Off: +91-40-6661 7089 NG RAO & ASSOCIATES+91-40-4240 8813 Mobile: 98480 18791 CHARTERED ACCOUNTANTS 98491 35573 Independent Auditor's Report To The Chief Executive Officer, Society for Elimination of Rural Poverty (SERP), 2nd Floor, NTR Administrative Block, P N Bus Station, Vijayawada, Andhra Pradesh. Report on the Audit of the Project Financial Statements Opinion We have audited the accompanying special purpose financial statements of ANDHRA PRADESH RURAL INCLUSIVE GROWTH PROJECT (APRIGP) (World Bank) Program/scheme of Society for Elimination of Rural Poverty (SERP) (the Project) financed by the International Development Association (IDA) under Credit Number IN-5576 and implemented by Society for Elimination of Rural Poverty (SERP) These financial statements comprise of the Income and Expenditure, Receipts and Payments and Balance Sheet to these financial statements, including a summary of significant accounting policies (collectively referred to as the "Project Financial Statements"). In our opinion, the aforesaid special purpose Project Financial Statements give a true and fair view of the Income and expenditure statement, Receipts and Payments of the Project for the year ended on March 31, 2019 and the expenditure of the Project for the year ended on March 31, 2019, in accordance with the financial reporting provisions of Section 5.09 of the General Conditions of the World Bank read with the Financing Agreement and Project Agreement both dated 16-11-2015. Opinion We conducted our audit in accordance with the Standards on Auditing issued by Institute of Chartered Accountants of India (ICAI). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the implementing agency in accordance with the ICAI's Code of Ethics for undertaking this assignment, and we have fulfilled our ethical responsibilities in accordance with ICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. SOC H.No. 6-3-1186/A/6, (New No. 325), D.No. 39-16-4B/S H.No. 8-22-5/1, FF3 5, Ashok Nagar, 2nd Floor, Chinna Balreddy Building, Garuda Hotel Lane, Neeladri Towers, Pattabi Street, andrapuram, Adjacent Lane to ITC Kakatiya Hotel, Labbipet, Gandhi Nagar, Medak District, Begumpet, Hyderabad-500 016. Vijayawada - 520 010. Kakinada - 533 004. Hyderabad - 502032 Email nageswararaog207@gmail.com I nageswararaog@rediffmail.com NG RAO & ASSOCIATES CONTINUATION SHEET Emphasis of Matter The Society for Elimination of Rural Poverty (SERP) is following the Cash Basis to meet the financial reporting requirements of the Project's Financing Agreements for Investment Project Financing dated 16.11.2015 in respect of preparation of the Project Financial Statements in a manner to reflect the operations, resources and expenditures related to the Project. As a result, these special purpose financial statements may not be suitable for another purpose. Our opinion is not modified in respect of this matter. Responsibilities of Management and those charged with Governance for the Project Financial Statements The Management of the implementing agency is responsible for the preparation and fair presentation of the Project Financial Statements in accordance with general purpose, and for such internal control as management determines is necessary to enable the preparation of Project Financial Statements that are free from material misstatement, whether due to fraud or error. The Management and those charged with governance are responsible for overseeing the implementing agency's financial reporting process. Auditor's Responsibilities for the Audit of the Project Financial Statements Our objectives are to obtain reasonable assurance about whether the Project Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the Standards of Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Standard of Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: o Sc C-1, N G RAO & ASSOCIATES CONTINUATION SHEET * Identify and assess the risks of material misstatement of the Project Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. * Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. * Evaluate the overall presentation, structure and content of the Project Financial Statements, including the disclosures and whether these financial statements present the Project's operations and underlying transactions and events in a manner that achieves fair presentation of the Project Financial Statements. * Communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. * Provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. Other Matter The implementing agency Society for Elimination of Rural Poverty (SERP) has prepared a separate set of entity financial statements for the year ended March 31, 2019 on which we N G Rao & Associates Chartered Accountants have issued a same auditor's report to the Governing Body dated 04.02.2020 and expressed an unmodified audit opinion. vo ED? N G RAO & ASSOCIATES CONTINUATION SHEET Report on Other Legal and Regulatory Requirements: Further to our opinion on the Project Financial Statements we further report that: a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; b) In our opinion, proper books of accounts have been kept by the implementing agency for Project purposes so far