BDO1'" Independent Auditor's Report 31 December 2018 II Tel: 258 21 300720 Av 25 de Setembro Fax: 258 21325091 n0 1230,30 andar Bloco 5 Email:bdo@bdo co mz Maputo-Moqambique www bdo co mz CP 4200 TO BIOFUND - THE FOUNDATION FOR THE CONSERVATION OF BIODIVERSITY MAPUTO We have audited the financial statements of BIOFUND - THE FOUNDATION FOR THE CONSERVATION OF BIODIVERSITY, which comprise the statement of financial position as at 31 December 2018 and the statement of cash receipts and disbursements and notes to the financial statements, including a summary of significant accounting policies. In our opinion the accompanying financial statements present fairly, in all material respects, the financial position of the BIOFUND - THE FOUNDATION FOR THE CONSERVATION OF BIODIVERSITY as at 31 December, 2018, and its statements of receipts and disbursements for the year then ended, in accordance with basis of accounting as described in Note 2.2 and in the manner required by Mozambique legislation. 1l41sis jt (piilj We conducted our audit in accordance with International Standards on Auditing (ISAs 800 and 805) and other technical and ethical recommendation from Mozambican Accountants and Auditors Body (OCAM). Our responsibilities under those standards are further described in the Auditor's Responsibilities for Audit the Financial Statements section of our report. We are independent of the Entity in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Mozambique, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. We draw attention to the Note 2.2 to the financial statements, which described the basis of accounting. The financial statements are prepared to assist the entity in complying with the financial reporting provision of the contract referred below. As a result the financial statement may not the suitable for another purpose. Our report is intended solely for the entity and should not be distributed to or used by parties other than the entity. Our opinion is not modified in respect to this matter. BOO Lda., uma emprosa do responsabllldade Ilmitada Moambicana, 6 membro da BDO International Limited, uma emprosa Inglesa Ilmitada por garantia, e faz parte do rede internadonal de firmas independentes BOO. BDO 6 a marca da rede BDO o de cada urna das suas firmas membros. NUIT 400068038, Socfedade par quotas, Capital social USD 70000 Matricula 12019 na Conservat6rla do Registo Comercial do Maputo Autorizaglio para actividades de Audltorla e Certificaoo de Contas per despacho do 2711099 do Vice-Mfnistro de Plano e Ftnangas. Inscrita na OCAM corn n* 02SAC/OCAW2012. BIOFUND - THE FOUNDATION FOR THE CONSERVATION OF BIODIVERSITY We have verified that: * The financial statements present fairly, in all material respects, the Programmes cash receipts/income and expenditures as well as the cash/bank/financial position in accordance with an acceptable financial reporting framework; * All donor funding was used in accordance with the terms set out in the Financing Agreements and exclusively for the intended purposes. Management is responsible for the preparation and fair presentation of the financial statements, in accordance with basis of accounting as described in Note 2.2 and in the manner required by Mozambique legislation, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Entity ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Entity or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Entity financial reporting process. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs 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 these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism 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 audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as Audit report - Year ended 31 December 2018 2 BIOFUND - THE FOUNDATION FOR THE CONSERVATION OF BIODIVERSITY fraud may involve 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 procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity internal control. * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. * Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as going concern. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. BDO (MOZAMBIQUE), LDA Registered Auditor Firm nr 02/SAC/OCAM/2012, represented by: Engagement Partner: Abdul Satar A. 