?IU11 M96e- M7AW-A hC7*&~717 The Federal Democratic Republic of Ethiopia Audit Services Corporation INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS OF ETHIOPIAN MARITIME AFFAIRS AUTHORITY ETHIOPIA TRADE LOGISTICS PROJECT IDA CREDIT NO. 5995-ET We have audited the accompanying financial statements of Ethiopian Maritime Affairs Authority, Ethiopia Trade Logistic Project, financed under IDA credit No. 5995-ET, which comprise the balance sheet as at 7 July 2019, and the statement of sources and uses of funds for the year ended 7 July 2019 and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements Ethiopian Maritime Affairs Authority is responsible for the preparation and fair presentation of these financial statements in accordance with the Ethiopian Government's Manual of the Federal Accounting System which is based on a modified cash basis of accounting, and for such internal control as management determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether financial statements are free from material misstatements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements 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 entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 2 251-011-5515222 Fax 251-011-5513083 E-mail: ASC@ethionet.com 2 5720 251-011-5535012 251-011-5535015. 251-011-5535016 INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS OF ETHIOPIAN MARITIME AFFAIRS AUTHORITY ETHIOPIA TRADE LOGISTICS PROJECT IDA CREDIT NO. 5995-ET (continued) We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the financial position of Ethiopian Maritime Affairs Authority, Ethiopia Trade Logistics Project, financed under IDA credit No.5995-ET, as at 7, July 2019, and of its sources and uses of funds for the year then ended in accordance with the Ethiopian Government's Manual of the Federal Accounting System which is based on a modified cash basis of accounting. Report on Other Requirements As required by the World Bank Guidelines and the terms of reference for financial audit, we report that, to the extent we can assess: a) All external financing has been used in accordance with the conditions of the relevant financing agreement with due attention to economy and efficiency, and only for the purposes for which the financing was provided; b) Goods, works and services financed have been procured in accordance with the relevant financing agreement including specific provisions of the World Bank Procurement Policies and procedures: c) All necessary supporting documents, records and accounts have been maintained in respect of all Project activities; d) Designated account has been maintained in accordance with the provisions of the relevant financing agreement and funds disbursed out of the account, were used only for the purposes intended in the financial agreement; e) National laws and regulations have been complied with, and that the financial and accounting procedures approved for the Project were followed and used; f) The funds disbursed covered expenditures that are eligible for financing under IDA Credit No. 5995-ET; g) There was a clear linkage between the books of account and the financial statements; h) Financial performance of the Project is satisfactory. 