LAXMI TRIPTI & ASSOCIATESdocuments.worldbank.org/curated/en/... · policies and notes thereon, give a true and fair view subject to our observations in the management letter attached:

Address: 556/26, Sujanpura

LAXMI TRIPTI & ASSOCIATES Alarbagh, LucknowContact: +91-9451897708

CHARTERED ACCOUNTANTS E-mail: [email protected]@gmoil.com

INDEPENDENT AUDITOR'S REPORT OF UP SODIC LAND RECLAMATION IIIPROJECT (UPSLR - III P) FOR FY 2018-19

To 21.06.2019The Managing DirectorU,P. Sodic Land Reclamation III ProjectUttar Pradesh Bhumi Sudhar NigarnT.C./l 9V, Vibhuti Khand, Gomti NagarLucknoW-2260 10

Dear Sir

1. Report on the Financial Statements

We have aLidited the accompanying financial statements of Uttar Pradesh Sodic LandReclamation - III Project financed under World Bank Credit No. 4640 (hereinafter referredto as "UPSLR -Ill Project" which has been carried out by Uttar Pradesh Bhumi SudharNigam. Lucknow (hereinafter referred to as " the Management") which comprises theBalance Sheet as on 3" March 2019, Statement of Receipts and Payments and Statement ofIncome and Expenditure for the year ended 31st March 2019 and a surmmary of significantaccounting policies and other explanatory information in relation to UPBSN Head Office, 20DPU's, Nodal Offices of the implementing agencies (Department of Agriculture, AnimalHusbandry, Remote Sensing Application Centre) at Lucknow and 7 DPU's of IrrigationDepartment.

2. Management's Responsibility for the Financial Statements

Management is responsible for preparation of these financial statements that give a trueand Iair view of the financial position and financial performance of UPSLR-III Project(hereinafter referred to as "the Management"). This responsibility includes the design,implementation and maintenance of internal control relevant to the preparation of thefinancial statements that give a true and fair view and are free from materialmisstatements, whether due to fraud or error.

3. Auditor's Responsibility Our responsibility is to express an opinion on these financialstatements based on our audit. We have conducted our audit in accordance with theStandards on Auditing issued by the Institute of Chartered Accountants of India. ThoseStandards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement.

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An audit includes, examining on test basis, evidence supporting the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by management, as well as evaluating the overall presentation of thefinancial statements.

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

4. Opinion

In our opinion and to the best of our information and according to the explanations givento us, the aforesaid financial statements read together with the appended accountingpolicies and notes thereon, give a true and fair view subject to our observations in themanagement letter attached: -

i. In the case of the Balance Sheet of the state of affairs of the UPSLR -III Project as at 31st March, 2019;

ii. In the case of the Income and Expenditure Account of the Income andExpenditure for the year ended on that date;

iii. In the case of the Receipts and Payment Account of the receipts andpayments during the year ended on that date.

iv. With respect to IFRs, adequate supporting documentation has beenmaintained through support claims to the world bank forreimbursement of expenditures incurred and

v. The expenditure incurred are eligible for financing under the CreditAgreement.

For and behalf of M/s Laxmi Tripti & AssociatesChartered AccountantsFRN-009189CAt

CA Prakhar SaC{ 1 1<Partner

M.No 414991 dAcQ

Uttar Pradesh Sodic Land Reclamation III ProjectIDA Credit No. : 4640 IN

Balance Sheet as at 3 1s March 2019(Amount in Rs.)

Previous Liabilities Sch Current Previous Assets Sch CurrYear No Year Year No Year

22,12,53,720 Opening Balance of Grant 15,73,45,719 Current Assets1,00,00,72,000 Add: Grant Received

1,AduiGnt Y Re e 1,30,00,00,000 1,140 Cash in Hand F 291during the Year1,22,13,25,720 Net Grant 1,45,73,45,719 41,10,05,288 Bank Accounts F 29,36,95,539

Less: Transferred to 13,70,15,675 Stock In Hand G 49,114

1,06,39,80,001 Income & Expenditure 1,43,48,13,549Account (being grantutilized)

15,73,45,719 Grant Unutilized A 2,25,32,170 Loans & Advances

12,74,83,519 Loan & Advances H 66,87,235Current Liabilities

2,10,627 Duties & taxes B 1,82,46828,01,835 Provisions C 25,58,038

11,80,00,174 Sundry Creditors D 73,47,60839,71,47,267 Other Current Liabilities E 26,78,11,895

