Government Employees Provident Fund (GEPF) - Annual Report for the

Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06   Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06 Contents Contents Vision and mission statements -----------------------------------Letter of transmittal -----------------------------------------------Chairperson’s statement ------------------------------------------The Board of Management --------------------------------------Statement by the chief executive officer -----------------------Management of the Fund -----------------------------------------Report of the Independent auditors ----------------------------Statement of responsibility ---------------------------------------Statement of net assets ------------------------------------------Statement of changes in net assets -----------------------------Notes to the financial statements -------------------------------- ii 1 2 4 5 14 15 17 18 19 20 Government Employees Provident Fund (GEPF) - Annual Report for for the Year Government Employees Provident Fund (GEPF) - Annual Report the Year 2005/06  Our Vision “Government Employees Provident Fund envisions to be the Strongest Provident Fund in the Country in terms of widest member coverage and customer oriented services”. Our Mission The Fund is committed to fulfil its role as a Provident Fund by maintaining a clear focus in offering best quality services and generating the greatest achievable members’ future social benefits with a view to satisfy its members, through using competent and well motivated staff and modern information and communication technology.  Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06 LETTER OF TRANSMITTAL Mr G.S. Mgonja Permanent Secretary to the Treasury Ministry of Finance P.O Box 9111, DAR ES SALAAM. Permanent Secretary, In accordance with Section 3 of the Government Employees Provident Fund Act, Cap 51 of 1942, I hereby submit, on behalf of the Board of Management a Report on the Fund’s operations together with the audited accounts for the financial year ending 30th June 2006. -----------------------------Monica L. Mwamunyange CHAIRPERSON April 2007 Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06  CHAIRPERSON’S STATEMENT On behalf of the Board of Management of the Government Employees Provident Fund (GEPF), I am pleased to present GEPF Annual Report for the financial year 2005/06. This being my first report to the public since I took over as Chairperson of the Board of Management, in June 2006, I would like to take this opportunity to thank the outgoing board members for their contributions to the current state of the Fund.The work they did provides a good foundation for me, the board members, the management and the staff of the Fund for continuing to build GEPF to an eventual largest Provident Fund for the benefit of those employed under non-pensionable terms. The year 2005/06 is the second year since the Fund was made to operate under its own management. I am delighted to report that the Fund has recorded an impressive performance in terms of growth in membership and income from members’ contributions and from investments. Good macroeconomic situation and socio-economic reforms that the Government have continued to pursue has been instrumental to the achievements that were realised. As we experienced high increase in inflation caused by food shortage due to drought, energy crisis and high oil prices, the economy continued to grow at 6.9% in 2005. Thanks to socio-economic reforms that the Government continues to implement to date. Total assets of the Fund grew from TZS 20,193.78 millions in 2004/05 to TZS 26,521.34 million in June 2006 indicating an increase of 31.33%. Membership increased from 16,716 in June 2005 to 20,973 in June 2006. Increase in membership resulted in an increase in contributions from TZS 4,409.68 million in 2004/05 to TZS 5,118.66 million in June 06. Likewise investment resources increased substantially from TZS 17,845.6 million to TZS 24,180.60 millions. The growth in investment income benefited members through interest credited to their accounts. Interest payable to members’ accounts helps to guard their savings against loss of value due to changes in the cost of living or rising inflation trend.  Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06 During the period the Fund commissioned computerization of its functions including members’ records, accounting and payroll processes. Full computerization has been completed and resulted in reduced days for processing benefits claims. Data storage and update has been improved and made it possible for the Fund to start issuance of members’ statements of accounts.The Fund has set March of every year as the month that statements of accounts will be issued, however, I take this opportunity to welcome members, on individual basis to come forward and enquire about their contribution history any time they require such information. With respect to investment undertakings, the Fund continued to invest in traditional areas including government securities, fixed deposits and in equity shares at the Dar es Salaam Stock Exchange (DSE). Equally the Fund has started slow diversification of its investments to include investment in EADB bond and in units offered by Umoja Fund of the Unit Trust of Tanzania. Further diversification is expected in the coming years where the Fund expects to undertake limited investments in real estate. The ongoing reforms in the social security industry, currently spearheaded by the Government are expected to shape further the operations of the Fund. It is expected that such reforms will pave way for amendment of GEPF Act to allow for broader members’ coverage, further improved benefits and increased areas of investments. As I conclude my statement, I feel obliged to remind non-pensionable employees of the importance of registering with the Fund. Savings with GEPF help them and their families during the time of loss of income as a result of retirement, death, dismissal, conclusion of employment contract or other causes leading to termination of employment. Finally, on behalf of the Board of Management I once again express my sincere gratitude to the Government, members contributing to the Fund, the staff and all other stakeholders for their support during the year under review.We treasure their contributions and guarantee due diligence and hard work during the coming year and always. ----------------------------Monica L. Mwamunyange CHAIRPERSON Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06  THE BOARD OF MANAGEMENT M.L Mwamunyange (Mrs.) Chairperson L.M. Salema Member E.M. Nkuku Member L.T. Msongole Member W. G. Gumbo Member Dr. M. I. Nchimbi (Mrs.) Member D. M. Msangi Secretary  Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06 STATEMENT BY THE CHIEF EXECUTIVE OFFICER STATEMENT BY THE CHIEF EXECUTIVE OFFICER I am pleased to report that the year 2005/06 was yet another successful year as the Fund achieved significant growth in all areas of its operations. Such achievements are demonstrated by improved services to members, better planning and financial management, carefully matching and selection of investments made, staff training and motivation. I wish to I am pleased to report that the year and the entire staff successful year as have been thank the Board of Management 2005/06 was yet anotheras together they the Fund achieved significant growth in all areas of its operations. Such achievements instrumental to these achievements. are demonstrated by improved services to members, better planning and financial management, carefully matching and selection of investments made, staff training and motivation. I wish to thank the Board of Management and the entire staff as together General been instrumental to these achievements. Performance they have The year 2005/06 saw the net assets of the Fund growing by a record level of 31.33% General Performance from TZS 20,193.80 millions in year June 2005 to TZS 26,521.30 million in June 2006. The growth is saw the net assets of the Fund growing contributions of 31.33% This year 2005/06attributed to increase in members’ by a record level and income from from TZS 20,193.80 millions in year June 2005 to TZS 26,521.30 million in June 2006. This investments. The assets of the Fund have continued toincome through out the last five growth is attributed to increase in members’ contributions and grow from investments. The starting 2001/02 as depicted in the chart below. yearsassets of the Fund have continued to grow through out the last five years starting 2001/02 as depicted in the chart below. Growth of the Fund's Assets 30,000.0 25,000.0 TZS Million 20,000.0 15,000.0 10,000.0 5,000.0 0.0 2001/02 2002/03 2003/04 2004/05 2005/06 Year The distribution of the assets of the Fund in year 2005/06 as reflected by the investments portfolio was such that Government securities accounted for 67.52%, shares 8.03%, corporate bonds 4.13% and fixed deposits 20.32%. 9 Efforts are under way to diversify  further the assets of the Fund, to include real estate, joint venture and other opportunities. Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06 The distribution of the assets of the Fund in year 2005/06 as reflected by the investments portfolio was such that Government securities accounted for 67.52%, shares 8.03%, corporate bonds 4.13% and fixed deposits 20.32%. Efforts are under way to diversify further Membership Contribution the assets of the Fund, to include real estate, joint venture and other opportunities. The number of members registered and contributing to the Fund kept on growing during Membership Contribution the year with majority members coming from departments of police and prisons. During the year the Fund registered a total of 4,257 Fund kept on growing during The number of members registered and contributing to thenew members, which is equivalent to an the year with majority members coming from departments of police and prisons. During increase of 25.5% over the previous year. Likewise members’ contribution increased the year the Fund registered a total of 4,257 new members, which is equivalent to an from TZS over the previous June 2005 to TZS 5,118.66 million in June increase of 25.5%4,409.68 million inyear. Likewise members’ contribution increased 2006. Such an from TZS 4,409.68 equivalent to 16.07% compared to the previous year. Salary increase offered increase is million in June 2005 to TZS 5,118.66 million in June 2006. Such an increase is equivalent to 16.07% compared to the previous year. Salary increase offered by the by the Government duringand the reported increase in the number in the number of members Government during the year the year and the reported increase of members contributed to such togood performance.The trend inThe trendcontributions is depicted contributed a such a good performance. members in members contributions is depicted in the chart below. in the chart below. Trend in Members Contributions (Million Shillings) 6000 Contributios 5000 4000 3502 3000 2000 1000 0 2002/03 5386 3805 4141 2003/04 Year 2004/05 2005/06 Benefits Payment Benefits Payment Benefit payments the most critical function of the Fund as it Fund as it is directly linked to Benefit payments remains remains the most critical function of the is directly linked to service to members. During the year time taken taken to process benefits and related claims service to members. During the year time to process benefits and related claims was further reduced to only seven working days. Benefits paid out in the form was further reduced to only seven working days. others graduated to of retirement continued to increase as more members retired andBenefits paid out in the form of pensionable terms.Total benefits paid including transfers members retired and others graduated to retirement continued to increase as more to Public Service Pensions Fund amounted to TZS 726.32 million. pensionable terms. Total benefits paid including transfers to Public Service Pensions Fund amounted to TZS 726.32 million.  Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06 10 GEPF staff Mr. Marko Shabi explains a point to one of GEPF customers making follow-up on benefits. The Fund continued to disburse partial withdrawals in a form of loans to its members to meet development needs. Loan issued to members during the year under review amounted to TZS 209.98 million, which benefited a total of 489 members. As depicted in the chart below, benefits and partial withdrawals taken together increased from as low as TZS 167.8 million in 2002/03 to TZS 936.30 million in 2005/06 Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06  Trend in Banefits and LoanPayments (Million Shillings) 800 700 600 500 Tsh. Million Benefits 400 Loan 300 200 100 0 2002/03 Benefits Loan 106.5 61.3 2003/04 27.4 99.9 Years 2004/05 67.1 178.5 2005/06 687.9 210 Investments Activities Investments Activities Like the case of Like the case of benefit payments, investment operations are important functions of the functions of benefit payments, investment operations are important the Fund. Through investments the Fund Fund realizes revenue for its operations and for the Fund. Through investments the realizes revenue for its operations and for the members. Revenue paid members in a form a form improve their improve guard members. Revenue paid toto members in of interest of interest holding and their holding and their savings against possible possible loss to value and to causes of and cost guard their savings against loss of value due of inflation dueotherinflation rising other causes of of cost rising living. of living. Overall investment portfolio grew TZS TZS 17,845.63 June 2005 to TZS Overall investment portfolio grew from from17,845.63 million in million in June 2005 to TZS 24,180.60 million in June 2006, which is equivalent to an increase of 35%. Such