AUDITOR'S REPORT Audit completion date: 18-12-2017. Secretary Ministry of Finance Finance Division Bangladesh Secretariat, Dhaka. I. We have audited the accompanying Financial Statement of "Investment Promotion and Financing Facility (IPFF) Project" financed by IDA credit no. 4169-BD and 4693-BD as at 30t" June 2017 and for the year then ended. The preparation of the Financial Statement is the responsibility of management. Our responsibility is to express an opinion on the Financial Statement based on our audit. II. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we plan & perform our audit to obtain reasonable assurance about whether the Financial Statement is free from material misstatement. An audit includes examining on a test basis, evidences supporting the amounts and disclosures in the Financial Statement. An audit also includes assessing the accounting principles used & 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. III. In our opinion, the Financial Statement gives a fair view in all material aspects, except of financial position of "Investment Promotion and Financing Facility (IPFF) Project" as at 30th June, 2017 and the results of its operations and cash flows for the year then ended in accordance with cash basis of accounting followed by the Government of Bangladesh. IV. Opinion status: Unqualified. (Mohammad Amimul Ehsan Kabir) Deputy Director For Director General Foreign Aided Project Audit Directorate Tel: 9362478. Mizan-C:\Users\Admin\DesktoplDraft Report 16-17\Team-21\1575-Draft - Copy.doc 7 INVESTMENT PROMOTION AND FINANCING FACILITY (IPFF) PROJECT IDA CREDIT NO. : 4693-BD PROJECT FINANCIAL STATEMENT FOR THE YEAR ENDED 30 JUNE, 2017 (in Lakh Taka) Cumulative to Cumulative to 30 ESOURCES Notes FY 2016-17 30 June, 2016 June,'2017 lovernment of Bangladesh 1 15,141.20 18,645.80 33,787.00 oans from Lender/Donor (IDA) 2 162,446.09 9,242.49 171,688.58 1ther Sources 3 854.36 138.64 993.00 ,pening Cash Balance 4 4,304.78 OTAL RESOURCES 178,441.65 32,331.71 206,468.58 KPENDITURE 3tegory 1 (On-lending component) 5 170,128.20 31,788.11 201,916.31 ategory 2 (Technical assistance component) Operating and Administration Cost 815.80 121.25 937.05 Training, Seminar and Workshop 1,098.16 213.17 1,311.33 i) Procurement of Goods & Consultants 2,094.71 209.18 2,303.89 )TAL EXPENDITURE 174,136.87 32,331.71 206,468.58 ,OSING CASH BALANCE ecial Account (DOSA) 4,303.78 - oject Operating Account No. 0003-0210014364 1.00 - - )erating Account of Field offices )TAL-CLOSING CASH BALANCE 4,304.78 - )TAL EXPENDITURE ANDl CLOSING CASH BALANCE 178,441.65 32,331.71 206,468.58 JAh ed Jamal) Executive Director & Project Director Phone: 9530491 NOTES TO THE FINANCIAL STATEMENT 1. GOVERNMENT OF BANGLADESH Government of Bangladesh provided funds to cover GoB's share of eligible expenditures of the Project as specified in the Financing Agreement and TPP. During the Project's tenure GOB contributed a total of Taka 36,041.20 lakh. After covering GoB's share of eligible expenditures, Taka 2,254.20 lakh has been refunded to the GoB after the expiry of the Project. Hence, the resources provided by GoB stand as follows: (In Lakh Taka) Inception to 30th June, For the year ended Inception to 30th jUne 2016 30t June, 2017 2017 1 2 3 4=(2+3) Disbursement by GOB 15,141.20 20,900.00 36,041.20 Less: Refund to GOB - 2,254.20 2,254.20 Total: 15,141.20 18,645.80 33,787.00 2. LOAN FROM LENDER/DONOR IDA provided a total of USD 241.95 million equivalent to Taka 1,87,799.11 lakh to cover its share of eligible expenditures of the Project as specified in the Financing Agreement and TPP of the Project. Prior to the expiry of the Project, it was estimated that USD 20.00 million would remain unutilized. As such USD 20.00 million equivalent to Taka 15,756,00 lakh was refunded to IDA upon partial debt cancellation. In addition