TRANSMISSION COMPANY OF NIGERIA NIGERIA ELECTRICITY AND GAS IMPROVEMENT PROJECT ANNUAL REPORTS AND ACCOUNTS FOR THE PERIOD ENDED

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1 ANNUAL REPORTS AND ACCOUNTS FOR THE PERIOD ENDED 3 1sT DECEMBER, 2015.

2 CONTENTS Page Content 1 Project Management Team 2 Report of Auditors 3-4 Statement of Accounting Policies 5 Balance Sheet 6 Receipt and Payment Account 7 Cash flow Statements 8 Notes to the Financial Statements 9-11 Special Account Reconciliation Statement 12 Fixed Asset Schedule

3 PROJECT MANAGEMENT TEAM ENGR. JOSEPH A. CIROMA Head PMU/General Manager ENGR. SOLOMON UYOKO Coordinator (Transmission) ENGR. ADEBAYO DOKUNMU Coordinator (Distribution) ENGR. OLORUNLEKE PETER Procurement Officer (NEGIP) ENGR. AKINKUNMI ADEGUWA Coordinator (Civil/WRDSEM) MRS. COMFORT SAKO Coordinator (Environmental & Safety) MR. IFEANYI EZEUKWU Head Human Resources MR. ANDREW E. OFOMA3A Project Accountant BANKERS Diamond Bank Plc PROJECT AUDITORS HARUNA YAHAYA & CO. (Chartered Accountants) Ahmadu Bello House Shiroro Road P.0 Box 2994 Minna, Niger State Tel:

LUIWIMx VLUOU1 b~ B~EG (Chartered Accountants & Tax Practitio ners) www.harunayahaya.org e-mail: infohq@harunayahaya.

4 LUIWIMx VLUOU1 b~ B~EG (Chartered Accountants & Tax Practitio ners) CORPORATE HEAD OFFICE: ABUJA OFFICE: LAGOS OFFICE: KADUNA OFFICE: Ahmadu Bello House, No. 20, Victoria Ironsi Crescent, No. 10, Tafawa Balewa Crescent 4th Floor, Hamza Zayyad House, Shiroro Road, Gwarinpa II Estate, Abuja. Off Adediran Ogunsanya Street, No. 4, Muhammadu Buhari Way, PO. Box 2994, Minna. Tel: P 0. Box 3043, Surulere, Logos R 0. Box 8607, Kaduna. Tel: Tel: Tel: The General Manager, June 13, 2016 Project Management Unit, Transmission Company of Nigeria, Nigeria Electricity and Gas Improvement Project, No. 7, Hombori Street, Off AdemolaAdetokunbo Crescent, Wuse 2, Abuja. Dear Sir, REPORT OF THE AUDITORS ON THE FINANCIAL STATEMENTS OF THE TRANSMISSION COMPANY OF NIGERIA, () FOR THE YEAR ENDED 31s DECEMBER, 2015 (CREDIT NO.4620-UNI) Report on the Project Financial Statements We have audited the accompanying project financial statements of the World-Bank Assisted Transmission Company of Nigeria (Nigeria Electricity and Gas Improvement Project), as at December 31, 2015 (for the period lst January 2015 to 31s December, 2015) as set out on pages 6 to 13 and prepared on the basis of the accounting policies on page 5. The project is financed by the IDA, credit number 4620-UNI. Respective Responsibilities of the Project Management Unit and Auditors: The World-Bank Assisted Transmission Company of Nigeria (Nigeria Electricity and Gas Improvement Project), Project Implementation Unit and Project Management Unit coordinate the activities of the project and are as such responsible for the preparation of the financial statements. It is our responsibility as auditors to express an independent opinion, based on our audit, on the financial statements and to report our opinion to you. Basis of Opinion We conducted our audit in accordance with the Nigerian and International Standards on Auditing and World Bank guidelines. These standards and World Bank guidelines require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the estimates and judgments made by the project officers in the preparation of the financial statements, and whether the accounting policies are appropriate to the project circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free of material misstatements, whether caused by fraud, other irregularity or error. In forming our opinion, we also evaluated the overall adequacy of the presentation of the financial statements. 3 Member of the Public Practice Section of ICAN

Opinion In our opinion, the project financial statements give a true and fair view of the financial position and of the cash flow statements of the World-Bank assisted Transmission Company of Nigeria

