Public Disclosure Authorized BD OI -,BD O Ministry of Mineral Resources And Energy ETI- EXTRACTIVE INDUSTRIES TRANSPARENCY INICIATIVE MDTF GRANT NUMBER TFO15142 Maputo Public Disclosure Authorized Independent Auditor's Report Public Disclosure Authorized 01 March 2014 to 30 June 2016 Public Disclosure Authorized
Tel: 258 21 300720 Av. 25 de Setembro no Fax: 258 21325091 1230,30 andar Bloco 5 Email:bdo@bdo.co.mz Maputo-Mogambique www.bdo.co.mz CP 4200 TO MINISTRY OF MINERAL RESOURCES AND ENERGY MAPUTO INDEPENDENT AUDITOR'S REPORT Introduction 1 We have audited the accompanying financial statements of EITI - EXTRACTIVE INDUSTRIES TRANSPARENCY INICIATIVE, financed by World Bank under MDTF (Multi Donors Trust Fund) - Grant no TF015142 set out on pages 3 to 12, for the period from 01 March 2014 to 30 June 2016 and the respective notes. Responsibilities 2 It is the responsibility of the management to prepare the financial statements that fairly present in alt material respects the financial position of the project and the results of its operations as well as the adoption of policies and adequate accounting criteria and the maintenance of an appropriate internal control system. 3 Our responsibility is to express an opinion on these financial statements based on our audit. Scope 4 We conducted our audit in accordance with statements of International Auditing Standards and Word Bank guidelines accepted in Mozambique. Those standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free from material misstatement. An audit includes: (i) examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; (ii) assessing the accounting principles used and significant estimates made by management; (iii) evaluating the overall financial statement presentation in accordance with the generally accepted accounting practice. 5 We believe that our audit provides a reasonable basis for our opinion. BDO Lda., uma empresa de responsabilidade limitada Mogambicana, 6 membro da BDO NUIT 400068038, Sociedade por quotas, Capital social USD 70000 Matricula international Limited, uma empresa Inglesa limitada por garantia, e faz parte da rede 12019 na Conservat6ria do Registo Comercial de Maputo Autoriza5io para internacional de firmas independentes BDO.BDO 6 a marca da rede BDO e de cada uma actividades de Auditoria e Certificagio de Contas por despacho de 27/10/99 das suas firmas membros. de Vice-Ministro de Plano e Finan5as
IBDO MINISTRY OF MINERAL RESOURCES AND ENERGY MDTF GRANT NUMBER TFO15142 Opinion 6 In our opinion the accompanying financial statements fairly present in all material respects the financial position of Special Account of the EITI - MDTF GRANT No TF015142 as at 30 June 2016 and its Sources and Uses of Funds Statements for the year then ended, in accordance with International Accounting Standards. In Addition (i) The statement of the Special Account, as set out on pages 3 to 6, gives a true and fair view of the financial position of the Special Account for the year ended 31 December 2015, in accordance with World Bank Guidelines; and; and (ii) In respect to Statement of Expenditure (SOEs), adequate supporting documentation has been maintained to support claims to the IDA and Grant Fund for reimbursements of expenditures incurred and such expenditures are eligible for financing under the Grant Agreement notf015142. BDO (MOCAMBIQUE), LDA Audit Partner: Abdut Satar A. Hamid Registered Auditor: 01 /CA/OCAM/2012 Maputo, 08 July 2016 Audit Report, for the period from 01 March 2014 to 30 June 2016 2
MDTF GRANT NUMBER TFO15142 STATEMENT OF SOURCES AND USES OF FUNDS FOR THE PERIOD FROM 01 MARCH 2014 TO 30 JUNE 2016 (Amounts expressed in USD) Grant Agreement MDTF NO TF1 5142 Description Notes Grant period Closing Accumulated Accumlate period Opening Balance 0,00 0,00 0,00 0,00 0,00 0,00 Add: Sources of Funds Donor Funds Direct Payments 0,00 0,00 Replenishments of Special Account 4 628 644,00 21 356,00 650 000,00 628 644,00 21 356,00 650 000,00 628 644,00 21 356,00 650 000,00 Less: Uses of Funds Credit Account Payments 0,00 0,00 0,00 Special account payments: 4 578 679,00 59 214,00 637 893,00 578 679,00 59 214,00 637 893,00 Adjustment 0,00 32,00 32,00 578 679,00 59 246,00 637 925,00 Reimbursement to WB 0,00 12 075,00 12 075,00 Closing Cash Balance 49 965,00 (49 965,00) 0,00 3
