Independent Auditor's Report to the programme financial statement for the period from 31st March, 2015 to 31st March, 2019 of India: Partial Risk Sharing Facility for Energy Efficiency Project Grant number TF 0687 To, Mr. Saurabh Kumar, Managing Director, Energy Efficiency Services Limited, 5th& 6th Floor, Core - 3, Scope Complex, Lodhi Road, New Delhi 110003. Report on the Audit of the Programme Financial Statements of India: Partial Risk Sharing Facility for Energy Efficiency Project (the Project) financed by Global Environment Facility and administered by International Bank for Reconstruction and Development (IBRD) under Grant number TF 0687 Opinion We have audited the accompanying special purpose financial statements of India: Partial Risk Sharing Facility for Energy Efficiency Project (the Project) financed by Global Environment Facility and administered by International Bank for Reconstruction and Development (IBRD) under Grant number TF 0687 and implemented by Energy Efficiency Services Limited. These financial statements comprise of the Statement of Expenses by Project Components, and notes to these financial statements, including a summary of significant accounting policies (collectively referred to as the "Project Financial Statements"): In our opinion, the aforesaid special purpose Project Financial Statements give a true and fair view of the Statement of Statement of Expenses by Project Components for the period 31st March, 2015 to 31st March 2019, in accordance with the financial reporting provisions of Section 5.09 of the General Conditions of the World Bank read with the Financing and Project Agreement both dated 31st March, 2015 described in Financial Statement. Basis for Opinion We conducted our audit in accordance with the Standards on Auditing issued by Institute of Chartered Accountants of India (ICAI). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the implementing agency in accordance with the ICAI's Code of Ethics for undertaking this assignment, and we have fulfilled our ethical responsibilities in accordance with ICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. ?S & ~0 SFRN:5O9710 ;) Head Office: E-149, Opp. Sainik Vihar Gate No.1, Rishi Nagar, Rani Bagh, New Delhi-110034 Ph.: 011-47014141, Mobile: 9810189050, 9899812155 Email:- gulshan@vpgs.in / mohit@vpgs.in Website : www.vpgs.in Emphasis of Matter We draw attention to Notes to Accounts to the PFS describing the basis of accounting. The PFS is prepared to assist the Energy Efficiency Services Limited to meet the financial reporting requirements of the Project's Financing Agreements_for Investment Project Financing dated 31st March, 2015 in respect of preparation of the Project Financial Statements in a manner to reflect the operations, resources and expenditures related to the Project. As a result, these special purpose financial statements may not be suitable for another purpose. Our opinion is not modified in respect of this matter. Responsibilities of Management and those charged with Governance for the Project Financial Statements The Management of the implementing agency is responsible for the preparation and fair presentation of the Project Financial Statements in accordance with the financial reporting framework, and for such internal control as management determines is necessary to enable the preparation of Project Financial Statements that are free from material misstatement, whether due to fraud or error. The Management and those charged with governance are responsible for overseeing the implementing agency's financial reporting process. Audit;r's Responsibilities for the Audit of the Project Financial Statements Our objectives are to obtain reasonable assurance about whether the Project Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the Standards of Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Standard of Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: * identify and assess the risks of material misstatement of the Project Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. * obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. G * evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. * evaluate the overall presentation, structure and content of the Project Financial Statements, including the disclosures and whether these financial statements present the Project's operations and underlying transactions and events in a manner that achieves fair presentation in accordance with the financial reporting provisions described in Notes to Accounts to the Project Financial Statements. * communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. * provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. Other Matter The implementing agency Energy Efficiency Services Limited has prepared a separate set of entity financial statements for the year ended March 31, 2019 on which KK Soni & Co. have issued a separate auditor's report to the Shareholders dated 27th May 2019 and expressed a modified audit opinion. Report on Other Legal and Regulatory Requirements Further to our opinion on the Project Financial Statements we further report that: a) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; b) in our opinion, proper books of accounts have been kept by the implementing agency for Project purposes so far as appears from our examination of those books; c) the Project Financial Statements dealt with by this report is in agreement with the books of accounts; d) the Project funds were utilized for the purposes for which they were provided; e) expenditures, including assets created under the Project, shown in the PFS are eligible for financing under the Project Financing Agreements; f) Interim Unaudited Financial Reports (IUFR) submitted by the Project management can be relied upon to support applications for withdrawal of the Loan, and adequate supporting documentation has been maintained to support these claims; g) Procurement has been carried out in line with the agreed procedures as detailed in the Operations Manual/Procurement Manual/Project Implementation Plan/Legal Agreements; and h) the Project has an adequate internal financial control system (including IT controls) and such controls were operating effectively as at March 31, 2019 and the Project complies with the provisions on financial management contained in the Operations Manual/ Project Implementation Plan/ Financial Management Manual, in all material aspects. For VPGS& Co. Chartered Accountants FRN No. 507971C ( Gulsha aba) (Partner) Membership No. 088726 Place: New Delhi Date:24th January, 2020 UDIN: 20088726AAAAAK7521 I1 Energy Efficiency Services i mited JVof PSI s ofMini::x oI Qpeur. (¡xo.:x." Partia Risk Shairing Facility for Fnerg, Ebeikne Protgramnim Grant number TF 0687/T0 019308 NOTES TO TH E FINANCIAIL STÅTE-MENTS FOR TH E PERIOD 3103020151M 3L032019 I. PROJECT NATURE AND ACTIVITIES Li ordr to d, eop a iable FJA) i W S \ y, i !% e ha- n i ergx E eene Ser ie, lmied rhereinafter reerred to as 'S ( V: jpa a K7 c Vji P~- iHancepora:ie. RC", u- (ird to fcilitate imYMplemnental ino. t nnn Cmpan\ (SCO as C,ncane (Agamamen :r C e n P s Resource Cene obr eapaci heuIding ef te de :ope ncnt -A\ tort S \ > e I i repteren nder the compames ;\t .956 e 0 J hlor lnienetieon ofene\ e 'ene S e er ien such instanes i the x enid. I.2 To assist hidia in achicving energy sav ng wih mob zia o* eonomercial fnance and participation ef E-nergy Serv ice Coempanies~ (ESCO)s), with the Snnilsport from CTFI and GEF;, T he World Bank (URD) has se up :Ae Pari.t Risk Sharin Faci iy for Energy IEi ency (PRSF). L3 Project enekiaries he oUjeti eøf :m Par:ia Rik Shai i W r is to ss' fnd:a n acmexi;Ry enerex z,a\m n xx mobn iaen otennr ..:n n pne nate plen of energ serx ce companie. ias preoe eensssotxeemo: :.I ci:. c~;:na s'pperts estabihimne and operating the 1aCHA :o proxide S:b (a= : :s ad developing ene r e ieieny markets iom"i e: end so n Va the parial rVsk ann r eners e i A> sa developen llank of ndia SID1 1 t. dec rem a G e cennbion and backotened b y e I ce n1en!Unanc; Cenmpenent twx o s npneni leeo s sane c at n. e u.:nv'r:onsappert cominsa mngn otner th:ngs :. e 10 ex nex mte:i rxn,~n:~enxe:':n rie.anageem anaareness budding, >n u e and dispute resoirden uid S2MAinc t is n:ebsite and en:ne presence: a man nt n h ems iv. Deveing standard anrd,sa siren:gthening Projecr~nc:rnlr capa1xn iead in a port. x'. rowiin tee.nica assistanee :i'm 'an b'Pr iaiuii ' ' .Mn.inerg Service Ceompanies, and' I ene te inis e a bxexvnmeet,a e o srnethen the nmarke- dnvxen energy etle:enex eces' s'em cendicns neceesr o > aktbrir n devetopment ohject: xes idemt ned :n Seet io i eh i13anI''rxIieetxServices I mined Sm i .) are leadig itno The PRSF is broadly anned at addrbng various market harriers that impede EE pracces Ind financing, and to catal the energy sangs performance contracting modality of transactions for implementing EEs projects through ESCOs in lndia. The pr ojec t w il comnhue to the N \4E EE ointatve ofl GOL The project ull benefit