aicc annual report · 2015-06-08 · report a turnover of tshs 10,920,088,995 as compared to tshs...

Annual Report 2013

Arusha InternationalConference Centre

We Bring the World to Tanzania We Bring the World to TanzaniaArusha International Conference Centre Annual Report 201235 35

AICC VISION

‘To be a model and enabler of business tourism’

AICC MISSION STATEMENT

To promote and provide quality business tourism services to national and international clientele for enhanced national,

social and economic development.


Financial HighlightsTotal Revenue for the past five years

Corporate Information

REGISTERED OFFICE &

CENTRE’S HEADQUARTERS

Barabara ya Afrika Mashariki

P.O. Box 3081, Arusha, Tanzania

Tel. Gen. Line: +255 27 250 3181/9

Managing Director: 250 8008/3881

Fax: +255 27 250 6630

E-mail: [email protected]

Website: http://www.aicc.co.tz

AUDITORS

The Controller and Auditor General,

National Audit Office,

Samora Avenue/Ohio Street,

P.O.Box 9080,

Tel: +255 (022) 2115157/8, Fax: +255 (022) 2117527

E-mail: [email protected]

Website: www.nao.go.tz

BANKERS

NBC LTD

CRDB BANK PLC

FBME BANK LTD

PARENT MINISTRY

Ministry of Foreign Affairs and

International Co-operation.

Kivukoni Front

P.O. Box 9000

Dar es Salaam.

Tel: 022 2111906/10

Fax: 022 2116600

Email: [email protected]

12,000,000,000

10,000,000,000

8,000,000,000

6,000,000,000

4,000,000,000

2,000,000,000

02007/08

Revenue

2008/09 2009/10 2010/11 2011/12


Table of Contents Letter of Submission

1. Letter of Submission . . . . . . . . . . . . . . . . 1

2. Chairman’s Statement . . . . . . . . . . . . . . . . 2

3. Board of Directors . . . . . . . . . . . . . . . . . 3

4. Managing Director’s Statement . . . . . . . . . . . . . . 4

5. Management Team . . . . . . . . . . . . . . . . 5

6. Report of the Auditors . . . . . . . . . . . . . . . . 6

7. Statement of Financial Position as at 30th June, 2012 . . . . . . . . . 7

8. Statement of Comprehensive Income for the year ended 30th June, 2012 . . . . . 8

9. Cash Flow Statement for the year ended 30th June, 2012 . . . . . . . . . 9

10. Statement of Changes in Equity for the Year ended 30th June, 2012 . . . . . . . 10

11. Notes on the Accounts . . . . . . . . . . . . . . . . 11

Hon. Bernard Membe (MP)Minister for Foreign Affairs and International Co-operation

P.O.BOX 9,000

Dar es Salaam

Dear Hon. Minister

In accordance with the Public Corporations Act (CAP 257 R.E 2002 of the laws of Tanzania), I hereby submit

the Annual Report with the Centre’s Audited Statement of Financial Position, Statement of Comprehensive

Income, Cash Flow Statement and Statement of Changes in Equity for the fi nancial year 2011/2012

Yours Sincerely,

Amb. Christopher LiundiCHAIRPERSON

Hon. Bernard Membe (MP)Minister for Foreign Affairs &

International Co-operation


Chairperson’s Statement

It is my pleasure as the Chairperson of the Board of Directors of Arusha International Conference Centre, to

report a turnover of TShs 10,920,088,995 as compared to TShs 8,174,864,843 last year.

This Annual Report presents the AICC’s achievements over the past year and illustrates how the Centre has

positioned itself in spearheading the Business Tourism in Tanzania.

During this fi nancial year the Board continued to guide the Centre in implementing and formulating policies

and guidelines; in doing so the Board approved the HIV and AIDS Policy, AICC Sales Promotion Policy and

risk Management Policy and Strategic Framework.

Despite the challenging economic conditions, the Centre has managed to deliver exceptional services to

its clientele.

AICC and other stakeholder are joining forces to establish state of the art purpose built convention centre

in Arusha and at the same time modernizing and upgrading the current facilities.

On behalf of the Board of Directors, I would like to commend and thank the

Centre’s Management and employees for another good year in “bringing the

world to Tanzania”.

Amb. Christopher LiundiCHAIRPERSONAICC BOARD OF DIRECTORS

Amb. Christopher Liundi


Managing Director’s Statement

OverviewThe Centre’s achievement is measured in far more than financial statistics. The last financial year saw

AICC moving closer to achieving its mission of promoting and providing quality congress tourism services

to national and international clientele for enhanced national socio-economic development. This mission

encompasses the major aspect of Centre’s business.

Operational ResultsDuring the year under report, the Centre registered a turnover of TShs 10,920,088,995 as compared to

TShs 8,174,864,843 recorded in previous financial year. The revenue sources are Estates, Conferences and

Hospital. The increase in income was attributed by gain in exchange rate fluctuations.

In this financial year, the Centre realized a loss of TShs 167, 608, 070 after tax as compared to a profit

of TShs 531,605,320 recorded last year. The loss was due to deferred tax liability for future profits, loss

on demolished houses for development projects and increased prices of commodities coupled with the

exchange rate fluctuations which affected expenditures drivers.

The Centre’s revenue for the past five years is depicted below:

Total Revenue for the past five years

YEAR ESTATES HOSPITAL CONFERENCES OTHERS TOTAL

2006/07 3,360,376,818 623,369,608 1,297,296,960 387,983,277 5,669,026,663

2007/08 3,534,165,351 884,091,021 1,551,887,787 -244,108,457 5,726,035,702

2008/09 4,020,063,595 923,692,377 1,261,300,822 333,989,650 6,539,046,444

2009/10 4,351,645,801 1,084,292,692 2,114,509,513 323,354,219 7,873,802,224

2010/11 5,015,477,609 1,461,492,477 1,233,362,699 464,532,058 8,174,864,843

2011/12 5,179,774,378 2,012,007,583 3,595,804,428 132,502,606 10,920,088,995


Board of Directors Management Team

Ms. Rose M. LugembeVice Chairperson

Mr. Makumba KimweriMember

Mr. Joseph ChilamboMember

Mr. Issa M. SuleimanMember

Amb. Christopher LiundiChairperson

Mr. Wilfred NyachiaMember

Dr. Aggrey MlimukaMember

Hon. Zainab R. Kawawa (MP) Member

Ms Nuru H. M. MillaoMember

Mr. Shaban MnubiMember

Mr. Leonce AnthonyChief Internal Auditor

Mr. Eliakim SamwelHead of Procurement Management Unit

Mr. Savo S. Mung’ong’oDirector of Finance and Administration

Prof. Sendui Ole NguyaineiDirector of Hospital Services

Ms. Mkunde SenyagwaDirector of Conferences and Marketing

Arch. Paul K. NdosaDirector of Estate and Projects

Mr. Elishilia D. KaayaManaging Director


Human Resource Management

Job CreationDuring the period under report, the Centre’s permanent staff complement was 128 being 64 female and

64 male.

It also significantly contributed to both direct and indirect job creation in the Arusha City and Tanzania at

large through spillover effect.

Human Resource DevelopmentThe Centre continued to offer sponsorship to its employees both in short and long term courses within

and outside the country on various disciplines as specified on the Centre’s Training Program. Tailor made

programmes were also conducted for customer care, preparation for life after retirement and information

technology as strategy of costs reduction.

Working RelationshipsMembers of staff continued to enjoy harmonious working relationship through Workers Council and

departmental meetings. The annual party and mayday celebrations which are conducted annually, they

bring together employees at leisure time.

Performance Recognition and IncentiveIn this financial year the AICC continued to implement its incentive policy, which includes awarding best

workers aimed at recognising the outstanding performance of individual employees based on various

performance criteria set on appraisal forms and OPRAS.

These awards have proven to be popular and highly effective in terms of their ability to motivate and

incentivise staff to exceed their personal performance targets and deliver consistently excellent service in

the course of their daily duties.

The Centre met medical and bereavement expenses to its employees and their immediate dependants

through National Health Insurance Fund as part of its staff welfare provisions as provided in incentive

scheme.

AICC CSR InitiativeThe Arusha International Conference Centre (AICC) believes that for its business to continue growing, it

needs to operate in a good sustainable environment. This is the reason why the Centre has a dedicated

Social Corporate Responsibility (CSR) Initiative that focuses on supporting various community initiatives

and the general public such as schools, communities, vulnerable individuals, students and institutions.