2 INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS OF ETHIOPIAN MARITIME AFFAIRS AUTHORITY ETHIOPIA TRADE LOGISTICS PROJECT IDA CREDIT NO. 5995-ET (continued) Furthermore, with respect to the Interim Financial Reports (IFRs) submitted during the period and listed on page 11, in our opinion, i) the reports, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; ii) adequate supporting documentation has been maintained to support the expenditures incurred; and iii) Which expenditures are eligible for financing under IDA Credit No. 5995-ET. 19 November 2019 3 ETHIOPIAN MARITIME AFFAIRS AUTHORITY ETHIOPIA TRADE LOGISTICS PROJECT IDA CREDIT NO. 5995-ET BALANCE SHEET AS AT 7 JULY 2019 Note Birr 7 July 2018 CURRENT ASSETS Cash and bank balances 3 55,626,910 21,809,972 Accounts receivable 4 26,441,004 9517 82,067,914 21,819,489 CURRENT LIABILITIES Accounts payable 5 1,899,153 222 NET CURRENT ASSET REPRESENTED BY FUND BALANCE 6 21.819,2 4 ETHIOPIAN MARITIME AFFAIRS AUTHORITY ETHIOPIA TRADE LOGISTICS PROJECT IDA CREDIT No. 5995-ET STATEMENT OF SOURCES AND USES OF FUNDS FOR THE YEAR ENDED 7 JULY 2019 Cumulative 8 November 2016 to 7 July 2019 Note 07 July 2018 SOURCES Birr Birr Birr IDA - IFR Procedures 7 69,945,205 96,021,075 26,075,870 IDA - Direct Payments 8 21,550,853 21,550,853 - Gain on foreign exchange 2,392,372 3,826,969 1,434,597 Other income 2,100 2614 24,54 93,890,530 121,425,511 27,534,981 USES Regulatory and institutional capacity support 9 35,541,036 41,256,750 5,715,714 EXCESS OF SOURCES OVER USES 494. 7 21,126 5 ETHIOPIAN MARITIME AFFAIRS AUTHORITY ETHIOPIA TRADE LOGISTICS PROJECT IDA CREDIT NO. 5995-ET DESIGNATED ACCOUNT STATEMENT For period ended 7 July 2019 Account number 0100721300009 Depository bank National Bank of Ethiopia Address Addis Ababa, Ethiopia Related credit IDA 5995-ET Currency USD Ethiopian USD Birr Opening balance -8 July 2018 738,678 20,156,011 Add: Advance received from the 2,479,112 69,945,205 World Bank 3,217,790 90,101,216 Gain on foreign exchange - 2,392,372 3,217,790 92,493,588 Less: Transfer to Birr account 700,000 19,913,160 Expenditure/Payments 703,308 20,074,938 1,403,308 39,988.098 Ending balance - 7 July 2019 6 ETHIOPIAN MARITIME AFFAIRS AUTHORITY ETHIOPIA TRADE LOGISTICS PROJECT IDA CREDIT NO. 5995-ET NOTES TO THE FINANCIAL STATEMENTS 1. PR OJECT INFORMATION The Federal Democratic Republic of Ethiopia and the International Development Association (IDA) entered into an agreement dated 7 April 2017 to finance the Trade Logistics Project. The later agreed to extend to the former a credit in an amount equivalent to SDR1 10,400,000 to assist in financing the mentioned Project. The Project will be implemented by the Ministry of Transport through the Ethiopian Maritime Affairs Authority. The objective of the Project is to enhance the performance of the Ethio -Djibouti corridor through improvements in operational capacity, efficiency and range of logistics services at Modjo Dry Port. The Project consists of three components: 1. Component 1: Improvement of infrastructure at Modjo; 2. Component 2: Enhancing coordination through investments in IT systems; and 3. Component 3: Regulatory and Institutional Capacity Support. 2. SIGNIFICANT ACCOUNTING POLICIES a) Basis of preparation These financial statements have been prepared in accordance with the Ethiopian Government's Manual of the Federal Accounting System which is based on a modified cash basis of accounting. b) Currency These financial statements are presented in Birr. Transactions in foreign currencies are translated into Birr at the approximate rates of exchange prevailing at the dates of the transactions. Foreign currency balances are translated into Birr at the exchange rates ruling at the balance sheet date. 7 ETHIOPIAN MARITIME AFFAIRS AUTHORITY ETHIOPIA TRADE LOGISTICS PROJECT IDA CREDIT NO. 