to that, USD 0.44 million remained unspent after paying all expenses incurred within the tenure of the Project i.e. 31 December, 2016. Subsequently, USD 0.44 million equivalent to Taka 354.53 lakh has been refunded to IDA. Hence, the resources provided by IDA stand as follows: (In Lakh Taka) Inception to 30th June, For the year ended Inception to 30th June, 2016 30th June, 2017 2017 1 2 3 4= (2+3) Initial Advance 7,279.00 7,279.00 Direct payment - - - RPA (DA Procedures) 1,55,167.09 25,353.02 1,80,520.11 Non SOE Procedures - - Total Received 1,62,446.09 Less: Refund'to IDA - 16,110.53 16,110.53 Total IDA Resources 1,62,446.09 9,242.49 1,71,688.58 3. OTHER RESOURCES Since DA based disbursement method was used for IDA Credit No. 4693-BD, IPFF had to maintain a foreign currency denominated account (DOSA: 4693-BD) for withdrawal and utilization of IDA fund. On the other hand, accounting currency of GoB is Bangladesh Taka. Therefore, USD balances lying in DOSA: 4693-BD account were translated into Taka each month to prepare financial statement. In doing so, exchange gain or loss whichever arises are aggregated and shown in other resources. However, this gain or loss accrued to IPFF has been used for the sole purposes of the Project. The resources under this category are as follows: (Figures in Lakh Taka) Inception to 30th For the year ended Inception to 30th June, 2016 30th June, 2017 June, 2017 1 2 3 4=(2+3) Project revenues - - Exchange gains/iosses 854.36 138,64 993.00 Total 854.36 138.64 993.00 NOTES TO THE FINANCIAL STATEMENT 4. CASH: IPFF maintained three bank accounts namely Dollar Special Account (DOSA-4693 BD) and IPFF Operating Account for IDA contribution and local currency account (TAKA: 4693-BD) for GOB contribution. DOSA-4693 BD and TAKA: 4693-BD were maintained with the Forex Reserve and Treasury Management Department of Bangladesh Bank. On the other hand, IPFF Operating Account was maintained with Trust Bank Limited, Sena Kalyan Bhaban Branch. The unspent balance lying with DOSA: 4693-BD and TAKA: 4693-BD accounts have been refunded to IDA and GoB respectively. Year-end cash balances of these accounts are as follows: (In Lakh Taka) Inception to 30h For the year ended Inception to 30th June, 2016 30th June, 2017 June, 2017 1 2 3 4 Cash on hand - Special Account (DOSA: 4693 BD) 4303.78 TAKA: 46938D -B Project Operating Account/ Field stations 1.00 Total 4,304.78 - - 5. On-lending component: Under On-lending Component of IPFF (IDA Credit No. 4693-BD), a total of Tk. 201916.31 lakh was disbursed against 7 power plants, 3 water treatment plants, 2 NTTN projects, 1 inland container depot, 1 dolphin jetty, 1 dry dock and 1 hospital project. The detailed information of the projects is given below: (In Iakh Taka) SI Name of Project Name of PFI IPFF Lending No. Total Taka P.A. 01. United Power Generation & Distribution Ltd Dutch-Bangla 747.00 - 747.00 (44 MW Power Plant, Chittagong EPZ) Bank Ltd 02. United Power Generation & Distribution Ltd Dhaka Bank Ltd, 1121.00 - 1121.00 (35 MW Power Plant, Dhaka EPZ) Eastern Bank Ltd & IIDFC Ltd 03. Baraka Patenga Power Ltd United 17085.56 - 17085.56 (50 MW Power Plant, Patenga, Chittagong) Commercial Bank Ltd & Trust Bank Ltd 04, Dhaka Southern Power Generations Ltd NCC Bank Ltd 20891.40 - 20891.40 (55 MW Power Plant, Nababganj, Dhaka) 05. Midland Power Company Ltd Eastern Bank Ltd, 14899.52 - 14899.52 (51 MW Power Plant, Ashuganj, Mutual Trust Brahmanbaria) Bank Ltd & Trust Bank Ltd 06. United Ashuganj Energy Limited Dhaka Bank Ltd, 45513.00 - 45513.00 (200 MW Power Plant, Ashuganj, Trust Bank Ltd & Brahmanbaria) Mutual Trust Bank Ltd 07. Dhaka Northern Power Generations Ltd Trust Bank Ltd 22741.45 - 22741.45 (55 MW Power Plant, Singair, Manikganj) 08. KDS Logistics Ltd Dhaka Bank Ltd, 15001.00 7900.00 7101.00 (Inland Container Depot, Sitakunda, IDLC