Public Disclosure Authorized Äudit Office olthe People's Republic of China Public Disclosure Authorized Audit Report PhJR C 2018] 21 9 ÄHI AUDIT REPORT C2018] NO. 21 Public Disclosure Authorized ',Nme: Anhuj Xuancheng Infrastructure for Industry Relocation Project Financed by the World Bank 8270CN 8270CN Public Disclosure Authorized Entitv: World Bank Project Management Office of Xuancheng Economic and Technological Development Zone 2017 Ye': 2017
Contents 11. Fnancial Statements and Notes to the Financial Statements. i. Balancc Sheet... ii. Summary of Sources and Uses of Funds by Project Component. 7 iii. Statement of Implementation of Loan,ALreement... 9 (.. )............. 1 0 iv. Special Account Statemen... 10. )....1 v. N otes to the Innca S atements... 15 1... d.t.. R9... 18 1II. A udit F incdings and R ec om mirendationls...... 19 2
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2017 0 6 7 230001 86 551 646782 2 86 551 64678265
1. Auditot', Opinioll Atiditm's Opinion H."i11 1ro'ect Manaenient Office of Xuanchen,, Econojn*c and Cloplnent zone the special, purpose financial statements (froi page * to page hl!' Xtiancheng I nfiastru ct Lire lor Industry Relocation Project lie NVorld Bank, comprise the Balance Sheet as of "'017. the Summary of Sources and Uses of Funds by Pro'ject nt. the Statenlent of Iniplementation of Loan Agreement and the Account Statement Ior the year then ended, and Notes to th e cial Statements. Pro'ect Lntitv and Anhui Provincial Finance Department's Responsibility for the Financial Statements T, 11C reparation of the Balance Sheet the Surnmary of' Sources and t.'sos of Hy Pr( Ject Component and the Statement of Implementation of Loan _V,2nient is the responsibility of your entit,,,, while the preparation of the Account Statement is the responsibility of Anh,lii l)ro\,1ncial Firiance which includes: :I iiing and fali I P In present ng the acconipanying financial statements accoi,dance with Chinese accounting standards and system, and the eql.,irlments of the project loan agreement; Desianing, implementing and inaintaming necessary internal control to,,ure that the financip,11 statements are free from material inisstatement., % 1, eth or d u c, to fra Lid or error. Auditor's Responsibility Our iesponsibility is to express an opinion on these financial staternents based on otir audit. We conducted our audit in accordance with The Government,Auditing Standards of the People's Republic of China and Imernational Standards on Auditing. Those standards require that we coiriply 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 peilorinim, procedures to obtain audit evidence about the ainotints and discloslires in the financlil statements. The procedures selected depend on the auditor's judgment, includimz the assessment of the risks of matcrial iiiisstateinent of the financial statements, whether due to fraud or crror. In making, those risk assessments, the auditor considers internal control
relevant to the entit Is' preplaration and fair presentation of the financial stateients in order to design audit procedures that are appropriate in the circumstances., but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evatuating the appropriateness o I accounting policies used and the reasonableness of accounting estimates made by inanagement, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is appropriate and sufficient to provide a basis for our audit opinion. Opinion In our opinion, the financial statements identified in the first paragraph present fairly, in all material respects., financial position of Anhui Xuancheng Infrastructure