TAMIL NADU URBAN DEVELOPMENT FUND TNUDF/TNSUDP/Audit Reports/2016-17/01 14 December 2017 Mr. Raghu Kesavan, Task Team Leader, The World Bank, New Delhi Office, 70. Lodi Estate, New Delhi - 110 003 Sir, Sub: Tamil Nadu Sustainable Urban Development Project - Audit reports for the FY 2016-17 - forwarded - reg Ref: Loan / Credit Agreement 8488-IN The total outlay of the project is US $ 600 m. of which World Bank line of credit is US $ 400 m. The funds handled by TNUIFSL will be US$ 323 million as detailed below: Sno Entity Category Component US$ in (Rs. in million Crores) 1 Loan to sub-projects 3 B1 146.00 932.21 from Tamil Nadu Urban Development Fund 2 Capital Grant to sub- 146.00 932.21 projects from Project Sustainability Grant Fund 3 Credit Enhancement 2 B2 18.00 114.93 facility from Project Sustainability Grant Fund 4 Consultancy Grant 3 B3 13.00 83.00 Fund from Project Development Grant Fund Total 323.00 2062.35 TAMIL NADU URBAN DEVELOPMENT FUND -2- 2. As prescribed in the Project Appraisal Document (Para no. 20 of Annex3), the following Audit reports for the FY 2016-17 are enclosed: a) Audited Accounts of Tarnil Nadu Urban Development Fund (TNUDF), Project Sustainability Grant Fund (PSGF) and Project Development Grant Fund (PDGF) audited by a Firm of Chartered Accountants are enclosed as Annexure- 1 b) Project Audit Report for TNSUDP covering TNUDF, PSGF and PDGF audited by a Firm of Chartered Accountants are enclosed as Annexure-2. c) Sub-Project Audit Reports of 5 sub-projects audited by Local Fund Audit Department are enclosed as Annexure - 3. d) Sub-Project Audit Reports of 4 sub-projects (3 sub-projects implemented by CMWSSB and 1 sub-project implemented by TWAD Board) audited by a Firm of Chartered Accountants are enclosed as Annexure - 4. 3. Also, find enclosed a summary sheet indicating the following: i) funds transferred from TNUDF / PSGF to ULBs, funds transferred from ULB to Implementing agency for sub-projects implemented through implementing agency (CMWSSB /TWAD), actual expenditure incurred for the sub-project and balance funds available as on 31.3.2017 as Annexure- 5. ii) funds transferred from TNUDF / PSGF to ULBs, actual expenditure incurred for the sub-project and balance funds available as on 31.3.2017 for projects implemented by ULBs as Annexure- 6. iii) a statement reconciling the total expenditure and eligible expenditure for the period up to 31.03.2017 and expenditure prior to 01.05.2014 is enclosed as Annexure-7 Yours faithfully, Senior Vic Pisident & Company Secretary (TNUIFSL) Encl: As above Copy to 1) The Deputy Secretary to Government, Finance (EAP) Department, Secretariat Chennai- 600 009. 2) The Principal Secretary to Government Municipal Administration & Water Supply Department Secretariat, Chennai- 600 009. Annexure- 1 World Bank assisted Tamil Nadu Sustainable Urban Development Project (TNSUDP) List of Audited Accounts for the Financial Year 2016-17 SI.No. Name of the Entity 1 Tanil Nadu Urban Development Fund (TNUDF) 2 Project Sustainability Grant Fund (PSGF) 3 Project Development Grant Fund (PDGF) AUDITORS' REPORT TO THE TRUST'EEIS OF TAMILNADU URBAN DEVELOPMENT FUND 1) We have audited the accompanying financial statements ofT-AMILNADU URBAN DEVELOPMENT FUND (the TRUST), which comprise the Balance Sheet as at 31" March 2017, the Income & Expenditure Account and Cash Flow Statement for the year ended on that date and a summary oF significant accounting policies and notes on accounts. 2) Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Trust in accordance with the Accounting Standards that are generally accepted in India. 'his responsibility includes the design, implementation and maintenance of internal control 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. 3) Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing that are generally accepted in India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. 4) An audit involves performing procedures to obtain audit evidence 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 Trust's preparation and fair presentation of the financial statements 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 the accounting estimates made by management, as well as evduating the overall presentation of the financial statements. -2- 5) We believe that the audit evidence we have obtained is sufficien1 and appropriate to provide a basis for our audit opinion. In our opiilon and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Indian Trust Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: a) in the case of the Balance Sheet, of the state of affairs of the Trust as at 3 J1 March 2017; b) in the case of the Income and Expenditure Account, of the surplus of the Trust for the year ended on that date; and c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. 6) Further to our comments, we report that a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; b) in our opinion proper books of account as required by law have been kept by the Trust so far as appears from our examination of those books; c) the Balance Sheet, Statement of Income and Expenditure Account together with notes thereon and Cash Flow Statement dealt with by this Report are in agreement with the books of account; d) in our opinion, the Balance Sheet, Statement of Income and Expenditure and Cash Flow Statement comply with the Accounting Standards generally accepted in India; and e) on the basis of information received from the Trustee Company as on 3 1" March 2017, and taken on record by the Trustees, none of the Trustees is disqualified as on 31" March 2017., from being appointed as a Trustee in terms of applicable provisions of Indian Trust Act. P.M.M. ASSOCIATES Chartered Accountants Firm Registrati'n No: (2494S N. Ramara) Partner Menb ership No:22683 Place: Chennai Date: 27.06.2017 AI TAMIL NADI! URBAN D1EVELOPMENT FN BALANCE SHEET AS AT 31st MARCH 2017 As at As at Note No. 31/03/2017 31/03/2016 SOURCES OF FUNDS I Capital Fund a. Contribution by Settlor 1 5,000 5,000 b. Reserves & Surplus 2 45,48,72,333 30,14,12,935 2 Other Funds a. Units 3 199,59,69,211 199,59,69,211 b. Loans Borrowed 4 1935,65,83,575 1718,65,34,702 3 Current Liabilities 5 97,07,79,466 97,63,12,204 TOTAL 2277,82,09,585 2046,02,34,052 APPLICATION OF FUNDS 4 Investments 6 0 13,87,488 5 Loans Disbursed 7 1956,80,22,558 1657,17,04,021 6 Current Assets 8 321,01,87,027 388,71,42,543 7 Notes including Significant 11 to 13 Accounting Policies TOTAL 2277,82,09,585 2046,02,34,052 The Notes referred to above form an integral part of the Financial Statements For P. M. M. Associates Chartered Accountants F{m Regii m ioa No. 002494S N. Ramaraj Kakarla Usha, IAS Harmander Singh, IAS Partner Director Chairman Membership No. 22683 Tamil Nadu Urban Infrastructure Trustee Company Limited (Trustees) Place: Chennai - Date: 27.06.2017' TAMIL NADU IURBAN DEVELOPMENT FUND INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31pt MARCH 2017 Note No. For the Year For the Year 2016-17 2015-16 INCOME 1 Interest on Loans Disbursed 158,74,32,116 138,23,48,249 2 Interest on Deposits & 8,45,67,974 10,91,20,107 Savings Bank Accounts 3 Income from Investments 0 2,50,037 4 Other Income 57,86,744 0 TOTAL 167,77,86,834 149,17,18,393 EXPENDITURE 5 Financial Cost 9 147,53,44,125 131,81,99,162 6 Management Fee & other 10 8,67,85,729 8,08,85,057 Operating Expenses 7 Provision in respect of 1,20,33,408 45,91,595 Loans Disbursed TOTAL 157,41,63,262 140,36,75,814 8 Net income before Tax 10,36,23,572 8,80,42,579 9 Less: Provision for Income Tax a) Current Year 4,10,98,710 3,14,86,360 b) Prior Year (9,09,34,536) 0 10 Net Income / Surplus after 15,34,59,398 5,65,56,219 tax transferred to Capital Fund 11 Notes including Significant 11 to 13 Accounting Policies The Notes referred to above forn an integral part of the Financial Statements For P. M. M. Associates Chartered Accountants , -ill Regis ation No. 002494S N. Ramaraj Kakarla Usha, IAS Harmjander Singh, 1AS Partner Director Chairman Membership No. 22683 Tamil Nadu Urban Infrastructure Trustee Company Limited (Trustees) Place: Chennai Date: 27.06.2017 TAMIL NADU URBAN DEVELOPMENT FUND CASH FLOW STATEMENT FOR THE YEAR ENDED 31V MARCH 2017 For the Year For the Year Ended Ended 31/03/2017 31/03/2016 A. Cash flow From Operating Activities Surplus before Tax 10,36,23,572 8,80,42,579 Operating Sutplus before Working Capital Changes 10,36,23,572 8,80,42,579 Adjustments for changes in Current Assets (45,40,79,060) (42,30,14,519) Current Liabilities 4,43,03,088 (22,64,66,205) Cash Generatedftom Operations (30,61,52,400) (56,14,38,145) Less: Tax Paid / Tax Deducted at source (9,11,91,461) (5,28,97,911) Net Cash from / (Used in) Operating Activities (39,73,43,861) (61.43.36,056) B. Cash Flow from Investing Activities Loans Disbursed (Net) (299,63,18,537) (114,33,07,118) Investment (Net) 13,87,488 22,39,349 Net Cash used in Investing Activities (299,49,31,049) (114,07,67,769) C. Cash Flow from Financing Activities Unit 0 0 Borrowings (Net) 217,00,48,873 _344,74,45,647 Net Cash from Financing Activities 217,00,48,873 344,74,45,647 Net (Decrease ) / Increase in Cash & Cash (122,22,26,037) 169,23,41,822 Equivalents (A + B + C) Cash and Cash equivalents at the beginning of the 241,25,90,226 72,02,48,404 Accounting Period Cash and Cash equivalent at the end of the 119,03,64,189 241,25,90,226 Accounting Period In terms of our report of even date attached For P. M. M. Associates Chartered Accountants Firm Registration No. 002494S N. Ramaraj Kakarla Usha, IAS Harmander Singh, IAS Partner Director Chairman Membership No. 22689 . Tamil Nadu Urban Infrastructure Trustee Company Limited (Trustees) Place: Chennai Date: 27.06.2017 TAMIL NADI) URBAN DEVELOPMENT FUND NOTES FORMING PART OF THE FINANCIAL STATMENTS FORI'HE YEAR ENDED 3 1" MARCII 2017 As at As at 31/03/2017 31/03/2016 (Z) Note- 1 Contribution by Settlor Initial Settlement Amount 5,000 5,000 Total 5,000 5,000 Note- 2 Reserves & Surplus I Capital Reserve 2,66,40,789 2,66,40,789 2 Income and Expenditure Account Opening balance 27,47,72,146 21,82,15,927 Add : Transfer during the year 15,34,59,398 5,65-56,219 42,82,31,544 27,47,72,146 Total 45,48,72,333 30,14,12,935 Note- 3 Units (19959. 69211 units,@ Z 1,00,000 per unit) I Contribution from Government of Tamil Nadu 142,91,24,994 142,91,24,994 2 Contribution from Institutions ICICI Bank Ltd. 23,32,36,491 HDFC Ltd. 16,71,61,299 IL & FS Financial Services Ltd. 16,64,46,427 56,68,44,217 56,68,44,217 Total 199,59,69,211 199,59,69,211 Note- 4 Loans Borrowed I Loans under IBRD line of credit 928,33,56,188 805,57,08,746 2 Loans under JICA line of credit 260,27,00,000 262,42,00,000 3 Loans under KfW line of credit 747,05,27,387 650,66,25,956 Total 1935,65,83,575 1718,65,34,702 TAMIL NADI URBAN DEVELOPMENT FUND NOTES FORTMING PART OF TIE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31" MARCH 2017 As at As at Details 31/03/2017 31/03/2016 __ ______R) Note- 5 Current Liabilities 1 Current Liabilities a. Expenses payable 2,27,700 2,26,709 b. Amount received in advance from borrowers 35,30,45,892 28,24,30,605 c. Other liabilities to Government of'[amil Nadu 0 8,71,838 d. Interest accrued but not due on borrowings 38,18,39,725 40,72,81,077 2 Provisions for income tax 23,56,66,149 28,55,01,975 Total 97,07,79,466 97,63,12,204 Note- 6 Investments Long Term 1 12.25% - Non Convertible Redeemable Bonds of 0 13,87,488 Z I lakh each issued by Corporation of Madurai Total 0 13,87,488 Note- 7 Loans Disbursed I Loans to Urban Infrastructure Projects 1964,66,08,994 1663,82,57,049 Less: Provisions 7,85,86,436 6,65t53.028 Total 1956,80,22,558 1657,17,04,021 TAMIL NADU 1JRBAN DEVELOPMENT FUND NOTES FORMING PART OF TIlE FINANCIAL STATEMENTS FOR THE YEAR ENIDED 31" MARCH 2017 1 As at As at 31/03/2017 31/03/2016 Note- 8 Current Assets 1 Cash and Cash Equivalents a. In Savings Bank Accounts 1,74,64,189 6,90,226 b. In Public Deposit Account 117,29,00,000 213,94,00,000 c. In Deposit Accounts 0 27,25,00,000 2 Current Investments a. Term Deposits with Companies 102,34,87,901 56,00,31,463 3 Other Current Assets a. Interest accrued on deposits and investments 3,24,73,244 2,05,61,146 b. Interest accrued on Public Deposit Account 0 9,11,09,918 c. Interest accrued on loans disbursed 45,31,16,568 38,32,96,126 d. Income Tax Paid under protest (Net) 3,35,42,608 3,35,42,608 e. Income tax paid in Advance / Tax Deducted at 47,72,02,517 38,60,11,056 Source Total 321,01,87,027 388,71,42,543 Details --For the Year For the Year 2016-17 2015-16 Note- 9 Financial Cost 1 Interest on Units 16,56,65,445 16,46,67,460 2 Interest on loans borrowed 130,96,78,680 115,35,31,702 Total 147.,53,44,125 131,81.99,162 Note- 10 Management Fee & Other Operating Expenses 1 Management Fees 5,99,71,754 5,81,29,136 2 Front End Fees on loans borrowed 2,50,00,000 2,18,82,000 3 Auditors' Remuneration - Audit 1,56,000 1,54,575 -Tax Audit 17,250 17,175 4 Other Expenses 16.40.725 7,02,171 Total 8,67,85,729 8,08,85,057 CHA_ TAMIL NADU URBAN DEVELOPMENT FUND Notes forming part of the Financial Statements for the year ended 31.03.2017 Note - 11 - Significant Accounting Policies a. Basis ofAccounting The financial statements have been prepared under the historical cost convention on an accrual basis and in accordance with applicable Accounting Standards issued by the Institute of Chartered Accountants of India. b. Fixed Assets Fixed assets are stated at actual cost less accumulated depreciation. Cost comprises of the purchase price and any attributable cost of bringing the assets to working condition for its intended use. c. Depreciation Depreciation on Fixed Assets is provided pro-rata on the basis of the Written Down Value method using the rates prescribed under the Income Tax Act, 1961. d. Investients Current Investments are valued at lower of cost or market value. Long term investments are usually carried at cost. e. Income Recognition Interest on loans disbursed and investment income are recognized as per contract on accrual basis. f Eniploypee Retirement Benefits At present there