an 24,180.60 million in June 2006, which is equivalent to an increase of 35%. Such an increase a result of careful selection and matching of investment undertakings. increase is is a result of careful selection and matching of investment undertakings. Investment distributions in 2005/06 13 4.14% 20.33% 7.98% Govt Securities 67.56% Fixed Deposits Corp. Bond Equity and UTT  Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06 During the period, income from investment increased from TZS 1,482.04 million registered in June 2005 to TZS 2,575.54 million in June 2006. Such an increase is equivalent to 73.78%. As depicted in the chart below income from investment has continued to grow since 2001/2002 from as low as TZS 186.5 million to TZS 2,575.54 million realized during the year under review. Govt Securities Fixed Deposits Corp. Bond Equity During the period, income from investment increased from TZS 1,482.04 million registered in June 2005 to TZS 2,575.54 million in June 2006. Such an increase is During the period, income from investment increased from TZS 1,482.04 million registered in equivalent to TZS 2,575.54 million in June 2006. Such an increase isfrom investment has June 2005 to 73.78%. As depicted in the chart below income equivalent to 73.78%. As depicted in the chart below income from investment has continued to grow continued to grow since 2001/2002 from as low as TZS 186.5 million to TZS 2,575.54 since 2001/2002 from as low as TZS 186.5 million to TZS 2,575.54 million realized during million realized during the year under review. the year under review. Graph: Growth of Income from investments 2400 2200 2000 1800 1600 1400 1200 1000 800 600 400 200 0 2002/03 2003/04 years 2004/05 2005/06 Human Resources Development Human Resources Development Emphasis on staffstaff training continued to receive attention during the year Fund Fund Emphasis on training continued to receive attention during the year as the as the trained its staff in various disciplines including social security, finance, accounting, auditing, trained its staff in various The objective behind social security, improve accounting, investments and customer care. disciplines includingthese training is tofinance, staff performanceinvestmentsdelivery. auditing, and service and customer care. The objective behind these training is to improve staff performance and service delivery. Staff performance and improved service delivery is also checked through bi-months staff meetings. Such meetings take place after every two months. During these meeting, Staff performance and improved service last two months achievements made and staff deliberate on what transpired during thedelivery is also checked through bi-months staff problems encountered. Suggestions fromafter every twoto improve the way of carrying meetings. Such meetings take place staff are used months. out daily business. 14 Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06 TZS. Million  GEPF Manager of Finance and Administration, Mr Philemon Minga chairing one of the bi-monthly staff meetings. The year also saw the Fund introducing end of the year get together where all staff met and reflect back on what transpired during the year and prepare grounds for the coming year. Issues of major considerations during such gatherings are service to members, general work performance and staff welfare. Public Awareness As a measure to inform the public about the Fund, during the year a number of seminars were conducted. Such seminars were also used to discuss with members about the Fund’s obligations and members’ rights. 0 Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06 ` ` Principal Commissioner of Prisons Nicas Banzi, GEPF CEO Daud Msangi and PSFP DG Hawa Mmanga in a group picture during seminar for Prisons Staff At GEPF public awareness goes beyond seminars and conferences to include actual vis Mmanga in a group picture during seminar for Prisons Staff to Principal Commissioner ofplaces of work. Also important is participation in various events o members in their Prisons Nicas Banzi, GEPF CEO Daud Msangi and PSPF DG Hawa At GEPF public awareness goes beyond seminars and conferences to include actual visit national interest. During the year the Fund also participated in 2006 Public Service wee Principal Commissioner of Prisons Nicas Banzi, GEPF CEO Daud Msangi and PSFP DG Hawa Mmanga in a group picture during seminar for Prisons Staff “Wiki ya Utumishi” heldof work. AlsoMmoja Grounds. The participation of to members in their places at Mnazi important is participation in various events was very successfu national interest. During employees visited