For the financial year 2011/2012, AICC had spent over 40,000,000/- from its CSR initiative to support

community, schools and institutions within and outside Arusha region. The support also includes the

contribution made to the Revolution government of Zanzibar for consoling the victims of the capsized ship,

MV Spice Islander.

Creating FuturesThe AICC in collaboration with training institutions offer opportunities for practical training to individuals from

all over Tanzania to obtain skills and experience in the different fields by working at the Centre for a period

from one month to six months. Specific focus areas are conferences & marketing, finance, administration,

estates, hospital and public relations & protocol. During the year under review, a number of these interns

were offered employment elsewhere.


GovernanceThe Governance process at AICC has been tested; is being tested; and, will continue to be tested. As any

other corporate process several things are involved: the internal controls which aim at checking possible

lopsided or lopsiding; and, on the other hand, risk management which is geared toward identifying,

assessing, deciding on response to, and reporting on opportunities and threats that affect the achievement

of its objectives. While it is the duty of the Management to ensure that the governance process is handled

with due care, the Board of Directors through its various committees has continuously ensured that good

governance is given the priority it deserves. It is on the premises that AICC has managed to cross over

the financial year 2010/12 with minimal adverse impact on issues relating to governance and readying for

future trials.

The internal audit unit, while mainly tasked for assurance and consulting service to the organization, by

evaluating and improving the effectiveness of risk management, controls and governance process, during

the ending financial year spent almost half of its productive time in consulting assignments. Most of these

assignments were conducted in team-working, aimed at fostering an environment that give assurance that

controls are not only in place but also that they are current, aligned to other public policies and regulations

and at the same time working for the betterment of the organization and its stakeholders.

During the financial year 2010/12, employees of the Centre, without whom many operating activities

wouldn’t be achieving the intended goals, played an important role in ensuring that the governance process

at AICC is not left to the Board of Directors and the Management alone but that, it is everyone on board’s

business. It is the hope of the Centre therefore that during the financial year 2011/12 the cooperation that

was manifested during the financial year 2010/11 will not only be maintained but be given more momentum.

With good governance, it will be good to be at AICC for everyone on board.

Conference ServicesIn this the financial year 2011/2012, the Centre hosted a total 62 meetings. Out of these meetings, 32 were

local and 29 were international. All these meeting brought to Tanzania and Arusha specifically a total of

15,000 conference delegates.

Marketing and Promotion ActivitiesA number of promotional and marketing activities for the purpose of maintaining existing and creating new

customers for the Centre have been undertaken. Some of the marketing mechanisms which have been

used to promote the Centre’s products and services are as follows:

AdvertisementsThe Centre has advertised in the local TV (TBC 1) and externally the Centre has advertised in the Worldwide

Convention Centres Directory, Association Meetings International (AMI), Selling Tanzania Magazine AfDB

Annual Meeting Daily, Tanganyika Law Society Directory and BEDOUK Magazine. All these are conference

publications which have a wide coverage worldwide.

ExhibitionsAICC participated in local and international exhibitions; the centre participated in EIBTM (Events, Incentives,

Business Travel) exhibition which took place in Barcelona –Spain, IMEX Frankfurt-Germany and Meetings

Africa 2012. The centre was able to make contact with potential customers and obtained relevant information

as regards centre’s services and facilities.

The centre participated in all national exhibitions which facilitate to increase awareness of the centre’s

services and facilities which are Karibu Trade Fair, Sabasaba Exhibition, National 50th Uhuru Exhibitions,

Foreign Affairs Ministry 50th Uhuru Exhibition and Nane Nane Exhibitions which took place in Tanzania.

Web Site - www.aicc.co.tzThe AICC Web site which has been redesigned and now can easily be accessed with different information

regarding the Centre’s services and facilities thus increase the Centre’s market share.

ICCA WorkshopICCA African chapter is the association for meeting and events industry, it’s a key mechanism to successfully

release the potential of the African continent and its market to the other world/customers with its potential

data base, thus the centre was involved in the workshop which equipped its staffs with new skills and

development in the industry which enhance exchange of knowledge and information as it involved buyers

and sellers of meetings and events.

Marketing ChallengesSome of the challenges the centre faces include shortage of adequate space in both meeting rooms and

exhibition areas and banqueting facilities, pillars in some of the rooms and distance between meeting

rooms (located in three different blocks and floors).


institutions to send their meetings in Hotels and private venues.

United Nations due to financial crisis such institution have reduced assistance to such meetings thus

some organizations stopped holding their meetings who used to bring meetings to the centre regularly.

especially when we get more than one meeting at a time.

Despite the above and other related challenges, the Centre hosted a number of high profile meeting during

the period under report some of which include:

Conference’s Income for the past 10 years

4,000,000,000

3,500,000,000

3,000,000,000

2,500,000,000

2,000,000,000

1,500,000,000

1,000,000,000

500,000,000

02007/08 2008/09 2009/10 20010/11 2011/12


Estates and Projects

The department continued to perform its traditional role of property management together with projects

development. The overall objective being realization of maximum returns from the existing property and

development of new ones to increase the Center’s revenue and increase housing stock in Arusha Municipality.

In the year under review several activities were performed towards realization of the mentioned objective

as follows:-

i. Repair and maintenance of the housing stock and office complex,

ii. Purchase of new equipments,

iii. Development of new housing and commercial projects.

iv. Various Estate Policies

v. Preparations for upgrading/ development of AICC hospital

Repair and Maintenance of PropertiesRepair and maintenance works were executed in 479 housing units, office complex and conference facilities

to enhance their value and aesthetic conditions.

Repair and maintenance works were also carried out at the hospital including modernization of consultation

rooms, construction of shade for visitors, and plumbing works.

Major works done were the rehabilitation of hospital theatre room and completion of rehabilitation of one

block of flats at Kijenge Estate.

Purchase of New Equipment New standby generator of 600 KVA was purchased and installed at headquarters complex to arrest the

problem of power interruptions and rationing.

New modern equipment’s like theatre lamp was purchased and installed at the hospital.

New Commercial and Housing ProjectsPreliminary preparations for construction of state of art convention Centre at Kijenge site, commercial

complex at Kaloleni Estate and three blocks of flats in Corridor area and Amani Road were conducted.

Estate PoliciesPreparation of AICC Estate Management Policy and Joint Venture Policy was completed and approved by the

Board of Directors for use. Preparation of Property Management data base (Property Handler) was initiated.

6,000,000,000

5,000,000,000

4,000,000,000

3,000,000,000

2,000,000,000

1,000,000,000

02007/08 2008/09 2009/10 2011/1220010/11

Office

House

Total

Income Generated from Estates for the Period of 2007/08 - 2011/12


Hospital Services The centers Hospital continued with its provision of good quality services to its clients between July 2011

and June2012. During this period a total of 1, 702 in-patients and52, 839 out-patients were seen in different

clinics both general and specialized. The main theatre had a total of 327 major operations and 151 minor

procedures respectively. The number of clients has increased as a result of an improved service provision

when compared to the previous year by 12 percent (i.e. July 2010-June2011 had a total of 48,566 patients

whereas in this period the total number of patients is 54,538).

The Management of AICC implemented an awareness screening campaign about the NCD (non-communicable

diseases) and inspires people to adopt simple behavioral changes that ultimately improve the quality of life

of the community.In this exercise a total of 587 people from different corners of Arusha city were screened.

Hospital Equipment’sThe hospital acquired the following new equipment’s;

One new baby incubator, a dry autoclave to be used in the labour ward, a steam sterilizer for use in the

major theatre pulseoxymeter and an oxygen concentrator machine.

StaffingThere was a shortage of staff more especially in the nursing section after two nurses decided to resign

whereas only one nurse was recruited. More new staffs in the laboratory (four staffs) and one medical

recorder were employed.

