Borkar & Muzumdar Chartered Accountants 21/168, Anand Nagar OM C.H.S., Anand Nagar Lane, off. Nehru Road, Vakola, Santacruz (E) Mumbai E-Mail:- muzumdarborkar2@gmail.com INDEPENDENT AUDITORS' REPORT To, The Members, Madhya Pradesh Rural Road Development Authority Bhopal ( M.P.) Report on the Financial Statements We have audited the attached Project Financial Statement of Madhya Pradesh Rural Connectivity Project (World Bank & AIIB Funded Project) of Madhya Pradesh Rural Road Development Authority as at March 31st 2018, for the year ended a summary of significant accounting policies and Notes to be other explanatory information. Management's Responsibility for the Financial Statements Management is responsible for the preparation of these Financial Statements in accordance with the instructions given by World Bank. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on this Project Financial Statement based on our audit. We conducted our audit in accordance with the National Standards of 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 company's preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating t ropriateness of accounting policies used and the reasonableness of the accounting by the management, as well as evaluating the overall presentation of the fina a wen . NU AGG~ We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the State Government in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, We believe that our audit provides a reasonable basis for our opinion and we report that:- a. The Project Financial Statement (PFS) give a true and fair view of the financial position of the Project at the end of the period under audit and of the sources and applications of project funds for that period; b. The Project funds were utilized for the purposes for which they were intended; c. Expenditures shown in the Project Financial Statement (PFS) are eligible for financing under the relevant Loan Agreement and these were exclusively financed through the Project funds and no other sources of funds have been received for incurring these expenditures; d. The IFRs (Interim Unaudited Financial Report) submitted during the period under audit are supported by adequate detailed documentation maintained in PIU's offices to support claims to the World Bank for reimbursement of expenditure incurred; e. The accounting, and internal control systems underlying the project, including material compliance with the Project Implementation Manual, and oversight over the Project funds were adequate and maintained throughout the audit period; and f. Procurement done by the PIUs under the project had been undertaken in accordance with agreed procedures as detailed in the PAD. For: Borkar & Muzumdar Chartered Accou,4tauts. FRN: 1015 CA. amit A Kwa'V (Partner ACco Place: Bhopal M No 533747 Date: Significant Accounting Policies and Notes to Accounts forming part of accounts for year ended 31st March 2018 1 SIGNIFICANT ACCOUNTING POLICIES: Significant accounting policies adopted in the Preparation of the accounts are as under: 1.1 Basis of Preparation The Project Financial Statements have been prepared under the historical cost Convention. MPRRDA is following the directives and instructions issued by World Bank in respect of Financial matters from time to time which inter-alia include allotment of funds its utilization and submission of various reports, keeping in view the objectives and nature of activities. The authority has followed cash system of Accounting. 