our pavilion to Public Service week as a large number ofthe year the Fund also participated in 2006 enquire about the Fund. “Wiki ya Utumishi” held at Mnazi Mmoja Grounds. The participation was very successful as a large public awareness goes beyond seminars about the Fund. At GEPF number of employees visited our pavilion to enquire and conferences to include actual vis to members in their places of work. Also important is participation in various events o national interest. During the year the Fund also participated in 2006 Public Service wee “Wiki ya Utumishi” held at Mnazi Mmoja Grounds. The participation was very successfu as a large number of employees visited our pavilion to enquire about the Fund. Joyce K. Mapunjo, Deputy PS for Treasury with GEPF staff at Treasury pavilion during ‘Wiki ya Joyce K. Mapunjo, Deputy PS Utumishi’ held at Mnazi Mmoja Grounds pavilion during ‘Wiki ya Utumishi’ held at Mnazi Mmo for Treasury with GEPF staff at Treasury Grounds Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06  16 Joyce K. Mapunjo, Deputy PS for Treasury with GEPF staff at Treasury pavilion during ‘Wiki ya Utumishi’ held at Mnazi Mmo Grounds Computerization of GEPF functions As a measure to improve service provision, during the year the Fund launched a major computerization project aimed at automating members’ records and accounting functions. The project will involve procurement of software and hardware, their installation and setting up a Local Area Network (LAN). Other activities will include staff training, data transformation and keying/migration, Corporate Social Responsibility Governance At GEPF we are aware of our social responsibility and as such have included it in our daily operations. During the year we participated actively in various social initiatives. Following the drought that hit the country in 2006, and in response to the call by His Excellency Jakaya Mrisho Kikwete, the President of the United Republic of Tanzania to help, GEPF contributed Tshs. 2,000,000.00 towards the food relief fund. The Fund also contributed Tsh. 500,000 to Usuka Primary School to support completion of a school dormitory in an effort to ensure that students study in a conducive environment. The year also saw the Fund participating in insurance and social promotion day through a token donation of Tshs. 200,000. Future Outlook All indications point to a sound and good future outlook as the Fund is increasingly getting involved in policy discussions covering social security matters in the country. The ongoing discussion on the reform of the sector is among the national issues that the Fund takes fully participation together with other social security funds. The Fund is poised to achieve even greater administrative and operational efficiency as such adding more value to members’ benefits.The ongoing computerization of the Fund’s operations is expected to improve further the administrative and the operational efficiency. Likewise the Fund expect to extend social security coverage beyond traditional government sector, tailor members’ benefits to evolving needs and improve the adequacy of benefits offered. All of these are continuous undertakings that will be achieved over time. Appreciation The achievements highlighted in this report have been made possible by the able workforce that we have put in place. We will continue to build their capacities for further improvement of services to our esteemed members. I wish to take this opportunity to thank them for the good work.  Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06 I wish to recognize the good work by the outgoing Board members under Ms. Kate Bandawe for their guidance during the year, and welcome the new Board under Ms. Monica Mwamunyage which took office in May 2006. Together they guided the Fund to realize the progress attained during the year under review. To the esteemed members, I would like to renew our commitments to continuous improve our services. We will strive to ensure that we are in contact with them all the time by telling them what we do and sharing with them their experiences. Meeting their expectations is what we strive for. -----------------------------------------Daud M. Msangi CHIEF EXECUTIVE OFFICER Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06  MANAGEMENT OF THE FUND D.M Msangi Chief Executive Officer P.N.. Minga Manager Finance & Administration F.L. Fute Manager Investment & Operations H.K Iddi Chief Internal Auditor Vacant Legal Secretary E.R Shumbusho Chief Information & Technology Officer  Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06 REPORT OF THE INDEPENDENT AUDITORS