audited financial statements€¦ · financial position as of 31 december 2015 and the related...

Republic of the Philippines

DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS

26 July 2016

Mr. Georges B. Darido Senior transport Specialist The World Bank 1818 I-I Street. N.W. Washington DC 20433 LISA

Attention: Mr. Tomas Sta. Maria Financial Management Specialist

Dear Mr. Darido,

Attached is the Audited Financial Statements re: Cebu Bus Rapid Transit Project of this Department for the calendar }ear ended December 31. 2015 and the accompanying Management

Letter.

It should be noted that items b and c of the Commission on Audit (COA) recommendations had already been complied with.

Also attached are the Interim financial Reports for the quarter ending June 30, 2016.

Very truly yours,

LYDIA S. N ALVAR Director, Comptrollership Service

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AUDITED FINANCIAL STATEMENTS

Republic of the Philippines COMMISSION ON AUDIT

Commonwealth Avenue. Quezon Cm. Philippines

INDEPENDENT AUDITOR'S REPORT

The Secretary Department of Transportation and Communications Ortigas, Mandaluyong City

We have audited the accompanying financial statements of the Cebu-Bus Rapid Transit (BRT) Project financed under the International Bank for Reconstruction and Development (IBRD) Loan No. 8444-PH of the World Bank, including Clean Technology Fund Loan No. TF017646-PH, and Credit Facility Agreement with the Agence Francaise de Developpement, and implemented by the Department of Transportation and Communications — Office of the Secretary (DOTC - OSEC), which comprise the Statement of Financial Position as of December 31, 2015, and the related Statement of Financial Performance, Cash Flows, Changes in Net Assets/Equity and Comparison of Budget and Actual Amounts and Statement of Sources and Uses of Funds for the year then ended, and a summary of significant accounting policies and other explanatory information.

Managelllent .5 responsibility for the, financial statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Philippine Public Sector Accounting Standards (PPSAS), and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error.

Auditor responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Philippine Public Sector Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosure in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatements of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements 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 internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Basis for Qualified Opinion

The following errors and deficiencies were noted which affected the fairness of the presentation of the financial statements:

1. The balance of the Cash in Bank — Foreign Currency, Savings Account (CIB-FCSA) of the Working Fund for the Cebu BRT Project amounting to P159,132,497.25 as of December 31, 2015 was inaccurate due to the non-recording of the gain on foreign exchange (FOREX) amounting to P9,123,82022 resulting in the understatement of the CIB-FCSA and the corresponding revenue account

2. The year-end balance of the Construction in Progress (CIP) — Infrastructure Assets account of P804,354.79 of the Working Fund for the Cebu BRT Project is unreliable due to understatement of P4,256,959.38 as a result of erroneous charging of disbursements under Maintenance and Other Operating Expense instead of CM account. Likewise, the expense account was overstated for the same amount.

Qualified Opinion

In our opinion, except for the effects of the matters discussed in the preceding paragraphs, the financial statements referred to above present fairly in all material respects, the financial position of the Cebu CBRT Project of Department of Transportation and Communications as of December 31, 2015, and the results of its financial performance, cash flows, changes in net assets/equity and the comparison of budget and actual amounts for the year then ended, in accordance with applicable laws, rules and regulations and in conformity with the PPS AS.

COMMISSION ON AUDIT

By

AVE1y1LDA B. TORRES Supervising Auditor

Audit Group B — DOTC 1

July 25, 2016

AUDITED FINANCIAL STATEMENTS

Republic of the Philippines

DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS

Appendix A

STATEMENT OF MANAGEMENT RESPONSIBILITY FOR FINANCIAL STATEMENTS

CEBU BUS RAPID TRANSIT PROJECT FUND 102

The management of Department of Transportation and Communications (DOTC) -Central Office (DOTC-CO) for the Cebu-Bus Rapid Transit (Cebu-BRT) Project is responsible for all information and representations contained in the accompanying Statement of Financial Position as of 31 December 2015 and the related Statement of Financial Performance, Statement of Cash Flows, Statement of Changes in Net Assets/Equity-, Statement of Comparison of Budget and Actual Amount and Notes to Financial Statements for the year then Ended. The financial statements have been prepared in conformity with Philippine Public Sector Accounting Standards and generally accepted state accounting principles, and reflect amounts that are based on the best estimates and informed judgment of management with an appropriate consideration to materiality.