for Industry Relocation Project financed by the World Bank as of December 31Q, 201b, its financial receipts and disbursements, the project implementation and the receipts and disbursements of the special account for the year then ended in accordance with Chinese accounting standards and system, and the requirements of the project loan agreement. Other Matter We also examined the withdrawal applications and the attached documents subued to the World Bank during the period. In our opinion, those docum2ent's Co <it tie projeict loan agreement and can serve as basis for loan wira a. The audi' ('s 01 Olinion and two more parts hereinfte: Findings and Rce onin,ul o he Financial Statements, Audit Anhui Provincial Audit Ofice o the People's Republic of China June 27, 2018 Address: No. 272 Tunxi Road. Hefei City. Anhui Province. P.R. China Postcode: 230001 Tel.: 8655164678262 Fax: 8655164678265 The English translation is for the convenience of report users; Please take the Chinese audit report as the only official version. 4
Finani Statements and Notes to the Finatncial Statiements nea hnec BALANCE SHEET I 2 I 31 3' A so Decembe 1 L 20 1) nrtructure fr Industrial Relocation Project Financed by the \Vri 3 pment Zone r ec Manag,ement Office of Xuancheng Economic Cu 1n Beign Lani [alnce Ending Kilance 'Soulie f n Nio B ning ilance i 0 i, 37 I36 420 525,8 i Total Pluec 28 81 88.675 1 Appropration ¾~ IFnd os 3 Project Cap ta id Caplita 29 df Total Proj. lct La i 14.161,70.30 29I509 48i ¾ i 0 61 4 2 8Tota]l P 4,161 0 0 2 1,50(n i) ii > 4 o 9 Techn ca 36 i Loin 2 Coop rtni 2,111int Cc F i1inci (2) DuomeILstic Loan 1 2 6 980,'ý 969.12 3M 392' 050 8 39 12 nwi Other Loan 13 6 980 ' 969 12 159 0)50.68 Appropritio o 40. Invesiment L.oan eial Accou,snt o be conitinudu) 14 4 i i i 19 98) 7 53 5 In,cludin W iorld Ban 4,t, Ii 'i > 42 15 Bond lund _LOan
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( wq ) * p iv. Special Account Statenient ýý A W p 4 1k SPECIAL ACCOLJNT STATEMENT 11,11 flil ýk 7,` 20 17 12 Pi 3 1 (Fol thý, period endýýd December 1, 2017) DcIio,,,Itorý Ibnk: Hefei \ý~gnda branch, China A nh ui X Liancheli" h,,, ýik 5 12714880000003,88 fl pý,1,«\ Account No. 5 127/ 1,188000000388 currelley: USD Amomit 31)(,92ýý 10 28.1 letaj Lamed this Pcnod [f m ýpecial Aýco!Int 80467 Total Anwunt Edunded tlus I'enod t,ý CoNQr Ineligible Tøtý11 A1T1UUlit \Vitlidraýýn this Penød øta S c, rý i c,ý C h ýi i li i p eri od i l n o t I i ic I i d ed i i A 1) e A l I CU I I i i i RI Enduw Balance be colitintled 10
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1 1 *2 2 3 4 23 2 3 1 2 8 9 30 2 164 1&,000,00( 9 () 01,0 1.219,975,0 016 6 1,5 B&,9,&o 6 8 0 1,on,5 0 2 3.1 2000 13 3.2 1 1 H 3.3 l 12
3.4 2017 2 31 t 51)1 6.5342 4 4.1 20 12 31 420,525,846.65 26 32 73 618.95 88,703,190 8 10,8 9 4.2 2017 12 3 392,050,68 4.3 2 7 12 31 4.4 2 12 31 139,2 688.92 1 1 3.0 13.63 4.5 2017 12 31 291,509,483.50 44,612,880.46 29 509,483.50 51 1 4.6 2017 12 31 31,729,843.04 13
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v. Notes to the Financial Statenients Notes to the Financial Statenients 1. The Bricf Introduction oftlie Project 1,2 ä _ý2 The loan nuiiibev olånhui 11111, t' Project s T". 0111ý:.1c", CCOIIOIMC. SOCIal J"ýý in XFTDZ. The proicel consi,ýl' C), 0 31 StOr143\\atel, dra11,11(_1c ýýjier SUI'TýV IýCIWO?ks and Scýýcraý),2 netxýorks. 00 waste waler tiatiiiit and discharge, (III) insiitution,ý1 dex,clopiiýeni and buildim). The Pro"ect Aareenient. lias been sllned on April 23t13. 