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'�.. , � ... .. ,, , . ... i ы и `у, г н У й � д и�, ц � �' 'р^ G и � � Е и' ' О ' С � . � � г1 '4, ; AL,, нi у, й , = i � � � � ' Q. д , С I: а'. Й А . 41 ! , ,.,. fi � , U w .R} � О У� .V Q у О;, рЛ � � l41 .. ш й v а: w N: .�° � � ё� � � G гса Uэ1, а, � `�, � � �, .о н � � ( � , 1 Д, , .� v р', �� �, � �, ��.. i ,. ю,. Oi � ,и,, evi ."7 Е ` `Я�i и. Е и'"i v .в Z с с1 � н; га п;, м и w, v и с оп � �ё '" �' ( � й' � i �уΡ и ,v � 'v с lL 41.; .� � ьП3.+ i О �. � � С. .� � � � �,. tj . 'о .. О 4С3): 2' iL, с� 4J, `z z ' 47 й' � � W t� т I l BICIFUND - THE FOUNDATION FOR THE CONSERVATION OF BIODIVERSITY 'j 1 Introduction Entity designation BIOFUND - THE FOUNDATION FOR THE CONSERVATION OF BIODIVERSITY Project designation Biodiversity conservation Address Av. Tom6s Nduda n* 1038 R/C Maputo - M(Kambique Sustainable financing of biodiversity conservation, with a special focus on the National System of Conservation Areas, as a contribution to the balanced development of the country, Activities BIOFUND also fund conservation activities outside the Conservation Areas, based on the priorities defined and identified in its Strategic Plan. Provide donations to beneficiaries who qualify for funding, Constitution date 13 March 2012 NUIT 700152855 President: Abdul Magid Osman Vice -Pre sidente: Anabela Afonso Rodrigues Administrators: Board of directors -Jos6 6scar Monteiro, -Rui Monteiro, -Jorge FerrAo, -Narciso Matos, -Madyo Couto. Lawyer Carlos Martins Et Associados BCI Banks Banco Unico Societe Generale Mo ambique Description Amount % Donor/Contribution Banco Mundial 2011 553,00 17 USAID 115256,00 0.98 Funbio 50 000,00 0.42 AFD 456240,00 3.85 BCl (Cartao Bio) 20241,00 0.17 Endowment 9 062 880,00 77 Fundos Internos 68 720,00 0.58 11 784 890,00 100 BIOFUND - THE FOUNDATION FOR THE CONSERVATION OF BIODIVERSITY 2 Accounting policies The following paragraphs describe the main accounting policies applied consistently by the project. 2. 1 Accounting convention The accompanying statements are prepared under the historical cost convention. No procedures are adopted to reflect the impact on the financial statements of specific price changes or changes in the general level of prices. 2.2 Accounting basis The Program's policy is to prepare the accompanying statements on the cash basis of accounting. On this basis, revenue is recognized when received rather than when earned, and expenses are recognized when paid rather than incurred. 2.3 Reporting currency All financial statements are reported in USD. 2.4 Fixed assets Fixed assets are expensed in the year of purchase. 2.5 Receipts The heading "Receipts" represent funds transferred by the donors to support the foreseen activities of the projects. 2.6 Comparative figures The Financial Statements, as well as the corresponding explanatory notes, include comparative figures for the period ended 31 December, 2017. BIOFUND - THE FOUNDATION FOR THE CONSERVATION OF BIODIVERSITY 3 Funds received 3.1 IDA - Mozbio Description 2018 2017 January 292 258,00 62 509,00 February 30 104,00 17067,00 March 223300,00 100609,00 April 109 820,00 49 083,00 May 230680,00 155 893,00 June 226 706,00 137286,00 July 139 269,00 109 470,00 August 188 237,00 171 465,00 September 212 157,00 157437,00 October 47531,00 403094,00 November 122 636,00 67 554,00 December 188855,00 208 396,00 2011 553,00 1 639863,00 3.2 Funbio -Project K Description 2018 2017 August 00- 35 000,00 0,00 September 15 000,00 0,00 November 0,00 50000 00; 50 000,00 50 000,00 3.3 CPI - Harmonisation of Development and Conservation Description 2018 2017 MZN USD MZN USD February 760408,00 12 767,00 0,00 0,00 March 956 908,00 16 066,00 0,00 0,00 June 1 893 927,00 31 798,00 0,00 0,00 August 0,00 0,00 1 095 360,00 16 930,00 October 1 420000,00 23 841,00 0,00 0,00 November 0,00 0,00 332226,00 5 134,00 December 1 833 518,00 30 784,00 653572,00 10 102,00 6 864_761,00 115256,00 2.081 158,00 32 166,00 7 BIOFUND - THE FOUNDATION FOR THE CONSERVATION OF BIODIVERSITY 3.4 BIOFUND Description 2018 2017 February 1 739,00 36 635,00 March 34 319,00 30961,00 June 1 664,00 27566,00 August 6 399,00 0,00 October 0,00 11 725,00 December 8071,00 0,00 Other transfers 22743,00 5285,00 74935,00 112.172,00 3.5 