are no employees in the Trust. The Trust is managed by the Fund Manager. Hence, the Trust does not have any policy in this regard. g. Borrowing Costs Borrowing costs are capitalized as part of the cost of the qualifying asset when it is probable that they will result in future economic benefit to the Trust and the cost can be measured. Other borrowing costs are recognized as an expense in the year in which they are incurred. h. Impairnent of'Assets Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of assets is measured in line with the relevant Accounting Standard. :, I TAMIlL NADU RAN )EVELOPMENT FUND Notes forming part of the Financial Statements for the year ended 31.03.2017 i. Tttxes on Income Current Tax is determined based on the amount of tax payable in respect of taxable income for the year. Deferred Tax is recognized on timing differences, being the difference between taxable income and the accounting income that originate in one year and reversed in another accounting year. Deferred Tax assets and liabilities are computed on the timing differences applying the tax rate and tax laws that have been enacted or subsequently enacted by the balance sheet date. Deferred tax Assets arising on account of unabsorbed depreciation or carry forward of business loss are recognized only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized. j. Provision, Contingent Liability & Contingent Assets Provisions are recognized when there is a present obligation as a result of a past event and it is probable that outflows will be required to settle the obligation, which can be reliably estimated. Contingent liabilities are disclosed after an evaluation of the fact and legal aspects of the matter involved. Contingent assets are neither recognized nor disclosed. Note - 12 - Notes on Accounts a. Capital Fund L Capital Reserve Tamil Nadu Urban Development Fund (TNUDF) was eslablished as a Trust under the Indian Trusts Act, 1882, by a Deed of Trust dated 29 November 1996. Accordingly, the first Income and Expenditure Account was prepared for the period 29 November 1996 to 31 March 1997. However as per the orders of Government vide G.O. No. 400 Housing and Urban Development UD 1Il (2) Department dated 13.09.1996, the assets and liabilities as at 30 September 1996 of the Tramil Nadu Municipal Urban Development Fund have been transferred to the Trost. Accordingly, the net income of the TNUDF for the period 1 October 1996 to 28 November 1996 has been accounted under the head Capital Reserve. ii. Net Income The entire net income was distributed to the contributors of the Trust, up to FY 2008-09. From the FY 2009-10 interest has been paid to the contributors and the balance net income has been retained by the Trust after providing for Income Tax. Such Net Income has been transferred to Reserves and Surplus under the head Capital Fund. l. Loans Borrowed All the loans borrowed by the Trust are unsecured in nature. Ik XC, TAMIL NAD) URBAN DEVELOPMENT FUND Notes forming part of the Financial Statements for the year ended 31.03.2017 e. Loans Disbursed and Provisioning Norms thereof The loans disbursed by the Trost are unsecured in nature. The dues (payment of interest and repayment of principal) are collected in accordance with the agreement entered into with the borrowers and the orders of the Government of Tarmil Nadu in force from time to time. Provision for all Standard Loans, Non-Performing Loans and Interest and Penal Interest outstanding with respect to Non-Performing Loans as at the end of the year is based on the RBI guidelines prescribed for Income Recognition, Asset Classification and Provisioning norms as applicable to All-India Financial Institutions in India as at the end of each financial period. d. Capital commitments, contingent liabilities and others: i) Term loans pending disbursement against sanction for which funds have been received from the Government is Z 18.08 crores (as on 31" March 2016 is Z 129.41 crores). ii) The Trust has been assessed to income tax, disregarding the stand of the Trust, for the Assessment Years 1997-98 to 2009-10 and demands have been raised by the Income Tax authorities. The Trust has gone on appeal before the appellate authorities against the orders passed by the Assessing Officer (AO) for all the above years. The Income Tax Appellate Tribunal (ITAT) has passed orders for AY 1997-98 to AY 2007-08 stating that the appeals are allowed for statistical purposes as the case have been remanded back to the Assessing Officer for fresh consideration. The AO has passed order / proceeding stating that the claim regarding exemption of income is not in order and requires to be rejected. In view of the above, Writ Petition before the Hon'ble High Court Judicature at Madras have been filed for the AY 1997-98 to AY 2005-06 and the Form No. 8 has been filed for the AY 2006-07 and 2007-08 with Commissioner of Income Tax (Appeals) as the matter is identical to the issues relating to AY 1997-98 to AY 2005-06. The appeals filed with ITAT has been allowed in favour of TNUDF for the Assessment Years 2008-09 and 2009-10. A sum of Z 88,42,86,608/- has been paid towards income tax under protest for the above said Assessment Years and a sum of Z 85,07,44,000/- has been provided for contingencies as of 31 March 2009. The net amount of Rs.3,35,42,608/- is shown under Current Assets. iii) For the Assessment Years 2010-11 to 2014-15 the Trust has gone on appeals for the disallowances made by the AO. The contingent liability for the said AYs is Z 30,68,64,164/- (tax demanded is Z 43.08,85,826/- and the provision for tax made is Z 12,40,21,662/-). TAMIL NADU URBAN DEVELOPMENT FUND Notes forming part of the Financial Statements for the year ended 31.03.2017 e. Expenditure and earnings in Foreign Currency: The Trust has no earnings and expenditure in Foreign Exchange (previous year Nil) Note - 13 - Previous year's figures have been regrouped wherever necessary, For P. M. M. Associates Chartered Accountants i Registration No. 002494S N. Ramaraj Kakarla Usha, IAS Harmander Singh, IAS Partner Director Chairman Membership No. 22683 Tamil Nadu Urban Infrastructure Trustee Company Limited (Trustees) Place: Chennai Date: 27.06.2017 I' ii t I I Ii I AUDITOR'S REPORT To: The Board of Directors Tamil Nadu Urban Infrastructure Financial Services Limited (Fund Manager of Project Sustainability Grant Fund) We have audited the accompanying Financial Statements of PROJECT SUSTAINABILITY GRANT FUND of Government of Tamil Nadu as on 31st March, 2017, which comprise the Balance Sheet as on that date, the Receipts and Payments Account for the year ended on that date, the Income and Expenditure Account for the year ended on that date and a summary of significant accounting policies and other explanatory information. The Government of Tamil Nadu has created Project Sustalnability Grant Fund and prescribed the guidelines for its operation and management vide G.O.(Ms)No.94, Municipal Administration and Water Supply (MA-2) Department, dated 01.07.2015. Project Sustainability Grant Fund is a Government Fund and is being operated and managed by the Fund Manager, Tamil Nadu Urban Infrastructure Financial Services Limited (TNUIFSL), based on the guidelines prescribed by the Government of Tamil Nadu. The Management (Fund Manager) is responsible for the preparation of these Financial Statements that give a true and fair view of the financial position and financial performance. This responsibility includes the design, implementation and maintenance of internal control 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. The Management (Fund Manager) for the preparation of these financial statements in accordance with the principles prescribed in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of the financial statements that are free from material misstatement, whether due to fraud or error. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about 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 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 Management's preparation and fair presentation of the financial statements in order to design the audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. In our opinion and to the best of our information and according to the explanations given to us, the financial statements (read together with notes of accounts and note to the management), of PROJECT SUSTAINABILITY GRANT FUND for the year ended March 31, 2017 are prepared, in all material respects, in accordance with the generally accepted accounting principle followed in India. For N. Raja & Associates, - Chartered Accountants Firm No.00388S Partner Membership No. 022890 Place: Chennai Date : 27.06,2017 Project Sustainability Grant Fund (Grant Fund of Government of Tamil Nadu) Balance Sheet As At 31.03.2017 Note Particulars No, As at 31.03.2017 As at 31.03.2016 Sources of Funds Grant from Government 1 396,71,29,782 297,98,41,941 Current Liabilities 2 51,750 51,775 Total 396,71,81,532 I 297,98,93,716 Application of Funds Current Assets 3 a. Cash and Cash Equivalents 311,50,88,184 245,55,01,895 b. Term Deposit with Companies 78,05,98,781 46,56,19,417 c. Other Current Assets | 7,14,94,567 5,87,72,404 Total 396,71,81,532 297,98,93,716 Notes including Significant Accounting Policies - Note 4 to 6 Notes referred above form an integral part of the Financial Statements Vide our report of even date attached For N. Raja & Associates, Chartered Accountants Firn Reg. No: 003388S N. Raja Kakarla Usha, IAS Harmander Singh, IAS Partner Managing Director Chairman Membership No: 022890 (Tanil Nadu Urban Infrastructure Financial Services Limited - Fund Manager of Ple CProject Sustainability Grant Fund) Place: Chenna Dale: 27.06,2017- Project Sustainability Grant Fund (Grant Fund of Government of Tamil Nadu) Income & Fxpendilure Account for the year ended 3103.2017 For the period ended For the period ended Particulars | 31.03.2017 3L03.2016 Income () Interest earned On Savings Bank Account 18,13,267 10,62,724 On Deposit Accounts 8,81,61,936 9,35,41,888 Total 8,99,75,203 9,46,04,612 Expenditure Management Fee & Other Charges 2,12,39,862 2,12,12,260 Audit Fee - Statutory Audit 57,500 57,500 Total 2,12,97,362 2,12,69,760 Excess of Income over Expenditure transferred to Grant from Government | 6,86,77,841 7,33,34,852 Notes including Significant Accounting Policies - Note 4 to 6 Notes referred above form an integral part of the Financial Statements Vide our report of even date attached For N. Raja & Associates, Chartered Accountants Firm Reg. No; 003388S N. Raja Kakarla Usha, IAS Harmander Singh, IAS Partner Managing Director Chairman Membership No: 022890 (Tamil Nadu Urban Infrastructure Financial Services Limited - Fund Manager of Project Sustainability Grant Fund) Place: Chennai Date: 27.06.2017 - Project Sustainability Grant Fund (Grant Fund of Government of Tamil Nadu) Receipis & Payments Account for the )car ended 31.03.2017 Particulars For the year ended For the year ended 31.03.2017 31.03.2016 Receipts Grant from Government 303,59,61,000 210,61,32,000 Interest Receipts 9,56,37,100 9,13,29,981 Other Receipts from TNUDF 0 1,53,80,934 Other Receipts from WSPF _0 6.80,768 Total 313,15,98,100 221,35,23,683 Payments Disbursements to Urban Local Bodies 211,73,51,000 185,41,03,000 Remittance of Grant to GoTN 0 3,59,83,934 Term Deposit with Companies 31,49,79,364 15,94,35,623 Other Payments to TNUDF 85,34,228 0 Other Payments to WSPF 98,49,832 0 Management Fee & Other Charges 2,12,39,862 2,12,12,260 Audit Fees 51,775 59,280 TDS on Audit Fees_Payable 5,750 5,725 Total 247,20,11,811 207,07,99,822 Surplus / (Deficit) for the period 65,95,86,289 14,27,23,861 Add: Opening Cash and Bank Balances 245,55,01,895 231,27,78,034 Closing Cash & Bank Balances 311,50,88,184 245,55,01,895 Vide our report of even date attached For N. Raja & Associates, Chartered Accountants Firm Reg. No: 003388S N. Raja Kakarla Usha, IAS Harmander Singh, IAS Partner Managing Director Chairman Membership No: 022890 - (Tamil Nadu Urban Infrastructure Financial Services Limited - Fund Manager of Project Sustainability Grant Fund) Place: Chennai Date: 27.06.2017 - Project Sustainability Grant Fund (Grant Fund of Government of Tamil Nadu) Notes Iorming part of the Financial Statements for the Ne-ar ended 31.03.2017 Particulars _ As at 31.03.2017 As at 31.03.2016 Note-1 Grant from Government Balance at the beginning of the year 297,98,41,941 269,16,08,819 Add: Grant assistance received during the year 303,59,61,000 206,90,01,270 Excess of Income over Expenditure 6,86,77,841 7,33,34,852 carried from Income and Expenditure Account 608,44,80,782 483,39,44,941 Less: Disbursement to ULBs during the year 211,73,51,000 185,41,03,000 Total 396,71,29,782 297,98,41,941 Note-2 Current Liabilities Audit Fee payable 51,750 51,775 Total 51,750 51,775 Note-3 Current Assets a. Cash and Cash Equivalents i. In Savings Bank Account with Banks 8,88,184 64,51,002 ii. In Deposit Account with Banks 30,10,00,000 61,52,50,893 iii. In Public Deposit Account with Banks 281,32,00,000 183,38,00,000 311,50,88,184 245,55,01,895 b. Term Deposit with Companies 78,05,98,781 46,56,19,417 78,05,98,781 46,56,19,417 c. Other Current Assets i. Accrued interest on Deposits 2,98,23,939 3,54,85,836 ii. Receivable from TNUDF 2,57,89,193 1,72,54,965 iii. Receivable from WSPF 1,58,81,435 60,31,603 ,yju7,14,94,567 5,87,72,404 Total 'j 396,71,81,532 297,98,93,716 Project Sustainability Grant Fund (Grant Fund of Government of Tamil Nadu) Notes forming part of the Financial Statements for the year ended 31.03.2017 Note-4: Significant Accounting Policies a. Basis of Accounting The financial statements have been prepared under the historical cost convention on an accrual basis and in accordance with applicable accounting standards issued by the Institute of Chartered Accountants of India. I. Revenue Recognition Interest earned on the term deposits is recognized on a time proportion basis on the outstanding balances at the applicable rates. c. Management fee The Project Sustainability Grant Fund (Grant Fund of Government of Tamil Nadu) is managed by Tamil Nadu Urban Infrastructure Financial Services Limited (TNUIFSL) as per the guidelines prescribed by Government of Tamil Nadu vide G.O.