WORLD WIDE FUND FOR NATURE HWANGE SANYATI BIOLOGICAL CORRIDOR PROJECT (40000419) FUNDED BY GLOBAL ENVIRONMENT FACILITY VIA WORLD BANK GRANT NUMBER TF017713 FINANCIAL STATEMENTS FOR THE EIGHTEEN MONTH PERIOD ENDED 31 DECEMBER 2019 WORLD WIDE FUND FOR NATURE HWANGE SANYATI BIOLOGICAL CORRIDOR PROJECT (40000419) FUNDED BY GLOBAL ENVIRONMENT FACILITY VIA WORLD BANK GRANT NUMBER TF017713 PROJECT FINANCIAL STATEMENTS FOR THE EIGHTEEN MONTH PERIOD ENDED 31 DECEMBER 2019 Contents Pa!ge Project information 3 Statement of management's responsibility 4 Report of the independent auditor 5-7 Statement of project funds 8 Statement of income and expenditure 9 Statement of changes in funds 10 Statement of cash flows 11 Summary of statement of expenditure's (SOE's) submitted 12-13 Notes to the financial statements 14 Summary of expenditure by component 15 2 WORLD WIDE FUND FOR NATURE HWANGE SANYATI BIOLOGICAL CORRIDOR PROJECT (400000419) FUNDED BY GLOBAL ENVIRONMENT FACILITY VIA WORLD BANK GRANT NUMBER TF017713 World Wide Fund for Nature (WWF) is a nonprofit making Swiss foundation operating under the auspices of a Memorandum of Understanding signed with The Government of the Republic of Zimbabwe on 15 May 2003. NATURE OF PROJECT ACTIVITIES The Government of Zimbabwe has prepared a proposal to the Global Environment Facility (GEF) for a Hwange-Sanyati Biological Corridor (HSBC) project, now under implementation with the World Bank as GEF implementing agency and WWF as Project implementing Entity. The Project's objective is to develop the technical and institutional tools for the sustainable management of HSBC. The project will support the following: (i) improved management of Hwange National Park as the lynchpin of the Zimbabwean protected areas system and a vital connector between the HSBC and the broader Kavango Zambezi (KAZA) trans-boundary conservation area; (ii) sustainable forestry and community resource management in the selected areas connected to Hwange and (iii) combating land degradation and landscape-level planning within the HSBC to provide for a sustainable, productive and climate resilient corridor area. For the purpose of executing the project, the World Bank granted to WWF a project grant, TF017713, which became effective on 22 January 2015 and ended on 31 December 2019. COUNTRY DIRECTOR Dr. Enos Shumba ADDRESS WWF Zimbabwe Country Office 10 Lanark Road, Belgravia, Harare P.O. CY 1409 Causeway Zimbabwe AUDITORS Deloitte & Touche Zimbabwe West Block, Borrowdale Office Park, Borrowdale Road Borrowdale P.O. Box 267 Harare Zimbabwe LAWYERS Chakanyuka and associates 11 Churchill Avenue Alexandra Park Harare Zimbabwe BANKERS Standard Chartered 68 Nelson Mandela Avenue PO Box 373 Harare Zimbabwe 3 WORLD WIDE FUND FOR NATURE HWANGE SANYATI BIOLOGICAL CORRIDOR PROJECT (40000419) FUNDED BY GLOBAL ENVIRONMENT FACILITY VIA WORLD BANK GRANT NUMBER TF017713 STATEMENT OF MANAGEMENT'S RESPONSIBILITY Management is responsible for the maintenance of adequate accounting records and the preparation and integrity of the annual financial statements and related information. The auditors are responsible for reporting on the fair presentation of the annual financial statements and their report appears on page 5-7. Management is also responsible for the entity's systems of internal control. These are designed to provide reasonable, but not absolute assurance as to the reliability of the financial statements, and to adequately safeguard, verify and maintain accountability for the entity's assets, and to prevent and detect misstatement and loss. Nothing has come to the attention of management to indicate that any material breakdown in the functioning of these controls, procedures and systems has occurred