,608) Operating expenses 6 (183,696) (59,701,096) (63,212) (20,543,957) Depreciation and amortisation 7&8 (515,412) (167,508,702) (19,413) (6,309,073) Surplus for the period 19,561,993 6,357,648,047 96,536,327 31,374,306,313 NPHCDA/NPESP 2021 FINANCIAL STATEMENTS IDA CREDIT - 62890 7 STATEMENT OF CHANGES IN EQUITY FOR THE NINETEEN MONTHS ENDED 31 JULY 2021 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 Surplus for the period 6,357,648,047 6,357,648,047 19,561,993 Balance as at 31 July 2021 37,731,954,360 37,731,954,360 116,098,320 NPHCDA/NPESP 2021 FINANCIAL STATEMENTS IDA CREDIT - 62890 9 STATEMENT OF CASH FLOWS FOR THE NINETEEN MONTHS ENDED 31 JULY 2021 Nineteen Nineteen Twelve Twelve Months Months Months Months 2021 2021 2019 2019 Note $ N $ N Cash flow from operating activities Surplus for the period 19,561,993 6,357,648,047 96,536,327 31,374,306,313 Adjustments: Depreciation and amortisation 7 515,412 167,508,702 19,413 6,309,073 20,077,405 6,525,156,749 96,555,740 31,380,615,386 Changes in assets and liabilities: Increase in inventory (21,586,751) (7,015,694,197) (92,635,388) (30,106,501,243) Increase in other payables 586 190,476 10,183 3,309,524 Net cash (used in)/generated from operating activities (1,508,760) (490,346,972) 3,930,535 1,277,423,667 Cash flow from investing activities Purchase of property, plant and equipment 7 (1,573,158) (511,276,500) (660,963) (214,812,824) Purchase of intangible assets 8 (34,251) (11,131,527) (77,192) (25,087,397) Net cash used in investing activities (1,607,409) (522,408,027) (738,155) (239,900,221) Net increase in cash and cash equivalents (3,116,169) (1,012,754,999) 3,192,380 1,037,523,446 Cash and cash equivalent at 1 January 3,192,380 1,037,523,446 - - Cash and cash equivalent at 31 July / 31 December 10 76,211 24,768,447 3,192,380 1,037,523,446 NPHCDA/NPESP 2021 FINANCIAL STATEMENTS IDA CREDIT - 62890 10 NOTES TO THE FINANCIAL STATEMENTS FOR THE NINETEEN MONTHS ENDED 31 JULY 2021 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. Nineteen Nineteen Twelve Twelve Months Months Months Months 2021 2021 2019 2019 2. Revenue $ N $ N IDA credit 21,296,259 6,921,284,126 122,634,438 39,856,192,493 21,296,259 6,921,284,126 122,634,438 39,856,192,493 3. Other income Interest income 5,957 1,936,112 7,612 2,473,959 Exchange gain 392,139 127,445,110 - - Other income - - 2,215 720,000 398,096 129,381,222 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) 124,615 40,500,000 322,872 104,933,250 Operational logistics support (RIOs) 148,385 48,225,000 135,068 43,897,000 Monitoring and evaluation 32,081 10,426,413 - - 305,081 99,151,413 25,456,989 8,273,521,500 5. Consultancy, training and workshop Mock vaccine audit 744,178 241,857,775 - - Environmental and social management plan 16,847 5,475,360 - - Technical assistants - SERICC 294,069 95,572,419 510,154 165,799,998 Vaccine management training 73,079 23,750,536 54,318 17,653,473 Local training - - 3,853 1,252,137 1,128,173 366,656,090 568,325 184,705,608 6. Operating expenses Local transport and travels 10,700 3,477,520 41,543 13,501,571 Insurance 110,347 35,862,750 - - Repairs and maintenance 1,846 600,000 - - Stationeries 6,050 1,966,100 1,643 533,950 Servicing of meeting 12,166 3,953,790 4,646 1,510,000 World bank mission - - 5,400 1,754,910 Advert and publicity 12,107 3,934,789 2,869 932,400 Printing of documents 4,395 1,428,500 6,741 2,190,800 Audit fees 15,385 5,000,000 - - Audit expenses 7,443 2,419,000 - - Communication 600 195,000 - - Bank charges 583 189,523 370 120,325 Other cost 2,074 674,124 - - 183,696 59,701,096 63,212 20,543,957 NPHCDA/NPESP 2021 FINANCIAL STATEMENTS IDA CREDIT - 62890 11 NOTES TO THE FINANCIAL STATEMENTS FOR THE NINETEEN MONTHS ENDED 31 JULY 2021 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 Additions 382,557,000 - 128,719,500 - 511,276,500 1,573,158 At 31 July 2021 498,103,600 62,188,040 136,522,534 29,275,150 726,089,324 2,234,121 Accumulated 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 Charge for the period 79,481,280 23,320,515 43,150,981 4,391,273 150,344,049 462,597 At 31 July 2021 81,407,057 24,828,267 43,638,671 5,123,152 154,997,146 476,914 Carrying amount: At 31 July 2021 416,696,543 