tI AGRO PROCESSING,

Public Disclosure Authorized & PRODUCTMVTY ENHANCEMENT AND LIVELIHOOD SUPPORT PROJECT Public Disclosure Authorized

Annual Report and Consolidated Audited Financial Statements For the Year Ended December 31, 2018 Public Disclosure Authorized Public Disclosure Authorized

Prepare(d hn accordance with the Cash Ba~s of Accounting Method of the International Public Sector Accounting Standards AGRO-PROCESSING, PRODUCTIVITY ENHANCEMENT AND LIVELIHOOD IMPROVEMENT SUPPORT (APPEALS) PROJECT IDA Cr. No. 59930 - UNI

CONSOLIDATED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018

CONTENTS PAGE(5

(, v) Project Information and performance

Statement of Accounting Officer and project Coordinators' responsibilities 2

Statement of Significant Accounting Policies

4-b Report of the independent auditors

Statements of Sources and Uses of Funds 6

Summary of Activities in the Designated Account

Balance Sheet 8

SOE/Withdrawal Applications Statement 9

11 Notes to the Financial Statements 10

List of Fixed Assets 12 AGRO-PROCESSING, PRODUCTIVITY ENHANCEMENT AND LIVELIHOOD IMPROVEMENT SUPPORT (APPEALS) PROJECT IDA Cr. No. 59930 - UNI

CONSOLIDATED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018

PROJECT INFORMATION AND PERFORMANCE

INSTITUTIONAL DETAILS/INFORMATION:

Implementing Agency: Federal Ministry of Agriculture and Rural Development

Status: Active

Location: National Coordinating Office ABUJA, with other State Offices at CROSS-RIVER, FNUGU, KADUNA, KANO, KOGI and .

Account Names:

S/N ACCOUNT NAME BANK NAME ACCOUNT NUMBER 1 SPECIAL ACCOUNT (USD)$ CENTRAL BANK OF 70004115

__ __- - -(CBN) 2 DRAWDOWN ACCOUNT (N) CENTRAL BANK OF NIGERIA 0020103261164 (CBN) 3 COUNTERPART ACCOUNT (N) CENTRAL BANK OF NIGERIA 0020103201015 (CBN)

CROSS RIVER STATE COORDINATING OFFICE- ACCOUNTS DETAILS

ACCOUNT S/NO ACCOUNT NAME BANK NUMBER 1 CR-APPEALS DESIGNATED (USD) ZENITH BANK PLC 5070946737 2 CR-APPEALS DRAWDOWN (NGN) ZENITH BANK PLC 1016003317 3 CR-APPEALS DESIGNATED INTEREST (USD) ZENITH BANK PLC 5070946744 4 CR-APPEALS COUNTERPART (NGN) ZENITH BANK PLC 1015000 0U 5 CR-APPEALS INTEREST ON NAIRA ACCOUNT ZENITH BANK PLC 1016000 3I

1(i) COORDINATING OFFICE - ACCOUNT DETAILS

ACCOUNT S/N ACCOUNT NAME BANK NAME NUMBER KAD. STATE APPEALS PROJ-DESIGNATED A/C - Zenith Bank 1 USD PLC. 5070950536 Zenith Bank 2 KAD. STATE APPEALS PROJ-INTREST A/C - USD PLC. 5070950543 KAD. STATE APPEALS PROJ-DRAWDOWN A/C - Zenith Bank 3 NAIRA PLC. 1016013321

4 DRAWDOWN ACCOUNT 2 (NAIRA) - UBA PLC. 1021644404 5 INTEREST ACCOUNT (NAIRA) UBA PLC. 1021644428 6 COUNTERPART ACCOUNT UBA PLC. 1021644435