I have audited the financial statements of the Government Employees Provident Fund as appended on pages 09 to 16 for the period ended on 30th June 2006. Responsibilities of the Accounting Officer Sect.25 (4) of the Public Finance Act 2001 as revised in 2004; places responsibility on the Accounting Officer to prepare financial statements based on generally accepted accounting principles (GAAP). In addition, Regs.28 - 35 of the Public Finance Regulations (PFR) 2004 require the Accounting Officer and the entity management to establish an effective Internal Control Systems, Internal Audit Unit and Audit Committee appropriate to the circumstances of the entity. Responsibilities of the Controller and Auditor General My responsibility is to express a professional opinion on the financial statements and on the procurement procedures based on the audit. According to Sect.30 of the Public Finances Act 2001, my specific responsibilities are to examine, enquire into, audit and report on the accounts of the Fund. In addition, Sect.31 of the PFA require me to certify that the accounts have been kept in accordance with generally accepted accounting principles; all reasonable precautions have been taken to safeguard the collection of revenue, the receipt, custody, disposal, issues and proper use of public property, and that the law, directions and instructions applicable thereto have been duly observed; all expenditures of public money have been properly authorized and to satisfy myself whether the funds collected by the Government Employees Provident Fund were used exclusively and judiciously to meet eligible expenditures with due regard to economy and efficiency. Basis of opinion The audit was conducted in accordance with International Standards on Auditing (ISA), INTOSAI standards and such other audit procedures that I considered necessary in the circumstances. Those standards require that I plan and perform the audit to obtain reasonable but not absolute assurance about whether the financial statements are free of material misstatements. Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06  An audit includes examining, on a test check basis, evidence supporting the amounts and disclosures in the financial statements. It also includes assessing the significant estimates and judgments made in the preparation of the financial statements, assessing whether the internal control system and the accounting policies are appropriate to the circumstances of the Government Employees Provident Fund and that they have been consistently applied and adequately disclosed. It also involves, evaluating the overall financial statements presentation, and assessing the extent of compliance with the statutory requirements. I believe the audit provides a reasonable basis for my opinion. Unqualified Opinion In my opinion, the financial statements fairly reflect, in all material respects, the financial position of the Government Employees Provident Fund as at 30th June 2006 and the results of its operations for the year then ended, in accordance with generally accepted accounting principles and the GEPF Act. Further to my opinion, the procurement of works, goods and services which I have tested as part of the audit, were generally done in accordance with the Public Procurement Act 2004 and the related legislation. Ludovick S. L Utouh CONTROLLER AND AUDITOR GENERAL ---------------------------------------------------------------Office of the Controller and Auditor General, The National Audit Office, DAR ES SALAAM. February, 2007.  Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06 STATEMENT OF RESPONSIBILITY ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH JUNE 2006 These Financial Statements have been prepared by the management of the Government Employees Provident Fund in accordance with the provisions of Section 25(4) of the Public Finance Act. No 6 of 2001 as amended in 2004.The Financial statements comply with the generally accepted accounting practices as required by the said Act and are presented in a manner consistent with the generally accepted accounting principles (GAAP). The management of the Fund is responsible for establishing and maintaining an effective system of Internal Control designed to provide reasonable assurance that the transactions recorded in the accounts are within the statutory authority and that they contain the receipt and use of all public financial resources by the Fund. To the best of my knowledge, the system of Internal Control has operated adequately throughout the reporting period and that the Accounts and underlying records provide a reasonable basis for the