(Ms) No.94, Municipal Administration and Water Supply (MA2) Department, dated 01.07.2015. TNUIFSL is eligible for a fee of 1% of the disbursement made out of the Project Sustainability Grant Fund. d. Transfer of surplus The balance in Income and Expenditure Account is transferred every year to the Grant from Government Account. e. Grant from Government Account The balance in Grant from Government Account represents grants received from the GoTN, transfer of balance from Income and Expenditure Account, disbursement of capital grant to ULBs & other eligible disbursements, if any. Project Sustainability Grant Fund (Grant Fund of Government of Tamil Nadu) Notes forming part of the Financial Statements for the year ended 31.03.2017 Note-5: Nature of Operation The PSGF is capital grant to support implementation of Urban infrastructure projects and provide grant for operation of credit enhancement mechanism. The PSGF will be used to assist eligible applicants to provide capital grant for implementation of urban infrastructure projects which directly benefit the urban low income population, to provide viability gap funding with an aim to achieve financial sustainability of urban infrastructure projects which directly benefit urban population and to provide grant to operate credit enhancement mechanisms for issue of bonds, debt instruments and other borrowings. Note-6: Previous year's figures have been regrouped / reclassified wherever necessary. Vide our report of even date attached For N. Raja & Associates, Chartered Accountants Firm Reg. No: 003388S N. Raja Kakarla Usha, IAS Ilarmander Singh, IAS Partner Managing Director Chairman Membership No: 022890 (Tamil Nadu Urban Infrastructure Financial Services Limited - Fund Manager of Project Sustainability Grant Fund) Place: Chennai I Date: 27.06.2017 AUDITOR'S REPORT TO THE BOARD OF DIRECTORS OFTAMIL NAI)U URBAN INFRASTRUCUTRE FINANCIAL SERVICES I JMITED (FUND MANAGER OF' PROJIEC' 1)11VEL()PMEN'I' GRANT Fl UNI)) We have audited the accompanying Financial Statements of PROJECT DEVELOPMENT GRAN'T' Ft[NDof Government oflrnil Nadu as on 31 March 2017, which comprise the Balance Sheet as on that date. the Receipts and Payments Account for the year ended on that date, the Income and Expenditure Account for the year ended on that date and a summary of significant accounting policies and other explanatory information. The Government ol'Tamil Nadu has created Project Development Grant Fund and prescribed the guidelines for its operation and management vide G.O,(Ms) No.94, Municipal Administration and Water Supply (MA-2) Department, dated 01.07.2015. Project Development Grant Fund is a Government Fund and is being operated and managed by the Fund Manager. Tamil Nadu Urban Infrastructure Financial Services Limited (TNUIFSL), based on the guidelines prescribed. The Management (Fund Manager) is responsible fr the preparation of these Financial Statements that give a true and fair view of the financial position and financial performance. This responsibility includes the design, implementalion and maintenance of internal control 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. Our responsibility is to express an opinion on these 1in'aci'al satemncits hascd on otir audit. We conducted our audit in accordance with the Standards on Auditiwu issued by tie Institute of Chartered Accountants of India. Those Standards require that we corply with ethical requirements and plain and perlorm the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audil evidence 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 finaicial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Management's preparation and fair presentation of the financial statements in order to design the audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. We report that: a. We have obtained all the information and explanations, which to the best of' ourknowledge and belief were necessary for the purposes of our audit; b. In our opinion, books of account as required have been kept by the Fund so far as it appears from our examination of hose books. c. The Balance Sheet, Income and Expenditure Account, dealt with by this report are in agreement with the books of account. In our opinion and to the best of our information and according to the explanations given to us, the financial statements give a true and fair view in conformity with the accounting priiciples generally accepted in India: a. in the case of the Balance Sheet, of the state of affairs of the PROJECT DEVELOPMENT GRANT FUND as at 3]5' March, 20 17 and b.in the case of the Income and Expenditure Account, of the surplus of the Fund for the year ended on that date. ForPonraj& Co., Chartered Accountants Firm Registration No. 002672S N. Raghu Ram Place: Chennai Partner Date: 27.06.2017 Membership No. 210771 Project Development Grant Fund (Grant Fund of Government of Tamil Nadu) Balance Sheet as at 31.03.2017 Note Particulars No. As at 31.03.2017 As at 31.03.2016 Sources of Funds Grant from Government 1 85,42,74,580 7613,54,806 Current Liabilities 2 3.76,750 2.36.525 Total 85,46,51,330 76,15,91,331 Application of Funds Current Assets 3 a. Cash and Cash Equivalents 28,26,98,545 30,32,55,966 b. Current Investments 54,17,49,709 44,25,60,948 c. Other Current Assets 3,02,03,076 1,57,74,417 Total ___ 85,46,51,330 76,391,331 Notes including Significant Accounting Policies - Note 4 to 6 Notes referred above form an integral part of the Financial Statements Vide our report of even date attached For Ponraj & Co., Chartered Accountants Firm Registration No. 002672S N. Rog n11am Kakarla Usha, IAS Harniander Singli, IAS Partner Managing Director Chairman Membership No. 210771 (Tamil Nadu Urban Infrastructure Financial Services Limited - Fund Manager of Project Deielopment Grant Fund) Place: Chennai Date : 27.06.2017 Project Development Grant Fund (Grant Fund of Government of Tamil Nadu) -Income & l1xpenditure Account for the year ended 31.03.2017 Particulars For the year ended For the year ended 31.03.2017 31.03.2016 Income Interest earned On Savings Bank Account 2,73,635 3,59,369 On Deposit Accounts 6,26,10,073 6,10.51,789 ._ Total 6,28,83,708 6,14,11,158 Expenditure Management Fee 13,71,676 16,54,975 Audit Fee - Statutory Audit 57,750 - 57,250 Total 14,29,426 17,12,225 Excess of Income over Expenditure transferred to Grant from Government 6,14,54,282 5,96,98,933 Notes Including Significant Accounting Policies - Note 4 to 6 Notes referred above form an integral part of the Financial Statements Vide our report of even date attached For Ponraj & Co., Chartered Accountants Firm Registration No. 0026728 N. Ra nt Ram Kakarla Usha, IAS Harmander Singh, IAS Pailrer Managing Director Chairman Membership No. 210771 (Tamil Nadu Urban Infrastructure Financial Services Limited - Fund Manager of Project Development Grant Fund) Place: Chennai Date : 27.06.2017 Projecti Development Grant Fund (Grant Fund of G-'overnment of Tainil Nadu) - - - ~Receipts & Payments for the year ended_31.03.2017 ____ For the year For the year Particulars ended ended ____ ___ _________ 31.03.2017 1 31.03.2016 Receipts Grant from Government 15,07,41,687 12,85,98,000 Interest Receipts 4,841.55,049 6,14,t2,008 Earnest Money Deposit 1___I,40,0W0 10,000 ___ Total __ _19,93,36,736 19,00,20,008 Payments Disbursements 11,92,76,195 14,51,77,920 Management Fcc & Other Charges 13,71,676 16,54,974 Audit Fees 51,775 66,120 TDS on Audit Fees 5,750 5,725 Termn Deposit with Companies 9,91,88,761 24,94,25,454 Total _ 21,98,94,157 39,63,30,193 Surplus / (Deficit) for the year (2.05,57,421) _ (20,63,10,1 85) Add: 0pening_Cash and Bank Balances 30,32,55,966 ____50,95,66,15 1 Closing Cash & Bank Balances 28,26,98,545 3 0,32 ,SS,966 Vide our report of even date attached For Ponraj & Co., Chartered Accountants Firm Registration No. 002672S N. Rag]? IRitirn Kakarla Usha, 1AS Harmander Singlh, IAS Partner Managing Director Chairman Membership No. 210771 (Tamil Nadu Urban Infrastructure Financial Services Limited - Fund'Manager of Project Development Grant Fund) Place: Chennai Date: 27.06.2017 Project Development Grant Fund (Grant Fund of Government of Tamil Nadu) Notes forming part of the Financial Statements for the year ended 31.03.2017 Particulars As at 31.03.2017 As at 31.03.2016 Note-1 Grant from Government Balance at the beginning of the year 76,13,54,806 71,79,31,819 Add: Grant assistance received during the year 15,07,41,687 12,89,01,974 Excess of Income over Expenditure carried from Income 6,14)54,282 5,96,98,933 & Expenditure Account 97,35,50,775 90,65,32,726 Less: Disbursements made during the year 11,92,76,195 14,51,77,920 Total 85,42,74,580 76,13,54,806 Note-2 Current Liabilities Audit Fee payable 51,750 51,525 Other Liabilities 3,25,000 1,85,000 Total 3,76,750 2,36,525 Note-3 Current Assets a. Cash and Cash Equivalents i. In Savings Account 14,98,545 4,55,966 ii. In Deposit account 25,05,00,000 26,45,00,000 iii. In Public Deposit Account with Banks 3,07,00,000 3,83,00,000 28,26,98,545 30,32,55,966 b. Current Investments i. Term Deposit with Companies 54,17,49,709 _ 44,25,60,948 54,17,49,709 j 44,25,60,948 c. Other Current Assets i. Accrued interest on Deposits 3,02,03,076 1,57,74.417 3,02,03,076 1,57,74,417 Total 85,46,51,330 76,15,91,331 Project Development Grant Fund (Grant Fund of Government of Tamil Nadu) Notes forming part of the Financial Statements for the year ended 31.03.2017 Note-4 - Significant Accounting Policies A. Basis of Accounting The financial statements have been prepared under the historical cost convention on an accrual basis and in accordance with applicable accounting standards issued by the Institute of Chartered Accountants of India. B. Revenue Recognition Interest earned on the term deposits is recognized on a time proportion basis on the outstanding balances at the applicable rates. C. Management fee The Project Development Grant Fund (Grant Fund of Government of Tamil Nadu) is managed by Tamil Nadu Urban Infrastructure Financial Services Limited (TNUIFSL) as per the guidelines prescribed by Government of Tamil Nadu vide GO.Ms.No.94, Municipal Administration & Water Supply Department, dated 01.07.2015. TNUIFSL is eligible for a fee of 1% of the disbursement made out of the Project Development Grant Fund. D. Transfer of surplus The balance in Income and Expenditure Account is transferred every year to the Grant from Government Account. E. Grant from Government Account The balance in Grant from Government Account represents grants received from the GoTN, transfer of balance from Income and Expenditure Account, disbursement of technical assitance grant to consultancy assignments & other eligible disbursements, if any. Project Development Grant Fund (Grant Fund of Government of Tamil Nadu) Notes forming part of the Financial Statements for the year ended 31.03.2017 Note-5: Nature of Operation The PDGF is technical assistance grant to support consIltancy assignments for creation of urban infrastructure, provision of urban facilities and services, up-gradation of the living standards of urban population and improvement in the delivery of urban services to such population. The PDGF will be used provide grant to carry out consultancy assignments, to operate and manage resource mobilisation programs and to carry out capacity building & development and training. Note-6: Previous year's figures have been regrouped / reclassified wherever necessary. Vide our report of even date attached For Ponraj & Co., Chartered Accountants Firm Registration No. 002672S N. RaJI p.16RIn Kakarla Usha, IAS larmander Singh, IAS Partner Managing Director Chairman Membership No. 210771 (Tamil Nadu Urban Infrastructure Financial Services Limited - Fund Manager of Project Development Grant Fund) Place: Chennai Date : 27.06.2017 Annexure-2 World Bank assisted Tanil Nadu Sustainable Urban Development Project (TNSUIDP) Consolidated Project Audit report for the Financial Year 2016-17 covering TNUDF, PSGF and PDGF I .c*,-,* I i,-iCiii AUDIT REPORT 1. We have audited the accompanying project financial statements comprising of the sources and application of funds under Category 2 (Component B2) and Category-3 (Components B1 & B3) under Tamil Nadu Sustainable Urban Development Project (TNSUDP) which is implemented through Tamil Nadu Urban Development Fund (TNUDF), Project Sustainability Grant Fund (PSGF) and Project Development Grant Fund (PDGF) financed. under World Bank Credit/Loan No. 8488- IN for the year ended 31st March 2017. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with National Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. In our opinion, the project financial statements give a true and fair view of the Sources and Application of Funds of loan / grant of TNSUDP for the year ended 31st March 2017, in accordance with relevant National Standards. In addition, with respect to Statement of Expenditures (SoEs), (a) Adequate supporting documentation has been maintained to support claims to the World Bank for reimbursements of expenditures incurred; and (b) Which expenditures are eligible for financing under the Loan/Credit Agreement [Ln/Cr. 8488-IN]. For N. Raja & Associates Chartered Accountants Firm Regn. No.00388S N. Raja Partner Membership No. 022890 Place: Chennai Date :11.12.2017 -1- Consolidated Project Financial Statement of funds for Category 2 (Component B2) and Category-3 (Components B1 & B3) under TNSUDP for the Financial Year 2016-2017 I. Sources and Application of Funds (Amount in Rs.) Particulars Categ Comp - Up to For the Year Cumulative ory onent FY 2015-16 2016-17 up to 2016 - 17 1. Opening Balance -_- 2. Sources of funds a. Loan to TNUDF 75,00,00,000 150,00,00,000 225,00,00,000 B- -- b. Capital Grant to Project 3 113,47,00,000 150,00,00,000 263,47,00,000 Sustainability Grant Fund (PSGF) c. Credit Enhancement 2 B2 0 0 0 Grant to Project Sustainability Grant Fund CPSGF) d. Consultancy Grant to 3 B3 2,00,00,000 5,00,00,000 7,00,00,000 Project Development Grant Fund (PDGF) e. TNUDF's own funds 3,63,75,504 10,43,37,210 14,07,12,714 Total (2) 194,10,75,504 315,43,37,210 509,54,12,714 3. Total (3) (1 + 2) 194,10,75,504 315,43,37,210 509,54,12,714 4.Application of Funds a. Loan to ULBs from 78,50,00,000 233,14,00,000 311,64,00,000 TNUDF B 1 b. Capital Grant to ULBs 114,03,00,000 77,33,00,000 191,36,00,000 from PSGF c. Credit Enhancement 2 B2 0 0 0 Grant from PSGF d. Consultancy Grant to 3 B3 1,57,75,504 4,96,37,210 6,54,12,714 consultancy assignments from PDGF Total (4) 194,10,75,504 315,43,37,210 509,54,12,714 5. Closing Balance (3-4) 0 0 0 -2- II. Statement of Expenditure and Claims filed The details of expenditure incurred and claims filed for the period up to 31.03.2017 is furnished below: 1. Category 2 - (Component B2 -Credit Enhancement Facility) Nil 2. Category 3 a) Component 131 (Loan and Capital Grant to sub-projects) f_ _(in Rs.) Particulars As per Audit Reports Expenditure For the year Cumulative up incurred up to 2016-17 to 31.03.2017 31.03.2016 A. Expenditure incurred prior to retroactive financing period (i.e. prior to 01.05.2014) i) Mobilization 14,38,50,655 0 14,38,50,655 Advance ii) Other Expenditure 30,80,37,833 0 30,80,37,833 Total 45,18,88,488 0 45,18,88,488 Less: Expenditure incurred 6,92,58,112 4,25,31,017 11,17,89,129 against Mobilization Advance after 01.05.2014 Net Expenditure Prior to 38,26,30,376 (4,25,31,017) 34,00,99,359 01.05.2014 - (A) B. Expenditure incurred 217,82,60,381 294,62,50,847 512,45,11,228 for the period from 01.05.2014 to 31.03.2017 - (B) - C. Total Expenditure 256,08,90,757 290,37,19,830 546,46,10,587 (A+B) D. Expenditure 322,84,42,074 reimbursable (63% on (B)) E. Claims filed with CAAA 322,52,47,200 F. Balance to be claimed 31,94,874 The claims for the balance amount of Rs.31,94,874/- will be claimed during FY 2017-18. -3- b) Component B3 (Technical Assistance to consultancy assignments) F-_ -- __in Rs. Particulars Expenditure For the year Cumulative up incurred up 2016-17 to 31.03.2017 to 31.03.2016 A. Expenditure incurred prior to Nil Nil Nil retroactive financing period (i.e. prior to 01.05.2014) - (A) B. Expenditure incurred for the 1,57,75,504 4,96,37,210 6,54,12,714 period from 01.05.2014 to 31.03.2017 -(B) C. Total Expenditure 1,57,75,504 4,96,37,210 6,54,12,714 D. Expenditure reimbursable 4,12,10,010 (63% on (B)) E. Claims filed with CAAA __4,12,02,000 F. Balance to be claimed _ 8,010 III. Accounting Policies 1) Accounting Policies of Tamil Nadu Urban Development Fund - Category 3 (Component B1 - Loan to ULBs) a. Basis of Accounting The financial statements have been prepared under the historical cost convention on an accrual basis and in accordance with applicable Accounting Standards issued by the Institute of Chartered Accountants of India. b. Fixed Assets Fixed assets are stated at actual cost less accumulated depreciation. Cost comprises of the purchase price and any attributable cost of bringing the assets to working condition for its intended use. c. Depreciation Depreciation on Fixed Assets is provided pro-rata on the basis of the Written Down Value method using the rates prescribed under the Income Tax Act, 1961. d. Investments Current Investments are valued at lower of cost or market value. Long term investments are usually carried at cost. e. Income Recognition Interest on loans disbursed and investment income are recognized as per contract on accrual basis. -4- f. Employee Retirement Benefits At present there are no employees in the Trust. The Trust is managed by the Fund Manager. Hence, the Trust does not have any policy in this regard. g. Borrowing Costs Borrowing costs are capitalized as part of the cost of the qualifying asset when it is probable that they will result in future economic benefit to the Trust and the cost can be measured. Other borrowing costs are recognized as an expense in the year in which they are incurred. h. Impairment of Assets Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of assets is measured in line with the relevant Accounting Standard. i. Taxes on Income Current Tax is determined based on the amount of tax payable in respect of taxable income for the year. Deferred Tax is recognized on timing differences, being the difference between taxable income and the accounting income that originate in one year and reversed in another accounting year. Deferred Tax assets and liabilities are computed on the timing differences applying the tax rate and tax laws that have been enacted or subsequently enacted by the balance sheet date. Deferred tax Assets arising on account of unabsorbed depreciation or carry forward of business loss are recognized only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized. j. Provisions, Contingent Liability & Contingent Assets Provisions are recognized when there is a present obligation as a result of a past event and it is probable that outflows will be required to settle the obligation, which can be reliably estimated. Contingent liabilities are disclosed after an evaluation of the fact and legal aspects of the matter involved. Contingent assets are neither recognized nor disclosed. k. Basis of claiming reimbursement from World Bank The loan from TNUDF to the Urban Local Bodies (ULBs) for the sub- projects under TNSUDP is disbursed based on the contract documents executed and based on the progress of work. Claims are filed with the Controller of Aid Accounts and Audit (CAAA), Department of Economic Affairs, Ministry of Finance, Government of India based on the sub-project expenditure in the prescribed format (Interim Unaudited Financial Report) on quarterly basis. CAAA on approval will in turn forward the same to the Reserve Bank of India and World Bank. -5- 1. Monitoring Mechanism The sub-projects are being implemented by implementing agencies / ULBs. The loan from TNUDF to the ULBs for the sub-projects under TNSUDP is disbursed based on the contract documents executed and based on the progress of work. The ULB in turn pays the implementing agency / contractors as the case may be. The SoE for the amount spent on the project, along with the copies of bills, payment vouchers & receipts are submitted to TNUIFSL. The audit of TNUDF is carried out by a firm of Chartered Accountants. 2) Accounting Policies of Project Sustainability Grant Fund (Category 2 - Component B2 - Credit Enhancement) and (Category 3-Component B1 - Capital Grant to ULBs) a) Basis of Accounting The financial statements have been prepared under the historical cost convention on an accrual basis and in accordance with applicable accounting standards issued by the Institute of Chartered Accountants of India. b) Revenue Recognition Interest earned on the term deposits is recognized on a time proportion basis on the outstanding balances at the applicable c) Transfer of surplus The balance in Income and Expenditure Account is transferred every year to the Grant from Government Account. d) Grant from Government Account The balance in Grant from Government Account represents grants received from the Government of Tamil Nadu, transfer of balance from Income and Expenditure Account, disbursement of capital grant to ULBs & other eligible disbursements, if any. e) Basis of claiming reimbursement from World Bank The grant from Project Sustainability Grant Fund (PSGF) to the Urban Local Bodies (ULBs) for the sub- projects under TNSUDP is disbursed based on the contract documents executed and based on the progress of work. Claims are filed with the Controller of Aid Accounts and Audit (CAAA), Department of Economic Affairs, Ministry of Finance, Government of India based on the sub- project expenditure in the prescribed format (Interim Unaudited Financial Report) on quarterly basis. In the case of Credit Enhancement Component, claims are filed based on the utilization of Credit Enhancement Facility. CAAA on approval will in turn forward the same to the Reserve Bank of India and World Bank. -6- f) Monitoring Mechanism The sub-projects are being implemented by implementing agencies / ULBs. The capital grant from PSGF to the ULBs for the sub-projects under TNSUDP is disbursed based on the contract documents executed and based on the progress of work. The ULB in turn pays the implementing agency / contractors as the case may be. The SoE for the amount spent on the project, along with the copies of bills, payment vouchers & receipts are submitted to TNUIFSL. The audit of PSGF is carried out by a firm of Chartered Accountants. 3) Accounting Policies of Project Development Grant Fund (Category 3- Component B3 - Technical Assistance Grant) a) Basis of Accounting The financial statements have been prepared under the historical cost convention on an accrual basis and in accordance with applicable accounting standards issued by the Institute of Chartered Accountants of India. b) Revenue Recognition Interest earned on the term deposits is recognized on a time proportion basis on the outstanding balances at the applicable rates. c) Transfer of surplus The balance in Income and Expenditure Account is transferred every year to the Grant from Government Account. d) Grant from Government Account The balance in Grant from Government Account represents grants received from the GoTN, transfer of balance from Income and Expenditure Account, disbursement of technical assistance grant to consultancy assignments & other eligible disbursements, if any. e) Basis of claiming reimbursement from World Bank The grant from Project Development Grant Fund (PDGF) for the consultancy works awarded under TNSUDP is disbursed based on the contract documents executed and based on the stages of the consultancy. On disbursement of the amount to the consultant, claims are filed with Controller of Aid Accounts and Audit (CAAA), Department of Economic Affairs, Ministry of Finance, Government of India in the prescribed format (Interim Unaudited Financial Report) on quarterly basis. The CAAA on approval will in turn forward the same to the Reserve Bank of India and World Bank. f) Monitoring Mechanism The grant from PDGF for the consultancy works awarded under TNSUDP is disbursed based on the contract documents executed and on the stages of consultancy. The consultancy charges are paid to the consultant directly based on completion and approval of reports by the review committee. The audit of PDGF is carried out by a firm of Chartered Accountants. -7- IV. Management Letter a) There have been no irregularities involving management or employees who have a significant role in the accounting and internal control systems or that could have a material effect on the financial statements. b) The financial statements are free of material misstatements, including omissions. C) The accounting policies of categories B, B2 and B3, which are material or critical in determining the results of operations for the year or financial position are set out in the financial statements and are consistent with those adopted in the financial statements for the previous year. The financial statements are prepared on accrual basis. d) There have been no events subsequent to year-end which require adjustment of or disclosure in the financial statements or Notes thereto excepting those disclosed in the Notes to the financial statements. e) The terms and conditions of all the loans disbursed and outstanding as of 31st March 2017, has been done strictly as per the approved/ agreed terms. f) The project appraisals are being done in accordance with the Lending Policies and Procedures. g) The disbursements are made after proper scrutiny of the requirement and in accordance with the agreed terms and conditions of loan and grant. h) Proper records and documents are maintained showing full particulars for the loan / grant sanction and disbursements. 1) There are adequate internal control procedures commensurate with the size of and nature of transactions for the disbursements made under this project and there is no significant continuing failure to correct major weaknesses in such internal controls. Signature to I to IV For N. Raja & Associates Chartered Accountants Firm Regn. No.0 3388S Managing Director N. aja Tamil Nadu Urban Infrastructure Financial Partner Services Limited Membership No. 022890 (Fund Manger of TNUDF, PSGF and PDGF) Place: Chennai Date : 11.12.2017 Ainexure-3 World Bank assisted Tamil Nadu Sustainable Urban Development Project (TNSUDP) List of Sub-projects Audited by Local Fund Audit Department for the Financial Year 2016-17 SI.No. Name of the ULB Scheme 1 Pallavaram Municipality Water Supply 2 Pammal Municipality Water Supply 3 Theni-Allinagaram Municipality Water Supply 4 Chennai Corporation Street Lights 5 Chennai Corporation Integrated Storm Water Drains f:\Offico 201 7\M\AUdit Report F ormat II & III docx Annexure-2 AUDIT REPORT We have audited the attached project financial statement relating to the Water Supply Improvement Scheme to Pallavapuram executed in Pallavapuram Municipality financed by sub loans / sub grant components under the World Bank assisted Tamil Nadu Sustainable Urban Development Project financed under World Bank Loan No.8488-IN. The project financial statements are the responsibility of the management and our responsibility is to express as opinion on these financial statements (sources and uses of funds) based on the audit. We conducted the audit in accordance with the regulations and standards of audit followed by Local Fund Audit Department which require that we perform the audit to obtain reasonable assurance about the end use of the project loans / grants flowing to the ULB and that they were used for intended purpose. Accordingly the auditors have exercised such tests of accounting records, internal checks and controls and other auditing procedures as necessary. In our opinion and to the best of our information and according to the explanations given to us, the project financial statements give a true and fair view of the sources and uses of funds of the project financed by loans / grants and contribution from the ULB for the financial year ended 31.03.2017. In addition adequate supporting documentation has been maintained to support expenditures incurred and such expenditures are eligible for financing under the loan agreement. ); Director of Local Fund Audit Date: Seal Format for Project Financial Statement (forkroqects implemented by TWAD/CMWSSB) Project Financial Statement as on 31.03.2017 Name of the 'roject WAlER SUPPLY IMPROVEMENT TO PALLAVAPURAM Name of the UL3 PALLAVAPURAM MUNICIPALITY Implementing Agency __CMWSS3 (Rs in lakhs) Approved project cost As per original AS As per revised AS Loan from INJDF 5991 Grant from Grant Fund 1. 