5 Opinion In our opinion, the project financial statements give a true and fair view of the financial position and of the cash flow statements of the World-Bank assisted Transmission Company of Nigeria (Nigeria Electricity and Gas Improvement Project) for the period ended December 31, 2015, in accordance with the provisions of section 4.01 of the Development Credit Agreement (DCA) and the Statements of Accounting Standards issued by the Financial Reporting Council of Nigeria. The Statement of Expenditure (SOE) are in agreement with the books of accounts, adequate supporting documentation has been maintained to support claims to the World Bank for reimbursements of expenditure incurred and which expenditure are eligible for financing under the credit agreement. The Statement of Special Account: (SA) of the project on page 12 have been prepared on the basis of cash deposits and withdrawals for the purpose of complying with the credit agreement and did show a true and fair view of the beginning and ending balances and the account activity for the period ended 3 1 st December Wruk~na N. Yahaya, FCA FRC/2013/ICAN/ Minna, Nigeria For: Haruna Yahaya & Co. June 13, 2016 Chartered Accountants 4

6 STATEMENT OF ACCOUNTING POLICIES FOR THE YEAR ENDED 3 1 st DECEMBER, 2015 The following are the significant accounting policies adopted by World-Bank assisted Transmission Company of Nigeria (Nigeria Electricity and Gas Improvement Project) in preparing its project's financial statements. ACCOUNTING CONVENTION The accounts were prepared under the historical cost convention. BASIS OF ACCOUNTING The cash basis is adopted in the preparation of the project's financial statements. Income and charges relating to a specific financial year are taken into account only when the related cash are received or paid for. PRESENTATION OF THE PROJECT FINANCIAL STATEMENTS Details of general and specific funds are disclosed by way of notes in the Project Financial Statements of the Nigeria Electricity and Gas Improvement Project. DEPRECIATION No depreciation charge has been brought into the accounts as fixed assets are stated at cost in the Balance Sheet. INCOME Income from interest on current and fixed/call deposit accounts were recognized when the current account is credited while income from other sources are credited when cash is received. DEVELOPMENT EXPENDITURE Capital expenses that are directly related to the Project for which the credit was granted were capitalized to form part of development Expenditures through which the main activities of the PMU are reported. FOREIGN CURRENCIES Transactions in foreign currencies are converted into Naira at the rates of exchange ruling at the date of each transaction. Balance in foreign currencies are translated into Naira at the exchange rates ruling at the balance sheet date and gains or losses arising on translation are credited to or charge to reserve in the period which they arise. 5

7 BALANCE SHEET AS AT 31T DECEMBER, 2015 ASSETS NOTES N Bank Balances 1 2,387,455,136 2,295,378,728 Project Development Expenditure: Fixed Assets 2 134,317, ,913,481 Goods and Works 3 14,746,695,714 12,749,386,082 Consultancy Services 4 789,040, ,064,133 Capacity Building and Training 5 1,628,852,783 1,153,559,386 Operating Cost 6 845,214, ,086,285 TOTAL ASSETS 20,531,575,848 17,572,388,095 FINANCED BY: IDA Credit Loan Account 7 20,531,575,848 17,572,388,095 TOTAL LIABILITIES 20,531,575,848 17,572,388,095 Head PMU/General Manager Project Accountant 6

8 RECEIPTS AND PAYMENTS ACCOUNTS FOR THE YEAR ENDED 31T DECEMBER RECEIPTS N N IDA Credit Loan Account 2,959,187,753 8,254,243,405 Interest Received on Special Account 2,422,990 5,693,898 Sales on Tender 135, ,000 TOTAL RECEIPTS 2,961,745,743 8,260,673,303 PAYMENTS Project Development Expenditure: Fixed Assets 7,404, ,327,550 Goods and Works 1,997,309, ,299,056,561 Consultancy Services 213,976, ,149,178 Capacity Building and Training 475,293, ,596,970 Operating Cost 173,127, ,164,316 TOTAL PAYMENTS 2,867,111,344 5,965,294,575 Excess/(Deficit) of Receipts over Payments 94,634,399 2,295,378,728 7