a range of nsttutnms and stakeholder that are at the core of EE markets - namrn NSAl s large indsies. compmr: mnåärs b(iilding onels' and nmumpahs resonsile or pio\viding street ihytån, the bankig seeto responsible for finanEm þ- and the ESCO musu responible kr pernne bE projets. Tis uill be ache-ed b strengthenm the processes inoilned in EE finaneing usnm ene:g aIngs pertåmnCee ronnactng approaches and buildin. the capaeity of EE inarket stakeholder partil al\ the parielpaing entiues, GMs on häapte. PRGFEE. \ d also benefit frm PRSl. li us ili use the leons !eaned lom PRSF ,nd benetit friom the TA components of PRSF mlich ul taget the same set of stakeholders ESC ns. Fio) ec. who may parteipate in PRGFEE. Finally, the demonstraion of PSt '-impiemented prjects with the PRSE Fatihty financial suppon along with the standardiation of transaetion tools and icplates through the TA support will ICIp unlock Itle M inarket for ESCOs by remo\ing the lisk percepun about FF piojeets that the financial insuions nmd other markei stakeholde ha"e toda 1 4 EFSL has been sanetioned a Technical Assistan Grant of USi) 2 million fr A technical assistance and capacity building under India: Parial R sk Sharing Facility for Energy Efficiency Project Grant number TF 0687/TF 019308. 2. STATEMENT OF CONPLIANCF 2.1 The company has foloed the generally accepted accounting principle in India and complied ith the nKindatory accounting standards notified under the relevant provisions of the Companies Act 2013, 2.2 Program funds were utilzed for the purposes for which they were intended. 3. SIGNIFICANT ACCOUNTING POLICIES 3.1 Financial Statements This comprises of the Statement of Program Financial Statements and related notes to the financial statements 3.2 Basis of measurement Financial statements have been prepared under the historical cost convention and in accrual basis of accounting. 3.3 Changes in Accounting policies There swas no significant chanuge in accounting policies. F 3.4 Disburseient IBRD dbused the gran on compeM: of nork and payiment of eligible expenditure by 11·L on reimbursement ami ESL pro" ie the Inte m nauded Fmnaneil Report ( eUR) on quarte:rly as to IlRD and these IL R torm the basis of reporting of elgible ependie and disbursement by IBRD. 4. FN DS RECE VED FROM GOVERNMIIENT As at 31.03.2019, EESL has not recei ed anv funds from Government. 5. DATE OF AUTHORIZATION These financial sttements have been authorized for issue by the Mohit Klhatii S Copal GMd (Finance) Director (Comercial) Chief Fiinance Officer Head, PMU Date: 24"'January, 2020 & Co r A9: k14 slt � ---�--т-- ----�--��--- € -г-�-з w _ ' `� _ � � � �� ` ; i�� � ' � �� - "' 1 _ .... { ��I i К � :� �С j� . 9! : � i � ., � � � Е �'. . � � � � �. � у � _.и_а. . �»,. �. ,. . _ . . 4 .' .� IIIЭ .,. �.,,..... . .. v-* Э � � � � Ё .., _f ^i � 9 � � Г� , . г - ( � � � � е"` �ьf f � � Г � �Г . � { _�j' � � ' - � 1 ��у � w � _ _ �+ �, t�� �_�� i �^i � € gg '"� � ,, � � / .. Е � � � СУ . ,�..� д Cj �р � � � f � .�,_г � � . .. � �: К J � `, 1 a;...j ( � .� { � € \1 i � �f .� � � �i `J I €� �� 3 �х1 �i �'1 '� � С .t с� ' ' � г � �^€( DC i.:+ � � i + � � Э _ _ � � ���� � Г�� J С � ' �� ���� �i �}'�'�!� ��,, -'ц�. .4�о � � � ''� � � Э! }-. �"- j�� �рд' \, . _ }I} , ,.^ Т-� r,,,r - -г. . *1�w L " , _"°'°"1 ' . .-� � � � 11 � с� ' � � гз ' � � ` ,: � �' д�. 1 � � ое � (1 �м ,-- � .Х,. w. t'ц • ,. i �..н ( I � йJ .-. 1._г �; г�3 � # �.t, tt3С' �G � � с � ,-, Э � ^ � ;, i ij � "� �1 \�� � . :.1 � -^ - � -" м ' � г € `� _ � ,, � " ^ � j i j � ''� � �- 'Г �--- � � _ ���..° � � �"_ г ._. �i �.. .. � � � � .� � _� �. �, - �+ '. .-' � ""' сн '"' ZiC Г`1 � '�': � � i.F; � , h- � {`�- � � _ .^ . - . .� J ['! �3 � r� 111� � � � ... .-- I?.S+д �. .. -° � '� � � ( . �. . С1 . :' � G ' '" � ` .. �- . _... ,г � ( О ;ь�.к �� /^ �"д � � . v _ , . � - я"'г. � � .. .... { _... � � . . ц �ь.а дг'.,г У'- ... а � � . *� "' � ^ � ;� ' ', �=, � ... � i L ^ �' и=: '"" Г-- ;1. . � � ! � г ��. -r э.�и�с �.и t л ti' :�� ^� � � € � - - _ _ � � ..--, 1 = � _ е., _, ; с ; , � � �� � ��� � � ц ; ..к � ' � � .. � � ;�: � � . � � �� � г а �,, � Л '"�� " � �} � � ' � .� �� .�.It 1_.. � в.. 7 v Е Э ,-... - .- -- � ;� 3 � п г ' v' - �. � = г - � - с. � .�� �; µ , � � � - � � �,Ё � _ _ � t � � , W �j � - � =о --� . - % j � � � � � - . : _ _ - � t,,, ; ив Г � . 4., = �. � - /� � J �� . '� � � Е -- " i✓ � -^ ' _ з � . i € -- �. ..4... . _. _ .. _... _._.�.� . . � �. . , . ::� -- I �� � ! � Э - � � � 4 �r' ,, г . _ ___� __,_��---- � �__.. . ..