67,55,05,622 30,04,32,179 67,55,05,622 30,04,32,179

Significant Accounting Policies and Notes to Accounts as per Schedule "I"The Schedule referred to above form an integral part of the Project Financial Statements

As per our separate report of even date attached.For, Laxmi Tripti & AssociateChartered AccountantsFRN. 009189C

(CA PrakharSaena) Manager inance Finance Controller/JMDPartnerM. No. 414991Place : LucknowDated : 21/06/2019 Managing Director

Uttar Pradesh Sodic Land Reclamation Ill Project

IDA Credit No.: 4640 INIncome & Expenditure Account

for the Period 01.04.2018 to 31.03.2019

(Amount in Rs.)

No Particulars Current PreviousYear Year

INCOMEA Grant (to the extent utilized) 1,43,48,13,549 1,06,39,80,001B Other income 5,25,117 1,45,383

Total income (1) 1,43,53,38,666 1,06,41,25,384

EXPENDITUREa) On-farm Development and Land Treatment

(i) Reclamation of Sodic Lands 83,70,85,399 70,50,63,021(ii) Site identification, Mapping and monitoring 73,05,591 78,88,476(iii) Ravine Management 7,86,03,701 6,97,36,045

Sub Total on Farm Development and Land Treatment 92,29,94,691 78,26,87,541

b) Improvement of Drainage Systems 22,43,53,724 8,57,72,576c) Agricultural Support Services 5,34,28,081 2,93,22,943d) Institutional Strengthening and Capacity Building for 4,89,65,610 1,09,49,066e) Project Management 18,55,96,560 15,53,93,258

Total Expenditures (11) 1,43,53,38,666 1,06,41,25,384

III Excess of income over Expenditure


As per our separate report of even date attached.For, Laxmi Tripti & AssociatesChartered Accountants &FRN- 009189C

(CA Pra ar Sa en* anle Finance Finance &8ntroller/ JMDPartnerM. No. 414991 dActPlace LucknowDated :21/06/2019 Manag Director

Uttar Pradesh Sodic Land Reclamation III ProjectIDA Credit No. : 4640 IN

Receipts & Payments Accountfor the Period 01.04.2018 to 31.03.2019

(Amount in Rs.)51 Particulars Current Previous

No Year YearA Opening Balance (A ) 41,10,06,427 13,70,80,266

B Receipts

Funds from Government through Budget (These will include external 1,30,00,00,000 1,00,00,72,000assistance received by Government for the project)Other Income 5,25,117 1,45,383Total Receipts ( B) 1,30,05,25,117 1,00,02,17,383Total Sources (A+B) 1,71,15,31,544 1,13,72,97,649

C Expenditures by Componenta) On-farm Development and Land Treatment

(i) Reclamation of Sodic Lands 83,70,85,399 70,50,63,020(ii) Site Identification, Mapping and monitoring 73,05,591 78,88,476(iii) Ravine Management 7,86,03,701 6,97,36,045

Sub Total on Farm Development and Land Treatment 92,29,94,691 78,26,87,541b) Improvement of Drainage Systems 22,43,53,724 8,57,72,576c) Agricultural Support Services 5,34,28,081 2,93,22,943d) Institutional Strengthening and Capacity Building for Market Access 4,89,65,610 1,09,49,066

e) Project Management 18,55,96,559 15,53,93,258Total Expenditures ( D) 1,43,53,38,665 1,06,41,25,384Total (A+B-D) 27,61,92,879 7,31,72,265

D Net Increase/ Decrease in Current Assets & Liabilitiesa Closing Balance of Current Assets 67,36,349 26,44,99,194b Opening Balance of Current Assets 26,44,99,194 34,54,43,923c Increase/(Decrease) in Current Assets -25,77,62,845 -8,09,44,729

d Closing Balance of Current Liabilities 27,79,00,009 51,81,59,903e Opening Balance of Current Liabilities 51,81,59,903 26,12,70,470f increase/(Decrease) in Current Liabilities -24,02,59,894 25,68,89,433

Net Total (c-f) -1,75,02,951 -33,78,34,162

E Closing Balance 29,36,95,830 41,10,06,427a Cash in Hand 291 1,140b Cash at Bank 29,36,95,539 41,10,05,288

Significant Accounting Policies and Notes to Accounts as per Schedule "1"The Schedule referred to above form an integral part of the Project Financial Statements

As per our separate report of even date attached.For, Laxmi Tripti & AssociatesChartered Accountants 8FRN. 009189C

(CA Prakha aSna Manag r Finance Finance Controller/ JMDPartnerM. No. 414991Place : LucknowDated . 21/06/2019 Managin Director

Uttar Pradesh Sodic Land Reclamation III Project

IDA Credit No.: 4640 INReconciliations of Claims to Total Applications of Funds

Report for the Period 01" Apri 2018 to 31't March 2019

(Amount in Rs.)