Patients Statistics for the Past Five(5) Years

250,000

200,000

150,000

100,000

50,000

02007/08 2008/09 2009/10 2010/11 2011/12 TOTAL

Outpatients Income

Inpatients Expenditure

Total Profit/(Loss)

Hospital’s Income for the Past 5 years

2,500,000,000

2,000,000,000

1,500,000,000

1,000,000,000

500,000,000

02007/08 2008/09 2009/10 2010/11 2011/12

Hospital’s Income for the Past 5 years

2,500,000,000

2,000,000,000

1,500,000,000

1,000,000,000

500,000,000

0

(500,000,000) 2007/08 2008/09 2009/10 2010/11 2011/12


Arusha International Conference Centre

1.0. BACKGROUND

1.1. EstablishmentArusha International Conference Centre was established under the Public Corporations Act, 1969, by a

Presidential Order, viz, the Arusha International Conference Centre (Establishment) Order, 1978 issued

through Government Notice No. 115 published on the 25th August, 1978.

1.2. ObjectivesThe main objectives for which the Centre was established include:-

other premises and lands in Arusha City which belonged to the defunct East African Community.

1.3. FinancingThe Centre is financed through various sources including capital fund (value of assets taken over from the

defunct East African Community); capital grants from the government and other donors and own funds

generated from operations (accumulated surplus).

1.4. Management StructureThe management structure includes ten members of the Board of Directors and the Managing Director of

the Centre as the Secretary to the Board. It also includes six executive managers who assist the Managing

Director in their respective capacities as either heads of directorates or departments. The names of

management personnel of the Arusha International Conference Centre for the financial year ended 30th

June, 2012 were as follows:.

Board of Directors

S/N NAME POSITION NATIONALITY

1 Amb. Christopher C. Liundi Chairperson Tanzanian

2 Ms. Rose M. Lugembe Vice Chairperson Tanzanian

3 Mr. Wilfred L. Nyachia Member Tanzanian

4 Mr. Joseph F. Chilambo Member Tanzanian

5 Hon. Zainab R. Kawawa (MP) Member Tanzanian

6 Mr. Issa M. Suleiman Member Tanzanian

7 Mr. Shabani B. H. Mnubi Member Tanzanian

(up to March, 2012)

8 Ms. Nuru H. M. Millao Member Tanzanian

9 Dr. Aggrey K. Mlimuka Member Tanzanian

10 Mr. Makumba T. Kimweri Member Tanzanian

11 Mr. DushHood Mndeme (w. e. f. March, 2012) Member Tanzanian

12 Mr. Elishilia D. Kaaya Secretary Tanzanian

The Board of Directors’ term of office expires on 13th November, 2012.


Executive Management

S/N NAME POSITION

1 Mr. Elishilia D. Kaaya Managing Director

2 Mr. Savo Mung’ong’o Director, Finance and Administration

3 Dr. Sendui Ole Nguyainei Director, Hospital Services

4 Mr. Paul Ndosa Director, Estates and Projects

5 Ms. Mkunde Senyagwa Director, Conferences and Marketing

6 Mr. Leonce Anthony Chief Internal Auditor

7 Mr. Eliakim Samwel Chief Procurement and Logistics Officer

The overall control of the Centre vests in the Board of Directors whereas the day to day affairs are supervised

by the Managing Director.

1.5. Audit MandateArticle 143 of the constitution of the United Republic of Tanzania, and as amplified in Section 32 (4) of

the Public Audit Act No. 11 of 2008, mandates the Controller and Auditor General (CAG) the statutory

auditor of the Centre. However, in accordance with Section 33 of the same Act, M/S AMAS Associates were

authorized to carry out the audit of the Centre on behalf of the Controller and Auditor General.

1.6. Audit ObjectivesAn audit involves performing procedures to obtain audit evidence sufficient and appropriate to provide

a basis for my opinion about the amounts and disclosures in the financial statements. The procedures

selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement

of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor

considers internal control relevant to the entity’s preparation and fair presentation of the financial statements

in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of

expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating

the appropriateness of accounting policies used and the reasonableness of accounting estimates made

by management, as well as evaluating the overall presentation of the financial statements. An audit involves

performing procedures to obtain audit evidence sufficient and appropriate to provide a basis for my

opinion about the amounts and disclosures in the financial statements. The procedures selected depend

on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial

statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal

control relevant to the entity’s preparation and fair presentation of the financial statements in order to design

audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion

on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of

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

as evaluating the overall presentation of the financial statements.

1.7. Audit ScopeThis covered the evaluation of the effectiveness of the financial accounting systems and internal controls

over the various activities of the Centre, examination and verification of assets and liabilities, income and

expenditure items, cash flows as well as the statement of changes in equity for the year ended 30th June,

2012. We also carried out such other auditing procedures we considered necessary for the purpose of

forming an opinion on the financial statements.

As auditors, we are not required to search specifically for fraud and, therefore, our audit cannot be relied

upon to disclose all such matters. However, our audit was planned so that we would have a reasonable

expectation of detecting material misstatements in the financial statements resulting from irregularities or

fraud. The responsibility for prevention and detection of irregularities or fraud rests with the management

who are responsible for the maintenance of an adequate system of internal controls.

1.8. Audit MethodologyOur audit was carried out in accordance with International Standards on Auditing issued by the International

Auditing and Assurance Standards Board (IAASB). The audit was conducted on a sample basis and the

findings are confined to the extent that the records, documents and information requested for the purpose

of the audit were made available to us. Transactions and/or records beyond the end of reporting period

were also examined whenever deemed necessary in order to substantiate a finding or to indicate a trend.

2.0. DIRECTOR’S REPORT

2.1. IntroductionThe Directors hereby submit their report together with the audited financial statements for the year ended

30th June, 2012 which disclose the financial position of Arusha International Conference Centre. The


audited statements are set out on page 15 to page 36 of the report.

2.2. DirectorsMembers of the Board of Directors who served the Arusha International Conference Centre during the year

are as stated below: -

SN NAME POSITION AGE (yrs) QUALIFICATION NATIONALITY

1. Amb. Christopher C. Liundi Chairperson 72 MA - inter.Studies Tanzanian

2. Ms. Rose Lugembe Vice Chairperson 65 MPA - Public

Administr.

Tanzanian

3. Mr. Wilfred Nyachia Member 64 BA (Hons) Tanzanian

4. Mr. Joseph F. Chilambo Member 39 BCom (Hons)

Marketing

Tanzanian

5. Hon. Zainab R. Kawawa (MP) Member 34 MBA Tanzanian

6. Mr. Issa M. Suleiman Member 69 Radio Broadcast -

GDR

Tanzanian

7. Mr. Shaban B.H. Mnubi Member

(up-to March, 2012)

Tanzanian

8. Ms. Nuru H. M. Millao Member 53 MBA - Public

Service

Tanzanian

9. Dr. Aggrey Mlimuka Member 54 PhD in Law,

LLM, LLB

Tanzanian

10. Mr. Makumba T. Kimweri Member 59 MBA - Business

Admin

Tanzanian

11. Mr. DushHood Mndeme Member

(w.e.f. March, 2012)

56 MBA - Public

Admin

Tanzanian

12. Mr. Elishilia D. Kaaya Secretary 50 MBA, CPA (T) Tanzanian

2.3. Statement of Directors’ Responsibilities in Respect of The Financial StatementsThe Directors are responsible for the preparation of financial statements of Arusha International Conference

Centre which show a true and fair view of the state of affairs to the Centre in accordance with the International

Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB).

The Directors confirm that suitable accounting principles have been used and applied consistently and

reasonable and prudent judgements and estimates have been made in the preparation of the financial

statements for the year ended 30th June, 2012. The Directors also, confirm that applicable accounting

standards have been followed and that the financial statements have been prepared on a going concern

basis.

The Directors are responsible to ensure that the Centre keeps proper accounting records that disclose

with reasonable accuracy at any time the financial position of the Centre. They are also, responsible for

safeguarding the assets of the Centre and hence, for taking reasonable steps for the prevention and

detection of fraud, errors, and other irregularities. The Directors are also, responsible for the maintenance

of an adequate system of internal controls.

2.4. Principal Functions of Arusha International Conference CentreThe objectives of the Centre include:

other premises and lands in Arusha City that belonged to the defunct East African Community.

seminars, etc.

In exercising its functions of control and management, the Centre shall have due regard to: -

conserves the environment in a coherent and sustainable way.

among the local communities, not only in Arusha region and the city, but also nationally.


2.5. Arusha International Conference Centre’s Performance and Future Developments

2.5.1. Performance

For the past six years (2006/2007 to 2011/2012), audit reports have indicated that:

financial year and got clean certificates.

parliamentary committee and subsequently tabled before the Parliament through the Minister for

Foreign Affairs and International Co-operation as per the government legislation.

in the short term and the foreseeable future.