preparation of the Financial Statements for the 2005/2006 financial year. I accept responsibility for the integrity of the Financial Statements, the information it contains, and its compliance with the Public Finance Act No. 6 of 2001 and the instructions issued by the Treasury in respect of the year under review. ------------------------------------------Signed by Accounting Officer --------------------------------------Date Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06  STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AS AT 30TH JUNE, 2006 Jun-06 Notes Investment in equity share and UTT Equity shares Unit Trust of Tanzania 928,530,710 999,999,700 1,928,530,410 Other Investments Government securities Corporate bond Fixed deposits 7 16,337,069,608 1,000,000,000 4,915,000,000 22,252,069,608 Other Assets Cash at bank Investment income receivable Contributions receivable Other receivables 10 8 9 672,332,788 777,641,925 284,893,248 317,629,872 2,052,497,833 Operating Assets CWIP- Computerisation Net fixed assets 11 12 254,445,191 111,837,018 366,282,209 Total Assets Current Liabilities Creditors/Accruals Net assets Available for Benefits (78,036,323) 26,521,343,737 (1,384,806) 20,193,786,492 26,599,380,060 80,058,034 80,058,034 20,195,171,298 1,036,050,432 438,505,238 525,503,312 269,424,308 2,269,483,290 12,238,867,810 1,000,000,000 3,830,000,000 17,068,867,810 776,762,164 776,762,164 TZS Jun-05 TZS Notes 1 to 14 form an integral Part of the Financial Statements ………………......….. Chairperson  ………………………….. CEO ………………………... Board Member Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06 STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED 30TH JUNE 2006 Jun-06 Notes CONTRIBUTIONS AND BENEFITS Members contributions Other Income Benefits Benefits expenditure Net Additions from Members INVESTMENT INCOME Investment Income Change in value of equity investments Gross Investment Income Withholding tax Net Investment Income Other income Total income Administrative expenses Depreciation Total expenses Surplus Increase in net assets for the year Net assets available for benefits at start Net assets available for benefits at year end 6 12 5 4 2,569,068,279 6,477,490 2,575,545,769 (3,615,501) 2,571,930,268 2,823,000 2,574,753,268 (594,413,231) (45,125,336) (639,538,567) 1,935,214,700 6,327,557,245 20,193,786,492 26,521,343,737 1,482,043,473 6,029,200 1,488,072,673 (555,293,733) (25,305,045) (580,598,778) 907,473,895 5,250,020,117 14,943,766,375 20,193,786,492 1,503,498,389 (21,454,916) 1,482,043,473 3 (726,319,136) 4,392,342,545 (67,133,654) 4,342,546,222 2 5,118,661,681 5,118,661,681 4,409,602,872 77,004 4,409,679,876 TZS Jun-05 TZS Notes 1 to 14 form an integral Part of the Financial Statements ………………......….. Chairperson ………………………….. CEO ………………………... Board Member  Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06 NOTES TO THE FINANCIAL STATEMENTS 1.0 Accounting Policies The principal accounting policies adopted in the preparation of these financial statements are set out below: Basis of Preparation The Fund’s financial statements have been prepared based on International Financial Reporting Standards. The financial statements summaries the transactions of the scheme and deal with the net assets at the disposal of trustees. They do take account of obligations to pay members benefits that fall due after the end of the scheme year. The financial statements are presented in the functional currency,Tanzania shillings (TZS) and prepared under the historical cost convention as modified by the carrying of certain investments at fair value. 1.2 Contributions Statutory contributions are receivable in accordance with the provision of Sect. 5(1) of the GEPF Act of 1942. Current service and other contributions are accounted for in the period they fall due. Investments in Fixed Deposits and Government Securities Investments in fixed deposits and government securities (treasury bills, government stock and treasury bonds) are stated in the statement of net assets at fair value. The difference between cost price and maturity value for treasury bills and treasury bonds should be treated as interest and discount respectively. This difference will be recognized evenly over the period to maturity. Equity Investments Investments in equity for the companies listed in the Stock Exchange market are reflected in the statements of net assets at market value. Retrospective adjustments have been done to account for the difference between market value and cost of the shares bought by the Fund since June 2004. 