Particular Current Previous ProjectYear Year up to Date

Bank Funds Claimed During the year 1,04,88,77,601 74,67,47,445 10,47,03,00,001

Total Expenditure made as per Balance Sheet 1,43,48,13,549 1,06,39,80,001 13,10,77,67,338Add:

Last Year unclaimed Liabilities in IUFR reversed back 15,38,52,016 10,41,98,538Procurement of stock (unutilized stock, consider as exp in the IUFR) 49,114 13,70,15,675 49,114Advances claimed as Exp in the IUFR 64,67,235 11,59,99,583 64,67,235Excess claim in the IUFR reversed during audit (Net)Excess claim in the UFR as "Other Income" reversed in the PFS 5,25,117 1,45,383 51,86,085

Less:Liabilities not claimed in the IUFR 3,15,94,771 15,38,52,016 3,15,94,771

Expenditure incurred but not claimed in the IUFRLast Year claimed advances in lUFR reversed back 25,30,15,258 32,15,24,871 -

Expenditure reversed in PFS last year, rectification in the IUFR - 1,25,27,988

Total Expenditure claimed 1,31,10,97,001 93,34,34,306 13,08,78,75,001

World Bank Share @ 80% of above 1,04,88,77,601 74,67,47,445 10,47,03,00,001


As per our separate report of even date attached.For, Laxmi Tripti & Associates -Chartered AccountantsF 009189C

(CA PraTar xena Manag r Finance Finance Controller/JMDPartnerM. No. 414991Place LucknowDated 21/06/2019 Ma agin Director

Schedule annexed to and Forming Part of the AccountsFor the Year Ended March 31, 2019Grant Account

Schedule "A"(Amount in Rs.)

Particulars Current PreviousYear Year

Opening Balance ( A) 15,73,45,719 22,12,53,720ReceiptsFunds from Government through Budget (These will include external 1,30,00,00,000 1,00,00,72,000assistance received by Government for the project)Other income 5,25,117 1,45,383Less: Returned to UP GOVT.Total Receipts ( B ) 1,45,78,70,836 1,22,14,71,103

Expenditures by Componenta) On-farm Development and Land Treatment

(i) Reclamation of Sodic Lands 83,70,85,399 70,50,63,020(ii) Site Identification, Mapping and monitoring 73,05,591 78,88,476(iii) Ravine Management 7,86,03,701 6,97,36,045

b) Improvement of Drainage Systems 22,43,53,724 8,57,72,576c) Agricultural Support Services 5,34,28,081 2,93,22,943d) Institutional Strengthening and Capacity Building for Market Access 4,89,65,610 1,09,49,066

e) Project Management 18,55,96,560 15,53,93,258Total Expenditures ( C) 1,43,53,38,666 1,06,41,25,384

Closin& Balance ( D= B - C 2,25,32,170 15,73,45,719

Manage Finance Financp Controller

Place : ucknowDated 21/06/2019

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Schedule annexed to and Forming Part of the AccountsFor the Year Ended March 31, 2019Duties & Taxes Payable

Schedule "B"Unit Head Code Amount

Etah TOS Contractor 743.00TDS Salary -4,800.00

Lucknow TDS Contractor 4,901.00Pratapgarh TDS Contractor 22,574.00

TDS Salary 51,736.00Raibareilly TDS Contractor 10,154.00

TDS Salary 13,677.00Sultanpur TDS Contractor 5,591.00Unnao TDS Contractor -Ho TDS Contractor 1,333.00

TDS on Salary 41,600.00GST TDS 33,806.00

ID Fathepur TDS Professional 6,099.00Vat and Cess -4,946.00

Total 1,82,468.00

Manag r Finance Finance Controller

Place LucknowDated 21/06/2019

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Schedule annexed to and Forming Part of the AccountsFor the Year Ended March 31, 2019Provision

