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Financial Management and Analysis of Projects :
5. Reporting and Auditing :
5.3. Financial Reporting
5.3.7. Annual Financial Statements for Revenue-Earning Projects and EAs
5.3.7.1. Borrowers are asked to provide
ADB with annual financial statements in respect of each autonomous
or semi-autonomous EA that plays a substantive role in implementing
and/or operating a project having revenue-earning characteristics.
These financial statements should contain details sufficient to
identify the financial performance and status of the project/EA.
Normally these should comprise:
- A Balance Sheet showing the financial position of the entity, including
the project, as at the close of each fiscal year.
- An Income (or Operating, or Income and Expenditure, or Profit and
Loss) Statement.
- A Cash Flow Statement that should disclose the cash flows during
each Fiscal year.
- Notes to the Financial Statements.
5.3.7.2.
Financial statements should include comparative figures for the
preceding fiscal year; with appropriate supporting schedules and
explanatory notes (e.g., methods of revaluation of assets; unusual
conditions that affected performance). Supplementary financial statements
should be provided containing information requested by ADB with
respect to items requiring additional disclosure or explanation.
.
5.3.7.3. At appraisal, the proposed
EA would be expected to provide these statements with an auditor's
opinion and report for the most recent years of its performance
as an established agency, usually 5 fiscal years preceding the date
of appraisal.
5.3.7.4. During project implementation,
an extended form of the PMR is requested for each autonomous or
semi-autonomous EA that plays a substantive role in implementing
and/or operating a project having commercial or revenue-earning
characteristics. Unaudited interim Cash Flow Statements and Balance
Sheets, may be required for specified periods of each fiscal year-for
example, each quarter or semester- in addition to audited
annual financial statements.
5.3.7.5. An Income Statement should
report the results of operations for the period covered under major
categories of financial information. These may embrace, but are
not limited to the following: (i) operating revenue by categories
of sales or service charges; (ii) operating expenses by category
(e.g., labor, supplies, and administration; cost of sales, or transmission
and distribution, etc.); (iii) depreciation; (iv) income from sources
other than operations; (v) taxes on income; (vi) interest and financing
costs charged to operations; and (vii) net income.
5.3.7.6. The Cash Flow Statement should
show, during the period covered by the Income Statement, the origins
of all cash flows and their use in financing the project, any expansion
of the entity, debt service, working capital, and, where appropriate,
payment of dividends on equity or other forms of surplus funds distribution.
ADB prefers that this Cash Flow Statement be designed and presented
in a manner which illustrates the cash flow of the entity during
the period, with separately identified information on noncash and
working capital transactions.
5.3.7.7. The Balance Sheet should
be drawn up at the close of a reporting period and should display
fixed, current and other assets, with liabilities, particularly
long and short-term debt, paid-up equity, and accumulated earnings
and surpluses. To best illustrate the nature and business of the
entity, the Balance Sheet should be compiled in a manner that highlights
such important characteristics as the capital structure, the liquidity
position, or the reserves.
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5.3.6. Annual Financial Statements for a Non-Revenue-Earning Project | Next
5.3.8. Supplementary Financial Statements |
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