The Centre’s performance has been summarized as follows:

DESCRIPTION CURRENT PERIOD %2011/2012)

PREVIOUS PERIOD %(2010/2011)

Current Ratio increased/ (Decreased) by (37) 59

Current Assets Increased by 38 19

Current Liabilities Increased/ (Decreased) by 169 (25)

Total Income Increased by 34 4

Total Expenditure Increased by 30 17

Assets Turnover Ratio 4 3

The main factors that led to the above situation were:

- Having in place appropriately trained personnel to man the Centre’s operations.

- Careful and continuous evaluations and analysis of the underlying business environment that is

followed by appropriate measures by the Board of Directors.

2.5.2. Future Development and/or Plans

The vision of the Centre is to be a model and enabler of business tourism.

The mission of the Centre is to promote and provide quality business tourism services to national and

international clientele for enhanced national, social and economic development.

AICC therefore endeavours to offer quality and effective international congress tourism services, quality

offices, residential accommodation and medical services in Africa.

2.6. Solvency of the CentreThe Directors have reviewed the current financial position of the Centre. On the basis of the review, the

Directors are of the opinion that the Centre is on sound financial footing, being able to meet all its current

and maturing financial obligations without any hindrance.

2.7. Employees WelfareThe Centre has the following employees’ welfare arrangements:

2.7.1. Training

The Centre offers sponsorship to its employees both in short and long term courses within and outside the

Country on various disciplines based on guidelines issues from time to time.

2.7.2. Medical Facilities

The Centre meets fully the cost of medical consultation and treatment for all employees and their immediate

dependants as stipulated by the Centre’s staff regulations.

2.7.3. Relationship between Management and Employees

There is a systematic procedure of communication with employees on a regular basis, which is done

through department meetings, management and staff meetings as well as through notice boards, circulars

or through workers’ council meetings. Participatory approach is used as a method of reaching pertinent

decisions affecting the entire workforce.


2.8. Employees Benefits

2.8.1. Retirement Benefits

Arusha International Conference Centre has statutory obligations to contribute to various pension schemes

in favour of all the employees employed under permanent and pensionable terms. The pension schemes in

force which the Centre contributes include the Parastatal Pension Fund (PPF) and National Social Security

Fund (NSSF).

Contributions to these funds are recognized as an expense in the period the employees render the related

services.

The Centre has no legal or constructive obligations to pay further contributions if the Funds have no

sufficient assets to pay all employees the benefits relevant to their services in the current and prior period.

2.8.2. Short Term Benefits

The cost of all short-term employee benefits such as salaries, employees entitlements to leave pay, medical

aids, long service award, other contributions, etc. are recognized during the period in which the employees

render the related services.

2.8.3. Termination Benefits

Termination benefits are payable whenever an employee’s employment is terminated before the normal

retirement date or whenever an employee accepts voluntary redundancy in exchange of these benefits.

The Centre recognizes termination benefits when it is constructively obliged to either terminate the

employment of the current employees according to detailed formal plan without possibility of withdrawal or

to provide termination benefits as a result of an offer made to encourage voluntary redundancy.

2.9. Persons with DisabilitiesIt is the Centre’s policy to give equal opportunities to persons with disabilities for vacancies they are able to

fill. Employment by the Centre is therefore non-discriminatory and complies with international convention

relating to the Bill of Rights.

2.10. Gender BalanceArusha International Conference Centre gives equal opportunity to all Tanzanians during recruitment and

filling of Management positions provided that they have the necessary qualifications, qualities and abilities

regardless of their gender. As at 30th June, 2012 there were 60 males and 68 females.

2.11. Corporate GovernanceArusha International Conference Centre puts emphasis to highest Standards of Good Corporate

Governance. The organizational structure is flexible and accommodates changes from internal as well

as external environment. Moreover, the Centre periodically reviews its rules and regulations with a view

to ensuring the best performance. The Centre adheres to the global standards and practices of good

corporate governance. In doing so, the Centre has established and maintains, the Audit Committee of the

Board, the Human resources and Finance Committee of the Board, the Tender Board, an Internal Audit Unit

and Procurement Management Unit.

2.12. Environmental ProtectionArusha International Conference Centre implements Government’s Policy and directives on environmental

conservation. The Centre preserves the environment through tree planting, an activity which is being carried

out throughout the year. In implementing environmental care, the Centre had planted tree along Naura

River and continues to take care of them, an exercise which has become exemplary for environmental

protection in Arusha Municipality.

2.13. HIV/AIDS PolicyThe AICC Board of Directors approved the Centre’s HIV/AIDS Policy during its 111th meeting held on 19th

December, 2011. The Management of HIV/AIDS is an important challenge for the Arusha International

Conference Centre (AICC). AICC has determined some risks associated with an impact of HIV/AIDS as

follows: operational risk, legal risk and health risk.

While all these risks are under investigation, AICC has adopted the following core principles as a basis for

its HIV/AIDS policy.

Continuously assess the risk posed by HIV/AIDS on the operations of the Centre.

Limit the number of new infections among the employees.

Ensure employees living with HIV/AIDS are aware of their rights and that their rights are respected and


protected.

Provide care and support to employees and living with HIV/AIDS.

2.14. Anti Corruption at Work PlacesAICC implements ‘anti corruption’ at work place by adhering to good governance principles in procurements

and recruitments. The staff regulations set platform for anti corruption guidelines.

2.15. Statutory AuditorsThe Controller and Auditor General (CAG) is the statutory auditor of the Centre by virtue of Article 143 of

the constitution of the United Republic of Tanzania, and as amplified in Section 32 (4) of the Public Audit

Act No. 11 of 2008. However, in accordance with section 33 of the same Act, M/S AMAS Associates were

authorized to carry out the audit of the Centre on behalf of the Controller and Auditor General.

By Order of the Board

………………………………………… ……………………………………..

CHAIRPERSON DATE

3.0. AUDIT REPORT ON THE FINANCIAL STATEMENTS

TO: Amb. Christopher C. Liundi,

The Chairperson,

Board of Directors,

Arusha International Conference Centre,

P.O. Box 3081

ARUSHA

I have audited the accompanying financial statement of the Arusha International Conference Centre which

comprise the Statement of Financial Position as at 30th June, 2012, Statement of Comprehensive Income,

Statement of Cash Flows and Statement of Changes in Equity for the year then ended and a summary of

significant accounting policies and other explanatory notes set out from pages 15 to 36 of this report.

Directors’ Responsibility for the Financial StatementsThe Directors are responsible for the preparation and fair presentation of these financial statements in

accordance with International Financial Reporting Standards. This responsibility includes designing,

implementing and maintaining internal control relevant to the preparation and fair presentation of

financial statement 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.

Responsibility of the Controller and Auditor GeneralMy responsibility as an auditor is to express an independent opinion on the financial statements based

on the audit. The audit was conducted in accordance with International Standards on Auditing (ISA) and

International Standards of Supreme Audit Institutions (ISSAI) and such other audit 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 depended on auditor’s judgment, including the

assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.


In making those risk assessments, the auditor considers internal controls relevant to the Arusha International

Conference Centre’s preparation and fair presentation of the financial statements in order to design audit

procedures that were appropriate in the circumstances, but not for the purpose of expressing an opinion on

the effectiveness of the Centre’s internal control. An audit also includes evaluating the appropriateness of

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

as evaluating the overall presentation of the financial statement.

In addition, Sect. 10 (2) of the PAA of 2008 required me to satisfy myself that the financial statements have

been kept in accordance with the appropriate accounting standards and that; reasonable precautions have

been taken to safeguard the collection of revenue, the receipt, custody, disposal, issue and proper use of

public property, and that the law, directions and instructions applicable thereto have been dully observed,

expenditures of public monies have been properly authorized.

Furthermore, Sect. 44 (2) of the Public Procurement Act No. 21 of 2004 and Regulation No. 31 of the

Public Procurement (Goods, Works, Non-consultant services and Disposal of Public Assets by Tender)

Regulations of 2005 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.

Unqualified OpinionIn my opinion, the financial statements present fairly, in all material respect, the financial position of

the Arusha International Conference Centre as at 30th June, 2012, and its financial performance and

its cash flows for the year then ended in accordance with International Financial Reporting Standard

(IFRSs) and comply with the Public Audit Act No. 11 of 2008 and the Arusha International Conference

Centre (Establishment) Order, 1978 issued under Government Notice No. 115 published on 25th

August, 1978.