Schedule "C"Unit Particular Amount

HO External Audit Fee Payable 11,50,500.00HO Internal Audit Fee Payable 13,20,420.00Aligarh Unpaid Salary 30,721.00Farrukhabad Unpaid Salary 28,833.00Etah Unpaid Salary 16,280.00Pratapgarh Unpaid Salary 11,284.00

Total 25,58,038.00

Manag r Finance Finan Controller


dAc

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Schedule annexed to and Forming Part of the AccountsFor the Year Ended March 31, 2019Sundry Creditors

Schedule "D"DPUJ Name Name of Party Amount Amount

AJgarh Raj Shree Pipe 31,7'95.00N.CCF 92,002.00 1,23,797.00

Alahabad Ot her d Lablites 2,576.00

FNational Seed Corporation Ltde Lucknow 1,90,230.00 1,92,806.00Azamgarh M/s NCCF LUCKNOW 1,16,216.00 1,16,216.00Etah N.C.C.F.I.Ltd. 2,22,305.00 2,22,305.00Etawah National Seeds Corporation Ltd 2,59,680.00 2,59,680.00Fatehpur National Seeds Corporation Limited 1,87,115.00 1,87,115.00Farrukhabad Mahavir Polyplast Pvt.Ltd Agra 30,182.00

N,C.C.F.I. Lucknow 5,98,360.00U.P.C-OPERATIVE FEDERATION 36,724.00 6,65,266.00

Hardoi NATION CO-OPERATIVE CONSUMERSFEDERATION OF INDIA

1,55,124.00P.C.F HARDOF 10,83,670.00 12,38,794.00

Jaunpur NSC Varansi 12,820.00M/s National Co-Operative Consumers Fed 2,44,654.00 2,57,474.00

Kannauj P C F Kannauj 9,06,880.00N C C F Lko 1,50,097.30 10,56,977.30

Kanpur Dehat NATIONAL SEED CORP. 2,48,690.00Other Credit 13,584.00 2,62,274.00

Kanpur Nagar NCCF OF INDIA LTD 1,00,000.00 1,00,000.00Mainpuri M/S N.C.C.F.Lko 62,064.00

N.S.C.Ltd.Lko. 79,599.00 1,41,663.00Raibarelly METRO HYBRID SEED 5,98,416.00 5,98,416.00Sant Ravidas Nagar Uppcf Varanasi 4,35,429.00

METRO HYBRID SEED 12,37,110.00 16,72,539.00Sultanpur National Seed Corporation Ltd 38,654.00

N.C.C.F. Lko 1,14,320.00Vijay Singh Kuswaha 1,000.00 1,53,974.00

HO Good Bakery 62,090.00Up State Yarn Corporation Jaunpur 35,672.00RN Khanna & co 550.00 98,312.00

Total 73,47,608.30 73,47,608.30

Manager Finance Finance Controller

Place LucknowDated :21/06/2019

dAccO

Schedule annexed to and Forming Part of the AccountsFor the Year Ended March 31, 2019Other Current Liability

Schedule "E"Account Head Accounting Location Amount Amount

Interest on Aligarh 83,415.00bank account Allahabad

AzamgarhEtah 1,68,84300Etawab 13,007.00Farrukhabad 56,363.00FatehpurGhazipur 820.76HardaiJaunpur 44,418.00Kannauj 38,481.00Mainpuri 1,95,235.30Kanpur DehatKanpur NagarLucknow 68,454.60MainpuriSant Ravidas NagarSultanpur 35,656.09PratapgarhRailbareillyUnnao 53,93500RSACAnimal HusbandryDepartment of AgricultureID AligarhID PratapgarhID SultanpurID Etah 15,826.00ID Fatehpur 34,986.00ID UnnaoHead office 65,22,063.94 73,31,504.69

Security Deposit Aligarh 2,18,109.00Allahabad 43,501.00Azamgarh 94,902.00Etah 2,94,166.00Etawah 6,92,182.22Farrukhabad 2,06,071.00Fatehpur 4,86,895.69Ghazipur 4,52,515.00Hardoi 54,220.00JaunpurKannauj 49,612.00Kanpur Dehat 3,86,206.00Kanpur Nagar 36,874.00Lucknow 2,02,084.65Mainpuri 2,68,921.00Pratapgarh 66,115.00RaibareillySant Ravidas Nagar 14,815.10Sultanpur 54,251.55Unnao 1,45,799.80Head office 98,843.00 8,66,084.01

