Public Disclosure Authorizeddocuments.worldbank.org/curated/en/... · WORLD WIDE FUND FOR NATURE...

WORLD WIDE FUND FOR NATURE

HWANGE SANYATI BIOLOGICALCORRIDOR PROJECT (40000419)

FUNDED BY GLOBAL ENVIRONMENT FACILITYVIA WORLD BANK GRANT NUMBER TF017713

FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018

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WIDE FUND FOR NATUREHWANGE SANYATI BIOLOGICAL CORRIDOR PROJECT (40000419)FUNDED BY GLOBAL ENVIRONMENT FACILITY VIA WORLD BANK GRANT NUMBER TF017713

PROJECT FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018

ContentsPage

Project information 3

Statement of management's responsibility 4

Report of the independent auditor 5-6

Statement of project funds 7

Statement of income and expenditure 8

Statement of changes in funds 9

Statement of cash flows 10

Summary of statement of expenditure's (SOE's) submitted 11-12

Notes to the financial statements 13

Summary of expenditure by component 14

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WORLD WIDE FUND FOR NATUREHWANGE 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 auspicesof a Memorandum of Understanding signed with The Government of the Republic of Zimbabwe on 15 May2003.

NATURE OF PROJECT ACTIVITIES

The Government of Zimbabwe has prepared a proposal to the Global Environment Facility (GEF) fora Hwange-Sanyati Biological Corridor (HSBC) project, now under implementation with the World Bankas GEF implementing agency and WWF as Project Implementing Entity. The Project's objective is todevelop the technical and institutional tools for the sustainable management of HSBC. The project willsupport the following:

(i) improved management of Hwange National Park as the lynchpin of the Zimbabwean protectedareas 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 toHwange and

(iii) combating land degradation and landscape-level planning within the HSBC to providefor a sustainable, productive and climate resilient corridor area. For the purpose of executingthe project, the World Bank granted to WWF a project grant, TF017713, which became effectiveon 22 January 2015 and ends on 30 June 2019.

COUNTRY DIRECTORDr. Enos Shumba

ADDRESSWWF Zimbabwe Country Office10 Lanark Road, Belgravia, HarareP.O. CY 1409 CausewayZimbabwe

AUDITORSDeloitte & Touche ZimbabweWest Block, Borrowdale Office Park, Borrowdale RoadBorrowdaleP.O. Box 267HarareZimbabwe

LAWYERSChakanyuka and associates11 Churchill AvenueAlexandra ParkHarare

BANKERSStandard Chartered68 Nelson Mandela AvenuePO Box 373Harare

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STATEMENT OF MANAGEMENT'S RESPONSIBILITY

Management is responsible for the maintenance of adequate accounting records and the preparation andintegrity of the annual financial statements and related information. The auditors are responsible forreporting on the fair presentation of the annual financial statements and their report appears on pages 5-6.

Management is also responsible for the entity's systems of internal control. These are designed to providereasonable, but not absolute assurance as to the reliability of the financial statements, and to adequatelysafeguard, verify and maintain accountability for the entity's assets, and to prevent and detectmisstatement and loss. Nothing has come to the attention of management to indicate that any materialbreakdown in the functioning of these controls, procedures and systems has occurred during the periodunder review.

These financial statements have been prepared in accordance with WWF International accounting policiesand procedures and World Bank Guidelines.

The financial statements for the period ended 30 June 2018 set out on pages 7 to 14 were approved bymanagement on 14 December 2018 and signed on its behalf by: -

Country DirectorDr. E. Shumba

Finance ManagerMr. G. Mubaiwa

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PO Box 267 Deloitte & ToucheHarare Registered AuditorsD Zimbabwe West Block

Borrowdale Office ParkBorrowdale RoadBorrowdaleHarareZimbabwe

Tel: +263 (0) 8677 000261+263 (0) 8644 041005

Fax: +263 (0) 4 852130www.deloitte.com

REPORT OF THE INDEPENDENT AUDITORSTO 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 Projectas set out on pages 7 to 14, which comprise the statement of project funds as at 30 June 2018, thestatement of income and expenditure, the statement of changes in funds, the statement of cash flows,statement of expenditures 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 theHwange Sanyati Biological Corridor Project as at 30 June 2018, and its financial performance and its cash flowsfor the year 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 responsibilitiesunder those standards are further described in the Auditor's responsibilities for the audit of the financialstatements section of our report. We are independent of the entity in accordance with the InternationalEthics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) togetherwith the ethical requirements that are relevant to our audit of financial statements in Zimbabwe. We havefulfilled our ethical responsibilities in accordance with these requirements and the IESBA code. We believethat 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

We draw attention to Note 1 to the financial statements, which describes the basis of accounting. Thefinancial statements are prepared by World Wide Fund for Nature for the purpose of fulfilling itsresponsibilities in terms of the project agreement with the World Bank. As a result, the financial statementsmay not be suitable for any other purpose. Our report is solely for World Wide Fund for Nature and theWorld Bank and should not be distributed to or used by any other parties. Our opinion is not modified inrespect of this matter.