In this regard, management maintains a system of accounting and reporting which provides for the necessary internal controls to ensure that transactions are properly authorized and recorded, assets are safeguarded against unauthorized use or disposition and liabilities recognized.

LYDIA S. M LVAR

2:vector Ill, Comptrollership Service DANTE M. LANTIN Assistant Secretary

‘-29-/4 Date Signed

o '44 Date Signed

ThLEFIX: (632)7214925 I RI INN INF) 790-330017903400 3400 7.1()TC. ACTION CENTER HOTLINE: 7390

TI IL COLA AIM A 1669413

1555 3.1.333DALUTONG CITY. PTHUPPINES

DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS STATEMENT OF FINANCIAL POSITION Fund 102 - Cebu Bus Rapid Transit Project

As at December 31, 2015 (In PhP)

ASSETS

Current Assets Cash and Cash Equivalents Other Current Assets

Total Current Assets

Note 2015

3.7. 5 6

P 193.593,736.27 30.758.493.75

224,352,230.02

Non-Current Assets Property, Plant and Equipment 3.3,7 804,354.74

Total Non-Current Assets 804,354.74

Total Assets 225,156,584.76

LIABILITIES

Current Liabilities Financial Liabilities 8 2 ,104,329.50 liner-Agency Payables 9 20,387.49

Total Current Liabilities 2,124,716.99

Total Liabilities 2,124,716.99

Total Assets less Total Liabilities 223,031,867.77

NET ASSET/EQUITY Accumulated Surplus/(Deficit) 223,031,867.77

Total Net Assets/Equity P 223,031,867.77

This statement should be read in conjunction with the accompanying notes.

DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS STATEMENT OF FINANCIAL PERFORMANCE

Fund 102 - Cebu Bus Rapid Transit Project For the Year Ended December 31, 2015

(In PhP)

Note 2015

Revenue Service and Business Income

3.7.10 P 131,560.43

Total Revenue 131,560.43

Less Current Operating Expenses Maintenance and Other Operating Expenses 11 4256,958.98 Financial Expenses 12 465.25

Total Current Operating Expenses 4,257,424.23

Surplus/(Deficit) from Current Operations (4,125,863.80)

Net Financial Assistance/Subsidy 13 227,289,292.00

Surplus/(Deficit) for the period P 223,163,428.20


DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS STATEMENT OF CHANGES IN NET ASSETS/EQUITY


(In PhP)

2015

Balance at January 1 Add/(Deduct):

Changes in Accounting Policy Prior period errors

Restated balance Add/(Deduct): Changes in Net Assets/Equity for the

Calendar Year

Surplus for the period 223,163,428.20 Adjustment of net revenue recognized

directly in net assets/equity (131.560.43)

Balance at December 31 P 223,031,867.77


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DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS STATEMENT OF CASH FLOWS


(In PhP)

Note 2015

Cash Flows from Operating Activities:

Cash Inflows Receipt of Notice of Cash Allocation 13.1 P 226.831,378.56

Collection of Income/Revenues 10 131,560.43

Total Cash Inflows 226,962,938.99

Cash Outflows Remittance to National Treasury 131.560.43 Payment of Expenses 1,673,439.45 Remittance of Mandatory Deductions 1.566,004.69 Adjustment 19,386.56

Total Cash Outflows 3,390,391.13

Net Cash Provided by (Used in) Operating Activities 223,572,547.86

Cash Flows from Investing Activity

Cash Outflows Purchase/Construction of Property,

Plant and Equipment 29,978,811 59 Total Cash Outflows 29,978,811.59

Net Cash Provided by (Used in) Investing Activity (29,978.811 59)

Increase (Decrease) in Cash and Cash Equivalents 193,593,736.27

Cash and Cash Equivalents, January 1 Cash and Cash Equivalents, December 31 5 P 193,593,736.27

This statement should be read in conjunction with the accompanying notes..

DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNT

Fund 102 - Cebu Bus Rapid Transit Project For the Year Ended December 31. 2015

Particulars Note

Budgeted Amounts Actual Amounts on Comparable

Basis

Difference Final Budget and

Actual Original Final

RECEIPTS

Service and Business Income 10 131,560 131.560 131.560 Others - Working Fund 275,195.000 225,195.000 225,195.000 Total Receipts 225,326,560 225,326,560 225,326,560

PAYMENTS Maintenance and Other Operating Expenses - - 2,150,274 (2,150.274) Capital Outlay 1,385,721000 1,385,721,000 31,544.816 1,354,176,184 Financial Expenses - - 465 (465) Others - Remittance of Income - - Totai Payments 1,385,721,000 1,385,721,000 33,695,556 1,352,025,444

NET RECEIPTS/PAYMENTS (1,160,394,040) (1,160.394,440) 191.631,004 (1,352,025,444)

This siale177e171 should be read Io comuncrion with the accompotb no

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Department of Transportation and Communications Notes to Financial Statements

Cebu Bus Rapid Transit Project Fund 102

For the year ended December 31, 2015

1. General Information/Agency Profile

1.1 The financial statements of the Department of Transportation and Communications of the CEBU BUS RAPID TRANSIT were authorized for issue on June 29, 2016 as shown in the Statement of Management Responsibility signed by Director Lydia S. Malvar and Assistant Secretary Dante M. Lantin, the authorized representatives of the DOTC-OSEC.

1.3 The Department of Transportation and Communications (DOTC) was created by virtue of Executive Order No. 546, series of 1979. Subsequent legislations issued to organize the DOTC, both structurally and functionally were E0 No. 125 dated January 30, 1987, which was promulgated in conformance to E0 No. 5, series of 1986; BO No. 125-A dated April 13, 1987, in order to give further impetus to the declared policy of the State towards the maintenance and expansion of viable, efficient and dependable transportation and communication systems as effective instruments for the Department's objectives.

1.3 The mandate of DOTC is to act as the primary policy, planning, programming, coordinating, implementing, regulating and administrative entity of the executive branch of the government in the promotion, development and regulation of a dependable and coordinated networks of transportation and communications systems, as well as, in the fast, safe, efficient and reliable transportation and communications services. Its registered office is located in The Columbia Tower, Brgy. Wack-wack, Ortigas Avenue, 1555 Mandaluyong City, Philippines.

1.4 A SRI is a highly-quality bus-based transit system that delivers fast, comfortable, and cost-effective urban mobility through the provision of segregated right-of-way infrastructure, rapid and frequent operation. BRT essentially emulates the performance and amenity characteristics of a modem rail-based transit system but at a fraction of the cost. A BRT system will typically cost four (4) to twenty (20) times less than a tram or light rail transit (LRT) system and 10 to 100 times less than a metro system. Establishment of a transport system with around 33 bus stations and 176 buses that will run through the 23-km corridor from Bulacao to Ayala, with link to Cebu's South Road Properties (SRP) via dedicated and exclusive bus-ways and mixed traffic operation from Ayala to Talamban in Cebu City. Its objective is to improve overall performance of the urban passenger transport system in the Project Corridor in Cebu city in terms of the quality and level of service, safety and environmental efficiency.

The Project is funded through: Loans from World Bank (WB):

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For the year ended December 31.2015

International Bank for Reconstruction and Development (IBRD) Loan No. 8444-PH USD116,000,000 Clean Technology Fund Loan No. TF017646-PH USD 25,000,000

Loan from the Credit Facility Agreement with the Agence Francaise de Developpement BUR 57,500,000

GOP P 30.000,000

2. Statement of Compliance and Basis of Preparation of Financial Statement

2.1 The financial statements have been prepared, in accordance with and comply with the Philippine Public Sector Accounting Standards (PPSAS) issued by the Commission on Audit per COA Resolution No. 2014-003 dated January 24, 2014. The financial statements have been prepared on the basis of historical cost, unless stated otherwise. The Statement of Cash Flows is prepared using the direct method.