Aq,

Schedule annexed to and Forming Part of the AccountsFor the Year Ended March 31, 2019Other Current Liability

Schedule "E"Account Head Accounting Location Amount Amount

Farmers Contribution Aligarh 356.62Allahabad 10,156.00AzamgarhEtah 2,86,285.68Etawah 19,756.68FarrukhabadFatehpurGhazipurHardoiJaunpur 59,640.06Kannauj 18,201.00Kanpur Dehat -Kanpur NagarLucknowMainpuri 5,92,200.00PratapgarhRaibareilly 7,375.00Sultanpur 25,651.00Sant ravidas nagar 242.63UnnaoHead office 23,82,71,778.28 23,92,91,642.95

Security deposit & ID Aligarh 91,132.00Retention Money JD Etah

Io Etawah 2,12,147.00JD Fatehpur 2,11,358.00ID Pratapgarh 53,09,643.00ID Sultanpur 68,023.00ID Unnao 85,84,298.00 1,44,76,601.00

Salary Deduction Aligarh 52,595.00Allahabad -AzamgarhEtah 28,624.00Etawah 26,242.00FarrukhabadFatehpur 2,830.00GhazipurHardoiJaunpurKannujKanpur DehatKanpur NagarLucknowMainpuri 2,200.00PratapgarhRaibareilly 3,982.00Sant Ravidas Nagar 60,760.00Sultanpur .Unnao 60,230.00Head office 26,08,598.98 28,46,061.98

Total 26,78,11,894.63

Ma?Ta er Finance &Finance bntroller

Place : LucknowDated :21/06/2019

ed" Arcc

Schedule annexed to and Forming Part of the AccountsFor the Year Ended March 31, 2019Cash and Bank Balances

Schedule "F"SI No Unit Cash in Hand Cash at Bank

1 Aligarh 23,46,280.002 Allahabad 56,913.023 Azamgarh 43,199.244 Etah 14,20,953.825 Etawah 9,92,061.386 Farrukhabad 51,205.467 Fatehpur 25,35,550.798 Ghazipur 5,16,600.919 Hardol 3,18,673.8610 Jaunpur 22,47,944.5211 Kannauj 2,40,545.5212 Kanpur Dehat 4,31,004.5013 Kanpur Nagar 10,32,720.0014 Lucknow 14,24,363.7915 Mainpuri 27,01,788.1416 Pratapgarh 7,20,026.4817 Raibareilly 5,87,831.0118 Sant Ravidas Nagar 6,11,853.6619 Sultanpur 3,54,922.1820 Unnao 14,75,337.1121 ID Aligarh 4,52,346.3322 1D Etah 1,19,957.6823 ID Etawah 10,83,160.7724 JD Fatehpur 23,48,732.8725 ID Pratapgarh 7,92,000.6426 ID Sultanpur 8,71,156.0027 ID Unnao 2,58,414.7628 RSAC 19,52,818.2829 Animal Husbandry 1,000.0030 Agriculture Department32 Head Office 291.00 26,57,06,176.52

Total 291.00 29,36,95,539.24

Managgr Finance Finarce Controller

Place : Lucknow &Dated: 21/06/2019

A -' d c,

Schedule annexed to and Forming Part of the AccountsFor the Year Ended March 31, 2019Stock in Hand

Schedule "G"Unit Stock Quantity Rate Value Value

Aligarh GYPSUM-P-11' 15,000 MT 3,165.75 47486.25 47,486.25

Kannauj UREA -P-Ill 0.116 MT 6,644.48 770.76 770.76

Mainpuri DHAINCHA SEEDS-P-Il1 0.149 MT 5,754.03 857.35 857.35

I49,114.36 49,114.36

Mana r Finance Finance Controller


dAcc

Schedule annexed to and Forming Part of the AccountsFor the Year Ended March 31, 2019Loan & Advances

Schedule "H"Particular Amount

Advance to Party / Supplier / Service Provider Annexure "1" 21,56,700.20Advance to WUG 5 Annexure 2" 41,24,655.00Advance to Staff Annexure "3 4,05,879.56

Total 66,87,234.76

Advance to PartyAnnexure "1" of Schedule "H"