9 CASHFLOW STATEMENT FOR THE YEAR ENDED 31T DECEMBER Operating Activities Adjustment for changes in operating Assets Cashflow from Operating Activities Investment Activities: Project Development Expenditure: Fixed Assets (7,404,245) (2,327,550) Goods and Works (1,997,309,632) (5,299,056,561) Consultancy Services (213,976,285) (307,149,178) Capacity Building and Training (475,293,397) (91,596,970) Operating Cost (173,127,785) (265,164,316) Cashfiow used in Investing activities (2,867,111,344) (5,965,294,575) Financing Activities: IDA Credit Loan Account 2,959,187,753 8,135,668,552 Other Income 2,557,990 Cashflow from Financial Activities 2,961,745,743 8,135,668,552 Net Cash/Cash Equivalent 94,634,399 2,170,373,977 Opening Cash Balance 2,295,378, ,004,751 Prior Year Adjustment (2,557,990) Closing cash balances as the end of the year 2,387,455,136 2,295,378,728 Represented by: 0 Diamond Bank Plc, Special account- IDA 0 2,285,601,260 Diamond Bank Plc, Draw down account 0 19,194 Diamond Bank Plc, Interest on Special account 0 6,254,816 Diamond Bank Plc, Auxiliary account 0 3,503,458 Treasury Single Account (TSA) 2,387,455,136 0 TOTAL 2,387,455, ,378,728 8

10 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 3 1s' DECEMBER Bank Balances Diamond Bank Plc, Special account- IDA 0 2,285,601,260 Diamond Bank Plc, Draw down account 0 19,194 Diamond Bank Plc, Interest on Special account 0 6,254,816 Diamond Bank Plc, Auxiliary account 0 3,503,458 Treasury Single Account (TSA) 2,387,455, ,387,455,136 2,295,378,728 2 Fixed Assets N N Opening balance 126,913, ,585,931 For the year 7,404,245 2,327,550 Breakdown of Fixed Assets 134,317, ,913,481 Motor Furniture & Office Total Vehicles Fittings Equipments N N N N 1/1/ ,582,690 19,791,176 26,539, ,913,481 Addition 0 1,897,295 5,506,950 7,404,245 Disposal 31/12/ ,582,690 21,688,471 32,046, ,317, N N 3 Goods and Works Opening Balance 12,749,386,082 7,450,329,521 for the year 1,997,309,632 5,299,056,561 14,746,695,714 12,749,386,082 9

11 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST DECEMBER Consultancy Services N N Opening Balance 575,064, ,914,955 for the year 213,976, ,149, ,040, ,064,133 5 Capacity Building and Training Opening Balance 1,153,559,386 1,061,962,416 for the year 475,293,397 91,596,970 1,628,852,783 1,153,559,386 6 Operating Cost Opening Balance for the year: 672,086, ,921,969 Insurance expenses 1,102, ,907,494 Advert placements 9,274, ,564,796 Postage and Courier 1,110, ,028,997 Fueling of official car 3,740, ,766,832 Repair and Maintenance 15,198,265 28,790,815 Rent 0 61,111,111 Utilities 1,604,264 1,913,431 ICT Maintenance fee 16,906,074 2,902,488 Solid/liquid waste 710, ,300 Traveling and tour 44,024,088 85,177,797 Salaries and wages 12,602,852 10,888,947 Printing and Stationeries 2,863,202 1,674,389 Telephone Expenses 326,457 6,201,002 Duties and others 44,495,127 39,705,180 Audit/Professionals fees 3,521,374 3,521,374 Bank charges 7,736,609 5,499,363 Entertainment 7,911, ,214, ,086,285 10

12 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER IDA Credit Loan Amount Opening Balance 17,572,388,095 9,436,719,543 for the year 2,959,187,753 8,135,668,552 20,531,575,848 17,572,388,095 11

13 STATEMENT OF SPECIAL ACCOUNT-DOLLAR FOR THE PERIOD ENDED 31ST DECEMBER, 2015 IDA CREDIT NO, UNI IDA CREDIT NO UNI. Account Transfered to Treasury Single Account (TSA) US DOLLAR 1 Amount advance by IDA 119,784, In form of replenishment and direct payments (22/10/10-31/12/15) 2 Interest received on IDA Special Account (22/10/10-31/12/15) 43,388 3 Present outstanding amount to the Special Account as at 31/12/15 119,827, Closing Balance transfer from IDA Special Account to TSA Account as per Bank 12,106, statement 5 Add: Amount of eligible expenditures paid and documented in 107,689, withdrawal applications. Bank Charges 31, Total Advance Accounted for 119,827,