Other information

Management is responsible for the other information. The other information comprises the statement ofmanagement's responsibility. The other information does not include the financial statements and ourauditor's report thereon.

Our opinion on the financial statements does not cover the other information and we do not express anaudit opinion or any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other informationand, in doing so, consider whether the other information is materially inconsistent with the financialstatements 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 ofthis auditor's report, we conclude that there is a material misstatement of this other information, we arerequired to report that fact. We have nothing to report in this regard.

A full list of partners and directors is available on request

Associate of Deloitte Africa, a Member of Deloitte Touche Tohmatsu Limited 5

REPORT OF THE INDEPENDENT AUDITORS (CONTINUED)

Responsibilities of management for the financial statements

Management is responsible for the preparation and fair presentation of the financial statements inaccordance with its accounting policies and the World Bank Reporting Regulations guidelines per page 5 andfor such internal control as the Management determine is necessary to enable the preparation of financialstatements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the project's ability tocontinue as a going concern, disclosing, as applicable, matters related to going concern and using thegoing concern basis of accounting unless management either intends to liquidate the project or to ceaseoperations, 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 arefree from material misstatement, whether due to fraud or error, and to issue an auditor's report thatincludes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that anaudit 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 thesefinancial statements.

As part of an audit in accordance with ISA, we exercise professional judgement and maintain professionalscepticism 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 auditevidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detectinga material misstatement resulting from fraud is higher than for one resulting from error, as fraud mayinvolve 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 proceduresthat are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the Project's internal control.

* Evaluate the appropriateness of accounting policies.* 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 orconditions that may cast significant doubt on the Organisation and the Project's ability to continue asa going concern. If we conclude that a material uncertainty exists, we are required to draw attentionin our auditor's report to the related disclosures in the financial statements or, if such disclosures areinadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However, future events or conditions may cause the Organisation and theProject to cease to continue as a going concern

* Evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions and events ina manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scopeand timing of the audit and significant audit findings, including any significant deficiencies in internal controlthat we identify during our audit.

Report on other legal and regulatory requirements

In our opinion, the financial statements have been prepared in accordance with the disclosure requirementsof Private Voluntary Organisations Act (Chapter 17:05) and World Bank Reporting Guidelines..

Deloitte & ToucheRegistered AuditorPer: Stelios MichaelPartnerPAAB Practice Certificate Number 0443Date: Of, ~-Q


STATEMENT OF PROJECT FUNDSAS AT 30 June 2018

2018 2017US$ US$

ASSET

Current assetsPrepaid asset - 70652Cash and cash equivalents 283 605 297 268

Total assets 283 605 367 920

PROJECT FUNDS AND LIABILITIES

FundsRestricted funds 283 605 367 920

Total funds and liabilities 283 605 367 920

Dr. Enos Shumba Godwin MubaiwaCountry Director Finance Manager14 December 2018 14 December 2018

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STATEMENT OF INCOME AND EXPENDITUREFOR THE YEAR ENDED 30 JUNE 2018

CumulativeTotal

2018 2017 2015-201812 months 12 months 42 months

US$ US$ US$SUMMARY OF FUNDS RECEIVEDWorld Bank 1 186 806 1 501 033 4 164 763

SUMMARY OF EXPENDITURE

Goods and non-consultancy services 506 266 559 957 1 607 252Consultancy services 209 113 222 733 674 675Workshops, meetings & consultations 64 872 13 406 121 311Operating costs 490 870 521 840 1 477 920

TOTAL PROJECT COSTS 1 271 121 1 317 936 3 881 158

(DEFICIT)/SURPLUS FOR THE YEAR/PERIOD (84 315) 183 097 283 605

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STATEMENT OF CHANGES IN FUNDSFOR THE YEAR ENDED 30 JUNE 2018

Restricted

FundsUS$

As at 30 June 2016 184 823

Surplus for the period 183 097

As at 30 June 2017 367 920

Deficit for the year (84 315)

As at 30 June 2018 283 605

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STATEMENT OF CASHFLOWSFOR THE YEAR ENDED 30 JUNE 2018

2018 201712 months 12 months

US$ US$

Cash flows from operationsNet (deficit)/surplus for the period (84 315) 183 097

Operating cash flow before working capital movements (84 315) 183 097

Decrease/ (increase) in prepaid assets 70 652 (70 652)

Cash (utilised)/generated from operating activities (13 663) 112 445

Cash and cash equivalents at the beginning of period 297 268 184 823

Cash and cash equivalents at end of the period 283 605 297 268

Comprising:Cash at bank 283 605 297 268

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SUMMARY OF STATEMENT OF EXPENDITURE (SOE) REPORTS SUBMITTED TO WORLD BANKFOR THE 12 MONTH PERIOD ENDED 30 JUNE 2018

2018 2018

Reference - Period to Goods & non Consultancy Training & Operating Total SOE Withdrawalconsultancy workshops expenses applications

servicesUS$ us $

HSBCMAIN-SOE-021 31 July 2017 73 926 18 225 - 72 782 164 933 -

HSBCMAIN-SOE-022 31 Aug 2017 50 206 13 165 24 661 21 770 109 802 406 816

HSBCMAIN-SOE-023 30 Sep 2017 61 469 18 209 25 833 55 673 161 184 161 184

HSBCMAIN-SOE-024 1 Oct to 31 Dec 194 939 67 519 12 933 82 342 357 733 357 7332017