MDTF GRANT NUMBER TFO15142 STATEMENT OF SOURCES AND USES OF FUNDS FOR THE PERIOD FROM 01 MARCH 2014 TO 30 JUNE 2016 (Amounts expressed in USD) GRANT AGREEMENT MDTF No TF1 5142 Description Notes Closing Accumulated Gran peiod period IDA Grant Receipts Direct payments 0,00 0,00 0,00 Replenishment payments 4 628644,00 21 356,00 650000,00 628 644,00 21 356,00 650 000,00 Payments (1) Consultants services, Goods, Training and workshop, and Operating cost under the project 618352,00 19927,00 638279,00 618 352,00 19 927,00 638 279,00 Un-reconcited differences 0,00 (354,00) (354,00) 618 352,00 19 573,00 637 925,00 Reimbursement to WB 0,00 12075,00 12075,00 618352,00 31 648,00 650000,00 Deficit/Superavit 10292,00 (10292,00) 0,00 4
MDTF GRANT NUMBER TFO15142 STATEMENT OF SOURCES AND USES OF FUNDS FOR THE PERIOD FROM 01 MARCH 2014 TO 30 JUNE 2016 (Amounts expressed in USD) Categories MDTF GRANT N TF15142 Totl GantDisbursementClsn AgreeGant dursng grant osind Accumulated Balance period (1) Consultants services, Goods, Training and workshop, and Operating cost under the project 650000,00 618352,00 19927,00 638279,00 11 721,00 650000,00 618 352,00 19 927,00 638 279,00 11 721,00
STATEMENT OF THE SPECIAL ACCOUNT FOR THE MDTF GRANT TF015142 FOR THE PERIOD FROM 01 MARCH 2014 TO 30 JUNE 2016 (Amounts expressed in USD) Description Notes USD Total Opening balance as at 01 January 2015 0,00 Add: IDA Advances: 0,00 0,00 Application 1001 120 000,00 120 000,00 Previous year payments: 0,00 120 000,00 Current year payments: Application 1003 119 929,00 Application 1005 63 141,00 Application 1006 63 993,00 Application 1007 33 241,00 Application 1010 49 696,00 Application 1011 63400,00 Application 1012 24 095,00 Application 1013 91 149,00 Application 1014 21 356,00 530 000,00 Total Add 650 000,00 Reduce: IDA Replenishments: 0,00 0,00 Current year payments: Application 1002 50462,00 Application 1003 69 468,00 Application 1004 7 908,00 Application 1006 119 226,00 Application 1007 33241,00 Application 1010 52231,00 Application 1011 60865,00 Application 1012 24095,00 Application 1013 91 149,00 Application 1014 70 034,00 Application 1002 46 510,00 Application 1003 12 704,00 637 893,00 Not yet replenished: Unallocated expenses 32,00 Reimbursement to WB 12 075,00 12 075,00 Total reduce: 650 000,00 Balance as at 31 December 2015 0,00 6
NOTES TO THE FINANCIAL STATEMENTS I Introduction The EXTRACTIVE INDUSTRY INITIATIVE (EITI) is a voluntary initiative of character, launched by former Prime Minister of UK, Tony Blair, at the World Summit on Sustainable Development in World elapsed Johannesburg in September 2002, and later, in Conference opening in June 2003, in London, is the fundamental principal verification of what companies pay and what governments receive, through a monitoring process carried out by a joint body that involves the government, companies and civil society. In Mozambique, the extractive industries (mining, oil and natural gas) contribute to significant portion growing and increasingly for Government revenues for development. Under this assumption, the Government of Mozambique joined the EXTRACTIVE INDUSTRY TRANSPARENCY INITIATIVE (EITI) to ensure that revenue and payments related to mining industry are published in a transparent manner. Mozambique became a Country EITI candidate on 15 May 2009. The INITIATIVE EXTRACTIVE INDUSTRY TRANSPARENCY (EITI) was launch at the Summit on Sustainable Development held in Johannesburg in September 2002. The main objective is to allow the Initiative greater transparency around the revenue generation and expenditure of revenues from the extractive industry sector. This objective has primary purpose, improve yields industries mining and reduce the potential for corruption or misuse of such large-scale funds by host governments, and stimulate debate about the uses of these incomes. The