Report On Other Legal and Regulatory Requirements

Compliance with Public Procurement ActIn view of my responsibility on the procurement legislation, and taking into consideration the procurement

transactions and processes reviewed as part of this audit, the Arusha International Conference Centre has

generally complied in all material respects with the provisions of the Public Procurement Act, 2004 and its

related Regulations of 2005.

Ludovick S.L. UtouhCONTROLLER AND AUDITOR GENERAL

The National Audit Office,

P.O.BOX 9080,

Dar es Salaam

Date: -------------------


Financial Statements

STATEMENT OF FINANCIAL POSITION AS AT 30TH JUNE, 2012 STATEMENT OF FINANCIAL POSITION AS AT 30TH JUNE, 2012 (Cont...)

ASSETS NOTE 30.06.2012 (TZS) 30.06.2011 (TZS)

NON CURRENT ASSETS

Property, Plant and Equipment 5 3,376,755,847 3,004,328,134

Investment Property 6 22,127,562,298 18,183,438,238

Intangible Assets 7 0 0

Total Non Current Assets 25,504,318,145 21,187,766,372

CURRENT ASSETS

Inventories 8 364,419,217 190,395,036

Trade and Other Receivables 9 5,239,809,338 2,378,913,005

Provision for Taxation 10 -89,246,792 226,555,400

Fixed Deposits 11 1,398,660,160 864,840,219

Cash and Cash Equivalents 12 771,061,945 1,951,292,195


Total Current Assets 7,684,703,868 5,611,995,854

TOTAL ASSETS 33,189,022,013 26,799,762,226

EQUITY AND LIABILITIES

Capital and Reserves

Capital Fund 13 183,453,722 183,453,722

Capital Grants 14 1,718,424,833 1,747,109,833

Revaluation Reserve 15 26,370,035,048 22,251,330,125

Accumulated Surplus/(Deficit) 16 865,167,494 462,269,209

Total Equity 29,137,081,097 24,644,162,889



Non Current Liabilities

Security Deposits 17 111,357,676 106,784,011

Deferred Tax Liability 18 1,879,205,773 1,283,205,458

Total Non Current Liabilities 1,990,563,449 1,389,989,469

Current Liabilities

Trade and Other Payables 19 1,689,308,669 765,609,868

Cash and Cash Equivalents 20 372,068,799 0

Total Current Liabilities 2,061,377,468 765,609,868

Total Liabilities 4,051,940,917 2,155,599,336

TOTAL EQUITY AND LIABILITIES 33,189,022,013 26,799,762,226

STATEMENT OF FINANCIAL POSITION AS AT 30TH JUNE, 2012 (Cont...)

Notes 1 to 32 form part of these financial statements. Auditors report on pages 12, 13 and 14.

__________________________ ___________________ __________________________

Chairperson Date Director

NOTE 2011/2012 (TZS) 2010/2011 (TZS)

INCOME

Office Rent 3,699,657,927 3,577,369,449

House Rent 1,480,116,451 1,438,108,160

Medical Income 2,012,007,583 1,461,492,477

Conference Income 3,595,804,428 1,233,362,699

Other Income 21 132,502,606 464,532,058

TOTAL 10,920,088,995 8,174,864,843

LESS: EXPENDITURE

Administrative Expenses 22 3,145,700,930 2,485,900,658

Marketing Expenses 23 361,514,263 262,558,993

Financial Expenses 24 13,325,119 20,723,323

Operational Expenses 25 4,609,557,121 3,284,109,864

Other Expenses 26 301,675,170 270,260,038

Depreciation and Amortization Expense 1,146,996,032 1,053,793,274

TOTAL EXPENDITURE 9,578,768,636 7,377,346,150

SURPLUS/(DEFICIT) BEFORE TAXATION 1,341,320,359 797,518,693

LESS: INCOME TAX EXPENSE 27 1,109,102,136 265,913,373

SURPLUS/(DEFICIT) AFTER TAXATION 232,218,223 531,605,320

LESS: LOSS ON DEMOLISHED HOUSES 28 399,826,292 0

SURPLUS FOR THE YEAR -167,608,070 531,605,320

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30TH JUNE, 2012


__________________________ ___________________ __________________________



STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30TH JUNE, 2012

NOTE 2011/2012 (TZS) 2010/2011 (TZS)

CASH FLOWS FROM OPERATING ACTIVITIES

Cash Receipts From Customers 7,310,135,105 7,665,769,192

Cash Paid to Suppliers and Employees 7,513,069,351 6,300,045,360

CASH GENERATED FROM OPERATIONS -202,934,246 1,365,723,833

Tax Paid During the Year 197,299,629 0

NET CASH FROM OPERATIONS -400,233,875 1,365,723,833

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of PPE -1,118,864,224 -488,906,539

Acquisition of Investment Property -42,249,745 -78,617,802

Acquisition of Intangible Assets -8,053,306 0

Proceeds - Disposal of PPE 12,528,438 4,200,000

NET CASH USED IN INVESTING ACTIVITIES -1,156,638,838 -563,324,341

-1,556,872,714 802,399,492

CASH FLOWS FROM FINANCING ACTIVITIES

Security Deposits 4,573,665 20,310,851

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS -1,552,299,049 822,710,343

CASH AND CASH EQUIVALENT AT THE BEGINNING OF THE YEAR 1,951,292,195 1,128,581,852

398,993,146 1,951,292,195


__________________________ ___________________ __________________________


Capital Fund (TZS)

Capital Grants (TZS)

Revaluation Reserve (TZS)

Accumulated Surplus/(Deficit)

- (TZS)

TOTAL EQUITY (TZS)

Balance As At 1st July, 2010 183,453,722 1,775,794,833 22,251,330,125 -69,336,111 24,141,242,569

Surplus/(Deficit For the Year 531,605,320 531,605,320

Less: Amortisation of Capital

Grants

-28,685,000 -28,685,000

Balance As At 30th June, 2011 183,453,722 1,747,109,833 22,251,330,125 462,269,209 24,644,162,889

Balance As At 1st July, 2011 183,453,722 1,747,109,833 22,251,330,125 462,269,209 24,644,162,889

Additions During the Year 4,689,211,277 4,689,211,277

Revaluation Surplus on Demol-

ished Houses

-570,506,354 570,506,354 0

Surplus/(Deficit For the Year -167,608,070 -167,608,070

Less: Amortisation of Capital

Grants

-28,685,000 -28,685,000

Balance As At 30th June, 2012 183,453,722 1,718,424,833 26,370,035,048 865,167,494 29,137,081,097

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30TH JUNE, 2012


__________________________ ___________________ __________________________



Notes on the AccountsArusha International Conference Centre

NOTE 1: LEGAL STATUS

Arusha International Conference Centre was established under the Public Corporations Act, 1969, by a

Presidential Order, viz, the Arusha International Conference Centre (Establishment) Order, issued through

Government Notice No. 115 published on the 25th August, 1978.

The main objectives for which the Centre was established include:-

To manage and control the headquarters complex of the defunct East African Community and all other

premises and lands in Arusha City which belonged to the defunct East African Community.

To provide facilities and services in the complex for the purposes of conferences, meetings, seminars, etc.

The Centre is a public corporation incorporated under the Public Corporation Act, 1969 and domiciled in

Arusha city. The address of the registered office is P. O. Box 3081, Arusha. Tanzania.

NOTE 2: BASIS OF PREPARATION

The financial statements have been prepared under the historical cost convention. No adjustments have

been made for inflationary factors affecting the accounts.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting

estimates. It also requires management to exercise its judgment in the process of applying the Centre’s

accounting policies. The areas involving a higher degree of judgment or complexity, or areas where

assumptions and estimates are significant to the financial statements are separately disclosed in a note.

NOTE 3: STATEMENT OF COMPLIANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS

The financial statements for the year ended 30th June, 2011 and the comparative figures for the previous

year have been prepared in accordance with International Financial Reporting Standards (IFRSs) and all

applicable interpretations issued by the International Accounting Standards Board (IASB). The Centre

adopted IFRSs in the financial year ended 30th June, 2005 with a transition date being 1st July, 2003.