2013. The aý,rceinent came into force on Novcinber I 4thl. 2013 and will be conipleted on September 30111, 20 18. The total investnient ofthe prqject is RMB 2,164,976.000 yuan, of which USD 150,000,000 is World Bank Loan, which is equal to RM13 945.001,000 ytian, and the other RMB 1,219,975,000 yuan is doinestie counterpart funds. Based on the Proposed Loan Restructuring Plan approved by the bank on Decernber 31,27017, the total investinent of the proýjec! was reduced to 1,588,535,900. Ofwhich USD 90,000,000 is World Bank Loan, which is equal to RMB 566,998,900 yuan, and the other RMB 1,021,537,000 vuan is doniestje counterpart funds. 2. The Scope of the Preparation of the Financial Staternents The financial staternents cover the fmancial staternents of World Bank Project Ecoiioiii'c tr Management Office of Xuancheiii i and Teeiiiiolooleii Development Zone and the special account statement rnaintalned byr Finance Department of Anhui Province. 3. Main Accounting Policies Applied 3.1 The financial statements were prepared based on the Accounting Approach of World Bank Projeets authorized by Ministryý of 1'inance, China with reference No. 13. Caljlå in 2000. 3.2 The fiscal year of the projlect is frorn January, I to December 31 of the year. 15
3.3 The accrual basis is employed for the accounling, and the debit and credit double entry bookkeeping accounting is adopted. RMB is used as the recording currency of bookkeepinu. 3.4 The exchange ratc adopted in the financial statements is same to the rate used for loan disbursement, which is also based on the People's Bank of China. The rate is 1 USD= RMB 6.5342 yuan. 4. Explanation of Main Accounts 4.1. Project Expenditures The cumulatike expenditures of the project by the end of December 3 1, 2017 were RNIB 420.,25.846.65 yuan, which account for 26.47% of the total investment plan. In which, the cumulative expenditures of roads. bridges and water supply were RMB 324,734,618.95 yuan, which accounts for 23.59% of the plan, the cumulative expenditures of wastewater treatment were RMB 88,703,190.38 vuan. which accounts for 49.11% of the plan, the cumulative expenditures of institutional development and capacity building were RMB 10,855.906.1 5 yuan, which accounts for 34.46% of the plan. 4.2. Cash and Bank By the end of December 31. 2017. the balance of cash and bank was RM1B 31,392.050.08 yuan. which was cash in bank. 4.3. Prepaid and leceiva>e Its balance at December 3. \01 \as RMB 10.650.794.71 yuan. 4.4 Project Appropriation Funds By the end of December 3 1. 201 i. the cumulative counterpart funds were RMB 139,208,688.92 yuan. which account for 13.63% of the total plan of RMB 1,021,537,000.00 yuan, and all funds were raised up by financial budgets of Xuancheng Municipal Government. 4.5 Project Loan The balance at December 31, 2017 was RM1B 291,509,483.50 yuan, including USD 44,612,880.46 of 1BRD, which is equivalent to RMB 291,509,483.50 yuan and accounts for 51.41% of the total plan. 4.6 Payable 16
ihe balance at December 31, 2017 was RMB 31,729,843.04 vuan. 4.7 Retained Earnings The balance at December 31, 2017 was RMB 1 20.676.59 vuan. 5. Special Account The Special Account of this project was set in HefeJ Wanda Branch, China Ever Bright Bank, with the account number of 51271488000000388 and USD as currency U!nit. The amiount advanced by World Bank was USD 4,000,000. The beginning balance of 2017 was USD 396.925.20, the total amount deposited by World Bank in 2017 was USD 28.155.952.35. the total interest earned this period if deposited in special account was USD 804.67, and the total amount withdrawn was USD 25,54.7854. Thus. the balance by the end of December 31. 2017 was U 9.)403.68 6. Other Clarification No. 17