KANO STATE COORDINATING OFFICE - ACCOUNT DETAILS: Nil

KOGI STATE COORDINATING OFFICE - ACCOUNT DETAILS

S/N ACCOUNT NAME BANK NAME ACCOUNT NUMBER 1. KOGI ST. APPEALS IDA DESIGNATED A/C (USD) ZENI1H BAN PLC 5070949972 2. KOGI ST. APP. COUNTERPART FUND A/C (NGR) ZENITH BANK PIL( 1016011619 3 KOGI ST. APP. COUNTERPART FUND INT. A/C /ENI_1H BAN P_ 1016011554 _ (NGR) 4. KOGI STATE APPEALS DRAWDOWN A/C (NGR) Z-N 1 ANK f 1016011578 5. KOGI ST. APPEALS DESIGNATED INT. A/C (USD) 5070951131

STATE COORDINATING OFFICE - LAGOS

S/N ACCOUNT NAME BANK NAME ACCOUNT NUMBER 1 LASG APPEALS PROJECT -DESIGNATED A/C (USD) ZENH H BANK 1 ( 2 LASGI APPEALS PROJECT INT, A/C (USD) /F NII i BA NK I'; 3 LAS() APPEALS PROJEC I RAWDLOWN A/C---N) TENI iLH B AHN.KLP i

4 IAS(J APPE ALS PROJECT INT._A/C (N) /[N I H BAHK P1 ( - i(N) 5 LASG APPEALS PROJECT COUNTERPART FUND A/C Z[NlE BANK P! ( ADDRESS OF INDEPENDENT AUDITORS:

Itodo Okpanachi & Co. (Chartered Accountants) 42, MKO Abiola Way, Garki, Area 10, Abuja, Nigeria.

MEMBERS OF THE NATIONAL PROJECT COORDINATING UNIT:

NATIONAL COORDINATING OFFICE (NCO)

Dr. Amin M. Babandi National Project Coordinator

Dr. Salisu Garba Project Operations Officer

Tijjani A. Ajayi National Project Accountant

MR. Adekunle Adesoye National Monitoring and Evaluation Officer

ENGR. Tijani Olukayode National Procurement Specialist

Mrs. Heather Akanni National Women and Youth/Livelihood Specialist

BACKGROUND INFORMATION ON THE PROJECT

Source of Financing: International Development Association (IDA)

Size of Loan: US$ 200 MILLION

Effective Date: 24TH May, 2018

Closing Date: 3 0 th September, 2023 PROJECT OBJECTIVES

Agro-processing, Productivity Enhancement and Livelihood-Improvement Support Project (APPEALS) is a project developed by the Federal ministry of Agriculture and rural development !) collaboration with the World Bank and other stake holders. The objective of the project k to enhance agricultural productivity of small and medium scale farmers and improve value addition along priority value chains in the participating states. The Project Development Objectives (PDO) will be achieved through supporting farmers' productivity and their linkage to markets, facilitating consolidation of agricultural products and cottage processing, facilitating farmers and sml a medium businesses' clustering and connection to infrastructure network and busines >ervice. providing technical assistance and institutional support both to beneficiaries, federal aid stit( governments in value chain development.

The participating states include: Cross-River, Enugu, Kaduna, Kano, Kogi and Lagos.

The value chains are: Rice, Wheat, Cocoa, Cashew, Ginger, Tomatoes, Poultry, Dairy, , and Aquaculture. These value chains are further grouped into Food Security, Export Potentials, and Livelihood.

The number of project beneficiaries is estimated at 60,000 individuals' i.e 10,000 beneficiaries per state, and 300,000 farm household members as indirect beneficiaries. The Project also has a dedicated sub-component to benefit women and youth and People with disabilities.