NOTE 4: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

4.1. Property, plant and equipment

4.1.1. Owned Assets

Property, plant and equipment are stated at cost as deemed cost less accumulated depreciation and any

accumulated impairment losses. The cost of self-constructed assets includes the cost of materials, direct

labour, the initial estimate, where relevant, of the costs of dismantling and removing the items and restoring

the site on which they are located, and an appropriate proportion of production overheads.

Certain items of property, plant and equipment that had been revalued to fair value on or prior to 1st July,

2003, the date of transition to IFRSs, are measured on the basis of deemed cost, being the revalued amount

at the date of that revaluation.

Property that is being constructed or developed for future use as investment property is classified as


property, plant and equipment and stated at cost until construction or development is complete, at which

time it is reclassified as investment property.

Where parts of an item of property, plant and equipment have different useful lives, they are accounted for

as separate items of property, plant and equipment.

4.1.2. Revaluation

During the year ended 30th June, 2008 the Centre revalued its items of Property, Plant and Equipment

comprising of Plant and Machinery, Office, Conference and Hospital Furniture and Equipment and Domestic

Furniture and Equipment. Thus, adopting the revaluation model. The effective date of revaluation was 31st

December, 2007. The revaluation of such items in future would be conducted after every five years. The

revaluation surplus would be credited to a Revaluation Reserve Account.

4.1.3. Subsequent Costs

Subsequent costs (major renovation costs) are included in the asset’s carrying amount or are recognized

as a separate asset, as appropriate, only when it is probable that future economic benefits associated with

the item will flow to the Centre and the cost of the item can be measured reliably. All other repairs and

maintenance are charged to the statement of comprehensive income during the financial year in which they

are incurred.

4.1.4. Depreciation

Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to reduce the

cost of each asset to its residual value over its estimated useful life at a given rate per annum as detailed below:

ASSET DESCRIPTION RATE PER ANNUM

Buildings 1.5

Plant and Machinery 12.5

Office, Conference and Hospital Furniture 10.0

Office, Conference and Hospital Equipment 20.0

Domestic Furniture and Equipment 15.0

Motor Vehicles 25.0

Fixtures and Fittings 10.0

Depreciation is charged on assets from the date when they are ready for use and stop on the date when the

asset is derecognized by the Centre.

Assets that are subject to depreciation are reviewed for impairment whenever events or changes in

circumstances indicate that the carrying amount may not be recoverable.

Gains and losses on disposal are determined by comparing the disposal proceeds with the carrying amount

and are credited/charged to the statement of comprehensive income.

4.2. Investment PropertyInvestment property is a property which is held either to earn rental income or for capital appreciation or

for both.

Cost model is the policy adopted by the Centre for measuring investment property.

Investment property is stated at cost less subsequent accumulated depreciation and any accumulated

impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the item.


Subsequent costs (major renovation costs) are included in the asset’s carrying amount or are recognized

as a separate asset, as appropriate, only when it is probable that future economic benefits associated with

the item will flow to the Centre and the cost of the item can be measured reliably. All other repairs and

maintenance are charged to the statement of comprehensive income during the financial year in which they

are incurred.

Investment property that had been revalued to fair value on or prior to 1st July, 2003, the date of transition to

IFRSs, is measured on the basis of deemed cost, being the revalued amount at the date of that revaluation.

4.2.2. Depreciation

Land is not depreciated. Depreciation on buildings is calculated using the straight-line method to reduce

the cost of each asset to its residual value over its estimated useful life at a rate of 1.5% per annum.

Depreciation is charged on investment properties from the date when they are ready for use and stop on


the date when the respective asset is derecognized by the Centre.

Investment properties are reviewed for impairment whenever events or changes in circumstances indicate

that the carrying amount may not be recoverable.

Gains and losses on disposal are determined by comparing the disposal proceeds with the carrying amount

and are credited/charged to the statement of comprehensive income.

4.3. Intangible AssetsIntangible assets, including computer software, that are acquired by the Centre are stated at cost less

accumulated amortization and impairment losses.


Subsequent costs on capitalized intangible assets are capitalized only when they increase the future

economic benefits embodied in the specific asset to which they relate. All other costs are expensed as

incurred.

4.3.2. Amortisation

Amortization is charged to the statement of comprehensive income on a straight-line basis over the

estimated useful lives of intangible assets unless such lives are indefinite. Goodwill and intangible assets

with an indefinite useful life are systematically tested for impairment at the end of each reporting period.

Other intangible assets are amortized from the date they are available for use. The estimated useful life for

the computer software is 5 years.

4.4. InventoriesInventories are stated at the lower of cost and net realizable value. Net realizable value is the estimated

selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

The cost is based on the first in first out (FIFO) principle and includes expenditure incurred in acquiring

the inventories and bringing them to their existing location and condition. The FIFO principle has been

consistently applied.

4.5. Provision for Impairment of ReceivablesReceivables are recognized initially at fair value and subsequently measured at fair value less provision for

impairment. Specific provision is made in the financial statements against receivables considered to be

doubtful of recovery.

4.6. Foreign Currency Translations

4.6.1. Functional and Presentation Currency

The financial statements are presented in Tanzania Shillings, which is the Centre’s functional and

presentation currency.

4.6.2. Transactions and Balances

Foreign currency transactions are translated into Tanzanian shillings at the rates of exchange ruling at the

dates of the transactions. Monetary assets and liabilities at the year end expressed in foreign currencies

are translated into Tanzanian shillings at the rates of exchange ruling at the end of the financial year. The

resultant gains/losses on exchange rate translations are dealt with in the statement of comprehensive

income. The rate that was adopted at the end of the reporting period was TZS 1600.17 equivalent to USD 1.

4.7. Cash and Cash EquivalentsCash and cash equivalents are carried in the statement of financial position at face value. For the purpose

of statement of cash flows, cash and cash equivalents comprise cash in hand, deposits held on call and

fixed deposits maturing within the next three months.

4.8. Income RecognitionIncome is recognized on accrual basis of accounting. Income is recognised only when it is probable that

the economic benefits associated with the transaction will flow to the Centre.

4.9. Income Related GrantsFunds received by the Centre from the Government or other donors for meeting operating costs and

expenses are credited to the statement of comprehensive income.

4.10. Capital GrantsCapital grants received from the Government or other donors in form of property, plant and equipment or

funds, whose primary condition is that the Centre should purchase, construct or otherwise acquire long

term assets, are deferred to capital grants account and released to the statement of comprehensive income


over the expected useful lives of relevant property, plant and equipment. The amount allocated annually

to the statement of comprehensive income equals to the depreciation charge relating to that capital grant.

4.11. ProvisionsProvisions are recognised when the Centre has a present legal or constructive obligation as a result

of past events, it is probable that an outflow of resources will be required to settle the obligation, and a

reliable estimate of the amount can be made. When the Centre expects a provision to be reimbursed, for

example under insurance contract, the reimbursement is recognised as a separate asset only when the

reimbursement is virtually certain.

4.12. Impairment Of AssetsAssets that have an indefinite life are not subject to amortization and are tested annually for impairment.

Assets that are subject to amortization or depreciation are reviewed for impairment whenever events or

changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognized for the amount by which the assets’ carrying amount exceeds its

recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and

value in use. For the purposes of assessing impairment, assets are grouped at the lowest level for which

there is separately identifiable cash flows (cash generating units).

4.13. Risk ManagementRisk is an inherent feature of the activities of any institution. Arusha International Conference Centre

endeavours to manage risk by having in place appropriate functional structures, systems and procedures.

These structures, systems and procedures evolve continuously in response to changes in the environment

in which the Centre operates. The following are the main types of risks the Centre is exposed to in the

course of executing its operations:

- Operational Risk

- Liquidity Risk

- Credit Risk

i. Operational Risk

Operational risk is the risk of loss both financial and non-financial resulting from inadequate systems,

management failures, ineffective internal control processes, fraud, theft, and human errors. The Centre

addresses this risk, inter alia, through ensuring existence of a sound internal control system.

Managing operational risk in the Centre is an integral part of the day to day operations by the management.

This risk is closely monitored by management and the Board of Directors.

ii. Liquidity Risk

Liquidity risk is the risk that the Centre faces by not having adequate funds to settle day to day obligations

as they fall due. The Centre has a prudent liquidity risk management through which it maintains sufficient

cash to cover committed credit facilities received, working capital as well as capital project requirements.

