1 Project Financial Statements
1EDM - ELECTRICIDADE DE MOQAMBIQUE, E.P.
1Transmission Upgrade Project -Extension and Reinforcement ofMatambo Substation - 2014-2016
1rst January 2014 to 31 December 2015
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EDM - ELECTRICIDADE DE MOgAMBIQUE, E.P.
TRANSMISSION UPGRADE PROJECT - EXTENSION AND REINFORCEMENT OF MATAMBO SUBSTATION -2014-2016
CONTENTS PAGE
INDEPENDENT AUDITOR'S REPORT 1-2
FINANCIAL STATEMENTS 3
ACCOUNTING POLICIES 4
NOTES TO THE FINANCIAL STATEMENTS 5-7
LI
LI
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Maputo NUIT:400 006 245Building a better Mogambique www.ey.comworking world
INDEPENDENT AUDITOR'S REPORT
To the Project Management of
ELECTRICIDADE DE MOQAMBIQUE, E.P.
TRANSMISSION UPGRADE PROJECT - EXTENSION AND REINFORCEMENT OF MATAMBO
SUBSTATION
Report on the financial statements
We have audited the accompanying financial statements of TRANSMISSION UPGRADE
PROJECT - EXTENSION AND REINFORCEMENT OF MATAMBO SUBSTATION, which comprise
the statement of receipts and payments at 31 December 2015 (reflecting a total of payments of
USD 3.915.979), for the period from 1rst January 2014 to 31 December 2015, and a summary
of significant accounting policies and other explanatory notes set out in page 5.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial
statements in accordance with accounting principles generally accepted in Mozambique. This
responsibility includes: designing, implementing and maintaining internal control relevant to the
preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error; selecting and applying appropriate accounting
policies; and making accounting estimates that are reasonable in the circumstances.
Auditor's Responsibility
Our responsibility is to express an opin on on these financial statements based on our audit. We
conducted our audit in accordance with nternational Standards on Auditing. Those standards
require that we comply with ethcal requ rements and plan and perform the audit to obtain
reasonable assurance whether the fnandia statements are free from material misstatement.
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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.
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 referred to above present fairly, in all material respects,
the financial position of TRANSMISSION UPGRADE PROJECT - EXTENSION AND
REINFORCEMENT OF MATAMBO SUBSTATION as of 31 December 2015, for the year then
ended in accordance with accounting principles accordance with the accounting policies set out
in page 5.
YOUNG, LDA
2
CONSOLIDATED STATEMENT OF INCOME AND EXPENDITURE FOR THE PERIODO COMPRIDING 1 JANUARY 2014 TO 31 DECEMBER 2015
(Accounts Expressed in USD)
L Notes 31-Dec-2015 31-Dec-2014
CASH RECEIPTS
Opening balance 1.043.090 225.982
Funds received 3 3.357,736 1.192.182
Interests 4 602 349
TOTAL RECEIPTS 4.401.428 1.418.513
L I EXPENDITURES
Supply and installation 5 2.484.040 45.339
Consultants services 6 728.876 329.324
Others suppliers 7 326.392 -
Bank charges 8 1.128 690
Withholding tax 9 120 70
TOTAL EXPENDITURES 3.540.556 375.423
Closing balance 10 860.872 1.043.090
Bank balance 10 860.872 1.043.090
FINANCE AND ADMINISTRATION MANAGER PROJECT MANAGER
LlL
LUAU -
(Accounts Expressed in USD)
1. INTRODUTION
World Bank, represented by IDA - International Development Association and the Government of Mozambique represented by EDM
signed an agreement to carry Out a project called EDM Transmission Upgrade Project, Mozambique 2013-2015.
The main objective of improving the transmission system of Matambo Substation (Transmission upgrade of Matambo substation) is to
L I reduce the frequency of electricity outages in Tete province.
The specific objectives are to enable EDM to provide sufficient, affordable and reliable electricity for the purpose of economic growth.
The project shall carried out in accordance with the programme document titled "Credit number 4354 - MOZ Amended and Restated
Financing Agreement" dated 11-15-2013
L I 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
[AJ The financial statement, compiled from the Project Unit accounting records, was prepared on the cash basis of accounting. Under
cash basis of accounting, receipts are not recorded until received in cash and disbursements are assigned to the period in which cash
payment is made.
Foreign Currency Transactions
The books of accounts of the Project are maintained in American Dollars (USD). The statement of receipts and payments is also
expressed in American Dollars (USD) unless otherwise stated. Transactions in other currencies are converted in American Dollars
(USD) by the Project, and are reflected as expenditure in the year of purchase.
Procedures
The disbursements of the funds, made available by the International Development Association (IDA), are made by direct transfers or
by requests for payments sent to the Special Account, which was created with funds made available by IDA, in a bank account of the
Project maintained in Maputo (BCI - Fomento)
3. Funds received
Funds received from donor are analyzed as follows:
ir 2015
Donors (Funds transferred on 02-06-2015) 122.208Donors (Funds transferred on 28-08-2015) 567.326Direct payment made by donor 2.668.202
Total cash receipts 3.357.736
U 4
(Accounts Expressed in USD)
U4. Interests
WI Revenue from interest relating with the Project's deposit account, could be analyzed as follows:
2015
January 60February 54March 61April 58
May 38June 31
July 31
August 40
September 66
October 64November 50December 49
602
U[ . 5. Supply and installation
Expenses with Supply an installation are made as follows:
2015 2014
Joint Venture National Contracting Co. Ltd -EMCO Ltd 2.484.040 45.339
2.484.040 45.339
6. Consultant's services
L I Expenses with Consultant's services are made as follows:
2015 2014
SMEC Intemational (Pty) Ltd 728.876 329324
728.876 329.324
-incr.-LERM .VrWWILIm Wo .P 1UrI %I 4 31 UMEilDErAUI a
(Accounts Expressed in USD)
7. Others suppliers
Expenses with Others suppliers are made as follows:
2015 2014
Siemens, S.A. 326.392 0
326.392 0
8. Bank charges
Bank charges corresponds are made as follows:
2015
April 357May 374June 76August 20September 287November 13
1.128
9. Withholding tax
Corresponds to the interest withholding tax, and could be analyzed as follows:
2015
January 12February 11March 12April 12May 8
June 6
July 6August 8September 13October 13November 10December 10
1201
6
(Accounts Expressed in USD)
10. Closing Balance
The financial position of the income over expenditure as at December 31, 2014, corresponds to the existing final balance in banks,
which is represented by:
2015 2014
BCl Fomento - 10488126.10.001 - USD 860.872 1,043.090
860.872 1.043.090
11. Taxes
The possibility exists that the fiscal authorities could review the amount of company tax as well as other taxes paid by the company
including employee tax and withholding taxes.
FINANCE AND ADMINISTRATION MANAGER PROJECT MANAGER
2:ALV
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