Finance Ltd, Chittagong) United Finance Ltd, Trust Bank Ltd & UFIL 09. Karnafuly Dry Dock Ltd Dhaka Bank Ltd, 14433.44 - 14433.44 (sub-project: B Jetty, Badalpura, Chittagong) Trust Bank Ltd & 2 NOTES TO THE FINANCIAL STATEMENT SI Name of Project Name of PFI IPFF Lending No. Total Taka P.A. 10, Karnafuly Dry Dock Ltd Dhaka Bank Ltd & 1142.31 1142,31 (sub-proJect: A Dry Dock, Badalpura, Trust Bank Ltd Chittagong) 11. D-Water Tech Ltd Dhaka Bank Ltd 1000.00 1000.00 (Water Treatment Plant, Chittagong EPZ) 12. M/S Sigma Engineers Ltd NCC Bank Ltd 817.60 817.60 - (Water Treatment Plant, Comilla EPZ) 13 M/S Sigma Engineers Ltd NCC Bank Ltd 901.60 901.60- (Water Treatment Plant, Adamjee EPZ) 14. Fiber@Home Ltd AB Bank Ltd, 14975.63 5522.00 9453.63 (Expansion of Nationwide Optical Fiber United Telecommunication Transmission Network) Commercial Bank Ltd, Trust Bank Ltd, IIDFC Ltd, GSP Finance Co (BD) Ltd & Lanka- Bangla Finance Ltd 15. Summit Communications Ltd Prime Bank Ltd, 14416.00 2416.00 12000.00 (Expansion of Nationwide Optical Fiber Trust Bank Ltd & Telecommunication Transmission Network) IIDFC Ltd 16. Imperial Hospital Ltd United 16229.80 16229.80 - (353 Bed Tertiary and General Hospital, Commercial Bank Pahartali, Chittagong) Ltd, Trust Bank Ltd & GSP Finance Co (BD) Ltd Total 201916.31 33787.00 168129.31 AUDIT OPINION ON SOE We have audited the statement of expenditure (SOE) of the "Investment Promotion and Financing Facility (IPFF) Project" for the year ended 30th June, 2016. Submitted to the World Bank for reimbursement of expenditure in accordance with the IDA credit no. 4169- BD and 4693-BD. The audit was conducted following International Standards on Auditing. Accordingly it included such tests of the accounting records and supporting documentation, review of system of internal control. So, per exists adopting necessary auditing procedures that the considered essential under the circumstances. Withdrawals/SOE particulars: The project authority claimed U$$ 32,639,203.06 (Application No-19), but Fund was released U$$ 32,338.034. Withdrawal application SOE particulars are shown in the annexure- "A". Opinion: In our opinion, except as mentioned in our findings, the statement of expenditure (SOE) submitted can be relied upon to support the expenditure incurred for the purpose of the project as specified in the particulars of withdrawal application. (Mohammad Amimul Ehsan Kabir) Deputy Director For Director General Foreign Aided Project Audit Directorate Tel: 9362478. Mizan-C:\Users\Admin\Desktop\Draft Report 16-17\Team-2 1\l 575-Draft - Copy.doc 15 AUDITOR'S REPORT ON SPECIAL ACCOUNT (DOSA) 1. We have audited the special account statement of "Investment Promotion and Financing Facility (IPFF) Project" for the year 2016-2017 under provision of IDA credit no. 4169-BD and 4693-BD and dated June, 2017. 2. Our audit was carried out in accordance with International Auditing Guideline. Accordingly our audit included such review of systems of internal control, test of the accounting records and supporting documents, verification of account balance and other auditing procedures that are considered necessary under the circumstances. 3. The accompanying Special Account Statement was prepared on the basis of cash deposits and withdrawal for the purpose of complying with above credit Agreement. Annexure-"B". 4. In our opinion, the receipts were properly accounted for withdrawals are made for the purpose of the project. Special Accounts Statement (DOSA) gives a fair view of the beginning and ending balance and the account activity for the year 2016-2017 on the basis of cash deposits and withdrawals. (Mohammad Amimul Ehsan Kabir) Deputy Director For Director General Foreign Aided Project Audit Directorate Tel: 9362478. Mizan-C:\Users\Admin\Desktop\Draft Report 16-17\Team-21\1575-Draft - Copy.doc 16