(iv) PROJECT COSTS

By components and category of expenditures as per the Financing agreements and PAD

Components

Component Name Cost (USL) MiHoins;

Production and Productivity Enhancement 40.00

Primary processing, Value Addition, Post-Harvest 92 00 Management and Women & Youth Empowerment

Infrastructure Support to Agribusiness Clusters 40 00

Technical Assistance, Knowledge Management and 10 Communication

Project Management and Coordination 1 5

TOTAL 000

Amount of the Credit Percentage of Expenditures Category Allocated to be Financed (expressed in SDR) 1) Goods, works, non- 75,800,000 100 % consulting services, operating costs and Training under the project 2) Matching Grants under 18,400,000 100% of amounts disbursed Part A of the Project 3) Start-up Grants Part B of 53,000,000 100% of amounts disbursed the Project TOTAL AMOUNT 147,200,000 100% of amounts disbursed

Mv AGRO-PROCESSING, PRODUCTIVITY ENHANCEMENT AND LIVELIHOOD IMPROVEMENT SUPPORT (APPEALS) PROJECT IDA Cr. No. 59930 - UNI

CONSOLIDATED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018

STATEMENT OF ACCOUNTING OFFICER AND PROJECT COORDINATORS' RESPONSIBILITIES

The accompanying Financial statements comprising of Statement of Sources and Uses of Funds, Balance sheet, Statement of Withdrawals (SOE'S), Designated Account Activity Statements an d related disclosure Notes (further referred as to "Project's Financial Statements"), of the Mird'tr, of Agriculture and Rural Development of the Federal Republic of Nigeria ("the Ministry"), Agro Processing, Productivity Enhancement and Livelihood Improvement Support Project" (further referred to as "the Project"), financed under International Development Bank Credit (IDA) numbered 59930 Cr ("Original loan") as at and for the period from 24th May to 31 December 2018 included on pages 6 to 12, are the responsibility of, and have been approved by the project's management.

The accompanying project's financial statements have been compiled by the project', management, for the purposes of reporting to the Ministry and the International Developnet Association, in conformity with the related requirements of the World Bank's financial reporting guidelines and in compliance with the relevant provisions set out in the Financing Ageement numbered 59930 Cr dated 24th May, 2018.

Project's management, in furtherance of the integrity and objectivity of the project's filnarn. X statements, has developed and maintained an internal control structure, including the appropriat( control environment, accounting systems and control procedures. Project's management believe that internal controls provide assurance that financial records are reliable and form a proper ba,i, for the preparation of financial statements, and that assets are properly accounted for 1nd safeguarded. There are, however, inherent limitations that should be recognized in con'ider . the assurances provided by the internal control structure.

Itodo Okpanachi & Co, Independent Auditors, have been engaged to audit these project's financial statements in accordance with the International Standards on Auditing. Their report is included or pages 4 and 5.

2 AGRO-PROCESSING, PRODUCTIVITY ENHANCEMENT AND LIVELIHOOD IMPROVEMENT SUPPORT (APPEALS) PROJECT IDA Cr. NO. 59930 - UNI

CONSOLIDATED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2018

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES The following summary of significant accounting policies is presented to assist in Lnderstanding the accompanying financial statements. The financial statements and accompanying notes are representations of the project's management. These accounting policies confon t. International Public Sector Accounting Standards and have been consistently applied in the presentation of the accompanying financial statements.

1. BASIS OF ACCOUNTING The financial statements have been prepared under the historical cost convention ano have been prepared on cash basis. This is more so to ensure consistency within t1w Project's years of operation.

2. FIXED ASSETS Fixed assets are stated at cost at the time of purchase.

3. FOREIGN CURRENCIES Transactions involving Foreign Currencies are converted to Naira at the rate of exdiange at the time of transactions. Balances in Foreign Currencies are translated into Naira at the foreign exchange rate ruling at the Balance Sheet date and the difference arisino there-from are taken to Exchange gains or losses. 4. EXPENSE RECOGNITION Expenses are recognized as goods are received and services delivered. 5. INVENTORY These represent stock of stationeries and computer consumables which have been included in Development Operating costs.

6. DEVELOPMENT CAPITAL EXPENDITURE These are expenditures incurred on core investment activities as defined in comiponent 1 to 5 of the Project Documents.

7. DEVELOPMENT OPERATING EXPENDITURE These are expenditures incurred on activities executed for the purpose of smooth implementation of the project as defined in component 6 of the Project Documents.