DPU Name Party Name Amount AmountAllahabad Kribhko Lucknow 1,333.10 1,333.10

Pratapgarh Adv to supplier 1,906.00 1,906.00Sant Ravidlas Nagar IFFCO 14,580.10

KRIBHCO 235.00 14,815.10Head Office Advance to Panchyati Raj Department 2,23,000.00

Cyber Max Enterprises 51,800.00Dy Director Agricuture Basti 15,525.00FAMILY BAZAR 09 45,600.00Saheed Major Amiy Tripathi Filling Centre 37,826.00UPDESCO 12,82,098.00WAPCOS Ltd 900.00Sarvodya Gramyodog Sewa Samiti 4,40,625.00Telephone Security 10,000.00Voltas Limited 28,272.00 21,35,646.00Receivable from UPBSN 3,000.00

Total 21,53,700.20 21,56,700.20

Manage Finance Finan Controller

Place: LwcknowDated 21/06/2019

Advance to WUG'sAnnexure "2" of Schedule "H"

S1 No OPU Name Amount

1 Etawah 4,49,873.002 Mainpuri 36,74,782.00

Total 41,24,655.00

Manager Finance Finance Controller


VIV%

Advance to StaffAnnexure "3" of Schedule "H"

SI No DPU Name Amount

1 Aligarh 12,272.402 Allahabad3 Azamgarh4 Etah -8,036.005 Etawah -635.736 Farrukhabad 8,000.007 Fatehpur8 Ghazipur9 Hardoi10 Jaunpur 26,971.0011 Kannauj12 Kanpur Dehat 58,890.0013 Kanpur Nagar 45,000.0014 Lucknow15 Mainpuri16 Pratapgarh 375.0017 Raibareilly

118 ISant Ravidlas Nagar 26,707.36f19 ISultanpur 450.53

20 jUnnao 1,66,363.0021 IRSAC 5,000,00122 Head Office 64,522.00

Total 4,05,879.56

Ma Finance Financ Controller


v\\ &As

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Schedule annexed to and Forming Part of the AccountsFor the Year Ended March 31, 2019Significant Accounting Policies & Notes to Accounts

Schedule "I"A) Significant Accounting Policies

1. Administration :UPSLR-llI Project is a World Bank assisted Project implemented by Government of Uttar Pradesh (GoUP) through UttarPradesh Bhumi Sudhar Nigam Limited from September 18th, 2008 vide Credit & Project Agreement between InternationalDevelopment Association (iDA) and Indian Delegation (Government of India and Government of Uttar Pradesh) dated20.07.2009 with retroactive financing w.e.f. 18.09.2008.

2. Basis of Accounting:The Project Accounts have been maintained at Head Office and its 20 District Project Unit's, 4 Nodal Offices ofimplementing line agencies i.e. Remote Sensing Application Center (RSAC), Department of Irrigation, Department ofAgriculture (DA), and Department of Animal Husbandry (AH)] and 7 implementing districts of Irrigation Department.Accounts are being kept on accrual basis under double entry accounting principles & historical cost convention andfollowing the accounting standards issued by the ICAI, pertinent laws and regulations.

3. Grant in Aid :Grant in Aid is recognized as Income in the Income & Expenditure account to the extent of fund utilization against it (netof other income). Grant in Aid to the extent unutilized is shown as a liability in the Balance Sheet.

4. Valuation of Inventory:Consumption and closing stock of input/materials pertaining to On Farm Development and Land Treatment are valued atCost on First-In-First-Out (FIFO) method. Cost for valuation purposes would be arrived at Free on Rail or Landed CostMethod.

5. Accounting of Inventory:Inventory procured for Project implementation are being managed by the DPU's and it's Sub district level offices.Inventories are being stored at the contracted warehouses at districts and the storage facilities of the Sub - Units andCircle offices at the sub - district level. Inventory records and reports are being prepared manually by the designated staffat each of the offices. These records and reports are being captured the quantitative details for each item of inventories.All inventory on receipt at the predefined location (rail head in case of gypsum and other location in case of any otherinventory) are being checked for outward damage to the package and shortages (quantity verification), if any, by thedesignated staff of the DPU (Store keeper), authorized representative of the supplier (in case of gypsum) and therepresentative of the transporter/railways on the basis of the RR/other relevant transport documents and suppliersinvoice. Later on GRN is being prepared by designated officer post inspection of the quality of inventory based on theabove documents and PO. On the basis of GRN, Input inventory transaction are being accounted for in the books ofaccount (TALLY) of DPU's. Distribution channel of inventories are as under.1. Store Keepers at DPU's are issuing inventory to Deputy Manager (Sub - office) on the basis of requirement.2. Deputy Manager (Sub - office) are issuing inventory to Implementation Assistant.Later on utilization / distribution of inventories are being submitted to DPU's duly verified by implementation assistant.On the basis of the utilization document, accounting entry for utilizations are being accounted for under relevant heads ofaccount in the accounting software (TALLY).

