TO THE BOARD OF DIRECTORS OF CHENNAI METROPOLITAN
WATER SUPPLY AND SEWERAGE BOARD
We have audited the attached Balance Sheet of Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB), as at 31st March 2011, the Income and Expenditure Account for the year ended on that date and the Schedules annexed thereto. These financial statements are the responsibility of the Management of CMWSSB. Our responsibility is to express an opinion on these financial statements based on our audit.
1. We conducted our audit in accordance with the Standards on Auditing generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Management, as well as evaluating the overall presentation of financial statements .We believe that our audit provides a reasonable basis for opinion.
2. Further to our comments referred to in paragraph 1 above , we report that :
- We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.
- In our opinion proper books accounts have been kept by CMWSSB, so far as it appears from our examination of such books.
- The Balance Sheet and Income and Expenditure Account referred to in this report are in agreement with the books of accounts.
- Attention is invited to the following :
- Schedule Q- Notes on Balance Sheet - Note No. II - 1 and 2 -Grants from Government - regarding transferring Project in Progress (PIP) - Second Chennai Project (SCP) for Rs.275.23 Crores and capital expenditure incurred out of Devolution Fund of Rs.89.37 Crores, to Fixed Assets without either transferring respective Grants towards reduction in the said Fixed Assets' value or treating the Grants as deferred income, in terms of Accounting Standard (AS) - 12 - issued by The Institute of Chartered Accountants of India (ICAI), the impact whereof on the Accounts are not ascertainable.
- Schedule Q- Notes on Balance Sheet - Note No. VI - 1 - Fixed Assets- regarding PIPs put in use but not transferred to Fixed Assets amounting to Rs.119.20 Crores - depreciation is provided at an adhoc rate, instead of at the applicable rates, the impact whereof on the Accounts are not ascertainable.
- Schedule Q- Notes on Balance Sheet - Note No. VII -1, 2 & 3- the impact of the following items on the accounts is not ascertainable- (a) non reconciliation of 16 Current Accounts, whose balance as of 31st March 2011 is Rs.15.62 Crores. (b) Non-nullification of credit balance of Rs.6.07 Crores in Collection Control Account and (c) Non-reconciliation of credit balance of Rs.5.93 Crores in H.O/Area Transaction Account.
- Schedule - Q -Notes on Balance Sheet - Note No. V - 3 -Non recognition of Deferred Tax in terms of AS - 22 - issued by the ICAI, the impact whereof on the Accounts are not ascertainable.
- Schedule - Q -Notes on Income and Expenditure Account - Note No. I -1,2,3- Terminal Benefits to Employees - regarding non provision of accrued liability in respect of Pension, Gratuity, and Leave Encashment as on 31st March 2011, the impact whereof on the Accounts are not ascertainable.
- Schedule - Q - General Notes - Note No. 2 - regarding Third party balances which are subject to confirmation and reconciliation, the impact whereof on Accounts is not ascertainable.
- Subject to our comments in paragraph d) above - we report that in our opinion and to the best of our information and according to the explanations given to us the said Balance Sheet and the Income and Expenditure Account read together with the
Notes thereon and Schedules attached thereto give a true and fair view, in conformity with the accounting principles generally accepted in India.
- in the case of Balance Sheet ,of the state of affairs of CMWSSB as at 31st March 2011 ,and
- in the case of the Income and Expenditure Account of the Deficit (Excess of Expenditure over Income) of CMWSSB for the year ended on that date.