3. Summary of Significant Accounting Policies

3.1 Basis of Accounting

The financial statements are prepared on an accrual basis in accordance with the PPSAS. Income is recognized when earned and expenses when incurred and reported in the financial statements in the period to which they relate. Liabilities are likewise recorded in the books of accounts only upon acceptance of the goods/inventory/other assets and rendition of services to the Department.

Transactions in foreign currencies are initially recognized by applying the spot exchange rate between the function currency and the foreign currency at the transaction. At each reporting date:

• Foreign currency monetary items are translated using the closing rate; • Nonmonetary items that are measured in terms of historical cost in a foreign

currency shall be translated using the exchange rate at the date of the transaction; and

• Nonmonetary items that are measured at fair value in a foreign currency shall be translated using the exchange rates at the date when the fair value is determined.

Exchange differences arising (a) on the settlement of monetary items, or (b) on translating monetary items at rates different from those at which they are translated on initial recognition during the period or in previous financial statements. are recognized in surplus or deficits in the period in which they arise, except as those arising on a monetary item that forms part of a reporting entity's net investment in a foreign operation.

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3.2 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and cash at bank. deposits on call and highly liquid investments with an original maturity of three months or less, which are readily convertible to known amount of cash and are subject to insignificant risk of change in value. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short term deposits as defined above.

3.3 Property, Plant and Equipment

Recognition

An item is recognized as property, plant and equipment (PPE) if it meets the characteristics and recognition criteria as a PPE. The characteristics of PPE are as follows:

• tangible items; • are held for use in the production or supply of goods of services, for

rental to others, or for administrative purposes; and • are expected to be used more than one reporting period.

An item of PPE is recognized as an asset if

• It is probable that future economic benefits or service potential associated with the item will flow to the entity: and

• The cost of fair value of the item can be measured reliably.

Measurement at Recognition

An item recognized as property, plant, and equipment is measured at cost.

A PPE acquired through non-exchange transaction is measured at its fair value as at the date of acquisition.

The cost of the PPE is the cash price equivalent or, for PPE acquired through non-exchange transaction, its cost is its fair value as at recognition date.

Cost includes the following:

• Its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates;

• Expenditure that is directly attributable to the acquisition of the items; and

• Initial estimates of the costs of dismantling and removing the item and restoring the site on which it is located_ the obligation for which an entity incurs either when the item is acquired. or as a consequence of

9


For the year ended December 31. 2015

having used the item during a particular period for purposes other than to produce inventories during that period.

Measurement after Recognition

After recognition, all PPE are stated at cost less accumulated depreciation and impairment losses.

When significant parts of PPE are required to be replaced at intervals, DOTC recognizes such parts as individual assets with specific useful lives and depreciates them accordingly. Likewise, when a major repair/replacement is done. its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized as expense in surplus or deficit as incurred.

Depreciation

Each part of an item of PPE with a cost that is significant in relation to the total cost of the item is depreciated separately.

The depreciation charge for each period is recognized as expense unless it is included in the cost of another asset.

Initial Recognition of Depreciation

Depreciation of an asset begins when it is available for use such as when it is in the location and condition necessary for it to be capable of operating in the manner intended by management.

For simplicity and to avoid proportionate computation, the depreciation is for one month if the PPE is available for use on or before the 156 of the month. However, if the PPE is available for use after the 15th of the month, depreciation is for the succeeding month.

Depreciated Method

The straight line method of depreciation shall be adopted unless another method is more appropriate for agency operation.

Estimated Useful Life

DOTC uses the Schedule on the Estimated Useful Life of PPE by classification prepared by COA.

DOTC uses a residual value equivalent to at least 5% of the cost of the PPE. The effect of the change of residual value from 10% to 5% of the cost of the PPE effective 2014 was recorded as an adjustment to Accumulated Surplus in

10



2015. However, DOTC-CAR and DOTC-CARAGA will apply the change in accounting estimate only in 2016, any adjustment will be charged to Accumulated Surplus/(Deficit) account.