29.99 Public Deposit contribution ULB contribution 9.99 Interes1 during construction Others.- Total 99.95 (Rs in lakhs) Source of funds Upto Current FY Upto Fy 2015-16 2016-17 FY 2016-17 Opening Balance -- Loan received from TNUDF 1700.00 1700.00 3400.00 Grant received from Grant 885.00 1021.00 1906.00 Fund-1 Deposit mobilized - -- ULB contribution 634.61 634 61 Other (IUDM) Grant) 550.00 350.00 900.00 Total 3769.61 3071.00 6840.61 Application of Funds Funds transferred by ULB to the 3615.76 2721.00 6336.76 Implementing Agency (CMWSSB) Expenses incurred by the ULB directly for the project I.Fixed deposit receiving 67.87 67.87 Rs.7.50cr loan 2. Fixed Deposit receiving 49.78 49.78 Rs.5.50cr loan 3. Fixed Deposit receiving 36.20 -- 36.20 Rs.4.00cr loan Total 3769.61 2721.00 6490.61 Closing balance 350.00 350.00 This is to certify that the expenditure reported is in agreement with the books of account. Sia M 6:;MQAUi'Rr S Igntre of Local Fund Auditor PALLAVAPURAM MUNICIPALITY Annexure - 2 AUDIT REPORT We have audited the attached project financial statement relating to the Comprehensive Water Supply Improvement Scheme executed in Pammal Municipality. financed by sub loans / Sub grant components of the Tamil Nadu Urban Development. Project II financed under World Bank Credit / Loan No. 8488-IN. The Project Financial Statement are the responsibility of the management and our responsibility is to express an opinion on these financial statements (sources and used for funds) based on the audit. We conducted the audit in accordance with the regulations and standards of audit followed by Local Fund Audit Department which require that we perform the audit to obtain reasonable assurance about the end use of the project loans / grants flowing to the ULB and that they were used for intended purpose. Accordingly the auditors have exercised such tests of accounting records, internal checks and controls and other auditing procedures as necessary. In our opinion, and to the best of our information and according to the explanations given to us, the project financial statements give a true and fair view of the source and uses of funds of the project finance by loans / grants and contribution from the ULB for the financial year ended 31.03.2017. In addition adequate supporting documentation has been maintained to support expenditures incurred and such expenditures are eligible for financing under the loan agreement. Assistant Director Local Fund Audit Kancheepuram DATE: ~Cr~ Format for Project Financial Statement Project Financial Statement as on 31.03.2017 Name of the Project Comprehensive Water Supply Improvement Scheme Name of the ULB Pammal implementing Agency CMWSSB As per As per Approved Project Cost Original AS Revised AS Loan from TNUDF - 25.86 CR Grant from Grant Fund -1 - 12.93 CR Public Deposit Contribution - ULB Contribution 4.31 CR Interesting During Construction - Others Total 43.10 CR Current Upto FY 2015 during FY Upto FY 2016-17 16 2016-17 Source of Funds - Opening Balance - 196065 Loan received from TNUDF 85000000 90000000 175000000 Grant Receive from Grant Fund -1 45300000 46800000 92100000 Deposit Mobilized IUDM Grant 20000000 20000000 ULB Contribution 31674500 8130000 39804500 Others (Please Specify) - Int 914065 73861 987926 Total 182888565 145199926 327892426 Application of Funds Fund transferred by ULB to the implementing Agency (TWAD / CMWSSB) 175000000 130000000 305000000 Expenses incurred by the ULB directly for the project 1. FD for receiving Rs. 17.50 CR Loan 7692500 8145000 15837500 2. 3. Total 182692500 138145000 320837500 Closing Balance 196065 7054926 7054926 This is to certify that the expenditure reported is in agreement with the books of account Signature of Commissioner Signature of Local Fund Auditor Date:I. i - O Date Annexire - 2 AUDIT REPORT We have audited the attached project financial statement relating to the New Water Supply Scheme (Name if the project / Scheme) executed in Tieni-Allinagaram Municipalty (Name of the Municipality) financed by sub loans / sub grant components under the world Bank assisted Tamil Nadu Sustainable Urban Development Project financed under world Bank Loan No.8488-IN. The Project financial statements are the responsibility of the management and our responsibility is to express an opinion on these financial statements (sources and uses of funds) based on the audit. We conducted the audit in accordance with the regulations and standards of audit followed by Local Fund Audit Department which require that we perform the audit to obtain reasonable assurance about the end use of the project loans / grants flowing to the ULB and that they were used for intended purpose. Accordingly the auditors have exercised such tests of accounting records, internal checks and controls and other auditing procedures as necessary. In our opinion, and to the best of our information and according to the explanations given to us, the project financial statements give a true and fair view of the sources and uses of funds of the project financed by loans / grants and contribution from the ULB for the financial year ended 31.3.2017. In addition adequate supporting documentation has been maintained to support expenditures incurred and such expenditures are eligible for financing under the loan agreement. ASSISTANT DIRECTOR LOCAL FUND AUDIT THENI Date 23.05.2017. Format for Project Financial Statement Project Financial Statement As on 31-03-2017 Providing NEW WATER SUPPLY SCHEME to N oTheni - Allinagaram Municipality Name of the ULB Theni - Allinagaram Implementing Agency TWAD Board Asper Original Approved Project cost A.s. (Rs. in Crore) Loan from TNUDF 41.30 Grant from Grant Fund - I 20.65 Public Deposit Contribution ULB Contribution 6.88 Interest during construction Others Total 68.83 (Rs. in lakh) Sources of Funds Up to Current during Up to FY 2015-16 FY 2016-17 FY 2016-17 Opening Balance (amount deposited in bank) 0.00 0.03 Loan from TNUDF 1700.00 1200.00 2900.00 Grant received from Grant Fund - I 880.00 500.00 1380.00 Deposit Mobilized 0.00 0.00 ULB Contribution 545.25 66.60 611.85 Others (Please specify) 0.00 0.00 Equalisation & Incentive Fund 2003-04 0.00 0.00 14th Finance Com. Grant 0.00 125.00 125.00 Interest 12.26 6.59 18.85 Total 3137.51 1898.22 5035.70 Application of Funds 0.00 0.00 Funds transferred by ULB to the Implementing 2896.17 1642.00 4538.17 agency (TWAD / CMWSSB) others 0.52 0.52 Loan24.11 89.22 113.33 Repayment Joint Escrow A/c Invesment 217.20 45.25 262.45 Total 3137.48 1776.99 4914.47 Closing Balance 0.03 121.23 121.23 This is to certify that the expenditure reported is in agreement with the books of account. Commissioner Assistant Director Theni - Allinagaram Municipality Local Fund Audit, Theni. Annexure--2 AUDIT REPORT We have audited the attached project financial statement relating to the Street Light Project executed in Greater Chennai Corporation financed by sub loans/sub grant components under the World Bank assisted Tamil Nadu Sustainable Urban Development Project financed under World Bank Loan No. 8488-IN. The Project financial statements are the responsibility of the management and our responsibility of the management and our responsibility is to express an opinion on these financial statements (sources and uses of funds) based on the audit. We conducted the audit in accordance with the regulations and standards of audit followed by Local Fund Audit Department which require that we perform the audit to obtain reasonable assurance about the end use of the project loans/grants flowing to the ULB and that they were used for intended purpose. Accordingly the auditors have exercised such tests of accounting records, internal checks and controls and other auditing procedures as necessary. In our opinion, and to the best of our information and according to the explanations given to us, the project financial statements give a true and fair view of the sources and uses of funds of the project financed by loans/grants and contribution from the ULB for the financial year ended 31.03.2017. In addition adequate supporting documentation has been maintained to support expenditures incurred and such expenditure are eligible for financing under the loan agreement. For Director of Local Fund Audit Date: Project Financial Statement Name of the Project Street Light Infrastructure Improvement Project Name of the ULB Chennai Corpofation (Rs. In Crores) Approved Project Cost As per Original AS As per Revised AS Loan from TNUDF 66.14 Grant from PSGF under TNUDP 18 90 - ULB Contribution 944 Others - Total 94.48 - Amount in Rs. Upto Upto Current during Upto Sources of Funds FY 2014-15 FY 2015-16 FY 2016-17 FY 2016 17 Opening Balance Received from TNUDF - Loan 360,000,000 360,000,000 51,400,000 411,400,000 Received under PSGF Grant 168,500,000 168,500,000 20,500,000 189,000,000 Received from Government as Interest Free Loan Received under TNUDP-Ill-Loan 250,000,000 250,000,000 250,000,000 Received from MIDF Others (Please specify) - ULB Contribution 162,655,612 186,022,241 -71,796,250 114,225,993 Interest on Savings Bank - - - Total 941,155,612 964,522,241 103,750 964,625,991 Application of Funds 1) Payment to Contractors 1) Civil Works 896,423,326 919,471,039 91.9,471,039 1) Civil Works - Mobilisation Adv - - iii) TDS 13,621,591 13,678,354 1-3,678,351 iv) Sales Tax 7,399,864 7,592,562 7,592,562 v) MWGFW 6,987,037 6,987,037 103,750 7,090,787 2) Transfer of Utilities - - 3) Payment to other departments - I 1) Road restoration - - ii) Others (Southern Railways / EB) 16,723,794 16,793,249 16,793,249 4) Centage & Supervision - - - 5) Others (Advertisement, Printing - - - I Total 941,155,612 964,522,241 103,750 964,625,991 Closing Balance - Division - 0 0 0 0 This is to certify that the expenditure reported is in agreement with the books of account, IBRD procurement norms have been complied with and all supporting documents are retained at Urban Local Body. Superintendling Engineer for Director of Local Fund Audit (Electrical Department) Annexure - 2 AUDIT REPORT We have audited the attached project financial statement relating to the Integrated Storm Water Drain Project executed in Greater Chennai Corporation financed by sub loans/sub grant components under the World Bank assisted Tamil Nadu Sustainable Urban Development Project financed under World Bank Loan No.8488-IN. The Project financial statements are the responsibility of the management and our responsibility of the management and our responsibility is to express an opinion on these financial statements (sources and uses of funds) based on the audit. We conducted the audit in accordance with the regulations and standards of audit followed by Local Fund Audit Department which require that we perform the audit to obtain reasonable assurance about the end use of the project loans/grants flowing to the ULB and that they were used for intended purpose. Accordingly the auditors have exercised such tests of accounting records, internal checks and controls and other auditing procedures as necessary. In our opinion, and to the best of our information and according to the explanations given to us, the project financial statements give a true and fair view of the sources and uses of funds of the project financed by loans/grants and contribution from the ULB for the financial year ended 31.03.2017. In addition adequate supporting documentation has been maintained to support expenditures incurred and such expenditure are eligible for financing under the loan agreement. Joint Director(i/c) Local Fund Audit Dept., Greater Chennai Corporation Audit, Chennai-3. Date: Project Financial Statement Providing Integrated Storm Water Drain in Greater Chennai Corporation name 0l the L B Greater Chennai Corporation Projef en nlnency cic Greater Chennai Corporation Name of_Division/Zone 7,11,12 part Rs. in crs. Approved Project Cost As per Origina As per Revised AS Loan from TNUDF under WB assited TNSUIP 660 86 - Grant lror PSOF under WB assisted TNDUDP 330.43 - Public Deposit Contribution/ULB Contribution 110.14 - Interest During Construction by Loan 0 00 - Interest During Construction by LJL.B 0.00 - Others 0.00 . Total 1101.43 - Source of Funds Upto FY - Current during Upto FY 2016-17 _ _2015-2016 FY 2016-17 Opening Balance - Division - Head Office 6704.00 Received from ULB/TNUDF ( Loan / 750000000.00 2350000000.00 3100000000.00 Grants Other (Please specify) - Own Funds Total 750000000 00 2350006704.00 3100000000.00 Application o1 Funds 1) Payment to Contractors 2090978051.00 2090978051.00 i) Civil Works i) Civil Works- Mob Advance 707298796 00 707298796.00 Equipment Advance 42694500.00 42694500.00 l hird Party Inspection Charges (PMC) 70516007.00 70516007.00 iii)1ncorne Tax 55072251.00 55072251.00 iv)Sales Tax 23450155.00 23450155.00 2) Transfer of Utilities 3) Paynient to other departments )Labo.r WVelfaie Fund 102646102.00 102646102.00 ii) Road restoration (CMWSSB/EB) 5351430.00 5351430.00 v) Others 4) Centage & Supervision 5) Others (Advertisement, Printing Charges and Travelling Expenses) SUB TOTAL 749993296.00 2348013996 00 3098007292.00 Total Closing Balance-Division- Head Office 6704.00 199270800 1992708.00 Exo.Engineeri/WD Joint Director of Local Fund Audit Annexure-4 World Bank assisted Tamil Nadu Sustainable Urban Development Project (TNSUDP) List of Sub-projects Audited by a firm of Chartered Accountants for projects implemented by CMWSSB / TWAD Board for the Financial Year 2016-17 Sl.No. Name of the ULB Scheme 1 Pallavaram Municipality CMWSSB Water Supply 2 Pammal Municipality CMWSSB Water Supply 3 Theni-Allinagaram Municipality TWAD Board Water Supply 4 Chennai Metropolitain Water CMWSSB TTRO Supply & Sewerage Board Pallavaram -WSIS AUDIT REPORT INTRODUCTION We have audited the accompanying project financial statements relating to the project financed by sub loans/sub grants components of the Tamil Nadu Urban Development Project (TNSUDP) financed under World Bank Credit / Loan No. 8488 IN as of March 31, 2017. Our responsibility is to express an opinion on these financial statements based on our audit. SCOPE We conducted our audit in accordance with established national standards on Auditing issued by ICAI. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimated made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. OPINION In our opinion, the project financial statements (Sources and uses of funds) give a true and fair view of the project financed by sub loans/ sub grants from TNSUDP and contribution from the ULB for the year ended March 31, 2017 and provide us with a sound basis to state that the (a) funds have been used for the purposes, intended in accordance with the Legal Agreements and procurement guidelines of the World Bank, (b) adequate supporting documentation has been maintained to support expenditures incurred and (c) which are eligible for financing under the Loan Agreement(Ln/Cr.) For N.RAJA & ASSOCIATES CHARTERED ACCOUNTANTS Firm Reg. No. 003388S roVt 01 QQ7 . J \ FR N.RAJA Partner Mem.no: 022890 Place: Chennai Date: 05.12.2017 Project Financial Statement Name of the Project 1 Name__of_the_Project_ Providing Water Supply Scheme to Pallavaram Municipality Name of the ULB Pallavaram Municipality Project Implementing Agency Chennai Metropolitan Water Supply And Sewerage Board Name of Division Construction - I, CMWSSB, Chennai (Rs.) in Lakhs Approved Project Cost As per Original AS As per Revised AS Loan from TNUDF 5,997.00 Grant from PSGF 2,999.00 ULB Contribution 999.00 Others (Please Specify) Total 9,995.00 - (Rs.) Upto Current during Upto Sources of Funds FY 2015-16 FY 2016-17 FY 2016-17 Opening Balance - Division - 4,72,91,089 Head Office - Received from ULB 36,15,76,000 25,00,00,000 61,15,76,000 Interest Deposits Others (Please specify) Own Funds 5,42,73,036 - 5,42,73,036 Others - Fine, Interest on Mob. Adv - Total 41,58,49,036 25,00,00,000 66,58,49,036 Application of Funds 1) Payment to Contractors i) Civil Works - Contractors 28,06,56,920 16,35,35,507 44,41,92,427 ii) Civil Works - Mobilisation Adv 5,18,41,412 (2,86,53,519) 2,31,87,893 ii) Income Tax 62,90,861 25,12,535 88,03,396 iii) LWF 31,07,494 19,10,235 50,17,729 iv) WCT 20,49,186 6,03,776 26,52,962 v) Others (Third Party Inspection) 5,33,805 - 5,33,805 vi) Testing Charges 17,69,678 - 17,69,678 2) Transfer of Utilities - - 3) Payment to other departments 1) Road restoration - 5,02,00,000 5,02,00,000 ii) Others (Southern Railways/EB) 6,00,000 22,595 6,22,595 4) Centage & Supervision 1,96,46,000 76,26,602 2,72,72,602 5) Others (Advertisement, Rent, Printing 20,62,591 - 20,62,591 Charges and Materials) Total 36,85,57,947 19,77,57,731 56,63,15,678 Closing Balance - Division - Head Office 4,72,91,089 9,95,33,358 9,95,33,358 This is to certify that the expenditure reported is in agreement with the books of account & incurred following procurement procedures of the International Bank for Reconstruction and Development's General Conditions and all original supporting documents are retained at Internal Audit Section, CMWSSB, Chennai. Auditor 2. Contract-wise Pro ect FiminciA Statement Narie of the Project Providing Water Supply Scheme to Pallavaram Municipality Name of the ULB Pallavaram Municipality Project Implementing Agency Chennai Metropolitan Water Supply And Sewerage Board Name of Division Construction - I, CMWSSB, Chennai (Rs.) Approved Project Cost As per Original AS As per Revised AS Loan from TNUDF 5,997 Grant from PSGF 2,999 ULB Contribution 999 Others (Please Specify) Total 9,995 - __________________________(Rs.) Plan Actual Expenditure * Naee of the work and During the Cumulative for package No. Contractor Dated Value year the Project (2016-17) (up to 2016-17) a b c d e Providing Water Supply Scheme to Palavaam uniipaity- Zne toSattva Engineering Pallavaram Municipality - Zone 4 to Constuction Pvt Ltd 07.12.2013 40,42,33,023 8,82,95,586 22,93,37,788 Zone 8 - Pakage I Providing Water Supply Scheme to Pallavaram Municipality -Zone 9 to Shriram EPC Limited 41,37,03,637 3,13,27,115 14,75,46,340 16 - Pakage II Providing Water Supply Scheme to Palavaam uniipaity- Zne toSattva Engineering Pallavaram Municipality - Zone 1 to Constuction Pvt Ltd 17,08,34,630 1,52,59,287 9,04,96,193 Zone 3- Pakaae III Total 13,48,81,988 46,73,80,321 For N. RA:OCU/ILS CHENNAI 0 6300 017 FRN 003388S 0 AceAuditor 3. Details for otlier payments Name of the Project Providing Water Supply Scheme to Pallavaram Municipality Name of the ULB Pallavaram Municipality Project Implementing Agency Chennai Metropolitan Water Supply And Sewerage Board Name of Division Construction - I, CMWSSB, Chennai (Rs.) Approved Project Cost As per Original AS As per Revised AS Loan from TNUDF 5,997.00 Grant from PSGF 2,999.00 ULB Contribution 999.00 Others (Please Specify) Total 9,995.00 - (Rs) Nature of Expenditure Up to FY 2015-16 During FY 2016-17 Cumulative up to 2016-17 * Third Party Inspection Charges 5,33,805 5,33,805 Testing Charges 17,69,678 17,69,678 Transfer of Utilities 3) Payment to other departments 1) Road restoration 5,02,00,000 5,02,00,000 ii) Others (Railways, LWF) 6,00,000.00 22,595 6,22,595 4) Centage & Supervision 1,96,46,000 76,26,602 2,72,72,602 5) Others (Advertisement, Printing Charges 20,62,591 - 20,62,591 and Travelling Expenses) Total 2,46,12,074 5,78,49,197 8,24,61,271 CHENili i, 1. 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(р � Н N � м О с� м v и сд Providing of Water Supply Selien-ic to Pallavaram Municipality Implemented By Chennai Metropolitan Water Supply and Sewerage Board Notes forming part of project financial statement Lip to FY 2016-17 1) Accounting policies " The Accounts are maintained on cash basis and followed consistently throughout the period. " The contract Running Account Bills are accounted on percentage of completion method and hence accounted under payment basis as per the Accounting Standards. " Since the work under this project is on-going, the same was accounted under Capital Work in progress. 2) Funding SYMC111 " 'rhe Government of Tarnit Nadii (Go'T'N) (vide GO (Ms) No. 12 Municipal Administration and Water Stipply Department dated 28"' January 2013 and GO MS No. I Municipal Administration and Water Supply Department dated 02 nd January 2015 accorded Administrative Sanction (AS) for the project of Providing Water Supply Improvement Scheme (WSIS) to Pallavaram Municipality and the work had been entrusted to Chennai Metropolitan Water Supply arid Sewerage Board to supervise and commission the project. " The total cost of the project as sanctioned by TNUDF is Rs. 99,95,00,000/- and funding pattern is as detailed below: Particulars Rs. Loan from TNUDF under TNUDP 59,97,00,000 Grant from PSGF under TNUDP 29,99,00,000 ULB Contribution 9,99,00,000 Total 99,95,00,000 3) Funds released byTNUDF & PSGFand i-eceivedbyULB: A sum of Rs. 53,06,00,000/- has been disbursed as loan and grant to the ULB up to 31.3.2017 as detailed below Rs. Sno Date Loan Grant Total 1 03.01.2014 3,50,00,000 3,50,00,000 2 08.01.2014 2,3 -),00,000 2,35,00,000 3 09.10.2014 5,00,00,000 5,00,00,000 20.10.2014 2,50,00,000 2,50,00,000 2 14 5 9 1 08.04.2015 5,50,00,000 5,50,00,000 77 .0 00'( 0 _ 0 5 0:: 6 0 77. E9.2 0 15 4,00,00,000 4,00,00,000 L _' L4 xl 29.09.2015 30.UU00 3,00,00-000 Providing of Water Supply Scheme to Pallavaram Municipality Implemented By Chennai Metropolitan Water Supply and Scwerage Board Notes forming part of project financial statement up to FY 2016-17 8 0 4 .0 8 .2 0 1 6 1 0 ,0 0 ,0 0 ,0 0 0 - 1 0 ,0 0 ,0 0 ,0 0 0 9 12.08.2016 - 5,00,00,000 5,00,00,000 10 01.11.2016 6,00,00,00000 6,00,00,000 11 04.11.2016 1,00,00,000 - 1,00,00,000 12 17.11.2016 - 3,00,00,000 3,00,00,000 13 28.03.2017 - 2,21,00,000 2,21,00,000 Total 34,00,00,000 19,06,00,000 53,06,00,000 4) Funds received by CMWSSB fron UTLB CMWSSB has been received an amount of Rs.61,15,76,000/- from the ULB on various dates including ULB contribution of Rs.8,09,76,000/-, as on 31.03.2017. (In Rs.) Sl.No Date Amount 1 11.07.2013 1,00,00,000 2 25.10.2013 2,80,76,000 3 29.10.2013 1,00,00,000 4 02.12.2013 1,00,00,000 5 22.01.2014 5,85,00,000 6 17.10.2014 5,00,00,000 7 16.12.2014 2,50,00,000 8 16.04.2015 5,50,00,000 9 18.09.2015 4,00,00,000 10 14.10.2015 3,00,00,000 11 14.01.2016 4,50,00,000 12 10.08.2016 10,00,00,000 13 22.08.2016 5,00,00,000 14 09.11.2016 7,00,00,000 15 22.11.2016 3,00,00,000 Total 61,15,76,000 5) Payment to contractors a) Mobilization Advance Package I: A sum of Rs.4,00,00,000/- has been given as mobilization advance for this package and an amount of Rs. 3,74,92,855/- has been recovered upto 31.3.2017. Hence, the balance mobilization advance to be recovered as on 31.03.2017 is Rs.25,07,145/-. 2 Providing of Water Supply Scheme to Pallavaram Municipality Implemenited By Cliennai Metropolitan Water Supply and Sewerage Board Notes forming part of project financial statement up to FY 2016-17 Package II: A sum of Rs.4,13,70,363/- has been given as mobilization advance for this package and an amount of Rs. 2,31,76,779/- has been recovered upto 31.3.2017. Hence, the balance mobilization advance to be recovered as on 31.03.2017 is Rs. 1,81,93,584/-. Package III: A sum of Rs.1,70,83,463/- has been given as mobilization advance for this package and an amount of Rs. 1,45,96,298/- has been recovered upto 31.3.2017. Hence, the balance mobilization advance to be recovered as on 31.03.2017 is Rs.24,87,165/-. TDS has been deducted and remitted on such Mobilization advance paid to the contractors. b) Civil works Package I: Work has been completed for Rs.24,99,52,371/-, of which Rs.23,49,55,230/- has been released to the contractor as on 31.03.2017, after retention of Rs.1,49,97,141/-. Package II: Work has been completed for Rs. 15,45,11,863/-, of which Rs.14,52,41,150/- has been released to the contractor as on 31.03.2017, after retention of Rs. 92,70,713/- Package III: Work has been completed for Rs. 9,73,08,652/-, of which Rs. 9,14,70,134/- has been released to the contractor as on 31.03.2017, after retention of Rs. 58,38,518/- 3 Providing of Water Supply Schemc to Pallavaram Municipality Implemented By Chennai Metropolitan Water Supply and Sewerage Board Notes forming part of project financial statement up to FY 2016-17 6) Operation of Bank Accounts All the receipts and payments released to the sub-project are operated through the following account as below: SB A/c No.763844888 - Maintained with Indian Bank, Anna Salai Branch Chennai for receipts and payments. Further, during shortage of funds in this account, funds are being used from the Board's current account and then it is transferred to current account. There is no separate bank account maintained for this scheme, hence Bank Reconciliation Statement has not been verified. Further, TDS payments are made from separate board main account, due to which they do not get reflected in the deposit scheme account. 7) Documents for release of payment a) VOUCHERS All the original vouchers relating to the project for the financial year 2016-17 has been maintained at CMWSSB Chintadaripet, Chennai. The original vouchers are sent to Audit Wing, however the relevant cash book records and copy of the vouchers were produced to audit for verification and found to be in order. The CBPB Book was not produced for the audit, however extracts/copy of Bill summary attached along-with the voucher has been verified. b) Measurement Book (M Book) * The measurements of works completed / in progress are recorded in the M Book(s) and the data were used in preparing the Invoice. * The invoices are certified by the concerned official(s) based on the details in the M Book(s). The M Book (s) is retained at CMWSSB Chennai at project site. * After the invoices are certified by the concerned official(s) at the divisional office, the invoices are sent to the concerned Chief Engineer of the Project for approval for payment. * We were not given the M.Books for verification since they were reportedly kept at the site. 4S! 1F ' T 'C 4 Providing of Water Supply Scheme to Pallavaram Municipality inplenented By Chcnnai Metropolitan Water Supply and Scwerage Board Notes forming part of project financial statement up to FY 2016-17 c) Others a. The project work has been awarded to contractors based on lowest bid quoted by the contractors. Tender process and final award of contract has been finalized by the CMWSSB, Chennai. b. Centage has been charged by the CMWSSB towards the execution of this project through Book Adjustment Entry. Centage vouchers have not been produced for audit, however the calculation of Centage was provided for verification. Centage has been charged in PFS based on the calculation. Journal Vouchers have not been passed for the financial year 2016-17 by the CMWSSB and the same has not been paid to board account. 