AFD/BIQFUND - Project Abelha Description 2018 2017 February 5 243,00 0,00 March 1 287,00 0,00 June (AFD) 456240,00 0,00 August 1 761,00 0,00 September 8 237,00 0,00 November 0,00 564 084,00 472 768,00 54 084,00 3.6 BCI - Cartgo Blo Description 2018 2017 January 126,00 0,00 february 2398,00 0,00 March 1 796,00 0,00 April 1 442,00 0,00 May 1 110,00 0,00 June 1 988,00 0,00 July 1 721,00 0,00 August 1 659,00 0,00 September 2 266,00 0,00 October 1 579,00 0,00 November 1 962,00 0,00 December 2 194,00 0,00 20 241,00 0,00 BIOFUND - THE FOUNDATION FOR THE CONSERVATION OF BIODIVERSITY 3.7 Endowment a Description 2018 2017 December 9 062 880,00 0,00 9 062 880,00 0,00 4 Services and other operating costs AR costs incurred in carrying out project activities are recorded under this heading. 5 Advances to beneficiaries - Areas of conservation This heading relates to advances made to beneficiaries not justified and expenses incurred not yet reimbursed. 9 BIOFUND - THE FOUNDATION FOR THE CONSERVATION OF BIODIVERSITY 6 Closing balance The closing balance at 31 December 2018, has the following breakdown: Description Note [DA Proj K CPI Biofund Cartåo Bio Endowment (USD) 3 z2D Funbio Abelha 31lDez2018 31Dez2017 Banks 6.1 257 108,00 0,00 14167,00 27 346,00 125 193,00 20 200,00 32 500 221,00 32 944 235,00 25 180 730,00 257 108,00 0,00 14 167,00 27 346,00 125 193,00 20200,00 32 500 221,00 32 944 235,00 25 180 730,00 BIOFUND - THE FOUNDATION FOR THE CONSERVATION OF BIODIVERSITY 6.1 Banks 6.1.1 IDA - Mozbio Description Currency 31dec18 31dec17 Banco Unico - 6286308 USD 221 072,00 67 160,00 Banco Unico - 5925001 MZN 36 036,00 25 711,00 257 108,00 92 871,00 6.1.2 Funbio - Project K Description Currency 31dec18 31dec17 Societe General Moambique - 136492 USD 0,00 50000,00 0,00 000000 6.1.3 CPI - Harmonisation of Development and Conservation Description Currency 31dec18 31dec17 Societ6 General Moambique - 99171 MZN 14 167,00 4464,00 14 167,00 4 464,00 6.1.4 Biofund Description Currency 31dec18 31dec17 Banco Unico - 5057507 MZN 8 953,00 4 765,00 Banco Unico - 5041507 USD 18 393,00 209,00 27 346,00 4 974,00 6.1.5 AFD/BIOFUND - Project Abelha Description Currency 31dec18 31dec17 Banco Cornercial de Investimento - 15764963910001 MZN 123 118,00 1 38 890,00 Banco Comercial de Investimento - 14839176510001 MZN 2 075,00 326 583,00 125 193,00 365 873,00 6.1.6 BCI - Cartgo Bio Description Currency 31dec18 31dec17 Banco Comercial de Investimento - 175065698710001 MZN 20 200,00 0,00 0200,00 0,00 BIOFUND - THE FOUNDATION FOR THE CONSERVATION OF BIODIVERSITY 6.1.7 Endowment Description Currency 31dec18 31decl7 Deutsche Bank (i) USD 32 500 221,00 24 662 948,00 32 500 221,00 24 662 948,00 (i) The amount recorded under this heading refers to funds channeled by the donors to Deutsche Bank which are considered as the entity's capital and are invested in the international financial market. The entity may only use the proceeds from the investments made and a part of the capital is considered hybrid funds. BIOFUND - THE FOUNDATION FOR THE CONSERVATION OF BIODIVERSITY As requested and agreed in the contract, we performed our work in compliance with the regulations indicated below: * The terms of reference; * The International Standard on Related Services (ISRS) 4400 Perform Agreed Procedures Regarding Financial Information as promulgated by the International Federation of Accountants (IFAC); * The Code of Ethics for Professional Reviewers / Auditors issued by IFAC. Although SSRS 4400 determines that independence is not a requirement for commitments to agreed procedures, the Contracting Authority requires the Auditor to comply with the independence requirements set out in the Code of Ethics for Professional Reviewers / Auditors. 13A BIOFUND - THE FOUNDATION FOR THE CONSERVATION OF BIODIVERSITY Audit Tors Results ref Description of procedures Satisfactory: Comments (Y or N or N / A) 2.1 Verify that donor funds have been used in accordance with the conditions laid down in the Y ALL expenditure analyzed was relevant financing agreements with due regard to the economy and efficiencies and solely carried out within the framework of for the purposes for which the funding was granted; the project activities. 