1.2 Fund (Budget) Fund (Budget) received from State Government is recognized in the Financial Year 2017-18 in which it is received. This project is financed by three sources. World Bank (42%) $210 US Million, Asian Infrastructure Investment Bank (2'%) $140 US Million State Government of Madhya Pradesh (30%) $152 US Million. 1.3 Incidental Fund IncideAtal Receipts showing the amount of Fines, Penalties & Forfeited money of EMD, interest received on FDRs and Bank Balances and other Misc. Receipts etc. are recognized as enhancement of incidental fund and accordingly at the end of financial year whatever amount received under theses head are added in Incidental Fund A/c. 1.4 Fixed Assets Fixed Assets are stated at cost which comprises of all the expenditure attributable to the construction and up-gradation of roads, expenditure on detail project report is capitalized under specified head on the basis of value approved & certified by the authorized consultant. 1.5 Depreciation As per accounts Manual Deprecia s1 p ble. EDA 2 Notes Forming Part of Accounting 2.1 Madhya Pradesh Rural Connectivity Project (MPRCP) Fund 213,65,05,000/- Transferred by SRRDA to PIUs During The Financial Year 2017-18 PIU wise details of fund disbursement are as under: S. No. PIU Name Amount S. PIU Name Amount No. 1 Agar 12,00,00,000.00 30 Khargone 1 82,00,000.00 Khargone 2 2 Alirajpur 41,00,000.00 31 (Maheshwar) 1,64,00,000.00 3 Ashoknagar 1 5,12,00,000.00 32 Mandsaur 5,97,00,000.00 4 Ashoknagar 2 50,00,000.00 33 Morena 5,20,00,000.00 5 Betul 1 1,70,00,000.00 34 Narsingpur 6,32,00,000.00 6 Bhind 1,68,00,000.00 35 Neemuch 12,41,00,000.00 7 Bhind 2 1,98,00,000.00 36 Panna 20,00,000.00 8 Bhopal 3,42,00,000.00 37 Raisen 1 3,14,00,000.00 9 Burhanpur 1 39,00,000.00 38 Raisen 2 93,00,000.00 10 Chhatarpur 1 3,61,00,000.00 39 Rajgarh 1 14,81,00,000.00 11 Chhindwara 3 35,00,000.00 40 Ratlam 15,13,05,000.00 12 Chindwara 2 1,80,00,000.00 41 Rewa 30,00,000.00 13 Damoh 1,01,00,000.00 42 Sagar 1 2,76,00,000.00 14 Damoh 2 2,00,00,000.00 43 Sagar 2 3,61,00,000.00 15 Datia 1 3,36,00,000.00 44 Satna 2,00,00,000.00 16 Dewas 2,00,00,000.00 5 Sehore 8,28,00,000.00 17 Dewas 2 3,77,00,000.00 46 Seoni 1 20,00,000.00 18 Dhar 1 2,11,00,000.00 47 Shahdol 40,00,000.00 19 Dhar 3 7,23,00,000.00 48 Sapur 1 5,67,00,000.00 20 Guna 8,92,00,000.00 1p 2,87,00,000.00 21 Guna 2 3,42,00,000.00 50 Shivpuri 60,00,000.00 22 Gwalior 2,05,00,000.00 51 Sidhi 1 50,00,000.00 23 Harda 3,00,00,000.00 52 Tikamgarh 1 3,38,00,000.00 24 Hoshangabad 5,25,00,000.00 53 Ujjain 1 4,57,00,000.00 25 Indore 58,00,000.00 54 Ujjain 2 7,49,00,000.00 26 Jabalpur 1 9,00,00,000.00 55 Vidisha 1 4,15,00,000.00 27 Jabalpur 2 1,50,00,000.00 56 Vidisha 2 3,36,00,000.00 28 Jhabua 1 5,76,00,000.00 57 Waidhan 1 17,00,000.00 29 Khandwa 1 1,85,00,000.00 58 Waidhan 2 1,00,00,000.00 Total 2,13,65,05,000.00 2.2 We report that Deposit repayable Amounting to Rs. 12,32,89,795 /- contains earnest money, retention money (S.D.), Miscellaneous Deposits and Royalty. 