8) Progress Report (Rs.) Sno Particulars Contract Completed Value up to 31.03.17 1. WSIS Scheme- Civil Package-I 40,42,33,023 22,93,37,788 Package-II 41,37,03,637 14,75,46,340 Package-IlI 17,08,34,630 9,04,96,192 2 IT,LWF,WCT 1,64,74,087 3 Third Party Inspection, 23,03,483 Testing 4 Railways, Road Restoration, 5,08,22,595 TNEB 5 Centage & Supervision 2,72,72,602 Others (Advertisement, Rent, Printing Charges and 20,62,591 Materials) Total 56,63,15,678 5 Providing of Water Supply Scheme to Pallavaram Municipality imp)lcented By Chennai Metropolitan Water Supply and Sewerage Board Notes forming part of project financial statement up to FY 2016-17 Gross Valuc of Works Completed as on 31.03.2017 Package Total Gross Value of Percentage Contract Work comipleted to Total Value as on 31.03.2017 Valuc (Rs in Crores) (Rs in Crores) Package-1 40.42 25.00 61.85% Package-II 41.37 15.45 37.35% Package-III 17.08 9.73 56.97% 9) Payments as on 31.03.2017 Amount in Rs. Package Prior to 01.05.2014 03.06.2015 01.04.2016 Total 01.05.2014 to to to 02.06.2015 31.03.2016 31.03.2017 Mob.Adv 9,84,53,826 - - 9,84,53,826 Cont.Payment 88,21,483 16,01,41,760 6,70,50,340 13,48,81,988 37,08,95,571 Income Tax 2,08,285 30,43,576 .1 10,69,923 25,12,535 68,34,319 WCT 6,12,603 14,36,583 - 6,03,776 26,52,962 LWF 36,756 21,97,402 8,73,336 19,10,235 50,17,729 Third Party - 8,12,899 14,90,584 23,03,483 Testing Railways, - - 6,00,000 5,02,22,595 5,08,22,595 Road Restoration Centage - 1,28,68,000 67,78,000 76,26,602 2,72,72,602 Others 20,62,591 - - 20,62,591 TOTAL 11,01,95,544 18,05,00,220 7,78,62,183 19,77,57,731 56,63,15,678 F 6 E.-D)~ 28 1,5)) Panmal -WSIS AUDIT REPORT INTRODUCTION We have audited the accompanying project financial statements relating to the project financed by sub loans/sub grants components of the Tamil Nadu Urban Development Project (TNSUDP) financed under World Bank Credit / Loan No. 8488 IN as of March 31, 2017. Our responsibility is to express an opinion on these financial statements based on our audit. SCOPE We conducted our audit in accordance with established national standards on Auditing issued by ICAI. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimated made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. OPINION In our opinion, the project financial statements (Sources and uses of funds) give a true and fair view of the project financed by sub loans/ sub grants from TNSUDP and contribution from the ULB for the year ended March 31, 2017 and provide us with a sound basis to state that the (a) funds have been used for the purposes, intended in accordance with the Legal Agreements and procurement guidelines of the World Bank, (b) adequate supporting documentation has been maintained to support expenditures incurred and (c) which are eligible for financing under the Loan Agreement(Ln/Cr.) For N.RAJA & ASSOCIATES CHARTERED ACCOUNTANTS Firm Reg, No. 003388S 1 , \. N.RAJA Partner Mem.no: 022890 Place: Chennai Date: 05.12.2017 Project Financial Statement Name of the Project Water Supply Scheme to Pammal Municipality Name of the ULB Pammal Municipality Project Implementing Agency Chennai Metropolitan Water Supply And Sewerage Board Name of Division Construction - I, CMWSSB, Chennai (Rs.) in Lakhs Approved Project Cost As per Original AS As per Revised AS Loan from TNUDF 2,586 Grant from PSGF 1,293 ULB Contribution 431 Public Deposit _ Others (Please Specify) Total 4,310 (Rs.) Upto Current during Upto Sources of Funds FY 2015-16 FY 2016-17 FY 2016-17 Opening Balance - Division - 1,38,69,186 Head Office 1,38,69,186_- Received from ULB 17,50,00,000 13,00,00,000 30,50,00,000 interest Deposits Others (Please specify) Own Funds 2,71,12,681 2,71,12,681 Others - Fine, Interest on Mob. Adv - - Total 20,21,12,681 13,00,00,000 33,21,12,681 Application of Funds 1) Payment to Contractors i) Civil Works - Contractors 15,14,12,413 7,23,78,132 22,37,90,545 ii) Civil Works - Mobilisation Adv 2,05,24,492 (1,38,77,498) 66,46,994 ii) Income Tax 12,81,867 4,28,994 17,10,861 iii) LWF 16,58,156 9,25,167 25,83,322 iv) WCT 18,18,046 12,61,747 30,79,793 v) Others (Third Party Inspection) 2,08,752 - 2,08,752 vi) Testing Charges - . 2) Transfer of Utilities - 3) Payment to other departments 1) Road restoration - 2,27,00,000 2,27,00,000 ii) Others (Southern Railways/EB) - . 4) Centage & Supervision 1,03,90,000 41,58,958 1,45,48,958 5) Others (Advertisement, Rent, Printing 9,49,769 - 9,49,769 Charges and Materials) Total 18,82,43,495 8,79,75,499 27,62,18,994 Closing Balance - Division - Head Office 1,38,69,186 5,58,93,687 5,58,93,687 This is to certify that the expenditure reported is in agreement with the books of account & incurred following procurement procedures of the International Bank for Reconstruction and Development's Gonoral Conditions and all original supporting documeii[s are retained at Internal Audit Section, CM SVVS1, Chennai. 1 Auditor 2. Contract-wise Pro ect Financial Statement Name of the Project Providing Water Supply Scheme to Pammal Municipality Name of the ULB Pammal Municipality Project Implementing Agency Chennai Metropolitan Water Supply And Sewerage Board Name of Division Construction - I, CMWSSB, Chennai (Rs.) in Lakhs Approved Project Cost As per Original AS As per Revised AS Loan from TNUDF 2,586 Grant from PSGF 1,293 ULB Contribution 431 Others (Please Specify) . Total 4,310 - (Rs.) Plan Actual Expenditure * Name of the work andName of te Contract During the Cumulative for package No. Agreement Dated Value year the Project (2016-17) (up to 2016-17) a b c d e Providing Water Supply Scheme to Shriram EPC Limited 07.10.2013 45,39,68,295 5,85,00,634 23,04,37,539 Pammal Municipality - Package I Total 45,39,68,295 5,85,00,634 23,04,37,539 Auditor 3. Details for other payments Name of the Project Providing Water Supply Scheme to Pammal Municipality Name of the ULB Pammal Municipality Project Implementing Agency Chennai Metropolitan Water Supply And Sewerage Board Name of Division Construction - I, CMWSSB, Chennai (Rs.) in Lakhs Approved Project Cost As per Original AS As per Revised AS Loan from TNUDF 2,586 Grant from PSGF 1,293 ULB Contribution 431 Others (Please Specify) Total 4,310 - (Rs) Nature of Expenditure During Cumulative up FY 2016-17 to 2016-17 * 1)Third Party Inspection Charges 2,08,752 2,08,752 2)Testing Charges . . 3)Transfer of Utilities . 4) Payment to other departments 1) Road restoration - 2,27,00,000 2,27,00,000 ii) Others (Railways) . 5) Centage & Supervision 1,03,90,000 41,58,958 1,45,48,958 6) Others (Advertisement, Printing Charges 9,49,769 - 9,49,769 and Travelling Expenses) 9,49,769_-_9,49,76 Total 1,15,48,521 2,68,58,958 3,84,07,479 Auditor -о с� с� о _- _ � сб �N о0 N � - д' - - а � . .- ., � . i 0.'] СО (С1 г N - С �:.1 00 CD .i . 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ОО и о ц� г- сз� �t - ti о, со � а� г- rn v i•� � v сд и � го гv ui г-i � г`. с� N т гv - � i,.� ао � т м' и � , г... е, и оо и .а :=� < r:, cn м и r) .- i,.� , . г) С;э . м о ш � .., `.3, : `ю ° с° т ц� и О r - . ._, С�� .- цj т � � - . ,� и � С'") о и r- _- и и "� � т о� г- r') й и и м (`! о аэ rn °'Г - сд �`+ °� м .Г оо гi пi - сд N (°_ о ri - с� о) �r м � со r.i ,�� о� c�i -- (л м. r м , �n о с� с� � � м "� � N и си � ш т м и v и � и и о � r � о N r� � Q �- Г Q г• Г� � т й F. с� � v со � п°�i � 0 м Э` с� N и со Е- �, с� с� м � и со Providing of Water Supply Scheme to Pammal Municipality linplenicnted by Chennai Metropolitan Water Supply and Sewerage Board Notes forming part of project financial statement up to FY 2016-17 1) Accounting policies The Accounts are maintained on cash basis and followed consistently throughout the period. The contract Running Account Bills are accounted on percentage of completion method and hence accounted under payment basis as per the Accounting Standards. Since the work under this project is on-going, the same was accounted Linder Capital Work in progress. 2) Funding System " The Government of Tanill Nadu (GoTN) (vide GO (Ms) No. 12 Municipal Administration and WaLer Supply Department dated 2 8th JanUary 2013 and GO MS No. I Municipal Administration and Water Supply Department dated 02'd January 2015 accorded Administrative Sanction (AS) for the project of Providing Water Supply Improvement Scheme (WSIS) to Pammal Municipality and the work had been entrusted to Chennai Metropolitan Water Supply and Sewerage Board(CMWSSB) to supervise and commission the project. " The total cost of the project as sanctioned by TNUDF is Rs. 43,10,00,000/- and funding pattern is as detailed below: Particulars Rs. Loan from TNUDF under TNUDP 25,86,00,000 Grant from PSGF 12,93,00,000 ULB Contribution 4,31,00,000 Total 43,10,00,000 3) Funds released by TNUDF & PSGF and received by ULB: A sum of Rs. 26,71,00,000/- has been disbursed as loan and grant to the ULB up to 31.3.2017 as detailed below: (Amount in Rs.) Sno Date Loan Grant T otal 1- 12.12.2013 4,53,00,000 4,53,00,000 2 08.04.2015 4,00,00,000 4,00,00,000 3 07.09.2015 4,50,00,000 4,50,00,000 4 17.08.2016 6,00,00,000 3,00,00,000 9,00,00,000 5 21.11.2016 3,00,00,000 1,00,00,000 4,00,00,000 28.03.2017 68,00,000 68,00,000 Total 17,50,00,000 9,21,00,000 26,71,00,000 Providing of Water Supply Scheme to Pamumal Municipality Implemented by Chennai Metropolitan Water Supply and Sewerage Board Notes forming part of project financial statement up to FY 2016-17 4) Funds received by CMWSSB from ULB A sum of Rs.30,50,00,000/- has been received from the ULB up to 31.3.2017 including ULB contribution as detailed below: (In Rs.) Sno Date Amount 1 07.06.2013 1,00,00,000 2 29.10.2013 1,00,00,000 3 08.11.2013 1,00,00,000 4 23.12.2013 3,00,00,000 5 01.07.2014 2,00,00,000 6 28.01.2015 1,00,00,000 7 17.04.2015 3,00,00,000 8 10.07.2015 1,00,00,000 9 18.09.2015 4,50,00,000 10 24.08.2016 9,00,00,000 11 24.11.2016 4,00,00,000 Total 30,50,00,000 5) Payment to contractors a) Mobilization Advance A sum of Rs.4,53,96,829/- has been given as mobilization advance for the project and an amount of Rs. 3,87,49,835/- has been recovered upto 31.3.2017. Hence, the balance mobilization advance to be recovered remains at Rs. 66,46,994/- as on 31.3.2017. On Mobilization advance TDS has been deducted and remitted into bank. b) Civil works Work has been done for Rs.25,83,32,235/-, of which Rs.24,31,36,137/- has been released to the contractor as on 31.03.2017, after regular retention of Rs.1,51,96,098/-. 2 Providing of Water Supply Schemc to Pammal Municipality Implemented by Chennai Metropolitan Water Supply and Sewerage Board Notes forming part of project financial statement up to FY 2016-17 6) Operation ol Hank Accounts All the receipts and payments released to the sub-project are operated through the following account as below: SB A/c No.763844888 - Maintained with Indian Bank, Anna Salai Branch Chennai for receipts and payments. Further, during shortage of funds in this account, funds are being used from the Board's current account and then it is transferred to current account. There is no separate bank account maintained for this scheme project, hence Bank Reconciliation Statement has not been verified. Further, TDS payments are made from separate board main account, due to which they do not get reflected in the deposit scheme account. 7) Documents for release of payment a) VOUCHERS All the original vouchers relating to the project for the financial year 2016-17 has been maintained at CMWSSB Chintadaripet, Chennai. The original vouchers are sent to Audit Wing, however the relevant cash book records and copy of the vouchers were produced to audit for verification and found to be in order. The CBPB Book was not produced for the audit, however extracts/copy of Bill summary attached along-with the vouchers have been verified. b) Measurement Book (M Book) * The measurements of works completed / in progress are recorded in the M Book(s) and the data were used in preparing the Invoice. * The invoices are certified by the concerned official(s) based on the details in the M Book(s). The M Book (s) are retained at CMWSSB Chennai at project site. * After the invoices are certified by the concerned official(s) at the divisional office, the invoices are sent to the concerned Chief Engineer of the Project for approval for payment. * We were not given the M.Books for verification since they were kept at the project site. 3 Providing of Water Supply Scheme to Pammal Municipality Implemented by Chennai Metropolitan Water Supply and Scwerage Board Notes forming part of project financial statement up lo FY 2016-17 c) Others a. The project work has been awarded to Shriram EPC Limited. The contract has been finalized based on lowest bid quoted by the contractors. b. Centage has been charged by the CMWSSB towards the execution of this project through Book Adjustment Entry. Centage vouchers have not been produced for audit, however the calculation of Centage was provided for verification. Centage has been charged in PFS based on the calculation. Journal Vouchers have not been passed for the financial year 2016-17 by the CMWSSB and the same has not been paid to board account. 8) Progress Report (Rs.) Sno Particulars Contract Completed Value up to 31.03.17 1. WSIS Scheme Package- Civil 43,10,00,000 23,04,37,539 IT, LWF, WCT 73,73,976 Third Party Inspection 2,08,752 Road Restoration 2,27,00,000 Centage & Supervision -_1,45,48,958 Others (Advertisement, Rent, Printing Charges and 9,49,769 Materials) Total 43,10,00,000 27,62,18,994 Gross Value of Works Completed as on 31.03.2017 Package Total Gross Value of Percentage Contract Work completed to Total Value as on 31.03.2017 Value (Rs in Crores) (Rs in Crores) Package-I 45.40 25.83 56.89 4!i. 4 Providing of Water Supply Schene to Pammal Municipality Inplemented by Chennai Metropolitan Water Supply and Sewerage Board Notes forming part of project financial statement up to FY 2016-17 9) Pay ments as on 31.03.2017 Anount in Rs. Package Prior to 01.05.2014 to 03.06.2015 01.04.2016 to Total 01.05.2014 02.06.2015 to 31.03.2017 31.03.2016 Mob.Adv 4,53,96,829 - ¯-- 4,53,96,829 Cont.Payment 18,66,240 8,12,36,820 4,34,37,015 5,85,00,634 18,50,40,709 Income Tax 44,064 8,87,315 3,50,489 4,28,993 17,10,861 WCT 1,29,600 16,88,446 - 12,61,747 30,79,793 LWF 7,776 10,92,897 5,57,483 9,25,167 25,83,323 Road - - - 2,27,00,000 2,27,00,000 Restoration Centage - 5764000 4,62,6000 41,58,958 1,45,48,958 Others 9,49,769 54,152 1,54,600 - 11,58,521 TOTAL 4,83,94,278 9,07,23,630 4,91,25,587 8,79,75,499 27,62,18,994 5-CHN G 1. a e k A c -o i -J4 'L F, 1 1 1 .2 IjI 1. 