Liquidity risk management by the Centre includes forward planning and close monitoring by the finance

department.

iii. Credit Risk

Potential credit risk involves short term cash deposits and trade and other receivables. Risk relating to short

term cash deposits is managed through ensuring that cash surpluses are deposited with banks of high

credit standing.

Management of risk associated with trade and other receivables includes prompt invoicing, close follow up

and requiring regular customers to deposit money in advance to cover for services to be rendered.


Buildings (TZS)

Plant and machinery

(TZS)

Office, conference and hospital

furniture (TZS)

Office, conference and hospital equipment

(TZS)

Domestic furniture

and equipment

(TZS)

Motor vehicles

(TZS)

Fixture and fittings (TZS)

Works in course of

construction (TZS)

Total as at 31.12.2012

(TZS)

Total as at 31.12.2011

(TZS)

Cost/Valuation As At 01.07.2011

507,817,184 301,650,406 1,413,726,621 2,050,274,244 103,877,571 515,484,871 473,122,535 0 5,365,953,431 4,888,842,900

Additions During the Year

0 5,605,239 26,912,029 649,968,690 8,630,339 0 18,844,198 408,903,730 1,118,864,224 488,906,539

Adjustments/Disposals

0 0 0 -1,551,000 0 -106,102,515 0 0 -107,653,515 -11,796,008

Cost/Valuation As At 30.06.2012

507,817,184 307,255,645 1,440,638,650 2,698,691,934 112,507,910 409,382,356 491,966,733 408,903,730 6,377,164,141 5,365,953,431

Accumulated Depreciation and Impairment As At 01.07.2011

118,617,096 43,172,311 429,683,421 1,203,410,111 43,361,485 308,119,296 215,261,577 0 2,361,625,297 1,692,258,075

Charge During the Year

7,623,294 38,406,956 142,272,014 450,258,965 16,505,170 57,880,239 38,485,420 0 751,432,057 678,413,229

Adjustments/Disposals

0 0 0 -1,550,997 0 -107,801,080 -3,296,984 0 -112,649,061 -9,046,007

Accumulated Depreciation and Impairment As At 30.06.2012

126,240,389 81,579,267 571,955,435 1,652,118,079 59,866,655 258,198,455 250,450,013 0 3,000,408,293 2,361,625,297

Carrying Amount As At 30.06.2012

381,576,794 225,676,378 868,683,215 1,046,573,855 52,641,255 151,183,901 241,516,720 408,903,730 3,376,755,847 3,004,328,134

Carrying Amount As At 30.06.2011

389,200,088 258,478,095 984,043,200 846,864,133 60,516,086 207,365,575 257,860,958 0 3,004,328,134

NOTE 5: PROPERTY, PLANT AND EQUIPMENT NOTE 6: INVESTMENT PROPERTY

Description Land and Buildings (TZS)

Total as at 30.06.2012 (TZS)


Cost/Valuation As At 01.07.2011 24,714,987,666 24,714,987,666 24,636,369,864

Revaluation Reserve 4,689,211,277 4,689,211,277 0

Additions During the Year 42,249,745 42,249,745 78,617,802

Adjustments/Disposals -574,244,888 -574,244,888 0

Cost/Valuation As At 30.06.2012 28,872,203,800 28,872,203,800 24,714,987,666

Accumulated Depreciation and Impairment As At

01.07.2011

6,531,549,428 6,531,549,428 6,158,466,079

Charge During the Year 387,510,669 387,510,669 373,083,349

Adjustments/Disposals -174,418,596 -174,418,596 0


30.06.2012

6,744,641,502 6,744,641,502 6,531,549,428

Carrying Amount As At 30.06.2012 22,127,562,298 22,127,562,298 18,183,438,238

Carrying Amount As At 30.06.2011 18,183,438,238 18,183,438,238


Description Computer software (TZS)

Anti virus (e-scan) (TZS)

1 Pc escam corporate edition 50 users (TZS)



Cost/Valuation As At 01.07.2011 2,932,222 8,099,312 5,405,831 16,437,365 16,437,365

Additions During the Year 8,053,306 0 0 8,053,306 0

Adjustments/Disposals 0 0 0 0 0

Cost/Valuation As At 30.06.2012 10,985,528 8,099,312 5,405,831 24,490,672 16,437,365


01.07.2011

2,932,222 8,099,312 5,405,831 16,437,365 14,140,669

Charge During the Year 8,053,306 0 0 8,053,306 2,296,696

Adjustments/Disposals 0 0 0 0 0


30.06.2012

10,985,528 8,099,312 5,405,831 24,490,672 16,437,365

Carrying Amount As At 30.06.2012 0 0 0 0 0

Carrying Amount As At 30.06.2011 0 0 0 0

NOTE 7: INTANGIBLE ASSETS NOTE 8: INVENTORIES

NOTE 9: TRADE AND OTHER RECEIVABLES

INVENTORIES 30.06.2012 (TZS) 30.06.2011 (TZS)

Medical Stores 209,840,020 101,908,636

Stationery Supplies 47,837,094 25,799,682

Tools and Spares 13,740,274 13,248,060

Building Materials 49,856,366 26,283,908

General Stores - Hardware etc. 43,145,463 23,154,750

TOTAL 364,419,217 190,395,036

TRADE AND OTHER RECEIVABLES 30.06.2012 (TZS) 30.06.2011 (TZS)

Trade Receivables 4,894,918,663 2,509,069,268

Endowment Assurance Deposit 230,569,846 0

Prepayments 21,407,477 20,415,793

Sundry Receivables 19,796,684 6,996,433

Staff Receivables 207,011,724 111,777,213

Advance to Suppliers 549,349,670 28,283,186

VAT 331,772,438 85,445,762

Sub - Total 6,254,826,501 2,761,987,654

Less: Provision for Impairment 1,015,017,163 383,074,649

TOTAL 5,239,809,338 2,378,913,005


PROVISION FOR TAXATION 30.06.2012 (TZS) 30.06.2011 (TZS)

The movement in the provision for taxation during the year is as follows:

Balance As At 1st July 226,555,400 361,855,350

Add: Income Tax Expense For The Year 301,388,102 112,010,004

Add: Income Tax Expense For Prior Years 211,713,719 23,289,946

513,101,821 135,299,950

-286,546,421 226,555,400

Deduct: Payments Made During the Year 197,299,629 0

Balance As At 30th June -89,246,792 226,555,400

NOTE 10: PROVISIONS FOR TAXATION

NOTE 11: FIXED DEPOSITS

NOTE 13: CAPITAL FUND

NOTE 14: CAPITAL GRANTS

NOTE 15: REVALUATION RESERVE

NOTE 12: CASH AND CASH EQUIVALENTS

FIXED DEPOSITS 30.06.2012 (TZS) 30.06.2011 (TZS)

Balance 1,398,660,160 864,840,219

The balance represents funds deposited in fixed deposit account at FBME Bank Ltd.

CAPITAL FUND 30.06.2012 (TZS) 30.06.2011 (TZS)

Balance 183,453,722 183,453,722

The balance represents value of assets taken over in year 1978 from the defunct East African Community.

CASH AND CASH EQUIVALENTS 30.06.2012 (TZS) 30.06.2011 (TZS)

NBC A/C 01403001564 175,156,150 66,774,218

NBC US$ A/C 0140050000976 451,922,428 1,560,083,393

CRDB A/C 335260 37,725,802 93,869,901

FBME Bank - Credit Card 105,019,765 202,529,099

NBC A/C 014103001552 0 28,035,583

Cash in Hand 1,237,800 0

TOTAL 771,061,945 1,951,292,195

CAPITAL GRANTS 30.06.2012 (TZS) 30.06.2011 (TZS)

Balance on 01.07.2011 1,747,109,833 1,775,794,833

Additions During the Year 0 0

1,747,109,833 1,775,794,833

Amortization During the Year 28,685,000 28,685,000

Balance on 30.06.2012 1,718,424,833 1,747,109,833

REVALUATION RESERVE 30.06.2012 (TZS) 30.06.2011 (TZS)

Balance on 01.07.2011 22,251,330,125 22,251,330,125

Additions During the Year 4,689,211,277 0

26,940,541,402 22,251,330,125

Less: Adjustment on Demolished Houses 570,506,354 0

Balance on 30.06.2012 26,370,035,048 22,251,330,125

The Centre’s items of property, plant and equipment were revalued and resulted into revaluation surplus

balances as shown above. In December, 2007 the revaluation of property, plant and equipment was done by

M/S Property Consultancy and Services Limited of P. O. Box 13310 Arusha, who are registered valuers. The

valuation was based on depreciated replacement cost. Again in March, 2012 the revaluation of Investment

Property was done by M/S Africa Property Limited of P. O. Box 32822 DSM, who are registered valuers.

