GUJARAT LIVELIHOOD PROMOTION COMPANY Ltd. (Undertaking Govt. of Gujarat) Block No.1S, 3rd Floor, Udyog Bhavan, Sector-ll, Gandhinagar (Gujarat State) Phone No ;- (079)23248513/14, Fax No ;- (079)23248515 E-mail; finance.glpc@gmaiI.com CINlJ74900GJ20 1OSGC060349 No. GLPCI Acct.! NRLPI UTCI 3 ~0;:; 12018-19 Date: lB/03/20 19 To, Joint Secretary & Mission Director, (NRLP) Ministry of Rural Development, Department of Rural Development, Government of India, 7th floor NDCC-2 Building J aising Road, New Delhi - 110001 Sub:- Submission of audited UTC for the NRLP for the year 2017-18 Sir, With reference to the above sited subject, I herewith submit the statutory audit report for the year 2017-18 under NRLP along with Balance Sheet & other financial statement attached. The first installment was received of Rs.528.11. lakhs in Financial Year 2017-18 out of which Rs.2133.52 lakh is utilized. The total utilization is more than 87 % of the available funds. It is requested to consider it and accept. With regards .. Yours Faithfully, r: ' Joint Mana~ Director Gujarat Livelihood Promotion Co. Ltd. Gandhinagar Encl : ­ (1) UTC for the 2017-18 (2) Statutory Audit Report 2017-18. Form GFR-19A [See Rule 212 (1) Gujarat SRLM NRLP - Utilisation Certificate for 2017-18 based on Audit Reprot SLNo. Letter No. and Date Amount (Iakh) Central Share 1 NO.J-12017 /01/2017-RL(NRLP _13) dated 04/05/2017 528.11 Sub Total 528.11 State Share I 1 _ order no.CRD/Acct./Aajeevika-NRLP/Grant!02 dated 01/07/17 352.07 Sub Total 352.07 Grand Total 880.08 Certified that out of Rs.528.11lakh of grants-in-aidssanctioned during the financial year 2017-18 in favour of the Gujarat Livelihood Promotion Co Ltd, Gujarat under this Ministry/Department letter no. given in the margin and RS.3S2.07 lakh from the Govt. of Gujarat, Rs.1478.74/- unspent balance of [\IRLP fund of the previous year, RsAS.76 lakh received on account Bank Interest of [\IRLP & RsAO.63 lakh received as Miscellaneous receipt during the year, the total availability of fund was Rs.244S.32 lakh. A sum of RS.2133.52 lakh has been utilized for the National Rural Livelihood Project (NRLP) and the Cilosing bal'ance is RS.311.70 lakh as on 31st March, 2018 whi ch will be utilised for the project activities during 2018-19. Further certified that I have satisfied myself that the conditions, on which the gran ts­ in-aid was sanctioned, have been duly fulfilled/are being fulfilled and that I have exercised t he following checks to see that the money was actually util, i,zed for the purpose for which it was sanctioned. Kinds of Checks exercised. 1. Cash book 2. Vouchers 3. Bank Statement For Gujarat Livelihood Promotion Company Limited Gujarat (rl ' nee) Joint Ma~g Director Date: 1.3/03/2017 Place: Ga ndh inagar R. S. PATEL & CO. 801 . Popular House. 1 Near Income Tax Circle. Phone . 26588909. 2658 3536 2658 5550 CHARTERED A C COUNTA NT S Ashram Road. Fax . 079 . 2658 5551 1Ahmedabad · 380 D09. E-ma.I . ketulOrspatelca.com Independent Auditor's Report To, Managing Director Gujarat Livelihood Promotion Company Limited (GLPC) We have audited the accompanying financial statements of the NATIONAL RURAL LIVELIHOOD PROGRAM (NRLP)(hereinafter referred to as Project) as at 31 st March, 2018. Our responsibility is to express an opinion on these financial statements based on our audit. Management's Responsibility for the Financial Statements The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (lithe Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position and financial performance of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act read with Rule 7 of the Companies ( ccounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisiOns of the Act for safeguarding the assets of the Co mp any and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and deSign, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accoun ting