HSBCMAIN-SOE-025 1 Jan to 31 71 915 57 706 1 445 130 008 261 074 -Mar 2018

HSBCMAIN-SOE-026 30 Apr 2018 36 885 16 501 - 4 119 57 505 261 073

HSBCMAIN-SOE-027 1 May to 30 16 926 17 788 - 124 176 158 890 -Jun 2018

TOTAL SOE's SUBMITTED 506 266 209 113 64 872 490 870 1 271 121 1 186 806

During the year, there were no expenses subject to prior review and approval by the World Bank.

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SUMMARY OF STATEMENT OF EXPENDITURE (SOE) REPORTS SUBMITTED TO WORLD BANKFOR THE 12 MONTH PERIOD ENDED 30 JUNE 2017

2017 2017Reference Period to Goods & non Consultancy Training & Operating Total SOE Withdrawal

consultancy workshops expenses applicationsservices

US$ us$

HSBCMAIN-SOE-010 31 July 2016 27 312 15 548 544 31 655 75 059 390 237HSBCMAIN-SOE-011 31 Aug 2016 30 997 15 548 8 837 47 791 103 173 -HSBCMAIN-SOE-012 30 Sep 2016 9 736 17 798 3 926 89 084 120 544 223 717HSBCMAIN-SOE-013 30 Nov 2016 388 505 36 571 99 64 735 489 910 489 910HSBCMAIN-SOE-014 31 Dec 2016 1 140 4 365 - 920 6 425 -HSBCMAIN-SOE-015 31 Jan 2017 9 000 47 583 - 76 819 133 402HSBCMAIN-SOE-016 28 Feb 2017 9 370 16 594 - 31 514 57 478 -HSBCMAIN-SOE-017 31 Mar 2017 53 699 12 459 - 63 062 129 220 326 517HSBCMAIN-SOE-018 30 Apr 2017 5 450 32 285 - 63 954 101 689 -HSBCMAIN-SOE-019 31 May 2017 - 11 240 - 45 131 56 371HSBCMAIN-SOE-020 30 Jun 2017 24 748 12 742 - 7 175 44 665

TOTAL SOE's SUBMITTED 559 957 222 733 13 406 521 840 1 317 936 1 430 381

During the year, there were no expenses subject to prior review and approval by the World Bank.

A total amount of $70 652 was paid directly by the World Bank for the acquisition of a motor vehicle during the period. The vehicles were yet to be received bythe project at year end. This amount was neither recognized in project expenses nor income as the vehicle had not yet been received in line with the policy torecognize revenue on receipt.

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NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018

1. ACCOUNTING POLICIES

Accounting conventionThe financial statements have been prepared under the cash basis of accounting.

Basis of preparationThe financial statements have been prepared on a cash basis in accordance with WWF Internationalaccounting policies and procedures and the World Bank reporting guidelines.

Income and expenditureDonations from World Bank and other income are brought to account on a cash basis. Expenditureis brought to account on a cash basis when the risk and rewards of ownership has passed. Interestincome and donations from individuals and other organizations are brought to account on thereceipts basis.

Foreign currency translationsThe 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 thetransaction. Assets and liabilities in foreign currency are translated at the rates applicable atstatement of project funds date. The exchange differences arising are dealt with in the statementof income and expenditure.

Property, vehicles and equipmentProperty, vehicles and equipment purchased are expensed in full in the year of acquisition. Donatedproperty, vehicles and equipment are not accounted for in the statement of income andexpenditure but are recorded and controlled in a property, vehicles and equipment register.

Payments made directly by the bankPayments for expenditure made directly by World Bank are recognized in income and expenditurewhen they are recognized and confirmed by World Bank as disbursement to the project.

TaxationIn terms of paragraph 2 (e) of the Third Schedule of the Income Tax Act (Chapter 23:06) theorganization's receipts and accruals are exempt from Income Tax.

Cumulative income and expenditureCumulative income and expenditure amounts are the totals received and incurred by the projectfrom the project effective commencement date of 22 January 2015 to the end of the currentfinancial period.

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NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2018

Summary of expenditure by component2018 2018 2015-2018US$ US$ US$

12 Month Actual Cumulativebudget expenditure expenditure

COMPONENT 1: PA management & community livelihoods

Sub-component 1.1: Improve the Management of Hwange National Park 141 000 130 026 567 622Sub-component 1.2: Improve community livelihood through wildlife management 247 000 163 004 505 589

COMPONENT 2: Improved forest & land management

Sub component 2.1: Improve forest & resource management 263 500 256 247 539 951Sub component 2.2: Land rehabilitation 232 000 232 119 614 710

COMPONENT 3: Corridor sustainability 420 000 340 435 1 132 209

COMPONENT 4: Project administration & management oversight 185 255 149 290 521 077

1488755 1271121 3881158

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