The valuation was based on market value. The reserve is not available for distribution.


ACCUMULATED SURPLUS/(DEFICIT) 30.06.2012 (TZS) 30.06.2011 (TZS)

Surplus /(Deficit) Brought Forward 462,269,209 -69,336,111

Revaluation Surplus on Demolished Houses 570,506,354 0

1,032,775,564 -69,336,111

Surplus /(Deficit) for the Year -167,608,070 531,605,320

Surplus /(Deficit) Carried Forward 865,167,494 462,269,209

NOTE 16: ACCUMULATED SURPLUS / (DEFICIT) NOTE 19: TRADE AND OTHER PAYABLES

NOTE 20: CASH AND CASH EQUIVALENTS (BANK OVERDRAFT)

NOTE 17: SECURITY DEPOSITS

NOTE 18: DEFERRED TAX LIABILITY

SECURITY DEPOSITS 30.06.2012 (TZS) 30.06.2011 (TZS)

Balance 111,357,676 106,784,011

The balance represents refundable amounts received from tenants of office and residential houses as

security against any damages that may arise during the tenancy period.

DEFERRED TAX LIABILITY 30.06.2012 (TZS) 30.06.2011 (TZS)

Balance 1,879,205,773 1,283,205,458

The above balance of deferred tax liability represents amounts of income taxes payable in future periods in

respect of taxable temporary differences arising from differences between the carrying amount of an asset

or liability in the statement of financial position and its tax base.

TRADE AND OTHER PAYABLES 30.06.2012 (TZS) 30.06.2011 (TZS)

Trade Payables 1,569,724,646 652,326,287

Customers’ Advances 24,458,909 47,161,069

Statutory Employees Liabilities (PAYE) 2,973,889 2,851,702

Unpaid Sales Tax and Withholding tax 0 3,521,847

Utilities Payable 38,147,846 14,492,530

Audit Fees and Expenses Payable 40,000,000 35,000,000

Sundry Payables 14,003,379 10,256,433

TOTAL 1,689,308,669 765,609,868

CASH AND CASH EQUIVALENTS (BANK OVERDRAFT) 30.06.2012 (TZS) 30.06.2011 (TZS)

NBC A/C 0140300552 372,068,799 0

The Centre had an overdraft facility with NBC Limited, Arusha Branch, with a limit of TZS 100,000,000

at an interest rate of 20% per annum charged every month on the outstanding amount during the year

under review. A legal mortgage over nine buildings of the Centre secure the overdraft. The above balance

represents unpresented cheques drawn in excess of overdraft limit as at 30th June, 2012.


OTHER INCOME 2011/2012 (TZS) 2010/2011 (TZS)

Interest Income 32,432,293 9,009,939

Tender Non Refundable Deposit 9,000,000 7,850,000

Commission 14,127,940 5,409

Amortization of Capital Grants 28,685,000 28,685,000

Bill Boards 0 360,000

Depreciation Adjustment 4,995,549 2,250,000

Electricity Arrears Recovered 0 14,932,700

Fines to Defaulters 6,426,411 3,143,220

Hire of Football Grounds 14,913,040 18,157,500

Hire of Motor Vehicle 0 128,000

Lease Agreements 30,000 95,000

Long Overdue Liabilities 1,423,052 20,918,239

Group Endowment Scheme 7,158,118 0

Rent Recovered 0 6,008,350

Gain on Disposal of PPE 12,528,435 1,449,999

Gain/(Loss) on Exchange Rates Fluctuations 782,769 351,538,702

TOTAL 132,502,606 464,532,058

NOTE 21: OTHER INCOME

NOTE 22: ADMINISTRATIVE EXPENSES

ADMINISTRATIVE EXPENSES 2011/2012 (TZS) 2010/2011 (TZS)

Personnel Emoluments 1,420,043,641 1,064,501,206

Office Running Expenses 1,454,920,354 964,737,157

Terminal Benefits 42,919,992 245,425,832

Debts Collection Expenses 14,349,520 8,399,528

Project Feasibility Study 22,614,338 9,445,000

Security Services 190,853,085 193,391,935

TOTAL 3,145,700,930 2,485,900,658

MARKETING EXPENSES 2011/2012 (TZS) 2010/2011 (TZS)

Advertising and Publicity 45,115,009 60,290,525

Exhibitions and Fairs 274,222,450 180,794,503

Sales Promotion 35,181,804 20,213,965

Nane Nane Exhibition 6,995,000 1,260,000

TOTAL 361,514,263 262,558,993

FINANCIAL EXPENSES 2011/2012 (TZS) 2010/2011 (TZS)

Interest on Bank Overdraft 1,675,464 7,908,719

Bank Charges 11,649,655 12,814,603

TOTAL 13,325,119 20,723,323

OPERATIONAL EXPENSES 2011/2012 (TZS) 2010/2011 (TZS)

Rented Office Expenses 884,677,988 1,216,371,860

Residential House Expenses 242,963,393 379,344,376

Medical Expenses 1,428,319,405 1,170,977,170

Conference Expenses 2,053,596,335 517,416,458

TOTAL 4,609,557,121 3,284,109,864

NOTE 23: MARKETING EXPENSES

NOTE 24: FINANCIAL EXPENSES

NOTE 25: OPERATIONAL EXPENSES


OTHER EXPENSES 2011/2012 (TZS) 2010/2011 (TZS)

Directors' Fees and Expenses 261,675,170 227,791,057

Audit Fees and Special Investigation Expenses 40,000,000 42,468,980

TOTAL 301,675,170 270,260,038

INCOME TAX EXPENSE 2011/2012 (TZS) 2010/2011 (TZS)

Income Tax Expense For The Year 301,388,102 112,010,004

Income Tax Expense For Prior Years 211,713,719 23,289,946

Deferred Tax Expense 596,000,315 130,613,423

TOTAL 1,109,102,136 265,913,373

LOSS ON DEMOLISHED HOUSES 2011/2012 (TZS) 2010/2011 (TZS)

Demolished Houses 399,826,292 0

During the year 2011/2012, the Centre demolished 20 residential apartments at Soweto Estate and other

area of Arusha City for the purpose of constructing new residential houses.

Parties are considered to be related if one party has the ability to control the other party or exercise significant

influence over the other party in making financial and operating decisions. Related party transactions

effected during the year 2011/2012 included salaries, allowances, social security contributions, fees and

other expenses as follows:

There were no capital commitments as at 30th June, 2012.

The Centre may be liable for unspecified amount of liability upon determination of various civil suits pending

in courts of law. The Centre is a defendant in several civil suits as at 30th June, 2012 against its former

employees, tenants and other persons as plaintiffs.

NOTE 26: OTHER EXPENSES

NOTE 27: INCOME TAX EXPENSE

NOTE 28: LOSS ON DEMOLISHED HOUSES

NOTE 29: RELATED PARTY TRANSACTIONS

NOTE 30: CAPITAL COMMITMENTS

NOTE 31: CONTINGENT LIABILITIES

Board Members and Key Management Personnel 2011/2012 (TZS) 2010/2011 (TZS)

BOARD:

Board Members’ Fees 35,000,000 35,000,000

Board Expenses 226,675,170 192,791,057

Total 261,675,170 227,791,057

MANAGEMENT:

Salaries and Allowances 521,428,512 274,202,456

Outstanding on Loans 10,975,611 16,066,051

Other Advances 40,641,829 5,872,750

Employer’s PPF/NSSF Contributions 56,406,197 30,468,988

Total 629,452,149 326,610,245

All transactions with related parties are at arm’s length in the normal course of business, and on terms and

conditions similar to those applicable to others.


Previous year’s fi gures have been regrouped wherever considered necessary in order to make them

comparable with current year’s fi gures.

NOTE 32: COMPARATIVE FIGURES

aicc annual report · 2015-06-08 · report a turnover of tshs 10,920,088,995 as compared to tshs...

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