S.R. DINODIA & CO. LLP CHARTERED ACCOUNTANTS K-39 Connaught Place, New Delhi-110001 INDIA Ph.: +91-(0)11-4370 3300 Fax: +91-(0)11-4151 3666 Independent Auditors' Report To The Board of Directors, Dedicated Freight Corridor Corporation of India Limited (DFCCIL) New Delhi We have audited the accompanying Project Financial Statements (hereinafter referred as the "PFS") of Eastern Dedicated Freight Corridor Project I (hereinafter referred to as "EDFC-1" or the "Project") of Dedicated Freight Corridor Corporation of India Limited which comprise the following: a. Statement of Sources and Uses of Funds (IUFR-1) for the year April 1, 2017 to March 31, 2018 (Annexure-1), b. A list of all Individual Withdrawal Applications during FY 2017-18 (Annexure-II), and c. A Statement of Reconciliation of Claims to Total Applications of Funds for the year ended March 31, 2018 (Annexure-Ill). Management's Responsibility for the Project Financial Statements Management is responsible for the preparation of these PFS in accordance with the financial reporting provisions of Section 5.09 of the General Conditions of Loan Agreement dated October 27, 2011 between Ministry of Finance, Government of India and International Bank for Reconstruction and Development (IBRD); this includes the design, implementation and maintenance of internal control relevant to the preparation of the PFS that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these PFS based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India (ICAI). Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the PFS are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the PFS. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the PFS, 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 PFS in order to design audit procedures that are appropriate in the circumstances. 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 PFS. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Basis for Qualified Opinion On reconciliation of expenditure incurred on eligible contracts and the total expenditure claimed in IUFR during FY 2017-18, we noted that expenditure of T 1,61,61,197 eligible for reimbursement have not been claimed in IUFR resulting in understatement of amount o A expenditure incurred and claimed (Refer Para 1(A) of Annexure IV-A enclosed). t. E-mail: srdinodia@srdinodia.com Website : www.srdinodia.com LLPIN : AAB-7484 Pune Branch Office: 11, Siddhatek Apartments, 4th Floor, 95/8,Prabhat Road, Opposite Lane No. 11, Pune 411 004 E-mail: puneoffice@srdinodia.com Ph.: +91-(0)20-2546 9683 Qualified Opinion Except for the effect of the matter stated in Basis for Qualified Opinion Paragraph, in our opinion, the Project Financial Statements of "EDFC-1" of Dedicated Freight Corridor Corporation of India Limited for the year ended March 31, 2018 are prepared, in all material respects in accordance with the financial reporting provisions of Section 5.09 of the General Conditions of the Loan Agreement. Other Matters and restriction on distribution and use 1. The PFS of the Project for the year ended March 31, 2017, were audited by another firm of chartered accountants who vide their report dated December 29, 2017, expressed an unmodified opinion on those PFS. 2. We draw attention to the Management Letter (Annexure IV enclosed), which contains detailed observations noted during the course of the audit. The PFS are prepared to assist DFCCIL to comply with the financial reporting provisions of the Loan Agreement referred to above. As a result, the PFS may not be suitable for another purpose. Our report is intended solely for DFCCIL and IBRD/World Bank and should not be distributed to or used by parties other than DFCCIL, or IBRD/World Bank. Our opinion is not modified on the above matters except as given in basis for Qualified Opinion Paragraph above. We further report that: a. Except for the effect of matter specified in the Basis for Qualified Opinion Paragraph above, in our opinion, the PFS give a true and fair view of the expenditure of the Project and of the sources and application of project funds for the period under audit. b. The project funds were utilized for the purposes for which they were provided. c. Expenditure, including assets created under the Project, shown in the PFS are eligible for financing under the relevant Loan Agreement and these were exclusively financed through the project funds and no other sources of funds have been received by DFCCIL for incurring these expenditures. d. The IUFR submitted during the period under audit are supported by adequate documentation maintained in DFCCIL's offices/branches to support claims to the IBRD for reimbursement of expenditure incurred. e. As per the information and explanation given to us, the clause relating to Procurement by DFCCIL in line with the agreed procedure as detailed in the Project Implementation Manual is not applicable to the Project for the year under audit, as there was no Procurement Contract executed during the year which was not prior reviewed by IBRD. f. The Project has an adequate internal control system and adheres to the provisions of the