and auditing standards and matters which are required to be included in the audit report under th e provi ions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply w ith ethical requirements and plan and perform th audit to obtain reasonable assurance about whether the financial statements are free from material misstatement An audit includes examining, on a sample and test basis, evidence supporting the am ounts and disclosures in the financial ta tements. The procedures selected d epen d on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statement ~ whether due to fraud or error. In m aking those risk assessments, the auditor considers internaP financial rnntrol relevant to the Company' s preparation of the financial statements L."tat giv~ true and R. S. PATEL & CO. 801 . Popular House. I Pf1one ' 26588909.26583536 CHARTERED ACCO U NTAN TS INear Income Tax Circle . Ashram Road . Ahmedabad - 380 009 Fax 2658 5550 . 079 - 2658 555 1 E·mall : kelul@rspalelca.com audi t al so inclu des evaluating the appropriateness of the accounting policies used and the reason ableness of the accounting estimates made by the Company's Directors, as well as evalua ting the o v erall presentation of the financial statements. We b elieve tha t the audit evidence we have obtained is sufficient and appropriate to provide a basis for ourqualified audit opinion on the financial statements. Basis for Qualified Opinion 1) Internal auditors have submitted their report to the management for the complete year with their observations and queries. We had requested for a compliance report to ensure that their queries have been adequately resolved. However, no such compliance report has been furnished to us. Further, up on review of the Terms of Reference (Scope of Work) issued to the internal auditors by the management, we have not been able to find any specific comments in their report on several points. The coverage of all the p oints as per TOR issued to the internal auditors should be ensured by the management of the company in the interna l aud it reports issued by the Internal Auditors. 2) We are unable to comment whether the ratio of the administrative expenses of the Project to Gran t Sanctioned is in line with the norms of the centre or not as no such working has been presented to us by the management of the Company. 3) About the Accounting Policy: a) GLPC being a company registered under the Companies Act, 1956, is required to mainta in its books of accounts under the accrual method of accounting which would require it to make all the yearend prov isions without actual outflow of cash. However, yearend provisions have only been made in very few cases. In absence of proper information, we are unable to quantify the impact of this observa tion. b) It is observed that no accrued interest income is booked, as they f llow cash basis of accounting as explained by the management of the Company.In absence of proper information, we are unable to q uan tify the impact of this observation. c) No separate bank accounts maintained by the company for NRLM and NRLP sdlem e at 1 -1.0. and District level. Moreover, at District level, no separate bank accounts have been maintained for R-Seti Scheme. Fu rther, Bank Interest income of NRLP - SMMU and DMMU is shown under NRLM - SM MU and DMMU.ln absence of proper information, we are unable to quantify the impact of this observation. 