11oii Iom Theni -WSIS AUDIT REPORT INTRODUCTION We have audited the accompanying project financial statements relating to the project financed by sub loans/sub grants components of the Tamil Nadu Urban Development Project (TNSUDP) financed under World Bank Credit / Loan No. 8488 IN as of March 31, 2017. Our responsibility is to express an opinion on these financial statements based on our audit. SCOPE We conducted our audit in accordance with established national standards on Auditing issued by ICAI. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit aiso includes assessing the accounting principles used and significant estimated made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. OPINION In our opinion, the project financial statements (Sources and uses of funds) give a true and fair view of the project financed by sub loans/ sub grants from TNSUDP and contribution from the ULB for the year ended March 31, 2017 arid provide us with a sound basis to state that the (a) funds have been used for the purposes, intended in accordance with the Legal Agreements and procurement guidelines of the World Bank, (b) adequate supporting documentation has been maintained to support expenditures incurred and (c) which are eligible for financing under the Loan Agreement(Ln/Cr.) For N.RA]A & ASSOCIATES CHARTERED ACCOUNTANTS Firm Reg. No. 003388S 1 1 N. RAJA Partner Mem.no: 022890 Place: Chennai Date: 05.12.2017 Project Financial Statement Name of the Project Water Supply Improvement Scheme to Theni Allinagaram Name of the ULB Theni Allinagaram Municipality Project Implementing Agency TWAD Board Name of Division RWS Division , Theni Amount in Rs. Approved project cost As per Original AS As per Revised AS Loan from TNUDF 41,30,00,000 41,30,00,000 Grant from PSGF 20,65,00,000 20,65,00,000 ULB Contribution 6,88,00,000 6,88,00,000 Others 68,83,00,000 68,83,00,000 Amount in Rs. Upto FY Current during Upto Sources of Funds 2015-16 FY 2016-17 FY 2016-17 Opening Balance - Division - 43,155 Head Office - Received from ULB 28,96,16,933 16,42,00,000 45,38,16,933 Bank Interest _ - Total 28,96,16,933 16,42,00,000 45,38,16,933 Application of Funds 1) Payment to Contractors 1) Civil Works 24,67,72,827 13,59,91,616 38,27,64,443 Ill) Income Tax 52,78,892 33,33,674 86,12,566 IV) WCT 52,78,892 33,33,675 86,12,566 V) LWF 26,39,444 16,66,835 43,06,279 2) Transfer of Utilities - 3) Payment to other departments 1) Highways 1,42,62,292 1,09,898 1,43,72,190 ii) TNEB Payments - 41,28,561 41,28,561 4) Centage & Supervision 1,32,09,831 80,40,157 2,12,49,988 5) Others (Advertisement, Printing Charges and Travelling Expenses) 21,31,600 2,57,894 23,89,494 Total 28,95,73,778 15,68,62,310 44,64,36,087 Closing Balance - Division - Head Office 43,155 73,80,846 73,80,846 This is to certify that the expenditure reported is in agreement with the books of account & incurred following procurement procedures of the International Bank for Reconstruction and Development's General Conditions and all supporting documents are retained at Internal Audit Wing, CE's Office, Madurai Region of TWAD. Auditor 2. (:oni rae[-wise Proi. Fnje .-inmu-i i e itemen L Name of the Projec_t - Water SupplV Improvement Scheme to Theni Allinagaram Municipaity Name of the ULB Theni Allinagaram Municipality Project Implementing Agency TWAD Board Name of Division RS Division , Theni i_ Amount in Rs. Approved proiecl cost As per Original AS As per Revised AS Loan from TNUDF 41,30,00,000 41,30,00,000 Grant from PSGF 20,65,00,000 20,65,00,000 ULB Contribution 6,88,00,000 6,88,00,000 Others 68,83,00,000 68,83,00,000 Amount in Rs. Plan Actual Expenditure Name of the work and WB Ref. Cumulative for the Name of the During the year package No. Agreement Dated Contract Value No. Project Contractor coutractor (2016-17) (up to 2016-17 b d e Package 1: RCIdenfrastructure Ltd, 1303.2014 16,16,92,634 1,17,86,113 8,04,44,469 P-ýik-a-6 e2 i RCM derastuurdLd Package 2: RCMnHderaastructure Ltd 13.03.2014 42,18,91,420 12,42,05,502 30,23,19,974 Total 13,59,91,616 38,27,64,443 '00 017 Auditof\ 3. Details for other payments Name of the Project Water Supply Improvement Scheme to Theni Allinagaram Name of the ULB Theni Allinagaram Municipality Project Implementing Agency TWAD Board Name of Division RWS Division , Theni Amount in Rs. Approved project cost As per Original AS As per Revised AS Loan from TNUDF 41,30,00,000 41,30,00,000 Grant from PSGF 20,65,00,000 20,65,00,000 ULB Contribution 6,88,00,000 6,88,00,000 Others 68,83,00,000 68,83,00,000 Amount in Rs. Nature of Expenditure Upto 31.03.2016 During Cumulative up FY 2016-17 to 2016-17 Third Party Inspection Charges Transfer of Utilities -_-_- 3) Payment to other departments 1) Highways 1,42,62,292 1,09,898 1,43,72,190 ii) EB 41,28,561 41,28,561 4) Centage & Supervision 1,32,09,831 80,40,157 2,12,49,988 5) Others (Advertisement, Printing Charqes and Travellinq Expenses) Total 2,96,03,723 1,25,36,510 4,21,40,233 ), I I A s:''W, Auditor rII: , I�1 ��б -г V r о cv � о.. �.. � .. �: � и м ш и � м mi ' о � � б ги ] г� и cV г�1 о гn �� о и �� м д � .,� -- __ � б ei т � cv ш со о и и !; и и г- и г� -г ��� �- -� �t о � ui cv и v о и с� г- ro сп м о � � v �� � _ гп f� гд �гi и г• о со и v �- го �� � -i са о v ¢ - �f � ы- f❑ ш (О N V N N N 1� � Г� пх [О ��� �7 . = п О СО и 1� с0 и f� � о м [^ N � � б � Г �\ � � ��i;�� i - 'i v' а� i- о со и со v �� о т�cn т �" Г м . и т со и I� п ' о о и t� I� � � м - м м и г` м с� �.� т � �� � г� г•i ш_ . 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'* О � с О О о _ J,�, V и � н _ и ID О N N � ,ь .и 1' �_ Q Q� � S� 'О N N д' .. -/�, в С � у�., С Q '`"'I 00 ^ � Q � :� о � са � 5 cU N � � '1 _ . an � Е� Е-� Г� -t � _ о �, � �' . � � . -- ш у � bл � "' а. � > > С v � � � `л � `n �С и t с° � С � (� � � а -О г6 � � гр ср Г ср Г са � сО Г �' 'О N, �' _ G •.-. �j Q Q � О � Q. � � � N � о � � сС � ' о � ш О � `" д s� dS N� д3 oZ3 cci �XS о �ZS N �KS �- c�i Г О С, � . .-а �. N О � _ О О й �О "о L о� Г L L о ч.. �, д, � � U � � - �� ��ciNм v°�йГсос� � `n о•� �� ��_ о � � � n с� о с� = � у � Г� ;l У ;� �° 4-. ' 4. � 4- 4. °' � � о о о �Л о � � - -- � �'" ш ш� у cci а� - � .- L � � � �.�G � � - � с� � с� т v с� т v и со о ��'о � � � о о и М U �% 0.. / С-'. % U � т м о со и сд r со и N v со � о т � и и со м о о г� с� ,л о v оо ti � cv cv г� и т со о �ri ai �л о �- v�ri ri ,� ai v о - cv о� и м т м со о со оо v v v м v м о со N м г� и со г� м � о сд � со � с� � N N N N (�J О i 1�'! '•1 � �..- ^ и п � ш с� ш и г` о� � ° оо Г со � со с� о ti и � с� � о т т со м о и со и со � N г� г� v �- и и м � сд ^�� й N `Г м cv и т со с� м v r � ш о со и r оо т о ш и м и о �t си N и � с� Г с� � ----- � о Ш � �' С О о i i С � U Ф 'л гсо � = > :д � о � � � а г _л � г' � О т т т _ � � 7 Ш С F- О с0 О С лУ 3 ш ш � й � а � р С U Q � >., �С У � � Q С О � и � р 3 т � и U о С > о io �[о �� о ри а а � и � � С7 � и ti � с �� � N о о о со oU ,�° о о о ` -о о= л о о С о о о о т ш с лоо с� � v о о о � � �•° �о о й С й и и� о т г� n г� � й и �� Ш� с 's�-�о � г р 3 � с и г') о о Q � � V и � L О (� N ro � � т U С� т С ш � � О � � о - Е а � V �' о- (D Т � � � с � ❑ � -J С С р- (0 О� т N О О�- О �S рр � � ш а� Е и U � � о й О й 3 а� aj а '> о� � ro = с� F- о Z > -° т :° � о о��, о т о � У ш � о � �а � С ��'� Ш� U� С � О о О О С N М V И(О f� мU ZZn_QZdZU " и Design, Build and Operate Tertiary Treatment Reverse Osmosis Plant Implemented By Chennai Metropolitan Water Supply and Sewerage Board Notes form I iig part o I' pro* cc I 1-Inaric I a I SLItC11 I ell I LIP to UY 2016-17 1) Accounting policies " The Accounts arc maintained on cash basis and followed consistently throughout the period. " The contract Running Account Bills are accounted on percentage of completion method and hence accounted under payment basis as per the Accounting Standards. " Since the work under this project is on-going, the same was accounted under Capital Work in progress. 2) Funding System " The Government ofTamil Nadu (GoTN) (vide GO MS No. I Municipal Administratiori and Water Supply Department dated 02`1 JanUary 2015 accorded Administrative Sanction (AS) for the project of Design, Build and Operate 45MLD Capacity "Tertiary Treatment Reverse Osmosis Plant at Kodungalyur and the work had been entrusted to Chermal Metropolitan Water Supply and Sewerage Board to supervise and commission the project. " The total cost of* the project as sanctioned by TNUDF is Rs. 255 Crores and funding pattern is as detailed below: Particulars Rs in Crores Loan from TNUDF under TNUDP 153.00 Grant from PSGF tinder TNUDP 76.50 ULB Contribution 25.50 Others - Total 255.00 3) Funds released by TNUDF & PSGF and received by ULB: A sum of Rs. 10,39,00,000/- has been disbursed as grant to CMWSSB up to 31.3.2017 as detailed below; Amount in Rs, Sno Date Loan Gran Total 1 08.03.2017 10,39,00.,000 10,39,00,000 Total _10,39,00,000 10,39,00,000 Design, Build and Operate Tertiary Treatment Rcycrse Osmosis Plant implemented By Chennai Metropolitan Water Supply and Scwerage Board Notes forming part of project financial statement up to FY 2016-17 4) Funds received by CMWSSB A sum of Rs.10,39,00,000/- has been received as capital grant from Project Sustainability Grant Fund as on 3 1.03.2017. (Ii Rs.) Sl.No Date Amount 1 13.03.2017 10,39,00,000 Total 10,39,00,000 5) Payment to contractors a) Mobilization Advance Packag e I: A sum of Rs.10,30,00,000/- has been given as mobilization advance Ior this package. Total mobilization advance sanctioned is Rs. 11,75,00,000, however due to insufficient fund available in this scheme Rs.1,21,50,000/- has been withheld and paid subsequently. TDS has been deducted and remitted on such Mobilization advance paid to the contractors. b) Contract Payment Package I: No payments have been made during the current financial year 2016-17. 6) Operation of Bank Accounts All the receipts and payments released to the sub-project are operated through the following account as below: Current Account No.000105030587 - Maintained with ICICI Bank, Cenotaph Branch Chennai with effect from 01.03.2017 for receipts and payments. Further, initial consultation charges and other payments have been made from the Board's current account (main account) Balance as on 31.03.2017 is Rs.9,889/-. Further, TDS payments are made from board main account, due to which they do not get reflected in the deposit scheme account. Design, Build and Operate Tertiary Treatment Reverse Osmosis Plant Inplemented By Chennai Metropolitan Water Supply and Sewerage Board Notes forming part of project financial statement up to FY 2016-17 7) Documents for release ofpaymeint a) VOUCHERS All the original vouchers relating to the project for the financial year 2016-17 has been maintained at CMWSSB Chintadaripet, Chennai. The original vouchers are sent to Audit Wing, however the relevant cash book records and copy of the vouchers were produced to audit for verification and found to be in order. The CBPB Book was not produced for the audit, however extracts/copy of Bill summary attached along-with the vouchers have been verified. b) Measurement Book (M Book) * The measurements of works completed / in progress are recorded in the M Book(s) and the data were used in preparing the Invoice. * The invoices are certified by the concerned official(s) based on the details in the M Book(s). The M Book (s) is retained at CMWSSB Chennai at project site(Kodungaiyur) * After the invoices are certified by the concerned official(s) at the divisional office, the invoices are sent to the concerned Chief Engineer of the Proj ect for approval for payment. * We were not given the M.Books for verification since they were kept at the project site. c) Others a. The project work has been awarded to contractors based on lowest bid quoted by the contractors. Tender process and final award of contract has been finalized by the CMWSSB, Chennai. b. The project was commenced during the current financial year and mobilization advance has been paid during the current financial year 2016-17. c. There are other expenses which were incurred during the initial stages from the financial year 2014-15. d. These expenses are considered as per the certified SOE from the TTRO Unit. The previous year expenditures are also incorporated in the PFS under other Expenses. 3 )esign, Build and Operate Tertiary Trcatment Reverse Osmosis Plant Implemented By Chennai Metropolitan Water Supply and Sewerage Board Notes forming part ol'project 11nancial statement up to FY 2016-17 8) Progress Report ____ ___ ___ ___ ____ ___ (RS-) Sno Particulars Contract Value Completed up to 31.03.17 1. TTRO Plant Mobilization Advance 235,00,00,006 10,30,00,000 2 Income Tax 24,25,550 3 PMC Payment 8,90,111 4 Others(Advertisement, CRZ Clearance, Design Charges) 66,90,884 - Total 11,30,06,545 9) Payment Details Amount in Rs. Particulars Prior to 01.05.2014 03.06.2015 01.04.2016 Total 01.05.2014 to to to 3 1.03.2017 02.06.2015 31.03.2016 Contact Payment _ - 10,30,00,000 10,30,00,000 PMC Payment - 8,90,111 8,90,111 Income Tax 24,25,550 24,25,550 Others(Advertise - ment, CRZ Clearance, Design 4,27,500 42,15,000 20,48,384 66,90,884 Charges) TOTAL- 4,27,500 42,15,000 10,83,64,045 11,30,06,545 4 - ос 9 д т,, и с С v � �5 W � �о � � �' � � ii и и � � и сп � � � � д i ы�, с к СС � G `� � �1 с � ° - - Г v Q у М г и У р С _ о � и о� ш .� W � и о '° i -т оС и к� ш й и а ' �v ` � -r со G � F а � а и га v и V с ь. w v. 9 н д � т О б� г� О� С И ^ �� � � ^ `� v и �.., д w и^у' сыi о V � С, и СС �0. ш � п и ы � G � М W Ё >. � "' � д `а д \ 0[ � - •. о `о '° `�' _ о т � 9 0.и1 О� д гi � о � й п.! = о� L „ � : v - v � ' V � О ^ °о с °о о ° у д� а^ о ti о о х v. „ `п е о ы а и р�'+ 0. о �м � ^ °' О р� Т м о о � U F-� с� е У ^ м � м �� о � � ы °• -� д Со ° ^ � и м ч°. о а � �: р, о = п с ы о Е,ы�д�'� О ш о.пм � и •� " 'с "r � м гп � � U r � ш � д _ О Й N� U '� �' aOt� о о- • ° > S А С^ ,--• 1 R И w � %� и Г и a�i � = т � м � с W ,.] � � д И � .'7 � ы д v � � ы и;: а � ы � о � ^ _ о х v н w W _ ..ы. о ,-� °� �- � О � � р ы а � � + � г � д�' � д� F n=� х ы С С С � W м i) � � N и N Е? 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