2.3 MPRRDA received funds from State Government of Rs 200.00 Crores during the financial year 2017-18. For: Borkar & Muzumdar Chartered Acco nts FRN: 10 £ 101569W CA Nami wa (P Place: Bhopal M No 533747 Date: MADHYA PRADESH RURAL ROAD DEVELOPMENT AUTHORITY MADHYA PRADESH RURAL CONNECTIVITY PROJECT FUND (WORLD BANK) Consolidated Balance Sheet As on 31.3.2018 (Amount in Rs') CAPITAL FUND AND LIABLITIES SCHEDULE CURRENT YEAR PREVIOUS YEAR 1 2 3 4 MPRCP Fund from SRRDA L1(MPRCP/SCH/F-52A) 2,10,00,00,000 10,00,00,000 Interest received from Bank L2(MPRCP/SCH/F-52B) 2,38,95,957 (910) Miscellaneous Income L2(MPRCP/SCH/F-52B) 34,36,540 - Deposits Repayable L3(MPRCP/SCH/F-52C) 12,32,89,795 - Current Liabilities L4(MPRCP/SCH/F-52D) - - TOTAL 2,25,06,22,292 9,99,99,090 ASSETS WORLD BANK ASSETS Expenditure by Component: A-1(MPRCP/SCH/F-52E) Component A: Road Upgrading, Construction and Maintenance MPRCP/SCH/F-52E 1,28,97,04,192 Component B: Institutional Development MPRCP/SCH/F-52E - Component C: Road Safety Management Capacity Development MPRCP/SCH/F-52E 3,90,611 Component D. Design, Implementation and Management Support MPRCP/SCH/F-52E 43,92,756 STATE EXPENSES A-2(MPRCP/SCH/F-52E) 5,75,98,684 11,10,510 Current Assets A-i(MPRCP/SCH/F-52E) 89,85,36,049 9,88,88,580 TOTAL 2,25,06,22,292 9,99,99,090 The schedules referred above form integral part of Balance Sheet. As per our report of even date attached For Borkar &Muzumdar Chartered Acc 10A2t/ FR 10156! STATE MADHYA PRADESH CA Namit Ag CEO GM - Finance (Partner) ED A, M. No. 533747 Place: L~ Dated: ' u Annexure 1 MADHYA PRADESH RURAL ROAD DEVELOPMENT AUTHORITY MADHYA PRADESH RURAL CONNECTIVITY PROJECT FUND (MPRCP WB) Consolidated Receipts & Payments from 1.4.2017 To 31.3.2018 Receipt / Credit Balances Groups/Ledgers Code Related with Head of Account (CREDIT) Received during Payment during HO/PIU Opening Balance the year the year Closing Balance 1 2 3 4 WBCL1.1 HO MPRCP Fund received from M.P. Govt 10,00,00,000 2000000000 2,10,00,00,000 WBCL1.3 PIU/HO LOC Received from Head Office/Ho bank Authorisation of PIU WBCLO3 PIU Inter PIU Transfer (In case of Merger) WBCL1.6 HO Interest Received from Bank - 2,38,95,957 - 2,38,95,957 WBCL2.1 PU/HO Income Tax (TDS) - 2,82,63,148 2,82,63,148 - WBCL2.2 PIU/HO GST WBCL4.2 PlU Labour Welfare Tax - 1,08,82,010 1,08,82,010 WBCL2.3 PIU/HO Any Other Statutory deduction WBDR3.5 PIU Royalty - 4,02,70,926 1,35,73,599 2,66,97,327 WBDR3.1 PIU/HO Earnest money Deposits by Contractor/Consultant - 2,15,000 2,15,000 - WBDR3.2 PU/HO Retention Money (S.D.) by Conttractor/Consultant - 6,53,48,647 1,34,757 6,52,13,890 WBDR3.4 PIU/HO Miscellaneous Deposits of Contractor/Consultant - 3,41,85,822 28,07,244 3,13,78,578 WBMR21.2 PIU /HO Foreitire of Earnest Money Deposit - 26,24,068 - 26,24,068 WBMR21.3 PIU/HO Fines and Penalities etc. - - WBMR21.5 PIU/HO Miscellaneous Receipts - 8,12,472 - 8,12,472 WBAD16 HO Advance from Other Fund - Total 10,00,00,000 2,20,64,98,050 5,58,75,758 2,25,06,22,292 Payments/ Debit Groups/Ledgers Code Related with Head of Account (DEBIT) Received during Payment during HO/PIU Opening Balance the year the year Closing Balance 1 2 3 4 5 6 7(4+6-5) WB1.2 HO