during the period under review. These financial statements have been prepared in accordance with WWF International accounting policies and procedures and World Bank Reporting Guidelines. The financial statements for the period ended 31 December 2019 set out on pages 8 to 15 were approved by management on 25 August 2020 and signed on its behalf by: - Country Director Dr. E. Shumba Finance Manager Mr. G. Mubaiwa 4 PO Box 267 Deloitte & Touche Harare Registered Auditors Zimbabwe West Block D elo tte,Borrowdale Office Park Borrowdale Road Borrowdale Harare Zimbabwe Tel: +263(0) 8677 000261 +263 (0) 8644 041005 Fax: +263 (0) 4 852130 www.deloitte.com REPORT OF THE INDEPENDENT AUDITORS TO THE DIRECTOR GENERAL OF WORLD WIDE FUND FOR NATURE (WWF) INTERNATIONAL HWANGE SANYATI BIOLOGICAL CORRIDOR PROJECT (40000419) FUNDED BY GLOBAL ENVIRONMENT FACILITY VIA WORLD BANK GRANT NUMBER TF017713 Report on the Audit of the Financial Statements Opinion We have audited the accompanying financial statements of the Hwange Sanyati Biological Corridor Project as set out on pages 8 to 15, which comprise the statement of project funds as at 31 December 2019, the statement of income and expenditure, the statement of changes in funds, the statement of cash flows, and statement of expenditures for the eighteen month period then ended and a summary of significant accounting policies and other explanatory notes. In our opinion, the financial statements present fairly, in all material respects, the financial position of the Hwange Sanyati Biological Corridor Project as at 31 December 2019, and its financial performance and its cash flows for the eighteen month period then ended in accordance with its accounting policies and the World Bank Reporting Guidelines. 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 entity in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of financial statements in Zimbabwe. We have fulfilled our ethical responsibilities in accordance with these requirements and the IESBA code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of matter Basis of accounting and restriction on distribution and use Without modifying our opinion, we would like to draw attention to the fact that the financial statements have been prepared in accordance with instructions stipulated by World Bank Reporting Guidelines. The financial statements have been prepared by World Wide Fund for Nature for the purpose of fulfilling a requirement imposed by the World Bank. Therefore, the financial statements are not likely to be suitable for any other purpose. Our report is intended only for World Wide Fund for Nature and should not be distributed to any party other than World Wide Fund for Nature and the World Bank. Going Concern Without modifying our opinion, we also would like to draw your attention to note 4 of these financial statements which refers to the going concern of the Hwange Sanyati Biological Corridor project. We have taken note that this is the last year of the project therefore the project will not be a going concern for the next 12 months. Other information Management is responsible for the other information. The other information comprises the statement of management's responsibility. The other information does not include the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and we do not express an audit opinion or any form of assurance conclusion thereon. 