Project Implementation Manual in all material aspects. For S.R. Dinodia & Co. LLP. Chartered Accountants, Firm's Registration Number 001478N/N500005 (Sandeep Di odia) Partner Membership No. 083689 Place of Signature: New Delhi Date: 2 8 DEC 2018 Annexure I Dedicated Freight Corridor Corporation of India Limited : EDFC-1 Project IBRD Loan No - 8066-IN Sources and Uses of Funds for Financial Year Ending March 31, 2018 (IUFR-1) (Amount in T) 1 2 3 4 A Opening Balance * Project Bank Account Sources of Funds B Amount received from IBRD 15,426,100,997 4.747.215,500 20,173,316,497 C Counterpart funding - Equity 3,957,819,037 2,128,433,160 6,086.252,197 Uses of Funds D CST and System Works - Part I of Project I Civil Works and Track I Bhaupur-Etavah (135 km) LOT-101 5,835,711,340 881,801 997 6,717,513,337 2 Civil Works and Track II Etavah-Tundla (101 km) LOT-102 5,272,234,177 1,493,940,565 6,766,174,742 3 Civil Works and Track IE Tundia-Khuria (107 km) LOT-103 4,943,486,066 1,394,249,352 6,337,735,418 4 System Contract (343 kn) CONTRACT PKG 104 1,508,062,697 2,431,272,992 3.939,335,689 5 Civil Structure and Track Work, Packace CP-302 500503652 144,408,443 644,912.095 E Consultants' services * Part I of Prolect I QualitY and safety monitoring consultant (QSAC) 129,686,083 71,776,146 201,462,229 2 Khuria-Dadri-Ludhiana-Mughalsarai (APL II and III) General (AECOM) 153,827,386 21,067,883 174,895,269 3 Bhaupur - Khurja (APLI) PMC for construction supervision and contract management services 621,124,859 274,430,144 895,555,003 (PMC) 4 PMC for KRJ-BER section project 302 HQ/EN/Procurement/PMCIKRJ-BER Dated: 20.10.2016 54,163,525 54,163,525 5 Social & Environmental Safeguard Monitoring and Review Consultancy (SESMRC) for Khurja- 5,731,204 650,562 6,381,766 Bhaupur Section of EDFC Project (343 Kms APL-1) F Goods, Consultants' Services & Training under Heavy Haul TA (Part 2 of Pro|oct) I Procurement of MIS (HCLT) 111 040 103 28,402,090 139.442.193 2 Institutional Straingthening Module (ISMD) 6,470,829 - 6,470,829 3 Marketing and Commercial Strategy (DMCSD) 28956,269 19,366,419 46344,688 - Technology Research and Evaluation (HHRODI) 45 756 257 11.489.000 57.245,257 5 Consultancy for Non-Discriminatory Access of DFCCIL (CSNDAD) 10.124.018 - 10.124018 6 Consultancy Services for Green House Gas Emission Reduction Analysis for DFC (E &Y) 6.0221000 - 6.022,000 7 Consultancy Services for Design Review Consultancy for Khurja-Bhaupur Section of EDFC 12,016,000 - 12.016,000 8 Consultancy Services for Civil Engineering Proof Consultancy for Khurja-Bhaupur Section of 6,513,000 - 6,513,000 EDFC 9 Consultancy services from Intenational Panel of expert for EDFC 3,694,000 - 3,694,000 10 Legal Consultancy Services for Dedicated Freight Corridor . 11 Consultancy Service for Overall IT Stratergy and Program Management for DFCCIL (Wipro) 10,198,314 - 10,198,314 12 Capacity Building and Training of DFCC Staff 27,180359 4,796,436 31,976,795 13 IHHA-Seminar 11,297.000 - 11,297 000 14 Setting Up of Enterprises Risk Management Frame Work 4,511,921 - 4511,921 15 SRESTHA (OSEB) (institute of Rialway Technology) - 28,417894 28.417.894 16 RPIO (QSEB) (KPMG ADVISORY SERVICES PRIVATE Ltd.) - 15,393,212 15,393,212 17 ISA Sinalling (OSEB) (Italcertifer S.PA.) . H Counterpart To be specified. I Closing Balance * Project Bank Account For S.R. Dinodia & Co. LLP. Chartered Accountants, Firm Registration Number 001478N/N500005 C'. (Sandee Dinodia) c (A V Reddy) Partner Group General Manager (Finance) Membership No.: 083689 Place of Signature: New Delhi G - p General Manager / Finarce! Date: Date: 208 .;n aFu ight C.oridor Corporatk n ofei t 2 DEC 2019 ry Ofemn OHd Mns Ra;lways) Enterprse 'A Gil-i,-,.j,iei of Ilia (Minist ~a e~as rtrre Pragati Maidan Metro Staton. Bldg. 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Ф_ '��� . ,�.� � _; !_. � . . _ . . .. . __ . _ . . о . .... . .�. . гп �. _ .. - _ _ v - , .�, � А � "=' V Сп V V W N-+ р � _� 3 V V W W���� N � � �- +" � c�i� о�о й nWi '+ С tЛ V OD W� V-+ �у � fЛ 1V t0 (Л V О<О О с0 О V СЛ О Ч - О fЛ W СЛ W N N - Annexure III Dedicated Freight Corridor Corporation of India Limited ; EDFC-1 Project IBRD Loan No - 8066-IN Statement of Reconciliaiton of Claims to Total Application of Funds as on 31.03.2018 (Disbursement mechanism: Reimbursement through IUFR) Particulam Amount In (T) Amount claimed from ORD (for Application of Funds) 21,198,786,557 Less: Ineligible Claim 95,636,173 Less: Amount claimed in 4th quarter of FY 2017-18 for ORD loan 912,882,669 Add: Differences on account of FERV in Amount disbursed for ORD Loan (16,951,218) Amount received from IBRD (Matched with lUFR -1) 20,173,316,497 Amount Disbursed by ORD upto 31.03.2018 20,173,316,497 Add : Foreign Exchange Fluctuation on reinstatement of liabilities upto 31.03.2018 228,800,700 as per Books of Accounts 20,402,117,197 For S.R. Dinodia & Co. ILLP. Chartered Accountants, Firm Registration Number 001478N/N500005 DIA4, 1V L A CC (Sandeep Dinodi (A V Reddy) Partner Group General Manager (Finance) Membership No.: 083689 Place of Signature: New Delhi Date: of lroa fd. 2 8 DEC 2018 o!dq. U;mp'ex, Ne v