2.2 Verify that counterpart funds have been granted and used in accordance with the relevant Y The funds were used for the financing agreements with due regard to cost / benefit and only for the purposes for which intended purpose (biodiversity they were granted for counterbalance project). 2.3 Generally accepted accounting principles have been and are being consistently applied Y The entity has consistently applied generally accepted accounting principles. 2.5 The goods, construction work and services were procured in accordance with the relevant Y The procedure was duly observed. financing agreements, including specific rules of the World Bank Procurement Policies and Procedures 2.6 With regard to the financing of MOZBIO Phase 1 of Component 1.2.2, all necessary evidence Y The procedure was duly observed. was maintained in the form of documents, records and accounts for all project activities 2.7 With regards to the financing of MOZBIO Phase I of Component 1.2.2, the Designated Account Y The procedure was duty observed. (if used) has been maintained in accordance with the provisions of the relevant financing agreements and the funds disbursed from the accounts have been used. 2.8 Compliance with national laws and regulations and adapted financial and accounting Y The entity has applied the procedures (eg, the Manual of Administrative and Financial Procedures, BIOFUND Operations applicable national laws, regulations Manual) have been observed and applied and procedures established in the . _operations manual. 2.9 The financial performance of the Projects is satisfactory Y Nothing to report. 2.10 Goods acquired with BIOFUND funds or projects, their existence may be physically confirmed Y The procedure was duty observed. by BIOFUND or its beneficiaries, in accordance with the financing agreements between BioFUND and its donors or BIOFUND and its beneficiaries 2.11 ineligible costs included in the provision of accounts for project disbursement requests are Y In the accounts, costs not eligible for identified and reimbursed in the designated accounts. the project are not considered. 2.12 Analyze and evaluate the internal control system with greater emphasis on the management Y No deficiencies were identified in rules and procedures established in the institution the Internal Control System except for the situations reported in the recommendation letter. 1ti . � ,,,,,,,,,,,',. � .,. �/� ,,,,.,���. 1вL �r w з � � � ь� � •, � � �р ,, �_ `� ���,.,. � �1 . � 4� т � О г t) в � Ш � � � i � � ш х � � о � г о F ' а ® г � � � w х � � о z � � � с� � � i � � Financial Statements Statement of Receipts and Payments For the year ended 32 December 2018 Description IDA Projecto K CPT BIOFUND BIOFUND PA AM Cartao BIO TOTAL Grant Grant Grant Fund GRANT GRANT Notas USD USD USD USD USD USD USD Funds Received 1,2 1 1 Opening Balance 3 92,871 50..000 4,464.00 4,974 38,890 326,583 - 517,782' Funds Received 2,011.553 SUN 115,256.12. 52,192 16,528 456,240 20,241 2,701,769 Contribution of the CPI Project 4 10.115 10,115 Contribution of the K Project 5 12,628 12,628 Interest Received 6 943 46 1,435 13,324 15,748 Total Received 2,105,367 100,000 119,720.12 79,955 56,853 796,147' 20,241 3.258,043 Payments 1,2 - Goods, works, non-consulting services, consultants services, 1,892,162.86 100,000 105,552.76 52,609 54,778 631.132 41 2,836,235 training and operational costs 7 Adva nces to Be nef icia ries 8 (43,903) 37,121 (6,782) Exchange differences 4,776 4,776 Total payments 1,848,259 ]LO0,000 105,SS2.76 52,609 54,778 673,029 41 2S34.228 Final Balance 9 257,108 14,267.351 1 27,M6 2,075 J_ 123,128 20,200 423,814 rNotes* - 1. The financial statements areprepared on a cash basis, the historical cost method. 2. The financial statements have been prepared on a cash basis f rom the information reflected in the financial statements and accounting records ofthe projects 3. Balance at December 31, 2017 4. Comparison of operating costs as provided for in the Grant Agreement 5. Administrative fee provided for in the Financing Agreement 6. Interest income on current accounts in 2018 7. Expenditure for the period 8. Difference between advances and justifications of the Conservation Areas 9. Balance according to the bank statements on 31 December 2018 BDO Av. 25 de Setembro, n°1230 3° andar bloco 5 Maputo-Moçambique www.bdo.co.mz bdo@bdo.co.mz