Impairment

An asset's carrying amount is written down to its recoverable amount, or recoverable service amount. if the asset's carrying amount is greater than its estimated recoverable service amount. However, DOTC has not recognized any impairment in 2015. The effect of the recognition of impairment of PPE shall be recorded as an adjustment to Accumulated Surplus in 2016.

Derecognition

DOTC recognizes items of property, plant and equipment and/or any significant part of an asset upon disposal or when no future economic benefits or service potential is expected from its continuing use. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the surplus or deficit when the asset is derecognized.

3.4 Changes in accounting policies and estimates

DOTC recognizes the effects of changes in accounting policies retrospectively. The effects of changes in accounting policy are applied respectively if retrospective application is impractical.

DOTC recognizes the effects of changes in accounting estimates prospectively by including in surplus or deficit.

DOTC correct material prior period errors retrospectively in the first set of financial statements authorized for issue after their discovery by:

• Restating the comparative amounts for prior period(s) presented in which the error occurred: or

• If the error occurred before the earliest prior period presented, restating the opening balances of assets, liabilities and net asset/equity for the earliest prior period presented.

3.5 Foreign currency transactions

Transactions in foreign currencies are initially recognized by applying the spot exchange rate between the function currency and the foreign currency at the transaction.



At each reporting dale:

• Foreign currency monetary items are translated using the closing rate; • Nonmonetary items that are measured in terms of historical cost in a

foreign currency shall be translated using the exchange rate at the date of the transaction; and

• Nonmonetary items that are measured at fair value in a foreign currency shall be translated using the exchange rates at the date when the fair value is determined.

Exchange differences arising (a) on the settlement of monetary items, or (b) on translating monetary items at rates different from those at which they are translated on initial recognition during the period or in previous financial statements, are recognized in surplus or deficits in the period in which they arise, except as those arising on a monetary item that forms part of a reporting entity's net investment in a foreign operation.

3.6 Revenue from non-exchange transactions

Recognition and Measurement of Assets from Non-Exchange Transactions

An inflow of resources from a non-exchange transaction, other than services in-kind, that meets the definition of an asset are recognized as an asset if the following criteria are met:

• It is probable that the future economic benefits or service potential associated with the asset will flow to the entity; and

• The fair value of the asset can be measured reliably.

An asset acquired through a non-exchange transaction is initially measured at its fair value as at the date of acquisition.

Taxes

Taxes and the related fines and penalties were recognized when collected or when these were measurable and legally collectible. The related refunds, including those that were measurable and legally collectible were deducted from the recognized tax revenue.

Fees and fines not related to taxes

DOTC recognizes revenues from fees and fines except those related to taxes, when earned and the asset recognition criteria are met. Deferred income is recognized instead of revenue if there is related condition attached that would give rise to a liability to repay the amount. Other non-exchange revenues were recognized when it is probable that the future economic benefits or service

12



potential associated with the asset will flow to the entity and the fair hlue of the asset can be measured reliably.

Gifts and donations

DOTC recognizes assets and revenues from gifts and donations when it is probable that the future economic benefits or service potential will flow to the entity and the fair value of the asset can be measured reliably.

Goods in kind are recognized as assets when the goods are received, or there is a binding arrangement to receive the goods. If goods in kind are received without conditions attached, revenue if recognized immediately. If conditions are attached, a liability is recognized, which is reduced and revenue recognized as the conditions are satisfied.

On initial recognition. gifts and donations including goods in kind are measured at their fair value as at the date of acquisition, which were ascertained by reference to an active market, or by appraisal.

An appraisal of the value of an asset is normally undertaken by a member of the valuation profession and relevant professional qualification. For many assets, the fair value is ascertained by reference to quoted prices in an active and liquid market.

Transfers

DOTC recognizes an asset in respect of transfers when the transferred resources meet the definition of an asset to satisfy the criteria for recognition of an asset, except those arising from services in kind.

Transfers from other government entities

Revenues from non-exchange transactions with other government entities and the related assets were measured at fair value and recognized on obtaining control of the asset (cash, goods, services and property) if the transfer is free from conditions and it is probable that the economic benefits or service potential related to the asset will flow to DOTC and can be measured reliably.