Fund transfer to PIU WBCA18 HO Inter PIU Transfer (Merge/Demerge case) COMP -A, B, C WORLD BANK EXPENSES-: COMP -A Road Upgrading, Construction and Maintenance (A1+A2) A- 1. SURFACE SEALING OF GRAVEL ROAD - 1,28,97,04,192 1,28,97,04,192 WBCA22 PlU Expenditure on Surface Sealing - 1,28,97,04,192 1,28,97,04,192 A-2 PROVISION Of ALTERNATIVE CONNECTIVITY WBCA24 Plu Expenditure on New Roads connectivity COMP -B Component B: Institutional Development (B1+BZ) B-1 Rural Roads Asset Management System - -9 WBCA21 HO System Defining Consultancy Expenses - _-_- WBCA22 HO Assets Management Software WBCA23 HO Training and Travelling Expenses ( Asset Mgt) WBCA24 HO (Asset Magt) Related other expenses B-2 Stren2thening Design , Research and Quality Assurance - - - Capacity Buildine WBCA25 HO Consultancy Expenses ( R & D capacity Building) - -_-_- WBCA26 HO R &D Laboratory Assets Exposure visit/Institutional development/Capacity Building / Training WBCA27 110 /Travelling etc ( R & D) WBCA28 110 (R&D) Related other expenses COMP-C C: Road Safety Nianageinent Capacity Development (CI+C2) IC l Development of RADMS 300 3.90.911 390611 RADMS Consultancy Charges ( Including hardware, WBCA29 HO Software,Equipment etc) - - . . WBCA30 HO Study Tour/Exposure Programme/Training/Travelling (RADMS) - 300 3,90,911 3,90,611 WBCA31 HO RADMS related other expenses C 2 Pilot CoWB 3rehensive Road Safety Pro-.ram (PCRSP) ( 2.1 to C.4 2eS a2 WBCA32 HO PCRSP Consutancy Expenses Exposure visit/Study Tour-National & International / Training WBCA33 HO /Travelling etc ( PCRSP) WBCA34 HO PCRSP related other expenses WBCA35 PIU Civil Contract related with Road safety improvements . Procurement Contract related with Road safety Enforcement and WBCA36 HO Trauma Center v I COMP -D D. Design,implemantation and Management Support (IOC) - t-A 43,92,756 43,92,756 WBCA37 110 Project Manangement Consultancy Expenses - 43,92,756 43,92,756 WBCA38 HO Design Imp.& Mgt Supt. Related other expenses V 1 / '., - WBCA39 HO Audit Fees - STATE EXPENSES - 15772 565.,03 684 WBCA40 PIU rpenditure on Utility/Pole shit_ing etc o surface sealin6 WBCA41 PIU Expenditure on Ithiity Pole shifting etc ofNew Roads WBCA42 PIU Expenditure on SQC Consultancy 1 4 9705.025 Expenditure on DPR Consultancy includes Expenditure (mcluding TA 5 WBCA43 and DA on Verification ofDPR BY Empannelled Engg) 11,10,5 1 2,414 ,552 WBCA44 HO Bank Charges (HO) 910 15,772 22,414 7,552 WBCA45 HO Expenditure on PIC(HO) 7 27,08,50 WBCA46 HO Sofvare Expenses (HO) (NIC) - 27,08,500 27,01,500 WBCA47 PIU/HO Misc Office Expenses (HO/PIU) 1,52,880 1,52,880 WBCA16 1 HO Bank (HO) 9,88,88,580 6,50,52,13,175 5,84,75,56,111 75,65,45,644 WBCA1.5 PIU Bank Authorization Advances Advances WBCA17.4 PIU Mobilisation advance to Contractor - 1,22,06,144 10,68,60,949 9,46,S4,805 WBCA17.5 PIu Machinery advance to Contractor 53,62,400 5,26,98,000 4,73,35,600 State State Advances Advances - WBCA14.1 Piu Misc Work Advance against Contractors 0 WBCA17.7 PIU/HO Other Loans & Advance/ Receivahles - 82,00,00,000 8200,00,000 Total 10,00,00,000 7,34,27,97,791 8,17,81,05,955 2,25,06,22,292 The schedules referred above form integral part of Balance Sheet. 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