initiative encourages governments, extractive companies (public and private), International Agencies and NGOs working in the joint development of a platform of promoting transparency in payments by extractive industries. The initiative requires the regular publication of payments from extractive and Government revenues. To achieve this goal, Boa Et Associates, was commissioned by the EXTRACTIVE INDUSTRY TRANSPARENCY INITIATIVE OF THE REPUBLIC OF MOZAMBIQUE (ITIEM) to perform the aggregation/ reconciliation of payments from the extractive sector revenues and Government for 2008, this is the first report of ITIEM. This report presents the details of aggregation and reconciliation of payments extractive industry and government revenue for the year 2008. The Multi Donors Trust Fund (MDTF) cover the period from March 01, 2014 to December 31, 2015. Additional 06 months was given to use the remain balance as per contract, subsection 3.7. 7
1.1 Percentage of Expenditure Financed By Grant The percentages of expenditures for items to be financed by the Multi Donors Trust Fund (MDTF) are as follows: Categories % of Expenditures to be fnne financed (1) Consultants Services, Goods, Training and Workshop, and Operating Cost under the project 100 % 2 Special account The Development Multi Donors Trust Fund Grant no. TF1 5142 requires that a Special Account in USD is open. The purpose of the Special Account is to pay eligible expenditures. These payments will be subsequently justified to IDA, with the respective documentation or issuance of Statement of Expenditures (SOEs) for replenishment of the Special Account or refunding of the initial deposit. The Special Account was opened at Standard Bank. 8
3 Summary of significant accounting policies 3. 1 Basis of Presentation The Statement of Sources and Uses of Funds, compiled from Project accounting records, are prepared on the cash basis of accounting. On this basis revenue is recognised when received rather than when earned, and expenses are recognised when paid rather than incurred. 3.2 Equipment and Supplies Expenditures relating to equipment and supplies are not recorded as assets in the Statement of Source and uses of Funds, but are controlled through a fixed assets register. 3.3 Advances to Suppliers Advances made to suppliers for future receipts of equipment and materials or services, are registered as expenses and allocated to the respective categories when the cash payment is made even if the receipt of equipment or services has not yet occurred. However, a financial control is maintained over advances and retentions. 3.4 Currency The statement of receipts and payments is expressed in United State Dollars unless otherwise stated. Transactions in other currency are converted to USD at the rate of exchange ruling at the date of the Special Account replenishment. 9
4 Replenishment payments Current year payments GRANT AGREEMENT MDTF No TF15142 Application Requested Replenished Not Replenished (USD) (USD) (USD) Application 1001 120 000,00 0,00 120 000,00 Application 1002 0,00 50462,00 (50 462,00) Application 1003 119 929,00 69468,00 50 461,00 Application 1004 0,00 7 908,00 (7 908,00) Application 1005 63 141,00 0,00 63 141,00 Application 1006 63 993,00 119 226,00 (55 233,00) Application 1007 33 241,00 33 241,00 0,00 Application 1010 49 696,00 52 231,00 (2 535,00) Application 1011 63 400,00 60 865,00 2 535,00 Application 1012 24 095,00 24 095,00 0,00 Application 1013 91 149,00 91 149,00 0,00 Application 1014 21 356,00 70 034,00 (48 678,00) Application 1002 0,00 46 510,00 (46 510,00) Application 1003 0,00 12704,00 (12 704,00) 650 000,00 637893,00 12107,00 10
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6 Closing cash balance The closing balance as at 30 June 2016 is represented by: Banks Description ORIGINAL FUNDS MDTF GRANT No.15142 Special account USD (Standard Bank) 0,00 0,00 Petty cash 0,00 Staff advances 0,00 0,00 Final balance 0,00 7 Approval of financial statements The financial statements were appr Management on of 2016. \ A Project Coordinator: Project Finance: 0 C 12