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INDEPENDENT AUDITORS' REPORT

TO THE MANAGEMENT OF WORLD BANK ASSISTED AGRO-PROCESSING, PRODUCTIVITY ENHANCEMENT AND LIVELIHOOD IMPROVEMENT SUPPORT (APPEALS) PROJECT

Report on the Financial Statements We have audited the accompanying financial statements of World Bank Assisted Agro-Processinug, Productivity Enhancement and Livelihood Improvement Support Project Which cornrise m statements of financial position as of December 3 1s' 2018 and the related statements ot aish flows for the year then ended, and the related notes to the financial statements.

Management's responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these FinanciIl Statements in accordance with International Public Sector Accounting Standards; this include, the design, implementation, and maintenance of internal control relevant to the preparatro and fair presentation 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 aucht. We conducted our audit in accordance with International Standards on Auditing. Those standar d,l require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts adc disclosures in the financial statements. The procedures selected depend on the auditor ' judgment, including the assessment of the risks of material misstatement of the finaw cia statements, whether due to fraud or error. In making those risk assessments, the audito 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 ti1 entity's internal control. Accordingly, we express no such opinion. An audit also iinludes evaluating the appropriateness of accounting policies used and the reasonableness of significamt 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 arid appropriate to provide a basis for audit opinion.

4 Opinion

In our opinion, the Project Financial Statements give a true and fair view of the financiat position and of the cash flow statements of Agro-Processing, Productivity Enhancement n' Livelihood Improvement Support Project for the period ended December 31" 2018, in accordance with International Public Sector Accounting Standards.

The Statement of Expenditures (SOEs) are in agreement with the books of account in adequate supporting documentation has been maintained to support claims to the Wofld Balm for reimbursements of expenditures incurred; and which expenditures are eligible for finncikn under the credit agreement.

The IDA advance and withdrawals for purpose of complying with the credit agreement Uive true and fair view of the account activity for the period ended, 31' December 2018.

Itodo Okpanachi Et Co., (Chartered Accountants) 42, MKO Abiola Way, Garki, Area 10, Abuja, Nigeria

ABUJA, NIGERIA FRC/2013/00000000001710

5 AGRO-PROCESSING, PRODUCTIVITY ENHANCEMENT AND LIVELIHOOD IMPROVEMENT SUPPORT (APPEALS) PROJECT Cr. #59930 CONSOLIDATED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018

CASH FLOW STATEMENTS 2018 CASH FLOW FROM OPERATING ACTIVITIES N

Development Operating Costs (208,446,934)

Adjustment for non - Cash items: Depreciation 0

Net Operating Cost before changes in funds (208,446,934)

Increase in Receivables 0

Increase in Payables 0

Net Cash injected into Operations (208,446,934)

CASH FLOW FROM INVESTING ACTIVITIES Capital Costs Incured (278,005,440) Fixed Assets (16,512,700)

CASH FLOW FROM FUNDING ACTIVITIES World Bank Credit 4,877,596,952 Counterpart Fund 30,000,000

(Decrease)/Increase in Cash & Cash Equivalents 4,404,631,878

Cash & Cash Equivalents at the beginning of the period 0

Cash & Cash Equivalents at the end of the period 4,404,631,878

To be read in conjuction with the Financial Statements.

6 AGRO-PROCESSING, PRODUCTIVITY ENHANCEMENT AND LIVELIHOOD IMPROVEMENT SUPPORT (APPEALS) PROJECT Cr. #59930 CONSOLIDATED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018

FINANCING AGREEMENT CR. NO. 59930 AS OF AND FOR THE YEAR ENDED DECEMBER 31ST, 2018

In USD $ $

Opening Balance as of January 1, 2018 0.00 Add: Initial Advance 15,999,990.00 Reimbursements 0.00 Amount Advanced in the year (1) 15,999,990.u 15,999,990.0

Closing Balance as of December 31st, 2019 7.705.41100 Add: Amount of eligible expenditures in the year 8,294,504.00 Service Charge 75,00 Total Advance accounted for (2) 8,294,579.00 15,999,990.00

Discrepancy (1) - (2) 0

To be read in conjuction with the Financial Statements.