4) Internal Control Related Points: a) SRLM does not have a proper Management Information System (MI ) as a tool of control. b) The approved Finance Manual for the project needs to be implemen ted p rop rly . ) Physical verifica tion of assets at SMMU / DMMU / BMM U level h as n ot been carried out. Assets are only verified at the time they are receiv d at the respective offices. d) Fixed assets register is nohnaintained and updated p rop erly . e) Ab o ut Utilization Certificate: One of the condi tions as per the Grant orders is to obtain Utilization Certificate (UTC) as a p roof of expenditure incurred by the istrict and their Blocks . However, in some cases it has been found that no such certificates have been received by the SMMD. It may be noted that in several cases where the grants are sanctioned to external agencies, it becomes all the more importan obtain these UTC's. .... ~ .:r., f:J ~ R. S. PATEL & CO. 80 1, Popula r House . Near Incon1r. Tax Circle. Phone 2658 8909. 2656 3536 26585550 Ashram Road, Fax • 079 · 2658555 1 C HA RTER E D AC C O UN TANTS Ahmedabad · 380 009. E'maJi • kelul€# rspalelcd com Pending Reconciliation of Utilization Certificate (UTC) received Fur ther, amou nt of utilization as reflected in utilization certificates and as per the books of accounts of respective districts are unreconciled and pending for reconciliation. Impact of the abovementioned qualifi ations on financial statements cannot be ascertained due to insufficient information from the management. 5) During F.Y, 2015-16, SMMU has transferred funds for IPPE-II Scheme in to the MM bank accountamounting to Rs. 60,80,000/ -. The same needs to be transferred to respective scheme's bank account. 6)Total amount of Rs.9,84,413/- has been received in bank account of the company, for which the n me of the party who has deposited the money in the bank account of the company has not been identified . Hence, the same is shown under "Suspense Account" under the head "Current Liability" in the books of ac a unts of the Co mpany. 7) Employee Provident Fund: Provident Fund has not been deducted from those employees' salary who are on the temporary rolls of GLPC This is despite continuing in the office for more than the prescribed period as per Section 2(E) read with section 8 and section 8-A of the Employees Provident Fund Act, 1952. 8)Accounting of Inter-scheme transactions is incomplete and records are not maintained properly. Diiferences between Inter-scheme transfer balancesas of 31.03.2018 are unreconciled and pend ing for reconciliation. This may also have impacton scheme-wise bank balances as of 31 st March, 2018. Consolidated amounts of head-wise expenditure accountsfor the year 2017-18 are also unreconciled and pending for reconciliation with accounts maintained at Districts and HO Level. 9) It has been observed that in several cases, prior period expenses / in~omes have been boo ked in current year but the same are not recorded as prior period expenses / incomes in the books of accounts of the Company. 10) Compliance of Tax Deduction at Source (TDS) should be strengthened throughout a U the Districts and Blocks. We came across many instances where TDS has not been made by the Districts/Blocks. 11) Moreover, in cases where the Tax has been deducted at Source (IDS), the sa m has been declared in TDS returns filed under the Tax Deduction Account Number (TAN) of District Rural Development Agency (DRDA). GLPC being a separate entity needs to file such return on its own TAN Number. However, we have been informed by furnishing a copy of Letter from the office of The Income Tax Officer (fDS), Gand hinagar dated 06.03.2013 which has permitted the disbursing offic t DRDA to file the TDS returns with their TAN Numbers in respect of TDS made by GLPC on salary payments. It is recom mended to obtain a letter from the office of The Income Tax Officer (TDS), Gandhinagar permitting the disbursing officer at DRDA to file the TDS returns with their TAN Numbers for all kind of IDS made by GLPc. 12) No Service Tax under the Reverse Charge Mechanism (RCM) as per Section 68(2) of the Finance Act, 1994 read with No~ca tion N o. 30/2012 issued under the Finance A t, 1994 has been paid by Districts/ Blocks offices. 13) In some of the Districts and Blocks, it is observed that professional tax on sala ry has been deducted at old slab rate. Moreover, in some cases, the challans of professional tax have not been produced for audit. 