as appears from our examination of those books; c) The Project Financial Statements dealt with by this report is in agreement with the books of accounts; d) The Project funds were utilized for the purposes for which they were provided; e) Expenditures, including assets created under the Project, shown in the PFS are eligible for financing under the Project Financing Agreements; f) Interim Financial Reports (IFR) submitted by the Project management can be relied upon to support applications for withdrawal of the Loan, and adequate supporting documentation has been maintained to support these claims; g) Procurement has been carried out in line with the agreed procedures as detailed in the Operations Manual/Procurement Manual/Project Implementation Plan/Legal Agreements; and h) The Project has an adequate internal financial control system (including IT controls) and such controls were operating effectively as at March 31, 2019 and the Project complies with the provisions on financial management contained in the Operations Manual/ Project Implementation Plan/ Financial Management Manual, in all material aspects. For N G Rao & Associates Chartered Acc n Firm's Registration No 399 (CA. G. N ges Membership No: 207300 Place: Vijayawada Date: 04.02.2020 UDIN: 20207300AAAACM9437 Society for Elimination of Rural Poverty :: AP ANDHRA PRADESH RURAL INCLUSIVE GROWTH PROJECT (APRIGP) (WORLD BANK) FUND Receipts and Payments Statement for the period from 01.04.2018 to 31.03.2019 Receipts Amount (Rs) Payments Amount (Rs) Opening Balance Bank Balances LIVELIHOODS 725,346,829 Reserve Account 718,514,822 Rural Value Chain 716,317,641 Cost Center SPMU 575,441 Rural Retail Chain 9,029,188 Balances at Districts 673,435 HUMAN DEVELOPMENT 254,368,945 Andhra Bank 1,004,836 Strengthening Community demand for services and 248,700,852 imoroved Nutrition and learnina GRANTS (GRANT FORM Linkages with Value Chains 239,567 768,700,000 GOAP/WORLD BANK) Hd-Project Management 5,428,526 ENTITLEMENTS 71,578,974 Bank Interest 22,977,083 One Stop Shop 49,220,509 Vulnerbility Services 22,358,465 Miscellaneous Receipts-Unspent 2 ICT 94,907,478 Amounts DPMU/TPMU ICT FOR PROJECT MANAGEMENT 94,907,478 ICT FOR RURAL RETAIL CHAINS & RURAL VALUE CHAINS Loans & Advances 49,737,051 PROJECT MANAGEMENT 24,759,001 Events 237,129 Video Radio Publications 24,521,872 Monitiring and Evaluation 19,086,697 Base Line Survey 5,988,320 Process Monitoring 13,098,377 Project Management SPMU & DPMU 135,684,396 Internal Audit 534,312 Salaries to Project Staff 135,150,084 Bank Charges Total Payments 1,325,732,320 Advances 25,031,829 Closing Balances Reserve Account 210,624,557 Cost Center SPMU 1,071,510 Balances at Districts - Andhra Bank-CBOs TOTAL 1,562,460,216 TOTAL 1,562,460,216 For NG Rao SAlt For Society for Elimination of Rural Poverty :: AP Chartered tants ag s Ra Date: 04.02.202 Place: Vijayawada Society for Elimination of Rural Poverty :: AP ANDHRA PRADESH RURAL INCLUSIVE GROWTH PROJECT (APRIGP) (WORLD BANK) FUND Income & Expenditure Account for the period from 01.04.2018 to 31.03.2019 Expenditure Amount (Rs) Income Amount (Rs) LIVELIHOODS 725,346,829 Bank Interest 22,977,083 Rural Value Chain 716,317,641 Rural Retail Chain 9,029,188 Miscellaneous Receipts-Unspent 277,548 HUMAN DEVELOPMENT 254,368,945 Amounts DPMU/TPMU Strengthening Community demand for services and improved Nutrition and learning outcomes Linkages with Value Chains 239,567 Hd-Project Management 5,428,526 ENTITLEMENTS 71,578,974 One Stop Shop 49,220,509 Vulnerbility Services 22,358,465 ICT 94,907,478 ICT FOR PROJECT MANAGEMENT 94,907,478 PROJECT MANAGEMENT 24,759,001 Events 237,129 Video Radio Publications 24,521,872 Monitiring and Evaluation 19,086,697 Base Line Survey 5,988,320 Process Monitoring 13,098,377 Project Management SPMU & DPMU 135,684,396 Internal Audit 534,312 Salaries to Project Staff 135,150,084 Bank Charges Excess of Expenditure over Income 1,302,477,689 TOTAL 1,325,732,320 TOTAL 1,325,732,320 For N G Ra For Society for Elimination of Rural Poverty :: Al Chartered C ntants (G s I as t r Partner 44Lirecto Date: 04.02.2020 Place: Vijayawada � � w rv ,-а и ца � 4 й� aD � и гч � гл м �� н о аа v �г т и :: ,,,, w г� v и м' �r у, с й� гм,. й й й®о ° ш н �% ° ° � ct � � G а .... в� Ф � r А � � � 0. � _ � И fЛ h О Sii � О r� !{i N и .� � L� QD � и L17 � С � 4G н д г ы� О м N 1` � � � С Сл 1D гз � 1L � ы � � 0 м � �� �^ � � � 'г`'� N ш Z а а � о {€ "' at: � �ц L о Q � � � � 0." � � С �© � �, _ �- а � Q �+^'И г�j и J С� � • р Q :. н И И С � у � � У1 а г!д ' Q с и �' Q т�-1 а и а � ��� � 4i л., � �� т а а��ч ш т � ~ � ¢ й � CJ � г`а �� 4 � с "� a�i о� с ` �,i �� _в с� и us а ОС р��, м �¢ � С �� О � аа ® м n и и С F и й� л �°а �°о й й а � *+ О�*' � Q °,-,' °n м а й й � � � С_ �� о о� м м й� h Р�.. ��' и� � 4 ы л � ,..� r, л _ н � а бi � YJ � � з fp с о+ и о rn �� т �� й° °а с°DCS i о о°'о i О иг5 р 1` � ^ м � � ,-i ио ° � гч гч �7 н .. м h 1� �й J � с О °f � � � м tигl 17 �!1 � с � ,� r1 n1 � р Ф�► � � = а и ш в � � � а � � °' � °v� � '� f�^ С = С � � Z ,�w+' � tŭ '� 4 � J � � � �" � �' „иt°_, � ш � L ° � у ,� а 1АТ��, *� J � � � � � '� U ь+ а rt1 С � ���� . 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