3.7 Revenue from Exchange Transactions

Measurement of revenue

Revenue shall be measured at the fair value of the consideration received or receivable.

13


For the y ear ended December 31. 2015

Rendering of services

DOTC recognizes revenue from rendering of services by reference to the stage of completion when the outcome of the transaction can be estimated reliably. The stage of completion is measured by reference to labor hours.

When the contract outcome cannot be measured reliably, revenue is recognized only to the extent that the expenses incurred are recoverable.

Sale of Goods

Revenue from the sale of goods are recognized when the significant risk and reward of ownership have been transferred to the buyer, usually on delivery of the goods and when the amount of revenue can be measured reliably and it is probable that the economic benefit and service potential associated with the transaction will flow to DOTC.

Interest Income

Interest income is accrued using the effective yield method. The effective yield discounts estimated future cash receipts through the expected life of the financial asset to that asset's carrying amount. The method applies this yield to the principal outstanding to determine interest income each period.

Dividends

Dividends or similar distribution are recognized when DOTC's right to receive payment is established.

Rental Income

Rental income arising from operating leases on investment properties is accounted for on a straight line basis over the lease terms and included in revenue.

3.8 Budget information

The annual budget is prepared on a cash basis and is published in the government website.

A separate Statement of Comparison of Budget and Actual Amounts (SCBAA) was prepared since the budget and the financial statements are not prepared on comparable basis. The SCBAA is presented showing the original and final budget and the actual amounts on comparable basis to the budget. Explanatory comments are provided in the notes to the annual financial statement. The annual budget figures included in the financial statements are for the DOTC as the controlling entity. These budget figures were those approved by the

14


For the year ended December 3I. 2015

governing body both at the beginning and during the year following a period of consultation with the public.

3.9 Related Parties

DOTC regards a related party as a person or an entity with the ability to exert control individually or jointly, or to exercise significant influence over DOTC, or vice versa.

Members of key management are regarded as related parties and comprise the members of the Planning and Management Committee of DOTC such as: the Secretary, Undersecretaries. Assistant Secretaries, Regional Director, Executive Directors, Directors and Division Chiefs.

3.10 Borrowing costs

The benchmark treatment is used by DOTC in the recognition of borrowing costs pertaining to loans borrowed by the National Government (NG) which were recorded in the Bureau of the Treasury. Under the benchmark treatment, borrowings costs were recognized as expense in the period in which they were incurred, regardless of how the borrowings were applied.

3.11 Measurement of uncertainty

The preparation of financial statements in conformity with PPSAS, requires management to make estimates and assumptions that affect the reporting amounts of assets and liabilities, and disclosures of contingent assets and liabilities, at the date of the financial statements and the reported amounts of the revenues and expenses during the period.

Estimates are based on the best information available at the time of preparation of the financial statements and are reviewed annually to reflect new information as it becomes available. Measurement uncertainty exists in those financial statements. Actual results could differ from these estimates.

4. Prior Period Adjustments

DOTC has determined that errors affecting prior years are corrected using the Accumulated Surplus/(Deficit) account. As a result, recording of last years' expenses as prior period adjustments in the current year decreased balance of the Accumulated Surplus/(Deficit).

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5. Cash and Cash Equivalents

Accounts 2015

(in Php)

Cash in Bank - Loral Currency, Current Account 34,461,239 02

Cash in Bank — Foreign Currency Savings Account 159 132 497.25

Total Cash and Cash Equivalents 193,593,736.27

5.1 Cash in Bank — Local Currency, Current account represents the balance of the peso equivalent of the USD1,000,000.00 transferred from the Dollar Savings Account authorized per Loan Agreement.

5.2 Cash in Bank — Foreign Currency Savings account represents balance of the funding requirement for the Project per NCA No. BNB-A-15-0010252 dated July 7, 2015 amounting to USD5,000,000.00 or P225,194,534.75, net of bank charges of USS10.33 or P465.25.

6. Other Cut-rent Assets

Other Current Assets represents Advances to Contractors amounting to P30,758493 75, paid to Kunhwa Engineering & Consulting Co., Ltd , contracted for the Detailed Engineering Design and Construction Supervision for the Cebu BRT Project

7. Property, Plant and Equipment

Construction in Progress amounting to P804,354.79 represents mainly the payment of remuneration of job order personnel of the project and the National Project Management Office for the BRT Project.