1.1 1.3 1.4 0 Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06 1.5 Depreciation Depreciation is calculated using the straight-line method to write off the cost of each asset to its residual value over the expected useful life, as follows: Asset type Buildings Furniture and fittings Machines and equipments Computers Motor vehicles Rate (%) pa 4 10 20 25 25 Fixed assets acquired during the year are depreciated at full year’s rate irrespective of the date of acquisition and those disposed off are not depreciated in the year of disposal. 1.6 Cash and Cash Equivalent To meet the cash flow reporting requirements, the cash and cash equivalents comprise cash in hand, deposits held at call with banks, and investments of three months or less in money market instruments. Receivables Receivables are carried at original payroll amount. Provision for Bad and Doubtful Debts Provision for bad and doubtful debts is made in respect of specific debts the eventuality of which is considered doubtful. 1.7 1.8 2 CONTRIBUTIONS Employers Employees Gratuity Other contributions Erroneous contributions - paid Erroneous contribution - received Jun-06 TZS 2,981,253,599 2,096,858,943 58,536,466 16,565,620 (39,566,875) 5,013,928 5,118,661,681 Jun-05 TZS 2,598,411,649 1,732,268,309 26,917,562 57,124,155 (5,118,803) 4,409,602,872 Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06  3 BENEFITS EXPENDITURE Jun-06 TZS Jun-05 TZS 67,133,654 Jun-05 TZS 81,987,403 79,789,392 966,838,232 374,883,362 1,503,498,389 Jun-05 TZS 3,625,000 2,404,200 6,029,200 Jun-05 TZS 3,150,000 2,350,000 3,809,478 203,193,873 368,095,427 580,598,778 Jun-05 TZS 78,348,600 6,882,652,090 5,277,867,120 12,238,867,810 Terminal benefits 4 Investment Income Dividends Discount Government securities Interest - EADB bond Interest - Fixed deposits 726,319,136 Jun-06 TZS 72,300,072 177,206,792 1,651,870,580 133,263,014 534,427,821 2,569,068,279 5 Other income Disposable income Tender fees Staff car loan service charge Jun-06 TZS 1,650,000 1,173,000 2,823,000 6 Administrative expenses Trustee fees Audit fees Bank charges Staff costs Other administrative costs Jun-06 TZS 3,150,000 2,850,000 4,621,550 244,218,732 339,572,950 594,413,231 7 Investment in Government Securities Government stocks Treasury bills Treasury bonds Jun-06 TZS 78,348,600 9,075,594,614 7,183,126,394 16,337,069,608  Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06 8 Cash at Bank CRDB NBC Jun-06 TZS 626,198,637 46,134,151 672,332,788 Jun-05 TZS 874,619,279 161,431,153 1,036,050,432 Jun-05 TZS 79,854,704 121,995,454 158,889,678 67,518,322 10,247,079 438,505,237 Jun-05 TZS 4,811,200 14,400 102,347,319 162,251,389 269,424,308 9 Investment Income receivable Discount on treasury bond Treasury bills Interest treasury bonds Fixed deposits receipts EADB bond Government stocks Jun-06 TZS 256,970,496 101,649,767 242,599,417 160,377,399 12,626,028 3,418,819 777,641,925 10 Other receivables Prepayments Safari Imprest Staff car loan Members’ Loans Jun-06 TZS 6,067,450 7,338,272 119,540,412 184,683,738 317,629,872 11 Capital work in progress (CWIP) - Computerisation COMPUTER SOFTWARE TZS Cost 01.07.2005 Additions during the year 30.06.2006 Amortized cost 01.07.2005 Charge for the Year Amortized Cost 30.06.2006 NBV 30.06.2006 NBV 30.06.2005 254,445,191 254,445,191 254,445,191 Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06  12. Fixed assets movement schedule Motor Vehicle TZS Machinery & Equipments TZS Furniture & Fittings TZS Computers TZS Total TZS Cost 01.07.2005 61,130,532 13,278,803 30,148,902 11,573,058 116,131,295 Additions 30.06.2006 Accumulated Depreciation 01.07.2005 Charge for the Year 41,938,500 103,069,032 180,000 13,458,803 29,954,694 60,103,596 4,831,126 16,404,184 76,904,320 193,035,615 15,282,633 3,977,286 14,035,456 2,777,886 36,073,261 25,767,258 2,691,761 15,025,899 1,640,418 45,125,336 30.06.2006 Net Book Value 30.06.2006 30.06.2005 41,049,891 6,669,047 29,061,355 4,418,304 81,198,597 62,019,141 45,847,899 6,789,756 9,301,517 31,042,241 16,113,446 11,985,880 8,795,172 111,837,018 80,058,034 13.0 Capital Commitments The Fund had capital commitments of TZS 33,457,480.70 representing capital expenditure, which had been approved and contracted for but not yet expended. All capital expenditures incurred up to 30th June 2006 have been accounted for. Contingent Liabilities The Fund had no material contingent liabilities as at 30th June 2006. 14.0  Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06 Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06   Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06 Government Employees Provident Fund (GEPF) - Annual Report for the Year 2005/06  Printed by Colour Print (T) Ltd.