5 REPORT OF THE INDEPENDENT AUDITORS (CONTINUED) Other information (Continued) 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 on the other information that we obtained prior to the date of this auditor's report, 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. Responsibilities of the Executive Committee for the financial statements The Management is responsible for the preparation and fair presentation of the financial statements in accordance with its accounting policies and the World Bank Reporting Regulations guidelines per page 4 and for such internal control as the Management determine 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, the Executive Committee 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 the Executive Committee either intends to liquidate the project or to cease operations, or has no realistic alternative but to do so. 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 ISA 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 ISA, we exercise professional judgement and maintain professional scepticism 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's internal control. * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. * Conclude on the appropriateness of the directors' 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 Organisation and the Project's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related 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 Organisation and 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 a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 6 REPORT OF THE INDEPENDENT AUDITORS (CONTINUED) Report on other legal and regulatory requirements In our opinion, the financial statements have been prepared in accordance with the disclosure requirements of Private Voluntary Organisations Act (Chapter 17:05) and World Bank Reporting Guidelines. Deloitte & Touche Registered Auditor Per: Stelios Michael Partner PAAB Practice Certificate Number 0443 Date: 7 WORLD WIDE FUND FOR NATURE HWANGE SANYATI BIOLOGICAL CORRIDOR PROJECT (40000419) FUNDED BY GLOBAL ENVIRONMENT FACILITY VIA WORLD BANK GRANT NUMBER TF017713 STATEMENT OF PROJECT FUNDS AS AT 31 DECEMBER 2019 DECEMBER JUNE 2019 2018 US$ US$ ASSET Current assets Cash in Designated Bank Account 2 67 985 283 605 Total assets 67 985 283 605 PROJECT FUNDS AND LIABILITIES Funds Restricted funds 38 283 605 Current Liabilities Payables 3 67947 Total funds and liabilities 67 985 283 605 Dr. Enos Shumba Godwin Mubaiwa Country Director Finance Manager 25 August 2020 25 August 2020 8, WORLD WIDE FUND FOR NATURE HWANGE SANYATI BIOLOGICAL CORRIDOR PROJECT (40000419) FUNDED BY GLOBAL ENVIRONMENT FACILITY VIA WORLD BANK GRANT NUMBER TF017713 STATEMENT OF INCOME AND EXPENDITURE FOR THE PERIOD 01 JULY 2018 TO 31 DECEMBER 2019 Cumulative December June Total 2019 2018 2015-2019 18 months 12 months 60 months US$ US$ US$ SUMMARY OF FUNDS RECEIVED World Bank 1480236 1186806 5645000 SUMMARY OF EXPENDITURE Goods and non-consultancy services 643 158 506 266 2 250 410 Consultancy services 441 922 209 113 1 116 598 Workshops, meetings & consultations - 64872 121312 Operating costs 678 723 490 870 2 156 642 TOTAL PROJECT COSTS 1763803 1271121 5644962 (DEFICIT)/SURPLUS FOR THE PERIOD (283 567) (84 315) 38 9 WORLD WIDE FUND FOR NATURE HWANGE SANYATI BIOLOGICAL CORRIDOR PROJECT (40000419) FUNDED BY GLOBAL ENVIRONMENT FACILITY VIA WORLD BANK GRANT NUMBER TF017713 STATEMENT OF CHANGES IN FUNDS FOR THE PERIOD 01 JULY 2018 TO 31 DECEMBER 2019 Restricted Funds US$ As at 01 July 2017 367 920 Net Deficit for the year (84315) Accumulated Surplus at 30 June 2018 283 605 Net Deficit for the period (283 567) Accumulated Surplus at 31 December 2019 38 10 WORLD WIDE FUND FOR NATURE HWANGE SANYATI BIOLOGICAL CORRIDOR PROJECT (40000419) FUNDED BY GLOBAL ENVIRONMENT FACILITY VIA WORLD BANK GRANT NUMBER TF017713 STATEMENT OF CASHFLOWS FOR THE PERIOD 01 JULY 2018 TO 31 DECEMBER 2019 December June 2019 2018 18 months 12 months US$ US$ Cash flows from operations Net deficit for the period/year (283 567) (84 