7 AGRO-PROCESSING, PRODUCTIVITY ENHANCEMENT AND LIVELIHOOD IMPROVEMENT SUPPORT (APPEALS) PROJECT Cr. #59930 CONSOLIDATED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018

STATEMENT OF POSITION 2018 NOTE N N Development Capital Expenditure 2 278,005.440

Development Operating Expenditure 3 208,446,934

Fixed Assets 4 16 512,700

CURRENT ASSETS Inventory 5 0

Cash and Bank Balances 6 4,404,631,878

NET CURRENT ASSETS 4,404,631,878

NET ASSETS 4.907596952

FINANCED BY:

IDA Fund 7 4,877,596,952 FGN Counterpart Fund 8 30,000,000 4 L59592

To be read in conjunction with the notes to the Accounts.

( ) NATIONAL PROJECT COORDINATOR

( \ ) PROJECT ACCOUNTANT

8 AGRO-PROCESSING, PRODUCTIVITY ENHANCEMENT AND LIVELIHOOD IMPROVEMENT SUPPORT (APPEALS) PROJECT Cr. #59930 CONSOLIDATED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018

STATEMENTS OF SOE/WITHDRAWAL APPLICATIONS AS AT 31ST DECEMBER 2018

Date Paid App. No Details Amount Applied Amount paid Difference $$ $ 29/06/2018 WAPP 1 Initial Advance 16,000,000.00 15,999,990,00 1000

To be read in conjuction with the Financial Statements.

9 AGRO-PROCESSING, PRODUCTIVITY ENHANCEMENT AND LIVELIHOOD IMPROVEMENT SUPPORT (APPEALS) PROJECT Cr. #59930 CONSOLIDATED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018

NOTES TO THE FINANCIAL STATEMENTS

1 Project and Nature of Activities APPEALS project is established with the sole objective of enhancing agricultural productivity of small and medium scale farmers and improve value additions along priority value chains in the participating states.

The project development objective are to be achieved through supporting farmers productivity and their linkage to markets, facilitating consolidation of agricultural products and cottage processing etc. and state governments in value chain development

The Participating states include Cross river, Enugu, Kano, Kaduna, Kogi and Lagos and the value chains are Rice, Cocoa, Cashew, Ginger, Tomatoes, poultry, Maize and aquaculture, which are further grouped into food security, Export potentials and livelihood.

The estimated number of project beneficiaries is at 60,000 individuals

2018 2 Development Capital Expenditure N Implementation Support Mission 129,551,955 Support to FMARD and other related agencies 148,453,485

3 Development Operating Expenditure Training/Workshop 57,166,519 General Repairs and Maintenance 6,125,163 Fuel and Lubricants 5,876.000 Publicity and Advertisement 1 327326 Salaries and Allowances 36 727 699 Transport and Travels 97,473.535 Printing and Stationery 1.793.200 Bank Charges 1 487492 Utility 470.000

2§4934

10 AGRO-PROCESSING, PRODUCTIVITY ENHANCEMENT AND LIVELIHOOD IMPROVEMENT SUPPORT (APPEALS) PROJECT Cr. #59930 CONSOLIDATED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

4 Fixed Assets Motor Office Vehicles Equipment Total N N N At 1st January 2018 0 0 0 Additions in the year 0 16,512,700 16.512 700 At 31st December 2018 0 16,512,700 16,512,700

5 Inventory These represent stock of stationery and computer consumables which have been included in development operating costs. 2018 N 6 Cash and Bank Balances Designated Account - CBN - FCMB (UK) 2 348,950.364 Counterpart Account -CBN 15 353,491 Drawdown Account - CBN 2,040,328,023 4,404,631,878

7 IDA Fund Balance Brought Forward 0 Receips During the Year 4.877,596 952 Balance Brought Down 4,877,59652

8 Counterpart Fund Balance Brought Forward 0 Receips During the Year 30 U00 .00U Balance Brought Down 30,000 000

To be read in conjuction with the Financial Statements.

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