Audited Project Financial Statements

The audited project financial statements are documents owned by the borrower. The views expressed herein do not necessarily represent those of ADB’s Board of Directors, Management, or staff. These documents are made publicly available in accordance with ADB’s Public Communications Policy 2011 and as agreed between ADB and the borrower’s implementing agency.

Project Number: 36111-013 Grant Number: 0489 Period covered: 1 January 2017 to 31 December 2017

Maldives: Kulhudhuffushi Harbor Expansion Project

Prepared by Ministry of Housing and Infrastructure For the Asian Development Bank Date accepted by ADB: 26 September 2018

Report No: FIN-2018-71(E) 14August20l8

KULHUDHUFFUSHI HARBOUR EXPANSION

PROJECT

MINISTRY OF HOUSING AND INFRASTRUCTURE

FINANCIAL YEAR 2017

WAUDII'OR GENERAL'S OFFICE

Contents

Auditor General's Report

Financial Statement

Statement of Receipts and Payments

Statement of Comparison of Budget and Actuals

3

4

Notes to the Financial Statements s

AUDITOR GENERAL'S REPORT

I'O THE MINISTRY OF HOUSING AND INFRASTRUCTURE ON THE F[NANCIAL

ST ATEMENTS OF KULHUDHUFFUSHI HARBOUR EXPANSION PROJECT

Optnion

We have audited the accompanying financial statement; Statement of Receipts and Payments andStatement of Comparison ofBudget with Actual Amounts for the year ended 31 December 2017and notes to these statements, which includes a summary of significant accounting policies andother explanatory inforrnation set out in pages 3 to 8, of Kulhudhuffushi Harbor ExpansionProject financed by Asian Development Bank Grant Agreement (Grant No. 089- MLD(SF)) as of5" October 2016.

In our opinion, the accompanymg financial statements present fairly, in all material respects, thecashreceiplsandcashpaymentsforthefinancialyearended31 December20l7andcashbalancesas at the year then ended in accordance with International Public. Sector Accounting Standard:Financial Reporting under the Cash Basis ofAccounting.

In addition, we can provide assurance that:

(a) All funds, inc1uding counterpart funds, of the project have been utilised in accordancewith the conditions of the grant agreement, with due regard to economy, efficiency andonly for the purposes for which the funds were provided;

(b) The Ministry of Housing and lnfrastructure (Project Management Unit) were incompliance with all financial covenants ofthe grant agreement as at 31"' December 2017;

(c) Adequate supporting documentation has been maintained to support claims lo the AsianDevelopment Bank ror reimbursement of expenditures incurred and expenditures areeligible for financing under the grant agreement; and

(d) The Imprest Account gives a true and fair view of the receipts collectcd and paymentsmade during the year ended 31"' December 2017. '

Basis for opinion

We conducted our audit in accordance with {nternational Standards on Auditing (ISAs). Ourresponsibilities under those standards are further described in the Auditor's responsibilities forthe audit ofthe fTinancial statements section of our report. We are independent ofthe Management

. in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for

Professional Accountants (IESBA Code). We have fulfilled our other ethical responsibilities inaccordance with the IESB Code.

We believe that the audit evidence we have obtained is sufficient and appropriate tobasis for our opinion.

Audito( General's Offlce i Ghaazee Building i Amecr Ahmcd Magu l Male', Republic or Maldives+960 332 39391 irto(n;audit.aov.mv l wwu'.audit.aov.mv

I

Responsibilihes of manage'ment and those charged with governance for the financialstatements

The Management is responsible for the preparation and fair presentation of this financialstatement in accordance with Internationai Public Sector Accounting Standard (IPSAS):Financial Reporting under the Cash Basis of Accounting. This responsibility includes: designing,implementing and maintaining internal controls relevant to the preparation and fair presentationof financial statement that are free from material misstatement, whether due to fraud or error;selecting and applying appropriate accounting policies; and making accounting estimates that arereasonable in the circumstances.

Those charged with governance are responsible for overseeing the project's financial reportingprocess.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as awhole are free from material misstatement, whether due to fraud or eiror, and to issue an auditor'sreport that includes our opinion. Reasonable assurance is a high level of assurance, but is not aguarantee that an audit conducted in accordance with ISAs will always detect a materialmisstatement when it exists. Misstatements can arise from firatid or error mid are considered

material if, individually or in the aggregate, they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgrnent and maintainprofessional scepticisrn throughout the audit. We also:

* Identifyandassesstherisksof material misstatement ofth efi nancial staternents,whetherdueto fraud or error, design and perform audit proccduresresponsive to those risks, and obtainaudit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk ofnot detecting a materiat misstatement resulting from fraud is higher than forone resulting fromerror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, orthe override of internal control.

* Obtain an understanding of internal control relevant to ihe audit in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the project's internal control.

* Evaluatctheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimates and related disclosures made by managemcnt.

@ Eval'uate the overall presentation, structure and content of the financial statements, includingthe disclosures, and whether the financial statements represent the undedying transactions andevents in a manner that achieves fair presentation.

We communicate with those charged with governance of the project regarding, among othermatters, the plm'ined scope and timing of the audit and significant audit findings, including anysignificant deficiencies in internal control that we identify during our audit.

14" August 2018

Hassan ZiyathAuditor General

Auditor Gencral's Office I Gliaazee Building I Ameer Ahmcd Magu l Male', Republic of Maldives+960 332 3939 i inro(2?audit.gov.niy i www.audil.gov.mv

2

KULHUDHUFFUSHI HARBOUR EXPANSION PROJECT

MINISTRY OF HOUSING AND INFRASTRUCTURE

FOR THE PERIOD 1 JANUARY 2017 TO 31 DECEMBER 2017

STATEMENT OF RECF,IPTS AND PAYMENTS

FOR THE PERIOD l JANUARY 2017 TO 31 DECEMBER 2017

All b fiytm are m US r)ollars

Notes

ReceiptsFunds received

Asian Development BankGovernment of Maldives

Total receipts

PaymentsCivil works

Consulting serviceRecurrent Costs

Total paymentsIncrease/(Decrease) in cash

Opening cash balanceIncrease/(Decrease) in cashClosing cash balance

For the period1 Jan 2017 to 31 Dec 2017

Cash Receipts/(Payments)

Controlled bythe Enhty

USD

38,95532,08871,043

(2,004)(59,460)(61,464)

9,579

9,5799,579

Direct

Payments byADB

USD

236,022

236,022

(236,022)

(236,022)

TOTAL

USD

274,97732,088

307,065

(238,026)(59,460)

(297,486)9,579

9,5799,579

Management of the Project is responsible for the preparation and presentation of the financialStatement.

The Financial Statement of the Project was approved by the Project Management Unit (PMU)on 14" August 2018.

Signed for and on behalf of the PMU:

Mr. Abdul Wahhab Ms. Arninath Nizar

0

(ProjectAccountant) (ProjectDirector)

policies and notes on pages 5 through 8 fortn an integral part of the finibii i':.s };!l. l/{ y/g

MmshyofHouaing md Irdrastrudure, Arneaiee Magu, Male', 20392, Mddkg Tet Qsoo 4soo, Fa+c40300 43al, emd smmariala@houslng.gov.mv3

KULHUDHTJFFUSHI HARBOUR EXPANSION PROJECT

MINISTRY OF HOUSING AND INFRASTRUCTURE

FOR THE PERIOD 1 JANUARY 2017 TO 31 DECEMBER 2017

ST ATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS

FOR THE PERIOD lJ ANUARY 2017 TO 31 DECEMBER 2017

All Ilie figuresare jn US Dollars

Item Notes

For the period1 Jan 2017 to 31 Dec 2017

Budgeted Actual Diff erenceAmount Arnount

(USD) (USD) (USD)

Civil works

Consulting service

Recurrent Costs

Total

4.1

4.2

4.3

810,000

160,000 (238,026)

60,000 (59,460)

1,030,000 (297,486)

810,000

(78,026)

540

732,514

The accounting policies and notes on pages 5 through 8 forrn an integral part of the financialstatements.

MkiistryofHousing amd Infaia, AmsneeMagu, Malel,'20392, Maldhies, Tel: 48 3004 300, %c +980 300 4301 end: ousktg.gm.rnv4.

KULHUDHUFFUSHI HARBOUR EXPANSION PROJECT

MINISTRY OF HOUSING AND INFRASTRUCTURE

FOR THE PERIOD l JANUARY 2017 TO 31 DECEMBER 2017

NOTES TO THE FINANCIAL STATEMENT

1 PROJECT INFORMATION

1.I Key Highlights

Project Title: Kulhudhuffushi Harbor Expansion ProjectStart Date: lst March 2017

Closing Date: 31st December 2019

Approved Budget: USD 10,440,000

Funded by: Asian Development Bank (ADB) and the Government ofMaldives (GOM)

ADB Contrihution. USD 9,690,000

GOM Contribution: USD 750,000

1.2 0bjectives

The Kulhuduffushi Harbour Expansion Project aims at enhancing access to services in thenorthern region of tlie Maldives, by improving inter-island connectivity. The pro)ect willconstruct a passenger and cargo harbour on Kulhudhuffushi lsland, which will be anexpansion to the existing multi-purpose harbour.

1.3 Impact and Outcome

The impact of the project will be enhanced access to services, aligned with theGovernment's Seventh National Development Plan. The outcome will be improved inter-island connectivity in the northern region.

The outputs of the project will be (i) increased harbour passenger and cargo capacity inKulhudhuffushi, tlirough expansion of the existing multi- purpose harbour, and (ii)strengthened institutional capacity in harbour operation, maintenance, safety and financialmanagement.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POIJCIES

2.I Basis of Preparation

The financial statements are prepared in accordance with International Public SectorAccounting Standard (IPSAS): Financial Reportirig under the Cash- Basis of Accomting,issued by Public Sector Committee of the International Federation of Accountants.The financial statement comprises:

> Statement of Cash Receipts and Payments> Statement or Comparison of Budget with Actual Amounts> Notes to the Financial statements. including the summarv of significant accounting

Statement of Cash Receipts and PaymentsStatement or Comparison of Budget with Actual AmountsNotes to the Financial statements, including the summary of significant accountingpolicies

2.2 Recognition of Receipts and Payments

Receipts and payments are accounted for on cash basis. Receipts are recognised when theMaldives Monetary Authority (MMA) receives the funds from ADB to the bank accountmaintained for the pro)ect with it. This account is maintained in United States Dollars

). Payments are recogmsed atthe time of outflow ofcash eitherfrom the bankand Infras(nidure, Ameenee Magu, Male', 20392, Maldives, Tel: +960 300 4 300, Fav: +96C1 300 4 301. email:

5

KULHUDHUFFUSHI HARBOUR EXPANSION PROJECT

MINISTRY OF HOUSING AND INFRASTRUCTURE

FOR THE PERIOD 1JANUARY 2017 TO 31 DECEMBER 2017

or from the cash account maintained for cash payments. Financial contributions to thepro)ect from Government of Maldives are recogmsed when cash outflow occurs from thePublic Bank Accoiint (PBA) in respeci of the pro3ect. Such outflows (payments) are alsorecognised as receipts m the financial statements.

2.3 Third Party Payments

Payments made to vendors directly by the ADB on behalf of the Project are recognised andincluded within the receipts (disbursements) of the pro3ect, whilst such figures are alsorecognised as payments under appropnate heads in the financial statements.

2.3 Presentation Currency

The Statement of Receipts and Payrnents has been presented usingthe United States Dollars(USD). All the figures have been rounded to the nearest Dollar.

2.4 Foreign Currency Transiation

Receipts and Payments in currencies other than the reportingcurrency (USD) are convertedat USD 1 = MVR 15.42, which is the exchange rate between the transaction currency andUSD at the time of the transaction. Cash balances in currencies other than USD as at the

end of the reporting period are shown in the financial statements at the exchange rate thatwas prevailing at the last day of the reporting period and resulting exchange gain/loss (ifany) is recognised in the financial statements.

2.5 Reporting Period

Financial statement is generally prepared for one year (calendar year). Period for whichfinancial statements is prepared are disclosed on the face of the financial statements.

2.6 comparativesThe comparative figures are not shown, as this is the commencement period.

3 FUNDS RECEIVED

3.1 Funds Received from ADB

Detail

Direct

Payments byADB

USD

2017

Cash Receipts/(Payments)

Controlled bythe entxty

USD

Total

USD

Advance payment to the ProjectManagement Consultant (PMC) - 19 June2017

Funds received to Advance account-19

June 2017

PMC April 2017 payment-18 August2017

PMC May 2017 payment-18 0ctober2017

PMC June 2017 payment-18 0ctober2017

PMC July 2017 payrneqt-18 0ctober,,. 017

112,311

12,779

,46,954

9,102

54,876

236,022

38,955

38,955

112,311

38,955

12,779

46,954

9,102

54,876

ofHousing and Infrastructure, Ameenee Magu, Male', 20392, Maldmes, Tel: Th60 300 4 300, Fax: +960 300 4 301, emall: secretarh6gsrng.g6€zv"'(

KULHUDHUFFUSHI HARBOUR EXP ANSION PROJECT

MINISTRY OF HOUSING AND INFRASTRUCTURE

FOR THE PERIOD 1 JANUARY 2017 TO 31 DECEMBER 2017

3.2 Funds Received from Government of Maldives

Detail

Fixed ASSetS

TravellingPMU Staff SalaryPMU Staff pension ContributionPMC PaymentRepair and maintenancePostageTotaJ

4 PAYMENTS

4.1 Civil Works

Civil works are to begin on September 2018

4.2 Consulting Services

2017

Cash Receipts/(Payments)

Controlled by theentityUSD

4,9614,163

16,8771,8202,0042,218

45

32,088

2017

TotaJ

USD

4,9614,163

16,8771,8202,0042,218

45

32,088

Details

Advance payment to the ProjectManagement Consultant (PMC)PMC April 2017 paymentPMC May 2017 paymentaPMC June 201 7 paymentPMC July 2017 paymentTotal

4.3 Recurrent Costs

Details

Fixed ASsetS

TravellingPMU Staff SalaryPMU Staff pension ContributionRepair and mamtenancePostage

Receipts/ (Payments.) Dl0rectControlled by the entity Payments Total

GoM ADB Fund Th) ' ADBFund

USD USD USD USD

(112,311) (112,311)

(2,004)

(2,004)

(12,779)(54,876)

(9,102)(46,954)

(236,022)

Receipts/ (Payments)Controlled by the entity

GOM Fund ADB Fund

USDUSD

(4,961)(4,163)

(16,877)(1,820)(2,218)

(45)(30,084) (29,376)

ofHouslngand Wmstuchir AmeenaeMagu, Mdd,'20392, Maklhm, Tel: +960 3004 300, Fm +980 3DO430iemd:7

secnetamte@hp$ffg.gm.my

Si 1.

2017

(29,376)

Direct

Paymentsby ADB

USD

(14,783)(54,876)(9,102)

(46,954)(238,026)

Total

USD

(4,961)(4,163)

(46,253)(1,820)(2,218)

(45)(59,460)

KULHUDHUFFUSffl HARBOUR EXPAN810N PRO&,

MINISTRY OFHOUSING AND [NFRASRUCTtJRE

FORTHRPmOD lJANUARY 2017 TO 31 DKa!,MBER 2017

OTHER INFORMATION

The following information has been provided as additional inforrnation. They do not form partof the above financial statement that has been presented under IPSAS cash basis of accounting.

Fixed AsSets (at cost)Details Balance as at I Additions7I'ransfers Balance as at 31

January20l7 Decetnber2017OfficeTables 1,289 1,289

OfficeChairs 1,114 1,114

Computersystems 2,558 2,558Total 4,961 4,961

PayabJesDetails

EmployerPension contribution payable to MPAO for the months April 2017 to August2017

Employee pension contribution payable to MPAO for the months April 2017 to August2017

PMC Payments (GOM contribution)Total

Amount

1,479

1,479

13,193

16,151

MinmJ ofHouSing and Infrashudure, Ameenee Magu, Male', 20392, Maldmes, Tel: 460 300 4 3oo, Fax: +geO 300 4 301, email: setarhousing.gov.mv8

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