14) Bank Reconciliation Statement (BRS) as on 31 .03.2018, FFD Statement an d certified las , t aID" I of Cashbook / Passbook have no t been provided byAmre/i andTapi Dis tricts. ~f h ~ R. S. PATEL & CO. 60 1. Popular House. Near Income Tax Circle, Ashram Road. Phone . 26586909.26563536 26585550 Fax . 079 - 2658 555 1 CHARTERED ACCOUNTANTS Ahmedabad - 380 009 E-mail: ketul@rspalelca.com 15) In most of the cases, the expense bills which are a supporting document are available in the name of DRDA in Districts and TOO in Block level instead of GLPC, which may lead to duplication of booking at both GLPC and DRDA level. 16) Common Cost incurred for all the programmes i.e. Mission Mangalam, NRLM, NRLP an d O ther Schemes have been allocated on an adhoc bases instead of following any specific policy based on equitable p roportion. In normal circumstances, such discretionary powers should be restricted by keeping proper policy in place. 17) Outstanding balances as on 31.03.2018 in respect of Creditors, Debtors, Loans and Advances, Deposits, etc. are subject to confirmation by the parties. 18) Improper financial Management resulting in several Inter Scheme Transfers: We have observed some instances where it is seen that expenses have been incurred for one scheme however payments have been made from another scheme. This has resulted in some inter-scheme transfers which denote lack of program knowledge of the accounting staff at Block level as well as improper financial management. It is advised to check the fund position in the respective grant bank account before sanction of any grant utilization. This can thus facilitate the way of doing grant order wise accounting which is p resently not being done as per the requirements of the Grant Order. In absence of sufficient financial information from the management, we are unable to ascertain the im pact on financial statement of abovementioned Para 7to 18. Qualified Opinion In our opinion and to the best of our information and according to the explanations given to us,except for the effects of the matter described in paragraphs 1 to 18 in the Basis of Qualified Opinion paragraph above, the aforesaid financial statements give a true and fair view of th Sources of Funds and Application of Funds and the financial position of Project for the year ended March 31,2018, in accordance with the accounting principles generally accepted in India. For, R.S. Patel & Co., Chartered Accountants Firm Registration No. 107758W ~ Partner Membership. No. 101 Place: Ahmedabad Date: 13.03.2019 R. S. PATEL & CO. 601 . Popular House. I Phone : 26566909. 2658 3536 C HARTERED A C COUNTANTS I Near IrlCome Tax Corcle. Ashram Road . Ah medabad - 360 009 . Fax 2658 5550 : 079 - 2658 555 1 E-mail: kelul@rspatelca.com List of Abbreviations used in the Report: S.N. Abbreviation Used Full Form Of Abbreviation 1 BMMU Block Mission Management Unit 2 CA Chartered Accountant 3 Centre Ministr~ Of Rural Develo~ment, Central Government 4 CIF Community Investment Fund 5 DDUGKY DeenDayal Upadhyaya Grameen Kaushalya Yojana 6 DMMU District Mission Management Unit 7 DRDA District Rural Development Authority 8 FMTS Financial Management and Technical Support Agency 9 GLPC Gujarat Livelihood Promotion Co. Ltd. 10 GOI Government Of India 11 GOG Government Of Gujarat 12 Int. Subvention Interest Subvention 13 IPPE-II Intensive Participatory Plarming Exercise-II 14 IUFR Interim Unaudited Financial Report 15 MIS Management Information System 16 MKSP MahilaKisanSashaktikaranPariyojana 17 MM Mission Mangalam 18 MOM Minutes of Meeting 19 MORD Ministry Of Rural Development, Central Government 20 MOU Memorandum Of Understanding 21 NRLM National Rural Livelihood Mission 22 NRLP National Rural Livelihood Project 23 PAC Project A ppraisal Committee 24 PAl Project Implementation Agencies 25 RKVY Rashtriya Krishi Vikas Yojana 26 R-seti Rural Self Employment Training Institu tes 27 SGSY Swarnajayanty Gram Swarojgar Yojana 28 SHG Self Help Group 29 SMIB Social Mobilization and Institutional Buildin K .