37,359,773 92,883,863 24,151,999 571,092,178 1,757,207 At 31 December 2019 113,620,823 60,680,288 7,315,344 28,543,271 210,159,727 646,645 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 Additions - 11,131,527 11,131,527 34,251 At 31 July 2021 9,500,000 26,718,924 36,218,924 111,443 Accumulated 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 Charge for the period 4,745,250 12,419,403 17,164,653 52,815 At 31 July 2021 5,536,125 13,284,504 18,820,629 57,910 Carrying amount: At 31 July 2021 3,963,875 13,434,420 17,398,295 53,533 At 31 December 2019 8,709,125 14,722,296 23,431,421 72,097 NPHCDA/NPESP 2021 FINANCIAL STATEMENTS IDA CREDIT - 62890 12 NOTES TO THE FINANCIAL STATEMENTS FOR THE NINETEEN MONTHS ENDED 31 JULY 2021 Nineteen Nineteen Twelve Twelve Months Months Months Months 2021 2021 2019 2019 9. Inventory $ N $ N Drugs and vaccines 114,222,140 37,122,195,440 92,635,388 30,106,501,243 114,222,140 37,122,195,440 92,635,388 30,106,501,243 10. Cash and cash equivalents Cash at bank 76,211 24,768,447 3,192,380 1,037,523,446 76,211 24,768,447 3,192,380 1,037,523,446 11. Accumulated fund At 1 January 96,536,327 31,374,306,313 - - Surplus for the period 19,561,993 6,357,648,047 96,536,327 31,374,306,313 At 31 July / 31 December 116,098,320 37,731,954,360 96,536,327 31,374,306,313 12. Other payables Accrued audit fees 7,694 2,500,000 - - Accrued audit expenses 3,077 1,000,000 - - Withholding tax payable - - 10,183 3,309,524 10,771 3,500,000 10,183 3,309,524 13. Contingent liabilities There were no contingent liabilities in respect of legal actions against the Agency with respect to the Project. 14. Events after reporting period There were no significant or material adjusting events after the reporting period. 15. Going concern Based on the agreement with the World Bank, the National Primary Health Care Development Agency - Nigeria Polio Eradication Support Project (NPESP) AF3 ended as at 31 July 2021 and therefore, the project is not expected to continue in the forseeable future. NPHCDA/NPESP 2021 FINANCIAL STATEMENTS IDA CREDIT - 62890 13 RECEIPT AND PAYMENT ACCOUNT FOR THE NINETEEN MONTHS ENDED 31 JULY 2021 Nineteen Nineteen Twelve Twelve Months Months Months Months 2021 2021 2019 2019 Receipts $ N $ N IDA credit - - 5,000,000 1,625,000,000 Interest income 5,957 1,936,112 7,612 2,473,959 Exchange gain 392,139 127,445,110 Other income - - 2,216 720,000 398,096 129,381,222 5,009,828 1,628,193,959 Payments Property, plant and equipment 1,573,158 511,276,500 660,963 214,812,824 Software and licences 34,251 11,131,527 77,192 25,087,397 Vaccine logistics and supply chain strengthening 290,493 94,410,071 - - Performance bonus (NERICC and SERICC) 124,615 40,500,000 322,872 104,933,250 Operational logistics support (RIOs) 148,385 48,225,000 135,068 43,897,000 Monitoring and evaluation 32,081 10,426,413 - - Mock vaccine audit 744,178 241,857,775 - - Environmental and social management plan 16,847 5,475,360 - - Technical assistants - SERICC 304,252 98,881,943 499,971 162,490,475 Vaccine management training 73,079 23,750,536 54,318 17,653,473 Local training - - 3,853 1,252,137 Local transport and travels 10,700 3,477,520 41,543 13,501,571 Insurance 110,347 35,862,750 - - Repairs and maintenance 1,846 600,000 - - Stationeries 6,050 1,966,100 1,643 533,950 Servicing of meeting 12,166 3,953,790 4,646 1,510,000 World bank mission - - 5,400 1,754,910 Advert and publicity 12,107 3,934,789 2,869 932,400 Printing of documents 4,395 1,428,500 6,741 2,190,800 Audit fees 7,692 2,500,000 - - Audit expenses 4,366 1,419,000 - - Communication 600 195,000 - - Bank charges 583 189,523 370 120,325 Other cost 2,074 674,124 - - 3,514,265 1,142,136,221 1,817,448 590,670,513 (Deficit)/surplus of receipts over payments (3,116,169) (1,012,754,999) 3,192,380 1,037,523,446 Cash and cash equivalent as at 1 January 3,192,380 1,037,523,446 - - Cash and cash equivalent as at 31 July / 31 December 76,211 24,768,447 3,192,380 1,037,523,446 Represented by: Special account 53,490 17,384,250 3,007,602 977,470,709 Draw down account 22,721 7,384,197 184,778 60,052,737 Bank balance 76,211 24,768,447 3,192,380 1,037,523,446 NPHCDA/NPESP 2021 FINANCIAL STATEMENTS IDA CREDIT - 62890 14