8. Financial Liabilities

Accounts Payable represents the accrued consultancy services rendered by Gyeng Chill Kim and representation expenses incurred by Atty. Rafael Yap during meetings relative to the Project.

9. Inter-Agency Payables

Due to Bureau of Internal Revenue (SLR) represents the withholding taxes deducted from the payments for remuneration and other expenses of the project paid in December 2015.

16


For the year ended December 31 2015

10. Service and Business Income

Business Income represents interest income earned on the foreign currency savings deposit maintained with die LBP-DOTC Extension Office Branch for the period from July-December 2015. This Income was remitted to the Bureau of the Treasury.

11. Maintenance and Other Operating Expenses

Accounts 2015

(in Php) Travelling Expenses

Travelling Expenses Local 51,890 88

Professional Services Consultancy Services 4,193,962 00

Other Maintenance and Operating Expenses Representation Expenses 11,106 10

Total Maintenance and Other Operating Expenses 4,256,958.98

The above expenses should be capitalized, thus, shall be reclassified to Constmction in Prouress in 2016.

12. Financial Expenses

Bank charges represents the fees incurred in relation to its checking account transactions.

13. Net Financial Assistance/Subsidy

Accounts 2015

(in Php) Financial Assistance/Subsidy from NGAs

Subsidy from National Government 227,289,292 00 Total Financial Assistance/Subsidy from NGAs 227,289,292.00

Less: Financial Assistance/Subsidy to NGAs Net Financial Assistance/Subsidy 227,289 292 00

13.1 Subsidy from National Government



Particulars Amount (in Php)

Receipt of Working Fund 225,195.000.00 Receipt of NCA 1,636,378.56 Tax Remittance Advice 478,592.44 Adjustment to Receipt of NCA and Corresponding TRA (20,679.00) Subsidy from National Government 227,289,292.00

14. Comparison of Actual and Budget Amounts

14.1 The Annual budget is prepared on a cash basis and is published in the government website.

14.2 As a result of the adoption of the cash basis for budgeting purposes, a separate Statement of Comparison of Budget and Actual Amounts is prepared showing the basis, timing and entity differences.

14.3 The annual budget figures included in the financial statements are for the Cebu Bus Rapid Transit Project of the DOTC-CO and therefore exclude the budget of other projects and its attached agencies. These budget figures are those approved by the governing body at the beginning and during the year following a period of consultation with the public.

14.4 There were only two contracts awarded for the year. The lack of technical personnel to handle the different phases of the procurement and the volume of infrastructure projects to be bid out contributed to the slow procurement process. Ultimately. there was under spending of the allotments released for the year.

14.5 The actual amounts under Receipts pertain to Income earned from the deposits and Working Fund received from the World Bank. Payments pertain to cash/check disbursements.

15. Allotment, Obligations and Balances

PARTICULARS CATEGORA ALLOTMENT OBLIGATION

INCURRED REVERTED BALANCE

(in PM')

CURRENT:

Road and Bridges CO

Traffic Decongestion Cebu BRT Project Peso Comacipart 703.416.668.13 0.00 0.00 703.416-668. ❑

Loan Proceeds 682.304 87 231.944 968 21 0.00 450.359.563.66

Tor& 1385,721,000.00 231.94 1684.1 0.00 1,153,776.031.79

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15.1 Allotment released for CY 2015 General Appropriations Act (RA. 10651) for Cebu Bus Rapid Transit (BRT) Project amounted to P1.385.721.000.00 while obligations incurred amounted to P231944.968.2. The balance of P1,153,776,031.79 is extended to CY 2016.

15.2 The obligations of P231,944,968.21 includes obligations of P47,434.304.73 paid in 2015, P49,559,021.72 recorded as Accounts Payable, P2,124,716.99 due and demandable, and P182,385,946.49 not yet due and demandable.

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audited financial statements€¦ · financial position as of 31 december 2015 and the related...

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