6. Fixed Assets & Depreciation :As per the financial manual Para no 3.2 related to Accounting Policies, The Fixed Assets acquired under the Project arevalued at Cost including all direct costs and accounted for under the respective component head of expenditure. Nodepreciation is being charged on Fixed Assets.

0

1'6 d N


Schedule "1"7. Bank Account:A separate bank account, in a lead bank of the area, have been opened in all the accounting locations of the UPBSN. Allthe transactions relating to the project are being routed from these accounts. Furthermore, separate bank accounts in thedistrict unit of Agriculture Department (DA) and department of Animal Husbandry (AH) are also in operation. Although,the bank accounts which are in operation in the District unit of Agriculture Department (DA) and Animal Husbandry (AH),closing balance of these accounts are being classified as imprest under the head loan and advances.

8. WUG Accounting:Funds given to the WUGs are initially being recorded as advance to WUG in the books of account maintained at DPU. Lateron the WUGs are submitting its fund utilization in prescribed booklet format duly verified and recommended by the siteimplementation assistant. The format includes summary of funds and utilization (under different heads) for the WUG'sfunctioning under his jurisdiction and through the Deputy Manager, documents are being send to the DPU's. Based onthese documents, the Advances to WUG's are being adjusted and expenditure accounted for under relevant heads ofaccount.

9. Farmer's ContributionFarmer's Contributions towards their physical labour and inputs is not accounted in the financial records. Contribution inCash is shown as Current Liabilities.

10. Expenditure Incurred by Implementing Agencies other than UPBSNFund transfers to implementing agencies other than UPBSN are initially recognized as inter transfer of funds. Treatment asexpenditure are being made to the extent expenditure is actually incurred and paid for, reported through the InterimFinancial Report and approved by a competent authority. Assets includes bank balances and liabilities remains toimplementing agencies have considered as the assets and liability of the project and consolidated accordingly.

11. Treatment of Interest Earned :Interest earned on balances in Project Bank Accounts is treated as liability towards the Government of Uttar Pradesh.

12. Reimbursement:All expenditures incurred on the project through implementing agencies are reimbursed by the World bank. Thereimbursement claim is praperd ans sent to the bank on Cash Basis.

13. Contingent Liability:Contingent Liabilities have not been accounted for for in the books of account, However, cotingent liabilities have beendisclosed by way of notes in Notes to Accounts here below.

B) Notes to Accounts

1. The balance of Sundry Creditors, Loan & Advances are subject to their confirmation.

2. Provision represent value of unpaid salary and expenditure accrued during the year.

3. Other current liability includes an amount of ' 73.32 Lacs (current year earned 174.65 lacs and paid 191.57 to GoUP)which represent the Income generated by way to interest received from bank.

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Schedule "I"4. Line AgenciesAll Accounting entries have been taken from the agreed accounting software "TALLY" which is being maintained by theLine Agencies (Irrigation Department, Animal Husbandry, Agriculture Department and RSAC) as per the guidelinessuggested in the financial manual of the Project. The accounting entries have been grouped, re - grouped where everrequired to comply the guidelines of Financial Manual.

5. Contingent Liability :-a) Demand if any, on Income Tax, Sales Tax etc. on pending cases to be accounted for in year which the case will be

decided, however at present there is no demanded liability which is known to the best of our knowledge.b) Accounting provision for employee benefits like as Gratuity, Bonus etc. to be accounted for in the year in which

these will declared by the project management.

6. All the figures reflecting in the "Project Financial Statement " are in Indain Rupees.

For, Laxmi Tripti & AssociatesChartered AccountantsFRN. 009189C

(CA PrffkhrSaeTra > * jjPartner Manar Finance Finance ControllerM. No. 414991


Documents

LAXMI TRIPTI & ASSOCIATESdocuments.worldbank.org/curated/en/... · policies and notes thereon, give a true and fair view subject to our observations in the management letter attached: