THE UNITED REPUBLIC OF TANZANIA

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30th JUNE 2015

Ministry of Finance & Planning 1 Madaraka Street P.O. Box 9111 11468 Dar es Salaam Tanzania

16th March, 2016

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THE UNITED REPUBLIC OF TANZANIA

NATIONAL AUDIT OFFICE

Telegram: Ukaguzi

Telephone: 255 22 2115157/8

Fax: 255 22 2117527

E-mail: ocag@nao.go.tz

Website: www.nao.go.tz

Office of The Controller and Auditor General,

National Audit Office,

Samora Avenue/Ohio Street,

P.O.Box 9080,

Dar es salaam

To: Permanent Secretary and Paymaster General,

Ministry of Finance,

P.O. Box 9111,

1 Madaraka Street,

11468 DAR ES SALAAM.

RE: REPORT OF THE CONTROLLER AND AUDITOR GENERAL ON THE

CONSOLIDATED FINANCIAL STATEMENTS OF THE GOVERNMENT OF THE

UNITED REPUBLIC OF TANZANIA FOR THE YEAR ENDED 30TH JUNE, 2015

Introduction

I have audited the Consolidated Financial Statements of the Government of the

United Republic of Tanzania which comprises of the Statement of Financial Position,

Statement of Financial Performance, Statement of Changes in Net Assets and

Accounting Policies, Cash Flows Statement, Statement of Comparison of Budget and

Actual Amounts and Notes to the Financial Statements for the year ended 30th June,

2015 as shown in Annexure I of this report.

Management Responsibility for the Financial Statements

The preparation of the Financial Statements is the responsibility of the management

of the Ministry of Finance as per the Statement of Management Responsibility on the

Financial Statements enclosed in this report as Annexure II.

mailto:ocag@nao.go.tzhttp://www.nao.go.tz/

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Sect. 25(4) of the Public Finance Act No. 6 of 2001 (revised 2004), places

responsibility on the Accounting Officer to prepare financial statements for each

financial year which presents true and fair view of the Financial Position, Financial

Performance and Cash Flows for the year then ended. It also, requires management

to ensure that the reporting entity keeps proper accounting records, which will

disclose with reasonable accuracy its Financial Position of the reporting entity and

its responsibility in safeguarding the assets of the reporting entity.

Responsibilities of the Controller and Auditor General

My responsibility as an auditor is to express an opinion on these Financial Statements

based on my audit. I conducted my audit in accordance with International Standards

of Supreme Audit Institutions and such other procedures I considered necessary in

the circumstances. These standards require that I comply with ethical requirements

and plan and perform the audit to obtain reasonable assurance whether the Financial

Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts

and disclosures in the Financial Statements. The procedures selected depend on the

auditors 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, I considered the internal control relevant to the Ministry of Finances

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 internal control of the Ministry of

Finance. An audit also includes evaluating the appropriateness of accounting policies

used and the reasonableness of accounting estimates made by the management, as

well as evaluating the overall presentation of the Financial Statements.

In addition, Sect. 10 (2) of the PAA No. 11 of 2008 requires me to satisfy myself that

the accounts have been prepared in accordance with the appropriate accounting

standards.

Further, Sect 48(3) of the Public Procurement Act No.7 of 2011 and Regulation 269(1)

of the Public Procurement Regulations, 2013 requires me to state in my annual audit

report whether or not the auditee has complied with the provisions of the Law and

its Regulations.

I believe that the audit evidence I have obtained is sufficient and appropriate to

provide a basis for my audit opinion.

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Basis of Qualified Opinion:

This qualified opinion has been issued on the basis of the following matters:

(i) Absence of Actuarial Valuation for Provision of Government Pension TZS

597.7 billion

Paragraph 59 of IPSAS 25 states that, Accounting for Defined Benefit Plans is complex,

because actuarial assumptions are required to measure the obligation and the

expense, and there is a possibility of actuarial gains and losses. Also, the obligations

are measured on a discounted basis, because they may be settled many years after

the employees render the related service.

My review of the Consolidated Financial Statements together with the Controlled

Entities (Individual financial statements) revealed that the Government operates

Defined Benefit Plan for provision of pension funds. I noted that the Government

recognized and disclosed in Note 59 of the Consolidated Financial Statement TZS.

597.7 billion as provisions for Pensioners. However, no actuarial valuation has been

conducted to determine the actual liabilities due to the Government as required by

IPSAS 25. In absence of an actuarial valuation to professionally determine the

Government pension obligations for its retirees, the reported figures in the

Consolidated Financial Statements may be misstated. Thus, lack of actuarial

valuation also makes it difficult to determine the actuarial gains and losses that may

accrue.

(ii) Biological Assets Not Properly Classified - TZS 83.993 Billion

Para 39 and 42 of IPSAS 27 requires an entity to provide a description of Biological

Assets that distinguishes between consumable and bearer Biological Assets and

between Biological Assets held for sale and those held for distribution at no charge

or for a nominal charge. An entity is also encouraged to distinguish between mature

and immature Biological Assets, as appropriate.

I noted that the Biological Assets valued at TZS 83.993 billion as disclosed under Note

66 of the Revised Consolidated Financial Statement, were not categorized and

disclosed into consumable and bearer biological assets as required by Para 39 of IPSAS

27. Further, my review of the Controlled Entities Financial Statements noted that,

Biological Assets such as fish, poultry and livestock were classified under category of

dairy cattle contrary to Para 6 of IPSAS 27. Also, I observed that the Accounting

Procedure Manual does not provide procedures for reporting Biological Assets to

Controlled Entities. Lack of guideline raises my concerns on how to report and

disclose biological assets in their respective categories as the reported figure for such

assets may not be fairly stated.

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(iii) Use of Un-Audited Figures in the Consolidated Financial Statements

My review of the figures in the Consolidated Financial Statements of the sample

Controlled Entities with the audited figures of the Individual Financial Statements of

the Controlled Entities noted significant discrepancies. I observed that the

consolidation process started while the audits of Individual Financial Statements

were in progress and unaudited financial statements which were subject to a number

of adjustments were used in the process. Differences of the figures reported on the

audited individual financial statements and the figures actually used in the

consolidation might impair the reliability of the Consolidated Financial Statements

and misstate the Consolidated Financial Statements.

Qualified Opinion

In my opinion, except for the possible effects of the matters described in the basis

for qualified opinion paragraph above, the Financial Statements present fairly, in all

material respects the Financial Position of the Consolidated Financial Statements as

at 30th June, 2015, its Financial Performance and its Cash Flows for the year then

ended in accordance with the International Public Sector Accounting Standards

(IPSAS) under the Accrual basis of accounting.

Report on Other Legal and Regulatory Requirements

Compliance with Procurement Legislation

In view of my responsibility on the procurement legislation, and taking into

consideration the procurement transactions I have reviewed as part of this audit. I

state that the Accountant General (Consolidated Financial Statements) has generally

complied with the requirements of the PPA No.7 of 2011 and its underlying

Regulations of 2013.

CONTROLLER AND AUDITOR GENERAL

March, 2016

THE UNITED REPUBLIC OF TANZANIA CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30th JUNE 2015 TABLE OF CONTENTS

Page

General Information 1

Statement by the Honorable Minister for Finance 2 3

Statement by the Pay Master General 4 5

Statement of Management Responsibility 6

Commentary on the Financial Statement 7 14

Financial Statements:

Consolidated Statement of Financial Position 15

Consolidated Statement of Financial Performance 16

Consolidated Statement of change in Net asset 17

Consolidated Statement of Cash Flows 18

Consolidated Statement of Comparison of Budget and Actual Amount 19

Notes to the Consolidated Financial Statements

1. General Information 20

2. Statement of Compliance and Basis of Preparation 20

3. Scope of Consolidation 21

4. Authorization Date 21

5. Reporting Entity 21 26

6. Summary of Significant Accounting Policies 27 37

7. Significant Accounting Judgments, Estimates and Assumptions 38

8. Transitional Provisions 38

9. Segmental Information (By General Government and By Ministry) 39 56

10. Future Changes in Accounting Policies 57

11. Exchange Rates 57

12. Original and Final Approved Budget and Composition of Actual and Budget Amounts 58

13. Risk Management 58

14. Elimination of Inter-Entity Transactions 59 64

15. Exchequer Issued/Received and Transfers made/Received 65 68

16. Analysis of Receipts on Tax, Non-Tax, Grant and Borrowing 69 71

17. Taxes/Levies 72 74

18. Tax Expense by Entities 74

19. Fees, Fines, Penalties and Licenses 74

20. Exchequer/Transfers/Subsidies From/(To) Other Government Entities 75

21. Revenue Grants 75

22. Revenue from Exchange Transactions 76

23. Finance Income 76

24. Social Contribution (Revenue) 76

25. Other Revenue 76

26. Gain on Foreign Currency Translation 76

27. Gain on Disposal of Assets 77

28. Wages, Salaries and Other Employee Benefits 77

29. Social Benefits 77

30. Supplies and Consumables Used 78

31. Maintenance Expenses 78

32. Grants/Subsidies/Other Transfers Payments to Non-Government Entities 79

33. Interest Expenses 81

34. Other Expenses 81

35. Cash and Cash Equivalent 81

36. International Monetary Fund (IMF) Related Balances 82

37. Foreign Currency Marketable Securities 83

38. Equity Investments 84

39. Government Securities 84 85

40. Advances To/(From) the Government 85

41. Receivables and Prepayments 85 86

42. Loans Issued 86

43. Inventories 86 87

44. Deferred Currency Cost 87

45. Other Financial Assets 87

46. Investment Properties 88

47. Non-Current Assets Held-For-Sale 88

48. Payables and Accruals 88

49. Currency in Circulation 89

50. Deposits Banks and Non-Bank Financial Institutions 89

51. Deposits Government Entities 89

52. Deposits Others 90

53. Foreign Currency Financial Liabilities 91

54. Short Term Borrowings 91

55. Long Term Borrowings 92

56. Bank of Tanzania (BoT) Liquidity Papers 92

THE UNITED REPUBLIC OF TANZANIA CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30th JUNE 2015 TABLE OF CONTENTS (Continued)

Page

57. Other Financial Liabilities 92 93

58. Employee Benefits 93

59. Provisions 94

60. Deferred Income 94

61. Tax Payable/(Recoverable) 95

62. Operating Leases 95

63. Community/Third-Party Contributions 95

64. Property, Plant and Equipment 96

65. Intangible Assets 97

66. Biological Assets 98

67. Investments in Associates and Joint Ventures 99 101

68. Statement of Guarantees 102 103

69. Funds Operating with Ministries, Departments and Agencies (MDAs) 104

70. Analysis of Basket Fund Accounts Balances 105

71. Loans Issued by the Treasury Registrar 106

72. Statement of Public Debts 107 109

73. Statement of Outstanding Liabilities (Office of the Treasury Registrar) 110 111

74. Analysis of External Sources and Internal Borrowing 112 114

75. Statement of D-Fund 115 116

76. Contingent Liabilities 117 118

77. Statement of Losses 119

78. Credit Risk 120

79. Liquidity Risk 121

80. Capital Commitments 122

81. Related Party Disclosure 122

82. Number of Employees 123

83. Events after the Reporting Date 123

84. Natural Resources and Tourism 123 125

Appendices:

Individual Financial Statements (Ministries and Departments) 126 143 Individual Financial Statements (Regions) 144 155 Individual Financial Statements (Commissions) 156 167 Individual Financial Statements (Local Government Authorities) 168 260 Individual Financial Statements (Water Sector) 261 278 Individual Financial Statements (Financial Institutions) 279 284 Individual Financial Statements (Commercial Public Sector Entities) 285 296 Individual Financial Statements (Hospitals) 297 299 Individual Financial Statements (Academic Institutions) 300 317 Individual Financial Statements (Agencies) 318 329 Individual Financial Statements (Authorities) 330 341 Individual Financial Statements (Professional Boards) 342 344 Individual Financial Statements (Food/Crop Boards) 345 350 Individual Financial Statements (Centres) 351 353 Individual Financial Statements (Councils) 354 359 Individual Financial Statements (Institutes) 360 365 Individual Financial Statements (Others: Bureaus; Funds, Departments/Units and Other Boards) 366 377 Individual Financial Statements (Presidents Office [PO]) 378 383 Individual Financial Statements (Vice Presidents Office [VPO]) 384 386 Individual Financial Statements (Prime Ministers Office [PMO]) 387 392 Individual Financial Statements (PMO Regional Administration and Local Government [PMO RALG]) 393 395 Individual Financial Statements (Ministry of Agriculture, Food Security & Cooperatives [MoAFSC]) 396 401 Individual Financial Statements (Ministry of Communication, Science and Technology [MoCST]) 402 407 Individual Financial Statements (Ministry of Community Development, Gender & Children [MoCDGC]) 408 410 Individual Financial Statements (Ministry of Defense and National Service [MoDNS]) 411 413 Individual Financial Statements (Ministry of East Africa Cooperation [MoEAC]) 414 416 Individual Financial Statements (Ministry of Education and Vocational Training [MoEVT]) 417 428 Individual Financial Statements (Ministry of Energy and Minerals [MoEM]) 429 431 Individual Financial Statements (Ministry of Finance [MoF]) 432 447 Individual Financial Statements (Ministry of Foreign Affairs and International Cooperation [MoFAIC]) 448 450 Individual Financial Statements (Ministry of Home Affairs [MoHA]) 451 453 Individual Financial Statements (Ministry of Health and Social Welfare [MoHSW]) 454 459 Individual Financial Statements (Ministry of Information, Culture and Sports [MoICS]) 460 462 Individual Financial Statements (Ministry of Industry and Trade [MoIT]) 463 474 Individual Financial Statements (Ministry of Justice and Constitutional Affairs [MoJCA]) 475 480 Individual Financial Statements (Ministry of Livestock Development and Fisheries [MoLDF]) 481 483 Individual Financial Statements (Ministry of Labour, Employment and Youth Development [MoLEYD]) 484 486 Individual Financial Statements (Ministry of Land and Human Settlement [MoLHS]) 487 489 Individual Financial Statements (Ministry of Natural Resources and Tourism [MoNRT]) 490 495 Individual Financial Statements (Ministry of Transport [MoT]) 496 501 Individual Financial Statements (Ministry of Works [MoW]) 502 507 Individual Financial Statements (Ministry of Water [MoWI]) 508 510 Individual Financial Statements (Embassies included in MoFAIC) 511 522

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THE GOVERNMENT OF TANZANIA CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30th JUNE 2015

GENERAL INFORMATION

The United Republic of Tanzania is located in Eastern Africa within Longitude 290 to 410 Latitude 10 and 120. The United Republic of Tanzania was formed out of the union of two sovereign states namely Tanganyika and Zanzibar. The two sovereign republics formed the United Republic of Tanzania on 26 th April, 1964.

His Excellence Dr. Jakaya Mrisho Kikwete was the President of the United Republic of Tanzania, who

led the country from 21 December 2005 to 5th November, 2015. His Excellence Dr. John Pombe Magufuli was elected to be the President of the United Republic of Tanzania thereafter.

H. E. Dr. Jakaya Mrisho Kikwete

H. E. Dr. John Pombe Magufuli

It is the responsibility of the Government to ensure that all entities in the Public Sector keeps proper books of accounts that complies with the Generally Accepted Accounting Principles, Public Finance Act of 2001 (revised 2004) and International Public Sector Accounting Standards (IPSAS) as may be prescribed by the Paymaster General. These financial statements comprise the United Republic of Tanzania entities, Tanzania Mainland.

Public Sector is the part of national economy providing basic goods or services that is either not, or cannot be, provided by the private sector. The portion of an economic system that is controlled by national, state or Regional, Executive Agencies and Commissions, State owned Enterprises, Parastatals

and other Government Departments and local governments.

PRINCIPAL PLACE OF BUSINESS

MINISTRY OF FINANCE TREASURY 1 MADARAKA AVENUE, P.O.BOX 9111, 11468 DAR ES SALAAM - TANZANIA

BANKER

BANK OF TANZANIA 2 MIRAMBO STREET P.O.BOX 2939, 11884 DAR ES SALAAM - TANZANIA.

RESPONSIBILITY FOR NATIONAL CONSOLIDATION ACCOUNTS

PAYMASTER GENERAL MINISTRY OF FINANCE P.O.BOX 9111 1 MADARAKA AVENUE 11468 DAR ES SALAAM TANZANIA

LAWYERS

ATTORNEY GENERAL THE ATTORNEY GENERAL CHEMBERS 20 KIVUKONI STREET P.O.BOX 9050 11466 DAR ES SALAAM TANZAINA

AUDITORS

CONTROLLER AND AUDITOR GENERAL THE NATIONAL AUDIT OFFICE, AUDIT HOUSE 6 SAMORA AVENUE/OHIO STREET P.O.BOX 9080 11474 DAR ES SALAAM TANZANIA

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THE UNITED REPUBLIC OF TANZANIA CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30th JUNE 2015 STATEMENT BY THE HONORABLE MINISTER FOR FINANCE

In the financial year 2014/15 the overall performance of the economy has been satisfactory, despite some shocks experienced such as currency devaluation and instability of oil prices in the world market that continued to impact on the cost of production and service delivery. The real Gross Domestic Product (GDP) for 2014 was 7.0 percent as compared to 7.3 percent in 2013. The sectors with leading growth rates during this period were Construction (14.1%), Transportation and Storage (12.5%), Financial Sector and Insurance activities (10.8%), Trade and Repairs (10.5%), mining (9.4%), electricity (9.4%) and communication (8.0%). Agriculture sector which contributed about 28.9% to GDP growth in 2014 grew by 3.4% as compared to 4.3% in 2013. This was attributed mainly to unfavorable prices in the world market as well as adverse weather conditions in the particular year. GDP growth for first quarter in 2015 was 6.5 percent Compared to 7.1 percent in the first quarter of 2014. Growth for the rest of 2015 strengthened on account of increase in production of traditional export crops due to favorable weather, rising price of coffee, increased production of cement due to new plants (Dangote), and new power plant coming on stream, among other factors. The real GDP growth for June 2015 was 6.8 Compared to 7.0 percent in 2014. The annual GDP for 2014 was TZS 79,442.45 Billion at market price as compared to TZS 53,174.68 Billion in 2013. Income poverty declined from 34.4% in 2007 to 28.2% in 2012 according to the Household Budget Survey report for 2012 done by the National Bureau of Statistics of Tanzania. Similarly, food poverty declined by an average of 2.1% from 11.8% in 2007 to 9.7% in 2013. Moreover, per capita income increased to TZS 1,724,416 in 2014 from TZS 1,582,797 in 2013, equivalent to an increase of 8.9 percent. Government Debt Stock of TZS 2,421.54 billion was paid. The analysis of paid debt stock shows that TZS 1,345.75 was paid for Domestic Debt (principal), TZS 180.78 billion was paid for External Debt (principal), TZS 662.73 billion was paid for Domestic Debt (interest) and TZS 232.28 billion was paid for External Debt (interest). The public debt has continued to increase, from TZS 28,498.12 Billion in

2013/2014 to TZS 33,677.54 Billion in 2014/15. Annual Headline Inflation Rates have continued to decline reaching inflation rate of 6.1% in 2014 from that of 7.9% in 2013. Moreover, inflation rate in June, 2015 was 6.1% compared to 6.4% in June, 2014.

The Government budget for cash collections from operations was TZS 28,748.67 Billion as passed and approved by the Parliament whereas the actual collections up to the end of 30th June 2015 were TZS 25,158.02 Billion ( from domestic revenue collection and external assistances. Receipts from borrowings

during the year were TZS 1,238.19 Billion (2013/14: TZS 818.13 Billion).

The actual collection by Tanzania Revenue Authority (TRA) for the year 2014/15 was TZS 11,298.30

Billion (Collection from taxes and road toll) as compared to the target of TZS 11,721.01 Billion. This

shows under collection of amount by TZS 422.71 Billion. The actual revenue from social contributions

was TZS 1,200.61 Billion (2014: TZS 1,111.81 Billion), and collection from other non-tax revenue was

TZS 7,565.46 Billion (2014: TZS 7,244.23 Billion). Total Government revenue for the year ended 30th

June 2015 was TZS 0.82 Billion (2014: TZS 26,785.39 Billion). External Assistance budget was TZS 4,261.60 Billion out of which TZS 1,447.28 Billion was grant and TZS 2,814.32 Billion was loan. Actual assistance received was TZS 1,974.43 Billion whereas TZS 461.37 Billion was grant and TZS 1,513.06 Billion was loan. Total amount of TZS 17,037.98 Billion which include domestic revenue and external assistance was transferred to Exchequer account during the year to finance Government activities.

The expenses for the year ended 30th June, 2015 were TZS 19,392.86 Billion as compared to TZS

25,996.92 Billion for the year ended 30th June, 2014 which records a decrease of TZS 6,604.06 Billion.

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THE UNITED REPUBLIC OF TANZANIA CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30th JUNE 2015 STATEMENT BY THE HONORABLE MINISTER FOR FINANCE (Continued) Gross official reserve decreased to USD 4,285.0 million in June, 2015 as compared to USD 4,637.7 million in

June, 2014. Despite the decrease, the amount is sufficient to cover 4 months of projected imports of goods and services excluding those financed by Foreign Direct Investment. The Governments balance sheet showed total assets of TZS 58,555.08 Billion (2013/2014: TZS 69,273.09 Billion). The Government is still in the transitional provision of five years as per IPSAS 17 Property, Plant and Equipment; hence some items of property, plant and equipment have not been recognized in the statement of financial position. Already three years of transitional provisional have been enjoyed so far with the remaining two years at hand for which major reforms on asset realization is expected. The public debt has continued to increase, from TZS 28,318.22 Billion in 2013/2014to TZS 33,546.13 Billion in 2014/2015. The Governments fiscal strategy is to run growing operating surpluses in the coming years so that the debts can be repaid and settled accordingly. The budgeting system has continued to be on Cash basis, in which it uses to allocate available resources; capacity building for personnel has been carried out so as to maintain high quality service delivery. In order to ensure value for money expenditure tracking and projects auditing have been conducted for the aim of ensuring that funds were used for intended purpose. In enhancing and promoting accountability, the Government has continued to pursue measures to strengthen control and make the authority be more accountable in the use of public funds and other resources in general. The financial year 2014/2015 was the third year of implementation of reviewed migration strategic plan of five year (2012/2013 2016/2017). The development of this Strategic Plan took into account Tanzania Development Vision 2025, Tanzania Five Years Development Plan 2011/2012 2015/2016, The National Strategy for Growth and Reduction of Poverty (NSGRP). The priority sectors, as outlined in MKUKUTA II and Planning and Budget Guidelines have continued to be the areas of focus in resources allocation. The Government is implementing the National Strategy for Growth and Reduction of Poverty (MKUKUTA) so as to ensure achievement of the National Vision 2025 and other Policy targets. The Government will continue ensuring consistent coordination of fiscal and monetary policies in order to ensure macroeconomic stability in the economy. Thus for the Financial Year 2015/2016 the Government will continue to strengthen and improve domestic revenue collection by taking different tax and non-tax administration measures including reduction of Tax exemption, enforcing compliance to tax laws, promoting usage of EFD machines, publishing the names and entities benefited with exemption issued and promoting voluntary compliance to taxpayers.

The financial statements for the year ended 30th June 2015, have been prepared in compliance with the Accrual Basis of International Public Sector Accounting Standards (IPSAS). The Government has continued to improve the presentation and preparation process of financial statements with the guidance of Transitional Provision which has been adopted to ensure proper accounts are prepared as the IPSAS may require. Such provisions include section 65 of IPSAS 6, section 95 of IPSAS 17 and section 116 of IPSAS 23.

16th March 2016 __________________________ _____________________ Hon. Dr. Philip Mpango (MP) Date Minister for Finance & Planning

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THE UNITED REPUBLIC OF TANZANIA CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30th JUNE 2015 STATEMENT BY THE PAYMASTER GENERAL

The Government financial reports for the year ended 30th June 2015 have been prepared in accordance with the provisions of the Public Finance Act of 2001 (as revised in 2004), and International Public Sector Accounting Standards (IPSAS) Accrual Basis of Accounting. The Government continues to promote transparency and accountability in managing the public resources and enhancing public finance management reforms by making sure that all guidelines issued by the International Federation of Accountants (IFAC) and requirements prescribed by National Board of Accountants and Auditors are complied with.

Moreover, in some cases IPSAS permits more than one accounting treatment for a transaction or event. The preparations of these financial statements have keenly selected the treatment that is most relevant to the activities of the Government and its controlled entities and the relevant circumstances of the selected accounting policies. MANDATE

Section 25(1) of the Public Finance Act 2004 (As amended in 2004) requires that the Accountant General to prepare and transmit the consolidated financial statements to the Controller & Auditor General in accordance with the requirement of International Public Sector Accounting Standards (IPSAS).

The mandate of consolidated financial statements for the year ended 30th June 2015 as required by Section 7 (1) of the Public Finance Act 2001 (amended in 2004) is hereby presented. This year the consolidated financial statements have been prepared to include 553 entities which are, Ministries, Departments, Agencies, Regional Secretariats, Local Governments Authorities and other Public Sector Entities, and submitted for audit to ensure compliance with IPSAS 6 Consolidated and Separate Financial Statements for the year ended 30th June 2015. CONSOLIDATION PROCESS

Goals for Consolidation and this report

The consolidated financial statements are meant to provide information on the performance as well as National Governments ability to meet current and future obligations by:

Presenting the consolidated monetary value of national government (assets, liabilities, revenues and expenditure).

Improving the users understanding of public sector financial management to the resources entrusted to enhance the achievement of governments social objectives and priorities.

Creating uniformity in the presentation and analysis of public sector financial information. SCOPE OF CONSOLIDATION

Consolidated financial statements have been consolidated by both General Government classification and Ministry-Wise. General Government classification shows the nature of the respective entities whereas Ministry-wise consolidation shows what entities are controlled directly by the respective Ministry. In accordance with the definition of a public entity in the PFA 2001 and IPSAS, the Accountant General has determined that accountability to Parliament (or Legislature) for the use of public funds/resources must be the driver and consider this to be the primary criterion for including entities in the consolidation with ownership control by government being assumed to exist in such cases.

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THE UNITED REPUBLIC OF TANZANIA CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30th JUNE 2015 STATEMENT BY THE PAYMASTER GENERAL (Continued) ACCOUNTING POLICIES

Accounting policies of entities are adjusted to be on a uniform basis where the effect thereof is deemed to be material to the consolidated financial statements for the year ended 30 th June 2015.

IPSAS 3 Accounting policies, Changes in Accounting Estimates and Errors requires the reporting entity to select and apply its accounting policies consistently for similar transactions, events and/or conditions, unless a standard specifically requires or permits categorization of items for which different policies may be appropriate. Where a standard requires or permits such categorization, an appropriate accounting policy is selected and applied consistently to each category. Therefore, once a choice of one of the alternative treatments has been made, it becomes an accounting policy and must be applied consistently. Changes in accounting policy should only be made if required by a standard, or if the change results in the financial statements providing more reliable and relevant information.

Associates and Joint Ventures have been recorded in these financial statements using the equity basis of accounting. TREATMENT OF COMMERCIAL PUBLIC SECTOR ENTITES (CPSEs)

The authoritative guidance that governs the issues of consolidation of the CPSEs is obtained in IPSAS 6. ELIMINATION

In the consolidated financial statements for the year ended 30 th June 2015 all material balances and transactions between entities included in this consolidated financial statements are eliminated. The office of Accountant General developed an inter-entity elimination template that each entity completed, authorizes and then submitted to the Ministry of Finance to be consolidated.

The Financial Statements presented are consolidated statement of financial position, consolidated statement of financial performance, consolidated statement of comparison of budget against actual amounts, consolidated statement of cash flows, consolidated statement of change in net asset/equity and notes to the financial statements as required by IPSAS and Public Finance Act.2001 (as revised in 2004). In order to provide more information in the consolidated financial statements, schedules to the financial statements are also provided.

The Government is committed to further strengthening Public financial management system through the implementation of Public Financial Management Reform Programme (PFMRP IV). For the purpose of improving Public Service delivery the Government will continue to promote sound and effective Financial Management Systems. The implementation of Public Financial Management Reform Programme phase IV envisions improvement in the Public Financial Management with particular focus on tools, techniques, methods and procedures of financial management.

The Government will focus on enhancing the utilization of Integrated Financial Management System (IFMS) in order to control the use of the Public Finances in the Central and Local Government Authorities. Moreover, the Government will continue to facilitate training on preparations of Financial Statements by using International Public Sector Accounting Standards.

The Government will continue to strengthen the capacity of the Internal Auditor General Department, in order to ensure that the use of the Public Finance and procurement procedures and regulations are followed properly.

16th March 2016 _____________________ _____________________ Dr. Servacius .B. Likwelile Date Paymaster General

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THE UNITED REPUBLIC OF TANZANIA CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30th JUNE 2015 MANAGEMENTS RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTS

Management is responsible for the preparation and fair presentation of these Consolidated Financial Statements in accordance with International Public Sector Accounting Standards (IPSAS) on Accrual Basis, in conformity with the provision of the Public Finance Act No. 6 of 2001 Section 25(1) (as revised in 2004) and for such internal control as the management determines is necessary to enable the preparation of consolidated 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 which provide reasonable assurance that the transactions recorded are within statutory authority, and properly record the use of all public financial resources by the Government. Nothing has come to the attention of the Management to indicate that the Government will not remain a going concern for the next twelve months from the date of this Consolidated Statements. To the best of our knowledge, the system of internal control has operated adequately throughout the reporting period and that the records and underlying accounts provide a reasonable basis for the preparation of the Financial Statements for the year ended 30 th June, 2015 Procurement of goods, works and consultancy and non consultancy service to the extent that they are reflected in these financial statements have been done in accordance with the Public Procurement Act, 2011 and its Regulations of 2013.

16th March 2016 _________________________________________ __________________________________________

Francis Mwakapalila Date Accountant General

We accept responsibility for the integrity of these financial statements, the information they contain and their compliance with the Public Finance Act No. 6 of 2001 (as revised in 2004) and International Public Sector Accounting Standards (IPSAS) Accruals basis.

16th March 2016 _________________________________________ __________________________________________

Dr. Servacius .B. Likwelile Date Paymaster General

In our opinion, the consolidated financial statements present fairly in all material respects, the financial position of the Government as at 30th June, 2015, and its financial performance and cash flows for the year then ended in accordance with International Public Sector Accounting Standards.

16th March 2016 _________________________________________ __________________________________________

Hon. Dr. Philip Mpango (MP) Date Minister for Finance & Planning

7

THE UNITED REPUBLIC OF TANZANIA CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30th JUNE 2015 COMMENTARY ON THE FINANCIAL STATEMENTS 1. INTRODUCTION

The Financial Statements for the financial year 2014/2015 provide a record of the Government of United Republic of Tanzania (Tanzania Mainland) financial performance, financial position, cash flows, change in net assets/equity, notes to the financial statements and withdrawals from the consolidated fund for the year ended 30th June, 2015.

2. ACCOUNTS COMMITTEES OF THE PARLIAMENT The Public Accounts Committee (PAC) and Local Authorities Accounts Committee (LAAC) as oversight body of the Government financial statements were established under the Constitution of URT (1977) Article 96(1) & (2) and the Parliamentary Standing Orders (2013), Order No.118 (1) and Addendum No 8 of the orders. In the year ended 30th June, 2015 the Committees comprised of: The members of the Public Accounts Committee as at 30th June 2015 were as follows:

No. Name Position Constituency / Special Seats

1 Hon. Zitto Kabwe Zuberi * Chairman Constituency Kigoma Northern

2 Hon. Filikunjombe, Deo Haule Vice Chairman Constituency Ludewa

3 Hon. Amina M. Mwidau** Member Special Seats Tanga

4 Hon. Asha Mshimba Jecha Member Constituency Kwamtipura

5 Hon. Vullu, Zaynab Matitu Member Special Seats Coast

6 Hon. Owenya, Lucy Fidelis Member Special Seats Kilimanjaro

7 Hon. Kheri Ali Khamis Member Constituency Kwamtipura Zanzibar

8 Hon Ester Nicholas Matiko Member Special Seats - Mara

9 Hon. Keissy, Ally Mohamed Member Constituency Nkasi North

10 Hon. Hezekiah N. Chibulunje Member Constituency Chilonwa

11 Hon. Abdul Jabir Marombwa Member Constituency - Kibiti

12 Hon. Faida Mohamed Bakar Member Special Seats Zanzibar

13 Hon. Dr. Hadj H. Mponda Member Constituency - Ulanga

14 Hon. Mipata, Deusderius John Member Constituency Nkasi South

15 Hon. Kombo, Kombo Khamis Member Constituency Mgogoni Zanzibar

16 Hon. Kilufi, Modestus Dickson Member Constituency Mbarali

17 Hon. Kawawa, Zainab Rashid Member Special Seats - Mtwara

18 Hon. Magige, Catherine V Member Special Seats

19 Hon. Kayombo, Gaudence Cassian Member Constituency Mbinga East

20 Hon. Rage, Ismail Aden Member Constituency Tabora

21 Hon. Lolesia J. Bukwimba Member Constituency Busanda * Hon. Kabwe Zitto Zuberi was the Chairperson of the Committee up to March, 2015

** Hon. Amina M. Mwidau took the Chairpersonship of the Committee for March, 2015 June, 2015

8

THE UNITED REPUBLIC OF TANZANIA CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30th JUNE 2015 COMMENTARY ON THE FINANCIAL STATEMENTS (Continued) 2. ACCOUNTS COMMITTEES OF THE PARLIAMENT (Continued)

The members of the Local Government Accounts Committee as at 30th June 2015 were:

No. Name Position Constituency / Special Seats

1 Hon. Mohammed, Rajab Mbarouk Chairperson Constituency Ole Chake Chake Pemba

2 Hon. Zedi, Selemani Jumanne Deputy Chairperson

Constituency Bukene Tabora

3 Hon. Lugola, Alphaxard Kangi Ndege Member Constituency Mwibara Bunda

4 Hon. Tambwe, Munde Abdallah Member Special Seats Tabora

5 Hon. Mturano, Philipa Geofrey Member Special Seats Dar es salaam

6 Hon. Abeid, Bahati Ali Member Special Seats Zanzibar

7 Hon Hamad, Azza Hillal Member Special Seats Shinyanga

8 Hon. Nassir, Yusuph Abdallah Member Constituency Korogwe Town

9 Hon. Natse, Rev. Israel Yohana Member Constituency Karatu Arusha

10 Hon. Ruhwanya, Mhonga Said Member Special Seats Kigoma

11 Hon. Kigola, Mendrad Lutengano Member Constituency Mufindi South Iringa

12 Hon. Nyimbo, Tauhida Cassian Galos Member Special Seats Zanzibar

13 Hon. Bura, Felister Aloyce Member Special Seats Dodoma

14 Hon. Maige, Ezekiel Magolyo Member Constituency Msalala Shinyanga

15 Hon. Mchuchuli, Kuruthum Jumanne Member Special Seats Ikwiriri Rufiji

16 Hon. Katagira, Eustace Osler Member Constituency Kyerwa Bukoba

17 Hon. Majaliwa, Kassim Majaliwa Deputy Minister

Constituency Ruangwa

18 Hon. Issa, Yahya Kassim Member Constituency Chwaka Zanzibar

19 Hon. Mwanri, Aggrey Deaisile Joshua Deputy Minister

Constituency Siha

20 Hon. Ghasia, Hawa Abdulrahman Minister Constituency Mtwara Village

3. SUMMARY

The table below shows a snapshot of financial performance or position for the year ended 30th June 2015:

2014/15 TZS Billion

2013/14 TZS Billion

Revenue 22,169.79 26,785.39

Expenses 0.06 0.02

Total Assets 58,555.08 69,273.09

Public Debt (Borrowings) 33,677.54 28,318.22

Total Liabilities (Including Public Debt) 58,066.86 56,477.77

Net Assets 488.22 12,795.32

9

THE UNITED REPUBLIC OF TANZANIA CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30th JUNE 2015 COMMENTARY ON THE FINANCIAL STATEMENTS (Continued)

4. BUDGET

The budget is approved on a cash basis by function classification. The approved budget covers the fiscal period from July 01, 2014 to June 30, 2015 and includes all activities within the Government of United Republic of Tanzania. The original and final budget was approved by Parliament on June, 2014. The budget objectives and policies, and subsequent revisions are explained more fully in operational Review and Budget Outcomes reports issues in conjunction with the financial statements.

5. TAXES AND LEVIES

The Government through Tanzania Revenue Authority collected TZS 10,556.52 Billion for the financial year ended 30th June, 2015 as compared to the estimate of TZS 11,318.22 Billion.

6. EXCHEQUER ISSUES

Exchequer issues of TZS 17,037.98 Billion for the year ended 30th June, 2015 were released by the Government in lieu of MDA, Regional Secretariats, LGAs and other Government entities as compared to TZS 16,063.18 Billion for the financial year 2013/2014 recording an increase of TZS 974.80 Billion equivalent to 5.7 % increase.

7. EXTERNAL ASSISTANCE AND INTERNAL BORROWINGS

The estimate for budget support which included external assistance and internal borrowings for the year ended 30th June, 2015 was TZS 7,216.82 Billion. This amount is made of external assistance TZS 4,261.96 Billion from grant, loan and concessional loan; internal borrowings budget was TZS 2,265.66 Billion for rollover and new financing whereas the actual amount received for external assistance and internal borrowing for the year ended 30 th June, 2015 was TZS 5,654.15 Billion. Out of this amount external assistance was TZS 3,170.32 Billion which include grant, loan and concessional loan; internal borrowing was TZS 2,483.83 Billion for rollover and new financing.

8. EXPENSES

The overall Government expenses for the financial year 2014/15 were TZS 0.06 Billion (2013/14:

TZS 0.02 Billion). Areas which contributed to high expenditures include the payment of wages, salaries and employment benefits, supplies and consumable used, and social benefits.

9. TOTAL ASSETS

The total assets at the end of the year 2014/15 were TZS 58,555.08 Billion compared to TZS

69,273.09 Billion in 2013/14. One of the reasons for the decrease is elimination of inter-entity transactions.

10

THE UNITED REPUBLIC OF TANZANIA CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30th JUNE 2015 COMMENTARY ON THE FINANCIAL STATEMENTS (Continued)

10. CONTINGENT LIABILITIES

Total contingent liabilities for the year ended 30th June, 2015 amounted to TZS 609.93 Billion as compared to TZS 526.24 Billion reported in the ended 30th June, 2014 showing an increase of TZS 84.68 Billion. This comprise of outstanding legal proceedings whose outcomes were not certain as at the date of this report as shown in details in the schedule to these financial statements as per

Note 76 of these financial statements.

11. PUBLIC DEBT

Public Debt balance for the financial year ended 30th June, 2015 was TZS 33,677.54 Billion (2013/14: TZS 28,318.22 Billion).

The MDAs public debt comprise of the external debt balance for the year ended 30th June 2015 of TZS 25,549.82 Billion and domestic debt of TZS 8,127.13 Billion. The increase in external debt was due to the following reasons:

i. Disbursement of new borrowing for budget financing during the year under review; ii. Accumulated interest arrears for Non Paris club bilateral creditors pending completion of

negotiations; iii. Disbursed Outstanding Debt which has been received but not yet matured for payment; iv. Technical Arrears on external debt interest payment; v. Exchange rate variations; and vi. Disbursement of new loans in relation to gas pipeline project.

In the financial year 2014/2015, the Government planned to raise TZS 2,955.23 Billion through issuance of Treasury bonds for both budget support and rollover requirements. However, the actual borrowing made by the Government amounted to a total sum of TZS 3,651.83 Billion of which TZS 422.13 Billion was for new financing, TZS 501.76 Billion was for roll over and TZS 2,727.94 Billion was for rollover of maturing treasury bills.

12. FINANCIAL POSITION

a) Property, Plant and Equipment (PPE) During the year ended 30th June, 2015 the Government had additional PPE amounting to TZS 22,527.02 Billion (2013/14: TZS 18,829.13 Billion). There was transfers of PPE to other entities of

TZS 59.27 Billion (2013/14: TZS 154.85 Billion), whereas assets with original cost of TZS 80.38

Billion (2013/14: TZS 48.45 Billion) were disposed. Depreciation charged during the year was TZS

741.91 Billion (2013/14: TZS 656.96 Billion). Impairment ascertained during the year was TZS 1.15

Billion (2013/14: TZS 2.14 Billion).

The carrying value of PPE at the end of the year 2014/15 was TZS 22,527.02 Billion (2013/14: TZS

18,829.13 Billion). The Government is still in the process of valuing its PPE, the exercise which is expected to be completed in 2017, hence some of its PPE items have not been recorded in the financial statements in line with the transitional provisions of IPSAS 17 Property, Plant and Equipment.

11

THE UNITED REPUBLIC OF TANZANIA CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30th JUNE 2015 COMMENTARY ON THE FINANCIAL STATEMENTS (Continued) 12. FINANCIAL POSITION (Continued)

b) Intangible assets

Intangible assets, mainly computer software, had a carrying value of TZS 149.64 Billion (2013/14:

TZS 263.03 Billion). Additions during the year were TZS 32.59 Billion (2013/14: TZS 161.74 Billion)

whereas transfers outwards were TZS 2.49 Billion (2013/14: transfer inward of TZS 0.12 Billion.

Amortisation charge for the year was TZS 14.91 Billion (2012/13: TZS 12.42 Billion).

c) Biological/Agriculture assets

The Governments biological/agriculture assets as at 30th June 2015 were TZS 83.99 Billion

(2013/14: TZS 84.35 Billion). d) Investments in subsidiaries

The investments in State Owned Enterprises have been fully consolidated and eliminated in the financial statements for the year ended 30th June 2015. Subsidiaries which are owned indirectly through other Government entities were incorporated in the financial statements of the respective government entity.

e) Investments in associates and joint ventures

The direct investments in associates and joint ventures at the end of the year were TZS 834.54

Billion (2013/14: TZS 390.13 Billion). This has been accounted for using equity method. Associates and joint ventures which are owned indirectly through other Government entities were

incorporated in the financial statements of the respective government entity. This was TZS 211.37

Billion (2013/14: TZS 337.69 Billion).

Total investments in associates and joint ventures are TZS 1,045.91 Billion (2013/14: TZS 390.13 Billion).

f) Other financial assets

Other financial assets for the year ended 30th June, 2015 were TZS 2,188.52 Billion (2013/14: TZS

4,718.25 Billion). These comprise mainly of treasury bills and bonds, loans issued, quota in International Monetary

Fund (IMF) and Special Drawing Rights (SDR) and Government stock, as shown in note 45.

g) Non-current assets held for sale

As at 30th June, 2015 the non-current assets held for sale were TZS 4.02 Billion (2013/14: TZS

32.17 Billion).

h) Inventories

The inventories were at TZS 1,095.61 Billion (2013/14: TZS 688.05 Billion). The major components of inventories were raw materials of TZS 396.9 Billion (2013/14: TZS 11.72 Billion), medical supplies of TZS 121.20 Billion (2013/14: TZS 131.23 Billion); building materials and equipment of TZS12.85 Billion (2013/14: TZS 129.93 Billion) and various finished goods of TZS 314.32 Billion (2013/14: TZS 230.4 Billion).

12

THE UNITED REPUBLIC OF TANZANIA CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30th JUNE 2015 COMMENTARY ON THE FINANCIAL STATEMENTS (Continued) 12. FINANCIAL POSITION (Continued)

i) Receivables and prepayments

The receivables and prepayments stood at TZS 4,252.75 Billion (2013/14: TZS 754.76 Billion). This was net of provision for impairment of receivables of TZS 357.1 Billion (2013/14: TZS 281.1 Billion).

j) Cash and cash equivalents

Cash and cash equivalent was TZS 4,895.36 Billion (2013/14: TZS 4,195.59 Billion), the analysis of which is detailed in note 36.

k) Deferred income (Revenue Grant)

The deferred income (revenue grant) was TZS 516.37 Billion (2013/14: TZS 735.80 Billion). This relates to items such as cash and inventories.

l) Provisions for expenses

The Government provisions decreased from TZS 816.93 Billion in 2013/14 to TZS 648.65 Billion in 2014/15. m) Employee benefit liabilities

The employee benefit liabilities decreased from TZS 293.78 Billion in 2013/14 to TZS 262.26 Billion in 2014/15.

n) Payables and accruals

Payables and accruals stood at TZS 9,752.51 Billion compared to TZS 6,661.93 Billion in 2013/14. o) Other financial liabilities

Other financial liabilities were TZS 2,764.51 Billion (2013/14: TZS 3,041.40 Billion). p) Deferred income (Capital Grant)

The deferred income (capital grant) was NIL (2013/14: TZS 5,452.41 Billion). The current year grant has been eliminated / transferred to equity under taxpayers fund as it relates to amounts which were transferred by the Treasury to Government entities for capital projects.

q) Net assets The Governments net assets comprise of the taxpayers fund which is the monies invested by the Government to satisfy individual needs or to create future benefits. It includes all monies invested in capital expenditure, accumulated surplus, revaluation surplus and other reserves. This stood at

TZS 488.22 Billion (2013/14: TZS 12,795.32 Billion). The taxpayers fund records a negative balance mainly because of non-recognition of all Governments PPE because of the transitional provisions of IPSAS 17.

13

THE UNITED REPUBLIC OF TANZANIA CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30th JUNE 2015 COMMENTARY ON THE FINANCIAL STATEMENTS (Continued) 13. FINANCIAL PERFORMANCE

Revenue

a) Non-tax revenue

The non-tax revenue was TZS 7,565.46 Billion (2013/14: TZS 7,244.23 Billion). This is comprised of:

TZS 'Billion

TZS 'Billion

Fees, fines, penalties and licenses 1,683.20 1,336.39

Revenue from exchange transactions 3,908.81 3,291.63

Finance income 190.71 339.37

Other revenue 1,782.73 2,276.84

7,565.45 7,244.23

Expenses

a) Wages, salaries and employee benefits

Total wages, salaries and employee benefits was TZS 7,424.11 Billion (2013/14: TZS 6,234.19 Billion). This included basic salary for pensionable employees of TZS 6,020.72 Billion (2013/14: TZS 4,343.55 Billion). b) Supplies and consumables used

The Government incurred a total expenditure of TZS 4,537.32 Billion for the year ended 30th June

2015 compared to TZS 7,382.23 Billion reported in the year ended 30th June, 2014. An elimination of TZS 1,049.58 Billion was eliminated as part of the consolidation process.

c) Routine Maintenance

The Government incurred a total expenditure of TZS 1,346.29 Billion for the year ended 30th June

2015 compared to TZS 793.37 Billion recorded in the year ended 30th June, 2014. d) Current Grants, Transfers and Subsidies

The Government used TZS 19,139.17 Billion being current grant and other transfer payments for

the year ended 30th June, 2015 to other government entities of which TZS 18,357.56 Billion was

eliminated remaining TZS 781.61 Billion compared to TZS 7,522.44 Billion for the year ended 30th June 2014.

e) Treasury Voucher System

The Government used TZS 30.51 Billion for the year ended 30th June 2015 for Treasury Voucher system which is a decrease of 0.49 Billion compared to TZS 31.00 Billion used in the year ended 30th June 2014. This amount was used to pay for tax exemptions in favour of Public Officials, Non-Government Organisations and Religious Organizations is included in the supplies and consumable used.

f) Social Benefits

The total sum of TZS 1,710.04 Billion was incurred for social benefits for the year ended 30 th June

2015 compared to TZS 1,696.10 Billion in 2013/14.

14

THE UNITED REPUBLIC OF TANZANIA CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30th JUNE 2015 COMMENTARY ON THE FINANCIAL STATEMENTS (Continued) 14. AUDITORS

The Controller and Auditor General (CAG) is the statutory auditor for the Government pursuant to the provision of article 143 of the Constitution of United Republic of Tanzania of 1977 (revised 2005) and sections 30 33 of the Public Audit Act No. 11 of 2008.

15. CONCLUSION

The Government of United Republic of Tanzania has continued to enhance transparency and accountability of the available resources for the betterment of Citizens. To accomplish its mission of promoting service deliverance by enhancing the financial management reforms specifically in the preparation of financial statements. In so doing, the financial statements for the year ended 30th June, 2015 have been prepared in compliance with IPSAS Accrual Basis of Accounting. Moreover, the Government continued using International Accounting Standards to increase transparency in public expenditure, accountability and management of Public Resources. These financial statements should be read in conjunction with the underlying notes and schedules for better understanding.

16th March 2016 _________________________________________ __________________________________________

Francis Mwakapalila Date The Accountant General

GOVERNMENT OF TANZANIA

STATEMENT OF FINANCIAL PERFORMANCE

FOR THE YEAR ENDED 30 JUNE 2015

30-June-2015 30-June-2014

TZS '000 TZS '000

Revenue

Taxes 17 10,556,516,678 11,291,746,247

Fees, fines, penalties and licenses 19 1,683,204,648 1,336,391,552

Amortisation of revenue grants 21 1,802,344,105 5,700,420,106

Revenue from exchange transactions 22 3,908,811,834 3,291,628,062

Finance income 23 190,712,825 339,368,921

Social contributions 24 1,200,609,269 1,111,807,513

Amortisation of capital grant 60 0 334,863,726

Other revenue 25 1,782,734,491 2,276,842,138

Fair value gains on investment property 46 379,594,128 876,920,832

Gain on foreign currency translation 26 664,215,798 222,498,108

Reversal of provision for obsolete inventories 43 1,047,262 0

Gain on disposal of assets 27 0 2,900,528

22,169,791,038 26,785,387,733

Expenses

Wages, salaries and employee benefits 28 7,424,109,632 6,234,192,130

Social benefits 29 1,710,039,107 1,696,101,663

Supplies and consumables used 30 4,537,317,058 7,382,233,556

Maintenance expenses 31 1,346,288,781 793,370,042

Grants/subsidies/other transfer payments to other entities 32 781,609,516 7,522,439,345

Interest expenses 33 1,597,456,115 1,256,325,040

Other expenses 34 1,085,733,112 298,443,113

Impairment of receivables 41 92,292,636 42,407,754

Impairment of loans 42 42,588,828 20,408,124

Loss on disposal of assets 27 818,385 0

Provision for obsolete inventories 43 200,891 959,326

Impairment of other financial assets 45 14,067,653 70,730,188

Depreciation of investment property - carried at cost 46 2,283,444 7,765,050

Impairment of investment property - carried at cost 46 29,280 0

Depreciation of property, plant and equipment 64 741,908,275 656,962,880

Impairment of property plant and equipment 64 1,147,244 2,137,282

Amortisation of intangible assets 65 14,907,783 12,418,626

Impairment of intangible assets 65 63,447 22,200

19,392,861,185 25,996,916,319

2,776,929,853 788,471,414

Share of associates surplus/(deficit) 67 82,258,793 19,223,820

Surplus during the year 2,859,188,646 807,695,234

__________________________

Francis Mwakapalila

Accountant General

Notes

15

GOVERNMENT OF TANZANIA

STATEMENT OF FINANCIAL POSITION

FOR THE YEAR ENDED 30 JUNE 2015

30-June-2015 30-June-2014

ASSETS Notes TZS '000 TZS '000

Current assets

Cash and cash equivalents 35 4,895,363,229 4,195,590,295

Holdings of Special Drawing Rights (SDRs) 36 314,608,266 386,432,878

Quota in International Monetary Fund (IMF) 36 552,274,969 507,635,007

Foreign currency marketable securities 37 1,100,722,681 1,226,786,138

Equity investments 38 1,406,544,206 83,077,314

Government securities 39 254,503,888 715,650,529

Receivables and prepayments 41 3,499,841,163 604,348,744

Loans issued 42 1,317,829,918 2,884,592,062

Inventories 43 1,095,614,732 688,053,808

Deferred currency cost 44 107,347,503 154,789,266

Other financial assets 45 1,301,333,290 192,929,884

15,845,983,846 11,639,885,926

Non-current assets

Foreign currency marketable securities 37 4,572,013,588 4,069,396,989

Equity investments 38 3,548,191,639 687,371,215

Government securities 39 1,553,280,387 2,594,360,728

Receivables and prepayments 41 752,913,222 150,410,325

Loans issued 42 3,224,184,212 1,572,132,042

Other financial assets 45 887,186,057 4,525,321,118

Investment properties 46 4,360,741,696 24,097,708,634

Property, plant and equipment 64 22,527,019,649 18,829,132,356

Intangible assets 65 149,638,611 263,032,753

Biological assets 66 83,993,408 84,351,684

Investments in associates and joint ventures 67 1,045,909,636 727,823,995

42,705,072,106 57,601,041,839

Non-current assets held for sale 47 4,022,119 32,167,138

TOTAL ASSETS 58,555,078,071 69,273,094,903

LIABILITIES

Current liabilities

Payables and accruals 48 7,127,913,439 4,910,518,154

Currency in circulation 49 4,094,261,068 3,596,703,122

Deposits - banks and non-bank financial institutions 50 1,537,116,843 950,115,615

Deposits - Government entities 51 64,697,864 13,275,000

Deposits - others 52 445,077,518 473,088,430

Foreign currency financial liabilities 53 467,079,163 550,583,133

IMF related liabilities 36 524,509,360 482,112,690

Allocation of Special Drawing Rights (SDRs) 36 528,982,829 486,225,552

Short-term borrowings 54 5,654,010,085 4,555,484,819

Long-term borrowings - current portion 55 2,053,237,040 179,892,723

BoT liquidity papers 56 403,380,056 1,365,173,365

Other financial liabilities 57 90,064,688 787,161,544

Employee benefits obligations 58 48,652,499 8,473,547

Provisions 59 616,231,643 789,748,052

Tax payable/(receivable) 61 0 932,413,635

Deferred income (Revenue) 21 516,369,510 735,797,016

24,171,583,606 20,816,766,397

Non-current liabilities

Payables and accruals 48 2,624,591,693 1,751,414,329

Deposits - banks and non-bank financial institutions 50 2,345,594,787 2,069,402,094

Deposits - Government entities 51 3,182,078 31,421,658

Deposits - others 52 31,134,603 26,893,166

Foreign currency financial liabilities 53 0 0

Long-term borrowings 55 25,970,297,335 23,762,737,701

BoT liquidity papers 56 0 0

Other financial liabilities 57 2,674,442,642 2,254,235,746

Employee benefits obligations 58 213,608,132 285,310,663

Provisions 59 32,420,776 27,183,817

Deferred income (Capital) 60 0 5,452,405,532

33,895,272,044 35,661,004,706

TOTAL LIABILITIES 58,066,855,650 56,477,771,103

NET ASSETS 488,222,421 12,795,323,800

NET ASSETS

Taxpayers Funds (20,282,047,927) (1,533,181,284)

Accumulated Surplus 12,706,096,942 8,082,800,271

Revaluation Surplus 4,354,494,248 2,993,968,099

Foreign Currency Revaluation Reserve 378,348,462 40,510,274

Fair Value Reserves 689,971,458 414,943,528

Deferred Tax Reserves 0 58,946,928

Defined Benefit Reserves 30,539,411 25,358,113

Other Reserves 2,457,514,178 2,550,182,409

Minority Interest 153,305,649 161,795,462

TOTAL NET ASSETS 488,222,421 12,795,323,800

__________________________

Francis Mwakapalila

Accountant General

16

THE UNITED REPUBLIC OF TANZANIA

GOVERNMENT OF TANZANIA FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2015

STATEMENT OF CHANGES IN NET ASSETS

Taxpayers Funds

Accumulated

Surplus

Revaluation

Surplus

Foreign

Currency

Revaluation

Reserve

Fair Value

Reserves

Deferred Tax

Reserves

Defined

Benefit

Reserves Other Reserves

Minority

Interest Total

TZS '000 TZS '000 TZS '000 TZS '000 TZS '000 TZS '000 TZS '000 TZS '000 TZS '000 TZS '000

At 01 July 2014 (1,533,181,284) 8,082,800,271 2,993,968,099 40,510,274 414,943,528 58,946,928 25,358,113 2,550,182,409 161,795,462 12,795,323,800

Additional capital injected (5,870,484,345) 0 0 0 0 0 0 0 0 (5,870,484,345)

Surplus during the year 0 3,186,363,075 0 0 0 0 0 0 0 3,186,363,075

(7,403,665,629) 11,269,163,346 2,993,968,099 40,510,274 414,943,528 58,946,928 25,358,113 2,550,182,409 161,795,462 10,111,202,530

Taxpayers funds utilisation 222,737,484 0 0 0 0 0 0 0 0 222,737,484

Other reserves 0 0 0 0 274,302,046 8,109,863 99,688 142,868,919 0 425,380,516

Minority interest 0 0 0 0 0 0 0 0 920,201 920,201

Dividends paid 0 (4,044,511) 0 0 0 0 0 (72,454,104) 0 (76,498,615)

Other appropriations (73,985,188) (1,539,135,019) 1,359,235,115 (37,221,206) 725,885 33,741,549 5,081,610 (163,083,046) (9,410,014) (424,050,315)

Transfer of:

Revaluation surplus to retained earnings 0 (1,291,034) 1,291,034 0 0 0 0 0 0 0

Unrealised forex revaluation gains/(losses) to forex

revaluation reserve 0 0 0 375,059,394 0 0 0 0 0 375,059,394

At 30 June 2015 - Before elimination (7,254,913,333) 9,724,692,781 4,354,494,248 378,348,462 689,971,458 100,798,340 30,539,411 2,457,514,178 153,305,649 10,634,751,195

Elimination of inter-entity transactions (Note 14) (13,027,134,594) 2,981,404,160 0 0 0 (100,798,340) 0 0 0 (10,146,528,774)

At 30 June 2015 (20,282,047,927) 12,706,096,942 4,354,494,248 378,348,462 689,971,458 0 30,539,411 2,457,514,178 153,305,649 488,222,421

At 01 July 2013 (7,355,026,537) 7,205,634,870 3,354,807,192 3,289,068 308,495,553 61,147,983 21,542,573 1,701,901,256 (1,673,925) 5,300,118,033

Additional capital injected 21,068,649,732 0 0 0 0 0 0 0 0 21,068,649,732

Surplus during the year 0 807,695,234 0 0 0 0 0 0 0 807,695,234

13,713,623,195 8,013,330,104 3,354,807,192 3,289,068 308,495,553 61,147,983 21,542,573 1,701,901,256 (1,673,925) 27,176,463,000

Taxpayers funds utilisation (15,238,627,031) 0 0 0 0 7,793,876 0 0 0 (15,230,833,155)

Other reserves 0 0 0 0 108,449,659 333,294 284,341 235,121,799 0 344,189,093

Minority interest 0 0 0 0 0 0 0 0 168,691,388 168,691,388

Dividends paid 0 (2,008,387) 0 0 0 0 0 (32,326,119) 0 (34,334,506)

Other appropriations (8,177,449) 172,078,899 (424,218,232) 0 (2,001,684) (10,328,225) 3,531,198 645,485,473 (5,222,000) 371,147,980

Transfer of:

Revaluation surplus to retained earnings 0 (63,379,139) 63,379,139 0 0 0 0 0 0 0

Unrealised forex revaluation gains/(losses) to forex

revaluation reserve 0 (37,221,206) 0 37,221,206 0 0 0 0 0 0

At 30 June 2014 (1,533,181,284) 8,082,800,271 2,993,968,099 40,510,274 414,943,528 58,946,928 25,358,113 2,550,182,409 161,795,462 12,795,323,800

__________________________

Francis Mwakapalila

Accountant General

17

THE UNITED REPUBLIC OF TANZANIA

GOVERNMENT OF TANZANIA FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2015

STATEMENT OF CASH FLOWS

30-June-2015 30-June-2014

Notes TZS '000 TZS '000

Cash flows from operating activities 0 0

Taxes 11,298,300,121 9,787,701,605

Exchequers/transfers/subsidies from/(to) other Government entities 23,959,127,275 25,328,817,651

Fees, fines, penalties and licenses 1,614,934,309 1,651,895,318

Revenue from exchange transactions 5,490,987,342 3,389,345,233

Finance income 470,913,540 417,051,140

Social contributions 1,195,477,167 1,273,409,592

Other revenue 1,744,153,725 1,379,105,085

Wages, salaries and employee benefits (7,674,488,499) (6,454,310,242)

Social benefits (1,423,388,246) (1,295,260,934)

Supplies and consumables used (4,848,265,724) (4,882,319,532)

Maintenance expenses (1,066,604,149) (935,677,073)

Grants/subsidies/other transfer payments to other entities (20,615,870,554) (19,880,931,572)

Interest expenses (440,150,487) (309,211,948)

Other expenses (2,856,991,860) (2,720,385,013)

Dividends received/(paid) (41,441,781) (25,170,030)

Taxes paid (128,002,052) (94,243,800)

Net cash flows from/(used) in operating activities 66 6,678,690,128 6,629,815,481

Cash flows from investing activities

Acquisition of property, plant, and equipment (1,721,125,659) (1,309,403,825)

Acquisition of investment properties (786,820,504) (927,475,410)

Acquisition of intangibles (210,127,659) (100,360,463)

Net decrease/(increase) in Government securities (384,481,863) (306,823,431)

Increase in foreign currency marketable securities (401,249,984) (567,192,770)

Increase in quota in International Monetary Fund (IMF) (47,582,471) (32,573,293)

Increase in holdings of SDRs (126,040,564) (5,484,928)

Acquisition of biological assets 4,925,418 156,298,934

Acquisition of other long-term assets (1,331,759,413) (1,184,253,328)

Receipts from sales of property, plant, and equipment 3,696,220 (454,168,445)

Receipts from sales of investment properties (9,655,493) (3,599,545)

Receipts from sales of intangibles 59,050,787 2,256,844

Receipts from sales of biological assets 60,985 (87,269,117)

Receipts from sales of other long-term assets 174,228,748 82,886,785

Payments to acquire equity/debt instruments of other entities (58,985,437) (1,341,361,670)

Payments to acquire interests in joint ventures (5,040,408) (8,048,667)

Receipts from sales of equity/debt instruments of other entities 154,960,400 796,738,308

Receipts from sales of interests in joint ventures 57,636 223,325

Advances and loans made to other parties (other than those by PFI) (440,810,690) (249,381,512)

Receipts from repayment of advances/loans made to other parties 76,315,568 21,200,890

Payments for derivatives (140,687,254) (220,255,661)

Receipts from derivatives 27,841,117 93,134,558

Net cash from investing activities (5,163,230,522) (5,644,912,421)

Cash flows from financing activities

Cash proceeds from issuing debentures, notes, bonds, mortgages 566,659,585 230,871,768

Increase in notes and coins issued 497,624,335 566,653,505

Increase in IMF related liabilities (351,283,899) (317,993,240)

Increase in foreign currency financial liabilities (83,180,355) 79,186,526

Increase in allocation of SDRs 43,247,778 27,653,183

Increase in deposits (8,014,662) (929,484)

(Decrease)/increasing Repurchase Agreements (REPOs) (20,009,349) (28,017,478)

Increase/(decrease) in BOT liquidity papers (580,117,834) 8,814,740

Cash proceeds from loans 142,509,420 669,101,573

Cash proceeds from other short or long-term borrowings 675,622,193 947,033,995

Cash repayments of short or long-term borrowings (4,569,802,452) (2,712,377,727)

Cash payments by a lessee for the reduction of the outstanding liability relating to a finance lease (180,338) (887,235,371)

Cash proceeds from issuing other financial assets 812,977,450 (491,620,027)

Cash payments for other financial liabilities (680,351) (310,418)

Development grants received 1,723,430,927 1,393,628,766

Development grants transferred/given out (44,244,209) 32,147,378

Development grants refunded 1,145,996 (177,466,935)

Net cash flows from financing activities (1,194,295,764) (660,859,245)

Net increase/(decrease) in cash and cash equivalents 321,163,843 324,043,815

Cash and cash equivalents at beginning of period 4,195,590,292 3,881,372,246

Effect of foreign currency changes 378,609,117 (9,825,768)

Cash and cash equivalents at end of period 20 4,895,363,252 4,195,590,292

__________________________

Francis Mwakapalila

Accountant General

18

THE UNITED REPUBLIC OF TANZANIA

GOVERNMENT OF TANZANIA FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2015

STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNT

(Budget Prepared on Cash Basis)

Original Budget {A} Final Budget {B}

Actual on

Comparable Basis

{C}

Difference

{E-B}

TZS '000 TZS '000 TZS '000 TZS '000

Cash Flow From Operating Activities

Taxes 11,703,004,979 11,721,011,222 11,298,300,121 (422,711,101)

Transfers/subsidies from third parties 5,312,812,379 6,261,383,126 3,343,256,722 (2,918,126,404)

Fees, fines, penalties and licenses 2,061,602,422 1,932,913,141 1,614,934,309 (317,978,832)

Revenue from exchange transactions 4,374,974,191 5,194,027,340 5,490,987,342 296,960,003

Finance income 855,408,498 533,489,893 470,913,540 (62,576,353)

Social contributions 1,770,019,730 1,553,673,132 1,195,477,167 (358,195,965)

Other revenue 1,492,204,120 1,552,172,590 1,744,153,725 191,981,135

Wages, salaries and employee benefits (5,636,150,584) (6,931,335,009) (7,674,488,499) (743,153,490)

Social benefits (1,235,695,357) (1,420,541,107) (1,423,388,246) (2,847,140)

Supplies and consumables used (5,066,465,017) (5,239,996,502) (4,848,265,724) 391,730,777

Maintenance expenses (1,612,325,027) (1,473,793,749) (1,066,604,149) 407,189,599

Interest expenses (1,497,765,734) (1,599,161,318) (440,150,487) 1,159,010,831

Other expenses (1,778,793,642) (2,150,318,508) (2,856,991,860) (706,673,352)

Dividends received/(paid) 21,634,606 (50,462,109) (41,441,781) 9,020,327

Taxes paid (78,676,153) (75,174,153) (128,002,052) (52,827,898)

Net cash generated from operating activities (Direct) 10,685,789,412 9,807,887,990 6,678,690,128 (3,129,197,862)

Cash flows from investing activities

Acquisition of property, plant, and equipment (1,347,813,858) (1,351,487,398) (1,721,125,659) (369,638,262)

Acquisition of investment properties (505,777,668) (504,254,400) (786,820,504) (282,566,104)

Acquisition of intangibles (185,839,990) (209,252,915) (210,127,659) (874,744)

Net decrease/(increase) in Government securities (254,197,348) (269,008,276) (384,481,863) (115,473,587)

Increase in foreign currency marketable securities (421,366,092) (422,041,272) (401,249,984) 20,791,288

Increase in quota in International Monetary Fund (IMF) (47,582,470) (49,261,618) (47,582,471) 1,679,147

Increase in holdings of SDRs (17,398,040) (17,531,643) (126,040,564) (108,508,921)

Acquisition of biological assets 5,057,344 4,822,868 4,925,418 102,550

Acquisition of other long-term assets (1,373,638,421) (1,375,241,018) (1,331,759,413) 43,481,605

Receipts from sales of property, plant, and equipment 5,721,540 6,737,545 3,696,220 (3,041,325)

Receipts from sales of investment properties (16,267,580) (15,386,531) (9,655,493) 5,731,038

Receipts from sales of intangibles 60,670,371 23,597,750 59,050,787 35,453,037

Receipts from sales of biological assets 5,890,329 5,612,930 60,985 (5,551,944)

Receipts from sales of other long-term assets 155,000,000 155,000,000 174,228,748 19,228,748

Payments to acquire equity/debt instruments of other entities (84,152,296) (84,152,296) (58,985,437) 25,166,859

Payments to acquire interests in joint ventures (1,771,787) (1,771,787) (5,040,408) (3,268,621)

Receipts from sales of equity/debt instruments of other entities 167,940,000 162,798,282 154,960,400 (7,837,882)

Receipts from sales of interests in joint ventures 5,085,070 1,328,522 57,636 (1,270,886)

Advances and loans made to other parties (other than those by PFI) (477,388,436) (477,388,436) (440,810,690) 36,577,746

Receipts from repayment of advances/loans made to other parties 85,225,554 80,570,673 76,315,568 (4,255,105)

Payments for derivatives (671,290) (27,672,586) (140,687,254) (113,014,669)

Receipts from derivatives 10,756,300 10,758,929 27,841,117 17,082,188

Net cash from investing activities (4,232,518,769) (4,353,222,678) (5,163,230,522) (810,007,843)

Cash flows from financing activities

Cash proceeds from issuing debentures, notes, bonds, mortgages 400,000 400,000 566,659,585 566,259,585

Increase in notes and coins issued 497,557,946 497,557,946 497,624,335 66,389

Increase in IMF related liabilities 3,556,861 3,556,861 (351,283,899) (354,840,760)

Increase in foreign currency financial liabilities (83,503,969) (83,503,969) (83,180,355) 323,614

Increase in allocation of SDRs 42,757,277 42,757,277 43,247,778 490,501

Increase in deposits 1,500,000 1,489,291 (8,014,662) (9,503,953)

(Decrease)/increasing Repurchase Agreements (REPOs) (20,009,349) (20,009,349) (20,009,349) 0

Increase/(decrease) in BOT liquidity papers (580,117,474) (580,117,474) (580,117,834) (360)

Cash proceeds from loans 394,121,485 397,587,995 142,509,420 (255,078,575)

Cash proceeds from other short or long-term borrowings 840,606,311 840,606,311 675,622,193 (164,984,118)

Cash repayments of short or long-term borrowings (2,723,113,114) (3,250,816,966) (4,569,802,452) (1,318,985,486)

Cash payments by a lessee for the reduction of the outstanding liability relating to a finance lease 0 0 (180,338) (180,338)

Cash proceeds from issuing other financial assets (36,844,071) (36,844,071) 812,977,450 849,821,521

Cash payments for other financial liabilities (807,608) (807,608) (680,351) 127,258

Development grants received 1,640,955,401 1,600,629,726 1,723,430,927 122,801,201

Development grants transferred/given out (1,769,587) (731,032) (44,244,209) (43,513,177)

Development grants refunded 3,657,435 5,559,393 1,145,996 (4,413,397)

Net cash flows from financing activities (21,052,456) (582,685,670) (1,194,295,764) (611,610,094)

Net increase/(decrease) in cash and cash equivalents 6,432,218,187 4,871,979,642 321,163,843 (4,550,815,799)

Cash and cash equivalents at beginning of period 2,216,566,483 2,213,123,678 4,195,590,292 1,982,466,614

Effect of foreign currency changes 364,151,534 364,229,034 378,609,117 14,380,083

Cash and cash equivalents at end of period 9,012,936,204 7,449,332,354 4,895,363,252 (2,553,969,103)

__________________________

Francis Mwakapalila

Accountant General

19

20

THE UNITED REPUBLIC OF TANZANIA

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30th JUNE 2015

1. GENERAL INFORMATION

The United Republic of Tanzania is located in Eastern Africa within Longitude 290 to 410 Latitude10 and 120. The United Republic of Tanzania was formed on 26th April, 1964 out of the union of twosovereign states namely Tanganyika and Zanzibar. The two sovereign republics formed the UnitedRepublic of Tanzania on 26th April, 1964

His Excellence Dr. Jakaya Mrisho Kikwete was the President of the United Republic of Tanzania,who led the country from 21 December 2005 to 5th November, 2015. His Excellence Dr. John PombeMagufuli was elected to be the President of the United Republic of Tanzania thereafter.

H. E. Dr. JakayaMrisho Kikwete

H. E. Dr. JohnPombe Magufuli

It is the responsibility of the Government to ensure that all entities in the Public Sector keeps properbooks of accounts that complies with the Generally Accepted Accounting Principles, Public FinanceAct of 2001 (revised 2004) and International Public Sector Accounting Standards (IPSAS) as may beprescribed by the Paymaster General. These financial statements comprise the United Republic ofTanzania entities, Tanzania Mainland.

Public Sector refers to the Central Government, Regional, State Owned Enterprises and LocalGovernment Authorities. Public Sector is the part of national economy providing basic goods orservices that is either not, or cannot be, provided by the private sector. The portion of an economicsystem that is controlled by national, state or Regional, Executive Agencies and Commissions, Stateowned Enterprises, Parastatals and other Government Departments and local governments.

Executive Agencies and Commissions, State owned Enterprises, Parastatals and other GovernmentDepartments.

2. STATEMENT OF COMPLIANCE AND BASIS OF PREPARATION

The consolidated financial statements of the Government have been prepared in accordance withPublic Finance Act of 2001 (revised 2004), and comply with the requirements of International PublicSector Accounting Standards (IPSAS), Accrual Basis of Accounting. The financial statements arepresented in TZS, which is the functional and reporting currency of the Government and all valuesare rounded to the nearest thousand (TZS 000). The accounting policies have been consistentlyapplied to all the years presented.

The consolidated financial statements have been prepared on the basis of historic cost, modified bythe revaluation of certain assets and liabilities, unless stated otherwise. The consolidated financialstatements are prepared on accrual basis.

21

THE UNITED REPUBLIC OF TANZANIA

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30th JUNE 2015

3. SCOPE OF CONSOLIDATION

As per requirements of IPSAS 6 Consolidated and Separate Financial Statements, Paragraph 45concerning the elimination of balances and transactions between entities within the economic entityfor reporting periods, all inter- group transactions, balances and unrealized gains and losses ontransactions between entities of the Government are eliminated in full accounts reported for the yearending 30 June 2015.

4. AUTHORIZATION DATE

The consolidated financial statements were authorized for issue on 31st March 2016 by:

____________________________Dr. Servacius .B. Likwelile

Paymaster General

5. REPORTING ENTITY

The reporting entity is the Central Government of the United Republic of Tanzania which has beengrouped as follows:

Ministries and Departments within respective Ministries, including TanzaniaMissions Abroad (under the Ministry of Foreign Affairs and InternationalCooperation);

Regions; Commissions; Local Government Authorities; Water Entities; Financial Institutions (Banks, Insurance and Pension Funds); Commercial Public Sector Entities (CPSEs); Hospitals; Academic Institutions; Agencies; Authorities; Professional Boards; Food/Crop Boards; Centres; Councils; Institutes; Other Public Sector Entities (Bureaus, Funds, Departments/Units, and Other

Boards).

THE UNITED REPUBLIC OF TANZANIA

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 30th

JUNE 2015

5 REPORTING ENTITY (Continued)

CENTRAL GOVERNMENT

NO MINISTRIES VOTE/TR NO. PARENT MINISTRY NO DEPARTMENTS WITHIN RESPECTIVE MINISTRIES VOTE/TR NO. PARENT MINISTRY

1 President's Office (PO) 20 PO 1 President's Delivery Bureau 06 PO

2 Vice Presidents Office (VPO) 31 VPO 2 Treasury Registrar 07 MoF

3 Foreign Affairs & Inter. Cooperation (MoFAIC) 34 MoFAIC 3 Secretariat of Public Remuneration Board 09 PO

4 Prime Ministers Office (PMO) 37 PMO 4 Financial Intelligent Unit 13 MoF

5 Justice and Constitutional Affairs (MoJCA) 41 MoJCA 5 Fire and Rescue Force 14 MoHA

6 Agriculture, Food Security & Cooperative (MoAFSC) 43 MoAFSC 6 Attorney General 16 MoJCA

7 Industry and Trade (MoIT) 44 MoIT 7 The Treasury 21 MoF

8 Education and Vocational Training (MoEVT) 46 MoEVT 8 Public Debt 22 MoF

9 Lands and Human Settlement (MoLHS) 48 MoLHS 9 Accountant General's Office 23 MoF

10 Water and Irrigation (MoWI) 49 MoWI 10 Prime Ministers' Office 25 PMO

11 Finance (MoF) 50 MoF 11 Vice President's Office 26 VPO

12 Home Affairs (MoHA) 51 MoHA 12 Registrar of Political Parties 27 PMO

13 Health and Social Welfare (MoHSW) 52 MoHSW 13 Police Force 28 MoHA

14 Community Development, Gender & Children (MoCDGC) 53 MoCDGC 14 Prisons 29 MoHA

15 Regional Administration & Local Government (RALG) 56 PMO-RALG 15 President Office and Cabinet Secretariat 30 PO

16 Defence and National Service (MoDNS) 57 MoDNS 16 President's Office - Public Service Management 32 PO

17 Energy and Mineral (MoEM) 58 MoEM 17 Ethics Secretariat 33 PO

18 Transport (MoT) 62 MoT 18 Public Prosecution Division 35 MoJCA

19 Labour, Employment &Youth Development (MoLEYD) 65 MoLEYD 19 Defence 38 MoDNS

20 Communication, Science And Technology (MoCST) 68 MoCST 20 The National Service 39 MoDNS

21 Natural Resources And Tourism (MoNRT) 69 MoNRT 21 Judiciary 40 MoJCA

22 Information ,Culture And Sports (MoICS) 96 MoICS 22 National Assembly Fund 42 PMO

23 East Africa Cooperation(MoEAC) 97 MoEAC 23 National Audit Office 45 MoF

24 Works (MoW) 98 MoWI 24 Public Service Recruitment Secretariat 67 PO

25 Livestock Development And Fisheries (MoLDF) 99 MoLDF 25 Immigration Department 93 MoHA

NO REGIONS VOTE PARENT MINISTRY NO COMMISSIONS VOTE PARENT MINISTRY

1 Katavi 36 PMO-RALG 1 National Irrigation Commission 05 MoWI

2 Simiyu 47 PMO-RALG 2 Joint Finance Commission 10 MoF

3 Njombe 54 PMO-RALG 3 Judiciary Commission Service 12 MoJCA

4 Geita 63 PMO-RALG 4 Mediation and Arbitration 15 MoJCA

5 Arusha (Arusha) 70 PMO-RALG 5 Cooperative Development Commission 24 MoIT

6 Pwani (Kibaha) 71 PMO-RALG 6 Commission of Human Rights & Governance 55 MoJCA

7 Dodoma (Dodoma) 72 PMO-RALG 7 Law Reform Commission 59 MoJCA

8 Iringa (Iringa) 73 PMO-RALG 8 Electoral Commission 61 MoHA

9 Kigoma (Kigoma) 74 PMO-RALG 9 Presidents Office - Planning Commission 66 PO

10 Kilimanjaro (Moshi) 75 PMO-RALG 10 Ant Drug Commission 91 MoHA

11 Lindi (Lindi) 76 PMO-RALG 11 Tanzania Commission for AIDS (TACAIDS) 92 MoHSW

12 Mara (Musoma) 77 PMO-RALG 12 Public Service Commission 94 PO

13 Mbeya (Mbeya) 78 PMO-RALG 13 Fair Competition Commission (FCC) MoIT

14 Morogoro (Morogoro) 79 PMO-RALG 14 National Land use Planning Commission (NLPC) MoLHS

15 Mtwara (Mtwara) 80 PMO-RALG 15 Tanzania Atomic Energy Commission(TAEC) MoCST

16 Mwanza (Mwanza) 81 PMO-RALG 16 Tanzania Commission for Science