­ 30 SMMU State Mission Management Unit 31 STP Skill Training Program 32 SVEP Start-up Village Entrepreneurship Programme 33 TAN Tax Deduction Account Number 34 TDO Taluka Development Officer 35 TDS Tax Deducted At Source 36 TOR Terms Of Reference 37 TSA Technical Support Agency 38 UTC Utilisation Certificate 39 VO Village Organisations Further it may be noted that the words - SRLM, GLPC and ompany have been used interchangeably. Gujarat Livelihood Promotion Company Limited Income and Expenditure Statement for the Period From 01.04.2017 to 31.03.2018 Scheme : NRLP NRLP Income NRlP Main IPPE-II Fund Transfe r from Grant fund alc 18,99,00,591 - Total 18,99,00,591 - NRlP Expenditure NRlP Main IPPE-II B1.1.1 Staff [Includes Travel and Related 2,23,10,828 - Costs] B1.1.4 Other Operating Costs 3,42,22,962 - B1.2.1 Staff Trainings, Consultations, Workshops, Etc. B2.1.2 Staff Costs Including Travel and Related Cost NI B2.1.3 Other Operating Costs Block NI B2.1.4 Staff I Resource Person Training NI 12,24,071 - B2.3.1 Electronic, Mobile Bookkeeping 99,074 - I B2.3 .2 Bank Mitra, Bima Mitra, Etc. NI - B3.1.1 Revolving Fund Grants to SHGs NI 13,10,64,933 - B3.1.2 CIS to CLFs NI Other Expenditure 9,78,723 - Total 18,99,00,591 - Subject to our audit report of even date. For, R. S. Patel & Co. For, Gujarat Livelihood Promotion Company limited Chartered Accountants Firm Registration No. 107758W ;p.JQ~ ----#::. c7\7u Shri Rakesh Armn Shri J. G. Hlngarajlya GM (A/C. & Fin.) M .D Place: Ahm edabad Date: I!>I(}>/~/l .. GuJarat Livelihood Promotion Company Limited Receipt and Payment Statement for the Period From 01.04.2017 to 31.03.2018 Scheme: NRLP NRLP Recei pts NRLP Main IPPE-II Opening Ba(lk Balance - H.O. & District & Taluka 14,78,74,171 Remittance in Transit -H.O. Grant Received -GOI 5,28,11,000 -GOG 3,52,07,000 Interest 45,76,575 Received from other scheme 40,63,259 Total of Receipt 24,45,32,005 ­ NRLP Payments NRLP Main IPPE-II Expenditure incurred 18,99,00,591 ­ Loan given to other scheme - - Advance to Others 2,34,51,891 ­ Remittance in Transit -DMMU Closiog Bank Balance - District & Taluka 4,69,15,591 -H.O. (1,57,36,068) - FFD - - Total of Payments 24,45,32,005 ­ Subject to our audit report of even date. For, R. S. Patel & Co. Shri J. G. Hlngarajlya M .D M em bership No.1 _ .~ Place; Ahmedabad Date: JjloJ/.l-D/ ~~~ Gujarat Livelihood Promotion Company Limited Balance Sheet as on 31.03.2018 Scheme: NRLP (Amount in RS.) NRLP NRLP CaQital Fund NRLP Main IPPE-II Fixed Assets: NRLP IPPE-II Opening baal nce 14,78,74,171 60,80,000 Opening 26,79,643 Add : Central Grant received 5,28,11.000 Add: purchases during the current year St ate Grant Received 3,52,07,000 Total 26,79,643 Bank intrest & Misc Income Received 45,76,575 Total 24,04,68,746 60,80,000 Bank balance 3,11,79,523 - Less: Transfer to Income & Exp alc to the 18,99,00,591 - extent expenditure incurred Balance 5,05,68,155 60,80,000 Less: Transfer to Asset reserve Advances Closing Capital 'F undI Grant fund 5,05,68,155 60,80,000 Receivable by IPPE-II & 60,80,000 NRLP Liabilities Other liability (Stale chaque & Suspense 9,84,413 a/ c. ) Other liability 57,58,489 67,42,902 - Inter Scheme Transfer 2,34,51,891 Grand Total 5,73,11,057 60,80,000 Grand Total 5,73,11,057 60,80,000 Subject to our audit report of even date. For, R. S. Patel & Co. For, Gujarat Livelihood Promot ion Company Limit ed Chartered Accountants Firm Registration No. 107758W - ~ Ii -- 0'\7)) Rajan B Shah Partner Membership No. 101998 8 AHMED ~~:f. .~ ~ ~~_A~ - ABAD '0 - til;;;: Shri Rakesh m in GM ( Ale & Fin) Shri J. G. Hingarajiya M .D Place: Ahm~a b~ Date: J.3 ()!J ,tCI '1 c"'o ~ ~~