315) Operating cash flow before working capital movements (283 567) (84 315) Decrease in prepaid assets - 70652 Increase in Payables 67 947 Cash utilized in operating activities (215 620) (13 663) Cash and cash equivalents at the beginning of period 283 605 297 268 Cash and cash equivalents at end of the period 67 985 283 605 Comprising: Cash at bank 67 985 283 605 11 WORLD WIDE FUND FOR NATURE HWANGE SANYATI BIOLOGICAL CORRIDOR PROJECT (40000419) FUNDED BY GLOBAL ENVIRONMENT FACILITY VIA WORLD BANK GRANT NUMBER TF017713 SUMMARY OF STATEMENT OF EXPENDITURE (SOE) REPORTS SUBMITTED TO WORLD BANK FOR THE 18 MONTH PERIOD ENDED 31 DECEMBER 2019 2019 2019 Reference Period to Goods & non Consultancy Training & Operating Total SOE Withdrawal consultancy Workshops expenses applications services US$ US $ HSBCMAIN-SOE-028 31 July 2018 23 750 33002 - 172 635 229 396 216 395 HS8CMAIN-SOE-029 30 Sept 2018 89 528 55 184 61843 206 555 150 000 HSBCMAIN-SOE-030 30 Nov 2038 14 228 49 502 - 40668 104 398 390 349 Direct payments 31 Jan 2019 158 139 HSBCMAIN-SOE-031 1 Jan to 31 Mar 21 234 633 73478 - 195 349 503 460 311 353 HSBCMAIN-SOE-032 30 Apr 2019 17 646 - 17 155 34 801 185075 Direct payments 28 May 2019 - - - 68925 HSBCMAIN-SOE-033. 31 May2019 B5049 51173 - 96979 233201 HSBCMAIN-SOE-034 30)un 2019 43887 33792 29694 107372 HSBCMAIN-SOE-035 31 Jul 2019 32 119 36711 1033 69863 HSBCMAIN-SOE-036 30 Sept 2019 2 376 5400 72701 80477 01 Oct to 30 HS13CMAIN-SOE-037 Nov 2019 46855 18 027 - 12811 77693 - HSBCMAIN-SOE-038 31 Dec 2019 01 Jan to 30 2698 32611 - 12206 47515 - lSBCMAIN-SOE-039 Apr 2020 50378 53044 - (34 350) 69073 - TOTAL SOE's SUBMITTED 643 IS8 441 922 674 723 1763803 1480236 Ouring the year, there were no expenses subject to prior review and approval by the World Bank. HS8CMAIN-SOE-039 relates to contracted expenditures accrued at 33 December 2019 that were settled during the period 01 Jan 2020 to 30 April 2020 12 WORLD WIDE FUND FOR NATURE HWANGE SANYATI BIOLOGICAL CORRIDOR PROJECT (40000419) FUNDED BY GLOBAL ENVIRONMENT FACILITY VIA WORLD BANKGRANT NUMBER TF017713 SUMMARY OF STATEMENT OF EXPENDITURE SOEI REPORTS SUBMITTED TO WORLD BANK FOR THE YEAR ENDED 30 JUNE Z018 2018 2018 Reference Period to Goods & non Consultancy Training & Operating Total SOE Withdrawal consultancy Workshops expenses applications services US$ US$ HSBCMAIN-SOE-O21 31 July 2017 73926 18225 - 72782 164 933 - NSBCMAIN-SOE-022 31 Aug 2017 50206 1316S 24661 21770 109802 406816 HSBCMAIN-SO-023 30 Sep 2017 61469 18 209 25 833 55 673 161 184 161184 HSBCMAIN-SOE-024 1 Oct to 31 Dec 194939 67519 12 933 82342 357 733 357 733 2017 HSBCMAIN-SOE-025 1 an to 31 Mar 71915 57706 1445 130008 261074 - 2018 HSBCMAIN-SOE-026 30 Apr 2018 36 885 16501 - 4119 57505 261073 ISBCMAIN-SOE-027 1 May to 30 16926 17788 124 176 158 890 - Jun 2018 TOTAL SOE's SUBMITTED 506 266 209 113 64872 490 870 1 271121 1 186806 During the year, there were no expenses subject to prior review and approval by the World Bank. 13 WORLDWIDE FUND FOR NATURE HWANGE SANYATI BIOLOGICAL CORRIDOR PROJECT (40000419) FUNDED BY GLOBAL ENVIRONMENT FACILITY VIA WORLD BANK GRANT NUMBER TF017713 NOTES TO THE FINANCIAL STATEMENTS FOR THE EIGHTEEN MONTH PERIOD ENDED 31 DECEMBER 2019 1. ACCOUNTING POLICIES Accounting convention The financial statements have been prepared under the cash basis of accounting. As a result of these financial statements covering last financial reporting period of the project, the accrual basis of accounting was also used in accounting for expenditure in order to meet the objectives of the project Basis of preparation The financial statements have been prepared on a cash basis in accordance with WWF International accounting policies and procedures