14 SCHEDULE OF PROJECT FIXED ASSETS MOTOR FURNITURE AND S/NO. DESCRIPTION VEHICLES FITTINGS OFFICE EQUIPMENTS TOTAL N N N N 1 Procurement of office tables and chairs 85,000 85, fair light drawer cabinet 100, ,000 3 Laser printer, photocopier, scanner, steel 972, ,800 cabinet with glass doors (2), steel cabinet with steel doors (5) HP Split Unit (2) 160, , HP Split Unit (2) 138, , HP NCS (second wing) 181, , HP NCS (Accounts office) 191, , HP Panasonic Split A/C and Computer 175, ,000 system 9 HP Desktop System (14gb,320 hdd,hp '19 flat 194, ,250 screen monitor) 10 HP Colour Laser JetCP6015XH,5200DTN 4,229,875 4,229,875 (2),CP3525(2),HP PANASONIC A/C 11 Toyota Land Cruiser Prado and Toyota Hilux (2) 24,638,250 24,638, Office Chairs for PMU Office 140, , Toyota Hilux Pick up 5,333,333 5,333, Toyota Hilux Pick up 5,333,333 5,333, Toyota Hilux Pick up 5,333,333 5,333, Toyota Hilux Pick up 5,333,333 5,333,333 7 Toyota Hilux Pick up 5,333,333 5,333, Toyota Hilux Pick up 5,333,333 5,333, Toyota Corolla 4,888,888 4,888, Toyota Corolla 4,888,888 4,888, Toyota Prado 14,166,666 14,166, HP LaserJet printer 41,000 41, Laptop computer 320, , Projector 70,000 70, LG TV 32 CS410 and LG Bracket 32 Universal 71,050 71, Haier Thermocool fridge Model No:HR135A 53,000 53, HP Desktop computer, 1. Levono Think 324, ,750 centre edge and 1.1.5KVA UPS mercury. 28 4No. Desktop computer Levono Think, 1.5KVA 1,311,000 1,311,000 UPS, Microsoft office 2010 (10) and (1) Scanner Dell Inspiron Laptop, 1. Ms-office , , Multipurpose Industrial photocopy/printer with 6,701,965 6,701,965 full accessories 31 Office filling cabinet 45,000 45,000 Sub-Total 80,582, ,800 15,545,390 96,353,880 13

15 Balance b/f 80,582, ,800 15,545,390 96,353, Office Tea Utensils 85,000 85, El PR1 Channel 400, , m Excutive Chair 660, , Chairs 22,600 22, GSM Wireless Desk Phone 30,000 30, Office Chairs 380, , Dining set 280, , Executive Chairs 750, , Office Tables 220, , Television 60,000 60, TV 60,000 60, TV Stand 31,000 31, Waste Basket 171, , TV 120, , Fabrication and installation of Diesel Tank 170, , Office Equipment 29,500 29, Water Pump 28,400 28, Fire Fighting Equipment 978, , KVA Generating Set 7,077,263 7,077, Office furniture 12,344,300 12,344, Office furniture 4,023,476 4,023, Laptop 309, , Supply of 3no. Industrial Air Condition 641, , Installation of Air condition 150, , Supply and installation 105, , Supply and installation 344, , Supply & Inst. Air 105, , Proc. Of Refrigenerator 52,000 52, Supply of Chairs 795, , Replacement of Faulty lenovo desktop 45,000 45, Replacement of official Chair 90,000 90,000 Sub-Total ,690 19,791,176 26,539, ,913,481 14

16 Balance B/F 80,582,690 19,791,176 26,539, ,913, Projector/ Presentation Remote Control 33, , Projector/ Screen & Monitoring Accessories 750, , HP standing A/C 242, , CISCO Layer 3Switches 1,560, ,560, Voice Technology Reveiwer 1,541, ,541, Photocopier 520, , UPS (650) at TSP 860, , Nos Chairs 1,111, ,111, Construction of File Cabinet 785, ,795 TOTAL 80,582,690 21,688, ,046, ,317,726 15

TRANSMISSION COMPANY OF NIGERIA NIGERIA ELECTRICITY AND GAS IMPROVEMENT PROJECT ANNUAL REPORTS AND ACCOUNTS FOR THE PERIOD ENDED

Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized TRANSMISSION COMPANY OF NIGERIA ANNUAL REPORTS AND ACCOUNTS FOR THE PERIOD ENDED 3 1T DECEMBER, 2016. Public Disclosure