5995-ET NOTES TO THE FINANCIAL STATEMENTS (continued) 3. CASH AND BANK BALANCES 7 July 2018 Birr Birr National Bank of Ethiopia Accounts: USD Account no. 01007213000019 52,505,490 20,156,011 Birr Account no. 0100721040019 3,113,495 1,647,344 55,618,985 21,803,355 Cash on Hand 7,2;5 6L12 4. ACCOUNTS RECEIVABLE 7 July 2018 Birr Birr Advance-Sellhorn 1,593,358 - Advance-Lasertech Design 105,965 - Advance-Terberg Benschop 10,932,925 - Advance-Jhon. Achelis & Sohne 10,617,928 - Advance- UNOPS 3,183,358 - National Oil Ethiopia 1,970 - Libya Oil Ethiopia Limited 5,500 - Staff debtors - 9,5l7 5. ACCOUNTS PAYABLE 7 July 2018 Birr Birr Pension contribution payable 1,890 - Withholding tax payable 892,945 - Income tax payable 102,164 - VAT payable 902,154 - Sundry - 222 8 ETHIOPIAN MARITIME AFFAIRS AUTHORITY ETHIOPIA TRADE LOGISTICS PROJECT IDA CREDIT NO. 5995-ET NOTES TO THE FINANCIAL STATEMENTS (continued) 6. FUND BALANCE Birr Balance as at 8 July 2018 21,819,267 Excess of sources over uses 58,349,494 Balance as at 7 July 2019 7. IDA - IFR PROCEDURES Date Dollar Birr 12-31-2018 Transfer to DA 1,479,112 41,474,005 3-27-2019 Transfer to DA 1,000,000 28,471,200 ZA722 6.4 8. DIRECT PAYMENT Date USD Birr 7-7-19 377,681.70 10,932,925 7-7-19 366,800.01 10,617,928 9 ETHIOPIAN MARITIME AFFAIRS AUTHORITY ETHIOPIA TRADE LOGISTICS PROJECT IDA CREDIT NO. 5995-ET NOTES TO THE FINANCIAL STATEMENTS (continued) 9. REGULATORY AND INSTITUTIONAL CAPACITY SUPPORT 7 July 2018 Birr Birr Wages to contract staff 4,655,191 4,782,041 Labor charge 1,162 - Pension contribution 488,603 353,924 Office supplies 116,646 14,146 Printings 5,940 1,674 Fuel and lubricants 75,019 30,512 Per diem and room charge 165,554 246,193 Office refreshment 36,962 15,661 Maintenance and repair of vehicle 39,330 60,927 Furniture maintenance 73,954 - Consultancy service 7,864,397 Rent 11,564 - Advertising 45,216 130,001 Fees & charges 255,465 56,522 Telephone expense 14,617 - Training expense 1,059,591 Vehicles 6,864,255 - Office equipment & furniture 583,667 1,860 Design study 13,183,903 - Miscellaneous expense - 2 35,541,036i 5,715,714 10. DATE OF AUTHORIZATION The Manager of Ethiopia Trade Logistics Project authorized the issue of these financial statements on 19 November 2019. 10 ANNEX 1 ETHIOPIAN MARITIME AFFAIRS AUTHORITY ETHIOPIA TRADE LOGISTICS PROJECT IDA CREDIT NO. 5995-ET IFR WITHDRAWAL SCHEDULE for applications submitted during the year ended 7 July 2019 USD Birr 1st quarter IFR 62,105.17 1,702,101.44 2nd quarter IFR 207,069.08 5,764,616.71 3rd quarter IFR 360,848.01 10,217,307.34 4th quarter IFR 620,603.11 17,857,010.19 Total 1,250,625.3 35,541,035.68 11 ANNEX II ETHIOPIAN MARITIME AFFAIRS AUTHORITY ETHIOPIA TRADE LOGISTICS PROJECT IDA CREDIT NO. 5995-ET BUDGET UTILIZATION SCHEDULE (in USD) Remaining Allocated balance project Budget Actual from audit Remaining budget for Audit expenditure period project (2017-2022) period YTD budget period (B) (C) (D) (E=C-D) (F=B-D) Improvement of infrastructure at Modjo Port 120,000,000 5,285,851 465,475 4,820,475 119,534,525 Coordination through IT system 15,000,000 20,704 - 20,704 15,000,000 Capacity support 15,000,000 1,262,397 1,024,523 237,874 13,975,477 Total 150,000,000 6,568,952 1489,998 5,078,955 148,510,002 12 ANNEX III ETHIOPIAN MARITIME AFFAIRS AUTHORITY ETHIOPIA TRADE LOGISTICS PROJECT IDA CREDIT NO. 5995-ET LIST OF NON-EXPENDABLE ASSETS Name of Asset Quantity Cost HP Colour LaserJet printer 2 59,320 HP Laser Jet Printer 4 36,000 UPS 1500 VA 10 50,000 Lenovo Laptop 15 360,000 505,320 13