and the World Bank reporting guidelines. As a result of these financial statements covering last financial reporting period of the project, the accrual basis of accounting was also used in accounting for expenditure in order to meet the objectives of the project. Income and expenditure Donations from World Bank and other income are brought to account on a cash basis. Expenditure is brought to account on a cash basis when the risk and rewards of ownership has passed. Interest income and donations from individuals and other organizations are brought to account on the receipts basis. Foreign currency translations The functional currency of the project is the United States Dollar (US$). Transactions in foreign currency are converted at the exchange rates applicable at the time of the transaction. Assets and liabilities in foreign currency are translated at the rates applicable at statement of project funds date. The exchange differences arising are dealt with in the statement of income and expenditure. Property, vehicles and equipment Property, vehicles and equipment purchased are expensed in full in the year of acquisition, Donated property, vehicles and equipment are not accounted for in the statement of income and expenditure but are recorded and controlled in a property, vehicles and equipment register. Payments made directly by the bank Payments for expenditure made directly by World Bank are recognized in income and expenditure when they are recognized and confirmed by World Bank as disbursement to the project. Taxation In terms of paragraph 2 (e) of the Third Schedule of the Income Tax Act (Chapter 23:06) the organization's receipts and accruals are exempt from Income Tax. Cumulative income and expenditure Cumulative income and expenditure amounts are the totals received and incurred by the project from the project effective commencement date of 22 January 2015 to the end of the current financial period. 2. CASH AND CASH EQUIVALENTS December June 2019 2018 US$ us$ Cash at Bank 67985 283605 14 WORLD WIDE FUND FOR NATURE HWANGE SANYATI BIOLOGICAL CORRIDOR PROJECT (40000419) FUNDED BY GLOBAL ENVIRONMENT FACILITY VIA WORLD BANK GRANT NUMBER TF017713 NOTES TO THE FINANCIAL STATEMENTS FOR THE EIGHTEEN MONTH PERIOD ENDED 31 DECEMBER 2019 CASH AND CASH EQUIVALENTS (CONTINUED) The cash at bank balance of US$ 67,985 as at 31 December 2019 was used to settle the payables of US$ 67,947 reported as at the same date. These payments were done between 1 January 2020 and 30 April 2020 which is the period provided by World Bank for settling outstanding obligations at project end. 3. PAYABLES The accounts payables balance relates to several expenses that were accrued for the financial period ended 31 December 2019 which were settled subsequent to year end between 1 January 2020 to 30 April 2020. No balance sheet balances remain at the time of signing these financials. 4. GOING CONCERN This project ended on the 31st of December 2019 and will not continue as the objectives have been met. Summary of expenditure by component 2019 2019 2015-2019 US$ US$ US$ 18 Month Actual Cumulative Budget expenditure expenditure COMPONENT 1: PA management & community livelihoods Sub-component 1.1: Improve the Management of Hwange National Park 90000 69 099 636 721 Sub-component 1.2: Improve community livelihood through wildlife management 144000 159203 664792 COMPONENT 2: Improved forest & land management Sub component 2.1: Improve forest & resource management 526 000 476 175 1016 126 Sub component 2.2: Land rehabilitation 354700 364 208 978918 COMPONENT 3: Corridor sustainability 506 100 513 870 1646080 COMPONENT 4: Project administration & management oversight 179 000 181 248 702 325 1799800 1763803 5644962 15